The markets today were not a good OMEN for the Amazon earnings that will come out over the next hour or so. Stock market news live updates: Stocks plunge into close after Facebook-led tech sell-off; Nasdaq sheds 4% https://finance.yahoo.com/news/stock-market-news-live-updates-february-3-2022-232941718.html (BOLD is my opinion OR what I consider important content) "Wall Street’s key benchmarks faltered on Thursday, capping back-to-back sessions of gains on the heels of a slew of strong tech earnings, as sentiment waned following dismal results from Facebook that sent shares of the company spiraling along with other tech peers. A recent winning streak in equities was eclipsed by disappointing fourth quarter results from the platform's parent company Meta (FB), which unveiled figures that missed estimates after the bell on Wednesday. The Q4 report sent shares tumbling more than 26% — and also hammered other technology stocks — marking the biggest single-day wipeout in market history. The Nasdaq Composite plunged 538.73 points into close to end 3.74% lower, while the S&P 500 was 2.44% in the red. The Dow Jones Industrial Average also closed down 518.17 points, or 1.45%, lower. Meanwhile, WTI crude oil topped $90 a barrel for the first time since 2014 amid continued global supply constraints and geopolitical tensions. Meta reported Q1 2022 revenue, a key figure for stock watchers, that came up short, with the company estimating between $27 billion to $29 billion in the current quarter, below analysts' expectations of $30.25 billion. The company’s ability to continue to navigate Apple’s (AAPL) recent privacy changes that allow iOS users to opt out of letting their apps track them across the web was also in focus for the near term. Facebook's fourth-quarter report comes amid a prolific week in earnings season. Amazon (AMZN) is set to unveil figures after market close on Thursday, marking the last of five corporate heavyweights that account for about one-quarter of the S&P 500’s total market capitalization to reveal 2021 year-end performance figures. Shares of Alphabet (GOOGL), which released its results on Tuesday, surged in Wednesday’s session after the tech giant topped quarterly sales and profit estimates and announced a 20-for-1 stock split. In a discussion with Yahoo Finance Live on why Facebook and other social media stocks have cratered, Cowen managing director Chris Pollard said: "If we take a step back and we think about why markets have been weak, it's been the hawkish policy pivot." Anxiety around central banking policies rattled markets in January. The S&P 500 posted a negative return of 5.26% for January 2022 – marking its worst month since the benchmark plunged 12.5% in March 2020 after COVID-19 upended the global economy. Meanwhile, the Nasdaq Composite (^IXIC) narrowly avoided its worst-performing January on record after a loss of 8.98% for the month. LPL Financial chief market strategist Ryan Detrick pointed out that poor January performance has historically been followed by weakness in February. Data collected by LPL going back to 1960 showed that after drops of 5% or more in the S&P 500, February performance has been lower six of the past seven times, with muted returns over the final 11 months of the year. To add to that, February has been one of the worst months of the year for the index since 1950, with only September being worse. “We are encouraged by the big reversal in stocks last week and we think stocks are in the process of forming a meaningful bottom,” Detrick said in a note. “But the truth is, this year is going to be much more volatile than last year and investors had better buckle up their seat belts if the first month is any indication.” Investors will continue to weigh Big Tech earnings against a fresh read on the Labor Department's monthly jobs report expected to show growth likely slowed further in January, reflecting a fuller impact from the Omicron variant. "It’s one of those things where we’re just going to have to get used to the short but shallow economic damage we saw because of the latest variant,” Art Hogan, B Riley-National chief market strategist, told Yahoo Finance Live. On Wednesday, the ADP reported that private-sector U.S. employers cut 301,000 jobs in January, marking the first decline since December 2020 as the Omicron variant put a dent in the labor market's recovery. Consensus economists expect 150,000 non-farm payrolls returned in January, a figure that would mark the slowest pace of hiring since December 2020 as the impact of the latest COVID waves catches up to economic data. “The takeaway for investors is probably a temporary blip on an otherwise strong recovery we're seeing in the employment markets,” SEI CIO Jim Smigiel told Yahoo Finance Live. “It’s not too surprising we're seeing a bit of weakness." Jared Bernstein, member of the White House Council of Economic Advisers, emphasized to Yahoo Finance Live that this month’s figures are likely to be “distorted” by a number of Americans who have tested positive for the virus in the latest surge on unpaid leave that are not tracked on the payroll count. 