The averages are jumping around like crazy......in a very small range......all the averages are now in the green. It is going to be a wild day for a while till the market direction gets established. My guess......we end up with a nicely green day. Of course I say that since the odds favor a gain in the markets....at least over the long term. Day to day....just a wild ass guess.
It is getting to the point where I HATE to even talk about the real estate news. I am sure readers that are looking for a home are tired of seeing this sort of stuff.......very discouraging. SO......sorry....house hunters. Median home prices hit record $405K in US: report The record-breaking price is up 13.5% from March 2021 https://www.foxbusiness.com/lifestyle/home-prices-hit-record-405k (BOLD is my opinion OR what I consider important content) "Housing prices in the U.S. hit a record high in March. The median home price in the country was $405,000, according to Realtor.com’s latest Monthly Housing Trends Report, which the company published on Thursday, March 31. Data from the report shows the record-breaking median listing price is up 13.5% from March 2021. Compared to March 2020 – the start of the COVID-19 pandemic – the current March 2022’s median listing price is up 26.5%. Despite the record price tag, the experts at Realtor.com believe the housing market is set to "moderate" in the near future. The median home price in the U.S. in March 2022 was $405,000, according to Realtor.com. (iStock) "Buyer demand is moderating in the face of high costs, and we're beginning to see more homeowners take price cuts on their listings and overall inventory declines lessen in response," said Realtor.com’s Chief Economist Danielle Hale, in a statement. "Assuming all these factors and new construction hold steady, we could begin to see inventory increases this summer – welcome news for buyers who have endured pandemic home shopping and can continue their journey despite higher buying costs," Hale continued. "For buyers currently in the market, there's good reason to aim to find a home before interest rates increase further. But if it takes longer than a few months, don't give up hope, as there may be more to choose from in the summer months." While the national listing price median for March was $405,000, home prices varied significantly in the 50 U.S. metro areas Realtor.com evaluated, which it selected based on size. California was home to three of the priciest housing metros in the country in March 2022, according to Realtor.com's Monthly Housing Trends Report. (iStock) Not so surprisingly, California was home to some of the most costly home price medians in the country. The Golden State’s San Jose-Sunnyvale-Santa Clara had a home sale median that nearly reached $1.4 million while San Francisco-Oakland-Hayward had a home sale median the $1.04 million. San Diego-Carlsbad came in third place with a home sale median of $884,000. Outside California, Boston-Cambridge-Newton, Mass.-N.H.and Seattle-Tacoma-Bellevue, Wash. tied with a median of $755,000. The four U.S. metros that had the lowest median home sale prices on Realtor.com’s list were Buffalo-Cheektowaga-Niagara Falls, N.Y. ($225,000), Pittsburgh, Pa. ($223,000), Rochester, N.Y. ($220,000) and Cleveland-Elyria, Ohio ($199,000). Cleveland-Elyria, Ohio was the U.S. metro on Realtor.com's list that had the lowest median home sale price in March 2022, which was $199,000. (iStock) Last year, mortgage-finance company Freddie Mac estimated that the U.S. had a shortage of 3.8 million homes, which has likely contributed to the competitive home-buying market. " MY COMMENT At least there is some good news above for house buyers later in the year if the opinions above come true. time will tell. If I was looking to buy i dont think I would count on anything......I would be full on....full speed ahead. AND.....all housing is local....so I am sure there are many parts of the country with more reasonable pricing.....if you are lucky to live there.
I was looking at my portfolio a few minutes ago. We are now in the grip of the dreaded......mid morning dip. It tends to happen between 10:30 and 11:00....Central time.....for me. At that moment I was seeing five stocks up.....and.....five stocks down. I was slightly to the red side of the markets. Since I had nothing to do as a long term investor I was looking at some of the numbers in my portfolio. I spent some time looking at my various holdings.......their gain in value since inception and their percentage of my total portfolio. I was surprised to see that the stock with the highest capital gain in my portfolio.......WAS NOT.....Google, Apple, Tesla, Microsoft or Amazon........it was.....good old Costco. What a well managed powerhouse of a company. They seem to have their eye on the ball all the time. I dont expect to have any money available to add to my portfolio till about November/December. At that point I will be looking at my budget for 2023 and will hopefully be able to add about $25,000 to my account from my 2023 budget. If I have that amount I will probably put about 70-75% of it into the SP500 Index fund. The rest will be sprinkled between a few stocks. At present the stock side of my portfolio stands at about 62% of the whole and the two funds (SP500 Index and Fidelity Contra Fund) are about 38% of the whole. The percentages of the two categories above show how the portfolio has evolved since it started at roughly 50/50 between the two sides of the portfolio.....stocks and funds........long ago. Of course over the many decades I have been investing the holdings of the portfolio have seen a lot of changes over the decades.
