AND.....a KILLER week for the averages....except for the poor RUSSELL. DOW year to date +3.43% DOW for the week +0.65% SP500 year to date +15.00% SP500 for the week +2.26% NASDAQ 100 year to date +42.10% NASDAQ 100 for the week +2.90% NASDAQ year to date +31.83% NASDAQ for the week +2.37% RUSSELL year to date (-3.18%) RUSSELL for the week (-0.52%) WOW....look at the NASDAQ 100....it is up year to date by a whopping +42.10%. AMAZING. AS to my entire account....last week I was year to date +32.68%. As of the close today my entire account was at +37.44%. So I improved this week by 4.76%.
To all of our Veterans...Thank you. Thank you for your courage and bravery in service to our country. You all have my utmost respect and deserve to be recognized, not only today, but everyday.
The week to come. Inflation, Walmart, Target highlight a consumer-focused week https://finance.yahoo.com/news/infl...mer-focused-week-what-to-watch-143030435.html (BOLD is my opinion OR what I consider important content) "The stock market continued its rebound last week with a Friday rally that sent the major US indexes to their highest closing levels in nearly two months. In the week ahead, investors will face a schedule full of updates on the health of the US consumer as the holiday shopping season kicks into high gear. The October Consumer Price Index (CPI) report out Tuesday will bring investors a key inflation reading after several Federal Reserve officials last week tried to keep the door open for future rate hikes. Big box retailers including Home Depot (HD), Target (TGT), and Walmart (WMT) will highlight a slate of corporate earnings heavily focused on the consumer, with Macy's (M), TJX Companies (TJX), and BJ's Wholesale (BJ) also set to release results. The October read on retail sales out Wednesday morning will also offer a key read on the state of the consumer. Questions over the health of China's economy will make results from Alibaba (BABA) and JD.com (JD) closely watched. News late Friday that Moody's had changed its outlook on the US government's debt to "negative" from "stable" will also draw investor attention, as elevated interest rates raise the cost of servicing the government's growing debt pile. Stocks gained ground across the board last week, with only Thursday's hiccup breaking an eight-day winning streak for the S&P 500. Year-to-date, all three major indexes are higher with the Nasdaq's (^IXIC) yearly gains now back above 30% while the S&P 500 (^GSPC) is up 15%; the Dow Jones Industrial Average (^DJI) is up 3.4% this year. Last week, Federal Reserve Chair Jerome Powell cast some doubt on expectations the central bank will be content to hold interest rates steady in the coming months, saying at an IMF event on Thursday, "If it becomes appropriate to tighten policy further, we will not hesitate to do so." Bets on the Fed's rate hike path shifted slightly off these comments. As of Friday afternoon, markets were pricing in a roughly 22% chance the central bank hikes interest rates by the end of its January meeting, an increase from the 9% chance markets saw just a week prior, per the CME FedWatch Tool. Still, Powell reiterated the Fed will "move carefully" in the future, with this approach "allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening." Tuesday's CPI data will offer a key update on the central bank's fight with inflation. Economists forecast headline CPI inflation rose 3.3% over the prior year in October, a decrease from the 3.7% rise seen in September. Prices are set to rise 0.1% over the prior month, down from a 0.3% gain in September. A decrease in energy prices is expected to drive much of the slowdown. On a "core" basis, which strips out the volatile food and energy categories, CPI is forecast to rise 4.1% over last year in October, unchanged from September. Monthly core price increases are expected to clock in at 0.3%, also in line with the month prior. "Moderating wage and job growth, along with slower demand for goods and services, easing rent inflation and reduced pricing power should lead to further disinflation and argue in favor of the Fed holding the fed funds rate constant in the coming months," EY chief economist Greg Daco wrote in a note previewing the release. The coming week will also provide a closer look at consumer spending, a key trend in the 2023 economic story that's been headlined by a more resilient than expected consumer. Wall Street economists see the October retail sales report suggesting some cracks are forming in the consumer's appetite to spend. Data from Bloomberg shows economists project retail sales fell 0.3% in October compared to the month prior, which would mark the first negative print since March. In a research note on Thursday, Bank of America said aggregated data from its credit