A little late (12 months) to the bull market party.....but I do agree. Soft Inflation Data Confirms a Powerful Rally Ahead So much for ‘sticky inflation’ https://investorplace.com/hypergrow...flation-data-confirms-a-powerful-rally-ahead/ (BOLD is my opinion OR what I consider important content) "On a month-over-month basis, prices were flat in October. That’s the first time they’ve fallen flat all year long. If this trend of flat month-over-month prices continues, then we should return to 2% inflation by March 2024 – in just four months! Excluding housing costs, the U.S. inflation rate is running at just 1.5% right now. Leading indicators of housing costs suggest that over the next 12 months, the housing inflation rate will collapse toward and potentially below 2%. And at its current pace, the overall inflation rate in the U.S. will hit 2% within four months. The stock market has been on an incredible winning streak over the last two weeks, rallying in 10 of the past 11 trading sessions. And a lot of investors have been worried that this bullishness is just another head fake. But we think today’s soft inflation report confirms that this rally is the real deal – and that it’s just getting started. October’s consumer price index (CPI) report was released this morning, and it was about as positive for stocks as it could’ve been. That’s why the entire market is up about 2% today alone as I write. Stocks are in full-on breakout mode. Why? Because inflation is dying. The Inflation Collapse Is Underway Headline CPI rose just 3.2% in October, below estimates for a 3.3% rise and down significantly from September’s 3.7% inflation rate. On a month-over-month basis, prices were flat in October. That’s the first time they’ve fallen flat all year long. Yes, while lower than expected, a 3.2% inflation rate is still above the Fed’s 2% target. But that’s why the month-over-month rate is so important. Prices were flat in October, and the Cleveland Fed’s current estimates see prices falling flat again in November. If this trend of flat month-over-month prices continues, then we should return to 2% inflation by March 2024 – in just four months! You may be asking, is it really possible for prices to flatline for the next four months? Or for inflation to return to “normal” by early next year? Absolutely. Theonly thing holding up inflation right now are housing costs; and those are in the process of crashing. Housing Inflation Is Rolling Over Excluding shelter, CPI rose just 1.5% in October. In other words, when you exclude things like rent and mortgage payments, inflation is running substantially below the Fed’s 2% target. Outside of the housing market, the Fed has decidedly won its fight against inflation. In other words, all we need to do to win the fight against inflation is to tackle housing inflation. And that’s already happening. Home prices have flatlined as an 8% 30-year mortgage rate crushes homebuying demand. And due to a huge influx of new supply, rents are actually coming down across the country. Fun fact: New apartment construction in the U.S. is running at its highest level since the 1970s. As a result, according to Zillow’s observed rent index, real-time measures of asking rents across the country have been steadily dropping for the past 18 months. Now, because shelter CPI uses actual rents as a proxy for housing inflation (not asking rents), this disinflation is just starting to be reflected in the official shelter CPI number. Of course, since renters usually sign 12-month leases, asking rents lead actual rents by about 12 months. It should be no surprise, then, that the official shelter CPI number follows Zillow’s observed rent index, with about a 12-month lag. True to form, while Zillow’s rent index peaked 18 months ago and has been crashing since, shelter CPI peaked six months ago at 8.2%. It has since come crashing down. Assuming this trend continues to hold true, Shelter CPI will collapse to 2% within the next 12 months. The Final Word Let’s connect the dots here. Excluding housing costs, the U.S. inflation rate is running at just 1.5% right now. Leading indicators of housing costs suggest that over the next 12 months, the housing inflation rate will collapse toward and potentially below 2%. And at its current pace, the overall inflation rate in the U.S. will hit 2% within four months. So much for ‘sticky inflation.’ The truth is this bout of inflation was never sticky. It was driven by unprecedented COVID-era supply chain challenges and money printing. Both anomalies have since been resolved. Supply chains are fully operational once again. And instead of stimulus checks, we’re dealing with double-digit financing rates. For the first time since this wave started, there is a clear and viable pathway to 2% inflation within months. And that, of course, is very bullish for stocks. If we reach 2% inflation within four months, the Fed can start cutting rates, the economy can start to rebuild strength – and stocks can and will soar in 2024. You heard it here first. We’re sprinting into a new bull market, and 2024 will be a fantastic year for stocks. It’s time to get prepared for this emerging bull market." MY COMMENT ABOUT 17 MONTHS LATE......by my standard. But better late than never. I do like the reasoning.....particularly this part: "The truth is this bout of inflation was never sticky. It was driven by unprecedented COVID-era supply chain challenges and money printing. Both anomalies have since been resolved. Supply chains are fully operational once again. And instead of stimulus checks, we’re dealing with double-digit financing rates."
