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Off-Topic Stock Market & Crypto Discussion

90scane said:
Tesla is looking a little better but I have a feeling they aren’t done yet. $100 is possible as others enter the EV space. Tesla has missed major opportunities due to lack of execution. Get the truck out, semi out, roadster out…
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Yes….Not only competition, but Musk is being hurt by twitter.
 
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mr.h said:
@90scane
We know that inflation is going down, but so will employment and GDP. Powell has to talk the talk, but we’ll see how far the Fed will go. We still have to see about earnings and Corporate profits. I believe Dec. retail sales will still rise. House flipping Is over and I heard this all day that the S&P needs to hold the 3900 level. There are some pretty cheap stocks out there, but I have lowered my entry points.
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Inflation is "down" to 7%.....still a ways to go. Wage inflation specially is still high.
 
SpikeUM said:
You dont fight the Fed, it has always been true, including this year.
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Fundementals are keeping the Dow above 28k and the Fed is keeping it below 35k.
Buying below Dow 30K Looks appealing.
 
SpikeUM said:
You dont fight the Fed, it has always been true, including this year.
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I don’t think the Fed knows where to go from here, except pounding their chest….lol
we are now seeing the effects.
 
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mr.h said:
I don’t think the Fed knows where to go from here, except pounding their chest….lol
we are now seeing the effects.
Click to expand...
Wait 6-12 months to see the real effects. Profits will drop and stock prices will follow. Unemployment will go up. Real estate down. The worst part, China could reopen driving inflation higher all while our FED is fighting it and the OIL reserves are depleted. Fun times!
 
mr.h said:
I don’t think the Fed knows where to go from here, except pounding their chest….lol
we are now seeing the effects.
Click to expand...

Respectfully disagree....inflation is "down" to 7.1% while the Fed funds rate is still in the 4's. Logic says they are going to keep raising until they see a 5 handle on the inflation number.
 
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SpikeUM said:
Respectfully disagree....inflation is "down" to 7.1% while the Fed funds rate is still in the 4's. Logic says they are going to keep raising until they see a 5 handle on the inflation number.
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As you use to tell me…it’s very backward looking. With the next Fed meeting in February, we will see what strategy they will pursue. That is what I meant by not knowing. No matter what they say, they prefer a soft landing.

From the committee of Responsible Federal Budget:
  • Stop Digging: At a minimum, Congress should avoid making the inflationary environment worse. They could do so by ending remaining COVID relief – including the student debt repayment pause and enhanced Medicaid payments to states – that are boosting price levelsby 0.2 to 0.7 percentage points. They should also avoid adding more to the deficit, whether through a gas tax holiday, student debt cancellation, expanded veterans benefits, a “competitiveness" bill, aid to restaurants, retirement reforms, or new tax cuts.
  • Lower Health Care Costs: The federal government directly influences many health care prices through payments to Medicare providers and Medicare Advantage plans as well as through its coverage of prescription drugs. Thoughtful health care reforms can reduce prices and the utilization of care, which would ease inflationary pressures. Based on one study, each percentage point reduction in Medicare costs would reduce the inflation rate by 5 to 15 basis points.
  • already passed a bill on Medicare
  • Reform the Tax Code to Raise More Revenue: The size and structure of the tax code affect inflation mainly through their impacts on the size and distribution of after-tax income. Tax increases can reduce demand in a distributionally desirable way, putting downward pressure on inflation. Lawmakers can further reduce inflation by limiting tax expenditures and subsidies that drive up specific prices in the economy.
  • Limit Discretionary Spending, Reduce Consumption-Oriented Spending, and Shrink Aid to States: To further temper demand, policymakers should limit the size of next year’s appropriations, reimpose discretionary spending caps to limit future spending growth, and reduce spending on various programs ranging from farm subsidies to Social Security benefits for high earners. In light of the $900 billion of federal aid sent to cash-flush state and local governments, lawmakers could also consider reducing certain state and local funding.
  • Promote Work, Savings, and Investment: Increased labor supply, capital supply, productivity, and personal savings can help to reduce inflationary pressures. Policymakers could reduce barriers to work, for example, by eliminating the Social Security earnings test, allowing older workers to collect the Earned Income Tax Credit, improving work requirements in some programs, providing vocational training for disabled workers, and other reforms. They could encourage savings by promoting the purchase of inflation-indexed bonds, expanding the saver's credit, or improving tax preferences for retirement savings. They could also support investments through regulatory reforms and targeted federal funding. Importantly, failing to offset new investments will undermine any inflationary gains, as higher demand would offset higher supply.
  • Lower Energy, Trade, and Procurement Costs: Beyond the normal supply and demand channels, government policies and regulations can influence the before- or after-tax price of various goods and services. For example, the government can help control inflation by ensuring it is getting the best price for its dollars, reducing tariffs that push up the price of goods, ending regulations that boost shipping costs, and encouraging extraction of fossil fuels and production of renewable energy, among other means.
  • Most of these plans can garner bi-partisan Support.
 
