We are rolling right on through September and fast approaching the end of 2024....it will be here before we know it. All of the forecasting and fortune telling has been, as usual, nothing more than a distraction to those who allow it. Yes, there will be plenty of noise going forward. There always is and more often than not it matters very little in the larger picture. Do not let it rob you of the joy and success we have had for quite sometime now.
No offense, but whether you or I or anyone on these forums sees a message in the 50 BP rate cut doesn't matter much, does it? Only what the majority of investors and/or analysts read into it. Of course, we aren't sure what that is, or whether or not the majority even cares if there is a 'message', or what the 'message' is, one way or another - are we? There is a vocal element that wants to paint the narrative that a 50 BP rate cut sends the message that the economy is not in very good shape, after all, and that the Fed felt the need to take more decisive and immediate action than a mere 25 BP cut. Are they right? Do they have their own specific agenda? Again, I don't pretend to know. I'm guessing it's this element that you are referring to when you say "I don't see it as any sort of message regarding the economy......" ?
I think the reason that inflation "....now at about 2.53% and it has been slowly decreasing over time." is not believed to be a great reference point by so many people is that most of us can't remember - or find reference to - another time in history when interest rates were artificially held at or near zero percent for so many years prior to March 2022. That makes it much more difficult to accurately interpret and determine what our actual current economic situation is - I'm not aware of a historical precedent where the U.S. money supply and stock markets have been so manipulated for such a long period of time. That doesn't even begin to mention the trading (stock price) manipulation that has been allowed, also for many years now, separate and apart from the interest rate issues. Am I missing something?
Well actually Ruyak......when I said the above sentence that you quote.... I was referring to........"ME".....that is why I said that "I" don't see any sort of message in the amount of the rate cut at all. What....."I".... see and think about the rate cut amount is ALL IMPORTANT to...."ME". It is what will control and be the basis for....."MY".....investing thinking and behavior over the rest of the next couple of years of rate cuts. HERE is my entire post in context: "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" In other words I dont care what anyone thinks on this issue. It has ZERO relevance to me as a long term investor. I dont care what the majority of investors or analysts think. So the media, other investors, the entire world can think what they want about the 0.50% rate cut and what they think it means......and....I simply dont care. ALL I care about as I said above is the specific business fundamentals of the stocks that I own and their earnings. I REFUSE to buy into or get involved in all the DRAMA of this argument......which makes about as much sense as...... "how many angels can dance on the head of a pin".....regarding a 0.50% rate cut versus a 0.25% rate cut......for the first of many cuts There is simply ZERO difference.....in "MY" reality. The short term DRAMA is simply the usual BS......as a long term focused investor.......NO.....I dont care what the majority percentage of investors or analysts think on this issue at all.
Now others.....anyone else....they are free to think what they want and if they want to allow any of this stuff to impact their investing behavior....that is up to them. None of my business.
I totally understand and that's probably a good position for you to have! My point was that if enough investors and market players believe something - true or false - then their acting on that belief or those beliefs could well have an impact on markets. Whether those impacts would have any actual long term effects is open to conjecture.
YES.....I understand what you are expressing and agree that investor and industry consensus does have short term impact on the general markets. BUT.....that consensus......is simply part of the NOISE of the short term. So I give it ZERO relevance. It is infected by drama, emotion, manipulation, dishonesty, self-interest, classic herd behavior, silliness, etc, etc, etc. There is a lot of short term talk and comments on here.....from me. Some I am right, some I am wrong.....but even my thinking and analysis of the short term is NOT relevant to me. I intentionally divorce myself from my short term thinking and opinions by being a fully invested all the time investor for the long term. By investing the way that I do....it does not matter if...."I"....am right or totally wrong in my short term analysis. The CRUX of the paragraph that I posted quoted above is this sentence: "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."
AND....we are off and running today....the markets are open. MILD gains in the big averages to start the day.
To continue our discussion. As to this statement from the Rayak post above: "Whether those impacts would have any actual long term effects is open to conjecture." My view is that the LONG TERM washes all the short term drama and human compulsion to explain and analyze everything out of the market results. BUT.....I often talk on here about the future of the markets and the DANGER of this sort of short term drama INFECTING the medium to longer term markets and destroying the market system. Turning it all into a process of simply random gambling.
