The 'recalibration' has begun... A 50-point cut with more to come... Jerome Powell's admission... What's going on with the labor market?... The 'dark side' of a Fed cut... Last chance for in-person conference tickets...
 They went 'big'...
In what some on Wall Street were billing as "the most important Fed decision in years," the Federal Reserve announced its first interest-rate cut in more than four years this afternoon. The move was the larger of two options likely under consideration. In a press release and press conference from Fed Chair Jerome Powell following a two-day meeting of U.S. central bankers, the Fed said it was cutting its federal-funds target by 50 basis points, or half a percentage point. That brings the new range to between 4.75% and 5%. At long last, the Fed is "pivoting"... or, as Powell repeatedly said in his press conference, "recalibrating" policy toward a more "neutral stance" from the inflation-fighting posture of the past few years. It's the first monetary "juice" the Fed is sending into the economy through lower interest rates since the central bank's emergency cut to near zero in March 2020, during the onset of the pandemic. The decision also acknowledges that the Fed thinks the risks of a slowing jobs market outweigh any concerns about high inflation. The Fed made this clear in its latest round of quarterly economic projections, released this afternoon. The Fed now projects a 4.4% unemployment rate by the end of the year, up from its 4% guess just in June. (As we've noted the past few months, the real world quickly eclipsed that prediction.) The central bankers now also expect the annual headline inflation rate to be lower than previously expected – 2.3% by year-end compared with 2.6% before – but for GDP to still grow by 2%. Add it all up, and to them, that meant time to start cutting rates, and by 50 basis points compared to the 25-point choice also on the table. As Powell put it... Our primary focus had been on bringing down inflation, and appropriately so... As inflation has declined and the labor market has cooled, the upside risks to inflation have diminished and the downside risks to employment have increased. Powell also said this is just the start of a rate-cutting cycle. All 19 Fed members who wrote down economic projections expect multiple rate cuts by the end of the year, the chairman said – to a median estimate of 4.4%, or half a percentage point lower. And more cuts next year will bring the rate to 3.4%. The decision for a 50-basis-point cut was nearly unanimous, with one of the 12 voting members of the Fed, Michelle Bowman, preferring a smaller 25-basis-point reduction. That's a rare "nonconsensus" decision, at least publicly, from the Federal Open Market Committee. The knee-jerk market reaction... It was a round trip... In the moments before the Fed's 2 p.m. written announcement and statement, fed-funds futures traders had put 60% odds on a 50-point cut, and the major U.S. indexes were flat for the day. By 2:01 p.m., the Russell 2000 Index was 2% higher, the tech-heavy Nasdaq Composite Index was 1.2% higher, the S&P 500 Index was up 1%, and the Dow Jones Industrial Average had risen a little less than 1%. Those gains peeled back some in the time ahead of Powell's press conference 30 minutes later, then bounced around until near the end of his responses to reporters' questions. The S&P 500 and other major indexes finished slightly lower. Overall, the inconsistent action appeared appropriate because, as Powell spoke, the only clear thing was that the future scale of the Fed's monetary policy is essentially a toss-up. Powell said today's move starts a rate-cutting cycle, but he didn't seem convinced about anything beyond that... [We're] recalibrating our policy stance away from where we had it a year ago when inflation was high and unemployment low, to a place that's more appropriate given where we are now and where we expect to be. And that process will take place over time... We know, as I mentioned in my remarks, that the actual things that we do will depend on how the economy evolves. We can go quicker if that's appropriate. We can go slower if that's appropriate. We can pause if that's appropriate, but that's what we're contemplating. You can probably see that hanging on the Fed's every word isn't the best way to spend your time. However, tracking how the market reacts and how the economy is doing can be more helpful. After all, it wasn't long ago (at his previous press conference in July) that Powell said a 50-point cut was unlikely come September. Yet here we are... And now the questions start about what's happening next... Powell claimed the "U.S. economy is basically fine" at his press conference. Yet the Fed wouldn't lower its target rate range by 50 basis points if it didn't think the economy needed it and/or that more weakness was ahead. This concept should not be new to any Digest readers. We've seen this idea play out in the markets on recent "bad news" days, but it could take some time for the general idea to creep all over the market. Powell also faced a few direct questions about the idea that if the unemployment rate rises the way it has lately – and as the Fed projects will continue – it typically doesn't just stop quickly. Powell avoided a direct answer but said, "This bears watching" and that... You can take this as a sign of our commitment not to get behind. Yet he also not-so-accidentally, but somewhat surprisingly, offered a comment that suggests he doesn't think the labor market is in all that rough of a shape... and why the unemployment rate