Stock market tips and experiences

ASAP wrote

the only place where i could remotely see tarrifs working (outside of 200 years ago)... is if it was very industry specific and said industry had a fully developed backup at home that was potentially govt backed and it was an industry we truly wanted to build at home... this would alleviate some of the pricing worries and would give folks an immediate alternative...

in every other instance such as here... its pretty much a straight disaster

Pretty much.

The only times tariffs really make sense, IMHO, for an economy as globally connected as ours is if they are done early and with extremely solid reasoning behind them. Meaning, they aren't intended to block trade and instead are setup to ensure fair trade.

To expand on that point a bit. One area China has used heavily in the past to accelerate manufacturing job loses in America was through artificially devaluing their currency. This was a major reason China would purchase and hold disproportionate amounts of US debt. That's not the only way China competes, but we're not going to have a PhD dissertation on US / China trade here... Back to the point. We could have levied tariffs on those goods in a focused manner to counter the currency manipulation and ensure the US manufacturers could compete on level ground.

Doing blanket tariffs this late is counterintuitive. You're going to struggle to build back the manufacturing base and its auxiliary suppliers. But even worse... by attacking our allies you're losing access to their markets too...

Best we can do is to seize on the world's growing concern around China with trade agreements that make our market more favorable to trade with while building an off ramp from China's manufacturing prowess...

Republicans and Trump can't do that though as the major trade pacts to do that, like the TPP, were signed by Obama. So instead we're setting ourselves on fire.

DrVenture wrote

Which is essentially the exact opposite of what is now being done. And will likely produce the exact opposite result. Hampering our trade (exports and imports) with all parties involved. And leading to the inevitable strengthening of China's trade alliances with nearly everyone.

We are self-imposing economic sanctions on ourselves. The sort of thing that we have historically done to North Korea or Iran. Causing them to turn inward to try and create from scratch, in a manner of speaking.

All I know is that I have a boatload of dry powder and just need to seek out the point of maximum pain to re-enter certain positions. Another 5% down? Another 10? Who said, "never let a good crisis go to waste"?

Good luck trying to out-guess someone who is totally short sighted and reactionary, and who's only real goal is how do I enrichen myself here and now?

"Don't worry, it'll only hurt a li'l bit for a li'l while, then I'll make it all better!"

Hello all,

A reminder to all that please do not post political posts. Such posts will / have been deleted and may lead to infractions / bans against members and / or this thread being deleted.

You can read more about this here.

Thanks, Mani

are folks still doubting a recession?

DrVenture wrote

https://news.bloomberglaw.com/environment-and-energy/federal-worker-layoffs-climb-toward-250-000-as-deadline-looms

The expectation is for 250,000 federal employee layoffs.

A government is naturally inefficient. Perhaps some jobs may be a bit cush, but most folks working in government are not paid extremely well. Now you're going to reduce the work force by a quarter million. Good luck motivating those that remain and trying to will them to work harder for the same pay. They're already disgruntled and worried about their jobs. Now you're going to ask them to work harder. Good luck with that. If you you thought government was inefficient, just wait. It will trickle down to the state and local governments as well.

Government cannot be run like a business.

ASAP wrote

are folks still doubting a recession?

I'm not, but this coming recession is a bit "manufactured" I would say.

ASAP wrote

are folks still doubting a recession?

Yes

Recession:
GDP is roughly $30T annually. Government spending (fed and state) is approx $5.1T. If DOGE is successful and cuts $1T from Government spending, the $24.9T of private economy will have to make that up to avoid a recession, and then some to have growth. That equates to about 4%, so it is possible but difficult. A recession used to be defined as two consecutive quarters of negative GDP growth, so using that, we can see that it is possible the timing of cuts in government spending and non-government growth might misalign, so a recession is possible. I’d call it a “technical recession”.

The last few years GDP growth was heavily impacted by increases in government spending, which is why the numbers were good but people didn’t feel it (they just felt the inflation). A technical recession as I described above also likely won’t be felt in the private sector. As with any macro analysis, those who lose their jobs (in this case mainly government employees) obviously do feel it severely.

