The Latest on Our $26 Trillion Quilt

GDP just grew... The economy is not crashing... So what's the Federal Reserve to do now?... The latest on our $26 trillion quilt... Handicapping next week's Fed meeting... Don't miss Steve's big event... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] GDP just grew... The economy is not crashing... So what's the Federal Reserve to do now?... The latest on our $26 trillion quilt... Handicapping next week's Fed meeting... Don't miss Steve's big event... --------------------------------------------------------------- The economy is still growing... That's according to the folks at the U.S. Department of Commerce. Today, they reported that fourth-quarter gross domestic product ("GDP") grew at a 2.9% annualized rate from October to December 2022. That was slightly lower than the 3.2% rate from the third quarter, but slightly above some Wall Street expectations. All in all, the economy is not crashing. And as we've reported, the pace of inflation is coming down. These are good things... After the overstimulated economic periods of late 2020 and all of 2021 (when there was a 5.9% jump in GDP), [growth is slowing]( – and inflation is, too. But it's not to the point where industries have ground to a halt or a bad economy has put hundreds of thousands of people out of work. Certain businesses are making moves to keep margins up, like laying off workers... We've seen this from leading companies in the tech sector. But on balance, the jobs market is still "tight" with weekly jobless claims also checking in today at their lowest reading since April. Things are OK – for now... The timing here is also important... This GDP number (plus the latest jobs data and the inflation numbers to come tomorrow) arrives just a few days before the Federal Reserve heads into its two-day policy meeting next week... Next Wednesday, we'll learn the central bank's decision on interest rates and other economy-manipulating maneuvers, plus its thoughts on future decisions. All of these tend to influence stock prices. Bond traders are betting with near certainty on a 25-basis-point hike from the Fed next week, which would take the federal-funds rate to a range of 4.5% to 4.75%... That's one or two raises away from their current projected terminal rate just north of 5%. That means anything else would be a market-moving surprise. If the Fed doesn't raise rates at all, it could push markets higher. Meanwhile, a higher hike or some confusing comment or surprise from Fed Chair Jerome Powell in his post-announcement press conference could send stocks tumbling. An expensive needle and thread... The big question when it comes to the Fed is not what it will do at this meeting... Officials have been telegraphing a 0.25% hike in rates. The market wants to know what the Fed thinks about the economy right now and whether it will keep raising rates as it has done for almost a year now... Practically, Fed officials will (hopefully) be weighing the benefits and risks of higher-rate policies – and what more "expensive" dollars and a year of interest-rate hikes will do to the economy in the future. They can't know for sure, though, of course... A relatively solid GDP doesn't give the Fed any new reasons to change its plans. These revolve around getting its benchmark lending rate to a "sufficiently restrictive" level – currently projected near 5% – and hold it there to see what happens with inflation. At the same time, though, certain areas of the economy are already seeing deflation... So, as we've said before, the Fed is threading an interest-rate-policy needle. And it has to manage this delicate needlework in a critically important point of a roughly $26 trillion quilt that is the complex U.S. economy, the largest in the world. Ho-hum. Typically, a GDP rise of around 2% or 3% per year would sit all right. But inflation is still well above "normal" levels: at 6.5%, according to the latest consumer price index ("CPI") figures. So the central bank has said it will do what it can to cool price increases to a point where inflation doesn't run near 40-year highs anymore... And that's to piledrive demand most directly in real estate and other rate-sensitive lines of business. Sounds too simple. What will they do?... My bet's on the Fed going with a 25-basis-point hike and Powell signaling "we're not done fighting inflation yet," with at least one more hike to come in March. Admittedly, this is probably the consensus view, and there's always a chance we hear something different. Stansberry Research senior analyst Matt McCall got into this point on the most recent episode of his Making Money podcast (our featured video of the day below). First, he said he thinks inflation is going to come down "dramatically" to around 5% in the next few months, as measured by the CPI, and 2% or 3% by midyear. The Fed should be happy about that. But as Matt said... I think if they do their job correctly, they do 25 in February and 25 in March and stop... The fear is the Fed really effs up and they continue to raise rates because they continue to drive the car looking in the rearview mirror... And they raise rates too much and it puts us into more of a mild-to-moderate recession, as opposed to a mild one. That's the downside risk. At this point, you really have to watch the Fed, and that's going to drive this market. But if I'm wrong and the Fed actually does what they're supposed to do, this market's set to take off. So we will watch next week and report to you on the Fed's latest decision, how the market reacted, and what that may mean for your investments next Wednesday. One quick, related programming note... This is partially why we're getting into the Fed-watching today... Next week, on Monday and Tuesday, you'll hear from our colleague Brett Eversole in a pair of special Digest guest essays he's putting together in advance of longtime True Wealth editor [Dr. Steve Sjuggerud's big event]( at 8 p.m. Eastern time on Tuesday, January 31. Stay tuned for those after Dan's regular Friday missive and our weekend Masters Series essays. And if you haven't yet heard about or signed up for Steve's event yet, what are you waiting for? Steve's take on the state of the markets... Steve is breaking his nearly two-year silence to bring subscribers an important update on the markets... why there could be a historic "reset" for stocks only weeks from now... and his advice for positioning your portfolio before it happens... The event is totally free to attend. We just ask that you sign up in advance so you don't miss a minute. Steve has a lot lined up to