FED minutes came out today. The Fed’s Minutes Are Hawkish. They Also May Be Out of Date. https://www.barrons.com/articles/fed-fomc-minutes-release-today-rate-hikes-51657050467?siteid=yhoof2 (BOLD is my opinion OR what I consider important content) "Minutes from the Federal Reserve’s June 14-15 meeting reveal central bankers’ growing anxiety over inflation and plans to adopt a restrictive policy stance in order to cool rapidly rising prices. The minutes read hawkish. Major stock indexes, however, rose after the release as investors consider economic developments since the Fed last met and bet that flagging economic growth will ultimately limit the amount of tightening the central bank must conduct. Both the S&P 500 SPX +0.36% and Nasdaq 100 NDX +0.62% gained about 1% within an hour of the release. Members of the Federal Open Market Committee, the Fed’s policy-setting arm, agreed in June that a rate increase of 0.5 percentage point or 0.75 percentage point would likely be appropriate in July after they agreed to a 0.75-percentage-point hike in June. That was the biggest rate increase since 1994, prompted by a hot consumer price index and a surprise jump in consumer inflation expectations’ just before the June meeting. Those two data points dashed hopes that inflation had already peaked and set off alarm bells that inflation is becoming entrenched. Investors already knew that the Fed is between a half-point and another three-quarter point hike for July. Fed Chairman Powell suggested the base-case is the former, though he hasn’t taken another 0.75-point increase off the table. Traders have priced in about a 90% chance of a 0.75-point increase in July, and the minutes should do nothing to change that expectation. Where the question remains is what happens after July. On their face, the latest meeting minutes indicate the Fed will remain aggressive, with 0.5-percentage-point hikes the new 0.25-point moves and officials suggesting they will err on the side of overtightening. “Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist,” the minutes say. But one of the big reasons for the 0.75-percentage-point hike was a data point that has since been revised lower, presumably relieving some panic that is palpable in the minutes. That is as commodity prices tumble, further increasing hopes that inflation—at least on the goods side of the economy—has topped. As for the revised data point that was key to the super-sized hike: Officials expressed particular concern over the University of Michigan’s 5-10 year inflation expectations gauge within the university’s monthly consumer confidence report. That measure shot up from 3% to 3.3% just before the June meeting. “Many participants raised the concern that longer-run inflation expectations could be beginning to drift up to levels inconsistent with the 2% objective,” the minutes say, adding that those participants said that if inflation expectations were to become unanchored, it would be more costly to bring inflation back down to target. Soon after the June meeting and 0.75-point decision, though, the University of Michigan released its revised report, with the 5-10 year inflation expectation figure revised down to 3.1%. It noted that the revised reading was back within the 2.9% to 3.1% range that has held for the past year or so. Still, inflation expectations remain well above the Fed’s 2% target. And while commodity-price declines, rising mortgage rates, and warnings from companies including retailers are underpinning hopes that inflation has finally topped out, peaking is one thing and falling is another. Consider what economists at Goldman Sachs said this week. The year-over-year core CPI—which excludes food and energy—will reaccelerate this summer, to 6.3% in September from 6% in May, they say. By year end, it will still be at 5.5%, they add, which is almost three times the targeted annual rate of inflation. Markets have already shifted their focus from inflation to growth—and more so after the big June hike and ahead of a potentially similar increase this month. Unclear is when the Fed will shift its focus, and whether inflation will remain high even as growth falters. The June minutes don’t give any hints that officials are starting to waver. But things are moving fast, and the minutes are already three weeks old. “What markets want to hear now is what the Fed has in mind if economic data releases continue to signal a deeper, more serious downturn without a commensurate easing in inflation,” says Quincy Krosby, chief equity strategist at LPL Financial. What markets hope for is that by the next meeting, inflation is plateauing, indicating that Fed policy is working, she says. For that, investors will have to keep waiting. At this point, economists expect the June CPI report, due out July 13, to show overall prices rose another 8.6% from a year earlier. " MY COMMENT All of the above sounds good. Nothing unexpected. Although.....I do think that the FED target of 2% inflation is unrealistic and worse....unhealthy. I am old enough to remember back in the 1970's and 1980's when NORMAL inflation.......that was considered healthy for the economy......was routinely described as 3-4%. My view is that 2% is too low and is borderline......deflation. I would much rather.......for the markets and for the economy....see the FED give some leeway on the upside of inflation rather than get us back into a deflationary situation like we were in for 10+ years following the 2008/2009 economic collapse.
