The Long Term Investor

The EPIC RALLY continues.

Dow closes above 36,000 for the first time

https://www.cnn.com/2021/11/02/investing/dow-36000/index.html

"New York (CNN Business) The Dow Jones Industrial Average closed above the 36,000 mark for the first time Tuesday following a gain of about 140 points, or 0.4%. On Monday it had briefly risen above 36,000 but didn't end the day there.

Investors had to wait only a little more than three months for the Dow to climb from its last thousand-point milestone -- 35,000 -- to this one. But for some, the Dow 36,000 vigil has been going on for 22 years.

The Dow 36K prediction was first made by journalist James Glassman and economist Kevin Hassett in October 1999. The Dow was hovering just above 10,000 when their book, "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market" was published.

Investor sentiment was further depressed by significant accounting scandals at Enron, Worldcom and Tyco, which were once considered market leaders. The Dow hit a low of around 7,200 in 2002. The first two companies
Stocks didn't get back to pre-bubble levels until 2006, and the market peaked again in October 2007 as the housing market started to unravel.

That ultimately led to the 2008 implosion of Lehman Brothers and the Great Recession. The Dow slid to 6,470 by March 2009. But save for a few minor corrections in the past few years and brief bear market in March 2020 at the start of the pandemic, it's been mostly going up.

The Dow is hardly the only major gauge of the stock market, however. It has only 30 companies in it, which is why many investors prefer to look at the broader S&P 500 or the Nasdaq as a better Wall Street barometer.

But the Dow, which is now up 18% this year, is still arguably the most famous measure of the ups and downs on Wall Street. The Dow first launched in 1896 with just a dozen companies. It expanded to its current membership level of 30 firms in 1928.
Throughout the past century, the Dow has been home to major American industrial icons. Some, like General Electric (GE), ExxonMobil (XOM) and Pfizer (PFE), have recently been replaced in the blue chip average.

The Dow now reflects the fact that the United States economy is more about tech, consumer goods and financial services as opposed to manufacturing.

Apple (AAPL), Microsoft (MSFT), Salesforce (CRM), Walmart (WMT), Home Depot (HD), Nike (NKE), Goldman Sachs (GS), American Express (AXP) and JPMorgan Chase (JPM) are among the leading companies in the Dow today."

MY COMMENT

ANY milestone in one of the major averages is a very good thing. Besides the RALLY....we have seen an epic number of all time highs in the various averages this year. Considering that we were in the middle of the pandemic with the economy shut down not too long ago....we are kicking ass.

We have 8.5.....weeks left in the 2021 market year. The SP500 is just under 24% year to date with good potential to add another 2-6% this year. What is REALLY nice is the fact that we are on track........for the third year in a row.......for the SP500 to deliver significant returns well above average. (2019 - +31.44% and 2020 - +18.39%)

Since 2009 we have been in a HISTORIC BULL MARKET with life altering returns over that time. We are seeing the same thing over the past three years.....if this year can hang in there. We are also seeing the same thing over just this year.....if it can hang in there. These are the type of market returns that REWARD long term investors that stay FULLY INVESTED and compound the gains. It is interesting that many of the years in this BULL MARKET.....investors have been climbing a massive WALL OF WORRY.

I continue to be fully invested for the long term as usual.

 

The negative versus the positive.....always interesting.

We have been living with the SAME negative market themes for 6 months or more now......inflation, stagflation, tapering, interest rates, the pandemic, supply chain, etc, etc. It is ALL rehashed over and over and over. Today is no exception.......OMG......the FED is going to talk again. No surprise there......they constantly spout off and can not keep out of the media for even a week. The negative "STUFF" is rehashed over, and over, and over.

On the other hand.....the positive "stuff".....rolls in daily....new data, new market highs, new information on earnings and the economy, etc, etc, etc. It stays in the news for a few days or a week or two and than everyone moves on. Think back over the past 12 months. The vast majority of the NEW NEWS that rolls in every day is POSITIVE. As a result.....the markets have been STRONGLY POSITIVE over that time.

