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This is the image of a market with no direction for the last 13 months. SPX 3,900 was the mid point for 10 months and became support in March. There are good arguments for the market to rise from here, continue in this channel and to take another dive down into the mid-3,000s. That's why I'm on the sidelines in fixed income for now. About 2/3s of my portfolio will mature at the end of the month and I'll likely switch to a lower return, more liquid investing vehicle.
I don't think we disagree. Small companies pay a lot of taxes. The system has been designed like that for decades, if not longer. The current tax system is designed to ensure mega cap companies pay almost no taxes. Roughly twice as many companies now pay no taxes. I wouldn't be so negative about the current 21% rate if there was a minimum AMT. When you compound zero tax, billions in free cash flow, corporations as people and money as speech, democracy has no place in that system.
More on the Trump tax cuts from the tax policy center - hint..it's bad news:
The 35% tax rate was at best a chimera and at worst a red herring used by the corporate class to whine in front of Congress. Here's a sample of real tax rates paid by corporations under the Trump rules in 2021. And it's not just the corporate class that pays almost nothing. Our federal tax on investment income has averaged about 6% over the last decade or so. It's not difficult and it's perfectly legal. Corporations and the investor class need an AMT. How about 20%? Let's not pretend that the Bush or Trump tax cuts were anything more than a giveaway to the top 10%.
The Trump tax cuts were designed by and for the billionaire class and no one else. The law cut corporate tax rates permanently and individual tax rates temporarily. It also removed the ACA mandates and caused insurance rates to move up for participants. Anyone who thinks the Trump tax cuts are fair to average Americans either does not care what happens to working Joe and Jane or doesn't understand the law. It's a truly vicious swipe at the now want-to-be middle class. At the end of 2025 the working class will get screwed unless there's a Democratic administration and Congress.
Most of us here are lucky enough to be in the investor class but we're not crass enough to think the American working class can continue to get screwed as they have been for the last 40+ years. Trump and McConnell put that on steroids. As DeSantis said yesterday, he will create a true Handsmaid's society if elected. His model SC judge is crooked Clarence. He envisions eight years as president and bringing the SC to a 7-2 advantage while getting rid of radical left judges like Roberts.
According to Pew, lower income families have grown by 14%, the middle class has shrunk by 18% and the investor class has grown by 50% over the last 50 years. I don't remember a time when corporations were doing poorly in the US but I do remember a time when corporations weren't people and money wasn't speech. I think we were much better off then, even those who have benefited from the Bush and Trump tax cuts. Billionaires own the SC as it's the only non-democratic institution. We now know they want the other two branches. They almost got the administrative branch in 2020. I'm sure they've learned how to manage this better in 2024.
Wall Street got a bit nervous today, (SPX down over 1%), as it seems more clear that McCarthy does not have a plan that both the president and his crazy caucus will agree on. And it's not a few sticking points, it's the entire Republican plan which appears to have been written by the oil and gas lobby. Apparently it's 315 pages long with 275 pages of carveouts for oil and gas. This according to Sheldon Whitehouse, RI Senator and chair of the budget committee.
As for the budget cuts, here's the breakdown according to the NYT. We know McCarthy has committed to leaving defense and veterans benefits alone so here's the actual cuts. Basically shut down half the government. CBO says 700,000 people will lose their jobs. More likely with the knock-on effects, it's 10X that number.
Thanks for the details Court. It was the reference to copper moving down that threw me off. I thought EVs use over 2X the amount of copper as ICE vehicles.
That's one of the big reasons I moved to fixed income for now. I'm more in the make a reasonable income without losing money phase of my investing life..:).
I didn't follow that reference. Some detail? Thanks.
I assure you, none of us pay much attention to the MSM. If you think vaccines are a 'scam', and AGW is an invention of the deep state and/or the MSM or that there's some truth to the 'big lie', you're welcome to any or all of those opinions but this isn't the board to air that laundry. Any ideas or information you have regarding market direction, sector rotation, company earnings, etc. are more than welcome.
OK, that didn't take long. The XLC, XLK and XLY all have similar chart patterns and all did very well from the bottom, or near the bottom, of the recession. So we should say:
Comms, tech and discretionary will do very well from near the bottom of a recession. During the Great Recession all three doubled in two years. But that was not the time to sell as tech, for example, was up 17X by January of 2022. And we all thought the market was overbought at the end of 2019. I know I did.
There might be an opportunity this summer if Kevie and the Freedumb caucus tank the economy.
