I see that this little thread will hit a MILESTONE in about a month or so.........1MILLION VIEWS. Of course.....900,000 of them are....."me". So I guess there is still some level of interest in long term investing. We......long term investors......are definately the "silent majority" of the investment world. The VAST majority of the daily commentary and investing content is short term "stuff". I am thinking there should be a PRIZE for whoever is the poster or lurker that is view # 1MILLION. Perhaps something like.........lunch with Janet Yellen. Of course......"you" will have to pick up the tab. Other ideas?
OMG....say it is not true.....NEWS-FLASH.....I just heard on the business TV that TUPPERWARE is in bad shape and will likely disappear. The end of an era. A huge WWII generation and BABY BOOMER cultural event......the Tupperware party.
I just MADE A TRADE.....in my account. I added $5000 to my SP500 Index Fund. I intend to add about $15,000 to the SP500 Index Fund this year......so.....I now have about $10,000 to go. With cash flow needs I expect that I will add the rest of the funds some time in the mid to late summer. As usual I put in this $5000....all in all at once......when I saw that the money was available. This purchase will actually happen after the close today.....as is the norm when buying or selling a "fund".
In conjunction with going into my account for the above purchase......I got a look at how I was doing to far today. I am seeing FIVE stocks UP and FIVE stocks DOWN. The UP stocks are.....NKE, COST, NVDA, HD, and HON. The DOWN stocks are.....AAPL, AMZN, MSFT, GOOGL, and TSLA. Today so far.......it is primarily my non-tech stocks that are helping to hold down the losses in my portfolio. They are doing their job.
I have been doing a little housekeeping on my calendar since it is such a BORING and MEANINGLESS day today in the markets. HERE is my earnings calendar: TSLA April 19 MSFT April 25 GOOG April 25 AMZN April 27 HON April 27 APPL May 4 HD May 16 NVDA May 24 COST May 25 NKE June 26 These dates are tentative and may change as we get closer to the actual reporting.
The markets are attempting a MILD mid-morning come-back. BUT....all the averages are still in the red....with the SP500 and NASDAQ not really close to going green. SP500 (-0.47%)........NASDAQ (-0.72%. The key today for me to end up in the green will be for the losses in Microsoft and Apple to lessen as the day goes on to allow my five or so stocks that are non-tech and positive to carry the day for me. On one hand.....since I am buying $5000 of the SP500 Index at the close......I dont want to see a positive market today. I NEVER actively try to time the markets......but if I happen to get in on a negative day, I will take it. The markets seem so DULL today.....I am guessing that we are seeing some HANGOVER from Easter.....but I have not looked at volume data.
OK......so what. It might be time to worry about a recession again: Morning Brief https://finance.yahoo.com/news/it-m...-recession-again-morning-brief-123040956.html BOLD is my opinion OR what I consider important content) "It could be time to resurface use of the ‘R’ word in your financial lexicon. No, not ‘R’ as in PE ratio. But ‘R’ as in recession, as in a contraction in economic growth. I know what you are probably wondering. How is this guy going to pontificate about a recession following a month that created 236,000 headline jobs? How is this guy going to warn the investing masses about a recession when shares of Nvidia are up 85% year to date, followed not too closely behind by an 80% surge in Meta? All of that is precisely why I am bringing up recession. Well, that and because economic data is beginning to soften. April has brought with it rain showers, a miss on ISM manufacturing data, a miss on job openings data, and a miss on the ADP employment report. The GDPNow read on economic growth from the Atlanta Fed has also ticked lower. “We are seeing cracks in the labor market,” John Hancock Investment Management Co-Chief Investment Strategist Emily Roland told me, Seana Smith, and Brad Smith moments after the jobs report on Yahoo Finance Live. The aforementioned jobs increase for March was below the year-to-date average increase of 344,000, let’s keep in mind. Roland thinks we are still likely to get a recession this year and acknowledges we are headed into a “tricky” part of the economic cycle. Meanwhile, Samsung warned on Friday about a semiconductor glut. Several weeks ago, Micron offered up a similar vibe when it reported earnings. Despite the fresh warnings, those aforementioned tech names – and even speculative AI names such as SoundHound — continue to push higher. Many investors are ignoring what looks to be a slowdown in the economy fueled in part by the Fed’s aggressive rate hikes (one more is on the way soon, RSM chief economist Joe Brusuelas tells us). Not all investors are overlooking it, as seen in the strong moves in gold and silver prices, and utilities and consumer staples stocks. But enough are to call it out. Bottom line: this is not an official recession call from Yahoo Finance, we don’t do that stuff. Besides, it’s damn near impossible to pick successful stocks and economic cycles. All I am asking is that you pay attention to the new messages the economy is throwing off – it will matter to your wealth, believe me. Happy Trading!' MY COMMENT WELL......I just dont see it at the moment. The economy is STILL extremely strong as are jobs. I do see the small business economy still struggling to survive the economic closure with much turmoil going on for small business. As to all the list of recent "misses" above.....none of them are significant in terms of predicting a recession. In fact.....I see ALL of them as very POSITIVE for investors. An indication that the FED is probably done with rate hikes after doing one more at 0.25% in May. As a long term investor this is simply NOT relevant to me. I do not invest or buy and sell to try to avoid recessions. They are simply part of the normal economic process. AND....recession does not necessarily mean a down stock market. I have seen times over the years when the markets boomed in spite of recession. NOW......that ending......"HAPPY TRADING....really grates on my nerves. Most people are NOT "traders" and that sort of phrase simply reinforces bad investing behavior in people that think that is what investing means.
