The Steross Market and Investing Thread

BREAKING: The U.S. economy grew faster in the second quarter of 2024 than first reported, suggesting there was little sign of a slowdown through the first six months of the year.

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MSNBC (@msnbc) on Threads

BREAKING: The U.S. economy grew faster in the second quarter of 2024 than first reported, suggesting there was little sign of a slowdown through the first six months of the year.
www.threads.net www.threads.net
 
Polds4OSU said:
BREAKING: The U.S. economy grew faster in the second quarter of 2024 than first reported, suggesting there was little sign of a slowdown through the first six months of the year.

www.threads.net

MSNBC (@msnbc) on Threads

BREAKING: The U.S. economy grew faster in the second quarter of 2024 than first reported, suggesting there was little sign of a slowdown through the first six months of the year.
www.threads.net www.threads.net
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I've only seen this a couple places. Downward revisions (bad news) spread like wildfire, upward revisions (good news) never get the clicks.
 
China Markets not doing very well right now

China state banks buying dollars amid rapid yuan gains, sources say​


SHANGHAI/BEIJING (Reuters) - Major state-owned banks were buying dollars in China's onshore foreign exchange market on Friday to slow down a rising yuan, four people with knowledge of the matter said.

The banks' actions come as the yuan strengthened to an eight-month high of 7.0895 per dollar, breaking chart resistance at 7.1 and erasing year-to-date losses. The people requested anonymity because they are not authorized to talk about market matters publicly.


China's state banks usually act on behalf of the central bank in the country's foreign exchange market, but they could also trade on their own behalf.

Reuters reported last week that Chinese authorities have worked behind the scenes to ensure the currency does not spike abruptly, which could roil fragile domestic financial markets and hurt exporters.

Markets are also keenly focused on whether sharp gains for the currency could prompt exporters to start converting an estimated $500 billion in accumulated receipts into yuan.

The yuan traded at 7.0936 per dollar as of 0625 GMT.
 
Polds4OSU said:
China Markets not doing very well right now

China state banks buying dollars amid rapid yuan gains, sources say​


SHANGHAI/BEIJING (Reuters) - Major state-owned banks were buying dollars in China's onshore foreign exchange market on Friday to slow down a rising yuan, four people with knowledge of the matter said.

The banks' actions come as the yuan strengthened to an eight-month high of 7.0895 per dollar, breaking chart resistance at 7.1 and erasing year-to-date losses. The people requested anonymity because they are not authorized to talk about market matters publicly.


China's state banks usually act on behalf of the central bank in the country's foreign exchange market, but they could also trade on their own behalf.

Reuters reported last week that Chinese authorities have worked behind the scenes to ensure the currency does not spike abruptly, which could roil fragile domestic financial markets and hurt exporters.

Markets are also keenly focused on whether sharp gains for the currency could prompt exporters to start converting an estimated $500 billion in accumulated receipts into yuan.

The yuan traded at 7.0936 per dollar as of 0625 GMT.
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Appreciate this. Had not seen elsewhere
 

Trump Media erases all 2024 stock gains days before Donald Trump can cash out his $1.95 billion stake​

Donald Trump is nearing the day he can cash out of Truth Social's parent company, raising concerns of a potential sell-off that could hit the meme stock hard.

On paper, Trump's stake in Trump Media and Technology Group (TMTG) is valued at $1.95 billion, which could help cover his mounting legal fines.


However, when he agreed to a reverse merger with Digital World Acquisition Company (DWAC) on March 25, he accepted a six-month lockup period, preventing him from selling his 115 million shares.

Trump owns 59% of TMTG, and any sale could tank the stock unless done in small batches.

With the lockup expiring in three weeks, investors are growing anxious.

Trump’s financial situation appears strained—he's been selling Trump-themed sneakers, "God Bless the USA" bibles, and now offering a piece of the suit he wore during his first debate with Joe Biden to collectors who purchase $1,500 worth of digital Trump trading cards.


On Wednesday, TMTG shares fell 6%, closing just below $17. This wipes out all gains for the year, while the S&P 500 has risen 16% over the same period.

TMTG declined to comment, and Trump was unavailable on Truth Social or X.

