The Long Term Investor

We are in the GREEN this week in the SP500 by over 1% so far. If we can hold on tomorrow it will be another POSITIVE week for this average.

SO NICE......to be operating in a relatively "NORMAL" market. We have been in CRAZY and ABNORMAL market conditions since about February of 2020.

 

Here is the NICE market close today.

Dow closes 200 points higher as major banks pop on stress test results, GDP revised upward

https://www.cnbc.com/2023/06/28/stock-market-today-live-updates.html

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

"The Dow Jones Industrial Average rose on Thursday as big bank names gained after passing the Federal Reserve’s annual stress test, and a revised upward GDP print alleviated some recession fears on Wall Street.

The 30-stock index jumped 269.76 points, or 0.8%, to finish at 34,122.42, lifted by major bank names. The S&P 500 added 0.45% to end at 4,396.44, while the tech-heavy Nasdaq Composite closed flat at 13,591.33.



CNBC
JPMorgan Chase and Goldman Sachs each rose more than 3%, while Wells Fargo advanced 4.5%. The action came a day after the central bank said all 23 institutions included in its annual stress test are well capitalized to weather a severe recession scenario. Other financial stocks that took a hit during this year’s banking crisis also gained, including Charles Schwab, Western Alliance and Zions Bancorporation.

A slate of positive economic data signaled economic resilience despite looming recession fears. That included a large upward revision in first-quarter GDP and a drop in weekly jobless claims to the lowest level since May.

“Sectors that do well when the economy is performing well are holding up today, but certainly the stress tests yesterday were another good sign that even if the economy softens, banks are much more resilient than what we saw back in the 2008 period,” said Edward Jones senior investment strategist Mona Mahajan.

Just two trading days remain in what’s been a banner first half. The S&P 500 is up 14.5% this year and on pace for its best monthly performance since January. The tech-heavy Nasdaq has climbed nearly 30% and is heading toward its best first half since 1983 as rising optimism around artificial intelligence pushes up technology stocks. The blue-chip Dow
is the relative underperformer, up just 2.9%.

Despite the solid start to 2023, some on Wall Street are bracing for a potentially volatile second half.

“Markets don’t go up in a straight line forever, and so, we wouldn’t be surprised to see some period of consolidation,” as Wall Street takes some profits, Mahajan said. Investors should consider using volatility to position for a broad-based recovery, she added."

"Apple — up nearly 46% in 2023 — nears $3 trillion market capitalization

Apple climbed to yet another intraday record Thursday, touching a high of $190.07 and bringing its market capitalization to within a hair of $3 trillion. In late day trading, Apple’s market value was about $2.98 trillion.

By CNBC’s calculations based on the current number of shares outstanding, Apple will become a $3 trillion company — a level it’s never before achieved — when the stock reaches $190.73."

MY COMMENT

The markets are doing EXACTLY what I like to see. the BULL MARKET is now starting to broaden out and include other sectors and names. We are seeing flat days for some sectors as the market back-fills and consolidates. This is a very good sign for the BULL MARKET going forward.

 

Here are the.....REAL.....NIKE earnings.

Nike beats quarterly revenue estimates on buoyant sneaker demand

https://www.investing.com/news/stoc...e-estimates-on-buoyant-sneaker-demand-3117008

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

"(Reuters) - Nike (NYSE:NKE) on Thursday beat Wall Street estimates for quarterly revenue, benefiting from a recovery in China following the lifting of pandemic restrictions and buoyant demand for its sneakers such as Air Jordan and LeBron 20.

The company's fourth-quarter revenue rose to $12.83 billion from $12.23 billion a year earlier. Analysts had expected $12.59 billion, according to Refinitiv data."

MY COMMENT

I will expand this when I see more complete data.






Nike beats quarterly revenue estimates on buoyant sneaker demand

 

Here is more NIKE.

Nike sales beat expectations with inventories flat in fourth quarter

https://finance.yahoo.com/news/nike...ntories-flat-in-fourth-quarter-210110345.html

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

"Nike (NKE) reported fourth quarter sales that topped expectations but profits came in slightly lower than expected after the bell on Thursday.

