On the stock market today, knowing which stock bond signals to act on or ignore is one of the biggest challenges.
According to recorded data by HCR Wealth Advisors, the S&P 500 Index reached new peaks in early May of 2019. The market responded by pulling back slightly for about 6-8 weeks of time until it reached new highs. When the stock market reaches a new high like this, it is predicting a positive influx in economic growth.
Due to the positive growth in the stock market as recorded by HCR Wealth Advisors, more money is going into it as a whole. With 90 billion dollars being taken out of the stock market, 220 billion more was put into it.
This trend in the stock market signals that there is a favorable investor sentiment at hand, but the bond market does not say the same. Bond investors would see the bond yields rising and the Fed continuing to raise interest rates if it were favorable. The opposite trend is showing on the stock market. Interest rates are falling. Yields have fallen from 3.20% of last November to below 2.0% in recent times. Yields have not been lower since before the election.
All this change reflects caution for years to come and may signal the early signs of a coming recession. The only problem with the indicators at hand is that they have a lag time. There can be considerable lag before the onset of a recession.
Founded in 1988, HCR Wealth Advisors is a wealth management firm that is dedicated to providing successful financial and investment strategies to their clientele base. HCR Wealth Advisors is based out of Los Angeles and has over 700 clients.
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