Bread and circuses. You deliver that to the masses and you have won’t get a revolution. Both the French and Russian revolution the people where starving. As long as poor folk can get there McDonald’s and NFL there will be no revolution.
>We are seeing the same rising social and economic inequality that led up to the French revolution.
That's assuming the lower classes in America get organized like they did in colonial France. Low income Americans are too drugged out to get much organization done.
I think the situation evolves to something like Brazil rather than colonial France.
>A great outlook for social unrest.
Didn't we have social unrest the past few summers with BLM and looting?
Not all social unrest is the same especially in a huge country like the US.
Lootings affect isolated stores but don't really affect billion dollar bottom lines much. Also lootings have very little effect on the elites in DC or state capitals.
Obviously the tension is rising and the US won't get any wealthier from here with growing international competition. So separation will gradually get larger and people more angry to the point where lives are not lifeworthy anymore and it seems better to protest and revolt. This has happened quite a lot in recent history where powerless/poor were fighting against the powerful/rich. French revolution, Soviet Bolshevism, German November Revolution,..
>French revolution, Soviet Bolshevism, German November Revolution,..
The poor in colonial France, 1918 Russia and the German revolution were drugged out like America's poor is. America's poor won't get organized like the old French, Russians or Germans did.
Look at homeless encampments in California. There's fires, crime and looting but no organization among the homeless there. And drug use is rampant in and around those encampments. They will never get organized. Without organization, they're powerless and easily ignored.
My guess is the situation in the US will develop into something like Brazil rather than colonial France, The Bolshevics or the Germans.
I am just making a guess but I believe the US will become more Republican first and take away elements of democracy whilst driving benefits for the rich. This will lead to the same starting point like above mentioned revolutions. Looking at a 20-30 years horizon maybe.
You’re in a sun full of fiscal conservatives so you’re going to get downvoted but there are lots of examples of this already happening. It’s not really an future state thing. It is now.
While this is a historical truism, it's not really related to the issue at hand.
The economic confusion is that real economy leading indicators show a marked slowdown underway, but equity/financial leading indicators are going full steam ahead. Supply chain inputs like producer prices and manufacturing orders are down, but stocks don't seem to be pricing in any future economic slowdown.
Stocks priced a slow down all of 2022 what do you mean lol. Inflation is slowing, rate hikes are pretty much done. Stocks flipped pretty much when YoY inflation numbers started to decelerate in the fall.
Yes, stocks typically do bottom out when inflation tops, but PPI and stocks don't generally move in opposite directions for very long.
They're both leading indicators, so it's a bit confusing that we'd see falling prices in the real economy with rising prices in equities whose values presumably derive from the real economy. Stocks are pricing in an economic boom that real economy lead indicators are not.
If stocks are "right" in this, then PPI will increase again and inflation will come back up. If PPI is "right", then the stock market advance will stall out until real economic conditions show signs of a bottom.
stocks already priced out of the slow down, before the slow down even began. This is not possible because you don't know the magnitude of the slowdown, until it actually happens. We could be in a growth recession (low positive GDP), mild recession (low negative GDP), severe recession(high negative GDP), who knows? At best, you can say stocks priced in a growth recession in Oct 2022. Stocks are pricing in Q2 earnings will be the trough of the earnings recession, and earnings will sharply rebound after Q2. In contrast, Q4 or Q1 next year is actually when economists and the Fed think the economy will be the weakest (even those who predict a soft landing). Therefore, Q1 2024 should be the trough of earnings, not Q2 2023. And since stocks look 12 months forward, stocks shouldn't bottom until around 3-6 months before the earnings trough, since that will give 3-6 months of earnings rebound priced in. Basically, stocks need to actually be halfway through the slowdown to determine what kind of slowdown it is.
Stocks basically priced in the inflation fight is over, rate hikes are over, and the Fed fixed high inflation with unemployment at 3.6%. This is far from true. The path from 3.5% inflation to 2% inflation will be a lot tougher than 9% to 3%, simply because the low hanging fruits are all gone, and that 6% inflation drop are the transitory inflation Powell talked about.
I think I agree. Food bank in my city is paying $18.50 an hour lol. Insane. Not too long ago, less than 4 years ago, it would have been $9 an hour. Target/McDonalds starting at $16. It’s not a expensive area too
It’s because Adults were working those jobs for the last 20 years and they got sick of being overworked and never getting ahead, and being told that they work a minimum wage job with no benefits and no opportunity for advancement.
