Quote:
Originally Posted by lezinterracial
Kind of odd. Fed said that they will keep buying bonds, But might slow down later this year. Market goes down 200 points.
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Makes total sense. The fundamentals of this market has been pretty poor. Forward earnings is not that great. Earnings growth was maybe 1-4% but the market was already up ~15% on the year (and still is up roughly 15%) on the year. Since November, the % is even crazier (up ~20-25%).
The only thing driving the market is up is the Fed. Everyone buying stocks because the "fed" is printing $. If you follow the market at all, this is the only mantra you hear. So the notion that at some point in the future it will begin to end, is going to trigger a sell off.
Some other things to think about
:
1. The S&P could sell off to 1550 and still be up ~10-11% on the year by December.
2. The S&P was at 1350 in mid-November, and it's not as if the economy has been that great.
They can't keep 0% interest rates forever....