And to continue.....keeping in mind that the "correction"......just happened. It was just in the past week or so that the major averages hit the 10% drop level that defines a correction. When Does Correction End? https://allstarcharts.com/when-does-correction-end/ (BOLD is my opinion OR what i consider important content) "We’re over 3 and half months into a stock market correction that I keep being told is just the beginning of a major crash. I’m just not seeing it. This continues to look like a regular seasonal correction that we’ve seen so many times around this time of the year. In other words, if the market was NOT correcting like it has been, that would actually be very unusual. Here’s what each of the sectors and major indexes have done since the new 52-week highs list peaked in July: A few things that stand out: Energy was the only sector in the green during this period, rallying over 4% despite most stocks correcting. Also, the Dow Jones Industrial Average is down ONLY 4.5% during this period. That’s impressive. Communications had been one of the best performing sectors in the market every single quarter this year. And now throughout this correction, Communications has held in there really well again – one of the best performers of all the sectors. And finally Healthcare. This sector has been forgotten about. I would encourage all investors to zoom out. Large-cap Healthcare is in a long-term secular uptrend. Just because it’s gone sideways for 2 years doesn’t change that. The most valuable time to focus on relative strength is during corrections. That’s what we’re doing here. The leaders showing relative strength during market corrections tend to often be the leaders in the ensuing uptrend. What’s the catalyst? I still think for stocks to get going into a year-end rally, they’re going to need to see a weaker Dollar. The NYSE new lows list peaked on October 3rd. That was the same day that the US Dollar Index put in its high. That’s not a coincidence. I think the biggest catalyst for stocks to get going is a break in the US Dollar Index below 105 – 105.50. For me, that’s it. The US 10-year yield made new highs in the back half of October. The US Dollar Index did NOT. That divergence needs to be front and center if you have any exposure at all to stocks." MY COMMENT It is a good sign that numerous articles are starting to show up in the media about all the recent SILLINESS. Things got carried away and now we are starting to see a back-lash. All the people pushing this fear and doom should be EMBARRASSED.
As I said a few days ago: UAW reaches deal with GM, ending coordinated strike against Detroit automakers https://finance.yahoo.com/news/gm-reaches-tentative-deal-uaw-131907642.html Actual impact of the strike on the markets.....ZERO.
The open today.........38 minutes ago. Stocks bounce as S&P 500 tries to climb out of correction territory https://www.cnbc.com/2023/10/29/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "U.S. stocks rose Monday as traders braced for a big week filled with a Federal Reserve rate decision, jobs report and Apple’s earnings report. The Dow Jones Industrial Average gained 325 points, or 1%. The S&P 500 advanced 1.1% along, while the Nasdaq Composite jumped 1.5%. The rally was broad-based with all 11 S&P 500 sectors trading higher. Communications services, consumer discretionary and information technology stocks outperformed. Mega-cap tech stocks rose, with shares of Amazonand Meta Platforms up by more than 3%, each. SoFi Technologies shares popped more than 3% after the financial services company posted a strong third-quarter revenue beat and raised its full-year outlook. The moves come after the S&P 500 fell into correction territory last week. The broader index shed 2.5% for the week to put it down by more than 10% from its 2023 closing high. It’s off 3.2% for October, on pace for its third-straight negative month which would be its first such streak since 2020 as the pandemic struck. “We expect an oversold bounce inspired by a less-hawkish Fed and a market that has adjusted to Treasury’s increasing liquidity needs,” Christopher Harvey, head of equity strategy at Wells Fargo Securities, wrote on Monday. The Federal Reserve decision looms Wednesday, when the central bank is widely expected to hold its benchmark interest rate at the same level. With surging interest rates as the main culprit of this stock market correction, investors will be hoping the Fed signals it could be done raising rates. Traders expect the Fed to be done raising rates at least for 2023. The 10-year Treasury yield jumped above 5% to start last week, but it traded around 4.9% on Monday. Friday will bring the October jobs report with investors hoping for some slowing in the labor market that will allow the Fed to feel comfortable with staying on hold the rest of the year. Apple will report earnings Thursday after the bell. The S&P 500′s largest member is in a correction itself, down 15% from its 52-week high." MY COMMENT YEP......yet another normal day in the stock market neighborhood. We need a stock market.....Mr Rogers.....to come out in his sweater and in a quiet and soothing voice tell everyone that.....it is all ok.....you are all going to be just fine. The danger is overreaction.....as usual. Stay the course....stay calm......and win.
