The Long Term Investor

To continue the POSITIVE.

Two Fresh Signs of Receding Froth

https://www.fisherinvestments.com/en-us/insights/market-commentary/two-fresh-signs-of-receding-froth

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

"The squeeze comes for niche stock funds and AI startups.

One long-running bear market truism is that these grueling, grinding downturns serve to squeeze accumulated excess out of the economy and markets, setting the stage for the next expansion and bull market. That process is obvious enough when bear markets precede recessions. But what about when they don’t, as was the case (so far) with 2022’s? We saw some evidence of a shakeout in Tech layoffs and weak business investment, but it was mostly a trickle. Now, two stories in Wednesday’s Wall Street Journal hint at the process continuing alongside stocks’ 2023 rebound, which we think underscores this young bull market’s firm foundation.

Usually, you can see a bear market’s impact in the big cost cuts it generates as businesses, battered by panicky declines, fear for their survival. This often parallels economically sensitive value stocks’ getting battered, setting up their early rebound. Since all-clear signals don’t exist, cuts usually continue well into an early bull market.

This has been harder to see this time, and we think there are a few reasons why. One, inflation hit all points of the supply chain, boosting nominal costs even as some companies trimmed fat. Two, value didn’t take its usual pounding this time. Three, credit didn’t contract, which is one of the main motivators to enter bloat-cutting survival mode. Yet that doesn’t mean there was no excess. It was just stealthy, and companies’ battle against it was equally hard to see outside the aforementioned layoffs, office closures and scrapped investment plans.

Now the shakeout is becoming more apparent in other areas that previously looked a bit frothy. One such area: niche exchange-traded funds (ETFs). Not broad market-wide, sector or regional funds, but small thematic ones, like meme stock funds and even funds consisting of leveraged plays on single stocks. According to the Journal, 929 funds have closed globally year to date, light years ahead of the 373 closures at the same point last year. This includes 178 shuttered US exchange-traded products, well above 2022’s full-year total of 142. Many of these were upstarts trying to capitalize on heat chasing and enthusiasm for hot new trends including the metaverse and Gen Z’s values and consumption habits. Pretty frothy creations, in our view. And now, in the wake of last year’s bear market, the enthusiasm is gone.

The other headline-grabbing squeeze centers on the widely hyped AI startup space. Less than a year ago, when ChatGPT launched in November, AI startups were hot and buzzy, with venture capitalist backers cheerleading nonstop. Money poured in as investors eyed quick riches from light-speed mass adoption. And now? Users are losing interest, startups are navigating layoffs, and—as we thought likely—the spoils are mostly accruing to the large Tech companies that had the clout and economies of scale to absorb the high up-front costs of training generative AI models. In the startup space, people are getting more judicious. As the Journal reports: “Venture investors say they are still unsure what a winning business model looks like for a startup building new products around the technology. Many young businesses have yet to prove they can retain users and develop products that existing tech companies couldn’t easily mimic. Training cutting-edge models can cost companies billions of dollars, thanks to the large volumes of data they need to ingest and analyze. Investors have become hesitant to bankroll such businesses, given the uncertain path to profitability and heavy competition from well-funded rivals.”[ii]

At the risk of sounding callous, pain in niche ETFs and AI startups is a good sign for broader markets. The more froth gets squeezed out, the more it frees up capital for more productive investments, ultimately fueling more growth and returns. It also is a very strong indication the new bull market isn’t rising on a bunch of hot air. Rather, it looks like the standard case of stocks digesting a panoply of fears and dreary economic expectations last year, then bouncing high and fast once that pre-pricing process finished and markets could look further ahead to the future earnings recovery. It may not be the most exciting story, but stocks don’t need exciting narratives and hot themes. Reality plodding along better than expectations is enough, and we have that in spades now."

MY COMMENT

I especially like that comment about reality PLODDING along better than expectations....being enough to drive the bull market. That is really all it takes. Add in the uniformly negative media and you have the current reality.

