I do like the fact that the Ten Year Treasury yield....despite being up at the moment....has backed off from the open. Treasury yields hold steady as investors assess the state of the U.S. economy https://www.cnbc.com/2023/03/30/us-treasury-yields-investors-assess-the-state-of-the-us-economy.html (BOLD is my opinion OR what I consider important content) "U.S. Treasury yields were little changed on Thursday as investors looked to economic data that could provide fresh hints about the outlook for the economy and inflation. The yield on the 10-year Treasury added 6 basis points to 3.568%. The 2-year Treasury was last trading at 4.132% after rising by around three basis points. Yields and prices move in opposite directions and one basis point equals 0.01%. Investors assessed the state of the economy as recent market turmoil led by the banking sector settled. Regional and global banks have been under pressure since the collapse of Silicon Valley Bank earlier this month, prompting fears about a financial crisis. Both stock and bond markets have since been highly volatile. Investors also considered how that may affect interest rate policy, as uncertainty about the U.S. Federal Reserve’s plans has spread among investors. Though the Fed hinted that rate hikes could be paused sooner than expected after it announced a 25 basis point rate increase last week, officials have also said that their battle against inflation is still ongoing. The Fed has pursued tighter monetary policy since early 2022 in an effort to cool the economy. A series of Fed speakers are slated to make remarks on Thursday, which investors will be scanning. Also on Thursday, initial jobless claims data and gross domestic product figures are expected. One of the Fed’s favored inflation measures, the personal consumption expenditures price index, is due Friday." MY COMMENT Looks like the Ten Year Treasury will not be a big market factor today....at least to the negative side. We are transitioning back to the same old same old.....a silly focus on minute, short term, economic data that has little to no real relevance to long term investors....or for that matter.....anyone outside the Wall Street trading community. Sounds good to me.......as usual.....SHOW ME THE MONEY.
Can you believe it. We have now survived the following: The pandemic and all the disruptions it caused. The economic shut down. The FED rate hikes and all the disruptions they caused. The constant trashing of the markets by the FED. The banking crisis.......a market "black chicken" (too small to be a swan). It has been an EPIC THREE YEARS for investors. Anyone that managed to hang in there over this time span is tough as nails. It is hard to remember a time period that presented as many challenges to investors as this three year time period. I STILL consider the time period of the late 1970's and early 1980's as MUCH MORE challenging. BUT....most people alive today dont remember anything about that era. So to them....it did not happen, and did not exist.
Things are looking good today....if we can avoid the dreaded last hour fade. S&P 500 rises to a 3-week high as investors bet the banking crisis has stabilized https://www.cnbc.com/2023/03/29/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "The S&P 500 rose Thursday, as investors bet the worst of the regional bank crisis has passed. The S&P 500 rose 0.4% to its highest since March 7, bringing its gain from the benchmark’s March low during the height of bank fears to about 6%. The Nasdaq Composite advanced 0.6% as tech stocks continued to see renewed investor interest. The Dow Jones Industrial Average traded slightly higher by about 97 points. The Cboe Volatility Index, Wall Street’s preferred measure of how turbulent the S&P 500 will be over the next 30 days, has pulled back to the 19 level after reaching 30 in the middle of March. Wall Street’s fear gauge is back to where it was when the month began. Weekly jobless claims increased by 7,000 to 198,000, adding to hopes that the Federal Reserve could slow down its tightening campaign because the labor market is cooling. Chip stocks such as AMD were among the market’s best performers. The VanEck Vector Semiconductor ETF (SMH) climbed 1.4% on Thursday, bringing its year-to-date gain to more than 28%. Also in tech, shares of Amazon and Apple were higher. For the month, the Nasdaq Composite is up more than 4% while the S&P 500 has gained nearly 2% as investors shook off the collapse of Silicon Valley Bank and yet another rate increase from the Fed. To be sure, some investors believe the market may be getting ahead of itself. “Collectively, financial markets are pricing in the best of both worlds – a recession that allows rates to be low and brings inflation down sharply, yet one that does not have a massively negative effect on corporate earnings,” Barclays analyst Ajay Rajadhyaksha wrote in a Thursday note." MY COMMENT We seem to be having a relatively normal market year this year. Yes.....the bank "thing" was a bump in the dark....but "things" often happen during the course of any NORMAL year of investing. With the approaching END to the FED rate hikes quickly approaching....the markets should be on track for a nice rest of the year. Of course the markets will experience the typical up and down times over this year as well as the typical CORRECTIONS. this is just part of the reality of being an investor. It is all about the long term results and averages......plus PROBABILITY.
