The Market 2022-2023-2024-2025

[Dback Jon]

FEDS hold interest rates steady again today resulting in stocks taking a bit of a dive in the afternoon. Continuing for now to take a wait and see approach as they gain more insights on tariff fallout before possibly lowering rates.

Which is the wise thing to do

 

[Yuma]

FEDS hold interest rates steady again today resulting in stocks taking a bit of a dive in the afternoon. Continuing for now to take a wait and see approach as they gain more insights on tariff fallout before possibly lowering rates.

Watch Trumps head explode ala Scanners!

 

[Folster]

I thought this was interesting.

Healthcare...

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[Yuma]

Maybe some opportunities to buy on healthcare?

 

[Folster]

Maybe some opportunities to buy on healthcare?

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

 

[Yuma]

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

That's cool. I don't feel I have enough money to try and hit on single stocks. So I generally look for an ETF for the sector. One thing I have noticed is that strategy raises your floor on returns, but it does limit your upside versus the stocks that shoot up. Just like you said, the Mag 7 you can get in many ETF funds, but you get a bigger bang for your buck buying them individually. Of course you have more risk overall. You just have to be comfortable with that risk.

 

[Russ Smith]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

 

[82CardsGrad]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

There really isn't a lot of logic behind the market these days. The S&P is trading at an historical valuation, around 22-23 P/E, when the historical average is around 16... Is it justified? Will companies grow their earnings to the extent this elevated P/E is validated? And does it even matter when the market seems oblivious to historical norms?

 

[elindholm]

Healthcare is typically a defensive sector so underperformance during a bull market is to be expected. It's 5 and 10 year performance is a bit surprising because I feel like it was ripping during Covid.

I don't have any healthcare in my single stock holdings and like many I'm over exposed to the Mag 7 stocks, so I may add some healthcare exposure with XLV versus trying hit on one or two stocks in that sector.

We used to own a handful of pharmaceutical stocks directly, but their variance drove me crazy. As a retail investor, it's near impossible to guess which drugs in the pipeline are going to pay off. I also had a disappointing experience with PFE, failing to cash in when it soared during the pandemic, and later losing all of those gains.

So, like you, I've given up on trying to pick a couple of winners. Our pharmaceutical coverage now is provided by PPH, which is similar to XLV but is 35% international (XLV is all domestic). PPH has slightly out-performed XLV over the past five years.

 

[Folster]

We used to own a handful of pharmaceutical stocks directly, but their variance drove me crazy. As a retail investor, it's near impossible to guess which drugs in the pipeline are going to pay off. I also had a disappointing experience with PFE, failing to cash in when it soared during the pandemic, and later losing all of those gains.

So, like you, I've given up on trying to pick a couple of winners. Our pharmaceutical coverage now is provided by PPH, which is similar to XLV but is 35% international (XLV is all domestic). PPH has slightly out-performed XLV over the past five years.

UNH seems to be the oversold value play or potential falling knife in that sector. UNH makes up 5.78% of XLV. I don't believe PPH has exposure to health insurance companies. One needs a strong stomach or cold capitalist heart to invest directly into a health insurer, UNH especially.

 

[Mainstreet]

There really isn't a lot of logic behind the market these days. The S&P is trading at an historical valuation, around 22-23 P/E, when the historical average is around 16... Is it justified? Will companies grow their earnings to the extent this elevated P/E is validated? And does it even matter when the market seems oblivious to historical norms?

JMHO, but I think the stock market is soaring because they are waiting for the Feds to reduce interest rates in September.

Then, inflation gets another kick-start. The question is, how many consumers can keep pace?

 

[82CardsGrad]

JMHO, but I think the stock market is soaring because they are waiting for the Feds to reduce interest rates in September.

Then, inflation gets another kick-start. The question is, how many consumers can keep pace?

Oh, that is 100% the case... However, what seems to be lost in all of the market craze is that the consumer still represents 70% of GDP. Yes, the AI craze has lifted Big-Cap Tech Stocks to record highs which, collectively, have brought the NASDAQ and S&P to record highs. Even when the Fed does drop rates, maybe in Sept, or later in the year, it will be small bps.

I dunno... the more I look at all of this, I just can't see why the market will continue to leap forward. At best, it maintains current levels into next year. But I'd be lying if I didn't say some type of correction is coming soon, perhaps as much as 10%.

