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Stock Market under Trump (1 Viewer)

Consumer debt

government deficit

inflation

The jobs created aren’t good jobs and when the recession or depression hits you’ll see even the bad jobs dry up. They can’t fill a lot of the what good jobs there are because they can’t find qualified candidates. 

Semiconductor demand is way down 

Commodity demand is way down 

Yield curve is inverting

Appliance shipments are down

Transports are slowing down too

Trump is playing a game of chicken with all of our futures right now. It is possible he’ll win with China though I wouldn’t count on it. Why is he saying the Fed should cut rates if everything is hunky dorry like you say?
Consumer debt actually looks great right now.  Healthy balance sheets for the consumer and nothing like how leveraged it was back in 2008.  Inflation?  Seriously?  Still no inflation which is great for stocks.  Government deficit - sure it is a problem but is has been for a long time.  Unemployment levels at historic lows so this is a big plus.  

Yield curve is your biggest selling point but inversions do not always lead to a recession.

Don't fight the Fed.  With them pausing and likely cutting later this year that bodes well for stocks.

 
Consumer debt

government deficit

inflation

The jobs created aren’t good jobs and when the recession or depression hits you’ll see even the bad jobs dry up. They can’t fill a lot of the what good jobs there are because they can’t find qualified candidates. 

Semiconductor demand is way down 

Commodity demand is way down 

Yield curve is inverting

Appliance shipments are down

Transports are slowing down too

Trump is playing a game of chicken with all of our futures right now. It is possible he’ll win with China though I wouldn’t count on it. Why is he saying the Fed should cut rates if everything is hunky dorry like you say?
Debt to GDP is actually decreasing.   Mortgage delinquency rates are still trending down.     

The deficit remains a problem - it has been for decades now.

Inflation is insanely low.  The Fed still hasn't hit their target 2% and I suspect they won't for quite a while.  I don't think we'll see inflation issues for a couple decades.

I've never seen semiconductor shipments as a leading or coincident indicator, but I'll look into it.

Commidities - tariff related.

Appliances - tariff related.

Transport graph - I don't look at the markets for reflections on the fundamentals.  I do it the other way around. 

DJT is correcting the limp noodle trade policies that we've had since Clinton.  Clinton headed the effort to get China into the WTO.  What a massive mistake.  Our current tariff structure with China is hugely lopsided in their favor - they put up significant barriers to entry and expect free entry here.  DJT should have started with simply going the reciprocal tariff route - easy to understand and easily defended.  This doesn't even include the IP theft, which ,IMO, is the biggest long term issue and must be addressed.  The wailing and gnashing of teeth over this fight is simply ignoring the long term forces at play.  This is way, way overdue, and just like with NK our last POTUS simply whistled past the graveyard  here (maybe a good thing considering the deal that was struck with Iran).

Yield curves are an interesting point and they long end of the curve has definitely taken some hits lately.  A good commentary to read.

 
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Don't fight the Fed.  With them pausing and likely cutting later this year that bodes well for stocks.
Like the rest of the post but a rate cut right now is a really bad sign for the markets if history on the last number of recessions holds.

 
Which ones?  I really am interested to see what you see here that's so bad.  What I see:

- Employment looks great.  The other major indicators here are still trending up.

- GDP looks decent.  The US remains the brightest star on the world economic scene (not close, really).

- Mortgage applications look very strong.  (I.e. housing is looking pretty good at present).

- Transport indicators, like rail traffic and truck tonnage, also look very strong.  

Please do chime in with what you see that is rolling over.  I put a lot of time into tracking recession indicators and I have significant (for me) funds in the markets, so I'm way more interested in green than POTUS bashing.  Right now I see green.  Show me red.
The two year yield rate dropped under 2.000 last week, for starters. 

Edit: before this gets weird, I mean in comparison to its recent yields - there’s been a sharp drop. 

 
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Which ones?  I really am interested to see what you see here that's so bad.  What I see:

- Employment looks great.  The other major indicators here are still trending up.

- GDP looks decent.  The US remains the brightest star on the world economic scene (not close, really).

- Mortgage applications look very strong.  (I.e. housing is looking pretty good at present).

- Transport indicators, like rail traffic and truck tonnage, also look very strong.  