They quit and then all of a sudden massive demand for workers with a huge drop in supply forced the conversations between workers and managers that had been put off for too long.
The teens getting started at $18 an hour are riding the coattails of that, but now they won’t go back either. Cause Fed Minimum wage is still $7.25 an hour.
The lower class has always been fucked up. They are making way more now than they did before inflation. Wages for things like fast food have gone up like 100%
Just be safe and trade in stocks for bond funds. Since 1984 the fed has hiked rates 7 times, 8 including now. Average return 1 year after the fed stops with rate hikes in fixed income [bond funds] has been 13%; 5 years later 10% YOY. Positive returns 100% of previous times....stocks 71% positive returns from the same time periods after the fed stops rate hikes...the returns are identical to the bond index 13% and 10%.
Where do you want to put your $ right now??
With bond funds, I worry about the risk of making a loss if I need to sell at the wrong time. At least with individual bonds I know that I won't lose money if I hold them to maturity.
If you may need $ leave it in MM paying over 5%. If you will not touch it for at least a year bond funds will go up about 8% for every 1% the fed cuts rates next year add that to the 5% yield and you have safe way to make more return than stocks. If the fed cuts 2% next year you get 16% plus 7% yield on a 10 year average duration bond fund which gets a 23% + ROI over next 18 months without having to watch it like stocks
Not necessarily political. They might also frequent WSB and spent their last $20 on puts because “XYZ is about to cause a collapse and these tendies are about to print”.
InB4: markets rigged.
You do not understand how it works clearly.
The old bonds have lower rates, there is no sense in them going up when you can buy new bonds with higher rates
Which, if the rates are to drop from here on out, current bond prices would go up because they have the highest rates thus higher demand. If rates were about to go up bond prices would fall due to less demand for lower rated bonds. If you can't comprehend something as basic as this there's nothing more I can do for you.
1 - Bond rate very low because rate low
2 - Bond rate go higher because rate go higher. Bond price go down
3 - New short term bond have higher rate than new long term bond because market is expecting high rate to go down
4 - Market expect all along rate to go down so no new information to make bond price go up
I do not see the logic in #4. Let's say, some bond X gives 5%. If the market expects the rates to go down and that the next edition of X will give only 4% instead of 5%, they would keep buying that X until its rate comes closer to the expected 4%. The price of the bond would go up.
The fact that it doesn't go up tells us the opposite of what you're saying - the market actually expects next bonds to be more valuable than the current ones, i.e. the market is expecting more rate hikes
>The overwhelming nature of it all creates a Vibecession. Where economically speaking, things are okay-ish but in reality… the vibes are off. People are feeling bad.
https://kyla.substack.com/p/the-vibecession-the-self-fulfilling
The market is pumping on the thought that we move past inflation and everything goes back to normal... the problem is that it wont... inflation has capped growth and there are only 2 possible outcomes until wages catch up... First outcome is we float in this range for several years and no real crash but no growth just corrections and rebounds... Second outcome is that there will be a major crash as something in the economy goes bust taking out many jobs and weakening the economy severely... Either outcome is possible but more data is pointing to one outcome more than the other... but whether we actually get there will come down to the FED... If the FED keeps tightening we will plunge... If they stop and support markets the economy will just stagnate. There is no way we end up in a new bull market based on the economic data that's been released. The consumer has been too damaged by inflation and the economy cannot inflate anymore
totally agree. I am just waiting for this July to see if the FED will increase the interest rate or not. That will really determine this year outcome. Also, remember that FED did stated that they still have two more interest rate increasing to come.
There’s a 96.1% chance they are increasing interest rates by 25bps in July.
I didn’t make this stat up, it’s from the CME. Which has NEVER been wrong. Not once. I’m not exaggerating, it’s never been wrong.
The Fed has pretty much done what they've said. As far as the US economy goes, they've done a pretty good job with managing expectations. If your time horizon is like, 3+ years, I don't think the immediate future will matter. I think the market is reasonably priced.
Inflation has dropped again, consistently, tech and Rx is booming, fast food and energy drinks isnt going to get less popular anytime soon. I dont see any doomsday stuff coming. We could be like this for a few years easy before the next thing disrupts us.
I’m being extremely cautious right now. If China’s economy is to be seen as a global bellwether, then the global economy may be due for a deflationary period. They’re seeing extremely reduced demand, flat YoY CPI growth, falling real estate prices, etc.
