• PortfolioHubPortfolioHub
      ·13:43

      The Future of Artificial Intelligence

      Unquestionably, the field of artificial intelligence will be crucial to the advancement of various cutting-edge technologies during the next decades. Robotics, big data, and the Internet of Things are all included in this field. In the next years, it will still be a technology pathfinder.Photo byPossessed PhotographyonUnsplashArtificial intelligence has entered the real world surprisingly swiftly after first appearing in science fiction movies. Intelligent machines are no longer only a recurring theme in science fiction; they are starting to appear in real life as well. Nowadays, artificial intelligence is a serious possibility.Growth and Improvement of Artificial IntelligenceBy 2028, the worldwide artificial intelligence market will be worth $640 billion, predicts Fortune Insights (2020). According to a 2019 poll conducted by Gartner CIO, the use of artificial intelligence in businesses has surged by 270% over the previous four years.According to McKinsey’s (2019) worldwide AI study, 44% of firms have seen material cost reductions as a result of using AI. Over 90% of the most successful companies in the world are investing in artificial intelligence systems and technology, according to a NewVantage study (2021).Artificial Intelligence ContributionsThe following areas will soon be investigated by AI, according to experts.Medical Care and HealthcareArtificial intelligence is being used by researchers to better understand how a person’s genes, environment, and lifestyle choices may affect their capacity to prevent or cure illness (AI). Treatments are improving in accessibility, affordability, and efficacy, which raises the quality of life and lengthens lifespans for people. These changes may be partly explained by advancements in tailored medication, sophisticated diagnostics, and digital pharmaceuticals.AI may aid future developments in the field of medicine and healthcare. The various advantages it offers, such as the use of convolutional neural networks in medicine, are a major driving force.Unmanned VehiclesModern automobiles will be considerably better than humans in these areas since deep learning is most successful when used for tasks requiring pattern identification. According to an IEEE Spectrum projection for 2035, driverless cars would account for 70% of all kilometers traveled globally.As more people utilize autonomous cars, the number of accidents brought on by human mistakes will decrease. The number of people killed in vehicle accidents is predicted to decline significantly.As an example, the Tesla Autopilot technology is often regarded as the pinnacle of automotive innovation. Thanks to a total of eight powerful cameras and superior image processing, this vehicle can operate independently up to a distance of 250 meters. The same is true for the vehicle’s ability to accelerate, brake, steer, and change lanes.Virtual AssistantsArtificial intelligence (AI)-powered virtual assistants like Siri and Alexa, as well as other NLP-based systems, are often used to understand and complete tasks given by people. Due to their simplicity, modern speech technologies are frequently employed. Robots will soon play a bigger role in our everyday lives when they are deployed as digital assistants.Body-mounted DevicesBrain-machine interfaces will significantly increase human intellect if widely used. Numerous medical disorders, including addiction, paralysis, and myopia, could be healed if humans can master this method. Soon, we could be able to modify and improve ourselves via the use of implanted gadgets that might affect the fundamentals of human biology.One such idea is the monkey brain implant project being worked on by Elon Musk’s Neuralink. It will play a game of Pong as it thinks. Think about what our species might do if this technology was widely available.ConclusionAs a result of its widespread adoption and use in a variety of industries, such as healthcare, transportation, information technology, climate change, education, and the management of scarce resources, AI will fundamentally alter the digital world.Elon Musk, a well-known investor and entrepreneur, said that artificial intelligence is “much more hazardous than nuclear weapons” in an interview.This is shown by Tesla’s robotics research and development, which is carried out in the same buildings as the automobile assembly. to get rid of employees to standardize, simplify, and lower production costs without sacrificing quality.As a result, technological innovations and disruptions like driverless cars, virtual assistants, implantable, and medical precision reflect the possible future of artificial intelligence.$Microsoft(MSFT)$  $Alphabet(GOOG)$ Follow me to learn more about analysis!!
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    • Hard to investHard to invest
      ·02-08 11:00

      What to look in Powell’s speech and potential impact on the market

      Fed Chairman Powell clarified that "deflation" means "the beginning of lower inflation" and that the deflationary process has started but is still in the "very early stages" and may not be achieved until 2024. achieve the inflation reduction target. Although Powell also warned that if unexpectedly strong data such as employment and inflation continue to be available, it could cause peak interest rates to be higher than market expectations; the Fed would still need to continue to raise rates. But the market is nearing the end of the Fed's rate hikes, with U.S. stocks rising sharply and commodities shaking back up, especially for crude oil. Overall, whether the attitude of the Fed, or the domestic economic recovery is expected, the two logics have not changed significantly, only part of the industrial products on the expected hit too full, up too much, it is expected that industrial products will gradually turn into a width shock market to wait for the test of economic data. The two markets shake slightly, the trend is mild. Northward funds for 3 consecutive days to reduce positions, but the outflow is not large, with the yuan back to strength, is expected to gradually normalize the entry and exit of northward funds. For this wave of index rebound market, northbound funds have a great impact, with the index significantly repaired, the market pessimism has been significantly relieved. And from the perspective of valuation and corporate earnings, there is not much drive, so this wave of the index "repair" market, and the sentiment of the funds is very relevant, is expected to shake the probability of the index is still greater in the short term, is expected to be stronger in small and medium-sized index than the blue chip index. @MaverickTiger @CaptainTiger @TigerStars @MillionaireTiger 
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      What to look in Powell’s speech and potential impact on the market
    • Hard to investHard to invest
      ·02-08 00:11

      What to expect from Powell’s speech tonight

      Yesterday, Atlanta Fed President Raphael Bostic said he basically expects two more rate hikes to bring the terminal rate to 5.1%, which is consistent with last December's forecast, but if the economic data continues to be stronger than expected, he may support another 1 number of rate hikes on top of that, or even not rule out 2 numbers to bring the terminal rate above 5.6%! And Powell is going to speak, if he also so state that the Fed's March dot plot may again raise the terminal interest rate, then this will greatly change the optimistic expectations of the financial markets, and not only the stock market, even the housing market may continue to sluggish after a good stabilization. According to a simple and clear headline in the Wall Street Journal, the real estate market is showing signs of thawing! The main reason, of course, is that after reaching a high of 7% last November, 30-year fixed mortgage rates have now fallen a full 1% to 6%, and optimistic expectations of interest rates topping out have caused mortgage rates to plummet, thus stimulating the housing market. Related data: mortgage applications increased by 15%, refinancing increased by 50%, and pending home sales increased by 2.5% last December, which is usually a leading indicator of the housing market's thawing status. If the housing market thaws quickly, then it will be harder for inflation to return to the 2% target. However, if the Fed starts to make hawkish statements and the market takes them seriously enough, then it could cause mortgage rates to rise again and the housing thaw could become short-lived. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • Liang0020Liang0020
      ·02-07 14:52
      Let's look at Tesla production in China for what it is.Back in Sept 2022, they were making 82000 model 3/Ys a month. Then demand started slowing down due to competition. Inventories rose. Tesla cut back production and lowered prices. BYD deliveries outpaced all others including Tesla for the quarter and year. The government incentives ran out. Tesla still had inventory on its hands. They lowered prices again in January fearing further drop in demand due to competition, COVID spread, government incentives expiring and Chinese new year shutdown.In December they cut production about 30% through shortened work shifts and a 10 day Christmas shutdown.So production was drastically cut back.In January, Chinese car buyers who missed out on the govt incentives started considering not only Tesla but all Chinese car makers because they also cut their prices in a price war to grab customers. Also, some buyers wanted to buy before Chinese new year shutdowns.So there was a bump up in demand, but Tesla was still operating on scaled down production which they had extended from December.So orders of course would outpace production if production was at a crawl.Ramping up production over the next 2 months of the quarter to 80k per month is still less than what they had been producing last September. And they need to play catch up for the Chinese new year production.$Tesla Motors(TSLA)$  $NIO Inc.(NIO)$  $XPeng Inc.(XPEV)$  $Li Auto(LI)$
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    • breakoutsharesbreakoutshares
      ·02-07 13:52

      ASX Stocks| Thoughts on HRE, PR1& EMD

      $PR1 #PR1 looks like ASX might be slinging a few crabs at it now #ASXPR1#PR1 they threw mud back.  $Pure Resources Limited(PR1.AU)$ $HRE lets see where this closes #ASX  $Heavy Rare Earths Limited(HRE.AU)$ $EMD well done to the peeps that got back on this bus prior to legistive changes. #ASX  $Emyria Ltd(EMD.AU)$ Mine brain is scratching on why wouldn't inflation revert back to pre-covid times naturally .. some rate rises to moderate excess demand and fix supply chains.Follow me to learn more about analysis!!
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      ASX Stocks| Thoughts on HRE, PR1& EMD
    • Hard to investHard to invest
      ·02-07 13:51

      What else is haunting FED and market?

      Does the fact that the stock market has remained strong since 2023 mean that the risk of recession is reduced? Or is it because the Fed continues to maintain tightening policy (raising interest rates) even as inflation is moderating? Now that bank interest rates are not at a level that will bring the economy down enough to shift to a neutral (or accommodative) policy, and the U.S. economic news remains solid, the FED must continue to keep rates high to force credit crunch to the limit. The dilemma facing the governors is: when will inflation return to 2-3%, while interest payments as a percentage of total spending in the fiscal deficit is increasing (chart). In my view, the FED needs to carefully balance the needs of economic growth and inflation, and adjust policy appropriately to avoid the adverse effects of excessive tightening or easing on the economy. Personally, I think the current lending rate is either too high or too low, depending on which way you look at it. High interest rates have been questioned because long-term interest rates cannot be higher than the rate of inflation or the economy's GDP growth rate without affecting the U.S. government's ability to service its debt. However, if interest rates are too low, there is no telling when inflation will return to 2%, and the current narrative that the "cycle of interest rate increases is over" has not yet become a certainty. In this "dilemma" situation, there is no shocking event to give the Fed the reason to cut interest rates. Don't forget: the rate hike cycle is not quite over. The cycle could end at. First, let's consider the impact of U.S. deficit spending on the economy. Even though the U.S. has been in deficit for nearly 20 years, the likelihood of bankruptcy remains small. Therefore, I personally believe that a big drop in the dollar and a reversal of confidence in deficit spending is the least likely scenario. Second, a credit crisis with deteriorating creditworthiness is worrisome, and the problems caused by the rapid rise in interest rates in 2022 are surfacing in 2023, causing banks to refuse to lend. While last year's high-growth equity ARKK, cryptocurrency, SPAC and meme stocks have collapsed, they have not yet turned into a widespread credit crisis, but 2023 will require vigilance. Therefore, the crisis is still moderately likely. Third, a further stock market collapse as corporate earnings per share problems emerge during the recession, which is the most likely of the three. I think the Fed needs a stronger reason than slowing inflation to cut interest rates, and the simplest reason is that the stock market keeps falling. In fact, the Fed and investors in the market want to cut interest rates as soon as possible, because this will reduce the interest payments on the national debt, maintaining the solvency of the Treasury. Even though the market has had upward momentum in stocks in recent years, I still don't plan to put a lot of new money into the stock market today because as long as the Fed doesn't cut interest rates, the stock market won't see meaningful growth. However, if the stock market doesn't fall, the Fed won't cut rates either! This cycle continues to haunt us as investors. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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      What else is haunting FED and market?
    • Hard to investHard to invest
      ·02-06

      My macro view

      More and more people are seeing that the US economy will not crash but will have a "Golden Girl" economy, which is a long-term bullish signal that many investors love. The "Golden Girl" economy means low inflation and continued growth, in this situation the central bank will not have reason to take more aggressive policies to fight the economy but will choose looser policies to extend the expansion as much as possible, and the stock market will also show a bullish trend. However, it's worth noting that a rising market prices the return of the "Golden Girl" but if inflation remains sticky, it means there's limited possibility for inflation to slow down. In this case, to further curb inflation, the Fed will have to keep higher interest rates, the "Golden Girl" economy will gradually become distant and the stock market will show a corresponding trend. So although most people are bullish about the market, I think there is still room for growth in the short term. Rational analysis of economic conditions is very important as it is closely linked to future investment strategies. Otherwise, if you don't rationally interpret any data, ignore risks and bet a lot of money, you will eventually pay the price for this unwise decision. So is the US job market performing well and the soft landing is settled? Will the market continue to ignore hawkish messages from the Fed and become a major risk in the future? What is the low-risk high-return investment strategy then? @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • SPDJISPDJI
      ·02-06

