The Long Term Investor

Love that post Smokie.......the squeaky wheel gets the grease.......WD40. NICE ONE.

 

I just got a chance to see my account results for the day. A LOSS for me. BUT......not much considering how much I was down earlier in the day and how much my account came back by the close. I also lost out to the SP500 by 0.79% today.

My non-tech companies were all positive and helped me to weather today with a smaller loss. Those UP stocks today......HD, HON, NKE, and COST. they did their job for my portfolio today.

 

I like this "guess"......but please dont bet the farm or anything else on this short term call. I find it interesting.....so I am posting this article. BUT.......I will wait for the REAL DATA to know if this is going to be true or not.

Inflation is about to show a big drop and investors should load up on stocks ahead of this week's CPI report, Fundstrat says

https://finance.yahoo.com/news/inflation-show-big-drop-investors-221755541.html

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

• "The S&P 500 is poised for a 2% rally this week that should push the index past 4,500, according to Fundstrat.
  
  
• The firm said it expects the June CPI report to show that inflation is continuing to decelerate.
  
  
• "For the first time this year, we are issuing a short-term tactical buy call on the S&P 500," Fundstrat's Tom Lee said."
  

"Fundstrat issued a tactical buy recommendation on the S&P 500 for this week, expecting that the index will surge more than 2% to above the 4,500 level, according to a Monday note.

The main catalyst for the expected jump higher is lower-than-expected inflation, with Fundstrat's Tom Lee estimating that the June CPI report, due out this Wednesday, could show a month-over-month print of 0.25%, which would be below consensus estimates of 0.30%.

Additionally, last week's sell-off in stocks sparked by a hot ADP jobs report that was followed up by a weaker-than-expected employment report from the Bureau of Labor Statistics provides an attractive entry point into the stock market.

"We do not typically issue such short term tactical calls, but given the softness of markets following the ADP and BLS jobs report, we think the timing makes sense," Lee said.

Lee's confidence in a low inflation report is driven by the continued decline in used car prices, as well as seasonal adjustment factors that should push Core CPI lower in June and July. Lee also highlighted that 42% of CPI components are in outright deflation, which is well above the long-term average of the index.

A low inflation reading would be bullish for the stock market because it would undermine the view that the Federal Reserve will keep interest rates higher for longer. It would likely also put downside pressure on short-term rates and hurt the idea that the rally in stocks since the low last October is merely a bear market rally.

"We think investors have shifted towards a 'hawkish Fed' view, and a 'higher for longer' which is reflected in the rise in yields. So, the idea of a tactical re-think from a light CPI report would make sense," Lee said.

The tactical buy recommendation from Fundstrat is in place until this Friday, July 14.

"If our view is correct, there will be a rapid re-assessment of views, which drives this upside," Lee said. "This would essentially shatter the bear market thesis."



Fundstrat"

MY COMMENT

I hope this call is right. I guess we will find out on Wednesday.

PLEASE.......this is not a call for anyone to enter or buy the markets. Much of this article is......"could" or "might". It is far from a sure thing. Even if it turns out to be true.....there is NO GUARANTEE that the markets will react as expected.

As a fully invested all thee time investor.....I will take it if this turns out to be right. if it is not......well I will simply remain fully invested as usual

 

I am not sure what this means.....if anything.

Microsoft confirms more job cuts on top of 10,000 layoffs announced in January

https://www.cnbc.com/2023/07/10/mic...-cuts-on-top-of-10000-layoffs-in-january.html

"Key Points

• Microsoft is slimming down its salesforce.
• The new layoffs are separate from the 10,000 job cuts Microsoft announced in January.
• Salespeople and customer success representatives posted messages on social networks to announce they lost their jobs."

MY COMMENT

On one hand I might take this as a sign of business problems. Sales people and customer service people are the guts of a business.

On the other hand.....a good number of these people were.....virtual. And the company may just be cleaning out dead wood and unnecessary workers and reorganizing talent.

I do trust and have great respect for the current MSFT management and leadership. I expect they know exactly what they are doing.

