Anybody Buying Yet? Where’s the Bottom?

[BigHornRam]

My gut feeling, Monday is going to be ugly.

Stocks Tumble Toward Bear Market Lows; What To Do

After a brief bounce, the major indexes are back near lows.

www.investors.com

 

[HONEYBADGER]

Add the jobs report to the list of strange data. Mortgage rates double and the jobs in construction increased? There was a slight decline in residential but kind of a rounding error. Maybe the seasonal adjustment is not fully taking into account the problems the industry is experiencing? Hard to align the news from builders with this data.

View attachment 243375

Jobs data has become so political you can't believe any of it anymore.

 

[SAJ-99]

Jobs data has become so political you can't believe any of it anymore.

That’s ridiculous. Both parties want jobs, it’s just a matter of who can claim them with the best BS story.

 

[Sytes]

That’s ridiculous. Both parties want jobs, it’s just a matter of who can claim them with the best BS story.

Isn't that what he said? Jobs data has become so political... No mention of one or the other party. Simply "Spin"...

 

[SAJ-99]

Isn't that what he said? Jobs data has become so political... No mention of one or the other party. Simply "Spin"...

Not exactly, he claimed you can’t believe it. Politics is all about spin, but I’m not getting into any grand conspiratorial idea that the numbers are fictitious. There are plenty of inherent flaws in how they are obtained and calc’d that can keep us busy. I’m not throwing the people that make the phone calls under the bus.

 

[Sytes]

Interesting news on the Semiconductor world - Room for a short / Put play for a few % - then flip it to long / call? Meh, I've always enjoyed playing the Semi market. It holds the inevitable future.

"Qualcomm (QCOM), Nvidia (NVDA) and chip equipment makers led semiconductors lower on Monday as the industry deals with new export rules from the U.S. slated to curb the use of advanced chips in Chinese military applications."

Other news worth noting:

The BoE move has little immediate impact for investors in U.S. securities, but the global markets are sending a signal that there will be adverse consequences as central banks try quantitative tightening. "The bottom line is, after decades of central bank stimulus inflating bubbles and financial leverage to grotesque heights, the markets are still in charge and they just won’t tolerate QT," SocGen's Albert Edwards wrote after the first BoE intervention. "I keep citing Mike Tyson’s famous quote, 'everyone has a plan till they get punched in the face.' Which reminds me, isn’t the Fed in the process of doubling its QT to $96bn a month? Good luck with that!". The Fed's Charles Evans said yesterday he sees QT completed in a few years. For stocks (SPY) (QQQ) (DIA) (IWM), BofA strategist Michael Hartnett said on Friday a risk would struggle to rally in Q4 if central bank "policy panics" fail and U.K. gilt yields "amazingly" rose despite the BoE's new QE moves. Morgan Stanley's Mike Wilson said the Fed may indeed have to follow the same path as the BoE with M2 money supply growth in the "danger zone." "Some may argue that the UK is in a unique situation and so this doesn’t portend other central banks doing the same thing," Wilson said. "However, this is how it starts. In other words, investors can’t be as adamant that the Fed will choose to or be able to follow through on its guidance."

credit:

Stock Picks, Stock Market Investing

seekingalpha.com

 

[SAJ-99]

The BoE move has little immediate impact for investors in U.S. securities, but the global markets are sending a signal that there will be adverse consequences as central banks try quantitative tightening. "The bottom line is, after decades of central bank stimulus inflating bubbles and financial leverage to grotesque heights, the markets are still in charge and they just won’t tolerate QT," SocGen's Albert Edwards wrote after the first BoE intervention. "I keep citing Mike Tyson’s famous quote, 'everyone has a plan till they get punched in the face.' Which reminds me, isn’t the Fed in the process of doubling its QT to $96bn a month? Good luck with that!". The Fed's Charles Evans said yesterday he sees QT completed in a few years. For stocks (SPY) (QQQ) (DIA) (IWM), BofA strategist Michael Hartnett said on Friday a risk would struggle to rally in Q4 if central bank "policy panics" fail and U.K. gilt yields "amazingly" rose despite the BoE's new QE moves. Morgan Stanley's Mike Wilson said the Fed may indeed have to follow the same path as the BoE with M2 money supply growth in the "danger zone." "Some may argue that the UK is in a unique situation and so this doesn’t portend other central banks doing the same thing," Wilson said. "However, this is how it starts. In other words, investors can’t be as adamant that the Fed will choose to or be able to follow through on its guidance."

