The Long Term Investor

A perfect RED sweep in my account today....every position down for the day. Today was a perfect storm of news items and economic items DOOMING the markets. On top of that.....I got beat by the SP500 by 0.97%.

 

For the past week or so I have been seeing articles talking about how......."this or that".....is lessening the odds of the FED backing off from raising rates for as long as was expected.

WTF.....are they talking about. I dont know or see anyone that thinks the FED is going to stop raising rates after a short time. They are going to be on a tear for about TWO YEARS. I have NO CLUE what these writers are talking about.

This is some DELUSIONAL story line that has now taken on a life of its own.

 

Well so much for two GREEN weeks in a row.

DOW year to date (-9.46%)
DOW for the week (-0.94%)

SP500 year to date (-13.80%)
SP500 for the week (-1.20%)

NASDAQ 100 year to date (-23.11%)
NASDAQ 100 for the week (-1.05%)

NASDAQ year to date (-23.22%)
NASDAQ for the week (-0.98%)

Russell year to date (-16.13%)
RUSSELL for the week (-0.23%)

WHATEVER. We move on to a new week and a chance to relax for the weekend. As for me.....I have two shows this weekend and three next weekend.......got to make some money somewhere.

As usual.....TGIF. Hang in there boys and girls.....or however you see yourself. I continue to be fully invested for the long term as usual.......since I invest as a SIMPLETON.

 

Personally......I BLAME ZUKODANY for today.....he just had to post those charts of classic BEAR MARKETS.

 

Here is a little more on what I was saying yesterday.

What can CEOs see that we're missing?: Morning Brief

https://finance.yahoo.com/news/morning-brief-june-4-2022-110011049.html

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

"The topic du jour in the world of business is: What are top execs seeing that others are missing?

If you've been following the news, you are likely familiar with the headlines: Tesla (TSLA), Coinbase (COIN), and Meta Platforms (FB) are just some of the companies that have announced layoffs or hiring freezes in recent weeks.

And these stories come as Jamie Dimon — the JPMorgan (JPM) boss who occupies a spot not far behind Warren Buffett as the "business leader most people listen to" — said this week that a "hurricane" is headed for the US economy.

But while some big name companies are announcing changes in hiring plans and others lower their guidance, that doesn't necessarily mean each of these stories adds up to one clean, overarching narrative. At the same time, it's hard to see these events not telling us something larger about the state of the global economy.

And it's not as if these warnings come amid markets floating innocently by, as each of the major U.S. indexes is down more than 9% so far this year.

A breakdown of each story, however, might lead us towards a more complicated — though maybe fuller — version of the truth.

Dimon changes the temperature
Speaking at an industry conference on Tuesday, Dimon said: "Right now, it's kind of sunny, things are doing fine. Everyone thinks the Fed can handle this.”

He continued: “That hurricane is right out there down the road, coming our way. We just don't know if it's a minor one or Superstorm Sandy...or Andrew or something like that. And you got to brace yourself."

As the CEO of the largest bank in the country, we should also consider what a "hurricane" likely looks like to Dimon: a slowdown in lending and a rise in defaults. And with the Federal Reserve raising interest rates — and thereby tightening financial conditions — to slow inflation, the root of Dimon's concern is plain to see.

Musk's multiple memos

In the world of Elon Musk, of course, there is always more than just one thing going on.

The world's richest man is currently in the middle of his purchase of Twitter (TWTR), which no doubt is taking plenty of his time and attention.

But Musk's email to Tesla staff on Thursday that suggested 10% of salaried workers are on the chopping block follows an earlier statement that Tesla's staff needed to get back to the office.

"Everyone at Tesla is required to spend a minimum of 40 hours in the office per week," Musk wrote in an email, according to Reuters. "If you don't show up, we will assume you have resigned."

The pressure is clearly on at Tesla.

Grouping Tesla with "tech," however, also somewhat mis-categorizes an electric carmaker that is a manufacturing company with a global footprint. The cars they build happen to be loaded with technology, and the valuation investors assign to the stock looks more like Netflix (NFLX) than it does Ford (F).

The world that Elon Musk is dealing with, then, is one where China — Tesla's second-largest and fastest-growing market — is just reopening from harsh COVID-related lockdowns. Musk also sees multi-decade highs in inflation hitting not only US consumers but those in Europe as well. All this while rivals like Ford and GM (GM) announce continued investments in ambitions to electrify their fleets. Amid these pressures, Tesla shares have fallen over 30% since early April.

