Fed’s Next Rate Decision

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Fed’s Next Rate Decision The Federal Reserve will make its next rate decision this week, making it a big week on Wall Street. We also will get a jobs report and Apple’s earnings report. These will come after the S&P fell into correction territory last week after dropping by 2.5% for the week. The major index is down by about 10% from its 2023 high. Fed officials will announce its decision on Wednesday. Wall Street expects it to keep rates unchanged. Traders hope Fed officials will signal that its rate-hiking cycle is over, but it is highly doubtful since the economic data has been red-hot. Jerome Powell (Photo: Kevin Dietsch/Getty Images) Inflation also accelerated in the previous month. The 10-year Treasury yield is currently at about 4.84% after hitting above 5% last week. Higher yields generally lead to lower asset prices. Fed officials have pointed to surging Treasuries as a potential rate hike on its own. The sell-off is especially brutal for tech-heavy Nasdaq. It is down more than 12% from its 2023 high after a disappointing result from Google. Tom Lee at Fundstrat believes it could be a prime buying opportunity to get in FANG stocks. - “FANG didn’t do well this week in earnings and it really sort-of took some of the support out of stocks,” said Tom Lee, Fundstrat Global Advisors co-founder. - “Do I think the FANG thesis is changed or broken? I mean I don’t think so. To me, if someone hasn’t owned FANG all year, this is a chance to get in.” The biggest catalyst is likely to be the Fed Reserve’s decision (and officials’ comments) on Wednesday. So, be prepared for some volatility on that day and beyond.  This Stock Is About To Turn Into The Next Great Software Stock Today’s Stock Pick: Deere & Company ([DE]() The single most important fundamental of smashing the benchmark in investing is being ahead of the herd. As a result, you can purchase shares at a cheap valuation before the crowd jacks it up. Precisely, that is what you have here with John Deere. For many decades, Deere is known as the hardware company that manufactures agricultural machinery. Naturally, the company is pigeonholed into that category. However, Deere has quietly transformed itself into a technology company. In fact, it is heading in the direction of becoming the “Tesla of farming.” It has mastered the hardware side of the business. Now, its new software is turning heads for its ability to leverage artificial intelligence and machine learning to boost crop performance dramatically. (Technology is NOT a new game for Deere – it partnered with NASA to develop the world’s first internet-based GPS tracking system.) Deere’s VP of autonomy and automation, Jorge Heraud, said its AI-powered systems could identify and kill weeds in real-time. (Source: Deere) And farmers could operate Deere’s self-driving tractors from a mobile app: - “This is super exciting. It’s not just driver assistance … the farmer can go and do something else. They can leave the cab and operate everything from an app,” said Heraud. When a reporter asked Heraud if the “fully-automated farm of the future” would become reality within the next decade or so, Heraud said: “It’ll be here before the end of the decade.” What does this mean? Deere’s cutting-edge technology is slowly delivering a software margin that hasn’t been reflected in its stock valuation. (Source: Deere) Software margins: Back in 2016, Deere enjoyed a measly OROA of about 15%. Over the years, the metric climbed quietly until it reached a new high of about 40% in 2022. (Source: Deere) With an incredible ROI, the stock is trading far too cheap at a P/E of 10. Wall Steet hasn’t fully caught on to Deere’s tech transformation, but that certainly will change when Deere maintains its superior financial performance. Owning to its desire to become the innovator in its sector, it allocates a huge percent of its sales to the R&D investment at around 7%: (Source: Deere) Do you love dividends? Then you’ll love this! Even though Deere is an innovative company, it pays out generous dividends to shareholders. Its dividend per share grew by more than ten-fold since 2004. (Source: Deere) Bottom line: John Deere is developing a software business that could be massively profitable. Its A.I. already proved to turbocharge crop production, and it is going to be a no-brainer for farmers to employ its technology. However, its P/E doesn’t reflect its software potential despite the increased margins. Now is the time to get in before Wall Street analysts reset the valuation for the company.   [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.