|Liz Ann Sonders – Charles Schwab
Don’t Fear the Yield Curve Reaper
Summary: An inverted yield curve has been an indicator of past recessions, but the lag between the inversion and the market reversal is typically more than one and a half years. Sonders points out that stocks tend to perform well leading up to a yield curve inversion, and that many other factors that have historically signalled recessions are not flashing warnings signs. Overall, late-cycle indicators may be scaring investors, but they are not signalling a recession.