Loss-making TMTG still valued at 1,000 times its revenue​

TMTG has now lost 80% of its value since hitting its all-time high of $79.38 on March 26, the stock's first day of trading under the DJT ticker. That valued Trump's personal stake at nearly $9.11 billion at the time.

The stock may continue to decline. Last week, CEO Devin Nunes and CFO Philip Juhan sold $2.5 million worth of shares, further dampening investor sentiment.



Despite its $3.4 billion market cap, the loss-making social media company is trading at over 1,000 times its annual revenue. Sales for the first half of the year were just $1.6 million, with deeply negative cash flow.

Wall Street analysts avoid TMTG due to its "meme stock" status, attracting little interest from professional investors. Even if analysts wanted to cover it, TMTG doesn't publish key metrics, including its number of active, monetizable users.

The stock has mostly been viewed as a bet on Trump's re-election. However, with polls tightening in key battleground states and Kamala Harris gaining momentum, that bet is now less certain.

November election outcome key to TMTG's stock price​

Trump has now been forced to return to Twitter (now X), where he has ten times as many followers and a far larger audience, in order to reach potential voters.

This further dilutes the value Truth Social has for users if they can access his content on other competitors’ platforms.


Should he lose in November, however, Truth Social’s importance going forward would be greatly diminished since Trump’s political career would likely be over.

John Rekenthaler, vice president of research at financial services firm Morningstar, told Quartz that buying shares in TMTG is synonymous with purchasing Trump’s personal brand.

“But he’s not going to have a brand,” he said last week, “if he loses a second straight presidential election.”

There is even a scenario by which Trump could sell his TMTG shares around September 20, some five days earlier, as long as they do not dip below $12.

Either way, there are bound to be legal complications involved in a sale since his son, Don Jr., is privy to material non-public information as a director, including its third-quarter performance.

The only way this stock overhang issue ends well for TMTG investors is if Trump manages to find a strategic investor in the company willing to acquire his stake in full.
 
Screenshot 2024-09-10 at 5.55.47 PM.png

Sahm Rule Recession Indicator​


Sources > Sahm, Claudia
The Sahm Rule identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months.
 

Inflation Extends Cooling Streak to Hit 2.5% in August​

Inflation eased in August to new three-year lows, teeing up the Federal Reserve to begin gradually reducing interest rates at a meeting next week.

The consumer-price index climbed 2.5% from a year earlier, according to the Labor Department, decreasing from 2.9% in July and extending its cooling streak to five months. Core inflation, a measure that excludes volatile food and energy costs, held roughly steady at 3.2%.

Economists surveyed by The Wall Street Journal had expected overall prices to have risen 2.6% from a year ago, as well as a 3.2% increase in core prices.

Major stock indexes were mixed after the report, with the Dow Jones Industrial Average veering lower. Treasury yields inched slightly higher but hovered near their lowest levels of the year.

Firmer shelter inflation that contributed to somewhat stronger-than-anticipated core price increases in August will likely make it harder for officials to push for a larger half-percentage-point rate cut at next week’s Fed meeting. Traders on Wednesday ramped up bets that the Fed will ease policy at a more moderate pace.

Many of the central bankers have signaled they are prepared to cut rates, and Wednesday’s consumer-price index reading won’t change that outcome. But some officials hadn’t entirely ruled out the prospect of a larger cut, as opposed to a more traditional reduction of a quarter percentage point.


Cost increases for food slowed in August, while used vehicles and energy were cheaper than a month earlier. An intensifying selloff in oil markets suggests prices at the pump will continue to decline in the coming weeks, a key reversal in pressures that have colored Americans’ views of the U.S. economy.



The economy is a top issue for voters who haven’t decided whether to back Vice President Kamala Harris or former President Donald Trump. Inflation of the past few years is a big vulnerability for Democrats, and voters consistently list higher prices for energy, food and housing among their top concerns.

The report comes as investors struggle to parse the health of the U.S. economy, which has slowed from the torrid growth it enjoyed immediately after the pandemic, when employers scrambled to reopen and hire new workers.

Easing inflation has given breathing room to cost-weary families. But the labor market has also cooled, with hiring and wage growth slowing and the average spell of unemployment rising as it takes longer to find jobs.

