Is the Fed's Next Move a Rate Hike? What a Strong Jobs Report Means for Your Portfolio

**SPEAKER_1** (0:01)
This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and welcome to the Wednesday, June 10th, 2026 edition of Invest Talk.
I'm your host, Luke Guerrero. I will be with you over the next 50 minutes as we break down the market today, the stories that matter, and of course, answer your finance and investment questions. Now, I do want to do a quick heads up because we will have an upcoming Invest Talk Wealth webinar set for Tuesday, June 30th from 12 to 1 Pacific. The title is Beyond the Yield, How to Invest for Your Income Needs. Alrighty, in just a bit, we'll talk about today's market performance and run down those show topics. But first, let's tackle this caller question now.

**SPEAKER_3** (0:58)
I was just calling to get your opinion on Hingham Institution for Savings. That's ticker H-I-F-S. That's a regional bank, very solid, very risk averse and all their deposits are 100% insured. So I was wondering if I could get your take on it. Thank you very much guys. Bye.

**Luke Guerrero** (1:15)
So look at H-I-F-S as Hingham Institution for Savings. It is a Massachusetts-based community bank, pretty old, founded in 1834 and it is one of the most capital efficient community banks in the US. Primarily, they do commercial and residential real estate mortgage lending funded by their retail and wholesale deposits. It is a pretty small business, fewer than 100 employees and has a market cap of just under 630 million. Now, looking at their most recently reported earnings, it looks like GapNet income was down 60.2% year over year, CoreNet income was up 72.3% year over year, trailing 12 month revenue was up from 65.5 million into 102.8 million. And so, from a fundamental perspective, what we saw from their income statement, kind of all over the place. Now, their cost to income ratio sits about 34.87% versus the industry average of about 60%.
They have a 51.6% net profit margin. They have 11.3% five-year book value annualized growth rate. They have core earnings up 72% year over year. I mean, it's one of the most operationally efficient banks. In America, it's sitting at 12, 13 times price to forward-looking earnings, 1.5 times book value. So, it's not really cheap, but it's not expensive for the quality that you're getting. But, on the other hand, they have huge concentration in the commercial real estate space, specifically in Eastern Massachusetts. And that's pretty meaningful given commercial real estate stress nationally. They've had no special distribution since 2022 Signaling management may be a little bit more cautious. But really, what is the big flag for me is it is a relatively illiquid name. I mean, on average, we're only trading 44,000 shares per day. That is an extremely thinly traded community bank. It is a thinly traded name even considering how low its market cap is.
And so because of this, along with the fact that there's really no institutional analyst coverage, no formal price targets, you open yourself up to a lot of risk there because of the lack of coverage. So in spite of it being one of the most efficiently run community banks, in spite of it having some pretty solid numbers from a growth perspective, unless you want a size extremely small, I would hesitate to include this name in my portfolio. That is HIFS, Hingham Institution for Savings. We had a great show yesterday. We looked into this story. Is the AI trade over the bear case against hyperscaler spending? We also answered a listener question on REZ. That's the iShares residential and multi-sector real estate ETF. It was submitted on our 24-7 voicemail line. If you happen to miss yesterday's episode, I encourage you to go check it out and remember the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. All righty, on to today where our main focus point is, is the Fed's next move a rate hike? What a strong jobs report means for your portfolio. Friday's stronger than expected jobs report sent stocks tumbling and reignited fears that the Federal Reserve may be forced to raise rates rather than cut them. With gold falling sharply and bond markets repricing, investors need to understand what a potential rate hike cycle needs for their portfolios. Also, we'll touch on the market today and how it was affected by new clashes in the Middle East as well as inflation fears, as we got the worst inflation print since 2023
We'll also touch on how the recent, not really recent, but the near future IPOs of OpenAI, SpaceX, Anthropic, May affect equity markets in general.