The hand wringing among stock investors over an inverted yield curve is overblown, if history is any guide.
So says Canaccord Genuity’s strategist Tony Dwyer, who has studied equity-market performance after the payout of long-term Treasuries fell below that of short-dated government debt. Such inversions have occurred seven times since the early 1950s and all but one preceded equity gains. Specifically, the S&P 500 Index rose a median 19 months before peaking after an inversion, with returns reaching 21 percent.