The markets just plod along like Forest Gump......OBLIVIOUS....to what is being said all around them.

 

Here is.....of course.....the reason for the short term green in the markets today.

US economy adds 187,000 jobs in August, unemployment rate unexpectedly rises to 3.8%

https://finance.yahoo.com/news/us-e...-rate-unexpectedly-rises-to-38-155705157.html

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

"The US economy added 187,000 jobs in August, while unemployment unexpectedly increased as the labor market continued to show signs of cooling, data from the Bureau of Labor Statistics showed Friday.

In August, the unemployment rate rose to 3.8%, up from 3.5% and the highest since February 2022. Economists had expected unemployment to remain unchanged at 3.5%. Economists surveyed by Bloomberg had expected the economy would add 170,000 nonfarm payroll jobs in August.

Revisions to the July and June jobs reports released Friday showed there were 110,000 fewer jobs created during those months than previously reported. Over the last 12 months, job gains have now averaged 271,000 per month; the economy has exceeded this pace of hiring only twice in the last nine months.

Wages, a closely watched indicator of how much leverage workers are exerting in the labor market, rose less than expected last month, rising 0.2% on a monthly basis and 4.3% over last year. Economists expected wages to rise 0.3% over last month and 4.3% over last year. Wages had risen 4.4% over the last year in July.

The labor force participation rate increased to 62.8%, the highest level since February 2020. Meanwhile, average weekly hours worked ticked up in August to 34.4, up from 34.3 in July.

"August payrolls were stronger than expected, but were paired with notable downward revisions to June and July, showing a slower job growth trend," Morgan Stanley chief US economist Ellen Zentner wrote in a note on Friday. "The report today continues to point to a labor market that is softening but not falling off a cliff."

By industry, the largest increases in Friday's data were seen in healthcare, which added 71,000 jobs.

Employment in leisure hospitality rose by 40,000 jobs, less than the 12-month average of 61,000. Employment in this industry remains below pre-pandemic levels by about 1.7%, the BLS said. Construction employment added 22,000 jobs.

Transportation and warehousing jobs declined by 34,000. Employment in truck transportation fell sharply, shedding 37,000 jobs, per the BLS. Trucking company Yellow filed for bankruptcy in August.

Last week, Fed Chair Jerome Powell described the labor market's rebalancing as "incomplete." Powell has repeatedly noted that getting inflation back down to the Fed's 2% goal will require "some softening in labor market conditions."

"We expect this labor market rebalancing to continue," Powell said in a speech at the Jackson Hole Economic Symposium. "Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response."

Since Powell's speech, early signs from other economic data have hinted that the US economy may be cooling off after a stronger-than-expected summer.

New data from ADP released Wednesday showed private employers added 177,000 jobs in August, a significant slowdown from the 371,000 jobs added in July. On Tuesday, the latest Job Opening and Labor Turnover Survey, or JOLTS report, showed job openings in July fell below 9 million for the first time in more than two years. To top it off, a consumer confidence survey revealed Americans are feeling more wary about the labor market.

"The August jobs report gives the Fed plenty of room to leave policy steady at this month's FOMC meeting," Oxford Economics lead US economist Nancy Vanden Houten wrote in a note on Friday. "The trend in job growth continued to slow, the unemployment rate rose, labor force participation increased, and earnings growth decelerated, all signs that the supply and demand for labor are coming into better balance.""

MY COMMENT

I am putting the odds of a FED rate hike in September at......ZERO. Unfortunately I do not get a vote.......so take my view with a grain of salt.

The MAJORITY of economic data this month is fully in support of a long term pause in thee rate hikes.

 

Now that we have been open for an hour....it is time to simply let the markets do what they want to do.....for the rest of the day.

It is the last day of the market summer today. After Labor day all the traders and Wall Street professionals will be back at work from their traditional August vacations. This should drastically reduce the low volume volatility that is common in August.

