It's sort of like a teeter-totter; when interest rates go down, prices go up.
Sentiment: NEGATIVE
It's one of the fundamental principles of the stock market: When interest rates go up, stocks go down. And along with financial companies and cyclicals, technology companies - with their sky-high price-to-earnings multiples - should be among the biggest losers in an environment of rising rates.
The price of every thing rises and falls from time to time and place to place; and with every such change the purchasing power of money changes so far as that thing goes.
Generally, a rising trend in rates is bearish for stocks; a falling trend is bullish.
One of the reasons so many people get burned in the market is because they start buying as they see prices going up.
Like a bank run, a decline in stock prices creates its own momentum.
To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.
As you know, low demand and high supply means a drop in value of anything, including the dollar.
Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.
Prices are going up. Unemployment continues to go up. And we have not had the necessary correction for the financial bubble created by our Federal Reserve system.
Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.