What are we likely to see over the next 6-months?

What is your prediction?

End of Fed rate hikes. Yield curve fading lower than today by year-end, even with no rate cuts before then and likely another 25-50bp of increases. So short duration underperform most other fixed income.

Major foreign central banks increasing rates more than the Fed through year end, compressing yield differentials. Barring major geo-political shock, this will lead to additional dollar weakening, a tail-wind for international equities for US investors. With international valuations lowish relative to its history and low relative to typical vs. US, coupled with very attractive foreign equity yields, a currency tail-wind will likely have international continuing the post 9/30 rally over US equities.

We will start to see workers migrating industries at a higher degree than today helping with job openings vs seeker imbalance. Also will see bankruptcies, auto repos, etc.. pick up for the low 10% that never had money and kept the Covid stimulus party going with credit. I don't think this will be the cause of recession, instead be isolated to the very irresponsible.

I think we'll see market volatility pick back up as we have more conflicting economic data than we do today, a likely change in the tide of the Fed, and election cycle rhetoric picking up. With more volatility, seems wise to be bolstering cash for expected spend.

No view on cap rates and mortgage rates over that time that isn't really just a hopeful one…

I've always paid close attention to the first news cycle coming out of July 4th weekend.

Like a poker tell.

Whatever is about to happen, you'll see the first glimmers of it develop coming out of July 4th weekend.

Stat Monitor Repairman said:

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What are we likely to see over the next 6-months?

What is your prediction?

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Pain is coming for commercial real estate. Just need to follow the bread crumbs…

Office is a slowly imploding time bomb. Several notable operators are defaulting/missing payments and only time will start the for closing process (which lenders absolutely are not fond of taking them back). I'll put it this way - the common joke among non-office guys are "how are things going?" Answering with a "well at least we aren't in the office space right…."

Retail and other forms are struggling with valuation issues. Not worried about major power centers but the retail strip centers. They have some time until their notes balloon.

Multifamily is struggling with cap rates increasing. More deal flow seems to be happening but there is a huge disconnect between the values/cap rates on refinances and acquisitions of the same properties. Not to mention incredible headaches with taxes and insurance.

Residential is relatively insulated for now unless there is a huge uptick in layoffs and job loss. People are regrettably executing deals with 6-7% interest rates but those with the 3%s are not selling unless 100% needed.

This is based on absolutely nothing, but I feel like we will close the year below where we are now. We've been in one of those markets for the last few months that no level of bad news or rough predictions can slow down. I just think those tides will turn at some point this year and things will be the exact opposite. Doom and gloom will overtake.

Gut feeling is that the economy is not free floating.

The numbers we see day to day have been massaged so much to the point where they are meaningless.

We are adrift on open ocean. The only means of navigation is by dead reckoning.

The sextant has been dropped so may times it's unreliable.

So yeah, we know what the numbers say. But what the numbers say, and what we see day-to day are two different things.

How long before we see a social media kill switch in the US?

hypeiv said:

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I think we finish the year up about 5% from where we are today because I love America and never bet against the market

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8% from today

4000.

permabull said:

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I think we finish the year up about 5% from where we are today because I love America and never bet against the market

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We are +5% from when I made this post. Hopefully we can hold this level for the rest of the year

Actually I think the next few weeks of earnings announcements are going to set the tone for the rest of the year. So in a few weeks we'll know.

How are we looking now?

Two months farther along.

What's happened over the past months that's different from what you expected?

I never weighed in so everything has gone as I expected it to.

Seriously, nothing has really changed from what I thought at mid-year. Most of the experts seem to think things are going to slow down by end of year and into next year but that we will avoid a recession (never mind we already had one).

We've seen this commercial real estate issue trickle along.

Interest rates bumped up.

Hearing that consumer spending is down in anticipation of student loan restart on Oct 1st but don't know how accurate that is. Hearing that AirB&B bookings have fallen off.

We saw 2-4 of the biggest bank failures of all time earlier this year but nothing major since.

By all accounts insurance premiums up across the board.

Gas is up over the past couple months.