I could not agree more. The Wolf of Wall Street: Why the S&P 500 Index is still the ticket to riches https://finance.yahoo.com/news/the-...-is-still-the-ticket-to-riches-173042506.html (BOLD is my opinion OR what I consider important content) "Jordan Belfort, the author of the new book “The Wolf of Investing,” has some salty things to say about Wall Street. For starters, he described it as a “giant, bloodsucking monster … the Wall Street fee machine complex atop the entire global financial system — extracting excess fees and commissions and creating general financial mayhem.” Average investors, he added, lose all the time because they are baited by the latest stock tip they hear from a friend or read about on TikTok. There’s more: “Depending on who’s been advising you, there’s an excellent chance that a significant portion of your annual returns are being unnecessarily cannibalized by fees, commissions, and pumped-up annual performance bonuses,” he told me. You may already be familiar with Belfort. His best-selling autobiography, “The Wolf of Wall Street,” is the basis for the 2013 Oscar-winning film of the same name starring Leonardo DiCaprio. Belfort, a former broker, made loads of dough by peddling shady sales of penny stocks — and turned around and blew it away on drugs, sex, and other debauchery. Belfort served 22 months in jail for securities fraud relating to his activities in the 1980s and '90s with his brokerage firm Stratton Oakmont. This time out of the gate, Belfort’s take on Wall Street is far less titillating and decidedly more conventional, but “you can thank me when you’re ready to retire, and you have a giant nest egg waiting for you,” he wrote. Recently, Belfort discussed with Yahoo Finance his simple investing advice like sticking to an S&P 500 index fund, which so far this year is up 7.75% and has gained about 10.7% on average annually since it was introduced in 1957. Sure it sounds boring, but there are some hot tech stocks along with proven stalwarts in the S&P 500 Index, which includes Microsoft, Amazon, Alphabet, Tesla, Meta, and Berkshire Hathaway. Edited excerpts: Oh boy, Jordan, let’s jump right into it. Rage against the machine aside, what’s the overall thesis of your book? It’s about long-term investing. Picking individual stocks or bonds and trying to beat the market, so to speak, has historically proven to be extremely difficult. People have trouble wrapping their heads around how even a small amount of money over time through long-term compounding, reinvesting dividends, and making small contributions along the way to your portfolio can amount to a truly massive amount of money. You don't need to make massive returns every single year to have a very, very rich portfolio when you retire. What makes you crazy about the way Wall Street works, or doesn’t, for the average investor? It is this two-headed monster. It's got the useful part where they create massive value and they serve a vital mission function to the US economy. Then they have the not-so-good part. You’re a huge fan of the S&P 500 Index, quite a leap from your broker days. What’s the magic there? Here’s why I love it. The S&P index of 500 stocks is this perfect mouse trap capturing the value of the US economy and also the global economy because a great portion of these companies do 34% of their business overseas. You're getting global exposure to the creation of wealth with the best managers. Vanguard created this amazing vehicle for the average person anywhere in the world to get all the best out of the value that Wall Street creates and not get sucked into the disastrous allure of short-term trading in the next shiny object. The fact is that human beings, including me, are lousy stock pickers by nature. We sell when we should be buying and buy when we should be selling. The way to protect against this sort of human nature of doing the wrong thing and selling into fear is through indexing. The S&P 500 Index has been a great investment historically. Over 20 years, it always makes money and it balances out to an annual return of 10.5% give or take a percentage. As you get older, you want to start shifting more into more index bond funds in your portfolio percentage-wise because you want to have less exposure to risk. How would you advise someone who is stashing away funds for retirement? Generally speaking, if I were in my thirties or forties, I would have 80% of my money in the S&P 500 Index and maybe 20% in a total bond market index. As you get older, you could start bringing that down to 70/30 and ultimately to 60/40. Of course, there are other things like your general risk tolerance to consider. But I really love index funds because they take away the guesswork. They protect you from your own worst impulses, which is to trade for the short term and try to pick stocks that are winners. And that’s just really, really hard to do. Automatically check the box to reinvest your dividends and keep putting money into your funds every month or every quarter as you can, whatever the amount is, whether it's $25, $50 a month, $100, $500, $1,000, whatever you could afford to do, just keep putting more money into the funds along the way at regular intervals. Don’t even consider the prices you are paying. And ignore if the market is up, down, or sideways. Jordan, admit it, it’s fun to invest in individual company stocks... It's great to take a small percentage of your capital and set it aside for healthy speculation, if you like that stuff, right? It's fun, and it's empowering, and it's great to do that. I just think that you have to set aside a certain amount of capital for that, stick to it, and be ready to lose it. What’s the investing trap for people? They think if they only have a small amount to invest that they are never going to get rich. 'I need to go buy a penny stock where I can hopefully go up a thousand percent and I could make a big hit.' That's the trap. They try to time buying a growth stock. 'I want to buy the next Apple because that's the only way I'm gonna get rich,' they say. 'I'm not gonna get rich buying the S&P 500.' The answer is it does work out through long-term compounding. But you have to wait until this late stage threshold, which starts at 23, 24 years, and then suddenly you are like, whoa, this stuff actually works. It's math. A parting thought? The Wall Street fee machine con is out there, and it's very obvious once you recognize what's going on with these advertisements and propaganda that basically leads people to make decisions that go against their best self-interest. It's this wild sort of circus that's convincing people to stay in this game, this casino, which is really tilted heavily against you. The odds are stacked against you on so many levels. By the way, if any one of Wall Street's newfangled ideas hits, guess what? It becomes part of the S&P 500, and you'll make money." MY COMMENT The above is a good summary of the entire thesis of this thread. AND....it works. The only thing is......you have to be able to actually do it. People like to talk about doing this sort of long term investing.....but their actual behavior....is often at variance. IGNORE all the voices trying to create doubt in your head.......they are wrong.
