I have not been to NC in a long time. I used to go there often as a kid in the 1950's and 1960's and as an adult in the 1970's. My Grandparents lived in what was an extremely isolated area back than. The largest town anywhere near them was Boone. Their very small town had less than 200 people. That area is full of rivers and creeks....thus.....the flooding. The area has changed massively since than into a major tourist area and a desirable area to live. Back in the old days I would visit in the summers...it was extreme poverty and very isolated. I still have a lot of relatives in East Tennessee and NC.....although I have lost contact with all of them. I had a lot of fun there as a kid fishing and running around the woods. My grandparents very small.....old, four room house (two bedrooms, kitchen and living room, screened in porch)......is no longer there. It was torn down long ago. It had a roaring little creek....literally....running along the side of the house only 2 feet away. The part of their property across the creek from the house routinely flooded.
It is CPI day today.....that will be the economic story of the day. Inflation expected to slow in September but 'upside risks' loom amid start of Fed easing https://finance.yahoo.com/news/infl...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif "September's Consumer Price Index (CPI) will serve as the latest test of whether inflation will continue to ease as the Federal Reserve debates its next interest rate decision. The report, set for release at 8:30 a.m. ET on Thursday, is expected to show headline inflation of 2.3%, a deceleration from August's 2.5% annual gain in prices, which marked the lowest annual rate since early 2021. Over the prior month, consumer prices are expected to have risen 0.1%, down from the 0.2% increase seen in August. On a "core" basis, which strips out the more volatile costs of food and gas, prices in September are expected to have risen 3.2% over last year, unchanged from August's increase. Economists expect monthly core price increases to slow slightly, estimating an uptick of 0.2% compared to August's 0.3% gain in prices, according to Bloomberg data. Inflation, although moderating, has remained above the Federal Reserve's 2% target on an annual basis. But the Federal Reserve has recently shifted its attention to the state of the labor market, which has been surprisingly resilient in the face of high interest rates. Data from the Bureau of Labor Statistics released Friday showed the labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists, while the unemployment rate fell to 4.1% from 4.2%. The strong report altered expectations about the path forward for interest rates, with markets now pricing in a smaller 25 basis point cut in November rather than another jumbo 50 basis point cut. "We think the bar for the Fed to not cut rates at all in November is high," Citi economist Veronica Clark wrote in a note to clients on Monday. "Ultimately, we expect a still subdued inflation backdrop and a reemergence of weaker labor market trends in the next few months will have officials cutting rates by 50bp in December after a smaller 25bp cut in November." A hot reading could still spook markets, though. "Good news is good news for stocks as long as inflation doesn't flare up again," Bank of America equity strategist Ohsung Kwon wrote on Monday. "Following the blowout jobs report last Friday, we believe the importance of CPI this week has risen." "While stocks should be able to withstand a slight upside surprise in inflation given improving macro data, a sizeable surprise could bring uncertainty on the easing cycle and more volatility into the market," he warned. Sticky shelter, core services Core inflation has remained stubbornly elevated due to higher costs for shelter and core services like insurance and medical care. "We see some risks of stronger inflation in large components like owners’ equivalent rent relative to our forecasts," Citi's Clark said. Owners' equivalent rent is the hypothetical rent a homeowner would pay for the same property. Bank of America added sticky rent inflation and an uptick in lodging away from home, used car prices, and airfares will likely translate to a firmer core reading in September month over month after the latter two categories saw price declines in August. "While we expect core CPI to be on the firmer side of recent readings in September, our forecast does not change our medium-term outlook for further disinflation," Bank of America economists Stephen Juneau and Jeseo Park wrote in a preview of the data. "A cooler labor market coupled with anchored inflation expectations should keep disinflation on track." "That said, there are some upside risks to consider, including the East coast port strikes, rising oil prices and higher shipping costs," the duo added. "We think these risks would contribute to a more gradual disinflationary process than we currently expect."" MY COMMENT No matter all the media drama and fear-mongering on this issue today......I expect this to be about a 1-2 day story. WSe will get PPI tomorrow to top off the week. I also expect a 0.25% rate cut in November regardless of the CPI and PPI readings.....but....there is some potential that they will wait till December.
