The Stock Market thread

[flere-imsaho]

Originally Posted by NobodyHere

I would say he's more of a Steve Jobs myself.

There's no denying that he's a great salesman but he's not really an engineer.

That's fair. Jobs also stole ideas, refused to give people appropriate credit, and was famously abusive to his staff.

[Edward64]

Originally Posted by NobodyHere

I would say he's more of a Steve Jobs myself.

There's no denying that he's a great salesman but he's not really an engineer.

Agree. I think the Woz was that guy back then.

But have to give Jobs credit. Asshole that he was, he changed the world with his vision & leadership.

[Edward64]

Hopefully he is wrong.

https://fortune.com/2022/05/27/housi...rices-outlook/

Moody's Analytics chief economist Mark Zandi is ready to call it. He tells Fortune that we've officially moved from a housing boom into a "housing correction."

The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling.

This drop-off isn't a result of seasonality, or a soft month or two. Zandi says it's a trajectory flip: Demand is pulling back—fast—in the face of mortgage rates that have spiked dramatically.

"The housing market has peaked…everything points to a rolling over of the housing market," Zandi says. "In terms of home sales, they're falling sharply. Housing demand is coming down fast. Home price growth [will] go flat here pretty quickly; we will see [home] price declines in a significant number of markets."

I just need 3 more years of boom.

Unlike a stock market correction, which means a greater than 10% drop in equities, Zandi says a "housing correction" means the end of the housing boom and the beginning of a period where home prices will fall in some regional markets. Over the coming 12 months, he expects year-over-year home price growth to be 0%. If that comes to fruition, it'd mark the worst 12-month stretch since 2012. It would also be whiplash for real estate agents and brokers who've watched home prices soar 19.8% over the past year.

[flere-imsaho]

I mean, it makes sense. I lot of the demand over the past few years was driven by historically low mortgage interest rates, and a lot of people used that as their driver to buy. So with rates going up, the only people buying are those who have to (e.g. had to move due to a job).

Sorry to hear it for your situation, Edward.

[Edward64]

Stock market is generally a leading indicator so this should not be a surprise with the malaise we've had for the past 3 months or so.

https://www.cnbc.com/2022/06/07/fed-...recession.html

A widely followed Federal Reserve gauge is indicating that the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting a rule-of-thumb definition for a recession.

In an update posted Tuesday, the Atlanta Fed’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter.

Following a 1.5% drop in the first three months of the year, the indicator is showing the economy doesn’t have much further to go before it slides into what many consider a recession.

GDPNow follows economic data in real time and uses it to project the way the economy is heading. Tuesday’s data, combined with other recent releases, resulted in the model downgrading what had been an estimate of 1.3% growth as of June 1 to the new outlook for a 0.9% gain.

[Edward64]

Originally Posted by Edward64

We live in a 400+ home subdivision and there's not been many houses for sale last year. We noticed one recently priced around the Zillow price. Wife and I are going to monitor it to see what it sells at.

That house sold for pretty much the zillow price (3 lots down)! It has officially become the highest priced house in our neighborhood now. Looking forward to meeting the neighbors.

My wife cautions me that there was a lot of remodeling done (we saw the workers, torn up carpets, some carpentry work in the driveway etc.) on that house for 2-3 weeks.

No more houses for sale per the zillow map so no additional data points. But still one example that zillow prices seem to be reasonably approximate in my part of town.

[Edward64]

Ouch, not a good day for the markets.

[NobodyHere]

What else is new.

[albionmoonlight]

I'm still between 12 and 17 years from retirement, so I'm not as worried about this downturn.

But I want to remember this time once I'm ~5 years or so out so I have the discipline to move more assets into safer investments instead of trying to chase a few more years of market returns.

(My plan does have targeted retirement funds. They are a bit conservative for my taste, but that's where I need to put the money closer to the time)

[BYU 14]

I need to just avoid clicking on this thread, I have my plan, it is flexible, this thread always depresses me LOL

[Edward64]

Originally Posted by NobodyHere

What else is new.

This is "new" as in we haven't quite seen inflation this high since early 1980s.

Inflation rises at fastest pace in 40 years, pushed up by record gas prices | CNN Business

Both readings are among the biggest jumps in prices experienced by consumers since 1981.

"Inflation is going higher and broader with a worsening outlook," said Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles. "The probability of a recession in the next year or so is rising. Inflation is eating away at consumers' purchasing power. Since consumer spending accounts for about 70% of the economy, a real decrease in consumer spending would deal a big blow to the economy."