YES......the economy is actually strong. As the market enters correction territory, don’t blame the American consumer https://www.cnbc.com/2023/10/29/don...the-market-entering-correction-territory.html (BOLD is my opinion OR what I consider important content) "Key Points The S&P 500 is in correction territory and the Nasdaq already entered one, but many consumer earnings data points show a mostly bullish picture. Home sales are being helped by mortgage buydowns, fliers are still shelling out for premium seats, and Amazon is hiring 250,000 seasonal holiday workers. “Where am I seeing softness in [consumer] credit?” said JPMorgan chief financial officer Jeremy Barnum, repeating an analyst’s question on the bank’s earnings call. “I think the answer to that is actually nowhere.” The initial third-quarter report on gross domestic product showed consumer spending zooming higher by 4% percent a year, after inflation, the best in almost two years. September’s retail sales report showed spending climbing almost twice as fast as the average for the last year. And yet, bears like hedge-fund trader Bill Ackman argue that a recession is coming as soon as this quarter and the market has entered correction territory. For an economy that rises or falls on the state of the consumer, third-quarter earnings data supports a view of spending that remains mostly good. S&P 500 consumer-discretionary companies that have reported through Oct. 25 saw an average profit gain of 15%, according to CFRA — the biggest revenue gain of the stock market’s 11 sectors. “People are kind of scratching their heads and saying, ‘The consumer is holding up better than expected,’” said CFRA Research strategist Sam Stovall said. “Consumers are employed. They continue to buy goods as well as pursue experiences. And they don’t seem worried about debt levels.” How is this possible with interest rates on everything from credit cards to cars and homes soaring? It’s the anecdotes from bellwether companies across key industries that tell the real story: Delta Air Lines and United Airlines sharing how their most expensive seats are selling fastest. Homeowners using high-interest-rate-fighting mortgage buydowns. Amazon saying it’s hiring 250,000 seasonal workers. A Thursday report from Deckers Outdoor blew some minds — in what has been a tepid clothing sales environment — by disclosing that embedded in a 79% profit gain that sent shares up 19% was sales of Uggs, a mature line anchored by fuzzy boots, rising 28%. The picture they paint largely matches the economic data — generally positive, but with some warts. Here is some of the key evidence from from the biggest company earnings reports across the market that help explain how companies and the American consumer are making the best of a tough rate environment. How homebuilders are solving for mortgages rates No industry is more central to the market’s notion that the consumer is falling from the sky than housing, because the number of existing home sales have dropped almost 40% from Covid-era peaks. But while Coldwell Banker owner Anywhere Real Estate saw profit fall by half, news from builders of new homes has been pretty good. Most consumers have mortgages below 5%, but for new homebuyers, one reason that rates are not biting quite as sharply as they should is that builders have figured out ways around the 8% interest rates that are bedeviling existing home sellers. That helps explains why new home sales are up this year. Homebuilders are dipping into money that previously paid for other incentives to pay for offering mortgages at 5.75% rather than the 8% level other mortgages have hit. At PulteGroup, the nation’s third-biggest builder, that helped drive an 8% third-quarter profit jump and 43% climb in new home orders for delivery later, much better than the government-reported 4.5% gain in new home sales year-to-date. “What we’ve done is simply redistribute incentives we’ve historically offered toward cabinets and countertops, and redirected those to interest rate incentives,” PulteGroup CEO Ryan Marshall said. “And that has been the most powerful thing.″ The mechanics are complex, but work out to this: Pulte sets aside about $35,000 for incentives to get each home to sell, or about 6% of its price, the company said on its earnings conference call. Part of that is paying for a mortgage buydown. About 80% to 85% of buyers are taking advantage of the buydown offer. But many are splitting the funds, mixing a smaller rate buydown and keeping some goodies for the house, the company said. Wells Fargo economist Jackie Benson said in a report that builders may struggle to keep this strategy going if mortgage rates stay near 8%, but new-home prices have dropped 12% in the last year. In her view, incentives plus bigger price cuts than most existing homes’ owners will offer is giving builders an edge. At auto companies, price cuts are in, and more are coming Car sales picked up notably in September, rising 24% year-over-year, more than twice the year-to-date gain in unit sales. But they were below expectations at electric-vehicle leader Tesla, which blamed high interest rates, and at Ford. “I just can’t emphasize this enough, that for the vast majority of people buying a car it’s about the monthly payment,” Tesla CEO Elon Musk said on its earnings call. “And as interest rates rise, the proportion of that monthly payment that is interest increases.” Maybe, but that’s not what’s happening at General Motors, even if investor reaction to good numbers at GM was muted because of the strike by the United Auto Workers union. GM beat earnings expectations by 40 cents a share, but shares fell 3% because of investor worries about the strike, which forced GM to withdraw its fourth-quarter earnings forecast on Oct. 24. Ford, which settled with the UAW on Oct. 25, said the next day it had a “mixed” quarter, as profit missed Wall Street targets due to the strike. Consumers came through, as unit sales rose 7.7% for the quarter, with truck and EV sales both up 15%. GM CEO Mary Barra said on GM’s analyst call that the company gained market share, posting a 21% gain in unit sales despite offering incentives below the industry average. “While we hear reports out there in the macro that consumer sentiment might be weakening, etc., we haven’t seen that in demand for our vehicles,” GM CFO Paul Jacobson told analysts. But Ford CFO John Lawler said car prices need to decline by about $1,800 to be as affordable as they were before Covid. “We think it’s going to happen over 12 to 18 months,” he said. Tesla’s turnaround plan turns on continuing to lower its cost of producing cars, which came down by about $2,000 per vehicle in last year, the company said. Along with federal tax credits for electric vehicles, a Model Y crossover can be had for about $36,490, or as little as $31,500 in states with local tax incentives for EVs. That’s way below the average for all cars, which Cox Automotive puts at more than $50,000. But Musk says some consumers still aren’t convincible. . “When you look at the price reductions