We survived the longest government shutdown and the economy seems to have shrugged it off.
I am sure there will be those who had their travel by air compromised and government workers went without pay for over a month.
It doesn’t appear the nation’s economy even blinked.
The Fed will now have its precious data to decide on whether to cut interest rates again in December. It appears there is some opposition amongst the Fed Board of Governors.
Some pointed to concerns that a cut may not come, driving the market down toward the end of last week. I tend to believe it was more profit taking to insure gains for this year.
We saw significant investors last week sell their holdings in Nvidia. I can’t believe they see trouble ahead for the company but took the profits and ran.
We are so close to the end of year that we may see more of that.
I have noticed that several well respected analysts have raised their projections for where the S&P 500 will end next year.
Predictions have ranged from 7200 to 7800, indicating the potential for double digit growth at the most optimistic level.
The average return for the S&P 500 is more in the 7% range.
This is what escapes most new investors looking for ways to increase their net worth.
Many seem to read the positive headlines only and believe they can double what they have saved by investing in equities.
What they are missing is it takes time and the compounding of returns to double your money.
Maybe they would be better suited to a new trend of essentially betting on predictions.
Instead of games, one wagers on what they think will happen.
Just another example of the public’s insatiable need to gamble.
Some say it will grow larger than the stock market.
The appealing factor is that it is not dragged down with financial data and jargon. Make no mistake though, it is just another form of gambling.
You are not even close to investing. For those curious, just look up Kalshi.
Good luck or maybe I should say good instincts.
With the shutdown behind us, maybe we can get back to the real business at hand - earnings projections into 2026.
Most earnings are in for the fourth quarter. Of course, one of the most watched reports will be issued Wednesday.
It is the new bell cow, which is Nvidia.
Maybe those mega investors didn’t want to take a chance and got out early.
Sometimes even good news is punished because it’s not great news or the projection for the future isn’t absurdly optimistic.
There is little incentive for CEOs to step out on a limb being overly optimistic.
Being conservative can yield a haircut.
Being overly optimistic can cost a boss his job.
I’m one of the few who sees little reason for another rate cut given the growth in the economy.
I still think it will come.
There is enough noise around the lack of job growth to probably warrant the Fed’s attention.
I think we are witnessing a new paradigm where labor will have to shift into other areas less traveled.
We have gone through these times before as new technology eliminates other jobs.
Look at how few farmers we have compared to before and how much more we produce. I could go on and on as to blacksmiths, stage coaches and trains.
This is what technology does and we have to adapt like our animal friends - evolve or perish.
The past is great to remember, but the future is what we will have to deal with.
It is a changing target and we hope the lessons learned in the past will guide us but not bind us.
If nothing else, the holiday season will distract us from some political posturing and we can get on with supporting the economy by spending way too much on presents and celebrating.
All in all not such a foolish endeavor as our families are our most important investment.
While you can’t buy happiness, you can at least have some fun which we all need in these times.
