Last night Apple warned and this morning the ISM posted an unexpectedly low PMI report.
Bond yields plunged.
Apple Cites “Mounting Uncertainty”: APPL Down 7% AH, Nasdaq Futures Down 2.3%
Sharp, Unexpected Decline in ISM Numbers Led by Plunge in New Orders
Debt Watch
Despite the flattening and now inverting yield curve, note that the spread between the 10-year and 7-year bond actually rose since January 1, 2018.
The spread between the 30-year long bond and the 10-year note is nearly what it was a year ago.
I believe this is a strong bond market signal that the end of the bond bull market approaches. It’s possible it’s already over. But I do expect one more strong push lower in yields as recession hits in 2019.
We have enormous deficits as far as the eye can see from a starting point of $22 trillion in debt.
Got Gold?
Mike “Mish” Shedlock
Yes it fell… but with an ISM of 54.1 New Orders, Production, and Employment are all still growing.
Markets are suffering because what the fed currently claims it would like to do doesn’t match up to what we all know they will ultimately do… And if the data ends up recessionary as you predict, or the market rout continues, then the Fed will go full dove, cut rates, QE and so on.
As revolting as that may be, I do not share your belief this confirms the end of the bond bull market. Regardless the deficit, if a central bank corners an asset class, it works.
“Regardless the deficit, if a central bank corners an asset class, it works.”
For awhile. Sooner or later, you run out anyone to rob with anything left to steal. And the higher a floor you attempt to put under overpriced assets in order to support your buddies, measured in terms on the productive output of the captives you can steal from, the sooner that “awhile” runs out.