Markets continue as GREEN. We need to build on those gains to insure a good close hours from now. Round and round we go....where we end no body knows. COME ON MAN.....SHOW ME THE MONEY.
My account....as of a minute ago.....is showing some nice gains today. My ONLY red stock today is Honeywell....and that is very slightly. I have hope that they will turn green as the day goes on considering their GREAT earnings report recently. I expected to be green at this moment.....but the amount and breadth of the green surprised me. It is always good to get a POSITIVE surprise. The markets CONTINUE to try to fight their way back from the market drop. the SP500 is at (-13.22%) right now. We will be making progress if we can push down below the 10% loss range. A good month in August......."might".....get us there.
Some good points above. Especially in regard to long term investing and capturing the gains when they occur. The market can defy odds when you least expect it sometimes. I like how the market has responded over the past month and even more so recently. If you stay with your plan and stick to it, the reward will come at some point. It takes some courage and confidence to do it. That is why it is important to do the research and have a realistic view of what you are trying to accomplish with your investing plan. Taking the time to get it right and do not over complicate the process. This does not mean an investor cannot make an adjustment in their long term plan. Sometimes companies change, sometimes an investors outlook changes, and our investing life can change while working and then there is retirement to consider. A good/solid plan will allow you to make those adjustments without effecting your long term financial security and will be one that you can personally stick with.
I have a GAIN....at the moment. Not big....+0.08%. Five stocks UP.......Amazon, Costco, Nvidia, Home Depot and Tesla. Five stocks DOWN....Apple, Nike, Microsoft, Honeywell, and Google. Looks to me like some are taking some profits from......some......of the big earnings gain stocks from last week. Also.....looks like the type of day that we see a FADE or a GAIN into the close.
What we are seeing over the past 5-6 weeks with market gains is EXACTLY why I stay fully invested all the time. I want to capture the STEALTH rallies that occur without warning. People that go to cash when there is a market dip.....spend the first 10% to 20% of a market rally wondering if it is for real and is it time to get back in. They also miss the little market gains that occur and stick even during a BEAR MARKET. Often markets dont come back all at once. They come back in dribs and drabs and little spurts. In other words.....if during some BEAR MARKET we got a nice little rally....than the market goes negative again....but not enough to wipe out all of the little rally.....a long term investor has gained a bit back. I see this often during negative markets.....they dont come roaring back all at once......but in little rallies that together......when you look at a chart in hindsight....they add up to some real gains and the end of the BEAR. This is EXACTLY why market timing DOES NOT WORK. It is easy to bail out of the markets......but....EXTREMELY difficult to time getting back in. Market timing is a sure way to miss out on 10-20% of the gains when a negative market makes a come-back. Do that over a lifetime and you are SEVERELY under-performing the un-managed averages. This is why I stay FULLY INVESTED all the time. This is also why when I have money to go into the markets.....I put it in all at once. Of course the research shows that this sort of investing beats the alternative. Unfortunately most people just can not stand to stay invested all the time and go all in all at once when they have funds. AND.....as SMOKIE says above....the fact that I have a long term plan and portfolio does NOT mean that I hold onto those stocks for LIFE. I would like to.....but companies change over time. When necessary I make changes. BUT....those changes need to be based on business fundamentals. I used to try to hold about 15-20 stocks in my PORTFOLIO MODEL.....now I hold about ten. Compare my portfolio NOW to what I held 20 years ago and there is probably only a couple of stocks that I had back than.......Nike, Costco, Home Depot......that is about it. I sold out all my Microsoft back in about 2001/2002. Over the past 20 years I have added....Apple, Microsoft, Honeywell, Google, Amazon, Nvidia, and Tesla to my portfolio. I used to own many companies like Coke, Pepsi, GE, IBM, Intel, Colgate, Proctor & Gamble, Phillip Morris, Smuckers, Amgen, etc, etc, etc. As business realities change I try to change with the times. BUT....I do not try to be on the cutting edge of change. I try to go slow with portfolio changes......so I am not constantly CHURNING my portfolio when a company has a bad year.
