HERE is the little economic story of the day.....no.....the markets dont seem to care. U.S. Producer-Price Inflation Stays Hot, Reinforcing Fed’s Plan to Start Raising Rates https://finance.yahoo.com/news/u-producer-price-inflation-stays-134021933.html (BOLD is my opinion OR what I consider important content) "Prices paid to U.S. producers jumped in January by more than forecast, pointing to persistent inflationary pressures as companies contend with supply-chain and labor constraints. The producer price index for final demand increased 9.7% from January of last year and 1% from the prior month, Labor Department data showed Tuesday. The gain from December was the largest in eight months. The median forecasts in a Bloomberg survey of economists called for a 9.1% year-over-year increase and a 0.5% monthly advance. “Inflation is everywhere and it seems to be gathering both breadth and momentum,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, said in a note. The figures, which reflected broad increases across categories, may bolster the case for the Federal Reserve to be more aggressive on raising interest rates and shrinking its bond holdings in the coming months. Transportation bottlenecks, robust demand and labor constraints experienced through 2021 have carried over into this year and risk keeping price pressures well-elevated. “The combination of stubborn supply disruptions and elevated energy prices will prevent producer prices from reverting to more normal patterns until later this year,” Mahir Rasheed and Kathy Bostjancic, economists at Oxford Economics, said in a note. The S&P 500 rose on optimism Russia-Ukraine tensions may be easing, while Treasury yields climbed. The latest monthly advance indicates inflationary pressures in the production pipeline remain intense, which will continue to filter through into final costs of consumer goods and services. Data last week showed that consumer prices surged in January by more than forecast, sending the annual inflation rate to a fresh four-decade high. Federal Reserve The PPI report stands to give more credence to calls for bolder action by more hawkish policy makers such as St. Louis Fed President James Bullard. But centrists among the top Fed officials appear skeptical of a half-point hike, and have suggested that there is little need to start a hiking cycle with a half percentage point move. A separate report Tuesday showed prices received by New York state manufacturers jumped to the highest in data back to 2001. “As with most as with most companies, inflation is impacting more than just our raw materials,” Richard Kramer, chief executive officer at Goodyear Tire and Rubber Co., said on the company’s Feb. 11 earnings call. He added that the firm expects “cost pressures to persist over the next several quarters.” The cost of energy rebounded in January after falling a month earlier, rising 2.5%. So far this month, crude oil and other energy prices have continued to climb on risks that a Russian attack on Ukraine would prompt serious sanctions by western governments. Excluding the volatile food and energy components, the so-called core PPI increased 0.8% from a month earlier and was up by a 8.3% from a year ago. Prices of goods accelerated in January from a month earlier, rising 1.3%, the most in three months. Similar to the CPI, prices for goods are still running just as hot as services. That’s counter to the thesis that many economists, including some at the Fed, are counting on, betting that inflation will shift away from goods to services as the pandemic ebbs, supply chains normalize and Americans resume normal life. Services Costs The cost of services advanced 0.7%, matching the prior month. The report captures changes in prices paid to producers as well as margins received by wholesalers and retailers. A major factor in the January increase in the index for final demand services was hospital outpatient care prices, which rose 1.6%. Producer prices excluding food, energy, and trade services -- a measure often preferred by economists because it strips out the most volatile components -- rose 0.9% from December, the most in a year. Compared with a year earlier, the gauge advanced 6.9%. Costs of processed goods for intermediate demand, which reflect prices earlier in the production pipeline, rose 1.7% from a month earlier. Compared with a year earlier, the measure was up 24.1%." MY COMMENT I am not sure raising rates is going to make any difference at all. We are NOT seeing inflation because the economy is running hot.......it is NOT. We are seeing inflation because of supply chain issues and a lack of materials and goods. Simple supply and demand. I do think we need to raise rates regardless......but.....will they have an impact on the current causes of inflation.....very doubtful. We are simply going to have to WAIT for the supply issues to take care of themselves. In other words about 12-18 months from now. If the FED panics and freaks out because their rate hikes are not working and start to raise more quickly they will tank the economy into a recession.
