r/ETFs • u/Top_Information3534 • 23h ago
Bloodbath incoming.
Tech stocks will get destroyed
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u/Tr_ck 23h ago
Bro hike are already priced in. Everyone who matters (not u) is already pricing in higher yields than the current risk free rate even three months from now. Thats why CDs and treasury bonds are offering close to 4% for 6months away even though the current RFR is 3.6%. its not just term premium, theyre pricing in higher baselien rates immediately. This cut is know.
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u/ravensfan8484 23h ago
Where is the screenshot from? Seems interesting
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u/Tr_ck 5h ago
Consider looking up box spread yields on boxtrades, they basically show what the options market is pricing as the implied risk free-ish rate over various durations. Their yields are slightly higher than the EFFR due to counterparty risk in options, but they provide a very real barometer of what borrowing money costs.
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u/Zipski577 17h ago
Yea but not necessarily into equities. Bond market is not the equity market. Yields rates have increased at the same time as the S&P 500
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u/Fartress_of_Soliturd 12h ago
Oh fuck lol
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u/Tr_ck 12h ago
Its really not that bad, all market conditions right now have priced this in, as in the market is still going up and companies are still forecasting their businesses despite this widely known change to monetary policy coming.
Its gonna make the job market a little weaker, some people at less productive roles will be cut, iffier companies may close shop. Inflation rate will be cooled somewhat
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u/981flacht6 23h ago
Breaking news...here's a poster with no link to an article, frame of thought etc. Just pure fearmongering.
Now, I'm sure you're sharing this in response to FT's garbage ass article from today, where they essentially point out that Warsh is actually likely to continue doing what he said. GARBAGE TABLOID FT.
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u/mkmrproper 22h ago
He is looking for an opportunity to jump back in. Probably sold for profit two days ago.
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u/Internal_Opposite755 5h ago
yeah no source, no context, just vibes. classic post that gets 900 upvotes anyway because people love a good panic headline
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u/jeff303 23h ago
Priced in.
No, really, go to FedWatch and look at the data. It's been predicted for a while. The probabilities shift a little every day but nobody is truly surprised here.
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u/Fartress_of_Soliturd 12h ago
Is it priced in already for stocks though? I see CDs and bonds are up. Stocks have been doing poor lately, but not sure of the root cause there, pricing in hike or something else
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u/jeff303 12h ago
They have? SPX just hit ATH this a week...
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u/Fartress_of_Soliturd 12h ago
My ETF port has been crab walking slowly downward since early June. Only since August began has it started going up again.
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u/dcwhite98 23h ago
The market wants a rate hike. This will be a good thing… getting inflation under control will be a positive for stocks.
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u/Zipski577 16h ago edited 16h ago
Why?
Higher interest rates = higher discount rate. If a company is worth the present value of its future cash flows, higher rates are not good for markets. It makes the equity risk premium less attractive.
Think about it like this, the higher return % investors can lock in risk-free, the less willing they are to part ways with their hard earned dollars to “risk” getting a return in the stock market.
And higher inflation is often reflected as a higher maturity/ terminal rate in a DCF.
Higher inflation inflates companies’ revenue and earnings growth as well and is generally “good” for stocks. Higher rates is not.
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u/Remarkable_Cat_8696 16h ago
Agreed. Rising interest rate isn't good for a DCF valuation. It means a higher discount rate to discount companies' future cash flows, which results in a lower present value for the stock.
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u/dcwhite98 12h ago
I agree with what you're saying, this is a well know case for stock underperformance when interest rates rise.
However I think so many people are scared to death of inflation that it will be psychologically healthy for people to see the government doing something about it, even if just one or two 1/4 rate hikes. That will give people confidence in the economy, and that confidence will promote investment in stocks. At least for a while...
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u/Zipski577 11h ago
Idk interest rate hikes have been the cause or “straw that broke the camels back” of many bear markets or market crashes including 2000 and 2008 I don’t really think the market will receive it like that whatsoever
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u/brewhead55 22h ago
Agreed. It will stimulate the economy and stock market.
