Let the Good Times Roll – For Now

Taking stock of the latest inflation report... Another Fed 'pause' could be coming... That has been bullish for stocks historically... Let the good times roll – for now... How playing it safe can double your money... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Taking stock of the latest inflation report... Another Fed 'pause' could be coming... That has been bullish for stocks historically... Let the good times roll – for now... How playing it safe can double your money... --------------------------------------------------------------- August hasn't gotten off to a great start... But for just the second time in the past seven trading days, the benchmark S&P 500 Index, tech-heavy Nasdaq Composite Index, and sturdy old Dow Jones Industrial Average each closed in positive territory today – though not by much. The catalyst was the latest inflation report from Uncle Sam, which [we noted on Monday that we'd watch for]( given that it could stoke some volatility for stocks. The consumer price index ("CPI") for July came out this morning... And for the second month in a row, the numbers beat Wall Street's expectations, meaning they showed the pace of inflation last month was less than anticipated. (Again, before writing in to tell me that these government numbers are unbelievable... know I am also a skeptic as well. Still, enough folks with enough money in the publicly traded markets care about the data, so here we are.) The latest CPI report showed prices accelerating at 0.2% for the month. That was in line with the consensus estimate... But the year-over-year CPI checked in at 3.2%, slightly below the 3.3% expectation. And core CPI – excluding food and energy – was 4.7%, the lowest since October 2021. Those are still historically high numbers, but they continue a trend of decelerating inflation from a peak of around 9% in June 2022. In particular, the 0.2% month-over-month rise in prices measured by the CPI is more in line with what had been "normal" over the past few decades, before the pandemic and the U.S. government's stimulus response took inflation on a wild ride. So, all in all, investors celebrated today, on balance. As our Ten Stock Trader editor Greg Diamond wrote to his subscribers in [a market update today]( bonds, stocks, and precious metals were up and the U.S. dollar was down. Another 'pause' might be coming... I (Corey McLaughlin) am talking about a pause in the Federal Reserve's interest-rate hiking spree of the past year-plus... We have talked less than usual about interest rates this month, thanks in part to special reports lately from our colleagues Dr. David "Doc" Eifrig (on [trading options]( and Dave Lashmet (on [the leaders in weight-loss-drug development](. But today's inflation data – coupled with the latest monthly jobs report last week – makes for a good time to handicap the likely next step in the Fed's monetary-policy plans. We now know the unemployment rate just fell again while inflation the past two months has slowed by more than the markets expected. Wall Street's latest consensus view is that the Fed will likely keep its benchmark bank lending rate where it is – in a range of 5.25% to 5% – when it meets next month on September 19 and 20. There is logic to this one. Last month, Fed Chair Jerome Powell said the central bankers wanted to see inflation keep decelerating if they were to ease off the inflation "fight." As [we wrote on July 26]( Powell said at a press conference... We'll be looking at everything. And of course we'll be looking to see whether the signal from June CPI is replicated, or the opposite of replicated, or somewhere in the middle. We'll be looking at the growth data, the labor-market data very closely, of course, and making an overall judgment. It's the totality of the data, but with a particular focus on making progress on inflation... As of today, the string-pullers at the Fed have seen the same story on inflation – again, as far as their own considerations are concerned, not how it might show up in your budget – for two straight months. One more CPI report, covering August, is due before their September meeting. Notably, the core personal consumption expenditures ("PCE") index that the Fed says it weighs most heavily also dropped to 4.1% year-over-year growth in June. That follows three straight months of 4.6% increases. And the Fed folks won't say this out loud, but they are also cautious – or frightened – about doing too much. (It's probably even more so now that two of the big three ratings agencies have come out to play with [recent downgrades]( on government debt and U.S. banks.) Dan Ferris and I have had a laugh or two talking about the CME Group's FedWatch Tool on recent episodes of the Stansberry Investor Hour. As we've observed, its reported odds on rate hikes constantly change – sometimes wildly and quickly. But it is good for tracking the leading view of bond traders with real money in the markets. Today, this tool shows that federal-funds futures traders are putting a 90% probability on the Fed pausing rate hikes again at its meeting next month. That's up from about 70% just a month ago, and 82% last week. What this means is that investors are thinking, once again, that the Fed is closer to the end of its rate-hike plans than to the start. Over history, that has been good for stocks... Back in a May 9 issue of our free DailyWealth e-letter, Stansberry Research senior analyst Brett Eversole analyzed [why stocks soar when the