So......the negative themes LINGER and FESTER.......while the constant variety of positive news is commented on for a few days and than we move on. That is how it works in the MODERN investing world and the MODERN media world. Get caught up in the negativity and constant media BLATHER......and as an investor.....you will screw yourself.

TODAY and TOMORROW....is no different. It will be ALL about the same old FED "stuff" that we have been hearing about weekly for at least the past 12 months.....tapering and interest rates. FIRST......NOTHING is going to happen with interest rates.....that is at least a year away. As to tapering......WHO CARES. Outside the breathless media it is totally a non-issue for investors. It will NOT matter in the least. EVERYONE in the world knows that it is going to start to happen some time over the next 1-6 months. When it does happen.....it will be a slow and steady process. It will be totally irrelevant to BUSINESS performance, earnings, or anything else to do with REAL BUSINESS operations.

 

Here is a nice little article on the issues in the markets over the next day or two......EXACTLY.....what I am talking about above.

Stock market news live updates: Stock futures mixed ahead of Fed decision

https://finance.yahoo.com/news/stock-market-news-live-updates-november-3-2021-221407830.html

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

"Stock futures traded mixed Wednesday morning as investors awaited a key monetary policy decision from the Federal Reserve.

Contracts on the S&P 500 were flat to slightly lower. The blue-chip index had set a record closing high for a fourth straight session on Tuesday, while the Dow closed above 36,000 for the first time ever. Both indexes were buoyed by an extended run of better-than-expected corporate earnings results.

Some of the latest names that reported results continued this winning streak. Lyft (LYFT) shares gained after the ride-hailing company posted third-quarter revenue and earnings, excluding some items, that exceeded expectations, with a recovery in drivers and ridership helping boost results. Food giant Mondelez (MDLZ) also offered third-quarter results and a full-year forecast that exceeded estimates. In other corporate developments, Bed Bath & Beyond (BBBY) announced a new partnership with Kroger and plan to accelerate its share repurchases, and the stock surged in early trading.

Other companies, however, bucked the positive trend of stronger-than-expected earnings and guidance. Activision Blizzard (ATVI) shares sank in late trading after the video game company posted weak current-quarter guidance, and Match Group (MTCH) slid as lingering COVID-related impacts in Asia also dampened its outlook.

Investors on Wednesday will turn their attention to the Federal Reserve's latest monetary policy decision and press conference from Fed Chair Jerome Powell. Many market participants are expecting the Fed to formally announce the start to tapering of its crisis-era asset purchase program, which had been one of the primary tools helping to underpin the economic recovery and financial markets over the course of the pandemic.

Currently, that asset purchase program is taking place with $120 billion worth of agency mortgage-backed securities and Treasurys per month. The Fed has previously signaled it would likely begin tapering these purchases soon and continue the process through the middle of next year.

The bigger question for market participants has now become when the Fed will begin to raise interest rates. The Fed's latest monetary policy decision will not come with updated projections on the interest rate outlook from individual policymakers. However, at the conclusion of the Fed's last meeting, the outlook showed a divided committee for next year, with nine members seeing no rate hikes by the end of next year while the other nine members saw at least one hike.

"The Fed is trying to separate the two and saying, listen, the fact that we start with tapering now doesn't mean that we start hiking interest rates later on," Willem Sels, HSBC Global Private Banking and Wealth chief investment officer, told Yahoo Finance on Tuesday. "The reason, of course, is because there is that uncertainty around the economy, around the labor market, which still has five million more people out of the job market than before the pandemic. And then also, when will inflation come down?"

"So the Fed doesn't want to lock itself into those interest rates hikes yet," he added. "As long as those earnings continue to do well and the Fed signals that it will be slow with those interest rate hikes, I think the market will continue to drift up, albeit with some more volatility than before."

Still, the persistently hotter-than-expected inflationary pressures in the recovering economy have put the Fed in a difficult spot when it comes to waiting on rate hikes, many economists argued. These elevated levels of inflation might push the Fed to raise rates more quickly than previously telegraphed, some maintained.

