What happened to the stock market rally?
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Anonymous
| Not jumping anymore |
Anonymous
| Somebody broke the law- stonks are only allowed to go up! Who let them go down? |
Anonymous
| The market is petrified that Trumps policies will cause massive inflation and drive bond prices up, in turn raising borrowing costs for business. |
Anonymous
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Stocks fell on news of low unemployment (great!), which also means a booming economy, which also means the Fed might not want to lower interest rates again due to fears of inflation that usually go along with booming economies. The stock market LOVES lower interest rates. |
Anonymous
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It’s true that the Fed may be done lowering rates for a while, but the last six months of inflation have been under the Fed’s target, and wage pressure is under its long-term average.
The real inflation concern is the uncertainty about Trump’s policies. Basically, no one is certain about how broad and severe the tariffs and immigration curtailment/deportation will be and when they will occur. At their worst, both policies will be highly inflationary and very disruptive to the economy. For example, the construction and agriculture industries are massively dependent on immigrant labor. Also, broad-based tariffs will be broadly disruptive to supply chains, as producers try to change suppliers to evade tariffs. All this leads business to freeze their plans pending greater certainty, which is not a recipe for economic expansion. Sure, there’s talks of tax cuts, but without offsetting budget cuts (which are highly unlikely), those too are inflationary. So, it’s not about CURRENT inflation, but the possibility of UPCOMING inflation caused by the new administration’s policies that is raising long-term rates, despite the Fed lowering short-term rates. |
Anonymous
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Look at long term rates - they are up sharply. In short, the market is terrified about Trump inflation.
And yeah, his election lowered my end of 2024 stock performance by 6 percentage points. |
Anonymous
This. People are concerned about chaos. |
Anonymous
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Read Gillian Tett in the FT or scan Bannon’s rants on his podcast.
Remember Bessent is Bannon’s guy. Lutnik wanted the job. One of Estée Lauder’s granddaughters husbands was also on the short list. They are more moderate, if this word can even be used here. There is a whole lot of scary shit besides the tarrifs and immigration. Bannon regularly calls for blowing up the global financial system. Besssnt bet against the pound and the yen. This is why Bannon loves him. He sees Bessent as the guy who can disrupt the Brett on woods system. Bessent is on the record saying he’d like to do this. People close to trump hold so much crypto and gold that they don’t give a shit. Musk and the tech bros all want unfettered crypto. We are in trouble. |
Anonymous
| So why did the stock market rise right after the election? It isnt any as though Trump’s rhetoric has changed since winning. |
Anonymous
It was euphoria and also short covering (shorts need to buy stock to exit their shorts). Folks thought Trump was full of St about tariffs. Currently, he hasn't backed down. Look at the mortgage rates, they keep going up after the Fed cut interest rates! Big funds/pensions buying bonds for risk free return and selling their stocks. To all that think stocks never go down, you are going to learn something in 2025. |
Anonymous
+1 anyone who voted for Trump because of the economy and ignored everything distasteful about this awful man is about to enter the “FO” phase of FAFO |
Anonymous
Trump recently said he probably won't be able to do anything about inflation. Reality bites. |
Anonymous
Election certainty. There was a significant chance of the election being dragged out. The market started going down soon after he started opening his mouth again. |
Anonymous
| Yeah that was never going to last. People were delusional. Buyers remorse is going to set in soon |
Anonymous
Going to be really hard for you the next 4 years when you won’t be able to blame him for your sad life anymore |