Recession next year? Who are we kidding, I'm thinking this year.

Energy prices rose 34.6% compared to a year ago, driven by a nearly 50% jump in gas prices over the last year. AAA's tracking of gas prices shows the price of a gallon of regular gas nationwide is now at $4.99

Just grateful wife and I don't do much driving

Electricity prices rose 12% over the last 12 months, the biggest annual increase since 2006. And the price of natural gas being used by consumers rose 30.2%, the biggest jump since 2008.

Haven't noticed that big of a jump myself.

Prices for food purchased to eat at home rose 11.9%, the largest 12-month increase since 1979, with eggs up 32.2%, milk up 15.9% and poultry up 16.6%.

Kroger branded eggs, milk keep things low. TBH I don't think 99% of us can tell the difference in a blind test. Chicken has alway been our main meat and Costco helps here.

The shelter index, which measures rents and other housing costs, posted a 5.5% increase, its biggest 12-month gain since 1991. While that might not be as big an increase as the double-digit price hikes in other categories, the money that consumers spend on their home, whether renting or buying, is typically the largest expenditure they make each month.

This "bad news" is actually good for me personally so not going to complain. There was a house in our neighborhood that recently sold pretty much at the zillow (high) price. There's another house with a for sale sign recently. I'll be monitoring that one also.

Used car prices, which had shown signs of moderating with monthly declines over the last three months, rose once again, lifting prices 16.1% over the last 12 months. Meanwhile, new car prices are up 12.6% over the same period.

Daughter totaled her car. Insurance payout was more than what we paid for the car . Unfortunately, the payout went into the stock market ... planning to get her a new car by July/Aug and hoping I'll recoup some of that loss by then.

Strong demand for air travel at the start of the summer travel season is also lifting airfares, which posted a one-month jump of 12.6% in May, the third-straight monthly rise of more than 10%. In the last 12 months, airfares are up 37.8% and fares in May are 21.7% higher than in May 2019, before the pandemic caused a near halt in demand for air travel.

Just came back from vacation so not that badly impacted.

At its May meeting, the Fed raised rates by half a percentage point, the first such move in 22 years. Another half-point hike is likely at next week's meeting, with some forecasters now calling for a three-quarter-point hike in light of Friday's report.

I'm all for raising interest rates as quickly as possible.

*****

I normally summarize all my investments monthly in an xls to track things. But I am fair weather guy and haven't opened that damn xls since early March.

Congrats Joe, you let a strong stock market crater under your watch. You let a strong (arguably but definitely better than now) economy crater under your watch. Oh yeah, more Americans died of Covid under your watch with vaccinations than under Trump and all his BS. You and Dems are toast in 2022 mid-terms.

[Edward64]

Hold on boyz for a scary Monday!

U.S. stock futures fell early Monday morning as rates jumped and Wall Street braced for a key Federal Reserve meeting later this week.

Futures tied to the Dow Jones Industrial Average dropped 600 points, or 2%. Nasdaq 100 futures tumbled 3%, and S&P 500 futures fell 2.5%.

The 2-year Treasury yield rose by 15 basis points to 3.2%, reaching its highest level since 2007. At one point in the session, the 2-year rate traded above its 10-year counterpart for the first time since April.

The major averages last week posted their biggest weekly declines since late January. The Dow and S&P 500 fell 4.6% and 5.1%, respectively, while the Nasdaq Composite lost 5.6%.

But still not quite as bad as Bitcoin

Bitcoin tumbled below $24,000 on Monday, hitting its lowest level since December 2020, as investors dump crypto amid a broader sell-off in risk assets.

Meanwhile, a crypto lending company called Celsius has paused withdrawals for its customers, sparking fears of contagion into the broader market.

The world’s largest cryptocurrency bitcoin briefly dropped below the $24,000 mark around 05:00 a.m. ET, according to CoinDesk data, before jumping back above that level shortly after.

Over the weekend and into Monday morning, more than $200 billion had been wiped off the entire cryptocurrency market. The cryptocurrency market capitalization fell below $1 trillion on Monday for the first time since February 2021, according to data from CoinMarketCap.

[Edward64]

Hopefully with an official bear market, we are at capitulation and (theoretically, can start to recover).

US stocks plunged into bear market territory Monday morning as Wall Street investors grew increasingly nervous about the prospect of even more harsh medicine from the Fed to take the sting out of inflation.

