Rate Cut Rodeo, UBER Earnings, And Some Not-So-Soft Landings
We dive into the Fed's latest rate cut shenanigans, Tesla's rollercoaster future with robotaxis, and why Elon Musk's Twitter antics are giving us all a headache. From Google’s courtroom drama to Robinhood’s wild earnings, it's a financial circus you won't want to miss!
Here's the transcript from today's Live Q&A Chat:
Q. Similar question from a few months ago, with the Fed cutting rates in September before inflation gets back to 2%, what is your concern level on inflation spiking and/or stagflation playing out? Could we be repeating the 1970’s all over again? Yes I know AI but there’s a lot of similarities.
A. I am confident that we will NOT be repeating the 1970s all over again. But I am concerned that the Fed's going to mess up an economy that would be amazingly strong and uncyclical if the Fed didn't exist at all. Just like they have done over and over my whole career.
Q. Do you think there's a scenario where the Fed can cut rates and not ignite a bear market?
A. It's not that the Fed cutting rates is the reason for a bear market (or at least not the primary/only reason). I tell Bryce all the time when we talk about the Fed/economy/markets that "nothing happens in a vacuum." Right now, it seems like the markets are driving the economy as much or more than the economy is driving the markets (reflexivity, hat tip to George Soros). I do think if the Fed gets into a cutting cycle it will be because the economy/stock markets are struggling/tanking, so that's that.
Q. If they hit a 50 bps emergency cut, do you run for the exit after 1 or 2 day pop and go to cash/puts?
A. Not going to go to cash, but we would probably be big buyers of puts if/when the Fed finally cuts rates and if/when the markets spike for a day or two when the Fed does.
Q. Similar question from a few weeks ago, on a scale of 1-10 with 1 being outright bearish and 10 being outright bullish on broader markets, where are you now?