Shares of Nike were down about 1% after the report.

Here's how Nike's results stacked up against Wall Street analyst expectations, according to Bloomberg consensus estimates:

• Revenue: $12.83 billion versus $12.59 billion expected
  
• Adj. earnings per share (EPS): $0.66versus $0.67 expected
  
• Gross margin estimate: 43.6% versus 43.5% expected

Nike showed a recovery in Greater China with sales of $1.81 billion compared to the $1.64 billion analysts had been expecting. Inventories were nearly flat from a year ago, boosting sentiment that Nike's inventory glut has been cured.

Nike's stock stumbled going into the report with shares down 6% on the year and analysts cutting their price targets on shares of the athletic apparel brand in recent weeks. Fears had swirled about dwindling North American demand and struggling revenue growth in Greater China due to COVID-19 restrictions."

MY COMMENT

I am going to call this a BEAT.....especially based on the apparent recovery in China sales and the investor issues being mostly resolved.

I like this a lot better than what I posted last night.....but......I still have the three concerns that I posted last night.

 

Zukodany.

If I was told I had to pick two stocks to sell they would be........NIKE and AMAZON. I see BOTH as STILL extremely dominant companies.....but with poor management....or at least the appearance of poor management.

 

To continue. I dont have any immediate plans to sell either one. I will just watch and wait for....probably......a few years and see how they do post-pandemic now that the issues are mostly resolved with supply chain, etc, etc, etc.

As i said in the past....I like how my portfolio is doing as a whole so I am in no hurry to make changes. I have also held various stocks through rough patches in the past and on out the other side....so no hurry.

BOTH companies are the leader in their area and BOTH have continued great potential. I just dont think either one is making very good use of that dominance at the moment. SO.....I blame management.

Time will tell.........

I am very patient. I dont want to chase returns or give in to GREED. Since I am pushing 32% gains year to date......I am more than willing to look at my portfolio as a whole and not get too caught up in companies that are lagging....at the moment.

 

I also dont want to get any more concentrated in TECH and the companies that I hold from the......MAGNIFICENT SEVEN.

Forget FAANG and GAMMA, the 'Magnificent 7' tech stocks - including Tesla and Nvidia - now dominate the market

https://finance.yahoo.com/news/forget-faang-gamma-magnificent-7-192331285.html

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

• "Nvidia, Tesla, and five other mega-cap stocks have started 2023 on a tear, accounting for most of the S&P 500's gains.
• Some analysts have taken to calling the group "the Magnificent Seven."
  
  
• Investors have piled into Big Tech this year thanks to the rise of AI and the expectation that the Federal Reserve will soon start cutting interest rates.

A handful of Big Tech stocks have accounted for nearly all of the market's gains in 2023.

Nvidia, Tesla, and five others have all racked up huge returns, with investors emboldened by the expectation that the Federal Reserve will soon slash interest rates loading up on shares in a bid to take advantage of the artificial intelligence boom.

The stocks' massive gains have powered benchmark indices higher as well, with the S&P 500 up 14% and the Nasdaq Composite soaring 30% year-to-date.

Some analysts have taken to calling the group a new name: "The Magnificent Seven".

That cluster features the GAMMA stocks – Google parent Alphabet, Apple, Meta Platforms, Microsoft, and Amazon – as well as two new names in Nvidia and Tesla.

Nvidia reached a trillion-dollar valuation for the first time ever last month thanks to an AI-fueled demand for its semiconductor chips.

Meanwhile, Tesla shares have surged since late April, with investors piling into the EV maker after it signed landmark deals for Ford and GM to use its charging network.

The so-called Magnificent 7 are now the largest seven US-listed companies - although some strategists worry that could spell doom for the broader market.

"When there's a narrow group of leaders, there's a big risk if something bad happens to tech," Minerva Analysis founder Kathleen Brooks told Insider last month.

