Readers know I’m a permabear. Maybe if things are priced right, everyone’s a buyer which makes them mispriced again. But wow- those Google earnings were Incredible. To boot, they implemented a $70 billion share buyback, a $0.20 per share per quarter dividend and for a $2 Trillion market cap company, they are trading … well, Frankly, incredibly. At ~22x forward earnings, they are amongst the cheaper of the magnificent 7 stocks and are proving, when you are the biggest game in search, it’s easy to remain the only name in advertising. The cracks in the stock market will have to wait another week.
Watch 2 Yesterday was on inflation: How’d it go? In a word, not well.
Core PCE inflation, annualized rates:
1 month: 3.9%
3 months: 4.4%
6 months: 3.0%
12 months: 2.8%
While investors cheer AI and Google and and and… the data keeps getting worse for the Fed. I maintain that there will be no rate cuts in 2024 and mortgages will hit 8%. While that won’t hurt companies Like Google (it appears), it will continue to pressure the housing market (no one is moving, so get the guest bedroom Ready for Your kids) and commercial real estate refinancing will threaten regional banks … but for real.
This weekend, we will compare Chevron and Exxon earnings to Google and see who should experience windfall profits Taxes… We will also look into Biden’s proposed 44.6% long term capital gains tax and 25% tax on unrealized gains.
It’s best not to perpetuate Newspeak terms like unrealized gains—it’s really theft. And those high capital gains taxes are confiscatory.
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