The Long Term Investor

FOR the......HISTORICAL RECORD.....here is how the day ended today.

Stock market news live updates: Stocks end week on 4-day win streak, Dow closes above 35K

https://finance.yahoo.com/news/stoc...-111046902-221350203-221314424-232402484.html

(BOLD is my opinion OR what I consider important content)

"Wall Street on Friday completed a four-session win streak, with the Dow Jones Industrial Average closing above 35,000 for the first time ever after another batch of strong earnings, which helped investors put Monday's sudden sell-off in the rear view mirror.

Cautious optimism in the face of rising coronavirus cases nudged major benchmarks higher in a slow but steady rally, culminating in a weekly gain and new intraday highs. Stocks managed to stretch an improbable win streak into 4 days with the S&P 500 (^GSPC) and Nasdaq (^IXIC) both adding over 1% on the day. The Dow (^DJI) closed above the psychologically critical 35,000 level, rising around 0.7% on the session.

The head-spinning reversal from Monday's drubbing was part of the market's attempt to calibrate a resurgence of COVID-19 cases against a red-hot economic expansion that continues to gain momentum.

"What I would say is looking both bottom up and top down, the way the market's priced currently is very much in the early stages of recovery," Deutsche Bank chief global strategist Binky Chadha told Yahoo Finance Live on Friday.

Sentiment took a hit after data Thursday showed an unexpected jump in jobless claims, which last week set a fresh pandemic-era low. New unemployment filings jumped to 419,000 in the latest week, well above consensus estimates of 360,000.

Since the onset of COVID-19, the data series has served as an avatar of the labor market's health, and could take on new importance if rising infections start to trigger new restrictions — which may lead to another round of job losses.

"We don’t expect this new surge to weigh on economic activity, even if hospitalizations continue to rise," said Paul Ashworth, chief North American economist at Capital Economics.

"But there is now a risk that other states could be affected, even those with higher vaccination rates, which could have more serious economic consequences," he added.

On Friday, investors digested services and manufacturing data that underscored the economy's strength, but revealed the sector grew at a more moderate pace than expected. Markit's preliminary U.S. Manufacturing PMI for July checked in at a lower-than-expected 59.7 versus 63.7 in the prior month. A reading abover 50 denotes growth.

Strong earnings have helped the market heal from Monday's pandemic-inspired meltdown, with investors looking at the fundamentals rather than surging coronavirus numbers. Investors will now look ahead to the Federal Reserve's policy-setting meeting, where the central bank may hint at tapering of asset purchases and reiterate the outlook on surging inflation.

This week, industry bellwethers Netflix (NFLX), Chipotle (CMG), Coca-Cola (KO), Johnson & Johnson (JNJ) and Verizon (VZ) topped market expectations, boosting a market that's seen precious little downside in recent months.

On Thursday, Intel (INTC) Twitter (TWTR), Snap (SNAP) — the parent company of Snapchat, Southwest (LUV) and AT&T (T) joined the brigade of better-than-expected earnings results, with both companies bolstered by surging post-lockdown demand.

Monday's selloff momentarily took the spotlight from quarterly earnings that have almost uniformly reflected a strong rebound. The rising case count driven by the Delta variant — a more communicable form of COVID-19 — pushed the Dow (^DJI), Nasdaq (^IXIC)and S&P 500 (^GSPC)to their biggest drop in months.

However, the signals emanating from the bond market are decidedly less enthusiastic. Analysts have pointed out that safe-haven Treasury bond yields have been the biggest beneficiary of COVID-19 fears, after having soared in recent weeks on inflation fears.

It suggests that investors could be parking cash in bonds because jitters over inflation or waning, or they sense weakness on the horizon — which may or may not be driven by the stubborn persistence of COVID-19."

MY COMMENT

THIS is the starting point for the rest of the year....we move on from here.....a new beginning for us all. Have a good weekend everyone.

 

Pmw55....yes not a fun discussion.....but one we have ALL faced in our investing and ALL will in the future. No one wins all the time. It is ALL about averaging a nice gain for the long term and compounding the result. You are in the green and you will put that money to better use. It is all good.

 

It is good to have Emmett on here to be our resident TECHNICIAN.

I dont believe in Technical Analysis.....in the slightest. Dont get me started....so..... that is all I have to say.....about that.

