Investing in the stock market - Discussion

[nuckin_futz]

7 hours ago, RU SERIOUS said:

BTW, get ready for a Recession - That is a 100% certainty. You can take that to the Bank!

At the start of the pandemic the unemployment rate was 5.6 - 5.9%, it's currently 4.9%.

 

Recessions are usually preceded by layoffs. I don't see many signs or announcements of layoffs. In fact quite the opposite, employers are clamouring for employees. In the US job growth has been obscenely strong.

 

There's huge pent up demand in most industries. This is not the recipe for a 100% certain recession. If there is one I would think it would be very mild.

[nuckin_futz]

Big week for earnings. Wal Mart is always a bell-weather for the US consumer. They are slashing quarterly and yearly earnings estimates.

 

Walmart’s slashed profit outlook sends warning about state of the American consumer

Walmart Inc. cut its profit outlook again in a surprise warning weeks ahead of its earnings report, sending retailer shares tumbling and raising new questions about US consumers’ ability to sustain their voracious spending habits with inflation at a four-decade high. 

 

Adjusted earnings per share will fall as much 13 per cent in the current fiscal year as US shoppers spurn big-ticket items and focus on buying less-profitable groceries amid soaring inflation, Walmart said in a statement Monday. Two months ago, the world’s largest retailer had said earnings per share would only dip about 1 per cent. In February, the company had predicted a modest increase. 

 

Walmart’s warning kicks off a week of bellwether earnings reports from consumer-goods giants including Coca-Cola Co., McDonald’s Corp. and Procter & Gamble Co. Another big US retailer, Target Corp., cut its profit forecast last month, citing a need to take costly actions to get rid of stockpiles of merchandise that its customers were increasingly reluctant to buy. 

 

“When things go wrong at Walmart, you can extrapolate that it’s happening at other retailers, as well,” said GlobalData’s Neil Saunders. “This will potentially send shock waves through the sector.”

 

Walmart slid as much as 10 per cent in late trading to US$118.77. The shares had dropped 8.8 per cent this year through today’s close. Target, Amazon.com Inc. and Costco Wholesale Corp. also declined in late trading.

 

The dimmer outlook at Walmart gives US policy makers and investors a late-breaking data point to factor in as they try to determine where the economy and interest rates will be headed over the coming months.

 

The Federal Reserve is widely expected to increase its key policy rate by three quarters of a percentage point later this week, looking to tamp down stubborn inflation even as signs accumulate that the economy could be tilting into a recession.

 

“When something impacts a retailer that everyone knows like Walmart, that can lead to a further slide in consumer confidence. That can lead us down a recession road,” Jennifer Bartashus of Bloomberg Intelligence said in an interview. 

 

A reading on gross domestic product due Thursday could confirm that the economy has contracted for two quarters in a row. That makes the Fed’s task even more delicate as it tries to cool off rising prices without causing a more severe downturn in activity.

[Warhippy]

14 minutes ago, nuckin_futz said:

Big week for earnings. Wal Mart is always a bell-weather for the US consumer. They are slashing quarterly and yearly earnings estimates.

 

Walmart’s slashed profit outlook sends warning about state of the American consumer

Walmart Inc. cut its profit outlook again in a surprise warning weeks ahead of its earnings report, sending retailer shares tumbling and raising new questions about US consumers’ ability to sustain their voracious spending habits with inflation at a four-decade high. 

 

Adjusted earnings per share will fall as much 13 per cent in the current fiscal year as US shoppers spurn big-ticket items and focus on buying less-profitable groceries amid soaring inflation, Walmart said in a statement Monday. Two months ago, the world’s largest retailer had said earnings per share would only dip about 1 per cent. In February, the company had predicted a modest increase. 

 

Walmart’s warning kicks off a week of bellwether earnings reports from consumer-goods giants including Coca-Cola Co., McDonald’s Corp. and Procter & Gamble Co. Another big US retailer, Target Corp., cut its profit forecast last month, citing a need to take costly actions to get rid of stockpiles of merchandise that its customers were increasingly reluctant to buy. 

 

“When things go wrong at Walmart, you can extrapolate that it’s happening at other retailers, as well,” said GlobalData’s Neil Saunders. “This will potentially send shock waves through the sector.”

 

Walmart slid as much as 10 per cent in late trading to US$118.77. The shares had dropped 8.8 per cent this year through today’s close. Target, Amazon.com Inc. and Costco Wholesale Corp. also declined in late trading.

 

The dimmer outlook at Walmart gives US policy makers and investors a late-breaking data point to factor in as they try to determine where the economy and interest rates will be headed over the coming months.

