Just happened: Yield curve inversion. Something big coming?

US market had a sell off yesterday. One of the reasons provided was the yield curve inverted thus signalling a recession is looming based on past historical statistics.


From CNBC Article yesterday. This is interesting. It makes it sound like the market is predictable with past patterns to follow. I always find it intriguing. Is it true the economy is going into shits again or is this a self fulfilling prophecy? As more and more people read the article , more and more people will sell into strength and the analyst can say " thats what I said tight?" I guess this is similar to technical analysis of stocks. When one indicator cross, some investors will take it as a buy sign. 

Below chart shows a recession follows shortly after yield inverted 3 times since 1990s. For reference!



This is also an interesting article on yield inversion. This!


What do you think? Is the big R Akan datang or is it all fake news? To me I prefer to pull out some money and stay at the side line for now. Things are getting more volatile with the trade war deal being push back, along with BREXIT decision.

Comments

  1. The 2s10s inversion more well known --- currently still haven't inverted yet. But anyway whether 3mth-10yr or 2s10s, after inversion usually still got another 6 months to 18 months bull & higher highs. Average is another 1 year of bull run.

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