The Long Term Investor

Looks like I am not the only one that is thinking about a bottom.

Dow rallies more than 700 points in rebound as traders bet that the bottom is in

https://www.cnbc.com/2022/07/18/sto...erses-course-to-start-busy-earnings-week.html

"Stocks rallied Tuesday, with the market resuming a bounce from last month’s lows, as traders bet on strong corporate earnings reports and wagered that markets have found a bottom.

The Dow Jones Industrial Average jumped 754.44 points, or 2.43%, to 31,827.05 — closing near the highs of the session as gains accelerated in the final hour of trading. The S&P 500 gained 2.76% to 3,936.69. The Nasdaq Composite rose 3.11% to 11,713.15.

All three major averages are above their 50-day moving averages for the first time since April. The broader market index is now 8% off its June lows.



CNBC

Investors are betting that stocks have reached a bottom after their steep declines this year, and as the latest round of earnings reports showed businesses are working through economic pressures better than feared in the second quarter.

“Both investors and the companies were expecting hot inflation, so companies talking about hot inflation having happened in that second quarter was not a surprise at all,” said Kim Forrest, founder and chief investment officer at Bokeh Capital Partners. “What was a surprise was that they were able to manage through it well.”

Investor sentiment has worsened to a point that some on Wall Street believe markets are set up for a relief rally ahead. Investors — fearing stagflation will remain even if inflation manages to come down — are holding on to cash, according to a Bank of America survey on Tuesday.

“Fundamentals poor but sentiment says stocks/credit rally in coming weeks,” wrote Bank of America’s chief investment strategist Michael Hartnett.

Still, some analysts continued to recommend investors prepare for more losses ahead.

″[While] I acknowledge sentiment is bad and we could see a large, tactical rally, I am currently more concerned about protecting downside than missing upside, in the aggregate,” Wedbush analyst Kevin Merritt wrote in a Tuesday note.

Meanwhile, stocks absorbed a weaker-than-expected print in U.S. housing starts, which fell 2% in June to a seasonally adjusted annual rate of 1.559 million units.

All sectors in the S&P 500 were higher Tuesday. Communication services and industrials led the gains, rising more than 3%.

Robust earnings

Solid earnings reports boosted the shares of many companies, even as a stronger dollar weighed on the results of others.

Bank stocks outperformed with shares of Truist Financial and Citizens Financial Group each jumping more than 2% on the back of strong results. Goldman Sachs rose 5.6%. Bank of America and Wells Fargo advanced 3.4% and 4.2%, respectively.

Meanwhile, shares of Halliburton climbed 2.1% as sharply rising oil prices this year helped lift profits for the oilfield services company in its most recent quarter.

Hasbro reported earnings per share that beat analyst expectations, though the toymaker’s revenue for the previous quarter came in a tad below expectations, according to consensus estimates from Refinitiv.

Shares of IBM fell 5.3% after the tech company lowered its forecast for cash flow, with IBM finance chief Jim Kavanaugh citing the U.S. dollar and a suspension of business in Russia. Still, the company reported results that beat Wall Street’s earnings and revenue estimates.

Johnson & Johnson shares declined 1.5% after the pharmaceutical giant blamed a stronger dollar while cutting its full-year revenue and profit guidance. The company reported better-than-expected top and bottom line results.

As of Tuesday morning, roughly 9% of S&P 500 companies have reported calendar second-quarter earnings. Of those, about two-thirds have beaten analyst expectations, FactSet data shows.

Shares of Netflix popped 5.6% ahead of the streaming company’s earnings report scheduled for after the close. Later in the week, Tesla, United Airlines, American Airlines, Snap, Twitter and Verizon are among those scheduled to report.

“Trading is likely to remain very choppy, with more bear market rallies, in the months ahead,” Wolfe Research’s Chris Senyek wrote in a Tuesday note."

