Stock Market Discussion, Chat About the Latest Market Action

[c4n]

I think I’m more interested in the “spin” that will be offered than the actual report.

Putin.

 

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[MJ DeMarco]

Markets down hard, looks like the markets haven't believed an ounce of the spin as another 40 year inflation high has been achieved.

 

[Kak]

I feel vindicated. I am up 0.18% today. And, somehow, I am positive this year too.

 

[socaldude]

Markets down hard, looks like the markets haven't believed an ounce of the spin as another 40 year inflation high has been achieved.

I’m a big silver collector and one of my favorite things to do when I am in Mexico is to buy some 1oz silver libertads that they sell in Banco Azteca.
They’ve had a moratorium on the sale of the coins for over a year now. That tells me they are long silver. And somehow inflation has peaked?

 

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[YanC]

I’m a big silver collector and one of my favorite things to do when I am in Mexico is to buy some 1oz silver libertads that they sell in Banco Azteca.
They’ve had a moratorium on the sale of the coins for over a year now. That tells me they are long silver. And somehow inflation has peaked?

I've been thinking about opening a long position in silver for the past few weeks. It may have a nice run to catch up with the valuation of gold. How would you do it besides buying physical silver (I already own physical gold) ? I'm used to selling puts the MJ way, or rather buying calls ?

 

[Kak]

I've been thinking about opening a long position in silver for the past few weeks. It may have a nice run to catch up with the valuation of gold. How would you do it besides buying physical silver (I already own physical gold) ? I'm used to selling puts the MJ way, or rather buying calls ?

As you undoubtedly already know, this is no substitute for owning the physical bullion, but…

You can buy SLV and even trade covered calls on it.

My biggest position is reserved for GLD and trade the wheel on it. I sell a lot of covered calls and cash secured puts. You could do the same with SLV.

 

[Matt33]

I've been thinking about opening a long position in silver for the past few weeks. It may have a nice run to catch up with the valuation of gold. How would you do it besides buying physical silver (I already own physical gold) ? I'm used to selling puts the MJ way, or rather buying calls ?

PSLV, physical bullion, or a swiss vault company like GoldAvenue.

Or, mining stocks. ETFs like SLVP, SIL, SILJ.

I like to diversify between all of these.

 

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[socaldude]

How would you do it besides buying physical silver (I already own physical gold) ?

Selling puts is technically the least risk to get exposure to some long deltas.

 

[MJ DeMarco]

Looks like it’s gonna be a rough day tomorrow, strap yourself in for the ride!

 

[BD64]

Wednesday is another big day, Fed comes out with another rate hike and hints at their future plans

 

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[EmotionEngine]

[Edit: ^ You beat me]

Inflation puts pressure on Powell: What to know this week

Markets face another half-point rate hike this week – and the prospect of sharper increases ahead when the Federal Reserve concludes its two-day policy-setting meeting Wednesday.

finance.yahoo.com

Wednesday/Thursday may lead to headaches. Expected rate hike with Fed meeting on June 15th.

 

[loop101]

No idea when this sell-off will end. I've read that due to "internet time", whatever happens might not take as long as it use to, so a 2 year bear-market might get compressed in to 1 year (and possibly less).

 

[Andreas Thiel]

This is a topic that supposedly will be more prominent in the news, soon.

The short version: remember the EU debt crisis? What we see here are the yields of European treasury bonds (Greece, Spain, Italy and Germany). Basically things were okayish recently, because the European Central Bank has bought bonds under a "whatever it takes" policy, which they have announced they will no longer do (because they can't afford to).

Now yields are exploding. At these levels, given the level of debt of these countries, we are definitely looking at the start of the next debt crisis. The ECB would have to keep buying to keep yields in check, but then inflation would get worse which would also mean game over for the EU economy.

Not sure if there is actionable advice in there. I suppose one should not bet on the Euro right now.
I also think it makes sense to take a closer look at articles that cover anything the ECB says and does in the near future.
They will have to do ... something. WIll be interesting to see what they come up with.

 

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[YanC]

Not sure if there is actionable advice in there.

Borrow in EUR against cash-flowing assets. Gold. Stocks of companies that make money worldwide and have nothing to do with the government. USD and CHF outside of the EU juridiction and only the bare minimum in EUR. I once had a position in Chinese bonds but sold a while ago as I couldn't get around having money dependent on the CCP (they have been performing greatly though so far). These are my plays...

 

[MJ DeMarco]

Two-year yields reached 3.34%, the highest since December 2007, 5-year yields rose to 3.509%, the highest since July 2008, Benchmark 10-year yields hit 3.44%, the highest since April 2011.

Interesting, what was going on economically 2007-2008?

