I like this view of the markets. We are about to hit the first correction of the year......not a big deal. this is what the markets do.....over the short term they go up and down and at times have corrections and bear markets. THIS is how it works. this is why stocks provide gains of MUCH MORE than bonds and other safe investments. The return is a function of the risk. Short term....the risk can be substantial. Long term......the risk is moderated. Why The SP500's Bull-Market Run Probably Is Only Getting Started https://www.marketwatch.com/story/w...nly-getting-started-11614820819?mod=home-page (BOLD is my opinion OR what I consider important content) "It’s been a year since the pandemic first blindsided the U.S., turning many jobs, forms of schooling and ways of socializing into stay-at-home events. But it’s only about 11 months since the new bull market for the S&P 500 started. That’s one of two key reasons why analysts at Truist Wealth think a sustained upswing for the S&P 500 index SPX, -0.46% still has room to run. This chart shows that the S&P 500’s current bull-market run may be both too short-lived and too limited, in terms of price gains, to be over anytime soon, at least if the past six decades of performance apply during a pandemic. Today's S&P 500 bull market is too short, skimpy in returns department. Truist Wealth The bars show that the average S&P 500 bull market since 1957, when the benchmark was first introduced, resulted in price gains of 179% and that the good times lasted 5.8 years on average, which compares with today’s return of 76% for the benchmark in less than a year. U.S. stocks began to swoon into correction territory some 12 months ago, after the coronavirus pandemic first began to cut off travel and trade globally, a rocky period that was followed by the major U.S. equity benchmarks carving out fresh lows in late March. But after quickly recouping their losses in 2020, stocks this year have continued to touch a series of all-time highs, thanks in part to trillions of dollars’ worth of fiscal and monetary stimulus that’s been sloshing through the economy, as policy makers look to shore up households hit hard by the crisis and to keep confidence and liquidity running high on Wall Street. More recently, those same forces also have sparked concerns that the good times, post-COVID, might already be fully baked into stock prices and other financial assets, and that high-flying equities and riskier parts of the debt market could be headed for trouble if runaway inflation takes hold, or borrowing costs for companies and consumers get too high. The S&P 500, Dow Jones Industrial Average DJIA, -0.11% and Nasdaq Composite Index COMP, -1.18% were hit by volatile patches last week, as the 10-year Treasury TMUBMUSD10Y, 1.465% yield spiked, and again on Wednesday when yields on the benchmark bond were spotted about 1% higher from a year prior, or near 1.47%. All three major stock indexes closed lower Wednesday for a second day in a row, as bond yields climbed and technology stocks again came under selling pressure. So how does today’s rise from a low-rate environment compare with the ’50s? Truist analysts also have a chart showing that the S&P 500 and 10-year Treasury yields rates rose in concert during the 1950s. Stocks, bond yields climb together. Truist “While there are many differences between the 1950s and today, there were some similarities, such as very high U.S. debt levels as a result of the war, an activist Fed and a postwar boom in the economy,” wrote Keith Lerner, chief market strategist at Truist, in a Wednesday note. “Interest rates rose from 1.5% at the beginning of the decade to nearly 5% by the end. During the decade, despite two recessions, the S&P 500 rose 257% based on price and 487% on a total return basis.” This time around, Federal Reserve officials also has repeatedly vowed to avoid tightening monetary conditions, while keeping policy rates near zero and its $120 billion-per-month bond-buying program open until the economy fully recovers from the pandemic. And yield-starved bond investors have welcomed the rush among highly rated companies this week to borrow, amid the prospects of higher borrowering costs." MY COMMENT YES.....in all probability.....we have a good ways to go in the current bull market. BUT.....as we are seeing now.......a NORMAL market......does not just go up. It goes up in spurts and drips and drabs.....often unanticipated and often contrary to the short term view. I heard someone on one of the talking head shows this morning say he WELCOMES the current market action.....because it is NORMAL. It is the price that investors pay.....for the oversize returns that stock and fund investing provide.
I was thinking this morning......a dangerous thing especially too early in the day.....that the markets are in a very confusing state right now. I think part of this little correction we are seeing and erratic market behavior in the face of great earnings and great economic news.....in general.....reflects the HUGE amount of change over we are seeing right now. AND....that changeover is creating market confusion and irrationality. AT this moment.......we are somewhere in the middle of changing back from a pandemic to more normal times. We are in the middle of the shut down versus the reopening. We are seeing government make a 180 degree turn in practically EVERY business and social policy.....taxes, regulation, employment, immigration, foreign policy, etc, etc. We are seeing somewhat of a stock change over....a rotation. Economic data is somewhere in the middle of a changeover from pandemic conditions to open for business conditions. People dont know what is going to happen to mortgage and interest rates as we move forward. Is it deflation or inflation or neither. Jobs are somewhere in the middle of doing whatever they are going to do. We are somewhere in the middle of the vaccine process. Some states are open some are still locked down. And on and on and on. I think the markets and investors are being BOMBARDED with so many issues, distractions, data points, etc, etc.....that the markets are just overwhelmed and exhausted and the easy path is to just......MUDDLE ALONG. So.....we will MUDDLE......we will linger.....we will play rope-a-dope and STALL while we wait for all the above to progress and clarify. There is just TOO MUCH going on right now.
