Picture a world where Biden and company forgive up to 50K of student loans. All the money going slated for loan repayment is now being spent in the "real economy". I can only imagine how high inflation would go, rent increases, interest rates, etc. Seems to me that loan forgiveness is bad for the economy as a whole. What do you think?
So we start the rest of the year in a little hole. The worst start to the year for stocks since 2009 https://www.cnn.com/2022/02/01/investing/premarket-stocks-trading/index.html (BOLD is my opinion OR what I consider important content) "London (CNN Business) Stocks haven't experienced a start to the year this rough in a very long time. What's happening: After rallying almost 27% in 2021, the S&P 500 finished January down 5.3%. It was the index's worst January since 2009. The tech-heavy Nasdaq Composite shed 9%, its worst kickoff since 2008. It's still in a correction, down more than 10% from its November peak. The sell-off was powered by the looming shift among central banks like the Federal Reserve, which signaled clearly last month that it will soon begin hiking interest rates from rock-bottom levels to rein in inflation. "Undoubtedly the main theme in January was the continued hawkish pivot by a number of central banks in light of continued and persistent inflationary pressures, which led investors to price in a much more rapid hiking cycle over the months ahead," Deutsche Bank analysts said in a note to clients on Tuesday. Big tech companies, which drove the pandemic recovery rally, and flashy startups, which look more appealing when borrowing costs are low, took the heat. Amazon (AMZN) dropped 10% in January, while Facebook (FB) and Google's Alphabet (GOOGL) both fell about 7%. Trading app Robinhood and crypto platform Coinbase, both of which went public last year, plunged 20% and 25%, respectively. Smaller companies whose fate is closely tied to the health of the US economy struggled, too. The Russell 2000 index, which is made up of such firms, shed 9.7% in January. It's almost 17% below its November high. The big unknown: Is the turbulence here to stay? Recent days have looked better. The Dow closed up 1.2% on Monday, while the S&P 500 rose 1.9% and the Nasdaq leaped 3.4%. Still, the overall picture looks much the same, leaving investors on edge. The CNN Business Fear & Greed Index remains in "fear" territory. Atlanta Fed President Raphael Bostic suggested over the weekend that the Fed could hike rates by 0.5 percentage points in March. On Monday, he clarified that a half-point rate hike was not his preference. Yet any hawkish remarks from policymakers over the next few weeks could spark a sharp response from jittery traders. "Good riddance to January, but this month's investment themes will linger," Nicholas Colas, cofounder of DataTrek Research, wrote Tuesday. Fed policy, he added, "remains the biggest wildcard."" MY COMMENT Yes....good riddance. January is the past and locked in. We move forward from here. As noted above....the FED just can not shut up. What a bunch of EGO MANIACS. I am much more interested in how the year ends rather than how it starts. So....I have eleven more months before I find out how we did for 2022. Over that time there will be many UP and DOWN market events. As usual.....I will sit through all of them.
