Good for a punt?, page-36

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bedger

7,775 Posts.

7032

27/05/22

07:01

Post #: 61650631
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Originally posted by iminvestor101: ↑

by historical measures, oil is cheap right now.

interest rates on 10 year yields have peaked imo.

the interest rate im currently getting is a one off 4.91%p.a. assuming the instrument i hold for my fixed income remains at the current price by end of year and then 2.25% running after that. i have no mortgage or rent costs.

the market has priced in too many rate hikes and thats why yields are falling and bonds are rising. they wont hit anywhere near the number hikes currently being predicted. as such interest rates should fall and a more healthy rate should be established.

the point is that yields imo have peaked. add in a china slow down and that should ease some inflationary pressures, at least in australia, being that over 50% of australian inflation is imported and i would guess the vast majority comes from china. so peaking bond rates and peaking oil prices could be in given that the current situation is pretty horrid as we speak. how much into the future is the current market priced? i think further than the recessionary possibility and too far into the future, hence perhaps last nights reversal in sp500 and also falling rates. the reserve banks can wipe off employment right now and focus on inflation by doing what they are doing. the market will take care of the rest as expectations adjust to the actual rate of hikes from fed. in other words, the fed underestimated inflation and until recently investors started overshooting inflation expectations.

the fed will likely allow for more inflation on opposed to a deceleration of the economy, given that they have few tools left to increase employment and inflation if they had to. if 2020 teaches us anything is that the central banks will do whatever it takes to support the labour market and thus the broader economy.

those are my musings anyways. i think things should take more time to see the actual deterioration that equity markets might be pricing in as after all, the stock markets are not the economy. the economy imo lags the stock market and i dont see things getting materially worse than they are right now. could mean upward surprises? too many variables to know exactly what is going on, hence why im taking a punt here.

my next order is in at .83 so we shall see. i dont have much allocated for zip, only two buys of 12.5k each.

strictly a punt.

gltah and dyor

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Absolutely agree on many points. I went very short US/tech late last year on all this. Now a little long in expected bounce. It was so obvious Fed and equity mkts got inflation wrong. Now theyve gone the other way. No way the US mkt can withstand the interest rate hikes forecast.

Fed will lose its bottle. I expect a short term bounce generally, but still a medium term decline in equities before Fed comes under pressure to back off. Short index futures and long stocks I like.

For this thread/stock, Affirm +22% overnight Should get a big bounce in ZIP today. ZIP is ridiculously undervalued vs it's peers. I don't like the BNPL business at all, but know value.

Last edited by bedger: 27/05/22

ZIP Price at posting: 85.0¢ Sentiment: Buy Disclosure: Held
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