 

Here is the CRUX of the real estate market. Here in my area of Central Texas there are 4200 homes. Right now of that number there are.......ONLY 36......homes for sale.

The market seems active. When I look at the listings there are MANY pending homes. Even homes above $1MILLION appear to be selling nicely.

The BIG FACTORS....

Amazing schools.
A close in area to the city. (although when I first came here this area was considered way out of town)
Lower crime.
Large lots compared to what you get today.
Quality homes semi-custom.
Lots of amenities in the area.
etc, etc, etc.

 

We are on track right now for a HUGE win for the SP500 this week. If we can hang in there......about where we are right now till the close.....we are looking at the SP500 being.......+3.13%.....for ONE WEEK.

Only 20 minutes to go to lock the week in the history books. It will be a very pleasant way to go into a three day weekend. The markets will be closed on Monday for Labor Day. So.....we will have a short four day market week next week.

 

A MODERATE loss for me today.....even though i had five of eight stocks UP today. My oversize position in NVDA makes that single stocks results count as about two positions....so it dragged me down today.

At least I managed to close in the GREEN for the following.....AAPL, MSFT, AMZN, HON, and HD. i will take it to end the week and start the new month.

I also got beat by the SP500 today by 0.61%.

 

A REALLY GOOD week this week for all the averages.

DOW year to date +5.10%
DOW for the week +1.43%

SP500 year to date +17.61%
SP500 for the week +3.69%

NASDAQ 100 year to date +41.83%
NASDAQ 100 for the week +3.75%

NASDAQ year to date +34.06%
NASDAQ for the week +3.25%

RUSSELL year to date +9.06%
RUSSELL for the week +4.04%

A KILLER week for stocks and funds. Explosive gains as we head into Labor Day and the three day weekend. We also now head into the month of September with a strong wind to our sails as we plow toward year end.

As to my ENTIRE ACCOUNT for this week........+37.51% year to date. Last week at this time I was at.....+32.28% year to date. A GREAT 5.23% over last week on my year to date..

 

HAVE A NICE THREE DAY WEEKEND EVERYONE. WE MADE SOME MONEY THIS WEEK.

 

The week.....in review.

Dow closes more than 100 points higher to kick off September, notches best week since July

https://www.cnbc.com/2023/08/31/stock-market-today-live-updates.html

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

"The Dow Jones Industrial Average rose on Friday as traders weighed the latest U.S. jobs report to conclude a winning week.

The 30-stock Dow ticked up 115.80 points, or 0.33%, to close at 34,837.71 The S&P 500 added roughly 0.18% to finish the session at 4,515.77, and the Nasdaq Composite inched down 0.02%.

The major averages were up sharply earlier in the day. The Dow briefly traded more than 250 points higher, while the S&P 500 and Nasdaq climbed about 0.8% each before easing.

The Dow and the Nasdaq added 1.4% and about 3.3% for the week, their best performances since July. The S&P 500 gained 2.5% to register its best week since June.

Unemployment rate jumps

The latest U.S. nonfarm payrolls report showed the unemployment rate ticked higher to 3.8% in August, reaching its highest level in more than a year. Economists had expected it to remain at 3.5%.

In another sign of a slowing economy and easing pricing pressures, average hourly earnings increased 4.29% on a year-over-year basis, less than the 4.4% increase expected by economists polled by Dow Jones.

August payrolls grew at a faster-than-expected pace, with 187,000 being added. However, job numbers first reported for June and July were revised down by a combined 110,000.

“It would be a mistake to look at today’s employment report, along with recent data, and say the Fed is done,” said Steve Wyett, chief investment strategist at BOK Financial. “Even though trends in inflation are moving the right direction and a broader view of the employment market would indicate wage pressures should abate, overall economic growth is above trend and inflation remains well above the Fed’s recently confirmed 2% target.”

Following the release, the CME Group’s FedWatch tool showed traders have priced in a 93% chance of the central bank holding rates at current levels at its policy meeting later this month.

