Fed Chair Yellen says stock market prices 'quite high'

Yahoo Finance ^ | 6 May 15 | Martin Crutsinger

[xzins]

Federal Reserve Chair Janet Yellen on Wednesday described stock market valuations as high and said the central bank was carefully monitoring their impact on financial stability.

"I would highlight that equity market valuations at this point generally are quite high," Yellen said in conversation with Christine Lagarde, managing director of the International Monetary Fund, at an economics conference.

Coupled with weak economic reports in the morning, her remarks drove stocks broadly lower in Wednesday trading.

Yellen added, however, that the overall risks to financial stability are "moderated, not elevated" and she does not see the hallmarks of any bubbles.

She cited one reason stock prices were high: the meager returns on safer investments such as bonds because of low interest rates.

"But there are potential dangers there," Yellen said.

The very low level for short-term and long-term interest rates represented a risk because rates can move rapidly, she explained.

Banking regulators are remaining "watchful" for any areas where further reforms may be needed, she said. Yellen cited the need to address the problem of "too big to fail" — the perception among investors that some institutions are so large that the government will step in and save them if they get into trouble.

The Fed and other regulators are taking steps to ensure that the collapse of even very large banking institutions can be handled in ways that don't jeopardize the stability of the entire system.

[sergeantdave]

“Federal Reserve Chair Janet Yellen on Wednesday described stock market valuations as high and said the central bank was carefully monitoring their impact on financial stability.”

Well, then stop manipulating the markets, you stupid 50 IQ ape.

[peyton randolph]

“people shift their money into interest bearing accounts.”

****

The new global trend is negative interest rate policy (NIRP), i.e. being charged by banks for the privilege of letting them loan your fiat money to others and taking being treated like a drug dealer if you want to take out more than $1,000 in cash at a time.

[VerySadAmerican]

To all the intelligent freepers who know about finance. Where would you invest $10,000 if you wanted it to make something but still be safe and easy to get to if you needed it for some reason.

[Almondjoy]

that would price stocks way below their averages. If that is true it would be panic and not normal valuations.

[Fightin Whitey]

Nobody seems to be answering.

Maybe because there is no good answer.

You can park it in a savings certificate etc., and be (for now) close to certain that it will be available anytime.

But as to making a return AND being safe and available...I don’t know of anything.

[MadMax, the Grinning Reaper]

What the hell did Yellen say? In English, please. I’ll waive simultaneous translation.

[Sequoyah101]

Sure sounds like an orchestration of that doesn’t it?

Gosh, you would think she wanted it to collapse if you didn’t know better wouldn’t you? /sarcasm off now.

Obunghole wants to create chaos and dependency on the government. He wants to create a call for government controls.

[SkyPilot]

About 12 years ago, another Freeper (who I believe was a financial adviser) took great issue with me about my belief that the world would someday adopt a single currency and that the U.S. dollar would collapse. He tore into me angrily, telling me what a moron I was, and how it would never,ever happen. I based my belief in what the Bible teaches, and according to Revelation 13, we will have a single world currency.

[SkyPilot]

There really isn’t any one good answer. And whatever we trust in (cash, gold, weapons, etc) are the very things the jack boot thugs will come after or make illegal to own. I am putting all my trust in Jesus, and I pray He takes me out of this world before the time of testing and tribulation hits this world.

[L,TOWM]

Look for something that has gotten its @$$ kicked over the last couple of years and is below its mean 5 year moving average price. Like Oil. There are some bargains out there in oil companies and oil services companies.

First rule — Buy Low. You can do that by researching industrial sectors and commodities that have gotten mauled over the last few months or years.

[LukeL]

I think 50% would be the best case scenario. You have to ask yourself, outside of a couple of tech stocks like Google and Apple where has there been major growth in the economy since 2008?

[NautiNurse]

How bad are P/E ratios at this time?

Depends on what the meaning of bad is...

3D Systems = 208.18
Facebook = 75.83
Alibaba = 44.13
Amazon = Negative earnings
Adobe Systems = 130.67
Citrix = 48.41
Netflix = 145.97

p.s. the above are not share prices.

[Tolerance Sucks Rocks]

Fed Chair Yellen says stock market prices 'quite high'

PING!

[napscoordinator]

I can’t wait for the fall. Yes I am giving monthly but I have way too much in my savings that could be working in the stock market but it is too high right now. It needs to fall about 25 percent and then get working again.

[VerySadAmerican]

I’ve thought about CDs or savings bonds.

[gleeaikin]

My market playing friend likes a natural gas ETF. Unfortunately, he bought at the top of the double bottom upswing, but it is still a lot lower than it was last year. He is being philosophical about it and says he believes that by 7 years he will double his money.

[gleeaikin]

You are quoting the new economy ratios. I was interested in the broad economy ratios and old standbys—Exxon, Coca Cola, GE, GM, etc.

[1rudeboy]

To what end? To increase clamoring for QE to continue?

Quantitative easing ended in 3Q 2014. Little known fact.

[xzins]

I thought they just cut back on amount of purchases

[ecomcon]

...so we don't have a major financial system meltdown.

In other words, we will have a financial system meltdown.