3:15 p.m. ET: Crude oil surges past $90 per barrel on supply concerns WTI crude oil (CL=F) topped $90 a barrel for the first time since 2014 amid continued global supply constraints and geopolitical tensions. Oil prices have trended upward on expectations that supply will tighten further even after the Organization of the Petroleum Exporting Countries (OPEC+) producers stuck to planned moderate output increases. OPEC+ agreed on maintaining monthly increases of 400,000 barrels per day (bpd) in output despite pressure from consumers to raise supplies more quickly. "With OPEC+ unwinding their production cuts, the group's spare capacity will fall to low levels in 2022. Hopefully by next year there are no mobility restrictions, meaning with the world still expanding oil demand will also rise next year," UBS commodity analyst Giovanni Staunovo said. 10:30 a.m. ET: US service sector slows in January: ISM Survey U.S. services industry activity dropped to an 11-month low in January as a jump in COVID-19 infections hit demand at high contact businesses and kept workers at home. The Institute for Supply Management said on Thursday its non-manufacturing activity index fell to 59.9 last month, the lowest print since February 2021. ISM reported a read of 62.3 in December. Consensus economist estimates compiled by Bloomberg projected a print of 59.5. Figures above 50 indicate growth in the services sector, which accounts for more than two-thirds of economic activity in the U.S. The slowdown in services industry activity marked the latest indication in economic data that Omicron-driven infection put a dent in the recovery's momentum. 9:55 a.m. ET: Spotify stock craters following 'eyebrow-raiser' Q4 results Spotify (SPOT) shares plunged as much as 15% in morning trading, marking the biggest drop since March 2020 after the company’s quarterly forecasts for users and gross margin fell short of analysts’ expectations. Several firms on Wall Street trimmed their price targets for the stock, traded down 15.37% to $162.41 per share as of 9:55 a.m. ET. Bloomberg data showed the average price target among analysts is $243. “The bull case called for 2022 to be the margin inflection year after hefty podcasts commitments in 2020, but that dream is fading," Wells Fargo wrote in a note. “SPOT will need to show the fruits of these investments to win back the Street." The bank also called the gross margin outlook the “eyebrow-raiser” of the report." MY COMMENT Looks like a lot of people bailed on Facebook stock. The drop today was epic.....26%. The article mentions......."marking the biggest single-day wipe-out in market history". I dont know if it is talking about FB or all the tech action and losses today. I am sure other stocks have fallen more in one day.....but....this is a MAJOR company. One of the FIVE BIG CAP tech darlings. We live in very dangerous.....short term....times.
Sorry to FB shareholders....I dont mean to rub it in on a bad day. BUT....this is the story of the week for the entire market and all investors.
HERE are the AMAZON earnings. Amazon reports 9% sales increase in fourth quarter and big profit gain on Rivian stake; shares jump https://www.cnbc.com/2022/02/03/amazon-amzn-q4-2021-earnings.html (BOLD is my opinion OR what I consider important content) "Key Points Amazon on Thursday reported a big beat on the top line in its fourth quarter results, driven by a gain on its stake in electric vehicle company Rivian. Amazon on Thursday said revenue climbed 9% in the fourth quarter and the company reported a gain of almost $12 billion from its investment in Rivian. The stock popped in extended trading. Earnings per share: $27.75 Revenue: $137.4 billion vs $137.6 billion expected, according to a Refinitiv survey of analysts AWS revenue: $17.8 billion vs $17.37 billion expected, according to StreetAccount It is not immediately clear if the reported earnings per share are comparable to analyst estimates. Amazon also said it will raise the price of its annual Prime membership to $139 from $119. The company last hiked the price of Prime in 2018, when it increased from $119 to $99." MY COMMENT This is breaking news.....so not much detail. BUT....what there is looks like a nice earnings beat for Amazon. We need that after the day we had today. The PRIME increase will generate a......TON.....of money.