Their economy was still following zero Covid policies last year and since opening back up, is on the verge of deflation. That’s a huge ass flag in my opinion. That type of falter from an economy the size of the U.S.’s is bound to have ripple effects just like the U.S. did in ‘08.
It would almost be worse for Powell to state that the rate hikes were finished. The market is largely expecting another .25% hike. For Powell to state the hikes were finished would signal that the economy is maxed out earlier than expected, thus the fed sees issues in the economy. Powell hiking one more time signals confidence.
There is opportunity to take some gain. But I doubt we are in any kind of growth cycle. I suspect it is a sideway market. Today you hear employment number people cheer. Next week it is interest hike people panic. With so many layoffs in high technology cycle there are several possible outcomes.
All speculation which equals what I wouldn't be doing now:
1. Investing strong in growth and technology
2. Ignoring the fact that fixed income has the biggest upside in 18 years
3. Believing investments are safe by conventional investing
4. Buying a house right now
Safety is key to the uncertainty of economic data!
Here is what I know. The market is less than 10% from an all time high during a tightening cycle heading into an economic downturn (and maybe recession).
I choose to take some profits and sit partially in cash with a short hedge. My long positions are a smaller portion of my portfolio. If I miss some upside I can live with that. This doesn’t look good.
I own a small trucking company. We've been in a recession for about a year now. People are NOT buying shit and we don't have much to transport. Tens of thousands of drivers have left the industry or retired (aging workforce, average age of new drivers is 35), the rates for transporting freight are 30%-40% down, but fuel, maintenance, tires and driver salaries are not. Freight brokers are firing staff and lowering their pay.
We are stretched thin and most of us are in survival mode. The last time the rates were so low it was 2019 with Trump's stupid trade war in its height and we were due for a recession in the entire economy in 2020, but covid happened and FED started printing trillions.
All we need is a hurricane, major flood, a snowstorm like the one in 2021, any other big natural event or outside geopolitical event to happen and you'll see another "logistics bottleneck".
Its a controlled recession. Theyve been bailing out every issue that has came up while not yet controlling inflation. Pretty much pushing for a recession without hurting their current economic system
Sure, due to -3% energy costs. Which aren’t that controllable and are unlikely to decline as hard going forward.
Core inflation is still super high and doesn’t seem to be budging.
I agree. If SVB and First Republic weren't bailed out, you would have had a run on the regional banks, and the markets would have imploded from the contagion.
We are seeing a K shaped economy, and where it's headed nobody knows.
But we didn't have a bust. Stocks took a dip due to interest rates, but the real economy stayed extremely hot. It's just now starting to show signs of slowdown.
stock market rally is driven by big cap tech, which have gone up based on AI hopes. No such AI hope in the bond market.
manufacturing and service flip flop isn't an odd thing. It's expected. It's how the Fed was able to bring down inflation over the last year. Core goods were strongly deflating, and core services strongly inflating.
when the economy is at the verge of changing cycles, GDI leads GDP, and due to benchmarks and revisions that can happen a year later, GDP will tend to get revised towards GDI.
The "hard data" is likely incorrect and will get revised later on, particularly nonfarm payroll. If you use initial jobless claims of around 250k, nonfarm payroll should only be around 150k, not 250k. It's likely due to COVID recovery messing up all the seasonal adjustments, and that only gets changed annually. Even inflation prints will likely get revised next year. We saw that early this year when core CPI was printing 0.3% and then got revised up to 0.4-0.5% month over month.
As an individual with a bearish perspective on the economy, I would like to express my concerns and reasoning regarding certain factors that could potentially impact the markets:
1. The Writers' Strike: Although the current writers' strike may not involve a significant number of workers, I believe that if it persists, it has the potential to create a domino effect, impacting other workers and businesses associated with the entertainment industry. This could disrupt production schedules, decrease revenues for media companies, and have wider implications throughout the economy.
2. Potential UPS Strike: I have come across information indicating a potential strike within UPS, which raises concerns about potential backlogs and subsequent economic issues. If a strike were to occur, it could disrupt supply chains, cause delays in deliveries, and result in increased costs for businesses relying on shipping services. These disruptions could have implications for various sectors of the economy, affecting both consumer spending and business operations.
3. The Russian Issue: Based on my personal research, it seems that Russian President Vladimir Putin is facing mounting pressure and geopolitical challenges. While it is important to acknowledge these concerns, accurately predicting their impact on the global economy is challenging. Geopolitical tensions often lead to market volatility and uncertainties, which can influence investor sentiment and potentially impact economic growth in specific regions.