"If interest rates go to 7%... then that becomes bad news for the whole market," she added, referring to the fact that growth stocks tend to suffer the most when borrowing costs rise.

Nvidia has been the biggest success story from the seven Big Tech giants in 2023, surging 181% year-to-date.

Meta and Tesla have both also racked up triple-digit gains and are the benchmark S&P 500's second- and fourth-best-performing stocks this year, respectively.

Apple, Microsoft, Alphabet and Amazon have all climbed between 35% and 55%, with Apple now on the brink of becoming the first-ever company with a $3 trillion valuation."

MY COMMENT

I own six of the seven. The one that I do not and will not own is META. There are some great businesses under that umbrella......but......I do not like ZUK as a leader and definately do not like the share vote structure that makes him.....god for life........at the company.

 

Unfortunately.....some good necessary lessons here.

How to Spot Scams: Cow Manure Edition

https://www.fisherinvestments.com/e...mmentary/how-to-spot-scams-cow-manure-edition

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


"Another fraudster goes to jail, presenting some timeless lessons for investors.

Here is a headline that caught our eye today, and whether this says more about us or the general nature of the summer slow-news stretch, we will let you decide: “Man Is Sentenced in $9 Million Cow Manure Ponzi Scheme.” It is the story of how someone created a fake company that alleged to transform manure into synthetic natural gas and bilked investors out of several million dollars in the process. As with all such scams, it featured the big warning signs Fisher Investments founder and Executive Chairman Ken Fisher detailed in his classic book How to Smell a Rat. We are dedicated to helping investors avoid falling victim to these things, so let us take a look.

Most of our past looks at Ponzi schemes have focused on purported financial professionals running fake investment management services a la Bernie Madoff. This one is different—it is all about a fake company, putting it more in league with DC Solar and Theranos, albeit with some key differences.[ii] As the article, which was in Wednesday’s New York Times, explains: “Mr. [Raymond Holcomb] Brewer, 66, of Porterville, Calif., told investors that he was building the plants [to convert manure to gas] and would generate millions of dollars in revenue by selling the biogas, the statement said. He told the investors that they would receive two-thirds of the profits, as well as tax incentives. ‘None of this was true,’ Phillip A. Talbert, the U.S. attorney for the Eastern District of California, wrote in a sentencing memorandum. ‘Mr. Brewer did not begin construction on a single digester. He simply took his investors’ money and ran.’”[iii]

To get this money, he went to rather great lengths to convince investors his company was real. In the official release announcing the sentencing, the Eastern District of California US Attorney’s Office said Brewer “took investors on tours of dairies where he said that he was going to build the digesters and sent them forged lease agreements with the dairy owners. He also sent the investors altered agreements with banks that made it appear as though he had obtained millions of dollars in loans to build the digesters. Moreover, he sent the investors forged contracts with multinational companies that made it appear as though he had secured revenue streams. Finally, he sent the investors fake pictures of the digesters under construction.”[iv]

As the Theranos and DC Solar sagas showed, even high-profile investors can have a hard time determining whether a business is legitimate. Yet the manure enterprise had many of the same common threads that run through all Ponzi schemes—the same red flags detailed in How to Smell a Rat. You don’t need to be able to spot fake images or doctored documents—just spot the structural issues.[v]

1. To invest in the company, people had to give Brewer direct custody of their money, which he then transferred to his various bank accounts. Refusing to transfer your money to another individual is one of the simplest ways to avoid falling prey. This might seem to apply only to avoiding a fraudulent investment professional, as any legit money manager would custody clients’ accounts at third-party brokerage firms. Yet it is also a prophylactic against fake companies. If you don’t give your money to a bad actor, they can’t run off with it. It is really that simple. Yes, that theoretically cuts off some private investment opportunities, but any legitimate business with a good shot of reaping big profits from the creation of synthetic natural gas likely would have had venture funding and wouldn’t be soliciting local individuals. Nor would a company that had actual contracts with big multinational firms and bank funding be raising capital from mom and pop. So yes, we think someone asking for direct custody of individual investor money was a big red flag.

