The Long Term Investor

SO....based on the above....simply another NORMAL day in the short term market world.

 

Now that the markets have settled into the day some.....we are at the real start to the market day and the last day of the week. I currently have six on nine stocks in the GREEN. A good start to the day.

LETS KEEP IT GOING AND END THE WEEK STRONG.

There is much......."JOY"......in the markets lately as they...."FIGHT, FIGHT, FIGHT".

 

I am logged in to a live auction right now. it has a painting that I am going to bid on for my kid.

It started at 10:00. The lot I am interested in does not come up till about 4-5 hours from now. I want to watch the first hour or two to get a feel for how many items they are doing per hour. Most of the time auctions like this one tend to do about 60 items per hour.

At the same time I am listening to VARNEY in the background and scanning various financial and news sites.

 

Ok.....a semi-good day since I got the painting that I was after at the auction for $562.

BUT...on the other hand when we got home the refrigerator was not running. It was blowing the breaker and would not run. So we are out $1450 for a new one. Over the past six months we have replaced two evaporators in the AC units at a cost of $2500 each. AND....I just had a $550 plumbing repair this week.

The only good thing is the fact that we are able to afford it.

 

I ended today with a very small gain....but at least I was in the GREEN today. I got beat by the SP500 by 0.55% today. All in all....it was a very good week for me.

 

Here is the week.

DOW year to date +13.65%
DOW five days +1.36%

SP500 year to date +22.61%
SP500 five days +1.35%

NASDAQ 100 year to date +22.55%
NASDAQ 100 five days +1.63%

NASDAQ year to date +24.22%
NASDAQ five days +1.45%

RUSSELL year to date +11.01%
RUSSELL five days +1.28%

FOR me I ended the week with my entire account at a year to date of.....+59.04%. Last Friday I was at....+54.58%. It was a really good week.

 

HAVE A GREAT WEEKEND EVERYONE.

 

I believe that the current BULL MARKET can last for at least another 1-2 years.....and....if the election turns out in the best way for the economy....perhaps for another 4-5 years.

The bull market is 2 years old. Here's where Wall Street thinks stocks go next.

https://finance.yahoo.com/news/the-...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

(BOLD is my opinion OR what I consider important content)

"The bull market in the S&P 500 (^GSPC) began two years ago and is showing few signs of slowing.

Backed by the rise of artificial intelligence euphoria and a surprisingly resilient US economy, the S&P 500 has gained more than 60% in the past two years and is hovering near an all-time high.

Wall Street strategists who spoke with Yahoo Finance believe the bull can keep running wild. Barring any unexpected shocks, the path higher appears to be clear, with earnings growth expected to keep accelerating and the economy on seemingly solid footing as the Federal Reserve cuts interest rates.

A bull market for the S&P 500 was officially declared in June 2023 when the index rose 20% from its recent bear market low. History says this bull market still has legs. At two years, the bull market is well shy of the average run of 5.5 years. And the total return thus far, about 60%, is a far cry from the average 180% gain, per research from Carson Group chief market strategist Ryan Detrick.

In the past few weeks, several Wall Street equity strategists have made the case for the benchmark index to rise further into both year-end and into 2025, supported by accelerating earnings for the S&P 500.

"We continue to be surprised by the strength of market gains and decided yet again that something more than an incremental adjustment was warranted," BMO Capital Markets chief investment strategist Brian Belski wrote in a September note when raising his year-end price target for the S&P 500 to a Street high of 6,100 from a previous target of 5,600.

On Oct. 4, Goldman Sachs boosted its year-end target to 6,000 and initiated a 12-month target of 6,300. Goldman Sachs chief equity strategist David Kostin did note, though, that already high valuations could limit the upside for how far the index can reach in 2025.

Risks to the rally

Strategists who spoke with Yahoo Finance agreed with Kostin that already stretched valuations present a challenge to how much higher stocks can go. Charles Schwab senior investment strategist Kevin Gordon noted that dating back to the mid-1960s, the only time valuations have been this stretched on a trailing 12-month price-to-earnings ratio were 2021 and the dot-com bubble of the late 1990s.