MY COMMENT

Earnings are starting out very nicely. Actually.....better than I expected. I like this data even though it is on only 9% of SP500 companies:

"As of Tuesday morning, roughly 9% of S&P 500 companies have reported calendar second-quarter earnings. Of those, about two-thirds have beaten analyst expectations."

As I said.....I think we made a "soft" bottom the last of June. By soft bottom I mean it is like mud at the bottom of a river......it is the bottom, but you can still sink down some into the mud.

It would be nice for investors to see a good rally to.......replenish.....accounts and psychology, as we move forward into the rest of the year and a very erratic market ahead.

 

Earnings are going to continue to be the KEY FACTOR going forward this week.....but.....If we can keep this up we could be in for a barn-burner of a week.

Today was a needed shot in the arm for investors. We DESERVE it for siting and taking all the.......financial and psychological.....shots of the past six months. Here is some data that is encouraging.

1. Over the past five market days the SP500 is up by +3.09%

2. Over the past 30 days the SP500 is up by +4.57%

 

This story could be a catalyst for a big close to this week.

Netflix only loses 970,000 subscribers in second quarter after warning of loss of 2 million

https://www.cnbc.com/2022/07/19/netflix-nflx-earnings-q2-2022.html

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

"Netflix shares jumped 8% after the company said it lost fewer subscribers than anticipated during the second quarter.

The company also said it aimed to unveil it’s lower-cost, ad-supported tier in early 2023. This comes on the heels of Netflix tapping Microsoft to be its partner on the ad-supported offering.

Netflix had warned investors last quarter that it expected to shed around 2 million, but only lost around 970,000 during the three month period ending June 30.

Here are the results:

• EPS: $3.20 vs $2.94 per share, according to Refinitiv.
• Revenue: $7.97 billion, vs. $8.035 billion, according to Refinitiv survey.
• Global paid net subscribers: A loss of 970,000 subscribers vs. expectations of a loss of 2 million, according to StreetAccount estimates.

The company told shareholders that it expects net adds to reach 1 million in the third quarter, reversing some losses seen during the first half of the year. Analysts had predicted Netflix would guide for growth of around 1.8 million.

This s a breaking news story. Please check back for updates."


MY COMMENT

Another very good earnings report overall to add to the pile. If earnings keep up like this we could be in for a good old fashioned summer rally. We will have a much better idea of earnings after the next THREE weeks.

 

WELL......I have started the day today with a very nice gain in my accounts. Always a good way to start a new day.

 

I forgot to hit post on the above first message of the day. I actually typed it about a half hour ago. I got called away to help vacuum the house. A normal day in the life of a long term investor.

 

The ONLY data that I even remotely think about on the issue of recession is the ACTUAL GDP data.

IP Doesn’t Spell Recession
Recent industrial production figures were mixed—and inconclusive on global growth.

https://www.fisherinvestments.com/en-us/marketminder/ip-doesnt-spell-recession

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

"With seemingly everyone on recession watch nowadays, many extrapolate any monthly data dip—like US industrial production’s (IP) last week—as evidence. On the flip side, some see the eurozone’s surprising IP growth as a sign recession worries are overblown. But we think there are a couple considerations to note here. First, manufacturing isn’t a huge slice of developed world economies. Then too, although IP (which also includes mining and utilities output) can offer clues on the state of global growth, it is backward looking. Current IP data neither confirm nor deny a recession is underway.

Exhibit 1 shows US June IP dipped -0.2% m/m. That small dip, it is worth noting, was IP’s first decline this year. We always think you shouldn’t overrate a single data point, but this has sparked worry regardless, especially with manufacturing—IP’s largest component—down -0.5% m/m for a second consecutive month.

Exhibit 1: Industrial Production Doesn’t Dictate Economic Activity

Source: Federal Reserve Bank of St. Louis, as of 7/15/2022. US industrial production, January 2007 – June 2022. Recession shading based on NBER business cycle dates.

