The Fed May Not Be Done With Hiking

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, The Fed May Not Be Done With Hiking Tech stocks sold off yesterday, as the sentiment grows that the Federal Reserve could hike rates further. Recent readings on the services and manufacturing sectors were too hot for Wall Street’s liking, indicating that prices could be climbing again. Inflation must keep falling if the “soft landing” narrative were to hold its credibility. But rising prices may force the Fed to hike rates, thus increasing the risk of a recession. The ISM services index’s price component jumped 2.1% to 58.9%. Anything above 50 indicates expansion. Likewise, the similar gauge for the ISM manufacturing index increased 5.8% to 48.4%. Yes, it is considered as contraction, but this jump is a reversal from the recent trend. Moreover, prices paid component increased more than expected. - “The ISM reinforced all the concerns that have been bedeviling stocks for weeks – higher yields undercut stock valuations, robust growth [and] sticky inflation keep pressure on the Fed, healthy growth gives a further bid to oil,” said Vital Knowledge’s Adam Crisafulli in a Wednesday note. As a result, Wall Street now prices in more than 40% probability of a hike in November. But it doesn’t expect the Fed to hike rates this September, as it assigns a 93% chance of a pause. - “Even though we keep hearing that we’ll probably be in just a soft patch and not a recession, the more negative news that we get about the economy, the more I think people worry that we could actually fall into a recession,” said CFRA Research’s chief investment strategist Sam Stovall. Boston Fed President Susan Collins indicated yesterday that “further tightening would be warranted,” but she will be data-dependent. Boston Fed President Susan Collins (Photo: Federal Reserve Bank of Boston/Handout via REUTERS) Believe it or not, economists now expect the GDP to grow by 5.6% on an annualized basis in the third quarter. That’d be a phenomenal growth rate considering the fact that we are in a high interest rate environment. If the GDO growth posted above 3.2%, it would be the strongest quarter since 2021. In fact, Fed officials projected as little as 1% growth in 2023 back in mid-June. They also forecasted a recession in the older projection round in March. But that number is expected to increase to 1.8% or 2% in the new projections that Fed officials will release after its September meeting. (Source: Bloomberg) Despite some signs of an acceleration, Wall Street still expects the Fed to pause in September and wait for more data points before deciding on whether to hike further or not. - “The economy accelerated over the summer, but the Fed is willing to wait out September,” said Diane Swonk, the chief economist at KPMG LLP in Chicago. “A soft or ‘softish’ landing is now the most likely scenario.”  Want To Jump Into The Megatrend of Data? Buy This Stock Immediately Today’s Stock Pick: Pure Storage ([PSTG]() Data is the modern linchpin of business transformation. Companies who know how to use data will gain an enormous competitive advantage over others who are asleep (or too lazy to catch up). But there’s a problem. Data needs a home. A huge one. If you have relatively small data, you can store it in the cloud. But what if you have a massive trove of data that could be mined for artificial intelligence technology? For example, car manufacturers are trying to crack self-driving. They would install radars on cars and gather all of these videos for data mining. These take up a lot of storage. Enter Pure Storage. It offers hardware data storage for corporations. It is much like personal data hardware you may use to back up your computer files. Below is some of Pure Storage’s hardware offerings: (Source: Pure Storage) Pure Storage’s memory chips are high-end and more expensive than traditional platter-based hard disk drives. But they’re smaller, faster, more power-efficient, and more durable. For example, its product called FlashBlade S allows companies to run massive file and object workloads – such as computational analytics and AI, image search and recognition, electronic design automation, media special effects, high-performance computing and data protection. More importantly, it can be continuously upgraded without disruption. - “One customer who installed Pure to replace a competitor's all-flash product reported a tenfold improvement in performance, while also significantly reducing their labor and energy expenses,” said CEO Charlie Giancarlo. Beyond its hardware business, it offers cloud and artificial intelligence services to help companies save storage space and properly configure their devices. The storage-as-a-service blends on-premise data storage (hardware) with cloud services for those who want to store data seamlessly between hardware and the cloud. (Source: Pure Storage) A massive number of customers: Pure Storage holds more than 12,000 global customers, including about 59% of Fortune 500 companies. Clearly, this validates Pure Storage as a must-have product for modern corporations. (Source: Pure Storage) It has been named a leader in storage for eight straight years by Gartner, saying that customers choose Pure Storage for its hybrid solutions of cloud and hardware approach, simplicity for installation, and pay-as-you-go pricing model. Gigantic market: Nearly every corporation will need to use data, right? It’s inevitable. Therefore, the market is massive for Pure Storage. For now, it puts the Total Addressable Market at $60 billion, which would represent only 4% of its current revenue. And its revenue growth could be hitting an inflection point. Pure Storage is putting more focus on enterprise clients, and the top 10 customers spend more than $100 million annually. The unstoppable trend of digital transformation drove huge annual revenue growth for Pure Storage in FY 2023: (Source: Pure Storage) Bottom line: Pure Storage operates in perhaps the most important megatrend in many sectors – data. Its hardware is consistently ranked as number one in the industry, enabling corporations to run large-scale data projects. While its focus is on data storage, the product line expansion is nearly endless   [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](     © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.