That's certainly counter intuitive Nick. I would think they'd be the first to fall and then recover as the recession subsides. I'll do some research on the 2008 recession and get back to you.
Respectfully disagree. There is no room for flat earthers, if you get my point.
Kunstler is another right wing nut. From his Wiki page:
It's the Russian way. Russian troops were promised flowers if they invaded Ukraine, but no one told them they would be on their graves.
And one more:
Putin says this battle in Ukraine is between Russia and NATO. Russia has lost 14,000 soldiers, 100 fighter planes, 100 helicopters, 500 tanks, 1,500 armored vehicles, 3 ships, 230 heavy guns and 6 generals. NATO hasn’t shown up yet.
Unfortunately for AZ and others Mead is still critical, only 7 ft. higher than it was in March and still 177 feet below full.
gfp927z, don't take my editorial as a personal attack, there are a few issues that I understand well and it really chaps my hide when nonsense is passed off as fact, especially in semi-literate publications like Forbes. Editorial below:
Climategate was total BS. A manufactured crisis as real as the stolen election. And, that nonsense was settled a decade ago. The author, Charles Kadlec is, (or more likely was), a conspiracy nut. Forbes should be ashamed but of course they're not. They're just a generally substandard group of editors and writers trying to make a living publishing mostly drivel with a sprinkling of hogwash.
Big oil are not the bad guys. They provide a product that allows us to continually grow our economy until we have better, less climate harming products to do the same. If there's a bad guy it's us eight billion humans demanding that we live better lives while ignoring that the sheer number of us and the general affluence and apathy are the problem. The earth is apparently not big enough to sustain us in the life style to which we've become accustomed.
The answers are not simple but they are straight forward; worldwide carbon budgets on consumers and producers, and taxes to fund carbon mitigation projects. I don't see any path to that end. McKibben and Hansen's idea that we should limit CO2 to 350 ppm seems almost quaint. We'll be at 450 ppm shortly after the end of the decade.
And Barron's apparently has a different point of view. To be fair, hedge funds most likely have a much shorter timeline than your normal investor so both may be correct. If we're taking a longer point-of-view, I'd agree with Barron's. However, I'm on the sideline with energy at least until we get through the summer and Q2 earnings reports.
10 Stocks to Play a Resurgent Energy Sector, From Our Roundtable Experts
Our energy roundtable predicts higher crude prices as global demand grows faster than supply. What’s ahead for U.S. shale, the majors, and the energy transition.
https://www.barrons.com/articles/energy-oil-gas-stock-picks-roundtable-f0171204?mod=hp_HERO
I believe you called that a few days ago.
I'm open to anyone who's smart and cares about democracy. About 50ish and successful outside of politics would be nice.
It appears that the Donald still has tight control over the Republican party. They walked out of negotiations over the debt ceiling a few minutes after he posted the following on Truth Social:
Yesterday and today have widened the BB width by about 20%. PPO looks slightly positive and RSI is under 60. Barring any existential issues the market has an upward bias. Energy and Health Care sectors are up while Communications, Discretionary and Financials are down.
Hound of the day is LUMN. They had a terrible 2022 and lost over half their value. Apparently falling knife investors were so convinced that $6 was the bottom they've followed it down to $2.35. This is another one trading at a small portion of their enterprise value, (~12%). Seeking Alpha analysts are all over the place from a strong buy to a sell. Wall Street is equally confused; two strong buys, two strong sells and nine other analysts in between.
I asked the Magic 8 Ball and it said; Reply hazy, try again. If the 8 ball doesn't know, no one does..:)
PFE has come into a pandemic inheritance and just spent it all on one big purchase. I assume when they say they'll reduce costs it's across the combined companies. PFE is always on my watch list or in my portfolio. They're back at the 2018 high as we seem to have forgotten that COVID is still on pace to kill over 100,000 people in the US this year. I'll be watching for a few quarters as it takes time to digest a meal this large.
OK, the "job killing moron" has cost Florida 2,000 tech jobs and $1B in revenue. There is still $17B in planned projects on the table which the mouse through his spokesperson said, "I hope we’re able to do so."
That's mouse for, "It would be shame if you tripped and fell off a bridge".
Thanks for the details Dew. Many here are also long PFE. I was until recently when I moved to fixed rate investments and a real estate investment.
Ha, if true, that was cold hearted but in any event, Joe does has a rep. I'm sure he's on the phone with Obama regularly. They will have to come up with a plan that attracts enough support from both sides or this kumbaya moment will be over. McCarthy just wants to remain speaker so if enough Dems will swear to support him as speaker when the crazy caucus turns on him they might have a deal. I know it's crazy to even consider this but maybe the middle of both parties could work together.
