Stock Thread (10 Viewers)

[djmich]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

 

[Sparky Polastri]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

 

[djmich]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

 

[Schmeabs]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

If tariffs stay on long term I would expect the 10 year to be under 3% by year end

 

[GreenNGold]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

If tariffs stay on long term I would expect the 10 year to be under 3% by year end

but that won't be worth all the damage that causes, not even close

Also, the tariff formulas are based on made-up math that make zero economic sense and they don't even take other countries tariffs into account.

 

[Ridgeback]

My birthday isn't for a few months but I know what I want. Can you imagine the market reaction on Monday if our President says these few words: "Now that we have your attention, I am calling on the leaders of every country on the globe to contact me so that we can work out a deal that will be mutually beneficial. You have seen that we are willing to endure the pain of imposing stiff tariffs as we see fit. Now let's talk. I am negating all tariffs imposed on 4/2 but will reinstate them in ____ months unless a better deal is struck with each of our trading partners. You know my number, let's negotiate." I can dream...

It's amazing to me that the entire global market could turn on a few sentences from one man.

Unfortunately, that will never happen.

 

[Sparky Polastri]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

Sorry, worded poorly. Wondering what role you think interest rates would play in getting us out of a very likely stagflation situation created by these particular actions we are seeing. Technically not "current" yet but all signs indicate that's where we are headed if things don't change in those actions. I don't see how they play a huge part if any and generally agree with what Powell seemed to be hinting at.

 

[djmich]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

Sorry...worded poorly. Wondering what role you think interest rates would play in getting us out of a very likely stagflation situation created by these particular actions we are seeing. Technically not "current" yet but all signs indicate that's where we are headed if things don't change in those actions. I don't see how they play a huge part if any and generally agree with what Powell seemed to be hinting at.

I think we’d have higher rates with stagflation (correlated with the flation part of stagflation). That would be bad, unless I’m missing anything…not sure what Powell said, and maybe I’m still missing what your question is?

Edited to add I don’t think interest rates play a role in getting us in or out of stagflation. Interest rates are an outcome of a number of factors and in a situation where we’re not growing and they’re high we simply call it stagflation.

 

[Schmeabs]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

If tariffs stay on long term I would expect the 10 year to be under 3% by year end

but that won't be worth all the damage that causes, not even close

Also, the tariff formulas are based on made-up math that make zero economic sense and they don't even take other countries tariffs into account.

I never said it would. I personally don't think we see rates that low as I do not think the current tariff situation will be term. I am hopeful other countries come to the table sooner than later.

 

[GreenNGold]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

If tariffs stay on long term I would expect the 10 year to be under 3% by year end

but that won't be worth all the damage that causes, not even close

Also, the tariff formulas are based on made-up math that make zero economic sense and they don't even take other countries tariffs into account.

I never said it would. I personally don't think we see rates that low as I do not think the current tariff situation will be term. I am hopeful other countries come to the table sooner than later.

Sorry, I quoted your post but wasn't trying to reply to you directly or insinuate anything -- was just replying with my thoughts to a string of recent quotes related to the topic

 

[Redwes25]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

Sorry...worded poorly. Wondering what role you think interest rates would play in getting us out of a very likely stagflation situation created by these particular actions we are seeing. Technically not "current" yet but all signs indicate that's where we are headed if things don't change in those actions. I don't see how they play a huge part if any and generally agree with what Powell seemed to be hinting at.

I think we’d have higher rates with stagflation (correlated with the flation part of stagflation). That would be bad, unless I’m missing anything…not sure what Powell said, and maybe I’m still missing what your question is?

Edited to add I don’t think interest rates play a role in getting us in or out of stagflation. Interest rates are an outcome of a number of factors and in a situation where we’re not growing and they’re high we simply call it stagflation.

This is wrong, if we get stagflation the fed will raise rates to kill the inflation first and then cut rates. It will be very painful since they are raising rates when the economy is already weak and creates a brutal recession before they can cut rates. It is the worst possible outcome.

