OT - Dow plunges 1,175 - worst point decline in history

[oaklandhillsca]

I am investing in a new bike. The return I calculate will be fare greater then any stock or RE investment.

[Tony T]

Naz setting up to hit 12,000 soon, maybe tomorrow.
Wow......just wow.

[BobbyJones]

I wonder if we’re just seeing the haves spending more than the losses of the have nots?

Or are we still saying bubble as far as the markets are concerned?

[Ozz]

Originally Posted by BobbyJones

I wonder if we’re just seeing the haves spending more than the losses of the have nots?

Or are we still saying bubble as far as the markets are concerned?

I think we are seeing that the indices are made up of large companies and are heavy on tech which are doing well during the COVID problems....the markets are not the economy. To compare the two is disingenuous.

[el cheapo]

Just a heads up...Vanguard has converted Prime Money Market Funds into Federal Money Market Funds. They've gotten away from any investment other than federal instruments at 99% of the fund. I'm wondering if they don't see something coming? Could it be a ...turn out the lights the party is over...moment?

[echappist]

Originally Posted by el cheapo

Just a heads up...Vanguard has converted Prime Money Market Funds into Federal Money Market Funds. They've gotten away from any investment other than federal instruments at 99% of the fund. I'm wondering if they don't see something coming? Could it be a ...turn out the lights the party is over...moment?

The implication being a lot of loans will go unpaid?

[54ny77]

Exactly.

Companies are spending extraordinary amounts right now to have full or near full remote functionality. It's not an optional cost. It's a must-have.

Originally Posted by Ozz

I think we are seeing that the indices are made up of large companies and are heavy on tech which are doing well during the COVID problems....the markets are not the economy. To compare the two is disingenuous.

[verticaldoug]

Originally Posted by echappist

The implication being a lot of loans will go unpaid?

No, the implication is the small yield pickup you get by buying anything other than US Treasuries on the short end is not worth the credit risk. For incremental 10 bps , why risk your capital. That is the Vanguard position. These are not loans, but mostly municipal bond issued by states and other local tax authorities... With the Federal Government refusing to help bail out the states, and the budget short falls, it is prudent.

And for the stock market, the Chairman Powell told you at Jackson Hole Conference, asset price inflation be damned, we can run above target inflation until we get full employment.

There is no conversation about valuation anymore regarding the market, you are just in a momentum/liquidity driven rally.

When Walmart rallies 10%because it has a competitive product to PRIME, and AMAZON also rallies..... everything is accretive to everyone.....

[BobbyJones]

Originally Posted by Ozz

I think we are seeing that the indices are made up of large companies and are heavy on tech which are doing well during the COVID problems....the markets are not the economy. To compare the two is disingenuous.

I was referring to the IHS and ISM PMI's. Thoughts?

[C40_guy]

Originally Posted by 54ny77

Exactly.

Companies are spending extraordinary amounts right now to have full or near full remote functionality. It's not an optional cost. It's a must-have.

I know. Just look at the run up in ZM.

...and TDOC

...and AAPL (hey, everybody needs an iPad...)

[echappist]

Originally Posted by verticaldoug

No, the implication is the small yield pickup you get by buying anything other than US Treasuries on the short end is not worth the credit risk. For incremental 10 bps , why risk your capital. That is the Vanguard position. These are not loans, but mostly municipal bond issued by states and other local tax authorities... With the Federal Government refusing to help bail out the states, and the budget short falls, it is prudent.

And for the stock market, the Chairman Powell told you at Jackson Hole Conference, asset price inflation be damned, we can run above target inflation until we get full employment.

There is no conversation about valuation anymore regarding the market, you are just in a momentum/liquidity driven rally.

When Walmart rallies 10%because it has a competitive product to PRIME, and AMAZON also rallies..... everything is accretive to everyone.....

I'll add that i know I should just stay the course (and I mostly have), but with such a big difference in valuation and price, it makes me feel quite uneasy...

[verticaldoug]

Originally Posted by BobbyJones

I was referring to the IHS and ISM PMI's. Thoughts?

ISM PMI is really only telling you direction and not much more.
PMI of 50 means no change from previous month.

In FEB the index was 50 meaning no change from January. In march the index went to 48, meaning a small contraction in March. In April it went to 42, which meant a large contraction. In May, the index went to 44. This still means its contracting from previous month, but not as bad. In June, PMI goes to 50. This again, does not mean it improved, it means the conditions are now unchanged from May. In August, index does to 56, means the conditions are improving..... A 56 does not imply the activity > than Feb, it only says conditions are better than June...

Does this make sense? It implies a V shape recovery but not the size of the recovery. I'd expect the PMI to revert back to 50 in a month or so.

[Tony T]

Originally Posted by echappist

I'll add that i know I should just stay the course (and I mostly have), but with such a big difference in valuation and price, it makes me feel quite uneasy...

If you’re uneasy, just lighten up.

[Spoker]

Am I crazy to tel Merryl to convert all my investment to cash until after the elections.
(And I support Joe Biden).

[oldpotatoe]

Originally Posted by Spoker

Am I crazy to tel Merryl to convert all my investment to cash until after the elections.
(And I support Joe Biden).

I kinda did that..put a lot of $(relative, not really 'a lot') into lower yield, much more conservative places..like money markets. It's gonna get a whole lot crazier until November 3rd(if that's even possible)..and then the days leading up to January 21st will be even MORE nutz....Just hope some members of congress grow a spine.