I have noted that it seems there is no appetite for a positive, or even a cautious view on markets nowadays. Everyone tries to be more dire and more shocking in their potential scenarios.

Edwards analysis lacked a lot. Think of the situation that happen there (the UK) in terms of the our Social Security system. The UK doesn't have enough bonds to fund the system, so they borrow to increase leverage, entered into derivatives, and posted UK gilts as collateral. The rate volatility meant a drop in collateral value and they had trouble posting the margin call. 1) the US government system (like SS) doesn't rely on derivatives because it doesn't need to. There is plenty of US treasuries of various maturities to meet those obligations. 2) at some rate on US debt, buyers will emerge. I have asked before - What yield makes a bond attractive to ordinary Americans. Apparently, 4%+ at the 2-5yr maturity is getting close because the latest auction had pretty strong demand numbers. All that said, the core of Edwards claim remains true. Bond volatility is a problem. Given US treasuries are the world's greatest securities used as collateral for borrowing, a sharp move in their price could cause problems. I am surprised it didn't cause a problem for someone already.

 

[rogerthat]

I have noted that it seems there is no appetite for a positive, or even a cautious view on markets nowadays. Everyone tries to be more dire and more shocking in their potential scenarios.

Edwards analysis lacked a lot. Think of the situation that happen there (the UK) in terms of the our Social Security system. The UK doesn't have enough bonds to fund the system, so they borrow to increase leverage, entered into derivatives, and posted UK gilts as collateral. The rate volatility meant a drop in collateral value and they had trouble posting the margin call. 1) the US government system (like SS) doesn't rely on derivatives because it doesn't need to. There is plenty of US treasuries of various maturities to meet those obligations. 2) at some rate on US debt, buyers will emerge. I have asked before - What yield makes a bond attractive to ordinary Americans. Apparently, 4%+ at the 2-5yr maturity is getting close because the latest auction had pretty strong demand numbers. All that said, the core of Edwards claim remains true. Bond volatility is a problem. Given US treasuries are the world's greatest securities used as collateral for borrowing, a sharp move in their price could cause problems. I am surprised it didn't cause a problem for someone already.

I think buyers are trying to decide where long term inflation will be. I know I am. Is this the 70s? I tend to think not and we have to be close to that rate that starts to look very attractive

 

[Sytes]

Everyone tries to be more dire and more shocking in their potential scenarios.

I believe it's easier to be a cynic than an optimist - IN PRINT. Especially when there's a god split on the near/mid future. Optimist are crapped on if the wrong side of the coin lands whereas a cynic/pessimist is much less likely on the hot-seat for being, "cautious".
Some say it as they see it... others, have trouble dealing with the hate mail if their optimistic outlook was followed and sunk someone's battleship.

There was a gent who had a website on Federal TSP. Until the Corona Crash. He received too many threats and shady veiled comments, he shut down his site. A great guy with MANY years of great advise. Some people don't like holding themselves accountable.

To me - each person's responsible for their own decisions, information, etc. Stocks are a "To each his/her own" setting. I don't hold others accountable for my decision to buy, based on others input.

 

[npaden]

I know if the borrowing rates hit 8% that I'm going to be selling some stocks and paying off some debt with the proceeds.

 

[Nick87]

I know if the borrowing rates hit 8% that I'm going to be selling some stocks and paying off some debt with the proceeds.

When do the rates start to go up on savings, cd etc..?

 

[npaden]

When do the rates start to go up on savings, cd etc..?

Some already are. I'm seeing some 3% interest on savings accounts already (Robinhood). Banks are being a bit greedy right now still on savings but some of the other more alternative online places are already up.

Interest rates are shooting up. So why is your savings account still paying 0.13%?

