Market Talk
So this is the week the Fed meets to decide and announce the long awaited interest rate cut . The "market' ponders if the Fed will reduce by 25 or 50 basis points to start an expected series of rate cuts to stimulate a slowing economy. On one hand, a conservative approach would be a 25 basis point cut where a 50 basis point cut would be recognition that the economy is in more need of a kick start to avoid a recession. Last week the polls had a 25 in the lead, this week- the trend view is a 50 point cut. The 50 would favor the housing market that needs a boost. The whole idea of why it matters is that the Fed's goal of managing inflation while trying to keep positive employment numbers is called the "soft landing" from a hot inflationary economy.
To put it in terms of a deck of cards, there are several wildcards and Jokers in the deck. Taxes, debt, and spending for political purposes can spin outcomes. And one thing- stagflation is not off the table of the future.
The remaining of this September is hard to predict market action. Falling interest rates can be good for some stocks. It is possible that a scenario could be positive for some tech stocks. At the same time, as fed rates go lower, certain financial instruments that have been paying good interest rates may become less attractive. A few stocks that pay higher dividends than prevailing institution rates makes one ponder if such a stock may catch buy side interest. On the other hand it can be a volatile and changing market in an election year. Is this confusing? Let's look at some stock notions.
Stock Talk
Altria Group, Inc (MO) : MO already has one of the highest paying dividends in the entire market. MO has been consistently increasing their dividend to shareholders year after year. With the Fed signaling lowering interest rates in September - MO continues to be a stock to watch. After shareholders get their dividends some bail. It went ex dividend yesterday. On the other hand, the Fed is cutting rates this week, making high dividend stock like MO look better to be in some. Watching MO for a dip may be opportunity to inch into one of the highest dividend paying stocks with positive eps.
The analysts compare estimates vs actual and rate stocks. MO has shown consistent earnings, but if they miss by a just a few pennies, the market gets skittish. The last quarter MO missed by a few cents but actually showed very good $1.31 eps, the same as last year. When the daytrader's knee jerked sold - the dip created a buy opportunity in the high 40's. Watch MO for "buy some" opportunities if interested in one of the highest dividend paying stocks in the market.
Kinross Gold (KGC):
The fiat currencies in the US and the world are being devalued by
increasing money supply and inflation. Gold has NOW recently passed the
stubborn $2600 / Oz level. Kinross Gold has been highlighted here
showing the mining footprint that spans Canada and the Americas.
Suggested in the 6's, the current times of loose fiscal policy to buy
votes point to staying the course with Kinross because support and a
next level run on surging Gold, along with a stable dividend makes KGC a
relatively solid stock to hold some. I'm staying / holding some stock
in Kinross. May add more KGC on market dips. The BRICS moves towards a digital currency could seriously threaten the US dollar. Gold could easily double and more in the not too distant future and a Gold miner like Kinross with already growing eps and dividend could earn reward in share price.
https://stockstowatch.blogspot.com/2024/04/
https://finance.yahoo.com/news/why-kinross-gold-corporation-kgc-215737497.html
IAMGOLD (IAG):
Another stock to keep an eye on is IAG with trending higher earnings,
similar to Kinross. However, IAG offers no dividend and is about $5 at a
recent high. Keep an eye on the gold prices over the next month
because IAG earnings as well as KGC could surge if Gold starts climbing
higher as predicted by many economic pundits.
Oil Patch view: Highlighted here before, Devon Energy (DVN) beat earnings estimates last report. But, oil prices are somewhat fading along with oil patch stocks. China's energy demand has been decreasing due to a slowdown. The oil patch sector can be volatile and is sensitive to economic outlook. Moved to the sidelines on oil stocks. But some may present a buy opportunity as the swoon winds down.
A Tech stock to consider: Palantir Technoligies (PLTR)
This tech stock is in the news as a leading AI company that is embedding their predictive and planning AI software into government computers. Their software has been helping the Ukraine. It is starting to gain traction into industry and from watching company leaders, PLTR is very American in support of liberty and freedom and helping defense from our adversaries and enemies. The company has positive earnings, albeit a small eps of 0.17 and a PE of 216 -so far. PLTR presents as a leading growth stock in the AI sector to possibly start inching into with "some" shares as it joins the S&P 500.
If interested in other current watch stocks recently opined on here, scroll back to see posts on other stocks we are watching.
For now, we close by noting that any view on the market and stocks on any particular day may change in the future days to come. That is why we watch and see how our views match up with the reality of the time. But trying to look ahead a few months into the future may be a way to do things. If you think too deep about world events and the recent alliances forming, projecting ahead can be a dicey endeavor. In all - we use the word maybe "some", not "too much" and play it accordingly. Remember, never get arrogant in our various notions because things do change in the market and individual stocks are subject to many factors outside of our control.. So we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
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