The Long Term Investor

And while typing the above......the markets continue in the RED for the day so far. We are stuck in the same old short term rut.

 

Good news for the long term.

A Look Around the World at Manufacturing PMIs Entering 2023

https://www.fisherinvestments.com/e...the-world-at-manufacturing-pmis-entering-2023

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

"Heavy industry’s slump isn’t news for stocks.

The New Year is officially underway, but 2022 still lingers on in a sense, as December’s economic data are only just starting to come out. First up: Manufacturing Purchasing Managers’ Indexes (PMIs), which showed factories worldwide finished the year in the doldrums—surprising no one. Not only are manufacturing’s troubles well-documented, but heavy industry is uniquely vulnerable to last year’s biggest headwinds. The good news? With those headwinds widely known and now starting to fade, global markets should be poised to begin pricing in an economic recovery much sooner than people seem to anticipate.

Exhibit 1 rounds up the major manufacturing PMIs. As you will see, all remained under 50, the line between growth and contraction. That extends the trend that materialized around midyear.

Exhibit 1: Around the World in Manufacturing PMIs


Source: FactSet, as of 1/4/2023.

In our view, geographic trends highlight the causality. China started and ended the year weak, due first to the continuation of its Zero-COVID policies and then, as the year closed, the big COVID wave that followed the easing of most restrictions. It is increasingly an outlier globally but will probably come back in line with the rest of the world later this year as it moves past the winter COVID surge. Elsewhere, the UK and eurozone were first to slip into contraction, which we think ties to their comparatively higher energy costs. Manufacturing is quite energy-intensive, making factory output especially susceptible to rising power prices. Germany unsurprisingly got it the worst since natural gas is a key feedstock for its mighty chemical industry, hitting it disproportionately as natural gas prices surged after the West’s response to Russia’s Ukraine invasion hit supply in the eurozone. But by yearend, all major developed economies’ manufacturing sectors were in contraction, hit by higher operating costs and input prices as well as reduced demand from clients that had their own issues trying to weather the inflation storm.

That is all the bad news—and it is all backward-looking. Stocks, however, look out to the next 3 – 30 months. In that stretch, the issues that hampered factories as 2022 wound down look highly likely to improve. Energy costs are down—way down—with even benchmark European natural gas prices below pre-invasion levels. Gas shortage talk has died down significantly, reducing the likelihood of rationing and factory outages in Europe. On our shores, lower gasoline prices mean lower transit costs, enabling more goods to move around the country. Commodity prices are down across the board. Per the PMIs, input and output price increases have continued moderating significantly. Forward-looking inflation indicators—chiefly, slowing in broad money supply growth—suggest that should continue. Meanwhile, loan growth remains resilient across the developed world, suggesting households and businesses should have plenty of capital to deploy as their inflation concerns ease.

We know this doesn’t square with all the economic pessimism dominating the world, evident once again in the IMF’s latest comments about one-third of the world being in decline, not to mention the drumbeat of surveys showing recession is the baseline forecast. But that is the point. Markets move most on the gap between expectations and reality over the foreseeable future. Expectations are quite low, mostly because people are extrapolating the current weakness forward. But actual forward-looking indicators suggest some improvement is in the offing even in the areas seemingly hit hardest by last year’s dynamics—improvement that doesn’t seem to be factored into sentiment right now. Seems to us like there is a lot of room for positive economic surprise to buoy stocks.

When that will happen, we can’t say. It may already have begun in mid-October. Turning points are clear only in hindsight. Maybe stocks move well in advance of any notable improvement in the data, or maybe there is further downside ahead if data stay bad a while longer. After a year in which markets seemed to dwell on bad news much more than good, who can say when that preoccupation with the negative will flip. But looking purely at the economic driver, we see much more positive surprise potential ahead than negative. At some point, if markets are at all efficient, that should eventually show up in prices."

MY COMMENT

The future is bright out there somewhere. We are slowly grinding our way through this bear market and will come out the other side with an explosive rally....as usual.

 

Yes.....I believe....in the potential of the new year.

Pre-Election Years = 80% Hit Rate after down Mid-terms

https://allstarcharts.com/pre-election-years-80-hit-rate-after-down-mid-terms/

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

"Doing some basic math, the odds continue to favor a strong year for stocks in 2023.

