Confluence of Positives – Earnings: FTS, EMA, NPI, AQN, BEP
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Markets are off to a strong start for 2018, anticipating favourable 2017 year end earnings reports and a predictable path for interest rates.
It is taking the US central bank forever to raise rates, with good reason, if history since the mid 1970's is taken into account. The exceptionally slow pace of rate increases provides time for companies to adjust.
Making it even easier to adjust is cheap energy, exponential improvements to technology, and some big tax cuts in the US that should all work to more than offset the rate increases. Comments this week recap the periods of rate increases under the tenure of 3 different central bankers to make it apparent why gradual works best. This gives time for companies to adjust operations so dividends can keep growing. It also helps to have cheap energy, better technology and tax cuts along the way.
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