mr.h said:
As you use to tell me…it’s very backward looking. With the next Fed meeting in February, we will see what strategy they will pursue. That is what I meant by not knowing. No matter what they say, they prefer a soft landing.

From the committee of Responsible Federal Budget:
  • Stop Digging: At a minimum, Congress should avoid making the inflationary environment worse. They could do so by ending remaining COVID relief – including the student debt repayment pause and enhanced Medicaid payments to states – that are boosting price levelsby 0.2 to 0.7 percentage points. They should also avoid adding more to the deficit, whether through a gas tax holiday, student debt cancellation, expanded veterans benefits, a “competitiveness" bill, aid to restaurants, retirement reforms, or new tax cuts.
  • Lower Health Care Costs: The federal government directly influences many health care prices through payments to Medicare providers and Medicare Advantage plans as well as through its coverage of prescription drugs. Thoughtful health care reforms can reduce prices and the utilization of care, which would ease inflationary pressures. Based on one study, each percentage point reduction in Medicare costs would reduce the inflation rate by 5 to 15 basis points.
  • already passed a bill on Medicare
  • Reform the Tax Code to Raise More Revenue: The size and structure of the tax code affect inflation mainly through their impacts on the size and distribution of after-tax income. Tax increases can reduce demand in a distributionally desirable way, putting downward pressure on inflation. Lawmakers can further reduce inflation by limiting tax expenditures and subsidies that drive up specific prices in the economy.
  • Limit Discretionary Spending, Reduce Consumption-Oriented Spending, and Shrink Aid to States: To further temper demand, policymakers should limit the size of next year’s appropriations, reimpose discretionary spending caps to limit future spending growth, and reduce spending on various programs ranging from farm subsidies to Social Security benefits for high earners. In light of the $900 billion of federal aid sent to cash-flush state and local governments, lawmakers could also consider reducing certain state and local funding.
  • Promote Work, Savings, and Investment: Increased labor supply, capital supply, productivity, and personal savings can help to reduce inflationary pressures. Policymakers could reduce barriers to work, for example, by eliminating the Social Security earnings test, allowing older workers to collect the Earned Income Tax Credit, improving work requirements in some programs, providing vocational training for disabled workers, and other reforms. They could encourage savings by promoting the purchase of inflation-indexed bonds, expanding the saver's credit, or improving tax preferences for retirement savings. They could also support investments through regulatory reforms and targeted federal funding. Importantly, failing to offset new investments will undermine any inflationary gains, as higher demand would offset higher supply.
  • Lower Energy, Trade, and Procurement Costs: Beyond the normal supply and demand channels, government policies and regulations can influence the before- or after-tax price of various goods and services. For example, the government can help control inflation by ensuring it is getting the best price for its dollars, reducing tariffs that push up the price of goods, ending regulations that boost shipping costs, and encouraging extraction of fossil fuels and production of renewable energy, among other means.
  • Most of these plans can garner bi-partisan Support.
Click to expand...
Even if inflation numbers are backward looking, we are still looking at some real factors that could keep inflation hot and unemployment low thus reasons for Powell to keep rates high or worse keep raising them. The FED's rate hikes will impact housing and will have long-term negative impacts (we need more housing not less to lower inflation). They are driving demand down by driving up the cost of lending for housing. They are having little impact on Oil, Food, and other inflation inputs. Thus, I see this as the worst potential outcome. We have less homes being built while demand is getting delayed not destroyed. We are releasing oil from the reserves while China could drive up demand in the coming months/years. The inflation creation act will really only help drive additional inflation.

