STOCK MARKET WATCH: Tuesday, 14 May 2024

[Tansy_Gold]

STOCK MARKET WATCH: Tuesday, 14 May 2024

Previous SMW:
SMW for 13 May 2024



AT THE CLOSING BELL ON 13 May 2024


Dow Jones 39,431.51 -81.33 (0.21%)
S&P 500 5,221.42 -1.26 (0.024%)
Nasdaq 16,388.24 +47.37 (0.29%)

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Market Conditions During Trading Hours:

Google Finance
MarketWatch
Bloomberg
Stocktwits

(click on links for latest updates)

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Currencies:






(Awaiting new links)


Gold & Silver:

(Awaiting new links)


Petroleum:

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DU Economics Group Contributor Megathreads:

Progree's Economic Statistics (with links!)
mahatmakanejeeves' Rail Safety Megathread
mahatmakanejeeves' Oil Train Safety Megathread

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Quote for the Day:

Bubbles in asset markets are propelled by investors’ belief that some industry or the economy in general has entered a new era of unparalleled expansion— an era in which fundamentals that previously dictated more limited growth do not apply. At their origin, bubbles may indeed begin as a result of some new technology or rise in productivity that drives up asset prices. But the suddenness and the speed of change can lead to “waves of optimistic . . . sentiment, which are unreasoning” (Keynes 1936), or “irrational exuberance” (Greenspan 1996). In these cases, investors push prices beyond what is revealed ex post to be their fundamental values. The popping of a bubble forces painful reallocations of portfolios and resources, which are often accompanied by demands for government intervention.

David Chambers. Financial Market History: Reflections on the Past for Investors Today. CFA Institute Research Foundation. © 2016.

This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

[bucolic_frolic]

1. In re Quote for the Day: 2001 was a bubble, there were no tech earnings.

Now, most of the earnings are in tech. It's the rest of the economy that's in trouble. See HD and LOW building suppliers.

[Tansy_Gold]

2. I'm not a market player, but . . . . .

I don't watch anything to do with the markets particularly closely, and I am about as far away from an expert as you can get. I've had that book -- digital edition -- for several years and only occasionally dip into it, because mostly it's over my head. The only thing that made me look at it today was just an odd feeling about the markets in general, that something is bubbling (ha ha, pun intended) under the surface. Is the government infusion in infrastructure, in bringing manufacturing back onshore, mitigating if not cancelling student debt, etc., etc., etc., a way of hedging again an enormous bubble . . . . somewhere?

¯_(ツ _/¯ I don't know. But I found that particular paragraph interesting, and though I'd throw it out for potential discussion. Hey, I might learn something!

[bucolic_frolic]

3. My weekly doggerel is YouTube rehash, though I have my favorite sources

and they're not 20-somethings trying to be fin news personalities.

I do better when I don't watch markets so closely, so maybe you're on to something!

[progree]

4. There has been a surge in inflation in the last 3 months. On Wednesday we get the CPI report

The inflation optimists (the ones that say inflation is declining and we've almost got this licked) touts the rolling 12 months coming down, but looking at a bar chart of month-over-month and rolling 3 months averages, it's clear there's been a resurgence since December.

All of the inflation graphs are at: https://www.democraticunderground.com/10143231474#post1

I'll just post the regular aka "headline" CPI graph through March that came out 4/10/24, since that's the one that will be updated on Wednesday (along with the core CPI)
data source: https://data.bls.gov/timeseries/CUSR0000SA0


In a 12 months rolling average, any month's increase is watered down by a factor of 1/12, so even if the latest month-over-month number is large, the change in the 12-month average looks like a little bump up -- and people just say, oh it’s a little bump up due to seasonal factors (the numbers are seasonally adjusted by the way).

Even a large 3 month increase gets watered down by a factor of 1/4 in a 12-month rolling average.

I'm not the only one that looks at shorter periods like 3 and 6 months to get a better read on CURRENT or RECENT inflation:

https://finance.yahoo.com/news/new-inflation-reading-reinforces-feds-higher-for-longer-stance-144840988.html

Fed Chair Jay Powell warned about today's PCE reading on April 16, saying he didn’t expect it to show progress and that measures of inflation on a three- and six-month basis are now more elevated.

(emphasis added)

Anyway, I'm waiting for people to realize that we're not on course for a soft landing.

That said, I expect a little bit of a downturn in the 3 month rolling average increases with the Wednesday CPI report because the huge month-over-month increase in January drops out of the 3 month window. But I'm expecting that the April over March increase will still be well above 3% (annualized).

(From surveys of economists conducted by Dow Jones Newswires and The Wall Street Journal, it is expected that the core CPI will increase 0.3% and the regular CPI will increase 0.4% from March to April https://www.marketwatch.com/economy-politics/calendar )

Fans of the 12 month rolling average (the rolling year-over-year one) will also probably see a slight downturn in that graph as the large increase in April 2023 over March 2023 (0.43% which is over 5% annualized) drops out of the 12-month window. But it will be only a minute downturn if a 0.4% increase in this April over March replaces the one dropping out of the window.

[DemReadingDU]

5. No market player either

Something seems on the edge , about to go over the cliff, just waiting

[Tansy_Gold]

7. Yeah, something just doesn't feel . . . . normal

And I write that subject line as someone who doesn't really know what "normal" in the stock market is supposed to be.

As I think about it, however, and falling back on what I think has transpired in this daily thread over the years, it seems there are two things going on right now that set tiny alarm bells ringing.

One is the "Truth" social IPO. There is no there there, yet it hasn't crashed. To me, this reeks to high heaven of corruption, and it means there are powers-that-be-out-there with the ability to effect that kind of manipulation.

Second is the demand that Elon Mush [sic] be paid billions upon billions in "compensation." Compensation for what? Breathing? Farting? Being stupid? To me, this is the ultimate corruption of capital. He can't conceivably spend that much money, so why? Why? Why? For the title of richest human being?

There's always a tipping point. I don't know if we're approaching it or not. Maybe we're standing by a tree and waiting for something that never arrives.

[Warpy]

6. Warpy's Rule

When you start getting hot ips on the market from people who have jobs instead of careers, it's time to get out.

1999-2000was such a heady time, everybody talking about the next red hot IPO coming out. I sighed heavily and kept ,my limited cash in a liquid state. Not only had those companies never turned a profit, few of them had any way to turn a profit in the future unless they also had a bricks and mortar store that was doing very well.

People were throwing millions of dollars they could ill afford at flashy websites that had nothing to back them up but hype.