HERE is much more information on the market reaction to the FED commentary today. S&P 500 rises for third straight session as Fed restates commitment to bringing down inflation https://www.cnbc.com/2022/07/05/stock-market-futures-open-to-close-news.html (BOLD is my opinion OR what I consider important content) "U.S. stocks moved slightly higher on Wednesday as investors pored over the latest minutes from the Federal Reserve. The Dow Jones Industrial Average gained 69.86 points, or 0.23%, to 31,037.68. The S&P 500 added 0.36% to 3,845.08. The tech-centric Nasdaq Composite rose 0.35% to close at 11,361.85. CNBC Stocks bounced after the Federal Reserve released the minutes from its June meeting, showing that the central bank was committed to bringing down inflation. Fed members said the meeting on July 26 and 27 likely also would see another 50- or 75-basis point move, the minutes showed. A basis point is one one-hundredth of 1 percentage point. “In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes stated. “In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.” Defensive plays and utilities were some of the best performers on Wednesday. Shares of Northrop Grumman jumped 3.8%, while UnitedHealth Group added nearly 2%. Constellation Energy climbed more than 3%. High quality tech stocks also performed well, with Cisco Systems and Adobe each adding 1.7% and Microsoft gaining 1.3%. Bond yields extended their gains for the day after the release of the Fed minutes, suggesting that investors may be pricing in a more aggressive central bank. That would be reassuring to some equity investors, who want the central bank to slow inflation so the economy can normalize more quickly. “I think what markets might be latching ontois the comment about how a more restrictive stance might be appropriate if inflation pressures persist,” said Zachary Griffiths, macro strategist at Wells Fargo. “That’s probably more hawkish than Powell’s comments at his press conference.” “That might be a comment that indicates they would tolerate a mild recession and continue to tighten policy if the inflation data remains too elevated. It’s certainly between a rock and hard place but I think they’re trying to communicate they are committed to getting inflation under control,” Griffiths added. Energy stocks were some of the worst performers on the day, as oil prices continued their recent slide. Shares of Chevron slipped 1.3%, and Diamondback Energy fell 3.4%. Investors continued to worry about whether the economy is falling into a recession after the benchmark 10-year U.S. Treasury yield fell below the 2-year yield. The so-called yield curve inversion historically has been a warning sign that the economy may be falling or has already fallen into recession. Some Wall Street analysts say a recession could be mild. On Tuesday Credit Suisse said it sees the U.S. dodging a recession as it slashed its year-end S&P 500 target to reflect the effect of higher capital cost on stock valuations. “We’re seeing a game of chicken right now, with growth and inflation barreling ... toward each other to see which one is going to flinch first. Ultimately, they’re both going to turn over, but which one turns over first is going to be the most critical for the path forward,” said Chris Osmond, the chief investment officer at Centura Wealth Advisory. There were some bright spots in economic reports on Wednesday. The Institute for Supply Management services PMI data came in better than expected, though the report did show a slight slowdown in growth. Job openings also came in higher than expected, at more than 11 million. However, mortgage demand fell week over week even as rates declined, according to the Mortgage Bankers Association. Wednesday’s moves follow an intraday reversal in the previous session. The S&P 500 and Nasdaq Composite have now gained ground in three straight sessions." MY COMMENT THREE STRAIGHT DAYS........yeah.....for the NASDAQ and the SP500. Who would have thought. I will be very interested to see how we approach the end of the week. Will we have two more of these.......mild days. Or.....will we have a big jump up or big drop day in there. My suspicion is for two more days like the ones that we have experienced so far this week. All I care is......SHOW ME THE MONEY.