"The Fed's credibility will be enhanced if Mr. Powell does not have to return to the press conference platform in December, January and March and again have to explain why inflation has risen even further," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note. "The danger has increased that the Fed will be forced into faster tapering an an insurance hike next. spring, or even a sustained inflation-chasing tightening later in the year." "

MY COMMENT

FIRST and most importantly.....I DO NOT buy in the slightest that the asset purchase program........with $120 billion worth of agency mortgage-backed securities and Treasurys per month.........has been one of the PRIMARY tools responsible for the economic recovery and financial markets over the course of the pandemic. Yes, it helped the BIG banks and BIG wall street financials and the insiders. BUT......I dont believe it is having ANY impact on the general economy or general business.....especially small business.

My view is that when it ends....we will se NOTHING happen at all......the impact of ending the asset purchases will be ZERO. In fact it might actually help the economy. Whether it ends or continues....the impact to investors....beyond a few weeks at most......will be ZERO.

ALL the FED stuff today is nothing more than irrelevant media DRAMA. AND....as such.....as any type investor.......I could not care less. As a long term investor......I actually welcome getting the FED out of the economy and TAPERING will be a step in that direction. We need.......desperately need.....to get EVERYTHING off the back of the economy and stop the DISTORTION of our.......supposedly......free market capitalist system.

 

HERE is some good economic news....the re-opening continues.

October private payrolls rose by 571,000, topping expectations: ADP

https://finance.yahoo.com/news/adp-...yment-labor-market-coronavirus-121613628.html

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

"U.S. private employers added back more jobs than expected last month, reflecting a pick-up in the pace of hiring as more service-focused companies brought back workers to meet elevated demand.

Private payrolls grew by 571,000 in October compared to September, ADP said in its closely watched monthly report. Consensus economists were looking for a rise of 400,000 jobs, according to Bloomberg data. The month earlier, private payrolls had risen by a downwardly revised 523,000, from the 568,000 previously reported.

The job gains were again led by a wide margin by the service-providing sector, which saw net payrolls gains of 458,000 last month. This was in turn fueled by leisure and hospitality industries, which brought back 185,000 jobs. Professional and business services, and education and health services saw gains of 88,000 and 56,000, respectively.

The goods-producing sector also saw a pick-up in hiring across all major industries. Both manufacturing and construction employers brought back more than 50,000 workers each, building on gains from September.

Wednesday's report reflected a 10th straight month of net payroll gains in the private sector, with reopenings and a drop in coronavirus infections helping drive a wave of rehiring activity throughout 2021. The service sector, which bore the brunt of the job losses at the height of the pandemic last year, has been this year's biggest rebounder. Leisure and hospitality payrolls alone brought back an average of about 190,000 jobs per month between July and September, according to ADP.

But even given the job gains seen for the year-to-date, finding enough workers to keep pace with demand has remained a critical pressure point for companies.

A number of executives have aired these concerns in third-quarter earnings reports and calls. During last week's call with analysts, Amazon (AMZN) Chief Financial Officer Brian Olsavsky said in the third quarter, "labor became our primary capacity constraint, not storage space or fulfillment capacity." And executives at consumer products companies Clorox (CLX) and Kimberly-Clark (KMB) both flagged some pressures around labor shortages and costs, to name just a few of the bevy of companies working through these scarcities.

ADP's report serves as just one measure of rehiring trends in the U.S. economy. Friday's jobs report from the Labor Department will be one of the most closely watched metrics, offering the government's "official" count of those brought back into the labor market last month. Consensus economists are looking to see non-farm payroll gains accelerate to 450,000 for October, according to Bloomberg data, rising sharply from the disappointing 194,000 payrolls brought back in September.

Still, ADP's print does not serve as a precise indicator of payroll trends seen in the government data due to differences in methodology. ADP tallies employees actively on companies' payrolls toward its headline figures, while the Labor Department only counts those paid during the survey period towards its non-farm payrolls.

"The ADP employment survey has over-predicted private payrolls in five out of the last six months," wrote Brett Ryan, senior U.S. economist for Deutsche Bank, in a note. "Thus, any upside surprise may be discounted somewhat by market participants."

The Labor Department is set to report its monthly jobs report Friday at 8:30 a.m. ET."

