10-Year Treasury Signaling Recession

The yield on the 10-Year Treasury bond is currently 2.5%. What's noteworthy is that it usually trades 300 basis points above real GDP. Therefore, with a 2.5% yield, the bond market expects real GDP to contract by 0.5%. This can be interpreted two ways: Avoid stocks because we are entering a recession, OR buy stocks now because the market has already discounted the possibility of a recession occurring. GDP growth for the second quarter came in at 2.4% for the advanced reading. This Friday we get the preliminary (second) reading on second quarter aggregate economic activity. Analyze Any Stock FREE! Click