Author Topic: US Economy, the stock market , and other investment/savings strategies  (Read 413623 times)

Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1450 on: April 02, 2020, 04:05:46 PM »
Both witty and gloomy , , ,

ccp

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1451 on: April 02, 2020, 04:51:53 PM »
based on this I should sell everything while we have bump in the market.

who knows?

of course if we only listen to Dr Desai and the world stays in for 2 weeks the problem is solved:

https://www.yahoo.com/huffpost/doctor-rishi-desai-fox-news-085227730.html

Democrats love this shit so they can say if only the bad orange man (didn't he change his hair color recently to white?)
won't take anything seriously.

G M

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1452 on: April 02, 2020, 05:31:56 PM »

IMHO, the Greatest Depression is the much more likely outcome than being back to normal in June. If that is correct, then getting some money back is better than losing everything, yes?

I hope I am wrong, but hope isn’t a strategy. Don’t let normalicy bias bite you in the ass.


based on this I should sell everything while we have bump in the market.

who knows?

of course if we only listen to Dr Desai and the world stays in for 2 weeks the problem is solved:

https://www.yahoo.com/huffpost/doctor-rishi-desai-fox-news-085227730.html

Democrats love this shit so they can say if only the bad orange man (didn't he change his hair color recently to white?)
won't take anything seriously.

ccp

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1453 on: April 02, 2020, 06:57:03 PM »
well you have been right so far

if true, we will likely see a socialist response in my humble opinion


G M

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1454 on: April 02, 2020, 07:08:12 PM »
well you have been right so far

if true, we will likely see a socialist response in my humble opinion

That will be tried and then it will fail as it always has.

DougMacG

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1455 on: April 03, 2020, 08:55:53 AM »
As best as I can tell:

Most analytical focus seems to be on flattening the wave, but not so much on what comes after the peak of the wave.

The Commie Virus is now part of the human biome.  Even assuming that we keep within the now somewhat increased capacity of the health system, a goodly percentage of the human herd remains without immunity and as we lift current measures, not only do the original risks of inundating waves return, but either way those who haven't gotten it remain concerned and their behavior affected.

Yes.  Behaviors will be affected for a long time to come.  To ccp's question, what to do (with investments) today?  I struggle to address that for my daughter's investments and others.

Reality is challenging my optimism.  Best realistic case includes some major bumps in the road.  The health and economic issues are intertwined.  I knew when we test more, we would find more cases, but I am surprised to still see it getting worse with very widespread shutdowns in place.  We should see a peak and declining new infection numbers when?  When depends on where, but nationwide we should see something positive by the middle or end of April, don't you think?  Then what? 

If we all need masks and we all need sanitizers and there are none, then why predict optimism until the most basic protections are readily available.

There is real progress on immunization, but what date will it really available and by what date will a serious portion of the globe be immunized?  It's a long way off even if the tests in progress now are successful.

Stock markets used to precede economic markets by 6 months.  At this point one might say it hasn't fallen enough yet to fully encompass all the bad health and economic news and numbers to come.  Then when we really are on the rebound, how soon do people sense or anticipate that and how strongly does it come back?  No one knows but we are a long way from being able to lift travel bans, meaning a whole lot of industries face extended troubles, and pull down other industries with them.

Are you ready for the market reaction to the US deficit numbers?

My earlier market pessimism before came from the idea that other investors cannot handle the quarterly news of major companies taking revenue and profit hits from business in China.  That short term pessimism is ten times stronger now than then.

Looking back in this thread, I wrote:
Re: US Economy, the stock market: Coronavirus?
« Reply #1399 on: February 18, 2020, 11:07:37 AM »
What does everyone here think about market implications of this so-called Coronavirus?
1.  Medically, how does this end?
2.  Mathematically, how is this expanding?  Remember, information from China is likely false, understated.
3.  Economy of China:  If the economic impact only hit with a huge recession in China, how does that affect our markets, my 'growth stock funds'?
4.  If the virus hits epidemic levels elsewhere, what is that economic and market impact?
5.  If stock markets start to panic, how far does it go.


An hour later I wrote:
Trying to answer my own question, here is the Shanghai index for the last 3 months:
Stocks in China kept going up at the announcement of the virus, peaked in mid January.  Bottomed out (for now) around Feb 1 and is up since then.  This tells me there is no panic now.
What news of spread or trajectory makes this change?
There are fewer than 2000 deaths known worldwide so far.  Far lower even in China than auto accidents, cancer, etc.
https://www.worldometers.info/coronavirus/
The economic scare then has to do with the travel bans, quarantines and shut downs of economic activity.  I'm surprised this hasn't shown up in the numbers yet.
I am thinking I should be in an all cash position now and buy back in at the bottom.  That is against my nature but it is too late to panic after everyone else already has.
Ideas, advice?


Also see GM Reply #1403 February 25.    GM: I sold one urban property since then. 

The question today is, do the markets today already reflect all the bad news to come?  (Almost certainly no.  Look at them react to unemployment numbers that were basically government ordered, already known.)  If you get out today, will you know when to get back in?  (No.)

Dow chart lately:


If 26,000 was the old normal, call it 100%.  It went to peak 30k = 115%.  Today it is at 21k = 80% of 26k ( or 70% of the peak).

I would say, forget about the peak gone by and ask when does it get back to 26k?  If you still think that is by year end, that is a 24% return (up from  21k, the decision point today).  If you think that is 2 years out, that is a 24% return in two years, still not bad.  My point in asking these questions Feb 18 was that my stomach wasn't ready for the roller coaster ride in between.

We will get through this.  I don't know when.  It won't go to zero.  Don't you think Google, Apple, Amazon, United Health Group and a whole lot of new innovative companies are going to make a lot of money in the future?  There is plenty of money on the sidelines to buy back in once everyone scared has sold.

The part I hate about roller coasters is when they head straight down and then you see there is a sharp sideways turn at the bottom...  At the end you get off right where you started, out a few bucks and all shook up.   It's not a perfect analogy.  You can get off the stock market anywhere you want.
« Last Edit: April 03, 2020, 09:06:31 AM by DougMacG »

ccp

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thinking out loud
« Reply #1456 on: April 03, 2020, 09:26:05 AM »
Fauci thought in 2 weeks we could see evidence of flattening I think last week

I will be shocked  :-o it we don't see by end of April
what we are doing HAS to be helping

But Dr Desai on Martha McCAllum suggesting we all shut down for 2 weeks is wrong

two weeks would not be enough and one would have to isolate every human being on the planet from every other human being
NOT possible and just a stupid supposition
as far as I am concerned

Bill Gates in thinking in terms of computer logic or a computer hologram
This is not real world humanity.
I don't want to live at the whims of AI monitoring every inch of every person's movements moving as around like chess pieces with MSFT being the mastermind behind it all  - no chance

give liberty or death applies here for me.

I liked Tucker's valid points

at what point to we figure trying to save a portion 2/10ths of humanity is worth the destruction of our economy , society, way of life
and future ?

I remember seeing a movie of African hunters who when one gots too old and sick he  simply sat down to die while  the rest proceeded
on the hunt.   There was  nothing more they could  do for him and the rest had  to move on to survive

It is telling how Dems only want to blame Republicans and not themselves
no criticism of Dem governors who waited to do anything



Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1457 on: April 03, 2020, 12:09:01 PM »
Really good post Doug.

Crafty_Dog

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Wesbury: retail sales; industrial production
« Reply #1458 on: April 15, 2020, 10:41:18 AM »
Data Watch
________________________________________
Retail Sales Declined 8.7% in March To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 4/15/2020

Retail sales declined 8.7% in March (-8.5% including revisions to prior months), below the consensus expected 8.0% decline. Retail sales are down 6.2% versus a year ago.

Sales excluding autos declined 4.5% in March, (-4.3% including revisions to prior months). The consensus expected a 5.0% decline. These sales are down 1.7% in the past year. Excluding gas, sales declined 8.0% in March and are down 5.1% from a year ago.

The drop in sales in March was led by autos, restaurants & bars, clothing stores, and gas stations. The largest increase by far, was for food & beverage stores.

Sales excluding autos, building materials, and gas declined 3.5% in March. These sales were down at a 2.5% annual rate in Q1 versus the Q4 average.

Implications: Retail sales plummeted in March at a faster pace than any month on record, falling 8.7%. Sales declines were widespread, but led by autos, restaurants & bars, clothing & accessory stores, and gas stations. Auto sales fell 25.6%, which leaves room for further declines in April given government-mandated shutdowns. The same goes for restaurants & bars, where sales were down 26.5%. Sales in this category will decline sharply again in April. Sales at clothing & accessory stores fell 50.5%, which makes sense when everyone is too busy stocking up on food and other necessities. Gas station sales dropped 17.2%, a result of both lower prices and lower sales volume. The best-performing categories were food and beverage stores (supermarkets and groceries), up 25.6%, non-store retailers (internet and mail-order), up 3.1%, and general merchandise stores (including warehouse clubs), up 6.4%. Building materials & garden equipment rose 1.3%, possibly signaling relative resilience in the housing sector. "Core" sales, which exclude the most volatile categories of autos, building materials, and gas station sales, declined 3.5% in March and are down 0.7% from a year ago. Overall sales are down 6.2% from a year ago. Plugging these figures into our models suggests "real" (inflation-adjusted) consumer spending (goods and services, combined) fell at a roughly 2% annual rate in the first quarter and that real GDP declined at a roughly 3% rate, although we could adjust these figures later this month before the government releases its initial report on Q1 real GDP on April 29. This is an astounding turnaround from our pre-Coronavirus estimate that the economy was growing at a 3% rate in Q1, a combination of solid entrepreneurship, lower tax rates, and less of a regulatory burden. Now, it looks like the second quarter will be even worse than the first, with the steepest drop in real GDP for any quarter since the immediate aftermath of World War II or possibly the Great Depression in the 1930s. In the months ahead, the timing and pace of the recovery will be largely influenced by the timing and pace of governments at all levels easing restrictions on economic activity (even if gradually), which, in turn, depends on the spread of the virus as well as testing and therapies to fight it. Until we see some easing, expect the data to remain ugly.
======================

Industrial Production Declined 5.4% in March To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 4/15/2020

Industrial production declined 5.4% in March, below the consensus expected drop of 4.0%. Mining output fell 2.0% in March, while utilities dropped 4.0%.

