Stock Market

75,577 Views | 820 Replies | Last: 19 days ago by DiabloWags
dajo9
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Unit2Sucks said:

DiabloWags said:



Jamie Dimon says that the "consumer is in good shape"


The media is all doom and gloom, but are people really suffering compared to past periods? Doesn't seem that way to me.

As much as Republicans want to paint this economy as poor for individuals, it isn't clear that people are actually doing poorly. Sure, gas prices are tough for working class and poor people, but we are at full employment (3.6% unemployment, 372k jobs added in June) and personal balance sheets are stronger now than before the pandemic. People are better positioned to weather a minor recession than they have been in any recession in decades (possibly ever).
The media has completely blown out of proportion the negatives of the economy. So much so that the public thinks jobs have been lost during the Biden Presidency. The media was also overly negative during the Obama Presidency - particular his second term when the economy was strong and trends developed that lasted until Covid. The media has a narrative that Republicans are good for the economy and Democrats are in disarray. Media people tend to be wealthy so Republicans are definitely good for their personal pocketbooks.

Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?
DiabloWags
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Unit2Sucks said:

DiabloWags said:



Jamie Dimon says that the "consumer is in good shape"


The media is all doom and gloom, but are people really suffering compared to past periods? Doesn't seem that way to me.

As much as Republicans want to paint this economy as poor for individuals, it isn't clear that people are actually doing poorly. Sure, gas prices are tough for working class and poor people, but we are at full employment (3.6% unemployment, 372k jobs added in June) and personal balance sheets are stronger now than before the pandemic. People are better positioned to weather a minor recession than they have been in any recession in decades (possibly ever).

While personal balance sheets may be in a stronger position, there is no doubt that this economy is crushing the middle and lower class. The Michigan Consumer Sentiment gauge hit 50 in June. That's a record low. And the PCE (which is what the Fed watches) looks like it's about to go negative for June. The next data release will be July 29th.

Anyone that goes out and does actual grocery shopping knows this all too well. People are increasing their charge card debt. They're gonna try and have some sense of "normalcy" for a family summer vacation no matter what. So they're gonna incur debt. Meanwhile, the poor working class doesnt have the luxury of working from home, so they and their commutes to job sites suffer from the higher fuel prices and they suffer much more on a relative basis.

In my opinion, it's far too early to speculate as to whether or not this will be a "minor" recession.
The employment data is all in the rear view mirror.

The odds of the FED screwing this tightening cycle up are massive given that their forecasts have been dog-crap and they've lliterally lost all credibility. And I repeat, they've never raised rates before while simultaneously trying to trim their balance sheet. Powell has even admitted that they have very little experience with the IMPACT of such a policy operation. - - - And as I've mentioned here on numerous occasions, the National Financial Conditions Index (NFCI) is at a level where the FED has traditionally eased, not tightened.

Given how late to the inflation game the FED has been, it's quite possible that they keep rates "elevated" once they get to what they believe the "neutral" rate is. That means that an easing cycle is a long ways off and there will be more pain that lasts for longer.



DiabloWags
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dajo9 said:




Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?

You forgot about the part where 50% of Americans have money directly invested in the stock market and their retirement accounts have lost Trillions since the beginning of the year.

And again, even though nominal wages and salaries were up 4.5% (the fastest increase since 1983) as of end of 2021, all sectors of the economy have seen below-trend real wage growth.

The outlook for real wage growth depends on several factors including: (i) the tightness of labor markets, which should lead to more upward pressure on nominal wages than on prices; (ii) whether employers adjust nominal wage growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular whether it persists well above the historical expectation of 2 percent annual growth.

I know that the majority of your posts are politically motivated.
You want to "talk up" the pluses during the Biden economy.
You dont want to see the Democrats get hammered in mid-terms.
I get it.

But the fact of the matter is that people vote with their pocket books.
Just ask a Republican by the name of George H.W. Bush.
calbear93
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DiabloWags said:

dajo9 said:




Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?

You forgot about the part where 50% of Americans have money directly invested in the stock market and their retirement accounts have lost Trillions since the beginning of the year.

And again, even though nominal wages and salaries were up 4.5% (the fastest increase since 1983) as of end of 2021, all sectors of the economy have seen below-trend real wage growth.

The outlook for real wage growth depends on several factors including: (i) the tightness of labor markets, which should lead to more upward pressure on nominal wages than on prices; (ii) whether employers adjust nominal wage growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular whether it persists well above the historical expectation of 2 percent annual growth.

I know that the majority of your posts are politically motivated.
But the fact of the matter is that people vote with their pocket books.
Just ask a Republican by the name of George H.W. Bush.

In my humble opinion, I think you are absolutely right about this.

One thing I noticed is that those who have corporate / professional investing experience have learned to look around the corner and be informed from meaningful indicators and not make claims based on lagging data.

Lack of experience or actual insight is what made amateurs claim inflation was transitory when those who were seeing actual data were seeing supply chain constraints as early as beginning of 2021 and my friends were telling me that they had never seen demand outpace supply at such high rate with astronomical lead time in their extensive executive leadership experience. Political blindness or lack of practical experience is what causes some poorly informed people to think that solution to inflation is giving more money to people to continue to generate more demand. Demand is easy to scale up or down, but supply is tough to increase and housing inflation is very sticky.

People like you and me will come out of this just fine. I have excess cash like most do when there is this much uncertainty. As I noted in February 2021, I rotated out of high growth in early 2021 into cyclical like energy, and have advisors who guide me to invest in products that index S&P 500 while providing 20% downside protection that can now be rolled over again. People at our age generally have no mortgage or any other debt and are not subject to the same pain from increased rate. My portfolio has taken a hit but came out better than most because people like you and me have expensive advisors and have access to actual experts in our network.

However, most middle class and lower class do not have the same type of buffer. I think the average savings and net assets for most Americans is not in 8 or 9 figures but most likely below 6 figures. Not a lot of buffer with less than $100K or $50K in cash to handle inflation or the likely recession. Their meager retirement funds are likely even less sufficient with the market hit.

And there will be an increase in unemployment. Without it, inflation will not come under control. And just like I have been hearing since 2020 how constraint supply was, I am hearing that not only tech (which is already obvious) but industrial companies are reducing headcount or implementing hiring freeze. What those with experience know is that when there is uncertainty, the first action is restructuring or reducing headcount since outsourcing or hiring contractor provides more flexibility to scale down or up. Yes, there is still a lot of attrition and Gen Z still has not caught up to what will soon be reduced leverage. But change in leverage is coming.

By the way, I think George H.W. Bush and Bill Clinton were actually very responsible. They increased taxes and cut spending to bring the budget deficit under control. We no longer have responsible politicians on either side, and it's all about cutting taxes and spending more. With higher rates, strong dollar, and the corresponding hit on earnings and cost of FX translation for global companies, more pain will come. And all politicians and tribalist on both sides do is try to spin these things for political points. Shameful.
DiabloWags
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calbear93 said:




Lack of experience or actual insight is what made amateurs claim inflation was transitory when those who were seeing actual data were seeing supply chain constraints as early as beginning of 2021 and my friends were telling me that they had never seen demand outpace supply at such high rate with astronomical lead time in their extensive executive leadership experience. Political blindness or lack of practical experience is what causes some poorly informed people to think that solution to inflation is giving more money to people to continue to generate more demand. Demand is easy to scale up or down, but supply is tough to increase and housing inflation is very sticky.


Very well said.

It's terribly mind-boggling to me that people in the Administration like Brian Deese (Director of Biden's National Economic Council) were oblivious to the double and triple booking of orders and how this was driving inflation, never mind pushing the fiscal accelerator pedal to the floor while there were massive supply-chain issues.

I mean, you dont have to be a rocket-scientist to figure out that two fiscal stimulus packages that were a historic record in size, were the equivalent of 125% of the GDP of California, the world's 5th largest economy.

Deese was interviewed by Margaret Brennan on Face the Nation last month and Brennan is an excellent interviewer.

She's not just another pretty face. She's very knowledgeable when it comes to the fundamentals of economics and current economic factors impacting our economy. You can tell that she's very well informed and prepared. She operates from a solid knowledge base. She's not faking it. She asks the kinds of specific "hardball" questions that you or I would ask, and she doesnt let her "guest" off the hook. She made Deese look like an amateur and the typical Washington DC policy "wonk" that he is.

When Deese mentioned that they talk to a lot of CEO and CFO's and how they were preparing to transition to a new economic paradigm (life after Covid), Brennan pounced back exclaiming, "They're preparing for a RECESSION that's what they're preparing for!"