2. The advertised returns were too good to be true. The Eastern District of California reports Brewer promised investors “66% of all net profits as well as tax incentives.”[vi] It would not surprise us one iota if at least some of the investors heard this as “66% return.” Plus extra revenue from tax incentives! But how would that be generated? That leads us to …

3. Flashy tactics. In addition to the net profits from creating and selling the biogas, Brewer promised investors proceeds from Renewable Energy Certificates (REC), which the gas would have been eligible for as a “green” fuel. As well as being eerily reminiscent of the DC Solar scam, it qualifies as hoodwinking investors with complex, buzzword-heavy strategies. Fraudsters use this to impress and confuse their victims into thinking well, I don’t understand it but it sounds smart, it must be great! Those who pressed Brewer on how selling RECs would have generated a windfall probably would have scared him off, because this is in reality a complex market with volatile pricing and questions about oversaturation. An EPA explainer on the topic happens to show REC prices falling in the years Brewer was running his scheme.[vii]

4. The crook used the money to fund a lavish lifestyle. This happens every time. Brewer spent the money on “two plots of land that were 10 or more acres each, a 3,700 square foot custom home, and new Dodge Ram pickup trucks,” according to the Eastern District of California.[viii] The DC Solar folks also splashed out on fancy property as well as high-profile auto racing sponsorships. Disgraced brokers nearly always went for luxury sports cars and fancy houses. None of these people ever live small.

We hate that these schemes keep happening and that people keep falling for them. But if you know what to watch out for, you can avoid being a statistic. So keep your eyes and ears open, don’t fall for flashy tactics and big returns, and don’t let another individual take custody of your hard-earned money. Forewarned is forearmed."

MY COMMENT

I am ALWAYS paranoid and very careful with money.

I am involved in the art world. Fakes and scams are rampant......as is sales pitches and dishonest auction houses and gallery workers. the money involved attracts a small percentage of bad people. You have to do your homework and stay extremely protective of your money.

When I purchased my income annuities for $.18MILLION.....there was no way I was going to send a check for that amount to an insurance agency. I did not know them. I did not know their finances. SO....I insisted that I would pay the premium to each company directly to the company. I even researched each company to be sure I was sending the money to the actual company address and to a real person at a real company phone number. I talked to each company by phone to verify everything.

If someone discourages or makes fun of you for taking steps to verify something......RUN.

It is your money......and.....you have to protect yourself.

 

To continue with NIKE......and.....the general business environment.

Nike's gloomy forecast puts spotlight on N America slowdown

https://finance.yahoo.com/news/nike-beats-quarterly-revenue-estimates-201830155.html

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

"(Reuters) — Nike forecast first-quarter revenue below Wall Street expectations on Thursday as cost-conscious consumers in North America cut back on sneaker and sports apparel purchases, overshadowing a strong recovery in China.

In North America, the company's biggest market, still-high inflation has led to consumers buying essential goods and reducing discretionary spending.

Sales rose 5% in the region in the fourth quarter, the slowest in four quarters as U.S. wholesalers became more prudent in placing newer orders. In Europe, Middle East and Africa sales increased 3%.

The company's shares were last down about 4% in extended hours in choppy trading.

Next year, the environment is going to continue to be promotional, which puts pressure on wholesale partners in terms of how they manage through the first half of the year, CEO John Donahoe said on an earnings call.

Peer Under Armour forecast annual sales and profit below Wall Street estimates in May due to waning demand and higher discounts.

Nike's gross margin fell 140 basis points to 43.6% in the reported quarter on efforts to clear excess inventory through more promotions and discounts at a time when the industry is being squeezed by higher supply chain, input and labor costs.

"Given the customer is being quite cautious in at least two regions which are quite significant to Nike, gross margins are expected to still be hit as they continue promotions to try getting customer's attention," said Jane Hali & Associates senior analyst Jessica Ramirez.

Greater China was a bright spot as sales jumped 16% jump following the reversal of the rigid zero-COVID-19 policy. Sales in the region had declined in the first three quarters.

