The Investment Thread

[Fear The Chorizo]

38 minutes ago, nate82 said:

I doubt they hike but I still believe they will stay where the rates are at right now.

A rate hike should only happen if inflation rises overly high.

but what would be considered overly high at this point, when many people are already beyond the breaking point with current prices, and even the "ideal" inflation rate between 1-2% year over year still keeps ratcheting up those costs while the true labor market is contracting?

I agree rate cuts should be completely off the table, but standing pat seems alot like this to me, too:

[GAME05]

That was the most depressing thumbs up I've ever given, Chorizo.

I remember trying to find a career-oriented job shortly after the 2008 crash and it took a good few years to finally find one. Sure hope me or anybody else doesn't have to go through that challenge again.

[wallus]

It was off by .1% and you would think by the comments before this one that it was .5%+ higher.

Still tons of jobs and people are spending like crazy. Sure, some people are hurting and some people are having a hard time finding a job but there is always some that fit that category.

 

[nate82]

9 hours ago, LouisEly said:

That, and high interest rates make home ownership less affordable, increasing the demand for rent.

Even with a rate cut mortgage rates won’t be coming down.  Mortgage rates probably won’t decrease until about a year after the first rate cut maybe even longer.  The housing industry right now even at a high rate is still extremely healthy.  There really isn’t any incentive for banks to lower rates even with a rate cut.

[nate82]

With more and more information coming out it doesn't look like there will be 3 rate cuts this year.  With the recent data coming out June is not going to happen.  I think the Fed does nothing in June.  The next available data point won't be until the September meeting so July and August are also out.  If there will be a rate cut it will be in September and that is if inflation improves.

It is looking more and more like inflation will not improve or at least not improve enough for a rate cut.  I still believe the Fed will just hold until September and reevaluate then.  If inflation doesn't improve by the September meeting then you could see a rate hike.  I think inflation would have to improve to around 2.5% for the Fed to make a rate cut and I just don't see that happening. 

[LouisEly]

On 4/10/2024 at 9:30 PM, nate82 said:

The housing industry right now even at a high rate is still extremely healthy.  There really isn’t any incentive for banks to lower rates even with a rate cut.

Prices are healthy, but that's because there's very low supply.  Volume is down significantly, so what banks are potentially gaining in rates they are losing in volume.  Profit = margin x volume.  Also, the home builders are afraid to increase production on the fears that higher interest rates for longer will scare off buyers and buyers at current monthly payments will dry up, and they don't want to be stuck with inventory, further decreasing the supply.

If rates come down, bank profit will be made up in volume.  And all it takes is one bank to cut rates to get volume, and the rest will follow because of how much business they'll lose to other banks with lower rates.

[LouisEly]

284,000 fewer full-time jobs than one year ago.  Lots of companies have been mentioning during their earnings calls the last 2-3 weeks that things are slowing.  CEO of Bank of America, one of the biggest credit card companies, said that consumer spending is slowing.  Shelter, vehicle insurance, and food away from home are the only things that are driving inflation. 

Shelter takes months to correct because leases are typically for a year.  Similar to vehicle insurance, where premiums are locked in for six months.  My vehicle insurance is way up from one year ago, but almost the same as 6 months ago.

[LouisEly]

Jobs opening rate for the construction industry tanked in March, the largest on record.

Either the migrants/immigrants all got trained on construction and started working in March, or that's not a good indicator for the economy.

Powell when asked about "stagflation" today:

"I don’t really understand where that’s coming from,” Powell said.

The central bank chief pointed out that, by some measures, economic growth is at 3% and inflation is below 3%.

“I don’t see the ‘stag’ or the ‘-flation’,” Powell added.

 

[BrewerFan]

Rate Cut coming in Sept...most likely.

Dow crosses 40,000 for the first time ever...and the last of Magnificent 7 due to report on Wed(or the Fab Four, whatever).

Seems to have weathered the conflict in the ME and inflation pretty...pretty well considering(Channeling my inner Larry David).

