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A passing thought on stocks

The divergence between the economy and capital markets has only grown since the Coronavirus pandemic. With interest rates on bonds so low stocks seem to be the last place for reasonable growth. Amazon issued $10 billion in debt recently with an interest rate of .4%. When private companies can borrow at the same rate as the Federal Reserve, the debt market really has nowhere to go. As more capital leaves the debt market and makes a home in equities, prices will continue to rise. The rise in stocks is not necessarily rooted in optimism but in the reality of probable returns.

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