YOU know how much I LOVE the IRS......so I cant resist another story on their incompetence. IRS Chief: We're facing enormous challenges this tax filing season https://finance.yahoo.com/news/irs-we-face-major-challenges-as-tax-day-looms-152135205.html (BOLD is my opinion OR what I consider important content) "As the IRS begins this tax season, it continues to face enormous challenges. Our dedicated workforce has done everything it can to prepare for filing day on April 18. Our immediate focus is simplifying the taxpayer’s filing experience by streamlining the process, answering as many questions as possible and reducing our historic inventories. Today, millions of people are still waiting for prior years’ returns to be processed, and refund checks to arrive in the mail, while preparing for their upcoming tax filing. While we can’t immediately solve these significant issues, our employees are doing everything they can, and I am committed to returning to normal inventory levels before next year. The IRS is operating without stable, multi-year funding in place, which creates additional impediments to our efforts to deal with our current situation. However, we have taken extraordinary measures to work through unprocessed returns and correspondence, including mandatory overtime by IRS employees, creating and redirecting surge teams to address the inventories, temporarily suspending certain automated compliance notices and, where possible, modernizing operating systems to accelerate the manual processing of inventories. COVID hit us all. While facing consequential resource challenges as a result of chronic underfunding, the IRS worked as hard as possible, while taking on a significant increase in responsibilities while also facing unprecedented challenges from the pandemic. It has been my privilege to lead the IRS since 2018 as we have worked through the successful delivery of more than $1.5 trillion in refunds, stimulus payments, and advance payments of the Child Tax Credits – all during an excruciating pandemic. Through our work, we touch more Americans than any other private or public sector organization—and we are deeply proud to serve our country. For the current tax season, the IRS workforce has already delivered more than 4 million refunds worth nearly $10 billion just through Feb. 4. And yet millions are waiting for their returns to be processed, and many won’t be able to reach us when they call with questions this filing season. This is frustrating for taxpayers and for us. We want to do more, but we face major challenges. Over the past decade, the IRS budget has been cut by nearly 20%. The agency today has as few employees as it did in the 1970s, despite a 60% increase in the United States population during that time and an unprecedented increase in responsibilities. While more than 90% of the over 160 million individual returns are filed electronically, the remaining people who file on paper lead to millions of time-intensive, manually processed paper returns. As we have seen across our economy, technological improvements can do wonders to increase the efficiency of workforces and organizations. Without long-term, predictable funding, the IRS will continue to face severe limitations, unable to provide the service taxpayers deserve and need. There are tangible consequences to American taxpayers who aren’t able to receive the level of service they deserve, as well as the IRS’s ability to enforce tax laws for ultra-wealthy tax cheats. Last year, the IRS received 120 million calls on certain phone lines during filing season (at times, calls came in at the rate of about 1,500 per second), but our limited workforce was able to answer fewer than 20% of them. Over the last several years, staffing for taxpayer assistance centers decreased so dramatically that less than a third as many taxpayers are able to receive face-to-face assistance from the IRS than they were in 2016. There are several ways people can ensure a smoother filing process this year. Filing electronically with direct deposit can avoid processing delays, refund delays and later IRS notices. Taxpayers should pay extra attention if they received Economic Impact Payments or an advance Child Tax Credit in 2021. The IRS has sent out more than 150 million information letters this year. This will help assure information is reported accurately. The reality at the IRS is that we know we need to do better, we’re committed to doing better, and we are trending in a positive direction. Our employees are doing everything they can. But we need help. As many IRS leaders have stated for most of the past decade, without long-term, predictable funding, the IRS will continue to be hamstrung, failing to provide the experience that taxpayers deserve." MY COMMENT The above is the IRS......LIE. Give us more money and all will be just fine. This agency and their management is totally incompetent and delusional. This is their PR reply to the recent story in the media that they have been......COVERING UP....the real number of unprocessed returns. They have been saying for months that it was 8MILLION unprocessed returns......but.....recently it came out from the Taxpayer Advocate that it was really....24 MILLION returns. Sorry IRS.....no matter how much you pay for some PR firm to put out propaganda for the media to run......you still SUCK. (I will probably get audited now)
