The Long Term Investor

Oldmanram.....Zukodany has that brand new John Deere......I am delegating your mowing job to him since he has the hot new mower.

 

I ran the board again today....but....this time to the good side of the FORCE. ALL positions were green plus a beat on the old SP500 by .14%.

 

YES.....I know....the unemployment numbers.....but....I dont really buy it, they were still anemic.....I think the markets were moving in sympathy with CRYPTO.....unfortunately.

Stock market news live updates: Wall Street rallies after jobless claims; Oatly jumps in debut

https://finance.yahoo.com/news/stock-market-news-live-updates-may-20-2021-221318405.html

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

"Wall Street benchmarks advanced on Thursday, with investors reacting to jobless claims falling to a new COVID-19 era low, but wary of rising inflation may force the Federal Reserve to normalize monetary policy sooner rather than later.

Good news on the labor market came from government data that showed workers filing for new unemployment benefits fell further below 500,000 in the latest week. Jobless claims set their lowest levels in more than a year as the labor market continued to heal from the worst days of the COVID-19 outbreak.

"We strongly suggest that firm managers, investors and policymakers should anticipate more robust monthly job gains for the remainder of the year and a steady march downward on the overall unemployment rate to 4.1% by the holiday season," wrote Joe Brusuelas, chief economist at RSM, in a research note.

Thursday's trading reversed a losing streak that lasted three days, with cyclical energy and tech stocks dragging on Wall Street. However, caution over the outlook limited the upside, with investors nervous that soaring price pressures could prod the Fed into action against inflation.

On Wednesday, minutes from the Federal Open Market Committee's (FOMC) April meeting showed that "a number of participants suggested" that if the economy continues to improve rapidly, "it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," which have currently been taking place at the aggressive rate of $120 billion per month over the past year.

That was enough to spook stock investors and put upward pressure on bond yields, with investors confronting the likelihood that the post-pandemic economic recovery might stir up lasting inflation — and prompt a roll-back of the Fed's crisis-era monetary policies.

"I don't think investors should be surprised at all," about the recent volatility in markets, Stephanie Roth, capital markets economist at JPMorgan Private Bank, told Yahoo Finance.

"We've had a really strong recovery, both from an economic perspective and a market perspective, and now we're sitting here and we're at the peak of economic momentum, and now it's just about a transition into mid-cycle. So that tends to bring about volatility and transitions under the surface," she added.

Companies from Procter & Gamble (PG) to Kellogg (K), to Target (TGT) and Home Depot (HD) have cited rising price pressures this year, with consumer and business demand far outstripping supply as more businesses reopen and social distancing restrictions ease.

"We were expecting strong growth this year, but now the focus should be on the risks – the risks certainly around inflation, that has come up quite a bit, what the Fed is going to do, and then [whether there will] be any concerns around the COVID outbreak," Roth warned.

"For now, everything is priced to perfection and that makes sense, but we should just be watching and mindful of the risks that could come up and that is what the market is starting to focus on," she added.

The central bank's massive bond purchases, along with its more than year-long stretch of maintaining interest rates near zero, have helped support both economic activity and asset prices amid the pandemic.

Still, however, FOMC members "generally noted that the economy remained far from the Committee’s maximum-employment and price-stability goals," the minutes added. "

MY COMMENT

YES....NO....WAIT.....GO.....STOP....FORWARD.....FASTER.....SLOWER.....UP....no DOWN.....what the hell. The markets are a BIG MESS. Everyone seems to be frantically jumping around on the short term semi-news items. AND...half the news items are simply not true or represent unfounded reporter OPINION. What takes REAL GUTS.....doing NOTHING. Just siting and watching the CIRCUS.

TODAY....I see it as simply a sympathetic move along with the rally in CRYPTO....just like the past couple of days reflect the DROP and panic in CRYPTO.

As usual....the financial media want to HYPE the FED comments and language WAY BEYOND anything actually in the language. The language is basically NOT CHANGED:

"generally noted that the economy remained far from the Committee’s maximum-employment and price-stability goals,"

No matter how much the big investment banks and traders want to PUSH the FED to do something that will support their speculative short term trading......so far.....it is NOT happening.

 

Seems like there should be strong momentum to carry the gains today into tomorrow to end the week. If so...it would be like last week...half the seek SUCKS....and....the other half is very nice. The bottom line with these sorts of weeks.....a HAIR-RAISING ride for the first couple of days......and RELIEF the last couple of days.