Investors also pored over fresh earnings reports. Database software maker MongoDB and Dell Technologies advanced 3.5% and 22%, respectively, on the back of stronger-than-expected earnings reports. Shares of athletic apparel retailer Lululemon Athletica
added 5% after crushing Wall Street’s estimates."

MY COMMENT

Earnings continue to blow away expectations. The economic data is promising for no more rate hikes by the FED. We had a GREAT week.....and....investors are making money. You have to LOVE a BULL MARKET.

Yet how many people are still siting on the sidelines waiting for the recession and the resumption of the bear market. You never hear much on this.....but....if we are in a typical young bull market....you can bet that a lot of people are missing out on the gains.

Although I use the term...."young bull market"......I have been calling this BULL MARKET since about last summer. The SP500 has been in UP mode since the start of July 2023. So.......I say....this BULL MARKET is now FOURTEEN MONTHS old. AND....it is still being DISRESPECTED.....so.....we might have another 12-24 months to go......minimum.

 

I have certainly seen this happening in my little area.

Million-dollar homes are the ‘middle class’ options for homebuyers in many cities

https://finance.yahoo.com/news/mill...-for-homebuyers-in-many-cities-120012460.html

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

"Homebuyers in some cities have no choice but to buy million-dollar homes as prices near all-time highs.

The share of million-dollar homes is rising across the nation. Redfin found that 8.2% of houses in the US are now worth seven figures, up from 7.3% in February and just shy of the peak of 8.6% recorded in June 2022. Of the 90 million homes studied, approximately 7.46 million units were over a cool million.

A separate report from LendingTree found that two California cities have larger shares of million-dollar homes than properties under that mark. The percentage of homes over $1 million was 66.28% in San Jose and 52.91% in San Francisco. Los Angeles followed at 26.48%, San Diego at 23.15%, and Seattle at 18.70%.

The reports underscore how in many markets, million-dollar homes are not necessarily luxurious; rather, they are the norm, leaving many homebuyers with few affordable options.

"There are a lot of areas, especially really expensive areas, at this point where million-dollar homes have not only become more common, they've also — for lack of a better term — become more middle class," Jacob Channel, report author and LendingTree's senior economist, told Yahoo Finance.


Limited supply for homes under a million in these cities

A quick search on Redfin shows the dire situation in some cities.

There are 1,230 homes for sale in San Diego, but just 529 units are listed at $1 million and under as of Wednesday this week.

Of these, only 114 properties have three or more bedrooms and only 63 units are single-family homes. This puts the share of homes at $1 million and under at 43%, and three-bedroom-plus single-family homes at 5.1% for homebuyers, according to active Redfin's listing as of Aug. 30, 2023.

"This really goes to show just how expensive a lot of housing markets can be and what kind of housing people can expect to encounter in those markets," Channel said. "[These homes] are not huge, only a few bedrooms, modest amenities."

The median home sales price in Santa Clara County — where San Jose and Silicon Valley are located — was $1.8 million in the second quarter, according to data provided by Compass. The monthly mortgage on a home at that price is close to $9,900, based on the average 30-year interest rate of 7.28% for a jumbo loan and a 20% down payment of $360,000.

More homes sold between $3 million and $4 million (391 units) than sold for less than $1 million (285 units) during a six-month period reported on July 15.

"Even if you earn say $100,000 or $150,000, that still might not be enough to buy the kind of a modest or appropriate house for you and your family," Channel said. "We've certainly seen this where even people who work in high-paying tech industries, finance, and so forth have found themselves pushed further and further away from city centers."

The median home price in San Francisco was $1.335 million even after prices dropped significantly during the recent housing recession. The monthly mortgage payment at this price is $7,307, with 20% down and a 30-year rate of 7.28%.

There were 897 units that sold for over $1 million during the six-month period reported on July 15, including 10 properties that went for more than $10 million.

How many sold for less than $1 million during the same period in San Francisco. Just 100 units.

