Over the past year I have already accumulated over 400 shares of the SPY as I have been swapping out higher fee funds for a bunch of the spiders. I expect the XLF to rebound after getting crushed last year. I am not as confident in the XLE and the VGK as both energy and Europe are perplexing the #@%$ out of me.
This market rally is impressive. At the start of the month, I told several people to keep an eye on the VIX. As long as it stays below 20, I predicted an uptick in the markets.....but I didn't see the rebound coming back with this much conviction.
Wall....I know you are not a believer in what's happening.....but surely there is a way to make money regardless of fundamentals.
Yeah this move is one thing in my mind...the market QUICKLY tested the FED, the FED caved...the market wanted to see if Powell was going to continue tightening even during a paltry drop and he caved as the FED always caves...so the FED failed the test and the market quickly reversed.
The rest is noise...China, debt ceiling, shutdown whatever nothing matters....its the FED only because the leverage that feeds the beast is based on the FED and those rates...corporate borrowings and thus buybacks are dictated by interest rates.
Its sickening to say but the FED controls this market, nothing else outside an extreme event will ever be larger than the FED.
Yeah Wall.....this Fed is being easily manipulated it seems. I believe that rates have to go higher if only to ensure that the Fed doesn't get caught down the road with not enough bullets in the chamber in the event a recession rears its head.
Let's not forget that it was not too long ago that the "idea" of a negative funds rate was being floated around by some of the talking head idiots. What in the world would happen in a low rate environment (now that we are off near zero) accompanied by a steepening recession. It could get really ugly at that point. I think this is what you have been saying all along.
Rates need to go higher and if this market continues to march higher, I will bet you my bottom dollar that Powell changes his tune and starts talking up three rate hikes this year.
Maybe..the FED just bent over for the market so the dollar is getting hit and that is good for gold especially. Trump obviously royally chewed out Powell and threatened him...no other way to explain the complete reversal of the FED balance sheet policy which had been ongoing for over a year.
Has a president ever had so much influence on the FED in our lifetime? Trump was working the FED even before he was elected and hasn't stopped.
That said, now that Powell has backed off, the markets should have little trouble retracing the remaining percentage point losses from last year. Bear markets of 20% or more during non recessionary times have recovered their losses at an average of 5-6 months from the lows. GNP is still chugging along at 3% growth so the odds of a recession popping up does not seem likely. I know Wall will say that the numbers are fishy or manipulated, but growth is growth and the markets look at it as fuel.
We may slip back from here for a short time (we have come back so fast), but I would say by April or May the market will be making new highs. Just my 2 cents.
Yeah no question the fight is futile, I see that for sure but based on real numbers and ANY sense of historical relevance (rates especially) the market is overvalued I'd say 75%.
For the US economy growing at 3% fueled by the suppressed rates and government debt (which has been supported by suppressed rates) this market is so overvalued it is shocking. Corps are leveraging via debt and cash flows otherwise used for investment to buy back stock and give fake dividends to make their earnings look better. Manipulation of income tax brackets and shifting of obligations from long term to short in order to reduce interest expense even more is very very dangerous.
In reality nothing matters except the FED and any shock to the system...the game can continue until there is a shock or the bond market throws up and rates go up...
I dont invest because I am forced and the FED is forcing all and any into the market, I think we will look back and be astounded as to the stupidity and lack of clear thinking that people were in this market given the stench of debt and artificially low rates.
Because ETF's are just a fake basket of stocks or commodities...same story!
I am kind of ticked that I didnt nab some GBP down in the low 120' it was staring me straight in the face and I didnt pull the trigger. The problem is Forex providers are like zero...getting in and out doesnt happen anymore unless you want to be manipulated by a big player who has wide spreads and will stop you out when liquidity goes away. I miss the good old Forex days.
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