Industrial average rose 65 points to 17,500. Nasdaq jumped 57, and the s p 500 was up 12. For the week, the dow was the outlier. Down fractionally and posting its fourweek losing streak since 2014, its first one. Nasdaq did just the opposite, snapping its own fourweek losing streak and scoring the biggest weekly index gains. And the s p 500 broke its own skid, up after three weeks of losses. All in all, it was an eventful week, chock a block with reminders for investors as we turn toward summer. Reminder number one. The fed matters, and it may raise Interest Rates this summer. The minutes from the april meeting released wednesday all but said so. Not a promise, but lots of hints. And it wasnt just hints in the minutes. It was fedspeak. Listen to bill dudley of the new york fed. The economy looks like its growing above trend and inflation is stabling, the labor market is tightening. All that chatter caused fed fund futures to bet on federal bank policy to spike. They now price in a 30 c
Being against a rate hike and accepting its not inevitability are two very different things. We need to understand the difference. While you may not like it, you need to start accepting it. First, he get that we cant have ultralow rates forever, even if theyre good for the stock market for the duration. Eventually too much money chases too few goods and we get inflation. Inflation is pernicious. There are reasons weve never had ultralow rates forever. It has to do with the inevitable debasement of our money and dramatic decline in our purchasing power. The fed has two mandates, promote an environment for an flourishing economy, and the second to avoid inflation so people cant keep up with the rising price of goods. I certainly am not in favor of turbo charged inflation. However i am concerned that the first mandate might be upended by higher rates. Right now, after that barn burner of an employment number last friday, its difficult to fret over job losses. Ive been worried about the pr
By higher rates. Right now, after that barn burner of anmployment number last friday, its difficult to fret over job losses. Ive been worried about the precariousness of our trading partners like china. But china is back in bull market mode, even if the strength is in consumers and not industrialrelated. The data out of europe is pretty strong, that i follow. We know a lot of the strength comes from weaker euro. Companies that sell in europe rows are taking share from american competitors. Thats decidedly bad. But to worry about china or europe, that seems wrong. Thererwill be negative reverberations in emerging rkets. Thats a given. Theres always people caught up in that old trade. Thats one reason im not crazy about a rate hike. Them every day for weeks on end. Most important, i believe the causing the exports of our dramatically versus overseas competitors. Well have playoffs as manufacturers cant keep up, as we open borders versus every other country. They seem to be offset right n
Turbo charged inflation. However i am concerned that the first mandate might be upended by higher rates. Right now, after that barn burner of an employment number last friday, its difficult to fret over job losses. Ive been worried about the precariousness of our trading partners like china. But china is back in bull market mode, even if the strength is in consumers and not industrialrelated. The data out of europe is pretty strong, that i follow. We know a lot of the strength comes from weaker euro. Companies that sell in europe rows are taking share from american competitors. Thats decidedly bad. But to worry about china or europe, that seems wrong. There will be negative reverberations in emerging markets. Thats a given. Theres always people caught up about a rate hike. But these ramifications are inevitable and youll hear about them every day for weeks on end. Most important, i believe the dollar will soar on a rate hike, causing the exports of our companies to decline dramatically
We need to understand the difference. While you may not like it, you need to start accepting it. First, he get that we cant have ultralow rates forever, even if theyre good for the stock market for the duration. Eventually too much money chases too few goods and we get inflation. Inflation is pernicious. There are reasons weve never had ultralow rates forever. It has to do with the inevitable debasement of our money and dramatic decline in our purchasing power. The fed has two mandates, promote an environment for an flourishing economy, and the second to avoid inflation so people cant keep up with the rising price of goods. I certainly am not in favor of turbo charged inflation. However i am concerned that the first mandate might be upended by higher rates. Right now, after that barn burner of an employment number last friday, its difficult to fret over job losses. Ive been worried about the precariousness of our trading partners like china. But china is back in bull market mode, even