Summers: Mortgage Rates May Go Higher

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Summers: Mortgage Rates May Go Higher Yesterday, the market surged after two positive catalysts — (1) a jumbo-sized interest rate cut from the Federal Reserve and (2) a decline in initial jobless claims to the lowest since May. Meaning? The sentiment for a soft landing is rising. The S&P 500 hit its 39th record high in 2024 alone. The total gain for the year was about 20%. What a year for the market. - “Despite some volatility after the Fed’s rate cut, the S&P 500’s bullish trend remains intact,” said Fawad Razaqzada at City Index and [Forex.com](. “The Fed’s decision to deliver a 50-basis point rate cut was largely welcomed by investors. The move was seen as a bold but necessary step to ease economic concerns without sending panic signals reminiscent of the 2008 financial crisis.” There are still questions about the labor market, though. The Fed chose to go with a 50 basis-point cut for a reason. Officials are worried about it. Bloomberg economist Eliza Winger pointed out that the recent decline was partly due to the Labor Day weekend that disrupted the data. So, investors shouldn’t read too much into it. - “Initial jobless claims declined more than expected in the survey week for September’s employment report, due in part to difficulty adjusting the data around a major holiday like Labor Day. Claims tend to be depressed in holiday-shortened weeks, then rebound the following week — so the current data have limited value as a guide to September’s payroll print,” said Bloomberg economist Eliza Winger. Bloomberg economist Eliza Winger (Photo: X) Former Treasury Secretary Lawrence Summers continued his familiar tone by being pessimistic about interest rates. He had been warning about higher interest rates for a long time. He didn’t believe the fight against inflation was over. In his eyes, there are still possibilities that inflation would reemerge. The Fed won’t be able to cut rates as many as they would like in their rate projections, which a median estimate sees the rate coming down to 3.4% for the end of next year. - “My suspicion is that there’s some upwards adjustment ahead in longer term rates — perhaps quite significant upwards adjustment in the 10-year rate or the 30-year rate,” said former Treasury Secretary Lawrence Summers. For example, he speculated that mortgage rates might be higher than they are now. Mortgage rates are often based on longer-term rates, like the 10-year rate. Right now, ten-year Treasury yields were at 3.73%. However, he believed the neutral rate would be at least 4% due to higher fiscal borrowing and major investments in areas like renewable energy and artificial intelligence. - “The rates that people are now seeing on mortgages may be relatively low compared to what the average of where they’re going to be over the next five years,” Summers said. Regardless, Fed Chair Powell was still optimistic that the central bank can bring rates down to the neutral rate without triggering anything in the labor market. - “We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with disinflation,” Powell said. All in all, expect the labor market data to keep dominating the headlines over the next few weeks. Biotech is the Future, and This Company is a Wonderful Way to Bet On It Today’s Pick: Repligen Corporation (RGEN) There is no doubt about it – cell and gene therapy is going through a revolution. And it is vital for any investor to have a hand in this boom. However, the industry is at mercy of the regulators and clinical trials. So, any stock in this industry has a massive risk. But there’s a way for you to get in the action with lower risk. Meet Repligen. It is the “engine” for the research and development of next-generation products by supplying instruments and associated disposables that are required for the production of cutting-edge therapies. It innovated single-use products that reduce the amount of maintenance and cleaning. As a result, it offers the company a tidy stream of recurring revenue. Its products include everything from filtration and separation to fluid management, analytics, and lab software. Repligen Corporation HQ at Waltham, Massachusetts (Photo: Repligen) The biggest growth driver for Repligen is through acquisitions. Life sciences is historically a fragmented market, and the industry saw a surge in deals to consolidate. Sure enough, Repligen has at least 12 M&A since 2016. What makes Repligen remarkable is its ability to grow its acquired company. Believe it or not, it grew the revenue of four major acquisitions by 30%+ in the first full year! That’s a phenomenal number. All in all, the biotech company grew its revenue by about 27% CAGR since 2018. That was an incredible growth rate! (Source: Repligen) Better yet, there’s plenty of growth ahead. Repligen only has ~5% overall market share in its TAM for 2023. Filtrations, which is more than half of its revenue, only has ~5% market share. This brings a tremendous opportunity to expand. (Source: Repligen) Bottom line: By owning shares in Repligen, you’d have a safe way to tap into the explosion of the cell and gene therapy. It supplies products required to produce them, so Repligen doesn’t need to bet on a product. In other words, it’s a “pick-and-shovel” play. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](