The Long Term Investor

We are now PAST the biggest week of the year.......the major tech earnings, GDP and the FED. Rally time tomorrow? Why not.

 

Here is a second take on Apple.

Apple reports record revenue of $83B amid high inflation

https://finance.yahoo.com/news/apple-q-3-earnings-142517224.html

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

"Apple (AAPL) released its Q3 earnings on Thursday, beating analysts' expectations with record revenue of $83 billion despite fears of rising inflation.

Here are the most important numbers from the report, and how they compare to Wall Street's expectations, as compiled by Bloomberg.

• Revenue: $83 billion versus $82.7 billion expected
  
• Earnings per share: $1.20 versus $1.16 expected
  
• iPhone revenue: $40.7 billion versus $38.9 billion expected
  
• iPad revenue: $7.22 billion billion versus $6.9 billion expected
  
• Mac revenue: $7.4 billion billion versus $8.4 billion expected
  
• Wearables revenue: $8.1 billion versus $8.8 billion expected
  
• Services revenue: $19.6 billion billion versus $19.7 billion expected
  

Apple's stock was up more than 3% after the report.

“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category,” Apple CFO Luca Maestri said in a statement.

Apple is contending with a number of problems including rising inflation hitting consumers and COVID lockdowns in China hitting sales and production in the country.

The company's market cap has also suffered amid the larger drop off in tech, falling below the $3 trillion market to $2.5 trillion.

But according to Morgan Stanley, this is all short-term trouble for the iPhone maker. In a note, Erik W. Woodring indicates that Apple’s services business could help push the tech titan’s market cap over the $3 trillion market again.

Services revenue was especially strong in Q3, jumping from $17.5 billion last year to $19.6 billion.

Apple is widely expected to launch its iPhone 14 line along with its Apple Watch Series 8 later this fall. And while that won’t have much impact on the company’s Q4 earnings since the products are announced just a few weeks before the quarter ends, it should boost its Q1 2023 performance.

Apple is also said to be preparing to enter the AR/VR space with its own headset that will likely launch sometime in 2023. That could serve as the next major product for the company and open up broader opportunities for services and content sales."

MY COMMENT

I think Apple hit the best earnings of the BIG TECH companies so far this quarter. This is an amazing company....a money machine. I was not an early fan of Tim Cook....but....he has proven himself to be a very good, if not great, manager of the company as CEO.

 

I am hearing more and more comments from various investors on the financial shows that we are at a bottom. I take a....."sort of" ......view. Choosing to call it a soft bottom. I think this week and how the markets have behaved is more confirmation of this.

If we can hold onto what the futures are saying right now we should do nicely to end the week tomorrow. SO.......SHOW ME THE MONEY.

 

Here is partly why I believe we are at a bottom......well....make that a soft bottom. Looking at the SP500:

Past 1 days +1.21%
Past 3 days +2.66%
Past 5 days +1.84%
Past 1 month +4.42%


Looking at the past three months.....I see that May was POSITIVE.....+0.01%. June was negative.....(-8.39%) July with the last day tomorrow is at the moment Positive.....+5.02%. Over the past 6 months....we have had three negative months....February, April, and June.......and.....we have had three positive months.....March, May, and July. Interestingly.....every other month has been the opposite.

At this point the markets look like they are acting like reasonable NORMAL markets to me. Yes some of the gains and loss days are bigger than times in the past and there is much volatility.....but....fundamental results are starting to take hold of the markets. In addition earnings are coming in at 70% beats or better.....again fundamental based.

All of this is going on while we continue to STRUGGLE to recover from the economic shutdown and all the impacts of the shutdown. This is taking much longer than anyone anticipated....but.....over time it WILL slowly improve. Much of the inflation issue we are seeing is based on supply chain issues......and will also slowly.....very slowly..... improve regardless of what the FED does.

The BIG wild card......government and government policy.

