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0.25% may be nothing, but it's doubling the Policy Interest Rate, lol...

And when 10-year yields are not even at 2%, then increasing the Policy Interest Rate by only 0.25% is huge. A Policy Interest Rate rising by more than 10% of the current 10-year yield, lol...

I'm not arguing that they shouldn't raise rates, they should, I'm just pointing that with rates so low, we are in deep sh*t.

Will we ever see 10-year yields back above 5%? HAHAHAHAHA, hilarious!

The rich controls this world and won't allow such a thing to happen.
Valid point.

Are we headed into a correction, a crash or a long term recession?

In some ways the economy is doing well aside from Covid disruption. However, I think there is a lot of possibility for the smallest disruption to result in big trouble. If we look at the charts prices for most stocks are not much below where they were 6 months ago. If people are freaking out now. what happens when they get to where we were in 2020 and the BOC and FED have no room to cut. Just keep printing and let inflation run wild while wage growth (real or nominal) remain flat?

If one searches the forum they will find threads going back 5-10 years talking about NA moving to a no growth market like Japan experienced. A lot of this was due to demographics, shift in economic policy etc. A generation were unable to find good jobs, invest, buy real estate etc. and its market returned next to nothing.
 

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Taper Tantrum 2.0

Your move JPow
I think he won’t do anything. The majority of equities in the USA are concentrated in small number of wealth individuals, mostly republicans supporters.
Vs inflation affects mild and poor class, who traditionally vote democrats.
current government interested in targeting the inflation more that market sell off.
just my opinion.
 

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I think he won’t do anything. The majority of equities in the USA are concentrated in small number of wealth individuals, mostly republicans supporters.
Vs inflation affects mild and poor class, who traditionally vote democrats.
current government interested in targeting the inflation more that market sell off.
just my opinion.
The team at Pelosi Capital Management does not support this plan, haha
 

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Didn't want to add much today as I think waiting to hear what Jerome Powell says makes the most sense. If it is bad news, stocks may fall a little more and a better time to add.

If it is good news stocks will rise but still be oversold and good values. Win win situation. The market really calmed down in the afternoon, Nasdaq only down .6%
 

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There is no fundamental reason for a drop, which means this is emotional trading and definitely should be bought. Even if Russia invades Ukraine and there is a ton of sanctions, I don't see economic recession. COVID mandates are dropping like flies, the world is opening up, at least for now. I would not be surprised to see new highs before spring is over.

Interest rate hikes cause short term fear but in the long run they are good for economic growth and markets will realize this, just like in every other taper tantrum.
 

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There is no fundamental reason for a drop, which means this is emotional trading and definitely should be bought. Even if Russia invades Ukraine and there is a ton of sanctions, I don't see economic recession. COVID mandates are dropping like flies, the world is opening up, at least for now. I would not be surprised to see new highs before spring is over.

Interest rate hikes cause short term fear but in the long run they are good for economic growth and markets will realize this, just like in every other taper tantrum.
I also believe that this is just a big correction, and it'll be short-lived. We need much more than just a first interest rate hike to cause a real market crash and recession. When the policy rate will be back around 1.5%, now that could be truly dangerous for the market, depending how fast it gets there.
 

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You've heard of buy the rumour sell the news? What if the expected news is bad?

How about sell the rumour buy the news? If the news isn't as bad as expected the market can climb on "bad" news

JPow looks sternly at the elephant as he loads another pellet
 

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I think the market had priced in all the interest rate hikes for this year w the drops last week. It showed up in 10 yr bond yields rising to ~ 1.8%.

I think the market fell today because of the Ukraine activities over the weekend and fear of what J Powell will do w the tapering. Tapering is the Fed reducing the bond purchasing or even selling bonds AFAIK, which will send prices down more and yields up higher. I think the new fear is yields getting into the ~ 2.2 -2.5 % range soon.

Either way, there maybe a little more downside w the worst being absorbed then we should hopefully have a good run for the rest of the year. News can't get any worse than interest rate hikes and a threat of war.
 

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Today’s end of the day “recovery” was mostly brought by little guys buying, no institutional interest , plus Unusually High volume aftermarket activity (smart money selling?), probably gonna be another red day tomorrow or Wednesday. We will see.
 

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I see 2022 is a consolidation of the large gains in 2021 with 1 or 2 corrections. I don't think there is any real chance of a recession but there is a real chance the broad market ends lower this year. I don't really care given the size of 2021 gains. Most boomers would still be looking for market gains with median age about 65. Oldest boomers will be 76 this year and likely the only ones shedding equities to any significant degree.
 

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Discussion Starter · #756 ·
I see 2022 is a consolidation of the large gains in 2021 with 1 or 2 corrections.
Yes that would make sense. We didn't have any corrections in 2021, the market just went straight up.

It would be totally normal to get a couple drops of a few %. It will be enough to spook people, which is good. Investors have been soothed for the last two years with very calm moves and no volatility. That lulls people into a false sense of security and (from what I've seen in the past) also tends to make them more skittish when volatility emerges again.

Slapping investors with some volatility is healthy. It should deter people from greedy, excessive risk-taking.

I suspect that stocks will be positive by the end of this year, or maybe somewhere in the -5% / +5% band.
 
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