Dow Futures -1041 after Fed cut to zero .. 0 rate priced in

[cyber888]

Bloodbath as investors already priced in 0 rate. Hmm

 

[Elbata]

Hey Cyber, I'm not too smart with the Fed and stuff. Could you explain your comment please?

Though I did just learn today what is the "Dow Futures". From my understanding, one can buy this future instument, or whatever it's called and somehow make money. So, I'm guessing, if one thinks the DOW is going to go down or up and it does what one buys, then one makes money. Is that correct?

And what is the bloodbath for investors with a 0 rate? Thank you.

 

[UnrealizedPotential]

Since the 0 {zero} interest rate does indeed seem to be priced in the stock market, I would hate to think how far down we would be if the Fed didn't cut or a cut wasn't imminent. Or am I missing something?

 

[Jerry1]

I used to get nervous looking at the futures (when they’re down), but currently there is so much volatility throughout the day that I’m not sure how much it means. Seems enough to know that times are crazy and the market is reflecting the craziness. Some may be able to do something meaningful but I’m just going to hold on and see where I land.

 

[pn3069]

Stock Market is panicking right now - any "assistance" given to them (such as the Fed dropping interest rates on a Sunday) is seen as a sign of weakness.

Weak hands will sell tomorrow and more likely we will see significant drop in the stock & bond market tomorrow - the correct action we all need to take is "DO NOTHING".

Panic begets panic.. let us not panic. The world is not ending...

 

[teejayevans]

Stock Market is panicking right now - any "assistance" given to them (such as the Fed dropping interest rates on a Sunday) is seen as a sign of weakness.

Panic begets panic.. let us not panic. The world is not ending...

Unfortunately the Fed, who is supposedly the experts, the ones with a steady hand on the wheel...are basically screaming “we’re all going to die!”.

 

[pn3069]

Unfortunately the Fed, who is supposedly the experts, the ones with a steady hand on the wheel...are basically screaming “we’re all going to die!”.

I am not sure I read what you are saying into the actions of the Fed.

 

[jim584672]

Three / four weeks ago the Fed was saying "steady as she goes". Then a cut and now this. Doesn't inspire confidence that such drastic actions are needed. They may have just spooked the markets.

 

[pn3069]

Three / four weeks ago the Fed was saying "steady as she goes". Then a cut and now this. Doesn't inspire confidence that such drastic actions are needed. They may have just spooked the markets.

Three/four weeks ago we were at all time market highs, now we are in a bear market - things changed fast. FOMC is the only buyer of last resort for market securities (currently MBS and Treasuries) but I wouldn't be surprised if their mandate would include stocks as well soon.

 

[COcheesehead]

Can the government own private corporations?

 

[pn3069]

Can the government own private corporations?

Japanese central bank has been buying equities for decades.. not unprecedented.

 

[Fermion]

Can the government own private corporations?

Didn't they own GM for a bit?

 

[Lsbcal]

Are the futures markets really good at predicting tomorrow’s close? Or are they just an ephemeral whiff of fear?

 

[COcheesehead]

Didn't they own GM for a bit?

Owned or bailed out? Not sure. You might be right.

 

[COcheesehead]

Are the futures markets really good at predicting tomorrow’s close? Or are they just an ephemeral whiff of fear?

The levels matter, but the direction is also important. A negative, but ascending value is different than a negative descending or flat level. They are only good at predicting the open.

 

[COcheesehead]

Japanese central bank has been buying equities for decades.. not unprecedented.

I meant our government.

 

[Fermion]

Owned or bailed out? Not sure. You might be right.

I think they owned shares and sold the last of them in 2013:

https://www.usatoday.com/story/money/cars/2013/12/09/government-treasury-gm-general-motors-tarp-bailout-exit-sale/3925515/

 

[pn3069]

I meant our government.

FOMC could own anything their mandate allows them to - so far it only includes MBS and Treasuries. Japanese central bank could own equities and they do.

 

[COcheesehead]

I think they owned shares and sold the last of them in 2013:

https://www.usatoday.com/story/money/cars/2013/12/09/government-treasury-gm-general-motors-tarp-bailout-exit-sale/3925515/

Well there you go.

 

[Lsbcal]

The levels matter, but the direction is also important. A negative, but ascending value is different than a negative descending or flat level. They are only good at predicting the open.

OK, I guess I should ignore that them then because I am really only interested in the month end close as the shortest term trend pricing point .

 

[Running_Man]

40% of companies listed lost money last year, FED is going to have to do some real buying to hold the market up, Nobel theory of random walk demands it!! Perhaps the FED could institute negative dividends as a means to pay for the program.

 

[Fermion]

40% of companies listed lost money last year, FED is going to have to do some real buying to hold the market up, Nobel theory of random walk demands it!! Perhaps the FED could institute negative dividends as a means to pay for the program.

Was it 40% of companies by market cap or just 40% of the total number of companies? I know the S&P500 was getting very heavily weighted in tech, which was kind of rolling in the money in 2019.

 

[Running_Man]

Was it 40% of companies by market cap or just 40% of the total number of companies? I know the S&P500 was getting very heavily weighted in tech, which was kind of rolling in the money in 2019.

https://www.nysscpa.org/news/publications/the-trusted-professional/article/money-losing-companies-now-comprise-40-percent-of-market-but-investors-seem-unfazed-011020

 

[pb4uski]

Can the government own private corporations?

The government owned preferred shares of all the major banks and AIG in 2008.

 

[Fermion]

I guess it is 40% by market cap, I was unable to find that in the article. It is a pretty shocking number but how does it compare to, say, 1999 or other years?