Big news today is the real estate sales judicial settlement. This is providing an opportunity to change the paradigm regarding real estate sales as well as lowering the cost and price of housing. The United States has by far, one of the highest real estate agent fees in the world. Typically, today or yesterday the real estate agent represented the seller and as far as cost, the buyer. The “buyer agent” was actually paid through...
Federal Reserve Chairman Powell testified to Congress that interest rates will come down this year, but the Fed is not confident that inflation is under control yet. At least that is what he said on his first day of testimony. Today, his second day of testimony, he was much clearer that rates are very high compared to what they would be in a normal economic/inflation environment. The Fed goal for inflation is still 2% and...
More positive economic data and more records. Americans are still unhappy about the economy but more optimistic about their own finances. Main street vs. Wall Street continues. Wall street wins with the stock market, main street wins with the economy and Americans are still unhappy. Even worse, it is an election year with two octogenarians running for President. Maybe the resources and tools for aging in America will get more attention. Speaking of aging in...
Cognitive dissonance is a concept I learned in college. One of the 5 learnings I remember from college. Was that because I was not paying attention, or it just was not interesting to me. Yes, is the answer. I was preoccupied with other learning activities. Nevertheless, here is the definition: Cognitive dissonance is the discomfort a person feels when their behavior does not align with their values or beliefs . Cognitive dissonance is a psychological...
Earlier this week markets had a big scare with inflation numbers-CPI-coming in a little hotter than expected. Markets had a big sell off on Tuesday after a big positive day on Monday. Then markets spent the rest of the week recovering with the SP500 setting a new record high. The bond market moved their bets to a later date for the Fed to lower interest rates. I attended a Citi Private bank event presenting their...
I read an interesting analysis of 2024 by Citi Private Bank. I also attended a meeting for clients of Citi Private bank where their analysis was presented. Basically, we have the “Goldilocks” economy and markets awaiting us in 2024. I was looking for Goldilocks in the audience at the meeting. Declining interest rates, an undervalued stock market except for the “Magnificent Seven” (Microsoft , alphabet, amazon, NVidia , meta, tesla and apple. These stocks were...
Markets are counting on 4 rate reductions this year and were hoping that the Fed announcement this week would add to those expectations. The Fed announcement and then Chairman Powell’s news conference did not deliver. The Fed announcement moved from indicating possible increases to confirming expectations of lower interest rates ahead, just not now and maybe not in March. The sell off on Wednesday was immediate for markets and those averages that had the largest...
Today Gross Domestic Product first estimates for the last quarter of 2023 were released. The economy expanded 3.1% from a year earlier due to strong consumer spending and hiring. The domestic US economy continues to defy predictions for a slowdown or recession imminently. It seems the stock market predicted this good news with the rally concentrated mostly in the last quarter of 2023. The stock market has continued to rally based on rate reduction expectations...
Scams are very dangerous. The reason they continue to accumulate victims is they prey on vulnerable human emotions that are part of each of us. All individuals are vulnerable. Scammers are becoming more sophisticated as an article in sfchronicle.com where artificial intelligence was used to copy a son’s voice and used in a call to his parents about a car accident where he ran over a pregnant woman and was arrested. The call was about...
To say the year for markets begins not as it ended is palpable. Stocks have lost up to 2% for the year to date with the Nasdaq index being the greatest loss as it was the largest gainer in 2023. The 10-year US Treasury is yielding over 4% again with shorter rates holding steady. Today, inflation numbers fell short of expectations with the wholesale inflation numbers due tomorrow. Analysts expect these numbers to not alter...
Wishing everyone a healthy and happy new year. What a start to the new year in markets. Gains from last year be damned. If the first two days are any indication of the performance for the year, 5% US treasuries will look good. Gains in markets and interest rate declines surprised almost everyone except those that do not follow or engage in prognostication and just accept whatever returns markets offer based on long term historic...
Today, Friday, the Fed’s favored inflation indicator the PCE or Personal Consumption Expenditures declined and is close to the Fed target of 2% so interest rates should continue to decline. We might have more evidence of inflation reduction next week, but we shall see. The stock market, after a one-day large decline continues to move higher in an end of the year rally. Last week the Fed did not disappoint markets. Chairman Powell held rates...
