[2020] A little stock market sense

[Brett]

U.S. economy grew at a 2.8% pace in the second quarter, much more than expected​

• Real gross domestic product increased at a 2.8% annualized pace in the second quarter, above the 2.1% forecast.
• The personal consumption expenditures price index, a key measure for the Fed, rose 2.6% for the quarter, down from the 3.4% move in Q1. Core PCE prices were up 2.9%, down from 3.7%.
• However, the report also indicated that the personal savings rate continues to decelerate, at 3.5% for the quarter, compared with 3.8% in Q1.
• Initial jobless claims declined by 10,000, while durable goods orders unexpectedly plunged.

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www.cnbc.com

"Trends already underway make for a sunny outlook over the next few years"

"Inflation is returning to normal. As that happens, the Federal Reserve is preparing to cut interest rates. A huge burst of infrastructure spending has taken time to ramp up, but projects both small and large are likely to break ground in earnest in 2025 and 2026. Green-energy, manufacturing and infrastructure investment that is expected to continue over the next several years. Expansions of dams and locks will be underway. Dozens of airport upgrades will be completed. Semiconductor factories will begin churning out chips."

 

[DrQ]

Famed short-seller and TV pundit Andrew Left charged in $16M market manipulation scheme​

DOJ charges short-seller Andrew Left over $16m fraud

The prominent short-seller and market commentator allegedly used and abused his role as a TV pundit to rake in the ill-gotten gains.

nypost.com

 

[Brett]

Bond Funds Draw In Record Amounts
https://www.wsj.com/finance/investi...ond-funds-before-rates-start-to-fall-6a1ff254

Investors poised for rate cuts, retirees looking to lower risk drive ETF inflow

The stock market may be roaring, but 2024 has been Wall Street’s year of the bond fund.
Bonds are paying the highest yields in a generation, and interest rates are poised to come down. Meanwhile, a record number of retirees are looking to cut risk in their portfolios. That combination has investors pouring money into both indexed and actively
managed funds.

 

[easyrider]

It's been reported on Varney this morning that there is a lot of big shorts happening today. It could be that future jobs or lack of is part of the reason. Currently there are many companies having problems and needing to start layoffs. Intel announced it is going to lay off 15,000. Whirlpool and many furniture brands are having problems. Restaurant chains are feeling it.

Bill

 

[letsgobobby]

stocks go up and down. in the long run they go up because populations grow, productivity increases, and real economic growth is positive. Barring WW3, the Black Death, etc, that will continue to be true.

Buying the whole economic pie (broad total market, low cost, tax efficient index funds) and never selling will continue to be a winning strategy even if there are quarters where the pie shrinks.

As an accumulator I am always happy when thr stock market goes down because I get to buy more stocks on sale. What I wouldn't give to be able to buy stocks today at Oct 87 highs (Dow: 2700) or Mar 00 highs (Dow: 11,000).

 

[Brett]

yes, buying "broad total market" low cost, tax efficient index funds (Schwab 1000, Vanguard 500, etc.) over 40 years is a winning strategy.
I've moved a significant amount to corporate bonds and CD's so I'm not worried about market fluctuations

 

[easyrider]

From what I have read tonight, with Israel declaring war, indicators pointing at global recession, the bank liquidity problem, big companies selling off and whatever is happening in D.C., there is a good chance of a slow bleed sell off.

Bill

 

[CO skier]

a slow bleed sell off.

Almost 1,000 points sell off on the Nasdaq 100 futures for the Monday morning open is definitely not a "slow bleed sell off." It is panic time.

 

[Ralph Sir Edward]

Incoming!

Smells like 1987. . .

 

[DrQ]

U.S. Money Supply Has Done Something So Unusual That It Hasn't Happened Since the Great Depression -- and a Big Move in Stocks May Await​

U.S. Money Supply Has Done Something So Unusual That It Hasn't Happened Since the Great Depression -- and a Big Move in Stocks May Await | The Motley Fool

We haven't seen this pronounced of a move in the U.S. money supply in 90 years.

www.fool.com

 

[letsgobobby]

oh look the permabears are out of hibernation

now stocks have only gone up 75% since this thread started

 

[billymach4]

This selloff is just overblown. Keep Calm and Carry On!

 

[WaikikiFirst]

from Animal House: "Remain calm. All is well." The bleep investors do. LOL. It used to surprise me 35 .. 30 yrs ago. Then I sat in a room with a bunch of big-money, pro investors (instead of just talking to them on the phone or 1-by-1) and realized
"What a bunch of ADD clowns."