 

[Mainstreet]

Oh, that is 100% the case... However, what seems to be lost in all of the market craze is that the consumer still represents 70% of GDP. Yes, the AI craze has lifted Big-Cap Tech Stocks to record highs which, collectively, have brought the NASDAQ and S&P to record highs. Even when the Fed does drop rates, maybe in Sept, or later in the year, it will be small bps.

I dunno... the more I look at all of this, I just can't see why the market will continue to leap forward. At best, it maintains current levels into next year. But I'd be lying if I didn't say some type of correction is coming soon, perhaps as much as 10%.

Down to the basics as I see them, if the consumer can't keep up with prices it's either something like a recession or devaluing the dollar.

I don't think the Feds should lower the interest rate. It's opening Pandora's Box.

 

[82CardsGrad]

Down to the basics as I see them, if the consumer can't keep up with prices it's either something like a recession or devaluing the dollar.

I don't think the Feds should lower the interest rate. It's opening Pandora's Box.

Yep... Whether it's due to AI finally having an impact on jobs (meaning less bodies required to perform tasks), or companies feeling the Tariff pinch, the employment situation is likely to continue what appears to be, a downward trajectory.
Coupled with hire prices due to Tariffs, a full-blown recession definitely can't be taken off the table.

As for rates... I'm torn. Consumers, once impacted by the eroding labor market, will be in dire need of lower rates... However, with the impact of Tariffs causing higher prices (inflation), the case can easily be made rates should remain where they are.
It doesn't matter though as Trump's new Fed Chief will 100% be nothing more than his 'lil puppy on a leash held by Trump.

 

[Mainstreet]

Yep... Whether it's due to AI finally having an impact on jobs (meaning less bodies required to perform tasks), or companies feeling the Tariff pinch, the employment situation is likely to continue what appears to be, a downward trajectory.
Coupled with hire prices due to Tariffs, a full-blown recession definitely can't be taken off the table.

As for rates... I'm torn. Consumers, once impacted by the eroding labor market, will be in dire need of lower rates... However, with the impact of Tariffs causing higher prices (inflation), the case can easily be made rates should remain where they are.
It doesn't matter though as Trump's new Fed Chief will 100% be nothing more than his 'lil puppy on a leash held by Trump.

Personally, I would take a market correction like a recession over the alternative.

Then after the correction, interest rates would naturally come down.

IMO, runaway inflation will take down the average wage earner into something much worse, creating even more opportunities for the rich to get richer.

 

[elindholm]

UNH seems to be the oversold value play or potential falling knife in that sector. UNH makes up 5.78% of XLV. I don't believe PPH has exposure to health insurance companies. One needs a strong stomach or cold capitalist heart to invest directly into a health insurer, UNH especially.

Ah, I didn't process that XLV does the whole sector, not just drugs. So yes, that's another key difference. I won't touch UNH, but we do have HUM, so I guess you could say that's a similar gamble of trying to pick out an individual winner.

We also hold LH and RPRX, the latter of which has been having a great year so far.

 

[Yuma]

These markets are insane. Friday we find out all the job and likely inflation numbers and GDP are bogus and the markets tank. and then today they're up, even higher than they fell Friday, because experts now think there will be a rate cut because the jobs numbers were so bad. The rate cut won't be until Sept, but the markets are skying today?

I know earnings are good but for those of us old enough to remember the .com bubble this is starting to get to that point? When people say the fed will HAVE to cut interest rates to save the economy that's normally NOT a good thing

Oh there may be a rate cut, IIIIIIFFFFFFF Trump doesn't try and tariff the Universe 110 percent!

 

[Folster]

Apparently Buffett wasn't afraid of UNH. Right after I call it a falling knife, it's up nearly 30% off its low.

 

[Yuma]

Apparently Buffett wasn't afraid of UNH. Right after I call it a falling knife, it's up nearly 30% off its low.

Looks like people took some profit today and dropped it under $300/share. Gotta see the candlesticks....

 

[Dr. Jones]

Fun thread:

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[Yuma]

Fun thread:

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Wow! What a record for investing in Bitcoin. "Bitcoin’s "Boring" Year: After ranking #1 in 11 of the last 14 years"