Inflation Interest rates

It's all connected. Interest rates, inflation and discount rates move together. And that affects a lot of things, including the stock market.

The market of the last decade is changing as discount rates rise. These are the companies that now stand in front of the scythe. The price people will pay to swap a dollar now for a dollar later is one of the most important concepts in finance. When Netflix starts showing you ads and/or charging more – which they’ve promised to do after their stock price fell 60 per cent – that is part of the same phenomenon. In 2022, interest rates are rising, inflation is rising, discount rates are rising. There’s a lot of companies like that right now – precisely because low discount rates made such companies popular to invest in. And that affects a lot of things, including the stock market. Of course, smart investors knew high inflation was happening, so today’s results alone do not reflect the full extent of the whack inflation has delivered to certain parts of the stock market. Basically this is what a loan is – you pay to get a dollar now. No. China is already building a lot of apartments and roads. If I offer you $1 now and ask you to pay me back $1 next year that’s a great deal and you should take it. Interest rates, inflation and discount rates move together.