and debit cards showed a 0.5% decrease in spending during October compared to the year prior. Though, like the inflation print, much of that may have come from the decrease in energy prices, the firm noted. Walmart and Target will highlight the week of corporate reports, as investors will look for updates on the state of the consumer, retail crime, holiday shopping season, and how the resumption of student loan payments may be impacting spending. The two stocks have been on divergent paths this year. Walmart stock has gained about 16% in 2023, outperforming the S&P 500 and benefitting from some consumers trading down as inflation puts pressure on household budgets, particularly in the grocery aisle. Target, in contrast, has seen shares fall nearly 35%, with its higher dependance on discretionary spending — in July, Goldman Sachs estimated Target's sales are 60% discretionary goods — challenging the retailer in an environment where consumers say they feel worse about the economy than most data suggests. The performance of these stocks so far this year also serves as a reminder that they are, technically, in different sectors, with Walmart classified as a Consumer Staples (XLP) stock and Target categorized as a Consumer Discretionary (XLY) name. "In consumer discretionary there's such a wide bucket of retailer stocks, and there are some that are really thriving this year, and are reporting really decent earnings and getting rewarded for it," eToro US investment analyst Callie Cox told Yahoo Finance. "And then there are others that have really struggled, you know, durables, bigger appliances, appliance manufacturers, auto parts, manufacturers, and auto manufacturers." Cox noted that the dispersion among stocks is what's led to abnormal stock reactions this earnings season, with companies missing on earnings seeing their stocks fall more than usual while positive results aren't being rewarded as much. "That's why it's important as an investor to really understand what kind of risk you're taking on because companies are getting hit hard by these higher interest rates, especially smaller, speculative companies," Cox said. "You see that flow through in events like earnings and management calls, the effects become more apparent."" MY COMMENT Some big earnings this week. By all reason......the week should be earnings driven....but there are a good number of issues and economic data coming out to obscure the earnings results. I really dont buy the commentary about Target above. I see their issues as being management driven. These companies need to focus on the customer simply as a retail consumer.....and.....their core, basic, business. They need to stop the political and social posturing. I dont care what the politics of management of a company are.....I dont even want to know. If they are doing a good job of running the business....I will never even know. There is no excuse for any company to alienate a large percentage of their customer base......by getting involved in social or political issues.....OF ANY TYPE OR ANY SIDE......unless it is part of their core business model. With some good earnings reports.......and.....some good economic data....we could easily see another nice strong week of positive returns for the general markets.
The price of used vehicles got really screwed up over the course of the pandemic. I consider it a good thing to see prices going back to more realistic, justified, and normal levels. Used Car Market In Turmoil As Prices Collapse And Demand Wanes https://finance.yahoo.com/news/used-car-market-turmoil-prices-200000168.html
As is the case with used cars and everything else.....I welcome the return to "normal" market and economic conditions. The Ten Year yield is now "normal". The pandemic disruptions and distortions are pretty much over. The time period from about 2008 to 2020 was a total aberration.....with the extreme low rates. As stock investors and business owners we dont need zero rates to have a good market and make good returns. History has shown us that. The hard part is over': Here's what Goldman Sachs sees in the year ahead as markets and the economy return to pre-2008 conditions https://finance.yahoo.com/news/hard-part-over-heres-goldman-211501849.html (BOLD is my opinion OR what I consider important content) "Goldman Sachs said the economy and investing landscape is returning to a pre-2008 environment. Strategists said the global economy has outperformed expectations in 2023, and disinflation should carry on. Conditions are normalizing as the era of ultra-low rates ends. Goldman Sachs sees a 15% recession probability for the year ahead, and the bank expects a handful of tailwinds to support global growth and investments as the macro landscape reverts to pre-2008 conditions. In a note to clients