The Long Term Investor

EPIC....day in the markets so far. I guess the unemployment claims data and nice earnings are BOOSTING the markets today. For once we are seeing markets DRIVEN by REALITY rather than the fear mongering topics that have been pushed for the past 6 months.

I was IGNORING the markets today till just a few minutes ago. Obviously they dont need my help today. I guess I should ignore them more often.

ALL 10 of my stock holdings are GREEN so far today. The BIG gains are in Nvidia....Google....Microsoft......and Apple. A good day for the BIG TECH TITANS.

 

Speaking of jobless claims.

Jobless claims: Another 293,000 individuals filed new claims last week, reaching fresh pandemic-era low

https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-october-180735901.html

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

"U.S. states posted a much larger-than-expected drop in initial unemployment claims last week, bringing the number of those newly unemployed back toward their pre-virus pace.

The Labor Department released its jobless claims report Thursday morning. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

• Initial unemployment claims, week ended October 9: 293,000 vs.320,000 expected and a revised 329,000during prior week
  
• Continuing claims, week ended October 2: 2.593 millionvs. 2.670 millionexpected and a revised2.727 million during prior week
  

The latest jobless claims data reflected the smallest number of new filings since March 2020. New weekly jobless claims having been inching closer to their pre-pandemic levels over the past several months, reflecting a slowdown in firings, layoffs and separations as reopenings took place and demand for workers resurged.

"I see this as evidence of a pick-up in employment growth. After all, monthly jobs growth is about the level of hiring less the level of separations," Neil Dutta, head of economics at Renaissance Macro Research, wrote in an email Thursday morning. "Assuming quits are flat this month as labor supply is released, the drop in claims implies a decline in separations and stronger payrolls."

Last week's new jobless claims helped markedly bring down the four-week moving average for initial filings, which smooths out volatility in the weekly data. This metric came in at 334,250 in the latest report, representing a decrease of 10,500 from the prior week's level. This was also the smallest total since March 2020.

Continuing claims came in at a fresh pandemic-era low in last week's report as well. These claims, which capture those still collecting benefits from regular state unemployment programs, dropped to just under 2.6 million at beginning of October. By comparison, continuing claims had averaged 1.699 million throughout 2019.

Even as the number of those newly unemployed improves, lingering concerns over the coronavirus have kept a lid on further progress in the labor market's recovery, with many individuals still remaining on the sidelines of the labor force. Demand for workers has far outpaced supply, and job openings were at a near-record high of more than 10.4 million in August, Labor Department data earlier this week showed.

"Shortages are a severe constraint for the labor market currently," Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note published Tuesday. "Overall, the labor market remains on a gradual path towards pre-pandemic health. However, the slowdown in the pace of job gains and still-depressed participation rates are reminders that the process will likely take some time."

The labor force participation rate in September was at just 61.6%, recovering from a pandemic-era low of 60.2% but still holding 1.7 percentage points below its level from February 2020.

"We’re getting more concerned that much of the drop in labor force participation will prove permanent, which is in turn a reason to expect the recovery in real activity and employment to disappoint over the coming years, while wage and price growth remain elevated," Michael Pierce, senior U.S. economist for Capital Economics, wrote in a note on Wednesday."

MY COMMENT

We are seeing the re-opening in drips and drabs......as you would expect. It is going to be two steps forward.....one or two steps backward......for a good while. I would guess at least 6-12 months. But when it all BREAKS FREE we should see a nice economic BOOM. We just have to have the patience and guts to get through the erratic times ahead and NOT panic and put a bunch of programs in place that KILL or IMPAIR the recovery....or......the longer term economy. If we PANIC and start to.....do something....about inflation, or jobs, or other issues.....we will prolong and potentially SCREW UP the recovery by adding more and more disrupting factors to the mix. We need to just leave HANDS OFF and have the patience to wait and let things sort themselves out.

 

HERE....is exactly what I was saying in my initial post today...before I saw any of this news.

Stock market news live updates: Stocks rise after bank earnings top expectations, jobless claims set pandemic-era low

https://finance.yahoo.com/news/stock-market-news-live-updates-october-14-2021-221841910.html

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

"Stocks gained on Thursday after a slew of earnings results from the big banks topped expectations, and new weekly jobless claims showed a larger-than-anticipated improvement to a pandemic-era low.

The S&P 500 was on track for a second straight session of gains. The Nasdaq also extended Wednesday's gains as Treasury yields fell further. The benchmark 10-year yield pulled back further to come in below 1.53% after topping 1.62% just earlier this week.

Bank earnings continued on Thursday with companies including Bank of America (BAC), Wells Fargo (WFC) and Morgan Stanley (MS) posting quarterly results before the opening bell. Bank of America's profits soared by 58% over last year to $7.7 billion, with this sum boosted by the release of $1.1 billion in credit reserves that had been previously set aside to protect against potential customer defaults. Wells Fargo's results saw a similar boost from reserve releases, as well as from increased investment banking revenue and consumer credit card-related sales. And Morgan Stanley posted estimates-topping revenue in both its fixed income and equities trading units, with the bank seeing a pick-up in business as market activity related elevated during the quarter.

