By Akane Otani
The stock market is starting to move in the opposite direction of bond yields again.
That might bode poorly for stock returns over the rest of the year, says Morgan Stanley.
The bank's equity analysts took a look at the correlation between the S&P 500's performance and the 10-year U.S. Treasury's inflation-adjusted yield, otherwise known as the real yield. For much of the second quarter, that correlation was positive. In other words, even when real yields rose
In the past few weeks, however, the correlation between the S&P 500's performance and real yields has gone negative again.
Morgan Stanley says that means big data releases, like this week's consumer price index report , may start to have more of an effect on the stock market.
The "focus is likely to be on CPI once again this week after a couple of months where the pricing gauge was less of a focal point for equity investors," Morgan Stanley analysts wrote.
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(END) Dow Jones Newswires
July 10, 2023 12:45 ET (16:45 GMT)
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