U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-05-2018, 09:05 PM
 
Location: Kuwait
3,038 posts, read 1,180,317 times
Reputation: 2326

Advertisements

Quote:
Originally Posted by 49erfan916 View Post
people are stupid.
LOL...hard to disagree with that.
Reply With Quote Quick reply to this message

 
Old 02-05-2018, 09:24 PM
 
961 posts, read 921,475 times
Reputation: 1194
I would say the market is reacting to the combination of rising interest rates, potential for inflation, and earnings adjustments. However, the actual mechanics of the market looks like institutional investors are selling and algorithmic trading is going nuts....just look at the volatility and look how many popular stocks stopped right at their 1 yr trendlines. It looks like tomorrow is going to another down 300 day which will break trend. I'd stay away and wait for some positives in the SPY technicals before going long.
Reply With Quote Quick reply to this message
 
Old 02-05-2018, 09:25 PM
 
Location: Out in the Badlands
10,395 posts, read 8,346,895 times
Reputation: 7679
I think Soros is behind this somewhere.
Reply With Quote Quick reply to this message
 
Old 02-05-2018, 09:51 PM
 
18,242 posts, read 11,653,926 times
Reputation: 11855
Quote:
Originally Posted by redguard57 View Post
I'm wondering what you all think the market is reacting to? It's not like there was any bad economic news lately... in fact the latest round of economic news seemed decent - 200k job growth and 2.6% gdp for the 4th quarter... which seemed perfectly in line with with economic numbers coming out from 2015 to today.

Stock market generally reacts to long term (ten or so years out) predictions rather than just recent events.


Thing is that for much of the past ten or so years post fiscal crisis the stock market has run up impressive gains basically because; A: low to nil interest rates meant there was little else to stuff funds that made any returns, and B: the US and world economic pictures were a hot mess.


Much of this is no longer true. The US economy is strong and growing. Not fast as many would like, but never the less as last week's jobs report made clear there is a clear uptrend. The labor market is tightening which is leading to employers offering increased wages. Consumer confidence is up, people and businesses are spending, and all this with now the GOP tax "reform" pouring more petrol on the fire that us the US economy.


Simply put many stocks have quite lofty valuations that just aren't supported by conditions on ground, and people are starting to take closer look at things.
Reply With Quote Quick reply to this message
 
Old 02-05-2018, 09:56 PM
Status: "delete" (set 21 days ago)
 
3,189 posts, read 1,274,360 times
Reputation: 2351
The market was a drug addict that was fed by central banks. The central banks cut off the crack supply.

It's that simple. Check my "Set Up" thread and see the graph released by Citibank. That's it.

From what I can tell, Money is flowing to Chinese sovereign bonds. I expect us to enter into a global recession and then for China to recover first, as it lowers interest rates while the US is forced to raise interest rates, perhaps too rapidly, extending the US recession.

Either way, I think it's down from here. Tomorrow is likely to be historically bad.
Reply With Quote Quick reply to this message
 
Old 02-05-2018, 10:48 PM
 
18,242 posts, read 11,653,926 times
Reputation: 11855
Don't think a major correction is going to happen just yet; but much is going to depend upon how things roll out in many areas.


Back at the ranch it is February and Congress still has not passed a budget, and keeps relying upon stopgap measures. The USD continues to drop and having this egit as face of US Treasury isn't helping matters: Weak U.S. dollar causing pain for equity investors | Financial Post
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 03:30 AM
 
Location: Kennedy Heights, Ohio. USA
1,623 posts, read 1,278,327 times
Reputation: 1282
Money market managers parked their money in the stock market because low inflation kept interest rates low. Investors could only get a healthy return on their money in the stock market because interest rates were so low. The big Trump/GOP tax cut means that the US Treasury has to borrow $400 billion more dollars to finance the Government. This means one trillion dollars in new debt issuance this year and next.

Because of reckless US fiscal policy the tipping point has been reached where investors believe that the only way the US Deficit can be sustained is through inflation and or future budget cuts. Future lower US government spending levels and increasing US debt borrowing levels leads to lower levels of future real output. Money is a proportional claim on the future output of society. There will be more future claims on that that future output meaning if everything else is equal each future claim is less valuable. The market value of money is lowered because the market is expecting the real output/moneybase ratio in the future to be sharply lower due to sharply increasing US federal deficits. In other words the pie is sliced up more decreasing the size or quantity of each slice. Lower dollar value means higher prices for the same commodities = inflation rising. Unsustainable government debt levels devalues that government's currency. At some point deficits does matters. Sharply increasing US federal deficits equals sharply increasing rates of inflation.

With the expectation of higher inflation levels US interest rates are expected to rise. This means investors no longer have to put their money in risky assets such as the stock market to get a healthy return on their money.

Last edited by Coseau; 02-06-2018 at 04:19 AM..
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 04:27 AM
 
Location: Pennsylvania
8,970 posts, read 3,118,603 times
Reputation: 7052
Quote:
Originally Posted by redguard57 View Post
I'm wondering what you all think the market is reacting to? It's not like there was any bad economic news lately... in fact the latest round of economic news seemed decent - 200k job growth and 2.6% gdp for the 4th quarter... which seemed perfectly in line with with economic numbers coming out from 2015 to today.
Overbought.
Profit taking
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 04:39 AM
 
64,551 posts, read 66,100,109 times
Reputation: 42988
fear of future inflation getting higher and the machines unleveraging their record margin positions because markets were so docile in volatility . all it took was a slight catalyst and the selling triggered more unleveraging .
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 10:07 AM
 
5,458 posts, read 6,124,370 times
Reputation: 13946
Quote:
Originally Posted by Quietude View Post
Reality.

The Trump bubble was due solely to the general reaction to sweeping cuts in regulation and enforcement - F1000 companies and investors busting out a keg and screaming "Paaaarrrrrrttttyyy!"

The realities of where we're at are starting to sink in.

Pretty much nails it. The Donald wants to take off all of the regulations which protect anything outside of corporations making bigly money. People, trade, allies, the earth, health care, taxes on the poor all be damned. We're going for the corporate bottom line which he falsely believes, or so he says, will cure all ills.


Never has before. Not likely to do so this time. But it has been one hell of a party.


Don't forget we are also at the end of three to four TRILLION dollars of global quantitative easing. Free money which went mostly into stock markets. That trend is ending...and so is the market overvaluation.


Back to reality. 2.6% or less growth. Infrastructure. Immigration. Health Care. Nuclear war. Taxes on the middle class. Political chaos. And massive debts to which we just added $1.5 TRILLION to fund a tax cut for the wealthy. All painful stuff. Market didn't pay attention, until it did. And then it discovered some "technical" problems with some of the "free money" stuff people were trading in order to get rich quick.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top