The Long Term Investor

Well.....for me stocks did not "TUMBLE".

Stocks closed mixed amid debt-ceiling talks, retail sales data

https://finance.yahoo.com/news/stock-market-news-today-live-updates-may-16-113652753.html

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

"US stocks ended the session lower on Tuesday as investors digested fresh economic data and monitored any updates over the debt-ceiling stalemate.

It proved to be a lackluster for the equity market, with the S&P 500 (^GSPC) dropped 0.64%, while the Dow Jones Industrial Average (^DJI) fell over 1%, or declining by more than 300 points. The technology-heavy Nasdaq Composite (^IXIC) dipped 0.18% at the close.

Wall Street is watching for signs of movement in the debt-ceiling impasse, with a meeting underway between President Joe Biden and House Speaker Kevin McCarthy set for Tuesday afternoon in Washington.

Treasury Secretary Janet Yellen sounded the alarm Tuesday morning ahead of the meeting with congressional leaders that “time is running out” to avert an economic catastrophe from failing to raise the debt ceiling. She also wrote a letter to lawmakers that "it would cause severe hardship to American families", with the US potentially defaulting as soon as June 1.

Tuesday's meeting will include Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell and House Democratic Leader Hakeem Jeffries. It follows a White House meeting last week that failed to produce a breakthrough. Speaker Kevin McCarthy said Tuesday morning there had been “no progress” in talks overnight ahead of the afternoon gathering.

Meanwhile, investors turned their attention to economic data, which showed that retail sales rose 0.4% in April, representing only half of the growth that Wall Street had expected. Economists surveyed by Bloomberg called for 0.8% rise over the prior month after a surprise drop in March.

Separately, on the housing front, confidence among US single-family homebuilders hit the highest level in 10 months, improving in May for the fifth consecutive month, as limited home stock helped to renew optimism for the sector.

Federal Reserve Bank of Cleveland President Loretta Mester said on Tuesday she doesn't believes that the U.S. central bank is at a point yet where it can hold interest rates steady for a period of time, given how stubborn inflation is.

Yields across the US curve gained, the yield on the US 10-year Treasury note climbed to 3.53%, while the yield on the two-year note rose to 4.09%.

Also on Wall Street’s docket are earnings from retailers such as Walmart (WMT) and Target (TGT), along with China’s tech giants Alibaba (BABA) and Tencent (TCEHY).

Home Depot (HD) kicked off, posting first-quarter earnings that mostly missed estimates, while same-store sales came in well below forecasts. The home-improvement giant cut its guidance for fiscal full-year sales growth. Shares dropped more than 1% Tuesday.

Elsewhere, gold fell below $2,000 level. The precious metal has been drawing support as a safe haven as the potential builds for a US debt-ceiling crisis.

“Everyone is extremely confident that a default will not happen but the closer we get to the deadline, the more we'll see those risks being priced into the markets, which could support gold,” Craig Erlam, senior market analyst, wrote in a note to clients.

In Washington, former executives from Silicon Valley Bank and Signature Bank are expected to testify before the Senate on Tuesday.

Former Silicon Valley Bank CEO Greg Becker told lawmakers Tuesday that he was justly compensated as “unprecedented events” caused the lender’s failure, pushing back against assertions that he enriched himself while ignoring risks.

Regional bank stocks were mixed Tuesday. PacWest Bancorp (PACW) shares dipped more than 14%, while shares Western Alliance Bancorporation (WAL) rose more than 2%.

In single stock moves, Horizon Therapeutics (HZNP) shares sank 14% amid reports the Federal Trade Commission is preparing to file a lawsuit as early as Tuesday to block Amgen's (AMGN) $27.8 billion deal to buy the drugmaker.

Warren Buffett's Berkshire Hathaway raised its commitment to Bank of America (BAC) and bought new stock in Capital One (COF), according to filings. COF is up more than 2% Tuesday.

Shares of Baidu, Inc. (BIDU) gained after the Chinese search-engine giant posted first-quarter earnings that beat analysts’ estimates as revenue rose 10%."

MY COMMENT

Just a MESSY.....MINOR......day in the markets today. A wasted day. Too many distractions......debt ceiling, a FED moron talking, retail data, a few lingering earnings, etc, etc. Nothing earth-shaking.....but the end result was a wasted go-nowhere day.

BETTER LUCK TOMORROW.

 

THIS is why ALL the sentiment based indicators are simply......BS......and always have been.

Paper Bears

https://awealthofcommonsense.com/2023/05/paper-bears/

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

"The economic recovery following the Covid-induced recession in early-2020 has climbed the proverbial wall of worry.

We’ve experienced the strongest labor market in a generation but the vibes have been off for a while now.

Last summer the University of Michigan index of consumer sentiment hit its lowest level on record:


That’s lower than it was during the 2008 financial crisis, lower than it was in the early-1980s when inflation was nearly 15% at the peak and lower than it was in the 1970s which was one of the most challenging decades we’ve ever faced economically speaking.

We’re off the lows but sentiment readings remain near levels last seen in 2011 and 2008.

Consumers are spending money but they don’t seem all that thrilled about it.

Inflation certainly plays a role here. People really hate upside volatility in price levels.

But it’s bizarre to see sentiment this low with the unemployment rate at its lowest level since 1969. Especially when it seems like people are relatively happy right now in other areas.

