The Long Term Investor

In the face of very good earnings.....in general and with specific companies.....we see the usual short term stupidity today.

Stock market news today: Nasdaq tumbles as Google slides, Microsoft jumps after earnings

https://finance.yahoo.com/news/stoc...microsoft-jumps-after-earnings-133442758.html

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

"Stocks largely slipped on Wednesday as investors digested mixed earnings reports from Microsoft (MSFT) and Alphabet (GOOG, GOOGL), with more quarterly results set to flow in.

The Dow Jones Industrial Average (^DJI) popped more than 0.2%, while the S&P 500 (^GSPC) fell 0.6% and the Nasdaq Composite (^IXIC) dropped more than 1%.

Alphabet shares slid more than 8% after the Google parent beat on earnings and revenue but fell short in its cloud business. By contrast, Microsoft stock popped 4% after its own double beat showed its bets on AI were paying off for its cloud segment.

Other megacaps lost ground as the mixed picture sapped some faith in Big Techs, which have powered gains in stocks this year. Amazon stock (AMZN) and Facebook parent Meta (META) — which reports results after the close Wednesday — were down about 3%.

Tech stocks have borne the brunt of pressure from surging Treasury yields, which rose again early Wednesday after stabilizing somewhat. The 10-year yield (^TNX) climbed to 4.88%, while the 30-year yield (^TYX) advanced above the 5% level.

Shares in Deutsche Bank jumped nearly 7% after the German lender's profit beat estimates."

MY COMMENT

Just more confirmation that......the short term markets are.....DUMB AS A POST.

The danger is that at some point this short term IDIOCY will spread (slowly over many years) and infect the long term.......since this "stuff" reflects human thinking and behavior.

 

On the topic of the current negativity.....I place most of the blame on the constant BS that is being spouted by the FED out in the media daily.

 

In addition to GOOGL.....guess who will be talking today?

Dow Jones Falls Ahead Of Powell Speech

https://finance.yahoo.com/m/3e283587-9e23-3d23-aad1-7822d7cfc83d/dow-jones-falls-ahead-of.html

"After the stock market close, Fed chief Powell is scheduled to make introductory remarks ahead of the 2023 Moynihan Lecture in Social Science and Public Policy in Washington D.C. The event is sponsored by the American Academy of Political and Social Science."

 

I also see the markets today as the perfect example of what happens when AI driven PROGRAM TRADING drives the markets.

The Wall Street quants program trading models....are really nothing more than news headline trading platforms. It is my simple view that they also drive the markets rather than trade the markets. When they all push in a certain direction the markets follow.

I dont believe for a second that they are trading market conditions......they are creating those market conditions. In other words....manipulating the markets. BUT....that is just my simple personal opinion.

 

So.....with the markets flailing around....lets talk about something that regular people might need to know....in the real world.

Retirement withdrawal rules are ‘crazy’ this year, IRA expert says. Here’s what you need to know

https://www.cnbc.com/2023/10/25/how...a-required-minimum-distribution-for-2023.html

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

"Key Points

• There have been complex changes to required minimum distributions over the past few years.
• While Secure 2.0 changed the beginning RMD age to 73, there’s confusion about when retirees need to start withdrawals.
• You also need to consider the rules for inherited accounts, experts say.

As a retiree, mandatory retirement plan withdrawals can be a source of stress and confusion — and complex changes over the past few years have led to mistakes, financial experts say.

Generally, you must start these yearly withdrawals, known as required minimum distributions, or RMDs, by a specific age. Before 2020, RMDs began at age 70½, and the Secure Act of 2019 increased the beginning age to 72. But in 2022, Secure 2.0 raised the age to 73, which started in 2023.

The RMD rules for inherited individual retirement accounts are even more complicated, prompting the IRS to waive penalties for missed RMDs over the past couple of years.

