The Impact of the UAW Strike is Racking Up

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, The Impact of the UAW Strike is Racking Up Capitol Hill could breathe again at least for briefly, as a stop-gap deal was struck to avoid a government shutdown. But it did little to spark a rally in the markets. Wall Street is still worried about the economy. Despite the Nasdaq being up yesterday, several growth stock funds were in red. Cathie Wood’s ARK Innovation ETF – a typical barometer for risky assets – was down by about 2% for the day. The Invesco Solar ETF did worse with a more than 4% decline. The small-cap index Russell 2000 fell 1.8%, indicating that Wall Street is pessimistic on the outlook for smaller businesses. Tighter credit conditions: Loan volume and demand are deteriorating, according to a Dallas Federal Reserve survey released yesterday. 42% of respondents said loan volume fell and 49.3% of them said demand was down in September. - “Bankers remain pessimistic, with expectations for increasing loan nonperformance, decreasing loan demand and worsening business activity over the next six months,” the Dallas Fed stated. Dallas Fed (Photo: Lance Murray) Higher-for-longer: Federal Reserve Vice Chair for Supervision Michael Barr said yesterday that he sees higher interest rates staying unchanged for a while. What’s more, he encouraged to be more focused on how long rates should stay elevated before cutting – rather than whether there will be more hikes from now on. - “Given how far we have come, we are now at a point where we can proceed carefully as we determine the extent of monetary policy restriction that is needed,” Barr told the Forecasters Club of New York in prepared remarks. - “In my view, the most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals. I expect it will take some time.” Impacts from the UAW strike: The United Auto Workers entered its third week of the strike. Citi’s Itay Michaeli said that GM’s EBIT could be negatively affected by an estimated $200 million. Ford could see a similar impact. Bank of America Securities estimates that there could be “a 400-500bp headwind to operating margins,” said analyst John Murphy. But of course, the strike is still ongoing. Any further walkouts would impact earnings more. This is something to monitor as an investor.  The Safest Compounding Stock You Can Find Right Now Today’s Stock Pick: Humana ([HUM]() I am going to give you a number – 10,000. Why is that number special? That number could make you a lot of money. About 10,000 represents the number of senior citizens enrolling in a Medicare Advantage plan every single day. Listen, Medicare Advantage is a new thing. The government runs the Original Medicare, but it doesn’t cover everything, such as prescriptions, vision, dental, and etc. Plus, it often covers up to 80% of the medical costs. Enter Medicare Advantage. It is run by private companies, and it covers everything that Original Medicare – plus more. The coverage is 100%. And it adds dental, vision, and hearing care. It’s nearly a no-brainer to choose Medicare Advantage, and the growth exploded to 48 percent of the total Medicare-eligible population. You can see its fantastic growth since 2007 in the graph below: (Source: KFF) Humana is a private insurance company that offers Medicare Advantage, and its growth cannot be ignored -- especially when it is in the insurance business. One day, I was chatting with an insurance marketing guru. His business was helping insurance agencies to acquire and retain customers. He’s been in this for 30+ years, selling over $50 million in products. And he said to me, “Let me tell you something. The insurance business is America’s best-kept secret.” The reason is simple – an insurance company gets recurring revenue from monthly premiums with a retention rate as high as 90% for decades. Think about this. Once you get insurance, you pay and forget it. Insurance companies get to invest in these premiums and generate returns for many decades. Humana is a stable business because of the necessity of getting insurance. Every day, senior citizens must get health insurance. You can’t avoid it. And Medicare Advantage is perhaps the best option for most Americans. Plus, Humana is somewhat insulated against inflation by raising insurance premiums. (Photo: Christopher Fryer) Humana is the second-largest Medicare Advantage plan provider supporting over 5 million beneficiaries with high-quality coverage. The quality of Humana’s product offering is right at the top of the pack, with over 97% of Medicare Advantage members in plan with a four-star rating or higher As a result, Humana grew faster than the market, taking market share along the way. Its annualized enrollment growth was 10.4% since 2017 – well above the industry’s growth. And it expects a 17% growth in 2023: (Source: Humana) Listen, you will not get a software-type growth with Humana. But you get the security. You can expect Humana to post 10% EPS annual growth in the next five years, not counting its dividends. The company just raised its 2023 guidance which shows the bright future ahead. Humana also repurchased about $1 billion of its shares in 2022, which shrank its market cap by 1.6% in 2022, and the program is certain to continue. The CFO expects to repurchase another $1 billion this year. Bottom line: With the market filled with uncertainty, Humana is one of the safest stocks you can buy. Its products are a necessity, and people have no reason to stop doing business with Humana unless switching to another competitor. And you’d get growth far above blue-chip stocks. You can expect 10% EPS growth in the next five years. So, add this stock to your portfolio to insulate your cash against inflation and any potential recession.   [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.