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.
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