Unit2Sucks
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calbear93 said:

DiabloWags said:

dajo9 said:




Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?

You forgot about the part where 50% of Americans have money directly invested in the stock market and their retirement accounts have lost Trillions since the beginning of the year.

And again, even though nominal wages and salaries were up 4.5% (the fastest increase since 1983) as of end of 2021, all sectors of the economy have seen below-trend real wage growth.

The outlook for real wage growth depends on several factors including: (i) the tightness of labor markets, which should lead to more upward pressure on nominal wages than on prices; (ii) whether employers adjust nominal wage growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular whether it persists well above the historical expectation of 2 percent annual growth.

I know that the majority of your posts are politically motivated.
But the fact of the matter is that people vote with their pocket books.
Just ask a Republican by the name of George H.W. Bush.

In my humble opinion, I think you are absolutely right about this.

One thing I noticed is that those who have corporate / professional investing experience have learned to look around the corner and be informed from meaningful indicators and not make claims based on lagging data.

Lack of experience or actual insight is what made amateurs claim inflation was transitory when those who were seeing actual data were seeing supply chain constraints as early as beginning of 2021 and my friends were telling me that they had never seen demand outpace supply at such high rate with astronomical lead time in their extensive executive leadership experience. Political blindness or lack of practical experience is what causes some poorly informed people to think that solution to inflation is giving more money to people to continue to generate more demand. Demand is easy to scale up or down, but supply is tough to increase and housing inflation is very sticky.

People like you and me will come out of this just fine. I have excess cash like most do when there is this much uncertainty. As I noted in February 2021, I rotated out of high growth in early 2021 into cyclical like energy, and have advisors who guide me to invest in products that index S&P 500 while providing 20% downside protection that can now be rolled over again. People at our age generally have no mortgage or any other debt and are not subject to the same pain from increased rate. My portfolio has taken a hit but came out better than most because people like you and me have expensive advisors and have access to actual experts in our network.

However, most middle class and lower class do not have the same type of buffer. I think the average savings and net assets for most Americans is not in 8 or 9 figures but most likely below 6 figures. Not a lot of buffer with less than $100K or $50K in cash to handle inflation or the likely recession. Their meager retirement funds are likely even less sufficient with the market hit.

And there will be an increase in unemployment. Without it, inflation will not come under control. And just like I have been hearing since 2020 how constraint supply was, I am hearing that not only tech (which is already obvious) but industrial companies are reducing headcount or implementing hiring freeze. What those with experience know is that when there is uncertainty, the first action is restructuring or reducing headcount since outsourcing or hiring contractor provides more flexibility to scale down or up. Yes, there is still a lot of attrition and Gen Z still has not caught up to what will soon be reduced leverage. But change in leverage is coming.

By the way, I think George H.W. Bush and Bill Clinton were actually very responsible. They increased taxes and cut spending to bring the budget deficit under control. We no longer have responsible politicians on either side, and it's all about cutting taxes and spending more. With higher rates, strong dollar, and the corresponding hit on earnings and cost of FX translation for global companies, more pain will come. And all politicians and trialist on both sides do is try to spin these things for political points. Shameful.
I don't disagree with anything you've said. Not sure it's a hot take to assume that "the average" is lower than 8 or 9 figures. We know it's much lower, but I think you weren't really anchoring around that.

Where I would quibble a bit more is with the bolded language. There has been a pretty big change over the last decade or so in supply chain management and logistics. Businesses are lighter on inventory in favor of just in time management. That has had somewhat of a multiplier effect on the supply shock we experienced from COVID. So while it's true that people had never seen demand outpace supply, part of that is because inventories were lower than they would have been in prior supply shocks. Companies simply weren't prepared to deal with this sort of situation and the markets were rewarding these businesses for capital efficiency.

For an example of a big company who somewhat successfully grappled with this, look at how Toyota weathered the chip shortage. I think they've taken other steps to further enable them to continue in the face of future supply chain shocks.
DiabloWags
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Unit2Sucks said:



For an example of a big company who somewhat successfully grappled with this, look at how Toyota weathered the chip shortage. I think they've taken other steps to further enable them to continue in the face of future supply chain shocks.
Interesting article regarding Toyota drilling down past just Tier 1 or Tier 2 suppliers, but an article that is in fact dated April 2021. - - - But let's be honest here, Toyota has been forced to shut down numerous assembly plants due to the chip shortage and their new Toyota Tundra truck has seen production slowed at their assembly plant in Texas to the point of consolidating production from two shifts to one shift. This article is from Feb. 2022.

