Time for a Recession? 9.29.17

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.

Key Points…

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.

Action Points…

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

Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *