Market Bottoms come 236 to 645 days after the first rate cut

[sortatino2]

Futures indicate the first rate cut coming this year in Q2 or Q3. Interesting article documenting market bottoms after the first rate cut. Through last 3 rate cut cycles, the market bottom comes 236 to 645 calendar days after the first rate cut. 


www.fool.com/investing/2022/10/30/do-fed-rate-cuts-signal-bear-market-bottoms/

[steelpony10]

sortatino2 ,

        I think rates are still going up or at least will hold steady for awhile. I don’t know about this year though.

         A recovery after a “recession”;which hasn’t occurred yet either usually takes on average 2.5 years from my experience.

         Bottom line for me anyway no matter what happens at least another 2 years plus of this. There’s a lot of problems to work out here and with trading partners worldwide still along with the political and any new unknown situations. Quite a mess to work through and it moves really slow for months usually.

[sortatino2]

I am not good at guessing . I can only take what the market tells me. Right now the market is telling us rates will be down 1% by December 2023 and down another 0.75 by December 2024. That is a pretty big start to the rate cutting cycle. If the futures hold and the last 3 rate cutting cycles hold true a market bottom this year or next.

[Fearchar]

Mar 27, 2023 18:26:14 GMT sortatino2 said:

Futures indicate the first rate cut coming this year in Q2 or Q3. Interesting article documenting market bottoms after the first rate cut. Through last 3 rate cut cycles, the market bottom comes 236 to 645 calendar days after the first rate cut. 


www.fool.com/investing/2022/10/30/do-fed-rate-cuts-signal-bear-market-bottoms/

Problem is they are counting the COVID panic as the market bottom for the 2019 series of cuts.

COVID was not due to cuts by the FED, but apparently rather than acknowledge that, they are counting it as "fitting in" with other cycles.

[sortatino2]

I think the point is that the fed is always late regardless of circumstance which leads to the market bottoming well after they make a policy change

[steelpony10]

Mar 28, 2023 0:06:33 GMT sortatino2 said:

I am not good at guessing . I can only take what the market tells me. Right now the market is telling us rates will be down 1% by December 2023 and down another 0.75 by December 2024. That is a pretty big start to the rate cutting cycle. If the futures hold and the last 3 rate cutting cycles hold true a market bottom this year or next.

           No one can predict the future, me included. But my feelings are hardly ever based on numbers. Call it gut or 40+ years of observation, humans follow certain behavior patterns.

            Usually rate hikes don’t start to “bite” until about a year from the start or so maybe this fall or early 2024. Banks are tightening credit because of recent failures which further slows the economy, layoffs accelerate etc. The snowball picks up speed downhill until it hits a wall, a recession.

             People are forced to spend eventually and banks have to loosen credit to stay viable, small cash dependent companies borrow first. Markets begin to rise as the herd returns back on it’s way to irrational exurberance again with corrections along the way. If this isn’t just a mild slowdown this takes months because a recovery has it’s corrections also mostly based on current headlines. 

[sortatino2]

Interesting article discussing market performance after any rate cut be it standard or emergency. Bottom line like the original post is that markets go down on average for quite some time


marker.medium.com/the-surprising-thing-that-happens-to-stock-markets-when-the-fed-cuts-interest-rates-a46e22405309