The Fed is determined to reduce inflation. More increases coming, how much further down does the market go from here?
Seems to me another 10% or so will happen due to the Fed waiting too long to start raising rates. Thoughts?
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(09-24-2022, 07:10 PM)bankerboy Wrote: [ -> ]The Fed is determined to reduce inflation. More increases coming, how much further down does the market go from here?
Seems to me another 10% or so will happen due to the Fed waiting too long to start raising rates. Thoughts?
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10% sounds reasonable, but it could be months away as the market is getting very oversold now. It rarely just goes straight up or down for long. The market usually starts recovering way before the economy, and the economy has barely suffered yet and rate hike effects lag for at least a quarter and maybe longer. Double bottoms are common. We may not have seen the first bottom yet. 40% corrections are extremely rare historically, so there's that. This isn't anything close to the GFC yet.
My crystal ball is still busted, but I think we're going to be in the churn for a good while longer. It would not surprise me at all if the S&P just swings around between 3400 and 4100 for a while. Feels like a disconnect to me between there being lots of good-looking buys here around 3650, but the "market" or indexes overall still feeling frothy / vulnerable. And of course black swans are the new normal, so...
Another Fed increase coming, still believe another 10% drop is really likely.
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(09-24-2022, 07:10 PM)bankerboy Wrote: [ -> ]The Fed is determined to reduce inflation. More increases coming, how much further down does the market go from here?
Seems to me another 10% or so will happen due to the Fed waiting too long to start raising rates. Thoughts?
Sent from my iPhone using Tapatalk
If this follows the typical bear market, while some stocks have gotten to pretty low valuations, many of the larger cap and companies thought of as "safe" are still trading relatively high. The last bear phase is usually when these more defensive companies finally sell off.
I've started tracking RYU. I have no interest in buying it but when its declines begin to outpace the overall market's, I'll start thinking we're getting close to the end.
We haven't reached the capitulation "anything but stocks" phase but we may be nearing the end of the "anything but growth stocks" phase. Hard to say for sure though. Fortunately there are indicators.