World Perspectives

Bond Yield, China, and Buying Opportunities

The yield curve for Treasury bonds inverted on Wednesday, and that sparked a major stock sell-off as well as rampant speculation about the state of the economy. While it is true that inverted yield curves preceded each of the last seven recessions, the phenomenon is a symptom and not a cause. It is sometimes a warning signal of other causes, such as overly tight monetary policy. For example, when monetary policy is too restrictive and short-term rates are high, the market pushes long-term rates down. However, that is not the current situation. Inverted yields are also sometimes a symptom of fundamental weakness or worries over uncertainty, which is most definitely the case now. The yield curve inverted briefly in December 2018 as trade tur...

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From WPI Consulting

Communicating importance of value-added products

Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.

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