Daily Archives: Aug 13, 2019 at 07:39 am EDT

Bond Market Smells Recession. Will The Real Economy Follow?

Asset pricing is often mysterious as a source of figuring out exactly what Mr. Market is discounting, but in the case of bonds these days there’s no ambiguity about the crowd’s outlook. Recession is effectively a forgone conclusion, the yield curve is predicting. But while the real economy has slowed, growth remains strong enough to dispute the market’s forecast, at least for now. The question is when or if the hard data will align with market’s dark expectations?

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Macro Briefing | 13 August 2019

Hong Kong leader: protests have unleashed ‘chaos and panic’: Reuters
Fears of Argentina’s default trigger widespread selling: Bloomberg
Will Trump’s crackdown on immigration damage California’s economy? LA Times
China’s central bank weakens yuan/$ midpoint reference rate for 4th day: CNBC
German economic survey indicates ‘significant deterioration’ in outlook: ZEW
60% of S&P 500 stocks offer dividend yield above 10-year Treasury yield: WSJ
Bond market’s recession signal set to strength if 10yr-2yr gap inverts: CNBC
10yr Treasury yield sinks to 1.65% as risk-off sentiment strengthens: