The Long Term Investor

Dont let it bother you or read too much into it Bigmaix. I dont think it means anything. Just keep posting.....we need your input......and that of everyone else.

 

Of course....we have the usual economic data report today....just like nearly every day.....that no one will care about.

December jobs report: Payrolls rise by 199,000 as unemployment rate falls to 3.9%

https://finance.yahoo.com/news/dece...or-department-unemployment-usa-192453058.html

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

"The U.S. economy unexpectedly saw a slowdown in hiring in December compared to November, while the unemployment rate improved to a fresh pandemic-era low.

The Labor Department released its December jobs report Friday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

• Non-farm payrolls: +199,000 vs. +450,000 expected and a revised +249,000 in November
  
• Unemployment rate: 3.9% vs. 4.1% expected and 4.2%in November
  
• Average hourly earnings, month-over-month: 0.6% vs. 0.4% expected and a revised 0.4% in November
  
• Average hourly earnings, year-over-year: 4.7% vs. 4.2% expected and a revised 5.1%in November
  

The labor market posted a twelfth consecutive months of job growth in December, albeit with gains coming at a rate slower than many expected. Consensus economists expected that December payrolls increased by over 400,000, or more than double the tally from November, when a slowdown in service-sector hiring had weighed on overall employment growth.

"It's a solid report. Obviously it didn't hit what the experts had said ... but when you look at 2021 as a combined total, as the president has been sworn into office, passed the American Rescue Plan, 6.4 million jobs have been added, which is a record," U.S. Secretary of Labor Marty Walsh told Yahoo Finance Live on Friday.

"There's no question that we still have people out of work, we have people that have left the workforce. We're working on also inflation," he added. "So we do have some work to move forward."

By industry, some of the services-related sectors hardest-hit initially by the pandemic saw muted hiring at the end of December. Leisure and hospitality jobs rose by 53,000 in the last month of the year, rising compared to November's gain of 41,000, but coming in well below the 211,000 seen in October.

Other industries saw a deceleration in hiring in December. Transportation and warehousing jobs rose by just under 19,000 during the month after a rise of more than 42,000 in November, while professional and business services positions rose by 43,000 after a gain of 72,000 during the prior month. Education and health services employment gains totaled 10,000, slowing from 14,000 in the prior period. Meanwhile, retail trade employers shed jobs for a back-to-back month.

In the goods-producing sector, both construction and manufacturing employment growth also slowed compared to December. Manufacturing jobs gains alone came in at 26,000, missing consensus estimates for a rise of 35,000.

Even given the latest surge in virus cases, many economists suggested more pronounced Omicron-related impacts to the monthly labor market data are unlikely to appear until at least the January report. The Labor Department collects data for the monthly jobs reports during the week including the 12th of the month, which may have been too early to capture disturbances from the Omicron variant discovered in the U.S. in late November.

But despite the disappointment on headline payrolls, other metrics within the report were as strong or stronger than economists were anticipating. The unemployment rate improved more than expected to 3.9%, or the best level since February 2020's 50-year low of 3.5% before the pandemic. And the labor force participation rate was upwardly revised by a tick to 61.9% for November and held at this level in December. The size of the civilian labor force remained lower by more than 2 million compared to pre-pandemic levels, however.

"While the 199,000 gain in non-farm payrolls once again disappointed the consensus, a much larger gain in the household measure of employment and a tepid rise in participation pushed the unemployment rate back below 4%," Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note on Friday. "Together with another exceptionally strong monthly increase in wages, that raises the odds the [Federal Reserve] brings forward plans to raise interest rates and run down its balance sheet this year."

And indeed, heading into the December jobs report, other economic data have been upbeat in registering the labor market's momentum. During the survey week for the monthly jobs report, weekly jobless claims came in just above 200,000 — or at a level below the 2019 weekly average from before the pandemic. And ADP reported on Wednesday that private-sector employers added back 807,000 jobs in December, coming in at nearly double the consensus expectation and marking the biggest rise since May.

But even as jobs return, churn has increased in the labor market beneath the surface, adding pressure to employers looking to bring on and retain workers. A record 4.5 million Americans quit their jobs in November.

And as competition for workers increased, so too have wages. Average hourly wages accelerated more than expected to a 0.6% month-over-month clip in December. And on a year-over-year basis, average hourly wages were up 4.7% in December, or well above the 4.2% increase anticipated. These still-elevated wage increases have also added fuel to concerns about inflation during the recovery. "

MY COMMENT

Government actions over the past two years has TOTALLY screwed up the labor and employment markets and data. Obviously the unemployment rate we are seeing now is TOTALLY DISTORTED and not accurate. It is a function of people drooping out of work. There is no way we are in a time period of historic LOW unemployment. The POWER of FREE MONEY and government goodies.

People are NOT dumb. If they can get by with not working a good percentage are going to do so. Same with any animal......if you can eat at the deer feeder every day....there is no need to forage for food.