this week titled, "The Hard Part Is Over," Goldman strategists led by Jan Hatzius highlighted that economies around the world have outperformed even optimistic expectations through 2023. "2024 should cement the notion that the global economy has escaped the post-GFC environment of low inflation, zero policy rates and negative real yields," Hatzius said. "The period since the GFC has often felt like an inexorable move towards lower global yields and low inflation — 'liquidity trap' and 'secular stagnation' were the decade's buzzwords." Policymakers have put an end to the easy-money era, and the transition to higher rates has so far been rocky, as illustrated by high volatility in the stock market, the rapid tightening of financial conditions, and the rising number of "zombie" corporations going belly up. "The big question is whether a return to the pre-GFC rate backdrop is an equilibrium," according to the strategists. "The answer is more likely to be yes in the US than elsewhere, especially in Europe where sovereign stress might reemerge." The Fed pulled interest rates to near-zero in the aftermath of the Great Financial Crisis, but a return to a high-rate environment could spell trouble for heavily indebted firms and broader business conditions. Other Wall Street forecasters, too, have cautioned that a wave of distressed debt and troubled balance sheets will come to the surface in the coming months as tighter financial conditions bite. Charles Schwab has estimated that defaults will peak sometime between now and the first quarter of 2024. Upside for markets Goldman expects returns in rates, credit, equities and commodities to exceed cash in 2024. "The transition [from the easy money era] has been bumpy, but the upside of this 'Great Escape' is that the investing environment now looks more normal than it has at any point since the pre-GFC era, and real expected returns now look firmly positive," Hatzius said. Non-cash assets could outperform cash in 2024, according to Goldman SachsGoldman Sachs Inflation should continue to decline in 2024, real household income growth should grow, manufacturing activity will bounce back, and central banks led by the Federal Reserve should become increasingly willing to cut rates, in the firm's view. "We don't think the last mile of disinflation will be particularly hard," Hatzius said. "First, although the improvement in the supply-demand balance in the goods sector — measured for example by supplier delivery lags — is now largely complete, the impact on core goods disinflation is still unfolding and will likely continue through most of 2024." Despite their relative optimism, Goldman strategists said they see "higher-than-normal risks" for 2024. Even if disinflation continues at a steady clip, it's possible that the Fed and other central banks still keep interest rates high for longer than expected. Goldman Sachs says its probability-weighted fed funds forecast is below its modal baseline forecastGoldman Sachs There are also downside risks around growth, the bank said. A recovery in global manufacturing could be delayed, particularly if high rates push companies to normalize inventory levels relative to sales below 2019 levels." MY COMMENT The reliance on irrational low interest rates by government and business is not healthy. I am glad to see them going away. Any company that can not survive with normalized rates due to their debt and other issues.....does not deserve to survive. We are nearly back to normal from the pandemic. We need to see the completion of this process and simply move on. Somehow the USA and our businesses managed to survive and thrive pre-2008. I lived through the Regan BOOM which lasted into the 1990's.....the computer era of the 1990's and into the 2000's. These were great times for stock investors. I have no fear of returning to......."NORMAL".
As a former business owner I like this sort of thinking. Nvidia CEO Jensen Huang says his AI powerhouse is ‘always in peril’ despite a $1.1 trillion market cap: ‘We don’t have to pretend…we feel it’ https://finance.yahoo.com/news/nvidia-ceo-jensen-huang-says-225059737.html
One issue I have not seen talked about much......and a classic fear mongering topic.....the potential for government shut-down in about a week. I dont give it any relevance as an investor at all.....but....I know the media will run with it and fearmonger it to the max.
I like Jensen Huang's approach. Always stay hungry or sit back and get eaten! Let's see if that lines up with a great earning report at the end of the month. Both AMD and NVDA seem to be having a nice little recovery from the last little dip. Sorry I haven't posted much but being a long term investor doesn't require too much action on my part! As my financial mentor says 'onward and upward!'
