Stock Market

30,066 Views | 612 Replies | Last: 16 days ago by DiabloWags
oski003
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NASDAQ is getting crushed.

Does anyone see a rebound soon? Netflix just got a 25% haircut on so-so earnings. Tesla is dropping. Peloton had a higher stock price before covid 19, when nobody had heard of them.
Thoughts?
MinotStateBeav
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oski003 said:

NASDAQ is getting crushed.

Does anyone see a rebound soon? Netflix just got a 25% haircut on so-so earnings. Tesla is dropping. Peloton had a higher stock price before covid 19, when nobody had heard of them.
Thoughts?
Peloton looks shady af
https://www.nbcnews.com/business/business-news/peloton-insiders-sold-nearly-500-million-stock-big-drop-rcna12741
DiabloWags
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Growth stocks have been nearly in a "free-fall" ever since the FED became much more hawkish on raising interest rates at their December meeting.

All this, on top of a massive ROTATION out of growth names and into what are known as "value" stocks (primarily cyclicals) who have earnings tied to economic growth. This ROTATION began nearly a year ago as the economy began to open back up. It's why the energy sector has been on fire and the medical diagnostics sector has gotten slaughtered. It's why people like a growth fund manager Cathie Wood and her ARK Invest ETF's are down nearly 60% over the last 12 months.

Growth stocks with little to no earnings, high price to sales multiples and high-cash burn have been under tremendous selling pressure, because when rates go higher their future cash flows decline when those expected cash flows are discounted back to today, given that a higher (discount) rate is used in order to calculate intrinsic value. The lower the discount rate, the higher the value attributed today to future cash flows of tomorrow - - - and vice versa.

The typical "60/40" balanced approach that most financial advisors recommend for their clients IRA's and investment portfolios is also at big RISK here, because not only is the 40% portion of the portfolio getting clobbered (equities) but also the bond portion (60%) given the anticipation of higher rates in an attempt to cool off inflation.

Throw in global tensions over Ukraine and the market is heading nowhere but down until it finds a support level that can offer a decent bounce.

You literally have the stock market facing 3 negatives..... higher rates due to a FED trying to fight inflation, slower economic growth, and global military tensions.

You have an awful lot of "broken" chart patterns out there, especially in the growth names. On Thursday, the market collapsed in the last hour and the SPX broke the early December low. The market literally traded in the same pattern today, with lots of sell pressure in the final hour of trading. Looking at the SPX chart, it would appear that the market will trade down to 4350 on Monday, if not be testing the early October lows around 4279.

For growth stock investors, you are literally praying for the yield curve to either flatten or actually invert. It's the only way that you will see a ROTATION back into growth at the expense of value (cyclical) names. Interestingly enough, the yield on the 10 year came off big time today. It was trading around 1.83 yesterday after trading as high as 1.865 the day before.

Today, it closed at 1.747
Most likely a flight to safety trade.




DiabloWags
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MinotStateBeav said:


Peloton looks shady af
https://www.nbcnews.com/business/business-news/peloton-insiders-sold-nearly-500-million-stock-big-drop-rcna12741

Why?
Because the CEO sold 16% of his shares after the 6 month lock-up period ended after the IPO in April of 2020?
Get real.
oski003
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MinotStateBeav said:

oski003 said:

NASDAQ is getting crushed.

Does anyone see a rebound soon? Netflix just got a 25% haircut on so-so earnings. Tesla is dropping. Peloton had a higher stock price before covid 19, when nobody had heard of them.
Thoughts?
Peloton looks shady af
https://www.nbcnews.com/business/business-news/peloton-insiders-sold-nearly-500-million-stock-big-drop-rcna12741


Selling after a 3x increase doesn't make a company shady. Obviously, I don't know where Peloton stock ends up settling, but I don't feel that this particular sale is shady. I believe it specifically mentions the CEO sold 16% of his stock.
oski003
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DiabloWags said:


Growth stocks have been nearly in a "free-fall" ever since the FED became much more hawkish on raising interest rates at their December meeting.

All this, on top of a massive ROTATION out of growth names and into what are known as "value" stocks (primarily cyclicals) who have earnings tied to economic growth. This ROTATION began nearly a year ago as the economy began to open back up. It's why the energy sector has been on fire and the medical diagnostics sector has gotten slaughtered. It's why people like a growth fund manager Cathie Wood and her ARK Invest ETF's are down nearly 60% over the last 12 months.

Growth stocks with little to no earnings, high price to sales multiples and high-cash burn have been under tremendous selling pressure, because when rates go higher their future cash flows decline when those expected cash flows are discounted back to today, given that a higher (discount) rate is used in order to calculate intrinsic value. The lower the discount rate, the higher the value attributed today to future cash flows of tomorrow - - - and vice versa.

The typical "60/40" balanced approach that most financial advisors recommend for their clients IRA's and investment portfolios is also at big RISK here, because not only is the 40% portion of the portfolio getting clobbered (equities) but also the bond portion (60%) given the anticipation of higher rates in an attempt to cool off inflation.

Throw in global tensions over Ukraine and the market is heading nowhere but down until it finds a support level that can offer a decent bounce.

