Here is the media take on the markets today. Stock market live updates: Stocks mixed, oil sinks as eurodollar parity remains focus https://finance.yahoo.com/news/stock-market-live-updates-july-12-114318003.html (BOLD is my opinion OR what I consider important content) "U.S. stocks were mixed in mid-morning trade as all eyes remained on currency and commodity markets following a drop in equity markets to kick off the week. Near 10:45 a.m. ET, the Dow was up 0.3%, the Nasdaq was down 0.3%, while the S&P 500 was down less than 0.1%. During Monday's trading session, the Nasdaq lost more than 2.2%. Overnight, the euro fell as low as 1.0004 against the dollar as all eyes remain on whether the currency will fall below parity — or a 1:1 ratio — with the dollar. In energy markets, crude oil futures were off more than 6% to trade below $98 a barrel as commodities remain under pressure amid investor fears of a global recession. Tamara Basic Vasiljev, senior economist at Oxford Economics, said in a note Monday that all of the financial easing seen in advanced economies worldwide has been undone by this year's surge in interest rates and decline in financial markets. In Vasiljev's view, however, the recent slide in commodities suggests inflation pressures may have peaked, which could ease financial conditions going forward. "Now that the commodity prices are falling again and inflation peak looks to be within reach it is likely that we are seeing the worst of financial conditions tightening," Vasiljev wrote. "If so, conditions worsening is dire but the level is still more in favor of [an] orderly slowdown rather than a recession." Elsewhere in markets, crypto was under pressure again on Tuesday morning, with bitcoin (BTC-USD) falling below $20,000 once again after the world's biggest cryptocurrency enjoyed its best week since last fall. This week also marks the start of second quarter earnings season, with PepsiCo (PEP) the first major corporation to post results for the quarter before Tuesday's market open. The beverage and snack giant reported sales that beat estimates and raised its forecast for the full-year. On the move Walmart (WMT) and electric vehicle maker Canoo (GOEV) announced a deal Tuesday morning that included a deal for the retailer to buy 4,500 electric vehicles with an option to purchase an additional 100,000 vehicles. Shares of Canoo more than doubled in early trade following this announcement; Canoo shares had been down 70% this year through Monday's close. Shares of ServiceNow (NOW) fell as much as 11% in morning trade after analysts said comments from CEO Bill McDermott last night on Mad Money suggested a more downbeat outlook for the software business. Peloton (PTON) shares were up about 3% after the company said Tuesday it plans to stop all in-house bike production as the company attempts to turn around its business after the COVID-related boom." MY COMMENT Amazingly not a word about the inflation report that will come out tomorrow. A very strange article on the markets today. Perhaps the media is now......finally....getting worn out reporting the same old stuff over, and over, and over, and over. Nothing new is going on. We just continue with the same old issues. EARNINGS will be a big topic over the next couple of months. It will be interesting to see if they are ignored....especially if they tend to be positive.
I will say....at this point.....if we are in a recession....I believe it will be mild. I believe that we will simply linger about where we are right now in the economy and inflation. That does not mean that I believe it will be short. It is impossible over the short to medium term to know how long a recession will last. It could last for 6 months, it could last for two years. It will be over when we get to the point that the economic disruptions caused by the Covid shutdown are over......supply chain issues, labor issues, inflation issues, refusal to work issues, etc, etc.
Yes, there is so much crap out there to be aware of. I can't imagine how much money is lost on an annual basis to this sort of stuff. In todays investing world it is even more abundant than ever before. Your advice..."DO NOT INVEST" is an easy way to avoid some big time disappointment. I have worked a long time (still working) for my money and many of you have too. We are constantly fending off the government, freeloaders, and the type of shysters mentioned above. There is always somebody that wants what you have worked for....without the effort and sacrifice you have endured. I know before I invest in ANY company, I think about how hard I have worked to get that money in the first place. Is the company worth my hard earned money? Well, I am going to look at their history, their background, the successes and setbacks they have had, basically anything I can find about finances, and etc. I am going to learn what I can about them. They are going to have to "prove" to me they are worth the "true value" of MY MONEY. I did not get it freely handed to me and they are NOT going to get it freely handed to them.
