- Almost every commodity rose in prices last week, as did the dollar. Those two factors - rising dollar and rising commodity prices - mean the likelihood of recession in the coming year has risen significantly in just the last week.
- There was considerable volatility in stocks last week, but in the end, US stocks were only down modestly. Bonds and REITs were higher on the week, but the real winner was commodities.
- The 10-year Treasury yield is down over the last month but is still in a longer-term uptrend. The yield curve also flattened last week. That and a host of other markets we follow are getting uncomfortably near conditions we associate with recession. For now, it is a warning sign but doesn’t trigger a change in our strategic allocation.
For further details see:
Weekly market Pulse: Oil Shock