S&P 500- Next Leg Higher

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Here is a basic chart of the S&P 500 I just threw together tonight. You can see in the upper right corner, the S&P 500 has been consolidating nicely in this 2430 level. It seems to indicate the index is likely to break higher in the near future.

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We can also see that the 10-Year Treasury rate is filling the gap created in the days immediately following the election.

^TNX data by YCharts

Investors point to the falling sign of the 10-2s and the flattening of the curve as a sign of a slowing economy.

10-2 Year Treasury Yield Spread data by YCharts

Again, much of this is wrong, in my opinion. The 10-2 spread is contracting because the gap is being filled on the 10-year, while the rates on the short end of the curve have been rising steadily in anticipation of more rate tightening.

The last reading for the Atlanta Fed’s GDPNow was 3.4 percent GDP for the Second Quarter of 2017. The next reading is on the June 9. Does that sound like a recession is coming?

Continued economic growth, will result in the yield curve likely to begin steepening again. Which is a positive for equities.

This next chart is a preview for tomorrow.

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Disclaimer: Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management LLC, a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.

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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.