Stocks are rallying. The bond market is flashing a recession warning. How one expert explains the conundrum.

Markets are easier to understand when two of the world’s most liquid asset marketplaces are telling the same story about the economy.On the one hand, there’s the bond market, where the 2-year BX:TMUBMUSD02Y yield briefly was above the 10-year BX:TMUBMUSD10Y yield, and where other parts of the curve have been... Markets are easier to understand when two of the world’s most liquid asset marketplaces are telling the same story about the economy.

“The ‘recession is coming’ pundits argue that CPI inflation exceeding wage inflation will dampen consumer demand and rapidly reduce real GDP. This seems to be what the yield curve is contemplating,” says Bassman, who created the MOVE index measuring interest rate volatility during a storied career at Merrill Lynch.

The one market Bassman says is acting rationally is that for mortgage-backed securities, where the spreads between MBS and Treasurys are widening above their average. He says MBS are a better buy than a sell, which is why mortgage REITs have bounced off their recent lows. The economics calendar includes the ADP employment report for March, the third estimate of fourth-quarter GDP, and speeches from two regional Fed presidents.

Furniture retailer RH RH announced a 3-for-1 stock split but warned that it is experienced softening demand after Russia’s invasion of Ukraine.

United States Latest News, United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Goldman cuts chip sector EPS estimates, downgrades several semi stocks on 'challenging' economyGoldman Sachs cut the earnings estimates across the chip and chip-equipment sector to start the week, citing a 'more challenging macro backdrop.'
Source: CNBC - 🏆 12. / 72 Read more »

Stocks volatile as oil, gold down, Tesla talks stock splitU.S. stocks were mixed early Tuesday morning after finishing higher to start the week.
Source: FoxBusiness - 🏆 458. / 53 Read more »

This 'potentially poisonous mix' means forget about buying the dip in stocks, says Neuberger CIOThe threat of high inflation, climbing rates and sputtering growth could turn into a “potentially poisonous mix” for stocks, according to Erik Knutzen, chief investment officer of Neuberger Berman’s multiasset class portfolios.
Source: MarketWatch - 🏆 3. / 97 Read more »

Stocks jump helped by Tesla and meme leaders AMC, GameStopInvestors eye a busy week for economic data as the month of March winds down.
Source: FoxNews - 🏆 9. / 87 Read more »

Investing Club: Here are two ways to value stocks and they both hinge on interest ratesOne of the ways to be more prepared to navigate future market turmoil is to understand how stocks are valued.
Source: CNBC - 🏆 12. / 72 Read more »

S&P 500 is dropping but clings to 4500, as US stocks opened mixedUS equities are trading mixed after Wall Street’s opened two hours ago. The losers are the S&P 500 and the Dow Jones Industrial Average, each losing b
Source: FXStreetNews - 🏆 14. / 72 Read more »