2024-05-16 09:00:00 ET
Summary
- The combination of earnings season and a dovish Fed are pushing the markets closer to all-time highs.
- The Dividend Harvesting Portfolio has reached an all-time high in profitability and account value, with a 13.14% return on invested capital.
- The portfolio is generating $1,495.50 in forward dividend income, with equities, ETFs, REITs, CEFs, and BDCs contributing to the dividend income.
The combination of earnings season and a dovish Fed are bringing the markets closer to all-time highs. The S&P 500 closed up 1.39% this week while gaining 9.49% on the year. The Nasdaq finished up 0.56% this week, bringing its appreciation to 8.83% in 2024. It's not only tech that's helping the market, but companies such as The Coca-Cola Company ( KO ) and Walmart ( WMT ) are up 7.35% and 15.09% YTD. All eyes will be on the April CPI report as it's scheduled to be released on May 15 th, with the consensus number at 3.4%. Fed Chair Powell is also set to speak on Sunday, May 19 th, at 3:30 pm, while the FOMC minutes will be released the following week on May 22 nd . I am watching the commodity markets closely as Crude is down -8% and Brent is down -7.8% over the past month. With oil hovering around $80 per barrel, the recent decline in prices hasn't made its way through the economy yet. If commodity prices stay at these levels for a bit or trend lower, I think we will see the upcoming CPI prints over the summer come in lower than they have compared to the past several reports. I am interested in seeing where the CPI print comes in at and where core CPI settled in the month of April. Fed Chair Powell's comments were clear last week, and if we can get CPI trending lower again, I think we could see CME Group update the percentages of a rate cut in July to a more favorable position. If we don't get a rate cut at the June or July meeting, I think it's going to be hard for the Fed to cut in September as it will look extremely political even though the Fed has been clear it is an independent body that doesn't take the political landscape into consideration when determining policy. I think that the Fed is making a mistake by keeping rates where they are, and that a 25-bps cut is warranted. I think that the Fed will hold rates where they are in June, and if the data shows inflation starting to trend lower and the labor market continuing to weaken, then a July cut will be on the table. Regardless of what the Fed does or what the markets do, I will be adding to positions and building out the Dividend Harvesting Portfolio....
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Dividend Harvesting Portfolio Week 167: $16,700 Allocated, $1,495.50 In Projected Dividends