The Long Term Investor

Some of the....."stuff"....I am seeing today. Not that this speculative opinion based reporting really matters:

How many times will the Fed cut rates? Here's what Wall Street expects for the key stock-market driver in 2024.

https://finance.yahoo.com/news/many-times-fed-cut-rates-005603496.html

Sharp Fed liquidity drain hints at early end for balance sheet runoff

https://finance.yahoo.com/news/sharp-fed-liquidity-drain-hints-110402176.html

A record high is in the cards for US stocks in 2024

https://finance.yahoo.com/news/record-high-cards-us-stocks-010010972.html

 

I have TWO stocks UP today.....COST and HD.

Fine with me....two is much better than zero.

 

This is very good news. the big cap tech companies need to greatly reduce their exposure to China and/or Taiwan.

Nvidia CEO aims to set up a base in Vietnam

https://www.reuters.com/technology/nvidia-ceo-aims-set-up-base-vietnam-2023-12-10/

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

"HANOI, Dec 10 (Reuters) - Nvidia (NVDA.O) wishes to establish a base in Vietnam to develop the country's semiconductor industry as it considers the Vietnamese market an important one, the Vietnamese government said, citing the U.S. chipmaker's chief executive.

In his first visit to the Southeast Asian country, Nvidia's CEO, Jensen Huang, said the company viewed Vietnam as its home and affirmed its plans to set up a centre in the country.

"The base will be for attracting talent from around the world to contribute to the development of Vietnam's semiconductor ecosystem and digitalisation," the Vietnamese government statement cited Huang after his meeting with Prime Minister Pham Minh Chinh.

Nvidia, which has already invested $250 million in Vietnam, is set to discuss cooperation deals on semiconductors with Vietnamese tech companies and authorities in a meeting on Monday, Reuters reported on Friday.

Vietnam, which is home to large chip assembling factories including Intel's (INTC.O) biggest globally, is trying to expand into chip designing and possibly chip-making as trade tensions between the United States and China create opportunities for Vietnam in the industry.

The chipmaker has already partnered with Vietnam's leading tech companies to deploy AI in the cloud, automotive and healthcare industries, a document published by the White House in September showed when Washington upgraded diplomatic relations with Vietnam."

MY COMMENT

A drop in the bucket......but.....a good start. It is just SILLY that our largest tech companies.......the basis for our entire economy....are so massively linked to China and/or Taiwan. Any dispute between China and Taiwan WILL have a massive impact on our economy. Think the pandemic was bad.....it is nothing compared to what would happen to the USA and the world economy......if or when.....China decides to grab Taiwan.

 

As I speculated earlier.....we are seeing some REALITY take hold today. The SP500 is now up by +0.27%......and....the nASDAQ is now down by "only" (-0.15%). We start over from here.

 

Ah yes.....Costco earnings. Perfect timing with the FED dominating all day Wednesday and Thursday.

BUT....what else is new. Earnings have generally been ignored this time around. In fact for many, many quarters now, good or great earnings have been ignored or even resulted in the reporting companies stock dropping.

My suggestion for anyone considering buying COST stock...go out and visit as many of their stores as you can in person. Consider......is there any other retail store that is similar....in terms to what you see?

 

As to the above post.....I like to do a little site investigation on companies if I can. Back when I was considering buying 1000 shares in MSFT in 1990.......I lived about five miles from the MSFT campus in Redmond. Back than it was not gated or restricted in any way.....I dont know if it is today or not.

I visited the campus during the work day and I visited the campus at various times at night. I just wanted to see....is this company for real. What I saw was the final piece in my decision to buy the stock. The campus was booming in the day time....it was also extremely active at night with many employees working late hours.

What really impressed me were the HUGE....MASSIVE....holes in the ground where new buildings were in the process of being built. There were also many new buildings that were just being finished up for occupancy. I had not seen anything like it before......remember this was back in 1990. The growth that was obviously happening was shocking for that era.....at least to me.

 

WELL.....a moderate loss for me today. I ended the same way I was all day long.....down....with two stocks UP....COST and HD.

I also got beat by the SP500 today by 0.78%.

One day of FED week out of the way.

 

In general it was a good day for the markets. ALL the big averages were UP today. For those that are big cap tech heavy like me...it was a loss today.

Stock market news today: Stocks close higher with CPI data, Fed on the horizon

https://finance.yahoo.com/news/stoc...th-cpi-data-fed-on-the-horizon-210040241.html

"Stocks closed higher on Monday following an uneven start to the trading day as investors look ahead to a crucial inflation update and the Federal Reserve's last policy decision of the year.

The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) each ticked up about 0.4% to close at their highest levels since January 2022 and March 2022, respectively.

