Slow and Steady

Begging for easy money... Jerome Powell shuts the door – for now... The Federal Reserve's confidence game... The 'pivot' is coming, but not quite yet... A labor market update... More about biotech... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Begging for easy money... Jerome Powell shuts the door – for now... The Federal Reserve's confidence game... The 'pivot' is coming, but not quite yet... A labor market update... More about biotech... --------------------------------------------------------------- They're begging for cuts... On Sunday, U.S. Senator Elizabeth Warren urged Federal Reserve Chair Jerome Powell to cut "astronomical" interest rates ahead of the Fed's two-day policy meeting in Washington, D.C. this week to make housing more affordable for Americans. I (Corey McLaughlin) am sure corporate financial officers that are staring down costly refinancing in the next few months would make the same argument for their own reasons... So might U.S. Treasury Secretary Janet Yellen, looking at the skyrocketing cost of government debt... And today, at a press conference after the meeting, most of the questions from reporters sounded like they were practically begging for rate cuts on behalf of Wall Street. After all, we're no longer seeing 40-year high inflation. But Powell said not yet... As widely expected, the Fed held its benchmark lending rate steady between a range of 5.25% and 5.5%, where it has been since July... and the central bank said it would keep trimming its balance sheet. But as is usually the case with these Fed meetings, the market-moving stuff is whatever is said afterward by the Fed chair about the future. To that point, Powell couldn't have been clearer... We need more "confidence" about the pace of inflation, he said probably a dozen times... and more data that shows the rate is moving toward 2% "sustainably." He referred specifically to the Fed's preferred personal consumption expenditures ("PCE") gauge of inflation and a "12-month target." Powell also said the Fed probably won't cut rates at its next meeting in March. That particular comment appeared to coincide with the beginning of a late-day selloff that ended with the benchmark S&P 500 Index down about 1.5%, the tech-heavy Nasdaq Composite Index off 2.2%, and the small-cap Russell 2000 Index nearly 2.5% lower. But the Fed is getting close to a 'pivot'... Powell said almost all the Fed members do expect to cut rates in 2024, but that the central bank isn't rushing. The Fed plans to start talking about how to change its balance sheet policy in March. Among other things, Powell said... It's not that we don't have any confidence. We have growing confidence, but... it is a highly consequential decision to start the process of dialing back on restrictions. We want to get that right. We feel like the strong economy, strong labor market, inflation coming down, gives us the ability to do that. Slow and steady was the message... with the Fed expecting to cut rates later this year. About that jobs market... Today, payroll company ADP reported that the pace of U.S. private sector payroll growth in January slowed compared with December – and the number was lower than mainstream economists' expectations for this month. According to ADP, the private sector added 107,000 jobs in January. That's down from the 158,000 new jobs added in December and closer to the 103,000 added in November. It's in line with the general hiring slowdown trend we saw in the second half of 2023. There's a lot of volatility in these reports, and they're often revised later. But they can help gauge the strength or weakness of the labor market and broader economic trends that may be afoot. So far, it's slowing, but not "breaking." The next major jobs report is January's "nonfarm payrolls," which will be released this Friday. It includes an updated national unemployment rate, and it is typically the biggest market-mover of jobs reports each month. The last few reports have been bullish for stocks. You see, the reported unemployment rate climbed slightly through much of 2023 but fell from 3.8% in the fall to 3.7% in November and December. Meanwhile, we've since learned that the fourth-quarter 2023 GDP estimate came in at 3.3% annualized growth... defying many analysts' expectations for a recession in 2023. Revisiting biotech stocks... Last week, I mentioned that Stansberry Innovations Report editors John Engel and Eric Wade made a bullish case for biotech stocks in their latest issue, in part because the market expects more Fed rate cuts, which could trigger more speculative investments in the sector. As we wrote [in the January 24 Digest](... If you believe the Fed is going to cut rates in 2024 and are looking to put new money to work, the biotech sector is a logical place to invest – in the right stocks. While John and Eric aren't sure that the bottom is in for biotech quite yet, they said you don't need to time it perfectly... They detailed a great opportunity in their newest issue... Innovations Report subscribers and Stansberry Alliance members can find all the details on this recommendation [here](. Weighing the boom-and-bust proposition... Stansberry Research senior analyst Brett Eversole also recently looked at the biotech sector in a recent issue of True Wealth Systems. As Brett explained... Biotech stocks are known for their boom-and-bust nature. And given what these companies do, the booms and busts in biotech stocks make sense. These companies are at the cutting edge of medical research. They develop