Another new theory for the Downturn on CNBC

[william the wie]

Theory 1) payroll growth is going up fast and squeezing margins
Theory 2) the trade war is screwing up logistics trains
theory 3) Interest rate increases are squeezing margins
the all new theory 4) Buy back black out period.Without going into details why didn't anybody know about this two days ago?

 

[Marion Morrison]

Theory 1) payroll growth is going up fast and squeezing margins
Theory 2) the trade war is screwing up logistics trains
theory 3) Interest rate increases are squeezing margins
the all new theory 4) Buy back black out period.Without going into details why didn't anybody know about this two days ago?

Do you day trade? You certainly seem tuned into the markets.

 

[Oddball]

Theory 1) payroll growth is going up fast and squeezing margins
Theory 2) the trade war is screwing up logistics trains
theory 3) Interest rate increases are squeezing margins
the all new theory 4) Buy back black out period.Without going into details why didn't anybody know about this two days ago?

Maybe for the same reasons that Madame Cleo the psychic couldn't foresee the cops arresting her for fraud.

 

[william the wie]

This ambiguity towards Trump and his successes produces really odd results. mid-terms are always good for the market and given the declines seen in the rest of the world's markets, US markets having a down turn too weak to be a correction is outstanding. But except for oan and Fox nobody mentions that and those two say very little about this.

 

[Paul Motter]

Theory 1) payroll growth is going up fast and squeezing margins

This is causing inflation which is the main reason the Fed wants to raise rates - which is making bonds more attractive as investments causing institutions to sell stocks. Also (as in Amazon case) the cost of raising all wages cuts into the net profit (aka "margins")

Theory 2) the trade war is screwing up logistics trains

This is probably true - there is bound to be some pain before the deals are donw. NAFTA is mostly renegotiated but the Chinese are holding out

theory 3) Interest rate increases are squeezing margins

Not sure what you mean by "margins" but higher rates tend to make the cost of business expansion more expensive which cuts into profits.

the all new theory 4) Buy back black out period.Without going into details why didn't anybody know about this two days ago?

All companies have to go into a "quiet period" some 30 days before they announce earnings, since internal stock trades have to be disclosed publicly they are not buying back. This happens every quarter, they just don't mention it (1, it is well known) and because this quarter stocks buybacks are being "missed" for their price support more than usual.

 

[Picaro]

Doubt if the tariffs have that much to do with anything as lower consumer incomes around the world do. They can brag about 'jobs' growth, but they're still low paying and they get sucked up by such things as car insurance, electric bills, medical expenses, clothes, that sort of stuff, so only a marginal increase in disposable incomes, hence all the gambling that pumps up stocks before the release of data and sales, and the drops afterwards. The rich never slow down their consumption, so markets that cater to them aren't as volatile, except for housing, with the foriegn money flooding into U.S. real estate in some parts of the country.

And yes, day trading and auto-trading software inflates and deflates prices more so and more rapidly than other factors as well.