As usual.....the markets today freaked out over a simple short term news item. Stock market news live updates: Stocks tumble as earnings season picks up https://finance.yahoo.com/news/stock-market-news-live-updates-july-18-2022-105401497.html (BOLD is my opinion OR what I consider important content) "U.S. stocks fell sharply into the final hour of trading Monday following news Apple (AAPL) plans to slow hiring and curb spending next year to prepare for a possible recession. Bloomberg News reported Monday afternoon that the hiring slowdown and cuts to spending will take place across certain divisions and stem from a move to "be more careful during uncertain times," citing people familiar with the matter who asked to remain anonymous. Shares of Apple closed down 2.1%. The S&P 500 and Nasdaq each declined roughly 0.8%, while the Dow Jones Industrial Average shed more than 200 points, or 0.7%. Prior to the report, all three major indexes hit session highs of at least 1%. The Wall Street Journal reported that Federal Reserve officials "signaled they are likely to raise interest rates by 0.75 percentage point later this month." Expectations for a 100 basis point hike from the Fed at its next meeting on July 26 and 27 rose last week after a hot Consumer Price Index (CPI) read for June." MY COMMENT How IDIOTIC is this? The markets have a simple freak out over a company.....APPLE.....taking the right steps that they need to take to prepare for the "possibility" of a recession. If the markets had a BRAIN they would know that this is good news for Apple shareholders.....they are being proactive. I mean....come on man....is there anyone in the world that does not know that most of the big companies are NOT hiring or are at least being selective right now? Is there anyone that does NOT know that we are probably already in a recession? This is the problem with the short term......it is emotional IDIOCY......UP or DOWN.
Here is the IBM earnings today......I suspect that many companies will have to deal with the impact of the strong dollar. IBM beats quarterly revenue estimates, warns of $3.5 billion forex hit https://finance.yahoo.com/news/ibm-beats-quarterly-revenue-estimates-200938752.html IBM second-quarter results beat on top and bottom lines https://www.cnbc.com/2022/07/18/ibm-earnings-q2-2022.html MY COMMENT IBM did very nicely. BUT.....as is the norm.....the markets will ignore the overall good result.
The Google split didn't get much traction today looks like. I think it started around $113 and ended about $109. Seems that is what AMZN did for a bit after their split. As with most things so far, nothing has been untouched by this market environment.
I like to see these little articles injected into the thread every so often. All good points for anyone researching how they are going to proceed in the early stages of their investing. I don't want to belabor the point too much, that WXYZ pointed out in his comment section....but it is important enough that a new investor should not over look. I highlighted the text here: I suggest that a broad Index Fund is the best way to start. This will get you started and involved with investing while you educate yourself. (SP500). By doing it this way, it will allow a new investor time to see and get somewhat used to the typical reactions and actions of the market. You will be able to see how some of the short term noise can effect the investment...short term. As he pointed out, use this time to familiarize yourself with the markets and do other research. In the end, an investor will likely retain that SP 500 as a "core holding" for long term benefit. Very good point to those exploring and developing a plan....it "bears" repeating...
Maybe I jinxed our luck yesterday. I bought a little to add to my portfolio. No strategic reason for doing so, I just put it to work when I have extra to add. For one who is still actively accumulating you have to just continue with your investing plan. The focus is not today or this week...it is for later down the road.
