These 3 Sectors Are About to Explode

Interest rates just hit a 22-year high. This puts a squeeze on already cash-strapped consumers. Perhaps surprisingly, this is great news for the market. Specifically, it’s great for three sectors. And the time to get positioned for this trade is right now… [mbd-thumbnail] CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »» […] You’re receiving this email as part of your subscription to Andrew Zatlin’s Moneyball Daily [Unsubscribe]( [Moneyball Daily] These 3 Sectors Are About to Explode July 28, 2023 Interest rates just hit a 22-year high. This puts a squeeze on already cash-strapped consumers. Perhaps surprisingly, this is great news for the market. Specifically, it’s great for three sectors. And the time to get positioned for this trade is right now… [CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »»]( ADVERTISEMENT "Weird" Business Could Pay 10X in 12 months… This business doesn't make any products... It doesn't ship any products. It doesn't market any products. It doesn't own any technology. It generates millions of dollars of profit every year... with less than 100 employees... And even more amazing, it could soon pay off 10x over the next 12 months... To see how this works, [you must go here BEFORE midnight tonight](. For a transcript of this video, see below. This transcript has been lightly edited for length and clarity. These 3 Sectors Are About to Explode On Wednesday, the Fed raised rates another 25 basis points. The fed funds rate is now 5.25% to 5.5%. Just two years ago, it was 0%. What does this mean for the economy and stock market? It means good news! In fact, when I saw this rate hike, I started licking my chops. Let me explain… Boom Times Are Over To kick things off here, let’s look at recent earnings reports. Reports are coming in from Texas Instruments, Robert Half, everyone — and they're uniformly saying the same thing: the boom times are over. We’re reverting now to a normal level of growth, a slower level of growth. So all these companies need to right-size their staffing and inventory levels. This is exactly what the Fed was trying to achieve when it started raising interest rates. When you think about the world in 2021, 2022, inflation was a runaway train. It was about to go off the rails. But now the economy’s slowed to almost no growth — but it hasn't collapsed. How did higher rates translate into slower growth? Well, when borrowing costs go up, affordability goes down. And that slows down demand. Think of it this way. Two years ago, if you wanted to buy a house for $400,000, you'd spend $1,800 a month on a mortgage. Fast-forward to today — same house, same $400,000 price. But now the mortgage is going to cost you $2,800. That's a thousand bucks a month more. And because of that, a lot of people are thinking twice before buying a home. Then look at credit cards. It’s the same thing. It's harder to load up your credit cards now because the cost of borrowing is so much higher. As a result, credit card debt has flattened. Look, this is exactly what the Fed wanted. It's already brought the economy down to earth, and now it's going to bring it down even more. So, why am I so excited about this? Look What’s on the Horizon! Simple: I'm looking past what's going on today. Instead, I’m focusing on what comes next. As the economy slows even more, and as inflation eases, it’s clear that rate hikes have peaked. This week’s hike was either the last one, or the second to last. Doesn't matter which. What matters is the next stage. And that's rate cutting. See, if raising rates is the equivalent of hitting the brakes on the economy, cutting rates is the equivalent of hitting the gas. And the clock just started on when that's going happen. It’ll take about six months for this week’s rate hike to take effect and slow this economy down even more. That means, over the next six months, the Fed's focus is going to change entirely. At this point, the Fed has inflation more or less under control. But now the economy is slipping. So now the Fed has to worry about keeping the economy afloat. So, we’re going to see a worsening economy over the next six months. That’s in the bag. But this means the Fed has to start thinking about rate cuts. Rate cuts are almost certainly going to happen early next year. Then, factor in what I shared with you earlier: companies have gotten lean. And when you take a lean economy and you goose it with lower interest rates, that's highly stimulative. The Trade What does all this mean for us as investors? It means you need to start looking at sectors that are sensitive to interest-rate cuts. Three sectors immediately come to mind: high tech, real estate, and manufacturing. Sectors like these are especially impacted by rate cuts. And that means their stock prices will go up fast. But there’s also another sector I’ve got my eye on — and investors in this sector haven’t even anticipated what’s going to happen with rate cuts yet. But eventually, they will. That means the time to act is now. For Moneyball Pro subscribers, I’ve got a wicked trade to play this. I believe this one’s going to yield fruit. 2024? That’ll be the year of the bull. We're in it to win it. Let's make some money, folks. FOR MONEYBALL PRO READERS ONLY > [LEARN MORE]( < In it to win it, [Andrew Zatlin] Andrew Zatlin Moneyball Economics Copyright 2023 © Moneyball Economics, All rights reserved. You signed up on []( Our mailing address is: Moneyball Economics 1125 N. Charles Street Baltimore, Maryland 21201 [Update Subscription Preferences]( | [Unsubscribe from this list]( | [Terms & Privacy]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. 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