This NEGATIVE report might have some slight positive impact if it gives the FED some pause in their headlong rush to fight inflation.

 

HERE is the story line today.

Stock market news live updates: Stocks dip after mixed December jobs report

https://finance.yahoo.com/news/stock-market-news-live-updates-january-7-2022-231419964.html

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

"Stocks edged lower Friday morning as investors digested a key report on the U.S. labor market recovery at the end of a volatile week.

The S&P 500, Dow and Nasdaq declined, with technology stocks coming under renewed selling pressure. Treasury yields built on recent gains as investors' expectations for higher interest rates mounted. The benchmark 10-year yield rose to

Investors mulled the Labor Department's December jobs report released Friday morning, providing an update on the extent to which labor supply shortages were still impacting the economy at the end of last year. A disappointing 199,000 jobs came back during December, unexpectedly slowing compared to the previous month. Other metrics, however, were more upbeat, as the unemployment rate improved to a fresh pandemic-era low of 3.9%, and the labor force participation rate steadied after an upward revision in November. Still, many economists cautioned that a more recent hit to the labor market from the surge in Omicron cases may not yet have been. captured in the December report.

Heading into this print, U.S. stocks have come under pressure over the past couple sessions as investors reassessed the next likely moves by the Federal Reserve. With policymakers closely watching for signs that the economy has reached maximum employment, the jobs report could provide additional fodder for the Fed to double down on its more hawkish tilt, some pundits said.

"This is a green light for March," Neil Dutta, head of U.S. economics at Renaissance Macro Research, wrote in an email Friday morning, referring to the timing of an initial rate hike from the Fed. "The U3 unemployment rate plunged 0.3ppt [percentage points] to 3.9%, 0.4ppt below the Fed's Q4 2021 estimate and only 0.4ppt above the Fed's estimate for year end 2022. Average hourly earnings are coming in firm as the labor force participation rate remains flat."

The Fed's December meeting minutes released earlier this week suggested some officials were inclined to speed their asset-purchase tapering and move up the timing of an initial interest rate hike from current near-zero levels. And in a surprise development to many market participants, some officials also suggested they were contemplating the start of reducing the nearly $9 trillion in assets on the central bank's balance sheet. Such a move would quickly shift the markets away from the accommodative monetary policy backdrop that helped underpin risk assets during the pandemic.

“The way I view it is very simple: The Fed delivered a wonderful year for markets in 2021, at the cost of a much more complicated outlook in 2022," Mohamed El-Erian, president of Queens' College at Cambridge University and Allianz Chief Economic Adviser, told Yahoo Finance Live on Thursday. "And that complicated outlook is for policy, is for the economy, and therefore is a more uncertain outlook for markets."

“This is still a very robust economy,” he added. “If we avoid a policy mistake — big if. But if we avoid a policy mistake, this economy has all the ingredients to continue growing and grow in a more inclusive manner. But we do need help on labor force participation and productivity. We do need help on the supply side.”

And despite this week's volatility, some pundits struck an upbeat tone about future near-term catalysts for the market.

"Within the U.S., we're hopeful for fourth-quarter earnings. We think [they] should be fairly good," Rob Haworth, U.S. Bank Wealth Management senior investment strategist, told Yahoo Finance Live on Thursday. "That said, the market does have to adjust to what is a surprise in terms of how aggressive the Federal Reserve may be in managing the economy around inflation."

11:08 a.m. ET: Netflix shares track toward longest losing streak since Sept. 2020, while Microsoft, Alphabet heads toward worst week since March 2020

Mega-cap technology stocks came under additional pressure on Friday as investors increased their expectations for a near-term interest-rate hike by the Federal Reserve.

Netflix shares, which had been a darling of the stay-at-home trade, were on track to fall for a sixth straight day, marking its longest losing streak since September 2020. The stock has fallen by more than 20% from a record high of just over $700 in mid-November. And based on trading this week, the stock is on track for a weekly decline of just over 10% — its worst since September 2020.

Likewise, other heavily weighted technology stocks have also seen considerable selling pressure. Microsoft and Alphabet shares headed for weekly losses of more than 7.5% and 6%, respectively, or. their worst weekly returns since March 2020.

9:55 a.m. ET: S&P 500 Financials sector ETF jumps to record high as investors bet on rate hikes

The S&P 500 Financials sector exchange-traded fund (XLF) reached a record intraday high on Friday, marking its first since October as investors piled into bank stocks set to benefit from a rising interest-rate environment.

The financials sector also was the biggest gainer in the S&P 500 on Friday, extending a streak of outperformance for the cyclical areas of the market in the first few sessions of 2022. Energy, financials and industrials have been the leaders in the blue-chip index since the start of the new year. "

MY COMMENT

The FED are MASTERS of idiotic messaging and timing of their messaging. It seems like they totally STEP ON earnings season time after time. They have now made the focus March and rate increases and cast a shadow over the upcoming earnings which are likely to be very good. Way too many EGO MANIACS on the FED seeking constant media attention for their views.

