My account is just shy of going green for the day. Same 4 stocks still up for me as earlier......MSFT, NVDA, HD and GOOGL. I invest the way I do because it allows me to be.....all in all the time. It fits my comfort level. I remain fully invested for the long term as usual.
I feel good about today actually. I had a MICRO-LOSS so I was in the red. BUT....I got in a big beat on the SP500 by 1.10%. Lately I have been racking up the beats on the SP500. My four winners all day.....MSFT, NVDA, HD, and GOOGL were still my winners at the close. All in all a very nice week for me being in the green Monday, Tuesday, Wednesday and Thursday.......and holding losses to a minimum on Friday.
The markets have been giving my stocks good out-performance on the SP500 this year. At the close today I am at +10.65% year to date. the SP500 is at 2.01% year to date as of the close today. My stocks seem to be in favor lately.
ACTUALLY......a pretty killer week for the broad markets.....SP500, NASDAQ 100, and the NASDAQ. DOW year to date (-3.88%) DOW for the week (-0.15%) SP500 year to date (-2.01%) SP500 for the week +1.43% NASDAQ 100 year to date +14.66% NASDAQ 100 for the week +5.81% NASDAQ year to date +11.12% NASDAQ for the week +4.41% RUSSELL year to date (-2.01%) RUSSELL for the week (-2.46%) Not bad...most of us probably did well this week.
Looking at the above figures....it looks to me like the broad market had a really nice week this week. Many people were probably so focused on the banks....they did not notice that it was going to end up as a nice GAIN week. I am very happy with how the year is going so far....in spite of this little BLACK CHICKEN we are dealing with right now .....especially in terms of market and investor psychology. I say....."black chicken"....because this little event is not big enough to be a swan. Although.....I can see where people that are invested in banks and other financial related companies are not too happy.
My mom was my investing mentor as a child and as a teen. She was one of the very few....rare.....Americans that was a stock and fund investor starting in the 1950's. In fact the account that I use for data on here.....since it is my "cleanest" account with little to no activity......is what is left of my inherited half of my mom's account after buying my annuities for $1.8MILLION with funds from the account. When she died my sibling and I inherited her investment account....half each. At that time I was close to five years from age 70......and wanted to put my annuity plan in place. Since her holdings got a step up in basis at her death those funds were a very "clean"....tax and capital gain free....pot of funds to cash in for the annuity purchases. So....at age 65 I purchased 6 income annuities that were deferred till age 70. As a Side-note....my life-long retirement plan was to use 30 year Treasuries as a retirement income source....but....by the time I was near age 65 it was very obvious that the extremely low interest rates were not going to work to produce the income that I wanted in retirement. I wanted to put a lifetime income in place that would allow me to not have......EVER....... dip into personal assets for retirement income or needs. My plan has been working very nicely....providing us with a retirement income of just under $200,000 between the annuities, Social Security, and miscellaneous. My music earnings are nice but I dont rely or count on those funds since they could end at any time. Of course having no debt and a paid off house are a big part of the plan. We down-sized from our large house 4 years ago and that has been nice savings in taxes and expenses for utilities and upkeep. As Side-note number two......living debt free has always been part of our long term planing. We have not had a house payment since the 1980's and no other debt. Being a business owner for 22 years.....it was a godsend to not have a house payment or debt. She was a smart business woman working in the family......small town....... Abstract company and Savings &Loan as a teen and while in college. She was Valedictorian of her high school class and was one of four sisters that were put through college by their parents in the late 1930's and early 1940's. She intended to major in MATH in college but.....was not allowed to....she had to major in one of the "female" majors. She was a very astute investor.......and remained very involved and interested in investing....even after I took over management of her account in the 1990's. Here is a nice little article in honor of her: Speculative Women: A History of Female Investors https://investoramnesia.com/2023/03/12/speculative-women-a-history-of-female-investors/ MY COMMENT OBVIOUSLY....women have been involved in investing and business for a long, long, time. BUT....that fact is often ignored. It is just normal now and no one gives it a second thought. There has definitely been a double standard over history and up to the recent past. In fact I remember back in the early 1980's my unmarried sister wanted to buy a house. She was not able to get a mortgage as a single woman.....even though she had a good secure job. The mortgage companies would not even take an application from her. My parents had to agree to co-sign for her to even get a company to take her application. BUT.....once the company saw her assets and net worth.....they immediately backed off and did not require the co-sign. INSANITY....but this is how it was in the not too distant past.
