• September 20th, 2024 | Retail Sales, Fed’s Rate Cut, S&P 500, Dividends, Rate Reductions for Refinancing, Nike Inc. (NKE), Snap Inc. (SNAP) & Lululemon Athletica Inc (LULU)

  • 2024/09/20
  • 再生時間： 56 分
  • ポッドキャスト

September 20th, 2024 | Retail Sales, Fed’s Rate Cut, S&P 500, Dividends, Rate Reductions for Refinancing, Nike Inc. (NKE), Snap Inc. (SNAP) & Lululemon Athletica Inc (LULU)

無料で聴く

ポッドキャストの詳細を見る

  • サマリー

  • Retail sales shows the consumer is still spending August retail sales were expected to decline 0.2% in the month, but the consumer was more resilient than anticipated as they actually grew 0.1% compared to the month of July. Compared to last August, retail sales were up 2.1%. Gas stations were the biggest negative in the report as lower prices for oil and gasoline lead to a 6.8% decline compared to the prior year. If this volatile category was excluded from the headline number, retail sales would have climbed by a more impressive 2.9%. Areas of strength included nonstore retailers (+7.8%), healthcare & personal care stores (+3.5%), food services & drinking places (+2.7%), and electronics & appliance stores (+1.9%). Two areas that continued to bring down retail sales were furniture & home furnishing stores (-0.7%) and building material & garden equipment & supplies dealers (-0.1%). While this report doesn’t point to a booming consumer, it definitely doesn’t show an economy that is in recession. What should investors do after the Fed’s rate cut? What should investors expect going forward when interest rates decline? Going back 50 years, when the Fed begins its interest rate cuts, 16 out of 23 times 6 months after the first cut the stock market was higher. Could this be like one of those seven times it is not higher six months from now? Investors have to realize that valuations for the market are very high and this could lead investors holding those high valuation equities to sell the news. I do believe if you were a strong investor and have watched what you have paid for the earnings and cash flow of what you have invested in, you should be OK. But if you do hold in your portfolio equities trading at 25 to 35 times forward earnings, this could be a buy the rumor, sell the news situation. At our firm, Wilsey Asset Management, I know our portfolio has an average forward P/E ratio of around 12. I believe this is a very comfortable place to be in this crazy time. I would advise you to analyze your portfolio to be sure it is not overvalued. Why you should be careful investing in the S&P 500! People continue to shift towards index investing and have a desire to invest in the S&P 500 index fund because they believe it is a good diversified investment. I continue to worry that people do not realize how risky this index has become with the overconcentration in just a few expensive stocks. The S&P 500 currently has a forward P/E of around 22-23x, which is well above the historical average of around 16-17x. The reason for this elevated figure is the outsized weight of the expensive growth stocks. If you look at the 10 largest stocks, which are Apple, Microsoft, Nvidia, Amazon, Alphabet (Google), Meta (Facebook), Berkshire Hathaway, Eli Lilly, Broadcom, and Tesla they now occupy over 35% of the entire index and their average forward P/E is lofty at nearly 40x. People believe they are getting a diversified portfolio, but Apple (6.86%), Microsoft (6.72%), and Nvidia (6.24%) all have larger weights than the entire sectors of real estate (2%), materials (2%), utilities (2%), energy (4%), and consumer staples (6%). Communication services has a weighting of 9%, but Meta and Alphabet make up a combined 43% of the Communication Services SPDR ETF. Consumer discretionary has a weighting of 10%, but Amazon and Tesla make up over 38% of the Consumer Discretionary SPDR ETF. While the performance of the S&P 500 has been great over the last decade, if the performance of these mega cap stocks turn so will the index. With these expensive valuations, I just don’t see exciting returns over the next decade. I definitely don’t believe they will even be close to what we saw over the last 10 years. Just for reference, the remaining sectors of the S&P 500 are industrials (8%), healthcare (12%), financials (13%), and technology (31%). How will dividends impact the stock market’s return? People may not realize that stock dividends historically have accounted for around 40% of the total return in the stock market. However, because of the unbalanced market over the last 10 years, dividends have accounted for just 16% of the total return. I believe over the next decade as markets adjust to more normalcy, dividends should once again play a larger role in the total return and I wouldn’t be surprised to see it return to a similar rate of around 40%. Places you can look for dividends would include real estate investment trusts, utilities, energy, along with financial stocks and healthcare. But as always, when investing, be sure to make sure the investment is not overpriced and is fundamentally strong based on the financial statements. How Much of a Rate Reduction is Needed to Refinance? With interest rates coming down, more people are starting to wonder if refinancing makes sense, but how much of an interest rate reduction do you need to be worth it? Half a percent, one percent, more? A lot of people get hung up on ...
    続きを読む 一部表示

