The Long Term Investor

While waiting for the open....here is the economic data that no one will care about.

U.S. jobless claims show surprise gain, well above expectations

https://www.cnbc.com/2021/07/22/us-weekly-jobless-claims.html

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

"Key Points

• Weekly jobless claims totaled 419,000 for the week ended July 17, above the 350,000 estimate.
• The total represented a gain from the previous week’s 368,000.
• Continuing claims declined by 126,000 to 3.24 million for another pandemic-era low.

Weekly jobless claims unexpected moved higher last week despite hopes that the U.S. labor market is poised for a strong recovery heading into the fall.

Initial filings for unemployment insurance totaled 419,000 for the week ended July 17, well above the 350,000 Dow Jones estimate and more than the upwardly revised 368,000 from the previous period, the Labor Department reported Thursday.

The news sent stock market futures off their highs for the morning, with Wall Street pointing to a flat open.

The total was the highest weekly count since May 15 and comes amid expectations that the jobs picture will improve markedly as enhanced unemployment benefits end and companies get more aggressive about filling vacant positions.

On the positive side, continuing claims, which run a week behind the headline number, declined by 126,000 to 3.24 million, a fresh pandemic low. The total was last higher on March 14, 2020, just after the Covid-19 pandemic declaration and as governments across the U.S. ordered businesses to close, sending more than 22 million to the unemployment line.

Last week’s surprise increase in claims comes as fears grow over the relatively new delta variant of the coronavirus. Case counts and hospitalizations are rising, primarily among unvaccinated parts of the population, raising the specter that another wave of the disease is hitting the U.S. and the world.

New cases and hospitalizations are around the levels they were in mid-May though they remain a fraction of where they were during the winter outbreak."

MY COMMENT

I dont know why anyone would be surprised.....it is all about FREE MONEY. In fact many people that are not working just got a BIG RAISE.....the FREE MONEY per child that started this month. I know from daily life....this is the case. This should be a significant warning to those that are pushing for a guaranteed minimum income. These types of policies have significant impact on our economic system....they DISTORT the economy.....in ways that we have never experienced before.

I suggest anyone that has any doubts....look at the states that ENDED the FREE MONEY for not working. The figures are very significant and telling.

BUT....as an investor.....I dont mind this report. it will help to tamp down the inflation speculation by creating doubts about the re-opening and the strength of the economy. It will help the markets and will prolong the bull market. Another brick in the wall of worry.

This "stuff" will only last till September when the extra benefits end. At that time the problem will......partially...... solve itself. Although....the FREE MONEY for having children....will continue till the end of the year and....I suspect.....will severely DISTORT....the number of women that choose to come back into the work world.

 

HERE is a pretty good summary of the situation as we prepare to start another market day.

Futures Erase Gains, Treasuries Rise on Jobs Data: Markets Wrap

https://finance.yahoo.com/news/asia-stocks-rise-earnings-led-221342515.html

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

"(Bloomberg) -- Stock-index futures erased gains and Treasuries advanced after data showed unemployment claims in the U.S. unexpectedly rose last week, underscoring the uneven recovery in the jobs market.

September contracts on the S&P 500 were little changed, while those on the Nasdaq 100 held a modest advance after the data. The dollar was steady.

Meanwhile, stocks in Europe held gains while the euro fluctuatedas investors awaited further guidance from the European Central Bank after it left borrowing costs unchanged and pledged to maintain accommodative policy. German bunds gained along with most European bonds.

Rising earnings expectations are tempering worries over peaking economic growth and the spread of the delta virus variant that roiled markets at the start of the week. About 86% of the S&P 500 firms reporting so far have beaten analysts predictions, while 12-month profit forecasts for the gauge are rising at the fastest pace in decades.

The turnaround from the Monday’s selloff shows “corporations have been very resilient through all this,” David Mazza, Direxion head of product, said on Bloomberg Television. “Earnings estimates are quite remarkable, probably some of the best on record. Even through all this, we have central-bank liquidity remaining very abundant, economic growth being robust.”