To continue the above a bit....when I started in the business world in the 1970's.....I encountered many really smart and sharp older business women. Every business had an older female or two that did the books, ran the office, did the financial reports, did the taxes, basically was in charge of all the employees, etc, etc. Those ladies basically ran the place....they were very savvy and sharp. As a new "kid" in any business you did not want to get on their bad side. They could make or break you. It seemed like they all knew each other. I was in a medium size city....and it seemed like there was a network of those business women downtown that all knew each other. A very powerful but hidden network of ladies....basically running things in most businesses. Of course....much of that has now changed. When I started I saw the tail end of the......"old" ......business days. Many things were still being done as they had been done in the 1930's and on up to the 1970's. When I first started dictation equipment was a machine with a magnetic tape that you erased by holding a magnet against it as it went around. At my first job there were still dictating equipment in the junk closet that made an actual....."record"....that was played back on a record player. The IBM Selectric Typewriter was state of the art....and carbon paper was still being used at times. Companies that were large enough might have one or more Mag-Card machines.....kind of a crude memory storage machine for documents. Word processing was rare and crude. I remember giant word processing systems that used spools of paper tape with holes that could be used to store documents. I remember there were a very few businesses that used Telex machines that could send documents....kind of an early fax machine type of thing. I remember these early machines being used: "In 1969, Berezin started a company called Redactron to manufacture and sell the Data Secretary. In her role as founder and president, she cultivated law firms and corporate clients who soon realized the machine’s potential to reduce labour costs. While Redactron’s competitors in the word processing business relied on electronic relays and tapes, the Data Secretary’s advanced design incorporated early semiconductor chips and programmable logic to record and retrieve keystrokes for editing. Berezin even designed some of the semiconductors herself. In an industry dominated by men, she was unique – a female inventor and engineer and founder of one of the first tech startups." In the 1970s, although the market continued strong the economy suffered a serious inflation, increasing interest rates to a level (16%) which was untenable for a business like Redactron which operated in a world in which equipment was rented. The company was sold to the Burroughs Corporation in 1976, and integrated into its office equipment division. Berezin stayed on until 1979.[4] https://www.weforum.org/agenda/2019...f-work-and-youve-probably-never-heard-of-her/ In 1968, Berezin had the idea for a word processor to simplify the work of secretaries, and in 1969 she founded Redactron Corporation,[13][6] which became a public company and delivered thousands of systems to customers throughout its international marketing organization. The company's main product was called the "Data Secretary" and it was the size of a small refrigerator, had no screen, and the keyboard and printer was an IBM Selectric typewriter.[2] In the 1970s, although the market continued strong the economy suffered a serious inflation, increasing interest rates to a level (16%) which was untenable for a business like Redactron which operated in a world in which equipment was rented. The company was sold to the Burroughs Corporation in 1976, and integrated into its office equipment division. Berezin stayed on until 1979.[4] https://en.wikipedia.org/wiki/Evelyn_Berezin From the mid 1970's on......the changes in business equipment and document production and storage was MASSIVE......and happened very quickly. I got to see the tail end of the......"old days"....in the business world.