The Dow (INDU) sank 750 points, or 2.4%, and the Nasdaq fell 3.7%.
The broader S&P 500 fell 3.2%. That index is now more than 20% below its all-time high set in January, putting stocks in bear-market territory.
Stocks briefly fell into a bear market on May 20, although a late-day rally rescued the market from closing below that threshold for the first time since the early days of the pandemic in the spring of 2020.

Inflation and recession fears had eased somewhat at the end of May, and stocks regained some ground. But Friday's miserable Consumer Price Index report showed US inflation was significantly higher than economists had expected last month, which could make the Federal Reserve's inflation-control efforts more difficult.

[Edward64]

Big day today.

Fed is to announce .5 or .75 or maybe even 1 basis point hike.

.75 is the odds on favorite but I kinda like the 1%. Let everyone know you are serious about killing inflation (and some say stagflation) even if it causes a recession.

[JPhillips]

FYI: According to Google, People Also Ask

How much will Ethereum cost in 2030?
Ethereum can prove to be a solid investment in the long-term (five to ten years). 2025: Maximum expected price of ETH by 2025 is $10,763. 2030: Maximum expected price of ETH by 2030 is $18,534.

[Edward64]

Originally Posted by Edward64

Big day today.

Fed is to announce .5 or .75 or maybe even 1 basis point hike.

.75 is the odds on favorite but I kinda like the 1%. Let everyone know you are serious about killing inflation (and some say stagflation) even if it causes a recession.

Nice bump yesterday but this mornings futures are fugly.

The roller coaster ride continues.

[Lathum]

oof

[NobodyHere]

Originally Posted by Edward64

Nice bump yesterday but this mornings futures are fugly.

The roller coaster ride continues.

Screw it, I'm taking my money out of index funds and I'm throwing the it into crypto. I hear Celsius is a good investment...

[Edward64]

Something tells me housing demand is going to slow quite a bit and so will Zillow house appreciation estimates. Not a bad thing, just don't fall off a cliff coming back down.

The 30-year fixed-rate mortgage averaged 5.78% in the week ending June 16, up from 5.23% the week before. Rates have risen more than two-and-a-half percentage points this year. They were at an average of 2.93% this time last year.

[Edward64]

Originally Posted by NobodyHere

Screw it, I'm taking my money out of index funds and I'm throwing the it into crypto. I hear Celsius is a good investment...

I do wonder if I want to roll the dice and buy some bitcoin once I see it start to go up (or have some resistance). But do think there is room to go further south right now.

One of bitcoin (cryptos) selling point was how it would be a hedge against the market. Apparently not this time. There'll be a post mortem on what happened and should be an interesting read.

I would also have thought there would be a lot more public lament on margin calls etc. but haven't read much about it. I'm thinking there are a lot of Robinhood customers have have been crushed (along with Celsius customers that can't get their money out).

[Kodos]

Originally Posted by NobodyHere

Screw it, I'm taking my money out of index funds and I'm throwing the it into crypto. I hear Celsius is a good investment...

I hear they are a very stable coin.

[GrantDawg]

Originally Posted by Edward64

Something tells me housing demand is going to slow quite a bit and so will Zillow house appreciation estimates. Not a bad thing, just don't fall off a cliff coming back down.

I have never really made very many wise financial moves, but refinancing last year has decisively been the best move I ever made.

[Ksyrup]

I refinanced in February of 2020. I guess I technically didn't get the absolute lowest rate, but 2.5% looks pretty good right now. And I also got away from Wells Fargo who pulled some shenanigans on people during Covid by forcing certain mortgagees into forbearance without their knowledge or consent, and who then got stuck with credit denials or couldn't sell their homes because of it. I'm pretty sure WF got its fair share of class actions over it.

[Edward64]

We refinanced our house a couple times and finally got it down to a 3.75% for 15 years. After the 2008 crisis, we made a decision to pay off the house as quickly as possible. So that's where all merit increases and bonuses went.

Conventional wisdom would say that we should have invested the funds we used to pay off the house (e.g. 8-10% return investing in stock market vs 3.75% mortgage rate) but after 2008 we wanted to be able to sleep better.

With the 2020 covid "flash crash" and now 2022 more sustained downturn, we are sleeping better right now since we don't need to worry about mortgage. But man, the past 4 months or so has been wearing on us.

I still want my 2 kids x $10k tax credit (school loan forgiveness). I promise to spend and not invest it. Joe, give me the freebie you are giving to millions of others.

[flere-imsaho]

We refinanced down to 3% in 2020 and likewise, one of our better financial decisions.

[albionmoonlight]

In August 2020, we did at 15 yr at 2.75% Very happy to have done that.

