Talking Stocks 2.0

[BraveBold]

Will be interesting where the Fed goes today.

Personal view: they are late to cut and should move 50bps. We will see more pain in Q4 and Q1. I will refrain from more detail on the why.

That said, they’ve created a quandary. Though the bond market is pricing more than 25, the tone implied in a 50bps move will be a more challenging one than a 25bps move. Again, despite recent expectations I think the language around a 50bps cut would be harder to draft without shaking markets.

[SDGT3]

Yesterday's retail spending numbers continue to exceed expectations. My base case is .25 cut today, but all the talking heads are saying .5. Market probability of 65% chance of a .5, so I'm outside the majority on what it will be. One can make the argument that a .25 is warranted based on the recent data coupled with a cut right before the election would be appropriate and a .5 may be cause of concern in certain circles. On the other hand, one could make the argument that a .5 is warranted based on the fact the Fed funds rate is exceedingly restrictive at about 200 bps above what the bond market has been pricing and the next opportunity to cut again won't be for nearly 2 months.

[Krash]

I'm guessing .25.

But I do agree that .50 is probably warranted.

[7sins]

IMO Will be 25bp, economic data does not warrant 50bp cut at this time. The real question is, how will the market react?

[huncho]

feels like everyone expects downside no matter the decision

[Wcdhtwn]

I think they will cut .25. This will disappoint because people want .50, market sells off and rates go up.

The "higher for longer" talk track we've heard so much of is relevant even under a cutting cycle. Smaller cuts and slow than the market wants.

[Exceeder]

i only buy when people are jumping out windows

[BraveBold]

Originally Posted by Wcdhtwn

I think they will cut .25. This will disappoint because people want .50, market sells off and rates go up.

The "higher for longer" talk track we've heard so much of is relevant even under a cutting cycle. Smaller cuts and slow than the market wants.

Agreed. Though we could have a resumption of inversion as the fed being too slow to adjust will cause a more severe recession. Any signaling that the Fed is too backward looking (as they’ve been) will raise the odds of a more severe economic slump.This would mute (after a near term spike) longer yields - and they will ultimately resume an even faster decline as it will push out the needed rate reductions.

Again, the “correct” move is 50bps and signaling that they will be sensitive to data for further adjustments. Don’t commit to a glide path further down in the statement to ease concerns of prior missteps but also address the valid concern they are about to crap the bed with labor markets weakening…

[BraveBold]

Well, they adopted my recommendation. Kudos to them.

[Krash]

Originally Posted by BraveBold

Well, they adopted my recommendation. Kudos to them.

Yeah, I’m really surprised but I think that’s the right thing, too.


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[Romeojk]

Anyone holding EBAY or have any thoughts about investing in them? I’m about to pull the trigger but can go either way. I wished I used the platform and it would be easy for me to say yes. It got on my radar after listening to a podcast called The Compound and Friends with Josh Brown and Michael Batnick. Anyone else listen to this podcast? I like listening for insight and just to have something good to listen to on my morning walks.


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[Krash]

Originally Posted by Romeojk

Anyone holding EBAY or have any thoughts about investing in them? I’m about to pull the trigger but can go either way. I wished I used the platform and it would be easy for me to say yes. It got on my radar after listening to a podcast called The Compound and Friends with Josh Brown and Michael Batnick. Anyone else listen to this podcast? I like listening for insight and just to have something good to listen to on my morning walks.


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FWIW, that particular stock is not on my Financial Advisor’s buy list. I don’t know why. I’m looking at the chart and it doesn’t look bad, but that is not a stock they recommend.


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[enjoythemusic]

Fed purposefully chose to continue adding the USA's National Debt. Due to the Federal Reserve's banking system scheme's current negative balance sheet (bankrupt), they will continue to draw currency out of the Treasury instead of the good times (when the Fed annually remitted funds back to the Treasury).

Can't escape the math. Play the spreads my friends.

Added: An interesting read on it is at https://market-ticker.org/akcs-www?post=252058

[Krash]

Qualcomm approached Intel about a takeover. This is how bad Intel has fallen. Ten years ago, if someone said Qualcomm would buy Intel, you’d never believe it. Not in a million years.

This is behind a paywall, but many of you subscribe to the WSJ.
https://www.wsj.com/business/deals/q..._copyURL_share





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[huncho]

Originally Posted by Krash

Qualcomm approached Intel about a takeover. This is how bad Intel has fallen. Ten years ago, if someone said Qualcomm would buy Intel, you’d never believe it. Not in a million years.

This is behind a paywall, but many of you subscribe to the WSJ.
https://www.wsj.com/business/deals/q..._copyURL_share





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yeah goes to show having a monopoly doesn't mean anything if you get complacent. have to also give props to how much Lisa Su turned amd around during that time

[Romeojk]

Originally Posted by Krash

FWIW, that particular stock is not on my Financial Advisor’s buy list. I don’t know why. I’m looking at the chart and it doesn’t look bad, but that is not a stock they recommend.


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Thanks. Maybe I’ll just watch it for a bit.


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[enjoythemusic]

China is doing a massive giveaway, like the Fed did a few years back that made USA stonks go up. Time for shifting some USA 'investment' from USA to China for a few months.

