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Inter-market analysis theory says that all financial markets are linked in that they respond to conditions in the broad economic environment. This means: Treasury bonds

Inter-market analysis theory says that all financial markets are linked in that they respond to conditions in the broad economic environment. This means:

  1. Treasury bonds pricing is dependent on changes in GDP
  2. Bonds can outperform stocks in the economic cycle because they increase in value when interest rates increase
  3. Stocks can outperform bonds in the economic cycle during periods of mild deflationary pressure
  4. Interest-rate dependent stocks (such as financials) are negatively correlated to bond movements

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