The markets the last few days are just SILLY. Just like yesterday if there is any rationality I expect the markets to be green by the close...except for the DOW. BUT......combining the word...."rationality" and the short term market behavior....is SILLY in itself. All I can say is I sit here with a smile on my face typing.....mentally ignoring it all. Of course a big reason for that smile is the fact that NVDA is starting the day in the green with a nice gain. In addition I believe that at least 5-6 of my stocks are in the green right now. SO.....a happy start to the day for me. You know I saw a comment somewhere that PLTR is acting like a MEME STOCK. ACTUALLY.....the entire short term market......is acting like a MEME STOCK. It is like the entire financial media is nothing more than social media posts. There is little to no short term hard focus on actual news or actual fundamental analysis of the news. It is ALL drama based opinion. AND....much of that opinion is exactly the opposite of reality. The potential issue is......when or if...... this behavior starts to seep into the medium term or the longer term. In other words when the markets and investors become......IDIOCRACY......we will all be screwed. I am hoping that this will not fully happen in my remaining life expectancy. If I was younger, I would see this as the primary danger to the long term future of the markets.....along with....government.
A large loss for me today. MSFT, GOOGL and NVDA all down in the 2% to 4% range. I also lost out to the SP500 by 1.31%. And.....I was doing so well this week. Anyway....I think I am still up for the week....so I need a good day tomorrow to cap off the week.
Looking at MSFT, NVDA, and GOOGL news as I wait for COST earnings....I really dont see anything of significant. Just one of those days when they simply wanted to drop. What would be really STUPID is if the drop today was due to the Ten Year Yield being up early in the day. Here we have the largest companies in the world.....with ability to literally mint money....with billions in reserves....and, someone thinks they are interest rate sensitive? WTF.
HERE are the COST earnings. Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2024 https://investor.costco.com/news/ne...perating-Results-for-Fiscal-2024/default.aspx "Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first 36 weeks of fiscal 2024, ended May 12, 2024. Net sales for the quarter increased 9.1 percent, to $57.39 billion, from $52.60 billion last year. Net sales for the first 36 weeks increased 7.0 percent, to $171.44 billion, from $160.28 billion last year. Net sales were positively impacted by approximately 0.5 to 1.0 percent for the quarter from the shift of the fiscal calendar, as a result of the fifty-third week last year. The following comparable sales data reflect comparable locations year-over-year and comparable retail weeks. Net income for the quarter was $1.68 billion, $3.78 per diluted share. Last year’s third quarter net income was $1.30 billion, $2.93 per diluted share, which included a non-recurring charge to merchandise costs of $298 million pretax, $0.50 per diluted share, primarily for the discontinuation of our charter shipping activities. Net income for the first 36 weeks was $5.01 billion, $11.27 per diluted share, compared to $4.13 billion, $9.30 per diluted share, last year." MY COMMENT These look like good gains to me....but....I have no clue what the expectations were.