I am TOTALLY in the Warren Buffett camp when it comes to Technical analysis:

"I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."
After eight years of trying, he concluded that it was the wrong way to invest. Then he focused on the teachings of Ben Graham, which stressed business fundamentals, finding a strategy that both made sense and, more importantly, worked."

BUT....like I said.....for others it is good to have a resident Technician on here.

 

This little article pretty well sums up what is driving the markets......and will continue to do so.

Bull market keeps calm and carries on

https://www.briefing.com/the-big-picture

(BOLD is my opinion OR what I consider important content)

HERE is the GUTS of the article:


"What It All Means

The resilience of this bull market is impressive, but then again, it shouldn't be thought of as surprising. The drivers that got us into this strong bull market are still doing the driving:

• Interest rates are low.
• Earnings growth, while decelerating, is still strong.
• Monetary policy remains the same, which is to say it is still extremely accommodative.
• Talk of fiscal stimulus continues to lend support.
• COVID vaccines are still working.
• Mega-cap stocks are still working, but they have even more company now than they did at the start of this strong bull market.
• Liquidity is still flowing and cash is looking for higher rates of return.
• The propensity to buy with conviction on weakness is still stronger than the inclination to sell on strength.
• The trend is still the market's friend.

It is disconcerting to know that COVID variants are still circulating among us, but the manner in which they are viewed has changed dramatically. The vaccines have made it so. They haven't killed COVID, but they have lessened its impact as a killer of investor sentiment.

The stock market deviated from its bullish-minded course for just a bit on Monday, but soon found its bearings on the realization that its fundamental, technical, and mechanical drivers never got off track."

MY COMMENT

A good comprehensive list that documents what WILL continue to drive the markets and business going forward. I would EMPHASIZE........EARNINGS and INDIVIDUAL BUSINESS success as we continue to re-open. We are seeing some lessons lately....that the general economy is NOT necessarily reflected in the success or lack of success of investors. It you are in individual stocks.....it is ALL about the business success of the company you own. I you are a stock picker....it is all about the stocks you pick. Why you pick a particular stock....should....be ALL ABOUT the fundamentals of the business. In other words.....the data that is an ACTUAL indicator of the current and future prospects of that business to make money and thrive.

 

HERE is where we are going next week.

Big tech companies retake market reins with earnings on tap

https://finance.yahoo.com/news/big-tech-companies-retake-market-182749543.html

(BOLD is my opinion OR what I consider important content)

"NEW YORK (Reuters) - The rally on Wall Street faces a fresh test next week with a flood of earnings reports from major U.S. companies, including the tech and internet behemoths that have recently retaken leadership of the market.

More than one third of the S&P 500 is set to report quarterly results next week, headlined by Apple, Microsoft, Amazon and Google-parent Alphabet, the four largest U.S. companies by market value.

Those stocks have gained between 5-7% so far this month, as of Thursday's close, while the S&P 500 had climbed just 1.6%. The S&P 500 equal-weight index, a barometer of the average stock, had fallen 0.2%.

"The expectation level for these names is quite a bit higher than it was a month ago given the stock performance, so I think they are going to have to deliver," said Walter Todd, chief investment officer with Greenwood Capital in South Carolina.

"It’s a question of looking forward: Can they live up to the expectations that the stock prices reflect?"

The strength in those large stocks has come amid concerns about a slowing U.S. economic recovery that have helped pushed down benchmark Treasury yields this week to their lowest levels since February, before rebounding some.

As the Delta variant of COVID-19 sweeps through the United States, the economic outlook will be in sharp focus at the Federal Reserve's meeting on Tuesday and Wednesday, another pivotal event for investors seeking clues for when the central bank might rein in its easy money policies.

Though the S&P 500 stands at record levels after rallying more than 95% from its March 2020 lows, stocks have endured more volatility in recent days as investors seek to reconcile bond-market signals about the economic outlook.

Indeed, below the surface, stock performance indicates some doubts about economic strength. Growth stocks, which led the market for years as the economy grew sluggishly, have outperformed economically-sensitive value stocks in July, while smaller stocks, which tend to have more exposure to the U.S. economy, have also lagged, with the small-cap Russell 2000 down over 4% so far this month.

“Investors have... sought safety in those megacaps, particularly the megacap tech companies, which are expected to continue to deliver very strong growth,” said Tim Skiendzielewski, investment director at Aberdeen Standard Investments in Philadelphia.

