Hello fellows,
i would like to understand the mecanism which has driven the US equities markets to the sky and will try to make a quick explanation from what i do understand at this day:
The FED has decided the keep the rates low.
The investment and speculative banks do borrow money from the FED and the ECB at a cost near of 0 and they rejinject this money on the financial markets.
The US and European companies do the same to buyback their own shares in quantity which influence other investors to buy them too at a higher price.
The bad retails trader do sell these markets and get absorbed by iceberg orders from the big hands.
Brokers do nothing to help these to understand what happens here so that many people loose money.
Will there be an end to this rally if the FED & ECB continue to supply the market with low cost money, mountains of liquidity at low cost ?
How can investors can by Amazon or Apple at these levels ? Are they .... stupid ?
It is 9 years that the SP500 did not retrace. The coming back to reality should be terribly violent if there is one..
Thanks for your kind precisions.
LS
i would like to understand the mecanism which has driven the US equities markets to the sky and will try to make a quick explanation from what i do understand at this day:
The FED has decided the keep the rates low.
The investment and speculative banks do borrow money from the FED and the ECB at a cost near of 0 and they rejinject this money on the financial markets.
The US and European companies do the same to buyback their own shares in quantity which influence other investors to buy them too at a higher price.
The bad retails trader do sell these markets and get absorbed by iceberg orders from the big hands.
Brokers do nothing to help these to understand what happens here so that many people loose money.
Will there be an end to this rally if the FED & ECB continue to supply the market with low cost money, mountains of liquidity at low cost ?
How can investors can by Amazon or Apple at these levels ? Are they .... stupid ?
It is 9 years that the SP500 did not retrace. The coming back to reality should be terribly violent if there is one..
Thanks for your kind precisions.
LS