 

[MJ DeMarco]

Those of you waiting for housing prices to stabilize and perhaps decline will finally get their wish.

Mortgage rates hit 5.78 percent in record spike

Interest payments for the U.S. benchmark 30-year fixed rate mortgage saw the largest one-week upward movement in 35 years, hitting 5.78 percent as of Thursday. The rate jumped more than half a perc…

thehill.com

Question is, will prices stabilize, or start to go lower?

These types of rates will definitely thin out the buyers and create less of a stampede.

 

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[fastlane_dad]

Those of you waiting for housing prices to stabilize and perhaps decline will finally get their wish.

Mortgage rates hit 5.78 percent in record spike

Interest payments for the U.S. benchmark 30-year fixed rate mortgage saw the largest one-week upward movement in 35 years, hitting 5.78 percent as of Thursday. The rate jumped more than half a perc…

thehill.com

Question is, will prices stabilize, or start to go lower?

These types of rates will definitely thin out the buyers and create less of a stampede.

Some quick math is every 1% increase in interest rates drops the amount of home you can purchase by 10%. So a 3% or so increase drops the amount of home by 30%. You are now talking a considerably DIFFERENT type of home (smaller, not remodeled, missing a lot of amenities), or an entirely different neighborhood.

Given that 25% or so of recent buyers have been all cash - it will still remain to be seen which way the market heads.

All I know is that I havent seen THIS amount of inventory in MY and the SURROUNDING zip codes (3-4X the homes I saw at the low end months back) in Scottsdale in quite some time. And many more homes starting to show 'reductions' in price on the daily. Perhaps the top has been reached for a bit of time?

 

[Andreas Thiel]

View attachment 43964
This is a topic that supposedly will be more prominent in the news, soon.

The short version: remember the EU debt crisis? What we see here are the yields of European treasury bonds (Greece, Spain, Italy and Germany). Basically things were okayish recently, because the European Central Bank has bought bonds under a "whatever it takes" policy, which they have announced they will no longer do (because they can't afford to).

Now yields are exploding. At these levels, given the level of debt of these countries, we are definitely looking at the start of the next debt crisis. The ECB would have to keep buying to keep yields in check, but then inflation would get worse which would also mean game over for the EU economy.

Not sure if there is actionable advice in there. I suppose one should not bet on the Euro right now.
I also think it makes sense to take a closer look at articles that cover anything the ECB says and does in the near future.
They will have to do ... something. WIll be interesting to see what they come up with.

Apparently there is a "new anti-fragmentation instrument" ... ignore what I wrote - they got this .

Lagarde Tells Ministers ECB Plans for Limit on Bond Spreads

European Central Bank President Christine Lagarde told euro-area finance ministers that the ECB’s new anti-crisis tool will kick in if the borrowing costs for weaker nations rise too far or too fast, according to people briefed on their discussions.

www.bloomberg.com

Commentary I just read says that the market will try to call the bluff (the article mentioned Mike Shedlock of Sidka Capital Management as an example).

Some articles assume that it can only be a Eurobond:

How to resist fiscal dominance

The ECB is intent to resist market pressure to bail out governments. But it may struggle.

www.eurointelligence.com

Mike Shedlock doubts that this will happen:

https://twitter.com/i/web/status/1538988091251183616

View: https://twitter.com/MishGEA/status/1538988091251183616

But IDK ... maybe the WAR means the spoilt Germans will just HAVE TO show some solidarity for a change.

Lagarde did not "want to reveal any details regarding the bond buying tool", so at least we know that it would be a bond buying tool.

 

[srodrigo]

LOL

The stock market is poised for a strong 2nd half of 2022 as the US economy avoids a recession and inflation gets cut in half, JPMorgan says

"While the probability of recession increased meaningfully, we do not see it as a base case over the next 12 months," JPMorgan said.

markets.businessinsider.com

 

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[thechosen1]

@MJ DeMarco @MoneyDoc @YanC I have shares in this company called Kenon Holdings (KEN) that just dropped by over 20% today due to a capital reduction distribution. Is this like a special dividend? Just wondering if y'all know what this means. I thought this was a great investment, but that 20% drop was...spicy!

 

[MJ DeMarco]

@MJ DeMarco @MoneyDoc @YanC I have shares in this company called Kenon Holdings (KEN) that just dropped by over 20% today due to a capital reduction distribution. Is this like a special dividend? Just wondering if y'all know what this means. I thought this was a great investment, but that 20% drop was...spicy!

You should get that reduction back in the form of a dividend added to your account, usually a few weeks later. If it is classified as a dividend, it will be a taxable event, although "capital reduction distribution" sounds like a Return of Capital, which means (as far as I remember) it isn't a taxable event. Bottomline, it results in a net neutral, a wash.