Looks like the markets continue to WANDER AIMLESSLY today. We might be heading toward a close where how you do today is very specific to your EXACT holdings.
The FED's WORST NIGHTMARE......since I am not a fan of how the FED operates....that sounds good to me.....but.....as an investor perhaps not. Recent economic data have been the Fed's 'worst nightmare,' economist says https://finance.yahoo.com/news/rece...-been-the-feds-worst-nightmare-173041492.html (BOLD is my opinion OR what I consider important content) "The economy is looking pretty dreadful, and that won't make the Federal Reserve's job any easier as it tries to engineer a soft economic landing, one top Wall Street economist warns. "I would say that the recent economic data have been central banks' worst nightmare," said Citi Global Chief Economist Nathan Sheets on Yahoo Finance Live (video above). "On the one hand, I would say there is very clear evidence of a slowing in global demand. And on the other hand, there is also clear evidence that inflation pressures are persisting. You kind of put that together, it's really hard for central banks to fight that." The reads on the economy have collectively painted a picture of a slowing U.S. economy stuck with stubbornly high inflation. The Bureau of Economic Analysis (BEA) said last week that second-quarter GDP fell 0.9% as consumers and businesses pulled back on their spending due to rising prices for goods and services. This marked the second-straight quarter of economic contraction after GDP in the first quarter declined by 1.6%. The back-to-back economic contraction ratcheted up talk that the U.S. was in a recession. "I wouldn't be surprised if they [NBER] actually push the start of the recession to the end of last year," Dreyfus Mellon Chief Economist Vincent Reinhart said on Yahoo Finance Live. "So we might wind up being in one of the longer recessions on record." Within the past month, investors also received major profit warnings from big-name retailers such as Target, Walmart, and Best Buy as consumers battle through rising prices for gas, food, and rent. These material profit warnings are an unwelcome sign about consumers' spending decisions. Bottom line: Conference Board's consumer confidence measure has slipped for three-straight months, stocks remain in bear market land, and massive companies from Tesla to Meta to Amazon are announcing hiring pullbacks. And to top it all off, the June Consumer Price Index saw its largest gain since November 1982 at 9.1%. Despite the economic slowdown, the Federal Reserve made it clear at its latest meeting that it would move forward with more interest rate hikes this year to stomp out inflation. In turn, Sheets added, that may lead us towards a situation where unemployment rises while the economy slows down but inflation also remains elevated for a period. "It feels at the moment that we are going through a period of transitory stagflation," Sheets said." MY COMMENT Well.......NO DUH.....on the stagflation. Whether it is short or long lasting will only be clear in hindsight. I guess it will depend partly on how quickly the FED tanks the economy.......along with government policy. If we are depending on the FED......and....government to save us and the economy.....that is NEVER a good thing.
File this under.....who would have thought. OR.....everyone gets old. Top Millennial, Gen Z Picks Shift To Dividend-Paying Stocks; No. 1 Stock Tesla To Hold 3-To-1 Stock Split Vote On Thursday https://finance.yahoo.com/m/f9e3c029-2453-38e6-a9bf-eedc0ce911bd/top-millennial-gen-z-picks.html (BOLD is my opinion OR what I consider important content) "Over the next 25 years Millennials and Gen Z will inherit nearly $70 trillion from their Baby Boomer grandparents and Gen X parents. But many of them are not waiting for the windfall to start investing in stocks. So what stocks are they investing in? And should you buy them too? Millennials, born between 1981 and 1996, are saving more than ever. A Bank of America survey found that nearly a quarter of Millennials that are saving have at least $100,000, with 28% of them investing in the stock market. To be sure, many Millennials and older Gen Z Americans are saddled with crushing student debt and other financial obligations. Yet, they are also saving for retirement and investing in the stock market earlier than previous generations. A CFA Institute study shows that 31% of Millennials with taxable investment accounts