The question you want to ask yourself this weekend, lies not with lofty stock price valuations, but rather with a simple basic understanding of the underlying cost of money.
With a resurgent economy in 2019, combined with the lowest unemployment in decades, and highest consumer confidence numbers ever recorded ..then why are long term interest rates collapsing in 2019 ?
You would think that there might be a hint of inflation building in the financial system with long term interest rates, going out 10/30 years in duration rising, if economic prospects on the horizon were seen as strong,and bright.
However, as the 10 year chart on TNX shows here, long term interest rates are collapsing, just this past week breaking down chart support again with long term rates down over 33 % in the past year !
Conventional wisdom had been for long term rates to rise above 4 %.
Now a year later, the question is whether a 2 % floor, or bottom in rates a number that the Fed holds as the magic number on inflation, will hold them from collapsing even further.
It is no wonder then,that the wildly optimistic market projections about future economic growth and expansion , are now being widely and dare say rudely questioned.
Just look at a chart of the Dow Transportation Average, to note the collapsing economy up close and personal.
And to top it off,..get this.
One of the largest and most influential banks in the world Chase Bank just issued a forecast this past week calling for just... 1 %... 2nd quarter GDP growth in the US
So while you are outside enjoying the back yard barbecue in the true holiday spirit of reflection and enjoyment, ask yourself just one financial question this weekend.
What ..do big financial institutions, who manage trillions of interest rate dollars everyday, know about the underlying health of the US economy ....that you don't know ?