Will there be further stock price decline due to the reversal of the yield curve?
It is said that when the long and short-term interest rate difference changes from negative to positive, in other words, when the reverse yield is resolved, stock prices will plummet significantly.
Currently, the yield curve is approaching 0, and we believe it will only be a matter of time before it is resolved.
During major crashes such as the IT bubble, Lehman shock, and corona shock,the yield curve has been resolved just before those events.。
The black shaded area on the table represents the time of major crashes, but at least during this period shown in the table,a crash occurs when the yield curve reaches 100% resolution.。
Although the stock market has already started to decline, August and September are also traditionally weak periods, so it seems necessary to be cautious and not exit the market too soon.
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