RealAssanova
Ethnic Vagitarian
if i remember correctly just from following the markets...interest rates --> currency --> commodities --> companies
for example:
higher US interest rates --> more demand for USD from treasury purchasers --> appreciation of USD ---> pricier for companies to by Oil from American companies --> Less demand for Oil ---> Oil price tumbles ---> US Oil & Gas firms seeing less foreigner revenue ---> stock price goes down accordingly all things else being equal
oversimplified of cours...but its the other way around...that interest rates affect commodities. It always starts with interest rates particularly in the US. I actually kinda learned that during an I-Banking interview with RBC. The reason is that US Treasuries are seen as the safe haven for investments given their liquidity and safety. If all else fails...people dump all their holdings and purchase US Treasuries for a steady return. The reason stocks have been flying is beacuse the interest rates have been so low in the US since the financial crisis. Thats why if you pay attention to the Fed minutes/meetings...any statements that make it seem like the raising of interest rates will be postponed even a little means will lead to stocks flying. It never fails...look at the news regarding yesterday and youll probably see something regarding it because stocks swung hard midday.
it's also why the USD has flown up (our CAD is TRASH right now)...because the market is anticipating rising rates and thus more demand for the USD.
you see this is what i mean fam.
there is a disconnect in my knowledge and i need to fill in the gaps.
i can't wait for exams to finish...so i can spend my summers reading and learning, while not under pressure. I feel like when i'm in school, i just study for the sake of passing and getting a good grade. There is the odd time though where i enjoy reading what i have to study and that stuff tends to stick around in my head longer. But i also feel when i'm less pressured, i retain more.