Here is more on Amazon. Amazon stock soars 15% after earnings, will hike Prime membership fee https://finance.yahoo.com/news/amazon-earnings-162246834.html (BOLD is my opinion OR what I consider important content) "Amazon (AMZN) reported fourth quarter profit which smashed expectations in part because of its investment in EV maker Rivian (RIVN). The e-commerce giant also announced it will raise its Prime membership fee to $139 per year from $119 in the U.S. The stock is soaring in after-hours. These are the earnings and revenue results for Amazon's fourth quarter. Earnings per share, $27.75 versus $3.77 expected Amazon net sales, $137.4B versus 137.82B expected Revenue, $137.4B versus $137.82B expected AWS net sales, $17.78B versus $17.23B expected This is the third time since the launch of Amazon Prime that the e-commerce giant announces a fee hike for its yearly delivery service in the U.S. It raised fees in 2014 and 2018 by $20 each time. The announced price change will go into effect for new members on February 18th. Existing members will see the fees upon their renewal date after March 25. The company's net income nearly doubled last quarter compared to the same period the previous year, in large part because of its investment in Rivian (RIVN). Amazon reported $14.3 billion in net income for Q4, compared to $7.2 billion during the last three months of 2020. "Fourth quarter 2021 net income includes a pre-tax valuation gain of $11.8 billion included in non-operating income from our common stock investment in Rivian Automotive, Inc., which completed an initial public offering in November," said the company's earnings statement. Net sales increased 9% to $137.4 billion in the fourth quarter, compared with $125.6 billion in the same period last year. Amazon's Web Services unit brought in $17.78 billion in revenue for the quarter, compared to expectations of $17.23 billion. The company's 1st quarter revenue forecast is for $112 billion-$117 billion. The Street was expecting guidance of $120 billion. “As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic," "Andy Jassy, Amazon CEO said in the company's earnings release. 'Top FANG stock' A "tight labor market is expected to keep costs elevated for the next few quarters," wrote Jefferies analyst Brent Thill in a note to investors earlier this week. Amazon has been offering sign-on bonuses and lofty wages to attract workers during the pandemic. Last year the company spent billions on COVID health-related costs to ensure a safe working environment. BofA this week reaffirmed its Buy rating on the stock, saying it's still a top FANG pick for 2022. "We continue to favor Amazon as our top FANG stock in 2022 with the view that 1Q will be a low point for growth and y/y margins ... Trends get better from here. We think results will highlight that Amazon is taking share in the eCommerce sector and is benefitting from Cloud industry strength, and we think enterprise exposure (corporate CAPEX cycle) is a positive AMZN differentiator in 2022," wrote analysts from BofA Global Research. The company's AWS unit grew 39% year-over-year in the third quarter of 2021. The Street is looking for another robust growth figure for AWS for the fourth quarter. Tight labor market The Street will also focus on labor costs, supply chain issues and costs related to investments in Amazon's fulfillment centers. Consumers leaned heavily into buying online during the pandemic, driving up costs for labor and delivery. The stock under-performed the S&P 500 in 2021. Year-to-date the stock was down around 18% prior to its fourth quarter results as high growth names have taken a beating over the prospects of higher inflation and rising interest rates. The Street though has been bullish on Amazon. All 59 analysts tracked by Bloomberg have a Buy rating on Amazon, with an average price target of $4,100 per share. The stock is currently trading at around $2,785. Big tech names have been in the spotlight this week after a blowout quarters from Alphabet (GOOG, GOOGL), Apple (AAPL) and Microsoft (MSFT). Communications Services stocks took a beating on Thursday following Meta (FB)'s disappointing quarter." MY COMMENT Those are some big earnings especially earnings per share, AWS, and net income versus a year ago. As usual.....no stock split. I have no plans to sell Amazon. I will keep watching their performance and stock price to see if it stays flat. That $20 increase in the Prime fee will bring in a boatload of money. Amazon has over 200MILLION Prime members. Multiply that by the increase of $20......and you have another $4BILLION dollars.......basically free money.
You never know when, how, or why you are going to make money in a portfolio. Today for me it is all about Amazon. I have a good gain so far and most of it is based on the Amazon earnings report. I have more holdings down than up today. Apple, Nike, Costco,Home Depot, Honeywell and Google......are all down so far. BUT....that can not cancel out the Amazon gains. That is what is nice about a good PORTFOLIO MODEL........somehow it often finds a way to win in spite of everything.