Nice little mini-breakout at the bell with a pullback just under 4,200. Tomorrow and again Monday should be very interesting.
A billion here, a billion there...with interest that's ~$57B or and average of ~1.4B a year. First year interest accumulation is ~1.5B. These must be some excellent products and more in the pipeline.
Given the equipment you're running, that's no mean feat.
Not at all. The purpose of this board is to offer as much financial information and education as possible.
If you were in bonds last year you may have felt like you went through the Great Depression. Actually it was much worse. The worst year for bonds in almost 100 years. The quadrant chart above from Black Rock shows that bonds seldom exhibit a negative return and as the previous Barron's article outlined, bonds should exhibit a nice return over the next several years.
Is it time to return to a 60/40 stock/bond portfolio? From Barron's:
A Fed Pause Could Be an ‘Almost Generational’ Opportunity for Bond Investors
Bonds are having a moment. With the Federal Reserve expected to be at the end of its interest-rate hiking cycle, investors are reassessing the fixed-income market—and looking to high-quality bonds with intermediate maturities as the best bet for stable income.
Investment-grade corporate bonds are now yielding around 5%, up from about 2.8% two years ago. Such plump yields cushion bonds against the possibility of negative total returns if the pundits are wrong and the Fed keeps tightening.
In fact, bond pros think the total return potential for bonds this year exceeds that of stocks. For fixed-income investors, that would be a welcome change from last year, when U.S. bonds lost a dismal 13% on a total return basis.
“Now that we’ve gone through the dark tunnel, we’re seeing the end—and it’s sunny outside,” says Benoit Anne, lead strategist of the investment solutions group at MFS Investment Management. “The stars have aligned now for fixed income to do quite well in the period ahead.”
In June, the Fed is expected to pause—meaning hold rates steady, after raising them at each meeting since March of last year. The bond market may be pricing in 2023 rate cuts that might not materialize, says Kristy Akullian, senior iShares strategist at BlackRock. Instead, investors could see a more typical pause playbook, with the Fed holding rates steady at least through the end of the year.
Since 1990, the Fed paused an average of 10 months between the last rate hike and the first cut of each cycle, according to a BlackRock analysis. Every time, the bond market initially rallied, then experienced volatility as the cut approached.
This climate offers an “almost generational” opportunity in fixed income, Akullian says. The potential for total return is greater now than it will be as the Fed starts to loosen. Rate cuts will boost bond prices and decrease yields, eating away at future total returns.
The sweet spot on the yield curve is between about three and seven years, unlike last year, when the short end of the curve was more attractive, Akullian says. “It’s not a bad thing to own some duration right now,” says Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions. Shorter-maturity yields are best when inflation is hot and rates are rising rapidly.
Investors piling into three-month Treasury bills at around 5.2% should remember that’s an annualized yield, Janasiewicz says. To achieve it, you’d need to reinvest your T-bill at the same rate three more times as it matures. Given that rates may fall in the next year, he agrees with Akullian that three- to seven-year maturities are the strongest choice.
Exchange-traded funds like iShares Core U.S. Aggregate BondAGG –0.35% (ticker: AGG) offer exposure to high-quality U.S. bonds in the belly of the yield curve. The average yield to maturity is 4.33%. That fund includes Treasuries; for corporate-only exposure, the iShares iBoxx$ Investment Grade Corporate BondLQD –0.36% ETF (LQD) now yields 5.03%.
With junk bonds offering rates of 8% or so, it might be tempting to venture into high-yield territory. But with a possible recession—and the resulting rise in defaults—they’re risky.
As bonds outperform, cash loses some of its luster. Historical data show that cash exposures return less on average than core bond and short-term bond exposures when the Fed stops tightening, BlackRock found. From 1990 to early 2023, core bond exposures performed 4% better than cash equivalents on average when the Fed held or dropped rates, while high-quality short-term bonds performed 1.9% better than cash.
“The overweight to cash was the big story of last year,” Anne says. “But everything comes to an end.”
The original article posted by semi_infinite was from the New York Times and not Michael Bloomberg. The article discussed an ongoing issue in the Gulf with abandoned oil wells. It is an article about properly capping mainly off shore oil wells. Since no one, to my knowledge, is pumping oil from deep under Gulf water with a 'green windmill', I think it's highly unlikely they will "face the same problem in a few years". It's not that there aren't problems but the problems are quite different.
You are also correct. This is a core tenet of Bollinger Bands.