      S&P 500 Impact Analysis+Top 10 stocks of Each Sector

      On Dec. 15, 2022, S&P Dow Jones Indices and MSCI jointly announced a full list of companies affected by the upcoming revisions to the Global Industry Classification Standard (GICS) structure. Exhibit 1 shows an overview of the expected impact on various U.S. equity indices. The “intra” changes refer to the reclassification of stocks within a sector, while the “inter” changes correspond to stocks being moved from their current sector to another under the new GICS structure. These U.S. equity indices have more intra than inter changes in this reorganization.Exhibit 2 provides more detail on theS&P 500, showing that 6 of the 11 S&P 500 sectors will be affected by the upcoming GICS changes. Real Estate accounts for the vast majority of intra changes, reflecting the sector’s additional granularity in the upcoming restructuring. Hence, 17 stocks will be reclassified within the Real Estate sector, making up 60% of the sector market weight post-changes. Most changes will come from the current Specialized REITs and Residential REITs categories, which will be placed into more specific categories.Exhibit 3 demonstrates how the impacted stocks are set to move between sectors. The current GICS sector is on the vertical axis, and the GICS sectors under the new structure on the horizontal axis. The boxes on the diagonal represent intra changes. For example, out of the 11 stocks leaving the Information Technology sector, three of them are moving into the Industrials sector and eight into the Financials sector.The key driver behind the inter changes of the Information Technology sector is the discontinuation of the Data Processing & Outsourced Services sub-industry. Companies will be reclassified to Financials and Industrials sectors to better align with their business support activities. For instance, all eight stocks that are set to join the Financials sector— including $Visa(V)$ and $MasterCard(MA)$ —will be classified under the newly created Transaction and Payment Processing sub-industry. Likewise, all three stocks joining the Industrials sector will go to the Human Resources & Employment Services sub-industry with its updated definition.Changes to the Consumer Discretionary and Consumer Staples sectors indicate that retailers will be classified based on the nature of goods sold. For instance, $Amazon.com(AMZN)$ , being the largest affected stock in the $S&P 500(.SPX)$ , will be reclassified within the Consumer Discretionary sector, from a discontinued Internet & Direct Marketing Retail sub-industry to a newly created Broadline Retail sub-industry.Exhibit 4 shows how the upcoming GICS changes are set to affect the largest 10 stocks in the impacted sectors, based on the data as of Dec. 30, 2022. Target Corp will move from Consumer Discretionary to Consumer Staples, displacing $Estee Lauder(EL)$ from the largest 10 corporations in the Consumer Staples sector, while Visa and Mastercard will move from Information Technology to Financials.Other than the major changes described above, the March GICS changes also include updates to Transportation, Banks and Thrifts & Mortgage Finance, which are more prevalent in smaller caps. The analysis on the flagship S&P 500 shows how other U.S. equity indices can be similarly assessed by the upcoming GICS changes.The posts on this blog are opinions, not advice. Please read ourDisclaimers.Source:https://www.indexologyblog.com/2023/02/03/2023-gics-changes-sp-500-impact-analysis/
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    • ShanoskyShanosky
      ·02-06

      Why The Unemployment Rate Doesn’t Matter

      Finding a better way to tell a storySome red herrings.Created by DeepAI.Did you know? We’re currently experiencing the best economy of the last 50 years, at least in America. The same goes for Canada and the UK, too. Why? The unemployment rate, of course!See, I recently wrote a piece about how we’re already in something of a recession in many ways. It was mostly well-received here but, as is typical, social media had a different opinion. Put simply, with the unemployment rate as low as it is, the economy can’t be nearly as bad as I was describing. Well… as Julius in Pulp Fiction would say, allow me to retort.Unemployment, like nearly all of our metrics, has some serious flaws. Unlike most metrics, its flaws are severe and obvious. The reason why I — as a research-heavy writer whose articles typically contain a lot of links to sources — generally avoid discussing unemployment is that I feel the figure is useless. Worse than most, better than few. There’s rarely a situation where the point I’m illustrating is best supported by the unemployment rate. There’s always something better.So I figured I’d take a look at this particular metric across the globe and give my case for why I don’t use it. You may agree, and you may not. Either is fine. But if you’re going to continue citing that figure, it’s best to understand its flaws and limitations. While the figure does provide some insight, it isn’t nearly strong enough to be a barometer for the whole economy. We’ll look at why.SatisfactionFirst, we’ll look at the unemployment rate in the most basic of contexts: its ability to measure actual employment. And it does that…somewhat well.Relying on the unemployment rate to give a full picture of the labor market is a bit like using only temperature to determine whether a meal is good. It might offer a quick way to tell if the condition is bad, but it doesn’t allow you to guarantee that things are good.For example, unlike alternative measures like the U6 rate, the traditional unemployment rate doesn’t factor in those who have given up on finding work entirely or have been looking for more than 27 weeks. This is a lot like issuing a car satisfaction survey but excluding people with transmission or engine problems. Sure, they may be a small number, but excluding the worst results won’t paint a fully accurate picture.Photo byrussn_fckronUnsplashPerhaps more importantly, the unemployment rate leaves no room for nuance or detail. If I’m a senior accounting manager, get laid off, and take a job at Arby’s for $13.50 an hour, I can no longer pay my bills, get dental work done, see a doctor, etc. My opinion about the direction of my life is likely to be negative. My impact on the unemployment rate? Nil. I went from fully employed to fully employed. No difference.You have to dig into the actual reports to find the information you really need, and even those often fall short if you’re trying to put together some accurate information. The number of items lumped into the Bureau of Labor Statistic’s definition of “professional and business services” is insane, as an example. So when you look at the unemployment number and dig a little further to see where these figures are coming from, you inevitably get disappointing results.This latest jobs report, like all of those before it, shows hospitality, tourism, and leisure leading the job gains while “information,” utilities, and the auto industry all saw job losses. Hospitality has been adding enough jobs month-over-month for two years now to almost single handedly keep that unemployment rate low. But if we’re losing $85,000 jobs and gaining $28,000 jobs, are we actually heading in the right direction?Relying only (and lazily) on the unemployment rate means dismissing these other concerns. Sometimes, all trends are positive or negative, and the unemployment rate will accidentally give you the right idea of the direction the economy is heading. Other times, one basket of information tells one story and the unemployment rate tells another. That’s when you need to do more research.MacroNow we get to the real meat of the matter, which is using the unemployment rate as a primary (or only) barometer for the health of a nation’s economy. It is in this area that I find it to be almost completely useless. While I concede it does give some indication of current employment levels, I don’t think it really represents anything of value when it comes to how the population is faring or living anymore.The same goes for pretty much any “average” figure — average earnings, average housing cost, average car payment, etc. Averages are only useful if they aren’t being skewed heavily by one subset of the population.Since wealth disparity has been increasing in much of the developed world, averages become less and less useful each year.Photo byDan Cristian PădurețonUnsplashFor those curious, our current disparities put ussomewhere between Iran and Kenya when it comes to wealth distribution, so let’s just throw those average figures out entirely along with the unemployment rate. Another useless barometer is the stock market, largely for the same reason — gains there tend to be heavily concentrated in a small section of the population.Obviously, a large unemployed population doesn’t make for a good economy. But a fully employed (by our definition) population doesn’t guarantee one, either. For that, we need to look at trends and other statistics.The first is the financial health of all the individuals in the economy, and the unemployment rate doesn’t do a thing for that. First of all,about 38% of the populationin the United States and 35% of Canadians aren’t even in the workforce anymore, so focusing on the unemployment rates excludes at least a third of the population immediately.For these people — more likely than others to be on fixed-income payments or relying on other finite, limited resources — one of the biggest factors would be inflation, given it has a direct impact on the value of their recurring payments. Costs of the big ticket items (like housing and transportation) would be paramount. Those figureshave been rising dramaticallyeven as the unemployment rate falls. Redfin’s real estate price chartlooks like someone is trying to draw a mountain.Another good way to measure this is using the “real” (inflation-adjusted)medianhousehold income, which has been declining since 2019 even as unemployment fell all along the way. That means at least half the country (and likely much more) can afford less and less each year. If everyone’s working consistently but their lifestyle gets worse each year, is that a thriving economy?As we discussed earlier, another option is to look at where the job gains and losses are coming from and see if that gives any information. Right now, the losses are coming from the overcharged tech economy that emerged amid the pandemic. Unfortunately, Google, Meta, Snapchat, Twitter, and others, all of which have had layoffs recently, tend to be higher-paying companies. The job gains in housekeepers and front desk agents are not a one-to-one replacement for those losses.Then we have tertiary economic indicators, like whether consumer spending will continue (leading to company profits and growth), price indexes, and other items. Well, consumer sentiment ishovering near 40-year lows after hitting anall-timelow in 2022. We know what prices are doing. Some folks like using theretail sales figure, which is still quite strong, but has dropped for the last three months.Photo byViktor BystrovonUnsplashIf we’re really interested in our world economy or those of our individual nations,thattype of data is the bare minimum for what we should be looking at. Not “unemployment and done”.Parting thoughtsI don’t really like to get that wonky on economics items in my articles. I usually just try to set a fairly large scope, do the research myself, and give just enough detail and sources to set the general sentiment while discussing a topic. This way, any given piece is not — to quote West Wing — groaning underneath the weight of statistics.Once in a while, though, it can be helpful to look at a broader set of information to better explain our positions. Our economy has seen a lot of nominal growth in recent years, but very little of it has reached the majority of the population. Further, while our top-line indicators remain strong in some areas, there’s no question that the majority of them are trending in thewrongdirection.So yes, unemployment is low. We can take some solace in that, I suppose. Just don’t give it any more credit than it is worth.$SPDR S&P 500 ETF Trust(SPY)$  $DJIA(.DJI)$  $NASDAQ(.IXIC)$ Follow me to learn more about analysis!!
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    • TechnicalHunterTechnicalHunter
      ·02-06

      Bullish Divergences, Keep an Eye on the Dollar

      Mega cap tech earnings are complete. $Tesla Motors(TSLA)$$Apple(AAPL)$ ,$Alphabet(GOOGL)$ ,$Microsoft(MSFT)$ ,$Netflix(NFLX)$ ,$Amazon.com(AMZN)$ ,$Meta Platforms, Inc.(META)$ What happened to forward expectations?The table above outlines Consensus estimate revisions for the next year in response to 4Q results (NTM = next twelve months).Macro Situations Rcently :*U.S Mkt Technicals: Bullish *Macro: Bearish*Earnings Fundamentals: Bearish*Real Economy for Middle Class: Bearish*U.S Housing: Bearish*U.S-China Relationship: Bearish Bullish divergences & key indicator to watch this week*The US Dollar’s $USD Index(USDindex.FOREX)$ influence on stocks, bonds and commodities*An impending favorable seasonal window*It might be a good time to keep an eye on the buck…
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    • TigerObserverTigerObserver
      ·02-05

      Weekly: Best January Market in 4 years, 85% Probability of Further Increase?

      For the first time in four years, the $S&P 500(.SPX)$ posted a positive result in January, as the index rallied to a 6.2% gain for the month. At the height of quarterly earnings season, the $NASDAQ(.IXIC)$ posted its fifth weekly gain in a row, lifted by strong results from selected technology stocks. The $S&P 500(.SPX)$ posted a more modest gain; the $DJIA(.DJI)$ fell slightly.As of last Friday, the$Straits Times Index(STI.SI)$ gained 1.6% last week and$S&P/ASX 200(XJO.AU)$ dropped 0.29% last week.As goes January, so goes the year?The latest week’s stock market performance extended this year’s sharp divergence. For the week, the $NASDAQ(.IXIC)$ was up 3.3% while the $DJIA(.DJI)$ was down 0.2%. Year to date through Friday, the $NASDAQ(.IXIC)$ was up nearly 14.8% compared with the $DJIA(.DJI)$ ’s 2.4% gain.Sam Stovall, chief market strategist at CFRA, said:"Since World War II, if the market has risen in January, it has continued to rise more than 85 percent of the time in the remaining 11 months of the year, with an average gain of about 11.5 percent. Thus, the Stock Trader's Almanac "The old saying: 'as goes January, so goes the year' is true."Since World War II, the $S&P 500(.SPX)$ has averaged an annual gain of about 9%, according to historical records. But Stovall noted that whenever the $S&P 500(.SPX)$ fell in the previous year, the $S&P 500(.SPX)$ usually rebounded sharply in the following year, with an average gain of 14% - and this also matches the current situation: The $S&P 500(.SPX)$ lost a whopping 19.44% last year.Sectors & Stocks Performances ReviewAcross the $S&P 500(.SPX)$ , consumer discretionary and communication services were the top-performing sectors in Janaury, as they added 15% and 14%, respectively; utilities and healthcare were the weakest, with both falling around 2.0%.Weekly Top Gainers of $S&P 500(.SPX)$$Align Technology(ALGN)$ ,$W.W. Grainger(GWW)$ ,$Gap(GPS)$, $Pentair PLC(PNR)$ ,$A.O. Smith(AOS)$ ,$Advanced Micro Devices(AMD)$ ,$CarMax(KMX)$ ,$FedEx(FDX)$ ,$PulteGroup(PHM)$$Stryker(SYK)$ Macro FactorsMonetary moves: As expected, the U.S. FED lifted its benchmark rate by a 25 points—smaller than the 50 points hike approved in November—while acknowledging that inflation has recently eased. Jobs bonanza: Last Friday’s monthly labor report sharply exceeded economists’ expectations, as the economy added 517,000 jobs in January—the most since last July. The unemployment rate slipped to 3.4%, the lowest since 1969.Mixed earnings results: Halfway through earnings season, the proportion of $S&P 500(.SPX)$ companies that have beaten analysts’ earnings expectations remained slightly smaller than usual. About 70% had exceeded net income expectations as of Friday, trailing the five-year average of 77%. Overall, earnings are expected to decline about 5% relative to a year ago.Bond volatility: The yield of the 10-year U.S. Treasury bond was little changed overall for the week at around 3.53%, but that flat result wasn’t indicative of its volatility.Oil slump: The price of U.S. crude oil $Light Crude Oil - main 2303(CLmain)$ fell nearly 8% for the week to around $73 per barrel—the lowest level in about a month. An increase in U.S. crude supplies was among the factors that weighed on oil prices.The Week Ahead: February 6-10Notable Earnings to Watch: $Activision Blizzard(ATVI)$ ,$Take-Two(TTWO)$ ,$BP PLC(BP)$ ,$Uber(UBER)$ ,$Walt Disney(DIS)$ ,$Pepsi(PEP)$ ,$Lyft, Inc.(LYFT)$ Key events this Week:MondayNo major reports scheduledTuesdayConsumer credit, U.S. Federal ReserveTrade balance, U.S. Census BureauWednesdayWholesale inventories, U.S. Census BureauThursdayFactory orders, U.S. Census BureauWeekly unemployment claims, U.S. Department of LaborFridayUniversity of Michigan Index of Consumer Sentiment, preliminary resultFederal budget, U.S. Department of the Treasury​​​How is your trading plan in this week?Any special focus?Please join the the Daily Discussion with Tigers​​
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      Weekly: Best January Market in 4 years, 85% Probability of Further Increase?
    • LCapitaljrLCapitaljr
      ·02-05

