Are We Back To Square One?

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Are We Back To Square One? Stocks fell and Treasury yields rose again after the new inflation data revealed that the Federal Reserve still has more work to fight price gains. The core CPI (which excludes food and energy costs) jumped 0.3% last month and 4.1% on a yearly basis. That was the lowest reading since 2021. Not too bad. However, the overall CPI was a tad hot with a 0.4% gain for the month. So, will the central bank hike or not? Richard Flynn of Charles Schwab UK believes that a single rate hike or not shouldn’t be the biggest question. Rather, it is how long the Fed will keep rates elevated. - “As for how this will impact interest rates, at this point, ‘higher-for-longer’ may be more important than ‘how high?’ said Richard Flynn, managing director at Charles Schwab UK. - “Whether or not the Fed opts for hikes, it’s unlikely we’ll see rates drop below where they are for as long as the inflation dragon proves difficult to slay.” Richard Flynn, managing director at Charles Schwab UK (Photo: LinkedIn) The recent inflation data didn’t move the stock market much. Why? A string of Fed officials said this week that rising Treasury yields basically acted like a rate hike. So, it may not be necessary to tighten the economy. - “Bottom line: the Fed can likely pause in November, though it’s a close call, and it remains too soon to consider cuts,” said Don Rissmiller at Strategas. Today will kick off the earnings season with JPMorgan Chase, Wells Fargo, Citigroup and BlackRock reporting results. There are some concerns about higher capital requirements and a potential recession that could eat into banks’ earnings. But Nancy Tengler of Laffer Tengler Investments believes the earnings season will surprise investors on the positive side. - “We’ll have some companies that will disappoint but I think for the most part, earnings are probably going to surprise investors to the upside,” she said. “Investors are too pessimistic. We expect that companies are going to be able to manage this pretty well.”  Top Blue-Chip Stock To Collect 12%+ Annual Return During The Bear Market Today’s Stock Pick: Cisco Systems, Inc ([CSCO]() Need a low-risk pick that delivers consistent shareholder returns, but also participate in megatrends like cloud, IoT, 5G, and security? Cisco is your perfect stock. It offers the infrastructure that makes these megatrends possible. Cisco’s switches, routers, and wireless access points make high-speed WiFi possible. Its firewalls and VPNs protect businesses from bad actors. The cloud offerings make it easy for businesses to operate primarily in the cloud. And finally, its hybrid work products offer phone systems and virtual meetings. As a result, these megatrends will be a powerful tailwind that can carry Cisco for the next decade. - “There are currently more technology transitions occurring concurrently than I've seen in 20 years. Long-term megatrends like hybrid cloud, hybrid work, security, IoT, 400-gig and beyond, 5G, and WiFi 6, as well as the move toward application observability, will likely provide tailwinds to our growth,” said CEO Chuck Robbins. (Source: Cisco) Cisco just released a new networking-as-a-service (NaaS) called Cisco Plus, which combines its data center compute, networking, and storage portfolio. In short, it will unify key clouding needs into one place for companies. The company expects this to grow its recurring revenue base, offering a more stable revenue stream that may see less volatility. Solid growth: Here’s one thing to remember: Cisco is not a high-flying company. It’s a blue-chip company with steady revenue growth. The main attraction is its shareholder returns. (More on this later.) Still, its revenue is super solid. Cisco just delivered a record revenue for the recent quarter, with double-digit increases across all customer markets. It also posted a record operating cash flow of $6 billion for the quarter. Shareholder returns: Cisco takes good care of its shareholders. In the fourth quarter alone (based on its unique fiscal year), it bought back $1.254 billion in shares. Total share repurchases for FY 2023 was $4.27 billion – or about 2% of its market cap. Its dividend yield is at 2.90% -- an above average yield for blue-chip companies. Cisco increased its dividend for 11 straight years, so it is an attractive stock for a buy-and-hold investor. All in all, Cisco returned about $10.57 billion in value to its shareholders via cash dividends and stock repurchases. That’s about 5% of its current market cap. Executive compensations: One cool thing about Cisco is its executive compensation structure. Believe it or not, the CEO and NEOs only earn 6% of their compensations in base salary. The rest is based on performance. Nearly half will be rewarded in equity, so Cisco executives will be motivated to increase the company’s value through share prices. (Source: Cisco) Bottom line: Cisco is a perfect stock during a bear market. Its P/E is only 17.5, so you get a blue-chip company with an above-average dividend yield. You can expect the company to continue returning 10%+ annually. This defends you against any bear market drops.   [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.