Treasury Yield Curve

The yield curve continued to flatten as short-term interest rates rose relative to longer-term rates. The Federal Reserve has made clear its intention to normalize interest rates with at least one more increase in 2018 and perhaps two or three more in 2019. Being data driven, the Federal Reserve is expected to adjust its plan as conditions warrant.

U.S. & World Equity Indexes; 11/26/18; YTD Return S&P 500; 2,632; −21.50% Dow Jones Industrials; 24,285; −21.80% Nasdaq Composite; 6,938; 0.50% Shanghai Composite (China); 2,579; −22.00% S&P BSE Sensex (India); 34,981; 2.70% Nikkei Stock Avg (Japan); 21,646; −24.90% CAC 40 (France); 4,946; −26.90% DAX (Germany); 11,192; −13.40% FTSE 100 (U.K.); 6,952; −29.60%
Selected Interest Rates; 11/26/18; 10/23/18 15-Year Mortgage; 4.24%; 4.26% 30-Year Mortgage; 4.81%; 4.85% 5-Year Treasury Bond; 2.88%; 3.01% 10-Year Treasury Bond; 3.05%; 3.17% 30-Year Treasury Bond; 3.31%; 3.37%
Key Economic Statistics; Most Recent; Prior Month National Producer Price Index; 0.60%; −20.20% Consumer Price Index; 0.30%; 0.10% Unemployment Rate; 3.70%; 3.70% ISM Manufacturing Index; 59.80; 59.80 ISM Services Index; 61.60; 61.60 Change in Non-Farm Payroll Emp.; 250,000; 134,000 New York State Consumer Price Index - NY, NJ, CT; −20.10%; 0.40% Unemployment Rate; 4.00%; 4.10% NYS Index of Coincident Indicators; 5.80%; 5.80%

CPI—12-Month Change

Inflation, as measured by the Consumer Price Index, is now solidly above the Federal Reserve’s target of 2.0%. While the trend does not appear likely to result in a 3.0% average, a higher level could prompt the Fed to take a more aggressive posture toward interest rates in 2019.

Equity Market Statistics; Most Recent; Prior Month Dow Jones Industrials; 11/26/18; 10/23/18 Dividend Yield; 2.32%; 2.19% Price/Earnings (12 Mth Trailing); 21.30; 23.30 Price/Earnings (Projected); 15.96; 16.93 S&P 500 Index; 11/26/18; 10/23/18 Dividend Yield; 2.03%; 1.89% Price/Earnings (12 Mth Trailing); 22.19; 22.19 Price/Earnings (Projected); 15.87; 16.96

The information herein was obtained from various sources believed to be accurate; however, Forté Capital does not guarantee its accuracy or completeness. This report was prepared for general information purposes only. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities, options, or futures contracts. Forté Capital’s Proprietary Market Risk Barometer is a summary of 30 indicators and is copyrighted by Forté Capital LLC. For further information, visit www.fortecapital.com, send a message to [email protected], or call 866-586-8100 and ask for David W. Henion, CPA, or Larry H. Rabinowitz, CPA/PFS.