What Could Crash Stocks

US equities took a rare beating Wednesday after Boeing and AT&T disappointed investors with below-estimate results. While the bulls managed to push prices back up off the day’s worst levels, they couldn’t erase the sense that a long-delayed (and healthy) correction could be near.

Additional headwinds included reports that Republicans were considering limiting 401k contributions to minimize the revenue impact of planned tax cuts and nervousness about President Donald Trump’s looming choice of a Federal Reserve chair.

But the real reason the market’s utopian, unblemished uptrend got marred? Bond market volatility led by the threat of higher interest rates driven by inflation. Rising rates and inflation are bull market killers.

Expectations of higher inflation amid ongoing economic growth – combined with the Fed’s accelerating tightening of monetary policy – are fueling a nasty sell-off in Treasury bonds. In this environment, when all assets except volatility climb in unison, any asset price deflation cannot be tolerated.

Thus the weakness is spilling over into equities.

Overall, so-called risk-parity funds (which depend on stocks and bonds moving in opposite directions) have suffered losses for the lasts six days. That’s the longest downtrend since July. And if it continues, it could challenge the very basis of this historic bull market in stocks: Ultralow interest rates and a near 30-year bull market in bonds.

Rates are already on the move.


You aren’t going to scare people into buying life insurance from you.


LOL…I may be stupid, and not comprehending English that well, but only an idiot knowing English would see something about life insurance on this topic.

Confused. Thought we just completed the correction in the month of Sep.

One possible cause of stock crashing is trump putting in a super hawk as Fed chair. Someone like Taylor, who is rumored to be the front runner.

About time. Even listening to Yellen’s dovish tone drives me nuts.

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These politicians need to let the people who know talk about what they are voting on, or what they are going to do. Allowing that guy in the white house to go pomp and fanfare is a disaster in the making. Nobody is telling where the tale or the head is about tax cuts or whatever.

IE. One senator says they are going to change the way 401K is used, Twhitler says no, they won’t touch it. Some say they change 401K or no vote, others say if they vote to change it they won’t approve whatever.

And as the stock market is full of surprises, always depending on future performances or sometimes false expectations disguised as a promise, anything can happen.

Don’t be too confident. 9-11 and Peral Harbor are examples of what we didn’t expect, but they happened.

AFAIK, stock market re-bounces fairly quickly after the initial crash from 9-11. Didn’t bother to verify, you may want to verify yourself.

Oh, you mean Obama did good? Not what I read from some ignorant posters here.

Well, some idiots out there, and they say it with so much pride, that when Obama left the stock market was at 8,000, then the liar in the white house took over :rofl::rofl::rofl::rofl::rofl:

See my new topic about Bezos, I hope you get some idea of what can happen.

Oh…I forgot! The crash came as a rumor, then it escalated to what we know about it. Such concerns were hidden by the Bush administration a year prior.

The coming week should be filled with high drama for markets, as President Trumputin is expected to name a new Fed chair and as Congress is set to unveil much-anticipated tax reform legislation.


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