Markets were decisively in “risk-off” mode last week. Following weak manufacturing news last Thursday, the yield on the 10-year Treasury sank to its lowest level since October 2017. The spread between the 10-year yield and the three-month yield, in fact, inverted once again, with the shorter-term bond yield higher by 6 basis points. As such, the “boring” yet mostly reliable utilities sector rotated to the top.
I’m not going to use the R-word here. All I’m going to say is that it might be time for investors to brace for a significant correction - especially