The Long Term Investor

RTN and anyone else reading or posting here that is in CA.....be safe.

 

Here is my earnings calendar......at least for now. I am sure some of these will change as they get closer.

AAPL 1-30-25
PLTR 2-3-25
GOOGL 2-4-25
CMG 2-4-25
MSFT 2-4-25
AMZN 2-6-25
HD 2-25-25
NVDA 2-26-25
COST 3-6-25

 

We have a very busy week this week for the markets. It is......EARNINGS....time.

HERE are the important events and happenings this week.

"The Producer Price Index for December, due Tuesday before markets open, is expected to show a 3.5% year-over-year gain, according to FactSet. That would be higher than November's 3% year-over-year gain.

The Consumer Producer Price Index, due Wednesday before the market open, is expected to show a 2.8% year-over-year gain, up from November's 2.7% gain, FactSet estimates."

https://finance.yahoo.com/news/busy-calendar-challenges-rock-markets-074603883.html

AND


"Banks and financial companies will dominate the headlines starting Wednesday with six of the biggest: Bank of New York Mellon (BK) , Wells Fargo (WFC) , JP Morgan Chase (JPM) , Citigroup (C) , Goldman Sachs (GS) and money manager BlackRock (BLK) .

UnitedHealth Group (UNH) , Morgan Stanley (MS) , Bank of America (BAC) and U.S. Bancorp (USB) follow on Thursday.

With them on Thursday is Taiwan Semiconductor (TSM) , the giant fabricator of semiconductors and a key player in artificial intelligence."

https://finance.yahoo.com/news/busy-calendar-challenges-rock-markets-074603883.html

Lots of good discussion on these and other issues this week in the little article noted above:

A busy calendar and new challenges will rock markets this week

https://finance.yahoo.com/news/busy-calendar-challenges-rock-markets-074603883.html

 

Look at those rates that SMOKIE posted. For anyone that has "safe" cash sitting around it is a very good time to lock in some good CD or other "safe" rates.

 

Tell this to the speculators, traders and AI TRADING PROGRAMS. They will not care......they simply want to make money from scary headlines and fear-mongering content....even if it is NOT true. And....other than this little article....I bet you will not see the info in here anywhere else.....after all it is positive information from a FED member......and....does not fit the current DOOM&GLOOM scenario.


CNBC Daily Open: Good news need not always be bad news for markets

https://www.cnbc.com/2025/01/13/cnb...-need-not-always-be-bad-news-for-markets.html

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

What you need to know today

Explosion of jobs in December

U.S. nonfarm payrolls surged 256,000 in December, up from 212,000 in November and above the 155,000 forecast from the Dow Jones consensus, the U. S. Bureau of Labor Statistics reported Friday. The unemployment rate ticked down to 4.1% from 4.2% in November. Economists expected the rate to stay the same in December.


U.S. markets in the red for 2025

Markets in the U.S. slumped on Friday after the expectation-busting jobs report for December was released. Major U.S. indexes are now in the red for 2025. The pan-European Stoxx 600 index lost 0.84%, with all major bourses closing in negative territory. Euro zone government bond yields climbed to fresh multi-month highs.

..........

The bottom line

December’s job additions were 100,000 more than expected by Dow Jones consensus estimates.

Investors worried that the Fed may stay hawkish in response to the hot labor market. The market-implied probability of just a single cut this year increased to 68.5% after the jobs report, according to the CME Group’s FedWatch gauge.

Bond yields, which have already been elevated in recent weeks, jumped further on the release of the jobs report. The 10-year Treasury yield hit its highest level since November 2023.

The market sell-off after the release of the jobs report was prompt and not unexpected. The S&P 500 slid 1.54%, the Dow Jones Industrial Average dropped 1.63% and the Nasdaq Composite lost 1.63%. All major indexes are now in negative territory for 2025.

Good news is bad news for investors, as the hackneyed phrase goes.

But we should remember circumstances are different now than they were during the peak of inflation.

