Investing / Holding / Selling / Rebalancing

[Left Field]

A bold statement when you look at all the stress in the system from multi decade high inflation, bond rates and the geopolitical outlook.
Is everything really okay or is this another sucker's bear market rally ?  Where are bond rates going when quantitative tightening starts in earnest?  Hmmm...I am happy to remain quite defensive and protect my nest egg, it's been a great strategy so far in 2022.

USA Unemployment figures the lowest they have been since 1969.

More employment in the last two years than under any previous US administration.

"The Chief Economist of ADP, Nela Richardson, told CNN the 517,000 jobs created in January was "a stunning number" and that "there was nothing in the last three months of US jobs gains that would have prepared you or me for a number that was above half a million jobs created in a single month."

The U.S. jobs report far exceeded expectations while the unemployment rate fell to a historic low of 3.4%.

Speaking to Zain Asher, Nela Richardson went on to say that to "see a year's worth of interest rate hikes, many of them which are quite aggressive translate into a number that is this strong, spells a question for the Fed." She said the Federal Reserve has its work cut out for it to understand what's going on in the jobs market." (source CNN)

[KW]

USA Unemployment figures the lowest they have been since 1969.

More employment in the last two years than under any previous US administration.

"The Chief Economist of ADP, Nela Richardson, told CNN the 517,000 jobs created in January was "a stunning number" and that "there was nothing in the last three months of US jobs gains that would have prepared you or me for a number that was above half a million jobs created in a single month."

The U.S. jobs report far exceeded expectations while the unemployment rate fell to a historic low of 3.4%.

Speaking to Zain Asher, Nela Richardson went on to say that to "see a year's worth of interest rate hikes, many of them which are quite aggressive translate into a number that is this strong, spells a question for the Fed." She said the Federal Reserve has its work cut out for it to understand what's going on in the jobs market." (source CNN)

Unemployment is low because workforce participation hasnt recovered to pre-Covid levels.  There are a lot of people still hiding in their basements apparently lol
The jobs reported as "new" are the ones lost during the Covid years, and this is the first month that total numbers of workers have exceeded the number employed back in 2019 pre-pandemic.  If you look at the employment trend over time, and where workforce numbers SHOULD be if Covid hadn't happened, the current numbers are way below trend
https://wolfstreet.com/2023/02/03/in-information-sector-unemployment-rate-spikes-jobs-fall-for-2nd-month-rest-of-labor-market-is-rocking-rolling/

A lot of those jobs probably have something to do with China reopening - US companies can finally rehire all their China buyers, sales agents, manufacturing supervisors, Chinese tour guides and bus drivers, and Chinese real estate agents :-)

[Left Field]

Appreciate your comments KW

Full employment (ie record unemployment)  a sign of a strong US economy..... but also an inflationary warning as higher wages may be needed to chase increasingly scarce labour.

More contradictions in the tech sectors with huge lay-offs.... but are these people being scooped up or is it too early to say?

Lots of contradictions IMO so I'm not reading too much in it.

[KW]

Appreciate your comments KW

Full employment (ie record unemployment)  a sign of a strong US economy..... but also an inflationary warning as higher wages may be needed to chase increasingly scarce labour.

More contradictions in the tech sectors with huge lay-offs.... but are these people being scooped up or is it too early to say?

Lots of contradictions IMO so I'm not reading too much in it.

There is so much bulldust in official numbers these days that its hard to know what is the truth.  Take NZ - record unemployment right?  Except that there has been a 28% increase in the number of people on JobSeeker since Labour took over.  Plus all the sole parents that got moved from JobSeeker to the Sole Parents Benefit when Jacinda decided that parents no longer needed to look for work any more.  So do we really have low unemployment when the numbers of unemployed and non-working people have gone up almost 30%?  

Heads up too on US CPI - they have just changed the definition of it, presumably so that it reads lower.  Inflation if still measured by 1980's definition of CPI is currently running at 14% in the US.  Its all numberwang these days.  

[Left Field]

No problems KW, Janet Yellen say's all is fine....

https://www.reuters.com/markets/us/yellen-you-dont-have-recession-when-us-unemployment-53-year-low-2023-02-06/

WASHINGTON, Feb 6 (Reuters) - U.S. Treasury Secretary Janet Yellen on Monday said she saw a path for avoiding a U.S. recession, with inflation coming down significantly and the economy remaining strong, given the strength of the U.S. labor market.

"You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years," Yellen told ABC's Good Morning America program.

"What I see is a path in which inflation is declining significantly and the economy is remaining strong."