NOW.....this is what I call a real crisis. Beer inflation is still ‘a bit stubborn,’ Constellation Brands CEO says https://finance.yahoo.com/news/beer...-constellation-brands-ceo-says-184018781.html (BOLD is my opinion OR what I consider important content) "Inflation is still fizzing up in the beer industry, according to the maker of well-known beer brands Corona and Modelo. "It has moderated some, but it's certainly not back to where it was before the inflationary trend started," Constellation Brands CEO Bill Newlands said on Yahoo Finance Live (video above). "Certainly inflation is one of those characteristics that have been a bit stubborn." Stubborn and not good for the beer giant's bottom line, either. Constellation Brands (STZ) reported a 15% year-over-year plunge in its beer segment's operating profits for the recently completed quarter. The primary reason: across-the-board inflation in areas like transportation and packaging. To combat inflation, Constellation Brands is lifting prices by 1% to 2% in its business. It's also diving deeper into the red-hot ready-to-drink cocktail market and non-alcoholic market, segments of the alcohol industry that lend themselves to higher-priced products. Newlands noted that sales at the start of the current quarter have been solid despite a more reserved consumer and higher prices for its products. Constellation Brands has joined rival AB-InBev (BUD) in calling out persistent inflation. The Budweiser maker saw its operating profit margins fall to 24.6% in its most recent quarter from 25.7% last year, as reported in early March. "Inflation was above what was originally planned [last year]," AB-InBev CEO Michel Doukeris told analysts on a conference call. Shares of Big Beer reflect the uncertain outlook on margins brought on by inflation and a more cautious consumer." The stock prices of Boston Beer (SAM), Molson Coors (TAP), and Constellation Brands have all lagged the 6.7% year-to-date gain for the S&P 500, according to Yahoo Finance data. The worst performer of the group is Constellation Brands, which is down about 3.5%. "We are mindful of potential short-term issues if the U.S. consumer is under pressure, including the possible impact from a recession," JP Morgan beverage analyst Andrea Teixeira wrote in a client note. "First, while the market has been supported by strong consumer spending, there are some increasing concerns on the purchasing power for U.S. consumers, given the broader inflationary backdrop (e.g. energy/fuel, food, etc.) denting disposable income at an unprecedented level on a 15-year perspective."" MY COMMENT HO NO.......not beer. Is nothing sacred? Luckily I dont drink much. I have owned Constellation Brands a few times over the years. I never held it for more than a year before giving up and selling it. I guess at this point you could add ALCOHOL companies to the list of stocks that I will NEVER own. As with most of that list....these companies are extremely boom and bust and cyclical.
About as bad as you would expect. FTX execs ‘joked internally’ about losing track of millions in assets, misused customer funds, and ‘stifled dissent,’ new debtor’s report says https://fortune.com/2023/04/10/ftx-execs-sbf-joked-losing-track-millions-new-debtor-report/ (BOLD is my opinion OR what I consider important content) "A new report filed in the ongoing autopsy of failed crypto exchange FTX reveals a litany of accusations against the company including executives who laughed about losing track of millions, a culture that cracked down on anyone who flagged potential problems, and a total disregard for normal accounting principals. A group of FTX’s debtors, led by current CEO and chief restructuring officer John Ray III, filed a 39-page report with the U.S. Bankruptcy Court for the District of Delaware Sunday detailing the demise of the exchange along with its trading arm Alameda Research. They allege that FTX was completely controlled by a small cabal of executives, helmed by co-founder and former CEO Sam Bankman-Fried (SBF), who failed to institute proper accounting, security, and management practices, putting the firm’s “crypto assets and funds at risk from the outset.” “While the FTX Group’s failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its root causes are familiar: hubris, incompetence, and greed,” they wrote. SBF and his top execs, including co-founder Gary Wang and Alameda Research’s CEO Caroline Ellison, “stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown,” the report says. The allegations come after a swift fall from grace for crypto’s former golden boy, SBF, and his once high-flying exchange. In early 2022, after cryptocurrency prices soared throughout the pandemic, FTX was valued at $32 billion and SBF himself was reportedly worth $16 billion. But less than a year later, in November, the company filed for Chapter 11 bankruptcy after a liquidity crisis eventually revealed a $7 billion hole in its balance sheet. The legal fallout from FTX’s collapse was swift. SBF was arrested by Bahamian authorities in December and has since pleaded not guilty to 13 Federal indictments against him for a variety of criminal charges including wire fraud and conspiracy to commit money laundering. The former CEO’s trial is now scheduled to begin