When a key part of the U.S. bond market starts shrugging off new Federal Reserve interest rate hikes or tough talk on inflation, it’s probably time to buy stocks, according to James Paulsen, the Leuthold Group’s chief investment strategist.
To inform his call, Paulsen looked at the relationship between the 10-year Treasury yield TMUBMUSD10Y and the S&P 500 index SPX in several past Fed tightening cycles. He found five periods, since the mid-1980s, when the benchmark 10-year yield peaked, signaling bond investors “blinked,” before the Fed stopped raising its policy interest rate.
A similar patterned emerged in the tightening cycles of 1988-1990, 1994-1995 and it 2018-2019, with a peak 10-year yield signaling the Fed’s eventual end of rate hikes. The benchmark 10-year yield matters to financial markets because it informs prices for everything from mortgages to corporate debt. Higher borrowing costs can slam the brakes on economic activity, even provoking a recession.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
I am ready for the blink
So we’re just missing the peak.
Ireland Ireland Latest News, Ireland Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
10-year Treasury yield hovers around 4% as stock markets rally on solid earningsThe yield on the benchmark 10-year Treasury dipped on Tuesday, but remained close to the 4% mark, as stock markets rallied off the back of strong earnings.
Source: CNBC - 🏆 12. / 72 Read more »
Bond Market Woes Keep Mounting, Spreading Pain to StocksThe yield on the 10-year U.S. Treasury note settled above 4% last week for the first time since 2008 following another hot inflation reading. US inflation seems to be coming down now, albeit slowly. Soft US retail numbers could be indicating the onset of the expected recession
Source: WSJ - 🏆 98. / 63 Read more »
‘Material risk’ looms over stocks as investors face bear market’s ‘second act,’ warns Morgan StanleyStock-market investors have been adjusting to the jump in interest rates amid high inflation, but they have yet to cope with profit headwinds faced by the... No earnings, market sinks. Multiple reflect earning power of which their is little. Market has totally under appreciated risk for years Thought it was a one way ticket to rewards. Market give them, markets taketh away. Now is time when individual cos fundamentals matter
Source: MarketWatch - 🏆 3. / 97 Read more »
Investors should 'pick through' for stocks that have bottomed, Gilman Hill's Jenny Harrington saysInvestors should do research to find individual stocks that are at the right price, she said. Let me know the picks when y’all get them huh? Looks like APE bottomed at $1.48.. now at $2.10+ Tesla is a buy
Source: CNBC - 🏆 12. / 72 Read more »