There is ONLY one thing to do in the current environment....simply......IGNORE EVERYTHING. Nothing that is going on over the short term is going to have any sort of fundamental business impact....so.....IGNORE it all.

 

Right ON Emmett. I am a business person.......but I will not stoop to buying ANY Chinese company. It is a matter of principle and.....also....a matter of protection of my assets.

 

I really did not have to look.....but I did anyway. I was RED today as is the norm lately. I also got beat by the SP500 by 0.82%. The trials and tribulations of having a portfolio that is concentrated and about HALF BIG TECH. I had two stocks that were green today......Microsoft at +0.05%.......and.....my star lately, Honeywell at +2.34%.

TGIF.....glad to be done with the week and MOVING FORWARD.......CHARGE.

 

My first weekly report of the year for 2022. The ONE week of the year that ALL the year to date and weekly gain figures are the same.

DOW year to date (-0.29%)
DOW for the week (-0.29%)

SP500 year to date (-1.87%)
SP500 for the week (-1.87%)

NASDAQ 100 year to date (-4.46%)
NASDAQ 100 for the week (-4.46%)

NASDAQ year to date (-4.53%)
NASDAQ for the week (-4.53%)

RUSSELL year to date (-2.92%)
RUSSELL for the week (-2.92%)

A mini-bloodbath this week for all the averages but the DOW. Just one of those weeks when you sit it all out and do NOTHING. Nothing like starting out the year in a little HOLE......but......this can easily be made up in a week or two later. Will this turn into a correction? Perhaps.....we will see. Do I care? NO....not really.

 

Welcome to the MODERN world of business.

Shoplifting is surging across America with dangerous and costly consequences

https://www.cnn.com/2022/01/07/business/retail-theft-shoplifting-robbery/index.html

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

"New York (CNNBusiness) Retailers have always been vulnerable to shoplifting. But the emergence of coordinated and organized robberies at high-value stores, even during shopping hours, has the industry on edge.

In November, a group of 14 individuals barged into a Louis Vuitton store in Oakbrook, Illinois, while customers were inside and audaciously drove away with a $100,000 worth of merchandise. The entire incident was caught on the store's surveillance video.

That same month, a group of at least 18 people broke into a closed Nordstrom store at LA's famous high-end The Grove shopping mall using a sledgehammer and an electric bicycle. They made off with several thousand dollars in merchandise. And on Black Friday, one of the busiest shopping days of the year, as many as 30 people robbed a Best Buy in Minneapolis.

The crime typically involves groups of people targeting stores that carry higher-value items like electronics, designer handbags and designer clothing, who resell the merchandise in secondary marketplaces, such as eBay, OfferUp and Facebook Marketplace or even back into the legitimate supply chain.

"These are people who make a living stealing and reselling. This is not a one-time opportunistic or need-based robbery," said Cory Lowe, an expert on retail crime and research scientist at the Loss Prevention Research Council, an industry coalition that researches retail crime, its impact and solutions to address it.

Lowe said retailers are very worried about the escalation in these organized group-led "smash-and-grab" robberies in multiple cities around the country.

"The anatomy of these attacks show they are more aggressive, dangerous and happening more frequently," said Lowe. "When I talk to retail loss prevention veterans, the best comparison they come up with is what crime was like in New York in the 1970s. But even then, it was more street robberies and not like retail theft as brazen as this."

Costly crime

As stores boost security measures to keep employees and shoppers safe, retailers have to contend with another consequence of organized theft: Its high cost to stores.

"For every $330 worth of products stolen, a retailer has to sell an incremental $300,000 worth of goods to break even," said Burt Flickinger, managing director of retail consultancy Strategic Resource Group. "We've talked to retailers across America who say shoplifting is now 2% to 3% of their total sales. That's up from 0.7 to 1% pre-pandemic."

Power tools are so popular with professional shoplifters at Home Depot (HD) that the home improvement retailer last year launched a line of power tools that won't work until they're first scanned and activated at the checkout register, according to a report.

Home Depot said the added security measure is meant to deter the illegal resale of the power tools.
Some of most popular items targeted by professional gangs of shoplifters are designer clothing, laundry detergent, designer handbags, allergy medicine, razors, high-end liquor, pain relievers, baby formula, laptops, deodorant and high-end appliances, according to the National Retail Federation.

These are products that professional thieves can resell a lot of at one time and make a lot of money, said Lowe.

The surge in store-related theft is costly in other ways, too. Employee retention takes a hit when retail crimes spike.
"Think about retailers that are staffed predominantly by women, like cosmetics stores and high-end fashion," said Lowe. "Criminals target these stores because these are high-dollar items and they anticipate little pushback from the staff. But the fear makes it difficult to keep employees."

