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Can’t Keep This Market Down

Yesterday once again the S&P500 moved higher–certainly at a modest pace, but higher just the same. On one hand we have a slowing economic picture–at least to a minor degree which markets want to see, but on the other hand a slowing economy indicates reduced corporate earnings. Interest rates which are off the high are still very elevated and marginal companys with lots of debt are being crushed–2024 will be an epic year in some areas as debt continues to be refinanced at higher rates. No doubt the equity markets are priced for perfection–a soft landing is priced in no doubt.

Interest rates are off a little this morning with the 10 year treasury at 4.19%–down about 5 basis points from the close yesterday. We have the consumer price index being released in 45 minutes–and expectations are for the headline number to fall to 3.1% from 3.2% a year ago. The core rate is expected to remain at 4% which is flat to the last reading. No doubt deviations from expectations have the potential to move markets substantially.

Yesterday brought a little pain to my portfolios–nothing drastic, but red just the same. No real reason for the move, but folks are probably weeding out some of their losers for end of year tax reasons.

I have been adding lots of issues to the Master List which is here. Right now I am adding the ‘illiquids’ – mainly $50 and $100 issues (they are on a separate sheet right now). In fact as I was adding the Connecticut Power & Light issues (all $50/share issues) I decided to test the liquidity and entered an order for a few shares. Spreads (bid/ask) are pretty wide and with minimal trading my order did not execute–maybe I’ll try again today. With the exception of the Tri-Continental 5% preferred I have little experience with the illiquids and now with current yields over 6% they are interesting–in a modest sort of way.

Well let’s buckle our seat belts–and hope we don’t need them for the consumer price index (CPI) number.

6 thoughts on “Can’t Keep This Market Down”

  1. So LEI’s squeak by on a very tight and soft landing zone , no recession?

    “The US LEI trajectory remained negative, and its six- and twelve-month growth rates also held in negative territory in October,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Among the leading indicators, deteriorating consumers’ expectations for business conditions, lower ISM® Index of New Orders, falling equities, and tighter credit conditions drove the index’s most recent decline. After a pause in September, the LEI resumed signaling recession in the near term. The Conference Board expects elevated inflation, high interest rates, and contracting consumer spending—due to depleting pandemic saving and mandatory student loan repayments—to tip the US economy into a very short recession. We forecast that real GDP will expand by just 0.8 percent in 2024.”

  2. I own a property that a car dealership of one of the “Big Four” sit on. The operator that has been in business for over 30+ years (I’ve owned the property for over 15 years) asked me 3 weeks ago to defer his quarterly payment (will accrue interest at 7%) starting with his/their next payment this January. The car dealership operator has NEVER asked for a deferment of payment; even during Covid. This article is definitely relevant and an interesting shift 🚙 https://wolfstreet.com/2023/12/12/its-like-ford-gm-and-fca-got-run-over-by-a-tesla-on-autopilot/
    If people like you, they’ll listen to you, but if they trust you, they’ll do business with you.” —Zig Ziglar, author, salesman, and motivational speaker
    Today, there is no trust in Ford, GM and Stellantis (Chrysler), I am Azure

    1. What is new here? I bought my first Japanese car 40 years ago, and have never seriously considered buying a domestic model since. (I don’t think I would buy a Tesla today, due to their quality and reliability problems.)

    2. Speaking of being run over by Tesla- take a look a Netflix’s new movie ” Leave The World Behind”
      Very timely- for several reasons.

      On the other hand- the Tesla pretend truck won’t overtake the Lightning even with the 50% cutback for now. Elon says if you buy it, you can’t sell for a yr, or was it two? Very encouraging.
      This week, SNL properly poked fun at the Tesla ‘truck’. Reminds me of another SUV- the Grand Viagra … I mean Vitara.

      1. I have a pending lawsuit against Tesla. They stole my body design for their truck that I drew up in first grade.

  3. The expert, the analysists always see the glass as half full. They lower estimates for the next quarters earnings and cheer if the company beats those estimates even if they are lower than last year’s earnings.

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