The Stock Market thread

[bhlloy]

At this point even if the stock market does crash, Trump will just fire anyone involved in reporting that fact and say it went up.

[RainMaker]

Holy shit the dollar is tanking

[RainMaker]

I mean we have all lost 10% of our value since Trump took office but he is really accelerating things now.

[Atocep]

Originally Posted by RainMaker

I mean we have all lost 10% of our value since Trump took office but he is really accelerating things now.

There's so many bad economic indicators hitting all at once. It's almost like someone was intentionally tanking the economy.

[JPhillips]

Lunick says the government is looking at stakes in defense companies.

The beet harvest has never been higher, comrades!

[albionmoonlight]

SCOTUS placed Trump above all law. They only thing it asked in return was that he not mess with the Fed.

I'm surprised it took him as long as it did.

[Edward64]

Nice day for the markets. Crazy that we ended solidly green ... all things considered.

I've said it before so just a reminder, do not bet on any market/stock tips from me (other than eating black-eye peas + greens on Jan 1), I obviously don't understand the markets.

[RainMaker]

Originally Posted by JPhillips

Lunick says the government is looking at stakes in defense companies.

The beet harvest has never been higher, comrades!

This would be a good thing actually.

[Edward64]

Tough day for the markets but still nice month of Aug.

Overall, it's a good thing. I'm for a certain level of tariffs but not how Trump is just winging it. At the very least, the GOP House/Senate should be rubber stamping it.

What happens to Trump’s tariffs now that a federal appeals court has knocked them down?

The U.S. Court of Appeals for the Federal Circuit ruled Friday that Trump went too far when he declared national emergencies to justify imposing sweeping import taxes on almost every country on earth. The ruling largely upheld a May decision by a specialized federal trade court in New York. But the 7-4 appeals court decision tossed out a part of that ruling striking down the tariffs immediately, allowing his administration time to appeal to the U.S. Supreme Court.

On Friday, the federal appeals court wrote in its 7-4 ruling that “it seems unlikely that Congress intended to ... grant the President unlimited authority to impose tariffs.”

A possible alternative route for Trump

Trump does have alternative laws for imposing import taxes, but they would limit the speed and severity with which he could act. For instance, in its decision in May, the trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and to just 150 days on countries with which the United States runs big trade deficits.

SCOTUS will be busy ...

The Supreme Court will begin hearing cases for the term on October 6, 2025. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions by mid-June.

[RainMaker]

About to cut interest rates while the 30 year touches 5%. The 70's are back baby!

[Edward64]

Alright, Jerome. I know the odds are that you'll reduce rates in Sep, and talk now is not if but by how much & quickly. You have my vote to lower rates now.

At this time, the danger of Recession > Inflation. We'll probably still tip into one next year, and although Trump will blame you for it (e.g. being too slow), I think history will be kinder and point to tariffs and all the uncertainties.

[flere-imsaho]

You're asking Powell to do a tire rotation when you know the customer is going to take his minivan offroading at a rally event.

[HerRealName]

Perfect recipe for stagflation. I can't believe people voted for these idiots.

[flere-imsaho]

But the price of gas is do... wait, I mean the price of milk has fal... uh, one sec, the price of eggs are le....

Yeah, I got nuthin'.

[RainMaker]

Originally Posted by HerRealName

Perfect recipe for stagflation. I can't believe people voted for these idiots.

It is kind of sad how few people could pass an 8th grade econ course. People calling for a rate cut are just financially illiterate morons. The 30 year has been touching 5% ffs.

[Edward64]

Another US Jobs Markdown Sets Stage for Fed Cut, BLS Criticism

Economists at Wells Fargo & Co., Comerica Bank and Pantheon Macroeconomics expect the Bureau of Labor Statistics’ preliminary benchmark revision on Tuesday to show the March payrolls count was almost 800,000 less than currently estimated — or about 67,000 a month on average. Nomura Securities, Bank of America Corp. and Royal Bank of Canada say the downgrade could even be closer to a million.

Tue's March payroll revision may be fugly.

StanChart expects Fed to cut rates by 50 bps next week after weak jobs data

Markets are pricing in a 90% chance of a 25-bps rate cut next week and a 10% probability of a larger 50-bps reduction, according to the CME FedWatch Tool.

I really don't think Jerome will do -50 basis pts in Sep unless it's very clear the economy is much worse than expected. My guess is -25 in Sep and odds have gone up for another 2 x -25 for rest of year, for a total of -75 basis points.

re: stagflation, not near that yet ...

the era of "stagflation." In 1964, when this story began, inflation was 1 percent and unemployment was 5 percent. Ten years later, inflation would be over 12 percent and unemployment was above 7 percent. By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent.