These sales also create an unhealthy vicious cycle. The owners of these million-dollar homes, in turn, become homebuyers themselves, but armed with a boatload of cash to bid on their next property.

That’s showing up in the data, too.

The level of all-cash buying activity rose to a 9-year high, or 33.4%, in April 2023. Meaning of all the US homes purchased, one-third were purchased by all-cash buyers this spring. The level of all-cash activity has been steadily increasing since April 2020, as sellers cash out on their equity and borrowing gets expensive.

"More people are buying homes all cash than they have in recent years," Patrick Carlisle, chief market analyst for the San Francisco Bay Area at Compass, said. "Well of course, that doesn't help normal people because normal people can't afford to buy something all cash. We have a very weird situation going on right now."

This is a problem for cities like San Francisco because essential government workers are struggling to afford living in the communities where they serve.

"The fact that normal people — school teachers and firemen and policemen and the people who work in stores — can't afford to live in the county in which they work, that's not good and it's not a healthy social situation," Carlisle said. "It's very troubling.”"

MY COMMENT

I am seeing this in my little area of 4200 homes and in other areas of Austin.

In my area probably at least half or more of the homes are now worth at least $1Million. BUT....I would not call this area middle class since we are one of the highest income areas in Austin or the Austin region.

When we first moved here 12 years ago this area was solidly middle class with homes easily available to buyers in the $250,000 to $350,000 range.....at the lower end of the market. Now it is rare to see a home priced under $650,000.

We are also seeing a huge wave of all cash buyers here. When I talk to realtors it is clear that over half of all sales are for all cash.

 

I mentioned the other day that I believe that the Ten Year Yield has peaked and will soon move back into the 3% range.

Bond Traders Eye Pivot Point for Rates After Cracks in Jobs Data

https://finance.yahoo.com/news/bond-yields-slide-labor-data-130114227.html

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

"(Bloomberg) -- Bond investors are evaluating whether short-dated Treasury yields have seen their peak, as signs the US job market is cooling spur wagers that the Federal Reserve is done raising interest rates.

Yields on benchmark two-year Treasuries are on pace for their biggest weekly decline since March, dropping more than 20 basis points, according to a Bloomberg index. And interest-rate swaps now show a less than 50% chance of another rate hike this year.

While those moves pared after a key manufacturing gauge showed the continuing resilience of the US economy, the earlier Labor Department report has traders questioning how long that buoyancy can last. The unemployment rate jumped to 3.8%, a level last seen in February 2022 just before the Fed started raising rates.

“This is the report the market was looking for,” said Jeffrey Rosenberg, a portfolio manager of the Systematic Multi-Strategy Fund at BlackRock Inc., on Bloomberg TV. “This is the reaction of pricing out the last hike the Fed suggested they may have to deliver. The labor markets are normalizing. That is the main message from today’s payrolls report.”

Rosenberg added that two-year Treasuries are a “screaming buy” as they have both high yields as well as the potential for benefiting from a Fed policy pivot. Longer-term bonds are less attractive because of uncertainties around inflation and risk premium, he added.

Shorter-term debt, which is more sensitive to the Fed’s policy, outperformed, resulting in a steeper yield curve. Yields on two-year notes declined as much as 11 basis points to 4.75%. Those on 30-year bonds climbed as much as 9 basis points to 4.30%, briefly rising above five-year yields for the first time in weeks.

Nonfarm payrolls rose by 187,000 after the prior two months were revised lower, while wage growth slowed. It is the third report this week showing signs of a softening job market, following weaker-than-expected job openings data and the employment figure from the ADP Research Institute.

This week’s rally eased some of the pain for bond investors after a month when they’ve seen a relentless selloff that sent the 10-year yields up to 4.36%, the highest since 2007.

The Treasury market could be more volatile than usual in Friday’s session as traders may head for an early exit ahead of the US Labor Day holiday, according to JPMorgan Chase & Co. Historically, the Treasury market is approximately 20%-50% more volatile for a similar data surprise, in the two hours following payrolls releases on early-close sessions, according to the bank.

