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Thread: Markets collapse - Dow down 3.5% in single day

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    Default Markets collapse - Dow down 3.5% in single day

    Dow down 1160 points

    PPI ( produced price index) is even more inflated then CPI (consumer price index)
    meaning corps are eating into profit -they cant pass all the costs onto consumer

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    Quote Originally Posted by dukkha View Post
    Dow down 1160 points

    PPI ( produced price index) is even more inflated then CPI (consumer price index)
    meaning corps are eating into profit -they cant pass all the costs onto consumer
    Is that why so many companies have experienced record profits?

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    Quote Originally Posted by floridafan View Post
    Is that why so many companies have experienced record profits?
    you need to catch up. Walmart profits decreased 25%, etc.

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    Quote Originally Posted by dukkha View Post
    you need to catch up. Walmart profits decreased 25%, etc.
    One company does not reflect the entire economy, just look at the profits of oil producers and distributors.

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    Target Stores had a really bad day

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    The Fed poured billions into the market during Covid. People were losing jobs, not paying rent, and having a hard time feeding children, but corporations needed money for dividend hikes and share buybacks.

    Now the the Fed dumped the corporate bonds, the market is leveling out. In essence, the fantasy is over. I don't think it's the bottom yet. I'm waiting a little longer to start buying.
    Once in a while you get shown the light, in the strangest of places if you look at it right.

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    Quote Originally Posted by dukkha View Post
    Dow down 1160 points

    PPI ( produced price index) is even more inflated then CPI (consumer price index)
    meaning corps are eating into profit -they cant pass all the costs onto consumer
    thank you Joe Biden and the democrats
    Dutch Uncle finally admits he is a steaming pile of chickenshit!

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    Walmart slides and rattles retail sector with lowered profit guidance
    https://seekingalpha.com/news/383986...edium=referral

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    https://seekingalpha.com/news/384032...s-stock-market
    Panic that inflation is cutting deep into corporate profits sparked a wave of Wall Street selling on Wednesday. With consumer stocks leading the retreat, the Dow Jones Industrial Average tumbled almost 1,200 points, marking the ninth largest single-day point drop in history.

    Meanwhile, the S&P 500 and Nasdaq Composite each shed more than 4%. The sell-off came as investors dumped consumer names following disappointing earnings numbers from Target.

    The Dow finished -3.6%, the S&P 500 closed -4.0% and the Nasdaq ended -4.7%.

    The Dow Jones posted a decline of 1,164.52 points, ending the day at 31,490.07. The S&P 500 dropped 164.67 points to close at 3,924.18. The Nasdaq sank 566.37 to conclude trading at 11,418.15.

    All 11 of the S&P sectors finished deep in the red. With the retail sell off, Consumer Discretionary and Consumer Staples both plunged more than 6%. There was also heavy selling in Info Tech and Industrials.

    Target plunged 25% after announcing results earlier Wednesday that echoed the margin problems Walmart reported earlier in the week. The downbeat results had reverberations throughout the sector, including an outsized impact on mall stocks.

    In the bond market, U.S. Treasury yields fell across the board. The 10-year Treasury yield declined 8 basis points at 2.90%, while the 2-year shed two basis points to hit 2.68%.

    On the economic front, April housing starts fell more than expected, while building permits also dropped.

    "Starts and permits are likely to fall sharply over the next few months, tracking the downshift in new home sales, which in turn follows the ongoing rollover in mortgage applications," Pantheon Macro's Ian Shepherdson said. "Demand likely has not yet hit bottomed, allowing for the usual lag between increases in rates and the response from potential homebuyers, so we think sales and starts could easily fall through the end of the summer."

    "Housing punches above its weight in driving opinions about the state of the broad economy, so the rollover we expect to see is a key part of our story that the Fed will switch from 50bp hikes to 25bp in July or September."

    Retail and housing stumbles are adding to speculation of a recession, which is now the base case for Wells Fargo. But MKM is skeptical.

    MKM's Michael Darda pointed out in a note that the National Bureau of Economic Research, the official arbiter of U.S. business cycles, defines a recession "as a period of declining production, sales, income and employment usually lasting more than a few months. There is nothing in the data (so far) that would come close to meeting this definition. The common refrain that a recession is 'two negative quarters of GDP growth' is a widely held but errant assumption."

    Darda added: "Moreover, the nearly universal assumption propounded on financial TV, a holdover from the previous cycle, that every stock market correction is a 'growth scare' is belied by the behavior of credit markets which have tightened very little relative to the decline in equity prices or the ongoing upward sloping nature of yield curves that actually predict recessions."

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    A system that is swamped with debt can not tolerate interest rate increases, but that is the only way to deal with inflation.

    This is going to hurt.
    "Performance never stopped mattering, real life is NOT WOKE FANTASYLAND!"<<<<<<<<<<<Hawkeye the Wise

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    Quote Originally Posted by floridafan View Post
    Is that why so many companies have experienced record profits?
    Walmart reported a 25 percent drop in profits to $2.1 billion for the quarter ending April 30. That translated into $1.30 per share, below the $1.48 expected by analysts.
    Revenues rose 2.4 percent to $141.6 billion.
    Once in a while you get shown the light, in the strangest of places if you look at it right.

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    Quote Originally Posted by floridafan View Post
    One company does not reflect the entire economy, just look at the profits of oil producers and distributors.
    oil isnt discretionary spending, and that is strickly driven by supply and demand
    basically consumers are buying food and energy, and paying rents and mortgages.
    I'm not sure about auto.

    Also Apple (largest US company) was down 22%

    gotta eat , pay the rent, and drive to work

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    Quote Originally Posted by Hawkeye10 View Post
    A system that is swamped with debt can not tolerate interest rate increases, but that is the only way to deal with inflation.

    This is going to hurt.
    i think you are correct. Rate increases should have started much earlier -
    but Biden/Congress was too busy inflating the money supply
    the classic end to runaway inflation is a recession

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    Quote Originally Posted by Althea View Post
    [FONT="]Walmart reported a 25 percent drop in profits to $2.1 billion for the quarter ending April 30. That translated into $1.30 per share, below the $1.48 expected by analysts.[/FONT]
    Revenues rose 2.4 percent to $141.6 billion.
    why are you highlighting that revenue rose?

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    Brandon says print more money.
    ​................

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