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11 Things You Need to Know About the Yield Curve
Well, it finally happened—the yield curve inverted. Now note that it was the shorter end of the curve that inverted, as the 3-month Treasury bill (and 1-year T-bill) now yields more than the 10-year Treasury for the first time since 2007.
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Good News Indicators
The Conference Board’s Leading Economic Index (LEI) is one of our favorite economic indicators. It is designed to predict future movements in the economy based on a composite of 10 economic indicators (like manufacturers’ new orders, stock prices, and weekly unemployment claims) whose changes tend to precede shifts in the overall economy.
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March Madness for Yields
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.
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Weekly Economic Commentary | March 25, 2019
Investors are becoming increasingly impatient, even as the Federal Reserve (Fed) doubled down on patience at its March meeting. Policymakers signaled a complete pause in policy in a nod to slowing growth and global uncertainty, while Fed Chair Jerome Powell’s praise of domestic economic fundamentals rang hollow for financial markets.
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Weekly Market Commentary | March 25, 2019
Risk-reward trade-off in stocks has become less attractive following recent gains. Stocks have had quite a run this year, with the S&P 500 Index up 12% as of March 22, 2019, and 19% since the December 24 lows
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Bring Domestic Equities Recommedation Back to Market Weight
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.