No wonder Musk has a "super bad feeling."

Coinbase cautions

That brings us to Coinbase, a story that is straightforward when we look at a chart of the company's stock this year — shares are down 70%.

The pressures facing Coinbase are two-fold.

The crypto industry at-large now agrees we've entered the latest crypto winter, and that the company is feeling pressure amid this event should not come as news to investors: Coinbase warned the market about these cycles in its S-1 filed last year.

Second, the crypto slide comes as investors have broadly cooled on companies that went public in 2021.

With interest rates rising — and just ask Buffett what this means for valuations — investors have broadly judged that valuations awarded in public debuts last year were inflated. Investors are choosing to discount stocks first and ask questions about the business later.

On the first issue, the fix for crypto winter is time. Or as Coinbase wrote in its S-1 last year: "We believe that we are in the early stages in the development of the cryptoeconomy. While we have grown rapidly, our growth has not been linear. Instead, it has come in waves aligned with crypto asset price cycles which tend to be volatile and draw new customers, investment, and developers into the ecosystem, and typically lead to higher Trading Volume and Monthly Transacting Users, or MTUs, on our platform."

On the second issue, Coinbase is learning a lesson all companies learn after they go public: Success has many masters.

Public market investors are often quick to reward companies for raising their forecasts by a few percentage points — and just as quick to punish expectations lowered by the same magnitude. From the outside, these changes can appear whimsical, nonsensical, or worst of all, irrational.

In exchange for liquidity, public companies subject their business to daily judgment from the market. And sometimes these judgments are harsh. And sometimes these harsh judgments can last for years. Though sometimes, these judgments send shares "to the moon." All is fair game in modern markets.

As Coinbase's chief people officer L.J. Brock wrote this week while announcing the company's decision to rescind already-accepted job offers: "This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas."

And the market's message to Coinbase right now is that it does not believe the company's highest-priority areas are adequately growing right now.

The future, out of focus

In a few hundred words, then, we see how multi-faceted the challenges facing executives are right now. To preserve our collective sanity, we'll refrain from going through these issues in detail for a few thousand more.

We can see why it might be hard for investors or executives to accept data like we got on Friday that suggests the labor market — and in turn the US economy — is as strong as we've seen in years. And understand why folks would bristle when economists call these corporate proclamations a "misleading" read on the recovery.

Moreover, the world according to a few companies is still not the world according to all — or even many.

But what these CEOs see today is a world in flux, with developed markets battling inflation for the first time in decades, a land war in Europe stressing global energy markets, and a pandemic that continues to snarl supply chains.

There's an old cliché that markets hate uncertainty, but really it is executives that dislike shaky forecasts.

So what CEOs see today is ultimately the same thing CEOs see at all points in time: the fullest picture of the world offered by their business. And the pictures are getting blurry.

The details of these outlooks always differs. The current moment is no different. But the out-of-focus picture that the business climate is spitting back looks similar to execs across industries today.

To which we offer a business-centric version, perhaps, of Tolstoy's famous line: "Every economic expansion is alike, but every economic slowdown is foreboding in its own way.""

MY COMMENT

Interesting......the article skirts around and NEVER answers the question in the headline.

What can they see:

1. A world wide energy crisis.......with no end in sight and wind, solar, etc, etc......will not help in the slightest.

2. Government that is focused on every fantasy issue in the book and doing NOTHING to solve ANY of the actual issues that should be front and center.......baby formula, modern monetary theory madness, the totally screwed up supply chain, our "former" energy independence, inflation caused by giving away massive amounts of money and over stimulating the economy, massive anti-business government regulation, anti-business policies, environmental insanity, the politicization of every imaginable issue, a senile president, etc, etc, etc.

3. Employees that dont want to work.....or be accountable to their employer.....in person.

4. The FED pushing us into an economic crash.

5. The entire economy.....particularly jobs and supply chain in crisis and totally distorted with NOTHING being done to deal with any of it.

6. A delusional focus on wanting to TAX the most productive people in the country more.....when we are probably in the middle or beginning of a recession. Exactly the opposite of what actually works to create a booming economy......lower taxes.

I could go on, and on, and on. The bottom line as hard nosed business people......they can NOT afford to live in FANTASY-LAND. They cant wear rose colored glasses. They have to see REALITY and they are. They can either do nothing and pretend everything is going to be fine......or.....they can position their companies for the WORST CASE SITUATION. There is little downside to doing this positioning. If they are wrong......no harm no foul.