Looks like still a little fight back carrying over from yesterday to this morning. It is early on though, so who knows. Time and patience.
Three in a row and we are going for number four today. Looking good so far with all the averages positive. I like the "feel" of the markets today.
I like the message of this little article. My favorite visualization of short-term stock market performance https://www.tker.co/p/sp-500-intra-year-max-drawdowns (BOLD is my opinion OR what I consider important content) I first saw a version of this chart back in 2013, when I was the markets editor at Business Insider. Since then, I’ve looked at it over and over again to remind myself of how volatile the stock market can be over short-term periods.1 It comes from JPMorgan Asset Management’s regularly updated Guide to the Markets. Going back to 1980, the chart shows each year’s annual return for the S&P 500 in gray and its intra-year max drawdown (i.e., a decline from its high) in red. There are a few observations to note2: You can get smoked in the short term. In each year, the S&P 500 has experienced an average max drawdown of 14%. And there are many instances of 20%+ sell-offs like the one we’re experiencing now. The market usually gains more than it loses. As you can see in the chart, the S&P 500 ended the year positive in 32 of the 42 years measured. This means that in most years, the market has recovered the losses experienced in the max drawdown. The market can quickly recover huge losses. 1987, 2009, and 2020 had larger max drawdowns than what we’ve experienced so far this year, yet the market closed each of those years higher. It’s unusual for this to happen, but it’s not unprecedented. Average rarely happens. You might’ve been told at some point that the stock market has historically returned about 10% on average. But there are very few years when the market has actually risen by 10%. That average is a function of many better-than-average years, many lackluster years, and a handful of pretty awful years. Stomach-churning sell-offs like the one we’re living through right now are not unprecedented. It speaks to two conflicting realities investors must cope with: In the long run, things almost always work out for the better, but in the short run, anything and everything can go wrong. This is what investing is all about. The worst first half since 1970 Almost every major media publication ran with a headline that employed a phrase like “worst first half since 1970”3 to describe the stock market’s performance so far this year. And it’s accurate. Down 20.6% from January through June, the S&P 500 had an unusually bad sell-off for that specific six-month stretch. Ben Carlson at Ritholtz Wealth Management had a slightly different way of looking at it. In a blog post on Saturday, he charted the rolling six-month returns on the S&P 500 (i.e., all six-month periods, not just the period from January through June). (Source: Ben Carlson) “The only 6 month performance numbers that were worse than what we just lived through occurred during the Great Depression, 1937 crash, WWII, 1970s bear market, bursting of the dot-com bubble and 2008 crash,” Carlson observed. In other words, losses greater than 20.6% over six month periods are still incredibly rare. But they have occurred two other times since the 1970 experience everyone has been talking about. This is not to downplay the severity of the declines. Indeed, those other periods have represented some frightening times for investors. It’s just a reminder that it’s not as uncommon if you take a more holistic view of the historical data. Importantly, it’s also a reminder that the market has always bounced back — even from the most intense sell-offs — and gotten stronger over the long term." MY COMMENT YES......more information that backs up the truth of long term investing. As to short term....."investing".....it does not exist. Why? Because short term is NOT "investing"....it is speculation, and guesswork. I like the message of this article and especially the charts that: In the short term anything and everything will go wrong......but over the long term.....things almost allways work out for the better. At least at the moment we are seeing a break in the earlier trend this year for EVERY week to be down. We are now seeing a mix of up and down weeks......a definite improvement from the earlier trend this year.