we’ve made in, say, the Model Y, and you compare that to how much people’s monthly payment has risen due to interest rates, the price of the Model Y is almost unchanged,” Musk said. “They can’t afford it.” Most banks say the consumer still has cash, but not Discover To know how consumers are doing, ask the banks, which disclose consumer balances quarterly. To know if they’re confident, ask the credit card companies (often the same companies) how much they are spending. In most cases, financial services firms say consumers are doing well. At Bank of America, consumer balances are still about one-third higher than before Covid, CEO Brian Moynihan said on the company’s conference call. At JPMorgan Chase, balances have eroded 3% in the last year, but consumer loan delinquencies declined during the quarter, the company said. “Where am I seeing softness in [consumer] credit?” said chief financial officer Jeremy Barnum, repeating an analyst’s question on the earnings call. “I think the answer to that is actually nowhere.” Among credit card companies, the “resilient” is still the main story. MasterCard, in fact, used that word or “resilience” eight times to describe U.S. consumers in its Oct. 26 call. “I mean, the reality is, unemployment levels are [near] all-time record lows,” MasterCard chief financial officer Sachin Mehra said. At American Express, which saw U.S. consumer spending rise 9%, the mild surprise was the company’s disclosure that young consumers are adding Amex cards faster than any other group. Millennials and Gen Zers saw their U.S. spending via Amex rise 18%, the company said. “Guess they’re not bothered by the resumption of student loan payments,” Stovall said. The major fly in the ointment came from Discover Financial Services, one of the few banks to make big additions to its loan loss reserves for consumer debt, driving a 33% drop in profit as Discover’s loan chargeoffs doubled. Despite the fact that U.S. household debt burdens are almost exactly the same as in late 2019, and declined during the quarter, according to government data, Discover chief financial officer John Greene said on its call, “Our macro assumptions reflect a relatively strong labor market but also consumer headwinds from a declining savings rate and increasing debt burdens.” At airlines, still no sign of a travel recession It’s good to be Delta Air Lines right now, sitting on a 59% third-quarter profit gain driven by the most expensive products on their virtual shelves: First-class seats and international vacations. Also good to be United, where higher-margin international travel rose almost 25% and the company is planning to add seven first-class seats per departure by 2027. Not so good to be discounter Spirit, which saw shares fall after reporting a $157 million loss. “With the market continuing to seemingly will a travel recession into existence despite evidence to the contrary from daily [government] data and our consumer surveys, Delta’s third-quarter beat and solid fourth-quarter guide and commentary should finally put the group at ease about a consumer “cliff,” allow them to unfasten their seatbelts and walk about the cabin,” Morgan Stanley analyst Ravi Shanker said in a note to clients. One tangible impact: United is adding 20 planes this quarter, though it is pushing 12 more deliveries into 2024, while Spirit said it’s delaying plane deliveries, and focusing on its proposed merger with JetBlue and cost-cutting to regain competitiveness as soft demand for its product persists into the holiday season. As has been the case throughout much of 2023, richer consumers — who contribute the greater share of spending — are doing better than moderate-income families, Sundaram said. The goods recession is for real Whirlpool, Ethan Allen and mattress maker Sleep Number all saw their stocks tumble after reporting bad earnings, all of them experiencing sales struggles consistent with the macro data. This follows a trend now well-entrenched in the economy: people stocked up on hard goods, especially for the house, during the pandemic, when they were stuck at home more. All three companies saw shares surge during Covid, and growth has slacked off since as they found their markets at least partly saturated and consumers moved spending to travel and other services. “All of the stimulus money went to the furniture industry,” Sundaram said, exaggerating for effect. “Now they’ve been falling apart for the last year.” Ethan Allen sales dropped 24%, as the company said a flood in a Vermont factory and softer demand were among the causes. At Whirlpool, which said in second-quarter earnings that it was moving to make up slowing sales to consumers by selling more appliances to home builders, “discretionary purchases have been even softer than anticipated, as a result of increased mortgage rates and low consumer confidence,” CEO Marc Bitzer said during Thursday’s earnings call. Its shares fell more than 20%. Amazon’s $1.3 billion holiday hiring spree Amazon is making its biggest-ever commitment to holiday hiring, spending $1.3 billion to add the workers, mostly in fulfillment centers. That’s possible because Amazon has reorganized its warehouse network to speed up deliveries and lower costs, sparking 11% sales gains the last two quarters as consumers turn to the online giant for more everyday repeat purchases. Amazon also tends to serve a more affluent consumer who is proving more resilient in the face of interest rate hikes and inflation than audiences for Target or dollar stores, according to CFRA retailing analyst Arun Sundaram said. “Their retail sales are performing really well,” Sundaram said. “There’s still headwinds affecting discretionary sales, but everyday essentials are doing really well. All of this sets the stage for a high-stakes holiday season. PNC still thinks there will be a recession in early 2024, thanks partly to the Federal Reserve’ rate hikes, and thinks investors will focus on sales of goods looking for more signs of weakness. “There’s a lot of strength for the late innings” of an expansion, said PNC Asset Management chief investment officer Amanda Agati. Sundaram, whose firm has predicted that interest rates will soon drop as inflation wanes, thinks retailers are in better shape, with stronger supply chains that will allow strategic discounting more than last year to pump sales. The Uggs sales outperformance was attributed to improved supply chains and shorter shipping times as the lingering effects of the pandemic recede. “Though there are headwinds for the consumer, there’s a chance for a decent holiday season,” he said, albeit one hampered still by the inflation of the last two years. “The 2022 holiday season may have been the low point.″ " MY COMMENT It is shockingly amazing when you see an article give a good laundry list of all the positive things that are happening in the economy eight now. Add to this the big macro events that are happening....the end of the auto strike, the end of the FED hikes, and most importantly......the BIG earnings beats that are happening right now.