Here is more on the FED views and rate cuts to come. Fed minutes reveal lively September debate about whether first rate cut should be big or small https://finance.yahoo.com/news/fed-...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif
HERE is the CPI report data: Consumer prices rose 0.2% in September, hotter than expected; annual rate increased 2.4% https://www.cnbc.com/2024/10/10/cpi-inflation-september-2024.html (BOLD is my opinion OR what I consider important content) "The pace of price increases over the past year took an unexpected step higher in September as policymakers contemplate their next move on interest rates, according to a Labor Department report Thursday. The consumer price index, a broad gauge measuring the costs of goods and services across the U.S. economy, increased 0.2% for the month, putting the annual inflation rate at 2.4%. Both readings were 0.1 percentage point above the Dow Jones consensus. Excluding food and energy, core prices increased 0.3% on the month, putting the annual rate at 3.3%. Both core readings also were 0.1 percentage point above forecast. MY COMMENT Since I live in the world of REALITY......no big deal. An annual inflation rate of 2.4% or even a "core rate" of 3.3%.....are TOTALLY in the normal range on a historic basis. The 2% FED goal is borderline deflation and a ridiculous made up number.
HERE is a better report on the data.....which actually was LOWER than August....if you ignore the "core" data. In my view the core data is simply silly. What matters with inflation is the whole figure....slicing and dicing the numbers to create sub-categories....that EXCLUDE gas and food..... is a joke. People living REAL life are not able to exempt themselves from parts of inflation.....the whole number is what really counts in terms of the impact of inflation on people. Anyone here exempt from prices of gas and food? Of course...the economists are obsessed with the "core" stuff. Inflation: Consumer price increases in September come in hotter than estimates https://finance.yahoo.com/news/infl...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif (BOLD is my opinion OR what I consider important content) "A closely watched report on US inflation showed consumer price increases ticked lower on an annual basis during the month of September but "core" prices remained sticky, according to the latest data from the Bureau of Labor Statistics released Thursday morning. The Consumer Price Index (CPI) increased 2.4% over the prior year in September, a slight deceleration compared to August's 2.5% annual gain in prices. The yearly increase came in hotter than economist expectations of a 2.3% annual increase. The index rose 0.2% over the previous month, matching the increase seen in August and also hotter than economist estimates of a 0.1% uptick. On a "core" basis, which strips out the more volatile costs of food and gas, prices in September climbed 0.3% over the prior month, stronger than economist expectations of a 0.2% uptick, and 3.3% over last year. Core prices rose 0.3% month over month and 3.2% on an annual basis in August. Inflation, although moderating, has remained above the Federal Reserve's 2% target on an annual basis. But the Federal Reserve has recently shifted its attention to the state of the labor market, which has been surprisingly resilient in the face of high interest rates. Data from the Bureau of Labor Statistics released Friday showed the labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists, while the unemployment rate fell to 4.1% from 4.2%. The strong report altered expectations about the path forward for interest rates, with traders now pricing in a smaller 25 basis point cut in November rather than another jumbo 50 basis point cut. Minutes from the Federal Reserve released Wednesday showed that while a "substantial majority" of officials favored the larger cut at its September meeting, "some" wanted the smaller option, citing a resurgence in inflation as a primary concern. Immediately following Thursday's inflation data, markets were pricing in more than an 80% chance the central bank cuts by 25 basis points in November compared to just a 50% shot one month ago, per the CME FedWatch Tool." MY COMMENT If you ignore all the scary headlines and opinion content in articles what do we know: 1. The increase of 2.4% was a slight deceleration compared to the 2.5% increase in August. 2. The core increase of 0.3% was exactly the same as in August. So basically....there was no real increase in anything....and we are basically unchanged. BUT......OMG the economists expectations.....were slightly missed. We cant have that. Everyone knows that we have to meet what the gods of the economic world decree. After all they are NEVER WRONG. My view.....never mind....move on.....nothing to see here. It will of course be a nice exercise and view of the psychology of the news media and their constant fear-mongering. I do note that the futures have gotten worse after the release.........BIG WOW.
