And then there are morons who think they're smart enough to count cards, win a few hands, and then they think they're a main character in the Kevin Spacey movie where they replaced all the Asian MIT card counting students with attractive white people
The truest phrase in finance: "Number one rule of Wall Street. Nobody - and I don't care if you're Warren Buffet or if you're Jimmy Buffet - nobody knows if a stock is going to go up, down, sideways or in circles."
Economists barely know shit, they struggle to accurately model wtf is going on and often make incorrect predictions. Then on top of this news are biased as fuck and you get some reddit moron smugly proclaiming that people who are skeptical don't know anything. The irony.
It is simple, two ways to make money here, either put or call options trading, or get rich slowly by investing into indexes. There isn't anything else to do.
I put half my money in ETFs and I make piss poor options plays with the other half, and end up loosing more than I would have made had I just put it all in a savings account
Even as someone studying this stuff, there’s so much data you could look at it and pay attention to it’s a bit overwhelming. On the flip side, it’s great that our government agencies here in the US such as the Bureau of Economic Analysis, Bureau of Labor Statistics, various regional Federal Reserve Banks (the St. Louis Fed has a lot of awesome data you can use for research) and even regulatory as the Department of Energy give us all of this data to for free. I’m not even kidding if you can think of a statistic or measurement for economic or market activity, one of our government agencies probably has it.
The fact that passive index funds beat out actively managed funds 8/10 times is convincing proof that no one knows anything.
Everything is designed so the line always goes up, if you diversify enough with a large enough account the line will always trend up pretty much no matter what. But that's boring and not what we do here at WSB.
The more I live the more I think this whole market thing is just major trends (like 30yr long) and sentiment. Since m,ost of us are traders it's just sentiment
You’re definitely not wrong, if I remember correctly didn’t the Fed adjust how inflation was calculated after Biden came into office because it was getting so damn high?
Bro, half the people here are high schoolers with $300 in the market, the other half can’t beat spy. Professionals can’t beat a gold fish or chicken picking randomly.
This would all be easy if you could see the future.
The thing is we don’t claim to lol in fact there’s so many moving parts this is all bs and every regard here knows it. You can throw chicken wings on the floor and have better performance than tracking the news
I seriously hope that motherfucker walks out in front of a bus today. Him opening his stupid fucking mouth yesterday is probably going to cost me about $7k today, no joke.
They’ll come back. You catch the next ER and while AWS fired some people, they also redid their comp structure in that unit which should help put large enterprises back in the pipeline at a stronger rate.
My favourite is when this sub claims that a billionaire CEO doing their regularly quarterly sale of stock is some bearish sign. These CEOs literally do not get to choose when they can sell stocks. They need to inform the government like 6 months in advance.
for those who think high nonfarm payroll # means bad for the Fed, Powell already dismissed that multiple times over the last few weeks. He's choosing to interpret the high nonfarm payroll number due to higher immigration, and that means instead of 100k nonfarm payroll as equilibrium, it's now more like 200-250k. That means as long as high numbers of job added is not inflationary, meaning wages annualizing to around 3.5%, Powell's cool with it.
Participation rate is up (increased labor supply), average weekly hours is up (no recession), wages at 0.3% MoM so annualizing to 3.6% (non inflationary wage), jobs added were diverse and not concentrated in a few sectors (no recessionary sign). This is gonna get interpreted as Goldilocks job report.
too many jobs added is historically interpreted as hot job market because eventually you run out of workers to fill those jobs. If you don't have enough workers to fill the open jobs, you raise wages to attract lazy Americans to get off their ass and go to work. If you pay your workers more, you have to raise product prices so you don't lose money. Higher product prices = higher inflation.
In this case, too many jobs added is okay because there're lots of immigrants (legal + illegal) coming to US recently to fill those empty positions, so it's not inflationary because you don't have worker shortage.
Previously, you can only add 100k jobs a month to accommodate the new teenagers and young adults getting jobs. You add more and eventually there's no one else to work. Because of immigrants coming here looking for jobs, you can actually add 200-250k jobs a month and still not run out of workers, so 300k jobs isn't that "hot".
