OT: Stock and Investment Talk

[T2Kplus20]

@T2Kplus20 this is excellent?

Amazon stock drops on Q4 earnings, slowing AWS growth

Amazon shares slide lower in the after-hours trading session despite following a Q4 revenue beat and earnings miss.

finance.yahoo.com

Yes, very nice beat. AWS revenue continues to make all-time highs and their new ad business is booming (another beat). Well done! Cost cutting measures will benefit the next quarter and beyond. Gotta be bullish on AMZN.

 

[T2Kplus20]

Misses by AAPL due to the China lockdown and strong dollar. Since both issues are over, look for a huge 2023 for Apple and their products. Demand continues to be through the roof.

Awesome job by the big boys of the market. Onwards! :)

 

[rutgersguy1]

Make certain the account is co-owned by you and your spouse. That'll cover the $500k ($250k each owner). Otherwise a single-owner account is "only" insured to $250k.

If FDIC insurance is important and there's worry over the stability of the institution then 500K isn't enough actually. You're just covering the principal but none of the return above that principal.

Either split it among different banks or if you want to use the same bank then put it in different categories, assuming you trust your spouse lol. You can put some in one spouse's name, some in another spouse's name and a joint account. That way you'd essentially have up to 1M dollars in FDIC coverage at a single financial institution.

 

[Postman_1]

Yes, very nice beat. AWS revenue continues to make all-time highs and their new ad business is booming (another beat). Well done! Cost cutting measures will benefit the next quarter and beyond. Gotta be bullish on AMZN.

Gotcha thanks. I’m new at interpreting earrings reports.

 

[T2Kplus20]

Gotcha thanks. I’m new at interpreting earrings reports.

Don't be influenced by the market right after reports, whether a stock goes up or down. Sometimes the price will boom or crash due to other factors than the actual results. Gotta look ahead more.....unless you are a short-term trader.

 

[T2Kplus20]

If FDIC insurance is important and there's worry over the stability of the institution then 500K isn't enough actually. You're just covering the principal but none of the return above that principal.

Either split it among different banks or if you want to use the same bank then put it in different categories, assuming you trust your spouse lol. You can put some in one spouse's name, some in another spouse's name and a joint account. That way you'd essentially have up to 1M dollars in FDIC coverage at a single financial institution.

+1
We use 2 banks for our cash accounts. And yes, these are joint accounts because we trust each other. LOL!

 

[rutgersguy1]

Excellent quarter for AMZN, looks like a double beat. GOOGL is a double miss mostly due to ad revenue.

Still awaiting for AAPL. The Big 5 Tech are so far 3-1 for beating expectations!

They've had nice runs so a pullback/retrace and taking a break isn't unexpected.

The earnings haven’t been out of the park for them to continue on the run they’ve been on. Still like them all longer term but they’ve gone too far too fast imo.

Like i mentioned for META, if it held the 200DMA at the 150 area which it just broke through that’s still a good thing even though it’s 30 bucks lower.

 

[T2Kplus20]

They've had nice runs so a pullback/retrace and taking a break isn't unexpected.

The earnings haven’t been out of the park for them to continue on the run they’ve been on. Still like them all longer term but they’ve gone too far too fast imo.

Like i mentioned for META, if it held the 200DMA at the 150 area which it just broke through that’s still a good thing even though it’s 30 bucks lower.

Can't go up in a straight line forever (even I don't expect that). The earnings were solid with the headwinds considered. I definitely like how AMZN and AAPL are set-up for 2023. GOOGL a little less so. META will be interesting to watch. Seems like they found the cost-cutting Jesus and have adults in the room to be more responsible. Very good sign for the future. That company has amazing cash flow and customer base.