You literally have the stock market facing 3 negatives..... higher rates due to a FED trying to fight inflation, slower economic growth, and global military tensions.




I bought some Polestar at $11.50. I hope it doesn't get crushed. They have sales but the electric vehicle segment looks like it is correcting too.
dajo9
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It's all just liquidity. If the Fed really gets going trying to raise rates, the 10 year yield is going to go into freefall.
dimitrig
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I have a lot of dry powder and have had it for some time now.

Not looking to get in yet.

Things will get worse before they get better.

DiabloWags
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dajo9 said:

It's all just liquidity. If the Fed really gets going trying to raise rates, the 10 year yield is going to go into freefall.


But you and your economic guru Elizabeth Warren will be happy... because a Recession will decrease the wealth "gap".
dajo9
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DiabloWags said:

dajo9 said:

It's all just liquidity. If the Fed really gets going trying to raise rates, the 10 year yield is going to go into freefall.


But you and your economic guru Elizabeth Warren will be happy... because a Recession will decrease the wealth "gap".



This is a BF2 level post
DiabloWags
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dajo9 said:

DiabloWags said:

dajo9 said:

It's all just liquidity. If the Fed really gets going trying to raise rates, the 10 year yield is going to go into freefall.


But you and your economic guru Elizabeth Warren will be happy... because a Recession will decrease the wealth "gap".



This is a BF2 level post

So was this . . . "Diablowags is a right winger already in the belly of the beast"

- - - Dajo, 1-20-22

DiabloWags
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M2 Money Supply has surged 37% since Covid hit.

Congress handed out nearly $6 Trillion in stimulus.

And the Fed waived their 2% inflation directive back in August 2020, doing everything they could to get back to full employment.

What could go wrong?

Answer: Consumer Prices at nearly a 4 Decade High.
dajo9
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DiabloWags
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"But the average voter doesn't hear this. They hear about major inflation nearly 24/7 on all the major news outlets."

Terribly naive claim.
The average voter doesnt need to hear this.
They see it in the PRICES THEY PAY EVERYDAY!
oski003
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dajo9 said:




The people that want to work can get a job. The problem is that a record number of people don't want to work. Those people aren't counted in the employment numbers. This isn't necessarily the president's fault.
dajo9
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oski003 said:

dajo9 said:




The people that want to work can get a job. The problem is that a record number of people don't want to work. Those people aren't counted in the employment numbers. This isn't necessarily the president's fault.


What do you base your claim on that a record number of people don't want to work? Resignations for a better job is a good thing.
oski003
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dajo9 said:

oski003 said:

dajo9 said:




The people that want to work can get a job. The problem is that a record number of people don't want to work. Those people aren't counted in the employment numbers. This isn't necessarily the president's fault.


What do you base your claim on that a record number of people don't want to work? Resignations for a better job is a good thing.



Your tweets reference lower labor force participation rate. It is at levels from 50+ years ago when Americans typically only had one parent participate. Now, you have families with two parents working and many families with no parents participating in the labor force.

https://fred.stlouisfed.org/series/CIVPART
dajo9
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oski003 said:

dajo9 said:

oski003 said:

dajo9 said:




The people that want to work can get a job. The problem is that a record number of people don't want to work. Those people aren't counted in the employment numbers. This isn't necessarily the president's fault.


What do you base your claim on that a record number of people don't want to work? Resignations for a better job is a good thing.



Your tweets reference lower labor force participation rate. It is at levels from 50+ years ago when Americans typically only had one parent participate. Now, you have families with two parents working and many families with no parents participating in the labor force.

https://fred.stlouisfed.org/series/CIVPART


The data shows Baby Boomers leaving the workforce (retiring). Prime age workforce participation is unchanged from a few years ago when the unemployment rate was at this level.
Cal_79
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Resignations for a better job is one thing. Resignations without having another job in hand is something else.
dimitrig
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Cal_79 said:

Resignations for a better job is one thing. Resignations without having another job in hand is something else.

Van life, baby!



People, especially young people, feel like they are owned by their possessions. They don't want to be married with two kids working to paying a mortgage and two car payments.

They save up some money at a gig job and then live a while before getting another gig job. If they have skills such as in the trades, writing, or tech-related they can do this indefinitely while seeing the world.

A lot of people under 40 don't want to live to work, but instead work to live European-style.

I know Baby Boomers don't get it, but that's okay. They don't have to.


Big C
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dimitrig said:

Cal_79 said:

Resignations for a better job is one thing. Resignations without having another job in hand is something else.

Van life, baby!



People, especially young people, feel like they are owned by their possessions. They don't want to be married with two kids working to paying a mortgage and two car payments.

They save up some money at a gig job and then live a while before getting another gig job. If they have skills such as in the trades, writing, or tech-related they can do this indefinitely while seeing the world.

A lot of people under 40 don't want to live to work, but instead work to live European-style.

I know Baby Boomers don't get it, but that's okay. They don't have to.




All the Baby Boomers have to do is to croak before they spend the entirety of their kids' inheritance.
DiabloWags
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Dow Jones collapses 1,000 points earlier.
Now trying to come back.

