Wall Street’s new focus on Middle East?

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JOIN OUR FREE LIVE TRADING SESSION!](~/AASl5QA~/RgRnmmIxP0TNaHR0cHM6Ly9nZXQudHJhZGVhbGdvbWFpbC5jb20vd2ViaW5hci10cmFkZS1hbGdvLWxpdmUtc2Vhc29uLTgtZGVtaW8vP3V0bV9zb3VyY2U9R21haWwmdXRtX2NhbXBhaWduPURhaWx5QnVsbGV0aW4mdXRtX2lkPVByb21vVG9wJl9reD1pYVYza0NETWIxd19ycmVhSWNtWXpVakFpUGNSck1aTWtwRWVMdWIwa2FvUWVRVU4wb2E1dXMwMVJsNXFENkRjLlk5aUROWlcDc3BjQgplsTHdt2UrYWrSUht0cmlzdHJhbWJhbGR3aW44N0BnbWFpbC5jb21YBAAQOCM~) Hello investor, Wall Street’s new focus on Middle East? Wall Street’s attention may shift to Middle East briefly after Iranian-backed militants killed three U.S. soldiers on Sunday. President Joe Biden has vowed to retaliate which has a potential to escalate the conflict. However, Big Tech earnings and the Federal Reserve’s FOMC meeting will likely take the spotlight this week. The central bank is expected to leave rates unchanged, but investors will try to gauge Fed Chair Jerome Powell’s current sentiment on rate cuts. - “The news of three US troops being killed by a drone attack, and President Biden saying ‘we shall respond,” will likely dial up the market’s focus on the region,” said Andrew Ticehurst, a rates strategist at Nomura Inc. - “Still, I’d expect data and central bank meetings to dominate a busy week for markets, with China PMI, the FOMC and BOE gatherings and US payrolls among the highlights.” Andrew Ticehurst, a rates strategist at Nomura Inc. (Photo: Bloomberg) Miles Workman at ANZ Bank expects the Fed to insist on being patient. The recent GDP growth was strong, and there is a risk of inflation reaccelerating. The central bank doesn’t want to start cutting rates and see inflation reaccelerating. That would be a disaster. - “We think the Fed is likely to reiterate its data-dependent stance and caution that it is willing to exercise patience,” analysts at ANZ Bank Ltd., including Miles Workman, wrote in a report. “The Fed will be cautious about any reacceleration of inflation pressures from above-trend growth and the resilient labor market.” This will be a busy earnings week with 19% of the S&P 500 reporting results – including Microsoft, Apple, Meta, Amazon and Alphabet. Big Tech companies have pushed the market up due to their earnings power. Wall Street expects them to deliver strong guidance if the rally were to hold, so their results are likely to have an outsized impact on the market’s future direction. Top Blue-Chip Stock To Collect 10%+ Annual Return During The Bear Market Today’s Stock Pick: Cisco Systems, Inc ([CSCO](~/AASl5QA~/RgRnmmIxP0R4aHR0cHM6Ly9kYXNoYm9hcmQudHJhZGVhbGdvLmNvbS9jb21wYW55L0NTQ08_X2t4PWlhVjNrQ0RNYjF3X3JyZWFJY21ZelVqQWlQY1JyTVpNa3BFZUx1YjBrYW9RZVFVTjBvYTV1czAxUmw1cUQ2RGMuWTlpRE5aVwNzcGNCCmWxMd23ZSthatJSG3RyaXN0cmFtYmFsZHdpbjg3QGdtYWlsLmNvbVgEABA4Iw~~)) Need a low-risk pick that delivers consistent shareholder returns, but also participate in megatrends like cloud, IoT, 5G, and security? Cisco is your perfect stock. It offers the infrastructure that makes these megatrends possible. Cisco’s switches, routers, and wireless access points make high-speed WiFi possible. Its firewalls and VPNs protect businesses from bad actors. The cloud offerings make it easy for businesses to operate primarily in the cloud. And finally, its hybrid work products offer phone systems and virtual meetings. As a result, these megatrends will be a powerful tailwind that can carry Cisco for the next decade. - “There are currently more technology transitions occurring concurrently than I've seen in 20 years. Long-term megatrends like hybrid cloud, hybrid work, security, IoT, 400-gig and beyond, 5G, and WiFi 6, as well as the move toward application observability, will likely provide tailwinds to our growth,” said CEO Chuck Robbins. (Source: Cisco) Cisco just released a new networking-as-a-service (NaaS) called Cisco Plus, which combines its data center compute, networking, and storage portfolio. In short, it will unify key clouding needs into one place for companies. The company expects this to grow its recurring revenue base, offering a more stable revenue stream that may see less volatility. Solid growth: Here’s one thing to remember: Cisco is not a high-flying company. It’s a blue-chip company with steady revenue growth. The main attraction is its shareholder returns. Still, its revenue is super solid. Cisco just delivered a record revenue for the recent quarter, with double-digit increases across all customer markets. It also posted a record operating cash flow of $6 billion for the quarter. Shareholder returns: Cisco takes good care of its shareholders. In the fourth quarter alone (based on its unique fiscal year), it bought back $1.252 billion in shares. Total share repurchases for FY 2023 was $4.27 billion – or about 2% of its market cap. Its dividend yield is at 2.99% -- an above average yield for blue-chip companies. Cisco increased its dividend for 11 straight years, so it is an attractive stock for a buy-and-hold investor. All in all, Cisco returned about $10.57 billion in value to its shareholders via cash dividends and stock repurchases. That’s about 5% of its current market cap. Executive compensations: One cool thing about Cisco is its executive compensation structure. Believe it or not, the CEO and NEOs only earn 6% of their compensations in base salary. The rest is based on performance. Nearly half will be rewarded in equity, so Cisco executives will be motivated to increase the company’s value through share prices. (Source: Cisco) Bottom line: Cisco is a perfect stock during a bear market. Its P/E is only 15.7, so you get a blue-chip company with an above-average dividend yield. You can expect the company to continue returning 10%+ annually. EARN WHILE YOU LEARN! 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