?Stock Market Crash December 2018. Why Is The Stock Market Crashing Part 2?

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How Do Record Low Interest Rates Impact Stock Market Valuations?

With Lower Interest Rates
1. Investors are able to cheaply speculate in assets (ex: cheap mortgages for property speculation and low margin costs for trading stocks)
2. Lower interest rates make it cheaper to conduct share buybacks, dividend increases, and fund mergers & acquisitions through debt
3. By discouraging the holding of cash in the bank versus speculating in riskier asset markets
4. By encouraging higher rates of inflation, which helps to support assets like stocks and real estate
5. By encouraging more borrowing by consumers, businesses, and governments

https://www.cmegroup.com/trading/inte…

Comments

Scotty G says:

Do you still feel good about FNMA and FMCC as a long shot?

Ariel Noel says:

This volatility in the markets I crazy!

Stock Market 101 - Stock Market Videos says:

The fed is getting nervous, they are thinking twice now

Toucan Sam says:

The interest rates are still historically low, people need to grow some balls and stop panicking.

BABY - Become A Better You says:

This could be a whole lot more serious than what we're all thinking. I'm hoping for $AAPL to gain at least another 5% before the year ends so I can build up my cash position and get ready for a massive down turn.

George Oommen says:

What we are seeing is a classic example of Bubble Theory. When stock market prices rise rapidly since 2016, this will cause a crash as investors move out of overvalued assets.

Maverick says:

Great, informative video. Thank you!

Hot Stock Girl says:

The Fed has caused every recession since the 1980's. Whenever they raise them too quickly, the economy stalls. Maybe they should cap it at a quarter of a point raise per year. This way corporations can have some consistency when managing their borrowing costs.

SilverTurtle65 says:

Buying opportunity now, when China trade deal gets made stocks and metals will soar. I subbed.

m. cook says:

Trump kinda forcing the feds hand. They have to hike now just so it looks like Trump not affecting there decisions. Anyway it's gonna be a bumpy ride. I'm thinking the market may be getting falsely pumped up so the institutions can move there money into something else before the market crashes. We have to keep our eyes on the yield curve. If anything I'm going with divided king stocks only for now.

Daniel Slavin says:

great video

carmelinhawaii says:

I just learned Blackrock bought a bunch of fancy resorts in Hawaii, on several islands. I believe they closed before the end of the year. Do you think they are able to lock in lower interest rates?

Sara Willis says:

This is actually one of your greatest videos. This puts into perspective the critical role interest rate manipulation by the fed impacts the stock market. Great work thank you ?

Space Documentary says:

The fed manipulated the %@$@ out of the market. It isn't really a "market" with all these algos and the fed's intervention. Just buy high quality stocks turn the screen off and you won't be disappointed!

Angel Martino says:

Interest rates aren't even close th where they should be. Interest rates and the trade wars are just noise. Buy as much as you can and hold as long as you can. Great video nonetheless. 😀

Johnny Will says:

Wow the correlation between the markets gangbuster returns and interest rates it’s insane! I had no idea man. Very insightful video thank you! These are crazy times in the stock market.

Lydia Santiago - My Investment Journey says:

At least I know you read my comments. Great professional video. I didn’t mind the video from earlier lol

Ariel Noel says:

Interest rates are without a doubt putting pressure on the stock market. Let's hope they cool off with hikes. I'm with Donald trump he thinks the fed is too aggressive with their hikes I'm thinking he may be right.

Aray Ray says:

I feel like the fed doesn’t have the room to hike rates anymore. Talk about really throwing a wrench into the bull market. They have to slow down with the hikes!

Stocks On My Mind says:

Interest rates are a huge risk factor. Incredible returns in the market over the last 10 years have definitely benefited from the low interest rate environment that is evaporating very quickly.

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