      Macro-Markets| Thoughts on Major Stock Markets

       $HSI(HSI)$  $S&P 500(.SPX)$  $NASDAQ 100(NDX)$  $HSI(HSI)$  $Straits Times Index(STI.SI)$ Trade What You See, Not What You ThinkThe key is to consistently trade only what you see and not what you think or feel, this will help to keep you from giving into the emotions of revenge or greed after a losing or winning trade.Follow me to learn more about analysis!!
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    • DiegoM1DiegoM1
      ·02-05

      US Market| Thoughts on US Bonds

      Uk bonds has showed a good trend up.. from a long term trend down.... time to improve... up. $Micro 10-Year Yield - main 2302(10Ymain)$ $Micro 5-Year Yield - main 2302(5YYmain)$ $Micro 30-Year Yield - main 2302(30Ymain)$ GBP breaks its trend showing a correction on way.. for moment its short! $GBP/USD(GBPUSD.FOREX)$ Follow me to learn more about analysis!!
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    • lithium_guylithium_guy
      ·02-05

      ASX Stocks| The Big Chance for Lithium Market

      New Nasdaq Sprott Lithium Miners ETF. Strong weighting to #ASX $PLS $AKE $IGO producers. Pre producers $LTR $CXO in equal weighting. Some big #lithium names in this list, interesting weighting from a financial institution. High exposure to Li market rates.$Pilbara Minerals Ltd(PLS.AU)$  $Allkem Limited(AKE.AU)$  $IGO Ltd(IGO.AU)$  $Liontown Resources Ltd(LTR.AU)$  $Core Exploration Ltd(CXO.AU)$ Follow me to learn more about analysis!!
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    • SPDJISPDJI
      ·02-03

      U.S. Equities Market Attributes: So Goes January, So Goes the Year

      Key Highlights- The $S&P 500(.SPX)$ was up 6.18% in January, bringing its one-year return to -9.72%.- The $DJIA(.DJI)$ gained 2.83% for the month and was down 2.98% for the one-year period.- TheS&P MidCap 400increased 9.14% for the month, bringing its one-year return to 0.65%.- The S&P Small Cap 600 was up 9.40% in January and had a one-year return of -2.53%.Howard SilverblattBy Howard Silverblatt,  Senior Index Analyst, Product Management, Click to read Full article.Market SnapshotThis month's Q4 2022 earnings releases demonstrated that following the money (starting with earnings and then cash flow) always seems right, especially if you are paying bills (payroll, CapEx, dividends and buybacks). While the actual Q4 bottom-line results weren't good, they weren't as bad as some feared; the quarter is expected to end 2.7% above Q3 2022 (which would still be down 8.8% from the record Q4 2021, when the $S&P 500(.SPX)$ closed the year at 4,766). The actual top-line results (sales) showed a slowing of the ability of companies to pass along higher costs (with some extra profit included), as sales for the quarter are expected to be a tick higher (0.9%) than the record Q3 2022 (when consumers were willing to pay more, or "revenge spending" as it's now labeled).Along with the relatively decent numbers were numerous warnings from CEOs of harder times, squeezed margins (which at 11.48% for Q4 2022 remain significantly higher than the historical 8.29% average since 1993) and consumer pullbacks. Joining CEO commentaries was the lack of long-term pessimism and the belief that they could pull through the current downturn, all of which has pushed the market into the belief of two more FOMC increases of 0.25% each, even as U.S. Fed comments remain a bit more hawkish. The resulting belief was that the sun will come out (in the second half), as the $S&P 500(.SPX)$ posted its first January gain after three years of declines (up 6.18% this January, compared with -5.26% for January 2022, -1.11% for 2021 and -0.16% for 2020). And a happy January tends to make for a happy year, as "so goes January, so goes the year" has historically been correct 71% of the time.While Santa Claus didn't show up for Christmas, the benevolent being did make a welcome appearance in January, as the $S&P 500(.SPX)$ closed at 4,076.60, up 6.18% (6.28% with dividends) from last month's close of 3,839.50, when it was down 5.90% (-5.76%) from November's close of 4,080.11 (5.38%, 5.59%), and October's close of 3,871.98 (7.79%, 8.10%). It was the first January gain after three years of January declines. While the start (and January barometer indicator) was appreciated, the index still had a long way to go to make up for last year's decline. The three-month period posted a gain of 5.28% (5.76%), while the one-year return was -9.72% (-8.22%), the 2022 return was -19.44% (-18.11%). The $DJIA(.DJI)$ ended the month at 34,086.04, up 2.83% (2.93% with dividends) from last month's close of 33,203.93, when it was down 4.17% (-4.09%) from November's close of 34,589.77, when it was up 5.67% (6.04%). The $DJIA(.DJI)$ was down 7.37% from its Jan. 4, 2022, closing high (of 36,799.65). The three-month return was 4.13% (4.68%) (2022 return was -8.78%; -6.86%), while the one-year return was -2.98% (-0.92%).For January, 8 of the 11 $S&P 500(.SPX)$ sectors were up (compared with December 2022, when all 11 declined), with Consumer Discretionary doing the best, up 14.99% (after last year's 37.58% decline), and Utilities doing the worst, down 2.04% (after 2022's mild 1.44% decline). On an aggregate basis, the $S&P 500(.SPX)$ increased USD 1.981 trillion (to USD 34.114 trillion) for the month, while it declined USD 8.224 trillion for 2022. It was up USD 6.050 trillion from the Feb. 19, 2020, start of the COVID-19 pandemic.For Q4 2022, 170 issues have reported (44.4% of the market value), with 119 (70.0%) of them beating on earnings and 107 of 169 (63.3%) beating on sales. For Q4 2022, earnings are expected to post a 2.7% gain over Q3 2022 and be down 8.8% over Q4 2021. Sales were expected to be up a tick (0.9%) from the record Q3 2022 level (and potentially set a new record) and up 6.5% over Q4 2022. Operating margins for Q4 2022 were expected to be 11.48%, up from 11.28% in Q3 2022 (the average since 1993 was 8.29%, and the record is 13.54% in Q2 2021). Significant EPS impact due to share count reduction for Q4 2022 was posted by 21.40% of the issues, compared with Q3 2021's 21.24%, 14.89% in Q4 2021 and Q4 2020's COVID-19-inspired 6.01%. For fiscal-year 2022, earnings are expected to decline 4.8%, with a P/E of 20.6. For 2023, estimates call for a 11.9% increase, as the forward P/E is 18.4.
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    • Liang0020Liang0020
      ·02-03
      This pullback is a great opportunity to add more shares in a company that continues to gain popularity (aka market share) both in China and the US. IMHOGet ready for another bull rally in China stocks and China. China reconnects with the world, covid as peak, economy is restoring, continues to supply badly needed supply chain to the world. Now its CNY after which when investors are coming in after the new year the bull will be on full rage. Hold onto your China stocks, there won't be another price like this for quite a long time. $Pinduoduo Inc.(PDD)$ $JD.com(JD)$  $Alibaba(BABA)$
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    • Hard to investHard to invest
      ·02-02

      What is next after FOMC and how Powell react

      I think this time the Fed raised interest rates by 25 basis points and the federal funds rate rose to 4.5~4.75%, in line with market expectations. The monetary policy statement acknowledges that inflation has slowed down, and Powell's conference was "dovish", with softer views on inflation, wages and financial conditions than before. However, the Fed needs to find a balance between the three objectives of anti-inflation, stable growth and risk prevention, so it will be more careful in the number of rate hikes afterwards. The matter of the past violent rate hikes have caused the economy to slow down or even the risk of recession. And Fed Chairman Jerome Powell is being carried away by the market and is now accepting market views. Although the Fed ultimately to combat inflation as the goal before raising interest rates, but if the economy is in recession will also lead to corporate profits suffered, which will lead to a reduction in tax revenue. The Fed also has vested interests, and a recession will affect their profits. So I think the Fed will "watch and react" and raise interest rates twice more, each time by 25 pips. About once in March and once in May to complete the whole cycle of interest rate hikes. I hope the economy is recovering faster than the interest rate, I believe this is what the Fed wants to see. As for the market and policy making, the Fed analyzes three dimensions of inflation: commodity inflation, rent, and service inflation excluding rent. In the labor market, the decline in inflation has not been accompanied by an increase in the unemployment rate, which has made the Fed more cautious. On the monetary policy front, despite the Fed's emphasis on raising interest rates since the last meeting, financial conditions in the market have instead eased. The market deviated from the Fed's forward guidance on the path of interest rate hikes, and Powell responded in a relatively moderate manner, saying that the low interest rates counted in the market were due to market expectations that inflation would move down more rapidly, but did not forcefully "push back" against such expectations. In the end, Powell still insisted that the Fed would not cut interest rates in 2023. The purpose is to allow the economy to recover in the post-epidemic period, so that interest rates remain unchanged and inflation is reduced to 2%, and the Fed will have achieved its mission. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • Dimitrios_1963Dimitrios_1963
      ·02-02

      US Markets| FOMC Raised Benchmark Rate Again

      The FOMC, raised its benchmark rate to a range of 4.5% to 4.75% from 4.25% to 4.5% previously.US markets are extremely volatile as investors take positions.$S&P 500(.SPX)$  $DJIA(.DJI)$  $NASDAQ(.IXIC)$
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      US Markets| FOMC Raised Benchmark Rate Again
    • SPDJISPDJI
      ·02-02

      Janaury Asia Dashboard: Blue Chips Outperforming Mid & Small Caps

      The $S&P 500(.SPX)$ Pan Asia BMI had its best start to the year since 2012 with blue chips outperforming mid and small caps.  13 of 14 S&P Pan Asia BMI regions contributed positively to the regional benchmark's returns, with India the sole exception.  All of our reported Asian government bond indices gained, with iBoxx ALBI performing best.Summary • The S&P Pan Asia BMI had its best start to the year since 2012, up 7.3% in January. Mid and small caps lagged blue-chips, with the S&P Pan Asia MidCap and the S&P Pan Asia SmallCap clocking up gains of 5.8% and 6.5%, respectively.• 13 of 14 S&P Pan Asia BMI regions contributed positively to the benchmark’s returns, with China's contribution the most pronouned at 2.1% while laggard India subtracted 0.3%.• All but one pan-Asia GICS® sectors finished the month in positive territory, with Information Technology, up 12.0% edging out Communication Services, up 10.5%, for the top spot. Utilities, the sole laggard, shed 1.0%.• All our reported factors started the year on the front foot, with best performing Quality surging 8.8% in January. Even worst performing Momentum gained a respectable 2.2%.• All of our reported Asian government bond indices gained, with iBoxx ALBI performing best, up 4.5%.• Reflecting the relative calm in equity markets, the HSI Volatility Index dropped 4 points to finish the month at 25.Source: https://on.spdji.com/rs/838-LDP-483/images/dashboard-asia-2023-01.pdf?mkt_tok=ODM4LUxEUC00ODMAAAGJrEDjKzS22eoGeyBDJ73dS9O-cvkNwtI_tMzBAVfhgyPxXtEY2qPZrkd91Z0zDbPnSDQYeNPrJ-Wxrgn-7qIPTHK00SdMJMNPU5L2XwOS9JUh
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    • Hard to investHard to invest
      ·02-02