Tech stocks also moved higher, reversing earlier losses, with the Nasdaq Composite (^IXIC) adding roughly 0.2% — its highest close since April 2022.

The moves come as investors brace for two events that could set the tone for stocks going into 2024: November's reading on consumer inflation and the Fed's interest rate decision.

Jobs data on Friday bolstered hopes the Fed could score a "soft landing" for a US economy burdened with historically high borrowing costs. That helped the gauges close out their sixth straight week of wins, with the S&P 500 and Nasdaq ending at their highest levels since early 2022.

Now the focus is shifting to the Consumer Price Index data due Tuesday, which could put that optimism to the test. Signs of cooling in inflation have cemented expectations that the Fed will put a pause on rate hikes this week, while bets are growing for a rate cut before the summer.

In individual corporates, Macy's (M) shares closed nearly 20% higher after getting a $5.8 billion buyout offer. The store chain’s board is considering the bid to take it private, a source told Yahoo Finance."

MY COMMENT

Not sure why this article says the tech stocks moved higher reversing earlier gains. NONE of my big cap tech stocks were positive today.....and...that includes....AMZN, GOOGL, MSFT, AAPL, and NVDA.

In any event....I like how the market did today. In the face of a poor open the markets recovered and went positive. That is a very good sign for the longer term and the young bull market.

We move....ONWARD AND UPWARD....to the CPI data tomorrow.




Full screen

 

I like this little opinion.

Wall Street bull makes case for S&P 500 to hit 5,200 in 2024

https://finance.yahoo.com/news/wall...for-sp-500-to-hit-5200-in-2024-163129117.html

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

"Another Wall Street strategist sees record highs for the S&P 500 in 2024.

Oppenheimer chief investment strategist John Stoltzfus projects the S&P 500 (^GSPC) will close next year at 5,200, matching Fundstrat's Tom Lee for the highest target tracked by Yahoo Finance. The call reflects about 13% growth for the benchmark average over next year from Friday's close.

"The big story here from what we can see is it just looks like the US economy is bigger than the negative pitchbook of the bears," Stoltzfus told Yahoo Finance in a nod to economic data that has surprised to the upside throughout 2023.

Stoltzfus noted that Oppenheimer sees 2024 as a "year of transition" from a period of restrictive monetary policy by the Fed to a period of the central bank easing its stance.

"Resilience" will once again be the key word in 2024, he said. Stoltzfus doesn't see economic growth turning negative despite a slowdown and sees interest rate cuts bringing relief to markets in the second half of the year.

Positive trends seen in earnings over the last two quarters has Stoltzfus feeling confident corporates can hold up in 2024, too. He projects corporate earnings to grow by 9% in 2024 to earnings per share of $240.

"The fact eight of eleven sectors are showing positive earnings growth, with four of them — Communications Services, Information Technology, Consumer Discretionary and Financials — rising double digits, that's a wake up call," Stoltzfus said. "This is remarkable."

He sees many of the 2023 winners leading in 2024 again too. Oppenheimer has Information Technology (XLK) and Consumer Discretionary (XLY) rated as Overweight headed into 2024, along with Industrials (XLI).

Technology has been the leading sector in 2023, soaring 50%, while Consumer Discretionary has been the third-strongest sector, rising 34.1%.

"What we're really looking for here is a broadening of the rally," Stoltzfus said. "But it will likely not be at the expense of technology because technology remains the core driver ... Technology today is in a position parallel to where the automobile was in the early 20th century. "

Notably, Stoltzfus described recent market moves projecting Fed rate cuts as soon as March as "too rosy." While noting the Fed wants to avoid tipping the economy into recession, he believes it will be cautious in ensuring inflation's downward trend continues.

He sees rate cuts coming in the second half of next year and maybe even in the fourth quarter if inflation proves to be "stickier."

"We're no longer in a crisis situation," Stoltzfus said. "This is not to say that the Fed would not cut rates if we go into crisis situation or if it feels that the economy is falling into recession. They might very well cut rates.

"But we don't think that's the case. We think that the consumer and business remain remarkably resilient. Labor remains resilient even though the jobs numbers are beginning to come down.""

MY VIEW

I agree. I see rate hikes not happening till the forth quarter of 2024 at the earliest. I do believe the economy will hold up well and will......"pretty much".........( Texas term of art)......be the same next year as this year.

I also believe that earnings will come in at least as good as this year....at the minimum.

I also see the market leaders as the same next year as this year.....even if some of the HUGE gains this year will moderate next year when it comes to specific companies. The economy will be operating on all cylinders as it will be totally recovered from the pandemic impact.

Just to go way out there....my SP500 prediction for next year at year end.....5500.

 

I never own arilines so I dont know. Perhaps someone on here knows something about them.

