BMY - Dividend Harvesting Portfolio Week 171: $17100 Allocated $1524.12 In Projected Dividends

2024-06-13 09:00:00 ET

Summary

• The markets had a strong week, with the S&P 500 gaining 0.97% and the Dow Jones Industrial Average gaining 1.6%.
• Yields on the 10-year Treasury shot up to 4.9% ahead of the FOMC meeting.
• The Dividend Harvesting Portfolio traded sideways but continues to generate consistent dividend income and exceed invested capital.

This was another strong week for the markets as the S&P 500 climbed 0.97% and the Nasdaq gained 1.6%. As we head into the FOMC meeting, yields shot up on the 2-Year at the end of the week, closing at 4.9%. The yield curve still remains inverted, as the 10-year yield is 4.44%. I don't think we're going to see a cut this week as the U.S. added 272,000 jobs on non-farm payrolls in May, which was significantly larger than the consensus estimate of 185,000. CME Group has slightly increased the probability of a rate cut on June 12 ^th to 2.2% as they still believe the Fed is going to keep rates where they are, and I would speculate we hear the phrase data dependent in Fed Chair Powell's speech several times. What I believe is the most bullish number to look at is the price of Crude , as it's dropped for the third consecutive week. Crude is trading for around $75.38 as it's declined from $86.91 on April 5. If Crude can remain under $75 for a significant period of time, it should provide some relief on the cost of goods and services, as input costs on manufacturing and transportation should ease a bit. I believe this would help the CPI print and get us to a point where the Fed would be willing to drop rates by 25 bps to see how the economy reacts and if inflation creeps higher. While I would like to see the Fed start the cutting cycle because I believe it's better for the economy as a whole to have lower rates, I am not holding my breath for a cutting cycle to start. Many of the positions in the Dividend Harvesting Portfolio would benefit from a lower-rate environment, but I am happy to continue to build the portfolio in the current environment....

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