The Long Term Investor

I have a brief moment to post right now. You guys were doing a great job today.....Emmett and Zukodany..........until the MORONS at the FED had to open their big mouths. I swear they go out of their way to tank the markets on purpose.

Stock market news live updates: S&P 500, Nasdaq drop for second straight day after Fed officials discuss half-point rate hike

https://finance.yahoo.com/news/stock-market-news-live-updates-april-21-2022-223058644.html

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

"U.S. stocks fell Thursday as investors continued to monitor a steady stream of corporate earnings results against a backdrop of elevated inflation and further Fed policy tightening.

The S&P 500 dropped and erased earlier gains. The Dow Jones Industrial Average also turned lower. The Nasdaq fell more than 2% and extended Wednesday's losses, when the tech-heavy index was weighed down by a slide in shares of Netflix. Meanwhile, Tesla (TSLA) shares rose after the electric vehicle-maker handily exceeded expectations in its fiscal first-quarter results.

Stocks dropped and Treasury yields climbed Thursday afternoon after Federal Reserve Chair Jerome Powell suggested he saw the case for front-loading interest rate hikes with 50 basis-point increases in order to quickly address persistent inflationary pressures. San Francisco Federal Reserve President Mary Daly also suggested in an interview with Yahoo Finance that she would back a larger-than-typical 50 basis point interest rate hike following the Fed's May meeting given current price pressures.

Plus, the so far mixed quarterly earnings results this reporting season have stirred up uncertainty over whether corporate profits will be able to bolster equity markets operating in an already challenging economic environment. With inflation running at its fastest rate in 40 years and weighing on economic activity, and the the U.S. Federal Reserve on track to ramp up its tightening regime despite decelerating growth, many pundits have warned of further choppiness in risk assets.

“The big question is whether the earnings can really sustain this kind of a macro backdrop of slower growth and [tighter] Fed policy," Deepak Puri, Deutsche Bank wealth management chief investment officer, told Yahoo Finance Live on Wednesday. "It seems certain companies can — historically that’s been the case. What’s different this time is really the trifecta, which is higher costs of capital, quantitative tightening, plus a lack of ... a big fiscal stimulus.”

A similar market environment was seen in 2017 and 2018, when the Federal Reserve last raised interest rates before this year, Puri added. However, at that time, a reduction in the corporate tax rate under the prior administration had helped "cushion some of the burden of a higher cost of capital," Puri said.

"This time around, I'm not really seeing much fiscal spending coming our way," Puri said. "So it could be one of those times where the market might be a little bit more volatile than what participants expect."

Other pundits also suggested tepid profit growth this year may be insufficient to propel the market forward, especially in the case of a slowdown in tech company results, given that many of these names are some of the most heavily weighted in the major equity indexes.

"Here’s the biggest risk in my opinion to the broader market right now: The broader market is concentrated in just a handful of names. What happens if their earnings or guidance for the second quarter is very dismal, or if they have a second-quarter earnings report ... that really surprises to the downside? That’s when you’ll see that downdraft in the S&P, in my opinion,” Eddie Ghabour, co-founder and managing partner at Key Advisors Group, told Yahoo Finance Live on Wednesday.

“No one is bulletproof in this environment," he added. "And I think being cautious here after the massive run up we’ve seen in the last several years in risk assets is just a prudent thing to do. Because there will be some amazing buying opportunities that will come when this bubble bursts.”

2:31 p.m. ET: Powell says it's 'absolutely essential to restore price stability,' suggests 50-basis point rate hike is 'on the table'

Federal Reserve Chair Jerome Powell reiterated Thursday that the central bank's primary goal at this juncture is to bring down inflation while trying to avoid tipping the economy into a recession in the process.

“Our goal is to use our tools to get demand and supply back in synch so that inflation moves down, and do so without a slowdown that amounts to a recession," Powell said during an International Monetary Fund panel discussion on Thursday. "It’s absolutely essential to restore price stability. Without price stability, really economies don’t work without price stability. We need that to have a strong labor market over an extended period of time. We need it for financial stability. So we must do that.”

One of the main tools the Federal Reserve has to rein in inflation is through interest rate hikes, with higher rates slowing demand and ultimately exerting downward pressure on elevated prices. And with this in mind, Powell suggested a 50 basis point rate hike at Fed's forthcoming meeting could take place to achieve the central bank's price stability target.