Well.....I was green today....but by less than $700. And.....I got beat by the SP500 by 0.26%. Not the best day considering that the averages were moderately UP for the day. I had fairly mild gains and losses in my stocks except for Nvidia which dragged me down today.
A good week for the markets with ONLY the DOW being down for the week. DOW year to date (-4.18%) DOW for the week (-0.12%) SP500 year to date (-4.62%) SP500 for the week +0.06% NASDAQ 100 year to date (-8.94%) NASDAQ 100 for the week +0.72% NASDAQ year to date (-8.84%) NASDAQ for the week +0.65% RUSSELL year to date (-6.97%) RUSSELL for the week +0.63% Another good UP week for all the averages except for the DOW. I will take it. Is this now THREE weeks in a row? I think so. The SP500 is now within striking distance of being positive year to date and definately within striking distance of beating the DOW. Of course.......it could just as quickly go the opposite direction. I dont see any news or other events that are going to surprise the markets much over the next month. Lets hope that April lives up to it's reputation for being the best month of the year for stocks......at least for the SP500. A nice way to go into the weekend.
At least I made some progress today on my construction projects at home. As of today we are done with the carpenters. They were here all week doing many little areas of crown molding and trim on eight windows. We are now done with 99% of our five year project list in only one year. Thank goodness. It will also be nice to make some money over the next week. I will be doing four shows. Three of them involve a little driving.......100 to 200 miles each. We nearly added a fifth show that would have been about 800 miles round trip....but it fell though.
KLIC doing poorly for me, down over 9% so I sold about 1/3 of my shares and bought into DIS. Most of the loss is from one single crappy day which is why I didn't sell the whole thing. I'll give it a few more sessions and can hopefully gain a little back.
This is a nice little article......the most important content.....keep it simple. Investment lessons from genuine experts https://www.evidenceinvestor.com/investment-how-the-professionals-do-it/ (BOLD is my opinion OR what I consider important content) "One of the most frequent questions put to professional chefs is what they cook for themselves when off duty. Likewise, motor racing champions inevitably are asked what sort of car they keep in the garage at home. In the same spirit, what if you were to ask finance professionals how they invest their own money? What lessons could they teach us. A recent book explores just that. There has to be a holy grail of investing. You would think so, wouldn’t you? Some money guru must have written down the secret recipe somewhere and all we have to do is get our hands on it and cook it up for ourselves. Instant wealth awaits. Or maybe not. In fact, if there is one takeaway from How I Invest My Money — a collection of interviews with 25 financial experts about how they put their own capital to work — it is that money choices are personal. People differ in their goals, attitudes, risk appetites, and values. And that means there is no single, “right” way to invest. There are some common themes, however, and in this fast-moving volume of insights, authors Joshua Brown (a financial adviser/blogger) and Brian Portnoy (a financial wellness expert) manage to tease a few nuggets out of their subjects. What lessons can they teach us? Keep it simple One of those lessons is the virtue of keeping it simple in terms of investment strategy. Diversifying broadly, staying disciplined and only taking risks you understand are the keys to success, counsels one of the interviewees, a veteran financial adviser. A second theme in the book is the notion of understanding what you value, apart from money. For one subject and his wife, the key is maintaining a sense of independence. And it is this non-negotiable value that shapes their investment approach. Someone else may place the biggest emphasis on flexibility, the ability to change one’s mind at short notice, pull up roots and start all over again. An illiquid portfolio might not be the best solution for a person like that. Accept your mistakes Another of the lessons from money experts that comes across strongly in this book is a willingness to accept mistakes along the way. Not every financial decision you make will turn out perfectly. But the best investors learn from their missteps and often discover opportunity as a result. Learning to let go is also touted as an important attribute. You simply cannot control everything. Markets are inherently volatile and losses are inevitable. Not every part of your portfolio is going to prosper. That is why you diversify. But risk is the flipside of reward. And how much risk you are prepared to take is — you guessed it — a personal choice. People differ in their attitudes to risk and return because they are formed by different experiences and value different things. So what comes through in the book again and again is how important individual perspectives can be in shaping how you invest. “All of the people in this volume are well-versed in academic investing theories,” Brown writes. “But everyone is coming from somewhere unique. Everyone has a story to tell and how we invest, save and spend is one revealing way of telling that story.” Brown’s motivation for writing the book, he says, was his experience of speaking on financial television shows for nearly a decade without ever being asked about his own personal approach to building wealth. “I’ve commented on everything under the sun. And in all of that time, not once did someone say: ‘Tell us about how you invest your money.’” We’re looking for different things It turns out the best answer to the question of how to invest is that “it depends”. For a start, not everybody wants to be rich. For some, security and the meeting of simple needs is enough. For others, already wealthy, it might be about sharing that wealth. But it’s clear that what works for a professional money manager might not be appropriate for everyone. On that score, the book cites the example of doctors, who frequently choose different end-of-life treatments for themselves than they would prescribe for their patients. “A doctor may throw the kitchen sink at her patient’s cancer, but choose palliative care for herself,” the authors write. “The difference between what someone suggests you do and what they do for themselves isn’t always a bad thing. It just underscores that, when dealing with complicated and emotional issues that affect you and your family, there is no one right answer. There is no universal truth.” The search for the investment holy grail goes on. But one of the key lessons from Brown and Portnoy’s book is that a good starting point is to “know thyself”." MY COMMENT This.....simple.....little article is so true....especially for long term investors. Although if you were inclined you could expand this little bit of advice to hundreds of pages. As usual in investing.......and in writing an a financial article...... what seems so simple in concept is very difficult for people in reality.