      My view after FOMC meeting

      The Federal Reserve announced a 25 basis point increase in interest rates, bringing the benchmark rate to a range of 4.5% to 4.75%, in line with market expectations, but the focus was on the content of Powell's press conference remarks, with highlights including. * Expected to raise rates two more times to keep rates at restrictive levels, will update its assessment of the path of rate increases in March, and the terminal rate is expected to remain above or below 5%, with no rate cuts this year. * This is the first time I think: "anti-inflation has begun. (that the disinflationary process has started) * The optimistic view is that the US inflation rate can fall back to 2% and there will not be a really serious recession, nor will it lead to a significant increase in the unemployment rate, releasing signals of an expected "soft landing" of the US economy. What is surprising this time is that against the backdrop of a major rebound in U.S. stocks, Powell has not chosen to be on the hawkish side, but instead has released a more optimistic view of the economy and inflation decline, which has led the market to wonder if the Federal Reserve is already preparing to stop raising or even lowering interest rates. But as investors, we still have to pay attention to the economy will continue to be affected by the lag of interest rate increases, including the technology industry continues to massive layoffs, retail sales data decline, manufacturing data decline, the company lowered its earnings guidance; in addition, with the unsealing of China, copper prices, oil prices have risen significantly, may also be involved in the market on the re-emergence of inflationary worries. The bull market restart before the "first squat then jump", in the end will not squat? Or will the first run short to the air force surrender? This can only be observed as we go, but I will choose to continue to adjust to the action of the high. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • PortfolioHubPortfolioHub
      ·13:43

      The Future of Artificial Intelligence

      Unquestionably, the field of artificial intelligence will be crucial to the advancement of various cutting-edge technologies during the next decades. Robotics, big data, and the Internet of Things are all included in this field. In the next years, it will still be a technology pathfinder.Photo byPossessed PhotographyonUnsplashArtificial intelligence has entered the real world surprisingly swiftly after first appearing in science fiction movies. Intelligent machines are no longer only a recurring theme in science fiction; they are starting to appear in real life as well. Nowadays, artificial intelligence is a serious possibility.Growth and Improvement of Artificial IntelligenceBy 2028, the worldwide artificial intelligence market will be worth $640 billion, predicts Fortune Insights (2020). According to a 2019 poll conducted by Gartner CIO, the use of artificial intelligence in businesses has surged by 270% over the previous four years.According to McKinsey’s (2019) worldwide AI study, 44% of firms have seen material cost reductions as a result of using AI. Over 90% of the most successful companies in the world are investing in artificial intelligence systems and technology, according to a NewVantage study (2021).Artificial Intelligence ContributionsThe following areas will soon be investigated by AI, according to experts.Medical Care and HealthcareArtificial intelligence is being used by researchers to better understand how a person’s genes, environment, and lifestyle choices may affect their capacity to prevent or cure illness (AI). Treatments are improving in accessibility, affordability, and efficacy, which raises the quality of life and lengthens lifespans for people. These changes may be partly explained by advancements in tailored medication, sophisticated diagnostics, and digital pharmaceuticals.AI may aid future developments in the field of medicine and healthcare. The various advantages it offers, such as the use of convolutional neural networks in medicine, are a major driving force.Unmanned VehiclesModern automobiles will be considerably better than humans in these areas since deep learning is most successful when used for tasks requiring pattern identification. According to an IEEE Spectrum projection for 2035, driverless cars would account for 70% of all kilometers traveled globally.As more people utilize autonomous cars, the number of accidents brought on by human mistakes will decrease. The number of people killed in vehicle accidents is predicted to decline significantly.As an example, the Tesla Autopilot technology is often regarded as the pinnacle of automotive innovation. Thanks to a total of eight powerful cameras and superior image processing, this vehicle can operate independently up to a distance of 250 meters. The same is true for the vehicle’s ability to accelerate, brake, steer, and change lanes.Virtual AssistantsArtificial intelligence (AI)-powered virtual assistants like Siri and Alexa, as well as other NLP-based systems, are often used to understand and complete tasks given by people. Due to their simplicity, modern speech technologies are frequently employed. Robots will soon play a bigger role in our everyday lives when they are deployed as digital assistants.Body-mounted DevicesBrain-machine interfaces will significantly increase human intellect if widely used. Numerous medical disorders, including addiction, paralysis, and myopia, could be healed if humans can master this method. Soon, we could be able to modify and improve ourselves via the use of implanted gadgets that might affect the fundamentals of human biology.One such idea is the monkey brain implant project being worked on by Elon Musk’s Neuralink. It will play a game of Pong as it thinks. Think about what our species might do if this technology was widely available.ConclusionAs a result of its widespread adoption and use in a variety of industries, such as healthcare, transportation, information technology, climate change, education, and the management of scarce resources, AI will fundamentally alter the digital world.Elon Musk, a well-known investor and entrepreneur, said that artificial intelligence is “much more hazardous than nuclear weapons” in an interview.This is shown by Tesla’s robotics research and development, which is carried out in the same buildings as the automobile assembly. to get rid of employees to standardize, simplify, and lower production costs without sacrificing quality.As a result, technological innovations and disruptions like driverless cars, virtual assistants, implantable, and medical precision reflect the possible future of artificial intelligence.$Microsoft(MSFT)$  $Alphabet(GOOG)$ Follow me to learn more about analysis!!
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    • ShanoskyShanosky
      ·02-06

      Why The Unemployment Rate Doesn’t Matter

      Finding a better way to tell a storySome red herrings.Created by DeepAI.Did you know? We’re currently experiencing the best economy of the last 50 years, at least in America. The same goes for Canada and the UK, too. Why? The unemployment rate, of course!See, I recently wrote a piece about how we’re already in something of a recession in many ways. It was mostly well-received here but, as is typical, social media had a different opinion. Put simply, with the unemployment rate as low as it is, the economy can’t be nearly as bad as I was describing. Well… as Julius in Pulp Fiction would say, allow me to retort.Unemployment, like nearly all of our metrics, has some serious flaws. Unlike most metrics, its flaws are severe and obvious. The reason why I — as a research-heavy writer whose articles typically contain a lot of links to sources — generally avoid discussing unemployment is that I feel the figure is useless. Worse than most, better than few. There’s rarely a situation where the point I’m illustrating is best supported by the unemployment rate. There’s always something better.So I figured I’d take a look at this particular metric across the globe and give my case for why I don’t use it. You may agree, and you may not. Either is fine. But if you’re going to continue citing that figure, it’s best to understand its flaws and limitations. While the figure does provide some insight, it isn’t nearly strong enough to be a barometer for the whole economy. We’ll look at why.SatisfactionFirst, we’ll look at the unemployment rate in the most basic of contexts: its ability to measure actual employment. And it does that…somewhat well.Relying on the unemployment rate to give a full picture of the labor market is a bit like using only temperature to determine whether a meal is good. It might offer a quick way to tell if the condition is bad, but it doesn’t allow you to guarantee that things are good.For example, unlike alternative measures like the U6 rate, the traditional unemployment rate doesn’t factor in those who have given up on finding work entirely or have been looking for more than 27 weeks. This is a lot like issuing a car satisfaction survey but excluding people with transmission or engine problems. Sure, they may be a small number, but excluding the worst results won’t paint a fully accurate picture.Photo byrussn_fckronUnsplashPerhaps more importantly, the unemployment rate leaves no room for nuance or detail. If I’m a senior accounting manager, get laid off, and take a job at Arby’s for $13.50 an hour, I can no longer pay my bills, get dental work done, see a doctor, etc. My opinion about the direction of my life is likely to be negative. My impact on the unemployment rate? Nil. I went from fully employed to fully employed. No difference.You have to dig into the actual reports to find the information you really need, and even those often fall short if you’re trying to put together some accurate information. The number of items lumped into the Bureau of Labor Statistic’s definition of “professional and business services” is insane, as an example. So when you look at the unemployment number and dig a little further to see where these figures are coming from, you inevitably get disappointing results.This latest jobs report, like all of those before it, shows hospitality, tourism, and leisure leading the job gains while “information,” utilities, and the auto industry all saw job losses. Hospitality has been adding enough jobs month-over-month for two years now to almost single handedly keep that unemployment rate low. But if we’re losing $85,000 jobs and gaining $28,000 jobs, are we actually heading in the right direction?Relying only (and lazily) on the unemployment rate means dismissing these other concerns. Sometimes, all trends are positive or negative, and the unemployment rate will accidentally give you the right idea of the direction the economy is heading. Other times, one basket of information tells one story and the unemployment rate tells another. That’s when you need to do more research.MacroNow we get to the real meat of the matter, which is using the unemployment rate as a primary (or only) barometer for the health of a nation’s economy. It is in this area that I find it to be almost completely useless. While I concede it does give some indication of current employment levels, I don’t think it really represents anything of value when it comes to how the population is faring or living anymore.The same goes for pretty much any “average” figure — average earnings, average housing cost, average car payment, etc. Averages are only useful if they aren’t being skewed heavily by one subset of the population.Since wealth disparity has been increasing in much of the developed world, averages become less and less useful each year.Photo byDan Cristian PădurețonUnsplashFor those curious, our current disparities put ussomewhere between Iran and Kenya when it comes to wealth distribution, so let’s just throw those average figures out entirely along with the unemployment rate. Another useless barometer is the stock market, largely for the same reason — gains there tend to be heavily concentrated in a small section of the population.Obviously, a large unemployed population doesn’t make for a good economy. But a fully employed (by our definition) population doesn’t guarantee one, either. For that, we need to look at trends and other statistics.The first is the financial health of all the individuals in the economy, and the unemployment rate doesn’t do a thing for that. First of all,about 38% of the populationin the United States and 35% of Canadians aren’t even in the workforce anymore, so focusing on the unemployment rates excludes at least a third of the population immediately.For these people — more likely than others to be on fixed-income payments or relying on other finite, limited resources — one of the biggest factors would be inflation, given it has a direct impact on the value of their recurring payments. Costs of the big ticket items (like housing and transportation) would be paramount. Those figureshave been rising dramaticallyeven as the unemployment rate falls. Redfin’s real estate price chartlooks like someone is trying to draw a mountain.Another good way to measure this is using the “real” (inflation-adjusted)medianhousehold income, which has been declining since 2019 even as unemployment fell all along the way. That means at least half the country (and likely much more) can afford less and less each year. If everyone’s working consistently but their lifestyle gets worse each year, is that a thriving economy?As we discussed earlier, another option is to look at where the job gains and losses are coming from and see if that gives any information. Right now, the losses are coming from the overcharged tech economy that emerged amid the pandemic. Unfortunately, Google, Meta, Snapchat, Twitter, and others, all of which have had layoffs recently, tend to be higher-paying companies. The job gains in housekeepers and front desk agents are not a one-to-one replacement for those losses.Then we have tertiary economic indicators, like whether consumer spending will continue (leading to company profits and growth), price indexes, and other items. Well, consumer sentiment ishovering near 40-year lows after hitting anall-timelow in 2022. We know what prices are doing. Some folks like using theretail sales figure, which is still quite strong, but has dropped for the last three months.Photo byViktor BystrovonUnsplashIf we’re really interested in our world economy or those of our individual nations,thattype of data is the bare minimum for what we should be looking at. Not “unemployment and done”.Parting thoughtsI don’t really like to get that wonky on economics items in my articles. I usually just try to set a fairly large scope, do the research myself, and give just enough detail and sources to set the general sentiment while discussing a topic. This way, any given piece is not — to quote West Wing — groaning underneath the weight of statistics.Once in a while, though, it can be helpful to look at a broader set of information to better explain our positions. Our economy has seen a lot of nominal growth in recent years, but very little of it has reached the majority of the population. Further, while our top-line indicators remain strong in some areas, there’s no question that the majority of them are trending in thewrongdirection.So yes, unemployment is low. We can take some solace in that, I suppose. Just don’t give it any more credit than it is worth.$SPDR S&P 500 ETF Trust(SPY)$  $DJIA(.DJI)$  $NASDAQ(.IXIC)$ Follow me to learn more about analysis!!
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    • Hard to investHard to invest
      ·02-07 13:51

      What else is haunting FED and market?

