I like this little article. Looking Beyond ‘the Consumer’ Consumer spending won’t always tell you recession is underway. https://www.fisherinvestments.com/en-us/insights/market-commentary/looking-beyond-the-consumer (BOLD is my opinion OR what I consider important content) "Here is a headline you may be surprised to learn perplexes me: “Despite Monday’s Turmoil, the American Consumer Is Still Powering the US Economy.” That was from Monday’s Washington Post, and it was hardly alone in arguing recession fears were premature because US consumers (there is more than one, after all) were still doing a-ok. We appreciate the optimism and think economic fundamentals should keep supporting stocks. But consumer trends generally don’t drive or predict recessions. It is clear why headlines zero in on consumer spending. It is just over two-thirds of US GDP (67.7%, to be precise), so many surmise its big presence must surely give it big influence over economic ups and downs. But most spending goes to things we all consume regularly, regardless of whether the economy is growing or shrinking. Housing. Utilities. Gasoline and transportation to work. Health care. Nursing homes. Childcare. Education. Food. You get it. These essential categories make up the vast majority of consumer spending. As a result, consumer spending tends not to fluctuate much in good times or bad, with the exception being COVID lockdowns and reopenings—which directly affected people’s ability to spend, lifestyle and even basic habits. The upshot: If you are using solid consumer spending as a basis for bullishness, you are probably looking in the wrong place. A better place to look: business investment. It tends to swing much more. Exhibit 1 compares consumer spending and business investment in all recessions from WWII’s end through the biggie that accompanied the global financial crisis in 2007 – 2009. Each time, business investment fell more than GDP. But consumer spending grew, cumulatively, in 5 of 11 recessions. In the six where it fell, it fell less than GDP five times. Exhibit 1: Consumer Spending Isn’t Telling Source: US BEA, as of 4/4/2024. This makes sense when you think through a recession’s primary purpose: removing the bloat that accumulates as economies grow. The longer and higher an economy expands, the more discipline businesses lose. Fueled by flush revenues and lofty expectations, they start spending on unproductive things. Misguided long-term projects they haven’t thought through correctly. Good ideas whose competition they have misjudged. Even boondoggles. When too much money starts going to the wrong things, there has to be a corrective mechanism to steer it back. That mechanism is a recession. As financial conditions tighten, it forces businesses to get more clearheaded about what will and won’t pay off in the long run. They start battening down the hatches, canceling the ill-conceived projects that once looked so sweet. They may offload unnecessary real estate and other unproductive assets. Scrap new construction and equipment orders or otherwise quell expansion. All these U-turns show up in the three business investment components of GDP—nonresidential fixed investment in equipment, structures and intellectual property products (e.g., software, research & development, royalties). These are lagging datasets, but you can usually also see the first fruits in core capital goods orders, the new orders components of services and manufacturing purchasing managers’ indexes (PMIs) and even business lending, which tends to fuel many new investments. Sooooo, where are we today? Kind of a kooky place, as it happens. Things got a little weird in 2022 and 2023. There wasn’t a US or global recession, but pretty much the entire world thought one loomed as energy prices spiked amid Russia’s Ukraine invasion and central banks cranked up rates to fight fast-rising inflation. So businesses behaved like a recession had struck, getting lean and mean however they could. We saw it in Tech layoffs and real estate sales, and it showed up in business investment in equipment, which fell in four of five quarters from Q4 2022 through 2023. Business investment resumed growing in Q1 2024 and accelerated in Q2, with part of the fuel coming from a slight pullback in spending on structures. Exhibit 2: Businesses Pulled Back in 2022 and 2023 Source: US Bureau of Economic Analysis, as of 8/7/2024. But this is all in the past, and stocks look forward, about 3 – 30 months out. You could look at Exhibit 2 and theorize that it would be weird for a recession to start now, after businesses just spent several quarters wringing out excess. But weird happens, so that isn’t a strong basis. Look to more forward-looking things. Core capital goods orders are one such forward-looking thing. This is the subset of capital goods orders that excludes defense orders (which don’t represent private-sector demand) and transportation orders (notoriously volatile due to the aircraft industry’s lumpiness and massive sticker prices). It corresponds to actual business equipment. Even this core category tends to vary month-to-month, so short-term wiggles are the norm. But recessions tend to include steep, sustained drops. That isn’t the case now. Core capital goods orders grew 0.9% m/m in June, reversing a May drop, and have hovered around present levels all year.