j21black
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Tighten your belts people...
- Thread starter GRADS
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nowski
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Anyone notice the oil prices over the last two months???
In just two months the oil price per barrel has gone from $75 down to $51. That's an indicator of a global slow down IMO...
In just two months the oil price per barrel has gone from $75 down to $51. That's an indicator of a global slow down IMO...
D19
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Rates aren't even at a normal level and it's hurting the market. If the economic data was accurate and the US was as strong economically as some want us to believe, a slight increase in rates wouldn't effect the market as much as it has.
I got an email yesterday from a builder; "4 months no payments on your new home". 8 months ago, they had waiting lists, now the builders are starting to struggle again.
Say whatever you want about GDP, the stock market, tarrfis, wages, affordability and etc, but it does not change the fact that you can not borrow your way out of debt. That's what happened, the can was kicked down the road and it looks like we are catching up to it.
All recessions are linked to massive debts. This nation is in more debt than it ever has been both in the government and individually.
I don't have a crystal ball, I don't know anything for sure, but I would consider myself an expert in RE. Based on my knowledge, we are in for more than a correction, but only time will tell.
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ChumpChange
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The sky is falling! Some give statistics saying it's crashing and some say it remains healthy. Choose who you are hitching your wagon to, wisely.
https://www.raymondjames.com/pointo...paign=investment strategy&utm_content=article
Volatility Dominates, but Economic Data Remains Healthy
Despite the current market turmoil, several factors support future equity growth, says Chief Investment Officer Larry Adam, CFA, CIMA, CFP®.
December 5, 2018
Equity market volatility continues to dominate the investment landscape. However, note that the volatility has been in a fairly contained range over the last two months, and the midpoint of that range is not that far from Tuesday’s close. Additionally, over the last few weeks, several positive factors have continued to support our expectations that equities will move higher by year-end and into next year. A few positives include:
Healthy economic data.
Consumer data has remained strong with better-than-expected personal income, personal spending and vehicles sales. Manufacturing data has also been better than expected as reflected in the strong ISM manufacturing reading, which remains well above 50 at 59.3.
Near-record business and consumer confidence.
Per research from The Conference Board and the National Federation of Independent Business, consumer confidence remains near the highest levels since 2000, and small business confidence is at its highest level since 2004. Robust confidence should continue to support consumer and business spending.
A data-dependent Fed.
Recent speeches by Fed Chair Powell and Fed Vice Chair Clarida suggest that the path of further interest rate hikes is data dependent and not on a set course. In fact, the market has decreased its expectations for interest rate hikes: the probability of two rate hikes between now and year-end 2019 has gone from 92% on November 7 to 66% as of Tuesday.
Attractive valuations.
The combination of strong 2018 earnings growth (~22%) and fairly muted year-to-date S&P 500 performance (+~2.8%) has contracted the multiple of the S&P 500. With consensus 4Q18 earnings growth of ~15%, another strong quarter of earnings should highlight the attractiveness of the equity market. The current Next Twelve Months (NTM) P/E is 15.9x compared to 18x at the beginning of the year.
Inverted yield curve reality.
With the 10-year Treasury yield falling below 3% to 2.92%, longer duration bonds have become incrementally less attractive going forward given our expectation of slightly higher yields. (Admittedly, cash, as represented by the 3-month T-Bill, has become more attractive with a yield of 2.42%.) The potential for an inverted yield curve, with the current spread between the 10-year Treasury and 2-year Treasury down to 11 basis points, looms as a potential market negative. However, even when the yield curve inverts, it is not an imminent sign of a recession or equity market top as it takes well over a year before it negatively impacts the economy or market.
“Vaguely specific” trade negotiations.
While there is skepticism around the timing and details of a massive trade deal between the U.S. and China, the fact is that the uptick in tariff rates on Chinese goods (from 10% to 25%) expected to take effect on January 1 has been postponed for three months, which is a positive sign that the two sides are engaged in discussions. Knowing how important trade and equity markets are for President Trump’s re-election campaign, there is still a belief that a compromise will ultimately prevail early next year.
Biased bearishness.
While not all sentiment indicators are flashing extreme oversold conditions, one to note is the American Association of Individual Investors (AAII) Investment Sentiment Bearish Reading, which last week reached its highest level since February 2016 (the last time we had a 10%+ pullback). Importantly, that pullback proved temporary as the market recovered its losses and continued its upward ascent (up more than 20% from the lows until year-end).
Bottom line: The balance of economic and fundamental dynamics we analyze suggest the current market sell-off presents a buying opportunity for investors with a long term investment outlook.