However, a one or two-month IP downturn isn’t unusual even in the best of times. The current expansion has featured several already: September 2020, February 2021, August – September 2021, December 2021 and now June’s dip. IP declined for longer periods in 2015 – 2016 and 2019 without causing recession. (Exhibit 2) Oil and gas well drilling’s -69% collapse in the first instance and -13% slump in the second weighed heavily on IP both times.[ii]

Exhibit 2: IP Can Be Quite Volatile

Source: Federal Reserve Bank of St. Louis, as of 7/15/2022. US industrial production, January 1990 – June 2022. Recession shading based on NBER business cycle dates. Y-axis truncated at +/- 5% to facilitate visibility. April 2020 (-13.2% m/m) and June 2020 (6.3%) extend beyond this.

Consumer spending and services growth more than offset those extended IP contractions, though. Notably, drilling has ascended sharply this cycle, exceeding November 2018’s peak last month, likely with more to come. But IP just isn’t that big of an economic driver. It is 15% of GDP (manufacturing is 12%).[iii]

The latest UK and eurozone data show May IP rose 0.9% m/m and 0.8%, respectively. (Exhibits 3 & 4) While data over a month old are pretty stale, they handily beat expectations. The UK’s consensus estimate was for a -0.5% m/m decline and the eurozone’s was for 0.2% growth.[iv] Note, too, as with America’s IP, these are volume gauges—inflation didn’t boost results. The UK’s IP gain was led by broad-based manufacturing growth—12 of its 13 subsectors rose—and the sector’s output ticked above its February 2020 pre-pandemic level.

Exhibit 3: IP Cycles in the UK Aren’t Necessarily Recession Drivers, Either

Source: FactSet, as of 7/12/2022. UK industrial production, January 2007 – May 2022. Recession shading based on OECD business cycle dates for the UK.

In contrast, May’s eurozone IP strength was relatively narrow. Most of it came from American factories operating in Ireland, with some help from Germany’s slight 0.2% m/m improvement, which is still recovering from March’s sharp fall from pandemic restrictions and the war in Ukraine.[v] Meanwhile, there were pockets of weakness in France, Spain, Italy and the Netherlands. After roaring back to its pre-pandemic level, eurozone IP has been flat and choppy. In Europe, all eyes are on the Russian gas-flow situation, but there is no evidence yet of any widespread downturn.

Exhibit 4: Eurozone IP Trends Correspond More With Its Economic Cycle, but Still Noisy

Source: FactSet, as of 7/13/2022. Eurozone industrial production, January 2007 – May 2022. Recession shading based on Euro Area Business Cycle Network dates.

Overall, US IP is trending up despite the latest dip, eurozone IP is mixed and directionless, and UK IP seems somewhere in between. It mostly adds up, in our view, to growth muddling along. That certainly isn’t a boom, but it isn’t deep contraction (like April 2020’s or other downturns associated with broader recession), either. It mostly looks like pre-pandemic growth trends. Going back to that state—as supply-chain dislocations work out—strikes us as a return to normal, not anything catastrophic. Recession is still possible, but IP data so far don’t indicate one is happening now—and can’t provide any forward-looking insight into whether one will occur in the future."

MY COMMENT

I believe we have been in a recession for a while now.

BUT......the most important thing I can say.....is......WHO CARES. We have already been living with whatever it is for a good length of time already. Placing a label on whatever it is......is irrelevant.

In addition by the time we put a label on anything to do with the economy......it is a hindsight event. So.....I just continue to be invested and dont worry about what the investing environment is "called".

 

I like this little article.....plus it starts with an interesting story.

There Will Always Be Sorcerers

https://ofdollarsanddata.com/there-will-always-be-sorcerers/

"In The Lucifer Principle, Howard Bloom tells the story of four tribes that lived in the Nilgiri hills of India prior to the arrival of the Europeans:

One tribe, the Badaga, were farmers. Another, the Kota, were craftsmen. A third, the Toda, were herdsmen. And the fourth, the Kurumba, made and raised almost nothing at all…But of all four tribes, the one with the greatest economic power was the Kurumba.

