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McElligott Explains Why Stocks Don’t Care About Powell Drama
If you're old enough to remember 2018, the year Jerome Powell took the reins at the Fed, you know it
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“Corporate margins remain at or near record highs a full two points above the pre-pandemic peak.”
If your costs are steady or slightly rising, what do you do? Well, raise the price of your product and that’s how you keep or increase your margin. Not complicated.
” central bankers setting policy rates plus or minus 100bps simply doesn’t have the attributional impact it once held” Truth there, sir. Nor do most old-fashioned indicators it seems….
What surprised me most about this piece was that Mr. McElligott chose to attribute the stable reaction market reaction to intricate levels of economic thinking. A simpler explanation for Monday’s relentless bid under stocks was most likely the unmoving mass of share buy-back orders lurking below the surface. Industry-wide, those rarely get pulled except when credit becomes scarce as in 2008-2009. At a company basis it can be more common because no lone company wants to suspend their dividend. That attracts interest from nosy short-seller types.
Where are you seeing a “relentless” corporate bid? Is that based on any article you’ve seen quoting prime desk corporate flows? Corporates should be in the blackout around earnings. That obviously doesn’t mean there are no buybacks going on, but I’m just wondering what data you’re referring to there.
An unsupported general observation.
Does it affect company earnings? No? Then party on, Wayne!
I saw a chart of the German stock index during the 1910 to 1950 period. Pretty sobering to see what stocks don’t care about.
Party on Garth!