If it wasn’t already clear – it is now. Interest rates are going sharply higher and for longer. Powell’s 8-minute Jackson Hole speech was carefully scripted – using words like “pain” to prepare the market for what lies ahead.
"Interest Rates / Bonds"
Don’t Fight the Fed
Marty Zweig’s 1970 book “Winning on Wall Street” popularized the term “don’t fight the fed”. Today we have an environment where: (a) liquidity is contracting; and (b) rates are tightening. That’s not conducive for higher prices.
Markets Big Bet on a Dovish Fed
The S&P 500 is pushing into an area of clear technical resistance. What’s more – fundamentally it’s no longer cheap at approx 18.5x forward earnings. My thinking is the market is not an attractive risk/reward bet at these levels… and are under-appreciating the task in front of the Fed.
It’s All About Bond Yields
The market is currently being led by one thing: what we see with bond yields.
For a full list of posts from 2017…