 

YES.....WOW.....we have just received a historic OMEN for the markets today. I am siting here on the computer with Varney in the background. All of a sudden the show plays the Buddy Guy song......SHOW ME THE MONEY.

YES! Big day ahead today for sure.

 

Here is the day so far today......the averages have ALL settled in nicely so far today. As usual we will see if this has legs about 11:00 to 12:00 EST.

Stock market news live updates: Stocks on pace for best month since 2020

https://finance.yahoo.com/news/stock-market-news-live-updates-july-29-124526753.html

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

"U.S. stocks edged higher Friday morning as investors look to extend a recent rally that has stocks pacing towards their best month since November 2020.

The S&P 500 rose 0.4% at the start of trading, while the Dow Jones Industrial Average was up modestly — roughly 30 points, or 0.1%. The tech-heavy Nasdaq Composite gained 0.5%.

On Thursday, stocks rallied for a second straight day with the Nasdaq extending its two-day gains to 5% as both the tech index and benchmark S&P 500 are sitting on gains since June 16 north of 10%. Month-to-date, the S&P 500 is up some 7.5%.

Tech shares continued to be buoyed by earnings Friday morning, with results from Amazon (AMZN) and Apple (AAPL) after the close on Thursday giving the sector a lift.

Amazon shares were up as much as 10% in pre-market trade after a better-than-feared quarterly report from the tech giant. "Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network," Andy Jassy, Amazon CEO, said in a statement following earnings.

Apple shares rose as much as 2% in pre-market trade following revenue that totaled $83 billion in its fiscal third quarter, a company record for the quarter.

"Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category," Apple CFO Luca Maestri said in a statement.

Elsewhere in markets, shares of Roku (ROKU) were tanking in pre-market trade, down as much as 22% after disappointing quarterly results as the streaming player continues to deflate from its pandemic highs reached in early 2021. Shares of Roku are down about 85% over the last 18 months.

On the economic data side, the latest PCE price index, the Fed's preferred measure of inflation, showed prices rose 0.6% over the prior month and 4.8% over the prior year on a "core" basis.

Futures modestly softened following this data, though the market's early week read that inflation and rate hikes are likely to moderate in the coming quarters continues to serve as the predominant theme for traders."

MY COMMENT

NO DOUBT.....July is going to end up as a nice positive month....unless we see an epic market tank today....which is not "likely".

I am not saying that today is guaranteed to be a UP day......the little rally we are seeing this morning seems mild and I am not sure how much there is behind it. BUT.....I would much rather start the day this way than the opposite.

 

I LIKE most of the earnings and guidance being put out this week by the BIG TECH companies. I think we have turned a corner on the negativity toward those companies and their earnings. Over the next six months to years end we have a good opportunity to see those stocks really take off. They are now over the second quarter earnings HUMP in my view.

China is going to reopen significantly over the next six months. The current issues......inflation and the FED....will continue to be baked in and I doubt that inflation will worsen....even if it does not get much better.

If.......big IF.......this happens and these ICONIC and DOMINANT companies stage a come-back over the rest of the year.....we WILL be looking at a good chance to see the losses in the SP500 well below 10% by year end. AND.....there "MIGHT" even be a small chance to end the year positive.

On the NEGATIVE side of things......we are now raising taxes in the middle of a recession. The new 15% corporate tax which will hit our best companies WILL simply be passed on to consumers. At the same time government will be pumping nearly a TRILLION dollars out into "stuff" in a time of HIGH INFLATION as a result of the CHIP BILL and the reconciliation bill. The two government bills especially the reconciliation bill....represents a MASSIVE TAX INCREASE.....again during a time of RECESSION.

 

Before I get all carried away with short term positivity.

Fed's preferred inflation gauge climbs 4.8% in June, holding near 40-year high
Inflation accelerated more than expected in June with headline prices hitting new record

https://www.foxbusiness.com/economy...n-gauge-climbs-june-holding-near-40-year-high

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

"The Federal Reserve's preferred inflation gauge accelerated more than expected in June, according to new data released on Friday, a worrisome sign as central bankers try to combat higher prices with the steepest interest rate hikes in decades.