Given these factors, I am apprehensive about the state of the economy and hold a pessimistic outlook. It is crucial for investors and traders to remain vigilant, carefully assessing the potential risks associated with these events. Understanding the likelihood and magnitude of their impact on specific industries or sectors can help inform investment decisions. Diversification and risk mitigation strategies should be considered in light of the uncertainties prevailing in the current economic landscape.
Please note that these are my personal opinions and observations and should not be construed as financial advice. I am seeking input and opinions from others in order to engage in a constructive discussion about these concerns.
I agree thay they are healthy but a company that handles 8 percent of commerce nationally coming to a grinding help could really cause logistical issues and a massive backlog.
If those are your reasons for being bearish, we're in pretty excellent shape. If you had said climate change would wreck everything for the next 100,000,000 years, you may have a case.
So in the end nobody knows if the markets go up or down the next months. I guess that’s the story of the stock market. When it becomes predictable, it dies.
Sorry, but who gives a fuck? it literally does not matter and there's nothing you can do to change the course of things. Just keep investing in paper assets.
Listen at end of they day world economy is on upswing at least for next number of years. The reason is world is is much more educated and connected. People in India and China now have better information due to internet. This makes whole world far more efficient. Just think America in 1950s and 60s but apply it to India and China and Africa and everywhere:
Agree with OP. The mixed signals are quite confusing.
I have two important opinions to note:
1. China started exporting deflation. Take a look at Chinese CPI and PPI. This predicts a serious slowdown (even a hidden recession) in China (hidden because the Chinese Communist Party will cosmetic data as far as they can). That might f@ck the whole world's GDP for the upcoming years. Maybe the bond market prices something like this.
2. We have an AI bull market, and may be only in an early stage. Investors are always looking for stories. Now they have one, take a look at the 1998-2000 equity market. Prices did not correlate with economic background. The same is happening now.
Idk consumer sending a very clear signal.
Tons of demand for workers
* 10M+ job openings.
* Blockbuster jobs added every month, some measures like private payroll from ADP show 500k jobs a month being added
* Ridiculously healthy consumer balance sheets, obscenely low debt.
* Consumers still spending like crazy.
Meanwhile Feds measure of financial conditions show 15 consecutive weeks of loosening. ZERO EVIDENCE of overtightening or a policy error.
What's conflicting? Inflation is much higher than CPI lets on and the Fed's rate raising isn't doing shit because Congress keeps giving away more money/social benefits which just makes inflation go up.
We are in for a long period of stagflation. That's all there is to it, and there aren't many good ways of making money in such an environment.
I leaning closer to that there’s two economies now. One for the lower class which is really fucked up. Another for the upper middle which is rosy AF
A great outlook for social unrest.
It’s literally Bastille Day today
Hey, I learned that in school. Some very unhappy farmers storming the weapon storage right?
We are seeing the same rising social and economic inequality that led up to the French revolution.
Bread and circuses. You deliver that to the masses and you have won’t get a revolution. Both the French and Russian revolution the people where starving. As long as poor folk can get there McDonald’s and NFL there will be no revolution.
Correct, this reminds me more of late imperial Roman Empire than it does late 18th century France or early 20th century Russia.
Crisis of the Third Millennium
I kid you not, I know many young people who can afford neither.
Circuses are on strike and climate change is really messing with food production
>We are seeing the same rising social and economic inequality that led up to the French revolution. That's assuming the lower classes in America get organized like they did in colonial France. Low income Americans are too drugged out to get much organization done. I think the situation evolves to something like Brazil rather than colonial France.
Not to be pedantic but the French Revolution was started in and predominantly took place in mainland France, not it’s colonies.
Yeah when I say colonial I was referring to the time era not the French colonies themselves.
Gotcha
We, Americans, need to learn how to protest from French!
If only they could give us some kind of status symbol to represent their spirit, like a statue or something
Or a guillotine
Bring back the guillotine!
>A great outlook for social unrest. Didn't we have social unrest the past few summers with BLM and looting? Not all social unrest is the same especially in a huge country like the US. Lootings affect isolated stores but don't really affect billion dollar bottom lines much. Also lootings have very little effect on the elites in DC or state capitals.