You know sometimes I think about where we would be, if some of that had not happened (covid stuff). Not that it really matters, what is done is done. Over time it always seems to be something that nobody could have seen coming. We can have all of the analysts, market experts, economist, and other fortune tellers, and they examine and study charts, financial reports, economic reports and everything else associated with it. In the end, it always seems to be something or surprise that simply was not part of any of it. Sometimes we look back and think we should have known, but in reality, it just isn't that simple. That is why it is so hard to predict much with any accuracy. Sure, sometimes if things "go as they should" we can make a logical guess. More often it is that "unknown" somewhere over the horizon that is just impossible to know. I don't worry about it, but it is interesting to think about. A good takeaway is that with each difficult time comes and goes we as investors learn a little more about ourselves and we develop a little more armor for the next time. Experience can be invaluable to an investor as time passes.
At least we are quickly moving the bad year last year to the history books and beyond to the trash heap. We are moving on nicely so far this year. I am seeing my accounts moving quickly toward +14% year to date. I am not there yet but am heading there quickly.....perhaps in a day or two. ALL the random and other events are why there is no alternative to long term investing. It is simply impossible to invest for the short term and try to market time and trade your way around all the short term events. In my lifetime I have never known anyone or seen anyone that can do it.
I have to go run some errand...but I wanted to see the close before I go. At the close I had another nice gain for the day. My only down stocks today were NKE and GOOGL. I also got a beat on the SP500 by 0.12% today. This good market....is starting to get to be a habit. LETS FINISH THE WEEK TOMORROW IN STYLE.
Our latest inflation rate vs previous months.... February 28, 2023 6.04% January 31, 2023 6.41% December 31, 2022 6.45% November 30, 2022 7.11% October 31, 2022 7.75% September 30, 2022 8.20%
The details on the PCE report below....under the microscope of course. I prefer looking at something like the post I made earlier rather than these small increment/splitting hairs type articles, but that's just me. ECONOMY Key Fed inflation gauge rose 0.3% in February, less than expected An inflation gauge the Federal Reserve follows closely rose slightly less than anticipated in February, providing some hope that interest rate hikes are helping ease price increases. The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the 0.5% January increase. On a 12-month basis, core PCE increased 4.6%, a slight deceleration from the level in January. Including food and energy, headline PCE increased 0.3% monthly and 5% annually, compared to 0.6% and 5.3% in January. The softer than expected data came with monthly energy prices decreasing 0.4% while food prices rose 0.2%. Goods prices rose 0.2% while services increased 0.3%. In other data from the report, personal income increased 0.3%, slightly above the 0.2% estimate. Consumer spending increased 0.2%, compared to the 0.3% estimate. Stock market futures held higher following the report while longer-duration Treasury yields declined. Market pricing Friday morning following the inflation report indicated a slight bias towards the Fed raising its benchmark rate another quarter percentage point in May. The Fed’s own unofficial projections released last week pointed to perhaps one more increase this year and no reductions. However, traders expect cuts this year, with end-year pricing for the federal funds rate at 4.25%-4.5%, half a point below the current target range. While inflation has ebbed in some areas, it has remained pernicious in others. Shelter costs in particular have risen sharply. Fed officials, though, are looking through that increase and expect rents to decelerate through the year. Still, inflation is likely to remain well above the Fed’s 2% target into 2024, and officials have said they remain focused on bringing down prices despite the current bank turmoil. Data released Thursday suggests that the problems in banking also may be at least under control. Borrowing through two emergency Fed lending programs decreased slightly last week, indicating that there has been no frantic liquidity dash for banks that may be undercapitalized.