To continue the above....with what should be the PRIMARY focus of all investors....EARNINGS. S&P 500 Earnings in Good Shape as Yield Jumps to 5.80% https://www.investing.com/analysis/sp-500-earnings-in-good-shape-as-yield-jumps-to-580-200643133 (BOLD is my opinion OR what I consider important content) "Changing up the presentation a little, here is a page from this week’s (10/27/23) Refinitiv “This Week in Earnings” report which details exactly what is going on with earnings at present: 1.) The first table at the top shows that with half the S&P 500 having reported, the current “upside surprise” rate for the S&P 500 is 7.9% – very healthy; 2.) The middle table shows the progression in expected Q3 ’23 S&P 500 EPS: the expected S&P 500 EPS growth rate has jumped from +1.6% expected on October 1 to +4.3% now expected as of 10/27/23. This upward revision to 3rd quarter growth is well within the normal 2% – 5% improvement typically seen every quarter, but it’s important given how stocks are trading. 3.) The changes to Q4 ’23 (third table) show a 2.5% decline in the expected Q4 ’23 growth rate for S&P 500 EPS (+11% to +8.5% as of 10/27), yet not out of the ordinary given historical patterns. Here’s what jumps out in the data that readers might find interesting: Financial sector expected EPS growth has now doubled for Q3 ’23, from 11.9% on October 1 to 20.3% (middle table) as of 10/27/23, and yet the stocks are getting hammered despite the EPS growth. What are the financial sector stocks “predicting”? Is there pain coming in credit, or has the market mispriced the sector? Health Care is having a tough Q3 ’23 reporting season: expected EPS growth of -9.7% on 10/1/23, is now -17% as of 10/27/23. Health Care has not been a traditional safe haven for a tough market in 2023; There are 4 sectors where “expected” EPS growth has improved for Q4 ’24 in the last 4 weeks (bottom table): Energy: just barely from -20.6% as of 10/1 to -18.4% as of 10/27/23; Technology: from 14.7% on 10/1, to 15.4% as of 10/27/23; Comm Services: from 49.5% on 10/1. to 50.3% as of 10/27/23; Ute’s: from 55.4% on 10/1 to 56.2% on 10/27/23; Readers may think these are minor upward revisions, but you have to remember, the normal revision pattern is lower for the coming quarter, thus the fact there is upward or positive revisions to expected Q4 ’23 growth rates is actually pretty telling. S&P 500 Data: The S&P 500 forward 4-quarter estimate slipped to $238.46 from last week’s $238.95, despite a good week of tech sector earnings; The PE ratio fell to 17.3x this week from last week’s 17.7x and 9/30/23’s 18.4x; The S&P 500 earnings yield jumped this week to 5.79%, versus last week’s 5.66%. 5.79% is the highest EY since 1/20/23’s 5.80%; The Q3 ’23 bottom-up S&P 500 EPS estimate rose to $56.75 from 9/30/23’s $55.92; The S&P 500 EPS beat rate is 7.9% in Q3 ’23 (mentioned above) but the revenue beat rate is 1% too, it’s been trending down now for 9 quarters. Conclusion: The earnings data remains in good shape, or at the very least, there is still not the red flags that you would see if there were trouble ahead, like the forward four-quarter estimate starting to decelerate sharply. Looking at Alphabet’s (NASDAQ:GOOGL) EPS and revenue revisions, forward EPS estimates were raised slightly while forward revenue estimates were revised slightly lower, and more importantly, forward growth rates for 2023 – 2025 EPS and revenue didn’t change much at all. The stock price reaction was sure remarkable for the search giant, well in excess of the estimated changes. Frankly, Q3 ’23 earnings look fine so far. The only metric that gave me pause reading it was the Q3 ’23 revenue “beat rate” of 1%, which is the lowest of the last 9 quarters. Part of this is post-Covid though. However, it could speak to an economy on the cusp of slower growth." MY COMMENT EARNINGS are doing just fine. I did hear the other day somewhere that the "experts" were lowering their estimates for the 4th quarter earnings. SHOCKING. I love to hear this.....it is going to give us a great "probability" of another round of good earnings beats when 4th quarter reporting starts after the first of the year.
Looks like we are backing off some from the big open. That is to be expected. Every day in the short term markets is....hand to hand combat. This is not something that I wish to participate in.....so I sit and watch all the fun as a fully invested all the time.....LONG TERM INVESTOR.
A "perfect" day for me at this moment....every stock in the green and I am nearly double the SP500 at this moment. BUT....beware the late day FADE.
LOL....I have to admit....I did not watch this content and have no idea what is behind the headline. I am posting this because I like the headline. Stock prices have become divorced from the fundamentals of their companies, says Jim Cramer https://www.cnbc.com/video/2023/10/...-says-jim-cramer.html?&recirc=taboolainternal MY COMMENT This is what happens sometimes over the short term. This is classic and unfortunately something that just happens once in a while. Sometimes it can last for months. But....consider.....you are buying a business.....what is the most important thing for you to look at in making that purchase.....the fundamental results and finances of the business. Fundamentals are the end all.....be all...of any company. They tell the future of that company. They tell you the good and the bad....of that company. So.....I simply dont care about anything else. All the short term news drama....irrelevant.....at least to me. Now if I was a big investment bank with a HUGE AI TRADING PLATFORM that was trading millions of micro second shares......and is basically a news headline and content...trading system.....I would probably tend to not care much about the longer term business fundamentals.
A nice, big fat, gain for me today. A perfect day with all eight stocks up. In fact all eight were up by 1% or more today. As icing on the cake....a nice beat of the SP500 today by 0.79%. A great start to FED week as investors get tired of the earnings disrespect and other market BS.
Not a good idea....unless it is an absolute last choice. I need my 401(K) money now: More Americans are raiding retirement funds for emergencies https://www.usatoday.com/story/mone...awal-for-emergencies-more-common/71311871007/ My personality is and was through my work life to NEVER touch retirement money. The temptation is always there....especially with the ability of humans to rationalize things.....yeah right. We would have had to be down to absolutely ZERO options to have ever considered taking retirement money out. In that case if you have exhausted all other options ok. The big killer if you do this......you will be taxed on the money as regular income......and....there is no option to pay it back into the 401K. If it is not one of the approved IRS categories of "hardship"....there will also be a 10% tax penalty. Hardship categories: "....you can take one to cover costly medical care, a home purchase, college tuition or funeral expenses, or to prevent foreclosure or eviction. You withdraw only what you need to cover the hardship." This is an alternative.....although you will end up having to make payments to repay the loan....something that is not done with a hardship withdrawal. "Borrowing against a 401(k) remains a viable alternative to withdrawing money. Workers may borrow up to half of their account balance, up to a maximum of $50,000, and repay the money through payroll deductions."