There are some people out there who think the Nasdaq is the stock market. There are others who “only buy growth stocks”.

I don’t know what kind of masochist you need to be to think that way, but both of those are very foolish approaches to life.

The Nasdaq is full of growth stocks. And growth stocks historically underperform and make little progress when interest rates are rising. I’m not sure if you heard, but interest rates have been rising!

Since the Stock Market bottomed in June, the majority of stocks and sectors are up and to the right. It’s only the biggest losers that are down, and there aren’t that many of them. It’s really just those nasdaq / growthy stocks that the masochists are focused on.

From a seasonal perspective, Pre-election years are historically some of the most bullish years we have in the market. Here’s what the 4-year cycle looks like as we head into 2023:



According to Oppenheimer & Co, since 1928 the S&P500 averages an 18% return during Pre-election years following a down mid-term year. That also comes with an 80% hit rate.

Since 1928, the S&P500 has only posted back-to-back losses 8 times. Q4 returns were negative in 7 out of those 8 occasions going into the next down year. With S&Ps up 7% last quarter, the math is once again in favor of the bulls.

Here’s a breakdown of our Cycle Composite for 2023. This includes every year since 1950, all of the Pre-Election Years since then, and of course, every 3rd year for the Decennial Cycle:



From the lower left to the upper right is what I see.

Here’s what the Composite looks like with all of them combined:



Up and to the right.

Are you fighting seasonal trends?

Are you fighting the improving market breadth?

Are you agreeing with all those bearish folks who keep telling me about this epic recession that’s supposedly coming?

(By the way a recession has never begun during a Pre-election year, so if that’s what you’re betting on, you’re making a bet on something that’s never happened before)

And to be clear, I don’t mean the bearish individual retail investors that have little or no impact on market trends. I’m specifically referring to Institutional Money Managers that Prime with Bank of America and Goldman Sachs that are scared to death."

MY COMMENT

The vast majority of years see the SP500 end the year with a positive result....about 70% of the time. We have only seen the SP500 down twice now since 2009. Dont let the tail wag the dog.......to get the good long term returns you have to be able to tolerate and laugh in the face of the few down years that happen as part of the NORMAL market process.

 

There is always some short term excuse for the daily market.

Stocks fall after strong labor market data

https://finance.yahoo.com/news/stock-market-news-live-updates-january-5-2023-123028965.html

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

"U.S. stocks sank Thursday morning after economic data showed private payrolls rose more than expected last month and weekly jobless claims fell to a three-month low, pointing to continued tightness in the labor market despite higher interest rates.

The S&P 500 (^GSPC) plopped 0.7%, while the Dow Jones Industrial Average (^DJI) shed 250 points, or 0.8%. The technology-heavy Nasdaq Composite (^IXIC) tumbled 0.9%.

The ADP National Employment report showed private employment grew by 235,000 jobs in December. Economists surveyed by Bloomberg called for an increase of 150,000.

Elsewhere in economic data, filings for unemployment insurance also fell to 204,000, the lowest since September, in the week ended Dec. 31 from the prior week's downwardly revised reading of 223,000, the Labor Department said Thursday.

The reports were the latest to show strong demand for workers, even as the Federal Reserve presses on with aggressive monetary tightening to rein in inflation. ADP's data and weekly jobless claims follow a separate measure Wednesday that found job openings fell less than expected last month and remained high. The Labor Department's monthly nonfarm payrolls survey due out Friday morning remains the most important reading for Fed officials and investors attempting to predict the next policy move.

"While we will get a better overall picture of the jobs market tomorrow, private payrolls beating expectations and jobless claims coming in below are indications that the labor market remains resilient," Morgan Stanley Global Investment Office Head of Model Portfolio Construction Mike Loewengart said in a note. "These come on the heels of big-name companies announcing sizable job cuts so there is no doubt the market’s pressures are weighing on companies, but it remains to be seen when hiring will slow demonstrably."

Amazon (AMZN) CEO Andy Jassy said in a note late Wednesday the company’s planned job cuts will now impact at least 18,000 employees, significantly more than previously indicated. Jassy’s memo came after the Wall Street Journal reported the news. Shares ticked lower at the start of trading Thursday.

The figure marks the highest workforce reduction by a tech company in recent months as a growing number of names in the sector lay off workers to cut costs amid more challenging market conditions. Amazon lost roughly $834 billion in market value in 2022.