I never buy car companies or airlines as well as some other categories of stocks....banks, insurance companies, etc, etc. They are just way too erratic...boom and bust...for my taste.

 

The OBVIOUS story of the day.

Inflation slowed to a 3.1% annual rate in November

https://www.cnbc.com/2023/12/12/cpi-inflation-report-november-2023.html

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

"Key Points

• The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago.
• Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago.
• A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%.

Consumer prices rose 0.1% month over month in November

Prices across a broad range of goods and services edged higher in November but were mostly in line with expectations, further easing pressure on the Federal Reserve.

The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%.

While the monthly rate indicated a pickup from the flat CPI reading in October, the annual rate showed another decline after hitting 3.2% a month earlier.

Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago. Both numbers were in line with estimates and little changed from October.

The November numbers are still well above the Fed’s 2% target, though showing continuing progress. Policymakers focus more on core inflation as a signal for longer-term trends.

The report was “somewhat in line, although, I suppose not as good as what some might have hoped that we would start to see more deceleration on a month over month basis,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. The Fed “will probably talk about continued disinflation being good news.”

Wall Street opened little changed following the news, with major indexes slightly negative in early trading. Treasury yields edged higher.

A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%, boosted by a 0.4% jump in food away from home. On an annual basis, food rose 2.9% while energy was down 5.4%.

Shelter prices, which make up about one-third of the CPI weighting, increased 0.4% on the month and were up 6.5% on a 12-month basis. However, the annual rate has showed a steady decline since peaking in early 2023. Lodging away from home fell 0.9%.

“Falling inflation does not mean that prices are falling. In fact, prices for just about everything are still higher than they were before the pandemic,” said Lisa Sturtevant, chief economist at Bright MLS. “Housing costs, in particular, are weighing on many individuals and families.”

After declining for five straight months, used vehicle prices rose 1.6% in November, and vehicle insurance increased 1% and was up 19.2% year over year. Medical care costs rose 0.6% while apparel fell 1.3%.

Worker paychecks increased on an inflation-adjusted basis, with real average hourly earnings rising 0.2% on the month and 0.8% from a year ago, the Labor Department said in a separate release.

The release comes as the Fed begins its two-day policy meeting, during which it is expected to hold interest rates steady for the third consecutive time.

However, markets are looking more closely at what the Fed signals for the future.

After hiking rates 11 times since March 2022, policymakers are expected to signal that the policy tightening is over, with the next step likely to be cuts at a still-to-be-determined pace. Following the release, futures pricing continued to indicate virtually no chance of any further rate increases, with the first cut likely to happen in May.

In fact, futures markets indicate the Fed will ease aggressively in 2024, cutting rates up to 1.25 percentage points by the end of the year. Respondents to the CNBC Fed Survey, though, think the central bank will move at a more measured pace, cutting about three times, assuming quarter percentage point increments."

MY COMMENT

I would not bet the farm on rate cuts......not because of the inflation data....but because the FED has made it extremely clear that they are not intending to cut any time soon. As long as they stick with their DELUSIONAL 2% inflation target....we will be lucky to see any rate cuts in 2024. Of course the media and others are constantly trying to make the rate cuts a big issue which can than be used for breathless headlines and made up drama.

I find it interesting that the data comes in perfectly in line with expectations.....and of course....the markets are mildly unhappy......they have to whine about it and of course want better, better, better.

 

I have been waiting for the initial whining to get over with today to see what the markets really think. I now see that the DOW and NASDAQ are green and the SP500 is just about there too.

I expect it will be a green close today across the big averages.....just my "feeling".

 

As to the impact of the CPI data.....not much.

Treasury yields are flat Tuesday as Fed rate decision looms

https://www.cnbc.com/2023/12/12/us-treasurys-investors-look-to-fresh-inflation-data.html

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

"The 10-year U.S. Treasury yield was little changed on Tuesday as investors parsed the latest inflation numbers with the Federal Reserve’s last interest rate decision of the year looming.

The yield on the 10-year Treasury was lower by less than 1 basis point at 4.23%, trading near the key 4.2% level. The 2-year Treasury yield inched around 1 basis point lower lower to 4.72%.

Yields and prices move in opposite directions. One basis point equals 0.01"

MY COMMENT

As I always say....yes....the Ten Year yield continues to sit near the extreme low end of the historic range. But the spoiled market whining crybabies.....want their zero interest money. Not going to happen.

 

OK....now we have all the big averages in the green. Time to just sit and wait out the rest of the day. No need to watch anything or do anything. The long term will take care of itself.

Once we get the FED out of the way we will be free of them for.......a whole 5.5 weeks. I am so tired of these morons constantly dominating the news and the markets. AND....in-between the meetings they go out in force and constantly try to TRASH the markets.....as if that will do anything for inflation.