Of course the big economic news of the day is jobs.....not that it really matters. January jobs report: Payrolls jump by 467,000 as unemployment rate rises to 4.0% https://finance.yahoo.com/news/janu...ent-unemployment-usa-192453058-185048590.html (BOLD is my opinion OR what I consider important content) "U.S. employers added back far more jobs than expected in January even as Omicron cases surged at the beginning of the new year. The Labor Department released its January 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: +467,000 vs. +125,000 expected and a revised +510,000 in December Unemployment rate: 4.0%vs. 3.9% expected, 3.9% in December Average hourly earnings, month-over-month: 0.7% vs.0.5% expected and a revised 0.5% in December Average hourly earnings, year-over-year: 5.7% vs. 5.2% expected, 4.7% in December The January jobs report marks the first to reflect a fuller impact from the Omicron variant. The highly contagious variant first discovered in the U.S. in late November had only just begun to spread by the time of the December jobs report survey period. Around the time of the January survey period in the middle of the month, new daily COVID-19 cases in the U.S. had soared to a record. Still, job growth held up much more robustly than expected at the start of the year. Plus, payrolls gains for December were sharply upwardly revised, further pointing to momentum in the labor market heading into the new year. Non-farm payrolls grew by 510,000 in December, the Labor Department said in its revision on Friday, or well above the 199,000 previously reported last month. And the renewed jump in COVID-19 cases was expected to weigh especially heavily on the high-contact services sector, which has remained exceptionally vulnerable to rising infections levels. Yet job growth in leisure and hospitality industries remained positive for January, with payrolls rising by 151,000 compared to the 163,000 brought back in December. Retail trade payrolls accelerated to see a rise of more than 60,000 jobs in January from the 40,100 in December. Heading into Friday's report, estimates for the headline January print on non-farm payrolls ran the gamut as top Wall Street economists attempted to predict the latest virus-related speed bump to the labor market's recovery. But the ultimate outcome from the January jobs report exceeded even the highest estimate. At the high end, several economists polled by Bloomberg expected 250,000 jobs to return in January. However, a number of pundits also saw job growth turning negative for the first time since December 2020, with at least one economist forecasting a drop of 400,000 payrolls for January. But many also pointed out that the latest jobs report would serve as an imperfect indicator of the underlying strength in the labor market due to Omicron-related disruptions. The Labor Department counts individuals paid during the survey period, or the week including the 12th of the month, as employed for the headline payrolls figure. Those on unpaid leave due to illness or otherwise, however, are excluded from the headline payrolls count. "The 467,000 gain in non-farm payrolls in January is even stronger than it looks, as it came despite the spike in absenteeism driven by the Omicron virus wave and was accompanied by significant upward revisions to the gains over the preceding couple of months," Andrew Hunter, senior U.S. economist for Capital Economics, said in a note on Friday. "The headline gain appears to make a mockery of our fears that Omicron would weigh heavily on the payrolls figures, with leisure and hospitality employment rising by a solid 151,000. Despite millions of workers having to self-isolate, there were also strong gains in professional and business services, retail and transportation and warehousing." Other metrics in the latest jobs report also held up as strongly or more strongly than expected. Though the unemployment rate edged up to 4.0%, it remained only slightly above the pandemic-era low of 3.9% from December, which had been the lowest since February 2020. And the labor force participation rate unexpectedly improved to 62.2%, or the greatest level since March 2020, in a sign that more individuals were returning to the workforce from the sidelines. Average hourly wages jumped more than expected in January. On a year-over-year basis, average hourly earnings rose by 5.7%, or a full percentage point faster than December's gain. This marked the biggest jump since May 2020. On a month-over-month basis, average hourly earnings rose 0.7%, coming in above the 0.5% rise anticipated for the month. Federal Reserve For investors, the latest jobs report also serves as another datapoint suggesting whether the economy has maintained enough momentum to warrant less support from monetary policymakers. With inflation running at the fastest rate in four decades and the unemployment rate hovering near pre-pandemic levels, the latest jobs report is unlikely to knock the Federal Reserve from its current, more hawkish direction. "The labor market has made remarkable progress and by many measures is very strong," Federal Reserve Chair Jerome Powell said during a press conference on Jan. 26. Though he acknowledged the current wave of the virus may weigh on labor force participation in the near-term, he added that, "Over time there are good reasons to expect some further improvements in participation and employment." Fed officials have so far signaled that they are likely to begin raising interest rates at the close of their March policy-setting meeting, with a number of additional rate hikes to come over the balance of the year. They have also signaled they would eventually begin quantitative tightening, rolling off the nearly $9 trillion in assets currently on the central bank's balance sheet. "The case for near-term tightening has just been further reinforced and, inevitably, there will be speculation around a potential 50bps move in March," Seema Shah, chief strategist of Principal Global Investors, wrote in a note. "Yet, investors should really find comfort in the report. The economy is still hot and is strong enough to digest the policy tightening this year."" MY COMMENT A good report.....yet.....the labor and employment data continues to jump around from good to bad.....back and forth. I actually think the numbers and employment situation is so distorted that it is impossible to really know what is going on at the moment. With this report.........not that there was any doubt anyway.....the March interest rate increase is sure to happen. I doubt that there is any investor in the world that does not know this.
