• The most recent stock market bounce proved fleeting as this correction remains on track to be a 3-4 month event
  • Part of the Treasury curve inverted in response to the stock price drop, further worrying equity investors
  • The more significant government agency curve is still far from inverting
  • Money market and credit investors are beginning to price in a Fed rate cut next year, which is reminiscent of the 1995-1996 time frame as that credit-led bull market extended another five years
  • As equity investors look to exit stock positions, public pensions are looking to add to their credit positions once the equity selling subsides, fueling shadow banking practices designed to boost share prices.

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