text stringlengths 237 126k | date_download stringdate 2022-01-01 00:32:20 2023-01-01 00:02:37 ⌀ | source_domain stringclasses 60 values | title stringlengths 4 31.5k ⌀ | url stringlengths 24 617 ⌀ | id stringlengths 24 617 ⌀ |
|---|---|---|---|---|---|
Ever since the U.K. government announced its so-called "mini-budget," markets in London have been gripped by turmoil. The chaos driven by recent political events has seen sterling tank to new historic lows against the dollar as many overseas investors pulled out of the country. The sell-off in the U.K.'s currency has meant some money managers are beginning to find value in select sectors of the British stock market. Here's what they're talking about: Diageo The maker of Captain Morgan spiced rum and Johnnie Walker whisky is one stock that stands to benefit from the fall in sterling, according to Freddie Lait, co-founder and chief executive of Latitude Investment Management. The fund manager believes sterling's devaluation over the past few weeks has yet to feed into the stock prices of companies earning much of their revenue in U.S. dollars. "We've run the numbers and push them through our models," the former Goldman Sachs analyst said. Such non-U.S. listed dollar earners are likely to benefit "to the tune of 10 to 15% on spot prices," according to Lait. Lait also said a weaker sterling would also "cushion" any fall in earnings the London-headquartered company may report in the near future. Shares of the multinational company have risen by 30% since the start of 2021 and continue to trade near their all-time high. FTSE 100 The index of the 100 largest London-listed companies is one to target when looking for the U.K.'s dollar earners, according to Alan Custis, head of equities at Lazard Asset Management. He said: "75% of their revenues are generated outside of the U.K. So, a weak sterling actually does help them in terms of the translated profits." The index, known for its high-divided yielding mining stocks and oil and gas firms, is also likely to remain attractive despite rising government bond yields. As the interest rate on long-term U.K. government debt has risen above 4%, yield-hunting investors have traditionally flocked to the safer asset by dumping stocks, which are higher risk. "Fortunately, 45% of the dividends paid by FTSE100 companies are actually tied in dollars," Custis, who is also a portfolio manager, said. Homebuilders If interest rates rise to 6% it will be very difficult for real estate stocks to look attractive, according to Custis. But at the current rate of 2.25%, he believes they are starting to look undervalued. "Real estate stocks are obviously discounting quite a lot of bad news," he said. "On average, the commercial real-estate stocks in the U.K. are trading at about a 40% discount to net asset value, which is when you look back in history, one of the widest levels." However, Bhanu Baweja, chief strategist for UBS Investment Bank, believes that although the sector looks attractive, it might be too soon to buy. He added: "Although it is getting cheap, particularly some sectors like homebuilders and, and banks are getting cheap. It's a little bit early to get into that market." | 2022-09-30T04:44:24Z | www.cnbc.com | Here's what to buy and sell amid the UK's market turmoil, money managers say | https://www.cnbc.com/2022/09/30/heres-what-to-buy-and-sell-amid-the-uks-market-turmoil-money-managers-say.html | https://www.cnbc.com/2022/09/30/heres-what-to-buy-and-sell-amid-the-uks-market-turmoil-money-managers-say.html |
Demand for iron ore in China may have risen earlier this month, but the Swiss bank UBS says it's a "short-lived" lift that will soon collapse. The investment bank said it believes earlier demand was partly driven by restocking ahead of a weeklong national holiday in China which begins on Oct. 1, when industrial activity is expected to fall off. China is also likely to implement its "Blue Sky" policy, a program to reduce pollution, from mid-October ahead of the meeting of Chinese Communist Party officials in Beijing. That means thousands of industrial facilities and chemical plants will be closed temporarily to improve air quality in the region, further choking demand. That's set to come at a time when prices for iron ore, used mainly by steelmakers, are already slumped in the wake of China's real estate crisis . The UBS report, dated Sept. 27, said global iron ore demand had already weakened as pig iron production, an intermediate product in steelmaking, had fallen by 7% from August last year. Mining companies exposed to the commodity are likely to be affected by the upcoming change in demand. Here's what's in store for the big names in the industry, according to the bank: Rio Tinto UBS predicted that London-listed mining giant Rio Tinto is on track to ship iron ore at the low end of its previous guidance. Rio Tinto's exports from Western Australia are likely to be down by 1% in the third quarter this year compared with 2021, UBS said. Since more than 60% of the company's revenue was drawn from the commodity, according to its 2021 results, UBS said iron ore price is the key driver of the stock. Although its shares have fallen by more than 20% since their recent peaks, UBS said there is further risk to the downside. The investment bank has a price target of £43 ($46) a share for Rio, representing a decline of 11.7% from current levels. Anglo American Anglo American 's sales from its South African mine are expected to be down by 9% for the three months to September, according to the Swiss bank's research. Iron ore sales represented two-fifths of its revenue per its 2021 filings, making the company reliant on the commodity's good performance. UBS has tagged Anglo American with a "sell" rating and a price target of £26 ($28.3) per share. That would be 5% below current levels. Who are the winners? The analysts expect Australian miners BHP and Fortescue Metals to see year-on-year growth of iron ore shipments from their largest mines, at 2% and 4% respectively. But because iron ore makes up more than half of BHP's revenues and Fortescue Metals is a single-commodity miner, their fortunes are closely tied to the commodity's price trajectory, said the investment bank. UBS said it's "cautious" when it comes to BHP as it expects commodity prices to fall over the next year or two, pressuring cash flows and returns as capital expenditure rises. "Cost control will become increasingly important for FMG if iron ore prices retrace as expected," UBS said, referring to Fortescue Metals Group. Shares of BHP are currently trading at 7.5% above its price target of 35.50 Australian dollars ($23), and shares in Fortescue Metals Group are at 6.2% above its price target of 15.80 Australian dollars ($10.2). | 2022-09-30T04:44:30Z | www.cnbc.com | Iron ore demand is about to collapse in October, UBS says. Here's how to trade this. | https://www.cnbc.com/2022/09/30/iron-ore-demand-is-about-to-collapse-in-october-ubs-says-heres-how-to-trade-this.html | https://www.cnbc.com/2022/09/30/iron-ore-demand-is-about-to-collapse-in-october-ubs-says-heres-how-to-trade-this.html |
Putin declares 'four new regions of Russia' as Moscow illegally annexes parts of Ukraine
The territory being seized consists of two pro-Russian "republics" in Luhansk and Donetsk in the east, and in Kherson and Zaporizhzhia in the south.
There are concerns Moscow could use unconventional weapons to "defend" what it will now say are its territory and citizens.
"The results are known, well known," Putin said, referring to the series of votes that Ukraine and Western governments say breached international law. He claimed the results were due to the will of millions of people, saying they had the right to self-determination.
The territory being seized more than seven months into the Kremlin's war consists of two pro-Russian "republics" in Luhansk and Donetsk in the east, and in Kherson and Zaporizhzhia in the south. It is thought to make up roughly 18% of Ukraine's land, although the precise details of the boundaries were not immediately clear.
Unsurprisingly, the votes, seen as illegitimate by Ukraine and its allies, saw a majority of people vote to join Russia.
Echoing previous claims that the West is trying to undermine Russia, Putin said, "The West is looking for new opportunities to hit us and they always dreamt about breaking our state into smaller states who will be fighting against each other."
"They cannot be happy with this idea that there is this large country with all [these] natural riches and people who will never live under a foreign oppression," he added.
His comments come shortly after a civilian convoy in the southern city of Zaporizhzhia was hit by a Russian strike, killing at least 23 people.
Those in the convoy were heading into Russian-occupied territory to pick up their relatives, the city's governor said. Moscow has issued a statement saying the attack was carried out by Ukraine.
Speaking ahead of Putin's declaration that Russia has four new regions, U.N. Secretary-General Antonio Guterres said that the so-called referendums "would have no legal value and deserves to be condemned."
"It stands against everything the international community is meant to stand for," Guterres said Thursday. "It flouts the Purposes and Principles of the United Nations. It is a dangerous escalation. It has no place in the modern world. It must not be accepted."
— CNBC's Natasha Turak contributed to this report. | 2022-09-30T13:58:48Z | www.cnbc.com | Putin declares 'four new regions of Russia' as Moscow annexes parts of Ukraine | https://www.cnbc.com/2022/09/30/putin-declares-four-new-regions-of-russia-as-moscow-annexes-parts-of-ukraine.html | https://www.cnbc.com/2022/09/30/putin-declares-four-new-regions-of-russia-as-moscow-annexes-parts-of-ukraine.html |
Hannah Whitbeck (C) of Ann Arbor, Michigan, speaks as Alydia Claypool (L) of Overland Park, Kansas, and Michael Vestigo (R) of Kansas City, Kansas, all of whom say they were fired by Starbucks, listen during the "Fight Starbucks' Union Busting" rally and march in Seattle, Washington, on April 23, 2022.
In May, the company announced enhanced pay hikes for non-unionized stores and extra training for baristas that went into effect in August after holding feedback sessions with its employees. The union has said the coffee giant is illegally withholding the benefits from cafes, but Starbucks maintains it cannot offer new benefits without negotiations for union shops. Legal experts predict the benefits battle will wind up before the NLRB. | 2022-09-30T17:01:35Z | www.cnbc.com | Unions could face obstacle in 2023 if economy falls into recession | https://www.cnbc.com/2022/09/30/unions-could-face-obstacle-in-2023-if-economy-falls-into-recession.html | https://www.cnbc.com/2022/09/30/unions-could-face-obstacle-in-2023-if-economy-falls-into-recession.html |
Morgan Stanley (MS) CEO James Gorman said Thursday he's not worried about the bank's beleaguered stock price — and that's a view we share due to our long-term belief in the Club holding's revenue diversification strategy. "I'm not concerned about it all, where the stock is trading in this environment. Obviously, I feel very good about what we're doing," Gorman told CNBC in an interview with Jim Cramer. Shares of Morgan Stanley are down 18.6% year-to-date — slightly better than the S & P 500's financial sector, which has declined 21.6% this year. Nevertheless, some investors in Morgan Stanley may be wondering when the stock's downward trend will reverse. After peaking this year at nearly $110 per share on Feb. 10, the stock has declined about 27%. It closed down Thursday nearly 2%, at $79.86 a share. Gorman suggested patient shareholders would be rewarded, thanks to the bank's stock repurchase program and quarterly dividend. In July, as part of its second-quarter earnings release, Morgan Stanley announced a new, multiyear $20 billion share repurchase program and an 11% dividend increase, bringing the quarterly payout to $0.775 per share, up from $0.70. Earlier, in the second quarter, the bank bought back $2.7 billion worth of stock, marking the end of its old $12 billion buyback authorization. "We'll retire 6% to 7% of stock this year, and we've got a dividend yield of 3.5%, so shareholders are getting a 9-plus percent return without getting out of bed," Gorman said. "It's not bad. I feel very good about the position." Fears of an impending recession have weighed on bank stocks for much of the year. For Morgan Stanley, in particular, a dramatic slowdown in capital markets activity — including initial public offerings and mergers and acquisitions — has concerned investors. In the second quarter, Morgan Stanley's investment banking revenue of $1.07 billion missed Wall Street's estimates by $400 million, despite the fact analysts had already lowered their forecasts going into the print. The bank is set to report third quarter results on Oct. 14. The Club take At the Club, we're not oblivious to the frigid investment banking environment. But a key reason we're invested in Morgan Stanley is its push to broaden out its revenue streams into more steady, fee-based industries like wealth advisory. Gorman said the diversification strategy is going to plan, indicating Morgan Stanley's recent acquisitions of online brokerage E-Trade and asset manager Eaton Vance have not disappointed. Over time, we expect this transformation to be beneficial for the stock because investors place greater value on recurring revenue than they do on volatile revenue. "Some people thought we overpaid for some of those assets, but I don't think so anymore," Gorman said. "I think it's all about stability," he added later. "If you look at the wealth businesses, which generate roughly $6 billion a quarter for the last couple of years...they don't move very much in their daily numbers. I mean, plus or minus $5 million on $100 million. Incredibly stable." There's no question the macroeconomic situation is not conducive to deal-making and IPOs, Gorman acknowledged, but he argued that investment banking should bounce back in due time. "They're delayed. They're not shut down. They're going to happen. Companies will go public. Deals will get done," he said, adding it would be a "turbocharger" for the bank's overall numbers. (Jim Cramer's Charitable Trust is long MS . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. | 2022-09-30T20:39:11Z | www.cnbc.com | Morgan Stanley's CEO isn't worried about its stock price. Neither are we | https://www.cnbc.com/2022/09/29/morgan-stanleys-ceo-isnt-worried-about-its-stock-price-neither-are-we.html | https://www.cnbc.com/2022/09/29/morgan-stanleys-ceo-isnt-worried-about-its-stock-price-neither-are-we.html |
An 87-year-old mutual fund formed in the depths of the Great Depression is beating the S & P 500 this year. Its strategy: Do nothing. What is today the Voya Corporate Leaders Trust Fund was first established in 1935 as a concentrated portfolio of 30 blue chip companies that were considered unlikely to go bankrupt — of vital concern after the 1929 crash and ensuing global slump. Since those original 30 stocks were chosen, nothing has changed in the way the trust operates. The rules of the trust say the only time a holding can change is when there's a corporate action out of the fund's control, such as a merger or acquisition. Other instances can occur when a company cancels its dividend, defaults or its debt is downgraded, or a stock is delisted or falls below $1 for more than 15 days. As a result, those 30 original stocks has shrunk to a portfolio of just 19 names over time. "Consider it the ultimate buy-and-hold," said Chrissy Bargeron, a client portfolio manager for equities at Voya Investment Management, which oversees the trust. She says the fund was "passive" before the term was used to describe an investing strategy. Almost all of the changes at the trust have come about in response to takeovers and spinoffs. In 2010, for example, Corporate Leaders became a holder of Berkshire Hathaway only after Warren Buffett bought Burlington Northern Santa Fe, which the fund owned. Today, Berkshire is the only stock it holds that pays no dividend. 'What's in style' In a year defined by shaky markets, Voya Corporate Leaders Trust has stayed on solid ground. The trust has fallen less than 8% this year — far outperforming the S & P 500's 24% drop. Corporate Leaders has also outperformed both its investment category peers as well as the Russell 1000 Value Index over the past 10 years, Morningstar says. Part of the success of the trust this year stems from the plain vanilla stocks it holds, said Bryan Armour, a Morningstar analyst. Union Pacific , the railroad that makes up a whopping 40% of the trust, has fallen less than the S & P 500 this year. It's an example of a stock that an investor could use to help keep a portfolio steady, as it's known to perform consistently with little growth over time, he said. The real driver of the Corporate Leaders Trust's relative success this year comes from the fact that nearly one quarter of its holdings are in energy, Armour said. The sector is up approximately 31% in the S & P 500, the only one of 11 major industry groups that's risen this year. "It's obvious in retrospect, but by having a diversified portfolio, you'll sort of always capture what's in style," Armour said. Bargeron said the enduring strength of the trust lies in its focus on "less sexy" areas of the market. For example, the trust doesn't have any holdings in sectors such as technology or health care. That means the fund missed the tech rally that followed the 2008 Global Financial Crisis. 'A good market study' Because of its long lifespan, the trust has benefited from acquisitions. Today, its 19 stocks come only from the industrial, energy, financial, materials, consumer staples, utility, communication services and consumer discretionary parts of the economy. Its one consumer discretionary holding, Foot Locker, is also its smallest, at just 0.2% of the portfolio. Why Foot Locker? Corporate Leaders Trust originally held F.W. Woolworth Co. The trust has a net expense ratio of 51 basis points. "There's never that gut reaction to sell when a stock falls or that greedy reaction" to chase performance, Bargeron said. "And I think it helps take advantage of those opportunities that arise due to other investors' irrational behavior." Bargeron called a sister fund, Voya Corporate Leaders 100 Fund, a "child" of the original trust. It still has an equal-weighted portfolio, she said, just with more diversification and the added element of systematic rebalancing. But for the original trust, Bargeron said there are no plans to change how the fund is managed or its holdings — just as it has been for the last nine decades. "I can't see us really ever stepping in here," she said. "It's a good market study." Disclosure: Corporate Leaders Trust holds 2.3% of its assets in Comcast, the owner of NBCUniversal, parent company of CNBC. | 2022-09-30T20:39:23Z | www.cnbc.com | This 1930s fund is beating the S&P 500 in 2022 – by doing nothing | https://www.cnbc.com/2022/09/29/this-1930s-fund-is-beating-the-sp-500-in-2022-by-doing-nothing.html | https://www.cnbc.com/2022/09/29/this-1930s-fund-is-beating-the-sp-500-in-2022-by-doing-nothing.html |
Tesla is expected to provide a new look at its humanoid robot Optimus at Tesla AI Day on Friday.
Optimus will first be rolled out in the thousands in Tesla's own factories, Elon Musk has said, with an eye ultimately toward consumer applications in the home.
Robotics experts remain cautious on the idea of robots based on the human form.
