All Of The Economic Momentum Is Moving In Just One Direction Now

All Of The Economic Momentum Is Moving In Just One Direction Now By Michael Snyder Earlier today, I was greeted by this jarring headline when I visited the Drudge Report: “BONDS FLASH RECESSION WARNING”. These days, it seems like the “R word” is being thrown around constantly, but at this time last year everyone was celebrating how well the economy was doing. Unfortunately, we have witnessed a dramatic shift in recent months, and we just got some more really bad economic numbers. Thanks to those bad numbers and an increasing amount of anxiety about the trade war, the Dow Jones Industrial Average fell another 237 points on Monday. That means that we are on pace to potentially see the Dow fall for a sixth week in a row, and that is something that hasn’t happened since the last recession. But right now investors are far more spooked about what is going on in the bond market. According to Mish Shedlock, we haven’t seen this many yield curve inversions “since the start of the Great Recession”… On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007. In so many ways, what we are witnessing at this moment is very reminiscent of the conditions that prevailed just prior to the last financial crisis. Back then, the economic numbers were definitely starting to slide, but most Americans didn’t think that we were heading toward big trouble. But those that understood what was happening were sounding the alarm, and the same thing is happening today. For example, the following comes from a CNBC article entitled “Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning”… “Recent data points suggest US earnings and economic risk is greater than most investors may think,” wrote Michael Wilson, the firm’s chief U.S. equity strategist. Specifically, the stock strategist highlighted a recent survey from financial data firm IHS Markit that showed manufacturing activity fell to a nine-year low in May. That report also revealed a “notable slowdown” in the U.S. services sector, a key area for an American economy characterized by huge job gains in health care and business services. READ MORE http://theeconomiccollapseblog.com/archives/all-of-the-economic-momentum-is-moving-in-just-one-direction-now