We had a good open today and strong general averages. Right now the markets have backed off as they often do mid day when we see this sort of open. Short term profit taking and trading is the usual culprit. Once we get through this little .....typical....mid morning market hump....we will have a better idea of where the day is headed.
I like this data. Cash Piling Up on the Sidelines https://lplresearch.com/2023/08/25/cash-piling-up-on-the-sidelines/ (BOLD is my opinion OR what I consider important content) "Key Takeaways: Cash in money market funds continues to climb in record-high territory. Rising interest rates supported by the Federal Reserve’s (Fed) higher-for-longer monetary policy and turmoil in the regional banking space earlier this year have underpinned steady inflows into the space. While a Fed rate cut could create some headwinds for money market fund flows, don’t hold your breath for an immediate trend change. High watermarks in money market assets have historically not been reached until the Fed significantly cuts interest rates. Of course, these periods also overlapped near the last three major bottoms in the S&P 500. Higher rates this year have created a high bar for cash coming off the sidelines. Assets in money market funds have climbed to nearly $5.6 trillion, a record-high and a notable 18% increase year to date. For reference, money market funds invest in short-term, high-quality debt or cash equivalents and are intended to provide investors with low-risk income generation and stable liquidity. It is important to note that money market funds are not considered ‘risk-free’ like U.S. Treasuries and are not protected by the Federal Deposit Insurance Corporation (FDIC), which generally insures deposits up to $250,000 per bank. Consistent Cash Flows Cash has consistently flowed into money market funds this year. As of August 16, money market funds have captured inflows during 24 of the last 33 weeks (year to date), including a current five-week inflow streak. View enlarged chart Follow the Money Attractive yields north of 5% have enticed investors to move cash from lower-yielding bank accounts to money market funds. Fund flows out of the banking space were further exacerbated by the turmoil in regional banks this spring—including the shuttering of three major regional banks. The chart below compares total money market assets to total deposit liabilities among commercial banks in the U.S. View enlarged chart When Does the Trend Change? While a rate cut from the Fed could create some headwinds for money market fund flows, don’t hold your breath for an immediate trend change. Initial cuts to the federal funds target rate have not historically marked a peak in money market fund assets. The chart below shows that high watermarks in money market assets were not reached until the Fed significantly cut interest rates. Of course, these periods also overlapped near the last three major bottoms in the S&P 500. The exception was during the rate-cutting cycle that ended in 1992. While assets in money market funds peaked at this time, they mostly consolidated sideways for the next few years (the fed funds rate was also at 3.00%, much higher than subsequent periods). View enlarged chart SUMMARY Money market fund assets have climbed to record-high levels. Elevated interest rates supported by the Fed’s monetary policy and the turmoil in regional banks earlier this year have underpinned steady inflows into the space. While lower rates could create some headwinds, history suggests it could take significant rate cuts before cash in money market funds finally peaks. For equity markets, higher yields mean a higher bar for capital to crossover back into stocks, especially with the S&P 500’s equity risk premium recently falling to over a 20-year low. However, with many investors underinvested in equity markets during the first half of 2023, we suspect any meaningful pullback in the market would likely bring some cash off the sidelines and into stocks. MY COMMENT This is a very good thing for the stock markets. There is a HUGE amount of money siting on the sidelines in the form of money market CASH. Sooner of later.....a good chunk of that money WILL migrate into the stock markets. With this pool of cash siting there we are NOT going to run out of gas in the markets. In addition we are a very long way from crazy stock market EXUBERANCE. Another very good thing for the young BULL MARKET. Lots of food for the bull out there......and....we continue to climb a constant wall of worry.
Speaking of cash earning big interest rates in Money Market funds. The yield on the Ten Year Treasury today is down at.......4.102%. short term the Ten Year peaked on August 21 when the rate hit.....4.366%. So we have seen a nice decrease since that time. Micro stuff.....but......another good indicator for stocks and funds. I dont consider the obsessive focus of the markets on Treasury yields....especially the big tech side of the markets.....as particularly rational. BUT....the above is a good indicator for market strength if this trend continues....even if the market has an........irrational, and obsessive,......focus on the treasury yield.