Bed Bath & Beyond (BBBY) said in a statement published Thursday that it is facing bankruptcy as it grapples with continued financial struggles. Shares tanked more than 22% near the open.

Shares of crypto-focused Silvergate Capital (SI) cratered 38% at the open after The Wall Street Journal reported Thursday the bank was forced to sell assets at a sizable loss to cover $8.1 billion in withdrawals following the bankruptcy of FTX. The plunge comes after the stock rallied 27% Wednesday.

In other crypto stock moves, Coinbase (COIN) shares fell 10% following a downgrade from Cowen to Market Perform from Outperform, citing a "fairly consistent drawdown" in trading volumes and risk from probable regulatory enforcement action after the collapse of FTX.

“There is low visibility per stabilization in retail trading volumes in 2023 following further December deterioration,” the firm said. “Potential SEC enforcement action is elevated post-FTX with regulatory certainty unlikely until 2024.”

Shares of T-Mobile (TMUS) rose 1.8% after the mobile service provider reported fourth-quarter subscriber growth slightly above estimates. The company added 927,000 new phone customers in the period, compared to analyst calls for 921,000.

Johnson & Johnson’s (JNJ) consumer health business Kenvue on Wednesday filed to be listed as a separate company, marking the first notable filing of a U.S. initial public offering of the new year.

In other markets, oil prices resumed declines after plunging nearly 10% over the past two days. West Texas Intermediate (WTI) crude futures, the U.S. benchmark, fell to $72 per barrel.

Scheduled speeches from Federal Reserve presidents Raphael Bostic and James Bullard will also be closely watched Thursday.

Stocks closed higher on Wednesday following a volatile session swayed by a readout of minutes from the Federal Reserve’s December meeting and economic data that showed higher-than-expected job openings and a dropoff in manufacturing activity for a second-straight month.

Fed minutes Wednesday showed officials opposing an "unwarranted" easing of financial conditions, even as they welcomed cooling inflation, and the need to maintain a “restrictive policy stance” until data is more promising.

“The minutes of the December meeting show that FOMC members remain focused on current inflation and inflation risks, with fear of overkill on monetary policy receiving very little attention,” Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a note.

“Don’t expect them to soften their inflation line until it becomes obvious that a serious shift in the data is underway,” he added."

MY COMMENT

Many items in the above.....all expected and NOT new. It is obvious that he actions of the FED are doing nothing to impact inflation. The government continues to give them the finger and spend like a maniac.

Johnson & Johnson continues the modern corporate fad of gutting themselves. The day will come when owners of these...... former big conglomerates...... will wish they were not gutted down to single product or single business companies. This FAD simply....often....turns into a big pay-off for the CEO and others in high management.

AND....just for fun....more FED talk on the way.....YEA.

 

Actually IndependentCandy....I restored the original post....earlier today..... since I dont see that it is too much info in any way....at least that I care about.

Schwab did say that...... I had a loss on the stock side of that particular portfolio yesterday of 0.01% with a loss of $38. Total account value for that particular account as of yesterday was about $725,000. The stock side of the account represents 60.5% of the account as of yesterday.

NO....I am not going to aggregate ALL of my various accounts to post a daily figure....They are all invested in the same way....with the same ten stocks...... although some have been around longer so the percentages of the stocks versus the funds varies...slightly......and the amount in each particular stock might vary. BUT....in general....they all show...... very similar.....results every day.....as to the individual stocks and the funds.

MY PRIMARY INTEREST....is the stock side of my portfolio....is it beating he SP500...or would I be better off simply going all in into the SP500. I dont care about the fund results in my various accounts.....they are basically mirroring the SP500. What I care about is the success or failure of my stock picking over the long term.

 

HERE is some content for long term investors.

Want to learn to be a better long-term investor in 2023? Two classic books are out in new editions.

https://www.cnbc.com/2023/01/05/two...g-term-investing-are-out-in-new-editions.html

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

"Want to learn how to be a better investor in 2023? Two classic books on long-term investing are out in new editions. If your New Year’s resolution is to learn more about the stock and bond markets, you cannot do better than to read these books.

Here’s why every investor should read them.

