A place to discuss all things ADM
11-14-2023, 01:46 PM
#7411
not that I care too much about ADMs other than an interesting manifestation of economics, but the markets are rallying because CPI is lower, causing yields to go lower, and yields are lower because it implies long term inflation is coming down. There's a reason a yield curve inverts when people think a recession is coming. no idea if we'll have a recession or just a soft landing but this rally isn't based on 'economy is booming', it's a relief rally that's based on largely shelter costs not continuing to shoot up (which has been a long time coming), energy prices dropping, and interestingly on car prices dropping (it's a CPI component)
And for those that have been paying attention, the earnings recession is over. After watching corporate profits decline for 3 consecutive quarters (since Q4-2022), it appears as though they are growing again with over 75% of the S&P having reported. Notice that an earnings recession is not to be confused with an economic recession.
And by the way, the yield curve has been inverted since late March of 2022 . . . essentially 19 months ago.
But those that are familiar with how this "indicator" works, understand that it's not the inversion that is meaningful.
It's the maximum point of inversion that is meaningful. On average, a recession will start 9 months later on average.
11-14-2023, 02:00 PM
#7412
It's a rally based on market perception that there will likely be rate CUTS in 2024 and the higher rates for longer mantra is false.
And for those that have been paying attention, the earnings recession is over. After watching corporate profits decline for 3 consecutive quarters (since Q4-2022), it appears as though they are growing again with over 75% of the S&P having reported. Notice that an earnings recession is not to be confused with an economic recession.
And by the way, the yield curve has been inverted since late March of 2022 . . . essentially 19 months ago.
But those that are familiar with how this "indicator" works, understand that it's not the inversion that is meaningful.
It's the maximum point of inversion that is meaningful. On average, a recession will start 9 months later on average.
And for those that have been paying attention, the earnings recession is over. After watching corporate profits decline for 3 consecutive quarters (since Q4-2022), it appears as though they are growing again with over 75% of the S&P having reported. Notice that an earnings recession is not to be confused with an economic recession.
And by the way, the yield curve has been inverted since late March of 2022 . . . essentially 19 months ago.
But those that are familiar with how this "indicator" works, understand that it's not the inversion that is meaningful.
It's the maximum point of inversion that is meaningful. On average, a recession will start 9 months later on average.
The following users liked this post:
WernerE (11-19-2023)
11-14-2023, 02:26 PM
#7413
It's a rally based on market perception that there will likely be rate CUTS in 2024 and the higher rates for longer mantra is false.
And for those that have been paying attention, the earnings recession is over. After watching corporate profits decline for 3 consecutive quarters (since Q4-2022), it appears as though they are growing again with over 75% of the S&P having reported. Notice that an earnings recession is not to be confused with an economic recession.
And by the way, the yield curve has been inverted since late March of 2022 . . . essentially 19 months ago.
But those that are familiar with how this "indicator" works, understand that it's not the inversion that is meaningful.
It's the maximum point of inversion that is meaningful. On average, a recession will start 9 months later on average.
And for those that have been paying attention, the earnings recession is over. After watching corporate profits decline for 3 consecutive quarters (since Q4-2022), it appears as though they are growing again with over 75% of the S&P having reported. Notice that an earnings recession is not to be confused with an economic recession.
And by the way, the yield curve has been inverted since late March of 2022 . . . essentially 19 months ago.
But those that are familiar with how this "indicator" works, understand that it's not the inversion that is meaningful.
It's the maximum point of inversion that is meaningful. On average, a recession will start 9 months later on average.
The following users liked this post:
AlexCeres (11-14-2023)
11-14-2023, 02:27 PM
#7414
While I agree there are going to be rate cuts of some kind in 2024 I don't think they will be much. The fed knows they can use their balance sheet as a better weapon than rate cuts. The rates we've become accustomed to of the last decade (until 2023) are not historical norms and are abnormally low. My prediction (which isn't worth a damn) is rates might come down 50-75 bps next year and sort of normalize from there.
thus they wont be using it to "ease" any time soon.
11-14-2023, 03:32 PM
#7415
The Fed will not cut rates until inflation is in the low-to-md 2%. They'll keep rates higher than the markets think they will because the worst thing that can happen is that they cut rates and then inflation picks up.
11-14-2023, 04:31 PM
#7416
The stock market could go to ZERO and every S/T will sell at MSRP+. The stock market could go to ZERO and every Steel Rolex will sell at MSRP+. The quantity of "haves" in the world far outnumber the quantity of underpriced, luxury goods produced.
Why does it require this much discussion and guessing?
Why does it require this much discussion and guessing?
11-14-2023, 04:32 PM
#7417
IB Staff
11-14-2023, 05:05 PM
#7418
RL Community Team
Rennlist Member
Rennlist Member
The stock market could go to ZERO and every S/T will sell at MSRP+. The stock market could go to ZERO and every Steel Rolex will sell at MSRP+. The quantity of "haves" in the world far outnumber the quantity of underpriced, luxury goods produced.
Why does it require this much discussion and guessing?
Why does it require this much discussion and guessing?
I know it was hyperbole, but still ...
The following 5 users liked this post by ipse dixit:
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Manifold (11-14-2023),
maroli (11-14-2023),
welikethetrack (11-14-2023)
11-14-2023, 05:47 PM
#7419
Monthly CPI change in October was 0, and annually it’s about 3.5%. But tell me more about your prognostications for the future in ignorance of the present
11-14-2023, 05:49 PM
#7420
While I agree there are going to be rate cuts of some kind in 2024 I don't think they will be much. The fed knows they can use their balance sheet as a better weapon than rate cuts. The rates we've become accustomed to of the last decade (until 2023) are not historical norms and are abnormally low. My prediction (which isn't worth a damn) is rates might come down 50-75 bps next year and sort of normalize from there.
11-14-2023, 06:34 PM
#7421
Rennlist Member
This thread never fails to disappoint.
The following 2 users liked this post by 993TurboS:
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11-14-2023, 07:10 PM
#7422
I'm not making a prediction of where rates are going, when they are moving, or how low they'll go....all I'm saying is that the Fed won't reduce rates until YOY inflation is below 2.50%. Do you not agree with that?
11-14-2023, 08:06 PM
#7425
you know, the "cool" by product of hoping some of the ying yangs in here get their wish of no ADMs is that this ADM thread would no longer be needed and we could delete it....but then the dumpster hilarity would be gone and we would be stuck talking about plaid seat inserts for our buckets....