2017-12-11 08:42:00 Mon ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Fed Chair Janet Yellen says the current high stock market valuation does not mean overvaluation. A stock market quick fire sale would pose minimal risk to the economy and the macroprudential system. During her final Federal Reserve press conference, Yellen says the prime metrics such as the forward aggregate stock market P/E and P/B ratios are on the high end of historical ranges when the Fed warns that asset prices appear to be high. In fact, the low-interest-rate economic environment is supportive of higher stock prices and home prices. In this context, there is a reasonable balance of financial risks that manifest in the form of less worrisome levels of both bank leverage and private credit growth.
A recent Project Syndicate op-ed article sketches the key reasons for U.S. stock market rational exuberance such as better economic growth with low inflation, monetary and fiscal stimulus, full employment, and higher net income in both the household and corporate sectors. As the world economy skyrockets on all cylinders in America, Europe, and China with robust economic growth since the global financial crisis of 2008-2009, U.S. inflation remains below the 2% target, unemployment is less than 5%, and monetary policy normalization continues at a moderate pace. Federal Reserve shrinks its balance sheet post-QE, finishes the full course of 3 interest rate hikes in 2017, and then expects another around of 3 to 4 rate increases in 2018. The current 7-year uptick in U.S. corporate net income typically precedes the European and Asian counterparts in subsequent episodes. All of these reasons help justify the current Trump stock market rally as rational exuberance and optimism.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2019-02-02 11:36:00 Saturday ET

The Trump administration teams up with western allies to bar HuaWei and other Chinese tech firms from building the 5G high-speed infrastructure due to natio
2017-02-25 06:44:00 Saturday ET

As the White House economic director, Gary Cohn suggests that the Trump administration will tackle tax cuts after the administration *repeals and replaces*
2017-12-01 06:30:00 Friday ET

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence, smart data analysis, and robotic automation. With prior IT careers at Apple, M
2019-09-07 17:37:00 Saturday ET

Federal Reserve Chair Jerome Powell announces the monetary policy decision to lower the federal funds rate by a quarter point to 2%-2.25%. This interest rat
2018-03-11 08:27:00 Sunday ET

At 89 years old, Hong Kong billionaire Li Ka-Shing announces his retirement in March 2018. With a personal net worth of $35 billion, Li has an incredible ra
2018-06-29 11:41:00 Friday ET

Amazon acquires an Internet pharmacy PillPack in order to better compete with Walgreens Boots Alliance, CVS Health, Rite Aid, and many other drug distributo