More on the COST earnings. Costco Q3 earnings beat all key metrics, after shares closed at an all-time high https://finance.yahoo.com/news/cost...res-closed-at-an-all-time-high-204841304.html (BOLD is my opinion OR what I consider important content) "Costco (COST) posted another bulk-sized quarter as consumers look for wallet-friendly prices on everyday essentials. On Thursday afternoon, the company reported net sales of $58.52 billion, compared to estimates of $57.98 billion. Its adjusted earnings of $3.78 also beat estimates of of $3.70. Same-store sales, excluding fuel, jumped 6.5%, led by its growing international business (up 8.5%), Canada (up 7.4%), and the US (up 6%). In the quarter, the wholesale retailer saw foot traffic go up year over year, beating the likes of Sam's Club (WMT) and BJ's Wholesale Club (BJ), according to Placer.ai. E-commerce is also a bright spot, surpassing expectations of an 11.5% year-over-year bump with a 20.7% increase. In the previous quarterly report, digital sales grew more than 18% year over year, which was powered by demand for gold bars, silver, and appliances, former Costco CFO Richard Galanti said then on the earnings call. Membership fees, a key revenue stream, came in line with estimates at $1.12 billion, a 7.6% increase compared to last year. A Costco Gold Star membership costs $60 per year, while an Executive Membership goes for $120. Some on the Street predicted last year that Costco would raise fees this summer. Shares of Costco are up 25% year to date, outpacing the S&P 500's (^GSPC) 10% gain, and closed at a record high prior to reporting its fiscal Q3 results on Thursday. "We continue to believe a premium valuation is warranted, given Costco's superior global unit growth prospects, leading competitive position, and track record of driving share gains," Oppenheimer analyst Rupesh Parikh wrote in a note to clients prior to the report, adding that "management can unlock even more shareholder value over time through driving alternative revenue streams." JPMorgan analyst Christopher Horvers wrote that the company's stock continues to benefit from a higher income audience, along with a long history of consistent market share gain. Wall Street is eager to hear how non-food categories like the jewelry department (including gold bars) performed, along with traditional strength from fresh food, led by meat and produce. This comes as consumers are looking for value in groceries. In April, grocery prices jumped 1.1% compared to last year but dropped 0.2% compared to March, per the US Bureau of Labor Statistics. The earnings rundown: Here's what Costco posted in its fiscal third quarter earnings, compared to Wall Street estimates: Net sales: $58.52 billion versus $57.98 billion Adjusted EPS: $3.78 versus $3.70 Total company comparable sales, excluding fuel: 6.5%, compared to 5.93% US same-store sales growth: 6% versus 5.51% Canada same-store sales growth: 7.4% versus 6.96% Other international: 8.5% versus 7.46% E-commerce growth: 20.7% versus 11.5% Membership fees: $1.12 billion versus $1.12 billion" MY COMMENT A very POWERFUL EARNINGS BEAT. Every category I see is a CLEAR BEAT. Now all we have to do is get past the press conference and the guidance which I believe is happening right now.
Of course COST is down by nearly 2% after-hours. Probably due to the EARNINGS BEAT being too big....that would make about as much sense. Of course....after-hours trading is extremely irrelevant. We will see the real picture tomorrow at the close.
Costco is crushing it this year... and on the 1 year and 5 year! May have a little 'sell the news' this morning after the pre ER runup but as for every thing W holds over the long term this is a very solid member of the portfolio. Its on my list to transition into when I grow up from my chip laden gambling pot. Let's see what Friday brings!
The story of the day.....short term...that is. The Fed’s preferred inflation measure rose 0.2% in April, as expected https://www.cnbc.com/2024/05/31/pce...ion-measure-rose-0point2percent-in-april.html (BOLD is my opinion OR what I consider important content) "Key Points The personal consumption expenditures price index excluding food and energy costs increased 0.2% in April and 2.8% from a year ago. Headline PCE rose 0.3% and 2.7%, respectively, in line with estimates. Personal income increased 0.3% on the month, matching the estimate, while spending rose just 0.2%. Inflation rose about as expected in April, with markets on edge over when interest rates might start coming down, according to a measure released Friday that is followed closely by the Federal Reserve. The personal consumption expenditures price index excluding food and energy costs increased just 0.2% for the period, in line with the Dow Jones estimate, the Commerce Department reported. On an annual basis, core PCE was up 2.8%, or 0.1 percentage point higher than the estimate. Including the volatile food and energy category, PCE inflation was at 2.7% on an annual basis and 0.3% from a month ago. Those numbers were in line with forecasts. Fed officials prefer the PCE reading over the more closely