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 Is Corporate Behavior Too Bubblicious in Bond Market? from CNBC: In the fourth quarter alone, companies have announced nearly $35 billion in special dividends, some of that funded by debt. Yet, many corporate debt strategists say the signs of a bubble are just not there, based on the healthiness of the borrowers’ balance sheets and the fact that there is huge appetite for the paper in a low yield environment. Strategists, however, do [...] he Reserve Bank of Australia cut its key cash interest rate again on Tuesday, in a widely-expected effort aimed at protecting the domestic economy from increasing global growth risks. The cash rate was lowered by a 0.25 percentage points to 3.5%. “The board judged that, with modest domestic growth and a weaker and more uncertain international environment, the outlook for inflation afforded scope for a more accommodative stance of [...] The S&P 500 closed at about 1,370 at the end of last week, exceeding David Kostin’s target of 1,250 for the end of 2012. Kostin, chief U.S. equity strategist at Goldman Sachs, told Bloomberg TV that he is sticking by his forecast despite the S&P’s recent run. Kostin said there were three main reasons for his call: The U.S. economy is stagnating, growing below trend. Will the lower rates preferred by the voting group’s doves eventually lead to a faster growing economy and a higher stock market? It appears to us that lower interest rates are not having their usual stimulative effect. The Fed seems to be “pushing on a string” for lack of a better term. In our opinion, the high level of personal debt is keeping many consumers from boosting their purchases in [...] |
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