The Three Most Important Words of the Week: Consumer Price Index

Here’s where to invest now… [TradeSmith Daily]( The Three Most Important Words of the Week: Consumer Price Index It’s estimated that the average person processes 100,000 words every day, but the three most important words for investors to pay attention to this week were Consumer Price Index (CPI). This is one of the key data points that the Federal Reserve follows to determine whether it will continue to hike interest rates. CNBC shared the expectations before the numbers were released: The consumer price index is expected to have risen by 0.4% in February, or at a 6% annual pace, according to Dow Jones. That’s compared to increases of 0.5% and 6.4%, respectively, in January. Tuesday’s report of CPI has been much anticipated. Some market pros last week had even expected that the Federal Reserve could increase the magnitude of its rate hiking to 50 basis points if the number was hot. But the failure of Silicon Valley Bank and market worries about contagion have made a quarter-point hike more likely, though some economists expect no increase at all. The CPI update was revealed at 8:30 a.m. yesterday. RECOMMENDED LINK [“An AI that can make you rich?”]( One AI lawyer can now service 253 clients in a day... One college student can now replace several coding engineers with AI... And for retirees, this new era of technology may have given them the best chance to catch up on their retirement goals. [Click here now to see how]( Here’s what happened. The CPI rose 6% year-over-year (YoY), which was in line with expectations. Food inflation remains hot, down from January but still up 9.5% YoY. Energy is also down since January and reported a 5.2% increase YoY. We’ll still have to wait until next week to see what the Fed decides to do with this information, but the CME FedWatch Tool placed the probability of a quarter-point hike at 79% on Tuesday, up from 65% on Monday. That probability is on the higher side, but it still leaves a little room for uncertainty. But what’s important to understand is that even though inflation is “cooling,” it is still high, and Senior Analyst Mike Burnick made noted in February that he didn’t have much faith in the Fed getting things under control. When one of our readers asked if I had confidence that the Federal Reserve would get inflation under control heading into 2023, my answer was a direct “No.” The Fed is largely staffed with academics and economists who have never run a real business a day in their lives, much less invested money for clients. There are exceptions, but by and large, most of the Fed folks seem out of touch with the financial markets. I’m sure they mean well, but the majority simply don’t have the investment cred. Fair enough. So, the question becomes, how do you need to invest when inflation may have peaked but is still high? Here’s more from Mike: Part of being a savvy investor in this whipsaw market involves owning inflation-resistant stocks that give you income in the here and now through dividend payouts. By generating income and owning the companies that will be rewarded for their sound financial performances, you are better equipped to keep up with the high prices for goods and services — and less likely to see your hard-earned money dwindle away. Companies with great brands can handle higher costs because they can pass those costs on to consumers; people are willing to pay those higher prices because they won’t trade off or trade down for another brand. One of those companies is J.M. Smucker Co. (SJM), which is considered a “buy” in our Green Zone. It produces the Jif peanut butter and Smucker’s strawberry jam for the PB&Js in the lunchboxes of schoolchildren across the country. Its Folgers Coffee has an estimated 35 million drinkers, filling up their coffee cups to start the day or their travel mugs to power through the night shift. And its Milk-Bone biscuits are the treat of choice for many a beloved dog. It currently pays out a dividend of $4.08 — a yield of 2.75% — and was recently crowned a [Dividend Aristocrat](. RECOMMENDED LINK [Sell? Hold? Buy? 4-Digit “Cash Out Codes” can help you decide]( Thanks to the discovery of a 4-digit code assigned to every publicly traded stock, these “Cash Out Codes” can help you decide what stocks you should sell, continue to hold, or buy more of. Proven in thousands of back tests, Cash Out Codes could have gotten investors out before major corrections. In fact, they warned of an imminent downturn for many stocks on February 27, 2020 – just before the Covid-19 crash. [Scan your stocks to clean out losers today and know which could rake in returns in this market](. Another company in the Green Zone that has great brands and pays its shareholders a dividend is Anheuser-Busch Inbev (BUD). BUD triggered an Entry Signal near the start of the year on Jan. 11. All across the world, at any moment of the day, people are drinking Inbev products in bars, adding them to their shopping carts while getting groceries, or buying them in a nearby liquor store. In addition to Bud Light and Budweiser, Inbev brews over 500 beers, such as: - Beck’s - Corona - Hoegaarden - Michelob Ultra - Modelo - Stella Artois As of 2020, Inbev dominated the global beer market, with Bud Light, Corona, and Michelob Ultra as the three top-selling beers. However, the company is not hanging its hat on just its traditional beer lineup. It’s expanding into other categories, like nonalcoholic beer and spritzers. There are things people will trade down for — like a cheaper laundry detergent brand — but most folks aren’t going to give up their favorite alcoholic beverage. If BUD has to pay higher costs for cans and ingredients, Budweiser and Bud Light loyalists are less likely to trade off or trade down for different options; they want their favorite beer and will be willing to pay that little bit extra. BUD currently pays out a dividend of $0.79, which is a yield of 1.32%. The Fed will meet next week on March 21 and March 22. As always, we’ll be in your corner to help you make sense of what’s happening and what to do. Take care, Team TradeSmith An era where humans and AI work together to achieve inhuman feats is upon us, and here’s the truth… Those who can’t keep up will get left behind. And that includes investors. There will be a lot of money made in AI stocks, and those who know how to tap into the power of trading systems with AI-like reflexes can make even more money because they are putting smart trading tools to work for them. Luckily, our team just interviewed one former Wall Street insider who called the bottom of the 2020 crash. And he says he’s coming forward with a new solution. A solution that’s pinpointed 98 triple-digit winners in one model portfolio even in the middle of the worst bear market since the Great Recession. [Click here now to get the full story.]( [Download now on the Apple Store]( [Get It On Google Play]( More Investable Information at Your Fingertips [TradeSmith’s 2023 Guide to Beating Inflation]( [Bitcoin Is Far from Dead (Here’s Proof)]( [This Could Be the Amazon of Gene-Editing Stocks]( [Electric Vehicles Passed This 5% Tipping Point – Here Are 2 Investments to Make]( [Customer Support: 866.385.2076](tel:+866-385-2076) | support@tradesmith.com [Mailbag Questions](mailto:Keith@TradeSmithDaily.com) ©TradeSmith, LLC. All Rights Reserved. You may not reproduce, modify, copy, sell, publish, distribute, display or otherwise use any portion of the content without the prior written consent of TradeSmith. TradeSmith is not registered as an investment adviser and operates under the publishers’ exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith’s content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results. TradeSmith P.O. Box 340087 Tampa, FL 33694 [Terms of Use]( [Privacy Policy]( To unsubscribe or change your email preferences, please [click here](. [tradesmith logo]