Fed Minutes scared the market

[kashirin]

Quote from PohPoh:

You are wrong..
All markets are pricing in rate cuts..

Yes financial stocks begging for a rate cut
but is it possible with oil above 70 and real inflation approaching 10%, an d huge cash injections this month?

Yes chinese crap in dollar stores costs still a dollar
but what about food, medical services etc

It would be so irresponsible to cut rates and probably will put US into stagflation spiral

Fed must let goldman sachs die and start behave responsible

 

[makloda]

Quote from kashirin:
real inflation approaching 10%

I hear it's closer to 20% ... every month!!! The sky is falling.

 

[fundjunkie]

Quote from kashirin:

Yes financial stocks begging for a rate cut
but is it possible with oil above 70 and real inflation approaching 10%, an d huge cash injections this month?

Yes chinese crap in dollar stores costs still a dollar
but what about food, medical services etc

It would be so irresponsible to cut rates and probably will put US into stagflation spiral

Fed must let goldman sachs die and start behave responsible

There are no doomsday scenarios in play here. The market has been pricing in rate cuts, imminent cuts. The absence of such makes the risk of greater damage to the financial sector and hence the economy, so that's being priced in too.

The Fed's still focussed on the wider economy, as it should, rather than the troubles of the financial sector and that's got a few people running scared.

 

[piezoe]

Looks like the bounce is over for now and we can proceed on down to retest the prior lows in the 1400-1370 area. Then most likely, after some bouncing around, consolidation, and possibly a few more tests, we will be able to proceed on down to our ultimate destination, a 15-20% "correction." (Assuming no heroics from the Fed, of course, to save the necks of their brethren.)

What is quite interesting, to me anyway, is that in another thread Scriobinop makes a cogent case for why the inflation driven market should be able to move up in nominal terms, in spite of dismal prospects for the credit markets. He (she?) points out that in real terms the S&P has done nothing since 2003 and may be viewed as quite undervalued by historical precedent, but of course in nominal terms it has risen nicely. Thus it appears that in nominal terms, a fall such as the one we are almost certain to enjoy in the coming weeks, will be a dire harbinger of a really crappy business outlook going forward.

In other words, if we were to correct the "correction" for inflation we would discover that the correction is far more negative in real terms than it nominally appears to be. Of course we trade in nominal terms, not in discounted dollars.

I missed todays action until late in the day. I hate it when the market decides to move like this when i am away. What can be more fun to a trader than watching prices fall of a cliff.

 

[stock_trad3r]

Quote from piezoe:

Looks like the bounce is over for now and we can proceed on down to retest the prior lows in the 1400-1370 area. Then most likely, after some bouncing around, consolidation, and possibly a few more tests, we will be able to proceed on down to our ultimate destination, a 15-20% "correction."

LOL don;t get your hopes up too high. S&P will not retest 1370

 

[fundjunkie]

I haven't read the contribution of the respondant claiming that valuations are historically low so i don't want to say too much. However, I would have to enquire how much history is being referred to when making that assertion, and how said low valuations are being quantified.

Using convential measures, PE values, the markets are still overpriced in historical terms so applying overbought/oversold logic, at least in the secular sense, is nonsense.

 

[kashirin]

Quote from fundjunkie:

I haven't read the contribution of the respondant claiming that valuations are historically low so i don't want to say too much. However, I would have to enquire how much history is being referred to when making that assertion, and how said low valuations are being quantified.

Using convential measures, PE values, the markets are still overpriced in historical terms so applying overbought/oversold logic, at least in the secular sense, is nonsense.

Bloomberg mentioned stocks valuations are lowest since 1991. If we compare to 1980 S&P should be around 800 I guess

 

[Covertibility]

Quote from myminitrading:

MARKET FOR SUCKERS BUY HARD ASSETS NOW. LOOK FOR PROPERTY.

Don't bail now, what happened to Strong economic data=NO RATE CUT last week?

"can't have it both ways wallstreet cry babies."

"90% of wallstreet is crying for a rate cut, good economic data will make them look pretty stupid for crying so loud."

Good lord.

 

[Ubertrader]

Quote from stock_trad3r:

LOL don;t get your hopes up too high. S&P will not retest 1370

1364 target b4 retest (& final fail) of prevoius highs...the only issue is whether the blood spilt from a retest of the recent lows causes further panic selling & an additional 5-10% drop!!! Then it could be game over...but lets go with bull market correction for now until the mist clears.
Buyers should appear end Sep early October!!
peace & profit

 

[fundjunkie]

Quote from kashirin:

Bloomberg mentioned stocks valuations are lowest since 1991. If we compare to 1980 S&P should be around 800 I guess

Precisely, not enough history to make that kind of assertion. There are issues around using PE's to value the market vs history but the issues become insurmountable if one only uses 25 years of data.