“Economic Warnings”

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JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, “Economic Warnings” The excitement evaporated on Wall Street after unemployment claims hit an almost one-year high and manufacturing activity fell the most in eight months. Traders felt that the Federal Reserve should have cut interest rates this week to arrest the economic slowdown before it gets out of control, especially when unemployment is now close to triggering a recession indicator based on the “Sahm rule.” (Source: TD Securities) - “The labor market has been flashing warning signals over the past several months,” said Chris Senyek at Wolfe Research. “History suggests Powell is walking a very fine line on potentially waiting too long to start cutting rates before it’s too late.” This changes the perception of the upcoming rate cut. Rather than viewing a rate cut as a stimulation for economic activity, Wall Street is now worried that it will be a reaction to an economic slowdown. - “There is a scenario where a rate cut would be viewed negatively for stocks and that is if the rate cut is coupled with the Federal Reserve voicing concern about the economy,” said George Ball at Sanders Morris. “While that is not a likely scenario, it is not altogether implausible.” So, more and more analysts worry that the Federal Reserve might be late in cutting rates to save the economy from tipping into a recession. In other words, the market isn’t trying to decide if a September rate cut would occur. It is virtually guaranteed. The question turns to how many rate cuts the Fed will make before the year ends. Traders are now speculating that there will be three rate cuts this year. - “The economic data keep rolling on in the direction of a downturn if not recession this morning,” said Chris Rupkey, chief economist at FWDBONDS. “The stock market doesn’t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.” (Source: Bloomberg) Amazon’s profit outlook missed analysts’ estimates, as the company scaled up its AI spending. It expects operating income to be $11.5 billion to $15 billion, while Wall Street projected $15.7 billion. The sales outlook was also disappointing. Apple reported a good quarter, but its sales fell more than expected in China. The iPhone maker is struggling in China due to the government’s iPhone bans, rising competition, and a slowing economy. However, Apple said most of the decline was due to a strong dollar. Intel and Snap issued poor outlooks that led to a massive plunge in their share prices. Intel fell about 19% while Snap did a little bit better with a ~18% decline. This Logistics SaaS Stock Takes Away Massive Headaches From Fortune 500 Companies Today’s Stock Pick: The Descartes Systems Group Inc (DSGX) You know that global supply chain is a mess when your friends (who are not well-versed in business) start talking about it. Supply chain is like being a referee. The biggest compliment for any referee is not getting noticed. That means you are doing a good job. Indeed, if supply chain is running smoothly, ordinary consumers wouldn’t notice it nor even know what the term means. Hence the importance for Descartes Systems. It is the global leader in providing a SaaS platform focused on improving the productivity, performance and security of logistics-intensive businesses. And it is more valuable than ever. (Source: Descartes) Supply chains are constantly changing nowadays, as geopolitical conflicts have escalated in the last few years. For exmaple, Russia’s invasion of Ukraine complicated the supply system. For example, cargo planes cannot fly near Russian skies. This is harming air cargo capacity. Logistics firms including FedEx, DHL, and EPS suspended shipments to the country. Ships cannot also sail in the Black Sea amid the invasion. Therefore, supply chain must adapt to new routes. Descartes’ solutions offer real-time visibility in the space. And there are sanctions, too. These changed shipping logistics, and companies must react quickly to keep products flowing. As the CEO said in an earnings call: - “Goods moving from point A to point B will pass numerous international borders attract a bunch of paperwork for security and customs filings, be charged, multiple taxes, travel through multiple modes of transportation and touch multiple parties to get to their destination. And this complexity changes depending on what particular commodity or item you're shipping doesn't need special handling, refrigeration, does it attract a particular regulatory scrutiny?” Boy, doesn’t it sound a headache?! It is simply not practical for any company to handle all these logistics headaches in-house and still be successful in its own business. Situations are always changing rapidly. That’s where Descartes specializes in. It takes away all the headaches from clients and make logistics easy for them. The CEO also articulated it beautifully: - “Rather than you connecting to thousands of trading partners, you could connect to us once and we'll use our network to connect to the trading partners. Rather than stay up to date on every tariff for every country, for every commodity in the world subscribed to our service and let us handle that complexity. If you're moving shipments through multiple trucking companies and using various brokers, use our real-time visibility to connect to all these parties to track your shipment.” That’s just one of many benefits Descartes offer to its customers. Not a fluke: Descartes has been one of the steadiest growers in the stock market. Believe it or not, it never failed to grow revenue each quarter all the way back to 2009: (Source: MacroTrends) Growth through acquisitions: Descartes’ acquisition strategy is the driver behind its “Total Growth” model, completing 28 acquisitions since 2016. These totaled about $1.1 billion – or 12.5% of its total market cap. (Source: Descartes) When a company has mastered its acquisition strategy, growth becomes easier. You can either go for organic growth or acquisitions – depending on what is the best option at a given time. And clearly, Descartes has proven its ability after looking at its incredible history of revenue growth. Bottom line: Descartes is in the right niche because it solves such an enormous pain point for customers. It takes complexity of international logistics away and make it easy for companies. And its clients are 800-pound gorillas – DHL, Delta, Home Depot, Best Buy, UPS, FedEx, Coca-Cola, Toyota, and many more. So, you can safely buy this stock and hold for a decade. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](