Bonds Are Hinting They’ll Hedge Stocks Again as Growth Bets Ease
- Stock-bond link and mainstay of diversified portfolios is back
- Inflation worry recedes but supply issues seen curbing rebound
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The furious rally in Treasuries has rekindled a decades-old relationship between stocks and bonds that’s at the heart of basic diversification strategies used by countless investors.
The 20-day correlation between futures for the S&P 500 and Treasuries turned negative for the first time since February, according to data compiled by Bloomberg. While longer-term measures remain positive, it signals a reversal in the recent trend.