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08-AUGUST 18-2023

Money MattersGood morning.  The Fed’s latest meeting minutes indicated the possibility of further rate hikes this year.  That’s certainly a possibility.  But with Fed members starting to disagree on the point, chances are the most likely result is that inaction will set in.  That leaves us now in the “longer” part of the “higher for longer” interest rate cycle we’re in.
The market has largely adjusted to the rate hikes already.  Consumers are holding up well, as is the labor market.  That suggests we’re seeing the start of a soft landing that could take markets to new highs over time.
It also means that interest rates are likely nearing their peak for this cycle, if they’re not already there.  That makes fixed-income attractive here, as well as stocks that are tied to interest rates such as real estate investment trusts or utilities.  Both sectors are starting to look like a contrarian buy now.

Now here’s the rest of the news:

U.S. Bank Ratings Slashed Overnight
Moody’s cut credit ratings of several small to mid-sized U.S. banks on Monday and said it may downgrade some of the nation’s biggest lenders, warning that the sector’s credit strength will likely be tested by funding risks and weaker profitability… [Read Here]

August 18, 2022

Big Guy!Good morning.
Retail sales turned out flat in the past month.  That’s bad news for the economy.  While overall sales rose when stripping out auto sales and gasoline, the rise was still less than inflation.  That shows that, in real terms, consumer spending is flattening out.  In fact, on an inflation-adjusted basis, the past 4 months have either been flat or lower.
Combined with a decline in savings and a rise in the use of credit card debt, it’s a sign that consumers may be tapped out soon, unless inflation substantially subsides.  Such a drop could potentially lead the markets lower in the coming months ahead.
Traders should continue to expect big volatility, and look for opportunities to take the opposite side of the market after a sizeable move in one direction.

Now here’s the rest of the news:

Washington’s New Agenda Has Horrifying Consequences
On Sunday August 7th, the U.S. Senate passed the Inflation Reduction Act of 2022 under FY2022 budget reconciliation instructions. PWBM recently analyzed a previous version of the bill.  We also compared our analysis against that of the… [Read Here]

The American Economy Returns To 1982 And 1979 Levels
Inflation as measured by the Consumer Price Index backed off a tad in July to a still ugly 8.5%, from the super-ugly 9.1% in June, as food prices continued to spike, but gasoline and natural gas prices fell, and prices of durable goods backed off their crazy… [Read Here]

August 18, 2021

Summer Fun_79Good morning.
Every few years, some big names on Wall Street disclose that they’re on opposite sides of a big trade.  One of the last such clashes involved billionaires Carl Icahn and Bill Ackman over Herbalife (HLF). While usually focused on one stock, these clashes can sometimes be bigger…
Case in point: “Big short” investor Michael Burry has decided to go short ARK Funds, run by Cathie Wood.  ARK looks for innovation and big-picture trends that can lead to massive returns, but likely has a lot of volatility behind it.  Wood tweeted that she respects Burry’s views on the disconnect on the housing market back in the day, but that innovative technologies are another matter than the housing market.  Time will tell who is right, and given the way the market fluctuates, both titans will likely have multiple opportunities to declare victory.

Now here’s the rest of the news:

U.S. Economic Growth Suddenly Collapses –Tyler Durden, ZeroHedge
Goldman Sachs strategist Chris Hussey provided a particularly brutal assessment in a market research note titled simply “not good.”  Here’s why… [Read Here]

August 18, 2020

Cut-cut-cut...Good morning.
It was John Maynard Keynes that referred to the gold standard as a “barbarous relic.”  For someone that was profoundly interested in printing money, the thought of having a run on gold reserves was too restrictive.
Another critical investor of gold, Warren Buffett, just bought shares of Barrick Gold Corp (NYSE: GOLD) through Berkshire Hathaway.  This doesn’t exactly mean that he suddenly sees value in owning gold as an investment, but it does indicate the potential value of gold stocks in an age of massive spending, monetization and a weaker U.S. dollar.

Now here’s the rest of the news:

This Rare Market Event Points to More Stock Gains
Multiple breakouts like this rarely happen at the time…
In the past month, we saw new highs in stocks, bonds, and gold.  And if you’re like most investors, this probably has you puzzled.
Stocks and bonds tend to move opposite each other, afier all.  And gold is always a wild card.  Sometimes it moves higher when stocks fall, and sometimes it doesn’t.
So, to have a situation like this… with all three hitting new highs together… is dam rare.  It’s also a good sign for all three assets — and for stocks in particular

Let me explain…

It’s true that when you find a market in a strong uptrend, it often goes on to make even higher highs.  That’s the power of what investors call “trend following.”
Still, when you see multiple assets break out, you need to further examine what’s going on.  And that’s the case today, as gold, bonds, and the Nasdaq all hit new 12-month highs last month.
This is not a common occurrence.  You’ll usually see bonds rally while stocks fall… or gold jump higher as bonds go nowhere.
Rarely do gold, bonds, and stocks all break out to new highs at the same time.
These are very different asset classes, after all.  Today is different, though.  These three assets recently broke out together.  And the synchronized move led to new highs for each one in July.

August 18, 2019

2019_08_17 PMP

Now here’s the rest of the news:

Gold Breaches $1,500 as Global Tensions Rise.
As global tensions continue to rise, gold has breached the $1,500 level.  See what’s been sending gold on a bullish course in this week’s News to Know.

**  **  **

“Action that springs from a beautiful state leaves ripples across the planet.” @pkconsciousness

I’ve always been fascinated by stories of spectacular achievement.  My library is filled with books about people of great accomplishment.  It’s easy to admire those who have overcome difficult circumstances — people who have taken great risks and won.

“Most people look to avoid risk; the greater risk is not going for it.”

Going For It

Sharpen the AxeIf there is so much veneration for those who go for the brass ring, why are there so few people willing to take the risk?  One of the reasons is that we care too much about what others think.

The I-told-you-sos and knew-it-wouldn’t-works are always going to be around.  I call them dream killers.  Perhaps they’re placed here to test whether or not we’re really serious about our goals.  There’s often great risk and pain involved in going for your dreams.  But if it were easy, then everyone would do it.  It wouldn’t be exceptional.  There’s risk either way.  And I think there’s even greater risk and suffering in not going for it.

No doubt about it, putting yourself out there and telling the world what you’re going to do is scary!  What if you don’t succeed and everyone sees you fail?  What then?  The truth is, most people don’t think about you anywhere near as much as you might think.  Most people think of themselves.  And, oftentimes, the people who are the most critical are actually secretly wishing they had the guts to do what you’re doing.  “Today, you have 100% of your life left!” — Tom Hopkins

Don’t wait for the perfect time.  It won’t ever come.  😉

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Come From Aways, Do You?

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