GPUs are still selling at huge premiums, there is a lot of pent up demand out there. I can foresee a time when there might be an oversupply with used GPUs coming from China in the near future.
HERE is a very nice POSITIVE indicator for the markets. People usually get the stock market wrong https://www.axios.com/stock-market-...rve-5ded8f24-08a0-4e0d-972b-26a82e826104.html (BOLD is my opinion OR what I consider important content) "Data: New York Fed Survey of Consumer Expectations; Chart: Axios Visuals" "The average American consumer thinks it’s unlikely the stock market will be higher 12 months from now. Why it matters: Enthusiasm toward stocks is the kind of thing that inflates market bubbles that crash. On the other hand, caution toward stocks often means prices have room to go higher as that caution is eventually proven unwarranted. By the numbers: Each month since June 2013, the Federal Reserve Bank of New York has asked consumers: "What do you think is the percent chance that 12 months from now, on average, stock prices in the U.S. stock market will be higher than they are now?" According to results released Monday, respondents in June said on average that there was a 40.2% likelihood that stocks would higher. That's down from 40.8% in May. The only time this measure was above 50% was in April 2020, right after the S&P 500 crashed to a low on March 23. Yes, but: Ritholtz Wealth Management’s director of research, Michael Batnick, says history favors the optimists. "Going back to 1950, there was a 74.16% chance that the S&P 500 would be higher one year later," Batnick tells Axios. "When the S&P 500 was at an all-time high, there was a 74.10% chance the market was higher one year later." What they’re saying: "Consumer sentiment is vulnerable to news items that report negative projections," Oppenheimer strategist John Stoltzfus tells Axios. The bottom line: Just because people believe the stock market is unlikely to produce a positive return doesn’t mean it won’t produce a positive return." MY COMMENT I prefer to use ONE indicator at the moment......the re-opening of the economy that will take place for at least another year in the USA and at the minimum two years world wide. OBVIOUSLY...there WILL be corrections during that time. BUT.......the above is a great contrary indicator. Personally I am ALWAYS optimistic. As a long term investor the PROVEN data is always positive for the future of the markets and total returns for investors. Glad to see this data.....we continue up the WALL of WORRY.
Here is how we ended up today....after the typical.....FED.....non-event. US STOCKS-S&P 500 ends higher after Powell lulls market https://finance.yahoo.com/news/us-stocks-p-500-ends-201530231.html (BOLD is my opinion OR what I consider important content) "July 14 (Reuters) - The S&P 500 ended with a gain after briefly hitting an intra-day record in a choppy session on Wednesday, as investors balanced worries about inflation with reassuring comments from Fed Chair Jerome Powell. Of the 11 S&P 500 sector indexes, utilities, real estate and consumer staples were among the strongest, each up about 0.9%, while energy sank about 3%. U.S. monetary policy will offer "powerful support" to the economy "until the recovery is complete," Powell told a congressional hearing in remarks that portrayed a recent jump in inflation as temporary and focused on the need for continued job growth. Powell's comments followed data this week showing U.S. producer prices increased more than expected in June and U.S. consumer prices rose by the most in 13 years. Investors in recent weeks have focused on inflation, with many fearing a possible hawkish shift by the Federal Reserve, as well as a spike in coronavirus infections that could knock U.S. equities off record highs. With banks kicking off second-quarter earnings season this week, analysts expect 66% growth in earnings per share for S&P 500 companies, according to IBES estimate data from Refinitiv. The S&P 500 is up about 16% so far this year, leading many investors to worry that the stock market rally may run out of steam, and they are looking to earnings to potentially provide more fuel. "Everyone knows earnings are going to be very strong. The question is how the market reacts to those earnings, and what are the outlooks given by management. That is more critical than anything," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. Apple Inc jumped 2.4% to a record high after Bloomberg reported that the company wants suppliers to increase production of its upcoming iPhone by about 20%. Microsoft added 0.5% and closed at a record high after saying it will offer its Windows operating system as a cloud-based service, aiming to make it easier to access business apps that need Windows from a broader range of devices. Microsoft and Apple supported the S&P 500 more than any other stocks. Bank of America Corp dropped 2.5% after the lender posted its quarterly results and detailed its sensitivity to low interest rates Wells Fargo rose 4% after it swung to a profit in the second quarter, smashing Wall Street expectations. Citigroup fell 0.3% after comfortably beat market estimates for second-quarter profits. Those reports followed strong results on Tuesday from JPMorgan Chase & Co and Goldman Sachs Group Inc. The Dow Jones Industrial Average rose 0.13% to end at 34,933.43 points, while the S&P 500 gained 0.12% to 4,374.38. The Nasdaq Composite dropped 0.22% to 14,644.95. American Airlines rallied 3% after it forecast positive cash flow. Lululemon Athletica jumped 1.7% after Goldman Sachs called the yoga pants seller a "top idea" as apparel makers benefit from the economic reopening. Volume on U.S. exchanges was 9.8 billion shares, compared with the 10.5 billion average for the full session over the last 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored decliners. The S&P 500 posted 42 new 52-week highs and one new low; the Nasdaq Composite recorded 50 new highs and 143 new lows. MY COMMENT A low volume summer day today. BUT...nice gains if you held the right stocks. As to the "commentary" in the article about investors being concerned about a "shift" by the FED.....BALONEY. The financial media keeps pushing this line....but the FED has said about 1000 times over the past four months that they have NO plans to do anything till deep into 2022 or 2023. I do agree with the quote that......company outlook....will be critical....but NOT to the typical retail investor....just to the professionals and the financial writers. This stuff is trading fodder.....not investor fodder.
