Stock Market Discussion -- started 03/06/2018 -- updated daily !!!

[grease lightnin]

Definitely both of us.

[SportsMushroom]

Mushroom is a sharp kid. Stocks are a leading economic indicator.

But its not just trade. It’s rising interest rates and delevering of central bank balance sheets. It’s the temporary nature of the boost from tax cuts. And it’s just late in the economic cycle.

It cracks me up to hear Trumpers talk like we were in a recession all during the Obama era, and now because we have trip, we are in an expansion. Guys, the expansion is ten years old.

You can now read about these things on CNBC, but Greaser gave you all these reasons a long time ago.

this is a very important post, trump took over an economy that was doing pretty well, and claimed it was all him

indeed this has been a nearly decade long bull run breaking all records, it started during obamas second year, and ended on trumps second year, this is not a coincidence

[SportsMushroom]

Honestly Mushroom, that's just not true anymore.

The stock market and the economy are separate, no matter what they try to teach you.

The US economy is in really good shape. The good new is, nobody thinks it is.

As far as stock prices and future earnings, if only it were that easy.

It's a traders market. A gamblers market, driven by math more complex than just future earnings. Those thinking stock prices and future earning are long term and when they do trade short term, it doesn't move markets.

Don't kid yourself, the stock market is an institutionally manipulated animal independent of the economy, has been for some time now.

even if i accept your premise, it doesnt change the fact that the reason the markets are dropping is because investors see black clouds on the horizon

yes its not just the trade war as grease lightning has pointed out, its also the interest rates. but lets not forget, the reason the interest rate hikes were needed, was to stop runaway inflation, cause by trumps tax cuts

[guitarjosh]

The economy is slowing, but we're not in a recession. The ISM Manufacturing Index hit its cycle peak in August. Historically, it hits the cycle peak around an average of 3.5 years before a recession starts. The NFIB small business survey hit the cycle peak in September, and again, it hits the cycle peak around an average of 3.5 years before a recession starts.

This isn't much about the trade war, it's about the Fed hiking rates. If it was about the trade war, the small cap stocks which have performed the worst this quarter, would have performed the best, and the large caps, which have performed the best, would have performed the worst.

[guitarjosh]

yes its not just the trade war as grease lightning has pointed out, its also the interest rates. but lets not forget, the reason the interest rate hikes were needed, was to stop runaway inflation, cause by trumps tax cuts

That's absurd, the Fed was hiking rates before the tax cuts were passed, and the Fed has been saying for years they were going to hike rates to normalize.

[grease lightnin]

even if i accept your premise, it doesnt change the fact that the reason the markets are dropping is because investors see black clouds on the horizon

yes its not just the trade war as grease lightning has pointed out, its also the interest rates. but lets not forget, the reason the interest rate hikes were needed, was to stop runaway inflation, cause by trumps tax cuts

Well we haven’t had much inflation really.

Rates needed to be raised to bring monetary policy to a more neutral position.

It has been very accommodative for a long time.

At least now the Fed has some cushion. I think they would like more, they really haven’t unloaded much of the balance sheet and it looks like they will have to become accommodative sometime in the not to far off future.

[grease lightnin]

The economy is slowing, but we're not in a recession. The ISM Manufacturing Index hit its cycle peak in August. Historically, it hits the cycle peak around an average of 3.5 years before a recession starts. The NFIB small business survey hit the cycle peak in September, and again, it hits the cycle peak around an average of 3.5 years before a recession starts.

This isn't much about the trade war, it's about the Fed hiking rates. If it was about the trade war, the small cap stocks which have performed the worst this quarter, would have performed the best, and the large caps, which have performed the best, would have performed the worst.

Josh I agree that higher rates/monetary policy is the main issue, but you really don’t think trade is exacerbating the situation?

C’mon man.

[guitarjosh]

Josh I agree that higher rates/monetary policy is the main issue, but you really don’t think trade is exacerbating the situation?

C’mon man.

Sorry, I meant to put, "This isn't as much about the trade war". It is a problem if things don't get resolved and we push tariffs to 25%, but the biggest problem this quarter has been the rate hikes. The market started tanking a week after the last hike.

[grease lightnin]

Sorry, I meant to put, "This isn't as much about the trade war". It is a problem if things don't get resolved and we push tariffs to 25%, but the biggest problem this quarter has been the rate hikes. The market started tanking a week after the last hike.

