In the wee hours this morning, Dow futures indicated the market would be up about 150 points. After the release of the latest inflation data, the futures dropped to negative 350 points -- a swing of 500 points.
That's ridiculous!
Like I said in my last article for Inside Business, inflation is breaking out. Paul Volcker was chairman of the Fed from 1979 to 1987, and he demonstrated that high interest rates will curb inflation. Lesson learned! Expectations for Fed interest rate hikes for this year increased from 3 to 4 -- big deal!!
Increasing interest rates will decrease corporate profits somewhat but not as much as the corporate tax cut increased profits. Earnings-per-share will be largely unaffected. Stocks will slowly recover from this news.
The most predictable characteristic of the stock market is that it will faithfully OVER-REACT!
That's ridiculous!
Like I said in my last article for Inside Business, inflation is breaking out. Paul Volcker was chairman of the Fed from 1979 to 1987, and he demonstrated that high interest rates will curb inflation. Lesson learned! Expectations for Fed interest rate hikes for this year increased from 3 to 4 -- big deal!!
Increasing interest rates will decrease corporate profits somewhat but not as much as the corporate tax cut increased profits. Earnings-per-share will be largely unaffected. Stocks will slowly recover from this news.
The most predictable characteristic of the stock market is that it will faithfully OVER-REACT!