To continue what Smokie started. the markets are open and doing very nicely today. A typical....recent....day in the markets. NOTHING going on and the markets like it. The banking "stuff" continues to recede. OBVIOUSLY totally knocked out of the news today and for the coming weeks. The markets and the country will now be distracted by DRAMA for a while....that is a good thing for investors. A key inflation gauge tracked by the Fed slowed in February https://finance.yahoo.com/news/key-inflation-gauge-tracked-fed-123736411.html (BOLD is my opinion OR what I consider important content) "WASHINGTON (AP) — The Federal Reserve's favored inflation gauge slowed sharply last month, an encouraging sign in the Fed's yearlong effort to cool price pressures through steadily higher interest rates. Friday’s report from the Commerce Department showed that consumer prices rose 0.3% from January to February, down from a 0.6% increase from December to January. Measured year-over-year, prices rose 5%, slower than the 5.3% annual increase in January. Excluding volatile food and energy prices, so-called core inflation rose 0.3% from January and 4.6% from a year earlier. Both reflected slowdowns from the previous month. The Fed is believed to pay particular attention to the core measure as a gauge of underlying inflation pressures. The report also showed that consumer spending rose 0.2% from January to February, a drop from a hefty 2% increase a month earlier. Taken as a whole, Friday's figures show that inflation pressures, though easing gradually, still maintain a grip on the economy. The Fed has raised its benchmark rate nine times since March of last year in a strenuous drive to tame inflation, which hit a four-decade high in mid-2022. Job openings remain plentiful, hiring is still strong, layoffs are still low and the unemployment rate is barely above a half-century low. A result has been upward pressure on wages, which have contributed to inflationary pressures. Even after having slowed, consumer prices are still posting year-over-year increases well above the Fed's 2% target. Earlier this month, the Labor Department said its consumer price index rose 0.4% from January to February and 6% from February 2022. The Fed’s policymaking has been complicated by the tumult that erupted in the financial system after the collapse this month of Silicon Valley Bank and New York-based Signature — the second- and third-biggest bank failures in U.S. history. The central bank now must consider the risk that its continuing efforts to cool inflation through ever-higher interest rates could further destabilize the banking system. At a news conference last week, Fed Chair Jerome Powell acknowledged that the uncertainties now overhanging small and midsize banks will likely cause tighter lending conditions. If banks do restrict lending in the coming months, Powell noted, it would probably slow the economy and perhaps act as the equivalent of a Fed rate hike. “The Fed’s preferred inflation measures are off recent peaks but remain well above target, showing slow progress in response to tighter monetary policy,'' said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "Elevated price pressures, coupled with strong job growth that is restoring incomes and is supporting demand, should keep the Fed on track to hike rates further.'' Many American families are still feeling squeezed by higher prices. “I can go get a $5 meal at Wendy’s, which isn’t even healthy, but that’s cheaper than buying the ingredients to make a meal at home,’’ said Jennifer Schultz of St. Joseph, Missouri. “Eggs started to skyrocket, meat’s gone up tremendously, a gallon of milk: staple products that our seniors needed — they were really being affected by the inflation and still are," said Michelle Fagerstone, chief development officer at St. Joseph’s Second Harvest Community Food Bank. On Friday, the European Union reported that inflation in the 20 countries that use the euro currency slowed to its lowest level in a year as energy prices dropped, though food costs still rose, keeping pressure on the European Central Bank to raise rates further. Consumer prices in the eurozone jumped 6.9% in March from a year earlier, down from 8.5% in February. Eurozone inflation has been easing since peaking at 10.6% in October. In the United States, the Fed is thought to monitor the inflation gauge that was issued Friday, called the personal consumption expenditures (PCE) price index, even more closely than it does the government’s better-known consumer price index. Typically, the PCE index shows a lower inflation level than CPI. In part, that’s because rents, which have been among the biggest drivers of inflation, carry twice the weight in the CPI that they do in the PCE. The PCE price index also seeks to account for changes in how people shop when inflation jumps. As a result, it can capture emerging trends — when, for example, consumers shift away from pricey national brands in favor of less expensive store brands." MY COMMENT AMAZING.....after an entire year of raising rates, TRASHING the stock markets and flooding the media with constant badgering of the American people and economy......the FED has NOTHING much to show for any of it. Inflation after all this is down about 1% to 1.5%. PLUS.....it is likely this would have happened over the past year as supply chains and demand has mostly normalized post pandemic. SO....in reality....the FED has really achieved NOTHING. Of course they will all be congratulating each other and doing speaking tours with fawning fans and sycophants all around them. Who knows....it might even be time for them all to give each other medals and beauty contest style sashes. That is how you boost your resume in Washington DC.