The other......BIG....economic story that you dont hear a word about is the US National Debt passing $30TRILLION for the first time. On US Debt’s New, Big, Round Number Total public debt outstanding isn’t a useful figure for analyzing the Treasury’s health. https://www.fisherinvestments.com/en-us/marketminder/on-us-debts-new-big-round-number (BOLD is my opinion OR what I consider important content) "$30 trillion. That is the big round number US national debt passed for the first time Tuesday, sparking a flurry of headlines—most of them fearful. And political, as is usual wherever federal borrowing and spending are involved—at any time, one party will campaign on fiscal probity while the other talks up “stimulus,” and those roles reverse often. We are going to stay above that fray, as markets don’t care about political personalities. Nor do they prefer any politician or party. But we do think there is a big elephant in the room to address: That headline, $30 trillion figure just isn’t useful for analysis of basically any kind. Understanding why can help investors see through hype and take a more measured view. The $30 trillion number is what the Treasury calls “gross debt”—total debt outstanding. This includes all the Treasury bonds owned by investors here and abroad, as well as debt owned by the Federal Reserve through its quantitative easing program and normal open market operations. Yet it also includes debt owned by intragovernmental agencies, primarily in trust funds like Social Security. In our view, the most accurate way to measure debt is to exclude these governmental holdings and focus on debt held by the public—investors and the Fed. That figure, also known as net public debt, is just over $23.5 trillion. If you look up US debt at the Treasury’s Debt to the Penny website, you will see this is their lead debt statistic. Now, on the surface, it might seem a bit suspicious to exclude nearly $6.5 trillion in intragovernmental holdings.[ii] We assure you, our preference to focus on net public debt is not simply because we want to make debt look better—rather, we think it is more accurate. One way to see this is by lumping all these government agencies together, along with the Treasury, as “the government.” This $6.5 trillion, which the Treasury borrowed, shows up on the “liabilities” side of the government’s balance sheet. But for the agencies owning this debt, it is an asset—and also shows up on the government’s balance sheet as such. $6.5 trillion in assets cancels out $6.5 trillion in liabilities. Or, if you don’t like balance sheets, you can simplify it as “money the government owes itself effectively cancels.” The Treasury bonds held in intragovernmental trust funds are also a different breed from your typical interest-paying IOU from Uncle Sam. The Treasury creates the bonds owned by the Social Security trust funds specifically for them to fill a need. By law, the Social Security trusts are required to invest all funds above and beyond what is needed to pay benefits in a given year in securities issued and guaranteed by the government. It is a statutory mandate to set the fund’s market risk at zero (they are focused on default risk here). When bonds owned by the trust mature, the Treasury replaces them with new ones. They are non-marketable—the Social Security trusts can’t just sell them on the open market. They can only ask the Treasury to redeem them if they need cash, which retires the security. Including these securities in a broad tally of funds owed to creditors would therefore be a bit weird. This same logic explains why we think it is correct to include debt owned by the Federal Reserve in the net public debt tally. Doing so might seem contradictory, as the Fed sends most of the interest earned on its bond portfolio back to the Treasury—sort of falling under the “money the government owes itself” umbrella. But also, not quite. One, the Fed isn’t officially a government body. Two, unlike bonds held in the Social Security trusts, the bonds on the Fed’s balance sheet are marketable. The Fed bought them from banks and, if policymakers chose, can sell them to investors on the open market. Once the bonds mature, the Treasury has to replace them with new marketable securities and sell those to investors. They are walking, talking, outstanding liabilities. Now, $23.5 trillion is still a big number—a bit bigger than 2021 GDP. We don’t think it would be beneficial for the government to pile on to this exponentially and endlessly. But when considering debt as an economic and market risk, we think it is best to approach the issue like markets do: What is the likelihood that debt becomes problematic in the next 3 – 30 months? In general, “problematic” means being unable to service debt, either because interest payments break the bank or because the Treasury can’t find buyers for new debt to replace maturing securities. That is the predicament Greece was in a decade ago. But the US isn’t anywhere close to that. In fiscal 2021, bond interest payments represented just 8.7% of federal receipts—less than half of 1991’s high water mark, 18.4%.[iii] It is also down from 2019 and 2020, thanks to low interest payments and rising revenues (a byproduct of economic growth). If interest costs are trending down—and if much higher costs 30 years ago didn’t cause a debt crisis—we rather doubt a debt doom spiral is in the offing now, shocking $30 trillion headline figures or no." MY COMMENT Nothing I or anyone else can do about this issue other than......just live with it. Politicians and government are going to do whatever they want.....public be damned.