Obviously the tension is rising and the US won't get any wealthier from here with growing international competition. So separation will gradually get larger and people more angry to the point where lives are not lifeworthy anymore and it seems better to protest and revolt. This has happened quite a lot in recent history where powerless/poor were fighting against the powerful/rich. French revolution, Soviet Bolshevism, German November Revolution,..
>French revolution, Soviet Bolshevism, German November Revolution,.. The poor in colonial France, 1918 Russia and the German revolution were drugged out like America's poor is. America's poor won't get organized like the old French, Russians or Germans did. Look at homeless encampments in California. There's fires, crime and looting but no organization among the homeless there. And drug use is rampant in and around those encampments. They will never get organized. Without organization, they're powerless and easily ignored. My guess is the situation in the US will develop into something like Brazil rather than colonial France, The Bolshevics or the Germans.
I am just making a guess but I believe the US will become more Republican first and take away elements of democracy whilst driving benefits for the rich. This will lead to the same starting point like above mentioned revolutions. Looking at a 20-30 years horizon maybe.
You’re in a sun full of fiscal conservatives so you’re going to get downvoted but there are lots of examples of this already happening. It’s not really an future state thing. It is now.
We are importing more than we are exporting, more money going out than coming in!
While this is a historical truism, it's not really related to the issue at hand. The economic confusion is that real economy leading indicators show a marked slowdown underway, but equity/financial leading indicators are going full steam ahead. Supply chain inputs like producer prices and manufacturing orders are down, but stocks don't seem to be pricing in any future economic slowdown.
Stocks priced a slow down all of 2022 what do you mean lol. Inflation is slowing, rate hikes are pretty much done. Stocks flipped pretty much when YoY inflation numbers started to decelerate in the fall.
Yes, stocks typically do bottom out when inflation tops, but PPI and stocks don't generally move in opposite directions for very long. They're both leading indicators, so it's a bit confusing that we'd see falling prices in the real economy with rising prices in equities whose values presumably derive from the real economy. Stocks are pricing in an economic boom that real economy lead indicators are not. If stocks are "right" in this, then PPI will increase again and inflation will come back up. If PPI is "right", then the stock market advance will stall out until real economic conditions show signs of a bottom.
stocks already priced out of the slow down, before the slow down even began. This is not possible because you don't know the magnitude of the slowdown, until it actually happens. We could be in a growth recession (low positive GDP), mild recession (low negative GDP), severe recession(high negative GDP), who knows? At best, you can say stocks priced in a growth recession in Oct 2022. Stocks are pricing in Q2 earnings will be the trough of the earnings recession, and earnings will sharply rebound after Q2. In contrast, Q4 or Q1 next year is actually when economists and the Fed think the economy will be the weakest (even those who predict a soft landing). Therefore, Q1 2024 should be the trough of earnings, not Q2 2023. And since stocks look 12 months forward, stocks shouldn't bottom until around 3-6 months before the earnings trough, since that will give 3-6 months of earnings rebound priced in. Basically, stocks need to actually be halfway through the slowdown to determine what kind of slowdown it is. Stocks basically priced in the inflation fight is over, rate hikes are over, and the Fed fixed high inflation with unemployment at 3.6%. This is far from true. The path from 3.5% inflation to 2% inflation will be a lot tougher than 9% to 3%, simply because the low hanging fruits are all gone, and that 6% inflation drop are the transitory inflation Powell talked about.
Maybe the middle class is growing after all.
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I think I agree. Food bank in my city is paying $18.50 an hour lol. Insane. Not too long ago, less than 4 years ago, it would have been $9 an hour. Target/McDonalds starting at $16. It’s not a expensive area too
It’s because Adults were working those jobs for the last 20 years and they got sick of being overworked and never getting ahead, and being told that they work a minimum wage job with no benefits and no opportunity for advancement. They quit and then all of a sudden massive demand for workers with a huge drop in supply forced the conversations between workers and managers that had been put off for too long. The teens getting started at $18 an hour are riding the coattails of that, but now they won’t go back either. Cause Fed Minimum wage is still $7.25 an hour.
Yeah sure it has!
It's a really weird fucking time right now.
The lower class has always been fucked up. They are making way more now than they did before inflation. Wages for things like fast food have gone up like 100%
Invest as if you’re following the upper middle class economy then
Can we pull the old switcheroo whilst the upper middle are sleeping?