HERE is one explanation.....which may or may not be true:

Microsoft is reorging its field sales team, laying off some 'Modern Desktop' salespeople
Microsoft is cutting a number of field sales jobs as part of one of its regular reorgs, specifically ones involving pushing Windows as a key part of their charter.

https://www.zdnet.com/article/micro...m-laying-off-some-modern-desktop-salespeople/

 

YEP.......the NASDAQ 100 re-balancing sell off for the BIG SEVEN. That hit the markets yesterday and is lingering into today.

In addition we are now on.......CPI WATCH.

There is nothing a long term investor can do when the short term "stuff" overwhelms the markets. Just sit and wait it out.

 

I have been watching the markets since the open today. About the same as yesterday.....but.....the NASDAQ 100 stuff is not as strong today. Having just looked at my account I am in the green so far today. My three losers at this moment are.....AAPL, TSLA, and MSFT.

I have hope for a good finish later today. BUT......"HOPE"......is not a real scintillating market strategy or predictor.

 

The market today.....so far.

Dow rises more than 100 points Tuesday ahead as traders await key inflation data

https://www.cnbc.com/2023/07/10/stock-market-today-live-updates.html

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

"U.S. stocks rose slightly Tuesday, after the major averages snapped a three-day decline, as traders awaited key inflation data slated for release later in the week.

The Dow Jones Industrial Average advanced 158 points, or 0.4%. The S&P 500 traded higher 0.2%, while the Nasdaq Composite
also added 0.1%.

Etsy jumped 8%, making it one of the best-performing stocks in the broad market index. Meanwhile, Salesforce
’s stock rose 4% after the company announced it would increase price across the board in August.

Investors are coming off a positive session for the major averages. On Monday, the Dow Jones Industrial Average gained 209.52 points, or 0.62%, while the S&P 500 advanced 0.24%. The Nasdaq Composite lagged, rising just 0.18%.

The June consumer price index report set for release Wednesday, as well as the June producer price index due out Thursday, will shed light on whether the decline in inflation has continued, and create the backdrop for future direction of interest rates.

Investors have penciled in another quarter-point increase at the Federal Reserve’s July 25-26 meeting. But they are undecided about what the central bank will do at its September meeting after last week’s continued robust jobs data raised concern that policymakers will revert to raising rates following the June pause.

“I think [on Wednesday] you’re going to see further evidence that the CPI-measured inflation is continuing its descent. And a lot of that was because of the impacts of Covid. But that’s not good enough for the Fed. The Fed worries about being [a] wage price spiral,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

“I think there’s going to be a recession, because the Fed [will] keep going until they see the labor market crack and until wage [growth] goes well below 4%,” Schutte continued.

Second-quarter earnings season kicks off later this week with results from “systemically important financial institutions” such as JPMorgan Chase, Wells Fargo and Citigroup, plus BlackRock, PepsiCo and Delta Air. Dow component UnitedHealth reports Friday."

MY COMMENT

AS USUAL lately......nothing new today. It will be nice to get past the end of July FED meeting since we will than have a NO FED gap till September.

I expect that bank earnings will kick off the season in a good way. HEY.....remember the bank crisis? Never-mind.

I am seeing more and more predictions for a nice CPI inflation drop. We will find out if this is truth or wishful thinking tomorrow.

 

I am surprised that this news is NOT driving MSFT higher. BUT......I really dont think this deal is possible with the EU opposition.

Microsoft-Activision deal moves closer as judge denies FTC injunction request

https://www.cnbc.com/2023/07/11/mic...es-closer-as-judge-denies-ftc-injunction.html

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

"Key Points

• A federal judge in San Francisco ruled in favor of Microsoft and Activision Blizzard, which have been trying to complete their $68.7 billion deal by July 18.
• The U.S. government can now appeal the judge’s decision in appellate court.

A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to stop Microsoft from completing acquisition of video game publisher Activision Blizzard.

The deal isn’t completely in the clear, though. The FTC can now file its appeal of the decision to federal appellate court, and the two companies must find a way forward to resolve opposition from the Competition and Markets Authority in the United Kingdom.

