MSFT - Every Dividend Stock On My Buy List For May

2024-05-04 11:00:00 ET

Summary

• The stock market reacted to the Federal Reserve's decisions with initial optimism, then reverted to pessimism, and now seems back to optimism.
• Fed Chair Jay Powell does not expect inflation to return to the target of 2% in the next few months but believes it will come down later this year.
• There are weakening trends in small business, the labor market, and consumer finances that lead me to believe the economy is in the "late-cycle" phase.
• REITs are an incredible buying opportunity right now and poised to rally with a vengeance over the next few years.
• My shopping list for the rest of May is chock-full of high-quality, high margin of safety dividend growth stalwarts.

So much data, so little time!

As the old joke goes, I am feeling a bit like the mosquito in a nudist colony... where do I begin?

After covering the first major headwind to GDP growth (rising trade barriers) that I discussed in last week's article , I had planned to dive into the second major headwind to growth this week: fiscal excess and the government debt burden.

But between economic analysis (including some very interesting charts) and a huge wave of earnings reports, I'm pushing off the "headwinds to GDP" series to next time.

Here's the order of events for today:

1. Fed Chairman Powell said some stuff.
2. Weakening trends in Small Business.
3. Weakening trends in the labor market.
4. Are high interest rates backfiring when it comes to housing?
5. Why consumer sentiment is sliding.
6. Why REITs are an incredible buying opportunity right now.
7. The high-quality dividend stocks I plan to buy in May.

Here's my bottom line as far as the economy goes. In November 2023, I argued that " recession is imminent " and would show up sometime this year. But a few weeks ago, I provided a mea culpa and discussed the three unforeseen (at least by me) reasons why the economy has stayed relatively strong so far in 2024: affluent consumer spending, rapidly rising consumer debt, and robust immigration....

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