anybody smell smoke?

[Dtail]

Still feel that the markets are being held back artificially due to the trade war issues.

[njhowie]

Quote:

Originally Posted by Dtail Still feel that the markets are being held back artificially due to the trade war issues.

LOL - "artificially" holding the market back? It's a very real concern.

On the other hand, what is artificially supporting the market is hundreds of billions of dollars of stock buybacks taking place, among other things.

[audreyh1]

Quote:

Originally Posted by Leo1277 While increasing CD rates in themselves are not necessarily a problem, there is one thing that really smells of smoke: we are quickly heading towards an inverted yield curve, which means that short term yields (as from CDs) get near or exceed long term yields. This has been one of the most reliable predictors of an expected recession, as it expresses a lack of confidence in the long-term market. Google it and you will find many comments about it.

But we are not inverted yet. Until the curve actually inverts, I’m not seeing smoke. It can stay close to flat for a long time.

[MichaelB]

Quote:

Originally Posted by audreyh1 But we are not inverted yet. Until the curve actually inverts, I’m not seeing smoke. It can stay close to flat for a long time.

It also doesn’t have to go from flat to inverted. It can just as easily recover to a traditional, steepened slope.

[ncbill]

If you're worried about high equity valuations & are retired or at that point consider the "rising equity glide path" to mitigate sequence of return risk:

http://www.etf.com/sections/index-in...ess?nopaging=1

[copyright1997reloaded]

Quote:

Originally Posted by njhowie Please re-read the quote I was responding to. It had nothing to do with survival. It had to do with the prior posters belief of the S&P being more useful/representative than "the megacaps" of the Dow. Those in the S&P top 10 which are not included in the Dow, are bigger megacaps than a good portion of those in the Dow. The top 10 of the S&P is bloated with technology representing 15% of the entire index. My statement/point stands.

Sorry about that. Your point about the top 10 of the S&P being bloated with technology is true, but on the other hand some sector usually tends to be at the top and bloating the index. As we've become a technology society, one would expect technology to be an increasing portion of the economy and as a result market capitalization.

In reality, each crank of the technology wheel brings new applications for computing devices and more integration of technology into all industries. Is Amazon a technology company or a retailer? Are car manufacturers technology companies?

My investment thesis for many many years now has been to overweight technology and medical oriented companies as I believe there has been and continue to be long term trends which support these sectors.

[audreyh1]

Quote:

Originally Posted by MichaelB It also doesn’t have to go from flat to inverted. It can just as easily recover to a traditional, steepened slope.

Of course it can, and that could happen this time too.

[Mr._Graybeard]

Quote:

Originally Posted by MichaelB It also doesn’t have to go from flat to inverted. It can just as easily recover to a traditional, steepened slope.

I believe a big factor in the flat curve is a lack of interest in long-term borrowing -- money that is usually taken out to make capital improvements. Capital investment produces "healthy" growth. Consumer spending is another strong growth engine, but it can also drive inflation.