This month, student loan payments resume or something, and on the 15th, there'll be a squeeze on liquidity and the banks because back-taxes in Cali, deferred due to bad weather last year, will come due. Maybe a factor in both bonds and stocks.
Utilities (and other dividend stocks) are way down, compared with S&P also underperforming. They're competing with fixed income of 5%. Less volatile. They're trading at like 19x PE. Some say they should trade at 12x and 10forward.
Utilities are huge borrowers of debt.
tf utilities are not defensive.
A market where all that matters is the balance sheet, with rates being where they are. Because companies, even ones doing good business, that are borrowing, especially on floating rates, are not looking so good. What looks good is businesses that are making profits.
De-inverting very rapidly. - Gundlach
-80 to -30 in past 2 weeks, 2 and 10 year.
Gasoline demand at 25-year low. Rapid decel in credit card spending (5 months consecutive).
The impact of rising rates is affecting the real economy right now.
It's affecting areas of the market expert investors thought were unable to be penetrated.
Clean energy and Solar etfs are down 20 or 30%. Have to borrow right now to fund their projects.
As rates come back down, people will want to buy a different house again (currently they have 3% rates and don't want to buy something with a 7% rate).
40-year low in mortgage delinquincies. Lots of people can afford the new rates, so there is demand (but not supply).
Fed might not be controlling it anymore, but rather bond investors.
Tom Lee said the morning was a bottom and bounce, and it did bounce and closed Friday high. JPM has been talking about 20% more downside.
‘It looks like sugary drinks are one of the places people cut back the most.’ They modify their product for each country. Coke is expanding into coffee and alcoholic beverages. They have knowhow how to bring products to market.
Wells Fargo's exposure to West Coast and loan market.
People actually want to do M&A again, because for the past couple years, the companies had the option to go public and raise more money than an M&A would bring.
He said a slowdown started 3 months ago and people stopped calling a couple weeks ago. And now the people who call are looking for the best deal, and he even lowered his prices. His minimum now is $125, which he quoted for a couple easy things, but months ago he wouldn't even have gone for less that $250.
Mechanic said the same thing, that people don't want to do anything unless it's under warranty.
“As a licensed Home Inspector, this is my worst year in 14 years. The economy is terrible, but the housing market is the worst. One thing I will point out to you, all of those customers that you were too busy to reply to when you were busy, that was a mistake. You could have established a relationship with some of them and maybe some of the others would be reaching out now or in the future. Always touch base with the client that reaches out. Even if you’re too busy, take advantage of the opportunity. Good luck moving forward my friend.”
Why didn't towns and schools open programs to train people and youths how to do things like home repairs etc, like a 1 or 3 month program.
Before, the Fed was trying to get inflation UP TO 2%, but they couldn't do it. Even if they pushed down on their scale, they couldn't make that happen. Now they're trying to do the opposite, selling bonds and raising interest rates.
We still have enormous fiscal stimulus in the economy. Politicians can't agree on what baseline spending should be, not passing budgets. We haven't seen anything much happen in job destruction or wage destruction.
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