Normalization Phase Winding Down–Earnings: AW, PBH, CGX, GEI, MRT
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US and Canadian central banks have been on the same policy track since late 2013. If they are not raising interest rates, they are talking about it. They make no mention of how high rates need to go, or estimates of how long it will take. The level of interest rates is integral to the stock valuations.
Determining the future value of a sum of money depends on the rate of earnings and the length of time the money is able to earn this rate. This is the numerical expression for measuring and comparing rates of return on investments. One key number in the math formula is interest rates. Variances in interest rates change the final value. The length of time is the other part of the equation. When markets don't know the length of time it will take interest rates to rise and how much the increase will be, share prices fall to compensate.
Since the early 1980's to late 2013, central banks dropped interest rates, either in response to a political crisis or slow economic growth, often a combination of both.
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