Historically, yield curve inversion had always predicated a future recession. Normally, both T10Y2Y and T10Y3M require inversions and T10Y3M is yet to invert.
Historically, in the event both yield curves invert, the recession came in a delayed phase of 7-24 months from the curves invert.
What this means for the market is, at least in the short- to mid-term, the market is set up to stay bullish. Unless there is a significant negative surprise from geopolitical conflicts, unexpectedly high CPI prints the reversal trend we observe is set to maintain in the next coming months.
Particularly, SPY and QQQ are reaching previous highs and I'm eyeing on these indices to see if they reach and surpass that level.
It would be wise to elevate your news gauge on global events, commodity prices, economic data releases.
Remember, recession arrives when nobody expects it to arrive.
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