This little article is a pretty good analysis of housing.......but....I suspect that prices will continue to rise in the most desirable places in the country. The State of Real Estate Why housing probably won’t collapse—or soar a whole lot more. https://www.fisherinvestments.com/en-us/marketminder/the-state-of-real-estate (BOLD is my opinion OR what I consider important content) "As you may be aware, the nation’s home prices rose quite a bit last year. The latest data show the S&P National Home Price Index rose 18.8% y/y in November (after it touched 20.0% in August), outstripping 2005’s peak annual gain. Beyond prices, anecdotes about seeming insanity in the housing market abound, from writing love letters to land a deal to bids going far over list price and homes sitting on the market for mere hours. To many, the gains plus these tales make it seem as if a housing bubble is surely inflating, ready to pop—a throwback to what some see as the cause of the 2007 – 2009 financial crisis. But in our view, the drivers behind today’s housing market look quite different from 2005 – 2006’s frenzy—and it is critical to recall the housing bubble itself didn’t drive 2008’s downturn anyway. Today’s spiking prices stem from extremely limited supply and steady, if not elevated, demand as the pandemic and remote working spur people with the means to do so to upgrade, move to the suburbs or relocate to a new state—or all three. At fewer than a million units in December, inventories are at their lowest in at least a couple decades. (Exhibit 1) Now, this series isn’t seasonally adjusted—hence the regularly recurring jagged pattern in the line. Inventories normally dip in December and January. But looking at the year-over-year percentage change eliminates this skew, and inventories were still down -14.2% y/y in December. Exhibit 1: Far Fewer Homes for Sale Now Than in 2006 Source: FactSet, as of 1/27/2022. National Association of Realtors inventory of existing homes for sale, January 1999 – December 2021. Lack of available homes for sale supports pricing, and it is no secret how we got here: Lockdowns halted construction, then resource shortages delayed efforts to reboot it. Hot markets where supply can normally grow easily to meet demand, like the greater Houston area, suddenly had an influx of new buyers bidding for a finite supply of existing homes. Construction couldn’t respond quickly enough. Contrast this with 2005 – 2006. Housing inventory rose from just over two million starting in 2005 to almost four million near 2006’s end. But now construction appears poised to catch up. Homes under construction are at their highest level in almost 50 years. (Exhibit 2) Part of this is a catchup effect. But also, new building permits for privately owned housing hit their highest point since May 2006 in December.[ii] For full-year 2021, the Census Bureau noted 1.7 million units were permitted. No shock, then, that builders started construction on 1.6 million new housing units last year. Exhibit 2: Building Boom Source: Federal Reserve Bank of St. Louis, as of 1/27/2022. Total new privately owned housing units under construction, January 1970 – December 2021. Now, new homes aren’t exactly rolling off assembly lines—as widely reported, it hasn’t always been a smooth process getting materials (and labor) to build a house lately. On average, it is taking more than half a year from start to completion for single-family homes and over a year for multi-unit dwellings.[iii] However, prices are a powerful incentive, suggesting supply will rise, even if slower than normal. Builders will, eventually, finish new homes. Hard to imagine, we know, but housing may not be as supply constrained over the next year or so outside the handful of places with long-running shortages stemming from development roadblocks, like the San Francisco Bay Area. There are other big differences between the early/mid-2000s’ housing mania and the current situation. For one, back then it was easier to qualify for a mortgage. Underwriting standards are much higher now. (Exhibit 3) Credit scores aren’t perfect, but to the degree they broadly reflect borrowers’ ability to service debt, the vast majority of mortgages taken out the last couple years are from creditworthy buyers. Exhibit 3: Mortgage Originations by Credit Score Source: Federal Reserve Bank of New York, as of 1/27/2022. Mortgage originations by credit score, Q1 2003 – Q3 2021. Then, too, the “field of dreams” build it and they will come mentality is absent. In the early 2000s, home prices’ climb wasn’t irrational. But after a few years of high-single-digit appreciation nationally, froth took over America’s housing market. By 2006, construction activity vastly outstripped demand. New home months of supply—current inventory divided by the going monthly sales rate—was high and rising. (Exhibit 4) Today, it is at six months of supply, right on the historical average since 1963. It has been falling, too. Note, also, existing home supply is sitting at a record low 1.8 months. New and existing