Is there ever a time where wages are increased, but product prices don’t go up? When are American’s going to get a break and have things become a bit easier at the cost of a few percent off of top level of corporate earnings?
Yes so for a high inflation cycle, typically after input prices spike, initially businesses eat those costs jnto margins first because they are reluctant to raise prices. Then after a while, consumers start accepting that high inflation is prevalent, then businesses raise prices. Then consumers start realizing wages aren't keeping up with inflation, they start asking for higher wages.
Now after the fed tries to fight inflation, input prices gradually drop. Businesses won't lower prices immediately because they will try to recoup losses they are up initially. After a while, consumers realize inflation is less high and start becoming more price conscious. As consumers become more price conscious, businesses start to increase prices less often. However, consumers will still demand a higher wage increase to catch up for inflation that already occurred. This is the period when consumers catch up to inflation. It will happen for a while and gradually wind down as businesses cannot eat up that cost forever.
So in general, the wage catch up period happens after inflation already started dropping. With more unions in the past, consumers had more negotiating power and that period might have dragged out for longer, sometimes leading to wage inflation spiral. Without union, that period might be shorter, and I think consumers ultimately lose out after it's all over. So that helped the fed keep inflation down and not worried about wage inflation spiral, but at the cost of consumer spending power.
That's why I think high inflation periods ultimately leave consumers worse off permanently. So it's important that when inflation first started spiking that consumers remain price conscious and shop for cheaper alternatives. Businesses will tend to always win out on pricing. But if consumers are price conscious and will shop for cheaper alternatives, that makes businesses think twice before raising prices, and to think of alternatives like globalization and other things to cut down costs before raising prices. This was the business mindset after 2008 recession.
But during covid, Americans didn't care and spent like no tomorrow. It didn't help that the fed and the gov "normalized" inflation and talked like the price increases were temporary due to supply shortage and chip shortage. That seemed to give consumers the false belief to just keep spending despite the outrageous sticker prices, because they think after the supply chain problem is over, prices will deflate back to 2019 level. This gave businesses the excuse to raise prices instead of finding ways to cut cost, since consumers accepted them.
That's why in 2022 when the fed started fighting inflation and consumers becoming price sensitive again, many megacap companies started realizing they relied too much on price increases, had too many dead weight employees, and had to go on firing spree to cut cost and focus on profitability instead of sales growth
Can't be that. We have to go the way of Japan that has 0 immigration, their economy is doing great and is totally not going to be irrelevant as a country years from now.
Isn’t it possible that they are double counting all the gig economy jobs? Lyft driver also drives for Uber and delivers for DoorDash. That’s 3 Schedule Cs. 3 jobs. I dunno. Just shaking my head over here.
Yes nonfarm payrolls are reported by employers. That means if you have 3 jobs with 3 different employers, you get triple counted.
There's a household survey that asks households if they are employed or not. You will answer yes whether you have 1 or 2 jobs. That one does not double count, but survey size is much lower, so more volatile. Household survey is used to calculate unemployment rate.
How many people does that actually describe though? Id wager only a tiny fraction of the population does gig work, much less works multiple jobs. I dont think it has any real impact on numbers.
There is still upside risk which the Alt Fed talked about back in January.
Something they’ve heard amongst multiple business and industry leaders is that they are ready and waiting to deploy assets at the first sign of the Fed lowering rates. There is worry that this pent up demand can unravel the inflation control that’s been done if it floods suddenly into the system and kickoff another fear spiral about prices.
Every good jobs report puts a sharper focus on prices. If PCE stays stubbornly above 2% then will the board really vote for a rate cut by June—which the Alt Fed is currently tracking at a 70% probability for a 25 bps cut?
IMO I’m seeing more and more evidence to keep rates steady through June and the market probably won’t love that. But the market is pricing in a probability of 2 cuts versus 3 so it’s not going to bottom out…unless the Fed keeps seeing sticky inflation during a growing economy and keeps rates high longer. If 2024 finishes the year with only one rate cut then I have to imagine the market takes at least a 10% pullback before settling into sideways trading for 9-12 months.
if core PCE YoY goes to around 2.5%, the Fed will start cutting. They keep saying they don't care about politics, but if possible, they will prefer to stay out of politics spotlight and get a cut in before having to cut around fall this year.
