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Stocks Tumble To Red For September As Copper, AUD Crumble
US equity markets are sliding this morning on the back of AUDJPY fun-durr-mentals as the USDollar pushes to new 15-month highs (AUD at 6-month lows). This has pressed Nasdaq red for September (joining the Dow, S&P, and Russell). Treasury yields are modestly higher but commodities are sliding with copper the worst... makes us wonder if this is follow-through from China's huge adjustment to CNY overnight.
fun-durr-mentals..
As AUD weakness leads the USD surge...
Plunging most in 9 months...
Pushing stocks red for September...
As Copper leads the commodity collapse...
Charts: Bloomberg
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Nothing stops a selloff quicker than a ZH bearish post.
beat me to it. Yes, wake us when the Dow "tumbles" 8,000 points...
8,000? You're optimistic. Personally I'm waiting for this thing to vaporize down to 4000.
We are fast approaching a top when a tumble is a 10 point intraday move.
pods
Correct, the "Zimbabwe market", the market is irrelevant, how said market is priced is another thing altogether.
Beat me to it, Ness. These types of posts always are bullish.
Green by noon. If not sooner.
Aaaand, we have a bottom.
At this point Doc I would say even money whether this is a market chart at all or just the weight chart of one of the aliens that is running this little terrarium.
pods
Previous Close 17,111.42
Low of Day -17,010.50
Total Dow Drop =100.92
There is no manipulations.
BABA-selling Cartel will defend SPY 200, watch
Oh, I expect they'll step in long before 200 - probably at 1000 or something in that neighborhood.
see that? Goldman, Morgan leading BABA pigdump in COMPLETE CONTROL
Wait, what? Stocks can go lower? As in actually being worth less the next day or so?
I can't believe I can still buy an oz of silver for under $20.
Well it only costs $5 to dig it out of the ground............
I miss Methman.
pods
Your gonna love it at 6 then
Tell that to those that bought over $40, followed by weeping and gnashing of teeth.
Cue central bank manipulation...
http://olduvai.ca
Why would interest rates surge on the announcement of the end of Fed stimulus? (Last year.)
And why is Wall Street surprised by plunging rates this year?
Small business growth has been contracting ever since the ACA was passed. Governmet has gotten bigger not smaller (just look at the size of the debt) and so have tax burdens at the State and local levels. We've already had a nasty downturn in Q1 be reported...oil prices are rolling over, coal prices have collapsed. When measured relative to the amount of cash flow being generated and I'm really struggling with how we avoid a second Detroit "only bigger."
"oil prices are rolling over", right... wake me when diesel is back under $2.00 per gallon. Every major city on the fucking planet is "Detroit" now.
beginning to look interesting...
hit buy on any zh post which begins with those two words. lulz
another USJPY ramp there to hoist the markets while Gold and Silver get another thumping, however European Indexes fading AH and a big move up in European Yields especially France & Bund rates touching 1% again
According to the Federal Reserve Bank of San Francisco:
http://www.frbsf.org/economic-research/publications/economic-letter/2014/september/assessing-expectations-monetary-policy/
Assessing Expectations of Monetary Policy
An ongoing concern has been that the public might misconstrue the Fed’s forward guidance about future monetary policy and underappreciate the extent to which short-term interest rates may vary with future news about the economy. Evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants. The public also may be less uncertain about these forecasts than policymakers.
Recently, subdued levels of volatility in financial markets have received some attention. For example, Federal Reserve Chair Janet Yellen (2014) noted that “indicators of expected volatility in some asset markets have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward.” Prices of financial assets, such as stocks and bonds, are sensitive to unexpected changes in interest rates because their present values are determined by discounting future cash flows. Thus, the low volatility in asset markets could, in part, reflect market participants’ relative certainty about the future course of interest rates.
In this Letter, we assess the private sector’s views about future monetary policy in terms of both expected levels of the short-term interest rate and the uncertainty or disagreement in those expectations. Through its “forward guidance,” the Federal Reserve’s policymaking body, the Federal Open Market Committee (FOMC), provides an indication to the public about the stance of monetary policy expected to prevail in the future. Furthermore, since 2012, the FOMC participants’ projections of the appropriate target for the federal funds rate over the next several years and in the longer run have been included as part of their quarterly economic projections, which are released to the public. Research has shown that this communication of interest rate projections can better align the public’s and the central bank’s expectations, which could lead to improved macroeconomic performance (see, for example, Rudebusch and Williams 2008). However, an important concern is that the public might not give enough weight to how dependent the central bank’s guidance is on both current and incoming data. Thus, the public could underestimate the conditionality and uncertainty of interest rate projections.
We assess the public’s expectations about future monetary policy from three sources: (1) surveys of economic forecasters and primary dealers, (2) market prices of federal funds and Eurodollar futures, and (3) estimates from a financial-econometric model. We then compare these public expectations with the expectations reported in the June FOMC participants’ federal funds rate projections (Board of Governors 2014). Our analysis shows that, on balance, the public seems to expect more accommodative policy than FOMC participants. One measure of uncertainty also shows the range of the public’s forecasts is somewhat smaller than that among FOMC participants, suggesting the public also may be less uncertain about their projections.
Surveys of economic forecasters and primary dealers
We look at two surveys of private-sector professionals about their monetary policy outlook. One is the monthly Blue Chip Financial Forecast, based on a survey of about 50 professional economic forecasters on key financial variables, including the federal funds rate, up to five quarters in the future. For our analysis, we use the August 2014 Blue Chip forecast based on polling from July 23–24. The other is the Survey of Primary Dealers regularly collected by the Federal Reserve Bank of New York before each scheduled FOMC meeting. In the most recent survey dated July 21, 2014, 22 primary dealers—brokers or financial institutions that are able to purchase Treasury securities directly from the Fed—submitted forecasts of the target federal funds rate for the fourth quarter of 2014 through the first half of 2018, as well as their expected long-run value.
Figure 1 shows the expectations for the future federal funds rate from the two surveys, and the June FOMC participants’ funds rate projections, collected in the Summary of Economic Projections (SEP). The Blue Chip median forecast of the federal funds rate at a quarterly average of 0.80% in the fourth quarter of 2015 appears to be consistent with the median SEP projection of 1% at the end of 2015. The primary dealers’ median forecast of the most likely date for the first funds rate hike was the third quarter of 2015. Note that their median forecast for the end of 2015 and the end of 2016 were 0.75% and 2.13%, respectively. These median forecasts are lower than the median SEP projection of 1% at the end of 2015 and 2.5% at the end of 2016.
In addition to the median forecasts, Figure 1 also shows the 25th and 75th percentile forecasts from primary dealers and FOMC participants. For a certain date in the forecast, the 25th percentile is the point at which one-quarter of the respondents believe the fed funds rate will be lower, and the 75th percentile is the point at which one-quarter of the respondents believe it will be higher. The distance between the 25th and 75th percentiles measures the forecast dispersion, an indicator of uncertainty or disagreement among the forecasters. In the July survey, the dispersion of the primary dealers’ forecast was smaller than that of the SEP projection. This suggests that FOMC participants were more uncertain about the future course of monetary policy than primary dealers were.
Looking at the dow (4) hour chart, looks similar to July before the fall. It's just chopping sideways, and the usdx (5) hour chart looks ready to roll over. We could see some selling into the end of the week.
The Fed. is boxed in. If they talk rate increases, that's mostly priced in now. (usdx up % 5.00 since May) That should be negative for equities.
If the Fed stays dovish they lose credibility with the markets.(usd sells off) Looks like a no win scenario to me.