No.....I am not going to post any comment about the FED people out there talking this week. There are already many stories out there about a couple of them making comments.They did the cut.....I dont care why. I dont know if it is the end of the last earnings or the early start of the next earnings....but....I will get my COST earnings this week. I am looking for the next round of earnings to be good. COST just keep rolling along. An amazing business.
LOL....here is the market today. US stocks nudge higher in wait for Fed speakers, key inflation print https://finance.yahoo.com/news/live...d-speakers-key-inflation-print-133022088.html (BOLD is my opinion OR what I consider important content) "US stocks rose slightly on Monday, coming off a winning week on Wall Street, as investors looked ahead to Federal Reserve speakers and a key inflation reading for clues to the odds of another big rate cut. The Dow Jones Industrial Average (^DJI) was up 0.1%, hovering above Friday's record close for the blue-chip index. The S&P 500 (^GSPC) added roughly 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) climbed 0.3%. The market is laboring with concerns about the health of the US economy, which have persisted after the Fed's bold pivot to cutting interest rates last week. The big question now is whether upcoming data releases this week will support Fed Chair Jerome Powell's assertion that conditions remain strong. Much will depend on Friday's reading on the PCE index — the Fed's preferred inflation gauge — and Thursday's second quarter GDP print. Experts believe that cooling inflation, not a rising risk of recession, will give policymakers the green light for another 0.5% cut this year. Before then, investors will hope to get more policy insight from speeches by a panoply of Fed officials, starting with Austan Goolsbee and Raphael Bostic on Monday. Given the rare lack of unanimity in the last decision, remarks from Powell and dissenting Fed governor Michelle Bowman later in the week are likely to be closely scrutinized. On the corporate front, Intel (INTC) shares jumped after Apollo Global Management reportedly offered to make a multibillion-dollar investment in the struggling chipmaker — a vote of confidence in its turnaround strategy. Intel stock spiked at the end of last week amid a report Qualcomm (QCOM) was exploring a takeover." MY COMMENT Talk about short term NOISE. ENDURE....is the word of the day. ENDURE...the noise. ENDURE....the media driven drama. ENDURE.....the short term to get to the long term.
Personally....speaking from self-interest as an owner of the stock....."MY".... event of the week is PLTR joining the SP500 today. A big step in the life of this young company. It has now joined the big boys in the top 500 best and largest companies in the USA. It will now be added to ALL the SP500 Index funds and ETF's. It will now have a much higher public awareness. BUT....in the end it will still continue to be all about business performance. AND....that future performance will depend mostly on....MANAGEMENT. I am very impressed with the management at this young company so far over the short time that I have been following it.
The FINAL END to a long, long, ICONIC business. I remember the Kresge stores (basically dime-stores) which were the forerunners to K-Mart. In fact when I finished up my Business grad year in college....I got a job with K-Mart. It only lasted a month. I could quickly see there was no future there that I was interested in....so I moved on. They were the Walmart of their era back in the 1960's and 1970's and 1980's. Last full-size Kmart in US to close Store that is closing in Bridgehampton, New York, leaves just a Florida location remaining https://www.foxbusiness.com/economy/last-full-size-kmart-us-close https://en.wikipedia.org/wiki/Kmart "At its peak in 1994, Kmart operated 2,486 stores globally, including 2,323 discount stores and Super Kmart Center locations in the United States."
I am siting and waiting as the markets are trying to build into the green today. AMAZINGLY the rate cut bump......was a single day gain. I have four stocks up today and five down and an basically FLAT. What will count with the rate cuts will be the cumulative impact over the next 1.5 years. It is not about a single day or two bump up. It is about the longer term impact of the cuts. Looking to the early medium term.....the rest of 2024. We are all set up for a strong end to the year. Worst case.....barring some nasty Black Swan.....we will simply move to year end basically where we are right now.....with the markets lingering and moving up and down.....but basically treading water. That would be a major victory for me.......to be able to LOCK IN for the year the big gains that I have right now. It would also be a BIG victory for all the averages which also have some very nice gains this year to date.
Since it is a boring market day today....I will talk art. I am looking toward an auction in October for my next purchase. Mid to late month I will be bidding on a painting. It is an artist that I do not currently own. He died in 1981 after a very long career painting. Most of his significant output was from about 1930 to the 1950's. The particular painting that I am going to bid on is from 1953. This particular artist typically sells in the $15K to $25K range. I am hoping to get this painting for the low end of that range....about $15K....since the auction that I am watching is focused on other types of art and is not a main-stream auction source for this particular artist. BUT......it is a legit and well recognized auction...here in Texas. That is important to me since there are a lot of FAKES for this artist....especially in some of the auctions in Florida. Florida seems to have a lot of art FRAUD....for some reason. We will take a little road trip to preview this auction and one other one that will also be held in October. I want to see this painting in person before bidding.