Sounds like good news for COSTCO shareholders.....some time this year. Costco Promises One Change People Will Hate (And Another Some Will Love) https://finance.yahoo.com/m/edb4d797-e707-35f6-973e-5e13f0a7ff4d/costco-promises-one-change.html (BOLD is my opinion OR what I consider important content) "The membership-based warehouse club has said that two major moves are coming that stockholders will love (members won't). The pandemic and rising prices have arguably helped Costco's business. The warehouse club has established a value-based business model that in tougher economic times brings in new customers while it reinforces the chain's bond with current ones. The success of that method can be seen in the sales numbers: For its most-recent quarter Costco (COST) - Get Free Report posted a 5.7% increase in U.S. same-store sales. As for average transaction size, the chain saw a slight increase globally and a 1.9% rise in the U.S., even as people made fewer big-ticket purchases. The numbers that should truly impress investors are the warehouse club's membership-retention and -growth rates. Chief Financial Officer Richard Galanti spoke about those numbers during Costco's second-quarter earnings call. "In terms of renewal rates, at second-quarter end our U.S. and Canada renewal [rate] was 92.6%, up 0.01% from Q1 end, and [the] worldwide rate came in at 90.5%, also up 0.01% from the prior quarter," he said. "Both represent all-time highs. "Membership growth has remained strong. We ended the second quarter with 68.1 million paid household members and 123 million cardholders, both up more than 7% versus a year earlier," That's all good news for Costco shareholders, but the best news might actually be something Galanti discussed much later in the call. Costco has always paid out dividends to shareholders. That number has steadily increased, but the company has also used its cash reserves to pay special dividends on four separate occasions. The most-recent one was a $10-a-share payout made in December 2020. Now, Galanti has made clear that even though rising interest rates mean that the company can make money on its cash balance, a special dividend is coming. "Well, it helps a little right now. So that's good news," Galanti said of higher interest rates. "I don't think it changes our view that the special dividend, which we've done for over the last 10 1/2 years, I think, it's still an arrow in our quiver. And at some point, it's something you might see again." Galanti did not offer a specific timetable for the shareholder payout. He sort of apologized for the omission. "[I'm] not trying to be cute. It's kind of like the membership question. We'll let you know when we do it," he added. Costco currently has roughly $13.5 billion in cash and cash equivalents. That's up from about $11 billion in the previous quarter. Memberships Will Be More Expensive Galanti also made clear that memberships will become more expensive. Gold membership currently costs $60 while executive membership, which comes with 2% cash back on most purchases up to $1,000 annually, costs $120. The chain also offers businesses versions of these memberships at the same prices. The company has generally raised the cost of a membership every five years, and that deadline has passed. "June would be our sixth anniversary. But -- and as I mentioned in the previous calls, looking at the last, I think, three, they averaged around five years and seven months, which is about now or last month," he said. "And what we said over the last few semesters -- over the last few quarters, it was -- I'm a college kid," he said. "For the last few quarters in our view, it's a question of when, not if." The CFO outlined how the extra cash would be spent once Costco decides to raise its membership rates. "...[Keep] in mind, that's one way that we become even more competitive. We take those monies and directly become more -- even more competitive," he said. When Costco raises its membership rates, it has pledged to use the added cash to hold down prices on items for which its costs go up. And it'll even lower some prices." MY COMMENT Sounds good to me. An amazing company.
Looking forward to seeing the NIKE earnings report next week on Tuesday. I never know whether to consider this the last of my earnings reports.......or.....the first.
Just glanced at the real estate listings for our little area of 4200 homes. Only 37 active listings out of 4200 homes. Twenty four of them are over $1MILLION. The HUGE price increases we saw......over the past few years....... are still sticking here. There is a house in my old neighborhood where our larger house was located before we downsized 4 years ago. At that time we sold for about $900,000.......5000 sq ft, five bed, six bath, a pool, amazing view, etc, etc. The house listed just now is the same size, but only 4 bed five bath, same style and builder......at $2.395MILLION. What a difference in four years.....although I dont think they will get that much. The INSANITY of our area and market. No....I am not jealous.....the house we downsized to.....3600 stft, 4 bed 3.5 bath......has gone up significantly since we bought it. It is also one story which we very much wanted so we could live here for many years as we age.
LOL.......Of course I have a show tonight....outside. It was in the mid 80's a few days ago and right now in the city where the show will be is is.......drum roll please.....50 degrees. When we start tonight it will be about.....45 degrees.
