Category Archives: Blitzer’s Insights

IMF Cuts US Growth Forecast, Market Reacts

The IMF released its latest forecast of US economic growth and US economic policy this afternoon, sending the S&P 500 and the Dow into negative territory.  While the market response is likely to be forgotten by next Monday, the IMF’s comments are worth consideration.  The forecast sees 1.9% real GDP growth in 2013,  2.7% in 2014 Read more […]

Looking Back When Interest Rates Rose

With all the discussion about what might happen were interest rates to rise, it is worth looking at what has happened before. In 1994 the Fed tightened policy and interest rates rose faster and higher than investors expected.  The chart shows the yield on ten year treasury notes — the same instrument everyone is talking Read more […]

Stocks and Fed Fears

Only a month ago the market was in love with the Fed and Ben Bernanke was a hero for helping the market move from 1350 in November to about 1670 in May.  Now the central bank is a villain as the yield on 10 year treasuries tops 2%. Interest rates have risen in the last Read more […]

Thinking About P/E Ratios

The chart below is  a scatter diagram comparing the P/E ratio to the price return on the S&P 500 over the next ten years.  P/E is defined as each month’s level of the S&P 500 divided by the earnings per share on the 500 over the trailing 12 months. Both the P/E and the index Read more […]

Bubbles, Corrections, the Fed and Summer Heat

There is a growing debate among economists, journalist and bloggers over whether the Fed’s QE3 is creating a bubble in the stock market. (See Krugman, Gillian Tett or Felix Salmon among others) fueled by the market’s gains since the start of the year and the usual worries that disaster will strike during the summer break at the Read more […]