The Long Term Investor

I ACTUALLY consider this good news going forward for investors. The economy continues to climb a wall of worry. NO....there is not ANY irrational exuberance going on right now.

U.S. consumer confidence ebbs in November

https://finance.yahoo.com/news/u-consumer-confidence-ebbs-november-151459472.html

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

"WASHINGTON (Reuters) - U.S. consumer confidence slipped in November amid concerns about the rising cost of living and relentless COVID-19 pandemic.

The Conference Board said on Tuesday its consumer confidence index fell to a reading of 109.5 this month from 111.6 in October. The survey was conducted before the discovery of Omicron, a new variant of the coronavirus, that was announced last week by South African scientists. Economists polled by Reuters had forecast the index falling to 111.0.

MY COMMENT

ACTUALLY....this sort of poll is MEANINGLESS and WORTHLESS. I would BET we will see a BOOMING holiday shopping season that demolishes the data in this......so called.....index. BUt.....people think this sort of stuff has some meaning. I guess that is because it is done by......"The Conference Board".....and....."Economists".....and.....talked about in the financial media so it must mean something....right? YEAH......ok.

 

WELL.......since there is ALWAYS something good in the news.......the Ten Year Treasury is dropping like a rock. Down to below 1.45% at the moment.

 

If I did not know better I would think that the FED and government TRY to intentionally tank the markets. The perfect example......today.....the FED has to come out to comment on Covid. So....they release the text of the remarks at about the open. They than, a few hours later, give the talk and weaken the markets more. Of course......just for good measure....lets throw in some commentary about doing the tapering more quickly than previously released. AND....oh yes.....lets take this opportunity to "retire" the word transitory when mentioning inflation.......of course this sends the message that inflation will last longer than expected......even if it does not.

The bottom line......NONE of these people have a clue what they are doing. It is simply......ILLUSION......that is accepted by society in general because the alternative.....recognizing the truth.....is too uncomfortable.

Looking forward to hearing another......government......address tomorrow on the supply chain.

This is either GROSS INCOMPETENCE in terms of the timing and the message being put out there........or.......political manipulation......that is how I see it as an ACTUAL investor. Either way it is a GOLD MINE for the QUANTS and the PROGRAM AI TRADERS.....doing their micro second trades on various news items and other daily hour to hour stuff.

The little investors......like me.....we are doing the opposite extreme....just siting and holding through it all for the long term.

 

So......here is a typical re-hash of what is going on today in the markets.

Stock market news live updates: Stocks fall as investors consider Omicron impact, Powell tapering remarks

https://finance.yahoo.com/news/stock-market-news-live-updates-november-30-2021-231704968.html

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

"Stocks dropped on Tuesday as volatility resumed after a brief rebound earlier this week, with investors contemplating the impacts of a new coronavirus variant and new comments Federal Reserve Chair Jerome Powell.

The S&P 500, Dow and Nasdaq declined. The Dow, a proxy for cyclical stocks, underperformed against the other two major indexes, dropping more than 400 points, or over 1.2%, intraday on Tuesday. U.S. crude oil prices (CL=F) dropped 4%. And shares of airlines, cruise lines and lodging companies considered to be some of the most exposed to virus-related disruptions each sank in early trading to reverse Monday's gains.

Investors reacted to Fed Chair Powell's latest remarks before the Senate Banking Committee, wherein Powell said the central bank could speed up its tapering process to end sooner than previously telegraphed in the face of rising inflationary pressures. The comments came even as some other market participants had expected the Fed to strike a more accommodative tone for longer in the face of the recently discovered Omicron variant.

"At this point the economy is very strong and inflation pressures are high, and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we announced at the November meeting, perhaps a few months sooner," Powell said. "I expect we will discuss that at our upcoming meeting."

A host of less upbeat new commentary from major coronavirus vaccine-makers also contributed to the selling pressure. Moderna (MRNA) CEO Stephane Bancel told the Financial Times that the company's current COVID-19 vaccine would likely see a "material drop" in effectiveness against the Omicron variant, while noting more data was needed to see any extent of the decline. Separately, Pfizer's (PFE) CEO Albert Bourla told CNBC he didn't "think that the result will be the vaccines don't protect," but that "the result could be, which we don't know yet, the vaccines protect less."

