Home أخبار Do The Economy And The Treasury Yield Curve Work Together?

Do The Economy And The Treasury Yield Curve Work Together?

14
0

xxz114

Friday (May 3) stocks propelled higher after the Labor Department reported weaker-than-expected job growth last month and easing wage growth, buoying investors’ confidence up the Federal Reserve will eventually lower interest rates. The S&P 500 index ended at 5,128, as reading in Table 1.

Table 1. Apr, May (3) 2024: M & T

3/28/2024

DATE

S&P 500

%CH.1

P/m

%CH.2

%CH.3

03/28/24

5,254.35

*

*

*

*

04/01/24

5,243.77

-0.20%

m

-0.20%

*

04/02/24

5,205.81

-0.72%

m

-0.92%

*

04/03/24

5,211.49

0.11%

P

-0.82%

*

04/04/24

5,147.21

-1.23%

m

-2.04%

*

04/05/24

5,204.34

1.11%

P

-0.95%

*

04/08/24

5,202.39

-0.04%

m

-0.99%

*

04/09/24

5,209.91

0.14%

P

-0.85%

*

04/10/24

5,160.64

-0.95%

m

-1.78%

*

04/11/24

5,199.06

0.74%

P

-1.05%

*

04/12/24

5,123.41

-1.46%

m

-2.49%

*

04/15/24

5,061.82

-1.20%

m

-3.66%

*

04/16/24

5,051.41

-0.21%

m

-3.86%

*

04/17/24

5,022.21

-0.58%

m

-4.42%

*

04/18/24

5,011.12

-0.22%

m

-4.63%

*

04/19/24

4,967.23

-0.88%

m

-5.46%

*

04/22/24

5,010.60

0.87%

P

-4.64%

*

04/23/24

5,070.55

1.20%

P

-3.50%

*

04/24/24

5,071.63

0.02%

P

-3.48%

*

04/25/24

5,048.42

-0.46%

m

-3.92%

*

04/26/24

5,099.96

1.02%

P

-2.94%

*

04/29/24

5,116.17

0.32%

P

-2.63%

0.32%

04/30/24

5,035.69

-1.57%

m

-4.16%

-1.26%

***********

*********

*********

******

******

*******

05/01/24

5,018.39

-0.34%

m

-4.49%

-1.60%

05/02/24

5,064.26

0.91%

P

-3.62%

-0.70%

05/03/24

5,127.79

1.25%

P

-2.41%

0.55%

NOTE

1. M & T is Momentums & Trends

2. Data Source: Yahoo Finance

3.P/m: Plus/minus

4. %CH.1: The Percent Change from previous day.

5. %CH.2: The Percent Change from Mar 28.

6. %CH.3: The Percent Change from Mar 28.