The Wall Street Journal shared data last week that shows workers are happier with their work situation than they’ve been in decades:


Rising pay helps but the happiest workers are those who switched roles during the pandemic and/or found a company that would allow them to work remotely for at least part of their schedule.

It seems we’ve reached a place where most people are happy with their own situation but assume everything else is all screwed up.

The Federal Reserve’s latest report on the economic well-being of Americans bears this out:


Most people report feeling good about their own financial situation but are worried about the economy at the local and national levels.

Gallup has another survey that looks at satisfaction from a variety of factors related to your personal life:


Most people seem pretty satisfied with their own circumstances.

These results are surprisingly constant over the years as well:


But when it comes to the country as a whole, Americans are not nearly as optimistic:


The trend has been moving down for a while now but it’s crashed since the start of the pandemic.

I’m fine but everything else is terrible seems to be the default assumption for most people these days.

The pandemic has obviously had an impact on how people generally feel about the state of the world and not in a good way.

But it is weird that most people seem satisfied with their life in general but assume everyone else must be miserable.

Why is this the case?

Part of it could be survey error.


I honestly don’t know how they find people to take these surveys. Maybe it’s like a Yelp or Amazon review where you only get the extremes — they either love it or hate it.

We also live in a world where our negativity bias is constantly being put to the test.

Our brains haven’t evolved to handle the deluge of bad news we now receive on a regular basis. Before 24/7 news, social media and alerts on our smartphones, most people simply weren’t aware of all the bad stuff occurring in the world.

Things aren’t perfect these days but the bad stuff gets far more attention from the news organizations and social media.1

Even if bad stuff still occurs, the world is getting better every day but most people assume it’s getting worse. Point out 5 ways the world is getting better over the long-run and people can easily come up with 50 ways it will get worse in the short-run.

Part of the problem is it will always seem like there are more ways for things to go wrong than right with the world at large.

This makes it much harder to use sentiment indicators as a financial signal.

Everyone can say they are bearish because it sounds like a more intelligent argument but if you still have the majority of your money in risk assets, you’re just a paper bear.

Actions are more important than words when it comes to gauging sentiment."

MY COMMENT

Sentiment based indicators are a BAD JOKE on investors. Totally worthless.

This is not anything new......I and probably everyone in the investment world has known for decades about this little bit of truth. When surveyed people that feel good about their own situation will.....EVERY TIME.....give a more negative answer based on how they think others are doing.....or.....how they are being told others are doing.

YET......year after year, decade after decade we see this stuff over and over reported in the financial media. This is WORTHLESS GARBAGE.

If you are interested I am sure you can find articles going back many years talking about this typical people behavior that is seen in financial surveys of sentiment.

 

Not a bad general market and open today. Of course I have not looked at many individual stocks today.

Stocks rise as debt-ceiling talks stay in focus: Stock market news today

https://finance.yahoo.com/news/stock-market-news-today-live-updates-may-17-115307596.html

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

"Stocks opened in recovery mode Wednesday following Tuesday’s selloff as investors remain hopeful that the debt-ceiling talks will produce a breakthrough.

The S&P 500 (^GSPC) advanced 0.48%, while the Dow Jones Industrial Average (^DJI) gained 0.43%, or more than 100 points. The technology-heavy Nasdaq Composite (^IXIC) added 0.40% at the open.

Wall Street has been kept on its toes as the White House and congressional leaders try to thrash out a deal to avoid a looming US debt default. A smaller group of negotiators is taking over as President Joe Biden travels to Asia, but he has announced plans to cut short his trip this week.

Treasury Secretary Janet Yellen and others have warned of catastrophic impacts on the US economy in the case of a default, seen as potentially coming as early as June.

On Wednesday morning, the yield on the 30-year Treasury bond fell to 3.84%. The yield on the 10-year note dipped to 3.52%, while he two-year note yield was broadly unchanged at 4.08%. The dollar index strengthened, while gold prices fell.

“While [House Speaker Kevin] McCarthy said a deal is possible by end of this week, the timeline may be by the end of next week ahead of Memorial Day,” JPMorgan's US market intelligence team wrote in a note Wednesday.

President Biden plans to stay in touch with McCarthy over the coming days. Any breakthrough in the talks could potentially impact markets, the team said.

“With that in mind, equities may trade in a tight range until an outcome is observed with the biggest downside risk coming if we enter Memorial Day weekend without a solution, given the early June X-date,” the JPMorgan team added.

Elsewhere, on the housing front, US housing starts grew 2.2% in April to an annualized 1.4 million units, according to government data released Wednesday. On a yearly basis, that's still a 22.3% drop. Single-family starts increased 1.6% month-over-month to the highest level in 2023.

Building permits issued fell 1.5% to an annualized 1.41 million units in April and registered a 21.1% drop year-over-year as multi-family permits issued tanked 9.7% month-over-month.

Also on the docket were earnings releases from retailers including Target (TGT) and The TJX Companies, Inc. (TJX) before the bell on Wednesday, which gave further insight on the consumer health and a gauge on recession probabilities.

Target (TGT) topped Wall Street’s earnings expectations, but took a cautious tone on consumers, seen as hesitant on discretionary spending. The retailer guided second-quarter earnings below analyst estimates, dampening its view of the back-to-school shopping season. Shares slid below the flatline Wednesday following the results.

