Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on May 27, 2022 1:34:15 GMT -8
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4aapl
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Post by 4aapl on May 27, 2022 6:06:14 GMT -8
Good video
It really comes down to where things are in the cycle. Did things get oversold, being sold off more than the current and near-term future would suggest. Just like in a top that gets too high, frothy or not, on the down side things can overshoot.
She seems to think so, that some big names have been punished too much. They also looked at Nvidia saying the call was mostly good (except for guidance), and she even said she is ready to buy some goog. On AAPL, she said she now has more than her benchmark, which she said is 7%.
No matter where the bottom is, it's going to take some effort to turn the corner. I don't remember the exacts of the 1-3-6 months following the bottom of 2001 and 2008, but in 2020 it made for a lot of volatility, like "2 steps forward, 1 step back". Given all of the external worries that can't fully be quantified, I image the process this time will be similar. But whether the absolute floor has been put in or not is a lot easier to figure out in the future, looking back.
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mark
fire starter
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Post by mark on May 27, 2022 6:40:15 GMT -8
I have a theory that I want to run by y'all before I try on a wider social media platform.
We can see that energy costs have risen, gasoline is up, electricity is up, etc. Energy is one of the core inputs to everything. We can see that labor costs have risen, hourly wages are up, and more people (apparently 2M more is latest count) are working. Labor is one of the core inputs to everything. We also see the fed just beginning their campaign against inflation. It seems to me that consumers have weathered $4.50 gasoline admirably. Spending hasn't slowed particularly, and spending on services (airfare, hotels, vacations, nail salons, etc) is still rising quickly. It is now effectively summer (this weekend), and while people will use a bit more gasoline during the summer, it is only a bit more, so it will only have a marginal effect on consumer spending. BUT, natural gas is also way up, something like double or triple what it was in the winter. And I understand that natural gas is the most common way (50%) to heat homes, followed by electric (35%). And most marginal electricity is produced using natural gas. So perhaps 80% of homes, one way or nother, use natural gas for heating.
My thesis is that consumers can withstand (and have withstood) higher gasoline prices (because of the wage gains), say $4.50-5.50. And consumers can withstand higher natural gas prices (because of the aforementioned wage gains). But consumers likely cannot withstand BOTH higher gasoline AND higher natural gas at the same time. I suspect that the wage gains mentioned above won't be enough to withstand both of these major increases. I think when that happens, probably beginning December or January, that consumers will sharply have to reduce spending ... and that will inevitably lead to recession. So we will probably see the first quarter of recession in 23Q1 or 23Q2, and it'll be "declared" sometime in mid 2023.
What do y'all think about this thesis?
(this timing would be VERY bad for many (all?) of my current options trades.)
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4aapl
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Post by 4aapl on May 27, 2022 7:48:16 GMT -8
What do y'all think about this thesis? I don't tend to think energy alone, electric/natural gas/oil/gasoline, is enough to cause a recession. It seems like it is really tough to have a recession when jobs are up, and even if jobs changed to flat it would be tough to have a bad recession. I'm sure there's a time in the past when it happened. One way would be for things to scare people, so even though they have money they choose to hold onto it. An offhand guess would be WWII or the Cuba Missile Crisis or some other part of the Cold War, but some of personal spending is offset by military spending. Right now plenty are spending, and I just read an article that the saving rate is down a little. OTOH, CNN has a story on their site that with consumers of Macy's spending is up, but with consumers of Walmart spending is down. I haven't read the article, but one could expect that with energy (and housing and food) costs a larger portion of certain people's household spending, that for certain groups they would have less to spend on other things. Cars (new and used) and houses are big ticket items that already skew more one direction, and so slight changes there but general continued strength doesn't show the whole market. iPhones are somewhere in the middle, but seem like they should continue to do well as other "affordable luxuries" such as vacations, hotels, and restaurants are said to be doing well. But there's also the question of a trailing indicator, and one person's pent-up vacation plans might not be the best signal for what is coming in the next 3-6-12 months. For the economy as a whole, one important thing might be how much of the personal spending total is from different tranches of consumers. That would help point out how much energy costs matter in a good economy, especially if some is offset in one tranche by another tranche buying Rivians (saw 2 more this week) or the like. EDIT: finance.yahoo.com/news/us-savings-rate-hits-lowest-level-since-2008-144126366.html
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Post by kpas1 on May 27, 2022 9:15:10 GMT -8
Very solid rebound by AAPL from the "test" at the $138 level. From the technical standpoint, isn't this a hugely significant development? Obviously there are still the larger, market-wide factors in play, but can we say AAPL is kinda out of the woods, technically?