[ii] Obviously, this doesn’t suggest robust expansion. But it isn’t a downturn, and it isn’t shocking in light of US manufacturing’s long-running soft patch. Manufacturing’s troubles are also visible in contracting manufacturing PMI new orders. The Institute for Supply Management’s (ISM’s) manufacturing new orders gauge has trailed 50—indicating contraction—in 10 of the last 12 months.[iii] But private goods-producing industries are just 17% of US GDP.[iv] Services, meanwhile, is 72%.[v] ISM’s services new orders had a freak contraction in June, but they bounced nicely in July and are up in 11 of the past 12 months.[vi] This is an overall expansionary trend. So businesses aren’t presently acting too recessionary. But will they get the capital they need to fuel future growth? Things here are a bit mixed, but the balance seems overall positive. Corporate balance sheets are healthy. Businesses have lots of cash, and manageable debt loads keep interest payments from gobbling their cash flow. On the iffier side of things, business lending has been weak since last autumn. On a weekly basis, it fell, year-over-year, from last October through May. It has since turned positive. Growth rates aren’t stellar, but up is up. And, crucially, the Fed’s latest Senior Loan Officer Opinion Survey shows supply and demand for business loans are improving. Businesses have gone from being turned off by the thought of taking on a new loan to neutral, while far fewer banks are tightening credit standards. On both fronts, it seems the novelty of higher rates has worked its way through the system. Broad money supply, too, is growing again—albeit slowly—after contracting for over a year. At 2.1% y/y, the broadest measure (M4), again doesn’t suggest a boom or hot inflation’s return.[vii] But it doesn’t suggest contraction, either. In short, the present environment resembles the start of something good, not the end. Falling money supply, a spike in tighter credit standards and falling loan demand all coincided with the business investment in equipment drop—all look like part of late 2022 and 2023’s get lean and mean drive. Society got through that without a recession, and now businesses are starting to go on offense. Yah, but what about that weak jobs report? As we covered Monday, unemployment is up primarily because people are returning to the workforce, encouraged by the prospect of faster economic growth creating that perfect job for them. Some industries have shed jobs, yes, but this is a late-lagging indicator—probably another after effect of prior cutbacks. Growth begets jobs, not the other way around. No, things aren’t perfect. But perfect doesn’t exist. It is all about the balance and the trend, and both are positive for now—with forward-looking indicators suggesting they will stay that way. And with recession chatter creeping up, expectations are falling, creating an easier bar for reality to clear. For stocks, this is a fine economic backdrop." MY COMMENT YES.....there is NO recession. I used to post variations of that phrase often over the past two years. We were bombarded by media fear mongering of an impending recession. NOW......they are back....pushing this BALONEY story line once again. NO....we are not in a recession and I dont see much indication of one any time soon.
I read that first in "Rich Dad Poor Dad" Robert Kiyosaki book some years ago. That book for a portuguese reader is not so interesting considering that a big chunk of RK sugestions arent practibale here. However some mantras or concepts I read there are somehow usefull, specially what is presented in book first half.
I have been letting the markets "age" into the day for a bit. NOW....SP500 and NASDAQ have turned green. It is a nice open today. NOW......lets hold till the close....although it is a long way off. AMAZINGLY.....we have gained back just about all the money that was lost in the CRAZY days this week. A good green close today will put many investors back to neutral or even a bit positive in terms of the week. As to all the fear mongering, the panic, the manipulation, the media.....it will all be.....NEVER MIND.
Speaking of manipulation.....I am convinced that the NVDA BLACKWELL story about a design defect is FAKE. My belief is that someone planted that story....and......a massive number of tech blogs, online tech sites, and little tech sources ran with it. The big media picked it up from there and also put out a few stories on this issue....for about one day. BUT.....NVDA refused to confirm the rumor. NONE of the big cap tech companies that are the NVDA customers confirmed it. AND.....tellingly....the story has dropped out of sight. I looked back last night through about 20 pages of google search.....and....there were ZERO recent stories on the issue. ALL the stories I found were 3-6 days old and most were small tech sites and blogs. The story has been DROPPED. We will know in the near future....between now and the end of the year if this story was true. I assume if it is true...it will be a disclosure in the upcoming NVDA earnings report on AUGUST 28. I say....if it is not disclosed as true on AUGUST 28.....than it was a planted story to manipulate the stock and the markets. Who planted it...I have no clue. The second alternative...it was a DIRTY TRICK by a NVDA competitor or some JOKER. I am interested to see where this stands when NVDA reports earnings on August 28.
