Mid Term
March 25, 2023 | Daily JAM, Mid Term, Morning Briefing |
Goldilocks is just about the only thing keeping the current stock market afloat in the face of a storm of worry from a banking crisis, to stubbornly high inflation, and signs of a cooling economy. The Goldilocks story says, Don’t worry about all that. The Federal Reserve is about to pivot on interest rates. At its May 3 meeting, the Federal Reserve Open Market Committee might raise interest rates by 25 basis points but that will be the last interest rate increase. And then the Fed will move to start cutting interest rates in the second half of the year with financial markets pricing in as much as 200 basis points of cuts by the end of 2024. And all this will happen, too, without a recession, as the Fed engineers a successful soft landing of the economy and a significant slowdown in inflation.
If you believe that, you should be buying stocks. I don’t believe it. And more importantly, the bond market doesn’t believe it.
March 22, 2023 | Daily JAM, Mid Term |
Want to know why stock prices have been so resilient in the face of a global banking crisis and the prospect of higher interest rates from the Federal Reserve? FOMA. Fear of missing out. Especially among some of the world’s largest money managers. Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures, and the threat of recession to one of the greatest fears of all money managers—-missing out on the next big rally, Bloomberg reports.
March 20, 2023 | Daily JAM, Mid Term |
Bank shares around the world have lost $460 billion so far in March (as of the close on March 17.) That’s a lot of money. Even these days when a coffee can run you $5.60. That’s the worst loss for the sector since the March 2020 Covid plunge.
March 20, 2023 | AAPL, Daily JAM, Mid Term, Morning Briefing, MSFT |
Ok, so Dan Ives is talking his book (or sector at least) but he still raises an interesting point. (Dan Ives is a Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities since 2018.) With bank stocks in particular and the financial sector in general in turmoil, will investors looking for steady earnings turn to tech stocks? (Well maybe not all tech stocks but how about Apple (AAPL) and Microsoft (MSFT)?
March 18, 2023 | Daily JAM, Mid Term |
The Federal Reserve will meet on Wednesday, March 22 to set interest rates. There are three things to watch from that meeting. First, whether the Fed will raise interest rates or not and by 25 basis points, 50 basis points, or not at all. Second, we will get the first update of the Dot Plot since the December 14 meeting that projects what Fed officials think interest rates, inflation, unemployment, and GDP growth will be at the end of 2023 and 2024. Third, the financial market reaction to the news out of the meeting will tell us if the Fed (as I’d argue) has lost control of the interest rate narrative and that the bond market is now calling the direction and pace of changes in interest rates.
March 16, 2023 | Daily JAM, Mid Term |
Here’s Step #2: 3 essentials to cash management now. I’ve added it to the main Special Report so you’ll find both Step #1 and Step #2 there. And I’m posting Step #2 separately so that you will be sure not to miss it. (I’ve also added links to the two earlier Sell posts with 24 stocks to sell.)
March 14, 2023 | Daily JAM, Mid Term |
Yesterday, March 14, Moody’s Investors Service placed First Republic Bank (FRC) and five other US lenders on review for downgrade because of worries over uninsured deposit funding and unrealized losses in their asset portfolios. (the other banks include Western Alliance Bancorp (WAL), Intrust Financial, UMB Financial (UMBF)., Zions Bancorp (ZION), and Comerica (CMA).) But these smaller banks aren’t the companies in the sector sitting on the biggest bond portfolios with unrealized losses.
March 14, 2023 | Daily JAM, Mid Term |
One of the lessons of the subprime mortgage crisis is that it’s hard to predict exactly how problems will ripple out from bad bets on one asset class to a crisis in a seemingly unrelated part of the financial market. That’s one reason that the current set of bank collapses–Silvergate Capital, Silicon Valley Bank, and New York’s Signature Bank–is so unsettling. We know–we think–how these institutions got into trouble. But we don’t know what other banks or sectors of the financial markets might be dragged into the problem.
March 7, 2023 | Daily JAM, Mid Term |
According to Fannie Mae’s latest survey of consumer sentiment, less than one-third expect their personal financial situation to get better over the next year. That’s the lowest positive percentage in a series that goes back more than a decade. This isn’t good news for anyone worried about a recession in 2023 or 2024.
March 2, 2023 | Daily JAM, Mid Term, Morning Briefing, TSLA |
Yesterday’s investors day could have been a huge positive that sent Tesla (TSLA) shares soaring today. Instead, because the company and its CEO Elon Musk once again over-promised and underdelivered, investors went away disappointed and today, March 2, the stock was down 5.85% at the close.
February 28, 2023 | Daily JAM, Mid Term, Morning Briefing |
The debt crisis at China’s local governments will be top of the agenda when China’s leaders gather in Beijing for the annual parliament next week.m (The nation’s legislators and top leaders meet from this Sunday to approve key economic targets for 2023, including a new local bond quota, the budget, and also monetary policy.) A majority of regional governments — at least 17 out of 31 — are facing a serious funding squeeze, with outstanding borrowing exceeding 120% of income in 2022
April 20, 2022 | Daily JAM, Mid Term, Videos, You Might Have Missed |
My one-hundredth-and-twenty-third YouTube video “Netflix, Inflation, and Demand Destruction” went up today. Today I’m covering Netflix’s (NFLX) crash after releasing its subscriber numbers showing the loss of 200K subscribers for the quarter and predicting a loss of ten times that many for next quarter. I think we are starting to see signs of demand destruction due to ongoing inflation. That demand destruction will only get more severe as the Fed continues to raise rates.
