Remember the scene from the movie Top Gun when Tom Cruise’s character, Maverick, was asked how he could have observed a Soviet fighter jet perform a certain maneuver if he was flying above it?

“Because I was inverted,” replied Maverick.

Tom Cruise could have been playing the US Bond Market in Q2 as longer maturity bond yields fell below those on the shorter end of the curve, or in other words, inverted.

Conventional wisdom says that when long term bonds become more pricey than shorter term bonds, a recession is coming. However, as we discussed last November in this Accountable Update post, sometimes the stock market does an Iceman (Val Kilmer) and calls BS on the bond market.

The S&P 500 made new highs and the economy continued humming along at 3.1% in Q1 with US job openings outnumbering the number of people that are out of work. With Fed rate cuts now seeming more likely, an elusive trade deal with China, saber rattling in the Middle East (does that ever stop?), and the rhetoric of the 2020 Presidential campaign already making headlines, we might as well get our popcorn ready for the second half of 2019. If you came in late or weren’t paying attention, here’s what happened in the last act.