Was there some panic this week....looks like it. A sure way to KILL your long term returns. US investors snap up money market funds on fears of a slowdown https://finance.yahoo.com/news/us-investors-snap-money-market-135734911.html "According to LSEG data, investors poured a massive $47.48 billion into U.S. money market funds in the largest weekly inflow since April 3, while simultaneously offloading $7.39 billion in equities, ending a three-week buying streak."
As we are seeing based on the totality of the market this week. What to do after a week of stock turmoil? Strategists say do nothing https://finance.yahoo.com/news/what...s-say-do-nothing-morning-brief-100041024.html (BOLD is my opinion OR what I consider important content) "With volatility roaring back this week, you’ve probably seen the warnings against checking your 401(k). The exhortations to buy the dip in stocks. The urging to rebalance your portfolio. The calls that a recession is more likely. In short, a week like this can be scary and confusing. Enter Steve Sosnick, chief strategist at Interactive Brokers, with a zen-like suggestion: “Breathe.” When confronted with a sell-off, investors have three options: buy, sell, or hold. Of course, these are always the options. But it’s worth a reminder that when there’s turbulence, doing nothing is always a choice. There are plenty of pundits who are echoing that calming tone. “To date, asset market fluctuations have remained within normal historical ranges and, in our view, do not signal cause for alarm,” wrote Michael Gapen, head of US economics at BofA Global Research, in a note to investors. Julian Emanuel of Evercore ISI told clients that stocks are still in a bull market. And Charles Schwab senior investment strategist Kevin Gordon explained to Yahoo Finance why he doesn’t see recent employment indicators as recessionary. Early in the week, Goldman Sachs’ strategy team, led by David Kostin, said they were sticking with their call for the S&P 500 to reach 5,600 this year. They pointed out in a note to clients that sales and earnings estimates for 2024 and 2025 haven’t changed and that the S&P 500 typically rebounds after a 5% pullback. Of course, not everyone is saying “ohm.” David Rosenberg of Rosenberg Research told Yahoo Finance that he still sees the US economy heading for a recession. For now, that seems the minority view, even as JPMorgan economists raised their forecast for the probability of a contraction to 35% by the end of the year from 25%. Meanwhile, Sosnick said he’s been getting a lot of calls from non-financial industry friends asking, “What do I do?” His answer: “Nothing.” There is one caveat, he said: If Monday’s sell-off in particular “freaks you out, you’re carrying too much risk. If you got margin calls or something, you may want to be taking a bit less risk.”" MY COMMENT Pretty OBVIOUS to me. I hope to most people reading and posting on this thread....after all...it is called THE LONG TERM INVESTOR.
I am not going to talk about it......but....I ALSO believe that the ELECTION and POLITICS and the impact of the election result on culture, society, business, the economy, democracy, freedom, constitutional rights, and the future of the USA....WILL....have an impact...perhaps a big impact....on the markets over the next three months.
LOL....looks like we are now back to red. No doubt it is going to be a day when...."what you happen to own"...is gong to be the critical factor.
Stocks slip Friday as market struggles to erase week’s losses https://www.cnbc.com/2024/08/08/stock-market-today-live-updates.html That is about it for today. Not much real news going on. Just the end to a CRAZY week. ALL in all.....if we ended where the markets are right now.....I would consider that a VICTORY for the week.
My current gain for the day in NVDA is "small"....but at this moment in the day I have eight of nine stocks in the green. My only red stock....GOOGL.
Good old CMG is on a nice run up lately. it started the day after the CEO finally came out and PROPERLY addressed the lingering Social Media campaign on portion size. The stock is up by about +15% over the past five days......and....about 11.4% since July 26. I dont think this is RANDOM since the CEO statement on portion size hit all the financial and other news sites on JULY 25. It is a good example of the power of Social Media......regardless of right or wrong. it is all about PERCEPTION. Although...in hindsight the company did identify about 13% of stores that were not following portion size guidelines. The company flailed around and tried to BS the issue.....first ignoring it and when that did not work simply issuing denials. They FINALLY got smart and issued an appropriate directive to all stores and customers that they were taking care of the issue......and.....made the appropriate "POSITIVE" response to the issue. It drives me crazy when a company and management seem to have NO CLUE how to deal with a PR issue. BUD LIGHT is a perfect example of a PR disaster.....and TOTAL FAILURE to deal with a business crises.