IMO a recession is possible, but perhaps less than 50% probability, and will be concentrated in the government sector if it does happen. And it will be brief.

2000cs wrote

Recession:
GDP is roughly $30T annually. Government spending (fed and state) is approx $5.1T. If DOGE is successful and cuts $1T from Government spending, the $24.9T of private economy will have to make that up to avoid a recession, and then some to have growth. That equates to about 4%, so it is possible but difficult. A recession used to be defined as two consecutive quarters of negative GDP growth, so using that, we can see that it is possible the timing of cuts in government spending and non-government growth might misalign, so a recession is possible. I’d call it a “technical recession”.

The last few years GDP growth was heavily impacted by increases in government spending, which is why the numbers were good but people didn’t feel it (they just felt the inflation). A technical recession as I described above also likely won’t be felt in the private sector. As with any macro analysis, those who lose their jobs (in this case mainly government employees) obviously do feel it severely.

IMO a recession is possible, but perhaps less than 50% probability, and will be concentrated in the government sector if it does happen. And it will be brief.

Interesting analysis, but I disagree. It’s hard for me to comprehend a scenario where pain is just limited to the public sector.

When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO.

With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in lighter than the consensus.

WWM3 wrote

Interesting analysis, but I disagree. It’s hard for me to comprehend a scenario where pain is just limited to the public sector.

When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO.

With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in much lighter than the consensus.

I said “concentrated” in, not limited to, government sector. Of course there are “multiplier” effects but that is true for growth in non-government sectors as well. And to the extent the cuts are waste and fraud, the multipliers will be small.

The real issue is whether the non-government economy is growing and will continue to grow. I think so. I also think the FED will cut rates and there might be a “DOGE dividend” and other tax cuts that help further stimulate the non-gov’t sectors (especially consumer), but that all remains to be seen. (I think this is the real reason the FED wants to go slow on rate cuts, so the economy isn’t over-stimulated) On the other hand, if the tax package from the first Trump administration is allowed to expire at the end of 2025, as is currently law, we will need massive FED rate cuts to offset the fiscal anti-stimulus or 2026 will be really bad. Taken together, the FED will be doing a dance with the administration to maintain balance and a growth bias through all of this.

DrVenture wrote

Not "predicting" in an uncertain and chaotic environment is a good plan. Usually, I'd be ready to buy after a 10% drop in S&P and a Nasdaq down 14%, but that seems optimistic to me at this time.

I agree that cuts in government spending are only one piece of the equation. I think that tariff inflation, job losses and export headwinds are likely to weight more heavily in concert.

I'm with you.

DrVenture wrote

Anyone looking strictly at the circumstances would be hard pressed to "doubt" anything. Some may be looking at the market drops (or their portfolios) and hoping it is just a blip. Some may want to believe there is a plan and method in place, for personal reasons.

"Austerity" is what The EU practiced after the Great Recession, and more recently, which led to them lagging the U.S. pretty badly. It led to lower GDP, rising unemployment and lower inflation. This is essentially austerity. Perhaps there is a lesson in there somewhere? But, it was not coupled with lower exports and/or tariffs, which may not help inflation.

Is the lesson that there is no free lunch? Both literally and figuratively? I am all for containing our spending in a methodical and comprehensive fashion. Trying to unwind decades of overspending all at once, with a chainsaw, and ignoring the biggest contributors, is going to get interesting.

it's a bit hard for me to believe that ONLY current policies are driving this...

if you look at the unemployment report over many months, you'll see most job growth and hiring came from GOVT and Healthcare... white collar / professional jobs have not been good for at least 2 years.... and the number of people I know across ALL industries that I talk to that have been laid off is massive... with very little prospects in finding another good job that pays as well.

So fundamentally a huge part of the employed population is now slowly starting to be unemployed and losing the wage growth they've had... all while inflation has slowed down albeit still not within any accepted targets.

Housing market is effectively frozen right now as well...

All of those things have been true for months now... with only the stock market rolling up until the last month... now I think things will get worse but the downturn didn't start a month ago... unless folks solely look at their 401k... of which most america does unfortunately because they aren't well educated...

now none of these things define a recession... but if gdp turns negative.... then it will be seen in many metrics... i continue to be of the mindset that nothing since Covid has been real as prices are finally catching up to most consumers

ASAP wrote

it's a bit hard for me to believe that ONLY current policies are driving this...

