The Long Term Investor

A good day for me today so far. I am about to leave for my board meeting today. I will be back before the close and am expecting....hoping...to see a market that rallied into the close in anticipation of the earnings tomorrow.

 

Here is yet another good economic indicator today. Recently over the last months the VAST, VAST, VAST, majority of economic data has been very good......on the inflation front. I would be very surprised to see inflation increasing or the economy overheating. In fact....I believe the FED is dropping the ball by doing nothing.....they should be considering a rate cut in the next few months.

Job openings fall more than expected in March, hover near 4-year low

https://finance.yahoo.com/news/job-...in-march-hover-near-4-year-low-150538649.html

 

Ok I am out of here.....MAKE ME SOME MONEY.

 

Markets are on a little GREEN roll right now. Another good green day for the SP500 today.....SIX days in a row....the longest win streak since July.

S&P 500 futures are little changed after index posts longest win streak since November

https://www.cnbc.com/2025/04/29/stock-market-today-live-updates.html

You guys made me some money today.....a nice medium gain. I was in the green and had six of my nine stocks UP today.....although....I did get beat by the SP500 by 0.09%. My three stocks that were down today....NVDA, GOOGL, and AMZN.

We are off to a good start this week.....perhaps we have broken the back of the correction.

 

VERY happy to see this since......the WALL STREET CROWD....are wrong more often than not.

Why Wall Street is wary of the stock market rally

https://finance.yahoo.com/news/why-wall-street-is-wary-of-the-stock-market-rally-201631809.html

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

"Stocks have nearly recovered all their losses since President Trump's April 2 tariff announcements. But Wall Street strategists aren't confident the rally will keep pushing higher.

"Unlike at the [market] lows, there is much less 'bad news' priced into the market, while the current outlook remains highly uncertain," Truist co-CIO Keith Lerner wrote in a note to clients on Monday. "There is less of a buffer should markets receive some bad news."

Since the stock market bottomed on April 8, the S&P 500 (^GSPC) has risen 11.5%, the Nasdaq Composite (^IXIC) has gained about 14.4%, and the Dow Jones Industrial Average (^DJI) is up about 7.7%. President Trump's 90-day tariff delay on April 9 sparked the rally.

But as stocks have drifted higher since then, equity strategists have pointed out that the market narrative hasn't changed much.

Uncertainty around tariff policy remains rampant. The outlook for corporate earnings is still muddled. And economists argue the possibility of a US recession has been rising. This could mean stocks don't have much more upside until another catalyst emerges.

Morgan Stanley chief investment officer Mike Wilson wrote in a note to clients on Sunday that he sees the S&P 500 trading in a range of 5,000 to 5,500 in the near term. Wilson believes a tariff deal with China that "materially" brings down the effective tariff rate could be what is needed to push the benchmark index above 5,500 for a sustained period. Interest rate cuts from the Federal Reserve —assuming they aren't driven by economic data that indicates risk of recession — and upward revisions to earnings could also power stocks higher.

"Until we see clearer risk-on shifts in these factors, range trading is likely to continue," Wilson said.

After two years of debating how much higher the bull market could run, equity strategists now believe the risks in the stock market are likely to the downside.

On Tuesday, HSBC became the 12th Wall Street research team tracked by Yahoo Finance to cut its S&P 500 year-end target since the start of Trump's trade war. Five of those firms see the S&P 500 ending the year essentially flat from current levels or lower.

HSBC head of Americas equity strategy Nicole Inui cut her S&P 500 year-end target to 5,600 from a prior forecast of 6,700. Inui recommended clients position their portfolios "defensively" amid the risks of higher inflation, slower growth, and possibly a recession.

"We expect the market narrative will flip-flop between recession and stagflation until tariff turmoil subsides, the Fed starts easing, and/or inflationary pressures fail to build up," Inui wrote.