 

[T2Kplus20]

FYI - Capital One is doing a special 11-mo CD at 5%. Rate offer expires in mid-March:

Special CD Rate on 11-month CDs | Capital One

Take advantage of this promotional rate and open an 11-month CD account today - no promo code required. Enjoy zero market risk and guaranteed returns.

www.capitalone.com

 

[T2Kplus20]

Plan accordingly:

Fed Raises Rates and Says It Isn’t Done Yet. We Think It Is.

Even as the Fed says it expects “ongoing” rate hikes, we expect the next move will be to cut rates by year-end.

www.morningstar.com

 

[ashokan]

If FDIC insurance is important and there's worry over the stability of the institution then 500K isn't enough actually. You're just covering the principal but none of the return above that principal.

I also learned that if a bank gets buggered-up its obligated by law to sort their derivatives first - depositors come after them. People can be waiting a long time for money they gave the bank (and I mean gave). Chase has 65 trillion tied-up

Cornell MBA/Duke PhD explains:

 

[rutgersguy1]

+1
We use 2 banks for our cash accounts. And yes, these are joint accounts because we trust each other. LOL!

Well it would actually be the single accounts that relate more to trust. You'd both have access and oversight on a joint account. Technically, the single accounts can be out of the other spouse's purview so that's where the trust comes in lol.

 

[Morrischiano]

Blowout jobs report.

So much for the dummies forecasting rate cuts in 2023.

 

[T2Kplus20]

Blowout jobs report.

So much for the dummies forecasting rate cuts in 2023.

Rate cuts are dependent on the upcoming inflation reports. This is bullish for the market. Inflation is over and the economy is still hanging in there. Win-win!

FYI - wages continue to moderate, which is what the Fed is really looking at.

Plan accordingly.

 

[Morrischiano]

Don't fight the market. You may miss out on the rebound rally. Be careful. Inflation is crashing and the Fed is getting dovish.

Remember.....stocks bottom on average 9-10 months BEFORE earnings bottom. Why? The market is forward looking and about expectations.

I’ll take a 15% gain.

Moreover, we’ve already had a rebound rally of ~50% off Oct lows.

Here’s a phrase that I heard in the 1990’s growing up on a trading desk: Bulls make money, bears make money, pigs get slaughtered.

 

[T2Kplus20]

I’ll take a 15% gain.

Moreover, we’ve already had a rebound rally of ~50% off Oct lows.

Here’s a phrase that I heard in the 1990’s growing up on a trading desk: Bulls make money, bears make money, pigs get slaughtered.

Another phase.....don't fight reality. Inflation is over. We all see the data and know the truth.

 

[RUTGERS95]

I’ll take a 15% gain.

Moreover, we’ve already had a rebound rally of ~50% off Oct lows.

Here’s a phrase that I heard in the 1990’s growing up on a trading desk: Bulls make money, bears make money, pigs get slaughtered.

amen to that and it's why Bond Traders always win. Measure the loss, not the gain and proceed accordingly

 

[T2Kplus20]

U.S. job growth accelerates in January, wage gains moderate

WASHINGTON (Reuters) - U.S. job growth accelerated sharply in January amid a persistently resilient labor market, but a further moderation in wage gains should give the Federal Reserve some comfort in its fight against inflation.

The Labor Department's closely watched employment report's survey of establishments on Friday showed that nonfarm payrolls surged 517,000 jobs last month. Data for December was revised higher to show 260,000 jobs added instead of the previously reported 223,000.

Average hourly earnings rose 0.3% after gaining 0.4% in December. That lowered the year-on-year increase in wages to 4.4% from 4.8% in December. Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs and wages advancing 4.3% year-on-year. Payrolls forecasts ranged from an increase of 125,000 to 305,000.

With January's report, the Labor Department's Bureau of Labor Statistics (BLS) published its annual payrolls "benchmark" revision and updated the formulas it uses to smooth the data for regular seasonal fluctuations in the establishment survey.

The BLS revised their industry classification system, which resulted in about 10% of employment reclassified into different industries. It also incorporated new population estimates in the household survey, from which the unemployment rate is derived.