The Tesla Bot is on display at the Tesla Giga Texas manufacturing facility during the "Cyber Rodeo" grand opening party on April 7, 2022 in Austin, Texas.
Should robots look like people? Elon Musk, who is expected to reveal more about his humanoid robot at this year's Tesla AI Day on Friday, seems to think so. In contrast to a robotic arm that performs a specific manufacturing task, the Tesla Bot, or Optimus – its name a nod to the "Transformers" franchise – is meant to perform more general purpose duties.
According to job postings by Tesla, the Optimus will first be rolled out in the thousands in its own factories, with an eye ultimately toward consumer applications in the home. Musk said in a Ted interview that touches on robots that these household applications could range from activities like mowing the lawn and picking up groceries and caring for the elderly, all the way up (or down) to being a "buddy" or more intimate "friend."
Musk clearly has an eye for products that seize the imagination of the public: commercial space travel, fully self-driving cars and, now, humanoid robots. "Robots are a prevailing object used to evoke our technological future," said Anne-Laure Fayard, a professor at Nova School of Business and Economics (SBE) in Lisbon, Portugal and visiting research professor at the New York University Tandon School of Engineering. "They reflect our hopes and fears about technology."
It's clearly on brand for Tesla, and within its growing computing wheelhouse. As Musk stated at the Tesla AI Day last year: "If you think about what we are doing with cars, Tesla is arguably the largest robotics company in the world, because our cars are semi-sentient robots on wheels."
But Fayard, and other robotics experts, say a basic question still needs to be answered: "What these robots can really do."
Last year's Tesla AI Day included a human dancing around in an Optimus suit, something that has left some experts skeptical about the humanoid robot's ultimate potential. Nancy Cooke, a professor in human systems engineering at Arizona State University, said the real key is that it be able to do unscripted actions. "If he just gets the robot to walk around, or he gets the robots to dance, that's already been done. That's not that impressive," Cooke said.
Others have pointed out that truly self-driving cars and robotaxis – the proof for Musk's claims that Teslas are semi-sentient robots on wheels – remain unfulfilled promises, with targets and deadlines pushed out several times. In 2019, Musk promised one million robotaxis by 2020 and there are currently none on the road.
But Tesla isn't the only company behind on self-driving goals or pushing the boundaries of robot design. Honda, Boston Dynamics, and Hyundai have been working on humanoid robots for decades.
Tesla CEO Elon Musk said it's more important to develop its humanoid robot than new cars
One big stumbling block – shared with self-driving vehicles – is what happens when robots encounter unpredictable scenarios.
Musk, who has proved critics wrong in the past, is aware that the success of the Optimus project will rest on the robot's ability to think and perform "unscripted actions."
The real key will be whether it can "navigate through the world without specific line-by-line instructions," he said at the AI Day last year, adding that ultimately "it should be able to do that."
This year's AI Day featured the humanoid robot prominently, if playfully: the invitation includes robotic hands making a heart symbol.
Part of the reason for building a robot that is human in form is that, if it is going to be performing multiple unscripted tasks — pick up that box over there, go to the store and get eggs — it will have to be able to move through a world built for humans: presumably, having a human form is the best promise of being able to do so.
The incident of the so-called "fluff bot," a robotic piece of equipment that caused production problems due to its inability to perform a relatively simple task, which Musk later said was more readily performed by "human hands," is sometimes marked as a key moment for the humanoid Tesla bot. But one limitation on this line of thinking, according to robotics engineers, is that we still don't really understand very well how human bodies are able to do what they do. It's not a simple process to reverse engineer their movement capabilities.
Elon Musk looks at a robot display during a tour of the new Tesla Motors auto plant, formerly operated New United Motor Manufacturing Inc. (NUMMI), in Fremont, California, U.S., on Wednesday, Oct. 27, 2010.
How much the humanoid robot will actually be able to do is a compound problem of mobility and AI capabilities, according to Eni Halilaj, assistant professor in mechanical engineering at Carnegie Mellon and a researcher who studies human movement. Mimicking human mobility is going to be limited, in part, by limitations already in place about current knowledge of how human mobility works in humans.
"Our body is a complex engineering system that we still do not fully understand," Halilaj said. "We have a long way to go to reverse engineer it, making motion planning and control challenging for humanoid robotics. For example, we still do not understand how our central nervous system selects specific muscle coordination patterns to carry out daily tasks — this is one of the grand challenges in biomechanics and neural control."
"Biomimicry can be only as successful as our understanding of the biological system," she said. Mimicking a biological system is a task self-driving cars don't face. "It is true that cars are robots on wheels, but cars are human-made inventions," she added.
More collaboration between the robotics community and biomechanists, neuroscientists, and behavioral scientists to build plausible human digital twins — computational models that can accurately capture the complexity of the neuromusculoskeletal system and navigate virtual environments with the fluidity and elegance of our biological systems — should be a broader goal in this area of robotics.
And until such knowledge is in place, "We'll see progress, but not at the transformative level we could if we bolstered fundamental research in human intelligence," Halilaj said. | 2022-09-30T20:39:47Z | www.cnbc.com | A big question for Tesla's Optimus: Should robots look like humans? | https://www.cnbc.com/2022/09/30/a-big-question-for-teslas-optimus-should-robots-look-like-humans.html | https://www.cnbc.com/2022/09/30/a-big-question-for-teslas-optimus-should-robots-look-like-humans.html |
'Day Without Us' protesters walk out over abortion-rights reversal, days before Supreme Court returns
People across the United States skipped work on Friday in protest of the Supreme Court decision overturning the constitutional right to an abortion.
The "Day Without Us" event comes days before the start of the next term.
Partner organizations include the Movement for Black Lives, Move On, the Women's March and the Working Families Party.
An abortion rights protester participates in nationwide demonstrations following the leaked Supreme Court opinion suggesting the possibility of overturning the Roe v. Wade abortion rights decision, in Houston, Texas, May 14, 2022.
People across the United States skipped work on Friday for a "Day Without Us" protest of the recent Supreme Court decision overturning the federal constitutional right to an abortion.
Organized by a group of Black women leaders, national teach-ins are being held online starting at 11:30 a.m. ET, hosted by actress and singer Naturi Naughton, with in-person gatherings in cities including Atlanta, Washington, D.C., New York City, Chicago and Oakland, California.
Two of the organizers, Leslie Mac and Tiffany Flowers, said the idea for the event was sparked by their dismay at the ruling in June in the case known as Dobbs v. Jackson Women's Health Organization.
"I was on a text thread with other powerhouse Black women who were feeling really disappointed in our leaders — devastated, hurt, confused and unsure of what was next," said Flowers, campaign director for The Frontline, a progressive group.
Tracey Corder, who organized the partners for the event, said, "Day Without Us is for everybody — no matter your identity — because we are all inherently worthy of bodily autonomy."
"Every attack on our economic, political and human rights is an attack on our collective freedom, and the fall of Roe is one part of a larger project of oppression," Corder said.
"This is an invitation," Flowers said. "Both online and at local pop-ups, this all-day event will serve as a space for people to connect with each other and to connect the dots about our shared struggles. The doors of the movement are wide open and reproductive justice is the pathway forward." | 2022-09-30T20:39:51Z | www.cnbc.com | Abortion-rights protest spurred by Supreme Court ruling in Dobbs | https://www.cnbc.com/2022/09/30/abortion-rights-protest-spurred-by-supreme-court-ruling-in-dobbs-.html | https://www.cnbc.com/2022/09/30/abortion-rights-protest-spurred-by-supreme-court-ruling-in-dobbs-.html |
In this handout provided by the Collection of the Supreme Court of the United States, Members of the Supreme Court with the President (L-R) Associate Justices Amy Coney Barrett, Neil M. Gorsuch, Sonia Sotomayor, and Clarence Thomas, Chief Justice John G. Roberts, Jr., President Joseph R. Biden, Jr., Vice President Kamala Harris, and Associate Justices Ketanji Brown Jackson, Samuel A. Alito, Jr., Elena Kagan, and Brett M. Kavanaugh pose at a courtesy visit in the Justices Conference Room prior to the investiture ceremony of Associate Justice Ketanji Brown Jackson September 30, 2022 in Washington, DC.
SCOTUS | Getty Images
US Supreme Court Justice Ketanji Brown Jackson speaks with Chief Justice John Roberts on the steps of the US Supreme Court, immediately following the investiture ceremony of Justice Jackson, in Washington, DC, September 30, 2022. | 2022-09-30T20:40:03Z | www.cnbc.com | Biden watches Supreme Court Justice Ketanji Brown Jackson swearing in | https://www.cnbc.com/2022/09/30/biden-watches-supreme-court-justice-ketanji-brown-jackson-swearing-in.html | https://www.cnbc.com/2022/09/30/biden-watches-supreme-court-justice-ketanji-brown-jackson-swearing-in.html |
According to Enki Research, the economic damage caused by Hurricane Ian could range from $60 billion to $70 billion, hitting many key local industries such as tourism, agriculture, etc.
The first thing is that damaged homes need to be repaired. According to an analysis released Monday by Core Logic, a residential property information services company, about 1 million properties on Florida's West Coast will be damaged by the hurricane and will cost up to $258 billion to repair. And experts also caution that the cost of rebuilding could be significantly higher than market value because new flood regulations must be met, and it could cost $400,000 to refurbish a $200,000 beach house.
In terms of tourism, Florida is one of the most visited states in the U.S. by domestic and international tourists, and the damage caused by Hurricane Ian to the local tourism industry may reach about $7 billion.
On the one hand, physical damage to hotels could reach $5 billion; on the other hand, many famous tourist attractions such as Disneyland and Universal Studios were forced to close this week due to the hurricane's landfall. The loss of revenue for the tourism industry could be as much as $2 billion as visitors are unable to ride rides, rent boats, or buy drinks, etc.
On the agricultural front, the citrus fruit harvest is now in full swing, and according to meteorologists at Maxa-Tech, at least 75 percent of Florida's orange groves will be affected by the hurricane. And it's worth worrying that not only will most of the crop be affected, but a large number of orange trees will also collapse. Experts expect this could take four to five years to recover.
This is reflected in the trading of Frozen Concentrate Orange Juice futures on the Intercontinental Exchange, where prices can be seen rising this week.
Analysts believe that this hurricane would have ripple effect, from affecting supply, downstream companies, and then the consumer end. According to an expert, It will take about nine weeks or so to be felt directly by consumers.
Finally, let's take a look at a chart that shows the ranking of tropical cyclones that have caused significant economic damage to the United States, according to the National Oceanic and Atmospheric Administration. If the estimation at the beginning is accurate, the economic damage caused by Ian may be the sixth highest in the history of the United States. | 2022-09-30T20:40:21Z | www.cnbc.com | CCTV Script 30/09/22 | https://www.cnbc.com/2022/09/30/cctv-script-30/09/22.html | https://www.cnbc.com/2022/09/30/cctv-script-30/09/22.html |
The pullback in Apple 's stock over the last two trading days may indicate that a bottom for this brutal bear market is on the horizon, according to some analysts who study charts. "I think this bear market isn't over until the best names, the ones that everyone felt was a defensive safe haven, get hit," said Strategas partner Chris Verrone. Amid this year's market sell-off, investors and analysts alike have come to view Apple's stock as a port in the storm, given its relative outperformance against the broader market. Shares of Apple are down about 22% this year and sit about 10% off June's trough compared to the S & P 500, which has shed about 24% this year and hit a new bear market low Thursday. Over the last two days, that narrative has shifted as the stock plummeted nearly more than 6%. Apple's stock shed 1.3% on Wednesday after a report that it's bailing on plans to raise production on its new iPhone, and almost 5% Thursday following a downgrade to neutral from Bank of America . While the sharp sell-off in the tech bellwether may be cause for concern, some analysts say it may also be a sign that a market bottom is in sight. "Usually the weakest ones get hit first, and then the intermediate ones get hit and then the strongest ones get hit," said JC O'Hara of MKM Partners. "Maybe you could make a case that you're closer to the end because Apple — which held up the best relative — is coming under pressure." Apple is the largest stock in the S & P 500, making up more than 7% of the benchmark index. That means large swings in the stock have an outsized impact on the index, and can even mask underlying weakness, O'Hara said. At the market's recent August high, the iPhone maker's stock stood less than 3% below its 52-week high and close to breaking a new record — while the average stock traded more than 18% off the S & P's top. "The S & P 500, without Apple, would have broken already," O'Hara said. "If Apple were to test its June low, that would mean the largest and most influential stock dropping 10%. That would put enormous downward pressure on the markets." Oppenheimer's Ari Wald agrees that a selloff in Apple often signals that stock markets are nearing a bottom, given that the stock is often sold during the later stages of capitulation. That said, a bottom isn't in just yet. The bear market has already worked its way through speculative tech and bellwethers like Microsoft, Amazon and Google, which sit at least 32% off their highs. The last domino to fall in this case is Apple, even though more challenges remain in the near term, said Verrone. To be sure, analysts including Fundtstrat's Mark Newton are skeptical of whether much can be deduced from just two days of subpar trading. "I don't view this as being Apple's down two days, so the whole market is going to correct further another 20% to 30%," he said, adding that while the stock has weakened more so than its peers, he expects it to bottom in the next few days. | 2022-09-30T20:40:28Z | www.cnbc.com | Chart analysts say the breakdown in Apple's stock may signal a market bottom is near | https://www.cnbc.com/2022/09/30/chart-analysts-say-the-breakdown-in-apples-stock-may-signal-a-market-bottom-is-near.html | https://www.cnbc.com/2022/09/30/chart-analysts-say-the-breakdown-in-apples-stock-may-signal-a-market-bottom-is-near.html |
U.S. Federal Reserve board member Lael Brainard speaks after she was nominated by U.S. President Joe Biden to serve as vice chair of the Federal Reserve, in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, U.S., November 22, 2021.
Federal Reserve Vice Chair Lael Brainard on Friday stressed the need to tackle inflation and the importance of not shrinking from the task until it is finished.
"Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target," the central bank official said in remarks prepared for a speech in New York. "For these reasons, we are committed to avoiding pulling back prematurely."
The remarks came a little more than a week after the Fed enacted its fifth interest rate increase of the year, pushing its benchmark funds rate to a range of 3%-3.25%. September's increase marked the third consecutive 0.75 percentage point increase for a rate that feeds through to most adjustable-rate consumer debt.
While Fed officials and many economists expect that inflation may have peaked, Brainard warned against complacency.
Earlier Friday morning, the Commerce Department released data showing that inflation continued to push higher in August, as measured by the Fed's preferred personal consumption expenditures price index. Core PCE increased 4.9% year over year and 0.6% for the month, both higher than estimates and well above the Fed's 2% inflation target.
Since the Fed has hiked rates, Treasury yields have soared and the dollar has increased in value rapidly against its global peers. Brainard noted the ramifications of a higher U.S. currency, saying that it is exerting inflationary pressures globally.
"On balance, dollar appreciation tends to reduce import prices in the United States," she said. "But in some other jurisdictions, the corresponding currency depreciation may contribute to inflationary pressures and require additional tightening to offset."