homes aren’t exact substitutes, but they are close. It seems to us new housing construction is attempting to make up for the dearth in existing home inventory. Residential building hasn’t reached the speculative phase. It is still in catchup mode. Exhibit 4: Housing Inventory Roughly in Balance With Monthly Sales Rates Source: Federal Reserve Bank of St. Louis and FactSet, as of 1/27/2022. New and existing home months of supply, January 2000 – December 2021. Beyond the supply, demand and funding aspects of housing looking different from the mid-2000s, there is another reason not to fret a housing bubble tanking the economy and stocks. Housing’s downturn alone didn’t cause the 2007 – 2009 financial crisis and recession. It was FAS 157, the unintended consequences of the mark-to-market accounting rule’s application to illiquid assets. It forced banks to value illiquid, rarely traded assets they intended to hold to maturity based on the most recent trade in “similar” securities hedge funds were dumping. In 2008, this compelled banks to account for paper losses as if they were actual losses, making them raise capital. When interbank funding markets seized up, illiquid institutions went under even if they were still technically solvent. The government’s response didn’t help, either. Haphazard measures like bailing out Bear Stearns while forcing nearly identical Lehman Brothers to fail six months later fueled more panic, as markets couldn’t handicap which institutions the feds would choose to live and die. At the end of the day, the supposedly “toxic assets” people blamed for bank failures mostly paid out—and the government eventually profited handsomely on the portfolio of distressed assets the Fed assumed from Bear Stearns and AIG as well as the preferred equity stakes it bought in many banks and the Treasury’s continued receivership over Fannie Mae and Freddie Mac. Government actions aren’t predictable, so we wouldn’t say this time is different. What is different is that regulators revamped FAS 157 in 2011 (and revised it again in 2018). Banks can now place assets that don’t trade regularly into a separate bucket, giving them more leeway. (Also, nonbank lenders are issuing most mortgages nowadays—not banks.[iv]) All this to say, the surprise institutional vulnerabilities that transformed $300 billion in actual loan losses into an unnecessary and wildly exaggerated systemic-crisis-inducing $2 trillion capital shortfall don’t seem present today.[v] Now, while we don’t think housing is presently a bubble about to burst, neither do we see a great case for real estate investing. Broad price gains like last year’s aren’t likely to last forever. Pandemic-era migration appears to be causing a demand surge, but we doubt elevated relocation will stick around after people settle down. Major supply chain kinks are already working out—lumber prices are down -40% from their May peak, for example—and are now mostly looking like one-time disruptions.[vi] Beyond this, it is also tough to invest in national “average” home prices. Every market is different. Location, location, location, as they say. Owning properties across the country isn’t practical for most. Real estate can be hard to diversify and is very illiquid, even in a hot market. (“Crowdfunding” companies cropping up advertise they make it easy, but we suggest reading the fine print before you sign on.) Then there is the maintenance and upkeep, which can add up and often go unaccounted for in calculations of returns. If that is your cup of tea, have at it! Our view is simply that investors have better, more liquid options readily available that are easier to access and value." MY COMMENT The hot desirable markets will remain hot with very low inventory. Mostly due to the influx of people and companies pouring into those areas. We have seen this happening for years now. Less desirable areas will cool off over the next year or two. As usual in ANY market......the best areas and best properties in the best school districts, etc, etc, will continue to hold value and go up in value.....even if the gains are more normal.
Here is the economic news of the day.......if anyone cares. Job openings rose to 10.925 million in December https://finance.yahoo.com/news/jolts-job-openings-labor-department-december-2021-150137642.html (BOLD is my opinion OR what I consider important content) "The number of job openings and quits each held at historically elevated levels in December, with worker leverage remaining high as labor demand persisted. Vacancies across the U.S. totaled 10.925million at the end of 2021,the Labor Department said in its latest Job Openings and Labor Turnover Summary (JOLTS). This compared to 10.775 million openings in November, according to the revised monthly print. Consensus economists had anticipated December vacancies would come in at 10.3 million, according to Bloomberg data. The latest report represented a seventh straight month that job openings held above the 10 million level, underscoring the ongoing tightness in the labor market