Tag Archive: interest rates

The Ultimate Safe Haven

The markets have seen increasing volatility in recent weeks as rates move higher and as stocks decline. Recent market volatility could, however, be just a drop in the bucket of what could be seen as the New Year gets underway. Investors have numerous issues to contend with and a great deal of uncertainty about what the Fed may or may not do with monetary policy. The potential for an ongoing trade war with China, the ongoing issues in U.S. politics, Brexit and more could all... Continue Reading

Don’t Fight the Fed, but Don’t Ignore It Either

There is an old saying that says “Don’t fight the Fed.” This saying is typically directed at stock market bears that remain bearish equities even as the central bank lowers rates or maintains ultra-low levels of rates that encourage risk taking. The phrase happens to make a great deal of sense, as the Fed is essentially the most powerful financial institution that there is. The Fed has the power to control the money supply, and to “create” new money out of thin air. If the... Continue Reading

Who Cares if the Fed is Hawkish?

The gold market is up again today, and appears to now be in consolidation mode following strong gains last week. Some sideways price action this week should not only come as no surprise, but should also be viewed as healthy. The bulls may simply be gearing up for the next major push higher. Recent price action in gold has certainly been constructive. The market has covered almost $50 per ounce in upside, and could just be getting started. The recent rally and improving technical posture... Continue Reading

Strength Despite Strength

The gold market has been showing some important signs of strength in recent action. The market has moved sharply higher in a short period of time, and is hovering around a 10 week high. Overall sentiment around the gold market seems to be improving and the market is also now on more sound technical footing. Of particular note today is the fact that gold is higher again despite stocks being sharply higher as well. Stocks are not just slightly higher, either. As of this post,... Continue Reading

Time to Buckle Up

The past week has seen an enormous increase in stock market volatility. In just two sessions, the Dow Jones Industrial Average shed nearly 1400 points, and the NASDAQ officially entered correction territory on Thursday. The sharp and rapid rise in interest rates has been pinned as the primary culprit for the sell-off, and things could be just getting started. Although stocks are sharply higher in early trade on Friday, the rally being seen could simply be more of a relief rally than anything else. The... Continue Reading

Not So Fast…

The sharp rise in bond yields has been the topic of much discussion over the last week, and yields have a lot of room to run even higher. The movement in the bond market has not gone unnoticed by equity investors, and stocks saw some significant selling last week as a result. To be clear, it is not necessarily the rise in yields that has investors upset. Rather than focusing on a specific level in rates, investors are likely far more concerned with the speed... Continue Reading

Watch the Yield Curve

Investors and global financial markets have done a fantastic job of remaining optimistic despite numerous potential headwinds. Ongoing tensions over global trade, higher oil prices and rising interest rates are just a few of the major issues that markets are contending with. There is something else happening behind the scenes, however, that could point to major troubles ahead. The flattening of the yield curve is becoming more and more a cause for concern, and the idea of the curve becoming inverted is a distinct possibility.... Continue Reading

The Fed May be the Biggest Risk to the Stock Market

The stock market has a number of issues to contend with currently if it is to keep moving higher and continue the bull market that began nearly a decade ago. Geopolitical risks-including a potential trade war and even armed conflicts in more than one location-are weighing on market sentiment. Of all of the current risks the stock market may face, however, the biggest potential threat to the equities market could be the Fed. The central bank has already begun to take steps to normalize monetary... Continue Reading

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Why Paper Money Fails

There’s nothing like the feel of cold, hard cash in your hands. Holding a wad of bills may provide a sense of empowerment, as you feel the texture and weight of the money in your hands. For a moment now, however, try to take a different view. Imagine that in your hands is not money, or cash, but rather a stack of IOUs or promises. Doesn’t have quite the same ring to it now does it? The fact is, paper money is exactly that: IOUs... Continue Reading

A Double Whammy of Rising Inflation and a Falling Dollar

Investors could potentially be in for a rough ride in 2018, as several key market dynamics are changing. The Fed has been slow to raise rates further-and with good reason- as inflation for some time lagged well-below the central bank’s desired target of 2% annually. The central bank seems to be thinking a bit differently at this point, however, as some key indicators of inflationary pressure have been ticking higher in recent months. The central bank has penciled in three rate hikes this year, but... Continue Reading