MY COMMENT

YES.....good news. We still have a long way to go. There is STILL a lot of free money sloshing around out there and people are not feeling the pressure to go back to work....yet. It will happen....it will just take time.

The economy was totally disrupted and distorted as a result of government action and the economic shutdown. Of course....the economic shutdown.....was in reality.....SMALL BUSINESS. NONE of the big businesses really closed down. Small business continues to take the BRUNT OF THE PAIN when it comes to finding workers. When you have this sort of economic and business disruption.....it takes a good amount of time to undo the damage and get back to normal. I still see another 12-18 months of erratic re-opening ahead of us. I consider this extended re-opening GOOD NEWS for stock and fund investors.......and.....the BULL MARKET.

 

I was busy reading and I did not notice that the markets had opened. Looks like a mild negative open to me. Time will tell if this negativity has any legs today. As usual.....with the FED talking today and tomorrow......any market action will be artificially distorted. The fun of short term market watching as a long term investor.

 

You feeling recovered Zukodany?

 

I looked at my account a bit early today....just a minute ago. I was pleasantly surprised to see a nice gain with 7 of my 10 stocks being UP. These days......investing is very personal and very stock and fund specific......at least over the short term.

Half way though my counter-top and backsplash job. So far so good. They tell me that the job will be done today no matter how late they have to work. I was able to piggy back the electrician that was here for the kitchen job onto my powder room remodel......so.....we now have the new light up in there as well as the other fixtures like the mirror, new towel holder, and new toilet paper holder. The final item......the new vanity and plumbing......is caught up in the supply chain and manufacturing issues and will not be arriving till about February or March.....hopefully.

The poor kitchen fabricators.......it is now POURING RAIN. They will have to carry all their tools and saws and equipment in the rain. I told them they could leave everything here last night.....but they wanted to take it all with them. I probably would have done the same....your tools are your life if you work in a trade. At least we have a large covered back patio where they can set up and stay dry.

 

Nike and Amazon are saving my butt today. I would probably be negative for the day otherwise.

 

A PERFECT statement duckleberry. I had the same experience for a few days recently......both as a flyer and as an investor. We had to wait for departure......siting on the plane......because there was no ground crew to be available to push back the plane.....what a mess.

AND.....as an investor.......it was nice to kick back and be out of touch for a few days. The JOY of being a fully invested all the time long term investor.

 

Like Zukodany....my portfolio was all over the place today. Each time I looked it was like a different day. In the end it was up significantly.......every position was green. AND....I got a good beat on the SP500 by 0.61%. Apparently the markets actually LIKED the tapering announcement.

My portfolio leaders today were Amazon +2.15%.....Nike +2.78%.....Costco + 1.07%.....and....the big one Tesla +3.57%.

No wonder Zukodany was up big today......Tesla.

 

THE.....story of the day......finally.

Federal Reserve to begin slowing its pace of asset purchases this month

https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-november-2021-140503059.html

(BOLD is my opinion OR what I consider important content)
"The Federal Reserve on Wednesday said it would start slowing its pace of asset purchases, the first step in paring back its COVID-era easy money policies.

“In light of the substantial further progress the economy has made toward the committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases,” the policy-setting Federal Open Market Committee said in its updated policy statement Wednesday.

Since the depths of the pandemic, the central bank has been directly buying U.S. Treasuries and agency mortgage-backed securities to signal its support of the economic recovery. As of now, the Fed is pacing its purchases at a clip of about $120 billion per month.

But the Fed said Wednesday it will gradually slow the pace of those purchases by about $15 billion per month, as part of a plan to bring its so-called quantitative easing program to a full stop by the middle of next year. The taper will begin “later this month” and will continue at that $15 billion pace through December, although the FOMC clarified it could change the pace of taper as needed.

“The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” the FOMC statement reads.

The FOMC still maintained short-term interest rates at near zero. The decision on rates and taper was unanimous.

The Fed statement continued to double down on its view that high inflation readings will prove to be “transitory,” noting that “supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors.”

Anticipation for a Fed taper has ramped up discussion over the policy-setting Federal Open Market Committee’s next steps: raising interest rates.

