The Long Term Investor

I like this little article.

Weekly Market Pulse: Dark Matter

https://alhambrapartners.com/2023/11/13/weekly-market-pulse-dark-matter/

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

"It’s the residual of all the stuff we can’t explain. It’s not that our models are wrong, it’s the dark matter that’s out there. – Fed Governor Neel Kashkari, referring to the “term premium” in long term Treasury yields

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. – F.A. Hayek, The Fatal Conceit

Economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. – F.A. Hayek, The Pretense of Knowledge, Nobel Prize acceptance speech, December 1974

Term Premium and similar terms are the last refuge of central planning scoundrels everywhere. It is the fudge factor central bankers are using today to explain the recent rise in long-term interest rates. Term premium is defined as the extra yield investors require to hold long-term bonds instead of investing in a series of shorter maturities. It is the part of bond yields that rises and falls with uncertainty. That uncertainty might encompass a number of factors from the path of future Fed policy to inflation expectations to economic growth to credit risk.

Of course, we don’t really know and can’t know exactly why investors are buying or selling bonds at any given price. We can measure inflation expectations of course, but there are a variety of ways to do so, from comparing TIPS yields to nominal yields, to surveys of economists, to surveys of the public. The bigger problem is that inflation expectations are not correlated – at all – with actual future inflation. Do bond prices today factor in the uncertainty of the difference between current inflation expectations and actual future inflation? I have no clue and neither does Neel Kashkari.

Bond prices fluctuated in a pretty wide range last week of about 18 basis points but the MOVE index – the bond market equivalent of the Volatility index for stocks – has been rising since bond yields started rising in August 2021. And it has been elevated to multi-year highs since the Fed started to hike rates in the spring of last year. So, if inflation expectations have fallen since then – and they have – then the rise in nominal rates has to be from either rising real growth expectations or uncertainty about the credit quality of the US or uncertainty around future Fed policy. The answer is probably some of all of those things but the question is impossible to answer.

There is, of course, considerable worry presently about the debt of the US government. Moody’s changed the credit outlook for the US to negative late Friday. We also had a poor 30-year bond auction last week where primary dealers had to buy more than usual of the bonds offered for sale. But we don’t know why the auction went poorly. It may have nothing to do with the creditworthiness of the US. It may be that the uncertainty around the other potential issues was the driving factor. Who wants to buy 30-year Treasuries with so much uncertainty about future growth and inflation? And don’t forget the Fed itself, which is producing Fed speeches at an alarming rate, nearly matching the rise in prices none of their previous speeches anticipated.

There are always those, like Mr. Kashkari, who think we should be able to model the economy and learn enough to guide the economy to our preferred – or at least his preferred – outcome. I am constantly amazed that economists who consider themselves staunch capitalists, believe that, given sufficient information, they could do what they firmly believe socialists and communists cannot. Namely, to shape the economy through policy, fiscal and/or monetary, to produce a better outcome than the market left to its own devices. In other words, they believe that central planning would work if only they were the ones doing the central planning.

Right now, both fiscal and monetary policy are attempting to guide the economy. The aim of those policies is sometimes at odds, as it is now with fiscal policy attempting to expand the economy while monetary policy seeks to restrain it. The result is that some of the fiscal policies are being offset directly by monetary policy. A new modular reactor project in Idaho was canceled last week, despite considerable government subsidies, because rising inflation and interest rates increased the cost of the project by 75%. Multiple offshore wind projects, part of President Biden’s green energy push, have been canceled recently for similar reasons. NextEra Energy saw its stock price drop by a quarter over 10 days in late September because of increased costs in its renewable energy unit, similar to the wind projects problems.

In addition to the intended and unintended consequences of economic policy, the economy is constantly changing on its own due to changes in consumer preferences, prices, scientific and technological discoveries, and any number of other factors. Throw in the changes induced by COVID and you get an economy that doesn’t act like everyone – anyone – seems to think it should, the Fed very much included. COVID, by the way, really only accelerated some trends that were already in place but the acceleration matters too. Here’s a video we did last week about changes in consumption since COVID.

