Bank Of America profit margins, 2014 earnings
It stands to reason that when the Fed eventually lifts interest rates, we’ll see the usual effects. After a sustained rise in rates, you can safely bet on...
Last week I looked at some of the options available to bond investors in a low rate world. I showed that subsequent returns over the next decade tend to track the current interest rate level very closely. Here’s that graph again from the Wall Street Journal: If only it were that easy. Thinking in 10 year...
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This Great Graphic was tweeted by Cigolo and retweeted by Pauly@spz_trader, which is how we saw it. The data is from Thomson Reuters Datastream. It shows US and euro area industrial production since 2002.
Dan Wantrobski at Janney Capital Markets says the long-term correlation between stocks, interest rates, and commodities shows we are now in a secular bull market for stocks. Is this possible given current valuation levels?
The FOMC has continued to "taper" the monthly amounts of its purchases of Treasury bonds and Mortgage Backed Securities (MBS), but the Federal Reserve is still pumping money into the banking system at a high rate. Purchases in June are to total $45 billion, and it goes down to $35 billion in July 2014.
Interest rates are low, so stock valuations should be high. After all, a lower discount rate means that company cash flows are worth more; hence, a higher stock price. And the higher yield offered by equities makes them more attractive than low yielding treasuries, another reason to pay up for stocks.
Read, and then re-read this study. Patrick and I chatted about this study when I was in NYC last over beers and wine…my guess was that the moonshots would have had more growth characteristics, which caused people to consistently chase them. Turns out, it looks almost random.
Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media
While it seems investors can’t get enough commentary on the eventual Fed Funds Rate increase, it seems they may already be positioning for Yellen to breath the dreadful word… “tig…