Crude oil advanced as investors weighed signs of continued demand for oil products, including gasoline, against disruptions triggered by the spread of the delta variant.

The Stoxx Europe 600 index turned positive for the week only three days after Monday’s selloff. Travel and leisure stocks led the advance, with 19 of the 20 industry sectors in the green. Unilever Plc was an exception, tumbling the most since Feb. 4 in London, after the company lowered its guidance for profitability, citing cost inflation.

Bitcoin briefly rose above $32,000 after getting a boost from prominent voices including billionaire Elon Musk, who said his space exploration company SpaceX owns the digital token. The cryptocurrency later erased its gains.

Here are some of the main market moves:

Stocks

Futures on the S&P 500 were little changed as of 8:41 a.m. New York timeFutures on the Nasdaq 100 rose 0.1%Futures on the Dow Jones Industrial Average were little changedThe Stoxx Europe 600 rose 0.8%The MSCI World index rose 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1791The British pound rose 0.4% to $1.3769The Japanese yen rose 0.2% to 110.07 per dollar

Bonds

The yield on 10-year Treasuries declined two basis points to 1.26%Germany’s 10-year yield declined three basis points to -0.42% Britain’s 10-year yield declined two basis points to 0.59%

Commodities

West Texas Intermediate crude rose 0.2% to $70.41 a barrelGold futures fell 0.3% to $1,801.60 an ounce."

MY COMMENT

Interesting that the Ten Year Yield in Germany continues to be NEGATIVE with Britian not too far from joining them.

Looks like more of the same with a TYPICAL open coming up in about 15 minutes.......as we head toward the end of another week. ONE STEP AT A TIME.

 

A bit thin little sliver of hope for those looking to buy a home. Yes...meaningless in any local market since this is national data. But...I do believe the HIGH home prices and sellers market are tempting.....more people to put homes on the market. BUT.....the number of homes available for sale is STILL way below normal.

Housing inventory grows for first time in over a year: report
Inventory is still down 37.5% compared to June 2020

https://www.foxbusiness.com/real-estate/housing-inventory-grows-first-time-over-year

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

"Inventory in the U.S. housing market grew in June for the first time in 15 months while home sales and prices continued to soar, according to a new report.

The combination of all three "created the perfect trifecta for a hot housing market," according to the RE/MAX National Housing Report for June 2021, which covers 53 markets.

In June, sales surged 14.2% from May and topped "all other months in the 13-year history of the report," according to RE/MAX.

The median sales price – about $336,000 – also hit another record, surpassing the previous high of $320,000 in April, according to the report.

Meanwhile, the number of homes for sale in June grew 1.9% from the prior month, which marks the first increase since March 2020.

And although inventory is still down 37.5% compared to June 2020, the slight uptick is a "welcome sign" for buyers, RE/MAX president Nick Bailey, said.

"June saw a unique case of supply and demand rising in unison, thanks to an uptick in sellers listing their homes for sale – a very welcome sign for frustrated buyers," said Bailey.

According to Bailey, sellers appear "more confident about finding another home after they sell their current one" which is contributing to inventory levels.

If this confidence continues, "inventory levels should keep growing."

MY COMMENT

The perfect....textbook example....of the economic truth....supply and demand.

 

TYPICAL wait and see type of day. We are used to this lately.

ALL the accounts that I run are on the edge of new all time highs again.

You know.......uncertainty in the markets......is just the norm. What is now NEW....is the constant DAILY.....minute by minute, micro focus, on the markets and all aspects of the economy. It is NOT healthy or rational. It will drive you CRAZY. AND....it does not matter. I dont think I have ever seen a period like this...other than perhaps at the peak of the day trading mania in the 1990's when people were ALSO focused on the markets on such a micro level. Too many people siting and working from home is probably partly responsible.

WTMI......way too much information.

After a while the GLUT and FLOOD of information OVERWHELMS any clear, longer term, view of investing and the markets. The constant information is impossible to process. Most investors would probably be better off to disconnect from the internet every day and spend some time simply thinking and day-dreaming. Your brain needs down time to absorb and process information.