UP, UP, UP, AND AWAY.......go the markets so far today....at this moment. Well.......mild gains....but after yesterday.....I will take it.
At this moment I am minimally green for the day. Amazon and Microsoft are holding me back today. I have five stocks UP an five stocks DOWN. Seems about like the market today......MILD.....so far. Actually I like it......a nice change from the first six months of the year with......relentless.......big down days. We actually seem to have turned a corner in the markets. But....before I get all carried away.....I will point out that e are going to see another -75% rate increase this month, as well as earnings start to come out and a nasty inflation report this week is expected. AND......the good thing is that all the above coming events are totally anticipated at this point.
Too bad that the markets could not hold onto the gains from earlier today. But....with the inflation data coming out tomorrow I suspect that very few traders including the AI traders and Quants, want to hold stocks after the close today. I ended the day moderate RED. Not too bad of a day all in all. I also got beat by the SP500 by 0.35%. I had 2 stocks that were green today......Apple and Honeywell.
Kind of a busy week for the market I suppose. There have and will continue to be some earnings reports, the Google split, the media frenzy over CPI and etc. As we sort through the countless reports and doomsday scenarios, I have noticed there is absolutely no shortage of people who will get interviewed on TV to offer their "predictions." I am no expert myself, but some of these people they use over and over...some of them I wouldn't take advice from to turn on/off a light switch. I won't call out the clowns, but some of these folks have run their own firms in the ground.
I like this article. My friend asked me this hard investing question… https://www.riskhedge.com/outplacement/my-friend-asked-me-this-hard-investing-question1/rcm (BOLD is my opinion OR what I consider important content) "“Are stocks cheap yet?” A friend asked me that the other day. It’s an important question because when the stock market is truly cheap, investors can load up on stocks with high confidence they’ll rise and generate big returns. That’s what happened in 2009 and 2020 for investors wise enough to recognize the opportunity… and brave enough to act on it. “Are stocks cheap?” is the type of question that should carry a simple “yes” or “no” answer. But it doesn’t. Today, we’ll peel back the layers to get to the bottom of it. By the end of the essay, you’ll know whether the stock market as a whole is cheap, which individual stocks are cheap, and what to do about it. What does “cheap” mean? Many folks think stocks trading for less than $5/share are cheap. In other words, they focus on the price per share. Let me make something clear… How much one share of stock costs has nothing to do with whether that stock is cheap or expensive. Compare Google with Tesla, for example. Google trades around $2,250/share. Tesla’s stock sells for roughly $700/share. This doesn’t mean Google is three times more expensive than Tesla. This might be obvious to you. But there are millions of novice investors who think this way. In fact, it’s the opposite. Google trades at 20X earnings. Tesla sells for 55X earnings. In other words, Tesla is nearly 3X more expensive than Google. A stock’s raw price per share tells you nothing about how cheap it is. To get a meaningful measure, you have to compare its price to how much earnings and profits it generates. That’s where valuation metrics like price-to-earnings (P/E) or price-to-sales (P/S) ratios come in. Are stocks cheap today based on P/E ratios? The S&P 500 traded at an average P/E of 16X over the past 25 years. In other words, investors have been willing to pay $16 for every $1 of earnings. Today, the S&P 500 trades at… 16X earnings. Based on this metric, stocks are averagely priced right now. This will likely shock a few investors. The S&P 500 dropped 20% over the past few months. Yet, stocks are “only” back to their long-term average valuation. This is because US stocks are falling from a great height. They reached their most expensive levels since the dot-com bust late last year. Should I buy cheap stocks? It’s a GREAT question. Most investors assume if they buy the market when it’s cheap, they’ll make the most money. And they’re right. For example, the S&P 500 traded at 9X earnings during