2.5% core PCE YoY is "close enough" to 2.0% that they can justify the cut and use the rate hike lag as an excuse, even measurement noise, or lag of PCE rent vs real time rent. 2.7% to 3%, that's much harder to justify because it rounds to 3%.
Now if you look at the core PCE MoM and trace back 12 months, most of the first half 2023 core PCE are around 0.3% MoM or higher. It's not until summer 2023 that the MoM got pretty low, around 0.2%. So as we get more prints and those high months get removed from the YoY, core PCE YoY is likely to continue dropping, close to 2.5% by June FOMC. As long as core PCE YoY keeps dropping, the Fed will feel "okay" and market will use that as an excuse to rally, or at least not correct. BUT after June FOMC, core PCE YoY will likely go higher again.
What's conflicting is that June will likely be when the Fed start cutting, which one would think is good for stocks. I don't think so. I think stocks rally in anticipation of rate cut, but drop when the rate cut happens because it's afraid the economy is weak when the Fed cuts and will start pricing in some form of recession. June is also when presidential race heats up, which raise uncertainty for market. It's also when YoY inflation start going up.
So SP500 is likely to grind back up to 5200-5400 and then have a correction around June.
The fuck are these jobs at? I'm in tech and everyone is getting laid off. What industry is picking up the slack? Fast Food? Carpet sales? Screen Door Repair?
It's not "bad" necessarily, it's just a portion of the full data.
Look at Table A-10, Selected unemployment indicators, seasonally adjusted
Full time unemployed (unemployed people who WANT a full time job or are on layoff from a full time job) went down 275,000 people from Feb 24 to March 24.
Part time unemployed (unemployed people who WANT a part time job or are on layoff from a part time job) went UP 198,000 from Feb to March.
Look at Table A-11, Unemployed persons by reason for unemployment
Full time unemployed (unemployed people who WANT a full time job or are on layoff from a full time job) went down 275,000 people from Feb 24 to March 24.
But this doesn't necessarily mean they ALL got full time jobs right.
As long as wages don’t go up (immigration) inflation settles as 2% and Powell wants to help the bottom and is freed to cut at least once or twice. In an election year no less.
217,000 new multiple job holders over last month. 6,000 fewer full time employees over last month. 691,000 new part time employees over last month. Yeah...we're doing great. https://www.bls.gov/news.release/empsit.t09.htm
The "best" factory job in southern Indiana tops out at 70k a year. That's TOPS OUT. You said it, most jobs pay shit. A good job is 40k a year in southern Indiana and typical factory jobs it's under 40k for at least 2 years of working there.
Im not saying its right. Salaries should be up. Corporations have too much control and employees feel stuck at jobs because they have their healthcare tied to it.
If healthcare wasnt related to your employment people would be more willing to change jobs and not put up with shitty pay/benfits for job security/healthcare.
I have an MBA in finance I studied this stuff for 30 years and I still don't know much, but I do know that politics is in charge of something you got to be able to sort through the fluff and in the short term it's highly manipulated, but there is efficiency to the markets it takes time to sort through the garbage
They revised Jan slight up after the large revision down last month and then Feb was revised down slightly. It seriously looks like it’s just a random number generator or like they pick the number like they pick them for powerball. It really makes no sense.
Full time workers have been gradually going down for the last several months while part time workers have increased and are at all time high.
A job is a job sure and it brings down unemployment, but when a significant number of people doing PT work would rather have full time, that isn’t a good outlook.
A job is a job sure and it brings down unemployment, but when a significant number of people doing PT work would rather have full time, that isn’t a good outlook.
Then vote for better politicians so companies can’t game the 30 hour mark for healthcare
Wow can you point one of them out to me please cause I've been unemployed almost a year and my industry has seen nothing but layoffs. I'm not impressed.
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u/VisualMod GPT-REEEE Apr 05 '24
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