In the early 1980s recession to kill stagflation unemployment hit 10.8 percent and fed funds rate hit 22 percent. I don’t think anything like that is the realm of possible but that is fix of bad stagflation.

 

[Sparky Polastri]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

Sorry...worded poorly. Wondering what role you think interest rates would play in getting us out of a very likely stagflation situation created by these particular actions we are seeing. Technically not "current" yet but all signs indicate that's where we are headed if things don't change in those actions. I don't see how they play a huge part if any and generally agree with what Powell seemed to be hinting at.

I think we’d have higher rates with stagflation (correlated with the flation part of stagflation). That would be bad, unless I’m missing anything…not sure what Powell said, and maybe I’m still missing what your question is?

Edited to add I don’t think interest rates play a role in getting us in or out of stagflation. Interest rates are an outcome of a number of factors and in a situation where we’re not growing and they’re high we simply call it stagflation.

Thanks. I understand your position/assumption/prediction if cost increases were because of quantity of money in the economy.

 

[djmich]

How far do you think they can realistically get rates to drop (if thats what they are doing)?

Don't be surprised even a little bit if Powell comes out at some point telling us that rate adjustments aren't going to move the needle one way or the other in this situation. Seems like the two cuts people were predicting for this year are officially pipe dreams. I think he just stays put myself.

Ideally we get long term rates to drop, which is less about the Fed (at least todays Fed). Short term would be nice too.

Ideally, we aren't paying interest right? Wondering what role you think interest rates are playing in the current situation.

You betcha.

What role interest rates are playing in which situation, the current market drop? I don’t think they are a driving factor of this stock market decline.

Sorry...worded poorly. Wondering what role you think interest rates would play in getting us out of a very likely stagflation situation created by these particular actions we are seeing. Technically not "current" yet but all signs indicate that's where we are headed if things don't change in those actions. I don't see how they play a huge part if any and generally agree with what Powell seemed to be hinting at.

I think we’d have higher rates with stagflation (correlated with the flation part of stagflation). That would be bad, unless I’m missing anything…not sure what Powell said, and maybe I’m still missing what your question is?

Edited to add I don’t think interest rates play a role in getting us in or out of stagflation. Interest rates are an outcome of a number of factors and in a situation where we’re not growing and they’re high we simply call it stagflation.

This is wrong, if we get stagflation the fed will raise rates to kill the inflation first and then cut rates. It will be very painful since they are raising rates when the economy is already weak and creates a brutal recession before they can cut rates. It is the worst possible outcome.

In the early 1980s recession to kill stagflation unemployment hit 10.8 percent and fed funds rate hit 22 percent. I don’t think anything like that is the realm of possible but that is fix of bad stagflation.

Yah, this is a good point, I’ll clarify. My view is largely that the Fed doesn’t set rates, definitely not long term rates, and that the Fed follows the market. It’s sort of chicken and egg.

So yes, higher inflation leads to higher rates (not just Fed funds). The Fed will join the party and raise rates, Jerome gets to play with the timing a little.

 

[Chaz McNulty]

My view is that the market will go much lower. I believe if you are liquid, then you should wait. We haven't even seen the effects yet. The current market drop is just from the announcement. And every time a large country or the EU announces retaliatory tariffs, the market will back up again. This will be a drip-drip effect over the next few weeks.

Once the effects actually kick in, with higher prices and less spending, the market will continue to go down. There might be the odd bounce, but overall I don't think we are close to the bottom.

This is all assuming there isn't a reversal of the tariffs.