Fed pauses](. He wrote then... The answer isn't what you might intuitively expect. But it's good news. Over the past 40 years, stocks have a history of soaring after the Fed pauses rate hikes. And it means we could see the markets soar 20% over the next year. Now, since Brett published this piece on May 9, [shortly after]( the Fed put its first "pause" earlier this year on the possibility table, the S&P 500 is up about 8%. Should another Fed "pause" be in the offing, another leg higher for stocks could get going soon. In my narrow central-bank analysis... so long as the Fed sees a reason to possibly pause, but also the possibility of raising rates in the future, it means the central bank thinks the economy is still in a position of relative strength. Inflation numbers are coming down and reported unemployment is low, but the economy is not weak enough where the central bank thinks it needs to cut rates to goose growth. And as Brett shared... Remember, the stock market is a forward-looking machine. It prices in whatever we expect to happen over the next six to 12 months. Because of that, buying when the Fed pauses rates is a smart bet. The table below shows what happened a year after each pause in the rate-hike cycle over the past four decades. Take a look... We've seen six other rate-hike cycles in the past 40 years. In five of those cases, stocks were dramatically higher a year later. And the average gain was an impressive 19.5%. As Brett continued in the [May 9 issue of DailyWealth](... These numbers might not gel with your expectations. But the forward-looking nature of the stock market really does explain what's going on. Just think about our current situation... Stocks fell 25% peak-to-trough last year. During that time, unemployment fell... the worst of inflation passed us by... and the seemingly inevitable recession never materialized. Stocks lost a quarter of their value anyway. And that happened because the market had already priced in the likelihood that those bullish trends would reverse. The stock market's forward-looking mechanism doesn't always do a perfect job. But most of the time, if folks are worried about something in the future, the market has already discounted prices based on that possibility. That's why when the Fed pauses, stocks tend to soar. Even though the worst of the economic pain isn't over yet, it's already priced in... which puts a floor under expectations. That means stocks tend to move higher, and fast. Enjoy the good times – for now... Today, the S&P 500 bounced right off its 50-day moving average, its technical short-term trend. And about 63% of stocks in the benchmark U.S. index are trading above their 200-day moving average, or technical long-term trend. Take a look... In the meantime, the dollar – measured relative to other major world currencies – is still in a downtrend that began last fall. As we've described before, a weakening dollar benefits U.S. stock prices and anything else denominated in dollars. The chart of the U.S. Dollar Index ("DXY") is almost a mirror image of the S&P 500. If the Fed's plans don't change materially, this relationship could continue. But also remember, these times will not last indefinitely... There are always risks out there that could upend the status quo. A rebound in inflation (quite possibly with energy prices moving the way they are) could move interest-rate expectations higher again, hurting stocks. Alternatively, a dose of deflation in specific industries or broadly, like what's happening in China now, could change the game. So could mounting job losses. A credit crisis is possibly ahead, too. Any or all of those situations would likely push the Fed to cut rates because the economy will need a boost. This is when you'll see the elusive Fed "pivot." And it probably won't be good for stocks... In June, we reviewed the history of similar time periods. Specifically, we looked at times in which inflation was this high and the yield curve was as inverted for as long as it has been today in the months ahead of the Fed cutting rates. It hasn't happened often... just twice in the past several decades. But stocks fell about 13% both times. This could be in the cards should an "official" recession show up later this year or in 2024. As we wrote [in the June 28 Digest]( that's not the worst pullback in recorded history, but it's notable. The other good news is... Even if you're skeptical of the recent run-up in stocks or whether it will continue, you don't need to take a lot of risk to make money right now in this market. That's the message Dan Ferris is sharing right now. It's tough to say if or how long this trend higher for stocks will continue, but with his approach, it doesn't matter. You'll hear more from him tomorrow as usual, but I did want to mention this today. In a new video, he explains how "playing it safe" with his latest recommendations can double your money or better in the months ahead. [Click here to get all of the details now](. In the presentation, Dan also talks about how, before joining Stansberry Research, he got burned by bad investment advice and vowed to turn his life around. That's how he found value investing. It's a story worth hearing. RFK Jr.'s Plans and the Next Big Threat to America Edward Dowd, co-treasurer to Robert F. Kennedy Jr.'s presidential campaign, talks about the candidate's recently announced plan to back the dollar with hard currencies like gold, silver, or bitcoin. "Robert's introducing the conversation into the