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This indicator is flashing recession signs. Tips for your investment

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Moomoo Learn wrote a column · Mar 31, 2022 03:53
[ What's new ]
· U.S. 5-year and 30-year Treasury yields on March 28 inverted for the first time since 2006.
· The U.S. 2-10-year yield curve briefly inverted for the first time since August 2019 on March 29, raising fears of a possible recession.
Source: moomoo, until 2022/3/30
Source: moomoo, until 2022/3/30
[ Why does it matter? ]
Historically, the two- and 10-year Treasury yield curves inverted before each recession since 1970, with a recession following after 17 months.
It's a sign that the market thinks interest rates will have to fall in the future, which implies slower growth or even a recession.
This indicator is flashing recession signs. Tips for your investment
However, analysts have some positive opinions.
"An inversion without a recession is more likely." said Seth Carpenter, chief global economist at Morgan Stanley.
"There's nothing magical about a yield-curve inversion," said Caldwell, adding that it doesn't mean the economy is going to shrink. "It's not a light switch that's flipped."
Note: It doesn't work all of the time, but it has a high rate for portending a future recession.
[ The yield of treasury bonds ]
The yield on U.S. Treasury bonds is a key metric investors watch as it impacts other asset prices, feeds through to banks' returns and has been an indicator of how the economy will fare.
This indicator is flashing recession signs. Tips for your investment
This indicator is flashing recession signs. Tips for your investment
You cannot predict the future, but you can protect yourself. For now investors could brace themselves for market swings.
If investors do face a recession, is there anything you should do?
- Safe-haven stocks
Certain safe haven stocks might be expected to outperform during market turmoil, such as Utilities, Consumer Staples, and Healthcare.
For example
How to find different industries on Moomoo?
This indicator is flashing recession signs. Tips for your investment
-ETF
Should you consider gold ETF?
You can choose different ETF types according to your preference and allocation.
How to find an ETF on Moomoo?
This indicator is flashing recession signs. Tips for your investment
Note: All safe-haven assets aren't guaranteed to produce positive returns in all market downturns.
Before you invest, you need to know:
-How ETFs work?
-How to invest ETFs for maximum return.
-What are the disadvantages of ETFs?
Get you prepared now
For more investment knowledge and trends, welcome to Learn in the Community.
This indicator is flashing recession signs. Tips for your investment
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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