in October, but other top lieutenants including Gary Wang and Caroline Ellison, as well as former engineering chief Nishad Singh, all already pleaded guilty to fraud charges last year. Now, FTX’s debtors say they’ve recovered over $1.4 billion in digital assets since the exchange went under and identified an additional $1.7 billion that can be recovered. In the process, they’ve also uncovered numerous behind-the-scenes details about how SBF operated his crypto empire. And they say they are still gaining “new information daily” and will submit “additional findings in due course.” Missing millions? ‘Such is life’ Revelations about the shoddy state of FTX’s corporate controls before its collapse have flooded headlines over the past five months, but the latest court documents show just how out of hand the situation may have been. There was a “pervasive lack of records” at the company, the debtor’s report alleges, noting execs didn’t even have a list of all their employees. The lack of identifiable records for clients and employees led SBF and his team to lose track of millions in assets regularly. FTX famously used the accounting software QuickBooks, which is meant for small businesses and consumers, to run what was then the world’s second-largest crypto exchange by volume. But the debtors’ report found that 56 entities within the FTX didn’t produce financial statements at all, while 35 FTX entities used QuickBooks and “a hodgepodge of Google documents, Slack communications, shared drives, and Excel spreadsheets and other non-enterprise solutions to manage their assets and liabilities.” The debtors also claimed that FTX’s expenses and invoices were submitted on a Slack channel and approved via emoji. “These informal, ephemeral messaging systems were used to procure approvals for transfers in the tens of millions of dollars, leaving only informal records of such transfers, or no records at all,” they wrote. The situation at Alameda was even worse, according to the report, which labels the firm a speculative “crypto hedge fund.” When putting together Alameda’s June 2022 “Portfolio summary,” SBF reportedly told his staff to just “come up with some numbers” when it came to labeling certain token values. And in internal communications with fellow execs, SBF called Alameda “hilariously beyond any threshold of any auditor being able to even get partially through an audit.” “We sometimes find $50m of assets lying around that we lost track of; such is life,” he wrote. The report also alleged, as has been widely reported, that millions of dollars of FTX’s holdings made their way into the hands of former insiders who lived lavish lifestyles and bought expensive real estate. “Numerous loans were executed between former insiders and Alameda without contemporaneous documentation, and funds were disbursed pursuant to those purported loans with no clear record of their purpose,” the report says. Stifling dissent and not so secure FTX was not only mismanaging its accounting and risk controls. According to the debtors report, top executives led by SBF also attempted to silence any attempts to “enhance” compliance. The president of FTX.US, Brett Harrison, resigned after a disagreement with SBF and his and engineering chief Singh about the company’s opaque management structure, key hires, and other issues. “[A]fter raising these issues directly with them, his bonus was drastically reduced and senior internal counsel instructed him to apologize to Bankman-Fried for raising the concerns, which he refused to do,” the report says. Even legal counsel wasn’t safe from backlash from SBF and his team of top execs. The debtors allege that a lawyer hired by FTX’s trading arm was fired after “expressing concerns” about a “lack of corporate controls, capable leadership, and risk management.” The debtor’s report also found that while FTX advertised itself as a safe place to store cryptocurrencies, it kept most of its assets in “hot-wallets” which made them “more susceptible to hacking, theft [and] misappropriation.” And the firm’s tech was apparently hanging on by a thread, too. One former FTX employee said that “if Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary [Wang].” MY COMMENT EXACTLY what you would expect considering who the top executives were. These were people with absolutely ZERO business or management experience. In real life they were just as dysfunctional as you would think just by looking at them and hearing them talk. Why or how anyone in their right mind would trust any of this group of MORONS is beyond me.
NICE.....I start the week with a green day today. I also got in a beat on the SP500 by 0.25%. All in all considering the open and how the day just lingered....I am very happy to end the day with some new money in my account. I ended up with six of ten stocks in the green today. My losers were.....AAPL, MSFT, GOOGL, and TSLA. My initial loss moderated through the day and turned positive some time in the last hour or two. It has been very difficult lately for the markets to stay negative for long. MOVING ON UP.
Nice little uphill climb today to get back positive. I haven't paid much attention to anything market related today, but nice to peek in at the close to see some progress was made from where it began.
