The Long Term Investor

STILL way up today with about 1.5 hours left in the day. Now it is a question of if we can avoid the LATE DAY FADE....as people take profits from the past couple of days. I am looking good today....all green of course considering the markets. We can see on these sorts of days the underlying strength of the markets if we could just get the FED and the government out of the way.

Even if this only lasts for a few days or a week.....it is nice to replenish funds....before the next round of fear mongering and market drops. I have noticed over many years that the time you REALLY make money is when the markets come back from a BIG drop and a bear market.

If we can hold on for the rest of the day I will drop down below 28% for my year to date LOSS. At the moment it is looking like about (-27.45%) year to date for me. I can definately live with that if I can end the year at that point or better. It would mean that I did not give back ALL of last year.

Of course......just because this calendar year ends does not mean that the markets will enter recovery.

 

GREAT NEWS TireSmoke. A new baby and a new house. LOL....your life must be in turmoil.....but very happy and exciting. New build.....is a good thing. It is nice to know that you have a builder guarantee on some items and that everything is new and up to the current codes.

A nice neighborhood and great schools are icing on the cake. CONGRATULATIONS.

 

AND....congratulations to US......the markets held on for the day and even showed some strength into the close today. We are now....two for two....this week. What the heck....lets go for five for five.....since we appear to be on a little bit of a roll right now. Here is our day today.

Stock market news live updates: Stocks soar as October relief rally intensifies

https://finance.yahoo.com/news/stock-market-news-live-updates-october-4-2022-111349006.html

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

"U.S. stocks charged sharply higher Tuesday as Wall Street built on momentum from a broad market rally that kicked off the month and quarter earlier this week.

The benchmark S&P 500 surged 3%, its largest two-day climb since March 2020 — with the strongest daily breadth reading since late 2018, per data from Bespoke Investment Group. The Dow Jones Industrial Average jumped 826 points, or 2.8% for its second straight day of gains of more than 700 points. The technology-heavy Nasdaq Composite soared 3.2%.

All eyes were on Elon Musk's charade with Twitter (TWTR) Tuesday after Bloomberg reported the Tesla (TSLA) CEO agreed to move forward with his $44 billion deal to buy the social media platform. Shares of Twitter spiked 12% immediately following the news before trading was temporarily halted — and closed up 22.4% after trading resumed. Musk confidentially filed a letter with the Delaware Chancery Court Monday night to proceed with the acquisition, days before he was expected to be deposed as part of Twitter's lawsuit.

"We received the letter from the Musk parties which they have filed with the SEC," Twitter said in a letter Tuesday afternoon. "The intention of the company is to close the transaction at $54.20 per share."

As stocks soared broadly, investors cheered on a fresh labor market reading that showed U.S. job openings slid by the most in nearly two and a half years in August — a welcome sign for Federal Reserve officials trying to tamp down outsized labor demand in the fight against inflation. The Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS) that job openings dropped 1.1 million to 10.1 million on the last business day of August.

Bonds rallied alongside stocks on Tuesday, with Treasury yields falling for a second straight day. The benchmark U.S. 10-year note tumbled to around 3.6% after topping a 2008 high of 4% last week. The U.S. dollar index also fell lower.

Equity markets kicked off the month on a high note Monday after an ugly September for the major averages. During the previous session, the S&P 500 soared 2.6% in its best day since July, the Dow rose 2.7% to mark its largest one-day gain since June, and the technology-heavy Nasdaq Composite gained 2.3%.

Nicholas Colas of DataTrek Research points out that the S&P 500 rarely rallies by over 2% in non-stressed market conditions, suggesting that Monday’s bounce was a sign of “fragility, not strength.” Between 2013 and 2019, for example, there were fewer than four such days in every year, while 2022 has had 14 so far.

“History strongly suggests that Monday’s 2.6% S&P rally is neither healthy nor a sign that the index has troughed,” Cola said, adding that reducing outsized volatility of the sort we have been seeing this year requires a shift by policymakers. “Markets have been trying to predict a turning point for Fed policy for months now, with as-yet little success given the ongoing strength in U.S. labor markets and still-high inflation.”