As earnings season rolls on in the coming weeks, investor focus will be fixed on companies' commentary around prices increases, supply chain disruptions and labor challenges. All of these factors have been seen as contributing to an earnings slowdown compared to the second quarter. However, how long-lasting these challenges prove to be, and which companies will ultimately be hit the hardest by these factors, has been a central question for investors.

At the macro level, inflation has already lasted for months across various pockets of the economy. The Bureau of Labor Statistics' (BLS) September Consumer Price Index (CPI) rose 5.4% in September compared to last year, coming in at its fastest pace since 2008. A jump in prices for rent, groceries and energy saw especially notable increases. And the BLS's Producer Price Index (PPI) showed that selling prices for producers increased at an 8.6% annual rate in September, or the fastest rate on record in data spanning back to 2010.

Policymakers at the Federal Reserve have largely asserted that inflation during the recovery will prove transitory, and will wane as soon as supply bottlenecks ease. However, the string of above-target inflationary readings this year has called into question officials' views on short-lived price pressures, and contributed to concerns that the central bank may need to act more quickly and aggressively than so far telegraphed to bring inflationary pressures in line.

“What we are seeing is an economy that continues to run hot," Jeff Klingelhofer, Thornburg Investment Management's co-head of investments, told Yahoo Finance Live. "Consumers today still have elevated savings, and they’ll be drawing that down in the months to come. And so really we are absolutely seeing higher wages trickling into the economy ... The key to watch will be, as the economy continues to heal, as vaccinations continue to increase and businesses open, whether that trend continues.”

“We’ll be watching those wage numbers exceptionally carefully — they really are the key to trying to figure out where the Fed goes and whether this inflation is transitory in nature," he added. "But at this point we think it will moderate in the months and quarters to come.”

8:49 a.m. ET: Producer prices post fastest annual rise in data going back to 2010, though monthly increase comes in cooler than expected
Prices paid to producers in the U.S. economy decelerated in September compared to the previous month, but still held at a historically elevated level relative as inflationary pressures lingered.

The Bureau of Labor Statistics' Producer Price Index increased at a 0.5% monthly clip in September, slowing from August's 0.7% rise. Consensus economists were looking for a 0.6% monthly increase in September, according to Bloomberg data.

Excluding more volatile food and energy prices, the monthly deceleration was even more pronounced. The PPI excluding these categories ticked up by just 0.2% during the month, slowing from August's 0.6% increase.

Over last year, however, the PPI still grew at a historically rapid rate, though this reflected in large part a bounce off last year's pandemic-depressed levels of activity. The PPI increased 8.6% in September compared to the same month last year, accelerating compared to August's 8.3% annual rate and coming in at the fastest pace on record, in BLS data spanning back to 2010. Excluding food and energy prices, the PPI also ticked up in September, growing at a 6.8% rate versus August's 6.7% increase.

8:36 a.m. ET: New weekly jobless claims set pandemic-era low
Initial jobless claims broke below 300,000 last week for the first time since the pandemic swept across the U.S. in March of last year.

New weekly filings totaled 293,000 during the week ended Oct. 9, taking out the previous pandemic-era low of 312,000 from the beginning of September. This also came down markedly from the prior week's 329,000 new claims, which were upwardly revised by 3,000. Consensus economists expected the latest report to show 320,000 initial unemployment claims, according to Bloomberg data.

Continuing claims also set a fresh pandemic-era low of 2.593 million for the week ended Oct. 2. This compared to 2.727 million during the previous week and the 2.670 million consensus economists were expecting.

MY COMMENT

YES.....we are doing just fine.....with EXPECTED issues and problems. If we start screwing around trying to bring down inflation we will PROBABLY tank the economy. We need to just.......sit down and shut up.....and let the economy have its head for a while. We DO need to start TAPERING and in 2022 or 2023 get interest rates back to the normal range. NOTHING ELSE.

Bank and other EARNINGS.....are kicking ass. Much of the earnings gains are the release or credit reserves.......but.....those reserves and their impact on earnings is coming at the perfect time. It is too early to see any statistics......but.....earnings are HANDILY BEATING expectations.......and......have potential to set new records of the percentage of companies reporting BEATS.

 

For those that own these stocks or just want to read GOOD NEWS for once.....here you go.

Bank of America tops estimates on reserve release, strong advisory and asset management results

https://www.cnbc.com/2021/10/14/bank-of-america-bac-earnings-q3-2021-.html

Wells Fargo profit jumps nearly 60% in the quarter, revenue tops expectations

https://www.cnbc.com/2021/10/14/wells-fargo-wfc-earnings-q3-2021.html

Morgan Stanley beats estimates on record investment banking and asset management results

https://www.cnbc.com/2021/10/14/morgan-stanley-ms-earnings-q3-2021.html

MY COMMENT.....that should take some of the wind out of the sails of the........"NATTERING NABOBS OF NEGATIVISM" (a historical reference for those old enough....you can google it).

PLUS.....as an added BONUS the Ten Year Yield is back in the low 1.5% range.....of course......STILL.....at the low end of the range for the past......ONE HUNDRED YEARS.