Yes, there is indeed a lot of uncertainty about the economy right now and I guess that means that the term premium is rising. Uncertainty is always with us and I’m not sure it is worse today than, say, 10 years ago, but I do think that if the Fed wants to minimize it, they could do two things. First of all, they could just do less. It is the height of folly and hubris to believe that monetary policy can or should be used to fine-tune the economy. In attempting to exert a control they don’t have, the Fed itself disrupts the normal operation of the economy with little regard for the unintended consequences. And there are always unintended consequences. As evidence of the consequences of poor monetary policy, I offer this:

The second thing the Fed could do is even simpler: shut up. The constant talking, about the economy and what they think about future policy, makes the uncertainty around future Fed policy…well, uncertain. Interpreting Fedspeak can be a whiplash affair with one Governor hawkish and one dovish and some so confused they take to blaming “dark matter”. The whole idea behind more openness was to make future policy less opaque, for the Fed to provide “forward guidance” and thereby remove this uncertainty. But with so many voices speaking, so many egos jockeying for attention, they’ve accomplished the opposite.

The idea of forward guidance (what other kind of guidance would there be?) also makes the mistake outlined by Hayek in his Nobel acceptance speech – the pretense of knowledge. If the Fed was able to model the economy, if it was able to accurately predict economic variables, forward guidance would be great (or so we assume). But of course they can’t, so attempting it just adds to the uncertainty. Mr. Kashkari, your models are wrong and the evidence of that is staring you in the face. You call it term premium. I call it hubris."

MY COMMENT

The ability of anyone to control or guide the economy is a huge MYTH. It is simply impossible. We saw this for decades as communist countries failed to be able to do this.....and we constantly see this with the FED and our government trying to do the same thing.

We constantly see all the experts being wrong.....over and over. It is simply impossible.

This is the primary reason why long term investing is the only option. All other forms of investing assume that the markets can be predicted and controlled. It is not going to happen. If it ever gets to the point where it is possible....it will be a sign that the markets are corrupt and being manipulated.

 

Ah yes.....my Home Depot stock. It has had a hard year this year....but....I love that company.

Home Depot beats Q3 earnings estimates as customers opt for smaller projects
Shares of Home Depot popped up roughly 1% in pre-market trading.

https://finance.yahoo.com/news/home...omers-opt-for-smaller-projects-133032366.html

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

"Shoppers downsizing to smaller projects have chipped away at Home Depot (HD)'s earnings.

The home improvement store reported Q3 earnings on Tuesday morning. Sales are down 3.10% year over year, though it wasn't as low as Wall Street's expected 3.31%.

Revenue came in a hair higher than anticipated at $37.71 billion, compared to estimates of $37.70 billion. Adjusted earnings per share was $3.81, compared to the $3.76 expected.

While foot traffic dropped 2.4%, higher than the 1.27% expected, the average ticket dropped less than expected, down 0.30% instead of 0.60%.

CEO Ted Decker said the company "saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories."

Shares of Home Depot popped up roughly 1% in pre-market trading. Year to date shares down nearly 9%.

In a note to clients, TD Cowen analyst Max Rakhlenko said the firm expects that the beat was driven by "pro" demand, as oppose to consumers working on DIY projects.

For the full 2023 fiscal year, Home Depot narrowed its prior guidance range.

It now expects sales to drop 3% to 4% compared to fiscal year 2022; it previously expected a decline of 2% to 5%.

Adjusted earnings per share are expected to decrease 9% to 11% year over year, compared to previous guidance of 7% to 13%.

In its latest quarterly earnings call in August, Decker told Wall Street analysts, "Fears of a recession, or at least a severe recession, have largely subsided, and the consumer is generally healthy...But given all those positives ... uncertainties remain."

MY COMMENT

This company is an ICONIC business. They are the clear leader in a two company business area. They have struggled this year with their stock......mostly in my view.....due to difficult quarterly comparisons to the covid years and the distortions of the economy during that time.

The best achievement that I have seen with the company over the past few years is the fact that they have now captured the professional business. The consumer side will take care of itself....adding....the professional business is a huge "get" for this company.

I have no plans to sell this stock and when I can I will add to it.

At this moment they are Up by over $17 per share and over 6%. A good earnings BEAT.....from a very solid company.

 

Another stock that went through a little rough patch......for a month or two lately.....and is now BOOMING.

Nvidia adds $220 billion as winning streak matches record

https://finance.yahoo.com/news/nvidia-adds-200-billion-winning-123824800.html

They report earnings next week on November 21. I am expecting a continuation of the HUGE earnings lately. A nice little pre-Thanksgiving event.

 

Well....I am now going to sit for a while and enjoy the ride.

Tiresmoke called it the other day.....ONWARD AND UPWARD.

