Last week was instructive as we had earnings reports and the Fed held its monthly meeting.
Chairman Powell provided little or no hope for a rate cut in March.
Then we got better than expected earnings from Meta aka Facebook, Amazon and Alphabet aka Google.
Zuckerberg announced that they would be reducing their work force.
If there was ever a shot across the bow to employees as to the impact of AI,
This was just another feather in the hat for the Magnificent 7.
There is no denying that these stocks have lead the markets and completely out performed the rest of the pack.
I will remind you that another group did this in 2000 only to be brought back to reality.
Of real importance was the mew jobs report on Friday which came in over twice the projections.
That is keeping the unemployment rate just above 3%.
Maybe it is time to just quit talking about any kind of landing at all as the econmy seems to be smooth sailing.
It does beg the question as to why we even need to cut interest rates.
It seems that for investors it is the best of times.
I have a friend that buys and sells options and he was a busy beaver last week with the earnings reports coming in better than expected.
He was buying way out of the money calls out into 2025 for the Magnificent 7 and in particular Nvidia.
It really appears to be a traders market.
I on the other hand will be looking to find dividend paying stocks.
It is not that hard to find companies that will deliver just over 5% with the potential for capital appreciation.
One of the sectors that I am looking at is the regional banks.
They have been depressed of late due to concerns over having to write down loans made on commercial property.
If you can call that value then that is what I am looking to obtain.
The concern comes after SVB in California NY Community Bancorp in New York last week. Shopping for value is not the same as riding the tide with the Magnificent 7.
It comes with real risk and has a much longer time line.
We will continue to get earnings this week with the likes of industrial giants like Caterpillar.
I feel the big news earnings reports are behind us and we may go a while before anything like last week comes over the horizon.
We are going to be left with the reality of the day. Inflation is far from dead and the economy is doing just fine.
On the other side of the ledger is all the geopolitical distractions as well as an election on the horizon.
It just seems to me that it is almost too good to be true and I am the optimist in the group. AI is bringing hope for a completer game changer and it may well happen.
It may take longer just like we are seeing with EVs and renewable energy.
Things in fact do not change over night.
