March 10, 2025
What You Need to Know Today:
Consumer confidence falls in December
The Conference Board’s gauge of costumer confidence decreased to 104.7, data released Monday showed. It was the first drop in the survey in three months. The reading of 104.7 was well below the median estimate in a Bloomberg survey of economists. More troubling to me, the survey’s measure of expectations hit a five-month low.
Saturday Night Quarterbacks says (on Labor Day), For the week ahead expect…
the next big jobs report, the Employment Situation from the Bureau of Labor Statistics for August will hit the wires before the stock market opens on Friday, September 6.
Has the 100% certainty among investors and traders that the Federal Reserve will cut interest rates at its September 18 meeting drained all of the drama out of the August jobs report?
The last inflation report before the Fed meets leaves a September rate cut locked in
Today August 30 the Personal Consumption Expenditures index, the Federal Reserve’s preferred measure of inflation, showed core prices rose by just 0.2% in June. On a three-month annualized basis, core inflation, which doesn’t include volatile food and energy prices, climbed at a 1.7% rate, the Bureau of Economic Analysis reported. That’s the slowest rate of increase this year.
Buying more Nvidia on the best dip I think we’ll get
I was hoping that Nvidia (NVDA) would take a bigger dip on its “disappointing” earnings news last week. But a 7% or so drop looks like the best we’ll get. And I certainly want to own these shares before the revenue from the new Blackwell chips kicks in during 2025. I already own these shares in my long-term 50 Stocks Portfolio. Today I’m adding them to my 12-18 month Jubak Picks Portfolio. The bad news out of Nvidia last week in its August 28 earnings report?
Looking backward: In Q2 the economy did better than we thought
The U.S. economy grew at a stronger pace in the second quarter than initially reported. Gross domestic product, GDP, rose at a 3% annualized rate during the April-June quarter, up from the previous estimate of 2.8%, the Bureau of Economic Analysis reported Thursday, August 29.
The big thing to watch for in today’s Nvidia after-the-close earnings report: Blackwell delays
A report Saturday said one of Nvidia’s next generation chips will be delayed by a just-discovered design flaw. Tech news site The Information, citing a couple of industry sources, said volume shipments of the Blackwell B200 chip would be delayed some three months.
Special Report: Your 10 Best Moves for the Rest of 2023, Part 2–10 of 10 Moves (revised on 10/22)
So what do you do with your portfolio for the rest of 2023? And what’s your best strategy to be prepared for 2024? In Part 1 of this Special Report I laid out the 10 developments that I thought would drive the financial markets for the rest of 223 and into 2024. Today, in Part 2, I’m going to give you the first 2 of 10 moves to take–with as much detail and as many specifics as possible–that you should be making now to position your portfolio for the uncertainties of the last quarter of 2023.
Live Market Report (20 minute delay)
From California confirmation that nuclear power–and uranium producer Cameco–has more life thanks to global warming
When I added Cameco (CCJ), the big Canadian uranium producer, to my Jubak Picks Portfolio on February 22, 2023, I argued that plans by China and India to burn more coal, despite a potentially catastrophic increase in global temperatures, meant that the world would have to put plans to phase out nuclear power on hold. And that a world desperate to avoid the worst climate outcomes would lead to a revived nuclear power industry–and higher uranium sales for Cameco. Now California has provided a roadmap for exactly how and why this will happen.
Treasury market passes 4% milestone for a day; what’s next?
Yesterday, March 2, yields on all Treasury maturities closed above 4%. Today, that 4% level hasn’t held across all maturities with the 10-year Treasury yield dropping back to 3.96%, down 9 basis points, as of 3:00 p.m. But I think yesterday’s surge to a 4% yield for all maturities marks a milestone in this market–and the upward march of interest rates as the Federal Reserve shows signs of raising rates higher and longer.
Russia’s budget deficit to rise to 3.5% of GDP in 2023, above the official forecast
The European rating company Scope, roughly the equivalent of Moody’s or Fitch Ratings in the United States, has warned that Russia’s budget deficit may rise to 3.5% of GDP in 2023. That’s significantly above the government’s forecast of a deficit of 2% for 2023. In gross 2022, the official shortfall came in at 2.3%.
