Inter-market analysis theory says that all financial markets are linked in that they respond to conditions in
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Inter-market analysis theory says that all financial markets are linked in that they respond to conditions in the broad economic environment. This means:
- Treasury bonds pricing is dependent on changes in GDP
- Bonds can outperform stocks in the economic cycle because they increase in value when interest rates increase
- Stocks can outperform bonds in the economic cycle during periods of mild deflationary pressure
- Interest-rate dependent stocks (such as financials) are negatively correlated to bond movements
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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