All expressions of opinion reflect the judgment of Larry Adam and are subject to change. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. U.S. government bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. Past performance may not be indicative of future results. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
https://www.raymondjames.com/pointo...paign=investment strategy&utm_content=article
Volatility Dominates, but Economic Data Remains Healthy
Despite the current market turmoil, several factors support future equity growth, says Chief Investment Officer Larry Adam, CFA, CIMA, CFP®.
December 5, 2018
Equity market volatility continues to dominate the investment landscape. However, note that the volatility has been in a fairly contained range over the last two months, and the midpoint of that range is not that far from Tuesday’s close. Additionally, over the last few weeks, several positive factors have continued to support our expectations that equities will move higher by year-end and into next year. A few positives include:
Healthy economic data.
Consumer data has remained strong with better-than-expected personal income, personal spending and vehicles sales. Manufacturing data has also been better than expected as reflected in the strong ISM manufacturing reading, which remains well above 50 at 59.3.
Near-record business and consumer confidence.
Per research from The Conference Board and the National Federation of Independent Business, consumer confidence remains near the highest levels since 2000, and small business confidence is at its highest level since 2004. Robust confidence should continue to support consumer and business spending.
A data-dependent Fed.
Recent speeches by Fed Chair Powell and Fed Vice Chair Clarida suggest that the path of further interest rate hikes is data dependent and not on a set course. In fact, the market has decreased its expectations for interest rate hikes: the probability of two rate hikes between now and year-end 2019 has gone from 92% on November 7 to 66% as of Tuesday.
Attractive valuations.
The combination of strong 2018 earnings growth (~22%) and fairly muted year-to-date S&P 500 performance (+~2.8%) has contracted the multiple of the S&P 500. With consensus 4Q18 earnings growth of ~15%, another strong quarter of earnings should highlight the attractiveness of the equity market. The current Next Twelve Months (NTM) P/E is 15.9x compared to 18x at the beginning of the year.
Inverted yield curve reality.
With the 10-year Treasury yield falling below 3% to 2.92%, longer duration bonds have become incrementally less attractive going forward given our expectation of slightly higher yields. (Admittedly, cash, as represented by the 3-month T-Bill, has become more attractive with a yield of 2.42%.) The potential for an inverted yield curve, with the current spread between the 10-year Treasury and 2-year Treasury down to 11 basis points, looms as a potential market negative. However, even when the yield curve inverts, it is not an imminent sign of a recession or equity market top as it takes well over a year before it negatively impacts the economy or market.
“Vaguely specific” trade negotiations.
While there is skepticism around the timing and details of a massive trade deal between the U.S. and China, the fact is that the uptick in tariff rates on Chinese goods (from 10% to 25%) expected to take effect on January 1 has been postponed for three months, which is a positive sign that the two sides are engaged in discussions. Knowing how important trade and equity markets are for President Trump’s re-election campaign, there is still a belief that a compromise will ultimately prevail early next year.
Biased bearishness.
While not all sentiment indicators are flashing extreme oversold conditions, one to note is the American Association of Individual Investors (AAII) Investment Sentiment Bearish Reading, which last week reached its highest level since February 2016 (the last time we had a 10%+ pullback). Importantly, that pullback proved temporary as the market recovered its losses and continued its upward ascent (up more than 20% from the lows until year-end).
Bottom line: The balance of economic and fundamental dynamics we analyze suggest the current market sell-off presents a buying opportunity for investors with a long term investment outlook.
All expressions of opinion reflect the judgment of Larry Adam and are subject to change. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. U.S. government bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. Past performance may not be indicative of future results. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
AZMIDLYF
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OPEC meeting rumor that they will pull back production to boost prices....great timing here
Classic Daycruiser
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I don't see a problem with real estate prices. Owning a detached single family home has become a luxury. Buying a condo is becoming the norm.
The job market is wide open. You can move just about anywhere and find a job.
I see huge pressure on companies to keep and train their workforces. Everyday I get inquires about leaving my current employer. That's not good for corporate organization or profits.
The job market is wide open. You can move just about anywhere and find a job.
I see huge pressure on companies to keep and train their workforces. Everyday I get inquires about leaving my current employer. That's not good for corporate organization or profits.
DrunkenSailor
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Yellen warns of another potential financial crisis: 'Gigantic holes in the system'
"I think things have improved, but then I think there are gigantic holes in the system," Yellen said Monday night in a discussion moderated by New York Times columnist Paul Krugman at CUNY. "The tools that are available to deal with emerging problems are not great in the United States."
