Correlation between S&P 500 and 10 year treasuries
I am opening this post for a discussion. The chart shows the correlation between interest rates and the stockmarket. Most of the time the relationship is positive. Higher interest rates lead to higher stock prices. This is kind of counter-intuitive but strongly the case. The chart shows the 1 hour chart, but the relationship can be even stronger on shorter time periods.
It seems that the two asset classes follow each other most of the time. However, at certain times there is a strong deviation. This seems to be the case when something big happens. Like yesterday when Powell's dovish speech push markets up and interest rates down. However, on a normal day, the relationship is positive.
Which asset class is the leading indicator? Or are they simultaneous? One could aldo add EURUSD making the map core complex.
Comments and discussion encouraged
It seems that the two asset classes follow each other most of the time. However, at certain times there is a strong deviation. This seems to be the case when something big happens. Like yesterday when Powell's dovish speech push markets up and interest rates down. However, on a normal day, the relationship is positive.
Which asset class is the leading indicator? Or are they simultaneous? One could aldo add EURUSD making the map core complex.
Comments and discussion encouraged
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