The close today. Stock market news today: US stocks rally as investors await Fed decision, Apple earnings https://finance.yahoo.com/news/stoc...it-fed-decision-apple-earnings-200211500.html (BOLD is my opinion OR what I consider important content) "US stocks rallied on Monday after a bruising sell-off as investors looked ahead to a big week of events, with the Federal Reserve's latest policy decision and earnings from Apple (AAPL) on the calendar. The benchmark S&P 500 (^GSPC) climbed 1.2% at the closing bell, after officially entering correction territory, while the Dow Jones Industrial Average (^DJI) jumped about 1.6%, or more than 500 points, after dropping about 1.2% at its last close. The tech-heavy Nasdaq Composite (^IXIC) finished the day up roughly 1.2% in the wake of a downbeat week driven by mixed results for Big Tech earnings. Eyes are now on the US central bank and Apple, the biggest company on the S&P 500, to lift spirits after a tough few months for the stock market. Also closely watched is the US jobs report for October, due Friday. A jump in the Fed's preferred inflation metric has raised expectations that policymakers will stick to their "higher for longer" stance and hold interest rates steady in their decision on Wednesday. Apple is set to release its quarterly results on Thursday after the market close, with any impact from China's moves to constrain the use of iPhones in focus. Meanwhile, investors are weighing what McDonald's earnings out Monday say about the US consumer, which has proven resilient in the face of high borrowing costs. The burger giant beat earnings estimates for the third quarter as higher menu prices boosted sales growth. In commodities, benchmark oil prices fell as Israel's measured start to its campaign in Gaza eased fears that the conflict will escalate throughout the Middle East — seen as encouraging investors to dive back into markets. West Texas Intermediate futures (CL=F) lost about 3.6% to reach $82.50 a barrel, while Brent futures (BZ=F) shed roughly 3% to trade around $87.84 a barrel." MY COMMENT I have a different take on the BIG rally today.....market negativity simply got too far ahead of reality. So reality....snapped the markets back.....from the jaws of defeat.
"AS USUAL.........HERE is my current PORTFOLIO MODEL. I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 60% of the total portfolio and the fund side at about 40% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio.At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Honeywell Microsoft Nvidia MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (73). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis." #16797
I completely ignored the markets today. We spent all day moving our four horses to a new facility. Our old place got bought out by Elon Musk......the property that is. So we had to make a move.
I was glad to see all the averages nicely in the green today. I did not benefit....however. I ended the day basically flat. I also got beat by the SP500 today by 0.64%. My flat day today was compliments of.......GOOGL, COST and NVDA being down today. Oh well.....I expected much worse since when I left the house this morning all the averages were strongly RED.
We have a good open today.....although the real n market will happen in the final hours after the FED does their thing.
Here is a nice little article......on human behavior. The People Who Lost Serious Cash on NFTs Five investors – whose losses range from a few thousand quid to $5 million – tell us what went wrong and what how they feel now. https://www.vice.com/en/article/n7e9km/people-lost-money-on-nfts (BOLD is my opinion OR what I consider important content) "If you had to pinpoint the moment the NFT bubble was at its most grotesquely swollen, then it’s surely when Paris Hilton went on The Tonight Show Starring Jimmy Fallon in Jan. 2022. It was a fever dream of an interview, in which Fallon and Hilton had a stilted and bewildering chat about their recent investment in Bored Ape Yacht Club NFT artworks. “I wanted something that reminds me of me,” said Hilton, as Fallon held up a picture of an ape wearing a hat and sunglasses, and the audience applauded. Flash forward a year, and the vast majority of NFTs are now virtually worthless, according to a report by dappGambl. An NFT of the first ever tweet – from former Twitter CEO Jack Dorsey that read “just setting up my twittr” – that sold for £2.3 million in 2021, is now worth around £1,200. In August, it was reported that a group of collectors who had invested in Bored Ape NFTs were filing a lawsuit against the numerous celebrities (including Fallon, Hilton, Justin Bieber and the auction house Sotheby’s) who they believe had falsely marketed the artworks and intentionally inflated their price. But for most investors, high profile lawsuits won’t be an option. Instead, they are left to ruminate on their losses and move on with their lives. So who are the people left bearing the consequences of this collapse? And what are they going to do with their ruined investments? We interviewed five NFT investors – whose losses range from a few thousand quid to $5 million – about what went wrong, what they’re going to do next, and how they feel about the future of NFTs. Kyle Heise, 32, San Francisco – down $2,050 VICE: How do you feel about the losses? Heise: Regarding the overall mentality, I feel fine. I never invested too much. But I do know several people who have been driven to very critical health states. I’ve seen dudes heavily invested in NFTs that have tanked, getting jobs delivering pizzas because they stretched themselves too thin. I’ve heard about heart attacks and suicide attempts – seriously awful and dire situations. What is going on in the NFT space now? First, there’s a really negative association with these communities. They're full of grifters and arrogant people who made quick money and somehow think that getting rich off some random JPEG purchase makes them better people. But I’ve also seen NFTs do some really great things: Support struggling artists, give people jobs, and even bring attention to the world plastic crisis at a UN Summit in Kenya. NFTs are truly going to positively change many industries. Secondly, the truth is many of these NFT projects are owned by just a few people and are passed around between those same folks. This leads to the infighting and flurry of hysteria in these small social groups. Hype and FUD (Fear, Uncertainty, Doubt) multiply like wildfire. This leads to some crazy situations. Thorne Melcher, 35, Atlanta – down $5,000 VICE: How much money did you lose? Melcher: The value of my collection is down almost $5,000 from its peak. I was never a big spender chasing things that seemed overpriced to me, like Bored Apes. I paid about three grand to get two crypto coven [witch-themed NFTs] that could now fetch a few hundred bucks at most. I still like them, but that crash is indicative of how much the NFT market cratered. Is there a future for NFTs? Absolutely! Just not in the way people were expecting a couple of years ago. Anti-NFT folks have often derisively compared them to Beanie Babies or tulips, but both of these are still popular, well-selling goods. There just has to be more focus on the typical buyer being someone who gets gratification out of the NFT itself; because of what it unlocks, the art itself or