If you need proof of a pending recession: https://fred.stlouisfed.org/series/T10Y3M
This one has no false positives and has nailed the last 8 recessions (since it was first tracked) within 2-6 quarters.

There will be winners and losers. I'm expecting 3000 by Q423 and if inflation doesn't come down it could get worse.
 
90scane said:
Even if inflation numbers are backward looking, we are still looking at some real factors that could keep inflation hot and unemployment low thus reasons for Powell to keep rates high or worse keep raising them. The FED's rate hikes will impact housing and will have long-term negative impacts (we need more housing not less to lower inflation). They are driving demand down by driving up the cost of lending for housing. They are having little impact on Oil, Food, and other inflation inputs. Thus, I see this as the worst potential outcome. We have less homes being built while demand is getting delayed not destroyed. We are releasing oil from the reserves while China could drive up demand in the coming months/years. The inflation creation act will really only help drive additional inflation.

If you need proof of a pending recession: https://fred.stlouisfed.org/series/T10Y3M
This one has no false positives and has nailed the last 8 recessions (since it was first tracked) within 2-6 quarters.

There will be winners and losers. I'm expecting 3000 by Q423 and if inflation doesn't come down it could get worse.
Click to expand...
Yes we will have a recessionary period. It how deep that matters. A lot of economists will be chiming in before the next Fed meeting, so I believe the Fed is open to a soft landing, if possible.
At some point recession will be more of a problem than inflation.
Trump would be destroying the Fed right now..lol
 
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mr.h said:
As you use to tell me…it’s very backward looking. With the next Fed meeting in February, we will see what strategy they will pursue. That is what I meant by not knowing. No matter what they say, they prefer a soft landing.

From the committee of Responsible Federal Budget:
  • Stop Digging: At a minimum, Congress should avoid making the inflationary environment worse. They could do so by ending remaining COVID relief – including the student debt repayment pause and enhanced Medicaid payments to states – that are boosting price levelsby 0.2 to 0.7 percentage points. They should also avoid adding more to the deficit, whether through a gas tax holiday, student debt cancellation, expanded veterans benefits, a “competitiveness" bill, aid to restaurants, retirement reforms, or new tax cuts.
  • Lower Health Care Costs: The federal government directly influences many health care prices through payments to Medicare providers and Medicare Advantage plans as well as through its coverage of prescription drugs. Thoughtful health care reforms can reduce prices and the utilization of care, which would ease inflationary pressures. Based on one study, each percentage point reduction in Medicare costs would reduce the inflation rate by 5 to 15 basis points.
  • already passed a bill on Medicare
  • Reform the Tax Code to Raise More Revenue: The size and structure of the tax code affect inflation mainly through their impacts on the size and distribution of after-tax income. Tax increases can reduce demand in a distributionally desirable way, putting downward pressure on inflation. Lawmakers can further reduce inflation by limiting tax expenditures and subsidies that drive up specific prices in the economy.
  • Limit Discretionary Spending, Reduce Consumption-Oriented Spending, and Shrink Aid to States: To further temper demand, policymakers should limit the size of next year’s appropriations, reimpose discretionary spending caps to limit future spending growth, and reduce spending on various programs ranging from farm subsidies to Social Security benefits for high earners. In light of the $900 billion of federal aid sent to cash-flush state and local governments, lawmakers could also consider reducing certain state and local funding.
  • Promote Work, Savings, and Investment: Increased labor supply, capital supply, productivity, and personal savings can help to reduce inflationary pressures. Policymakers could reduce barriers to work, for example, by eliminating the Social Security earnings test, allowing older workers to collect the Earned Income Tax Credit, improving work requirements in some programs, providing vocational training for disabled workers, and other reforms. They could encourage savings by promoting the purchase of inflation-indexed bonds, expanding the saver's credit, or improving tax preferences for retirement savings. They could also support investments through regulatory reforms and targeted federal funding. Importantly, failing to offset new investments will undermine any inflationary gains, as higher demand would offset higher supply.
  • Lower Energy, Trade, and Procurement Costs: Beyond the normal supply and demand channels, government policies and regulations can influence the before- or after-tax price of various goods and services. For example, the government can help control inflation by ensuring it is getting the best price for its dollars, reducing tariffs that push up the price of goods, ending regulations that boost shipping costs, and encouraging extraction of fossil fuels and production of renewable energy, among other means.
  • Most of these plans can garner bi-partisan Support.
Click to expand...