 

[culdeus]

Here’s an X post which should link out to a WSJ article on the conundrum Apple is with pricing. Basically the China tariff eats into half the profit margins for phones and even if Apple wanted to bring the manufacturing to the US, the labor costs would be about as much of the tariffs. I think everyone can guess who is eventually going to up the price to maintain margins:

https://x.com/joannastern/status/1908521107071685026?s=46

I believe Apple has 40%+ gross margins. I don't think Americans (especially in this environment) are going to pony up 34% more for a new phone on their regular upgrade cycle. I'd guess that means Apple is going to have their margins squeezed...or for sure a precipitous revenue drop. Which is why their stock is down.

That's not an opinion on if this is good or bad, just an assessment of the likely outcome if nothing on the tariff front changes.

This is the ultimate fallacy of the tariffs. Apple is a great example, whatever they might save in duty doing the final assembly here they lose in labor costs, and likely then some. So we are left with demand destruction which will ripple thru every industry. They left semis untouched but if nobody buys phones and cars because they are too expensive nobody buys semis anymore either.

Yes, but I also don't think the answer is that simple and that its completely knowable right now because a) things will change and b) market dynamics will drive.

Maybe Apple does final assembly here, which drives up cost, but creates jobs here. Impact?

Maybe Apple absorbs margin reduction of 15% to maximize demand based on new optimal equilibrium point. Gov't collects tariff, Apple aborbs some stock hit. Consumers pay some more. Consumer elongate replacement cycle and shift some spend elsewhere.

Maybe Apple tries to hold margins. Gov't collects tariffs, apple takes large demand hit, consumers shift spend to other things (increasing domestic purchases?).

Again, less about good or bad, but that I don't think what happens is a simple point A to point B or that every element of the ripple is good or bad.

How do you deal with the fact that places like Cambodia make shoes for 50c an hour for 80 hours a week? Then they run a huge surplus with us.

What these tarrifs are saying is you can't make profit like that. You gotta pay someone in the US union wages if you can even manage to find people to do it vs working at Wendy's.

There isn't some market force that will fix this. well besides all these companies shutting down for low demand.

 

[djmich]

Here’s an X post which should link out to a WSJ article on the conundrum Apple is with pricing. Basically the China tariff eats into half the profit margins for phones and even if Apple wanted to bring the manufacturing to the US, the labor costs would be about as much of the tariffs. I think everyone can guess who is eventually going to up the price to maintain margins:

https://x.com/joannastern/status/1908521107071685026?s=46

I believe Apple has 40%+ gross margins. I don't think Americans (especially in this environment) are going to pony up 34% more for a new phone on their regular upgrade cycle. I'd guess that means Apple is going to have their margins squeezed...or for sure a precipitous revenue drop. Which is why their stock is down.

That's not an opinion on if this is good or bad, just an assessment of the likely outcome if nothing on the tariff front changes.

This is the ultimate fallacy of the tariffs. Apple is a great example, whatever they might save in duty doing the final assembly here they lose in labor costs, and likely then some. So we are left with demand destruction which will ripple thru every industry. They left semis untouched but if nobody buys phones and cars because they are too expensive nobody buys semis anymore either.

Yes, but I also don't think the answer is that simple and that its completely knowable right now because a) things will change and b) market dynamics will drive.

Maybe Apple does final assembly here, which drives up cost, but creates jobs here. Impact?

Maybe Apple absorbs margin reduction of 15% to maximize demand based on new optimal equilibrium point. Gov't collects tariff, Apple aborbs some stock hit. Consumers pay some more. Consumer elongate replacement cycle and shift some spend elsewhere.

Maybe Apple tries to hold margins. Gov't collects tariffs, apple takes large demand hit, consumers shift spend to other things (increasing domestic purchases?).

Again, less about good or bad, but that I don't think what happens is a simple point A to point B or that every element of the ripple is good or bad.

How do you deal with the fact that places like Cambodia make shoes for 50c an hour for 80 hours a week? Then they run a huge surplus with us.

What these tarrifs are saying is you can't make profit like that. You gotta pay someone in the US union wages if you can even manage to find people to do it vs working at Wendy's.

