All Things Economic

Where is everyone at in their investments? We both retired in Dec and as the market hit new highs in Jan and Feb, I moved our stock exposure from 70% to 38% as my individual issues hit sell points. The remaining are top dividend players with potential upside(6+% divedends). I put the balance into income funds. 2 of which earn 13-15%, another at 9% annually, paid out monthly. The balance into 20 yr Bond fund currently at about 4.4% yield

I am waiting for a minimum SP500 decline of 25% before meaningfully changing my mix. While it would not suprise me, I am not saying we are headed there. My thesis is it will come and that is when I will move back into equities with a high probability of success. At that point I will begin layering in and going heavier into stocks again.

What are you doing and what's your outlook and strategy?

WTF?

This is my first post in this category...

All things economic also includes the first ice cream truck of the year! I love it and am so happy! :-)

The Dow closed lower by 890 points today, or 2.08%, pulling back from a loss of more than 1,100 points at one point.

The broader S&P 500 also plunged, dropping by 2.7%, while the tech-heavy Nasdaq Composite plummeted 4%.

The Dow and S&P 500 each posted their worst day of the year. The Nasdaq posted its biggest single-day decline since September 2022.

So much winning.

~Scamp

Consumer prices rose 0.5% from December — the fastest pace since September 2023 — resulting in an annual inflation rate of 3% for the 12 months that ended in January, according to the latest Consumer Price Index data released Wednesday by the Bureau of Labor Statistics.

US stocks dropped Wednesday, with investors concerned that inflation has reversed its recent progress and could lead to higher interest rates. The Dow was around 395 points lower at the opening bell, with the S&P 500 down 1% and the Nasdaq Composite declining by 1.1%.

~Scamp

I prefer the term realistically. Less judgmental.

@Current

The numbers outperformed expectations, where economists had expected a rebound.

I just reported the facts, you can spin it as negatively as you wish.

~Scamp

@Mayhem,

I constantly bite my tongue when I'm about to say "What these people need is a good recession to adjust their world view" when I consider Gen Z and even millennials' attitudes toward work and compenstation. I stop myself because I know it's not the entitled and annoying that are hit hardest by recessions.

@ Scamp

I think it's difficult to draw much from the November job numbers given that the October numbers were 12,000 (!!). That was since revised to 36,000 but is clearly an unrepresentative number affected by factors like two hurricanes, the Boeing Machinist strike etc. There was bound to be one or two month's rebound, historically anyway. This is one of the reasons recessions aren't called out with less than two quarters trailing data, much as the media and politicians would like them to be.

Was watching an interesting YouTube titled something like "Why aren't all these people working?", and showed a bunch of people in a park, presumably during normal business hours.

As usual, I take stuff like this with a grain of salt, but they did seem to raise some decent points. Some amount of people not working was blamed on Covid as being a convenient time to retire for people that otherwise wouldn't have. When some retired and realized they couldn't afford it, they weren't willing to go back to work for less than they were making, so they were locking themselves out of the job market.

Then there was input from Gen Z'rs where they felt their time was worth way more than any business would pay them. Some thought they deserved a starting salary in the $600K range, because that was what they felt their time was worth. Essentially they'd rather live a minimalist life living at home or with friends playing video games and watching TV rather than work. I couldn't help but think that some of this is a result of enablement from the parents of these Gen Z'rs.

The flip side of this is that a number of businesses way underestimate the value of people's time and both pay and employee respect were low. The dime-a-dozen mentality.

It was an interesting sound bite though.

US added a strong 227,000 jobs in November.

Friday’s report from the Labor Department provided the latest evidence that the U.S. job market remains durable even though it has lost significant momentum from the 2021-2023 hiring boom, when the economy was rebounding from the pandemic recession.

Source: AP

~Scamp

Hard to have an opinion when you move from Southern California to South Carolina, I’m still thinking everything is so cheap here. Husband and I both kept the same jobs.

Hard to have an opinion when you move from Southern California to South Carolina, I’m still thinking everything is so cheap here. Husband and I both kept the same jobs.

Its a cluster F.. K to fix what they screwed up last 4 years and more with swamp creatures.. both sides are to blame!

