The Market 2022-2023-2024

[dscher]

We probably should have gone bear during Trump but the market was being propped up too much by zero interest rates and how much QE the fed was doing. Now that those are reversing we're going to finally get the all of the corrections that should have happened over the last 14 years quickly together.

It's not fully it, but part of the reason for the help wanted signs everywhere is that we're at a low for labor participation. We're only at about 63% right now IIRC. Gettin that back up to the 64-65% level doesn't sound like much but it's 6-7 million people. That would eat up a pretty good chunk of the 11 million open jobs, assuming there's a skills match. Crypto and NFTs dying (look at OpenSea this week) will hopefully help with that a bit.

Even then.. what about any of this helps anyone make money in the market? By the time this information is readily available the moves are over imo.. Recession/panic obsession by the media is historically marked with bottoms. Rainbows and sunshine are marked with tops. Just like the obsessive media coverage over inflation the last 6 months.... I had many measures, mainly the dollar vs other inflation instruments(TIPs/gold), showing the market was actively pricing in deflation....and here we are. Deflated asset prices across the board.

 

[Yuma]

Even then.. what about any of this helps anyone make money in the market? By the time this information is readily available the moves are over imo.. Recession/panic obsession by the media is historically marked with bottoms. Rainbows and sunshine are marked with tops. Just like the obsessive media coverage over inflation the last 6 months.... I had many measures, mainly the dollar vs other inflation instruments(TIPs/gold), showing the market was actively pricing in deflation....and here we are. Deflated asset prices across the board.

That's the thing, I sometimes know what is happening, but I am not smart enough or have enough money to do anything about it. Right now I just buy an SP500 index with the lowest cost available in my 401(k) and call it a day. I am happy when prices are low, and not so happy when prices are high, since I am still in buy mode in my 401(k).

 

[dscher]

That's the thing, I sometimes know what is happening, but I am not smart enough or have enough money to do anything about it. Right now I just buy an SP500 index with the lowest cost available in my 401(k) and call it a day. I am happy when prices are low, and not so happy when prices are high, since I am still in buy mode in my 401(k).

Can never go wrong with buying dips as a retail investor/trader as long as you have a healthy expectation IMO. Dip buying is fantastic in secular bull markets. Dip buying is gut wrenching inside of deep cyclical bear markets...or even worse, a potential secular bear. Knowing the flow of traffic in the market can make all the difference. Good luck though and be safe.

 

[Yuma]

Can never go wrong with buying dips as a retail investor/trader as long as you have a healthy expectation IMO. Dip buying is fantastic in secular bull markets. Dip buying is gut wrenching inside of deep cyclical bear markets...or even worse, a potential secular bear. Knowing the flow of traffic in the market can make all the difference. Good luck though and be safe.

I never worry about buying in a bear market. If the market crashes, my little stash isn't going to be the difference for survival for me. If the market truly crashes, we all have bigger fish to fry! At some point when stocks start getting crazy high, hopefully bonds or some other market is cheap.

 

[dscher]

Am I back in the wondrous world where sanity still exists?

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[dscher]

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[Russ Smith]

I can't help but watch this video and think of all the negative all time signals in the Trump Presidency indicating a bear market, yet stocks just kept going up. I mean we blew past indicators that were basically written in stone that said if you hit this number a Depression will follow! I watched a video recently where a market watcher said the problem with charts is they are only accurate after the fact. Meaning, all markets are different and behave different from previous markets. I like candles, and charts, but they aren't crystal balls that are 100% infallible. This market is way different. We have high employment, high wages, supply chain issues, I drive around and see help wanted signs on every business, etc. I don't remember such a demand for labor in general in my lifetime. This is also when all the robots were supposed to put us all in unemployment.

the problem with charts and 45 was also we'd never before had a POTUS who was that focused on the markets. He was singularly determined to make them go higher and would do or say anything to do that.

I don't think Biden has mentioned the markets even a half dozen times since he took over even when they were going up higher and higher.

NOthing was normal in that 4 year period so it was really difficult to use normal to make any predictions then.

 

[dscher]

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[dscher]

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[dscher]

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[elindholm]

Yeah, here it is, for (my) future reference:

3M (MMM) Commences Split-Off Exchange Offer for Food Safety Business

3M Company ("3M") (NYSE: MMM) announced today the commencement of an exchange offer to effect the separation of its food safety business (the "Food Safety Business"), in furtherance of the...

www.streetinsider.com

So, if I understand correctly:

* On the final days of August, MMM shareholders will have the option of exchanging their MMM for SpinCo, which is destined to become (get absorbed by) Neogen. MMM shareholders will get a 7% discount on any SpinCo/Neogen shares they acquire through this transaction, the discount being figured with respect to Neogen's market-weighted average price over the three trading days 25, 26, and 29 August.

* 108.3M shares of SpinCo/Neogen will be available, which works out to $2.33B worth. Since MMM's market cap is $83.6B, only a small percentage of MMM shares can be exchanged. In the event that the exchange order is oversubscribed, everyone's allowable exchange will be prorated.

* If the exchange is undersubscribed, the remaining shares of SpinCo/Neogen will be distributed pro rata to all MMM shareholders. If no one accepts the exchange offer, leaving all of the SpinCo/Neogen up for grabs, then each $100 of MMM will be entitled to $2.79 of SpinCo/Neogen.