Best Buy's (BBY) CEO Corie Barry said in November that the retailer has seen a jump in theft at its stores by gangs of thieves. Some of these incidents have involved weapons such as a gun or crowbar, she said.

"This is traumatizing for our associates and is unacceptable," Barry said during a call with analysts in November. "We are doing everything we can to try to create [an] as safe as possible environment."

She said Best Buy was implementing a number of tactics to minimize theft and protect staff and customers. These include locking up more products and hiring security when appropriate.

Elsewhere, drugstore chains have closed stores in neighborhoods where there's persistent shoplifting. Walgreens, for example, has closed a handful of stores in San Francisco, citing rampant shoplifting.

Then there's the broader community impact. Shopping in stores generates sales tax, which in turn provides funding for essential public services such as public schools budgets, medical facilities and local police and fire departments.
"Recurring store thefts spread fear. They scare away shoppers who normally would spend time browsing in stores and maybe make a few purchases," said Flickinger.

Pandemic impact

Although organized shoplifting sprees were on the rise even before the pandemic, Lowe said that post-Covid lifestyle adjustments have made it easier for offenders to get away with the crime.

"Think about mask wearing. Pre-pandemic, would we have ever thought about everyone in a liquor store wearing a mask covering half of their face and allowing them to remain anonymous?" said Lowe.

A confluence of other factors also have contributed to the spike in dangerous retail robberies in the last two years. These include reduced in-store staffing that leads to less surveillance and the ease with which thieves benefit from a lack of regulation on reselling stolen items online, said Lowe.

So have rising thresholds for what constitutes a felony offense, he added. "What I do worry about is as a society if more people start to imitate these crimes," said Lowe.

But in a survey of 55 retailers, more than two-thirds said the pandemic increased the overall risk of fraud and crime for their companies, according to the National Retail Federation's 2021 National Retail Security Survey. The report showed that 57% of retailers surveyed indicated a rise in organized retail crime duringthe pandemic.

Some 50% of retailers surveyed reported an average dollar value loss of merchandise of at least $1,000 in 2020 compared to 29% in 2019. Overall, organized retail crime costs retailers an average of $700,000 per $1 billion in sales, according to the NRF."

MY COMMENT

The cost of doing business in the current business world. I WILL NOT get into a discussion of WHY this is happening. BUT.....this is a significant TAX on business and for a small business will be a KILLER........literally and figuratively.

 

HERE is what Zukodany and Emmett are talking about above.

Charlie Munger must really, really like China's Alibaba

https://www.cnn.com/2022/01/04/investing/charlie-munger-alibaba/index.html

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

"New York (CNN Business) Charlie Munger, the longtime pal of Berkshire Hathaway's Warren Buffett, is apparently a very big fan of Alibaba... even though the 98-year-old has recently praised the Communist government of China for cracking down on the Chinese e-commerce company and cloud giant.

Munger, who is a vice chairman at Berkshire Hathaway (BRKB), also runs his own publicly traded company, newspaper publisher and investment firm, Daily Journal (DJCO), which has nearly doubled its stake in Alibaba (BABA) for the second time in recent months.

According to a Tuesday filing with the Securities and Exchange Commission, Daily Journal owned 602,060 shares of Alibaba as of the end of 2021, a stake worth $71.5 million. That's almost double its holdings as of the prior quarter, when Daily Journal owned 302,060 Alibaba shares, valued at the time at $44.7 million.

Munger, who turned 98 on New Year's Day, has bet even more on Alibaba as its stock continues to fall due to concerns about a crackdown on big tech firms from Beijing as well as worries about slowing earnings growth at Alibaba.

Shares of Alibaba plunged 20% during the fourth quarter of last year after losing nearly half their value in 2020.

Munger's bet on Alibaba is particularly noteworthy because he has made numerous controversial comments in the past year praising China for how it has handled criticism from tech moguls such as Alibaba's Jack Ma.

Although Daily Journal bought more Alibaba shares in the fourth quarter, it did not change its positions in four other investments: financial giants Bank of America (BAC), US Bancorp (USB), and Wells Fargo (WFC) as well as South Korean steelmaker Posco (PKX).

Munger has also been in the headlines over the past year due to several stories focusing on the unusual architecture, most notably windowless dormitories, featured at schools where he has given significant donations to fund student housing. Munger has a net worth of $2.4 billion, according to Forbes."

MY COMMENT

Way to go Charlie.......put your money into supporting the WORLDS MOST BRUTAL COMMUNIST DICTATORSHIP. BUT....it is his money.....so throw it down the communist rat hole. I personally dont care if this is a SMART investment.....I am not saying it is.....there is NO way I would risk my money on a company that can disappear at the WHIM of the dictator of communist China.

