Why Bonds Should Keep The Average Investor Up at Night

Author:
Publish date:
Video Duration:
0

 Not paying attention to the bond market?

Well, maybe it's time to start.

In case you missed it, there was a yield curve inversion before the market opened Wednesday, Aug. 14. 

And, while that is a historical indicator of a recession, here's what investors need to pay attention to in the bond market now. 

Michael Reynolds, investment strategy officer at Glenmede, sat down with TheStreet to explain why investors should be paying close attention to the bond market. 

"So, I think equity markets have sort of been conditioned to be watching the bond market, particularly the yield curve for signs that recession is coming. We've seen the two to 10 curve or the three-month 10-year curve. Some people like to quote one or the other, but both are inverted or have inverted over the past couple of days. And we even saw the three 10 invert earlier this year. [We] tend to see [that point towards future recessions]. But you know, at this point we're sort of discounting the signal that the yield curve is giving us at this point. We're seeing some pretty big global dislocations in the bond markets, whether it's, you know, the German yield curve. The entirety of the Germany yield curve is in negative territory now. $16 trillion worth of global bonds are trading at negative yields," said Reynolds. 

Premium Pick: Just How Low Could Interest Rates Go in This Environment?

Jim Cramer LIVE Replay: Jim Cramer on Recession Fears: 'Dial Back the Hysteria'

Jim Cramer Quick Clip: Investing Is Not Politics

Investing Education: How to Better Understand What an Inverted Yield Curve Means

Trade War: How the Tariff Delay Is Impacting Consumers

Earnings Preview: Nvidia Earnings: 3 Things to Watch

TheStreet Explains:How to Use a P/E Ratio When Picking Stocks

Subscribe to our Youtube Channel for more videos : Listen our latest Podcasts on Soundcloud

Catch Up: Today's Top News Videos Below