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Dow plunges nearly 800 points on rising fears of an economic slowdown

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Dow plunges nearly 800 points on rising fears of an economic slowdown

Old 12-07-2018, 10:59 AM
  #141  
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Things looking brighter today, in light of the employment report.

Dec 07 Payroll employment increases by 155,000 in November; unemployment rate unchanged at 3.7%

Wonder if we'll ever crack that 63.0% LPR number again? Extremely stubborn in light of the current demographics.

Last edited by 69L46; 12-07-2018 at 11:00 AM.
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Old 12-07-2018, 11:13 AM
  #142  
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Originally Posted by KenHorse View Post
Love how the OP POUNCES on a single day of downturn, ignoring the subsequent days' recoveries...
Dow down in 2018. Yeah those 300 plus day moments are a bitch aren't they?
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Old 12-07-2018, 11:15 AM
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Originally Posted by 69L46 View Post
Things looking brighter today, in light of the employment report.

Dec 07 Payroll employment increases by 155,000 in November; unemployment rate unchanged at 3.7%

Wonder if we'll ever crack that 63.0% LPR number again? Extremely stubborn in light of the current demographics.
The wonderful /s, if not logical, irony of the market. Any sign of a less hot economy and slower wage growth is good for equities.

I'd make no bets on labor participation rates due to systemic issues that won't change any time soon. On top of that, advanced manufacturing and those pesky, intelligent machines are waiting in the wings.
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Old 12-07-2018, 11:27 AM
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Originally Posted by vette6799 View Post
The wonderful /s, if not logical, irony of the market. Any sign of a less hot economy and slower wage growth is good for equities.

I'd make no bets on labor participation rates due to systemic issues that won't change any time soon. On top of that, advanced manufacturing and those pesky, intelligent machines are waiting in the wings.
Yes, it's always ironic. Layoffs boost prices.

Seeing good wage growth numbers, but not enough to cause people to panic about inflation, hopefully. I can't help but wonder if we'll see this continue since a large portion of the unfilled jobs has to be the lack of skills in certain sectors.

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Old 12-07-2018, 11:39 AM
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Originally Posted by 69L46 View Post
Yes, it's always ironic. Layoffs boost prices.

Seeing good wage growth numbers, but not enough to cause people to panic about inflation, hopefully. I can't help but wonder if we'll see this continue since a large portion of the unfilled jobs has to be the lack of skills in certain sectors.
The level of wage growth over the last few months was a bit surprising and not forecast by the financial talking heads due to the lack of skilled workers available to fill the vacancies that you noted.
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Old 12-07-2018, 11:45 AM
  #146  
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Originally Posted by virtue4u View Post


Ever since it looked like the Dems would take back the House, the stock market has not done as well.
We warned.
Idiots don't listen.
Yeah, I'm sure it's the seats in the House doing it, and not the tariff wars.
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Old 12-07-2018, 11:47 AM
  #147  
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Originally Posted by pdiddy972 View Post


Yeah, I'm sure it's the seats in the House doing it, and not the tariff wars.
you're sure just like russia russia russia
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Old 12-07-2018, 11:49 AM
  #148  
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Originally Posted by vette6799 View Post
The level of wage growth over the last few months was a bit surprising and not forecast by the financial talking heads due to the lack of skilled workers available to fill the vacancies that you noted.
Few good observations from today's WSJ:
.

Key Takeaways From the Data

Thanks for joining us on this jobs Friday. To read more, please check out our main story, chart package and markets coverage. Here are our key takeaways from the report:
.
  • The labor market is still a bright spot for investors. Although employers added fewer jobs than expected, many analysts said the unemployment rate staying at its lowest level since 1969 and steady wage growth cooled recent recession fears. Stock, bond and currency markets were pretty calm following the data after a wild week of trading.
  • Expect more uncertainty about inflation and rates ahead. Some analysts said the figures should give the Federal Reserve a freer hand to ease its pace of interest-rate increases next year, but worries about a sudden pickup in a wage growth and volatile commodity prices are likely to continue. Broader trade anxiety also continues to affect how the data are interpreted.
  • Lingering concerns over the U.S. and China’s trade relationship haven’t stopped businesses from hiring workers. Transportation and warehousing companies, along with the professional and business services sector were among the segments that continued to lead hiring.
  • There’s one hurdle the job market market continues to face: fewer Americans jumping into the labor force. Last month didn’t draw in a larger share of workers. The labor-force participation rate was unchanged in November at 62.9% and there was little change in participation for prime-age workers.


The third point is the most interesting, and contradicts what's being reported by those against the tariffs. We'll see if it holds true in Q1 after the Q4 inventory stockpiling eases.
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Old 12-07-2018, 12:01 PM
  #149  
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Originally Posted by 69L46 View Post
Few good observations from today's WSJ:
.

Key Takeaways From the Data

Thanks for joining us on this jobs Friday. To read more, please check out our main story, chart package and markets coverage. Here are our key takeaways from the report:
.
  • The labor market is still a bright spot for investors. Although employers added fewer jobs than expected, many analysts said the unemployment rate staying at its lowest level since 1969 and steady wage growth cooled recent recession fears. Stock, bond and currency markets were pretty calm following the data after a wild week of trading.
  • Expect more uncertainty about inflation and rates ahead. Some analysts said the figures should give the Federal Reserve a freer hand to ease its pace of interest-rate increases next year, but worries about a sudden pickup in a wage growth and volatile commodity prices are likely to continue. Broader trade anxiety also continues to affect how the data are interpreted.
  • Lingering concerns over the U.S. and China’s trade relationship haven’t stopped businesses from hiring workers. Transportation and warehousing companies, along with the professional and business services sector were among the segments that continued to lead hiring.
  • There’s one hurdle the job market market continues to face: fewer Americans jumping into the labor force. Last month didn’t draw in a larger share of workers. The labor-force participation rate was unchanged in November at 62.9% and there was little change in participation for prime-age workers.


The third point is the most interesting, and contradicts what's being reported by those against the tariffs. We'll see if it holds true in Q1 after the Q4 inventory stockpiling eases.
Succinct summation. I'm interested in seeing the GDP number next month for the 4th quarter. Re the tariffs, if the IP and mandatory information sharing issues are solved I'll be a happy camper.
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Old 12-07-2018, 12:11 PM
  #150  
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Originally Posted by caskiguy View Post
Instead of earning nothing by withdrawing from the market why not consider "annuities" at a guaranteed rate of return ? Just a thought.
A good thought indeed

Any money that I “ pull out” goes into a fixed income fund, so I do earn a little.

WRT “annuities” are you referring to short term, or the long term type like 777 sells? ( not interested in those).

I’m retiring in 4 years so I am looking at going into a more protected mix
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Old 12-07-2018, 12:16 PM
  #151  
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Originally Posted by vette6799 View Post
The wonderful /s, if not logical, irony of the market. Any sign of a less hot economy and slower wage growth is good for equities.

I'd make no bets on labor participation rates due to systemic issues that won't change any time soon. On top of that, advanced manufacturing and those pesky, intelligent machines are waiting in the wings.


It does seem ironic that the market doesn’t like full employment. I understand why, but it seems backwards.

Last edited by need-for-speed; 12-07-2018 at 12:17 PM.
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Old 12-07-2018, 12:39 PM
  #152  
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Originally Posted by need-for-speed View Post


A good thought indeed

Any money that I “ pull out” goes into a fixed income fund, so I do earn a little.

WRT “annuities” are you referring to short term, or the long term type like 777 sells? ( not interested in those).

I’m retiring in 4 years so I am looking at going into a more protected mix
Annuities tend to be front end loaded as far as fees and such. Going into them this late in game might be unwise. So buyer beware and watch out for all the details. Annuities have been noted for having a lot of gotyas.
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Old 12-07-2018, 12:47 PM
  #153  
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Originally Posted by need-for-speed View Post




It does seem ironic that the market doesn’t like full employment. I understand why, but it seems backwards.
Guess the market doesn't like things as much as we thought it did...now down about 300.
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Old 12-07-2018, 12:50 PM
  #154  
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Atlanta Fed's GDP now forecast has been lowered to 2.4% for Q4.