Meanwhile, The TJX Companies, which owns TJ Maxx, Marshalls, and Home Goods, posted an earnings beat for its first quarter, while also offering disappointing guidance. Shares edged higher Wednesday.

In single-stock moves, shares of Tesla, Inc. (TSLA) nudged higher after the EV maker held its annual shareholder meeting after the bell on Tuesday. At the event, CEO Elon Musk said he has no plans to step down as CEO and retained his board seat for another term.

Shares of Wix.com Ltd. (WIX) rallied over 2% Wednesday after the cloud services developer posted a net profit in the first quarter, boosted by growth in subscription revenue.

Advanced Micro Devices, Inc. (AMD) shares advanced Wednesday as Bernstein analyst Stacy Rasgon reiterated his Market-Perform ratings in a note on Tuesday and $80 stock forecast for AMD."

MY COMMENT

BUMMER for the NEGATIVE NANNIES........as earnings continue to generally BEAT THE PANTS OFF......all the negative expectations.

As to the opening sentence above......I would NOT call yesterday a SELL-OFF. It was a mildly FLAT day as there was NO market direction all day long.

Notice that the majority of the above is spent talking about the RIDICULOUS debt ceiling stuff. This stuff is just a BIG JOKE......everyone with a brain knows it. Now, the short term traders and speculators.....they love anything that gives them volatility....but the average retail investor knows that this stuff is simply government STUPIDITY.

In reality......there is NOTHING going on at the moment that is significant to investors.

 

HERE is the REAL THREAT to the retail economy. NO.....I am not going to discuss this issue other than post this article.

Target CEO: We're seeing 'violent' incidents in our stores, and it's costing us millions

https://finance.yahoo.com/news/targ...es-and-its-costing-us-millions-103002930.html

 

Of course I agree with ELON......as usual.

Elon Musk says the ‘laptop class’ needs to ‘get off their moral high horse’ when it comes to remote work

https://finance.yahoo.com/news/elon-musk-says-laptop-class-093309660.html

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

"Chief executives, trying to bring employees back to the office, argue that working-from-home leads to less engaged and less productive workers. But Tesla CEO Elon Musk is going one step further, calling the practice "morally wrong" in an interview with CNBC on Tuesday evening.

Musk argued that tech workers—who he characterized as the “laptop class”—were unfair in demanding privileges that other people, like service workers or factory employees, could not enjoy. “You’re going to work-from-home, and you’re going to make everyone else who made your car come work in the factory? You’re going to make people who make your food that gets delivered—they can’t work from home?” Musk asked. “Does that seem morally right?”

“People should get off their goddamn moral high horse with the work-from-home bullshit,” he said. "They're asking everyone else to not work from home while they do."

During the U.S.’s stay-at-home orders in the early days of the COVID pandemic, white-collar workers were able to stay at home while workers deemed essential—often lower income or from minority populations—had to venture outside to go to work. In-person work sometimes led to COVID outbreaks in sectors like the meatpacking industry where working-from-home was not possible.

Longtime critic

Musk has long been a critic of remote work. Last June, the Tesla CEO ordered staff back to the office full-time, even as other companies were gingerly trying—and often failing—to get employees back in the office just a few days a week. Musk cited fairness in an internal email, noting that asking corporate employees to come in for 40 hours a week was “less than [what] we ask of factory workers.” (Musk also joked on Twitter at the time that Apple employees who refused to come into the office were being lazy.)

Musk also ended Twitter’s permanent remote work policy last November, in one of his first acts as the social media company’s CEO, though he later softened his demands when more employees than expected were willing to quit over the issue.

Tesla’s CEO has also praised those who went beyond standard working hours, celebrating employees in the company’s Shanghai factory for "burning the 3:00 a.m. oil" even as U.S. workers “are trying to avoid going to work at all,” in an interview last May. Tesla’s Shanghai factory at the time operated under a “closed-loop” system amidst China’s tough COVID-prevention regime, with workers sleeping and eating on-site to prevent any disruption to production due to an outbreak.

Musk claimed on CNBC that he only took two or three days off a year, and otherwise did at least some work seven days a week with only six hours of sleep a night. (Musk was seen partying at a music festival in Mexico last weekend hours before a meeting with Emmanuel Macron, joking with the French president that he had to “sleep in the car” beforehand.)

Working-from-home

Bosses and employees are still debating how long workers should be in the office. More companies are pushing for employees to come in at least part of the time. CEOs argue that working-from-home hurts company culture, and claim that fully remote workers lose opportunities for feedback and mentoring, hurting their growth.

Employee surveys consistently report that workers think they are more productive at home.

The battle may be reaching an equilibrium around hybrid work, where employees come into the office for part of the week. The number of U.S. firms demanding in-person work five days a week dropped over the past three months, from 49% to 42%, according to data from Scoop Technologies, an analytics firm tracking workplace strategies.

Still, companies are trying to get their employees to come in more often.

On Tuesday, AT&T CEO John Stankey told Bloomberg Radio that the telecoms company would require managers to work in-person three days a week, starting as early as July in some cases. The company will also be closing some of its offices, potentially requiring some employees to relocate.

Also on Tuesday, asset manager BlackRock asked employees in an internal memo to start coming in four days a week, up from three, arguing that remote workers missed both “teaching moments” and “market-moving moments” while at home.

“See you in the office!” BlackRock wrote, according to the Financial Times.'

