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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
Quantum computing stocks are taking off in 2024. Is this the start of something big? Let’s take a closer look Google’s Chip Changes the Game Google’s new Willow chip, a 105-qubit processor, hit a big milestone: * Fixed Errors: It solved a 30-year problem by cutting down error
Government surveys that track the economy are failing. Budgets are shrinking, people are skipping surveys, and economic data we rely on is becoming less trustworthy. This is a big deal—because when the numbers are wrong, decisions that affect markets, businesses, and everyday life go wrong, too. Here’s what’
The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
The U.S. yield curve inversion, lasting since October 2022, is the longest on record. Historically, such inversions signal recessions by through credit contractions. We'll cover conflicting data on whether or not we'll have a recession.
The greatest fear an investor can have is losing all their gains on an investment from a recession... But hold your horses!
Despite our ongoing inversion (and the longest on record too.. 😳), some current economic data doesn't point to an imminent recession. Historically, yield curve inversions have been accurate predictors, but this time, several factors are mitigating the risk:
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Stocks Exploding with Value: In 2023 alone, the S&P 500 had returns excess of 26.2% and an additional 13.6% YTD. Markets may have already priced in the risks of a downturn.
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Continued Bank Lending: Banks are still lending, which is a positive sign for economic stability. In Q1 of 2024, FDIC-insured institutions reported net income of $64.2 billion, showing continued economic activity and access to credit for businesses and consumers.
A Weird Pattern in US Bank Interest Income
Also interesting and important to mention, if we look at the historical data, you can see that preceding most recessions, bank interest income inflated super quickly, and then we entered a recession. See below 👇
Pretty crazy right!? The spikes in total interest income often tie with the onset of recessions. While this observation might seem contradictory to the earlier points, it's important to know that each recession is different. While historical patterns are insightful, they are not predictive.
Impact of Anticipation and Misperceptions
The widespread discussion of the inversion has heightened recession expectations, leading businesses to cut excess preemptively. This proactive approach has reduced the severity of potential economic downturns.
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Resilient Businesses: Businesses adjusted to our anticipated conditions by cutting excesses and strengthening their financial positions, which mitigated the impact of our inversion. According to the S&P Global Market Intelligence report, economic growth is slowing, but banks improved their capital positions since 2008, allowing continued access to credit.
Our yield curve inversion is an important signal, but some of our data suggests that its effects could be less severe. The combination of continued bank lending, resilient corporate earnings, and low inflationary pressure provides a counterbalance to our traditional expectations.
Regardless– staying informed is crucial. You should continue to monitor these indicators and adjust their strategies accordingly, or subscribe to our newsletter and have us do it for you!