The personal consumption expenditures index showed that core prices, which strips out the more volatile measurements of food and energy, climbed 0.6% from the previous month and rose 4.8% on an annual basis, according to the Commerce Department. Those figures are both higher than the 0.5% monthly increase and 4.7% annual increase forecast by Refinitiv economists.

The more encompassing headline figure rose 6.8% on an annual basis, hitting a fresh 40-year high as gas prices surged, while inflation jumped 1.0% from May to June, tying its biggest monthly gain since 1981.

While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chairman Jerome Powell told reporters this week that core data is actually a better indicator of inflation.

"Core inflation is a better predictor of inflation going forward," Powell said on Wednesday. "Headline inflation tends to be volatile."

The latest report also showed that consumer spending jumped 1.1% last month, higher than expected. However, nearly all of that increase actually stemmed from higher prices, not consumers buying more: Adjusted for inflation, consumer spending rose by just 0.1%. Personal income, meanwhile, climbed 0.6%, beating the 0.5% estimate, but disposable income adjusted for inflation dropped 0.3%.

In another troubling indication that inflation is broadening throughout the economy, the employment cost index – which measures wages and benefits for civilian workers – rose 1.3% in the period from April to June. While that's down slightly from the first three months of the year, when compensation grew 1.4%, the data suggests that wage pressures remained strong in the spring as the result of an incredibly tight labor market.

Fed policymakers are moving at the fastest pace in decades to wrestle inflation under control, approving a second consecutive 75-basis point interest rate hike – triple the usual size – on Wednesday. Powell suggested at a post-meeting press conference that another increase of that magnitude is on the table in September, depending on forthcoming economic data.

The problem is that Fed efforts to cool consumer demand are already starting to slow the economy. The Commerce Department on Thursday released the highly anticipated second-quarter gross domestic product reading, which showed that economic growth shrank 0.9% in the period from April to June.

Economic output already fell over the first three months of the year, with GDP – the broadest measure of goods and services produced in the U.S. – tumbling 1.6%. That means the economy means the technical definition of a recession, which is considered to be two consecutive quarters of negative economic growth.

Experts expect the economy to slow down further in coming months as the Fed's rate increases continue to push borrowing costs higher."

MY COMMENT

Combine the data outlined above with spending nearly another TRILLION dollars and higher taxes......can you say STAGFLATION. We are at the tipping point for a wage/price spiral boom. I have ZERO confidence in any action by the FED lessening inflation.

The other BIG DANGER that is not a given....but is a "possibility".......is if the housing markets and home values TANK.

So......I am positive especially over the medium to long term.......and I am hopeful for the short term....BUT....events that are happening right now and potential dangers that "might" happen (housing, wage/price spiral) mean we are far from being out of the woods.

 

Having just looked.....my particular mix of stocks is doing very well so far today. BIG gains for me in Amazon today. Even with a strong day....I still have 3 stocks that are down at the moment.....Nvidia, Home Depot, and Honeywell.

Honeywell just put up EPIC earnings yesterday. Yet it is down.....at the moment......today. In typical stock market fashion.......no good deed goes UNPUNISHED.

 

Poor INTEL. I used to own this company......for many years.....back in the 1990's and into the 2000's. They were a long time holding and a ICONIC big cap company that was on fire. BUT....they have had nothing but issues over the past 10-15 years. I put most of the blame on MANAGEMENT....they squandered their dominant position in the chip world.

I STILL dont like this company and dont see tham as having solved their issues. Definitely NOT a company that i have any interest in owning.