Stat Monitor Repairman said:

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We've seen this commercial real estate issue trickle along.

Interest rates bumped up.

Hearing that consumer spending is down in anticipation of student loan restart on Oct 1st but don't know how accurate that is. Hearing that AirB&B bookings have fallen off.

We saw 2-4 of the biggest bank failures of all time earlier this year but nothing major since.

By all accounts insurance premiums up across the board.

Gas is up over the past couple months.

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food is up a lot

Probably good for your McDonald's and Taco Bell cheap calorie stores.

I don't have a mid year prediction but can guess as a multi year projection.

Inflation is going to be stubborn at 3.5-4% for years. Equities / stock are mostly anxious as they fight safe returns of 4%+.

DOW is still -6% vs 2 years ago. Long term performance for all indexes suggests we will see very moderate growth for many years. Less than 7% averages.

The overall economy is heavily propped up by government spending which cannot be infinite and at some point returns down to earth.

The big short movie made being a bear cool...

It's not a winning strategy

I think labor unrest, UAW strike, will be a big drag on the economy. With a big part of that from the media push on the topic.

That along with a restart on student loan payments, will hammer consumer confidence and sentiment.

Other drags on the market will be underwhelming iphone sales, which will drag down Apple and as a result the S&P500.

I think the markets drop 5-10% from here to year end.

chris1515 said:

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I think labor unrest, UAW strike, will be a big drag on the economy. With a big part of that from the media push on the topic.

That along with a restart on student loan payments, will hammer consumer confidence and sentiment.

Other drags on the market will be underwhelming iphone sales, which will drag down Apple and as a result the S&P500.

I think the markets drop 5-10% from here to year end.

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I just wonder if there is some new wonder tech in the HW space for mobile phones. The current form factor is maxed. There is nothing else to do with it without some major innovation and I don't know what that is. There is zero reason to upgrade an iPhone at this point as long as your HW will support the latest SW and even then that's debatable. I still have an XR and it's supported through the next SW release (iOS 17) so no reason to spend $1K on a new phone just to have a new phone.

The only HW innovations I've seen are the Samsung(?) flip phone and all that it is a retro callback. And then you have 2-3 small time phone makers who are actually going back in time and making phones with no internet connectivity.

Anyway, I agree with you and wonder what Apple is doing, if anything, to innovate their phone or diversify their products.

YouBet said:

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chris1515 said:

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I think labor unrest, UAW strike, will be a big drag on the economy. With a big part of that from the media push on the topic.

That along with a restart on student loan payments, will hammer consumer confidence and sentiment.

Other drags on the market will be underwhelming iphone sales, which will drag down Apple and as a result the S&P500.

I think the markets drop 5-10% from here to year end.

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I just wonder if there is some new wonder tech in the HW space for mobile phones. The current form factor is maxed. There is nothing else to do with it without some major innovation and I don't know what that is. There is zero reason to upgrade an iPhone at this point as long as your HW will support the latest SW and even then that's debatable. I still have an XR and it's supported through the next SW release (iOS 17) so no reason to spend $1K on a new phone just to have a new phone.

The only HW innovations I've seen are the Samsung(?) flip phone and all that it is a retro callback. And then you have 2-3 small time phone makers who are actually going back in time and making phones with no internet connectivity.

Anyway, I agree with you and wonder what Apple is doing, if anything, to innovate their phone or diversify their products.

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Eventually iOS, as you mentioned, will require upgrades every 5-6 years.

And most people want to have the newer features even if they seem small: 120hz display, always-on-display mode, dynamic island, usb-c, wide location chip tech.

There are always smaller things going on that...probably most people won't appreciate on their own. But they add up over 3-4 years.

I said this in an other thread: we are at the point where a phone is like your f150 or accord. What is coming out next that is a must have reason to upgrade? Probably nothing groundbreaking these days.

evan_aggie said:

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YouBet said:

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chris1515 said:

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I think labor unrest, UAW strike, will be a big drag on the economy. With a big part of that from the media push on the topic.

That along with a restart on student loan payments, will hammer consumer confidence and sentiment.