A good start to the week........that has not started yet. UBS agrees to buy Credit Suisse as global regulators reassure markets https://finance.yahoo.com/news/crunch-time-credit-suisse-talks-033651935.html
HERE is the week to come....FED WEEK. Fed decision, banking fallout, and Credit Suisse: What to know this week https://finance.yahoo.com/news/fed-...-suisse-what-to-know-this-week-143532997.html (BOLD is my opinion OR what I consider important content) "March has long been expected to serve as a pivotal month for the Federal Reserve. And after the month's first two weeks brought the central bank a year's worth of headlines, in the coming week what investors had expected to be the main event finally arrives. On Wednesday, the Fed will announce its latest monetary policy decision at 2 p.m. ET, with Fed Chair Jerome Powell set to follow this announcement with a press conference at 2:30 p.m. ET. Alongside its policy decision, the Fed will also publish updated forecasts for inflation, unemployment, economic growth, and interest rates for the balance of this year and beyond. After Powell testified before the Senate Banking Committee on March 7 that the Fed would likely raise rates "higher than previously anticipated" in response to stubborn inflation, investors were all but certain the Fed would raise the target range for its benchmark interest rate by 0.50% on March 22. Two days later, a nascent banking crisis cast a shadow over the Fed's plans. By Sunday night, March 12, the Fed was part of a government-led backstop of deposits across the U.S. financial system. Investors are now roughly split on whether the Fed will raise rates at all on Wednesday. "We still expect the Fed to raise its policy rate by 25 basis points next week but also convey a less strident inflation-fighting message than thought a few weeks ago aimed at calming market anxiety," wrote Bob Schwartz, senior economist at Oxford Economics, in a note to clients on Friday. "While the banking woes will certainly command attention, we believe that it is not systemic but more of a liquidity issue that the Fed can contain with its lending facilities," Schwartz added. "The wildcard going forward will be the reaction in the financial markets, as maintaining financial stability is one of the mandates of the Fed." Last week, government officials, regulators, and private sector leaders in the banking world sought to stabilize the U.S. financial system after the rapid collapse of Silicon Valley Bank and seizure of Signature Bank. The week's key development came Thursday afternoon when a consortium of 11 U.S. banking giants announced they would funnel some $30 billion in deposits to First Republic (FRC), which investors and regulators feared would be the next institution to fail. Even with last week's capital injection, shares of First Republic lost over 70%; on Friday alone the stock fell some 33%. Amid this flurry of news from the banking sector, the major U.S. stock indexes finished the week mixed, with the Nasdaq Composite (^IXIC) rising more than 4%, the S&P 500 (^GSPC) rising 1.4%, and the Dow Jones Industrial Average (^DJI) logging modest losses. Financial stocks were hard hit, however, with KBW Bank Index (^KBX) falling more than 14% for the week, while the KBW Regional Bank Index (^KRX) lost a little over 9%. Since the start of March, these indexes have lost 27% and 17%, respectively. Over the weekend, U.S. investors kept an eye toward Europe, where the latest reporting from the Financial Times suggested UBS (UBS) had agreed to a $2 billion deal to take over Credit Suisse (CS). Credit Suisse shares trading in New York closed Friday's session at $2.01. While developments from the Federal Reserve and the global banking world will remain the top focus for investors, a smattering of economic and earnings reports will garner attention throughout the week. Existing home sales data out Tuesday and Wednesday morning's weekly update on mortgage applications will offer readings on the housing sector, which has been an unexpected beneficiary of the banking crisis given the collapse in Treasury yields and resulting drop in mortgage rates. Investors will also keep a close eye on Thursday morning's reading on services and manufacturing activity from S&P Global. On the earnings side, results from Foot Locker (FL) on Monday, Nike (NKE) on Tuesday, Darden Restaurants (DRI) on Thursday will offer updates on the state of the U.S. consumer." MY COMMENT I have been looking forward to this week for a long time. After the FED either raises rates by 0.25% or stocks with "0"......we will probably be facing ONLY 1-2 more rate increases. over the next few months they will happen.....and the FED will be done. At that point they can talk till they are blue in the face.....who cares. Nicely......the banking BS has now taken a lot of the air out of the fed balloon. They now have to be careful with their BLABBING and trashing of the markets.
Personally I am expecting another GOOD WEEK next week. I am expecting the major averages.....excluding the DOW......to once again be in the green. the FED has now had its wings clipped. The banking BS is now for all purposes.....OVER. We will.....hopefully....get a 0.25% rate hike by the FED....leaving ONLY 1 or 2 more rate hikes to be completed over the next few months. Add these positives to the BULL MARKET that has been ongoing since July of 2022.....and there is a lot to be happy about going forward for......."actual"....investors. Now if you are a trader, especially in bonds, or specialist in bank stocks........just deal with it.