Manufacturing, which excludes mining/utilities, declined 6.3% in March. Auto production dropped 28.0%, while non-auto manufacturing fell 4.5%. Auto production is down 26.5% versus a year ago, while non-auto manufacturing is down 5.0%.

The production of high-tech equipment fell 0.1% in March but is up 5.5% versus a year ago.

Overall capacity utilization dropped to 72.7% in March from 77.0% in February. Manufacturing capacity utilization declined to 70.3% in March from 75.0% in February.

Implications: Today's report on industrial production is our first look at the factory sector since broad-based shutdowns of the US economy to fight Coronavirus took effect, and boy was it a doozy. Headline industrial production and its manufacturing subcomponent plunged 5.4% and 6.3% respectively. These are the largest monthly declines for both series since early 1946, when the end of World War II led to a huge drop in armaments. Within manufacturing, auto production fell 28.0% in March, coming in just above the current record decline of 28.4% in Jan 2009 in the midst of the financial crisis. Given production shutdown since then, brace for an even steeper drop in April. Meanwhile, non-auto manufacturing fell 4.5% in March, the largest monthly drop on record. Mining output declined 2.0%, as extraction activity for oil, natural gas, and other minerals took a hit. The price of WTI crude is down roughly 68% since the beginning of January, pushing below the break-even level for many US producers, so we expect more weakness in this sector, going forward, as well. The crude oil market got hit from both sides, as global disruptions from the Coronavirus hit demand, while Saudi Arabia and Russia boosted supply in a quest to wash out US competitors. However, a recent announcement by President Trump that an agreement has been made with these producers to cut a significant portion of daily supply could help going forward, though cartel type agreements are notoriously unreliable.

Later this year, as the pandemic is dealt with, prices will rebound, with mining activity rising close behind. In other recent manufacturing news, the Empire State Index, which measures factory sentiment in the New York region, fell to -78.2 in April from -21.5 in March. This is the largest monthly drop on record and brings the index to its lowest reading on record, signaling more ugly data from the factory sector is on the way. Look for major drops in other regional manufacturing survey as the full hit from Coronavirus lockdowns makes its way into the data. On the housing front, the NAHB index, a measure of sentiment among homebuilders, fell to 30 in April from 72 in March, the largest monthly drop on record. The decline was primarily driven by a deterioration in the outlook for future sales and buyer foot traffic. Look for a decline in home building in the months ahead, but not as much of a decline as overall US economic activity, as many work crews in the sector are still legally allowed to work.
________________________________________

« Last Edit: April 15, 2020, 12:42:21 PM by Crafty_Dog »

DougMacG

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Re: US Economy, the stock market, End of April, is this the bottom?
« Reply #1459 on: April 29, 2020, 06:35:28 AM »
From the Scott G thread:
Politics & Religion / Scott Grannis: Things are looking up
« Last post by Crafty_Dog on April 28, 2020, 02:58:17 PM »
https://scottgrannis.blogspot.com/2020/04/things-are-looking-up.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FtMBeq+%28Calafia+Beach+Pundit%29

A number of important points are made there.  The doubling rate is under control.  Some states and businesses will be re-opening - cautiously.  The hospital capacity question seems to be answered.  The ventilators are there; don't seem to be the answer anyway.  Hand sanitizers and masks are coming.  Testing is way up.  Sunshine and summer coming fast.  We have moved along on the learning curve.  I hate to say this, but many of the most exposed and vulnerable already died.  In medical terms, was this the bottom?

On the investment side, can investors handle the rear view mirror news still to come.  Q1 GDP was downward - because we lost half of March.  Q2 will be downward because we lost all of April.  Quarterly earnings of almost everything, same.  Is there still going to be a sell off with every unemployment report and bad earnings report, or is the market going to be what it is supposed to, forward looking?

But if the first part is true, the 'recession' only lasted about 6 weeks.  If 21 states begin to reopen, economic activity next week is greater than economic activity last week.  And better yet the next week and the next month.  We did the 14 day quarantine 3 times over.  More states and more industries will open.  Places with forced closures didn't do much better than places without them, just pushed their curve further out, and constitutional issues are beginning to mount. Offices are building partitions and retail checkouts are building sneeze guards.  Maybe you wear a space suit, but if you need to fly, you eventually will go to the airport and do that.

If traffic court can operate by video, so can housing court, and so on.

There is pent up demand for many closed things, from hair cuts to dental work and medical treatments. Restaurant meals, with distancing.  People are wanting to invest more in their homes now that they have spent some time there.

Relapses of new outbreaks can be handled with immediate micro-closures.  We know how now.  With each new setback, we have better readiness, treatments, facilities, isolation possibilities, testing and 'herd immunity'.  And each day we move closer to a vaccine.  Maybe we even learned something that will help with the next coronavirus.

Economically speaking, was this the bottom?
« Last Edit: April 29, 2020, 03:44:57 PM by DougMacG »

Crafty_Dog

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Q1 Real GDP
« Reply #1460 on: April 29, 2020, 11:12:31 AM »
The First Estimate for Q1 Real GDP Growth is -4.8% at an Annual Rate To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 4/29/2020

The first estimate for Q1 real GDP growth is -4.8% at an annual rate, lagging the consensus expected -4.0%. Real GDP is up only 0.3% from a year ago.

Consumer spending was, by far, the largest drag on Q1 real GDP growth, with business investment in equipment, commercial construction, and inventories down, as well. Net exports and home building made large positive contributions to real GDP growth.

Personal consumption, business investment, and home building, what could be called "core private GDP," fell at a 6.6% annual rate in Q1 and is unchanged from a year ago.

The GDP price index increased at a 1.3% annual rate in Q1. Nominal GDP – real GDP plus inflation – dropped at a 3.5% rate in Q1 and is up 2.1% in the past year.

Implications: Real GDP fell at 4.8% annual rate in the first quarter, the largest drop since late 2008. Considering that the economy was cruising along at moderate growth through February, this signals an unprecedented monthly drop in economic activity in March. This drop obviously continued through April and therefore suggests an even deeper plunge in real GDP growth in Q2. We are penciling-in -30%, but the key factors determining the plunge are outside the realm of normal economics, including the pace of the spread of COVID19, the easing of legal restrictions on activity, as well as the development of therapies for the illness. To put -30% in perspective, the worst quarter since the winddown from World War II was -10% in the first quarter of 1958 on the heels of the Asian Flu. In the meantime, the drop in real GDP in Q1 this year was led by consumer spending, particularly spending on services, which fell at a 10.2% annual rate. The largest drops for services were for health care, restaurants & bars, recreation, and transportation. The slide in health care may seem odd, but many people are staying away from hospitals as well as the offices of doctors and dentists unless they have a very serious condition. Real (inflation-adjusted) spending on goods declined 1.3% overall, including large drops for autos and apparel, while food and beverages purchased for off-premise consumption rose at the fastest pace on record. Some observers may take heart in the reduction in the trade deficit in Q1. But the decline wasn't because of an increase in exports, which would have been good news, it was because imports fell faster than exports. Total trade declined at a 12.6% annual rate; not a good sign. One odd part of the report was that inventories only declined at a $16.3 billion annual rate in Q1, suggesting a bigger inventory reduction may be waiting in Q2. On the inflation front, the GDP deflator rose at a 1.3% annual rate in Q1, but we expect a negative print for Q2 based on the drop in commodity prices. In other recent news, the Richmond Fed index, a measure of mid-Atlantic factory sentiment, fell to -53 in April from +2 in March. That figure is the lowest on record. For perspective, the lowest during the Great Recession was -44 in February 2009. On the housing front, the Case-Shiller national home price index rose 0.5% in February and was up 4.2% from a year ago. Our best guess is that COVID19 will not greatly affect housing prices in the short run as both buyers and sellers flee the market.

Crafty_Dog

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Wesbury
« Reply #1461 on: May 11, 2020, 02:15:48 PM »
Monday Morning Outlook
________________________________________
S&P 3100, Dow 25750 To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 5/11/2020

In December 2018 with the S&P 500 at 2,500, we forecast it would hit 3,100 by the end of 2019 and then pushed our forecast to 3,250 as stocks soared. The S&P 500 rose 28.9% in 2019 and hit that revised target on the first day of trading in 2020.

We then raised the target to 3,650 for the end 2020, and the way stocks were moving higher in January and February made that forecast look reasonable. But then the world took a detour into the Coronavirus Contraction. As a result, we are adjusting our year-end 2020 target down to 3,100, with the Dow Jones Industrials average finishing at 25,750. That would be a moderate gain of 5.8% from the Friday close.

The range of plausible outcomes for the rest of 2020 is very wide right now. Key variables include factors that are normally irrelevant to forecasting markets such as the spread of the Coronavirus, how quickly the economy opens, the development of therapies or a vaccine to fight the disease, and how quickly people are willing to go back to normal.

With the economy getting crushed, some analysts are wondering how equities could have bounced so hard from the March lows. We understand their confusion. With unemployment likely above 15% and real GDP falling roughly 30% in Q2, how can equities be doing so well?

One key to understanding this is that investors don't buy shares of GDP, they buy ownership stakes in a distinct set of companies, many of which are doing quite well despite the general economic carnage.

