I was incorrect. It looks like we won't make it quite to recession(bear mkt s&p). The bottom is probably going to be in within the next 2-3 weeks. I look at the supply of $$ in the econ.. I did not take into account the cash brought in from Trump's tax plan which allowed corps. to bring back off shored profits. The corp buybacks have really buoyed the market compared to what the selloff could have been. Business has been slow but the market has fared well. Anyway, bottom in soon. Fed will prolly not hike on Wednesday.
Why? 3 things:
1. Fed has been selling all kinds of bonds into the decline which dries up liquidity. This will continue.
2. Treasury has been holding funds for tax cut in spring.
3. Fed has been hiking fed funds rate. This will prolly end Wed..
Corp buybacks, rate hike termination with money flowing back into econ through tax cuts will move market higher into late winter to spring and summer. It's going to be slow tho.. It will be enough to create a floor.
Why? 3 things:
1. Fed has been selling all kinds of bonds into the decline which dries up liquidity. This will continue.
2. Treasury has been holding funds for tax cut in spring.
3. Fed has been hiking fed funds rate. This will prolly end Wed..
Corp buybacks, rate hike termination with money flowing back into econ through tax cuts will move market higher into late winter to spring and summer. It's going to be slow tho.. It will be enough to create a floor.
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