Recession fears took hold yesterday as short-term Treasuries paid more than long-term notes, a warning sign that investors are rapidly shifting their money into bonds to shield against potential losses they could incur by holding stocks. A brief inversion could be just an anomaly (others have not preceded recessions), but it may depend on how long the condition lasts. Others argue the inversion occurred because of the Fed, which has kept its base short-term rate "too high," while some maintain the yield curve has been distorted by more than $15T worth of foreign bonds that pay negative interest rates. (SA)
The retail sector was hammered yesterday by weak guidance from Macy's as department stores continued to lose shoppers to newer forms of retailing. Shares tumbled 13% after the company lowered its full-year earnings outlook and missed profit expectations. Worries were also seen after Cisco's Q2 results, which showed struggles in China amid a continuing trade war. (CNBC)
Walmart reassured Wall Street over US consumer spending this morning as the retailer lifted its outlook for domestic full-year sales, but pointed to weakness in its stores abroad. The company, long considered a bellwether for middle-class spending, shrugged off turmoil elsewhere in the retail sector to post a 2.8 per cent rise in like-for-like domestic sales (FT).
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.