Yellen cited leverage loans as an area of concern, something also mentioned by the current Fed leadership. She said regulators can only address such problems at individual banks not throughout the financial system. The former fed chair, now a scholar at the Brookings Institution, said there remains an agenda of unfinished regulation. "I'm not sure we're working on those things in the way we should, and then there remain holes, and then there's regulatory pushback. So I do worry that we could have another financial crisis.''
In the wake of the financial crisis, some agency regulatory powers were vastly expanded, but others, for example, the ability of the Fed to lend to an individual company in a crisis, were curtailed. Current Fed officials have pushed back against criticism that their reforms are making the system riskier, saying they are making the system more efficient.
Speaking in London in June 2017, shortly after leaving office, Yellen had said she did not believe there would be another financial crisis in our lifetimes because of financial reforms. However, she did warn at the time about the deregulatory efforts just then underway.
Yellen did not comment about the current financial or economic situation except to say, "Interest rates are low. I believe they're likely to remain lower than they've been in past decades." She noted that in a typical recession, the Fed cuts rate by 5 percentage points while the "normal level" of short-term interest rate is usually around 3 percent. "That means there's much less scope to cut short-term rates than there's been historically in the United States,'' Yellen said.
Discussing the history of the Fed's response to the crisis, Yellen said the Fed "probably could have done more" quantitative easing but was held back in part by public criticism of the Fed's bond-buying program. "At the margin, I think that was something that concerned people about pushing asset purchases a lot further."
- "I think things have improved, but then I think there are gigantic holes in the system," Yellen says.
- The former Fed chair cites leverage loans as an area of concern and says there remains an agenda of unfinished regulation.
- She also says rates will remain lower than they have been in past decades.
"I think things have improved, but then I think there are gigantic holes in the system," Yellen said Monday night in a discussion moderated by New York Times columnist Paul Krugman at CUNY. "The tools that are available to deal with emerging problems are not great in the United States."
Yellen cited leverage loans as an area of concern, something also mentioned by the current Fed leadership. She said regulators can only address such problems at individual banks not throughout the financial system. The former fed chair, now a scholar at the Brookings Institution, said there remains an agenda of unfinished regulation. "I'm not sure we're working on those things in the way we should, and then there remain holes, and then there's regulatory pushback. So I do worry that we could have another financial crisis.''
In the wake of the financial crisis, some agency regulatory powers were vastly expanded, but others, for example, the ability of the Fed to lend to an individual company in a crisis, were curtailed. Current Fed officials have pushed back against criticism that their reforms are making the system riskier, saying they are making the system more efficient.
Speaking in London in June 2017, shortly after leaving office, Yellen had said she did not believe there would be another financial crisis in our lifetimes because of financial reforms. However, she did warn at the time about the deregulatory efforts just then underway.
Yellen did not comment about the current financial or economic situation except to say, "Interest rates are low. I believe they're likely to remain lower than they've been in past decades." She noted that in a typical recession, the Fed cuts rate by 5 percentage points while the "normal level" of short-term interest rate is usually around 3 percent. "That means there's much less scope to cut short-term rates than there's been historically in the United States,'' Yellen said.
Discussing the history of the Fed's response to the crisis, Yellen said the Fed "probably could have done more" quantitative easing but was held back in part by public criticism of the Fed's bond-buying program. "At the margin, I think that was something that concerned people about pushing asset purchases a lot further."
GRADS
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Who's ready?
78Southwind
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I am ready. Just let me know when you sell your Apple stock so I can pick it up on the cheap.
2FORCEFULL
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dude,... thanks for the walk down memory lane.... had some good times with ZigZags....
2FORCEFULL
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this was on the news last night in Vegas...realtors claim that they have houses sitting with no looks or offers for over 30 days...
grumpy88
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Works for me . When Vegas home prices crash I'm buying this time . Time to get out of California.
2FORCEFULL
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heres where I think we are heading, homes will be bought by investors,... and turned to rental properties...they're not giving loans to credit criminals...so sells are gonna slow down...those that can't get a loan will have to rent, and like before, rent will be more than a loan payment..
TripleB
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When is this going to happen?
ChumpChange
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Two weeks!
The same economists saying next year have been saying that for the past three years.
LargeOrangeFont
We aren't happy until you aren't happy
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I am.
LargeOrangeFont
We aren't happy until you aren't happy
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Total financial Armageddon!! 2 weeks!!