“We really are committed to using our tools to get 2% inflation back," he added. "It is appropriate in my view to be moving a little more quickly. And I also think there is something in the idea of front-end loading … that points to the direction of 50 basis points being on the table.”

12:51 p.m. ET: San Francisco Fed's Daly says interest rates should move 'expeditiously' toward neutral

San Francisco Federal Reserve President Mary Daly said Thursday that interest rates should move higher swiftly this year in the face of elevated inflation.

"I like to think of it as expeditiously marching towards neutral. It's clear the economy doesn't need the accommodation we're providing," Daly told Yahoo Finance's Brian Cheung in an exclusive interview Thursday.

Daly, who is not a voting member in this year's Federal Open Market Committee but still participants in monetary policy discussions with the committee, said she supports raising the benchmark federal funds rate by 50 basis points at the central bank's next policy-setting meeting in early May. Such a move would mark the first hike of more than 25 basis points from the Fed since 2000."

MY COMMENT

These people above are INSANE. As to all the analysts jumping on the negativity......earnings have been very nice so far. What planet are they living on?

As to the FED......IDIOTS. They are FOOLS trying to get back to about 2% inflation. Historically between about 3-4% is the NORM. the ONLY reason it was in the 2% range over the past years since 2008 was the world wide Deflationary depression that has been impacting the world since the near economic collapse of 2008. I swear they are trying to tank the markets. Just come out and announce you are going to make a series of 0.25 or 0.50 increases every meeting for the next year and let it go. THE MARKET HATES UNCERTAINTY.

 

GEE......I leave the board for 4-5 days and out come the drinks, buffet, dancing girls and music.

 

I.....feel you....TireSmoke. This has been a very nasty correction for some stocks especially the chip stocks. If it was me at this point I would just wait it out.....although of the chip companies........the only one that I would......and do.....choose to own is NVIDIA. those stocks are outrageously volatile.

I am afraid that with the INSANITY of the FED and their inability to shut up......we are looking at an extended correction lasting at least 6-8 months and perhaps as long as 10-14 months. Of course I have no intentions to do anything and I really dont care as a long term investor. I am reinvesting dividends at a good price.

BUT......I hate to see all the very nice earnings being wasted once again. At some.......unknown point.....things will break lose again. It is just going to take patience.

I continue to be fully invested for the long term as usual.........and I really dont care about this short term market.

 

I have to go now.....I will be back to normal next Tuesday once my little road trip is over. Hang in there Emmett and Zukodany......you got the markets till than.

Wisdom From the Greats to Help You Weather Stocks' Turbulent Ride



https://www.realclearmarkets.com/ar...you_weather_stocks_turbulent_ride_828244.html

"If you can keep your head when all about you are losing theirs ... yours is the Earth and everything that’s in it.” —English writer Rudyard Kipling,

“If—Self-control, patience, discipline—when I was young, my father drummed the lessons of Rudyard Kipling’s famous poem into my head. Today I keep a copy in my wallet—and another on my office wall. Kipling’s ode to stoicism is great life advice—and a blueprint for keeping cool when markets whip up fierce emotions. Stocks’ wild ride since January calls for that cool. Yes, 2022 has tested investors’ resolve thus far, but brighter days lie ahead. Here is more old wisdom to keep you level-headed through this classic correction.

“The four most expensive words in the English language are ‘this time it’s different.’”— Sir John Templeton

Every correction brings first-and-worst tales of unending economic doom—especially when they accompany wars, like the tragedy in Ukraine. But legendary Sir John knew economies are resilient—and coldhearted markets usually move past even the grizzliest stories well before people do.

“The investor’s chief problem—and his worst enemy—is likely to be himself. … How your investments behave is much less important than how you behave.”—Benjamin Graham

The “Father of Securities Analysis” was a behavioral finance expert before the field existed. Heed his warning against emotional decision-making.

“The 13 years I ran Magellan, the market went down nine times 10% or more. I had a perfect record—I went down more than the market, every time … .”—Peter Lynch

Lynch’s Magellan fund averaged returns of nearly 30% annually during his spectacular tenure—and he never tried to sidestep unpredictable, sentiment-driven corrections. Neither should you. Corrections and sentiment-based volatility can’t be timed—only endured.

“Bravery is not the absence of fear. It is overcoming it.” —Mellody Hobson

Successful investors—even this former Starbucks chairwoman turned Ariel Investments’ president—aren’t fearless. But they don’t let fear drive decisions.