[NeedMoreFans]

This is of great interest to me since most of my retirement is handled by WRS, but the state investment board has added bitcoin to the pension fund: 

https://www.wpr.org/news/wisconsin-pension-fund-bitcoin

[nate82]

41 minutes ago, NeedMoreFans said:

This is of great interest to me since most of my retirement is handled by WRS, but the state investment board has added bitcoin to the pension fund: 

https://www.wpr.org/news/wisconsin-pension-fund-bitcoin

More pensions will be adding this soon.  Ironically more pensions have added crypto than 401k’s have.

Hopefully the morons in Washington DC can stop their bumbling around nonsense and stop fearing what they can’t control.  

[BrewerFan]

NVDA just keeps CRUSHING it! 

You keep thinking they're going to slow down...and they're not!

26B and 6.15 EPS and a 10-1 split. 

[owbc]

On 5/22/2024 at 2:42 PM, BrewerFan said:

NVDA just keeps CRUSHING it! 

You keep thinking they're going to slow down...and they're not!

26B and 6.15 EPS and a 10-1 split. 

Up another 25% since this post! 

[nate82]

10 minutes ago, owbc said:

Up another 25% since this post! 

I believe they will be having a stock split on Friday for 10-1.  But I don't think that is what is driving the price going up.  Well it is driving it just not the primary reason. 

[homer]

2 hours ago, owbc said:

Up another 25% since this post! 

I thought this was about GME at first

[nate82]

26 minutes ago, homer said:

I thought this was about GME at first

That one has rallied also recently.  Yes I know it was a good meme stock in 2020 but now not so much.  It is so over priced right now compared to its financials.  If anyone is in it I would suggest to get out and take your gains or minimize your losses as soon as possible.  That stock should be trading below $5 a share.  It's revenue just doesn't support the $40 it is currently at.

[GAME05]

RoaringKitty is doing a livestream I think right now. Lotta folks wonder if he'll exercise his options. He controls something like $400m worth of options. He could very well skyrocket the price even more. Not that I want to wade into all that craziness.

[homer]

38 minutes ago, GAME05 said:

RoaringKitty is doing a livestream I think right now. Lotta folks wonder if he'll exercise his options. He controls something like $400m worth of options. He could very well skyrocket the price even more. Not that I want to wade into all that craziness.

Yeah I saw his portfolio. Down $300m today and he's just sipping a hazy IPA and making jokes. Kinda of crazy.,

[owbc]

20 hours ago, nate82 said:

That one has rallied also recently.  Yes I know it was a good meme stock in 2020 but now not so much.  It is so over priced right now compared to its financials.  If anyone is in it I would suggest to get out and take your gains or minimize your losses as soon as possible.  That stock should be trading below $5 a share.  It's revenue just doesn't support the $40 it is currently at.

Do financials mean anything at all in this day and age? What’s backing up the price of crypto other than vibes? At least Nvidia is selling a product that people desperately want. 

[nate82]

14 minutes ago, owbc said:

Do financials mean anything at all in this day and age? What’s backing up the price of crypto other than vibes? At least Nvidia is selling a product that people desperately want. 

Yes financials matter.

Crypto is far more complicated and are more like fiat currencies.

Also looking at the future GameStop is in a dying industry.  Majority of video games are going digital.  Which cuts into GameStop’s profits.  A lot of their profits come from the reselling of games.  Since these are going from a disk to digital this is going to cut their profits.  They were making something around 200% on their used games.  This has been drying up and their sales have been dropping because of this.

[nate82]

Bad news today for anyone who was holding out hope for 2+ rate reductions this year.  Currently the market only has about a 10% chance for a rate cut in July and only a 50% chance in September.  July was closer to 30% only a few months ago and September was around 70%. 

I still don't expect a rate decrease this year or at least not until after the election. 

[BrewerFan]

4 hours ago, owbc said:

Do financials mean anything at all in this day and age? What’s backing up the price of crypto other than vibes? At least Nvidia is selling a product that people desperately want. 

Yeah...I don't play with that nonsense. That's a good way to take what you've earned or made and you're really just gambling then.

I guess all stocks are a gamble, but at least an informed gamble. Trying to figure out what the hell Roaring Kitty will make a stock do...that terrifies me. But I get the allure. It runs up 20-30% and...that's fun. I'd just never be the guy who holds it and I never see when he starts it. 

