Spotting a recession & Equity market updates

How to spot a recession and what’s next for equities?

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

How to spot a recession

  • No US recession in sight, but bond market is getting worried
  • Inverted yield curve could forerun a recession by up to two years
  • In that time, rate cuts could steepen yield curve, avert a recession
  • An unexpected jump in high-yield debt interest rates could be worrisome
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Equities: Signs of a late-stage bull market

  • Is the equity bull market that began in March 2009 in its last stage?
  • Stocks have been rising even as corporate earnings stagnate
  • Large-cap stocks have been outperforming, especially the last two years
  • High-yield credit spreads rising to 6-7% over Treasuries could be a red flag
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