Please do chime in with what you see that is rolling over.  I put a lot of time into tracking recession indicators and I have significant (for me) funds in the markets, so I'm way more interested in green than POTUS bashing.  Right now I see green.  Show me red.
Don’t waste your time, their gameplan is whine 24/7 and eventually when there is an inevitable pullback we are due for they will claim “told you so”. Really weak.  

 
Don’t waste your time, their gameplan is whine 24/7 and eventually when there is an inevitable pullback we are due for they will claim “told you so”. Really weak.  
Pullbacks are inevitable. Timing is not.  

You can’t actually believe these tariffs have been good for the economy, can you?

 
You can’t actually believe these tariffs have been good for the economy, can you?
Short term they are a hindrance.  Long term they could be a big boon - there's no doubt that we are on a terrible stance with China.  Depends on what comes out of them.

BTW, I'm really only looking at the China issue.  Mexico, from a US standpoint, is deep down in the noise.  Terrible for them, irrelevant for us.

Pullbacks are inevitable. Timing is not.  
Timing is multivariate, and sometimes those variables are unknown.   (BTW, the chances that this pullback is very buyable is pretty high, IMO, so the timing is likely to be fortuitous.)

 
Which ones?  I really am interested to see what you see here that's so bad.  What I see:

- Employment looks great.  The other major indicators here are still trending up.

- GDP looks decent.  The US remains the brightest star on the world economic scene (not close, really).

- Mortgage applications look very strong.  (I.e. housing is looking pretty good at present).

- Transport indicators, like rail traffic and truck tonnage, also look very strong.  

Please do chime in with what you see that is rolling over.  I put a lot of time into tracking recession indicators and I have significant (for me) funds in the markets, so I'm way more interested in green than POTUS bashing.  Right now I see green.  Show me red.
The auto sector is rolling over. Job cuts are up, production cuts are up, but inventory levels continues to rise which will lead to additonal cuts. 

From the articles.

In May, new vehicles spent 74 days on the lot, highest number for May since 2009.

Job cuts are up 207% through April compared to last year. 

https://www.aftermarketnews.com/jd-power-new-vehicle-sales-slow-discounts-rise-but-average-prices-break-records/

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/6E6624DC-7BDC-11E9-A410-83D46AC351D9

GDP and the unemployment rate aren't leading indicators to a recession. 

 
What in his post indicated pleasure?
Just talking in general here. 

In total I think I only have around 10K in the market so I don`t really care.  My parents have money that I really do not want them to lose though.  Just seems here when the market is up nobody says anything, when it goes down it seems people are happy.

 
Short term they are a hindrance.  Long term they could be a big boon - there's no doubt that we are on a terrible stance with China.  Depends on what comes out of them.

BTW, I'm really only looking at the China issue.  Mexico, from a US standpoint, is deep down in the noise.  Terrible for them, irrelevant for us.

Timing is multivariate, and sometimes those variables are unknown.   (BTW, the chances that this pullback is very buyable is pretty high, IMO, so the timing is likely to be fortuitous.)
:goodposting:

 
The auto sector is rolling over. 
This is a good point.  I wrote a while back that of everything out there auto related debt was pretty bad and I believe the market is maybe too flush with that debt to buy off on more.  As a population we spend insane amounts of money on cars (anything more than 20% of gross income is way too high).

GDP and the unemployment rate aren't leading indicators to a recession. 
GDP is way too slow to be a leading indicator, I agree.  Disagree pretty strenuously on the unemployment rate.  It can be a pretty darn good indicator.  Heck of a long article, but discussed thoroughly here.

 
Short term they are a hindrance.  Long term they could be a big boon - there's no doubt that we are on a terrible stance with China.  Depends on what comes out of them.

BTW, I'm really only looking at the China issue.  Mexico, from a US standpoint, is deep down in the noise.  Terrible for them, irrelevant for us.

Timing is multivariate, and sometimes those variables are unknown.   (BTW, the chances that this pullback is very buyable is pretty high, IMO, so the timing is likely to be fortuitous.)
Okay. Have fun. 

 
Henry Ford said:
As of this moment, the Dow, Nasdaq, and S&P500 have all lost value over the last 365 days.
It's been flat for nearly 18 months. Over half his term.

