Quote:
Originally Posted by 2000cs
They can operate, but their future returns (and they typically have none currently) are discounted at a higher rate, reflecting the higher interest rate expectations. Higher discount rate = lower valuation. Adjustment ensues.
Technical trading is just a part of it; my view is there tends to be an overshoot to bad or good news in the first day, often followed by a partial recovery. Used to be called a “dead cat bounce”
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Can you answer this question. Would you rather have a hot economy with the risk of inflation or an economy cooling down?