HI Market View Commentary 08-28-2023
F get put to people at $15 booking us a nice profit
Long put cost $0.43 Sold off at $15 = $14.57
Why? CEO Said keep running the EVs even though the loss we 4.5 billion instead of 3 billion like expected
Yes hey do have a 5% dividend yield
Watch it closely and maybe get back in but exit half or more back at $15 level
UAA took puts off last week and booked a profit
We exited puts at $7.44 which means we are losing from that price point down
Why Are we surprised by this year’s and last years market movement?
Let’s look at what made last year go down and this year up:
Last Year: Rebounding from Pandemic, $ put into the system was still working is way on through, Fed Actions ended in Dec and huge rate hikes were last year, And the Administration was pretty tame in new regulations = -19.86 % return with uncertainty
This Year: Oversold last year, Fed Rate hikes this are 4 that were only a quarter percent, 80% or so of the growth is basically ONLY 7 stocks, Inflation is still a problem, Sounds like 2 more at 25 basis points for Powell to raise rates = September Hike and Oct/Now 31-1 Another rate hike
It’s hard to outguess the market so we protect – That also means we don’t time the market and sometimes are at the markets mercy to allow some stocks to come back
In church I realized in Sunday School one of the Lord’s Mysterious ways in Which he works
How do we and individuals remove stumbling blocks for others = Service
Two oe Three Joys in one act of Service
What were the Joys of Last Year and the way we manage money in today’s stock market?
IS we take our market risk by trading individual stocks = Buffett way = gives us a greater opportunity to beat the market handily over a longer period of time
Protect and make money on the way down
Add cash to portfolios without asking for more money
Add shares to portfolios without asking for more money
Exponential Growth as shares come back to their purchase price because we now have 20, 30, 50, 80% more shares of stock
Longer term exponential returns
MU – 9/27
Where will our markets end this week?
DJIA – Bearish
COMP – Bearish
Where Will the SPX end September 2023?
Tues: BIG, BBY, HPE, HPQ, PVH,
Wed: CHWY, CRM
Thur: GCO, HRL, DELL, LULU, VMW, DG, ACGO
Tue FHFA Housing Price Index, S&P Case-Shiller, Consumer Confidence, JOLTS
Wed: MBA, ADP Employment, GDP, GDP Deflator
Thur: Initial Claims, Continuing Claims, PCE Prices, Personal Income, Personal Spending, Chicago PMI
Fri: Average Workweek, Non-Farm Payroll, Private Payroll, Hourly Earnings, Unemployment Rate, Construction Spending, ISM Manufacturing
How am I looking to trade?
Adding protection based on technical analysis on indexes and earnings seasons starts soon
www.myhurleyinvestment.com = Blogsite
firstname.lastname@example.org = Email
MELI = Deb ratio too high and PE out of bounds
Fed Chair Powell calls inflation ‘too high’ and warns that ‘we are prepared to raise rates further’
PUBLISHED FRI, AUG 25 202310:04 AM EDTUPDATED FRI, AUG 25 20232:33 PM EDT
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- While acknowledging that progress has been made, the central bank leader said inflation is still above where policymakers feel comfortable.
- The speech resembled remarks Powell made last year at Jackson Hole, during which he warned that “some pain” was likely as the Fed continues its efforts to pull runaway inflation back down to its 2% goal.
- A strong economy and decelerating inflation also give the Fed room to “proceed carefully” at upcoming meetings.
Federal Reserve Chair Jerome Powell on Friday called for more vigilance in the fight against inflation, warning that additional interest rate increases could be yet to come.
While acknowledging that progress has been made and saying the Fed will be careful in where it goes from here, the central bank leader said inflation is still above where policymakers feel comfortable. He noted that the Fed will remain flexible as it contemplates further moves, but gave little indication that it’s ready to start easing anytime soon.
