Nancy Davis, Quadratic Capital founder, joins ‘Closing Bell’ to discuss her thoughts on Jeffrey Gundlach’s latest on the Fed and economy. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
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The bond market has been a subject of great concern lately as it sends alarming signals that a recession might be on the horizon. Nancy Davis, the founder of Quadratic Capital Management, recently weighed in on this issue, stating that the bond market is screaming warning signals regarding an upcoming economic downturn.
Davis, an experienced financial expert, believes that investors need to pay attention to the bond market because it has historically been a reliable predictor of recessions. As she explains, when bond yields fall, it indicates that investors are flocking to the safety of bonds, which drives prices up and yields down. This flight to safety suggests that investors are becoming more cautious and seeking refuge from riskier assets like stocks.
One of the key indicators that Davis highlights is the inverted yield curve, which has been in the spotlight recently. An inverted yield curve occurs when short-term yields become higher than long-term yields. This inversion is seen as one of the most accurate signals of an upcoming recession, as it has often preceded previous economic downturns. The bond market’s current inversion has certainly caught the attention of investors and policymakers alike.
Davis points out that volatility is also increasing in the bond market. She explains that bond prices are more sensitive to changes in interest rates compared to stocks. As a result, when bond yields become more volatile, it indicates that investors are uncertain about future economic conditions and are adjusting their portfolios accordingly. Increased bond market volatility can be seen as a reflection of investor anxiety and a growing belief that a recession may be approaching.
Another factor Davis considers is the global economic slowdown. Several major economies are facing challenges such as trade tensions, geopolitical uncertainties, and a decrease in manufacturing activity. Davis argues that these global issues are causing investors to gravitate towards the relative safety of bonds rather than taking on the risk associated with other asset classes.
While Nancy Davis offers insightful analysis and warns of an impending recession, it’s important to note that the bond market is just one piece of the puzzle when it comes to forecasting economic downturns. Other indicators, such as stock market performance, consumer sentiment, and job growth, should also be taken into account.
Nevertheless, the bond market’s distress signals should not be ignored. Investors and policymakers must remain alert and monitor the situation closely. In uncertain times, it is vital to diversify portfolios, consider risk management strategies, and have a well-thought-out investment plan in place to weather potential economic storms.
In conclusion, Nancy Davis believes that the bond market is signaling a potential recession. The inverted yield curve, increasing volatility, and global economic challenges are all contributing to this warning. While caution is necessary, it is crucial to remember that no single indicator can accurately predict the future of the economy. Therefore, it is essential to consider multiple factors and seek professional advice to make informed investment decisions.
It has the potential to be massive
Nancy is right on…smart girl.
Recessions are part of the economic cycle, all you can do is make sure you're prepared and plan accordingly. I graduated into a recession (2009). My 1st job after college was aerial acrobat on cruise ships. Today I'm a VP at a global company, own 3 rental properties, invest in stocks and biz, built my own business, and have my net worth increase by $500k in the last 4 years.
The wolf using folksy language to appeal to the clueless sheep. I wonder if, as a fund manager, she benefits from low interest rates.
https://youtube.com/@FI_Journey777?si=U6EoZAe_eFJMDSe_?sub_confirmation=1
What is going to happen is the housing market is going to crash and realitors are screwed. When the housing market triple the housing payments expecting consumers to buy or rent failed. Now, recession is on the way and everything is going to crash. Who loses? Everyone! This is this is what GREED looks like.
Limit credit da
She’s wrong
Nancy is smart. Reduce your darn balance sheet Jerome!!!
Nancy Davis should be the next Federal Chairman!! Jerome Powell did great, but he will likely resign after they are done with rate hikes.
Nancy Davis is super smart and very eloquent.
Everyone wants a recession so bad, yet unemployment is basically 0%. The housing market is stable, bottom line these rates are here to stay for at keast two years. Not much higher, but not lower.
CNBC, the cheerleaders for failing Democrat policies. Joe Biden, Democrats, hate oil, they hate anything carbon-based! Humans are carbon-based.
Why do these CNBC cheerleaders never talk about Democrats and environmentalists driving up oil prices?
We need a whole percentage point increase to get ahead of inflation. Saudi Arabia and Russia just cut oil production.
Nancy's perspective is always good to listen to….she is solid.
Hit 200k today. Gratitudes to you for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in June 2022
what
The western financial system is the biggest scam mankind has ever seen. Nothing is real. Millions of people will see their retirement vanish with the blink of an eye.
LOOKS LIKE LADY GAGA
Biden inflation has hurt many people. Gas, food and every day living has become hard.
One point to clarify this, the wealthy do save up enough to buy their next assets. They do not save as a means of building wealth or as a retirement strategy
Putting well-earned money into the stock market can be over emphasized for first-time investors, unlike a bank where interest is sure thing! Well, basically times are uncertain, the market is out of control, and banks are gradually failing. I am working on a ballpark estimate of $5M for retirement, and I have a good 6-figure loaded up for this, could there be any opportunity for a boomer like me? I'm nearly 60.
Awful guest
Her IVOL ETF is pointless and terrible
I sold out of Doubleline TR, Core Bond, and Emerging Markets bond months ago, couldn’t be happier having done so. Years of underperformance. Still holding Doubleline floating rate.
Wallstreet Jackholes have been predicting recession for 2 years. If they keep screaming it for a few more years, maybe they'll get it right.
We are not going to see a cut for a while
someone please remind Scott that even though he is in Cali, socks are still mandatory
The funny thing is this woman seems to forget that in 1971 the interest rate was 7% by 1981 it was 18% and in 1991 10%.The facts are $4 trillion in corporate debt is getting ready to mature and will have to be refinanced at higher rates killing profits and honestly forcing many companies who have been surviving on low interest rates to close shop. Many of these issues are from 2008 which never got addressed but simply kicked down the road.
" Important:The Federal Reserve eliminated reserve requirements for all banks as of March 15, 2020. The move was part of its effort to keep economic activity healthy during the COVID-19 pandemic.The Fed's action effectively sets the reserve requirements ratio at 0%.[1]"
Maybe you need to be a banker to understand that for sure every bankers best friend understands that since that is how he got his Lear jet with no income and refinanced it 4 times without a payment. He used it to fly to Europe to buy stocks and commercial properties. Which he borrowed from his banker who just printed the money on paper.
Hence BRICS and in March it will cost 100 US dollars to buy one BRICS dollar. All bonds will be worthless.
this is why i choose the blonde market
Several of the biggest market experts have been voicing their opinions on exactly how awful they think the next downturn would be, and how far equities may have to go, as recession draws closer and inflation continues well above the Fed's 2% objective. I'm trying to build a portfolio of at least $850k by the time I'm 60, therefore I need suggestions on what investments to make.
I've been around the market long enough to know that this ups and downs can still prove to be highly beneficial, time again I've seen people use these windows of opportunities to make millions and set up for retirement. I just don't know how they did it.
Great discussion!
Stock market and housing market crash coming…joyous times ahead