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Stocks actually would like it if bond yields went up

CNBC's Jim Cramer on Wednesday warned stock investors to pay attention to the possible recession signal coming from the bond market "I have learned to fight the bond market even when it's wrong," Cramer said on "Squawk on the street, "adding that" nobody is willing to ever say, "the bond market is wrong." " Cramer acknowledged the US economy appears to be slowing down, but feels there is not enough evidence to point to a recession, which is technically defined as two straight quarters of contraction in the economy. "If interest rates would just go, it's amazing I have to say this , if interest rates would go up a little the [stock] market would like it, "Cramer said." I can't recall in my career rooting for higher interest rates. That's nuts. " The Dow Jones Industrial Average Fewer than 300 points on Wednesday, tracking closely the decline in yields, which investors took as a message from the bond market that was slowing down in the economy was ahead. As US-China trade fears continue to intensify against the backdrop of some economic data, investors this month have been seeking safety and buying Treasuries, sending government debt prices and yields to multiyear lows. Bond prices and yields move inversely to one another. The decline in yields has been more precipitous on longer term bonds, pushing the 1 0-year Treasury rate below that of the 3-month government note. That so-called yield curve inversion on the 10-year and the 3-month – widening to…

CNBC’s Jim Cramer on Wednesday warned stock investors to pay attention to the possible recession signal coming from the bond market

“I have learned to fight the bond market even when it’s wrong,” Cramer said on “Squawk on the street, “adding that” nobody is willing to ever say, “the bond market is wrong.” “

Cramer acknowledged the US economy appears to be slowing down, but feels there is not enough evidence to point to a recession, which is technically defined as two straight quarters of contraction in the economy.

“If interest rates would just go, it’s amazing I have to say this , if interest rates would go up a little the [stock] market would like it, “Cramer said.” I can’t recall in my career rooting for higher interest rates. That’s nuts. “

The Dow Jones Industrial Average Fewer than 300 points on Wednesday, tracking closely the decline in yields, which investors took as a message from the bond market that was slowing down in the economy was ahead.

As US-China trade fears continue to intensify against the backdrop of some economic data, investors this month have been seeking safety and buying Treasuries, sending government debt prices and yields to multiyear lows. Bond prices and yields move inversely to one another. The decline in yields has been more precipitous on longer term bonds, pushing the 1

0-year Treasury rate below that of the 3-month government note.

That so-called yield curve inversion on the 10-year and the 3-month – widening to spreads not since the 2008 financial crisis – has been viewed on Wall Street as a sign of a recession on the horizon.

The stock market has been following Treasury yields lower, and as of Tuesday’s close the S&P 500 was off almost 5% for the month of May. The index opened sharply lower on Wednesday, with no resolution in sight to the trade and technology disputes between the U.S. and China, which have two billions and billions of dollars worth of sanctions on each others’ goods.

– CNBC’s Jessica Bursztynsky contributed to this report.

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