あらすじ・解説

Retail sales shows the consumer is still spending August retail sales were expected to decline 0.2% in the month, but the consumer was more resilient than anticipated as they actually grew 0.1% compared to the month of July. Compared to last August, retail sales were up 2.1%. Gas stations were the biggest negative in the report as lower prices for oil and gasoline lead to a 6.8% decline compared to the prior year. If this volatile category was excluded from the headline number, retail sales would have climbed by a more impressive 2.9%. Areas of strength included nonstore retailers (+7.8%), healthcare & personal care stores (+3.5%), food services & drinking places (+2.7%), and electronics & appliance stores (+1.9%). Two areas that continued to bring down retail sales were furniture & home furnishing stores (-0.7%) and building material & garden equipment & supplies dealers (-0.1%). While this report doesn’t point to a booming consumer, it definitely doesn’t show an economy that is in recession. What should investors do after the Fed’s rate cut? What should investors expect going forward when interest rates decline? Going back 50 years, when the Fed begins its interest rate cuts, 16 out of 23 times 6 months after the first cut the stock market was higher. Could this be like one of those seven times it is not higher six months from now? Investors have to realize that valuations for the market are very high and this could lead investors holding those high valuation equities to sell the news. I do believe if you were a strong investor and have watched what you have paid for the earnings and cash flow of what you have invested in, you should be OK. But if you do hold in your portfolio equities trading at 25 to 35 times forward earnings, this could be a buy the rumor, sell the news situation. At our firm, Wilsey Asset Management, I know our portfolio has an average forward P/E ratio of around 12. I believe this is a very comfortable place to be in this crazy time. I would advise you to analyze your portfolio to be sure it is not overvalued. Why you should be careful investing in the S&P 500! People continue to shift towards index investing and have a desire to invest in the S&P 500 index fund because they believe it is a good diversified investment. I continue to worry that people do not realize how risky this index has become with the overconcentration in just a few expensive stocks. The S&P 500 currently has a forward P/E of around 22-23x, which is well above the historical average of around 16-17x. The reason for this elevated figure is the outsized weight of the expensive growth stocks. If you look at the 10 largest stocks, which are Apple, Microsoft, Nvidia, Amazon, Alphabet (Google), Meta (Facebook), Berkshire Hathaway, Eli Lilly, Broadcom, and Tesla they now occupy over 35% of the entire index and their average forward P/E is lofty at nearly 40x. People believe they are getting a diversified portfolio, but Apple (6.86%), Microsoft (6.72%), and Nvidia (6.24%) all have larger weights than the entire sectors of real estate (2%), materials (2%), utilities (2%), energy (4%), and consumer staples (6%). Communication services has a weighting of 9%, but Meta and Alphabet make up a combined 43% of the Communication Services SPDR ETF. Consumer discretionary has a weighting of 10%, but Amazon and Tesla make up over 38% of the Consumer Discretionary SPDR ETF. While the performance of the S&P 500 has been great over the last decade, if the performance of these mega cap stocks turn so will the index. With these expensive valuations, I just don’t see exciting returns over the next decade. I definitely don’t believe they will even be close to what we saw over the last 10 years. Just for reference, the remaining sectors of the S&P 500 are industrials (8%), healthcare (12%), financials (13%), and technology (31%). How will dividends impact the stock market’s return? People may not realize that stock dividends historically have accounted for around 40% of the total return in the stock market. However, because of the unbalanced market over the last 10 years, dividends have accounted for just 16% of the total return. I believe over the next decade as markets adjust to more normalcy, dividends should once again play a larger role in the total return and I wouldn’t be surprised to see it return to a similar rate of around 40%. Places you can look for dividends would include real estate investment trusts, utilities, energy, along with financial stocks and healthcare. But as always, when investing, be sure to make sure the investment is not overpriced and is fundamentally strong based on the financial statements. How Much of a Rate Reduction is Needed to Refinance? With interest rates coming down, more people are starting to wonder if refinancing makes sense, but how much of an interest rate reduction do you need to be worth it? Half a percent, one percent, more? A lot of people get hung up on ...
続きを読む 一部表示

September 20th, 2024 | Retail Sales, Fed’s Rate Cut, S&P 500, Dividends, Rate Reductions for Refinancing, Nike Inc. (NKE), Snap Inc. (SNAP) & Lululemon Athletica Inc (LULU)に寄せられたリスナーの声

カスタマーレビュー：以下のタブを選択することで、他のサイトのレビューをご覧になれます。

Audible.co.jp

Amazon.co.jp
レビューはまだありません。