Looks like the "government" is not having any problems keeping up with inflation. $3,835,390,000,000: Federal Tax Collections Set Record Through June https://www.cnsnews.com/article/was...deral-tax-collections-set-record-through-june (BOLD is my opinion OR what I consider important content) "(CNSNews.com) - The federal government hauled in a record $3,835,390,000,000 in total taxes in the first nine months of fiscal 2022 (October through June), according to the Monthly Treasury Statement. That was up $502,438,730,000—or 15.07 percent—from the then-record $3,332,951,270,000 (in constant June 2022 dollars) that the federal government collected in taxes in the first nine months of fiscal 2021. The record $3,835,390,000,000 in total taxes that the federal government collected in the first nine months of this fiscal year included $2,135,472,000,000 in individual income taxes; $1,125,464,000,000 in social insurance and retirement receipts; $61,035,000,000 in excise taxes; $24,032,000,000 in estate and gift taxes; $74,181,000,000 in customs duties; and $109,154,000,000 in what the Treasury calls “miscellaneous receipts.” At the same time that it was collecting this record $3,835,390,000,000 in total taxes, the federal government spent $4,350,457,000,000. Thus, the federal government ran a deficit of $515,067,000,000 in the first nine months of the fiscal year. The Department of Health and Human Services spent the most money of any federal agency during the first nine months of the fiscal year, expending $1,191,470,000,000. The Social Security Administration spent the second most: $952,222,000,000. The Department of the Treasury spent the third most: $944,194,000,000. (This included $520,955,000,000 in interest on Treasury Debt Securities and $423,239,000,000 on other expenses.)" The Department of Defense—Military Programs spent the fourth most: $531,079,000,000." MY COMMENT Looks like inflation is a HUGE windfall for the government. Strange......the worse the general PRIVATE economy does......the better government does.
YEP.....it does seem like the same open that we saw yesterday. Now day traders and the media will be looking for some little news item to be the excuse for tanking the markets later in the day. FORTUNATELY......us long term investors dont have to worry about this type of stuff. We just have to be strong......sometimes for a long time.
That is a whole lot of money. I personally would like a detailed receipt on the contribution I made...I'd like to see what it went for. We have personal budgets that we adhere to, but they can never keep their end of the deal. I have said it many times...NOBODY is going to care as much about how your money is managed than YOU do. The post above just proves it again and again.
I have mentioned a few times the TOTAL FAILURE of so-called hedges gold and Bitcoin. Shouldn’t Gold Be Shining? Despite inflation worsening amid a cacophony of fearful headlines, purported everything-hedge gold couldn’t sustain an early-year rally. https://www.fisherinvestments.com/en-us/marketminder/shouldnt-gold-be-shining (BOLD is my opinion OR what I consider important content) "Inflation hitting successive 40-plus-year highs to finish June at 9.1% y/y. A bear market. Sliding bonds. Recession worries. War in Ukraine—and fear of war spreading. If ever there was a backdrop longstanding myths say should favor gold, this difficult environment is it. The long-rumored “safe haven” is supposed to provide protection from rising prices, falling stocks, recession and chaos generally. But let us explore how those theories look now, amid an environment allegedly super favorable to the shiny yellow metal. In the year’s first month, when world stocks fell -5.2%, gold traded largely sideways—falling just -0.6%.[ii] In February, amid heightening war tensions—that ultimately culminated in Russian President Vladimir Putin’s vile invasion of Ukraine on February 24—gold’s gains accelerated. On March 8, while war and inflation fears raged, gold hit 12.9% on the year alongside bigger gains in less flashy commodities like industrial metals and grains.[iii] At the time, world stocks were down -13.2%, making the precious hedge look like it was working.[iv] By that time, commentary dotted the financial press touting gold and commodities as a hedge—a surefire investment for these times. ETFs launched, offering retail investors exposure. As Bloomberg reported, Bank of America’s April Global Fund Manager Survey—published early that month—showed respondents were “… now the most net overweight ever for commodities.”[v] In investing, it is very often an error to follow the herd and make decisions on widely known information. By the time the plethora of “How to Invest for a <<Insert Topic Here>>” articles emerge, it is usually too late—assuming the theory underpinning those arguments is even correct. So it was this March, it seems. You see, March 8 has thus far proven to be gold’s high-water mark this year. From then through July 13, it has fallen -15.4%, nearly doubling global stocks’ -8.4%.