The Fed is far from alone in tightening policy, as central banks around the world have been raising rates to combat their own inflation problems. However, the Fed has been more aggressive than most of its peers, something Brainard noted could have spillover effects. | 2022-09-30T20:40:52Z | www.cnbc.com | Fed Vice Chair Brainard warns against retreating from inflation fight prematurely | https://www.cnbc.com/2022/09/30/fed-vice-chair-brainard-warns-against-retreating-from-inflation-fight-prematurely.html | https://www.cnbc.com/2022/09/30/fed-vice-chair-brainard-warns-against-retreating-from-inflation-fight-prematurely.html |
Seriously, good riddance to September: Between this bloodbath of a market during the day and "Dahmer" on Netflix at night, no one would blame you for feeling a sense of hopelessness as we head into the final quarter of the year. Closing out the week, the S & P 500 was tracking for about a 9% decline in September and slightly greater than 5% for the third quarter. The Nasdaq lost about 10.5% over the past month, bringing its quarterly loss to roughly 4%. Both indices are on pace to lock in their worst September since 2008. September is historically the worst month of the year for the market. The Dow Jones Industrial Average , the last soldier standing so to speak, also ultimately fell into bear market territory this month, falling nearly 9% in September and over 6% in the third quarter. Not only was this worst month for the Dow since March 2020, it was its worst September since 2002. Yep, that means this past month for the Dow was worse than September 2008 during the financial crisis. While the outlooks for stocks and the economy are bleak, Jim Cramer has pointed out recently that we're not in a financial and market crisis like 2008 or a dot-com bubble-type crash that lasted from March 2000 to October 2002. For the quarter, the real estate and communication services sectors performed the worst, falling over 11% and 12%, respectively. Consumer discretionary and energy were the only two sectors to finish out the quarter with gains of just over 4% and 1%, respectively. As for September, no sector managed to escape the carnage, with all 11 looking to close lower for the month, led to the downside by real estate, communications services, technology and utilities. The drivers of the price action in stocks heading into October remain largely unchanged, with inflation behind the wheel and uncertainty around China's path to reopening and Russia's ongoing war in Ukraine riding shotgun. Inflation and the Fed As a result of inflation, we are seeing a swift reversal of the easy money policies — low interest rates and quantitative easing — that helped support risk assets for over a decade and most recently during the dark days of the pandemic. Unfortunately, this monetary policy reversal does nothing to address the supply side issues contributing to inflation. Moreover, fiscal policy isn't helping: The Federal Reserve is seeking to suck money out of the system and put power back in the hands of employers in an attempt to cut wage inflation, while Washington has introduced several more simulative initiatives that would increase the amount of money in the system and add jobs. Though the politicians' causes may be noble — we love the idea of investing in renewable energy — in terms of the Fed's fight against inflation, the policies are seen as headwinds potentially forcing the Fed to act even more aggressively than it would have otherwise. Additionally, the Fed's tightening cycle, which began with a small interest rate hike in March, has only accelerated into the fall. That's leading to demand for dollars and causing the U.S. greenback to strengthen relative to other currencies. The result has been a stiff headwind for companies selling into international markets as U.S. goods become more expensive to foreign buyers. China Covid policy Uncertainty around China's reopening from the pandemic continues to weigh on the U.S. stock market because East Asia represents a significant growth opportunity for many American companies. In addition, political tensions between the U.S. and China over a number of issues, including Taiwan, are leading to a reversal of the globalist agenda that helped keep inflation down — with many politicians now calling for jobs to be brought back to the United States. How far this reversal goes remains to be seen. But supply chains are being reorganized. Some jobs will make their way back to the U.S., especially those tied to industries considered to be a matter of national security. Other jobs may end up in emerging market countries. Club holding Apple (AAPL), for example, has begun shifting some production to India. Russia's war in Ukraine Finally, there's Russia's unjustified war in Ukraine, which in addition to being a humanitarian crisis, is proving to be a European nightmare. It's disrupting food and energy supply chains to the entire region. Of course, the energy market is global — and as a result, everyone is feeling the impact of this war at the pump which is contributing to global inflation. The response is threatening a global recession. What's the answer? Should we just take our ball and go home? History would say you stay the course and stick to your discipline. As brutal as this market may be, it's important to zoom out and acknowledge that over the long term, the reason equities have historically provided the best returns of any asset class is because investors are ultimately rewarded for taking on the risk you experience in a year like this. In fact, just look back three years — including this horrendous year — and it's still roughly a 9% annual return from the S & P 500. Over the past five, it's 9.5% annually. And for the last decade, you'd have a 12% annual return. Don't let one bad year — and we are not trying to sugarcoat it, it's really bad — keep you from seeing the longer-term rewards for taking the risk on equities. Don't let fear rule Can things get worse from here? Sure. But don't let the fear of things getting worse rule your investment decisions. Even if we do go a bit lower, we would still be well within the parameters of an average bear market . The absolute carnage we have witnessed at the individual stock level is providing some of the best opportunities we have seen in years for those who can stomach further volatility and stay the course. Whether your goal is to pick up accidental high-yielders for some passive income or focus on tech stocks conducting monstrous buybacks while trading at some of the lowest valuations in years, we think there are plenty of opportunities out there right now. It's not 2000 or 2008 Lastly, for those worried that this is a dotcom or 2008-like crash, we don't think those are the correct comparisons at the moment. The valuations coming into this downturn were nowhere near as egregious as what we saw in 2000. At the peak of the dot-com bubble, Club holding Microsoft (MSFT), the largest company by market cap back then, traded north of 80 times trailing 12-month earnings. The second largest General Electric (GE) traded at around 60 times earnings. The third largest Cisco Systems (CSCO), a Club stock, was briefly north of 230 times earnings. The fourth largest Exxon (XOM) was over 35 times earnings. The fifth largest Walmart (WMT) was trading at nearly 60 times earnings. The biggest companies — those that have the most impact on a market cap weighted index like the S & P 500 — were in the stratosphere back then, nothing like what we saw coming into 2022. As for those wanting to compare today's environment to the Great Financial Crisis, the biggest difference is that our financial institutions — the so-called G-SIBs or global systemically important banks — are much better capitalized than they were back then. It's something that James Gorman, CEO of Club holding Morgan Stanley , told Jim in an interview on Thursday. Looking back Exiting the quarter, the U.S. dollar index stands at around the 112 level. Gold climbed back to around the $1,670 per ounce region. WTI crude prices are bouncing around $80 per barrel. The 10-year Treasury yield was holding around 3.8% and the 2-year yield was roughly 4.3%. While still elevated, bond yields were off their recent highs. While no portfolio companies reported earnings this past week, there was tons of economic data. On Tuesday, durable goods orders were shown to have declined 0.2% monthly in August, slightly better than expectations for a 0.3% monthly decline. New home sales in August were at a seasonally adjusted annual rate of 685,000, exceeding expectations On Wednesday, pending home sales were indicated to have declined 2% in August, missing expectations for a 1.4% monthly decrease. On Thursday, the final read on second quarter real GDP pointed to a 0.6% annualized contraction, in line with the reading we got on the second estimate but better than the 1.6% rate of contraction we saw in the first quarter. Initial jobless claims for the week ending Sept. 24 came in at 193,000, a decrease of 16,000 from the prior week and fewer than expected. On Friday, the core PCE price index — the Fed's preferred measure of inflation — advanced 0.6% monthly in August, ahead of the 0.5% estimate. On an annual basis, it advanced 4.9%, an acceleration from the 4.7% rate of advance seen in the 12-month period ending in July. While the reading may be supportive of the still hawkish tone we have heard from Fed officials in recent weeks, the Chicago PMI reading for September came in at 45.7 — the lowest reading since June of 2020, which was the last time in was in contraction territory. As a reminder, when it comes to PMI readings, anything over 50 is consider expansion while under the 50 level indicates a contraction. Jim provided some additional thoughts on recent Fed talk and the divergence between the core PCE price index reading and Chicago PMI reading during Friday's Morning Meeting . What's ahead Next week, we will get earnings from Club holding Constellation Brands (STZ) before the opening bell on Thursday. Here are some other earnings reports and economic numbers to watch ahead of the Fed's November policy meeting. As of Friday , another 75-basis-point hike was being favored by the market, with odds of a smaller 50-basis-point increase around 46%. Like August, the Fed does not have a scheduled meeting in October . Monday, Oct. 3 Before the bell: Nucor (NUE) 10:00 a.m. ET: ISM Manufacturing Tuesday, Oct. 4 Before the bell: Acuity Brands (AYI) After the bell: SMART Global (SGH) 10 a.m. ET: Factory Orders Wednesday, October 5 Before the bell: RPM International (RPM), Helen of Troy (HELE), Byrna Tech (BYRN), Lamb Weston (LW) 8:15 a.m. ET: ADP Employment Survey 10 a.m. ET: ISM Services Thursday, October 6 Before the bell: McCormick & Co (MKC), Conagra Brands (CAG), AngioDynamics (ANGO) After the bell: Levi Strauss (LEVI), Accolade (ACCD) 8:30 a.m. ET: Initial Jobless Claims Friday, October 7 Before the bell: Tilray (TLRY) 8:30 a.m. ET: Nonfarm Payrolls (Jim Cramer's Charitable Trust is long AAPL, MSFT, MS, AMZN, CRM, HON, EL, DIS and STZ. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. | 2022-09-30T20:41:35Z | www.cnbc.com | Good riddance September: We gauge the damage and get ready for October | https://www.cnbc.com/2022/09/30/good-riddance-september-we-gauge-the-damage-and-get-ready-for-october.html | https://www.cnbc.com/2022/09/30/good-riddance-september-we-gauge-the-damage-and-get-ready-for-october.html |
WASHINGTON, USA - JULY 28: House Majority Leader Steny Hoyer (D-MD) speaks during a news conference on the Wildfire Response and Drought Resiliency Act inside the U.S. Capitol in Washington, United States on July 28, 2022
Nathan Posner | Anadolu Agency | Getty Images
If the resolution had not been passed, the government would have shut down due to Friday evening's deadline for approval of the upcoming federal budget.
"While I am disappointed that we could not complete full appropriations this month, I am glad that we were able to include key funding provisions in this continuing resolution that address critical needs," House Majority Leader Steny Hoyer, D-Md., said Friday. | 2022-09-30T20:41:54Z | www.cnbc.com | House passes funding measure to avoid government shutdown | https://www.cnbc.com/2022/09/30/house-passes-stopgap-funding-measure-to-avoid-federal-government-shutdown.html | https://www.cnbc.com/2022/09/30/house-passes-stopgap-funding-measure-to-avoid-federal-government-shutdown.html |
Rising medical costs and the recent stock-and-bond market volatility may have Americans considering investing in health savings accounts, especially with open enrollment season getting underway. HSAs, in which people with high-deductible insurance plans save for qualified medical expenses, have one thing that no other investment has: a triple tax benefit. Contributions are tax deductible; investment growth, interest and dividends are tax-exempt and there are no levies on any withdrawals for qualified medical expenses. Yet to get the most out of that tax savings, you'll have to put some of the money into longer-term investments, so it can grow tax free and ideally be used in retirement. The money in your account rolls over year after year, unlike flexible-spending accounts. You can also get reimbursed years later for qualified expenses incurred now, as long as you hang on to the receipts. "It's another retirement bucket," said certified financial planner Candace Lee, vice president at Glassman Wealth Services in Vienna, Virginia. However, she suggests first maxing out your retirement accounts, such as a 401(k), before maxing out your HSA. You can contribute up to $3,650 for individual coverage and up to $7,300 for family coverage in a 2022 HSA. Next year, that maximum increases to $3,850 in an individual health insurance plan and to $7,750 with a family plan. It's helpful to have some money saved for future medical expenses, since they are likely to be higher when you are older. A 65-year-couple retiring this year can expect to shell out an average $135,000 in medical and health-care expenses in their retirement, not including long-term care, according to an estimate by Fidelity Investments . That is 5% higher than last year's estimate. Yet it is not just senior citizens affected by high medical bills. Health-care spending overall has also grown, making up 20% of total U.S. gross domestic product in 2020, compared to just 5% in 1960. That's why it's important to also keep money available in an HSA to pay any out-of-pocket costs that you can't cover with your income. A good rule of thumb is to have the amount of your deductible set aside in cash or fixed income, said CFP Carolyn McClanahan, founder and director of financial planning at Life Planning Partners in Jacksonville, Florida. The average general annual deductible for an HSA-qualified high-deductible health plan in 2021 was $2,454 for single coverage, according to the Kaiser Family Foundation . "You have to make sure that you have the ability to absorb that [deductible] should some catastrophic event happen to you," she said. Most Americans avoid putting any stocks or bonds in their HSAs, which means they are potentially losing out on tax-advantaged long-term investment growth. Just 9% of HSA accounts had made investment elections across providers, according to Morningstar's 2022 Health Savings Account Landscape report . However, investing account assets accounted for over 36% of total assets, the report found. Choosing an HSA You can participate in your employer's HSA, if one is offered. Some companies also contribute towards your savings. Covered workers enrolled in HSA-qualified, high-deductible health-care plans, on average, receive an annual employer contribution to their HSA of $575 for single coverage and $987 for family coverage, according to the Kaiser Family Foundation. You can also open an individual account through a provider. Morningstar ranked 10 of the top HSA providers on two uses: as a spending account to cover current costs and as an investment account, meant to save for the future. Fidelity came out on top for both. Fidelity's 1.19% interest rate on its spending accounts is the highest offered. It also has no maintenance or other additional fees. When it comes to the investing accounts, providers should offer compact, yet diverse investment lineups of high-quality strategies at the lowest possible prices, regardless of whether they are active or passive, wrote Tom Nations, Morningstar's associate director of multi-asset and alternative strategies. In determining its rankings, Morningstar assessed HSAs' menu designs, quality of investments, total costs to the investor and the investment threshold — the amount of money required to be kept in the account before putting dollars towards investments. Five of the 10 providers offer brokerage windows tied to the account, so users can invest in whatever is available on the brokerage platform, Nations noted. Those are Fidelity, First American Bank, HSA Bank, Lively and Optum. All 10 offer investment menus. If your employer offers an HSA, you can compare costs and investment options with the individual plans. You can choose to stick with your employer's plan for your contributions or you can open a separate account. The easiest way to do it from a tax perspective is to fund your employer account through payroll deductions, if that is an option, and then transfer it to your individual account, Nations told CNBC. "You can transfer over the balance fairly regularly without incurring any tax consequences," he said. However, depending on the provider, you may have transfer fees. Deciding how to invest How you will use your HSA will determine your overall investing strategy. Morningstar laid out three different approaches in its report. The first, the bucket approach, entails dividing assets into three needs-based pails that can separate HSA spending money from longer-term investing assets. Near-term money goes into very conservative cash, money markets and short-term bonds. Money that isn't needed for another seven to 10 years is allocated to high-quality bonds. Anything you stash away for more than a decade can go into equities. Balanced and target-risk strategies, like the Vanguard LifeStrategy series, provide a one-stop alternative if you don't want to manage multiple funds, Nations said. These are good for intermediate- to long-term money, which means you may have to shift around money for immediate needs. However, the strategies' managers will rebalance. Lastly, if you can afford to pay your out-of-pocket costs without dipping into your HSA, you can invest for the long term. Nations doesn't suggest treating it like your 401(k) or IRA, however. While you can use your retirement plan as a template for your HSA, consider dialing down the equity risk in case you wind up needing the money. "Don't be a forced seller. Avoid tapping HSA balances during market downturns because doing so depletes reserves and principal that could compound when the markets recover and over the long term," Nations wrote. On the other hand, if you absolutely know you won't need to tap your HSA until retirement, Carolyn McClanahan suggests getting more aggressive in it compared to your retirement plans. "Too many people make their investments all mirror each other. That is not tax smart," she said. Both the Roth IRA and HSA get to grow "tax free forever" so they should be the last thing you touch. When it comes to what to invest in, McClanahan said keep it simple and aligned with your overall investment policy. "Don't get fancy with your HSAs. Use low-cost index funds," she said. Also keep in mind that once you get to age 65, you can withdraw money for non-qualified medical expenses and are taxed on it just like your 401(k) or IRA. "There is no penalty for over-saving in them," Nations said. | 2022-09-30T20:42:00Z | www.cnbc.com | Medical costs are rising. Stocks are slumping. How to get the most bang out of your HSA | https://www.cnbc.com/2022/09/30/how-to-get-the-most-bang-out-of-your-hsa.html | https://www.cnbc.com/2022/09/30/how-to-get-the-most-bang-out-of-your-hsa.html |
Wharton Professor Jeremy Siegel has received a lot of attention for his harsh criticism of the Federal Reserve recently , but that's not why he is famous. His 1994 book, "Stocks for the Long Run," chronicled almost 200 years of investing in stocks and bonds, and contained groundbreaking research on the long-term outperformance of stocks over bonds and the effect of inflation on both those investments. Siegel's masterwork is one of a small handful of books in the past 30 years (including Burton Malkiel's "A Random Walk Down Wall Street," Charles Ellis' "Winning the Loser's Game," and Jack Bogle's "Common Sense on Mutual Funds") that have become investment classics. Professor Siegel is back with the 6th edition of his book, completely updated with new data on the long-term performance of stocks and bonds, and whole new chapters on real estate returns (looking at REITS for fifty years), factor and ESG investing, indexing vs. active investing, and the optimum stock/bond allocation. The book is co-authored with Jeremy Schwartz, global chief investment officer at WisdomTree. I spoke with Professor Siegel from his home in Philadelphia. The excerpts below have been edited for length and clarity. Watch the full interview above. It's been eight years since the last edition of "Stocks For the Long Run." Why did you feel the need to update the book? Why well, think of how much had happened. I mean, the great bull market since the financial crisis... I wrote the last one just a couple of years after the crisis... So many questions came up. And this is by far the greatest revision that I have. There are five new chapters in it. There are many supplements of factors. I added real estate returns. talk about bitcoin, just to mention some of some of the new items that are in the book. As in previous editions, you conclude that real (inflation adjusted) returns on stocks have remained at 6.7% a year, roughly 10% or so not including inflation. adjusted. I think the key takeaway here is that in the long run stocks do tend to overcome inflation. Absolutely. Despite all the ups and downs and crises, and bear markets that we've had over the last 30 years, the real return on stocks has been absolutely the same, which is really quite remarkable. And secondly, as you point out, not only do stocks tend to overcome inflation in the long run, they completely overcome inflation. They have trouble when the Fed is tightening. We see that now. But once that tightening is done, once normalization comes back, they make up the lost ground and they get back to that long-term trend. The problem here right now is inflation is suddenly as high as it was in parts of the 1970s. Stocks can underperform during periods of sudden inflation. And how do you overcome that? What do you do about that? Well, it's actually when the Fed tightens and raises real interest rates all assets go down in price. Look at bonds, stocks, real estate started to go down. There's no question about that. And in fact, many commodities now are going down. I mean, the basic theorem of finance is that the value of any asset is the present value of all its cash flows, which is discounted at an interest rate. When the Fed is raising interest rates, all those assets are gonna go down. So unless you can time the market, there's really no place to hide. And this goes to the next question about indexing and staying in low cost index funds. Would you say the evidence is still as compelling as ever? The recent S & P SPIVA study concluded that 90% of large cap active managers underperform their benchmarks after 10 years. Bob, not only is the evidence still there, it's more persuasive than when I wrote the first edition of the book. The percent of funds that can beat the S & P 500 has gone down and down over time. Some pick better stocks, but once fees are included, indexing comes out better than ever. Why is that? What accounts for this persistent underperformance? Charlie Ellis used to say it's not because active managers are stupid. They're actually really good. They're just competing against other active managers and they don't have an information advantage. That is a very important reason. But the other is the costs. I mean, you can now get index funds that charge three or four basis points, active funds can be 60 to 100 basis points. Once the costs are subtracted, you're behind the index fund. What about style or factor investing? Academic research has suggested that some investing styles like small cap, value, or momentum outperform over long periods. What are your conclusions? There's been literally dozens of factors that people have found. But one thing that I found very surprising and not in the literature at all, is that virtually all of those factors stopped performing in 2006, just prior to the Financial Crisis. What about growth versus value? There seems to be 25-year cycles when growth just really outperforms value and I think we just passed through one of them. Amazon, you know, Microsoft, Apple, of course, but yet we see that over the long run, those stocks do not keep up their superior growth. Is there something that's happened since 2006 that's caused this this breakdown? I think there's a couple of things that went on, first of all, the Financial Crisis crashed the banks and they were the value stocks. And then of course, what we've seen over the last 15 years is the unprecedented growth of the mega tech stocks. We've never seen a period in history, where stocks that weren't even in existence 10-15 years ago, have suddenly become the biggest cap stocks in the entire market. How about ESG: Environmental, Social and Governance. What do you think of it as an investment style? The first thing I do is contrast them with Milton Friedman fifty years ago, who said that what CEOs should be doing is making the most money and not paying attention to the social. Well, what we find is that maybe if, by doing well, you could also do good. For instance, you can charge more for organically grown food and make a profit. It doesn't necessarily contradict that by doing well. Certainly things like diversity and the social part of that becomes hard to define. I share some of the suspicions about everyone getting on the bandwagon to try to be properly diverse or socially governing in the exact way that fits the model. But the truth of the matter is that ESG investing does not necessarily mean that you're going to grossly underperform the market. What about an optimal stock/bond allocation? Last year at this time, everyone was saying the 60/40 stock/bond allocation was dead forever. Now bond yields are rising. My feeling is you should be moving to a 75/25 or 80/20 stock/bond portfolio. There has been a very marked international decline in real (inflation adjusted) returns, which means that you're not going to get the after-inflation rate of returns in bonds that you once did. And yet the valuation of stocks has remained much more stable. Now, I know yields have gone up sharply. And some people have said, "My goodness 4% yield on (2 year) bonds, doesn't that look good?" Remember that is 4% before inflation, take that and compare it with the long run real return on stocks, which is 6.7% after inflation. Tell me where you want to be. Is there any reason to expect that the returns for the next decade or so might be subpar? Stanley Druckenmiller said he wouldn't be surprised if the Dow Industrials was the same where it is now 10 years from now. I see no way that 10 years from now the Dow will be the same. I mean, we might go through a recession. I talked about the big monetary explosion [that the Fed created] but that basically is going to raise the price level of everything. And as we said at the beginning of this interview, stocks are claims on real assets, they're claims on land and capital, intellectual property, copyrights, plant equipment. Those things will go up with inflation. That the Dow is going to be the same 10 years from now, really, I think totally flies in the face of history. You have a new chapter on real estate new data, looking back 50 years. I would have real estate in my portfolio. I would definitely have REITs and as you know, the S & P added that as the 11 sector of the market. What about home ownership? You should own your home… But don't forget the real estate market and all the commercial real estate. One reason the REITs have done really quite well since the pandemic is because they don't have as big ownership of some of those commercial buildings. A lot of the hot warehousing data centers, things like that, they've done very, very well. Professor, thanks for joining us on CNBC Pro.