the 2008 meltdown. It was the cheapest US stocks have been since the early 1990s. The brave investors who bought when everyone else was panicking made 85% gains over the next two years. The opposite is also true. Buying stocks when they’re expensive usually leads to lower returns. US stocks sold for a nosebleed 26X earnings in 2000. It’s a record that still stands today. Folks who bought the top waited seven years just to break even. Wall Street powerhouse JPMorgan ran the numbers on the S&P’s returns when it’s on sale versus when it’s pricey. When the S&P 500 traded at a low P/E ratio, it handed out 18% over the next year, on average. That return dropped to an average of just 3% when earnings multiples were higher. In other words, it pays to buy stocks when they’re on sale. But what’s true for the stock market isn’t true for individual stocks… Cheap stocks aren’t always good investments. When a stock is cheap, there’s usually a good reason for it. Its business may be getting disrupted. Its revenues could be shrinking. Take automaker Ford (F), for example. It trades at around 4X earnings today. In fact, the stock has traded at a rock bottom valuation for years. Yet, Ford stock has gone nowhere since 1997! Contrast Ford to cloud computing powerhouse Salesforce (CRM), which sells at around 140X earnings today. It’s been among the most highly valued stocks for years. Over the past decade, Salesforce handed investors 5X their money. Buying the whole market while it’s cheap is a winning strategy. Buying individual stocks while they’re cheap might be a winning strategy if you pick the right stocks. But it also may leave you with a portfolio of mediocre stocks. To know if stocks are truly cheap, you must understand how two powerful forces influence the stock market… The first powerful force is interest rates. Superinvestor Warren Buffett called interest rates “the most important item” for stock prices. He’s compared them to gravity, saying: “Interest rates are to asset prices… like gravity is to [matter].” In short, when rates are low, stock valuations can go to the moon. But rising rates pull valuations back down to earth. When my friend asked if stocks were cheap, I told him it depends on where interest rates go from here. Take a look at this table. It shows the 10-year average P/E ratio for US stocks (called the CAPE ratio) based on the US 10-year Treasury yield. As you can see, the higher the yield, the lower the CAPE ratio: The CAPE ratio is a longer-term measure that doesn’t drop quickly when the stock market drops. Today it’s about 28. Based on today’s 10-year Treasury yield of around 3%, US stocks are still a bit overvalued. The second powerful force is inflation. Without getting too into the weeds… stocks hate high inflation. Stocks tend to perform well when inflation is 1%–3%. They perform okay when inflation is up to about 6%. After that, performance falls off a cliff. You can see this relationship in the chart below. In short, when inflation runs hot, stocks get cheap. Going by last month’s annual inflation rate of 8.6%, stocks are overvalued today. “what does all this mean for my money?” Stocks as a whole have gotten cheaper over the last few months… but they’re not a screaming “buy” yet. But remember: what’s true for the stock market isn’t necessarily true for individual stocks. Some great companies are trading at their cheapest levels in decades and, in some cases, ever. Take Amazon, for example. It’s in the midst of its sharpest dip since 2006. The stock is trading where it was in September 2018, despite Amazon’s business being twice as large. Amazon recently traded at its lowest P/E ratio since the depths of the financial crisis. Meta (Facebook) and Google are selling for their cheapest valuations in history. In fact, when measured by free cash flow, they’re now trading at lower valuations than Coca-Cola, a 120-year-old soda maker that barely grows. That’s never happened before… Computer chip stocks—my slam-dunk investment of the decade—are now as cheap as most of them have ever been. These are the kind of investment opportunities I’m scaling into today. You should take a hard look at some of these stocks too." MY COMMENT I like this message. But, cheap is in the eye of the beholder. Personally if I was trying to time an entry into the current market.....I would consider it time to buy if I could get in within 10% of the bottom. Are we within 10% of the bottom now? Who knows.
