Appears the Fed is forecasting crude price reduction induced slower inflation in the future, and started focusing on the employment level, which is being affected by the slowness of the housing industry, and the resulting durable goods growth. Consumable goods should stay relatively strong due to salary increases being higher than goods inflation.
The market is reacting to a bit of over leveraged optimism of future growth, based upon local results. However, this little equity tantrum has both a bit of interest rate rise / bond price decline towards future growth, which is really the bond markets view of the debt and government spending and borrowing under the new administration. Although the view of reducing govt spending is ideal, the results and other issues like tax rate adjustments might just make the issue worse, depending upon timing and implementation of new rates.
I would posit that the government spending debt levels and the change of government leadership has a bit more influence on the future uncertainty of a major portion of market returns going forward. Remember that if government spending falls, GDP will contract / fall as well. See Argentina. . . right now both bonds and stocks are overvalued, so there is only money market to hide out in. . which has a positive return versus some other investments..
so be careful what you wish for. .
Many threads here one sells houses when the prices are very high and can rent and then buy again when house prices are low. many threads are waiting for lower prices to buy. . same with stocks in qualified accounts where there are no tax consequences. Remember, the future is uncertain, just more uncertain that at other times.
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