Thread by @saxena_puru

1) I've gone through the daily data of the relevant UST spread (10Year minus 3Month).

Research papers on this subject state that fleeting inversions (lasting a few days) are irrelevant + not a valid signal.

So, I've only counted inversions which persisted for an entire month.

2) In this study, BLUE arrows represent when a persistent inversion started and RED arrows plot the 30 calendar days mark of persistent inversion.

The performance of $SPX for each inversion episode since 1962 are shown.

Here is the 1965-1967 episode -

3) Here is the 1968-1970 episode -

4) Here is the 1973-1974 episode -

5) Here is the 1978-1980 episode -

6) Here is the 1980-1982 episode -

7) Here is the 1989-1990 episode -

8) Here is the 2000-2003 episode -

9) Here is the 2007-2009 episode -

SUMMARY -

Post one-month of persistent inversion, on average, $SPX gained an additional 10% before peaking, it peaked 6 months later (in two instances it peaked before inversion), the bear-market wiped out 36% of $SPX value and bear-market low was 28% BELOW level of inversion!

@johnauthers @jimcramer @carlquintanilla @BeckyQuick @DavidInglesTV @MaryLloyd4 @lisaabramowicz1 @tracyalloway @ReformedBroker @petenajarian @jonnajarian @GuyAdami @MelissaLeeCNBC

Here are the historical facts about yield curve inversions and its effect on the stock market.