significance of owning it. That isn’t going to command Bored Ape-level prices, and that's okay. I'm sure we will see more super expensive NFTs in the future, but as long as that is what defines the space, it’ll hold back their appreciation and adoption by wider audiences. It takes a certain type of person to constantly chase what are essentially gambling wins, but most people do enjoy collecting things that, in the words of Marie Kondo, “spark joy”. Joseph Skewes, 39 – down $50,000 VICE: How much did you lose on NFTs? Skewes: The value of the NFTs I held peaked around Sept. 2021. I recall calculating their worth at one point as well north of $50,000 based on market prices. I still hold the vast majority of them – I couldn't sell most even if I wanted to; I would be down 95-99 percent from peak prices. I'm probably out of pocket $2,000 from that period, but from the peak, the loss is upwards of $50,000. How did you feel about the losses? There were some pangs of regret that I didn't sell at the top. I could have sold, bought back my favourite art pieces, and had more of my mortgage paid off. I don't think about it too much today; I just enjoy the NFT collection I have, and continue to buy more from time to time. I’m currently building a startup with several other cofounders that aims to help people showcase their favourite NFT collectibles and art. Robin (name changed for privacy reasons), 32, Florida – down $300,000-$400,000 VICE: How much did you spend on NFTs? Robin: I only had $10,000 in crypto when NFTs caught my eye in 2020. During the 2021-2022 bull run, I went all-in and luckily turned $10,000 into $800,000. My biggest win (90 percent of my profits) was buying Bored Ape before they got popular. How much money did you lose? It was all downhill after April 2022, because both NFTs and crypto were in free fall. I luckily sold all my Bored Ape assets at the top for $800,000. After the 2022 crash, I got back into NFTs and memecoins and have been pretty unsuccessful since. I’ve lost about $300,000-400,000 trying to trade these assets. Describe how you felt about those losses then, and now? I felt invincible making $800,000, so I was more willing to spend a lot. But after losing 50 percent of my profits, it was upsetting. So I’ve gone back to my original strategy, which is to sit on my hands and wait for the next crypto bull run. I try to resist most NFT and memecoin temptations, even though I want to keep buying. Sergei Sergienko, 41, Sydney – down $4.995 million VICE: How much did you spend on NFTs and how much were they worth at the height of their value? Sergienko: Personally, I’ve spent close to $500,000 on NFTs and they reached a peak value of at least $5 million. I “lost” at least $4.995 million, as the current value of those NFTs is close to $5,000. How did you feel? To tell you the truth, I’m well accustomed to losing crazy sums of money. I’ve been in crypto for a while. You always get these crazy gains followed by substantial losses. I’ve seen it all before, and the NFT hype was not my first rodeo. I can appreciate how upset an average person would be, though. First time I lost everything, I was devastated and found some sort of sanity in alcohol. Then I channeled myself into work and new opportunities, of which one was crypto. Will you keep participating in buying and selling NFTs? I’ll definitely participate in the NFT economy in whatever form it takes. It’s usually very advantageous to be ahead of everyone else – the early bird gets the worm, so to speak. NFTs are just at the beginning of their journey. I’m sure plenty more opportunities lie ahead. We are just getting started." MY COMMENT NO....the early bird does not get the worm. In the case of fake and over-hyped....so called collectables.....the early bird gets screwed just like everyone else. I suspect that most people saw this coming a mile away. I remember thinking when this stuff was raging in the media as the next great collectable....that these things were worthless junk. I am of course a collector of various items. The ikey for anyone that wishes to collect......do your homework....make sure what you are collecting has a long established market and has stood the test of time. Even in the case of established items like art.....things come and go out of style. The first rule of collecting.....avoid all items that are obvious hype.
Here is the economic data story of the day. US private payrolls, wage gains slowing - ADP https://finance.yahoo.com/news/us-private-payrolls-miss-expectations-122559945.html (BOLD is my opinion OR what I consider important content) "WASHINGTON (Reuters) - U.S. private payrolls increased less than expected in October and wage growth moderated, according to a report on Wednesday. Private payrolls rose by 113,000 jobs last month after gaining 89,000 in September, the ADP National Employment report showed. Economists polled by Reuters had forecast private payrolls rising 150,000. Though the labor market is cooling in response to the Federal Reserve's massive interest rate hikes, the ADP report likely overstates the pace of slowdown. Labor market conditions remain tight and continue to underpin the overall economy. A survey from the Conference Board on Tuesday showed consumers' views of the labor market upbeat in October. Fed officials were due to conclude their two-day policy meeting on Wednesday. The U.S. central bank is expected to leave interest rates unchanged but maintain its hawkish bias as a recent spike in U.S. Treasury yields and stock market sell-off have tightened financial conditions. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. The service-providing sector added 107,000 jobs, while employment in the goods-producing sector increased 6,000. Workers remaining at their jobs saw a 5.7% increase in annual wages, the smallest rise since October 2021. That was down from an increase of 5.9% in September. Those changing jobs saw their annual pay rising 8.4%, the smallest increase since July 2021. That compared to 8.8% in September. The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday of the Labor Department's more comprehensive and closely watched employment report for October. The ADP report has not been a reliable gauge in trying to predict the private payrolls count in the employment report. According to a Reuters survey of economists, the Labor Department's Bureau of Labor Statistics is expected to report that private payrolls increased by 158,000 jobs in October after rising by 263,000 in September. Some of the anticipated slowdown will likely reflect strikes by the United Auto Workers (UAW) union against Detroit's Big Three car makers, which is expected to undercut manufacturing payrolls. The government reported last week that there were at least 30,000 UAW members on strike during the period it surveyed business establishments for October's employment report. The Reuters poll estimated that nonfarm payrolls increased by 180,000 jobs October, slowing down from September's robust 336,000 count." MY COMMENT This is good news for those of us that are sick of the FED raising rates. BUT......I find it interesting that in the middle of the story you see this line: "The ADP report has not been a reliable gauge in trying to predict the private payrolls count in the employment report." So when you see various markets reports today mentioning this report.......NEVER MIND.