We need to hit 2.1% in Q4 to finally get a year of 3% GDP growth.

It's gonna be close. Atlanta is typically the most rosy forecast.
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Old 12-07-2018, 01:16 PM
  #155  
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Originally Posted by Chuck72 View Post
Annuities are much-improved products, nowadays, as compared to a decade or so ago.
Read the fine print, no 2 annuities are exactly the same because they are an insurance product regulated by 50 states.

Generally, fixed annuities (monthly streams of cash paid out) make sense for retirees who don't want to outlive their assets and want to gather the "mortality benefit" of about 3-4%. Fixed Annuity products are basically tax-deferred CD's; variable annuitieis are basically just tax-deferred mutual funds.
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Old 12-07-2018, 01:20 PM
  #156  
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Originally Posted by 69L46 View Post
Wonder if we'll ever crack that 63.0% LPR number again? Extremely stubborn in light of the current demographics.
The dropoff in Men Aged 19-55 is key. It used to have an LPR of 95% and is now down to about 80% as I recall. Overall, All Men down from 75% to 65% in the last 30 years.
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Old 12-07-2018, 01:22 PM
  #157  
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WOW! There is a crap load of opinion to read in this thread but I think I saw most of it and I'm a little surprised that while some of what is going on here lately is covered in the opinions a BIG PIECE of puzzle has yet to be commented on.

Yes, this is about potential tariffs and Yes, is about the potential in that for slow down.

It's also in no small part due to tighter money policy. We, the USA, is a long way from near 0% interest rates. Sure 2.8% - 3.0% for a 10 year bond is still stupid low but it does mark a move considerably higher than when Donald Trump took office.

But where I think a lot of people are missing the story comes down to that classic "ugly American" view that sees only what is happening within our own boarders as either important or worth paying attention to. This may even be a "blinders on" situation made worse by a sense of populism popular in politics today.

Take a look at the USA in the world over the last 2 years.

Then REMOVE as best you can your political Bias. If you support Donald Trump you're likely giving him too much credit and if you think he's a political mistake you're very likely blaming him far too much.

If you can look at the WORLD's Economy without political Bias.

Here's what you'll see.

Love him or hate him......the election of Donald Trump came as a surprise to most of the world along with no small number of Americans themselves.

Money Savvy moves in the investing world don't make decisions based in what they want politically.

An investor thinking clearly INVESTS FOR THE WORLD AS IT IS......not for the world they would prefer.

Go back to 2016 just prior to DJT being elected. There was little reason to see what was coming. Trump's election was possible but seemed less likely.

When the results came in not only did investors quickly re-allocate for a world where an actual Business friendly administration in the USA was coming to power ...... it actually did so with so very much enthusiasm that it started a momentum trade. Soon any dip was to be bought and no rally so strong it should be sold.

The numbers and policy backed all of this up for a full year in 2017. Nothing but GOOD NEWS in 2017 for America's Equity Markets. Inflation was tame, rates began to rise but nothing scary in the year that ended and started a new year in 2018 with a long awaited and I would describe it as 'over-due" corporate tax reform.

In short we were ROCKIN!! Faster growing and it showed up in the divergence from other developed markets in terms of your performance in the American based Equity indexes vs other world indexes......virtually all of which were left in the dust.

2018 ushered in more out- performance in January........but then it happened.

Our first worries and they aren't small concerns.

1. Interest rates. Our rates are now quite a bit higher than in the rest of the developed world. Not high historically but high enough that there is actually now some yield to be had and an actual competition for investment capital when allocation decisions are made. Equities no longer have "TINA" going for them as a catalyst to the upside as they have since 2008.

2. Tariffs. Threats and a dead line approaching started last spring. The Volatility started soon after. As we approach the end of the year and those deadlines get closer without a deal in place investors have to factor in the possibility that earnings expectations for multi-national American companies may be set too high. Obviously adjusting expected earnings lower is going to put pressure on the prices an investor will pay.

