Investing Thread

[MU82]

After the Fed's comments today, the market may be expecting ANOTHER 50 basis point cut later this year. 

In other news, I heard an analyst speculate that the Fed didn't even need to increase rates AT ALL during the last couple of years.  His rationale is that inflation was caused by post COVID supply chain disruptions, not by anything to do with things the Fed can control like rates / gdp / employment.  Therefore, raising rates was a waste of time and may have worked against the economy unnecessarily.  After supply chains normalized, inflation starting falling "on it's own" and have been doing so ever since. 

Another analyst says that those who are looking for a bump in the economy may be disappointed.  He thinks that billions of dollars in the hands of consumers (think interest earned on high yield savings accounts, etc.) will be going away.  Taking those billions out of the economy will lead to a slower economic output, so he claims. 

Lots of news / ideas floating out there.  Some is just noise, but some of it I find very interesting.

Analysts say all kinds of things. I read about two this morning who had been highly critical of Powell and the Fed saying they are impressed that the Fed "nailed the landing." Obviously, we won't know about the "right" or "wrong" of any of this for awhile.

The fact that Powell's bigliest critic is screaming about it makes me think the Fed handled it perfectly.

After taking a slight pause yesterday afternoon to think about the cut and the dot plot, Mr. Market is loving it today. Dow up 1%+ premarket, SPY up 1.6%, Nasdaq up 2.3%.

BofA talking about .75 cut in 4th quarter

They are the only ones. If they're right, they'll get to say "I told you so." If they're wrong, they'll never mention it again.

[Hards Alumni]

They are the only ones. If they're right, they'll get to say "I told you so." If they're wrong, they'll never mention it again.

Kinda like Jamie Dimon does.

[Uncle Rico]

Kinda like Jamie Dimon does.

I'll ask him about this at lunch

[TSmith34, Inc.]

Analysts say all kinds of things. I read about two this morning who had been highly critical of Powell and the Fed saying they are impressed that the Fed "nailed the landing." Obviously, we won't know about the "right" or "wrong" of any of this for awhile.

The fact that Powell's bigliest critic is screaming about it makes me think the Fed handled it perfectly.

After taking a slight pause yesterday afternoon to think about the cut and the dot plot, Mr. Market is loving it today. Dow up 1%+ premarket, SPY up 1.6%, Nasdaq up 2.3%.

They are the only ones. If they're right, they'll get to say "I told you so." If they're wrong, they'll never mention it again.

Everything up a across the board...

[Uncle Rico]

Everything up a across the board...

Everything he touches, dies

[Skatastrophy]

ATH again. Choo choo, what a covid recovery.

Great job by the federal government on the stimulus. The fed was a little slow to raise rates before the pandemic but that served us just fine during the pandemic. Inflation was transitory, as expected, since it wasn't demand-pull inflation. Now we've got our soft landing and we're kicking the ass of europe and asian economies.

Really remarkable past few years where it felt like the economy was walking along a razor's edge. Mission accomplished.

[Not all scoop users are created equal apparently]

Doomed

[jesmu84]

Are we still blaming the stimulus checks?

[Herman Cain]

Got the SOFR pricing today. Was 4.92 versus 5.33 . So came down 41P. Will be interesting to see what it is tomorrow morning. Takes a while for the full 50 BP to kick in.

As rates come down, we will look to make more investment in operations. Some projects we have on hold may come back on line another 50 BP from here.

Our customer sales data gives us a very diversified geographic insight into the economy. Overall, we have seen softening. The continued impact of high price levels has hindered customer ability to act on their demand for product.

Layoffs and plant closings are happening everywhere.  Just had an unsolicited call on a property we had our eyes on for years where the owner is consolidating into another operation.

The soft landing the Fed is seeking may still be possible, however my guess is we continue to see layoffs. We are now able to find multiple candidates for positions.

[Hards Alumni]

Got the SOFR pricing today. Was 4.92 versus 5.33 . So came down 41P. Will be interesting to see what it is tomorrow morning. Takes a while for the full 50 BP to kick in.

As rates come down, we will look to make more investment in operations. Some projects we have on hold may come back on line another 50 BP from here.

Our customer sales data gives us a very diversified geographic insight into the economy. Overall, we have seen softening. The continued impact of high price levels has hindered customer ability to act on their demand for product.

Layoffs and plant closings are happening everywhere.  Just had an unsolicited call on a property we had our eyes on for years where the owner is consolidating into another operation.

The soft landing the Fed is seeking may still be possible, however my guess is we continue to see layoffs. We are now able to find multiple candidates for positions.

Maybe your sector just sucks.  Buy soy!

[TSmith34, Inc.]

Larry Kudlow was just about in tears today as the market rallied. Pulling strongly for a bad economy and sad that things keep getting better for more and more people.

More character revealed.

[Not all scoop users are created equal apparently]

The rally continues

https://x.com/briantylercohen/status/1838315263248470471?s=46&t=G2FhP_F2kWewaBOpvRv5lg

[Skatastrophy]

I still have a portion of my portfolio in an international etf and it's been painful waiting for it to recapture all time highs from 3 years ago. China and Europe are still getting their butt kicked, but I try to keep my allocation up. The problem is that I'd have to seriously rebalance things with US experiencing such outsized growth it looks like my ex-US holdings are down to just 10% of my portfolio where they had been ~30% pre pandemic.