Lack of Chips Costing Toyota New Tundra Production - The Detroit Bureau


calbear93
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Unit2Sucks said:

calbear93 said:

DiabloWags said:

dajo9 said:




Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?

You forgot about the part where 50% of Americans have money directly invested in the stock market and their retirement accounts have lost Trillions since the beginning of the year.

And again, even though nominal wages and salaries were up 4.5% (the fastest increase since 1983) as of end of 2021, all sectors of the economy have seen below-trend real wage growth.

The outlook for real wage growth depends on several factors including: (i) the tightness of labor markets, which should lead to more upward pressure on nominal wages than on prices; (ii) whether employers adjust nominal wage growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular whether it persists well above the historical expectation of 2 percent annual growth.

I know that the majority of your posts are politically motivated.
But the fact of the matter is that people vote with their pocket books.
Just ask a Republican by the name of George H.W. Bush.

In my humble opinion, I think you are absolutely right about this.

One thing I noticed is that those who have corporate / professional investing experience have learned to look around the corner and be informed from meaningful indicators and not make claims based on lagging data.

Lack of experience or actual insight is what made amateurs claim inflation was transitory when those who were seeing actual data were seeing supply chain constraints as early as beginning of 2021 and my friends were telling me that they had never seen demand outpace supply at such high rate with astronomical lead time in their extensive executive leadership experience. Political blindness or lack of practical experience is what causes some poorly informed people to think that solution to inflation is giving more money to people to continue to generate more demand. Demand is easy to scale up or down, but supply is tough to increase and housing inflation is very sticky.

People like you and me will come out of this just fine. I have excess cash like most do when there is this much uncertainty. As I noted in February 2021, I rotated out of high growth in early 2021 into cyclical like energy, and have advisors who guide me to invest in products that index S&P 500 while providing 20% downside protection that can now be rolled over again. People at our age generally have no mortgage or any other debt and are not subject to the same pain from increased rate. My portfolio has taken a hit but came out better than most because people like you and me have expensive advisors and have access to actual experts in our network.

However, most middle class and lower class do not have the same type of buffer. I think the average savings and net assets for most Americans is not in 8 or 9 figures but most likely below 6 figures. Not a lot of buffer with less than $100K or $50K in cash to handle inflation or the likely recession. Their meager retirement funds are likely even less sufficient with the market hit.

And there will be an increase in unemployment. Without it, inflation will not come under control. And just like I have been hearing since 2020 how constraint supply was, I am hearing that not only tech (which is already obvious) but industrial companies are reducing headcount or implementing hiring freeze. What those with experience know is that when there is uncertainty, the first action is restructuring or reducing headcount since outsourcing or hiring contractor provides more flexibility to scale down or up. Yes, there is still a lot of attrition and Gen Z still has not caught up to what will soon be reduced leverage. But change in leverage is coming.

By the way, I think George H.W. Bush and Bill Clinton were actually very responsible. They increased taxes and cut spending to bring the budget deficit under control. We no longer have responsible politicians on either side, and it's all about cutting taxes and spending more. With higher rates, strong dollar, and the corresponding hit on earnings and cost of FX translation for global companies, more pain will come. And all politicians and trialist on both sides do is try to spin these things for political points. Shameful.
I don't disagree with anything you've said. Not sure it's a hot take to assume that "the average" is lower than 8 or 9 figures. We know it's much lower, but I think you weren't really anchoring around that.

Where I would quibble a bit more is with the bolded language. There has been a pretty big change over the last decade or so in supply chain management and logistics. Businesses are lighter on inventory in favor of just in time management. That has had somewhat of a multiplier effect on the supply shock we experienced from COVID. So while it's true that people had never seen demand outpace supply, part of that is because inventories were lower than they would have been in prior supply shocks. Companies simply weren't prepared to deal with this sort of situation and the markets were rewarding these businesses for capital efficiency.

