Morning Brief – March 29, 2022

The Fed recently raised rates by a quarter point.

Along with the hike, the central bank is penciling in another six rate hikes this year. For 2023, we could see another three hikes, with no hikes in 2024.

So, with higher interest rates on the way, where should we invest?

Bank of America (BAC)

When rates climb, margins expand, which is good for banks, and brokerage firms. 

“Analysts are bullish on shares because among the big banks Bank of America is one of the most sensitive to interest-rate hikes. With it widely expected that the Fed will raise interest rates at least three times this year, Bank of America would be poised to benefit more than peers,” as noted by Barron’s.

In addition, Wells Fargo just raised its earnings estimates on Bank of America, believing rate hikes will boost its profits. 

Or, look at an ETF, like the SDY.

SPDR S&P 500 Dividend ETF (SDY)

One of the best ways to diversify at less cost is with an ETF, such as the SPDR S&P 500 Dividend ETF (SDY) – which, since inception, has returned about 9% average gains per year. 

Even better, the ETF invests in companies that have consistently increased their dividends each year for the better part of the last 20 years.  That includes AT&T, AbbVie Inc., Exxon Mobil Corporation, Chevron Corporation, National Retail Properties, IBM, and Cardinal Health to name a few of the top ones.  Plus, the ETF carries a dividend yield of 2.68%.

Markets

  • The Dow is up 268 points to 35,121
  • The S&P 500 is up 10 points to 4,546.50
  • The NASDAQ is up about 175 points to 15,160.75
  • Gold prices are down 29.05 to $1,895.12
  • Bitcoin is up another 1.3% to $47,816.43
  • Oil prices are down $5.41 to $100.60
  • The VIX is down slightly to 18.88

 

Trading Tips

The metaverse could be a multi-trillion-dollar opportunity.

In fact, according to Matthew Ball, CEO of Venture Capital firm Epyllion, the metaverse could be a $10 trillion to $30 trillion market.

Forced into the spotlight by Mark Zuckerberg, the metaverse “is a sci-fi concept whereby humans put on some sort of headset or smart glasses that allows them to live, work and play in a virtual world much like the one depicted in the ‘Ready Player One’ movie,” says CNBC.

Helping, major industries want in.

Nike just filed for several new trademarks to design and sell virtual Nike sneakers and apparel in the metaverse. CVS Corp. filed for a trademark to sell virtual goods, NFTs, and could even provide healthcare services, including prescription drugs and personal care products.

Read more here.

Insider Buying – Ford Motor (F)

 

Since the start of the year, shares of Ford (F) fell from a high of about $26 to $16.67.

That’s thanks to inflation, rising interest rates, and parts shortages.  However, investors may want to use weakness as opportunity here.  For one, Ford is oversold at strong support dating back to October 2021.  And two, insiders are buying.  In fact, Executive Chair Bill Ford just paid $4.5 million on March 24 for 267,697 shares at an average price of $16.81.

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