[vi] This isn’t to pick on gold alone. Commodities generally are down. The S&P GSCI Industrial Metals Index and Grains Index are off -33.6% and -25.9%, respectively.[vii] It is, rather, to point out that there isn’t anything unique about gold. It isn’t magic—just a commodity, full stop. Consider all that has transpired between March 8 and now. On inflation, UK CPI releases have shown prices accelerating in all four reported months in that span, from 6.2% y/y in February to 9.1% in May. In the US, CPI sped from 7.9% y/y in February to 9.1% in June. Actually, inflation gauges in pretty much every major developed nation are up markedly over this span, at high rates, too. If gold is an effective inflation hedge, it should be up. It isn’t. None of this is really new, either. As we have written here before, gold’s inflation-hedge status is mostly mythical.. Here again, we point out a simple reality: Gold is more volatile than stocks, it has no yield, and its long-term returns are lower than stocks. You can say the same thing of most commodities. This year is also proving gold isn’t negatively correlated to stocks and bonds and, again, it isn’t proving to be much of an inflation hedge. In our view, the case for gold is flimsy—and this very difficult year is, unfortunately, proving the point." MY COMMENT To each their own. BUT.....in my little world......gold, silver, Crypto, etc, etc......are NOT investments and are NOT inflation hedges. Money in gold......no more of an investment than money siting as cash. I do own a small amount of gold and silver......mostly for fun. I used to buy some silver every year......a few sleeves of Silver Eagles each year. Once I got my green mint box filled up I switched to buying a couple of gold buffalo coins each year. I am lucky that I have a relative with a big safe so I dont have to worry about storage. At least gold and silver have some inherent value.......compared to Crypto.
This is a long article but so correct.......a great comment for stock and fund investors. Weekly Market Pulse: There Is No Certainty In Investing https://alhambrapartners.com/2022/07/17/weekly-market-pulse-there-is-no-certainty-in-investing/ (BOLD is my opinion OR what I consider important content) "Investors crave certainty. They want to know that there are definitive signals for them to follow as they adjust their investments to fit the current market and economy. They want to know that A leads to B leads to C. Tea leaf readers are always in high demand on Wall Street and they continue to find employment despite their almost universally dismal track record. In this case, it is demand that drives supply rather than the other way around. The constant demand for answers creates an audience for those willing to give them and also drives engagement on social media. You don’t get Twitter followers with a series of posts that effectively say “I don’t know”. I can attest to that personally. Prognostication in the investment business is more about drawing an audience than providing actual, useful advice. We got some bad inflation news last Wednesday with the CPI report and it was confirmed by more bad inflation news on Thursday with the PPI report (although that one wasn’t as bad). The inflation fears led to concern that the Fed would raise interest rates by a full percent when they next meet and that in turn produced selling in stocks. The negative inflation reports were complemented by a report of rising jobless claims and fears of recession. High inflation and slowing growth is about as lousy an outcome as is possible in economics. And stocks were reacting negatively to the data; at the lows Thursday morning the S&P 500 was off by 4.5% for the week and it was looking like another big leg down in this relentless bear market. New lows have outpaced new highs for 34 weeks in a row, a streak only outdone in the past 16 years by the 2008 bear market. Then, we got some good news. Friday morning retail sales were reported up 1% in June, much better than expected and relieving some of the recession fears. The report was even strong ex-autos and gas, up 0.7%. There were questions about how good sales were in light of the high inflation reading, although I’m not sure how accurate it is to use CPI to inflation correct retail sales. The CPI calculation includes a lot of things that aren’t in retail sales. But if you want to see something negative, you’ll see something negative. The Empire State manufacturing survey was harder to dismiss but for some, there’s always a cloud even if it’s tainted by a silver lining. Here’s what the NY Fed said about the report: Business activity increased modestly in New York State, according to firms responding to the July 2022 Empire State Manufacturing Survey. The headline general business conditions index climbed twelve