Yes....ONWARD AND UPWARD.....TO INFINITY AND BEYOND. Although it is a mildly negative open today. We are over an hour into the markets right now. I have been reading and watching since before the open. I intentionally did not post till now because I was interested in how much staying power the FEAR MONGERING stories being floated out there today would have. Those stories are: The impending government shut-down. The downgrade by Moody's. The slight rise in the Ten Year Yield. I am sure it is very obvious how I feel about all these RIDICULOUS short term excuses to drive the trading markets down for part of a day. NONE....of these are major or even minor stories worth any coverage. BUT.....that does not matter. The Ten Year yield.....just normal day to day variation......in historic low rates. Moody's.....a blatant PR move to get their name out there in the media for few days. I have one comment that says it all.....where were these rating agencies at all the times in the past that we suffered major economic hits due to BAD investment and credit vehicles. Case in point......the 2008/2009 historic economic collapse based on.......so called.....AAA investments? This is about a half to one day story-line.....but it is good for some short term trading action. The possible government shut-down.....give me a break. Another non-story that the average person ......about 90% of the country......could not care less. ASININE political posturing and of course the media jumps in....as usual.
I decided it was time to post today when I saw the DOW turn briefly green a few minutes ago. At worst this will be a meaningless day....at best....the markets will come back later when some semblance of reason comes into play.
The short term market so far today. Stock Rally Gets Respite as Treasury Yields Climb https://finance.yahoo.com/news/asia-stocks-climb-wall-street-224539670.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- Stocks kicked off the week with losses after posting big gains this month, with traders awaiting the latest inflation data, remarks from Federal Reserve speakers and results from giant retailers. The S&P 500 dropped below the key 4,400 mark breached on Friday. The decline came after the gauge posted nine positive days out of 10 — a level of consistency seen less than 1% of the time this century and last observed in the fall of 2021. Treasuries fell across the curve, with 10-year yields approaching 4.7%. The dollar rose against most if its developed-market peers. Monday’s pullback in stocks came after a rally based on the premise that interest rates are peaking. In a survey from the American Association of Individual Investors, the proportion of respondents who say they’re optimistic on the stock market jumped by three-quarters, while the ranks of pessimists has plunged. From one weak to the next, the bull-bear spread rose by 41 points, an advance last seen in early 2009. “It would actually be healthy if the stock market took a bit of a breather near-term,” said Matt Maley, chief market strategist at Miller Tabak + Co. “If it continues to rally in a straight line, especially now that many of the big cap tech names are getting very expensive once again, it could take away from some of the rally’s potential in December. No market moves in a straight line.” Traders will also keep looking for clues on the outlook for the central bank’s next steps, with policymakers seeking to bring inflation back to the 2% target. That will be a key focus on Tuesday, when economists expect data to show the consumer-price index slowed to an annual rate of 3.3% in October from 3.7% in September. “Clearly the big event of this week will be tomorrow’s US CPI release,” said Jim Reid at Deutsche Bank. “The consensus suggests that the Fed have pretty much won the battle on inflation, and markets have certainly got very excited about a potential dovish pivot. But this is far from the first time that hopes for a dovish pivot have caused excitement, and if core is sticky around 3% then there’s little doubt that the Fed will look to tighten policy again.” Wall Street will also keep a close eye on Washington negotiations to avert a US government shutdown at the end of this week, an event that would threaten the loss of the nation’s last top credit rating after Moody’s Investors Service signaled Friday it was inclined to issue a downgrade amid wider budget deficits and political polarization. The US fiscal position is on an “unsustainable trajectory” due to a lack of political will to resolve the crisis at a time when debt costs are soaring, former Fed Bank of New York President Bill Dudley said. Worries about an economic downturn aren’t enough to dissuade market participants from being bullish on risky debt as their top contrarian trade, according to the latest Bloomberg Markets Live Pulse survey. Despite heavy outflows in 2023 and countless warnings about the health of heavily indebted companies, 52% of 506 respondents see opportunities in high-yield bonds, while remaining more cautious on some of this year’s laggards including regional bank debt and commercial real estate loans. Meantime, Walmart Inc. and Target Corp. will provide insights into how much consumers have reined in discretionary spending when they report earnings this week, including a glimpse into shopping patterns ahead of the vital holiday season. Elevated mortgage rates and record-high home prices are poised to put an end to the home-improvement spending boom that drove growth at Home Depot Inc. and Lowe’s Cos. over the pandemic period." MY COMMENT In other words a good day to go do something else and not waste time with the short term BALONEY going on today. NONE of the negative stuff today has any staying power. The upward BIAS to the markets is much stronger.