After the recent drawdown, Inui believes the market has priced a "shallow" recession or a potential bout with "mini" stagflation, where inflation increases and economic growth weakens. But the prevailing concern would be that economic growth deteriorates more than initially thought. Then, as Inui wrote, the "recession trade will be on." History indicates that a more pronounced downturn in the economy would mean stocks have further to fall.

Inui's research shows the S&P 500 typically falls closer to 30% from recent peaks during a severe recession. Thus far this year, the S&P 500 has fallen 18.9% from its February peak.

MY COMMENT

First.....WTF does this even mean......"Unlike at the [market] lows, there is much less 'bad news' priced into the market, while the current outlook remains highly uncertain,".....sounds pretty much like financial drivel to me. Basically a broad meaningless statement that is border line on making any sense at all.

Second......quoting a few analysts or strategists from WALL STREET is hardly indicative of anything. These people.....the "experts".....are usually wrong. They dont have any clue or ability to predict the future of the markets especially over the course of the rest of the year. Wall Street has a dismal record of predicting anything.

Tthis statement is just CRAZY:

Inui's research shows the S&P 500 typically falls closer to 30% from recent peaks during a severe recession. Thus far this year, the S&P 500 has fallen 18.9% from its February peak

I hate to tell them but the SP500 as of today is down by ONLY 9.5% from the February market peak. Combining data on the typical fall from peaks in a SEVERE RECESSION.....to....where the SP500 is right now.....and using an incorrect percentage that is double the actual percentage.....is an inaccurate and meaningless comparison.....since.....we are not and have not even been in a recession at all.

Just much meaningless BLATHER from these "experts"....as usual.

 

By the way I will be around tomorrow since my studio day has been changed to May 8th.

 

I will IGNORE this content.....but....the headline says it all. If true we will see more and more of these deals start to fall in line over the next months.

Lutnick: US Has a Trade Deal; Can't Name Country Yet

https://www.newsmax.com/finance/streettalk/howard-lutnick-trade-deal/2025/04/29/id/1208827/

The article says that the:

".......administration has reached one trade deal already and is waiting for approvals from that country before announcing it, U.S. Commerce Secretary Howard Lutnick said in an interview with CNBC Tuesday.

"I have a deal done ... but I need to wait for their prime minister and their parliament to give its approval," Lutnick said."

 

Here is the media story of the day.......GDP. A mild reading......as the FED sits mute and does nothing. believe the FED is way behind the curve of what is going on since ALL of this data occurred well before the major tariff turmoil that started April second. this data is for January 1 through the end of March, 2025.

This is yet another indication along with the VAST majority of economic data over the past three months.......that the FED should soon do a rate cut or two. It is also an indication that inflation is moderating in the REAL economy. I dont consider this shocking or surprising news.......in any event as a stock investor.

I am sure the media fear-mongers will be out in force......as usual.

U.S. economy shrank 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

https://www.cnbc.com/2025/04/30/gdp-q1-2025-.html

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

"Key Points

• Gross domestic product fell at a 0.3% annualized pace, largely pushed by a surge in imports ahead of President Donald Trump’s tariffs.
• Imports soared 41.3%, driven by a 50.9% increase in goods. Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse.
• The report provided cross signals for the Fed. While the negative growth number might push the central bank to consider lowering interest rates, inflation readings could give policymakers pause.

The U.S. economy contracted in the first three months of 2025, fueling recession fears at the start of President Donald Trump’s second term in office as he wages a potentially costly trade war.

Gross domestic product, a sum of all the goods and services produced from January through March, fell at a 0.3% annualized pace, according to a Commerce Department report Wednesday adjusted for seasonal factors and inflation. This was the first quarter of negative growth since Q1 of 2022.

Economists surveyed by Dow Jones had been looking for a gain of 0.4% after GDP rose by 2.4% in the fourth quarter of 2024. However, over the past day or so some Wall Street economists changed their outlook to negative growth, largely because of an unexpected rise in imports as companies and consumers sought to get ahead of the Trump tariffs implemented in early April.