Nike expects first-quarter reported revenue growth to be flat to up low-single digit, compared with analysts' average expectation of 5.8% rise, according to IBES data from Refinitiv.

The company expects full-year reported revenue to rise mid-single-digits, compared with analysts expectations of a revenue of a 6.3% rise.

The company's fourth-quarter revenue rose to $12.83 billion and beat estimates of $12.59 billion, while earnings per share of 66 cents missed estimates by 1 cent."

MY COMMENT

This is what happens when you dump your retail partners and think you can go to direct and online sales. I thought that was crazy when the company did it and still think it is crazy.

BUT......this is still a GREAT company. The question for many investors is......do you want to hold this company as a MATURE company without the explosive growth of a younger business?

Nike has been around for a long time now. They ARE now a mature company. They are not going to grow the way they have in the past. In addition by being in a very fashion conscious business.....they have to stay on the cutting edge of shoe and apparel. Consumer taste in these sorts of businesses can change on a dime.

I will be very interested to see how this holding does over the remainder of the year and over the next 4 earnings reports. Will they show progress in the face of continued recovery from the pandemic and during a nice booming economy. OR......will they struggle?

 

NO SH$T.

The Fed is the only thing standing in the way of a sustained bull market in stocks

https://finance.yahoo.com/news/fed-only-thing-standing-way-011821051.html

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

• "The current bull market in stocks looks sustainable as long as the Federal Reserve doesn't mess things up.
  
  
• Ned Davis Research said on Wednesday that a Fed-induced recession is the most likely risk that could derail stocks.
  
  
• "If the Fed panics and cuts rates, a blow-off bubble peak would be possible," NDR said.
  

A policy mistake from the Federal Reserve is the biggest risk that could cut short the current bull market in stocks, according to a Wednesday note from Ned Davis Research.

The firm highlighted that the S&P 500's 25% rally from its mid-October low has all the hallmarks of a long-term secular bull market rather than a short-term cyclical bull market. But that can change pretty quickly if the Fed misfires on its interest rate policy.

"Short cyclical bulls tend to occur during secular bear markets and coming out of recessions. Neither describe the current backdrop. Brief bulls have also been caused by extraordinary events like an inflation resurgence or bubble blow-off top. This cycle's catalyst is more likely to be a Fed-induced recession," NDR said.

The firm said what's helping sustain the current bull rally is the fact that stocks have been in a secular bull market since 2009, and while it might be closer to the end than the beginning, it's too soon to say that a secular bear market has begun.

"The secular backdrop does not support the brief cyclical bull case," NDR said.

Additionally, the resilient economy since the COVID-19 pandemic means that 2022's bear market decline in stocks occurred absent a recession. That fact favors the idea that the current bull market in stocks is more secular in nature than cyclical, according to the note.

As a result, the Fed represents the biggest risk to the stock market, which is the case whether the Fed cuts or continues to raise interest rates.

Highlighting an example of how a policy mistake can come regardless of the direction of rates, NDR pointed out that the implosion of Long-Term Capital Management in 1998 sparked a brief bear market in stocks and led Fed Chairman Alan Greenspan to cut interest rates three times. Stocks took off after that, leading to a bubble.

"The current surge in FANMAG and AI stocks has not been nearly as great as [technology, media, and telecom] stocks in 1999. But if the Fed panics and cuts rates, a blow-off bubble peak would be possible," NDR said.

On the flip side, if inflation lingers and Fed Chairman Jerome Powell aggressively hikes interest rates again, he could plunge the economy into a recession and effectively end the bull market.

"A Volcker-type early 1980s recession would seem more likely than a Burns/Miller policy mistake, but an external shock could trigger a resurgence in inflation beyond the Fed's control," NDR said.

Ultimately, a lot has to go right for the bull market to be sustainable and long-lasting, and much of that hinges on the Fed finding the sweet spot for interest rates that enables continued economic growth but also keeps inflation at bay.

With interest rates sitting at more than 5%, all eyes will be on the Fed's next interest rate decision at its July FOMC meeting."