Knowing how government and other things work.....I would guess that many people get illegal advance warning of data like the CPI. Here is one expectation of where we are headed. As a fully invested all the time investor......I really dont care what the reading is. June CPI preview: Inflation likely surged to new 40-year high last month https://finance.yahoo.com/news/june...to-new-40-year-high-last-month-215233961.html (BOLD is my opinion OR what I consider important content) "U.S. consumer prices likely accelerated again last month to the hottest print of the current inflation cycle. The Bureau of Labor Statistics' June Consumer Price Index (CPI) is expected to reflect a year-over-year increase of 8.8%, according to estimates from Bloomberg. If realized, June data will show prices climbed at a faster pace than the prior 40-year high of 8.6% in May. The continued surge in inflation across the U.S. economy is likely to be elevated by high food costs and record gasoline prices, which topped more than $5 per gallon at the pump last month. Since this recent peak, however, commodity prices have been under pressure with crude oil falling more than 8% to below $96 a barrel on Tuesday. “Core” CPI, which excludes the volatile food and energy components of the report, is projected to rise 5.7%, according to consensus estimates compiled by Bloomberg. This would mark a slowdown from the 6% jump seen in May. "The data-driven Federal Reserve will be picking apart June’s CPI release to see if last month’s broad-based inflation increases are repeated," MSCI Head of Portfolio Management Research Andy Sparks said in an emailed note Tuesday. "The Fed’s nightmare is that inflation accelerates and is not limited to energy, but carries over into the other components of the consumer’s basket." June's figures will be pivotal in guiding central bank officials on their next policy move as they tighten monetary policy in efforts to restore price stability. The U.S. central bank is expected to raise interest rates by another 75 basis points at the next policy-setting meeting on July 26-27. Meanwhile in Washington, the White House on Tuesday warned in a call with reporters that June’s inflation numbers were likely to be “highly elevated” but downplayed the weight of last month’s figure, pointing to gas prices that have retreated from their highs. “June CPI data is already out of date,” White House Press Secretary Karine Jean-Pierre said in Monday’s press briefing." MY COMMENT The final few sentences in the above article are totally irrelevant. I dont care what the government has to say about anything to do with the economy......they are clueless. I have been hearing that the CPI number may hit 9%. Perhaps it will. As I said I really dont care......other than to boost my Social Security. So.......give me 9% or higher.....I welcome it. I do believe that any data from June is SEVERELY outdated. There have been massive decreases in various commodities since than including oil. Lets just get the numbers out there and move on.
Yes, when the report and many other "reports' get tossed about they will beat it into the ground. Then this administration and policy makers...who knows what they are doing. Do they even know? I personally would like to see some fundamental solutions. A real effort to do something. Just pick one of our many problems and get to work....is that too much to ask? Anyway, on the piece above about "cheaper stocks," I have added a little so far during this event. Nothing large, but I have continued to add a bit. Will probably do some more as it goes along, but I probably would have done so anyway. I seen a little article the other day that mentioned most people rush to buy any item when it's on sale...except for stocks. People love a sale on clothing, cars, and appliances, but will not see stocks with that same view. Interesting and probably true.
The obvious story of the day.....LOL. Inflation surges 9.1% in June, most since November 1981 https://finance.yahoo.com/news/june...to-new-40-year-high-last-month-215233961.html (BOLD is my opinion OR what I consider important content) "U.S. consumer prices in June accelerated at the fastest annual pace since November 1981. The Bureau of Labor Statistics' Consumer Price Index (CPI) reflected a year-over-year increase of 9.1% last month, up from the prior 40-year high of 8.6% in May. Economists were expecting June's reading to show an 8.8% increase, according to estimates compiled by Bloomberg. On a monthly basis, the broadest measure of inflation rose at a pace of 1.3%, inching up from 1% in May and climbing at a faster tempo than the 1.1% climb economists had projected. This marked the largest monthly increase since 2005. U.S. stocks were slammed early Wednesday following the hotter-than-expected print. The S&P 500 dropped 1.3% at the open, while the Nasdaq shed 1.7%, and the Dow fell 1.1%. The continued surge in inflation across the U.S. economy was elevated by broad-based increases, including high food costs and record gasoline prices, which topped more than $5 per gallon at the pump last month. “Core” CPI, which excludes the more volatile food and energy components, rose 5.9% in June, compared to 6.0% in May. Economists expected a 5.7% increase in this measure. The report's energy index soared 7.5% in June and 41.6% over the last year, marking the largest 12-month increase since the period ending April 1980. Meanwhile, the component of the report tracking food prices increased 1% over the month and 10.4% annually, the biggest 12-month increase since the period ending February 1981. Commodity prices have been under pressure in recent weeks, however, with crude oil falling more than 8% on Tuesday. "Overall, this report confirms that the Fed will need to hike by 75bp again at the end-July meeting," Capital Economics Senior U.S. Economist Michael Pearce said. "While some will draw parallels with the shockingly bad May CPI report, the backdrop is markedly different - commodity prices have fallen sharply and we’ve seen clearer signs of an economic slowdown, both of which will contribute to weaker price pressures ahead." In Washington, the White House on Tuesday warned in a call with reporters that June’s inflation numbers were likely to be “highly elevated” but downplayed the weight of last month’s figure, pointing to gas prices that have since retreated from their highs. "The Administration tried to get out in front of the bad economic news, and tell us the inflation report was going to be ugly this month, but it was even worse than markets imagined in their wildest dreams," FWDBONDS Chief Economist Christopher Rupkey said in emailed commentary." MY COMMENT It is what it is. The markets will obviously react for a day or two.....but....in reality NOTHING is any different than it was yesterday or last week. Life will go on as usual. Since the modern way is......."me, me, me".....I will happily take my 8.5% to 9% raise in my Social Security when the cost of living increase is announced in October. Are we now in a recession? Probably........I say YES, definitely. Are the markets TOAST in terms of 2022.....probably......I dont see any way at this point that any of the averages will end the year positive. Do I particularly care......NO. BUT......it makes for interesting human watching.