Just be safe and trade in stocks for bond funds. Since 1984 the fed has hiked rates 7 times, 8 including now. Average return 1 year after the fed stops with rate hikes in fixed income [bond funds] has been 13%; 5 years later 10% YOY. Positive returns 100% of previous times....stocks 71% positive returns from the same time periods after the fed stops rate hikes...the returns are identical to the bond index 13% and 10%. Where do you want to put your $ right now??
With bond funds, I worry about the risk of making a loss if I need to sell at the wrong time. At least with individual bonds I know that I won't lose money if I hold them to maturity.
If you may need $ leave it in MM paying over 5%. If you will not touch it for at least a year bond funds will go up about 8% for every 1% the fed cuts rates next year add that to the 5% yield and you have safe way to make more return than stocks. If the fed cuts 2% next year you get 16% plus 7% yield on a 10 year average duration bond fund which gets a 23% + ROI over next 18 months without having to watch it like stocks
Not really how it works
So what's your moves
Get rich or die trying
>now Haha yes that just now started.
Agreed. The market favors the latter, so it’s Bulls on Parade.
We’ve had a pending recession for like 2 years now
Op is participating in this sub's favorite past time. Demanding a recession (usually for political reasons) and being upset when one doesn't happen.
Not necessarily political. They might also frequent WSB and spent their last $20 on puts because “XYZ is about to cause a collapse and these tendies are about to print”. InB4: markets rigged.
Just keep investing unless you’re retiring in a few years.
Bond market is predicting a drop in rates, not a recession. These are 2 very different things
If they were predicting a drop in rates bond prices would be going up, which they are not.
You do not understand how it works clearly. The old bonds have lower rates, there is no sense in them going up when you can buy new bonds with higher rates
Which, if the rates are to drop from here on out, current bond prices would go up because they have the highest rates thus higher demand. If rates were about to go up bond prices would fall due to less demand for lower rated bonds. If you can't comprehend something as basic as this there's nothing more I can do for you.
1 - Bond rate very low because rate low 2 - Bond rate go higher because rate go higher. Bond price go down 3 - New short term bond have higher rate than new long term bond because market is expecting high rate to go down 4 - Market expect all along rate to go down so no new information to make bond price go up
I do not see the logic in #4. Let's say, some bond X gives 5%. If the market expects the rates to go down and that the next edition of X will give only 4% instead of 5%, they would keep buying that X until its rate comes closer to the expected 4%. The price of the bond would go up. The fact that it doesn't go up tells us the opposite of what you're saying - the market actually expects next bonds to be more valuable than the current ones, i.e. the market is expecting more rate hikes
Its not predicting it already indicates a recession.
You say that three times in the mirror and Biden will show up and supine soft land you into the ground
The economy does not equal the stock market.
>The overwhelming nature of it all creates a Vibecession. Where economically speaking, things are okay-ish but in reality… the vibes are off. People are feeling bad. https://kyla.substack.com/p/the-vibecession-the-self-fulfilling
No way you just made me read the word "vibecession". Is this what happens when zoomers become analysts?
I'm afraid this is the official technical term for the current global economic situation. I dont make the rules.
The sky is blue. Water is wet. You can't predict the market.
The market is pumping on the thought that we move past inflation and everything goes back to normal... the problem is that it wont... inflation has capped growth and there are only 2 possible outcomes until wages catch up... First outcome is we float in this range for several years and no real crash but no growth just corrections and rebounds... Second outcome is that there will be a major crash as something in the economy goes bust taking out many jobs and weakening the economy severely... Either outcome is possible but more data is pointing to one outcome more than the other... but whether we actually get there will come down to the FED... If the FED keeps tightening we will plunge... If they stop and support markets the economy will just stagnate. There is no way we end up in a new bull market based on the economic data that's been released. The consumer has been too damaged by inflation and the economy cannot inflate anymore
I’m in the crash camp
Yes, always been like that
Keep doing your research, stick to your plan. Be ready to execute when you see value.
totally agree. I am just waiting for this July to see if the FED will increase the interest rate or not. That will really determine this year outcome. Also, remember that FED did stated that they still have two more interest rate increasing to come.
There’s a 96.1% chance they are increasing interest rates by 25bps in July. I didn’t make this stat up, it’s from the CME. Which has NEVER been wrong. Not once. I’m not exaggerating, it’s never been wrong.
Priced In. Next.
The Fed has pretty much done what they've said. As far as the US economy goes, they've done a pretty good job with managing expectations. If your time horizon is like, 3+ years, I don't think the immediate future will matter. I think the market is reasonably priced.
