Updated: Jan 27, 2020
Happy Canada Day Weekend! A record breaking 1st half of the year for capital markets leads us into the 1st long weekend of the summer.
The yield on the benchmark 10-year U.S. Treasury note recently fell below 2 percent for the first time since 2016. This move followed a more dovish tone from the U.S. Federal Reserve in its June policy statement.
The odds of a rate cut in July now stand at 100 percent, according to the CME FedWatch Tool. Historically, a move under the key psychological level of 2 percent on the 10-year U.S. treasury bodes well for stocks.
Over the past decade, the 10-year note has dropped below 2 percent on 7 other occasions (separated by at least 3 months between crosses), 2 months after these moves, the S&P has traded higher 100 percent of the time, logging an average return of 4 percent.