As such January's unemployment rate of 3.4% is not comparable to December's 3.5% rate.

The employment report should allow the U.S. central bank, focused on wage inflation, to maintain a moderate pace of rate hikes and reduce the risk of a recession this year.

Fed Chair Jerome Powell told reporters on Wednesday that "the economy can return to 2% inflation without a really significant downturn or a really big increase in unemployment." With wages moderating and inflation trending lower, economists are increasingly agreeing with that sentiment.

 

[Morrischiano]

Rate cuts are dependent on the upcoming inflation reports. This is bullish for the market. Inflation is over and the economy is still hanging in there. Win-win!

Plan accordingly.

There is lingering school of thought that inflation is transient. I don’t agree. I think that there are bad corporate actors who raised prices not because of increased input costs but because they could get away with it. That will continue for some time and 5% inflation will persist for the next two years. If the Fed targets 2%, you won’t see rate cuts unless we get negative GDP in the next year or two.

 

[RUTGERS95]

you don't want strong jobs reports as it further distorts the curve, runs energy costs up, makes inflation more sticky and impacts the physche of the markets.

tech earnings are mixed

we need weak jobs reports although, employment is lagging here

I also don't believe the jobs reports when looking at it as the numbers really don't make sense. We know the BLS already did some quiet revisions to last quarters data

 

[T2Kplus20]

There is lingering school of thought that inflation is transient. I don’t agree. I think that there are bad corporate actors who raised prices not because of increased input costs but because they could get away with it. That will continue for some time and 5% inflation will persist for the next two years.

I agree with that school of thought.

Inflation was 100% caused by COVID, lockdowns, government overspending in response, and then Putin as the cherry on top. All discrete and artificial events. That's it. Items 1-3 are done and Putin is surprising in a box. Guess what? The Fed was kind of right that this inflation is transitory. However, it did not expect COVID is last so long due to new varients.....Delta and then Omicron. Also, Putin went Putin are the exact worst moment.

We are heading right back to 2% inflation and likely lower (which may become a different problem). Even the awful lagging CPI YoY math is heading straight to that result.

Inflation at 5% for 2 years? QoQ inflation has already been NEGATIVE. LOL!

 

[BIGRUBIGDBIGredmachine]

Actual Jan '23 jobs lost more than 2.5MM (vs -2.4MM in Jan '22), question is whether the seasonal adjustments are distorted.

 

[Morrischiano]

I agree with that school of thought.

Inflation was 100% caused by COVID, lockdowns, government overspending in response, and then Putin as the cherry on top. All discrete and artificial events. That's it. Items 1-3 are done and Putin is surprising in a box. Guess what? The Fed was kind of right that this inflation is transitory. However, it did not expect COVID is last so long due to new varients.....Delta and then Omicron. Also, Putin went Putin are the exact worst moment.

We are heading right back to 2% inflation and likely lower (which may become a different problem). Even the awful lagging CPI YoY math is heading straight to that result.

Inflation at 5% for 2 years? QoQ inflation has already been NEGATIVE. LOL!

Ummm. Inflation is not measured QoQ.

Moreover, a lot of the reductions of rate of inflation increase is due to decreased energy costs, which may rebound due to China full reopening.

 

[RUTGERS95]

I agree with that school of thought.

Inflation was 100% caused by COVID, lockdowns, government overspending in response, and then Putin as the cherry on top. All discrete and artificial events. That's it. Items 1-3 are done and Putin is surprising in a box. Guess what? The Fed was kind of right that this inflation is transitory. However, it did not expect COVID is last so long due to new varients.....Delta and then Omicron. Also, Putin went Putin are the exact worst moment.

We are heading right back to 2% inflation and likely lower (which may become a different problem). Even the awful lagging CPI YoY math is heading straight to that result.

Inflation at 5% for 2 years? QoQ inflation has already been NEGATIVE. LOL!