Bob Pisani8 min ago | 2022-09-30T20:42:12Z | www.cnbc.com | Jeremy Siegel says you should still bet on stocks for the long run as market will overcome inflation | https://www.cnbc.com/2022/09/30/jeremy-siegel-says-you-should-still-bet-on-stocks-for-the-long-run-as-market-will-overcome-inflation.html | https://www.cnbc.com/2022/09/30/jeremy-siegel-says-you-should-still-bet-on-stocks-for-the-long-run-as-market-will-overcome-inflation.html |
The organizers of the Met Gala announced next year's theme, honoring the work of Karl Lagerfeld.
The benefit and accompanying exhibition will celebration and explore his nearly seven-decade career in the fashion industry.
Karl Lagerfeld attends the Conde' Nast International Luxury Conference at Palazzo Vecchio on April 22, 2015 in Florence, Italy.
The Metropolitan Museum of Art announced on Friday next year's Met Gala theme: a celebration of the works of the late German designer Karl Lagerfeld.
The Gala, formally known as The Costume Institute Benefit, is an annual fundraiser scheduled for the first Monday in May — for next year, that means May 1. It is followed by the institute's annual spring exhibition, this year titled "Karl Lagerfeld: A Line of Beauty," which will be on view from May 5 through July 16.
Lagerfeld spent the majority of his life in the fashion world, with his first designs debuting in the 1950s. His final collection — following a nearly seven-decade career — was released in 2019. Lagerfeld died that same year at the age of 85. The Met's exhibition will showcase approximately 150 garments from Lagerfeld's time as creative director at several iconic, high-fashion retailers, including Chloé, Fendi and Chanel, as well as from his eponymous label.
"This immersive exhibition will unpack his singular artistic practice, inviting the public to experience an essential part of Lagerfeld's boundless imagination and passion for innovation," Max Hollein, a director at The Met, said in a press release.
The pieces will also be accompanied by Lagerfeld's sketches.
The Gala operates on an invitation-only basis, bringing celebrities, influencers and media personalities from around the globe. Themes are intended to guide attendees' fashion choices. This past year's theme, "In America: A Lexicon of Fashion," focused on American fashion throughout the decades. Other notable recent themes include "Camp: Notes on Fashion" (2019), "Heavenly Bodies: Fashion and the Catholic Imagination" (2018) and "China Through the Looking Glass" (2015).
The benefit serves as The Costume Institute's main source of funding for its exhibitions, publications and other operations. This year's celebrity co-chairs — who will follow on the heels of Blake Lively and Ryan Reynolds — are yet to be announced.
Funding for this year's event comes from Chanel and Fendi, as well as from Karl Lagerfeld and Condé Nast. | 2022-09-30T20:42:24Z | www.cnbc.com | Met Gala 2023 theme will celebrate late designer Karl Lagerfeld | https://www.cnbc.com/2022/09/30/met-gala-2023-theme-will-celebrate-late-designer-karl-lagerfeld.html | https://www.cnbc.com/2022/09/30/met-gala-2023-theme-will-celebrate-late-designer-karl-lagerfeld.html |
Activists gather to rally in support of cancelling student debt, in front of the White House in Washington, DC, on August 25, 2022.
Hundreds of thousands of borrowers will no longer qualify for President Joe Biden's student loan forgiveness program, according to new guidance from the U.S. Department of Education.
In a stunning reversal from previous guidelines, many borrowers who have federal student loans that are owned by private entities are no longer eligible for debt relief.
In August, the Biden administration announced that the government would forgive up to $10,000 in federal student loans for those making less than $125,000 a year for individuals or $250,000 for married couples or heads of households and up to $20,000 for Pell Grant recipients who meet the income threshold. Private loan holders are not included in the plan.
Here's what the updated guidance — and a new legal challenge to Biden's student loan forgiveness plan —mean for borrowers.
Who no longer qualifies for debt relief?
Until Thursday, borrowers with privately held federal student loans qualified for relief if they consolidated their loans into the Direct Loan program.
According to the new guidance, however, borrowers with FFEL or Perkins loans not held by the department can no longer obtain one-time debt relief through consolidation, and will only qualify for forgiveness if they applied for consolidation before Sept. 29.
The development will affect "a small percentage of borrowers," Michelle Dimino, a senior education policy leader at public policy group Third Way, tells CNBC Make It. About 4.1 million federal borrowers have $108.8 billion in loans held by private lenders as of June 30, according to the most recent federal data.
This change will not impact all 4 million borrowers with commercially held FFEL loans, as many also have a direct loan from the government that qualifies for relief and others do not meet the program's income requirements, an administration official told Politico.
The department did not immediately respond to CNBC Make It's request for comment.
Ultimately, close to 800,000 borrowers will be directly affected by the policy change, NPR reports.
How can I check if I am still eligible for student loan forgiveness?
First, you should verify that you meet the income threshold by checking your 2020 and 2021 tax returns, as experts say that the administration will likely estimate your annual income from either, or both, of those forms.
The best way to confirm whether or not you will be affected by changes to the program is by calling your loan servicer and asking what kind of loans you have, says Scott Buchanan, executive director of the Student Loan Servicing Alliance.
Since the FFEL program ended in 2010, if you took out any federal loans after that year, they're likely held by the government, and you'll still qualify for relief, Buchanan adds.
Could legal challenges to the forgiveness plan delay relief?
Earlier this week, an attorney for the Pacific Legal Foundation, a conservative law organization, launched the first major legal challenge to Biden's plan.
"This won't be the last legal challenge we'll see, and any of those have the potential to delay or indefinitely pause the rollout of the relief," Domino says. "There's a lot of complicated factors for the department to work through, because no other administration has attempted wide-scale debt relief like this before."
Attorneys general in Missouri, Arizona, Texas and other states are also "considering their options" to block loan forgiveness, CNBC reports.
Buchanan adds that while there's been a lot of noise, the most reliable source borrowers can check for information about the plan is what the Education Department is publishing on its FAQ page. He also encourages borrowers to sign up for the department's "federal student loan borrower updates" emails to be notified when the application is live.
On its website, the department said it is still assessing "whether there are alternative pathways to provide relief to borrowers with federal student loans not held by [the Education Department], including FFEL Program loans and Perkins Loans," and is discussing possible actions with private lenders.
Biden announces $10,000 student loan forgiveness plan—here's who qualifies | 2022-09-30T20:42:48Z | www.cnbc.com | Over 700,000 borrowers no longer qualify for student loan relief | https://www.cnbc.com/2022/09/30/over-700000-borrowers-no-longer-qualify-for-student-loan-relief.html | https://www.cnbc.com/2022/09/30/over-700000-borrowers-no-longer-qualify-for-student-loan-relief.html |
Biden responds to Putin's threats; Kyiv plans to fast-track bid to join NATO
Ukraine and the rest of the West is responding to Russian President Vladimir Putin's latest escalation of the war, a decree signed by the Russian leader on Friday declaring that four partially occupied regions of Ukraine are now part of Russia.
In Washington, President Joe Biden had harsh words for the Russian leader. NATO allies, he said, "are not going to be intimidated by Putin and his reckless words and threats. He's not going to scare us and he doesn't intimidate us."
"America is fully prepared with our NATO allies to defend every single inch of NATO territory," Biden said at the White House. "Every single inch. So, Mr. Putin, don't misunderstand what I'm saying. Every inch."
The U.S. also announced new sanctions on Russia. Hundreds of Russian lawmakers and the family members of senior national security officials were designated.
The new sanctions also target front companies outside of Russia that were created this year to help Russian defense contractors evade already existing sanctions and export controls.
According to the Treasury Department, the U.S.-led sanctions campaign has "devastated Russia's ability to access foreign components and technology. As a result, Russia's defense-industrial base is desperate to provision its war efforts and has resorted to third-country intermediaries and suppliers."
European Council president: Annexation is 'dangerous and irresponsible escalation'
European Council President Charles Michel attends EU Leaders Summit on Russia-Ukraine crisis in Brussels, Belgium on February 24, 2022.
European Council President Charles Michel condemned Russia's annexation of four regions of Ukraine in a video message saying the European Union will never recognize them.
"It is a dangerous and irresponsible escalation. It's designed as a step to intensify the nuclear threat against the rest of the world," Michel said.
"The European Union unequivocally rejects and condemns these illegal annexations," he added.
Biden's message for Putin: U.S.will 'defend every single inch of NATO territory'
U.S. President Joe Biden delivers remarks on the Inflation Reduction Act of 2022 at the White House in Washington, U.S., July 28, 2022.
With a steely demeanor, President Joe Biden responded to Vladimir Putin's speech, which was laced with threats against NATO and the United States.
NATO allies "are not going to be intimidated by Putin and his reckless words and threats. He's not going to scare us and he doesn't intimidate us."
"Putin's actions are a sign he's struggling. "are not going to be intimidated by Putin and his reckless words and threats. He's not going to scare us and he doesn't intimidate us."
Russian use of nuclear weapons in Ukraine is 'unthinkable,' Canada's foreign minister says, but allies must be ready
Canada's Minister of Foreign Affairs Melanie Joly addresses the 77th Session of the United Nations General Assembly at U.N. Headquarters in New York City, September 26, 2022.
Canadian Foreign Minister Melanie Joly said that her country, along with the U.S. and G-7 members have discussed the possibility of Russian President Vladimir Putin escalating the war in Ukraine through the use of nuclear weapons.
"Obviously this is unthinkable, but we have to be ready," Joly told reporters at the State Department, where she met with U.S. Secretary of State Antony Blinken.
In recent weeks, the Kremlin has claimed Russia has the right to use nuclear weapons in order to defend itself from Ukraine. Western allies have slammed the rhetoric regarding nuclear warfare, and have warned Moscow of swift and devastating consequences if they were to use a nuclear weapon.
Zelenskyy vows to retake parts of Ukraine occupied by Russia
Ukrainian President Volodymyr Zelenskyy repeated his pledge to retake all Ukrainian territory held by Russia, regardless of Russia's decree annexing four partlially occupied regions of Ukraine.
"The entire territory of our country will be liberated from this enemy, the enemy not only of Ukraine but also of life itself, humanity, law and truth," Zelenskyy said in a video address. "Russia already knows this. It feels our power," he added.
The Ukrainian leader also said that he is ready for negotiations to end the war but added: "with another president of Russia."
National security advisor Sullivan speaks to NATO chief as Russia annexes parts of Ukraine
NATO Secretary General Jens Stoltenberg stands during a press conference with Ukrainian President in Kiev on July 10, 2017.
National security advisor Jake Sullivan spoke with NATO Secretary General Jens Stoltenberg as Russia attempts to illegally annex Ukrainian territory via sham referenda.
The two reaffirmed their "commitment to Ukraine's sovereignty and territorial integrity," according to a White House readout of the call. They also discussed the apparent sabotage of the Nord Stream pipelines in the Baltic Sea and ways to better protect critical infrastructure.
Putin accuses U.S. and Western allies of attacking Nord Stream pipelines
Russian President Vladimir Putin has accused the United States and its allies of blowing up the Nord Stream natural gas pipelines.
"The sanctions were not enough for the Anglo-Saxons: they moved onto sabotage," Putin claimed in a speech that was filled with false accusations against both Europe and the U.S.
"It is hard to believe, but it is a fact, that they organized the blasts on the Nord Stream international gas pipelines," the Russian leader alleged, without offering any evidence.
The one thing Putin and the West agree on, however, is that the Sept. 26 explosions and the holes discovered in the two massive energy pipelines were not the result of an accident.
The European Union said it suspected sabotage was behind the damaged pipelines, which are currently leaking large plumes of natural gas into Swedish and Danish waters.
The White House has dismissed Russian allegations that America was behind the attacks.
— Reuters and CNBC's Christina Wilkie
Biden slams Russian annexation, declares 'these actions have no legitimacy'
U.S. President Joe Biden speaks at an event on health care costs, Medicare and Social Security, in the Rose Garden at the White House in Washington, September 27, 2022.
President Joe Biden slammed Moscow's illegal annexation of four partially occupied regions of Ukraine, and responded to them with a punishing new round of economic and trade sanctions.
"Make no mistake: these actions have no legitimacy," Biden said in a statement, following Russian President Vladimir Putin's announcement that the Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia and Kherson were now a part of Russia.
"I urge all members of the international community to reject Russia's illegal attempts at annexation and to stand with the people of Ukraine for as long as it takes," said Biden, vowing that America and its allies would hold the Kremlin accountable.
Biden also said the U.S. would continue to support Ukraine with humanitarian aid, in addition to the billions of dollars in security assistance it has already committed to the fight.
Zelenskyy says Ukraine will seek 'accelerated accession' to NATO membership
Ukraine's President Volodymyr Zelenskiy attends the NATO summit via video link, as Russia's attack on Ukraine continues, in Kyiv, Ukraine June 29, 2022.
Ukrainian President Volodymyr Zelenskyy said his country is submitting an 'accelerated' application to join the NATO military alliance. The announcement comes just hours after Russian President Vladimir Putin held a ceremony to formalize Russia's annexation of four regions of Ukraine.
