Fed Officials Shifted Tone On Future Rate Hikes

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Fed Officials Shifted Tone On Future Rate Hikes Federal Reserve officials are changing their tone a little bit after the recent surge in 10-year Treasury yields. Yesterday, Fed Vice Chair Philip Jefferson said officials will “proceed carefully” due to higher yields. Some officials argued that higher yields almost act like a rate hike, making borrowing cost more expensive. Fed Bank of Dallas President Lorie Logan made the same argument yesterday, as well. - “The script has changed,” said Andrew Brenner at NatAlliance Securities. “The odds for another tightening have dropped dramatically since Friday.” (Source: Andrew Brenner at NatAlliance Securities) Energy companies were the best performers in the S&P 500 yesterday after the spike in oil prices. Exxon Mobil and Chevron jumped over 2.7%. Defense companies also did well with Lockheed Martin’s 8.9% gain. Northrop Grumman jumped 11%, as well. The Pentagon said yesterday that it is working with U.S. defense companies to expedite the shipping of pending Israeli weapon orders. - “I am not going to get into specifics on this call, but the bottom line is we are working as fast as possible to provide critically needed munitions of various types and other equipment,” a senior Defense official said. But airlines suffered with American Airlines and Delta Air Lines falling more than 4%. These stocks are feeling the impact from the war between Hamas and Israel. But some analysts pointed out that geopolitical conflicts have small track record of impacting stock prices over the long term – unless oil supply is impacted. - “Of course, it’s going to send some jitters to markets. But what we have seen over time is that typically, the impact in the longer run from geopolitical events tends to be somewhat contained,” said Meera Pandit, global market strategist at JPMorgan Asset Management. The next market catalyst before inflation data due on Wednesday and Thursday would be August’s wholesale inventories numbers and PepsiCo’s quarterly earnings results due before the bell.  Own Forbes’ 5th Best Small-Cap Stock At A Single-Digit P/E Today, you will have an opportunity to own shares in: - Forbes Magazine’s 5th best small-cap (less than $2 billion market cap) public company in the country. - And the company is also ranked in the top 100 fastest-growing companies in the world by Forbes. Today’s Pick: Green Brick Partners, Inc. ([GRBK]() First of all, the management is frustrated with its valuation. So, Green Brick Partners is buying back shares hands over fist because it believes the shares offer an attractive way to return cash to shareholders. - “Additionally, year-to-date, we repurchased 803,000 shares of common stock for $27.7 million, representing 1.7% of our total shares outstanding as of December 31, 2022,” said CEO Jim Brickman. And you could own the stock at only 7.16 P/E. So, what’s driving Green Brick’s growth? Population growth in Green Brick’s regions. You’ve heard all about it in the news. The “Great Migrant” saw residents exiting Northeast states and California and moving to Texas, Colorado, and Southeast states. And guess what? These four regions are the primary markets that Green Brick builds homes in: - Dallas/Ft. Worth, Texas - Atlanta, GA - Vero Beach/Treasure Coast, FL - Colorado Springs/Ft. Collins, CO (Source: Green Brick Partners Investor Presentation) As a bonus, Green Brick benefits from a severe housing shortage in the nation. What a double whammy! Housing shortage and explosive population growth. A savvy investor would ask the next question -- “How much of the growth is inflated by debt?” - Here’s why: Often, companies would take on huge debts to finance their growth. Here’s a problem with this. When the growth slows down even slightly, its EPS will plummet. The reason is simple. When you take on large debts, your interest costs are higher. (Debt isn’t free!) If your revenue slows down, the cost of interest will eat into the earnings. - Example: Let’s say if you take out a mortgage on your house. You usually take home $4,000 after expenses. And you pay $500 in interest from your mortgage. That’s 12.5% of the take-home earnings. - Then, imagine if your take-home earnings declined to $3,000. All of a sudden, the mortgage interest eats up 16% of the take-home earnings -- or 28% greater than the original scenario. In short, high debt will make subpar years look even more worse for a company. But you don’t need to worry about that scenario with Green Brick. The company has the third-lowest debt to total capital versus its peers in the home building industry. So, its growth has been healthy because of its little leverage. (Source: Green Brick Partners) Even better, Green Brick isn’t overly conservative -- despite its low debt. It is aggressive in acquiring lots to build homes. In fact, it acquired twice as fast as the second-highest competitor last year. And the company had by far the biggest net sales orders (YoY change) in the two most recent quarters: (Source: Green Brick Partners Inve) “Location, location, location.” Green Brick practices the oldest adage in real estate. Yes, it acquires lots at a fanatical pace but they’re not settling for run-down lots: - Nearly all of Green Brick’s lots are located in “Most Desirable” neighborhoods. See the map below and notice how Green Brick operates mostly in blue-colored areas (which are more desirable) in Atlanta: (Source: Green Brick Partners) One more thing: Here’s the best proof of Green Brick’s pricing power (by operating in top markets) and its operational excellence. Green Brick has the best gross margin in the industry. (Source: Green Brick Partners) Bottom line: Green Brick Partners is going to be money in the bank in the next two years. Just look at these positive signs: - Operates in fast-growing markets - Acquires lots twice as fast as the second-highest competitor - Projected to grow its revenue by 20% this year with little debt - Boasts the highest gross profit margin in the industry Listen, you can have Forbes’ Top 100 Fastest-Growing Companies in the world at a sweetheart deal of 5 P/E. Grab this stock immediately. [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.