Welcome to the midpoint of the year which seems to be happening in super-fast fashion compared to the last few years. This may be a good thing, especially considering some of the big events that we have going on this year, as often events cause time to slow.
The Little Engine that Could
In our Q3 2024 Newsletter, hopefully already in your possession, we delightfully were granted multiple copyright approval from several of our important research resources. In the newsletter, which we deliver in historic paper form not only for the importance and novelty, but reinforced by the repeated thanks for easy views, we discuss the very hard to detect but economically important stimulus in the form of government spending. The title of our main article called “Tug of War” essentially speaks to the Federal Reserve raising rates in dramatic fashion, while fiscal policy is continuing some of the newfound tools that were discovered during the lockdown. For the record, our little engine that could is winning the battle for the moment as the economy continues to keep kicking even though interest rates have been hanging out at otherwise very elevated levels that in the past have caused a slowdown.
The Inverted Yield Curve Breaks a Record
Maybe the speed at which the year is going by is causing us to forget that the yield curve is still inverted! As a quick refresher and once again a specific topic in our newsletter an inverted yield curve is not normal and is likely a result of the stimulus as well as our little engine that could. No matter the reason this inappropriate by the books financial condition is breaking records every week as the longest inverted yield curve ever as measured by the 2 and the 10-year treasury yields. The 10-year yield is still below the 2-year which makes no sense of course, but reins on.
It is Back – Concentration
While delightfully absent from our concerns and our writings as of late, concentration in various capital asset markets has begun to occur again. We are not going to throw much research towards this at this time since we have done so much and continue to watch it closely, we do want to remind ourselves that concentration just like having a team built around 1 All Star athlete, can be a dangerous thing.
The good news is we will eventually slug through this unique period of economic times and look back on it as probably one of the more interesting as well as educational economic times that we may experience, and just like this year has occurred so quick thus far, it will likely occur as quickly.
Thanks for your time!
Sincerely,
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