Ten year treasury yield very nicely at 1.349%. Now that we are DONE with the inflation data and the FED for the week...although Powell will speak again in congress tomorrow.....we might have cleared the decks for a good close to the week. Earnings that count tomorrow will be.....a continued tidal wave of banks. That is about it for the week. Next week is the beginning of the ramp up in reporting companies........with the ones that interest me being....TESLA on Tuesday, COKE on Wednesday, INTEL on Thursday. HONEYWELL my first......actual..... holding to report, they will put out earnings on Friday. It will be nice to see ACTUAL business fundamentals for all the various companies.....especially those that I own.....something other than media speculation.
My account has been kicking into high gear lately. I am now up year to date by +17.78%. The SP500 for comparison is up year to date +16.46%. NICE. BUT....my very focused 10 stock portfolio along with my mutual fund and Index fund.....can turn on a dime......UP or DOWN. It is nice to be up but it does not count till the last market day of the year when....it is set in stone as part of the historical record....the year end results. Actually........I do not record my portfolio results year to year.....all I record is the TOTAL RETURN results of my two funds....Fidelity Contra fund and the Schwab SP500 Index Fund and the SP500 Index for comparison. If I want to see my whole portfolio results I just look at the performance data on Schwab. If I want to see how my stocks are performing I just look at the percentage of my account balance that is stocks versus funds. That is enough data for me. I am not into market or account statistics.
Another day another dollar......literally. My account is open and DEAD FLAT for the day. I guess I should see that as a good thing today. Yes....the usual weak kneed open today....no conviction in the markets at all....the summer doldrums. NVIDIA is a.....good news bad news....story for me today. The good news.....I took my profit....on my little stock split trade..... yesterday at $808 per share.....the bad news I hold way more shares of the stock as a long term holding than I sold yesterday and I DO NOT want to see it going down. BUT....investors should NOT complain...the stock has had an EPIC run up over the past 5-6 weeks......so we are due for a bit of a pull back....before moving on up. These chip stocks are.....also....always very erratic.....so that is the way it is.
HEY....remember all the articles about how the MILLENNIAL generation is different....they dont want to buy a home...they just want "experiences"? Well....now looks like the "experiences" they want are the same as every generation before them. How millennials are shifting demand in the home-buying market https://finance.yahoo.com/news/how-...mand-in-the-home-buying-market-140922559.html (BOLD is my opinion OR what I consider important content) "Although housing starts appear to be picking up in recent months, it is unclear whether this trend can be sustained as supply chain disruptions, high materials costs, and construction labor shortages continue to plague the sector. Some camps are even fearful of the possibility of an impending housing crisis which could be triggered by a wave of evictions attributed to pandemic-related disruptions. In spite of this, the U.S. housing market remains hot, with the growing demand for homes shifting toward younger cohorts, particularly millennials. “I think we've seen a shift in demand to millennials,” Dave Flitman, Builders FirstSource (BLDR) president and CEO told Yahoo Finance Live. “We've got something like 85 [million] to 90 million millennials that are now in the home-buying market that weren't [in the market] 10, 12 years ago. And that's creating a lot of underlying demand.” Filtman joined Yahoo Finance Live to discuss where he foresees the markets for lumber and other commodities in the homebuilding sector heading amid a turbulent period for the area. Builders FirstSource is the largest supplier of building products for residential construction in the country, and has about 550 locations in 40 states across the U.S. The company entered a merger agreement with BMC Stock Holdings in mid-2020, with the deal closing this past January. Flitman emphasized that the lumber crisis was developing even before the onset of the pandemic. According to him, nearly 1 million single-family homes were being constructed every month in the first quarter of 2020 for the first time since before the 2009 global financial crisis. “And so the underlying demand in homebuilding was very strong. Then the pandemic hit,” Filtman said. “And then coming out of that, we had two effects. One was single-family home construction actually accelerated because people appreciated and realized — given the pandemic and work from home — they could live wherever they wanted, so they made the choice to move. Those who didn't decided it might be time to remodel their existing home.” This ultimately caused a “double whammy” effect on the demand for lumber. Despite the price of lumber pulling back from historic highs for the year, some experts say that the homebuilding market is not out of the woods yet. Flitman said that the current cost of lumber is still about twice the historical rate, underscoring just how strong the underlying demand really is. Shortages and subsequent outsized prices on commodities like lumber and copper continue to have a vice-grip effect on homebuilders. The future of the housing market According to Flitman, the number of new home construction permits being issued is up across the country. Discounting the pandemic, new home permits are up 41% from the