Not too bad....on the open today. About what you would expect with current conditions. We should have a good shot at a green close today to kick off FED WEEK.
As we continue with banking being the financial and regular media "darling"....for most investors the best way to deal with it is to simply....IGNORE IT ALL. When Headlines Worry You, Bank on Investment Principles https://www.dimensional.com/us-en/insights/when-headlines-worry-you-bank-on-investment-principles (BOLD is my opinion OR what I consider important content) "On Friday, March 10, regulators took control of Silicon Valley Bank as a run on the bank unfolded. Two days later, regulators took control of a second lender, Signature Bank. With increasing anxiety, many investors are eyeing their portfolios for exposure to these and other regional banks. Rather than rummaging through your portfolio looking for trouble when headlines make you anxious, turn instead to your investment plan. Hopefully, your plan is designed with your long-term goals in mind and is based on principles that you can stick with, given your personal risk tolerances. While every investor’s plan is a bit different, ignoring headlines and focusing on the following time-tested principles may help you avoid making shortsighted missteps. 1. Uncertainty Is Unavoidable Remember that uncertainty is nothing new and investing comes with risks. Consider the events of the last three years alone: a global pandemic, the Russian invasion of Ukraine, spiking inflation, and ongoing recession fears. In other words, it may have seemed as if there were plenty of reasons to panic. Despite these concerns, for the three years ending February 28, 2023, the Russell 3000 Index (a broad market-capitalization-weighted index of public US companies) returned an annualized 11.79%, slightly outpacing its average annualized returns of 11.65% since inception in January 1979. The past three years certainly make a case for weathering short-term ups and downs and sticking with your plan. 2. Market Timing Is Futile Inevitably, when events turn bleak and headlines warn of worse to come, some investors’ thoughts turn to market timing. The idea of using short-term strategies to avoid near-term pain without missing out on long-term gains is seductive, but research repeatedly demonstrates that timing strategies are not effective. The impact of miscalculating your timing strategy can far outweigh the perceived benefits. 3. “Diversification Is Your Buddy” Nobel laureate Merton Miller famously used to say, “Diversification is your buddy.” Thanks to financial innovations over the last century in the form of mutual funds, and later ETFs, most investors can access broadly diversified investment strategies at very low costs. While not all risks—including a systemic risk such as an economic recession—can be diversified away (see Principle 1 above), diversification is still an incredibly effective tool for reducing many risks investors face. In particular, diversification can reduce the potential pain caused by the poor performance of a single company, industry, or country.1 As of February 28, Silicon Valley Bank (SIVB) represented just 0.04% of the Russell 3000, while regional banks represented approximately 1.70%.2 For investors with globally diversified portfolios, exposure to SIVB and other US-based regional banks likely was significantly smaller. If buddying up with diversification is part of your investment plan, headline moments can help drive home the long-term benefits of your approach. When the unexpected happens, many investors feel like they should be doing something with their portfolios. Often, headlines and pundits stoke these sentiments with predictions of more doom and gloom. For the long-term investor, however, planning for what can happen is far more powerful than trying to predict what will happen" MY COMMENT As usual the default way to handle just about anything the markets torow at you is to simply.....DO NOTHING. For me that means remaining fully invested as usual. My portfolio is very concentrated to ten BIG CAP companies. they are my sztock list and also dominate my two funds....SP500 Index and Fidelity Contra Fund. BUT.....I still get much diversification from the approximately 40% of my account that is the funds. I personally see the SP500 as the greatest most significant way to diversify a portfolio. I dont see anything better than owning the 500 GREATEST companies in the world.
