Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

Ok, I am a fish. I was talking to a guy at the poker table today that seemed semiwell vesred in this and he was talking about buying up a lot of pepsi stock, with the intention of holding it for a long time, assuming they cut the rates. I was wondering what is the point of this? Are most of the stocks expected to take a downward turn if the rates go down? Any other elaboration about this would be appreciated.

market says:
 

rougly 12% of nothing, ~43% 25% cut, and ~45% of 50bp cut.

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

[ QUOTE ]
Ok, I am a fish. I was talking to a guy at the poker table today that seemed semiwell vesred in this and he was talking about buying up a lot of pepsi stock, with the intention of holding it for a long time, assuming they cut the rates. I was wondering what is the point of this? Are most of the stocks expected to take a downward turn if the rates go down? Any other elaboration about this would be appreciated.

[/ QUOTE ]

If rates are cut, stocks will hold steady or go up, in all likelihood.

James

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

[ QUOTE ]
[ QUOTE ]
Ok, I am a fish. I was talking to a guy at the poker table today that seemed semiwell vesred in this and he was talking about buying up a lot of pepsi stock, with the intention of holding it for a long time, assuming they cut the rates. I was wondering what is the point of this? Are most of the stocks expected to take a downward turn if the rates go down? Any other elaboration about this would be appreciated.

[/ QUOTE ]

If rates are cut, stocks will hold steady or go up, in all likelihood.

James

[/ QUOTE ]

not exactly.

if the market is pricing in >25bps of cuts (which it is...or at least was last week) and the fed cuts 25bps, the equity market could fall as the cut would be less than expected.

it may just hold as it shows the fed is willing to do "something" to mitigate forthcoming negative effects on the real economy. so depending on the size of hte cut, markets could go up, down, or sideways [img]/images/graemlins/wink.gif[/img]

Barron

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

They will definetly cut rates.......the question is how much.

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

probably 25 points but whether 25, 50 or none it shouldnt matter that much going out a ways. it is only a bandaid what they do right now.

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

[ QUOTE ]
probably 25 points but whether 25, 50 or none it shouldnt matter that much going out a ways. it is only a bandaid what they do right now.

[/ QUOTE ]

Your exactly right..........

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

I suspect it will be the expected 25 bps cut but what may prove to be more important is the bias of their forward looking statement. Hopefully the Fed will retain a neutral bias, the market will dislike this very much, my puts will increase in value then two days later the market will accept the facts and resume it's bull run.

Well no harm in hoping for the perfect outcome is there?

Jimbo

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

I have what is quite possibly a ridiculously noob question for this discussion, and for that I apologize in advance...

I am buying a house, and after much bartering with two different companies, just locked a 30-year fixed mortgage at 6.25% on Friday. How much better could I have conceivably gotten if I waited until after the cut (assuming they cut it .25 as widely anticipated)?

Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
 

Mortgage rates don't normally move that fast after a fed cut. It takes a few months to trickle down.

Steve