Wed August 7, 2019
The ten year note now yields less that the 3 month T Bill. Normally investors demand a higher yield for assuming a longer holding period, most anything can happen in ten years.
The black line is IRX the three month yield. The red bars are the ten year yield, now beneath the three month yield.
Since 1974, 45 years, an inverted yield curve has always predicted a recession. Given the 700+ point drop i the DJIA, weakness in world stock markets, a trade war spinning out of control, riots in the streets of Moscow and Hong Kong, a new low in the British pound, soaring gold and silver prices, there is reason for concern.
The XES Energy Service ETF broke below 8.00 yesterday continuing to telegraph weakness in the energy sector.
XLE Energy
I suspect thee 58 level falls today, oil is trading down pre market this morning. That suggests a re test of the December lows.
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