might be rising. In a word: immigration. Mostly. Powell said... It depends on the inflows. If you're having millions of people come into the labor force, and you're creating 100,000 jobs, you're going to see unemployment go up. It depends on what's the trend underlying volatility of people coming into the country. We understand there's been quite an influx across the borders, and that has actually been one of the things that has allowed the unemployment rate to rise. And the other is the slower hiring rate, which is also what we watch carefully. It does depend on what's happening on the supply side. We'll see how the market reacts to today's decisions and commentary in the days ahead. The 'dark side' of the Fed's move... As we mentioned earlier this week, our friends over at our corporate affiliate Chaikin Analytics have also been preparing for and will be tracking this story. In fact, Chaikin Analytics founder and Wall Street legend Marc Chaikin is debuting a brand-new free presentation on this very subject tomorrow at 8 p.m. Eastern time. We suggest you tune in. As Marc says... Unless you understand the strange shift that has already seized control of U.S. stocks, there's no rate cut or government action that can save you from massive potential losses in the next 90 days. You might recall that Marc predicted the 2022 bear market, the 2023 regional-bank runs, and the return of a bull market afterward. He is stepping forward now to issue his next critical market warning, which is related to the Fed. Tomorrow night, Marc will discuss where he thinks the Fed's next move could send the stock market. In short, he says that "there's a dark side" to a Fed rate cut... and he has ideas about what to do with your money to prepare for the consequences. Marc will also revisit the predictions he made about artificial intelligence this time last year, discuss his signature Power Guage system, and give away two free stock recommendations: one to buy and one to avoid. Don't miss it. You can register for the event now. When you do, you'll also get access to a "lite" version of Marc's Power Gauge and a pair of free reports that can help you use it ahead of tomorrow night's event. Again, the event is free. Click here for more details and to sign up. And finally, last call for another big event... This is the last time we'll say it... If you want to attend our annual Stansberry Research conference in Las Vegas next month, click here for more information and grab your tickets and accommodations now. After midnight Eastern time tonight, we won't sell any more in-person tickets for our 22nd annual conference, which will take place October 21 to 23 at the Aria Resort and Casino in the heart of Las Vegas...  This is our biggest event of the year, and I'm looking forward to it. I will share highlights in the Digest, but there's no way I can get to or share everything that will be going on over three jam-packed days, surrounded by many of the brightest minds in our industry. At our event, attendees have the chance to listen to exclusive presentations and ideas from our Stansberry Research editors – like Dr. David "Doc" Eifrig, Whitney Tilson, Dan Ferris, Eric Wade, and more. And we always bring in an array of impressive special guests... This year's lineup includes... - Bestselling author Michael Lewis (The Big Short, Moneyball, and The Blind Side)
- Former Oakland Athletics general manager Billy Beane, who is one of the main characters in Lewis' book, Moneyball
- Former Texas Governor Rick Perry
- Former CIA Chief of Disguise Jonna Mendez
- Pulitzer Prize-winning columnist Dave Barry
- Pulitzer Prize-winning investigative reporter Brody Mullins
- Artificial-intelligence expert Zack Kass
- Geopolitical strategist Marko Papic
- Battle Bank President Frank Trotter
- Award-winning science journalist and author James Nestor
- Stocktwits and Social Leverage founder Howard Lindzon
There's nothing like being at this event in person, where you can enjoy live presentations on our main stage, more intimate breakout sessions, and casual, unplanned conversations with like-minded attendees and even our editors or guests at the Aria in Vegas. We will have a virtual access option for purchase after today... But if you're interested in an in-person ticket, now is your last chance. Click here for more details and get one tonight.
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 Too Big to Crash? When the AI Elephant in the Room Gets Sick Tech is a massive stick propping up the markets right now... Nvidia, Amazon, Alphabet, Meta Platforms, Microsoft, Apple, and Tesla are just 1% of the stocks in the S&P 500 – but they account for 30% of investment dollars. And now they're starting to crack. That's why you need to hear an urgent message from Altimetry founder Joel Litman, whose research is so groundbreaking, the Pentagon and FBI have consulted him on financial issues. Click here to see the full report. | | |