Now......if you want to read about REAL inflation and the response by the FED that crashed the economy....here you go. A look back at the runaway inflation of the 1970s The legacy of Paul Volcker lives on https://theweek.com/history/1015038...=email&refid=10E92AB193F4857411E414DAFABEE91E (BOLD is my opinion OR what I consider important content) "The cost of borrowing money is probably about to go up again. The Federal Reserve is expected to raise interest rates at its July meeting in an effort to rein in stubbornly persistent inflation. "As price increases bedevil consumers at the gas pump and in the grocery aisle, the Fed believes that it needs to bring inflation under control swiftly in order to set the economy on a path toward healthy and sustainable growth," Jeanna Smialek and Jim Tankersley write for The New York Times. The Fed's moves bring to mind another era of rampant inflation — the 1970s — and the man who eventually brought it under control: Paul Volcker. Under his leadership, the Fed's "tight money" policies triggered a massive recession that pushed the unemployment rate up to 11 percent in 1982. Inflation subsided, but the effort was painful for millions of workers and their families. Is America on the cusp of a "Volcker moment"? Here's everything you need to know: What was inflation like in the 1970s? It was pretty bad — reaching as high as 14 percent by the end of the decade — and it also lasted a long time: The era from 1965 to 1982 was known among economists as "The Great Inflation." You couldn't even escape rising prices by watching your favorite TV show. "Meat prices also spiked. On the popular sitcom All In The Family, Archie Bunker was reduced to eating meatless spaghetti," Scott Horsley wrote last year for NPR. President Nixon was the first to try to battle the problem, with a program of wage and price controls, but that didn't work so well: "When his controls were lifted, prices bounced even higher." President Gerald Ford was the next to take a swing, and it also turned out badly. His "Whip Inflation Now" program — WIN, get it? — called on Americans to fight inflation by making voluntary personal sacrifices: "To help increase food and lower prices, grow more and waste less. To help save scarce fuel in the energy crisis, drive less, heat less." He even had buttons made. There was some initial enthusiasm, but it didn't really work. "Inflation wasn't something that could be solved by planting a garden or shopping at a thrift store," Stephen Mihm wrote for Bloomberg in December. Next up: President Jimmy Carter. His term in office ended up with an even worse problem than mere inflation — the era of "stagflation," which happens when prices are rising, but unemployment is high and the economy is growing slowly. Like Nixon, he tried wage and price controls. Like Ford, he asked Americans to use less energy. Like both men, he failed. But Carter did make one fateful move: In 1979, he appointed Volcker to lead the Fed. What did Volcker do to fight inflation? He raised interest rates high — really high, "to an unprecedented 20 percent, drastically reducing the supply of money and credit," Neil Irwin wrote for Volcker's 2019 obituary in The Washington Post. (For comparison's sake, the current Feds Fund Rate is still under 2 percent.) The theory: "If it's more expensive to borrow money or carry a balance on a credit card, consumers will spend less," Rob Wile writes for NBC News. "When spending declines, demand will fall and, eventually, so will the price of everyday goods." The danger, though, is that "the combination of higher borrowing costs, high inflation, and slower growth could tip the U.S. economy into a recession." That's exactly what happened. Volcker's actions finally brought inflation down — but they also created "the worst economic downturn in the United States since the Great Depression," according to the Federal Reserve's official history. Homebuilders and car manufacturers saw their unemployment rates in their sectors