10-Year Treasury Yield Hit Its Highest Level Since 2007

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, 10-Year Treasury Yield Hit Its Highest Level Since 2007 The stock market continued its path yesterday, as the benchmark 10-year Treasury yield hit its highest level since 2007, indicating that investors expect interest rates to remain high longer than previously expected. Oil prices surged by 3% to hit $93.68 a barrel. The energy sector is back in style with the sector jumping by 2.5%. Marathon Oil and Devon Energy were both up more than 4%. All in all, Wall Street sold off stocks after disappointing economic data along with an expectation of higher rates. - “Inflation remains the big concern,” said Greg Bassuk, CEO of AXS Investments. “Investors have been very anxious about not only the elevated rate, but how that impacts companies with the higher borrowing costs.” Greg Bassuk, CEO of AXS Investments (Photo: Nasdaq) In the beginning of the month, traders in the futures market were betting that interest rates would be at about 4.2% by the end of 2024, but that outlook has raised to 4.8%. That is a big increase in just a month. - “The market has been consistently wrong about Fed policy this year,” said Kevin Gordon, senior investment strategist at Charles Schwab. “For a good chunk of the year the market expectation was it would be cutting aggressively this year . . . now there’s an embrace of ‘maybe [the Fed] actually means it’.” The shutdown drama: Wall Street is watching anxiously about the drama surrounding a potential government shutdown. If it goes through, it could cost up to $1.9 billion a day in lost or delayed revenue. And the cost could be higher if the UAW escalates its strike against Detriot automakers. Minneapolis Fed President Neel Kashkari said these two scenarios could reduce the amount of rate hikes down the road. They could slow down the economy, which would be deflationary. - “If these downside scenarios hit the US economy, we might then have to do less with our monetary policy to bring inflation back down to 2% because the government shutdown or the auto strike may slow the economy for us,” Minneapolis Fed President Neel Kashkari said.  Need a bona-fide dividend stock? Look no further than this Today’s Stock Pick: Verizon ([VZ]() Looking for the potentially safest 8% dividend yield you can find in the stock market? It has been a tough year for telecommunication stocks -- especially after The Wall Street Journal reported the story about leads inside old cable lines. As a result, Wall Street is worried about Verizon’s potential liability. If you are willing to take a risk to buy low, it looks like a phenomenal buy at this level. Listen, the company is known as the #1 wireless network in quality. It has the best coverage and speed across America. And of course, smartphones are perhaps the most indispensable technology for almost every American. What’s more, the barrier to entry is enormous. You need billions of dollars to build out the infrastructure. The government also restricts the number of frequencies in the air, so you will need to bid to be able to offer wireless services. And guess what? The company is now offering a dividend yield of 8.21%! Verizon didn’t cut dividends during the 2007-09 financial crisis and the pandemic lockdown and raised dividends for 16 consecutive years. In other words, you can be assured to lock into 8% for many years to come. And that yield is very likely to rise as the company continues to raise dividends. Verizon CEO emphasized the company’s commitment to return cash to shareholders: - “We believe that we will become increasingly efficient with our capital, using less capital to generate every dollar of revenue for years to come. That will enable us to produce expanding cash flow that we can both reinvest in our business and return to our shareholders,” said Verizon CEO Hans Vestberg. By the way, Verizon made a huge capital spending to build out the 5G infrastructure. The company is now winding down its capital spending budget, reducing it from $23.1 billion in 2022 to under $19 billion at the midpoint of its guidance range this year. That is a reduction of 20% year over year. The CEO expects the CapEx to keep falling to around $17 billion in 2024. - “In 2024, we expect our CapEx to be around $17 billion, which we expect to represent the lowest capital intensity in over a decade and among the lowest in the industry. We expect we will deliver a best-in-class network experience while reducing our 2022 CapEx levels by more than $5 billion over the next couple of years.” That is more than $5 billion in savings over the next two years! (Source: Verizon) A dividend king: Don’t expect Verizon to grow like a software stock. The company grew its revenue by 2.4% year-over-year, but it is very efficient. Its ROE has never fallen below 20% since 2014. It means Verizon can earn 20%+ from every dollar invested in the business. (Source: MacroTrends) What does it mean? LOTS of cash returned to shareholders. The yield can rise as Verizon winds down its CapEx spending. By then, Wall Street will notice this stock and drive up the stock. Bottom line: Verizon is a perfect stock to own right now. Interest rates are extremely high, so it will be a gravity to asset prices, making it hard for prices to rise. So, it is critical to own stocks with high dividend yields like Verizon. What if rates fall? That’s fine. Asset prices typically rise, as well. You would already lock into Verizon’s 8% dividend yield while enjoying any appreciation in the stock price. That’s a win-win scenario.   [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.