Seriously, will we keep eclipsing new highs with rate cuts? There aren't any jobs and the AI boom will keep it that way, even if there are rate cuts.
So, when does bad news become bad news? After the first rate cut? 2nd? Do we have 1 week of gains left or 3 months, or 1 year?
How long can bad news be good news?
byu/everybodydumb instocks
Posted by everybodydumb
26 Comments
I will ask my crystal ball. Please hold.
There’s a saying, there’s no such thing as bad weather, just poor choices of clothing.
Likewise I’d say the new isn’t inherently good nor bad, but your choices of investments can be.
Honestly, about 10% of us account for over 50% of consumer spend. As long as the rich keep getting richer, this will just go up.
So while many people are struggling and barely keeping up with inflation, their spending doesn’t matter much to the data. AI is only bullish for this rapid paradigm shift. We go up probably until AI fails to make material gains, an external black swan event occurs, and/or the guillotines come out.
Bad news for who/what? Bad news for Main Street is often not bad for Wall Street.
Just wait until CPI and PPI blow out to new highs next week, suggesting fewer rate cuts after September than they’ve priced. The market is going to shit itself.
As long as the bad news are bad for the average person and not bad for the ultra rich, that use the stock market as a free tax banking system.
Short answer is that investors’ patience stretches and snaps like a rubber band but for now conditions are modestly supportive.
Earnings in 2Q reported in July and August were pretty solid on the whole. Earnings growth on a declining cost of funds implicit in futures contract pricing (3m Treasury Bills for current contracts) sounds to me like a supportive environment. Absent new shocks of course.
For specific sectors and stocks, context matters. For instance, if insurance companies report large losses you can bet premiums are about to soar, so bad news is almost always good news for future earnings prospects. For early stage growth companies, losses that generated massive sales gains are cheered most of the time.
We were already told in a year the “real” job numbers will be out, and they already look great, greatest ever some say. In fact, all the numbers for next year are already in, GDP, highest numbers ever reported, some say they can’t believe how high the number is, but it’s really great, it really is.
Forever Laura, Up Forever
The markets THINK they are always looking ahead but it mostly waits for truth and confirmation that the world is ending. Tomorrows PPI could be the start of
Bad news is bad when it is coupled with an environment that is not stable. Ya think we might be in that environment? Uncertainty is the bane of the market and there is enough of that to go around but!! The retail investor has turned this market into a crap game so nothing is going to make sense except to the major players and they have the tools to ring the register all day lone.
Ask ChatGPT or Gemini
Failing upwards
This is why you need different strategies and financial instruments for different market conditions
Longer than you can stay solvent
This is what blow-off tops look like. It just gets totally insane and people throw in the towel and join the insanity. What’s going on with Oracle is nuts… double miss and the stock is up 30%.
I’ll never forget Bush and Bernanke doing a press conferece and saying how the housing market was NOT in a bubble and people should go out and buy a home. Literally, 1-2 weeks later the GFC happened.
They are never going to tell you when we’re in a bubble. They will always say it’s not a bubble, until it pops.
I feel it’s Trump’s market, for better or worse. What’s good for him will be good for the market, for now. Eventually there will be a tipping point, but so much is just riding on sentiment, projections and less on data.
Bad news right now is to support the thesis of rate cuts, so any news in favor of that narrative is good for prices
Covid recovery was a true “bad news = good news” event because the government was literally inventing ways to give people money, opening all the coffers. The last 200 days have been more bullish than the first 200 days of Covid recovery, measuring from before the dips. Does it feel like we have the same tailwinds we had during Covid recovery? Dollar index dropped during the Covid recovery also, and is significantly higher now than it was then.
It will last when I’m ready to buy back in after missing this massive bull run. I was thinking this fall but now im thinking Feb or so of next year. Shits gonna get ugly the day I do
Stop timing the market. Stop making sense out of the market. Keep buying.
Rewind a step or two, you’re assuming the news is the news.
We have a government (and news media) that’s owned & operated by Wall ST.
Three of Trump’s cabinet members are hedge fund managers.
When Trump first started announcing “TARIFFS” I don’t think even he believed he’d ever be able to keep them in place, not for long at least.
The News you get will be legit, to a degree, but there will be revisions down the road, omissions or reversals…. lest heads of departments get fired.
Trump did just fire the head of BLS for reporting a bad jobs number.
Back in April before the first Tariff announcements, I absolutely guarantee Cantor Fitzgerald & Key Square Group were well positioned in PUTs beforehand, they also knew exactly when to reverse positions when Trump backed off.
Even FOX News briefly reported sources witnessing insider trading at the White House back then.
Our economy is a Casino for the wealthy, we’re the marks.
that’s the big question right now, the markets been in “bad news is good news’ mode for a while because every weak jobs/slowdown headline just makes rate cuts more likely. But eventually, if the data keeps showing real cracks (unemployment climbing, earnings rolling over), rate cuts stop being bullish and start being seen as desperation.
It’s less about which cut (first, second9 and more about why the cuts are happening. If the Fed is easing into strength, stocks cheer. If they’re cutting into an actual recession, that’s when “bad news is just bad news again
Skepticism fuels bull markets.
Longer than you can remain liquid
Anybody know of a source of data for foreign investment into US stock markets? I would be particularly interested in flows from sovereign wealth funds and other large investment institutions.
Markets are in a crash, to the upside.
It’s a complete frenzy and panic. Just wait until everyone realizes bitcoin has run out and there are none left to buy below 1 million