The Yield Curve
One of the most popular market-related discussions recently is on the yield curve. The reason being the yield curve (as measured by the 2-10 year Treasury spread) is at its flattest level since right before the financial crisis. Also, the past nine recessions have all been preceded by an inverted yield curve. It is important to note that the yield curve is not currently inverted, but that hasn’t stopped the masses from focusing on it. Here’s the catch, looking at the past five recessions shows that a recession didn’t officially start until an average of more than 21 months after the yield curve initially inverted. The S&P 500, meanwhile, added an average of nearly 13% over this timeframe and was higher in every single instance.
Shopping malls across the U.S. haven’t been this empty in six years. The mall vacancy rate for the second quarter is 8.6% up from 8.4% in Q1. Retailers such as, Sears, J.C. Penney and Toys “R” Us have all announced closures this year. (LINKedin)
Pepsi reported quarterly earnings. Their snack business, which includes brands like Doritos and Tostitos, grew 4 percent. Its North American beverage business, which includes Gatorade and its namesake cola, dropped 1 percent. Total revenue rose 2.4 percent. (CNBC)
S&P 500 is up 5 and the NASDAQ is up 21. The MSCI international index is higher.
Oil is up 11 cents at $74.25 a barrel.
Gold is down $9 at $1251 a Troy ounce.
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.