Bond Yields Dive on Apple Warning, ISM Report

Yields took another dive lower today with the 1-year to 7-year inversion still intact.

Last night Apple warned and this morning the ISM posted an unexpectedly low PMI report.

Bond yields plunged.

Apple Cites "Mounting Uncertainty": APPL Down 7% AH, Nasdaq Futures Down 2.3%

Sharp, Unexpected Decline in ISM Numbers Led by Plunge in New Orders

Debt Watch

Despite the flattening and now inverting yield curve, note that the spread between the 10-year and 7-year bond actually rose since January 1, 2018.

The spread between the 30-year long bond and the 10-year note is nearly what it was a year ago.

I believe this is a strong bond market signal that the end of the bond bull market approaches. It's possible it's already over. But I do expect one more strong push lower in yields as recession hits in 2019.

We have enormous deficits as far as the eye can see from a starting point of $22 trillion in debt.

Got Gold?

Mike "Mish" Shedlock

Comments (6)
No. 1-2
CJones
CJones

Yes it fell... but with an ISM of 54.1 New Orders, Production, and Employment are all still growing.

Markets are suffering because what the fed currently claims it would like to do doesn't match up to what we all know they will ultimately do... And if the data ends up recessionary as you predict, or the market rout continues, then the Fed will go full dove, cut rates, QE and so on.

As revolting as that may be, I do not share your belief this confirms the end of the bond bull market. Regardless the deficit, if a central bank corners an asset class, it works.

Cocoa
Cocoa

Bond Vigilantes will be waiting forever. We are in a deflation, regardless of the debt overhead the amount of money vaporizing into thin air is growing and there will be a huge run into cash to clear before gold even gets a bid. in fact, when gold tanks next go around, load up. But gold is going down due to the "fix" and the rush to USD as everyone needs to sell their crap in senior currency BEFORE they can buy "gold." And you can buy all the paper GLD you want...that is leveraged 100x over anyway. You will never see "gold"-its been heisted already out of FED