rise to 22 and 24 percent in 1982. And Volcker became massively unpopular: "Angry home builders mailed him sawed-off two-by-fours," Catherine Rampell wrote in 2019. "Lawmakers threatened impeachment. Volcker needed a security detail." Volcker stuck to his guns. The Fed had periodically raised rates to fight inflation throughout the 1970s, only to back off when unemployment rose. He believed that created a "credibility problem," according to the Fed history: "The new policy was meant to signal to the public that the Fed was serious about low inflation. The expectation of low inflation was important, as current inflation is driven in part by expectations of future inflation." But he also believed that letting inflation run rampant would create "more serious economic circumstances over a much longer period of time." The philosophy? Better to suffer a short-term shock than long-term instability. Are we about to repeat history? Not everybody is sure that 2022 looks like the early 1980s. "A large part of the [current] story involves shocks like rising oil and food prices, disrupted supply chains and so on that are outside the control of policymakers," economist Paul Krugman writes in The New York Times. So the shock therapy of that earlier era might be unnecessarily painful. "It doesn't look as if we need harsh, Volcker-type policies that punish the economy until morale improves." But Volcker's legacy is clearly hovering over the decisions now being made by Jerome Powell, the Fed's current chairman. "We're strongly committed to using our tools to get inflation to come down," Powell said last month. Yes, there's a risk that raising rates could trigger a recession. But "I wouldn't agree that it's the biggest risk to the economy. The bigger mistake to make ... would be to fail to restore price stability." Sounds like old times." MY COMMENT It is unlikely that the actions of the FED raising rates will have much impact on inflation. What will kill inflation is when the FED reaches and goes beyond a tipping point and CRASHES the economy. How bad will it get......well we all have to wait to see. I think one thing is clear......it WILL get worse before it gets better. How "COULD" it get worse.......well......housing markets and values collapse......unemployment spikes.......demand for all sorts of goods collapses causing a severe recession......stocks continue down.......mortgage rates spike.....etc, etc, etc. Will any or some of the above happen......I dont know. We will have to live it to see. One big unknown.....here in the USA......people, society, values, culture, work ethic, etc, etc, etc......are very different than they were back in the 1960's and 1970's. History in the making.
Since I am just throwing out some random thoughts in the posts above........one of the greatest impacts of what might happen over the medium term is how this will affect the retiring baby boom generation. Many people in this generation are in the middle of one of the largest social experiments in history........the switch from a pension system to self funded retirement through the 401K and IRA. It is times like this that make my extremely thankful that I have a guaranteed lifetime income through Social Security and my income annuities. I am also extremely thankful to have no debt and a paid off house. If you are within 10 years of retirement.....it is time for YOU to plan out your next 20-40 years.
The GOOD NEWS.......you would have to be living under a rock to have not expected this inflation number today. It has been baked into the markets for a long time. AND.....we are seeing that with the losses in the averages today.....at the moment.....lessening. The NASDAQ just turned green. I suspect that if I look at my account it might even be green. Even among the media today.....I dont see much reaction to the inflation number. People are used to what is going on and they are just going to ignore this and move on with their day to day lives. The markets will probably do the same.