There isn't some market force that will fix this. well besides all these companies shutting down for low demand.

I dunno, I think you're saying what I'm saying, but you think you're not maybe?

My point was its not as simple as iphones will get a lot more expensive, that Apple will just maintain margins and pass it on. There will be a new market equilibrium established (I don't consider that fixing it or not fixing it...it just is). If nothing changes on the tariff front the new equilibrium will be one that is effectively based on a new tax on goods.

For the record I am interested in the re-evaluation of tariffs as part of economic policy. I think what is being proposed is not workable, I'm sure these will be negotiated, I don't know to what extent and the outcome will be dependent on how those go. Regardless of the outcome, unless the budget deficit and debt get solved, I'm not bullish on the economy for the bottom 75% of Americans. For the stock market it depends, it can be very disconnected from the economy for a long time.

 

[pecorino]

My view is that the market will go much lower. I believe if you are liquid, then you should wait. We haven't even seen the effects yet. The current market drop is just from the announcement. And every time a large country or the EU announces retaliatory tariffs, the market will back up again. This will be a drip-drip effect over the next few weeks.

Once the effects actually kick in, with higher prices and less spending, the market will continue to go down. There might be the odd bounce, but overall I don't think we are close to the bottom.

This is all assuming there isn't a reversal of the tariffs.

The last line is the crux. Many folks, myself included, thought that Liberation Day would bring certainty. Instead now many of us, myself included, see significant issues with the decrees that were made and are hopeful that they'll be amended if not completely walked back. The level of uncertainty is higher not lower, adding fuel to the downward pressure. Three days too late but looks like the VIX is the place to be.

 

[BassNBrew]

Here’s an X post which should link out to a WSJ article on the conundrum Apple is with pricing. Basically the China tariff eats into half the profit margins for phones and even if Apple wanted to bring the manufacturing to the US, the labor costs would be about as much of the tariffs. I think everyone can guess who is eventually going to up the price to maintain margins:

https://x.com/joannastern/status/1908521107071685026?s=46

I believe Apple has 40%+ gross margins. I don't think Americans (especially in this environment) are going to pony up 34% more for a new phone on their regular upgrade cycle. I'd guess that means Apple is going to have their margins squeezed...or for sure a precipitous revenue drop. Which is why their stock is down.

That's not an opinion on if this is good or bad, just an assessment of the likely outcome if nothing on the tariff front changes.

This is the ultimate fallacy of the tariffs. Apple is a great example, whatever they might save in duty doing the final assembly here they lose in labor costs, and likely then some. So we are left with demand destruction which will ripple thru every industry. They left semis untouched but if nobody buys phones and cars because they are too expensive nobody buys semis anymore either.

Yes, but I also don't think the answer is that simple and that its completely knowable right now because a) things will change and b) market dynamics will drive.

Maybe Apple does final assembly here, which drives up cost, but creates jobs here. Impact?

Maybe Apple absorbs margin reduction of 15% to maximize demand based on new optimal equilibrium point. Gov't collects tariff, Apple aborbs some stock hit. Consumers pay some more. Consumer elongate replacement cycle and shift some spend elsewhere.

Maybe Apple tries to hold margins. Gov't collects tariffs, apple takes large demand hit, consumers shift spend to other things (increasing domestic purchases?).

Again, less about good or bad, but that I don't think what happens is a simple point A to point B or that every element of the ripple is good or bad.

How do you deal with the fact that places like Cambodia make shoes for 50c an hour for 80 hours a week? Then they run a huge surplus with us.

What these tarrifs are saying is you can't make profit like that. You gotta pay someone in the US union wages if you can even manage to find people to do it vs working at Wendy's.

There isn't some market force that will fix this. well besides all these companies shutting down for low demand.

Many of our local fast food places shut down early due to lack of staff. If you go to Chipotle after 6 you're taking your chances on getting a meal. I'm not seeing those few people willing to work at Chipotle giving up their free meal and relocating to BFE to work in a shoe factory.