began investing before age 21, vs. 14% of Gen Xers and 9% of Baby Boomers. Younger investors have a keen interest in socially and environmentally responsible companies such as electric-vehicle makers, tech firms and cryptocurrencies. Younger adults tend to favor high-risk, high-reward stocks, such as Tesla (TSLA), Advanced Micro Devices (AMD) and meme stocks such as AMC Entertainment (AMC). But they also like slower growth names such as Apple (AAPL) and Microsoft (MSFT). Top Millennial And Gen Z Stock Picks In Q2 2022, they continued to pump the breaks on growth stocks in favor of value stocks, according to the Apex Next Investor Outlook report. Like older investors, they appear to be concerned about rising interest rates and recession. So Gen Z investors continue to focus their investing on traditional stocks throughout the second quarter, seeking safety in dividends over high-growth companies, the report said. As a result, Verizon (VZ), Home Depot (HD) and McDonald's (MCD) rose significantly. Meanwhile, income-generating dividend players and energy stocks such as Costco (COST), Abbvie (ABBV) and Chevron (CVX) maintained investment momentum. Apex, which analyzes the holdings of more than 1 million Gen Z accounts and over 5 million accounts held by Millennials, Gen X and Baby Boomers, publishes a quarterly report that shows generational investing trends. Among Millennials and Gen Z investors in Q2 2022, the top stocks remained the same from the last quarter. Tesla ranked No. 1 again. Apple, Amazon (AMZN), AMC and Microsoft stock were again top 5 picks. The top 10 included Nvidia (NVDA), Disney (DIS), Alphabet (GOOGL) and Meta (META) (formerly Facebook). Chinese EV maker Nio (NIO) climbed three slots into No. 10 for Gen Z investors, knocking out meme stock GameStop (GME). Nio gained five spaces to No. 8 for Millennials. Popular Millennial Stock: Tesla Stock Tesla gained 36% in the last quarter of 2021, thanks to record deliveries. Tesla delivered 308,600 vehicles, bringing its 2021 total to a record-breaking 936,172. The EV maker also handily topped Q4 earnings despite having factories "running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022," management said in a statement. Tesla continued its streak with strong Q1 earnings, but the stock took a dive after CEO Elon Musk's $44 billion takeover bid for Twitter was accepted by its board. But on July 8, Musk said he was pulling out of a deal. Twitter sued Musk to force the purchase. A lengthy battle is expected. The EV maker also produced drastically fewer cars at its Shanghai plant in April due to Covid shutdowns and parts shortages. Tesla's China May deliveries bounced back as production picked up with restrictions eased. Nevertheless, Tesla delivered 254,695 vehicles in the second quarter, below estimates for 264,000. On June 28, the White House said Tesla was working to open its Supercharger network to other EVs in the U.S. by the end of 2022, which means more revenue for Tesla. On June 24, the California Energy Commission proposed awarding $6.4 million to Tesla to open its supercharger network to other vehicles in four communities in California: Willow, Barstow, Coalinga and Baker. Rival charging company ChargePoint (CHPT) is also on the list, with roughly $4.6 million in proposed awards. Meanwhile, Tesla plans to bring to a vote at its Aug. 4 shareholder meeting a 3-to-1 stock split. The event has been dubbed Cyber Roundup and will be held at Tesla's factory in Austin. The stock split is seen as a way to increase demand for its shares. Lower-priced shares tend to be more accessible to everyday investors. On July 13, Tesla AI chief Andrej Karpathy said he was leaving the company. Earlier, Musk said the company would lay off 3.5% of employees. He said that would result in a cut of 10% among salaried employees over the next three years, but added that Tesla would hire more hourly workers. Tesla reported better-than-expected Q2 earnings on July 20. Shares soared 10% the next day. TSLA shares are now trading around 909. MarketSmith chart analysis shows TSLA stock is not currently a buy. On a daily chart, shares are in a long consolidation with a $1,208.10 buy point. Amazon Stock Popular pick Amazon said on July 6 that it's partnering with Grubhub to offer Prime members a one-year membership to the food delivery service. The deal gives Amazon the option to take a 2% stake in Grubhub. Amazon could boost its total stake to 15% of Grubhub. On