A closely watched measure of the Treasury yield curve briefly inverts, underlining recession worries. Here's what it means for the stock market.
Blink and you missed it, but the yield on the 2-year Treasury note briefly traded above the yield on the 10-year note Tuesday afternoon, briefly inverting the yield curve and triggering recession warning bells.Data shows that it hasn’t paid in the past to abandon stocks the moment the Treasury...
“For example, investors who sold when the yield curve first inverted on Dec. 14, 1988, missed a subsequent 34% gain in the S&P 500 index,” Levitt wrote. “Those who sold when it happened again on May 26, 1998, missed out on 39% additional upside to the market,” he said. “In fact, the median return of the S&P 500 index from the date in each cycle when the yield curve inverts to the market peak is 19%.
Which curve? An inversion of the 2-year TMUBMUSD02Y /10-year TMUBMUSD10Y measure of the yield curve has preceded all six recessions since 1978, with just one false positive, said Ross Mayfield, investment strategy analyst at Baird, in a Monday note. “The remarkable thing is that the two have always gone hand in hand directionally until around December 2021 when 3m/10s started to steepen as 2s/10s collapsed,” said Jim Reid, strategist at Deutsche Bank, in a Tuesday note .
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
A key part of the Treasury yield curve has finally inverted, setting off recession warning — here’s what investors need to knowA closely watched measure of the yield curve that serves as one of the bond market's most reliable recession indicators inverted on Tuesday.
Read more »
Treasury yield curve flattening accelerates as one spread briefly inverts for first time since 2016Most Treasury yields slipped on Monday, as buyers returned to government debt following last week's brutal selloff.
Read more »
Recession Fears Tied to Treasury Yields Are Overblown, Canaccord's Tony Dwyer SuggestsCanaccord Genuity’s Tony Dwyer believes investors should emphasize a different yield curve to predict the stock market’s direction.
Read more »
Inversion of key U.S. yield curve slice is a recession alarmA closely monitored section of the U.S. Treasury yield curve inverted on Tuesday for the first time since September 2019, a reflection of market concerns that the Federal Reserve could tip the economy into recession as it battles soaring inflation.
Read more »
Explainer: Yield curve flattening and inversion: What is the curve telling us?The U.S. Treasury yield curve has been flattening with parts of it inverting as investors price in an aggressive rate-hiking plan by the Federal Reserve as it attempts to bring inflation down from 40-year highs.
Read more »