I argue that the recent 50 basis points rate cut by the Fed signals a weak economy. The consumer base is struggling, as many people can’t afford to live comfortably, which further supports my belief that the economy is not doing well. However, I wonder if I might be viewing this too narrowly. Perhaps I don’t fully understand how corporate earnings can be strong if the purchasing power of the middle and lower classes is not. Regardless, the reality is that these groups are facing challenges, and with unemployment still a concern, overall consumer confidence and spending are being negatively affected. So how can the S&P 500 be at an all-time high?
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50 bps came as a surprise to many, who were expecting 25, if there was to be a cut at all. Inflation is still above the Fed’s target. It has been suggested that this was a political move to gun the economy ahead of the November election.
One thing this rate cut will do is increase buy backs
Oh yeah! I agree. Such a political move. Trump made a public statement telling Powell not to lower rates before the elections.
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This defensive positioning, especially the high allocation to utilities and low exposure to cyclical sectors like energy and materials, aligns with historical patterns seen near market lows, not tops.
So, would you make a bet that the S&P 500 won’t end the year at $6,200?
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I believe we’re at 5,702.55 today.
No, I wouldn’t make that bet.
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JPM has the S&P 500 ending the year at $4,200. They have not revised their numbers.
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So they’re betting it’s going to drop 26% by year’s end.
And Jamie Dimon is still forecasting a hard landing. He may well know something we don’t.
Much of the data coming out of the Biden administration is junk, like the jobs reports that are quietly revised downwards much later, and JPM likely have their own, more accurate, data.
Yeah! But it’s odd that they’re the only bank with such an extreme number. Most of the banks, including Goldman, were at $5,500.
agreed, odd indeed
We had an amazing jobs report this week that blew away all expectations.
Zerohedge is attributing it to a record surge in government workers
Behind Today’s Stunning Jobs Report: A Record Surge In Government Workers
Chart stolen from Zerohedge
It helps Kamala and avoids a market crash
Zerohedge has been predicting an economic apocalypse for almost 20 years now and has been able to find a conspiracy plot in every data release.
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10 yr yield rising and 30 yr mortgage rising too. It’s asinine. Investors playing 4d chess or are just dumb af
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The recent rally following the 50 bps rate cut indicates strong market optimism and a potential recovery in investor confidence. It highlights the impact of monetary policy on market dynamics and signals investor expectations for future economic growth.
The recent rally following the 50 bps rate cut indicates strong market optimism and a potential recovery in investor confidence. It highlights the impact of monetary policy on market dynamics and signals investor expectations for future economic growth.
Sounds like something ChatGPT would say.
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Sounds like something a 2nd year Big-4 consultant would say.
actually i asked chatgpt. it came with a pretty reasonable answer, the 2 most important ones:
- a spread between str and ltr
- long term rates are dictated by market players not fed.
1 is something seen in practice
2 is economic theory
regarding his take that it’s positive, yea its less of an inverted yield curve. it aint wrong lol.
but its a lot of assumptions. and you know what they say about people who assume.
alpha_cap> So, would you make a bet that the S&P 500 won’t end the year at $6,200?
guest > I believe we’re at 5,702.55 today. No, I wouldn’t make that bet.
alpha_cap> JPM has the S&P 500 ending the year at $4,200. They have not revised their numbers.
S&P closed yesterday (4 December 2024) at 6,086.49, so 6,200 or higher at year end looks very likely.
4,200 at year end looks very unlikely
lol ive lost over 5k in puts betting for a market downturn in the past 3 weeks. i quit today. never running that strat ever again no matter how cheap the premium.
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I honestly don’t understand how someone with your background runs a very short term market timing strategy in such a tight market as options. What’s your edge over all the other smart and nifty people who are trying the exact same thing?
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