Hopefully he has learned his lesson from being screwed first term !!!

"Talk of tax cuts has consequences."

Actual tax cuts which, are typically not offset by spending reductions, and are therefore unfunded tax "expenditures" from an accounting perspective are inflationary. Considering that bond yield are up across the yield curve (except 2-6 months which is flat) since the election, and despite a quarter point rate cut by the Fed, yes, talk of tax cuts given 100% Republican control in Washington DC, further coupled with talk of tariffs, would appear to have consequences.

They should also be rather alarming to those concerned about inflation IMO.

The Michael Jordan effect:

"The timing of Jordan’s $100 million investment is significant. His decision comes just a year after relinquishing his control over the Charlotte Hornets, a team he initially acquired in 2010 for $275 million.

While the Hornets struggled on the court, their off-court valuation skyrocketed under Jordan’s leadership, showcasing his knack for capitalizing on the business side of sports. The ownership of the team was handed over to a group led by Gabe Plotkin and Rick Schnall for $3 billion, which ultimately made him a $2.25 billion profit."

FWIW - The 10 year treasury bond yield has been on a substantial rise since Sept, which is long before the election results were known. There was no significant change beyond this trend after the election.

So many times people try to point to the president's economic effect (incoming or otherwise) on something that they had little to nothing to do with. In this case, Biden is still president. This is likely in spite of Biden being the standing president during this trend and also had little (if anything) to do with Trump being the next president IMHO.

And T-bonds are tax exempt.

AS of yesterday, November 18, the 10-year treasury bond yield has increased to 4.47%, a stunning increase of 73 basis points in just over six weeks. A big part of that jump happened following Election Day. Talk of tax cuts has consequences.

The Federal Reserve cut its key interest rate Thursday by a quarter-point, continuing the "soft landing" of curbing inflation without triggering a recession.

The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target.

~Scamp

I think that the country has become a lot more pro-labor in the past couple of years.

I am generally more pro-labor, but am a pragmatist. So I understand that the pendulum should not swing too far in either direction.

And as far as everyone but the workers being seen as the bad guys, I sensed a paplable shift in attitude among people locally when the Machinists rejected the last contract. The fact that a new offer was approved by the leadership in 8 days speaks to that I think.

I think Boeing is uniquely positioned to raise prices and absorb this hit. Their only competion is Airbus and, until the Chinese presumably eat their lunch, there is excess demand. I think Boeing has (finally) figured out that the labor cost cutting moves they undertook, from offloading Engineers, to outsourcing components, pressuring the union with the plant in South Carolina, have all been disastrous and led to the current quality crisis. The overall company has also made some serious strategic and fiancial blunders including it's space business and underbid on the KC-135 tanker replacement. The hardest problem to fix, in my opinion, will be the intentional sacrifice of the company's core competencies in design and manufacture of commercial aircraft that began three decades ago.

@8-inch

Your calculations are off on a couple of points.

First, the most consistently reported number in the local press (this, as you can imagine, is a VERY big story here in Washigton) for the "average" hourly for Boeing machinists, is $31. Second, you are not considering compounding, which brings the total to 40%, not 35%. The current offer, announced yesterday includes a 38% aggregate pay increase (43% compounded total).

So the numbers would be approximately $31/hr ($64,480/yr) current, $43.40/hr ($90,272/yr) under the rejected contract and $44.33/hr. ($92,206/hr) under the current offer. No pension retoration is included in the current offer.

"When it's all said and done, everyone except the workers will appear as the the bad guys."

I come from a family that produced four generations of union members and...yeah, in my view, the workers are the bad guys too.

Unions can have enormous value, to their members, to society, and to their industries. But that's not the case here, where they will only hasten their own demise. Find a way to work with Boeing or sell a solid contract that is sustainable in the near to medium term to your members and explain why getting everything you possibly can is a bad strategy if you'd like to keep family wage jobs - including yours - in the Seattle metro area.

When it's all said and done, everyone except the workers will appear as the the bad guys.

If they were at $20-24 or 26 per hr, 1.35 times that is $27-32 and 35 per hr.

Greed is not always good. I can see many of the demands being met, and a smaller employee payroll roster in the near future. When the price of the product goes up, something has got to give.