You know as an investor....why do we do this little dance of analyst and economist expectations? Why don't we simply wait and see the REAL numbers? Why do we give.....ANY....importance to before the fact guesses by so called experts? In my world....the REAL world....what I care about is how the REAL numbers compare to the prior REAL numbers. Any reliance or expectation based on before the fact......"expert"...... guesses is simply totally flawed. Do you think that all these......"experts"......have ZERO bias? Do you think they have ZERO axe to grind? ZERO interest in manipulating the markets? ZERO loyalty and pressure and responsibility from their clients and employers? BUT...this is the little GAME we play with earnings and al economic data. It is a BIG PART of the reason that the short term is NEVER a reliable tools for actual investors. It is a big part of the TRADING GAMES that the industry plays.
I mentioned my grandparents in NC above. My other grandparents were the opposite. They lived in New Mexico in a large town and in a big, old, two story house with five bedrooms. My grandfather was a business owner and an investor. He and his brother owned the local abstract company and Savings & Loan. My mom worked in his business in the summer and was exposed to business and investing concepts as a result. This set of grandparents house was filled with native American pottery and artifacts as well as art and antiques. The house had an actual library. it was amazing to us as kids.....since I lived in normal small ranch style Military housing as a kid....and had no other contact with that sort of house or neighborhood growing up. It was a very different world from the Army bases where I lived while growing up.
And we are open and off an running for the day. It is going to take hours for the markets to settle into a direction that matters today. So.....as usual....I will sit, watch, and do nothing. ALL the big averages are open and in the RED. BOOOOOOOOORING
I start the day with a single stock in the green....AMZN. OK...it is a beginning point...for the day.
HERE is the Social Security Cost Of Living increase for 2025......2.5%. Social Security Administration announces 2.5% cost-of-living adjustment for 2025 https://www.cnbc.com/2024/10/10/social-security-cost-of-living-adjustment-for-2025-what-to-know.html As to "ME"......I will get about $110 per month more in 2025. Out of that will come $20 in increased Medicare premiums for two of us. I have found a new part D drug plan for about $19 per month per person. This is an increase of $10 per month from my current Aetna plan. My new plan will be with CIGNA. So for two of us that is a $20 per month increase. With the two above increases we will NET about......$70 per month from the 2.5% raise.
A nice gain again for me today.....kind of low-medium or high-low gain. But not bad considering. I also beat the SP500 today by 0.59%. Five of nine sticks GREEN including my large NVDA position. Moving on to Friday......and....SHOW ME THE MONEY DAY.
