Posted by babble on 29/July/2003 at 22:22:
In Reply to: cheers - its nice having meaningful discussions on here once again nm posted by Dundoe on 29/July/2003 at 22:13:
: : will "feel" it - and the mortgage rate has risen by about a percent or so from the lows.
: : US treasuries have popped up to 4.4% (10yr) and 5.3% (30yr) - basically highest rates since August 02, but not particularly high historically.
: : Mortgages will be approx 100bps higher for mortgagees.
: : One area where I think Freddy does have a point is that these yields are increasing pretty quickly and if the trend continues I will get worried.
: : http://finance.yahoo.com/q?s=^TNX&d=c&k=c1&a=v&p=s&t=1y&l=on&z=m&q=l
: : http://quote.bloomberg.com/apps/news?pid=10000087&sid=abJgj87Q613M&refer=top_world_news
: : I think its disturbing that with low consumer confidence numbers today, treasuries didn't recover.
: : But I remain to be convinced that this is more than a blip...
: : If it is more than a blip, and continues people with floating rate mortgages are in for a bit of an unpleasent surprise.
: : --------------
: : : look, lets forget all the bull and bear comments. I've learned I can be wrong and change my mind when I think I am.
: : : But looking at rising interest rates on mortgages, would the yanks really 'feel' it?
: : : 18 months ago we had interest rates far higher and we had a falling stock market. Yanks are exposed more than anyone else to the stock market. So if a percentage point or higher 18 months ago never hurt them in a falling market, would it really hurt them in a rising stock market?
: : : I'm also hearing that the market is getting carried away. But with earnings increasing (whether its through cost cutting or whatever) quite strongly why is the market getting ahead of itself?
: : : If you look at the Dow it has risen 1.5% since June 3 - in two months it has risen 1.5%.
: : : Why isn't that sustainable if earnings are growing faster?
: : : Okay, its not gang busters but its probably the more sensible sort of rise that markets should have and it is eroding the size of the PE on the Dow.
: : : In the two months from June 3 the S&P hasn't risen at all.
: : : The Nasdaq has risen 7% in that time but the Nasdaq seems to have a mind of its own - it rises fastest, it falls fastest - that's what people pay for in these high growth do or die techs.
: : : When I look at it like that I see stockmarkets moving up slowly and interest rates rising from lows we haven't seen for 50 years - so I'm not convinced it isn't sustainable - but open to persuasion.
: : : D
Warning
Share prices can go down as well as up. Users of the Information Exchange should seek professional advice before entering into any dealing in securities as a result of references on the Information Exchange. Past achievement is not necessarily a guide to future performance.