fourth quarter of 2019, he said. In other words, the pent-up demand for housing will not be going anywhere anytime soon. Flitman also noted another phenomenon in the housing sector that has been observed over the past few years — the changing average size of new homes. “We have seen the average size of new homes shrink, really, over the last four or five years to about 2,300 square feet now,” Flitman said. “I think we may see that trend reverse. In fact, in the last couple of months, we have seen it level off and actually begin to increase again.” As for the near term outlook on the materials supply chain, Flitman said that builders may have slowed their new single-family starts over the last couple of months to provide the overall supply chain with a chance to catch up. “Because just like lumber, we've seen that same demand increase and availability challenge in supply in just about every other area of home construction, whether it's cabinets —whether it's windows, doors, you name it,” Flitman said. “It's difficult to get. I've even heard many builders speak about their inability to get appliances and that holding up closings on new homes.”" MY COMMENT YES.....they WILL follow ALL the trends of the past generations.....including moving to the suburbs for the lifestyle and the good schools and the lower crime. I keep extreme focus on the market in my little 4200 home area. The average buyer here is a Millennial with young kids.....and.....from INDIA. I would say about 30-50% of all buyers in my area are Indian heritage. Smart young people that have good paying jobs, work hard, value family, and want the good schools. They understand the value of owning a home and are not afraid to stretch to do so. I say GOOD and.....well done.....it is nice to see younger people that have drive and are sucessful.
HERE is the economic news today that no one will care about...as usual. Jobless claims: New weekly filings reached a pandemic-era low of 360,000 https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-july-10-2021-173250411.html (BOLD is my opinion OR what I consider important content) "New weekly jobless claims fell to the lowest level since March 2020, closing back in on pre-pandemic levels as the rate of new joblessness slowed further. The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg: Initial jobless claims, week ended July 10: 360,000 vs. 350,000 expected and a revised 386,000 during prior week Continuing claims, week ended July 3: 3.241 million vs. 3.300 million expected and a revised 3.367 million during prior week Initial unemployment claims extended a months-long downward trend and came in below the psychologically important 400,000 level for a third straight week. During the comparable week in mid-July last year, new filings totaled 1.5 million. Continuing jobless claims also improved to the lowest level since March 2020.State The weekly jobless claims numbers help capture the pace of those rendered newly unemployed. However, labor supply shortages have become the primary concern in returning the job market to its pre-pandemic conditions. The National Federation of Independent Business said that a historically elevated 46% of small business owners reported job openings that could not be filled in June, and that a record high of 39% of owners reported raising compensation in order to attract workers. In the Labor Department's latest June jobs report, the labor force participation rate stayed flat even as payroll gains handily exceeded estimates, reflecting an elevated number of workers still yet to reenter the workforce. And according to the government's Job Openings and Labor Turnover Summary, the layoffs and discharge rate hit an all-time low of 0.9% in May, further underscoring that the labor market's latest strains have been for lack of supply, not demand. "It bears a reminder that the U.S. economy is booming with growth, or GDP, soaring. While welcome, this is not without a downside. The reopening of the economy has created unprecedented strains, including strong demand for workers," Mark Hamrick, senior economist and analyst at Bankrate, said in an email on Wednesday. "One doesn’t have to travel very far to find businesses visibly understaffed, some of which are opting to reduce operating hours or output as a less optimal way of adjusting to the worker shortage." A multitude of factors seen as inhibiting labor supplies are expected to ease by the fall, however, with schools set to reopen to alleviate child care concerns, more vaccinations taking place to help lessen lingering COVID-19 concerns, and enhanced unemployment benefits expiring across states. How quickly these factors drive an increase in labor force participation, however, remains to be seen, and has given monetary policymakers reason to wait and see the incoming data before removing some of their supportive policies for the recovering economy. "The issue for markets and the Fed ... is that it is not possible to know if these shortages will persist once enhanced unemployment benefits stop in early September — earlier in most Republican-led states — and pressure on child care eases with the full reopening of facilities and schools in the fall," Ian Shepherdson, chief economist of Pantheon Macroeconomics, said in a note. "The current situation in the labor market has no precedent, and hence no basis exists for taking a strong position on what will happen next." "Fortunately, the flexibility of the new monetary policy strategy gives policymakers wide latitude to wait until the underlying labor market position emerges from beneath the COVID distortions," he added. State-by-state unemployment A handful of states posted notable declines