Equity Volatility vs. Equity Allocation As equity volatility rises (inverted on the chart), equity allocations come down. You may alos like “The Yield Curve Leads VIX (Volatility) by Three Years.” Picture Source: Deutsche Bank
U.S. Recession Risk Indicators An inverted yield curve and gloomy confidence expectations generally do not bode well. Image: Oxford Economics, Macrobond
Fed Funds Target Rate and VIX Is more volatility expected ahead? This great chart suggests that the Fed funds target rate leads VIX by 2 years. You may also like “VIX is in a Transitory State” and “The Yield Curve Leads Volatility by Three Years.” Image: Bloomberg, Jeffrey Kleintop
S&P 500 vs. Percentage of Sectors at All-Time Highs Currently, only three sectors are at all-time highs, while 60% of the yield curve is inverted. Image: Crescat Capital LLC
New York Fed Probability of Recession in Next 12 Months since 1990 When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term economic outlookis poor and that the yields offered by long-term fixed income securities will continue to decline. Since 1962, no recession has occurred without an inverted…
Lower Returns for Stocks in the Next 12 Months? Morgan Stanley’s cyclical indicator is flagging “downturn.” The yield curve’s slope, debt issuance, consumer confidence, economic and financial markets data are aggregated in Morgan Stanley’s cyclical indicator. The entry into the “downturn” phase suggests lower returns for stocks and risky assets in the next 12 months. Image:…
What Indicators to Watch for Signs a U.S. Recession Is Coming? 1) In recent history, a recession occurs about 12 to 18 months after the spread between the 30-year and the 3-month treasury yields turns negative (red arrow). When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term…
Why the Current Business Cycle Can Continue? Even if we are in a late business cycle, real Fed funds rate is near zero, the Fed remains “patient” at the moment and has little influence on the long end of the yield curve. The 30-Year Treasury Rate minus 10-Year Treasury Rate spread has a normal upward…
Watch Warren Buffett’s full interview with CNBC’s Becky Quick In this interview, Warren Buffett speaks about rail road, Berkshire Hathaway, economic slowdown, yield curve, recession, stock vs. bond, airlines & automotive industry, capitalism, inequality, benefits of free trade, IPOs, entertainment industry, Apple, American Express, Wells Fargo, real estate commission, philanthropy with 2% of GDP, odds,…
‘There is an inevitable recession in the near term,’ says analyst Could S&P 500 fall 40% by the end of 2019? Octavio Costa, global macro analyst at Crescat Capital, discusses this possibility in regard to the yield curve inversion.