AND.....with the banking BS and the FED soon to fade in the news.....I am just starting to see articles today about the upcoming earnings. of course those articles are fear mongering the next earnings as the next BIG negative event to hit the markets...... after the banking crisis. BROTHER.
the markets today.....if you care. Stock market news today: Stocks wobble after UBS buys Credit Suisse https://finance.yahoo.com/news/stock-market-news-today-live-updates-march-20-2023-113900660.html (BOLD is my opinion OR what I consider important content) "U.S. stocks wobbled Monday morning following UBS's deal to buy smaller rival Credit Suisse, in a bid to avoid further market-shaking turmoil in global banking. “The [market] will need to digest the M&A from the weekend and then await the results of the FDIC auctions to see whether it agrees that contagion is contained,” the US Market Intelligence team at JPMorgan said in a note to clients. The yield on the benchmark 10-year U.S. Treasury note moved up to 3.4% Monday morning. On the front end of the yield curve, two-year yields were mostly unchanged. UBS struck a deal to purchase the troubled Credit Suisse at a steep discount Sunday afternoon. Markets looked at the more than $3 billion takeover with skepticism as shares of Credit Suisse (CS) tumbled Monday morning, while UBS Group AG (UBS) stock gained. "This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue," UBS chair Colm Kelleher said in a statement. Bank sentiment somewhat rebounded, with the KBW Bank index (^BKX) moving higher Monday. Large-cap index members including Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all traded higher. Other regional bank stocks sank, including First Republic Bank (FRC), as S&P Global Ratings downgraded FRC for the second time in four days. The bank’s credit rating moved three notches downward to B+. PacWest Bancorp (PACW) and Zions Bancorporation (ZION) , Western Alliance Bancorporation (WAL) and Regions Financial (RF) all traded up Monday morning. Separately, Signature Bank’s deposits have found a buyer. Flagstar Bank, a subsidiary of New York Community Bank (NYCB), bought the majority of deposits and some loan portfolios of the failed crypto lender. Shares of New York Community Bancorp rallied Monday. On the other hand, Silicon Valley Bank was warned by BlackRock consultants about its risk controls. According to a Financial Times report, the now-failed bank got a “gentleman’s C” in a 2022 report that showed substantial deficiencies. Meanwhile, Silicon Valley Bank remains unsold. The Federal Deposit Insurance Corp. (FDIC) has extended the bidding process, the agency said Monday in a press release, will be taking separate offers for the bank's commercial and private lending side. Separately, Bloomberg reported that Warren Buffet has been in talks with the Biden Administration about investing in the US regional banking sector. All three major indexes and bond yields fell Friday, wrapping up a tumultuous week as concerns rose following the turmoil in the bank sector. Investors pulled back from their positions in First Republic (FRC) and other regional bank shares, which came a day after a commitment from a group of banks banded together to deposit $30 billion into First Republic, in a bid to boost confidence in the banking system. Despite the down session, the S&P 500 settled 1.4% higher on the week and the Nasdaq jumped more than 4%. Friday's slide pulled the Dow Jones average slightly negative for the week. The headliner event of the week will be a crucial two-day meeting of the Federal Reserve's policy-making committee, with some investors debating over the potential hawkish tilt. The bets continue, with Bank of America forecasting the Fed will lift target range will lift by 25 basis points to 4.75-5.0% and maintain its balance sheet runoff. Economists at BofA are under the assumption that the emergence of financial stress is likely to indicate to the committee that monetary policy is close to “sufficiently restrictive.” Meanwhile, Moody’s economist Mark Zandi is taking a firmer stance that the central bank should loosen its tightening policy due to higher recession risks. "If they raise rates, that qualifies as a mistake, and I would call it an egregious mistake," he warned. The Fed, along with other central banks, have gotten involved amid the ongoing banking turmoil. The world's leading central banks announced actions that would aim to keep U.S. dollars flowing easily throughout the global banking system. Outside the Fed’s rate debate, economic reports are due to pour in, including housing data, services and manufacturing activity readings from S&P Global. Shares of Starbucks (SBUX) gained Monday after the coffee company named Laxman Narasimhan as the officially CEO of the Seattle-based coffee chain. Foot Locker (FL) shares added after the retailer profit expectations for this year came in lower than anticipated. On the earnings calendar, results from Nike (NKE) Darden Restaurants (DRI) are set to be released this week providing an update on the state of the consumer. Elsewhere overseas, Chinese President Xi Jinping is in Moscow this week, talking with Russian President Vladimir Putin amid sharpening East-West tensions over the war in Ukraine and the latest sign of Beijing’s emboldened diplomatic ambitions." MY COMMENT YES.....I hope the FED does raise rates this week.....by 0.25%. I want to see us push toward the final rate hikes. If we can get a rate hike this week......we WILL be within 1-2 hikes of being done. At that point the FED will be at about 5.5% to 6%.....and will pause. The markets will be able to normalize and move forward without the constant overhang of the FED. AND.....every day that we move forward this week with nothing more than scary headlines and fear mongering about the banks......is another positive. As long term investors.......we simply ENDURE it all as usual and do nothing.
