Over the course of the last few months, Treasury yields have begun bouncing back from their Summer lows, pushing down bond prices. Simultaneously, the S&P 500 has risen strongly, reaching a new all-time high this week. This market phenomenon, wherein the price of stocks and bonds head in opposite directions, known as “divergence” can often be observed in the latter half of business cycles. That historical precedence can help investors build a roadmap for what to expect for both markets in coming months.
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