Neogen is down 52.8% YTD, so if you think it can bounce back, this could be a useful opportunity to get in at an even steeper discount than the market price. If you could freeze the prices, you'd hop over quickly to NEOG, cash out at face value, and then move back into MMM. But I'm probably not the only one who has thought of that, so I expect the prices of NEOG (and maybe also MMM) to go haywire right around the time of the merger.

I'd made up my mind that I wanted to swap MMM into NEOG, but then I forgot. I expected to get a prompt from E*Trade, but that didn't happen, so I wonder how I was supposed to opt in even if I wanted to. No NEOG has appeared in my account, so I guess that means that the exchange was fully subscribed. It looks like the exchange price for NEOG was in the 21.00-21.50 range, and it's now sitting at 18.56, but MMM is down even worse. It looks like the right thing to do was simply cash out of MMM and wait for the dust to settle.

I'm still hoping that the exchange hasn't happened yet and I'll get surprised by a small amount of NEOG posting in another few days. Every little bit helps.

Edit: Finally tracked it down. Looks like the exchange was fully subscribed, so nothing for me. Oh well.

 

[dscher]

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[Russ Smith]

well the market rally was nice while it lasted. BLS numbers on inflation out they were expecting 8.1, it's 8.3 the futures are tanking.

Sounds like the tanking is because they are assuming this locks in more rate hikes.

 

[BigRedRage]

yuck

 

[Folster]

well the market rally was nice while it lasted. BLS numbers on inflation out they were expecting 8.1, it's 8.3 the futures are tanking.

Sounds like the tanking is because they are assuming this locks in more rate hikes.

Yeah. The Fed is in a tough spot. The market, investors and especially speculators are just looking for any excuse to reengage the bull run and jump back into speculative assets. The slightest glimmer of hope has the NASDAQ surging and bitcoin popping This has to be broken in my opinion. I think the Fed wants to kill that sentiment. These pivot expectation market rallies are counter productive and likely strengthen the Fed's resolve.

The analogy I like is a pot that is boiling over on high heat. The Fed thinks they can just turn it down one notch at a time, when in reality you need to take it off the heat for a few seconds and also turn down the heat before putting the pot back on it.

 

[dscher]

Fed creates. Fed destroys.

 

[dscher]

The BOJ playbook remains strongly in play as well.. the similarities are still eerily going to remain IMO. Rate hike to fight hyper inflation.... Eventual easing that caused a buy up of Treasury bonds to zero/negative rates.. but this time, unlike all the others, there were no more bullets in the chamber to fight deflation. It causes the yield curve to spike uncontrollably from an inverted(recessionary) state. That's where the pain will occur.

 

[Folster]

Even though rents are decreasing. The Owner's Equivalent Rent metric used in the CPI never came close to capturing actual rent increases. The rent inflation is going to lag until these lines intersect or reach some sort of equilibrium and that can cause the CPI number to stay elevated longer because it was being drastically understated.

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[Russ Smith]

Even though rents are decreasing. The Owner's Equivalent Rent metric used in the CPI never came close to capturing actual rent increases. The rent inflation is going to lag until these lines intersect or reach some sort of equilibrium and that can cause the CPI number to stay elevated longer because it was being drastically understated.

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I posted a story in the post Covid economy thread. It says that the BLS report and the Fed aren't properly capturing rent data because rents only get recorded when someone signs a new lease. So if rents in my complex stop rising or go down, that doesn't get recorded in the BLS data until my lease comes due and I sign a new one at the new rate. Online sites like Zillow say the rent surge has actually kind of peaked but it's not reflected in BLS because most of the data in their report is during the surge it's not yet capturing the level off and won't for 6-8 months.

They weren't saying BLS was incorrect or doing it on purpose they were saying that the fed using BLS data might lead to a situation where they keep hiking rates because "rent is still surging" when it's actually not.

So different than what your graph says but same idea that it's possible if not likely the data the fed is using to make rate decisions might not be current.

 

[dscher]

That was brutal. We could be on the verge of the next lower lows in this bear market. I hate what the volatility market looks like right now for people holding long positions. This could be in the flash crash territory at any given moment. I have a chart I'll share in a bit.

 

[dscher]

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[dscher]

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[dscher]

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Rolling over after reaching levels not seen since the 70s.. with rates and oil being highly correlated over time it would make since we could see significantly lower oil prices and yields when the fed is forced to cut at some some future date with a struggling market and economy.

 

[Folster]

Huge gap down on ADBE after the announcement of an acquisition. They also reported earnings which appear to be a beat on the top and bottom line. My price target was $320-$325. Going to look real hard at it today.

 

[elindholm]

Huge gap down on ADBE after the announcement of an acquisition. They also reported earnings which appear to be a beat on the top and bottom line. My price target was $220-$225. Going to look real hard at it today.

$200-225? You're going to be waiting a bit longer, I think.

I'm giving up on MMM. I assume that they'll eventually pull out of this earplug tailspin, but it could be years before they're attractive again. I'm trying to find a respectable exit point.

Is everyone here still long on INTC? Analysts have lost a lot of faith in it. It's looking to me like a poor man's IBM.