Is the stock market going to tank?

[JimmyCarter]

Jeremy Grantham is looking sage

Grantham has been making the same call every year for the past two decades though.

[dunfree]

Grantham has been making the same call every year for the past two decades though.

And passed up a ton of money doing so in the process

[JimmyCarter]

[DBdude]

I still like Bonds for the risk/reward. No way economy handles higher rates. Look at 2018 when 10y hit 3.20. Backlash will be worse now and already is. Mortgage rates will have a 6 handle next week.

Just because there are job postings in tech doesn’t mean they are going to hire or even interview. I’ve seen this several times. Companies not hiring is a bad look for Wall Street so they will always post openings even as they layoff.

It has to come. The decline in equity values, especially if it continues, forces companies to cut costs.

DXY up 1% today. MSFT already warned about fx hit and that is also getting worse.

what I wasn't clear about for everyone is that all the money the fed put out there over the last ten years and the stimulus and covid that a lot of it went into equities and some analysts think the markets in general are over priced by twenty percent.

another way of looking at it was there was so much money sloshing around that it drove the price of equities up and with the cash supply coming down and the problems with the supply chain and random shocks (the war in Ukraine) that the market is going to come down

I have never been much of a bear and haven't invested a lot but I do follow it

I need to make up for basically missing this bull market because I didn't put much away each paycheck because of my divorce

it was stupid

i need tp make up for lost time

momentum investing is not really my thing

[Cono Este]

Looks to be back on. The question is do we see lower lows?

I don’t see any evidence of capitulation. We’re along way from oversold anywhere. How much risk and leverage is in this mkt is anyones guess but that will determine the level of damage/opportunity to come.

Not an economist, but If it comes, I don’t see anything to give us a quick re bound. But I always say that and look what happens.

Still feel like it’s going to be 2-3 yrs before any chance of a new high in anything.


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[DBdude]

i see a lot of volatility

supposedly that is good for stock pickers

value investing and hold is what my undergrad classes taught

[Cono Este]

i see a lot of volatility

supposedly that is good for stock pickers

value investing and hold is what my undergrad classes taught

Vix is still under 30. Along way to go before anykind of sign of a panic. Been pretty systematic so far.


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[DBdude]

i meant to say volatility coming

[Cono Este]

i meant to say volatility coming

I believe you will be correct. Things may quieten down though latr this month. Pretty rare to have a wild summer, but maybe they just can’t hide it anymore.


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[DBdude]

.75 increase in the fed funds rate seems to be on the table

that will hurt the s an p average

[Cono Este]

.75 increase in the fed funds rate seems to be on the table

that will hurt the s an p average

Not an economist.

But it’s becoming clear that the days of PPP Loans and spending like a drunken sailor are quickly coming to an end.

I would think earnings forecast are gonna start to be revised much lower and it’s gonna be another wild ride but down.


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[Brock Landers]

Good entry point for bonds. Could inflation continue? Yep. But I think most of the rate movement has happened (and it’s been significant). 7.5% in high yield, 450 IG, could it go higher? Yup. But I think the real risk is inflation driving the Fed to turn the screws. And we are back to 150 on the 10. We get 2more cpi prints like today…10y rates maybe go to 350-400?

And holding onto my energy names.

[4matic]

Grantham has been making the same call every year for the past two decades though.

I know that. But if he timed his shorts right it’s still a positive return

[4matic]

Fun calculator. From 1997 (pre internet) to now total return is around 9% a year. With rates where they have been and are a long term rate of 7% would still be good so a lot more downside is certainly possible.

https://dqydj.com/sp-500-return-calculator/

[4matic]

In tech hiring for example, Microsoft announced a hiring freeze but still has 2500 open job listings on its website.

[4matic]

Duplicate

[rod9301]

Fun calculator. From 1997 (pre internet) to now total return is around 9% a year. With rates where they have been and are a long term rate of 7% would still be good so a lot more downside is certainly possible.

https://dqydj.com/sp-500-return-calculator/

Yeah, but right now the valuations are really high. Returns are measured peak to peak it trough to trough.

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[4matic]

Yeah, but right now the valuations are really high. Returns are measured peak to peak it trough to trough.

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Can pick whatever time frame you want.

From March 2020 to May 2022 the annualized reinvested return is 12%.

[Brock Landers]

Is may 2022 the trough?

[stalefish3169]

Yikes.

https://twitter.com/charliebilello/s...PGZnfNT0w&s=19

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[Kevo]

I'd like to better understand the idea that bonds won't continue go down in value as rates continue to rise. Isn't buying bonds at the moment a bet against further rate increases?

I have no idea where the bottom is for equities, but I've upped my automated bimonthly purchases of VTSAX in the anticipation of a further downturn or extended sideways time period.

I have an SGOL position. Anyone have any allocation into other commodities funds (I might have asked before)? Seems like the futures contracts commodity ETFs have a lot of inefficiencies, but I do like the idea of more commodity exposure.

[4matic]

Bonds have already priced in forward Fed guidance right or wrong. The 2yn added 20+ bp on Friday which effectively priced in an additional 25 points to what the market already perceived as terminal rate. So the cash bond market is looking out 24 months to the future. Your own perception of the future two years from now is what matters. Personally, I think we drop below trend growth and wages and employment will stall. The overwhelming risk in my view is a systemic risk to bonds due to QT and liquidity problems. A broken market. There are already some signs of that.

To me, a guaranteed 3% yield for 10y is attractive and is at a 10+ year high.

I also suspect a long sidewise equity market which is being forecast with a benign Vix in the face of these declines. Remember, the seventies was a long sideways slog for stocks as was the 2000’s.

Also, the 10y note rate is more than double the dividend rate on the SP 500.

[sirbumpsalot]

Good entry point for bonds. Could inflation continue? Yep. But I think most of the rate movement has happened (and it’s been significant). 7.5% in high yield, 450 IG, could it go higher? Yup. But I think the real risk is inflation driving the Fed to turn the screws. And we are back to 150 on the 10. We get 2more cpi prints like today…10y rates maybe go to 350-400?

And holding onto my energy names.

I've been short the 20yr since december and will continue to hold. +25% since...I think we will see rates in the 6-10% range. This is Jimmy Carter 2.0. Not because of what has happened, but because the telegraphed response. They are telling you they will double down on making it worse.

Spot on with energy...both oil/gas and utilities.

Good luck with you all investing!

[liv2ski]

To me, a guaranteed 3% yield for 10y is attractive and is at a 10+ year high.

Also, the 10y note rate is more than double the dividend rate on the SP 500.

3% yield and CPI is what? O ya, you're negative 5%. I shouldn't peak at your dumb ass comments.

[JimmyCarter]

Burry is a bit negative and all, but:

https://www.cherrycreekmortgage.com/lous-credit-news
This does not seem like something that is going to keep moving sideways for very long