“They’re crazy,” said IRA expert and certified public accountant Ed Slott, describing the new RMD rules. “You shouldn’t need an engineering degree to figure it out.”

For 2023, RMDs apply to both pretax and Roth 401(k) accounts, along with other workplace plans. The mandatory withdrawals also apply to most IRAs, but there are no RMDs for Roth IRAs until after the account owner’s death.

If you skip your yearly RMD or don’t withdraw enough, there’s a 25% penalty on the amount you should have withdrawn. You can reduce the penalty to 10% if the RMD is “timely corrected” within two years, according to the IRS.

You can request a penalty waiver from the IRS by filling out Form 5329 and attaching a letter of explanation. But there’s no guarantee the IRS will agree to waive the fee, Slott said.

Which account owners need to take an RMD

“The most important change that retirees should know about RMDs is the increased age,” said certified financial planner Ben Smith, founder of Cove Financial Planning in Milwaukee.

Secure 2.0 bumped the RMD beginning age to 73 from 72 for pretax IRA owners and retirement plan participants. You must take your first RMD by April 1 of the year following the year you turn 73, he said.

If you turn age 72 in 2023, you can delay RMDs until age 73. But if you turned 72 in 2022, you needed to take your 2022 RMD by April 1, 2023, and your 2023 RMD by year-end.

To put it another way: If you were born in 1950 or earlier, you need to take an RMD in 2023, and those born in 1951 or later don’t have an RMD in 2023, Slott explained.

“People still working with a company plan can delay until they retire,” he said. But the extension doesn’t apply to IRAs.

Inherited IRA owners also need to know the withdrawal rules, which hinge on when the original owner died and the type of beneficiary."

MY COMMENT

It is probably a good idea for most people to start planing for retirement about age 45-50. There are many tax considerations and strategies that impact how and when people will want to take money from various retirement fund sources. Like investing for life.....it is a good idea to start to formulate your retirement financial plan......at least 20 years before your actual retirement.

The key is to.....BE PROACTIVE.

 

My off the top of my head.....view of earnings.....they are BOOMING. I have been skimming earnings headlines....and....seeing a really strong number of beats being reported.

Of course this is the height of unscientific polling......and just my "FEEL" for what is going on right now. BUT.....what I see being reported looks really strong.....and....broad based.

I believe we are going to end up with another VERY STRONG earnings period this time around. I also see more of the same for year end earnings that will be reported starting in January/February. Business is not going to suddenly hit the brakes.....the good earnings we have seen ALL THIS YEAR are going to continue and probably escalate over the next 2-4 quarters......minimum.....in my personal opinion.

The future is bright for stock investors....better go out and buy some sunglasses.

 

Now that we are at mid morning here in Texas and late morning in New York....it is time for the market day to really start.

It is time to get beyond the breathless sensationalism and insanity of this morning and evaluate the Google and other earnings for what they really were.....good BEATS.

It is time for more astute investors to step in and take control of the market direction today.

I continue to be fully invested for the long term as usual.....that is my contribution to the markets today.

 

Ok....moving on.

A nice fat loss for me today. I had a single stock up today.....MSFT. I also got beat by the SP500 by 1.13%.

 

The good news......the earnings BEATS continue to pile up.

Meta stock rises 4% as it beats earnings estimates
The social media giant delivered above expectations for both its top and bottom lines.

https://finance.yahoo.com/news/meta-stock-rises-4-as-it-beats-earnings-estimates-204612743.html

IBM's third-quarter results beat estimates on resilient software demand

https://finance.yahoo.com/news/ibms-quarterly-revenue-beats-estimates-201406171.html

It is a very good earnings reporting season. Unfortunately it is overshadowed by the negativity at this moment. The good news....sentiment can turn on a dime......and usually does.

 

The close today.