followed consumer price index, which the Labor Department compiles. The Commerce Department measure accounts for changes in consumer behavior such as substituting less expensive items for costlier alternatives, and has a wider scope than the CPI. “The core index came in at 2.8%. That’s fine, but it’s been trading in a range for five months now, and that’s pretty sticky to me,” said Dan North, senior economist for North America at Allianz Trade. “If I’m [Fed Chair Jerome] Powell, I’d like to see that start moving down, and it’s barely creeping. ... I’m not reaching for the Pepto yet, but I’m not feeling great. This is not what you want to see.” A 1.2% rise in energy prices helped push up the headline increase. Food prices posted a 0.2% decline on the month. Goods prices rose 0.2% while services saw a 0.3% increase, continuing a normalization trend for an economy in which services and consumption provide much of the fuel. Along with the inflation reading, Friday’s release included data about income and spending. Personal income increased 0.3% on the month, matching the estimate, while spending rose just 0.2%, below the 0.4% estimate and off March’s downwardly revised 0.7%. Adjusted for inflation, the spending numbers showed a 0.1% decline, due in large part to a 0.4% decrease in spending on goods and just a 0.1% rise in services expenditures. Market reaction following the release saw futures tied to major stock averages rising while Treasury yields moved lower. “The PCE Price Index didn’t show much progress on inflation, but it didn’t show any backsliding, either. Based on the initial reaction in stock index futures, the market will see it mostly as a positive,” said Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley. “Investors will have to remain patient, though,” he added. “The Fed has suggested it will take more than one month of favorable data to confirm inflation is reliably moving lower again, so there’s still no reason to think a first rate cut will come any earlier than September.” As inflation data has come in hotter than expected, central bank officials have encouraged a cautious approach. That means less likelihood that they will be cutting rates anytime soon. Most recently, New York Fed President John Williams said Thursday that while he is confident inflation will continue to recede, prices are still too high and he has not seen sufficient progress on moving to the Fed’s 2% annual goal. Markets have reined in their expectations for rate reductions this year. Pricing Friday morning indicated a probability that the first move likely won’t come until November, at the Fed’s meeting that concludes two days after the presidential election." MY COMMENT A perfect reading. An annual rate of inflation including food and energy of....ONLY....2.7% is at the low end of the historic norm and is very nice when we are seeing a good economy.
And....the little companion to the above. Treasury yields dip after inflation data roughly matches expectations https://www.cnbc.com/2024/05/31/us-treasurys-ahead-of-april-pce-inflation-data.html
OK.....some long term content and reinforcement. The lesson of Loki? Trade less https://timharford.com/2024/05/the-lesson-of-loki-trade-less/ (BOLD is my opinion OR what I consider important content) "The pages of the Financial Times are not usually a place for legends about ancient gods, but perhaps I can be indulged in sharing one with a lesson to teach us all. More than a century ago, Odin, All-father, greatest of the Norse gods, went to his wayward fellow god Loki, and put him in charge of the stock market. Odin told Loki that he could do whatever he wanted, on condition that across each and every 30-year period, he ensured that the market would offer average annual returns between 7 and 11 per cent. If he flouted this rule, Odin would tie Loki under a serpent whose fangs would drip poison into Loki’s eyes from now until Ragnarök. Loki is notoriously malevolent, and no doubt would love to take the wealth of retail investors and set it on fire, if he could. But when faced with such a — shall we say binding? — constraint, what damage could he really do? He could do plenty, says Andrew Hallam, author of Balance and other books about personal finance. Hallam uses the image of Loki as the malicious master of the market to warn us all against squandering the bounties of equity markets. All Loki would have to do is ensure the market zigged and zagged around unpredictably. Sometimes it would deliver apparently endless bull runs. At other times it would plunge without mercy. It might alternate mini-booms and mini-crashes; it might trade sideways; it might repeat old patterns, or it might do something that seemed quite new. At every moment, the aim would be to trick investors into doing something rash. None of that would deliver Loki’s goals if we humans weren’t so easy to fool. But we are. You can see the damage in numbers published by the investment research company Morningstar; last year it found a shortfall in annual returns of 1.7 percentage points between what investors make and the performance delivered by the funds in which they