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re: What is keeping the stock market up?
Posted on 11/18/21 at 8:22 am to burger bearcat
Posted on 11/18/21 at 8:22 am to burger bearcat
Obviously, there are many reasons some of which have been posted here. One reason is that multinational corporations are making BILLIONS AND BILLIONS of dollars off of Chinese slave labor. That is what the Brandon Presidency is all about and why China made sure that the Dims could engage in MASSIVE F*CKING VOTER FRAUD to put this dementia-riddled, corrupt piece of f*cking FILTH in office. Trump was trying to put an end to the slave labor gravy train.
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Posted on 11/18/21 at 8:22 am to burger bearcat
quote:
Shouldn't we expect the FED to raise rates as inflation skyrockets? What is causing them to keep rates low?
Raising rates would INCREASE inflation right now
Posted on 11/18/21 at 8:25 am to burger bearcat
Savings accounts are paying a tad above nothing, so where else do you put any money you've saved?
Posted on 11/18/21 at 8:36 am to burger bearcat
quote:
What would cause the market to downturn?
First of all, it is impossible to predict when the market will go down, or up for that matter.
But we can say with certainty that lower interest rates will put pressure on stock values to rise as companies can grow faster with cheap cost of debt and investors see and expect higher future cash flows for those companies they are investing in.
On the flip side, as interest rates rise, the cost of debt to companies goes up and their growth is slowed relatively. With slower growth comes an expectation of lower cash flows by investors thus stock prices will be under pressure to go down or at least not grow.
Rising interest rates affects far more in the economy than just stock prices of public companies, but the stock prices changing as interest rates change is one of the first things to happen historically.
Without a doubt, low interest rates are what is keeping the stock prices up right now. Companies are growing and people are consuming more as the cost of both company and personal debt are historically very low.
Because all resources are not in infinite supply (labor, raw materials, energy, etc) but companies and consumers are demanding more resources than ever, thanks to cheap debt, we are seeing prices of those resources rise rapidly. This is inflation.
Either inflation eventually kills demand and the stock market drops or interest rates go up and the stock market drops. But it will happen eventually. The FED and everyone in government are trying their best to prevent a "drop" but instead do thing so gradually that the effects are smoothed out over a long time and no one really feels any pain. Even now Powell announced that they are starting "TAPERING" in rates which is language to describe a gradual change in rates so as not to spook the market or cause any rapid changes to the economy for fear of other repercussions.
Posted on 11/18/21 at 9:05 am to WizardSleeve
Tapering is rolling back the amount of bond purchases. You won't see interest rates rise until the market proves they can obsorb less easing, and that will take several years if not 5-6. It took us 3 rounds of QE from 08-15 before they were able to start raising rates. This time around the timeline will be much different but I'm not sure if that means a quicker cycle or an extended dragged out one that last 10 years like the EU has been doing. Then we lasted about 3 months of tightening before the corporate bond market broke 
Posted on 11/18/21 at 9:06 am to burger bearcat
Don't know, but you still get mugged when you go downtown.
Posted on 11/18/21 at 9:38 am to burger bearcat
as long as they keep printing money it will stay up so its as fake as bidens presidency
if you are asking how long it can last i think thats sometime after christmas when inflation and supply shortages start to hurt. at that point they can no longer print enough money to stop the correction and then its going to be a market correction on the levels of the great depression
that said, i have no idea where to put your money if you get out of the market, inflation may eat it up as fast if not faster then your loses in a major market correction
i plan to convert to all cash by new years then sit it out until after the blood bath even if that means sitting on the sidelines until after mid terms
if you are asking how long it can last i think thats sometime after christmas when inflation and supply shortages start to hurt. at that point they can no longer print enough money to stop the correction and then its going to be a market correction on the levels of the great depression
that said, i have no idea where to put your money if you get out of the market, inflation may eat it up as fast if not faster then your loses in a major market correction
i plan to convert to all cash by new years then sit it out until after the blood bath even if that means sitting on the sidelines until after mid terms
Posted on 11/18/21 at 9:45 am to real turf fan
quote:
Savings accounts are paying a tad above nothing, so where else do you put any money you've saved?
