Re: Official - Will The Fed Cut Rates? on 9/18 Discussion
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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.
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If rates are cut, stocks will hold steady or go up, in all likelihood.
James
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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
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