invested. There is nothing strange about investors making a different return from the funds in which they invest. Fund returns are calculated on the basis of a lump-sum buy-and-hold investment. But even the most sober and sensible retail investor is likely to make regular payments, month by month or year by year. As a result, their returns will be different, maybe better and maybe worse. Somehow, it’s always worse. The gap of 1.7 percentage points a year is huge over the course of a 30-year investment horizon. A 7.2 per cent annual return will multiply your money eightfold over 30 years, but subtract the performance shortfall and you get 5.5 per cent a year, or less than a fivefold return in 30 years. Why does this happen? The primary reason is that Loki’s mischievous gyrations tempt us to buy when the market is booming and to sell when it’s in a slump. Ilia Dichev, an economist at Emory University, found in a 2007 study that retail investors tended to pile into markets when stocks were doing well, and to sell up when they were languishing. (Without wishing to burden the long-suffering reader with technical details, it turns out that buying high and selling low is a bad investment strategy.) One possible explanation for this behaviour is that investors are deeply influenced by what they’ve seen the stock market doing across their lives so far. The economists Ulrike Malmendier and Stefan Nagel have found that the lower the returns investors have personally witnessed, the less they are likely to put in the stock market. This means that bear markets scare investors away from their biggest buying opportunities. Another study, by Brad Barber and Terrance Odean, looked at retail investors in the early 1990s, and found that they traded far too often. Active traders underperformed by more than 6 percentage points annually. Slumbering investors saw a much better performance. The sticker price of making a trade has plummeted since then, of course. Alas, the cost of making a badly timed trade is as high as ever. Morningstar found that the gap between investment and investor returns is largest for more specialist investments such as sector equity funds or non-traditional equity funds. The gap is smaller for plain vanilla equity and smaller still for allocation funds, which hold a blend of stocks and bonds and automate away investor choices. That suggests that the investors who are trying to be clever are the most likely to fall short, while those who make the fewest possible decisions will lose out by the smallest amount. I am always hearing that people should be more engaged with investing, and up to a point that is true. People who feel ignorant about how equity investing works and therefore stick their money in a bank account or under a mattress, are avoiding only modest risks and giving up huge potential returns. But you can have too much of a good thing. Twitchily checking and rearranging your portfolio is a great way to get sucked into poorly timed trades. The irony is that the new generation of investment apps work the same way as almost any other app on your phone: they need your attention and have plenty of ways to get it. Recent research by the Behavioural Insight Team, commissioned by regulators in Ontario, found that gamified apps — offering unpredictable rewards, leader boards and badges for activity — simply encouraged investors to trade more often. Perhaps Loki was involved in the app development process? I’ve called this the Investor’s Tragedy. The more attention we pay to our investments, the more we trade, and the cleverer we try to be, the less we will have at the end of it all." MY COMMENT CLASSIC stuff here. It has just about always been this way. Yet....this behavior continues. Human behavior never changes.
The INSANITY of the short term. YES....COSTCO stock is down by 2.81% this morning. AMAZING earnings being punished. The insanity of the traders and anyone that gets sucked into their world. I dont see how any retail investor could be selling this business. I see COSTCO as the single BEST stock...and company.... in the non-tech world. Their focus on their core business and making it work year after year is amazing.
My account today is a litany of names down 1-3%. Nine of ten stocks down for me today. My single UP stock.....my old friend....HD. The past three days have been totally wasted days. There is really nothing happening to justify the markets on Wednesday, Thursday and today. It is simply the aberration of the short term markets.
WOW...a pretty good turn around in the last hour today. If markets could experience EMBARRASSMENT....it should have been embarrassed most of the day today. Just a ridiculous market the last three days. BUT...in the end I had simply a MILD loss. I ended with five stocks green today.....HD, AAPL, CMG, GOOGL, and MSFT. The five that were red, included two micro-positions...SMCI and PLTR....along with my remaining stocks. I got beat by the SP500 today by 1.18%. These split personality weeks are enough to drive any investor crazy....but....as you can see below...I ended the week with a net gain in spite of all the insanity.
