The Yield Curve is steepening and this is GOOD! It’s a signal for strengthening markets.

I have refreshed some of my macro charts and am pleased to report that the yield curve as defined by the spread between the 10 yr Treasury rate and the Fed Funds rate has widened significantly.  As can be seen in the following chart – a rising yield curve has been a good signal for a strong gain in the NASDAQ (and other indices).  The level and rate of change in the yield curve is not unlike the moves seen in 2002-2003 and 2009.  The implication is the NASDAQ may continue to rise albeit at a slower rate until the yield curve flattens materially.   Jeb B. Terry, SR.  Jan. 13, 2014

Yield curve v NASDAQ 1-12-14

Aberdeen Investment Management – a guide service for micro-cap technology investment

Leave a Reply

Your email address will not be published. Required fields are marked *