[Left Field]

Ophir Funds Jan 2023 newsletter pretty bullish too

https://www.ophiram.com.au/letter-to-investors-january-4/

"S&P 500 broke through 200 MA day average......this along with other market technical indicators suggests there may be further upside to (US) markets in the near term"

[Raven]

Ophir Funds Jan 2023 newsletter pretty bullish too

https://www.ophiram.com.au/letter-to-investors-january-4/

"S&P 500 broke through 200 MA day average......this along with other market technical indicators suggests there may be further upside to (US) markets in the near term"

I really like that "dash for trash" term they use

[Left Field]

Quite a few key results out next week..... hopefully they will give us some indications for FY24.

Another key event is the USA debt ceiling impasse.

If the Republicans stick to their disruptive plans, the US markets could be in for a tough time which will overlap into NZ.

[Ricky Bobby]

Iv had a bit of a lift in the last week. Going to be interesting to see if it continues... still have a little cash sitting and ready to go.

[Left Field]

Sound thinking to increase cash holdings pending next weeks NZX results and USA's debt negotiations ahead of their 1 June deadline.

Encouraging news ex Guardian - "The Republican House speaker Kevin McCarthy, told reporters at the Capitol that he sees "the path" towards a deal with Democrats to raise the debt ceiling."

Mid June should give us a clearer picture.....

[Left Field]

"News that the talks were paused sent financial markets lower on Friday, a sign of investor unease that a protracted standoff could roil the economy. The Dow Jones Industrial Average suddenly dropped 300 points from its high for the day before recovering slightly."

https://www.washingtonpost.com/politics/2023/05/19/debt-ceiling-talks-pause/

[Left Field]

News of tentative agreement on US debt-ceiling lessens recession risks and could boost stocks..... or not!

https://www.washingtonpost.com/business/2023/05/27/debt-ceiling-talks/

[Shareguy]

 Craig's BAKERS DOZEN – it's that time of the month again where we have recalibrated our Bakers Dozen performance – the good news is we continue to generate alpha with our 13 stock ideas first outlined in this note on 8th Dec-22 now +9% relative to the NZX50 Gross Index +3.2% over the same period. Part of the out-performance reflects our decision to take a more active rather than "set and forget" approach to opportunities we see in the market – see our summary of various switches below.
Our portfolio constituents which currently includes XRO, IFT, THL, GNE, FSF, GTK, MEL, RYM, SKT, SPK, CNU, CEN, SKC.
The top three overall performers while in the portfolio are XRO (+17.5%), IFT (+14.2%) and THL (+12.0%).
The bottom three overall performers while in the portfolio: SKC (-13.9%), CEN (-0.5%) and CNU (+1.9%).

[kiwi2007]

https://www.wsj.com/articles/bearish-bets-against-s-p-500-are-surging-despite-love-for-big-tech-506cacc?mod=hp_lead_pos2

Wall Street hasn't been this bearish on the stock market in more than a decade. Tech shares are a different story.

Hedge funds and other speculative investors have built up a big bet that the S&P 500 will decline, marking their most bearish positioning since 2007. At the same time, they are preparing for a rally in the technology-focused Nasdaq-100, with net bullish wagers in recent weeks approaching the highest levels since late last year.

That is according to data from the Commodity Futures Trading Commission compiled by Bespoke Investment Group, when measured as a percentage of open futures-market interest.

The divergence in positioning reflects the fragility of the 2023 stock rally, strategists say. The S&P 500 is up 12% this year, but it would be negative without the contribution of seven big tech companies, according to S&P Dow Jones Indices data through the end of May. That potentially leaves the index vulnerable to a steep pullback if even one or two big companies misstep...........................etc.

[kiwi2007]

And the Naz

https://www.wsj.com/articles/ai-stocks-are-flying-but-dont-call-the-craze-a-bubble-18403c5a?mod=article_inline

The rapid rise of generative artificial intelligence has created a frenzy on Wall Street, but investors and strategists say the rush to profit from the new technology isn't necessarily a bubble.

Investors are piling into shares of big technology companies—such as Nvidia NVDA , which soared 24% Thursday—that are perceived to be leading in the nascent field. They are pumping cash into private startups working on generative AI, or systems that can conjure humanlike conversation and imagery and generate computer code.

The AI app ChatGPT reached 100 million downloads in just two months, much faster than other popular apps such as TikTok and Uber. The rapid growth of the technology has caught the attention of lawmakers in Washington, who have begun a bipartisan push toward establishing new regulations....................etc...