Putin had nothing to do with it, this is 100% on our gov't

 

[RUTGERS95]

Actual Jan '23 jobs lost more than 2.5MM (vs -2.4MM in Jan '22), question is whether the seasonal adjustments are distorted.

they are, the jobs report is not accurate by any stretch. just got off a call with some interesting look throughs

 

[rutgersguy1]

There is lingering school of thought that inflation is transient. I don’t agree. I think that there are bad corporate actors who raised prices not because of increased input costs but because they could get away with it. That will continue for some time and 5% inflation will persist for the next two years. If the Fed targets 2%, you won’t see rate cuts unless we get negative GDP in the next year or two.

I've thought that myself when I see some of these big consumer staples companies with record profits and hitting ATHs. It didn't seem like inflation was hurting them the slightest bit and that they were pushing prices way beyond input cost increases. It's one of my favorite sectors though so my attitude with these kind of things is if you can't beat them join them, complaining doesn't help.

I did think it would be a pretty good opportunity for private label and generic brands to take share from these big staples companies. You can make a healthy profit without the crazy elevated pricing and consumers would definitely be open to it in this environment.

My mind was thinking it was along the lines of the auto industry where they got rid of discounts, rebates etc...They may have sold less cars but they were getting bigger margins on what they did sell so they still did quite well. I'd like to think rising rates would affect that business model but we'll see. I think people only look at monthly payments as opposed to the cost of the car so with low rates that can be manageable but with rates higher maybe not. Job market still seems okay for now though.

 

[T2Kplus20]

Ummm. Inflation is not measured QoQ.

Moreover, a lot of the reductions of rate of inflation increase is due to decreased energy costs, which may rebound due to China full reopening.

Follow the math. QoQ leads to HoH which leads to YoY. The math for CPI is baked for the next 6 months due to its lagging metrics (worse of which is housing/shelter). If you know the math, you can easily see where the reports are heading for the next 6 months or so.

This is reality. This is why the market has been rallying. We all see the data and know what's happening.

China opening is a massive positive for lower inflation due to improved supply chains. China closing was a catalyze for inflation going on. It's nonsensical to think that China opening is bad in any way.

 

[T2Kplus20]

they are, the jobs report is not accurate by any stretch. just got off a call with some interesting look throughs

Please do tell. :)

 

[Morrischiano]

Follow the math. QoQ leads to HoH which leads to YoY. The math for CPI is baked for the next 6 months due to its lagging metrics (worse of which is housing/shelter). If you know the math, you can easily see where the reports are heading for the next 6 months or so.

This is reality. This is why the market has been rallying. We all see the data and know what's happening.

China opening is a massive positive for lower inflation due to improved supply chains. China closing was a catalyze for inflation going on. It's nonsensical to think that China opening is bad in any way.

I don’t think that you understand the math ( kind of shocking that you don’t understand). You said that QoQ is negative. It’s not. The rate of increase is slowing. It doesn’t necessarily mean prices have decreased.

Jesus Christ…..

 

[T2Kplus20]

I don’t think that you understand the math ( kind of shocking that you don’t understand). You said that QoQ is negative. It’s not. The rate of increase is slowing. It doesn’t necessarily mean prices have decreased.

Jesus Christ…..

QoQ is well into negative territory (prices decreasing) when you use real-time shelter data (not the CPI garbage that even Powell called out on Wednesday). Actually, we have been in a negative inflation environment for 4-5 months now.

Facts are facts. Powell knows this and why he was so relaxed and dovish.

 

[T2Kplus20]

QoQ is well into negative territory (prices decreasing) when you use real-time shelter data (not the CPI garbage that even Powell called out on Wednesday). Actually, we have been in a negative inflation environment for 4-5 months now.

Facts are facts. Powell knows this and why he was so relaxed and dovish.

Update: Just looked at the CPI data to refresh my memory. We have actually been in a negative inflation environment for the last 6 months.

Even better than I thought!