I like the open today. Stock search for gains after GDP growth revised lower https://finance.yahoo.com/news/stoc...-lower-stock-market-news-today-104539443.html (BOLD is my opinion OR what I consider important content) "Stocks on the Dow edged higher Wednesday as Wall Street eyed a fourth day of gains after revised GDP data showed the US economy grew slower in the last quarter than previously estimated. The S&P 500 (^GSPC) rose about 0.1% while the Dow Jones Industrial Average (^DJI) popped 0.25%, or roughly 75 points. The Nasdaq Composite (^IXIC) hovered just above the flatline. The benchmarks erased earlier small losses after a fresh reading on US GDP showed the economy grew 2.1% in the second quarter, compared with a previous official estimate of 2.4%. Meanwhile, private-sector jobs in August as reported by ADP came in weaker than expected. The data comes amid hopes for a "soft landing" for the economy and plays into assessments of whether the Federal Reserve is done hiking interest rates and potentially denting the economy. Signs of a slowdown in the labor market helped lift the major US gauges to gains on Tuesday. Both releases will set the stage for Thursday's PCE inflation report and Friday's August jobs report, seen as crucial data points that can steer policymakers' thinking. After this summer's stronger-than-expected data, the Fed has noted the economy may not be cooling as it expected, Chair Jerome Powell acknowledged last week. Signs of a slowing economy has been good news for stocks After a string of stronger-than-expected economic data throughout the summer, Federal Reserve Chair Jerome Powell noted in his speech at the Jackson Hole Economic Symposium that the Fed was monitoring the US economy. "We are attentive to signs that the economy may not be cooling as expected," Powell said Friday at the Jackson Hole Economic Symposium in Wyoming. "Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy," he added. This week has brought signs the economy may be headed to below-trend growth. Data out Tuesday showed job openings in July fell below 9 million for the first time in more than two years, and a consumer confidence survey revealed Americans are feeling more wary about the labor market. Then on Wednesday, US economic growth for the second quarter was revised downward and a release from ADP showed private-payroll additions fell from 371,000 in July to 177,000 in August. Stocks jumped after both data releases on Tuesday and Wednesday, as investor bets on the Fed holding rates steady at its September meeting shot up from 78% on Monday to 90% on Wednesday morning. "The downgrade to Q2 GDP growth will be welcomed by Fed officials and reinforces our expectations for a policy pause in September but the door will remain open to further tightening," EY senior economist Lydia Boussour, EY senior economist, wrote in a note to clients." MY COMMENT YEP....more good news for the markets and for investors. This is another stake in the heart of continued rate increases by the FED. Once we start to string together some months of the FED doing nothing the markets will be free and clear to do what they want to do.....and at this moment....that is to GO UP.
Here is the economic news referenced above.....not that it matters directly to investors. U.S. job growth slowed sharply to 177,000 in August, below expectations, ADP says https://www.cnbc.com/2023/08/30/us-...00-in-august-below-expectations-adp-says.html (BOLD is my opinion OR what I consider important content) "Job creation in the United States slowed more than expected in August, according to ADP, a sign that the surprisingly resilient U.S. economy might be starting to ease under pressure from higher interest rates. The firm reported Wednesday that private employers added 177,000 jobs in August, well below the revised total of 371,000 added in July. Economists surveyed by Dow Jones were expecting 200,000 jobs added in August. ADP also reported that pay growth slowed for workers who changed jobs and those who stayed in their current positions. “This month’s numbers are consistent with the pace of job creation before the pandemic,” Nela Richardson, chief economist at ADP, said in a press release. “After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.” The weaker-than-expected report comes as investors and economists are split on whether inflation in the United States can continue to trend down to 2% without a significant slowdown in the economy. Labor market strength has been a key reason the economy has grown faster than many expected in 2023. The Federal Reserve hiked rates to the highest in 22 years in July and Fed Chair Jerome Powell signaled last week that the central bank was prepared to raise further this year." The ADP report has traditionally been seen as a signal of what the Department of Labor’s monthly jobs report will show. However, the firm did change its methodology last year, which makes its predictive tendencies less clear. The Department of Labor’s jobs report is due out Friday." MY COMMENT GOOD, GOOD, GOOD.....news for stock and fund investors. BUT....this government and semi-government data is secondary fluff to real investing. What counts as usual is.....EARNINGS going forward over the next 12-18 months.