[LouisEly]

18 hours ago, nate82 said:

Bad news today for anyone who was holding out hope for 2+ rate reductions this year.  Currently the market only has about a 10% chance for a rate cut in July and only a 50% chance in September.  July was closer to 30% only a few months ago and September was around 70%. 

I still don't expect a rate decrease this year or at least not until after the election. 

I think the market is going to be wrong.  The Fed has a dual mandate, and with the unemployment rate going up despite the labor participation rate shrinking, that will get the attention of the Fed.

I really hope the Fed is looking under the hood.  272K jobs gained... but 408K jobs lost.  Even worse - full-time job holders dropped by 625K and part-time job holders increased by 286K.  If including discouraged workers and those holding part-time jobs just to make ends meet the unemployment rate is 7.4%. 

“On the surface, [the report] was hot, but you’ve also got a bigger drop in household employment,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “For what it’s worth, that tends to be a more accurate signal when you’re at an inflection point in the economy. You can find weakness in the underlying numbers.”

https://www.cnbc.com/2024/06/07/jobs-report-may-2024-us-job-gains-totaled-272000-in-may.html?__source=androidappshare

[Fear The Chorizo]

23 hours ago, LouisEly said:

I think the market is going to be wrong.  The Fed has a dual mandate, and with the unemployment rate going up despite the labor participation rate shrinking, that will get the attention of the Fed.

I really hope the Fed is looking under the hood.  272K jobs gained... but 408K jobs lost.  Even worse - full-time job holders dropped by 625K and part-time job holders increased by 286K.  If including discouraged workers and those holding part-time jobs just to make ends meet the unemployment rate is 7.4%. 

“On the surface, [the report] was hot, but you’ve also got a bigger drop in household employment,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “For what it’s worth, that tends to be a more accurate signal when you’re at an inflection point in the economy. You can find weakness in the underlying numbers.”

https://www.cnbc.com/2024/06/07/jobs-report-may-2024-us-job-gains-totaled-272000-in-may.html?__source=androidappshare

Reasons differ from then, but it feels like the 1st half of 2008 economically all over again, when things were still sorta growing/sorta doing ok despite some glaring warning signs....then the market turned very volatile, days/weeks where it plummeted followed right behind by days/week where it shot back up - until the financial sector was forced to take their medicine in the fall, and the next few years.

I think the Fed needs to keep their powder dry and hold off on lowering rates, and should strongly consider raising them further to actually get inflation down to their stated goal in the short term.  

[BrewerFan]

The fatalistic posts on here are...just kinda insane. 

You have more analysts and experts who believe we're just at the start of a bull market, that we're in a 21st century version of the "roaring 20s," and anyone who understands the Great Depression knows that Black Friday wasn't the cause of the great depression it was one of the worst ideas in the History of US Policey(Smoot-Hawley obviously) as the market was well on it's way to recovering(I only say that as the first response to the idea of a new 'roaring 20s is a comment about the ensuing great depression). 

 

https://www.businessinsider.com/economy-roaring-20s-rapid-growth-sthttps://fortune.com/2024/04/16/headlines-are-scary-right-now-but-ai-driven-bull-market-can-last/ock-market-analysis-ed-yardeni-2024-1

https://www.carsongroup.com/insights/blog/six-reasons-this-bull-market-is-alive-and-well/

https://www.fisherinvestments.com/en-us/insights/market-commentary/more-bull-market-in-store-for-2024

 

You have Amazon, Walmart, Aldi's, Target among others talking about the mistake they made in raising prices too much.

https://qz.com/target-walmart-amazon-walgreens-price-cuts-consumers-1851507920

 

Go into a Walmart and you see EVERYTHING is cheaper in the...10 days or so since they announced this. 

 

And you have some of the most brilliant minds talking about how strong this economy is...

 

 

And I don't know if there's been ANYONE more accurate than Bill Lee in the past few years.

They're ALL seeing incredible growth and just the start of a bull, but you're talking about 2008 when we were on the verge of again, the great depression? C'mon...LOL...