|
|
The chart below contains weekly values for the S&P 500, 12-month trailing operating earnings on the S&P 500, and the yield on the
long Treasury Bond. These
data series are included in the Weekly Long-Term Financial Market Database (1927-present)
and the Weekly Financial Market Database (1950-present).
Note that earnings bottomed in early 1992 (approximately one year after the 1st quarter 1991 recession
end) and showed tremendous growth through 1995.
Earnings declined sharply throughout 2001 and continued
to show signs of weakness through the middle of 2002. The most recent
recession officially ended in November 2001, and earnings began to recover
(approximately one year later) in late 2002.
Some recent articles on modeling the link between interest rates and stock
prices can be found in several issues of Stocks and Commodities:
Snead, Mark C. "Combining
Technical and Fundamental Analysis," Stocks
and Commodities, 1999, vol. 17 no. 9, pp. 62-67.
Snead, Mark C. "Interest Rates and Stock Returns," Stocks and
Commodities, 1995, vol. 13 no. 7, pp. 65-70.
Snead, Mark C. "Extremes Analysis Of Interest Rates and Stock
Returns," Stocks and Commodities, 1994, vol. 12 no. 11, pp. 13-22.
Snead, Mark C. "How Interest Rates Affect Stock Prices," Stocks
and Commodities, 1991, vol. 9 no. 7, pp. 26-29.
|
|
All Products