Looks like we are....HOPEFULLY.....done with the little mid-morning drop. ONWARD AND UPWARD. My short term goal is to see the markets today and tomorrow significantly reduce the already SMALL losses in August. I take enjoyment in seeing all the "experts" proven wrong. There has been a pretty good amount of content about the horrible returns in August this year and historically. If we can have a couple of good days we will significantly reduce those already small losses to minimal. Yes all the so called "experts" are usually shown to actually be MORONS. The people that are consistently right about investing and the markets are the HUGE silent majority of investors that invest for the long term over their lives.
I cant resist a short mention ov NVDA. The stock has been on fire yesterday and today. We saw a brief post-earnings dip as the markets dealt with and consolidated all the earnings hype and excitement. The profit takers got in their sales orders and the speculators bailed. Probably even some retail investors started to panic a little bit when the stock went down following earnings. All the short term post-earnings drop in the stock have now been quickly made up.
And it begins. AI-powered investment platform becomes first non-human financial advisor regulated by SEC ChatGPT-driven PorfolioPilot is now registered as a financial advisor by the Securities and Exchange Commission https://www.foxbusiness.com/technol...rst-non-human-financial-advisor-regulated-sec
When I looked a few minutes ago I had a nice gain going in my account today. Two stocks were up significantly.....AAPL and NVDA. Four stocks were up in a shallow fashion with tenuous gains......GOOGL, HD, AMZN and MSFT. AND....two stocks were down.....COST and HON. This tells me that we have a long way to go to the close and nothing is set in stone today with the number of small gainers. BUT....for an open to the day.....much better than a red open.
A few days late and a few dollars short I pulled the plug on NIKE and put it all in NVDA. So if NVDA crashes you know the reason why… As I’ve said many times in the past, I’m not a fan of buying at the top, and each time I have done so in the past I always got burnt, but NVDAs earnings are simply a no brainer here, while NIKE will take AWHILE to recover. So my largest position is now NVDA and it seems like the market has room to grow, so no regrets
That seems like a very smart move Zukodany. NIKE is not going to do much for a while if ever. You did not buy NVDA anywhere a top. I am sure you already have a pretty nice few days gain since it appears that you bought it with good timing during the post earnings drop. PLUS.....doing a lateral transfer and moving that money from NKE right into NVDA.....GREATLY increases your PROBABILITY to make money on those funds over the next few years. AND.....yes you may have gotten burned in the past buying at the top....but.....first, it is highly unlikely that where you bought NVDA was a top. Second.......whatever you did in the past with other stock purchases has NOTHING to do with this transaction. The past does not control the present. NICE to see you doing an all in all at once.....lateral move....trade. The research strongly shows that this is the best way to make money going forward.....NOT....waiting for an entry point of slowly filtering the money in. I am sure you are already seeing the benefit with a good gain in your NVDA shares already. FINALLY.....welcome to the NVDA club. You have plenty of company.
For Zukodany. Nvidia just hit record highs, but stock may still be 'cheap', says analyst https://finance.yahoo.com/news/nvid...ay-still-be-cheap-says-analyst-190648625.html (BOLD is my opinion OR what I consider important content) "Nvidia (NVDA) stock just hit all-time highs, but one analyst argues it's still "cheap." “We cover a diverse basket of AI-related stocks and Nvidia is now trading at only a modest premium to the group on a PE basis,” Melius Research analyst Ben Reitzes wrote in a note to investors. "Dare we say Nvidia is now cheap?" The analyst highlights the graphics chip giant’s stock is trading at 28 times consensus earnings projections for 2024. “This multiple is below stalwarts like AMZN (AMZN), ADBE (ADBE) and MSFT (MSFT)—even though Nvidia estimates may be among the most conservative,” he added. Nvidia is up 240% year-to-date after posting back-to-back blowout quarters in 2023. The company’s second quarter earnings blew away already sky-high expectations as the AI hype train continues to push the stock higher. Such results have prompted analysts to question "How high can the stock go?" Melius Research has a Buy rating on the stock, with a price target of $730 versus an average Street consensus of $643. The highest price target on the stock is $1100, assigned by Rosenblatt Securities analyst Hans Mosenmann. On Wednesday shares of the chip maker rose to a session high of about $499 each. Nvidia stock has 56 Buy, four Hold, and zero Sell ratings." MY COMMENT I am not an analyst follower. I rarely look at their analysis. SO.....look back a week or two in this thread to the day of the NVDA earnings. On that day I posted a release from the NVDA Investor Relations outlining the earnings. In that release is EXTREMELY comprehensive Financial Reports going back over the past few years. I was comparing those numbers in the release and the MASSIVE increases every earnings period are simply INSANE NUMBERS. I strongly recommend anyone that is thinking of this stock......go through the last two years of company financials.
