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Wall Street sell-off turns 'ugly' as US recession fears grow

independent.co.uk

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Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#31

Post by alfalfasprout »

ericmay wrote: post #8
slaw wrote: post #4

Stock market bubble started slowly deflating. When is housing market bubble going to deflate?

Well the issue with housing doesn't seem to be a "bubble" in the same sense. It's moreso we aren't building enough housing so the supply is limited. With higher rates the monthly price is higher too which is contributing to un-affordability. But if rates go down then monthly payment prices would go down, which would cause prices to go up. If rates go down because there's a substantial recession home prices may go dow…

It becomes a bubble when suddenly people who paid a fortune for mortgages at sky high prices aren't able to pay them anymore. Or demand falls.

The market is currently tight but on both supply and demand. No one with a 2% mortgage wants to move. No one wants to buy at 6% interest.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#33

Post by uoaei »

cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

The stock market is, put crudely, a 'vibe check' on investor sentiments more than it is any indication of economic trouble per se, so your take is more reasonable than you let on.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#34

Post by throw0101b »

fn-mote wrote: post #14
throw0101b wrote: post #6

"Sadly" I don't really have much cash on the sidelines to buy more equities as prices dip as I generally don't try to time to market / buy the dip: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... I'm not generally 100% equities, often 80/20, so things will be rebalancing on their own at least at least: * https://canadiancouchpotato.com/model-portfolios/ * https://www.finiki.org/wiki/Asset_allocation…

> [...] buying low now would be nice. Just to be clear, the point of the linked article is that you cannot know that now is the LOW and not the new high.

> Just to be clear, the point of the linked article is that you cannot know that now is the LOW and not the new high.

And even if you did know ahead of time when the dip would occur, this article show it's still generally best to DCA instead of sitting in cash:

* https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#35

Post by noleary »

cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

I am not sure I agree that we lack major economic indicators flashing red.

For instance, GDPNow from the Atlanta Fed looks quite bad at the moment: https://www.atlantafed.org/cqer/research/gdpnow

I also have been looking at deliquency rates on industrial equipment leases lately, and they seem to be trending sharply upward: https://www.fitchratings.com/structured-finance/abs/equipmen...

Major retailers are also managing expectations for the next quarters. It seems like they're bracing for soft aggregate demand.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#37

Post by calvinmorrison »

bdcravens wrote: post #13
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.

so stocks are less related to individual company performance than they should be?

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#38

Post by LastTrain »

lazide wrote: post #10
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

Hah, do you think Trump can admit he messed up and change course?

Depends on which of his various manipulators are most effective.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#39

Post by michaelscott »

nabaraz wrote: post #22

S&P 500 is barely down (~9% as of this post) after returning 23% and 24% respectively in 2023 and 2024. I wouldn't call it ugly, as someone who lived through recession.

Agreed, this seemed inevitable. And as a bull, I don't even think we're close to the bottom for the year
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