And....to continue on the topic of simple investing advice. Spooked by Market Declines? Don't Panic—S.T.O.P. https://www.schwab.com/resource-cen...by-market-declines-dont-panic-stop?cmp=em-QYC (BOLD is my opinion OR what I consider important content) "Dear Readers, 2022 is off to a rough start for investors. Already reeling from the prospect of higher interest rates, ongoing supply chain issues from the pandemic, inflation, and increased geopolitical uncertainty, our emotions are running hot, and our sense of security has been rattled—not to mention the fact that financial markets have been volatile. It’s understandable for investors to panic when markets suffer a sharp decline. After all, that’s our hard-earned savings and investments we see disappearing. It’s the financial security we’re counting on to make important purchases, live our lives comfortably and care for our loved ones. Unfortunately, though, that sense of panic that comes so naturally is not our friend. In fact, it can cause us to behave in a way that is in direct conflict with our best interests. You know the old saying “buy low, sell high.” Well, panic can easily make us do just the opposite. So, what’s an investor to do instead? As someone who has benefited greatly from the practice of daily meditation, I’d like to share a simple but effective four-step technique that can translate to the world of investing. Known by the acronym S.T.O.P., it can help us remain clear-headed and focused in the face of challenges, whether those challenges are personal, professional, or yes—even financial. Stop: This first step probably sounds easy, but it may be the hardest. Give yourself a moment not just to slow down, but to come to a full stop. No cable news, no social media, no checking your portfolio. Studies have shown that investors who constantly tinker with their portfolios do more harm than good. So, instead of logging onto your accounts, take a walk, sit quietly, listen to music, or practice meditation—anything that will give you a break. Take a deep breath: Once you’ve come to a stop, help your body relax further by breathing deeply. Literally. Breathe in, breathe out. It’s a lot like the 'tactical breathing'that Navy SEALS are trained to use. When you’re stressed, you're more likely to say or do something you'll later regret (we’ve all been there). So do your portfolio a favor by relaxing and clearing your mind before you make a rash decision. Observe (but don’t act): Once you’re relaxed, you’re in a great place to open up your mind and gain perspective. First, remind yourself of some basic facts. As uncomfortable as they may be, market declines are inevitable. But the pain is temporary and markets tend to reward investors who can tolerate this temporary discomfort. With this perspective, take a few minutes to reflect on your goals and time horizon as well as your willingness to take on risk. What are you saving for? If its retirement that’s decades away, remind yourself that you have many years to ride out the current downturn. But if you’re saving for something in the next few years, perhaps you’ve taken on too much risk and you should consider rebalancing. There are no universally right or wrong answers. The important point is to take the time you need to calmly evaluate your situation. Proceed: Once you’ve gained a deeper understanding of current conditions and have reasonable projections for the future, you can consider making a change—or not. When markets are in decline, often the hardest—but smartest—approach is to do nothing. But once you’ve taken the time to S.T.O.P., you’re in a much better position to act with clarity and purpose. With this knowledge front and center, accept that you can’t succeed by trying to time the markets. Instead, use your energy to focus on the things you can control: your asset allocation, diversification, and savings rate. Once you have a well-constructed financial plan with a balanced portfolio in place, investing is less an epic battle between you and the markets, and more a tug-of-war between your emotions and your actions. Warren Buffet puts it this way: “All that’s required is the passage of time, an inner calm, ample diversification, patience, and a minimization of transactions and fees.” Yes, that’s a tall order. But whether it’s S.T.O.P. or another technique that works better for you, when the markets decline, do your best to focus on your goals and stay the course. Try to view periodic losses and uncertainty as nothing more than distractions. Investing rewards those who have a disciplined process and requires patience during times of volatility and uncertainty." MY COMMENT If you follow the simple information in this post and the last post you will be well on your way to investing success. One solution for any investor is to consider......simply.....putting ALL your investing money into the SP500 Index for the long term. Most people can not do this. It is not MACHO.....it is not EXCITING......it is NOT COOL....it is DULL and BORING. BUT over the long term it will work and it will probably beat the returns of all your friends.