A gauge of U.S. manufacturing from the Institute for Supply Management (ISM) on Monday showed activity declined to the lowest since May 2020 – a contraction that stoked some optimism around a dovish Federal Reserve pivot. And adding to hopes central bankers may back off aggressive monetary intervention was a warning from a United Nations agency that policymakers may induce a global recession and a period of prolonged stagnation if they proceed with aggressive rate increases.

"Excessive monetary tightening could usher in a period of stagnation and economic instability," the United Nations Conference on Trade and Development (UNCTAD) said in a statement.

Elsewhere on the corporate side, shares of Rivian (RIVN) rallied nearly 14% after the company reiterated it was still on track to produce 25,000 electric vehicles this year, affirming its previous guidance.

Poshmark (POSH) stock jumped 13% on news the second-hand fashion retailer is set to be acquired by South Korean internet giant Naver Corp. in a deal valued at $1.2 billion.

Oil also extended Monday’s gains after a report OPEC+ is mulling a hefty production cut. West Texas Intermediate (WTI) and Brent crude oil futures each rose more than 3% to $86.44 and $91.86 per barrel, respectively."

MY COMMENT

We needed this little rally. No doubt caused....partially....by the recent drop in the Treasury yields......and.....the job openings data. Of course.....the people hoping that these indicators will cause a FED pivot will have their hopes DASHED in November when the next rate increase will probably be another one of 0.75%.

But that is months away.....so.....who cares. It is time to enjoy the current gains....even if they are only a couple of market days. After all we are talking about the markets gaining......5.5% to 6%....IN ONLY TWO DAYS.

 

Sounds like you are probably....BLEEDING MONEY.....and will be for a while as you settle in with the new baby and the house. But....that is just how it is....and....that is why you saved that money to begin with.

You will do just fine in 5-7 years when you hope to build. That will give you plenty of time to see what you really want and need. Good plan.

Also.....good to see you post again....I was wondering how things were going with your home search.

 

I was BIG GREEN today in my account. The past couple of days have been a welcome relief from the dour markets of September and the last months. PLUS....I got in a small beat of the SP500 by 0.06%.

All ten of my stocks were UP today. You know it is a good day in an account when the LOWEST gaining stock is +1.76%.....and everything else is between +2.01% and +5.23% for the day.

SO......why dont we do this again tomorrow.....fine with me.

 

Agree......when the politicians have the ability to SQUELCH your CONSTITUTIONAL RIGHTS by declaring some emergency.....and the courts sit MUTE and do nothing.....you no longer have any constitutional rights. And of course....NONE of it applies to the ELITES or BIG BUSINESS.

That is my LIBERTARIAN view.....which as I apply it in my mind.....cuts across ALL political lines and has NOTHING to do with politics.

 

So....looks like OIL matters.

 

Here is a nice little article.

5 reasons why the stock market suddenly roared back

https://finance.yahoo.com/news/5-reasons-why-the-stock-market-100658950.html

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

"It has been a rip-your-face off rally in the stock market to kick off the final quarter of the year, much to the surprise of the bears who ruled the roost in September and third quarter.

At a 5% gain so far this week, the S&P 500 (^GSPC) had its best back-to-back days since April 2020 and the best two-day start to the fourth quarter going back to the first full year of the five-day trading week in 1953, according to data from Bespoke.

The research team at DataTrek offered up five solid reasons behind this week's buying momentum. Here are those reasons, with analysis from us at Yahoo Finance.

• "Treasury yields have backed off their recent highs. Two-years are down to 4.10% from the 4.32% highs on September 26th. Ten years are at 3.64%, well off the September 27 high of 3.96%." That has put a bid under often leadership names in tech such as AMD, Amazon, and Apple.
  
  
• "Lower Treasury yields have stabilized currency markets. The euro is almost back to par with the dollar at 0.9983. The British pound has rallied from its V-bottom low on September 26 at $1.07, back to $1.15." The U.S. dollar has eased off its recent highs this week, supporting share prices of multinationals such as Caterpillar and Microsoft.
  
  
• "Tuesday's JOLTS report suggests U.S. labor markets are seeing their first real signs of cooling." U.S. manufacturing data earlier this week also showed an easing in economic activity and pricing pressure, spurring markets on the hopes the Fed would cool the pace of rate hikes sooner.
  
