Can’t Avoid a Correction for Equity Markets Near Term, Says Saxo’s Creagh

The video discusses the implications of yield curve inversion on economic growth, noting that typically the economy peaks 16 months after an inversion. It highlights the need for a persistent inversion of greater magnitude before signaling a recession. Historical context is provided with a reference to the 2006 market rally following a curve inversion. The current market conditions are analyzed, emphasizing that accommodative monetary policy is already priced in, and future data deterioration could lead to a market correction.

What is the typical timeline for the economy to peak after a yield curve inversion?

• 2 years

• 10 months

• 16 months

• 5 months

What magnitude of yield curve inversion is suggested as a warning signal for a recession?

• 25 to 35 basis points

• 15 to 25 basis points

• 10 to 15 basis points

• 5 to 10 basis points

In 2006, what was the market reaction to the yield curve inversion?

• A rally in US stocks by 26%

• No significant change in US stocks

• A decline in US stocks by 10%

• A decline in US stocks by 26%

What has been a major factor in the recent market rally since December lows?

• Increased interest rates

• Accommodative monetary policy

• Rising inflation

• Decreased consumer spending

What is the expected market reaction as economic data continues to deteriorate?

• Markets will continue to rise

• Markets will remain stable

• Markets will likely face a correction

• Markets will ignore the data