6 Stocks to Invest in if There’s Another Rate Hike

Today, on August 31, the initial jobless claims for the week ending August 26 came in at 228,000, below market expectations of 235,000, thereby registering its lowest reading in four weeks. This has followed further signs of economic slowdown in the form of JOLTS, which showed an unexpected drop in job openings to below 9 […] September 07, 2023 [Option Sensei] [6 Stocks to Invest in if There’s Another Rate Hike]( Today, on August 31, the initial jobless claims for the week ending August 26 came in at 228,000, below market expectations of 235,000, thereby registering its lowest reading in four weeks. This has followed further signs of economic slowdown in the form of JOLTS, which showed an unexpected drop in job openings to below 9 million for the first time since March 2021, the latest consumer confidence index, which came in at 106.1, lower than the previous Dow Jones estimate of 116 which was lower-than-expected addition of 177,000 jobs in August according to private payroll data from ADP, and a downward revision in the GDP growth rate for the second quarter. However, such disappointing updates have been welcomed by market participants spooked by Fed chair Jerome Powell’s message at Jackson Hole in Wyoming on Friday, August 25. While it was not as brief as last year’s, it was still equally unambiguous. 2% still remains the non-negotiable target for the inflation rate, and the Central Bank is prepared to raise policy rates further if required and hold them higher for longer until it is confident of sustained price stability. While the 12-month PCE has since declined to 3% percent as of July from its peak of 7% in June 2022 due to a significant unwinding of the demand-supply imbalance, however, the core PCE, which excludes volatile food and energy prices and includes inflation for goods, housing services, and all other services, came in at 4.3% in July, indicating that there is significantly more ground left to cover through monetary policy tightening. In such a scenario, despite increased optimism, businesses are expected to remain weighed down by high borrowing costs, and economic activity is expected to remain stifled due to relatively scarce credit. Moreover, with every increase in benchmark interest rates, a selloff of long-duration fixed-income instruments, such as the 10-year treasury notes, gets triggered, which causes a slump in their market value and a consequent increase in their yields. This also increases the benchmark 30-year mortgage rates, thereby depressing demand and deepening the crisis in which real estate has lately been finding itself. An increase in borrowing costs would not just raise the cost of servicing the $32.7 trillion national debt; significant markdowns and prices of legacy bonds could crush the loan portfolios of banks that could share the same fate as the Silicon Valley Bank and the First Republic Bank. In this context, S&P’s move to downgrade multiple U.S. banks citing ‘tough’ operating conditions hardly comes as a surprise. Speaking of banks, the Bank of Japan’s policy tweak loosened its yield curve control, sparking widespread shock in the markets. To compound the miseries further… Continue reading at [INO.com]( SPONSOR [This simple 7-minute trade hasn't lost in 7 years]( If you're tired of holding your breath every time you open your trading account... only to see red. If you're done shouldering the stress that comes from knowing there's really no easy solution to the financial mess America is in... and if you're finally ready to consider a common-sense approach to making money... one that could let you rake in massive winners of 96%...100%...and even 203%... FAST (even in today's topsy-turvy market)... [You're going to love what I'm about to show you here.]( NOTE: If URLs do not appear as live links in your e-mail program, please cut and paste the full URL into the location or address field of your browser. [Privacy Policy]( | [Terms & Conditions]( This is a paid advertisement.This is not a solicitation for the purchase or sale of securities. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice, prior to making any investment decision. Advertisements and sponsorships are provided as a service to Wealthpop users . Wealthpop is not responsible for their content, services or products. The statements and opinions contained in this advertisement are not those of Wealthpop, and Wealthpop disclaims any liability for or arising from such statements and opinions. You are hereby advised that Wealthpop is receiving a fee as compensation for the distribution of this advertisement. [Click here to unsubscribe]( Copyright © 2023 Wealthpop. All rights reserved. Magnifi Communities, 1 Penn Plaza, Suite 3910, New York, NY 10019