Consumer Sentiment crashes, highest inflation expectations in 30 years... stocks tumble

" Biden's fault" " fake news" " deep state"

 

I wonder when we’ll have to start sending CARE packages to red states.

 

Time to invest when the stocks are cheap!

 

"Dems are mentally ill," " are hysterical, corrupt, and clueless." (Throw in a couple of mocking memes)

There, got that out of the way. Any chance, at all, of meaningful debate now? The MAGA posters have become crashing bores.

 

Ugh. That’s not good.

But plastic straws, Gulf of America and let’s talk more about the 51st state.

 

Have we moved on from Greenland now that we're getting 50% of Ukraine?

 

Not to worry. It's all part of the stable genius's plan to Make America Great Again.

 

I am not sure the consumer is rational anymore. Look at how consumer confidence and GDP interact. I used "real GDP" so it is inflation adjusted.

• Consumer is super pessimistic regardless compared to history
• Consumer confidence plunges sometime before a recession (2000/2008), didnt predict 1990 and does not always reflect upcoming recessions.
• May be a better reflection of voting patterns than spending patterns which should worry the GOP more.

 

It looks fairly rational at predicting recessions until 2022, which was when inflation kicked in. Pretty crazy ‘22 sentiment was as bad as 2008 financial crisis. That’s a lot of people that must have no functional memory of that crisis.

 

Also: Home sales drop sharply in January as prices hit high

• Sales of previously-owned homes fell 4.9% in January from the prior month, according to the National Association of Realtors.
• There were 1.18 million homes for sale at the end of January, an increase of 3.5% from December and 17% from January 2024.
• The median price of a home sold in January was $396,900, up 4.8% from the year before and the highest price ever for the month of January.

 

S&P now down 1.2% today. Get used to it. We're going to have a lot of days like this due to the incompetence and chaos of the Trump admin.

 

WINNING!!!!!

 

This is still nothing, it’s just uncertainty, not taking the full scope of problems seriously. A “correction” is defined as 10%-20% down, so I think even a run of the mill correction gets you around or under 40k Dow.

If shit hits the fan or markets get concerned with things like “political instability” (a term Americans may need to familiarize themselves with), you could go well beyond a typical correction.

 

Maybe it's part of the plan. Cheap investments for the super rich while the rest of us are told to row harder.

 

Stocks on sale

 

The oligarch set has been rooting for a recession since 2021. Kills two birds with one stone: inflation and a worker-friendly labor market. They aren't going to get hurt and they get more compliant workers if unemployment shoots up. On top of that they have a Republican government sitting on their hands while looters are shredding the federal government with the kind of hard core austerity that could never be done democratically.

 

note that is previously owned homes. input costs for homes continues to increase. land, impact fees, building codes, materials, labor..none of it is coming down and the margins on new homes aren't that high. I can tell you that demand for entitled (zoned and/or permitted) land in Florida remains strong, especially in some sub markets

 

The Dow is currently down 732. On the other hand Trump did create a buying opportunity for European defense stocks and their value is still increasing.
European Defense Stocks Gain as Trump Tanks Shares of U.S. Rivals
Although that article is two days old the trend is continuing.

This is from today:
Europe can’t count on the US to be its bodyguard. That’s great for its defense companies
Europe’s new vulnerability has been a boon to its defense companies.
The STOXX Europe Total Market Aerospace & Defense index soared to an all-time high Tuesday, falling back slightly since then. So far this year, the index — which tracks Europe’s leading defense and aerospace companies — has gained 14%. And compared with its value before Russia invaded Ukraine in 2022, it has surged 127%.

 

Our manufacturers are going to be thrilled with this trend.