Day-to-day trading doesn’t matter. If interest rates go up, stocks will go down. That is the reality of investing.
Closed up 567 points today....
“Day-to-day trading doesn’t matter. If interest rates go up, stocks will go down. That is the reality of investing.”
As the old (invariably wrong) statement goes, “This time it’s different.”
What makes it different this time is that the greatest consumer of the easy money that was generated over the past decade and more was the United States Government. Our on-the-books indebtedness is $20T. We have been able to carry that debt, so far, because we have borrowed at historically low interest rates. A doubling of rates (quite conceivable since we start from such a low basis, will swamp the rest of the Federal budget. The government is boxed in and cannot operate if it has to pay higher interest rates.
If government borrowing and (especially) repayments were curtailed or interrupted due to rising rates, who can say what would happen to stocks?