Looking around at some of the sectors so far today and all the green is in...real estate, utilities, materials, industrials, health, financials, and energy. Small/Mid caps still holding well into the green.
As to the above, I don't have any sector tilts or anything weighted to small caps. I just thought it was an interesting look at today. Although, I did nibble at AAPL back earlier in the year when they were getting kicked around while everything else was taking off.
Personally I have ZERO interest in the small cap side of the markets. I prefer to hedge my market bets and go with companies that are more established and more proven. I also prefer to make money right away from big cap growth companies that are being paid to basically mint money. Today is one of those....SILLY...market days. No rational basis for the sell off today. BUT.....I can afford to lose a little bit of the BIG gains that I have so far this year. I see the market reaction today......especially COST, NVDA, and the rest of the tech big cap stocks to the CPI as.....money in the bank. That money will come to me now or it will come to me later. Either way it is fine with me.
A meaningless day for me in the markets today. I was RED, RED, RED. All but one stock.....HD. Thank you for bucking the trend HD. I also got beat by the SP500 today by 2.87%. BUMMER. The most ridiculous stock for me today.....COST. They just added over $300MILLION to their bottom line in one swoop with the membership increase. AND today.....they are down by $37.72 or 4.27%. Talk about a dumb market. There is nothing about COST that makes them sensitive to lower inflation or lower interest rates. Their customers........I know from personal and long time experience.....are not there on a short term basis. Their customers are long term, thick and thin, COSTCO fans and shoppers. It is not going to impact their business one iota if rates drop or inflation goes to zero. The drop today is driven by an obvious false narrative......that lower inflation or rate cuts will be a negative. Anyone that believes this is not familiar at all with COSTCO customers. I have news for whoever is pushing this BS....COSTCO is not a discount store. They are not WMT. What I said above is one BIG reason why I like COST and have been a shareholder for decades. Their customers are extremely loyal and they are not going anywhere. Simply the best warehouse/membership store in the world.
Here is the data: "We estimate the fee increase will provide roughly $350 million in incremental sales and operating profit over the next two years, with two-thirds flowing through the model in fiscal 2025 and the remainder primarily in the first half of 2026,” William Blair analyst Phillip Blee said in a Thursday note." https://www.retaildive.com/news/costco-raise-membership-fee/721087/ MY COMMENT AND....that $350MILLION will flow into the company every year after.
I dont buy the "rotation" stuff that is being spread today in the media. I see it as simply one day driven by short term and mostly professional "traders". It will take weeks or months to see if the retail investors are following any of this "stuff". BUT....even if I am wrong....it is still a positive sign for the bull market and STILL for stocks including the big cap growth companies. Thursday was a historically strange day in the stock market. That may be good news https://www.cnbc.com/2024/07/11/thu...n-the-stock-market-that-may-be-good-news.html (BOLD is my opinion OR what I consider important content) "Key Points The Russell 2000 rose more than 3%, while struggles for Big Tech stocks weighed on the S&P 500 and Nasdaq Composite. Much of the recent rally has been driven by large tech stocks, leading investment pros to worry about a narrow group of market leaders. The split trading came after the June report for the consumer price index early Thursday showed that headline inflation actually declined last month and is now up about 3% over the past year. Wall Street saw a dramatic shift in market trends on Thursday, with winning and losing stocks swapping places for a day. It may turn out to be just what the rally needs to keep going. The Russell 2000 small-cap index, which has struggled to find its footing all year, jumped more than 3% on Thursday. At the same time, every stock in the so-called “Magnficient 7” fell, including a nearly 5% decline for Nvidia and a 2% drop for Apple, which dragged down both the S&P 500 and Nasdaq Composite. Bespoke Investment Group shared two statistics on the social media site X to demonstrate how rare it is to have that type of split. Thursday was just the second day since 1979 when the Russell 2000 rose more than 3% while the S&P 500 declined. The Nasdaq Composite was underperforming the Russell 2000 by 4.9 percentage points, the second-biggest daily gap on record. The other time came in November 2020, right after Pfizer shared positive results from a Covid-19 vaccine trial. And while the major market averages and many individual 401k accounts may show a decline for the day, this odd set of results could be a positive sign for the market. Much of the recent rally has been driven by large tech companies, leading investment pros to worry about a narrow group of stock market leaders. “Today’s an