The headline language above is very NICE to see......."RECORD"...."TOPS"...."STRONG"...."JUMPS".

BOOM.

 

This little article is so true.....and in line with my view that we need to avoid doing.......THINGS....out of short term panic......and MEDIA and POLITICAL fear mongering.

No Shortage of Souring Sentiment
The latest surveys show how far expectations have deteriorated.

https://www.fisherinvestments.com/en-us/marketminder/no-shortage-of-souring-sentiment

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

"Hear the one about supply chain bottlenecks knocking global growth, threatening the economic recovery from lockdowns? The IMF did—and ratcheted down its projection for developed-world growth this year from 5.6% to 5.2%. So did the people surveyed by Germany’s ZEW Institute, whose measure of German investor confidence slipped to its lowest level since COVID panic set in last year. And the US small business owners surveyed by the National Federation of Independent Business, whose sentiment measure fell again in September. And US CEOs surveyed by The Conference Board—their confidence level slipped almost -20% in Q3 on, you guessed it, supply issues. This all comes on the heels of The Conference Board’s broad US consumer confidence measure sinking to a seven-month low in August. Many pundits are treating these increasingly dour sentiment readings as portending to weak economic activity ahead in a self-fulfilling economic prophecy. We think that is a stretch. To us, these surveys and projections show the state of sentiment—and what markets have priced in—likely extending this bull market’s wall of worry in the process.

We do think it is fair to say everyone citing supply shortages as an economic headwind is on to something. While strong demand and overflowing order books are great, at the end of the day, output and spending are what show up in economic statistics. If businesses can’t get the supplies they need, they can’t make their widgets, and output drops. If they can’t get finished widgets to customers in a timely fashion, then sales likely drop. Both can weigh on industrial production, retail sales, GDP and other hard data.

Thing is, stocks don’t have a one-to-one relationship with any economic statistic. They don’t need growth to be fast or even particularly good. Just ok and not so bad are quite fine outcomes if expectations are low enough. This is because stocks move not on absolute reality, but the gap between reality and expectations. The lower expectations become, the easier it is for reality to beat them, even if reality is not so wonderful.

All these sentiment surveys, along with the IMF’s revised forecast, tell us the prevailing expectation globally is for supply chain problems to take a bite out of growth, slowing the recovery. In our view, it is quite fair to presume markets have priced in this viewpoint, as they deal efficiently with all widely known information. That includes opinions, fears and forecasts (which, frankly, are also opinions). What will drive stock prices over the foreseeable future, then, is how economic reality squares with expectations. If things go exactly as people fear, it likely won’t be a huge deal to stocks, as they will have already priced in that reality. If things go even a smidge better, that should generate a positive surprise.

Don’t discount the chances of that happening. Sentiment surveys aren’t predictive—they tell you how people feel today, which is generally a product of what they hear and read. People who hear endlessly that supply chain snarls are tying up the global economy will naturally tell surveyors they expect bottlenecks to be a big economic risk. Surveys both reflect and amplify headline sentiment, creating a negative feedback loop. Meanwhile, what gets less attention are the anecdotes about companies chartering their own ships, finding ways to transport goods across the sea without traditional containers, and cutting nonessential costs to preserve profits without raising prices. Incremental workarounds are often the seeds for incremental positive surprise.

Another key consideration that gets lost in most of the supply chain coverage: It doesn’t affect all industries equally. Software and digital services, for instance, are relatively insulated. So are growth stocks in general, which have much fatter gross profit margins than the market as a whole. Not only can they self-finance workarounds (as well as future growth), but they can also stomach cost pressures more easily than value companies operating on a shoestring. In our view, far from being a market-wide negative, supply chain issues are likely a big reason for growth stocks’ big outperformance since May.

If things go far worse than everyone anticipates, then it could prove problematic for stocks. We don’t dismiss that possibility, either. But markets move on probabilities, not possibilities, and shortages of components and raw materials have already prompted suppliers to ramp up, which suggests this issue should resolve sooner rather than later. That could change, but in our view, the most probable scenario is that supply shortages create winners and losers, not a bear market."

MY COMMENT

EXACTLY........TRUST IN THE FORCE LUKE.......in business and investing......trust in the companies that you invest in and their.....hopefully.....great management........to know how to deal with, weather, and actually profit and thrive in the current environment. Let the company and business take care of their business. If you did your job as an investor when you bought that company......that is all you have to do. Which translates into doing.......NOTHING......as usual.

 

We need a NICE two day RALLY to end the week and today may be the trigger that we need to set that in motion. BELIEVE and TRUST your investment skills.

 

No......no party.....other than a MARKET party. What a really nice day today.

EVERYTHING coming up GREEN. I still got beat.....barely.....by the SP500 by 0.03%. Who cares. It is always nice to get a day that the markets are pushing 1.7% gains.

Now....about tomorrow.......

 

Yes....I am already on to tomorrow. Today is over......it is all about what can you do for me....going forward.

As to this little article......DUH.

