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January Yield Curve Update: Inching Closer

Published Wed, 02 Jan 2019 13:43:55 -0500 on Seeking Alpha

Still Lonely
My last look at the yield curve was titled “Won’t Anyone Care?” Other macro risks were taking center-stage, and it started seeming less important. Then, the day of publication, the 10-2 spread plunged 10 bps to 11 bps. Everyone did care for about five minutes, until the fast moving pace of news in December took over. The spread finished the year at 21 bps, as the short end backed off, right about where it ended in November. Our model is still predicting an inversion near the end of Q2. Also, the wacky final day of trading last year gave us this:

Source: US Treasury
Good lord that curve is ugly. The whole last two weeks of 2018 was the bull and the bear engaged in thermonuclear war for supremacy. The animal spirits are out. The 1-7 is currently inverted, with the 12-month spiking to 2.63% in the Treasury’s last print of the year, while the long end continued to drop.
My Copy-Paste Defend The Fed Rant
Pictured: December FOMC Presser. Source: Wikimedia Commons
Get used to this.
If you watch CNBC, you’d think Jerome Powell and the Fed were Genghis Khan and his hordes wreaking havoc across the steppe. Nothing could be farther from the truth, and they remain among the few responsible actors in this whole mess. If I hear one more guy in a trading badge say, “the Fed causes every recession,” as if there weren’t frequent depressions before central bank monetary control, my head might... 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
ZWEIG FUND 10.89   0.0 0.00 1.44 13.33
LIBERTY ALL STAR EQUITY FUND 6.54   0.0 0.00 0.82 9.94
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

CORNERSTONE TOTAL RETURN FUND - CRF
CORNERSTONE TOTAL RETURN FUND - CRF  


Older articles featuring Cornerstone Total Return Fund (CRF):
Negative-Yielding Debt: Monetary Contagion Spreads
The Dollar, High-Yield Bond Market And S&P 500 Revenue Growth
Two Yield Spreads Are Better Than One For Business Cycle Analysis
Equity CEFs: Where's The Beef In The Delaware Dividend & Income Fund?
Of Slopes And Flops: The Yield Curve Inversion
When A Yield Curve Inversion Means Recession
Ignore The Yield Curve, They Said...
Is The U.S. Yield Curve Signaling A U.S. Recession?
Short And Sharp: Yield Curve Inversion - A False Positive?
Weekly Edge: Yield Curve Sends Mixed Signals

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