The Fast way is the SLOW way and the SLOW way is the ONLY WAY
-Steven Bartlett
In our world today, everything happens so fast. Everyone seems to be moving at a thousand miles a minute. It can put pressure on us to keep up with everyone else, to be on the same pace as everyone else. The problem is when you go fast or you rush through things, you end up overlooking important aspects. This is especially true in relationships, finances, businesses, and careers. To have something that lasts a long time, you need to take the time to go deep and build a foundation that will enable you withstand the challenges as you go higher.
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Markets
The bears once again had control of the stock market for the most part last week. Driving stocks lower and lower, but that changed on Friday when the nonfarm payroll was released (more below).
This newsletter is 1,080 words a 5 min read
Tale of the Tape
Economy
Just as the Actors and Writers Strike ended, another strike began. Kaiser Permanente hospitals are facing the strike of 75,000 employees across the country. This is the largest health care strike in US history.
🔍Details: Contract for various working positions in the hospital expired September 30th. Since the pandemic, healthcare industry has been struggled with increased labor shortages due to worker burnout. Last year, 15,000 nurses went on strike. This was only a 3 day strike and did not get the resolution they were after.
💬In Their Words: Michael Ramey, an ultrasound technician and president of the OPEIU Local 30 said, "It's distressful and frustrating that we don't have the staffing that's required to give people the quality of care that they deserve and that they need."
🥡My Takeaway: Everyone is fed up with getting the short end of the stick. Corporations have had the leverage to hold down workers’ pay while increasing profits for a long time. Now that is changing. The public is extremely supportive of unions and there is now a willingness from the government to push corporations a bit further. We are entering an era that I have never known in the working world. Where employees might get paid their worth. However, I doubt it will play out that way.
In a surprising turn of events that no one (no one being me, myself, and I plus economists) expected. Labor market added 336,000 jobs in September.
🔍Details: Wall Street analysts and economist expected only 173,000 jobs to be added in the month of September. Which would signal a cooling economy but with jobs coming in hot. It was a shock to everyone.
💬In Their Words: Robert Schein, chief investment officer at Blanke Schein Wealth Management, "Friday's jobs report suggests that the labor market remains very strong and cements the case for an additional Fed rate hike this year, and it also likely delays the pace of eventual rate cuts."
🔢By The Numbers: Hourly Wage Growth only increased 0.2% in the month
Labor Participation Rate remained 62.8%
The two highest employers for the month:
Government employed 73,000
Leisure & Hospitality employed 96,000
Pre-Strike, healthcare added 41,000
Long-term unemployed (those jobless for 27 weeks or more) held steady around 1.2 million.
🥡Takeaway: A hot job market can be a signal for higher inflation which could prompt the Federal Reserve to raise rates again. Shortly after the report was released, rates on treasuries increased to a 16 year high. As a sign of what investors believed would happen. However, this was an overreaction from investors wages did not grow much and as Robert Schein put it, "Investors will need to get used to the higher for longer narrative on interest rates given the strength of the economy."
Stats of the Week
The pieces of evidence that will be introduced during the Sam Bankman-Fried trial. This dude made Bernie Madoff look like a chump with how bad his fraud is.
Back Story: Sam Bankman-Fried, known as SBF, founded FTX a crypto exchange. He was a superstar in the world of finance. He wowed investors and became known as a wonderkid to the world. However, it turned out to be a massive Ponzi Scheme. He was using FTX customer's money to fund his risky investing platform, Alameda Research but never disclosed this to customers or investors. It was also found that he was using the funds from FTX to fund his expensive lifestyle.
This is summary doesn't even do justice of how bad the situation really is. To see exactly how this story played out, check out this Wire Article.
SBF is not the only big time case that kicked off last week. Former President Trump has been liable for real estate fraud. Inflating the value of his real estate assets to get beneficial tax treatment. The Attorney General's office of New York is seeking $250 million from former president Trump.
The average mortgage interest rate right now. This is the highest we have seen since 2000. The median home price in the year 2000 was $119,600. The median home price today is $410,200. A completely different environment.
All things being equate in 2021 a $410,000 house would have a mortgage payment of $2,234. Now that exact same house would have a mortgage payment of $3,198.
Two weeks ago, housing demand dropped to the lowest level since 1996. Unfortunately prices are not reacting to the typical supply demand curves because supply just ain't there. As people with 3% (self included) are holding onto their mortgages with python like grips.
With the Fed keep rates high for longer than most expected, it is very likely rates hit 8%. 😭😢
8
Google takes a page out of Apple’s Playbook and releases the exact same phone for 3rd year in a row.
Google released the 8th iteration of the Pixel on Wednesday. To little or actually no fan fare. The Pixel 8 costs $699 and 8 Pro costs $999. It has all the typical upgrades of screen, camera, and processor. But honestly it's all about the software that has a few cool features like removing unwanted people from pictures, and making people smile in pictures.
Yes, it's as creepy as it sounds. But it's all in an effort to get more of the smartphone market. Which is ruled by the Titanium Hands of Tim Apple and the iPhone. Google has a tiny 3% of the US smartphone market. Apple has 55%. How Apple continues to evade being sued for being a monopoly boggles my mind.
Looking Ahead
Earnings
Q3 Earnings Season kicks off with the Big Banks as always taking center stage. JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock will be reporting this week. Pepsi and Delta will also be reporting earnings.
Overall companies have been every pessimistic about their earning prospects for Q3. Of the 113 companies in the S&P 500 that gave earnings forecast for the third quarter, 74 expect profits to decline in the quarter. Not exactly what investors like to hear.
Economy
Inflation will return to your headlines on Thursday when the Consumer Price Index (CPI) is released. Gas prices has been racing higher as Saudi Arabia decided to reduce oil production and the US faced major heat waves in parts of Texas that halted oil drilling and production.
CPI is expected to have risen 0.4% last month and 3.7% from a year ago. Not great if you are the Federal Reserve who wants CPI to return to 2% but they can do nothing about gas prices and they already made homes unaffordable for everyone.
Amazon's 'Prime Big Deal Days' Event
Schedule for the 10-11. This might be a good time to get those Christmas gifts for your loved ones.
However a word of caution. JUST BECAUSE IT IS ON SALE DOES NOT MEAN YOU ARE SAVING MONEY! If you never intended to buy the item in the first place, you are not saving money.
Sports I Love
Survive
The most Dr. Jekyll and Mr. Hyde Team EVER!
There are already rumors of Erik Ten Hag, the United coach, getting fired because of how bad the team has been. At some point, we gotta learn to dance with the one who brung us. Cause this hire and fire just ain’t gonna work.
But the Brentford game was insane, even more so cause my brother and I were in attendance. The atmosphere was IMENSE!! It was a very intimate environment, nothing like the stadiums in the states. You could see everything from everywhere so well and hear basically everything. It was awesome.
United tried to ruin it but thankfully, they won the game right in the dying seconds of the game.
Extras
Netflix Another Price Increase
Netflix is rumored to be increasing prices in the coming weeks once the actors strike comes to an end. Netflix continues to flex its pricing muscle but eventually it will hit a wall. However that day is not today cause customers still have a willingness to pay for the entertainment platform.