What are your thoughts on the yield curve inverting and the outlook for US Equities?

Discussion in 'Stocks' started by Tall Mike, May 27, 2023.

  1. I believe this is the first time the yield curve has inverted since 2006. After that, the next few years have been choppy for US Equities.

    Do you think it makes sense to lower exposure to stocks for the next few years? Or would this overall trying to time the market just hurt your returns in the long run?
     
  2. An inverted yield curve can mean: lower expected growth, lower expected inflation, or a mix of the two. For the markets to reach escape velocity, I think you’d need the yield curve to steepen first. Just my view.
     
  3. ktm

    ktm

    There's also some additional pressure here from the debt ceiling talks.
     
  4. kmiklas

    kmiklas

    Loving the 5%+ risk-free returns on near-term fixed-income securities. T bonds over 5%? Investment-grade corporates over 6%? It’s like printing money!

    It’s almost irrational to be in equities now.

    I hope the big fat belly of that inverted yield curve just keeps oozing forward.

    My kind of market!

    —Keith
    Non-professional - not licensed - opinion only
     
    birdman likes this.
  5. NoahA

    NoahA

    I don't have the charts handy, but following some great YT content I watch, I have come to learn that the shit hits the fan when the yield curves actually un-invert. So the steepening phase is perhaps the point where the titanic rises out of the water as it breaks in 2 and sinks??
     
    kmiklas likes this.
  6. ysettle

    ysettle

    any investment grade ETF's that yield 6% or more short term...Still finding a lot of corporate ETF stuck at 3-4%
     
  7. Overnight

    Overnight

    Hasn't the 2/10 been inverted for nearly a year now? Bit late to the party!
     
  8. Yeah that’s because the environment gets so bad that the fed has to drop short term rates. That’s what drives the steepening action. But I’d rather be buying around the bottom than near the top :)
     
    NoahA likes this.
  9. I wouldn't consider it "late" but rather just something to be aware of. The yield curve inverted in 2006 and 2007 and 2008 weren't the best years for equities.