Agreed.

I hear you saying 3.5 years till a recession and I hope you’re right.

But the bond market is saying otherwise. How bout the 2s/5s, 3s/5s???

[guitarjosh]

Agreed.

I hear you saying 3.5 years till a recession and I hope you’re right.

But the bond market is saying otherwise. How bout the 2s/5s, 3s/5s???

Those spreads don't have a very accurate record predicting recessions. I actually read something yesterday that the 3/5 spread has inverted over 70 times over the last 9 cycles. The more accurate spreads are the 3 month/1year/2year vs the 10 year. The 2/10 spread isn't inverted, and it can stay in this range for years, as we saw in the 90s.

[grease lightnin]

Those spreads don't have a very accurate record predicting recessions. I actually read something yesterday that the 3/5 spread has inverted over 70 times over the last 9 cycles. The more accurate spreads are the 3 month/1year/2year vs the 10 year. The 2/10 spread isn't inverted, and it can stay in this range for years, as we saw in the 90s.

Like it.

I just remember being in a conference room in 07 and there was a fat guy and a white board.

And he referenced the 2/5 being inverted and said trouble was ahead. That stuck with me.

[guitarjosh]

Like it.

I just remember being in a conference room in 07 and there was a fat guy and a white board.

And he referenced the 2/5 being inverted and said trouble was ahead. That stuck with me.

It was inverted, although the 1 month/30 year was also inverted in 07, which it's not now.

[SportsMushroom]

The economy is slowing, but we're not in a recession. The ISM Manufacturing Index hit its cycle peak in August. Historically, it hits the cycle peak around an average of 3.5 years before a recession starts. The NFIB small business survey hit the cycle peak in September, and again, it hits the cycle peak around an average of 3.5 years before a recession starts.

This isn't much about the trade war, it's about the Fed hiking rates. If it was about the trade war, the small cap stocks which have performed the worst this quarter, would have performed the best, and the large caps, which have performed the best, would have performed the worst.

only a few months ago, the economy was growing at record pace. now suddenly, economy is slowing down and economists are warning about oncoming recession

the past is not always an indicator of the future, your 'trends' dont take into account an unprecedented trade war and a madman as potus

[SportsMushroom]

That's absurd, the Fed was hiking rates before the tax cuts were passed, and the Fed has been saying for years they were going to hike rates to normalize.

and what exactly do you think normalizing rates means? it means to match them to inflation

https://www.linkedin.com/pulse/what-normalized-interest-rates-bruce-a-mandel

rates are rising because inflation is rising

[SportsMushroom]

Well we haven’t had much inflation really.

Rates needed to be raised to bring monetary policy to a more neutral position.

It has been very accommodative for a long time.

At least now the Fed has some cushion. I think they would like more, they really haven’t unloaded much of the balance sheet and it looks like they will have to become accommodative sometime in the not to far off future.

as i said above, bringing monetary policy to a neutral position means to bring it in line with the inflation rate

https://www.linkedin.com/pulse/what-normalized-interest-rates-bruce-a-mandel

also it is generally accepted that changes in interest rates take from 12 to 18 months to filter down in the economy, so any changes now are in expectation of what is to come

[guitarjosh]

only a few months ago, the economy was growing at record pace. now suddenly, economy is slowing down and economists are warning about oncoming recession

the past is not always an indicator of the future, your 'trends' dont take into account an unprecedented trade war and a madman as potus

Actually, the trends go back decades and take into account assassinations, wars, trade wars, etc. We knew about tariffs when the economy was stronger. What happened is the Fed hiked in September and sold off over $100 billion of its balance sheet in that time, which slowed things down.

and what exactly do you think normalizing rates means? it means to match them to inflation

https://www.linkedin.com/pulse/what-normalized-interest-rates-bruce-a-mandel

rates are rising because inflation is rising

Normalizing or neutral rates means rates that aren't a tailwind nor headwind for the economy. Inflation was higher under Obama but rates didn't rise because that would be too strong of a headwind.

[grease lightnin]

as i said above, bringing monetary policy to a neutral position means to bring it in line with the inflation rate

https://www.linkedin.com/pulse/what-normalized-interest-rates-bruce-a-mandel

also it is generally accepted that changes in interest rates take from 12 to 18 months to filter down in the economy, so any changes now are in expectation of what is to come

I know very well what neutral means.