"This would tell you that the bull is much older or somewhat near the end of this life," Gordon said.

But strategists often warn that a high valuation itself isn't a proper tool for calling the end of a bull market. Stocks can trade at what are considered to be expensive valuations for longer than expected. What that does tell investors is that much of the good news that could push stocks higher might've already been priced in.

"If you look at what the market's discounting right now, we'd say front and center, a big chunk of what's being priced in is a soft landing sentiment," Citi equity strategist Scott Chronert told Yahoo Finance.
Piper Sandler chief investment strategist Michael Kantrowitz noted that high valuations themselves aren't why bull markets end. There needs to be a catalyst. He explained there are two common reasons market drawdowns happen: a spike in interest rates or a rise in the unemployment rate.

With inflation well off the boil of 2022 and the recent increase in unemployment stalling out, neither of the two downside catalysts are clearly in view.

There could, of course, be a surprise no one sees coming. But "it's a little bit harder to see where the shock comes from," Chronert said. "If things continue to play out incrementally, investors can handle a little bit of a change [to the economic narrative] here, a little bit of a change there ... It's when you get a more immediate unraveling, and it's hard to really say that immediate unraveling is going to come."

This sets the market up for a narrative shift. To Kantrowitz, the currently expensive valuations show that the bull market is likely moving from a macro-driven environment, where factors like inflation falling and other signs of economic resilience have pushed stocks higher, to one that is more based on the fundamentals.

"For this market to continue moving higher, and particularly to determine what stocks lead, it's going to be all about earnings," Kantrowitz said.

The bar for earnings remains high. Consensus estimates project earnings to grow nearly 10% in 2024 and almost 15% in 2025. The key for investors remains finding which sectors are seeing earnings growth accelerate rather than just staying steady.

And , according to Chronert, part of that story could come down to the two letters that defined the first part of the bull market: AI.

Chronert, who said his team is still a holder of the "Magnificent Seven" tech cohort, doesn't doubt that the AI narrative will continue to manifest itself in the market. But after significant gains seen in those tech stocks over the past two years amid large earnings growth, focus may continue to shift to the broadening impact of AI on companies that aren't making the AI chips or the cloud servers operating the new technology.

For AI to continue to have broader impact on the market and keep pushing earnings growth for the index above expectations, "you've got to have more companies delivering on the AI promise via margins [and] profitability metrics," Chronert said.

He added, "It would be that sort of thesis that has to play out, and that's going to take two to five years.""

MY COMMENT

Nothing...has changed in terms of what makes for a booming and successful economy. Nothing....has changed in what it takes for regular people to see financial success and live a good life. The key:

* Less government, less bureaucracy.
* Less government regulation.
* Lower taxes for people and companies.
* A good strong oil, natural gas, and energy environment.
* Free market capitalist principles.
* Smart business friendly policies.

Based on my over 55 years of investing experience EVERY TIME we emphasize the above the economy BOOMS....often for the very long term. I saw it with the REGAN ERA BOOM which extended from the 1980's all the way to the late 1990's. I have seen the same success caused by the same factors other times in my life here in the USA and in various foreign countries. It is that simple.

I dont care about politics. I dont care what party gives me the above. What I care about is a great business environment that pulls up the entire country. If you think in terms of business and investing....it is obvious what leads to success for the greatest number of regular people and the country.

 

I doubt that anyone has even thought of this.

Oct. 14 is the second Monday of October, the date that Columbus Day is celebrated in the U.S........will stock markets will be open for trading?

The New York Stock Exchange (NYSE) and Nasdaq largely follow the calendar of federal holidays for closures,........but.....both will be open and operating normally on Monday.

The two remaining holidays on the calendars for 2024 are Thanksgiving and Christmas, the markets will be closed on those days and will have shortened hours on the day after Thanksgiving and on Christmas Eve.