Looks like good news to me. US jobless claims rose to 235,000 last week, most since mid-January https://finance.yahoo.com/news/jobless-claims-july-7-124345808.html (BOLD is my opinion OR what I consider important content) "Initial jobless claims unexpectedly edged higher last week in a potential sign the labor market may be cooling amid tighter financial conditions. The print comes ahead of the government's monthly employment report for June due out Friday. First-time filings for unemployment insurance in the U.S. totaled 235,000 for the week ended July 2, increasing by 4,000 from the prior week's reading of 231,000 claims, the Department of Labor said Thursday. Economists surveyed by Bloomberg had expected the latest figure to come in at 230,000. The 4-week moving average, which smooths out some weekly volatility in the data, stood at 1,335,000 as of last week, an increase of 16,500 from the previous week's downwardly revised average of 1,318,500. The rise in claims marked the highest weekly total since the week ended January 15, 2022 and comes as a growing number of companies across Corporate America announce hiring freezes and layoffs in anticipation of an economic downturn. "We think the risk is that initial claims edge higher, but we don't look for a steep rise in claims from current levels," said Nancy Vanden Houten, lead US economist at Oxford Economics. "Reports of layoffs are increasing in some sectors, however demand for workers remains historically high." Job losses in recent weeks have been most prevalent among the technology and real estate sectors. Hiring pauses, rescinded offers, and staff cuts have occurred among names including JPMorgan (JPM), Microsoft (MSFT), Tesla (TSLA), Coinbase (COIN), and real estate platforms (RDFN) and Compass (COMP). The Labor Department’s June monthly jobs report due out Friday will offer a more comprehensive gauge of how the labor market is holding up against inflation, higher interest rates, and growing concern about a recession. The report, due out at 8:30 a.m. ET Friday morning, is expected to show 275,000 jobs were created last month, according to data from Bloomberg." MY COMMENT I see this as a positive indicator for the markets and the economy. We need to continue to get all the EXCESSES out of the labor markets and the economy.
I have seen BIG decreases in gas prices at the pump this week....at least in my area. I got gas the other day for $4.19. A week ago the prices were .40cents to .50cents higher. Yesterday every station I saw was in $4.18 to $4.21 range. Another good short term indicator.
Glad to see the gains pile up a little bit in my accounts this week.....so far. It is nice to replenish some of the losses so that I will be able to stay stuck in my little account.......LOSS RANGE.......when we see some nasty days in the near future. I do not think that the bear market is over yet. We have too many upcoming events with earnings, and the FED, and inflation for this to all be over with. BUT.....the UP days and weeks are a welcome break from the water torture that the market has been imposing on investors this year. The GOOD NEWS......although I hate to mention it and JINX myself.......my accounts appear to have hit their PEAK LOSSES weeks ago and seem to be in a stable.....loss..... range now for the past month or so. I dont mind the LOSS RANGE that I have been in for a while now. I also dont mind bumping along in that range for a good number of future months. I am content to just sit and wait for the markets to get positive again some time in the near to medium future.
Hanging in there so far today. U.S. stocks climb as Wall Street eyes 4th day of gains https://www.marketwatch.com/story/w...h-set-to-lead-again-11657187795?siteid=yhoof2 (BOLD is my opinion OR what I consider important content) "U.S. stocks traded higher on Thursday, on track for what could be a fourth day of gains for the Nasdaq Composite and the S&P 500 index. How are stocks trading Dow Jones Industrial Average DJIA, 0.89% gained 200 points, or 0.7%, at 31,243. S&P 500 SPX, 1.14% gained 39 points, or 1%, to 3,884. Nasdaq Composite COMP, 1.65% increased 167 points, or 1.4%, to 11,528. On Wednesday, the Dow Jones Industrial Average DJIA, 0.89% rose 70 points, or 0.23%, to 31038, the S&P 500 SPX, 1.14% increased 14 points, or 0.36%, to 3845, and the Nasdaq Composite COMP, 1.65% gained 40 points, or 0.35%, to 11362. What’s driving markets Technology stocks lead the market higher as investors reacted to