points to 11.1. New orders increased marginally, and shipments expanded significantly. Unfilled orders edged lower for a second consecutive month. Delivery times lengthened at the slowest pace in months, and inventories picked up. Labor market indicators pointed to a solid increase in employment and a slightly longer average workweek. While still elevated, both the prices paid and prices received indexes moved significantly lower, pointing to a deceleration in price increases. Firms turned pessimistic about the six-month outlook, a rare occurrence in the survey’s history. The report is filled with positives but ends on a down note. It is indeed true that the survey’s six-month outlook has only been negative only 2 other times since its inception in 2001: September 2001 (9/11) and February 2009. You might note, as I did, that both of those dates were pretty good times to buy stocks. From the 9/11 lows the S&P 500 rallied 24.5% over the next 4 months although the bear market of that era was far from over. As for February 2009, we were within a few weeks of making the post GFC lows; from the February ’09 close to the following April, the S&P 500 rallied 65%. While that is comforting, it really doesn’t say much about what happens from here; it merely tells you that this negative reading is rare and the two past times it happened the market outcome was positive. Two data points may make a line but they don’t make a trend. The good news continued with readings on import and export prices both of which rose much less than expected, although I don’t think many people took notice. These reports come out every month but are always overshadowed by the CPI and PPI reports. Import prices, in particular, probably deserve a little more respect considering our trade deficit. Next up was Industrial Production which fell by 0.2% versus an expectation of a modest rise. That certainly isn’t a positive but it doesn’t tell you much about the odds of recession. Negative readings on IP are quite common during a business cycle as growth accelerates and moderates as it normally does. That doesn’t mean the reading should be ignored but it has to be put into context and given the weight it is due, which isn’t all that much based on history. Later in the morning, we received information on inventories but it is as of May and of little use in real-time. Still, it is interesting that the total business inventory to sales ratio remains low: The latest University of Michigan Consumer Sentiment poll (preliminary for July) was also released Friday and improved to 51.1 from the all-time low last month. Of more importance was the 5-year inflation expectations reading which fell to 2.8% from 3.1% last month. You might recall that it was the preliminary report for June that spurred the Fed to shift from a 50 basis point to a 75 basis point hike at the last FOMC meeting, a move that I called panic. That report had shown a jump in expectation to 3.3%, a reading that obviously spooked Jerome Powell. By the time the final reading came out, it was down to 3.1% and now it falls further to 2.8%. Let it be known that the members of the FOMC are just as vulnerable to panic as the average retail investor. My only question about the U of Michigan poll is who exactly are they polling and whether they are mentally stable. With all the news about the slowing economy and rising inflation over the last month, how did their mood improve and their inflation expectations fall? From the lows near the open Thursday to the close Friday after all that “good” news, the S&P 500 rallied 3.8% to close the week down a fraction of a percent. There were other things going on as well so it wasn’t just about the economic data. J.P. Morgan and Morgan Stanley both reported earnings that were less than expected due to a big slowdown in investment banking; they led the way down Thursday with JP Morgan off 3.5%. There were confident pundits all over the news talking about how negative the JP Morgan report was and what it portended for the economy as a whole. That view was reinforced by the company as it suspended its share buyback and raised its provisions for future loan losses. While Jamie Dimon said that current conditions are quite good – “the U.S. economy continues to grow and both the job market and consumer spending, and their ability to spend, remain healthy..” – he’s worried about the future: “But geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road.” In other words, the guy who runs one of the biggest banks in the world, with access to research you can’t even imagine, doesn’t have any idea what the future economy will look like. He’s worried about all the same stuff you’re worried about and he has no better idea how it will turn out than you. I’d add that for us old-timers who have spent a career watching Jamie Dimon be wrong about the economy, his pessimism is quite welcome. Contra JP Morgan, Citigroup reported