For an example of a big company who somewhat successfully grappled with this, look at how Toyota weathered the chip shortage. I think they've taken other steps to further enable them to continue in the face of future supply chain shocks.
I absolutely agree with you. In fact, it was some of the Toyota system that some companies adopted in doing real time inventory and focusing on working capital turnover rate that provided less flexibility for once in a generation event. There were multiple factors in place, including reduced safety stock and inventory level that were designed to increase better use of capital, reduction in manufacturing from mandated shutdown and reduced workforce, and continuing reduced labor from illness, fear, etc. on manufacture and transportation. As you know, increasing supply in those situation is not like turning on a light switch, and there is also a lot training involved with new workforce. Funny thing is that while I love the Toyota system (Danaher's business system models the Toyota system), the lean manufacturing and consolidation of certain key manufacturing were part of the issue that provided less buffer for what happened with manufacturing. And for most finished goods, you can have access to 95% of the needed components, but if the other 5% are from sole source that have limited supply, the entire production is impacted. When there is so much dislocation between supply that was not ready to ramp up and built up demand from the shutdown and artificially generated demand from fiscal and monetary policies, there was going to be a significant price increase that was going to be sticky.

My point on the 8/9 figure net assets is that people like most of us retirees who have experienced professional success can weather this downturn. The middle class do not have the same buffer and have meager savings and overall net assets. They are the ones who will be hurt by the upcoming recession, and not those on these boards who are pontificating and claiming that there is no pain involved. So, my point is that no one should spin this for political points because there will be real pain for those least able to bear this, and any government assistance will only extend the pain. Demand and employment rate has to go down because high inflation is one of the most destructive elements for middle class.
DiabloWags
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calbear93 said:


My point on the 8/9 figure net assets is that people like most of us retirees who have experienced professional success can weather this downturn. The middle class do not have the same buffer and have meager savings and overall net assets. They are the ones who will be hurt by the upcoming recession, and not those on these boards who are pontificating and claiming that there is no pain involved. So, my point is that no one should spin this for political points because there will be real pain for those least able to bear this, and any government assistance will only extend the pain. Demand and employment rate has to go down because high inflation is one of the most destructive elements for middle class.

All true.

That's why I think it's terribly disingenuous for people to "spin" this politically, claiming that households are in much better shape to withstand the pain of a Recession. While partially true, lets not kid ourselves that this is just ONE SNAPSHOT IN TIME of a household balance sheet. Things can turn pretty quickly, as I think they eventually will.

Biden's press secretary Karine Jean-Pierre has succumbed to this kind of spin and it's terribly "tone-deaf" to the people in the middle class and lower class who get absolutely HAMMERED by inflation.

I know that there are posters here that have their fingers crossed that Biden and the Dems dont get hammered in the upcoming midterms. But let's be real. The people that felt that inflation was only transitory are now fighting for their credibility. Like it or not, the FED is driving this train and no amount of "spin" is gonna paint things better than they are four months from now.

dimitrig
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Unit2Sucks said:

DiabloWags said:



Jamie Dimon says that the "consumer is in good shape"


The media is all doom and gloom, but are people really suffering compared to past periods? Doesn't seem that way to me.

As much as Republicans want to paint this economy as poor for individuals, it isn't clear that people are actually doing poorly. Sure, gas prices are tough for working class and poor people, but we are at full employment (3.6% unemployment, 372k jobs added in June) and personal balance sheets are stronger now than before the pandemic. People are better positioned to weather a minor recession than they have been in any recession in decades (possibly ever).

Of course they aren't.

Anyone who owns a home is sitting on a lot of equity and salaries have risen.

I think it is less about where we are right now and more about where we are headed.

Hiring is slowing, layoffs are starting, and the housing market is poised to cool off with interest rates high.

Add to that supply chain issues that are impacting just about everything and it is clear the near future won't be very rosy.

That's without even considering inflation.

dajo9
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DiabloWags said:

dajo9 said:




Here is another insight completely ignored by the media. Every household mortgage in existence a year ago is now valued about ~6% lower. Debt payments are the same but the average household has seen rising nominal wages. That is good for the middle class and bad for banks. Guess what that means in terms of who gets their message out?

You forgot about the part where 50% of Americans have money directly invested in the stock market and their retirement accounts have lost Trillions since the beginning of the year.

And again, even though nominal wages and salaries were up 4.5% (the fastest increase since 1983) as of end of 2021, all sectors of the economy have seen below-trend real wage growth.

The outlook for real wage growth depends on several factors including: (i) the tightness of labor markets, which should lead to more upward pressure on nominal wages than on prices; (ii) whether employers adjust nominal wage growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular whether it persists well above the historical expectation of 2 percent annual growth.

