Discussion ***Official*** 2024 Stock Market Thread 💰

[Charmonium]

The Fed minutes said that they're going to slow how quickly they're selling assets from the current 60B/month. One commentator said they'll go down to 30B or less.

It seems that they still have around 6T in assets. So as they sell those, it has the effect of draining liquidity. Slowing that drain has the same effect as cutting rates since it raises the amount of available liquidity.

But you still have the Treasury auctions which have the opposite effect. And since today's 10 year auction apparently went poorly, that implies that liquidity is still tight.

 

[FelixDeCat]

That sounds more like the insurance company is starting to price in previously unacknowledged risks in your region. That or you need to shop around. My policy in the greater Boston area is only up around 15% total in the past five years.

Edit: sorry, misread car as home. My car insurance is up roughly 0% in five years. Part of that might be age related (early 30s vs late 20s) and I got married which reduces risk profile.

Hmmm ... 0% in 5 years...you are definitely not the norm. Here is the norm:

 

[jpiniero]

But you still have the Treasury auctions which have the opposite effect. And since today's 10 year auction apparently went poorly, that implies that liquidity is still tight.

The shorter duration ones looked okay though, at least at quick glance.

Kinda interested to see how the 30 year goes, which the auction ends tomorrow. At that duration I think you are running into default risk...

 

[repoman0]

Hmmm ... 0% in 5 years...you are definitely not the norm. Here is the norm:

View attachment 96739

Look right here for why that might be. https://www.macrotrends.net/stocks/...ending December 31,a 63.64% decline from 2021.

I’m sure you can find similar stories for other large insurers. I use smaller local companies through an agent.

 

[AdamK47]

Or you can live in your car. 😉

Speaking of which my car insurance is up for renewal again. They are asking for a 3rd consecutive 20% increase. It's up 67% in the last 3 years.

Even a news commentator mentioned his is rising 2% ... per month!

You can live in your car, but you can't race a house.

 

[AdamK47]

Small cap not doing so swell.

 

[biostud]

Looking forward to the Eurostats march numbers in a couple of days.

https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-18032024-ap

0.8% in Denmark in February. At this point I would like if our rates weren't bound to the Eurozone.

 

[biostud]

Or you can live in your car. 😉

Speaking of which my car insurance is up for renewal again. They are asking for a 3rd consecutive 20% increase. It's up 67% in the last 3 years.

Even a news commentator mentioned his is rising 2% ... per month!

So basically you should have invested in car insurance companies?

Can't you find a cheaper option, or are they all in a big Cartel?

My yearly car insurance has increased $3 from 2022 to 2023.

 

[FelixDeCat]

You can live in your car, but you can't race a house.

You can if it's an RV.

 

[FelixDeCat]

So basically you should have invested in car insurance companies?

Can't you find a cheaper option, or are they all in a big Cartel?

My yearly car insurance has increased $3 from 2022 to 2023.

There are lots of theories about why insurers are doing this from price fixing to inflation to driving scores you have to worry about now like your credit score.

The auto makers have been using the driving data provided by your newer car and selling it to data brokers behind your back. I posted all about this in another thread. It's a scandal and is leading to possible class action lawsuits.

The data brokers come up with a driving score and sell that to insurance companies.

 

[Red Squirrel]

Or you can live in your car. 😉

Speaking of which my car insurance is up for renewal again. They are asking for a 3rd consecutive 20% increase. It's up 67% in the last 3 years.

Even a news commentator mentioned his is rising 2% ... per month!

My insurance did the same right in 2020 when covid happen. Raised the rates. Went from $150/mo to $170/mo for the same coverage. And they all did it too. Called around and it was the same price more or less everywhere. I was able to lower my coverage so I can get the price down to $150/mo which is what I was paying.

 

[IronWing]

You know, the market sucked today.

 

[brianmanahan]

 

[Red Squirrel]

Sometimes I do like to check on my silver just to make sure it's still there too.

