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weekly live jazz performances in downtown Farmington 7:00 p.m. Wednesdays in the heart space behind 116 West Main Street and catch more jazz between 1:00 and 5:00 p.m. every weekday right here on K s je Farmington the material discussed in this program is for information purposes only it is not intended to be used as a recommendation for investing or as legal advice each person has his or her specific situation circumstance and objective and should consult their own personal advisor or counsel time for our save about Thursday segment Jason Cal code is joining me here from citizens trust and investment corporation Jason good morning morning thanks for coming in appreciate it there's been a lot going on since we last there hey there has know our show just you know impacted the market so much on the economy but apparently it does when you're not here that's right so what's going on well to kind of reverse in the last week yeah we had this yield curve inversion last week right I was on Wednesday that it happened and a full yield curb inversion has not happened since 2007 we had a partial last year without I remember asking maybe in December so yeah about it like the other people were all a little worried so okay here we go again so parcel last year that's where we've got the two year bond yield the five-year bond yield and the 10 year bond yo that we really look at for the yield curve I see and the five-year fell below the two years so that's that's a partial inversion that's what happened last year but this time last week on Wednesday we had a full yield curve inversion where the yield of the two-year is above the yield of the tenure right which is not supposed to happen right I know freaks everybody out a certain degree right yeah maybe in some circles people think it's a precursor to the r-word right so there's been five inversions of the 210 since 1978 and each one of those were a precursor to a recession the artwork okay you said it I didn't I know I know but but it's it's okay at the average time usually between the inversion in the recession is about 22 months okay so it's not automatic doing glue and really interestingly enough the SP actually enjoyed average returns of about fifteen percent up to 18 months after the inversion so it's not really an indicator of everything coming to a screeching halt right hmm but not good I don't wanna know the signal did spook invective Messrs the markets fell about three percent across the board on Wednesday okay and really when the yield curve inverts that's that's the bond market signal signaling that they're not sure what's going to be happening ten years down the road the the long-term growth right it's not really there anymore we're looking for a slowdown and a long-term economic outlook is no good okay no that was last week that was last week now here we are this week let's fast-forward to this right okay so we've got different memories yes I don't know exactly so the markets this week now if we could pull up yeah okay okay so the Dow Jones you can see 157 that's recently right so big again today and you can see that dip right at the end of the chart now that was Wednesday and we're right back where we started and actually above where we started the line is green first year to year so there you go for the Dow Jones and if we go to the other indexes the SP as you mentioned right yep same thing shouldn't be the same thing across the board yep we just that this is really really just shows you how the buy and hold strategy can work and how to not panic right when something like that happens that's that same thing famous right yeah we've got that big dip but we're down we're right back where we started from this week has all been has all been good right and all the news has been good so really and again this is one of those things you say you can't play the market day-to-day if you try to watch it you'd go crazy that's exactly this is what this kind of shows to is just how quickly things can reverse itself yeah posed to a certain degree and we'll see you in the long run what happens but for right now here's where we are ya know it's it's it's a big it's a big example of how you cannot time the market right you can't jump in and out of there trying to time these little dips so really now we need to look at what's what's driving the market is it is it our domestic economic numbers or is it more of a global picture right that's moving everything so the Fed minutes were released yesterday okay from their meeting back back in two weeks ago yeah that where they cut the interest rates confirm the statements by pal afterwards saying this is more of a mid cycle adjustment and not really the start of a rate cut cycle okay which is what we would expect to see if we were go ahead into a recession you'd expect to see the Fed to start steadily cutting rates they've come out and said that this is not the case this is a mid cycle adjustment however Wall Street right now is pricing in another rate cut in September so they meet on September 18th okay the markets all but sure they're gonna cut them again interesting so yeah again this would a lot of the analysts are thinking it would be a two rate cut scenario so this can still be considered a mid cycle adjustment if they cut it twice right never expect another point two five right so that by a total of half a point that's right that's right after these two cuts that's right and so the Fed cutting these interest rates you know if you look at the economic numbers of the US everything's fine unemployment inflation all these things that we look at yep we've got these strong numbers that came out from real Realtors not Realtors Wow target and Lowe's and retailer retailers all morning but no Target Lowe's Home Depot they all came out with strong numbers yeah these numbers tend to boost consumer confidence because it's a good indicator of how everything's doing consumer confidence is get again kind of the degree of optimism that consumers feel like the overall economy looks like right in their personal financial situation as well okay you know the US existing home sales were up two and a half percent now those are your Realtors and then another thing that came out Trump if you'll remember a few days ago or maybe last week came out and said that he was thinking that the government should cut payroll taxes I think it's different today well it is he came back he came out and said that he decided that that's not the case okay so again kind of backtracking on this financial stimulus stuff that he was kind of preaching earlier okay so we're doing okay so the real theory now is that the Fed may be cutting interest rates because we've got this global scenario where rates are so low sometimes even in negative territories right that these foreign bond investors are actually looking for somewhere with yield and u.s. is the only place to go positive right positive so okay the Fed is thinking well we don't need to pay them that much interest because they're gonna be coming here anyway so we're gonna cut our interest rates and we're still gonna see this influx of foreign investment silverstein maybe less to do with what's going on domestically again and more to do with what's going on in their geopolitical scene right right interesting now I don't do I'll ask you real quick in the time we have remaining about Germany because that is another concern they're the biggest economy in Europe or one of the biggest one of the biggest in year and they're tipping towards the r-word they are in a non realtor Hamish recession yes sir probably having a tough time in Germany yeah but that's a concern that could trickle over and aletan it's infect other economy especially in the EU that's exactly right you've got the EU some of the strongest economies in the EU are moving towards zero or negative interest rates and that's affecting the whole region and then on top of that we've got brexit coming right down the pipeline right so another really big shake-up in the eurozone right now and then again there's there's destabilization in Asia right now - we've got Japan that's struggling China really this trade war with us is starting to kind of take its toll on them as well okay so hopefully when we meet with them again we can get somewhere this time right and then we've got all the destabilization in the Persian Gulf as well that's kind of affecting the oil prices right now oil hanging around $55 a barrel okay which is not you know not bad not not the worst that we've seen right but there was a drop in the u.s. stockpile that's helped kind of balance out the fears of the global really growth slowdown but it is down about 18% from the high in late April so yeah starting a little bit of slide there - okay so what happens we'll see what happens we will check with you next week okay Jason thanks so much thanks for having your welcome with Jason Calcott everyone from citizens trusted investment corporation he is with me on Thursday is here to talk about the economy right here on ksj II Farmington robots the size of blood cells earth-like planets outside the solar system science fiction you know science faction join us seth shostack and molly bentley an KS je