In hindsight, we probably should have done a 30 yr at that rate (or the slightly higher rate they were offering). But at the time, it felt like 3% money was going to go on forever.

And, in terms of our life position, a 15 year gets paid off right around when I will be retiring and our kids are out of college, etc. So it did fit the timeframe of having it all paid off right when we might be moving, etc.

I'll freely admit that our timing was mostly luck.

[Edward64]

Yay on you guys that timed it right (luck or not).

[Ksyrup]

I'm throwing an extra $500 per month on top of my mortgage payment. I'm looking to pay off the mortgage by 2030. I may be able to speed that up depending on how things go over the next 5 years (after I'm finished paying for college and possible weddings, etc.).

I definitely want to be done with a mortgage payment. What sucks is that my property taxes are going up so much that my mortgage company continues to increase my monthly payment to add more to the escrow account for taxes. I haven't done the math, but I'd bet that I'm not actually doing much better now at 2.5% with the current taxes I'm paying on my elevated property appraisal versus 4.5% at a much lower tax appraisal.

[Kodos]

We did 3.25% for 15 years five years ago. Good enough.

[GrantDawg]

Originally Posted by albionmoonlight

In August 2020, we did at 15 yr at 2.75% Very happy to have done that.

In hindsight, we probably should have done a 30 yr at that rate (or the slightly higher rate they were offering). But at the time, it felt like 3% money was going to go on forever.

And, in terms of our life position, a 15 year gets paid off right around when I will be retiring and our kids are out of college, etc. So it did fit the timeframe of having it all paid off right when we might be moving, etc.

I'll freely admit that our timing was mostly luck.

Ours was at 3.0% at 15 for the same reason. Having it paid by retirement was a must. Of course, now we are discussing buying a bigger house to share with my daughter and soon to be husband. Someplace were we can have a full basement and they can have the upstairs. If that happens it would most likely be next year sometime.

[flere-imsaho]

Originally Posted by albionmoonlight

I'll freely admit that our timing was mostly luck.

[Edward64]

Originally Posted by GrantDawg

Ours was at 3.0% at 15 for the same reason. Having it paid by retirement was a must. Of course, now we are discussing buying a bigger house to share with my daughter and soon to be husband. Someplace were we can have a full basement and they can have the upstairs. If that happens it would most likely be next year sometime.

Man, something must be seriously wrong with you or with me. I would not dream of having married daughter/son staying with us. That would drive me crazy.

I'll help them with an apartment first or down payment for their first house.

[Edward64]

Up, then down, and now back up. Market is schizoid today

[GrantDawg]

Well, I do get along great with my daughter and her future husband. He used to work for me, and I love him like a son. Plus, it would be living close together, but not together. Separate homes in the same building. With the housing market as expensive as it is today, they will probably never be able to afford a house on their own. Having them pay rent just makes me sick. It is ridiculous to pay that kind if money for something you will never own.

Sent from my SM-G996U using Tapatalk

[Edward64]

You are a better man than me.

I see your point but I'd have them commit to like X months and have them put their $ into savings/brokerage and not spend it on frivolous things.

[Edward64]

(This could be in the bitcoin thread but thought it was more applicable here)

Interesting read. Not sure I agree with it but think it's true.

https://www.cnbc.com/2022/06/18/why-...e-economy.html

The crypto market’s sub $1 trillion market cap (which is less than half that of Apple’s) is tiny compared to the country’s $21 trillion GDP or $43 trillion housing market. But U.S. households own one-third of the global crypto market, according to estimates from Goldman Sachs, and a Pew Research Center survey also found that 16% of U.S. adults said they had invested in, traded, or used a cryptocurrency. So there is some degree of national exposure to the deep-sell off in the crypto market.

Then there’s the whole mystique around the nascent crypto sector. It may be among the smaller asset classes, but the buzzy industry commands a lot of attention in popular culture, with ads on major sporting championships and stadium sponsorships.

That said, economists and bankers tell CNBC they aren’t worried about a knock-on effect from crypto to the broader U.S. economy for one big reason: Crypto is not tied to debt.

“People don’t really use crypto as collateral for real-world debts. Without that, this is just a lot of paper losses. So this is low on the list of issues for the economy,” said Joshua Gans, an economist at the University of Toronto.

Gans says that’s a big part of why the crypto market is still more of a “side show” for the economy.

[sterlingice]

If it's owned much more by consumers than institutions and, especially, investment banks - I think we all know how this is going to go down. If you look around the table and you can't find the sucker and all.

