Investing General Discussion
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Sanrith Descartes
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I mentioned setting up to unload my AMZN position. Below is the chart. If it can overcome the 200-DMA then it has some room to run before it hits long term overhead resistance. My biggest problem is I don't like AMZN as a whole, but I love AWS. I am also not sold that we are done with the economic downturn or more rate hikes. The stock ripped on earnings which in my mind werent great outside of AWS (which was great). The stock recently ripped off 7 straight green candles and then 5 straight green candles. The 50-DMA is quite positive but the 100 and 200 not as much. I am thinking it bounces off the 200 on the first attempt. My plan is to sell at the 200, bank profit and then see where it goes. If it keeps ripping then I miss out on some profits.
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Sanrith Descartes
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Some details
- US July Average Hourly Earnings Rise 5.2%, smashing expectations of 4.9%
- US July Average Hourly Earnings Rise 0.5% M/M; also beating estimates of 0.3%
- US July Private Payrolls Increase 471,000; Est. 230k
- US July Average Workweek at 34.6 Hours; Est 34.5
- US Manufacturing Payrolls Rise 30,000 in July
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Sanrith Descartes
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Yeah, any thought of a 50 basis point hike just got a beat down. 75 is being priced back in. Guess I wont be selling my AMZN today.
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Sanrith Descartes
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WBD getting rocked on the earnings double miss. Its the first earnings since being combined so analysts really had no idea what to expect. It has had a really nice run up the last month or so.
Jysin
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The Fed pivot idea has been picked away by actual Fed member statements this week. Some saying "havent even yet begun to see prices cooling" .. "unsure why market feels Fed will reduce pace of hikes" etc.
This speculative pivot move up this week+ has not been backed by a single word of any Fed member.
Spoilered for length:
04 Aug 12:33 (US) Fed's Mester (FOMC voter, hawk): Path of inflation will govern the size of rate hikes ahead; Fed is committed to bringing inflation down to goal; Recession risks have gone up though - There is still a path to a soft landing - Reiterates we are not in a recession right now - Have to take supply constraints as a given, they are likely to remain for some time - I do not use the yield curve as a strong indicator of where the economy is going; Need to raise interest rates more to ease demand - Need to raise interest rates more to ease demand - There are signs policy put in place is working on the demand side, but that moderating demand is not yet impacting inflation - Needs to see several months of inflation coming down - Companies she talks to still struggling to find workers - Real imperative we get inflation back down - Wants to get balance sheet down to around $6.5-7.0T, we don't know ultimate size of balance sheet, after we get there will will have to see - Balance sheet to demand on demand for reserves - Source TradeTheNews.com
03 Aug 14:45 (US) Fed's Kashkari (dove, non-voter): Big banks in US need more capital; Fed could activate counter-cyclical buffer for banks - It may take an act of Congress to require banks to have more capital - It is high time that the Fed uses its tools to their full potential; See opportunity for new Fed Vice Chair Barr to tighten stress tests for banks - Stress tests are a very important tool - Assessing bank lending exposure to climate scenarios should not be controversial - Concerning that inflation is spreading, we need to act with urgency - Inflation is causing wages to rise, not the other way around - It is very unlikely that Fed will cut rates in 2023, don't know what the markets are looking at; More likely that we will raise rates and then sit there for a while - A soft landing is still possible but can't say how likely it is - The best data we have indicate that inflation expectations remain anchored - Will likely take years to get back to the 2% inflation target - I want to see real wage growth that is consistent with 2% inflation - Source TradeTheNews.com
03 Aug 11:19 (US) Fed's Daly (non-voter, dove): Markets are ahead of themselves in expecting rate cuts in 2023 - Fed remains committed to getting inflation down closer to the 2% target; FOMC is united on delivering both sides of the Fed mandate - Personally think 3.4% is a reasonable place for us to get rates to by year end - We remain data dependent - The June SEP remains a reasonable guide for the Fed rate path (echoes Powell) - Early glimmers of progress on inflation really need to show through the data - We are not even up to 'neutral' yet; Estimates 'neutral' at over 3%, maybe 3.1%, policy still not in 'restrictive' territory - Remain optimistic that we can get inflation down without triggering a deep recession; Nothing in lines of sight right now that indicates a soft landing is not possible; We are working towards a soft landing - Don't think Fed should raise rates fast and high only to lower them a few months later; Should hold rates high for a while, longer than 6 months and maybe a year, before cutting - 3% inflation still too high this is why we have a 2% average goal - Consumers want to see directional improvement, not getting prices lower than they were some months ago; this is a jounrey, will not happen over night - We are delivering on 2% hopefully by late 2023 or early 2024 - Not expecting downturn like 2008 in our future - Have not seen a single piece of data yet indicating were near a pain point on joblessness - Believes 50% of inflation is driven on demand side, 50% on supply side - 50bps would be a reasonable thing to do in Sept; I'm biased towards not getting ahead of ourselves but if we see inflation roaring ahead undauntedly then perhaps 75bps would be more appropriate- We have a lot in the pipeline in tightening but yet to see that in the data showing slowing of econmoyu - Source TradeTheNews.com
03 Aug 14:45 (US) Fed's Kashkari (dove, non-voter): Big banks in US need more capital; Fed could activate counter-cyclical buffer for banks - It may take an act of Congress to require banks to have more capital - It is high time that the Fed uses its tools to their full potential; See opportunity for new Fed Vice Chair Barr to tighten stress tests for banks - Stress tests are a very important tool - Assessing bank lending exposure to climate scenarios should not be controversial - Concerning that inflation is spreading, we need to act with urgency - Inflation is causing wages to rise, not the other way around - It is very unlikely that Fed will cut rates in 2023, don't know what the markets are looking at; More likely that we will raise rates and then sit there for a while - A soft landing is still possible but can't say how likely it is - The best data we have indicate that inflation expectations remain anchored - Will likely take years to get back to the 2% inflation target - I want to see real wage growth that is consistent with 2% inflation - Source TradeTheNews.com