What REALLY counts is about to happen.....EARNINGS. Soon we will be seeing first quarter (or for some companies a different quarter) earnings. I LOVE earnings time. The four times of the year when you get to see the ACTUAL IMPORTANT business results from the companies that you own. We see all the constant day to day CHAFF and financial media GARBAGE. BUT.....four times a year we get to see the FOG lift and see the real stuff. For long term investors it is ALWAYS earnings that drive stocks and funds.
I like this little article. Stock Rally That Nobody Saw Coming Is Refusing to Go Quietly https://finance.yahoo.com/news/stock-rally-nobody-saw-coming-203529687.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- Hedge funds distrust it, a clutch of strategists say it’s doomed, and the Federal Reserve probably wishes it would stop. But a fearsome stock market rally that has been giving prognosticators fits is refusing to go away. A final-hour surge Friday salvaged a third straight up week for the S&P 500 -- barely -- extending a run for U.S. equities that at times has ranked among the strongest in the past decade. The benchmark gauge has retraced well over half its tumble since the start of the year, a shock to institutional traders who spent most of the last three months slashing risk. “A lot of people sold on the way down and then this quick surge, they’ve missed out on it,” Craig Callahan, chief executive officer at Icon Advisers Inc., said by phone. “So I think they’re trying to discredit it, sort of saying, ‘well I didn’t get in on it, it must not be real.’” The case for skepticism remains an easy one to make. Besides war in Europe, this week’s jobs and inflation data reinforced the argument for a faster Fed tightening cycle. The bond market is flashing warnings over an economic recession. And the earnings-reporting season due to start in two weeks is expected to show a drastic slowdown in corporate profits. Among investors surprised when the S&P 500 jumped more than 10% over 11 sessions through Tuesday were hedge funds. Those tracked by Goldman Sachs Group Inc. unwound their risky bets -- cutting longs and covering shorts -- in 15 of the first 21 trading sessions of March. By Tuesday, the dollar amount of their de-risking was poised for the second-largest monthly reduction in five years -- behind only the Reddit-fueled short squeeze in January 2021, according to data from the firm’s prime broker. The pattern was echoed at JPMorgan Chase & Co., whose hedge fund clients also sold into the latest rally. “We’ve just seen a very sharp rebound in equities that seems to have caught many by surprise, and which few seem willing to embrace as a potentially persisting trend,” JPMorgan analysts including John Schlegel wrote in a note. “From a positioning/flows perspective, it seems the ‘pain trade’ is still higher for now.” Buoyant markets can also be framed as mixed news for central bankers, who aim to tighten financial conditions as one way to cool demand and tame inflation. The S&P 500 started rallying the day before the Fed’s decision to raise interest rates for the first time since 2018. When Chair Jerome Powell hardened his stance a week later, stocks marched on, contributing to an easing in the Bloomberg U.S. Financial Conditions Index. “The market signal was that the Fed’s behind the curve. The Fed is telling the market, ‘hey, we can afford to be patient,’” said Benjamin Dunn, chief operating officer at Prometheus Alternative Investments. “The real tone of market participants right now is one of exhaustion. This was such a difficult quarter for investors.” Getting louder on Wall Street is the drumbeat of warnings over a bear market trap. Strategists at firms from Bank of America Corp. to Morgan Stanley urged investors not to chase the gain, citing everything from an inversion in Treasury yield curves to stretched valuations and potentially disappointing earnings. At 20 times profit, the S&P 500 trades at a valuation multiple that before the 2020 pandemic had been seen only once in the past two decades -- during the dot-com era. Meanwhile, the cushion from corporate profits is thinning out. Profit growth is expected to slow to roughly 6% in the first quarter, down from an average pace of 54% last year, analyst estimates compiled by Bloomberg Intelligence show. “The Fed is tightening aggressively, profit margins will start to deteriorate and that’s the end of the cycle,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley, said in an interview on Bloomberg TV with Guy Johnson and Kailey Leinz. “While we don’t think there is a recession this year, the risk of a recession next year has gone up dramatically.” Recessions are threats that bull markets have not been able to survive historically. Increasingly, cash is the favored asset among the pros. In BofA’s March survey of money managers, such holdings rose to the highest level since April 2020. Carin Pai, head of portfolio management and equity strategy at Fiduciary Trust International, which has around $103 billion in assets under management and administration, is currently overweight cash. She and her team -- amid the recent rally -- raised cash by selling equities. “We didn’t want to sell into the downdraft in January, but with this recovery recently, we did take some money out of equities,” she said." MY COMMENT WOW the Hedge funds....the big banks.....the professionals sold out their portfolios and MISSED the big run up recently. No surprise there they are always the ones that panic and go running for the exits with their hair on fire at the slightest drop in the markets. GUESS who was right in their behavior? Most of the posters on here. It seems like everyone on here simply held on and many put in additional money over the past three months. I highlighted some of the....."professional".......BS in the above quotes. Earnings are going to fall and be bad......cash is favored......investors are exhausted.....etc, etc. NO.....no.......and.....no. Any rational long term investor is NOT following any of this garbage. My view on earnings.....they are going to be much stronger than the.....professionals....anticipate. The consumer economy is BOOMING. People have money and are spending like maniacs. TONS of money is sloshing around in the economy. We have seen this same baloney about earnings for the past 4-5 quarters and it has been significantly WRONG.
