SO.......here we are a day after a historic rally.......and.....the most significant single event of the last 4 years.......the FED rate cut....and the markets are like.....HO-HUM.......what have you done for me lately? That lasted for one day. After all the scary headlines about a 0.50% cut and all the media GUSHING.......a day later it is.....WHATEVER.
Hey guys, we’ve had a great year so far. I do want to bring a quick report from my business, and a “side” observation; I have had 6 vacancies in the past 2 months. 2 of which were clients that attempted to live in our commercial space (a big no no), which had to be terminated. I’m not sure what the heck it means, but it is a bit disturbing to me. We never have 6 vacancies in such a short period of time, usually we are at full capacity and our phone is always ringing. I’ve doubled up on ads in the past month and still - no bait. I’m not sure if this is target specific to our business or a reflection of the market as a whole, which is why I’m putting this out there. I don’t wanna over analyze things at this point, I’m giving this another month or two before panicking
LOL....Elon Musk always makes me laugh. He is so out of the box. If you know Bastrop Texas it is a little town of about 12,000 people....35 miles from Austin. A looked down on town.......by the snobs in Austin..... on the far outskirts of Austin. Is is now the HQ CITY for........"X" (Twitter)...Space X......The Boring Company.......The Boring Bodega.......and the X Safety Center. Needless to say Bastrop is booming. It is just down the road from the TESLA factory. Elon Musk reportedly moves X headquarters to Austin suburb Bastrop https://www.mysanantonio.com/business/article/elon-musk-x-bastrop-19777063.php
Just looking at a major financial business site.....not a single headline article on the rate cut...looking at the top SEVENTEEN stories of the day. Just a perfect example of where we are with the financial media right now. It is all HYPE all the time. Once the event is over they simply move on to the next thing they can HYPE. Scrolling through their top 95 headlines......only FOUR.....mention the rate cut or the rally yesterday.
As I was saying above. S&P 500, Dow back away from records as Fed cheer fizzles https://finance.yahoo.com/news/live...m-records-as-fed-cheer-fizzles-133049988.html (BOLD is my opinion OR what I consider important content) "US stocks dipped from record highs on Friday as rate-cut euphoria faded, with FedEx (FDX) earnings providing a reality check. The S&P 500 (^GSPC) fell roughly 0.3%, after the benchmark index ended at an all-time high. The Dow Jones Industrial Average (^DJI) traded steady on the heels of notching its own record close. Leading the way lower, contracts on the tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%. Stocks surged on Thursday as investors embraced Chair Jerome Powell's message that the Federal Reserve made a big interest-rate cut to support the economy, not to save it — an idea bolstered by jobless claims data. That roaring rally is now sputtering amid reminders that risks to growth could still lie ahead. Wall Street is still wondering whether the Fed has fallen behind in keeping the economy on track for a "soft landing". Traders are pricing in deeper cuts this year than policymakers' "dot plot" projects, per Fed Funds futures. Also, those Fed-fueled high spirits are stoking the risk of a bubble, according to a top Bank of America strategist. Michael Hartnett said stocks are pricing in levels of policy easing and earnings growth right now that push investors to go chasing for gains. FedEx posted a sharp drop in profit in Thursday after-hours, missing Wall Street estimates. The delivery company— a bellwether for the economy — saw Its shares slump as much as 14% in early trading. Elsewhere, Nike's (NKE) stock jumped after the sportswear maker named a new CEO as its sales come under pressure." MY COMMENT Oh well.....at least it was good for a nice one day rally. Just kidding......even if no one wants to cover it......or....they want to talk NEGATIVE as usual.....over the next year or two we will see a lot of good stock gains in this rate cut environment. We now seem to have the attention span of a fruit fly.
I "liked" your post above.....as a warning of where we are in the economy in the world of the "little people". The small business owner. Sounds like you are on top of it.
I just looked at one of the largest and most used Financial/Business sites online........out of over 80 headline articles on their opening page......a single mention.....ONE ARTICLE....on the rate cut and its impact on stocks, investing, and the markets. And that one article was a little fluff article about "what is means for your wallet". Media HERD behavior.....as they totally black out and ignore the rate cut story.
As a long time owner of NIKE i HATED what they did to the company over the past 10 years. NOW....it appears that they have finally done the right thing with the new CEO. Nike CEO changeup has investors optimistic as it returns to its product roots https://finance.yahoo.com/news/nike...t-returns-to-its-product-roots-121931132.html The new CEO: "In Hill, Nike gets a true insider who could use his intimate knowledge of the company to move quickly to enact change. Hill started as an intern and apparel sales representative in 1988 in Memphis, the year the iconic 'Just Do It' slogan was created. Nike's revenue was roughly $1 billion at the time." "He's a product guy. He's [run] retail in EMEA [Europe, Middle East, and Africa], in North America, he knows the company and the product very well," Sherman told Yahoo Finance (video above), plus "he's also very liked at Nike." MY COMMENT There is a great chart of this new CEO's resume at NIKE in the article that will not copy. EXACTLY what you want in a company CEO. A lifetime sucessful NIKE company man. It looks like he is just what the doctor ordered at NIKE. I predict he will be the perfect example of how a CEO and management can either make or break the same company. I suspect he will quickly.....perhaps 1-2 years.....put this company back on track. BUT.....no....I am not going to buy it till I see significant results that show long term potential.
