Higher yields = bad for stocks?

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Higher yields = bad for stocks? Stocks couldn’t shake off higher yields yesterday. 10-year Treasury yield jumped above the important 4.6% level — the highest point since mid-November. The conflict in the Middle East dominated the anxiety on Wall Street because of its implications for the energy market. At first, the market was hoping that Israel wouldn’t strike back after the flurry of attacks launched by Iran over the weekend. However, Israeli Defense Minister Yoav Gallant said Israel has no choice but to avenge. If so, it will likely raise the risk of an escalation in the Middle East conflict. Adding to the case of a higher yield, retail sales came in red-hot with a 0.7% gain in March. It blew away the expectations of just 0.3%. This increased the odds that the Federal Reserve will leave rates elevated for a while. The impact of higher oil prices can be felt in higher retail sales, as consumers spent more on gas in March. So, it is likely to push inflation higher in the next reading since last year enjoyed lower energy prices. - “Historically, geopolitical shocks cause short-term volatility, not long-term market declines,” said Emily Bowersock Hill, CEO of Bowersock Capital Partners. “In this current environment, however, the risk of an extended period of volatility is higher, given the inflationary oil price shocks that may emanate from the heightened tensions in the Middle East.” Emily Bowersock Hill, CEO of Bowersock Capital Partners (Photo: CNBC) As for earnings, Goldman Sachs beat expectations on top and bottom lines, leading the stock to rally by about 3%. This hints at the strength of corporate earnings. The earnings season could be solid, but it also comes with the risk of rising inflation. Higher inflation may keep rates higher, of course. That’s the trade-off that traders are stuck with. - “The markets have been buoyed by strong corporate profits and the elixir of lower rates, but it seems like those two things are increasingly at odds with each other, so we would exercise some caution in the near term,” said Chris Zaccarelli at Independent Advisor Alliance. Tesla’s major layoff: Elon Musk sent a memo to Tesla’s employees that announced a major layoff of more than 10% of its global workforce. The announcement came as Tesla experienced a slowing growth as the electric vehicle industry saw intense competition — especially from Chinese automakers. - “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk said in the memo. Musk said these new factories created “duplication of roles and job functions in certain areas,” so the company wants to cut them before starting the next phase of growth. - “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally.” There were multiple clues that Tesla is struggling with demand. It offered steep discounts to entice buyers, cut the price for its premium driver assistance system (Full Self-Driving), and operating margin dropped to 8.2% in the fourth quarter — versus 16% a year earlier. Elon Musk (Photo: REUTERS) Love Triple-Digit Revenue Growth? Buy This Stock Today’s Stock Pick: TransMedics Group (TMDX) The company solves a huge pain point in organ transplants. The procedure is life-critical where every second counts. Organs need to be removed from the donor and placed in recipients, but there’s a problem with this procedure — Donors come from all over the country. About 80% of donor volume came from 20 states, while about 80% of transplants occurs within 9 states. (Source: TransMedics) So, organs must be delivered around the country with great care. Speed is also critical. TransMedics solves this problem by offering an end-to-end solution for organs. It developed an FDA-approved machine that can store lung, heart and liver. It is the only FDA-approved multi-organ technology platform in the country. (Source: TransMedics) The platform was found to offer the highest utilization with great clinical outcomes. For example, its liver outcomes had a 2x rate of DCD donor liver utilization and saw a 43% reduction in severe post-transplant complications. Clinical outcomes for lung and heart also saw positive results. (Source: TransMedics) Now for its next value proposition. Logistics always have been a headache for the industry. Organs get lost. Travel times are long and expensive. Many vendors don’t own jets, so they rely on brokers that don’t offer around-the-clock availability. (Source: TransMedics) Enter TransMedics Aviation. The company built its own fleet of modern jets and pilot crew that are dedicated to transporting organs. Meaning? Jets are more available and ready to be deployed as soon as organs need to be transported. (Source: TransMedics) And it even has its own logistics command center to handle all the deliveries around the country. (Source: TransMedics) All of this reduces the fixed cost and increases the speed of transporting organs. This is a competitive advantage that will be difficult for competitors to mimic. It costs money to build out a fleet of jets and hire pilots. And of course, it also costs money to manage logistics. The reception has been wildly positive. The company saw 8 straight quarterly revenue growth, and its annual revenue skyrocketed from $30 million in FY21 to $241.6 million in FY23. (Source: TransMedics) TransMedics is easily one of the fastest-growing companies in the stock market. It offers mission-critical services that are difficult to clone. This is a stock to buy and hold for years. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](