It is not like he is alone the.......VAST MAJORITY.....of our BIG TECH companies are also supporting and bending a knee to China. As a share holder in many of these companies......I HATE it.....but these is nothing I can do as a little stockholder. I am not willing to give up the ability to invest in these ICONIC companies.

 

The "Economists".......no matter the computing power or number crunching.....they are RARELY right in their projections, predictions,........or......wild ass guesses.

Confused about America's job market? Don't worry: Economists are, too

https://www.cnn.com/2022/01/07/economy/job-market-review-2021/index.html

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

"New York (CNN Business) 2021 was a historically great year for jobs. So why didn't it feel that way?

The short answers: Economists were befuddled. You were paying closer-than-usual attention. And months after a series of bad headlines subsided, the job situation quietly improved.

Confused? Don't worry. Pretty much everyone is. We'll take you through it.

The big picture

The US labor market has had a whirlwind of a year in 2021. Seemingly every month of jobs gains missed economists' forecasts. And record numbers of available jobs and workers quitting made it even harder to track what was really going on. In some months, it even felt like the recovery wasn't in the right direction at all.

But looking at 2021 in the rear-view mirror, it turns out it was actually a record-breaking year. The US economy added jobs every single month, not bad for what felt like a sluggish year.

"Obviously the expectations were much higher, but when you look at 2021 as a whole, the President's economic plan is working," Labor Secretary Marty Walsh told CNN Friday.

America added 6.4 million jobs in 2021, the most since records began in 1939.

The unemployment rate dropped to 3.9% at year-end compared with 6.7% in December 2020, a new pandemic-era low.

And Americans came back to the workforce in droves: The labor force participation rate climbed to 61.9% in November and stayed flat in the final month of the year, also marking a new pandemic high. That's a number economists pay close attention to, because it indicates whether people are actively looking for work or so disillusioned that they stop looking altogether.

Women, who had dropped out of the workforce at alarming rates in 2020, partly due to child care challenges, also returned in 2021. The participation rate of women aged 20 and over rose back to 57.8%, also a pandemic-era high.
And businesses' frantic search for staff meant workers were getting sign-on bonuses and bigger paychecks, particularly at the lower end of the income spectrum.

Of forecasts and getting it wrong

Month to month, however, 2021 didn't feel so great. That's because economists consistently set high expectations for the jobs report, only to be let down by a much lower-than-expected number.

So last year was a bit of a letdown, if only because expectations were so high.

How could economists get it so wrong all the time in the process? The bottom line is that the pandemic made their jobs a lot harder.

Forecasting is tricky in normal times, but Covid threw a wrench into things: The nation went from a historic job loss to getting millions of people back to work. And as demand soared, businesses kept needing more staff than they could find, sparking the labor shortage that defined much of 2021.

"A lot of [economists'] models are still informed by labor demand and have a hard time capturing that there are jobs out there but there aren't enough workers," said Sarah House, economist at Wells Fargo, about the difficulty to forecast the monthly job gains.

Economists aren't bad at their jobs; they just have some unusual factors clouding their crystal balls.
For example, the employer survey that's part of the jobs report has repeatedly underestimated job growth last year, which is visible in the sometimes sizable revisions that were made a month later.

"Seasonal adjustment challenges and a relatively low survey response rate argue for another round of upward revisions in future reports," said economists at Goldman Sachs (GS) of the December report that came out Friday.

Amid the difficulty of the forecasting business, it also didn't help that the jobs report became a point of focus outside the economic community during the pandemic: We were paying closer-than-usual attention, so that exacerbated those bad feelings.

Not done yet

But here's the thing: Wall Street economists weren't the only ones who were confused. Government economists who extrapolate data for the monthly jobs report were thrown for a loop, too.

In just about every month of 2021, the previous month and the month before that were revised higher. For example, on Friday the Labor Department reported that November's jobs report was actually about 19% better than previously reported -- gaining an additional 102,000 jobs for that month.

December's worst-of-the-year report could get revised higher, too.

Still, it's not all great news. The recovery is still not complete — even though 2021 was a great year for jobs,
At year-end, the nation was still down 3.6 million jobs compared to February 2020. And that doesn't account for the jobs that would have been added over the past two years if it hadn't been for Covid.

The participation rate is still 1.5 percentage points below the pre-pandemic level. Similarly, participation for women is still 1.5 percentage points below the pre-Covid level, putting it on par with a rate last seen in 1991.

There's plenty of work left to be done in the new year. The highly infectious Omicron variant could make for rocky start to that."

MY COMMENT

YES......the economists SUCK at predicting anything. No matter how you try to spin it.......you could probably do about as well simply guessing. We would probably be way better off if there were NO economists and we simply published the actual data each month WITHOUT someone telling us their....."guess".....ahead of time on where the data might be.

