a 23,000 increase in Jobless claims,( most likely the normal seasonal worker layoff) is no "clear signal" of anything in country of 300,000 million people. This is a clear example of too many "chiefs" however. We need to "lay off" some of these self important government departments.
LLS
Why izzit that bad news for the economy is good for bond markets and vice versa?.................
“Foreign investors are snapping up the world’s safest debt.”
But, but...oh, never mind.
Let’s see, bond are good as safety, but don’t offer good returns compared to stocks, especially those with dividends. Forward P/Es are low, even with the lower guidance coming out, that’s good for stock valuations. Lower rates cut business costs, and even the 10-year bond is dropping now, lowering fixed mortgage rates. The dollar is firming even as lower rates are baked into the cake. By spring, the write-offs from the banks will be out and quatified. The Euro is too high, and becoming deflationary. Pressure is mounting on European rates, if they lower, their markets will be stronger.
The question is not whether to be in stocks, the question is allocating between US and world markets for optimum returns. I should add that I have a long-term investment horizon (10 years).
The subprime losses are discounts, not 100% writeoffs.