Speaking of the SS cost of living above. Social Security cost-of-living adjustment could be 10.5% in 2023, according to new estimate https://www.cnbc.com/2022/07/13/soc...ustment-could-be-10point5percent-in-2023.html (BOLD is my opinion OR what I consider important content) "Key Points New Consumer Price Index data for June shows inflation has not cooled. That could mean a 10.5% cost-of-living adjustment for Social Security beneficiaries in 2023, according to new estimates from The Senior Citizens League. How big the increase is in 2023 will depend on inflation data for the coming months. Social Security beneficiaries will be in line to receive a record high cost-of-living adjustment in 2023 due to inflation. The question is exactly how high it may be. Based on new Consumer Price Index data for June released on Wednesday, The Senior Citizens League, a nonpartisan senior group, now estimates the cost-of-living adjustment will be 10.5% for 2023. A 10.5% COLA would amount to a $175.10 increase to the average monthly retirement benefit of $1,668, according to The Senior Citizens League. In comparison, the group’s estimates from the past two months indicated the COLA for next year might be 8.6%. That’s as the Consumer Price Index for all Urban Consumers, or CPI-U, climbed 9.1% in June over the previous 12 months, the fastest pace since 1981. Meanwhile, the measurement used by the Social Security Administration to calculate the COLA each year — the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W — shot up 9.8% over the last 12 months. To be sure, the estimate for next year’s COLA is still tentative. The Social Security Administration calculates the annual adjustment by taking an average of the third-quarter data from the current year and comparing it to the third quarter from the previous year. The actual increase for next year may vary depending on how high inflation is in the coming months. “Looking ahead, there are a number of reasons why we expect those high prices to ease over the coming months,” White House Press Secretary Karine Jean-Pierre said in a press briefing this week. If inflation cools in the coming months and is lower than the recent average, the COLA could be 9.8%, according to The Senior Citizens League. If instead it runs hot or higher than the recent average, the increase to benefits could be 11.4%. In 2022, Social Security beneficiaries received a record 5.9% boost to benefits, the highest increase in about 40 years. However, since then inflation has kicked up." MY COMMENT Sounds good to me.....SHOW ME THE MONEY.
Here is a CLUE where we are in the real estate portion of your net worth right now. Demand for big mortgages is shrinking as home prices moderate and expensive houses linger on the market https://www.cnbc.com/2022/07/13/demand-for-big-mortgages-is-shrinking-as-expensive-homes-linger.html (BOLD is my opinion OR what I consider important content) "Key Points Mortgage applications to purchase a home fell 4% for the week and were 18% lower than the same week one year ago. The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained at 5.74%. Applications to refinance a home loan, which have been incredibly weak due to higher interest rates, rose 2% for the week but were 80% lower than the same week one year ago. As consumers worry more about inflation, fewer are buying homes -- and if they are, they’re buying less expensive homes. Mortgage demand fell last week compared with the previous week, and the average loan size shrank as well. Mortgage applications to purchase a home fell 4% for the week and were 18% lower than the same week one year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. The MBA also included an adjustment for the July Fourth holiday. Buyers have been pulling back due, in part, to higher mortgage rates, but rates held steady last week. The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained at 5.74%, with points decreasing to 0.59 from 0.65 (including the origination fee) for loans with a 20% down payment. “Purchase applications for both conventional and government loans continue to be weaker due to the combination of much higher mortgage rates and the worsening economic outlook,” said Joel Kan, an MBA economist. “After reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market.” Applications to refinance a home loan, which have been incredibly weak due to higher interest rates, rose 2% for the week but were 80% lower than the same week one year ago. At the same time last year, the average mortgage rate was 3.09%. There are very few remaining borrowers who don’t already have lower rates on their mortgages and who could benefit from a refinance." MY COMMENT First the mortgage rate average of 5.74% above......totally false. This is the rate with 0.59 points. If you want to see the REAL mortgage rate look up the rate with ZERO points. Second......ok.....I understand where this little article is coming from.....but......what makes this data very suspect is the FACT that a big percentage of the purchases in the upper price ranges are for ALL CASH. I know in my area that probably at least 30-50% of all sales in the neighborhood are all cash. One thing important about home prices is the psychological impact of rising and falling values. One big reason why people have been able to ignore the recent stock market weakness is the increase in net worth brought on by real property price jumps. If we start to see big decreases in home values the psychological impact will be BIG.
As i suspected.....having just looked.....my account is UP by 0.40% today so far. I have four stocks DOWN.....Apple, Microsoft, Honeywell, and Google. I have six stocks UP.....Tesla, Amazon, Nike, Costco, Nvidia, and Home Depot. A nice day so far.
AND....yes.....I continue to be fully invested for the long term as usual. As usual....fellow long term investors......COURAGE.
STILL.....looking forward to the 20 for 1 split this Friday for Google. Now that we have the CPI out of the way.....lets look forward to the split on Friday and the start of EARNINGS.
WOW......green again. By a minuscule......0.02%. So.....I beat the SP500 by 0.47%. Very little money involved.......but I avoided losses today so I will take it. I ended with six stocks up and four stocks down. Google kept me from having a larger gain today. Looks like there will not be any strength in Google till after the split.