 
It's been flat for nearly 18 months. Over half his term.
It’s basically the only thing he’s legitimately been able to crow about and that’s about to end. Any decline that happens will be the evil democrats fault who are also rooting for it to happen. 

 
It’s been going on longer than that. The definite “GET OUT” indicators happened in late Q3 and early Q4 last year despite the huge stock buyback gains over the previous year.  Anyone counting on stock growth right now is not in an optimal position. 
When lawyers talk market.. lmao

 
GoBirds said:
Just like you all predicted, the market tanked as soon as Trump was elected.  :lmao:
The side that does not control the White House will invariably look at economic indicators that look bad and blame the current administration.  Often times they will even question the validity of any statistics that look good for the current administration.   Meanwhile the party that does have control of the White House will claim the other party is rooting against American prosperity so the current president looks bad.

I have been on this board more than 15 years and this has always been the case.

 
Sand said:
Which ones?  I really am interested to see what you see here that's so bad.  What I see:

- Employment looks great.  The other major indicators here are still trending up.

- GDP looks decent.  The US remains the brightest star on the world economic scene (not close, really).

- Mortgage applications look very strong.  (I.e. housing is looking pretty good at present).

- Transport indicators, like rail traffic and truck tonnage, also look very strong.  

Please do chime in with what you see that is rolling over.  I put a lot of time into tracking recession indicators and I have significant (for me) funds in the markets, so I'm way more interested in green than POTUS bashing.  Right now I see green.  Show me red.
I would really like if someone could better explain this to me and since we go way back I chose you.

IMO:  ALL jobs are not equal.  Yet I believe all jobs are now counted EQUALLY in regards to the unemployment numbers.

To be in the top 50% of wage earners you need to make $30,000+ per year.  That's TOP 50%.  That means 49% of working people (jobs) are making less than $30k per year.  And I'm guessing these jobs don't come with many benefits like 401k/pension, healthcare, vacation, maternity leave etc.  This is worrisome.

My question is:  should we really be celebrating "low unemployment" numbers when a significant percentage of the jobs being counted are likely part-time, low/hour wage with no benefits type jobs?

To me there is a difference in the job of let's say an mechanical engineer working for a high tech robotics company with a 401k, healthcare, vacation etc vs a mom working part time at Pottery Barn while her kids are in school with none of that.  One is a career the other is just a way to help make ends meet - and I'm not sure how sustainable that type of "job" really is or if we should be celebrating it as the base to a lasting strong economy.

When I was a grocery bagger in HS - I didn't consider that a real job...it was just a way to have gas/date money.  That's not true anymore.

If what I have presented is true: do you really think employment looks great?

 
I would really like if someone could better explain this to me and since we go way back I chose you.

IMO:  ALL jobs are not equal.  Yet I believe all jobs are now counted EQUALLY in regards to the unemployment numbers.

To be in the top 50% of wage earners you need to make $30,000+ per year.  That's TOP 50%.  That means 49% of working people (jobs) are making less than $30k per year.  And I'm guessing these jobs don't come with many benefits like 401k/pension, healthcare, vacation, maternity leave etc.  This is worrisome.

My question is:  should we really be celebrating "low unemployment" numbers when a significant percentage of the jobs being counted are likely part-time, low/hour wage with no benefits type jobs?

To me there is a difference in the job of let's say an mechanical engineer working for a high tech robotics company with a 401k, healthcare, vacation etc vs a mom working part time at Pottery Barn while her kids are in school with none of that.  One is a career the other is just a way to help make ends meet - and I'm not sure how sustainable that type of "job" really is or if we should be celebrating it as the base to a lasting strong economy.

When I was a grocery bagger in HS - I didn't consider that a real job...it was just a way to have gas/date money.  That's not true anymore.

If what I have presented is true: do you really think employment looks great?
Wow. That low? Our lowest of low positions makes that and we constantly have openings. Right now we have 2 with pension and other bennies listed above. Why are there few candidates? Because what is left is either lazy, worthless losers incapable of keeping a job or they can't pass a drug test. It used to be where companies used recessions to trim the payroll, layoff the highest paid workers. Seen it twice at a company I used to work for. I'm finding it hard to have a recession with massive layoffs because of all the stupid people out there. Good luck finding a competent replacement. You can only lay off the stupid that you have now.

