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.

Россия Последние новости, Россия Последние новости

Similar News:Вы также можете прочитать подобные новости, которые мы собрали из других источников новостей

Global stocks wilt as Fed shift sparks stampede into bondsEuropean shares wilted and there was a stampede into bonds on Thursday, after th...
Источник: Reuters - 🏆 2. / 97 Прочитайте больше »

Skittish investors pull more than $20 billion from stocks, rush into bonds: BAMLGlobal equity funds saw massive outflows this week, a sharp reversal from last w... The long-term indentured bullet bonds sold on WallStreet are in truth no safer than equities or stocks. Companies take on too much debt to accept investors' offer of easy money on credit, but ultimately the Establishment LowInterestRate mantra from federalreserve cuts no ice. Thank the fed chairman opening his mouth again. Can’t have healthy economy and low rates. Could have fooled us.
Источник: Reuters - 🏆 2. / 97 Прочитайте больше »

A Wall Street economist has uncovered a new and improved way to see a stock-market crash coming — and he warns the alarm bells are already going offNomura economist Takahide Kiuchi says junk bonds are no longer warning investors about stock selloffs. But he's found a new group of bonds to take their place. Y’all really expect me to pay for an article that has a typo in it in the first paragraph?
Источник: BusinessInsider - 🏆 729. / 51 Прочитайте больше »