Weighing the Week Ahead: Should Investors Worry about the Yield Curve?

Last Week Recap

In my last edition of WTWA I previewed the annual Fed Jackson Hole symposium. I provided the material for your own party bingo card on what to expect from the punditry. Many of the suggestions were covered early in the week and all of them by Friday. I noted that many would leave after the release of Powell’s speech. The chart for the week (below), shows a flat line for the rest of the day.

Finally, and most importantly, the news continues to be framed in terms of when the bull market will end and what will cause it. How different it would be if experts were asked about the key market drivers and whether they were still working. As always, Alan Steel’s commentary is clever, humorous, and accurate. Here is a tidbit:

Some two-thirds remain neutral to bearish by the American Association of Individual Investors’ (AAII) reckoning – unwilling to leave the March 2009 dour sentiment party gathering of anoraks, recessionistas, safety-seekers and economists (does that spell ‘arse’?).

Millions stand steadfast in that nine-year-long line, taking in turn their opportunity to swing the Trump, Turkey and trade war baton at the stock market pinata; a torn and battered beast yet stuffed and sturdied with stable economic indicators despite the unyielding headline assaults.

The Fear and Greed Trader also notes the deceptive framing of issues:

Not a week goes by when someone doesn’t appear and make one or both of these comments. “We are late in the cycle” and “stocks are expensive”. The statements are made as a matter of fact and no one seems to challenge them.