July 21, Amazon announced it had about health care company One Medical for $3.49 billion. AMZN stock is not yet a buy. Its relative strength line, which compares a stock's performance vs. the S&P 500, is ticking downwards. Shares have pulled back in recent days, but are still trading above their 50-day line. Microsoft Stock MSFT stock is not yet a buy, but its shares gapped up on April 27 on earnings and revenue that beat expectations. Microsoft bought Activision Blizzard in Q3 for nearly $69 billion. The company cut its Q4 outlook. It said in a securities filing Thursday that it now expects fiscal Q4 sales of between $51.94 billion and $52.74 billion, down from prior guidance of $52.4 billion to $53.2 billion. It sees EPS of $2.24 to $2.32, down from earlier estimates of $2.28 to $2.35. MSFT shares are trading below their 50-day line. Bloomberg reported on June 8 that Microsoft is laying off 400 workers in Russia, where it is winding down its operations after halting sales there following the country's invasion of Ukraine. Meanwhile, the company's augmented reality chief, Alex Kipman, is leaving amid misconduct allegations. AMC Stock Meme stock AMC may be a favorite among young investors, but MarketSmith chart analysis says stay away. Shares have plunged from their May 2021 peak. AMC's relative strength line is trending downward, near lows not seen since June 2021. While revenue has rebounded from 2020 levels, when most theaters were closed, it remains well below pre-pandemic levels. AMC is expected to lose money through at least 2023. In a move that baffled Wall Street, AMC said on March 15 that is bought a large stake in a gold-and-silver mining company. AMC is plunking down nearly $28 million in cash for the deal for a 22% stake in Nevada-based Hycroft Mining Holding, and an equal amount of stock warrants. The company, which used to be known as Allied Nevada Gold Corporation, has a history of financial woes. Crypto Winter Looms The Bitcoin craze captured the attention and wallets of investors young and old. But Gen Z, a generation that typically has less discretionary income to spend on risky investments, is perhaps more vulnerable to the so-called crypto winter many investors are expecting. As a result, young investors have moved away from crypto stocks like Coinbase (COIN), Marathon Digital (MARA), Grayscale Bitcoin Trust (GBTC)and Riot Blockchain (RIOT) in Q2. Despite Gen Z investors veering away from crypto stocks during the quarter, millennial investors remain bullish, particularly in the flagship cryptocurrencies of Bitcoin and Ethereum, the report said. Apex says there were approximately 370,000 new crypto-enabled accounts opened in Q2, bringing total end crypto user accounts to over 4.9 million. Millennials represented 54% of crypto-enabled accounts, with Gen Z and Gen X each accounting for 21%." MY COMMENT GEE.....the kids are getting old. My son who is a first year MILLENNIAL....just turned 41. These generations are NOW following the same investment style in terms of what they invest in.....as much of the older generations. The....."crushing student loan".....BALONEY in this article is just a repeat of the old MYTH. The average student coming out of college with loans is $30,000 or below. Back in the old days....many of us came out of school with $5000 or $6000 of student loan debt. Adjusted for inflation the debt load for a college degree is about the same. As to the younger investors doing MEME stocks, crypto, etc, etc.......well you have to learn some lessons along the way.
I forgot about the TESLA 3 for 1 split. I looked at my account a few days ago and my Tesla share balance and thought......"gosh....is that All I have"? I thought I should have more. I guess it was a SUBCONSCIOUS nod to the split that is going to happen soon. The split vote will happen this week.
SO......I start the week......drum roll please......IN THE GREEN. Five stocks UP and five stocks DOWN......but green overall. My gain today was......to say the least.....minimal. BUT...it still counts as a gain. I managed to beat the SP500 today by 0.30%. The markets DID.......SHOW ME THE MONEY....today.......I will take the minimal victory and move forward.
Now that we got this.....treading water....day out of the way....perhaps the markets will be able to be confident enough to move forward stronger tomorrow. No real earnings today that matter. Tomorrow we have some that might count.....PayPal, AMD, CAT, and SBUX.