"We have already made our way to NATO ... we have already proven compatibility with alliance standards. They are real for Ukraine real on the battlefield and in all aspects of our interaction," Zelenskyy said on the Telegram messaging app.
"We are taking our decisive step by signing Ukraine's application for accelerated accession to NATO," he added.
U.S. set to announce new sanctions on Russia in response to Ukraine annexation
The Biden administration is expected to impose new sanctions against Russia in response to the Kremlin's illegal annexation on Friday of four regions of Ukraine.
Russian President Vladimir Putin delivered a speech in which he railed against America and Europe, before signing a decree formally annexing Donetsk, Luhansk, Zaporizhzhia and Kherson.
Putin's address comes on the heels of referendums in the territories that were widely viewed as rigged and illegitimate.
Nord Stream gas leaks sees methane spewing into the atmosphere
Researchers acknowledge that it is difficult to accurately quantify the size of the emissions and say the leaks are a "wee bubble in the ocean" compared to the massive amounts of methane emitted around the world every day.
Putin says Russia is not aiming for the return of the Soviet Union
Russia is not seeking the return of the Soviet Union, Vladimir Putin said during his speech to Russian lawmakers announcing the annexation of four of Ukraine's territories.
"People born after the tragedy of the end of the Soviet Union, they wanted unity in 1991," Putin said. "There was a decision by representatives of the leading party to dissolve the USSR. And this has destroyed the connections between different parts of our country."
Putin has long held that the dissolution of the USSR was a mistake and the most catastrophic event in history.
"The Soviet Union is no longer there, and cannot return to the past," he said.
"For Russia we don't need this anymore, we are not aiming for that. But there is nothing stronger than the will of mission of people who decided they want to be part of Russia. For generations they lived in a single country and there is nothing stronger than the will of these people to return to their historic roots."
Putin declares four new regions of the Russian Federation
Russian President Vladimir Putin chairs a meeting on agriculture issues via video link in Sochi, Russia September 27, 2022. Sputnik/Gavriil Grigorov/Pool via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.
Russian President Vladimir Putin announced the annexation of four regions of Ukraine under its occupation during a speech in front of lawmakers in Moscow.
"People have made a definitive choice, today we are signing a decree on Luhansk People's Republic, Donetsk People's Republic, Zaporizhzhia and Kherson," Putin said. "I am sure the Federal Assembly will support the laws of creating four new subjects of the Russian Federation because this is the will of millions of people."
"It is the self determination of people, the right that is based on the historical unity which was defended by generations of our people, people who for generations protected Russia," he said.
The speech follows a widely-criticized sham referendum held by Russia in the occupied territories, which make up roughly 18% of Ukraine's land, that resulted in what Moscow said were overwhelming votes to join the Russian Federation.
Kremlin says attacks on any part of Ukraine that Russia is set to annex is an attack on Russia itself
Attacks on any part of Ukraine that Russia is about to annex will be considered an attack on Russia itself, Kremlin spokesman Dmitry Peskov told reporters.
Russian President Vladimir Putin is slated to officially declare the annexations of four Ukrainian regions during a ceremony today, for which celebrations at Red Square are planned.
The classification raises the stakes for the conflict as Putin has threatened the use of nuclear weapons in the event of any attacks on Russian territory. And just as the annexations are to be announced, Ukrainian forces have surrounded thousands of Russian troops in the strategic town of Lyman in northern Donetsk, one of the territories set for annexation.
The situation raises the question of exactly what parts of these territories — Donetsk, Luhansk, Kherson and Zaporizhzhia — Russia can actually annex and control. Altogether, they constitute roughly 18% of Ukraine's land.
Peskov said that all of Donetsk would be under Ukrainian control, but did not specify whether all of Kherson of Zaporizhzhia would be.
"We will clarify everything today," he said.
Russian forces face potential imminent defeat in Ukraine's Lyman
Ukrainian soldiers rest at their position near Lyman, eastern Ukraine, on April 28, 2022, amid Russian invasion of Ukraine. (
Ukrainian forces have almost fully surrounded Russian troops occupying Lyman, a town in the north of Ukraine's Donetsk province, raising the possibility of another Russian loss just as President Vladimir Putin is set to announce the province's annexation.
"Ukrainian troops have likely nearly completed the encirclement of the Russian grouping in Lyman and cut critical ground lines of communication (GLOCS) that support Russian troops in the Drobysheve-Lyman area," a tweet from the Institute for the Study of War read. Roughly 5,500 Russian troops are reported to be in the town, which has been occupied since May.
The town is home to a strategic railway junction. Ukrainian forces have made rapid advances in the area in recent days and are now positioned to fire on the only route out of Lyman.
This is part of the enormous swathe of eastern and southern Ukrainian territory, encompassing four regions, that Putin is set to annex after holding a sham referendum entirely controlled by Russia that concluded in majority votes to join the Russian Federation.
Putin has warned that any threats to the territory of Russia would justify its use of nuclear weapons.
Ukrainian servicemen walk by a crater left by a missile strike near Zaporizhzhia on September 30, 2022, amid the Russian invasion of Ukraine.
EDITORS NOTE: Graphic content / Ukrainian policemen check cars damaged by a missile strike on a road near Zaporizhzhia on September 30, 2022, amid the Russian invasion of Ukraine.
A couple hug each other near cars damaged by a missile strike on a road near Zaporizhzhia on September 30, 2022, amid the Russian invasion of Ukraine.
A municipal worker casts her ballot during a referendum on the secession of Zaporizhzhia region from Ukraine and its joining Russia, in the Russian-controlled city of Melitopol in the Zaporizhzhia region, Ukraine September 26, 2022. | 2022-09-30T20:43:25Z | www.cnbc.com | Live updates: Latest news on Russia and the war in Ukraine | https://www.cnbc.com/2022/09/30/russia-ukraine-live-updates.html | https://www.cnbc.com/2022/09/30/russia-ukraine-live-updates.html |
Cramer’s week ahead: 3 events will determine if the market's bad momentum will continue in October
CNBC's Jim Cramer on Friday said that three key events next week will determine if the nightmarish month for the stock market will continue into October.
The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average and the Nasdaq Composite fell 8.8% and 10.5%, respectively, for the month.
Here are the events:
The release of the nonfarm labor report Friday. Cramer said he expects it to show inflated hiring and wages.
Two speaking engagements by Cleveland Fed President Loretta Mester, who Cramer believes is the primary inflation hawk on the Federal Open Market Committee. "She wants to protect us … from high inflation, even if that means raising interest rates into a recession," he said.
While it's likely that Mester and the report will both bring bad news, investors can protect themselves from the market wreckage if they stick to a solid game plan, according to Cramer.
"Own high-quality companies with good balance sheets and high dividends that will benefit from a decline in inflation, because that's what's going to happen," he said.
He also previewed next week's slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
Wednesday: Helen of Troy, Lamb Wesson
Q2 2023 earnings release before the bell; conference call at 9 a.m. ET
Projected revenue: $521 million
Projected EPS: 79 cents
"We saw this from Nike last night — all that happens is the downside gets accentuated as the upside just treads water or goes marginally higher. That's what I expect will happen with both when they report," Cramer said.
Thursday: Constellation Brands, Conagra Brands, McCormick, Norwegian Cruise Line Holdings
Q2 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
He said he expects the company's top line to be "extraordinarily good."
Q1 2023 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
The company needs to grow its business, according to Cramer.
Q3 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
Projected revenue: $1.6 billion
Cramer said that the company's earnings call will simply reinforce its preannounced weaker-than-expected third-quarter earnings and full-year outlook cut earlier this month.
Investor meeting at 10 a.m. ET
Cramer said that he expects Norwegian to be performing better than competitor Carnival, which struggled with higher costs in its latest quarter, but it's unclear whether that will be enough to help Norwegian's stock.
Friday: Tilray Brands
Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
Projected loss: loss of 5 cents per share
He predicted that the company will make a "bold" statement about the legalization of cannabis and said he's pondering whether this could be a great speculative stock to own during the Biden administration.
Disclosure: Cramer's Charitable Trust owns shares of Constellation Brands. | 2022-09-30T22:49:58Z | www.cnbc.com | Cramer’s week ahead: 3 events will set the market's tone for October | https://www.cnbc.com/2022/09/30/cramers-week-ahead-3-events-will-set-the-markets-tone-for-october.html | https://www.cnbc.com/2022/09/30/cramers-week-ahead-3-events-will-set-the-markets-tone-for-october.html |
Medical costs can eat up a sizeable portion of your retirement savings — here's how much you should expect to spend
A recent study found that people are spending a lot of their retirement income on medical bills.
If you're saving for retirement, you're likely building up a nest egg that will cover the food, housing, transportation and medical expenses you'll have in your golden years. You're probably also stashing away at least 15% of your paycheck and anticipating a savings withdrawal rate of no more than 4%.
While you may be doing all the right things when it comes to saving for retirement, it might be that you simply haven't stowed away enough money. A recent report by the Center for Retirement Research at Boston College found that a significant portion of retirees' savings and Social Security benefits went towards covering their medical expenses.
Below, Select takes a closer look at what percentage of retirees' income is spent on medical expenses and how you can better prepare to handle these costs in retirement.
The cost of medical expenses in retirement
In the brief, researchers used data from the 2018 Health and Retirement Study to see how much of retirees' Social Security benefits and total retirement income was going toward medical-related expenses such as Medicare premiums, prescription drugs, surgeries and doctor visits. And while it may seem like having Medicare means paying lower medical costs, this was not the case.
The study found that, in 2018, 12% of the median retiree's total retirement income went toward medical expenses. For the median retiree, 25% of their Social Security benefits went towards medical costs. In total, the median retiree spent $4,311 on medical expenses, with most of that money going toward Medicare premiums.
In 2022, the monthly premium for Medicare Part B, which is medical insurance, was $170.10.
"With out-of-pocket health expenditures eating away at retirement income and Part B premiums on the rise, it is understandable why many retirees likely feel that making ends meet is difficult," the researchers noted.
It also turns out that people preparing for retirement aren't great at forecasting how much they'll spend on medical expenses later in life, as another recent study by the Center for Retirement Research at Boston College found.
According to the 2022 Fidelity Retiree Health Care Cost Estimate, the average retired couple at age 65 can expect to spend around $315,000 on health care expenses in retirement.
How to prepare for medical expenses in retirement
So, if you're planning for retirement, how can you best prepare for these medical costs ahead of time? There are a number of ways to use tax-advantaged accounts and insurance products to help cover healthcare costs.
401(k)s and IRAs
First off, you should focus on maximizing tax-advantaged investment accounts such as your employer-sponsored 401(k) or a traditional or Roth IRA. With a 401(k) and traditional IRA, the money will not be taxed until you withdraw it in retirement. With a Roth IRA, money is taxed upfront which allows your investments to grow tax-free over time.
If your employer offers a 401(k) match, take advantage of that since it's essentially free money. If you're eligible for a traditional or Roth IRA, consider opening one with Charles Schwab, Fidelity Investments, Vanguard or Betterment. Select ranked these companies as offering the best IRAs based on factors such as the variety of investment options, low fees and ease of use.
Health Saving Accounts
Additionally, if you're enrolled in a high-deductible healthcare plan, you should think about contributing to a Health Savings Account, a tax-advantaged investment account that can be used to pay for medical expenses.
For 2022, the yearly contribution limit is $3,650 for single-earners and $7,300 for families. Those who are age 55 and older are eligible for catch-up contributions of an additional $1,000 per year. Note that if you don't use the money you saved in a given year, the funds will be rolled over to the next year.
Generally, Health Savings Accounts offer three major tax advantages. Contributions are tax-deductible which means they will reduce your overall taxable income. You also won't pay taxes on your contributions.
You can then withdraw HSA funds for qualified medical expenses such as co-pays, co-insurance, prescription drugs and menstrual products. Once you hit age 65, you can use the funds from your HSA to take care of any expenses, not just out-of-pocket medical costs.
Additionally, if you choose to invest your funds, you won't have to pay taxes on your earnings.
Similar to a traditional or Roth IRA, you can invest the funds in your HSA into exchange-traded funds, mutual funds and stocks. You'll want to look into the rules of your Health Savings Account first, as some of them have a minimum amount requirement that must be reached before you can start investing your funds.
Long-term care insurance and Medigap
If the out-of-pocket costs of healthcare in retirement are still high even after Medicare coverage, you might opt for supplemental Medicare insurance which is known as Medigap.
Medigap is provided through private insurance companies and can be used to fund Medicare co-pays, deductibles and coinsurance. Individuals must be age 65 or older and need to be enrolled in Medicare Part A (hospital services) and Part B (medical insurance). With Medigap, individuals pay a premium for the supplemental insurance in addition to any premiums they must pay for Medicare Part A and B.
Another type of insurance you may look into is long-term care insurance which is used to fund nursing home stays, assisted living and adult daycare expenses. Since Medicare and Medigap do not generally cover these expenses, it may be wise to start shopping for a long-term care insurance policy starting in your 40s or 50s. Assisted livings and nursing homes can be incredibly costly — according to a 2021 Cost of Care Survey by Genworth, the average cost for a semi-private room in a nursing home was $7,908 per month while a private room costs $9,034 per month
With a long-term care insurance policy, you pay a premium each month to a private insurance company. If you ever need the covered services offered through the plan, you then submit claims to the company.
When saving for retirement, you should be prepared for a significant amount of your retirement income to be allocated toward medical bills —12% of the median retiree's retirement income had gone toward covering medical expenses.
You can save for retirement by taking advantage of the variety of different tax-advantaged investment accounts that exist such as 401(k)s, traditional and Roth IRAs and Health Savings Accounts. Additionally, you should consider taking out Medigap or long-term care insurance if you anticipate substantial healthcare expenses in retirement.
When saving for retirement, seniors overestimate market volatility and underestimate life expectancy
4 tips for saving for retirement, according to a financial planner who helps people retire early
The three retirement accounts you should try to maximize in 2022 | 2022-09-30T22:50:22Z | www.cnbc.com | How Much Should You Expect To Spend on Medical Expenses in Retirement? | https://www.cnbc.com/select/how-much-expect-to-spend-on-medical-expenses-in-retirement/ | https://www.cnbc.com/select/how-much-expect-to-spend-on-medical-expenses-in-retirement/ |
UiPath Inc: "It's losing money, and I don't recommend companies that are losing money."
Cheniere Energy Inc: "Good yield, safe, long-term. ... That's the way I would go."
Equinor ASA: "[Enbridge] gives you a much better yield."
MP Materials Corp: "It does make money, and it is very well-run."
nLight Inc: "It loses money."
Petroleo Brasileiro SA Petrobras: "I'm not going there."
Amerisourcebergen Corp: "Call me a buyer of Amerisourcebergen."
BJ's Wholesale Club Holdings: "I like BJ's very much. ... But my Charitable Trust owns Costco, and I do prefer them."