MY COMMENT

The benefits of working at "the office" are OBVIOUS. They are stated in this little article and have been said in other articles over, and over, and over:

"More companies are pushing for employees to come in at least part of the time. CEOs argue that working-from-home hurts company culture, and claim that fully remote workers lose opportunities for feedback and mentoring, hurting their growth."

HUMAN ISOLATION is not a good work strategy or cultural strategy. It is also not a good way to have a long term job. Want to work from home all the time......KISS YOUR JOB GOODBYE.....it will be going out of the country to a foreign remote worker.......or......to a machine AI worker.

 

In conjunction with the above.......anyone that is a professional, a coder, a white collar worker, a TECH non-manufacturing employee, etc etc, etc.....should be considering the odds that they will even have a job in about five years......maximum.

Microsoft researchers say GPT-4 shows 'sparks' of human-level performance
The artificial intelligence tech reportedly demonstrated it could solve novel and difficult tests in multiple fields

https://www.foxbusiness.com/technology/microsoft-researchers-gpt4-sparks-human-level-performance

MY COMMENT

I really feel sorry for young workers. The majority will find themselves being FIRED over the next five to ten years due to AI. Companies are not stupid.....they will take an AI worker over a COSTLY human worker every time. It is a financial and productivity no-brainer.

 

I am looking GOOD so far today.....a nice gain. As has been typical lately I have five stocks UP and five DOWN. BUT......the gainers are carrying the day so far in a typical SHALLOW market day once again. My winners today.......are different than those yesterday......AMZN, NVDA, HD, HON, and TSLA.

Good old Home Depot.....up by +3.02% today so far. I guess there is good interest in the stock at this price level. I must say I think it is a bargain right now considering that they have a NEAR MONOPOLY on their business niche.

I consider the HD earnings the other day as a MISS.....but a MILD miss actually. The most important measure to me was the EPS which was a BEAT. Most of the other measures were misses.....but.....very distorted due to Covid and comparison to figures from the past that were severely distorted by the housing BOOM and all the supply chain and other issues.

A nice day for the markets so far. There is VERY GOOD potential for the market gains to escalate to the close today.

In addition we will soon see the END of this debt ceiling BS some time over the next 1-20 days. That happening and the next FED meeting in early June will REMOVE some huge market drags from the markets. We will have very nice potential for a BIG SUMMER RALLY this year once there is clarity on the short term......fear mongered issues.....over the next three weeks. Plus....at some point over the next three months....we will get clarity of the.........GASP......recession. Or in my view......the NON-RECESSION.

Unless the media or "reality" comes up with other issues to fear monger.......MOST.......of the issues that are being breathlessly reported on every day endlessly......will soon disappear.

At this point I would say we are NOW out of the tunnel and entering the light. Does anyone still remember the DISMAL year we had last year? Perhaps a few do.......but it is fading into the past as is typical in the investing world. In a few years it will be totally forgotten......for long term investors. Just another irrelevant short term event.

 

We are seeing some REALITY with HOME DEPOT today. The stock is currently UP by +3.80%......or.....a whopping $10.59 per share.

I guess the media frenzy the other day......Tuesday.....when their earnings came out was a little OVERBLOWN. You think?

On EARNINGS DAY the stock opened at about $282......it closed at about $282. One day later........today......it is now at $292.75.

What is fun and interesting is where it was BEFORE EARNINGS.........about $288 all day long......this Monday.

The stock is NOW.....TODAY.....at the highest level it has been since......MAY 4......when it was at $285.

SO........NOW......the stock is UP by about $4-$5 from where it was ONE DAY BEFORE earnings........a pretty good post-earnings BUMP. My kind of earnings miss.

 

HERE is a more accurate article on the........OLD NEWS......HD earnings.

Home Depot’s Earnings Beat Estimates. Why the Stock Is Falling and Hitting the Dow.

https://www.barrons.com/articles/home-depot-earnings-stock-price-8db5a0d7

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

"Softening customer demand has pushed Home Depot HD +3.23% to slash its outlook for the fiscal year, a move that has sent shares in the home-improvement retailer tumbling and knocked the Dow Jones Industrial Average DJIA +1.10% lower.

Home Depot (ticker: HD) reported earnings of $3.82 a share in the first three months of the year, slightly ahead of the $3.80 expected by analysts surveyed by FactSet. But quarterly sales of $37.8 billion were short of estimates of $38.3 billion, which the company blamed on declining lumber prices and unfavorable weather.

It got worse with the financial forecasts. Home Depot is now projecting sales will fall 2% to 5% from 2022, while it said in February that yearly sales should be flat year over year. It also cut earnings-per-share guidance, saying they are likely to slide 7% to 13% on an annual basis, compared with a previous call for a decline in the mid single digits.

“Given the negative impact to first-quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Richard McPhail, Home Depot’s chief financial officer.

Barron’s noted previously that lower lumber prices, which had spiked during the pandemic, were likely to weigh on same-store sales. Nonetheless, the 4.5% tumble in comparable sales was worse than the 1.6% fall analysts expected. It represents the largest quarterly decline in more than a decade, reflecting both lumber prices and lower demand.

The company’s decision to cut its fiscal 2023 forecast so early in the year may be prudent, but it has also spooked investors who were hoping—too optimistically—that more recent trends would show consumers had simply postponed home-improvement projects during a wet and stormy spring. The more-conservative outlook implies that isn’t happening.