 

The Federal Reserve is widely expected to increase its key policy rate by three quarters of a percentage point later this week, looking to tamp down stubborn inflation even as signs accumulate that the economy could be tilting into a recession.

 

“When something impacts a retailer that everyone knows like Walmart, that can lead to a further slide in consumer confidence. That can lead us down a recession road,” Jennifer Bartashus of Bloomberg Intelligence said in an interview. 

 

A reading on gross domestic product due Thursday could confirm that the economy has contracted for two quarters in a row. That makes the Fed’s task even more delicate as it tries to cool off rising prices without causing a more severe downturn in activity.

Have you seen what's going on in China lately?

 

Oh damn that real estate sector is looking mighty fragile

[bishopshodan]

Traders who bet on friendlier Fed are about to see if they're right

https://www.bnnbloomberg.ca/traders-who-bet-on-friendlier-fed-are-about-to-see-if-they-re-right-1.1797631

 

Optimism....?

 

 

[Boudrias]

42 minutes ago, bishopshodan said:

Traders who bet on friendlier Fed are about to see if they're right

https://www.bnnbloomberg.ca/traders-who-bet-on-friendlier-fed-are-about-to-see-if-they-re-right-1.1797631

 

Optimism....?

 

 

Just pick the companies you want to hold and pick away at them. I have been buying GOOGL, CVS, BX. On the Canadian side I buy RY, TD, EIF, GSY if the yield is + 4%. Markets are so volitile that waiting is smart. 

[bishopshodan]

4 minutes ago, Boudrias said:

Just pick the companies you want to hold and pick away at them. I have been buying GOOGL, CVS, BX. On the Canadian side I buy RY, TD, EIF, GSY if the yield is + 4%. Markets are so volitile that waiting is smart. 

Seems like tech is the way to go...

But I hear you, hold. As mentioned before, I just a dabbler. 

[Warhippy]

What happens if China's middle class starts defaulting on massive amounts of consumer debt?

 

It is apparently starting to happen regarding mortgages and loans.  Banks in China are refusing to allow people in debt to access their money and other banks to save themselves are refusing people access just because.  There is an estimated 13.7 trillion in development development projects, commercial and consumer loans/mortgages currently at risk in China.  While I have NO doubt the state will step in and just say there is no problem and wipe the slate.  What would that mean to the global economy?  China's middle class by any metric of the G20 nations is over 400+ million.

 

This is currently on top of continued covid related shut downs and slow downs.  Job issues and now a lack of material for processing and food crops from Russia/Ukraine which is artificially raising the prices of staples in the nation the same way it is over here but "is not inflationary" according to the state.  Evergrande's suppliers have stopped paying back bank loans, tens of millions of personal consumers refuse to pay back mortgage loans or lines of credit.  Banks withholding cash....

 

So what happens to global markets if even 1/4 of this crashes or comes to fruition?

 

Anyone smarter than me want to chime in?

 

https://www.bloomberg.com/news/articles/2022-07-24/china-s-property-crisis-burns-middle-class-stuck-with-huge-loans

 

https://www.barrons.com/articles/china-lehman-style-crisis-property-bust-51658521924

 

https://www.abc.net.au/news/2022-07-27/china-mortgage-boycott-evergrande-suppliers-to-stop-bank-loans/101261020

[StanleyCupOneDay]

On 7/21/2022 at 8:15 AM, Warhippy said:

Ummm....I'm pretty sure it's corporate greed causing a lot of these issues @RU SERIOUS.

 

With oil under $100 off and on for weeks why is the price at the pump well over $2.00 per litre?  

 

As for "overstimulation" causing supply chain issues.  Factories everywhere were shut down for months, the resources they run on were bit being extracted or refined.

 

Blaming Biden for two rounds of covid payments and one via trump, or Trudeau for CERB payments causing this is entirely myopic and shortsighted.  It's the poorest possible excuse for what is happening right now which was and is a series of systemic problems that started back in 2009.  Over a decade of artificially low interest rates, over a decade of endless housing and rental price increases, wage stagnation; centralization and outsourcing of jobs/positions as well as automation.  Poorly thought out conceived tax cuts for some and increased taxation and service cuts for others.

 

At these prices per barrel with current supply and development, gas should be around $1.35 a litre.  The Star just proved that grocery stores are profiting immensely on food issues by jacking prices well above inflationary rates.  Rental prices have almost doubled in less than 5 years across the nation and much of the US

 

But.....yes.  Let's blame Biden for $3200 in total covid payments over a year and the multi party canadian government (not Trudeau because it was an ALL party affair that created and pushed CERB through) for these issues and not ask why Oil is as low as it is but prices are as high as they are.

