Time to press the panic button?

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Time to press the panic button? The day after a steep drop, Wall Street was modestly bearish yesterday. The JOLTS, a reading on job openings, came in below estimates and hit the lowest level since 2021. Traders were already nervous about a cooldown in the labor market, so this reading didn’t help to soothe the anxiety. However, traders aren’t ready to react too much until this Friday’s jobs report. - “The markets may not be as nervous as they were a month ago, but they’re still looking for confirmation the economy isn’t cooling off too much,” said Chris Larkin at E*Trade from Morgan Stanley. - “So far this week, they haven’t gotten it.” Right now, Wall Street is divided between a 25 or a 50 basis point cut during this month’s FOMC meeting. Neil Dutta at Renaissance Macro Research argued that the Federal Reserve should go for a jumbo-sized cut. Why? Consider this scenario. The Federal Reserve chooses to cut 25 basis points. The labor market continues to cool down in the next few readings. Naturally, traders would panic that the Fed is “behind the curve.” So, it is better to cut by 50 basis points now to get ahead of the curve. - “I think going 25 bp risks the same market dynamic as skipping the July meeting. It’ll be fine until the next data point makes investors second guess the decision, fueling bets the Fed is behind the curve. Go 50 when you can, not when you must,” said Neil Dutta at Renaissance Macro Research. Speaking of the job openings report, Krishna Guha at Evercore thought it was “on the soft side” and wasn’t too worried about a severe downturn in the labor market. At the same time, it might make it more likely for the Fed to go for a 50 basis point cut if this Friday’s jobs report showed a slight cooldown. - “The still low level of layoffs and tick up in hires suggests the labor market is not cracking,” said Guha. “On net, we think JOLTS nudges down the bar for what the employment report Friday would need to deliver in order for the Fed to cut 50bp out the gates in September, though not radically.” As another economic reading, Dollar Tree offered an insight into the health of consumer spending. Its brand name caters to suburban middle- and higher-income consumers who shopped at the store for party favors and Halloween decorations. Now, its Family Dollar brand focuses on low-income households shopping for necessities. In the last few quarters, Dollar Tree’s YoY same-store sales held up while Family Dollar worsened. However, even middle- and higher-income consumers are pulling back in the last two quarters. (Source: WSJ) After reporting its results yesterday, Dollar Tree’s shares plummeted 19% on worse-than-expected results. Chief Operating Officer Mike Creedon said the company is “navigating through one of the most challenging macro environments” it has seen. - “People have maybe changed how they celebrate a party this summer. Fewer guests, fewer parties,” Chief Operating Officer Mike Creedon said. Hence the reason why Friday’s jobs report will be a high-stake one. Recession jitters are back in full force. A poor reading may lead to a risk-off sentiment. A Rare Combo of Growth + High Dividend Yield Today’s Stock Pick: Credicorp (BAP) Mobile phones have led to a huge disruption in the banking industry. The reason is simple — developing countries don’t have same access to physical bank branches like the USA. Their salaries are modest, so transportation costs can be too costly to go to a bank branch. Naturally, they prefer mobile wallets where they can keep money on their smartphones — rather than going to physical branches. So, fintechs are reimagining how the banking industry should look like. Credicoup is one of those distruptors. It is a financial services group with dominant market share in Peru, along with a presence in Colombia, Chile, and Bolivia. Its largest subsidiary is Banco de Crédito del Perú. It also offers pension funds and insurance solutions. It has the #1 market position in Peru for universal banking, microfinance, and investment management & advisory. It is second in insurance and pensions. (Source: Credicorp) Yes, these countries are known for volatile financial and political conditions. Credicorp has a proven track record of navigating through difficult periods like Covid, 5 regime changes at the Presidential office in a 3-year period, and El Nino disaster. (Source: Credicorp) What’s more, it has demonstrated attractive returns throughout the years. Its Return on Equity was 17% in 2019, and the company projected a ~18% ROE in 2025. Efficiency is below 50%. And best of all, it projects digital sales to account for 70% of its sales. Meaning? The bank is virtually future-proof. (Source: Credicorp) The bank simply refuses to be distrupted by other fintech startups. It prides in trying to disrupting its own business before someone else does. The company has developed innovative products for payments, neobank model, acquiring/SME services, insurtech, and wealth tech. (Source: Credicorp) The growth runaway looks long. Peru has 2.8x lower than Brazil for the percentage of cashless/GDP. (Source: Credicorp) Good enough, Credicorp was able to grow even when Peru’s GDP growth slowed. It showed that the company grew because the market was strong, rather than being reliant on the economic growth. (Source: Credicorp) We’ve discussed how the market looks ripe for Credicorp to keep growing in the next few years. But you don’t have to gamble on the growth too much. Why? The stock is yielding 5.21% in dividends. So, the stock offers a rare combo of growth and high dividend yield. Bottom line: More and more developing countries adopt fintech solutions. Credicorp has seized the opportunity to become the market leader in Peru. It has other regions to grow its market share. While investors may enjoy the upside in sales growth, it can also enjoy a 5.21% dividend yield. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](