This week, Princeton professor Burton Malkiel has published the 50th Anniversary Edition of A Random Walk Down Wall Street: the Best Investment Guide that Money Can Buy. It’s hard to underestimate the impact this book has had on the investment community. It was first published in 1973, and by the time I met Burton Malkiel in the late 1990s it had been in print for 25 years and was already an investment classic. More than any other book, it popularized the idea of indexing as an investment strategy and why you can’t beat the market. Malkiel was a close friend of Jack Bogle and spent 28 years on the board of Vanguard. This is all-new updated edition.

In December, the Wharton School’s Jeremy Siegel published a new (6th) edition of his classic, Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies.First published in 1994, Siegel examined stock and bond returns going back 200 years and concluded that, on average, stocks produced inflation-adjusted returns of 6.5%-7% a year, far outperforming bonds. This was a pivotal study that helped convince many that a simple buy and hold strategy was the best long-term investment.

Two other investment classics round out my list of “must-reads” for long term investors.

Common Sense on Mutual Funds by Jack Bogle (10th Anniversary Edition, 2009). Meeting Jack Bogle in the mid-1990s changed my life. It was a time of superstar investors like Bill Miller at Legg Mason. Bogle convinced me that: 1) for most investors low-cost index funds were the way to go, 2) the outperformance of the small (very small) group of active managers who did outperform was negated by the high fees they —charged, and 3) once you got the mix of assets right for your risk tolerance, the key was to stick with the plan and not freak out when markets dropped. More than anyone — including Warren Buffett — Bogle changed how an entire generation looks at investing.

Winning the Loser’s Gameby Charles Ellis (8th edition, 2021). Ellis founded Greenwich Associates, an international consultancy where he advised large institutional investors, in 1972 and, like Burton Malkiel, was on the board of Vanguard for many years. In 1975, he published an essay, “The Loser’s Game,” in a financial journal, in which he laid down his central thesis: “The investment management business (it should be a profession but is not) is built upon a simple and basic belief: Professional money managers can beat the market. That premise appears to be false.” In 1985 he expanded the article into a book, now called Winning the Loser’s Game: Timeless Strategies for Successful Investing. This book came to distill much of the wisdom that Malkiel, Bogle and Siegel had separately published on beating the markets, the efficient market hypothesis, market timing and asset allocation.

Like Malkiel, Ellis urged investors to diversify into low-cost index fund investing, which was a radical idea because there were no low-cost index funds at the time!

The market eventually caught up with Malkiel, Siegel, Ellis and Bogle. Not only did Jack Bogle launch the first successful index mutual fund (based on the S&P 500) in 1975 but, 18 years later, the first Exchange Traded Fund (ETF), also based on the S&P 500, was launched. Investors now had not just an index fund, they had a low-cost, tax-efficient wrapper they could buy it in.

Since then, “The Index Revolution”, as Charley Ellis called it, has only grown. ETFs are now a nearly $7 trillion business, and closing in on the shrinking mutual fund business. For investors confused by the constant noise and the need to “do something,” these books provide a calming antidote."

MY COMMENT

A....."calming Antidote"....is always a good thing in investing. The daily sensationalism of the financial news is the opposite.

 

Well you did make me realize something about what I see on Schwab. For the ten stocks for example.....they show the daily gain or loss in dollars and/or as a gain or loss percentage......BUT......only out to two decimal points. So......on a day like yesterday with a small loss they are gong to report that as -.01. So they are exaggerating the.....percentage loss....technically....on a day like that where there is a dollar loss but is it actually below 0.01%.

YES......TO CLARIFY.......what I post day to day....versus the SP500...... is the TEN STOCKS. SO.....when I say I did this or that on a particular day....I am talking about my stock portfolio.....the ten stocks....versus the SP500. I am NOT talking about the entire portfolio.

When I post YTD numbers....gain or loss....I calculate that myself from the entire portfolio....stocks and funds. I record the starting point each year and work from there on YTD numbers that I post.

 

I am surprised you dont see that sort of thing at Fidelity or the other brokers.

My Schwab account lists the various investments in categories......the stocks are one category......the funds are another category.....if I had an ETF like QQQ that would be in another category. In each category you are given the dollar gain or loss and the percentage gain or loss for that category of items.....each day......as part of the account summary.

Of course they also show the dollar gain or loss and percentage gain or loss....... for all categories combined....each day.

They also show daily the percentage that each category is.......compared to the whole. So I know daily which side of my portfolio is growing or shrinking compared to the whole.....and whether the stocks or the funds are outperforming the other......as a group.

