Message:
In the last Forecast for V8.2 (08/23/07 20:37 MDT) it was stated in the
comments that the 90 day T-Bill interest rate has increased since Monday and
this will have a negative impact on the broader market.
Does this statement still hold true?
Would not the increasing rate indicate that investors are moving out of
T-Bills and back into the Stock-Market, thus having a positive impact on the
Stock Market?
Regards,
Chris J
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Response:
The movement of funds from bonds to stocks is treated in the model; however,
the value of interest rates is deemed to be more important by the networks. The
most
important input term is the MSI which decreases as
interest rates increase. In general, interest rate increases are bad for stocks.
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