Posted on 10/11/2022 7:58:43 AM PDT by Tell It Right
The S&P 500 fell more than 1% to its lowest level since November 2020 early in the session but regained some losses to trade down 0.59%, hurt by weaker tech stocks such as Meta Platforms, whose high valuations are sensitive to rising rates. The Nasdaq slipped 1.5%, hitting a fresh 52-week low, weighed down by tech and semiconductor stocks. The Dow Jones Industrial Average rose 61 points or 0.21%, uplifted by jumps in Amgen and Walgreens Boots Alliance.
(Excerpt) Read more at cnbc.com ...
Carmen Reinicke is cute.
Bouncing back from the brink, at the moment.
Although September is statistically the worst month for stocks, it has been my observation that the most acute downswings are from mid-Sept to mid-Oct, which is where we are.
Hopefully, the prospect of a split government (GOP capturing one or preferably both the House and Senate) will put a floor under the market, and the Fed will see some sign of inflation reduction, because if they overshoot, the recession will likely be severe.
The Fed cannot control inflation until the interest rate is above the inflation rate.
They have a long way to go to get there....
We are talking years, not months.
Can someone smarter than me explain why big tech stocks are suffering because of interest rates over 1%? If they are so valued, why don’t earnings provide them with capital? Why do they need free money to thrive?
It’s called time value of money. The valuation of a company is based upon present and future earnings. Future earnings are discounted based upon the interest rate. The higher the rate, the less valued the future earnings, the lower the value of the company and the lower the stock price.
Well if I’m investing in a company that needs free money to thrive, I’m going to pass.
We are so screwed.
Not necessarily. I went 100% into cash and very short duration bonds last march. I’m in late 70s and need bonds that pay well. I’ll be buying bonds in December.
Yeah, she could use some weight training.
I like fit girls. Cute face though.
Stock market DOWN
TN UPPPPP
No Final 4 for Nicky
If the interest rate were 10%, the interest on the federal debt would be $3.1 trillion per year.
That would put a big hole in federal receipts of $4.0 trillion.
Much of the interest paid on federal debt leaves the country and goes to foreigners who own US debt.
If the interest rate were 5%, the interest on the federal debt would be $1.65 trillion per year.
Peanuts. /s
“If the interest rate were 10%, the interest on the federal debt would be $3.1 trillion per year.
That would put a big hole in federal receipts of $4.0 trillion.”
Yup—you just looked behind the curtain—and this is why major inflation may be with us for years and years and years....
The higher the 10 year, the higher the discount rate, the higher the discount rate, the lower the valuation. Look up the CAPM model for a high level overview. Ps large caps have held up better
Yep, they think that 4% Treasury is a good thing? With 25% Inflation?
Still More #ComDem_Insanity!
For years 10 year T bill has been the 30 year mortgage rate yet the the rate is 3% higher. How does this work?
You are right.
How long until we see these?:
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.