 

The SP500 has now hit my year end prediction made at the start to the year......5800. My......NEW..... year end target......6000. It is an EPIC year for investors.

Dow jumps 400 points to a record on Friday, S&P 500 closes above 5,800 for the first time

https://www.cnbc.com/2024/10/10/stock-market-today-live-updates.html

 

Here is the other Social Security news. i posted the cost of living raise for 2025. Here is the hit to your pocket book....if you earn enough...for 2025 or if you are an employer.

Social Security payroll tax limit increases for 2025. Here’s how that may affect you

https://www.cnbc.com/2024/10/11/social-security-payroll-tax-limit-2025.html

Key Information

• The Social Security Administration just announced the new higher threshold for earnings subject to Social Security payroll taxes for 2025.
• The “taxable maximum” will be $176,100, up 4.4% from $168,600 in 2024.
• The current Social Security tax rate is 12.4%, with workers paying 6.2% and employers 6.2%. The government collects 2.9% in Medicare taxes, with no cap on earnings.

As a former seelf employed business owner...here is how it works for those of us that are self employed:

The adjustment is more significant for self-employed workers because “they pay both sides of it." They also pay both sides of the Medicare tax. The total for those that are self employed....drum roll please....15.3%. Part of the FUN of being a small business owner.

 

As to the record close for the SP 500....it is now at 5815. It is UP by +22.61% for the year. it also pays a pretty nice dividend yield....of about 1.24% at this moment.

It has been an EPIC year for those that follow the simple investing plan of just plopping their money into a SP500 Index fund. AND....added bonus....there is good potential to add another......1-3%....by year end. Perhaps a bit more if we are....VERY LUCKY.

Any year you can be near a 25% gain is.......EPIC.

 

I am tired of auctions.

I bid by telephone at a couple of different auctions this weekend. I bought two paintings for my kid and two for myself. I have one more auction next Saturday where I am going to bid on three paintings for my other kid. My plan is to complete this upcoming auction and then not buy anything else till 2026.

Of course you know what Mike Tyson says about plans....."Everyone has a plan until they get punched in the face".

 

I have been reading and....basking in the golden glow....of the market open today. It is a very strong open for me and most investors that own realistic and reasonable stocks and funds.

NOW.....lets see if we can hold on for the next.....SIX.....hours. I suspect we will.

 

If you care about the short term events that will happen this week....here you go.

Retail sales, big banks' results, and Netflix earnings: What to know this week

https://finance.yahoo.com/news/reta...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

(BOLD is my opinion OR what I consider important content)

"Stocks closed another week at record highs as investors began to digest quarterly earnings releases and debate intensified over what the Federal Reserve will do at its November meeting.

For the week, the Nasdaq (^IXIC), the S&P 500 (^GSPC), and the Dow Jones Industrial Average (^DJI) all rose more than 1%, with both the Dow and S&P 500 closing at all-time highs Friday.

In the week ahead, a monthly report on retail sales will lead the economic calendar as investors assess whether or not the economy is reaccelerating following a surprisingly strong September jobs report.

In corporate news, the results from Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) will round out earnings from big banks, while reports from United Airlines (UAL) and Netflix (NFLX) will also highlight the week.

A building case for no-cut November

In the past week, speculation that the Federal Reserve will not cut interest rates further at its November meeting has been growing. The September jobs report, which included another decline in the unemployment rate and one of the highest monthly payroll addition numbers of the year, helped ease fears that the labor market was rapidly deteriorating.

On Thursday, the latest Consumer Price Index (CPI) report showed core prices increased more than expected. On Friday, the latest Producer Price Index (PPI) told a similar story, with core prices increasing 2.8%, compared to Wall Street's expectations for a 2.6% increase.

Some have argued that given this data — as well as recent minutes from the Fed's September meeting revealing "some" officials would've supported a smaller interest rate cut — the central bank is likely to hold rates steady in November.

