Morgan Stanley: Markets may be starting to ‘sniff out’ a Republican sweep during midterms
-”That would argue more fiscal stimulus, more funding and that would cause rates to spike up,” Morgan Stanley’s chief U.S. equity strategist, Mike Wilson, says.
-He contends the stock market would likely take a Republican win positively initially, but would then sell.
-The prospect of the Fed raising interest rates more aggressively has been a major drag on stocks in recent weeks.
The Fed’s models for the economy leave a few things to be desired. The massive money printing that happened could not get the economy going. Nor could Government Spending. The reason Obama’s economy didn’t do anything is because of structural problems which are not impacted by money supply -things like taxes and regulations needed to be changed.
The Fed frequently causes recession by starting the interest rate raises too soon, or going too fast.
When the market gets to new highs day after day and bull is getting a bit long in the tooth, it may be getting close to a big drop.
I sold half of all my portfolio in Dec.2007, so the collapse didn’t bother me, I went out and bought some stuff cheap-like Ford for $4. Too bad, I did not have more cash to invest.
Anyway, I knew it was time to sell because when I went searching for value stocks, there were none-All were overpriced, so I knew the market was gonna drop later.
Another thing I did, after the cheap stocks I bought in 2008 had doubled in value, I sold half of them-return of principal. The rest I let ride to see how high it goes.