“We believe investors were bracing for a weaker first-quarter print, but also indications of rebounding trends into mid-May,” wrote MKM Roth analyst David Bellinger. “This morning’s full-year guide down indicates to us that any acceleration second quarter-to-date has not been enough to instill confidence into the back half amid ‘broad-based pressures’ across the business.”

Shares of Home Depot, a component of the Dow, slipped 1.5% to $284.37 in early trading, while the market benchmark was down 0.5%. Home Depot stock had shed nearly 9% this year as of Monday’s close.

Therefore Mother Nature isn’t entirely to blame, but isn’t helping either. Weather has been a major factor complicating business for the home-improvement industry, which already was navigating a slowing economy macroeconomic turbulence now being made worse by unseasonably cold conditions. Warmer weather helps spur both do-it-yourself and professional construction projects.

Weather has been a thorn in the side of similar companies, including Tractor Supply TSCO –0.51% (TSCO) and Sherwin-Williams SHW +2.35% (SHW). Tractor Supply said poor weather caused a two-percentage-point decline in comparable-store sales. Its core business leans more toward agriculture—an area even more weather-dependent than home improvement—but the company’s results are often a “decent read through” for companies such as Home Depot and Lowe’s LOW +3.49% (LOW), said Raymond James analyst Bobby Griffin.


Lowe’s stock dropped 1.9% in early trading. “We expect Lowe’s will see a similar headwind from lumber deflation as Home Depot,” said Jonathan Matuszewski, an analyst at Jefferies.
Weather aside, Home Depot also faces some challenges from the housing market, which has been in a bit of a slump over the past few quarters as rising interest and mortgage rates hinder demand. As Barron’s has reported, the spring home-buying season, which is typically one of the busiest, has been slower than usual this year.

Home-improvement retailers can still benefit when people aren’t in the market for a new home. The concern for investors is that worry about a recession, along the cost of financing big-ticket remodeling plans, has also discouraged people from undertaking renovation projects.

Indeed, the results demonstrate that consumers are feeling pinched. On its conference call, Home Depot noted that business from both do-it-yourself and professionals were down in the quarter, with shoppers shying away from expensive discretionary purchases. In addition, while Pros still have elevated backlogs relative to history, those backlogs have shrunk since last year, and their projects are shifting away from big remodels to more modest upgrades.

Gross margins were also lower in the quarter, hurt by “shrink,” an industry term for inventory loss, including shoplifting, which plenty of other retailers have also cited as a headwind in recent months.

Nevertheless, management is upbeat. “While the near-term environment is uncertain, we remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market,” said Ted Decker, Home Depot’s chairman and CEO."

MY COMMENT

Remember the good old days when EARNINGS used to mean Earnings Per Share? Now it means reams of micro-data and all sorts of opinion and future projections.

This company with their SUPERB management........and......total market DOMINANCE......is going to do just fine going forward.

 

The markets are confirming my educated guess (see above) as to how today will progress. They certainly dont need my help.

NOW.....on a different topic......this is CRAZY.

Americans think gold beats stocks as a long-term investment. Advisors disagree: ‘It’s more like a speculation’

https://www.cnbc.com/2023/05/17/americans-think-gold-beats-stocks-as-a-long-term-investment.html

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

"Key Points

• The share of Americans who think gold is the best long-term investment almost doubled in 2023, to 26%, according to a recent Gallup poll.
• The share who prefer stocks declined to 18%.
• However, stocks are the better wealth generator over long time horizons, according to financial advisors.
• Gold is typically viewed as a safe haven during times of fear.
• The U.S. is currently absorbing the fallout from higher interest rates and recent banking turmoil, while eyeing the possibility of recession and a high-stakes debt-ceiling standoff.

Americans are upbeat on gold and have soured on stocks — perhaps to their detriment.

Twenty-six percent of Americans ranked gold as the best long-term investment in 2023, almost double the 15% who thought so in 2022, according to a recent Gallup poll.

The share surpassed that of stocks: 18% of Americans ranked stocks as the top long-term holding, down from 24% last year, according to the survey.

It was the first time since 2013 that their perception of stocks was below that of gold. Both ranked behind real estate.

While Americans were asked to gauge sentiment about the long term, public perception is guided more by short-term swings in investment performance, said Gallup, which polled a random sample of 1,013 adults between April 3 and 25.

And that recency bias can be dangerous for investors saving for a goal like retirement, which may be decades away.

“As a long-term investment, [gold] is a very poor solution,” said Charlie Fitzgerald, a certified financial planner and principal of Moisand Fitzgerald Tamayo in Orlando, Florida.

“It’s more like a speculation,” he added.

Stocks beat gold over the long term

Stocks generally serve as the long-term growth engine of an investment portfolio, financial advisors said.

The S&P 500 Index of stocks had a 10.43% average annual total return between 1970 and 2022, according to an analysis by Securian Asset Management. Gold had a 7.7% return over the same period. (After the U.S. gold standard ended in 1971, the price of gold was no longer fixed, making the early 1970s a good starting point for a price comparison.)

The price of gold, which is often viewed as a safe haven, typically jumps during times of fear and economic malaise. For example, gold prices surged to multiyear highs in the early days of the Covid-19 pandemic, and spiked following Russia’s invasion of Ukraine.

The SPDR Gold Shares ETF (GLD) — an exchange-traded fund that tracks gold prices — is up 8.6% so far in 2023. The S&P 500
is up 7.6%.