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Post by duckpins on May 27, 2022 11:58:16 GMT -8
For the economy as a whole, one important thing might be how much of the personal spending total is from different tranches of consumers. That would help point out how much energy costs matter in a good economy, especially if some is offset in one tranche by another tranche buying Rivians (saw 2 more this week) or the like.
Gas is 6.75+ in the East Bay. Funny the plethora of these EV's has done nothing to reduce the price of gas. True the high tech consumers who after working 6 months by a million dollar house are not effected by inflation. But the bottom people will be. But how much do the bottom 50% actually contribute to non-necessary consumer spending? Consumer staples vs so called consumer discretionary? The wealth divide is real. We are morphing into the a 3rd world country with the top .01%, the top 1%, top 10% and then the rest. The nickel and dime scamming of the tech companies is what is going to be cut, the numerous streaming services, cell data, cloud storage. Anything easy to shave off a few bucks for people who need money for fuel and food.
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Post by nwjade on May 27, 2022 12:21:40 GMT -8
Very solid rebound by AAPL from the "test" at the $138 level. From the technical standpoint, isn't this a hugely significant development? Obviously there are still the larger, market-wide factors in play, but can we say AAPL is kinda out of the woods, technically? I would characterize it as a welcome development after being hugely oversold. We now have some breathing room from the lows but a ton of work to do technically. We closed above the 20MA which is good but the 50MA is clear up at $160.41. MACD and Slow STO are looking good but will there be follow through on Monday, that's the big question. I would be happily surprised if there is. A lasting market recovery, which Apple is tied to, is going to take quite some time IMO.
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4aapl
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Post by 4aapl on May 27, 2022 14:51:28 GMT -8
I would characterize it as a welcome development after being hugely oversold. We now have some breathing room from the lows but a ton of work to do technically. We closed above the 20MA which is good but the 50MA is clear up at $160.41. MACD and Slow STO are looking good but will there be follow through on Monday, that's the big question. I would be happily surprised if there is. A lasting market recovery, which Apple is tied to, is going to take quite some time IMO. Looks like we have until Tuesday. I always have trouble remembering which holidays are market holidays. www.marketbeat.com/stock-market-holidays/My guess is that 160 might take some work, but even spending some time in the 150's, staying above those 2 dips to about 150, would be good. And something like 153 would be 15% up from that 132.xx low. It's a good start, even if it's not the price we were hoping for around the first of the year. But things take time, and it's never a straight line.
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Dave
Member
"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on May 28, 2022 2:59:49 GMT -8
Thanks Mark for sharing your ideas with us. There’s something that we need to keep in mind, that the metrics that we are given may not always be accurate and many times are questionable. Such as the CPI numbers and unemployment rate and how these numbers have an affect on investors. Why Is the Consumer Price Index Controversial?
It’s very possible that the inflation numbers are much higher than is reported. But the general public knows and lives the truth about inflation and responds accordingly. Something else that people do when they see and expect the prices to continue to rise is buy as much as they can now before the prices go up anymore. In many ways it’s looked at as saving money. This is one of the things that has driven house sales, just as it did in the early 2000’s. But this trend can not continue forever as we have all experienced. But most people live from month to month and depend on hope. Hope that the next month will be better or at least not as bad. Runaway inflation is a beast and it’s effects do not simply go away because reported numbers change. Edit: I realize that everyone here already understands the uncertainties that I mentioned above and the fears, uncertainties and doubts about the future and how everyone reacts many times differently. It’s the unknowns that are most fearful. But everyone wants to go back to making money again and many times willing to test the waters of the market to see that it’s safe. But each time they do and each time they get burned it only makes them more fearful and more reluctant to keep trying. This is how I view it and more times than I like I find that I’m wrong.
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Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on May 28, 2022 3:04:53 GMT -8
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chinacat
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AAPL Long since 2006
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Post by chinacat on May 29, 2022 14:05:34 GMT -8
Despite the enthusiasm here for anti-union actions, I am not able to agree. I grew up in a blue-collar family. My Dad was a machinist (and represented by the Machinists Union) at the Providence Journal for forty years, welcomed overtime hours, and in addition always had a second part-time job in order to give us the best possible standard of living he could. When the three kids were teens and old enough to be trusted home alone after school, my Mom also also worked a (non-union) part-time job afternoons for the same reason. They both worked harder than I ever did as a software professional, and later as managing partner in a software startup. As a teen, I caddied and work worked behind the soda fountain at a local drugstore.
Anyone who does not recognize that some large employers take advantage of their employees are fooling themselves.
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