Fed officials have made it clear that the timing of taper has no direct implications for the timing of raising short-term borrowing costs from the current setting of near zero.

But markets appear to be getting ahead of the Fed. As Powell and other Fed officials all but signaled that taper was coming, bets on interest rates reflected expectations for a more hawkish cycle of Fed rate hikes through 2022.


Fed funds futures contracts traded on the Chicago Mercantile Exchange show markets pricing in a decent likelihood of two to four interest rate hikes by the end of next year. Source: CME FedWatch
Headed into Wednesday afternoon’s announcement, Fed funds futures contracts priced in a strong chance that the central bank will have hiked rates at least three times by the end of 2022. Those expectations ratcheted up in the four weeks leading up to the Fed’s taper announcement.

The central bank’s next policy-setting announcement is scheduled to take place Dec. 14 and 15.

Still, Fed officials have emphasized the need to close the jobs shortfall of 5 million workers (compared to pre-pandemic levels), policymakers have insisted that near-zero interest rates should still support employment as it tapers.

“I do think it’s time to taper, and I don’t think it’s time to raise rates,” said Federal Reserve Chairman Jerome Powell on Oct. 22.

In his press conference, Powell could field questions about whether or not the Fed's tapering plans are connected to future interest rate hikes. But Powell will also likely face questions regarding the central bank's ongoing trading scandal, as well as Powell's own updates on whether or not he's in consideration for another term as Fed chairman."

MY COMMENT

NO DOUBT......this announcement now clears the way for the new FED chairperson to be announced. the markets apparently LOVED the announcement since we ended the day with NEW ALL TIME HIGHS. The BULL MARKET is very much alive and well as is the nice......probability......for a Santa Clause rally.

Life is good....the birds are singing.....the living is easy.........well......not exactly it has been pouring rain here all day and it is COLD out.

 

Speaking of all time highs.

Stock market news live updates: Stocks rise to records as market digests Fed's tapering announcement

https://finance.yahoo.com/news/stock-market-news-live-updates-november-3-2021-221407830.html

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

"Stocks gained Wednesday afternoon as investors digested a key monetary policy decision from the Federal Reserve, which included a formal announcement of the central bank's start to tapering its pandemic-era asset purchases.

The S&P 500, Dow and Nasdaq each rose to record levels for another session. As had been widely expected, the Federal Reserve said on Wednesday that it was going to begin slowing the pace of purchases in its crisis-era asset purchase program starting this month. This had been one of the primary tools helping to underpin the economic recovery and financial markets over the course of the pandemic. That asset purchase program has been taking place with $120 billion worth of agency mortgage-backed securities and Treasurys per month over the past more than year."

...............

"Elsewhere, investors continued to monitor a slew of new quarterly earnings results from major corporations. Earlier this week, the major stock indexes had been buoyed by an extended run of better-than-expected profit results."

................

"4:03 p.m. ET: Stocks reach fresh all-time highs after Fed announces start to tapering as economic recovery progresses

Here were the main moves in markets as of 4:03 p.m. ET:

• S&P 500 (^GSPC): +29.91 (+0.65%) to 4,660.56
  
• Dow (^DJI): +104.95 (+0.29%) to 36,157.58
  
• Nasdaq (^IXIC): +161.98 (+1.04%) to 15,811.58
  
• Crude (CL=F): -$4.04 (-4.81%) to $79.87 a barrel
  
• Gold (GC=F): -$15.50 (-0.87%) to $1,773.90 per ounce
  
• 10-year Treasury (^TNX): +3 bps to yield 1.5790%"
  

MY COMMENT

Looks like we......"might".....be in the clear for a nice couple of days to end the week. Usually when I say this it blows up in my face.

Now that we are hitting all time highs......we need AMAZON to get off its big butt and move forward. they had a nice gain today at +2.15%.......and.....have now moved up to +6.19% year to date. It seems wired to be pleased with Amazon being at +6.19% for the year to date with only about 8 market weeks to go in the year.....but I am. COME ON.......time to split that stock.

I do LIKE the way Amazon continues to invest for the future with their cash. Money in the bank for shareholders and a sign of good management.