Good morning. Stocks are in retreat this morning … nothing too severe … and most strategists are calling it “profit taking” … probably because they have nothing else to say. I mean, of course it’s profit taking … except for those who are selling at a loss. Then I guess it’s “loss taking.” What I do find more than a little interesting is an article in Bloomberg this morning that states: “every Wall Street analyst now predicts a stock rally in 2026.” Frankly, I would prefer to see a mix as the famous Warren Buffett saying quickly comes to mind as he once said, “be fearful when others are greedy, and greedy when others are fearful.” Right now, it appears everyone is greedy … maybe for good reasons … but greedy just the same. Meanwhile, a home sales number was released this morning and the National Association of Realtors reports pending home sales were quite a bit higher than consensus … and is the highest since 2021. While one article credits improved affordability … a second item, according to FactSet … points out that “respondent views of current financial conditions are negative for the first time in four years!” And all of this is with the backdrop that we may face another government shutdown in just over 4 weeks’ time. Yikes! You might see your hometown streets changing a bit as Starbucks has decided that having a store every few blocks is a bit much … admitting that they have “too many stores.” Shutting down around 400 stores is only around 1% of the number of locations they have globally … but I get the sense this is far from over and there will be more to follow. I keep in mind a report that claims the CEO brought on in late 2024 has mentioned higher costs may result in higher prices in 2026 … even as Coffee Intelligencer claims 70% of Starbucks customers say they visit less due to prices already. A second point of contention seems to be concern that the CEO signing offer of $96 million was a bit high … though now he is receiving quite a pay cut … only around $25 million a year … and, sadly, he will only be able to afford 4,166,666 venti cappuccino drinks at the Starbucks down the block from my home. That about wraps it up for today as I recently bought a pasta machine and feel in a creative mood. I actually started making different items just after Christmas … and thought what I came up with was fantastic … but my family didn’t care for what I made early today and just went out to pick up lunch … and right now I’m feeling cannelloni. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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