Down goes the Dow

I'm exhausted and I need a drink

Ghost of Igloi wrote:

Racket wrote:

I don't know why that would surprise anyone when small caps have been in a bear market since like October

On 10/9/2018 I came under much criticism by saying HSGFX would outperform TNA and most equity funds over a multi-year period. Apparently that is the direction we are headed. Of course the Financial Advisor guy quoted past performance of both funds. As I noted at the time, it is not where we have been but where we are going, which is quite a bit lower.

I did quote past performance. So did you.

Also, you failed to note that I agreed with your assessment.

OK, then we agree, enough said.

Inflation as measured by CPI is literally only held down because oil is so low right now. Once oil goes up we are 100% getting inflation and the Fed will have to raise the rate.

Look, here's my short term bear thesis :

1) Apple already announced a huge Q1 miss. That means, I think, a bunch of other companies are going to miss as well either due to global slowdown or tariffs.

2) Donald Trump. Don't really have to say any more than that.

3) Wall Street is hiking in zero rate hikes because they expect the economy to suck enough to justify no rate hikes. I'm not making this up, WSJ had a huge piece on it. Does suck ass economy sound bullish to you? No, it doesn't.

4) I'm holding a short position I really want to sell for a profit and I'm down a lot on it....

Maserati wrote:

I knew this bounce would happen today

Please tell me we're going to have a record breaking sell-off on Monday then?

Wait just a god damn second here.

Are treasury yields lower than the Fed funds rate right now??? Are you kidding me with this bs?

Racket,

I think your assessment of the current environment makes sense. The global economy is weak and has been for over a year. Apple does express this weakness and it has spread to other companies earnings already. Trump and the Washington machinations just adds another element to the uncertainty. The “global synchronized growth” was a narrative, like many others told recently, that turned out to be untrue. I suspect, rather, you are seeing a global economic decline spreading, and soon to be apparent at home.

In regards to Treasury yields, as fund flows out of stocks drives bond prices higher and yields down. Money moving globally from areas of lowering yielding bonds also drives prices here at home higher as well. That is why there is somewhat of a cap on yields going forward. Of course that would change if there was a question of ability to pay. You have seen that recently in Italian government bonds.

Igy

Racket wrote:

Wait just a god damn second here.

Are treasury yields lower than the Fed funds rate right now??? Are you kidding me with this bs?

Fed Funds overnight rate: 2.5%

2 yr treasury rate: 2.5%

5 yr treasury rate: 2.49%

10 yr treasury rate: 2.66%

that's the free market saying that inflation is not a thing right now.

of course, the free market can and will be wrong at times.

the global economy is not weak and hasn't been weak. it is showing some signs of slowdown, is all.

Apple said chinese werent' buying their smartphones. Some of that was b/c the chinese gov't told people not to, some of it is that apple is just way overpriced for most places. There is some slowdown in china.

So...how exactly does that mean we'll have a weak earnings season? Sure, companies that depend on China. But we saw huge health in the US consumer over the holidays, and europe is fine, if a little slower than last year.

Ghost of Igloi wrote:

In regards to Treasury yields, as fund flows out of stocks drives bond prices higher and yields down. Money moving globally from areas of lowering yielding bonds also drives prices here at home higher as well.

Right, I know yields are inverse to bond prices but then if bond prices are up then wouldn't that be bearish? Like, lots of people want to buy bonds. But wait stocks soared today on a huge rally so... bonds and stocks went up?

wtf

Racket wrote:

Ghost of Igloi wrote:

In regards to Treasury yields, as fund flows out of stocks drives bond prices higher and yields down. Money moving globally from areas of lowering yielding bonds also drives prices here at home higher as well.

Right, I know yields are inverse to bond prices but then if bond prices are up then wouldn't that be bearish? Like, lots of people want to buy bonds. But wait stocks soared today on a huge rally so... bonds and stocks went up?

wtf

Everything doesn't work the way it should on paper...doesn't work that way.

agip wrote:

the global economy is not weak and hasn't been weak. it is showing some signs of slowdown, is all.

Apple said chinese werent' buying their smartphones. Some of that was b/c the chinese gov't told people not to, some of it is that apple is just way overpriced for most places. There is some slowdown in china.

So...how exactly does that mean we'll have a weak earnings season? Sure, companies that depend on China. But we saw huge health in the US consumer over the holidays, and europe is fine, if a little slower than last year.

Personally I'm probably going to play AMEX or V on earnings because if people are making more money then you can bet they're going to be spending it. Plus they have no exposure to China really.

Here's the thing though, why are companies like Home Depot and Lowes in a bear market right now? They have no exposure to China either but Lowes is closing up stores. I think it's silly to think that if Europe and China are slowing down then the US is somehow insulted. I'm not saying we're recession bound but Q4 GDP is already being forecasted at 2.6%

agip wrote:

Racket wrote:

Wait just a god damn second here.

Are treasury yields lower than the Fed funds rate right now??? Are you kidding me with this bs?

Fed Funds overnight rate: 2.5%

2 yr treasury rate: 2.5%

5 yr treasury rate: 2.49%

10 yr treasury rate: 2.66%

that's the free market saying that inflation is not a thing right now.

of course, the free market can and will be wrong at times.

So why would anyone have any incentive to buy a 5yr right now lol

Ghost of Igloi wrote:

DGTD Contrarian Indicator alert! wrote:

Sounds like a BUY signal!

Boy, has your advice sucked lately.

LOL. Whose advice has sucked? You are routinely bad at stock picking.

Earnings Scorecard: For Q4 2018 (with 4% of the companies in the S&P 500 reporting actual results for the quarter), 89% of S&P 500 companies have reported a positive EPS surprise and 67% have reported a positive sales surprise.

DGTD Contrarian Indicator alert! wrote:

Ghost of Igloi wrote:

Boy, has your advice sucked lately.

LOL. Whose advice has sucked? You are routinely bad at stock picking.

You are an idiot, the stock is still down $39 from where he bought it. Now that is bad stock picking and not me. Besides likely to be $120 by July 1st.

agip wrote:

Ghost of Igloi wrote:

EPS has peaked this cycle.

EPS *growth* has peaked in this cycle, but not EPS.

Earnings Growth: For Q4 2018, the estimated earnings growth rate for the S&P 500 is 11.4%. If 11.4% is the actual growth rate for the quarter, it will mark the fifth straight quarter of double-digit earnings growth for the index.

agip,

In October the IMF downgraded their global economic forecast right at the time our market headed down. International markets began declining one year ago. I suspect these numbers will continue to weaken and it is far more than trade policy and high priced smart phones. You are pretty big on the “market being forward looking” yet you are quick to discount those same signs when it runs counter to a Bullish narrative.

Igy

Racket wrote:

Ghost of Igloi wrote:

In regards to Treasury yields, as fund flows out of stocks drives bond prices higher and yields down. Money moving globally from areas of lowering yielding bonds also drives prices here at home higher as well.

Right, I know yields are inverse to bond prices but then if bond prices are up then wouldn't that be bearish? Like, lots of people want to buy bonds. But wait stocks soared today on a huge rally so... bonds and stocks went up?

wtf

No bonds went down today: BSV, BIV, BLV, AGG and TLT.