Intel stock slumps 11% after poor earnings concern Wall Street

https://www.cnbc.com/2022/07/29/int...-after-poor-earnings-concern-wall-street.html

I will leave it to others to read the article from the link. I DO like this little quote from the article:

"For decades, Intel was able to cover up a litany of failed projects, poor acquisitions, and strategic foibles by pushing Moore’s Law and process leadership,”..............“Unless they regain this leadership (we think unlikely), or change strategic direction, we expect growth, profitability, and cash flow problems to persist at Intel."

This is a HUGE continuation of management FAILURE at what used to be the most DOMINANT chip company in the world. They remind me of IBM and how they fell from grace and have NEVER recovered their former glory.

 

So just to throw a question out there......BEAR MARKET RALLY? OR......the real thing? Are we at the bottom? A soft bottom? Or a false bottom?

Of course there is no......"correct".....answer.

 

Here is MORE great earnings news....but not too surprising.

Chevron, Exxon post record quarterly profits as commodity prices boom

https://www.cnbc.com/2022/07/29/exxon-xom-and-chevron-cvx-earnings-q2-2022.html

 

I posted the above as an entry point into this little blurb......so much for the NEGATIVE NANCY"S in the media regarding earnings.

Over 80% S&P 500 Companies Reporting Earnings Are Beating Estimates

https://tdameritradenetwork.com/vid...nies-reporting-earnings-are-beating-estimates

"Over 80% of S&P 500 companies reporting earnings are beating expectations as overall growth has increased from 28% to 33%," says Doug Loeffler. Some of the major upcoming earnings reports to be released are Facebook (FB), United Parcel Service (UPS), Advanced Micro Devices (AMD), Twitter (TWTR), Microsoft (MSFT), Alphabet (GOOGL), Boeing (BA), McDonald's (MCD), Spotify (SPOT), General Motors (GM), and Ford Motor Co. (F). Loeffler also discusses the impact of yields on growth stocks."

MY COMMENT

If this figure is right.......we have made a really SIGNIFICANT jump up from where we were about a week and a half ago when we were at 67% earnings beats. If this figure is right......we are now beating at a rate ABOVE the historic average for the SP500.

As a DISCLOSURE.....I will say.....I cant find any other articles on this issue that are current. Everything else I am seeing is a week or two old.

 

One last article for now. This one actually sums up much of what I have posted today.

S&P 500 gains, helped by Apple and Amazon, as index heads for best month since 2020

https://www.cnbc.com/2022/07/28/stock-market-news-updates-open-to-close-future.html

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

"The S&P 500 rose Friday on the back of strong earnings from Big Tech names Apple and Amazon to cap off its biggest monthly gain in nearly two years.

The broad market index climbed 1.1%, while the Nasdaq Composite added 1.6%.The Dow Jones Industrial Average advanced 174 points, or 0.5%.

Wall Street was set to post strong weekly gains. The Dow is now up 2.5% for the week, while the S&P 500 and the Nasdaq Composite are up about 4% each.

The major averages were also on pace for their best month of the year. The Dow is on track for a more than 6% gain for July, which would be its highest since March 2021. The S&P 500 is up by 8.8% for the month and the Nasdaq Composite, while still in bear market territory, is up nearly 12%. Both are looking at their biggest monthly gains since November 2020.

That performance is a stark contrast from the previous six months when stocks tumbled to their June bear market levels. The market reversed as investors’ fears about the aggressive pacing of the Federal Reserve’s interest rate increases started to wane and the idea that inflation has perhaps peaked began to settle in.

“Starting from a position of depressed sentiment and bearish positioning was an asset, but the bigger picture was a subtle shift in inflation and inflation expectations, and thus the market’s expectation for the Fed’s path,” said Ross Mayfield, investment strategy analyst at Baird. “Of late, corporate earnings resilience has only added to the bull case and likely put a near-term floor under equity markets.”

Still, some have remained worried about inflation levels with Russia’s ongoing war on Ukraine and the possibility that markets could turn lower again. On Friday, the Bureau of Economic Analysis reported that June’s personal consumption index climbed 6.8% on a 12-month basis. This inflation indicator, which is watched closely by the Fed, hit its highest level since January 1982.