“This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action,” Judge Jacqueline Scott Corley wrote in her decision, published on Tuesday. “For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

Activision Blizzard shares reached a session high of $88.03 per share after the U.S. District Court for the Northern District of California issued the decision. Microsoft had agreed to buy the game publisher for $95 per share.

“Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” Activision Blizzard CEO Bobby Kotick said in a statement.

Microsoft also hailed the decision.

“We’re grateful to the court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution,” Brad Smith, Microsoft’s president and vice chair, said in a statement. “As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

The decision comes after five days of court hearings to assess whether Microsoft would be able to complete the $68.7 billion Activision Blizzard acquisition it announced in 2022. The judge was deciding whether to grant the FTC’s request for an emergency injunction to prevent the deal from closing.

The FTC argued Microsoft has shown an interest in making some games exclusive, to prevent them from appearing on Sony’s PlayStation or Nintendo’s Switch, and that it might do so if the deal were to close. But Microsoft said the company would want to make Activision’s titles more widely available, rather than less, partly to grow from people subscribing to its Game Pass library of games. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick both testified, as did executives from Alphabet, Nvidia and Sony.

In December the Federal Trade Commission filed suit to block the deal and have an administrative law judge at the agency assess it. But in June, before that could happen, the FTC requested a preliminary injunction to prevent Microsoft from completing the acquisition, with an eye toward bringing the case to its administrative law judge on Aug. 2. The two companies were looking to close the deal by July 18.

“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” an FTC spokesperson said.

Kotick said during the hearings that the Activision Blizzard board didn’t see how the deal could continue if the judge were to grant the preliminary injunction."

MY COMMENT

There are still many road blocks for this deal. At least this is a bit of good news along the way.

 

Here is a bit of good news for another one of the BIG SEVEN.

Apple’s Mac market share jumped even though PC sales fell for the sixth consecutive quarter

https://www.cnbc.com/2023/07/11/app...s-fell-for-the-sixth-consecutive-quarter.html

"Key Points

• Apple’s Mac market share increased to 8.6%, reporting year-over-year shipment growth of 10.3%, the only major manufacturer to do so.
• The year-over-year Mac shipment growth comes even as the broader market and competitors notch sharp declines in shipments, and as the Intel transition wraps up.
• Lenovo, HQ, Dell and Acer all had year-over-year drops in shipments, according to IDC data."

MY COMMENT

I will take increased market share in one of my stocks any time I can get it. Money in the bank.

 

I am seeing a lot of good news about the BIG SEVEN stocks today and lately. Sooner or later it is going to show up in share prices. I am also seeing a lot of positive articles.

My view is the lingering lagging market we have been in for this week and last.....will break.....sooner or later to the positive. The markets can not go up all the time. A pause is a normal event......and....that is what we are seeing now.

The KEY going forward will be......of course.....EARNINGS. FIVE of the big tech names will report over the next TWO WEEKS.....TSLA, GOOGL, MSFT, AAPL, and AMZN.

 

The Ten Year Treasury yield has now fallen back below 4%. At this moment it is at 3.976%. Looks like some sense and reason has now been reestablished.

 

I like this little article.

Years Later, Still Not Much Meat Behind ‘FedCoin’ Fears

https://www.fisherinvestments.com/e...ater-still-not-much-meat-behind-fedcoin-fears

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

"The mythical “digital currency” is actually a hypothetical interbank payment system.

Every now and then, a story makes the rounds in certain corners of the financial news space, creating a big frenzy—usually a fearful one—over something that isn’t actually happening or doesn’t actually exist. These days, that is happening with a thing everyone calls Fedcoin, which is a moniker for the Fed’s mooted digital dollar. We wrote about this in 2020, noting it wasn’t a thing. To date, the Fed still does not have a digital dollar. Nor has it announced plans to create one. The New York Fed is merely studying the feasibility, as well as potential pros and cons. The effort predates the Biden administration, although the president did back the study by issuing a rather redundant executive order to that effect. This was a first step in a broader exploration that may or may not result in anything—with some early findings released last week. Some of the fear here is sociological, seemingly egged on by the Bank of England’s jawboning about how it could tie a “decentralized digital identity” to a hypothetical digital pound in the future (and with it, do things like age-restrict or allow certain kinds of spending automatically, like alcohol and tobacco).[ii] Others worry a digital dollar means a paper dollar is dead. When you look at the actual parameters of the New York Fed’s study, however, it becomes clear that reality is quite far from this—and quite benign. The latest report, released last Thursday, shows this so-called digital dollar amounts to a modernized interbank payment system.