 

Here is some info that should be the basic foundation for anyone starting out in the investing and personal finance world.

Brokerage Account vs. IRA: Which Should You Invest In?

https://money.usnews.com/investing/...age-account-vs-ira-which-should-you-invest-in

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

When building a road map for retirement, individual retirement accounts, or IRAs, and brokerage accounts are two investment tools that can be used to save money and grow your nest egg.

You may be in a situation where your employer doesn't offer a 401(k) or you've maxed out your 401(k) and are considering other options, such as an IRA or a brokerage account with unique features that may benefit your overall investing strategy.

Each account has different purposes. Broadly speaking, a brokerage account is for investing in the stock market, while IRAs focus on retirement planning.

The different tax treatments of each type of account are what can ultimately sell an investor on one over the other, given that the money will be subject to taxation at some point. Here's what you need to know about IRAs and brokerage accounts to help you invest for the long term:

• What is an IRA?
• What is a brokerage account?
• Pairing a brokerage account with an IRA.

(I will NOT BOLD any of the below since it is ALL important basic information)


What Is an IRA?

An IRA is an investment vehicle that offers certain tax advantages for your retirement savings. It allows your retirement money to compound in growth, and contributions are not taxed until you make a withdrawal. This means earnings in your traditional IRA account can grow tax-deferred. You won't pay taxes on your investment returns at the current tax rate, but rather at the tax rate at the time the money is withdrawn.

For IRA accounts in 2022, total contributions cannot be more than $6,000. Account holders who are 50 or older can make contributions up to $7,000. Apart from a traditional IRA, there are other types of IRAs:

Roth IRA. With a Roth IRA, you make after-tax contributions. So earnings grow tax-free and you don't pay taxes on your withdrawals, as long as you are 59½ or older and have held the account for five years or more. This allows you to take full advantage of compounding growth over time.

SEP IRA. A Simplified Employee Pension IRA is a tax-deferred retirement plan for those who are self-employed. This is different than a Savings Incentive Match Plan for Employees, or SIMPLE IRA, which gives employees and employers the chance to contribute to the employee's traditional IRA.

There is no income limit for a traditional IRA, although there are contribution limits that depend on income. For a Roth IRA, investors can only contribute the full amount if their modified adjusted gross income is less than $129,000 if filing as a single taxpayer or $204,000 if married and filing jointly for tax year 2022. Brokerage accounts have no restrictions on contributions.

If you wish to withdraw money from your IRA, you may incur withdrawal penalties when the money is taken out too early. In general, with a traditional IRA, you have to wait until the age of 59½ to withdraw money without a penalty, with certain exceptions. Otherwise, you may incur a 10% penalty along with federal and state taxes. At age 59½, you can start to withdraw money from your IRA with no penalties but are subject to taxes that may be due.

You can open an IRA with a bank or a brokerage company. Once you open your IRA, be sure to choose investments for your contributions. You can choose mutual funds, exchange-traded funds or individual securities, among many other investments.

"You can usually invest in the same securities in your IRA that you can in a taxable brokerage," says Nikki Dunn, a certified financial planner based in Houston. Dunn explains that this gives people a wide array of investment options while taking advantage of tax rules.

Choose investments that fit your investor profile, risk tolerance, time horizon and overall investing goals. By contributing to your IRA on a consistent cadence – either monthly, quarterly or annually – this tax-advantaged retirement account will likely appreciate over time.

You can open an IRA with any starting amount. But the investments you choose for your account, like mutual funds offered by particular brokerages, may require a minimum deposit.

What Is a Brokerage Account?
If you invest in the stock market, a standard brokerage account is a necessity. A brokerage account is an investment vehicle that allows investors to access stocks; bonds; exchange-traded funds, or ETFs; and many other assets they can buy and sell through a brokerage.

Investments are held in the brokerage account for the long term, so the value of the assets grows over time. A distinct advantage brokerage accounts have over other investment accounts is that they allow flexibility in the types of investments the account holder can purchase. Apart from domestic stocks, you can invest in some international stocks or publicly traded companies linked to commodities like gold and silver.

When thinking about what investments to choose in your brokerage account, retail investors need to consider a few things, including how long the money will be invested and their ability to tolerate risk when the markets get volatile, says Nancy Anderson, regional planning specialist at Key Private Bank in Park City, Utah.

