Friday, September 9, 2016

The End Of Cheap And Easy Money?

Wall Street Journal: Stocks, Bonds Drop Amid Concerns About End of Easy Money

Dow industrials, S&P 500 both tumble more than 2%

* S&P 500 index drops 2.45%
* German 10-year bond yields turn positive
* 10-year Treasury yield posts highest close since Brexit vote
* Dollar gains against major currencies
* Stocks and bonds tumbled Friday, with the Dow industrials and S&P 500 posting their biggest percentage losses since the Brexit selloff.

Fresh signs that central banks could be backing away from easy-money policies helped boost the dollar, while investors sold shares of dividend payers like utilities and telecommunications companies that have been popular with income-seeking investors while rates have been low. Yields on some government bonds reached their highest levels since late June.

The Dow Jones Industrial Average fell 394.46 points, or 2.1%, to 18085.45. The S&P 500 declined 2.45%, its biggest drop since late June when a selloff followed the U.K.’s vote to leave the European Union.

The Nasdaq Composite lost 2.5%.

Trading volumes were elevated, traders said, something that typically suggests conviction in the market’s move.

Read more ....

WNU Editor: Everyone that I know who is involved in the business of money are telling me the same thing ... after the U.S. Presidential election expect US Fed rates to rise. I am not in the habit of quoting Jim Cramer .... but he is probably right (see above video). What would be the impact on rising rates .... if you owe money, you do not need an explanation from me.

1 comment:

Jay Farquharson said...

"rate rise" has been a fiscal boogeyman for a long time now.

Not gonna happen. The only thing keeping western economies afloat is "cheap money".