Down goes the Dow

I'm exhausted and I need a drink

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Ghost of Igloi wrote:

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Racket wrote:

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Ghost of Igloi wrote:

HSGFX 2018 Performance +8.78%
TNA 2018 Performance -39.89%

Enough said.

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

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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.

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OK, then we agree, enough said.

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agip wrote:

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Racket wrote:

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agip wrote:

here's the thing. Why in the world is the ultra short fed funds rate higher or about the same as the 3,5,7, year treasury rate? The market has voted with its feet that the economy is slowing and inflation is a non-factor. Sure the market could be wrong. But it doesn't make much sense for an overnight rate to be higher than a 5 year rate decided by the free market.

for the fed to blithely ignore what trillions of dollars is saying and keep raising its rate...that would be major chutzpah. That's why the odds of further rate hikes are so against it happening. The market driven rates are saying the Fed is being too aggressive here.

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It seems to me that given strong jobs and strong wages, the broad American economy is doing well, and that's what the Fed should care about. The only part that isn't doing so well is the stock markets because they're pissed higher rates means they'll only get a 1 million dollar bonus check instead of a 2 million dollar bonus check.

I mean, this should be the absolute golden opportunity for the middle class. Strong jobs, strong wages, and affordable stocks to get in on.

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not sure what you are saying.

The only reason the fed needs to raise its interest rate is if it thinks inflation is building. that's it. If we can get 10% GDP growth, the fed wouldn't raise rates...if inflation was 2% and falling.

So right now the Fed is deciding if inflation is building. The free market has said 'absolutely not.' The 10 year at 2.6% tells us that. But the Fed has been saying 'absolutely yes.'

So for the Fed to continue to overrule the message from the free bond market and say 'we believe inflation is building and the free market is wrong' would be pretty nutso.

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Maserati wrote:

I knew this bounce would happen today

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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

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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?

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Ghost of Igloi wrote:

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

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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.

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Racket wrote:

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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.

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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

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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.

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agip wrote:

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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?

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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.

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Ghost of Igloi wrote:

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DGTD Contrarian Indicator alert! wrote:

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Ghost of Igloi wrote:

Like being down $43 on your AAPL. Enjoy the next 6 hours of trading Troll.

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Sounds like a BUY signal!

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Boy, has your advice sucked lately.

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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.

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DGTD Contrarian Indicator alert! wrote:

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Ghost of Igloi wrote:

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DGTD Contrarian Indicator alert! wrote:

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Ghost of Igloi wrote:

Like being down $43 on your AAPL. Enjoy the next 6 hours of trading Troll.

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Sounds like a BUY signal!

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Boy, has your advice sucked lately.

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

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agip wrote:

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Ghost of Igloi wrote:

EPS has peaked this cycle.

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

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agip wrote:

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Ghost of Igloi wrote:

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

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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.

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Racket wrote:

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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.

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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

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