03 Aug 11:19 (US) Fed's Daly (non-voter, dove): Markets are ahead of themselves in expecting rate cuts in 2023 - Fed remains committed to getting inflation down closer to the 2% target; FOMC is united on delivering both sides of the Fed mandate - Personally think 3.4% is a reasonable place for us to get rates to by year end - We remain data dependent - The June SEP remains a reasonable guide for the Fed rate path (echoes Powell) - Early glimmers of progress on inflation really need to show through the data - We are not even up to 'neutral' yet; Estimates 'neutral' at over 3%, maybe 3.1%, policy still not in 'restrictive' territory - Remain optimistic that we can get inflation down without triggering a deep recession; Nothing in lines of sight right now that indicates a soft landing is not possible; We are working towards a soft landing - Don't think Fed should raise rates fast and high only to lower them a few months later; Should hold rates high for a while, longer than 6 months and maybe a year, before cutting - 3% inflation still too high this is why we have a 2% average goal - Consumers want to see directional improvement, not getting prices lower than they were some months ago; this is a jounrey, will not happen over night - We are delivering on 2% hopefully by late 2023 or early 2024 - Not expecting downturn like 2008 in our future - Have not seen a single piece of data yet indicating were near a pain point on joblessness - Believes 50% of inflation is driven on demand side, 50% on supply side - 50bps would be a reasonable thing to do in Sept; I'm biased towards not getting ahead of ourselves but if we see inflation roaring ahead undauntedly then perhaps 75bps would be more appropriate- We have a lot in the pipeline in tightening but yet to see that in the data showing slowing of econmoyu - Source TradeTheNews.com
03 Aug 11:19 (US) Fed's Daly (non-voter, dove): Markets are ahead of themselves in expecting rate cuts in 2023 - Fed remains committed to getting inflation down closer to the 2% target; FOMC is united on delivering both sides of the Fed mandate -
Blazin
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Fed futures is what matters, its the actual expectations and their jaw boning didn't stop the market from going as far as starting to price in rate cuts in 23.
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Jysin
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Mohammed El-Erian (one's opinion I highly respect) pointing out that this inflation cycle just entered dangerous territory. Phase 1 being the energy spike. Phase 2 when inflation spread to more core components beyond energy. Now phase 3 where rising wages are happening. The risk now with rising wages makes inflation far more "sticky". This is the inflation entrenchment that the Fed keeps warning about and saying they need to avoid.
Market has to be pricing in 75bp move in Sept and possibly beyond.
Today's news is really bad for Fed credibility. They have to go harder on the hikes. And September (next meeting) seems an eternity away.
Market has to be pricing in 75bp move in Sept and possibly beyond.
Today's news is really bad for Fed credibility. They have to go harder on the hikes. And September (next meeting) seems an eternity away.
Sanrith Descartes
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Fuck Daly. She got caught on a hot mike saying how she hasnt been impacted by higher prices at all because she is financially in a good place and many Americans feel the same way. Piece of shit. This is why the FED needs dissolved.
political rant off.
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Sanrith Descartes
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The only positive to this news today is that it tamps down the stagflation beast. Those wage numbers came out of left field.
Sanrith Descartes
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VIX not punching up like I expected it to. Elevated but not parabolic.
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Furry
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I don't see how this tamps down the chance of stagflation occurring. Obviously we're still on the trajectory of inflation, but wouldn't that also be the case in building to a stagflation scenario? The big difference would be some sort of economic shock or overcompensation by the people in charge that kills the ability of the economy to expand and meet increased costs, rather than fighting against the root causes of inflation. Something crazy like I dunno... a 15% minimum tax on corp profits tied to lots of extra spending.
Sanrith Descartes
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Not until we see wages stagnating. I am less surprised by the jobs number than I am by the wage increase number.
Mist
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Based on currently available data, a lot of people in this thread would get better long-term returns asking for a raise and blindly putting that extra money into index funds than they would worrying about the market day-to-day or even worrying about what the Fed is doing meeting-to-meeting.
Sanrith Descartes
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Sanrith Descartes
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I ask myself for a raise every year and have never once told myself no. I do a damn fine job.Based on currently available data, a lot of people in this thread would get better long-term returns asking for a raise and blindly putting that extra money into index funds than they would worrying about the market day-to-day or even worrying about what the Fed is doing meeting-to-meeting.
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Mist
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No shit. As long as people are employed, and actively contributing to their 401k, and they're making more money, and even if inflation remains persistently elevated at 4-6% for a few years, that money is still going to go into equities and the prices of those equities are still, over the long term, just going to keep going up and up and up.
Sanrith Descartes
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Over the long time horizon, this is correct. Not everyone here does the long time horizon. Some chase the meme/wsb stocks on a daily basis.