A very mixed day today with the economic news. I posted the CPI data above....but....here is the unemployment data from today. US weekly jobless claims surge amid Hurricane Helene distortions https://www.reuters.com/markets/us/...amid-hurricane-helene-distortions-2024-10-10/ (BOLD is my opinion OR what I consider important content) "WASHINGTON, Oct 10 (Reuters) - The number of Americans filing new applications for unemployment benefits surged last week, partially boosted by Hurricane Helene and furloughs at Boeing amid a nearly four-week-old strike at the U.S. planemaker. Initial claims for state unemployment benefits increased 33,000 last week to a seasonally adjusted 258,000 for the week ended October. 5, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week. There were large increases in unadjusted claims in North Carolina and Florida and claims also rose in Washington state. Helene, which tore through Florida and devastated large swathes of the U.S. Southeast in late September, is likely to continue distorting claims data in the weeks ahead. The labor market's short-term outlook is also likely to be distorted by Hurricane Milton, which barreled through Florida on Thursday, whipping up deadly tornadoes, destroying homes and knocking out power. Though striking workers are not eligible for unemployment benefits, their industrial action is rippling through the supply chain and other businesses dependent on Boeing, causing temporary layoffs. Boeing has announced temporary furloughs of tens of thousands of employees. The roughly 33,000 machinists at Boeing who walked off the job last month could negatively impact October's employment report, which is due to be released days before the Nov. 5 presidential election. Nonfarm payrolls increased by the most in six months in September with the unemployment rate falling to 4.1% from 4.2% in August. Economists expect Federal Reserve officials will discount any sharp decline in payrolls or rise in the unemployment rate and deliver a 25 basis points interest rate cut in November. The U.S. central bank last month cut its benchmark interest rate by an unusually large 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, highlighting rising risks to the labor market. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 42,000 to a seasonally adjusted 1.861 million during the week ending Sept. 28, the claims report showed." MY COMMENT This is a contrary indicator to the CPI data.....but....who knows how inaccurate and distorted this data is. So.....whatever.
Bull and Bear markets are part of normal investing. They are just part of the long term process. I have held through many of them over the past 55 years. Here is some good charts and data on the various market conditions over the past years. I think the "SECULAR" chart is a good one and is very important to planing.....especially retirement planing. I retired at age 49 in early 1999. You will notice that for the first NINE YEARS of my retirement we were in a nasty SECULAR BEAR MARKET. Not a happy thing when you are retired and living on your personal assets. Events like this early in retirement are EXTREMELY DANGEROUS for your retirement working out as planed. Defining Bull and Bear Markets https://awealthofcommonsense.com/2024/10/defining-bull-and-bear-markets/ (BOLD is my opinion OR what I consider important content) "A reader asks: I’ve heard Ben mention several times recently that we are in year 15 of a bull market. He’s obviously referencing the end of the GFC in 2009 as the start of the current market cycle. Have we not had two bear markets in 2020 and 2022 (defined as -20% from the high)? When you had Tom Lee on last year (TCAF) he said 2024 was going to be year 2 of a bull, so he’s got a different definition. Can you please explain what people in the finance community use to define ends/beginnings of cyclical markets? Here’s the chart in question from a recent blog post: Did the bull market from 2009 get reset in 2020 or 2022? Or should we keep it going just like we did with the 1987 crash during that bull market? The problem is these things aren’t exactly scientific. There are some loosely accepted definitions but you have secular bull and bear markets as well as cyclical bull and bear markets. Things can get murky since different investors have different rules when it comes to hitting the reset button and starting over. One standard definition is a loss of 20% or more means the start of a bear market and end of a bull market, at least on a cyclical basis. Yardeni Research publishes some handy historical bull and bear market tables1 going back to the 1920s. Here’s the bull market table: And the bear markets: You can see there are plenty of both bull and bear markets. Here’s a chart we created that allows you to visualize these cycles: It is important to recognize that using this 20% definition puts many of these bull and bear markets in the cyclical stage. The problem is many of them were just countertrend rallies or downturns within the context of a broader long-term uptrend or downtrend. For example, there was a cyclical bull market from the end of 1929 through early 1930 when stocks rose ~50%. The Great Depression crash didn’t technically bottom until 1932. No one looks back at that dead cat bounce as a bull market. It was a minor reprieve during a massive downturn. The 