Kind of a quite day. The market was not great, but not bad...even the media struggled for any traction. I'm okay with that. All things considered, sometimes it is okay to have a uneventful day in the investing world. That being said...Lets make money this week.
This is quite an EPIC GAIN for just 68 calendar days.....and much fewer market days. Tesla Extends Rally, With Gain Approaching 50% From Low in May https://finance.yahoo.com/news/tesla-extends-rally-gain-approaching-150401439.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- Shares of Tesla Inc. are nearing a 50% gain from lows touched in May, ahead of a shareholder vote later this week on the electric-vehicle maker’s stock-split plan. The shares jumped as much as 5% to $935.63 on Monday, marking a gain of 49% from the May 24 close of $628.16. They pared most of those gains to close barely changed at $891.83. Tesla is coming off a 32% gain in July, its best month since October 2021. The Elon Musk-led carmaker will hold its annual general meeting on Aug. 4, where its investors will get to vote on a 3-for-1 stock split plan. If approved, it will be Tesla’s second share-split in less than two years. The company had executed a five-for-one stock split in 2020, a move that led to a 60% surge in the share price from the day of the announcement to the execution date. The exuberance for Tesla comes amid a broader wave of optimism in the US stock market. The S&P 500 Index rose 9.1% in July for its best month since November 2020, while the Nasdaq 100 Index surged 13% for its best monthly performance since April 2020. But Tesla’s rally has been even more impressive, helping to almost wipe out its underperformance against the S&P 500 this year. The stock is now down about 16% this year, while the broad equities benchmark has fallen about 14% for 2022." MY COMMENT As a shareholder I love it. This just shows you how much and how quickly the BIG CAP TECH GIANTS can come back when the market turns in their favor. At some point this will be the story-line for Amazon, Apple, Nvidia, Google, and Microsoft. I am willing to wait for it.
Here are a bunch more earnings BEATS. Looks like the good earnings continue. After-hours movers: Pinterest, Activision Blizzard, Avis Budget Group, ZoomInfo https://finance.yahoo.com/news/afte...rd-avis-budget-group-zoom-info-221130420.html
Today is one of those days. With the media PUMPING the China DRAMA.....the markets dont have a chance. As the day evolves we might see some drop in the posturing......but dont hold your breath. Sooner or later it is inevitable that China will take back Taiwan by force. Is it going to be now? I doubt it....but the timing is good for China, we are totally dependent on them, we have a weak President,......and regardless......there is nothing we can do anyway. So we will just have to endure this little media and international CIRCUS......for 2-4 days. A total distraction from EARNINGS and everything else. Do I care.......NO.
Since today seems to be a waste......I will make a post.....based on a show "about nothing". Weekly Market Pulse: Opposite George https://alhambrapartners.com/2022/07/31/weekly-market-pulse-opposite-george/ (BOLD is my opinion OR what I consider important content) "It all became very clear to me sitting out there today, that every decision I’ve ever made, in my entire life, has been wrong. My life is the complete opposite of everything I want it to be. Every instinct I have, in every aspect of life, be it something to wear, something to eat… It’s all been wrong. Every one. – George Constanza If every instinct you have is wrong, then the opposite would have to be right. – Jerry Seinfeld From the Seinfeld episode “The Opposite”" "I was talking with a friend last week about the markets and the economy and she said she didn’t understand why the market went up after the GDP report. After all, it was the second quarter in a row of GDP contraction and that’s a recession. Shouldn’t I be selling stocks? I explained that markets are forward-looking and that stocks bottom well before the end of a recession (about 4 months on average). So, I said, if you want to buy stocks near their recession lows you have to buy before the recession is over. She looked at me and said, Opposite George! As a devoted Seinfeld fan I immediately got the reference and thought, what a wonderful way to think about investing. We may not be as hapless as George Constanza when it comes to most of our life, but investing? Our instincts about investing are horrendous, almost always wrong. Last year when stocks were booming and all the talk was about another Roarin’ Twenties, it was hard to resist the urge to buy. This year, when stocks are falling and we’re arguing about whether inflation or recession is the worse of the two evils we face, it is hard to resist the urge to sell. The GDP report for the 2nd quarter was indeed negative (-0.9%) and there is now an argument about whether this constitutes a