'I'd love to say that the optimistic universe is most likely to prevail, but the talking heads talk endlessly about how a recession is inevitable,' CNBC's Jim Cramer says.
gave more proof that the American consumer is strong, but consumer spending could slip if concerns about yield curve inversion continue to dominate the conversation, Cramer argued.
The comments came after shares of the two retailers sprang double digits on top-and-bottom line beats and guidance raises. Their same-store sales data, the host said, corroborated what the market has learned about the consumer from other retailers such as Walmart and Home Depot. The yield curve on Wednesday, however, briefly inverted again. That happens when the 2-year Treasury yield climbs higher than the 10-year Treasury yield, which means investors can make more money on the shorter-term bond than the longer-term one. Economists use the inversion as a trusted measure to project recessions.
"When the yield curve inverted before the Great Recession, it was at the end of 2005. The stock market didn't peak until the summer of 2007," Cramer said. "That's not helpful." On the other hand, the host said that long-term U.S. bonds are falling because foreign investors are buying them up to get better returns than the lower interest rates on European bonds.
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