A Changing Shape

Finally, the yield curve is easing back to it normal shape. For the last couple of years, we've lived with an inversion. These often foretell a recession, but none appeared. Now, things are heating up. There's a fine line between solid growth and runaway growth that leads to inflation. Treasury yields are climbing, and the yield curve is looking normal again. Whew! Right? Well, there's a caveat. As bond yields climb, they take a negative toll on stock prices. PIMCO's famous bond manager, Bill Gross, is now bearish on BONDS because of rising interest rates. But rising rates cut into company earnings and push investors out of equities and into the bond market. That's what all the fuss has been about this week. Will this settle out, and will markets set a new upward course? Stay tuned! DJIA -198.94 NASDAQ -45.80 S&P 500 -26.66