I know that the majority of your posts are politically motivated.
You want to "talk up" the pluses during the Biden economy.
You dont want to see the Democrats get hammered in mid-terms.
I get it.

But the fact of the matter is that people vote with their pocket books.
Just ask a Republican by the name of George H.W. Bush.



My point was that there are pluses and minuses to this spike in inflation and the media only covers (and hypes up) the negatives. So I brought up some pluses. You returning us to the media narrative is not informative.

The hard data has consistently shown that households have weathered the past year decently. People have self-reported they are doing OK. Bank data shows bank balances are still up across the board. People are still out spending money and jobs are still plentiful (I just lost an analyst to another job last week).

The stimulus related inflation seems to have peaked in March with a Putin gas kicker through June. In March, Fed policy was still accommodative. I mention that just to point out how useless they have been through this whole thing. Now they are late and too strong and will probably be crushing the economy causing far more harm to the average household than the inflation caused (if you believe in hard data rather than rhetoric).
OdontoBear66
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dimitrig said:

Unit2Sucks said:

DiabloWags said:



Jamie Dimon says that the "consumer is in good shape"


The media is all doom and gloom, but are people really suffering compared to past periods? Doesn't seem that way to me.

As much as Republicans want to paint this economy as poor for individuals, it isn't clear that people are actually doing poorly. Sure, gas prices are tough for working class and poor people, but we are at full employment (3.6% unemployment, 372k jobs added in June) and personal balance sheets are stronger now than before the pandemic. People are better positioned to weather a minor recession than they have been in any recession in decades (possibly ever).

Of course they aren't.

Anyone who owns a home is sitting on a lot of equity and salaries have risen.

I think it is less about where we are right now and more about where we are headed.

Hiring is slowing, layoffs are starting, and the housing market is poised to cool off with interest rates high.

Add to that supply chain issues that are impacting just about everything and it is clear the near future won't be very rosy.

That's without even considering inflation.


And what are all of these factors suggesting to you? Where are we headed with what our current status implies?

Agreed the only focus should not be inflation. We may get back doored here.
wifeisafurd
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So what is the consensus of the latest stock market drop?

Data released a couple days ago showed: Housing starts fell sharply in May, while jobless claims ticked up. Meanwhile, layoff announcements have become more frequent, at a time when certain sectors still face labor shortages seems to be diminishing. And the supply chain issues that were supposed to go away from my personal perspective have not (e.g., real estate construction), and everyone I know is still complaining about them (this is antidotal).

I'm not sure if the FED has created a recession .... yet, but that the FED has created a lot to stock and bond volatility.Elsewhere, there are recessions going on as global stocks are tanking generally. The real estate market is and will be taking a hit. Things are clearly bearish, and I'm to seeing evidence of a soft landing. I can see the potential for stagflation. Also as Diablo suggests, with volatility comes opportunities.

From a macro policy standpoint, it is all on the back of the FED, as there continues to be political stalemate. My own views are that Mancin probably has it more right on that raising taxes and spending now impacts recession and inflation pressures. We are going to have to pay for the necessary massive spending to counteract the pandemic, and the pandemic "shut down " of business. Pandemics do impact economies. Just my read of the tea leaves.

DiabloWags
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After the Bank of Canada raised rates by one full point, there began speculation this week that the Fed would act just as aggressively . But that possibilty faded by the end of the week with Fed Funds futures pointing to another 0.75 basis point hike.

Powell has admitted to now focusing on headline indlation numbers, and not just the core rate. That means they will continue to hike rates. The futures market is pricing in 3.5% to 3.75% by December.

What I think some are missing here is that Corporate America wont be able to continue to pass on their higher costs to consumers. As a result, a squeeze in margins is in the making which will bring in a profits recession.

Containing bloated costs means cutting payrolls, and this will help lead to a Recession starting in the current quarter.

The consensus EPS for the S&P is around $230.

Thats probably still way too high. Companies got way out of wack hiring people to handle the now deflating "stay at home" bubble.

Earnings are gonna take a much bigger hit than people are prepared for. And the analyst community continues to be far too optimistic. So are the posters here that havent figured out that the consumer will be in far worse shape in the second half of this year. Wages are already slowing, unemployment claims have been rising sharply, and real net worth has taken a hit from bear markets in stocks and bonds.