Financial Markets Are Not Expecting a U.S. Default

https://www.realclearmarkets.com/ar...ts_are_not_expecting_a_us_default_798702.html

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

"Is it possible for the United States, the issuer of the world’s reserve currency, to default? Financial markets don’t seem to think so. Default rhetoric is nothing new and the US has always managed to raise the debt ceiling in time (some 80 times since 1960) to avoid the worst-case scenario. Why should this year be any different?

Yet, with US federal debt within a hair of the $28.4 trillion debt ceiling (Chart 1), and the cash balance of US Treasury at the Federal Reserve rapidly dwindling (Chart 2), Janet Yellen warned last week that, unless Congress acted soon, the US would be on course to default on October 18.



Is the market right to think the latest default talk is just a lot of hot air? In my view, there are good reasons to think that even if the US were to avoid default, the new round of fiscal brinksmanship that begins in earnest this week may have a greater impact on the economy and on markets than generally expected. Indeed, I see it as looking more like 2011 than 2017.

Let me explain why.

Let’s begin by defining brinksmanship. In game theory, brinksmanship is called “the Game of Chicken.” The best-known example of this game appears in an unforgettable scene in the movie “Rebel without a Cause” where Jim (played by James Dean) and Buzz dare each other to race their cars to the edge of a cliff. Whoever jumped out of his car at the last minute would be, of course, the chicken (or loser).

Another, more typical, illustration of this Game of Chicken is that of two cars speeding towards each other head on. How will it end? With a terrific crash killing both drivers? Or will one of the players swerve at the last minute?

A key concept in game theory is the Nash equilibrium, named after John Nash, (a mathematician memorably played by Russell Crowe in the film “A Beautiful Mind”) which says that the most optimal outcome of any game is one in which each player makes the best decision for himself based on what he thinks the other side will do. It turns out that in the Nash equilibrium of the Game of Chicken, one of the players will swerve just before the crash. However, it is impossible to know at which stage of the game this will happen. Ironically, the more each player views the other player as being rational (in this case, not wishing to die), the longer the player will hold out (expecting the other player to swerve first). This is what makes the game of chicken so incredibly tense and scary.

So, what is fiscal brinksmanship? For the purpose of this article, I am referring to the negotiations between the Democratic Party and the Republican Party whereby the cost of not reaching an agreement is government default.

Below are the basic parameters of the Game of Chicken being played out in Washington right now:

The Democrats’ objective: To pass the $3.5 trillion social spending bill (that would represent the biggest expansion of the American welfare system in recent memory).

The Democrats’ leverage: (1) They have a majority in the House of Representatives; (2) Even though the Democrats control only half of the Senate seats, they have an effective majority given that the Constitution allows the Vice President to vote to break a tie; (3) The so-called “reconciliation process” allows the Senate Democrats to pass the reconciliation bill with just a simple majority.

The Republicans’ objective: To stop the passage of the $3.5 trillion social spending bill.

The Republicans’ leverage: Not much. The only leverage they have is the threat to withhold their votes for raising the debt ceiling.

Two weeks away from the US Treasury running out of cash, the Republicans are using this leverage.

This leaves the Democrats with two options:

Option 1: Dare the Republicans to follow through with their threat.

Option 2: Get around the Republicans by using reconciliation to raise the debt ceiling.

Which of these options will the Democrats exercise?

Option 1 has one little problem: Joe Biden. Biden’s approval rating has fallen so much over the past two months that he is now doing worse than 9 of the last 10 sitting presidents in the September of their first year in office (Chart 3). This means that if a showdown with the Republicans was to bring on a real crisis, voters are more likely to blame the President and the President’s party. This makes Option 1 a risky strategy for the Democrats.


Option 2 also has a little flaw: reconciliation can only be used once a year. This means that unless the Democrats are willing to give up on their $3.5 trillion social spending bill, they will have to include the debt ceiling in the reconciliation bill for social spending.

The latter seems to be the safest option for the Democrats except for the fact that it requires party unity over the $3.5trn social spending plan that simply is not there. Indeed, the progressive wing of the Democratic Party and the centrists are at war over the size of the social spending bill. While the progressives view $3.5trn as already a slimming down of the Democrats’ campaign promises, the centrists are concerned about the impact on debt sustainability and long-term economic growth.

There is so much bad blood between the progressives and the centrists that they have been engaging in a Game of Chicken of their own. The progressives will not vote for the $1.2trn bi-partisan infrastructure bill that the centrists support unless the centrists agree on the $3.5trn price tag for the social spending bill. As a result, the vote on the infrastructure bill has already been twice delayed.

The fact that there are two Games of Chicken being played at the same time is what makes the outcome of the forthcoming debt ceiling negotiation highly unpredictable. The only way to avoid going to the brink is if the progressives and the centrists in the Democratic party compromise. However, the gap between the $3.5trn demanded by the progressives and the $1.5trn that Joe Manchin says he can live with is so wide that I would not put my money on a deal before October 18.

The upcoming debt ceiling crisis will weigh on the economy and the stock market. It will also strengthen the call for the abolition of the debt ceiling in many quarters. In my opinion, the debt ceiling is a necessary evil for the United States. The status of the US as the issuer of the world’s reserve currency means that market discipline that keeps lesser countries fiscally in line does not apply. Both the Democrats and Republicans talk about fiscal responsibility when they are in opposition, but they seldom deliver when they come into power. Therefore, the institution of the debt ceiling, as inconvenient as it is, has an important role to play to keep fiscal insanity in check."