[Edward64]

Originally Posted by Edward64

Tue's March payroll revision may be fugly.

Fugly

US job growth through March was significantly weaker than previously thought | CNN Business

The US economy added about 911,000 fewer jobs than initially estimated for the year ending in March, the Bureau of Labor Statistics report suggests.

If this were to hold – the final annual benchmark revision will be reported in February 2026 – it would be the largest annual revision to US jobs data on record.

[GrantDawg]

Again, didn't he fire the guy that gave him a bad job report and replaced him with this guy? What weirdness is going on?

[Edward64]

https://www.cnbc.com/2025/09/09/fed-...obb-pulte.html

A federal judge on Tuesday night blocked President Donald Trump from firing Federal Reserve Governor Lisa Cook as her lawsuit challenging her termination plays out in court.

Judge Jia Cobb’s order came nearly two weeks after Cook sued Trump to prevent him from removing her from the central bank.

“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” Cobb wrote in an opinion on her decision.

Great news. I suspect she did knowingly play games on her mortgage paperwork, but don't believe it rises to the level of being terminated by Trump.

He can replace Jerome in next 7-8 months and he'll have a +1 on the Fed board soon. Trump will want to take it to SCOTUS but he should just bide his time and enjoy the market highs (and blaming Joe on inheriting much worse than expected employment stats).

[Edward64]

Wholesale prices surprisingly fell slightly in August, providing breathing room for the Federal Reserve to approve an interest rate cut at its meeting this month, according to a Bureau of Labor Statistics report Wednesday.

The producer price index, which measures input costs across a broad array of goods and services, fell 0.1% for the month, after a sharp increase in July and well off the Dow Jones estimate for a 0.3% increase.

More breathing room for Jerome to cut rates.

I'm not sure why it fell vs increased. Haven't seen any analysis yet.

[JPhillips]

Unfortunately, we have to wonder whether or not the numbers are accurate.

[JPhillips]

dola

The Fed is really in a no win situation. Core inflation is running hot and we're losing jobs or flat in employment.

[Arles]

I wouldn't say inflation is "running hot". CPI rose 0.4% MoM (0.1% over expectation) and 2.9% YoY (as expected). Core CPI increased 0.3% MoM and 3.1% YoY (matching forecasts). It appears energy, aka gas, made up much of the increase over expectation - which makes sense in August.

I would say this indicates persistent but cooling inflation, which is exactly the cover a Fed rate cut would need.

[JPhillips]

.4% MoM over a year is 6% inflation. In April yearly was 2.3 and now by August it was 2.9. Core was 3.1 versus 2.8 in the Spring. Beef, apples, bananas, coffee all up.

It's not a crisis yet, but when the target is 2%, none of this is good.

edit: Core inflation is higher for the fourth month in a row.

[Arles]

US inflation:
August 2022: 8.3%
August 2023: 3.7%
August 2024: 2.9%
August 2025: 2.9%

I think it's clear that we will be in a range of 2.3% (April) to 2.9% (August) with the fall being on the higher end as we move forward (primarily due to energy costs) for the next few years. Given we were at 8% three years ago, it's nearly impossible to get to a consistent 2% without some form of economic complete collapse.

[PilotMan]

my opinion is that the economy has slowed substantially for some, not for others. The job market is in a bad spot, but inflation is largely under control. Things are still going up, and while 2.5% would be a much happier place to be, 2.9% is in the typical range. The market reaction to what is almost assuredly a 25 point cut bore out today. The mortgage lenders appear to have already priced in that to rates, as rated didn't budge today. If anything other than a 25 point rate reduction happens, I think that will be the only real thing that gets any sort of reaction now from the market, one way or the other.


edit to add that if the economy eats that 25 point drop and nothing changes, we could see some regular movement from the fed until it appears that things are rebounding again.

[Arles]

I think the rate move has already been priced in. Once it happens, I doubt much changes. If it doesn't happen - yikes! September is usually a bad month so sentiment isn't great already.

[Edward64]

Yes, I believe the .25 bps is priced in. But then, I've seen when Jerome talks right after the bps is announced, the markets tend to go down as he's talking. In other words, it also depends on what he says about forthcoming possible hikes (e.g. the vague Fed speak) and inflation.

Also, if Jerome does a .50 bps (odds are < 10%), I wouldn't be surprised if the markets react strongly.

Nevertheless, I'm going to enjoy the great past week and good 2.5+ months so far.

[Arles]

Sounds like Powell may do the 0.25 cut but then say no more cuts in December on Wednesday. If he does that, it will be a bloodbath in the market.

