History shows initial inversion a better buy signal. Although the U.S. Treasury 2-10yr Yield Curve (YC) has yet to invert, over the past seven economic cycles, the median SPX gain from the initial inversion to “the” cycle peak is 21%, with a recession a median 19 months after the initial inversion (page 7). If you look at the previous three cycles accompanied by historic credit generation, the SPX gain to peak rises to 34% and recession is 25 months later.

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