Even with another part of the U.S. Treasury yield curve flashing recession signals, U.S. stocks aren’t necessarily doomed to fall in 2023, according to James Paulsen, chief investment strategist at the Leuthold Group.
Here’s his chart showing why stocks in the next two years could produce positive returns, if past performance of the S&P 500 matters in this tightening cycle.
It hinges on what happens next, once the 3-month Treasury bill rate has exceeded the 10-year Treasury yield, causing a yield curve “inversion,” which has been a reliable indicator that a U.S. recession looms.