I think we'll be lucky to see $210 - $215 EPS.

BearForce2
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Paul Pelosi purchased on June 17, 20,000 shares of Nvidia worth between $1 million and $5 million, the Daily Caller reported, citing disclosure reports filed by the House speaker

There just happens to be a vote in the Senate to boost the U.S. semiconductor industry upcoming. It could come as early as Tuesday.

This will deliver billions in subsidies for the chip-manufacturing industry..

Disclosure: Bearforce2 has no position in any of the stocks mentioned.
The difference between a right wing conspiracy and the truth is about 20 months.
OdontoBear66
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BearForce2 said:

Paul Pelosi purchased on June 17, 20,000 shares of Nvidia worth between $1 million and $5 million, the Daily Caller reported, citing disclosure reports filed by the House speaker

There just happens to be a vote in the Senate to boost the U.S. semiconductor industry upcoming. It could come as early as Tuesday.

This will deliver billions in subsidies for the chip-manufacturing industry..

Disclosure: Bearforce2 has no position in any of the stocks mentioned.

If I buy more Monday to add to my existing position does my reading your post indicate insider info even though I heard about Paulie's big buy elsewhere?
BearForce2
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OdontoBear66 said:

BearForce2 said:

Paul Pelosi purchased on June 17, 20,000 shares of Nvidia worth between $1 million and $5 million, the Daily Caller reported, citing disclosure reports filed by the House speaker

There just happens to be a vote in the Senate to boost the U.S. semiconductor industry upcoming. It could come as early as Tuesday.

This will deliver billions in subsidies for the chip-manufacturing industry..

Disclosure: Bearforce2 has no position in any of the stocks mentioned.

If I buy more Monday to add to my existing position does my reading your post indicate insider info even though I heard about Paulie's big buy elsewhere?

Absolutely. They don't call this site the BearInsider for nothing.
The difference between a right wing conspiracy and the truth is about 20 months.
DiabloWags
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OdontoBear66 said:

BearForce2 said:

Paul Pelosi purchased on June 17, 20,000 shares of Nvidia worth between $1 million and $5 million, the Daily Caller reported, citing disclosure reports filed by the House speaker

There just happens to be a vote in the Senate to boost the U.S. semiconductor industry upcoming. It could come as early as Tuesday.

This will deliver billions in subsidies for the chip-manufacturing industry..

Disclosure: Bearforce2 has no position in any of the stocks mentioned.

If I buy more Monday to add to my existing position does my reading your post indicate insider info even though I heard about Paulie's big buy elsewhere?

Never mind that this BIPARTISAN BILL has been taken hostage by none other than Mitch McConnell.

Mitch McConnell Takes Bipartisan Bill Hostage To Block Democrats' Prescription Drug Bill (yahoo.com)

"Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill," McConnell tweeted on Thursday.

McConnell threatens semiconductor bill, prompting White House rebuke | The Hill
DiabloWags
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Maybe Paul Pelosi thinks that NVDA is a good BUY after collapsing from $290 in March to as low as $140 in July.

Unit2Sucks
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This doesn't seem good.

Eastern Oregon Bear
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DiabloWags said:

Maybe Paul Pelosi thinks that NVDA is a good BUY after collapsing from $290 in March to as low as $140 in July.


Nonsense! Every stock purchase Paul Pelosi makes is due to insider information. He's never had a good independently analyzed stock purchase. Any good right wing media or Twitter source will feed you the straight scoop on him.
DiabloWags
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Eastern Oregon Bear said:

DiabloWags said:

Maybe Paul Pelosi thinks that NVDA is a good BUY after collapsing from $290 in March to as low as $140 in July.


Nonsense! Every stock purchase Paul Pelosi makes is due to insider information. He's never had a good independently analyzed stock purchase. Any good right wing media or Twitter source will feed you the straight scoop on him.


Is he trading stocks from his jail cell?
He got a DUI right?

Or did Nancy get the charges dropped?
DiabloWags
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Unit2Sucks said:

This doesnt seem good


Much worse than expected.
0.4% GDP
OdontoBear66
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DiabloWags said:

Maybe Paul Pelosi thinks that NVDA is a good BUY after collapsing from $290 in March to as low as $140 in July.


Ya think? I do too.
OdontoBear66
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DiabloWags said:

Eastern Oregon Bear said:

DiabloWags said:

Maybe Paul Pelosi thinks that NVDA is a good BUY after collapsing from $290 in March to as low as $140 in July.