In my opinion....this is a KEY INDICATOR of the future of inflation.....wages. Without wage pressure I dont see interest rates or even business price increases creating inflation. Americans' wages have gone up, but the news is not all good https://www.cnn.com/2021/03/03/economy/pandemic-wage-growth/index.html (BOLD is my opinion OR what I consider important content) The average paycheck for American workers has gotten bigger during the pandemic. Ordinarily that would be cause to jump for joy. But the reason for this increase is grim: Millions of low-income jobs are gone, and that has pushed average pay higher. "When the bottom drops out, the average is different," Elise Gould, senior economist at the Economic Policy Institute, told CNN Business. The change highlights that the nation is still a long way away from a recovered labor market, with low-income workers still bearing the brunt of the pandemic crisis. Between February 2020 and January of this year, the average hourly wage for private sector employees rose a whopping $1.45, or 5.1%, to $29.96, according to the Bureau of Labor Statistics. In comparison, wages rose just $0.81 in 2019. The leisure and hospitality sectors, which registered the biggest job losses due to the pandemic and the social distancing protocols it brought on, already paid below average earnings. "Wages grew largely because more than 80% of the 9.6 million net jobs lost in 2020 were jobs held by wage earners in the bottom 25% of the wage distribution," Gould and her colleague Jori Kandra wrote in a paper in late February. Earnings data from last April, when more than 20 million jobs were wiped out by pandemic closures, underscores this trend: average hourly wages jumped to more than $30 as many lower paid workers lost their jobs. Similar dynamics are affecting the length of the average workweek. Last February, before the pandemic hit, the average worker put in 34.4 hours per week. That number rose to 35 hours by January. Again, the average was distorted because many lower-paid workers, who tend to work fewer hours per week, lost their jobs, pushing the hours worked in the average workweek higher. As lower-paying jobs get added back as part of the long-awaited full reopening of the economy, average hourly earnings, as well as hours worked per week, will probably go down again, Gould said. Economists worry that the reopening of the economy and high demand for jobs in hospitality and leisure will make it harder for workers to negotiate for better pay. "One reason minimum wage in [President Joe Biden's proposed] stimulus package would have been great is because these people have no bargaining power," Gould said. It's still up to Washington to support the millions of people who remain jobless and who might return to a lower paying job in the future. That will make it more difficult to compensate for the wages lost in the meantime." MY COMMENT We are a long long way from the employment we were seeing just before the pandemic. In fact we will probably NEVER see that type of data for employment any time soon since the pre-pandemic employment data REPRESENTED.....50 year highs. My view.....we are going to MUDDLE ALONG......yep same phrase as above post......with lingering......bad to dull....employment numbers for many years.....just like we did from 2008 to 2016.
Even if we weren't thinking about stocks, the world is a confusing place in general. It is so unrecognizable from the world I grew up in or the world I matured into an adult in.. Technological change, social change, it can all be overwhelming at times. Sometimes muddling seems to be the only way to maintain sanity.
