February 26, 2024

The current cycle of US yield curve brings better returns – Investments – Estado e-Investor – Top Financial Market News

  • The current cycle of the US yield curve will, historically, bring high returns to the US stock market investor and will continue for another nine months.

Current cycle of the yield curve To us This, historically, will bring more returns to the US stock market investor and will last for another nine months. This was revealed in a study conducted by Guide Investmentos. However, the different year, with the conflict between Ukraine and Russia, almost destroyed the gains for that period.

Looking at the survey’s 30-year record, the five “bear flattenings” of that period occur when interest rises shorter than long, flattens the curve and marks the tightening of power. 28% per index S&P 500Is one of the key players in the US stock market.

However, over the past 12 months, earnings have been 0.91%, a negative variance of 11.90% since the beginning of the year, which has drastically reduced earnings for the period.

Alex Lima, the S&P 500’s chief strategist, says: “The S&P 500’s historic best phase is precisely the bear’s plateau, where the job market is strong and the central bank has not yet adjusted its monetary policy to the point where it can stop the economy.” Guidance investments. According to the study, this cycle usually lasts 22 months and we are already in 13th place.

According to Lima, one of the characteristics of the US economy is the transparency of its economic cycles. The phases of expansion and contraction and inflationary moments are well defined, and this is also one of the reasons for the market’s slump in the general curve, because, in general, the change in the downturn indicates some more kind of change in the economic cycle. Before, before.

According to research, the US economy enters “bull stepping” after this period, with lower interest rates and lower prices Ooty (Federal Reserve System) and the economy is sluggish, feeling the weight Swelling.

“The adjustment will be large. The economy needs to slow down somewhat,” says Lima. The question is whether the recession will be produced by the central bank or by global or local demand adjustment, ”he concludes.

However, he points out that although the slope of the curve oscillates between inclination and flat moments, some cycles last longer than others. For example, between 2007 and 2017, the curve was very steep, corresponding to the Fed balance sheet increase and unemployment decline.