After a strong 2023 and a strong start to this year, Wall Street volatility returned a few weeks ago as fears increased over the Federal Reserve's first rate decrease timing. After January inflation rose, investors lost faith that the Federal Reserve would drop rates soon.
The Commerce Department announced a 0.3% month-over-month increase in January CPI and 3.1% year-over-year increase. January core CPI, which excludes volatile energy and food costs, climbed 0.4% sequentially and 3.9% year over year.
Inflation is more than projected, which worries investors. The Federal Reserve's January FOMC minutes indicate that the central bank is not rushing to decrease rates. The first rate decrease will occur once authorities have “greater confidence” that inflation has slowed.
The Federal Reserve has previously ruled out a March rate drop due to inflation exceeding 2%. Markets expected the first rate decrease in May, but many now predict it after the June FOMC meeting. The CME FedWatch tool shows a 2.5% possibility of a March Federal Reserve rate decrease. The first week of January has almost 90% likelihood.
Higher interest rates prolong market volatility. Dividend-paying equities may be a good alternative for portfolio protection in the present environment. Consider stocks that recently raised their dividends. CSG Systems International, Inc. CSGS, Ramaco Resources, Inc. METC, L3Harris Technologies, Inc. LHX, and Universal Display Corporation OLED are examples.
One of the largest providers of outsourced billing, customer care, and print and mail services to the North American cable and direct broadcast satellite sectors is CSG Systems International, Inc. Some of the world's largest and most innovative multi-channel video, Internet, telephony, and IP-based service providers use CSGS technologies. Zacks ranks CSG Systems International #3 (Hold). See all today's Zacks #1 Rank (Strong Buy) stocks here.
CSG Systems International issued a $0.30 dividend on March 28, 2024, on February 25. CSGS pays 2.08% dividends. CSG Systems International has raised its dividend six times in five years, and its payout ratio is 38% of profits.View CSG Systems International's dividend history.
Ramaco Resources, Inc. operates and develops metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. METC is based in Charleston. Lexington, Kentucky-based Ramaco Resources Inc.
Ramaco Resources issued a $0.14 per share dividend on March 15, 2024, on February 24. METC pays 2.76% dividends. Ramaco Resources has raised its dividend four times in five years, keeping its payout ratio at 33% of profits.View Ramaco Resources' dividend history. L3Harris solutions, Inc. provides sophisticated defense and commercial solutions for air, land, sea, space, and cyberspace.
On February 23, L3Harris Technologies announced a $1.16 dividend on March 22, 2024. LHX pays 2.13% dividends. In the past five years, L3Harris Technologies has grown its dividend six times, and its payout ratio is 37% of profits.View L3Harris Technologies' dividend history. Universal Display Corporation is a major OLED technology and IP developer. OLEDs are efficient, thin, and lightweight solid-state light emitters.
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