EOM Q&A: Garden Growing-Time for a Recession? 9.29.17
Please note: I am out of the office today. Any questions will be answered on Monday. Thank You-DOE
Today, I answer your question, “what am I watching to signal the next recession?”
One of the key items are Treasury yields–to see if/when long-term yields decline and short-term yield rise.
Here is an explanation from trusted associate Mike Shedlock-see below.
1. View the yield action at the 2000 top
2. View the yield action at the 2007 top
3. Check out the current yields-blue rectangle. See how the longer term yields are flattening and the short-term yields are increasing.
4. What will happen if/when shorter-term yields are higher than the longer-term yields as in 2000 and 2007?
Am I looking for a Recession to start in October? No. I am looking for a Recession in 2018 or 2019.
To monitor, here is my yield chart at stockcharts.com. Feel free to download.
1. Review the action in the red and green boxes
2. On a weekly basis, monitor the short-term yields in relation to the long-term 30 year-blue box
3. It can take years for the yield curve to flatten
4. Flattening yield curves do not signal a Recession 100% of the time
This may be the first time EOM Members can be in front of the eight-ball instead of behind it.
Next week, we analyze the Global markets for opportunitie$.
Enjoy your weekend!
David O. England