7. Author made Table.

Click to enlarge

Table 2 Treasury Yields of Apr, May (3), 2024

DATE

1 MT

2 YR

5 YR

10 YR

20 YR

30 YR

BLM

YCS

03/29/24

5.36%

4.63%

4.23%

4.21%

4.46%

4.35%

-0.43%

-1.01%

04/01/24

5.38%

4.71%

4.36%

4.32%

4.56%

4.45%

-0.39%

-0.93%

04/02/24

5.37%

4.70%

4.35%

4.36%

4.61%

4.50%

-0.34%

-0.87%

04/03/24

5.36%

4.68%

4.33%

4.35%

4.62%

4.51%

-0.33%

-0.85%

04/04/24

5.35%

4.66%

4.30%

4.32%

4.58%

4.48%

-0.34%

-0.87%

04/05/24

5.35%

4.76%

4.40%

4.41%

4.66%

4.56%

-0.35%

-0.79%

04/08/24

5.36%

4.80%

4.44%

4.43%

4.66%

4.55%

-0.37%

-0.81%

04/09/24

5.36%

4.75%

4.38%

4.37%

4.60%

4.50%

-0.38%

-0.86%

04/10/24

5.37%

4.98%

4.61%

4.55%

4.75%

4.63%

-0.43%

-0.74%

04/11/24

5.37%

4.97%

4.64%

4.60%

4.80%

4.68%

-0.38%

-0.69%

04/12/24

5.39%

4.91%

4.57%

4.53%

4.75%

4.68%

-0.38%

-0.71%

04/15/24

5.38%

4.93%

4.63%

4.61%

4.61%

4.84%

-0.32%

-0.53%

04/16/24

5.38%

5.00%

4.71%

4.67%

4.89%

4.77%

-0.33%

-0.61%

04/17/24

5.37%

4.95%

4.62%

4.59%

4.83%

4.71%

-0.35%

-0.67%

04/18/24

5.37%

5.00%

4.68%

4.63%

4.86%

4.75%

-0.37%

-0.62%

04/19/24

5.37%

5.00%

4.68%

4.63%

4.84%

4.71%

-0.37%

-0.66%

04/22/24

5.38%

4.98%

4.66%

4.61%

4.85%

4.72%

-0.36%

-0.66%

04/23/24

5.39%

4.93%

4.64%

4.61%

4.85%

4.73%

-0.33%

-0.66%

04/24/24

5.36%

4.94%

4.66%

4.65%

4.70%

4.78%

-0.29%

-0.58%

04/25/24

5.36%

5.01%

4.73%

4.71%

4.94%

4.82%

-0.30%

-0.54%

04/26/24

5.37%

5.00%

4.70%

4.67%

4.90%

4.78%

-0.34%

-0.59%

04/29/24

5.37%

4.99%

4.65%

4.62%

4.85%

4.73%

-0.34%

-0.59%

04/30/24

5.37%

5.05%

4.72%

4.69%

4.90%

4.79%

-0.34%

-0.59%

05/01/24

5.35%

4.97%

4.66%

4.64%

4.86%

4.75%

-0.34%

-0.59%

05/02/24

5.34%

4.88%

4.58%

4.58%

4.83%

4.76%

-0.34%

-0.59%

05/03/24

5.36%

4.82%

4.49%

4.50%

4.76%

4.66%

-0.34%

-0.59%

NOTE

BLM is (Banks’ Lending Margin) is 2/10Y is 2/10Y

YCS is (Banks’ Lending Margin) is 2/10Y is 1M/30Y

Data Source: Treasury Department. Author made the table.

Click to enlarge

Table 3. Weekly S&P 500 AND TYC From April 19 To May 3, 2024

2024

4/19/21 (F)

4/22/24 (M)

4/26/24 (F)

5/3/24 (F)

PRICE

***

PRICE

CH%

PRICE

CH%

PRICE

CH%

S&P 500

$4,987

*

$5,011

0.48%

$5,100

2.27%

$5,128

0.55%

1M

537

*

538

-1

537

0

536

1

30Y

471

*

472

-1

478

-7

466

12

YCS

-66

*

-66

0

-59

-7

-59

0

2Y

500

*

498

2

500

0

482

18

10Y

463

*

461

2

467

-4

450

17

BLM

-37

*

-36

-1

-34

-3

-34

0

NOTE

. 1. Data Sources. S&P 500: Yahoo Finance, TYC: Wall Street Journal.

2. YCS: Yield Curve Stiffness. BLM: Bank Lending Margin. Author Made Table.

The Table 3 with basis points (BPs) for TYC, pinpoints the intimate relationship between TYC and S&P 500 for two weeks from Apr. 19 (F) to May 3 (F):

On Monday (Apr. 22), revealing the clear-cut signal for the start of the correction of the prolonged inversion of TYC. The YCS (Yield Curve Stiffness), (if YCS is larger than +200BPs (2.00%), TYC is normal), remained the same, recording 0(zer0)BP, and S&P 500 rose merely+0.48%.

On Apr. 22 (M) YCS was minus -66BPs which is far less than plus +200BPs, so that it should increase to plus +266BPs (= 200BPs – (-66BPs)). On Nov. 8, 2016 (election day), however, 1M and 30Y were plus+28BPs (0.28%) and plus+263BPs (2.63%), respectively, as found here, so TYC was normal, printing that YCS was 235 BPs (2.35%) (=+263BPs – (+28BPs)).

On Friday (Apr 26) YCS moved higher, logging 7 BPs, and S&P 500 surged +2.27%. There were 3 higher yields than 478 BPs (4.78%) on Apr. 26 (F): One was 484BPs (4.84%) on Apr. 15, next one was 482BPs (4.82%) on Apr. 25 (Th), and another one was 479BPs (4.79%) on Apr. 30 (T) in Table 2.

The YCS had retreated since Apr. 25 steadily until May 3 (F), and come back the same level of Apr. 26 (F). S&P 500 also slowed down, registering +0.55%. The BLM (Bank Lending Margin) also improved a bit, as seen in Table 3.

The economy, representing by S&P 500, rallied highly in the week (Apr. 22 – Apr. 26), and ascended strongly in the past week (Apr. 29 – May 3) through the meeting of the FOMC and Char Jerome Powell’s relaxed press conference.

In sum, on Mar 29, the Fed fulfilled a great accomplishment, optimizing the economy, interest rates, disinflation progress, and the labor market, and so on. We are so lucky that Fed performed prudently in the past 4 years when we have encountered various challenges such as financial stress, regional conflicts, and pandemic disturbances. So do Fed in the coming years.

As a result, a rare soft landing is reasonably anticipated in 2024.