      Does the fact that the stock market has remained strong since 2023 mean that the risk of recession is reduced? Or is it because the Fed continues to maintain tightening policy (raising interest rates) even as inflation is moderating? Now that bank interest rates are not at a level that will bring the economy down enough to shift to a neutral (or accommodative) policy, and the U.S. economic news remains solid, the FED must continue to keep rates high to force credit crunch to the limit. The dilemma facing the governors is: when will inflation return to 2-3%, while interest payments as a percentage of total spending in the fiscal deficit is increasing (chart). In my view, the FED needs to carefully balance the needs of economic growth and inflation, and adjust policy appropriately to avoid the adverse effects of excessive tightening or easing on the economy. Personally, I think the current lending rate is either too high or too low, depending on which way you look at it. High interest rates have been questioned because long-term interest rates cannot be higher than the rate of inflation or the economy's GDP growth rate without affecting the U.S. government's ability to service its debt. However, if interest rates are too low, there is no telling when inflation will return to 2%, and the current narrative that the "cycle of interest rate increases is over" has not yet become a certainty. In this "dilemma" situation, there is no shocking event to give the Fed the reason to cut interest rates. Don't forget: the rate hike cycle is not quite over. The cycle could end at. First, let's consider the impact of U.S. deficit spending on the economy. Even though the U.S. has been in deficit for nearly 20 years, the likelihood of bankruptcy remains small. Therefore, I personally believe that a big drop in the dollar and a reversal of confidence in deficit spending is the least likely scenario. Second, a credit crisis with deteriorating creditworthiness is worrisome, and the problems caused by the rapid rise in interest rates in 2022 are surfacing in 2023, causing banks to refuse to lend. While last year's high-growth equity ARKK, cryptocurrency, SPAC and meme stocks have collapsed, they have not yet turned into a widespread credit crisis, but 2023 will require vigilance. Therefore, the crisis is still moderately likely. Third, a further stock market collapse as corporate earnings per share problems emerge during the recession, which is the most likely of the three. I think the Fed needs a stronger reason than slowing inflation to cut interest rates, and the simplest reason is that the stock market keeps falling. In fact, the Fed and investors in the market want to cut interest rates as soon as possible, because this will reduce the interest payments on the national debt, maintaining the solvency of the Treasury. Even though the market has had upward momentum in stocks in recent years, I still don't plan to put a lot of new money into the stock market today because as long as the Fed doesn't cut interest rates, the stock market won't see meaningful growth. However, if the stock market doesn't fall, the Fed won't cut rates either! This cycle continues to haunt us as investors. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • Hard to investHard to invest
      ·02-08 11:00

      What to look in Powell’s speech and potential impact on the market

      Fed Chairman Powell clarified that "deflation" means "the beginning of lower inflation" and that the deflationary process has started but is still in the "very early stages" and may not be achieved until 2024. achieve the inflation reduction target. Although Powell also warned that if unexpectedly strong data such as employment and inflation continue to be available, it could cause peak interest rates to be higher than market expectations; the Fed would still need to continue to raise rates. But the market is nearing the end of the Fed's rate hikes, with U.S. stocks rising sharply and commodities shaking back up, especially for crude oil. Overall, whether the attitude of the Fed, or the domestic economic recovery is expected, the two logics have not changed significantly, only part of the industrial products on the expected hit too full, up too much, it is expected that industrial products will gradually turn into a width shock market to wait for the test of economic data. The two markets shake slightly, the trend is mild. Northward funds for 3 consecutive days to reduce positions, but the outflow is not large, with the yuan back to strength, is expected to gradually normalize the entry and exit of northward funds. For this wave of index rebound market, northbound funds have a great impact, with the index significantly repaired, the market pessimism has been significantly relieved. And from the perspective of valuation and corporate earnings, there is not much drive, so this wave of the index "repair" market, and the sentiment of the funds is very relevant, is expected to shake the probability of the index is still greater in the short term, is expected to be stronger in small and medium-sized index than the blue chip index. @MaverickTiger @CaptainTiger @TigerStars @MillionaireTiger 
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    • TigerObserverTigerObserver
      ·02-05

      Weekly: Best January Market in 4 years, 85% Probability of Further Increase?

      For the first time in four years, the $S&P 500(.SPX)$ posted a positive result in January, as the index rallied to a 6.2% gain for the month. At the height of quarterly earnings season, the $NASDAQ(.IXIC)$ posted its fifth weekly gain in a row, lifted by strong results from selected technology stocks. The $S&P 500(.SPX)$ posted a more modest gain; the $DJIA(.DJI)$ fell slightly.As of last Friday, the$Straits Times Index(STI.SI)$ gained 1.6% last week and$S&P/ASX 200(XJO.AU)$ dropped 0.29% last week.As goes January, so goes the year?The latest week’s stock market performance extended this year’s sharp divergence. For the week, the $NASDAQ(.IXIC)$ was up 3.3% while the $DJIA(.DJI)$ was down 0.2%. Year to date through Friday, the $NASDAQ(.IXIC)$ was up nearly 14.8% compared with the $DJIA(.DJI)$ ’s 2.4% gain.Sam Stovall, chief market strategist at CFRA, said:"Since World War II, if the market has risen in January, it has continued to rise more than 85 percent of the time in the remaining 11 months of the year, with an average gain of about 11.5 percent. Thus, the Stock Trader's Almanac "The old saying: 'as goes January, so goes the year' is true."Since World War II, the $S&P 500(.SPX)$ has averaged an annual gain of about 9%, according to historical records. But Stovall noted that whenever the $S&P 500(.SPX)$ fell in the previous year, the $S&P 500(.SPX)$ usually rebounded sharply in the following year, with an average gain of 14% - and this also matches the current situation: The $S&P 500(.SPX)$ lost a whopping 19.44% last year.Sectors & Stocks Performances ReviewAcross the $S&P 500(.SPX)$ , consumer discretionary and communication services were the top-performing sectors in Janaury, as they added 15% and 14%, respectively; utilities and healthcare were the weakest, with both falling around 2.0%.Weekly Top Gainers of $S&P 500(.SPX)$$Align Technology(ALGN)$ ,$W.W. Grainger(GWW)$ ,$Gap(GPS)$, $Pentair PLC(PNR)$ ,$A.O. Smith(AOS)$ ,$Advanced Micro Devices(AMD)$ ,$CarMax(KMX)$ ,$FedEx(FDX)$ ,$PulteGroup(PHM)$$Stryker(SYK)$ Macro FactorsMonetary moves: As expected, the U.S. FED lifted its benchmark rate by a 25 points—smaller than the 50 points hike approved in November—while acknowledging that inflation has recently eased. Jobs bonanza: Last Friday’s monthly labor report sharply exceeded economists’ expectations, as the economy added 517,000 jobs in January—the most since last July. The unemployment rate slipped to 3.4%, the lowest since 1969.Mixed earnings results: Halfway through earnings season, the proportion of $S&P 500(.SPX)$ companies that have beaten analysts’ earnings expectations remained slightly smaller than usual. About 70% had exceeded net income expectations as of Friday, trailing the five-year average of 77%. Overall, earnings are expected to decline about 5% relative to a year ago.Bond volatility: The yield of the 10-year U.S. Treasury bond was little changed overall for the week at around 3.53%, but that flat result wasn’t indicative of its volatility.Oil slump: The price of U.S. crude oil $Light Crude Oil - main 2303(CLmain)$ fell nearly 8% for the week to around $73 per barrel—the lowest level in about a month. An increase in U.S. crude supplies was among the factors that weighed on oil prices.The Week Ahead: February 6-10Notable Earnings to Watch: $Activision Blizzard(ATVI)$ ,$Take-Two(TTWO)$ ,$BP PLC(BP)$ ,$Uber(UBER)$ ,$Walt Disney(DIS)$ ,$Pepsi(PEP)$ ,$Lyft, Inc.(LYFT)$ Key events this Week:MondayNo major reports scheduledTuesdayConsumer credit, U.S. Federal ReserveTrade balance, U.S. Census BureauWednesdayWholesale inventories, U.S. Census BureauThursdayFactory orders, U.S. Census BureauWeekly unemployment claims, U.S. Department of LaborFridayUniversity of Michigan Index of Consumer Sentiment, preliminary resultFederal budget, U.S. Department of the Treasury​​​How is your trading plan in this week?Any special focus?Please join the the Daily Discussion with Tigers​​
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      Weekly: Best January Market in 4 years, 85% Probability of Further Increase?
    • SPDJISPDJI
      ·02-06

      S&P 500 Impact Analysis+Top 10 stocks of Each Sector

      On Dec. 15, 2022, S&P Dow Jones Indices and MSCI jointly announced a full list of companies affected by the upcoming revisions to the Global Industry Classification Standard (GICS) structure. Exhibit 1 shows an overview of the expected impact on various U.S. equity indices. The “intra” changes refer to the reclassification of stocks within a sector, while the “inter” changes correspond to stocks being moved from their current sector to another under the new GICS structure. These U.S. equity indices have more intra than inter changes in this reorganization.Exhibit 2 provides more detail on theS&P 500, showing that 6 of the 11 S&P 500 sectors will be affected by the upcoming GICS changes. Real Estate accounts for the vast majority of intra changes, reflecting the sector’s additional granularity in the upcoming restructuring. Hence, 17 stocks will be reclassified within the Real Estate sector, making up 60% of the sector market weight post-changes. Most changes will come from the current Specialized REITs and Residential REITs categories, which will be placed into more specific categories.Exhibit 3 demonstrates how the impacted stocks are set to move between sectors. The current GICS sector is on the vertical axis, and the GICS sectors under the new structure on the horizontal axis. The boxes on the diagonal represent intra changes. For example, out of the 11 stocks leaving the Information Technology sector, three of them are moving into the Industrials sector and eight into the Financials sector.The key driver behind the inter changes of the Information Technology sector is the discontinuation of the Data Processing & Outsourced Services sub-industry. Companies will be reclassified to Financials and Industrials sectors to better align with their business support activities. For instance, all eight stocks that are set to join the Financials sector— including $Visa(V)$ and $MasterCard(MA)$ —will be classified under the newly created Transaction and Payment Processing sub-industry. Likewise, all three stocks joining the Industrials sector will go to the Human Resources & Employment Services sub-industry with its updated definition.Changes to the Consumer Discretionary and Consumer Staples sectors indicate that retailers will be classified based on the nature of goods sold. For instance, $Amazon.com(AMZN)$ , being the largest affected stock in the $S&P 500(.SPX)$ , will be reclassified within the Consumer Discretionary sector, from a discontinued Internet & Direct Marketing Retail sub-industry to a newly created Broadline Retail sub-industry.Exhibit 4 shows how the upcoming GICS changes are set to affect the largest 10 stocks in the impacted sectors, based on the data as of Dec. 30, 2022. Target Corp will move from Consumer Discretionary to Consumer Staples, displacing $Estee Lauder(EL)$ from the largest 10 corporations in the Consumer Staples sector, while Visa and Mastercard will move from Information Technology to Financials.Other than the major changes described above, the March GICS changes also include updates to Transportation, Banks and Thrifts & Mortgage Finance, which are more prevalent in smaller caps. The analysis on the flagship S&P 500 shows how other U.S. equity indices can be similarly assessed by the upcoming GICS changes.The posts on this blog are opinions, not advice. Please read ourDisclaimers.Source:https://www.indexologyblog.com/2023/02/03/2023-gics-changes-sp-500-impact-analysis/
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    • Hard to investHard to invest
      ·02-08 00:11

      What to expect from Powell’s speech tonight

      Yesterday, Atlanta Fed President Raphael Bostic said he basically expects two more rate hikes to bring the terminal rate to 5.1%, which is consistent with last December's forecast, but if the economic data continues to be stronger than expected, he may support another 1 number of rate hikes on top of that, or even not rule out 2 numbers to bring the terminal rate above 5.6%! And Powell is going to speak, if he also so state that the Fed's March dot plot may again raise the terminal interest rate, then this will greatly change the optimistic expectations of the financial markets, and not only the stock market, even the housing market may continue to sluggish after a good stabilization. According to a simple and clear headline in the Wall Street Journal, the real estate market is showing signs of thawing! The main reason, of course, is that after reaching a high of 7% last November, 30-year fixed mortgage rates have now fallen a full 1% to 6%, and optimistic expectations of interest rates topping out have caused mortgage rates to plummet, thus stimulating the housing market. Related data: mortgage applications increased by 15%, refinancing increased by 50%, and pending home sales increased by 2.5% last December, which is usually a leading indicator of the housing market's thawing status. If the housing market thaws quickly, then it will be harder for inflation to return to the 2% target. However, if the Fed starts to make hawkish statements and the market takes them seriously enough, then it could cause mortgage rates to rise again and the housing thaw could become short-lived. @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • Liang0020Liang0020
      ·02-07 14:52
      Let's look at Tesla production in China for what it is.Back in Sept 2022, they were making 82000 model 3/Ys a month. Then demand started slowing down due to competition. Inventories rose. Tesla cut back production and lowered prices. BYD deliveries outpaced all others including Tesla for the quarter and year. The government incentives ran out. Tesla still had inventory on its hands. They lowered prices again in January fearing further drop in demand due to competition, COVID spread, government incentives expiring and Chinese new year shutdown.In December they cut production about 30% through shortened work shifts and a 10 day Christmas shutdown.So production was drastically cut back.In January, Chinese car buyers who missed out on the govt incentives started considering not only Tesla but all Chinese car makers because they also cut their prices in a price war to grab customers. Also, some buyers wanted to buy before Chinese new year shutdowns.So there was a bump up in demand, but Tesla was still operating on scaled down production which they had extended from December.So orders of course would outpace production if production was at a crawl.Ramping up production over the next 2 months of the quarter to 80k per month is still less than what they had been producing last September. And they need to play catch up for the Chinese new year production.$Tesla Motors(TSLA)$  $NIO Inc.(NIO)$  $XPeng Inc.(XPEV)$  $Li Auto(LI)$
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    • breakoutsharesbreakoutshares
      ·02-07 13:52

