{"id":65808,"date":"2023-09-26T21:46:08","date_gmt":"2023-09-27T01:46:08","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/is-the-surge-in-oil-prices-and-treasury-yields-kryptonite-for-stocks-and-the-economy-heres-what-history-shows-according-to-bespoke\/"},"modified":"2023-09-26T21:46:11","modified_gmt":"2023-09-27T01:46:11","slug":"is-the-surge-in-oil-prices-and-treasury-yields-kryptonite-for-stocks-and-the-economy-heres-what-history-shows-according-to-bespoke","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=65808","title":{"rendered":"Is the surge in oil prices and Treasury yields \u2018kryptonite\u2019 for stocks and the economy? Here\u2019s what history shows, according to Bespoke"},"content":{"rendered":"
\n

The combination of higher energy prices and U.S. Treasury yields are seen as \u201ckryptonite for the economy,\u201d worrying stock-market investors, according to Bespoke Investment Group.\u00a0\u00a0<\/p>\n

\u201cInterest rates and crude oil both act as headwinds to economic growth, so when they\u2019re both rising at steep angles, it should raise at least some level of concern for all but the completely oblivious,\u201d said Bespoke in a note emailed Tuesday. \u201cWe were surprised to find that the only period where crude oil and 10-year yields surged right before a recession was leading up to the one in 2001.\u201d<\/p>\n

\n

With Monday\u2019s rise, the yield on the 10-year Treasury note \u201centered what we unofficially call \u2018bananas\u2019 mode,\u201d the firm said. Ten-year yields, which have jumped to their highest level since October 2007, have soared more than a percentage point since the intraday low in early April, according to the note.<\/p>\n

\u201cWhile not as monumental as the move in the 10-year, crude oil has also surged over the last several months,\u201d said Bespoke. West Texas Intermediate crude
\n CL00,
\n +0.69%<\/bg-quote>
\n was trading around $90 a barrel on Tuesday afternoon, after earlier this year falling below $70, FactSet data show.\u00a0<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

In the four recessions since 1983, similarly sharp increases as seen now in both Treasury yields and crude oil led up to only one economic downturn, with that being 2001, Bespoke found.\u00a0<\/p>\n

Bespoke looked at periods where oil was up at least 25% while the 10-Year Treasury yield rose at least one percentage point in the same six-month stretch, also digging into the S&P 500\u2019s performance over the following one-month, three-month, six-month and 12-months periods.\u00a0<\/p>\n

History shows that returns were on average \u201cweaker than the long-term average since 1983 for all timeframes\u201d examined by the firm,\u00a0 according to the note.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

But \u201con a median basis, only the six-month decline of 2.54% was weaker than the long-term average gain of 4.77%,\u201d the note shows.<\/p>\n

\u2018Bumpy ride\u2019<\/h4>\n

\u201cThe fact that returns were positive over three-quarters of the time three months later, higher less than half of the time over the next six months, but then higher two-thirds of the time a year later, suggests that it could be a bumpy ride,\u201d said Bespoke.\u00a0<\/p>\n

U.S. stocks ended sharply lower Tuesday as worries over climbing Treasury yields persisted. The Dow Jones Industrial Average
\n DJIA
\n fell 1.1% in its biggest daily percentage drop since March, while the S&P 500
\n SPX
\n slid 1.5% and the Nasdaq Composite
\n COMP
\n slumped 1.6%, FactSet data show.<\/p>\n

The yield on the 10-year Treasury note
\n BX:TMUBMUSD10Y
\n rose 1.7 basis points on Tuesday to 4.558%, continuing to climb after increasing three straight weeks, according to Dow Jones Market Data. Just this month, 10-year yields have jumped 46.8 basis points.<\/p>\n

Read:<\/strong> Why the stock market\u2019s September stumble isn\u2019t just about rising bond yields<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The combination of higher energy prices and U.S. Treasury yields are seen as \u201ckryptonite for the economy,\u201d worrying stock-market investors, according to Bespoke Investment Group.\u00a0\u00a0 \u201cInterest rates and crude oil both act as headwinds to economic growth, so when they\u2019re both rising at steep angles, it should raise at least some level of concern for […]<\/p>\n","protected":false},"author":1,"featured_media":65809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-65808","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nIs the surge in oil prices and Treasury yields \u2018kryptonite\u2019 for stocks and the economy? 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