SI

[Edward64]

Thank you market God(s)!

We need another 10-12 of these in quick succession.

[NobodyHere]

Originally Posted by Edward64

Thank you market God(s)!

We need another 10-12 of these in quick succession.

Yeah, it's a good feeling leaving work richer than when I came in in the morning.

It's depressing to make a few bucks at work knowing you just lost a month's pay in the stock market that day.

[Edward64]

Unfortunately, this morning futures says we are going to give up alot of the gains from yesterday.

My guess is we need to see one/some of the below before we consistently track back up

1) Inflation (and gas) is stabilizing/decreasing some
2) Better than expected series of earnings reports (and fears of recession recede)
3) Good news on the Ukrainian war
4) GOP making gains in Congress in Nov

Or in other words, embracing the suck at least for the next 2-3 months.

[Ksyrup]

Originally Posted by NobodyHere

Yeah, it's a good feeling leaving work richer than when I came in in the morning.

It's depressing to make a few bucks at work knowing you just lost a month's pay in the stock market that day.

You really think like that? I haven't looked at my 401K since March and maybe twice since the beginning of the year. I can't say I think about losing something that I won't need for 10-15 years. Now, if you're about to retire and immediately need to cash in stocks/401K, then I get it. But otherwise, ignorance is bliss.

[Edward64]

Originally Posted by Ksyrup

You really think like that? I haven't looked at my 401K since March and maybe twice since the beginning of the year. I can't say I think about losing something that I won't need for 10-15 years. Now, if you're about to retire and immediately need to cash in stocks/401K, then I get it. But otherwise, ignorance is bliss.

Even with a long runway to retirement, it helps to see your portfolio grow. It shows your delayed gratification (e.g. contributions to 401k) is paying you back. I found it encouraged me to continue.

With a seemingly sustained down market, it obviously hurts to see your delayed gratification (contributions) seemingly be for naught. But I like to think of it as reluctant "dollar cost averaging" which, in theory, should mean I come out ahead in the long run.

[Ksyrup]

Exactly. This is a long term process which is why I am not obsessing over watching a couple hundred thousand dollars vanish because I have faith it will be returned and then plenty more by the time I really need it.

[Ksyrup]

Actually, my plan is not to need to tap my 401K for several years after retirement if things go the way I plan them to. Once my expenses are pared down to just the wife and I, I plan on doing a lot of things like putting salary into an executive deferral program we have where any tax-deferred salary I put in will pay out over 10 years after retirement. If I put enough in, we should be able to live pretty well before ever needing to tap investments. So hopefully I'm 20+ years from needing to cash out.

[NobodyHere]

Originally Posted by Edward64

Unfortunately, this morning futures says we are going to give up alot of the gains from yesterday.

My guess is we need to see one/some of the below before we consistently track back up

1) Inflation (and gas) is stabilizing/decreasing some
2) Better than expected series of earnings reports (and fears of recession recede)
3) Good news on the Ukrainian war
4) GOP making gains in Congress in Nov

Or in other words, embracing the suck at least for the next 2-3 months.

Well so far so good for the S&P today!

[NobodyHere]

Originally Posted by Ksyrup

You really think like that? I haven't looked at my 401K since March and maybe twice since the beginning of the year. I can't say I think about losing something that I won't need for 10-15 years. Now, if you're about to retire and immediately need to cash in stocks/401K, then I get it. But otherwise, ignorance is bliss.

I do think like that. It's probably not very healthy mentally (at least during a market downturn).

I do want the option of a leanFIRE retirement. Before the downturn I was probably about two years away. I haven't done exact calculations recently but my target date has probably been pushed back by a couple years.

I will also stress the word option. I feel I am happier at work if I choose to be there instead of being here because I can't live without the money.

[Edward64]

Originally Posted by NobodyHere

Well so far so good for the S&P today!

Kinda mixed across the 3 indexes right but fairly stable so I'll take it.

Supposedly because of below.

U.S. stock indexes turn positive as Powell promises to fight inflation but sees strength in economy

[Edward64]

Checked zillow and house price went up some. Not near enough to offset portfolio losses but hey, it's something positive.

[Edward64]

A thought came to mind. Since most (?) of you homeowners have seen significant (?) appreciation in your house, have you thought about upping your homeowners insurance (e.g. in case of fire)?

I'm afraid to bring up the subject with my State Farm representative.

[Arles]

My wife does insurance and I think she uses a few companies as a broker (it may be Safeco or Travelers) that allow here to do an extra 50% over the current value to reduce the "gap" if home values increase.