Click to enlarge

Table 4. The S&P 500 !! Select Sectors

Diffusion

Apr-24

XLRE

XLU

XLC

XLY

XLF

XLE

XLI

XLP

XLK

XLB

XLV

#P

SDI

04/01/24

m

m

P

m

m

P

m

m

P

P

m

4

36%

04/02/24

m

P

m

m

m

P

m

m

m

m

m

2

18%

04/03/24

P

m

P

P

m

P

P

m

P

P

m

7

64%

04/04/24

m

m

m

m

m

P

m

m

m

m

m

1

9%

04/05/24

P

P

P

P

P

P

P

P

P

P

P

11

100%

04/08/24

P

P

m

P

P

m

m

m

m

P

m

5

45%

04/09/24

P

P

P

P

m

P

m

P

P

P

P

9

82%

04/10/24

m

m

m

m

m

P

m

m

m

m

m

1

9%

04/11/24

P

m

m

P

m

m

P

m

P

m

m

4

36%

04/12/24

m

m

P

m

m

m

m

m

m

m

m

1

9%

04/15/24

m

m

m

m

m

m

m

P

m

m

m

1

9%

04/16/24

m

P

m

m

m

m

m

m

P

m

P

3

27%

04/17/24

m

P

m

m

P

m

m

P

m

P

m

4

36%

04/18/24

P

P

P

m

P

m

m

P

m

m

P

6

55%

04/19/24

P

P

m

m

P

P

m

P

m

P

P

7

64%

04/22/24

P

P

P

P

P

P

P

P

P

P

P

11

100%

04/23/24

P

P

P

P

P

P

P

P

P

m

P

9

82%

04/24/24

P

P

m

P

m

P

m

P

m

P

m

6

55%

04/25/24

m

m

P

P

m

m

P

m

P

P

m

5

45%

04/26/24

P

m

m

P

m

m

P

P

P

P

P

7

64%

AVERAGE

47%

NOTE

Data Source is Yahoo Finance, Author Made Table.

Click to enlarge

Table 5 Trifecta Data: Apr (1 26)

DATE

SPY

DIA

QQQ

SPY

DIA

QQQ

Tp/Tm

03/28/24

523.21

397.78

444.01

*

*

*

*

04/01/24

522.19

395.29

444.95

m

m

P

S

04/02/24

518.87

391.61

441.11

m

m

m

Tm

04/03/24

519.46

391.30

442.10

P

m

P

D

04/04/24

513.12

326.08

435.34

m

m

m

Tm

04/05/24

518.30

388.89

446.47

P

P

P

Tp

04/08/24

518.67

389.10

440.60

P

P

m

D

04/09/24

519.28

388.93

442.23

P

m

P

D

04/10/24

514.27

384.59

438.37

m

m

m

Tm

04/11/24

517.99

384.54

445.45

P

m

P

D

04/12/24

510.70

379.89

438.08

m

m

m

Tm

04/15/24

504.05

377.35

430.55

m

m

m

Tm

04/16/24

503.57

378.19

431.34

m

P

P

D

04/17/24

500.73

377.65

426.14

m

m

m

Tm

04/18/24

499.29

377.81

422.87

m

P

m

S

04/19/24

494.82

379.53

414.30

m

P

m

S

04/22/24

499.72

382.37

418.82

P

P

P

Tp

04/23/24

505.65

385.02

425.07

P

P

P

Tp

04/24/24

502.52

383.77

421.89

m

m

m

Tm

04/25/24

507.37

381.28

429.50

P

m

P

D

04/26/24

508.48

392.24

430.94

P

P

P

Tp

NOTE

1. Tp is Trifecta for Bull, Tm is Trifecta for Bear.

2. “D” is double “P”. And “S” is Single “P”. .

3. Data Source: Yahoo Finance.

Table 6. Summary of Trifecta In 2024

Mar (1 – 29), Apr (1 – 26), 2024

The Bullish (Plus) Trifecta For Bulls

2024

The No. of In A Row for multiple (1-6) Tps

TOTAL

Month

6 Tp

5 Tp

4 Tp

3 Tp

2 Tp

1 Tp

Tps

Mar

0

1

0

2

1

9

Apr

0

0

0

1

2

4

The Bearish (minus) Trifecta For Bears

2023

The No. of In A Row for multiple (1-6) Tms

TOTAL

Month

6 Tm

5 Tp

4 Tm

3 Tm

2 Tm

1 Tm

Tms

Mar

0

3

1

7

Apr

0

1

5

7

NOTE

1. Data Source: Yahoo Finance.

2. Tp is Trifecta for Bull.(plus)

3. Tm is Trifecta for Bear.(minus)

4. D is Double: 1″m”/2″P”, and S is Single: 2″m”/1″P”.

5. Author made the Table.

Click to enlarge

The Second Checker, the TDI was 48% (= 100 * 13 / (13 + 14)), registering that Bulls vs. Bears was 13 (= 9 (Mar) + 4 (Apr)) vs. 14 (= 7 (Mar) + 7 (Apr)) in Table 6.

The TDI was 48% which was upbeat optimal.

If you are a trifecta trader, you must be interested in summary Table of Table 6. and “TP/Tm” column in Table 5.

Click to enlarge

Table 7: M & T Mar, Apr (26), 2024

Mar Bull 10 points

Apr Bull 8 points

2024

8Ps

5Ps

4Ps

3Ps

2Ps

1Ps

Mar

0

0

1

0

2

2

10

Apr

0

0

0

1

0

5

8

Mar Bear 10 points

Apr Bear 12 points

2023

6ms

5ms

4ms

3ms

2ms

1ms

Mar

0

0

0

2

2

0

10

Apr

1

0

0

0

1

4

12

NOTE

1. Data Source: Yahoo Finance.

2. Author made Table.

3. M & T is Momentums & Trends

Click to enlarge

مصدر

LEAVE A REPLY

Please enter your comment!
Please enter your name here