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10 Year Yield Drops Below 2-Year rate for First Time Since 2007
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NCeagle Offline
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10 Year Yield Drops Below 2-Year rate for First Time Since 2007
Quote:American equity-index futures slumped alongside stocks in Europe as weak data from two of the world’s biggest economies overshadowed an apparent de-escalation in the trade war. Treasuries and European bonds rallied, with key parts of both the U.S. and U.K. yield curves inverting.


Data showing Germany’s economy contracted in the second quarter and weak Chinese retail and industrial numbers had a slow-burn effect on markets. Futures for all three major U.S. indexes extended their declines alongside the Stoxx Europe 600 Index through the morning, accelerating as the yield on 30-year Treasuries dropped to a record and the gap between that of two- and 10-year debt inverted for the first time since 2007.

The British yield curve also inverted for the first time since the financial crisis and the pound edged higher after inflation unexpectedly rose. Government bonds rallied across Europe, with the yield on benchmark bunds hitting another record low. Before the sell-off took hold, stocks in Asia had advanced, tracking Tuesday’s rally on Wall Street. The dollar was steady.

U.S. and U.K. yield curves invert for the first time since the financial crisis
The inverted yield curves, considered a recession warning signal by many analysts, are spooking investors already seeking shelter from the fraught geopolitical climate and the impact of the global trade war. The data from China and Germany added to the gloomy outlook for economic growth on Wednesday, souring the mood after President Donald Trump’s decision to delay tariffs on Chinese imports had eased some tension.

“This is not a positive sign for the market,” Jonathan Golub, chief U.S. equity strategist at Credit Suisse, said on Bloomberg TV. “The Fed is totally empowered to change this dynamic and the market is saying they have to.”

Meanwhile, Hong Kong’s airport resumed normal operations after a chaotic night of protest in which demonstrators beat and detained two suspected infiltrators and Trump warned of Chinese troops massing on the border.

Elsewhere, oil deepened losses through the European day, while gold reversed a drop as investors sought safer assets. The yen jumped, erasing more than half of its Tuesday slump and the Swiss franc rallied.

Here are the main moves in markets:

Stocks
Futures on the S&P 500 Index dipped 1.4% as of 8:22 a.m. New York time.
The Stoxx Europe 600 Index fell 1.5%.
The U.K.’s FTSE 100 Index dropped 1.3%.
Germany’s DAX Index sank 2%.
The MSCI Emerging Market Index rose 0.2%.
The MSCI Asia Pacific Index jumped 0.9%.
Currencies
The Bloomberg Dollar Spot Index fell 0.1%.
The euro increased 0.2% to $1.1188.
The British pound climbed 0.1% to $1.2073.
The Japanese yen jumped 0.8% to 105.90 per dollar.
Bonds
The yield on 10-year Treasuries sank 10 basis points to 1.60%.
The yield on two-year Treasuries declined seven basis points to 1.60%.
Britain’s 10-year yield fell three basis points to 0.465%.
Germany’s 10-year yield declined three basis points to -0.64%.
Commodities
Gold rose 0.8% to $1,513.79 an ounce.
West Texas Intermediate crude decreased 3.4% to $55.16 a barrel.


https://www.bloomberg.com/news/articles/...markets-vp



I hope everybody is getting ready for the upcoming recession.

Hopefully it isn't near as bad as the 08 recession.
08-14-2019 07:45 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
I wonder if the D's will jump all over this? It's not the harbinger of doom some folks like the suggest as there are ways (Fed) to correct the slope.
08-14-2019 08:11 AM
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NCeagle Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:11 AM)VA49er Wrote:  I wonder if the D's will jump all over this? It's not the harbinger of doom some folks like the suggest as there are ways (Fed) to correct the slope.

well it's a mixture of multiple things, not just this. It is definitely something that people need to be keeping an eye on.
08-14-2019 08:18 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:18 AM)NCeagle Wrote:  
(08-14-2019 08:11 AM)VA49er Wrote:  I wonder if the D's will jump all over this? It's not the harbinger of doom some folks like the suggest as there are ways (Fed) to correct the slope.

well it's a mixture of multiple things, not just this. It is definitely something that people need to be keeping an eye on.

I agree; however, there have been several instances where the curve inverted and no recession occured. I have a theory that we are going to start seeing more and more recession headlines as we get closer to the election, for obvious reasons.
08-14-2019 08:20 AM
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appst89 Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.
08-14-2019 08:26 AM
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NCeagle Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:26 AM)appst89 Wrote:  The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.


you do realize that the Fed isn't controlled by "the dims", right?
08-14-2019 08:42 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:42 AM)NCeagle Wrote:  
(08-14-2019 08:26 AM)appst89 Wrote:  The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.


you do realize that the Fed isn't controlled by "the dims", right?

