Treasury Yield Curve
The yield curve has inverted; that is, short-term interest rates are now higher than longer-term rates. This phenomenon can indicate the potential for a recession. While there is no cause-and-effect-relationship, the mere presence of an inversion can have an impact on capital expenditures and business hiring.
ISM Manufacturing Index
The September ISM Manufacturing Index came in below expectations at 49.1%, indicating a slight contraction in the industrial sector. This data takes on increased significance due to its downward trend since January and in light of trade tensions with China. A report below 50% indicates a contraction in the industrial sector, increasing the risk that a recession is more likely.
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