"As long as inflation isn't getting towards 2% so dramatically and there's no crisis that unfolds in the labor market, which I don't foresee, I don't think there's anything that gives the Fed reason to cut further this year," Yardeni Research chief markets strategist Eric Wallerstein told Yahoo Finance.

As of Friday, markets were pricing a roughly 18% chance the Fed doesn't cut in November, up from a 3% chance seen a week prior, per the CME FedWatch Tool.

Retail reading

Stronger-than-expected economic data has helped drive the "no cut" discussion. Investors will have another update in that department this week with the release of the September retail sales report on Thursday.

Economists expect that retail sales increased 0.2% in September from the prior month. In August, retail sales rose 0.1%, defying the decline economists had projected.

"Retail sales, in particular, could be a significant market mover as variance in the series has increased, and scrutiny over the health of the consumer has intensified," Jefferies' economics team led by Thomas Simons wrote in a note to clients on Friday. "We would warn that one should not read too deeply into a miss against consensus (upside or downside) because retail sales measures spending with a very heavy weighting towards goods rather than services, and it is measured in nominal terms. Weakness may just be due to continued disinflation or deflation in goods."

Netflix takes the big screen

Big banks largely passed Wall Street's test to open earnings season. Investor focus will remain on financials early in the week with reports from Morgan Stanley, Goldman Sachs, and Bank of America before shifting to Netflix results on Thursday after the bell.

The streaming giant's stock is up about 50% this year and trading near an all-time high. Wall Street expects Netflix to report earnings per share of $5.16 on revenue of $9.77 billion. This would represent nearly 40% earnings growth compared to the year prior.

But Wall Street is heavily debating whether or not the stock can sustain its massive run. In the near term, Citi analyst Jason Bazinet believes Netflix announcing further price hikes in the US could be a catalyst for the stock.

"We expect Netflix’s stock to trade higher on a US price hike announcement, but we would expect shares to eventually trade lower as investor’s hopes for $25 in 2025 earnings per share are dashed," Bazinet wrote.

Yields on the rise

The 10-year Treasury (^TNX) is hovering near 4.1% for the first time since late July.

The 10-year has now added roughly 30 basis points over the past week as investors have scaled back their expectations for interest rate cuts amid signs that inflation may be stickier than initially thought while economic growth data holds steady.

For much of the past few years, higher yields have been a headwind for stocks. But Piper Sandler chief investment strategist Michael Kantrowitz told Yahoo Finance on Thursday yields likely have not risen enough to be too much of a headwind just yet.

"I don't think this backup in interest rates is all that worrisome for equities in aggregate," Kantrowitz said. "But where it does show up is in leadership."

Kantrowitz pointed out that areas like Real Estate (XLRE) and the small-cap Russell 2000 Index (^RUT), which had benefited from investors anticipating lower rates, have lagged amid the 10-year yield's recent rise.

For now, Kantrowitz added, rising rates are determiningmarket leadership more than they are weighing on the S&P 500 index.

"If rates keep going higher, I don't think it's a massive issue for equities unless it persists for, I'd say, a few months," he said."

MY COMMENT

My view on some of the above.

NO....I dont care much about the retail sales data.....is is totally backward looking and I believe that sort of data is particularly irrelevant and distorted in the current economic environment.

Rate cuts.....yes....I see a 0.25% rate cut in November and December. it would be FOOLISH for the FED to skip November. A small cut in November will not do any harm at all and will give them time to evaluate where we are and at the same time hedge against the recession side of the economic equation. On the other hand no cut in November......will simply be a fear-mongering vehicle...... for the media especially if we see a good round of cuts starting in December.

The Ten Year yield....YAWN.....in a rate cut environment with inflation dropping....there is no way this short term bump up can continue for long.

BOTTOM LINE......happy days for long term investors ahead.

 

HERE is the rally we are seeing today. It is just a matter of hours or days before NVDA hits an ALL TIME HIGH. WOW....it is too bad that it has been......STUCK. (see prior post)......LOL.

