By Matthew Kerkhoff

Low interest rates have been the bane of savers, retirees, pensioners and many others for a number of years now. With interest rates on the verge of rising, these folks are starting to breathe a sigh of relief.

But rising interest rates are a double edged sword, and are unlikely to provide as much benefit as many people expect. To understand why, we need to look at why interest rates are rising, and also understand their potentially negative side effects.

Richard's Comments

The piece I wrote on truth seems to have set off a storm of letters. Obviously, a lot of my subscribers are interested in the truth and the reason for telling (or avoiding) the truth. So I want to write a bit more on truth (which happens to be one of my favorite subjects).

I think it's not only morally right to stick with the truth, I believe it's necessary for your health to stay with the truth. I previously wrote that there is a close relationship between untruth (lies) and insanity. For just as a lie is a distortion of reality, a disease is a distortion of the physical.

By Benjamin J. Butler

Hong Kong Special Administrative Region, China

I quite like this chart I found today, which tries to capture the level of policy uncertainty. You can find the details at www.policyuncertainty.com. But according to their website:

Each national EPU index reflects the relative frequency of own-country newspaper articles that contain a trio of terms pertaining to the economy (E), policy (P) and uncertainty (U). In other words, each monthly national EPU index value is proportional to the share of own-country newspaper articles that discuss economic policy uncertainty in that month.

Stock prices were lower in Europe today, on lower oil prices.  The STOXX 600 was down 0.8%, but less than Pacific/Asian shares, which were down 1.3%.  US stocks followed suit, with the Dow down almost 100 points early in the day.  

But then came the rally that moved the Industrials into positive territory, where they traded for most of the session.

By Jon S. Strebler

Among other news on Friday was the disturbing revelation that companies such as Amazon, Twitter, Netflix, and Spotify had been hit by “waves of cyber attacks” earlier in the day, followed by further attacks throughout the day. The US Department of Homeland Security was unaware of who was responsible for the attacks at the time, but it doesn’t take a lot of imagination to create a list of suspects. And we may well know the winner by the time you read this. 

By Matthew Kerkhoff

Over the past five quarters, corporate profits have been shrinking, but the stock market remains near all-time highs. This divergence can’t persist forever, and will eventually break one way or the other. The question is, which way will things go?

At the moment, it appears that earnings could be reversing course, which would provide a very helpful tailwind for equity prices.