The spectre of defaltion
Article Abstract:
Deflation could affect the US economy, where growth is estimated as stagnant for 2nd qtr 1998. Weak growth could affect profits, with prices dropping more rapidly than wages. Deflation will mean a reduction in bond yields and this should help stock prices. Earnings can perform well over the longer term during periods of deflation. Deflation could change the volatility of of stock and bond returns, with stock returns becoming more volatile and the reverse occuring for bond returns, which could make bonds more attractive.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
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Article Abstract:
Wall Street has been dominated by large firms which have outperformed the market. These are some parallels between the Top 20 US stocks of the 1990s and the stocks called the Nifty 50 in the 1970s. The Nifty Fifty stocks underperformed from 1973 to 1980, but Goldman Sachs does not see the same thing happening to the Top 20. The Top 20 benefit from better fundamentals than the nifties in 1972, and they offer a better average return on equity than the nifties did.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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