1987 crash was the opposite. No one really thinks the 1980s bull market ended in 1987. That was a countertrend crash but the bull market charged higher for many years after that. The Covid crash was our 1987 moment. And the 2022 bear market was run-of-the-mill not some giant financial crisis that altered the secular uptrend. Take a look at my version of secular bull and bear markets: So while there are 20+ cyclical bull and bear markets over the past 100 years or so, there have really only been six secular longer-term periods. The extended secular bull market from 1942-1965 is a good example of why you can’t call an end to a long-term bull market just because stocks were in a technical bear market. In this time frame, the S&P 500 was up almost 13% after accounting for inflation, but there were setbacks along the way. I count four bear markets: 1946 -26.6% 1948-1949 -20.6% 1957 -20.7% 1961-1962 -28.0% There is a difference between a bear market and a crash. There have also been a handful of 19% and change corrections over time. I count four since the mid-1970s — in 1976-1978 (-19.4%), 1990 (-19.9%), 2011 (-19.4%) and 2018 (-19.8%). If we’re being generous we could round those up. It’s not like a 20% loss feels any worse than a 19% loss. The one big difference between the current run and previous versions is that this secular bull market started at the very bottom of an earth-shattering bear market, which wasn’t the case in previous bull runs. The stock market bottomed in 1932 but the bull market didn’t start until 1942. The stock market bottomed in 1974 but the bull market didn’t start until 1982. This time around the stock market bottomed in 2009 and the bull market started immediately. There was no sideways move following the Great Financial Crisis, just a giant V-shaped recovery. What changed? Basically, we now get bazookas fired by the government and the Fed. Monetary and fiscal policy are used during financial crises on a scale we’ve never seen before. During the Great Depression, the Fed and government worsened the situation by tightening spending and Fed policy. We’ve learned our lessons from the past. I’m not saying we can’t have extended bear markets anymore. We can and will. But the addition of fiscal and monetary stimulus during the worst downturns means the snapbacks will likely come quicker than they did in the past (assuming that stimulus doesn’t go away). Is this entire conversation a bit of semantics? Yes. But so are most historical stock market conversations because markets don’t operate like physics. Most of the time we can’t define these things until after the fact. And that’s what makes them interesting to argue about. There are no scientific relationships in the markets so we have to make stuff up as we go." MY COMMENT Some interesting historical data. Especially for me since I have been a fully invested all the time investor for the past 55 years and have been in the markets for that entire time except for the time span of about March 2008 to March 2009 when I sold out due to a SIGNIFICANT......"possibility"......of a world wide economic and banking collapse. This stuff is CLEAR in hindsight......but......when it is happening it is far from clear and impossible to predict. So....I simply stay invested all the time. This is a strategy that the academic research shows it the best "PROBABILITY" for an investor. As I said above I retired at a very early age....49. I was immediately hit with a NINE YEAR BEAR MARKET. An event like this early in retirement can be a disaster. It is critical that any person relying on personal assets....especially money in stocks.....be extremely careful with their cash reserves and plans for how they intend to manage and preserve their retirement money over what could be.....20-30 years of retirement with no income.
I have been market watching since the open today. It was not a happy open.....although it was in line with what we have been seeing lately. We have steadily moved into the green since the open. This is also in line with what we have seen in the markets lately. The obvious BIAS.....continues to be UP for the markets and we are seeing that daily.
We have now started earnings season once again.....they never seem to end.....with the BIG BANK earnings starting us out as usual. PMorgan's profits fall 2% despite strong Wall Street performance https://finance.yahoo.com/news/jpmo...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif Wells Fargo earnings: Bank posts 11% net interest income decline https://finance.yahoo.com/video/wel...f-8jlcqOmp62GxLKMaFT2rEshtmpjFuQTBOCiLZsmL3Lp Banks Drive S&P 500 Gains as JPMorgan Rallies 5%: Markets Wrap https://finance.yahoo.com/news/asia...ZPodXFADTAlgNG3pM_VNOWjz4sDKbyFtDaDlaIFF6GD-T MY COMMENT I have nothing to say about the bank earnings....I dont care about them. Banks are one industry that I avoid.....along with oil companies, car companies, insurance and financial companies, drug companies, health care stocks....and probably a few others that I am not thinking of right now. Of course....as is obvious...my investing focus is BIG CAP CONSUMER companies. I put all the big cap TECH companies into the BIG CAP CONSUMER category....in my mind. I am very TIRED of seeing Jamie Diamond in the media giving his little negative market comments lately. I wish he would just SHUT UP.
