Why is the global economy tanking? Effects on November.

[cytg111]

And right up to the US election? (Does this belong in the conspiracy thread?).

I mean I get it, US job numbers disappointed a *little* bit, but overall the economy over all have been a juggernaut as of late, we've shaken the aftermath of covid, inflation is down, unemployment is still low. (and the uptick in unemployment is driven by an increase of the workforce, more hands to do more productivity? Is that a problem?).

The stock market went berserk

Until recently, investors cheered weak economic data as fuel for rate cuts. Now they fear the Fed may be too far behind.

markets.businessinsider.com

Takeaways:

1. Weak financial datapoints in US economy and a weak fed

• Weekly jobless claims increase 14,000 to 249,000
• Continuing claims jump 33,000 to 1.877 million
• Worker productivity rises at 2.3% rate in second quarter
• Unit labor costs increase at 0.9% pace in second quarter

2. Shit I dont understand (Or want to understand?)

- Concerns over "stretch valuation stocks"?
- Concerns over AI trading not paying off
- Concerns over "Sahm" rule, some nostradumbass shit.
- Concerns over "implied volatility for equity markets 'VIX'".


Sure as fuck sounds to me like the "creative finance people" is at it again.

And why the fuck is tech tanking over all?
Amazon growth rate was 5% yoy down from 10% the last many years - And that tanked the stock. Cause exponential growth or death I suppose?
What the fuck?

So, what's the outlook here and potential impact of the US election? Is this gonna level out over the next month or so?

 

[Stokely]

I'm not conspiracy-minded AT ALL....usually.

It probably is worth considering which party the ultra rich overwhelmingly favor. The reasons for this are obvious...things like a giant raise (tax 'reform'), relaxing of environmental restrictions, opposing labor, siding with management etc.

So they certainly have the motivation to get Trump back in there. I have no idea what they could actually do to make it so. Again, this is how conspiracy leads you down the black hole, each step seems plausible...

 

[repoman0]

The economy isn’t tanking at all, overvalued stocks are. Valuations were historically high based on AI hype and just needed something to induce some mass paranoia and get back to normal. One correction per year is normal but everybody forgets that when it happens.

Yes the fed is well behind the curve lowering rates but the market is doing their job for them — bond yields and mortgage rates are falling fast regardless of their slowness to act.

 

[Jaskalas]

Why is the global economy tanking? Effects on November.

Boom and Bust cycles have always occurred.
One cannot avoid the next recession forever.

As for impacts, depends how deep this goes. Correction or worse will determine how people feel about both the economy and the "people in charge".
Just too soon to know what this rabbit hole looks like.

 

[eelw]

Lol the orange monkey blaming Harris for the past 2 stock trading days

 

[Jaskalas]

Lol the orange monkey blaming Harris for the past 2 stock trading days

Well, when Trump took credit for Obama's economy, before Trump even took office.
That's how Foxnews got to spin the propaganda that Trump did amazing things for the economy.
Haven't stopped those lies, and was used for the campaign in 2020 and no doubt will continue to be used.

 

[Indus]

It's good this is in August and not October.

Give it time to correct and we'll be fine in October unless the market tanks 20% or more.

 

[gothuevos]

Lol the orange monkey blaming Harris for the past 2 stock trading days

Especially when he previously took credit for the record high stock market.

I will say, however, that the jobs numbers have always been a bit of a mirage the past few years. They constantly get revised downwards, and the vast majority of them are government jobs. The administration hasn't faced a lot of scrutiny for it since unemployment is generally pretty low and the market has been doing well. But it is a vulnerability if the GOP decides to attack the fine print.

 

[NWRMidnight]

Especially when he previously took credit for the record high stock market.

I will say, however, that the jobs numbers have always been a bit of a mirage the past few years. They constantly get revised downwards, and the vast majority of them are government jobs. The administration hasn't faced a lot of scrutiny for it since unemployment is generally pretty low and the market has been doing well. But it is a vulnerability if the GOP decides to attack the fine print.

why should they face scrutiny? They have been above expectations quite a bit, even after the adjustments. People like you are why the stock market is dropping, because they think in the moment without using a single ounce of critical thinking.

 

[MrSquished]

Because the casino that is the stock market is full of very short trigger reactive folks. Also the stock market is still on a very very high level, but we like to freakout, and the rich like it that way too, because they can play the long game if they have discipline.

 

[Leeea]

because the stock market has nothing to do with the economy?

 

[repoman0]

Okay here is a piece of the puzzle that I wasn’t aware of and didn’t understand. The Japanese yen carry trade unwinding:

Why the Markets Are Melting Down

And why it’s okay not to care

www.theatlantic.com

 

[UNCjigga]

Keep in mind that Japan had some of their own issues with investors taking advantage of low rates to game the weak Yen, so a local rate hike was always going to be an issue.

I get a sense that whales are moving markets around too based on FUD. LOTS of Covid going around right now—Iran likely making moves against Israel this week—Russian rockets landing in Romanian territory last week…perfect storm along with a weaker than expected jobs report and other signs. I’m still hoping it’s a bear trap vs. a real bear.

 

[gothuevos]

Okay here is a piece of the puzzle that I wasn’t aware of and didn’t understand. The Japanese yen carry trade unwinding:

Why the Markets Are Melting Down

And why it’s okay not to care

www.theatlantic.com

Yep, it's driving a lot of it:

https://thehill.com/business/4812098-stock-market-takes-hit-interest-rates/

 

[BonzaiDuck]

I really didn't expect this, but I was hoping for a reduction in the FED rate sooner this year. We'll have to wait for that.

Some wisdom from the pundit-class seems to be "Hold fast!" If things get consistently bad enough and there's no rebound, I'll pull my money back into my sweep-fund account and let it earn 4.7%.

I'm siding with repoman0 in these posts at the moment. It should just be a short-term adjustment. We'll see . . .

 

[Brainonska511]

If I recall, the market is still up 10% on the year. People freaking out over one day is nuts.

 

[BonzaiDuck]

If I recall, the market is still up 10% on the year. People freaking out over one day is nuts.

All the great Econ professors from whom I took classes always said "Be a long-run maximizer".

That means you should be patient and avoid panic. There are enough opinions from sound and reliable sources to suggest this is what it is: a short-term adjustment. We're pretty sure the FED will raise interest rates by maybe a half point, maybe in September.

Last week, maybe the week before, I dumped $30,000 from my sweep-fund account into my guided investment account. I've lost a few hundred clams in the last few days. I'm just going to let it ride and see if other projections about DOW futures for the forthcoming year are still reasonable.

 

[hal2kilo]

Seems Japanese loose their shit too readily. Nikkei is way back up today. Take deep breaths.

 

[Leeea]

And this entire thread is irrelevant as of today.

See folks, stock market and economy have nothing to do with each other.