Here is the end to the day now that it is all settled. Stocks waver, yields inch higher after strong jobs report https://finance.yahoo.com/news/stock-market-news-today-live-updates-april-10-2023-121105758.html (BOLD is my opinion OR what I consider important content) "U.S. stocks wavered Monday as stocks reversed early-session losses after the release of Friday's jobs report showed continued strength in the labor market. The S&P 500 (^GSPC) climbed 0.1%, while the Dow Jones Industrial Average (^DJI) added 0.3%, ending the day on an upbeat note.The technology-heavy Nasdaq Composite (^IXIC) dipped just below the flatline. Government bonds yields were higher. The yield on the 10-year note climbed to 3.42%, while rate-sensitive two-year note yields gained to 4.01% Monday. Crude oil (CL=F) slipped below $80 a barrel Monday after hovering around that level most of the last few days."......etc, etc, etc. MY COMMENT Nothing else to say about today. A very mild news and investing day. LETS HIT IT HARD TOMORROW.
The usual....recently BLAND open and market today. NOTHING is happening and there is no real direction to the markets in the short term. Part of this is that the financial media has totally worn everyone out with the constant fear mongering and doom and gloom of the past three years. We have now reached the time when everyone is just worn out by it all. I think the other reason is that the FED has now lost all ability to breathlessly move the markets with their actions and especially their comments. Everyone is tired of them too. They have failed to move the inflation needle much and people have just adapted to inflation. The one fear mongering topic that is still moving people and investors is the renewed fear of recession. The fear that the FED has gone too far and we will see the result over the next 6-12 months. In other words......DEFLATION. Could be....time will tell.....but at the moment I see the markets REFUSING to see the reality of all conditions lining up nicely for a continued BULL MARKET. A lot of people are invested psychologically and mentally in the bear market. They are locked in to the past......they are not able to see. BUT.....this is how the markets always work.
Sounds about right. How Financial Experts Convince You that They’re the Experts https://www.promarket.org/2023/04/08/how-financial-experts-convince-you-that-theyre-the-experts/ (BOLD is my opinion OR what I consider important content) "In The Spectacle of Expertise: Why Financial Analysts Perform in the Media, Alex Preda explores how financial analysts produce their advice and convince audiences of their expertise. What follows is an excerpt from his books In the ensuing conversation, the analysts repeatedly utter apologies for not having clarified enough previous statements. They make even longer interventions. They introduce and define new terms, such as “capital flows.” They make reference to empirical evidence regarding such flows from mainland China, the number of available properties in Hong Kong, and government housing policies. All this without intervention from the anchor, who repeatedly summarizes only the divergent points of view, as in the following instance: Anchor (after two long interventions from each analyst, following the interventions reproduced in the previous excerpt): Let me summarize what’s been said so far. I think both [Analyst 1] and [Analyst 2] have touched upon how there are various influential factors on demand and supply. But both also had very different perspectives. [Analyst 1] talked about monetary capital, unfinished properties, physical supply, and the fact that there is no such thing as rigid/inelastic demand. Whereas [Analyst 2] made it clear that potential purchasing power equates to a positive property market, which allows for this potential to be released. This summary, whether accurate or not, allows the analysts to subsequently talk about their disagreements on capital flows from mainland China, equilibrium between supply and demand, and the top end of the real estate market as factors impacting real estate prices. They bring up numbers as evidence for or against the influence of such factors. While the anchor tries to animate them (“Analyst 1 talked about . . . Whereas Analyst 2 made it clear that . . .”), the analysts are quick to regain footing. It is only from this moment on that a relationship between expert talk and financial realities can be investigated, not as a given but as an issue both analysts grapple with in their talk. As such, this relationship allows for disagreements and weighing the role of various factors (e.g., capital flows, local purchasing power)—in short, for uncertainties. However, it was not easy to establish the conditions under which, at least in this case, expert public talk engages with the truth. It took considerable work for the parties to agree to and practice an engagement with each other and with the audience that allowed for uncertainties and disagreements. It took the analysts about fifteen minutes of negotiation before the show started to agree that they would search for the truth. It took a recounting of their history of rivalry and their oblique comments made against each other. It took a call by the anchor to the parties to speak the truth as a moral obligation. The analysts had to make an effort to align their talk around a set of issues that are the object of controversy between them. And it took their effort to nearly restrict the anchor from intermediating with summaries of previous turns (albeit temporarily) to regain their footing. When it comes to expert talk in the media, engagement with the truth does not appear to be natural, easy, or automatically expected by the parties involved. At least in cases such as this one, it appears to be difficult requiring a summoning of moral obligations, negotiations, agreement, alignment, and direct engagement of the parties. One argument that could be made in this case is that each party offered their own narrative; for instance, a narrative about capital flows, another about purchasing power, and yet another about inelastic demand, and so on. It would be difficult, if not impossible, to establish the truth about such narratives, as each is equally plausible, and each analyst would try to promote his own version of the story. “Narrative” in this case would mean a relatively coherent telling of a “causally related series of events” (Richardson 2000: 170), such as “Developers who do not finish buildings on time lead to a housing crisis,” or “Capital flowing into Hong Kong leads to very high real estate prices, which lead