medications and therapies that can treat (or even eradicate) diseases. And their success hinges on whether an experimental product pans out. So investors tend to get overly excited – or overly pessimistic – about their prospects. This sector can surge to incredible gains. We saw that in the first year of the pandemic. But those bull runs are often followed by a collapse... which is what we've seen since. However, the trend has changed, and biotech stocks have "staged a breakout." As Brett wrote... They soared at the end of 2023. And they hit a multiyear high earlier this month. Take a look... The rally was a major reversal for a sector that had been taking it on the chin. But biotech stocks could move much higher in the months ahead – even after a big breakout like this. To see it, I looked at every new 52-week high in biotech stocks. They've happened 19 other times since the data began in 1993. And they tend to lead to slight outperformance. Check it out... Similar setups saw six-month returns improve from 5.9% to 7.7%. And over a year, the typical gain improved from 12.1% to 13.8%. Now, this isn't a full-fledged "buy" signal. Brett said biotech stocks have had more down years in the 12 months following their "breakouts" than you might expect (42% of the time)... So biotech stocks don't always keep soaring after these extremes. But when they do, the returns get much better... In the winning trades, biotech stocks were typically up 17.5% over six months and 35.4% over a year. So two outcomes are possible from here... Either biotech stocks will reverse back to the pain we saw for most of last year or they'll absolutely soar in the months ahead. So place your bets carefully, like in the type of high-quality, growing business benefiting from a "tech obsession" in the beaten-down biotech industry that John and Eric [just recommended]( in Stansberry Innovations Report. One more thing... It's that time of year... Our publisher Brett Aitken is putting the finishing touches on the first part of our annual Report Card, covering our editors and analysts' performance in 2023. Stay tuned. --------------------------------------------------------------- Recommended Links: [Multimillionaire Investor: 'Trade Places With Me']( A former $200 million hedge-fund manager who tripled his clients' money, has been called "The Prophet" by CNBC, and has met Warren Buffett and Presidents Obama, Clinton, and Biden... invites you to try a powerful new investment strategy you'd normally need $2 million to access. [Learn more here](. --------------------------------------------------------------- [The Biggest Hit to Your Wealth in More Than a Decade?]( Ten of the world's biggest money managers depend on Joel Litman's market analysis. Now, he has just stepped forward with an urgent update to his latest (frightening) market warning... including a tool he has been waiting 20 years to share with the public. If you're holding stocks, you need to see this. [Click here for the full details](. --------------------------------------------------------------- New 52-week highs (as of 1/30/24): American Express (AXP), AutoZone (AZO), Berkshire Hathaway (BRK-B), Ciena (CIEN), Costco Wholesale (COST), Cintas (CTAS), Commvault Systems (CVLT), Dell Technologies (DELL), Denison Mines (DNN), FactSet Research Systems (FDS), Comfort Systems USA (FIX), W.W. Grainger (GWW), Intercontinental Exchange (ICE), JPMorgan Chase (JPM), Liberty Energy (LBRT), Nucor (NUE), O'Reilly Automotive (ORLY), Palo Alto Networks (PANW), Procter & Gamble (PG), Parker-Hannifin (PH), Phillips 66 (PSX), Regeneron Pharmaceuticals (REGN), Construction Partners (ROAD), Roper Technologies (ROP), S&P Global (SPGI), SPDR Portfolio S&P 500 Value Fund (SPYV), Stryker (SYK), Cambria Shareholder Yield Fund (SYLD), Trane Technologies (TT), ProShares Ultra Financials (UYG), Visa (V), and Waste Management (WM). A quiet mailbag today... As always, we love to hear what's on your mind. Send your comments, questions, or anything else to feedback@stansberryresearch.com. All the best, Corey McLaughlin Baltimore, Maryland January 31, 2024 --------------------------------------------------------------- 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 1,348.7% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,294.9% Stansberry's Investment Advisory Porter wstETH Wrapped Staked Ethereum 02/21/20 1,011.3% Stansberry Innovations Report Wade ADP Automatic Data Processing 10/09/08 863.9% Extreme Value Ferris WRB W.R. Berkley 03/16/12 743.8% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 586.4% Retirement Millionaire Doc HSY Hershey 12/07/07 481.1% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 422.7% Stansberry's Investment Advisory Porter BTC/USD Bitcoin 01/16/20 381.6% Stansberry Innovations Report Wade PANW Palo Alto Networks 04/16/20 364.5% Stansberry Innovations Report Engel 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 Stansberry Innovations Report Engel/Wade 2 Retirement Millionaire Doc 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 2,053.7% Crypto Capital Wade ONE/USD Harmony 12/16/19 1,104.4% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 1,053.1% Crypto Capital Wade POLYX/USD Polymesh 05/19/20 1,042.7% Crypto Capital Wade MATIC/USD Polygon 02/25/21 838.4% 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 Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc 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 ^ 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}. 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