Market Snapshot: This time, an inverted yield curve suggests the stock market has already peaked, some analysts say

Slowing economic growth and an inverted yield curve has many investors worried about a potential recession in the next year or two, but also has them excited for the heady stock-market returns that have often been sandwiched between an inverted yield curve and the subsequent economic downturn.

But some analysts and economists are warning that statistical averages can be misleading, and that there is reason to believe that the latest yield curve inversion signals returns for the rest of year will be tepid at best and that the stock-market top may already be in.

Oliver Jones, market economist for Capital Economics, told MarketWatch that while it is sometimes the case that stocks continue to deliver strong returns for many months after a yield curve inversion—as they did in the lead-up to the 2007 stock-market peak—it is by no means the rule, and already weakening economic data suggests that equity investors won’t be so lucky this time around.

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