AZMIDLYF
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Make sure your seat backs and tray tables are in full upright position people...it's going to be a bumpy ride.
monkeyswrench
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Been following this thread for a bit. My general take is this...the economy is cyclical, pretty much always was. My personal observation, homes are being built out here, and sitting on the market. The custom builds are slowing down a tick, but the retirees are finishing them and moving in...mostly Cali people. Last go around, timing was right, and I jumped ship from Cali...so I can't blame them. I don't know how this next correction will play out, how drastic and how long, but I have a different goal this time. I'd like to pick up some acreage. I'd like something in the 40 or more acre range, trees and hills. So, I ask the financial gurus on RDP, will prices on that type of property slide as well? The last go around ranch type property was not even remotely on my radar. Did people buy those when they had cash burning a hole in their pockets?
an observation here in OC that has been discussed with several friends.....
Restaurants and bars are markedly less crowded on any given night.
The rate of brick and mortar closures is increasing . Look at the Town Center in Aliso Viejo. Lowes, gone. Three store front eateries in a row by the theaters, gone...Cosmos Italian, gone...
Seems like people are not spending as much or may not have as much to spend due to higher gas, cost of housing, etc...
Hopefully, just the cycle working its way through...
Restaurants and bars are markedly less crowded on any given night.
The rate of brick and mortar closures is increasing . Look at the Town Center in Aliso Viejo. Lowes, gone. Three store front eateries in a row by the theaters, gone...Cosmos Italian, gone...
Seems like people are not spending as much or may not have as much to spend due to higher gas, cost of housing, etc...
Hopefully, just the cycle working its way through...
IMO there is always another recession coming, I've lived through three of them in my adult life. I've always continued to make money through them, in fact 2009 -2010 were my best years ever in the HVAC biz. There may be another recession around the corner, but we're not there yet. I have been trying to find a contractor to build a new patio cover / outdoor living space and the three contractors I've talked to are booked solid for the next year. IMO, we still have a ways to go. If Trump announces the China deal has been resolved, the market is going to run up again.
LargeOrangeFont
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That shopping center has never done that great in my estimation. There was always restruant turnover there.. and no one in Aliso Viejo has use for a Lowe’s lol.
AZMIDLYF
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100% agree on the cyclical economics through-out history, but the insanity in every corner of the globe right now is unprecedented. No matter where you look...bright spots are hard to find.
HighRoller
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I agree that it won't be as severe as last time...
UNLESS...
We get a new President. Then it will probably be worse. All politics aside, business tends to be very bearish towards tax and spend leadership.
AZMIDLYF
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And this whole process ^^^ in the coming year will just exponentially add to the global volatility.
brgrcru
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oh its coming.
the MSM will do exactly what they did to George H Bush . drum bad news up 24/7 for 2 years. bad economy is the ticket to the left house. I mean White House.
the MSM will do exactly what they did to George H Bush . drum bad news up 24/7 for 2 years. bad economy is the ticket to the left house. I mean White House.
GRADS
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Let's see what tomorrow brings...could get crazy!
I am an electrical contractor specializing in retail stores. I am getting 10-15 bid invites per week all over SoCal. I personally do not see stores and restaurants slowing down. Lowe's is having to downsize because of their bad investment they made with the purchase of Osh.
ilmormark
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Been doing credit reports for banks and Mortgage company's for 30 year never in the history of my career has it been so busy. it usually slows down by 50% during the holidays this year up 10% amazing no down turn coming a slow down yes recession no way...
AZMIDLYF
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People trying to get their purchases in before the sh!t storm hits.
There’s a ton of carpenters that live there... my boss lives there
LargeOrangeFont
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There is also 10s of thousands that can barely change a lightbulb. It is not really a DIY demographic area.
There is a Home Depot 3 mins away from this Lowes anyway. All of that is contributing to why that Lowes is performing poorly.
The only reason I ever went there was to get metric hardware in a pinch. They had a better stock than HD.
Mandelon
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Lowes is for ladies. Decorator stuff. Pretty lamps and they only stock enough tile to look at..never enough to do a whole job. LOL
riverroyal
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Peanut butter trick with that dog again?Let's see what tomorrow brings...could get crazy!
GRADS
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This week should be interesting with many companies, including the biggest (Apple), coming out with with shrinking guidance for the next quarter....It's coming.
LargeOrangeFont
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This week should be interesting with many companies, including the biggest (Apple), coming out with with shrinking guidance for the next quarter....It's coming.
Must be why you bought the AAPL stock this morning and not tomorrow morning, right Nostradamus?
APPL's problem is the phones are too expensive here and the China market is softening.
WhatExit?
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Based on my experience...I've been through recessions before and one thing that helps them happen sooner is people talking about them all the time (in person, in the news, online, etc.). While we don't control what's happening, the attitude of people is what contributes to them - people are nervous, they get worried, they cut back on spending and viola! There you have it - spending cuts across the board. Companies are made up of people and the more people hear about recession the more they think about it and react by cutting back at work and at home.