Investors are also preparing for a potential deluge of corporate bond sales next week, which is typically the case following the Labor Day holiday that marks the unofficial end of summer."

MY COMMENT

If I was going to lock in some CD's or some Treasuries I would probably act some time between now and the end of the year. I believe rates are about as high right now as they are going to get.

 

LOL.....as I was skimming headlines this morning I saw at least five that in some way were HYPING the......"September is the worst month for stocks".....theme. It begins.

 

Agree......I like those types of charts. An easy to see snapshot.

 

Here is the.......short.....week that starts on Tuesday after the holiday on Monday.

Fed in focus as earnings, economic calendars slow: What to know this week

https://finance.yahoo.com/news/fed-...rs-slow-what-to-know-this-week-115548083.html

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

"After investors faced an onslaught of economic data to wrap up August, a lighter calendar and holiday-shortened week awaits investors as the Federal Reserve's next interest rate decision quickly approaches.

US markets will be closed on Monday in observation of Labor Day, with updates on the services sector, the Federal Reserve's latest Beige Book report, and a smattering of corporate earnings serving as highlights in the week ahead.

Stocks closed out the last week of August in rally mode after falling for much of the month.

The Nasdaq Composite (^IXIC) led gains, rising more than 3% last week while the S&P 500 (^GSPC) gained 2.5%. The Dow Jones Industrial Average (^DJI) lagged its peers, rising 1.4%.

On the economic calendar this week, Wednesday will present investors with the busiest schedule as service sector readings from S&P Global and the Institute for Supply Management are due out in the morning while the Fed's Beige Book will come out that afternoon.

On the corporate side, Kroger (KR), GameStop (GME), and Zscaler (ZS) highlight a subdued week of quarterly reports.

Last week, the crucial August jobs report offered the latest evidence the US labor market continues to slow, with the US economy creating 187,000 new jobs last month while the unemployment rate unexpectedly rose to 3.8% as more Americans sought employment.


This data capped a week that also featured a sharp drop in job openings and a downward revision to second quarter GDP growth estimates. And investors view this data run as a sign the Fed will elect not to raise rates at the conclusion of its September 19-20 policy meeting.

Data from the CME Group showed markets on Friday were pricing in a 94% chance the Fed keeps rates unchanged later this month, up from 80% the prior week. Bets on another rate hike in November also dropped as of Friday, to 34% from 47% the week prior.

"The loosening up of labor market slack in [Friday's] report, combined with the friendly JOLTS report from earlier [last] week, should cement the case for a Fed on hold later this month," JPMorgan economist Michael Feroli wrote in a note to clients on Friday.

"The more interesting question will be whether the median dot continues to project one more hike this year. Either way, Fed leadership must be happy with a week that marked up odds for achieving a soft landing."

Ryan Sweet, chief US economist at Oxford Economics, wrote in a note on Friday it was a "good week for those in the soft-landing camp."

"The August employment report gives the Fed plenty of room to leave policy steady through this year and into next," Sweet wrote.

"The trend in job growth continued to slow, the unemployment rate rose, labor force participation increased, and earnings growth decelerated, all signs that a better balance between the supply and demand for labor continues to evolve. The rebalancing of labor supply and demand is going more smoothly than we initially anticipated, keeping the prospect of a soft landing alive."

And though developments in the economy may be favorable for the Fed — and by extension, investors — those looking at the seasonal forces in play for the stock market may find fewer positives in the coming week.

After a choppy August, stocks are now entering a historically bad month. Dating back to 1945, September has historically been the year's worst month for the S&P 500 with the index falling, on average, 0.7% during September and logging gains less than half the time.

Though as Yahoo Finance's Jared Blikre highlighted last week, the rally to start 2023 might put history on the side of investors. When the S&P 500 is up more than 10% entering August, as was the case in 2023, the benchmark index typically falls 3.2% in August. This year, the index fell 1.7% in August.