Investors’ enthusiasm for gold comes amid recent turmoil in the banking sector and as the Federal Reserve has raised interest rates aggressively since early last year, to put a lid on high inflation. The Fed, the U.S. central bank, expects the country to tip into a mild recession later this year.

Meanwhile, 2022 was Wall Street’s worst showing since 2008, as the S&P 500 fell by more than 19%. U.S. bonds had their worst year in history.

A debt-ceiling standoff means the U.S. is also staring down the possibility of not being able to pay its bills within weeks — which would be a first in the nation’s history and likely to trigger economic chaos.

“Gold is doing well now because of the current economic condition,” said Ivory Johnson, a CFP and founder of Delancey Wealth Management, based in Washington.

Johnson, a member of CNBC’s Advisor Council, has been recommending more gold to clients over the past year or so.

However, it’s more of a short-term holding — a hedge for investors when gross domestic product (a measure of U.S. economic output) and inflation are both decelerating, as they are right now, Johnson said. If GDP starts to rebound, he’d generally recommend dumping gold and instead buying growth stocks.

“Gold is not a long-term investment,” Johnson said. “It’s not something you just put in the portfolio and keep it there.”"

MY COMMENT

GOLD........LOL. Pays nothing.....no dividends, no compounding. A SURE losing investment for any long term investor.

I am GLAD to see this survey data however. When long term stock investing becomes a FAD and a trend......that will be a sad day. As long as us....long term investors......can be the silent majority and labor in obscurity.....we will do just fine.

I prefer to invest under the radar. The IDIOCY of the masses......is a nice place to hide out in plain sight. When everyone discovers the power of long term investing......it will probably mean it is all over. I dont expect this to ever happen......people just can not grasp the obvious......and the simple TRUTH.

 

A nice......good gain.....for me at the close today. Nine of ten stocks UP today in a booming day for stocks in general. ALL the big averages had a very good day today. I also got in a beat on the SP500 by 0.17% today.

Poor HOME DEPOT.......UP by only 3.56% today.......or........$10.06 per share. Of course I am being sarcastic.......they had a spectacular day........post earnings today.

Oh yes......my lone loser today was......COSTCO. A one day loser.....but definately NOT a long term loser.....as an investment and as a business.

 

Yes HOPE is a strategy for the short term......although the resolution of the debt ceiling crisis is a SURE THING over the next few weeks.

Stocks surge as earnings, debt-ceiling talks stay in focus

https://finance.yahoo.com/news/stock-market-news-today-live-updates-may-17-115307596.html

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

"Stocks surged on Wednesday as investors remained hopeful that debt-ceiling talks between President Joe Biden and congressional leaders will produce a breakthrough.

The S&P 500 (^GSPC) advanced 1.19%, while the Dow Jones Industrial Average (^DJI) gained 1.24%, or more than 400 points. The technology-heavy Nasdaq Composite (^IXIC) increased 1.28%.

Wall Street has been kept on its toes as the White House and congressional leaders try to thrash out a deal to avoid a looming US debt default. A smaller group of negotiators is taking over as President Joe Biden travels to Asia, but he has announced plans to cut short his trip this week.

Treasury Secretary Janet Yellen and others have warned of catastrophic impacts on the US economy in the case of a default, seen as potentially coming as early as June.

On Wednesday, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the US government "probably"will not default on its debt obligations. Dimon joined other top executives of major banks in a meeting with Senate Majority Leader Chuck Schumer to discuss the debt-ceiling standoff.

The yield on the 30-year Treasury bond was little changed. The yield on the 10-year note rose to 3.57%, while the two-year note yield traded up to 4.15%. The dollar index strengthened, while gold prices weakened sinking below $2,000.

“While [House Speaker Kevin] McCarthy said a deal is possible by end of this week, the timeline may be by the end of next week ahead of Memorial Day,” JPMorgan's US market intelligence team wrote in a note Wednesday.

President Biden plans to stay in touch with McCarthy over the coming days. Any breakthrough in the talks could potentially impact markets, the team said.

“With that in mind, equities may trade in a tight range until an outcome is observed with the biggest downside risk coming if we enter Memorial Day weekend without a solution, given the early June X-date,” the JPMorgan team added.

Elsewhere, on the housing front, US housing starts grew 2.2% in April to an annualized 1.4 million units, according to government data released Wednesday. On a yearly basis, that's still a 22.3% drop. Single-family starts increased 1.6% month-over-month to the highest level in 2023.

Building permits issued fell 1.5% to an annualized 1.41 million units in April and registered a 21.1% drop year-over-year as multi-family permits issued tanked 9.7% month-over-month.

Also on the docket were earnings releases from retailers including Target (TGT) and The TJX Companies, Inc. (TJX) before the bell on Wednesday, which gave further insight on the consumer health and a gauge on recession probabilities.

Target (TGT) topped Wall Street’s earnings expectations, but took a cautious tone on consumers, seen as hesitant on discretionary spending. The retailer guided second-quarter earnings below analyst estimates, dampening its view of the back-to-school shopping season. Shares moved higher over 2% Wednesday following the earnings results.

Meanwhile, The TJX Companies, which owns TJ Maxx, Marshalls, and Home Goods, posted an earnings beat for its first quarter, while also offering disappointing guidance. Shares nudged higher Wednesday after the results.

