Bonds are sending a potentially ominous signal about the U.S. economy. The 10-year Treasury yield fell below the 3-month Treasury yield on March 22 for the first time since August 2007. Yield curve inversion, or long-term rates falling below short-term rates, has preceded each of the nine recessions going back to 1955.
Fed presidents comment on yield curve inversion, balance sheet plans. Chicago Federal Reserve (Fed) president Evans acknowledged investors’ concerns about the recent yield curve inversion and noted the Fed is watching closely, though he suggested structural changes (lower trend growth and lower real interest rates) and the secular (long-term) downtrend in long-term interest rates indicate a flatter yield curve is more natural. Continue reading
Stocks have had quite a run since the December 24 lows, with the S&P 500 Index up 19% to within 5% of last year’s record highs. Given this move in stocks, we believe it is prudent to readjust domestic equity allocations back to market weight.
We are bringing our recommended domestic equity allocation back to market weight. Stocks have had quite a run this year, with the S&P 500 Index up 12% year to date and 19% since the December 24 lows. The index now sits just 5% below record highs set on September 20, 2018. Continue reading
Stocks Drop, Yield Curve Inverts on Renewed Global Growth Concerns.
US: S&P 500 Index -0.8%%, Dow -1.3%, Nasdaq -0.6%
Europe: STOXX Europe 600 -1.3%, German DAX -2.8% France CAC 40 -2.5%, U.K. FTSE 100 +1.8%
Asia: Japan Nikkei +0.8%, China Shanghai Composite +2.7%, Korea KOSPI +0.5%
Rates/Commodities: 10-Year Treasury yield -15 basis points to 2.44%, WTI crude oil +2.5%, COMEX gold: +0.5%
A topsy-turvy week for global financial markets saw U.S. and European stocks shed early-week gains and several measures of the Treasury yield curve invert for the first time since 2006 following a resurgence in global growth concerns. Continue reading
We recently introduced a new two-minute video series, Street View, to provide investors with top market, economic, and investment insights from Chief Investment Strategist John Lynch, along with other senior strategists on the LPL Research team.
The Federal Reserve (Fed) has doubled down on its patient stance. Policymakers signaled a complete pause in policy at the conclusion of the Fed’s March meeting, with a nod to a slowing pace of growth and global uncertainty.
After dropping nearly 20% late last year, the S&P 500 Index has officially bounced up more than 20% from the December 24 lows. As we noted at the time, most bear markets that take place in a non-recessionary environment tend to bottom near a 20% correction. Fortunately, that played out nicely, and now the S&P 500 is less than 4% away from new highs. This raises two new questions: Can it make a new high, and when can we expect it?