 

I rely on that percentage......for the stocks as a group......to see if my stock picks are beating the SP500.

Both of my funds tend to mirror the SP500 over the long term (SP500 Index Fund and Fidelity Contra Fund).

If I am seeing that the stocks represent about 60% of my total portfolio value.....which they generally do....I know that my stock picks are outperforming the SP500 without calculating anything. I use that as a quick , dirty, way to evaluate the performance of both sides of the portfolio.

 

MEANWHILE.......back at the markets....not looking so hot today...NEVERMIND.

 

A RED day for me. All ten......"STOCKS"...... were down today. I also got beat again by the SP500....today by 0.66%.......for the TEN STOCKS.

A medium loss today for my account and I am approaching my account low that I hit four times in 2022.

 

YES.....let business do business and the government should.....BUTT OUT.

2022 Proved That Governments Can't Improve on Good Economic Principles
We’d all be better off if politicians spared us their experiments in subsidies, wages, and trade.

https://reason.com/2023/01/04/2022-proved-that-governments-cant-improve-on-good-economic-principles/

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

"Remember when trendy thinkers insisted that old-fashioned concepts about supply, demand, prices, and deficits had been swept away? They told us the economy could largely be molded as policymakers wished, promising a new world of prosperity directed from above. Then the pandemic came along, providing a test-case for high spending, money-supply expansion, and statist interventions. Ouch. Old-fashioned economic concepts turned out to be pretty current, after all.

"Some years induce us to question established theory, and to see new and unusual possibilities for the future," writes George Mason University professor of economics Tyler Cowen. "Not 2022. This is the year that orthodoxy took its revenge."

Cowen goes through a thorough round-up of the year, but signs were there from the beginning for anybody paying attention. In February of 2022, The New York Times profiled Modern Monetary Theory proponent Stephanie Kelton. As reporter Jeanna Smialek noted, MMT "posits that if a government controls its own currency and needs money … it can just print it, as long as its economy has the ability to churn out the needed goods and services." The piece was obviously planned as a celebration of Kelton. But after trillions of dollars in "stimulus" spending under two presidents, developments required a few notes of skepticism.

"Inflation had rocketed up to 7 percent. The government's debt pile has exploded to $30 trillion, up from about $10 trillion at the start of the 2008 downturn and $5 trillion in the mid-1990s," noted Smialek. "Some economists blame big spending in the pandemic for today's rapid price increases."

Inflation went higher from there, and not just in the United States. Countries that flooded the world with money found, as often predicted, that money bought less.

"About $16.9 trillion in fiscal measures was announced globally to fight the pandemic, with relatively larger support in advanced economies," the International Monetary Fund's Ruchir Agarwal and Miles Kimball commented in an analysis of high inflation. "A warning that the large fiscal stimulus, combined with easy monetary conditions, would lead to high and persistent inflation came from a group known as 'Team Persistent' … the evidence had shifted in favor of Team Persistent across several countries."

"Not long ago, economists insisted that demand shortfalls were perpetual and that stimulus was almost never excessive," adds Cowen. "That extreme version of the Keynesian view has been laid to rest, while a version of Milton Friedman's monetarism is ascendant once again."

Agarwal and Kimball also pointed to several other factors contributing to rising prices, including Russia's invasion of Ukraine, shifts in demand among customers sent home by lockdowns and social distancing, and labor disruptions. They noted that "lockdowns and mobility restrictions led to severe disruptions in various supply chains, causing short-term supply shortages."

This wasn't a new insight after months of backed-up shipping, shuttered factories, and empty shelves.

"Market economies tend to be pretty good at getting food on the supermarket shelves and fuel in petrol stations, if left to themselves," British economist Philip Pilkington had pointed out in 2021. "That last part is key: if left to themselves. Heavy-handed interference in market economies tends to produce the same pathologies we see in socialist economies, including shortages and inflation. That has been the unintended consequence of lockdown."

Fortunately, adds George Mason's Cowen, "a further lesson is that supply chains do untangle themselves. Photos of cargo ships waiting to be unloaded were once a regular feature of my news feed. The availability of foreign goods and services was spotty, and their prices could be high. Throughout 2022, most of those queues and logjams dissolved, as the market was allowed to operate. Once again, a very traditional approach to economics was vindicated."

