Growing Corporate Profits, Shortage of Quality Assets: Jamaica
The better the corporate profits, the better the markets. In the U.S. corporate profits have been improving year over year continuously for more than a decade. Besides the anomalies, of course. Every year the query has come up, are we in a “bubble” and “when is this bubble going to bust.” The thing is, if corporate profits are strong, and growing annually, and/or upward trending, then stock markets will do well. The Dow Jones Industrial Average (US: DOW J) is evidence of that. Moving 10 years ago, from just below 13,000 points to this week hoovering around 34,000/ 35,000 points. If profits are stellar and growing, the index and the overall indices will make Mr. Market $$$.
They call interest rates the silent creeper and the soul killer… especially if you are a business owner, and have some leverage or took on some leverage, for a variety of reasons. You could have made an honest business mistake, a bad business judgement, over-extended your business, decided to go into a non-productive asset, a distressed matter occurred, a super charged growth capital opportunity presented itself or some of all the above.
Lots of Earnings this season! Let’s get into it!
Bank of Jamaica, hikes Main Benchmark rate by 1.5%
Well, effective February 21, 2022 (Monday), we kick-off the week with 4.0%, a 3.5% or + 350 bps change for fixed income paper or bond junkies. What a difference a little bit of time makes, and the ensuing, patty, gas, toll, groceries, etc. prices have made, also known as inflation.
The U.S. Fed, Rates Hikes & Interest Rates
.S. President Biden took office on January 20, 2021. He approaches his 1-year anniversary of his 4-year term within a week of today. The Biden team has been making its move at the Fed with the November 2021, re-nomination of Jerome Powell to a 2nd term as Fed Chair.