Not to speak for appst; however, IMO, he's not talking about the Fed. We've already seen it from Warren and I expect it to only grow in intensity as we approach 2020.
08-14-2019 08:45 AM
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NCeagle Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:45 AM)VA49er Wrote:  
(08-14-2019 08:42 AM)NCeagle Wrote:  
(08-14-2019 08:26 AM)appst89 Wrote:  The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.


you do realize that the Fed isn't controlled by "the dims", right?

Not to speak for appst; however, IMO, he's not talking about the Fed. We've already seen it from Warren and I expect it to only grow in intensity as we approach 2020.

the fact that he thinks democrats could put us into a recession in itself is a stupid argument.

Anybody who follows the economy closely has seen a potential recession coming for over the last year.

High risk loans being given out at a higher rate than ever before.
Mortgage defaults climbing
Feds drop interest rates, and now 10 year yields drop

These aren't some democrat conspiracies to put us into a recession so they can win an election.
08-14-2019 08:51 AM
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appst89 Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:42 AM)NCeagle Wrote:  
(08-14-2019 08:26 AM)appst89 Wrote:  The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.


you do realize that the Fed isn't controlled by "the dims", right?

Did I say anything about the Fed?
08-14-2019 09:00 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 08:51 AM)NCeagle Wrote:  
(08-14-2019 08:45 AM)VA49er Wrote:  
(08-14-2019 08:42 AM)NCeagle Wrote:  
(08-14-2019 08:26 AM)appst89 Wrote:  The dims, along with the MSM propaganda machine. are going to do everything possible to put us into a recession before the 2020 election. It is the only chance they have to defeat Trump.


you do realize that the Fed isn't controlled by "the dims", right?

Not to speak for appst; however, IMO, he's not talking about the Fed. We've already seen it from Warren and I expect it to only grow in intensity as we approach 2020.

the fact that he thinks democrats could put us into a recession in itself is a stupid argument.

Anybody who follows the economy closely has seen a potential recession coming for over the last year.

High risk loans being given out at a higher rate than ever before.
Mortgage defaults climbing
Feds drop interest rates, and now 10 year yields drop

These aren't some democrat conspiracies to put us into a recession so they can win an election.

It's not they they themselves could actually put us into recession. That was never really the point. The point is they can try and exploit every economic hiccup to try and influence that the next great depression is coming soon. Economist have been predicting a 2020 recession for about the last 3 years and not based on anything Trump has done. I mean, we have been in a decade + bull market and that can't last forever. Loans may be riskier, but no where near like the risk we say pre past recession.
08-14-2019 09:19 AM
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gdunn Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
Heard an expert just now and said it’s not truly inverted but the Fed isn’t doing what it should during a rock solid economy. If it was to cut 100 points the curve is. I longer inverted and shows that a recession is far away
08-14-2019 10:33 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 10:33 AM)gdunn Wrote:  Heard an expert just now and said it’s not truly inverted but the Fed isn’t doing what it should during a rock solid economy. If it was to cut 100 points the curve is. I longer inverted and shows that a recession is far away

Well, in a rock solid economy, IMO, the Fed shouldn't be cutting interest rates anyway. That's apparently not the case at the moment. I get the Fed's reasoning in that the cut is a hedge against tariffs and softening global markets. in the past the Fed cut rates to correct inverted yield curves, it may decide to do so again if the curve stays inverted.

Edit: Looks like the yield curve is no longer inverted, at least for now.
(This post was last modified: 08-14-2019 10:49 AM by VA49er.)
08-14-2019 10:45 AM
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 10:45 AM)VA49er Wrote:  
(08-14-2019 10:33 AM)gdunn Wrote:  Heard an expert just now and said it’s not truly inverted but the Fed isn’t doing what it should during a rock solid economy. If it was to cut 100 points the curve is. I longer inverted and shows that a recession is far away

Well, in a rock solid economy, IMO, the Fed shouldn't be cutting interest rates anyway. That's apparently not the case at the moment. I get the Fed's reasoning in that the cut is a hedge against tariffs and softening global markets. in the past the Fed cut rates to correct inverted yield curves, it may decide to do so again if the curve stays inverted.

Edit: Looks like the yield curve is no longer inverted, at least for now.