One of my few stocks up today is NVDA. I like the sound of this. Nvidia unveils H200, its newest high-end chip for training AI models https://www.cnbc.com/2023/11/13/nvi...est-high-end-chip-for-training-ai-models.html (BOLD is my opinion OR what I consider important content) "Key Points Nvidia on Monday unveiled the H200, a graphics processing unit designed for training and deploying the kinds of artificial intelligence models powering the generative AI boom. The H200 includes 141GB of next-generation “HBM3” memory that will help it generate text, images or predictions using AI models. Interest in Nvidia’s AI GPUs has supercharged the company, with sales expected to surge 170% this quarter Nvidia on Monday unveiled the H200, a graphics processing unit designed for training and deploying the kinds of artificial intelligence models that are powering the generative AI boom. The new GPU is an upgrade from the H100, the chip OpenAI used to train its most advanced large language model, GPT-4. Big companies, startups and government agencies are all vying for a limited supply of the chips. H100 chips cost between $25,000 and $40,000, according to an estimate from Raymond James, and thousands of them working together are needed to create the biggest models in a process called “training.” Excitement over Nvidia’s AI GPUs has supercharged the company’s stock, which is up more than 230% so far in 2023. Nvidia expects around $16 billion of revenue for its fiscal third quarter, up 170% from a year ago. The key improvement with the H200 is that it includes 141GB of next-generation “HBM3” memory that will help the chip perform “inference,” or using a large model after it’s trained to generate text, images or predictions. Nvidia said the H200 will generate output nearly twice as fast as the H100. That’s based on a test using Meta’s Llama 2 LLM. The H200, which is expected to ship in the second quarter of 2024, will compete with AMD’s MI300X GPU. AMD’s chip, similar to the H200, has additional memory over its predecessors, which helps fit big models on the hardware to run inference. Nvidia said the H200 will be compatible with the H100, meaning that AI companies who are already training with the prior model won’t need to change their server systems or software to use the new version. Nvidia says it will be available in four-GPU or eight-GPU server configurations on the company’s HGX complete systems, as well as in a chip called GH200, which pairs the H200 GPU with an Arm-based processor. However, the H200 may not hold the crown of the fastest Nvidia AI chip for long. While companies like Nvidia offer many different configurations of their chips, new semiconductors often take a big step forward about every two years, when manufacturers move to a different architecture that unlocks more significant performance gains than adding memory or other smaller optimizations. Both the H100 and H200 are based on Nvidia’s Hopper architecture. In October, Nvidia told investors that it would move from a two-year architecture cadence to a one-year release pattern due to high demand for its GPUs. The company displayed a slide suggesting it will announce and release its B100 chip, based on the forthcoming Blackwell architecture, in 2024." MY COMMENT This little story is huge for NVDA investors......medium term. this is the future for the next year or two.
WOW the DOW is now positive....if you consider.......0.00% positive. The SP500 and NASDAQ are also making good strides toward the positive right now. There is a significant "chance" for the averages to turn green as the day progresses. ACTUAL investors know that the media excuses driving the early markets today are simply.....BS.