Imagine a company that has a major competitor nearby. One day, completely out of the blue, the competitor's facilities are all destroyed by a meteor. Obviously, no one would celebrate this catastrophe. However, when competitors go away the enterprise value of the surviving company rises, and you don't have to be an astrophysicist to figure that out.

In many ways, the spread of the Coronavirus has given larger well-capitalized companies, particularly technology companies and big box stores that were allowed to stay open, an advantage over Main Street competitors. And unlike Main Street businesses, a larger share of these companies are publicly traded.

Meanwhile, our capitalized profits model for equities, based on profits and interest rates, suggests a 3,100 level for the S&P 500 would not be overvalued. To put this in context, a 3,100 level assumes that profits fall by 60% AND the yield on the 10-year Treasury Note climbs to 1.25%. We forecast profits will fall about 25% this year and the 10-year Treasury will rise to just 0.9% by year-end. In other words, even at 3,100 we believe the S&P 500 will still be undervalued. And with profits rising in 2021, we think the S&P 500 can then rise to 3,650, a year later than we originally forecast.

One reason to be bullish on equities is that these days Quantitative Easing by the Federal Reserve is going straight into the M2 money supply and not into excess reserves. In the past three months, M2 has climbed at a 66% annualized rate, the fastest rate we know of in history.

Meanwhile, the federal government has ramped up deficit spending (with unemployment insurance and loans/grants to small businesses) to try to offset private-sector losses in income. Regardless of what we think of these policies, the effect will be to support equity prices in the year ahead.

DougMacG

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Companies have always strived to present their financial results in the most flattering light. Now some are going a step further, presenting a new customi​z​ed metric they are calling ​"​ebitdac:​"​ earnings before interest, tax, depreciation, amortisation — and coronavirus.  This week Schenck Process, a German manufacturing group, added back €5.4​ million of first-quarter profits that it said it would have made were it not for the hit caused by state-mandated lockdowns. Its operating profit for the period — “adjusted ebitdac” of €18.3​ million​ — was almost 20 per cent higher than the same period a year earlier, rather than 16 per cent lower. Schenck Process is not the only company tinkering with the presentation of its results.​ (via Financial Times)​
https://www.ft.com/content/5467518c-1b68-4712-9e74-e7cc949d8002

DougMacG

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1463 on: May 14, 2020, 07:10:16 AM »
https://qz.com/1856783/the-us-economy-and-sp-500-index-of-stocks-are-out-of-whack/

The US economy and the stock market are the most out of whack since the dot-com bubble
May 13, 2020

If forecasts for a 30% to 40% decline in gross domestic product turn out to be accurate, then the US stock market’s valuation is more disjointed from the underlying economy than it’s been since the dot-com bubble in 2000. The Federal Reserve’s Nowcast, a statistical model based on economic indicators, forecasts a 31% contraction in GDP, while economists at JPMorgan estimate the economy could shrink as much as 40%.

The market capitalization of the companies in the S&P 500 Index, a benchmark that tracks 500 large US-listed stocks, is defying gravity. Investors are looking past the economy’s downtown, anticipating a time when growth rekindles. If JPMorgan’s estimates are accurate, the S&P 500 will soon be worth about 25% more than US GDP, assuming the stock market remains close to its value at the end of April 2020.

ccp

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1464 on: May 14, 2020, 08:22:58 AM »
Just like you posted
the "market " always over reacts

now there is the rush to get back in before the "other guy"

driving it all to thin atmosphere levels

let me know when Grannis calls the next bottom

if GM is right it might not matter

Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1465 on: May 14, 2020, 11:56:09 AM »
CCP:  Just posted on the Grannis thread.

Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1466 on: May 15, 2020, 11:51:21 AM »
Retail Sales Declined 16.4% in April To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 5/15/2020

Retail sales declined 16.4% in April, lagging the consensus expected 12.0% decline. Retail sales are down 21.6% versus a year ago.

Sales excluding autos declined 17.2% in April, (-17.1% including revisions to prior months). The consensus expected an 8.5% decline. These sales are down 18.8% in the past year. Excluding gas, sales declined 15.5% in April and are down 19.7% from a year ago.

The drop in sales in April was led by restaurants & bars, general merchandise stores, and food and beverage stores. The largest and only increase was for non-store retailers (internet & mail order).

Sales excluding autos, building materials, and gas declined 17.2% in April. If unchanged in May and June, these sales will be down at a 56.6% annual rate in Q2 versus the Q1 average.

Implications: Forget about retail sales for a minute. Initial unemployment claims came in at 2.98 million last week, continuing the recent spate of extremely high readings since March. However, initial claims have dropped for six weeks in a row after peaking at 6.87 million in late March, including a decline of 195,000 last week. Moreover, after the claims data were released yesterday it was reported that Connecticut accidentally overstated claims by about 270,000. Once fixed, this will show an even steeper decline in claims last week and we expect claims to come in around 2.1 million for the current week (reported next Thursday). In addition, we have heard anecdotal reports of an unusual number of fraudulent initial claims being made due to the temporary generosity of the program. As a result, we are following continuing claims, data for which lag initial claims by one week. Continuing claims hit a record high of 22.83 million two weeks ago and are likely to rise again in next week's report. At present, we are forecasting that continuing claims peak in late May, signaling a bottom for the overall US economy. Now back to retail sales, which plummeted in April at a faster pace than any month on record, falling 16.4%. Sales declines with only one of thirteen categories with higher sales. The drop was led by restaurants & bars, general merchandise stores, and food and beverage stores, with steep declines also at gas stations, for motor vehicles, furniture/electronics/appliances, as well as at clothing stores. Sales at restaurants & bars fell 29.5% but should see smaller declines moving forward given the partial reopening in many states. The same goes for general merchandise stores, where sales were down 20.8%. Surprisingly sales at food & beverage stores fell 13.1%, most likely due to people overstocking food and necessities the month before. (Most people didn't use their 200 rolls of toilet paper in one month). Gas station sales dropped 28.8%, a result of both lower prices and lower sales volume. The best-performing and only positive category was non-store retailers (internet and mail-order), up 8.4% in April and up 21.6% from a year ago. These sales now account for 19.4% of overall retail sales, an all-time record. "Core" sales, which exclude the most volatile categories of autos, building materials, and gas station sales, declined 17.2% in April and are down 17.6% from a year ago. Overall sales are down 21.6% from a year ago. The data show that the second quarter for real GDP will be much worse than the first, with the steepest drop in real GDP for any quarter since the immediate aftermath of World War II or possibly the Great Depression in the 1930s. The good news is we are starting to see some easing in restrictions; green shoots are starting to show up in the weekly high frequency data we follow, which you can find here. In inflation news yesterday, import prices fell 2.6% in April, as falling fuel prices led the way dropping 31.5%, while nonfuel imports also declined 0.5%. Meanwhile, export prices declined 3.3%, with prices dropping for both agricultural and nonagricultural exports. In the past year, import prices are down 6.8%, while export prices are down 7.0%.


Crafty_Dog

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Wesbury: Industrial Production
« Reply #1468 on: May 16, 2020, 12:40:58 PM »
second post

Data Watch
________________________________________
Industrial Production Declined 11.2% in April To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 5/15/2020

Industrial production declined 11.2% in April versus the consensus expected drop of 12.0%. Mining output fell 6.1% in April, while utilities dropped 0.9%.

Manufacturing, which excludes mining/utilities, dropped 13.7% in April. Auto production fell 71.7%, while non-auto manufacturing dropped 10.3%. Auto production is down 79.2% versus a year ago, while non-auto manufacturing is down 13.3%.

The production of high-tech equipment declined 3.0% in April but is up 4.2% versus a year ago.

Overall capacity utilization dropped to 64.9% in April from 73.2% in March. Manufacturing capacity utilization fell to 61.1% in April from 70.8% in March.

Implications: The drop in industrial production in April was the largest in the 101-year history of the index, as the first full month of pandemic-related shutdowns caused a broad-based collapse in activity. Headline industrial production and its manufacturing subcomponent plunged 11.2% and 13.7%, respectively, the largest monthly declines for both series on record. Within manufacturing, auto production fell 71.7%. Meanwhile, non-auto manufacturing fell 10.3% in April as well, demonstrating the widespread nature of factory shutdowns. But it wasn't just the factory sector that was weak in April. Mining declined 6.1%, as extraction activity for oil, natural gas, and other minerals took a hit. After the front-month futures contract briefly went negative in mid-April, the price of WTI crude has since recovered. But it's still down roughly 55% since the beginning of January and below the break-even level for many US producers. As a result, we expect more weakness in this sector in the months ahead. The crude oil market got hit from both sides, as global disruptions from the Coronavirus hit demand, while Saudi Arabia and Russia boosted supply in a quest to wash out US competitors. Later this year, as the pandemic eases, prices should rebound, with mining activity recovering close behind. Note that given this year's weather patterns, we would normally have expected utility output to rise this April. Instead, it slipped 0.9%, likely due to less utility demand from offices and stores around the country. While today's report may leave a bad taste in your mouth, it's important to remember that the weakness was largely anticipated. High frequency data indicate that some forms of economic activity are already reviving, and we expect the overall level of output to bottom very soon, perhaps later this month. As more areas of the country begin to reopen, a return to growth is on the horizon by mid-year. In other recent manufacturing news, the Empire State Index, which measures factory sentiment in the New York region, rose to -48.5 in May from -78.2 in April. While this indicates a continued contraction, it also represents the largest one-month increase in the index since 2003, signaling improvement, though from a very low baseline. In other words, New York was getting worse, but at a slower rate. That may not seem like good news, but it's a necessary step before output starts improving again

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Re: US Economy, the stock market: Coronavirus?
« Reply #1469 on: June 04, 2020, 09:48:29 PM »
What does everyone here think about market implications of this so-called Coronavirus?
1.  Medically, how does this end?

When the infected die off. Based on the information available, expect something similar to the 1918 Spanish Flu as a best case scenario.