ALTHOUGH....the bottom line when it is all said and done....NOT MUCH. Down a bit or up a bit. We continue to bounce around within a range of about 1-2% either way. At least the good news is that MOST of us remain either at or just below personal all time highs. So the markets CONTINUE to build a little base at this point....before moving on up.

The level of news items and financial reporting daily has NOW gotten to the level of RIDICULOUS. The media is at the point of EXHAUSTING...even the most media hungry consumers. PLUS...they are running out of story lines....it is all one big REHASH of the same old stuff we have been seeing over the past couple of months. SO BORING......and...so IRRELEVANT.

 

This little article ties in with what I have been saying above. Cramer is right on with this analysis.

Jim Cramer: Accept the Beatdown in the Specs and Buy the Most Solid Companies

https://finance.yahoo.com/m/62ef4640-581d-3bec-bc39-450d2f127f34/jim-cramer-accept-the.html

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

"How much of the decline in the market has to do with the plummeting of all sorts of alternative currencies or assets or cult stocks or whatever? When you see Bitcoin or Ethereum or the stock of Tesla (TSLA) rolling over does it impact the entire stock market?

I would like to think that when tens of billions of dollars of an asset like Bitcoin gets obliterated there's a cause and effect between the S&P 500 and the losses sustained.

But I am coming to believe that while there is a correlation, the rational investor in these individuals comes out and they pullback and default into cash-not stock-or just take the pain.

What you really hear about is the money leaving the casino. When I said I sold a lot of my crypto and purchased a farm I created shock waves in the community of speculators because I had done something foolish. How does a farm go up? Is there a little flashing sign on the bottom right of the TV screen measuring farm land? Am I at least growing corn to help ease the commodity prices impacting the soda companies?

No.

Nevertheless, I can't call it a sideshow because there are huge gains here still and that money, unless cashed out and put in stocks, which I think is unlikely, causes people to want to pull out of the other high risk assets. The correlation between, say, the Wood stocks and bitcoin seems pretty clear. They have all peaked and her buying, as reported nightly, seems almost rearguard if not pathetic simply because if she were to have waited until the dust settled instead of having a feel for the market she could be doing much better.

Which brings me to an important concept. The conviction level on assets like the ephemeral (ARKK) funds or Ethereum or the conceivable hoax of non-fungible tokens - championed by the now quarter of a dozen billionaires - lacks any discipline whatsoever. When you see Cathie Wood buying down endlessly the same names while selling the so-called cash equivalent names, something that only she would, in a delusional fashion call cash equivalent, you see the same behavior as the crypto lovers: they love at any price.

That lack of discipline has historically led to horrendous losses once the momentum shifts. The money disappears.

Which brings me full circle to the impact on the markets. I think that, like year 2000, the speculative cohort gets blown out while the S&P is actually a winner because the big money managers fear the spillover, they fear that the money will at best, lie in its coffin and at worst come up, Carrie-like from the dead.

In other words, if you want to trade the impact of all of the speculation you dump the Nasdaq along with crypto and non-fungible tokens, which have no secondary market to speak of - in other words you own a piece of nothing, not even memorabilia - and you move into the industrials and the mineral stocks.

As for Tesla, AMC (AMC) and GameStop (GME) ? Here's my take? Tesla's too big to keep in the air but AMC and GameStop aren't. It doesn't matter what Adam Aron, the CEO of AMC, does, the bulls suffered through the gigantic stock offering and came out the other side, regardless of the box office receipts, or lack thereof. The Take-Two (TTWO) numbers were fabulous last night, augmented by the wind down of sales to brick and mortar, think GameStop, but that doesn't matter either because the bulls in GameStop want it to go up and are willing it to go up with stimulus checks. They will go down without another stimulus bill. Maybe they should be called Biden stocks.

The overall impact is that you need to accept the beatdown for some greater good in all of the specs but buy the most solid companies, like April of 2000, and you should come out ahead but the vast bulk of capital, with the possible exception of MUSK, the four letter symbol for Tesla, the rejector of Bitcoin as a currency, should be considered a drag on the market no different from the undisciplined capital that had been full of those with conviction that betrayed them in the middle of March of 2000."

MY COMMENT

EXACTLY......buy the most SOLID companies. Actually....isn't that what investors are supposed to do all the time? That is what I try to do with my 10 stock portfolio and my SP500 Index. AMAZING....how that works out....especially over the long term.

