Stocks were NOT up today

#1
lawgator1

lawgator1

Senior Member
Joined
Aug 8, 2005
Messages
70,360
Likes
41,381
#1
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
 
  • Like
Reactions: 7 people
#5
#5
All monkey poo throwing aside watch the classical indicators. The yield curve is flattening and 10 year note is at 3%.

I’m tbinking about getting safe in the short term.

Not really worried about the long term. What goes up must come down. But I don’t see a reason to needlessly lose 20-25% if I can avoid it.
 
#6
#6
First, I'd like to know what the Dem's definition of "middle class" is.

Second, infrastructure definitely needs help, but, let's end vanity projects like light rail that are costly and require massive subsidization.
 
  • Like
Reactions: 1 person
#7
#7
lawgator1 said:
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
Click to expand...

uhhh no

What is driving the market?

Trading in the stock market has been heavily influenced by U.S. Treasury yields, and that theme re-emerged as the 10-year Treasury yield TMUBMUSD10Y, +0.44% touched the psychologically important 3% handle on Tuesday and hit a four-year high. Yields and debt prices move in opposite directions. The 10-year yield subsequently pulled back to trade at 2.979%. Yields and debt prices move in opposite directions.

Earnings were also in focus, with a deluge of high profile companies reporting results before the open. The season has so far been strong, and more than 80% of the S&P 500 companies reporting so far have beaten profit forecasts. While that’s above the 73% that beat in the fourth quarter of 2017, better-than-expected results often haven’t been enough to lift shares thus far this season.
 
#9
#9
lawgator1 said:
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
Click to expand...

Equities have gone up at a 45-degree angle, virtually unstopped, since March of 2009. To view just the most recent part of the rally against the backdrop of the tax cuts is a bit short-sighted, and the affect of political developments on financial markets is overrated. Fed policy matters much more.

Valuations have been a little rich for a long time, got richer after Trump was elected, and prices have come in lately after a good reason to sell presents itself (the recent rise in interest rates).

2580 or thereabouts is a key level in the S&P. That was the bottom of the initial drop in February, that bottom was re-tested in late March/early April, and now we are testing it again after failing (so far) to mount a rally off of it. If 2580 fails to hold, I could see us going back to the 2000-2100 range over the next several weeks after that, which would be close to a 30% drop from the high.
 
#10
#10
lawgator1 said:
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
Click to expand...

Don't wait for a corporate rate hike. If you think tax increases create growth, you should go ahead and do your part now. Send all you can to the US Treasury today. They will take it. Get your money out there circulating, creating real growth and jobs. How about this? I will give you a PO box and you can send it to me. I promise I will use it to generate some economic growth. At least you can sleep at night, knowing you did all you could.
 
  • Like
Reactions: 1 person
#11
#11
So does one of the anti Trumpers have this latest “DOW point drop” value lined up historically with the rest of them so that we can overstate its significance yet as compared to a percentage basis?
 
#12
#12
lawgator1 said:
The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.
Click to expand...
Ok, the Dems can try to run on tax cuts for the middle class, but Trump already made it happen. Family of 4 with $100,000 combined income will save about $3,000/year on taxes in 2018. That family will pay about 40% LESS in taxes under Trump's plan. Run the numbers and see for yourself. And this doesn't even include income bonuses due to the corporate tax rate reductions.
 
#13
#13
lawgator1 said:
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
Click to expand...
Elliott Wave Principle at work.
 
#15
#15
McDad said:
How bout the Democrats run on spending cuts for everyone and let the economy take care of itself, Comrade.
Click to expand...


No.

The money has to come from somewhere. The top 10 pct have done just fine. But if you concentrate all of the wealth at the top even more than it already has been, you turn off the spigot that drives the economy: consumer demand for goods and services.
 
  • Like
Reactions: 2 people
#16
#16
McDad said:
LG is doing what he do. Uses "forecasts" predicting gloom and doom then fantasizing he runs the DNC's campaign strategy. He shares that with us.
Click to expand...


Um, not me. Several big corps like Coke and others reported today. They had good numbers for the immediate past. But all of their forecasts for future growth were gloomy.

The market works off of expectations. The profit now was baked in. But moving forward the growth in earnings is not there. Why? If the economy is doing well under the current plan, why?

Because consumers don't have the money to spend to keep the earnings picture down the line looking good.
 
  • Like
Reactions: 1 person
#17
#17
One of the big reasons is that 80% of S&P 500 firms are in their buyback blackout period. Historically, the market is very volatile during this period. When the blackout period is lifted after earnings reports, there will be price support due to competition of corporate buybacks.

S&P 500 corporations are expected to buy back $650 billion dollars worth of shares this year, which represents a 17% increase from last year. Earnings are expected to be very good. When the blackout is lifted, prices should go back up. The companies are not able to buy back their shares so close to earnings reports, therefore there is less competition for the shares, which drives down prices.
 
Last edited:
#18
#18
1972 Grad said:
One of the big reasons is that 80% of S&P 500 firms are in their buyback blackout period. Historically, the market is very volatile during this period. When the blackout period is lifted after earnings reports, there will be price support due to competition of corporate buybacks.

S&P 500 corporations are expected to buy back $650 billion dollars worth of shares this year, which represents a 17% increase from last year,. Earnings are expected to be very good. When the blackout is lifted, prices should go back up.
Click to expand...


Look at their quarterly expectations moving forward. Not now. Moving forward.

Why buy a stock like Caterpillar that thinks that for the year profitability will be stagnant? The stock will not go up if that's true. So why buy it?
 
#19
#19
lawgator1 said:
No.

The money has to come from somewhere. The top 10 pct have done just fine. But if you concentrate all of the wealth at the top even more than it already has been, you turn off the spigot that drives the economy: consumer demand for goods and services.
Click to expand...

America is broke. You cannot confiscate your way to prosperity.
 
  • Like
Reactions: 1 person
#20
#20
lawgator1 said:
Look at their quarterly expectations moving forward. Not now. Moving forward.

Why buy a stock like Caterpillar that thinks that for the year profitability will be stagnant? The stock will not go up if that's true. So why buy it?
Click to expand...

But increasing Cat's taxes will make them more money?
 
  • Like
Reactions: 2 people
#21
#21
lawgator1 said:
Market built in and assumed significant growth in revenue and profits. There has been an artificial and short term bump premised on corporate tax relief. But the reality is sinking in with forecast numbers that those cuts are not going to light a fire under what has been missing for so long -- middle class consumer demand.

The Dems should run on a platform of tax cuts for the middle class. Not one shot 1k bonuses. Or obviously exaggerated claims of average 4k net pay increases.

Pop the corporate rate back up 5-10 % and use it to pay for middle class tax breaks. Then increase the gas tax .10 a gallon and pay for infrastructure. Those are real jobs, real growth, sustainable. Not just windfalls for the wealthy campaign donors.
Click to expand...

Who is the middle class? Income wise?
 
#24
#24
McDad said:
America is broke. You cannot confiscate your way to prosperity.
Click to expand...

The Dems will unconfiscate much more of the middle class's current tax burden. Demand goes up. Everyone does better, not just the top.

Trickle up, not down.

Ernest T. Vol said:
But increasing Cat's taxes will make them more money?
Click to expand...

Making the tax burden more fair and sparking consumer demand in the middle class will yield a better bottom line for Cat in the near and long term, yes.
 
  • Like
Reactions: 1 person
New posts
You must log in or register to reply here.

VN Store



Back
Top