The U.S. Federal Reserve might not be as worried about a robust labor market this time. On the contrary, strong jobs growth probably reassures it, considering that concern over the employment rate was one of the reasons why the Fed decided on a jumbo 50-basis-point rate cut in September.

“You’re never going to hear me complain that we got 250,000 jobs,” Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk on the Street.” Goolsbee also noted that inflation over the past six months has been around 1.9%, or just below the Fed’s target.

In times when inflation is lower, strong employment numbers are a sign of a resilient economy.

And economic growth ultimately “means the potential for better earnings, less risk of a recession, and that’s really going to dictate longer term returns versus a sell-off in today’s market,” Adam Turnquist, chief technical strategist at LPL Financial, said.

In other words, good news can just be good news, if investors look beyond the immediate present."

MY COMMENT

GEE....there are actually "positive" comments from people on the FED. GEE.....inflation for the past SIX MONTHS is about 1.9%.

And.....GEE....lets see.....

"strong employment numbers are a sign of a resilient economy".....and economic growth which...... “means the potential for better earnings, less risk of a recession, and that’s really going to dictate longer term returns versus a sell-off in today’s market....."

WTF......who would have ever known this. Why....this fly's in the face of all economics......imagine......that a strong economy is actually good for the country, employees, business, and investors. What a NOVEL concept. Simply.....MIND BLOWING.

 

We start the new week....same as the old week. At the open I am in the red in EVERY stock. Nothing I can do about it....I cant fix STUPID.

I hear various excuses on the business shows and in the media. Bottom line none of them make economic or investing sense.

The best of the bunch that I heard today is that the professional traders use massive leverage which means borrowed money......and....with the higher rate in the Ten Year Treasury they are having to sell off positions.....and the easiest positions to sell off are TECH.

This sounds good but I dont know if it is actually true. My brain tells me that it is more likely the usual....AI PROGRAM TRADING......thriving on the negative headlines and content that dominates the media right now. With all of them acting in concert...it becomes a massive self fulfilling event that takes on a life of its own.

I did put up some posts over the weekend about what I see as the probability for a correction. At this point we appear to be being pushed in this direction by events and market action.

Sooner or later these nasty days will start to impact longer term investors. We will start to see panic and fear selling as people start to freak out and sell to try to protect past gains. The bottom line.....we end up in a correction which I believe will last for 3-6 months.

As I said I see this as about 50/50 odds. Even with these odds I am leaning to the correction side of things at the moment.

The ONLY thing I can see that might stop this event is EARNINGS....but....judging by how the markets have treated earnings over the past 2-4 years.....I would not pin a lot of hope on earnings making any difference in the face of massive media negativity and the big traders and skittish little investors moving the markets down.

 

Of course......the above is far from set in stone. The markets are expert at fooling everyone....up or down. So....there is no way I would try to trade or market time what is going on right now and where we might end up over the next six months.

I will simply sit and do nothing as usual. I will continue to be fully invested for the long term as usual....even if we do end up in a nasty correction that lasts till about May or June......or.....somewhere in-between.

 

BUT....I do like this little article.

Trading “good news is bad news” has limits if your attention span is longer than a day

https://sherwood.news/markets/the-limits-of-trading-good-news-is-bad-news/

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

"AS stocks are taking their lumps after surprisingly solid job growth in December saw the unemployment rate dip and Treasury yields rise. In the wake of this print, economists at Bank of America are saying that they no longer expect any more rate cuts from the Federal Reserve.

The SPDR S&P 500 TrustSPY $577.65 (-0.49%) is down as much as 1.7% as of 12:15 p.m.

This jarring disconnect — stocks going down on jobs going up — gives rise to such quips as “good news (for the economy) is bad news (for the stock market),” or reminders that “the stock market is not the economy.”

To the contrary: for everything but the short term, the stock market is the economy.

