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Wait for a pivot, save cash
Not worth buying now. Fed keeps raising rates which will cause companies to pull back on investments (like in data center). Consumer tech demand was all pulled forward due to COVID so now we are seeing a collapse in PC sales. Crypto demand for chips is also dead with the collapse in crypto prices and move to proof of stake.
Not to mention geopolitical risk with the US limiting semiconductor sales to China.
Overall just a lot of headwinds in the short term. I would wait 6 months and reassess.
AMD also badly missed their forecast - so I think that erodes confidence in managements ability to predict where demand is going to go
I’m waiting till earning
Rates are rising markets will continue to go down for months
I ageee with C1– we have not seen earnings compression yet
what is your ideal entry? don't want to be caught trying to time
I hope this answers your question. I just wrote this investor commentary summary yesterday as part of my case study for this Capital Markets Analyst role at a CMBS debt trading shop lol.
In the WSJ Article "Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes", Nick Timiraos discusses how the Federal Reserve (Fed) is planning to raise the Federal Funds Rate aggressively by 0.75 points again, which hasn't been done since this past June and before that 1994, heading into the Federal Reserve Officials' meeting on November (1-2). As a result of quantitative easing, the Fed's current goal is to reduce U.S. asset price inflation and curb demand by increasing the cost of credit to slow down hiring, spending, and investment practices to consequently reduce asset prices. On the other hand, some Fed officials feel that rates are rising too aggressively or are currently high enough to effectively combat inflation without increasing the risk of triggering a recession. Ultimately, given that inflation has hit four-decade high and eager investors are looking for a sign from the Fed of a monetary policy reversal to deploy capital which would propagate a market rally, it seems that most economists and Fed officials feel that the risks of inflation continuing to run rampant are too high to raise the Fed's rates modestly.
TLDR - We have a long ways down to go, and the last thing the fed wants to do is ignite another market rally. Even when the fed reverses course, it’s going to take some time before you see another true bull run.
Thanks! C1 can you explain why the fed doesn’t want to ignite a market rally? I get everything you said except for that. Wouldn’t they want to ignite one so that the rate rising doesn’t cause as much of a low/crash?
Oh makes sense yes a wage price spiral would be very bad and enabled by rally when already inflation. Makes sense thanks so much
Buy buy buy