Both companies have already said they were collecting data on the Omicron variant and that more definitive information would be available in the coming weeks. Researchers have not yet determined whether the new variant is more easily transmitted, or responsible for more severe illness, than previous versions of the virus.

"Information is coming rapidly, it's evolving in real-time. You can understand why investors [last week] were taking a little bit of a pause, particularly given the liquidity situation we had going into the U.S. holiday season," Vivek Paul, BlackRock investment institution U.K. chief investment strategist, told Yahoo Finance Live on Monday.

"We think on balance, it would make sense to be invested in the markets at this moment in time," he added. "It's all about understanding whether or not this is a delay, or a derailment, of the restart that we've seen. And it seems most likely at this moment — not withstanding more information to come— that it looks like a delay."

The latest commentary on the variant at least momentarily overtook investors' optimism over remarks Monday from the White House, when President Joe Biden said Omicron was "not a cause for panic." Biden said he intended to announce the White House's strategy for addressing coronavirus this winter later this week, and that this plan would not include lockdowns, but would instead emphasize vaccinations, boosters and testing. The Centers for Disease Control and Prevention (CDC) on Monday updated its guidance to say all individuals aged 18 and older "should" get a booster coronavirus vaccine, strengthening this from previous language primarily aimed at getting those considered most at risk an additional dose of the shots.

Prospects that widespread lockdowns would likely not come to the U.S. in the face of the latest variant helped fuel a broad risk-on rally on Monday. This came in sharp contrast with Friday's moves immediately following the World Health Organization's announcement of Omicron as a "variant of concern," which sparked the Dow's worst plunge since Oct. 2020.

"This is not a repeat of March 2020," Paul Schatz, Heritage Capital President, told Yahoo Finance Live on Monday. "This looks nothing like March of 2020, yet it's so recent in our history, people immediately think, 'Omicron is here, oh my gosh this is going to be a 30% decline, we're going to go straight down' ... You need to equally weigh history, not weigh it based on how recent it was in your memory."

11:14 a.m. ET: Stock losses accelerate as Powell says tapering could end 'a few months sooner' than telegraphed before
Losses in the S&P 500, Dow and Nasdaq accelerated Tuesday after Federal Reserve Chair Jerome Powell said the Fed's asset-purchase tapering could be sped up to end "a few months sooner" than previously discussed.

The Dow dropped more than 400 points, or over 1.2%. Both the S&P 500 and Nasdaq were also off more than 1.1% in intraday trading. The small-cap Russell 2000 fell by more than 2%.

In the S&P 500, all 11 major sectors were in the red, and the real estate, consumer discretionary and healthcare sectors underperformed. The materials company Dow Inc., Salesforce.com and American Express were the biggest laggards in the Dow Jones Industrial Average.

10:04 a.m. ET: Consumer confidence misses estimates in November: Conference Board
Consumer confidence dropped by a greater-than-expected margin in November compared to October, according to the Conference Board's closely watched monthly index Tuesday.

The headline confidence index dropped to 109.5 in November, the Conference Board said. This missed consensus expectations for a drop to just 110.9, according to Bloomberg data. October's confidence index was also downwardly revised to 111.6, from the 113.8 previously reported.

The drop came as subindices tracking consumers' assessments of both present situations and expectations deteriorated compared to October.

“Expectations about short-term growth prospects ticked up, but job and income prospects ticked down. Concerns about rising prices—and, to a lesser degree, the Delta variant—were the primary drivers of the slight decline in confidence," Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. "Meanwhile, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months decreased."

"The Conference Board expects this to be a good holiday season for retailers and confidence levels suggest the economic expansion will continue into early 2022. However, both confidence and spending will likely face headwinds from rising prices and a potential resurgence of COVID-19 in the coming months," Franco added."

MY COMMENT

YES.......in my usual TWISTED fashion......I anticipate that over the longer term all this short term.......BALONEY and POSTURING and CYA commentary......will be a strong POSITIVE for the markets.......by PROLONGING the BULL MARKET. All of this stuff will draw out the process of the re-opening.....in my view also a good thing. As we sort through these issues....the so called experts.....will LOWER their earnings estimates going forward and their expectations for the economy. This will make it easier to bet BEATS when the actual numbers are reported in the future earnings periods.