Any stock-market bull who isn’t a day trader is pretty much always rooting for US job growth. During the past 30 years, the direction of six-month change in the stock market has been the same as the job market nearly 80% of the time.

And every bear market in the S&P 500 over the past three decades has come when the US economy was in recession or suffering from generationally high inflation.

Need more evidence of the symbiosis between Corporate America and the American economy? Over the past 30 years, any time analysts cut the S&P 500’s 12-month forward-earnings estimate by 10%, the economy has been in recession.

The idea that the stock market is always and everywhere rooting for lower interest rates, even if it requires outright weakness in the US job market to get them, is not consistently borne out by the data, to say the least.

The stock-bond correlation — that is, whether those two assets tend to move in the same or different directions — is highly regime-dependent based on whether or not investors fret more about elevated inflation (which tends to foster a positive correlation) or growth being too low (which tends to fuel a negative correlation).

We’re seeing stocks sell off today amid concerns that a strong labor market might preempt any additional easing from the Federal Reserve; in August, we saw stocks crater amid worries that the Federal Reserve wouldn’t be able to cut rates fast enough to prevent job losses!

As we discussed in our top charts to watch for 2025, every 3% drop in the S&P 500 in 2H 2024 coincided with times when we thought the Fed would cut a lot in 2025, or barely at all. Based on today’s price action, we’ve just reentered “barely at all” territory."

MY COMMENT

I agree with the above. BUT......short term we will just have to deal with the CRAZY TOWN markets.

 

Here is the market today and probably all week.

S&P 500 slides as key tech stocks get hit, Nasdaq drops more than 1%

https://www.cnbc.com/2025/01/12/sto...of-key-data-earnings-season-live-updates.html

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

"Stocks slipped Monday as key tech shares that have led the bull market continued to be dumped by investors.

The S&P 500 lost 0.7%, and the Nasdaq Composite dropped 1.4%. The Dow Jones Industrial Average
was the relative outperformer, rising 110 points, or 0.3%. All three benchmarks are down for the last two weeks, with tech shares causing most of the damage.

Palantir and Nvidia, two of the bull market leaders popular with retail investors, shed more than 3% each — building upon their losses from last week. Nvidia fell nearly 6% during the period, while Palantir lost 11%. Other popular tech shares including Tesla and Micron were also down.

Surging bond yields have been one of the catalysts for the sell-off in growth-oriented shares. The 10-year Treasury yield on Monday touched the highest level since November 2023. Yields surged on Friday following a stronger-than-expected jobs report that cast doubt on further rate cuts by the Federal Reserve.

“With current inflation and inflation expectations elevated and sticky, and with bond yields having risen sharply and quickly, equity investors are starting to become more cautious,” said Katherine Nixon, chief investment officer for wealth management at Northern Trust.

Stocks are coming off a losing week. The Dow lost 697 points on Friday. The 30-stock Dow and S&P 500 both ended the week 1.9% lower, while the Nasdaq Composite lost 2.3%. All three are now in the red for the young year.

Investors are hoping the start of the fourth-quarter earnings season with stabilize markets. Banks including Citigroup, Goldman Sachs and JPMorgan Chase report on Wednesday, while Morgan Stanley and Bank of America
will post results on Thursday.

Data this week includes the December consumer price index on Wednesday morning. Before that, investors will parse wholesale inflation with December’s producer price index report on Tuesday."

MY COMMENT

Restating the obvious above....but that is where we are in the current market. If we continue to drop we will see some really good names on sale.

I have said it hundreds of times on here....but....I dont have any issue with no more rate cuts in 2025. We are NOT at high rates right now. I see ZERO impact on business or companies with the rates where they are right now.

SO......we just sit and ENDURE.

 

Part of the problem right now for the markets is that we are in a government vacuum. The old government is doing nothing....at least nothing productive. I do think that much of what is being done right now is games to try to hamper and cause failure of the new government.

At the same time....right now the new government has no ability to do anything since it is not in place yet.

