2024-04-18 09:00:00 ET
Summary
- The markets declined for the second consecutive week, causing a retracement in the Dividend Harvesting Portfolio.
- Dividend income generated in week 163 was light, but the portfolio's forward projected income increased.
- The portfolio composition remains diversified, with REITs and ETFs being the largest holdings.
The CPI print came in hot at 3.5%, which was the highest level since September of 2023. Inflation is proving to be sticky, and to make matters worse, The University of Michigan consumer sentiment for the U.S. fell -1.5 points to 77.9 on Friday, 4/12. This caused a selloff in the markets, with the S&P 500 declining by -1.58% and the Nasdaq dropping by -0.51% for the week. The CME Group has updated their projections, and they are now forecasting that the probability of a rate cut in May is down to 5.9%, while there is only a 28.3% chance that a cut will occur at the June meeting. This is drastically different data than we had last week, and the commodity markets are not cooperating to add salt to the wounds. Oil is at $90 a barrel, while gold is hovering around $2,350 as I write this article. With inflation starting to go the wrong way, it's putting pressure on the Fed's previous outlook, and to go a level deeper, higher commodity prices increase manufacturing costs, which could have the opposite effect on prices than the Fed wants. Right now, there is a reason for oil traders to be bullish as U.S. production is declining, OPEC+ previously deepened their cuts, and the conflict between Iran and Israel is intensifying. We could see $100 per barrel sooner rather than later, and if we do, I wouldn't be too optimistic about the next CPI print. All eyes are going to be on Fed Chair Powell when he delivers remarks at the upcoming FOMC press conference on May 1 st . The only saving grace is that earnings season is upon us, and big tech could save the day once again. If we have a strong earnings season with additional participation from the broader market, then the waters may not be as choppy, but if the conflict in the Middle East intensifies, and we see earnings surprises to the downside, we could see a retracement in the markets. No matter what happens, I will buy, as I don't invest in the short term, and I view fluctuations as opportunities....
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Dividend Harvesting Portfolio Week 163: $16,300 Allocated, $1,458.36 In Projected Dividends