      ASX Stocks| Thoughts on HRE, PR1& EMD

      $PR1 #PR1 looks like ASX might be slinging a few crabs at it now #ASXPR1#PR1 they threw mud back.  $Pure Resources Limited(PR1.AU)$ $HRE lets see where this closes #ASX  $Heavy Rare Earths Limited(HRE.AU)$ $EMD well done to the peeps that got back on this bus prior to legistive changes. #ASX  $Emyria Ltd(EMD.AU)$ Mine brain is scratching on why wouldn't inflation revert back to pre-covid times naturally .. some rate rises to moderate excess demand and fix supply chains.Follow me to learn more about analysis!!
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      ASX Stocks| Thoughts on HRE, PR1& EMD
    • Hard to investHard to invest
      ·02-06

      My macro view

      More and more people are seeing that the US economy will not crash but will have a "Golden Girl" economy, which is a long-term bullish signal that many investors love. The "Golden Girl" economy means low inflation and continued growth, in this situation the central bank will not have reason to take more aggressive policies to fight the economy but will choose looser policies to extend the expansion as much as possible, and the stock market will also show a bullish trend. However, it's worth noting that a rising market prices the return of the "Golden Girl" but if inflation remains sticky, it means there's limited possibility for inflation to slow down. In this case, to further curb inflation, the Fed will have to keep higher interest rates, the "Golden Girl" economy will gradually become distant and the stock market will show a corresponding trend. So although most people are bullish about the market, I think there is still room for growth in the short term. Rational analysis of economic conditions is very important as it is closely linked to future investment strategies. Otherwise, if you don't rationally interpret any data, ignore risks and bet a lot of money, you will eventually pay the price for this unwise decision. So is the US job market performing well and the soft landing is settled? Will the market continue to ignore hawkish messages from the Fed and become a major risk in the future? What is the low-risk high-return investment strategy then? @MillionaireTiger @TigerStars @CaptainTiger @MaverickTiger 
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    • TechnicalHunterTechnicalHunter
      ·02-06

      Bullish Divergences, Keep an Eye on the Dollar

      Mega cap tech earnings are complete. $Tesla Motors(TSLA)$$Apple(AAPL)$ ,$Alphabet(GOOGL)$ ,$Microsoft(MSFT)$ ,$Netflix(NFLX)$ ,$Amazon.com(AMZN)$ ,$Meta Platforms, Inc.(META)$ What happened to forward expectations?The table above outlines Consensus estimate revisions for the next year in response to 4Q results (NTM = next twelve months).Macro Situations Rcently :*U.S Mkt Technicals: Bullish *Macro: Bearish*Earnings Fundamentals: Bearish*Real Economy for Middle Class: Bearish*U.S Housing: Bearish*U.S-China Relationship: Bearish Bullish divergences & key indicator to watch this week*The US Dollar’s $USD Index(USDindex.FOREX)$ influence on stocks, bonds and commodities*An impending favorable seasonal window*It might be a good time to keep an eye on the buck…
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    • SPDJISPDJI
      ·02-03

      U.S. Equities Market Attributes: So Goes January, So Goes the Year

      Key Highlights- The $S&P 500(.SPX)$ was up 6.18% in January, bringing its one-year return to -9.72%.- The $DJIA(.DJI)$ gained 2.83% for the month and was down 2.98% for the one-year period.- TheS&P MidCap 400increased 9.14% for the month, bringing its one-year return to 0.65%.- The S&P Small Cap 600 was up 9.40% in January and had a one-year return of -2.53%.Howard SilverblattBy Howard Silverblatt,  Senior Index Analyst, Product Management, Click to read Full article.Market SnapshotThis month's Q4 2022 earnings releases demonstrated that following the money (starting with earnings and then cash flow) always seems right, especially if you are paying bills (payroll, CapEx, dividends and buybacks). While the actual Q4 bottom-line results weren't good, they weren't as bad as some feared; the quarter is expected to end 2.7% above Q3 2022 (which would still be down 8.8% from the record Q4 2021, when the $S&P 500(.SPX)$ closed the year at 4,766). The actual top-line results (sales) showed a slowing of the ability of companies to pass along higher costs (with some extra profit included), as sales for the quarter are expected to be a tick higher (0.9%) than the record Q3 2022 (when consumers were willing to pay more, or "revenge spending" as it's now labeled).Along with the relatively decent numbers were numerous warnings from CEOs of harder times, squeezed margins (which at 11.48% for Q4 2022 remain significantly higher than the historical 8.29% average since 1993) and consumer pullbacks. Joining CEO commentaries was the lack of long-term pessimism and the belief that they could pull through the current downturn, all of which has pushed the market into the belief of two more FOMC increases of 0.25% each, even as U.S. Fed comments remain a bit more hawkish. The resulting belief was that the sun will come out (in the second half), as the $S&P 500(.SPX)$ posted its first January gain after three years of declines (up 6.18% this January, compared with -5.26% for January 2022, -1.11% for 2021 and -0.16% for 2020). And a happy January tends to make for a happy year, as "so goes January, so goes the year" has historically been correct 71% of the time.While Santa Claus didn't show up for Christmas, the benevolent being did make a welcome appearance in January, as the $S&P 500(.SPX)$ closed at 4,076.60, up 6.18% (6.28% with dividends) from last month's close of 3,839.50, when it was down 5.90% (-5.76%) from November's close of 4,080.11 (5.38%, 5.59%), and October's close of 3,871.98 (7.79%, 8.10%). It was the first January gain after three years of January declines. While the start (and January barometer indicator) was appreciated, the index still had a long way to go to make up for last year's decline. The three-month period posted a gain of 5.28% (5.76%), while the one-year return was -9.72% (-8.22%), the 2022 return was -19.44% (-18.11%). The $DJIA(.DJI)$ ended the month at 34,086.04, up 2.83% (2.93% with dividends) from last month's close of 33,203.93, when it was down 4.17% (-4.09%) from November's close of 34,589.77, when it was up 5.67% (6.04%). The $DJIA(.DJI)$ was down 7.37% from its Jan. 4, 2022, closing high (of 36,799.65). The three-month return was 4.13% (4.68%) (2022 return was -8.78%; -6.86%), while the one-year return was -2.98% (-0.92%).For January, 8 of the 11 $S&P 500(.SPX)$ sectors were up (compared with December 2022, when all 11 declined), with Consumer Discretionary doing the best, up 14.99% (after last year's 37.58% decline), and Utilities doing the worst, down 2.04% (after 2022's mild 1.44% decline). On an aggregate basis, the $S&P 500(.SPX)$ increased USD 1.981 trillion (to USD 34.114 trillion) for the month, while it declined USD 8.224 trillion for 2022. It was up USD 6.050 trillion from the Feb. 19, 2020, start of the COVID-19 pandemic.For Q4 2022, 170 issues have reported (44.4% of the market value), with 119 (70.0%) of them beating on earnings and 107 of 169 (63.3%) beating on sales. For Q4 2022, earnings are expected to post a 2.7% gain over Q3 2022 and be down 8.8% over Q4 2021. Sales were expected to be up a tick (0.9%) from the record Q3 2022 level (and potentially set a new record) and up 6.5% over Q4 2022. Operating margins for Q4 2022 were expected to be 11.48%, up from 11.28% in Q3 2022 (the average since 1993 was 8.29%, and the record is 13.54% in Q2 2021). Significant EPS impact due to share count reduction for Q4 2022 was posted by 21.40% of the issues, compared with Q3 2021's 21.24%, 14.89% in Q4 2021 and Q4 2020's COVID-19-inspired 6.01%. For fiscal-year 2022, earnings are expected to decline 4.8%, with a P/E of 20.6. For 2023, estimates call for a 11.9% increase, as the forward P/E is 18.4.
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    • DiegoM1DiegoM1
      ·02-05

      US Market| Thoughts on US Bonds

      Uk bonds has showed a good trend up.. from a long term trend down.... time to improve... up. $Micro 10-Year Yield - main 2302(10Ymain)$ $Micro 5-Year Yield - main 2302(5YYmain)$ $Micro 30-Year Yield - main 2302(30Ymain)$ GBP breaks its trend showing a correction on way.. for moment its short! $GBP/USD(GBPUSD.FOREX)$ Follow me to learn more about analysis!!
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      US Market| Thoughts on US Bonds
    • lithium_guylithium_guy
      ·02-05

      ASX Stocks| The Big Chance for Lithium Market

      New Nasdaq Sprott Lithium Miners ETF. Strong weighting to #ASX $PLS $AKE $IGO producers. Pre producers $LTR $CXO in equal weighting. Some big #lithium names in this list, interesting weighting from a financial institution. High exposure to Li market rates.$Pilbara Minerals Ltd(PLS.AU)$  $Allkem Limited(AKE.AU)$  $IGO Ltd(IGO.AU)$  $Liontown Resources Ltd(LTR.AU)$  $Core Exploration Ltd(CXO.AU)$ Follow me to learn more about analysis!!
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      ASX Stocks| The Big Chance for Lithium Market
    • LCapitaljrLCapitaljr
      ·02-05

      Macro-Markets| Thoughts on Major Stock Markets

       $HSI(HSI)$  $S&P 500(.SPX)$  $NASDAQ 100(NDX)$  $HSI(HSI)$  $Straits Times Index(STI.SI)$ Trade What You See, Not What You ThinkThe key is to consistently trade only what you see and not what you think or feel, this will help to keep you from giving into the emotions of revenge or greed after a losing or winning trade.Follow me to learn more about analysis!!
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    • Liang0020Liang0020
      ·02-03
      This pullback is a great opportunity to add more shares in a company that continues to gain popularity (aka market share) both in China and the US. IMHOGet ready for another bull rally in China stocks and China. China reconnects with the world, covid as peak, economy is restoring, continues to supply badly needed supply chain to the world. Now its CNY after which when investors are coming in after the new year the bull will be on full rage. Hold onto your China stocks, there won't be another price like this for quite a long time. $Pinduoduo Inc.(PDD)$ $JD.com(JD)$  $Alibaba(BABA)$
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    • Tiger_InsightsTiger_Insights
      ·01-30

      Market review: How long can mild recession trades last?

