1.Oil’s Economic Impact Waning.

Barrons

Is the market too complacent about the risk of higher oil prices?

After all, rising prices can limit consumers’ ability to spend on everything other than gasoline, natural gas, and heating fuel. All those products become more expensive as oil prices rise. That can be bad for the economy.

Rising oil prices can also increase headline inflation numbers. And higher inflation makes it harder for the Federal Reserve to cut interest rates to keep the economy chugging ahead. That also sounds bad.

Still, crude’s impact on the economy is far less than it used to be.

Why Oil Prices Don’t Matter for Stocks Anymore-By Al Root

https://www.barrons.com/articles/oil-prices-economic-impact-stocks-dow-jones-industrial-average-saudi-attack-51568744953?mod=hp_BRIEFLIST_1&mod=article_inline

1.Equities Peak Months Before Recession

Capital Group

Investing ahead of a recession: 5 mistakes to avoid

https://www.thecapitalideas.com/articles/investing-ahead-recession-5-mistakes

1.Hedge Funds Record Low Exposure to Small Cap Value.

Twits note how much funds hate value

From Dave Lutz at Jones Trading.

1.Long-Term Treasury ETF (TLT) Has 2nd Biggest Weekly Drop Ever

Outside of equities, we saw a massive move higher in Treasury yields this week and a massive drop in Treasury bond prices.  For the 20+ year Treasury ETF (TLT), this week’s 6.34% drop was its second worst week on record since it began trading back in 2002.

Below is a look at TLT’s historical weekly percentage change, and we also show how TLT has performed in the weeks and months following one-week drops of more than 5% like we saw this week.  As shown in the table, TLT has normally continued lower for a while following big down weeks.  Start a two-week free trial to one of our three membership levels to receive Bespoke’s most actionable ideas.

https://www.bespokepremium.com/interactive/posts/think-big-blog/long-term-treasury-etf-tlt-has-2nd-biggest-weekly-drop-ever

1.Real Yields (inflation adjusted) Go Negative.

Prior forays into negative territory during this cycle (in 2011, 2012, 2013, and 2016) have accompanied signs of slowing, but have also reflected the broader interest rate environment. Slower global growth, increasingly accommodative central banks, and some flight to safety due to trade uncertainty have all conspired to push rates lower.

The expected inflation rate implied by 10-year TIPS sits at about 1.5%, low historically but still higher than the cycle low and well above the near 0% hit in the heart of the last recession. Slower growth has minimized inflationary pressure, but over the last three months we have seen a modest pickup in inflation and wages.