recession since Q1 was negative as well. It is mostly a political Rorschach test where Republicans are certain that it is and Democrats are just as certain that it isn’t. Mostly. For the record, I don’t know and don’t much care. The economy has certainly slowed since last year but what you call that is irrelevant. Q1 GDP fell by 1.6%, mostly due to trade which reduced it by 3.2%. That was reversed in Q2 as trade added 1.43%, pretty close to my back-of-the-envelope calculation last week. What changed in Q2 was inventory, which subtracted 0.35% in Q1 but a full 2% in Q2. What does that tell you? Not much if you ask me. The trade figures were distorted in Q1 by, among other things, the China shutdown. The inventory figures for the first half of this year are just a correction of the large inventor build-up in Q4 2021. It is just the economy trying to adjust to the end of COVID – maybe – and it isn’t easy since no one has any experience with recovering from a pandemic. Inventories have risen recently and there has been a lot of commentary about how this will negatively impact the economy. If you follow these things you’ve probably seen a chart that looks something like this: It certainly looks scary with inventories rising much faster than sales and there are plenty of macro gurus who are willing to tell you that production will have to be cut until inventories come back down. That means layoffs and all the other things we normally associate with recessions. Things are about to get a lot worse, right? Here’s another chart that represents the same data. It’s a ratio called inventory/sales: Not nearly as dramatic as that first one, huh? The ratio is about average for the data back to the early ’90s. I would also note that we entered recession in 2008 with the ratio falling and we avoided recession in 2016 despite a ratio much higher than the current one. Inventory and production decisions are not simple and they are especially difficult today. Do you really think companies are going to lay off a bunch of their workers to address a – likely – temporary inventory problem? In an economy where workers are so hard to find? What is an acceptable level of inventory in the post-COVID economy with supply chains still not back to normal? Maybe we are in recession but it isn’t because of inventories. My outlook for the economy hasn’t changed. We came into COVID growing at an average of 2.1% over the prior decade. During COVID we didn’t do anything to improve the potential growth rate of the economy. And I don’t think we did anything that significantly reduces that potential either. What that means is that we are ultimately headed back to whence we came, a 2% growth trend. What we’re doing right now is removing the COVID distortions – from the lockdowns and the stimmie checks and the easy money policies of the Fed. What those distortions did was drive goods consumption well above trend and services consumption well below trend. As they move back to trend, the goods side of the economy will slow and the services side will rise. Forget the noise of trade and inventories everyone else is arguing about. When you look at the report, what you find is that goods consumption has subtracted from GDP and services have added to GDP over the last two quarters. And, just to be clear, services added more than goods subtracted (+1.78% vs -1.08%). If you shift to the investment part of the GDP equation (again, ignoring inventory) we see something that is also acting just as one might expect with the Fed raising interest rates. Gross Private Domestic Investment subtracted 2.73% from Q2 GDP but we know that 2% of that was inventory. Of the -0.73% left over, -0.71% of that was residential investment – housing. Even in the non-residential side, the biggest detractor was “structures” which sounds a lot like real estate. I don’t know about you, but I’m not exactly shocked that real estate activity has slowed with higher interest rates. The GDP report last week was a non-event. The economy is doing exactly what one would expect given these conditions. The inventory and trade figures of the last 2 quarters are nothing more than distractions for investors and the commentary nothing more than calls to your inner George Constanza to follow your instincts. Another non-event was the Federal Reserve’s FOMC meeting that kicked the stock market rally into high gear. That was so because Jerome Powell’s press conference was widely perceived to be a message from the Fed that they are now “data dependent”. One might think that should always be so, but the Fed is in the same boat as investors, trying to interpret data from the past to predict the future. What they ought to be doing is watching the market rather than the economic data but that seems a lost cause; the Fed is always behind the curve. If the market perceives that the economy is headed for recession, short-term interest rates will fall rapidly as the market prices in future Fed rate cuts, no