as employers struggle to find enough workers to fill positions. Vacancies had set an all-time high of nearly 11.1 million in July, and trended only slightly lower since then. Before the pandemic, job openings had averaged around 7 million per month throughout 2019. And beneath the surface, churn within the labor market has also increased over the course of 2021. Another 4.3 million individuals quit their jobs in December, coming down only slightly from a record high of 4.5 million in November. And the quits rate was little changed at 2.9%, or just a tick below November's record rate of 3.0%. A higher quits rate typically indicates workers are more confident that they will be able to find new jobs after voluntarily leaving their current ones. By industry, some of the largest increases in job openings were in service areas of the economy most impacted by the latest wave of the virus. Vacancies in food services and accommodation rose by 133,000 to top 1.5 million. Openings in non-durable goods manufacturing and state and local government education each rose by 31,000 during the month. High labor demand has been one factor helping push up wages for workers, but the persistent vacancies have also posed concerns to employers still recovering from the pandemic. "With constraints on labor supply, employers are having difficulties filling job openings and wages are rising at their fastest pace in many years," Federal Reserve Chair Jerome Powell said during a press conference last week. "While labor force participation has edged up, it remains subdued, in part reflecting the aging of the population and retirements." Powell — along with many other economists — also pointed out that the latest wave of the Omicron variant will likely prolong the tight labor market conditions, deterring workers who might otherwise have rejoined the labor market from returning to work for fear of infection. And other major labor market metrics have also pointed to the present tightness of conditions. The Conference Board's labor differential — or figure showing the percentage of people reporting jobs are plentiful, less those who say jobs are difficult to find — held at a historically high level of over 43.0 for eight consecutive months. And for December, 49% of small business owners reported they had job openings they could not fill in the current period, with this percentage rising by 1 point compared to November." MY COMMENT The labor markets and employment situation continues to be ROYALLY SCREWED UP. It is going to take us a long time to get out of this mess. It is going to be a very difficult couple of years for business......and.....especially small business.
Here are the secondary economic stories today. (BOLD is my opinion OR what I consider important content) U.S. construction spending misses expectations in December https://finance.yahoo.com/news/u-construction-spending-misses-expectations-152728566.html "WASHINGTON (Reuters) - U.S. construction spending increased less than expected in December as a solid rise in private projects was partially offset by a sharp decline in outlays on public projects. The Commerce Department said on Tuesday that construction spending rose 0.2% after advancing 0.6% in November. Economists polled by Reuters had forecast construction spending gaining 0.6%. Construction spending increased 9.0% on a year-on-year basis in December. It rose 8.2% in 2021. Spending on private construction projects rose 0.7% in December. Outlays on residential construction surged 1.1%. Single-family homebuilding spending accelerated 2.1%, while outlays on multi-family housing projects rose 0.4%. Homebuilding remains constrained by higher prices for building materials, especially framing lumber. The United States last November nearly doubled the duties on imported Canadian softwood lumber to 17.9% from 9% after a review of its anti-dumping and countervailing duty orders. Residential investment contracted for a third straight quarter in the fourth quarter. Investment in private non-residential structures like gas and oil well drilling was unchanged in December. Spending on structures also dropped for a third straight quarter in the October-December period. Spending on public construction projects dropped 1.6% in December. Outlays on state and local government construction projects declined 1.3%, while federal government spending tumbled 5.4%." MY COMMENT So most private construction is up but public construction spending is down. What happened to all that TRILLIONS in infrastructure money that we are spending. Unfortunately it will end up like all the shovel ready jobs that we were going to create with a government program in the past......they never happened. AND....to continue on U.S. manufacturing sector slows in January; employment rises - ISM https://finance.yahoo.com/news/u-manufacturing-sector-slows-january-150503841.html "WASHINGTON (Reuters) - A measure of U.S. manufacturing activity fell to a 14-month low in January amid an outbreak of COVID-19 infections, supporting views that economic growth lost steam at the start of the year. The Institute for Supply Management (ISM) said on Tuesday that its index of national factory activity dropped to a reading of 57.6 last month. That was the lowest reading since November 2020 and followed 58.8 in December. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index dropping to 57.5. The economy hit a soft patch in December, which appeared to have persisted into early 2022 as coronavirus infections, driven by the Omicron variant, raged across the country. The ensuing disruptions at businesses and schools have led economists to anticipate a sharp slowdown in job growth in January. The economy grew at a 6.9% annualized rate in the fourth quarter, helping to boost overall growth in 2021 to 5.7%, the strongest since 1984. Economists at Goldman Sachs on Monday slashed their first-quarter gross domestic product growth estimate to a 0.5% rate from a 2.0% pace, citing Omicron and reduced money from the government to households. The ISM survey's forward-looking new orders sub-index fell to 57.9 last month, the lowest reading since June 2020, from 61.0 in December. It was the second straight monthly slowdown in new orders. But customer inventories remain depressed, which could help to limit the pace of moderation in order growth. There was another tentative sign of improving supply chains. The survey's measure of supplier deliveries was little changed at 64.6. A reading above 50% indicates slower deliveries to factories. The steady reading in the index is encouraging given the Omicron wave, which economists had feared would keep more factory workers at home and further stress supply chains. Still, prices at the factory gate continued to march higher. The survey's measure of prices paid by manufacturers increased to a reading of 76.1 from 68.2 in December, suggesting that inflation could remain uncomfortably high for a while. The Federal Reserve last week said it was likely to raise interest rates in March, with economists expecting as much as seven hikes this year to tame inflation. Despite Omicron's rampage, factories hired more workers last month, with the ISM survey's measure of manufacturing employment increasing to a 10-month high. This is welcome news amid an anticipated sharp slowdown in job growth or even a decline in nonfarm payrolls in January. According to a preliminary Reuters survey of economists, nonfarm payrolls likely increased by 153,000 jobs in January after rising 199,000 in December. Estimates range from a decline of 250,000 jobs to and increase of 385,000. The Labor Department is scheduled to publish January's employment report on Friday." MY COMMENT All three of the economic stories posted above show that the economy is STILL on edge. We have everything lined up at the moment for a recession.........IF........big IF......the FED over-does the rate increases and focus on inflation. I still put the odds at 50/50. In addition much of the economic data continues to show the potential for coming out of the economic shutdown into what we had before the shutdown......a long term deflationary environment.
The BIG event of the day.....of course.....will be Google reporting after the close. I have seen some reports that are expecting some rough spots and I have seen some glowing predictions. It will be interesting to see the REALITY when we close today.
I also see that.....as I have had my head down madly typing this stuff......the averages have now gone GREEN across the board. It is the REVERSE of the usual mid day drop......in other words a mid day bump up. I am not sure I believe where we are at the moment in the markets. I like it....but I have no idea how we will end the day. I do believe that the general market direction this week should be POSITIVE.
You mentioned this earlier Zukodany. If this keeps up you might have to start a new thread......The Long Term Comic Book Investor. Spider-Man's Black Costume Origin Sells for $3.36 Million at Heritage Auctions to Shatter Comic Art Record Superman also breaks $3 million barrier with Action Comics No. 1 sale to kick off four-day Comics and Comic Art event https://www.ha.com/heritage-auction...95345&type=article8-1-www-icmag-feb-tem020122 "DALLAS, Texas (Jan. 13, 2022) — Spider-Man was already the star of the most expensive comic book ever sold at auction. As of Thursday, the Web-Slinger is also responsible for what is now the world's most valuable page of original comic book artwork. Page 25 from 1984's Secret Wars No. 8, which tells the origin story of the Web-Slinger's now-iconic black costume, sold Thursday at Heritage Auctions for $3,360,000. Live bidding opened at $330,000, but it quickly became clear several bidders coveted Mike Zeck's artwork as it soared past the million-dollar mark. When it hit its final price, shattering all previous comic art records, the auction gallery erupted with cheers. Marvel Comics' Secret Wars might have been created to sell toys, but this week it forever altered the comic-art landscape, as Page 24 from the same book sold moments earlier