Living in the jungle, the Kurumba did not raise wheat, did not make household utensils, and did not provide meat…yet the work they offered brought [the others] trekking through the dense foliage to the Kurumba village, begging for a service that was totally intangible, one whose value cannot even be proven to exist. The Kurumba were sorcerers.

Bloom goes on to explain how the Kurumba provided protection against the unknown in exchange for goods/services from the other tribes. You have a family member with a mysterious ailment? Talk to the Kurumba. You want to know the outcome of a future event? Visit the Kurumba. Need help warding off evil spirits? You get the point.

Bloom concluded that what the other Indian tribes wanted from the Kurumba was a sense of control. They wanted agency over their lives and the lives of their friends and family.

You might hear the story of the Kurumba and laugh at the naïvety of the other Indian tribes, but you’ve probably relied on the Kurumba’s services as much as they have. The only difference is that the Kurumba of today go by a different name. Maybe you’ve heard them called market pundits, financial analysts, or macroeconomic forecasters, but they are one and the same. They all are just prophets for a different time.

Of course, the soothsayers of today don’t feel as untrustworthy as those of the past because they rely on data and logic to make their arguments instead of magic. But this doesn’t imply that they are any better at it.

In fact, a report from CXO Advisory Group analyzed 6,582 public market calls made by 68 pundits from 2005-2012 and found that their average accuracy was 47%, slightly worse than chance. Despite this, there is still a high demand for pundits and their predictions. It reminds me of the famous reply given to Ken Arrow after he discovered that his long term weather forecasts were no better than chance:


The Commanding General is well aware that the forecasts are no good. However, he needs them for planning purposes.

For all of recorded history humans have been like this. We’ve had a deep desire to know the future. For example, in The Devil’s Financial Dictionary, Jason Zweig described how ancient Mesopotamian priests, known as baru, would study “the contours of a liver or lung taken from a freshly sacrificed sheep” in order to predict what was to come. Their work wasn’t simple either. As Zweig notes:

The baru worked from an intricate template, often rendered as a clay map that charted dozens of variations on the surface of the sheep’s organ.

I hear stories like this and realize that there will always be demand for those who can predict the future, regardless of their competence in doing so. This is why I don’t expect active stock funds to ever go away. Though passive funds now hold more U.S. stock than active funds, there will always be people who believe that they can pick the winners (or pick those people who can pick the winners). There will always be sorcerers.

The only difference is how that sorcery will be practiced. Thousands of years ago it was examining a sheep’s liver on an intricate clay map, but today it could be charting price trends using Elliot wave theory. Either way, complexity is what sells the product. Because when things are too simple, people seem to discount them. As Nate Silver stated in The Signal and the Noise:

For instance, the for-profit weather forecasters rarely predict exactly 50 percent chance of rain, which seem wishy-washy and indecisive to consumers. Instead, they’ll flip a coin and round up to 60, or down to 40, even though this makes the forecasts both less accurate and less honest.

This explains why saying “I don’t know” is such an unsatisfying answer to people who want to know the future. Though “I don’t know” is usually the most intellectually honest response you can provide, it won’t win you many followers.

So what’s an investor to do in a world filled with sorcerers? Ignore them. Ignore them as much as possible. Because if you don’t, you may be persuaded to do something harmful to your finances.

I get the feeling. Markets are down about 30% in real terms over the last year, U.S. bonds have declined by double digits, and there’s more uncertainty than there has ever been in the economy. This is the precise time when the sorcerers come out. It’s the time when they make their glorious predictions about what comes next and what you should do about it. And some of them may be right. But what about when they are wrong? What is the cost?

Back in March 2020 I saw the damage that these “sorcerers” can inflict upon retail investors. I watched one pundit declare that “hell is coming” right before going long. I watched investors panic and move to cash. I watched people lose faith in the future.

But, I also watched markets reach new all-time highs in under six months. I didn’t predict this. I didn’t know that this would happen. But I did know not to listen to the sorcerers. And, today, I suggest you do the same. Because they’ve been playing the same game for millennia. The only thing that has changed is how they play it."

