Pull Back?

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Scorpio70
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Re: Pull Back?

Post by Scorpio70 »

The market typically dips prior to a Fed meeting.

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evilanne
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Re: Pull Back?

Post by evilanne »

Consensus at 2:00 EST today. From http://mam.econoday.com/byshoweventfull ... ek.asp#top
No rate hike is the universal expectation for the January FOMC, the last to be chaired by Janet Yellen. What to watch will be any indications whether strong economic growth and full employment are pushing policy makers toward four rate hikes this year vs the three that are already penciled in. The federal funds target is expected to hold at a midpoint of 1.375 percent inside a range of 1.25 and 1.50 percent.

Greenangle
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Re: Pull Back?

Post by Greenangle »

evilanne wrote:Consensus at 2:00 EST today. From http://mam.econoday.com/byshoweventfull ... ek.asp#top
No rate hike is the universal expectation for the January FOMC, the last to be chaired by Janet Yellen. What to watch will be any indications whether strong economic growth and full employment are pushing policy makers toward four rate hikes this year vs the three that are already penciled in. The federal funds target is expected to hold at a midpoint of 1.375 percent inside a range of 1.25 and 1.50 percent.
Good looking out evilanne!

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TSPTiming
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Re: Pull Back?

Post by TSPTiming »

Scorpio70 wrote:The market typically dips prior to a Fed meeting.
Actually, the data says exactly the opposite....

https://seasonax.com/news/fomc-meeting- ... g-right-no

It's the day after Fed announcements that the market is down more than 50% of the time, but that's usually a good buying opportunity...

http://jeffhirsch.tumblr.com/post/17031 ... lly-a-good
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http://www.tsptiming.com

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TSPsmart
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Re: Pull Back?

Post by TSPsmart »

I saved the FOMC price pattern for your viewing pleasure. It has been pretty consistent.

Not this time, but the Fed is now in a tightening mode. The 31st and the 1st trading day of the month usually have seasonal inflows. We need to watch what happens after that.

With interest rates rising, investors are shifting out of bond funds and into... stocks for now. But if the 10-year treasury keeps rising with no slowdown the market is going to get spooked.

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evilanne
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Re: Pull Back?

Post by evilanne »

Next meeting we will have new chair; update from 2:00 today
Highlights
There are no surprises in the outcome of January's FOMC announcement: no change in rates underscored by a 9 to 0 vote. But the description of inflation does get an upgrade, now said to be moving up and stabilizing around 2 percent sometime "this year". The prior FOMC statement in December described inflation as below target. Household spending, following the solid holiday shopping season, also gets an upgrade, from "moderate" to "solid" which once again are the assessments for employment and business spending.

The specificity of the inflation goal is subtle but it certainly doesn't point to any fewer rate hikes this year which are currently penciled in at three. The next FOMC announcement, on March 21, will update FOMC forecasts and include the quarterly press conference and debut of Jerome Powell as the new chair.

mindofmush
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Re: Pull Back?

Post by mindofmush »

TSPsmart wrote:I saved the FOMC price pattern for your viewing pleasure. It has been pretty consistent.

Not this time, but the Fed is now in a tightening mode. The 31st and the 1st trading day of the month usually have seasonal inflows. We need to watch what happens after that.

With interest rates rising, investors are shifting out of bond funds and into... stocks for now. But if the 10-year treasury keeps rising with no slowdown the market is going to get spooked.
With the safe yield on bonds at about 2.5% and the safe yield on stodgy blue chip dividend stocks over 5%, "investors" shifted out of bonds a long time ago and are waiting for interest rates to rise high enough to shift back into bonds as the safe haven.

I believe the FOMC will raise interest rates throughout 2018 if only to stay ahead of the EU. (This keeps US Treasuries more attractive.)

The slow economic growth/inflation (about 2%) gave us low market volatility which is a good thing (C fund return > 20%). But too much of a good thing brings out all the gloom & doomers saying the sky is falling, 50% correction in 2017, the market is going to get spooked,...

Zacks financial gurus said that when the economy hits the magic 3% growth, that long awaited massive correction will occur. If we get to 3% growth/inflation to soon, market volatility will rise. With tensions so high waiting for a correction, any major profit-taking dip will be overblown into a correction.

Maybe the gloom & doomers are right, because everybody loves bad news and fear sells.
mo meng, mo ching (which loosely means: no money, no life)

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evilanne
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Re: Pull Back?

Post by evilanne »

Why would market correct if we are over the 3% GDP when that would mean that the economy is humming along and companies are doing well? Doesn't make sense to me.

mindofmush
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Re: Pull Back?

Post by mindofmush »

The article in Zacks correlates the 3% Growth with higher market volatility which I agree with.

I don't believe that 3% growth/inflation is the magic silver bullet that will kill our evil Trump rally.
mo meng, mo ching (which loosely means: no money, no life)

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bamafamily
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Re: Pull Back?

Post by bamafamily »

I'm thinking pullback.... :-(
Bama

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MakeMe$$$$
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Re: Pull Back?

Post by MakeMe$$$$ »

bamafamily wrote:I'm thinking pullback.... :-(
I'm thinking a necessary and healthy pullback. See my other posts on this.

Still...after getting use to a rather stable upslope on returns it is disconcerting.
Don
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mindofmush
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Re: Pull Back?

Post by mindofmush »

It's a self fulfilling prophesy, all those people wanting a correction willed it to happen. Combine a little profit taking with the Apple haters dumping AAPL after a record quarter and a bunch of crazies buying into bond funds adds to the avalanche of dumpers.
Massive move into bond funds just as market gurus expect fixed-income to disappoint
January inflows to bond funds of $36.7 billion are on pace to hit a level not reached since October 2009, according to Trimtabs.
The massive move into bonds by retail investors can be partially explained by the annual portfolio rebalancing season and huge gains in stocks last year.
But the fixed-income bets come at a time when many bond gurus expect fixed-income to disappoint.
from CNBC

Maybe this will relieve all that gloomy pent up tension waiting for the crash. We'll call this the correction and move on.
mo meng, mo ching (which loosely means: no money, no life)

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evilanne
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Re: Pull Back?

Post by evilanne »

It's the Fed and QE unwinding, which always seems to frustrate me :twisted:

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