PFE - Dividend Harvesting Portfolio Week 169: $16900 Allocated $1503.06 In Projected Dividends

2024-05-30 09:00:00 ET

Summary

• Markets spooked by the Fed's language on inflation progress, causing uncertainty on rate cuts.
• Dividend Harvesting Portfolio retraces slightly but still generates respectable dividend income.
• Portfolio composition shows diversification and focus on sustainable dividend income.

The FOMC minutes from the last meeting were released on May 22 ^nd, and the markets got spooked after the information was digested. In my opinion, the language that jeopardized a Fed pivot was that the committee members are looking for sustained progress of inflation moving toward 2%. There is no telling what this metric needs to be for the Fed to have the confidence they require to at least start the cutting process. My problem is that the Fed is almost waiting for the perfect moment, and this could cause them to wait too long before cutting. Once the Fed pivots, they don't have to cut at each meeting. I believe that the Fed should cut rates by 25 bps at the July meeting because the next meeting isn't until September. This will give them 2 months to digest the data and see how the economic landscape reacts to a small reduction in rates. This will also be enough time to see how prices are affected. The national debt continues to increase, and we are now paying over $835 billion annually in interest on the debt. If the Fed doesn't start cutting, I firmly believe it will do more damage than reducing rates because all of the debt maturing, including federal, personal, and corporate, will need to be refinanced at higher rates, and that could cripple the economy and throw us into a recession. The Dow fell by -2.14% to close the week after cracking 40,000, while the S&P 500 was relatively flat on the week as it declined by -0.13%. The Nasdaq was the clear winner as NVIDIA Corporation ( NVDA ) helped it close up 0.97% on the week. I think the markets are going to experience some turbulence until we get more clarity as to when a pivot will occur. CME Group has taken the probability of a rate cut at the June meeting down to 0% with a 99.1% chance rates remain unchanged. No matter what occurs, I will continue allocating capital and building out the Dividend Harvesting Portfolio, as I believe there are still many opportunities to invest in....

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