their earnings Friday and they were a lot better than expected. The analysts were so wrong on Citi that their revenue estimates were off by over $1 billion in the quarter. If ever there was a reason to listen to Wall Street sell-side analysts I’ve yet to find it. And with that report from Citi the banks led the market higher Friday, as if the Morgans’ earnings never happened. JP Morgan still ended the week down but Morgan Stanley finished up 1.7% for the week, outpacing the market as a whole. We will continue to get earnings over the coming weeks and the only sure thing is that we’ll see more of this. Some companies and industries will do well and some companies and industries will do poorly. Overall, I’d still expect earnings to rise this quarter but everyone will be focused on what companies say about the rest of the year, as if they have any better idea of what will transpire over the next six months. I think people forget sometimes that the people providing those outlooks about the next quarter or the rest of the year are human too and subject to all the same failings as the rest of us. Adding confusion to the earnings puzzle is the big drop in commodity prices over the last month. Last quarter’s earnings will reflect high commodity prices that no longer exist. For many companies, those high input costs hurt margins while for others it won’t matter a bit because they were able to raise prices. Rather than shifting earnings expectations down over the remainder of the year, analysts may be upgrading based on moderating inflation. Much emphasis on the word “may”. If you hang on every economic report like it is handed down from on high, as if you can discern something useful from every report, you’re going to be in a constant state of distress. Every report isn’t worth your attention. Most of the breathless Santelli reports from the floor are nothing more than noise. There are some indicators that have been useful in the past and I respect those but even with those, I’m a practicing skeptic. The economy is a chaotic system that defies prediction. Small things can sometimes have big consequences for markets but only when they reach a critical phase. Today, when we ask how the economy will look in the next 6 months or the next year, we are actually asking a range of questions that are unanswerable: What will the Fed do? Will they continue to hike rates until “something breaks” as the popular Twitter lament goes? How will the Ukraine/Russia war progress? Will Russia cut off natural gas flows to Europe for an extended period? Is Sri Lanka the leading edge of a period of political disturbances like the Arab Spring? Will China’s economy recover? Will they be able to get away from their zero-tolerance COVID policy? Will their banking system be able to withstand the so obvious real estate sector problems? What will the makeup of Congress look like after the mid-term elections and what difference will that make for economic policy? What are the implications of the assassination of Shinzo Abe? How does it affect Japan’s view of China and the potential for conflict? Will US multinational companies’ earnings be hurt by the strong dollar? That’s just a sample of things we don’t know and can never know with any degree of accuracy. The global economy is, more than anything, a giant social network that disseminates information – and disinformation – faster than ever before. How does the degree of connectedness in today’s world impact the economy? Can the democratization of economic and market information change the way markets and economies react to news? When I started in this business over 30 years ago, no one on Wall Street – and certainly no one on Main Street – paid any attention whatsoever to yield curves. Does it matter that everyone is aware of them now and what they’ve meant in the past? Could knowledge of yield curve inversions affect the yield curve itself, inducing inversions – and steepenings – more rapidly than in the past? Could this knowledge lead to inversions that wouldn’t have happened in the past? What most people think of as the Heisenberg uncertainty principle – but is actually the observer effect – would seem to apply here. Merely knowing about the past relationship and measuring it in real-time will affect the system. The list of things that once worked on Wall Street and no longer do is long and distinguished. Investors can never have the certainty they crave. If you wait to invest until all the uncertainty is gone you’ll be waiting forever. We monitor a long list of economic reports but in isolation, most of them hold little or no meaning. It is like the parable of the blind men and the elephant, where each blind man touches only one part of the elephant. When they describe the elephant based on their limited experience their descriptions differ from the other men. In some versions of the story, they accuse the others of being dishonest and come to