Michael Wursthorn
speaker
1,567 appearances
29 recordings
1 series
first heard Jul 2017
last heard Nov 2021
Michael Wursthorn’s voice in public audio — every appearance, attributed to the second.
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Appearances
You know, the market is nervous that the Fed would sort of blindly raise interest rates all throughout next year, so much so that you could cause the economy to just sort of overheat
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and suddenly slowed down.
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And that's what's contributing to these bigger fears of a possible recession in 2019.
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Now, even though Fed Chairman Jerome Powell had made clear that we're only going to do two rate hikes next year, that was still enough to spook the markets into thinking that the Fed is sort of on this linear trajectory with their interest rate hikes.
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That's what's contributing to these diverging views if you talk to, say, an average investor, somebody in the Fed, and say even a company executive.
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The possibility of rising interest rates, what investors are realizing is that you had a decade where interest rates were near zero.
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You had a lot of debt and it was easy to take on.
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It was basically free money for a lot of companies and a lot of people.
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Now that they're confronting these higher interest rates and they don't really know where they're going to stop, they're realizing their cost of servicing that debt is going to go up dramatically.
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in those months ahead.
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And that's why you've seen, say, in the case of small capitalization companies, I mean, they were already in a bear market earlier in the week.
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And a big part of that is because they just tend to carry more debt than their bigger company counterparts.
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Investors are expecting the last week of the year to either continue a lot of what we've seen where stocks are continuing to fall or just to grind sideways but not really be able to move a lot higher.
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You've seen through today a lot of, say, big money managers.
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finalize a lot of their trading just ahead of the holiday.
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So that's what's going to contribute to the slowdown in activity next week.
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And when you have that kind of slowdown, when there's an expectation that trading deaths are going to be thinly populated throughout the market, there's always an effect where you don't need a lot of trading to happen then throughout that day if it's low volumes to really move the indexes sharply.
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And you kind of saw this the Thanksgiving week back in November where
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where major indexes were moving quite a bit in the days leading up into and after the Thanksgiving holiday there as well.
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So there's similar expectations for that.
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Showing 821–840 of 1,567 · page 42 of 79
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