Bonds and stocks appear to be getting back to their usual relationship, a plus for investors with a classic asset mix in their portfolios amid recession fears.
Bonds and stocks may be getting back to their usual relationship, a plus for investors with a traditional mix of assets in their portfolios amid fears that the U.S. faces a recession this year.
That classic portfolio, consisting of 60% stocks and 40% bonds, was hammered in 2022. It’s unusual for both stocks and bonds to tank so precipitously, but they did last year as the Federal Reserve rapidly raised interest rates in an effort to tame surging inflation in the U.S. Stock prices fell sharply that day amid fears of a slowing economy, but Treasury bonds rallied as investors sought safe-haven assets.
The iShares 20+ Year Treasury Bond ETF TLT has climbed 6.7% this year through Friday, compared with a gain of 3.5% for the S&P 500 SPX , according to FactSet data. The iShares 10-20 Year Treasury Bond ETF TLH rose 5.7% over the same period. The bond market has signaled concerns for months about a potential economic contraction, with the inversion of the U.S. Treasury market’s yield curve. That’s when short-term rates are above longer-term yields, which historically has been viewed as a warning sign that the U.S. may be heading for a recession.
As for longer-term rates, the yield on the 10-year Treasury note TMUBMUSD10Y ended Friday at 3.483%, also falling for three straight weeks, according to Dow Jones Market data. Bond yields and prices move in opposite directions. “An investor can rightly question the bond market’s recession-tilting call, but knowing it’s out there is better than being unaware of this important signal,” said Colas.
Indonesia Berita Terbaru, Indonesia Berita utama
Similar News:Anda juga dapat membaca berita serupa dengan ini yang kami kumpulkan dari sumber berita lain.
India court quashes write-off of Yes Bank's AT1 bonds - orderThe Bombay High Court on Friday quashed the write-off of additional Tier-1 (AT1) bonds issued by Yes Bank Ltd , according to a court order.
Baca lebih lajut »
Moody’s Further Downgrades Coinbase Junk Bonds, Joining S&PMoody’s has downgraded both Coinbase’s long-term credit rating as well as its guaranteed senior unsecured notes, citing “substantially weakened revenue and cash flow generation capacity.” By HeleneBraunn
Baca lebih lajut »
Anchorage Assembly reviews potential bonds, ballot propositionsThe Anchorage Assembly held a special meeting Friday morning to discuss all 12 proposed bonds and ballots they will be voting on next week. Friday’s two-hour meeting was focused on reviewing all.
Baca lebih lajut »
Recession 2023: Brace for downturn with bonds and these 3 stock sectorsHedge against recession with bonds while piling cash into these 3 stock sectors as markets stay flat in 2023, says Northwestern Mutual's investment chief
Baca lebih lajut »
India's Yes Bank has 'strong' grounds to appeal ATI bonds court order, CEO saysIndia's Yes Bank has 'strong' legal grounds to appeal against a court order quashing the write-off of its additional Tier-1 (AT1) bonds, Chief Executive Officer Prashant Kumar said on Saturday.
Baca lebih lajut »
Scientists working towards superconductors that allow current to flow without energy lossResearchers’ better understanding of copper-oxygen bonds may lead to the development of more efficient superconductors.
Baca lebih lajut »