Negative yields spreads leave no alternative

When the blue line (represented by the U.S. 5 year T-note minus U.S. 3 month T-bill) nears and crosses above its own 200 week moving average, we often see the stock market (represented as the S&P 500 in orange) trade either sideways or lower. 

The S&P 500 rallies when the blue line is below its 200 week moving average and often at a negative yield spread.

May 18, 2024

by Rob Zdravevski

rob@karriasset.com.au