In single-stock moves, shares of Tesla, Inc. (TSLA) advanced more than 4% after the EV maker held its annual shareholder meeting after the bell on Tuesday. At the event, CEO Elon Musk said he has no plans to step down as CEO and retained his board seat for another term.

Shares of Wix.com Ltd. (WIX) rallied over 1% Wednesday after the cloud services developer posted a net profit in the first quarter, boosted by growth in subscription revenue.

Advanced Micro Devices, Inc. (AMD) shares moved higher Wednesday as Bernstein analyst Stacy Rasgon reiterated his Market-Perform ratings in a note on Tuesday and $80 stock forecast for AMD.

Shares of Taiwan Semiconductor Manufacturing Company Limited (TSM) gained more than 5% after reports swirled that Japan's Prime Minister Fumio Kishida plans to meet with executives at the company and six other chip firms to seek active investment in Japan and tighter cooperation with Japanese companies."

MY COMMENT

Debt Ceiling.....blah, blah, blah........and.....blah, blah, blah. Yellen.....blah, blah,blah. A TOTAL JOKE.

AND.....thank God......that Jamie Dimon piped up and told us that........"the US Government probably will not default on it's debt obligations." That guy is a genius. I doubt that anyone else around had the ability or the nerve to make such a prediction. Some really high level number crunching and analysis at work in that pronouncement.

(for any that might be new to financial stuff or this thread......yes....sarcasm) ( As Varney would say...."Sarcasm is the lowest form of wit".....actually Oscar Wilde)

But I digress......a SUPERIOR day today......for HUMP DAY. We now move on to the final couple of day this week with the wind to our sails. I am looking for a nice close to the week.

 

With things BOOMING now....lets talk about a different type of long term "investment". I used "quotes" because I am talking about....."things".

I am sure Zukodany gets the same publications and other data from Heritage Auctions that I do. The collectable area is ON FIRE right now and has been for a number of years......Sports Cards, bats, Jerseys, Space items, comic books, art, etc, etc. Prices of QUALITY items are shooting through the roof.

Probably the largest auction houses that carry a big variety of collectables are Heritage Auctions and Golden Auctions. If you have any interest in the collectables market you can go to their web sites and view their auction schedules and price archives. There are many other national and local auction houses.

Many of these items have gone beyond being a collectable to a commodity. BUT....keep in mind when I talk about this stuff....it is all about QUALITY, QUALITY, QUALITY. I am talking about fine and rare material. Of course the gains being made do filter down to more mundane quality items.

I suspect that Zukodany has made more on his comics lately than his booming stock portfolio.

I am seeing the same thing in the categories of "stuff" that we own and collect.

We dont buy antiques much anymore since we simply dont have room. BUT.....prices are firm and probably going up at the moment. Prices dropped significantly post 2008/2009. BUT....high quality items that are the best of category are going up nicely. We might buy an antique item every year or two now.

Prices on the type of ART that we collect are TO THE MOON lately....the past couple of years. I am seeing many new world record prices lately in art of all types. We start each year with an ART BUDGET for the year. Some times a big time piece will tempt us to break our budget......but we try to be very selective.

Here are some recent examples:

"Scottsdale Art Auctions’ Annual Spring Event Exceeds $13.8 Million
Published: May 2, 2023


Best in show — and a new personal best for the artist — at $1,562,000 was Oscar Berninghaus’ “The Hunters Taos,” oil on canvas, 35 by 40 inches ($750,000-$1,250,000).

Review by Madelia Hickman Ring, Photos Courtesy Scottsdale Art Auction

"SCOTTSDALE, ARIZ. — Though Scottsdale Art Auctions’ (SAA) annual April auction was slightly smaller than it was in 2022, it was the second year in a row when the event, this year conducted April 14-15, had a sell-through rate of 98 percent. About half the sale was offered without reserves and by the time the final gavel fell, the sale earned an impressive $13,816,289.

“We’re very pleased,” SAA partner Brad Richardson said. “Not only did our total results exceed $13.8 million but the total surpassed our aggregate high estimates. We had a very strong crowd and a lot of new buyers — about 400 people in the audience. We had tremendous success with the Taos Founders, and a good representation of young up-and-coming artists, which have a strong following by younger collectors.”

Several records were set over the course of the two-day event, for artists across a wide variety of price points, including at the apex of the sale. Earning the distinction of the auction’s “Best in Show” was “The Hunters, Taos” by Oscar Berninghaus (1874-1952), which sold to a buyer in the room for $1,562,000. The result outdistanced the artist’s previous record of $1,471,000, a record that had stood since 2008.

As the auction’s catalog explains, Berninghaus’ “greatest paintings can be isolated down to two themes: the harvest and the hunt.” “The Hunters, Taos” links visually with his 1926 “A Hunter of Taos Pueblo,” which won the Altman Prize at the National Academy of Design.


A second-place finish at $702,000 was achieved for Eanger Irving Couse’s “Taos Love Call,” oil on board, 34 by 46 inches. The lot was accompanied by the original leggings and belt from Couse’s studio, which the artist used for this painting ($300/500,000).

“Taos Love Call,” painted by Eanger Irving Couse (1866-1936), earned an impressive $702,000 from a floor bid, a sizeable increase over the oil on board’s $300/500,000 estimate. The artist is considered one of Taos artists who most romanticized the pueblo and its people, a subject he returned to over and over.
“Taos Love Call” was one of five works in the sale by the artist, whose next priciest work, “Indian Boy and Brave Looking at a Blanket,” also exceeded expectations, with a buyer in the room taking it home for $526,500.