Here is another take of the National Debt issue. Everything Is About Obscuring the True State of the Economy https://www.realclearmarkets.com/ar...ing_the_true_state_of_the_economy_815229.html I will leave it to....YOU....to open and read this article on the debt. I doubt that many are really interested in ths national issue anyway.
It continues to be a VERY mixed market today. Stock market news live updates: Stocks mixed after jobs report shows surprise jump in payroll. https://finance.yahoo.com/news/stock-market-news-live-updates-february-4-2022-231355196.html (BOLD is my opinion OR what I consider important content) "Stocks were mixed Friday morning as investors viewed a much stronger-than-expected jobs report as bolstering the case for the Federal Reserve to continue down its more hawkish monetary policy path. The S&P 500 dipped to extend Thursday's losses. The Dow also declined, while the Nasdaq rose. A day earlier, the Nasdaq Composite index sank by 3.7% for its worst single-day decline since September 2020. Oil prices also remained in focus as U.S. West Texas intermediate crude oil prices jumped further above $90 per barrel after crossing that threshold for the first time since 2014 on Thursday. New labor market data was the major focal point for investors on Friday, showing employment growth held up much more robustly than expected despite the surge in Omicron cases at the beginning of the year. Payrolls grew by 467,000, or well above the 125,000 expected to return, and job gains for December were upwardly revised to more than half a million. The labor force participation rate also improved markedly, and average hourly earnings jumped by a greater-than-expected 5.7%, or the most since May 2020. The latest jobs report came as a surprise following a string of other softening data points on the state of the labor market, with ADP's private payrolls report showing earlier this week the first contraction in private-sector employment in more than a year. But Friday's report offered potential fodder for the hawks in the Federal Reserve to press ahead with their plans to raise interest rates and begin tightening in the near-term, as the economic recovery continues to progress. "For markets, the jobs report is all about the Fed, and today’s upside surprises in both job creation and wage growth keep the Fed on track to begin raising rates in March and hike four or more times this year," Barry Gilbert, asset allocation strategist at LPL Financial, wrote in an email Friday. Meanwhile, a batch of upbeat quarterly results from Amazon (AMZN), Snap (SNAP) and Pinterest (PINS) helped dispel some of the gloom hanging over technology shares from during the regular trading day, after Meta Platforms (FB) offered an outlook that fell well short of Wall Street's expectations. Investors responded favorably to Amazon's announced price hike on its premium Amazon Prime subscription and better-than-expected growth in its lucrative cloud computing business unit. And Snap and Pinterest each topped Wall Street estimates for quarterly sales and earnings, suggesting Meta Platforms may have been alone among the ad-driven internet companies in bearing the brunt of headwinds from competition and Apple iOS software changes. 12:02 p.m. ET: Bitcoin jumps by nearly 10% to top $40,000 Bitcoin prices (BTC-USD) jumped by nearly 10% Friday afternoon to cross the $40,000 level, with the largest cryptocurrency by market cap posting its biggest single-day rise in months as digital currency prices tracked gains across major tech stocks. Prices of Ether, LiteCoin, and XRP also moved notably higher during intraday trading as well. Stocks related to cryptocurrencies also gained, including Coinbase (COIN) with a rise of 5%, and MicroStrategy (MSTR) with a jump of more than 11%. 10:12 a.m. ET: Snap shares surge more than 50% after users, earnings top estimates, shaking off growth concerns Snap shares (SNAP) soared by more than 50% intraday on Friday after the company topped expectations across virtually all major metrics in its latest quarterly results. Revenue jumped 42% over last year to reach $1.3 billion, with daily active users growing by 20% to reach 319 million. Adjusted earnings per share of 22 cents were double the 11-cent consensus estimate. The bottom-line results also helped Snap post its first annual profit for the full-year 2021. Despite the surge in the stock price, however, Snap shares remained lower by more than 20% for the year-to-date through intraday trading on Friday. 