the fall in commodity prices over the past month, which has helped to cause a moderation in inflation expectations and a fall in bond yields which has in turn benefitted growth stock valuations. Even as crude oil prices recovered some ground on Thursday, they remained down nearly 20% over the past month, though energy stocks rallied on the day, reversing some recent losses. Chevron CVX, 2.00% rose 2.5%, while Exxon XOM, 3.14% gained 3%. Paul Nolte, a portfolio manager at Kingsview Asset Management, said economic growth fears that have triggered the pullback in commodity prices have also inspired a shift in thinking about the Federal Reserve’s plans. Investors are increasingly betting that the central bank won’t need to be as aggressive with its interest rate hikes. “Markets right now are betting that the Fed is going to break and follow the economy, not necessarily inflation,” Nolte said. Instead, traders are hoping that the battering delivered to stocks this year means that there might be an opportunity for the market to be pleasantly surprised when the U.S. second quarter earnings reporting season enters full swing next week. Some analysts are wary though. “Stocks could see a second phase of bear market driven by earnings weakness. A trough is likely to come only when unemployment rates are close to peaking, which could be a year or so from now, ” said Trevor Greetham, head of multi asset at Royal London Asset Management. “Broad diversification, active tactical asset allocation and disciplined downside risk management will be key to navigate the bumpy road ahead,” he added. Meanwhile, equity investors appear to have decided that the minutes from the Federal Reserve’s June policy meeting, released on Wednesday, contained little to be concerned about. Attention will now turn to a speech on Thursday from St Louis Fed president James Bullard, and Friday’s nonfarm payrolls report for fresh clues to the Fed’s policy trajectory. The benchmark 10-year Treasury yield TMUBMUSD10Y, 2.983% was up 4 basis points at 2.950%. Data released Thursday by the Labor Department showed the number of Americans filing new claims for jobless insurance increased by 4,000 last week, while the number of ongoing claims increased by 51,000. Investors are now looking ahead to Friday’s payrolls report for the month of June. Nolte said that stocks might run out of steam later in the session as investors close out their positions ahead of the Friday morning report. The U.S. also saw its trade deficit narrow in May, data that Capital Economics says could help bolster growth in the second quarter. Lately, investors have increasingly feared that the U.S. economy might see slow growth, or perhaps even a contraction, during the second quarter." MY COMMENT All in all a positive outlook for today and probably tomorrow. Of course the FED will be blabbing today. Many commodities are down, oil is down, and the Ten Year Yield has backed off from the recent highs. Earnings are coming up as is the Google 20 for 1 split. Perhaps the markets are going to get back to FUNDAMENTAL REALITY for a time. I sure hope so.
Looked at my account......and....STILL doing great today. My loss at the moment has dropped to (-24%). It shows you where we are in the markets when I am willing to....CELEBRATE....a LOSS of 24%.
I saw this quote in an article.....it reflects my view of this week. "There’s not necessarily much conviction in this move, but it is nice to see that, in the absence of new negative news, that markets are bouncing off of short-term oversold levels,” said Angelo Kourkafas, investment strategist at Edward Jones." https://www.cnbc.com/2022/07/06/stock-market-futures-open-to-close-news.html Nice that the markets today are.....SHOWING ME THE MONEY. Also.......nice to see Emmett once again posting some music and film clips......he is our entertainment industry trusted contact.
Yes. Good post WXYZ. The chart and information provided with it provides a overall realistic perspective. It is helpful to see and read this type of information. There is always plenty of doom and gloom and we can get bogged down by the continual barrage of it. This lets us know there is always light at the end of the tunnel and it does not always have to be a freight train. I know that we must sort and live through the negative because that is the reality of investing, but it is also important to remember there will be brighter days along our path as well. Good perspective on looking at the big picture.