78Southwind
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To change the subject is that your jet boat (every time I see it I want to ask you)? Pretty cool if it is...I was down at B1 when they were building the engine plates for that boat and Chris told me about Mike's plans for the Lake Elsinore engine swap.
brgrcru
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and for the next 2 years it will be an on going event with MSM. why ? you ask. its the only way there head ache for the last 2 years will be voted out.
grumpy88
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I agree with this . The stock market is a big game controlled by billionaires who have all the corporate control . They don't like Trump and this will be the next play. It's passive aggressive and the rest of us are pawns . We have been led to beleave every American should invest our money in invisible stock like every child should go to college . We have become the sheep !
PaPaG
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I am loving this market....time for the big boys to step in and the fearful to get out.............it's money making time.....
WhatExit?
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This week should be interesting with many companies, including the biggest (Apple), coming out with with shrinking guidance for the next quarter....It's coming.
If you know AAPL you know they got greedy and their products' prices are too high. Good luck with your stock...
Apple Makes Rare Cut to Sales Guidance
https://www.wsj.com/articles/apple-...wer-revenue-in-fiscal-1st-quarter-11546465050
Apple stock loses $55 billion on China slowdown
https://www.cnn.com/2019/01/02/tech/apple-iphone-sales-guidance/index.html
AZMIDLYF
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1. China
- "Most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."
- "We believe the economic environment in China has been further impacted by rising trade tensions with the United States."
- "Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline."
Relentless heavy cash outflow going down now.
Good time to stay back and wait. Could be awhile.
JMO.
In 2 or 3 years, Apple is not going to exist the way they currently do.
1) Cel phones are becoming a commodity. Even Tim Cook says there's lots of excellent phones on the market.
2) People aren't going to keep paying $1000+ every year for a new phone that doesn't do anything much better than their current phone does.
3) There's no new killer app on the horizon.
4) For Apple in particular ; iMessage is a non starter in China. There standard messaging tool is WeChat.
5) There are Chinese companys already selling excellent smatphones at home: Huawei, Oppo, and Vivo.
6) 5G is the next buzz word in what's coming next in the IOT communication world and from what I understand, Huawei is already at the leading edge of it.
1) Cel phones are becoming a commodity. Even Tim Cook says there's lots of excellent phones on the market.
2) People aren't going to keep paying $1000+ every year for a new phone that doesn't do anything much better than their current phone does.
3) There's no new killer app on the horizon.
4) For Apple in particular ; iMessage is a non starter in China. There standard messaging tool is WeChat.
5) There are Chinese companys already selling excellent smatphones at home: Huawei, Oppo, and Vivo.
6) 5G is the next buzz word in what's coming next in the IOT communication world and from what I understand, Huawei is already at the leading edge of it.
GRADS
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How long before Trump starts subsidizing Apple like he is the farmers because of his awesome tariff war.
I predicted the night he was elected he would cause a recession within in two years, looks like it’s right on schedule.
I predicted the night he was elected he would cause a recession within in two years, looks like it’s right on schedule.
AZMIDLYF
Well-Known Member
- Joined
- Sep 18, 2015
- Messages
- 2,931
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Huawei is/was at the 5G leading edge and the U.S. decided they needed to slow things down to play catch up, so the tariff debacle was initiated. Nothing new for the U.S. as far as strategies. Russia trying to get a pipeline built through Syria to supply fuel/LNG to Europe. Russia's only Mediterranean base/port is in Syria. The U.S. trying to figure out the tech to ship it to Europe...start a civil war in Syria so nothing gets done. Guess what? The U.S. solved the shipping issue and is shipping LNG to Europe now. 40% of Russia's fuel is in Europe. The billion-dollar players have to plan in the decades' arena(globally). Geopolitical BS has been shaping things forever...follow the money as they say.
Flying_Lavey
Dreaming of the lake
- Joined
- Feb 13, 2008
- Messages
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You mean your beloved Apple? You have been drinking the kool-aide for so long you couldn't imagine people would ever get fed up with the company. Yet, here it is. People are tired of paying huge sums of money for phones that truely are no better, and in some cases worse, than their competition. Many people are tired of the overt control Apple forces over their users. This has nothing to do with tariffs. Their phones have been on this price trajectory for YEARS now. But hey, Trump said Pussy.How long before Trump starts subsidizing Apple like he is the farmers because of his awesome tariff war.
I predicted the night he was elected he would cause a recession within in two years, looks like it’s right on schedule.
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