As we LINGER in the markets today.....I have two....yes two....stocks up so far....AAPL and GOOGL. Probably today is a symptom of market EXHAUSTION. Plus.....we are on the cusp of the weekend. So....not surprised that we are seeing a little pause. Hopefully it will be......"the pause that refreshes" (thank you Coca-Cola).
WOW......this is a really serious move by MSFT. Talk about committing to the future. They have contracted to buy.....100%....of the power from this NUCLEAR PLANT. That is going to be a really serious data center. Probably also really good news for NVDA. A new life is proposed for Three Mile Island supplying power to Microsoft data centers https://apnews.com/article/three-mi...er-microsoft-8f47ba63a7aab8831a7805dfde0e2c39 MY COMMENT Enough power for EIGHT HUNDRED THOUSAND homes. A 20 year deal for MSFT. I would imagine that we will (hopefully) see this happening...in the not too distant future..... with many data centers being supplied with power from SMALL modular reactors that can be stacked as needed. Same with power needs of individual cities.
I noticed briefly some of the FED in the media today making their case for why they "voted" one way or the other. The dissenter FED Bowman whining somewhat about not meeting the 2% target. Oh, please. Get over yourselves. Let it be. There is really no need to explain anything further at this point.
After today I think the odds of a BIG EXPLOSIVE prolonged boom for stocks from the rate cut are now.....ZERO. We will no doubt get gains moving forward...but they will come in spurts and not be recognizable as a dramatic FED BUMP. It took one day to.....move on.
An ok down day for me today. I still had four stocks UP today....PLTR, AMZN, GOOGL and COST. I matched the SP500 today. Nice to be done with FED rate cut week and moving onto the end of September.
The markets this week. DOW year to date +11.53% DOW five days +1.52% SP500 year to date +20.24% SP500 five days +1.56% NASDAQ 100 year to date +19.83% NASDAQ 100 five days +1.95% NASDAQ year to date +21.55% NASDAQ five days +2.13% RUSSELL year to date +10.69% RUSSELL five days +1.91% As for me I am now at +51.44% year to date for my entire portfolio. Last Friday I was at +43.47%. MOVING ON UP.
HAVE A GREAT WEEKEND EVERYONE. I am off to a show in a couple of hours......of course we will be playing outside. Soon the milder weather will come.....yea.
Here is what the MEDIA will be focusing on this week in the financial world. Fed's preferred inflation gauge and second quarter GDP: What to know this week https://finance.yahoo.com/news/feds...ter-gdp-what-to-know-this-week-113401660.html (BOLD is my opinion OR what I consider important content) "The rate cut that everyone was waiting for finally arrived. Markets offered a resoundingly positive response to the end of the Federal Reserve's tightening campaign. But the euphoria was only fleeting. Friday's trading brought fresh concerns over corporate earnings and economic growth. Stocks, however, still posted overall wins for the week. The S&P 500 (^GSPC) ended the week up about 1.4%. The Dow Jones Industrial Average (^DJI) put on 1.6%, while the Nasdaq Composite (^IXIC) gained 1.5%. While Friday brought down the S&P, the index notched an all-time high earlier in the week and the Dow closed with a record. The biggest question for investors this upcoming week is whether a new batch of data supports Fed Chair Jerome Powell's assertion that the US economy remains strong. A second quarter GDP reading due Thursday will help test that contention. Fed Chair Jerome Powell was also careful not to declare a victory over inflation as pricing pressures continue to come down. Friday's scheduled release of the Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge, will offer another progress report on that front. Quarterly earnings reports from Costco (COST), Micron (MU), and Accenture (ACN) are also on deck. What's next for the Fed? The quiet period is over and so is the tightening. The public is set to receive fresh commentary from Fed officials in the days after the momentous shift away from a restrictive monetary policy. Perhaps the biggest question for policymakers is, where do we go from here? At least eight central bank officials, including Powell, Federal Reserve vice chair for supervision Michael Barr, and New York Fed chief John Williams, are scheduled to offer speeches or participate in conferences in the days ahead, likely giving color to the Fed's decision to cut interest rates by 50 basis points. Fed members see two more 25 basis point cuts this year, followed by four more in 2025. Powell has said the central bank was not playing catch-up in opting for a larger rate cut, addressing criticism that the Fed should have eased rates at their last policy huddle in July. He's also stated that cuts of 50 basis points shouldn't be thought of as the new norm. But a greater slowdown in the labor market could challenge both of his contentions. The new risks and the old Inflation was so high and the job market so tight that curbing price increases was the Fed's sole focus over the last two years. But now that inflation is cooling and the job market showing signs of slowing, the Fed has to advance its mandate on both fronts. On Wednesday Powell noted the upside risks to inflation have diminished while the downside risks to employment have increased. "We know it is time to recalibrate our policy," he