9:40 a.m. ET: Amazon shares jump by most since 2017 after earnings, Prime price increase Amazon (AMZN) shares rose by 12% just after market open, which would mark the biggest single-day rise in the stock since 2017 after the e-commerce giant posted stronger-than-expected earnings results and announced a price increase on its Prime membership subscription. Fourth-quarter sales grew 9.4% over last year to a record $137.4 billion. Though online store net sales were down slightly on a year-over-year basis, high-margin Amazon Web Services cloud sales grew 40% to reach $17.8 billion. Amazon also said its Prime annual membership was going up in price by $20 to $139 each year, offering a future boost to top-line results. The company sees current-quarter net sales coming in between $112 billion and $117 billion, with operating income of as much as $6.0 billion." MY COMMENT This is one of those days when I have NO CLUE how we are going to end the day. At the moment both the SP500 and the NASDAQ are positive......but....where the day goes from here....who knows. We are now past the guts of the BIG CAP tech earnings and every company reported very nicely except for Meta. Meta is a very specific business model and very specific situation. I dont believe they are any sort of harbinger for the tech world in general. There is a reason that I personally own all the other BIG CAP monster tech stocks and NOT Meta. I see them as the least......robust.....company of the bunch with the most......suspect.....long term business model. I also see them as the most suspect management.....by far. I HATE the dual class stock structure at Meta that gives a tiny percentage of the owners.....especially Zuckerberg....total control of the company. I have NO trust or confidence in Zuckerberg as a visionary or competent corporate leader......especially since he basically CONTROLS the company with his shares and voting rights.
I agree on many of the things that you spoke of in regards to matabook. I’ve said this many times before, I HATE fb, likely as much as I do appl, Amazon and all the other elite oligarchs that, at this point, control our speech, information and privacies. There is no… DEGREE of criminality here… they are all equally GUILTY of holding power over us. And as I’ve said before many times, if they all shut down and close tomorrow I will be happy to see them go. Unfortunately, if anyone here thinks that any of those companies will be out of business tomorrow, I’d love to hear your intel on the subject. I was equally shocked at fb drop in price as I was with what got them to be in their position of control to begin with. Zuckerberg has been dealing with “issues” on his platform ever since the network’s inception - he’s very much in the scam levels of Jobs & Gates… he managed to take a lead over, back then, two major social media giants; AOL (which was dying out anyways), and MySpace, which was for all those who remember, a leading social platform. Facebook just came out of NOWHERE and absolutely destroyed both and became the giant that it is today. Since then, there were MANY that tried to steal the fb grip on social network, snap, twitter, IG (bought), WhatsApp (bought), and now.. TikTok… all are one trick ponies that for the most part had posed no real threat to fb. The only thing that makes me “nervous” as a shareholder in the company is basically the shift to create Meta. If this was done by anyone else but Zuckerberg I would think that this is some sort of a tulip mania syndrome, but based on all the nonesense that I’ve seen take place in the past two years; Covid fears, meme stocks, crypto and NFTs thrown into the mix, I wouldn’t be surprised if this actually becomes a thing. Millennials and even some gen-xers have some sort of a fascination with non existent materials, I still question them he sanity behind this, but at this point it’s unavoidable. So there, my two cents (a lil more than that thanks to inflation) on the matter. Added more to my meta this morning… 10k worth to be exact… nothing to brag about at this current turmoil we’re experiencing in the markets. But… if you can’t beat them…. Yadda yadda…
And last… My overall sense of the market is… HORRIBLE… there’s a lot of cash being thrown around STILL and lack of responsibility and leadership from the top. Recipe for disaster for sure… The “dips” that was saw 3-4 times over this past month are not coincidental. I LACK the experience as an investor to compare them with volatile trends of the distant past, but they reflect more or less accurately on things that we see on our day to day lives. Which companies will collapse if this dreaded recession DOES hit? My focus of investment relies solely on that question
I am sure you will make money on your FB buy today Zukodany. Their earnings were not good....but the reaction was over the top.
Today I gained back about half of what I lost yesterday. So....a very good day and a nice way to end the week. I was greatly in the green today....but....still ended with four positions in the red.....Apple, Costco, Home Depot, and Honeywell. I also got in a big beat on the SP500 today by 1.32%.
