50 Basis-Point Cut Is Off The Table For Now

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, 50 Basis-Point Cut Is Off The Table For Now The Federal Reserve’s hands are tied. Wall Street just wiped out the probability of a jumbo-sized interest rate cut during the Fed’s September meeting. Why? Yesterday’s inflation reading. The core consumer price index (which excludes food and energy costs) jumped 0.3% from July — the largest gain in four months — and 3.2% from a year ago, Bureau of Labor Statistics figures showed. What’s more, the three-month annualized rate increased 2.1% from 1.6% in July. In the chart below, you can see the change in core CPI rose for two months straight. (Source: Bloomberg) So, traders reduced the probability of a 50 basis-point cut to near zero. There’s almost no scenario where the Fed could go for a 50 basis-point hike when inflation has accelerated in the last two readings. - “The firmer-than-expected core inflation print will make it harder for Jerome Powell to deliver a 50 basis-point cut in September,” said Krishna Guha at Evercore. Some Wall Street analysts argued that it is best to go for a jumbo-sized cut to get ahead of the cooling labor market. The argument has its merits. However, the data hasn’t showed enough for the Fed to be aggressive yet. - “We continue to think a starter 50 basis-point cut is the right play and might even now win out. But the odds have moved against this, and risks to markets and the soft landing are higher as a result,” Guha added. Krishna Guha at Evercore (Photo: CNBC) Guha believed the Fed might choose to go with a 50 basis-point cut during its November meeting if economic readings continue to show a cooldown. On the other hand, solid readings might be enough for the Fed to “cut at a measured, 25 basis-point per meeting pace” for the rest of the year, said said Chris Zaccarelli at Independent Advisor Alliance. - “Going forward, the risks are clearly weighted toward slowing growth and a deteriorating labor market, and that’s why there are still four 25 bps cuts priced in with only three meetings left in the year,” said Chris Zaccarelli at Independent Advisor Alliance. - “If the economy continues to slow – and not drop into an abrupt recession – the Fed will be able to cut at a measured, 25 basis-point per meeting pace.” Despite a mixed-bag inflation report, the Nasdaq soared yesterday with a 2.17% gain. Nvidia led the rally by rising 6.5%. Another inflation reading (the producer price index) and initial jobless claims will be out this morning. Skyler Weinand at Regan Capital expects the market to be calmer once we go past the first interest rate cut and the presidential election. - “While we’ve seen a slight pullback in stocks as of late with choppy earnings and economic data, we would expect more smooth sailing post this initial Fed rate cut and post-election, as uncertainty fades and investors start to price-in 2025 earnings,” said Skyler Weinand at Regan Capital. This Company’s Cash is Nearly Half of its Market Cap Today’s Stock Pick: Kornit Digital (KRNT) “Fashion is choosing on-demand.” Listen, fast fashion is the buzzword in the fashion industry. Everything moves faster nowadays. Best companies are agile. They can adapt quickly to changing trends. An influencer wearing a cool item can reach millions in a day and spark a new trend virtually overnight. Companies must adapt to meet the demand while it is hot. Kornit Digital is leading the industry with its digital printing solutions for textile and garment industry. When it was first founded in 2002, the first printers were capable of printing just 50 shirts an hour. The success was modest. Its customer bases were low-volume custom t-shirt design shops. However, Kornit has innovated printing machines. Its latest model, The Apollo, can print 400 impressions per hour with only one worker. It can print on most textiles. The gold standard is the old method of screen printing, but The Apollo can deliver products that are almost as good as screen printing. (Image: Kornit Digital) As a result, the company is seeing demand from larger retailers and branded apparel manufacturers. Now is the perfect time to jump into the stock. Kornit’s sales jumped from $66 million to $322 million in seven years (2014 to 2021). Margins grew. Expenses stayed low. As a result, the stock price soared more than 1,200% in three years from 2018 to 2021. Then printer sales struggled. 2023 sales were down by about 50% from 2021. Deservingly so, the stock price plummeted by about 90% from its high in 2021. Now, you are not going to believe this… The company is sitting on ~554 million in cash. Its market cap? $1.08 billion. That’s right. About half of its market cap is in cash! Sure enough, the company announced a $100 million share buyback program. It would be about 10% of its market cap. That would be one way to return cash to shareholders. Want a bonus? The company expects sales to increase by 20-25% in the second half. EBITDA is expected to be positive on a full-year basis. Sounds like a good time to get in, right? Kornit also adopted a new business model — “All-inclusive Click.” How it works is simple. Kornit would place a machine in a customer’s facility at no cost in exchange for minimum revenue commitments. So, it enables customers to receive quick ROI without spending upfront money on the machine. What’s more, it is working to create machines for footwear applications. A production-ready solution is expected to be available in coming quarters. Bottom line: This is a good value stock. The company is holding cash that is about half of its market cap. It expects growth to resume in the next quarter. Watch out for this stock. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](