SP 500 LONG TERM ANALYSIS
The long term US 30 YEAR and 10 YEAR bonds recently recently tagged 5.5% before falling to current levels of 4.1% and 3.9% respectively. Longer term falling bond yields generally point to a weak economic picture and therefore lower interest rates. Longer term higher
bond yields generally point to a stronger economic outlook, and therefore
higher interest rates, as the prospect of inflation becomes a reality. The FOMC has maintained the dollar interest rates at 5.5 % in its last three meeting, with its next meeting set to January 31. Falling yields, especially on the 10 YEAR NOTE, which is mainly the benchmark against which interest rates are measured, means that the investors are nervous, and money is flowing out of riskier assets with higher returns like stocks, and into save haven assets with moderate returns, such as the Treasury bills, notes and bonds. When, and not if, the FOMC starts cutting the interest rates, US500 STOCKS will follow suit and fall.
bond yields generally point to a stronger economic outlook, and therefore
higher interest rates, as the prospect of inflation becomes a reality. The FOMC has maintained the dollar interest rates at 5.5 % in its last three meeting, with its next meeting set to January 31. Falling yields, especially on the 10 YEAR NOTE, which is mainly the benchmark against which interest rates are measured, means that the investors are nervous, and money is flowing out of riskier assets with higher returns like stocks, and into save haven assets with moderate returns, such as the Treasury bills, notes and bonds. When, and not if, the FOMC starts cutting the interest rates, US500 STOCKS will follow suit and fall.
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