Too many on here are cherry picking instances in history where the markets tanked once the Fed started cutting rates
They use three examples to back up their case…2001 and 2007 and 2019
Talk about cherry picking the worst examples…in 2001, the markets were in the thralls of the dot com bubble bursting…in 2007, the economy was about to implode from the subprime mortgage crisis…and in 2019, trade war tensions and a global economic slowdown were the main reasons for the market's decline…the markets would've tanked whether or not there were rate cuts…the Fed cutting rates was basically an attempt to administer CPR to an ailing economy
I'm usually bearish so don't think I'm wearing rose colored glasses in our current situation…the markets may go down for a variety of reasons from here on out…whether it being overbought or the last week of September being a bad month for stocks or the upcoming election uncertainty
But the objective truth is that the current economy is in nowhere near as bad a shape as it was in the above three time periods people are cherry picking to use as examples
Cherry picking instances where the markets started declining straight after rate cuts by the Fed is lazy and careless fundamental analysis…what about all the other times the markets rose after the Fed started rate cuts?
"Data from Ned Davis Research shows that, historically, stocks perform well in the 12 months following the first rate cut. Since 1974, stocks have been positive 80% of the time, with an average return of 15%."
Just look at the chart and come to an objective conclusion for yourselves…in most instances, markets were up in as little as three months after the Fed started cutting rates
https://i.redd.it/2zm6m35i0bqd1.png
Posted by fuglysc
11 Comments
Like the pimp so to his ho’s. Keep them coming.
The people who think the market is going down are all on this sub, and will lose their life savings if it retraces 5%. So I mean, it’s about par for the course.
The people who genuinely thinks the market will go down just because of a rate cut are the people who deserve to lose their money.
Bro went out of his way to make a post about my comment. I respect the grind
Every situation is unique, I don’t think your information has any merit
Interesting, what about elections ?
If you tell me my stocks will go up I’ll agree with you
Yes, but, aren’t we, globally speaking, in a situation similar to all three bad pick instances?
There’s an AI bubble on at the moment, noone can tell how big it could still inflate.
There’s never been so much debt in the world. Do you really believe it’s all prime assets backing it?
There is currently an economic slowdown mainly centered around China and the EU. With the potential to spread further. The trade wars are just sanctions with a differrent name.
So yeah, maybe there won’t be a recession in the good ol’ USA. The rest of the world? Who knows.
If we cut into normalization, bullish. If we cut into a recession like it’s happening rn, bearish.
I don’t know why people compare now to 2008. There’s a LOT of data that shows it’s nothing like 2008.
Also SP500 worst performance in H2 September and H1 october is mostly just because of 2008 single point data
Cope