2.  Mathematically, how is this expanding?  Remember, information from China is likely false, understated.

Yes. China is lying it's ass off. Look how rapidly it's gone global. Unless you are in an underground bunker, this will reach where you live.

3.  Economy of China:  If the economic impact only hit with a huge recession in China, how does that affect our markets, my 'growth stock funds'?

The whole global debt-based economy is fixing to go up in flames. We never fixed the core issues from 2008, and now a giant black swan has arrived.

4.  If the virus hits epidemic levels elsewhere, what is that economic and market impact?

TEOTWAWKI

5.  If stock markets start to panic, how far does it go.

1934

I am thinking I should be in an all cash position now and buy back in at the bottom.  That is against my nature but it is too late to panic after everyone else already has.

Some cash, some gold and silver and a whole bunch of guns, ammo, food and water. Beans, bullets, and bandages. Hospitals will become death zones. Avoid getting sick. Expect the cities to burn.


Ideas, advice?

Liquidate your urban real estate now.

https://alphanewsmn.com/minneapolis-city-council/


DougMacG

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quote author=DougMacG link=topic=1148.msg125625#msg125625 date=1590169747]
Pandemic peak in US was April 21.
--------------------------------

May jobs report up 2.5 million.  "Experts" estimates off by 10.5 million.

https://www.cnbc.com/2020/06/05/jobs-report-may-2020.html

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WSJ: Bull Market not as big as you think.
« Reply #1471 on: June 05, 2020, 03:35:05 PM »
This Bull Market Isn’t as Big as You Think
Just a few big winners are responsible for most of the stock market’s rapid recovery

PHOTO: ALEX NABAUM

By Jason Zweig
June 5, 2020 10:00 am ET

The gap between Wall Street and Main Street has never seemed wider—but much of it is an illusion.

Since it bottomed on March 23, the S&P 500 has shot up almost 40%—the highest return over so short a period since 1933, according to S&P Dow Jones Indices. For the year-to-date, the S&P 500 is down less than 3%, counting dividends. Meanwhile, 108,000 Americans have died in a pandemic, 21 million are out of work and the country is seething with civil unrest.

This disconnect isn’t as extreme as it seems. Beneath the surface, much of the stock market is suffering, too. Most stocks are down this year, many by 20% or more. A few fortunate winners have generated big gains, fueling the misperception that losses have been minimal. The result is a market that isn’t as irrationally exuberant as it might appear.

SHARE YOUR THOUGHTS
Is the stock market oblivious to economic hardship? Join the conversation below.

U.S. stocks as a whole are far from cheap by historical standards, but the market isn’t blind to the calamities that surround us.

Yes, for the year to date, Zoom Video Communications Inc. ZM -1.35% is up 209%, Regeneron Pharmaceuticals Inc. 59% and Amazon.com Inc. 33%. But entire industries have been flattened: Earlier this week, airlines were down an average of 52% year to date; banks, 33%; energy, 32%; autos, 30%; consumer finance, 27%. Even utilities were down 5%.

Overall, of the 3,470 stocks in the Wilshire 5000 index that traded between Dec. 31, 2019, and June 2, 73% had negative returns for the year to date.

It isn’t unusual for the stock market to split into a few extreme winners and lots of losers. In 1973, a few darlings rose to near-record valuations while most stocks fell miserably. In 1999, technology shares shot up more than 80% even as many companies in the broader market languished and Warren Buffett’s Berkshire Hathaway Inc. fell 20%.

Seldom, however, has the gap between the haves and the have-nots been as wide as it is now.

In the first five months of this year, big growth stocks rose 6.1% while small, low-priced “value” stocks lost 25.6%. That was the biggest gap in performance between them over any such period since early 1999 and the second widest on record back to 1986, according to AJO, a Philadelphia-based investment firm.

Haves vs. Have-Nots
Despite the pandemic, massive unemployment and growing social unrest, U.S. stocks are down only a few percentage points in 2020. This helps mask wide return disparities.

Average return

Year to date through end of May

20

%

10

Most expensive stocks

0

Cheapest

–10

Return

disparity

–20

–30

2010

’15

’20

Note: S&P 500’s 50 priciest and 50 cheapest stocks based on price/earnings ratio on Dec. 31 of the previous year. Excludes financials, real estate, and companies with negative P/E ratios or P/E ratios above 100. Returns don’t include dividends.

Source: FactSet
The 50 most-expensive stocks in the S&P 500 as of last Dec. 31 were up an average of 11.3% through June 3, according to Drew Dickson, chief investment officer at London-based Albert Bridge Capital LLP. The 50 cheapest stocks, meanwhile, were down an average of 16.8%.

“People want to pay even more than they did for the stocks they already loved, and even less for the stocks that they didn’t,” says Mr. Dickson. “There’s no reason why that should be the case, other than a very fearful market thinking that big, expensive, high-quality companies must be safer at any price.”

Already out of favor going into 2020, small and value stocks suffered further as investors fled to perceived safety amid the pandemic and economic lockdown.

In recent days, small and value stocks have begun to show signs of recovery as the biggest, hottest stocks have flagged.

After all, when large growth stocks are “priced to perfection, they have to deliver on that just to maintain their valuation,” warns Nili Gilbert, co-founder and portfolio manager at Matarin Capital Management LLC in New York.

Such hot stocks as Amazon, Advanced Micro Devices Inc., Netflix Inc. and Salesforce.com Inc. are all trading for more than 50 times their anticipated earnings for 2020, according to FactSet.

“Maybe now, as the market believes that we’re going to be able to recover, some of those heavier industries, like cyclicals, materials and industrials, will lead the charge,” says Ms. Gilbert. “The expectations [for small stocks and value stocks] have gotten so low that that’s become a catalyst in itself.”

Crafty_Dog

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Wesbury: Unemployment numbers
« Reply #1472 on: June 08, 2020, 12:00:18 PM »
The Recession is Over To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 6/8/2020

The recession that started in March is the sharpest downturn since the Great Depression. As it turns out, it was also the shortest.

Friday's employment report should leave little doubt that the US economy has already hit bottom and is starting to recover. Every economist brave enough to make a public forecast thought nonfarm payrolls would drop in May and the unemployment rate would continue to rise. Instead, it was the opposite: nonfarm payrolls rose 2.5 million, and the unemployment rate dropped to 13.3%.

This doesn't mean the US is fully recovered, or even close; a full recovery is going to take at least a few years. But look for more positive numbers from here on out, including next week's reports on retail sales, industrial production, and home building.

Paul Krugman tweeted the possibility of the Trump Administration cooking the books, but that's absurd. Jason Furman, one of President Obama's top economists, pointed out that the Bureau of Labor Statistics has 2,400 career staffers and only one political appointee, with no ability to cook the books. The odds of a conspiracy among these career civil servants to help the Trump Administration are zero.

Some analysts have been saying that the unique nature of the economic downturn has made the unemployment rate unreliable, because, for example, PPP loans have allowed furloughed workers to be paid, even though they aren't working, so technically, some say, they are unemployed. Counting these workers as unemployed would have put the jobless rate at 16.3% in May versus the official report of 13.3%.

However, using the same method in April would have meant that jobless rate would have been reported as 19.5%, not the official estimate of 14.7%, which means the drop in the jobless rate in May would have been 3.2 percentage points (19.5% to 16.3%), not the 1.4 points reported Friday. And it's the change in the unemployment rate that matters for financial markets.

Meanwhile, initial jobless claims fell for the ninth consecutive week, and continuing claims remain below the peak hit in the week ending May 9, both consistent with an economy that is already hit bottom.

Another piece of evidence supporting the case for a recovery is that tax receipts look better. Every day the Treasury Department releases figures on various categories of tax receipts. These receipts vary wildly depending on the day of the week and the time of the month, so we like to compare them to 2015, because that was the last year the number of days in March through December fell on the same days of the week as 2020.

In the past five workdays, the Treasury collected $56.8 billion individual income and payroll taxes withheld from paychecks, up 11.8% from the same days in 2015. A month ago, in early May (specifically, the five workdays through May 7), these receipts were up 7.1% versus 2015. This acceleration signals the economy has turned a corner.

Which brings us to our outlook for equities. A month ago, with the S&P 500 at 2930, we projected that stocks would recover to 3100 by year end. But now we're barely under 3200. We continue to expect more gains, but don't expect it to be a straight line, with the S&P 500 finishing the year around 3350 and the Dow Jones Industrials average at 28,500.

Profits will be down substantially in the second quarter, but should recover strongly in the several quarters thereafter. Meanwhile, the money supply is growing rapidly, and the Federal Reserve is prepared to keep monetary policy loose for the foreseeable future, as should be clear after Wednesday's meeting.

The US has gone through tremendous turmoil so far this year, with a response to COVID-19 that included unprecedentedly widespread government-mandated economic shutdowns, followed by a combination of legitimate protests, riots, and looting. No one knows for sure what the second half will bring, much less 2021 and beyond. But we think that, like in the past, those who have faith in the future will be rewarded.

Crafty_Dog

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Stratfor: Conflicting data
« Reply #1473 on: June 11, 2020, 12:03:25 PM »
Conflicting Data Muddies the U.S. Economic Outlook
Michael Monderer
Michael Monderer
Senior Analyst for Global Economics, Stratfor
5 MINS READ
Jun 10, 2020 | 17:06 GMT

A woman walks past closed shopfronts in what would be a normally busy fashion district in Los Angeles, California, on May 4, 2020. The U.S. economy has lost roughly 20 million jobs since the onset of the country’s COVID-19 outbreak in February.

HIGHLIGHTS

As evidenced by the contradictory numbers in the latest U.S. jobs report, Washington will be forced to chart its economic recovery from the COVID-19 crisis with fiscal policies based on either outdated or unreliable data....