  
• "U.S. Q3 corporate earnings season starts next week, and estimates have come down enough (-6.6% since June 30) that companies should be able to beat Street numbers by a few percent." Be careful with that one in light of recent dreadful financial warnings from FedEx, Nike, and Hasbro.
  
  
• "The next Fed meeting is not until November 2, so markets can focus on earnings rather than monetary policy." Hawkish rhetoric from Fed members last week tanked the market, so less of their musings could bring further short-term relief to markets.
  

That being said, investors remain on high alert for the resumption of selling given the precarious state of global economies and inflation-fighting tones among central bankers.

The Federal Reserve remains the straw that stirs the drink in global markets as it continues a mission to stomp out inflation by aggressively hiking interest rates, which has set the pace for fellow central banks. That mission was reinforced in the past week by the tough-sounding commentary from various Fed officials including Fed Chair Jerome Powell and Vice Chair Lael Brainard.

Wall Street is now bracing for a policy mistake from central bankers.

"We are increasingly worried about central banks making a policy error, and of new geopolitical tail risks," Marko Kolanovic, a top JPMorgan strategist, wrote in a new note to clients.

The hawkish tone from the Fed has rippled across an array of asset markets, from the surging U.S. dollar to rising mortgage rates that are nearing 7%.

And despite the strong start to October, the Dow Jones Industrial Average (^DJI), S&P 500, and Nasdaq Composite (^IXIC) remain mired in double-digit percentage declines for the year. Emerging markets remain under considerable pressure as well.

"Our core view for choppy markets, up in quality and defensive positioning over the next six to 12 months, remains intact," Truist co-chief investment officer Keith Lerner warned in a note to clients. "This global tightening cycle is set to weigh on economic growth well into 2023 given that monetary policy works with long and variable lags. Thus, even if the Federal Reserve (Fed) pivots or inflation softens in the fourth quarter, which may energize a risk-on rally, it likely does not change the downward trajectory of the economy and challenging market backdrop over the medium term.""

MY COMMENT

OR......the markets might turn back down due to some other group of countries......A CARTEL.....manipulating a commodity that the world economy NEEDS and which we have NO control over.....at the moment.

The short term markets are much more driven by the negative than the positive. The markets and the financial media....will relentlessly search for any negative argument or event EVERY DAY. The short term investors and traders in theory LOVE IT. The LONG term investors IGNORE it.....if they can.

I say "in theory" about the short term investors and traders above....since....the majority of them CAN NOT beat the simply passive indexes over the medium to long term. In fact most of them can NOT beat the passive indexes over the short term......one year.

 

Since the markets are OBSESSIVELY focused on OIL today.

OPEC’s Target Cut in Perspective
Global supply is up big this year despite OPEC’s failure to meet production targets.

https://www.fisherinvestments.com/en-us/marketminder/opecs-target-cut-in-perspective

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

"The good kind of volatility returned Monday as the S&P 500 jumped 2.6% to start Q4. But stocks weren’t the only thing that rose. Crude oil prices also jumped, tied largely to rumors that OPEC and its partners are considering reducing their production target by a million barrels per day (bpd) at this week’s meeting. Cue fears of a big cut fueling (sorry) another spike in oil prices, exacerbating this year’s inflation and compounding extant economic headwinds. This is understandable from a sentiment perspective and right in line with the fears driving this year’s bear market. Yet we also think it is quite out of step with oil supply and demand, not to mention how oil prices have behaved since spiking as Vladimir Putin invaded Ukraine.

Exhibit 1 shows global oil prices this year to date. As you will see, crude rose in the run-up to the invasion and spiked just afterward, reaching its year-to-date high on March 8. That, you might recall, is the day the UK announced its decision to ban Russian oil imports, heightening fears of a sudden supply crunch. But since summer, oil has declined steadily as it became apparent that Russian oil was finding buyers and global supply was resilient. Oil prices now sit right around pre-Ukraine war levels.

Exhibit 1: Brent Crude Oil in 2022



Source: FactSet, as of 10/3/2022. Brent crude oil spot price, 12/31/2021 – 9/30/2022.

