Where it stands now
Where the two indicators stand this issue
Bond volatility: Now 64 basis points (annualized). World stocks: Positions of 20 national stock markets, weighted by market value 72.
Tests
Does this link hold up?
- Common explanationWhen rates swing widely, discount rates for all assets become unstable, and risky assets come under pressure togetherSource: European Central Bank, “Financial Stability Review, November 2022” (2022). It describes assets falling together as rates rose and became more volatile in 2022; it does not show that volatility by itself pushes stocks down.
- Tested against our dataAgreement between the positions of Bond volatility and World stocks (same month), measured in the direction of the common explanation: −0.15 (an opposite-direction link: the raw correlation is +0.15, and a negative correlation fits, so the sign is flipped). Looking at every 5-year period (shifted one year at a time), the two moved in that direction in 35 of 45. In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.Not visible in our data
- Periods when it did not holdAcross 45 5-year periods, out of step in 1976–1996.
History
The two lines, overlaid
Bond volatilityWorld stocks
Limits
What this card cannot tell you
- Moving together does not prove that one causes the other.
- Links change over time; periods when this one did not hold are listed in full.
- This is the historical record, not a forecast.