John Murphy: 'How I Analyze the Markets'

[darkmonohue]

First! This man is a national treasure.

[rsmith]

Man the analysis is all wrong .. it may have been correct in other decades but this was the first time that the Fed was actively manipulating 10 year bond yields lower through bond purchases … also investors knew the Fed was a big buyer so they jumped on that ship too, thus exacerbating the drop in bond yields … the point being that bond yields weren't dropping due to economic weakness … which is why stocks moved in opposite direction .. and with bond yields dropping precipitously it was EVEN BETTER for stocks since it made the cost of borrowing for companies super cheap, AND it made the discount rate in valuations low hence inflating NPV stock prices.