ITSD......investor traumatic stress syndrome.

 

Good for you Emmett. ETF investing.....set and forget. That is a great year to date return.

SO....the markets have turned....compared to this morning. We are now green across the DOW, NASDAQ, and SP500. We are back to the pattern that we have seen for the past 5-6 weeks....a sloppy weak open.....and......strength into the afternoon. So far so good.

 

HERE is a bit more on the housing market....a MAJOR source of net worth GAIN for most people that own a home this year.

Existing home sales bounce back in June, as home prices continue to rise

https://finance.yahoo.com/news/existing-home-sales-june-2021-140007789-140119590-135943271.html

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

"Home sales activity bounced back in June after a four-month decline as home prices continue to hit new highs.

Existing home sales rose 1.4% to a seasonally adjusted 5.86 million in June, from a month earlier, according to the National Association of Realtors (NAR). The results missed analyst expectations of a 1.7% gain and 5.9 million units, according to Bloomberg consensus, but remain above activity seen before the COVID-19 pandemic when typically 5.5 million units are sold in a month. Existing home sales are up 22.9% from a year ago, when some states were still in lockdown. Sales activity was up in three of the four regions of the U.S.; in the South the number of sales was unchanged.

"The housing market remains strong," said Lawrence Yun, NAR chief economist. "Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales."

The median existing-home price for all housing types in June hit $363,300, the highest level recorded since January 1999. The results follow the S&P CoreLogic Case-Shiller national home price index posted the fastest price growth in more than 30 years. That index trails other home price data reports.

“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”

He noted that the increase in home prices was partially driven by an increase in sales of higher end properties, homes above $500,000. The sale of homes priced $500,000 to $750,000 was up 81% from a year ago, while sales of homes from $750,000 to $1 million was up 119%, the NAR said.

"Affordability challenges persist for many potential buyers," said Joel Kan, Mortgage Banker Association’s assistant vice president of economic and industry forecasting, in a press statement. "Our data on mortgage applications show that purchase activity has moved lower since March, while the average loan size has stayed elevated, consistent with the elevated share of all-cash sales and higher median prices reported by NAR.”

Total housing inventory at the end of June amounted to 1.25 million units, up 3.3% from May’s inventory and down 18.8% from one year ago. Homes are being sold at a record clip of 17 days on the market. Five years ago during normal market conditions (post Great Recession and pre-COVID) homes were on the market for 30 days. Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 2020.

"Maybe by the end of the year and in 2022 we will begin to see inventory growth," Yun said, referring to recent housing start data and the winding down of mortgage forbearance which could result in more homes being put up for sale.

The modest rebound in sales activity was expected as pending home sales, which is a leading indicator of future sales, also turned around in May, increasing 8% from the previous month. Pending home sales grew robustly last month, while permits, which usually lead starts, have declined in recent months, Credit Suisse recently wrote in a research note prior to the results.

"As we approach the late summer, the months ahead hold critical clues into the housing market’s post-pandemic future. If sales maintain recent momentum, even as inventory rises, it should help bolster builder confidence and convince them that high demand for housing is not a short-term phenomenon," said Realtor.com Chief Economist Danielle Hale in a statement. "This should also ultimately lead to more construction and put a bigger dent in the ongoing shortage of homes for sale. But if home sales slip, perhaps due to households prioritizing other spending categories that were neglected during the pandemic, builders may proceed more cautiously.”"

MY COMMENT

The best of all worlds for investors....the stock markets are performing at a high level.......we are seeing AMAZING earnings with 86-90% beating expectations.....and.....house prices are going up like a rocket increasing net worth.

Here in Central Texas....the market has slowed down a bit from the RED HOT phase.....but it is still very torrid. Seems to me like we are in a little time period where the MASSIVE gains are being digested. Prices are NOT going down but they appear stable.

