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- Rates Rising But Still Low 🤷🏻
Rates Rising But Still Low 🤷🏻
Did you know that the highest interest rate ever recorded was in Brazil in 1990, reaching a staggering 294%?
Did you know that the highest interest rate ever recorded was in Brazil in 1990, reaching a staggering 294%?
This extreme rate highlights the severity of Brazil's economic crisis during that period, while also highlighting the fact that our current situation is nowhere near as bad as that.
In today’s edition of Equity Eats, we’ll be discussing the following topics:
Interest Rates Are Still Below The Historical Norm: First, despite recent hikes, current interest rates are still significantly lower than the historical average over the past 60 years 📉
Corporate Bond Spreads Are Tight Relative To History: Next, corporate credit is currently priced for perfection, with historically slim yield spreads 📊
Technical Analysis Points To Gains: Finally, the Dow Jones Industrials index shows positive momentum with its 200-day moving average on the rise 📈
Stay tuned as we explore these topics in detail, giving you the insights you need to cash in on the market!

Interest Rates Are Still Below The Historical Norm 📉
Over the past 10 years, the benchmark 10-year Treasury yield averaged 2.36%.
Currently, it hovers around 4.50%, appreciably higher than the experience of the past decade.
But it remains significantly lower than the average of 5.93% over the past 60 years 👎

Corporate Bond Spreads Are Tight Relative To History 📊
Corporate credit, both investment-grade and high-yield, are “priced for perfection,” with historically slim yield spreads above government paper to compensate for their risk.
That’s been the result of heavy demand from households for corporates in search of extra yield.
This has led to investors demand for private credit, where there is an “illiquidity premium” in terms of higher yields for investors that can commit long-term capital to smaller but good-quality borrowers 📝

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Technical Analysis Points To Gains 📈
The Dow Jones Industrials index’s 200-day moving average has risen since the end of October.
This means that even though prices have risen, traders keep piling in when the market dips, sending the average of daily prices higher.
The recent technical momentum and fundamental strengths, including earnings and interest rates, suggest further near-term gains 🤑

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