I have a suggestion for the FED on how to win the inflation battle. Simply move your ridiculous....borderline deflation......measure of inflation from 2% to what would ACTUALLY be the normal range of inflation for a healthy economy in the worlds most dominant business country.....3% to 4%. There is absolutely NO DATA to back up the 2% target. If you research this and historic levels of inflation....this is just a made up number. It is meaningless. If they adopted a NORMAL inflation range of 3-4% as their target they could instantly claim that inflation was now down close to their target. Wait and see....if the CRUSH inflation down to 2%.....you will soon start to hear the media, economists, and other talking about the DEFLATION issue.
Speaking of looking back. We closed out the SP 500 at 3,666 on June 16, 2022 and went along and fell again in the SP 500 to 3,577 on October 12, 2022.
HERE is the markets today.......hanging in there nicely. Stocks rise as first quarter wraps up: Stock market news today https://finance.yahoo.com/news/stoc...aps-up-stock-market-news-today-125051425.html (BOLD is my opinion OR what I consider important content) "Stocks opened higher on Friday as the final trading day of an eventful first quarter gets underway. Shortly after the opening bell on Friday, the S&P 500 (^GSPC) was up 0.3%, the Dow Jones Industrial Average (^DJI) rose 0.5, and the technology-heavy Nasdaq Composite (^IXIC) gained 0.2%. Stock futures perked up on Friday morning after inflation data showed further cooling in the personal consumption expenditures (PCE) index, which is the Fed's preferred measure of inflation. In February, "core" PCE, which strips out the more volatile costs of food and energy, rose 0.3% over the prior month and 4.6% over last year, with the annual increase coming in below Wall Street expectations for a 4.7% rise. A slowdown in inflation could ease pressure the Federal Reserve feels to continue with its rate-hiking campaign, which Fed officials earlier this week suggested will likely continue this spring given price increases that remain too high and a bank crisis that has shown signs of ebbing. Friday will serve as the final trading session in a quarter that, as Yahoo Finance's Jared Blikre noted, has brought to the fore some market trends from days gone by, most significantly the outperformance of tech stocks. Through Thursday's close, the Nasdaq 100 was up more than 18%, so far this year with names like Apple (AAPL) and Amazon (AMZN) up more than 20%. Tesla (TSLA) and Meta Platforms (META) have gained more than 60% so far this year. In a note to clients published Thursday, Fundstrat's Tom Lee highlighted that bull markets tend to start with two consecutive quarterly gains for the S&P 500, which will be confirmed at Friday's close after the S&P 500 rose 7% in the fourth quarter of 2022. "The first quarter of 2023 is coming to a close Friday and despite a wrenching banking crisis, the S&P is up +5.5% and up +2.3% for the month of March," Lee wrote. "Many skeptics (anecdotally, the majority of our clients) are likely sniffing at these gains, as mere noise until the bear market re-asserts itself. But for reasons outlined below, we believe 1Q23 gains now solidifies that 'bears are now trapped.'" In addition to noting the two-straight quarterly gains, Lee argued the bank crisis appears to be a blip rather than a protracted event, CFTC data shows traders remain net short the market, and April has been the S&P 500's best month over the last 20- and 50-year periods. "Bottom line: It is the bears who are trapped and could fuel further gains in April," Lee wrote." MY COMMENT YES....the bears and the shorts are trapped. They are trapped by their thinking and lack of vision. They are not seeing reality. BUT....they will come around soon enough. Once pressure builds from their clients they will rush into the markets with massive amounts of money. It will be their typical herd behavior. I STILL continue to say.....we have been in a bull market for over 6 months now. As to the BIG CAP tech companies......DUH. These are the most dominant companies in the world. How they have been treated over the past year is ridiculous. UNFORTUNATELY for most investors the opportunity to buy these companies at massive discounts is now over. Bank crisis......what bank crisis?