 
I would really like if someone could better explain this to me and since we go way back I chose you.

IMO:  ALL jobs are not equal.  Yet I believe all jobs are now counted EQUALLY in regards to the unemployment numbers.

To be in the top 50% of wage earners you need to make $30,000+ per year.  That's TOP 50%.  That means 49% of working people (jobs) are making less than $30k per year.  And I'm guessing these jobs don't come with many benefits like 401k/pension, healthcare, vacation, maternity leave etc.  This is worrisome.

My question is:  should we really be celebrating "low unemployment" numbers when a significant percentage of the jobs being counted are likely part-time, low/hour wage with no benefits type jobs?

To me there is a difference in the job of let's say an mechanical engineer working for a high tech robotics company with a 401k, healthcare, vacation etc vs a mom working part time at Pottery Barn while her kids are in school with none of that.  One is a career the other is just a way to help make ends meet - and I'm not sure how sustainable that type of "job" really is or if we should be celebrating it as the base to a lasting strong economy.

When I was a grocery bagger in HS - I didn't consider that a real job...it was just a way to have gas/date money.  That's not true anymore.

If what I have presented is true: do you really think employment looks great?
To answer your last question first - no, on the whole it doesn't.  But this isn't a present problem.  This hollowing out of the middle has it's genesis around the Carter administration (not saying Carter was at fault, just the timeline).  This is nothing new and is a chronic issue.  To be made worse with automation (idle hands problem).

This is why I have always liked the U6 measure of employment rather than U3.  U6 does look at underemployment and other items and is the most conservative measure.  Right now it's at 7% or so, which is actually quite good.  And, yes, you are correct that jobs are counted as jobs.  U3 and U6 employment numbers don't dig into distributions of jobs, etc.  (Employment is actually a really deep, hairy subject).  If you want some good discussion of employment numbers I find Mish Shedlock to be really good.  Just note he's a permabear.

Having said all that about the long term issues of job quality my post you quoted is more about more present comparisons, which do look quite good.  DJT can be blamed for a lot of things, but the long term structural decay of middle class employment isn't one of them.

 
Wow. That low? Our lowest of low positions makes that and we constantly have openings. Right now we have 2 with pension and other bennies listed above. Why are there few candidates? Because what is left is either lazy, worthless losers incapable of keeping a job or they can't pass a drug test. It used to be where companies used recessions to trim the payroll, layoff the highest paid workers. Seen it twice at a company I used to work for. I'm finding it hard to have a recession with massive layoffs because of all the stupid people out there. Good luck finding a competent replacement. You can only lay off the stupid that you have now.
That's an individual number.  I'd prefer to reference the household number - which is about 60k or thereabouts now.  I would assume the median includes the zeros from the unemployed, as well.

Interestingly the household number is more than double the individual number, which at least to me indicates that these households include a bread winner and one who is less active in the job market (child rearing?).

 
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Sand said:
This is a good point.  I wrote a while back that of everything out there auto related debt was pretty bad and I believe the market is maybe too flush with that debt to buy off on more.  As a population we spend insane amounts of money on cars (anything more than 20% of gross income is way too high).

GDP is way too slow to be a leading indicator, I agree.  Disagree pretty strenuously on the unemployment rate.  It can be a pretty darn good indicator.  Heck of a long article, but discussed thoroughly here.
It's important to note that the graph there is inaccurate, at least with respect to the Great Recession.

The recession began in December, 2007, end of Q4.  Q1 2008 was a contraction of over 2%.  That little bounce up and down in the unemployment graph that appears to happen right before the recession started was actually through April, 2008.  The bump in unemployment from 5.0-5.4% didn't happen until May, 2008, which was over a quarter after the beginning of the recession.

 
Holds true with the 1949 recession, too.  That graph isn't counting something as a recession until after two quarters of contraction.  It isn't commonly considered to have begun after the late 1949 retraction was confirmed,  GDP retraction actually started at the latest at Q1 of 1949.  there was a very slight tick up in Q3, but it still wasn't as high as Q1, much less Q4 of 1948.

Unemployment is a lagging indicator - some common thinking is that once GDP data comes out showing that a recession has been happening, people start getting laid off en masse.