The dominance of the megacap stocks also raises concerns that the broader index may be more dependent on the fortunes of a few giant technology-related companies.

The market cap of five companies — Apple, Microsoft, Amazon, Alphabet and Facebook — recently stood at 24.6% of the S&P 500's market cap, nearly the highest proportion it has been in 2021.

Fewer than half of the stocks in the S&P 500 recently traded above their 50-day moving averages even as the index has been at or near new highs, compared to over 90% in April, a sign that "what is happening beneath the surface is at odds with the picture of strength that is portrayed if one just looks at the popular averages," according to Willie Delwiche, an investment strategist with market research firm All Star Charts.

At the same time, bullish investors can point to a strong start for an earnings season that has been expected to show a powerful rebound from the pandemic. With 120 S&P 500 companies having reported so far, second-quarter earnings are expected to have jumped 78.1% from a year ago, up from an expectation of 65.4% at the start of the month, according to Refinitiv IBES data.

Other heavyweights reporting next week include Facebook, Tesla, Visa, Exxon Mobil and Pfizer. With concerns about the strength of the economy, investors will focus on corporate expectations for the rest of the year and into 2022.

“We may not see many 70% earnings growth quarters going forward, but that still doesn’t mean that we are looking at negative earnings growth," said Anu Gaggar, global investment strategist with Commonwealth Financial Network. “Even if it moderates, it is still reflective of a healthy economic environment.” "

MY COMMENT

Half of my portfolio will report next week. I expect that the earnings will be HISTORIC. Does that mean they will go up...no....not according to how stocks react to earnings in the modern market environment. As the article notes....the primary BIG CAP COMPANIES are up by 5-7% this month. This is the primary reason for the bump up in my year to date gains recently.

Are the indexes dependent on the performance of 5-10 dominant BIG CAP companies? DUH.....of course. AND....to me...this makes it a no brainier for investors......at least for me. I will ride the big cap dominant names in AMERICAN business for as long as possible. I will take the EASY way out every time.

 

MORE money in the bank for company owners.

Costco opens new warehouses in 3 states -- with more to come
Costco plans to open four more locations in August and September

https://www.foxbusiness.com/lifestyle/costco-new-warehouses-open

(BOLD is my opinion OR what I consider important content)

"This week, the U.S. got three more Costco locations.

On Tuesday, Wednesday and Thursday, the warehouse retailer opened new locations in Murfreesboro, Tennessee; Little Rock, Arkansas; and Moore, Oklahoma, respectively, according to local reports.

More than 1,400 people visited the new Costco in Murfreesboro on its opening day, The Murfreesboro Daily News Journal reported Tuesday.

In Little Rock, the mayor attended a ribbon cutting ceremony at his city’s new retailer on Wednesday, according to KARK.com.

FOX Business previously reported on Costco’s summer plans for new warehouses, including the three locations that opened this week, a location in Japan that opened earlier this month and three more locations that are scheduled to open later this summer.

As of Friday, Costco has only publicized the opening of its warehouse in Naperville, Illinois, which is scheduled for Aug. 19, according to the website.

The company has still not announced the opening dates for its Springfield, Missouri, or Lake Macquarie, Australia, locations, other than to say they’ll open in August.

Costco cannot share specific dates because warehouse openings could change "due to construction schedules, city requirements, etc.," company spokeswoman Muriel Cooper told FOX Business via email.

Since FOX Business reported on Costco’s openings this summer, the company has added another new location, scheduled to open in September, in San Antonio, Texas."

MY COMMENT

The company WILL be opening at least 7 new locations this summer. EVERY one of them will be WILDLY SUCCESSFUL. EVERY one will contribute to increased revenue and profits for shareholders going forward. An AMAZING business model......the amount of money brought in by the membership fees alone......would be considered great revenue by a typical retail business. I have been a customer and watched this company grow since they opened their first store in the Seattle area. A RARE.....nearly perfect....business model....with exceptional execution.

 

BUYER BEWARE.....this is what you get if you choose to invest as a partner with China...the worlds most brutal communist dictatorship.

China’s EdTech Assault Hits Investors From Tiger to Temasek

https://finance.yahoo.com/news/tiger-temasek-investors-scarred-china-210000015.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- Global investors from Tiger Global Management to Temasek Holdings Pte are reeling after China imposed the harshest curbs yet on its $100 billion private tutoring and online education sector.