      I. Year-to-date (2023/01/01 - 2023/01/27) performance review1. Major assets returnsSource: Bloomberg; dollar-denominated returnsSo far this year, as of January 27, the majority of global assets have risen favorably. Bitcoin is the top gainer. $NASDAQ Golden Dragon China Index(HXC)$ and $HSI(HSI)$ representing overseas Chinese stocks gained much; while the $CSI300(000300.SH)$ and CSI 500 were up nearly 10% before the Chinese New Year holiday break.Expectations of a recovery in China are gradually shining into reality, with consumption and travel data during the Chinese New Year period, both showing a marked recovery. Meanwhile, US Q4 GDP beat expectations, and earnings reports from big companies like $Tesla Motors(TSLA)$ were also surprising. Expectations of a soft landing in the US are fermenting, driving a sharp rally in US stocks.2. Major strategies' gainsThe specific indices are Macro CTA: HFRX Macro CTA Index; Commodity Trend: Bloomberg Goldman Sachs Commodity Trend Index; Equity Neutral: HFRX Equity Hedged Strategy Index; Global 6040: Bloomberg Global 6040 Index.Source: BloombergThe returns of our strategies are as follows.In the recent month, US/China New Dynamic benefited from the strength of US and Chinese stocks and recorded a very good positive return;the returns of Tiger GTAA improved as we allocated assets such as China and developed countries' stocks, gold and Japanese yen on top of mainly US bonds;Tiger GTAA Conservative mainly invested in short-term US Treasuries and has a stable return.Source: BloombergII. Market interpretation1. US macroeconomic data is fair, earnings are not badDuring the Spring Festival holiday, the US macroeconomic data has picked up. In addition to the US Q4 real GDP rose as much as 2.9% from the initial value, new orders for durable goods rose 5.6% from the previous quarter, far exceeding market expectations of 2.5%; the Michigan Consumer Sentiment Index rebounded to 64.9 in January, exceeding expectations of 64.6.White line: US quarterly new orders for durable goods (left axis); Blue line: Michigan Consumer Sentiment Index (right axis); Source: BloombergAs of January 26, 110 large companies in the $S&P 500(.SPX)$ have released their earnings reports for Q4 last year. According to Credit Suisse,they beat earnings estimates by 2%. Although this is the smallest margin of exceeded expectations in the past seven years, the earnings of large companies led by $Tesla Motors(TSLA)$ basically satisfied investors. The good news has certainly lifted the gloom of an impending US recession.Source: Credit SuisseMeanwhile, US inflation-related data released in January, including CPI and PPI, and PCE all continued the previous downward trend, confirming to the market that the Fed will further slow down interest rate hikes. The Fed's benchmark interest rate futures have priced in a more than 98% chance of a rate hike of just 25 basis points for the Feb. 1 FOMC meeting.Source: CME FedWatchAs a result, the peak of rate hikes with a pending US recession make US stock markets likely repeat mild recession trades similar to early 2019. A further rally in the valuation of US stocks has overwhelmed a modest downside on the earnings.2. Overseas institutions are frantically raising bets on Chinese stocksOf course, Chinese stocks are still the most bullish asset for overseas institutions so far this year. According to a global fund manager survey conducted by Bank of America in early January, 91% of global fund managers expect China's economy to continue to grow strongly, the highest level of optimism since '06. In practice, northbound funds have been flowing significantly into Chinese stocks for three months in a row, with net buying in January this year (up to the Chinese New Year holiday) exceeding the total volumn of last year.Source: Bank of AmericaAccording to historical data, China's major stock indexes tend to perform well after overseas institutions begin to raise their bets.Then, after the first month of the last 10 times since 2015 when there was significant net northbound buying, the Hang Seng Technology Index and the Nasdaq Golden Dragon Index, which represents Chinese stocks in the US, would have even better returns on average, in addition to benefiting stocks in China.Source: Bloomberg, dollar-denominated returnsThree consecutive months of significant net buying by northbound funds have only been seen from April to June 2020. The macro environment in China at that time was also a post-pandemic recovery overlaid with accommodative fiscal and monetary policies. Major China stock indices still perform very well in 1 year later despite of 3 months of significant gains.Source: Bloomberg, all gains above are in USDIII. Future outlookMost global assets have seen encouraging gains so far this year, mainly from two strong expectations: first, China's recovery, Europe and the United States will only fall into shallow recession; second, inflation is under control and the Fed is about to turn. Currently, these two strong expectations are like Schrodinger's cat (neither fully confirmed nor disproved), in terms of both macro data and earnings reports. Therefore our next asset allocation strategy will revolve around how strong expectations and the three realities of strong, neutral and weak.For strong expectation 1, the median institutional forecast for China's real GDP in 2023 according to Bloomberg is 5.1%. We can consider 5%-5.5% real GDP growth in China plus GDP growth in Europe and the US around 0% as neutral reality, while real GDP growth above/below the above figure as strong reality/weak reality.For strong expectation 2, we take the Fed's economic forecast given by the FOMC in December (year-end PCE inflation 3%, benchmark interest rate around 5%-5.5%) as neutral reality, and the final figure is weak reality if it is higher, and strong reality if it is lower.We will start with the high-frequency data of Chinese travel consumption during the Spring Festival, combined with the recent US macroeconomic data and earnings reports. Strong expectation 1 at least for now fall between strong reality and neutral reality. We assume that the probability of strong reality, neutral reality and weak reality are 30%, 50% and 20% respectively.By contrast, despite the decline in US inflation data, it is still well above the Federal Reserve's 2% average inflation target. Recent speeches by overseas central bank officials have not revealed the intention to pivot. Therefore, the strong expectation 2 is still likely to fall above the neutral reality, and the likelihood of a weak reality is greater than a strong reality. We believe the probabilities of strong reality, neutral reality and weak reality are 10%, 70% and 20% respectively.The probabilities of the three realities corresponding to the two strong expectations are multiplied together to obtain the probabilities of the nine combinations of scenarios. We then add the assets that may benefit from the 9 scenarios (in order of ranking), and we get the following chart.In the coming week, big events include Fed meeting and the ECB meeting, the earnings releases of 110 S&P 500 component companies including $Apple(AAPL)$ , $Alphabet(GOOG)$ and $Amazon.com(AMZN)$ , and the January non-farm payrolls report are coming. The big test is coming up as to how long the current mild recession trades can last.We will still allocate assets based on the nine probable scenarios mentioned above. And anytime based on new information, we will adjust the probabilities of strong, neutral and weak reality that eventually correspond to the two expectations and the proportion of asset allocation.
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    • HONGHAOHONGHAO
      ·01-30

      Hao Hong: Savings Glut Fuel for Spring Rally

      Hao Hong, CFAConsensus is mistakenly over analyzing the activity data during the Spring Festival. Good data mean recovery, bad data suggest more stimulus. Indeed, PBoC’s balance sheet expansion has heralded a positive turn in economic cycle.With data vacuum, we are at the inception of intense speculation. China’s savings glut many taken as a sign of extreme risk aversion can be the fuel for a spring rally.Stay bullish.China’s Savings GlutIt is the Year of the Bunny, and the market has hopped back to life. Since our non-consensus call “Mai! Mai! Mai!” on October 31, 2022 to buy and started this rally, Hong Kong’s Hang Seng$HSI(HSI)$ soared ~50%, the Hang Seng Tech Index$HSTECH(HSTECH)$ rose ~70%, the Chinese Internet Index $CSI China Internet ETF(KWEB)$ rose~90%, the Chinese ADR Index $Invesco Golden Dragon China ETF(PGJ)$ rise 80% and the Shanghai Composite ~13%. While China’s onshore market was closed for the spring festival, overseas markets celebrated the festival with roaring performance. Incidentally, the win ratio for S&P500 in a Bunny Year has been over 80% in the past decades.Our non-consensus call was viciously ridiculed. But as the market rally unfolds beyond many critics’ wildest imagination, consensus now starting to sound like a bullish choir. As an old Chinese market adage goes, “one positive candlestick can change the sentiment, but three positive candlesticks can even change faith”.But the Chinese New Year is notorious for data vacuum. For traders, this is a period void of data to show the state of the economy, and thus it is ripe for intense speculations. Stock is about to start trading on sentiment and hopes.Figure 1: China’s savings glut, M2 and Banker Confidence at decade’s high.Source: Bloomberg, GROW ResearchMany are still clinging to using data to justify their bullish stance, citing positive activity data during the spring festival, such as the box office, passenger traffic, hotel bookings etc. But the box office in 2021 was at all time high of 7.8 billion yuan, and yet it was a really bad year for Chinese stocks, and the Chinese internet bubble collapsed that year.Consensus is missing the point. It fails to recognize that stock trading during the Spring Festival is often disassociated from fundamentals and instead unravels on sentiment and hopes. Human imagination plays a critical role in trading during this period. This is one of the reasons why the Chinese market tends to have a “spring rally”.So, in the Year of the Rabbit, where would the spring of imagination for stocks come from?Recently, there has been extended coverage on China’s excess savings. It is interpreted as a sign of risk aversion by Chinese households to hoard cash. Indeed, the addition of 17.8 trillion yuan of savings is the highest ever, and 80% higher than an average of ~10 trillion yuan during the previous three years (Figure 1). It hints at extreme pessimism.But as contrarian, we take a different and positive view on China’s savings glut. We believe that these excess savings can be the fuel for the current Spring Rally to continue.Savings Glut as Rally FuelIn Figure 2, we show the relationship between Chinese banks and household savings (inverted). Clearly, Chinese banks have arrived at a critical bottom that coincided with important market bottoms in history. For instance, when Chinese banks’ performance fell to this level in January 2014, a bull market and later on a bubble were quietly emerging.Figure 2: China’s savings glut and performance of banks portend further upside for stocks.Source: Bloomberg, GROW ResearchAs households start spending again and saving less, the economy will recover, and the market will respond. Once a virtuous cycle between savings, consumption, economy and the market is formed, a recovery can then ride on sustained momentum and turn into a self-fulfilling hypothesis.Also, savings is an important part of China’s broad money supply. As households draw down their savings, M2 growth will likely slow from its current torrid pace of close to 12% y/y growth – one of the fastest paces in recent years. And in Figure 3, we show that M2 growth on the margin is an inverse indicator of market performance. This inverse relationship is even more pronounced in recent years. In short, household savings can be the liquidity for the market.Figure 3: China’s M2 growth on the margin inversely correlated with stock market (ex. 2008-2009).Source: Bloomberg, GROW ResearchThat said, household can also opt to dig into their savings to buy property. After all, after record property sales of 18 trillion yuan in 2021, the Chinese bought 5 trillion yuan less property in 2022, contributing to the current savings glut. Fortunately, in recent years, slow property sales tend to mean better stock performance. Our base case is for a slow property recovery in 2023, and thus more allocation of excess savings to stocks.Meanwhile, we notice that the PBoC’s balance sheet is expanding again, coinciding with the turn of China’s economic cycle that we have been writing extensively in our reports since late October, 2022.It is interesting to note that the movement in the PBoC’s balance sheet is closely correlated with our proprietary EYBY model and also follows a three- to four-year cycle (Figure 4). These are true and powerful leading indicators of the economic cycle, and they are turning positive simultaneously. Such close correlation also affirms the potency of our proprietary EYBY model.We believe that the economic variables we discuss here are key for traders to look at in the upcoming period of intense speculation.Figure 4: The PBoC’s balance sheet expanding, leading the economic cycle to recovery.Source: Bloomberg, GROW ResearchConclusionConsensus is looking at activity data during the data vacuum of the Spring Festival to justify their bullish stance. Its missing the point. Whether the data are good or not, the recovery will be here sooner or later. Good data mean recovery, bad data suggest more stimulus. We are at the inception of an intense speculative period. And the savings glut that consensus takes as a sign of risk aversion can be the fuel for a spring rally.“No discussion of the interrelations of stock prices and business conditions would be complete without emphasizing that in the clash of speculative forces on the exchange, the emotions play a part which is not paralleled in the normal processes of commerce and industry.The golden mean is non-existent in Wall Street, because of the speculative mechanism does all things to excess; even the reactions from the heights of phantasy and from the depths of despair are accompanied by convulsions which are distinct from the calmer tenor of business.Those who seek to relate stock movements to the current statistics of business, or who ignore the strongly imaginative taint of stock operations, or who overlook the technical basis of advances and declines, must meet with disaster, because their judgment is based upon the humdrum dimensions of fact and figure in a game which is actually played in a third dimension of the emotions and a fourth dimension of dreams.”– Ten Years of Wall Street, Barnie WinklemanHao Hong, CFA
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      Hao Hong: Savings Glut Fuel for Spring Rally
    • KYHBKOKYHBKO
      ·01-27

      What does the latest 2.9% US GDP growth tell us?

