Equities Ignore Recession, Profit Risks

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Financial markets are sending mixed signals. The US Treasury market, inverted at every standard point, is signaling the material risk of recession while the performance of the equity market points to only a slight pause in growth. At the same time, leading indicators such as tightening corporate lending standards, rising bankruptcies and falling housing suggest that economic and financial stress is increasing. How can investors make sense of it all?

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