 

One last item that is important today and into the near future.

10-year Treasury yield tumbles below 4.5% on cool October inflation report

https://www.cnbc.com/2023/11/14/us-treasury-yields-investors-look-to-key-inflation-data.html

 

A BIG FAT gain today....like everyone.

Every stock in the green. HD up by 5.4%. AMZN, COST, NVDA, and HON all up by 2% or more today. I also got in a beat on the SP500 by 0.18% today.

A KILLER day today.....with a significant probability that it will carry over for the rest of the week. If we continue like this there is a good "possibility" of another 8% to 12% gains over the rest of the year.

 

Well DUH......there sorts of polls are simply guesswork.

Americans keep guessing wrong about inflation

https://finance.yahoo.com/news/americans-keep-guessing-wrong-about-inflation-202141800.html

I do disagree with the article saying that these sorts of polls are important. I say they are totally inaccurate.....and...people rarely report their own situation....they report what they think others are felling based on what they hear and read in the media. Plus....they are totally hindsight.

 

Of course.....right on schedule....cue the MORONS. With the news today they had to send out one of the clowns to try to talk things down. BUMMER for them....no one cared.

Fed's Goolsbee: 'A way to go' on inflation despite 'progress'

https://finance.yahoo.com/news/feds...-on-inflation-despite-progress-193033561.html

 

Here is the close and the day in a nutshell.

Stocks soar, yields tumble as inflation pressures ease in October

https://finance.yahoo.com/news/stoc...tion-pressures-ease-in-october-210148068.html

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

"US stocks capped off a strong rally on Tuesday as investors digested a cooler-than-expected inflation print.

The Dow Jones Industrial Average (^DJI) closed up more than 450 points, or around 1.4%, as the tech-heavy Nasdaq Composite (^IXIC) jumped roughly 2.4%. The benchmark S&P 500 (^GSPC) rose 1.9%.

The small cap Russell 2000 (^RUT) index also soared following the data, closing up more than 5% — its best close in over a year.

The 10-year Treasury yield (^TNX) dropped a whopping 19 basis points to trade near 4.44%, while the 30-year Treasury yield (^TYX) declined roughly 12 basis points to 4.62%.

Consumer prices were unchanged from the prior month in October as a drop in oil prices dragged down headline inflation while "core" inflation rose at the slowest annual pace since September 2021, according to the latest data from the Bureau of Labor Statistics released Tuesday morning.

The deceleration signaled to both investors and Wall Street economists that the Federal Reserve could very likely be done raising interest rates."

MY COMMENT

Now we move on to some of the big retail earnings later in the week. With the EPIC number of BEATS we have seen so far....the odds are good for these consumer earnings to be BEATS....or....at least adequate.

 

I am hearing those sleigh bells way off in the distance......could it be Santa's sleigh?

Remember how we were in a nasty correction and all was lost just three weeks ago. Now we have put up an EPIC rally for the past three weeks and have a very good start in place for this week.



The question is.........ARE YOU INVESTED.

If not why not? Of course there could be many reasons why someone is not fully invested. And that is all good.....you have to do what is right for your situation.

BUT....if you have time on your side and are a long term investor......being fully invested all the time will GUARANTEE that you capture all the sudden and unanticipated gains that the markets want to give you. It is impossible to time the markets or guess when the explosive gains will happen.

Personally I will take the pain in order to get the maximum gain.

I continue to be fully invested for the long term as usual.

 

This is me when the markets are punishing me:

 

Even some good news for those trying to buy a home.

Cooler monthly inflation report pushes mortgage rates even lower

https://www.cnbc.com/2023/11/14/coo...-report-pushes-mortgage-rates-even-lower.html

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

"Key Points

• Mortgage rates fell again on Tuesday.
• The bond market rallied after government data showed inflation was lower than expected.
• Wall Street has started to reduce its expectations for more Federal Reserve rate hikes ahead.

The average rate on the 30-year mortgage fell 18 basis points to 7.40% on Tuesday, according to Mortgage News Daily, as Wall Street lowered its expectations for future Federal Reserve hikes.

The drop was due to a sharp bond market rally, after the government’s monthly inflation report came in lower than analysts had predicted. As bond yields fell, so too did mortgage rates, which loosely follow the yield on the 10-year Treasury.

Mortgage rates had already been declining from their recent highs. A one-two punch of the Fed holding rates steady at its last meeting and a weaker-than-expected monthly employment report pointed to the end of interest rate hikes.