“This may just prove to be a bear market rally in the end – they are very common during longer bear markets – but the combination of rate reprieve, bearish sentiment and positioning, and corporate and consumer resilience in the face of inflation has been enough to spark a rally in risk assets,” Mayfield said.

On Friday investors also got the final reading of the University of Michigan Consumer Sentiment Index, which came in at 51.5 for July. That’s a slight improvement over the preliminary reading and up from the June all-time low of 50.

Big Tech earnings lift indexes

Nevertheless, gains from two of the market’s biggest stocks led the major averages higher. Amazon shares popped 10% after the e-commerce giant reported stronger-than-expected sales for the previous quarter, while Apple climbed about 2% after posting better-than-expected iPhone revenue.

Chevron and Exxon Mobil also posted better-than-anticipated results for the previous quarter, sending their shares higher by about 5% and 2%, respectively.

However, the latest batch of corporate results has been mixed.

Shares of Roku sank more than 26% after the company missed estimates and warned of a slowdown in advertising. Chipmaker Intel dropped 11% after its quarterly results fell short of expectations.

More than half of S&P 500 companies have reported earnings, with 72% of those names beating expectations, FactSet data shows.

These moves come after a three-quarters of a percentage point hike from the Federal Reserve on Wednesday and a negative GDP reading on Thursday.

“The market is taking on a hope that slowing economic growth is going to result in a more dovish Fed moving forward, even if it’s a little further out. So it would make sense to me that weaker rates expectations moving forward would result in a little buoyancy in the equity markets,” said Lauren Goodwin, economist and portfolio strategist of New York Life Investments.

However, Goodwin cautioned that the unusual economic environment and the long period before the next Fed meeting make it difficult to predict the central bank’s path from here."

MY COMMENT

This little article mentions a beat rate of about 72%. I dont know which is right so we are somewhere between about 72% and 80%.....still STELLAR performance.

Of course this is ALL short term stuff......and can turn on a dime. That is why I am STILL very much a long term investor. I CELEBRATE the positive.....but.....my money sits.....fully invested as usual.......so, I am doing NOTHING. AND....of course we have our big black swan (turkey? vulture?) government sitting there, hovering over everything.

i was thinking about the time span that this thread covers......from October 2018 to July 2022......about 3.7 years. Not quite long term......BUT......what a CRAZY TIME for investors and the markets. AND.....anyone that invested REASONABLY and RATIONALLY at the start of that time span is STILL up very nicely in spite of everything.

 

YEP......I make plenty of predictions and statements on here. It is fun to see how often I can be correct. BUT....in terms of my money.....it does not matter if I am wrong 100% of the time.

HOWEVER.....in terms of my long term strategy, portfolio make up, risk tolerance, etc, etc.......I NEED to be right the MAJORITY of the time.

 

Here is an article that many people can benefit from....probably not many on this board, however.

5 Signs of Speculation
Crossing the line from investing to gambling.

https://www.morningstar.com/articles/1105342/5-signs-of-speculation

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

"Bad Aromas

A reader forwarded me an article bearing the indelicate title of “On Bullshit in Investing.” Its author was Benn Eifert, managing partner of a San Francisco-based hedge fund. Rarely do I agree with hedge-fund executives, especially those who run absolute return strategies, which I have deemed “an aspiration, not a realistic investment objective.” However, that headline looked promising.

Happily, the book matched its cover. The article made excellent sense, albeit for the vainglorious reason that it overlaps so strongly with this column. Among the targets that Eifert and I have shared are Special Purpose Acquisition Companies, ARK Innovation ETF, Allianz Structured Alpha, and Infinity Q Diversified Alpha, the last of which, I mused, might the worst-ever public fund. (Bernie Madoff, of course, handily captured the private-fund honors.)