talk about, including two free recommendations – one name to buy today and one popular stock to dump immediately – for everyone who tunes in. Don't miss it, and [sign up here](. (And Stansberry Alliance members, you of course already have access to Steve's work and will have access to any new research he and his team publish. But we think you'll enjoy his video event as well.) The Fed: Friend or Foe? In the latest episode of Making Money With Matt McCall, Matt takes a look at the recent rise in the S&P 500 and notes there's only one thing he believes could end recent bullish trends. That's the Federal Reserve... [Click here]( to watch this episode of Making Money With Matt McCall right now. And to catch all of the podcasts and videos from the Stansberry Research team, be sure to [visit our Stansberry Investor platform]( anytime. --------------------------------------------------------------- Recommended Links: ['This Popular Stock Is a Ticking Time Bomb']( On January 31, Dr. Steve Sjuggerud will break his two-year silence and come forward with a HUGE announcement. You can't afford to miss this. [Sign up for free here (bonus FREE trade recommendation included)](. --------------------------------------------------------------- [THIS WILL DEFINE MY LEGACY]( To ring in the new year, Dr. David Eifrig is reopening his original briefing on his No. 1 biggest discovery in 15 years (and more than four decades in the markets). He has already shown readers big double-digit gains since last July... even while the broader markets suffered. But see why 2023 could be the best year yet for this strategy, [right here](. --------------------------------------------------------------- New 52-week highs (as of 1/25/23): Aehr Test Systems (AEHR), Alamos Gold (AGI), Arafura Rare Earths (ARAFF), iShares MSCI Mexico Fund (EWW), Hologic (HOLX), inTEST (INTT), iShares 0-3 Month Treasury Bond Fund (SGOV), and Torex Gold Resources (TORXF). In today's mailbag, thoughts on [yesterday's Digest]( about negative market sentiment being a potential buy signal... and continued discussion on the state of the U.S. influence... What do you think? Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "I am a great believer in the use of sentiment charts and subsequent actual returns after substantial dips. However, for a more accurate chart of returns over one to five years, you should also overlay your chart with the start and end of the various periods of quantitative easing. QE is not likely to happen again in this cycle!" – Paid-up subscriber Alan T. "Subscriber James S. says... The U.S. has and always [will] be the leader in innovation while the rest of the world always plays catch up. "He should have said, 'The U.S. WAS the leader in innovation while the rest of the world always plays catch up.' It won't be the leader in innovation for much longer all the while its so-called leaders are doing their best to hamstring and cripple the U.S... "Innovation can only thrive when truth can be freely spoken and that depends on unbridled liberty – which is what the U.S. always stood for but is now being destroyed day by day." – Paid-up subscriber S.I. "I want to thank James S. for his thoughtful comments. I cannot argue with what he says because America is the preeminent country of innovation, and it's difficult for us to consider that this could ever change; however, we have a very long history of countries that held the reserve currency only to lose it. We only need to consider Great Britain, which for a very long time was the undisputed leader of the world. They pretty much ruled the world. The British pound was the world's currency. As Winston Churchill liked to say, 'The sun never sets on the British empire.' But the sun did set on the British empire. "World War II made it possible for America to take the baton when Europe and Japan were devastated. Whether or not we are willing to admit it, America has become an empire. All was well as long as we produced more than we consumed. The problems started when this condition was reversed. As a rich country we thought we could eradicate poverty. We gave masses of people free money and required nothing in return. It didn't take long before the masses got used to the freebies, and our government became addicted to borrowing. "James S. is very hopeful, and it's a good thing to be hopeful. But how does America get back to reversing the spending trend? Not an easy thing to do when our politicians offer to forgive $1.5 trillion in student loans in return for their vote, and most of our students seem willing to make that trade. If the student loans were the only obstacle, we might have a chance, but we have a multitude of these problems. "It's a massive dose of responsibility we have to swallow in order to get back on track. It's easier to weaponize the U.S. dollar, so we can tell the world do as we say or we'll sanction you. We've gotten away with this so far, but how long can it last? Something tells me it will become easier for the world's entrepreneurs to find another place to practice their wonders. China is too tyrannical. India, on the other hand, is a democracy with plenty of talent and not yet spoiled by wealth. "Let's hope James S. is right. Time will tell." – Paid-up subscriber Luis A. All the best, Corey McLaughlin Baltimore, Maryland January 26, 2023 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 862.5% Retirement Millionaire Doc ADP Automatic Data 10/09/08 812.4% Extreme Value Ferris MSFT Microsoft 02/10/12 739.9% Stansberry's Investment Advisory Porter WRB W.R. Berkley 03/16/12 634.2% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 570.3% Stansberry Innovations Report Wade HSY Hershey 12/07/07 528.4% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 453.0% Retirement Millionaire Doc AFG American Financial 10/12/12 445.8% Stansberry's Investment Advisory Porter ALS-T Altius Minerals 02/16/09 322.3% Extreme Value Ferris FSMEX Fidelity Sel Med 09/03/08 314.0% Retirement Millionaire Doc Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 4 Stansberry's Investment Advisory Porter 3 Retirement Millionaire Doc 2 Extreme Value Ferris 1 Stansberry Innovations Report Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst ETH/USD Ethereum 12/07/18 1,311.6% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,161.9% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,058.2% Crypto Capital Wade MATIC/USD Polygon 02/25/21 889.7% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 514.6% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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