China on Saturday ordered companies that offer tutoring on the school curriculum to go non-profit, potentially wiping out a big chunk of the billions that private equity and venture capital funds have staked on a once red-hot sector.

The platforms have lost their ability to go public -- depriving their backers of the exits they need to cash out. Foreign capital was banned from the sector, with uncertain ramifications for the likes of Singapore’s Temasek and GIC Pte as well as Warburg Pincus and SoftBank’s Vision Fund, which have all invested in many of the industry’s big players. Those in violation of that rule must take steps to rectify the situation, the country’s most powerful administrative authority said, without elaborating.

Beijing on Saturday published a plethora of regulations that together threaten to upend the sector. The nationwide crackdown stems from a deeper backlash against the industry, as excessive tutoring torments youths and burdens parents with expensive fees. Once regarded as a sure-fire way for aspiring children (and parents) to get ahead, it’s now also viewed as an impediment to one of Xi Jinping’s top priorities: boosting a declining birth rate.

Investors risk having to mark down their portfolio drastically or worse, getting battered in a selloff. On Friday, some of the industry’s biggest names, including New Oriental Education & Technology Group Inc., TAL Education Group, Gaotu Techedu Inc. and Koolearn Technology Holding Ltd. tumbled after details of the impending clampdown surfaced.

Warburg Pincus, GIC and Temasek representatives declined to comment. Representatives for Sequoia Capital China said they couldn’t immediately comment. DST and Tiger didn’t respond to emailed requests for comment.

It’s a stunning reversal of fortune for an industry that once boasted some of the fastest growth rates in the country. The online education sector had been expected to generate 491 billion yuan ($76 billion) in revenue by 2024. Those lofty expectations made stock market darlings of TAL and Gaotu, and groomed a generation of giant startups like Yuanfudao and Zuoyebang.

The current regulatory assault mirrors a broader campaign that began late 2020 against the growing heft of Chinese internet companies from Didi Global Inc. to Alibaba Group Holding Ltd. Investors betting on tech names beyond edtech have incurred hundreds of billions of dollars in losses since the start of the year, hammered by a series of regulatory crackdowns that expanded from fintech to encompass ride-hailing, grocery buying and food delivery.

Beijing’s desire to assert control over the economy and one of its most valuable resources lies at the heart of those actions. Companies that operate as internet platforms have come increasingly under scrutiny because of the reams of data they collect, stirring government concern over issues of privacy and security.

The potential losses in the education sphere alone could be staggering.

Alibaba, Tencent Holdings Ltd. and ByteDance Ltd. are among investors that have entered the education arena. Online education platforms attracted about 103 billion yuan of capital in 2020 alone, according to iResearch. The five biggest companies accounted for 80% of the funding raised.

Among privately backed startups, Yuanfudao is one of the largest with a valuation of $17 billion, according to iResearch. Rival Zuoyebang fetched a $3 billion valuation in 2018. And Huohua Siwei was valued at $1.5 billion this year, according to a local media report. Collectively, the three have raised $7 billion from investors, according to Crunchbase.

The regulatory clampdown has thrown a wrench into the IPO plans of many high-flying startups, dragging down valuations for those that forged ahead with a listing. Zhangmen Education Inc. has plunged 46% in New York since it listed.

It’s ultimately unclear how the government clampdown will turn out -- many believe Beijing won’t seek to annihilate an industry that still plays an essential role in grooming its future workforce. For now, many investors may choose to err on the side of caution.

Kerry Goh, chief investment officer at multi-family office Kamet Capital Partners Pte., said he’s reduced his positions in edtech companies in recent months “because it’s sell and ask questions later when it comes to China.”

“But we are looking for opportunities to re-build positions,” he added."

MY COMMENT

Sleep with the pigs and......you will be EATEN. I have warned on here MANY times about the dangers of the fraudulent economy in China as well as the FACT that the Chinese government is in charge of EVERY company there. BUT....who cares.....if investors want to get in bed with them.......it is NOT my money.

SOME people......NEVER learn:

"But we are looking for opportunities to re-build positions,"

This is simply....EXACTLY....what you would expect and in line with how China does things. Cack down to exert CONTROL and POWER...than they will lessen the pressure after a while to draw more money in. Repeat for as often as it is in their interest. When it is no longer in their interest ALL foreign investors WILL be cut lose with ZERO compensation. EVERYONE will be standing around with a STUPID look on their face DUMBFOUNDED.......gee, who could have ever imagined this happening. AMERICANS.......are just plain MORONS when it comes to how we attribute our values and morality to the rest of the world and foreign cultures.