I am INTENTIONALLY not going to post the consumer confidence data that came out today. I see that sort of data as.....simply WORTHLESS. Sentiment is often totally out of touch with investing REALITY....which is driven by fundamental earnings data. Of course this sort of....."sentiment data"...is probably very relevant to the election in about 3.5 weeks.
HERE is the markets today. Stock market today: Stocks rise amid big bank earnings, inflation data https://finance.yahoo.com/news/live...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif
On one BIG financial site that I scan daily.....I saw absolutely NOTHING about the PPI......amazing. Here it is: Wholesale prices were flat in September, below expectations https://www.cnbc.com/2024/10/11/producer-price-index-september-2024-.html (BOLD is my opinion OR what I consider important content) "Key Points The producer price index was flat for the month and up 1.8% from a year ago. Economists surveyed by Dow Jones had been looking for a monthly gain of 0.1%. Excluding food and energy, the PPI rose 0.2%, meeting expectations. A 0.2% decline in final demand goods prices offset a 0.2% increase in services. A measure of wholesale prices showed no change in September, pointing to a continued easing in inflation, the Labor Department reported Friday. The producer price index, which measures what producers get for their goods and services, was flat for the month and up 1.8% from a year ago. Economists surveyed by Dow Jones had been looking for a monthly gain of 0.1% after August’s increase of 0.2%. Excluding food and energy, the PPI rose 0.2%, meeting expectations, and was up 2.8% from a year ago. The report comes a day after the Labor Department reported that the consumer price index, a more widely followed inflation measure that shows what consumers actually pay for goods and services, had an increase of 0.2% for the month and 2.4% from a year ago. Markets showed little reaction to the data, with stock market futures pointing slightly higher on Wall Street while Treasury yields rose on longer-duration securities. Together, the releases indicate that inflation is off its blistering pace that peaked more than two years ago but still mostly holds above the Federal Reserve’s 2% target. While neither is the Fed’s primary inflation gauge, they both feed into the personal consumption expenditures price index that policymakers prefer. Following the releases, multiple economists said they expect the PCE deflator to show an increase of about 0.2% or slightly more for the month when it is released near the end of October. “The latest PPI and CPI data don’t disrupt the disinflation narrative and yet remind us we aren’t on a smooth glide slope to 2%,” said Oren Klachkin, markets economist at Nationwide Financial. Within the PPI, a 0.2% decline in final demand goods prices offset a 0.2% increase in services. Excluding trade services from core PPI, the index increased 0.1%. A 3% jump in deposit services costs pushed the services index higher, while professional and commercial equipment wholesaling prices tumbled 6.3%. On the goods side, a 2.7% slide in final demand in energy was the main factor in the decrease. Similarly, the index for gasoline fell 5.6%, holding back gains on the goods index. Diesel fuel prices plunged 17.6%. Fed officials in recent days have expressed confidence that inflation is heading back to target even though some aspects, such as shelter, food and vehicle costs, have held stubbornly higher. Minutes from the September central bank meeting indicated policymakers were divided over the decision to slash the Fed’s benchmark interest rate by half a percentage point. Most officials say they expect to continue to cut as long as the data indicates. Markets anticipate the Fed to lower by a quarter percentage point at each of its two remaining meetings this year." MY COMMENT I think this data along with the flat CPI data pretty much seals the deal....for a 0.25% rate cut in November and December and further cuts into next year. Of course...there will be many economic reports along the way. I did find it interesting that I see little comment on the PPI data in the media today....I guess they could not find anything in it to FEAR MONGER for clicks and sensationalism. I do think this data is a large contributor to the nice rally we are seeing today.....especially in the DOW.
As I said.....I wish this guy would just......STFU. Jamie Dimon says geopolitical risks are surging: ‘Conditions are treacherous and getting worse’ https://www.cnbc.com/2024/10/11/jpm...ical-risks-treacherous-and-getting-worse.html
