The days of individual price action in the financial market are long gone, as one asset class like stocks, bonds, or commodities used to move independently without much pressure from others. However, the past few decades have changed all that, especially as more participants join the stock market and data becomes available nearly instantly in the palm of investors’ hands.
Knowing this, investors need to pay attention to different price actions in asset classes to determine where the next wave of volatility (and opportunity) might be. That is precisely why the current decline in bond prices, with an inverse rise in bond yields, can signal to investors what other asset classes or specific stocks might do in the coming months, if not quarters.
