Can explain ?
Traditionally it should cause a cheap margin financing and upward stock movement
Traditionally it should cause a cheap margin financing and upward stock movement
Why do July interest rate cut cause market downward move?
- Thread starter Jason11111111
- Start date
Robert Morse
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In theory, the fed lowers rates when inflation is under control and companies need less expensive financing to spur growth in the economy. The fact that the Fed feels the need to do that mean GDP might fall and with it company earning.
We are at or near full employment but that does not tell the entire story. Many jobs pay little and have little training to make more than min wage. And, US government deficit spending is keeping the GDP artificially up. IMO, we need to focus on small businesses and give them opportunites to grow vs tax breaks to the larger ones.
We are at or near full employment but that does not tell the entire story. Many jobs pay little and have little training to make more than min wage. And, US government deficit spending is keeping the GDP artificially up. IMO, we need to focus on small businesses and give them opportunites to grow vs tax breaks to the larger ones.
well it SHOULD cause a down move because there was also a small probability of 50 bps cut priced in... and when it turned out to be 25 bps it was actually a 'miss' lol.... like earnings miss.
and of course there is also the verbiage in the Fed statement, which to me is just the market reading tea leaves... but people like to do it that way..
and of course there is also the verbiage in the Fed statement, which to me is just the market reading tea leaves... but people like to do it that way..
1) Like many things, interest rate cuts can be "priced in" before the announcement. Stocks soared for weeks before the cut (especially in June). So it did move prices up, just beforehand. Buy the rumor, sell the news
2) Some expected a larger cut (50 bp), though that was far-fetched. That's usually reserved for a real financial crisis, not a market top and strong economy.
If rate cuts/hikes were that easy, we'd all make a fortune trading them...
2) Some expected a larger cut (50 bp), though that was far-fetched. That's usually reserved for a real financial crisis, not a market top and strong economy.
If rate cuts/hikes were that easy, we'd all make a fortune trading them...
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That;
+ year to date SPY has had quite a run+ summer quarter tends to be weakest. In other words cant really predict it,
+ some times rate tightenings are not bearish.Am I saying the market is bigger than the FED?? Yes
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