 

Because with the additional 32 cents in municipal and provincial taxes Vancouver is $1.95.9 per litre.  But in the Okanagan it is $2.10.9 per litre meaning there is an almost 50 cent per litre discrepancy and hey if that isn't just the feds fault I don't know what is 

 

https://www.bnnbloomberg.ca/oil-holds-below-100-as-traders-assess-us-gasoline-demand-1.1794771

 

Oil declined as investors assessed signs of lackluster US gasoline demand and the return of supplies from Libya.

 

West Texas Intermediate futures fell toward US$95 a barrel. The slump came after a US report showed gasoline inventories rose more than expected last week, while stalling demand sent the motor fuel’s premium over crude plummeting.

Bang on. Monopolistic corporations own basically everything now and with no competition can charge whatever they want knowing consumers don’t have any other options. It’s greed plain and simple for why everything’s skyrocketing in price now. Blaming governments you don’t like because of their ideology for inflation is ridiculously narrow minded and purely agenda driven bias. Same goes for any Albertan liberal/progressive blaming it on Kenney’s former government.

[Warhippy]

1 hour ago, StanleyCupOneDay said:

Bang on. Monopolistic corporations own basically everything now and with no competition can charge whatever they want knowing consumers don’t have any other options. It’s greed plain and simple for why everything’s skyrocketing in price now. Blaming governments you don’t like because of their ideology for inflation is ridiculously narrow minded and purely agenda driven bias. Same goes for any Albertan liberal/progressive blaming it on Kenney’s former government.

If you look at Rogers and their profit earnings over the last 3 months prior to their big outage it's a little ridiculous. Canada is an absolute perfect example of what happens when monopolies control essential services

[Chris12345]

5 hours ago, Warhippy said:

If you look at Rogers and their profit earnings over the last 3 months prior to their big outage it's a little ridiculous. Canada is an absolute perfect example of what happens when monopolies control essential services

No flying competition = bad service.

[Elias Pettersson]

It looks like we are officially in a recession.  2 consecutive quarters of negative growth...

 

[ronthecivil]

2 minutes ago, Elias Pettersson said:

It looks like we are officially in a recession.  2 consecutive quarters of negative growth...

 

If your poor and renting, or poor and paying a big fat mortgage, and suffering through inflation, then sure, your in a recession. And the companies that you use, like Walmart, are going to suffer.

 

If your "rich" as in your not really stressing about high interest rates because you own and have a small or no mortgage, then the recession is for others, or perhaps a reason to look at your portfolio and shrug. Companies that the non poor use, like Microsoft for employment productivity, or Ford for having your big ol truck and what not, are absolutely hitting it out of the park.

 

But ya, technically a recession.

[I.Am.Ironman]

I thought a recession technically needed 2 quarters of negative growth AND and increase in unemployment?

[Elias Pettersson]

‘We’re heading into a housing recession’: Here’s what the NAHB CEO sees in real estate right now — and why it spells big trouble for the economy

 

https://www.msn.com/en-us/money/markets/we-re-heading-into-a-housing-recession-here-s-what-the-nahb-ceo-sees-in-real-estate-right-now-and-why-it-spells-big-trouble-for-the-economy/ar-AA1048QK?ocid=msedgntp&cvid=7c7c734bcd7545b29a31efbc34e316aa

 

Housing, which is a key segment of the national economy, looks extraordinarily weak right now, according to a recent report by the National Association of Home Builders (NAHB).

 

“We’re heading into a recession,” NAHB CEO Jerry Howard told Bloomberg in a recent interview. He described how a rapid decline in homebuilding and demand for new homes could drag the national economy lower.

 

Here are some of the highlights of Howard’s thesis.

 

Housing leads every recession since Second World War

 

Residential real estate is an integral part of the American economy. In fact, housing activity contributes between 15% to 18% of gross domestic product (GDP) every year, according to the NAHB. A slowdown in this sector naturally pulls down the rest of the economy.

 

A decline in home building and buying has led to every recession since the end of the Second World War, according to Howard. The association’s latest report indicates that buyers and builders are both pulling back from the market yet again, which could be a leading indicator for another recession on the horizon in 2022.

 

On the demand front, potential homebuyers have receded from the market. Existing home sales slid 5.4% in June. Meanwhile, borrowing capacity has been curtailed by rising interest rates. The average mortgage rate has accelerated at the fastest pace in 35 years. A 15-year fixed rate mortgage is now about 4.8%, up from 2.2% a year ago. These factors have effectively destroyed demand.

 

Meanwhile, the supply chain for home building material and the cost of labor continues to increase the cost of building new homes. This is why homebuilders' sentiment dropped 12 points in June, according to the NAHB survey.