But during these years, the S&P 500, on average, rises 2.3% in September and gains more than 9% from September through year-end.

"We believe consensus caution of September will prove to be unwarranted," Fundstrat's Tom Lee wrote in a note on Friday. "In fact, we believe September probabilities favor a gain of 2% to 3%, supported by a downward shift in consensus views around inflation and inflation risks.""


"Weekly Calendar

Monday
Markets closed for Labor Day.

Tuesday
Economic data: Factory orders, July (-2.5% expected, +2.3% previously); Durable goods orders, July (-5.2% previously)

Earnings: Zscaler (ZS), GitLab (GTLB)

Wednesday
Economic data: MBA mortgage applications (+2.3% previously); S&P Global US services PMI, August final (51 previously); S&P Global US composite PMI, August final (50.4 previously); ISM Services PMI, August (52.5 expected, 52.7 previously); Federal Reserve Beige Book

Earnings: American Eagle Outfitters (AEO), ChargePoint (CHPT), C3.ai (AI), Dave & Buster's Entertainment (PLAY), Express (EXPR), GameStop (GME)

Thursday
Economic data: Initial jobless claims (235,000 expected, 228,000 previously)

Earnings: DocuSign (DOCU), RH (RH), Zumiez (ZUMZ)

Friday
Economic data: Wholesale inventories, month-over-month July (-0.1% previously)

Earnings: Kroger (KR), Rent the Runway (RENT)"

MY COMMENT

A smattering of earnings this coming week and some secondary economic reports. That is it for the markets.....otherwise.....a typical MILD normal week for the markets.

I dont put any store in the September superstition.....even if statistics back it up. EVERY year is different and every year the market is subject to different forces. This year after a very mild August loss and considering the potential for the young bull market to escalate with explosive gains that seem to come out of nowhere.....we probably have a good shot at a positive month in September.

The FED will meet about mid month....September 19.....and I expect they will do NOTHING. In fact....I hope they have the common sense to simply do nothing for the rest of the year. It would be a big mistake to do additional rate hikes at this time. They need to avoid the temptation to....."do something, anything".....and sit and wait for the next four months to evaluate the impact of the prior hikes. There is little chance of any harm from waiting.......and....much more chance of harm to the economy by doing another hike. They need to....BE SMART and CAUTIOUS. BUT.....after all.....it is the FED.....a bunch of ego maniac economists....so who knows.

September will mark the end of the third quarter and than we can start earnings over again in October and November as the markets push to year end. I know many........if not everyone on here...... have a very good year going so far this year. I suspect we will all be very happy with how we end up the year on December 31. Year 2022.....will be a distant memory.

 

I see the headlines all the time......."THE SEVEN THINGS INVESTORS SHOULD BE THINKING ABOUT RIGHT NOW".......THREE CRITICAL MARKET STEPS TO TAKE NOW"......."HOW TO PLAY THE MARKETS THIS MONTH"......etc, etc, etc.

SO.....here is my similar advice......."THE SINGLE MOST IMPORTANT STEP FOR INVESTORS TO TAKE RIGHT NOW".

Step back and do NOTHING. With a bull market and good odds of significant gains this year and over the next four months the worst thing anyone can do is to get caught up in the excitement of actively trading their account. Watch out for OVERCONFIDENCE brought on by big gains so far this year. TRUST your portfolio and the reason you bought all those stocks and funds to begin with. Be rational and realistic and exercise common sense in the form of doing NOTHING. Be confident in your investing plan and goals and dont get caught up in chasing the gains that others are posting. Let the UP direction of the markets do the heavy lifting.....no need for you to do anything.

Although I will say......for some......now that we are FINALLY done with the pandemic and economic shut-down distortions....it might be time to evaluate your portfolio. If you were LURED into certain companies by the conditions of the pandemic economy it might be time to take a look at what you own.......since we will be in a much more NORMAL market environment and market going forward.