“Corporate earnings rose. But behind that story lurked another sordid tale. Since the March 2009 low, nearly two-thirds of the rise in operating earnings for S&P 500 companies has come from neither higher sales nor increased productivity. Instead, it has come from lower interest expenses on corporate debt. Corporate America is a debtor. It benefits from lower interest rates, while savers lose. Second, as the so-called “risk free” return on bonds falls, future earnings streams from stocks look more attractive on a relative basis. Third, by evaporating the yields off bonds, the Fed has forced investors to ‘reach for yield’ elsewhere. An obvious place to look is stocks.”
http://www.bonnerandpartners.com/the-fed-was-right/
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