Stock market analysis: Why a strong economy is bad news for equities

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Why the resilient US economy is making it difficult for stock investors to thrive

in January, a higher-for-longer approach for interest rates looks increasingly likely.

But here's the catch: while a humming economy foreshadows more Fed hawkishness, that strength could save the US from a severe recession. Two recent data points stand out when probing for answers about the state of the US economy. The first is January's monster jobs report.The second is consumer health, reflected in January's retail sales and consumer spending data, both of which exceeded estimates.

Either way, the stock market doesn't seem to care. All investors can see is higher rates, which inflict the double whammy of eating into corporate earnings and making other investments more attractive compared to relatively high-risk equities.

 

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Someone explain why these types of investors are a good thing? It's so weird to read a piece saying that the economic recovery is a really bad thing for some. Seems really gross, frankly, to have a position that makes tons of money when everything is on fire for everyone else.

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