All things STOCKS

#15,352
#15,352
Well, it feels capitulationy to me. Maybe I "ain't seen nothing yet".

P.S. On the plus side, I do have some i-bonds becoming more "sellable" yesterday. And I sold 'em.
 
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#15,354
#15,354
Firebirdparts said:
Are we getting anywhere close to capitulation when nobody posts in this thread for a week?
Click to expand...

I’d guess not quite yet. Unless capitulation is defined as being “near” the bottom. We’ve probably already seen the highs in the averages in 2023. Right now, every rally is getting sold by the program trading. Interest rates are almost a singular issue (IMO).

Anything other than one more 25 BP hike at the next meeting probably determines where to from here in the near term. A pause could push averages back to, and maybe beyond, previous highs.

I think new highs will come quickly as soon as the first rate cut is announced or indicated.

Right now the high rates, especially for the 2-year treasury bonds, discourage equity ownership. The alternative of owning debt is too lucrative right now. Especially if rates are near the top (bonds increase in value as interest rates fall).

Year over year EPS comps are going to be much better is 2024. But multiples are still at the upper end. It would be great to see 15-20% gains in 2024 but around 10% is much more reasonable. Election years usually are good but Trump v Biden isn’t what the majority wants to see. It might be chaotic.
 
#15,355
#15,355
I have American Express (AXP) and Fortinet (FTNT) on my shopping list. If I move some things around I currently have BA, DIS, and ASML on my next tier of targets.

ASML might still have some gains to give up. FTNT is still a 40x plus PE, but I’d like to add a cyber security name - PLTR and AKAM are the closest stocks that I own that are even close to the industry.

BA and DIS are LT buy and hold considerations of beaten up blue blood stocks.
 
#15,356
#15,356
I haven’t been posting as much because the markets are crap right now (end of summer and September). Also I’ve already put most of my uninvested capital to work in the last couple of months and shares are too cheap to sell covered calls. Plus VN loses my posts more than half the time if they aren’t completed within a couple of minutes.
 
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#15,359
#15,359
Velo Vol said:
How do you know this?
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Two-thirds of US trading volume is algorithmic. Rallies haven’t been holding for a couple of years. There’s still too much resistance with interest rates, labor shortages, budget deficits, China/Russia, crime, lack of housing, partisan politics, and so on for markets to run. Therefore, and I’ve been paying attention, big moves up are quickly sold off. Plus PE multiples are still very high. The bots won’t be doing a lot of buying until much of that bad data is removed.
 
#15,360
#15,360
There has been a pronounced sudden drop in bond values (about 2 weeks), so people are now "starting to believe" that interest rates might be around 5-7% for a longer time. "Longer" here is defined as more than what was priced in, whatever that was. When you look at the yield curve you can sorta see whether the whole curve is moving up vs. whether it's flattening. So far, it has not really flattened much depending on where on the curve you look. FWIW.

I wasn't expecting this at all. If I had, I would have done something different.
 
#15,361
#15,361
Thunder Good-Oil said:
Two-thirds of US trading volume is algorithmic. Rallies haven’t been holding for a couple of years. There’s still too much resistance with interest rates, labor shortages, budget deficits, China/Russia, crime, lack of housing, partisan politics, and so on for markets to run. Therefore, and I’ve been paying attention, big moves up are quickly sold off. Plus PE multiples are still very high. The bots won’t be doing a lot of buying until much of that bad data is removed.
Click to expand...
I'm assuming most of the time humans who can override are monitoring the trades? Like a current self-driving car, but there's still someone in the driver's seat.
 
#15,362
#15,362
Firebirdparts said:
There has been a pronounced sudden drop in bond values (about 2 weeks), so people are now "starting to believe" that interest rates might be around 5-7% for a longer time. "Longer" here is defined as more than what was priced in, whatever that was. When you look at the yield curve you can sorta see whether the whole curve is moving up vs. whether it's flattening. So far, it has not really flattened much depending on where on the curve you look. FWIW.

I wasn't expecting this at all. If I had, I would have done something different.
Click to expand...
A lot of the money going into TLT, etc., wasn't expecting it either.
 
#15,364
#15,364
Go aeiou said:
No one knows what bonds are going to do.

We might not be near the top.

Place your bets:

www.macrotrends.net

10 Year Treasury Rate - 54 Year Historical Chart

Interactive chart showing the daily 10 year treasury yield back to 1962. The 10 year treasury is the benchmark used to decide mortgage rates across the U.S. and is the most liquid and widely traded bond in the world.
www.macrotrends.net www.macrotrends.net
Click to expand...
Hard for me to imagine the 10 y moving beyond 6-7% without major impact on the economy, in which case the Fed steps in.
 
#15,366
#15,366
With over $30T in national debt, the government will do whatever they can to bring rates down. IIRC, the interest paid on our debt is almost equal to the budget for military spending. At least the biggest owners of the debt are US citizens, so the interest paid is recycles back into our economy. Plus it is taxed.

It would be interesting to see a schedule of how much is coming due with dates and rates. Hopefully a lot of that $33.4 trillion is locked in to near zero LT bonds. I think that most of what Trump added happened when rates were near zero. The trillions being added now are costing hundreds of billions annually.

 
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#15,374
#15,374
Velo Vol said:
Hard for me to imagine the 10 y moving beyond 6-7% without major impact on the economy, in which case the Fed steps in.
Click to expand...
6% + from 1969 to 1997.
28 1/2 consecutive years.
 

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