Here is the story of the day for investors. Dow jumps 450 points, snaps 3-day losing streak as Russia-Ukraine tensions cool a bit https://www.cnbc.com/2022/02/14/stock-market-futures-open-to-close-news.html (BOLD is my opinion OR what I consider important content) "The Dow Jones Industrial Average rose for the first day in four on Tuesday after Russia appeared to be backing away from an immediate invasion of Ukraine, cooling geopolitical tensions that have knocked the stock market down the last three days. The Russian Defense Ministry said it had begun returning some troops to deployment bases after training exercises near the Ukrainian border. The Dow jumped about 450 points, or 1.3%, helped by a 3% jump in Boeing. The S&P 500 climbed 1.6% and the technology-heavy Nasdaq Composite advanced 2%. All three major benchmarks were down in the three prior sessions. The S&P 500 is about 8% from its record high. The small-cap benchmark Russell 2000 rallied 1.9%. Russian Defense Ministry spokesman Igor Konashenkov said troops who had recently been posted to Russia’s southern and western military districts — which share a border with Ukraine — had completed their drills and “have already begun loading onto rail and road transport and will begin moving to their military garrisons today.” WTI crude prices fell 3%, while the 10-year Treasury yield jumped to 2.04% as tensions eased. The VanEck Russia ETF, a U.S.-traded fund which invests in big Russian stocks, jumped nearly 5%. Airline and cruise stocks led the gainers while energy companies were the biggest losers as oil prices fell. American Airlines rose 5% and Carnival Corp. added more than 4.5%. Meanwhile, Exxon Mobile fell 2% and ConocoPhillips lost 3%. Certain technology names also charged higher. Netflix added 2% and Tesla rose more than 3.5%. “De-escalating tensions between Russia and Ukraine are helping overall sentiment today, but that isn’t the only good news. US Covid cases are now down 80% from their January peak, another sign the reopening will be moving forward,” said Ryan Detrick of LPL Financial. In addition to the Ukraine drama, investors got another look at the inflation picture on Tuesday. The producer price index, which measures final-demand goods and services, increased 1% for the month, against the Dow Jones estimate for 0.5%. Over the past 12 months the gauge rose an unadjusted 9.7%. Excluding food, energy and trade services, co-called core PPI increased 0.9% for the month, topping the 0.4% estimate. “News that Russia is pulling back some of its troops from the Ukraine border is fueling an early morning bid to equity prices and a retreat in oil prices,” said Kathy Bostjancic, chief U.S. economist at Oxford Economics. “However, NATO is still awaiting confirmation of the pullback, and in the meantime wholesale prices in the US started the year rising at an accelerated pace. This underscores that the Fed is behind the inflation curve, they will need to front-load tightening for this year.” Wall Street is coming off a volatile Monday trading session. The Dow closed lower by more than 170 points. The S&P 500 dropped as much as 1.2% before ending the day 0.4% lower. The Nasdaq Composite fell 0.9% at one point before closing just below the flatline. Those moves came as the Russia-Ukraine conflict had appeared to escalate. Secretary of State Antony Blinken ordered the closing of the U.S. embassy in Kyiv, Ukraine, citing a “dramatic acceleration in the buildup of Russian forces” on Ukraine’s border. Concerns over multiple Fed rate hikes also kept investors on edge. St. Louis Fed President James Bullard told CNBC’s Steve Liesman on Monday that the central bank needs to be aggressive in fighting inflation. The consumer price index rose last month at its fastest year-over-year pace since 1982, leading Citigroup and Goldman Sachs to increase their rate hike outlook for 2022 to seven. “I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation. This is a lot of inflation,” Bullard said. “Our credibility is on the line here and we do have to react to the data,” he added. “However, I do think we can do it in a way that’s organized and not disruptive to markets.”" MY COMMENT Reading and BOLDING the above article made me think of how the words......"traders" and "investors"....have been intentionally FLIPPED over the past 10 years compared to the past. It used to be that short term dealing in stocks and other products was......."TRADING". While the long term use of these products was......"INVESTING". NOW....the practice is to call the daily stuff....."investing" or "investors".......and the long term stuff "trading" or traders". I have no doubt that this change over is INTENTIONAL by the brokerage businesses. They make more money when there is a general "trading" mentality. Unfortunately for everyday people.......this sort of subtle psychological use of language hurts their returns.......it draws attention and thinking away from LONG TERM INVESTING.
I am now at about (-9%) for the year to date. I seem to be stuck in a range of about (-5%) to (-10%) so far this year. Of course that is not as bad as it seems since that range also......in general.....represents how close I am to an all time high again. I should have a good shot at making up about 2% of that in one day...today. In the old days we would say that the markets are consolidating and digesting the recent gains and after doing so we will resume a move to the upside. I still tend to think this way. After the massive gains we had last year and the year before.....the markets need to pause before moving on. At times the markets simply need to pause and "think" for a while and get caught up with earnings and what is going on in the world. Nothing wrong with that.......especially since.....earnings are kicking ass and all is well in the business world. (at least the business world that I own and focus on) Earnings are the forgotten topic at the moment......but over time they do MATTER. Speaking of earnings......it is NVIDIA's turn tomorrow. I have a few more companies left to report. Assuming the dates are correct I will have......Home Depot, next week.......Costco, the week after next......and Nike the week of March 14.