I am not too sure this little article is REALLY about economic prdeicting......or.....whether its point is to tell us how great the jobs and labor and employment markets were in 2021. UNFORTUNATELY the REALITY comes in at the end of this little article where it is stated:

"Still, it's not all great news. The recovery is still not complete..........At year-end, the nation was still down 3.6 million jobs compared to February 2020. And that doesn't account for the jobs that would have been added over the past two years if it hadn't been for Covid.

The participation rate is still 1.5 percentage points below the pre-pandemic level. Similarly, participation for women is still 1.5 percentage points below the pre-Covid level, putting it on par with a rate last seen in 1991."

In addition employment is very depressed in some minority communities or groups compared to pre-pandemic. ALSO.....in addition.....employers, especially small business, can not find workers and workers are jumping around from job to job creating chaos for poor businesses.

I really dont care about why some bunch of economists are just about always wrong. What I care about is the FACT that no matter how you try to spin it......our employment system is very......SCREWED UP......at the moment.

 

This is a GREAT little article from a good source......INVESTOPEDIA.

Tips for Successful Retirement Investing

https://www.investopedia.com/articl...te-yahoo&utm_source=yahoo&utm_medium=referral

It was just released a day ago. It is a really well done.....basic...... retirement investing PRIMER. I am not going to post it because it is long. BUT....if you are a new investor, or starting to educate yourself, or new to the work world, or a student......take a look and adsorb the lessons that are here. When you look back at the money you have made over the longer term...you will be glad that you did.

I will say I believe this is the most important section of the rticle:

"2. Start Saving and Investing Early

No matter which types of accounts and investments you choose, one piece of advice stays the same: Start early. There are lots of reasons why it makes sense to start saving and investing early:

• You can take advantage of the power of compounding—reinvesting your earnings to create a snowball effect with your gains.
• You make saving and investing a lifelong habit, which improves your odds of a comfortable retirement.
• You have more time to recover from losses, so you can try higher-risk/higher-reward investments.
• Barring a major loss, you have more years to save, which means more money by the time you retire.
• You gain more experience and develop expertise in a wider variety of investment options.

Remember that compounding is most successful over longer periods of time. Assume you make a single $10,000 investment when you're 20 years old, and it grows at a conservative 5% each year until you retire at age 65. If you reinvest your gains (this is the compounding), your investment would be worth almost $90,000.

Now imagine you didn’t invest the $10,000 until you were 40. With only 25 years to compound, your investment would be worth only about $34,000. Wait until you’re 50 to start, and your investment would grow to less than $21,000.


Investopedia / Julie Bang

This is, of course, an oversimplified example that assumes a constant 5% rate without taking taxes or inflation into consideration.Still, it's easy to see that the longer you can put your money to work, the better the outcome. Starting early is one of the easiest ways to ensure a comfortable retirement."

 

Another week about to start tomorrow......we move on from here. Notice....I did not say where we move to....just that we move on. The BIG event next week......forth quarter earnings start with the typical weeks of banks reporting.....it is amazing how many banks there are that are public companies.

Consumer price index, bank earnings: What to know this week

https://finance.yahoo.com/news/cons...arnings-what-to-know-this-week-164559716.html

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

"Inflation data will be in focus this week, with investors set to receive the Bureau of Labor Statistics' (BLS) latest Consumer Price Index (CPI) as the Federal Reserve's next monetary policy moves remain in focus. Quarterly earnings season also ramps up as some of the big banks report results.

Market participants are bracing for another historically hot reading on inflation in the latest CPI data, due out on Wednesday. On a year-over-year basis, consumer prices likely surged by 7.1% in December, based on Bloomberg consensus data, accelerating even further from November's 6.8% year-over-year clip. This would mark the fastest rate since 1982, when CPI rose as much as 8.4% on a year-over-year basis.

And on a month-over-month basis, consumer prices likely rose by 0.4% in December, slowing from November's 0.8% rise but still marking an eighteenth consecutive month of increases.

"Recent months have seen consistent upside surprises as inflation has increasingly broadened out, and it's now the case that seven of the last nine CPI releases have seen the monthly headline increase come in above the consensus among economists on Bloomberg, which just demonstrates how this has taken a lot of people by surprise," Deutsche Bank economists Henry Allen and Jim Reid said in a note.

"Our U.S. economists are projecting that year-on-year inflation will move higher once again, with an increase to +7.0%," they added. "Interestingly though, they think we could be at a turning point with December marking the peak in the year-on-year readings, which they then project will fall back over 2022 and be at +3.0% by this December ahead."

Excluding more volatile food and energy prices, consumer prices likely rose at a 5.4% year-over-year rate in December, also speeding from November's 4.9% pace and coming in at the fastest since 1991.

While price increases have been broad-based in the recovering economy, some economists said rising vehicle prices will likely be one of the main drivers of inflation at year-end.