I like this little article.....although in my mind the BEAR MARKET ended last July. Morgan Stanley Strategist Says Bank Stress Signals Bear Market End https://finance.yahoo.com/news/morgan-stanley-strategist-says-bank-062003064.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- Morgan Stanley’s Michael Wilson said the stress in the banking system marks what’s likely to be the beginning of a painful and “vicious” end to the bear market in US stocks. “With the back-stopping of bank deposits by the Fed/FDIC, many equity investors are asking if this is another form of QE and therefore ‘risk on’,” the strategist — who correctly predicted the selloff in stocks last year and rebound in October — wrote in a note. “We argue it’s not, and instead represents the beginning of the end of the bear market as falling credit availability squeezes growth out of the economy.” The S&P 500 will remain unattractive until equity risk premium climbs to as high as 400 basis points from the current 230 level, according to Wilson, who is known for being one of Wall Street’s staunchest bears. “The last part of the bear can be vicious and highly correlated,” he said. “Prices fall sharply via an equity risk premium spike that is very hard to prevent or defend in one’s portfolio.” The collapse of Silicon Valley Bank and selloff in Credit Suisse Group AG shares have fueled concerns about the health of the global financial system this month, roiling markets. US equity futures declined on Monday after UBS Group AG’s agreement to buy Credit Suisse and central bank moves to boost dollar liquidity failed to calm investor worries about the health of the global banking system. “This is exactly how bear markets end — an unforeseen catalyst that is obvious in hindsight forces market participants to acknowledge what has been right in front of them the entire time,” Wilson wrote. The ongoing turmoil in the banking system should lead investors to focus on the deteriorating growth outlook amid restrictive credit conditions, according to Wilson. “The events of the past week mean that credit availability is decreasing for a wide swath of the economy, which may be the catalyst that finally convinces market participants that earnings estimates are too high,” he wrote, adding that the risk of a credit crunch has increased materially. The strategist expects analysts to slash expectations as the reporting season approaches, while corporates prepare to lower guidance in a notable way, he said. He recommends positioning in defensive, low-beta sectors and stocks, while cautioning against the view that mega-cap technology shares are immune to growth concerns. Wilson is not alone in forecasting a tough time ahead for markets. JPMorgan Chase & Co. strategists led by Mislav Matejka said the inverted yield curve will be “proven right,” signaling a recession ahead. The first quarter will likely be the high point for stocks this year, he wrote in a note, adding that equities won’t reach lows until the Fed has pivoted to rate cuts." MY COMMENT I like this take on where we are.....although......I do NOT agree with the very negative slant to the end of the bear market. I do agree that this banking stuff is exactly the sort of catalyst event that we often see when a bear market ends. i just dont see a market drop and difficult times for the markets as a result.....at least for an extended time.
The BIG CAP world continues to consolidate business and raise productivity by cutting workers. A good thing for investors in th companies that are doing this. BAD NEWS for workers. Amazon to lay off 9,000 more workers in addition to earlier cuts https://www.cnbc.com/2023/03/20/amazon-layoffs-company-to-cut-off-9000-more-workers.html MY COMMENT It is ridiculous the perks and wasted money that the BIG CAP tech companies put in place for workers. It is also ridiculous how they over-hired. In spite of all the fear mongering......yes typical.....TWITTER seems to be doing just fine with a work force reduced by 50% to 70%. Who would have ever imagined that. What were all those unnecessary workers doing for all that time? Apologies to anyone that has been fired of laid off by a big cap company. BUt....that is reality. These jobs ARE NOT going to come back.....at least in this country.
