XAO (ASX) weekend lounge 23/11/18

Originally posted by 48&34 ↑

Originally posted by radx
Hello @48&34,

Do you believe the Fed will continuing raising rates at the normal pace of 25 base points?
Or raise rates by a smaller percentage but still at the same speed as before?
Or.. halt rate hikes after December, for a while and then maybe only raise them .25% every 6 months or so instead of every quarter?

Hello @sci9249,
I was only looking at US market numbers for the percentage of algo/quant trading.
It was/is hard to find an exact figure but the numbers I was finding from google searches were putting it in the 70-90 percentage range.
I think it may be lower on the ASX though but I can't confirm.

As the percentage has become larger each year or from each previous crash, I imagine that the downward moves will become a lot more violet for the simple fact of the emotionless automatic selling happening..

Where as if it was mostly just discretionary trading then there's always another level of "support" to justify not selling yet..

Hello @Anton Chigurh,

I understand there's a an oversupply happening in the Oil market and that Trump or or may not have contributed to this fact.. but wouldn't the massive drop in Oil and the reported slow down in demand (from EM's) bear some weight on the Fed's decisions for further rate hikes?

OPEC have revised down their demand forecasts in 2019 for the 4th consecutive month since July this year...
Although demand is still forecasted higher than 2018, at this point in time.

In 2018 we had seen that the majority world's markets all have decent declines before the US markets had even started..
The US may have likely faltered earlier also if it wasn't for the last 'steroid push' in artifictual growth from the massive corporate tax cuts and stock buybacks.

Now that peak growth appears to have come and gone then so should have peak profits and peak share prices.

Fed Chairman Jerome Powell also made what appeared to be a very or 'more' hawkish comment in early October saying that "the Fed was still a long way from neutral".

Could it be that the Fed speakers sudden change of tone to that of a more "dovish" one, suggests that they're now also seeing data that shows an accelerating decline in Growth..?

Given that the Fed's interest rate policy is to be 'neutral' and that now growth in the economy appears to be slowing, couldn't this signify that December really is the last rate hike?
Especially if the Q4 economic indicators show decent retracements and that any further rate hike from here would actually be going against their own neutral policy?
Hi Radx,
My thoughts on the Fed is that it will probably do it 0.25% increments, not less. We will get one in December, and we'll get another one in the Spring in the US. If they are not in a Bear market, then another about 4 months later. Don't know after that, but Powell is a little more hawkish than his predecessor. When business is starting to hurt and GDP has dropped in 2 or 3 consecutive quarters the Fed will announce a pause, saying that inflation figures are still below their ideal target, I think about 2.5%. By then interest rates in the US will be just a bit too high to match their current economic conditions. While on the topic, my thoughts are that in Aus. we are not going to get an interest rate rise for ages, and a drop is more likely than a rise in 2019.
Also a severe credit squeeze, significant drop in house and apartment prices, and investors leaving the housing market, which will accelerate the drop for residential property. When Shorten becomes PM, he will change legislation quickly making all of the above even worse.

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One of the only indexes looking good at the moment is the REIT.