Inflation

[over9k]

FNGU down 13% on the day. SOXL down 11%. BOIL peaked at +10, currently +7.

 

[waterbottle]

View attachment 159818View attachment 159819

FNGU down 13% on the day. SOXL down 11%. BOIL peaked at +10, currently +7.

FNGD has had a habit of reversing after it has had a double digit day, probably thanks to the buy the dip mentality.

 

[over9k]

Here's one for the quants:



Here's what a 200DMA reversion would look like in the fang index.

The nasdaq is also up for an index rebalance soon.


With inflation set to pump higher on wheat exports getting pummeled and all the tech earnings now coming in below estimates rather than beating them (which was counteracting the rate rises), there's a lot of speculation that a shorting opportunity has presented itself.

Food for thought.

 

[waterbottle]

Here's one for the quants:

View attachment 159821

Here's what a 200DMA reversion would look like in the fang index.

The nasdaq is also up for an index rebalance soon.


With inflation set to pump higher on wheat exports getting pummeled and all the tech earnings now coming in below estimates rather than beating them (which was counteracting the rate rises), there's a lot of speculation that a shorting opportunity has presented itself.

Food for thought.

Yeah but who's got the balls to say that this dip is THE dip? And what would you short?
Every dip since January has been a buy the dip moment. Every rally since March 2022 has been hopium-fueled only to be smacked down by the Fed spelling out the new reality to the market.

 

[over9k]

Yeah but who's got the balls to say that this dip is THE dip? And what would you short?
Every dip since January has been a buy the dip moment. Every rally since March 2022 has been hopium-fueled only to be smacked down by the Fed spelling out the new reality to the market.

Just working with the 200dma, it's way way way above any point except pre-lockdowns that did not then result in a reversion. So the historical data would suggest it's due to revert back bigly.

 

[greggles]

I don't share the optimism of some in this thread. I don't think we are headed into another bull market because I don't think we have yet felt the real consequences of inflation and high interest rates. I think the cost of living crisis will continue to put selling pressure on equities as people liquidate investments to keep up with the high cost of living. I think the real pain is yet to come.

On a macro level western governments are now servicing colossal amounts of debt at higher interest rates. China is unlikely to bounce back quickly and economic growth will remain sluggish. Unemployment will rise as small businesses fail due to less discretionary spending by consumers.

I am thinking no bull market until 2025 and more economic pain until then.

 

[waterbottle]

I don't share the optimism of some in this thread. I don't think we are headed into another bull market because I don't think we have yet felt the real consequences of inflation and high interest rates. I think the cost of living crisis will continue to put selling pressure on equities as people liquidate investments to keep up with the high cost of living. I think the real pain is yet to come.

On a macro level western governments are now servicing colossal amounts of debt at higher interest rates. China is unlikely to bounce back quickly and economic growth will remain sluggish. Unemployment will rise as small businesses fail due to less discretionary spending by consumers.

I am thinking no bull market until 2025 and more economic pain until then.

You make a good point.

Unemployment remains low only because businesses have managed to stay afloat despite rising costs.
Businesses might retain staff if they're meant to endure higher costs for a short period, but with the central bankers rhetoric of higher for longer, its going to be costly to retain staff.

 

[Smurf1976]

I don't think we are headed into another bull market because I don't think we have yet felt the real consequences of inflation and high interest rates.

I don't have a firm longer term view but short term, 2023, I note that we are coming into what's often a seasonally weak period in the months ahead.

Add that to the other factors and I'm expecting a better entry point lies ahead than at present for anyone buying index funds etc. Obviously not necessarily the case for individual stocks.

 

[over9k]

Seasonality is at the tipping point now however, which with all the energy stuff is not to be dismissed lightly.

 

[divs4ever]

Yeah but who's got the balls to say that this dip is THE dip? And what would you short?
Every dip since January has been a buy the dip moment. Every rally since March 2022 has been hopium-fueled only to be smacked down by the Fed spelling out the new reality to the market.

i am not loaded up with inverse-index ETFs like i was in late 2019/early 2020 , if i am lucky the BKL take-over will dump cash in the bank in a timely manner , but what to target if the dip is significant , that is my dilemma

 

[Dona Ferentes]

OMG, it's FMG thread time.

 

[Belli]

My insurance went from $1,313.85 to $1,687.28 (28.4%) so looks like I got out of it cheaply.

While that applied to me, it seems many in the Hawkesbury are not able to even get insurance according to this news article. It's certainly a saving but not one they want. That'll drive down the CPI by, hmm, a miniscule amount.