Please Watch My New YouTube Video: Quick Pick Li-cycle Holdings
Today’s Quick Pick is Li-Cycle Holdings (NYSE: LICY). Li-Cycle is in the start-up stage of building a hub and spoke system to recycle lithium batteries. As more electric vehicles enter the market, companies that can recycle the lithium from their batteries has drawn a lot of investment dollars, both because fulfilling the green potential of electric vehicles requires closing the battery loop and because recycling provides a supply increasingly expensive of battery materials such as lithium, cobalt, and nickel. And there are new incentives in the field because the Inflation Reduction Act included money for loans/funding for recycling companies. Most of the new entrants are private. One of the few publicly traded battery recycling companies is Li-Cycle. Li-Cycle started as a SPAC, a formerly popular way to take a company, but now the market is largely shunning SPAC companies out of fear that they will run out of capital before they hit breakeven. However, Li-Cycle just announced it had received conditional approval for a $375 million loan from the Department of Energy, allowing it, by my calculations, to finish their Rochester hub. The hub recovers marketable lithium, cobalt, and nickel from the black mass that the company collects from batteries. Once the hub is completed, it will go from a cash drain on the balance sheet to a generator of cash. This is a risky stock. The shares are down 57% since I added them to my Milliennial Portfolio on November 15, 2021 but they are up 21% for 2023 to date as of March 2. This one is for the strong of stomach willing to take a risk and hold on to it through dips as the company starts to generate revenue and earnings.
U.S. home prices fell year-over-year in February for the first time since 2012
In the four weeks through February 26, the median price for a typical home was $350,246, down 0.6% from the same period a year earlier, according to Redfin. That’s the first year-over-year drop since 2012.
Tesla once again shows that it’s really, really bad at managing expectations and stock tumbles
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.
2 Fed interest rate hawks speak, stocks stutter
It’s not like we don’t know that these two Federal Reserve presidents favor higher interest rates for longer. But still hearing them say it did put a crinkle in stock prices today.
Please Watch My New YouTube Video: Will China Send the Global Economy Surging?
Today’s topic is Will China Send the Global Economy Surging? We’ll really know the answer to this starting on Sunday, when the National People’s Congress of China meets. The leaders of China will make some important decisions for the Congress to rubber-stamp. China is looking for a 5% or higher GDP growth this year after last year’s 3%, but in order to get there, they’ll have to stimulate the economy. Local governments are drowning in debt that they can’t pay, and the government’s usual stimulus plan of requiring local governments to borrow and then spend it on “infrastructure “, isn’t likely to work. There’s also added pressure to cut interest rates to stimulate the economy and the rising tide (albeit a very low tide) of disgruntlement of the government and Xi Jinping’s leadership throughout the Covid lockdowns and the subsequent deadly spread of Covid-19. All this while the population is aging dramatically (with little to no retirement infrastructure), following the one-child policy, which reduced the younger population drastically. To take advantage of the expected and necessary economic stimulus, I recommend the iShares China Large-Cap ETF (NYSEARCA: FX) which captures a lot of the state-owned and larger corporate companies that would likely benefit from a stimulus from China. You’ll find it in my Perfect 5 ETF Portfolio.
China stocks up on better than expected manufacturing news, anticipation of People’s Congress–adding China to ETF portfolio today
China’s manufacturing activity recorded its highest monthly improvement in more than a decade in February, while services also showed stronger-than-expected performance. Home sales rose for the first time in 20 months. Which has helped push Chinese stocks higher–along with the belief that the annual People’s Congress meeting that begins on Sunday will produce new stimulus measures from the central government.
U.S. manufacturing sector continues slump in February
The seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index was revised lower to 47.3 in February. That’s up from a 46.9 reading in January. But it’s still below the 50-level that separates expansion from contraction in this index.
Oil turns in eighth monthly drop in last nine months in February–but better times may be ahead
Oil prices fell again in February with crude dropping another $2 a barrel on the month. Crude prices really didn’t show much of a trend in February as worries over an economic slowdown caused by higher interest rates battled signs of tighter supply. The reading range for the month was the smallest since July 2021. Signs of increased demand from China and the continued bite of sanctions against Russia point to gains for oil in coming months.