Today as superman would say was......UP, UP, and AWAY....for the markets. It is nice to see what the markets are capable of doing without all the RUSSIA BS. Of course.......with no invasion for the moment.....I saw the latest media fear mongering article with a headline that.......now......RUSSIA is going to possibly be doing.......wait for it......Cyber Attacks......on the USA. BROTHER. I ended the day with EVERY position solidly in the green today. A big gain day. And a nice beat on the SP500 by 0.96% on a day when the SP500 was up big. I cant ask for more than that.....well.....other than a stock split announcement from Amazon....which did not happen.
Here is how we ended this very nice day.......obviously. Stocks rally after Russia reports pullback of military troops https://finance.yahoo.com/news/stock-market-news-live-updates-february-15-2022-235016255.html (BOLD is my opinion OR what I consider important content) "Wall Street’s main benchmarks rallied on Tuesday as investors weighed a potential de-escalation of geopolitical tensions between Russia and Ukraine following news some Russian military units will start returning to their permanent bases after completing drills near the Ukrainian border. The Dow Jones Industrial Average closed 1.22%, or 422.67 points, higher to 34,988.84, while the S&P 500 jumped 1.58%, or 69.40 points, to 4,471.07. The Nasdaq Composite saw its best day in two weeks, advancing 2.53%, or 348.74 points, to 14,139.76 after the threat of a Russian invasion of Ukraine weighed on markets already grappling with the prospect of swifter monetary tightening by the Federal Reserve. Meanwhile, oil retreated from its highest price since 2014, falling 3.69% to $91.94 per barrel. Russian President Vladimir Putin said Tuesday he was open to security discussions with the West on negotiating the crisis but emphasized responses from the United States and NATO members to Moscow's security demands failed to meet the Kremlin's requests. President Joe Biden in a speech on Tuesday said the United States was prepared “no matter what happens.” “We are ready with diplomacy, to engage in diplomacy with Russia and our allies and partners to improve stability and security in Europe as a whole,” he said. “And we are ready to respond decisively to Russian attack on Ukraine, which is still very much a possibility.” Fears that the Kremlin would green light a move to force in on Ukraine as soon as this week have created a new headwind for global markets worried the conflict could exacerbate inflation and spur other economic disruptions. “The general consensus is that we are going to be on a high simmer, at least for the foreseeable future,” Raymond James Washington policy analyst Ed Mills told Yahoo Finance Live on Tuesday. “Putin has a lot of incentive to continue the pressure but also to drag this out.” The geopolitical tensions add to the uncertainty around central bank policy that has dominated market sentiment in recent months. Earlier in the session, the U.S. Bureau of Labor Statistics reported its U.S. Producer Price Index (PPI) rose 1%, notching another monthly gain in January and adding to a series of hot inflation prints, reiterating calls on the Fed to raise interest rates. The print comes after the Labor Department reported last week its Consumer Price Index (CPI) notched a steeper-than-expected 7.5% increase over the year ended January to mark the largest annual jump since 1982. "Factories are producing more inflation than goods at this point and with supply and labor shortages not going away, inflation is going to stay on the front burner of Federal Reserve officials’ concerns for now," FWDBONDS chief economist Christopher S. Rupkey said in a note. "The Fed is going to start moving up interest rates to curb economic demand, but if inflation keeps going, consumers will stop buying all on their own because they can’t afford it." “The escalation of Russia and Ukraine tensions come at a time when the stock market is already vulnerable given inflation worries and the potential for Federal Reserve tightening,” Sanders Morris Harris Chairman George Ball said in a note. “If an armed conflict between Russia and Ukraine is somehow avoided, a short-lived relief rally is likely, but there are still too many worries on the horizon for any type of longer lasting upward move higher in stocks.” Comerica Bank chief economist Bill Adams said Tuesday's PPI report reinforces the urgency of withdrawing monetary stimulus for the Fed. "Inflation is way above their target and has gained momentum across the economy," he said in a note. Chapwood Capital Investment Management managing partner Ed Butowsky told Yahoo Finance Live recent macroeconomic conditions are “laid out perfectly for the market to go lower,” pointing to higher interest rates, slow earnings, and slow economic growth around the globe. "There's no good reason to see this market go higher.” On the other hand, Comerica Wealth Management Chief Investment Officer John Lynch pointed out in a note that despite recent volatility in interest rates and equities, areas of the fixed-income markets have exhibited less turbulence. With corporate credit stress limited for investment grade and high-yield bonds, 10-year breakeven inflation expectations remain contained. “We believe it is important for investors to focus on market signals, rather than headlines, while also respecting traditional patterns for prices, interest rates, and equity valuations,” Lynch said. MY COMMENT YES......investors definately need to focus on the markets, fundamentals, and earnings rather than the headlines. The markets have been.......FOOLISHLY......focused on the headlines and "supposed" drama over Russia. I dont believe any of it. This is what happens when the markets and many investors are caught up in the....social media and politics....rather than REALITY and FACT.