Brick-and-mortar banks are paying rates that are far below the Federal funds rate. Here's why — and how to find a better rate.

www.cbsnews.com

 

[BigHornRam]

Some already are. I'm seeing some 3% interest on savings accounts already (Robinhood). Banks are being a bit greedy right now still on savings but some of the other more alternative online places are already up.

Interest rates are shooting up. So why is your savings account still paying 0.13%?

Brick-and-mortar banks are paying rates that are far below the Federal funds rate. Here's why — and how to find a better rate.

www.cbsnews.com

My bank just raised my savings interest to .75%. I was thinking about shopping for better rates. Thanks for the motivation to start looking into it a little deeper.

 

[SAJ-99]

I believe it's easier to be a cynic than an optimist - IN PRINT. Especially when there's a god split on the near/mid future. Optimist are crapped on if the wrong side of the coin lands whereas a cynic/pessimist is much less likely on the hot-seat for being, "cautious".
Some say it as they see it... others, have trouble dealing with the hate mail if their optimistic outlook was followed and sunk someone's battleship.

There was a gent who had a website on Federal TSP. Until the Corona Crash. He received too many threats and shady veiled comments, he shut down his site. A great guy with MANY years of great advise. Some people don't like holding themselves accountable.

To me - each person's responsible for their own decisions, information, etc. Stocks are a "To each his/her own" setting. I don't hold others accountable for my decision to buy, based on others input.

Agree. Mostly I think it shows a herd mentality. All the bulls are now bears, but only with writing and speaking. What they do and what they say might not match up. Semi recent trends in America is to find something to be anger about and blame someone else - the government is a favorite target. That is a sad story you gave about the guy with the website. Along the same lines, The Fed Govt is trying to make gig workers employees. I on the fence because I know most don't want to be employees (liberty and all that), but I also know that my taxes might have to support them because they make bad savings decisions.

I know if the borrowing rates hit 8% that I'm going to be selling some stocks and paying off some debt with the proceeds.

I'm confused, is it because you are paying 8%? 30yr Mtg is 7%, prime is 6.25% so auto loans have to be getting near your target. Not sure I would pay off debt if my rate was lower than that - negative convexity of mortgages and all that math stuff become a reality.

 

[SAJ-99]

My bank just raised my savings interest to .75%. I was thinking about shopping for better rates. Thanks for the motivation to start looking into it a little deeper.

Home — TreasuryDirect

www.treasurydirect.gov

30 day 2.98%
90 day 3.44%
180 day 4.11%

No fees if you buy direct and they do auctions every week.

 

[rogerthat]

Home — TreasuryDirect

www.treasurydirect.gov

30 day 2.98%
90 day 3.44%
180 day 4.11%

No fees if you buy direct and they do auctions every week.

Yeah my brick and mortar bank is still paying 0.05% or something like that. Highway robbery

 

[rogerthat]

Yeah my brick and mortar bank is still paying 0.05% or something like that. Highway robbery

2.15% on my Marcus account….still robbery

 

[npaden]

I'm confused, is it because you are paying 8%? 30yr Mtg is 7%, prime is 6.25% so auto loans have to be getting near your target. Not sure I would pay off debt if my rate was lower than that - negative convexity of mortgages and all that math stuff become a reality.

I'm not paying 8% yet. That's why I said "if". I'm paying 6.58% right now on a full variable rate on my land I just purchased in Colorado. I do have it with an Ag Coop Bank so I get about 1% back in capital credits but if it gets to 7.83% if we get the expected 1.25% hikes then I'm probably paying it down at least a bit. This is recreational so no mortgage interest deduction or anything fun like that. Bad timing on a big purchase from this perspective.

Just been a drag lately watching my stocks go down and my interest rate go up when I could have just sold the stocks and paid cash for the land at the time. Still could but not wanting to trigger a big pile of unrealized gains on a few of them.

 

[BigHornRam]

Home — TreasuryDirect

www.treasurydirect.gov

30 day 2.98%
90 day 3.44%
180 day 4.11%

No fees if you buy direct and they do auctions every week.

The 180 day looks very good compared to my bank, and is long enough term to to keep me from buying something stupid with my money.

 

[FREAK]

Getting closer…