That said, once rate cuts start the bidding wars will return. Not sure how housing doesn't remain elevated going forward given supply shortages.
OT: Stock and Investment Talk
- Thread starter RU-05
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"Remaining elevated" can still mean zero inflation. Remember, high prices and inflation are two different things.
the good news is - eventually we'll know.
no matter how much shouting down others do...
Why do you think rent is decreasing
For someone who chants”learn the math”, you seem to not understand how shelter costs in the CPI is calculated. Shelter costs looks at the cost of rent+utilities for renters (1/3 of the population). Rents don’t seem to be going down YOY or MoM. For owners of homes, it imputes the cost to rent that house relative to local data points. It doesn’t explicitly use house purchase prices. Moreover rent levels are more sticky than home prices. So a 5-10% drop of peak home sale costs will take quite a while to manifest itself in rental costs decrease; if at all.
Learn the math.
Tons and tons of data that everyone can see. Rent has been deflationary for the past 3-4 months. Learn about OER and the math. @kyk1827 can help.
Why would the rates decrease? Is it due to a recession or increase in unemployment? Both scenarios doesn’t scream bidding war. Everyone forgets the main factor for housing run up is affordability.
Walmart, by the way, is larger than Kroger and Albertsons combined. Kroger and Albertsons were considering a merger as of late '22.
People still fighting the Fed? 5yr is at 4.16% now.
The numbers are already there and the expectation is it will show lower inflation. However, there are more reasons to raise rates than lower rates. At best, the Fed just raise it two more times and hold.
The Fed pause is all the market needs to BOOM. And of course, lower inflation prints that are a mathematical certainty.
Stocks close on the lows
Yields sharply higher.
FX barely moves
Interesting day
Yields sharply higher.
FX barely moves
Interesting day
Most days are interesting, but in the grand scheme of things, normally pointless.
The Fed, though, is repeatedly stating rates to continue to increase and stay there for a good long while. No pause in sight. That said, history indicates when "the pause" does occur, three months later equities start to take off. Be patient.
Equities take off prior to the pause since the market is forward looking. Remember, after the Volker Inflation bear, stocks reclaimed pre-bear levels within 4 months. The Volker didn't announce the pause and victory until month 3. The market doesn't wait.
Don't miss out. You need to be positioned well before the announcement.
Data and history disagrees with this. The market will BOOM with a pause. Why? Because the next predicted step will be cuts.
Morris - The market will move before a formal pause or announcement. It always does. The market is forward looking. What do you think will happen if the Feb inflation prints come in light? Hint: KABOOM. The market won't wait for Powell. What do you think just happened in January? Inflation data looked good, markets went up. Last week, inflation data looked bad, markets are going done. The Fed has little to do with this.
I'm sure the markets will be choppy for the next few weeks, which is perfect for me. March 7 and 15 are my key dates. Next round of LTI and annual bonuses hit! :)
I'm sure the markets will be choppy for the next few weeks, which is perfect for me. March 7 and 15 are my key dates. Next round of LTI and annual bonuses hit! :)
2 yr is almost a 5 handle. Why buy stocks?
Show me 1 historical instance in which a market bottom was put in before a recession commenced?
Recession? Are you still trying to play that bear card. The recession was last year. The economy is doing fine. Job market strong. Consumer strong. Earnings beating expectations. Are you always this scared?
Eventually when the CPI settles rates will be cut. I won't pretend to know when that will happen, but it will eventually. When it does, you will start to see house prices creep up again (perhaps move quicker than creep) driving housing up again. It's a catch 22 cycle. With current demand you can't have low (4% range) mortgage rates and not have bidding wars and speculation. On the flip side the fed can't keep the broader rate this high forever; current market performance is where it is based on the expectation that eventually rates will ease.
+1
Can't settle for a wimpy 5%. The right leveraged ETF will get you 5x on the rebound rally!
No I’m not. I told you what my market play is. Locked in gains after a strong January and moved 50% of my longs to a high yield savings account. 40% perms-long. 10% SPY short position @ 411.00. Feeling good. Will revisit in May.
A week? Seriously? WHO CARES! Why are you so afraid of temporary paper losses? And FYI.....I'm way up for the year on SOXL (trade) and TQQQ (hold). Little up with LABU (still building this position). But we won't talk about BOIL now.
🤣
PANW goes boom on great earnings!
www.cnbc.com
Palo Alto Networks lifts earnings guidance as it pursues profitable growth
Palo Alto Networks is emphasizing profitability while still adding top-line growth through acquisitions under CEO Nikesh Arora.
Because the prices are low and 10 to 20 years from now what I buy now will be worth a lot more
Beautiful answer. I will not make fun of unions for a full month! Or Jackson. :)
Would it surprise you if I told you the historical avg of S&P 500 return is under 10%?
If CPI settles and jobs remain strong, there is no reason to cut. 2.0% 10 yr isn’t normal. Maybe 4.0% should be the norm.
S&P 500: $100 in 1950 → $241,255.01 in 2023
If you invested $100 in the S&P 500 at the beginning of 1950, you would have about $241,255.01 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 241,155.01%, or 11.25% per year.
As per the Fed, neutral rates = 2.5% to 3.0%
But nice try. Two swings and misses within minutes. Well done. LOL!