MY COMMENT

YES....every BULL MARKET has a litany of things that ....."could".....happen. I personally really dont care about the FED. They have ONLY one or two more hikes in their toolbox. They are DONE......but most people may not realize it.

We are in a bull market and we are gong to "probably" continue in a bull market that expands to cover more and more types of business.

As a long investor......I cant worry about every little think that might happen. I cant even worry about every little thing that probably will happen. This is short term stuff........and is NOT relevant to my returns over the long term.

 

HAPPY LAST DAY OF THE FIRST HALF.

If you want some FUN.....go back and look at all the DIRE COMMENTS about what the first half of the year would look like. We were looking at POOR earnings. We were looking at a recession. It was all doom and gloom.

It was also.....ALL BS.

 

I have been watching the markets for a good length of time today....early in the futures and now well into the open. it has been a barn-burner of a day. Having just looked I have a BIG gain so far....thanks to what is going on in the SP500 and the NASDAQ.

I have only one down stock at the moment.....NIKE. AND....that is totally expected after the earnings and commentary yesterday.

I dont see much that can change this today. Of course some people will not want to hold during the long........four day for many people.....weekend. BUT.....that is just the short term day and micro second traders. For any long term ivnestor......the day trading and shorter trading is NOT relevant.

The BULL MARKET continues and in fact seems to be slowly escalating as we enter a time period of more NORMAL markets. We are FINALLY entering a post-covid era.

 

Smokie mentioned the PCE inflation data.

An inflation gauge tracked by the Federal Reserve falls to its lowest point in 2 years

https://finance.yahoo.com/news/inflation-gauge-tracked-federal-falls-123837598.html

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

"WASHINGTON (AP) — An inflation index that is closely monitored by the Federal Reserve tumbled last month to its lowest level since April 2021, pulled down by lower gas prices and slower-rising food costs.

At the same time, consumers barely increased their spending last month, boosting it just 0.1%, after a solid 0.6% gain in April.

The inflation index showed that prices rose 3.8% in May from 12 months earlier, down sharply from a 4.4% year-over-year surge in April. And from April to May, prices ticked up just 0.1%.

Still, last month's progress in easing overall inflation was tempered by an elevated reading of “core” prices, a category that excludes volatile food and energy costs. The increase underscored the Fed's belief that it will need to keep raising interest rates to conquer high inflation.

Core prices rose 4.6% in May from a year earlier, down slightly from the annual increase of 4.7% in April. It was the fifth straight month that the core figure was either 4.6% or 4.7% — a sign that the Fed’s streak of 10 rate hikes over the past 15 months hasn’t subdued all categories of prices. From April to May, core prices increased 0.3%, a pace that, if it lasts, would keep inflation well above the Fed’s 2% target.

Friday's report from the government suggested that consumer spending is slowing under pressure from high prices and interest rates, a trend that is also likely cooling inflation. As a result, many economists think growth in the current April-June quarter will slow from the 2% annual pace in the first three months of the year.

That cooldown could lead the Fed to decide to skip a rate hike when it meets in September, after a widely expected increase at its next meeting in late July.

“The stickiness of core inflation continues to be the proverbial bee in the bonnet of policymakers at the Fed,” said Shernette McLeod, an economist at TD, a bank. “Consumers continue to be a pillar of support for the U.S. economy. Nevertheless, they are coming under increasing pressures, with high prices, tightening credit and other indicators pointing to a slowdown on the way.”

Grocery prices edged up just 0.1% from April to May, providing some relief to consumers, though food costs are still 5.8% higher than they were a year ago. Gas prices, which sank 5.6% just from April to May, have plunged 22% over the past year.

Used cars soared 4.7% from April to May, though they're still 2.2% cheaper than they were a year ago. Economists expect used car prices to fall soon because measures of wholesale used car costs are declining.

Housing costs keep rising and fueling overall inflation, with rents increasing 0.5% from April to May and 8.7% over the past year.