Stock market news today: Stocks clobbered as Nasdaq drops 2.5% amid Google's slide

https://finance.yahoo.com/news/stoc...aq-drops-25-amid-googles-slide-200253390.html

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

"Stocks got smoked on Wednesday as investors digested mixed earnings reports from Microsoft (MSFT) and Alphabet (GOOG, GOOGL) while Treasury yields pushed higher, putting more pressure on already strained tech stocks.

The Dow Jones Industrial Average (^DJI) fell a modest 0.3%, but the benchmark S&P 500 (^GSPC) tumbled almost 1.5% and the Nasdaq Composite (^IXIC) dropped nearly 2.5% in its worst day in eight months. The S&P 500 and Nasdaq closed at their lowest levels since May.

Alphabet shares slid more than 9% after the Google parent beat on earnings and revenue but fell short in its cloud business. By contrast, Microsoft stock was a rare bright spot for the market, as it popped 2% after its own double beat showed its bets on AI were paying off for its cloud segment.

Other megacaps lost ground as the mixed picture sapped some faith in Big Techs, which have powered gains in stocks this year. Amazon stock (AMZN) and Facebook parent Meta (META) — which reports results after the close Wednesday — were both down more than 4%.

Tech stocks have borne the brunt of pressure from surging Treasury yields, which rose again early Wednesday after stabilizing somewhat. The 10-year yield (^TNX) climbed above 4.9%, while the 30-year yield (^TYX) advanced above the 5% level.

MY COMMENT

One of those days.....oh well. that is the life of a long term investor.

 

If earnings count for anything....anymore....we might be in for a good bounce-back market tomorrow with the good BEATS by META and IBM in the big cap tech world.

We will get more after the bell tomorrow with AMZN reporting. Of interest to me is HON also reporting tomorrow.

Regardless....TIME is on my side....since I consider my time horizan as about 20+ years based on family longevity. It is nice for me that ALL my market money is not needed for anything over the rest of my lifetime. I bet my kids like it too.....as they contemplate inheritance some day..

 

Can you believe this?

Alphabet’s stock has its worst day since start of the Covid pandemic in March 2020

https://www.cnbc.com/2023/10/25/alp...cloud-miss-as-investors-praise-microsoft.html

"Alphabet shares fell the most on Wednesday since the start of the Covid pandemic after revenue in the company’s Google Cloud unit trailed analyst estimates.

The stock closed down 9.5% to end at $125.61. It marked its steepest drop since a 12% slump on March 16, 2020, the early days of the pandemic shutdowns.

Wednesday’s plunge came even after Alphabet beat Wall Street expectations for both revenue and earnings per share. Its cloud miss was a stark contrast to Microsoft’s earnings, which showed accelerating growth in the company’s Intelligent Cloud business. Google posted cloud revenue of $8.41 billion, compared to Street Account estimates of $8.64 billion."

My comment

Click on the link for the rest of the article.

This makes me laugh......it actually puts me in a good mood in spite of the close today. Can you believe that this little micro-portion of earnings is the cause of the worst drop in GOOGLE stock since the start of the pandemic?

Consider everything that occurred during and since the pandemic. Is this TINY earnings blip.......a small part of a very good earnings BEAT....really justification for the worst day in nearly.......three and a half.....years for GOOGLE?

SHOCKING.......and too funny to be true.

 

Got my earnings beat from HON......with a price bump today.

Honeywell Earnings Are Good. The Stock Isn’t Up.

https://www.msn.com/en-us/money/top...sn-t-up/ar-AA1iQEW5?ocid=finance-verthp-feeds

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

"Industrial firm Honeywell International reported third-quarter earnings that beat estimates. Guidance was fine, too.

After a relatively weak year for Honeywell stock (ticker: HON), investors will be hoping for a post-earnings bounce. They might not get it. Investors can blame the market.

Honeywell earned $2.27 per share on sales of $9.3 billion. Wall Street had expected earnings of $2.23 per share on sales of $9.2 billion. A year ago in the 2022 third quarter, Honeywell earned $2.25 per share on sales of just under $9 billion.