"The main story will be the increase in autos inflation, with used cars the primary driver," Bank of America economists led by Ethan Harris wrote in a note Friday. "Manheim data showed wholesale used car prices spiking 9.2% [month-over-month] in October, following a 5.3% increase in September. Given a roughly 2-month lag, this sends a signal of incredible strength for CPI used cars this month."

Used car and truck prices had risen 2.5% month-on-month in November, matching the prior month's rise, based on BLS data.

"Outside of autos, we expect further gains in household furnishings and supplies and apparel, reflecting tight supply chains and fewer discounts as the holiday shopping season draws to a close," Harris added.

The December CPI will also be carefully parsed by investors as they gauge the next moves by the Federal Reserve, as some officials eye a quicker shift away from accommodative policies to rein in inflation.

Last week, the Fed's December meeting minutes suggested some officials favored speeding the central bank's asset-purchase tapering and hastening the timing of an initial interest rate hike from current near-zero levels. And against a backdrop of a "stronger economic outlook [and] higher inflation," some officials also suggested they were contemplating the start of reducing the nearly $9 trillion in assets on the central bank's balance sheet. Hints that the Fed was considering tightening policy in the near-term sent equity markets into a tailspin last week.

"The market does have to adjust to what is a surprise in terms of how aggressive the Federal Reserve may be in managing the economy around inflation," Rob Haworth, U.S. Bank Wealth Management senior investment strategist, told Yahoo Finance Live last week.

Investors may also receive more commentary about how key members of the Federal Reserve expect to approach inflation with their monetary policy toolkit in two confirmation hearings before Congress this week. Federal Reserve Chair Jerome Powell's nomination hearing for a second term is set to take place before the Senate Banking Committee on Tuesday — or a day before the December CPI is released. However, Fed Governor Lael Brainard's nomination hearing to become vice chair of the Fed will take place on Thursday before the Senate Banking Committee, after the release of the latest inflation data.

Bank earnings
This week, investors will also see a pick-up in earnings reports, as some of the largest U.S. banks deliver their quarterly results at the end of the week. JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) are each slated to report Friday morning before the opening bell.

The results come following a strong run for bank stocks, with financials currently the second-best performing sector in the S&P 500 in 2022, after energy. The XLF, or exchange-traded fund tracking the financials sector, hit a record high on Friday and logged its best week since February 2021.

Expectations for higher interest rates this year have been one major factor lifting these shares, given that banks' core lending businesses benefit from rising rates. On Friday, the benchmark 10-year Treasury yield rose to approximately 1.8%, or its highest level since January 2020. And robust market activity over the past year likely also helped further lift banks' trading operations.

"As far as the financials go, we think they're going to be pretty good. This last year has seen a lot of trading activity," Scott Ladner, Horizon Investments chief investment officer, told Yahoo Finance Live on Friday. "And as we've seen, what's going on right now with respect to yield curve, the yield curve steepened this week."

As fourth-quarter earnings begin to ramp up, many analysts are expecting to see another solid reporting season. However, the estimates are also taking into account slowing momentum after soaring earnings growth rates from earlier last year, helped in large part by easy comparisons to 2020's pandemic-depressed levels.

S&P 500 earnings in aggregate are expected to grow 21.7% for the fourth-quarter of 2021, according to data from FactSet's John Butters as of Friday. If earnings come in as expected, this would mark a fourth consecutive quarter that earnings growth tops 20%. "

MY COMMENT

In line with my usual view....I dont really care about inflation. I would rather see the current inflation during this re-opening disruption that we are living through. Deflation would make this even more of a mess. I STILL view DEFLATION as the default economic condition around the world as we move forward.

The big banks on Friday will set the opening tone for earnings reporting season. The banks LOVE the current conditions and they should put up very nice earnings this coming week. I anticipate that earnings in general will be very good. BUT.....the FED drama and BS will overwhelm any earnings news. Of course......perfect timing.....they will be having the FED confirmation hearings on Friday which will overshadow the nice bank earnings that are anticipated. I am starting to HATE the FED......they need to just shut up and go away.

 

I will have $15,000 to invest in my primary account over the next month or so. It will ALL go into the Schwab SP500 Index fund. I have an order in to do the first "chunk" (investing term of art) tomorrow at the close. That first amount tomorrow will be $5000. Of course, now that I want a nice BIG DROP for my buy-in tomorrow.....the markets should be up nicely.

I will probably hold off on the other $10,000 till early February......not for market timing reasons........but......for cash flow reasons.

 

Here in my little neck of the woods......there are NOW.....drum roll please.......NINE, yes NINE houses actively for sale out of 4200 homes. They range from a high of about $2.6MILLION to a low of about $630,000. We are not seeing any sort of flood of homes coming onto the market yet for spring.....yes.....here in Central Texas we will start to see spring weather about the end of February......we were in the mid 60's today.

Of relevance to the housing market and potential buyers.....here is the latest mortgage situation.