in new jobless claims, helping to offset increases in other areas. Initial filings in Georgia were down by 6,000 on an unadjusted basis, while those in Rhode Island and Puerto Rico each fell by more than 4,000. On the other hand, however, new weekly filings in the populous states of New York and Texas each rose by more than 7,500 last week. Still, the margin of increase in these states has come down precipitously from their pandemic-era highs. In terms of insured unemployment rates, or proportion of the state still claiming unemployment benefits to total to total state population, the states and territories of Puerto Rico, Nevada, and Georgia posted the highest levels. Puerto Rico's was the highest in the U.S. at 4.8%, followed by Nevada and Georgia at 4.3% and 4.2%, respectively, for the week ended June 26. Still, these rates have also dropped sharply compared to their COVID peaks of well over 20%. " MY COMMENT It is ALL about the FREE MONEY. when the money dries up in September....the workers will come back. They will have no choice. Till than many will simply take the summer off. The smart ones will start to job hunt early to have the most POWER to negotiate wages and benefits while we are in the time period where workers have MAXIMUM worth and bargaining power.
As I sit and watch the markets and do nothing....here is what is going on today. US STOCKS-Wall Street dips as earnings gather pace, jobless claims fall https://finance.yahoo.com/news/us-stocks-wall-street-dips-141844497.html (BOLD is my opinion OR what I consider important content) "July 15 (Reuters) - U.S. stock indexes fell on Thursday following the latest batch of quarterly corporate earnings reports, while data showed the number of Americans filing new claims for unemployment benefits fell last week as expected. The Labor Department said initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 360,000 for the week ended July 10. Wall Street's main indexes have swung in line with rising inflation since mid-June, with investors fretting over a sooner-than-expected hawkish shift by the Federal Reserve amid signs of a steady economic rebound. "There is some concern that the economy has sort of reached the maximum level of growth," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "This will be a period of higher volatility and choppier markets." Eight of the 11 major S&P 500 sector indexes were trading lower, with technology falling 0.5% and set to snap a four-day winning streak. On his first day of testimony before Congress, Fed Chair Jerome Powell on Wednesday said he was confident recent price hikes were associated with the country's post-pandemic reopening and would fade. The "powerful support" pledge assuaged some concerns over inflation, helping the benchmark S&P 500 and the blue-chip Dow end a choppy session with small gains on Wednesday. Meanwhile, the second-quarter earnings season began on a strong note this week, with the four largest U.S. lenders - Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co - posting a combined $33 billion in profits. The S&P 500 banks index fell 0.8%, tracking a dip in bond yields. Morgan Stanley edged 0.4% lower even as it reported a better-than-expected quarterly profit. At 9:47 a.m. ET, the Dow Jones Industrial Average was down 104.42 points, or 0.30%, at 34,828.81, the S&P 500 was down 13.19 points, or 0.30%, at 4,361.11 and the Nasdaq Composite was down 49.65 points, or 0.34%, at 14,595.30. Nasdaq heavyweights Apple Inc, Microsoft Corp , Amazon.com, Google owner Alphabet Inc and Facebook Inc were trading flat to lower. Netflix Inc added 1.2% after UBS raised its price target and the streaming giant hired a former Facebook executive to lead its video games unit to ramp up its efforts to grow beyond its traditional streaming business. Declining issues outnumbered advancers for a 2.42-to-1 ratio on the NYSE and for a 2.66-to-1 ratio on the Nasdaq. The S&P index recorded 11 new 52-week highs and no new low, while the Nasdaq recorded 13 new highs and 108 new lows." MY COMMENT Typical early earnings market. Good bank earnings.....and the markets do not care. Actually.....it is summer...volume is down....and it is easy to move the markets one way or the other. In other words meaningless day to day action right now. That is why we see the ERRATIC markets with no conviction lately. Over the next 5-7 weeks....EARNINGS.....it will be a BATTLE between earnings and the financial media pushing inflation and the story line that growth has peaked. We have seen this same battle for the past year during every earnings reporting time period. Usually it is the media "stuff" that wins out as earnings get totally nit-picked. My job as a long term investor is to IGNORE all this "stuff". All I need to know is the FACT that I have.....so far....a HUGE gain this year and the prospects for actual BUSINESS SUCCESS this year is HUGE. The primary goal of any investor should be to compound your money over some reasonable time period......I like to use 6-7 years as my goal. It makes absolutely ZERO difference who is ahead over some short term time period.....it is not a competition. It is EACH individual investor versus themselves. It is nice to rack up gains....but...my long term primary GOAL remains the same.......average a total return of 10% minimum over the long term. I have achieved this goal.....plus more...... for decades now.....and....the result is clearly visible to me in the compounding of my account over the last 40+ years. That is my TOTAL FOCUS as an investor. SO......I sit and do nothing as usual. I watch the short term and educate myself......but do nothing. I continue to be fully invested for the long term as usual.