The 30-year fixed mortgage rate jumped over 8% on Oct. 19, the highest level in more than two decades. It then fell more than 25 basis points in the first week of November to 7.38%, coming back slightly last week and starting this week at 7.58%.

“Even though today’s inflation data was extremely important in shaping the rate narrative, the bond market’s reaction is nonetheless impressive,” said Matthew Graham, chief operating officer at Mortgage News Daily. “Mortgage lenders have done a great job of keeping pace with market movement considering mortgage rates are often accused of taking the elevator up and the stairs down.”

While the recent mortgage rate increases were all within 1 percentage point, the comparison to two years ago, when rates were near record lows around 3%, has made today’s homebuyers exceptionally sensitive to rates. Some can no longer either afford a home or qualify for a mortgage. Home sales have been falling for several months, with some calling the market frozen even before the start of winter.

“The interest rate rises should be over, and the Fed will have to consider cutting interest rates seriously. In the meantime, the bond market is reacting as if the Fed will be cutting interest rates next year. Mortgage rates look to head towards 7% in a few months and into the 6% range by the spring of 2024,” said Lawrence Yun, chief economist for the National Association of Realtors."

MY COMMENT

What a difference a few years make. We were at about 3% in the mortgage market back two years ago. Now buyers will be celebrating if we get back down to 6%.

It takes a while to readjust your thinking......but rates in the 5% to 7.5% are the historical NORM.

 

Government shut-down? Nope.

Washington appears ready to take holiday break from government shutdown threats

https://finance.yahoo.com/news/wash...om-government-shutdown-threats-230700342.html

 

The good news continues.....if you care to "see" it.

Retail sales fall less than forecast in October as US consumers defy expectations again

https://finance.yahoo.com/news/reta...sumers-defy-expectations-again-133915577.html

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

"October retail sales fell less than Wall Street feared, reiterating that the American consumer remains in better shape than many economists have projected.

The 0.1% drop marked the first headline monthly decline in sales since March. Economists surveyed by Bloomberg had expected a 0.3% decline.

Sales excluding auto and gas increased 0.1%, below estimates for a 0.2% increase compiled by Bloomberg. Meanwhile, September's sales were revised up to 0.9%from a previously reported 0.7% increase.

"The consumer spent money like there was no tomorrow in Q3, and the retail sales data for October suggest that they broadly paused at the outset of Q4," Jefferies US economist Thomas Simons wrote in a research note Wednesday. "In our view, the pace of spending in Q3 is unsustainable.

"While it is somewhat encouraging to see that spending did not fall off a cliff in October, the pause is likely a sign of further weakness to come."

The October report, released by the Commerce Department, offers a snapshot of consumer spending at a time when economic data has begun to paint a picture of an economy that's showing some signs of slowing growth in the labor market while inflation continues to fall.

“Along with the encouraging October CPI report and healthy slowing in employment growth, the pullback in consumer spending after the summer spending spree will give the Federal Reserve comfort that their restrictive monetary policy stance is reducing inflationary pressures," Nationwide Chief Economist Kathy Bostjancic wrote in a research note after the data release. "We continue to believe the Fed is done hiking rates this cycle."

Seven of the 13 categories highlighted in the release saw decreases from a month ago while clothing was the lone category unchanged from August. Sales at furniture and home stores declined the most, falling by 2% in October while miscellaneous stores dropped 1.7% from the month prior. Motor vehicle and parts dealers also saw sales declines of 1%

The biggest gainers were health and personal care stores where sales gained 1.1%. Electronics & appliance stores saw a gain of 0.6%.

The report comes amid a busy week in retail as big box retailers report quarterly results. Thus far, both Home Depot (HD) and Target (TGT) have reported sales declines from the prior year, though their numbers haven't dropped as far as Wall Street feared.

"Q4 is off to a much slower start, and we are not optimistic about the next two months given the resumption of student loan payments in October, and the lack of experiential spending opportunities in the Winter as compared with the late Summer," Simons said of the outlook for consumer spending to end the year."

MY COMMENT

The headline should read......"Yes....Experts Wrong Once Again".

They are virtually never right......and if they happen to be right once in a while....it is random chance.

 

The other good news today for the markets.