WXYZ : , in response to your "keep it simple", the following Points 1) Albert Einstein: "The five ascending levels of intellect are: smart, intelligent, brilliant, genius, simple." 2) Charles Ellis, co-author of "The Elements of Investing": "KISS investing--Keep It Simple, Sweetheart--is the best and easiest and lowest cost and worry-free way to invest for retirement security." 3) The Finance Buff: "Making fewer decisions usually leads to better results than making more decisions." 4) Daniel Kahneman, Nobel Laureate: "All of us would be better investors if we just made fewer decisions" 5) Kiplinger: "The big secret to successful investing is that it's actually not all that complicated. Most of the mumbo jumbo doesn't matter." 6) Peter Lynch, legendary fund manager: "If you spend more than fifteen minutes a year worrying about the market, you've wasted twelve minutes." 7) James Montier, author of The Little Book of Behavioral Investing : "Never underestimate the value of doing nothing." Personally: I am "working on" concurring Sun's out , going to "the hole in the water" with some new antenna's
THIS is very impressive considering all the issues going on at the moment. Tesla delivers record vehicles in Q1; output falls as China shutdown weighs https://finance.yahoo.com/news/tesla-delivers-record-vehicles-q1-162006681.html (BOLD is my opinion OR what I consider important content) "(Reuters) - Tesla Inc on Saturday reported record electric vehicle deliveries for the first quarter, largely meeting analysts' estimates, but production fell from the previous quarter as supply chain disruptions and a China plant suspension weighed. "This was an *exceptionally* difficult quarter due to supply chain interruptions & China zero Covid policy," Chief Executive Elon Musk tweeted. "Outstanding work by Tesla team & key suppliers saved the day." Tesla delivered 310,048 vehicles in the quarter, a slight increase from the previous quarter, and up 68% from a year earlier. Wall Street had expected deliveries of 308,836 cars, according to Refinitiv data. Tesla produced 305,407 vehicles from January to March, down from 305,840 the previous quarter. Tesla, the world's most valuable automaker, has navigated the pandemic and supply chain disruptions better than rivals and its new Shanghai factory has been driving growth. But a recent spike in COVID-19 cases in China has forced Tesla to temporarily suspend production at the Shanghai factory for several days in March and April as the city locks down to test residents for the disease. The deliveries were "better than feared given supply chain issues," said Daniel Ives, an analyst at Wedbush, in a report. Tesla said it sold a total of 295,324 Model 3 sedans and Model Y sport utility vehicles, while it delivered 14,724 Model S luxury sedans and Model X premium SUVs. PRICE HIKE Skyrocketing gas prices spurred by the Ukraine crisis is expected to fuel demand for electric cars, but lack of inventory and higher vehicle prices would weigh on sales, analysts said. Tesla in March raised prices in China and the United States after Musk said the U.S. electric carmaker was facing significant inflationary pressure in raw materials and logistics after Russia's invasion of Ukraine. "Impressive (deliveries) given all the headwinds," Gene Munster, managing partner at venture capital firm Loup Ventures, said, adding he expected Tesla to continue outperforming other automakers in sales growth. Toyota and GM, Hyundai Motor on Friday reported lower first-quarter U.S. sales than a year earlier. Musk said in October that Shanghai had surpassed its Fremont, California factory - the company's first plant - in output. The two factories are critical for Tesla's goal to boost deliveries by 50% this year, as production at its new factories are expected to ramp up slowly in their first year. Tesla started delivering vehicles made at its factory in Gruenheide, Germany, in March and deliveries of cars made at its plant in Austin, Texas, were to begin in the near future. The company's stock soared after Tesla this week revealed plans to seek investor approval to increase its number of shares to enable a stock split. Tesla shares have risen about 3% so far this year, while GM and Ford shares have declined." MY COMMENT This company just keeps....keeping on.....in spite of all the outside roadblocks that are being thrown at it. Good companies with great management just somehow manage to thrive even in the most difficult times. I see there results as being due to Tesla being a very well run company. AND....the good news....the best is yet to come over the nest year as Covid and supply issues back off and the two plants in Germany and Austin ramp up to full production. At that point the company will be hitting full stride.