New Mountain Finance Corp: "We don't know what they're invested in, and as far as I'm concerned, therefore it's too dangerous." | 2022-10-01T13:41:46Z | www.cnbc.com | Cramer's lightning round: nLight is not a buy | https://www.cnbc.com/2022/09/30/cramers-lightning-round-nlight-is-not-a-buy.html | https://www.cnbc.com/2022/09/30/cramers-lightning-round-nlight-is-not-a-buy.html |
Published Sat, Oct 1 20228:06 AM EDT Updated An Hour Ago
Macro uncertainties have increased dramatically as 2022 enters its final stretch, making the outlook for markets even murkier in the fourth quarter than in prior periods. There is a perplexing economy, aggressive Federal Reserve policy and geopolitical uncertainty that could all weigh on stocks and continue to boost the dollar. And inflation continues to flare, pushing central banks to raise interest rates even as the global economy wobbles. "The markets always focus on the shark closest to the boat. ... There are a number of them circling these days," said Rick Rieder, chief investment officer of global fixed income at BlackRock. All three major indexes have fallen for three-straight quarters. That makes for the longest quarterly losing streak for Nasdaq and the S & P 500 since March 2009. The last time the Dow Jones Industrial Average saw such a record, it was 2015. The Dow closed Friday below 29,000 for the first time since November 2020. Depending on what you're looking at, the economy looks OK or looks in really bad shape. It's one of the more uneven late cycle periods I've ever seen.' Head of global economic research, Bank of America Ethan Harris The S & P 500 wrapped up the quarter down 5.3%. Typically, the stock market is weaker in the second and third quarters of a midterm election year, and rallies an average 6.4% in the fourth quarter, according to CFRA. Investors are awaiting the start of the third-quarter earnings season in mid-October to see just how big the hit will be to profits and what impact companies are forecasting from inflation and the slowing economy in the months ahead. "The economy is kind of in this twilight zone, where it's not in a recession but I think it's heading there," said Ethan Harris, head of global economic research at Bank of America. The Fed changed the calculus for markets after its last meeting , when it issued a forecast for its fed funds rate to rise to 4.6% by early next year. The rate is currently at 3% to 3.25%. It also shook investors when officials predicted unemployment could rise by 0.7%, signaling the potential for a recession. "Depending on what you're looking at, the economy looks OK or looks in really bad shape. It's one of the more uneven late cycle periods I've ever seen," said Harris. "You have a full-blown recession starting in the housing market. Corporate investment is probably already in a recession. The consumer is hanging in. The labor market is hanging in. Exports, which are quite volatile from one quarter to the next, they look like they'll be OK going into year-end." There are plenty of obstacles to a rising stock market this year, not least of which is the rapid move higher in interest rates around the world. The benchmark 10-year Treasury yield touched a recent high 4.019% after starting the third quarter at just under 3%. It was back down to 3.8% on Friday afternoon. The dollar is up 7.1% in the third quarter. It could take a bite out of the earnings of tech and other multinational companies. Rates have been rising across the board, and some yields are drawing investors into short-dated Treasurys and other bonds. "You have the greatest repricing in the history of fixed income in a short period of time," said Rieder. "There's opportunities all over the place, and in the fourth quarter it's going to be picking through those opportunities. But I don't think the all-clear sign is coming in the fourth quarter." For consumers, higher rates are already hurting. Average 30-year conforming mortgage rates have gone above 6.7%. Results on Thursday from used car dealer CarMax suggested higher borrowing costs may be making cars less affordable and dampening demand. 'It's just going to be a mess' Rieder said he sees three major concerns outside the U.S. that could keep markets on edge for the next few months. One unknown is how the United Kingdom will work through its financial issues. The country is dogged by high inflation, and the financial turmoil around its fiscal policy has driven rates sharply higher and the pound recently touched an all-time low against the dollar. Another big focus in markets over the next couple of weeks will be Chinese politics. The Communist Party is set to convene its 20th congress in mid-October to decide its leadership and policy course. Xi Jinping is widely expected to remain the leader, but there have been rumors of a shake-up. The third concern is the energy crisis in Europe, brought on by the Russian invasion of Ukraine. Potential energy shortages and high prices will challenge already weakened economies in the region. "I think the next two or three months are going to be chock-full of information to tell you where the macro is going," said Rieder. The U.K. government announced major tax cuts and a spending plan that sent the pound sterling skidding and bond yields sharply higher. The moves raised concerns that the government's plan will spur more inflation and are at odds with the Bank of England's rate hiking policies. Bracing for the fourth quarter Wall Street analysts' favorite stocks for the fourth quarter include a casino name that could double No more 'TINA:' The case for putting money into cash, short-term bonds in this volatile market The Bank of England attempted to calm markets Wednesday with an about-face on its plans to sell bonds, saying it would temporarily buy more U.K. gilts instead. That quickly reversed some of the run-up in yields, and also raised questions of whether the Fed and other central banks could also have to pivot at some point. The collapse of the currency has some market pros comparing the country to an emerging market in turmoil. Investors fret there could be a negative market outcome or contagion as the U.K. currency flounders and assets are marked down as yields rise. Rising interest rates threaten consumer spending and inflation continues to be a problem. As in Europe, British citizens are looking forward to high energy bills this winter and possible shortages due to Russia's war in Ukraine. "It's just going to be a mess for a period of time," Rieder said. But unlike emerging markets, he said the U.K. is in better shape and is not drowning in debt. "You have the ability to get the policy right, and that's different than some of the other places that are on their back foot and have major dollar liabilities. The U.K. has an easier way to right the ship than [emerging markets do]," he said. Changes ahead in China On Beijing, Rieder said he is keeping a close watch on the Chinese Communist Party Congress beginning Oct. 16, saying it could set the country's economy on a new track. "I think post-party congress, you'll see more stimulus, better growth and certainly a broad reopening post-Covid. Our projections for growth in China are pretty good in 2023," said Rieder. If leaders come out of the congress with plans to help the Chinese economy, it could be a positive that will spill into other economies, he said. "My sense is in China, it is always a time for change and inflection," said Rieder. The party reaffirmed President Xi as the core of the party this week , but rumors had been swirling that the Chinese leader may be out. Even so, Xi is widely expected to be elected for an unprecedented third five-year term. "I wouldn't count him out. I still think he's in the driver's seat," said Jimmy Chang, chief investment officer of Rockefeller Global Family Office. "This is probably the most intense phase with different factions jockeying for positions. It's not just the top jobs," Chang said. Energy fears rise as winter nears Europe's energy supplies were pinched even further this week after suspected sabotage on Nord Stream 1 and 2 pipelines, which carry gas from Russia to Germany. "What's happened with the sabotage of the Nord Stream pipeline is a big issue. It's going to engender more fuel switching if they don't get that gas," said John Kilduff, partner with Again Capital. "There's an absolute flotilla of LNG [liquified natural gas] tankers heading that way. Even China is selling off some of their supply to Europe right now." Kilduff said one possible bright spot for Europe is a mild winter weather forecast. But the situation with the Russian war in Ukraine continues to create uncertainty, beyond just Europe's fuel situation. Helima Croft, head of global commodities strategy at RBC, said markets continue to underrate the threat from Moscow. The Kremlin this week said Russia has a right to use nuclear weapons. "The market is more afraid of [Fed Chair] Jay Powell than Vladimir Putin . I don't think that this is the right assessment with a nuclear-armed nation that is Russia," said Croft. Croft said the Russian president looks like "he's in a burning-down-the-house endgame." By early December, Europe plans to move away from using Russian oil, which could boost the price and stoke tensions even further. "Anxiety is going to build in the market just because of the run-up to winter, but that complicating factor of a Dec. 5 embargo, if it goes through, it will put the market back on edge," said Kilduff. It's not clear Europe will stick to the plan, he said. "There's doubts about it. There's not unanimity. Things could shift." West Texas Intermediate oil was trading at about $79.49 on Friday. Oil broke a four-week losing streak, but is well below the high near $130 it reached in March when Russia invaded Ukraine. "Oil prices are denominated in dollars. This decline in the euro and the pound, they're not getting the break we are," said Kilduff. Midterm elections ahead In U.S. politics, voters head to the polls Nov. 8 in a midterm election that could shift the balance of power in Congress from Democratic control. Republican candidates had earlier been expected to take both the House and Senate majorities, but those odds have been shifting. "Typically first-term Democrats [presidents] lose 26 seats in the House and four in the Senate. And I think that's what people were expecting earlier this year," said Sam Stovall, CFRA chief investment strategist. But the Supreme Court's ruling against Roe v. Wade has shifted some support toward Democrats. Dan Clifton, head of policy research at Strategas, said he expects the Republicans will take the House, but the races have tightened. "We're in for a 50/50 race," he said. If Democrats sweep the two chambers, they are going to support legislation on the child tax credit and a fiscal spending plan. If Republicans sweep, they would support new legislation on energy, Clifton said. Stovall said the stock market has seasonality on its side, but it may not follow the typical course this year. The S & P has been higher in the fourth quarter after midterms 84% of the time and has the second best performance historically of the 16 quarters of a presidential term, according to CFRA. Its research shows the best quarter for the stock market is the first quarter of a president's third year in office. In the first quarter, following midterm years, the S & P 500 has been positive 89% of the time and stocks rally an average 6.9%. "History is a guide but never gospel. I think the market did get oversold recently and could be setting us up for some sort of near-term rally," said Stovall. "I don't know how long that rally is going to last, and whether investors are going to sell into it and squash it early on." Clifton said there were two midterm years, in 1974 and 1978, when the market did not rally in the fourth quarter. "What happened in 1974 and 1978? We had accelerated inflation," he said. Stovall said if there is a recession, the S & P 500 could have further to fall. It ended Friday at 3,585.62. "To be an average bear market that is accompanied by recession, we would probably challenge the 3,200 level of the S & P 500, which would equate to a 33% bear market decline and cause the P/Es to be trimmed by a third to around the upper 14 multiple," he said. The S & P 500 multiple is about 16 from over 22 times at the beginning of the year, Stovall added. Earnings revisions could be a factor for stocks in the coming weeks, but so could interest rates. "Rates are the fulcrum because that's what you use in your intrinsic value models, which everything we do is based on," Stovall said. "The two things we are trying to ascertain are earnings and interest rates. How much are we going to earn, and what kind of discount rate do we use in those models for intrinsic value." The Fed's new word: 'pain' The first major data point of the quarter will be the September jobs report on Oct. 7. Jobs have been a strong area, with unemployment at just 3.7%. In August, 315,000 jobs were added. For the Fed, jobs and inflation data will be key to how much and how fast it raises rates. It will be important for the labor market to weaken in order for inflation to slow down. Consumer inflation has been running above 8%, and the next release of the consumer price index is Oct. 13. The Fed meets next on Nov. 1 and 2, and then again on Dec. 13 and 14. Economists expect there could potentially be two more large hikes, and one of at least 75 basis points. A basis point equals 0.01 of a percentage point. "They're not going to say it, but I think they definitely want a recession," said Bank of America's Harris. "They found a new word for it. They call it 'pain.' ... I don't see any way around it. How do you get this much inflation out of the economy without a recession?" Harris expects a recession could begin early next year. "Then you'll get a small positive number in Q3 and Q4. I don't have a lot of confidence picking a month when a recession starts. There's too many cross currents," he said. The impact of the Fed's tightening has yet to be seen, and it will hit the economy with a lagged effect. "The Fed didn't really start to get tough until July. We won't know the extent of the shock until next year," Harris said. BlackRock's Rieder expects the Fed will indicate it is going to pause rate hikes once it sees weaker data. "I think in the fourth quarter, we're going to get news on the Fed being able to pause, but I think we have to get one to two weak employment reports, alongside weaker momentum in inflation," Rieder said. For now, he's finding opportunities in shorter duration securities, which have the highest yields in years and are less risky than longer dated bonds. And he said he does find the 30-year Treasury bond attractive. "It's a risk hedge, and there's a natural buyer base," he said. Pensions and insurances companies are big buyers of the longer-dated securities.
These common myths about Ethereum's 'Merge' could trip up investors | 2022-10-01T13:42:17Z | www.cnbc.com | Quarterly Investment Guide 4Q 2022: Economic uncertainty tests markets | https://www.cnbc.com/2022/10/01/quarterly-investment-guide-4q-2022-economic-uncertainty-tests-markets.html | https://www.cnbc.com/2022/10/01/quarterly-investment-guide-4q-2022-economic-uncertainty-tests-markets.html |
Jerome Powell, chairman of the US Federal Reserve, during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022.
After being criticized for being slow to recognize inflation, the Fed has embarked on its most aggressive series of rate hikes since the 1980s. From near-zero in March, the Fed has pushed its benchmark rate to a target of at least 3%. At the same time, the plan to unwind its $8.8 trillion balance sheet in a process called "quantitative tightening," or QT — selling securities the Fed has on its books — has removed the largest buyer of Treasuries and mortgage securities from the marketplace.
"The Fed is breaking things," said Benjamin Dunn, a former hedge fund chief risk officer who now runs consultancy Alpha Theory Advisors. "There's really nothing historical you can point to for what's going on in markets today; we are seeing multiple standard deviation moves in things like the Swedish krona, in Treasuries, in oil, in silver, like every other day. These aren't healthy moves."
Since Treasuries are backed by the full faith and credit of the U.S. government and are used as collateral in overnight funding markets, their decline in price and resulting higher yields could gum up the smooth functioning of those markets, he said.
"The Fed may have to stabilize the price of Treasuries here; we're getting close," said Connors, a market participant for more than 30 years. "What's happening may require them to step in and provide emergency funding."
The stronger dollar also has other impacts: It makes wide swaths of dollar-denominated bonds issued by non-U.S. players harder to repay, which could pressure emerging markets already struggling with inflation. And other nations could offload U.S. securities in a bid to defend their currencies, exacerbating moves in Treasuries. | 2022-10-01T13:42:42Z | www.cnbc.com | ‘The Fed is breaking things’ – Here’s what has Wall Street on edge as risks rise around the world | https://www.cnbc.com/2022/10/01/the-fed-is-breaking-things-heres-what-has-wall-street-on-edge-as-risks-rise-around-the-world.html | https://www.cnbc.com/2022/10/01/the-fed-is-breaking-things-heres-what-has-wall-street-on-edge-as-risks-rise-around-the-world.html |
Margot Machol Bisnow, Contributor
Entrepreneurs, in my mind, aren't just founders of for-profit business. It's anyone who comes up an idea and turns it into something real, who translates a passion into a project.
As the mom of two entrepreneurial sons, I've found that of all the parenting advice out there, the most important ones are about teaching kids to be bold enough to try new things. But how do you do that?
Tania developed her fearlessness and willingness to experiment when she was just four years old. She recalls shopping with her dad at a luxury gift store. Despite the "NO TOUCHING" sign, she touched nearly everything. | 2022-10-01T20:39:59Z | www.cnbc.com | I talked to 70 parents who raised highly successful adults: 4 'extreme' things they did differently | https://www.cnbc.com/2022/10/01/i-talked-to-70-parents-who-raised-highly-successful-adults-here-are-the-extreme-things-they-did-differently.html | https://www.cnbc.com/2022/10/01/i-talked-to-70-parents-who-raised-highly-successful-adults-here-are-the-extreme-things-they-did-differently.html |
Toyota CEO Akio Toyoda speaks during a small media roundtable on Sept. 29, 2022 in Las Vegas.
"Just like the free autonomous cars that we are all supposed to be driving by now, EVs are just going to take longer to become mainstream than media would like us to believe," Toyoda said in a recording of the remarks to dealers shown to reporters. "In the meantime, you have many options for customers."
Toyota's hesitancy to launch all-electric vehicles has been criticized by environmental groups such as the Sierra Club and Greenpeace, which have the Japanese automaker at the bottom of auto-industry decarbonization rankings the past two years. | 2022-10-02T15:04:22Z | www.cnbc.com | Toyota CEO Akio Toyoda talks EV skepticism, 'happy dance,' his legacy | https://www.cnbc.com/2022/10/02/toyota-ceo-akio-toyoda-electric-vehicles-happy-dance.html | https://www.cnbc.com/2022/10/02/toyota-ceo-akio-toyoda-electric-vehicles-happy-dance.html |
That has culminated with the 8R farm tractor, a fully autonomous tractor that does not require someone to be behind the wheel.
Deere's autonomous 8R is the culmination of nearly two decades of work in automation, data analytics, GPS-guidance, internet-of-things connectivity and software engineering.
That statement may seem incongruous with the general perception of the 185-year-old company as a heavy-metal manufacturer of tractors, bulldozers and lawnmowers painted in the signature green and yellow colors.
But that is what the company sees in its future, according to Jorge Heraud, vice president of automation and autonomy for Moline, Illinois-based Deere, an glimpse of which was showcased at last January's Consumer Electronics Show in Las Vegas, where Deere unveiled its fully autonomous 8R farm tractor, driven by artificial intelligence rather than a farmer behind the wheel.
Attached to the autonomous tractor is a 120-foot-wide boom arrayed with six pairs of stereo cameras that can "see" an obstacle in the field — whether it's a rock, a log or a person — and determine its size and relative distance. Images captured by the cameras are passed through a deep neural network that classifies each pixel in approximately 100 milliseconds and decides whether the tractor should keep moving or stop.
Heraud was referring to autonomous driving, another piece of Deere's agtech puzzle that came together when it purchased Bear Flag Robotics last year for $250 million. Also a Silicon Valley startup, launched in 2017, Bear Flag's autonomous navigation system can be retrofitted onto existing tractors, in this case Deere's latest 8R model, which went on the market in 2020.
Deere is gearing up for another showcase at the 2023 CES, where CEO John May and other company executives will give a keynote address revealing autonomy for additional farm equipment. "We'll talk about the ability to make combines, harvesters and planters autonomous," Heraud said. "We are moving quite a bit beyond just providing equipment," he said. "We're now providing smart equipment that offers a lot more value."
