Stock Market Suddenly Shrugging off Yield-Curve Inversion
Investing.com – Short-term rates remained higher than long-term rates Wednesday, but investors may be getting over their yield-curve inversion aversion as equities climb.
The most-watched spread between the 10/2-year Treasury yields narrowed very slightly in afternoon trading, but remained firmly in negative territory at negative 4 basis points.
Maybe even more troubling for rate-watchers, 3-month Treasuries are paying more than 30-year Treasuries, with the 30-year bond yield hitting record lows again.
That’s a situation Investing.com Analyst Clement Thibault called “obviously insane.”
But stocks rallied in the afternoon, gaining steam in the absence of any more negative U.S.-China trade headlines and financial stocks bouncing back.
In comparison to bond yields, among the top income payers in the Dow Jones Industrial Average, Exxon Mobil 's (NYSE:XOM) yield is 5.18%, IBM (NYSE:IBM) pays 4.94%, Verizon (NYSE:VZ) pays 4.21% and Pfizer (NYSE:PFE) pays 4.19%.
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