"Equities provide the best long-term growth over time," Anderson says, referring to stocks. That said, she notes that it's easier to get diversification and, over the long term, better results from a portfolio composed of mutual funds or ETFs.

Brokerage accounts are taxable accounts, but they can offer some tax flexibility. Generally, investors seek a return on their invested capital by purchasing investments through their broker that they hope will increase in value. Investors can sell them at a later date and generate profits.

When you sell securities at a profit, you are then charged capital gains tax. You will also pay taxes on dividends or interest income. Depending on the type of investments and the length of time they are held, capital gains can be taxed at varying rates. Short-term gains, or gains on investments held for less than a year, are taxed as ordinary income. Long-term capital gains, those on investments held for at least a year, are taxed at a lower rate, currently 0%, 15% or 20%, depending on your income.

Brokerage accounts are taxable accounts. This means that while there are no tax benefits that come with having them, compared with tax-advantaged accounts such as IRAs and 401(k)s, they do have other specific advantages. For example, brokerage accounts have no fees associated with opening the account and no contribution limits. You can have more than one brokerage account, and they allow investors to deposit and withdraw money at any given amount in any given period with no penalties for withdrawals.

"Accessibility is a double-edged sword, since funds could be withdrawn for any reason," Anderson says.

Anderson notes that since investors must pay taxes on underlying investments in the account, they must be careful about what investments they hold in their brokerage accounts.

"The key is strategizing on ways to minimize the taxes in the brokerage account each year by choosing tax-favored investments, harvesting losses against gains and aiming for the tax-favored, long-term capital gains tax treatment," she explains.

The rise of robo advisors has made opening a brokerage account easier than ever. Robo advisors allow you to easily invest and track your investments to see how you're reaching your goals. You can either customize your own portfolio, or the algorithm will tailor an investment plan for you and will manage your investment portfolio regularly, based on answers you provide to questions the robo advisor asks about your preferences.

Brokerages provide full-scale online tools and resources with which investors can do thorough analysis by accessing financial reports, statements, analyst recommendations and more.

Pairing a Brokerage Account With an IRA
Investors don't necessarily have to choose between a brokerage account and an IRA; anyone can have both. Each account has its purposes, involves different strategies and yields different results.

"Having both an IRA and brokerage account allows you to focus on saving for retirement, along with shorter-term financial goals, like buying a house or a car," says Mindy Yu, director of investments at Stash, a personal finance and investing app.


In both cases, Yu says, you're helping to put your money to work for you – via the potential of earning a return on your investments, as well as staying ahead of inflation.

"We always recommend investing regularly, thinking long term and maintaining a diversified portfolio," Yu adds, regardless of the type of investment account. "These three tips can help you minimize risk and better position you to hit your unique financial goals.

According to Anderson, "Since a taxable brokerage account and an IRA tax-deferred retirement account each has its benefits and drawbacks, pairing the two can be a perfect solution for investors."

When your focus is saving for retirement, IRAs may be the better option over brokerages, considering their tax advantages. "A taxable brokerage account won't give you the tax deferral or even tax advantages that an IRA does," Dunn says.

Experts say you may want to start by first opening an IRA and then investing in a taxable brokerage account.

Consider opening a brokerage account when you want to contribute more money than an IRA allows. The more money invested, the greater the opportunities for it to grow over the long run. Keeping up with this practice can result in a more comfortable transition to retirement.

Takeaway

You may be more comfortable investing for the long term with a retirement vehicle such as an IRA or 401(k), but investors who have a strategy for reaching certain goals can justify using both an IRA and a brokerage account – to take advantage of the benefits both types of accounts provide."

MY COMMENT

Those of us that have been doing this stuff for a long time take our knowledge for granted. We tend to be out of touch with the fact that a large percentage of people dont have even the most basic investing knowledge. It is not their fault....it just means.....that in dealing with the struggle of daily life and family...they have never had the time or luxury to learn about finances and investing.

I come into contact with a wide swath of people daily. It makes me realize how rare it is for someone to have this sort of knowledge. the information above is a good basic starting point. The next step is to take advantage of the internet and expend on the topics above.

 

Short and sweet.......as told by CNBC.

