Bellevue Perspectives


Monday Minute

Pipe
  • The 2 and 10 year Treasury curve inverted last Wednesday, which is the latest addition to the growing list of investor anxieties (Hong Kong, Trade, Brexit, Europe slowdown, etc).  S&P 500 performance has historically been positive 12 months post inversion, but we wonder if this time is different given the proliferation of machine and algo trading and the possibility of them front-running the signal.  The S&P traded down over 2% on the day, following a strong performance the day before on news of the recently added tariffs being delayed until December. https://www.reuters.com/article/us-usa-stocks/wall-street-slides-as-recession-fears-grow-idUSKCN1V4172
  • Stocks trade higher Monday on Huawei sanction delays, President Trump urging Fed rate cuts of 100 basis points, and speculation of continued global easing by the central banks.  Long term Treasuries look a little over-extended short term and Gold looks to be consolidating in the 1500 per ounce range.  Both may indicate a rotation back to equities until investor attention turns  to the negative headlines again.  https://www.bloomberg.com/news/articles/2019-08-18/asia-stocks-set-to-start-week-higher-yen-flat-markets-wrap?srnd=premium

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