to a housing crisis.” If that were the case, though, efforts to align talk would be superfluous, and so would summons to moral obligations. We would have seen a number of narratives being proffered by each party, and perhaps attempts to drown each other and talk past each other. However, this is not what we observe in this case. What we would call fresh talk—talk that is different from a pre- set narrative—depends on a common frame of reference. This frame is provided by models, miniworlds produced within the game of finance, according to the rules of that game. This mini- world includes, among other elements, supply and demand, elasticity, equilibrium, capital flows, and markets. It includes numbers with the help of which each element of the miniworld can be evaluated. Each analyst takes a particular evaluative position, one that can be acknowledged or contested by the other. If there is a search for plausibility in this debate, it is conducted according to specific rules, which took some effort to negotiate. The narratives proffered are not random. They are not simply about a past chain of events but can be projected into the future. Such projections, in their turn, require recourse to the properties of the miniworld in question, which raises the question whether engagement with the truth is about a particular narrative or something else. In other words, what is at stake here? The truth of one narrative versus another, or the truth of something bigger?" MY COMMENT NOT a great article. It is an excerpt from a book so it lacks much context. BUT.....many of us have an idea what it is getting at based on our own experiences watching and hearing "experts" on TV and in the media all day long. This "stuff" and the growth of the "expert" profession are a function of the TV and media sound bite world. NOTHING is evaluated in depth and NOTHING is challenged in any real fashion. I see and hear it all day long....."experts" on investing and finance out there spouting their little niche of expertise with little to no push back by the host or writer. In reality the host or writer usually has no real expertise.....they are a media person......not a financial or investing expert themselves. So they just put it all out there and have no idea if what they are pushing on the public is true or not. That is the CRUX of the modern media.....there is no TRUTH.
The markets today. Stocks edge higher as key inflation data looms https://finance.yahoo.com/news/stock-market-news-today-live-updates-april-11-2023-115735469.html (BOLD is my opinion OR what I consider important content) "U.S. stocks moved higher Tuesday as key inflation data and the start of earnings season loomed on the week's calendar. At the open, the S&P 500 (^GSPC) and theDow Jones Industrial Average (^DJI) added about 0.1%. The technology-heavy Nasdaq Composite (^IXIC) dipped by 0.1%. Government bond yields were lower. The yield on the 10-year note was unchanged, while rate-sensitive two-year note yields slid to 3.99% Tuesday morning. Wall Street kicked off the week on a modestly upbeat note ahead of inflation data out on Wednesday and bank earnings on deck for Friday. The S&P 500 recovered from early losses to finish the session higher, up 0.1%. Inflation data will dominate the headlines this week, with bank earnings also in sight. Economists surveyed by Bloomberg expect March’s consumer price index to climb 0.3% from February’s figure, lowering the year-over-year inflation rate to 5.2%. “This is the week that could tell us that the US consumer is no longer showing resilience and in fact is rather weak; core inflation is making things more expensive, retail sales might show the consumer is tapped out, and the banks might paint a picture that American savings accounts are down and credit card debt is skyrocketing,” OANDA analyst Edward Moya said in a note. This comes after the Labor Department reported that nonfarm payrolls rose by 236,000 in March, slightly below consensus estimates for 240,000. That's down from February's revised 326,000, the slowest since December 2020. The unemployment rate fell to 3.5%, while the labor force participation rate climbed to a post-COVID era high of 62.6%. With another strong jobs report in hand, investors are responding by changing their probability of another rate hike from the Fed at their next meeting. Markets are now pricing in a 68% probability that the Federal Reserve will raise interest rates by another 0.25% in May, according to data from the CME Group. Separately, the minutes from the Fed’s late-March meeting will be released on Wednesday, giving more insight into the central bank’s policy moves. This week’s main central bank policy decision will come from the Bank of Canada on Wednesday. Policymakers announced a pause in rate hikes at their meeting in January, and investors are anticipating that rates will remain unchanged. Elsewhere, global policymakers gathered in Washington for the IMF and World Bank spring meetings. The International Monetary Fund warned Tuesday of slowing global growth amid banking sector vulnerability. The IMF projects the global economy will expand at 2.8% this year, slightly lower than its January estimate of 2.9%. Also on Wall Street’s plate this week will be earnings from the bank heavyweights, including Wells Fargo (WFC), JPMorgan (JPM), BlackRock (BLK), and Citi (C) on tap Friday. Banks have had a weak start to the year amid the sector's turmoil, with the KBW Banks Index (^BKX) down 20% this year. With the first-quarter season underway, tech stocks have made a sudden turnaround from an ugly 2022. Some analysts continue to see the upside ahead for the sector. “We continue to believe that Tech will be trading better this year than it did last, but at the same time, think that recent Tech run is getting stretched, in absolute terms,” Mislav Matejka, head of global and European equity strategy at JPMorgan, wrote in a note to clients. “It is looking overbought, close to all-time highs, with RSIs [relative strength index] that are nearing elevated territory.” And the question remains if tech will keep driving the market higher. In single stock moves, HEXO Corp. (HEXO) plunged 25% after Tilray Brands announced it would acquire the cannabis company as the industry continues to consolidate. Coinbase Global, Inc. (COIN) shares climbed 5% after Bitcoin USD (BTC-USD) blew past $30,000. Bitcoin has risen 7.51% in the last seven days, according to CoinMarketCap data." MY COMMENT Not much here....nothing is happening at the moment. Fine with me.......nothing wrong with a boring market that goes under the radar for a while.