Nonsense! Every stock purchase Paul Pelosi makes is due to insider information. He's never had a good independently analyzed stock purchase. Any good right wing media or Twitter source will feed you the straight scoop on him.


Is he trading stocks from his jail cell?
He got a DUI right?

Or did Nancy get the charges dropped?

Twas a non media event I heard. Hush, hush.
BearForce2
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Partial selling of Apple and Visa?
The difference between a right wing conspiracy and the truth is about 20 months.
oski003
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Pelosi's Nvidia calls are kicking butt this morning.
82gradDLSdad
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oski003 said:

Pelosi's Nvidia calls are kicking butt this morning.


I better go sell a couple. My Tesla awaits.
BearForce2
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oski003 said:

Pelosi's Nvidia calls are kicking butt this morning.
The difference between a right wing conspiracy and the truth is about 20 months.
DiabloWags
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FED raises Fed Funds by 75 basis points.

Chairman Powell begins his Q&A at 11:30 AM PST

SPX was +49 when he started speaking.

Currently +68

+114 at 12:30 PM
BearForce2
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oski003 said:

Pelosi's Nvidia calls are kicking butt this morning.

On Tuesday, Mr. Pelosi dumped all of his NVIDIA stock and suffered a loss of $341,365, according to Yahoo

https://news.yahoo.com/nancy-pelosis-husband-just-dumped-151017638.html

Paul Pelosi sold between $1 million and $5 million worth of NVIDIA stock, or 25,000 shares, at an average price of $165.05 on July 26, according to a mandatory congressional financial disclosure filed Tuesday by the speaker. Members of Congress are only required to report the values of their trades in broad ranges.

Was he pressured from the public or is there something else going on?
The difference between a right wing conspiracy and the truth is about 20 months.
DiabloWags
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Another 100 basis points left.

Sees Fed Funds at 3,25 to 3.5% by year end.

Doesnt leave off the table another big rate hike.
calbear93
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DiabloWags said:

FED raises Fed Funds by 75 basis points.

Chairman Powell begins his Q&A at 11:30 AM PST

SPX was +49 when he started speaking.

Currently +68

+114 at 12:30 PM



Couple of thought.

Glad the FED is continuing to take inflation control seriously. Avoid stagflation or double dip recession.

The strong dollar from higher interest rate is going to hurt most global reporting companies through FX adjustment accounting treatment for sales outside the US as well as more expensive price for exports. EU economy will be hurting for awhile. Also, I suspect companies are almost reaching the limit on ability to pass on cost to customers and their margins will get impacted. Companies will cut jobs to control expenses. All of that will be reflected eventually in reducing inflation and most likely leading to recession. But we are starting from a good place so it should be a shallow recession.

I would advice folks to diversify, invest consistently and a bull market will eventually return as early as 2024. Also make sure you have a significant rainy day fund in 2023 if you still need your wage income for paying the bills.
DiabloWags
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As I said about two weeks ago, I'm looking for an earnings recession as profit margins get squeezed due to companies no longer being able to pass on higher costs and the consumer pulling back. I think that the current consensus for S&P operating earnings at $228 is still a joke. That number has actually come down since the week ending July 8th at $237.53


We finished 2021 at $205.69
In my opinion, we might not even make $215.

I expect this current rally of 6 weeks to run out of gas anywhere between 4053 and 4139.
I think it's gonna wind up being a terrific entry for shorts heading into a mid-September cycle low.

I think 3500 is in the cards.
Perhaps even as low as 3200.


calbear93
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DiabloWags said:

As I said about two weeks ago, I'm looking for an earnings recession as profit margins get squeezed due to companies no longer being able to pass on higher costs and the consumer pulling back. I think that the current consensus for S&P operating earnings at $228 is still a joke. That number has actually come down since the week ending July 8th at $237.53


We finished 2021 at $205.69
In my opinion, we might not even make $215.

I expect this current rally of 6 weeks to run out of gas anywhere between 4053 and 4139.
I think it's gonna wind up being a terrific entry for shorts heading into a mid-September cycle low.

I think 3500 is in the cards.
Perhaps even as low as 3200.





3200 would be scary. That would be almost another 15% from when S&P 500 first hit bear market territory and before it recovered some of the losses. Hopefully we won't get there but always possible.
 
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