Other drags on the market will be underwhelming iphone sales, which will drag down Apple and as a result the S&P500.

I think the markets drop 5-10% from here to year end.

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I just wonder if there is some new wonder tech in the HW space for mobile phones. The current form factor is maxed. There is nothing else to do with it without some major innovation and I don't know what that is. There is zero reason to upgrade an iPhone at this point as long as your HW will support the latest SW and even then that's debatable. I still have an XR and it's supported through the next SW release (iOS 17) so no reason to spend $1K on a new phone just to have a new phone.

The only HW innovations I've seen are the Samsung(?) flip phone and all that it is a retro callback. And then you have 2-3 small time phone makers who are actually going back in time and making phones with no internet connectivity.

Anyway, I agree with you and wonder what Apple is doing, if anything, to innovate their phone or diversify their products.

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Eventually iOS, as you mentioned, will require upgrades every 5-6 years.

And most people want to have the newer features even if they seem small: 120hz display, always-on-display mode, dynamic island, usb-c, wide location chip tech.

There are always smaller things going on that...probably most people won't appreciate on their own. But they add up over 3-4 years.

I said this in an other thread: we are at the point where a phone is like your f150 or accord. What is coming out next that is a must have reason to upgrade? Probably nothing groundbreaking these days.

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Yes, but I think those HW changes are about maxed. There is only so much you can do with the current form factor. The only reason I want to upgrade at this point is to standardize to USB-C. Dynamic Island is gimmick and proof they are running out of ideas. I don't blame them for that; they've hit the limit of this form's capabilities.

Just interested in what's next. Now that we are getting ok with a 1984 police state I expect a Google Glass type product to be reintroduced and next time it will probably be accepted.

Dynamic island is a gimmick in the sense that it was to partially "hide" the sensors but I actually find it quite useful for short cut switching to Spotify or my turn by turn directions.

Google glass isn't going anywhere. The issue with new technology like this is that it truly requires an existing eco system that isn't fragmented or disjointed in existence.

Pixel phones are a tiny fragment of Android bs Samsung.

Things like satellite SOS work when one manufacturer, one software stack, readies everything for 50M+ people.

Microsoft Hololens and Google glass will fail like they always have for the last decade because the technology is barely there.


Even Apple is going to struggle imo, but they have the most chance of success because the entire experience can be integrated across devices and software.

Stat Monitor Repairman said:

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We saw 2-4 of the biggest bank failures of all time earlier this year but nothing major since.

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In nominal terms or as a % of total bank assets? I'm guessing the former.

In any case, the BTFP was put into place and usage has been up since. This has papered over a LOT of stress in the banking system. When these loans come due starting next March - will the Fed re-up the program for another year (essentially creating another QE program) or will they call the loans? Remember this program was set up to lend at par value and take collateral at market value. Market value for all of these securities is less today than it was in March and will probably be lower next March than it is today. These banks will have no way to pay these loans. If the BTFP is not renewed, you'll have MANY more outright failures.

If it is renewed, can we really say the banks have been in good shape when they need continuous QE to stay alive?

Agreed on this. No reason to upgrade iPhones anymore but for the novelty of having the latest which has worn off. Last couple phones went with a couple models down just to hedge some of the risk of walking around with a brand new $1000 device. Theres been no real increase in functionality that I can tell.

Might get 3+ years out of an iPhone.

Laptops 7-8 years.

iPads also last a long time. Maybe 4-5 years.

Typically break the device or the battery is unsustainable before apple devices go tits up.

Apple Vision Pro may or may not take off, so thats yet to be seen.

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Pain is coming for commercial real estate.

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Reading more and more bad news about commercial office space.

Government taxpayer money now being spent to subsidize conversion office space to residential.

How are these empty Class A office buildings financed?

What happens when the property as an enterprise is non-viable?

What happens if the bottom falls out?

Whoever is holding a giant amount of cash will step in to buy at a discount.

A bunch of defaults will trickle through the banking, finance and insurance markets 2008 style.

We might be looking at some sort of recokning in the near future.

But maybe not.