If letting loose the magic of the market largely repaired the damage done by government officials interfering with supply chains, traditional market responses also helped to offset some damage done by another statist intervention. Pre-pandemic, left-wing activists pushed to hike the minimum wage, raising the price floor for labor. It had predictable results for employers and for entry-level and unskilled workers priced out of the market.

"New York City business owners are eliminating jobs, cutting hours, and raising prices in the wake of a $15 minimum wage hike implemented at the end of last year," Reason's Billy Binion wrote in 2019.

But the social disruptions of the last few years played havoc with work habits. "Labor supply participation remains below pre-pandemic levels in several countries," in the words of the IMF's Agarwal and Kimball. That means labor prices rose above the floor set by many minimum-wage laws.

"Wages have surged, particularly for low-wage workers, since the pandemic for several reasons, including widespread labor shortages," Austen Hufford reported last week for The Wall Street Journal. "Through September, the lowest 10 percent of workers by income in each state earned hourly wages that were on average one-third higher than their state's minimum wages."

Undoubtedly, inflation plays a role, too, since the money with which workers are paid loses value. Some states index minimum wages to inflation, but most don't, making minimums less relevant as the dollar amounts in which they're denominated buy less. Unfortunately, since high inflation continues, this means a race between rising wages and falling purchasing power, with too many people left poorer.

"Consumer prices rose 7.1 percent in November from a year before," adds Hufford. "After adjusting for inflation, average hourly earnings declined 1.9 percent over the same period for all private employees."

The market works very well, and in expected ways, when allowed to function. But it can't immediately undo all of the distortions created by extensive intervention in the economy.

"Centrally planning a fundamentally decentralized system isn't possible for very long," Tyler Cowen observes of the economic impact of China's failed COVID Zero policy.

That's an insight that could easily be applied to all the harm done in recent years by economic interventions. Allowed to function, free markets can, eventually, heal the damage done by government officials trying to "improve" on the voluntary interactions of millions of buyers, sellers, employers, and workers. But we'd all be better off if politicians just spared us the economic experiments."

MY COMMENT

Not going to happen....but you can always hope. The politicians and the bureaucrats......just can not stop themselves.

 

HERE is the closing update to the article that I posted earlier.

Stocks fall after strong labor market data

https://finance.yahoo.com/news/stock-market-news-live-updates-january-5-2023-123028965.html

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

"U.S. stocks sank Thursday after economic data showed continued tightness in the labor market that's likely to keep the Federal Reserve on track for higher interest rates. Investors also look ahead to tomorrow's key monthly jobs report.

The S&P 500 (^GSPC) plopped 1.2%, while the Dow Jones Industrial Average (^DJI) shed 340 points, or 1.0%. The technology-heavy Nasdaq Composite (^IXIC) tumbled by 1.5%.

The ADP National Employment report showed private payrolls grew by 235,000 jobs in December. Economists surveyed by Bloomberg called for an increase of 150,000.

Elsewhere in economic data, filings for unemployment insurance also fell to 204,000, the lowest since September, in the week ended Dec. 31 from the prior week's downwardly revised reading of 223,000, the Labor Department said Thursday.

The reports were the latest to reflect strong demand for workers, even as the Federal Reserve presses on with aggressive monetary tightening to rein in inflation. ADP's data and weekly jobless claims follow a separate measure Wednesday that found job openings fell less than expected last month and remained high. The Labor Department's monthly nonfarm payrolls survey due out Friday morning remains the most important reading for Fed officials and investors attempting to predict the next policy move."

etc, etc, etc.

MY COMMENT

A typical 2022 day in 2023. I have no current expectations for anything else at the moment. It looks like we will just continue to longer and perhaps drop from here well into 2023. There is nothing to stop this trend at the moment and the media and big investment banks are uniformly negative.

We will soon be back at the 2022 lows and will have a chance to test them. I am probably 1-2 days away from my account low that I hit four times last year and than bounced back up. With this being a new year I am assuming the worst....that when that low is hit again it will be BREACHED......perhaps by 5-10% is my view.

I continue to think that we have hit the market bottom....but as usual....I see it as a soft bottom that might have the potential to sink another 5-10% down int the mud.

 

I think this little article is pretty much spot on......the FED is probably screwed in their quest.