 

WAY to go oldmanram. As to cutting a stock lose.......at various times a stock will perform badly......but if the reason that I bought them is still INTACT and I can see a realistic reason for the loss that is NOT the fault of the company or management.....and.....the long term future looks good in terms of the fundamentals.....I might hold on to the stock. I try to NOT have any set in stone rules or criteria for letting a stock go......I try to look at each situation as a......one off.....individual situation.

 

HERE is another little article for those that like to give their money to the Chinese government....the worlds most brutal communist dictatorship.

China Crackdown Makes Hong Kong Index World’s Biggest Tech Loser

https://finance.yahoo.com/news/china-crackdown-makes-hong-kong-210000333.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- An index launched a year ago to give investors greater exposure to China’s internet giants is now the world’s worst-performing major technology gauge.

The Hang Seng Tech Index has been on a roller-coaster ride in the last 12 months. The gauge, which marks its one-year anniversary on Tuesday, was up 59% at its February peak but has since seen more than $551 billion in market value wiped out amid Beijing’s clampdown on the sector.

That has reduced the gain to nearly 6%, compared to more than 40% for the MSCI World Information Technology Index and the NASDAQ-100 Index. The measure also lags onshore peers: the ChiNext Index is up 35% in the period.

The underperformance highlights regulatory risks for one of the fastest-growing sectors of China’s economy. Beijing’s bold moves to rein in the nation’s powerful tech firms such as Jack Ma’s Ant Group Co. and Didi Global Inc. have sent global investors fleeing on concerns over China’s tighter grips on data while relations with Washington remain difficult.

“The ongoing concern that medium-term earnings power may be dented by their data becoming more of a public good, and privacy becoming more of an issue, remains a headwind,” said Joshua Crabb, portfolio manager at Robeco Hong Kong Ltd.

Bank of America Corp strategists wrote in a note last week that the regulatory overhang is unlikely to dissipate anytime soon, instead recommending investors rotate into tech firms outside of China.

Buyer Beware

Launched last year, the gauge tracks the 30 biggest Hong Kong-listed tech firms including giants like Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Meituan. It was set in motion at a time when Chinese tech companies were looking to list closer to home as growing tensions between Washington and Beijing threatened to curtail access to U.S. capital markets.

The index took a fresh beating this month -- down 11% -- after China ordered to ban new users from downloading Didi’s app. Regulators are considering unprecedented penalties for the ride-hailing company following a controversial initial public offering, people familiar with matter have said.

While the forward price-to-earnings ratio for the Hang Seng Tech Index has slumped from a February peak, it is still trading at about 35 times estimated profits, compared with 28 times for the Nasdaq-100 Index and 43 times for the ChiNext, according to data compiled by Bloomberg.

Bullish ETFs

That hasn’t deterred some. Hong Kong’s two most popular exchange-traded funds this year are those tracking the tech gauge. The combined total assets of all such ETFs have more than doubled in size this year to $3.8 billion and the pace of investment into the products has accelerated since mid-May.

“Some long-term institutions may have started buying these Hang Seng tech ETFs. It seems that the more the index falls, the more ETFs they will buy,” said Alvin Ngan, analyst at Zhongtai Financial International Ltd.

While some see the uncertainty created by the ongoing crackdown as a buying opportunity, others remain wary amid questions over its duration and where it may head next. Jian Shi Cortesi, a fund manager at GAM Investment Management in Zurich, said her fund is underweight technology stocks and prefers sectors with policy support, such as network security.

“The Chinese internet names will find a bottom when investors see the conclusion” of tightening regulations, she said.""

MY COMMENT

If I can not find all the companies to invest in that I need in the AMERICAN business universe.....I should not be an investor. Our companies dominate in many many different business areas around the world.....in the BIG CAP arena. We also have a HUGE pool of mid cap and small cap companies for investors to choose from. There is NO reason for me to even consider investing in a CHINESE company.

I have said it a few times on here....but....we need to move our ASIAN focus to INDIA.......and out of China.

 

Talking about earnings next week......since I no longer own TESLA....I tend to forget about them. They report on Monday after the close. I am very curious what they will report and how the stock will react.