YES......I am not going to say a word about the story of the day. It is simply NOT relevant to long term investors in the slightest. Nothing but a media DRAMA-FEST. AND.....I dont do politics in this thread. Apparently the markets agree.....since all the averages are nicely in the green today.
Speaking of the SP500. I became more and more confident of the bull market as we saw a number....perhaps 3 or 4 attempts last year........to make new lows after June. In my portfolios.....I went down to my low of the year a number of times between June and the end of the year. Each time the markets turned around and went back up. After seeing this happen 3-4 times....I was confident that we had seen the bottom and it was holding. BUT wait, what if I was or am wrong? Do I care....no. I am fully invested all the time. So there is ZERO impact on me if I am wrong on the bull market or the market bottom. At this point I have about a 14% cushion as a result of the little stealth bull rally we have been seeing for 6+ months now. The markets dont just go straight up....they are a constant combination of UP and DOWN with rallies and corrections mixed together......even in a BULL MARKET.
The one good thing about the little bit of inflation data that we got today......it is seen by the FED as meaning something. SO.....this could be a good indicator that the FED will only do one more rate hike. My strong belief is that there will be ONE or TWO more rate hikes. This data makes it a bit more likely that we will only see one more rate hike. Whether there is one or two hikes....my strong belief is that any hike to come will be 0.25%.
If you really want to get down in the weeds....here you go. The most important change in this regulatory package is the payment for order flow (PFOF) changes that are being proposed. Just from reading this little article I am not sure I would favor the change. Seems to me there will be much potential for market disruption and the collapse of the order system in a crisis under this new and unproven system that is being proposed. The whole....proposed process....seems very unwieldy to me. BUT....talking about the regulatory process as a single individual investor.......a waste of time and thought. Wall Street lines up against SEC chair Gary Gensler on one of his most controversial proposals https://www.cnbc.com/2023/03/31/wal...ensler-on-one-of-his-controversial-ideas.html
OK....an hour into the day the markets looking good. the Ten year Treasury is down today at 3.532%. Another good thing for the markets today as we are about to close the week and the month. In the old days we wold be looking forward to a nice market BOOST in April. We would see this happen all the time....in the old days..... as investors made their IRA deposits to meet the April 15 deadline. NOW.....this is simply as I said......the old days. In fact most investors today probably dont have any memory of this. It is just a little piece of historic chaff.
This week has been nice to see no news (market wise). Really pleasant to see much about nothing. I'm sure it will return to the usual hair on fire, but it has been nice to see....nothing.
Siting in the car waiting for a lawyer appointment. No not a bad thing. Routine business, Listening to the markets on sat radio. Market’s booming.
For some of our international friends. I have noticed this too, since the start of the year. I actually have a small allocation in an international index fund. It has done really well this year and at times gave a little boost when the US was red. Over the past 6 months or so it has done exceptionally well. It's about time it got its act together...LOL. I have kind of enjoyed watching the differences during that time. Whether it holds or continues the trend I have no idea, but I found it interesting. I am not advocating for or against any international investing with this post. I am really conservative with mine. It holds only developed markets and avoids some countries I won't mention. That's just the way I do it and it fits my comfort level in regard to international. Anyways, something different to add to the thread and below is a small article about it. Mar 29, 2023 at 8:11 am ET International stocks outperform, decouple from U.S. equities by ‘unusual degree’ By Christine Idzelis International stocks are broadly outperforming this quarter, decoupling from the U.S. to an unusual extent, according to DataTrek Research. “Non-US stocks have decoupled from domestic equities by a statistically unusual degree over the last 50 days,” said Nicholas Colas, co-founder of DataTrek, in a note Tuesday. This together with their outperformance may bode well for flows into international stocks heading into the second quarter, according to the note. “Lower than average correlations and positive returns are often magnets for incremental institutional capital,” wrote Colas, “so we expect to see non-US stocks continue to outperform domestic stocks as we start Q2.” The iShares MSCI ACWI ex U.S. ETF, which tracks global stocks outside the U.S., and the iShares MSCI EAFE ETF, which focuses on developed-market stocks in Europe, Australia and the Far East, are outperforming the S&P 500 in 2023.
