Powell’s Big Day

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Powell’s Big Day Are you ready for Jerome Powell’s big day tomorrow? Fed Chair Jerome Powell will take the podium on Friday to address the Federal Reserve’s latest plan to fight inflation. The degree of difficulty is at its highest. In the past, the course of action was obvious – just keep hiking rates. But now, the central bank is at risk of overshooting its rate-hiking cycle or stepping off the gas pedal too soon and flaring up inflation again. - “He will caution against easing too soon. I think that’s going to be a theme here,” said former Fed Vice Chair Donald Kohn. “It would be actually helpful for him to spell out what he means by data-dependence, tamping down the very strong reaction of markets to each piece of data.” The rates are now above inflation, putting it into restrictive territory. (Source: Bloomberg) Some Fed officials argue that recent rate hikes haven’t worked their way into the economy. The resumption of student-loan payments this fall and shrinking pandemic-era savings could eat into consumer’s spending power. But others believe that the economy already feels the pain from rate hikes, and inflation remains far above its 2% target. So, Powell may insist on making meeting-by-meeting decisions. - “Given the wide-ranging views on the topic within the Fed, we expect Powell to promote his favored risk-management strategy — moving slowly. In order to better assess any estimate of the neutral rate, the FOMC will need to wait and observe — likely for several meetings,” said Anna Wong, Bloomberg’s chief US economist. Right now, the markets don’t expect any rate hike this year, based on futures contracts. But if there were a hike, they assign a higher probability of a hike at the Fed’s Oct. 31-Nov. 1 meeting – rather than its upcoming meeting in September. Adam Posen made a good point that Powell is likely to be vague because there’s no way for the central bank to know if there are enough rate hikes or not. - “There is no way Powell’s speech can be that tight and clear this time, because the economic outlook is genuinely more uncertain,” said Adam Posen, president of the Peterson Institute for International Economics. - “Central bank decision-making in some sense is easier when you have policy wrong, and you have a long way to get to where you should be,” Posen said. “It’s more difficult when you have to sort through being close to the right policy but not sure you’re there, and that’s where the Fed is now.” Adam Posen, president of the Peterson Institute for International Economics (Photo: Bloomberg)  The Unique REIT Stock Holds A Special Competitive Moat In The Niche Of Life Science Today’s Stock Pick: Alexandria Real Estate ([ARE]() Alexandria isn’t your average REIT stock. It is an enlightened company with a mission to change the world. It also understands the power of niche to create an unmatched competitive advantage. Alexandria is a real estate property company that focuses exclusively on life science. It doesn’t view itself as a real estate company. Rather, it is a community that drives innovation in the space. The heart of Alexandria’s business model is the theory of cluster, pioneered by Harvard Business Professor Michael E. Porter. For a life science company to succeed, it needs to be in the right “cluster.” There are four critical components for the cluster theory — location, innovation, talent, and capital. Basically, you need to be in the location that is brewing with talent. Information flows faster. The talent pipeline is robust from elite universities. And there are capitalists in the area to fund the growth. Precisely, Alexandria’s vision is to create a cluster mega-campus strategy. Alexandria’s buildings are amenity-rich. They are thoughtfully designed to deliver a highly-complex infrastructure for life sciences. That’s the beauty of Alexandria. The complexity of life sciences makes it difficult for competitors to enter Alexandria’s market. In fact, co-founder Joel Marcus is credited for turning Cambridge, Mass. into one of the world’s biggest biotech hubs. Joel started as a lawyer representing firms that wanted laboratory space near major academic institutions. That was his insight – he foresaw the demand for customized commercial buildings designed for labs that are built close to talent hubs in universities. Eventually, he was approached to start a real estate company for biotech companies. The rest was history. Joel S. Marcus, the co-founder of Alexandria Real Estate (Photo: New York Times) Here’s an astonishing statistic to understand the dominance of Alexandria in life science. One hundred percent of FDA-approved engineered gene and cell therapies were developed or owned by tenants of Alexandria. Can you believe it?! So, what is the result of Alexandria’s enlightened mission? Extraordinary growth. Its net income grew by 237% since 2013 – a CAGR of 16.4%. And remember, this doesn’t include annual dividends since Alexandria’s a REIT stock. All in all, you’d get phenomenal net income growth along with high dividends. (Source: Alexandria Real Estate) Since Alexandria’s IPO in May 1997, the stock’s total shareholder return exceeded 1,673% from IPO through Dec. 31, 2022. It was two times higher return than the Nasdaq at 838%. And remember that its return counted through two major stock market crashes – the dot-com crash and the 2007-09 housing crisis. (Source: Alexandria Real Estate) The largest acquisition ever: Last year, Alexandria completed its largest acquisition in company history -- a $1.48 billion foundational life science campus aggregating nearly 2 million RSF, in Fenway, Boston. The company understands the power of branding, and it named the building the Alexandria Center® for Life Science – Fenway. (Source: Alexandria Real Estate) A huge pipeline of new value-creation: Alexandria has a robust value-creation pipeline of 7.6 million RSF of projects under construction or expected to commence construction from the first quarter to 4th quarter in 2025. It is easily one of the largest and highest-quality pipelines among all REITs. And best of all, the pipeline is de-risked significantly with 72% of this RSF already leased or under negotiation. All in all, this highly leased pipeline is projected to generate more than $655 million in incremental annual rental revenue primarily from the same period. That’s 26% of Alexandria’s 2022 total revenue. (Source: Alexandria Real Estate) A venture capital arm: Alexandria isn’t just a REIT company, though. It formed a venture capital arm, where it invested in trailblazing life science companies that will positively impact human health. And it has tentacles in agrifoodtech, as well. These investments keep Alexandria close to the new trends of science and technology and curate the highest-quality tenant base. Alexandria Venture Investments was recognized as the most active corporate investor in biopharma by new deal volume and as one of the top five most active U.S.-based investors in agrifoodtech for several years. And these investments have been wildly profitable. As of December 31, 2021 (the most recent known data), Alexandria Venture Investments’ portfolio had a carrying value of nearly $1.9 billion, with unrealized gains aggregating $797.7 million! (Source: Alexandria Real Estate) Bottom line: Alexandria is a unicorn in the REIT sector, where it has a powerful brand in building mega campuses for groundbreaking companies. In fact, Moderna’s HQ is owned by Alexandria along with Moderna’s other three campuses. Its dividend yield is 4.2%, and with its robust pipeline of new value-creation projects, the earnings are sure to grow for many years to come. Owning Alexandria is like owning Apple of REIT with its powerful brand operating in a hot sector of biotech. This is one-of-a-kind stock, and you’d never sell it once you own it. [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](       © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.