The United States and other governments around the world face difficult policy decisions on fiscal stimulus amid great uncertainty regarding the course of their economies in light of the global COVID-19 crisis. But as evidenced by the conflicting data in the latest jobs report released by the U.S. Bureau of Labor Statistics (BLS), it's proving difficult to find numbers and models that are both timely and use reliable data in order to gauge when economies will begin coming out of recovery on their own. Economic forecasts will be increasingly put under the microscope, making it important to understand what these predictions do and don't tell us.

The Risk of Relying on Employment Numbers

The exact timing of the trough of a recession says nothing about the duration or strength of recovery (e.g., whether it is  "V-shaped" or some other alphabetical shape), but the speed of recovery is important when determining where and how to inject more stimulus into the economy. The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a private research institution, says the U.S. recession began in March when the BLS's employment survey fell from its February peak of 152.4 million, thus ending 128 months of consecutive expansion — the longest in U.S. history.

The NBER recession declaration, however, is unusual in that it was based almost entirely on employment data without waiting for the release of more traditional, retrospective national income and product data for the second quarter of 2020. In the United States, the slowdown is due entirely to lockdown measures associated with the COVID-19 pandemic and not the effects of economic policy. Yet, there is a question of whether the U.S. economy is now in recovery as lockdowns increasingly ease and people return to work, particularly in high-contact service industries such as restaurants and personal services.

It's unorthodox to define recession solely by using unemployment data. The May unemployment rate for the United States fell to 13.3 percent from 14.7 percent in April, which by an unemployment measure alone suggests the trough of a short-lived recession occurred in either April or early May. Non-farm payrolls fell in March and April, but improved by a net 2.5 million in May. Given the unprecedented nature of the current global situation, however, there are considerable difficulties with the data as reported, which may understate the amount of continued unemployment.

The BLS defines unemployment as those who aren't working but are actively seeking employment. Some states, however, have waived the requirement for recipients of unemployment benefits to be looking actively for work, which would ordinarily put them out of the workforce per the BLS definition.

The BLS's household survey may have also misclassified about 5 million people as employed, but absent from work rather than unemployed or temporarily laid off.

It's unclear whether workers receiving benefits from the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act were counted as unemployed.

Response rates to the household and establishment surveys were down, which affected sample-based estimates.

Moreover, the data in the latest U.S. jobs report conflicts not only with itself, but also with other alternative real-time measures of economic activity.

The BLS reported that nearly 21 million people were unemployed in May. But it also reported that in the week covered by its surveys nearly 30 million Americans were getting unemployment benefits.

Despite dropping in May, weekly claims for new unemployment are still extraordinarily high, which suggests many people are continuing to lose jobs.

Given the severity and suddenness of the COVID-19 lockdown in the United States, traditional GDP data substantially lags other indicators. Alternative, high-frequency data continues to show a mixed picture for the U.S. economy.

In the most recent weekly report, same-store sales (those by chain retailers) were down by 7.5 percent, albeit that compares with an 8.5 percent drop the previous week.

Restaurant bookings are increasing slowly.

Mortgage demand has recovered and is nearly back to pre-COVID levels.

Electricity demand is down overall, even as residential demand increases in some regions.

Public transit use is slowly rising, but still down from earlier in the year.

The number of active oil rigs drilling for oil is down by two-thirds since the beginning of 2020.

Making Decisions With Murky Data

As the U.S. government looks to make decisions about future stimulus, it will be forced to rely on either delayed data or data with gaps and deficiencies. Most economists think it's too early to declare an end to the U.S. recession, which would be among the shortest on record. The consensus view among economists is that additional government support will continue to be needed, especially as there is not yet information indicating whether many of the current job losses are permanent or if business bankruptcies will increase. Private investment, which had declined for three previous quarters in 2019, is almost certain to have suffered further this year, which will not only affect long-term growth trends but also points to the need for extended stimulus, even after the economic recovery begins.

As evidenced by the conflicting numbers in the latest jobs report, the U.S. government will be forced to chart its economic recovery from the COVID-19 crisis with fiscal policies based on either outdated or unreliable data.

Republican lawmakers, however, have been quick to say that new fiscal stimulus should be restrained based on the latest jobs data, and the U.S. Senate is not expected to take up additional measures until July when many CARES Act benefits expire. Whether or not the lack of a timely and large fiscal stimulus will prolong the economic slowdown and further retard recovery remains to be seen. But the United States, of course, will not be alone in making such decisions, as countries everywhere will be forced to act in the face of insufficient and uncertain information.

Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1474 on: July 02, 2020, 12:35:46 PM »
Nonfarm Payrolls Rose 4.80 Million in June To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 7/2/2020

Nonfarm payrolls rose 4.80 million in June, beating the consensus expected gain of 3.23 million.
Private sector payrolls rose 4.767 million in June. The largest increases were for restaurants & bars (2.088 million), retail (740,000), and education & health services (568,000). Manufacturing rose 356,000 while government increased 33,000.

The unemployment rate dropped to 11.1% in June from 13.3% in May.

Average hourly earnings – cash earnings, excluding irregular bonuses/commissions and fringe benefits – fell 1.2% in June but are up 5.0% versus a year ago. Aggregate hours worked rose 3.6% in June but are down 8.9% from a year ago.

Implications: The wild ride continues. After plummeting at the fastest pace ever in April, nonfarm payrolls rose at the fastest pace ever in May and have done so again in June, adding 4.8 million jobs for the month. Even better, almost all of the gain was in the private sector, with leisure and hospitality leading the way, while retail, education & health services, and manufacturing also added a substantial number of jobs, as well. The labor market has a long road ahead to be fully-healed, but, in the past two months, has recovered one-third of the payrolls lost in March and April. Civilian employment, an alternative measure of jobs that includes small-business start-ups, tells a similar story, up 4.94 million in June and also regaining in May and June one-third of the employment lost in March and April. Another piece of relatively good news is that the unemployment rate, which the consensus expected to come in at 12.5%, arrived at 11.1%, instead. That's still very high by historical standards, but much lower than the peak of 14.7% in April. The labor force (people working or looking for work) increased by 1.7 million in June after a similar gain in May, although it's still down substantially from earlier this year. The worst headline of the report was that average hourly earnings fell 1.2% in June. However, recent declines are a return to normal after a huge surge in April. Job losses in April were concentrated among lower-paid workers, so average hourly earnings rose because those still working typically made more money. Now, as lower-paid workers are rehired, their pay levels reduce average earnings. We like to track what the report means for workers' earnings, and today's news was good. Total hours worked increased 3.6% in June. Multiplying hours by earnings shows that total earnings rose 2.4%. That said, total earnings are still down 4.3% versus a year ago, which means workers have less purchasing power generated by actual production, versus purchasing power coming from government benefits. As we said last month, the unemployment rate is going to remain at unusually high levels for at least the next few months, but today's report is a testament to the entrepreneurial spirit and how quickly businesses have been able to adapt to a global pandemic and unprecedented shutdowns of the US economy. A full recovery is still a long way off, but there should no doubt at this point that the recovery has started.



====================================================================

In the aftermath of recent strong gains in jobs, some analysts have been latching onto pandemic-related classification errors to claim the headline unemployment rate is at best distorted to show an overly optimistic picture of the labor market, and at worst a downright lie to try and manipulate public perceptions. These accusations relate to whether a worker who is on temporary leave from a job due to the pandemic should be recorded as "employed but absent from work due to other reasons" or "unemployed on temporary layoff." If a given number of workers affected by the pandemic are classified as the former it makes the unemployment rate look better than if they are classified as the latter.

Thankfully, the Bureau of Labor Statistics has been transparently addressing this in the footnotes of their reports. If all those classified as "employed but absent from work due to other reasons" were reclassified as "unemployed on temporary layoff" in June, the result would have been an unemployment rate of 12.1%, instead of the official 11.1%.

However, its crucial to point out that even though the level of the unemployment rate would have been higher in June, its decline would have been larger. The official rate fell 2.2% in June, from 13.3% to 11.1%. With reclassification, the decline would have been nearly twice as large, falling 4.2% in June, from 16.3% to 12.1%. Given that it's the change in the unemployment rate that matters for financial markets when gauging the strength of the economic recovery, reclassification reinforces the optimistic outlook.

Bryce Gill - Economist
« Last Edit: July 02, 2020, 12:37:58 PM by Crafty_Dog »

ccp

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1475 on: July 02, 2020, 01:58:50 PM »
for tech stocks it is the gogo 90's all over again

Crafty_Dog

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CPI up .6%
« Reply #1476 on: July 14, 2020, 10:37:10 AM »
The Consumer Price Index Rose 0.6% in June To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 7/14/2020

The Consumer Price Index (CPI) rose 0.6% in June, coming in above the consensus expected +0.5%. The CPI is up 0.6% from a year ago.

Energy prices rose 5.1% in June, while food prices increased 0.6%. The "core" CPI, which excludes food and energy, rose 0.2% in June, versus a consensus expected +0.1%. Core prices are up 1.2% versus a year ago.

Real average hourly earnings – the cash earnings of all workers, adjusted for inflation – declined 1.7% in June but are up 4.3% in the past year. Real average weekly earnings are up 4.6% in the past year.