 

[massraider]

I would have liked to see what would have happened if this had been done with a scalpel, rather than a flamethrower.

Companies like Apple can eat into their margin for a while, but many companies don't have close to that profit margin. Grocery stores don't have 34% profit margins.

 

[BassNBrew]

I would have liked to see what would have happened if this had been done with a scalpel, rather than a flamethrower.

Companies like Apple can eat into their margin for a while, but many companies don't have close to that profit margin. Grocery stores don't have 34% profit margins.

Grocery stores won't be dealing with 34% tariffs. They'll have no problem passing along tariff increases just like eggs. If you don't like the price, you'll eat something else.

 

[Capella]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

 

[djmich]

I would have liked to see what would have happened if this had been done with a scalpel, rather than a flamethrower.

Companies like Apple can eat into their margin for a while, but many companies don't have close to that profit margin. Grocery stores don't have 34% profit margins.

Generally agree. I hope the approach is bring the flamethrower to the fight and end up with the scalpel. I hope

 

[Sparky Polastri]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

Was in Orlando area over spring break to visit my pops and hang out a bit. That area was already seeing a decline. Local news talking almost nightly about what the tourist finances are going to look like through 2025. That was before this fiasco even started.

 

[massraider]

like the FFA, is disney world politics proof? i know desantis had a butt knot for disney recently. is it a place red states now avoid? or is it a place everyone avoids cause you need a second mortgage to go?

8 months ago:

https://www.reuters.com/business/media-telecom/walt-disney-earnings-beat-market-estimates-profit-slips-parks-2024-08-07/

 

[culdeus]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

Was in Orlando area over spring break to visit my pops and hang out a bit. That area was already seeing a decline. Local news talking almost nightly about what the tourist finances are going to look like through 2025. That was before this fiasco even started.

This was supposed to be the year air travel hit an ath. Now most carriers are scrambling to revise down their figures.

 

[djmich]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

like the FFA, is disney world politics proof? i know desantis had a butt knot for disney recently. is it a place red states now avoid? or is it a place everyone avoids cause you need a second mortgage to go?

I avoid it because you have to take out a second mortgage but more than that because it’s such a bad experience trying to get on their damn rides

 

[Sammy3469]

Here’s an X post which should link out to a WSJ article on the conundrum Apple is with pricing. Basically the China tariff eats into half the profit margins for phones and even if Apple wanted to bring the manufacturing to the US, the labor costs would be about as much of the tariffs. I think everyone can guess who is eventually going to up the price to maintain margins:

https://x.com/joannastern/status/1908521107071685026?s=46

I believe Apple has 40%+ gross margins. I don't think Americans (especially in this environment) are going to pony up 34% more for a new phone on their regular upgrade cycle. I'd guess that means Apple is going to have their margins squeezed...or for sure a precipitous revenue drop. Which is why their stock is down.

That's not an opinion on if this is good or bad, just an assessment of the likely outcome if nothing on the tariff front changes.

This is the ultimate fallacy of the tariffs. Apple is a great example, whatever they might save in duty doing the final assembly here they lose in labor costs, and likely then some. So we are left with demand destruction which will ripple thru every industry. They left semis untouched but if nobody buys phones and cars because they are too expensive nobody buys semis anymore either.

Yes, but I also don't think the answer is that simple and that its completely knowable right now because a) things will change and b) market dynamics will drive.

Maybe Apple does final assembly here, which drives up cost, but creates jobs here. Impact?

Maybe Apple absorbs margin reduction of 15% to maximize demand based on new optimal equilibrium point. Gov't collects tariff, Apple aborbs some stock hit. Consumers pay some more. Consumer elongate replacement cycle and shift some spend elsewhere.

Maybe Apple tries to hold margins. Gov't collects tariffs, apple takes large demand hit, consumers shift spend to other things (increasing domestic purchases?).

