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Strategies & Market Trends : The picks
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To: steve susko who wrote (4852)2/12/1997 8:47:00 PM
From: Trader X   of 6124
 
Sorry Steve-o, rising rates are bad for the market.

But you get a + for asking.

As the short end of the curve rises, it raises fears of inflation. The long bond is lagging, but if the short end rises enough, it raises preasure on the long bond to rise, which in turn creates competition with stocks as an investment.

I believe that the short end of interests rates are rising in anticipation of the Fed raising in a few months. The Fed has been on alert for 9 months without acting...thats' the longest ever.

So it's bad news for stocks. And the market will diverge for a while, worsening the fall when it happens.

Welcome to 1987 redouble.
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