Howdy readers. I'm Phil Rosen, reporting from New York.
On this day in 1940, Disney debuted "Pinocchio," and the nosy puppet became one of the most beloved characters in film history.
I bring this up because some people say that, unlike the marionette, markets don't lie.
In that case, it may be wise to heed $4 that's saying we'll avoid a recession after all.
If this was forwarded to you, sign up here>$4. Download Insider's app here.>$4
1. Depending on who you ask, a recession may be far off or it may have already happened.
But if you look at the bond market, there's a clear answer that seems to be forming: The US economy $4.
That's because the spread between $4s and Treasury yields is steadily narrowing, according to DataTrek Research.
Underlying strength in debt markets $4, rather than teetering.
The spread between corporate bond yields and US Treasuries helps measure the risk appetite of bond traders. That spread widens in times when pain looks more likely and investors want to be compensated more for taking on higher risk.
This likely comes as a surprise to some investors, because a year of climbing interest rates and elevated inflation has led most forecasters to $4.
"When markets are uncertain about future cash flows, spreads increase to compensate investors for that risk," DataTrek co-founder Nicholas Colas wrote in a note. "When markets grow more comfortable that earnings are stable or even increasing, $4."
Over the past several months, the spread on the yields between those bonds has slipped to levels below the average seen in the five years before 2020, a $4.
That signals economic strength, and should be $4 in the year ahead and beyond, the firm noted. As Colas put it:
"Today's spreads are just slightly below the 2015-2019 averages, which says the corporate debt market is no more worried about a $4 than it was in a period of relative financial and economic stability."
What's an indicator you are watching to keep tabs on the likelihood of a recession? Tweet me (@philrosenn>$4) or email me (prosen@insider.com) to let me know.
In other news:
2. US stocks are on the rise Tuesday, with investors anticipating comments from Fed Chair Jerome Powell at the Economic Club of Washington at 12:40 p.m. ET. Meanwhile, Bed Bath & Beyond secured a $1 billion fundraising deal just as it neared bankruptcy — $4
3. On the docket: Spirit Airlines, Aramark, and Chipotle, all $4.
4. Bank of America recommended these 15 stocks right now. This batch of names can give portfolios an extra boost when they beat earnings and sales expectations, Jim Carey Hall explained.$4.
5. Chinese stocks and ETFs dropped after the US shot down the China balloon. After Beijing officials claimed the balloon was for research purposes, shares in Hong Kong and Shanghai slipped, $4. Separately, early Tuesday, Turkish stocks also declined after $4.
6. Investors are not in a bull market and should not hold their breath for the Fed to cut rates, according to Morgan Stanley. Strategists warned that markets have yet to price in an earnings recession, which could pose a major headwind in 2023. $4
7. The new CEO of FTX responsible for cleaning up Sam Bankman-Fried's crumbled empire charged $690,000 for two months of work. The executive said previously that his rate was $1,300 an hour. $4
8. It'll be easier to find a home in certain places this year compared to others. Housing inventory looks poised to grow while mortgage rates come down — $4
9. This 54-year-old high school teacher owns 64 single-family homes in Chicago. Dominic Kosteris bought his first home in 1996, and now he's profiting about $45,000 a month. $4
10. Artificial intelligence stock C3.ai extended its massive rally. The mania surrounding ChatGPT has spilled over into a range of names with exposure to AI, such as C3.ai. $4.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn>$4 or email prosen@insider.com
Edited by Max Adams (@maxradams>$4) in New York.