November 30, 2022 | Daily JAM, Morning Briefing |
Okay, at some point in 2023 or 2024, we get a big rally stock market when the Federal Reserve ends its current cycle of interest rate increases. And then what? The biggest reason to believe in modest stock market gains in any post-bounce Bull Market is the strong possibility that corporate profits will slip from their near-record highs. Today, the Commerce Department reported that after-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, shrank in the third quarter to 14.9% from 16.2% in the second quarter.
October 14, 2022 | Daily JAM |
After climbing 2.60% yesterday, the Standard & Poor’s 500 fell 2.37% today. Same story with the Dow Jones Industrial Average–up 2.83% yesterday, but down 1.34% today. And the NASDAQ Composite–up 2.23% yesterday and down 3.08% today. And the small-cap Russell 2000–up 2.41% yesterday and down 2.66% today.
October 13, 2022 | Daily JAM, Videos |
Today’s topic: what if you haven’t been pessimistic enough now? I’ve been pretty pessimistic for a while now. And I don’t expect that the October 13 bounce really marks the bottom in this Bear Market. The bottom in my opinion won’t come until the end of 2023 or, maybe, 2024. But my worry after the events of the last few days is that I haven’t been pessimistic enough. It looks like the global economy is slowing even more than we expected. The IMF International Monetary Fund came out Monday, October 10 with new lowered projections for global growth of 2.7% in 2023. That’s down from 2.9% back in July, and it’s down from 3.8% in January. We’ve also got a big escalation of the war in Ukraine leading to a worsening global energy crisis due to more extreme sanctions on Russian oil. On top of that, we have a new trade war with China hammering technology stocks. The question is, how do you get ahead of this? I’ve suggested selling Tesla (NASDAQ: TSLA) and ASML Holding (NASDAQ: ASML) on the assumption that China is going to retaliate by hammering U.S. companies that do regular business in China. Two more stocks that I’m looking at selling–or maybe protecting with Put options–are Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL) as I try to get ahead of what’s going on in China.
October 12, 2022 | Daily JAM, Special Reports |
I’ve decided to hold my Special Report: 9 Picks to Make Money in This Bear Market until after tomorrow’s CPI inflation report.
October 11, 2022 | ASML, Daily JAM, Top 50 Stocks |
Today I’m selling ASML Holding (ASML) out of my long-term 50 Stocks Portfolio. My take on Asmel hasn’t changed: this is one of the key chip equipment companies in the drive to produce smaller and denser chips. What has changed in the market and the global economy. I think that technology, and especially chip stocks, are in a downtrend that has a lot longer to run. And that recent U.S. restrictions on advanced chip technology exports to China will set off a trade war that will come down heavily on companies such as ASML.
October 1, 2022 | Daily JAM, Special Reports |
Today, October 1, I’ve gone back through this Special Report to update any parts of my calendar in light of what we’ve learned about the economy, about Federal Reserve interest rate policy, and about the global economy in the last few weeks. This update includes my take on the August jobs report and the September 21 meeting of the Fed. (It’s a complete revision of the original so changes are in the body of the original text.) It is different this time. And it’s likely to “be different this time” for the next five years or so. And you need an investment strategy for that period.
September 28, 2022 | Daily JAM, Videos |
My one-hundred-and-eighty-ninth YouTube video: “From a Bear Market to a Global Financial Crisis” went up today. To me, it increasingly looks like we’re going from a bear market to a global financial crisis. The signs of an upcoming global financial crisis are there: volatility in the currency markets, the decline in nearly every currency against the dollar, the World Bank lowering its estimates of economic growth around the world, and global inflation due to food and energy. A good way to track the “progress” toward a global financial crisis0 is to look at emerging markets. The iShares MSCI Emerging Markets ETF (EEM) and iShares MSCI India ETF (INDA) both saw accelerated declines starting around September 12, and South Korea has been down since mid-August. Many key emerging markets rely on in-flows of foreign capital to balance their accounts but the flow of that money has slowed, as investors are risking less internationally and keeping their funds closer to home. Right now, we’re seeing a global “Whac-a-Mole”, where individual countries pop up as problems. But if more financial individual crises pop up simultaneously and at a more rapid pace, we’ll have a global financial crisis on our hands. Oh, goody. Something more to worry about.
September 26, 2022 | Daily JAM, Morning Briefing |
There’s now $4.6 trillion stashed in US money-market mutual funds. Ultra–short bond funds currently hold about $150 billion. And the pile is growing. Cash saw inflows of $30 billion in the week through September 21, according to figures from EPFR Global. In addition there’s another $18 trillion in deposits at U.S. commercial banks, according to Federal Reserve data. U.S. banks are sitting on about $6.4 trillion of surplus liquidity, or excess deposits relative to loans, up from about $250 billion in 2008. The flows are being driven by two factors
September 5, 2022 | Daily JAM, Special Reports |
Today, September 5, I’ve gone back through this Special Report to update any parts of my calendar in light of what we’ve learned about the economy, about Federal Reserve interest rate policy, and about the global economy in the last few weeks. This update includes my take on the August jobs report and on recent Fed-speak from the Jackson Hole conference and after. It is different this time. And it’s likely to “be different this time” for the next five years or so. And you need an investment strategy for that period.
July 20, 2022 | Daily JAM, Morning Briefing |
Yesterday I wrote about how Bank of America’s monthly fund manager pointed to investor capitulation in the ongoing Bear Market. Today, strategists at Sanford C. Bernstein disagreed. “We have not yet seen capitulation in outflows from equity funds.”
June 16, 2022 | Daily JAM, Jubak Picks, Morning Briefing, Volatility |
Yesterday, the stock market was up with the Standard & Poor’s 500 gaining 1.46% on the day and the NASDAQ Composite up 2.49%. Listening to the Federal Reserve’s policy statement after the June 15 meeting of its Open Market Committee, Wall Street chose to hear a promise of interest rate cuts as early as the end of 2023 and certainly in 2023. Aggressive interest rate increases in 2022, from this perspective, are just a necessary precondition to those interest rate cuts. Today, the stock market is down with the Standard & Poor’s 500 falling 3.25% and the NASDAQ Composite off 4.08% at the close. The narrative on investors’ and traders’ minds today is the rising odds of a recession–75% odds in favor by 2024 a Bloomberg survey of economists says with 25% odds of a recession in 2023. For a day that trumps the hopes for 2024 interest rate cuts (which would, after all, only materialize if the economy has, indeed, tumbled into recession. I expect this “War of the Two Narratives” to continue for a while
May 24, 2022 | Daily JAM, DIS, Dividend Income, DUK, Jubak Picks, KO, MRK, PEP, PFE, Top 50 Stocks, XLU |
Of course, there’s nothing even vaguely normal about a day when a stock falls 43% and takes much of the market with it.Snap’s (SNAP) plunge did take some surprising candidates along for the ride. Tesla (TSLA) dropped 6.93% on yet more bad news on production in its Shanghai factory. Disney (DIS) fell 4.01% just because. SentinelOne (S) was lower by 8.11% since everyone knows that cybersecurity stocks are just a fad.
But on balance, on the green side (and yes, there was a green side to the market) the market did what markets are supposed to do in the face of bad news and an increase in fear.