Here in my little 4200 home area......the LOWEST priced home is now $565,000....the highest is still $10,000,000. It seems like some of the outlying areas from the city are starting to pick up steam.....although they were already hot. Areas like Bastrop or San Marcos. LOTS of big commercial growth happening in those areas.....companies like Amazon, and Tesla.

Home ownership.....passive investing at its best....at the moment. The one bright spot for buyers.....record low mortgage rates. It is a very RARE year when you see multiple sources contributing to gain in net worth.

 

Some great observations Zukodany.....and....dont write your portfolio off.....over some very short term results. It is a process to create a portfolio and investing style that you like for the long term. You are doing EXACTLY what you should. AND....over the short time you have been investing you have done nicely.

You have a big advantage over most new investors....since you are a business person. In my view your investing thinking and reasoning is very advanced for the length of time you have been involved.

 

Here is a list of POTENTIAL FOREIGN stocks for any one to check out that is into International investing. I have...ZERO...NO....NONE.....NADA...interest in non-USA companies.....so I have NO knowledge of these companies. I am NOT recommending them....do your research.

11 Superior Foreign Stocks to Buy
These undervalued wide- and narrow-moat names were recently added to the Morningstar Global Markets ex-US Moat Focus Index.

https://www.morningstar.com/articles/1047817/11-superior-foreign-stocks-to-buy

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

"My colleague Ben Johnson has argued that investors have fewer reasons than ever for maintaining "home bias" in their portfolios. What's home bias? It's investors' tendency to tilt their portfolios in favor of domestic stocks versus foreign fare. He points out that U.S. stocks constitute about 55% of the world's public equity market cap, with foreign stocks representing the remaining 45%. But most U.S.-based investors' equity allocations are nowhere close to that breakdown.

"When it comes to investing overseas, many decide to ditch diversification at the border," Johnson notes.

Granted, there are good explanations for why this historically has been the case. Among them: Investing overseas can be costly; investors feel more "in-the-know" about companies that are domiciled in their home countries; the U.S. market is less prone to corporate governance problems and political risk than some others; and domestic multinationals provide exposure to overseas markets. However, as the world becomes smaller, Johnson thinks some of these explanations have grown "flimsier" over time.

"Furthermore, in my opinion, even when considering them all together, they don't warrant the degree of home bias that exists in many investors' portfolios today," he asserts.

In a nod to going global, we're sharing some interesting--and inexpensive--foreign-stock ideas.

As a reminder, Morningstar's approach to smart stock investing applies around the globe. First, favor companies with durable competitive advantages, or economic moats. These companies should be able to fend off competition and outearn their costs of capital for years to come. Then, buy these companies when they're trading below what they're worth.

We've turned to the Morningstar Global Markets ex-US Moat Focus Index for opportunities. This quality-focused index is a subset of the Morningstar Global Markets ex-US Index, a broad index representing 97% of developed-markets (excluding the United States) and emerging-markets market capitalization. Morningstar ranks the wide- and narrow-moat stocks in the broad index by lowest price/fair value to find the 50 cheapest wide- and narrow-moat stocks. These stocks represent the most compelling values among the global moat universe, according to Morningstar analysts.

For this article, we focused on non-U.S. stocks that were added to the index as of its latest reconstitution in June 2021. Eleven of those newcomers have shares listed on U.S. exchanges (and are therefore easily accessible to U.S. investors), are covered by our analysts, and are undervalued as of this writing. Stamp your passport!



Here's a little bit from our analysts about three of the names on the list.

Banco Santander SA (SAN)
"Santander offers investors a combination of emerging-markets and developed-markets banking exposure. This will not be to everybody's taste. Santander points to its track record of lower earnings volatility as vindication of its geographical diversification strategy, while most fund managers will point out that they can use portfolio construction to achieve the same diversification benefits. We believe that Santander could boost its profitability, release capital, and rerate its valuation by trimming its portfolio to operate only in areas where it has a clear competitive advantage. Santander's U.S. regional banking business has been a particular drag on group profitability for the better part of a decade.