said, confirming that the balance of risks is "now even." Analysts expect Friday's PCE reading to come in at 2.3% year over year, down from the prior month's 2.5% annual increase, according to Bloomberg data. Such a favorable metric would continue a downward climb and affirm the Fed's decision making. But even as more eyes are on the labor market, the Fed still hasn't met its inflation goal of 2%. And as central bankers have reiterated, stepping off the brakes too early could allow heightened inflation to pick back up. As Bank of America Global Research analysts put it in a note on Friday, "With above-potential growth, a strong consumer, and a record-breaking stock market, such a bold start to an easing cycle is hard to justify if a recession isn't imminent." "Unless the Fed is seeing something that we are missing, a more aggressive easing cycle could make reaching the 2% target harder considering uncertainty ahead, including the aftermath of US elections," they wrote. Tech stock reset Tech investors have been on the hunt for their next catalyst, and the Fed may have just handed it to them. After a mixed earnings season where Wall Street largely soured on massive AI spending and flashed impatience for less-than-perfect quarters, the rate-sensitive sector could revert back to growth mode. All but one of the "Magnificent Seven" stocks posted gains last week, with Meta (META), Apple (AAPL), Alphabet (GOOG, GOOGL), Amazon (AMZN), Microsoft (MSFT), and Tesla (TSLA) all outpacing the broader market. Nvidia (NVDA), the sole loser, shed more than 2% last week as it grapples with volatility after a stunning spring and summer rise. Still, some analysts see a more nuanced picture. As Citi head of US equity strategy Scott Chronert warned, the upside of even the most high-flying tech stocks is limited as the ability to match their prior growth becomes more difficult." MY COMMENT The last first. I find it interesting that above the BIG TECH monster, most dominant companies in the world......are still....being called...."the rate sensitive sector" What a load of BS.....but....a self fulfilling prophesy. As to the rest of the above.....nothing new for investors. We will have to.....suffer through.....EIGHT.....yes.....EIGHT....FED people out these having their ego stroked this week as they talk to fawning audiences hanging on every word. It will provide massive ammunition to the financial media to speculate. As noted above NVDA was in the RED last week and in fact has been in the RED for the past month.....(-6.26%). I find it INSANE that this company has been RED by a solid amount for the past month. Probably the most significant company in the world right now that continues to put up HISTORIC earnings. I am looking forward to the earnings from my holding....COST. NOW.....lets announce a stock split. Management is hurting shareholders by not doing a split. There is absolutely no reason to continue to hold off.....after all....it is a neutral event....right?
As to the above NONE of this "stuff" is of any real interest to me as a long term investor other than the general fact that we are now in FED cut territory. I see NOTHING wrong in the slightest that the FED did an initial 0.50% rate cut. I dont see it as any sort of message regarding the economy........at all. I think it makes perfect sense to kick off rate cuts with a 0.50% cut and than settle in to a bunch of 0.25% cuts as needed. In spite of inflation and the continued impact of price hikes over the last three years on "regular families"......the economy is strong and we are nowhere near a recession. What I care about at this moment is getting done with the last week of September.......moving toward the next round of earnings in about 3-4 weeks.......and.....continuing to hold onto my great gains all the way to year end. We will soon be in the final three months of the year. All expectations should be for a BIG GAIN year. We just have to hold on from here. Of course just about NONE of the so called experts predicted a great year for the markets this year. They are all totally focused on the short term and trading. it is very RARE to see any sort of expert talk about long term investing. Although I have to say that on the TV business shows......I am hearing more and more "guests" advocate for LONG TERM INVESTING. A refreshing change.....back in the mid 1990's and into the 2000's when I was posting on the MSN Money boards I was routinely DERIDED for being a LONG TERM INVESTOR. There were lots of trading and market timing advocates back than.....especially....market timing. Unfortunately as usual.....as always verified by the long time academic research......YOU CAN NOT time the markets.
Have we seen this movie before? Of course, numerous times. It is the same thing as before, just the opposite direction. And just like before, there is really nothing of substance they can add at this point. As we have also seen this 2% narrative also beaten into the ground....since forever. It is almost like something is magically going to appear or disappear if they get to it. It has never been a static number the best I can recall. Historically, the average long term is about 3.28%. We are now at about 2.53% and it has been slowly decreasing over time. Roughly a year ago it was 3.67% and back to the end of August 2022 it was 8.26%. So, we are in a better place, but the obsession over exactly 2% is just silly.