matter what the data says about yesterday. What the market is saying today about growth is that it is slowing but not precipitously. Inflation expectations have also fallen but the Fed’s perceived dovishness on rates did cause breakevens to tick higher last week. Will stocks keep going up? Well, obviously I don’t know the answer to that question but I can offer some data about previous periods of negative GDP growth. What should you do if we have just had 2 consecutive negative GDP quarters? History says you probably ought to think about doing some buying: Just to be clear, I’m not saying you should back up the truck and load up on stocks. We don’t even know yet whether we really had two negative quarters in a row. GDP data has been subject to some pretty big revisions in the past and the first 2 quarters were such small contractions that either or both could be revised away. And that is especially true of Q2 since it was mostly inventories and an estimate was used for June because the data isn’t yet available. Furthermore, there’s nowhere near enough data here to make this meaningful from a statistical standpoint. It is interesting because of the things listed under notes as people seem to think today’s conditions are somehow unprecedented. Russia’s regular threats today about nuclear weapons pales in comparison to the Cuban Missile Crisis. But this could just as easily be similar to 2008 (from a market standpoint, not an economic one) as 1975 or 2020/21. My brief overview of markets is that large growth stocks are still overvalued even as they led the recent rally. Large value stocks are cheaper and small and mid-cap stocks are cheaper still. International is very cheap but the dollar is still in an uptrend – we may be seeing a peak there but it is very premature to call that – and as long as that is the case, it’s an uphill battle. There is also the small matter of the stranglehold Russia has on Europe’s largest economy via the energy markets. I do think the recent rally probably has more to go based on my reading of sentiment. Large specs are still holding sizable short positions in the futures markets and my sense is that most people think this is a bear market rally. Put/call ratios aren’t as high as I’d like but they aren’t so low that we need fret too much either. Don’t waste your time thinking about whether this is a recession or not, it really doesn’t matter. What does matter is that the economy is slowing just as expected and most companies are, so far, finding ways to cope with it. I know you are worried about the economy right now and you should be. We don’t know if things will get worse before they get better (and they will get better). But for goodness sakes don’t make decisions based on your “instincts” or “your guts” or because some chart charlatan scared you. Remember Opposite George!" MY COMMENT The last paragraph above is the KEY point. The actual best way for many of us to deal with everything is to simply sit and wait it out. Dont overthink......dont over-emote. Today is the perfect example of an EMOTIONAL and MEDIA driven day. It is all about DRAMA and FEAR. IGNORE the outside "stuff" and ignre the internal "stuff" that your brain pushes on you.
I like this little article. Hints of 1982 have one strategist saying the bear market is over: Morning Brief https://finance.yahoo.com/news/bear-market-stocks-morning-brief-august-100015361.html (BOLD is my opinion OR what I consider important content) "When the closing bell rang last Friday, the S&P 500 registered its best monthly gain since November 2020. The apparent enthusiasm from investors in July may be perplexing given the economic and earnings backdrop facing the markets. But for Tom Lee, co-founder and head of research at Fundstrat, the market's recent rally makes perfect sense. Furthermore, Lee argues, history suggests that we may be at the beginning of a more forceful push higher into the end of 2022. "The biggest takeaway for me on events of this week?" Lee asked in a note published on Friday, "Convincing and arguably decision evidence the 'bottom is in' — the 2022 bear market is over." Last week, the Fed raising interest rates by another 0.75%. GDP data that showed a second-straight quarter of negative GDP growth. Recent housing data showed a notable slowdown in arguably the economy's most important sector. And looking abroad, news broke that Russia further cut the flow of gas to Germany as Europe prepares for a potentially frigid winter amid Russia's war in Ukraine. And yet markets rose. "When bad news doesn't take down markets," Lee added, "it is time for investors to assess." This week began with data from FactSet out Monday showing analysts making larger-than-normal cuts to third quarter estimates. In other words, analysts are more bearish than normal on corporate profits. And this aggregate downgrade to earnings expectations comes amid high-profile flops from the likes of Meta Platforms (META) and Intel (INTC) over the last week. Fundstrat's optimism, however, extends beyond a view that hinges on the worst of the news flow being over for investors. Over the last several weeks, Fundstrat has been arguing the market setup is similar to what investors were presented in August 1982 — a moment that preceded a fierce rally in equity markets amid a pivot from the Fed. In the summer of '82, the U.S. economy was in the throes of recession and then-Fed Chair Paul Volcker had not yet signaled whether the Fed would ease up in its campaign to slow inflation. In October of that year, Volcker signaled the Fed could temper efforts to slow inflation. "The forces are there that would push the economy toward recovery," the New York Times reported Volcker said in a speech. "I would think that the policy objective should be to sustain that recovery." For investors, "sustain that recovery" kicked off a nearly 20-year bull market in stocks. Two months before the pivot, markets sniffed out the Fed's plans — and in just four months erased all losses from a 22-month bear market that saw the S&P 500 fall 27%. And this 40-year-old rally is why, in Lee's view, the S&P 500 could be headed back above 4,800 and new record highs by the end of this year. Last week, Lee notes the bond market erased over 0.5% of expected interest rate increases from the Fed through next spring. "The bond market made a serious 'dovish pivot' in pricing Fed funds into 2023," Lee said. "Is it any wonder that equity markets have found footing in July?" Source: Fundstrat Moreover, Lee sees the market pricing in a growth scare as opposed to a full-blown recession. As was widely discussed during the spring, the S&P 500 falls 32%, on average, during a typical U.S. recession. Peak-to-trough, the S&P 500's drop during the current drop from record highs reached 23%. And if recession is avoided, the 30%+ drop many investors have been bracing for may never materialize. Last week's GDP data ignited a spirited conversation about whether the U.S. economy was already in — or would fall into — recession. Two negative quarters of GDP growth, at the very least, meets the criteria of a "technical" recession. Though as we highlighted on Friday, economists at Bank of America outlined why a formal recession call isn't likely in the offing anytime soon. Data from the manufacturing sector out Monday also added evidence to the case for a growth slowdown but not necessarily an outright recession. Manufacturing growth in the U.S. fell to a two-year low in July, according to the Institute for Supply Management's latest purchasing managers' index (PMI). The PMI showed the largest one-month decline in the pace of price increases on record but still came in at came in at 52.8 — and any reading over 50 shows expansion in the sector. Survey data from S&P Global similarly showed a slowdown in manufacturing growth amid a notable downtick in inflation pressures, but this is a trade-off the Federal Reserve made clear last week that they are willing to make. "Supply chain problems remain a major concern but have eased, taking some pressure off prices for a variety of inputs," wrote Chris Williamson, chief business economist at S&P Global Market Intelligence. "This has fed through to the smallest rise in the price of goods leaving the factory gate seen for nearly one and a half years, the rate of inflation cooling sharply to add to signs that inflation has peaked."" MY COMMENT YES.....supply chain is the key to everything. I saw some data the other day that is is just as screwed up as ever. the backlog of shipping has now moved from the West Coast to the Gulf ports and the East Coast. It is just going to take another year or perhaps even more to get things going in the right direction.....but.....it will slowly happen. BUT....I dont see much more potential for the markets to drop......as I have been saying recently perhaps 10-15%. As an investor I will take that all day long......the ability to invest at within 10% of a market bottom. Of course I dont have to worry about that.....since I remain fully invested as usual.
One piece of data in the above article is interesting. The analysts are lowering estimates for third quarter earnings. They were WRONG for the first quarter.....they were WRONG for the second quarter......so....now they are putting all their hopes on being right for the third quarter. BUT....they will probably be spectacularly WRONG. WHY? Because over the past few years they have nearly ALWAYS been wrong and they are not magically going to suddenly get ability to see clearly. Right or wrong....these people telling us what earnings are going to be in the future.....ARE A JOKE. They dont have a magic eight ball. They dont have any secret insider knowledge. ALL they have is a platform to put their view out there.......LOUDER.....than the average person.
OMG......end of the world.....the plane has touched down in Taiwan. Time for me to lock myself in my backyard bomb shelter.