“Face up to two unpleasant facts: The future is never clear and you pay a very high price in the stock market for a cheery consensus. Uncertainty is the friend of the buyer of long-term values.”—Warren Buffett.

History’s greatest investor knows waiting is costly—market rebounds are usually strongest early on, amid rock-bottom sentiment. Siren songs like, “Wait for the bottom!”—or, “Be sure the rebound is real!”—are misguided. Downturns spur futile quests for certainty, which never comes. Hence, you need to own stocks before uncertainty falls, as I wrote on April 10.

“You don’t make money when you buy stocks. And you don’t make money when you sell stocks. You make money by waiting.” —Mohnish Pabrai

This money manager, author and Buffett disciple knows patience is requisite to earn stocks’ exceptional long-term returns.

“Neither panic nor greed is an investment strategy. … The best foundation to help protect a portfolio against the unpredictable is having—and sticking with—a long-term strategic asset allocation plan."—Liz Ann Sonders

Charles Schwab’s chief investment officer says investors should rarely—if ever—react to short-term market wiggles. As usual, she’s right.

“Fear sells newspapers and keeps people glued to the tube, but fear does not make money in the stock market.”—David Dreman

My former Forbes colleague and master contrarian understood that markets quickly pre-price fears—including many that never come to be. That tees up the positive surprises that turbocharge stocks when few expect it.

“What makes the task of fact finding so difficult is that in the stock market the facts of any situation come to us through a curtain of human emotions.”—Bernard Baruch

Baruch was among the world’s richest and most legendary traders of the late 19th and early 20th centuries, but his words ring as true today. You can’t eliminate your emotions—but self-awareness of them helps you manage their impact on investment decisions.

“Suppose you have years until retirement but because you get jittery when the stock market drops, you sell your stocks or mutual funds. ... When stocks have recovered, you jump back in, but by then you’re ‘buying high.’ That’s like waiting for the sale at a department store to end before buying that jacket you’ve been eyeing.”—Michelle Singletary

Stocks are one of the few things people get more excited to buy when they are pricier. Singletary—a top financial columnist and author—wisely sees downturns as an opportunity for long-term investors.


Finally, more counsel from Kipling: “Force your heart and nerve and sinew to serve your turn long after they are gone, and so hold on when there is nothing in you except the Will which says to them: ‘Hold on!’” Scary downturns usually end when the future looks darkest. Hold on—the rebound’s rewards lie ahead.""

MY COMMENT

AMEN.

 

By the way......WELCOME Independentcandy14. Glad to see you posting.

YOU are in the golden era for investing as a mid 30 year old. You have decades and decades ahead of you. What is going on now is great for you if you are putting money away at these prices for the long term. You have at least 25-30 years of COMPOUNDING ahead of you for your money. This little BLIP of a correction will be ancient past when you are looking back in 15-20-25-30 years.

 

I will not have any personal results till next Tuesday for my portfolio. I dont have access to my account right now.

 

If you pop in oldmanram........how goes the recovery?

 

AND......it is a very good plan.

As for me.....I have a brief time to post. I can not check my account....but.....my phone tells me that ALL of my holdings were RED today. NO DUH. I am sure i got beat by the SP500.

I dont blame you Emmett and Zukodany. BUT......in fact you will notice that more often than not when I turn it over to you guys it ends up being a BIG LOSS. I plan it that way so I dont get blamed. I dont market time my investments.....but....I do market time the BIG DROPS so I can claim it is someone else's fault. I am very DEVIOUS......that way.

 

I.....STILL.....dont buy the media BS that the BIG CAP MONSTER stocks are interest rate sensitive. These are the most successful companies in the entire world. That story-line is total baloney. The ONLY way it can be even remotely true is as a........self fulfilling prophesy. They are the current version of the BIG CAP GIANTS of the past.......Phillip Morris, Proctor & Gamble, etc, etc, etc.

Stock market news live updates: Stocks plunge to mark another losing week as investors brace for more aggressive Fed tightening

https://finance.yahoo.com/news/stock-market-news-live-updates-april-22-2022-225944643.html

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

"U.S. stocks plummeted Friday afternoon to close out another week in the red as investors weighed a bevy of corporate earnings and braced for more aggressive monetary tightening by the Federal Reserve in coming months.

The S&P 500 plunged 2.8%, marking its second-worst day of the year, while the Dow Jones Industrial Average wiped out 980 points in its worst day since October 2020. The tech-heavy Nasdaq Composite tumbled 2.6%. Meanwhile, the 10-year U.S. Treasury yield remained at 2.9%, the highest level since December 2018.

"Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve," Harris Financial Group Managing Partner Jamie Cox said in a note. "When a Fed official suggests a 50 basis points hike, markets immediately start trying to price in 75 basis point hikes — it's madness really."

The losses follow remarks from Fed Chair Jerome Powell at a panel hosted by the International Monetary Fund Thursday signaling a 50-basis point rate increase was “on the table” for May, when the U.S. central bank holds its next policy-setting meeting. The Fed chair also reiterated that policymakers were committed to “front-end loading” inflation-fighting efforts.

"Today's market action reflects the power of Jerome Powell's comments yesterday, that the Fed is determined to slay climbing inflation and virtually acknowledging that the market can expect a 50 basis point hike in May," LPL Financial chief equity strategist Quincy Krosby said in comments Friday.

Addressing European Central Bank President Christine Lagarde and other officials on Thursday, Powell said the Federal Reserve was committed to getting 2% inflation back, referring to the Fed’s target for annual price increases.
“We’re definitely in the cards for a 50 basis point rate hike in the May meeting,” Capital2Market President Keith Bliss said on Yahoo Finance Live.“The market is pretty good at dictating, if not indicating, where this is going to go.”

With the headline Consumer Price Index at its highest level in four decades, the U.S. Federal Reserve has recently signaled aggressive monetary tightening is underway to rein in rising price levels despite warnings from experts that moving too quickly could result in an economic contraction.

“The big question is whether the earnings can really sustain this kind of a macro backdrop of slower growth and Fed policy," Deutsche Bank Wealth Management Chief Investment Officer Deepak Puri said on Yahoo Finance Live earlier this week. "It seems certain companies can — historically that’s been the case. What’s different this time is really the trifecta, which is higher costs of capital, quantitative tightening, plus a lack of ... a big fiscal stimulus.”
Despite worries from Wall Street over the next policy moves and the risks posed to traders, a readout of the Federal Reserve’s recently published Beige Book suggests Main Street sentiment remains positive overall.

Strategists at LPL Research said the Beige Book Barometer may provide a more accurate picture of the economic outlook than current consumer sentiment, which has been weak in the face of soaring inflation. Despite an economic slowdown in the first quarter, data out of Washington has come in better than consensus expectations in recent weeks.

“Looking at the Fed’s most recent Beige Book, local U.S. businesses remain resilient despite elevated uncertainty,” LPL Financial Asset Allocation Strategist Barry Gilbert said. “Inflation, COVID, and the conflict in Ukraine will keep uncertainty elevated in the near term, but if we can navigate these challenges we believe there are solid prospects of a pick-up in growth in the second half of the year.”

Elsewhere in markets, major reports out Friday included quarterly results from American Express (AXP), which fell 1.7% in intraday trading despite reporting an earnings beat, and Verizon (VZ), down 5.8% after the telecommunications giant said it lost 36,000 monthly phone subscribers during the first quarter.

"Exacerbating rate hike expectation and the prospect of quantitative tightening, there was a spate of earnings disappointments," Krosby also said in his note.

Investors continued to watch Snap Inc. (SNAP) after the company projected a strong outlook for user growth on Thursday but warned supply-chain disruptions and inflation could continue to hurt advertising demand. Shares of Snap were down 2.6% Friday afternoon.

10:03 a.m. ET: U.S. business activity decelerates in April

Business activity across the U.S. eased in April, with inflationary pressures putting a dent in service sector output as rising prices weighed on spending.

S&P Global’s Flash Composite Purchasing Managers’ Index, which serves as a measure of overall economic health, fell to a reading of 55.1 this month from 57.7 in March. Economists surveyed by Bloomberg expected a reading of 57.9. Any reading above 50 indicates growth in the private sector.

“Many businesses continue to report a tailwind of pent up demand from the pandemic, but companies are also facing mounting challenges from rising inflation and the cost of living squeeze, as well as persistent supply chain delays and labor constraints," S&P Global chief business economist Chris Williamson said in a statement.

“These headwinds, plus increased concerns over the economic outlook and tightening monetary policy, meant business confidence about the outlook slipped sharply lower in April. However, with the overall pace of economic growth and hiring remaining relatively solid, for now the focus from a policy perspective is likely to remain firmly on the need to rein in the record high inflationary pressures signaled by the survey.”"

