Monday, April 12, 2010

Stocks follow interest rates

Are rising rates bullish or bearish for the stock market?


Those answering bearish may want to consider the chart below. Over the last five years, there appears to be a positive correlation between the 10-Year Treasury Yield ($TNX) and the S&P 500. Both rise and fall together. Also notice that rates led the stock market in July 2007 and December 2008.



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