“In our 27 March Trend Alert we forecast that a global economic slowdown and weakening corporate earnings in the U.S., coupled with the fading positive effects of President Donald Trump’s tax bill, would compel the U.S. Federal Reserve “to lower interest rates before economic conditions markedly deteriorate.”
The global and national economies are deteriorating. From Emerging markets to developed nations, equity markets are falling and the great corporate stock buy-back trend that dramatically boosted the U.S. stock markets is now slowing as corporations are buying back less of their stocks.
As evidenced by recent data, U.S. durable goods orders and capital spending have declined. A recent IHS Markit survey revealed a “notable slowdown” in the services sector while manufacturing fell to a 9-year low in May.
On the retail front, sales dropped for the second time in three months, sliding 0.2 percent from the previous month in April. On the home buying front, despite mortgage rates declining, existing home sales posted their 14th straight month of annual declines in April.
And now, with the 10-year Treasury note yield falling to 2.26 on Wednesday while the 3-month bill yielded 2.36 percent, the yield curve inversion is seen as a warning sign by Wall Street of recession on the horizon considering that an inverted yield curve preceded every recession since 1975.
- Source, King World News, Read More Here