Implications: Following three months of declines, the consumer price index (CPI) turned higher in June, rising 0.6% to tie the largest monthly increase since 2009. Gasoline prices (+12.3%), beef (+4.8%) and physicians services (+0.5%) lead the rise. Energy turned higher for the first time in five months, rising 5.1% in June as fuel prices offset a decline in the electricity index. Food prices increased 0.6% in May, with rising costs for meats, poultry, fish, and eggs leading a rise across most major food categories. Strip out the impacts from these typically volatile food and energy sectors, and "core" prices increased 0.2% in June. In addition to physicians services, prices for hospital care (+0.4%), home furnishings (+0.4%), and airline fares (+2.6%) were key contributors, while heavily COVID impacted industries like autos and recreation continued to have price declines. The Coronavirus and government-mandated shutdowns remain a factor clouding the data. While states are progressing in the reopening process (outside of restaurants and bars in areas with high COVID cases), businesses continue to operate under restrictions of reduced capacity, which looks likely to continue for the foreseeable future. We expect prices will continue to rise in the months ahead towards the 2% - 3% annual pace of inflation that was in effect before the Coronavirus wreaked havoc on global economies. While we are still battling the virus, the worst - from an economic perspective - appears to be behind us, and indications from the employment front suggest that the economy bottomed back in May, making the COVID recession one of the sharpest recessions on record, but also the shortest. Even with the drastic downward impact on business activity and prices from the virus, consumer prices are still up 0.6% in the past year, though that is a marked slowdown from the upward trend in inflation prior to the Coronavirus. Core prices remain up 1.2% versus a year ago. What might, at first glance, look like the worst news in today's report was that "real" (inflation-adjusted) average hourly earnings fell 1.7% in June. However, the June decline should really be viewed as a positive signal. As the economy lost more than 22 million jobs in March and April, lower wage sectors were hit particularly hard. With fewer workers operating in the lower wage positions, it pushed up the average hourly wage among those whose jobs remained. In May and June, nearly 7.5 million net nonfarm jobs returned, pushing average wages lower. In the months ahead, real earnings per hour will further decline as the return to work continues. The economic recovery has begun, the worst economic quarter in the post-World War II era is behind us, and the question now shifts to how quickly we recover.

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June Industrial Production beats expectations
« Reply #1477 on: July 15, 2020, 10:49:06 AM »
Industrial Production Increased 5.4% in June To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 7/15/2020

Industrial production increased 5.4% in June, beating the consensus expected gain of 4.3%. Mining output fell 2.9% in June, while utilities rose 4.2%.

Manufacturing, which excludes mining/utilities, increased 7.2% in June. Auto production jumped 105.0%, while non-auto manufacturing rose 3.9%. Auto production is down 24.7% versus a year ago, while non-auto manufacturing is down 10.1%.

The production of high-tech equipment increased 1.8% in June and is up 1.8% versus a year ago.

Overall capacity utilization increased to 68.6% in June from 65.1% in May. Manufacturing capacity utilization rose to 66.9% in June from 62.3% in April.

Implications: The industrial sector continued its recovery in June, posting the largest monthly gain since 1959. However, that improvement is from a very low baseline. Even with June's impressive headline gain, Q2 as a whole was down at a 42.6% annualized rate versus the Q1 average, the largest quarterly drop since 1946 during the winddown in the industrial sector after WW2. While there is still a ways to go before a full recovery, the details of today's report were healthy. Within manufacturing, auto production surged 105% in June, following a similarly strong gain of 120.1% in May, as car and truck factories continued to resume operations. Expect more large gains in the auto sector in the months ahead, as production in June was still 24.4% below the level reached in February, before the Coronavirus and related shutdowns hit the US. Meanwhile, non-auto manufacturing rose 3.9% in June, its largest monthly gain on record. While some sectors of the economy, like restaurants, bars, and hotels are at risk due to re-closure and shutdowns, the factory sector is less at risk, and should keep recovering. Outside the factory sector, activity remained mixed. Utilities output rose 4.2% in June, as warmer weather drove demand for air conditioning and offices and retail stores around the country continued to reopen. Meanwhile, mining declined 2.9%, as extraction activity for oil, natural gas, and other minerals continued to fall. Despite a recent rebound, WTI crude oil prices are still down roughly 35% since the beginning of January and below the break-even level for many US producers, which is holding down activity. One bright spot is that the number of oil and gas rigs in the US has leveled off after falling roughly 65% since the pandemic began, so it looks like most of the damage is behind us. As economic activity continues to rebound, demand for energy grows, and the surviving firms consolidate, mining eventually will be a tailwind for industrial production. In other manufacturing news this morning, the Empire State Index, which measures factory sentiment in the New York region, rose to +17.2 in July from -0.2 in June. This is the first positive reading from the index since February and signals that the huge declines have passed and manufacturing activity in New York has begun to rebound. Finally, on the inflation front, import prices increased 1.4% in June, as fuel led the way rising 21.9%, while nonfuel imports rose 0.3%. Meanwhile, export prices increased 1.4%, with prices rising for both agricultural and nonagricultural exports. In the past year, import prices are down 3.8%, while export prices are down 4.4%.

ccp

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insider trading
« Reply #1478 on: August 17, 2020, 05:32:17 AM »
https://thehill.com/opinion/finance/512174-the-kodak-loan-insider-trading-in-a-new-garb

noticed same thing with the vaccine stocks

they for no reason go up significantly and then next day or so is announcement of Federal money.

not sure if just company insiders
or criminals eaves dropping or leaks from government employees  .  most likely all the above

Crafty_Dog

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WSJ: Economy limping, market booming
« Reply #1479 on: September 04, 2020, 08:01:28 AM »
The Economy Is Limping, but Wall Street Is Booming
Panicky investors, pandemic-hit companies turned to banks in the first half, driving fees to an eight-year high

Wall Street has benefited from the Federal Reserve reacting to the pandemic by flooding the system with money.
PHOTO: SPENCER PLATT/GETTY IMAGES
By Liz Hoffman
Sept. 3, 2020 2:41 pm ET


Investment-banking and trading revenues hit an eight-year high in the first half of 2020, a counterintuitive boom that shows the heavy hand of the Federal Reserve and a growing gulf between financial markets and the real economy.

Global banks raked in fees from companies scrambling to raise cash and panicky investors scrambling to sell, then buy again as markets surged. Revenue in these traditional Wall Street businesses was 32% higher than in the same period last year, bucking years of sideways and downward drifts, according to industry research group Coalition, which compiled data from the 12 largest global investment-banking firms.

The surge is being driven by two factors: huge need for cash from pandemic-hit companies and the Federal Reserve flooding the system with money, which props up market prices and nudges investors into its riskier corners. The result is a borrowing boom that has pulled companies back from the ledge and lifted Wall Street’s fortunes.

Revenue at the 12 largest investment banksin the first six months of each year
Source: Coalition
.billion
Investmentbanking
Equitiestrading
Fixed-incometrading
2015
'16
'17
'18
'19
'20
0
20
40
60
80
$100
“The Fed created a bubble where life could go on—not unlike the NBA bubble,” said Yousef Abbasi, a strategist at investment bank StoneX Group Inc., referring to the bizarro basketball season happening in quarantine at Disney World in Florida. “That explains the disconnect we see between the economy and the market.”


Executives have been quick to describe the windfall as temporary, hoping to lower expectations from investors and head off criticism from politicians. “Cut it in half,” JPMorgan JPM +1.13% Chase & Co. Chief Executive James Dimon predicted in July of his firm’s $11 billion in quarterly trading revenue.

The gap between the real economy and financial markets has only widened since JPMorgan and its peers closed their second-quarter books. The S&P 500 and the tech-heavy Nasdaq Composite Index both closed at fresh highs on Wednesday, in sharp contrast to a limping economy. Tens of millions of Americans are unemployed, and preliminary jobs data released this week suggests the economy added far fewer jobs than anticipated in August.

Issuance of highly rated corporate debt is up 29% globally and 72% in the U.S. by dollar volume this year, according to Dealogic. PepsiCo Inc., PEP -0.20% Walt Disney Co., DIS -1.68% Verizon Communications Inc. VZ +0.48% and other blue-chip companies pried the market open in March. Riskier companies followed.

“Companies and investors learned the lesson from 2008, which is to create fortress balance sheets as quickly and holistically as you can,” said Thomas Sheehan, Bank of America Corp. BAC +1.33% ’s co-head of investment banking.

Records have fallen one after another. Ford Motor Co. F -0.25% raised $8 billion in the largest junk-bond deal ever. Google’s parent company, Alphabet Inc., sold the cheapest five-year bond on record, paying just 0.45%, according to Refinitiv.

Some deals bore Wall Street’s fingerprints with intricate structures that allowed cheaper borrowing, like United Airlines Holdings Inc.’s UAL -1.58% Goldman-led deal backed by the carrier’s frequent-flier program. Other companies, like Ford, raised more than they asked for.

“The idea is to build a bridge to a reopened economy,” said Susie Scher, who co-runs the capital-markets group at Goldman Sachs Group Inc. GS -0.13% “If the story is good enough and investors believe a company can get to the other side of this, the demand is there.”

Goldman itself took advantage, selling $2.5 billion in bonds on the same day in March that it helped raise more than $13 billion for clients including Verizon and Exxon Mobil Corp. XOM +0.01%

That steady supply of new securities fed Wall Street’s trading machine, which purred back to life after years of decline.

Revenue from fixed-income trading, which includes bonds and products linked to interest rates, rose 56% from 2019’s first half to $55 billion, according to Coalition. Investors scrambled to cut risk, then loaded up on safer names for what looks to be a prolonged period of low yields. “Investors need to own something, and investment-grade debt looks attractive,” Ms. Scher said.

Equities revenue was more mixed, up from a year earlier but hovering around its five-year average. Simple stock orders jumped as day traders piled into the market on retail platforms like Robinhood Markets Inc.

But hedge funds, some of Wall Street’s best-paying customers, retreated from the market to protect gains and meet margin calls. (Banks lend money against hedge funds’ portfolios. When prices fall, funds must pony up more cash or sell assets to keep their borrowing levels in check.) Morgan Stanley’s MS -0.87% hedge-fund clients held 15% fewer assets at the firm in the second quarter than in the first.

Another laggard has been merger activity, which is down by more than half from a year ago. But appetite is starting to stir, especially among private-equity firms—and with it, the prospect of acquisition-related borrowings. The Wall Street Journal reported Wednesday on a private-equity bid for railroad giant Kansas City Southern.