HERE is the NVDA financial statements. NVIDIA Announces Financial Results for Second Quarter Fiscal 2024 https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2024 If you want to see REALLY INSANE numbers do a comparison of their financial statement numbers for the past five years.
OK....a good close for my account today and some money made. I ended the day the same way I was this morning.....SIX stocks UP and TWO down. The down stocks....same as earlier.....HON and COST. I also got in a nice little beat on the SP500 today by 0.34%. All in all a very good day for the markets and my account. For the past five days the SP500 is up by 1.34%. For ONE MONTH....it is down by (-1.61%). We are erasing the August losses. If we can get another positive day tomorrow we can get to the point where the SP500 for August is showing a NEGLIGIBLE LOSS. One day till September and the final.....four month.....push to year end.
We are now UP for the past four days in the big general averages. Back on track. S&P 500 rises for a fourth straight day, major averages curtail monthly losses in late August hot streak https://www.cnbc.com/2023/08/29/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "The S&P 500 advanced Wednesday for a four-day winning streak, as investors assess new U.S. economic data. The broad-market index climbed 0.38%, surpassing the 4,500 level, to close at 4,514.87. The Dow Jones Industrial Average added 37.57 points or 0.11%, to finish the session at 34,890.24. The tech-heavy Nasdaq Composite advanced 0.54% to 14,019.31. The S&P’s four-day gain helped the index trim month-to-date losses to roughly 1.6%. The S&P 500 tech sector continued to rise for a fourth-straight day, aided by a nearly 1% jump in chipmaker Nvidia. Shares of Apple climbed almost 2%, a day after the company sent out invites for a Sept. 12 launch event where the iPhone 15 is expected to be unveiled. Wednesday’s moves come as traders pore over disappointing payrolls data. ADP said private employers added 177,000 jobs in August. That’s well below a revised July number of 371,000. It also missed a Dow Jones estimate of 200,000. Meanwhile, annual gross domestic product growth was downwardly revised on Wednesday to 2.1% from the previous 2.4% forecast. This is the second day investors have appeared to treat weaker-than-expected economic data as good news for stocks. “Traders and investors alike want to see ‘follow through’ in today’s market action, helping to confirm that the uptick in market performance is a more viable move as the market heads into September,” said Quincy Krosby, chief global strategist at LPL Financial. On Tuesday, the major U.S. stock benchmarks rallied following the release of disappointing consumer confidence figures and a bigger-than-forecast drop in U.S. job openings for July. This sparked hope among traders that the Federal Reserve could lighten its policy stance sometime soon. 4-day rally in S&P 500 pares month-to-date loss to -1.6% from -5.5% The latest, four-day boomlet in U.S. stocks has pared August’s decline in the S&P 500 to just 1.6% now — from a loss of -5.53% as recently as the intraday low on August 18 when the benchmark index touched its low for the month at 4335. 31. The S&P 500 has climbed as much as 3.32% over the past four trading sessions, using Wednesday’s high water mark of 4,521.65. Of the S&P’s 11 major sectors, only energy (+1.1%) and health care (+0.5%) are higher in August. As yields have backed up this month, utilities are the worst-performing group, slumping -6%." MY COMMENT BUMMER for the DOOM&GLOOM scenario and the end of the BULL MARKET. The BULL MARKET is alive and well as are the markets. This is exactly how the markets work over the short and long term. You NEVER know when the gains are going to suddenly hit and quickly escalate. There is no way to predict the explosive market gains. You simply have to be exposed to the markets......for the long term......in order to enjoy the gains as they happen. It is impossible to try to anticipate this stuff....you will just kill your returns if you try to figure this sort of stuff out and time the markets. YOU just have to sit and enjoy the ride and have some fun CELEBRATING when the markets are up and hunker down and do nothing when they are not.