important day,” Ed Yardeni of Yardeni Research said on CNBC’s “Closing Bell. “This is the day where investors are starting to rotate out of the Magnificent 7 into the rest of the market. I don’t think this is going to continue to pull the S&P 500 down — I think there’s going to be enough money to keep the leading stocks that have done so well fairly elevated, but I think we are going to see more gains in the S&P 493, as well as in the small and mid-cap stocks,” he added. The split trading came after the June report for the consumer price index early Thursday showed headline inflation declined last month and is now up about 3% over the past year. That bolstered confidence that the Federal Reserve will begin to cut interest rates as soon as September. Fed Chair Jerome Powell indicated in Congressional testimony this week that the central bank was aware that holding rates high for too long could hurt the economy. “Investors are rotating: They’re jumping from the large-cap tech lily pad on to the mid- and small-cap pads, along with real estate,” said Sam Stovall, chief investment strategist at CFRA Research, told CNBC. “They had been waiting for maybe not a guarantee, but certainly a confirmation that the Fed is likely to start to cut interest rates, and will be doing so not in reaction to a recession.” Activity in the bond market supports this idea. Yields on U.S. Treasurys were down across the board on Thursday, meaning government bond prices were rallying. “You’ve got positive CPI on the back of a slightly dovish Powell,” Ross Mayfield, investment strategy analyst at Baird, told CNBC. “Rates are down big, and you have kind of a rotation trade. But the problem with the market being so concentrated in big tech is that that rotation trade can look like a surface level negative. And I think we’re seeing some of that today,” he said. To be sure, there have also been signs in recent months that the U.S. economy is softening. A slow growth or recessionary environment would be tough for small cap stocks, which tend to be more economically sensitive and domestically-oriented than larger companies." MY COMMENT I am.....ALL GOOD....with either situation. Situation one....today is an oddball result and does not indicate anything at all. Situation two....there will be a rotation of SOME money to small and mid caps. Either way the bull market will continue and I will make money. WHATEVER.
Yeah, I get it. I don't particularly follow it closely either. I will occasionally look at some of the different sectors on odd days like today to see what is up/down. That's when I noticed the small caps and some of the other stuff actually doing well. The distinction between the two today was quite obvious. This makes sense to me. The smaller companies have struggled with the higher/longer rates and do not have the huge treasure chests of cash to operate from like many of our popular large caps. The large companies can and have weathered it with ease. Smaller businesses operate on a much tighter budget. Now that it appears rates will likely come down in the not too distant future...more room to operate and increase profit...lending for their hopes of expansion/new projects will be cheaper. In turn, some investors believe they will see some growth in that area since their prices have been lagging and at a bit of a discount. I think it is a good thing for the market. Then again, this is nothing new.
Earnings...some of the banks start off tomorrow and early next week. Other companies will join as well and then it will really start rolling after that.
After today I wonder if anyone will even mention earnings? LOL. AND....just to screw with everyone's head.....futures are simply flat. I wonder if today will simply end up being like the other.....BIG DROP days......that we have seen happen once in a while out of nowhere over the past six months?
Here are my current thoughts on yesterday. I call BS on the rotation "stuff" that much of the media is putting out there as an excuse. REAL rotations dont happen explosively in a single day. Real rotations are rational. There was NOTHING rational about that huge drop and sell off yesterday. COST is the poster boy of irrationality yesterday as was basically the entire big cap market. AND.....we have seen these sorts of days a few times over the last 6 months. They come out of nowhere....usually when there is some news item that triggers traders......and last one day. My belief....these events are massive.....AI TRADING PROGRAM.....drops caused my ALL the AI trading platforms acting in concert based on some story line that sweeps through the Wall Street crowd and is than picked up by the media. It is an example of how ALL the AI TRADING PLATFORMS are basically the same and operate in concert on particular days. It is simply LEGAL MARKET MANIPULATION on a massive scale.....assuming that the various AI trading platforms are not intentionally acting in concert and that their programing BIAS was not built into the systems by QUANT COLLUSION across various companies. If it is intentional it is ILLEGAL. What we saw yesterday was just too IRRATIONAL and SUDDEN to be a real rotation. It was highly abnormal market action. Will we see a shadow of yesterday over the markets today....perhaps.