MY COMMENT

AMEN.....to the above. The market experts are a total JOKE. BUT....people are compelled to listen and often follow them driven by human genetics and behavior and the human brain.

Investing is supremely SIMPLE. The basic steps to success are outlined in this thread over, and over, and over. On the most basic level....just put your money in a SP500 Index Fund for the long term and go to sleep for 30-40 years. On a slightly less simple level.......use some passive funds and pick a few ICONIC stocks that have great fundamentals......for the long term.

The best advice I can give is........IGNORE.......all the day to day advice. If you can find some person that has a audited history of giving advice and being right about 70% or the time or more. Ok....you might want to follow them. BUT....that person does not exist. Perhaps the closest we have is Warren Buffett, Bogel, or Lynch.

I got the 70% figure above from the SP500......that is the percentage of the time that the SP500 will historically give a positive return in any given year.

If you ARE COMPELLED to follow some market maven......I suggest the writings of Warren Buffett.

 

Here is some of that economic data that people seem to crave.....but at the same time dont really care about.

Existing home sales tumble in June as prices hit another record high
Economists expected sales of previously owned homes to decline 0.6% in June

https://www.foxbusiness.com/economy/existing-home-sales-tumble-june-prices-hit-record-high

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

"U.S. existing home sales dropped to a new two-year low in June as rising mortgage rates and the relentless increase in home values slowed activity by pushing prospective homebuyers out of the market.

Sales of previously owned homes tumbled 5.4% in June from the previous month to an annual rate of 5.12 million units, the lowest level since March 2020, according to new data released Wednesday by the National Association of Realtors. It marks the fifth consecutive month that sales have declined. On an annual basis, home sales plunged 14.2% in June.

Despite the slowdown in sales, the national median home price surged higher in June, hitting a new record of $416,000. That's up 13.4% from the previous year and is an increased from a revised $408,400 in May.

"Falling housing affordability continues to take a toll on potential home buyers," NAR chief economist Lawrence Yun said. "Both mortgage rates and home prices have risen too sharply in a short span of time.""

MY COMMENT

Like everything else the housing markets are totally screwed up following Covid. Can we PLEASE learn a lesson here and NEVER shut down the economy again?

The ENTIRE past couple of years is a HUGE lesson in the disaster that central government planing and manipulation of the economy produces. There is NOTHING that can equal the free market economy and allowing business and the markets to simply do their thing. Capitalism is the greatest creation in the world. It is ALSO NOT followed by the majority of the world with obvious consequences. If the time comes that we......as a people.....throw it out in this country.....we will NEVER get it back.

 

On the real estate theme that I started above.

Mortgage demand drops to a 22-year low as higher interest rates and inflation crush homebuyers

https://www.cnbc.com/2022/07/20/mortgage-demand-drops-to-lowest-level-in-22-years.html

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

"Key Points

• Surging inflation and interest rates are hammering American consumers and weighing on the housing market.
• Mortgage demand fell last week, hitting the lowest point since 2000, according to the Mortgage Bankers Association.
• Buyers have lost considerable purchasing power as rates have almost doubled since earlier this year.

The pain in the mortgage market is only getting worse as higher interest rates and inflation hammer American consumers.

Mortgage demand fell more than 6% last week compared with the previous week, hitting the lowest level since 2000, according to the Mortgage Bankers Association’s seasonally adjusted index.

Applications for a mortgage to purchase a home dropped 7% for the week and were 19% lower than the same week in 2021. Buyers have been contending with high prices all year, but with rates almost double what they were in January, they’ve lost considerable purchasing power.

“Purchase activity declined for both conventional and government loans as the weakening economic outlook, high inflation and persistent affordability challenges are impacting buyer demand,” said Joel Kan, an economist for the MBA.

While buyers are less affected by weekly moves in interest rates, the broader picture of rising rates has already taken its toll. Mortgage rates moved higher again last week after falling slightly over the past three weeks.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.82% from 5.74%, with points increasing to 0.65 from 0.59 (including the origination fee) for loans with a 20% down payment. That rate was 3.11% the same week one year ago.

