Powell: No Rate Cut in March

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JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Powell: No Rate Cut in March Wall Street’s dream of a rate cut in March was squashed yesterday when Fed Chair Jerome Powell appeared in the press conference after the central bank’s two-day FOMC meeting and said that the Fed is likely to skip cutting rates in March. - “I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March is the time to do that,” said Powell. Powell insisted that the current data is very good. The central bank isn’t looking for “better” data. But they need to see more of good data before feeling confident that inflation will fall to the 2% level sustainably. - The central bank “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” said Jerome Powell. Fed Chair Jerome Powell (Photo: AP) As a result, Wall Street accepts the fate that a rate cut in March is basically off the table. - “If stock bulls expected a rate cut in March, Powell seems to have closed the door on that,” said Oscar Munoz at TD Securities. The central bank has no reason to rush to cut rates because the economy is still growing. The unemployment rate is under 4% for the second straight year. Why risk re-accelerating inflation if they cut rates too soon? So, the central bank is likely to play conservative until something changes. - “With steady economic growth, it is expected that policymakers will wait for more evidence of a sustained downtrend in inflation before making any changes. For investors, now is the time to secure attractive yields on high-quality bonds to earn attractive income and position for rate relief as central bank policy rates look set to end the year lower for the first time in two years,” said Chris Zaccarelli at Independent Advisor Alliance. Regional banks see trouble again: New York Community Bancorp plummeted by as much as 46%, pulling down the SPDR S&P Regional Banking ETF by as much as 5.6%. What’s that bank? Well, it was the same bank that took over the failed Signature Bank last spring. And it reported an adjusted 4th quarter loss of $193 million, took a $552 million provision for credit losses and cut the quarterly dividend by 70%. The bank holds lots of troubled commercial real estate loans, so it had to hold cash due to lending risks. What’s more, the bank is much bigger now. It needs to conserve cash to meet tougher capital requirements as the bank grows. The bank exploded in size in the last 18 months through two acquisitions and saw its total assets ballooning above the $100 billion threshold that triggers more regulatory requirements. At the same time, it wants to prepare for potential losses in the office and multifamily property sectors. The amount of the bank’s loans that were 30 to 89 days past due surged by 48% in the fourth quarter. Piper Sandler’s Mark Fitzgibbon isn’t too concerned about it: - “All of the things they did kind of make sense and are probably good over the long term — but in the short term, the Street doesn’t like surprises,” said Piper Sandler Cos. analyst Mark Fitzgibbon. - “They’ve ripped the Band-Aid off. I think they’re now healing, and I don’t think the problems get worse from here.” Today, we will get earnings reports from Apple, Amazon and Meta. Investors need these Big Tech companies to deliver strong earnings guidance to justify higher valuations. And we will also get the jobs report and the University of Michigan consumer sentiment on Friday. Continuous Improvement Makes This Stock A Sure-Fire Buy Today’s Pick: Teledyne Technologies Inc. ([TDY]( Jeff Bezos always preached “Day One” to his team at Amazon because of his fear of stagnation that put many companies out of business. - "Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1," writes Jeff Bezos in his 2016’s Letter to Shareholders. And Teledyne Technologies makes a wonderful case study of a company who has a proven history of pivoting to adapt to the fast-changing times. Over two decades, Teledyne had three different segments that grew into a big business: (Source: Teledyne) Right now, Digital Imaging has become the juggernaut for Teledyne. Their imaging technology is amazing. For example, Teledyne products power 90% of the world’s radiotherapy systems, enabling precise radiation therapy to treat and defeat malignant cancer. And we could write a long essay on the applications of Teledyne’s technologies because they’re found in dozens of industries: - Water and air quality, toxic gas detection, hurricane forecasting, earth observation from space, transportation safety, infrastructure inspection, national security, scientific research, clinical therapies and public health. Markets like infrared imaging and radiotherapy aren’t easy to enter. Teledyne’s core markets are “characterized by high barriers to entry and include specialized products and services not likely to be commoditized,” said Teledyne’s official website. Because they possess capital and expertise in fields few competitors can enter, they have serious pricing power. Teledyne has been a wonderful business for more than two decades with its EPS seeing 23.7% CAGR since 2001: (Source: Teledyne) Don’t let its long history of growth make you feel like you may be too late. Teledyne has a lot more growth to go as it doesn’t rely primarily on organic growth to drive consistent growth in earnings. They’ve shown a remarkable competency in making acquisitions, completing a whopping 64 deals from 2000 to 2021. What’s more, the single best proof of the management’s competence is its continuous improvement in nearly every important margins: (Source: Teledyne) As a result, Teledyne has returned more than 17% CAGR since its IPO in 1999. That’s a track record of 20+ years! That’s the power of a compounding machine that can add up to an enormous number over the years. Conclusion: All indications point to another phenomenal decade for Teledyne with its track record of finding earnings growth. Teledyne looks like a safe bet to be among the top stocks to own for the next five years.   [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](     © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](