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

[Burnette]

Originally Posted by fa63

For as strong as some say the economy is, the interest rates are already awful low (with possibility of going even lower for the holiday season)... The problem of course is that there won't be anywhere to go when rate lowering is actually needed, instead of the artificial propping-up that seems to be going on right now. And the yield curves have been more or less inverted for over a quarter now, for what that is worth.

It will be interesting to see how it plays out, but have some cash handy if you can!

Well, it's complicated. The economy is indeed strong, people are working and spending money and the market continues to run.

But you're right, with the debt being so high and the rate being so low we're in helluva shape when things go south.

Cash is king, be liquid enough to tap into it when it tumbles.

[Burnette]

As I've posted a few times now, the market would be soaring if not for the threat of European malaise, Brexit andvthe biggest one, the trade war with China.

This week we has a bull run that bounced us back from a rough August. The prime move of the market continues to be the trade war. The market dips when it heats up and rises when it cools down:

"On Friday, the Dow closed higher for an eighth-straight day – the longest such streak since May 2018 – and third consecutive week. And as hopes build for U.S.-China trade talks next month, the Standard & Poor’s 500 index is less than half a percentage point below its record high close on July 26.

The message? The trade war giveth, and the trade war taketh away.

Other forces are also at work. The world’s central banks, including the Federal Reserve, are cutting interest rates or enacting other stimulus measures to goose their economies and put a floor under stocks. U.S. consumer spending, the economy’s chief engine, continues to grow solidly. And long-term bond yields have climbed out of the depths, somewhat easing recession fears.

The Dow Jones Industrial Average closed up 37 points Friday at 27,219, while the Standard & Poor’s 500 index dipped 2 points to 3,007. That means both indexes were about 6% above their late August lows and less than 1% off their record highs in July.

So far in 2019, the S&P 500 is up a healthy 20%. That means an investor with $100,000 in a 401(k) plan at the start of the year has seen that nest egg grow to $120,000.

But keep this in mind: The broad stock index is just 2.6% above its year-ago level, meaning wild swings linked mostly to developments in the trade war and Fed interest rate moves have left the market largely treading water.

https://www.msn.com/en-us/money/mark...ord/ar-AAHg9fC

[jet sanchez]

Nothing to see here...

https://news.yahoo.com/york-fed-step...213915690.html

New York Fed steps into market to move interest rates

For the first time in more than a decade, the New York Federal Reserve Bank on Tuesday pumped billions of dollars into financial markets to keep short-term interest rates in line with the Fed's target range.

The emergency interventions on money markets -- one early Tuesday and another scheduled for Wednesday morning -- came as a sudden cash shortage drove up interest rates.

[joosttx]

Originally Posted by jet sanchez

Nothing to see here...

https://news.yahoo.com/york-fed-step...213915690.html

New York Fed steps into market to move interest rates

For the first time in more than a decade, the New York Federal Reserve Bank on Tuesday pumped billions of dollars into financial markets to keep short-term interest rates in line with the Fed's target range.

The emergency interventions on money markets -- one early Tuesday and another scheduled for Wednesday morning -- came as a sudden cash shortage drove up interest rates.

Iran’s plan is brilliant.

[robertbb]

What is Iran's plan?

[Burnette]

Originally Posted by robertbb

What is Iran's plan?

Iran's plan is to sell oil, it's a regional skirmish and Iran's plan and impact are more Saudi and oil market related.

Fron the article:

But for an array of reasons that converged on Tuesday, the financial system began to run short of cash, including large withdrawals due to corporate tax payments and the reduction in the Fed's holdings of government securities.

Increased bond sales as the federal government borrows to finance its operations have also helped drain cash from the system.

US lawmakers' delay in raising the federal debt ceiling earlier this year caused a backlog in Treasury debt issues since the government was not able to raise more funds, according to Bostjancic.

https://news.yahoo.com/york-fed-step...13915690.html#

[Burnette]

The Iran/Saudi Arabia conflict gets the news cycle but the trade war remains the prime mover of the market:

"The modest rate cut the Fed announced in July — its first in more than a decade — left its benchmark short-term rate in a range of 2% to 2.25%. It also raised expectations that it would follow with up to three additional quarter-point rate cuts this year.

So has a belief that oil prices will remain elevated, that inflation might finally be reaching the Fed’s target level and that the U.S. economy remains sturdy.

U.S. inflation, which has long been dormant, has begun to show signs that it is reaching the Fed’s 2 percent target and might remain there.

The most serious threat to the expansion is widely seen as Trump’s trade war. The increased import taxes he has imposed on goods from China and Europe — and the counter-tariffs other nations have applied to U.S. exports — have hurt many American companies and paralyzed their plans for investment and expansion.

https://www.apnews.com/aee55122667b40f78657a293ba2c83dc

[Elefantino]

This is what the market (in this case the S&P) looked like during the Watergate era.

Not saying that we are entering a similar point, because this far it's all speculation, but still...

[Mzilliox]

while this thread talks the imaginary and elevates the heavily miscalculated costs of doing business, climate strikes are happening world wide.

[Burnette]

Today stocks were down but so was oil and we're still up 20%.

Bull market is so resilient that wars and ham fisted captains struggle to kill it.

[Tony T]

Sad to say, but War is good for the stock market.

[sipmeister]

Originally Posted by mzilliox

selling out our nature is not cool. So yeah the choice is easy.

+1

[pbarry]

Originally Posted by Burnette

Today stocks were down but so was oil and we're still up 20%.

Bull market is so resilient that wars and ham fisted captains struggle to kill it.

Up 20% for the calendar year, but, not much better than even looking at year-to-year/12 months.

[Burnette]

Originally Posted by Tony T

Sad to say, but War is good for the stock market.

It's unfortunately true. Land, oil, money and gold wars churn economies.

Now, the trade wars are different animals but they too produce winner and losers, just hope we're on the winning side.

[Burnette]

Originally Posted by pbarry

Up 20% for the calendar year, but, not much better than even looking at year-to-year/12 months.

The bull has been running for so long it's looking lean

Seriously, we've been up for a record amount of time.