Posted on 12/13/2023 12:46:02 PM PST by chuck allen
The Dow Jones industrial Average jumped to a record Wednesday as the Federal Reserve signaled it would cut rates several times next year, satisfying investors who hoped the central bank would finally start to acknowledge the slowing trend of inflation with a less-aggressive monetary stance.
The 30-stock Dow added 374 points, or 1%. At its high of the day, the Dow touched 37,057.81 to surpass 37,000 for the first time and exceed its previous all-time high in January of 2022. The S&P 500 jumped 1% with bank and real estate shares leading the way, while the Nasdaq Composite climbed 1%.
The central bank held the benchmark overnight borrowing rate steady in the 5.25% to 5.5% range as expected, but more importantly it forecast three rate cuts in 2024, which was more than it had previously indicated. Investors have been increasingly hoping for the Fed to give a clearer signal that it would start cutting rates next year with recent inflation data easing.
(Excerpt) Read more at cnbc.com ...
” (up to 3 times next year the FED said)”
The fed never forecasts their future moves.
Read later.
“Double top.
It means the same thing on Wall Street as double tap means on the mean streets.
You have been warned.”
OK. FYI: Double tops typically occur within a week to several months of each other — not years. Second, unlike the present situation, the second top or peak is almost always lower than the first top.
None of this makes sense to me. Why would anyone invest in stocks when short term bonds are paying 5%? I’ve seen articles saying the bulk of retail investments are already out of the market and hedge funds have been shorting it for awhile now and getting burned. This is all just the shenanigans of Blackrock, Vanguard, State Street, ect intentionally keeping the market up. So when the big boys start dumping the crash is gonna be epic.
*With todays close at 37,090 the Dow has risen 5,904 points during and despite of Bidens Administration. Up 19% in 3 years. It really is unbelievable it did that well.*
I just made $16k today! That settles it. I’m voting’ for Joe.
” I’ve seen articles saying the bulk of retail investments are already out of the market”
I doubt that.
I questioned that myself but it was reported by a mainstream outlet like CNBC or the equivalent.
“Excellent!”
In a one-dimensional world, it’s excellent. It’s a big number.
Now think about how much we’re paying for groceries, gas, etc., under Bidenomics. Considering inflation, we’re still behind the eight ball.
“but it was reported by a mainstream outlet like CNBC “
-————CNBC——————
CNBC Pro
Retail investors are buying the most stocks since March 2022. Here’s where they are going
PUBLISHED THU, DEC 7 2023 11:08 AM ESTUPDATED THU, DEC 7 202311:27 AM EST
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Sarah Min
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1. When those short term bonds mature, anticipate lower reinvestment yields when interest rates decline.
2. Stocks prices can increase 5% in a day, week, or month. Dividend stocks can provide an additional 4-6% annually beyond stock price gains. Higher risk, with potential for much higher returns beyond 5%.
Timing is everything. When did Glassman say the Dow would hit 36000?
Timing is everything. When did Glassman say the Dow would hit 36000?
Retail investors are sitting out the stock resurgence
https://edition.cnn.com/2023/12/07/investing/premarket-stocks-trading-retail-cash/index.html
Retail investor portfolios down 44% year to date
https://www.ft.com/content/406f65f9-8cf3-416f-9171-ea7b8da0348b
Its possible the article I read was dated and retail has jumped back in during the interim.
Give me a beer today-—I will pay you “Tomorrow”.
They most certainly do, and did today. See…
“ The Federal Reserve kept rates steady, maintaining the target range of 5.25% to 5.5%, in December, but traders’ attention turned to policymakers’ forecast for rate cuts — including three in 2024. The Fed’s dot plot of central bankers’ rate expectations calls for four more cuts in 2025 and three cuts in 2026.”
I think stocks are way overvalued based on a couple of metrics:
—Historic price to earnings ratios are way too high
—Higher cost of capital (up 5% in last two years) not reflected in stock prices
The market does not agree—for now—but even the most minor future events could bring those fundamentals back into play.
Depends on the stock. There are stocks out there with PE <15, manageable debt load and tasty dividends. They aren’t in the sexy tech sector.
Futures looking bright…
This discussion says it all—it is worth a read:
https://www.bogleheads.org/forum/viewtopic.php?t=411147
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