What the job market could look like in 2023, based on a surprisingly strong end to 2022

https://www.cnbc.com/2023/01/05/whats-in-store-for-the-job-market-hiring-and-quitting-in-2023.html

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

"2022 may have ended in a sea of overwhelmingly negative layoff news, but new data shows promise that the damage was minimal. It could be a sign the 2023 job market will launch on strong footing, economists say, even with fresh staffing cuts announced this week.

In November, the same month rocked by headline-making staff cuts across Big Tech, the U.S. labor market posted a near-historic low of 1.4 million layoffs, or less than 1% of the workforce, according to the latest Labor Department data.

Meanwhile, there were 10.5 million job openings, or roughly 1.7 vacancies per available worker. Companies were just barely backfilling the share of people leaving, making 6.1 million hires in the face of 5.9 million separations, which includes both voluntary and involuntary terminations.

And all the momentum behind quitting has yet to die down: 4.2 million people called it quits in November, marking the 18th straight month where north of 4 million people voluntarily left their jobs.

Here’s how recent data could spell a pretty good job market in 2023:

Blue-collar workers may have more job security than white-collar roles

As of November, layoffs were way below pre-pandemic norms for workers usually hit by economic turbulence, such as those in accommodation and food, construction and retail, says ZipRecruiter chief economist Julia Pollak.

But terminations have edged higher than pre-pandemic norms in information and finance. The tipping point goes back to July 2022, around the time the Federal Reserve started its aggressive interest rate hike campaign and recession fears really took off.

As a result, sectors sensitive to rising interest rates (like across finance and real estate) and ones hoping to borrow to grow at all costs (like tech) took big hits.

“In aggregate, layoffs are still way lower than pre-pandemic,” Pollak says. The combination of strong consumer demand in the face of high interest rates means “blue-collar workers have much greater job security, which isn’t the case in information and finance where white-collar workers have lower security.”

Job-seekers are ditching innovative (and risky) work to go ‘back to basics’

Recent mass layoffs around tech and finance are a result of companies over-hiring during a pandemic rebound around innovative (read: speculative) initiatives, like crypto and the metaverse.

In response, job-seekers are approaching 2023 by going “back to basics” and betting on jobs with proven security, Pollak says — especially around health care, legacy information technology and other “rock steady jobs where there’s demand today and in the foreseeable future.”

As of November, job openings ticked up for professional and business services, as well as manufacturing, and hiring shot up in health care and social assistance.

High turnover is here to stay, and people are getting jobs without looking

Job-seeker confidence has slid in recent months, and people are less likely to quit without a new job lined up. But despite economic worries, 4.2 million people quit their jobs in November.

Pollak says strong quitting numbers in the face of uncertainty suggests people are, in fact, walking out with a new offer in hand. High turnover could be the new normal, she adds, as remote and flexible work make it easier (and more advantageous) to change jobs.

Many businesses can’t replace quitters fast enough, like in accommodation and food. Even finance openings and information openings are up compared with February 2020. And that talent shortage is costing employers a lot.

So how do you “create” more job-seekers? You go after people who aren’t actively looking.

Some 36% of people who got a new job in last six months were recruited to the role, according to recent ZipRecruiter data, versus 20% pre-pandemic and as low as 4% in the 1990s, Pollak says.

“Companies are starved for talent and leaving money on the table because they can’t run at full capacity,” she adds, “and friends and family are begging them to come join their companies.”

Major corporations are winning the hiring game

Another thing to keep in mind on a job hunt? Big companies are making big hiring gains.

For months now, major enterprises with 5,000-plus employees are posting record job openings, Pollak says. Companies more resistant to economic shocks (those that provide essential goods and services, from health care to food), and raking in comfortable profits are using that steady growth to recruit intensely, she adds: “Enterprise companies have been the big winners in hiring”

January tends to be a a boom time for hiring because companies have new budgets and business goals. ZipRecruiter generally sees a 20% increase in job postings at the start of a new year, and Pollak says there’s no reason to believe 2023 won’t also start off with a strong hiring market."

MY COMMENT

Lets.....HOPE.....that we dont end up with worse inflation due to a nasty wage price spiral as the government continues to spend like drunken sailors and stimulate the economy and employers throw money at workers.

The economy is in for a BIG SHOCK over the next ten years as a HUGE number of baby boomers retire.