for $288,000. That's $3,648,000 total. For two pages of art from one 1980s comic book. "We could not be happier, especially for our consignor, who bought the art in the late 1980s and treasured these pages ever since," says Joe Mannarino, Heritage Auctions' New York Director of Comics & Comic Art. "Today's results prove what we've long been saying: Comic book art is as beloved and valuable as anything put on canvas." Moments later, the Dallas-based auction house sold one of the few surviving copies of Action Comics No. 1 for $3,180,000. That makes this CGC Fine 6.0 copy of Superman's debut the second-most-expensive comic ever offered by the auction house, behind only the finest-known copy of Spider-Man's first web-sling through Amazing Fantasy No. 15, which sold for $3.6 million last year to become the world's most valuable comic book sold at auction. It's also the most expensive copy of Action Comics No. 1 ever sold by an auction house. Those were but two highlights from the first session of Heritage's Jan. 13-16 Comics & Comic Art Signature® Auction — a session that realized $12,990,840 in just 90 minutes. Here, too, was a new auction record for the legendary artist and comics creator Steve Ditko. His splash page from 1966's Amazing Spider-Man No. 37, which featured the first named appearance of Norman Osborn (the Green Goblin, natch), sold Thursday for $336,000. Dave Cockrum likewise reached a new auction record, as his action-packed, star-studded original cover for 1977's X-Men No. 107 opened bidding at $80,000, only to spark a bidding war that drove the final price to $360,000. Not so far behind, Ed Hannigan and Klaus Janson's original cover for Marvel's G.I. Joe No. 21 sold for $312,200. The title character might be the Real American Hero in this book from 1984, but it was Snake-Eyes making his solo cover debut who stole the show here. This first session also included another million-dollar-plus comic book: a CGC Very Good+ 4.5 copy of Detective Comics No. 27. Batman's debut shows up at auction as infrequently as Superman's first flight, which explains why this copy sold Thursday for $1,140,000. It should not come as a surprise that Spider-Man's black costume is now responsible for the most expensive work of original comic art. The two pages from Secret Wars that tell the backstory of this living outfit — this symbiote, in the parlance of True Believers — also changed the course of Spider-Man, as the black costume slowly morphed into the villain (and anti-hero) known as Venom. And until Thursday, they had never before been available to the public. The Action Comics No. 1 that sold Thursday was known as the "Rocket Copy" of Superman's 1938 first flight, given the playful moniker because of the red spaceship stamped on its cover by its first — and, until Thursday, only — owner, whose family kept the historic issue in an envelope meant to preserve important documents. This book is as consequential as it gets: Action Comics No. 1 is the palladium title of the Golden Age, the book in which Jerry Siegel and Joe Shuster introduced readers to Clark Kent and Lois Lane and ushered in the Era of the Superhero. "I am very pleased the book sold for so much, in part because it's certainly one of the coolest items I've handled in my 20 years with Heritage," says Heritage Auctions Senior Vice President Ed Jaster. "But it gives me even greater satisfaction to have brought a life-changing windfall to the four siblings who put their trust in Heritage and our team to sell their family's copy of Action Comics No. 1." Certified Guarantee Company knows of only 77 copies of Action Comics No. 1 in existence in any condition and of just two graded CGC FN 6.0 — one of which is this copy full of white pages. Well before Thursday's live auction, collectors made it abundantly clear they were prepared to tussle over this extraordinarily vibrant example: Shortly after the auction launched in the hours before Christmas Eve, bidding on the comic book — and rocket-ship stamp itself, included with the book — rocketed past the $1.5 million mark. Bidding had surpassed the $1.9 million mark just hours before live bidding began. This was the first original-owner copy of Action Comics No. 1 Heritage Auctions has offered since 2012, when a CGC GD/VG 3.0 book from the Billy Wright Pedigree sold for nearly $300,000. In fact, Heritage has offered only a handful of Action Comics No. 1s over the last decade, with none ever breaking the million-dollar barrier (one copy came close in 2016)." MY COMMENT Who would have guessed......when we were all kids buying these books new.
man, i have a cousin that used to buy every edition (don't ask me which comic books) and keep them neatly in order on a bookshelf. he didn't like you touch them either. i sure hope he held on to his collection.
I made money today again.....so that qualifies it as a good day. I was nicely in the green.....but....got beat by the SP500 by 0.30%. who cares....just show me the money......the SP500 comparison will take care of itself as the year progresses.
