The Tell: The stock market often produces its strongest returns after yield curve inverts, notes top quant

This article was originally published on March 26.

One of Wall Street’s top quantitative analysts was the latest to weigh in on the inversion of the yield curve, reminding investors Tuesday that the phenomenon, while viewed as a reliable recession indicator, also tends to signal a period of strong returns for the stock market.

“Historically, equity markets tended to produce some of the strongest returns in the months and quarters following an inversion. Only after [around] 30 months does the S&P 500 SPX, -0.54% return drop below average,” said Marko Kolanovic, global head of macro quantitative and derivatives research at J.P.

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