I will say it with just 3 minutes to go. YES. We are going to do it......FOUR in a row. We go for FIVE tomorrow. Even this little bit of "stuff" could not bring down the markets today. Fed officials Waller and Bullard back another big interest rate increase in July https://www.cnbc.com/2022/07/07/fed...other-big-interest-rate-increase-in-july.html (BOLD is my opinion OR what I consider important content) "The Federal Reserve is well on its way to another sharp interest rate hike in July and perhaps September as well, even if it slows the economy, according to statements Thursday from two policymakers. Fed Governor Christopher Waller left little doubt that he believes increases are necessary if the institution is to meet its duties, and the market’s expectations, as an inflation fighter. “I’m definitely in support of doing another 75 basis point hike in July, probably 50 in September, and then after that we can debate whether to go back down to 25s,” Waller told the National Association for Business Economics. “If inflation just doesn’t seem to be coming down, we have to do more.” In June, the Fed approved a 75 basis point, or 0.75 percentage point, increase to its benchmark borrowing rate, the biggest such move since 1994. Markets widely expect another such move in July and continued increases until the fed funds rate hits a range of 3.25%-3.5% by the end of 2022. The increases are an attempt to control inflation running at its highest level since 1981. Economy shows no signs that inflation is moderating, says JPMorgan’s Oksana Aronov “Inflation is a tax on economic activity, and the higher the tax the more it suppresses economic activity,” Waller added. “If we don’t get inflation under control, inflation on its own can place us in a really bad economic outcome down the road.” St. Louis Fed President James Bullard echoed Waller’s comments in a separate appearance, saying he believes the best approach is to act quickly now then evaluate the impact the hikes are having. “I think it would make a lot of sense to go with the 75 at this juncture,” said Bullard, a Federal Open Market Committee voting member this year. “I’ve advocated and continue to advocate getting to 3.5% this year, then we can see where we are and see how inflation’s developing at that point.” Both officials said they think recession fears are overblown, though Waller said the Fed needs to risk an economic slowdown so it can get inflation under control. “We’re going to get inflation down. That means we are going to be aggressive on rate hikes and we may have to take the risk of causing some economic damage, but I don’t think given how strong the labor market is right now that that should be that much,” he said." MY COMMENT Thank goodness that no one seems to care about this FED idiocy anymore.....at least this week. Is there anyone in the entire world that does not know that the next hike will be .75? Some times I think that these FED morons are just shorting the markets.....that is why they are constantly out there running their mouths off. As to the risk of causing economic damage.......and....the strong labor markets......well....I think they are living in a fantasy world if they think the labor markets can not massively collapse in the span of just a few weeks. No one has any clue what is happening in the labor markets right now.
Made some good money today. I was total green....across the board. AND....I got a good beat on the SP500 by 0.61% today. I am continuing to whittle down my year to date loss. It now stands at (-23.72%). I now have a nice cushion for the next move down. We need to end the week strong next week......once again, for as long as it works......SHOW ME THE MONEY.
I have been siting and watching and waiting for the market to turn today. Right now the DOW and the SP500 just went positive. The NASDAQ is close. The day is now......in play.
