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is the fed bull gored?

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Post by truthbetold Thu Jul 31, 2014 11:23 am

Is this the end of fed induced bull run? is today just summer swoon?
i think stocks are done for a while.

truthbetold

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Post by Propagandhi711 Thu Jul 31, 2014 11:27 am

truthbetold wrote:Is this the end of fed induced bull run? is today just summer swoon?
i think stocks are done for a while.

ppl keep saying this. it's nonsense, the below chart shows the "bull run" closely follows revenue growth and EPS

is the fed bull gored? Revs-earnings-price

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Post by truthbetold Thu Jul 31, 2014 12:28 pm

Prop
people invest in stocks to get a return. eps is an indicator of return or profit. That fundamental is depicted in that chart. there is no dispute there.

Fed policy created lot of excess liquidity in the market . that pushes valuations higher. more money chasincg fewer opportunities. this phenomena can be seen more clearly in the emerging market stocks and tech stocks.

when fed indicates tightening these stocks shed extra speculation. unlike earlier fed indications, this time there is lot of data to support stable job growth and growing economy. hence the finality of the fed direction.

Interest futures pulled the date of increase into middle of 2015 which is ahead of previously estimated date. Money receeds and stocks stumble.
One can also explain why eps will go high with fed policy but you are knowledgeable to know all this stuff.



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