The Market 2022-2023-2024

[dscher]

Now that the debt ceiling agreement has been reached, inflation is at 4.9 and headed to 3 by July, interest rates have peaked and the Fed is about to pause rate hikes, the S&P500 remains in a 7 month uptrend, corporate earnings are beating estimates, unemployment remains historically low, spending and travel are at all time highs, Oil has settled at a reasonable $70 level, and no recession has come....... I wonder what the doomsayers will come up with next to try to make everybody believe this is 2008 again and the S&P500 will be cut in half.

Investors emotions and imagination are their own worst enemy. Buy and hold good companies, ignore the noise.

I wish I could say this chart was bullish for investors... I really do. But, I can't fight history.

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[dscher]

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Pivots/pauses are not bullish either.

 

[Yuma]

I know everyone says there's a pause coming on rate hikes, but really how can the Fed pause on this strong consumer spending? Plus unemployment down, which means more money into the economy.

 

[dscher]

Tom Lee calling for another 10 percent higher just now on CNBC...

Hard fade.

 

[dscher]

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[Yuma]

Weird, my S&P index fund is up over 10% this year. Another disconnect of Wallstreet versus Mainstreet. I don't feel the economy is doing THAT well. Are companies really doing THAT well. I know people are buying things. Whenever I go to Walmart, it's packed!

Weird observation: Bananas are the cheapest price I have seen in YEARS! Literally, my son bought a bunch for $1.20 the other day. How can bananas, be so cheap, yet the bread I buy that is made here in the USA has doubled in price this last year? This economy has weird stuff going on!

 

[Mainstreet]

Weird, my S&P index fund is up over 10% this year. Another disconnect of Wallstreet versus Mainstreet. I don't feel the economy is doing THAT well. Are companies really doing THAT well. I know people are buying things. Whenever I go to Walmart, it's packed!

Weird observation: Bananas are the cheapest price I have seen in YEARS! Literally, my son bought a bunch for $1.20 the other day. How can bananas, be so cheap, yet the bread I buy that is made here in the USA has doubled in price this last year? This economy has weird stuff going on!

I think there is a disconnect.

I can't help but wonder if people are spending too much on credit and a recession is coming? Indiscriminate spending can do that.

 

[Zalixar]

I think there is a disconnect.

I can't help but wonder if people are spending too much on credit and a recession is coming? Indiscriminate spending can do that.

It's also misleading...I'm spending more on groceries than I ever have...and I'm receiving less than ever before, which leads to more spending. But that's applied across the board. People are used to a way of life and it's difficult to change.

Credit is also a problem. I think I saw somewhere overall savings is being drained as well.

Not everything is all hunky-dory.

 

[Folster]

The S&P 500 is up over 9% YTD while the Nasdaq 100 is up over 31% YTD. Everybody and their brother has been predicting a recession this year and that may very well still happen, but this illustrates how hard it is predicting the market and why I am skeptical any time sentiment is overwhelmingly negative or positive.

The Fed funds rate went from 0 to over 5% in less than a year. Had you told me that last year, I would have guessed a recession was all but certain by this point. Again, that still may come, but what if it doesn't?

 

[Mainstreet]

It's also misleading...I'm spending more on groceries than I ever have...and I'm receiving less than ever before, which leads to more spending. But that's applied across the board. People are used to a way of life and it's difficult to change.

Credit is also a problem. I think I saw somewhere overall savings is being drained as well.

Not everything is all hunky-dory.

I change my spending habits when prices go up. It's more of my own personal rebellion. I will not reward higher prices unless it's an absolute necessity. There are some businesses who have raised prices just because they can.

I agree, everything is not hunky-dory. If people spend cash, reality hits home quicker.

 

[Yuma]

I change my spending habits when prices go up. It's more of my own personal rebellion. I will not reward higher prices unless it's an absolute necessity. There are some businesses who have raised prices just because they can.

I agree, everything is not hunky-dory. If people spend cash, reality hits home quicker.

Just anecdotally, I have observed more people paying with cash in Walmarts. My most recent job had in me in Walmarts all throughout the day. There was a time that between debit cards and credit cards you NEVER saw anyone use cash. Now I AM seeing it more than ever. I think people are trying not to use credit, and are using cash to try and not spend too much. I even asked a couple cashiers if they were doing more cash transactions, and they all said yes.

 

[Mainstreet]

Just anecdotally, I have observed more people paying with cash in Walmarts. My most recent job had in me in Walmarts all throughout the day. There was a time that between debit cards and credit cards you NEVER saw anyone use cash. Now I AM seeing it more than ever. I think people are trying not to use credit, and are using cash to try and not spend too much. I even asked a couple cashiers if they were doing more cash transactions, and they all said yes.