We've been laughing in our house since, in about 40 hours, they all went from
"That Powell is a genius. Powell stuck a soft-landing. Way ta go, guy. You a genius fo sho."
to
"OMG! Powell screwed up. He waited too long. Those damn bleeps at The Fed did it again. Danger. Danger."

Fun times. Watch Bloomberg TV on a "Fed Day". Who needs the Comedy Channel?

 

[WaikikiFirst]

It is panic time.

Can't touch this. Woop. Woop. Can't touch this. No CO, don't hurt em.

 

[emeryjre]

Shifts in Interest Rate Policy are generally met with increased volatility as portfolio adjustments occur

.The Nvidia announcement on chip delays certainly has not helped
Major capital spending on new AI infrastructure is delayed for an unknown period

MSN

 

[CO skier]

Maybe someone yelled Fire! in a crowded Yen carry-trade.

 

[WaikikiFirst]

Nvidia announcement on chip delay

The most ADD thing I saw today. NVDA delays its new chip by 3 mos, I guess. AMD is down on the open, and not down slightly, but down by maybe 6 - 8%.
It takes some real ADD to make that sale.

Maybe taking Silver Medal: bitcoin / crypto. Let's pretend this stuff has some actual intrinsic value, but it falls 18% overnight and almost 30% in a few days, when ...
the macro-jitters don't really have anything to do with the supposed value. I feel like buying some down here to flex my "trading muscles" like they all do.
Where's that clown (what is his name Bankman something?) when they need him?

 

[WaikikiFirst]

someone yelled Fire! in a crowded Yen carry-trade

Funny story. We were in Asia for the month of June. Half of it in Japan. The prices were AMAZING due to FX and Japan having so little inflation over the last 30 yrs. We were in Kyoto 2 summers ago and the prices were awesome, but after 2 more yrs of yen depreciation, this summer was actually unbelievable. Jaw-dropping. When were flying back, my wife said "If the yen stays here, we should go back next summer". I replied, "Well, if we throw spending money into a yen fund, we can lock in super-inexpensive Japan stays for a long time." I was only half joking, but still, I didn't intend to do it.

A week later, after yen started rising, she tells me "You know, I put $25,000 into a yen fund, YCL." I high-fived her.
YCL now up 25% since early July. Sometimes you just have to look clearly and think "That price makes no sense." It happens not infrequently in FX.

note: You could travel to Tokyo in June and spend like a shogun and have lower daily expenses than staying in Orlando and buying passes to bleepin disney. It is still probably close.

 

[DrQ]

The most ADD thing I saw today. NVDA delays its new chip by 3 mos, I guess. AMD is down on the open, and not down slightly, but down by maybe 6 - 8%.
It takes some real ADD to make that sale.

Maybe taking Silver Medal: bitcoin / crypto. Let's pretend this stuff has some actual intrinsic value, but it falls 18% overnight and almost 30% in a few days, when ...
the macro-jitters don't really have anything to do with the supposed value. I feel like buying some down here to flex my "trading muscles" like they all do.
Where's that clown (what is his name Bankman something?) when they need him?

Right now, my NVIDIA is still positive (after 2.5 years) and Broadcom is still positive after 4 years.

 

[Tia]

maybe it's a correction not a recession on it's way

 

[WaikikiFirst]

my NVIDIA is still positive

I sold the $970 call on my NVDA, which became the $97 call, so NVDA being $96 or $99 or $101 is sort of an optimal outcome for me
I am Jack's complete lack of surprise.

I own a ton of GOOGL but I'd like it to get back to low-$150s so I can cover my GOOGL calls.

 

[easyrider]

View attachment 97442

Maybe someone yelled Fire! in a crowded Yen carry-trade.

Yup, I agree. It looks like some massive YEN to USD carry trades went bad which resulted in margin calls on both sides is the pin that popped the bubble.

Bill

 

[Tia]

Wondered over 20 years ago how they'd fund all the Baby Boomers retirement when they all started cashing in.

 

[CO skier]

Warren Buffet is timing the market with some strategic selling at these levels.

 

[Brett]

Almost 1,000 points sell off on the Nasdaq 100 futures for the Monday morning open is definitely not a "slow bleed sell off." It is panic time.

View attachment 97442

Maybe someone yelled Fire! in a crowded Yen carry-trade.

But yet I'm not panicking and I haven't even tried logging into my Charles Schwab account

Why?

.