 

[biostud]

On one hand I like when my stocks go up, on the other hand I know I'm going to start a child saving fund this autumn, so it would be better if the stocks stay low.

 

[dullard]

Interesting, so part of the CPI report is based on random survey questions? I keep up with the real estate market in my area but my estimate for the rent I could get for my house I’d pin at +/-$500 accuracy.

If everyone overestimated their house's equivalent rent with that accuracy, then the error would be $500 high. If everyone underestimated, then the error would be $500 low. Those could be true that everyone goes one way. Maybe everyone thinks their home is better than it really is.

But, I assume that some people overestimate and other people underestimate. If that under/over estimate was truly random, then the error is divided by (n)^0.5 where "n" is the sample size. From the best that I could find in a quick search, the CPI uses 6000 homes. Thus, if everyone was randomly off by up to $500, then the actual error of the sample is $500 / (6000)^0.5 = +-$6.45.

Of course, now we just need to know if people are random or if they as a whole are wrong on their home's value.

 

[FelixDeCat]

We have had a nice chat about rates, monetary and tax policy and such .. which is healthy to have, each arguing passionately for their point of view. This is fun to have.👍

But to focus back on stocks in particular- Nvidia has been pulling back lately and would make a terrific short if you look at the run from 500 to 990 happening so quickly. The pull back is due to speculation of others developing in house solutions for AI computing, and even Intel wanting a piece of the action.

I am highly tempted to short it now but earnings start next week and we will likely rally through the period and nobody wants to be short that. 😬

But going back to Nvidia $500 would be so delicious. Just pull up a 90 day chart. It was $480 early Jan and peaked in March, up 100% in 75 days!😲

Nvidia up $60 since I posted this. Good thing I did not short it!

 

[repoman0]

Yeah, I understand white Gaussian noise, but highly doubt survey responses are a zero mean Gaussian process. Seems like they could be pretty easily biased one direction or the other compared to reality, especially when fractions of a percent make a big difference.

All beside the point though really which is the circular logic of using federal funds rate to control inflation, when a big part of the headline inflation number is made worse or at least no better by a high federal funds rate. I know the fed prefers a different metric than CPI but not sure what’s in that one though.

 

[dullard]

when a big part of the headline inflation number is made worse or at least no better by a high federal funds rate.

That's the rub though. Interest payments are NOT in the inflation rate. If the fed raises rates to fend off inflation, then some people will pay more on their homes, auto loans, credit cards, etc. But none of those added costs are in the CPI. I think interest was removed from the calculation in the 1980s or sometime around then. This is true even though higher interest rate payments are significant and real to people who pay them.

 

[repoman0]

That's the rub though. Interest payments are NOT in the inflation rate. If the fed raises rates to fend off inflation, then some people will pay more on their homes, auto loans, credit cards, etc. But none of those added costs are in the CPI. I think interest was removed from the calculation in the 1980s or sometime around then. This is true even though higher interest rate payments are significant and real to people who pay them.

The interest payments themselves are not part of my argument. I was always referring to the market distorting effects of a 5% rate jump in a year plus not enough inventory even if most homeowners weren’t rate locked.

 

[Dr. Detroit]

Sometimes I do like to check on my silver just to make sure it's still there too.

We Silver flexing?

 

[FelixDeCat]

Bought 200 shares RENT at 18. This thing is a rocket.

Went from 5 to 7 Wed, 7 to 19 Thurs, and now sits at 23 on Fri.

 

[jpiniero]

BTW, the 30 year ended up selling at 93 cents/dollar for 4.25% yield. I would only start to think there's a real problem though, if the tendered amount dropped quite a bit.

 

[KB]

I like when the VIX jumps. Means more dividends from JEPI and JEPQ.

 

[Charmonium]

Well, that was a sweet rally while it lasted. We're just below a 38 handle on the Dow. And yet rates are down. I guess the market is predicting lower economic activity than expected. What a bunch of lemmings.

It seems gold was over 2400 earlier today. Inflation fears? Scaredy cat investors? Who the f' knows.