One of the guys explained it this morning that the Fed has us 200 basis points higher than the rest of the planet. It really is out of kilter.
08-14-2019 10:51 AM
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VA49er Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 10:51 AM)UofMstateU Wrote:  
(08-14-2019 10:45 AM)VA49er Wrote:  
(08-14-2019 10:33 AM)gdunn Wrote:  Heard an expert just now and said it’s not truly inverted but the Fed isn’t doing what it should during a rock solid economy. If it was to cut 100 points the curve is. I longer inverted and shows that a recession is far away

Well, in a rock solid economy, IMO, the Fed shouldn't be cutting interest rates anyway. That's apparently not the case at the moment. I get the Fed's reasoning in that the cut is a hedge against tariffs and softening global markets. in the past the Fed cut rates to correct inverted yield curves, it may decide to do so again if the curve stays inverted.

Edit: Looks like the yield curve is no longer inverted, at least for now.

One of the guys explained it this morning that the Fed has us 200 basis points higher than the rest of the planet. It really is out of kilter.

The US economy is doing better than the rest of the planet, thus the higher interest rates. Fed waited a decade to raise rates, it was due. The economy had to get off the drug at some point after the recession.
08-14-2019 11:35 AM
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BuffaloTN Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 10:51 AM)UofMstateU Wrote:  
(08-14-2019 10:45 AM)VA49er Wrote:  
(08-14-2019 10:33 AM)gdunn Wrote:  Heard an expert just now and said it’s not truly inverted but the Fed isn’t doing what it should during a rock solid economy. If it was to cut 100 points the curve is. I longer inverted and shows that a recession is far away

Well, in a rock solid economy, IMO, the Fed shouldn't be cutting interest rates anyway. That's apparently not the case at the moment. I get the Fed's reasoning in that the cut is a hedge against tariffs and softening global markets. in the past the Fed cut rates to correct inverted yield curves, it may decide to do so again if the curve stays inverted.

Edit: Looks like the yield curve is no longer inverted, at least for now.

One of the guys explained it this morning that the Fed has us 200 basis points higher than the rest of the planet. It really is out of kilter.

The rest of the planet has gone full retard with negative rates. It's a s hit show out there no doubt. Glad I'm not retired and on a fixed income. By the stocks with good balance sheets and decent yields and ride those dividends out.
08-14-2019 11:40 AM
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shere khan Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
Democrats hate America.
08-14-2019 12:37 PM
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
We're the kids in America
08-14-2019 03:22 PM
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Kronke Offline
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 03:22 PM)fsquid Wrote:  We're the kids in America

Once you grow up, you'll realize you didn't know shite.
08-14-2019 03:56 PM
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
(08-14-2019 03:56 PM)Kronke Wrote:  
(08-14-2019 03:22 PM)fsquid Wrote:  We're the kids in America

Once you grow up, you'll realize you didn't know shite.

Still don't that's what drives me every day.
08-14-2019 04:07 PM
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Fort Bend Owl Online
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RE: 10 Year Yield Drops Below 2-Year rate for First Time Since 2007
https://slate.com/business/2019/08/reces...rmany.html

This article talks about three potential solutions. One the Fed could cut interest rates.

Two - Congress could stimulate the economy by 'borrowing a whole boatload of cash and spending it on upgrading our rotting transportation networks. Thirty-year Treasury bonds are trading at around 2 percent right now, and threatening to drop lower—meaning the government can borrow for practically nothing for three decades at a time. Maybe we should take advantage of that? Fix some subways? Repair some roads? Make good on one of Donald Trump’s central campaign promises, even if it mildly hurts the Democrats’ chances in 2020?'

"Finally, Trump himself could call off the so-far ineffective trade war he’s been waging without much strategy or direction. We know the trade war is causing trouble for American farmers, despite the administration’s bailout. As I mentioned above, it’s also pretty clearly hurting domestic business investment. And as Neil Irwin writes at the New York Times, it’s driving global trouble too. Our tariffs seem to be putting a dent in China’s factory production and scaring Chinese consumers out of spending. Trump almost surely sees this as a plus, but as a result, Germany is exporting fewer cars to the People’s Republic, which is weighing on its own growth, which is bad for all of Europe. And the weaker the world economy gets, the more likely it is that companies everywhere will cut back on hiring."

The problem with #2 and #3 is the first one will require leadership in Congress to work together. And that hasn't been happening lately. And the third solution is Trump will have to admit he's wrong about something. And he doesn't do that ever either.

So his solution for now is to blame the Fed and call the Fed chair clueless, which is sad because he's a Republican whom Trump appointed.
08-14-2019 04:18 PM
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