Write to Liz Hoffman at liz.hoffman@wsj.com

DougMacG

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1480 on: October 25, 2020, 06:45:14 AM »
What will markets do if (unlikely) Dems sweep House, Senate, Presidency?  What will you do on that possible news?

Sell, sell, sell?

I will reduce my 0.0% position in the stock market and will step up the attempt to sell three properties by year end.

Even cash may become contraband.

Ready for another government induced 'business cycle' roller coaster ride?
« Last Edit: October 25, 2020, 08:38:55 AM by DougMacG »

Crafty_Dog

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1481 on: October 25, 2020, 07:13:37 AM »
I confess myself baffled at the market being as strong as it has been given the uncertainty and baffled at what to do.

DougMacG

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1482 on: October 25, 2020, 08:54:33 AM »
I confess myself baffled at the market being as strong as it has been given the uncertainty and baffled at what to do.

Yes.  Everyone seems to see some version of divided government coming out of this, some version of more of the same.  Better to be invested than not. 

If the market is looking 6 months ahead, the economy will be coming out of coronavirus somewhere near that timeframe so why panic now, people think.

It is possible that Republicans sweep these elections, but if you believe mainstream polling for the past year, it's more likely Democrats sweep it all.  That is not a neutral event for income and investments.  Higher tax rates, greater regulation, higher energy prices, industry takeovers and shutdowns - we know what that does to an economy.  Is that what these big wall street and silicon valley investors want?  Even if you only own giants like Google and Amazon that benefit from government regulation, their income is proportional to the strength of the economy.  How does that not collapse under the proposals we have heard?
« Last Edit: October 25, 2020, 10:58:49 AM by DougMacG »

DougMacG

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Re: US Economy, the stock market under Trump
« Reply #1483 on: November 25, 2020, 06:01:05 AM »


Source:  NYT this morning

Crafty_Dog

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WSJ: The economy going forward
« Reply #1484 on: December 11, 2020, 05:27:59 PM »
he story of the U.S. economy in 2020 will consist of three major shocks: Covid, racial unrest and an election that divided the nation.

The story of 2021, however, will be of a great comeback.

But let’s start at the beginning, before the pandemic, when things seemed poised to go quite differently.

Unemployment was at record lows, and yet employment kept rising. The longest economic expansion in U.S. history appeared to have set off a virtuous cycle: Job gains led to increased household wealth and spending, which in turn encouraged more hiring, in some cases pulling off the sidelines people who had stopped looking for work.


Even more striking was that after years of widening, the wealth gap was shrinking. According to the Federal Reserve’s Survey of Consumer Finances, people in the lowest income quintile saw their net worth rise 37% from 2016 to 2019, while the top quintile largely held steady. Blacks and Hispanics, meanwhile, saw gains in net worth of 33% and 65%, respectively, while whites saw a gain of 3%.

A tight labor market drove employers to raise wages, offer greater schedule flexibility and invest more in worker training. Incomes among younger people rose substantially—by 13% among those under age 35—as they gained more opportunities, skills and work experience. Even the most stubborn economic trends, such as declining Black homeownership rates, finally turned around in 2019.

And then the pandemic arrived. The depth and breadth of its economic disruption was greater than that of any postwar recession. About 40% of those who earned less than $40,000 lost their jobs in March. New weekly jobless claims, which had hovered above the 200,000 mark for months, soared past six million.



The distribution of the job losses, meanwhile, was completely different from what one usually sees in downturns. Low-income Americans were the hardest-hit group in terms of both the general economic impact of government-mandated lockdowns and reduced spending on face-to-face services. Black and Hispanic workers are disproportionately represented in some of the industries that suffered most, such as restaurants and barber shops.

In broader terms, this was the first service-sector-led recession, a big-city recession and a women’s recession. From February to April, the employment level fell 15% for women ages 25 to 54, compared with 12% for men, according to the Bureau of Labor Statistics. Among the four million people who have been pushed out of the labor force since February, 55% are women. Many had little option but to suspend their careers as school closures and health risks disrupted child care and schooling.



But while restaurants, hotels, travel services, theaters and sports leagues confronted cancellations, other industries have benefited from the unfortunate circumstances. Grocery stores received a sudden boost to sales, and the nation’s supply chain kicked in to surmount shortages of basic foodstuffs (despite empty toilet-paper and bleach shelves). E-commerce companies became a lifeline for millions of people reluctant to leave their homes. Online learning companies blossomed, as did the home-exercise sector and videogames.

The unprecedented challenges of the pandemic spurred innovations. Access to telemedicine expanded thanks to rule changes in Medicare and Medicaid allowing patients and doctors to be reimbursed for remote visits. A company called Zoom, which few had heard of before the pandemic, became an instant global brand. Manufacturers repurposed assembly lines to make ventilators and masks, doing their part—usually voluntarily—to save lives. Feared ventilator shortages did not come to pass.


Congress took a rare break from partisan battles to approve the largest stimulus package ever passed. Millions of Americans received $1,200 stimulus checks, no questions asked. The Paycheck Protection Program kept many small businesses afloat while providing a windfall for others. Expanded unemployment benefits helped the jobless get by and helped sustain spending. As a result, household incomes and expenditures were surprisingly resilient.

But then another shock took place. On May 25 in Minneapolis, a Black man named George Floyd died while being arrested by police, one of whom was later charged with second-degree murder. As a cellphone video of Mr. Floyd’s death began to circulate, protests and civil unrest spread across the country. Shopping districts that had just begun to reopen after Covid-19 lockdowns now boarded up their storefronts; in some cities curfews were imposed.



Meanwhile, the stock market recovered quickly, and the labor market’s recovery beat expectations. By November, unemployment had fallen to 6.7% from 14.7% in April.

The third shock came as no surprise, but was difficult to bear nonetheless: the contentious election. Many important issues were at stake, including economic policy. Rather than a blue wave or a red wave, the American people produced a mixed election result, with Democrats winning the presidency but shrinking their margin in the House. Control of the Senate remains up in the air, pending the result of runoff elections in Georgia in January. Historically, divided government has been associated with stability.


So, despite three major upheavals in 2020, the U.S. economy now is primed for recovery, growth and continued adaptation to a new normal. Some industries will continue to suffer as long as the pandemic lasts—and beyond. Commercial-real-estate companies and bricks-and-mortar retailers are reinventing themselves for a new work-from-home, shop-from-home age.


But there is no society better prepared for what awaits. Startups are blossoming. There were almost 1.6 million new business applications in the third quarter of 2020, up from fewer than 860,000 a year earlier. The financial sector is solid, largely thanks to a much bigger, faster response from the Federal Reserve than during the financial crisis of 2008-09. An online economy, hardened thanks to recent surges in broadband infrastructure, kept America running through its recent dark days and will only expand. Highly effective vaccines will start becoming available soon, along with inexpensive, rapid Covid-19 home tests.


When it is safe for business to resume as usual, the economy could take off. Americans have accumulated $2 trillion in new savings deposits since February, according to the Federal Reserve. That is more than 10% of gross domestic product waiting to be spent.

Vulnerabilities exposed by the pandemic will now receive more attention and investment. Federal and state governments will likely shore up emergency stockpiles of beds, medicines and personal protective equipment. They are also likely to overhaul outdated unemployment-insurance websites, which crashed during the pandemic, to be able to process a steady stream of applicants when the next recession causes a spike. And just as the Fed and financial system were better prepared for this crisis than they were for 2008, our fiscal-policy infrastructure will be better prepared for the next emergency.

We have gained valuable practice sending checks out to households, expanding and extending unemployment insurance, using temporary flexibility in SNAP benefits (food stamps) and making forgivable loans to businesses. Policy makers are evaluating data now that will enable us to learn from our mistakes and be more effective in the future.

Payroll Employment
Percentage change in payroll employment relative to pre-recession peak

1974

1980

1981

1990

2001

2008

2020

0

%

-2

-4

-6

-8

-10

-12

-14

-16

0

12

24

36

48

60

72

MONTHS SINCE MOST RECENT EMPLOYMENT PEAK

Source: Bureau of Labor Statistics
Meanwhile, our leap into the future of work will create new opportunities. Now that remote work is more widely accepted, many employees will no longer be tied to high-cost urban centers that previously had held a monopoly on certain kinds of jobs. They’ll be able to move to places where one can actually build houses and raise a family comfortably. And as more people vote with their feet, state and local governments will have to become more responsive, whether on taxation and housing policy, school quality or police accountability.

People will continue to save time and money formerly spent on commuting. We could start to see exciting new uses of physical space that employers no longer need. Office buildings could be converted into housing, parking garages into outdoor parks and parking lanes into bicycle paths.

Workers with disabilities or conditions that make it hard to leave the home will find new opportunities in the work-from-anywhere economy. And, while women suffered the brunt of the job losses in 2020, they could end up being the biggest winners in the long term from the adoption of more-flexible work arrangements. Balancing work and parenting will be easier in a world where working from home remains an option but schools are operating normally.

America had a rough year, but we might look back on 2020 as the start of a new, even more resilient, more inclusive and more sustainable boom.

DougMacG

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Re: WSJ: The economy going forward
« Reply #1485 on: December 11, 2020, 09:15:52 PM »
"we might look back on 2020 as the start of a new, even more resilient, more inclusive and more sustainable boom"

   - I don't recognize the editorial writing.  Sounds like opinion writing from the news sections.  For one thing, how do you not add the caveat to any optimism, if Biden, Harris, Pelosi, Schumer don't screw it up?

More inclusive??  Who did the Trump expansion not include, rich white men in the suburbs?  That was the only group where Trump did not gain support.

Deficits of a trillion a month did not do lasting damage?  How so?
https://bipartisanpolicy.org/report/deficit-tracker/#:~:text=The%20Congressional%20Budget%20Office%20reported,June's%20deficit%20of%20%248%20billion.