Gosh I shouldn't have looked. I must not have rebalanced for quite some time.

On the other hand, I firmly believe in letting winners run.

For those of you indexing: What's your target v actual allocation to international?

[TSmith34, Inc.]

I still have a portion of my portfolio in an international etf and it's been painful waiting for it to recapture all time highs from 3 years ago. China and Europe are still getting their butt kicked, but I try to keep my allocation up. The problem is that I'd have to seriously rebalance things with US experiencing such outsized growth it looks like my ex-US holdings are down to just 10% of my portfolio where they had been ~30% pre pandemic.

Gosh I shouldn't have looked. I must not have rebalanced for quite some time.

On the other hand, I firmly believe in letting winners run.

For those of you indexing: What's your target v actual allocation to international?

This is one I actually got right. A common piece of advice was to have 15-20% in international funds, but at least 10 years ago I dropped that to less than 5%. Our economy has been the envy of the world.

[rocket surgeon]

stock market futures are blasting off!!  show me the money!!

  micron up over 16% !!  yowsa!!

[MU82]

More good economic news this week:

++ Today, the Core PCE Price Index edged up 0.1% M/M in August, less that the +0.2% expected and easing from +0.2% in July, the Commerce Department's Bureau of Economic Analysis said on Friday.

https://seekingalpha.com/news/4154063-feds-preferred-inflation-gauge-core-pce-cools-further-in-august#comment-98752575

++ Yesterday. the Commerce Department's U.S. Q2 GDP growth estimate stayed at 3.0% in its third and final print, matching the consensus estimate of +3.0%. That still shows a significant acceleration from the 1.4% growth in the first quarter of the year.

https://seekingalpha.com/news/4153649-third-estimate-of-us-q2-gdp-growth-stays-at-a-strong-30

Plus, the government avoided a shutdown thanks to the minority party again bailing out the speaker of the House.

All leading to more new stock market highs.

[MU Fan in Connecticut]

More good economic news this week:

++ Today, the Core PCE Price Index edged up 0.1% M/M in August, less that the +0.2% expected and easing from +0.2% in July, the Commerce Department's Bureau of Economic Analysis said on Friday.

https://seekingalpha.com/news/4154063-feds-preferred-inflation-gauge-core-pce-cools-further-in-august#comment-98752575

++ Yesterday. the Commerce Department's U.S. Q2 GDP growth estimate stayed at 3.0% in its third and final print, matching the consensus estimate of +3.0%. That still shows a significant acceleration from the 1.4% growth in the first quarter of the year.

https://seekingalpha.com/news/4153649-third-estimate-of-us-q2-gdp-growth-stays-at-a-strong-30

Plus, the government avoided a shutdown thanks to the minority party again bailing out the speaker of the House.

All leading to more new stock market highs.

Now we just need to worry about the potential East Coast port strike on Oct. 1.

[Skatastrophy]

China with a huge stimulus package yesterday to try to stave off their deflationary environment. We'll see if that can save their economy. The market liked it.

[Hards Alumni]

China with a huge stimulus package yesterday to try to stave off their deflationary environment. We'll see if that can save their economy. The market liked it.

Market usually loves QE

[Skatastrophy]

Market usually loves QE

It's free money!

[jesmu84]

It's free money!

I thought, like with student loan forgiveness or with stimulus checks (but not PPP forgiveness), free money was a bad thing both economically and morally?

[Skatastrophy]

I thought, like with student loan forgiveness or with stimulus checks (but not PPP forgiveness), free money was a bad thing both economically and morally?

Free money is only bad when it goes to poor people. That's because they spend it, which stimulates the... oh no

[MU82]

From Mark Zandi, chief economist at Moody's Analytics:

I've hesitated to say this at the risk of sounding hyperbolic, but with last week's big GDP revisions, there is no denying it: This is among the best performing economies in my 35+ years as an economist. Economic growth is rip-roaring, with real GDP up 3% over the past year. Unemployment is low at near 4%, consistent with full employment. Inflation is fast closing in on Fed's 2% target - grocery prices, rents and gas prices are flat to down over the past more than a year.  Households' financial obligations are light, and set to get lighter with the Fed cutting rates. House prices have never been higher, and most homeowners have more equity in their homes than ever. Corporate profits are robust, and the stock market is hitting a record high on a seemingly daily basis. Of course there are blemishes, as lower-income households are struggling financially, there is a severe shortage of affordable homes, and the government is running large budget deficits. And things could change quickly. There are plenty of threats. But in my time as an economist, the economy has rarely looked better.

[Jockey]

Only the MAGAts deny that the economy is booming.

[Herman Cain]

From the real world perspective of our corporation, the economy is sluggish. Our business touches many of the largest  sectors of the economy. Margin pressure and low growth environment . Heavy regulation on top of the stagflation doesn't help either .

One silver lining is we are now able to find quality people with all the layoffs .