U.S Mortgage Rates Hit the Highest Level Since May 2020

https://finance.yahoo.com/news/u-mortgage-rates-hit-highest-225703980.html

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

"Mortgage rates were on the rise once more in the first week of 2022.

In the week ending 6th January, 30-year fixed rates increased by 11 basis points to 3.22%. 30-year fixed rates had risen by 6 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 8th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 55 basis points.

30-year fixed rates were still down by 172 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar. Key stats included ISM Manufacturing PMI and finalized Markit survey private sector PMIs. On the labor market front, JOLT’s job openings and ADP nonfarm payrolls also drew interest.

The stats were skewed to the negative, with the private sector seeing slower growth in December. In spite of the fall in the PMIs, the numbers were not weak enough to raise any red flags.

JOLT’s job openings for November had also disappointed ahead of the ADP nonfarm employment change figures on Wednesday, which impressed.

In December, nonfarm payrolls jumped by 800,000 according to the ADP. Economists had forecast a more modest 400k rise.

While the stats drew plenty of interest, it was the FOMC meeting minutes that drive yields northwards. A more hawkish than anticipated set of minutes that pointed to a more aggressive removal of policy support drove mortgage rates northwards.

Freddie Mac Rates

The weekly average rates for new mortgages as of 6th January were quoted by Freddie Mac to be:

• 30-year fixed rates increased by 11 basis points to 3.22% in the week. This time last year, rates had stood at 2.67%. The average fee remained unchanged at 0.7 points.

• 15-year fixed rose by 10 basis points to 2.43% in the week. Rates were up by 26 basis points from 2.17% a year ago. The average fee fell from 0.7 points to 0.6 points.

• 5-year fixed rates remained unchanged at 2.41%. Rates were down by 30 basis points from 2.71% a year ago. The average fee remained unchanged at 0.5 points.

According to Freddie Mac,

• Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are up more than half a percent since January 2021.
  
  
• With higher inflation, promising economic growth, and a tight labor market, we expect that rates will continue to rise.
  
  
• The impact of higher rates on purchase demand remains modest so far given the current first-time homebuyer growth.

Mortgage Bankers’ Association Rates

For the week ending 31st December, the rates were:

• Average interest rates for 30-year fixed with conforming loan balances rose from 3.31% to 3.33%. Points increased from 0.38 to 0.48 (incl. origination fee) for 80% LTV loans.
  
  
• Average 30-year fixed mortgage rates backed by FHA increased from 3.39% to 3.40%. Points increased from 0.37 to 0.42 (incl. origination fee) for 80% LTV loans.
  
  
• Average 30-year rates for jumbo loan balances decreased from 3.35% to 3.31%. Points rose from 0.34 to 0.38 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, declined by 2.7% from 2-weeks earlier. The Index had slipped by 0.6% in the week ending 17th December.

The Refinance Index declined by 2% from 2-weeks ago and was 40% lower than the same week one year ago. The index had risen by 2% in the week ending 17th December.

In the week ending 31st December, the refinance share of mortgage activity rose from 63.9% to 65.4%. The share had increased from 63.3% to 65.2% in the week ending 17th December.

According to the MBA,

• Mortgage rates continued to creep higher over the past 2-weeks, as markets maintained an optimistic view of the economy.
• The 30-year fixed rate increased by 6 basis points to its highest level since April 2021.
• Higher rates at the end of 2021 caused refinance activity to decline. Refinance demand continues to dwindle as many borrowers refinanced in 2020 and in early 2021. At that time mortgage rates were around 40 basis points lower.
• The purchase market also finished the year on a slower note. The final week was the weakest since October 2021.
• While average loan sizes were lower, home price appreciation remains at very high levels.
• Despite supply and affordability challenges, 2021 was a record year for purchase originations. MBA expects 2022 to be even stronger with total purchase activity reaching $1.74tn."

MY COMMENT

I see absolutely no indicators here locally that the market is slowing. Demand for home is still strong and the supply is still low. I dont expect to see this change any time soon. With the HUGE numbers of people moving to this area we will probably be in a PERPETUAL booming property market. I just noticed today in the news that META (Facebook) just leased an ENTIRE high rise office tower in downtown Austin. Makes me wonder if they are making some moves in case they ever want to move their HQ here from California.

The article mentions the last mortgage rate PEAK as being in November of 2018......only a little more than THREE YEARS ago. At that time the 30 year rate was.........4.94%. That seems like a lifetime ago.....how quickly we forget that NORMAL mortgage rates are in the 4.5% to 7% range. Sooner or later we WILL get back to those rates.

I would have LOVED to have that 4.94% rate during my lifetime. I have not had a lone on a home since about 1986......but......prior to that time I know that I NEVER had a rate as low as 4.94%. For those that can afford to buy or refinance.....NOW.......is a GOLDEN ERA for low mortgage rates. I see the current low rates as a once in a 100 year event.