Stock, the economy and the Fed for 2023

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Selling put's IMO generally make more sense as vol increase tends to happen on downturns. Vol increase means price of the option is higher at time of selling given the Black-shlonger model (forgot the name).

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Equities are "en fuego" right now with a huge run up in P/E multiples. Earnings don't support these multiples but the market is looking past 2023 already towards 2024. Fast Money guys are saying an S and P of 4200 level before we retrace somewhat.

Has anyone even calculated the current S and P P/E multiple based on today's close?

Based on 2023 earnings the multiple is over 30. That seems quite high for a bear market but maybe this is the start of a new bull market? Jim Cramer says this is a new bull market starting early in anticipation of the end of rate hikes by June and a return to good earnings by 2024. Comments?
 
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Zaccarelli said to expect a sell-off once investors recognize interest rates will be held at elevated levels for the foreseeable future.

“We wouldn’t get in the way of this rally, but we do believe that a recession is coming, once businesses and the financial markets realize that the Fed is serious about holding rates high for an extended period of time, and once the recession takes hold, markets will sell off yet again,” he said. “The timing of this realization has certainly been delayed; it may not come until the end of this year, or even the beginning of next year.”
 
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There’s a ‘window’ for some continued upside after Fed decision, investor says​

While traders could be expecting some near-term downside following a strong January rally, Horizon Investments’ Zachary Hill said he sees a “window” for some continued upside.
January was a great month for equities. The S&P 500 notched its best January since 2019, while the Nasdaq Composite had its best January since 2001. On Wednesday, however, the major averages are lower ahead of the Fed decision.
“Normally in a setup like that, I would think that the bias would be to the downside. But, at the same time, you have to contend with a market that is really anxious to put this whole inflation narrative behind us,” Hill said.
“I do think there’s a window where we can continue to go higher here in the near term, kind of inverting that ‘down in the first half, up in the second half’ narrative which seems to be a very popular one amongst strategists on Wall Street as we entered the new year,” he added.
“I think the question we’re asking ourselves is, how long that window lasts?” Hill said.
 
I feel like I’ve seen these guys flip flop at least 3-4 times over the past 2 months, maybe more which I just keep buying.
 
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I feel like I’ve seen these guys flip flop at least 3-4 times over the past 2 months, maybe more which I just keep buying.

Is it just me or were a whole bunch of ppl dead convinced we were gonna hit 3600 to 3000 by now?

Good thing I just started buying hard last may and then bought even harder on dips.
 
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this time its very different than before at least short term.

we are seeing RECORD levels of money being parked on the sidelines. wealth is more concentrated than ever. all that money printing has effects. these rich people and institutions want their big gains and have been on sidelines for a while. they want to go back in to stocks. its causing these massive bounces.

this covid pandemic really lined up the pockets of the rich even more.

I think we will see a lot of up and downs in 2023, but end up in similar spot as now

so far all the news have been OLD. ppl are tired of inflation and covid.
 
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this time its very different than before at least short term.

we are seeing RECORD levels of money being parked on the sidelines. wealth is more concentrated than ever. all that money printing has effects. these rich people and institutions want their big gains and have been on sidelines for a while. they want to go back in to stocks. its causing these massive bounces.

this covid pandemic really lined up the pockets of the rich even more.

I think we will see a lot of up and downs in 2023, but end up in similar spot as now

so far all the news have been OLD. ppl are tired of inflation and covid.
I’m bullish for 2024 but uncertain for 2023 holding 4200. I think we end 2023 over 4200 but likely see 3800 at some point. I’m not bearish just realistic about the P/E multiples. I agree that there is a ton of money on the sidelines waiting to be deployed.
 
Waiting to see how china reopening affect things. If we see uptrend In inflation due to it. Stocks will down

If we’re not growing and buying Chinese made products, China won’t have an effect on oil and GDP imo. The whole model is based on how Americans consume. For China to be prosperous, they need us to buy their s*it currently. Probably will change in the future, but right now, the Chinese economy is predicating how much of their products we buy.
 
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If we’re not growing and buying Chinese made products, China won’t have an effect on oil and GDP imo. The whole model is based on how Americans consume. For China to be prosperous, they need us to buy their s*it currently. Probably will change in the future, but right now, the Chinese economy is predicating how much of their products we buy.

this doesnt make sense. if china opens up they will consume oil. a lot of oil.
 
Although CPI is still elevated, it’s falling at a rapid rate (deflation) due to increased rates. The cost of money is higher than it was 2019. There’s less cheap money to buy discretionary items. If America is not purchasing Chinese made products, how can they have an increase in their GDP? Yes they are “opening” up but global consumers have a greater impact on their economy by allowing them to export.

I’m working on a thesis that high inflation (CPI and PPI) will lead to more deflation (disinflation) because we won’t have growth because of high energy cost and the resumption of central bank money printing coming later this year.
 
