Published Mon, 10 Dec 2018 07:46:13 -0500 on Seeking Alpha
There was one major economic event that occurred last week and it shifted the forward-looking focus of investors, sending stock prices sharply downward as a result.
That event was the partial inversion of the U.S. Treasury yield curve that took place on Tuesday, 4 December 2018. A yield curve inversion occurs whenever the yield, or interest rate, of a longer term bond or note issued by the U.S. Treasury Department falls below the level of a shorter term bond or note. This kind of event is often associated with an increased likelihood of an economic recession in the future, when businesses can expect to experience falling levels of earnings and cash flow, which is why stock prices would fall in the current day even though any economic distress is only in the potential outlook for the future and is not as yet guaranteed.
For a quick recent history of the Treasury yield curve, check out TheFirsh's two-minute long animated chart of the curve's history since 1990. Recessions followed within 1-2 years of significant yield curve inversions that occurred in 1989-90, 2000 and 2006-07 (the animation ends at the end of November 2018, so it doesn't capture the latest inversion).
On Tuesday, 4 December 2018, the yield of the 5-year Treasury dropped to lower than the yields of the 2-year and 3-year notes. Although the amount by which the 5-year note dropped below the 2- and 3-year notes is small, the negative implications of the event were amplified thanks to the highly... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|CORNERSTONE TOTAL RETURN FUND||11.49||0.0||0.00||2.74||22.16|
|VANGUARD EXTENDED DURATION TREASURY ETF||126.33||0.0||0.00||0.00||2.51|
|SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST||272.27||0.0||0.00||5.63||2.06|
|PROSHARES ULTRASHORT S&P 500||29.63||0.0||0.00||0.00||1.93|
|SPDR S&P 500 ETF||298.83||0.0||0.00||5.42||1.81|
|POWERSHARES QQQ TRUST SERIES 1||191.01||0.0||0.00||1.49||0.78|
|SPDR BARCLAYS CAPITAL 1-3 MONTH T-BILL ETF|
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