The.....obvious.....story of the day. Fed expected to hold rates at 22-year high but leave hikes on the table https://finance.yahoo.com/news/fed-...h-but-leave-hikes-on-the-table-094002863.html (BOLD is my opinion OR what I consider important content) "When the Federal Reserve announces its latest policy decision on Wednesday, Wall Street expects the central bank will hold rates steady while retaining the option to further raise rates if needed. "[Fed Chair Jerome] Powell wants to play it right down the middle," said Wilmer Stith, bond portfolio manager for Wilmington Trust. "They're well into their tightening cycle, if not done already." In September, the Fed held interest rates steady in a range of 5.25%-5.50%, the highest in 22 years, while its updated forecasts released at the same time suggested one additional rate hike would be needed this year to bring inflation back to its 2% target. Powell signaled in a speech at the Economic Club of New York earlier this month the central bank could hold rates steady at its next policy meeting. The Fed chair also warned, however, that inflation was still too high and more interest rate increases are still possible if the economy stays surprisingly hot. "Given the uncertainties and risks, and how far we have come, the Committee is proceeding carefully," Powell said. "We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks." James Fishback, founder and chief investment officer at hedge fund Azoria Partners, said he thinks the Fed is on hold through the end of the year. "We need a sustained period of below-target growth to bring inflation sustainably back to target," said Fishback, who once worked for hedge fund manager David Einhorn. "And there's no indication that that below-trend growth is coming any time soon." Fishback added he wouldn’t be surprised to see the Fed hiking again in the first quarter of 2024 and keeping rates at or above current levels for close to two years. The Fed's forecasts published in September suggested policymakers see interest rates coming down by 0.50% next year. Stith also sees the Fed done for 2023, pointing to language Powell used in recent comments that said the central bank "could" — rather than "would" — when describing additional rate hikes. "That definitely solidifies that we're in the sort of terminal rate for this year," said Stith. Whether it stays that way in 2024 "depends on what happens to this recent bout of economic growth," Stith added. Last week, the first estimate of third quarter GDP showed growth clocked in at a whopping 4.9% annualized rate over the summer months, driven in large part by strong consumer spending, punctuated by a surge in retail sales in September. The readings are stronger than officials would have thought at this stage in the rate-hiking cycle, raising the prospect that if the economy stays hot it could make it harder or take longer to lower inflation. The Fed's preferred inflation gauge — "core" PCE — showed prices rose 0.3% over the prior month in September, the most in four months, while annual price increases slowed modestly to 3.7% from 3.8% in August. "The recent string of positive economic surprises will keep the Federal Reserve on high inflation alert, but it won't tilt the Federal Open Market Committee toward another rate hike at the November meeting," said EY chief economist Gregory Daco. "Still, Fed Chair Powell will undoubtedly want to maintain the optionality of a further rate hike in December or January, if needed." Many economists, however, don’t believe the strength of the third quarter will continue. Luke Tilley, chief economist at Wilmington Trust, says he doesn't think third quarter GDP is reflective of real strength in the economy. "There's some seasonality with GDP," said Tilley. Other economic indicators, he said, point to "an economy that is slowing, and when that becomes clear, and you also have the inflation numbers, then the Fed has done hiking." Market challenges emerge Another challenge for the Fed to address this week will be the surge in long-term bond yields in the weeks since its September policy meeting. The yield on 10-year Treasury notes has touched 5% in recent weeks, the highest level since 2007, while 30-year yields have traded north of 5% for much of October, also the highest in 16 years. The bond rout has been attributed in part to the anticipation of stronger growth and stubborn inflation, which could see the Fed needing to hold rates higher for a longer period of time. Powell has said that the central bank is closely watching a recent surge in long-term bond yields, while other Fed officials have said recently that if long-term interest rates remain elevated there may be less need for the Fed to act. A 'Lemonhead problem' Azoria'sFishback sees the Fed facing what he calls a "Lemonhead problem" — yes, a reference to the candy. He likened the current rate-hiking cycle to the experience of sucking on the hard candy, which is sour at first, then turns sweet, only to turn back to sour again. Fishback argued consumers and large companies are mostly immune to the Fed's rate increases, with lots of homeowners and companies having already locked in their borrowing at lower rates negotiated during the height of the pandemic. And now, consumers and businesses are getting 4%-5% on money parked in money-market funds or high-yield savings accounts, helping to fuel spending. "It's so much harder [this cycle] for the Fed to actually tighten policy because they're working through financial conditions," said Fishback. "If companies are not inclined or not seeing higher interest costs, then nothing is actually changing." Fishback sees the economy headed for a "no landing scenario" in whichinflation doesn't actually cool while economic growth continues, even as interest rates remain elevated amid the Fed's attempts to bring down prices. Tilley, chief economist at Wilmington Trust, said he thinks the economy is more likely to have either a soft landing — avoiding a recession while inflation returns to target — or a mild recession than face a no-landing scenario. “We've got slower job growth, slower wage growth, and if an economy has slowing job growth, slowing wage growth, and businesses are facing 5% interest rates, what is the prospect of a reacceleration? It's not very high to me," Tilley said. As a result, Tilley sees the Fed cutting rates by more than 50 basis points forecasted by the central bank in 2024. "I think inflation and other numbers are pointing towards more like 100 basis points next year," Tilley said." MY COMMENT I do believe that the FED is.....probably......done with rate hikes. If I am wrong they have perhaps one more hike in their bag....probably.....in early 2024. So......either way the FED is done. Their real power over the markets is done. But of course they will still have perceived power and that will allow them to continue to move the markets with their threats. I also believe it is totally clear...that the high rates will......probably.....last for at the minimum ALL of 2024. People making the claim that there will be rate drops in 2024 are either delusional or are making that argument for some purpose that benefits them.
The markets continue to strengthen at this moment. If this holds we will be on the way to three positive days in a row.
