WASHINGTON – Yeah, let me repeat that headline. Investing in US stocks this week feels like getting a root canal. Which I actually got this week due to a tooth that partially split off. The usual pain and suffering due to that unhappy accident was actually worse than the cure, which I got in the dentist’s chair Wednesday. All of which explains my lack of columns this week. But then again, what do you write about when your portfolio of largely US stocks feels as bad or worse than getting a root canal?
Sure, the market keeps making tantalizing new highs again and again. Before taking them back the next day. The new highs are nice… IF you’re in the right stocks, a category that seems to change nearly every day. If you’re not, which most of us aren’t, your investments slide.
Take Amazon.com, for instance. Please!
Like Amazon.com (trading symbol: AMZN), which I’m currently in the middle of unloading. At least partially. It seemed like a good buy a few weeks ago. And probably was. The problem is, every day this week, it’s been an even better buy. It’s like getting a root canal. Three times over. Every single day. So out it goes save for a token position, just in case. A classic example of the fun involved investing in US stocks in November of 2019.
Amazon is probably in for a poor quarter or two due to another short-term profit-stifling series of investments in even more technologies that promise to destroy even more of AMZN’s retail competition. But the average investor’s mood these days is “What have you done for me lately?” And for those holding AMZN shares, the answer in November at least, has been, “Not bloody much.”
At some point, Amazon’s shares will recover and march ever upwards into stratospheric new per share record prices. But for now, owning AMZN sucks, so I’m mostly out. That said, I made good money on these shares not once but twice this year. So perhaps I shouldn’t have tempted fate by trying for a year-end hat trick.
Amazon’s nasty, two-headed dragon attacks shares of this retail giant. And all of retail as well
Also damaging Amazon’s is a two-headed dragon far more worrisome than a poor quarter or two due to a heavy tranche of R&D.
First, the retail sector is experiencing a nasty bloodletting this fall. As newspapers and other media continue to trumpet an impending recession that’s simply not happening (in order to damage President Trump), fearful consumers are holding off on retail purchases. That, according to the latest quarterly reporting figures from that industry, continues to hit retail stocks. Those Q4 reports caused investors in the shares of Dow giant Home Depot (HD) and the generally well-regarded Kohl’s (KSS), for example, to administer a metaphorical root canal (and maybe an extraction) to each.
Target (TGT) is flying high in retail. But HD, KSS and many others ain’t, as all this ongoing media bad-mouthing continues to take its toll. Come Thanksgiving, we’ll see if Santa himself can’t turn retail right around. But right now, it’s death in this sector. And that’s at least in part what’s dragging Amazon down, even though it’s building strength in a number of other sectors as well.
But second, and perhaps more ominous than the anti-Trump recession mongering by the media is the absolutely manic-depressive nonsense going on in the crucial US-China trade negotiations. Part of which actually ties into reason Number 1. All this nonsense has that familiar root canal feeling.
I’m beginning to think that the Chinese are now convinced that the impeachment sham now ongoing on Capitol Hill – instead of the nation’s important business, BTW – has weakened President Trump’s negotiating position to the point where he’s likely to capitulate on his key points in order to win next year’s election. Which they now don’t think he’ll win anyway. Because Rachel Maddow says so.
Investors are getting torqued off at Congress and China. And maybe President Trump, too
All this is pissing off investors, who, like me, have better things to do than hawkeye an erratic market that doesn’t merit this. So investors are just bailing, going into cash (or bonds, yet again). Thus, the market may be topping, and, ultimately, crusin’ for a bruisin’. And right when we were expecting a healthy Santa Claus Rally. Unfortunately, investing in US stocks has become the unfun thing to do this month, unless you like gambling a lot.
Then, there’s the Federal Reserve…
Meanwhile, the #resistant and inscrutable Federal Reserve is doing its best not to help Trump hold out against the Chi-coms by shillyshallying around Fed policy, re: the next interest rate cut. If any, according to continuously revised reports from CNBC.
“Federal Reserve officials generally agreed that they likely won’t need to cut interest rates again unless economic conditions change significantly, according to minutes released Wednesday from their most recent meeting.
“Central bankers in late October cut their benchmark overnight lending rate a quarter-point to a range of 1.5%-1.75%, the third such move in 2019.
“However, in doing so ‘most’ Federal Open Market Committee members saw the moves as enough ‘to support the outlook of moderate growth, a strong labor market, and inflation near the Committee’s symmetric 2 percent objective,’ the meeting summary stated…
“Chairman Jerome Powell, in congressional testimony last week, said he also felt comfortable with the stance of policy. That includes the low probability of a rate hike as well: Following the Oct. 29-30 FOMC meeting, he further stated that he doesn’t expect increases unless there is a significant move up in inflation.
“Discussions at the meeting indicated that members feel the U.S. economy is in fairly strong position, with a healthy labor market and strong spending appetite among consumers, whose activity accounts for about 70% of GDP.”
Congress and the Fed don’t seem to like us if we work at investing in US stocks
That’s all fine and good. But the US economy won’t remain in a fairly strong position if all the #NeverTrumpers in Congress and the media don’t put a swift end to their scorched-earth impeachment politics. If they don’t, Americans, their jobs and their bank accounts will get whacked yet again. The Deep State will triumph once again, as they did in 2008 and 2012. And we’ll all be right back in the recessionary soup yet again. Blaming President Trump and the Republicans in the process.
I’m getting really tired of living in the nation’s capital region. If average American voters could really see what’s going on here, they’d descend on Washington en masse. At which point they’d soon make Great Britain’s burning of our capital city in 1812 look like the proverbial Sunday School Picnic.
Meanwhile, we’ll see what happens this afternoon on Wall Street – which is currently negative again as of roughly 3 p.m. ET. Another root canal? Who knows? We certainly live in confusing times. Times that make it frustrating indeed to be investing in US stocks.
Hey, maybe there’s an algorithm for that.
– Headline image: A diagram demonstrating endodontic therapy (colloquially known as a root canal) on unhealthy or injured tooth: first drilling and cleaning, then filing with an endofile, and finally adding the rubber filling and crown. Via Wikipedia entry on the topic, GNU 1.2 license.