This may seem like a weird topic for us, considering it is rather detached from the stock market. But we have seen fear over an alleged Fedcoin and its ilk can make people question the overall soundness of US capital markets, the dollar itself—and the wisdom of stock investing. And, well, maybe we are biased, but we think the stock market is a great way to build long-term wealth, and we want as many people to participate in it as possible so that all can reap the benefits. Hence, we journey down this particular rabbit hole.

We do so via a short but rather technical publication from the New York Fed’s New York Innovation Center (NYIC) with the thrilling title, “Facilitating Wholesale Digital Asset Settlement.” Working with several commercial banks, the NYIC wanted to determine whether adopting some of the technology underlying digital currencies could speed money transfers between two institutions, both within the US and across international borders. While the current wire transfer systems work just fine, the NYIC notes that “certain frictions remain, particularly around speed, cost, accessibility, and the settlement process.”[iii] Could forming a new payment system around the distributed ledger technology (aka blockchain) that underpins cryptocurrencies address these issues? This is what the researchers sought to discover.

So they designed a new network based on a distributed ledger “to settle payments between tokenized regulated commercial bank and central bank liabilities.” For domestic interbank payments, “transactions were conducted in commercial bank deposit tokens and settled using a theoretical wholesale central bank digital currency, a tokenized record of a central bank liability.” So, basically, the theoretical central bank digital currency (CBDC) was an airport layover. The money started at one bank as normal dollar deposits, took a trip on the blockchain, spent a brief spell as a CBDC so the transaction could get verified, then took another trip on the blockchain to the receiving bank—where it reappeared as normal dollar deposits. For cross-border payments, the same technology “explored the potential of the concept to enhance the experience of global users of U.S. dollars as an international trade and settlement currency.” So basically, making international trade payments faster and even more secure.

The NYIC says the experiment was a success, with the benefits most obvious in cross-border payments: “The proposed architecture was able to deliver the benefits of settlement finality, a common source of truth, standard transaction data, and privacy for all participants on the network.” It could also “facilitate settlement on a near-real time, 24 hours a day, 7 days a week basis.” Frictions reduced!

There are a few things to glean here. One, again, a Fed CBDC doesn’t exist. This was all hypothetical. Two, it is all about infrastructure, and the Fed’s involvement in bank payment infrastructure is nothing new. The Fedwire Funds Service already exists. When you send a wire transfer, your funds clear through your bank’s account at the Fed and credit the receiving bank’s account, for credit to the ultimate recipient. The blockchain-based system would simply be a more modern, faster alternative than this. And, in theory, third-party systems like the Automated Clearing House (ACH) network that process direct deposits.

If these terms are unfamiliar to you, there is a reason: They are portals that banks use to execute transfers and payments on customers’ behalf. Jim and Jane Client don’t interact with those interfaces directly. They just put in the transfer or payment request and move on. We suspect that if the Fed had used another term for this besides CBDC—maybe “newfangled superfast awesome payment system, or NSAPS”—no one would be batting an eye. It would be too boring to get any attention, much less conjure bigtime fear. But alas, that is the term they used, and there aren’t any do-overs.

Anyway, hopefully it should be obvious from all of this boring back-end infrastructure talk that the paper dollar isn’t going away. Nor is the money in your bank account about to turn from normal dollars to “digital dollars” any more than they already are.[iv] And this is not about having a FedNow app on your phone where you store digital dollars to buy goods and services. If the Fed were to adopt a system similar to what the NYIC researched, consumers would never even see the digital currency, never mind use it on a daily basis.

Whenever something new emerges like this, it is easy to get carried away. But if you take a deep breath and take the time to dig into the details, you will usually find the hype goes poof, leaving an innocuous reality in its wake.