 
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To answer your last question first - no, on the whole it doesn't.  But this isn't a present problem.  This hollowing out of the middle has it's genesis around the Carter administration (not saying Carter was at fault, just the timeline).  This is nothing new and is a chronic issue.  To be made worse with automation (idle hands problem).

This is why I have always liked the U6 measure of employment rather than U3.  U6 does look at underemployment and other items and is the most conservative measure.  Right now it's at 7% or so, which is actually quite good.  And, yes, you are correct that jobs are counted as jobs.  U3 and U6 employment numbers don't dig into distributions of jobs, etc.  (Employment is actually a really deep, hairy subject).  If you want some good discussion of employment numbers I find Mish Shedlock to be really good.  Just note he's a permabear.

Having said all that about the long term issues of job quality my post you quoted is more about more present comparisons, which do look quite good.  DJT can be blamed for a lot of things, but the long term structural decay of middle class employment isn't one of them.
Thanks.  There things in the economy I definitely don't understand and employment and inflation would be ones that seem to skew positive and not a true reflection of what I see what my own eyes.  Also: To be clear...I've had these concerns long before DJT.  I appreciate the response.

 
What stocks are you guys in that believe we are on the cusp of something really bad happening?

I added a few shares of WPM today. 

Also holding VIRT and KCG

still mostly cash 

all of my 401k in what they call Interest Income Fund which just pays a small amount of interest but can’t go down unless we get negative rates maybe?

 
I think a drop of 6% in one month qualifies as something bad happening.  If fundamentals still look attractive why would one be looking to sell now on the drop?  This seems like emotional investing to me.

 
What stocks are you guys in that believe we are on the cusp of something really bad happening?

I added a few shares of WPM today. 

Also holding VIRT and KCG

still mostly cash 

all of my 401k in what they call Interest Income Fund which just pays a small amount of interest but can’t go down unless we get negative rates maybe?
Copper.  Get rid of copper if you believe as I do that we’re on the edge. 

Edit: just checked and, again, probably should have done that by October. 

 
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Copper.  Get rid of copper if you believe as I do that we’re on the edge. 

Edit: just checked and, again, probably should have done that by October. 
I’m not following. You see the price of copper going down? Sell FCX or others like it if you are holding?

 
I’m not following. You see the price of copper going down? Sell FCX or others like it if you are holding?
In times of uncertainty if I might need liquidity I ditch leading indicators.  

That said, if you’re already down and okay to hold for a couple years there’s no reason to sell at a loss unless you’re in deep and concerned. 

 
I guess wheat pennies would also be out

:kicksrock:
The thing with copper is that it’s actually used in so much stuff and that’s what its value comes from.  Nobody’s stockpiling copper for pure value, they’re using it for pipes and wiring and cookware and such. When its price drops it’s because people are making less stuff with it.  That’s a concern. 

 
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The thing with copper is that it’s actually used in so much stuff and that’s what its value comes from.  Nobody’s stockpiling copper for pure value, they’re using it for pipes and wiring and cookware and such. When its price drops it’s because people are making less stuff with it.  That’s a concern. 
I’m of the belief almost everything is going to slow down. 

There will be high volume selling at some point which ought to cause a short squeeze in VIRT like happened Feb. ‘18

I also think precious metals ought to benefit from all this. 

Some others I’ve been in and out of are SQQQ and SOXS because almost all of tech is bloated and also going to slow down big time. 

 
I’m of the belief almost everything is going to slow down. 

There will be high volume selling at some point which ought to cause a short squeeze in VIRT like happened Feb. ‘18

I also think precious metals ought to benefit from all this. 

Some others I’ve been in and out of are SQQQ and SOXS because almost all of tech is bloated and also going to slow down big time. 
So, interestingly, gold in general moves in the same direction as copper but holds value better - the gold/copper ratio (what copper costs in terms of gold) is something economists watch to see market confidence in times like this, especially when copper is dropping. 

 
Basically, if you’re buying into precious metal mining, I would find companies that have high ratios of gold (and to a lesser extent silver) to useful metals like copper and lead. 

 
Basically, if you’re buying into precious metal mining, I would find companies that have high ratios of gold (and to a lesser extent silver) to useful metals like copper and lead. 
If we get hyperinflation these mining stocks might explode but would it even matter at that point? 

A lot of folks stockpiling physical gold and silver I think. 

 

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