[Edward64]

Originally Posted by Arles

Sounds like Powell may do the 0.25 cut but then say no more cuts in December on Wednesday. If he does that, it will be a bloodbath in the market.

I've not read this? Do you have an article? He may hedge his words some but doubt he'll be clear cut.

Markets are still betting on 60-70%'ish .25 cuts in Oct & Dec per below.

FedWatch - CME Group

[Arles]

It's a worst case situation I've seen across a couple media platforms. My hope is he just does the 0.25 and leaves it open for December.

[RainMaker]

I feel like the worst case scenario would be hyperinflation.

[Arles]

Yeah, I meant in the short term for the markets. Stagflation, hyperinflation or keeping rates high to battle a boogie man of inflation that high rates doesn't change and tanks the economy are the three long term worst cases.

[JPhillips]

They can't follow the dual mandate in this case, they have to pick to improve inflation or employment. Their history has been piking inflation, but they didn't do that during Biden and inflation went way up.

Not an enviable position.

[albionmoonlight]

We just threw a ton of tax cuts at the economy, which I am told are highly stimulating. Seems risky to cut rates on top of that.

[RainMaker]

I really don't think a rate cut is going to do all that much. The issue is tariffs.

[Arles]

Cutting rates will do more than keeping rates where they are. When you cut rates, you spur on investment, job creation and commercial real estate because money is cheaper to borrow. Most of it is just mental, but a 0.25-0.50 combined rate cut for the rest of this year will not impact inflation at all but could help pull the economy out of the malaise it is in right now. Cutting tariffs would also help but the orange man isn't doing that any time soon.

[Arles]

Good news for the market: 0.25 cut today with the potential for up to two more cuts in 2025. Fed is more worried about unemployment and the economy than inflation.

[Edward64]

New Trump appointee Miran calls for half-point cut in only dissent as rest of Fed bands together

Good to see strong Fed consensus

[albionmoonlight]

Have fed Governors always dissented or is this just some new thing we deal with now?

[albionmoonlight]

The GOP got their rate cuts and they got their big beautiful bill. Personally, I think conservative economic theory is wrong. But I really hope that I am mistaken. I would love nothing more than a big booming economy.

The good news and any event is that we have a real life natural experiment. Rarely has one ideology so completely control the American economy. So we really get to see if it works or not.

[JPhillips]

Miran is such a fucking clown. He says interest rates should be 2.75% by the end of the year. That's almost a full point lower than anyone else.

[Passacaglia]

Originally Posted by albionmoonlight

The GOP got their rate cuts and they got their big beautiful bill. Personally, I think conservative economic theory is wrong. But I really hope that I am mistaken. I would love nothing more than a big booming economy.

The good news and any event is that we have a real life natural experiment. Rarely has one ideology so completely control the American economy. So we really get to see if it works or not.

All that's left is to figure out what it means to say it "works"

[RainMaker]

It'll be interesting to see what the new excuse will be now that rate cuts have gone through and not much will change.

[albionmoonlight]

Originally Posted by Passacaglia

All that's left is to figure out what it means to say it "works"

Low inflation
Wage Growth
Stock Market Gains
Low Unemployment

Basically all the things we were promised.

[Ksyrup]

Originally Posted by Passacaglia

All that's left is to figure out what it means to say it "works"

If it's positive, it works. If it's negative, it's Biden's fault.

[GrantDawg]

Originally Posted by albionmoonlight

Low inflation
Wage Growth
Stock Market Gains
Low Unemployment

Basically all the things we were promised.

Except businesses really dont want wage growth or luw unemployment. They will be fine stock market growth along with low wages.

[RainMaker]

10 year keeps moving higher. Cutting rates doesn't mean lower rates.

[Edward64]

Some post-rate cut analysis

Fed leaning towards 2 vs 1 more rate cuts this year but it was only by 10-9. This would imply at least 1 more rate cut this year.

https://www.cnbc.com/2025/09/17/here...-decision.html

Two more cuts this year, another in 2026 and one more in 2027, all of which would take the funds rate down to around 3%, which the median forecast of the committee sees as “neutral.”

Those wanting just one more cut this year lost narrowly, by a 10-9 margin, against those looking for two.

Also, 1 more cut in 2026, 1 more in 2026 and none in 2027. But probably not alot of weight to it, just have to see how the CPI/PPI and tariffs are working out.

Basically, more focus on (un)employment and less on keeping inflation down in the near term.

[PilotMan]

Originally Posted by RainMaker

10 year keeps moving higher. Cutting rates doesn't mean lower rates.

Guessing this had to do with the impressions after the vote about future cuts and the 7 who said no more cuts this year.