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Tyson stock tumbles as profits plummet year over year​


i imagine they will raise prices. tyson is getting destroyed. when wages keep going up and up, companies will eventually be raising prices up and up!
 
Is it just me or were a whole bunch of ppl dead convinced we were gonna hit 3600 to 3000 by now?

Good thing I just started buying hard last may and then bought even harder on dips.
Ahhh, beneath every public socialist is a private capitalist 😉 Embrace it. It's what built America.
 
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Tyson stock tumbles as profits plummet year over year​


i imagine they will raise prices. tyson is getting destroyed. when wages keep going up and up, companies will eventually be raising prices up and up!

Maybe not. The stock tanked mostly because people are buying hamburger instead of steak as opposed to increased input costs.
 
Maybe not. The stock tanked mostly because people are buying hamburger instead of steak as opposed to increased input costs.


Did slaughtering 50mil+ chickens (industry wide, not just Tyson). have anything to do with it?

I’ve been reading that H5N1 could become the next pandemic.
 
apparently its full on bull market now. no one cares about inflation anymore
Or maybe it's past time to admit that no one knows anything and that predicting the stock market, especially over short time intervals (like the attention span of an internet thread on a doctor forum), is a fool's errand.
 
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Or maybe it's past time to admit that no one knows anything and that predicting the stock market, especially over short time intervals (like the attention span of an internet thread on a doctor forum), is a fool's errand.
i disagree. i have significantly underperformed in the past 3 years vs sp500. clearly i know something the market doesnt
 
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i disagree. i have significantly underperformed in the past 3 years vs sp500. clearly i know something the market doesnt
Yeah but you nailed it on the Amzn 95 calls expiring today. What did you roll them for? For me I'm settling in and finding 2 pts a month on Goog 95s and 100s, and Amzn 95s is a decent trade off between rolling too early and possibly rolling too late. It's been a sweet 25% yearly on about 4 months or so now. Hoping to milk that a little while longer before the inevitable happens, ie goes too high or falls too low and the rich premiums disappears.

But again, Congrats!
 

the best hedge funds on the long run f ar outperforms sp500.

The stellar year for Citadel's flagship fund followed a 26% return in 2021 and decades of strong performance–$1 million invested in Wellington at inception in 1990 would be worth $328 million today, compared with $23 million if it were invested in the S&P 500 Index.
Is this a joke?
Do you actually believe this?
Do you think many hedge fund managers invest in their own funds?
 
Is this a joke?
Do you actually believe this?
Do you think many hedge fund managers invest in their own funds?
Ignore the junk. Focus on low cost ETFs and these days there are ETFs in every category/sector as well as actively managed ETFs. Options trading is for the select few as most will lose money trading options. If you can save $100K per year in all accounts then the odds favor you attaining your goals. I recommend you run the numbers. $100K per year over 30 years with a 6-7% return. For some, this will be easy to do while for others this will require a strict budgeting process.
 
I am beginning to think the Fed's terminal rate in 2023 will be 6% not 5.25% due to sticky inflation. If I am correct, then how will 6% affect the economy and stocks? Let's say we get 4 more rate increases in 2023. Will the market finally pull back to 3700 by the end of this summer? Can the Fed leaves rates at 6% for very long? What does the Fed do if rates are 6% but inflation remains sticky at 4%? I just don't see inflation going back to 2% regardless of how high the Fed raises rates unless we enter into a severe recession. So, will the Fed go above 6% to bring inflation from 4% to 2%?
 
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Not sure if this bad been discussed.. but figured i’d post it here.
Closed ally and moved everything into robinhood.

4.15%
 

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Not sure if this bad been discussed.. but figured i’d post it here.
Closed ally and moved everything into robinhood.

4.15%
Vanguard money market is up to 4.55%! If it persists I'll move my money from UFB Direct which is giving me 4.21% right now.
 
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Yeah but you nailed it on the Amzn 95 calls expiring today. What did you roll them for? For me I'm settling in and finding 2 pts a month on Goog 95s and 100s, and Amzn 95s is a decent trade off between rolling too early and possibly rolling too late. It's been a sweet 25% yearly on about 4 months or so now. Hoping to milk that a little while longer before the inevitable happens, ie goes too high or falls too low and the rich premiums disappears.

But again, Congrats!
it didnt go well. i was too busy at work. i placed a order to roll them forward at mid price and it never got filled... i was surprised. i usually have no probs filling. so my option will be assigned. not a huge deal i guess. i'll put some puts in next week or something

at the same time i believe this rally is premature. will be heading back down. a lot of these stocks are at or near resistance. wonder if they will break thru. wonder what will happen next week

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it didnt go well. i was too busy at work. i placed a order to roll them forward at mid price and it never got filled... i was surprised. i usually have no probs filling. so my option will be assigned. not a huge deal i guess. i'll put some puts in next week or something

at the same time i believe this rally is premature. will be heading back down. a lot of these stocks are at or near resistance. wonder if they will break thru. wonder what will happen next week

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When you say assigned, will your stock will be taken, or money to pay off the option will be taken? Either way you're sitting extremely well.