Yeah, I get it...who knows. Here is a little rate chart to view. https://fred.stlouisfed.org/graph/fredgraph.png?g=1todS As to the markets and manipulation, I don't overly fret about whether it is or isn't. I can't control it one way or the other. I know that my investment plan has put me in a position of financial security despite all of the wars, black swans, bear markets, pandemic, politics, recessions, and big money quite possibly playing games. Now, that doesn't mean those times were not a white knuckle ride, but I have stayed the course and it has paid off.
Here is the latest on the ECONOMY since there has been discussion on the economy lately. Data shows US economy pacing for 'healthy' growth — but new 'headwinds' loom https://finance.yahoo.com/news/data...growth--but-new-headwinds-loom-145041536.html (BOLD is my opinion OR what I consider important content) "The US economy appears on track for another solid quarter of growth, new data showed Monday, while also pointing to potential "headwinds" in the manufacturing sector and with price pressures. S&P Global's flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 54.4 in September, down from 54.6 in August. Economists had expected the index to tick down to 54.3. Chris Williamson, the chief business economist at S&P Global Market Intelligence, said the data shows the US economy is pacing for "healthy" growth in the third quarter, which will come to a close at the end of September. “The sustained robust expansion of output signaled by the PMI in September is consistent with a healthy annualized rate of GDP growth of 2.2% in the third quarter," Williamson said in the release. After a better-than-expected update on retail sales in August, economists have been expecting a solid third quarter of growth for the US economy. As of Sept. 18, the Goldman Sachs economics team had been tracking third quarter GDP at 3%, while the Atlanta Fed's GDPNow tool saw 2.9% annualized growth. Federal Reserve Chair Jerome Powell last week also cited the still-healthy economy as a reason to cut interest rates and not get behind the curve. "The US economy is in good shape," Powell said. "It's growing at a solid pace. Inflation is coming down. The labor market is in a strong pace. We want to keep it there." There were some signs of slowing within Monday's S&P Global data, however. The services component of S&P's report showed the index registered 55.4 this month, down from 55.7 in August. Meanwhile, manufacturing activity continued to lag, falling to a 15-month low of 47 from 47.9 the month prior. Any reading above 50 for these indexes represents expansion in the sector; readings below 50 indicate contraction. Additionally, prices charged rose at the fastest rate in six months, which Williamson noted could be cause for concern on the inflation front. “The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds," Williamson said. "A reacceleration of inflation is meanwhile also signaled, suggesting the Fed cannot totally shift its focus away from its inflation target as it seeks to sustain the economic upturn." The survey's future output index, which measures optimism about economic output in the year ahead, hit its lowest level since October 2022 too. “Business sentiment, demand, hiring and investment are being subdued by uncertainty surrounding the Presidential Election, casting a shadow over the outlook for the year ahead at many firms," Williamson wrote. MY COMMENT About what you would expect. I am not particularly concerned with inflation. It is well below the historic norm of 3-4%. I am more concerned with the 2% target of the FED being out of whack with the historic norm of 3-4% inflation in a healthy economy. I do think that 2% target if compulsively chased is way too low and could lead to a deflationary environment or a stagnant environment.
A quick post than i have to leave for a really good show tonight. I was in three green in spite of three of nine stocks being red. MSFT, AAPL and GOOGL. I also got beat by the SP500 by 0.09%. Happy to be in the green today with the lingering....back and forth....market today.
Thanks! As the chart indicates, the fairly recent two times that the FED rate has been ZERO have all occurred within 10 of the past 25+ years - and at NO other time in history. This anomaly is a huge curveball to investors trying to figure out the potential consequences of it and how to invest long term in this environment - not to mention a dangerous and drastic move away from anything that could be even generally referred to as "free markets". It's usually best to take and accept the medicine! It's not uncommon in healthcare that efforts to avoid a painful and uncomfortable - but necessary - remedy, end in much more serious consequences - such as gangrene, amputation or even death. Some of us wonder if this might not be true of government / FED efforts to avoid economic consequences and 'pain' with bailouts and free money, er, I mean, "economic stimulus". And other ill-advised governmental economic programs and decisions.