MY COMMENT

In spite of all the millions of gallons of ink on this topic......there is ZERO chance that there will be a default. this is one of those topics that you TOTALLY IGNORE as an investor.

 

For those that have the ability to manipulate their earnings.....here is a little article about achieving MAXIMUM Social Security.

How Much Income You Need To Get The Maximum Social Security Benefits

https://www.investors.com/etfs-and-...al-security-benefits-how-to-earn-the-maximum/

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

"The maximum monthly individual Social Security benefits are $3,895 right now. How much income do you need to qualify for that maximum?

The stakes are high. The average monthly benefits are just $1,558.

So there is a $28,044 yearly gap between the average and maximum Social Security benefits of $18,696 and $46,740. That's way more than chump change.

Social Security Benefits: Making Yours Grow
The $2,337 gap between average and maximum monthly Social Security benefits will mushroom into more than $908,000 if you invest it and earn a relatively modest 7% yearly rate of return for 16 years, according to calculator.net.

And 7% is fair. That's much less than the broad market's actual performance over the past 15 years. In that span, the S&P 500 has averaged annual returns of 10.3%, according to Morningstar Direct.

Why do we talk about investing your extra Social Security benefits for 16 years? That's about the average American's life expectancy once he or she reaches age 70. And age 70 is when you become eligible for your maximum starting Social Security benefits.

Of course, being able to invest the additional Social Security benefits depends on your not needing it for living expenses. That would be the case if you've invested wisely or have other sources of income, such as a traditional pension.

How To Get The Top Social Security Benefits
So whether you need it for current bills or you can afford to invest it, exactly how much income does it take to qualify for the maximum Social Security benefits?

Your benefits are based on your earnings over your work career. Specifically, it is based on your 35 highest earning years.

But your benefits do not climb without limit the higher your yearly pay was. There's a cap on how high your benefits can be. That's the monthly maximum payout of $3,895.

Basically, there are two ways to figure out if you qualify for the maximum.

The longer, more detailed solution is to calculate an estimate of how much your individual benefits will be. Many financial sites offer calculators for this purpose. AARP.org and Bankrate.com are two.

What Calculators Tell You
The Social Security Administration offers two such calculators. One is a quickie calculator. It uses yearly earnings information you input. It's good for generating what-if scenarios. Those can vary depending on earnings amounts you plug in and retirement dates that you use.

The SSA's second calculator uses your actual year-by-year earnings data.

The second overall method tells you only if you qualify for the current maximum monthly Social Security benefits. You've got to compare your yearly earnings to the yearly threshold amount, known as the wage base. More on that later in this report.

You've got to make that comparison yourself. The calculator does not make that comparison. And it won't show you a dollar-amount estimate of your benefits.

This second method relies on the fact that the SSA bases your benefit on your earnings in your 35 highest pay years.


To receive the maximum benefits, you must reach a certain earnings threshold in each of those 35 years, says Morgan Christen, chief executive officer of Spinnaker Investment Group.

The 2021 Yearly Threshold
That threshold is equal to the maximum dollar amount that's used to calculate your Social Security payroll tax. So, to get the maximum benefits, your earnings in each of those 35 years must be equal to or greater than what's known as your Social Security wage base. That's the maximum amount of your earnings that are subject to the Social Security tax (also called the taxable maximum).

The SSA posts those annual numbers here, at its web site. In 2021, for example, that number is $142,800. In 2011, it was $106,800. In 2001, it was $80,400. The taxable maximum will increase to $147,000 in 2022.

If you fell short of that number in any year, you don't qualify for the maximum monthly Social Security benefits, Christen says.

If both you and your spouse work and are joint filers, both of your numbers must beat the threshold for each of you to qualify for the monthly max.

Which Income Counts?
What income counts towards your wage base for purposes of setting your Social Security benefits? Like its other name (taxable minimum) suggests, only income that the SSA uses to calculate your Social Security payroll tax. "Rental income generally is not included," said Heather Schreiber, founder of HLS Retirement Consulting. "For owners of a small-business subchapter S corporation, only their W-2 income is included. Their pass-through income does not."

What Else Calculators Can Teach
If you don't qualify for the top monthly Social Security benefits? You can still calculate how much you do qualify for. You can use those online calculators.

Bear in mind that you'll have to input such factors as what year you plan to retire.

And one of the most influential variables has to do with how old you are or will be when you retire and start to collect Social Security benefits.

When To Start Your Social Security Benefits
You can start to collect Social Security benefits as early as age 62.

But, under today's rules, if you wait until what the Social Security Administration calls your full retirement age (FRA), your benefits will jump by up to 30%.

Full retirement age increases gradually if you were born from 1955 to 1960, until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67. You can find your full retirement age by birth year in the full retirement age chart.

But full retirement age is not the same as maximum retirement benefits age. That occurs once you reach age 70. Your monthly benefits grow between FRA and age 70.

For every year you delay claiming Social Security past your FRA up to age 70, you get an 8% increase in your benefit.


