Monthly Archives: August 2019

Mid-Year Review and Presidential Election Stock Returns

In the second quarter of 2019, stocks continued their year-long climb: global equities rose just over 3.5% and are now up over 16% as of the end of June. Domestic stocks fared marginally better than international equities. Last quarter, large US companies went up over 4% and, year-to-date, are up over 18%. Developed-foreign stocks rose over 3.5% and are up 14% year-to-date. Emerging-markets stocks rose under 1% and, as of the end of the quarter, are up more than 10%. The US bond market also went up significantly during the first half of the year. US bonds rose about 3% in each of the first two quarters and is now up over 6% for the year.

The Inverted Yield Curve: Harbinger of Doom or Yoga Position?

It took only three months for the markets to come back and then some: from January through March, global equities rose just over 12%. Despite these substantial gains, some investors have expressed pessimism about future returns due to the presence of an “inverted yield curve.” Over the past few months, we’ve seen many articles and news segments stating that the presence of an “inverted yield curve” has “predicted” a recession every time. Today we’ll explain what a yield curve is, what an inversion means, and why an inverted curve doesn’t necessarily mean a looming recession and/or poor returns.