Down goes the Dow

Merry Christmas….Igy

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Beautiful, Ivy. Hope everyone has a nice Christmas. Don't drink too much eggnog.

Merry Christmas (and happy holidays) to all!

Thanks Sally. Our oven went out while the wife was baking pies the day before Thanksgiving. I ordered a new one a few days later, delivered and installed by the Igy Tuesday. Wife froze a pie crust she made, and now busy making the pumpkin filling. Hope this one makes it. :-

Great call here from a year ago on the macro...but missed it on stocks. He thought a soft landing would be bad for stocks because yields would rise. We got the soft landing, yields did rise...but stocks soared anyway. Interest rates do not automatically correlate to stock prices.

Jim Bianco
@biancoresearch
1/9
🧵
A soft landing is priced in. Getting one (if we can define it) does nothing for markets.
How it misses will move markets in 2024.
Count me in the camp that thinks the miss comes for a no-landing (or boom).
This will reignite inflation, sending yields up in 2024.
2:51 PM · Dec 16, 2023
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Whoopsies

predicted SP500 at 4200 with a downside bias...but got 6,100. Only a 50% miss. Ouch.

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Carl Quintanilla
@carlquintanilla
JPMORGAN: “.. we expect a more challenging macro backdrop for stocks next year with softening consumer trends .. lackluster global earnings growth .. For S&P 500, we estimate earnings growth of 2-3% next year with EPS of $225 and Price Target of 4,200 with a downside bias.”

11:56 AM · Nov 29, 2023
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Elon Musk closing in on $500 billion. How rich will he be by 2030? If TSLA performs anywhere close to last 5 years, he will be worth well over $1 trillion.

WSJ - Rivian's $6 billion bailout:

"Government money always comes with a price, and now we are learning what Rivian Automotive’s is for its recent $6 billion loan from the U.S. Energy Department. The struggling electric-vehicle manufacturer will subject its workers to union domination.

President Biden in September issued an executive order directing agencies to prioritize projects that promote “positive labor-management relations” with “agreements designed to facilitate first collective bargaining agreements, voluntary union recognition, and neutrality by the employer with respect to union organizing.” Want government money? Better surrender to the unions that back Democratic politicians."

More weaponization of the government to force companies to support Democrat causes. In fact, Kamala's brother-in-law did something very similar:

nypost.com

Kamala’s brother-in-law fleeced taxpayers for billions to give to left-wing groups and lawyers

@nypost

Joe Biden’s son, Hunter, may be the current world-class champ of presidential-family shady dealings, but not for long.

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https://www.wsj.com/lifestyle/workplace/dei-corporate-creators-program-changes-2db86ed8?mod=wsjhp_columnists_pos_3

Article about how DEI programs haven't succeeded.

Reminds me a bit of this:

nypost.com

Apple’s diversity chief out after outcry

@ysteinbuch

Apple’s diversity chief is stepping down after only six months on the job — after causing an outcry by saying that being a minority or a woman are not the only criteria for diversity, according to …

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Apple’s diversity chief is stepping down after only six months on the job — after causing an outcry by saying that being a minority or a woman are not the only criteria for diversity, according to reports.
Denise Young Smith, who was named vice president of diversity and inclusion in May, made controversial comments last month during a One Young World Summit in Bogotá, Colombia.
“There can be 12 white, blue-eyed, blond men in a room and they’re going to be diverse too because they’re going to bring a different life experience and life perspective to the conversation,” the inaugural diversity chief said.
“Diversity is the human experience,” she said, according to Quartz. “I get a little bit frustrated when diversity or the term diversity is tagged to the people of color, or the women, or the LGBT.”

Tesla is another example of how the government helps private companies. Good post Sally!

In June 2009, Tesla was approved to receive $465 million in interest-bearing loans from the United States Department of Energy. The funding, part of the $8 billion Advanced Technology Vehicles Manufacturing Loan Program, supported the engineering and production of the Model S sedan, as well as the development of commercial powertrain technology.

This is wild.

the market is saying that Fed policy is wrong...that the fed should not be lowering rates. The market is saying that lowering rates si counterproductive...that in the end fed rate cutting will in the end cause inflation and higher rates.

Very unusual revolt by the bond vigilantes.

I think we're probably done with fed rate cuts, unless longer term bonds start falling soon. Fed can't ignore what's going on here with a strong, inflationary economy and rates backing up.

The Kobeissi Letter
@KobeissiLetter
It's official:
The 10-year note yield is now up 100 basis points since the "Fed pivot" began in September.
In other words, while the Fed has CUT rates by 100 bps, rates in the market have RISEN by 100 bps.

TSLA went public a year later (June 2010). Since then the S & P has had an annualized rate of 12.4%. TSLA - 42%.

agreed, kudos to the Obama administration for seeding and helping Tesla become what it is today! We built that!

I saw the Dylan movie - it's actually outstanding. Better than the mixed reviews suggest. Chalamet apparently had five years to prepare and absolutely nailed it. Doesn't try to over-explain or make him into a saint or devil...just a flawed young man with a giant gift and matching ambition trying to find a way through a quickly changing world when he is being pulled in multiple directions.

Lots of legendary anecdotes made it into the movie, incl my favorite, when Al Kooper sneaked into the studio and invented that amazing organ sound in Like a Rolling Stone.

Those interested in rock history might want to read up beforehand to sort out who is who and what is exaggerated. Helps a lot. The many characters can get confusing.

In the end, a view into a heroic period of rock history and a wonderful picture of youth confronting growing up. It might bring some tears to those who care a lot about that music.

Good to know. I'm in, will be checking it out.

I thought it must be interesting to have this come out while Dylan is still with us so I checked out his impressions. He can be rather ornery, esp. with the press and the like. It turns out he likes it, and got to review the script in advance and annotate it.

AI has me believing that he said he probably won't see it, according to what he told the director, though.

I gather that a pivotal moment in the film is when he electried his sound (as opposed to strictly accoustic) back in 1965 at the Newport Fold Festival. I distinctly remember when that happened and what an uproar it caused. It was quite the shock and got very mixed reaction from his fanbase.

Thanks for the tip. This will be a great thing to do while the family is looking for something to do during the Holidays.

“The US stock market is becoming even more concentrated:

The top 10 stocks now reflect a record 40% of the S&P 500's market cap.

This percentage now exceeds the 2000 Dot-Com bubble levels by ~14 percentage points.

In 2024, these stocks have added over $7 TRILLION in market cap and are now worth a record $20.9 trillion.

To put this into perspective, the entire European stock market is worth ~$16 trillion, or $4.9 trillion LESS.

The market's rally is not broadening.”

The Kobeissi Letter