Investing Thread

[MU82]

From Yahoo Finance:

"The realization that the economy created fewer jobs than initially estimated [does not] change the broader trends in GDP growth, stock market and wealth gains, and consumption," RBC Capital Markets US economist Michael Reid wrote in a note to clients on Aug. 16.

"It's important to zoom out a little bit in this kind of situation," Evercore ISI senior economist Marco Casiraghi told Yahoo Finance. "And I think this is also what the Fed will do. And if you zoom out, you see that the economy is slowing down, but still growing. The labor market is softening, but it's not rapidly deteriorating."

[Jockey]

I hope that they bust up the merger. Kroger sucks.

Thanks to Chevron, Kroger claims the FTC is illegal.

[rocket surgeon]

The revision down of 818k jobs was major news on every outlet.

yes it was as it should have been.  and they would still be talking about it and talking about it and...until November if...  there is a big difference in what we once called the "media" and how it operates on certain subjects during certain times. 

[Hards Alumni]

yes it was as it should have been.  and they would still be talking about it and talking about it and...until November if...  there is a big difference in what we once called the "media" and how it operates on certain subjects during certain times.

You're right, there is some big media conspiracy to elect Kamala Harris by not reporting this enough for your liking. 

[TSmith34, Inc.]

You're right, there is some big media conspiracy to elect Kamala Harris by not reporting this enough for your liking. 

Conspiracy theories and unrelenting grievance. It's not just for breakfast anymore.

[Skatastrophy]

Imagine being negative about everything all the time. Must be exhausting, rocket.

[rocky_warrior]

I saw the downward revision of the unemployment numbers and it was not a good sign.

Just to be clear, this was a revision of number of jobs created, not unemployment.  Unemployment remains relatively steady.

i.e. - Jobs were still created, just not as many as the original estimate.

[MU82]

At Jackson Hole, Powell just signaled that the Fed will cut rates starting next month.

https://seekingalpha.com/news/4143332-time-has-come-for-policy-to-adjust-federal-reserve-chair-jerome-powell-says

Mr. Market likey.

[Shaka Shart]

Jump on this opportunity to trick people into thinking it's the rapture now!

https://x.com/pronounced_kyle/status/1826687940673912946?s=46&t=G2FhP_F2kWewaBOpvRv5lg

[SoCalEagle]

We are on a "sustainable path to our 2% objective."

-- Jay Powell --

Mr. Powell says "the time has come" for the Fed to start cutting interest rates.  Since we are on a path for lower rates, it appears that we are also on a path for higher stock prices over the next year.  In 12 of the past 14 are rate cutting cycles since the Great Depression, stocks were higher 12 months later, sometimes significantly so.  The only times that stocks were lower one year after a rate cutting cycle began were during the dot com bust and the Great Recession, but neither of those economic environments resemble what we have today.  What does this all mean?  Well, to me it seems likely that stock prices are poised to up from here.  Will that really happen?  I have no idea.  Just reporting what I see out there as I continue investing in the hopes of one day achieving "Escape Velocity." 

[rocket surgeon]

Imagine being negative about everything all the time. Must be exhausting, rocket.

"everything, all of the time' ??  not even close, but yes, that would be exhausting for one who suffers from this malady, yes indeed

just saying we do not have a media anymore and haven't for quite some time and that hurts everyone all of the time

[MU82]

We are on a "sustainable path to our 2% objective."

-- Jay Powell --

Mr. Powell says "the time has come" for the Fed to start cutting interest rates.  Since we are on a path for lower rates, it appears that we are also on a path for higher stock prices over the next year.  In 12 of the past 14 are rate cutting cycles since the Great Depression, stocks were higher 12 months later, sometimes significantly so.  The only times that stocks were lower one year after a rate cutting cycle began were during the dot com bust and the Great Recession, but neither of those economic environments resemble what we have today.  What does this all mean?  Well, to me it seems likely that stock prices are poised to up from here.  Will that really happen?  I have no idea.  Just reporting what I see out there as I continue investing in the hopes of one day achieving "Escape Velocity."

I'm always long-term bullish, because all the market has ever done over the long term is move higher. So it's pretty easy to agree with your premise - and with the data you presented in support. Thanks for providing it.

Edit: Just saw this graph that's related to this discussion:

[rocky_warrior]

Edit: Just saw this graph that's related to this discussion:

I'm certain you also posted that periods of steady rates are good for stocks.

So, now I just need to know if increasing rates are also good for stocks?

I suspect "stocks" don't care about interest rates, and only really care that inflation is going in the correct direction (and for those that don't understand, in relation to investing, "increasing " is the correct direction for inflation)

[MU82]

I'm certain you also posted that periods of steady rates are good for stocks.

So, now I just need to know if increasing rates are also good for stocks?

I suspect "stocks" don't care about interest rates, and only really care that inflation is going in the correct direction (and for those that don't understand, in relation to investing, "increasing " is the correct direction for inflation)

Increasing rates are bad for certain sectors, especially Real Estate and Utilities. Steady rates are usually OK, especially if lower rates are anticipated.

[jesmu84]

Is there any evidence that stock performance is anything other than vibes?

[rocky_warrior]

Increasing rates are bad for certain sectors, especially Real Estate and Utilities. Steady rates are usually OK, especially if lower rates are anticipated.

I don't think you comprehended what I wrote.

[rocky_warrior]

Is there any evidence that stock performance is anything other than vibes?

yes

[MU82]

Is there any evidence that stock performance is anything other than vibes?

Yes.

If earnings and revenue trend down for enough companies - especially the 50-100 largest - then it usually adversely affects the market. Which makes sense.

I don't think you comprehended what I wrote.

I guess not.

[jesmu84]

Yes.

If earnings and revenue trend down for enough companies - especially the 50-100 largest - then it usually adversely affects the market. Which makes sense.

Sorry. I meant for individual stocks/companies

[MU82]

Sorry. I meant for individual stocks/companies

Same thing generally applies.

When Meta announced consensus-beating earnings and revenues, and gave good forward guidance, investors piled in and the stock price went higher. The opposite happened for United Airlines and price tanked.

Now, I guess one could describe that as "vibes," but it's really based on data.

But there certainly are times when vibes drive certain individual stocks and the market overall. Usually, that's a short-term thing, however. Gotta make money.

[MuggsyB]

What's the verdict on a jobs revision of 800K?  That sounds insane me.  How the F does that happen?

[MU82]

What's the verdict on a jobs revision of 800K?  That sounds insane me.  How the F does that happen?

Already discussed. Go back 1 page to see what folks said.

[The Sultan]

Already discussed. Go back 1 page to see what folks said.

Muggsy's been gone a couple weeks so apparently its out job to catch him up on what he missed.

[Skatastrophy]

What's the verdict on a jobs revision of 800K?  That sounds insane me.  How the F does that happen?

Jobs numbers are always revised. 100% of the time. If you'd like to dig into historical revision numbers here's a source - https://www.bls.gov/web/empsit/cesnaicsrev.htm

The -70k per month revision is pretty normal. But because it's for a year there's a big number for the media to talk about in the 800k.

[SoCalEagle]

Jobs numbers are always revised. 100% of the time. If you'd like to dig into historical revision numbers here's a source - https://www.bls.gov/web/empsit/cesnaicsrev.htm

The -70k per month revision is pretty normal. But because it's for a year there's a big number for the media to talk about in the 800k.

Wow, it looks like one party has created almost all the jobs since the end of the Cold War. Is that accurate?