Exactly W, well, I kinda EXAGGERATE when I say I buy at a “top” since we don’t know what a top is until it materializes, in that sense, I did buy a few stocks when they were “higher” in the past and they ended up growing and growing. But most of the times I prefer to buy a good company when they are fast asleep. So overall, no regrets with shifting NKE to NVDA. NVDA right now are unstoppable, and the likelihood that that party will come to an end, or rather, the PROBABILITY of that climb peaking, is only eclipsed by the probability of NKE actually starting to perform. Funny, I made the case of selling NKE a few weeks ago, but at the time I didn’t sense an opportunity. Now, that the markets started to climb again, and NVDA reported 2 OUTSTANDING earning reports, clearly showcasing market dominance, I decided to make the switch. The only thing that gets me a little concerned is the fact that NVDA now holds a large chunk of my portfolio (mostly because I bought tons of it when it was low)
here's what my robot pal (i think i'll call him maxwell smart) at chatgbt has to say. ---------------------- Buying stocks at or near their all-time highs can be risky, as it often means that the stock has already experienced a significant upward movement in price. However, whether it's a good idea to buy stocks at the top depends on a variety of factors, including the overall market conditions, the company's fundamentals, and your investment goals. Here are some considerations to keep in mind: Market Trend: If the overall market is in an uptrend and there is positive momentum, buying stocks at or near their all-time highs might not be as risky. However, if the market is showing signs of weakness or is in a downtrend, it might be riskier to enter at such high levels. Company Fundamentals: Evaluate the company's financial health, earnings growth, competitive position, and other relevant factors. If the company's fundamentals are strong and it has the potential for continued growth, buying at a high price might be justified over the long term. Valuation: Consider the stock's valuation relative to its historical averages, industry peers, and overall market. If the stock appears to be overvalued based on traditional valuation metrics, it could be a red flag. Investment Horizon: Your investment horizon matters. If you're a long-term investor with the intention of holding onto the stock for years, buying at the top might not be as concerning, as the stock could continue to appreciate over time. Short-term traders, however, might face more risk in such situations. Diversification: Don't put all your eggs in one basket. Diversification can help mitigate risk. Even if you decide to buy a stock at its peak, make sure your overall portfolio is diversified across different sectors and asset classes. Risk Tolerance: Consider your own risk tolerance. Can you handle potential short-term losses if the stock experiences a correction after your purchase? Timing and Averaging In: Instead of making a large investment all at once, you could consider a strategy of dollar-cost averaging. This involves investing a fixed amount of money at regular intervals, which can help mitigate the impact of market volatility. Research and Analysis: Before making any investment, thorough research and analysis are crucial. Don't rely solely on past performance. Look at the company's growth prospects, competitive landscape, industry trends, and potential catalysts. In summary, buying stocks at their all-time highs can be both an opportunity and a risk. It's important to carefully assess the factors mentioned above and make an informed decision based on your investment goals, risk tolerance, and the overall market environment. If you're unsure, consider consulting with a financial advisor who can provide personalized guidance based on your individual circumstances.
"The only thing that gets me a little concerned is the fact that NVDA now holds a large chunk of my portfolio (mostly because I bought tons of it when it was low)" I know what you mean above Zukodany. NVDA is now at about 20% of my one portfolio. In the other portfolios that I manage it is also the largest holding but not quite that large. At his level I can see how it has the ability to drag the portfolio up or down on certain days. I am not a fan of having that much exposure to a single stock on a day to day basis.....but....I am making an exception for this company. I also figure that since I am going to be adding about $20,000 to $25,000 per year to the SP500 portion of this account each year going forward for the foreseeable future.....I can take that risk......while the portfolio mix slowly changes over time with the additions. Basically......NO GUTS, NO GLORY. PLUS....with the gains that I already have in this stock....I dont think I could ever end up losing money on it....just losing gains to date. So not a lot of risk to initial investment funds....although in a worst case situation......a lost opportunity for those funds.
