No More Fed Rate Hikes in 2019…
The fundamentals are “sound”?:
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Relevant and even prescient commentary on news, politics and the economy.
The fundamentals are “sound”?:
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Why had corp equity taken such a dive?
FRED shows this in level form:
https://fred.stlouisfed.org/series/TNWBSHNO
$108 trillion as of 2018QIII but then only $104 trillion by 2018IV. A 4% drop sounds bad. A $4 trillion drop sounds deadly!
Per Daniel Becker’s question, let’s take a look at what has recently happened to the interest rates on long-term corporate debt rated BBB:
https://fred.stlouisfed.org/series/BAA
These rates used to be 4.2% but are now near 5%. Yes an increase in the cost of capital tends to lower discounted cash flows.