After this month we will have 5 more months left this year. It is HIGHLY likely that we will have at least 1 correction during that 5 months. it will NOT be the end of the world...although some might try to claim that it is. if it is a typical correction it will last for 1-2 months and will involve a drop of 10-18%. It will be an ABSOLUTELY normal part of the typical market process. My view is that the most likely time for this to occur is the August to October time period. BUT....I dont really care. This little prediction is just a game that I play with myself on here....trying to GUESS the short term. I DO NOT EVER take any action on such comments. That would be market timing....something that I NEVER do. Of course...this is not a SCINTILLATING prediction since it covers a quarter of the year and the odds of a correction in any single quarter of a year is probably about 40-50% since we will see about 2 corrections in any NORMAL year.
That....the above posts....is about it for now. NOTHING going on today in the news or the markets. ALL the averages are RED to start the day. The close....who knows.
Just got back in and have not had a chance to look at anything....obviously a SO/SO day.....kind of BLAH. I was in the red by a moderate amount. And...to top it off got beat by the SP500 by .13%. I had ONLY 4 stocks out of 10 in the green today.....they included my big winners of the day.....HOME DEPOT, +1.09% and HONEYWELL, +2.21%. The other two in the green were NIKE and COST. LOOKS like someone is anticipating good earnings from Honeywell....which reports soon. The BIG LOSER for me of the day was NVIDIA......DOWN by 4.41% to $758....that is a loss of $35. A DISMAL day for the stock even though it is NOT deserved....over the long term this is an amazing company. I guess I made the right move selling and locking in my profit on my little 35 share stock split trade. I sold at $808 per share. So I avoided a loss on those shares of $50 per share.....at least over the short term. That would have been a $1750 haircut off my profit in the last two days. Of course I kept my profit in the form of 9 shares so as it is....those 9 shares have lost $450 in the past couple of days. NO BIG DEAL....just the reality of the CHIP stock world in general. It will be interesting to see what NVIDIA does tomorrow and Monday....the last two market days before the 4 for 1 split shares are distributed on Monday night after the close. Seems like people would be buying this dip into the split.......but.....the stock might just be overextended at this point with the EPIC gains of the past 6-7 weeks. I am also curious to see what it does on Tuesday when it trades at the new REDUCED price per share. I dont have any time to look at anything right now....out to water the gardens and BRAVE the mosquitos.
I remember back about 6 months ago when the Ten Year Treasury yields reached the high 1.70% range. The financial media was all in an UPROAR about the coming interest rate SPIKE. This little article HOLDS a CLUE as to what was going on......GASP....say it cant be true.....who would have thought!!!! Treasury Wants Large Holders of 2020 Note to Identify Themselves https://finance.yahoo.com/news/treasury-wants-large-holders-2020-170011803.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- The U.S. Treasury Department asked holders of large positions in a 10-year note it issued last year to identify themselves, tapping rules used sporadically since the 1990s to guard against market manipulation. Anyone whose position in the 0.875% Treasury maturing in November 2030 amounted to $4.1 billion or more on Nov. 16 or Dec. 14 needs to report back to the government by July 22, according to a statement released Thursday. That was the benchmark 10-year Treasury at that point in the fourth quarter. This large-position reporting program, established in 1996 in response to a Salomon Brothers bond-market scandal, aims to prevent improper trading activity, such as efforts to corner the supply of a security to drive up the cost of closing short positions. This is the 17th time the department has made such a request -- the last being in June 2019 -- and prior instances have included periods when a specific security became scarce and expensive to borrow in the repurchase agreement market, a sign of a large short. A Treasury official said on Thursday that the latest request doesn’t mean something nefarious or manipulative happened in late 2020. The Treasury’s debt-management teams try to request these reports about once a year, but can’t always, officials said. Treasuries were diving in November 2020, driving yields higher. The benchmark 10-year yield moved from as low as 0.72% in November to nearly 1% in early December. By March, the benchmark 10-year yield had risen to its highest level in a year at 1.77% while the cost to borrow the debt in the repo market surged as demand grew to short the security. The interest rate on overnight repo rate for cash loans backed by debt plummeted below minus 3% -- driving failed trades to the highest in months. Treasury yields have since plunged and issues in the repo market subsides. The current benchmark 10-year yield is now at about 1.30%." MY COMMENT WHAT? You mean some people might have been trying to manipulate the yields? How can this be true? WTF....I never heard of such a thing. I mean....no one in the media was suggesting this back than....so it must not be true....right? You mean there....."might".....have been more going on when the yields spiked than the fear mongering financial press was reporting? COME ON MAN. I dont believe it. OH the humanity. I am losing all my trust in the big investment banks and hedge funds. Why, why? Say it aint true.....please. Oh well......NEVER MIND.....some of us thought it was happening all along....since there was NO logical reason for the spike in the rates.