Nasdaq jumps, S&P 500 trades at record high with earnings on deck

https://finance.yahoo.com/news/live...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

 

Remember all the fear-mongering stories about Blackwell just a few weeks ago? Guess what....it was all.....BS.

Nvidia Rides Fierce Blackwell Demand Toward Stock Record Again

https://finance.yahoo.com/news/nvid...f-8jlcqOmp62GxLKMaFT2rEshtmpjFuQTBOCiLZsmL3Lp

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- Nvidia Corp.’s shares are roaring back after the company successfully calmed investor concerns about product delays and its long-term growth prospects.

The stock is up 13% so far this month and on track for its first record close since June, though it remains below an intraday peak. It’s the second-best performer in the S&P 500 Index this year.

Recent strength came after CEO Jensen Huang said Nvidia’s Blackwell chip “is in full production,” and that demand for it “is insane,” comments that came after Blackwell was delayed due to engineering snags, prompting a selloff that has now been erased. In addition, a report last week from Morgan Stanley analysts who met management said that Blackwell orders “are booked out 12 months or so,” with “every indication that business remains robust with very high forward visibility.”

Shares gained 2.2% on Monday.

The comments cement the view that Nvidia is still a favored way to invest in artificial intelligence, especially as major companies remain committed to their AI initiatives. Microsoft Corp., for example, is projected to boost capex spending by nearly a third in fiscal 2025 to about $58 billion, according to the average of analyst estimates compiled by Bloomberg.

“There had been questions about the impact production delays could have, so these updates are reassuring,” said Zehrid Osmani, portfolio manager at Martin Currie Investment Management.

Beyond the Blackwell optimism, recent sales from Taiwan Semiconductor Manufacturing Co. showed strong AI demand, while a funding round for OpenAI resulted in a $157 billion valuation. OpenAI recently released an AI model with reasoning capabilities, something Alphabet Inc. is also working on.

These events “have driven a reinvigoration of interest in the space, and people are really getting excited about the use cases for reasoning-based AI,” said John Belton, a portfolio manager at Gabelli Funds. “Reasoning represents a new area for Nvidia, and when you consider how compute-intensive it is, this could be a huge new product category.”

Belton views Nvidia as a core holding and sees AI offering “a steady drumbeat of demand” for years. “It’s not an undiscovered stock, but the valuation is still reasonable if it can deliver the numbers that are expected.”

Analysts expect Nvidia’s revenue to more than double in its current fiscal year, and rise another 44% the following one, according to data compiled by Bloomberg. The Street has continually raised estimates for Nvidia’s earnings and profit over the past quarter.

Nvidia’s strong growth prospects have kept its valuation in check, helping bulls support their case to keep buying. It trades around 37.5 times estimated earnings, which represents a premium to the Nasdaq 100 Index, but is below its five-year average and under a June peak of more than 44 times.

“Nvidia still looks formidable,” said Osmani, of Martin Currie. “It remains really well positioned to harness the AI opportunity.”

Signs of optimism have also been flashing in the options market. On Thursday, there was a wave of purchases in calls that allow holders to buy more than 30 million shares at levels from $150 to $189 through March. Nvidia closed at $134.80 on Friday.

The cost of calls relative to bearish put options — known as the skew — has fallen, making it cheaper to bet on a further rally. The contracts won’t expire until after Nvidia’s fourth-quarter earnings release, expected in late February.

“The stock will remain volatile and orders will be lumpy,” said Dan Flax, managing director and senior research analyst at Neuberger Berman. “But so long as Nvidia executes on its product road map, that will drive the kind of healthy growth that keeps the stock attractive.”"

MY COMMENT

YES....even at the current price I see this stock as a CORE HOLDING.

Of course...you dont have to actually buy the shares. A simple investment in the SP500 or the NASDAQ 100 will get you a good investment in this company as well as the rest of the GUTs of the USA business world.