Climate change could bring back wind as the future power source for ocean cargo ships | 2022-10-02T16:10:03Z | www.cnbc.com | How Deere plans to build a world of fully autonomous farming by 2030 | https://www.cnbc.com/2022/10/02/how-deere-plans-to-build-a-world-of-fully-autonomous-farming-by-2030.html | https://www.cnbc.com/2022/10/02/how-deere-plans-to-build-a-world-of-fully-autonomous-farming-by-2030.html |
If the outlook for fourth-quarter economic growth isn't quite like staring into the abyss, it's at least starting to get pretty dark and pretty deep. With a recession seeming to be only a matter of when not if, economists are taking a dim view of what's ahead, even if the last three months could still show some mildly positive growth. Persistent inflation, pressure on corporate earnings and a major slide in the housing market are three big factors pressuring growth and raising fears that the year's end may only be a precursor of the truly scary stuff on the horizon. In fact, Credit Suisse recently titled a note , "The Worst Is Yet to Come." The firm sees the efforts from central banks like the U.S. Federal Reserve to control inflation slowing the global economy to a virtual standstill before trend growth can resume. The U.S., the firm said, will close out 2022 with "close to zero" growth and then just 0.8% gains in GDP for 2022. Other big forecasters also are not optimistic about the growth prospects. Bracing for the fourth quarter Markets plagued by increasing economic uncertainty and geopolitical risk in fourth quarter Wall Street analysts' favorite stocks for the fourth quarter include a casino name that could double No more 'TINA:' The case for putting money into cash, short-term bonds in this volatile market Here's how Wall Street's biggest investors performed during the third quarter's extreme volatility Bank of America said it expects the fourth quarter to post GDP growth of just 0.5% , though that is actually an upward revision from the previous estimate for a decline of 2%. BofA says a recession is coming, though it now expects the downturn to hit in 2023 rather than the previous prediction of late 2022. Goldman Sachs also expects the economy to muddle through the next three months, but on Friday cut its 2023 outlook and is now seeing growth of just 0.9%. Not much to like Asked if he saw anything to be optimistic about on the horizon, economist Joseph LaVorgna said "not really." Like most of his peers, LaVorgna said he expects the Fed's aggressive inflation campaign — five interest rate hikes over a six-month period totaling 3 full percentage points, and almost certainly more on the way — as squelching any reason to believe that the U.S. will avoid a recession, if not by year-end then early in 2023. "We're going to get a hard landing," said LaVorgna, chief economist at SMBC Nikko Securities America and a former senior economist in the Trump administration. "My best guess is it will be a recession and it will not be mild, because you've got significant wealth destruction and you have a Fed that is committed to raising rates more." The economy is coming off a 1.6% GDP decline in the first quarter and a 0.6% drop in the second. That meets the criteria of two consecutive quarters of negative growth that is generally recognized as a recession . The Atlanta Fed's GDP tracker is putting third-quarter growth at 2.4%. The estimate was revised up sharply following personal spending and income data on Friday. Markets are split between whether the Fed will enact a fourth straight 0.75 percentage point rate hike at its November meeting, with another half- or quarter-point increase expected in December. That would elevate rates to their highest levels since late 2007, a time when the central bank was cutting as the worst of the financial crisis had not hit yet. This time around, the Fed is deliberately trying to slow the economy — and specifically a hot labor market that shows no signs of letting up. A historically tight labor market that has two open jobs for every available worker is not only putting a floor under growth but also providing a headache for the inflation-minded central bank. Nonfarm payrolls have risen by 3.5 million through the first eight months of the year and average hourly earnings are up 5.2% on a 12-month basis — a blistering pace by historical standards but still not enough to keep up with an 8.3% inflation rate . Conventional wisdom is that Fed policy operates on a lag that can be anywhere from six months to a year or longer. Given that, the chances of the labor market being able to survive a pace of rate hikes not seen in decades is unlikely. "Q3 is going to be negative [for GDP], Q4 will be more negative," LaVorgna said. "So we will have on paper a recession for 2022, but it won't feel like one until early next year when the labor market softens quite dramatically. It's at that point where I could see a Fed pivot." Just a matter of 'when' Such a "pivot" could mean a number of things, and investors will be watching not only Fed policy actions but also verbal cues for a signal for when policymakers think they've done enough. Chair Jerome Powell's news conferences will be of specific interest during this time. For now, investors are growing increasingly nervous over what the policy moves could portend. Multiple market experts who spoke at CNBC's " Delivering Alpha " conference last week expressed trepidation. "I will be stunned if we don't have a recession in '23," said Stanley Druckenmiller , chair of Duquesne Family Office. "Don't know the timing, but certainly by the end of '23. I will not be surprised if it's not larger than the so-called average garden variety, and I don't rule out — not my forecast — but I don't rule out something really bad." Ken Griffin , who runs the Citadel hedge fund, said of a recession , "there will be one, it's just a question of when and, frankly, how hard." The ramifications will be serious, he said. "We're going to have had millions of Americans unemployed back to back twice in a three-and-change year period," he said. "And from the perspective of our nation, the loss of human capital that that implies is devastating." For investors, Griffin advised making sure they can withstand the fallout from an economic downturn. "You don't want to own so many equities that when the inevitable recession happens, you're forced to sell at the bottom," he said. "That's a much more important concept for investors to understand and to focus on than trying to prognosticate as to when the next recession is going to happen." | 2022-10-02T16:10:16Z | www.cnbc.com | Quarterly Investment Guide 4Q 2022: It's not looking good for economy | https://www.cnbc.com/2022/10/02/quarterly-investment-guide-4q-2022-its-not-looking-good-for-economy.html | https://www.cnbc.com/2022/10/02/quarterly-investment-guide-4q-2022-its-not-looking-good-for-economy.html |
It turns out that the irrational just stayed irrational longer than we thought it would. When we talk about investing strategies, we often talk about probabilities and that they almost always do work out. The idea that the market can go down endlessly without a respite seems unlikely. We get oversold. Good things do happen. We catch a break with an earnings report or a piece of news from commerce or labor or housing that makes things better. It's why you want to stay long stocks — even as you want to put new money in the 2-year Treasury and get a 4.2% yield — because it just seems a little preposterous with heathy banks and a healthy consumer that things can stay this bleak for so long. But things aren't working out like that right now. There are so many rational things that could happen, but the irrational just stays, well, irrational. And nothing seem to be able to change it. Take Russia. We know that 13% of the world's calories came out of production when the Russian and Ukrainian borders shut down. That drives up the price of food incrementally. But even more important is has driven up the price of fertilizer, as Russia and its closest ally Belarus are major players in the market. Or who would have thought that Europe's most important environmental issue — energy — was somehow almost entirely dependent on one country — Russia — that has been run by a madman ever since he won the second war in Chechnya with a level of brutality that seems very familiar. There was nothing in Vladimir Putin's character that seemed worth trusting, but Europe decided that Russia was a good actor that could produce all the energy it needed. There was no need to have back-up plan. Electric generator plants were mothballed. Solar became the de facto energy strategy even as it isn't particularly sunny in many parts of Europe. You think we made mistakes here in the United States? At least we have abundant natural resources. The idea that Europe isn't over here negotiating the credit to produce the liquefied natural gas needed and speeding up the building of new gas export terminals is truly ridiculous. It's pretty clear that unless Putin is killed, we aren't going to see a reversal of the situation any time soon. This week we will have more Russian meddling when OPEC+ meets on Oct. 5 in Vienna. Russia is actively trying to get a million barrel cut, which will just cause more pain and inflation for the West. Yes, Russia's actions and the West's feeble response, save that of the U.S., was irrational. And because of the brave Ukrainians, it stays irrational. It's a nightmare for Europe because the better the Ukrainians fight, the more likely that Europe suffers a winter of freezing or nuclear variety. We all can't seem to understand why Putin isn't killed. But why should he be? We don't even know if he is unpopular. He's willing to slaughter lots of innocents on the altar of irrationality because there's no course to win anymore, just a course to destroy. It turns out that the Russian president's pernicious nature has made it the most important country in Europe. Now we are less intertwined with Europe than in years past, but we know that our software and industrial companies have considerable operations there. And they have gone haywire, hobbled by currency — the euro is so shaky — and an energy-reduced recession. It's all come together badly for so many of our companies that we haven't begun to fathom it. We just know it is bad, bad for stocks and Federal Reserve Chairman Jerome Powell can't do anything about it. When it comes to stocks, in some ways China's Covid policy is the most ruinous. In two weeks we will have the 20 th Party Congress coronation of President Xi Jinping and it simply doesn't matter what he does to try to pump up the economy. His erratic decisions involving Covid shutdowns are causing a slowing of that country that, if it were a democracy would have led to historic protests and rallies against the current regime. Instead the population and Xi just seem to be hoping for the best, given the lack of efficacy of Chinese vaccines. Here's what we missed: We had always thought that China of all countries — unconstrained by a free press and genuine two-or-more party governing — would always do the rational thing. But with vaccines that are only 43% effective and a strain of Covid that isn't as virulent as it is contagious, you can stop the lockdowns even if you won't use the 99% effective U.S. vaccines. It makes no sense. And let me tell you from what I see when it comes to all sorts of tech. China, it turns out, is just much more important than anywhere else in the world when it comes to orders, when it comes to growth, when it comes to earnings. We tend to want to think that the slowdown in everything tech is from the declining work from home, but that's not true. It's from the end of the Chinese growth story. So many of our companies are much more dependent than we thought on China. So an irrational decision to keep a country from being sick in a stupid, decidedly un-Chinese-like way is making it so the number of stocks you can buy is cut dramatically. But you know what is rational, despite the endless catcalls? The Fed's big rate increases. It has done a remarkable job slowing the use of a whole host of commodities. The Fed has begun to impact commerce in a positive way. FedEx (FDX) reported a decline in commerce. We are getting a some lowering in housing costs. There are inventory gluts that have helped lower prices at the consumer level. We even had a weak number from Carnival (CCL) and a light visitor numbers to Las Vegas last month. But there is nothing that is slowing down wages. Too many buyouts. Too many people just plain old retired. Too much money allowing people to not have to work. Now we know that the Fed can throw people out of work. But there are so many workers needed that there are still bidding wars for talent outside of California and a tremendous shortage in people who know how to make things. Remember, we would love to make things here, but they cost too much because of labor so we can't solve the China manufacturing issue. We have priced ourselves out of everything but the energy market, and there we are handicapped by the Democrats' aversion to pipelines which are incredibly deflationary but are perceived to be too pro-fossil-fuel for their liking. So the Fed has to do the rational because everyone else is doing the irrational. And that just doesn't leave for a lot of room for the stock market to go higher. There's too much not in the Powell's purview that he must work hard to slow everything — from eating and going out to job hopping and buying homes and cars — and then, and only then, can it be safe to do anything but long-term investing. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Alexandr Demyanchuk | AFP | Getty Images | 2022-10-03T03:02:14Z | www.cnbc.com | Jim Cramer: It's the Fed versus China, Putin and stocks hang in balance | https://www.cnbc.com/2022/10/02/jim-cramer-its-the-fed-versus-china-putin-and-stocks-hang-in-balance.html | https://www.cnbc.com/2022/10/02/jim-cramer-its-the-fed-versus-china-putin-and-stocks-hang-in-balance.html |
LinkedIn's new study shows the up-and-coming start-ups in India, with e-commerce, fintech and edtech start-ups dominating its list of 25 "Top Start-ups 2022."
It's also great to see young professionals embracing India's startup ecosystem, with 56% of all hires in the top 25 startups being aged below 30.
Managing editor, LinkedIn News India
Several factors are creating the 'perfect storm' to invest in India, VC investor says
Two 19-year-olds dropped out of Stanford to build India's next tech unicorn | 2022-10-03T03:02:20Z | www.cnbc.com | LinkedIn: Here are the top 25 start-ups to work for in India | https://www.cnbc.com/2022/10/03/linkedin-here-are-the-top-25-start-ups-to-work-for-in-india.html | https://www.cnbc.com/2022/10/03/linkedin-here-are-the-top-25-start-ups-to-work-for-in-india.html |
Updated Sun, Oct 2 202210:48 PM EDT
Pedestrians cross a road in front of the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Thursday, Oct. 29, 2020.
Shares in the Asia-Pacific mostly fell on Monday as markets enter the last quarter of the year.
Hong Kong's Hang Seng index was 0.8% lower in early trade. In Australia, the S&P/ASX 200 gave up early gains to fall 0.4%.
The Nikkei 225 in Japan fell more than 1% in early trade, but recovered slightly and was last up 0.18%, while the Topix index was fractionally lower. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.32%. | 2022-10-03T03:15:23Z | www.cnbc.com | Asia-Pacific markets fall; oil up 2% on possible OPEC+ supply cut | https://www.cnbc.com/2022/10/03/asia-markets-japan-tankan-data-china-south-korea-closed-oil.html | https://www.cnbc.com/2022/10/03/asia-markets-japan-tankan-data-china-south-korea-closed-oil.html |
Market volatility is back, and stocks are getting hit. That's why buying an exchange-traded fund could be a better bet, according to one investment pro. "The great thing about ETFs is that you're not picking one stock. You're not picking that one winner or one loser, you're picking a basket, you are buying a theme or a broad-based index. So that diversification aspect, combined with all the tax benefits, is a great structure and it's really growing tremendously in the market," Jon Maier, chief investment officer at Global X ETFs, told CNBC's " Street Signs Asia " on Thursday. These are the ETF opportunities he said investors should look out for. Electric vehicles "I think investors should be most exposed to areas where there are tailwinds. There are a lot of themes, and they are certainly getting punished at the moment, but innovation is not going to stop," he said. One such theme that Maier is positive on is the growing popularity of electric vehicles. He said there's a "tremendous amount" of interest in EVs, with rising adoption in both the United States and globally. "That's not going to stop," Maier said. Lithium — a key component in EV batteries — is a prime beneficiary of this transition. Maier noted the current acute shortage in lithium supply at a time when there is a "tremendous amount of need." He pointed to the Global X Lithium and Battery Tech ETF , which he said is "holding up a lot better" relative to other themes in the market. He continues to see a "tremendous amount" of long-term value in the area. Cloud computing "The cloud is integral. We couldn't be doing what we're doing right now without the cloud. There was an acceleration of use during the pandemic. Business models are built on the digital economy, and you can't really operate effectively without the cloud," he said. Though many cloud companies are currently experiencing negative market returns, he said he expects the sector's growth to be "very strong" over the longer term. "It's tough to weather through the current market environment for sure in terms of market returns, but top line growth certainly exists," he said. Dividend plays Maier also likes companies with strong cash flows that can navigate supply chain disruptions. "We think what makes the most sense in terms of positioning, at least short term, is looking at companies that have strong cash flows … pay dividends and potentially can raise dividends," he said. "These are places that are safer, that we are including as core positions in our portfolios," he added. He named the Global X MLP & Energy Infrastructure ETF as one that pays a "great" dividend, and that could benefit from rising interest rates and energy prices. $10 trillion opportunity Maier said the ETF market is "growing exponentially" and estimates it to be a $10 trillion opportunity — with the U.S. having the lion's share of $7 trillion. ETFs raked in $43.8 billion of new money amid a rocky August for markets, bringing net inflows for the year to $386.9 billion as at end-August, according to data from Morningstar . "Obviously right now the market is punishing growth and punishing momentum, but there are certain areas of the market where it makes a lot of sense [to buy], and you are seeing inflows despite recent market action," he said. For instance, he sees "big inflows" into some Preferred ETFs that invest in preferred stocks — a class of stock ownership that has a higher claim on the company's assets and earnings than common stock. "They played the long end of the curve and with interest rates moving up so much, I think the market is seeing some value in long duration assets just more recently," Maier said.
Ganesh Rao2 min ago | 2022-10-03T03:15:29Z | www.cnbc.com | Global X ETFs: Where to find value in ETFs | https://www.cnbc.com/2022/10/03/global-x-etfs-where-to-find-value-in-etfs-.html | https://www.cnbc.com/2022/10/03/global-x-etfs-where-to-find-value-in-etfs-.html |
European companies' foreign sales have dropped to their lowest levels over the past five years with global trading conditions continuing to worsen. That's according to new research from HSBC, which suggests that stretched supply chains, geopolitical tensions, and worsening financial conditions have been the primary drivers of "de-globalization" recently. These factors, among others, have forced many global companies to "substantially" turn inward in search of resilient revenue and growth. The report titled "A de-globalisation wave?" said European firms' foreign sales dipped below 50% in 2021, the lowest level in the last five years. The continent has traditionally been home to one of the most geographically diverse markets, but this trend appears to be changing. In 2021, 48% of FTSE Europe revenues came from outside Europe. The bank's analyst said this is a drop of more than three percentage points compared to 2019 and 2020 levels. "European corporates are among the most global, but we see signs of them turning inverse," said Amit Shrivastava, European equity strategist at HSBC. "Tough economic environment and recessionary pressures generally force economies to turn inward. So, at the moment, increased defensiveness is probably helpful." Here are five non-financial stocks that had the most significant jump in revenue from domestic sources compared to the previous year: HSBC said that even small changes were "significant" and resulted from increasing barriers in global trade over time. According to Global Trade Alert data, around 13% of world trade was affected by tariff increases in 2019 compared with just 1% a decade earlier. Barriers such as these were among the reasons for the change in trade patterns. While most sectors of the European economy shied away from sales to foreign customers in 2021, consumer staples and technology were the only two to record an increase. The dollar 's strength over the past year has also been a significant headwind for European exports to the United States. Sales to the U.S. fell by 0.9% in 2021. However, according to HSBC, that fall was more than made up by a 1.1% rise to Germany. The chart below shows that the United States and Germany are two of the largest sales destinations for European companies. The bank said foreign sales to Asian markets had not fallen, signifying that companies were still focusing on high-growth markets in Asia.
Zavier Ong3 min ago | 2022-10-03T03:15:41Z | www.cnbc.com | The 5 global stocks experiencing a 'de-globalization' trend, according to HSBC | https://www.cnbc.com/2022/10/03/the-5-global-stocks-experiencing-a-de-globalization-trend-according-to-hsbc.html | https://www.cnbc.com/2022/10/03/the-5-global-stocks-experiencing-a-de-globalization-trend-according-to-hsbc.html |
"It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our economy," Finance Minister Kwasi Kwarteng said in a statement.