I guess this is what happened today...I dont know....I was out of touch all day. Not that one market day matters when you thin in terms of years versus days. US STOCKS-Nasdaq tumbles as investors turn away from Big Tech https://finance.yahoo.com/news/us-stocks-nasdaq-tumbles-investors-181706238.html (BOLD is my opinion OR what I consider important content) "July 15 (Reuters) - The Nasdaq tumbled on Thursday, pulled lower by Apple, Amazon and other Big Tech companies as investors digested a fall in weekly jobless claims and concerns about a recent inflation spike. Amazon, Apple and Facebook dropped more than 1% each. Nvidia tumbled 4% and Tesla fell almost 2%. The S&P 500 technology sector index fell 1.1% and was on track to snap a four-day winning streak. Earlier this week, investors' favor for heavyweight growth stocks pushed the S&P 500 and the Nasdaq to record highs. Nine of the 11 major S&P sector indexes were down, with energy falling more than 1% and tracking a drop in crude prices on expectations of more supply after a compromise agreement between leading OPEC producers. Fresh data showed the number of Americans filing new claims for unemployment benefits fell to a 16-month low last week as the labor market gained traction, while worker shortages and bottlenecks in the supply chain have frustrated efforts by businesses to ramp up production to meet strong demand for goods and services. Federal Reserve Chair Jerome Powell told lawmakers that he anticipated the shortages and high inflation would abate over time. Yet many investors still worry that more sustained inflation could lead to a sooner-than-expected tightening of monetary policy. "People are very nervous and concerned about inflation, tax rates and the (2022 midterm) election. Those three things are very much on people's minds," said 6 Meridian Chief Investment Officer Andrew Mies, describing recent phone calls with his firm's clients. Morgan Stanley dipped 0.5% after it beat expectations for quarterly profit, getting a boost from record investment banking activity even as the trading bonanza that supported results in recent quarters slowed down. Second-quarter reporting season kicked off this week, with the four largest U.S. lenders - Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co - posting a combined $33 billion in profits, but also highlighting the industry's sensitivity to low interest rates. The Dow Jones Industrial Average was down 0.24% at 34,849.71 points, while the S&P 500 lost 0.74% to 4,341.84. The Nasdaq Composite dropped 1.27% to 14,458.69. Blackstone said late on Wednesday it would pay $2.2 billion for 9.9% stake in American International Group's life and retirement business. AIG and Blackstone were both up about 2.5%. Johnson & Johnson dipped 1% after it voluntarily recalled five aerosol sunscreen products in the United States after detecting a cancer-causing chemical in some samples. Declining issues outnumbered advancing ones on the NYSE by a 2.37-to-1 ratio; on Nasdaq, a 2.71-to-1 ratio favored decliners. The S&P 500 posted 29 new 52-week highs and no new lows; the Nasdaq Composite recorded 24 new highs and 166 new lows." MY COMMENT Do you really see ANY reason for a drop today in the news and earnings above? I dont. In FACT.....EVERYTHING in this little article looks pretty positive to me. The FED is going to hold off doing anything....earnings are great.....the unemployment claims fell to a 16th month low.....etc, etc, etc. The ONLY thing new in here is the addition of the....fear of the midterm elections.....to the fear mongering topic list. Of well.....that is just the way it goes over the short term. There is NO reason, logic, or rationality to the short term markets. Never has been...never will be.