MY COMMENT

NO ONE.......trusts the FED. That is the problem. NO ONE......wants to hold stocks and investments over a weekend.......at least if you are a BIG BANK trader or other form of speculator.

It does not matter in the slightest that the........HUGE silent majority.......of investors are simply doing nothing. It does not matter that.....main street sentiment.....remains extremely positive. The markets are being driven by the minority.....the micro-traders.

Here is the KEY takeaway from the above........REALITY:

"Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve," ........... "When a Fed official suggests a 50 basis points hike, markets immediately start trying to price in 75 basis point hikes .......it's madness really."

YES......it is MADNESS and stupidity on the part of the people at the FED with ZERO awareness of what they are doing to the markets and the economy by their constant speaking. They act like it is their job to create.......turmoil and uncertainty.

The ONLY good thing about this week for most investors is the fact that it is OVER. We can continue to move forward next week.........to the promised land of financial security......and as Bob Brinker used to say on his investing radio show..........financial "CRITICAL MASS".

 

Got to run. I will be back fully in touch on Wednesday. THIS is what I think of the FED and all the other so called experts.

We Need Institutions and Experts, But Please Beware Both

https://www.realclearmarkets.com/ar...nd_experts_but_please_beware_both_828405.html

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

"As I write this, it is Good Friday, in the morning. The cock has crowed three times. Jesus has been tried and convicted by the Sanhedrin. He is brought before Pilate who is sympathetic, but the mob chooses death. Jesus has been cancelled. There is much to unpack here, but the relevant portion to the thoughts I wish to convey is this: while much has changed since this day in history, very much remains exactly the same. We humans are “wired” to behave in certain ways.

Understanding this circuitry is a science that needs further reflection in our society. We have an innate gyroscope deep within our souls that directs us to go places and do things without much conscious thought. If we are not careful in analyzing this force and the direction it leads us, we can easily slip and fall and do things our conscious regrets. Indeed, we are all corruptible and capable of bad or even evil acts. Yet, there is a duality to man, where with work and an understanding to thwart our more primitive instincts, we can do great good and even selfless acts. Although I could give y’all a stemwinder of a sermon right now, I will focus solely on the secular and why we should be warily distrustful of “institutions,” most notably collective bodies of experts.

The good news for us is that we have several thousand years of data on human nature. Human behavior is the operating mechanism that determines the trajectory of economics, history and political events. We can solve almost all our societal problems by studying and understanding this phenomenon. Our Founders understood this which is why James Madison stated “if men were angels, there would be no need for government.” Always and everywhere, our constitution and rules promulgated under it should thwart out darker sides in favor of leading us toward our better angels. However, this can’t be done unless we acknowledge how the fluid state of our imperfect nature affects our world.

Let’s look at the Pharisees and the Sanhedrin. They were strict adherents to specific and detailed orthodoxies. How would you feel if you spent your whole life being taught what to think by the most notable scholars of the day and these fundamental principles of your core were under attack? Perhaps proven to be wrong? Suppose you had invested your whole life into a field of study that had given you great prestige, you were an acknowledged expert, your whole identity was associated with this school of thought, and now it was being challenged? Would you listen or would you try to cancel the “heretics” who threatened your world view? Because institutions are made of man, they are self-preserving and corruptible, which inevitably leads to monolithic thinking and efforts to “cancel” dissenters. These issues are at play today in economics, medicine, politics and all “sciences” known to man.

Let’s look at economic science and so called “economists.” Let’s acknowledge that just like the Pharisees and the Sanhedrin, many are invested in a particularly rigid school of thought. Perhaps, like the Pharisees of old, they were taught only “one” way and any diversion would be heretical (this seems to be the way our universities operate today). Like the Pharisees, they ascribe a great deal of self-importance to themselves due to their training and supposed knowledge of arcane and minute matters. Using tactical sophistry, they often make matters more complicated than need be in efforts to dazzle you with their brilliance.


They sound impressive, but are they really? One need not look far to see these issues at play with the Federal Reserve Board and their slavish adherence to their godlike powers to manage our economy. In actuality, it is a paper tiger. Policy drives the economy, not the elevated egos of the expert class. The belief that a handful of pointy headed academics can magically manage a multi-trillion-dollar economy by tinkering with interest rates is an example of gargantuan egotism and extreme hubris. This modern Sanhedrin elite engages in economic snake-oil-ism, primarily because it enshrines itself with highly coveted self-importance and societal purpose, not to mention the most powerful aphrodisiac in the world, power. Many economic shibboleths taken for granted as truth, are merely tools to keep entrenched institutions further entrenched. Beware Greeks bearing gifts, beware associations of experts because they often are practicing self-preservation and not truth. Every institution made of man is on a road to corruption.