Again, less about good or bad, but that I don't think what happens is a simple point A to point B or that every element of the ripple is good or bad.

How do you deal with the fact that places like Cambodia make shoes for 50c an hour for 80 hours a week? Then they run a huge surplus with us.

What these tarrifs are saying is you can't make profit like that. You gotta pay someone in the US union wages if you can even manage to find people to do it vs working at Wendy's.

There isn't some market force that will fix this. well besides all these companies shutting down for low demand.

I dunno, I think you're saying what I'm saying, but think you're not maybe?

My point was its not as simple as iphones will get a lot more expensive, that Apple will just maintain margins and pass it on. There will be a new market equilibrium established (I don't consider that fixing it or not fixing it...it just is). If nothing changes on the tariff front the new equilibrium will be one that is effectively based on a new tax on goods.

For the record I am interested in the re-evaluation of tariffs as part of economic policy. I think what is being proposed is not workable, I'm sure these will be negotiated, I don't know to what extent and the outcome will be dependent on how those go. Regardless of the outcome, unless the budget deficit and debt get solved, I'm not bullish on the economy for the bottom 75% of Americans. For the stock market it depends, it can be very disconnected from the economy for a long time.

That may be how it plays out, but an Apple stock with pre-April 2nd margins is worth significantly more than per share than a post-April 2nd margins. That has repercussions both for investors (stock worth much less), but also for capital formation (now the ROE on anything is much less) and I'm sure other knock-on effects. Margin compression is a killer and margins were why so many of the QQQ stocks were worth so much.

Maybe that's a good thing, but the uncertainty (both in tariff policy, but also what will companies margins actually be) are big net negatives for stocks at least in the short term

 

[Desert_Power]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

This isn't great.

Seems likely we see another leg down tomorrow without any reassuring messaging coming out. Might be time for long end rates to join the party. The scale of inflation vs recession is tipping to the latter, globally.

 

[Capella]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

like the FFA, is disney world politics proof?

I don’t really know. There’s absolutely nothing political about the parks at all. It is extremely expensive.

 

[ghostguy123]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

like the FFA, is disney world politics proof?

I don’t really know. There’s absolutely nothing political about the parks at all. It is extremely expensive.

I was just at Hollywood Studios last week. Honestly, I can't think of anything else that is just not worth the money like these places are.

 

[culdeus]

Futes open in 2 hours. Will we open at or above 500?

 

[McBokonon]

$PLAY (Dave and Buster's) reports tomorrow. Where do we get our skee-balls from?

 

[McBokonon]

Futes open in 2 hours. Will we open at or above 500?

Crypto just started puking. Going with below.

 

[ghostguy123]

Random question.
How much does the market need to drop to be considered a black swan event?

 

[McBokonon]

Random question.
How much does the market need to drop to be considered a black swan event?

A black swan event isn't related to how much/how little anything drops. It's just a way to describe an impactful, unpredictable event. I feel like whatever negative impacts we see from this were more predictable than something like, say, COVID, and won't really qualify. We're all sort of seeing it happen in real time and it's not like there wasn't warnings.

 

[ghostguy123]

Random question.
How much does the market need to drop to be considered a black swan event?

A black swan event isn't related to how much/how little anything drops. It's just a way to describe an impactful, unpredictable event. I feel like whatever negative impacts we see from this were more predictable than something like, say, COVID, and won't really qualify. We're all sort of seeing it happen in real time and it's not like there wasn't warnings.

Then why wasn't everyone in here pounding the table to buy UVXY??

 

[McBokonon]

Random question.
How much does the market need to drop to be considered a black swan event?

A black swan event isn't related to how much/how little anything drops. It's just a way to describe an impactful, unpredictable event. I feel like whatever negative impacts we see from this were more predictable than something like, say, COVID, and won't really qualify. We're all sort of seeing it happen in real time and it's not like there wasn't warnings.