Where home insurance costs $30,000 a year – or you can’t get a policy at all

Calls for government solutions grow louder as Hawkesbury-Nepean Valley residents smashed by floods now can’t insure their homes.

www.smh.com.au

 

[over9k]

So imagine being this poor bastard lads, he bought this place for 1.7mil in 2014:



And it is now, 9 years later, being advertised for 100k less than what he paid for it:



And I know for a fact that it's been up for sale since january (as I've been watching it since then) and probably far earlier which means this guy has just been watching rate rise after rate rise after rate rise just crush any hopes he had of getting a decent price for it. Every time this guy knocks an offer back another rise comes in which ensures the next offer he gets will be for even less.

I watched it get passed in at auction without a single bid (not even a lowball) last saturday. If you run a search for the region you'll see that there's currently 232 places for sale in/around airlie beach with more being added almost daily.

The panic selling is well & truly in.

 

[greggles]

So imagine being this poor bastard lads, he bought this place for 1.7mil in 2014:

View attachment 159948

And it is now, 9 years later, being advertised for 100k less than what he paid for it:

View attachment 159947

And I know for a fact that it's been up for sale since january (as I've been watching it since then) and probably far earlier which means this guy has just been watching rate rise after rate rise after rate rise just crush any hopes he had of getting a decent price for it. Every time this guy knocks an offer back another rise comes in which ensures the next offer he gets will be for even less.

I watched it get passed in at auction without a single bid (not even a lowball) last saturday. If you run a search for the region you'll see that there's currently 232 places for sale in/around airlie beach with more being added almost daily.

The panic selling is well & truly in.

I think investment properties will be offloaded much faster than owner occupied. People will beg, borrow and steal to keep the roof over their own heads but will happily sell investment properties in a falling or stagnant market. Regional areas that are primarily holiday destinations like Airlie Beach will bear the brunt of any property downturn. Cairns is another one that comes to mind.

Capital cities will hold up best because demand in these areas will remain strong.

 

[over9k]

I think investment properties will be offloaded much faster than owner occupied. People will beg, borrow and steal to keep the roof over their own heads but will happily sell investment properties in a falling or stagnant market. Regional areas that are primarily holiday destinations like Airlie Beach will bear the brunt of any property downturn. Cairns is another one that comes to mind.

Capital cities will hold up best because demand in these areas will remain strong.

Precisely - holiday house is most luxury of goods, "living in house" is the complete opposite.

I'm just laughing at all the geniuses in negative equity or at very least with their deposits wiped out just absolutely bricking it right now.

Housing always goes up, remember?

 

[mullokintyre]

Wednesday we get the inflation figures for the June quarter.
Question s, will it signal we have reached the top of the interest rate cycle, or will there be a few more?
According to Trading Economics, the consensus i3 6.2% down from 6.8%,
A fall, but its still higher than "normal inflation".
Hard to tell what the RBA board may do, so if I had an opinion, it would be just a guess.
Mick

 

[over9k]

Wednesday we get the inflation figures for the June quarter.
Question s, will it signal we have reached the top of the interest rate cycle, or will there be a few more?
According to Trading Economics, the consensus i3 6.2% down from 6.8%,
A fall, but its still higher than "normal inflation".
Hard to tell what the RBA board may do, so if I had an opinion, it would be just a guess.
Mick

Yeah, "should" and "will" are two very different things.

 

[farmerge]

Wednesday we get the inflation figures for the June quarter.
Question s, will it signal we have reached the top of the interest rate cycle, or will there be a few more?
According to Trading Economics, the consensus i3 6.2% down from 6.8%,
A fall, but its still higher than "normal inflation".
Hard to tell what the RBA board may do, so if I had an opinion, it would be just a guess.
Mick

I'll take a stab at it Mick 50/50 can't do better thn that I'm afraid.

 

[mullokintyre]

Saw these interesting charts this morning.
Interesting from the perspective of how slectively using data to turn into statitics can produce so many outcomes.
Looks like a steady growth in GDP per capita to a peak in 2020-2011, then a decline since then.
Unfortunately, there are two issues.
1. Its measured in USD.
2. It does not go past 2020.
The chart on the right looks at a comparison of OZ gdp in 2020, which compares very favourably with other countries on the chart.




However, in the chart below , which is in AUD, the outcome looks very much more positive, and includes a few more years data.



Finally, when you look at the list of countries and their GDP in USD terms, we don't look that bad.
Oz is not too bad when considering those countries that produce, mine or grow things, rather than being a TAX haven or services economy.
Warning, the data is from Wikipedia

 

[waterbottle]

Wednesday we get the inflation figures for the June quarter.
Question s, will it signal we have reached the top of the interest rate cycle, or will there be a few more?
According to Trading Economics, the consensus i3 6.2% down from 6.8%,
A fall, but its still higher than "normal inflation".
Hard to tell what the RBA board may do, so if I had an opinion, it would be just a guess.
Mick

Does this print capture the recent electricity hikes and rise in oil?