The US benchmark stock market has been performing well since the end of October. The S&P 500 index has gained around +15% since then (in a very short period of time), more than twice the average over a whole year!

This is despite relatively high interest rates. Until recently, the opinion was widespread that these high rates would lead to a recession and crash the stock market.

But quite the opposite has happened. The US economy is running smoothly and the US stock market is close to its all-time highs. How could this happen?

Interest rates in the US have already dropped significantly. Let’s look at not the US policy rates, but the market rates, which are indirectly affected by these policy rates. More precisely, the interest rates for US government bonds with a ten-year term. Something decisive has just happened here.

These market rates have recently come down from the much-discussed level of just under 5%. And they could still fall much further in the near future, probably to the area of 3% or lower.

Lower rates are likely to continue. The important and often accurate trend-following indicator MACD on a weekly basis is now clearly set to „sell“. And it shows a strong divergent development (no longer confirms the recent high rate).

Such a technical constellation is often the starting point of major corrections – this time in the interest rate market! We should therefore see significantly falling (market) rates over the months.

The rate rally is over – the rates will continue to fall significantly! Source: stockcharts.com

This is the best news for your stocks! This, however, is wonderful news for the US stock market. Lower interest rates mean better financing conditions for companies, which in turn lead to higher profits, which in turn justify higher stock prices. Interest rates and stocks often move in opposite directions. It’s that simple.

And that means for you quite clearly: now you absolutely have to have US stocks!