Demand for refinances, which are highly rate sensitive, fell 4% for the week and were 80% lower than the same week last year. Those applications are also at a 22-year low, but the drop in demand from homebuyers caused the refinance share of mortgage activity to increase to 31.4% of total applications from 30.8% the previous week.

Mortgage interest rates haven’t moved much this week, but that could change very soon due to increasing bond market volatility. The Federal Reserve is expected to hike rates by another 75 basis points next week, and other central banks are taking similar action against inflation. A basis point equals 0.01%.

“This is especially true next week as markets digest the newest Fed policy announcement next Wednesday, but Thursday’s policy announcement from the European Central Bank could also cause enough of a stir to impact U.S. rates,” noted Matthew Graham, chief operating officer of Mortgage News Daily."

MY COMMENT

The mortgage rate is probably in the neighborhood of 6% or higher with NO POINTS. AND.....with the FED increasing rates over the next 6-12 months minimum.....I expect that the mortgage rate will settle into the 7-8% range.

On an anecdotal level I am seeing mixed messages here locally. A house in my immediate neighborhood just sold for $2.3MILLION in just three days. The seller bought that house one year ago for $950,000. We currently have houses ranging from $8MILLION to about $650,000 here in my area of 4200 homes. There are about 70 homes actively for sale......at this time of the year there are normally about 150. It appears that houses are lingering on the market for longer.....but......I dont see much reduction in prices.

I assume that probably at the minimum around 50% of all sales in my general area are all cash buyers from what I hear. Many of these cash buyers are new people moving into the state.

 

STILL.....hanging in there today with the end in sight. The markets just have to hold on for another 20 minutes.

 

This makes you really wonder what sort of MORONS are in charge of any of this stuff.

The reason behind a mysterious trading surge in stocks like Berkshire Hathaway has been revealed

https://www.cnbc.com/2022/07/20/the...ike-berkshire-hathaway-has-been-revealed.html

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

"Berkshire Hathaway’s Class A shares are among the market’s most expensive stocks priced above $400,000 apiece and therefore it was often one of the least traded well-known companies. So a surge in volume that began over a year ago left many scratching their heads.

Now new research released Wednesday has shed light on this trading frenzy and concluded that a change in how Robinhood and other online brokers report fractional trading data was a culprit.

“This volume is due to the interaction of a well-intentioned but misguided FINRA reporting rule, Robinhood trading, and fractional shares,” wrote the authors — Robert Bartlett at University of California, Berkeley, Justin McCrary at Columbia University and Maureen O’Hara at Cornell University.



In 2017, the Financial Industry Regulatory Authority started requiring brokers to report fractional trades — sometimes just 1/100th of a share — as if they were for one whole share, which the authors coined as the “Rounding Up” rule.

The effect of this rule change went pretty much unnoticed until the spring of 2021 when Covid pandemic-driven trading mania by retail investors boosted the use of fractional trading.

With more tiny trades being reported as full shares, trading volumes for many stocks became massively inflated. In Berkshire’s case, the authors said this reported “phantom” volume now represents 80% of the Class A shares’ daily trading volume.

Shares of Warren Buffett’s Omaha, Nebraska-based conglomerate hit a record high above half a million dollars in March and have since retreated more than 20% to about $430,000 apiece amid a sell-off in the broader market.

Trading volumes for this pricey name surged more than tenfold in March 2021 from its average daily volume of just 375 shares over the past decade, according to the study. Volumes have stayed at these elevated levels.

“FINRA is already actively working on the issue, and is engaged in ongoing discussions with firms and regulators,” a FINRA spokesperson told CNBC on Wednesday. “The current trade reporting systems (other than the Consolidated Audit Trail) do not support the entry of a fractional share quantity. FINRA’s guidance on trade reporting needs to be understood in that context.”

The Wall Street Journal first reported on the new study earlier Wednesday."