As of TWO minutes ago.....a great Google earnings report. Alphabet reports big beat on earnings and revenue https://www.cnbc.com/2022/02/01/alphabet-googl-q4-2021-earnings.html (BOLD is my opinion OR what I consider important content) "Google parent Alphabet reported better-than-expected fourth-quarter earnings and revenue. The shares popped more than 6% in extended trading. The company also announced a 20-for-1 stock split that will go into effect in July. Here are the key numbers: Earnings per share (EPS): $30.69 vs $27.34 expected, according to Refinitiv Revenue: $75.33 billion vs $72.17 billion expected, according to Refinitiv YouTube advertising revenue: $8.63 billion vs. $8.87 billion expected, according to StreetAccount Google Cloud revenue: $5.54 billion vs $5.47 billion expected, according to StreetAccount Traffic acquisition costs (TAC): $13.43 billion vs. $12.84 billion expected, according to StreetAccount Alphabet reported revenue growth of 32%, proving again that it was able to withstand the pressures from the pandemic and inflation. The results follow a year of outperformance. The stock surged 65% last year, beating all other Big Tech companies and more than tripling gains in the S&P 500. Google’s advertising revenue came in at $61.24 billion for the quarter. That’s up from $46.20 billion the same time last year. The company also beat on Wall Street’s expectations for its cloud unit, which reported revenue of $5.54 billion. The unit’s operating loss came in at $890 million, which narrowed from the $1.14 billion loss it incurred a year ago. However it grew from Q3, which showed a $644 million loss. Revenue for Other Bets, which includes the company’s self-driving car unit Waymo and life sciences unit Verily, came in at $181 million — down slightly from a year ago. Traffic Acquisition Costs (TAC), which is the metric used to describe what the company pays other websites to acquire traffic, came in higher than Wall Street expected at $13.43 billion.'" MY COMMENT Those are some GREAT numbers for us shareholders. So much for all the negative opinions we were seeing a month or two ago about earnings in general......and recently about Google in particular. The cherry on top of the cake.......a HUGE 20 for 1 stock split. Now that is how you create shareholder value. Hopefully Amazon is watching how it is done.
In the past three market days we have added +5.01% to the SP500. We are now down to below (-5%) year to date at (-4.61%). I continue to see great short term potential for this week. Amazon will be a factor when they report on Thursday. I have mixed feelings.....but no facts.....as to how they will do. It is so nice to experience a somewhat.....normal....week in the markets.
That Google stock split is very exciting news.....here are the details. Google parent Alphabet announces 20-for-1 stock split https://www.cnbc.com/2022/02/01/google-parent-alphabet-announces-20-for-1-stock-split.html (BOLD is my opinion OR what I consider important content) "Google parent Alphabet announced plans for a 20-for-1 stock split on Tuesday as part of the technology company’s quarterly earnings statement. Alphabet stock was up almost 7% following the news. The move comes a year and a half after Apple most recently split its stock, giving three shares for each share that investors owned. Alphabet intends to split the Class A, Class B and Class shares of the stock, according to the earnings statement. The change requires shareholder approval. Each shareholder at the close of business on July 1 will receive, on July 15, 19 additional shares for each share of the same class of stock they own. In 2012, Google added a third class of shares, Class C, with no voting rights. The company already had Class A shares, which carry one vote per share, and Class B shares, which are held closely by founders and early investors and carry 10 votes. The company maintained this stock structure through its 2015 rebrand to Alphabet. Shares of Alphabet stock have become expensive, at over $2,750 each at the time of market close on Tuesday, having doubled since May 2020." MY COMMENT That will bring the stock below $200 per share. It will than be very affordable for people that want to own the company but are discouraged by the high price per share. In theory.....splits are neutral events. BUT.....with the stock up by 7% on this announcement and based on what usually happens with a split.......along with a high quality company......I expect a nice gain between now and the day of the split.
A good open today for the averages that I care about.....the SP500 and the NASDAQ. At the moment the DOW is red but bouncing back and forth. Google....no doubt....has a big role in the green we are seeing today. Never underestimate the ability of a......20 for 1......stock split to energize investors.