There is SAFETY in reality. With all the speculative EXCESS......there is going to be a lot of money SLOSHING around over the next year or two. People will be rattled and go to cash.....over and over...and...sooner or later they will stay there until they decide to just put the money into the......good old boy stocks.....that lead the economy.....or something like the SP500. Pay me now or pay me later.

As we move away from the DISTORTION of FREE MONEY and people start to actually have to EARN their money.....a novel concept.....they will not be as CAVILER about investing in smoke and mirrors. When you are working hard for that dollar....it is not quite as easy to throw it away on the ROULETTE WHEEL.

 

YOU heard it here first......stock futures are strongly positive. Go, go, go......

 

Hey Live&Learn....good to see you posting.

I remember those days of the SPIN OFF companies......I got Smuckers, Kraft, Altria, Mondelez that way. A few more too that I am not remembering right now.

 

I find it interesting that the TONE and CONTENT of articles for FOREIGN consumption is VERY DIFFERENT than the "stuff" that the same sources give us here in the USA. For example this article from just about 15 minutes ago discussing the basis for the GAINS in the foreign markets right now.

Asia shares perk up as receding inflation fears lift Wall Street

https://www.reuters.com/article/glo...nflation-fears-lift-wall-street-idUSL3N2N80G1

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

"Asian stocks rose on Friday, setting the region up for a weekly gain, as investors tempered fears about hot inflation and the prospects of an early tapering of stimulus by the Federal Reserve.

Japan’s Nikkei jumped 1%, while MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.6%.

Taiwan’s tech-heavy stock index climbed 1.8%, leading gains in the region, while Chinese blue chips added 0.3%.

For the week, an index of stocks across Asia-Pacific was set for a 1.9% advance.

Futures pointed to a further 0.3% rise for the S&P 500 later in the global day, following a more than 1% jump on Thursday.

Tech stocks led those gains as Treasury yields declined following a weaker-than-expected U.S. business activity reading. A decline in commodity prices, particularly oil, also undermined the thesis for too-hot inflation.

“It’s still a market trying to work out where inflation is going to go, and what that might mean for Fed policy somewhere down the line,” said Kyle Rodda, a market analyst at IG in Melbourne.

The drop in oil prices accompanied by lower bond yields has changed sentiment very quickly, he said.

The Philadelphia Federal Reserve Bank said its business activity index fell to 31.5 from 50.2 in April, its highest pace in nearly half a century. The reading was shy of economists’ expectations of 43.0, a Reuters poll found, and cast doubt on how fast the economy can continue to heat up.

Other data on Thursday showed the number of Americans filing new claims for unemployment benefits dropped further below 500,000 last week, but jobless rolls swelled in early May, which could temper expectations for an acceleration in employment growth this month.

The Dow Jones Industrial Average rose 0.6%, while the Nasdaq Composite added 1.8%.

The yield on benchmark 10-year Treasury notes held Thursday’s more-than 4 basis-point decline to hover around 1.635% in Asia.

Oil prices recovered slightly after steep drops on Thursday, when diplomats said progress was made toward a deal to lift U.S. sanctions on Iran.

Brent crude was 0.2% higher at $65.21 a barrel after slumping 2.3%. West Texas Intermediate crude added 0.4% to $62.16 a barrel following a 2.1% tumble.

In the foreign exchange market, the dollar was hovering near multi-month lows following its steepest slide in about two weeks on Thursday.

The dollar index, which measures the greenback against six major peers, was at 89.755, little changed after the previous session’s 0.4% decline.

In cryptocurrencies, bitcoin recovered to around $41,650 on Friday following a wild ride this week that saw it plunge as low as $30,066 on Wednesday for the first time since late January.

The digital token rebounded after prominent backers such as Ark Invest’s Cathie Wood and Tesla’s Elon Musk indicated their support.

Wednesday’s brutal selloff was triggered by worries over tighter regulation in China and unease over the extent of leveraged positions among investors.

No. 2 cryptocurrency ether was trading around $2,900 following a drop to as low as $1,850 on Wednesday."

MY COMMENT

FUNNY....I dont recall seeing ANYTHING about any of the stuff that is in bold above...other than in a fear mongering fashion.......in the USA media today....up to the current moment.

Reading this little article gives a VERY DIFFERENT impression of inflation, the overheating economy, inflation, the dollar, employment....compared....to the BREATHLESS media stories that I saw all day today.