We are of course starting to see the....."usual"....when it comes to earnings. The earnings recession is about to begin https://finance.yahoo.com/news/the-earnings-recession-is-about-to-begin-213005398.html (BOLD is my opinion OR what I consider important content) "First quarter earnings season will ramp up this week with several big banks reporting results on Friday. And when this earnings period largely wraps up by Memorial Day, analysts expect one clear takeaway to emerge — corporate America is in an earnings recession. After earnings per share for S&P 500 companies fell 4.6% in the fourth quarter of 2022, earnings are expected to drop 6.8% from the prior year in the first quarter of 2023, according to data from FactSet. "Analysts and companies have been more pessimistic in their earnings outlooks for the first quarter compared to historical averages," wrote FactSet's John Butters in a note. "As a result, estimated earnings for the S&P 500 for the first quarter are lower today compared to expectations at the start of the quarter. The index is now expected to report its largest year-over-year decline in earnings since Q2 2020." With two-straight quarters of year-over-year earnings declines, this pushes profits for the market's biggest companies into a recession. By definition, investor debate about what is "priced in" to the market can never be settled. This is what the market is for, after all. Whether this earnings recession is confirming the obvious or serves as new information is a question we'll leave investors to sort out. But the market's behavior last year that saw the S&P 500 endure its steepest drop since 2008 suggested investors were bracing for corporate results like those feeding through now and what may be coming in the quarters ahead. During the first quarter, analysts cut expected per-share earnings growth by 6.2%; over the last decade, the average intra-quarter decline in earnings expectations is 3.3%. And the news isn't expected to get much better in the second quarter, with FactSet noting expectations for Q2 are that earnings for the S&P 500 will drop another 4.6% from the prior year. In the third quarter, earnings are expected to return to growth. With recent data from the manufacturing sector, services sector, and the U.S. labor market suggesting a downturn in the economy is drawing nearer, this downturn in the corporate world doesn't come as a total surprise. After all, investors have been fretting over a seemingly imminent U.S. recession for most of the last year as surging inflation and aggressive rate hikes have set off indicators warning of a future downturn in growth. But some strategists don't think the market is done pricing in gloomier outlooks for profits. And expect that investors will eventually heed the warnings being sent by corporate bottom lines. "Investors may be looking through an earnings contraction in 2023 to a strong recovery next year, essentially in a bid to pay peak multiples on trough earnings," wrote Barclays strategist Venu Krishna in a note to clients on Monday. "However, we are confident that [next twelve months] EPS cuts are far from done; consensus estimates look consistently too optimistic even a few months away, and a potential recession only increases the degree to which forward estimates overestimate actual earnings." As FactSet's work flagged, earnings estimates for first quarter earnings have come down sharply while estimates for the full-year remain relatively firm. Investors are still expecting the S&P 500 to earn$219 per share in 2023; Barclays expects full-year earnings to come in closer to $200 per share. Earnings forecasts for the first quarter of this year have dropped sharply, while expectations for the balance of 2023 have held firm. Barclays strategists expect this to change in the coming months. (Source: Barclays) "Ultimately, we believe the market is still pricing in a 'no landing' scenario: one where the Fed brings inflation under control (perhaps at a level somewhat higher than its 2% target), while economic growth skirts a recession and eventually rebounds strongly in 2024," the firm wrote. "This is the outcome that best supports current consensus, and we just don't see it. Our base case continues to be for a shallow recession to occur this year, and if the history of recessionary bear markets (particularly high-inflationary ones) is a guide, both sides of the P/E multiple remain exposed to asymmetric downside risks."" MY COMMENT Here is your negative view. We have seen this view put out there every quarter for at least the past 7-8 quarters. Over that time these dire warnings have NEVER come true. Once it a while they might actually happen to be right. Not because these people know anything....but because they are likely to stumble into being right once in a while by random chance. I note that....as usual....this little article is total opinion.....there is really nothing to back up the content. Since these sorts of predictions are OVERWHELMINGLY WRONG......I will go with the "probabilities" and say they will be wrong again this time around. But as a long term investor....who knows and who cares. In the end what will matter to most investors will be what they happen to own and why they own it.
