Is the stock market going to tank?

[PB]

No, saw that. Trump has just been waving his tiny dick, and Friday he's going to probably come out with what "sanctions" are being imposed.

FYI
Although I'm sure you meant to say that.

[pureantigravity]

Mobile oil tanks revenues are tanking.
Rail earning and volumes way down.
This is a good sign.

[Benny Profane]

Haha

https://daringfireball.net/2020/05/a...ap_translation

[climberevan]

I'm just a lurker here (and don't even invest), but I thought this article was fantastic. It really helped me to understand what's been going on lately. What Is the Stock Market Even for Anymore? https://nyti.ms/2yBgPgb

Exerpt: "Now consider this: Yardeni Research reports that in 2019 alone, U.S. companies in the S&P 500 bought back $728.7 billion of their own stocks, which is equivalent to 3 percent of the country’s G.D.P. Not only that: According to Goldman Sachs, buybacks constituted the single-largest source of demand in the stock market, which was also the case in two of the previous three years. This was a period in which the stock market gained around 65 percent. To the extent that buybacks helped fuel the run-up, it suggests that the market was really just a hall of mirrors."

Sent from my LG-US998 using TGR Forums mobile app

[4matic]

The fed has stepped in to do buybacks in lieu of companies albeit on the debt side.

[LeeLau]

The fed has stepped in to do buybacks in lieu of companies albeit on the debt side.

And without the benefits of equity or dividend participation! Isn't transfer of wealth great?

[f=ma]

I'm just a lurker here (and don't even invest), but I thought this article was fantastic. It really helped me to understand what's been going on lately. What Is the Stock Market Even for Anymore? https://nyti.ms/2yBgPgb

Exerpt: "Now consider this: Yardeni Research reports that in 2019 alone, U.S. companies in the S&P 500 bought back $728.7 billion of their own stocks, which is equivalent to 3 percent of the country’s G.D.P. Not only that: According to Goldman Sachs, buybacks constituted the single-largest source of demand in the stock market, which was also the case in two of the previous three years. This was a period in which the stock market gained around 65 percent. To the extent that buybacks helped fuel the run-up, it suggests that the market was really just a hall of mirrors."

Sent from my LG-US998 using TGR Forums mobile app

Yes, it's money from the corporate tax cuts.

[LeeLau]

I have given in to the inexorable power of the Fed. Bought LK at 2.06 after covering my short about there. Selling covered calls against it.

The call writers are aggressive. Getting 15% on the weeklies with just 5 days left prior to expiry. Just did this twice so far though

[St. Jerry]

I'm in the thick of the market on the banking research side and it really seems a bit surreal.

[bennymac]

That NYT article was interesting.

“Over 90 percent of the value of stocks is dependent on earnings more than a year in the future,’’ he said. ‘‘The market is very forward-looking.’’ Investors weren’t thinking six months ahead; they were thinking a year or two ahead, Siegel said, by which point the virus would probably have been brought under control.

[billyk]

That NYT article was interesting.

“Over 90 percent of the value of stocks is dependent on earnings more than a year in the future,’’ he said. ‘‘The market is very forward-looking.’’ Investors weren’t thinking six months ahead; they were thinking a year or two ahead, Siegel said, by which point the virus would probably have been brought under control.

I’m not sure that holds water. Was the market really looking more than a year ahead when it crashed in April? It was the immediate impact of shutting down the economy that caused that.

To me, the market has become a game, and any correlation to underlying values, either from current or future earnings, are tenuous at best.

The money has to go somewhere. And with interest rates so low, owning bonds makes little sense. You might as well keep it in cash with less risk than bonds.

Stocks are pretty much the only choice if you want the chance to make gains (other than maybe gold or bitcoin). With the Fed determined to not let the stock market crash, it doesn’t seem like that bad of a bet. But we’ll see.

[bennymac]

It crashed in March not April yeah? And it was a pretty dramatic crash but then had rebounded all the way back up. It might feel like late March was a long time ago but we’re talking about 2 months.

[4matic]

Dollar well off it’s high is good for stocks. it could mean a little more inflation which is also good for stocks. More than $1 trillion in corporate debt has been issued this year at low rates so financing is largely set at low rates with a fed backstop.


https://apple.news/AKlEiXUCETBCWMhO2cwdoTA


Corporations raise $1 trillion in the bond market amid Fed backstop, double the pace of last year

[billyk]

It crashed in March not April yeah? And it was a pretty dramatic crash but then had rebounded all the way back up. It might feel like late March was a long time ago but we’re talking about 2 months.

Yeah, you’re right, it was March.