Buy back the stock (or eat the option price; I'm not 100% sure what happens if you do nothing at expiration when in the money since I've never done that). Then sell the 95 calls again. There's a 3+ pt premium on the 4 wk 95s, a 5+ premium on the Apr 95s, and a 7+ premium on the May 95s, which no matter what is a huge ass haul. You may not realize it, but you still killed it haha.
 
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When you say assigned, will your stock will be taken, or money to pay off the option will be taken? Either way you're sitting extremely well.

Buy back the stock (or eat the option price; I'm not 100% sure what happens if you do nothing at expiration when in the money since I've never done that). Then sell the 95 calls again. There's a 3+ pt premium on the 4 wk 95s, a 5+ premium on the Apr 95s, and a 7+ premium on the May 95s, which no matter what is a huge ass haul. You may not realize it, but you still killed it haha.
My stocks are being sold for 95$ . Yea Amazon has pretty amazing premiums right now. Ill see what happens Tuesday to see if I should sell some puts
 
Vanguard.
So you dont put your money in your great hedge funds? I don't understand
 
I am beginning to think the Fed's terminal rate in 2023 will be 6% not 5.25% due to sticky inflation. If I am correct, then how will 6% affect the economy and stocks? Let's say we get 4 more rate increases in 2023. Will the market finally pull back to 3700 by the end of this summer? Can the Fed leaves rates at 6% for very long? What does the Fed do if rates are 6% but inflation remains sticky at 4%? I just don't see inflation going back to 2% regardless of how high the Fed raises rates unless we enter into a severe recession. So, will the Fed go above 6% to bring inflation from 4% to 2%?
I don't think so. If the terminal rate goes to 6%, the 10yr, 30yr treasury bond rates will go up significantly too. USA can't afford it with more than 1T yearly deficit.
 
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I don't think so. If the terminal rate goes to 6%, the 10yr, 30yr treasury bond rates will go up significantly too. USA can't afford it with more than 1T yearly deficit.
it'll be temporary. usa not being able to afford it will in turn cause to find ways to find more revenue which will probably crush the economy
 
it'll be temporary. usa not being able to afford it will in turn cause to find ways to find more revenue which will probably crush the economy
The Fed is committed to taming inflation to levels around 2.5% or so. Will they tolerate 3%? Also, if the Fed funds rate does hit 6% it will only be for a few months until unemployment rises and the recession takes hold. Then, the Fed will cut rates likely ending up around 3.5% sometime in 2025. My point is that IMHO, the market isn't seeing higher rates for longer intervals like all of 2023 and even part of 2024. I firmly believe the Fed will raise rates as high as 6% if needed this year.
 
I'm convinced the only way the debt will ever be addressed is by force, that being the debt ceiling is not raised. It's been raised 78 times since 1960, more than once a year, and clearly the let's just raise it for now and we promise to figure out the debt later is not working.

If you believe not raising the debt ceiling equals default then somebody has been feeding you a lot of misinformation. It simply means after you've serviced the debt first you can't spend anymore than the revenue you are taking in. It is not a default. It's probably the only way the debt monster will be addressed.
 
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The Fed is committed to taming inflation to levels around 2.5% or so. Will they tolerate 3%? Also, if the Fed funds rate does hit 6% it will only be for a few months until unemployment rises and the recession takes hold. Then, the Fed will cut rates likely ending up around 3.5% sometime in 2025. My point is that IMHO, the market isn't seeing higher rates for longer intervals like all of 2023 and even part of 2024. I firmly believe the Fed will raise rates as high as 6% if needed this year.


Current labor market and the unemployment rate is a function of both demographics and fiscal policy. Boomers are retiring en masse. That’s also bad for the financial markets across all asset classes.
 
I'm convinced the only way the debt will ever be addressed is by force, that being the debt ceiling is not raised. It's been raised 78 times since 1960, more than once a year, and clearly the let's just raise it for now and we promise to figure out the debt later is not working.

If you believe not raising the debt ceiling equals default then somebody has been feeding you a lot of misinformation. It simply means after you've serviced the debt first you can't spend anymore than the revenue you are taking in. It is not a default. It's probably the only way the debt monster will be addressed.


I believed that line until I looked at the actual numbers. Of the federal budget, only $640B is needed to service the interest on existing debt this year. That still leaves the problem of what to cut. The other striking thing about the federal budget is how little corporations pay in income tax.

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