Here’s the email Elon Musk sent all Tesla employees about 10% head count reduction

https://www.cnbc.com/2022/06/03/her...t-all-tesla-employees-10percent-job-cuts.html

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

"Key Points

• Tesla is cutting 10% of salaried employees CEO Elon Musk wrote in an email to all employees there on Friday.
• Tesla shares dropped 8% on news of the head count reduction at the company.
• On Friday, President Joe Biden was asked about Musk’s negative economic outlook and said Tesla may be cutting back but Ford and others were ramping up.

Tesla CEO Elon Musk said in an email to all employees at the electric vehicle maker on Friday that the company will cut 10% of salaried workers and will instead rely on more hourly workers.

Shares of Tesla dipped 9% on Friday by midmorning after Reuters reported on an earlier email Musk had sent to executives about his plans to cut the company’s workforce and expressing a “super bad feeling” about the economy.

In its year-end financial filing, Tesla said it employed 99,290 people around the world as of the end of 2021.

President Joe Biden was asked about Musk’s negative economic outlook on Friday after news of Tesla’s head count reduction was out.

Biden said that while Musk is talking about economic fears and reductions, Ford is increasing its investment in building new electric vehicles, with 6,000 new, union employees in the Midwest.

The president also lauded the former Chrysler Corp., Stellantis, for making similar investments in electric vehicle production in the U.S. and Intel for adding 20,000 new jobs in computer chip manufacturing.

“So, you know, lots of luck on his trip to the moon,” Biden quipped.

Here’s the new email Musk sent to all Tesla employees as transcribed by CNBC:

To: Everybody
Subject: Headcount Reduction
Date: Friday, June 3, 2022

Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas. Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.

Elon"

MY COMMENT

Not much more to say. This is called leadership. Running a large company or for that matter a small business is NOT a popularity contest.

As to the "trip to the moon".....I think that is actually Mars. Thank goodness for SpaceX. Without that company the USA would have no space program.

 

I like this little article. I think this is a good way to look at the next few years......although it does not really come to a conclusion and is very general.

A paradigm shift has begun in markets, says Morgan Stanley’s Ted Pick. Here’s what to expect

https://www.cnbc.com/2022/06/05/mor...hift-has-begun-in-markets-what-to-expect.html

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

"Key Points

• Global markets are in the beginning of a fundamental shift after a 15-year period defined by low interest rates and cheap corporate debt, according to Morgan Stanley co-President Ted Pick.
• The transition from the economic conditions that followed the 2008 financial crisis and whatever comes next will take “12, 18, 24 months” to unfold, he said last week at a New York financial conference.
• Out of the ashes of this transition period, a new business cycle will emerge, Pick said.

Global markets are in the beginning of a fundamental shift after a nearly 15-year period defined by low interest rates and cheap corporate debt, according to Morgan Stanley co-President Ted Pick.

The transition from the economic conditions that followed the 2008 financial crisis and whatever comes next will take “12, 18, 24 months” to unfold, according to Pick, who spoke this week at a New York financial conference.

“It’s an extraordinary moment; we have our first pandemic in 100 years. We have our first invasion in Europe in 75 years. And we have our first inflation around the world in 40 years,” Pick said. “When you look at the combination, the intersection of the pandemic, of the war, of the inflation, it signals paradigm shift, the end of 15 years of financial repression and the next era to come.”

Wall Street’s top executives making the rounds at financial conferences this week delivered dire warnings about the economy, led by JPMorgan Chase CEO Jamie Dimon, who said that a “hurricane is right out there, down the road, coming our way.” That sentiment was echoed by Goldman Sachs President John Waldron, who called the overlapping “shocks to the system” unprecedented. Even regional bank CEO Bill Demchak said he thought a recession was unavoidable.

Instead of just raising alarms, Pick — a three-decade Morgan Stanley veteran who leads the firm’s trading and banking division — gave some historical context as well as his impression of what the tumultuous period ahead will look and feel like.

Fire and Ice
Markets will be dominated by two forces – concern over inflation, or “fire,” and recession, or “ice,” said Pick, who is considered a front-runner to eventually succeed CEO James Gorman.

“We’ll have these periods where it feels awfully fiery, and other periods where it feels icy, and clients need to navigate around that,” Pick said.

For Wall Street banks, certain businesses will boom, while others may idle. For years after the financial crisis, fixed income traders dealt with artificially becalmed markets, giving them less to do. Now, as central banks around the world begin to grapple with inflation, government bond and currency traders will be more active, according to Pick.

