Today After hours
Good news from AAPL and BABA, now super duper news from Fed… hold rate. Market roars.
Please don’t get trump on Thursday
Wow, the fed is holding rates and slowing down the balance sheet reduction. I don’t think people expected the latter.
Recession might be coming this year.
Such a dramatic reverse on Fed policy is a clear signal of the coming recession. Might be a few months away.
Jealous of us making money so easily?
I’m not trying to scare you. What do you think the reason is for this dramatic policy reverse?
Economy is slowing down. Growth rate around low to mid 2 this year. Plus macro is highly uncertain given the trade war.
They already stated inflation is a non-issue, so they don’t see a reason to increase rates.
But why stop the balance sheet reduction at the same time? I guess they may need to cut interest rate soon.
Nothing changed much from December to January
Fed balance sheet is still bloated. They won’t have any room to cut rates when the next recession hits. I think they will wait a couple quarters and then resume. Right now real rate is just about zero.
They didn’t say they’d stop. They said there will be an ample amount of reserves. It sounds like they increased the target balance sheet goal.
IMO, BAGB is right at dot. Just listened 5 mins of J Powell statement, it is pretty clear that US economy is slowing down in view of world wide issues, esp China
Listen first 5 mins here, you will know.
If economy improves they will do, but trade-war hits China heavily and in turn affects USA.
How come stocks are roaring? Bull trap?
Look at China’s Shanghai index bottomed out. It can only go up from here. No brainer.
I do not know how it is. It moves like that, esp S&P500.
Stocks roaring may be related to how much they dipped and how companies are producing results. For AAPL and FB, the price would have gone way below as people like me scared by selling them, but the results are okay level (still way below last year/last qtr).
I have been testing my program, with S&P500 dataset, that will likely give the signal. My program may provide proper signal or noise. I need to wait for few days (after the fact) or pre-empt with my own personal guess.
This is too early to be true, but a pure inference that likely slow down starting from March. I do not know whether that will be 10% down or 20% down or 30% down.
I may be able to monitor/predict with few days before it happens, but not now.
You monitor SPY with your chart skills, you will also be able to find out the dipping time
It’s more about foreign growth slowing which will limit US growth. That makes sense with so much Fortune 500 revenue from outside the US. Also, a strong dollar lowers foreign revenue hurting GDP growth. He also admits prior rate increases caused a tougher environment. He mentions muted inflation pressures. No major baseline shift in economic outlook. Lower oil prices put less pressure on inflation.
The speed of change is alarming. Just one month ago, he indicated 2 more hikes. The momentum of the economy might be towards slowing down. Whether we’ll have negative GDP growth is debatable, but the direction is definitely slowing and that’s bad for stocks over the mid term.
Correct, GDP impact of shutdown, China slow down, Brexit, Euro slow down and tariff issue. Trump may start shutdown if no agreement, he may be wild with another tariff if China agreement is not in place. No one knows how Trump changes suddenly.
But there is a sudden change in FED outlook within 6 weeks.
Imho, all the uncertainties have root in trump.
Uncertainty always exists before or after trump. I think the major difference in Trump is that he advertise all the uncertainties in real time fashion with high transparency. It can cause daily gyrations, but modium term impact is negligible.
However, Fed has consistent impact on economy and make you a real profit or real loss.
Even if we don’t have a real recession, an almost hit recession can still cause a steep loss for stock investors. The relief rally is not sustainable