With rates still high and Americans awaiting relief in the form of lower rates on mortgages, car loans and credit cards, major retailers are adjusting to more shoppers hunting for deals. Target slashed prices to help boost sales last quarter, while Amazon.com reported that customers are increasingly looking for discounts and lower-price essentials.


But even though consumers are searching for deals, they are still spending.

“We have not seen any incremental fraying of consumer health,” John David Rainey, Walmart’s chief financial officer, said on a recent earnings call.

Companies and investors will closely scrutinize the Fed’s meeting next week, both for the size of the rate cut and for Chair Jerome Powell’s view about the health of the economy.

Officials at the central bank tend to telegraph those moves ahead of time to avoid surprising Wall Street. But the Fed is now in a self-imposed quiet period leading up to next week’s meeting, turning investors’ attention to Wednesday’s inflation report for final clues about the outlook for interest rates.

The uncertainty has jolted a U.S. stock market that notched record after record this year thanks to excitement about the prospects for artificial intelligence. Projected demand for commodities has also wavered, pushing contracts for future deliveries of oil, gasoline and diesel on Tuesday to their cheapest prices since 2021.

 
steross said:
View attachment 7016

Sahm Rule Recession Indicator​


Sources > Sahm, Claudia
The Sahm Rule identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months.
Click to expand...

Nothing makes sense in this economy. None of the usual signs that would point to a recession can be trusted. This is another one. Because you'd expect layoffs and discharges to tick up in a similar manner. But they aren't. Companies aren't firing, the labor supply has spiked. Most people are pointing to the flood of immigration. I don't know.

1726149786349.png
 
Bowers3 said:
Nothing makes sense in this economy. None of the usual signs that would point to a recession can be trusted. This is another one. Because you'd expect layoffs and discharges to tick up in a similar manner. But they aren't. Companies aren't firing, the labor supply has spiked. Most people are pointing to the flood of immigration. I don't know.

View attachment 7098
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2020-2021 will be studied for decades. How much of what has been “normal” was completely shocked by a global pandemic? Manufacturing, supply chains, employment and rarely mentioned demand disruption/delay.

I also think the US response to inflation has been quite remarkable. It didn’t detour buyers as expected and interest rate hikes seemed to have little impact on buyers as well. Maybe there is a huge credit bubble waiting to pop.
 
HacklemanPoke said:
2020-2021 will be studied for decades. How much of what has been “normal” was completely shocked by a global pandemic? Manufacturing, supply chains, employment and rarely mentioned demand disruption/delay.

I also think the US response to inflation has been quite remarkable. It didn’t detour buyers as expected and interest rate hikes seemed to have little impact on buyers as well. Maybe there is a huge credit bubble waiting to pop.
Click to expand...

It ain't Quits either. Downward trend there too.

1726152676096.png
 
HacklemanPoke said:
I also think the US response to inflation has been quite remarkable. It didn’t detour buyers as expected and interest rate hikes seemed to have little impact on buyers as well. Maybe there is a huge credit bubble waiting to pop.
Click to expand...
I'm wanting to build a house in OKC and I am getting bids at $300-375 a sq foot and I already own the land. A 3200 sq foot house with initial bids coming at 7 figures with land already bought. Yes, it is insane out there right now. I'm gonna stay renting, I guess.

I'm kicking myself for not doing it back during the pandemic when interest rates were low. But, as an ER doc my life was crazy, I didn't understand the extreme will of the Fed to stop the economic hit that was supposed to go along with the pandemic hit that I was seeing. I was expecting a crash and got a reverse crash.

I agree with @Bowers3, nothing is as it seems. At least, I think it isn't.


1726183623620.png
 
steross said:
I'm wanting to build a house in OKC and I am getting bids at $300-375 a sq foot and I already own the land. A 3200 sq foot house with initial bids coming at 7 figures with land already bought. Yes, it is insane out there right now. I'm gonna stay renting, I guess.

I'm kicking myself for not doing it back during the pandemic when interest rates were low. But, as an ER doc my life was crazy, I didn't understand the extreme will of the Fed to stop the economic hit that was supposed to go along with the pandemic hit that I was seeing. I was expecting a crash and got a reverse crash.

I agree with @Bowers3, nothing is as it seems. At least, I think it isn't.


View attachment 7122
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Jesus it was 125-160 4 years ago.
 
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