STOCK MARKET CRASH 2019-Why Hasn't The Stock Market Crashed?📉

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STOCK MARKET CRASH 2019-Why Hasn’t The Stock Market Crashed? 80% of the stock market is now on autopilot!
Passive investments control about 60% of the equity assets, while quantitative funds — those relying on trend-following models instead of fundamental research — now account for 20% of the market share, according to estimates from J.P. Morgan.
Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, the bank said.
It’s no secret that machines are taking up a bigger and bigger share of investing, but the extent of their influence is approaching shocking proportions. It is as high as 80%, according to one major investing firm.
Passive investments such as index funds and exchange-traded funds control about 60% of the equity assets, while quantitative funds, those which rely on trend-following models instead of fundamental research from humans, now account for 20% of the market share, according to estimates from J.P. Morgan.
Goldman Sachs: It Is Too Early for ‘Insurance Cuts’
Goldman, which thinks the Fed will leave rates unchanged this year, says the “hurdle for such [rate] cuts is likely to be higher than widely believed.” It acknowledges some investors have begun to price in “insurance cuts”—in other words, the prospect of the Fed cutting rates before a downturn to try to stave off an economic slowdown. But it believes that prior cuts made in 1995-96 and 1998 were based “as much on observable deterioration as on an insurance motive.” Economic conditions today don’t seem to warrant a cut yet, Goldman says.
UBS Global Wealth Management: Markets Are (Improperly) Pricing In Recession-Like Scenario
The market is currently pricing in around a full percentage point worth of rate cuts by the end of 2020, according to UBS . That is “a rate of easing that would only be justified by a recession, which we see as unlikely,” the firm says. One recommendation it is making to investors: to reduce holdings of U.S. government bonds relative to cash, a bet that should pay out if the Fed doesn’t deploy rate cuts imminently.
Morgan Stanley: Trouble Ahead for Stocks if the Fed Disappoints
Although stocks have generally drifted higher just before and after Fed cuts, their performance has been more mixed over periods longer than a month or two out from the cuts, Morgan Stanley says. “A cut meets expectations and is gently supportive of equities for a time, but a failure to cut in July (in-line with our economists’ expectations) risks downside in equities and a tightening of financial conditions,” the firm says.
JPMorgan: Even if the Fed Cuts in July, That Could
Be Bad for Stocks Anyway
JPMorgan , also skeptical the Fed will meet investors’ expectations, warns that rate cuts might not help prolong the U.S. stock rally anyway. A Fed rate cut should ultimately “be negative for stocks since it would provide little actual economic stimulus while stoking recession fears,” it says. That suggests the Fed has to walk a fine line when it releases its policy statement Wednesday—acknowledging that it is open to lowering rates should economic data warrant it, but not creating panic about the economic outlook.
Bank of America: The Rate Cut Is Coming, Just Probably Not Until September
Unlike some of its peers, Bank of America is expecting a rate cut before long. But it isn’t pinning its hopes on July: BofA expects the Fed to lower the federal-funds rate by 0.25 percentage point in September, then again in December, then once more in early 2020. The firm made its call after cutting its U.S. GDP forecast for the second time this year, based on the prolonged trade fight between the U.S. and China.
“The Fed will not likely sit idle and watch the economy weaken,” the firm says.

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Comments

AMP Jones says:

I like many others keep saying "I am waiting for a really decent pull back in the market". But it just keeps inching higher every week. I as well as many others have been missing very decent portfolio profits. I just do not know what to do but I know I need to continue gaining profits for my retirement accounts. I am simply put SPOOKED in these markets and scared of the sudden pull back if I dump my money back into the markets. UHHHHHHH I bet some others can relate with me here.

Franklin and then a Ostrich Jones says:

Stock Market investing and subscribers, right now what modes of currency should i invest in besides the USD? I may not be a warren buffet however i know when to trust the old intuition

Arvabelle - Money & Mindful Living says:

Super interesting analysis! We'll see what the fed ends up doing with interest rates 🤷‍♀️

Bullish BearTrader says:

Hey if you trade check this out…https://www.youtube.com/channel/UCsfp0zw1hNxpy_wDig8oExA

F S says:

Jobs report was good. Rate cut might come in September. Let's see how the earning season goes. Good information as always

Investing Education says:

I'm among a shrinkin breed of managing my own money. Atleast for now but these etfs hav been on a tear.

Andrew Trapman Trading - Investing says:

We are at the end of the bull Cycle.October and December the "Crash prevention Team" artificially keeped the market up October and December. Companys are buying up on their own stocks. Im cash – and as you know Gold and Silver miners (and Im holding personally)

TurkishSmurf says:

it hasnt crashed cause of the stonk meme papa bless

Mark Kubes says:

Can you imagine what will happen when someone yells FIRE and ETF investors run for the exits? Perfect storm! Cash on sidelines until CRASH. Tick Tock – Tick Tock.

David Sisung says:

rumor is this guy is a college professor. is this true?

Space Monkey says:

Any thoughts on Deutsche bank?

Space Monkey says:

I agree that next cut will be in September17-18* fed meting. And thats when things will get interesting…. The cut will signal that its time to unload.

J Jz says:

In a nutshell prices will continue to go up. Still a lot of money in the sidelines.

begley09 says:

So many people saying a crash is coming would tell me it aint happening.

Dividend Income says:

I think earnings will be a disaster this quarter and then Fed will cut rates after seeing the conclusion of this coming earnings season.

James Tyler says:

No red days-green everyday lmao

kelly ryan says:

I’m building up cash ready for anything

Jeff Calhan says:

The stock market keeps grinding higher and higher, but I'm skeptical of how sustainable this is!

Jennifer Babe says:

I'm thinking that it is time to lighten up on our portfolio holdings

Kay Luna says:

The stock market is demonstrating euphoria

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