This is the last MORON we need telling us what to do now. U.S. Fed should act soon and decisively to raise rates -World Bank's Reinhart https://finance.yahoo.com/news/u-fed-act-soon-decisively-130620310.html
I am looking for NVIDIA to be a driver of the markets tomorrow and especially on Thursday since they report after the close on Wednesday.
I find this article and the population of investors mentioned in the article interesting. They are trying to market time.....and.....holding too much cash in an inflationary environment. Not likely to end well....compared to those that remain fully invested for the long term. UBS Says Wealthy Investors Are Hanging On to Cash https://www.barrons.com/advisor/art...ors-cash-allocation-51644872852?siteid=yhoof2 (BOLD is my opinion OR what I consider important content) "Even with inflation rising, many investors are stockpiling cash. That’s an important takeaway from UBS Global Wealth Management’s fourth quarter Investor Sentiment report published last week. Sixty-one percent of high-net-worth U.S. investors polled in January said they have more than 10% of their portfolio in cash and equivalents such as CDs. Of those, 56% said they are concerned about the impact of inflation on cash value, and 41% said they are waiting for the right opportunity to invest. What’s more, most U.S. investors polled by UBS said they believe inflation will continue through 2022, with 62% saying it will last longer than 12 months. For financial advisors, this could be a good time to ensure clients’ cash allocations aren’t out of whack. Holding too much cash can be a money-losing proposition during periods of rising inflation. Consumer prices surged 7.5% year over year in January, a four-decade high. “The first step in determining what clients should do with their cash holdings is to evaluate how much of their total wealth should be in cash or other highly liquid and safe instruments,” says Jason Draho, head of Asset Allocation Americas for UBS Global Wealth Management Once this determination is made, advisors can recommend how the cash can be optimally allocated among safe, short-maturity investments. “Any residual cash can then be deployed into investment strategies supporting long-term goals, with the allocation contingent on their existing asset allocation, risk tolerance, preference for alternative assets, and so on,” he says. U.S. investors also said they have qualms about market volatility, which isn’t surprising given how brutal January was for stocks. With February shaping up to be topsy-turvy as well, it’s an opportunity for financial advisors to reach out to clients, especially the more jittery ones, to discuss strategy. Forty-eight percent of investors polled by UBS cited concerns about a market downturn. Amid volatility, 39% of U.S. investors polled said they could consider adding stocks to their portfolios. Thirty-six percent said they would contemplate adding portfolio hedges, while 35% said they would think about reducing cash, and 31% expressed a desire to consider adding real estate. The U.S. portion of the global report polled 900 U.S. investors and 500 business owners. Investors had at least $1 million in investible assets. Business owners had at least $1 million in annual revenue and at least one employee besides themselves." MY COMMENT This is typical investor behavior. No matter what people think and say....many will simply not be able to take the pressure of a JITTERY market. They want to see instant results, they get nervous, they give in to fear, they panic, they want to safeguard what they have, they get risk adverse, etc, etc, etc. It is always the same. This is EXACTLY why the vast majority of investors SEVERELY UNDER-PERFORM the general averages like the SP500 over the long term. It simply takes.....GUTS.....to be a long term investor. No matter what people say and think....most will not be able to do it.
I will be out of touch for the open today. It will be the same old same old……Russia,Russia,Russia……and of course……the Fed with their usual perfect timing will release their minutes today. From what I hear on the radio right now the media is going full on with the Ukrainian fear mongering today. After the bell we will get earnings from Nvidia and Cisco.
Posting from the car. Retail sales in January at record levels blowing away expectations. So much for COVID and inflation having any impact. Real consumer behavior is way stronger than the polling has been showing.
It was easy for me to ignore the markets today since I left home at 5:30AM and was mostly in the car. I unexpectedly ended up in the green when I got a chance to check my account a minute ago. I also got in a.....small....beat on the SP500 by 0.04%. I had 5 stocks UP.....and 5 stocks down. The gain was small....but it sure beats being in the red for the day.