Luminar makes good progress toward positive gross margins
Shares of Luminar Technologies (LAZR) closed up 6.23% Monday, February 27, added a another 0.91% during today’s regular session, and then fell 2.01% in after hours trading on the company’s announcement of substantial progress toward cash flow positive by the fourth quarter of 2023.
Does China’s debt crisis make a rate cut from the People’s Bank more likely?
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
Investors really don’t want Pioneer Natural Resources to acquire another producer
On Friday, shares of Pioneer Natural Resources (PXD) fell on a Bloomberg story reporting rumored talks between the Permian Basin oil shale producer and Appalachian natural gas producer Range Resources (RRC). On Monday shares of Pioneer rebounded as the company denied that it was in acquisition talks. The lesson? Investors really don’t want Pioneer to spend money on acquiring more assets.
Watch My YouTube Video: Trend of the Week How Tired Is the Consumer?
This week’s Trend of the Week is How Tired Is the Consumer? Consumer spending makes up 70% of the economy, so if consumers get tired and start spending less, the economy as a whole will slow down. The current consumer data doesn’t look good. Credit card debt is at an all-time high and delinquency rates are up to 4%. On February 21, Walmart (NYSE: WMT) came out worried about the full year, noting that consumers were purchasing less-expensive goods, and lowered its guidance for 2023 below Wall Street expectations. However, the lowered guidance didn’t affect the stock price. Why? As consumers are looking more tired, investors will look for stocks like Walmart and Costco, where a consumer would go to substitute products with lower prices. If you’re looking to put some money somewhere if the consumer is looking tired, Costco (NASDAQ: COST), Wal-Mart (NYSE: WMT) and Dollar General (NYSE: DG) are good options. If you believe the consumer is REALLY tired, you may want to look to put your money somewhere outside of the market, like a CD with a 5% yield. For other 5% options, check out my recent post “The best way to get a 5% yield–my choices and their pluses and minuses”: https://www.jubakpicks.com/the-best-way-to-get-a-5-yield-my-choices-and-their-pluses-and-minuses/.
So much for a global plan to tackle climate change: China and India ramp up coal production and consumption
If the world is to stand any chance of avoiding a catastrophic increase in temperatures, the global economy has to move away–very quickly–from using fossil fuels, and especially coal, to generate electricity. Both China and India pledged at the 2021 Glasow COP26 global climate summit to phase down the use of coal and to reduce carbon emissions from their industrial sector. Pledges. Can’t eat ’em. Can’t use them to pay the bills. Turns out, you can’t even believe them.
Now stocks are a second half of 2023 story–the Bulls hope
Why hasn’t the stock market tumbled more in the wake of hotter-than-expected inflation numbers from both the Consumer Price Index (CPI) and the Personal Consumption Expenditures price index for January? It’s not because investors and traders are looking for a reversal of the bad inflation news when we get February data in early March. Nope. It’s because stock market bulls continue to believe that the Federal Reserve will stop raising interest rates soon enough to produce a rally in the second half of 2023.
There just isn’t a whole lot of fear in this stock market–at least in the short-term says the VIX
The so-called fear index, the CBOE S&P 500 Volatility Index (VIX), just isn’t very fearful right now. In spite of all the negative talk from Federal Reserve officials, Wall Street figures like JPMorgan Chase’s Jamie Dimon, and various and sundry economies, stocks just aren’t showing much fear right now. Oh, sure stocks fell this week but the VIX didn’t show any big rush to hedge downside risk
Saturday Night Quarterback says, For the week ahead expect…
For the week ahead, I’m expecting more slippage in the major stock market indexes. Because? Let’s face it–give me a reason, any reason, to put money to work in stocks ahead of the March 22 meeting of the Federal Reserve. On the upside there’s…well what is there?
The S&P 500 breaks below 4,000 turning support into overhead resistance again
Friday’s 1.05% retreat in the Standard & Poor’s 500 took the index down 42.28 points to 3,970.04. The cliche is that with a drop like this support–at 4,000–turns into resistance to the market moving higher. That’s a depressing thought to anyone who looks at a chart showing how long it took–and how many tries–before the index moved decisively above 4,000 on January 20, 2023.
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