blows. That encapsulates the ongoing debate about the economy to a tee. Each side of every economic argument claims to be able to reveal the “truth” about the economy based on their limited, subjective experience and will ignore all evidence that contradicts their conclusions. And on Twitter, they are willing to come to verbal blows to defend their position. I believe there are some economic indicators that are useful to the investor but it is a short list. Don’t get caught up in the day-to-day reports of impending boom or gloom. Concentrate on what you can control and don’t forget what investing is really all about. Your portfolio is not a series of bets. The elements of your portfolio, from stocks to real estate to commodities to bonds, are investments in the future and your future returns depend on what you pay today. Yes, something could happen that changes that future and if it does, you’ll have to adjust. But today, right now, the market is offering good investments at reasonable prices and long-term investors should be taking advantage of the current volatility. You need to be choosy but that isn’t something that should only apply in a bear market. Tune out the day-to-day noise and concentrate on what really matters. (FROM THIS POINT ON I HAVE EDITED THE ARTICLE DOWN, click on link to see entire article) There is no road map for investors to follow when it comes to the economy and the markets. The best you can do is to keep things in perspective and context. Economies are big chaotic systems that defy prediction. COVID was a – hopefully – once-in-a-lifetime event. It led to unprecedented actions by government and private businesses. Getting back to where we were prior to COVID is, if we’re honest with ourselves, impossible. Everything we do today, every policy we enact, every geopolitical connection – everything – is colored by that event. It will lead to outcomes no one expects, some of them good, many of them bad. We can’t predict any of them and I’m convinced that the more connected we become via technology, the more feedback loops we’ll create and the more unpredictable things will become. There will always be clues to the future in our markets; the wisdom of crowds still exists. But if you’ve spent even a little time on Facebook or Twitter, you know the crowd probably isn’t as wise as it once was. All voices are amplified on social media, even the most ridiculous. It is hard to tune out the noise of the crowd, the social media echo chambers, but it is critical to investing success. No one on Twitter or Facebook knows what the future holds but they will not hesitate to tell you all about it anyway. And most of them have something to sell. Caveat emptor." MY COMMENT Great points above. No one has a crystal ball. All the day to day EXPERTS are nothing more than guesswork. That is the primary reason for long term investing. Over the long term all the short term garbage gets filtered out and investments tend to stand on their FUNDAMENTALS.
Speaking of the short term.....here is the short term today. Stock market news live updates: Stocks rise as investors assess more earnings https://finance.yahoo.com/news/stock-market-news-live-updates-july-19-2022-114017830.html (BOLD is my opinion OR what I consider important content) "U.S. stocks climbed at the start of Tuesday's trading session as investors evaluated another round of company earnings. The benchmark S&P 500 index jumped 1% at open, while the Dow Jones Industrial Average added 220 points, or roughly 0.7%. The tech-heavy Nasdaq Composite rose 1.2%. Housing data from the Commerce Department out Tuesday showed new U.S. home-building activity fell 2% in June to the lowest level since September 2021 as new construction projects also abated, the latest signs of a slowdown in the housing market as surging costs for homes and mortgage financing weigh on affordability. Second-quarter results from companies including Johnson & Johnson (JNJ), Truist Financial (TFC), and Lockheed Martin (LMT) arrived on Tuesday morning, with Netflix (NFLX) in the spotlight after the closing bell. Johnson & Johnson reported earnings for the period that beat analysts’ estimates but cut its full-year sales and profit outlook, pointing to the impact of a stronger U.S. dollar. Shares were little changed at the start of trading. Meanwhile, IBM (IBM) stock tumbled 6% despite an earnings beat after the software giant trimmed its forecasts for free cash flow this year, citing currency headwinds and loss of business in Russia. Of the 35 S&P 500 companies (comprising 10% of the index) that reported second quarter results as of July 15, 43% of companies beat on sales and earnings per share – weaker than the historical post-week 1 average of 47% and the weakest share since the first quarter of 2020, according to data from Bank of America Research. Another 16% of companies are scheduled to report through Friday, including tech giants Tesla (TSLA) and Twitter (TWTR) later this week as earnings broaden out past banks to 11 other sectors. “We expect second-quarter EPS to 'meet' at best, with a flurry of downward revisions,” BofA analysts said in a note Monday, adding that details on a few key topics take importance: demand outlook, pricing power, foreign exchange markets, and layoffs. Federal Reserve officials have signaled they are likely to raise interest rates by 75 basis points at their next policy-setting meeting July 26 and 27 after government data last week showed U.S. consumer prices in June accelerated at the fastest annual pace since November 1981. The Fed should “communicate with the public that there’s only so much that they can do, especially for near-term inflation relief,” Allspring Global Investments Senior Investment Strategist Brian Jacobsen told Yahoo Finance Live. “If there is one lesson from history, it’s that if the Fed wants to tame inflation really quickly, the only way they can do that is by taking really extreme moves – it would have to be some sort of shock and awe number that would be economically devastating, so I don’t think they’d like the collateral damage.” Tuesday’s moves come after a rally in the previous session was reversed in the final hour of trading amid a report from Bloomberg News that indicated Apple (AAPL) plans to slow hiring and curb spending next year in preparation for a potential economic downturn." MY COMMENT I suspect that all in all earnings will be good. So far....big mainstream companies like Johnson & Johnson and IBM are beating expectations......but they will still be punished......as usual. Where you will make money on the good earnings.....is over the longer term.
I've mentioned a few times the CHIP Act and it appears it may be getting closer to a vote, maybe even today. The Chip industry is part of our investing world and obviously big in the terms of technology, auto, military, and etc. Like many things that involve money, the politicians and lobbyist entrench themselves into it and changes occur that alter its initial purpose. Then the companies are fighting over who gets how much and each wants a piece of the cash. In any case, the US needs to be proactive in this area and honestly we are already behind in some aspects. Chipmakers may finally get their $52 billion in Chips Act government subsidies—but companies like Intel are not happy about some of the strings attached If all goes as planned, Congress will finally start voting on funding the CHIPS Act on Tuesday. On Monday, U.S. Senate Majority Leader Chuck Schumer (D–N.Y.) said the Senate would vote on $52 billion in government subsidies for domestic semiconductor or chip manufacturing as its own separate bill on Tuesday. The funding was originally part of a larger competition and innovation bill, which was held up in Congressional negotiations. "We need to move quickly," Schumer said. "Without these incentives from Congress, the capital investment required for expanding production is not economically viable in the United States.” After the Senate vote, the House of Representatives will still need to approve the CHIPS Act funding before submitting it to the White House for signing. Congressional leaders are operating on a tight schedule, hoping to get funding passed before Congress goes on recess on Aug. 8. Passing CHIPS Act funding into law will be a victory for chipmakers like Intel Corporation, Taiwan Semiconductor Manufacturing Corporation, and GlobalWafers, who claim their planned U.S. projects depend on getting government money. Intel CEO Pat Gelsinger has been particularly vocal in pressuring Congress. The company delayed the groundbreaking ceremony on its $20 billion project in Ohio to protest the slow passage of the CHIPS Act. In late June, Gelsinger said that without CHIPS Act money, the chipmaker was likely to shift production to Europe, which offers its own government subsidies. Despite chipmakers advocating for the bill's passage, semiconductor manufacturers aren’t happy with everything that may end up in the final legislation. The biggest point of contention relates to China—specifically, the restrictions on investing in China that will apply to companies that receive CHIPS Act money. The CHIPS Act funding comes with so-called guardrails meant to ensure that U.S. subsidies are spent on building factories in the U.S. and not put towards some other purpose. One provision prevents recipients of CHIPS Act funding from expanding production of advanced chips in China, which would further escalate U.S. efforts to prevent China from producing the components that power nearly all of today's digital devices, from phones and tablets to cars and servers. Lawmakers worry that recipients of Chips Act funding could undermine U.S. security by expanding production in rival countries like China and thus want to impose conditions on chipmakers that get public money. Chipmakers like Intel