S&P 500 Index versus 10 Year US Treasury Yield Chart
There is a tight relationship between stocks, bond yields, and the economy.
Especially in times of steep stock market corrections, bear markets, and economic uncertainty.
The simple way of putting it is that treasury bond yields go down (interest rates) at the same time that the stock market declines.
In today’s chart, we take that theory one step further and highlight a number of occasions where stocks (the S&P 500 Index) and bond yields (the 10-Year US Treasury Yield) bottomed together – see each point (1).
Stock market bulls hope that now is one of those times (see each point 2). Bond yields have fallen sharply and stocks are down over 30 percent.