Interest Rates and the Stock Market
Interest rates have two important effects on the stock market:
1) they affect overall economic growth
2) they affect price-to-earnings ratios.
Charting out these relationships is useful for understanding market trends. Consumer spending drives corporate profits and, ultimately, affects the stock market. Because interest rates affect consumer spending, they can also affect the market.
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Ahead of the Curve will arm you with the knowledge you need to deflect useless theories and reject hype. Economic analysis can be a do-it-yourself activity. Instead of tracking absolute increases and declines, the methods in this book look at changes in growth to make economic forecasts. The tools are based entirely on examining historical data for recurring patterns.
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