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Goldman Knows Just What Stocks Need To Rally
Goldman knows just what the market needs to hear in order to rebound sustainably. Spoiler alert: It's an incrementally less hawkish Fed, if not an outright dovish pivot.
"A trough in activity or a shift to easier Fed policy has been necessary to bring a sustained trough to equities after large drawdowns," the bank's Vickie Chang said, noting that when Fed tightening is the source of market angst, policy pivots matter most.
It's very likely that the S&P will close in a bear market at some p
I’d pose a question: What, exactly, encouraged and facilitated those “buildups of leverage”?
The GOP unrelenting opposition to raising taxes on the wealthier segment of the population… thus forcing the Fed to do everything.
Makes sense. Bear markets are declines in financial assets, those are bought with money, the Fed controls the money supply, so naturally bear markets don’t end until the Fed takes its foot off the brake – or takes its pillow off the face, depending on how dire one feels about one’s portfolio. As for when the Fed does so, the table in H’s post shows the association of bear markets with recessions, so it is probable that eventually the Fed will have one of those to react to. Unfortunately for the market, this time around the Fed arguably wants a bear market, and we’ll likely have to get some way into a recession before the employment market reaches a point that will compel the Fed to lift.
No reaction to Bostic’s floating of a “September pause”. As the most dovish governor, he’s not driving the bus, and who listens to the little kid in the back row. Eventually he (in the movies, its always a he – think Sean Astin in The Goonies) gets to say “I told you so” and I wonder if Bostic isn’t trying to set himself up for that moment.