3. Alternative Investment. There is an entire WORLD outside our boarders. Yeah, I know a lot people here don't even want to talk about .....THEM.......the foreigners. Welcome to populism and it's stupidity. Fall into this trap and you just might well miss the biggest reason American markets are spitting and stumbling like an airplane running out of fuel mid-flight. Check out the under performance in the Equity markets of the world OUTSIDE the USA vs INSIDE the USA over the last 2 years. Then look at our bond market with an actual yield even as other markets are still stubbornly stuck closer to ZERO rates.

Divergence of performance. A lot of it makes good sense. We are doing better than they are and we are more business friendly. But layer on tariffs and everything changes in favor of the under performers that won't be facing the tariffs vs the more richly valued American equities that have left them in the dust over the last 2 years.

Investing is about the future. Where you think things are going to be 6 months, a year or even farther out in time.


No matter what your political view though......the bottom line is still the same.

There is more to worry about now than there was 1 year ago and the divergence of American out performance has only widened. That suggests you should have been selling some US off and buying the under performers anyway......the threat of tariffs only makes the argument to do so stronger. As the interest rate curve flattens many people are locking in what may turn out to be a good place to buy yield when you look back 6 months to a year from now. This is another place taking away the potential dollars headed for American Equities.

None of these moves are particularly good for US Equities.

In this as a whole I find my reason to expect that until the tariff threat is resolved we probably keep seeing the "dips" NOT BOUGHT and the "rips" sold when they happen.

It's not the end of the world.......it;'s just the end of what was in 2017 and a lot of 2018.

Stay tuned......if someone "blinks" either in China or Washington and you could be back to the races again PDQ!!

But above all.....leave your politics out of this.

At best it'll blind you to what you should be doing......and at worst it can hurt you BADLY if you actually invest with it too seriously in mind.

Just as many Conservatives FAILED to participate in a GREAT MARKET during Obama's time in office because they found what he was doing to be REVOLTING.......you could actually be cheer leading Trump so strongly that you could fail to recognize change in a market sending you some pretty scary signals that a less political person easily sees.

Last edited by Krystal; 12-07-2018 at 01:29 PM.
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Old 12-07-2018, 01:38 PM
  #158  
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Originally Posted by vette6799 View Post
Succinct summation. I'm interested in seeing the GDP number next month for the 4th quarter. Re the tariffs, if the IP and mandatory information sharing issues are solved I'll be a happy camper.
Listening to Navarro, the administration is taking a pretty hard line on trade. We'll see if push comes to shove, but 90 days, especially when dealing with China, is a pretty short window.
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Old 12-07-2018, 02:32 PM
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Originally Posted by Krystal View Post
Just as many Conservatives FAILED to participate in a GREAT MARKET during Obama's time in office because they found what he was doing to be REVOLTING.......you could actually be cheer leading Trump so strongly that you could fail to recognize change in a market sending you some pretty scary signals that a less political person easily sees.
Krystal, I know of very few conservatives who didn't invest because they disliked Obama and/or Clinton. Besides, the GOP control of Congress for most of that time was a counter to them.
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Old 12-07-2018, 02:40 PM
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Originally Posted by 69L46 View Post
Listening to Navarro, the administration is taking a pretty hard line on trade. We'll see if push comes to shove, but 90 days, especially when dealing with China, is a pretty short window.
China is playing a long game and they are prepared to play hardball. They will give us bits and pieces here and there so Trump saves face but as I said in an earlier post, from my perspective if there can be solid gains made with IP protection and not having to share technology to manufacture in China I'd happily accept that.

The big gorilla, IMO, remains the China 2025 initiative as that could really lay us low. Trump is aware of this and he has mentioned it several times, but I don't think he really gets what will be necessary from a cash infusion standpoint or if he does, he hasn't announced anything to make one think action is forthcoming short of China not doing its R&D. For the US to play this game, Ii will be another Manhattan project that will require a ton of money assuming we have the people in our universities and businesses able to do the research. Make it part of the DOD if necessary but the clock is ticking.
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