Let’s look at the axis between big government and heath care. The pandemic has flushed out the institutional corruption of the medical establishment. Virtually, everything our government told us about the corona-virus has turned out to be wrong. Space does not permit me to give an exhaustive list. I suggest reading Robert F. Kennedy, Jr.’s The Real Anthony Fauci. It will shock you. The collaboration between big government and big pharma is a story of self-enrichment on an extraordinary scale, all of which enabled hundreds of thousands to die needlessly. The CDC, WHO, FDA and NIH are all institutions that proselytize their superior academic knowledge to which, like the Sanhedrin, we are all supposed to bend the knee. In truth, they are corrupt, self-preservation guilds.

Whatever you may think of Donald Trump, he was above anything else a disrupter and an extreme threat to all of the agencies of experts in Washington DC. He threatened their power, money and prestige. In essence, he wanted to throw the money-changers out of temple. No, I am not comparing Trump with Jesus. I am simply making an analogy about human nature and the natural evolution of institutional corruption. Oh, how these institutions fought back! Trump was impeached twice on absurd charges.

My point Dear Reader? Please don’t blindly accept as gospel any pronouncement from any group of experts. We need institutions and we need experts, but history teaches us that while these institutions may begin with noble and august intentions, they will inevitably and perhaps unknowingly become something else. When institutions enlist the help of the mob, they have completed their journey from corruptible to corrupt.

It is easy to “wash our hands” in front of the powerful cabal of experts and their lackies who attack us for challenging them, but that is our job as citizens, parents and investors. Truth is the noblest of all human pursuits. Courage combined with healthy dozes of Aristotelean logic and Socratic truth finding will get us there.


Don’t listen to the man, be the man!"

MY COMMENT

As an investor IGNORE the experts. BE THE MAN. Use your own logic and common sense. It is very simple.....yet we all make it so difficult.

I HOPE those that have never invested through a correction lasting more than a few weeks......(everyone investing since about 2009).....are not giving in to NEGATIVITY. There is NOTHING big going on right now.

I have no concern about what is happening right now......it is the same thing I have dealt with many times in the past as an investor. We are simply in the middle of a.....NORMAL......traditional style correction. Trust yourself.......and.....trust the FORCE. That is why......

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

 

I have some afternoon down time this afternoon.....so lets talk about the real estate markets.

March Existing Home Sales: Rising Rates Replacing Lean Inventories As Drag On Sales

https://assets.realclear.com/files/2022/04/1983_existing.pdf

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

This is a good little article. Here is the bottom line.........just part of the article:

".........listings of existing homes for sale rose to 950,000 units in March, an 11.8
percent increase from February and much larger than the normal March increase. Recall that
the NAR inventory data are not seasonally adjusted, and in a typical year listings begin to
rise in February ahead of the spring sales season then continue to push higher through the
summer months. Listings did not budge this February, however, so it could be that the
sizable increase in March simply reflects payback, or it could be that rapidly rising mortgage
interest rates led sellers to rush to get their homes on the market before rates climbed even
further. That was a race destined to be lost, in light of how rapidly mortgage rates have risen
over the past several weeks. Either way, it could be that the summer build in inventories will
be smaller than normal this year should higher mortgage rates act to keep homeowners in
their present homes. The flip side of that, however, is that those selling homes they have
been in for some time are likely to walk away with a sizable capital gain that can go toward
the purchase of their next home, thus holding down loan-to-value ratios and mitigating the
impact of higher mortgage rates, while all-cash buyers, who accounted for 28 percent of all
March sales, are of course not sensitive to higher interest rates.

Eighty-seven percent of existing homes sold in March were on the market less than a month
before going under contract and median days on market fell to 17 days, matching the lowest
on record. When we envision a more “normal” looking housing market, neither this nor
double-digit price appreciation are part of it. That leaves a lot of room between where we are
now and the housing market crashing.

MY COMMENT

The HOT market continues. It is still a strong sellers market. A very difficult market for buyers.

 

Here in my little local area of 4200 homes we are in a.......listing boom. We now have 20 houses actively for sale. YES........20......out of......4200. that is the most we have had all year here. Sales of homes are STILL mostly happening in a week or less and many deals are for all cash.