are lobbying to loosen those guardrails, reports Politico. One draft of the legislation barred funding recipients from producing semiconductors smaller than 28 nanometers in China. While chips of that size are still used in some consumer electronics, the most advanced chips used in smartphones and tablets are much smaller, meaning the proposal would prohibit chipmakers from churning out their most innovative technology on Chinese soil. Instead of a blanket prohibition on chip production in China, Intel and other chipmakers want to give the Secretary of Commerce the authority to determine what size semiconductors are off-limits. One unnamed chipmaker told the Financial Times that chip manufacturing is developing so rapidly that the 28 nanometer threshold would be meaningless after a few generations of new chips. Intel did not immediately respond to a request for comment from Fortune. An Intel spokesperson told Politico that "Intel and many companies in our industry have come together with our trade association to provide input to policymakers in order to ensure that we have the best legislation possible and don’t inadvertently undermine the global competitiveness of companies that receive CHIPS funds." Guardrails were part of the CHIPS Act conversation as early as May 2021. Commerce Secretary Gina Raimondo said in December that the final legislation needed provisions “to protect ourselves from China,” and that “long-term national security interests matter more than short-term profits.” On Monday, White House Press Secretary Karine Jean-Pierre said that the Biden administration continues “to support strong guardrails” in the CHIPS Act. The proposed funding is meant to “generate more semiconductor investment here in the U.S., not in China and guardrails help slow the growth of investment in China,” Jean-Pierre said. The U.S. bans exports of high-end semiconductors and chip manufacturing equipment to China, and is reportedly considering more export restrictions of chipmaking tools to Chinese companies. The Biden administration is also pressuring non-U.S. manufacturers, like ASML Holding, from exporting chip manufacturing equipment to China. Beijing has criticized the moves as "classic technological terrorism." U.S. efforts to constrain China’s chip industry have encouraged Beijing to invest in chip self-sufficiency. The government has poured money into domestic chip manufacturers like Semiconductor Manufacturing International Corporation and Tsinghua Unigroup. Chinese companies like Huawei Technologies, Alibaba Group Holding and ByteDance are also investing in chip design.
I am waiting for the art shippers to show up to take away one of our paintings for exhibition. It will be gone till about the end of the year. We have not made any significant art purchases this year. We made a big collectable purchase.....$60,000.....at the end of last year and that wiped out our budget for purchases this year. That purchase was a big stretch....but it was an item that we have been trying to get for a long time. Once in a while you just have to treat yourself. We also have been doing our five year list of home remodel items this year. We have now completed the entire list. We were able to squeeze the entire cost out of our 2022 budget by managing cash flow. So....we will just focus on sticking to our basic budget for the rest of this year. In other words in art, collectables, and stock investing.....we are now in hunker-down mode till year end. I am anticipating having....$20,000 to $25,000.....to put into the markets in January or February.
Good article on the CHIPS ACT above. I sure hope the restrictions on China stay in the bill. We are way too tied to and dependent on China.......the worlds most brutal communist dictatorship.
Markets are still looking very strong. But.....after yesterday......we can not anticipate anything. Come on........SHOW ME THE MONEY.
Good post/article. A great line from that post and one that I have relied on for many years and it should be a part of every long term investors operating plan. Concentrate on what you can control. As an investor think about that single sentence...and never forget it.
I wonder what is going on with SILVER? Today it is at $18.79. On March 8 it was at about $27. That is a drop of over 30% in just about 4 months. GOLD is also down....but since mid March it is down by only 16.6%.
The markets DID.....SHOW ME THE MONEY....today. Looks like we got two days of gains in one day today. Makes up for getting robbed yesterday. I was TOTAL GREEN today.....every stock. I got in a very big beat on the SP500 on a day that it was up big......my beat was 0.40%. I was able to lower my year to date loss today to (-22.5%). At this rate if we get lucky for a week or two.....I might be out of bear market territory.......briefly. I STILL think market direction is negative......but....I also think that we hit a soft bottom at the end of June.
