The financial markets are full of clues and queues for investors to consider when they are looking for the next path forward in their portfolios. Though some of these factors aren’t as clear-cut as watching a price chart move around certain technical levels, they’re a bit more intricate and deeply rooted in the market’s fabric. Such indicators can come from signals from different asset classes, such as bonds.
Today, the bond market is sending one such signal through the “Yield Curve”, which is finance talk for tracking the difference in yields between the ten-year treasury bond and the two-year treasury bond. The premise of this indicator is that when it steepens (the ten-year yield is now much higher than the two-year yield), those companies exposed to the long end of the curve will likely start to benefit from higher earnings via these yields.