S&P 500 trades as low as 4222.
- 175 points and off nearly 4% at the lows.

Guess no one has any exposure.

DiabloWags
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Doesnt look like this thread has any interest due to a lack of skin in the game.
This would explain an awful lot here in OT land.
Speaks volumes in fact.
dajo9
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I think most investors here are buy and hold investors who wisely look the other way when the market is in decline.

I call myself a "buy and hold investor with occasional macroeconomic trades". My general approach is 80/20 equity indexes / long term Treasuries. I buy the long term Treasuries for the negative correlation with equities but they have appreciated in value over the years. If the market tanks and causes a flight to safety driving up the value of my Treasuries then I may sell the Treasurues high at some point and buy equities low. I did that very profitably in March 2020.

I don't recommend my method for everybody (anybody, really) but it works for me. There are lots of ways to make money in the market. One of the hardest ways is active trading.
Unit2Sucks
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dajo9 said:

oski003 said:

dajo9 said:

oski003 said:

dajo9 said:




The people that want to work can get a job. The problem is that a record number of people don't want to work. Those people aren't counted in the employment numbers. This isn't necessarily the president's fault.


What do you base your claim on that a record number of people don't want to work? Resignations for a better job is a good thing.



Your tweets reference lower labor force participation rate. It is at levels from 50+ years ago when Americans typically only had one parent participate. Now, you have families with two parents working and many families with no parents participating in the labor force.

https://fred.stlouisfed.org/series/CIVPART


The data shows Baby Boomers leaving the workforce (retiring). Prime age workforce participation is unchanged from a few years ago when the unemployment rate was at this level.
People underestimate how large the impact on the labor participation rate is from retiring baby boomers. The pace of retirement accelerated during the pandemic. My mother in law was a nurse who might have worked a few more years but retired early in the pandemic. Before the pandemic something like 10k boomers were retiring per day, now I would imagine it's increased. That's 300k+ retirees per month.

Stock market continuing to take a beating. I don't intentionally have a tech heavy portfolio but in part because of my private investments and in large part because I work in tech, I'm a bit apprehensive about where this is all going.
bearister
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Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside
DiabloWags
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No one ever said that the stock market is the ECONOMY.
That's so dumb.

Do you ever think for yourself Bearister, or do you just follow the path of Going for Roses who uses "surrogates" like Tweets and Tik Tok to speak for himself?

Unit2Sucks
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DiabloWags said:

No one ever said that the stock market was the ECONOMY.
That's so dumb.

Do you ever think for yourself Bearister, or do you just follow the path of Going for Roses who uses "surrogates" like Tweets and Tik Tok to speak for himself?


Trump wanted people to believe so when he could take credit for it doing well.

Reich's tweet is also misleading because it ignores foreign ownership. Roughly 40% of US public equities are owned by foreigners. Only 24% of US equities are held in taxable accounts. I wouldn't be surprised if that 24% slice is owned 90% or more by the top 10%, but it's obviously just a small fraction of the total equities market.

DiabloWags
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Unit2Sucks said:

DiabloWags said:

No one ever said that the stock market was the ECONOMY.
That's so dumb.

Do you ever think for yourself Bearister, or do you just follow the path of Going for Roses who uses "surrogates" like Tweets and Tik Tok to speak for himself?


Trump wanted people to believe so when he could take credit for it doing well.

Reich's tweet is also misleading because it ignores foreign ownership. Roughly 40% of US public equities are owned by foreigners.

Agreed.

This thread is also entitled the STOCK MARKET.
Not the Economy.
DiabloWags
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The Energy Sector is once again leading the way with 4% gains in the XOI.
With crude oil up another 2% at 85.30
Chevron (CVX) + $5.25

I can remember back in July of 2020 when this sector only had a 2.5% weighting in the S&P.
bearister
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DiabloWags said:

No one ever said that the stock market is the ECONOMY.
That's so dumb.

Do you ever think for yourself Bearister, or do you just follow the path of Going for Roses who uses "surrogates" like Tweets and Tik Tok to speak for himself?




Whenever you get personal in response to an impersonal post, I know I've drawn blood. You guys are just too high strung.
Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside
DiabloWags
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bearister said:




Whenever you get personal in response to an impersonal post, I know I've drawn blood. You guys are just too high strung.

You live in a very twisted reality.
But your meme's and tweets are pretty comical.
But what would you expect from a history major?


bearister
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DiabloWags said:

bearister said:




Whenever you get personal in response to an impersonal post, I know I've drawn blood. You guys are just too high strung.

You live in a very twisted reality.
But your meme's and tweets are pretty comical.
But what would you expect from a history major?





You are actually too easy.
Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside
oski003
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Stick save today from the fed or head fake?
dajo9
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oski003 said:

Stick save today from the fed or head fake?
The decline in liquidity being telegraphed by the Fed is bumping up against the market notion that the Fed has created over the years that it will not allow stock valuations to significantly come down. The liquidity traders are selling and the "buy the dip" traders are buying. My view is that liquidity tends to win but so far the Fed has not actually reduced liquidity - they have just said the will take away liquidity in the future.
 
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