[Toadman]

Dollar well off it’s high is good for stocks. it could mean a little more inflation which is also good for stocks. More than $1 trillion in corporate debt has been issued this year at low rates so financing is largely set at low rates with a fed backstop.


https://apple.news/AKlEiXUCETBCWMhO2cwdoTA


Corporations raise $1 trillion in the bond market amid Fed backstop, double the pace of last year

yeah, but is inflation good for the consumer?

[dunfree]

yeah, but is inflation good for the consumer?

And if they riot in the streets because they can’t afford to eat, the market will go up.

[4matic]

All that corporate cash was borrowed from the same people that will get increasing dividends from the equity. It’s genius.

[Ted Striker]

[Benny Profane]

I'm sticking to the theory that this market is being driven by all the gambling and sports gambling money that has been shut down, along with millions of middle class guys with a little bit to invest and nothing better to do. I've heard more than one smart person say it, including a recent Nobel winner, Richard Thaler. As you all know, it's really easy and cheap to do these days. I have read that all the online brokerage firms have seen big increases in enrollments.

So, therefore, we are in the shoeshine boy and taxi driver giving tips stage of market bubbling, if you want to compare it to 1929. Not good. I really fail to see the return for all the downside risk. Even if you believe that we're pricing ahead for the economy in two years, than you're thinking you're going to make, what, 15-20% each year until then? From where we are now, essentially the same levels as last fall, ten years into a bull market? With cities burning? Nope.

[Dantheman]

MINNEAPOLIS—Calling for a more measured way to express opposition to police brutality, critics slammed demonstrators Thursday for recklessly looting businesses without forming a private equity firm first. “Look, we all have the right to protest, but that doesn’t mean you can just rush in and destroy any business without gathering a group of clandestine investors to purchase it at a severely reduced price and slowly bleed it to death,” said Facebook commenter Amy Mulrain, echoing the sentiments of detractors nationwide who blasted the demonstrators for not hiring a consultant group to take stock of a struggling company’s assets before plundering. “I understand that people are angry, but they shouldn’t just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations. It’s disgusting to put workers at risk by looting. You do it by chipping away at their health benefits and eventually laying them off. There’s a right way and wrong way to do this.” At press time, critics recommended that protestors hold law enforcement accountable by simply purchasing the Minneapolis police department from taxpayers.

[dschane]

Stocks are pretty much the only choice if you want the chance to make gains (other than maybe gold or bitcoin). With the Fed determined to not let the stock market crash, it doesn’t seem like that bad of a bet. But we’ll see.

Iranians apparently agree:

https://www.economist.com/middle-eas...ng-stockmarket

[Toadman]

MINNEAPOLIS—Calling for a more measured way to express opposition to police brutality, critics slammed demonstrators Thursday for recklessly looting businesses without forming a private equity firm first. “Look, we all have the right to protest, but that doesn’t mean you can just rush in and destroy any business without gathering a group of clandestine investors to purchase it at a severely reduced price and slowly bleed it to death,” said Facebook commenter Amy Mulrain, echoing the sentiments of detractors nationwide who blasted the demonstrators for not hiring a consultant group to take stock of a struggling company’s assets before plundering. “I understand that people are angry, but they shouldn’t just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations. It’s disgusting to put workers at risk by looting. You do it by chipping away at their health benefits and eventually laying them off. There’s a right way and wrong way to do this.” At press time, critics recommended that protestors hold law enforcement accountable by simply purchasing the Minneapolis police department from taxpayers.

Is it wrong that I laughed at this?

[LeeLau]

I'm sticking to the theory that this market is being driven by all the gambling and sports gambling money that has been shut down, along with millions of middle class guys with a little bit to invest and nothing better to do. I've heard more than one smart person say it, including a recent Nobel winner, Richard Thaler. As you all know, it's really easy and cheap to do these days. I have read that all the online brokerage firms have seen big increases in enrollments.

Anecdotally this seems true. I've expanded my Covid scams screen generally to penny stock pump and dumps. I had thought these moonshot stocks would run out of momentum as traders got eaten up. But I was wrong and there seems to be a large supply of fresh meat for the kill.

[Benny Profane]

Jezuz, that second sentence. I had a professor in college that would have made your life hell for an hour for typing that.

[m2711c]

How much of this is being driven by the regular 401(k) and IRA contributions that every upper middle-class working stiff is paying on a regular basis?

I mean, they only get once a year to reallocate their assets and then they just deal with the shit that happens for the rest of the year, correct?

Isn’t that just pumping a shit load of money into the market every single month?

25% unemployment mean that 75% of the people are still working...