At the moment I am reliving yesterday. At this moment I have five stocks UP and five stocks DOWN. My UP stocks are....NKE, COST, HD, HON, and TSLA. The big cap tech world is currently SPOOKED by the APPLE and PC sales data......plus.....a drop in Amazon today. I have to admit that the management of most of the BIG CAP TECH companies and Amazon has been pretty underwhelming lately in their silence and their lack of vision being related to the public and investors. They all seem to be continuing to LOWER expectations. In the end it will be up to CONSUMERS to call the shots and determine where we go from here. We have not been seeing much in the way of new products or product excitement lately. We are in a LULL at the moment.
I dont see this being discussed anywhere in the financial media. You would think that this would be a topic of interest....outside of politics. But unfortunately.....NO. Federal budget deficit hits $1.1 trillion over six months: CBO estimates https://thehill.com/business/budget...s-1-1-trillion-over-six-months-cbo-estimates/ "The federal budget deficit reached $1.1 trillion in the first six months of fiscal 2023, the Congressional Budget Office (CBO) estimated in a report released Monday. The estimate is $430 billion higher than the shortfall recorded during the same period last year, the office said, as spending rose 13 percent from the previous six-month window and revenues fell by 3 percent. The government brought in $2 trillion in receipts in the six-month period beginning Oct. 1, the CBO said in the latest monthly budget review report. The figure is $73 billion lower than the same period in fiscal 2022. Income and payroll tax receipts fell by 2 percent, or $33 billion, and remittances from the Federal Reserve fell from $61 billion to less than $1 billion. “Higher short-term interest rates raised the central bank’s interest expenses above its income, eliminating the profits of most Federal Reserve banks,” the CBO said. The recent estimates showed government spending also jumped over the six-month stretch when compared to the previous year, as outlays rose by 13 percent, or $357 billion. Overall, the CBO estimates total outlays hit $3.1 trillion between October and March. The spike coincides with an estimated increase of 11 percent, or $132 billion, on net for the government’s largest mandatory spending programs, including Social Security and Medicare. The CBO estimated a 10 percent increase in spending for Social Security benefits, amounting to $61 billion. The office credited the rise to “increases both in the number of beneficiaries and in the average benefit payment, which rose primarily because of cost-of-living adjustments.” Outlays for Medicare also rose by an estimated 14 percent during the same period, or $49 billion, amid “changes in payment rates and in the types and quantity of care beneficiaries received,” the CBO said. The office also said Medicaid outlays climbed by 8 percent, or $22 billion, due to enrollment increases attributed to pandemic-era policy changes. The report also pointed to other significant increases in spending, including net outlays on interest on the public debt, which it noted rose by 41 percent, or $90 billion, from the same period in fiscal 2022. The change was largely “because interest rates are significantly higher than they were in the first six months of fiscal year 2022,” the office said. The office said outlays of the Federal Deposit Insurance Corporation also increased by $29 billion “when it invoked a ‘systemic risk exception’ in March in response to a pair of bank failures.” It also pointed to the ongoing nationwide student loan payment pause as a key contributor behind an increase of 75 percent, or $53 billion, to outlays for the Department of Education." MY COMMENT Even this little article just about makes your eyes glaze over. Mind staggering numbers. No wonder the FED is simply treading water and having little to no impact. I dont expect inflation to get below about 4.5 to 5% even if there is a recession. The average person has no interest in this sort of stuff because there is nothing they can do and it is easier to simply ignore it all.
In regard to the media and their "earnings recession"....this is another one of those things they have harped about since forever. I can't remember the last time they really didn't make some dire prediction. I also noticed how they switch quite quickly to something new when they face plant. For example, the bank crises was the end of the world at the time a few weeks ago. They were making comparisons to 2008. That really showed how many of them were clueless about the event...it was not even close to what happened back then. Then we went on a jobs/employment rip...everyone was going to be unemployed. Well, those numbers haven't showed up either. Then it was consumers....well, they kept right on spending. Throw in all of the FED predictions of a pause or rate increase and all of the endless speculation about what was going to happen that did not or happened to be the opposite of their little crystal ball. The constant drama over every little detail and report. We have now come full circle back to earnings. Of course, we knew they would get back to it at some point. The media is simply just on recycle mode. My point, as usual, is for long term investors to keep focus on what you can control....don't get too emotional about any of it. What MAY or MAY NOT occur in reference to the economy or the markets is going to occur whether we worry in angst or throw a party about it. Have a good/rational plan that fits your financial life and goals is about all you can do. We cannot change the FED, employment, earnings, rate hikes, inflationary environment, or politicians.
