Just like 2008

[audreyh1]

I especially love the same day headlines that go something like this:

Stocks fall on Fed outlook.
Stocks rise on Fed outlook.

There are many times that the headlines make no sense at all.

 

[Free bird]

Stocks fall no idea why.
Stocks rise no idea why.

 

[Big_Hitter]

Stocks fall no idea why.
Stocks rise no idea why.

people are selling
people are buying

 

[Free bird]

People or machines? What's the difference right? Ones functioning off emotions. One is fuctioning off algos.

 

[NW-Bound]

If the market goes up, BUY, BUY, BUY.

OMG, it goes down! SELL, SELL, SELL.

 

[redduck]

S&P 500 up 18% over the last 12 months. Up <1% ytd. I think most of this is election related. Probably foreign money getting nervous. If I was on the outside looking in I'd be nervous too.

What makes you think you're not on the outside looking in?

edit to add:

https://youtu.be/jc_oLZuFwaI

 

[OldShooter]

 

[kgtest]

Funny because GDP was above plan. What do we need a 5-6% GDP before investors are happy lol.

 

[OldShooter]

... What do we need a 5-6% GDP before [-]investors[/-] traders are happy lol.

FTFY

 

[NW-Bound]

Funny because GDP was above plan. What do we need a 5-6% GDP before investors are happy lol.

Because they say that good time may not last.

 

[audreyh1]

Funny because GDP was above plan. What do we need a 5-6% GDP before investors are happy lol.

Earnings are disappointing. Apparently traders were expecting blow out numbers with the markets this high.

 

[UnrealizedPotential]

One thing I've noticed is ever since the Fed removed the word accomodative, the market has been a lot more volatile. The market fears not only higher rates but a Fed that no longer supports this market .



Add to that the uncertainty over the tariff issue, and it's not hard to see why things are the way they are. My best guess is , is that if growth slows, the Fed may be forced to back off on rate increases. But to me, it is far from clear that this is the case.


But if things continue like they have been, I can't see the bull market resuming. I hate to say it, but I think we may see more downside to this market. The Fed seems determined to continue raising rates , and the market is already feeling the pain. The market craters and then the Fed backs off, but it could take a while.


That's how I see things.

 

[audreyh1]

Actually the economy is not showing any stress yet from Fed actions.

It’s just that the traders know the wild party is coming to a close.

And now that companies are looking at 2019 and know that they won’t have that big tax cut change boost to earnings, forward guidance is a little more conservative.

 

[UnrealizedPotential]

Actually the economy is not showing any stress yet from Fed actions.

It’s just that the traders know the wild party is coming to a close.

And now that companies are looking at 2019 and know that they won’t have that big tax cut change boost to earnings, forward guidance is a little more conservative.

I agree. But you have to remember the stock market is forward looking. I'm thinking the market fears growth slows sooner rather than later because of the combination of rate hikes and effect of tariffs, even if neither one has shown any visible evidence yet. It's the fear of those I think, that's driving the downturn.

 

[Hamlet]

Funny because GDP was above plan. What do we need a 5-6% GDP before investors are happy lol.

I think the big problem is that the GDP growth is probably not sustainable. We got a bump from a massive corporate tax cut and a large increase in government spending, all of which was paid for by dramatically increasing the deficit. So we are going to be pushing trillion dollar deficits while the economy is going very strongly. That isn't going to be sustainable.

Corporate earnings are not growing all that much once you back out the tax cut. They are facing wage and supply inflation pressures and rising rates. Ultimately, I doubt that next year's earnings will show any meaningful growth over this year's. We are still at high valuations as well.

The economy is doing very well, but that doesn't translate into stocks doing well.

 

[explanade]

High GDP may reflect companies ordering forward to avoid future tariffs.

That may suggest the following quarters may have lower economic activity in comparison.

 

[VanWinkle]

I think the big problem is that the GDP growth is probably not sustainable. We got a bump from a massive corporate tax cut and a large increase in government spending, all of which was paid for by dramatically increasing the deficit. So we are going to be pushing trillion dollar deficits while the economy is going very strongly. That isn't going to be sustainable.

Corporate earnings are not growing all that much once you back out the tax cut. They are facing wage and supply inflation pressures and rising rates. Ultimately, I doubt that next year's earnings will show any meaningful growth over this year's. We are still at high valuations as well.

The economy is doing very well, but that doesn't translate into stocks doing well.

Why is this deficit spending creating 4% GDP and why didn't the last large deficit create the same? Is temporary better than nothing? I don't know the answers, just wondering.

 

[audreyh1]

I agree. But you have to remember the stock market is forward looking. I'm thinking the market fears growth slows sooner rather than later because of the combination of rate hikes and effect of tariffs, even if neither one has shown any visible evidence yet. It's the fear of those I think, that's driving the downturn.

Sure, the future doesn't look quite as bright, but it seems that until earnings season, and muted forward guidance, that traders weren't paying attention.

 

[NW-Bound]

No, investors all know and pay attention. But they want to get a little bit more of gain before selling, er, rebalancing.

And they woke up one day, and saw that some bastards were already selling. OMG!

 

[MichaelB]

Actually the economy is not showing any stress yet from Fed actions.

I think there may be one Fed action that is causing an increase in volatility in asset markets. This Fed is not signaling future intentions as carefully as prior Fed have. Investors may have become too reliant on Fed predictability, and its absence leads to greater uncertainty and volatility.

 

[Free bird]

So the rate police say no more pudding. How can you have any pudding if you don't eat your meat

 

[Free bird]

Training wheels are off. Tax cuts are gonzo.

 

[GravitySucks]

Love this thread.
So many of our members could get a slot in CBBC.

 

[NW-Bound]

Love this thread.
So many of our members could get a slot in CBBC.

You mean CNBC?

Their female reporters are young and pretty. Are our female forum members as good lookin'?

 

[GravitySucks]

You mean CNBC?

Their female reporters are young and pretty. Are our female forum members as good lookin'?

Yes CNBC
And yes, everyone posting here is in the top 10% looks -wise and top 20% brains -wise