Personally I DOUBT STRONGLY that we will have POWELL to kick around after February. I think he is doing a good job with a very difficult situation. I think it will be a BIG mistake. This little article...which I will NOT post...might give you a bit of a clue where we are headed in about 6 months.......as people like YELLEN take more and more control of the economic levers. My view is that a change in the FED........with more politicization.......will lead to the end of the bull market and will trigger a very nasty BEAR MARKET. I suspect that if POWELL is not re-nominated we will be seeing a very NASTY BEAR MARKET start some time in the second to forth quarter of next year. Yellen Demurs on Second Powell Term, Saying She’ll Talk to Biden https://finance.yahoo.com/news/yellen-demurs-second-powell-term-203929866.html HERE....are a couple of related articles: Seven months and ticking, the case for keeping Powell as Fed chair builds https://finance.yahoo.com/news/seven-months-ticking-case-keeping-100529718.html These articles are jumping around and disappearing like crazy as I try to post them. I had a third one that I was going to put up but it is now gone.
My HONEYWELL reports tomorrow. Looking forward to it. It will be nice to have some....ACTUAL....financial data to look at. EDIT: WHOOPS...make that NEXT Friday. DARN......I was looking forward to some new data.
HERE is the latest economic report which everyone will ignore....as usual. The poor experts.....they seem to be WRONG on this stuff about 90% of the time. U.S. retail sales unexpectedly rise in June https://finance.yahoo.com/news/u-retail-sales-unexpectedly-rise-123917896.html (BOLD is my opinion OR what I consider important content) "WASHINGTON (Reuters) - U.S. retail sales unexpectedly increased in June as demand for goods remained strong even as spending is shifting back to services, bolstering expectations that economic growth accelerated in the second quarter. Retail sales rebounded 0.6% last month, the Commerce Department said on Friday. Data for May was revised down to show sales falling 1.7% instead of declining 1.3% as previously reported. Economists polled by Reuters had forecast retail sales dropping 0.4%. But shortages of motor vehicles because of a global semiconductor supply squeeze, which is undercutting production, are hampering sales of automobiles. Sales of some household appliances have also been impacted by the chip shortage. "We expect supply issues and dwindling auto inventories to continue to limit auto sales in the coming months," said Veronica Clark, an economist at Citigroup in New York. Demand shifted to goods like electronics and motor vehicles during the pandemic as millions of people worked from home, took online classes and avoided public transportation. Spending is now rotating back to services like travel and entertainment, with at least 160 million Americans fully vaccinated against COVID-19. Retail sales are mostly goods, with services such as healthcare, education, travel and hotel accommodation make the remaining portion of consumer spending. Restaurants and bars are the only services category in the retail sales report. Excluding automobiles, gasoline, building materials and food services, retail sales increased 1.1% last month after a downwardly revised 1.4% decrease in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have dropped 0.7% in May. "With the economy re-opening, services spending has begun to pick up and could pull some spending away from goods toward some services that are not captured in the retail sales report," Kevin Cummins, chief U.S. economist at NatWest Markets in Stamford, Connecticut. Economists expect consumer spending, which accounts for more than two-thirds of U.S. economic activity, logged double-digit growth in the second quarter. Consumer spending grew at an 11.4% annualized rate in the first quarter. Households accumulated at least $2.5 trillion in excess savings during the pandemic, which is expected to drive spending this year and beyond. From July through December some households will receive income under the expanded Child Tax Credit program, which will soften the blow of an early termination of government-funded unemployment benefits at least 24 states. Gross domestic product growth estimates for this quarter are around a 9% rate, which would be an acceleration from the 6.4% pace notched in the first quarter. Economists believe the economy could achieve growth of at least 7% this year. That would be the fastest growth since 1984. The economy contracted 3.5% in 2020, its worst performance in 74 years." MY COMMENT GOOD. The re-opening continues and will GROW from here for at least another year if not longer. What I find interesting is the so called 'experts". It is ROUTINE to see these reports totally missed by all the experts. Either the experts are NOT experts and are totally DUMB. Or.....the ways that we......THINK.....we are measuring this "stuff" is totally inaccurate and not connected to reality....at all. My view....a combination of both. The experts and the tools they use to measure ALL economic activity and data......are SCREWED UP. They dont have a clue what they are doing or if any of their tools work. OBVIOUSLY the measurement tools.....dont work....since they are routinely WRONG in what they predict and anticipate. THIS is one big reason why as an investor there is NO reason to use economic data as an inverting tool. The ONLY thing that works and is relevant to investing is ACTUAL fundamental financial data as reported by REAL businesses.
The Ten Year Treasury remains stuck in the low end of the yield chart for the past.......100 years. Take out the manipulation by the short term traders pushing their trades and this is what you get. Many people are SHOCKED and CONFUSED by this since it is contrary to what we have been told so much lately about what the rates should be doing. WELL.....this is the REALITY.