A nice open again today. Plus....the markets seem to be firming up as the day goes on....especially the SP500 and the NASDAQ.
As expected, the rally continues…. I’m in the mind that we will climb back to all time highs within matter of 2-3 weeks. Not suggesting that nothing is broken, but the sentiment of Wall Street is totally detached, and has been for quite awhile from issues that matter
The stock markets are often and usually disconnected from the general economy. I have seen it happen many times. Here is a good little article that summarizes where we start from for the second quarter of the year. 13 Charts on the Market's First-Quarter Performance Investors face losses on stocks and bonds after a volatile quarter. https://www.morningstar.com/articles/1087132/13-charts-on-the-markets-first-quarter-performance (BOLD is my opinion OR what I consider important content) "From the opening days of 2022, investors were taken on a wild ride during a first quarter that featured wide swings in stock, bond and commodity markets around the world. Stocks took a dive as the market reassessed the potential of the Federal Reserve setting out a more aggressive path for interest-rate hikes to help curb inflation that hit a 40-year high. Bond prices slid, sending yields higher. In a knock-on effect of rising yields, some of the stock market’s strongest performers in recent years, such as Nvidia (NVDA) and Microsoft (MSFT), saw share prices fall sharply. Just as markets seemed to be stabilizing in February, Russia invaded Ukraine, sending oil and other commodity prices soaring. Stocks fell into official correction territory, falling more than 10% from their all-time highs. The slide in bond prices caused some of the worst losses in years. All of this was reflected in an increase in trading volatility. By the end of the quarter, U.S. stocks staged a strong recovery, cutting much of their losses. Nvidia closed the quarter down about 7.2% after dropping as much as 27.5% in mid-March. First-quarter statements will show widespread losses for many investors. The Morningstar US Market Index lost 5.3% in the first quarter, and the Morningstar US Core Plus Bond Index fell 5.9%. Here are some of the other notable first-quarter stats: • At its worst levels, the Morningstar US Market Index was down 13.6% from its Jan. 3 peak. It then rallied back 8.9% from its lows by the end of the quarter. • U.S. stocks finished the quarter up 12.3% from one year ago and are up 18.3% per year for the last three years. • Bonds had their worst quarter in 20 years, with long-term core bonds down 11.3%. • Stocks and bonds, which often move in opposite directions, both finished in the red--an occurrence not seen since the first quarter of 2018. • The Morningstar US Large Value Index outperformed the US Large Growth Index by more than 15 percentage points. Overall, value outperformed growth by over 14 percentage points. • The Morningstar US 5-10 Year Treasury Bond Index is down 5.9% so far in 2022, and has lost some 9.9% since its last peak in August 2020, the largest such drawdown in its history. • Commodity prices surged, with oil finishing up 33% despite a decline of 20% from its high in the quarter. Taking a broad look across global markets, the biggest winners were commodities, especially those affected directly or indirectly by Russia’s attack on Ukraine, such as wheat and oil. On the flip side, rising interest rates hit both bonds and growth stocks. Bonds Took Big Losses in First Quarter For all the attention on stocks, bond performance is perhaps the bigger story. The asset class saw its worst quarter in over 20 years. As stubbornly high inflation had the Fed embarking on a path of more aggressive rate increases than was expected at the start of the year, bond investors are facing some of their worst losses in years. Hardest hit were longer-term bonds, which have the greatest sensitivity to interest-rate changes. Yields Rose as Inflation Continued to Run Hot With inflation running hotter than expected, the closest sector to a haven for bond investors in the U.S. has been Treasury Inflation-Protected Securities--better known as TIPS. While the losses might come as a surprise to some investors given the rise in inflation, TIPS have taken a hit from rising rates along with the rest of the bond market. The Morningstar US TIPS Index is down a relatively modest 2.4% for the year to date, ahead of all other Morningstar fixed income indexes. In 2021, TIPS returned 5.7%. The big issue for the bond market was the continued upward pressure on inflation as the consumer price index registered its biggest increases in 40 years. With inflation well above the Fed’s 2% target rate, policy makers raised the federal-funds rate by a quarter point. Yields on both short- and long-term bonds jumped to their highest level in years. The U.S. Treasury two-year note rose to 2.28% from 0.73% at the end of 2021, while the yield on the 10-year rose to 2.32% from 1.5%. Expectations for future rate hikes swung widely, but as the quarter ended, the bond market priced for the Fed to move rates much