Discussion ***Official*** 2022 Stock Market Thread

[jpiniero]

Speaking of Tesla, it's down 11% today.

 

[FelixDeCat]

It's official... the US stock market is toast.

 

[Roger Wilco]

Thanks again Vlad!

 

[jpiniero]

Thanks again Vlad!

Not Vlad, JPow. Or at least whoever deemed this the acceptable time to crush this so called "Great Resignation"

 

[FelixDeCat]

Not Vlad, JPow. Or at least whoever deemed this the acceptable time to crush this so called "Great Resignation"

This is all about inflation and the governments reckless spending that finally broke the camel's back. Powells stupid reluctance to normalize earlier in the cycle is also to blame....with the dumbassed phrases "we are not thinking about, thinking about raising rates" and "transitory high inflation" and "its the supply chain" and whatever else they blamed. Ukraine is just an excuse for democrats.

The worse part? Inflation is never "transitory" because prices never go back down permanently, they just stay up permanently. Powell knows this.

 

[jpiniero]

Powell doesn't give an F about inflation. That's why they didn't do anything about it earlier.

 

[zinfamous]

Trump tariffs also represent about 1.5% of the current overall price inflation. Oh, and decreasing GDP and job loss. All part of the plan, though.

So, that's nice.

Tracking the Economic Impact of the Trump Tariffs

The tariffs amount to an average tax increase of $1,200 per US household in 2025.

taxfoundation.org

U.S. manufacturers blame Trump-era tariffs for inflation's rise

Companies appeal to Biden administration to roll back the tariffs.

www.marketwatch.com

Economists urge Biden to tackle inflation by easing Trump-era tariffs

WASHINGTON (TND) — There are few levers left for President Joe Biden to pull that would address the current inflationary pressures impacting every corner of the American economy. One of those levers is lifting tariffs. Caption: Economists urge Biden to tackle inflation by easing Trump-era...

abcnews4.com

 

[dullard]

The worse part? Inflation is never "transitory" because prices never go back down permanently, they just stay up permanently. Powell knows this.

Inflation is never transitory. You are correct there. But, inflation rates can be transitory. No one was predicting that prices will go back down. They were predicting (incorrectly) that the inflation rate won't stay high for long periods of time.

 

[biostud]

If inflation

Inflation is never transitory. You are correct there. But, inflation rates can be transitory. No one was predicting that prices will go back down. They were predicting (incorrectly) that the inflation rate won't stay high for long periods of time.

What if it is started by a temporary shortage/price hike of energy? What happens when energy prices goes down again?

 

[dullard]

If inflation
What if it is started by a temporary shortage/price hike of energy? What happens when energy prices goes down again?

Like in the 1970s oil crisis that ended in 1980 and overall inflation kept going up? The inflation rate declined, but overall inflation went up. Only if you zoom in on a few exceptions for a few items for a short period of time do you see prices drop.

Consumer Price Index for All Urban Consumers: All Items in U.S. City Average

View data of the CPI, or an inflation measure derived from tracking the changes in the weighted-average price of a basket of common goods and services.

fred.stlouisfed.org

 

[FelixDeCat]

If inflation
What if it is started by a temporary shortage/price hike of energy? What happens when energy prices goes down again?

Food and energy are volatile. Absurd home prices, absurd rents and absurd car prices tend to be something we just get "used to".

 

[AdamK47]

A lot of good after hours earning reports.

 

[jpiniero]

Bad GDP report sends stocks soaring. Didn't seem to change the rate hike odds much so we'll have to see what the Fed says. Doesn't seem like they think this will change the Fed's mind.

 

[AdamK47]

The fed may ease their tightening based on the GDP data. The real driver of today's rally are all of the positive earnings reports.

A lower GDP generally results in lower stocks since investors look for growth.

 

[jpiniero]

The fed may ease their tightening based on the GDP data. The real driver of today's rally are all of the positive earnings reports.

Isn't that kind of contradictory?

 

[AdamK47]

GDP does not measure the stock market. It does have an effect on it though. It's personal consumption.

 

[AdamK47]

The earnings influence market sentiment. They show that it's not all doom and gloom.

 

[dullard]

Isn't that kind of contradictory?

It sounds contradictory, but once you look into details, it is not. The current-dollar GDP grew by 6.5% in the first quarter 2022. Thus, companies have a big increase in revenue that can be reflected in increased profits. But inflation grew by more; inflation grew by 7.8% in that quarter. Thus, real GDP (inflation adjusted) shrunk. It is quite possible to have increased profits at the same time real GDP has lowered. Also, remember things like housing price increases lower real GDP but don't impact profits for most companies.

There is also a common contradiction about bad news increases the stock market in times like this. Any news that might slow down the increases in the interest rate will be taken as positive news for stocks. So a bad GDP number will have a chance of slowing the interest rate hikes and thus will make the market move higher.

 

[jpiniero]

There is also a common contradiction about bad news increases the stock market in times like this. Any news that might slow down the increases in the interest rate will be taken as positive news for stocks. So a bad GDP number will have a chance of slowing the interest rate hikes and thus will make the market move higher.

That's kind of what I was saying. They just might be wrong this time. It's still double hike-triple hike.

 

[jpiniero]

Ouch Amazon. Currently down 9% AH.

 

[FelixDeCat]

Sell. Now.

 

[jpiniero]

Sell. Now.

Still got a long ways to go if the Fed is serious. QQQ is still 40% higher than before the start of the pandemic.

 

[ultimatebob]

Sell. Now.

Nah... this is the time to buy!

 

[FelixDeCat]

Still got a long ways to go if the Fed is serious. QQQ is still 40% higher than before the start of the pandemic.

QQQ fair value is $100.

 

[FelixDeCat]

Nah... this is the time to buy!

Buy to cover? Not right now.