Stock Discussions 2024

[Konebhar6]

Sector Outlook -> Energy 

• Summary
  • Crude Oil seem to have hit the year lows at $69.
  • Support -> Between $60-69 for crude oil
  • Why Crude is down -> OPEC production increase, weak demand from China, Recession fears.
  • Why optimism -> Too much tensions between countries. War could break anytime.
• Stocks making 52 Week lows in the below industries in ENERGY sector.
  • Oil & Gas Drilling
  • Oil & Gas E&P
  • Oil & Gas Equipment & Services
  • Oil & Gas Integrated
  • Oil & Gas Refining & Marketing
• Investment Strategy 
  • Most Energy stocks pay good dividend. 
  • Growth + Div stocks - CVX, OXY, XOM, COP, EOG, SLB, MPC, ET, 
  • ETFs ->
    • XOP (PE 4.39, Yield 2.29%)
    • IXC (PE 7.32, Div Yield 3.64%)
    • VDE (PE 7.7, Div Yield 2.93%)
    • AMLP (PE 13.11, Div Yield 7.34%)
    • XLE (PE 8.06, Yield 3.14%)
    • XES (PE 18.88, Yield 0.81%)
  • 401k - Move money into Energy funds if your broker offers them.

Caution -> Prices could still fall further if there is a recession. A Dollar cost average strategy is best.

[Konebhar6]

Pick and choose your poison. Good luck to all and I hope you make some money out of it. Go long term strategy. At least 2 yrs for good returns.

[cool_boy]

Sept sell off untadi gani mari e range lona 

Recession ani fix ayipoyara 

[Sreeven]

2 hours ago, cool_boy said:

Sept sell off untadi gani mari e range lona 

Recession ani fix ayipoyara 

Rate cut preparation 

[ChillDude]

3 hours ago, Sreeven said:

Rate cut preparation 

I read stocks never pumped after 1st rate cut (after rates have been  increased first) for atleast an year

[csrcsr]

Nee yavva tesla ni 8% monna ninna leparu e roju tiseskunaru

Payment stock , chipstock anni padesaru

[Sreeven]

1 hour ago, ChillDude said:

I read stocks never pumped after 1st rate cut (after rates have been  increased first) for atleast an year

Yes adi common..kani ippudu market antha reverse lo potundi

[Konebhar6]

2 hours ago, ChillDude said:

I read stocks never pumped after 1st rate cut (after rates have been  increased first) for atleast an year

You are right. Most probably stocks will fall. The housing situation also looks similar. 

Only difference is that Financial institutions fell and caused a lot of banks to close shop ... 

In 2020 we saw Oil stocks hit rock bottom ... Lets see what sector hits rock bottom this time ..

[quickgun_murugun]

1 hour ago, Konebhar6 said:

You are right. Most probably stocks will fall. The housing situation also looks similar. 

Only difference is that Financial institutions fell and caused a lot of banks to close shop ... 

In 2020 we saw Oil stocks hit rock bottom ... Lets see what sector hits rock bottom this time ..

Ee sari Semi conductors and chips scam gattiga nadustundi… 

 

[Konebhar6]

4 minutes ago, quickgun_murugun said:

Ee sari Semi conductors and chips scam gattiga nadustundi… 

 

Chips only some companies are affected. But not a huge impact on the economy. I think Chip companies will correct, same with Server companies and data centers. 

In previous years - Banks had to write off a lot of money due to foreclosure. Liquidity issues and bank closure. 

2020 - Oil had a broader impact on all industries.

[Konebhar6]

What is the Yield Curve 
It plots the yields of bonds with different maturity periods (3-mo, 2-yr, 5-yr, 10-yr, 30-yr, etc.). The slope of the curve predicts whether interest rates will remain flat/cut or increase and gives good clarity on economic conditions.

There are 3 types of Yield curves - Normal, Inverted, and Flat.

Normal Yield Curve (upward-sloping)
Short-term interest rates < Long-term rates
E.g. 2-yr bond gives 1% and a 10-yr bond gives 2.75%

It indicates an expanding economy -> WHY -> Long-term yields are higher because of less demand. People/businesses are getting better returns on their investments by borrowing money from banks at lower interest rates for their businesses than long-term bonds. If yields are higher it means Bond prices are lower.

What To-Do -> Invest in stocks esp. growth stocks. 