I guess I got a chance to get online just in time to check out the Nvidia earnings. Here they are. Nvidia provides strong revenue outlook on demand for computer chips https://www.cnbc.com/2022/02/16/nvidia-nvda-earnings-q4-2022.html (BOLD is my opinion OR what I consider important content) "Key Points Nvidia reported fiscal fourth-quarter earnings on Wednesday. Data center sales rose 71%. Nvidia has been boosted as cloud providers and enterprises turn to the kind of graphics processors it makes for artificial intelligence applications. Nvidia reported fourth-quarter earnings and sales on Wednesday that beat analyst expectations and provided a strong outlook for the current quarter. The stock fell over 1% in extended trading. Here’s how the chipmaker did versus Refinitiv consensus expectations for the quarter ending January: EPS: $1.32, adjusted, versus $1.22 expected, up 69% year-over-year. Revenue: $7.64 billion, versus $7.42 billion expected, up 53% year-over-year. Nvidia said it expects to report $8.10 billion in the first quarter, higher than analyst expectations of $7.29 billion. Nvidia CEO Jensen Huang said in a statement that the company is seeing “exceptional” demand because its chips are useful for artificial intelligence and other intensive applications. Nvidia was on a big run in 2021, but it is down about 10% year-to-date as investors are looking for safer investments in an inflationary environment. Nvidia has been boosted as cloud providers and enterprises turn to the kind of graphics processors Nvidia makes for artificial intelligence applications such as speech recognition and recommendations. Nvidia reported $3.26 billion in sales from its data center business, up 71% annually. During the quarter, Nvidia announced that Facebook parent Meta would use its chips for artificial intelligence research, for example. Gaming is still Nvidia’s largest market, as its latest GeForce graphics processors are ideal for playing advanced computer games. The gaming business rose 37% year-over-year to $3.42 billion driven by GeForce sales, the company said. Nvidia’s chips are also useful for professionals who need them for applications like computer-assisted design, rendering, and artificial intelligence. It reports those sales in its Professional Visualization business, which rose 109% annually to $643 million. The company said the growth was driven by workstation chip sales and hybrid working. However, Nvidia’s automotive business was down 14% to $125 million. It’s not a primary focus for the company but represents a growth market for its chips. Nvidia said that car makers’ supply constraints were one reason that its automotive sales fell. Nvidia said that nearly all of its GPUs now ship with software that prevents them from being used to mine cryptocurrency and that miners can buy specialized mining processors instead. It said it sold $550 million in crypto-specific cards in its fiscal 2022, and only $24 million in the fourth quarter. Nvidia was in talks to purchase Arm, a chip technology company, from SoftBank, but the company announced earlier this month that the transaction had fallen apart under regulatory scrutiny. Nvidia said it expected a $1.36 billion charge to operating expenses as a result of the Arm deal failing to close" MY COMMENT A BIG BEAT all the way around......and....great forward commentary by the company. So....of course the stock was down after-hours. I suspect it will be UP tomorrow....but who cares......this earnings report was very good. As to......"investors looking for safer investments in an inflationary environment".....WTF. I consider a top ten in the USA company about as safe as you can get in ANY environment.....especially one with inflation. Personally statement like this are IRRATIONAL and drive me crazy. But......whatever.
HEY....I almost forgot....how was the invasion of Ukraine today? What....it did not happen.....how can that be. I saw Putin making fun of the US government a few days ago talking about the "wag the dog" stuff that we are doing. He was reallly rubbing it in. I did hear many people in the media today on the radio talking about "the invasion today". How stupid. I am not saying it will or will not happen....I dont care personally. But this stuff we are seeing lately in the media is just plain DUMB.