electorate. The current monetary system, as it stands, is debt-based. Might is created through debt. We've reached the endpoint, so there has to be a new system," Dowd tells our editor-at-large Daniela Cambone... [Click here]( to watch this video right now. For more free video content, [subscribe to our Stansberry Research YouTube channel](... and don't forget to follow us on [Facebook]( [Instagram]( [LinkedIn]( and [X, formerly Twitter](. --------------------------------------------------------------- Recommended Links: [From Dead Broke to Every Luxury: 'Here's How I Made It']( A moneymaking strategy so powerful, it helped me go from just $268 in my bank account to having everything I could ever want in life. Most importantly, my retirement worries are long gone. Now, the EXACT same setup I've used to amass my wealth is playing out again. This strategy is a dead simple, lower-risk way to potentially double or triple your money in the months ahead. [Click here for the full story](. --------------------------------------------------------------- [The No. 1 AI Stock of 2023 (Not Nvidia)]( It's not Nvidia, Meta Platforms, Alphabet, or Amazon. But thanks to a recent major deal, an under-the-radar stock could become the No. 1 winner of the 2023 AI boom. "This company just teamed up with one of the biggest power players in the AI industry... yet you can still buy it for just one-twelfth the price of Nvidia. The time to buy is NOW," says Marc Chaikin. [Click here for the name and ticker](. --------------------------------------------------------------- New 52-week highs (as of 8/9/23): Covenant Logistics (CVLG), Fortive (FTV), Eli Lilly (LLY), VanEck Oil Services Fund (OIH), Phillips 66 (PSX), SLB (SLB), Walmart (WMT), and West Pharmaceutical Services (WST). In today's mailbag, feedback on Stansberry Venture Technology editor Dave Lashmet's update in [yesterday's Digest]( about the companies leading the weight-loss-drug race... and another reply to [Tuesday's report]( on credit ratings agency Moody's downgrading several U.S. banks... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Dave Lashmet continues to amaze me with his stock research over the last decade. His picks of NVDA and NVO, and almost 30 others have led to sizable gains for my portfolio. I am anxiously waiting for the next stock beginning with the 2 letters NV, which could stand for aNother Venture (NV) stock." – Subscriber Steve H. "Hi Corey: In the August 8th Stansberry Digest article 'Another Day, Another Downgrade Story...' the discussion centers around Moody's downgrade of a handful of small-to-medium-size banks and their warning that several large banks are being considered for downgrades. "Unlike Fitch's downgrade of U.S. Government debt, Moody's focus is on the unraveling of the threads that form an important part of the fabric of the U.S. economy. Moody's actions and thinking supports Mike DiBiase's and Bill McGilton's prediction that bankruptcies – both corporate and individuals (with massive individual bankruptcies leading to corporate bankruptcies including the banks and other lenders) – will create a further unraveling of the U.S. economic fabric and a severe recession (I think depression). "What readers should understand is that the economy and stock markets do not have to be in the ruinous conditions they are in today. If some semblance of proper fiscal and monetary management at the Federal Government level had continued to be practiced from January 2021 until now, the U.S. economy and stock markets would be sizzling; we would have overcome the inflation caused by the Trump Administration's spending to get the U.S economy running again after the COVID-inspired shut down; and a reasonably healthy financial condition of individuals and corporations would be the norm. "Our economic and stock market problems are of our Federal Government's making. They have been purposely caused by a handful of those in Washington that want to fundamentally change America into a Third World nation so they can personally enrich and empower themselves. "The conditions that have resulted in Fitch's and Moody's actions have been intentionally created. Thank you for the interesting information." – Subscriber Michael U. All the best, Corey McLaughlin Baltimore, Maryland August 10, 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 1,170.5% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,009.6% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 893.6% Extreme Value Ferris wstETH Wrapped Staked Ethereum 02/21/20 703.9% Stansberry Innovations Report Wade WRB W.R. Berkley 03/16/12 554.6% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 545.0% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 534.8% Retirement Millionaire Doc AFG American Financial 10/12/12 391.3% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 333.0% Stansberry Innovations Report Engel FSMEX Fidelity Sel Med 09/03/08 307.4% 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 Stansberry Innovations Report Engel/Wade 1 Extreme Value Ferris --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 1,602.5% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,067.4% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,035.6% Crypto Capital Wade MATIC/USD Polygon 02/25/21 806.1% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 687.3% 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. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [www.stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.