The highest active price is about $2.3MILLION........the lowest active price is about $675,000. Of the 20 houses for sale.......10 are above $1MILLION and 10 are below. We currently have a nice mix of homes and prices for potential buyers to choose from........but.....they STILL have to choose very quickly. AND......I am sure that homes.....especially those under $1MILLION are getting multiple offers and selling above list price.

We got out TAX ASSESSMENT last week. Our assessed value for our home and those of everyone that I spoke with......DOUBLED from last year.

LUCKILY here in Texas for actual tax purposes the amount of assessed value that a home can be taxed on is limited to a 10% increase from year to year. Additionally those like myself.......can FREEZE our taxes under an "age 65" exemption.

 

I like this little article.....but......this is NOT showing up in the markets.

Economic data hasn't just been strong — they're exceeding expectations

https://finance.yahoo.com/news/econ...-theyre-exceeding-expectations-172428055.html

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

"People have been concerned about the possibility that the economy could soon go into recession. Indeed, “recession” has been a trending topic, according to Google Search data, peaking during the week ending April 16.

On Monday, I wrote a piece for TKer’s paid subscribers explaining how the economy’s massive tailwinds were more than enough to offset the shedding of some demand.

And throughout the week, we got a slew of data and anecdotes confirming as much.


(Source: Google Trends)
According to the Federal Reserve’s Beige Book — a collection of anecdotes from the Fed’s business contacts across the country — the economy continues to grow despite challenges related to labor shortages and supply chain issues. (Emphasis ours):

“Economic activity expanded at a moderate pace since mid-February. Several Districts reported moderate employment gains despite hiring and retention challenges in the labor market. Consumer spending accelerated among retail and non-financial service firms, as COVID-19 cases tapered across the country. Manufacturing activity was solid overall across most Districts, but supply chain backlogs, labor market tightness, and elevated input costs continued to pose challenges on firms' abilities to meet demand. Vehicle sales remained largely constrained by low inventories. Commercial real estate activity accelerated modestly as office occupancy and retail activity increased. Districts' contacts reported continued strong demand for residential real estate but limited supply. Agricultural conditions were mixed across regions. Farmers were supported by surging crop prices, but drought conditions were a challenge in some Districts and increasing input costs were squeezing producer margins across the nation…”

According to the Philly Fed, coincident indexes1 were up across all 50 states in March, reflecting broad economic growth. Check out the map below.


The Conference Board’s Leading Economic Index2 also climbed to a new record high in March.

“This broad-based improvement signals economic growth is likely to continue through 2022 despite volatile stock prices and weakening business and consumer expectations,” The Conference Board’s Ataman Ozyildirim said.


From a labor market standpoint, there’s no sign that layoffs are picking up.

Quite the opposite. In the week ending April 16, initial claims for unemployment insurance benefits declined to just 184,000, the ninth straight week this measure was below 200,000.


(Source: Dept. of Labor)
As for a key driving force for stocks over time: First quarter corporate earnings have been exceeding estimates made by Wall Street analysts.

From FactSet: “For Q1 2022 (with 20% of S&P 500 companies reporting actual results), 79% of S&P 500 companies have reported a positive EPS surprise and 69% of S&P 500 companies have reported a positive revenue surprise.“

Anecdotes coming from corporations have generally been positive as well.

Bank of America confirmed spending has been robust and consumer finances are strong. From the bank’s earnings call:

“From our card spend to data, we have seen a strong recovery in travel, entertainment, restaurant spending… Even with the fuel costs up 40%... Importantly, despite March of last year including stimulus bonus, we saw the spending in the month of March 2022 on a comparable basis to 2021 13% higher by dollar volume and we saw a 7.4% increase in the number of transactions. So, both dollar volumes and numbers of transactions rose nicely… Our data showed continued growth in the average deposit balance across all customer levels, which suggests capacity for strong spending continue.”

Economists from Bank of America’s Global Research team shared this chart of checking and savings account balances, which shows households at all ends of the income spectrum have extra cash in their bank accounts.


United Airlines said demand for travel is rising at an impressively rapid pace. From CEO Scott Kirby’s appearance on CNBC:

“I’ve never seen in my career, and I’ve been in this industry a long time... such a hockey stick increase of demand.“

American Airlines echoed that sentiment, forecasting a big second quarter. From the company’s earnings announcement:

“American will continue to match its forward capacity with observed bookings trends. Based on current trends, the company expects its second-quarter capacity to be approximately 92% to 94% of what it was in the second quarter of 2019. American expects its second-quarter total revenue to be 6% to 8% higher than the second quarter of 2019.”