Speaking of the invasion and my view of it as an investor.....I like this little article. The Cold Truth: War In Ukraine Won't Stop This Bull Market https://www.realclearmarkets.com/ar...kraine_wont_stop_this_bull_market_816948.html (BOLD is my opinion OR what I consider important content) "With Russian troops supposedly poised to invade Ukraine, will rising geopolitical tensions doom the bull market? I doubt it—even if regional war erupts. Despite regional conflicts’ terrible, tragic human costs, history shows they lack the power to sway coldhearted markets—not for long, at least. Regional conflicts have sometimes caused stock market corrections, but not bear markets. Recognizing that harsh but true dichotomy is crucial to successful investing. I often say bull markets end one of two ways: atop the Wall of Worry when reality falls short of exuberant expectations, or after a “wallop”—a multi-trillion-dollar economic shock, like COVID lockdowns. Many presume regional wars pack wallop potential. They don’t. Consider Ukraine. It accounts for merely 0.2% of global GDP. Its investable market comprises only two stocks totaling about $1 billion in market capitalization. Energy? Ukraine’s role in transferring Russian gas to Europe—which sparked price spikes during 2006 and 2009 disputes—has diminished sharply. Newer pipelines like the Yamal-Europe, Nord Stream 1 and TurkStream all bypass Ukraine. The result: Last year, gas exports to Europe via Ukraine were a third that of two decades ago. Not to discount the human tragedy of war—anyone with a heart knows that devastating reality. But markets are emotionless, heartless. Will sanctions cause disruptions? Well, they never really work as intended since it costs little more than the equal of a brokerage commission to run transactions underground through a plethora of firms from other and often smaller countries who will eagerly take advantage of the opportunity. But sanctions also, for the same reason, don’t really negatively impact markets in any real ways. Or, will Russia via restricting energy exports cause supply shocks, compounding Europe’s energy crisis? Maybe! But any fallout likely can’t last long. Yes, import-reliant Europe gets over 25% of its oil imports and 40% of its gas from Russia. Western sanctions or Russia snubbing the continent—two big ifs—would pressure prices briefly. But remember: Markets—commodity markets included—pre-price all widely known information, data and opinions. Always. Everywhere. Few events are now more widely watched than Russia-Ukraine tensions. Markets have been factoring potential conflict into prices since November reports of Russian troops massing near Ukraine, if not longer. Most pin oil’s red-hot 2022 start to the potential invasion. To truly shock energy prices, reality must fall short of present frightened expectations—which were bludgeoned by January’s plunge in Russian gas exports to Europe. The chance of downside surprise now looks low. Also, supply chains adjust—not overnight, but faster than most envision. Already America has sent flotillas of liquefied natural gas across the Atlantic to help address European shortages. Other countries will redirect supply there, too, responding to price signals. Could short-term volatility strike as this plays out? Yes. But markets figure this stuff out faster than most realize. This isn’t to say stocks ignore regional troubles. They don’t! Rather, they pre-price them, like all widely watched events. History shows pre-conflict wobbles are common as uncertainty over the potential fighting’s scope and effect grows. Headlines grip investors. Far-flung potential negatives spark fear. Stocks squirm. The Korean War, 1967’s Six-Day War, 1991’s Desert Storm, the Bosnian War, the 2003 Iraq invasion and the Israel-Hezbollah conflict all fit this pattern somewhat. Once the outcome becomes clear, markets typically lift off—signaling the age-old mantra: “Sell on the fear; buy on the bullets.” Sometimes the tensions defuse, bringing relief. Yet stocks typically rise when fighting breaks out—not because markets and investors like war, but because uncertainty falls as the scope of the issue becomes more fully delineated. The “will-they-or-won’t-they” dominating headlines ends. Markets can examine the conflict’s scope and likely fallout—and price through and beyond it. As it becomes clear life and commerce continue as normal across the vast majority of the globe, stocks move on. Consider the S&P 500, with its longest accurate daily price history. In five of the six examples above, it was higher at the end of the fighting than on the day before battle began—the lone exception a tiny -0.3% decline during the Israel-Hezbollah conflict. Russia and Ukraine themselves offer another example—US stocks rose during Russia’s February and March 2014 annexation of Crimea. World stocks fell just -0.1%. Both climbed through the rest of 2014, amid tense fallout that included the shooting down of Malaysia Airlines Flight 17 over eastern Ukraine. Since good data began in 1925, only one armed conflict actually sparked a bear market: World War II. That was a rare case of regional strife spreading globally. The Russia-Ukraine turmoil looks exceedingly unable to snowball given Ukraine isn’t in NATO. Hence, no precedent exists for it to trigger a bear market. None. Always remember: Markets aren’t like people—they don’t see events as “good” or “bad.” Instead, they callously and mechanically pre-price well-known information … and move on. They are almost always thinking something like 3 – 30 months into the future. When it comes to investing decisions, follow their lead." MY COMMENT YEP......it is all about CLINICAL REALITY. There is nothing about the RUSSIA/Ukraine situation that is going to matter to us or our economy on any sort of significant level. I actually.....DO....try to invest mechanically and callously according to my investing Model that I follow. The reasoning in this little article is exactly why I dont care at all about.....inflation......the coming FED actions......or Russia, Russia, Russia.