New 52-week highs (as of 9/17/24): Automatic Data Processing (ADP), American Express (AXP), CBOE Global Markets (CBOE), Compass (COMP), Western Asset Emerging Markets Debt Fund (EMD), iShares MSCI Spain Fund (EWP), Comfort Systems USA (FIX), Flutter Entertainment (FLUT), Fidelity National Financial (FNF), Houlihan Lokey (HLI), Intercontinental Exchange (ICE), iShares Convertible Bond Fund (ICVT), Nuveen Preferred & Income Opportunities Fund (JPC), JPMorgan Chase – Series LL (JPMPRL), NYLI CBRE Global Infrastructure Megatrends Term Fund (MEGI), NVR (NVR), Construction Partners (ROAD), Sprouts Farmers Market (SFM), Skeena Resources (SKE), TransDigm (TDG), Texas Pacific Land (TPL), Trane Technologies (TT), Visa (V), Vanguard Short-Term Inflation-Protected Securities (VTIP), and Zebra Technologies (ZBRA). In today's mailbag, feedback on yesterday's edition about Microsoft's history as a long-term investment... Do you have a comment or question? As always, please e-mail us at feedback@stansberryresearch.com. "Enjoyed your article on Microsoft. I bought shares at $37 and again at $41 so I am sitting on fantastic gains! However, since it is up so much, I decided to sell just enough at $416 to cover my original investment. "I have not seen any recommendation from you about doing this, but I thought, why not? Now everything I have in Microsoft is free and clear! I know I left money on the table but now if the market tanks for some reason at least I will still be sitting on great gains! "I have also been thinking of doing the same with my shares of Berkshire Hathaway (BRK-B) as well as Sprouts Farmers Market (SFM) but as yet have not done so. Keep up the great recommendations!!" – Subscriber Charlie M. Corey McLaughlin comment: Thanks, Charlie. As you know, we can't comment on individual portfolios. Plus, editors and analysts may have different ideas about when to buy and sell based on their strategies and outlooks, and we know subscribers may or may not listen based on their own goals or thoughts. However, as I mentioned yesterday, Doc Eifrig and his Retirement Millionaire team did recommend selling a partial stake in Microsoft about a year ago. That was for a gain of nearly 1,200%, and valuation was a factor. But Doc and his team remain bullish on Microsoft as a long-term holding. Today, our Stansberry's Investment Advisory lead editor Whitney Tilson also shared his updated "first look" on Microsoft in his free daily newsletter. In short, Whitney says the stock is a potential example of a "quality bubble." He noted that Microsoft has a "very rich" valuation – at nearly 33 times forward earnings – and cited the likely challenge the business faces justifying that number, given it is already one of the largest companies in the world. But as Whitney wrote... That said, if I had owned [Microsoft] for a long time and had big gains, I would certainly want to continue to let it run. That's what we've done in the Investment Advisory. He likened the situation to the "high-class problem" of sitting on significant returns in Nvidia (NVDA), which Whitney also wrote about recently. You can read Whitney's analysis of Microsoft here. All the best, Corey McLaughlin
Baltimore, Maryland
September 18, 2024
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. | Investment | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 11/11/10 | 1,402.7% | Retirement Millionaire | Doc | MSFT
Microsoft | 02/10/12 | 1,388.6% | Stansberry's Investment Advisory | Porter | ADP
Automatic Data Processing | 10/09/08 | 1,011.4% | Extreme Value | Ferris | BRK.B
Berkshire Hathaway | 04/01/09 | 709.7% | Retirement Millionaire | Doc | WRB
W.R. Berkley | 03/15/12 | 501.9% | Stansberry's Investment Advisory | Porter | TT
Trane Technologies | 04/12/18 | 497.7% | Retirement Millionaire | Doc | HSY
Hershey | 12/07/07 | 496.0% | Stansberry's Investment Advisory | Porter | AFG
American Financial | 10/11/12 | 472.0% | Stansberry's Investment Advisory | Porter | TTD
The Trade Desk | 10/17/19 | 394.8% | Stansberry Innovations Report | Engel | NVO
Novo Nordisk | 12/05/19 | 378.9% | Stansberry's Investment Advisory | Gula | Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals | | 5 | Stansberry's Investment Advisory | Porter/Gula | | 3 | Retirement Millionaire | Doc | | 1 | Extreme Value | Ferris | | 1 | Stansberry Innovations Report | Engel |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Investment | Buy Date | Return | Publication | Analyst | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | BTC/USD
Bitcoin | 11/27/18 | 1,504.9% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,127.1% | Crypto Capital | Wade | POL/USD
Polygon | 02/25/21 | 720.9% | Crypto Capital | Wade | OPN
OPEN Ticketing Ecosystem | 02/21/23 | 279.3% | Crypto Capital | Wade | Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio.
Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios | Investment | Symbol | Duration | Gain | Publication | Analyst | | Nvidia^* | NVDA | 5.96 years | 1,466% | Venture Tech. | Lashmet | | Microsoft^ | MSFT | 12.74 years | 1,185% | Retirement Millionaire | Doc | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | Nvidia^* | NVDA | 4.12 years | 777% | Venture Tech. | Lashmet | | Intellia Therapeutics | NTLA | 1.95 years | 775% | Amer. Moonshots | Root | | Rite Aid 8.5% bond | | 4.97 years | 773% | True Income | Williams | | PNC Warrants | PNC-WS | 6.16 years | 706% | True Wealth Systems | Sjuggerud | | Maxar Technologies^ | MAXR | 1.90 years | 691% | Venture Tech. | Lashmet | | Silvergate Capital | SI | 1.95 years | 681% | Amer. Moonshots | Root | ^ These gains occurred with a partial position in the respective stocks.
* The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%.
Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio | Investment | Symbol | Duration | Gain | Publication | Analyst | | Band Protocol | BAND/USD | 0.31 years | 1,169% | Crypto Capital | Wade | | Terra | LUNA/USD | 0.41 years | 1,166% | Crypto Capital | Wade | | Polymesh | POLYX/USD | 3.84 years | 1,157% | Crypto Capital | Wade | | Frontier | FRONT/USD | 0.09 years | 979% | Crypto Capital | Wade | | Binance Coin | BNB/USD | 1.78 years | 963% | Crypto Capital | Wade | | 
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