This week a meeting of the Fed on Monetary Policy was held. After him, Jerome Powell spoke with a performance, on which nothing new did not say:
Raising rates will not soon
QE folding is not yet, as will be in the plans, immediately warn
Most analysts expected that, due to the high rates of inflation, members of the Fed will perform with more rigid rhetoric and at least report specific dates about the collapse of the quantitative mitigation program.
Therefore, the preservation of the «sluggish» rhetoric as a whole remains a positive for the markets until the next meeting on the DCT, which is scheduled for September 22. However, confidence maintains that there will be no action on it on a key rate, but it is likely to be called specific quantity of QE.
Low rates and QE for markets, as for fire oil. At the same time, even folding QE does not mean that the fuel will be blocked. Yes, some part of it will go away, but the zero rates will continue to support the markets.
Access to companies to cheap money allows you to use large credit shoulders without damage to shareholder income, which makes it possible to increase the indicators, and accordingly, the stock price is growing.
However, high lover of individual companies is a powder barrel.
At the same time, in those businesses that are already experiencing difficulties with debt service are very likely bankruptcy. Professional participants understand this and will get rid of such companies in advance, which will lead to the fall of their quotations. Therefore, it is worth checking the portfolio for the presence of highlightening companies and think about reducing the position in them until the end of 2021.
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