Dow on pace for best day in 8 months after Fed Chair Powell signals rates are near neutral

[mahatmakanejeeves]

Source: CNBC

Dow on pace for best day in 8 months after Fed Chair Powell signals rates are near neutral
Fred Imbert | @foimbert

https://twitter.com/foimbert

Published 9 Hours Ago Updated 14 Mins Ago

Stocks ripped higher on Wednesday after Federal Reserve Chairman Jerome Powell said interest rates are close to neutral, a change in tone from remarks the central bank chief made nearly two months go.

The Dow Jones Industrial Average climbed 550 points to its session high and was on track for its best day since March 26. The 30-stock index was also up more than 1,000 points for the week.

The S&P 500 jumped 1.9 percent as traders took the comments to mean fewer rate hikes were coming in 2019 that could derail the bull market. The Nasdaq Composite advanced 2.4 percent. The Dow and S&P were now positive for November after Wednesday's comeback.

Read more: https://www.cnbc.com/2018/11/28/stock-market-wall-street-looks-to-fed-chair-speech-and-trade-news.html

[progree]

1. When stocks go up, people say, "its a bubble". When stocks go down, they say, "I told you so"

[mahatmakanejeeves]

4. Well, in my opinion....

Stocks will fluctuate.

The limits to the regular amount I can contribute to my 401k and the catch-up amount I can contribute have gone up for 2019. I have already arranged to increase my contributions. I haven't looked in a while, but I'm pretty sure it's all going into equities.

So if stocks are for suckers, I'm a sucker.

Full disclosure: the best thing you can do is not to take investing advice from me. About the only clunker I avoided was Enron. I don't know how I missed that one, as I loaded up on all the others. The good stuff? Not for me.

Thanks for writing.

[onenote]

6. Not just you. No one here should take investing advice from anyone else here!

I've seen some really bad predictions here over the years.

[LanternWaste]

5. No more and no less than...

When stocks go down, people say, "its a correction". When stocks go up, they say, "I told you so"

[progree]

10. Yup, a correction or a bear market. But they say it always has gone on to set new all time highs

They say the general trend from the beginning to the present is for higher lows and higher highs

They say the market has never, ever, ever set a new all time low, not even once. But it periodically sets new all time highs.

They say "time in the market beats trying to time the market", and point out that timing the market requires two good decisions: when to get out, and when to get back in.

They may point to irritating statistics like the S&P 500 returning an annualized average of more than 10% since 1926 (on average, that's a doubling every 7 years. On average).

One cannot invest in an index, but one can invest in an index fund, such as the Vanguard S&P 500 index fund (VFINX), to take a broad market index fund with the longest track record, that represents 75 to 80% of the U.S. stock market by capitalization.

Since its August 31, 1976 inception, the Vanguard S&P 500 index fund (VFINX) with dividends reinvested and after expenses, has returned 11.18%/year on average (through Nov 23, 2018). It has increased 87.75 fold during this 42.22 year period (1.1118^42.22 = 87.75).

https://www.thestreet.com/quote/VFINX.html

[Bengus81]

2. Pfffttt...going up because Trump told Powell to go say something good to the press....

BS manipulation...........

[IronLionZion]

3. The wealthy have already sold high

the future looks bleak for stocks. This is just a bump based on emotion, not fundamentals.

[onenote]

7. Which fundamentals look bleak?

[IronLionZion]

8. Corporate debt, and household debt, general slowdown in growth

tariffs and reduction in trade are causing inefficiencies and wasted inventory. Same with the problems around immigration and general hostility and division

https://www.cnn.com/2018/11/27/economy/economic-risk-factors/index.html

The US central bank warned, in its first report on vulnerabilities in the financial system, that escalating trade tensions with Beijing and other sources of geopolitical uncertainty could spark a decline in investor appetite for risk — a problem given the recent run-up in stocks and other assets.

"The resulting drop in asset prices might be particularly large, given the valuations appear elevated relative to historical levels," the Fed cautioned in its report, which outlined a number of risks facing the American economy a decade after the financial crash.

A "significant fall" in asset prices would make it more costly for nonfinancial businesses, which are already highly leveraged, to obtain funding, the Fed cautioned.

https://www.cnn.com/2018/11/28/business/fed-economic-stability-report/index.html

[onenote]

9. Thanks.