“Although inflation has moved down from its peak — a welcome development — it remains too high,” Powell said in prepared remarks for his keynote address at the Kansas City Fed’s annual retreat in Jackson Hole, Wyoming. “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
The speech resembled remarks Powell made last year at Jackson Hole, during which he warned that “some pain” was likely as the Fed continues its efforts to pull runaway inflation back down to its 2% goal.
But inflation was running well ahead of its current pace back then. Regardless, Powell indicated it’s too soon to declare victory, even with data this summer running largely in the Fed’s favor. June and July both saw easing in the pace of price increases, with core inflation up 0.2% for each month, according to the Bureau of Labor Statistics.
“The lower monthly readings for core inflation in June and July were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” he said.
Powell acknowledged that risks are two-sided, with dangers of doing both too much and too little.
“Doing too little could allow above-target inflation to become entrenched and ultimately require monetary policy to wring more persistent inflation from the economy at a high cost to employment,” he said. “Doing too much could also do unnecessary harm to the economy.”
“As is often the case, we are navigating by the stars under cloudy skies,” he added.
Markets were volatile after the speech, but stocks powered higher later in the day and Treasury yields were mostly up. In 2022, stocks plunged following Powell’s Jackson Hole speech.
“Was he hawkish? Yes. But given the jump in yields lately, he wasn’t as hawkish as some had feared,” said Ryan Detrick, chief market strategist at the Carson Group. “Remember, last year he took out the bazooka and was way more hawkish than anyone expected, which saw heavy selling into October. This time he hit it more down the middle, with no major changes in future hikes a welcome sign.”
A need to ‘proceed carefully’
Powell’s remarks follow a series of 11 interest rate hikes that have pushed the Fed’s key interest rate to a target range of 5.25%-5.5%, the highest level in more than 22 years. In addition, the Fed has reduced its balance sheet to its lowest level in more than two years, a process which was seen about $960 billion worth of bonds roll off since June 2022.
Markets of late have been pricing in little chance of another hike at the September meeting of the Federal Open Market Committee, but are pointing to about a 50-50 chance of a final increase at the November session. Projections released in June showed that almost all FOMC officials saw another hike likely this year.
Powell provided no clear indication of which way he sees the decision going.
“Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks,” he said.
However, he gave no sign that he’s even considering a rate cut.
“At upcoming meetings, we will assess our progress based on the totality of the data and the evolving outlook and risks,” Powell said. “Based on this assessment, we will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data.”
The chair added that economic growth may have to slow before the Fed can change course.
Gross domestic product has increased steadily since the rate hikes began, and the third quarter of 2023 is tracking at a 5.9% growth pace, according to the Atlanta Fed. Employment also has stayed strong, with the jobless rate hovering around lows last seen in the late 1960s.
“The basic thought that they’re close to done, they think they probably have a little bit more to do … that is the story they’ve been telling for a little while. And that was the heart of what he said today,” said Bill English, a former Fed official and now a Yale finance professor.
“I don’t think this is about sending a signal. I think this is really where they think they are,” he added. “The economy has slowed some but not enough yet to make them confident inflation is going to come down.”
Indeed, Powell noted the risk of strong economic growth in the face of widespread recession expectations and how that could make the Fed hold rates higher for longer.
“It was a balanced but not trend-changing speech, even if the Fed kept the ‘mission accomplished’ banner in the closet,” said Jack McIntyre, portfolio manager at Brandywine Global. “It leaves the Fed with needed optionality to either tighten more or keep rates on hold.”
Getting into details
While last year’s speech was unusually brief, this time around Powell provided a little more detail into the factors that will go into policymaking.
Specifically, he broke inflation into three key metrics and said the Fed is most focused on core inflation, which excludes volatile food and energy prices. He also reiterated that the Fed most closely follows the personal consumption expenditures price index, a Commerce Department measure, rather than the Labor Department’s consumer price index.
The three “broad components” of which he spoke entail goods, housing services such as rental costs and nonhousing services. He noted progress on all three, but said nonhousing is the most difficult to gauge as it is the least sensitive to interest rate adjustments. That category includes such things as health care, food services and transportation.