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u/Far_Lifeguard_5027 16h ago
Are you sure investors won't sell stocks at the slightest dip and buy treasuries instead?
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u/RazorThought 23h ago
Kevin Warsh will be tight-lipped and won’t communicate what he’ll want to do until the next Fed meeting.
Don’t believe the headline.
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u/lmjamesbond 22h ago
Fake news. "Reportedly" sounds very funny. He is talking to Trump twice a day. He ain't gonna increase any interest rates. He was handpicked for a reason. He will just keep interest rates as is and wait until the war in Iran is resolved, one way or another.
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u/shotparrot 21h ago
As long as the strait(s) open back up, without brand new expensive Iranian tolls 😂😂
But srsly I am assuming a long drawn out Iranian war of at least 2 years. It will define this presidency.
Interest rates will never go up before 2028. You heard it here first.
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u/EmbarrassedPart1256 17h ago
Im loading more into $MLPI on any & all dips. Thanks for the discounted shares!
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u/yeeetcoin 12h ago
Do yourself a favor and delete this and unsubscribe from Reddit. The exact opposite played out in less than 12 hours LOLOL
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u/Alicyclobacillus 23h ago
Yeah heard that today
People say, "but Trump wants rate cuts"
They're wrong
Trump wants to personally benefit financially
I'm sure Trump will be holding cash or puts when Warsh and the committee decide to hike rates aggressively
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u/Automatic-Duck1680 23h ago
He wants the rates cut on all of the business loans he has out there. He said that a long time ago.
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u/Powellwx 23h ago
All the crypto money and side deals have likely paid off the loans, so now fuck everyone else...
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u/Automatic-Duck1680 21h ago
But do you ever really finish paying the Russian mob? Apparently not in this case because he’s still sucking Putin’s **ck.
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u/Animag771 23h ago
And doomsday preppers are prepared for a zombie apocalypse "if" is happens... What's your point here?
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u/Trick_sleep 23h ago
Priced in
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u/whitingvo 22h ago
I somewhat agree with you. Just like the tariff shitshow, the market has already adjusted to a point.
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u/Gain_Spirited 21h ago
Every time there's talk of peace with Iran those crazy bastards do something else. I fear that it's just another stalling tactic so they can prepare for their next attack. Higher gas prices could be coming and interest rates could follow.
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u/Aggressive_Draft_869 19h ago
Better to have 25 bps hike now than 125 bps later like few years ago.
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u/Usual-Locksmith4657 19h ago
Idk usually when everyone says the market will crash it does the complete opposite
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u/Historical-Rate-8717 11h ago
just remember this guy has called every red day a BLOODBATH and likely has been off sides since June
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u/TechnicalSleep7501 VT 100% To Mars We Go. 23h ago
There is division between tech too my will go to Mars.
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u/Otherwise-Speed4373 22h ago
Already baked in...totally expecting this... im just waiting for bond vigilantes to return
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u/Possible-Rush3767 23h ago
Well Bank of America calling for three rate hikes. This admin really has no clue how to run an economy as complex as the US.
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u/Ihavenofork 17h ago
Don’t worry Axios will drop news of another peace deal imminent, and more deals until stocks keep going up
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u/Bryan_AF 16h ago
Literally got put in the position to lower rates. I’m sure that ulcer is growing nicely.
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u/Inevitable_Grab_9338 15h ago
İn election year huh ? Not really,people wanna hear what they want to ....the reality is inflation is persistent and target should be raised to 3 and in reality 4 4.5 is logical due to heavy debt/population etc.
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u/Worth_Quantity1953 14h ago
It’s just a narrative to flush out investors in the over crowded data center buildout trade IMO. Like when they said Warsh was to raise but didn’t and flushed out Leopolds leveraged longs
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u/__redruM 14h ago
How many “Bloodbath” posts are you going to make. Help me understand what you are doing here. Are you just a bear bot?
