What seven decades of yield-curve history tells us about the business cycle and the stock market, strategist says

Early Friday futures action shows Wall Street may struggle to break a three-day losing streak. No surprise why: bond yields, which have enjoyed a tight inverse correlation to stocks of late, remain near recent highs.

Importantly, during these occasions the inversion was shown to have preceded the eventual recession by a wide range of between seven to 25 months, with an average lag of 14 months. The crucial issue for equity investors is that they should be wary of the average double-digit-percentage-point stock rallies that come in the immediate aftermath of an inversion.

“On average, equity markets ‘bottomed’ about 20% below where they were when the curve first went into inversion. The range of outcomes would be consistent with the S&P 500 having more than 20% downside from the recent market highs,” Darda says. For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

Shares of RH RH, -1.28%, the furniture retailer formerly known as Restoration Hardware, are down nearly 8% after the company warned that the higher-end housing market that the company depends on would likely remain rocky.Best of the web South Korean film industry rocked by box office fraud allegations.Elon Musk ordered Starlink to be turned off during Ukraine offensive, book says.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Here's what seven decades of the yield curve says about the business cycle and the stock market, strategist saysThe bond yield curve has inverted 12 times since 1950, and equity investors should be wary.
Source: MarketWatch - 🏆 3. / 97 Read more »

4 key differences between money market funds and high-yield savings accountsConsumers looking to earn high interest on savings while having easy access to the cash can be torn between high-yield savings accounts and money market funds.
Source: NBCLA - 🏆 319. / 59 Read more »

Turn to these stocks for high dividend growth and free cash flow yield, Wolfe saysPlay defense with dividend strategies, the firm says.
Source: CNBC - 🏆 12. / 72 Read more »