Are slightly higher US interest rates really all that bad?
Even as they tick up a bit, they are bouncing from such a low bottom, that its hardly alarming. (In Thailand the offical interest rate even dropped a notch further of late, even while the Banks did not follow). Interest rates are creeping up a bit in the US because the economy is showing some strenght, at least based on official figures and more then in the very lethargic past. Stronger economic activity there (primarily consumer and housing for now) increases company profits as the economy is well, stronger. Stronger corporate profits on increased econmic activity increases share prices -more so then a slight increase in % rates to a certain point. Also bonds go into a bear market now as bonds are very interest rate sensitive and don't benefit from higher profits, as these just pay their stated interest coupons. There is far more money in bonds then stocks, so where will all the huge capital from selling bonds go to? Gold, Oil, commodities ?...little for now it seems. Mega sums, far more then stocks, are in the world bond markets.