"The high-double-digit/low-20s returns on equity that Santander generates from its Latin American operations are obscured by the subscale returns it generates in Europe and the U.S. While profitability (and growth prospects) tend to be structurally higher in emerging markets as a rule, Santander is also one of the market leaders in Brazil, Mexico, and Chile. We believe Santander's strong competitive position in these consolidated markets protects its high profitability.

"Santander's earnings have been remarkably stable compared with most of its European peers. While diversification plays a role, its small investment banking exposure and relatively low exposure to home loans also contributed. Investment banking earnings tend to be volatile, while the long duration and low margins of home-loan books tend to large write-downs relative to earnings during downturns in the credit cycle."

--Johann Scholtz, analyst

Vodafone (VOD)
"Vodafone has steadily transformed its business over the past several years, adding fixed-line assets in core markets, selling out of peripheral areas like New Zealand, and forming partnerships in others. The recent IPO of its tower business Vantage Towers marks the latest move to improve efficiency and highlight the value of underlying assets. Overall, we believe Vodafone holds a solid set of assets, with opportunities to grow cash flow.

"Through a series of acquisitions and partnerships, Vodafone has added fixed-line infrastructure to its traditional wireless business in several countries, notably in Germany, which is now its most important market, accounting for about one third of consolidated service revenue and 40% of EBITDA. Vodafone is now the largest cable company in the country, with networks that reach around 60% of the population, enabling it to capture about one third of the broadband market. In total, Vodafone can now provide fixed-line services in addition to wireless to about 140 million European homes, including 7 million in the Netherlands through its partnership with Liberty Global.

"Vodafone has also sought to improve efficiency and free up assets. The firm merged its Italian wireless towers with Telecom Italia's (INWIT), receiving EUR 2 billion in cash and a stake in the tower firm. Vodafone contributed its stake in INWIT, a U.K. tower venture, and the remainder of its owned towers across Europe to a new entity, Vantage Towers, which recently went public, freeing up additional capital for Vodafone. This should enable it invest aggressively while maintaining a solid financial position.

"Intense competition, especially in Spain and Italy, has led to disappointing financial results recently. However, we think the reshaping of Vodafone's capabilities across Europe to integrate fixed-line and wireless assets positions the firm to compete more effectively over the long term. Integrating fixed-line and wireless networks should improve the quality of each over time, while bundling services should enable the firm to serve customers more efficiently."

--Mike Hodel, director

WPP (WPP)
"WPP is the largest player within the advertising space, operating in more than 110 countries. We expect the firm to maintain its market-leading position as it generates competitive organic growth, continues to make acquisitions, and increases focus on the faster-growing emerging and the overall digital ad markets.

"We look for WPP's acquisition growth strategy to continue, as the firm has consistently brought in smaller local ad agencies and quickly gained traction in other faster-growing international markets. Historically, WPP has also aggressively acquired larger players in the space such as Ogilvy and Grey. Consolidation within the advertising space has resulted in the Big Five companies (WPP, Omnicom, Interpublic Group, Publicis Groupe, and Dentsu) generating nearly 30% of the world's total ad revenue. Such consolidation has been driven by the globalization of businesses in various verticals, increasing demand not only for vertical-specific advertising expertise, but also for experience, knowledge, and clearer understanding of different cultures and regulations.

"We also expect WPP to continue acquiring and investing in the growing digital advertising space, which will help the firm remain competitive. Clients of WPP and its peers are allocating more ad dollars toward below-the-line digital campaigns, creating growth opportunities for WPP and other players in the space. Some of WPP's acquisitions within the digital ad market include Taylor Nelson (which became part of Kantar, which was sold in 2019) and AKQA (which is now combined with Grey), along with investments in Essence and AppNexus (which generated significant return for WPP after being acquired by AT&T (T) in 2018).

"To further enhance digital offerings and overall data technology, WPP plans to invest up to GBP 150 million during the next few years. Among its peers, we believe WPP is at the forefront when it comes to providing different components of digital advertising such as programmatic media buying and ad placement, along with performance measurement. As most of WPP's larger clients favor omnichannel and advertising campaigns, past and future acquisitions and investments help make WPP a one-stop shop.""

