RJ Hamster
A “Tantrum” in Treasuries
 EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!Hello Peter Anthony Hovis,A “Tantrum” in TreasuriesThe protagonist of yesterday’s trading session isn’t a stock. Rather, it’s the 10-year Treasury yield.Just as traders were ready to price in a celebratory rate cut from the Fed this Wednesday, the bond market threw a small tantrum. Yields spiked to levels not seen since September by hitting highs around 4.17%.It acted like gravity on stock prices. (Source: Bloomberg)The narrative driving this fear is the “Hawkish Cut.”Namely, traders are waking up to the reality that while the Fed might trim rates by 25 basis points this week, the path to future cuts is getting foggy.The rumor mill, stoked by comments from John Canavan at Oxford Economics, suggests the Fed might cut once and then hit the pause button for a long, uncomfortable stretch into 2026.To make matters more complicated, Kevin Hassett, widely tipped as the next Fed Chair, went on CNBC and essentially said, “Don’t ask us where rates are going in six months; we’re flying blind on data.”  Kevin Hassett (Photo: Francis Chung/Politico/Bloomberg)Why would Hassett say something like that?Possibly, he is worried that the Fed might warn that they might not cut rates as many times as Wall Street expects over the next six months.Many market strategists believe that Wednesday will turn out to be a pivotal day on the markets. Fed Chair Jerome Powell’s comments will be crucial in shaping Wall Street’s expectations for rate cuts in 2026.Plus, Fed officials will release their economic projections.The recent recovery in stocks was based on the hope of rate cuts. So, investors desperately need the Fed to sound convincing that officials are prepared to cut further next year.“While a rate cut feels almost certain at this point, the Fed’s economic projections and Chairman Powell’s commentary will play a big role in how markets react — not only this week, but it could possibly set the tone for the remainder of the month,” Bret Kenwell, U.S. investment analyst at eToro, said. “After the recent pullback in stocks and crypto, risk-on investors are hoping the Fed will grease the rails for a year-end rally rather than pour cold water on the recent rebound.”Indeed, tomorrow is going to be a big day.The “Iron Dome” for America is Coming. This Company is Building the Guts of It.Today’s Stock Pick: Karman Holdings Inc. (KRMN)We are approaching the year 2026 where President Trump’s stimulus package will begin to kick in.Meaning?Opportunities for companies that benefit from the new government spending priorities.Karman Holdings is one of them as an aerospace and defense company with roots stretching back more than four decades.Despite its age, the company is seeing a big uptick in growth.The reason is simple — the world is spending more on defense. Karman is an IP-driven merchant supplier to prime contractors in three high-priority end markets: (1) Hypersonics & Strategic Missile Defense, (2) Tactical Missiles & Integrated Defense Systems and (3) Space & Launch.  (Source: Karman Holdings)For example, President Donald Trump is building a “Golden Dome” for the U.S., with layered missile defense. The budget was ~$25 billion for that project, and it was part of the One Big, Beautiful Bill.The bill also allocated ~$17 billion to restock America’s arsenal of munitions and expand production of missile interceptors and industrial base capacity.In total, the bill expects to spend $150 billion.That’s a massive tailwind for Karman.  (Source: Karman Holdings)It has over 70 prime contractor customers, and it has a track record of acquiring companies to maintain the growth rate.The company delivered a 24% revenue CAGR and 33% adjusted EBTIDA CAGR from 2022 to 2024.The second quarter was even better.Karman posted a record revenue of $122 million for a +42% year-over-year growth. Adjusted EBITDA jumped +34%. Adjusted EPS was up +150%.More importantly, its funded backlog was a record high at $758 million for a +38% year-over-year growth.All three segments saw major growth, as shown below:  (Source: Karman Holdings)What about this year?More of the good stuff.Karman’s guidance sees a 34% y-o-y growth for both revenue and adjusted EBITDA.  (Source: Karman Holdings)Bottom line: Karman stands to benefit from the upcoming defense spending boom, and the next few years look bright for this stock. EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!  © All Rights Reserved, Trade AllianceUnsubscribe | Manage Preferences |