A companion post to the above. Weekly jobless claims rise less than expected despite weather impact https://www.cnbc.com/2021/03/04/weekly-jobless-claims.html (BOLD is my opinion OR what I consider important content) Key Points First-time claims for unemployment benefits totaled 750,000 last week, up from 736,000 the week before but below the 750,000 Dow Jones estimate. Continuing claims fell to just below 4.3 million. Those receiving benefits under all programs also declined, to just over 18 million. Weekly jobless claims edged higher last week but rose less than expected for an economy struggling to shake off impacts from a pandemic that has been around now for nearly a year. The Labor Department on Thursday reported that first-time filings for unemployment insurance in the week ended Feb. 27 totaled a seasonally adjusted 745,000, a touch below the Dow Jones estimate of 750,000. The total was a slight uptick from the previous week’s upwardly revised 736,000. Unseasonably harsh winter storms in Texas took a toll on the labor market, resulting in an increase of 17,769 filings for the state, according to unadjusted data. Ohio and New York also saw considerable increases in claims. Continuing claims again decreased, falling 124,000 to just below 4.3 million, another pandemic-era low, in data that runs a week behind the headline claims number. “We expected a substantially bigger rebound after the huge winter storm pushed claims down, so this reading suggests that the underlying trend in layoffs is falling, thanks to the reopening now underway across many states,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics. “As always, though, two good weeks in this volatile series don’t prove anything, but whatever happens next week, we expect the trend to fall sharply over the next few months, provided the new Covid variants don’t trigger a spring wave in cases and, more importantly, hospitalizations. The jury is still out,” he added. The report comes amid mostly positive signs for the U.S. economy. Whereas economists had been expecting slow growth to start 2021 followed by an acceleration in midyear, estimates are being revised upward rapidly. The Atlanta Federal Reserve’s GDPNow tracker is pointing to 10% growth in the first quarter. Still, fixing the jobs market has been the missing element in the broader picture. Though the unemployment rate has tumbled from a pandemic-era high of 14.8% last April to 6.3% in January, there are still huge gaps in employment. A report Wednesday from ADP showed private hiring increased by just 117,000 in February, below the Dow Jones estimate of 225,000. The Labor Department is expected to report Friday that nonfarm payrolls grew by 210,000, though the ADP number adds some downside risk to that number. There remain about 10 million unemployed workers through February, and the Labor Department report Thursday indicated that more than 18 million continued to receive some form of unemployment compensation through Feb. 13. However, that total fell by just over a million, due largely to a decrease in enrollees for special pandemic-related programs that provide benefits to those not normally eligible as well as those who have exhausted their regular benefits. A stimulus bill that Congress is poised to act on contains new allocations for enhanced unemployment benefits." MY COMMENT A MIXED BAG of data......and only covers a week so the most extreme short term snapshot. As discussed above we are STUCK somewhere in.......no-mans-land. The ONLY thing that will CLARIFY things for the markets is......as usual.....TIME. AND.....of course.....time is a key ally of long term investors. You just have to WAIT OUT the short term confusion especially at this moment.
YOU are right Emmett.......I even say them talked about on one of the morning business shows today.....in glowing terms. They will be a very speculative company for some time into the future. At least there is discussion of them becoming a BILLION dollar in revenue company. Who knows with such a young company. TODAY we get earnings from COSTCO. I believe they will be pretty good. BUT......the markets are NEVER satisfied and they have been getting punished lately for the PERCEPTION that they benefited from the pandemic and might now do as well as the economy re-opens. I happen to think that this view is TOTALLY FOOLISH. Costco shoppers.......are there just because that is what they do....that is how they ALWAYS SHOP.....any success in the numbers.....In my opinion...has NOTHING to do with the pandemic and they will NOT be impacted by the return to normal....other than in a POSITIVE fashion.
HERE is the other general economic data point today......not that it matters. U.S. factory orders surge, but business spending on equipment slowing https://finance.yahoo.com/news/u-factory-orders-surge-business-152007269.html (BOLD is my opinion OR what I consider important content) WASHINGTON (Reuters) - New orders for U.S.-made goods increased more than expected in January, pointing to a sustained recovery in manufacturing even as the pace of business spending on equipment is slowing. The Commerce Department said on Thursday that factory orders shot up 2.6% after rising 1.6% in December. Economists polled by Reuters had forecast factory orders advancing 2.1% in January. Orders increased 1.3% on a year-on-year basis. Manufacturing, which accounts for 11.9% of the U.S. economy, has been driven by strong demand for goods, like electronics and furniture as 23.2% of the labor force works from home because of the virus. Demand could, however, shift back to services in the summer as more Americans get vaccinated, and slow manufacturing activity from current levels. A global semiconductor chip shortage, which on Wednesday forced General Motors Co to extend production cuts at its plant in Fairfax, Kansas, could slow momentum. But the outlook for manufacturing remains solid, with the Institute for Supply Management's index of national factory activity rising to a three-year high in February. Factory goods orders in January were boosted by strong demand for electrical equipment, appliances and components, as well as primary metals and fabricated metal products. But orders for machinery fell. Unfilled orders at factories edged up 0.1% in January after decreasing 0.2% in December. The Commerce Department also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.4% in January instead of 0.5% as reported last month. Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, rose 1.8%. They were previously reported to have surged 2.1% in January. Business spending on equipment increased robustly for a second straight quarter in the fourth quarter, contributing to the economy's 4.1% annualized growth rate during that period. MY COMMENT The EVIDENCE mounts for a sustained economic recovery and boom as we re-open. UNFORTUNATELY about 1/3 of the country is STILL closed.......and......living in the.......twilight zone.