And I am telling you. We have not had “runaway inflation”.

The Fed’s target for core inflation is 2%. They have been trying to meet that target for 10 years. It finally happened in the second qtr of 2018. Before that inflation last reached the Fed’s target about 5 years ago and then moved back below the target as they began to taper quantitative easing.

The Fed’s concern has been deflation, more so than inflation. Inflation is part and parcel of a healthy, growing economy. From previous conversations I have had with Josh, I think he may not agree with that last statement, but I am not sure. That may have been someone else. But either way, that opinion about inflation is more the Fed’s than mine. I am not smart enough to make a determination on that.

But neutral monetary policy, as josh said, means that the Fed’s policy is neither a headwind or a tailwind, they are neither increasing or deceasing liquidity. Neutral as in normal.

This is the main reason for raising rates, to bring things back to normal. Accommodative or “easy” monetary policy has it’s negative implications and it can’t go on forever.

And as I said earlier. Bringing rates back up also gives
them room to then bring them back down in the event we have a recession.

With that said, Hey Josh—- one interesting thing to me is that we created the financial crisis, and the entire world suffered as a result. Here in the US we have recovered very well relative to the other developed nations. And we have begun to reverse our easy monetary policy and will be in a better position to deal with the next recession. But the other central banks are still at zero interest rates and are still making asset purchases.

Do you think that was just happenstance? Or do you think somehow we deliberately positioned ourselves ahead of other nations?

[khicks26]

I know very well what neutral means.

And I am telling you. We have not had “runaway inflation”.

The Fed’s target for core inflation is 2%. They have been trying to meet that target for 10 years. It finally happened in the second qtr of 2018. Before that inflation last reached the Fed’s target about 5 years ago and then moved back below the target as they began to taper quantitative easing.

The Fed’s concern has been deflation, more so than inflation. Inflation is part and parcel of a healthy, growing economy. From previous conversations I have had with Josh, I think he may not agree with that last statement, but I am not sure. That may have been someone else. But either way, that opinion about inflation is more the Fed’s than mine. I am not smart enough to make a determination on that.

But neutral monetary policy, as josh said, means that the Fed’s policy is neither a headwind or a tailwind, they are neither increasing or deceasing liquidity. Neutral as in normal.

This is the main reason for raising rates, to bring things back to normal. Accommodative or “easy” monetary policy has it’s negative implications and it can’t go on forever.

And as I said earlier. Bringing rates back up also gives
them room to then bring them back down in the event we have a recession.

With that said, Hey Josh—- one interesting thing to me is that we created the financial crisis, and the entire world suffered as a result. Here in the US we have recovered very well relative to the other developed nations. And we have begun to reverse our easy monetary policy and will be in a better position to deal with the next recession. But the other central banks are still at zero interest rates and are still making asset purchases.

Do you think that was just happenstance? Or do you think somehow we deliberately positioned ourselves ahead of other nations?

Josh can blame the Fed all he wants. But you can,t keep rates low forever. You can't keep lending money & printing bills until another 2008 happens. Our problem is wealth divide & debt deflation.

Debtdeflation

is a theory that recessions and depressions are due to the overall level of

debt

rising in real value because of

deflation

, causing people to default on their consumer loans and mortgages.

People can't spend into the economy if their in debt up to their ass. Wages are stagnant & their jobs are going overseas. Its a system problem, not a Fed problem.

Josh is a lying POS anarcho capitalism & just plain stupid.

[brooks85]

^lol saw khicks posted and had to read. Not disappointed in the comedy of lies he always has.

Wages are not stagnant and their jobs are NOT going overseas. Liar.

[khicks26]

Brooks is dumber than Josh.

[brooks85]

^good sign for josh and I considering khicks is a proven liar. You'll get that when you watch MSM all day.

[khicks26]

^good sign for josh and I considering khicks is a proven liar. You'll get that when you watch MSM all day.

Don't clot up the thread with your BS brooks. Nobody cares.

[homie1975]

Lots of smart guys dropping knowledge but one thing u cannot account for is the emotion of the sell off and all fundamentals go out the window

[guitarjosh]

With that said, Hey Josh—- one interesting thing to me is that we created the financial crisis, and the entire world suffered as a result. Here in the US we have recovered very well relative to the other developed nations. And we have begun to reverse our easy monetary policy and will be in a better position to deal with the next recession. But the other central banks are still at zero interest rates and are still making asset purchases.