MY COMMENT

These are the MORONS that are governing the markets. This is simply TOTAL STUPIDITY. Lets set up reporting so the number of shares being traded is totally screwed up......yeah right.

Here is FINRA......from their website:

"FINRA enables investors and firms to participate in the market with confidence by safeguarding its integrity. We deploy deep expertise, leading technology and extensive market intelligence to serve as the first line of oversight for the brokerage industry - all at no cost to taxpayers.

We are a not-for-profit organization that – working under the supervision of the SEC – actively engages with and provides essential tools for investors, member firms and policymakers. Because of these deep relationships and together with our stakeholders, we work towards finding common solutions to create a regulatory environment that promotes collaboration, innovation, and fairness. We do this so that investors are safe, while having the opportunity to participate in America’s capital markets."

WTF.......these people are absolute IDIOTS. Yeah right......lets promote market intellegence and safeguard market intelligence by putting into place regulations that totally distort the number of ACTUAL shares being traded in the markets. You could not make this stuff up if you tried.

 

I like the tone of this little article.

Nasdaq jumps 1% as investors see early signs earnings are OK, Netflix pops

https://www.cnbc.com/2022/07/19/sto...ally-as-netflix-earnings-beat-estimates-.html

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

"The Nasdaq Composite rose Wednesday, as traders weighed the latest corporate earnings for signs that profits will stay high enough to boost the market. Netflix shares jumped on better-than-expected second quarter results.

The Nasdaq jumped 1.42%, and the S&P 500 advanced 0.51%. Meanwhile, the Dow Jones Industrial Average lagged the other two benchmarks, up just 7 points, or 0.02%.

Those moves follow Tuesday’s rally as investors, betting that markets may have finally found a bottom, shifted into more risky assets such as tech stocks.

“It kind of speaks to the risk-on environment we continue to be in that started the beginning of this week, and has played through this Tuesday and into Wednesday time frame,” said Art Hogan, chief market strategist at B. Riley Financial.

Information technology and consumer discretionary stocks led gains in the S&P 500, with each sector up more than 1% on Wednesday. Meanwhile, more defensive sectors such as health care and utilities lagged the broader market index.

Streaming stocks surged on the back of better-than-expected earnings from Netflix, which said it lost 970,000 subscribers in the second quarter, less than the 2 million it had previously projected. The streaming giant’s earnings per share also came in above analyst expectations.

Shares of Netflix jumped more than 5%. Disney advanced 3%, Paramount climbed nearly 3%, and Roku surged 5%.

Semiconductor stocks also advanced, with shares of Nvidia up 4%, and Qualcomm up nearly 3%.

Some investors have been encouraged by the recent trading action, believing it is signaling that the bear market has bottomed. NYSE stocks achieved a widely followed “90% up day” on Tuesday with more than 90% of stocks listed on the exchange advancing and accounting for more than 90% of the volume.

Investors pointed to a Bank of America survey that suggested deteriorating sentiment could potentially set up a buying opportunity in the market. Meanwhile, the U.S. dollar, which recently surged to a 20-year high against the euro, softened.

“We view this bullish breadth day as a sign that the summer rebound for U.S. equities can continue,” wrote Stephen Suttmeier, technical research strategist for Bank of America, in a note Wednesday.

Still, other market participants were skeptical of the bounce, as they await more earnings and search for more clues into the state of the U.S. economy.

“History says, but does not guarantee, that yesterday was more likely a bear market bounce than the start of a new bull market,” said Sam Stovall, chief investment strategist at CFRA Research.

On the economic front, a report from the Mortgage Bankers Association pointed to more pain for U.S. consumers as they deal with higher prices and interest rates. Mortgage demand declined more than 6% last week compared with the prior week, dropping to its lowest level in 22 years.

At the same time, existing home sales in June fell 5.4% from May, according to the National Association of Realtors.

