-
Hello, please take a minute to check out our awesome content, contributed by the wonderful members of our community. We hope you'll add your own thoughts and opinions by making a free account!
Misc Stock Market
- Thread starter ForsythSnow
- Start date
GeorgiaGirl
Member
TNX should hit 2% by sometime early next year.
The way the bond market moves does effect equities, but it's more about speed of the move instead of where it's sitting.
There are plenty of reasons why it should be there now, or should end there to end the year, but it currently isn't there, and unless it breaks the high of the year (which perhaps could happen shortly after the November FOMC with a tapering announcement but I've heard mixed things here about its behavior during tapering cycles), personally I think it ultimately ends up ranging for the rest of the year.
The way the bond market moves does effect equities, but it's more about speed of the move instead of where it's sitting.
There are plenty of reasons why it should be there now, or should end there to end the year, but it currently isn't there, and unless it breaks the high of the year (which perhaps could happen shortly after the November FOMC with a tapering announcement but I've heard mixed things here about its behavior during tapering cycles), personally I think it ultimately ends up ranging for the rest of the year.
VegasEagle
Member
Big Banks Are Finally Recognizing that Evergrande Is Only the Beginning of the China Economic Crisis
Today big banks UBS and Barclays finally admitted that the Evergrande solvency issue is but a small part of the China economic crisis. We reported earlier this month that the China economic crisis was coming. BREAKING EXCLUSIVE: China’s Economic Crisis Has Arrived – This Will Impact the Entire...
www.thegatewaypundit.com
Jerome Powell in the hot seat after millions in trades leaked. The Fed is awesome. They care about us!
The whole entire market makes no sense, when you look at it from a fundamental point of view. It's extremely important for the market to rise, as it is the symbol of the health of our economy. The Fed has encouraged this, and people feel like they can buy these companies at any price and make lots of money. Nothing ever goes down for too long. Right now, that's the only viewpoint that matters.
Broken024
Member
Not only is it symbolic, but we have pension funds, WSB apes, 401ks, retirements, etc all invested in the market. If stonks go down for an extended period there will be huge issues. The whole system is built on never ending growth... which works till it doesn't.
Yep. And we're sacrificing long term health for short term benefit. Easy money can't continue indefinitely without causing massive problems of its own. You're starting to see those materialize now. Going to be interesting to see how they fight inflation without tightening and tapering.
Broken024
Member
Unfortunately its political suicide to fix long term issues with pain "now".
GeorgiaGirl
Member
yep…nobody is going to actually be willing to tear the band aid off and say “hey, we need to do a 5% Fed funds rate because what we’re doing makes no sense.” Because it isn’t just stocks that would be an issue there, you’d likely lose a lot of companies from doing so.
It would be a good show of capitalism to allow it to happen and start over, that I will agree with.
What Paul Volcker did in the past would be impossible today in this environment.
Problem is we’ve seen the Fed has personal motivation for market to be higher, they are all multi millionaires and have wealthy friends that are all invested. Even Pelosi is heavily invested. The market can’t and won’t fail.
Long term the piper will have to be paid. Feds balance sheet has no limit, govt keeps raising debt limit, Biden infrastructure package will pump trillions into the economy…nothing is going to change. ?
Thor
Member
So how do they solve inflation? It's obviously being pushed along by energy prices(with many other factors) Biden came into office with a very renewable energy heavy team. They apparently have reached out to oil industry experts and nobody wants to talk to them. I own a fair amount of energy stocks that I have done well on because of this, I'm just at the point of trying to figure out if the prices keep going up over the winter or does OPEC start to waiver? There has to be a tipping point in consumer spending too, you would think combined with Holiday season there's some sort of bubble here.Problem is we’ve seen the Fed has personal motivation for market to be higher, they are all multi millionaires and have wealthy friends that are all invested. Even Pelosi is heavily invested. The market can’t and won’t fail.
Long term the piper will have to be paid. Feds balance sheet has no limit, govt keeps raising debt limit, Biden infrastructure package will pump trillions into the economy…nothing is going to change. ?
Fed has said many times they won't hike rates until QE has stopped and they have targeted end of 2022. Powell's term is up in Feb or March, I don't think there is any way he continues after that. Fed is hoping inflation moderates by itself in 2022...and it may. Banks have reported solid spending/loans from consumers, which isn't surprising. I expect tech earnings to be good too. FedEx/COST/TGT all reported impact of inflation and rising costs...which will be passed onto us. The question is will rising costs impact our spending...so far it hasn't.
I've stated this many times...low rates are here to stay for a long long time.
Big problem that Fed is finally realizing is people aren't going back to work. FedEx reported not being able to hire enough people and the people they have hired they are having to pay more. That has been a theme across many companies. The question is why? Is it because they are day trading stocks, buying crypto, the fed stimulus programs have people flush with cash. Biden want to push through a multi-trillion package which means more "free" money for the economy. I think about this and then I have to stop because it's so nuts.
GeorgiaGirl
Member
My take on the Fed funds rate...the Fed would probably like to raise it slowly starting sometime late next year or in 2023 with a goal of getting it to 2.5% sometime in the distant future.
Now...
Does that fight inflation?
No.
Do I think they actually get it there?
No.
I think they do taper and start to hike, and then something happens in the middle of the latter and they stop.
Now the idea that the Fed is going to pull out of the bond market entirely is silly at this point (nobody has asked for that on here, but I've seen somebody complain that this needs to happen at another place). What's on the balance sheet is likely to stay there and be allowed to roll off when it matures. That seems to be the plan in fact considering something that I've seen (not going to try to find it).
Good situation? No, but it is what it is.
Now...
Does that fight inflation?
No.
Do I think they actually get it there?
No.
I think they do taper and start to hike, and then something happens in the middle of the latter and they stop.
Now the idea that the Fed is going to pull out of the bond market entirely is silly at this point (nobody has asked for that on here, but I've seen somebody complain that this needs to happen at another place). What's on the balance sheet is likely to stay there and be allowed to roll off when it matures. That seems to be the plan in fact considering something that I've seen (not going to try to find it).
Good situation? No, but it is what it is.