I ended the day with a moderate loss today. Plus....I got beat by the SP500 by 0.44% today. Not as bad as it sounds since I had five of eight stocks up for the day. I was pulled negative today by my three down stocks....NVDA, HON, and AMZN. BUT....NVDA and AMZN have been up nicely lately so they are entitled to fall back once in a while. So.....I am actually pleased with how I ended the day.
Here is the day today. Dow adds more than 150 points to clinch fourth winning day, fueled by cooling inflation data https://www.cnbc.com/2023/11/14/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "Stocks climbed on Wednesday, building on the strong rally from the previous session, on the back of more encouraging inflation data. The S&P 500 advanced 0.16%, closing at 4,502.88, while the Nasdaq Composite inched higher by 0.07% and ended at 14,103.84. The Dow Jones Industrial Average added 163.51 points, or 0.47%, closing at 34,991.21. The yield on the benchmark 10-year U.S. Treasury added 9 basis points to trade at 4.537%. The action comes a day after the rate slipped below the 4.5% threshold. October’s producer price index, which measures wholesale prices, fell by 0.5% to mark its biggest monthly drop since April 2020. Not all of the economic data was positive, however, since retail sales also declined. “Clearly, interest rates are the key driver of this stock market, and the activity today makes sense because PPI was very, very cool, as we had expected,” said Jay Hatfield, founder and CEO of Infrastructure Capital Advisors. “Today, rates are a little bit higher not because of PPI but because retail sales printed a little bit hot relative to expectations.” Wall Street is coming off a strong session in which the S&P 500 and Nasdaq had their best day since April. Those market gains came after the consumer price index remained flat for October, while a Dow Jones consensus expected a slight increase. In corporate news, Target popped nearly 18% on better-than-expected results for the third quarter. Shares of apparel company V.F. Corp added 14% following a JPMorgan upgrade to neutral from underweight. Wall Street also had its eyes on Washington as lawmakers sought to avoid a government shutdown. Late Tuesday, the House of Representatives passed a bill, entailing a “laddered” continuing resolution. The measure will go to the Senate for a vote. If cleared by lawmakers, the legislation goes to President Joe Biden. Without a funding bill, the federal government is slated to shut down at the end of the week." MY COMMENT I love it when a little article contradicts itself. On one hand: "Not all of the economic data was positive, however, since retail sales also declined." On the other hand: "...retail sales printed a little bit hot relative to expectations.” BUT....what matters is the vast majority of the recent economic data is coming in very nicely in terms of inflation and the FED doing another hike. Plus the consumer is still very active. Thank goodness the "experts" are wrong as usual. You can pretty much count on that.
To continue what I said above. We are in a very good situation for the markets over the next 2-4 months.....and....well into 2024, if not the entire year. Yes....there will be the usual rough spots....but....we are entering a golden time for stocks with the way things seem to be happening right now.
Sounds good to me.....since I own five of the seven. One chart shows how the 'Magnificent 7' have dominated the stock market in 2023 https://finance.yahoo.com/news/one-...nated-the-stock-market-in-2023-203250125.html (BOLD is my opinion OR what I consider important content) "The S&P 500 (^GSPC) has never been this top-heavy. The "Magnificent Seven" tech stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) — make up 29% of the S&P 500's market cap. And a chart in Goldman Sachs' 2024 US Equity Outlook shows that's the largest portion of S&P 500 market cap ever dominated by just seven stocks. That perspective helps explain a second chart from Goldman that shows the Magnificent Seven have gained 71% while the other 493 stocks have added just 6%. Given the benchmark's market cap distribution, which allows larger stocks to contribute more to the index's movements, the S&P 500 has added about 19% this year. Research from Goldman Sachs shows the S&P 500 has never been this top-heavy, which is leading to gains in seven stocks driving the major average higher. (Goldman Sachs Global Investment Research) Goldman Sachs' equity research team led by chief US equity strategist David Kostin described the Magnificent Seven's outperformance as a "defining feature of the equity market in 2023." And perhaps rightfully so. Two other charts included in Goldman's outlook show how the Magnificent Seven have outperformed the other 493 stocks in key metrics that typically drive stock performance. From 2013 to 2019, the Magnificent Seven stocks grew at a compound annual growth rate of 15% compared to a 2% growth rate from the rest of the pack. That margin narrowed in the past two years to 18% and 15% respectively, but Goldman sees it widening again in the coming years. From 2023 to 2025, Goldman sees the Magnificent Seven growing at a compound annual growth rate of 11% compared to a 3% rate for the rest of the S&P 500. The Magnificent Seven's net profit margin also outperforms, where its 19% margins are above the 9.8% for the rest of the companies. Not to mention, the long-term earnings per share growth expectations are 17% for the Seven while that number sits at 9% for the other companies in the index. "From a fundamental perspective, in recent years the trajectory of earnings has explained the performance of the Magnificent 7 relative to the rest of the market," Kostin wrote. "The outperformance of the Magnificent 7 this year has coincided with a rebound in margins and earnings that has outpaced the weakness across the rest of the market." He added: "Consensus expects the Magnificent 7 will continue to deliver faster growth than the rest of the index." Two graphs from Goldman Sachs highlight why the Magnificent Seven tech stocks have outperformed the rest of the benchmark index. (Goldman Sachs Investment Research) Goldman sees the