On the FLIP SIDE.....the danger is that.....various MORONS.......will over do the.......EGO DRIVEN.......media commentary and will tip the economy into a recession. In other words a recession that would not have happened if those with a soapbox knew how to STFU.

Human behavior.......you gotta love it. It is funny to watch. BUT unfortunately....it does impact REAL people and their lives. I am lucky that I have ISOLATED myself financially and in life from all this stuff........but......I hate to see people have to go through this UNNECESSARY "STUFF".

 

My MAIN concern and decision on a day like today is.......lets see.....where are we going to eat lunch?

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

 

Good one T0rm3nted.....I like it.

 

Actually the day ended much better than I expected. I was of course in the RED.......but I would call it a medium level red day. PLUS.......as a bonus and my WIN of the day......I beat the SP500 by 0.77%. I will take that as a RESOUNDING VICTORY on a day like this.

 

Yes......Gridsmasher......Tesla and Apple helped me to hold the losses down some today and end up pretty nicely beating the SP500.

WELL......we are now done with November and we head into the last market month of the year tomorrow. It has been a WILD year......with GREAT gains year to date at this moment. It will be nice to LOCK IN those results in another month and move on to a new beginning.

For November.......the DOW had a loss of 3.7%.......the SP500 had a loss of 0.80%......the NASDAQ had a loss of 0.37%. Forget the DOW it is not relevant. As to the SP500 and NASDAQ.......actually......very minimal losses for the month.

 

I put up a post a page or so back about the shock that young investors would experience when they hit their first BEAR MARKET. Here is something on that topic.

Markets are shrugging off omicron worries. But the variant offers a lesson investors should heed.
If you’re going to own stocks long term, you need to have enough cash on hand to ride out declines

https://www.washingtonpost.com/business/2021/11/30/stock-market-omicron-uncertainty/

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

"It’s not very often that you’ve got two different Black Fridays occurring on the same day. But that’s what happened this past Friday.

And despite the stock market’s substantial rise Monday, there’s an important message — and an important warning — that the less obvious Black Friday, which I’ll call BF II, delivered to those of us who have a significant portion of our net worth invested in stocks.

For almost 70 years now, Wikipedia says, the term Black Friday has been used to describe the start of the Christmas shopping season on the day after Thanksgiving.

BF II takes its name from the fact that the U.S. stock market got clobbered Nov. 26, with the Dow falling more than 900 points (about 2.5 percent) and the S&P 500 and Nasdaq markets each falling by about 2.2 percent. In terms of money lost, my favorite metric, the FT Wilshire 5000 Total Market Index, fell by about $1.2 trillion, which was its biggest dollar loss since Oct. 28, 2020, when it fell $1.25 trillion.

Painful memories of BF II may already be fading for many people, given Monday’s 236-point rise in the Dow; the S&P and Nasdaq recovering 57 and 82 percent, respectively, of their BF II losses; and the Wilshire rising by $525 billion.

These increases happened even though the new omicron variant of the coronavirus looked a lot more dangerous to the United States on Monday than it did on Friday because we now know that it has shown up in North America.

On Friday, omicron was cited as the cause of the sharp decline. On Monday, omicron looked worse — but the market looked a lot better than it did Friday. As often happens, memories on Wall Street have proved to be short. At least for now.

But forgetting BF II is a serious mistake, because there are lessons there that investors ignore at their peril.

Since the market’s bottom about 20 months ago — on March 23, 2020 — the Wilshire has more than doubled, and as of Monday’s close was up 113 percent, increasing U.S. stocks’ market value by $26.7 trillion.

Week after week, we’ve seen stocks make one high after another, and people who’ve put every dollar they could lay their hands on into stocks have done extremely well.

But the market’s drop last Friday shows why it’s wise to keep a reasonable amount of cash on hand — “reasonable” being a flexible term — rather than putting every penny you own and can borrow into stocks.

That’s because if you’re going to own stocks for the long term, you need mental and financial staying power. Imagine if Monday had been a Black Monday, followed by Black Tuesday, Wednesday, Thursday and Friday, with declines similar to BF II. You’d be looking at a Dow down by more than 5,000 points since Thanksgiving, declines approaching 15 percent in the S&P and Nasdaq, and a $7 trillion drop in the Wilshire.