This little article contains a few nuggets of truth for investors. Market history suggests stocks will keep climbing this year: Morning Brief https://finance.yahoo.com/news/mark...imbing-this-year-morning-brief-090259889.html (BOLD is my opinion OR what I consider important content) "It's already been a strong year for the U.S. stock market. Through Thursday's close, the S&P 500 (^GSPC)is up 16.1% year-to-date, while the Dow (^DJI)and Nasdaq (^IXIC) are both up more than 12%. But index-level gains, of course, don't tell the full story of what's happening in the market, today or otherwise. As Canaccord Genuity strategist Tony Dwyer told Yahoo Finance Live earlier this week, what we've seen underneath the surface of indexes hitting record highs is a rolling correction with factors, sectors, and styles moving in and out of favor. "Most institutional investors...in general try to pick stocks and sectors," Dwyer told Yahoo Finance. "It's what they're paid to do. The frustration hasn't been the speed of the recovery in the markets, it's been the volatility in the sector rotation in the markets." Dwyer added: "People that watch the markets, they pay attention to the S&P 500, they pay attention to NASDAQ, they're at new highs, it feels so exciting. But under the surface, most investors that I talk to, their guts are churning, which is why it's a summer of indigestion, because it's very hard to get a real theme, because of the rotation between growth and value under the surface." Growth stocks, as measured by the Vanguard Growth Index ETF (VUG), have gained around 10% in the last two months, while the Vanguard Value Index ETF (VTV) is down 1.5% over that period; the S&P 500 has gained about 4.5% in that time. Industrials (XLI), Materials (XLB), and Financials (XLF) have all underperformed the S&P 500 since June. Facebook (FB), Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT) are all within 5% of record highs. The rally we've seen in the bond market — where the 10-year Treasury yield has gone from around 1.75% to under 1.3% on Thursday — helps form the base for this current market environment. All else equal, lower rates suggest slower economic growth ahead; they also lead investors to favor faster growing sectors like technology over sectors more sensitive to the economic cycle, like financials and industrials. This rotation within the market has also hit notable pockets of froth like SPACs, new issues, and the meme trade. Through Thursday's trading session, shares of AMC (AMC) and GameStop (GME) were more than 40% below highs hit back in early June. Shares of the two companies have gained, of course, more than 1,400% and 700%, respectively, year-to-date. Recent new issues like Coinbase (COIN), Krispy Kreme (DNUT), Oatly (OTLY), and Didi (DIDI) have also traded unenthusiastically since going public. But data from Bespoke Investment Group suggests that history is very much on the market's side this year. In years when the market acts this well in the first six months of the year, we tend to see further gains and limited downdrafts through the balance of the year. In a report published Wednesday, Bespoke looked at the S&P 500's performance for each year since 1928, and pulled out the 10 years with year-to-date paths most correlated to 2021. In these similar years, the average gain for the S&P 500 through July 14 was 20.1%, with a median return of 18.8%. "With this year's gain of 16.2%, the magnitude of the gains so far this year is relatively close to the median of the 10 prior years," Bespoke wrote. "Looking ahead, the S&P 500's median rest-of-year performance in those 10 years was a gain of 7.1% with positive returns 70% of the time," the firm noted. "Compared to all years since 1928, the rest-of-year gain in these 10 years was considerably stronger than the median rest of year gain of 4.0% for all years since 1928." In other words, during years in which the market has gone up with the force we've seen so far in 2021, the S&P 500 through the balance of the year tends to deliver stronger-than-normal returns as well. Additionally, Bespoke notes that in only two of the 10 years most similar to 2021 has the second half featured a drawdown of more than 10%, with the median correction from highs only amounting to a 2.3% drop. So not only do stocks continue grinding higher in this kind of environment, but they tend to do so with less-than-normal volatility. At least if you're buying the index." MY COMMENT OK....I will accept this theory and argument as.....PROBABILITY. BUT....I am wary of this sort of statistical stuff since it is often set up to reach a particular conclusion. I DO NOT think the average investor cares in the slightest about what is the hot sector of the moment. The average....REAL....investor does NOT jump around trying to guess the hot sector of the moment. they hold what they have and invest in their 401K or IRA or brokerage account and sit for the longer term. It is ONLY the....so called....professionals that are constantly chasing after the latest, greatest, how sector of the moment. The average....."DUMB"....investor....."the little people" of investing....somehow instinctively know that it is a waste of time to jump in and out of different areas of the market trying to capture the latest HOT fad. BESIDES...they are living life and dont have time to be constantly trying to time the markets and trade....."churn"...their account. BUT......I do believe it is a no brainier.....in terms of PROBABILITY....that the markets will rise from here to the end of the year. That DOES NOT mean it is GUARANTEED.......but....since I am NOT gambling with my money.....it does not matter.