path forward for the Magnificent Seven stocks to likely be higher, too, but that doesn't make it the ideal trade for 2024 given the group's rise over the last year. "The 7 stocks have faster expected sales growth, higher margins, a greater re-investment ratio, and stronger balance sheets than the other 493 stocks and trade at a relative valuation in line with recent averages after accounting for expected growth," Kostin wrote. "However, the risk/reward profile of this trade is not especially attractive given elevated expectations."" MY COMMENT This is exactly why I invest the way I do....BIG CAP ICONIC companies. Over the past 20-25 years these have tended to be the big tech stocks. Before that I was doing the same thing by investing in stocks like....Coke, P&G, Colgate, Phillip Morris, etc, etc, etc. My ultimate goal.....be invested in the big cap stocks with the most forward room to run......even if they seem high priced. That is my ultimate....."modern"....form of Value Investing.......stocks that have a good runway for future growth and gains......even if they are not a bargain when I buy them in traditional Value Investing terms.
One of my kids and their spouse just hit a milestone for them.....$400,000....in their brokerage accounts. They do a modified version of my Portfolio Model. Most of their funds are in the SP500....since that is how I got them started in the markets. A few months back I started to transition some of their funds into some individual stocks.....GOOGL, MSFT, NVDA, COST, AAPL and HD. It was time with the amount of money they had in their acccounts. As time goes by I will continue to transition some of their SP500 money into the individual stocks till I have them set up like my Model Portfolio. BUT.....they will continue to invest $1000 each month into the SP500. This is EXTRA money for them since they both have jobs that provide a GOLDEN level pension.
Lately we have been laying low in the auction world. I have followed a few auctions lately but have not bought anything. I think I added two perhaps three paintings in 2023. We also added four pieces of sculpture. Part of the reason we are not buying at the moment is that our art budget for this year is exhausted......and....in January we will be taking possession of a significant sculpture. That will exhaust most of our art budget for 2024.
On the music front...I have been hitting some of the local "Jams" lately. It is kind of nice not to be tied down at the moment with a regular schedule. It has been many decades since I had free time and no schedule. I am in the process of completing a new updated digital musical bio/resume. I should be done in a few weeks. At that point I will...."passively"....start to do a little networking.
We have to pause once in a while. Stocks retreat from rally as Fed doubts creep in https://finance.yahoo.com/news/stoc...m-rally-as-fed-doubts-creep-in-112914336.html (BOLD is my opinion OR what I consider important content) "US stocks pulled back on Thursday after a roaring rally in the middle of the week as investors started to question the idea the Federal Reserve is poised to pivot away from interest rate hikes. The Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) dropped almost 0.3%, while the benchmark S&P 500 (^GSPC) slipped 0.1%. Stocks have climbed as investors became more convinced that cooling inflation is signaling to Fed policymakers that their work is done and they can ease back on tightening. The Dow has risen for four days in a row and closed Wednesday at its highest level since August. Some on Wall Street now wonder whether the market is overdoing its expectations of a shift, given the consumer resilience shown in Wednesday's retail data and Target's (TGT) earnings. Pimco CIO Daniel Ivascyn warned there was "too much enthusiasm" about rate cuts, saying "the inflation problem is far from being solved." Walmart (WMT) reported quarterly earnings that topped estimates and raised its annual outlook, though by slightly less than expected. Its shares fell around 7%. Meanwhile, Macy's (M) stock jumped almost 10% after the department store's profit beat expectations as freight costs improved. The market was also assessing President Joe Biden's high-stakes meeting with China's Xi Jinping, which wrapped Wednesday with the US leader welcoming progress in rebuilding ties between the superpowers. But economic differences remain, and Biden again described Xi as a "dictator." China stocks declined Thursday, with at least one analyst attributing the moves partly to Biden's remark. Walmart slides on cautious outlook Walmart stock is down nearly 7% as investors digested a cautious tone on the economy from Walmart executives. Walmart posted a revenue of $160.8 billion for its third quarter earnings results on Thursday morning. Total revenue is up 5.2% compared to last year and is higher than expectations of $159.13 billion. Its US same-store sales grew 4.7%, higher than the expected 3.35%. Adjusted earnings per share came in $0.01 higher than estimates at $1.53 versus $1.52. Foot traffic grew 3.40%, more than the 1.50% expected. Ticket size is up 1.5%, lower than the expected 2.08%. Despite the earnings beat, Walmart gave soft guidance for the rest of the year. It raised its full-year earnings per share outlook to $6.40 to $6.48, higher than its previous guidance of $6.36 to $6.46 but lower than the expected $6.48. Shares fell 7% in early trading after the report. "Recently, we've experienced a higher degree of variability and weekly performance in between holiday events in the US, including seeing a softening in the back half of October that was off trend to the rest of the quarter," said CFO John Rainey in a call with investors. Uneven sales numbers give the retailer reasons to be more cautious about the state of consumers, Rainey added. Walmart expects sales growth to moderate in Q4 as inflation in grocery prices slows down, but "we're encouraged by the increased traffic and share gains we've seen and expect," said Rainey." MY COMMENT A clear, comprehensive, BEAT for WMT. BUT......it does not matter. At the same time.....the only reason given for the RED today.....is FED speculation. Why? Who knows.
