Everything’s At A Record High

Stocks To Hold In Case Things Change

Share-Price Drops Create Buying Opportunities

This is Porter & Co.’s The Big Secret On Wall Street, our flagship publication that we publish every Thursday at 4 pm ET. Once a month, we provide to our paid-up subscribers a full report on a stock recommendation, and also a monthly extensive review of the current portfolio, like we share below… You can go here to see the full portfolio of The Big Secret. Every week in The Big Secret, we provide analysis for non-paid subscribers. If you’re not yet a paid subscriber, to access the full paid issue, the portfolio, and all of our Big Secret insights and recommendations, please click here… At the end of this week’s issue, paid-up subscribers can find our Top 3 Best Buys, three current portfolio picks that are at an attractive buy price – get our top stocks without paying $1,425. We explain how here…

The stock market continued its steady march to new highs this month, with the early-April tariff-announcement selloff now long since forgotten. 

What had once been viewed as a narrow advance led by only a small set of mega-cap tech stocks has broadened. This isn’t just a Nasdaq or even an S&P 500 rally anymore. Even the smaller-cap Russell 2000 index is approaching all-time highs.

The latest reason for investor exuberance? Increased optimism that the Federal Reserve will cut interest rates. Not only has the market priced in a 25-basis-point cut at the next Fed meeting in September, but hopes have risen for a 50-basis-point cut – which would take the Fed target rate from around 4.5% to 4%, and, investors hope, super-charge an already hot market. 

But the outlook can certainly change between now and the Fed’s September 16 meeting. The most recent consumer price index (“CPI”) showed inflation at 2.7% in July. While that’s certainly down from the peak levels of the pandemic, the Fed can hardly declare victory on inflation with the current level well above the historical 2% rate that had always been targeted – and the real effects of tariffs yet to wind their way through the market. 

And while job growth has slowed significantly, as we have written here in recent weeks, the change has hardly been enough to warrant an overreaction on the monetary policy front. This gap between market hopes and financial reality puts the Fed in quite a bind.

Investors should also be careful what they wish for here. Long-term government bond rates are up compared to previous years because of bigger inflation expectations, and also because of greater fears over the alarming growth in the national debt. While there appears to be an assumption that “lower rates” from the Fed means lower government bond rates or lower mortgage rates, that’s not necessarily the case. Longer-term rates could end up unchanged or even higher in that case. That would be a disastrous outcome for the Fed.

Chair Powell is scheduled to speak at the Fed’s annual Jackson Hole symposium on Friday this week. He may very well throw cold water on this whole situation in an effort to keep the Fed’s options open – being intentionally vague about whether the central bank will cut or stay the course.

Instead of focusing on the Fed, we recommend investors stick to high-quality stocks that can withstand a potential bumpier ride going forward. 

In this Big Secret On Wall Street update, we provide updates on six stocks with upside potential, which aren’t really dependent on the macro environment or market direction for success. One is one of our “legal monopolies” that has hit a speed bump but we continue to believe has better days ahead. Another is an emerging leader in weight-loss drugs with a new product that is poised to transform the industry.

We also provide an update on the “Chicken Wing King,” a compounder in the fast casual industry with an interesting new artificial intelligence angle. And we discuss the latest results from a leading LNG exporter and from our two tobacco industry stocks benefiting from the continued secular shift toward fast-growing smokeless products.