Exactly as it should be. Moody’s warning on the massive U.S. debt burden has turned into a nonevent https://www.cnbc.com/2023/11/13/moo...s-debt-burden-has-turned-into-a-nonevent.html (BOLD is my opinion OR what I consider important content) "Key Points Markets on Monday shrugged at a warning Friday from Moody’s Investor’s Service that it was lowering its ratings outlook on Treasurys. “There’s no piercing insight from Moody’s that they have proprietary information that nobody knows about the U.S. government. So, it’s really a nonevent,” said Glenmede strategist Michael Reynolds. There was a time when bad news about U.S. debt would send markets into a tailspin, but not this month. Markets on Monday shrugged at a warning Friday from Moody’s Investor’s Service that it was lowering its ratings outlook on Treasurys. The big-three ratings agency said high levels of government debt and deficits coupled with political brinkmanship in Washington could jeopardize the global standing of government-issued fixed income. When Standard & Poor’s and Fitch issued similar warnings, they sent at least temporary shockwaves through Wall Street. But with the domestic fiscal and political mess seemingly old news, the ratings service saber-rattling just doesn’t seem to have the same impact. “If we go from triple-A to double-A, what does that practically mean? It doesn’t really mean anything. There’s still going to be demand for U.S. Treasurys en masse,” said Michael Reynolds, vice president of investment strategy at Glenmede Investment Management. “There’s no piercing insight from Moody’s that they have proprietary information that nobody knows about the U.S. government. So, it’s really a nonevent.” Indeed, no one has to tell investors about the $33.7 trillion U.S. debt and the $1.7 trillion deficit in fiscal 2023. Both are well-known issues with which Wall Street wrestles daily. The Moody’s news merely echoes those problems. Despite its warning, the service is the only one of the big-three agencies that still has a triple-A rating on U.S. debt; Fitch lowered its rating in August, and S&P made its move 12 years ago. Things were relatively quiet in the markets Monday, the first trading day after the Moody’s announcement that it was taking its outlook to negative from stable. Major stock market indexes posted muted gains, while yields on long-dated Treasurys rose slightly. Auction concerns Earlier last week, markets were jostled by weak auctions of 10- and 30-year paper, a reminder that investors are concerned about the long-term ability of the government to pay its bills. Net interest on the debt for fiscal 2022 cost taxpayers $659 billion. In October 2023, the first month of the 2024 fiscal year, the deficit totaled more than $66.5 billion, the Treasury Department reported Monday. “People are incrementally starting to think about that,” Reynolds said of the issues in the fixed income markets. “Is there a moment within the next couple of years where this really hits an apex point and things get out of control? Probably not. But it’s it’s one of those things that’s just going to keep nagging at us until politicians get serious about fixing some of these issues.” Reynolds noted that Glenmede is currently overweight cash and is looking at opportunities to start buying into longer-dated Treasurys. The latter move is based on the firm’s belief that the U.S. is likely headed for recession, which presumably would knock down yields and make longer-duration paper more enticing. There’s still skepticism, though, about bonds, particularly if inflation stays elevated and the Federal Reserve holds benchmark interest rates high. Fed Chair Jerome Powell last week also rattled markets when he issued a reminder that the central bank remains committed in its inflation fight and could yet hike rates even more. “While we see room for an improved demand backdrop, it hinges on greater conviction in the end of the Fed hiking cycle,” Meghan Swiber, rates strategist at Bank of America, said in a client note Monday. “This can be confirmed or rejected by this week’s data” which will include inflation reports on consumer and producer prices. Investors apparently have been making some retail bets that rates could start falling: The $42.2 billion iShares 20+ Year Treasury Bond ETF has taken in $831.6 billion in fresh cash in November, according to FactSet." MY COMMENT Not only is this a non-event.....it is simply DUMB. I see it as nothing more than an attempt at PR for Moody's. Talk about dumb....pointing out the obvious that everyone in the world already knows. In addition.....the so called "EXPERTS" at Moody's......nothing more than the usual morons. At least....in my personal opinion.
I ended the day today with a minor loss. I was actually still in the green about 20 minutes from the close. obviouosly something turned stronger to the down side in the last 20 minutes for me. I had a couple of winners today......that had me in the green most of the day......COST and NVDA. I got beat by the SP500 today by 0.14%. A nothing and irrelevant day for me today....as we move into the rest of the week.
I consider it a positive and a sign of market strength....that the markets were able to mostly shake off the BS that was thrown at them today. We basically start fresh tomorrow....today being irrelevant.
