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

[jpiniero]

https://www.pcmag.com/news/dell-makes-cuts-to-boost-ai-pivot-reportedly-laying-off-12500-employees

Dell laying off 12,500 people, citing (what else?) an AI pivot.

 

[Charmonium]

But, looping back to the topic (yesterday's stock market crash), the stock market is a macroeconomic measure. Individual differences in the microeconomic scale have almost nothing to do with stock market (individual differences will impact politics far more than the economy). Averages are what really matter with stock markets.

Well, yes, over time that's probably true. But it also depends on how unbalanced the distribution is. For someone making over 100k for example, they're not going spend 100% of their disposable income. So folks making that kind of money aren't going to contribute as much to the economy in terms of spending. Yes, now they're richer but a 5% increase for them probably isn't going to have much of an effect on their spending patterns and that's what counts from an economic perspective.

I think that's why economists are so focused on unemployment. The guy making 100k probably isn't going to get laid off as quickly as the one making the "little" bucks. And he's the one that's spending a bigger chunk of his income.

But like you said, getting back to the market. The biggest impact there was definitely the carry trade rather than macro considerations. And it's unlikely that has been completely unwound. So if the yen continues to strengthen, which seems likely given the increase in rates by the BoJ, we're probably going to continue to have an undercurrent of selling.

That's going to depend on whether or not investors are still anticipating a recession. Even cheap money can still be lost. So the message yesterday was 'this is not the gravy train you were looking for.'

Let's face it, the market was way too far over it's skis as the saying goes. Now we're about back to March levels. It's after that, that things start to get choppy. So a lot depends on how much unwinding is left to be done. If we're halfway there but the selling doesn't hit the market all at one time like yesterday, that's not necessarily bad - especially if the fed cuts rates as aggressively as they raised them.

 

[Red Squirrel]

https://www.pcmag.com/news/dell-makes-cuts-to-boost-ai-pivot-reportedly-laying-off-12500-employees

Dell laying off 12,500 people, citing (what else?) an AI pivot.

I was just going to post this. This article seems to suggest it's all HR jobs too. One has to wonder though, how the hell do they need that many HR people? That's a lot of busybody jobs probably not doing much all day. Running their shop like it's a government department.

Meanwhile my company's stock is going up, interestingly enough. Went up by over a dollar today. Going to ride out the rest of the week to see how things look. I'm waiting for my return % to go in the green then I will cash out at least a part of it. I can use the money to at least put a dent in the credit line.

 

[IEC]

This article seems to suggest it's all HR jobs too.

No. The article is suggesting HR is overwhelmed due to the # of layoffs, not that 12,500 HR jobs are eliminated.

The 12,500 is on top of the 10,000+ Dell laid off in 2023. Round Rock is reeling.

 

[Charmonium]

Dell will just hire them back. I suspect they know that the Fed is on the job and they don't really expect a recession - at least for their sake, I hope not.

I don't know what make most of their money on these days but if it's still servers (what's a PC?) and such, being just a middleman isn't a high margin business, even if you do just put your label on shit. So this is a perfect opportunity to shave some expenses, at least temporarily.

Put the peons on UE (you're paying into it anyway, so WTF?) for a year or two and as soon as things change, bring them back bit by bit. It's also a great way to get rid of the dead wood, so to say. Employers have been pulling that stunt for eons.

 

[Charmonium]

I used to work at a Mattel facility, at least until I took out one of their overhead power assemblies with a fork truck. Lots of sparks . . . pretty. Haha.

Laying people off was part of their business model. People expected to go on UE at some point in the year. Probably part of their business model as well.

 

[FelixDeCat]

Market futures looking up but I am sensing a disturbance in the force. It might not last.

SMCI might throw out some bad vibes in the AI space.

 

[FelixDeCat]

Market digesting gains as expected. I think they might be trying to price in the next shoe to drop.

 

[Charmonium]

BTW, if you hold any bonds or bond funds, especially if your weighted average of maturities is long, you probably want to sell those since all indications are that the fed is going to start reducing rates.

I wouldn't be surprised if they do a .75 cut next month. So if you're only getting 2 or 3% on those, the price won't go down any more but it's not going up either.

edit - well, it will go up from whatever it's trading at now but you're still looking at a loss if you got them at issue.

 

[jpiniero]

Current favorite is a double cut but it's like 50-50 with single cut.

 

[linkgoron]

I wouldn't be surprised if they do a .75 cut next month. So if you're only getting 2 or 3% on those, the price won't go down any more but it's not going up either.

.75 cut would be very high. I'd be mildly surprised if they do .5.