Do you have the staying power to stick with stocks if that happens? Would you run out of money? And if you bought stocks by using money that you borrowed from your brokerage house, would you be able to meet “margin calls” demanding more collateral?

If the answer to any of these things is no, you might want to rethink some of what you’re doing.

I’m an old guy — I recently turned 77 — and I’ve learned over more than five decades of investing to keep enough cash on hand to be able to wait out market declines, of which I’ve seen plenty.

It takes a lot of self-control to hold significant amounts of cash, given that it’s earning essentially zero thanks to the Federal Reserve’s near-zero interest rate policy.

But BF II reminded me, once again, why holding cash is an important part of successful long-term investing. It should remind you of that, too."

MY COMMENT

Different people have different needs to hold cash....obviously. BUT....the real point is that you need to not put yourself in a position where an extended downturn will impact your behavior or finances in a semi-involuntary way. In other words your financial and physical RISK TOLERANCE should be in line with your investing plan. With some thought ahead of time....there is no reason to be shaken out of your investments by NEGATIVE market action.

 

WOW.....you are right Zukodany. I feel so much better now that DR WHO is on the case. No wonder the futures are way up today.

 

YEP....TireSmoke. It is amazing how that magic number evolves and changes over time and always seems to stay TANTALIZINGLY just out of reach year after year.

 

Here is the boring economic data that no one will care about....so...I will post it before the markets open.

November private payrolls rose by 534,000 topping expectations: ADP

https://finance.yahoo.com/news/november-private-payrolls-adp-employment-131551829.html

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

"Employers brought back more jobs than expected in November, with companies gradually filling widespread vacancies as the economic recovery moved further along.

Private payrolls grew by 534,000 in November compared to October, ADP said in its closely watched monthly report. Consensus economists were looking for private payrolls to rise by 525,000, according to Bloomberg data. Private payrolls had grown by 570,000 in October, according to ADP's revised monthly figure.

The services sector added back 424,000 payrolls last month, contributing to most of the headline gain in ADP's report. Within services, leisure and hospitality employers added another 136,000 jobs on net, with some of the industries most deeply impacted by the pandemic last year recovering further. Professional and business services employers added back 110,000 payrolls, and trade, transportation and utilities employers brought back 78,000. Within the goods-producing sector, both manufacturing and construction employers saw jobs grow by at least 50,000.

Private-sector employers have added back jobs on net in every month so far in 2021, reflecting a steady improvement in the labor market as the broader economy marched back toward pre-pandemic conditions. The latest ADP data did not capture the period when concerns over the newly discovered Omicron variant first unfolded at the end of November, but some economists suggested its emergence would not likely seriously derail the economic recovery.

"Since the pandemic, each COVID wave has had less of an impact on the economy. For example, during the COVID wave that peaked in January, there was a meaningful slowdown in restaurant traffic. In the most recent wave, there wasn’t a slowdown," Neil Dutta, head of economics at Renaissance Macro Research, wrote in a note Tuesday. He added he was "skeptical that recent concerns over coronavirus will spill into deeper issues for the U.S. economy."

But even before the latest wave of virus-related fears resurfaced, the labor market was facing a host of roadblocks in returning to its pre-pandemic state. Job openings have remained near record highs and the pace of hiring has not kept up with demand, leading to competition for workers, fast-rising labor costs and other disruptions. Still, the overall trajectory of the labor market and broader economy has been toward improvement.

"The latest data show the U.S. economy firing on all cylinders: Consumer spending in surging, the labor market is recovering, exports are bounding and momentum in business investment is positive," Rubeela Farooqi, chief economist at High Frequency Economics, wrote in a note. "Indeed, momentum is picking up even as the economy continues to face headwinds from supply chain disruptions and labor market dislocations."

More data on the state of the labor market will be due on Friday, when the Labor Department releases its "official" government jobs report. Consensus economists are looking to see non-farm payrolls rose by 548,000 in November, accelerating modestly from October's better-than-expected 531,000 rise. As usual, ADP's print serves as an imprecise 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."

MY COMMENT

SLOWLY......step by step we move toward a more normal economy. It WILL happen....especially.....if those that have a soapbox can just SHUT UP and get out of the way.

 

Good to hear.....but....I dont do Twitter......or.......any other social media.