Wednesday, July 15, 2009

Stocks, Interest Rates, Inflation -- All Higher!

I've noticed over time that there tends to be a positive correlation between the three. As confidence in stocks rise, treasuries will fall as interest rates also rise. This increases the perception that demand will increase for commodities, so inflation rises as well. In each chart, the light blue line is yesterday's price at 4 pm EST. Another positive correlation -- between stock markets and the Euro. I have no explanation for this.

Stock Market - overnightTreasuries - lower treasuries = higher interest ratesCommodities - this one is soybeans, but gold's rise was even more parabolic!
Euro