Indeed, imports soared 41.3% for the quarter, driven by a 50.9% increase in goods. Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse in subsequent quarters. Imports took more than 5 percentage points off the headline reading. Exports rose 1.8%.

“Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this. Growth has simply vanished,” said Chris Rupkey, chief economist at Fwdbonds.

Consumer spending slowed during the period but was still positive. Personal consumption expenditures increased 1.8% for the period, the slowest quarterly gain since Q2 of 2023 and down from a 4% gain in the prior quarter.

Moreover, private domestic investment soared during the period, rising 21.9%, primarily driven by a 22.5% surge in equipment spending that also could have been tariff driven.

“No surprise that GDP took a hit in the first quarter, mainly because the balance of trade blew up as companies imported goods like crazy to front-run tariffs. The more telling number for the future of the expansion was consumer spending, and it grew, but at a relatively weak pace,” said Robert Frick, corporate economist with Navy Federal Credit Union. “That’s concerning, but not alarming as it could have been due to bad weather and a spending surge at the end of last year.”

The report provided cross signals for the Federal Reserve ahead of its policy meeting next week. While the negative growth number might push the central bank to consider lowering interest rates, inflation readings could give policymakers pause.

The personal consumption expenditures price index, the Fed’s preferred inflation measure, posted a 3.6% gain for the quarter, up sharply from the 2.4% increase in Q4. Excluding food and energy, core PCE was up 3.5%. Fed officials consider the core reading a better gauge of long-term trends.

A related reading known as the chain-weighted price index, which adjusts for changes in consumer behavior and other factors, rose 3.7%, well above the 3% estimate.

Markets still are pricing in a rate cut at the June meeting and a total four moves by the end of the year, a potential indication that the Fed will prioritize economic growth over inflation.

Also Wednesday, the Bureau of Labor Statistics reported that its employment cost index rose 0.9% in the first quarter, in line with expectations.

While the economy is still adding jobs and consumers are still spending, the GDP report raises both the danger of recession and the stakes for Trump as he negotiates deals with U.S. trading partners.

The traditional rule of thumb for recession is two consecutive negative quarters, though the official arbiter, the National Bureau of Economic Research, uses a definition of “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”

Markets next will look for the BLS nonfarm payrolls data, to be released Friday. Payrolls processing firm ADP reported Wednesday that private hiring rose just 62,000 in April."

MY COMMENT

I have NO concern for these numbers or if we end up in a mild recession.....even if we refuse to call it a recession as we have seen in the past.

As to these numbers I consider them......GASP.......LOL.....TRANSITORY. All will become clear as we transition over the remaining months of 2025 into a more sustainable economy.

I am happy to see consumer spending and personal consumption still supporting the economy. to a large degree this number is due to technical factors inherent in how imports impact the calculation of GDP......and this should be a temporary event.

BUT.....have no doubt.....the media will be out FEAR MONGERING in full force for the next weeks. it will be MASSIVE DOOM&GLOOM beyond anything previously seen. No doubt a good percentage of it will be driven by POLITICS and BIAS.

As I said.....the FED sits MUTE doing nothing. A HUGE mistake on their part as they practice passive/aggressive economics.

As an investor I have ZERO concerns. It will be fun as usual to watch the CIRCUS.

 

AND....yes it is possible to talk yourself into a mild recession.

 

HERE are the markets today.....at the open.

Dow drops 600 points after first-quarter GDP contracts, raising recession fears

https://www.cnbc.com/2025/04/29/stock-market-today-live-updates.html

 

I was rushing to get these posts up regarding the markets today.

I have to now leave to go help my wife with her horses at the barn. We are trying to get everything all done prior to her cataract surgery tomorrow. So.....my day will be taken up with horses.......and NOT.....markets.

GOOD LUCK.....let the DRAMA begin. Glad I will miss it all.