I like this little article.....clinical and rational. What Now, GDP Nowcast? Purported real-time GDP trackers get heaps of attention, but their models aren’t airtight. https://www.fisherinvestments.com/en-us/marketminder/what-now-gdp-nowcast (BOLD is my opinion OR what I consider important content) "They don’t always, but bear markets often precede recessions. So US stocks’ breaching -20% on June 13 poured gasoline on already hot recession fears. Given that backdrop, it shouldn’t surprise you that the Atlanta Federal Reserve’s GDPNow—a statistical model designed to estimate the quarter’s GDP based on incoming data and forecasts—falling to -2.1% annualized for Q2 on July 1 further fanned fears. While we don’t dismiss the possibility of a Q2 contraction, which would technically be the second-straight quarterly decline, we think there are reasons to be skeptical this outcome is assured. Or that it means America would be in recession. The Atlanta Fed’s tool is one of several like it that aggregate incoming data, math it up and try to predict the eventual GDP release. It mashes together Fed forecasts and actual data releases, evolving throughout the quarter as data arrive. It also, the Atlanta Fed wants you to know, isn’t the bank’s official forecast. It is a research exercise above all else, based largely on ideas cooked up in the private sector. As you might imagine, the earlier in the quarter one looks at GDPNow, the less accurate the “nowcast” tends to be. But even at quarter end, when most data are in, tracking error exists. And it is up since the pandemic. That doesn’t mean GDPNow is wrong or useless. It just means handle with caution because, like all economic data, it is far from perfect—especially given the oddity of 2020’s lockdown-driven downturn. Exhibit 1 shows GDPNow’s historical tracking error on the day before the US Bureau of Economic Analysis published the relevant quarter’s advance GDP estimate. (This quarter, that would be on July 27.) Exhibit 1: Tracking Error on Eve of Release Up Since Pandemic Source: Federal Reserve Bank of Atlanta, as of 7/6/2022. Now, that is the absolute error—the magnitude of the difference, not the direction—meaning that skew doesn’t necessarily mean the actual GDP result will exceed GDPNow’s eventual prediction on July 27. Actually, GDPNow has more often overstated than understated the outcome, but that isn’t assured and the dataset is really small. We simply think it is an error to take nowcasts—which will evolve from here as more data arrive—to the bank. The methodology largely explains the skew. For example, July 1’s -1.1 percentage point drop to the nowcast’s contraction is mostly underpinned by a reduction in the estimate of Q2 real personal consumption expenditures (PCE) from 1.7% annualized to 0.8%. That wasn’t due to an actual report on PCE, though. It is imputed from the Institute for Supply Management’s Manufacturing PMI. We are sure the Atlanta Fed has its statistical logic for doing so, but in a period when consumer spending has been shifting from goods to services bigtime, that seems potentially problematic. Again, we aren’t saying this tool is wrong or useless. We aren’t siding with the St. Louis Fed’s Economic News Index nowcast, which currently projects 3.9% annualized growth.[ii] Nor are we suggesting these bodies follow the New York Fed’s lead and pause their nowcasts, pending recalculation and methodology changes post-pandemic. All data have their limitations, and these nowcasts helpfully aggregate things for investors to consume. Still, maybe the Atlanta Fed’s gauge is right and we do get another quarterly contraction. Some would likely dub that a recession. (Of course, America doesn’t define a recession as two straight quarters of negative GDP. The fun folks at the National Bureau of Economic Research’s Business Cycle Dating Committee determine when we are in one—at a long lag.) But you can find recession chatter on virtually every financial media outlet anywhere quite easily and prominently. That suggests to us that the risk of recession is factored into markets to a very large extent today. In our view, it would take quite a lot to negatively shock stocks for long now." MY COMMENT YES......this sort of data is of interest.....but .....as a long term investor that is about it. I dont do anything short term or long term based on economic data or even fact. the ONLY factors that I take into account as an investor are the actual FUNDAMENTALS of the companies that i own.....and by extension.....my personal view of the prospects and business of the companies that I own. I watch this economic stuff since I am interested in business and economics and have been all my life. BUT.....as an investor.......I would never make decisions on this sort of data. We will soon know if we are in an official recession. I believe we already are.