The uncertainty of the period has, at least for the moment, reduced merger activity, as companies navigate the unknowns. JPMorgan said last month that second-quarter investment banking fees have plunged 45% so far, while trading revenues rose as much as 20%.

“The banking calendar has quieted down a bit because people are trying to figure out whether we’re going to have this paradigm shift clarified sooner or later,” Pick said.

In the short term, if economic growth holds up and inflation calms down in the second half of the year, the “Goldilocks” narrative will take hold, bolstering markets, he said. (For what its worth, Dimon, citing the Ukraine war’s impact on food and fuel prices and the Federal Reserve’s move to shrink its balance sheet, seemed pessimistic that this scenario will play out.)

But the push and pull between inflation and recession concerns won’t be resolved overnight. Pick at several times referred to the post-2008 era as a period of “financial repression” — a theory in which policymakers keep interest rates low to provide cheap debt funding to countries and companies.

“The 15 years of financial repression do not just go to what’s next in three or six months… we’ll be having this conversation for the next 12, 18, 24 months,” Pick said.

Less than zero

Low or even negative interest rates have been the hallmark of the previous era, as well as measures to inject money into the system including bond-buying programs collectively known as quantitative easing. The moves have penalized savers and encouraged rampant borrowing.

By draining risk from the global financial system for years, central banks forced investors to take more risk to earn yield. Unprofitable corporations have been kept afloat by ready access to cheap debt. Thousands of start-ups have bloomed in recent years with a money burning, growth-at-any-cost mandate.

That is over as central banks prioritize the battle against runaway inflation.

The impact of their efforts will touch everyone from credit-card borrowers to employees of struggling corporations to the aspiring billionaires running Silicon Valley start-ups. Venture capital investors have been instructing start-ups to preserve cash and aim for actual profitability. Interest rates on many online savings accounts have edged closer to 1%.

Remember 2018?

But such shifts could be bumpy. The last time the Fed attempted quantitative tightening, back in 2018, odd things happened in stock, foreign exchange and oil markets. Less than a year after their campaign began, the world’s major central banks lost their nerve and halted QT programs amid slowing growth.

Some observers are worried about Black Swan-type events happening in the plumbing of the financial system, including the bursting of what one hedge fund manager called “the greatest credit bubble of human history.” Dimon sees “at a minimum, huge volatility” as the major purchasers of government bonds may not have the ability or appetite to step in.

Out of the ashes of this transition period, a new business cycle will emerge, Pick said.

“This paradigm shift at some point will bring in a new cycle,” he said. “It’s been so long since we’ve had to consider what a world is like with real interest rates and real cost of capital that will distinguish winning companies from losing companies, winning stocks from losing stocks.”

MY COMMENT

We are certainly entering a new time phase for investors. The next 2-3 years and going to be very interesting. Very OPAQUE.

It is impossible to know how specific companies will fare.......so to me......QUALITY is the name of the game. Proven businesses. I have confidence that investors will continue to do well......as usual....over the longer term. If you have TIME on your side......the short term or even medium term is IRRELEVANT.

I dont read the above as negative commentary. Simply a good observation.

 

WELL.....Amazon starts trading at their new price tomorrow. We will all have way more shares and about the same money in those shares.

HERE is what we are going to face this next week:

Inflation, Fed blackout, CEO doom and gloom: What to know this week

https://finance.yahoo.com/news/cpi-...d-gloom-what-to-know-this-week-192322372.html

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

"Inflation will take top billing in the week ahead for the first full trading week of June.

Investors will get the latest gauge on how quickly prices are rising across the U.S. when the Bureau of Labor Statistics releases its latest Consumer Price Index Friday.

The measure will come as Federal Reserve policymakers hasten to rein in near 40-year-highs in inflation with interest rate hikes — while stoking worries the measures may temper economic growth.

Underscoring that likeliness – and the possibility that the Fed’s rate-hiking campaign will continue beyond the next two meetings – was Friday’s May employment data.

The Labor Department’s jobs report reflected a slightly slower pace of hiring from April, with 390,000 jobs added to the U.S. economy in May, though overall job growth remains robust on a historical basis.

“Overall, the jobs report reinforces the strength of the overall economy, but also indicates the Fed still has their work cut out for them and may need to continue 50 basis point rate hikes through the autumn months," Charlie Ripley, senior investment strategist at Allianz Investment Management said in a note.

These concerns led all three major indexes lower Friday to eke out another weekly loss after a temporary rally tailed off in a volatile holiday-shortened four days of trading.