Target clobbers muted earnings estimates, but student loans, higher interest rates slow sales

https://finance.yahoo.com/news/targ...gher-interest-rates-slow-sales-113436428.html

MY COMMENT

Good market news short term. I will not own this stock.....they are not a dominant company. I also dont like their management.

 

The......continued.....bull market.

Stock rally roars again as Target soars after earnings beat

https://finance.yahoo.com/news/stoc...rget-soars-after-earnings-beat-121616030.html

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


"Wall Street stocks rallied again on Wednesday, with investors embracing the idea that abruptly cooling inflation will put interest-rate hikes on ice.

The Dow Jones Industrial Average (^DJI), Nasdaq Composite (^IXIC) and benchmark S&P 500 (^GSPC) all rose more than 0.3%.

The jump in stocks was juiced by the surprise easing in US price pressures, which spurred bets the Federal Reserve will keep rates steady and could start cutting them early next year. Data out Wednesday reiterated this narrative as October wholesale prices saw the largest monthly decline in two-and-a-half years.

Meanwhile, October's retail sales report revealed the first monthly decline in sales since March, though the 0.1% drop still topped Wall Street's estimates.

Shares in Target (TGT) surged around 15% in pre-market trading after its third-quarter earnings clobbered estimates. The big-box retailer pointed to the resilience of the US consumer in the face of higher borrowing costs."

MY COMMENT

A rare article......not a single negative opinion.

 

The positive......but ignored.....story of the day.

Wholesale prices fell 0.5% in October for biggest monthly drop since April 2020

https://www.cnbc.com/2023/11/15/who...or-biggest-monthly-drop-since-april-2020.html

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

"Key Points

• The producer price index declined 0.5% for the month, the biggest monthly decline since April 2020. Wall Street had been expecting a 0.1% increase.
• The Commerce Department’s advance retail sales report for the month showed a decline of 0.1%. Wall Street had been looking for a decline of 0.2%.
• The Empire State Manufacturing Survey, which gauges conditions in the New York area, posted an unexpected increase of 14 points to 9.1.

Wholesale prices fell 0.5% in October for biggest monthly drop since April 2020

Wholesale prices in October posted their biggest decline in 3½ years, providing another indication that the worst of the inflation surge may have passed.

The producer price index, which measures final-demand costs for businesses, declined 0.5% for the month, against expectations for a 0.1% increase from the Dow Jones consensus, the Labor Department reported Wednesday. The department said that was the biggest monthly decline since April 2020.

On a yearly basis, headline PPI posted a 1.3% increase, down from 2.2% in September.

Excluding food and energy, core PPI was unchanged, also below the forecast for a 0.3% increase. Excluding food, energy and trade services, the index increased 0.1%.

The report comes a day after the Labor Department said the consumer price index, which measures prices for goods and services at the consumer level, was unchanged in October from the previous month. That set off an aggressive rally on Wall Street, where sentiment is rising that the Federal Reserve is done raising interest rates and could in fact start cutting in the first half of 2024.

However, consumers in October displayed some sensitivity to prices.

The Commerce Department’s advance retail sales report for the month showed a decline of 0.1%, according to a number that is adjusted for seasonal factors but not inflation. Wall Street had been looking for a drop of 0.2%. Excluding autos, sales rose 0.1%, compared with expectations for an unchanged number.

Price declines came primarily from the goods side, as the index slid 1.4%, according to the PPI report. Final demand services prices were unchanged. A spike in goods prices caused by outsized demand for big-ticket items in the early days of the Covid pandemic helped fuel the inflation surge.

Some 80% of the drop in goods prices came from a 15.3% tumble in gasoline prices, the Labor Department said.

On the services side, transportation and warehousing costs increased 1.5%, while trade services declined 0.7%. Airline passenger services prices increased 3.1%.

From the consumer standpoint, sales also were held back by the decrease in gasoline prices, with sales at service stations down 0.3%, the Commerce Department reported. Motor vehicles and parts dealers saw a decline of 1% while furniture and home furnishing stores reported a 2% drop. Both food and beverage and electronics and appliance stores showed increases of 0.6%.

The control group of retail sales that the Commerce Department uses to compute gross domestic product showed a 0.2% gain.

Stock market futures held positive following the report while Treasury yields also were higher.

In other economic news, the Empire State Manufacturing Survey, which gauges conditions in the New York area, posted an unexpected increase of 14 points to 9.1, better than the estimate for a -3 reading. The number represents the percentage of companies seeing expansion against contraction, so any positive number indicates growth.