Also, their credit cards might be maxed out or they are tired of paying whatever interest rate is on their balance, probably 20-25%.

 

[dscher]

Also, their credit cards might be maxed out or they are tired of paying whatever interest rate is on their balance, probably 20-25%.

A plethora of fed data is showing this at the moment.

 

[Devilmaycare]

It's also misleading...I'm spending more on groceries than I ever have...and I'm receiving less than ever before, which leads to more spending. But that's applied across the board. People are used to a way of life and it's difficult to change.

Credit is also a problem. I think I saw somewhere overall savings is being drained as well.

Not everything is all hunky-dory.

US credit card debt has been at an all time high the last 2 quarters at around $986B. Savings are also low. About 40% of the US has less than $1000 in savings and the median is at only $5300. Add onto that the state of auto loans with how many are > $1000/month and that a huge percentage are underwater.

It's the combo of all of that that has me thinking recession. Something has to give. Especially with what housing costs now.

 

[jbjarko]

It is absolutely amazing to me how people don't leverage credit cards to their benefits. I do think something has to give, but it's at the expense of the lower incomes. They're already in debt, may not own homes or have a savings. Middle class and up are generally in a position to take advantage of a recession :/

 

[jf-08]

It is absolutely amazing to me how people don't leverage credit cards to their benefits.

Please explain.

 

[jbjarko]

Please explain.

I know many of people who don't carry debt but pay for everything with a debit card for instance. The amount of rewards that can be had via paying with a credit card is absolutely astronomical if you know you're going to be spending money and paying it off.

 

[jf-08]

I know many of people who don't carry debt but pay for everything with a debit card for instance. The amount of rewards that can be had via paying with a credit card is absolutely astronomical if you know you're going to be spending money and paying it off.

Ah got it. Yeah, I put as much as possible on my credit card each month.

Edit: And pay it off each month.

 

[dscher]

Ah got it. Yeah, I put as much as possible on my credit card each month.

Edit: And pay it off each month.

Exactly. That's how you leverage credit cards. You find a good to decent rewards card with no annual fee. Pay it off every month. Then you sit back and make them pay you instead of you paying them. I double up with BofA and they match a percentage of my rewards every month.

 

[Devilmaycare]

It is absolutely amazing to me how people don't leverage credit cards to their benefits. I do think something has to give, but it's at the expense of the lower incomes. They're already in debt, may not own homes or have a savings. Middle class and up are generally in a position to take advantage of a recession :/

I'm with you on leveraging cards the way you mentioned in the follow up. It's not only good for the rewards, it's also good for your credit and gives you a little bit of protection over a debit card in case of theft (money is against the credit line and not your cash).

I disagree a little though with the last sentence. I think the middle class are going to get screwed with a recession too. It'll only be the upper middle class and up that will be ok. The reports on the amount of savings, CC debt, etc. are painting that picture to me.

 

[GoldGloveschmidt]

Another great day in this bull market.

 

[jbjarko]

I'm with you on leveraging cards the way you mentioned in the follow up. It's not only good for the rewards, it's also good for your credit and gives you a little bit of protection over a debit card in case of theft (money is against the credit line and not your cash).

I disagree a little though with the last sentence. I think the middle class are going to get screwed with a recession too. It'll only be the upper middle class and up that will be ok. The reports on the amount of savings, CC debt, etc. are painting that picture to me.

I would agree with your counter to my middle class argument to be honest, I just don't want to think it's true :/

And back to the whole CC thing, I commutatively pay around at least 1500k in CC annual fees on a yearly basis but they pay for themselves with rewards, credits, etc.

 

[jf-08]

I would agree with your counter to my middle class argument to be honest, I just don't want to think it's true :/

And back to the whole CC thing, I commutatively pay around at least 1500k in CC annual fees on a yearly basis but they pay for themselves with rewards, credits, etc.

I'm going to set up another thread to discuss perks for cards.

 

[dscher]

MAX FRAUD MAX PAIN

Bulls got their first taste of risk off this week but they escaped the week intact. Past performance is no guarantee of future results... To...

zensecondlife.blogspot.com

 

[Yuma]

MAX FRAUD MAX PAIN

Bulls got their first taste of risk off this week but they escaped the week intact. Past performance is no guarantee of future results... To...

zensecondlife.blogspot.com

IDK if it was this forum, but I noted that my 401K which is S&P 500 index stocks, was up over 14% for the year, which is crazy! Now is 15.88% for the year! That's craziness!