MY COMMENT

I got nuthin......I DO NOT do international stocks and have ZERO interest in any of these companies. I also know NOTHING about any of them. I am posting this for any on here that are interested in some potential International companies to research.

 

I hope I dont have one....but I WILL put it up here for ALL to see when.....not if....it happens. EVERYONE has bad years. It is the long term that smooths it all out.

 

I nearly ran the board today....but....I had 1 red position....PG. Everything else was nicely green. A really strong day into the close. Plus....I got a strong beat of the SP500 today by 0.82%. Today took me to a new all time high.

I am anticipating another nice green day tomorrow. I dont see anything that can stand in our way. HONEYWELL reports tomorrow before the bell. Everything I am seeing points to a good report that should set the tone for the day. Others reporting tomorrow....in addition to the usual banks.....Schlumberger, Kimberly Clark, and American Express.

Next week....the BIG BOYS report....GOOGLE, APPLE, AMAZON, and MICROSOFT. PROCTOR & GAMBLE reports on next Friday. So a big week for half of my portfolio.

 

A very nice day....in spite of the BOO-BIRDS.

Stock market news live updates: Stocks listless after unexpected jump in jobless claims

https://finance.yahoo.com/news/stoc...-221841943-111046902-221350203-221314424.html

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

"Stocks notched slim gains in rangebound trading on Thursday, stretching an improbable win streak into a third day as traders struggled to decipher the meaning behind a surprise rise in unemployment.

Thursday's session completed three consecutive days of gains, part of the market's attempt to calibrate a resurgence of COVID-19 cases against a red-hot economic expansion that continues to gain momentum. Even amid the turmoil and uncertainty, the major benchmarks are within striking distance of record highs set just over a week ago.

Sentiment took a hit after data Thursday showed an unexpected jump in jobless claims, which last week set a fresh pandemic-era low. New unemployment filings jumped to 419,000 in the latest week, well above consensus estimates of 360,000.

Since the onset of COVID-19, the data series has served as an avatar of the labor market's health, and could take on new importance if rising infections start to trigger new restrictions — which may lead to another round of job losses.

"As with the recent resurgence in COVID cases stemming from the Delta variant, the jump in jobless claims is a disappointment. Recovery is never a perfect straight line," noted Mark Hamrick, a senior economic Analyst at Bankrate.

Strong earnings have helped the market heal from Monday's pandemic-inspired meltdown, with investors looking at the fundamentals rather than surging coronavirus numbers.

This week, industry bellwethers Netflix (NFLX), Chipotle (CMG), Coca-Cola (KO), Johnson & Johnson (JNJ) and Verizon (VZ) topped market expectations, boosting a market that's seen precious little downside in recent months. The sell-off that began the week was the year's worst trading day, and spooked traders that had become "spoiled" by a seemingly endless series of win streaks.

“The truth is investors have been very spoiled by the recent stock market performance,” LPL Financial chief market strategist Ryan Detrick wrote on Wednesday. "..........

MY COMMENT

I did edit out the end of this article that was just repetition.

Actually.....if you were reading this in a vacuum.....I am using the scientific term.....NOT....returning to the vacuum discussion........you might not realize how nice of a day it was.

"Stocks notched slim gains in rangebound trading"

"an improbable win streak"

"traders struggled to decipher the meaning behind a surprise rise in unemployment."

"the market's attempt to calibrate"

"Sentiment took a hit after data Thursday showed an unexpected jump in jobless claims"

"Recovery is never a perfect straight line"

The above definately does not reflect MY day. I love the word choice......."slim gains"....."rangebound"....."struggled"....."surprise"......"attempt"....."took a hit"....."unexpected".....etc, etc, etc.

Actually the day went EXACTLY as I thought it would. AND......I have a REQUEST in for tomorrow to do just as well if not better. We ALL......deserve it. END of another week.....lets.......HIT IT OUT OF THE PARK.

I continue to be fully invested for the long term.