The markets start today with a strong wind to their backs....compliments of the CPI data. Inflation was flat in October from the prior month, core CPI hits two-year low https://www.cnbc.com/2023/11/14/cpi-inflation-report-october-2023.html (BOLD is my opinion OR what I consider important content) "Key Points The consumer price index, which measures a broad basket of commonly used goods and services, was flat in October from the previous month but increased 3.2% from a year ago. Both were below Wall Street estimates. Excluding volatile food and energy prices, core CPI increased 0.2% and 4%, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021. The flat reading on headline CPI came as energy prices declined 2.5% for the month, offsetting a 0.3% increase in the food index. Inflation was flat in October from the previous month, providing a hopeful sign that stubbornly high prices are easing their grip on the U.S. economy. The consumer price index, which measures a broad basket of commonly used goods and services, increased 3.2% from a year ago despite being unchanged for the month, according to seasonally adjusted numbers from the Labor Department on Tuesday. Economists surveyed by Dow Jones had been looking for respective readings of 0.1% and 3.3%. Headline CPI had increased 0.4% in September. Excluding volatile food and energy prices, core CPI increased 0.2% and 4%, against the forecast of 0.3% and 4.1%. The annual level was the lowest in two years, though still well above the Federal Reserve’s 2% target. Markets spiked on the news. Futures tied to the Dow Jones Industrial average were up 300 points as Treasury yields fell sharply. Traders also took any potential Fed interest rate hikes almost completely off the table, according to CME Group data. “The Fed looks smart for effectively ending its tightening cycle as inflation continues to slow. Yields are down significantly as the last of investors not convinced the Fed is done are likely throwing in the towel,” said Bryce Doty, portfolio manager at Sit Fixed Income Advisors. The flat reading on headline CPI came as energy prices declined 2.5% for the month, offsetting a 0.3% increase in the food index. Shelter costs, a key component in the index, rose 0.3% in October, half the gain in September as the year-over-year increase eased to 6.7%. Within the category, owners equivalent rent, which gauges what property owners could command for rent, increased 0.4%. Vehicle costs, which had been a key inflation component during the spike in 2021-22, fell on the month. New vehicle prices declined 0.1%, while used vehicle prices were off 0.8% and were down 7.1% from a year ago. Air fares, another closely watched component, declined 0.9% and are off 13.2% annually. Motor vehicle insurance, however, saw a 1.9% increase and was up 19.2% from a year ago. The report comes as markets are closely watching the Fed for its next steps in a battle against persistent inflation that began in March 2022. The Fed ultimately increased its key borrowing rate 11 times for a total of 5.25 percentage points. While markets overwhelmingly believe the central bank is done tightening monetary policy, the data of late has sent conflicting signals. Nonfarm payrolls in October increased by just 150,000, indicating that the labor market finally is showing signs that it is reacting to Fed efforts to correct a supply-demand imbalance that has been a contributing inflation factor. Labor costs have been increasing at a much slower pace over the past year and a half as productivity has been on the rise this year. More broadly speaking, gross domestic product surged in the third quarter, rising at a 4.9% annualized pace, though most economists expect the growth rate to slow considerably. However, other indicators show that consumer inflation expectations are still rising, the likely product of a spike in gasoline prices and uncertainty caused by the wars in Ukraine and Gaza. Fed Chair Jerome Powell last week added to market anxiety when he said he and his fellow policymakers remain unconvinced that they’ve done enough to get inflation back down to a 2% annual rate and won’t hesitate to raise rates if more progress isn’t made. “Despite the deceleration, the Fed will likely continue to speak hawkishly and will keep warning investors not to be complacent about the Fed’s resolve to get inflation down to the long-run 2% target,” said Jeffrey Roach, chief economist at LPL Financial. Even if the Fed is done hiking, there’s more uncertainty over how long it will keep benchmark rates at their highest level in some 22 years." MY COMMENT Enjoy the ride today and the rest of this week. We still have the earnings and consumer data later this week....but this gets us off to a good start. YES.....the FED will continue to try to jaw-bone the markets down every chance they get. For some reason they continue to see the markets as a proxy for the economy....which is ridiculous. In spite of the constant negativity and fear mongering coming from the media.....most data is lining up very nicely. i am sure we will see much money start to pour back into the markets as investors siting on the sidelines capitulate and come back in. Now all we need is for the media to capitulate.....and abandon the dark side.