Friday's report also showed that Americans' incomes rose a solid 0.4% from April to May, outpacing inflation and providing more fuel for future spending.

The report arrives two days after Chair Jerome Powell said the Fed was prepared to keep interest rates at their peak for an extended period to tame the still-rising prices that have shrunk Americans' inflation-adjusted paychecks and disrupted businesses. The Fed's policymakers, as a group, envision two additional rate hikes this year.

“The bottom line is that (interest rate) policy hasn’t been restrictive enough for long enough,” Powell said in his remarks at an international forum in Sintra, Portugal. He reiterated his view that prices for services, such as restaurant meals, hotel rooms and health care, are still rising too fast, driven in part by the need of many companies to raise pay to attract and keep workers.

Inflation has also eased in the 20 countries that use the euro, according to a separate report released Friday. Prices rose 5.5% in June compared with a year ago, down from 6.1% in May. But as in the United States, core inflation has proved more stubborn: It ticked up from 5.3% to 5.4%.

European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey, along with Powell, warned in remarks at the Sintra conference that they, too, will keep raising borrowing costs to fight high inflation.

The U.S. inflation gauge that was issued Friday, called the personal consumption expenditures price index, is separate from the government’s better-known consumer price index. The government reported earlier this month that the CPI rose 4% in May from 12 months earlier.

The Fed prefers the PCE index because it accounts for changes in how people shop when inflation jumps — when, for example, consumers shift away from pricey national brands in favor of cheaper store brands. And rents, which are among the biggest inflation drivers but many economists think aren't well-measured, carry about half the weight in the PCE than the CPI.

Beginning with its first hike in March 2022, the Fed has lifted its benchmark interest rate to about 5.1%, its highest level in 16 years, before forgoing a hike at its most recent meeting earlier this month.

The economy has shown surprising resilience despite the Fed’s rate hikes, defying long-standing forecasts of a recession. A measure of the economy’s growth in the first three months of the year was sharply upgraded Thursday to a solid annual pace of 2%, from a previous estimate of 1.3%.

Still, the economy’s durability could prove a mixed blessing. The Fed is raising rates to try to cool borrowing and spending by businesses and consumers. It hopes employers will then reduce their demand for workers, which, in turn, could slow wage increases and inflation pressures.

Yet if the economy continues to expand at a solid pace, the Fed would likely feel compelled to send rates even higher to achieve its goal of bringing inflation back down to 2%."

MY COMMENT

Inflation is going to slowly trend down from here. I do believe that the FED will do one more hike in July....but that is irrelevant for long term investors. After that will they do one more? Who knows and who cares.

I seriously doubt that they will get to their 2% target. That is a ridiculous target for a healthy economy anyway. Anywhere in the 3-4% range will be just fine and probably a good thing for the economy and investors. A target of 2% is borderline DEFLATION.

Investors appear to be in a very sweet spot going forward over the rest of this year and well into next year.

 

Well Smokie.......I can see selling Nike......I can see holding Nike. As an owner that has concerns but is not ready to sell before seeing about another year of data minimum......I would NOT take issue with anyone that decides to sell the stock.

 

Here is an interesting survey:

"We polled about 400 chief investment officers, equity strategists, portfolio managers and CNBC contributors who manage money about where they stood on the markets for the third quarter and forward. The survey was conducted over the last week."

Looks to me like the results are OVERWHELMING and in favor of this being a legitimate BULL MARKET. ALSO....that there....YES......will be NO recession.

Most investors believe we are in a new bull market and there will be no recession in 2023

https://www.cnbc.com/2023/06/30/mos...t-and-there-will-be-no-recession-in-2023.html

I wonder what the result would be if you polled the general news media and in particular the financial news media?

Here is the not so shocking result:

"Sixty-one percent of respondents believe the market has entered a new bull run, while 39% think this is a bear market rally."

and

"The majority of the investors believe the economy will avoid a severe downturn at least for this year despite the Fed’s aggressive rate increases."

BUT....remember these people are sheep. They change their opinions as often as they change their underwear.