It is inevitable that politics will impact the markets and when there is a change over in government the impact is enhanced. That is just how it is and as investors we simply live with it. Politicians are going to be politicians....nothing we can do about that.

 

I like this little article....especially on a day when I am just ignoring the markets.

An investing experiment let traders see headlines a day in advance—1 in 6 of them went broke

https://www.cnbc.com/2025/01/13/why-knowing-the-future-doesnt-help-short-term-traders-study.html

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

"For investors, uncertainty in the market is table stakes. No matter how convicted you are that the market will move in one direction or another, there’s no way to actually know what tomorrow will bring.

But what if you had a proverbial crystal ball? A recently published study from investing firm Elm Wealth put this idea to the test with 118 adults, 90% of whom were in graduate finance or MBA programs.

In November 2023, participants were given $50 and the chance to trade the S&P 500 and 30-year Treasurys based on the information on the front page of The Wall Street Journal 36 hours in advance, with dollar figures and asset prices redacted. The game, which you can play for yourself online, featured old headlines from 15 trading days — one per year from 2008 to 2022. In each case, participants could trade as if they knew the future a day before the news broke.

Despite the participants’ credentials, the results were dim. About half of participants lost money, and 1 in 6 went broke. The average gain: just 3.2%.

Is the study perfectly scientific? Of course not. But the results go to show that, even with expertise, and even given access to advance information, getting things right as an investor over the short term is a tricky game.

“In the long run, what you should do is buy, hold and close your eyes,” says Sam Stovall, chief investment strategist at CFRA. “Newspapers will assist investors in merely playing a losing game of Whac-a-Mole.”

Short-term information is unlikely to help over the long haul

So why couldn’t the investors in the study get it right, even with advance notice?

For one thing, even if you know generally how markets function, there are no hard and fast rules. An announcement of an interest rate cut or better-than-expected jobs numbers would generally tend to propel stocks upwards, but not always.

Plus, one analyst may look at a piece of market data and determine that things will go up, while another sees it as a bad omen for markets, Stovall says.

When reading market takes, whether it’s in advance or not, “you’re getting someone else’s opinion,” Stovall says. “And a lot of times, the opinions could be wrong.”

What’s more, even with advance knowledge, the traders in the experiment were unsure how to size their bets — their likeliness to be right about a particular move showed no correlation to how much they invested.

“Even with access to information, getting things right in investing is incredibly difficult, from knowing how to position the size of your investment all the way to knowing specifically which companies that you should invest in,” says Doug Boneparth, a certified financial planner and president of Bone Fide Wealth.

How to invest when you don’t know the future

For the average investor, it’s generally smart to avoid trying to time the market over the short term. Instead, rely on the long, upward historical trend of the broad stock market to help you build wealth over time.

“What’s right for most retail investors is, participate in the market for the long term by being a passive investor, keeping your costs low and controlling your emotions when things get wild,” says Boneparth. “These tried-and-true, long-term, very disciplined ways of going about investing are ultimately what work. The challenge is, they’re often boring.”

Indeed, investing in a diversified portfolio and holding it over the course of decades is the classic model for building wealth — but also one that’s unlikely to get anyone excited while it’s actually happening.

That’s why news outlets cover the day-to-day horse race of financial markets, says Stovall. It makes for much more interesting reading. “Short-term investing is merely a form of entertainment,” he says.

That’s why, if you want to get your blood pumping trying to figure out what will happen next in the market, it may make sense to designate a small portion of your investments to have your fun wheeling and dealing.

“Having a well-diversified portfolio is what you should do, but if you want to make trades and do stuff like that, do so in an account where it wouldn’t matter if you lost everything,” he says. “You’re doing it for entertainment.”"

MY COMMENT

EXACTLY...which is why I am going to go and take care of other Monday business and simply turn off the markets for now. Why torture myself......with the short term DRAMA. It is simply NOT important.

 

I am in the middle of an oil change. But I see I do not have a single stock up today. Glad I basically skipped the market today.