 

A dangerous situation

 

The fundamental weakness in both demand and supply-side factors creates a “dangerous situation,” said Howard. Housing has not only led the country into every recession, but it has also led the nation out of every recession since the Second World War. This time the recovery could be slower.

 

There’s no easy solution to the lack of labor and supply chain disruptions that plague the industry. If these issues persist, the economic recovery could take longer. Howard believes regulators need to get involved to reignite growth.

 

Regulators need to get serious

 

Policy changes are essential to resolve issues in the housing market, according to Howard. He suggests that regulators try to secure a deal with Canadian authorities to improve the supply of lumber into the U.S. That would significantly reduce the cost pressures on homebuilders.

 

Policies to encourage labor supply would also help. Better training for skilled labor and higher immigration of tradespeople would improve homebuilder sentiment.

Some regulations, however, need to be reduced to boost the homebuilding sector. Development charges and prohibitive planning regulations on the state and local level could be a bottleneck on housing supply.

 

Lowering these barriers could play a part in stabilizing homebuilding and helping the national economy course-correct. However, these recommendations may not be enough to prevent the near-term pressures homebuilders face.

 

Some economists believe a housing-led recession may be inevitable — if it hasn’t already begun.

[Ghostsof1915]

Builders will have to switch to doing Renos until business picks up again. 

The real estate market needs a major adjustment. But it will probably just be minor.

And it will be the middle class that gets squeezed. Not the rich. 

[Elias Pettersson]

1 hour ago, Ghostsof1915 said:

Builders will have to switch to doing Renos until business picks up again. 

The real estate market needs a major adjustment. But it will probably just be minor.

And it will be the middle class that gets squeezed. Not the rich. 

New Home builders don’t do renovations. Two different businesses. If they can’t build new homes that will add to the supply issues. But the bigger issue is if New Home builders stop building that will put a lot of people out of a job.  It will cause unemployment to spike and then we get into a cycle of not only negative economic growth but an increase in unemployment which will keep us in a recession for a long time. 

[Ghostsof1915]

4 minutes ago, Elias Pettersson said:

New Home builders don’t do renovations. Two different businesses. If they can’t build new homes that will add to the supply issues. But the bigger issue is if New Home builders stop building that will put a lot of people out of a job.  It will cause unemployment to spike and then we get into a cycle of not only negative economic growth but an increase in unemployment which will keep us in a recession for a long time. 

My brother started his business doing Renos. Then went to building homes. Because when he and his partner started the economy was not great. 

So unless you are a mega corporation, yes you can switch. It's either that or you are out of business. Flexibility is the name of the game. 

He's now building on the Gulf Islands and in White Rock. He's basically training his son to take over his business. But knowing my brother, he won't stop working, he'll just lower his workload. 

 

[Chris12345]

11 minutes ago, Elias Pettersson said:

New Home builders don’t do renovations. Two different businesses. If they can’t build new homes that will add to the supply issues. But the bigger issue is if New Home builders stop building that will put a lot of people out of a job.  It will cause unemployment to spike and then we get into a cycle of not only negative economic growth but an increase in unemployment which will keep us in a recession for a long time. 

They do in my neighborhood....there's a reno just down the street the same guy has new build going.

[Elias Pettersson]

19 minutes ago, Ghostsof1915 said:

My brother started his business doing Renos. Then went to building homes. Because when he and his partner started the economy was not great. 

So unless you are a mega corporation, yes you can switch. It's either that or you are out of business. Flexibility is the name of the game. 

He's now building on the Gulf Islands and in White Rock. He's basically training his son to take over his business. But knowing my brother, he won't stop working, he'll just lower his workload. 

 

Building a house and doing a renovation are two completely different things. Different trades are involved. If you are renovating a kitchen or a bathroom you don’t need a roofing guy or a framer. You don’t need landscapers and guys who pour the concrete. If you are building a new home there are literally 10’s even hundreds of trades people involved. If you are renovating a kitchen or a bathroom there are guys who can do that all by themselves. 
 

If you eliminate new home building not only do

you eliminate thousands of jobs but you also eliminate the need to purchase all the materials and supplies needed to build that home which also eliminates those jobs as well. 
 

Also, New Home builders don’t always custom build homes. They need to go out and buy land or properties to tear down and build.  So if they stop building they also stop buying which further slows down the real estate market. 
 

It’s a vicious cycle and simply telling builders to switch from building new homes to doing renovations isn’t going to fix the problem. 

[Elias Pettersson]

27 minutes ago, Chris12345 said:

They do in my neighborhood....there's a reno just down the street the same guy has new build going.

There are lots of one offs and mom and pop shops that dabble in everything. But those people aren’t the ones driving the real estate market for the most part.