A price Richardson said was “strong but not a record” was the $555,750 achieved for John Clymer’s (1907-1989) “Welcoming the Trade Boat,” a sweeping landscape that was accompanied by the book it was published in: The West of John Clymer (National Cowboy Hall of Fame and Western Heritage Center, 1991).

Another work by Clymer that was also illustrated in The West of John Clymer and achieved a high result was “Wood Smoke Tales,” a highly detailed work characteristic of his style and a companion to one of his most famous works, “Alouette.” Painted in 1976 and measuring 30 by 40 inches, the scene sold within estimate to a buyer in the audience, for $286,650.

Other artists for which SAA established new auction records included John Stobart (b 1929), whose previous auction record of $108,000 had been established in 2005. Offered with an estimate of $45/65,000, “San Francisco in 1849 (Vicar of Bray) Unloading in Yerba Buena Cove” from 1975 sailed to $128,700.


The highest price sold for a single work by John Coleman is $245,700, for his 2008 bronze “Gall, Sitting Bull, & Crazy Horse, 1876” ($65/85,000).

“Startling Moment” depicts a horse bucking in surprise at spooked birds and nearly unseating its rider; it appealed to bidders, who pushed George Phippen’s (1915-1966) 1954 oil on canvas masterpiece to $46,800, another personal best for the artist, who was a founding member of the Cowboy Artists of America (CAA).

Another CAA artist — John Coleman (b 1949) — saw the exceptional record-breaking result of $245,700 for “Gall, Sitting Bull, & Crazy Horse, 1876,” a 36-inch-long bronze figural work that numbered eight from an edition of nine.

Not to be outdone, Bill Owen’s (1942-2013) “Laying a Heel Trap,” painted in 1973, the same year Owens was voted into the CAA, snared the artist’s new top price of $76,050. The title of the painting referred to the type of throw used in roping cattle, in which the rope scoops to ensnare the rear legs of a cow.

The sale offered seven works by G. Harvey (1933-2017), led at $292,500 by “Snowflakes,” a simple scene depicting horses in a snowfall illuminated by lamps in the adjacent house. One of Harvey’s works that Richardson might have set a record for value per square inch was “KCGR Black Gold,” which measured just 16 by 12 inches and brought $128,700.


“Sons of Blue Lake” was the highest price of four works in the sale by contemporary Western artist Mark Maggiori, which found a new home with an online buyer for $175,500 ($50/75,000).

Just three works by contemporary master Howard Terpning (b 1927) were on offer but only one of them sold, a mixed media composition depicting native horseback riders awaiting their quarry. The 1983 piece, which measured 29 by 43 inches, had been exhibited in 1983 at the Phoenix Art Museum — when it won the silver medal award — and, in 1999, at the Phippen Museum’s exhibition, “A Collector’s Dream: The Walter E. Kessler Collection.” The lot was accompanied by miscellaneous papers related to the painting and sold to an online buyer for $269,100. The result may be a record for a mixed-media composition by Terpning.

Another online buyer prevailed to pay $175,500 for “Sons of Blue Lake,” by one of the “up-and-coming” artists in the sale was French-born Mark Maggiori (b 1977), who had four works in the auction. The 28-by-36-inch oil on board composition exhibited the dramatic cloud formations which are seen in some of his best-known and highest-selling works.

Joseph Henry Sharp (1859-1953) was represented in the sale by four works and led at $234,000 by “Houses Where the Penitentes Live,” a colorful landscape painted after 1915, when Sharp focused on the Hispanic subjects of Northern New Mexico. According to the catalog, the Penitente associations were known for their elaborate and secretive ceremonies, some of which included processions and rituals Sharp would use as the subject of several paintings done in the 1920s and 1930s.""

https://www.antiquesandthearts.com/scottsdale-art-auctions-annual-spring-event-exceeds-13-8-million/

MY COMMENT

A little Western Art appreciation and education above.

DISCLOSURE......We do collect American Impressionistic Art and Western Art.....BUT......none of the items above were sold or bought by us.

We do collect paintings by the Taos Founders above......and......I am happy to see the BIG jump in the auction prices. We are seeing similar very strong sales in the American Impressionism area of art also. We collect mostly deceased artists.

Some of the art we own has not been on the market for over 30 years.....since we do not sell our best quality items. SO.....we have only a general idea what they would bring at auction.

The photos above do not do justice to the Berninghaus or the Couse......they are spectacular in person. Of course they represent EXTREME QUALITY.

What is nice for the average person is the fact that there is MUCH original art out there in any area that is available in the $1000 to $5000 range. If you do your homework........and have some luck......it is possible to build up a nice collection without spending BIG BUCKS.

Of course the real question......is it an investment?

 

I will say regarding collecting.....it is like investing in some ways.

If you are a serious buyer.......you have to do your homework. You have to know what you are doing. You have to know and understand the market.

There is a lot of BALONEY out there in the art world and collectable world. The potential for big gains and big sales are also driving a lot of FRAUD and a lot of FAKES. SO......BUYER BEWARE.

It is like serious investing......once in a while you will make a mistake....that is just part of the learning process....it happens to everyone. In the end.....it is a lifetime learning process.