OPER News and Press, ETF Series Solutions ClearShares Ultra-Short Maturity From 12/21/22

Summary Cam Harvey, a professor at Duke University, downplays the risk of recession currently forecast by the negative spread of the 3-month yield less its 10-year counterpart. The yield curve (and its variations) still deserves to be on the short list of analytics for monitoring and fo...

Summary The S&P 500 is down just over 20% since January 4th and a seasonally unusual -6.4% month to date. Sentiment reports may appear bearish, but equity positioning, especially in household portfolios, remains (as shown below in yellow) near the secular peaks of 1966, 2000 and 202...

Summary The inversion of 80% of the 10 economically important yield curves suggests a recession is likely. While many hope the Federal Reserve will “pivot,” such may not be as immediately “bullish” as many expect. As yields plummet, bond prices rise as in...

Summary Instead of rate expectations moving higher, the near-term rate expectations hardly changed, while the 2024 federal funds implied rate expectations dropped. The yield curve became much more inverted, with short-term rates exceeding long-term yields by a larger margin. Increas...

Summary Recession is foretold, in our view, as central banks crush demand to bring down inflation. We think markets are wrong to expect them to later come to the rescue. U.S. stocks fell and the Treasury yield curve inverted its most since the early 1980s. We see recent moves as reflect...

Summary The Fed’s mandate is stable prices and maximum employment. For now, employment, wages and inflation momentum are still too strong to warrant a Fed pivot. If Powell and the Fed fail to tame inflation, then their heads are on the chopping block. They know this and they will...

Summary Amid the crosscurrents, two themes have prevailed during the post-pandemic years, which lend some perspective to the macroeconomic roadmap ahead: namely, the bipolar swings in macro policy and the forces of economic normalization. After one of the worst years for fixed income as...

Summary Today, the yield curve is more inverted than at any time since the early 1980s, so many are saying that means the chances of a recession are pretty high. Yes, today the curve is very inverted, but real yields are not particularly high. Low spreads suggest the market is relat...

Summary At least one of two things should happen to warn that an official US recession is about to begin. One is a decline in the ISM Manufacturing New Orders Index (NOI) to below 48 and the other is a reversal of the yield curve’s trend from flattening/inverting to steepening. ...

Summary The 3-month/10-year Treasury curve inverted last Thursday on better-than-expected CPI news. If the 10-year note can stay below 4% until the end of 2022, we could see the stock market rally extend into Christmas. Powell can announce a pause in rate hikes at the December...