The 10y-2y bond yields are important to visual the long and short term expectations of the market. Usually, when the 10y-2y go negative it signals a reversal for the stock market. As you can see, yields (top) are inversely correlated to the S&P (bottom). Yields bottomed and turned around with the Covid crash but the stock market continued to rally.
Is this time different? Has stimulus changed the correlation as investors and companies have gotten use to the up only stimulus paradigm?
Is this time different? Has stimulus changed the correlation as investors and companies have gotten use to the up only stimulus paradigm?