“Twelve-month inflation in this sector has moved sideways since liftoff. Inflation measured over the past three and six months has declined, however, which is encouraging,” Powell said. “Given the size of this sector, some further progress here will be essential to restoring price stability.”
No change to inflation goal
In addition to the broader policy outlook, Powell honed in some areas that are key both to market and political considerations.
Some legislators, particularly on the Democratic side, have suggested the Fed raise its 2% inflation target, a move that would give it more policy flexibility and might deter further rate hikes. But Powell rejected that idea, as he has done in the past.
“Two percent is and will remain our inflation target,” he said.
That portion of the speech brought some criticism from Harvard economist Jason Furman.
“Jay Powell said all the right things about near-term monetary policy, continuing to hope for the best while planning for the worst. He was appropriately cautious on inflation progress & asymmetric about the policy stance,” Furman, who was chair of the Council of Economic Advisers under former President Barack Obama, posted on X, the social media site formerly known as Twitter. “But wish he had not ruled out shifting the target.”
On another issue, Powell chose largely to stay away from the debate over what is the longer-run, or natural, rate of interest that is neither restrictive nor stimulative – the “r-star” rate of which he spoke at Jackson Hole in 2018.
“We see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation,” he said. “But we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint.”
Powell also noted that the previous tightening moves likely haven’t made their way through the system yet, providing further caution for the future of policy.
China’s rare earths dominance makes U.S. supply chains vulnerable, trade representative says
PUBLISHED SAT, AUG 26 202310:08 PM EDTUPDATED SAT, AUG 26 202311:37 PM EDT
- China’s dominance in rare earths makes U.S. supply chains vulnerable, U.S. Trade Representative Katherine Tai said in an exclusive interview Saturday with CNBC’s Martin Soong.
- Tai was speaking in New Delhi, India, on the sidelines of B20, the official business dialogue forum of the G20.
- “What I want to draw your attention to is not just the vulnerabilities around China’s investments [overseas], but the fact that China’s dominant position in the world market now in [rare earths] means that it is able to turn on the faucet and turn off the faucet,” she said.
China’s dominance in rare earths makes U.S. supply chains vulnerable, U.S. Trade Representative Katherine Tai said in an exclusive interview Saturday with CNBC’s Martin Soong.
Rare earth metals are used in high-tech products such as electric car motors. Over the decades, China has built up its ability to process the metals — giving it enormous pricing power in a critical global market.
“What I want to draw your attention to is not just the vulnerabilities around China’s investments [overseas], but the fact that China’s dominant position in the world market now in [rare earths] means that it is able to turn on the faucet and turn off the faucet,” Tai said.
“And until we are able to access and create additional supply chains we remain entirely vulnerable to that leverage,” the U.S. trade representative said. Tai was speaking in New Delhi, India, on the sidelines of B20, the official business dialogue forum of the G20.
Tai pointed out that about a decade ago, China raised rare earths prices so high that some U.S. mines were able to operate in the industry again, only to have to close once China cut prices.
The U.S. held a majority stake in the rare earths metals market prior to the 1980s. But lower labor costs overseas, as well as less pressure on environmental standards, helped send the rare earths industry out of the U.S.
Meanwhile, Beijing supported the industry.
“The advantage in terms of China’s dominance isn’t necessarily a natural advantage,” Tai said. “It’s not that they have more rare earths but that they were able to pursue coordinated industrial and trade policies that allowed them to corner the market.”
The Chinese government sets economic plans at least every five years, with some goals — such as boosting self-sufficiency in technology and reaching carbon neutrality — set years earlier in advance.
While such top-down planning isn’t guaranteed to achieve results, the electric car industry has become an example of where Chinese industry has been able to capture significant market share across the supply chain, including the end product.