HERE is the economic news that no one will care about. Private payrolls fell by 301,000 in January: ADP https://finance.yahoo.com/news/adp-jobs-report-january-2022-labor-work-131643255.html (BOLD is my opinion OR what I consider important content) "Private payrolls unexpectedly declined in January as the Omicron variant's spread contributed to a marked weakening in the labor market at the beginning of the year. U.S. private sector employment fell by 301,000 in January, ADP said in its closely watched monthly report on Wednesday. That represented the first drop in payrolls since December 2020, and came after 776,000 payrolls were added back in December, based on ADP's revised monthly print. Consensus economists had anticipated that about 180,000 private payrolls would return in January, according to Bloomberg data. Service areas of the economy saw some of the largest declines in payrolls, with industries most vulnerable to virus-related disruptions posting some of the biggest losses. Leisure and hospitality jobs fell by more than 150,000 in January, unwinding some recent gains during the recovery. This was followed by trade, transportation and utilities jobs, which together declined by 62,000 in January. Education and health services payrolls fell by 15,000. Private employers in goods-producing industries also shed payrolls on net during the month. Both manufacturing and construction payrolls dropped in January, by 21,000 and 10,000, respectively. The January payroll report marks the first to capture a comprehensive picture of the impact the Omicron variant has had on the U.S. economy and labor market. The highly contagious variant first discovered in the U.S. in late November had not yet spread widely enough by the survey period for the December monthly report to generate a meaningful impact on the results. And even the latest jobs data may underestimate exactly how many individuals dropped out of the workforce either temporarily or longer-term due to illness or fears of becoming ill, some economists suggested. "The payroll methodology means that many people who miss a few days' work, even in the survey week, don't drop out of the count. Payrolls include people who did any paid work in the pay period covered by the survey week," which takes place mid-month, Ian Shepherdson, chief U.S. economist for Pantheon Macroeconomics, wrote in a note. "So people paid semi-monthly, bi-weekly, or monthly will still appear in the payroll even if they were absent from work for the whole survey week, as long as they did some paid work during the pay period." Heading into Wednesday's report, other labor market data have also pointed to some softening due to the latest variant and ongoing virus-related disruptions. New weekly unemployment claims spiked back to nearly 300,000 in mid-January after setting a 52-year low of 188,000 about a month earlier. And while the Institute for Supply Management's latest manufacturing employment index expanded for a fifth straight month, hiring gains were "somewhat offset by continued challenges of turnover (quits and retirements) and resulting backfilling," the firm said earlier this week in its latest monthly report. The latest labor data "continues to confirm that the problem is mostly supply driven," Ludovic Subran, Allianz chief economist, told Yahoo Finance Live on Tuesday. "You continue to have a labor participation issue in the U.S. rather than just a wage conundrum or any type of other issue." More labor market data will also emerge later this week, with the Labor Department's official monthly jobs report due out Friday. ADP typically serves as an imprecise indicator of what to expect from the government jobs data due to differences in survey methodology, given that the Labor Department tracks only workers paid during the month rather than all active employees at a company. Consensus economists are expecting the Labor Department data to show 150,000 non-farm payrolls returned in January, slowing further from the 199,000 brought back in December. If the results come in as expected, it would mark the slowest pace of hiring since December 2020. " MY COMMENT The economy is NOT the stock markets......and....the stock markets are NOT the economy. They are often DISCONNECTED in how they act and what is going on. As we have seen from many of the earnings reports so far......business....at least business that is BIG CAP and LEADERS in their field......are killing it. BUT.....the general economy.....is STILL in trouble. It is not possible to quantify how much trouble. The labor markets are totally screwed up and dont show much improvement. The supply chain is still screwed up.....but....showing very slight improvement. We are not out of the woods yet. I have been saying for months that we have 12-18 months to go and that figure has not improved. We are STILL in a very dangerous economic situation and the economy is still FRAGILE......much more FRAGILE that people think and know.