What Not To-D0 -> Do not buy Bonds during this time. 

 

Inverted yield Curve (downward-sloping)
Short-term Interest rates > Long-term rates
E.g. 2-yr bond gives 3% and a 10-yr bond gives 2.25%

It indicates an economic recession -> WHY -> Long-term yields are lower because there is too much demand to buy them. People/businesses do not want to borrow money from banks at higher interest rates and don't want to risk investments. If yields are lower it means Bond prices go higher. Buy Bonds during this time. 

What To-Do ->Buy bonds, gold, annuities, and fixed-income investments. Buy dividend-yielding stocks and stocks in defensive sectors (Healthcare, Consumer Staples, Utilities, Low price Retailers like TJMaxx, Dollar Tree, Burlington, etc.). Move 401k cash funds into bonds. Cash is king. Markets will make newer lows. 

Defensive sectors will do well-

What Not To-D0 -> Avoid Growth stocks. 

An Inverted yield curve is very rare. It's a warning of recession. Hence the focus on it. They are putting the pressure on Fed to reduce interest rates by 50 basis points to avoid recession.

 

Flat

Short-term interest rates = long-term rates
Implies uncertainty in the economy.
E.g. 2-yr bond gives 3% and a 10-yr bond gives 3.05%

[Konebhar6]

Everyone who is investing in stock markets, please read above. Its very important to understand macro economics to understand where the stock market is going.

I tried to make it as easy as possible to understand this. 

[krishnaaa]

On 9/6/2024 at 3:43 PM, ChillDude said:

I read stocks never pumped after 1st rate cut (after rates have been  increased first) for atleast an year

You will have to check the underlying reason. Blind rules don't workout if it isn't accompanied by reseach on current situation.

First rate cut happened historically when something breaks like te housing market in 2008, dotcom bubble in 2000 etc.

This time nothing is broken in the economy...its just return to the normalization. Economy is little soft and Fed has to cut.

Now if the Fed is too late and something breaks then that rule applies. Hope that answers the question

[argadorn]

9 hours ago, Konebhar6 said:

What is the Yield Curve 
It plots the yields of bonds with different maturity periods (3-mo, 2-yr, 5-yr, 10-yr, 30-yr, etc.). The slope of the curve predicts whether interest rates will remain flat/cut or increase and gives good clarity on economic conditions.

There are 3 types of Yield curves - Normal, Inverted, and Flat.

Normal Yield Curve (upward-sloping)
Short-term interest rates < Long-term rates
E.g. 2-yr bond gives 1% and a 10-yr bond gives 2.75%

It indicates an expanding economy -> WHY -> Long-term yields are higher because of less demand. People/businesses are getting better returns on their investments by borrowing money from banks at lower interest rates for their businesses than long-term bonds. If yields are higher it means Bond prices are lower.

What To-Do -> Invest in stocks esp. growth stocks. 

What Not To-D0 -> Do not buy Bonds during this time. 

 

Inverted yield Curve (downward-sloping)
Short-term Interest rates > Long-term rates
E.g. 2-yr bond gives 3% and a 10-yr bond gives 2.25%

It indicates an economic recession -> WHY -> Long-term yields are lower because there is too much demand to buy them. People/businesses do not want to borrow money from banks at higher interest rates and don't want to risk investments. If yields are lower it means Bond prices go higher. Buy Bonds during this time. 

What To-Do ->Buy bonds, gold, annuities, and fixed-income investments. Buy dividend-yielding stocks and stocks in defensive sectors (Healthcare, Consumer Staples, Utilities, Low price Retailers like TJMaxx, Dollar Tree, Burlington, etc.). Move 401k cash funds into bonds. Cash is king. Markets will make newer lows. 

Defensive sectors will do well-

What Not To-D0 -> Avoid Growth stocks. 

An Inverted yield curve is very rare. It's a warning of recession. Hence the focus on it. They are putting the pressure on Fed to reduce interest rates by 50 basis points to avoid recession.

 

Flat

Short-term interest rates = long-term rates
Implies uncertainty in the economy.
E.g. 2-yr bond gives 3% and a 10-yr bond gives 3.05%

What are the safest bonds 

[Konebhar6]

1 hour ago, argadorn said:

What are the safest bonds 

Use Yahoo Screener. 

https://finance.yahoo.com/screener/predefined/high_yield_bond/