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Hello everyone, welcome! This is the "Living Off Income" channel. Subscribe to the channel, leave your like, and share with your friends. Follow us on Instagram too: @livingoffincomechannel. We've had a recent week without many surprises. Those who follow our mentorship or subscribe to our company selection know that we didn't have many surprises this week.
It was Super Wednesday, right? The Federal Reserve kept interest rates unchanged in the United States, signaling the possibility of another rate hike this year. The Federal Reserve, which I call the Federal Reserve, decided on September 20th to keep interest rates unchanged at the level between 5.25 and 5.50.
The expectation of maintaining the rate was unanimous among economists and Wall Street. Despite there being no change this past Super Wednesday, the American central bank signaled that rates should remain higher for longer and left the door open for another rate hike this year, as was already expected by the market.
So there you have it, the Reserve didn't raise interest rates this September, leaving open the possibility of another hike until... On the other hand, at the end of this year highlighted and should higher interest rates for longer, that's what came out so far in the Federal Reserve minutes. We continue to follow this issue because it interests us, everything regarding the American stock market is a matter that concerns us.
The important thing to understand is that this message from the Federal Reserve is meant to make it clear that it remains committed to bringing inflation to the 2% annual target. Bringing inflation to 2% annually is the goal of the US Central Bank, and in this sense, it is possible that it will maintain slightly higher rates throughout 2024.
So this is something to expect, right? And it will maintain higher interest rates throughout 2024. Market expectations point to 5.1% interest rates at the end of next year and 3.9% at the end of 2025. So the market projections in the United States... Okay, what's the problem with the reserve, let's say, tightening the American economy too much?
Or Marx is a great billionaire whose reports we follow, the hold Marx He recently released a report where he said, "Look, this interest rate hike, this interest rate hike that reached its highest level in 22 years in an attempt to contain inflationary pressure, is creating difficulties for businesses in the United States." He also said that if you look at the bankruptcy numbers, they are rising.
In August, the number of companies in the United States that filed for bankruptcy rose 17% compared to July. It was the thirteenth consecutive monthly increase in the number of bankruptcy filings. So, it's necessary to pay attention to this. And then he added, " When you go through a period where it's super easy to raise money for any purpose, or even if you don't have any purpose at all, and you enter a new period where it's difficult to raise funds even for a good purpose, clearly many more companies will go bankrupt.
It's a bitter medicine. Bitter medicine generates side effects, and the side effects increase if you administer these medicines for longer than necessary. So, this is the subtlety that the central bank of the United States needs to have, just as we said that ours also needed to have. It's not because if you don't..." If you had the subtlety, you could continue administering the antibiotic to fight the flu, and then you would generate collateral damage that could ultimately lead to the patient's death, right?
So it's necessary to be attentive to this, and that's what I understand we need to always highlight. A piece of news that caught my attention in recent days is about the giant American technology company Cisco. Cisco announced the purchase of SP Luck for $28 billion. The network equipment manufacturer Cisco announced an agreement to buy the software company SP Luck for $28 billion.
With the acquisition, the manufacturer intends to boost cybersecurity solutions focused on detection and response to prevent attacks on systems. It is Cisco's largest purchase, as the amount represents 13% of the organization's current market value. I followed the news that it will pay $157 per share in cash.
The acquisition was unanimously approved by the boards of both companies after the completion of the acquisition. The president of SP Luck, the executive leadership team of Cisco, reporting to the president and Sion of Chucky Robesan, despite the signal of the purchase announced now, said: "I know you will pay $157 per share in cash." 21.
The deal is expected to close by the end of the third quarter of 2024, subject to regulatory approval. The idea is to complement Cisco's product portfolio with security features, especially in the area of artificial intelligence. Furthermore, the expectation is that cash flow will be positive and gross margin will increase in the first fiscal year after the deal closes.
These are the company's expectations. The union of the two organizations will allow for greater investment in new solutions, and new investments are being accelerated on a larger global scale to support the needs of all sizes, as stated in Cisco's announcement to the market. It's important to pay attention to this, right?
Look, I wanted to draw attention to a graphical issue that is interesting for those investing in Vale. Look at this interesting thing here, the crocodile's mouth, because Vale 3 could have a new rally. Experts point out that the difference between the prices of iron ore and Vale should soon decrease.
For this to happen, Vale's shares need to rise. Okay, Vale's shares need to rise. So, let's go, so soon this year the price... The rise in iron ore prices has caught the eye of many investors because it continues to rise. However, those who hold Vale shares in their portfolios haven't seen the same appreciation that steelmaking ingredients have experienced in recent months.
From January to now, iron ore has risen by 5.31%. The graph showing the evolution of iron ore prices in the first month of the year shows the commodity reaching an average price of $ 127.85 per ton, reaching an average value of $123.37 in September. In contrast, Vale suffered a 20% loss on the Ibovespa index during the same period.
So here's the Vale share price, which reached a high of $92 and then plummeted to $63 and is now around $ 69. So you see the distance between Vale and iron ore. This distance makes no sense; it's what they're calling the "crocodile's mouth," the open mouth of the crocodile. And what 's reasonable is that they should be close, or rather, close, and not so far apart.
So this is important... People understand that we will soon see an appreciation in Vale's stock to reduce the gap with iron ore. JP Morgan, a large American investment bank, recommended buying Vale, stating that the stock is cheap compared to its peers, looking at its axis value, and placing Vale at 79-80 reais.
This is JP Morgan's target price for Vale shares for now, because this new projection is already a correction to the projection released about three weeks ago by JP Morgan, which had set a target of 74 reais. Now, they're setting it at 80 reais for the shares. Several corrections will follow, and that's what we understand.
Corrections will continue over the next few months. When buying, Clóvis, the shares of a good company are always the entry points. You buy shares of good companies during corrections. Now, for that, you need to study, you need to do mentoring with us, or you need to subscribe to the company selection program— one thing or the other, or both.
There are many people who subscribe to the company selection program and do mentoring with us. Did you like the video? Leave a like, share it with your friends, God bless you, and until next time. goodbye
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