Abstracts » Business

Watching and waiting

Article Abstract:

US interest rates may be raised if data on inflation released in Mar 1997 gives cause for concern. A rise in interest rates could depress share prices in both the US and the UK. There are political pressures to keep US interest rates low but the economy may be growing so strongly that a rise in inflation is inevitable. Share prices can be affected by small rises in interest rates and a drop in share prices of 10% could occur, according to Salamon Brothers' David Shulman.

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Hands-off Fed sets up nervous time for shares

Article Abstract:

The US Federal Market Open Committee decided against raising interest rates in Sep 1996. Alan Greenspan, chairman of the Federal Reserve, hopes that inflation will be subdued due to factors such as new technology and lower economic growth rates. Some analysts are concerned about the impact of this decision on financial markets. Inflation could be a risk if economic growth is strong, while slower growth could affect corporate results and so share prices.

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US equities: July's lessons

Article Abstract:

US share prices fell in Jul 1996 and there are implications for investors, according to Salomon Brothers. There is more uncertainty about rising share prices over the long term, and there is concern that growth of stock holdings will slow as the market becomes saturated. Momentum investing without considering fundamentals has become less attractive. There is also concern over the profit margins of US firms toward the end of a business cycle.

Stock price indexes

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