The purpose of creating this Topic about Dow Jones,Oil and KLCI markets discussion.Anyone can share your view .Please do respect and do not attack each other in this group. Treat everyone here as Family.
Our main objective is to make money and not make enemy.
For chart reference you may visit my page at
https://www.facebook.com/pages/Gila-Saham/536182926525672
actually depend tonite DJ status how....if marginal drop then klci tomorrow might be rebound...if drop shit then klci 99...but as we shot on long when klci lowest point should be safe now.
hehe different side now simon based on TA side i based on Timming kiki but guys FED member tuesday will have a talk i believe they will support interest rise based on jobless result its too strong
Sifu region... please correct me if im wrong as im not making a statement but attempting a simple analysis...where i see theres a lot of selling off of ifca... me personally not holding it.. just that sifu simon has posted sthg so i try to tune myself into "so called" analyzing it...
Stronger employment = the sooner the Fed raises rates = higher bond rates = lower valuation for stocks.
Is it truly that simple? No it's a bit more complicated than that. Let me break it down for you.
Yes, the Fed is now more likely to start raising rates this year. This should be considered as a merit badge for the US economy that it has rebounded well enough to not need so much accommodation. In fact, the stock market typically keeps rising for 2-3 years after the Fed starts raising rates.
Bond investors took notice and pushed up US 10 year Treasury rates from 2.11% to 2.24% Friday. That is a BIG one day move in the bond world. However, how much higher will bond rates go with Europe on the QE bandwagon where German 10 year rates are at 0.4% and sub-prime nations like Italy and Spain are both around 1.3%?
The spread between the US and Germany is much wider than historic norms. And most CERTAINLY rates for Italy and Spain should not be lower than the US given their anemic economic status. As such, I expect demand to markedly increase for US Treasuries. This should keep rates in check and would be surprised to see them venture that far north of 2.5% this year (which was the average in 2014).
To sum up, I am not fearful of a Fed rate hike as that is typically good for stocks given that it means the economy is in good shape and stocks stay on the uptick for 2-3 years after. And I believe that worldwide government bond competition will lead more investors to US Treasuries to keep a lid on rates and thus continue to make stocks look attractive by comparison. Remember that rates moved up to 3% in 2013 and yet still the S&P rose 32% on the year.
My view of the investment world may not have been the same one adopted by other investors on Friday. Yet when level heads prevail I think that more people will come around to this same understanding. As such, I believe that this is a buyable dip with higher highs on the way this year.
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Posted by simon84 > 2015-01-03 09:40 | Report Abuse
The purpose of creating this Topic about Dow Jones,Oil and KLCI markets discussion.Anyone can share your view .Please do respect and do not attack each other in this group. Treat everyone here as Family. Our main objective is to make money and not make enemy. For chart reference you may visit my page at https://www.facebook.com/pages/Gila-Saham/536182926525672