Based on our read of sentiment, oil’s decline isn’t widely appreciated. We suspect that is because earlier high oil prices are still feeding into consumer price inflation—not just from the comparison with lower fuel and energy prices a year ago, but from all the consumer products that include petrochemical feedstocks. The production economy has had a lot to swallow this year, and not all companies passed those costs onto consumers immediately. So when consumers hear about oil production target cuts and the potential for rising prices, it is very easy to mentally layer that on top of the current inflation rate and presume it will keep accelerating indefinitely, not accounting for the disinflationary forces that have been at work since summer.

Then again, we think it is a stretch to extrapolate mooted OPEC production target cuts to an oil price spike. Like all assets, oil moves on supply and demand. As Exhibit 2 shows, supply has outstripped demand for a few months now, to the tune of about 1.3 million bpd in September. That figure is less than OPEC’s rumored cut. It seems like the cartel may be aiming to put a floor under recently declining prices. That might end the recent slide, but it doesn’t mean another spike, especially with consumption down from last autumn’s high, when the world was gobbling up oil as a replacement fuel when European wind production tumbled and coal was in short supply in China.

Exhibit 2: The World Has an Oil Surplus



Source: FactSet, as of 10/3/2022. Monthly global oil supply and demand, January 2015 – September 2022. HT: Fisher Investments Research Analyst Ori Powers.

Note, too, that supply has risen (and prices declined) despite OPEC’s chronic failure to meet its targets. Yes, failure. According to a widely reported leak of some OPEC internal documents, OPEC and its partners (including Russia and others) missed August’s production target by 3.58 million bpd.[ii] That is even worse than July, when production was reportedly 2.9 million bpd before the target due primarily to attacks on Nigeria’s oil infrastructure and Russia’s production cuts in the wake of sanctions, and it extends a long-running miss. Cutting a target, which is what is under discussion, is very different than cutting actual output. If anything, it just brings the target a tad closer to where production actually is, making the miss slightly less embarrassing.

OPEC always hogs the world’s attention, but that seems mostly a relic of the 1970s, when the cartel had real power to control supply. That was before the shale boom, when US production surged, leading to a global supply glut in the mid-2010s that the world took a few years to work off. It also took US oil producers several years to work through that era’s over-investment and debt accumulation, which is one reason why they have been slower to ramp up this time around. But US production is nevertheless up, from a pandemic-era low of 9.7 million bpd in May 2020 to a post-pandemic high of 11.8 million in July, the latest data available.[iii] The US oil industry, unlike OPEC, doesn’t operate by administrative fiat. It lives in the private sector, with even drilling on federal lands far less subject to the government’s whims than coverage on both sides of the political aisle suggests. With domestic oil rig counts up by over 100 this year to date, production likely continues rising, potentially counterbalancing any actual OPEC production cuts from here.[iv]

In our view, oil prices aren’t a fundamental stock market driver. Oil and stocks move concurrently, as all similarly liquid assets do, digesting the same information concurrently. One doesn’t predict the other. But oil prices have affected sentiment this year, so from that standpoint, falling uncertainty in the oil world probably benefits stocks as it gradually arrives. The more the world sees supply and demand staying roughly balanced despite OPEC’s rumblings, the more we should get that falling uncertainty."

MY COMMENT

The above is certainly true.....but.....combine a threat of cutting supply with the financial media and fear mongering.....and you have today in the markets. The question is how many days like today the markets will have to endure before everyone moves on to another topic.

 

There is some SLIGHT hope that our big companies will eventually WAKE UP to the IDIOCY of manufacturing and doing business in China.

Apple reportedly in talks to make AirPods and Beats headphones in India

https://www.cnbc.com/2022/10/05/apple-reportedly-in-talks-to-make-airpods-and-beats-in-india-.html

From the article.

"The talks mark the company’s latest attempt to lower the risk of supply chain disruptions in China due to Covid lockdowns and increased U.S.-China trade tensions. Apple was reportedly in discussions in August to shift some of its Apple Watches, MacBooks and HomePods to Vietnam, and it announced in September it is assembling some of its flagship iPhone 14 phones in India.

Apple still relies heavily on China for the majority of iPhone production"

MY COMMENT

Lets see......I am a CEO.....I have two countries with populations of about 1.4 BILLION. One is a brutal communist dictatorship with a history of stealing business secrets and rampant fraud. The other is a relatively free country.....with massive customer upside potential for my products.....from whom I am already employing HUGE numbers of workers in my offices in the USA. Which one do I want to tie the future of my company to....