We know this is not a reason for the RED today. Treasury yields fall as investors weigh interest rate outlook https://www.cnbc.com/2023/11/16/us-treasurys-investors-weigh-interest-rate-outlook-.html
I fail to see any RATIONAL reason for the mildly negative markets today. In fact.....I dont even see much of an IRRATIONAL reason. Of course....WMT is responsible for much of the red in the DOW. Lets see how we close today. My "feel" is that we will stay red all day....but since there is really no reason for the red.....we at least have a chance to see some green as the day progresses.
I have a very mild loss in my account today. I would probably be up except for the fact that COST is down by about 2.56% today. I cant find any news to explain the drop....especially considering they hit an all time high yesterday. Probably simply a sympathetic reaction to the WMT comments. Or....could simply be profit taking after the new high.
After looking at one of my kid's accounts and seeing it nicely in the green.......I am assuming...that I am also nicely green at this moment in the day. What I have seen of the retail earnings this week.....Target, Walmart, Macy's, .......they have done well. ALL were basic BEATS. BUT......if the markets refuses to believe it.....well there is nothing anyone can do. As to the CEO commentary......the safest path for any retail CEO facing the Christmas season......downplay it all and look like a hero later.
We are making a run at the green......in the SP500 and the NASDAQ at this very moment in time. Now that the morning profit taking is ending and more rational thinking is taking hold.....we might get a shot at a nice positive day today. After all.....we deserve it. Why? I dont know....we just do.
The markets nicely turned green today by the close.....at least the part I am concerned with the SP500 and the NASDAQ. I also ended in the green with a nice but moderate gain today. I also beat the SP500 today by 0.23%. I had five stocks up and three down. The down were......HD, COST, and AMZN.
Poor COSTCO was punished today for the Walmart commentary. The stock was down by 3.05%. A very foolish reaction by non-long holders of the stock. In my view it is not justified at all since Walmart and COSTCO are very different in their customer base. I would put the COSTCO customer base as solidly middle to upper middle class. Costco is also much more suburban based in their market. their membership system gets them a very different sort of consumer and consumer behavior compared to a store like Walmart. Just a day ago....the stock hit an all time high.
Of course....the FED.....sent out the clowns again today. This is obviously a coordinated attack on the current market rally. Bad news for them....most people no longer care. Fed’s Mester wants ‘much more evidence’ that inflation has been defeated https://www.cnbc.com/2023/11/16/fed...vidence-that-inflation-has-been-defeated.html
Been a busy week for me, so not much time to post. Market wise we have had a pretty good week. Although the index today has just kind of been flat and lingering. The RUT appears to be doing well today though.
As I am typing this I have absolutely no idea of what went on in the markets today. We got up this morning and left the house at 8:00AM to head to the funeral for Austin police officer....Jorge Pastore. It was a very emotional day since we were in the fifth row and were close enough to see all the emotion on stage with the family and others The funeral was held at the main amphitheater of the Circuit Of The Americas.....the F1 complex. The word "HERO" is thrown around lightly some times....but he was a true hero....as were the rest of the swat team there when he was shot. They all entered a house knowing that the person inside was wearing body armor and a helmet and had already shot at other responding police. They went in to try to help hostages that might still be alive. Unfortunately they were already dead. Crowds, law enforcement honor fallen Austin Police Officer Jorge Pastore https://www.kxan.com/news/local/austin/funeral-procession-for-austin-police-officer-jorge-pastore/
I ended the day in the red for my eight stocks. When it is all said and done I will be in the green for my entire account due to the gains of my two funds. I also got beat by the SP500 today by 0.39%. A very moderate loss today in the stocks.
