Trump's Election and the Markets

Discussion in 'Finance, Investments, and Careers' started by crisper57, Nov 9, 2016.

  1. 82CardsGrad

    82CardsGrad 7 x 70

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    I posted in another Trump thread that the ISM index is now the lowest in 2 1/2 years... Additionally, the 10 year is about to go sub-2%, while the 3 month is just over 2.3%. That type of inversion virtually 100% of the time signals a pending recession.

    Trump has been badgering the Fed to drops rates... and today, the St Louis Fed Chairman indicated that a rate drop is indeed imminent. Of course, Trump will leverage the hell out it... "If only they had listened to me sooner!"
    Ugh... :mad:
     
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  2. Russ Smith

    Russ Smith The Original Whizzinator Contributor

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    Yeah the markets are up today on talks the fed might lower rates and like you I'm worried WHY they have to lower the rates. It's a reaction to lots of bad signs in the markets and economy, I read yesterday the GDP is going to be about 1.5% for the 4th quarter, if true, it's the biggest decline in over 9 years. Of course Trump is going to blame the fed and everyone else but himself but it's got lots to do again with the stupid trade war, his tax plan, and the fact that people pushed through business when the tax plan first kicked in to take advantage of it and so it bumped GDP for 2 quarters and now we're in the trough after that.

    Lots of economists say recession is looming, now that seemed inevitable after the big runup and long market surge under Obama and then Trump, but Trumps' policies appear to have accelerated it and might make it bigger than it would have otherwise been.
     
  3. 82CardsGrad

    82CardsGrad 7 x 70

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    If historical bond trends hold true, the major inversion between the 2 month and 10 year Treasuries are predicting a recession... and this type of inversion has been virtually 100% accurate in terms of forecasting a recession. The question is when it will start. Some say within the next 4-6 months. Some say within the next 12-18 months. It seems highly unlikely that we would somehow avoid a recession.
     
  4. puckhead

    puckhead Waxing Gibbous Contributor

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    If they haven't been doing everything they can to keep it from happening already, I'd imagine the Administration will start pulling out all the stops to keep this away from the 2020 election cycle.
     
  5. 82CardsGrad

    82CardsGrad 7 x 70

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    No doubt... I've been saying the same thing. AND, I am 100% convinced that what Trump is doing with regard to his tariff rants, which he knows full well would spook the markets and cause serious harm to the economy, thereby forcing the Fed to act by dropping rates... is all a well-crafted but fully transparent scheme to hold-off what EVERYONE knows is inevitable - a recession.
    I DESPISE the man! :mad:
     
  6. Dback Jon

    Dback Jon Killer Snail Contributor

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    And then the recession is going to come either way - if Dems win the GOP will try to pin it on them (when we know it is a Trumpcession)
     
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  7. 82CardsGrad

    82CardsGrad 7 x 70

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    I just don't see the Dems winning... as sad as that is. I am definitely not an expert on the economy, and as much as I truly hate Trump, I don't believe he will have been the cause of the coming recession. The older I get, the more I am realizing the reality of cycles... which to me, seem entirely unpreventable. Can a person stall the inevitable, or, perhaps hasten what was coming? I guess... But, this incredible economic run has now lasted longer than any other expansion since WWII. The cycle was bound to come to an end. I guess the real question is/will be - how hard or soft of a landing will it be?
     
  8. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    On average recessions hit around 14 months following inversion. But that’s give or take 3-6 months. On two occasions it took two separate inversions and the recession didn’t hit until 4 years after the initial inversion. But I wouldn’t count on this being one of those occasions.
     
  9. Dback Jon

    Dback Jon Killer Snail Contributor

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    I agree that a recession is inevitable. The problem is that Trump's policies will make the bottom deeper and harder to climb out of
     
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  10. 82CardsGrad

    82CardsGrad 7 x 70

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    You are probably right...
     
  11. Russ Smith

    Russ Smith The Original Whizzinator Contributor

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    Well huge bounce back today especially for nasdaq. I doubt we'll see much follow through but would be nice.

    And yes I think Trump is doing everything he can to try and delay so it's not on his watch.

    And yes if the recession hits after he's gone and you can prove he caused it, he'll just blame whoever took over.
     
  12. AZCB34

    AZCB34 Registered User

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  13. Brian in Mesa

    Brian in Mesa BIM™ Contributor

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  14. 82CardsGrad

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    In the face of shrinking corporate profits...tariff wars and potential interest rate cuts (which are enacted by the Fed when they see a weakening economy)...somehow all of that argues for a higher stock market... Can you say bubble?
     
  15. dscher

    dscher Registered

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    Bubble within a bubble.. we still have not fully recovered since the financial crisis and the QE did nothing but create the illusion of strength in an economy. Interesting that we have the strongest economy ever as our president claims but will be cutting rates and going more than likely to zero or possibly negative.. Hmm. The fed is also currently reducing their balance sheet which also shows liquidity coming out of the market.. Just like the lost decade in Japan. The longer the can gets kicked down the road, the more damage will occur. Imo of course.
     

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