If Trump has to crash the market then this is the best time. Prompt Fed to increase rate and crash the market, then blame Fed. Get 1.5 years to restore and win next elections.
If I were him, I would be doing it now. Too risky to let it linger and crash close to elections. Create a minor crash now and restore.
If SP500 goes down next 10%, we hit 20% bear market that won’t happen before Dec 19th, next FED meeting.
Same way, FED won’t increase rate now as they normally hike rates when stock and economy is in full health.
IIRC, they have not raised any rate when market is down except 1987 (I am not sure).
Considering global economic situations (like US-China-trade war, Brexit…etc) they may hold off this time (Guessing from Powell’s down tone). Still market may go down until Dec 31.
Quarterly unemployment remains same, but future likely week. FED may not have any leverage to raise rates in future.
The main issue is anomaly - Companies are good (sales, profit), unemployment remains same, market is going down and down repeatedly.
Financials and energy are in free fall. Almost all of the big banks are making 52-week lows. The flat yield curve is terrible for them, since they make money off the spread.
NEW YORK (AP) – Verizon says 10,400 U.S. managers have accepted a voluntary buyout offered as the company seeks to trim costs to invest more into its push into the next-generation network known as 5G. That’s about 7 percent of its global workforce.
Verizon offered the buyouts to 44,000 employees earlier this year. The staffers taking the buyouts are mainly U.S.-based management staffers, excluding its Oath media business and staffers in some customer facing roles.
The New York company is in the midst of a cost-cutting program to save $10 billion over four years to help it invest in 5G technology. Those accepting the buyout will get up to 60 weeks of salary, bonus and benefits, depending on length of service.
TEVA is probably in trouble until they settle on this. 47 states are in the suit now and one of the generics (heritage has pled guilty and is cooperating)
Telcos are terrible investments. 5G means HUGE capital investment which can’t be recouped fast because of competition. They are all trying to escape the inescapable: they are all just dumb pipes.
Here is the full message from Bloomberg, first line says Rate hike this month, that is wrong (IMO).
======================================================== Goldman Sachs Group Inc. expects the Federal Reserve to raise interest rates this month, but said the probability of a follow-up move in March has fallen to slightly below 50 percent.
Holding in March would likely coincide with a volatile period for markets as the 90-day trade war truce between the U.S. and China is due to end at the start of that month, Chief Economist Jan Hatzius wrote in a Dec. 9 note.
Even so, there’s still a good chance that the Fed hikes in March given a positive fiscal impulse and a funds rate that remains in neutral territory.
“We emphasize that this is a close call,” Hatzius said. “Moreover, our forecast of no hike assumes that the median number of 2019 hikes in the December dot plot moves down from 3 to 2; if the median instead stays at 3 hikes, the probability of March would increase again.”
Overall Goldman expects the U.S. economy to grow above trend through most of 2019, unemployment to fall further below the Fed’s estimate of its longer-term level, and wages and prices to gradually move higher – meaning the Fed will continue to tighten.
“We therefore think that the storm will pass and this will keep Fed officials on a normalization path, albeit a more tortuous one than up to now,” Hatzius wrote.