After becoming less inverted in seven out of the prior nine trading days heading into last weekend, it was looking as though the yield curve was working its way out of inverted territory. After Tuesday’s dovish commentary from ECB President Mario Draghi, though, traders flooded into fixed income, sending yields lower and putting additional pressure on the already inverted curve. Today, the market is undoing some of that pressure, but 10s/3s still remains inverted by 10 basis points.
What’s notable about the yield curve today is that it is now on pace to finish the day at inverted levels for 20 consecutive trading days. In our latest B.I.G. Tips report, we analyzed S&P 500 performance following periods of extended yield curve inversions to see if there was any connection to future equity market performance. To see the report, sign up for a monthly Bespoke Premium membership now!