“The jobs release sent affirmation to investors that the recovery continues in full force,” Peter Essele, Head of Portfolio Management at Commonwealth Financial Network, said in a note. “The flip side to that coin, however, is that inflation will continue to be an issue due to strong demand from consumers, wage pressures, and rising commodity prices.”

The headline CPI index is expected to have climbed in May but stay flat from last month’s reading on a year-over-year basis. Economists forecast the broadest measure of CPI rose by 8.3% in May, on par with April’s advance. Over the month, CPI is expected to show an increase of 0.7%, up from 0.2% last month.

The core measure of the index, which excludes volatile food and energy prices, likely decelerated to 0.5% on a monthly basis from 0.6% in April, and 5.9% annually from 6.2% the prior month.

“The rate of inflation moderated a bit in April and we’ll need to see this followed up by more slowing in May to underscore the notion that inflation has peaked,” Bankrate Chief Financial Analyst Greg McBride said in emailed commentary. “Even then, it will take many months of more moderate price readings for the rate of inflation to come down in a meaningful way.”

That sentiment has been shared among Federal Reserve policymakers as of late, including Vice Chair Lael Brainard. On Thursday, the central bank’s now No. 2 official said signaled half-percentage-point increases in interest rates this month and next were likely, along with continued tightening afterward.

“Right now it’s very hard to see the case for a pause,” Brainard told CNBC in an interview Thursday. “We’ve still got a lot of work to do to get inflation down to our 2% target.”

Fedspeak will hit a lull as officials enter a blackout period ahead of their next policy-setting meeting, set to take place June 14-15. A half percentage point interest rate hike appears likely to be announced following this discussion.

Outside of Friday’s CPI print, investors are in for a light economic and earnings calendar next week, but volatility is expected to persist as Wall Street braces for tighter financial conditions and weighs a U.S. economy in limbo.

All while government data shows a sharp contrast from what some corporate leaders see ahead.

Tesla (TSLA) CEO Elon Musk warned of a "super bad feeling" about the economy, saying the company is expected to trim about 10% of jobs in an email to executives, Reuters reported Friday, while also motioning management to "pause all hiring worldwide."

The comments echo remarks from JPMorgan Chase (JPM) boss Jamie Dimon, who cautioned of a "hurricane" bearing down on the U.S. economy and a weaker outlook reported by tech bellwether Microsoft (MSFT), which more specifically cited foreseen disruptions from volatility in currencies.

Not all are convinced these warnings indicate an economy close to rolling over. As Greg Daco, chief economist at EY-Parthenon, told Yahoo Finance on Friday, May's jobs data suggests this drumbeat of doom and gloom ahead is "misleading" in the context of a still-growing labor market.

"While the economy will undoubtedly slow in the coming months, anecdotal evidence of hiring freezes and layoffs at tech companies is misleading with overall job openings still near record-highs and layoffs at record-lows," Daco said."

MY COMMENT

First......what planet do these people live on. This is what I was talking about the other day......people putting the TOTALLY DELUSIONAL idea out there that somehow the FED was NOT going to raise rates many, many times over the next two years. This is exactly the type of statement that I am talking about:

".....the possibility that the Fed’s rate-hiking campaign will continue beyond the next two meetings....."

I see this sort of stuff all over the financial media. This is simply DELUSIONAL and no one thinks this is what to expect. EVERYONE knows that there are going to be years of raising rates and many more hikes to come. In other words ALL YEAR this year and well into next year. The ONLY way this might not happen is if the FED.....chickens out.....after they tank the economy. There......is and was......NEVER any possibility that the FED was only going to rate hike for just a few meetings.

It is going to be ALL about inflation fro a long time to come in the media. I am tired of it already....but it is going to be hammered day after day. I really dont give the FED much chance to actually achieve anything with their rate increases. We are so far below normal rates and the issues causing inflation now are NOT going to be helped by raising rates. We have SQUANDERED our short lived energy independence........government has directly created the current shortages. We are seeing supply/demand driven increases in energy and every other part of the economy. Raising rates is not going to do much.

In the end......one to two years from now......it will be the incompetence of the FED tanking the economy.....that will bring down inflation. In addition as the year over year comparisons become easier.....that will help too.

ALL in all......a typical week ahead of us. Same issues as the last 6-12 months. Negative market direction.......with much volatility.

SO......I will continue to be fully invested as usual for the long term.