The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!
— Donald J. Trump (@realDonaldTrump) December 24, 2018
Meanwhile, let’s check in on the PPT.
Nothing Out of the Ordinary
Bloomberg reports U.S. Regulators Tell Mnuchin Nothing Is Out of Ordinary in Markets
Top U.S. financial regulators assured Treasury Secretary Steven Mnuchin during a hastily organized call Monday that they are seeing nothing out of the ordinary in markets, according to a person with knowledge of the discussion, despite a recent stock slump that many traders tied to the U.S. government shutdown and turmoil emanating from the Trump administration.
The call with the President’s Working Group on financial markets, a move that appeared designed to calm nerves, capped a chaotic five days that started with Defense Secretary Jim Mattis announcing his resignation and culminated with Bloomberg News reporting Friday evening that President Donald Trump was discussing firing Federal Reserve Chairman Jerome Powell. The Standard & Poor’s 500 Index slipped by as much 2 percent on Monday.
Damn PPT Refuses to Do Its Job
Clearly, the PPT does not know how to putt either. So sad.
Mike “Mish” Shedlock
The market goes up, the market goes down. Why is that something to get worked up about? When Trump was elected, the Dow was at about 18,000, so the market is still up quite a bit under him. There is support at about 16,000, and 14,000, plus strong support at about 10,000, but I think we’ll only get to 10k if he keeps on his tariff path
Didn’t you know… markets are supposed to go up only. At least that is what we have been taught the last decade when the Fed intervened with verbiage whenever the market sneezed. This is the outcome of coddling the markets over the last decade. We are watching the withdrawal syndrome (no more free money) of a drug addict (wall street). It remains to be seen for how long Powell can withstand the withdrawal effects and continue with what I consider a sane policy. The last decade monetary policy was driven by lunatics. If it continues, god knows where we will end up one day. If you are not affected then it will be definitely wash ashore on your children or grandchildren. IMO, you cannot build your prosperity on the bodies of the next generation even if it is going to be a painful process today.
“End the Fed then? :)”
Clearly, you need a plan. and it better not be putting either Trump or Congress in charge.
“Overvalued markets can go down? Who knew?”
Very strange
Does Trump really believe DJI swings = economy health?
Good point. If Trump wants to own the stock market’s success than he has to take responsibility for the stock market decline/collapse.
The stock market is turning into a damn disaster. Somebody better figure something out fast before the Dow starts dropping in 1000 point chunks.
“The stock market is turning into a damn disaster.”
Economic expansions are not perpetual. The longest has been 10 years and we are about 6 months from that milestone. Zero Hedge said the longest bull market in history is over and even if the economic expansion becomes record long as well, it will end.
The S&P more than quadrupled off the 2009 low.
Overvalued markets can go down? Who knew?
Yeah look how overpriced Ford is: PE below 5, and dividend yield over 7%. Or were you referring to TSLA?
I remember when the PE on GM and Ford were 3, so 5 isn’t as low as you might think. If the economy does go into recession, their profits will dry up and become losses in a hurry.
If the economy slips into recession and Ford is generating losses the PE will cease to exist. I think the market is pricing that possibility in. For Ford, a PE below 5 may still be overvalued.
There’s blood in the streets! Must be a good time to buy. Market closes at 1pm EST today.