Eifert offers five red investment flags. I wholeheartedly agree with them all. However, there is room for additional discussion, as animal manure is such a fertile subject. In that spirit, here are my five signals for when an investment is really something else: a speculation in disguise.

Sign 1: No Track Record

As with backup quarterbacks, new investments benefit from high expectations. After all, they have not yet failed. If a new security’s initial performance is strong, investors rapidly begin to believe that a better mousetrap has been invented at last. Rarely has it. Rather, the investment has not yet faced an environment that spotlights its disadvantages. When it does, their disappointed owners are often quick to sell. Many then buy another untested issue, repeating the cycle.

Fortunately, U.S. investors have to some extent learned from their mistakes. When I started at Morningstar, in the late 1980s, the largest mutual funds were brand new: government-bond funds that boosted their “income” (in truth, those distributions were short-term capital gains) by selling options. Once their shareholders realized what they owned, they fled, and those funds quickly vanished. Today’s investors are harder to fool. To be sure, they can be tempted, as with SPACs, they tend to be more patient than their predecessors.

Sign 2: A Lack of Cash

Hope is a powerful lure. In addition to new offerings, securities that do not generate cash also invoke the backup-quarterback syndrome. They may not look like much today, but just consider their potential! The expectation consists either of future corporate profits, for emerging companies that are long on vision and short on revenues, or in the belief that the investor will eventually be able to sell the security at a higher price even if it never can distribute cash. (The obvious example is cryptocurrency.)

Cashless assets do sometimes blossom into terrific investments. We all have all heard the stories of those who became fabulously wealthy by holding the shares of profitless companies before those businesses become household names. (Usually, it happens for initial employees, but it can occur for outside shareholders as well.) That said, for every acclaimed winner there are dozens of forgotten losers. Buying tickets is a tough way to make a living, even with equities, which have high expected long-term returns. It is tougher still when attempted with securities that can never accrue profits, such as collectibles.

Sign 3: A Secret Sauce

This item, I confess, echoes one of Eifert’s cautions, which counseled against “overly complex investments with nontransparent sources of return.” Beware investments from people who would have you believe their strategy is too difficult for mere mortals to comprehend. Either they are being disingenuous, or their strategy really is indecipherable–to them as well as to outsiders. When disaster strikes, their shock will match those of their shareholders.

Long-Term Capital Management. According to a state treasurer who decided against committing money to the organization, Capital Management’s principals suggested that he was wise to refuse, since he did not appear to be smart enough to understand their investment process. As it turned out, neither were they. Shortly thereafter, the fund went bankrupt, being unable to service the debt it had assumed.

Sign 4: Ignoring History

Market historians have no monopoly on insight. While previous events offer a useful guide for what may come, they by no means necessitate the future. Consider, for example, inflation. For 40 years, long bonds repudiated the apparent lesson of the 1970s, by thriving and prospering. But this year those securities took a beating, confounding those who, swayed by recent history, had decided the experience of the 1970s was no longer valid.

However, as with owning lottery stocks, betting against the past defies the odds. Usually, the “New Normal” ends up looking much like the Old Normal. For example, when Bill Gross used that term to argue that 2010s would be a lost investment decade, featuring “inexplicably low total returns” for bond and stocks, the opposite occurred. It was a Golden Age for investing, as with the 1990s.

Avoid portfolio managers who claim to know how “this time will be different.” It probably won’t be. Even if it is, it may not match their expectations.

Sign 5: Special Membership

My fifth and final warning is against pledges of investment exclusivity. When portfolio managers offer everyday shareholders the opportunity to invest with the elite rather than with the usual huddled masses, the best response is to hold one’s wallet. It’s delightful to receive special treatment. Unfortunately, retail investors are not special; they don’t bring enough money to the table to merit the extra attention. The only reason to make such an offer, then, is to hustle them.