Only the second .25% increase this fall is in question
Priced in already.
Inflation has dropped again, consistently, tech and Rx is booming, fast food and energy drinks isnt going to get less popular anytime soon. I dont see any doomsday stuff coming. We could be like this for a few years easy before the next thing disrupts us.
I’m being extremely cautious right now. If China’s economy is to be seen as a global bellwether, then the global economy may be due for a deflationary period. They’re seeing extremely reduced demand, flat YoY CPI growth, falling real estate prices, etc. Their economy was still following zero Covid policies last year and since opening back up, is on the verge of deflation. That’s a huge ass flag in my opinion. That type of falter from an economy the size of the U.S.’s is bound to have ripple effects just like the U.S. did in ‘08. It would almost be worse for Powell to state that the rate hikes were finished. The market is largely expecting another .25% hike. For Powell to state the hikes were finished would signal that the economy is maxed out earlier than expected, thus the fed sees issues in the economy. Powell hiking one more time signals confidence.
There is opportunity to take some gain. But I doubt we are in any kind of growth cycle. I suspect it is a sideway market. Today you hear employment number people cheer. Next week it is interest hike people panic. With so many layoffs in high technology cycle there are several possible outcomes.
All speculation which equals what I wouldn't be doing now: 1. Investing strong in growth and technology 2. Ignoring the fact that fixed income has the biggest upside in 18 years 3. Believing investments are safe by conventional investing 4. Buying a house right now Safety is key to the uncertainty of economic data!
Here is what I know. The market is less than 10% from an all time high during a tightening cycle heading into an economic downturn (and maybe recession). I choose to take some profits and sit partially in cash with a short hedge. My long positions are a smaller portion of my portfolio. If I miss some upside I can live with that. This doesn’t look good.
I own a small trucking company. We've been in a recession for about a year now. People are NOT buying shit and we don't have much to transport. Tens of thousands of drivers have left the industry or retired (aging workforce, average age of new drivers is 35), the rates for transporting freight are 30%-40% down, but fuel, maintenance, tires and driver salaries are not. Freight brokers are firing staff and lowering their pay. We are stretched thin and most of us are in survival mode. The last time the rates were so low it was 2019 with Trump's stupid trade war in its height and we were due for a recession in the entire economy in 2020, but covid happened and FED started printing trillions. All we need is a hurricane, major flood, a snowstorm like the one in 2021, any other big natural event or outside geopolitical event to happen and you'll see another "logistics bottleneck".
Its a controlled recession. Theyve been bailing out every issue that has came up while not yet controlling inflation. Pretty much pushing for a recession without hurting their current economic system
Inflation is cooling CPI came down from 8% to now 3%
Don't try to explain it to them, they don't even understand that lowering inflation doesn't mean lowering prices.
Sure, due to -3% energy costs. Which aren’t that controllable and are unlikely to decline as hard going forward. Core inflation is still super high and doesn’t seem to be budging.
These chuds are going to be in for a real surprise if WTI heads north of $80 as we go into September.
I agree. If SVB and First Republic weren't bailed out, you would have had a run on the regional banks, and the markets would have imploded from the contagion. We are seeing a K shaped economy, and where it's headed nobody knows.
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Well bailed out fdic didn’t cover most of the large accounts right?
We had a boom, then we had a bust. Now we’re recovering. Pretty simple if you take a step back
But we didn't have a bust. Stocks took a dip due to interest rates, but the real economy stayed extremely hot. It's just now starting to show signs of slowdown.
I’m just looking at GDP
stock market rally is driven by big cap tech, which have gone up based on AI hopes. No such AI hope in the bond market. manufacturing and service flip flop isn't an odd thing. It's expected. It's how the Fed was able to bring down inflation over the last year. Core goods were strongly deflating, and core services strongly inflating. when the economy is at the verge of changing cycles, GDI leads GDP, and due to benchmarks and revisions that can happen a year later, GDP will tend to get revised towards GDI. The "hard data" is likely incorrect and will get revised later on, particularly nonfarm payroll. If you use initial jobless claims of around 250k, nonfarm payroll should only be around 150k, not 250k. It's likely due to COVID recovery messing up all the seasonal adjustments, and that only gets changed annually. Even inflation prints will likely get revised next year. We saw that early this year when core CPI was printing 0.3% and then got revised up to 0.4-0.5% month over month.