 

[Charmonium]

Oh, one more thing. If what you're holding is high yield, that's not going to respond much to interest rates. In their case, the primary issue is the health of the issuing corp. and their ability to redeem their debts at maturity. Stock price is generally a decent indicator of that. But it depends. For example, Boeing isn't going out of business anytime soon. So even if the stock is down roughly 50%, it's still a good bet for their bonds.

edit - even so, the market might want to see a higher return on those due to the increased risk, but that getting deeper into the weeds than I'm willing to go.

 

[biostud]

Hopefully the ECB will keep cutting their rates as well.

ECB's Rehn Says Rate Cuts Can Continue If Confidence In Inflation Slowdown Strengthens

(RTTNews) - The European Central Bank can continue lowering interest rates if there is increased confidence among policymakers that inflation is s...

markets.businessinsider.com

 

[Charmonium]

How's the EU economy doing? The US Fed has what they call a dual mandate - inflation and employment. ECB doesn't have that problem IIRC. So the only reason to cut is if the economy is slowing down.

 

[jpiniero]

The US Fed has what they call a dual mandate - inflation and employment.

Really the mandate is to prop up the stock market if it goes down for any reason.

 

[FelixDeCat]

I still vote zero rate cuts this year.

 

[biostud]

How's the EU economy doing? The US Fed has what they call a dual mandate - inflation and employment. ECB doesn't have that problem IIRC. So the only reason to cut is if the economy is slowing down.

The problem with EU is that each country has its own economy which differ in size and how it works. So they have to find a middle ground,which might not be optimal, the farther away you are.
From this list you can see the inflation in the Eurozone varies from 0.6 to 5.5 depending on which country you are in.

So where to set the rate?

Euro area annual inflation up to 2.6%

Overview Euro area annual inflation is expected to be 2.6% in July 2024, up from 2.5% in June according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in...

ec.europa.eu

 

[Charmonium]

The problem with EU is that each country has its own economy which differ in size and how it works. So they have to find a middle ground,which might not be optimal, the farther away you are.
From this list you can see the inflation in the Eurozone varies from 0.6 to 5.5 depending on which country you are in.

So where to set the rate?

Euro area annual inflation up to 2.6%

Overview Euro area annual inflation is expected to be 2.6% in July 2024, up from 2.5% in June according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in...

ec.europa.eu

That's really interesting. Thank you.

It's seems a little strange since you just have one currency though, unless inflation stats aren't based on the Euro but some other state-specific metric.

But if inflation is 2.6%, a cut is feasible. I suppose you'd have to start looking at other factors. Is inflation cooling or accelerating. Are you having increased unemployment across the Eurozone? Things like that.

 

[biostud]

That's really interesting. Thank you.

It's seems a little strange since you just have one currency though, unless inflation stats aren't based on the Euro but some other state-specific metric.

But if inflation is 2.6%, a cut is feasible. I suppose you'd have to start looking at other factors. Is inflation cooling or accelerating. Are you having increased unemployment across the Eurozone? Things like that.

Different countries have different national debt, different work forces, different taxation, different government/public administration, different legislations etc. So, it's much more diverse than the US market.

Here in Denmark, we don't have the Euro, but have linked the rate to ECB, albeit a bit lower to prevent investors to speculate against the Danish krone (DKK).

Government debt down to 88.6% of GDP in euro area

Overview At the end of the fourth quarter of 2023, the general government gross debt to GDP ratio in the euro area (EA20) stood at 88.6%, compared with 89.6% at the end of the third quarter of 2023. In the EU, the ratio also decreased from 82.4% to 81.7%. Compared with the fourth quarter of...

ec.europa.eu

 

[FelixDeCat]

Bought Lumn 5.5

edit: sold 5.5 premarket for breakeven. For now, its a $4 stock.

 

[FelixDeCat]

Big economic report tomorrow. I see a sell off.

 

[dullard]

Big economic report tomorrow. I see a sell off.

Good PPI numbers came out today: 2.2% change the last 12 months. That just about perfectly nails the fed's target. Stocks are rising. CPI comes out tomorrow. If that is bad (since CPI is broader than the PPI but it also lags PPI), then stocks might have that sell off. But, I really don't see a very bad CPI happening.

 

[AdamK47]

Big economic report tomorrow. I see a sell off.

So far, nope

 

[AdamK47]

I suppose with the new Starbucks CEO we'll be seeing price increases and smaller portions. Because, resilient consumer.
I'm sure the white rice will have heaps of cilantro in it as well. No thanks.

 

[nOOky]

The Fed may be preparing a rate cut? I'm not a stock market watcher except generally when checking my retirement accounts, but I expect more than normal up and down swings until after the election. You folks that buy and sell individual stocks are fricken' crazy, my heart could not take it.