The first and last points are super important.
 
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mr.h said:
Yes we will have a recessionary period. It how deep that matters. A lot of economists will be chiming in before the next Fed meeting, so I believe the Fed is open to a soft landing, if possible.
At some point recession will be more of a problem than inflation.
Trump would be destroying the Fed right now..lol
Click to expand...

My big concern is still stagflation....its likely that unemployment will rise in 2023, and inflation will drop *some*. However, we still have structural supply side issues with wages/staffing, real estate, energy, commodities, etc.
 

1. Small investors are doubling down on stocks while pros sell.​

Institutional and individual investors often dump stocks in tandem when the economy is slowing and indexes are tumbling. U.S. households typically sell about $10 billion in stocks after the S&P 500 falls at least 10% from its peak. That doesn’t appear to have happened this year, despite the S&P 500 being on pace for its worst year in more than a decade. In the coming days, fresh data on consumer spending will provide traders with more clues on the state of the economy.
 

2. This housing downturn won't be like the last one.​

The pandemic housing boom is over, but a mortgage-market makeover makes a repeat of 2008 unlikely. Before, lenders barely bothered to verify mortgage applicants’ income. Today, they demand reams of evidence that borrowers can afford their loans. Underwater mortgages have given way to hefty cushions of home equity, particularly after a run-up in prices over the past two years. This week, several reports will gauge the health of the housing market amid higher interest rates.
 
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The above WSJ porsts lend credence to the equity market not yet hitting bottom, and that housing will not be the disaster it was during the great recession.
 
SpikeUM said:
The above WSJ porsts lend credence to the equity market not yet hitting bottom, and that housing will not be the disaster it was during the great recession.
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I’ve read some professionals that claim rates will be around 5.5% by May to June. That would mean the ten year would have to drop along with bank spreads all while the FED could be raising or holding rates near 5.5%.

If that does happen, the real estate market will warm up.
 
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2% is not attainable unless we have a deeper recession. I believe the Fed knows that, and like I said, they are talking the talk.
 
mr.h said:
2% is not attainable unless we have a deeper recession. I believe the Fed knows that, and like I said, they are talking the talk.
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The FED has two mandates: unemployment and price stability.

Thus, they can keep hiking if inflation doesn’t return to 2% so long as unemployment doesn’t go higher. Now the much bigger issue for the FED, who is going to buy bonds? The ECB and FED have been major buyers over the last ten years. If they aren’t buying, pension funds, private banks, mutual funds and foreign country central banks have to buy. Not sure they want to buy at less than 3% while the FED is raising rates above 5%. The 5% is overnight, 3% is ten year so the assumption is over 10 years rates end up below 3% and inflation under 2%.
 
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