Archives Aug. 19, 2019

Can Yield Curves Predict Stock Market Direction? - A Machine Learning Perspective

Last update on Aug. 19, 2019.

Image Credit: dani3315 / Shutterstock.com

 

Many investors are concerned about the yield curve today. Generally speaking, a positive sloping yield curve (i.e. where long term interest rates are higher than short term rates) portends future economic health. By contrast, negative sloping yield curves (a.k.a. “inverted” curves) have tended to precede recessions.

Today, the yield curve is the most inverted it’s been since before the financial crisis. This has led some investors to wonder: should they sell stocks today to protect their portfolios? Or should they hold onto them because, despite widespread belief, yield ...

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