Labor Market Is The New Focus on Wall Street

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Labor Market Is The New Focus on Wall Street Fed Reserve Jerome Powell said the central bank is becoming worried about potential risks to the labor market due to higher interest rates. For example, the unemployment rate rose for the third straight month in its recent data published on July 5th. - “Elevated inflation is not the only risk we face,” Powell said in prepared remarks before the Senate Banking Committee. - “The latest data show that labor-market conditions have now cooled considerably from where they were two years ago—and I wouldn’t have said that until the last couple of readings,” he said. Jerome Powell (Photo: Investopedia) Powell, however, refused to provide a timeline for the first interest rate cut. The Fed insists on seeing several inflation data that showed a clear cooldown before the officials feel confident about cutting rates. Derek Tang at LH Meyer thinks that the central bank might be willing to cut rates even if disinflation stopped in order to save the labor market. - “His focus is squarely on the labor market,” said Derek Tang, an economist at LH Meyer, a policy analysis firm in Washington. “Further softening in the labor market, even if further disinflation is not delivered, is enough to spur action.” We will get a new inflation reading on Thursday. Economists expect the core CPI to rise by 0.2% in June. It’d be the smallest back-to-back gains since August, so it will only support the disinflation thesis. All in all, Wall Street will likely place less emphasis on inflation data going forward. The labor market is becoming the focus because it’d be difficult for the economy to recover from a poor labor market. In fact, Bloomberg economist Anna Wong forecasts the unemployment rate to rise to 4.5% in the fourth quarter. - “Powell’s remarks to lawmakers are rife with references to labor-market risks. The Fed now appears to be placing equal weight on the employment leg of its dual mandate — in contrast to the past two years, when it explicitly prioritized price stability. Given our forecast for the unemployment rate to climb to 4.5% in 4Q, we expect that by year-end the Fed will be prioritizing the employment leg of its mandate,” wrote Anna Wong, Bloomberg economist. Want The Safest ~4% Yield You Can Find In The Stock Market? Today’s Stock Pick: International Business Machines Corporation (IBM) Want a safe bet on the megatrend of artificial intelligence? Then IBM is your stock. Wait a minute?! IBM was founded in 1911, so we’re talking about a century-old company as a leader in A.I.? Yep, you read it right. IBM World Headquarters (Photo: KPF) IBM has been in the A.I. game for decades. Its supercomputer Deep Blue famously defeated chess champion Garry Kasparov in 1997. So, the company has a deep history of A.I. innovations that are ahead of many other companies. Watson is a popular platform to help businesses predict future occurrences, optimize tasks, and aid users with time management. Its customers include finance, healthcare and supply chain. Believe it or not, Watson already attracted 13 of the 14 top systems integrators and 70% of global banking institutions. IDC ranked IBM the number one leader for AI software platforms with a whopping ~14% market share in 2020 – or a 47% y-o-y growth. Impressive, right? Since A.I. is a megatrend, IBM is well-positioned to remain an 800-pound gorilla for another decade or so. Here’s the main thesis – IBM offers a dividend yield of 3.79%. Will the dividend yield go down? Extremely unlikely. The company had boosted its dividends for 27 straight years – excluding unusual increases during the pandemic. The current dividend is back to its regular trend. This means that your yield of a little under 4% is virtually locked in, and it will only continue to gain over the years. IBM’s TTM dividend payout since 2004 (Source: MacroTrends) A good value: Next year, analysts project a net income of $10 per share. It would represent about 17 times its current stock price of $176, making IBM a reasonable AI stock to own. (Have you seen Nvidia’s valuation?!) You would not overpay for its big dividend yield. Other businesses: IBM also offers products and services in massive markets, like hybrid cloud, digital transformation, and infrastructure. They will only continue to add cushion to IBM’s cash flow to pay out fat dividends. Bottom line: Artificial intelligence and cloud computing are the future, and IBM has its foothold in these two industries. So, it won’t “miss the turn” and fade into irrelevance. Kodak, anybody? All in all, IBM offers perhaps the safest ~4% dividend yield you can ever find anywhere in the stock market. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](