But your benefits won't grow any more once you hit the big 7-0."

MY COMMENT

MOST people do not think about Social Security benefits. For those that have the ability to LEGALLY manipulate their income that is subject to SS and Medicare taxes.......you might want to give some thought to what you would like your benefit to be in retirement and when you plan to retire. Basic stuff.....but something few people think about.....especially those below age 50.

 

BIG earnings tomorrow that report BEFORE the bell......Schwab and Goldman Sacs. Since there are before the open they have the potential to DRIVE the markets for the day. It is likely that Goldman Sacs will continue the BOOMING earnings of the big banks. Schwab....I have no idea....since I dont follow that stock. I would GUESS that considering all the investment activity and trading this year....they will kick ass.

 

This is....of course....good news for the markets.

TREASURIES-U.S. yields fall after initial claims, PPI data

https://finance.yahoo.com/news/treasuries-u-yields-fall-initial-144813842.html

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

"NEW YORK, Oct 14 (Reuters) - The benchmark U.S. 10-year Treasury yield fell on Thursday after data on the labor market and inflation eased worries that the Federal Reserve may need to take action earlier than expected to combat rising prices.

Weekly initial claims for state unemployment benefits dropped 36,000 to a seasonally adjusted 293,000 versus expectations of 316,000. Other data showed the producer price index for final demand increased 0.5% in September after advancing 0.7% in August and was just shy of the 0.6% estimate.

Shorter-term yields have risen over the past two days while longer dated yields have dipped, which has served to flatten the yield curve, indicating the market is anticipating a rate hike by the Fed.

The gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, touched a two-week low on Wednesday after data showed consumer prices increased solidly in September and were likely to keep moving higher.

"Today makes more sense, there was a fear that CPI was going to print way worse than consensus," said Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York. "The CPI data yesterday wasn't worthy of the move. It's a little bit of a relief rally."

The yield on 10-year Treasury notes was down 2.3 basis points to 1.526%. Still, the yield gap on two- and 10-year Treasury notes flattened for a third straight day and was at 117.1 basis points after falling to 116.4, its lowest level since Sept. 24. St. Louis Fed President James Bullard said the current high levels of inflation may not abate as soon as many Federal Reserve policymakers expect, and again urged the central bank to pursue a faster taper of its bond-buying program.

San Francisco Federal Reserve Bank President Mary Daly on Thursday said inflation and employment have made enough progress for the U.S. central bank to begin scaling back its monthly bond buying, but is far from ready for interest rate hikes.

The yield on the 30-year Treasury bond was down 0.7 basis points to 2.034%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 1.4 basis points at 0.354%. October 14 Thursday 10:32AM New York / 1432 GMT Price US T BONDS DEC1 159-30/32 0-9/32 10YR TNotes DEC1 131-112/256 0-56/256 Price Current Net Yield % Change (bps) Three-month bills 0.045 0.0456 -0.005 Six-month bills 0.0575 0.0583 0.000 Two-year note 99-204/256 0.3541 -0.014 Three-year note 99-248/256 0.6355 -0.026 Five-year note 99-30/256 1.0582 -0.029 Seven-year note 99-84/256 1.3515 -0.025 10-year note 97-124/256 1.5264 -0.023 30-year bond 99-64/256 2.0336 -0.007 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 13.75 0.75 spread U.S. 3-year dollar swap 14.25 0.75 spread U.S. 5-year dollar swap 7.50 0.25 spread U.S. 10-year dollar swap 1.00 0.00 spread U.S. 30-year dollar swap -24.50 -1.00 spread (Reporting by Chuck Mikolajczak; Editing by Will Dunham)"

MY COMMENT

WELL......DUH....again. We are all lined up for another BIG day tomorrow. There......I jinxed it. We are also all lined up for a BIG week next week. If we can get market participants to focus on REALITY and not the FEAR.......we have what we need with the anticipated GREAT EARNINGS for a nice little year end rally.

HOPE springs ETERNAL.

 

That is what counts TomB16. That is the PAYOFF.

 

I see a SLIGHT tipping of the economic data recently to the positive side of re-opening.

Retail sales unexpectedly gain in September as consumers keep spending

https://www.cnbc.com/2021/10/15/ret...-in-september-as-consumers-keep-spending.html

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

"Consumers spent at a much faster pace than expected in September, defying expectations for a pullback amid pervasive supply chain problems, the Census Bureau reported Friday.

Retail sales for the month increased 0.7%, against the Dow Jones estimate for a decline of 0.2%. Excluding auto-related sales, the number rose 0.8%, better than the 0.5% forecast.

Compared to a year ago, sales were up 13.9% on the headline number and 15.6% ex-autos.

The increase came during a month when the government ended the enhanced benefits it had been providing during the Covid-19 pandemic and against forecasts that growth would slow in the third quarter due to the delta spread and a perceived pullback in consumer activity.

But with coronavirus cases continuing to drop, spending accelerated.

“Students heading back to school and workers returning to the office are likely the catalysts for the increased retail sales,” said Natalie Kotylar, national leader of BDO’s retail and consumer products practice. “People who are back to working in a downtown office may be taking more shopping trips on their lunch break or after work. With school back in session and many teens vaccinated, parents may also be more comfortable allowing their teens to take shopping trips to the mall.”