All that said, we can’t talk about the past week without discussing Netflix. Shares plummeted 35% after the company revealed it had lost 200,000 subscribers during the first quarter despite previously telling shareholders that it expected to add 2.5 million subscribers during the period. Additionally, management said it expected the company to lose another 2 million subscribers in the second quarter.

But don’t take Netflix’s disappointing developments as a sign that consumers are broadly canceling their streaming subscriptions. In fact, AT&T said its subsidiaries HBO and HBO Max added 3 million subscribers in the first quarter.

On a slightly more wonky note, the Citi U.S. Economic Surprise Index continues to trend higher, which means actual economic data has been exceeding estimates made by professional economic forecasters.


(Source: Bloomberg via @LizAnnSonders)
Big picture: Unfortunately, none of this may be what policymakers like the Federal Reserve want to hear right now as they fight inflation. That’s because as long as economic growth is outstripping the economy’s capacity to supply goods and services, there’ll continue to be inflationary pressure on prices.

For now, despite high inflation, rising interest rates and geopolitical uncertainty, the economy most certainly doesn’t seem to be headed for a recession any time soon."

MY COMMENT

That is some hefty good news above.....at least for the economy. The economy is BOOMING. Most measures are EXCEEDING the estimates and some are blowing the estimates away.

On the EARNINGS side of things....they are kicking ass:

“For Q1 2022 (with 20% of S&P 500 companies reporting actual results), 79% of S&P 500 companies have reported a positive EPS surprise and 69% of S&P 500 companies have reported a positive revenue surprise.“

Strange......isn't it.....that just last week there were many articles bad mouthing earnings and......CLAIMING......that they were not coming in that well. WELL......not really so strange.....the financial media and short term traders/speculators often have a vested interest in talking down the markets.

The above is ALL great news......but will it translate into rising stock prices? Perhaps...but there is no guarantee.......at least in the short run.

I do agree that the above information tends to say......there will be NO recession. BUT.....the recession when it comes will NOT be driven by the economic data. It will be driven by the stupidity and incompetence of the FED needlessly pushing us into a recession......just like they always tend to do.

 

I should be fully back to posting on next Wednesday. My little road trip has been extended for an additional day. I will put some stuff up here when I get a chance in the meantime.

 

Looking forward to this week.

https://finance.yahoo.com/news/big-tech-earnings-pce-inflation-what-to-know-this-week-181023993.html
"Earnings calendar

Monday

Before market open: Activision-Blizzard (ATVI) at 7:30 a.m. ET, Coca-Cola (KO), Otis (OTIS)

After market close: Whirlpool (WHR) at 4:05 p.m. ET

Tuesday

Before market open: Warner Bros. Discovery (WBD) at 7:00 a.m. ET, UPS (UPS), PepsiCo (PEP), General Electric (GE), Centene (CNC)

After market close: Alphabet (GOOG, GOOGL), Microsoft (MSFT), General Motors at 4:00 p.m. ET (GM), Chipotle (CMG) at 4:10 p.m. ET, Visa (V), Capital One (COF) at 4:05 p.m. ET

Wednesday

Before market open: Humana (HUM) at 6:30 a.m. ET, T-Mobile US (TMUS) at 7:30 a.m. ET, Boeing (BA), Kraft Heinz (KHC), Amgen (AMGN)

After market close: Ford Motor (F) at 4:05 p.m. ET, Meta Platforms (FB), Qualcomm (QCOM)

Thursday

Before market open: Caterpillar (CAT) at 6:30 a.m. ET, Altria (MO) at 7:00 a.m. ET, Twitter (TWTR), Comcast (CMCSA), Merck (MRK), Northrop Grumman (NOC), Domino's Pizza (DPZ), Keurig Dr. Pepper (KDP)

After market close: Amazon (AMZN), Apple (AAPL), Intel (INTC), PayPal (PYPL), Robinhood (HOOD)

Friday

Before market open: Bloomin’ Brands (BLMN) at 7:00 a.m. ET, Honywell (HON), AbbVie (ABBV), Bristol-Myers Squibb Company (BMY), Exxon Mobil (XOM), Chevron (CVX), Colgate-Palmolive Company (CL), Phillips 66 (PSX)"

MY COMMENT

FIVE of my ten companies report this week.....not that the markets will care.