Honeywell also narrowed the earnings-per-share guidance range for 2023 to $9.10 to $9.20, keeping a midpoint of $9.15. That implies fourth-quarter earnings per share of about $2.60, while the consensus estimate is just under $2.60, according to FactSet.

Sales for 2023 are still expected to be about $37 billion, up about 5% from 2022 on a comparable basis.

Honeywell’s long-term goal is to grow sales 4% to 7% a year on average. This year will be at the lower end of that range, partly because the global industrial economy is relatively weak.

Management’s goal for segment operating-profit margins is 25%. This year, Honeywell is expected to produce average profit margins of about 22.5%.

The third quarter is also the first quarter of a new reporting structure for the company. Honeywell’s four operating segments are now Aerospace Technologies, Industrial Automation, Building Automation, as well as Energy and Sustainability Solutions.

The segments are similar to its previous business units, but part of the energy business is being moved to Industrial Automation. The changes will make comparability a little harder for a couple of quarters.

Through Wednesday’s close, Honeywell stock is down about 6% over the past 12 months, while the S&P 500 and Dow Jones Industrial Average are up about 9% and 4%, respectively.

It’s tough to blame all the underperformance on the company. Honeywell has beaten Street estimates in this year’s first, second, and third quarters. It raised guidance after the first and second quarterly reports.

RBC analyst Deane Dray noted in a preview report that Honeywell stock has underperformed those of peers by a couple of percentage points over the past few weeks, and shares are at the lower end of their historic valuation range."

MY COMMENT

A nice beat for HON. Sooner or later the beats that are piling up will make a difference. Perhaps today is the start of the process.

 

The economic story of the day.

GDP: US economy grows at fastest pace in nearly two years

https://finance.yahoo.com/news/gdp-...stest-pace-in-nearly-two-years-123246049.html

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

"The US economy grew at its fastest pace in nearly two years during the past three months, once again defying predictions for a slowdown as many expected the Federal Reserve's monetary tightening to constrain the American consumer.

The Bureau of Economic Analysis's advance estimate of third quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 4.9%during the period, faster than consensus forecasts.Economists surveyed by Bloomberg estimated the US economy grew at an annualized pace of 4.5% during the period.

The reading came in higher than second quarter GDP, which was revised down to 2.1%.

The GDP release highlights the resilience of the US consumer despite ongoing concerns of a slowdown. But many economists see this as the high water mark for economic growth before the credit tightening induced by the Federal Reserve's interest rate hikes and the recent rise in bond yields grabs hold of business development and consumer spending.

"Factoring tighter credit conditions, the restart of student loan payments, uncertainty regarding the lagged impact of monetary policy and a fragile global economic backdrop, real GDP growth is likely to drift below trend for several quarters," EY chief economist Greg Daco wrote in a research not prior to Thursday's release. "We foresee real GDP growing a muted 1.4% in 2024 following expected growth of 2.4% in 2023."

The key question for investors will be if the Fed has already tightened enough to bring the economy down from its hot third quarter, as Federal Reserve Chair Jerome Powell recently noted the central bank will need to see slower economic activity to ensure prices continue to cool.

"We certainly have a very resilient economy on our hands,” Powell said in a discussion at the Economic Club of New York. “Many forecasts called for the US economy to be in recession this year. Not only has that not happened; growth is now running for this year above its longer-run trend. So that's been a surprise.”"

MY COMMENT

I will NEVER bad-mouth a good economy. This strong GDP report shows what most regular people already know......in spite of what the experts continue to push. The economy is strong in general. People are buying things and have money.

The recession they were pushing.......nope....not going to happen.

You have to love all the experts....wrong on earnings time after time....wrong on the economy....wrong on the recession.

In similar fashion.....the markets right now....are wrong. There is simply little to no justification for the current negativity. But you cant fight short term sentiment. You just have to wait it out.