The level of U.S. reliance on China-based manufacturing came to the forefront during the Trump administration, and accelerated when the Covid-19 pandemic in 2020 disrupted global supply chains. The Biden administration has announced multibillion-dollar initiatives to encourage companies to develop and manufacture critical technologies in the U.S.
“Where we are in terms of our supply chains today is not where we want to be,” Tai told CNBC on Saturday. “We know that we’re vulnerable. Where we want to be is in a place where our supply chains are more diversified, where we have more confidence in them, where we just have more options.”
In the case of rare earths, Tai pointed out that China has a monopoly in the global market. She noted that in the case of Australia’s lithium production, China is also the only buyer — giving Beijing another point of market leverage.
While lithium is a key component of electric car batteries, it isn’t one of the 17 metals scientifically categorized as rare earths.
This year, U.S. and European government officials have talked of de-risking, or reducing the level of dependency on China alone. In a speech to global business leaders in June, Chinese Premier Li Qiang said de-risking is a false proposition because global economic interests are so entwined.
‘Phase one’ trade agreement
Just before the pandemic began, the U.S. and China signed a “phase one” trade agreement which called for China to increase its purchases of U.S. goods as a way to offset the massive U.S. trade deficit with China.
When asked Saturday about where the agreement stands, Tai said the U.S. is still looking at China’s shortfalls in meeting those purchase targets.
She said another aspect to that discussion is the degree to which U.S. trade with China is “imbalanced.”
Official U.S. data said the country’s trade deficit with China rose by 8.3% to $382.9 billion in 2022.
U.S. Secretary of Commerce Gina Raimondo is set to visit China from Sunday to Wednesday, as high-level U.S. official trips to the country have resumed this summer after a lull.
Tensions between the U.S. and China have escalated over the last several years, starting with trade and spilling over into tech and finance.
Many businesses have increasingly started to look for opportunities in India, while the country’s relationship with the U.S. has improved.
On Saturday, Tai also met with India’s Minister of Commerce and Industry Piyush Goyal, and raised concerns about India’s import license requirements for tech equipment, a release said.
“The stars really are aligning between the United States and India and that’s across all of the policy areas,” Tai told CNBC. She described the relationship as “experiencing new heights.”
She said in her area of economics and trade, the potential for working more with India was always there, but previously, “we just couldn’t figure out how to tap it.”
— CNBC’s Samantha Subin contributed to this report.
Mark Zuckerberg’s new return-to-office mandate is a clear problem, says Harvard expert: It’ll cause a ‘huge amount of distrust’
Published Fri, Aug 25 202310:27 AM EDTUpdated Fri, Aug 25 202310:29 AM EDT
The latest twist in Meta’s return-to-office saga doesn’t reflect well on CEO Mark Zuckerberg, says a Harvard University expert.
The tech giant’s new mandate for full-time employees reportedly includes three in-office days per week, the use of employee badge swipes for attendance tracking and a requirement for workers to display their physical locations at all times.
Meta established a widely encompassing remote-work policy in 2021, before announcing its intention to move toward a hybrid schedule in June. It didn’t lay out the policy’s details until last week, according to a company memo obtained by Insider, which stated that the new rules will go into effect on Sept. 5.
Employees can still apply for full-time remote status, the memo noted.
Still, the whiplash caused by so many policy changes in such a short period of time is likely to cause a “huge amount of distrust in leadership and the institution, and it’s not surprising,” Heidi K. Gardner, a leadership advisor and distinguished fellow at Harvard Law School, tells CNBC Make It.
Meta did not immediately respond to Make It’s request for comment.
“Leaders must make sure that they’re practicing transparency, and that their actions match their words,” Gardner says. “Establishing trustworthiness is an essential part of being a leader, and it takes empathy to create that trust.”
An empathy problem for CEOs everywhere
Empathy, or a lack thereof, has become a problem for CEOs across the country as workplaces shift away from Covid-era protocols, experts say.