Grab your share of the free Chinese cash while you can.

[TRS1]

Originally Posted by enjoythemusic

China is doing a massive giveaway, like the Fed did a few years back that made USA stonks go up. Time for shifting some USA 'investment' from USA to China for a few months.

Grab your share of the free Chinese cash while you can.

This will be very interesting.

[enjoythemusic]

Originally Posted by TRS1

This will be very interesting.

Am guessing the ECB will be following the Fed's initial lead, and now China, in ~two months due to Xmas to reassure their market space. Total guess on my part tho.

[sambb]

china - are you going in on an ETF?

[enjoythemusic]

Originally Posted by sambb

china - are you going in on an ETF?

Oh, not me doing it. Imho stay in BTC / ETH as they're safer bets. Especially with world events moving towards inevitability. jmho

[enjoythemusic]

To be fair, at 9:05am today on CNBC Jim Cramer admitted the Fed is / may / will be buying the Stock market with their access to unlimited Dollar funds (imho further devaluing US Dollars). Legality aside, rest assured i predict the Fed will ensure (insure?) the markets stay at levels they have approved, which may benefit the Fed's approved Bank and 'Investment' partners.

Perhaps Nationalizing the USA economy is their goal? Boeing could be nationalized, and with a Longshoreman situation, surely the Fed can create a few Billion$ to ease these troublesome situations.

[HorologyK]

I just hope the market crashes soon. I like to buy things on sale!

[huncho]

Originally Posted by HorologyK

I just hope the market crashes soon. I like to buy things on sale!

it crashed in august and september, was the 20% discount not enough? chips were down like 40-50% lol

[Krash]

Originally Posted by HorologyK

I just hope the market crashes soon. I like to buy things on sale!

Don’t blink. You’ll miss it. You had quite an opportunity last month.


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[avidflyer]

Another great jobs report (At least on paper) SO why the rate cut??? Seems they may have jumped the gun.

[Krash]

Originally Posted by avidflyer

Another great jobs report (At least on paper) SO why the rate cut??? Seems they may have jumped the gun.

I hate to sound sarcastic, but let’s wait for the downward revisions later this year.

They already announced that there were about 800,000 less jobs created than what they previously announced earlier this year.


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[huncho]

Originally Posted by avidflyer

Another great jobs report (At least on paper) SO why the rate cut??? Seems they may have jumped the gun.

lol these reports don't show how bad the economy actually is. i realize this site is a giant bubble full of people that are very well off but in the real world people are really hurting right now

[SDGT3]

Originally Posted by huncho

lol these reports don't show how bad the economy actually is. i realize this site is a giant bubble full of people that are very well off but in the real world people are really hurting right now

Although I agree, the reason why half the country is hurting is because inflation has been the highest the US has seen in 40 years.

Jobs are still plentiful and the last 3 month's average jobs numbers, with revisions, went from 116,000 jobs per month to 185,000.

Oil up on geopolitical concerns. 10 year treasury approaching 4% again, dollar much stronger, the yield curve tightening between the 2’s and 10’s again to near inversion as short term rates rise on this news. Two candidates that will raise the budget deficit and national debt even higher. I ask, where was the need to cut rates and why even talk about further cuts when you don’t have the “data” yet?

Claudia Som of the infamous Som Rule of economics revealed that layoffs are at the lowest rate in history… what is Powell and the Fed thinking when he says he wants to concentrate on full employment ?

The last Fed decision was not unanimous - the first time that has happened in nearly 20 years - so there is some sense of reality at the Fed, just not with the chairman.

Does anyone here believe or have personally experienced 3% inflation on anything? Housing, Food, all lines of insurance, energy, medical? No way.

[huncho]

Originally Posted by SDGT3

Although I agree, the reason why half the country is hurting is because inflation has been the highest the US has seen in 40 years.

Jobs are still plentiful and the last 3 month's average jobs numbers, with revisions, went from 116,000 jobs per month to 185,000.

Oil up on geopolitical concerns. 10 year treasury approaching 4% again, dollar much stronger, the yield curve tightening between the 2’s and 10’s again to near inversion as short term rates rise on this news. Two candidates that will raise the budget deficit and national debt even higher. I ask, where was the need to cut rates and why even talk about further cuts when you don’t have the “data” yet?

Claudia Som of the infamous Som Rule of economics revealed that layoffs are at the lowest rate in history… what is Powell and the Fed thinking when he says he wants to concentrate on full employment ?

The last Fed decision was not unanimous - the first time that has happened in nearly 20 years - so there is some sense of reality at the Fed, just not with the chairman.

Does anyone here believe or have personally experienced 3% inflation on anything? Housing, Food, all lines of insurance, energy, medical? No way.

yeah inflation isn't 3%, its multiples higher but also the other issue is that new jobs are now paying less than they were in 2021/22 (although that was a bubble) and people aren't getting raises to help offset inflation. salaries haven't moved much over the last 10 years while everything else easily costs twice as much

on the other hand once companies are able to afford giving people more money, inflation would probably tick up again no? i don't really know how this gets solved, i feel like this is just the new normal