Do you think that was just happenstance? Or do you think somehow we deliberately positioned ourselves ahead of other nations?

I think it's more due to America having a freer economy, which allowed our economy to recover faster and stronger.

Josh can blame the Fed all he wants. But you can,t keep rates low forever. You can't keep lending money & printing bills until another 2008 happens. Our problem is wealth divide & debt deflation.

[/FONT][/COLOR][/LEFT]

The Fed has had rates to low since the 90s, which is one of the main causes of a wealth divide.

[homie1975]

we are in the red 3/4 of 1% already across the three main indexes. looks like another bloody start to a week, tomorrow morning............

[guitarjosh]

we are in the red 3/4 of 1% already across the three main indexes. looks like another bloody start to a week, tomorrow morning............

China trade fears. IWM is down less than .5%, everything else is down at least .74%

[homie1975]

China trade fears. IWM is down less than .5%, everything else is down at least .74%

Josh
You were one of the guys I was referring to in Post # 1563 above: "Lots of smart guys dropping knowledge but one thing u cannot account for is the emotion of the sell off and all fundamentals go out the window"

RoyBacon, Grease Lightnin, KVB, amongst others I was also referring to.............

[RoyBacon]

China is down 1%.

We get a weak open with forced margin selling for the first hour. Dow is -165. That will put us at key support. I think she closes higher.

[KVB]

What turn, was getting slammed then came back a bit.

Here are the top 20 decliners so far today with last trad over 5 and avg 5 day vol 250,000...

Symbol	Last Trade	Change	% Change	Description
TVTY	28.47	-12.14	-29.91	TIVITY HEALTH INC
FDX	194.32	-7.07	-3.51	FEDEX CORP
HDB	95.56	-4.90	-4.88	HDFC BANK LTD
PII	83.89	-4.57	-5.17	POLARIS INDUSTRIES INC
TWST	24.15	-4.40	-15.41	TWIST BIOSCIENCE CORP
SPOT	131.78	-3.53	-2.61	SPOTIFY TECHNOLOGY SA
THO	58.21	-3.51	-5.68	THOR INDUSTRIES INC
ANTM	277.12	-3.40	-1.21	ANTHEM INC
VC	64.26	-3.33	-4.93	VISTEON CORP
MGNX	13.12	-3.29	-20.05	MACROGENICS INC
LEA	124.26	-3.28	-2.57	LEAR CORP
WHR	117.19	-3.18	-2.64	WHIRLPOOL CORP
TLRY	97.14	-3.11	-3.10	TILRAY INC
GWW	286.35	-3.08	-1.06	GRAINGER (W W) INC
DLX	42.98	-2.93	-6.38	DELUXE CORP
AMP	112.90	-2.92	-2.52	AMERIPRISE FINANCIAL INC
LCII	67.96	-2.88	-4.06	LCI INDUSTRIES
ULTA	251.63	-2.84	-1.12	ULTA BEAUTY INC
CLH	54.70	-2.81	-4.89	CLEAN HARBORS INC
LOPE	111.55	-2.58	-2.26	GRAND CANYON EDUCATION IN

[RoyBacon]

China is down 1%.

We get a weak open with forced margin selling for the first hour. Dow is -165. That will put us at key support. I think she closes higher.

Do I dare call the session close higher with 12 minutes and UP 75????

[TheGoldenGoose]

Alright, enough already. Somebody actually got some good stock buying tips or is this BS going to continue forever? What's a good buy RIGHT NOW for my sideline cash?

[RoyBacon]

Baba

spy

et

[TheGoldenGoose]

You might have something there with et near a 52 week low. I will watch this at opening. Thanks.

[RoyBacon]

You might have something there with et near a 52 week low. I will watch this at opening. Thanks.

The fugger has gone straight down since acquiring their cousin ETP.

SnP rated their recent debt BBB- and they pay a safe 9% dividend which will likely increase next year.

Been buying it every week at a lower price.

Meanwhile futures spent half the night in the red but rallied and are now up 200. Europe had a HUGE UP day, not sure why. France and Germany both UP 2%.

[homie1975]

You might have something there with et near a 52 week low. I will watch this at opening. Thanks.

Roy mentioned SPY which is my favorite index fund. long term, if you can hold on to it for 7 to 10 years, you will do just fine