Sporting goods, music and book stores led the way with a 3.7% increase. General merchandise increased 2% while miscellaneous retailers rose 1.8%. As gas prices pushed higher, spending at fuel stations jumped 1.8%, for a 38.2% surge over the past year.

Food and beverage spending increased 0.7%, though restaurants and bars saw a gain of just 0.3%, a sign that fears over the virus may have kept some people at home. Food and drinking establishment spending is up 29.5% over the past year.

Online sales rose 0.6% for the month, while auto sales increased 0.5% despite inventory problems brought on by a shortage in semiconductors.

However, doubts remained about whehter the sales strength can continue.

“Services spending may see some renewed strength over the next couple of months, as virus cases continue to drop back,” wrote Andrew Hunter, senior U.S. economist at Capital Economics. “But with goods shortages likely to persist, and the resulting surge in prices eating into real incomes, we expect consumption growth to remain subdued.”

The spending increases persisted against a backdrop of unexpectedly resilient inflation, which is running around 30-year highs. The consumer price index, which measures the cost of a variety of goods and services, rose another 0.4% in September and is up 5.4% from a year ago, though the gain was smaller when stripping out food and energy.

Inflation is being pushed higher by supply chain problems that have seen massive backups at ships along the California coast and prompted President Joe Biden to order the ports to stay open 24 hours.

Still, there are concerns that the supply problem will hamper the upcoming holiday shopping season, and consumers are being encouraged to shop now to avoid problems later."

MY COMMENT

NOW....that we are seeing the END to the various government programs for the pandemic we are starting to see the economy BEGIN to normalize. But.....we have a long way to go since we are just at the begining.

As usual the......experts....were wrong.....AGAIN.

We will see good and gradual improvement as long as we can simply let the economy do its thing.....with no interference.

It will help to NORMALIZE the employment data when the FREE MONEY for having children ends at the end of the year.....assuming it does end. I have......NO COMMENT.....on this as a social issue.....but as an economic issue it DISTORTS the normal employment economy.

 

As to what counts......EARNINGS.....compaies continue to BLOW AWAY the expectations....although we are early in the season.

Goldman Sachs crushes analysts’ estimates on strong investment banking and trading results

https://www.cnbc.com/2021/10/15/goldman-sachs-gs-earnings-q3-2021.html

Charles Schwab stock rises toward another record after profit, revenue rise above forecasts

https://www.marketwatch.com/story/c...forecasts-2021-10-15?siteid=yhoof2&yptr=yahoo

As to Goldman:

Here are the numbers:

• "Earnings: $14.93 a share vs. $10.18 consensus estimate, according to Refinitiv.
• Revenue: $13.61 billion vs. $11.68 billion consensus estimate.

Profit at the bank surged 63% to $5.28 billion, or $14.93 a share, as revenue climbed 26% to $13.61 billion. Shares of the New York-based bank rose 2% in premarket trading. "

As to Schwab:


"Shares of Charles Schwab Corp. SCHW, +2.41% climbed 1.1% toward another record in premarket trading Friday, after the discount broker reported third-quarter profit and revenue that rose above expectations, as continued bullish investor sentiment helped produce a five-fold increase in trading revenue. Net income rose to $1.53 billion, or 74 cents a share, from $698 million, or 48 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 84 cents beat the FactSet consensus of 81 cents. Revenue grew 86.7% to $4.57 billion, topping the FactSet consensus of $4.52 billion. Net interest revenue increased 51.2% to $2.03 billion, just shy of the FactSet consensus of $2.04 billion, while trading revenue soared 432.6% to $964 million to beat forecasts of $897.3 million. Total client assets as of Sept. 30 was $7.61 trillion, up from $6.69 trillion at the end of 2020. The stock, which closed at a record $78.11 on Thursday, has run up 47.3% year to date, while the S&P 500 SPX, +1.71% has gained 16.8%."

MY COMMENT

Although the earnings so far are heavily SKEWED toward banks and financial oriented companies.....they are BLOWING AWAY the estimates and expectations. Great news for ACTUAL investors......especially long term investors.

LETS close out the week in style and LETS MAKE SOME MONEY TODAY.

 

The banks and financials ARE giving us a CLUE of the future.

What big bank earnings tell us about America's economy

https://www.cnn.com/2021/10/15/investing/premarket-stocks-trading/index.html

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

"London (CNN Business)The biggest US banks move trillions of dollars around the world every day. That gives them a unique lens on how the economy is functioning, both in the United States and globally. And despite concerns about inflation, workers quitting, supply chain issues and slowing growth, bank executives just delivered a clear message to investors: We're in pretty good shape right now.

"While there's been some discussion around the slowdown, I would just note that US economy is now as large as it was ... pre-pandemic," Bank of America CEO Brian Moynihan told analysts Thursday.
Wall Street is cheering the latest earnings from America's top lenders, which have released billions of dollars they'd set aside earlier in the coronavirus crisis to cover potential bad loans. The Dow finished Thursday up 1.6%, while the S&P 500 rallied 1.7%. Bank of America's stock jumped 4.5%, while the KBW Bank Index, which tracks the sector, gained 1.3%.