      The latest US GDP (QoQ) Q4 beat the estimate of 2.6% and came up at 2.9%. Yahoo News reports on the US economy - strong growth in Q4 Source: https://sg.news.yahoo.com/u-economy-posts-strong-growth-162211186.html The following is a breakdown of contribution to GDP (source: Bloomberg) GDP contribution by category (Source: Bloomberg) TradingView - heatmap of S&P500 as of 27Jan2023 8am SGT As per the above, the market has responded positively to the news with S&P500 ending the day with a 1.10% gain at 4,060.43 as per market closing on 26 Jan 2023. In the past weeks, we have heard from various sources expecting a recession in the coming months. Is the recession still coming? Will we get the soft landing that we hope for? Let us go into the details of the latest GDP figure. Deep dive into the GDP figures From BEA website: The increase in real GDP reflected increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and exports. Imports, which are a subtraction in the calculation of GDP, decreased Current-dollar GDP increased 9.2 percent, or $2.15 trillion, in 2022 to a level of $25.46 trillion, compared with an increase of 10.7 percent, or $2.25 trillion, in 2021. The price index for gross domestic purchases increased 6.8 percent in 2022, compared with an increase of 4.2 percent in 2021 (table 4). The PCE price index increased 6.2 percent, compared with an increase of 4.0 percent. Excluding food and energy prices, the PCE price index increased 5.0 percent, compared with an increase of 3.5 percent. Source: https://www.bea.gov/data/gdp/gross-domestic-product Real GDP by Quarters (Source: BEA) Here are my observations for the 2.9% real GDP growth: GDP (2.9%) is made up of the following: Personal consumption expenditure (up 2.1%) Gross private domestic investment (up 1.4%) Net exports of good sand services (export down by 1.3% and import down by 4.6%) Government consumption expenditure and gross investment (up 3.7%) It is fueled by a 2.1% increase in personal consumption expenditures. Personal Consumption is made up of goods and services. Services grew by 2.6% Goods grew by 1.1%. This is partly fueled by the seasonal year-end shopping during Black Friday, Cyber Monday, Thanksgiving and Christmas. Such a peak should not occur again till the Q4 of 2023 and probably at a different magnitude. From Thanksgiving, Black Friday and Cyber Monday, the US experienced an estimated sale of $25.72B (excluding Christmas sales). The notable shopping events where record sales were recorded. Cyber Monday online sales hit a record $11.3B, driven by demand, not just inflation, says Adobe (Source: https://techcrunch.com/2022/11/29/cyber-monday-online-sales/). Photo taken from the Techcrunch news article (https://techcrunch.com/2022/11/25/thanksgiving-black-friday-online-sales-figures/) Black Friday 2022 e-commerce reaches record $9.12B, Thanksgiving $5.3B; BNPL and mobile are big hits (Source: https://techcrunch.com/2022/11/25/thanksgiving-black-friday-online-sales-figures/) Gross private domestic investmentgrew by 1.4%. This comprises 2 portions - “fixed investment” and “change in private inventory”. Fixed Investment is down by 6.7%. (Fixed investment is made up of non-residential and residential.) Nonresidential (Fixed investment) is up 0.7%. This comprises structures (up 0.4%), equipment (down 3.7%) and intellectual property products (up 5.3%). Residential (Fixed investment) is down significantly by 26.7% Thus, “nonresidential” has a heavier weightage/magnitude than “residential”. Change in private inventory - no figure is provided in table 1 above. How can gross private domestic investment grow by 1.4% if “Fixed investment” is down by 6.7% and the other component “change in private inventory” has no data? Let us explore other data tables later. Net export of goods and services (this is obtained when we minus imports from exports): Exports are down by 1.3%. Goods are down 7.0% and services are up by 12.4%. Imports (for domestic US consumption) are down by 4.6%. Goods are down by 5.6% but services are up by 0.4%. There are red flags in this as US consumption (from import) is down for goods but on a slight increase for service. There is a reduction in US domestic consumption for imports. Interestingly, this drop in imports took place in Q4 when there are notable shopping events in the US. Does this mean that US consumers have turned more to local products? There were some changes in procurement where people have chosen to import goods earlier to avoid the usual holiday peak and the port congestion along the West Coast of the US. However, import goods were down by 0.4% & 8.6% in Q2 & Q3 of 2022 respectively. US export (consumed by countries outside of the US) is down by 7.0%. This is not good news for US local producers and manufacturers. The last category is Government consumption expenditures and gross investment ticked upwards at 3.7%. This comprises government consumption and investments at both “Federal” and “State & local” levels. Federal government consumption and investment grew by 6.2%. This is made up of nondefense and National defense components. National defense grew by 2.4% QoQ Nondefense grew by 11.2% QoQ State & local grew by 2.3% QoQ. Contributions to Real GDP From the table above, we have a better picture of how each component contributed to the 2.9% GDP increase: Personal consumption expenditure (1.42% out of 2.9%) BEA: The increase in consumer spending reflected increases in both services and goods. Within services, the increase was led by health care, housing and utilities, and "other" services (notably, personal care services). Within goods, the leading contributor was motor vehicles and parts. Gross private domestic investment (0.27% out of 2.9%) Net exports of goods and services (0.56% out of 2.9%) Government consumption expenditure and gross investment (0.64% out of 2.9%) BEA: Within federal government spending, the increase was led by nondefense spending. The increase in state and local government spending primarily reflected an increase in compensation of state and local government employees. Within nonresidential fixed investment, an increase in intellectual property products was partly offset by a decrease in equipment. all these summed up to give us the 2.9% GDP growth Other observations: Personal consumption expenditure - services alone contributed 1.16% out of the 2.9% GDP growth. Since Q2 of 2021, residential (fixed investment) from gross private domestic investment) has been in decline. In fact, it is one of the biggest declines. The change in (non-farm) private inventory (under gross private domestic investment) is also a big reason for the GDP growth. BEA: This is the extract from BEA explaining the impact of change in private inventory: The increase in private inventory investment was led by manufacturing (mainly petroleum and coal products as well as chemicals) as well as mining, utilities, and construction industries (led by utilities). Federal spending is also driving GDP growth, contributing about 0.64% of the 2.9% GDP growth, accounting for a strong 22%. Personal Income and Disposition Observations: There is a trend of increasing disposable personal income in 2022. While personal savings has increased ($552.9B in Q4 compared to Q3’s $507.7B), there is a worrying trend of declining personal saving (as a percentage of disposable personal income). The annualized personal saving (as a percentage of disposable personal income) has fallen from 17.0% (2020), to 12.0% (2021) and finally to 3.3% (2022). Should the trend persist, we may see negative personal savings in 2023. Personal income (annual) has been increasing since 2020. The notable (annual) decline is found in the “personal current transfer receipt” from $4.6T (2021) to $3.9T (2022). BEA definition of “Personal current transfer receipt” Consists of income payments topersonsfor which no currentservicesare performed and net insurance settlements. It is the sum ofgovernment social benefitsand netcurrent transfer receiptsfrom business. Conclusion US and UK economies are largely driven by consumption. Source: World Bank / Financial Times The US economy is primarily driven by consumption. Following the year-end sales, Q1/2023 GDP will offer a more normalized outlook for the coming quarters. With the series of layoffs, there would be disposable income reduction and a tightening of spending. We should also see an outflow of talent (leaving the US) should they fail to secure new employment. There are concerns coming from US production, export and private domestic investments. While we see annual gains in personal income, there is a worrying trend in the drop in personal savings over the last 3 years. As a whole, the drastic drop in personal savings from 17% in 2020 to 3.3% in 2022 would be a case of concern. As the data represent the US as a whole, the impact on different income brackets and demographics would likely differ. The income distribution is likely to be uneven. With this good GDP figure (2.9% growth) and favourable initial jobless claims of 188K, the Fed can remain its hawkish stand towards inflation. Would the Fed go for a 50 bps interest rate hike instead of the expected 25 to take on the inflation beast? I recommend caution for the coming months as we foresee more headwinds. @TigerStars 
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      What does the latest 2.9% US GDP growth tell us?
    • ShanoskyShanosky
      ·01-28

      Big Names. Big Layoffs. Bad Times Are Already Here.

      Welcome to the slow-motion recession.Photo byAdeolu EletuonUnsplashIf you’re going to lay off 12,000 people, you should at least make an effort at telling them first.Unfortunately, Google didn’t get that memo, with some of their employees only discovering their laid-off status after their name badge failed to grant the building access that it had on every other day of their employment. Surprise! Turns out the company conducted layoffs via…email. But if you have some sense of boundaries and don’t check your emails at 5:55 A.M. before heading to work each morning, you’d have missed it.Not a tactful way to do business, particularly for such a momentous event in your employees’ lives. Perhaps the hope is that it would go unnoticed amongst the other news of economic turmoil. For the most part, it appears to be. Just a day after reports of Google’s haphazard employee dismissals, news pivoted to another set of layoffs —this time, Hasbro.Much talk has been had about a supposed coming recession, but it’s pointless. Why? Because, by pretty much any metric except the one we actually use, we’re already in a recession, and it’s a fairly bad one, at that. Let’s take a look at why.The working definitionFirst off, we should start with the fact that a recession is a label applied to a given economic situation. Like any label, it can be applied arbitrarily. In the United States, we often try to remove the subjectiveness by strictly defining it as two full quarters of GDP decline rather than the long-expected growth. What many don’t realize is that this definition itself was created somewhat arbitrarily by an economist named Julius Shiskin in 1974.The Bureau typically in charge of actually applying these labels has a vaguer definition, though:“[Our] definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria — depth, diffusion, and duration — as somewhat interchangeable.”Well, there you have it. What more do you need?First off, a colloquial definition — one that applies to most people. There are both hypothetical and real situations in which GDP can be growing while the vast majority of people perform poorly. The opposite is also true — GDP can hypothetically retract while most people are experiencing relatively sound financial times. It’s the first one I’m most concerned about today.This is not to say that I think the traditional definitions are unusable or unreliable. There are macroeconomic effects that impact everyone when you see the type of persistent contraction that meetsthosedefinitions. But since most people associate “recession” with “times are bad,” we need a more “Main Street” definition.Photo byTarik HaigaonUnsplashA think a colloquial recession — or a workers’ recession, or the people’s recession, or whatever you choose to call it — has a few components beyond GDP. Are people’s retirement accounts faring worse? Is it getting more difficult to get by? Are median incomes dropping, and, if not, arerealincomes dropping when compared to inflation? These could be considered the measures of an actual recession for normal people. And if that’s the case, then we’re already in one.ComponentsWith that in mind, let’s look at why we’re already in a bad situation. First of all, we should set the general stage for our economy. In the U.S., Canada, and the United Kingdom, the workforce has never returned to its pre-COVID levels. This is due to a multitude of factors that have been covered extensively, many of them right here in theMaking of a Millionaire publication. Still, it is important to keep that number in the background when discussing the overall economy.United States workforce participation rate from St. Louis Fed — public domain.Canada’s decline is less steep but still hovers near historic lows. The U.K. finds itself only set back a few years — to 2017 or so — as their participation rate bottomed out much further back. In a sense, they’re in the best shape.So, next, we move on to see if people are doing better in general. Is it easier to pay bills? Since real income is adjusted for inflation by the Fed when they calculate it, we sort of already know the answer to this one even though 2022 data isn’t out yet. Interestingly, it was already in decline in 2021:Median Household Income (CPI Adjusted) from 2000–2021 — St. Louis Fred, public domain.So workforce participation is hovering near lows, and the income for those who are in the workforce isn’t going as far. Those who are out of the workforce are often on fixed-income payments. Social security gets adjusted for inflation, sure, but plenty of pensions do not. A large portion of the population got much poorer these last 18 months.That’s not painting the prettiest of pictures already. But there’s more. Household debt levels are rising again after being in continuous decline for almost two decades. “Real” income is inflation-adjusted, sure, but inflation is a bad number. It uses “average” payments across the whole country, which is just not a good way to go about things. If housing prices doubled, but only 5% of people got a new house that year, inflation in housing would be clocked at 5%. But the price doubled.So when inflation is running at 8%, that really means things are insanely more expensive than they were a year ago and that someone just starting out in adulthood now is likely to have twice as difficult a go of it as someone would have last year. Some of this is starting to retreat, thankfully, but it still points to difficult times ahead for the average person. Real estate is one example:Snip by the author from Redfin’s public data on the housing market. Public domain.We can see some relief in the housing market beginning in the middle of 2022 —not saying I called it or anything— but a lot of people are still going to be in their 2020, 2021, and 2022 mortgages for a while. Can’t refinance when you’re underwater. Wouldn’t want to refinance when rates are up three points. Some years linger around longer than others, I suppose.So when you look at those figures, it stands to reason that the average person feels like they’re in an economic squeeze already. All that’s missing is the label.NextThere’s one group of people that definitely recognize this reality — corporate executives. How do we know? Well, while corporate profits are about steady year-over-year, layoffs have begun. By preparing for the bad times, they’re actually accelerating them.The list of those joining the layoff train varies. There are those companies that built up expecting growth that never came, and others that just have tremendous declines in business. A very incomplete list from 2022 and 2023 includes:Spotify: 6% of workforceGoogle: 6% of workforceGoldman Sachs: 8% of workforceFacebook/Meta:13% of workforceSnapchat: 20% of workforceWells Fargo: 50% of mortgage divisionBed Bath & Beyond: 20% of workforce (cumulative)Amazon, IBM, Microsoft, Zillow, and others could join the list if I was a less lazy researcher. But you get my point.Add in the fact that theU.S. stock market had its 7th-worst year in history (three of which occurred during the Great Depression) last year, and you’ve got an economy that hits most major negative items. Are retirement accounts and 401k funds getting killed? Yupp. Is real income declining? Absolutely. Are the biggest single household expenses getting exponentially more expensive? You bet. Are companies starting mass layoffs? Been doing so for a year.I’m particularly worried about the impact this will have on millennials — already something of a lost generation — and Gen Z. The latter is entering adulthood with disproportionate costs on everything from housing to transportation to the education they were told was necessary. The older half of millennials have already been through a dot-com burst, housing crisis, the “Great Recession,” a once-in-a-century pandemic, and now this just between the ages of 18 and 40.Not a surprise that they’re broke. Now we see if this casts a similar fate for their successors.None of this is good news, I know. Still, it is worth talking about. Knowing the general economic conditions of the day helps us all make better personal financial choices based on risk. But if there’s one good thing about it all, it’s this: We can stop fearing the incoming recession. We’re already living it.$Amazon.com(AMZN)$  $Alphabet(GOOG)$  $Spotify Technology S.A.(SPOT)$ $Meta Platforms, Inc.(META)$ Follow me to learn more about analysis!!
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      Big Names. Big Layoffs. Bad Times Are Already Here.