The central bank is an institution that manages a nation’s currency, money supply and interest rates. The central bank also oversees a nation’s banking system and is the lender of last resort in a time of crisis. The central bank is normally a separate body from the political establishment. The central bank’s goal is to create stability and low inflation in the system.
On Sunday, May 10, the People’s Bank of China (PBOC) announced that it will lower its one-year benchmark lending rate by 25 basis points to 5.1%. They also cut the one-year deposit rate by the same amount to 2.25%. This is the third interest rate cut by China’s central bank in six months.Markets in Asia welcomed the expansionary monetary. Read More
Irrationality prevails in global stock markets and I believe it’s because of the actions of central banks. What’s happening with central banks and their involvement with equity markets not only is unprecedented, but it also will not end well.Japanese Stock Market Topping 20,000Just look at the chart below of the Tokyo Nikkei Average—a. Read More
With the Federal Reserve green-lighting the stock market’s recent advance, it’s a reminder that equities continue to be guided by central bankers and not economic reality.Fed’s Accommodative Actions Guarantee Return for Stock Investors?But this is how it always is in a secondary market (stocks). Share prices reflect the. Read More
The “trade” these days is very simple. Just follow what the central banks around the world say and you are pretty much guaranteed to make money. As long as they announce they are printing more paper money or lowering interest rates, then just buy stocks. This requires no thinking whatsoever and the fundamentals, like economic data. Read More
In terms of stock market direction, the Dow Jones Transportation Average recently pushed through to another new record-high. The index retrenched along with the broader market in early October, but it fought back hard to just over 8,800.Within the index, countless stocks have been doing well. Alaska Air Group, Inc. (ALK) slumped to. Read More