James Mackintosh
speaker
379 appearances
7 recordings
1 series
first heard Nov 2017
last heard Nov 2024
James Mackintosh’s voice in public audio — every appearance, attributed to the second.
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Appearances
They're searching for safety.
They're not ready to panic.
And of course, even stocks that don't look like bonds benefit from lower bond yields.
Companies can borrow more cheaply.
The future expectations of interest rates are lower, so they expect to be able to borrow more cheaply in future too.
And of course, people expect less inflation in the future, so future profits are worth more in today's money because they won't be eroded by inflation.
So all of those things help to hold up stocks.
But still, the sense of just total exceptionality that's going on in the bond market hasn't carried over into stocks.
And that's what's sort of forming this puzzle.
Well, this is one of the questions.
So have people panicked and bought gold and bonds, or have they just quite rationally said, look, we're expecting a slower economy, lower inflation?
lower interest rates.
All of that will be good for corporate profits.
The lower interest rates will help to offset the impact on the lower profits.
We don't really expect a profit collapse.
Gold does well because we expect lower interest rates, and that means that the zero yield on gold is less bad than it usually is.
Plus, of course, much of the rest of the world is also buying gold because they do face much more serious trouble, including what looks like a plausible case that Germany is heading into recession, for example.
So if you're feeling bullish, and again, this says, well, things really aren't that bad, right?
Junk bonds, you would expect if there's a recession coming, junk bonds would get trashed.
No one wants to hold the worst quality companies if profits are about to collapse, if there's going to be a recession, because the bond might not pay you back, right?
Showing 161–180 of 379 · page 9 of 19
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