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Dow 1962-66?



Last week, I posted a chart highlighting the Dow between 1971-74 in reference to Prof. Succo's article, "Take the Money and Run" in which he commented about the current geopolitical climate.

In terms of analyzing the conditions from an interest rate and inflationary pressure perspective, I recently bantered with a very trusted source whether or not one could also make a comparison between the current climate and 1962-66. Keep in mind, the period wasn't without geo-political stress either (Cuban missile crisis, Gulf of Tonkin incident, assassination of JFK, among others). Perhaps not apples to apples, but nonetheless food for thought...

WONDA Copyright 2004 William O'neil + Co., Inc. All rights reserved

In terms of rates - take a look at yields on the 10 year note....

We're still near historic lows...the question remains - how much flexibility does this provide the Fed / economy in terms of interest rate hikes (magnitude and timing) before an impact is felt on profits? How much of the rate outlook is already priced in? And finally, isn't it possible that earnings grow in a rising rate environment (at least for some time period)?

Looking at the Fed Funds Rate...

And finally, (issues with the CPI noted) but as one look at inflation - compare the Core CPI data...

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