OK....the results this week. DOW year to date +2.58% DOW five days (-1.03%) SP500 year to date +11.27% SP500 five days (-0.07%) NASDAQ 100 year to date +12.16% NASDAQ 100 five days (-0.83%) NASDAQ year to date +13.34% NASDAQ five days (0.31%) RUSSELL year to date +2.74% RUSSELL five days +0.34% So how did I do this week? Well year to date I am now at +33.24% for my entire portfolio. I had a nice NET GAIN in my account this week in spite of all the SILLYNESS. Last week at this time I was at +32.06% for my entire portfolio. These weeks are really CRAZY.....big days up and big days down...in the same week. The markets LURCHING around like they are drunk or on drugs. Sometimes with the crazy day to day results I think I am the one on drugs.....LSD......and am hallucinating the insanity of the daily markets. What makes it even more crazy is that at the end of just about every week....I continue to go UP in my YTD gain. ONWARD AND UPWARD.
As I was saying above.... Stock market today: Stocks cap another winning month, S&P 500 logs best May since 2020 https://finance.yahoo.com/news/stoc...p-500-logs-best-may-since-2020-133127619.html (BOLD is my opinion OR what I consider important content) "US stocks wrapped the last trading day of the month on a high note, notching the sixth positive month in the last seven for all three major indexes. The blue-chip Dow Jones Industrial Average (^DJI) rose 1.5%, shaking off two days of sharp losses. The S&P 500 (^GSPC) rose 0.8%, while the tech-heavy Nasdaq Composite (^IXIC) overcame earlier losses and finished just below the flatline. The major indexes all broke records for the month. The S&P achieved its best May since 2020. The Dow saw its best May since 2021. And, finally, the Nasdaq logged its best May since 2023. While investors won out on the month, the trading day showed signs of investors taking a breather. Shareholders in Nvidia (NVDA), the AI darling, took an exhale after the company's stock price rose above $1,100. Shares fell more than 0.8% Friday as investors took profits on the chip producer as well as other tech giants. Investors also reacted to an update to the Personal Consumption Expenditures price index, which was seen as pivotal for stocks headed for a losing week. The "core" PCE index, which is closely watched by the Fed and strips out the cost of food and energy, rose 0.2% in April, slowing from the 0.3% increase seen in March. Still, the index showed that price increases remained sticky last month. Bond yields fell after the inflation report, with the benchmark 10-year Treasury (^TNX) falling to around 4.5%. In individual movers, shares of Trump Media & Technology Group (DJT) fell after former President Donald Trump was convicted on 34 criminal counts related to falsifying business records. On the corporate front, Dell (DELL) reported a rise in revenue, but its shares plunged 17% as its AI server sales fell short of high hopes. On the flip side, Gap stock (GPS) surged 28% on the heels of a sizable earnings beat." MY COMMENT I can hardly believe the below: "The major indexes all broke records for the month. The S&P achieved its best May since 2020. The Dow saw its best May since 2021. And, finally, the Nasdaq logged its best May since 2023." ALL the big averages had their BEST MAY since 2020.....or....2021.....or 2023. At the same time I would bet that the average investor....FELT LIKE.....it was a terrible month. This month is a perfect example of how the markets can....."feel bad"...yet in reality are great. I hope you did NOT.....sell in May and go away....if you did you missed out on some great gains. The POWER of long term.....fully invested all the time....investing.
AND....more good news for me and others on Social Security: The Social Security COLA Forecast for 2025 Was Just Updated. Here's the Good News and Bad News for Retirees https://finance.yahoo.com/news/social-security-cola-forecast-2025-073600518.html "In January, the nonprofit and nonpartisan advocacy group projected that Social Security benefits would increase by 1.4% next year. But it raised its 2025 COLA forecast to 1.8% in February, 2.4% in March, 2.6% in April, and 2.7% in May as the decline in inflation stalled in the neighborhood of 3% to 3.5%." MY COMMENT I will GLADLY take 2.7% all day long.......I will also.....gladly pay you Tuesday for a hamburger today. You take that amount every year and compound it annually and you are talking about some REAL MONEY over ten to fifteen years for us people that are on SS. We will know the ACTUAL SS cost of living raise in the early FALL.
I say and I hear more and more people in the financial media say......the INSANITY.....that we are seeing day to day in the markets is simply....THE AI TRADING PROGRAMS....trading news content and news headlines. It all snowballs on itself and creates a self fulfilling market day. It is also very dangerous......semi.manipulation of the markets.....as all these trading programs work and act in concert.
