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It looks like retail sales whether it is running shoes,restaurants,grocery stores,clothes,home renovation,(Home DEpot,LOWE,General Mills,WAlmart,Nike,Outback Steakhouse )have all weakened.
Today Wedbush downgraded CHipotel and Wendy,2 popular fast food restaurants.
So why are the portfolio managers so bullish for 2024,because the Fed will cut rate ,may be 4-6 times,what good is low interest rate when people have lost their jobs or have difficulty paying student loan,mortgage,credit card devts or these days Buy now Pay later?
As retailers face lower sales,they are not going to order more from wholesalers,manufacturers,so factories would slow down,trucking and railroad will haul less goods,we will need less packaging material,less garbage to haul ,these companies will report slower sales as well?
But 90% of the porfolio managers think stocks are great buy,how can they be good buy if they are going to do less business?
And if they sell overseas,the situation is worse ,Germany is in a recession,China and Argentina both have domestic problems,I doubt we will do a lot of business oveseas to compensate domestic slowdown.
I am confused??
PLease enlighten me?
It looks like retail sales whether it is running shoes,restaurants,grocery stores,clothes,home renovation,(Home DEpot,LOWE,General Mills,WAlmart,Nike,Outback Steakhouse )have all weakened.
Today Wedbush downgraded CHipotel and Wendy,2 popular fast food restaurants.
So why are the portfolio managers so bullish for 2024,because the Fed will cut rate ,may be 4-6 times,what good is low interest rate when people have lost their jobs or have difficulty paying student loan,mortgage,credit card devts or these days Buy now Pay later?
As retailers face lower sales,they are not going to order more from wholesalers,manufacturers,so factories would slow down,trucking and railroad will haul less goods,we will need less packaging material,less garbage to haul ,these companies will report slower sales as well?
But 90% of the porfolio managers think stocks are great buy,how can they be good buy if they are going to do less business?
And if they sell overseas,the situation is worse ,Germany is in a recession,China and Argentina both have domestic problems,I doubt we will do a lot of business oveseas to compensate domestic slowdown.
I am confused??
PLease enlighten me?
stocks have to meet expectations and earnings .
when the bars are set to low like they were stocks do better. in fact there is very little link between corporate profits and stock prices , which is why stocks go up the most when things look gloomiest .
markets and growth and corporate profits have never been linked .
as much as we think higher profits lead to higher stock prices it really does not work like that .
markets are based on greed ,fear and perception not the here and now .
gains and corporate profits don't flow together more ofton than not.
in the book a random walk down wall street 548 nyse issues were tracked and analyed over 5 year periods and the results were the performance had no relationship between the technical and fundemental signals and the actual stock performance ..
ned davis research took another look at the relationship and going as far back as 1927 they found when profits rose more than:
20% the s&p returned a mere 1.3% in gains
10 to 20% saw 5.8% in gains
(-10% to + 10% in profits saw a 9.3% jump in gains
sorry,I HEAR It every day,now NIKE is going to cut $2 billions,and wont say how many layoffs.
Etsy layoff 11%,Citicorp is not done laying off ,Wells FArgo set aside $750 millions for layoff,Ford layoff factory worker, Bolt 29%,GM cruise 900,STellantis 3000 possible,Paramount Global 1000 possible,kaiser permanent,IT 115,Washington Metro 2000 possible,Ernst and Young partners 130,Hasbro 1100,State STreet possible 1500,Trans UNION 339,twillio 400,Spotify 1700,Union Pacific 1000,Broadcom 1200,then miscellaneous Pfizer,VFcorp 700 AND MORE,these are within 6 weeks.
Textron 725,US Steel ,up to 1000.
Banks have been closing branches left and right,where do these workers go?another branch??
No wonder retail sales is weak.
sorry,I HEAR It every day,now NIKE is going to cut $2 billions,and wont say how many layoffs.
Etsy layoff 11%,Citicorp is not done laying off ,Wells FArgo set aside $750 millions for layoff,Ford layoff factory worker, Bolt 29%,GM cruise 900,STellantis 3000 possible,Paramount Global 1000 possible,kaiser permanent,IT 115,Washington Metro 2000 possible,Ernst and Young partners 130,Hasbro 1100,State STreet possible 1500,Trans UNION 339,twillio 400,Spotify 1700,Union Pacific 1000,Broadcom 1200,then miscellaneous Pfizer,VFcorp 700 AND MORE,these are within 6 weeks.
Textron 725,US Steel ,up to 1000.
Banks have been closing branches left and right,where do these workers go?another branch??
No wonder retail sales is weak.
Many, many businesses over hired in response to the post pandemic surge of demand and are now normalizing their work forces as demand returns to normal. Nothing to see here except the slow but sure death of the work from home crowd.
I know they hired too many during Cov19,but these layoffs need to find new jobs.
Companies,when business is slow and need to cut cost,first move is layoff workers
There will always and incessantly be a cause for gloom. But I ask: suppose that we act "prudently", on account of this gloom. Where do we put our money? And if we find this "where", then OK, when do we pull our money back-out, deploying it in risk/profitable ventures?
PROFIT DOES NOT MATTER?
Did Warren Buffet ever say that?
warren buffett owns businesses that don’t even trade . less then half of berkshires holdings are public stocks .
so goals are different .
stocks are forward looking , that is why they have their best gains way before things look they changed at all or while things still look gloomy .
also layoffs increase the bottom lines of all these companies that have mass layoffs .
factory automation is requiring less workers
stocks are driven by fear , greed and perception of future demand for that stock
the best most profitable companies don’t always make good stocks and good stocks are not always profitable companies .
a great , profitable company with no institutional coverage will go no where
if you care to learn , this is why
Last edited by mathjak107; 12-22-2023 at 03:13 AM..
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