This really can’t be stated enough. By default equity investments have replaced savings accounts, CDs, etc. The Fed propping up the market is almost akin to FDIC deposit insurance. People can’t lose their savings and 401Ks.
Posted on 11/18/21 at 9:50 am to keakar
quote:
i plan to convert to all cash by new years then sit it out until after the blood bath even if that means sitting on the sidelines until after mid terms
Are you suggesting selling off and going to cash? Think you need to run some models on the capital gains taxes and inflation you'll hit in that scenario. That cost may be a bigger hit than a 40% market pullback.
Plus trying to time the market like that you usually miss out on the big recovery days. Fidelity posted some research that shows that during 30 years of investment most of the gains in those accounts can be attributed to 7-10 specific days in the market. Miss one of those days and you are out a large portion of your gains.
Posted on 11/18/21 at 10:21 am to burger bearcat
Just my guess:
If you've got some extra money you can:
a. Build a new house (bad time for that)
b. Buy a new car (bad time for that)
c. Put it in a savings account (and get zero interest)
or
d. Buy stock (that's what I do)
If you've got some extra money you can:
a. Build a new house (bad time for that)
b. Buy a new car (bad time for that)
c. Put it in a savings account (and get zero interest)
or
d. Buy stock (that's what I do)
Posted on 11/18/21 at 10:33 am to burger bearcat
The evil Fed and their money printer. It sure as hell ain't you and me pumping this bubble.
Posted on 11/18/21 at 10:44 am to burger bearcat
quote:
What is keeping the stock market up?
People believing their stock has value
quote:
What would cause the market to downturn?
People not believing their stock has value
Posted on 11/18/21 at 11:46 am to GeauxFightingTigers1
The stock market is such bullshite anymore. It is just rich people looting money by using the Fed. If they didn't inflate the money supply the stock market would be like 8% of what it is now based off the lossed value of the dollar since the Fed has controlled the dollar.
Posted on 11/18/21 at 11:57 am to burger bearcat
Riddle me this, Batman: If inflation runs at 10% under Biden and the Stock Market grows at 5%, is that still UP?
Posted on 11/18/21 at 12:01 pm to burger bearcat
quote:
What is keeping the stock market up?
Inflation
Posted on 11/18/21 at 12:10 pm to burger bearcat
quote:
I know it had a little downturn this week, but generally speaking has been doing decent. Is this just a matter of money being printed and artificially put into the economy?
The Fed is buying 100b+ per month in the bond market.
When they slow or stop, rates will rise. Higher yields means lower prices (bond is worth less).
Short term rates are near zero.
Would you be willing to put money in the bond market knowing it will be worth less?
Posted on 11/19/21 at 11:12 am to RolltidePA
quote:
Are you suggesting selling off and going to cash? Think you need to run some models on the capital gains taxes and inflation you'll hit in that scenario. That cost may be a bigger hit than a 40% market pullback.
are you honestly trying to suggest that staying in and losing 40% of your entire investment capital is better then moving into cash and then buying back in after the crash
the only way what you said makes any sense is if the market comes back 100%, and then goes up another 50% higher then it is today after that and thats never happening and after the huge correction we most likely will be in an extended recession for years
buy low sell high isnt just a slogan, its investing 101
i never once lost money, EVER, by taking my profits and waiting for an obvious upcoming market correction to get back in
This post was edited on 11/19/21 at 11:31 am
Posted on 11/19/21 at 11:13 am to burger bearcat
quote:Inflation
What is keeping the stock market up?
Posted on 11/19/21 at 11:19 am to bbvdd
quote:
Would you be willing to put money in the bond market knowing it will be worth less?
Just curious - do you think you're smarter than the aggregated knowledge of the global bond market?
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