Will The S&P 500 Comply with Crude Oil’s Fall?


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S&P 500 Vs. Crude Oil Vs. 10-Year Bond Spread

S&P 500 Vs. Crude Oil Vs. 10-Year Bond Spread

This chart looks at the performance of the , and the Yield on the over the past 4 months.

Crude has declined about 14% more than the S&P 500 did during this time frame. Yields have declined, even more, around 36%. That is a huge spread between these assets over such a short period of time.

A Few Important Questions

  • Will the S&P 500 fall another 14% to catch up with crude oil’s decline?
  • Will the S&P 500 fall another 36% to catch up with the decline in yields?
  • Have crude and yields dropped too far?
  • Odds are very high that these fish-mouth spreads will narrow, as spreads of this size historically narrow over time.

    Is it possible that the spreads will narrow from a decline in stocks and a rally by the other two?

    These days, anything is possible.

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