Desperately grasping for reasons that are not the obvious and demonstrable ones.

The only thing injecting uncertainty into the economy is the executive.

ASAP wrote

now I think things will get worse but the downturn didn't start a month ago...

Correct, it started around 2 months ago, cant really remember what happened to kick it off but I'm sure someone will remind me.

Mech Spec wrote

Correct, it started around 2 months ago, cant really remember what happened to kick it off but I'm sure someone will remind me.

I feel you didnt read my post... if you look at the economy in vaccuum... ie stock market then you are right...

if you look at the economy as a whole which you should be... i've provided at least few examples above why it hasnt been rosy for months...

Anyone doubting recession and using GDP as a factor into their analysis perhaps may want to change course.

https://www.opb.org/article/2025/03/13/alarms-grow-about-the-reliability-of-economic-data/

The government recently disbanded two outside advisory committees that used to consult on the numbers, offering suggestions on ways to improve the reliability of the government data.

“You know the Commerce Department runs the statistics of GDP,” Lutnick told Fox News. “Governments historically have messed with GDP. They count government spending as part of GDP. So I’m going to separate those two and make it transparent.”

God help us all in figuring out the markets going forward.

ASAP wrote

I feel you didnt read my post... if you look at the economy in vaccuum... ie stock market then you are right...

if you look at the economy as a whole which you should be... i've provided at least few examples above why it hasnt been rosy for months...

A recent survey of CEO's, what they say in private, not their public message.

But the Biden economy, as these CEOs that I just shared that data with you showed that 85% of them tell us that this is the strongest economy not only in their lifetime but the Biden economy they were handed was the strongest in American history and the strongest in the world. That's what 85% of CEOs say other than - no matter what Howard Lutnick says. We haven't had unemployment this low from the Biden years since "Bonanza" was the "No. 1" show on television in 1968.

How they feel about the current economy with the tariffs

SONNENFELD: Whereas the exact people, you know, a hundred of them, whether or not the CEOs of JPMorgan, Pfizer, Dell, Goodyear, Duke Energy, Stanley Black & Decker, Steelcase and others, ADP, American Airlines, they're going quite candidly with each other about what dismay they have. We also had 60 major city U.S. mayors with them to keep everybody honest.

They are very discouraged. Eighty percent of them said they find themselves apologizing to our international partners for Trump's capriciousness and 85% say the Biden economy that Trump was handed was a strong legacy. And roughly 70% say that the Trump administration is going to be bad for the economy, and they're very concerned. [...] 92% Of them say that they are increasingly concerned that the U.S. economy is headed towards a recession.

https://www.npr.org/2025/03/13/nx-s1-5325987/how-business-executives-are-feeling-about-economic-uncertainties-and-whiplash

The drivers of the economy are more psychological than numbers. Numbers are the output, but psychology is the input.

Mech Spec wrote

https://www.npr.org/2025/03/13/nx-s1-5325987/how-business-executives-are-feeling-about-economic-uncertainties-and-whiplash

The drivers of the economy are more psychological than numbers. Numbers are the output, but psychology is the input.

you will have to help me understand how a business executive / ceo feeling helps the average joe on the street which is having a tough time making ends meet and has been due to inflation...

ASAP wrote

you will have to help me understand how a business executive / ceo feeling helps the average joe on the street which is having a tough time making ends meet and has been due to inflation...

The average joe on the street has almost no bearing on whether we enter a recession or how long that recession will be. I'm not unsympathetic to that person's plight but they aren't an economic driver.

80-90 of 100+ CEO's, who collectively employ hundreds of thousands of american workers, feeling skittish about the economy due to tariffs and federal cuts causes the recession all by itself.

So doc, what moves are you making with your money, based on all of the information you are so kindly copying and pasting?

Thanks. When will the S&P be at ATH?

chassis wrote

Thanks. When will the S&P be at ATH?

Day after tomorrow.

Looks like doc removed some of his(?) posts, for example the one following #8735. Lack of confidence?