The coming need for negative interest rates is not a warning sign?
https://www.bloomberg.com/news/articles/2020-05-07/negative-u-s-policy-rate-seen-by-early-2021-in-futures-market#:~:text=Futures%20Market%20Sees%20Negative%20U.S.%20Policy%20Rate%20by%20Early%202021,-By&text=Traders%20are%20now%20pricing%20in,Treasuries%20to%20a%20record%20low.

I'll tell you what the first boom is going to be in the new year.  Evictions and foreclosures - if the third world policy of banning enforcement of consensual contracts is lifted.
https://www.housingwire.com/articles/2021-housing-market-forecast-its-about-politics-not-economics/

What could go wrong?


ccp

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27.5 trillion now
« Reply #1487 on: January 02, 2021, 07:46:56 AM »


DougMacG

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Bubble? US Economy, stock market , investment strategies, What could go wrong?
« Reply #1489 on: January 12, 2021, 07:20:33 AM »
Jeremy Grantham: “The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000. These great bubbles are where fortunes are made and lost – and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in. But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.” (via The New York Times Sunday Magazine, gmo.com)

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Unpossible! Having election frauded their way into controlling the USG, we will finally see how uncontrolled spending really ramps up the economy. It'll be great!


Jeremy Grantham: “The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000. These great bubbles are where fortunes are made and lost – and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in. But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.” (via The New York Times Sunday Magazine, gmo.com)

G M

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I can't wait to see the megabailouts of the  blue states! That won't have any impact on the dollar!


https://www.zerohedge.com/news/2021-01-11/2021-may-be-year-world-loses-confidence-dollar

Unpossible! Having election frauded their way into controlling the USG, we will finally see how uncontrolled spending really ramps up the economy. It'll be great!


Jeremy Grantham: “The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000. These great bubbles are where fortunes are made and lost – and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in. But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.” (via The New York Times Sunday Magazine, gmo.com)

ccp

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Re: US Economy, the stock market , and other investment/savings strategies
« Reply #1492 on: January 12, 2021, 08:55:40 AM »
".I can't wait to see the megabailouts of the  blue states! That won't have any impact on the dollar!"
But wait

we now have "grown ups"

nothing to worry about

when it crashes they will blame the orange man




ccp

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jobs rise?
« Reply #1493 on: February 05, 2021, 09:03:24 AM »
https://finance.yahoo.com/news/january-2021-jobs-report-labor-department-nonfarm-payrolls-184719721.html

I noticed on another site it states "non private " jobs added

so with no further explanation anywhere
I assume this means more government jobs

which in my opinion is a step backward NOT forward

funny how that gets left out in reporting of jobs data


Crafty_Dog

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WSJ: Stocks lower after Powell's comments
« Reply #1495 on: March 04, 2021, 12:02:33 PM »
second

Stocks Turn Lower After Powell’s Comments
Nasdaq falls nearly 3%, bond yields rise as investors digest Fed chair’s comments
Index performance
Source: FactSet
As of March 4, 2:59 p.m. ET
%
Dow industrials
S&P 500
NasdaqComposite
Russell 2000
March 4
2 p.m.
-5
-4
-3
-2
-1
0
1
By Caitlin Ostroff and Gunjan Banerji
Updated March 4, 2021 2:07 pm ET
SAVE
PRINT
TEXT



U.S. stocks dropped and Treasury prices tumbled as investors parsed comments from Federal Reserve Chairman Jerome Powell about the outlook for inflation and the central bank’s views on rising bond yields.

The S&P 500 dropped 1.9% after two consecutive days of declines. The Nasdaq Composite fell 2.8%, and is now poised to enter a correction--a 10% decline from its recent high. The tech-heavy gauge is also on track to fall more than 1% for the third consecutive session for the first time since September 2020. The Dow Jones Industrial Average lost 514 points, or 1.7%.

Fed Chairman Forecasts a Slow Return to Pre-Pandemic Employment
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Fed Chairman Forecasts a Slow Return to Pre-Pandemic Employment
Fed Chairman Forecasts a Slow Return to Pre-Pandemic Employment
Taking questions at the WSJ Jobs Summit, Jerome Powell explains his expectations for a return to maximum employment and how the labor force has changed since the pandemic started. Photo: Al Drago/Getty Images
Mr. Powell answered questions on how he views the jump in yields at The Wall Street Journal Jobs Summit and emphasized that the economy is far from reaching full employment. Some analysts and investors said that Mr. Powell’s responses, which closely adhered to his previous comments, did little to assuage fears about the recent rise in bond yields.

Nasdaq Composite performance, year-to-date
Source: FactSet
As of March 4, 2:59 p.m. ET
%
Jan. 5
Feb.
March
-4
-3
-2
-1
0
1
2
3
Central bank officials have previously said they would keep monetary policy loose until the economy is stronger, and that they view the rise in bond yields as a signal that investors are optimistic about the U.S. economic recovery.

The yield on the 10-year U.S. Treasury note jumped to 1.541% during his speech, on track for the highest closing level in at least a year. That level marks a steep climb from early January, when it was as low as 0.915%. Yields rise when bond prices fall.

The stock market has been taking cues from the government bond market. A recent selloff in U.S. sovereign debt has lifted Treasury yields, curbing investors’ appetite for the technology stocks that had soared in a low-yield environment.

Some money managers are betting that additional fiscal stimulus in the U.S. will boost inflation and cause the Fed to raise interest rates sooner than they had expected. That has led to a jump in real yields, or the returns on bonds after adjusting for inflation expectations.

Yield on 10-year U.S. Treasury note
Source: Tullett Prebon
As of March 4, 2:58 p.m. ET
%
2/19/2020 closing yield
March 2020
'21
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Fresh data showed that 745,000 Americans applied for first-time unemployment benefits in the week ended Saturday, up from 736,000 the week prior. Economists surveyed by The Wall Street Journal had expected 750,000 jobless claims.

A key measure of investors’ inflation expectations also surged recently. Five-year breakevens—which reflect the expected pace of price increases over the five-year period that begins five years from now—climbed above 2.5% for the first time in 13 years before closing at 2.487% Wednesday, according to Deutsche Bank.

Yields on Treasury inflation-protected securities, or TIPS, which are a proxy for the real yields, have also shot upward. The 10-year TIPS yield rose to minus 0.741% Thursday, from minus 1.089% at the end of last year, according to Tradeweb. It briefly closed as high as minus 0.635% at the end of February, when there was a wave of selling in the government bond market.


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The recent moves in the bond market have coincided with a sharp drop in tech darlings and favorites for momentum investors, like Tesla, which fell 6.7% on Thursday. ARK Innovation ETF dropped 6%.

Expectations for U.S. economic growth have been bolstered by a proposed $1.9 trillion Covid-19 relief package. Senate Democrats agreed Wednesday to narrow eligibility for some of the direct payments that are part of the bill, a concession to centrists whose support is needed to pass it.

“You basically have fiscal stimulus feed through to consumption, which means earnings can go up and that will support equity markets,” said Esty Dwek, head of global market strategy at Natixis Investment Managers.

She said she expects sectors like banks that would benefit from the economic reopening to perform well as investors exit richly valued technology stocks. “The headline numbers of the indexes sometimes mask that it has been more of a rotation in equities rather than out of equities,” she said.


A trader worked on the floor of the New York Stock Exchange on Wednesday.
PHOTO: COURTNEY CROW/ASSOCIATED PRESS
The stimulus package should also increase support for unemployed people, which will bolster consumer spending and the economic recovery, Ms. Dwek said.

Overseas, the pan-continental Stoxx Europe 600 fell 0.4%.

Most major Asian markets fell in a technology-led selloff that mirrored Wednesday’s trading in the U.S.

Markets were weighed down by uncertainty over the pace of global economic recovery, as well as concerns that quickening inflation could eventually lead to higher interest rates, according to Justin Tang, the head of Asian research at United First Partners in Singapore.

“On one hand, you want the economy to grow, but the massive cash in the economy raises the boogeyman of inflation,” he said. “I’m not sure if the economy can actually take higher interest rates at the moment. We are recovering, but I’m pretty sure we’re not out of the woods yet,” he added.

Share-price and index performance, Thursday
Source: FactSet
As of March 4, 2:59 p.m. ET
Snowflake
Splunk
Zoom
Alphabet
Amazon.com
Nasdaq Composite
Microsoft
Square
Okta
-8%
-6
-4
-2
0
2
4
6
8
Mr. Tang said the recent pullback was reminiscent of 2018, when the tech sector sold off as bond yields rose, though he noted that episode quickly eased.

—Joanne Chiu contributed to this article.

Crafty_Dog

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Tesla's sharp drop
« Reply #1498 on: March 06, 2021, 07:42:08 PM »
second post

I have no idea what he is talking about but it sounds intriguing.

https://www.zerohedge.com/news/2021-03-06/tesla-crashes

DougMacG

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Re: So why is gold below $1700?
« Reply #1499 on: March 07, 2021, 10:31:23 AM »
https://www.zerohedge.com/markets/one-bank-turn-apocalyptic-fed-will-inevitably-move-ycc-rates-are-no-longer-anchored?utm_campaign=&utm_content=Zerohedge%3A+The+Durden+Dispatch&utm_medium=email&utm_source=zh_newsletter

Much to discuss here.
-----------------------
Hartnett's views on the rest of the 2020s:
...
We say optimal [asset allocation] is 25/25/25/25 in bond/stock/cash/commodities
-----------------------
[Doug] That is a pretty defensive position which seems right to me. 
But within those 25/25/25/25 segments are a lot of choices.
Which stocks, which bonds, which commodities?  Ideas? 
Real estate not mentioned.  I look at these choices as strategies for the non-RE part of the portfolio.  Land is not a commodity.