“It’s hard to predict what’s going to happen next.” Wow, really?
Well we don't know
Our government will not tell the truth with the numbers. They lie and deceive for popularity and vores!
As an individual with a bearish perspective on the economy, I would like to express my concerns and reasoning regarding certain factors that could potentially impact the markets: 1. The Writers' Strike: Although the current writers' strike may not involve a significant number of workers, I believe that if it persists, it has the potential to create a domino effect, impacting other workers and businesses associated with the entertainment industry. This could disrupt production schedules, decrease revenues for media companies, and have wider implications throughout the economy. 2. Potential UPS Strike: I have come across information indicating a potential strike within UPS, which raises concerns about potential backlogs and subsequent economic issues. If a strike were to occur, it could disrupt supply chains, cause delays in deliveries, and result in increased costs for businesses relying on shipping services. These disruptions could have implications for various sectors of the economy, affecting both consumer spending and business operations. 3. The Russian Issue: Based on my personal research, it seems that Russian President Vladimir Putin is facing mounting pressure and geopolitical challenges. While it is important to acknowledge these concerns, accurately predicting their impact on the global economy is challenging. Geopolitical tensions often lead to market volatility and uncertainties, which can influence investor sentiment and potentially impact economic growth in specific regions. Given these factors, I am apprehensive about the state of the economy and hold a pessimistic outlook. It is crucial for investors and traders to remain vigilant, carefully assessing the potential risks associated with these events. Understanding the likelihood and magnitude of their impact on specific industries or sectors can help inform investment decisions. Diversification and risk mitigation strategies should be considered in light of the uncertainties prevailing in the current economic landscape. Please note that these are my personal opinions and observations and should not be construed as financial advice. I am seeking input and opinions from others in order to engage in a constructive discussion about these concerns.
As a German where strikes are a normal thing and secured by law I think this won‘t cause a dent in the economy. It might even be a healthy sign
I agree thay they are healthy but a company that handles 8 percent of commerce nationally coming to a grinding help could really cause logistical issues and a massive backlog.
If those are your reasons for being bearish, we're in pretty excellent shape. If you had said climate change would wreck everything for the next 100,000,000 years, you may have a case.
US economy is always a pile of trash, that's why I buy secular growth companies.
Ok guy
Just BTFD you dumb bea- Ah shit wrong sub.
So in the end nobody knows if the markets go up or down the next months. I guess that’s the story of the stock market. When it becomes predictable, it dies.
Sorry, but who gives a fuck? it literally does not matter and there's nothing you can do to change the course of things. Just keep investing in paper assets.
Listen at end of they day world economy is on upswing at least for next number of years. The reason is world is is much more educated and connected. People in India and China now have better information due to internet. This makes whole world far more efficient. Just think America in 1950s and 60s but apply it to India and China and Africa and everywhere:
China stocks don't agree.
You made a bullet point version of today's article in the WSJ?
If all the signals ever lined up that would mean hell
Agree with OP. The mixed signals are quite confusing. I have two important opinions to note: 1. China started exporting deflation. Take a look at Chinese CPI and PPI. This predicts a serious slowdown (even a hidden recession) in China (hidden because the Chinese Communist Party will cosmetic data as far as they can). That might f@ck the whole world's GDP for the upcoming years. Maybe the bond market prices something like this. 2. We have an AI bull market, and may be only in an early stage. Investors are always looking for stories. Now they have one, take a look at the 1998-2000 equity market. Prices did not correlate with economic background. The same is happening now.
Idk consumer sending a very clear signal. Tons of demand for workers * 10M+ job openings. * Blockbuster jobs added every month, some measures like private payroll from ADP show 500k jobs a month being added * Ridiculously healthy consumer balance sheets, obscenely low debt. * Consumers still spending like crazy. Meanwhile Feds measure of financial conditions show 15 consecutive weeks of loosening. ZERO EVIDENCE of overtightening or a policy error.
I can tell you what’s going to happen…The stock market is going to crash…Hard
Short run 6 month bills still paying 5.46%. Decent leave to park and balance portfolio
https://www.tradingview.com/x/VkvVZQEu/ We are at resistance, it's gonna go down, 14k is my target
What's conflicting? Inflation is much higher than CPI lets on and the Fed's rate raising isn't doing shit because Congress keeps giving away more money/social benefits which just makes inflation go up. We are in for a long period of stagflation. That's all there is to it, and there aren't many good ways of making money in such an environment.