If you’re encumbered by a slew of higher interest rate plays, you might need to switch your policy–post Yellen’s dovish speech. I suppose people didn’t believe her during her last testimony, especially following the speeches of her lieutenants. I think it’s fair to say there is a schism at the Fed, two distinct parties with varying views on monetary policy.
As markets rise to daily highs, the Dow up triple digits and the NASDAQ higher by more than 70, underneath the surface of this rally is a depraved scramble for yield.
Gold is higher, due to a seemingly easy American central bank strategy.
Gold stocks are, by far, the biggest winners of the day. The sector, as a whole, is higher by more than 5%.
Without the specter of higher rates, asset allocators are racing towards the safety of U.S. treasuries, whose yields are considerably higher than our European counterparts.
The dollar has fallen by the wayside. Yellen has mentioned the stronger dollar as something of an albatross. The currency wars are here to stay.
Utilities continue to outshine every sector in the market, year to date. With gains in excess of 16%, utilities continue to attract investors who’ve shed their books of energy related dividend payers, in favor of something a bit less toxic.
The market’s devotion to every syllable of what the Fed says never ceases to amaze me. Come tomorrow, there might be a hawkish Fed comment that shifts today’s dichotomy. But for now, it appears the market will be supported by a globalist Federal Reserve policy, one that offers succor to multi-nationals and preys upon European exporters.
At some point, actual profits and actual revenue growth will matter. For now, we can all pretend that every ailment of the economy has been remedied and lower interest rates is precisely all we need to permit XYZ to beat analyst earnings expectations.
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Run for the hills, bears! They clearly have ended any potential economic problem whatsoever, ever!
Why TLT is going up? Mr. Fly?
As he mentioned, it’s because investors need some sort of yield and US rates, although at historic lows, are more attractive than most if not at all developed countries.
Prosperity is just around the corner.
Like um, from war?