The report, from the New York Federal Reserve, showed gains in inventories and shipments, while the indexes for employment, prices and unfilled orders fell."

MY COMMENT

ALL.....the economic news lately has been good. Earnings....continue with a historic level of BEATS....over 88%. The FED is done.

There is NOTHING standing in the way of this bull market....other than irrational investor behavior.

 

Some tax news.

Here’s how much you can make in 2024 and still pay 0% capital gains taxes

https://www.cnbc.com/2023/11/14/how...d-still-pay-0percent-capital-gains-taxes.html

"Key Points

• The IRS on Thursday released 2024 inflation adjustments for the capital gains tax brackets, which apply to investments owned for more than one year.
• In 2024, single filers can earn up to $47,025 in taxable income — $94,050 for married couples filing jointly — and still pay 0% for long-term capital gains.
• Taxable income is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income."

 

Since I own both....I like this little story.

Forget Nvidia. Top Funds Invest 10 Times As Much In Amazon Stock.

https://www.investors.com/research/...much-in-amazon-as-in-nvidia-stock/?src=A00220

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

"Last month, the best mutual funds bet big on Nvidia (NVDA), scooping up more than $1.6 billion worth of the stock. But this month, Amazon.com (AMZN) snatched the crown as the AI Wall Street darling. Top money managers gorged on shares of Amazon stock to the tune of $16.2 billion — 10 times as much as they invested in Nvidia in October.

Amazon also earned a spot on the IBD Breakout Stocks Index, joined by fellow Magnificent Seven stocks Microsoft (MSFT) and Apple (AAPL).

The artificial intelligence boom has boosted all of these tech giants, as well as Nvidia stock, Alphabet (GOOGL) and Meta Platforms (META).

Through Alexa and more, Amazon has long been a powerhouse in machine learning, large language models (LLM) and other AI technologies. Amazon is now betting on its own AI model, code-named Olympus, as reported by Barron's.

The Amazon Web Services parent is also expanding the use of generative AI throughout its AWS cloud services business to boost productivity and innovate faster.

Amazon Unveils New Partnerships With Meta And Snap

The two Magnificent Seven titans have teamed up to launch a new initiative. The Meta-Amazon partnership centers around a new feature that will allow users to link their Facebook and Instagram accounts — two properties owned by Meta Platforms — to their Amazon accounts.

The collaboration will enable Facebook and Instagram users to make purchase by clicking on promotions in their feeds.

Amazon has also reportedly teamed up with Snapchat parent Snap (SNAP). Similar to the Amazon-Meta tie-up, the Amazon-Snap partnership will allow Snap users to buy Amazon products advertised on Snapchat directly through the app.

Amazon Smiles With 236% Growth, Strong Forecasts

On Oct. 26, Amazon posted second-quarter earnings of 94 cents a share, a year-over-year gain of 236%. Sales growth accelerated for a second straight quarter, rising 13% to $143.1 billion.

The continued rebound in the online retail and cloud giant's fundamentals have lifted its Composite Rating to 87, showing it is outpacing 87% of all stocks in terms of fundamental and technical performance.

Wall Street expects that turnaround to continue. Albeit based on comparisons to prior periods that showed a loss, analysts see Amazon delivering 2,964% EPS growth for Q3, leading to a whopping 4,594% earnings increase for the full year. Estimates for 2024 call for 39% earnings growth.

With an 86 Composite Rating, Amazon lags the other Magnificent Seven stocks, coming in just behind an 88 rating for Apple stock and an 89 for Tesla (TSLA). Nvidia, Microsoft and Meta all earn the highest-possible 99 Composite, while Google stock sports a strong 97.

Amazon Stock Sets Up Yet Another Breakout

At the end of October, Amazon stock cleared a 134.48 buy point in a double bottom. From there, the AI cloud leader has continued to climb.

On Tuesday, Amazon gapped up to poke its head above a 145.86 alternative buy point. Showing clear market leadership, the relative strength line has risen to a 52-week high.

As the stock market indexes sign on to a Santa Claus rally, Amazon's fellow Magnificent Seven stocks also ride that wave. Microsoft, Meta, Nvidia and Apple stock are all showing unmistakable power. Even Google stock has rebounded to its 10-week moving average. Tesla — the weakest of the bunch — hopes to follow suit and retake that benchmark."

MY COMMENT

I am speechless......well not really. This is why I own these DOMINANT.....world leading....businesses.