achieved something akin to nirvana in the past six months. The US bond futures 14%. Gold has gained 8%.
In the argot of traders, securities are priced for They also look poised to dichotomise. Investors banks cut interest rates. Equities are in vogue when economic growth is fast enough to bolster earnings.
Rising gold prices are usually evidence of people seeking an inflation haven. two definitions for nirvana. In Buddhism, it means the ineffable ultimate Hinduism, it signifies the extinction of all attachment .
So are markets displaying wisdom this year, or are they detached from reality? Here s a rundown of potential pitfalls. US government bonds maturing in 10 months, after losing almost 5% in the first half of the year.
The turnaround Federal Reserve to cut interest rates next year. expanded by an annualised 2.2% in Q3, down from 2.
6% in the second and 5.6% in the first three months. The Fed, meantime, is expected to trim its key lending rate by a quarter-point to 5% by mid-year, and again to 4.
75% by year-end. The US consumer, though, refuses to roll over and die. Last month, retail sales rose for the first time since July, climbing 1% to outstrip the 0.
2% gain anticipated by economists. With average earnings advancing 4.1% in the year to November and gasoline prices 20% lower in the past six months, consumers are weathering a slump in housing prices.
10-year Treasury note yield, just shy of this year s 4.8% average at 4.6% chairman Ben Bernanke reduces borrowing costs, and yields revisit or undercut government debt every year since 1999, when bonds repayable in 10 years and more lost 8.
6%.
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