The 10-year US Treasury yield, at 0.77% as of October 19, is still near historical lows set earlier this year. Historically, 10-year Treasury performance for the next 10 years has tended to track the Treasury yield at the start of the period, as show in the LPL Chart of the Day. By that measure, the return outlook for the 10-year Treasury is just about as low as it’s ever been. As discussed in last week’s blog, Under-the-Radar Signal That Rates May Head Higher, right now the 10-year Treasury yield is not even enough to compensate for inflation, a very unusual relationship historically, but more common in recent years due to low in

Markets have come a long way since the March lows, but we believe there may be more room for stocks to run. Given the impressive economic recovery to date and improving underlying technical and fundamental conditions, we think small cap stocks in particular may have attractive growth potential. Despite election and COVID-19-related risks, we see further gains ahead.

Not Out of The Woods, But Improving

The significant impact of COVID-19 on the US economy has created unprecedented levels of uncertainty for investors, with a heated election as the cherry on top for 2020. Investors have had a lot to digest since markets bottome

Index Performance

S&P 500 Index:  0.2%

Dow Jones Industrial Average:  0.1%

Nasdaq Composite:  0.8%

US and International Equities

Markets generally finished higher this week, the third straight weekly gain for the S&P 500 Index and capped off by a strong retail sales report that helped give stocks a boost on Friday. Gains came despite ongoing investor concerns related to an increase in COVID-19 cases in the United States—and even more so in Europe—as well as Washington, DC, gridlock on the stimulus front. Large cap growth topped its value counterpart while technology bested all sect

The 10-year Treasury yield has stayed in a narrow range since April 2020, helped by a supportive Federal Reserve and ongoing concerns about the COVID-19 pandemic. As shown in LPL’s Chart of the Day, the 10-year Treasury yield actually is sitting below inflation right now as measured by the Consumer Price Index (CPI) excluding food and energy. A negative real yield (a yield lower than inflation) was once rare, occurring periodically in the 1970s and early ‘80s due to high inflation, but since the start of 2011 the 10-year Treasury real yield has been negative almost 40% of the time.

“Negative real rates may be an