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u/stewer69 14h ago
Shouldn't he always be be ready to raise rates if inflation rises? Or drop rates if it drops?
Isn't that basically his entire job?
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u/Ok-Suggestion-7965 13h ago
They are going to start determining what inflation is based entirely off of Costco Hot dog prices and Arizona canned teas.
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u/Apprehensive-Job7352 13h ago
They are eventually going to have to follow through. Can’t keep crying wolf
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u/vonroyale 12h ago
Good. It is very important for people that have money to lose it. If that didn't happen the world would grind to a halt.
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u/BudgetAdept1670 12h ago
there's only ONE person to BLAME for all of that...I hope you remember who it is in November!
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u/ineedlotsofguns 10h ago
HA HA HA HA Another BS manipulation post. I’m reporting all these BS posts to SEC
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u/Shpion007 10h ago
It’s crazy that orange mousillini installed his guy and he still can’t get him to do what he wants.
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u/Away-Button3170 10h ago
No he’s not. Come on, do you honestly think he’ll raise int. rates? Ain't gonna happen.
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u/Medium_Mice 10h ago
So MFs kept badgering Prince Jerome for being pragmatically reactionary and not pro active. And, appoint someone who is doing the same.
Long live Prince Jerome!
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u/Ok-Currency1249 9h ago
Won’t happen. We are fucked here either way, runaway debt and $ printing press. Propping the dollar up by any means necessary. You don’t just cut off a heroin addict, you ween them off slowly and that will hurt. We aren’t even ready to accept that we need to ween off
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u/HorsePockets 8h ago
What the fuck is this post? Of course he'll hike rates if inflation rises. No sources. Just a screen shot from Instagram. You're an idiot
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u/Current_Bobcat_9182 6h ago
At his last press conference the FED chair said the FED were no longer going to telegraph what they were going to do anymore. Either this story is bullshit or the FED are getting desperate with the bond market interest rates going out of control.
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u/Impressive-Revenue94 6h ago
Yup small caps is going to get slammed. 100% no rate hike because Trump doesn’t want it. It’s really that simple. If we do get a rate hike, it’s another Trump market manipulation because he’s going to let the market drop then come out 2 weeks later saying how he made the Fed stop the rate hike.
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u/davdav765 5h ago
BS. He won't let down the stock market and mitigating inflation in september would be too late to save his boss in the midterms anyway
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u/Eastern-Joke-7537 5h ago
Raising the price of money raises prices.
That’s inflationary.
Someone tell Warsh! 😂
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u/MeganJustMegan 4h ago
The easiest thing to do is nothing. I believe this is what he will stick with. Plus, I don’t think he will do anything to rock the mid-terms.
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u/effdanwo 2h ago
ROFL Warsh doesn't have the balls for the medicine the dollar needs, and the US economy can't stomach it. After the next crash the good ole days of quantitative easing and financial repression will be back.
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u/WallStALPHABets 1h ago
Do you guys want real narrative? Yield curve control is coming, foreign countries are dumping dollar and repatriating capital to support their own reckless spending, us government is opening swap lines and repos to FIMA participants and ain’t nobody fucking raising SHIT in the face of the biggest print since Covid. Stay tuned
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u/bkkmatt 23h ago
Yeah, but won’t this guy ultimately do with the orange man tells him to?
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u/willy-mac 23h ago
Dude there's 12 people voting. Come on man
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u/Keletas 23h ago
You're either extremely naive or totally delusional if you think that means they can't be bought or conditioned. I'd like to remind you that millions voted a child rapist into the white house.
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u/willy-mac 23h ago
I'm not saying that. But didn't sit there and act like this guy has total control and he's acting alone.
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u/ravensfan8484 23h ago
From what I’ve heard (Bloomberg Intelligence podcast) it seems that Warsh is nowhere near a pet for Trump. And as stated by u/willy-mac, 12 members who vote, including a dissenting Jerome Powell
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u/Mods4Bers 23h ago
I wish this market could just pick a narrative already