I like this little article.....a once in a while.....theme of mine. How the great home working experiment fell apart https://finance.yahoo.com/news/great-home-working-experiment-fell-080000785.html (BOLD is my opinion OR what I consider important content) "Tens of thousands of Facebook employees had been working from home for just two months when Mark Zuckerberg made a bold prediction: in a few years, half of the company’s employees would not regularly come into the office. “I think we could have 50pc of our people working remotely,” Zuckerberg said in May 2020, talking up the advantages of staff not being chained to a desk such as more diverse hiring and less pollution. “There are some very clear benefits to remote work.” Two years later, Zuckerberg has appeared to alter his stance. As he announced a brutal round of layoffs at Facebook’s parent company Meta earlier this year, Zuckerberg suggested that staff did a better job when in the office – at least early in their career. “Engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely,” Zuckerberg said. “Our hypothesis is that it is still easier to build trust in person.” Although he said Meta remained committed to “distributed work”, the statement marked a shift in thinking that has been mirrored across the tech industry: employees are wanted back at their desks. Amazon chief executive Andy Jassy has ordered employees to be back in the office a minimum of three days a week from next month, following Apple, which made the move in September. At Twitter, Elon Musk has largely reversed a policy allowing staff to be fully remote, to the extent that some have been sleeping at the office. The diktats contrast with the early days of the pandemic, when Big Tech was at the vanguard of what was then seen as a long-term revolution in how people work. Google, Twitter and Facebook were among the first employers to send people home in early March 2020, when registered Covid cases in the US were in the hundreds. The young, tech-savvy workforces easily adapted to replacing human contacts with video calls and instant messaging services, some of which they had developed. Increased demand for digital tools, streaming services and social media meant Big Tech companies were forced to hire thousands of new staff without an office induction. Share prices boomed, making employees rich, and many found they could live like kings outside of the expensive tech hubs they had previously had to inhabit. After a few weeks, Twitter said staff would be able to work from home permanently. At Apple, chief executive Tim Cook hailed staff's efforts after a crop of newly-released products led to record sales. “There are worse things for a company whose business is innovation than having to periodically do just about everything in an entirely new way,” he told investors. Zuckerberg laid out the broadest vision, saying he personally planned to spend half of 2021 and 2022 working from home and that anyone who wished to move abroad would be supported. Companies made half-hearted moves to bring staff back into the office as vaccines became widely available, but the emergence of the Delta and Omicron variants gave them a convenient excuse to push back reopening. As late as last summer, working from home looked like a permanent trend. Last June, office occupancy in the tech hub of San Francisco was just 32pc according to security firm Kastle. “Office mandates are never going to work,” said Marc Benioff of Salesforce, the city’s largest private employer. When guidance was brought in, it was loosely enforced, especially in satellite offices. Staff at Facebook and Google’s UK offices say that for much of last year they effectively had a free vote on whether to come into work. Workers who were asked to go back protested, pointing out that they had options elsewhere: companies such as Coinbase, Dropbox and Airbnb all said they would allow remote work permanently. In August, Apple employees petitioned against Cook’s order announcing staff would have to be back three days a week. Other workers took more radical steps. In February, contractors working for YouTube announced plans to strike in protest at return to office plans; an earlier strike by Google Maps workers had secured a delay to office returns. However, a brutal and widespread tech downturn has changed the picture. Since the start of the year, Microsoft, Google, Meta and Amazon have laid off thousands of workers as rising interest rates hit their share prices. Financial pressures have made tech bosses more conscious of the multibillion-dollar investments they have made in their currently under-occupied headquarters, such as Apple’s spaceship-like Silicon Valley base and Meta’s Frank Gehry-designed campus. It has also shifted power from employee to employer. “Tech firms right now are downsizing, and they’re going to target first for downsizing the people who will not come into the office,” says Thomas Roulet, an associate professor in organisation theory at the University of Cambridge, who studies home working policies. “People who are not visible, people who stay at home because they thought tech firms were going to be super flexible, they’re going to be first in line because their bosses have never seen them. And they are not connected to the culture of the organisation.” Amazon’s boss Andy Jassy said in February: “There is something about being face-to-face with somebody, looking them in the eye, and seeing they’re fully immersed in whatever you’re discussing that bonds people together.” Things are even slowly changing at Meta, where Zuckerberg has spent part of the last year working from Hawaii and where executives are distributed around the world (Sir Nick Clegg, its president of global affairs, and Instagram boss Adam Mosseri are London-based, while the head of WhatsApp Will Cathcart resides in Los Angeles). Last week, the company stopped advertising entirely-remote jobs, although a spokesman said the move was temporary. The shift has been happening across the tech industry. According to figures from jobs website Adzuna, the number of tech jobs in the UK advertised as fully remote has fallen from 39pc in April last year to 27pc last month. Hybrid jobs, which involve a mix of office and home work, have risen from 20pc to 29pc, while office-based roles have climbed from 7.7pc to 9.1pc (the remainder are adverts that do not specify). The change is similar in the US, although more roles are advertised as fully remote. “With the pandemic slowly becoming ancient history, employers are becoming firmer on return-to-office policies, whether that means fully or partly coming back to office,” Adzuna’s co-founder Andrew Hunter says. Last year, Cook called working from home “the mother of all experiments”. That experiment now seems to be ending." MY COMMENT DUH. Simply common sense.