So what exactly are banks seeing that makes them feel confident about the future?

Spending: Citi reported that credit card spending is up 20% compared to one year ago and is now "well above 2019 levels." Wells Fargo also found that weekly debit card spending was up every week last quarter compared to 2019 as customers shelled out on entertainment and restaurants again.

"We continue to see that our customers have significant liquidity and consumers are continuing to spend," Wells Fargo CEO Charles Scharf said.

There may be some changes in spending patterns as Covid-era government support dissipates, executives said. But they think the strength will persist.

Supply chains: Backlogged supply chains are worrying enough that the Biden administration has announced a "90-day sprint" to fix the problem. But banks don't see it as a game changer.

"I doubt we'll be talking about supply chain stuff in a year. I just think that we're focusing on it too much," JPMorgan Chase CEO Jamie Dimon said. "It's simply dampening a fairly good economy. It's not reversing a fairly good economy."

Deals: Banks aren't just feeling good because spending is ramping up on Main Street. They're also cashing in on Wall Street, which has seen a huge boom in dealmaking.

JPMorgan reported that its investment banking revenue shot up 45% as it raked in fees from advising companies on mergers and orchestrating stock sales. Morgan Stanley saw its investment banking revenue leap 67% compared to a year ago. Citi had its best quarter for mergers and acquisitions in a decade.

Does that mean everything is rosy? Certainly not. Citi CEO Jane Fraser said the company is watching three things "closely." There's inflation, including the impact of worker shortages and the energy crunch, as well as the slowdown in China and what happens with US debt ceiling negotiations.

But the big picture is that for now, lenders are making tons of money — and they expect the trend to continue."

MY COMMENT

I prefer to focus on the POSITIVE news at the moment. I believe STRONGLY that is reflects REALITY. AND.....as an investor....especially with a focus on the long term.....REALITY is the name of the game. DRAMA and sensationalism.....not so much.

 

WELL....we are open and all the averages are starting out nicely in the GREEN. Investors are feeling good. I even note some POSITIVITY on the morning business TV shows.

WHO WOULD HAVE THOUGHT.

 

Lets talk about taxes......quarterly tax payments.

Should You Be Making Quarterly Tax Payments?
If there's a chance you might owe more than $1,000 in taxes this year, quarterly payments may be required to avoid a penalty.

https://money.usnews.com/money/pers...5/should-you-be-making-quarterly-tax-payments

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

"Quarterly taxes are estimated payments made on a quarterly basis to the U.S. Internal Revenue Service for income that is not subject to withholding. As the U.S. workforce is increasingly engaged in freelancing, side gigs and self-employment, quarterly payments are a reality more taxpayers may soon be facing.

The group of Americans who are self employed has grown since 2020: More than 10 million people in the U.S. were self-employed in September 2021, according to the U.S. Bureau of Labor Statistics, up from about 9.5 million in September 2020.

These self-employed individuals are usually required to make quarterly payments, but some workers receiving salaried W-2 income may still need to make quarterly payments under certain circumstances. These payments can help taxpayers avoid an unwelcome surprise on April 15.

"The trend has been that most taxpayers who don't pay enough taxes throughout the year find themselves in a very tight situation at the end of the tax year when they file their tax return. They get into a situation where they cannot pay their back taxes owed," says Alex Oware, certified public accountant at O&G Tax and Accounting Services and tax expert at JustAnswer. "Instead, they can pay their taxes upfront by making quarterly payments."

When Are Quarterly Taxes Due in 2022

Quarterly tax payments are due on the following dates:

Payment Period Due Date

Jan. 1 to March 31 April 15

April 1 to May 31 June 15

June 1 to Aug. 31 Sept. 15

Sept. 1 to Dec. 31 Jan. 15 of the following year

Quarterly Taxes Aren't Just for the Self Employed

Individuals who are self employed – whether sole proprietors, partners, or S corporation shareholders – typically must make estimated tax payments if they anticipate owing $1,000 or more when their tax return is filed.

But quarterly taxes may also need to be paid in other situations where an individual's withholdings are not sufficient. Estimated payments may need to be sent to cover income from the following sources:

• Gambling winnings or other prizes.
• Dividends and interest.
• Divorce settlements and alimony.
• IRA distributions.
• Social Security (if your income is high enough to make benefits taxable).
• Self-employed or independent contractor 1099 income."

MY COMMENT

This is a simplified view of quarterly taxes. There is much info available on the internet. I assume that MOST tax preparation programs do advise users when they should be doing quarterly payments.

MYSELF......I am subject to quarterly taxes......BUT......I do not do the payments. I try to pay about half of what I anticipate owing......when I send in the payment due on January 15 of each year. The other payments.....I just SKIP. I have seen over the years that the PENALTY is MINIMAL compared to having and using my money for the year. I ROUTINELY make much more on my money by having it invested for the year versus the penalty due.

NOT that I am advising people to skip their quarterly payments....but that is what I do.....based on the probabilities and my experience over the past 40+ years.