Bonds are flashing a huge recession signal — here's what happened to stocks last time it happened

The bond market is edging closer to signaling a recession, but don't panic yet, stocks could have a lot more to run even if the feared"yield curve" inverts, history shows.

This occurred after the Federal Reserve this week downgraded the U.S. economic outlook and signaled no rate hikes this year, worrying bond traders that a possible recession is in the near future. "Yield curve inversion won't signal doom," Jonathan Golub, chief U.S. equity strategist at Credit Suisse, said in a note last year."While an inversion has preceeded each recession over the past 50 years, the lead time is extremely inconsistent, with a recession following anywhere from 14-34 months after the curve goes upside down."

Stocks only started to go downhill about 30 months after the inversion in 2005 as the S&P 500 eventually wiped all the gains around mid-2007 and lost a whopping 30 percent in early 2009 as the great financial crisis raged, according to Credit Suisse.

The scare tactics are unbelievable!

Yes but this market rallied 20% right before it inverted. That didn’t happen before. Zero upside here.

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