Busy earnings

About 12% of S&P 500 companies have reported earnings so far this quarter. Of those companies, 68% have beaten analyst expectations, according to FactSet. Investors had been awaiting this earnings season for clues on how companies are coping with the worst in 40 years.

Baker Hughes dropped 7% after disappointing second quarter earnings. The oilfield services company reported earnings of 11 cents per share, which is half what analysts were expecting, according to Refinitiv.

Biogen declined more than 6% despite posting a beat in its latest quarterly report. The company warned that its revenue could take a hit from growing generic competition.

Tesla and United Airlines are slated to post their latest quarterly results after the close.

The Dow rallied more than 700 points during Tuesday’s session, with the S&P 500 and Nasdaq soaring 2.8% and 3.1%, respectively. The three benchmarks also closed above their respective 50-day moving averages for the first time since April"

MY COMMENT

We are seeing much movement back into growth stocks.....at least for a few days. It is obvious why NVIDIA is up big lately with the news items lately about the CHIP bill and a politician's husband buying the company on advance news.

Here is what I really like:

"About 12% of S&P 500 companies have reported earnings so far this quarter. Of those companies, 68% have beaten analyst expectations."

If we can keep this up we will be facing a GREAT earnings season this time around. Remember not too long ago how ALL the financial media was bad-mouthing earnings. We have a long way to go in earnings but we are off to a great start.

 

BOOM......another big day for me and the markets. I was total green today with every stock UP. PLUS.....I got in a nice beat on the SP500 by 1.02%.

On these nice UP days my portfolio is on fire. Yes.....SHOW ME THE MONEY.

Of course........this is all short term "stuff".......following the worst first six months start to a year in ages. But....there has been so little to celebrate over the first six months that I have to go all out now....while I have a chance for a few days.

 

To continue a little post I made yesterday:

The SP 500 is UP by:

4.16% over the past 5 market days.

5.18% over the past 30 days.

So for the past 30 days we have been in the middle of what I would call a RALLY. Did anyone notice? Not really.

 

HERE you go on TESLA earnings:

Tesla earnings are out – here are the numbers

https://www.cnbc.com/2022/07/20/tesla-tsla-earnings-q2-2022-.html

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

Tesla reported earnings after the bell. Here are the results.

• Earnings per share (EPS): $2.27 (adjusted) vs $1.81 expected, according to Refinitiv
• Revenue: $16.93 billion, vs. $17.1 billion expected, according to Refinitiv

Early this month, Tesla reported vehicle deliveries of 254,695 electric cars for the period ending June 30, 2022, showing 27% growth from the year-ago quarter, but an 18% decrease sequentially. Deliveries are the closest approximation of sales Tesla discloses. Its Model 3 and Model Y vehicles comprised 93% of those deliveries.

Russia’s brutal invasion of Ukraine and Covid outbreaks in China exacerbated ongoing semiconductor and parts shortages, along with other supply chain snags. Covid restrictions in Shanghai forced Tesla to temporarily suspend or limit production at its factory there during the second quarter of 2022.

CEO Elon Musk also lamented the high costs of starting up production at new factories in Austin, Texas and Grünheide in Brandenburg, Germany. During an interview with Tesla Owners Silicon Valley, a company-recognized fan club, Musk said the two new factories “are gigantic money furnaces.”

The CEO announced steep headcount cuts in June.

Tesla’s cryptocurrency holdings also likely declined in value substantially, depending on how the company traded them. Barclay’s analyst Brian Johnson said on Monday that he expects Tesla to record an impairment of up to roughly $460 million due to bitcoin declines.

On the brighter side, Tesla recently marked a milestone with an employee posting on LinkedIn this week that the company surpassed production of 2 million vehicles at its Fremont, California factory.

According to a White House memo from June 28, Tesla also plans to “begin production of new Supercharger equipment that will enable non-Tesla EV drivers in North America to use Tesla Superchargers.”"

MY COMMENT

This is hot of the press info. I will have more detail later as data is crunched. At least EPS looks strong and considering all the headwinds the Revenue was close to meeting expectations.