Then why wasn't everyone in here pounding the table to buy UVXY??

Good question. This is probably just getting into semantics. I think there's a spectrum on how seriously people took the tariff threat. So, the existence of tariffs was predictable, but maybe the announcement of them and the (for want of a much better word) "rationale" to determine them wasn't? I just always think of black swan events as something that completely blindsides us.

 

[tommyGunZ]

I will say this is completely anecdotal but we went to Disney yesterday when it was beautiful weather here and usually an extremely busy time of the year….and the place was empty. Sub 20 minute wait times on most everything. Seems like an indicator that people are worried to spend to me.

Citizens from other countries are apparently canceling their vacation plans in mass. Wonder how much a tourism boycott was figured into the tariff equations when calculated?

 

[Rirruto]

Futes open in 2 hours. Will we open at or above 500?

Crypto just started puking. Going with below.

Agree with this. My hope was that crypto was resilient last week + buy the dip chatter on social media was evidence that retail was firmly still in. Retail was buying ETFs late last week. Crypto is very heavily retail, so I think we can look to it as some kind of marker. I think the crypto pullback is a response to there not being any sort of announcement on the tariffs. Key policymakers were on the Sunday morning shows saying that equal parts 1. 50 countries had called to negotiate and 2. that there would be no negotiations because these tariffs are intended to bring manufacturing back stateside. I'm not sure I can keep both of those ideas in my head at the same time.

Unless we get a social media post from the one guy who can move markets, it doesn't look great. The EU seems to smartly be waiting to announce their retaliation until right before markets here open. That mirrors China announcing as Friday was winding down. I guess worst case is retail runs for the hills and institutional investors get margin called and we start running up on circuit breakers.

Hope to be wrong, though.

 

[FreeBaGeL]

Random question.
How much does the market need to drop to be considered a black swan event?

A black swan event isn't related to how much/how little anything drops. It's just a way to describe an impactful, unpredictable event. I feel like whatever negative impacts we see from this were more predictable than something like, say, COVID, and won't really qualify. We're all sort of seeing it happen in real time and it's not like there wasn't warnings.

Then why wasn't everyone in here pounding the table to buy UVXY??

More than half the regular posters in this thread cleared huged cash positions right before this.

Regardless, it certainly wasn't out of nowhere. Everyone knew this was a very real possibility. Even if they didn't think it was enough of a lock to short the market, everyone kinda saw it coming and there was a lot of hedging to prepare for the possibility of a big drop.

 

[culdeus]

Buying a bunch of puts anywhere out in time was expensive AF for last few months also. Your options were well and take gains and tax or pay out the *** to hedge. Neither were easy.

This group by and large has 1-2M in their 401k so hedging really isn't a thing that can easily be done often times.

 

[Sparky Polastri]

Futes open in 2 hours. Will we open at or above 500?

Would be surprised if it's wasn't below

 

[Sand]

Futes open in 2 hours. Will we open at or above 500?

Tomorrow will forever be known as Margin Call Monday.

 

[ghostguy123]

Whelp, I think I'm just gonna keep an eye on this thread and wait till some folks start screaming buy buy buy!!!!

 

[culdeus]

Whelp, I think I'm just gonna keep an eye on this thread and wait till some folks start screaming buy buy buy!!!!

Buy signal is the vix probably retracing to 40 or 30

 

[McBokonon]

Dow down about 1500, S&P and NASDAQ down about 5% each to start.

 

[ghostguy123]

Dow down about 1500, S&P and NASDAQ down about 5% each to start.

Yikes

 

[Desert_Power]

Dow down about 1500, S&P and NASDAQ down about 5% each to start.

Is that good?

 

[Sand]

At this rate 17 days to zero.

 

[Rirruto]

I think the question now is do we get a circuit breaker 15 minute time out at -7%. Hopefully, we don't hit -13%.

Edit to change "certainly" to "hopefully"