Here is the economic data of the day......no one cares about. June jobs report: US economy adds 372,000 jobs, unemployment rate steady at 3.6% https://finance.yahoo.com/news/june-jobs-report-july-8-2022-211628954.html (BOLD is my opinion OR what I consider important content) "The U.S. labor market remained a bright spot in the economy last month despite mounting talks of a recession, data from the Labor Department showed Friday. Here are the key numbers from Friday's report: Non-farm payrolls: +372,000 vs. +268,000 expected and a revised +384,000 in May Unemployment rate: 3.6% vs.3.6% expected and 3.6% in May Average hourly earnings, month-over-month: +0.3% vs. +0.3% expected and a revised +0.4% in May Average hourly earnings, year-over-year: +5.1% vs.+5.0% expected and a revised +5.3% in May The latest data reflects a slightly slower pace of hiring from May, which saw payrolls rise by a revised 384,000. The Labor Department previously reported an increase of 390,000 jobs during the month. Prior to June and May's releases, the U.S. economy had added at least 400,000 jobs each month over the last year, bringing employment within 1% of pre-pandemic levels. Monthly job gains remain robust on a historical basis, however, as monthly payroll gains averaged about 164,000 per month in 2019. At the industry level, services-based employers again led gains in June as companies rushed to hire back workers laid off during the pandemic, with a return to in-person activities after the pandemic driving consumer demand. Employment in the leisure and hospitality industry increased by 67,000 jobs, though at a slower rate than last month’s increase of 84,000. Despite gains in the sector, employment in leisure and hospitality remains 1.3 million, or 7.8% below pre-COVID levels in February 2020. Job gains in the professional and business services sector were also a standout in June’s report, with 67,000 jobs added last month. The increases bring employment in this area of the labor market to 880,000 higher than in February 2020, with most jobs added across management of companies and enterprises, computer systems design and related services, office administrative services, and scientific research and development services. Employment in health care also buoyed the broader gain in jobs last month at an increase of 57,000 jobs in June. The gains bring the sector 1.1%, or 176,000 jobs short, of its February 2020 level. The Labor Department's June report comes as investors worry about rising costs associated with inflation and higher interest rates, raising the specter of a potential recession hitting the labor market. Some companies have also announced layoffs and hiring freezes, but job cuts have so-far been industry-specific. "The strong 372,000 gain in non-farm payrolls in June appears to make a mockery of claims the economy is heading into, let alone already in, a recession," Capital Economics Senior U.S. Economist Andrew Hunter said in an emailed note. "The June gain leaves the three-month average increase at a rock-solid 375,000, well above the outright stagnation typically seen in the run-up to economic downturns." Unemployment stayed at 3.6%, in line with economist estimates and slightly above February 2020's level of 3.5% before the pandemic tipped the economy into recession. The labor force participation ticked slightly lower to 62.2% from 62.3% in the prior month. "The high number of people not returning to the work force is one of the nagging problems with the labor market right now," LPL Financial Chief Economist Jeffrey Roach said in a note. "Relative to pre-pandemic levels, the economy has 4.8 million more people out of the labor force. Some likely took early retirements but that does not explain the rest of the story." An unusually tight labor market has been the focal point of Fed policymakers, with the imbalance between job openings and available workers placing upward pressure on wages and adding to inflationary pressures. Minutes from the U.S. central bank’s June meeting out Wednesday showed officials acknowledged that job vacancies remain at historical highs nominal wage growth remained elevated. “While labor markets were anticipated to remain tight in the near term, participants expected labor demand and supply to come into better balance over time, helping to ease upward pressure on wages and prices,” minutes indicated. “As in the case of product markets, they anticipated that an appropriate firming of monetary policy would play a central role in helping address imbalances in the labor market.” Average hourly earnings increased 0.3% for the month reflecting a slightly lower tempo from May’s upwardly revised monthly wage gains of 0.4%. On an annual basis, earnings were up 5.1%, also below the updated 5.3% year-over-year increase in May. "While many participants were looking for a broader slowdown in hiring last month, the reality is the demand for labor remains strong and absent a meaningful decline in hiring, it is hard to envision the economy is on the brink of recession," Charlie Ripley, Senior Investment Strategist. "Overall, today’s report simply means the Fed still has more work to do with regards to policy rates to cool demand in the economy and a 75 basis point rate hike is almost a certainty at this point."" MY COMMENT NOT particularly relevant to much. The FED......still going to raise rates by .75% regardless and this does not change it in the slightest. There is something very distorted in this data as usual. The labor participation rate is STILL screwed up. Bottom line.....I dont trust any of this employment or labor data.
The last four days of gains are the longest win streak for the SP500 and the NASDAQ since March. We can add to that with a positive day today. We have a good shot at it with all the major averages UP at the moment. Even Bitcoin is up today. SHOW ME THE MONEY.
