Market jitters lead to more declines as investors face growing risks | CBC News

All three major U.S. indexes — the Dow Jones, S&P 500 and Nasdaq — have dropped at least six per cent so far this month. (AP Photo/Richard Drew)

North America has been affected by a month that has definitely not been flattering since it has been very unstable for investors in the North American markets. In fact, the 3 main indices of the United States, the Dow Jones, the S & P 500 and the Nasdaq, have fallen at least six percent so far this month. While for its part, the S & P / TSX compound of Canada is not far behind with a decline of 5.5 percent in October.

Likewise, investors could face considerable risks that continue to increase.

James Alexander Michie | CBC News: As yield curves threaten to invert, market watchers sit up and pay attention

When the yield curve inverts, it's usually a sign the U.S. is headed for recession

A red figurine sits atop a trader's desk at the Frankfurt Stock Exchange last year. As short-term interest rates rise and long-term ones stay low, many economists are starting to worry about inverted yield curves and their knack for predicting recessions. (Krisztian Bocsi/Bloomberg)

It may not have escalated to the level of water cooler talk, but an obscure and obtuse-sounding economic indicator is a hot topic of conversation among the investment community of late.

The yield curve on government debt — the gap between how much long-term bonds pay out versus short-term ones — is at its lowest level in more than a decade, and opinion is somewhat divided on how bad a sign it is for the economy.

Under normal circumstances, the yield on long-term bonds should be much higher than the yield on short-term ones to properly reward investors for the risk of waiting longer to get paid, particularly since inflation can eat away at value over time.

Read the full story here:
http://jamesalexandermichie.com/james-alexander-michie-cbc-news-yield-curves-threaten-invert-market-watchers-sit-pay-attention/