 

[rutgersguy1]

U.S. credit card debt jumps 18.5% and hits a record $930.6 billion

Inflation and higher interest rates boosted credit card debt to a record $930.6 billion at the end of 2022, a 18.5% jump from a year earlier, TransUnion found.

www.cnbc.com

 

[Joey Bags]

Surprised how much bearish recessionary sentiment there is. I really don’t know what the catalyst would be at this point barring a black swan event that would send us back to a recession.

Just got off our senior leadership team meeting where we are freezing payroll due to the “anticipated recessionary environment in the second half of 23”. Apparently the decision came from our global risk management office.

And for what it’s worth our firm thrives in a higher interest rate regimen.

 

[rutgersguy1]

Surprised how much bearish recessionary sentiment there is. I really don’t know what the catalyst would be at this point barring a black swan event that would send us back to a recession.

Just got off our senior leadership team meeting where we are freezing payroll due to the “anticipated recessionary environment in the second half of 23”. Apparently the decision came from our global risk management office.

And for what it’s worth our firm thrives in a higher interest rate regimen.

Part of me always wonders about self fulfilling prophecy.

 

[Rutgers Chris]

Surprised how much bearish recessionary sentiment there is. I really don’t know what the catalyst would be at this point barring a black swan event that would send us back to a recession.

Just got off our senior leadership team meeting where we are freezing payroll due to the “anticipated recessionary environment in the second half of 23”. Apparently the decision came from our global risk management office.

And for what it’s worth our firm thrives in a higher interest rate regimen.

Similar dynamic with my company. It seems like pay freezes are being done because we can (given the labor market) versus actually needing to financially.

 

[RU-Hunter]

Part of me always wonders about self fulfilling prophecy.

Much of the sentiment is coming from the inverted yield curve which has accurately predicted the last nine recessions. The question, is how deep will the recession be and for how long. Is it guaranteed? No, but it has been a good bellwether.

As for the markets, they seem to have shook off the strong jobs report this morning with all indices up. The market is predicting two more rate increases of 25 BPS and then hit a pause.

 

[T2Kplus20]

Part of me always wonders about self fulfilling prophecy.

Big +1.
Many people are just trying to will it to happen now. However, as of now, the job market and consumer are giving these people the middle finger. Doubt it will happen.

 

[Morrischiano]

Surprised how much bearish recessionary sentiment there is. I really don’t know what the catalyst would be at this point barring a black swan event that would send us back to a recession.

Just got off our senior leadership team meeting where we are freezing payroll due to the “anticipated recessionary environment in the second half of 23”. Apparently the decision came from our global risk management office.

And for what it’s worth our firm thrives in a higher interest rate regimen.

It’s the march of the penguins when it comes to headcount. Since other firms are cutting or not hiring, your firm doesn’t feel like it needs to either.

 

[T2Kplus20]

Much of the sentiment is coming from the inverted yield curve which has accurately predicted the last nine recessions. The question, is how deep will the recession be and for how long. Is it guaranteed? No, but it has been a good bellwether.

As for the markets, they seem to have shook off the strong jobs report this morning with all indices up. The market is predicting two more rate increases of 25 BPS and then hit a pause.

Everyone keeps saying we will get a recession due to inflation, but we already had a recession in Q1 and Q2 of 2022. Yes, it know the political organization didn't declare it as a recession. However, we had 2 Qs of negative growth during the height of this round of inflation.

The inverted yield curve was just late to the party because the Fed was late to take action.

 

[Morrischiano]

Much of the sentiment is coming from the inverted yield curve which has accurately predicted the last nine recessions. The question, is how deep will the recession be and for how long. Is it guaranteed? No, but it has been a good bellwether.

As for the markets, they seem to have shook off the strong jobs report this morning with all indices up. The market is predicting two more rate increases of 25 BPS and then hit a pause.

I think the markets are looking at the soft-landing scenario as more possible.