If the Fed actually goes +1.75%, the economy will royally crash and they will start cutting by early next year.....perhaps Q2.
OT: Stock and Investment Thread
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The damage is done though, if this is the new benchmark price point and wages have not increased nearly enough to offset the last 1.5 year inflationary runup people won't have the same level of discretionary income to inject into the economy.
Just wait until the northeast has 600-1000 dollar a month heating bills for a 2000 sq foot home this winter.
That's what I meant.....another 1.75% in total. That would crash the economy hard.
Wages have increased plenty over the same time period.....and actually outpaced inflation for lower-income folks. I saw a chart that shows real wages are only down 3%'ish YoY. Down a bit, but not too much.
Everything I buy now is in increments. This market is definitely going lower. I just don’t know if the low is 2,3, 6 months out, or 1 to 2 years. I would bet that ADBE low is closer to PE 25. Most of my buying start at the stock 52 week low, just being caution.
Cramer had to use his fund to buy the Treasuries, thought it was a better buy, instead of DCA into the S&P especially if he thought there was going to be a significant drop in a couple of months. I’m sure he’ll go back to buying the S&P funds later on.
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Dave you seem to have a bit of knowledge re market behaviors, is this just a hobby or also a profession? Asking out of respect for the knowledge.
Hobby for 45 years and something to do in retirement. I think you also have to have an open mind, most think there only one way of making money. I don’t follow most rules.
Incompetence on all fronts by admin and fed has led to this debacle. “Transitory” moron missed what everyone else saw coming.
Fed was late by nine months I agree. If we didn’t have Fed missing the mark and didn’t have the supply chain issues, inflation would be much much lower and the Fed would be done hiking by now. Some might be upset that their stimulus checks weren’t accompanied by a signed letter…like they were with the former guy.
Not sure what the signed letter has to about anything, as that comment seems to have come out of nowhere.
In addition to what you outlined, I would add that the current administration has added fuel to the fire by out of control spending. The Inflation Reduction Act and college loan forgiveness are not going to lower inflation.
You can get up to 5K past that limit if you have a tax refund. $50 increments.
The fact that I see more interest in fixed income and other investments here is an example of what I mentioned some months ago....no more TINA. That's a new dynamic from the past decade.
I saw this last week. Is it accurate?
The roughly $2.8 trillion deficit in fiscal 2021, during which Biden was in office for more than eight months, was about $360 billion lower than the roughly $3.1 trillion deficit in fiscal 2020, Trump’s last full fiscal year in office
Biden (Manchin explicitly wanted this in the IRA bill and got it) is committed to reducing deficits. The TCJA expires in 2025 I believe so the top rate will go back up to where it was before (meaning sizable deficit reduction) if nothing is passed in the meantime. Condolences to the centimillionaires that read this…
right and wrong, this admin is spending out of control and the way to stop all admins is line item voting. That said, you are right that spending is too much but once given, hard to pull back. sadly, once Americans started thinking like Victorian Englanders this is the result. Giving money to the bs in Ukraine while Americans suffer is bs, borrowing to do so is even worse and yet its' rampant.
Thank God the world is fractured because once the world aligns on a basket currency standard, our standard of living goes 3rd world
there has no def reduction (in real terms) since reps stopped clinton in the mid 90s. Since then, it's all accounting
not making that last statement political merely a function of dysfunctional gov't. Thank God we're not a democracy otherwise we'd already be carved up into regional states
I don’t agree with the college forgiveness but most of the Inflation Reduction Act start in 2025 so doesn’t have anything to do with current inflation. Forbes, a conservative mag, basically stated that.
Yes you can redeem as soon as 1 year but if you redeem within 5 years you lose 3 months interest.
You need to hold for at least one year. Five years without penalty (lose three months prior interest) and up to 30 years.
And they may double down on dumb by using the same awful metrics now. CPI didn't probably report on the inflation surge in 2021 and is now missing the deflationary trends happening today. The Fed has to be smarter than this.....right? LOL!
BTW you can also gift an I bond to someone as long as their limit hasn’t been reached. It’s not related to you hitting your limit.
Similar to a 5-year CD (expect the 1-year lockout).
CDs are interesting. For Ally Bank.....12 months is 2.75%, 18 months is 3.00%, but anything longer of duration is barely higher. No need to lock-up your cash.
I just bought a five year CD at 4.25% with Oak View National Bank. It even has monthly payments!
For CDs you can get around 3% for 3 months, 3.5% for 6 months and just under 4% for a year from what I’ve seen online through a broker.
EDIT: just saw a couple at 4% for a year semi annual interest but basically they're all in the vicinity of the rates I mentioned give or take.
EDIT: just saw a couple at 4% for a year semi annual interest but basically they're all in the vicinity of the rates I mentioned give or take.
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Hmm, nice rate. Let me relook. We use Ally Bank and Capital One (5-year CDs):
Ally = 3.1%
CO = 3.25%
Okay, but not worth it yet.
When the interest rate move between 4-5% or more expect more retirees to move their money out of stock market into CD and treasuries. If it hits 5% I‘ll move a substantial amount. The utilities stocks will be crushed.
I've been waiting years for the utilities and thought finally they might come down but they haven't. Not only have they not come down they're near ATHs? I'm like WTF lol.
They may get approvals for price increases but still how much growth can a utility have to justify the prices they've gone to, these are generally yield investments IMO. It made sense they went up when rates are low, it doesn't make sense when rates are going up like this. What do I need a utility for if I can get risk free rate of return elsewhere. There has to be premium if you're an alternative to risk free.
I've thought the same about Staples but those have come down some at least but not the utilities for whatever reason.
I would agree. Why take a chance chasing yield on a stock that could drop based on a weak earnings report. The risk for some of the CD's is that not all of them are call protected, especially one's with longer durations. So if interest rates drop, the banks can restructure their debt.
The other reality is that the rates often times don't even keep up with inflation but again, at least you don't lose money in the value of your investment.
The ones I mentioned above are all non-callable for their duration. As long you don't sell them early and hold til maturity you're good. Plus you can ladder them to help a bit.
Maybe you're not getting a real rate of return because of inflation but it's still better than a more negative return in equities.
Well today it did get into that 3800-3850 area of support I've mentioned in the past. We'll see if it holds or not.