Employees and bosses spoke often about their lives outside the office while trying to navigate the pandemic’s uncertain peak, but the trend is now reversing, leadership coach Muriel Wilkins told the “Radical Candor” podcast earlier this month.
″[Now] leaders just want to drive to results,” said Wilkins. “And they’re sort of saying, ‘Well, it’s either drive the results or be empathetic. I can’t do both.’”
That results-driven mindset, perhaps exacerbated by a rash of layoffs in the tech industry between late 2022 and mid-2023, makes it hard for bosses to put themselves in their employees’ shoes right now, says Gardner.
In Meta’s case, the tech giant laid off more than 20,000 workers between November 2022 and May 2023. Some of those ex-staffers were notified via email, causing another rift of trust between Zuckerberg and his employees.
The workers who remain may be less likely to interpret new rules charitably — even though some parts of the new mandate sound worse than they actually are, Gardner says.
“Most people are already using their badges to scan into the office. Workplace attendance has [long] been monitored in that way,” she says. “It will help show that everyone is being held to the same standard and that your colleagues are following the rules the same way that you are.”
More broadly, return-to-office mandates across the country need to show more justifiable reasons for bringing workers together, says Gardner — especially when the employees themselves push back.
“Maybe someone has social anxiety and doesn’t perform well in an office setting, or they’re recovering from a trauma or are unable to commute to the workplace, ” she says. “Bosses need to take the time to consider why employees aren’t excited about returning to work, and get to the root of that.”
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Bitcoin trading volume is at its lowest in more than four years
PUBLISHED MON, AUG 28 20233:34 PM EDTUPDATED 2 HOURS AGO
- An analysis of CryptoQuant data from both spot and derivatives exchanges shows the total volume of bitcoin held on all exchanges is 2019 lows.
- As of Aug. 26, bitcoin trading volume on all exchanges sat at 129,307 BTC, according to CryptoQuant. It’s now off the March high of 3.5 million BTC by about 94%, according to the data provider.
- On Aug. 12, trading volume fell as low as 112,317 BTC, its lowest level since Nov. 10, 2018.
Bitcoin’s trading volume hit its lowest level in almost five years this month as investors keep waiting for reasons to jump back into the market.
An analysis of CryptoQuant data from both spot and derivatives exchanges shows the total volume of bitcoin held on all exchanges fell earlier this month to its lowest level since 2018 and has struggled to rebound.
As of Aug. 26, bitcoin trading volume on all exchanges sat at 129,307 BTC, according to CryptoQuant. Earlier in the month, on Aug. 12, it fell to 112,317 BTC, its lowest level since Nov. 10, 2018. It’s now off the March high of 3.5 million BTC by about 94%.
“Trading volumes decrease in bear markets as retail investors leave,” Julio Moreno, head of research at CryptoQuant, told CNBC. “This happened during 2022 on most exchanges. As we progress further into a bull market, the trading volume may continue to pick up.”
The price of bitcoin is still up 57% for the year and hovering at about $26,100, according to Coin Metrics.
It’s been an excruciatingly quiet summer for bitcoin traders, but seasonality only accounts for so much of it. The U.S. regulatory crackdown on crypto combined with the end of the banking crisis in May (which accounted for much of its year-to-date gains) drove market makers and traders away – and they haven’t had a reason to return.
Even after bitcoin’s violent sell-off on Aug. 17 — the biggest one-day sell-off since the height of the FTX fallout in November — the market quickly became quiet again. Data shows long-term investors haven’t been easily shaken by the recent weakness.
“Overall, [the] market remained dull waiting for a new catalyst and the overall market liquidity remained scant,” Bernstein analyst Gautam Chhugani said in a note Monday of the last week in crypto trading. “This market is not necessarily bearish, but the participants remain disinterested to trade, as the market waits for catalysts” – specifically, in the form of decisions on any of the spot bitcoin ETF applications in line at the Securities and Exchange Commission.