AND....here is the schizoid economic news of the day. Wholesale prices rose 0.2% in June, slightly hotter than expected https://www.cnbc.com/2024/07/12/who...nt-in-june-slightly-hotter-than-expected.html (BOLD is my opinion OR what I consider important content) "Key Points The producer price index is now up 2.6% year over year. In June, an increase in the price for services offset a decline for goods. The reading is an increase from the May number, which was also revised higher. A measure of wholesale prices rose more than expected in June as Wall Street assesses when the Federal Reserve will feel comfortable cutting interest rates. The producer price index rose 0.2% last month, the Labor Department’s Bureau of Labor Statistics reported on Friday. Economists surveyed by Dow Jones were expecting a 0.1% increase for the index. PPI is now up 2.6% over the past year. The PPI is a gauge of prices that producers can get for their goods and services in the open market. In June, an increase in the price for services offset a decline for goods. The reading is an increase from the May number, which was also revised higher. Friday’s report said that the index was unchanged in May as compared to a decline of 0.2% in the original release. The hotter-than-expected PPI reading runs counter to recent data that shows inflation declining, though economists and investors tend to put more weight on the consumer-focused inflation readings. Friday’s report comes shortly after the June consumer price index came in cooler than expected on Thursday. The CPI actually showed that headline inflation declined on a monthly basis and now sits at 3% year over year. The central bank’s next policy meeting is at the end of July, where it is widely expected to hold rates steady. Traders have increasingly dialed in on the September meeting as the likely time for the first rate cut. The Fed’s preferred inflation reading is the personal consumption expenditure price index. The June PCE data is slated for release on July 26." MY COMMENT OK. Enough of this economic BS. Parsing this data on a micro level is simply stupid. AND....as we see above by the revision of May data......a big revision......this stuff is worthless.
Here is what actually counts today for investors. JPMorgan Chase tops second-quarter revenue expectations on strong investment banking https://www.cnbc.com/2024/07/12/jpmorgan-chase-jpm-earnings-q2-2024.html Citigroup tops expectations for profit and revenue on strong Wall Street results https://www.cnbc.com/2024/07/12/citigroup-c-earnings-q2-2024.html
Here is the short term story line of the markets today. Stocks open slightly higher as investors digest bank earnings, deal with market rotation https://www.cnbc.com/2024/07/11/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "U.S. stocks were higher on Friday after the S&P 500 had its worst session since April, as investor evaluated the start of second-quarter earnings reporting season. The S&P 500was higher by 0.1%. The Dow Jones Industrial average added 67 points, or 0.1%. The Nasdaq Composite was up 0.2%. Banks kicked off earnings results Friday. Wells Fargo shares tumbled 6% after the bank said net interest income, a key measure of lending profitability for banks, fell short of expectations in the second quarter. The bank also continues to see net interest income falling from 7% to 9% this year. JPMorgan shares were lower even as the bank posted second-quarter revenue higher than Wall Street expectations on a jump in investment banking fees. Citi stock advanced nearly 3% after beating on the top and bottom line in the second quarter. A reading of wholesale inflation came in slightly hotter than expected on Friday, but Wall Street largely ignored those figures after a drop in the consumer price index a day earlier that spurred optimism the Federal Reserve would cut rates in September. During Thursday’s session, the broad market index closed 0.88% lower, and the tech-heavy Nasdaq Composite lost 1.95%. Both indexes broke seven-day winning streaks and they suffered their worst day since April 30. Investors sold their Big Tech winners in a major market rotation, pushing Nvidia lower by 5.6% and leading to a 4.1% decline for Meta Platforms. The 30-stock Dow was the outperformer among the three major averages, inching higher by 0.08%. Nvidia was marginally higher in trading Friday. Investors’ move out of tech stocks on