Continuing with the above thinking. Don’t Fear Federal Reserve Rate Hikes. We’re in for a Huge Market Rebound Pressures will dramatically ease over the coming months https://investorplace.com/hypergrow...-rebound/?utm_source=rcm&utm_medium=editorial (BOLD is my opinion OR what I consider important content) "The stock market has been slammed in 2022, thanks to concerns surrounding the Federal Reserve and inflation. While we view the selling pressure as warranted, we also believe it is creating a golden buying opportunity in the markets — and for tech stocks in particular. After all, the U.S. stock market’s history is riddled with instances of fear begetting opportunities — and big fears created big opportunities. Well, today we have some big fears. And true to historical precedent, it’s creating huge opportunities. The concern here is that the Fed and inflation have the power to absolutely crush the U.S. economy and markets in 2022. Specifically, to fight inflation, the Fed is projecting that it will hike rates aggressively into what is an increasingly slowing economy. Last Thursday, Federal Reserve voting member James Bullard said that he wants to hike rates four times by July. And now the market is allocating an 88% chance that the Fed rate-hikes at least seven times in 2022. That’s problematic because leading economic indicators are deteriorating to signal a slowing economy ahead. For example, the University of Michigan’s monthly Consumer Sentiment Index for February was released last Friday morning. It clocked in at a decade-low reading of 61.7. The index has dropped precipitously over the past year. Historically speaking, such huge drops in consumer sentiment to abnormally low levels are a leading indicator of consumer spending slowdowns. It happened in 2001. Then it happened in 2005, 2007, 2012 and 2020. And it will likely happen again here in 2022. A Dovish Federal Reserve The concerning part therein is that consumer spending powers about 70% of the U.S. economy. If consumers slow down in 2022, the U.S. economy will slow down, too. Ahead of that, the market thinks the Federal Reserve could hike rates seven times. That’s a scary prospect. Hiking aggressively into an economic slowdown could lead to a recession. These fears are illustrated in the bond market, where the Treasury yield curve has dramatically flattened to record-low levels. And historically, such a rapid decrease to an ultra-flat curve has: 1) led to a recession and/or 2) led to the Fed cutting interest rates. Today the yield curve is levelling to ultra-flat levels ahead of what some are saying will be seven or right rate hikes! If that does happen, we believe the U.S. economy will head into a recession — and the stock market will crash more than 20%. However, we believe the Fed will do no such thing… And that instead of an imminent crash, the stock market is due for an enormous rebound. This is a patient, data-driven and historically dovish Fed. It’s led by a man — Jerome Powell — who hates to be the bad guy and who hates to see the stock market crash because of the central bank. Shortly after the S&P 500 dropped 20% in late 2018 and then-U.S. President Donald Trump was laying blame at the feet of the Fed, Powell cut interest rates in early 2019. This Fed has a history of responding to market and economic data, and turning dovish to avoid a meltdown. They will do the exact same thing in 2022. Tides Are Changing We believe inflation pressures will dramatically ease over the next few months. Supply chain issues are already improving, and the LA Port chief sees “normal” conditions returning by the summer. Consumer demand is slowing, allowing companies to work through their backlog. The semiconductor chip shortage is improving amid expanding production capacity. And the comparable periods will start to get tougher for inflation by March. Covid-related quarantine and restriction policies are abating, allowing for superior production output. All in all, we think the inflation data will cool dramatically between now and summer. During its March and May meetings, this ultra-patient, ultra-conservative and very data-driven Fed will look at that slowing inflation data, and say: “Well, maybe we should take it slowly.” This sentiment was echoed by multiple Reserve members across various interviews last week. From a CNBC article that printed last Friday morning: “CNBC reporting found that several Fed officials were already looking for a bad inflation number and the January report was not substantially worse than expected. Improvement is not expected until midyear, and only then, if it remains high and rising and does not respond to rate hikes and plans for balance sheet reduction, would these officials want to accelerate the pace of tightening.” That is the right approach here." MY COMMENT I totally agree with the above. If I am right I will benefit greatly from what I hold in my typical portfolio. If I am wrong......well.....I will eventually be right and will do just fine as a long term investor. I have ZERO plans to sell anything or change anything in my portfolio.
As I posted earlier the 30 year conforming mortgage rate is now about 4.05%. Get used to it....the direction for mortgage rates is....."probably".....up for the next 2-4 years. 30-year fixed-rate mortgage saw biggest weekly jump since March 2020 Rate for a 30-year fixed-rate mortgage increased to 4.05% from 3.83% in the past week https://www.foxbusiness.com/economy/30-year-fixed-rate-mortgage-biggest-weekly-jump-march-2020