higher, faster than had been the case at the start of the year. As of March 31, the Fed was expected to raise the funds rate by a half point at both its May and June meetings. Another aspect of the bond market’s first-quarter selloff was a shrinking gap between long- and short-term Treasury yields. The difference between the two began to level out in a trend known as a “flattening yield curve.” On the final day of the quarter, the yield on the Treasury two-year note closed in the on the 10-year, on its way to moving over the 10-year in what is known as an “inverted yield curve.” Historically, inverted yield curves have preceded recessions. A Nearly Round Trip for Stocks in Q1 U.S. stocks lost ground during the first quarter of 2022, finishing down 5.3%--making for the worst start to the year since the coronavirus pandemic in the first quarter of 2020. In 2021, U.S. stocks rose 25.8%. Even with the market’s down performance during the first quarter, the U.S. Market Index was up 12.3% over the last 12 months and up an average of 18.3% per year for the last three years and 15.5% per year for the last five years. Volatility Jumped Across Markets Across global financial markets, the first quarter was marked by big swings in prices. The initial spark for the volatility was the sudden shift in expectations around the Fed in the opening days of January, later fueled further by Russia’s war against Ukraine. In the stock market, that volatility showed itself in the number of big up or down days, where the quarter was over twice as volatile as the median quarter over the past three years. The Morningstar US Market Index closed down between 1% to 2% on 13 days, and down 2% to 3% on three days. On March 7, the index lost 3.1% in its biggest one-day drop since the worst of the pandemic-driven bear market in March 2020. Amid the volatility, there were also a number of sessions where the market saw outsize gains. The Morningstar US Market Index gained 2% to 3% on six days. Those kinds of rallied have typically been seen just once per quarter in the past three years. Standard deviation, another common metric investors use to measure volatility, showed the extent of price swings across different asset classes. U.S. and non-U.S. developed-markets stocks, emerging markets, and U.S. bonds all saw an increase in volatility. Value Stocks Far Outperformed Growth Within the Morningstar Style Box for stock performance, the gap between value and growth was stark and was significantly in favor of value. The declines in growth stocks were sparked by a combination of high valuations for many names and the jump in interest rates. Morningstar’s US Value Index rose 2.3% for the quarter, while the Morningstar US Growth Index lost 12%. Mid-value stocks led the quarter with gains of 4.9%, led by Archer-Daniels Midland (ADM), up 34.2%, and Valero Energy (VLO), up 36.7%. Mid-growth stocks pulled the rest of the market lower with declines of 16%--principally affected by Facebook parent company Meta (FB), which lost 33.9%. The first-quarter value-growth dynamic continues a trend seen in late 2021. At that time, value stocks began to outpace their growth counterparts in the mid- and small-cap segments after years of lagging in performance. That trend then spread for large-cap stocks in the first quarter of 2022. First Quarter’s Best and Worst Sectors A key factor in the poor performance of growth stocks was losses among communication services stocks. That includes Netflix (NFLX) down 37.8%, and Disney (DIS), which lost 11.5%. While technology stocks finished the quarter among the worst performers, many names recovered from the worst of losses. Microsoft (MSFT), for example, finished the quarter down 8.1%, after falling by nearly 18% in early March. Energy stocks rallied on surging oil prices. Exxon Mobil (XOM) jumped 36.4%, ConocoPhillips (COP) 39.6%, and Chevron (CVX) up 40% in the quarter. Which Stock Markets Performed Best and Worst Around the Globe? On a global basis it was a mixed picture. Among developed markets, the U.S. landed in the middle of the performance rankings. Germany lost 12% partly due to its exposure to the war in Ukraine, and Japanese shares fell 6.6%. Commodity-exporting countries benefited from the conflict on supply concerns, with Canadian stocks up 4.9% and Australia gaining 6%. Chinese stock benchmarks fell sharply, with the Morningstar China Index losing 13% in the first quarter. A growing dispute between regulators about accounting and disclosure standards--which may lead to the delisting of some Chinese companies from U.S. exchanges--triggered the decline. Investors were also spooked by a new round of COVID-driven lockdowns that may disrupt the Chinese economy. Russia’s stock market in late February closed for nearly a month amid sanctions imposed on the country and restrictions remain on trading the country’s stocks. Index providers removed Russian stocks from their indexes and U.S. asset managers have written off their Russian equity holdings as worthless. Commodity Prices Posted Big Moves Oil was in the spotlight throughout the quarter. Prices