Countdown to Catastrophe? What the Yield Curve Means for Stock Bull Markets
- Closely watched portion of Treasury yield curve inverted Wed.
- Stocks have peaked anywhere from 2 months to 2 years after
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A key portion of the U.S. Treasury yield curve has inverted, an ominous sign for the economy and the stock market. But what investors should do about it now is a complicated question.
Looking at history, after the spread between two- and 10-year Treasury yields first turned negative 10 times going back to 1956, the S&P 500 topped out anywhere from two months to two years later, according to data compiled by Bank of America strategists. Often, bailing immediately after the signal flashed meant missing out on double-digit gains.