Chhugani said that whatever ends up bringing some movement back to the market, investors’ real opportunity “lies in staying the course into the new market cycle,” which tends to coincide with the Bitcoin halving. The next one is expected to take place in spring of 2024. Cantor Fitzgerald echoed that emphasis on the long game.
“Although near-term catalysts may take many forms, we continue to believe in the long-term story of ongoing crypto adoption and bitcoin’s staying power as an alternative asset and store of value,” Cantor Fitzgerald analyst Josh Siegler said in a note Monday.
—CNBC’s Michael Bloom contributed reporting.
Correction: On Aug. 12, bitcoin trading volume fell to 112,317 BTC, its lowest level since Nov. 10, 2018. An earlier version of the story misstated the low and when the prior low occurred.
A psychology expert shares 5 toxic phrases ‘highly selfish, entitled’ people always use—and how to deal with them
Published Thu, Aug 24 202310:11 AM EDTUpdated Fri, Aug 25 202312:48 PM EDT
We are all innately selfish to some degree. The real challenge is achieving a balance of “healthy selfishness” that allows you to become self-focused, instead of self-involved.
As a workplace psychology researcher, I’ve spent more than 30 years helping companies navigate overly selfish employees, particularly the ones whose behavior can be harmful to their teammates.
Here are five toxic phrases highly selfish and entitled individuals always use — and how to deal with them:
1. “This feedback is insulting.”
Entitled people interpret any constructive feedback as a personal attack. They refuse to accept the universal truth that there’s always room for growth.
They believe that they can do no wrong, which makes them hypersensitive to any suggestion that their work could use improvement.
2. “My ideas are valuable and always merit serious consideration.”
No matter how mediocre they actually are, selfish people tend to assume that they always bring exceptional value to others.
They disregard the truth that most of our ideas, opinions and suggestions carry flaws, regardless of the effort we invest in them.
3. “Their success comes at the expense of my own.”
A highly selfish person tends to be less successful than someone who channels their self-centered tendencies into helping others.
Since they struggle to see the value in supporting those around them, they think other people’s wins are unfair and the result of special treatment.
4. “Why are you always trying to control me?”
Entitled people strongly dislike bosses who give directions or set clear expectations. To them, a manager’s instructions are, at best, just suggestions, or at worst, an attempt to mistreat them.
5. “You’re being disrespectful by not agreeing with me.”
Entitled people expect recognition for their experience and perspectives, and show little interest in learning from others.
So, when someone offers a different perspective, they don’t see it as a chance to learn, but as a sign of ignorance.
How to deal with overly selfish and entitled people
1. Avoid them, if and when possible.
Engaging with selfish people usually leads to negative results. Unfortunately, they’re widespread, so learning to deal with them is essential for shaping your own success and future.
And sometimes, you have to speak up, if only for your own peace of mind.
2. Set clear boundaries.
Call them out when their behavior becomes too much.
Pose questions like: “Could you clarify how this behavior benefits the company?” or “Do you genuinely believe this behavior serves your own best interests?”
At the very least, you can make clear that their behavior isn’t acceptable to you and is harmful to your working relationship.
3. Educate them on the risks they face.
Selfishness has many negative impacts you can bring up.
For example, you could say, “If you only focus on what fits your needs, you’ll get tunnel vision. This affects everything from tasks to interactions to learning, and it won’t serve you in the long run.”
Or, “If you see everything as a personal offense, you will be constantly frustrated, unfulfilled and burdened by negative thoughts about others. Isn’t that exhausting?
In both instances, know that you may not get the response you had hoped. But if you approach the conversation from an authentic place, you might see a breakthrough.
Stefan Falk is an executive coach, workplace psychology expert, and author of “Intrinsic Motivation: Learn to Love Your Work and Succeed as Never Before.” A McKinsey & Company alumnus, he has trained over 4,000 leaders across more than 60 organizations and helped drive transformations valued in excess of $2 billion. Follow him on LinkedIn.