How about that PLTR eh? My thoughts… it’s the REAL deal, I’ve been following this company for years and owned it temporarily on a couple of occasions before actually dedicating 10% of my portfolio to hold it permanently. Everything about this company WORKS for me, EXCEPT its relationship to AI. And by that I mean it’s currently thrown into the same basket as all those AI darling stocks which I’m actually not happy about since the bulk of its technological attributes are associated with Intel gathering algorithms, security and strategy. But a week like the one we’ve experienced proves that it is able to DETACH itself from the AI excitement (or lack of) and rise above the rest. I’m truly surprised that it hasn’t reached an ATH based on all those KILLER earning reports, profits, and WELL ESTABLISHED growing list of CREDIBLE clientele. Shocking really. That’s a long term hold for me
That's the book that dragged me into stocks and markets during lockdown 2020. I must admit, I didn't learn much from it, but it gave me an impulse to start my financial education, which was nonexistent prior to that. It's a shame that basics of financials are not taught in the schools, at least in Europe. I just read on Investopedia that in 2023, over a third (37%) of Americans could not cover a $400 emergency in cash or its equivalent, a Federal Reserve report found. Probably, it's simillar situation in EU.
Yeah Zukodany. My position is still small under 200 shares but I continue to add to it when I have a random bit of money. I got my first 104 "free" shares back in February i believe. Since that time my position in PLTR including the shares I have added along the way is up by +37%. I am more than satisfied with how it is performing. In fact I have added some to my sisters and daughters accounts. I ALSO think it is undervalued and should be higher than it is. That was a very good earnings BEAT that it put up.
With FIFTEEN minutes to go....EIGHT of NINE stocks are green. My single RED stock when I looked a minute ago was NVDA....down by ONE PENNY. It is flipping between red and green over and over. I hope it sticks in the green by the close.
I dont know how anyone could be anything but BULLISH on this company. Nvidia stock paces toward weekly loss as Wall Street sees 'urgent demand' keeping the chip trade intact https://finance.yahoo.com/news/nvid...-keeping-the-chip-trade-intact-174809108.html MY COMMENT I am still SUPER-BULLISH. The numbers that this company is putting up are insanely good. i have never seen any company over my years of investing do this sort of results. PLUS they sit in the CATBIRD seat....at the EPICENTER....of the AI business and trade....with no end in sight as long as they operate as they have..
WELL....a nice medium level gain for me today. My single red stock today NVDA.....by 21cents. I also got in a beat on the SP500 today by 0.16%. My largest gainers today were..... PLTR....CMG...and...COST After all the TURMOIL this week I ended the week just slightly lower than last week. See below for the numbers.
Here are the numbers this week......you would never know what happened to the markets on Monday. DOW year to date +4.73% DOW five days +1.17% SP500 year to date +12.68% SP500 five days +3.75% NASDAQ 100 year to date +11.88% NASDAQ 100 five days +6.19% NASDAQ year to date +13.40% NASDAQ five days +6.57% RUSSELL year to date +3.23% RUSSELL five days +2.77% A killer week for all the averages. MONDAY......what MONDAY? According to the above MONDAY never happened. I was down a little for the week....but I will definately take it after MONDAY. I ended with my entire account at +32.90% year to date. My entire account last week at the Friday close was at +33.60%.
HAVE A GREAT WEEKEND EVERYONE. This was a week to just move on and forget the first couple of days.....and...CELEBRATE the last three days of the week and the final result. A perfect example of the GLORY that comes from simply holding on and doing nothing.
I try to put all actions that I take on here on the day it happens........NOT for others to copy......but for others to see how long term investing works out for (ME) in real life. I just put in orders to purchase the following at the market on Monday. This is not my account....it is one that I manage. The account has been mostly ignored over the years and is way top heavy in the SP500 Index. So I will add to the account: $30,000 NVDA. $10,000 in each of.....PLTR, CMG, COST, MSFT, AMZN, AAPL, GOOGL, and HD. With the recent market drop I decided NOW is a good time to re-balance this account into my usual stocks along with the SP500 Index Fund. Even after these trades the largest position in the account will still be the SP500 Index fund.