MY COMMENT

At this time I am not going to worry about all this sort of semi-conspiracy stuff. There will be plenty of time and notice later if this Is going to happen. In addition as a regular person it is not like I am going to have any control over this sort of stuff anyway.

 

YEA.....a nice medium gain today. Only a single stock down today.....and not by much....AAPL. I did get beat by the SP500 today by 0.15%.

All in all a nice day. We are now back on the positive track. Tomorrow is CPI day.

 

Here is how we did today.

Dow closes 300 points higher Tuesday as key consumer inflation report looms

https://www.cnbc.com/2023/07/10/stock-market-today-live-updates.html

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

"U.S. stocks rose Tuesday, after the major averages snapped a three-day decline, as traders awaited key inflation data slated for release later in the week.

The Dow Jones Industrial Average advanced 317.02 points, or 0.93%, to close at 34,261.42. The S&P 500 rose 0.67% to end at 4,439.26. The tech-focused Nasdaq Composite gained 0.55% to 13,760.70.

Salesforce’s stock rose nearly 4% after the company announced it would increase prices across the board in August. Activision Blizzard’s shares jumped 10.02% after a federal judge denied the Federal Trade Commission’s request for a preliminary injunction to stop Microsoft’s acquisition of the video game company. The decision meant that the two companies were closer to completing their deal.

The June consumer price index report set for release Wednesday, as well as the June producer price index due out Thursday, will shed light on whether the decline in inflation has continued, and create the backdrop for future direction of interest rates. Economists polled by Dow Jones expect the index rose 3.1% last month on a year-over-year basis.

Investors have penciled in another quarter-point increase at the Federal Reserve’s July 25-26 meeting. But they are undecided about what the central bank will do at its September meeting after last week’s continued robust jobs data raised concern that policymakers will revert to raising rates following the June pause.

“I think [on Wednesday] you’re going to see further evidence that the CPI-measured inflation is continuing its descent. And a lot of that was because of the impacts of Covid. But that’s not good enough for the Fed. The Fed worries about there being [a] wage price spiral,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

“I think there’s going to be a recession, because the Fed [will] keep going until they see the labor market crack and until wage [growth] goes well below 4%,” Schutte continued.

Second-quarter earnings season kicks off later this week with results from “systemically important financial institutions” such as JPMorgan Chase, Wells Fargo and Citigroup, plus BlackRock, PepsiCo and Delta Air. Dow component UnitedHealth reports Friday.

MY COMMENT

All in all a nice day. the DOW is doing well lately but STILL significantly lags all the other averages year to date.

Salesforce mentioned above is a stock that I would evaluate and consider if I was going to add a stock. I have not looked at it much up to now and I am NOT planing to add it at this time.

 

Speaking of Salesforce.

Salesforce to raise prices of some cloud products from August

https://www.cnbc.com/2023/07/11/sal...e-in-7-years-what-it-means-for-the-stock.html

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


"(Reuters) - Salesforce will raise prices for some of its cloud and marketing tools by an average 9% from August, the maker of software for customer relations management said, sending its shares up nearly 4% in early trading on Tuesday.

Its first price hike in seven years comes at a time when Salesforce and several other technology companies are increasing their spending to include generative artificial intelligence (AI) to their products and services.

The company has over the past seven years invested more than $20 billion in research and development to add new features, including generative AI tools, to its software.

The price hike also comes as revenues from cloud services that grew at a scorching pace during the pandemic lockdown have started to slow.

Growth at big cloud players such as Microsoft, Amazon.com and Alphabet has come under pressure as enterprise clients look to optimize their cloud spending amid rising cost of borrowing.

The new prices for Tableau, Sales Cloud, Service Cloud, Marketing Cloud and Industries will cover new and existing customers, Salesforce said."

MY COMMENT

After no price hikes for seven years customers can hardly complain.....but....I am sure some will. Good news for investors that own the stock.

 

That is about it for today. All eyes are on the CPI tomorrow. A good start to the week with the DOW and the SP500 UP for two days in a row.