 

EXACTLY SMOKIE.

AND....I find this little article much more accurate and REALISTIC regarding the GDP data today.

US economy contracts at 0.3% rate in Q1, first GDP pullback in 3 years

https://finance.yahoo.com/news/us-e...-first-gdp-pullback-in-3-years-123544859.html

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

"The US economy contracted for the first time in three years to start 2025 as a surge in imports dragged down GDP and prices increased more than forecast.

The Bureau of Economic Analysis' advance estimate of first quarter US gross domestic product (GDP) showed economic growth contracted at an annualized rate of 0.3% during the year's first three months, more than the 0.2% decline expected by economists surveyed by Bloomberg. The reading came in significantly lower than the 2.4% rate of growth seen in the fourth quarter of 2024.

This marked the first quarter of negative GDP growth since the first quarter of 2022.

"While a decline during an expansion is unusual, it's not unheard of and the economy isn't in a recession," Oxford Economics chief US economist Ryan Sweet wrote in a note to clients on Wednesday.

The decline was driven by a large surge in imports, which are a subtraction in the calculation of GDP. Imports surged at an annualized rate of 41.3% in the first quarter as companies front-loaded orders ahead of anticipated tariffs from the Trump administration. The surge in imports was good for a -5% contribution to the GDP calculation in the first quarter.

Final sales of goods to domestic purchasers, another sign of demand in the economy, grew at a 3% annualized rate in the first quarter, above the 2.9% seen in the fourth quarter of 2024.

"Trade was a huge influence," PNC Financial Services Group chief economist Gus Faucher told Yahoo Finance. "We saw companies bringing in a lot of imports to try to get ahead of tariffs. We saw a huge build in inventories. But when you look at underlying demand consumer spending growth, that was still pretty solid."

The "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.5% in the first quarter, above estimates for 3.2% and above the 2.6% seen in the prior quarter.

The report measures economic activity through the first three months of the year ending in March, meaning it covers how the US economy functioned ahead of President Trump's tariffs but not after the president's April 2 announcements that increased the effective tariff rate to its highest level in more than a century.

Economists and the Federal Reserve have been anticipating tariffs to push inflation higher and weigh on economic growth in the coming quarters.

"Overall this is indicating that tariffs are having an impact on the economy, that it's been negative so far in 2025," Faucher said. "And they're likely to remain negative through the rest of this year."

Stocks fell following the release as investors digested the quarterly economic growth update and a weaker-than-expected reading of private payroll additions for April. Data from ADP showed private payrolls grew by just 62,000 in April, far fewer than the 115,000 economists expected.

In mid-morning trade, the benchmark S&P 500 (^GSPC) dropped around 0.9%, while the tech-heavy Nasdaq Composite (^IXIC) sank 1.4%. The Dow Jones Industrial Average (^DJI) pulled back about 0.6% after the blue-chip index notched its longest win streak of 2025."

MY COMMENT

Is it really accurate to calculate GDP in this way? Who knows.

The reality......imports.....knocked 5% off the GDP figure.

I suggest that the item below is a more accurate measure of where the economy is right now....versus this GDP number.

"Final sales of goods to domestic purchasers, another sign of demand in the economy, grew at a 3% annualized rate in the first quarter, above the 2.9% seen in the fourth quarter of 2024."

 

In any event as a long term investor I simply.......DONT CARE.

You know I post on here nearly every day in spite of being a total LONG TERM INVESTOR.

In my typical daily reading I first look for any content to post that deals with long term investing. After that I look for any short term stories or events that might have relevance to long term investing.

After that I might give up and post some short term story that I think is relevant to investors in general.....including long term investors.

I also post anything I can where my view is contrary to the fear-mongering short term view of the financial media.......with a goal of encouraging long term investors to hang in there through all the short term NOISE that is the modern media.

THAT IS IT......I DO NOT CARE about all the short term DRAMA.