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Question Why doesn't the Fed wait until after market hours?
Old 07-31-2019, 02:25 PM   #1
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Question Why doesn't the Fed wait until after market hours?

I know they don't have to, but obviously their announcements move our stock market.

I would think it would be an improvement for them to wait until the market closes before making their announcement. Then the market would have overnight or over a weekend to digest the news.

Maybe a gap down (or gap up) on opening is worse than treading water most of the day and then a sharp decline?
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Old 07-31-2019, 02:53 PM   #2
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You think too logically. That would be the smart thing to do.
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Old 07-31-2019, 02:56 PM   #3
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1) Make an announcement at 2PM
2) Market craters
3) Buy low in last 2 hours
4) Market digests and goes up overnight
5) Profit!!

Don't fight it, make it work for you.
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Old 07-31-2019, 03:06 PM   #4
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I thought the market was hoping for a rate cut?
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Old 07-31-2019, 03:08 PM   #5
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I thought the market was hoping for a rate cut?


Already baked in.
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Old 07-31-2019, 03:09 PM   #6
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They got their cut but futures discounting 2 more cuts this year.

Fed comments less dovish than expected.

Que sera.
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Old 07-31-2019, 03:43 PM   #7
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Originally Posted by SecondCor521 View Post
I know they don't have to, but obviously their announcements move our stock market.

I would think it would be an improvement for them to wait until the market closes before making their announcement. Then the market would have overnight or over a weekend to digest the news.

Maybe a gap down (or gap up) on opening is worse than treading water most of the day and then a sharp decline?
That is a great question! I would hope the Feds aren't using that to their personal advantage from the knowledge they have beforehand.
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Old 07-31-2019, 04:06 PM   #8
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Originally Posted by SecondCor521 View Post
I know they don't have to, but obviously their announcements move our stock market.

I would think it would be an improvement for them to wait until the market closes before making their announcement. Then the market would have overnight or over a weekend to digest the news.

Maybe a gap down (or gap up) on opening is worse than treading water most of the day and then a sharp decline?
Then only the futures trader's would get in on the fun! Sept 19 contract is already trading at 2970 in the first 5 mins!
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Old 07-31-2019, 04:51 PM   #9
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They are bankers. 9-5. After the announcement, they take a coffee break and start thinking about going home. Just like the rest of us.
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Old 08-01-2019, 02:51 PM   #10
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That is a great question! I would hope the Feds aren't using that to their personal advantage from the knowledge they have beforehand.
That would be highly, highly illegal. AFAIK, they are barred from owning stocks in general.
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Old 08-02-2019, 03:34 PM   #11
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Historically, the Feds always announce during market hours. The 0.25% Rate cut was suppose to be a Gift to Wall st, but the greedy Wall st. peeps wanted a 0.50% Rate cut. And they wanted to be assured for several future rate cuts. Hard to satisfy the big money folks.
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Old 08-02-2019, 03:41 PM   #12
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1) Make an announcement at 2PM
2) Market craters
3) Buy low in last 2 hours
4) Market digests and goes up overnight
5) Profit!!

Don't fight it, make it work for you.
Whoops! It didn't happen this time. Sorry.

In all fairness I've thought the same many times. However it all comes back to only cashing in when all time highs are realized. The older I get the simpler the plan.
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Old 08-02-2019, 04:04 PM   #13
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Whoops! It didn't happen this time. Sorry.

In all fairness I've thought the same many times. However it all comes back to only cashing in when all time highs are realized. The older I get the simpler the plan.
The market actually went up the following day after the Fed announcement like +280 points on the Dow.

Then, the $300 Billion China Tariff bombshell got announced in the afternoon. This is a separate event. Without the tariff bombshell, it would have gone up.
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Old 08-02-2019, 04:29 PM   #14
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+1

Yes, the market recovered the next day, then the additional tariff got dropped on it like an H-bomb. Pandemonium ensued.
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Old 08-03-2019, 08:18 AM   #15
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Well, we all know S&P will rally next week, we just do not know what new's event will be given the credit!
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Old 08-03-2019, 10:06 AM   #16
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As long as the market recovering next week, it does not matter who/what gets the credit as long as it recovers.

About the decline of the market in the last two trading days, it happened during trading hours, immediately after said events. When you clap your hands and the birds scatter, you have to believe that there's a cause/effect factor.
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Old 08-03-2019, 10:59 AM   #17
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That is a great question! I would hope the Feds aren't using that to their personal advantage from the knowledge they have beforehand.
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That would be highly, highly illegal. AFAIK, they are barred from owning stocks in general.
I am not sure, but think that as long as they own equities indirectly through a custodian such as a mutual fund or an investment firm that they have no communications with, that would be fine. I recall that Greenspan owned only Treasuries, but bonds are also affected by the Fed committee decisions.

What asset is not affected by the Fed, from home prices to bonds to equities and gold, even cash?

Out of curiosity, I found the following Web page on code of ethics for the NY Reserve Bank employees:

https://www.newyorkfed.org/aboutthef...-interest.html
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Old 08-03-2019, 01:37 PM   #18
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As long as the market recovering next week, it does not matter who/what gets the credit as long as it recovers.
I agree and laugh all the time when Bob Pasani from CNBC come on and explains the reason the market is moving the way that day. Yes, there may be a macro reason some days, but most of the time I think he reaches down and pulls a reason out of his hat (or worse)!
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Old 08-03-2019, 01:44 PM   #19
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As long as the market recovering next week, it does not matter who/what gets the credit as long as it recovers.

About the decline of the market in the last two trading days, it happened during trading hours, immediately after said events. When you clap your hands and the birds scatter, you have to believe that there's a cause/effect factor.
Except that there are always clapping hands (or tweeting fingers as the case may be). Sometimes the market goes up. Sometimes the market goes down. So it goes...
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Old 08-03-2019, 02:28 PM   #20
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Nephew is an investment banker for a big-name firm. All his savings are in a blind trust.

He had a co-worker short a stock in a not-so-sneaky way and was caught, fired and sent to jail for 17 years in an incredibly short amount of time. The net profit on the short was $160K. Beyond stupid.

Point being, the direct market makers are easy to monitor.
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