I see the markets are fighting back some. Ok........whatever. This LINGERING market is going to last a while as the push-pull of EVERYTHING continues to clarify over time. Day to day....just totally impossible to anticipate. SOMEONE needs to hit the FAST-FORWARD button so we can see where this short term stuff is all going to end up in about 6 months. The good thing.....for long term investors......the future is ALWAYS POSITIVE.....and money WILL be made one way or another.
I just looked at my account today....nicely green.....considering how the day has gone so far. I have no illusions that anyone can predict how we close.....as usual lately. Time for me to do my mid day running around and just forget the markets till near the close. This short term drama will just drive you CRAZY anyway. Oh yes.....I nearly forgot.....my MEDIA comment of the day. I heard someone this morning reporting as BIG NEWS....that mortgage rates are now at 3.1%....back above 3%. You have got to be kidding......as though being back above 3% was a big deal. Anyone that is in the market for a mortgage......the current rates WILL BE the lowest.....GREATEST.....rates of your entire lifetime. ENJOY while you can......normal rates will be.......4-6.5%.
I would be cautious with SNOW. A LOT of shares will be unlocked soon and may flood the market. Just sayin. I've spent the last 3-4 months TIMING the market for some longterm investments and so far so good. Longterm is a nobrainer, we will slingshot and all of us will be very happy. I'm just a little greedy and insist on getting more bang for my buck.
Yup... plenty of confusion which leads to volatility... sometimes it’s hard to see the forest from the trees... So here’s where my 2 cents are.... The pandemic was the tech sector accelerator. There’s no denying it. The pandemic didn’t “magically” cause investors to invest in cloud based companies and the likes. No. It brought to light what most people ALREADY experienced - the world is shifting quickly parallel to technological advances. The pandemic was the turbo engine that got us there. When things DO get back to normal, whatever normal that would be, it would still be the big tech giants that would lead it. Cloud based companies, fb, Amazon, Uber, Airbnb... they were here before the pandemic and they will be here long after it..... So are they taking a hit now because they are overpriced? I don’t know... All I know is that you can buy Nasdaq ANY DAY OF THE WEEK... Correction or not... And you will STILL make out like a bandit once investors decide to get back in. No brainer really. The news TODAY (as in past several weeks) has suggested that inflation is meddling with growth. BULLSHIT. Look around you- everything is digital... everything is online... from the medical field to frigging currency. Someone is gonna tell me that’s all being downgraded because of inflation? Ok I believe it
Aaaaaand here we go.... market bleeding again.... I was supposed to go shopping tomorrow but at this rate I’ll probably wait till next Friday
Greedy. YEP Happy. ALWAYS Buying the dip. NOT YET I see more downside in the near term. I worked hard my whole life and made smart financial decisions, retired at 55. Now I let my money work for me. I dont foolishly invest all of my cash in the markets and have plenty of leverage to pursue many alternatives, I've posted in this thread for several weeks and everybody laughed and called me crazy as I simply did what I do best. The record will clearly show while the cheerleaders were drinking the kool-aid and getting their asses smoked and whining like little girls, I had patience,did research and have been very successful at timing the metrics of the markets. YIELD CURVES MATTER and so does my financial future. Feel free to look when I started posting in this thread to verify. Short term. We have problems, some of these guys that blindy follow the kool-aid are now trapped and have to hold until then we rebound. Idiots like me, thats a entirely different story my friend.
GOOD OLD Charmian Powell.....opens his mouth and tanks the markets today and probably tomorrow. What a MORON. 10-year Treasury yield jumps back above 1.5% after Powell comments on inflation https://www.cnbc.com/2021/03/04/us-...-lower-ahead-of-fed-chair-powells-speech.html These ego maniacs need to learn to get off camera and keep their mouth shut. the economy, stocks, everything would be much better off if they would go back to how it used to be before they become media stars.
Good one M-Man... I saw them live at the MetLife stadium in 2019.... what a brilliant show that was... I miss going to concerts
Thanks for......your usual...... comment above Rustic1. I would STILL like to see you post ALL trades real time with dollar amounts....start a thread.......why not? How is your one long term investment doing.......Tesla? Seems to me that you have a BIG AXE to grind.....here in this thread...... since your ONE attempt to invest in a similar style to what I and others have been doing for many decades just about BANKRUPTED you and was a financial disaster in 2008/2009 as you posted previously. MOST long term investors just SKATED through that year and came out well ahead. If that is not your style........and......for whatever reason.......YOU......can not invest and pick stocks that way......there is no reason to......CONSTANTLY HARANGUE.....those that do. BUT.....continue to post as you wish....this is a free speech thread. So....I am now going.......out to lunch......NOT mentally...literally....so have at it.