Thus come the “liquid alternative” funds that charge 2% annually but do not post the gains of the top hedge funds. Or SPACs, which supposedly offer retail investors the chance to purchase initial public offerings at the ground floor but cut different and better deals for their larger shareholders. Or separately managed accounts, which for years-–although this shortcoming is improving, fortunately–sold the promise of customized portfolios without delivering that benefit.

Wrapping Up

Speculation can be lucrative. Securities that violate my precepts–or Eifert’s–may become spectacularly successful, particularly when money is easy, as during the past several years, before the Federal Reserve raised interest rates. Also, sometimes people enjoy playing with their portfolio’s house money, and there’s nothing wrong with that. Therefore, I do not counsel strictly against buying assets that carry these warning signs. However, one should do so with clear eyes. Such trades are gambles, not investments."

MY COMMENT

My favorite above is the......."NEW NORMAL"....situation. I cant tell you how many times over the past 50+ years of investing I have heard that it is a.....new normal. AND.....you old fuddy-duddy people simply dont understand how things work now.

BUT.....ovr that time....guess what.....the new normal always turns out to be just like the old normal.

 

Emmett......I was going to comment on your company earnings the other day....but I got busy posting and forgot.

Your company is......KILLING IT. SMASHING earnings. Looks like you have no problem with job security until you retire and focus on your film, production, directing, and acting career.

 

My gains in my account have really escalated through the day today. NOW....every stock is green. I have also really added to my earlier gains today.

HERE is a advance article that sums up the markets today.....this week......and this month.

Dow adds 300 points, major averages are on track for their best month this year

https://www.cnbc.com/2022/07/28/stock-market-news-updates-open-to-close-future.html

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

"Stocks rose Friday on the back of strong earnings from Big Tech names Apple and Amazon to cap off its biggest monthly gain in nearly two years.

The Dow Jones Industrial Average advanced 306 points, or 0.9%. The S&P 500 climbed 1.2%, and the Nasdaq Composite added 1.8%.

Wall Street headed for strong weekly gains. The Dow is now up 2.6% for the week, while the S&P 500 and the Nasdaq Composite are up about 4% each.

The major averages were also on pace for their best month of the year. The Dow is on track for a more than 6% gain for July, which would be its highest since March 2021. The S&P 500 is up by 8.8% for the month and the Nasdaq Composite, while still in bear market territory, is up nearly 12%. Both are looking at their biggest monthly gains since November 2020.

That performance is a stark contrast from the previous six months when stocks tumbled to their June bear market levels. The market reversed as investors’ fears about the aggressive pacing of the Federal Reserve’s interest rate increases started to wane and the idea that inflation has perhaps peaked began to settle in.

“Starting from a position of depressed sentiment and bearish positioning was an asset, but the bigger picture was a subtle shift in inflation and inflation expectations, and thus the market’s expectation for the Fed’s path,” said Ross Mayfield, investment strategy analyst at Baird. “Of late, corporate earnings resilience has only added to the bull case and likely put a near-term floor under equity markets.”

Still, some have remained worried about inflation levels with Russia’s ongoing war on Ukraine and the possibility that markets could turn lower again. On Friday, the Bureau of Economic Analysis reported that June’s personal consumption index climbed 6.8% on a 12-month basis. This inflation indicator, which is watched closely by the Fed, hit its highest level since January 1982.

“This may just prove to be a bear market rally in the end – they are very common during longer bear markets – but the combination of rate reprieve, bearish sentiment and positioning, and corporate and consumer resilience in the face of inflation has been enough to spark a rally in risk assets,” Mayfield said.

On Friday investors also got the final reading of the University of Michigan Consumer Sentiment Index, which came in at 51.5 for July. That’s a slight improvement over the preliminary reading and up from the June all-time low of 50."

(the rest of the article is a re-hash)

My comment

One thing....even though the first six months of the year were dismal as a whole....it is worth noting that starting in February.....every other month up to and including July......has been a GREEN month. Three green and three red months in that time span. Some times things in hindsight dont look as bad as when you were living through it. BUT.....it was a very DISMAL market period to live through.