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Rare In The S&P 500, Is The Peak In Bond Yields? -by Ecork

S&P 500, US bond yields, oil Analysis and talking points

  • Percentage of stocks within the S&P 500 above 50 DMA at historic lows
  • The short-term outlook is less bearish for stocks and bonds with lower oil

The S&P 500 is down more than 23% from its peak, which means that the index is now in bear market territory. Looking at more finer details and as pointed out by several analysts via FinTwit (financial analysts on Twitter), the number of stocks within the S&P 500 above the 50 DMA (Figure 1) is now less than 2%, which is a rare occurrence, having occurred in four Only previous occasions since 2000.

Sub-date 2% of the stock is above 50DMA

  • 07/22/02
  • 10/07/08
  • 12/24/18
  • 03/20/20

Percentage of stocks within the S&P 500 above 50 DMA at historic lows

The short-term outlook is less bearish for stocks and bonds with lower oil

Now while I see stocks are still bullish when selling, the returns on the S&P 500 after stocks dip above the 50 DMA to less than 2% are generally positive as shown in the table. However, I have to admit that the sample size is very small. However, as oil prices continue to slide, the near-term outlook for stocks and bonds is becoming less bearish.

S&P 500 Outlook: Rare S&P 500 Occurrence, Peak Bond Yields?

Source: DailyFX, Refinitiv. T + 1 = 1 day after sub 2% of stocks above 50DMA

Peak Bond Yield – Are We There Yet?

The US 10-year rate broke out last week from a previous session high of 3.26%, and rose to 3.5% as traders panicked after the Wall Street Journal reported that the Federal Reserve may seek to raise interest rates by 75 basis points in the wake of bad inflation data. . But since the Fed meeting, the US 10-year rate has fallen more than 20 basis points and is now forming a weekly doji candle, an indication that rates may have peaked in the short term. Besides, with oil prices trending lower, this bodes well for bonds and will be a signal of lower yields.

How to trade a Doji candlestick pattern

US 10-Year Yield, Brent Crude Oil Scheme

S&P 500 Outlook: Rare S&P 500 Occurrence, Peak Bond Yields?

Source: Refinitiv

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