Thursday was spurred by a consumer price index report that showed a 0.1% monthly decline in June. Traders flocked to areas of the market that will benefit from Federal Reserve interest rate cuts, including small-cap stocks. The Russell 2000 jumped about 3.6%. The iShares Russell 2000 ETF was up 1% Friday as the rotation continued a bit. The market rotation during the session is “a taste of what’s going to happen the second half of the year,” Warren Pies, strategist and co-founder of 3Fourteen Research, said on CNBC’s “Closing Bell.” The upcoming corporate earnings season and a credit expansion narrative will power the market to the end of the year, Pies added. “We’ve had a pretty strong economy in a lot of ways over the last few years, but there are pockets that are really restrained by Fed interest rate policy,” Pies said. He noted that as central bank policymakers cut rates, corners of the economy that have been “dormant,” such as existing home sales and new auto sales, will “reawaken.” On a weekly basis, the Dow is also beating the other two major averages, up nearly 1%. The S&P 500 is up 0.3% through Thursday’s close, while the Nasdaq is down nearly 0.4%." MY COMMENT The open today and the market action right now with the SP500 and NASDAQ both green...... tells me that the rotation story-line is BS......as was the drop yesterday. BUT......after the IRRATIONALITY yesterday it is anyone's guess how we end up the week today. At this point it looks like a good green day......but that is my "RATIONAL" view of a market that at times over the short term is simply CRAZY.
So.....with nothing new in the news or commentary today....I will just sit and watch the day progress and take whatever it gives me. YES.....another hard day of doing nothing.
I think I will abandon watching the markets for today. I have to go chart out nine more songs for tonight. I finished off 21 earlier in the week......9 to go. I expect it will take me about 1 to 1.5 hours to get it done. Most of it I can do without an instrument in my hand.....just by ear.
I was always amazed how some people have a talent to play by ear. I went 6 years in primary music school when I was kid, played accordion, but never been able to play by ear. I think something like that can't be learned, you need to have a talent for music.
Looks like we had a ....BEAR MARKET...yesterday. Today we have a new BULL MARKET. LOL....Just kidding. I like how the media and traders like to call these one day events.....rotations....corrections....bear markets....bull markets....etc, etc. I still call BS on it all. A great market come-back.....for me.... from the "rotation" yesterday. EVERY one of my stocks is GREEN except for COST.......which is right on the border of going green. To be fair.....ALL....the averages are doing just fine today including the RUSSELL. There is no way to prove it........but I have no doubt about the BIG IMPACT of.....AI PROGRAM TRADING......on the day to day markets especially a day like yesterday. I am sure the big traders and big investment banks and hedge funds that use AI trading....have the data...but you will never see it. My personal little.....conspiracy theory. AND....if it gets too powerful.....it will destroy the markets. Not even the long term will be able to smooth it out anymore.
As to playing by ear......Strathmore.....in my case it was not an inborn talent. It was learned and polished over many years. I think for many people it is very difficult to do because they are classically trained and dont have any experience improvising....they are tied to charts and scores in their playing and thinking. I think anyone can learn it....it just takes time. Now I agree there are a few....very few...... people with perfect pitch that are born with a talent to hear something and just play it. Just like people with a photographic memory.
Speaking of earnings. Poor WELLS FARGO....they are the BOEING of banks. They have been shooting themselves in the foot for the past 15 or more years with all their SCANDALS. In fact I think they might be worse than BA.....and....that is pretty bad. Wells Fargo shares tumble after net interest income falls short of estimates https://www.cnbc.com/2024/07/12/wells-fargo-wfc-q2-2024-earnings.html
The broad big cap rally today. S&P 500 Climbs as 90% of Its Shares Push Higher: Markets Wrap https://finance.yahoo.com/news/asian-stocks-gain-cpi-japan-225337356.html
