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

independent.co.uk

41–50 of 185 posts

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

#41
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 US is losing innovation talent, guest laborers, export markets, and allies. The federal workforce contributes to the economy, and many federal programs have strongly net positive economic impact.

We have threatened to militarily invade 3-4 countries in the last month and publicly betrayed Ukraine. We have instigated trade wars with 3, including our contiguous neighbors who have been remarkably stable friendly for a century. No country will depend on our technology if it can be removed on the whim of a single person who has demonstrated a willingness to abuse this power. Same for our defense industry. Same for military and economic alliances. Countries won't want to import our goods if the regulatory framework ensuring their quality and safety is dismantled.

I agree with you that today is more a move based on perception than a change in current fundamentals, but I also believe this the beginning of a re-rating of the US as a superpower and it has a very, very long way to run,

edit: I'm not going to vouch for the dead reply. But they jokingly say "if you need an f 35 you'll buy it" as though they missed the news this weekend https://eutoday.net/germany-concerned-over-f-35-kill-switch/. The economic impact of that program is projected to be close to $100B per year on its own beyond the value of airspace superiority. There are already signs of purchasers reconsidering.

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

#43
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…

> There are no major economic indicators flashing red. High levels of corporate monopolization, high levels of stock buybacks, and low to no wage growth. They've been flashing for so long people don't even recognize them anymore.

> and low to no wage growth

Huh? There was "low to no wage growth" in the 80's and 90's. We do have wage growth now.

https://fred.stlouisfed.org/series/LES1252881600Q

Wage growth for over 25 no-college earners has been even better.

> high levels of stock buybacks

There's nothing economically dire, or even weird, about choosing buybacks over dividends in returning profits to shareholders. It just lets shareholders choose when to sell instead of doing it for them.

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

#44
post #4

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

I can't see how housing prices can drop substantially without the economy being in a rough spot. Banks will have a hard time writing home equity loans, underwater investors will tighten their belts, and worker mobility will be challenged as home owners (who have purchased in the past few years) can't sell their homes. The better hope is for prices to stagnate and incomes to rise. (not a great prospect, but better)

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

#45
post #4

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

Not for at least 10 years because government is propping up house prices with their holdings of MBS, although market has definitely softened in some places.

https://fred.stlouisfed.org/series/WSHOMCB

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

#46
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 surreal watching all the analysts stumble around trying to explain market behavior with half-baked explanations.

One says it's tariffs, another says it's "uncertainty", a third worries about "recession", others say "inflation" or "stagflation".

But none of them show logically or quantitatively how tariffs or "uncertainty" or vague, unsubstantiated worries about recession reduce the present value of future cash flows.

Meanwhile, the new regime's playbook is clear for all to see:

Deep cuts of 50% of more to government employment, selective default on government obligations, convert formerly independent institutions to ideological organs, devaluation of the dollar, and picking winners and losers based on ideology and diktat instead of merit and market forces.

If this is the playbook, who would want to own a broad basket of US equities instead of the politically favored names?

Why can't analysts connect the dots?

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

#47
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…

[dead]

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

#48
post #10
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?

If the Manhattan real estate market tanks he may change course. If it doesn't affect him, he's probably not going to care.

If he does change course, he's unlikely to call it a mistake. Politicians rarely admit mistakes.

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

#49
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…

Have you seen what was going on when Trump win was confirmed?

Stocks that day shot up. Now it is correction time both on going back to indicators instead of hype and correction based on newly elected administration actions instead of people hopes.

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

#50
post #3

To be fair I think this is long overdue. The fundamentals do not support the price of many stocks. Recently Tesla had more market cap than Toyota and many other established brands combined. No way in hell that is believable.

Tesla is way better positioned than Toyota in likely upcoming EV world, so capitalization is result of future expectations.

Yeah yeah. Diagram that out to its conclusion for us. The future where Tesla is producing more cars than Toyota at higher margins. What year will that happen?
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