So......here is how we ended the week and where we stand at this point in the year. DOW year to date (-3.44%) DOW for the week +1.05% SP500 year to date (-5.57%) SP500 for the week +1.55% NASDAQ 100 year to date (-9.96%) NASDAQ 100 for the week +1.80% NASDAQ year to date (-9.89%) NASDAQ for the week +2.38% RUSSELL year to date (-10.82%) RUSSELL for the week +1.72% All in all a very ERRATIC week....but.....a good week. Anytime all the averages can gain 1% to 2.4% in only a week is a very good week. We had to put up with one CRAZY day yesterday to get these returns......but....that is just what you have to put up with over the short term as a long term investor. It was hard work siting and doing nothing this week......glad it is the weekend. TGIF.
One last comment on the jobs report today. It is OBVIOUS that the government severely and intentionally down-played the jobs report leading into today. A classic situation of talking down the report ahead of time to create BUZZ when the real numbers come out.
Notice how we are not hearing much about the pandemic over the last week or two. Cases are dropping like a rock. People are sick and tired of the whole thing and even in the more progressive states are wanting to just move on and live with it. A number of countries removed restrictions and this will pick up steam around the world over the next few months. YES....the pandemic is over. Now all we have to do is get all the bureaucrats and government to take their foot off of our rights and let things normalize. Easier said than done in some areas of the country....but....it will happen. After all....we ARE supposed to be a FREE country and a FREE MARKET economy.
up 1.71% for the week and down 3.77% ytd versus the S&P which is up 1.55% for the week and down 6.17% ytd.
AS USUAL.........HERE is my current PORTFOLIO MODEL. I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 59% of the total portfolio and the fund side at about 41% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Honeywell Microsoft Nike Nvidia Tesla MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (72). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis.
I like the general commentary in the first half of this little article......so i am posting it. the second half of the article looking at stocks of the big builders.......read it by clicking on the article if you wish. Housing Goes from Graham to Munger https://smeadcap.com/missives/housi...ZTY&utm_content=202493989&utm_source=hs_email (BOLD is my opinion OR what I consider important content) "Dear fellow investors, Ben Graham is ascribed as being the father of value investing. The intellectual framework he brought to investors was using the available accounting to measure value of a business. His way of measuring was book value, the total assets minus all liabilities. By figuring out this number, he could then divide this metric by the total shares outstanding to understand how much book value per share (what some may call net worth) a company had versus what the price the shares were trading for in the stock market. This is where we get the famous axiom, “Price is what you pay. Value is what you get.” Graham specifically preferred book value that was predominantly cash or marketable securities. Liquid assets made the book value easier to understand. In this lens, an investor would have little regard for the amount of income that a business can generate over time as he primarily focused on the balance sheet. Warren Buffett was hugely influenced by his teacher’s concepts early in his career. In later years, after being introduced to Charlie Munger and witnessing what they saw with their investment in See’s Candy, he began to think much more about the future of a business than the current balance sheet. Charlie Munger is widely quoted for saying: “Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you’re not going to make much different than a 6% return—even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you’ll end up with a fine result.” What Munger is pointing to is not the current book value, but instead how the book value could grow. Return on equity (ROE) is nothing more than book value growth. Munger’s principle is true no matter how you run the numbers. A company running 18% ROE doubles their book value every four years. A company running 6% doubles book value every twelve years. This would lead an investor to pay a multiple relative to the amount of time needed to grow book value. If we are talking about twelve years, you’d pay three times as much for the current book value of the investment doubling book in four years, though this is not perfect as you can’t know the future of either investment. Below is a visual way of thinking about all of this. As we look across the developed world, you can see those investments which produce 10% ROE roughly trade at book value. Companies that produce less trade at a discount to book value. As you move toward higher double-digit ROE (15% or greater), you can see that investors are willing to pay book multiples that are less linear. In turn, most investors focus more on the earnings multiple of those businesses. Why? Because high ROE means the underlying book value (net worth) today is small relative to what the book value will be in the future because it is compounding quicker. One other thing to mention is that investors often pay lower book multiples for heavily-indebted businesses. Leverage works against you if things go bad. The liability holders have a greater claim against the company’s assets if things go awry. The total net worth (book value) is more important in these situations, so price relative to book value becomes a bigger fixation for equity investors." MY COMMENT I like this little....short....discussion of some of the factors in Fundamental analysis. If you want to see how the author applies this sort of analysis to the housing industry.....go ahead and click on the article and read the rest. I am NOT recommending any of the companies or stocks listed in the article.