were already on the rise as demand from a global economy recovering from the pandemic-induced recession outstripped supply. After Russia, a major oil and gas exporter, attacked Ukraine oil hit a 14-year high of $125 per barrel. That was up from $75 at the start of year as traders anticipated that sanctions on Russia would cut supply. But as it became clear that--at least for now--oil supplies would not be seriously disrupted, oil prices gave back partial gains, a move cemented on the last day of the quarter by President Joe Biden’s announcement that the U.S. would be releasing its oil reserves to help lower gas prices. Oil ended the quarter down nearly 20% from its high at $100.28. That was still a 33% jump and the third-largest quarterly gain in a decade. Natural gas futures rose 51% to $5.64 per million British thermal units after the European Union said it would cut back on Russian gas imports. About 40% of Europe’s supply comes from Russia. Wheat futures jumped after Russia’s invasion of Ukraine. Both countries are among the top five exporters of the commodity in the world. Prices reached an all-time high of $14.25 a bushel on March 7 after rising 85%, but moderated during the last few weeks of the quarter and ended up 31% to $10.06 per bushel." " MY COMMENT That is a pretty TELLING list above. Yet I consider it significant that in spite of all the above....the markets are now showing good strength and are close to turning positive for the year. Why is this happening? Well ALL the items above are OLD NEWS. These issues have all been known by the markets for 6-12 months now. Even Ukraine is now an old issue for the markets. EVERYTHING above is fully baked in to the markets. Much of this "stuff" is fully considered in stock prices and has been anticipated by business many many months ago.
Since I am into charts at the moment........not in a technical way......here is another little article that I like. S&P 500 Is Defying Skeptics on Run Toward Record, Charts Show https://finance.yahoo.com/news/p-500-defying-skeptics-run-083303426.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- A hawkish Federal Reserve, high inflation, war and pestilence are among the reasons to doubt the U.S. stock market rebound. Technical studies suggest such naysayers risk missing out on a run to a record high. Skeptics are presently fixated on proliferating inversions across the Treasury yield curve, where shorter-term yields exceed those for longer tenors. Some view that as a harbinger of an economic downturn that will hurt stocks. While bear markets tend to follow eventually after some inversions, there are “strong returns from the point of yield curve inversion to the eventual stock market top,” wrote Julian Emanuel, chief equity strategist at Evercore ISI. He was referring to last week’s climb in the U.S. two-year yield above the 10-year for the first time since 2019. Wall Street strategists remain divided on whether the S&P 500 index is in a bear market rally -- and, if so, how long it will last. The gauge is up about 9% from a low hit after Russia invaded Ukraine, leaving it about 5% off its record from early January. The charts below track some key technical trends. Dodging the Bear The S&P 500 index undid a so-called bearish head and shoulders pattern by rallying past an early February high of 4,595 -- part of the right shoulder in the chart. This technical study suggests a target of around 5,200 is feasible, which would top the early January record close of just over 4,796. If, in fact, that January all-time high remains intact, it “would mark the first stock market peak prior to inversion in 40 years,” Emanuel said. NYSE Composite Last week, 80% of the roughly 2,000 constituents of the NYSE Composite Index -- which spans all common stocks listed on the New York Stock Exchange -- traded above their 20-day averages. That’s happened 56 times in the last decade, and over the subsequent 100 days after these occurrences, the gauge climbed an average 6%, according to data compiled by Bloomberg. Tech Jump The technology-heavy Nasdaq 100 index is also flashing some positive signals. In mid-March, it rallied more than 10% over four trading sessions. Four-day gains of at least 10% are rare, occurring 12 times in the last two decades, according to data compiled by Bloomberg. Over the subsequent 100 days, the index returned an average of 8%." MY COMMENT Sorry you will have to look at the article to see the charts. I highlighted some of the "Technical" stuff above for Emmett. I personally dont believe in or use Technical Analysis. BUT......regardless.....the SP500 and the markets in general are continuing to defy the experts.....as usual. The FACT that the experts can not predict the markets over the short or long term simply proves that it is not possible for anyone to do. Although i can accurately make one prediction about the markets......they will be up over the long term.
I love the news today that Elon Musk has taken a nearly 10% stake in Twitter. He is exactly the sort of person that should be controlling that company. What a breath of fresh air.