With the ruling Conservative Party plunging in opinion polls since its so-called "mini budget," which was also criticized by the International Monetary Fund in a rare move, several of its own politicians have spoken out against the proposals.
Grant Shapps, the former transport secretary, said in a BBC interview Monday morning that the reversal in the top rate tax cut was a "sensible response" because a tax cut for "the people who need them least ... jarred for people in a way which was unsustainable."
British pound could face more downside, says Standard Chartered
Truss said in a tweet Monday: "The abolition of the 45pc rate had become a distraction from our mission to get Britain moving." | 2022-10-03T08:06:49Z | www.cnbc.com | UK government abolishes plan to cut tax on high earners in major U-turn | https://www.cnbc.com/2022/10/03/british-pound-jumps-on-reports-uk-government-will-u-turn-on-cut-to-top-tax-rate.html | https://www.cnbc.com/2022/10/03/british-pound-jumps-on-reports-uk-government-will-u-turn-on-cut-to-top-tax-rate.html |
Since autumn is coming, the college football, NFL seasons, and MLB playoffs are just around the corner. Many Americans will splurge on their favorite sporting events, like buying live game tickets, souvenirs, and more.
According to LendingTree's survey, among Americans who spend money on sports events, about one in three are expected to go into debt this fall.
Specifically, those who are most likely to incur debt are Gen Z and Millennials. Approximately 42 percent of Gen Z (i.e., 18- to 25-year-olds); and Millennials (i.e., 26- to 41-year-olds) say they expect to incur debt for sports-related expenses in the fall.
In addition to the debt, there are a number of Americans who appear to be financially ill-prepared to deal with the current, uncertain, economic situation.
According to a survey published by Bankrate, 69% of Americans fear a recession before the end of next year. However, 24% of respondents said they are not too prepared if a recession does occur, and 17% even said they are not prepared at all. In other words, if a recession occurs at the end of next year, a total of about 40% of people are underprepared.
For this phenomenon, experts say that this may be due to a change in the mindset of the public, which is "recession fatigue."
Jeffrey Galak, an associate professor of marketing at Carnegie Mellon and expert in consumer behavior believes that this is a response to the overwhelming amount of stress put on people.
"People have spent 2½ years managing a global pandemic, uncertain financial futures, political turmoil, and growing inflation," he said. "At some point, people will run out of will to keep making good choices for their futures."
Besides, Bankrate's poll also found that it's especially afflicting younger generations, 40 percent of Gen Z say they aren't prepared for a recession and aren't taking any steps to get their finances in order. That compares with 31 percent of unprepared millennials, 30 percent of Gen X, and 27 percent of baby boomers.
This is also evidenced on TikTok. One video blogger created a series of short videos regarding how Gen Z feels about the recession, which resonated with many people. In the video, the blogger says, "Another Great Depression? Try me, I'm already depressed," "Let's cancel the economy." By mid-September, the series of videos captured a combined six million impressions, and 600,000 likes. | 2022-10-03T08:06:55Z | www.cnbc.com | CCTV Script 03/10/22 | https://www.cnbc.com/2022/10/03/cctv-script-03/10/22.html | https://www.cnbc.com/2022/10/03/cctv-script-03/10/22.html |
Worries are mounting over Credit Suisse's financial health — but that doesn't mean markets are headed toward a "Lehman moment," said the president of Sri-Kumar Global Strategies.
"This may or may not be a Lehman moment," he said, referring to the collapse of Lehman Brothers in 2008, which triggered a string of big Wall Street bailouts and a subsequent financial crisis. | 2022-10-03T08:07:01Z | www.cnbc.com | Credit Suisse is not about to cause a Lehman moment, economist Sri-Kumar says | https://www.cnbc.com/2022/10/03/credit-suisse-is-not-about-to-cause-a-lehman-moment-sri-kumar-says.html | https://www.cnbc.com/2022/10/03/credit-suisse-is-not-about-to-cause-a-lehman-moment-sri-kumar-says.html |
European stocks fell on Monday as markets entered the last quarter of the year.
European stocks are expected to open in negative territory on Wednesday as investors react to the latest U.S. inflation data.
The U.K.'s FTSE index is expected to open 47 points lower at 7,341, Germany's DAX 86 points lower at 13,106, France's CAC 40 down 28 points and Italy's FTSE MIB 132 points lower at 22,010, according to data from IG.
Global markets have pulled back following a higher-than-expected U.S. consumer price index report for August which showed prices rose by 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported Tuesday, defying economist expectations that headline inflation would fall 0.1% month-on-month.
Core CPI, which excludes volatile food and energy costs, climbed 0.6% from July and 6.3% from August 2021.
U.K. inflation figures for August are due and euro zone industrial production for July will be published. | 2022-10-03T08:07:07Z | www.cnbc.com | European stocks, markets, earnings, data and news | https://www.cnbc.com/2022/10/03/european-stocks-markets-earnings-data-and-news.html | https://www.cnbc.com/2022/10/03/european-stocks-markets-earnings-data-and-news.html |
Energy inflation will stay over next couple of years: Financial services firm
Crude oil storage tanks at the Juaymah Tank Farm in Saudi Aramco's Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on Monday, Oct. 1, 2018. OPEC+ is mulling slashing output of more than a million barrels per day, according to sources. The move would mark the biggest undertaken by the organization to address weakness in global demand.
Despite what people will say, we're gonna see some pretty sticky energy inflation as we move forward over the next couple of years.
CIO, Pickering Energy Partners | 2022-10-03T13:07:04Z | www.cnbc.com | OPEC: Oil prices could soon return to $100 a barrel, analysts say | https://www.cnbc.com/2022/10/03/opec-oil-prices-could-soon-return-to-100-a-barrel-analysts-say.html | https://www.cnbc.com/2022/10/03/opec-oil-prices-could-soon-return-to-100-a-barrel-analysts-say.html |
After the summer's rally, like the season itself, proved to be short-lived, it is hard to blame investors who are looking to the fourth quarter with a good deal of skepticism. Many of the issues that have weighed on the markets are lingering as we enter the final months of 2022. But November has a reputation for ushering in a period of strong market performance, and investors don't want to be left behind. To be sure, the losses that have been tallied year-to-date justify caution. In each of the first three quarters of the year, all three major indexes have declined, resulting in the worst performance for the first nine months of a year in more than two decades. September's dismal showing just punctuated this losing streak. Meanwhile, bonds are down 14% since January, creating a feeling that there is nowhere to hide. CNBC Pro has pulled together insights from top market strategists, economists, portfolio managers and others to look ahead to what to expect in the fourth quarter. These pros have weighed in on the Federal Reserve's drive to tame inflation , what to expect as we approach the midterm elections in November and how geopolitcal tensions in Russia and China could impact the markets in the months ahead. They are also keeping a close eye on how fiscal policy unfolds in the U.K. under Prime Minister Liz Truss. We have also screened stocks to discover the ones that Wall Street analysts expect will have the biggest upside in the months ahead, and looked hard at whether cash and short-term bonds are the best option as the volatility continues. And we looked to see how top investors like Citadel's Ken Griffin and Bridgewater's Ray Dalio have fared amid these crazy gyrations. The links to all these stories are below. Bracing for the fourth quarter Markets are plagued by increasing economic uncertainty and geopolitical risk in fourth quarter No more 'TINA:' The case for putting money into cash, short-term bonds in this volatile market Wall Street analysts' favorite stocks for the fourth quarter include a casino name that could double The fourth quarter starts now, and it's not looking good for the economy Here's how Wall Street's biggest investors performed during the third quarter's extreme volatility | 2022-10-03T14:08:55Z | www.cnbc.com | Quarterly Investment Guide 4Q 2022: Navigating rising rates and volatile markets | https://www.cnbc.com/2022/10/03/quarterly-investment-guide-4q-2022-navigating-rising-rates-and-volatile-markets.html | https://www.cnbc.com/2022/10/03/quarterly-investment-guide-4q-2022-navigating-rising-rates-and-volatile-markets.html |
In the past 20 years, investing in low-cost index funds like the S&P 500 has come to dominate much of the investing landscape.
The reason? It's cheaper than investing in most mutual funds, there's far less trading (which increases costs), and the primary structure that is used to invest in index funds — Exchange Traded Funds (ETFs), also have tax advantages.
No one can pinpoint the exact date when it became clear that investing in index funds had won out over investing in active management, but Warren Buffett declaring it to be so was certainly a pivotal moment.
The year was 2007. Buffett had entered into a bet with Protege Partners, a New York City money management firm that runs funds of hedge funds, that an index fund could beat an active manager.
Why Warren Buffett bet on index funds
The bet was this: Over a 10-year period commencing January 1, 2008, and ending December 31, 2017, the S&P 500 would outperform a portfolio of five hedge funds of funds, when performance was measured on a basis net of fees, costs and expenses.
Buffett, who chose the Vanguard Index Fund as a proxy for the S&P 500, won by a landslide. The five fund of funds had an average return of only 36.3% net of fees over that ten-year period, while the S&P index fund had a return of 125.8%.
In his 2017 letter to shareholders, Buffett took note of the high fees of hedge fund managers and offered what he called a simple equation: "If Group A (active investors) and Group B (do-nothing investors) comprise the total investing universe, and B is destined to achieve average results before costs, so, too, must A. Whichever group has the lower costs will win."
His advice to investors: "When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds."
Why low-cost index funds could work for you
Buffett was saying something that had been known to savvy investors and traders for almost a century, but which had taken a long time to seep into the average investor's consciousness: Active fund managers have a terrible track record.
Standard & Poor's has been tracking the record of active managers for more than 20 years. Their mid-year 2022 report indicates that when adjusted for fees and for funds dropping out due to poor performance, after five years 84% of large cap actively managed fund managers underperform their benchmark, and after 10 years 90% underperform.
That is so bad that Standard & Poor's, in a 2019 survey of the results, said the performance of active managers "was worse than would be expected from luck."
Why does active management have such a poor performance? One issue is that the fees are too high, so any outperformance is eroded by the high costs.
A second issue: Fund managers often do too much trading, which compounds investing mistakes and also can lead to a higher tax bill.
A third problem: Most trading today is done by professionals who are trading against each other. These traders, for the most part, have access to the same technology and the same information as their competition. The result? Most have little if any informational advantage over their competition.
If Buffett, who is a skilled value investor, recognizes the benefits of low-cost index funds, it's worth checking out for inclusion in your portfolio as well.
*Excerpted from the upcoming book, "Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange," by Bob Pisani.
How Warren Buffett's son spent the $90,000 of Berkshire stock he got at 19—worth $200 million now: 'I don't regret it'
Warren Buffett: This is your 1 greatest measure of success in life (and if you don't have it, 'your life is a disaster') | 2022-10-03T18:24:52Z | www.cnbc.com | Billionaire Warren Buffett swears by this inexpensive investing strategy that anyone can try | https://www.cnbc.com/2022/10/03/billionaire-warren-buffett-swears-by-this-inexpensive-investing-strategy-that-anyone-can-try.html | https://www.cnbc.com/2022/10/03/billionaire-warren-buffett-swears-by-this-inexpensive-investing-strategy-that-anyone-can-try.html |
Though there are concerns over Credit Suisse's financial health, the situation is not likely to cause a credit event like the 2008 collapse of Lehman Brothers that set off the worst of the financial crisis and a slew of Wall Street bailouts, according to Mohamed El-Erian. "I do not think this is a Lehman moment," El-Erian, chief economic advisor at Allianz , said Monday on CNBC's "Squawk Box." What is most interesting, he said, is the market's reaction to the Credit Suisse news. There is anxiety not only about economic issues such as tightening financial conditions, central bank mistakes and a slowing global economy, but also about market functioning. "After years of repressed interest rates, it's starting to be an issue," El-Erian said. He also noted that even though stocks were up in early trading, investors should be more cautious about wishing for the Federal Reserve to pivot away from raising interest rates to pausing hikes or even cutting rates. "We have to stop with this love affair with the pivot," he said. "If the Fed pivots it's because we've had either an economic accident or a market accident — we should not be wishing for that." What investors should be watching and weighing now is whether the Fed can balance controlling inflation, employment and financial stability. "What the UK has told you is keep an eye on the third issue as well, it makes it much harder in terms of what the Fed has to do," he said, referring to the government's reversal of cutting a tax on high-earners to quell market volatility. While it was the right decision, he said, it also represented an "embarrassing U-turn" for the government.
CNBC Pro Exclusive: David Booth and Bob Pisani discuss passive investing at the Future Proof conference | 2022-10-03T18:25:04Z | www.cnbc.com | Credit Suisse not a 'Lehman moment,' but market reaction is worrying: El-Erian | https://www.cnbc.com/2022/10/03/credit-suisse-is-not-a-lehman-moment-but-market-reaction-is-worrying-el-erian-says.html | https://www.cnbc.com/2022/10/03/credit-suisse-is-not-a-lehman-moment-but-market-reaction-is-worrying-el-erian-says.html |
A man votes at a polling location on May 17, 2022 in Norwood, North Carolina, United States. North Carolina is one of several states holding midterm primary elections.
The poll found 47% of voters want or prefer Republicans to control Congress compared with 44% who want or prefer Democrats. It's a 4 percentage point gain for Republicans, up from 43% in August, and a 6 percentage point loss for Democrats, down from 50% a month ago. | 2022-10-03T18:25:10Z | www.cnbc.com | Economy, inflation top of mind for midterm voters, giving GOP slight edge in new Monmouth poll | https://www.cnbc.com/2022/10/03/economy-inflation-top-of-mind-for-midterm-voters-giving-gop-slight-edge-in-new-monmouth-poll.html | https://www.cnbc.com/2022/10/03/economy-inflation-top-of-mind-for-midterm-voters-giving-gop-slight-edge-in-new-monmouth-poll.html |
People look at the Cadillac Lyriq electric vehicle at the Cadillac booth at the North American International Auto Show in Detroit, Michigan on September 14, 2022.
GM is among the first major automakers to report third-quarter sales Monday. Overall, analysts estimate automakers sold 3.4 million new light-duty vehicles in the U.S., down less than 1% from the same time last year. | 2022-10-03T18:25:22Z | www.cnbc.com | GM third quarter sales rise 24% over 2021 totals | https://www.cnbc.com/2022/10/03/gm-third-quarter-sales-rise-24percent-over-2021-totals.html | https://www.cnbc.com/2022/10/03/gm-third-quarter-sales-rise-24percent-over-2021-totals.html |
One thing that separates fledgling investors from the pros is reading financial statements. For amateurs, comparing the so-called headline numbers — sales and earnings — to estimates is the full extent of research into a company, whereas in more experienced hands, they are just a starting point. If you want to become a better investor, make like a pro and digest the financials. It's the best way to truly understand a company's performance. In the lead up to the start of earnings season later this month, we've put together a five-part series to help Club members better understand all the tables and charts and how to analyze them. Here's Part 1: The income statement. Part 1: Income statement In the financial statements that companies report to the Securities and Exchange Commission and shareholders on a quarterly and annual basis, there are three main sections: the income statement, the balance statement and the cash flow statement. They are all important for different reasons. While the cash flow statement shows how much actual money a company brought in or used to run its businesses and the balance sheet displays its overall financial health, the income statement sums up a company's revenues and expenses over a period of time. Here, we'll walk through how to read and interpret the latter. The income statement gives us our best view of management's performance. How efficiently is the team running its business? How is it handling risk? Adjusting to economic headwinds? It also helps us to better analyze the top (sales) and bottom (profits) lines. Consider: A company may beat expectations on sales, but look a little deeper and you might discover it had to slash prices — increase "promotional activity" — to get there. Or a company reports better-than-expected earnings, but cut its research and development (R & D) budget to do it, thus imperiling future innovation. These are not high-quality beats. On the other hand, a company could deliver weaker earnings because it needed to invest more to ramp up production to meet strong demand. This miss isn't as bad as it looks, since the company is setting up to increase longer-term profits. At the Investing Club, we'll take that over an earnings beat at the cost of investing in the business to grow even more in the future. In terms of presentation, income statements can vary slightly company to company, but they all have the same key metrics. We'll use the recent statement from Club holding Apple (AAPL) as an example. The best way to read the statement is top to bottom. The top part focuses on sales — the money brought in — while the middle focuses on costs and expenses. The bottom is where you find earnings, which alone can't give you a clear view of management's performance. All three parts need parsing. Sales The top line represents the total dollar amount of goods and services sold in the period. Most companies will also provide some breakdown by operating segments. Apple goes a step further by breaking the sales figure into products and services, since those are the two primary sources of revenue for the company. Why you should care : There are many things a company can do to improve the bottom line. But it's often at the cost of longer-term growth, such as cutting spending on R & D or marketing. Sales, on the other hand, are harder to engineer and so speak directly to the demand for a company's products. Cost of goods sold The "COGS" line shows the direct cost to create, store and deliver products or services . The greatest input here is generally the cost of materials (and in some cases may also include an estimate of warranty costs). Why you should care : This can help us estimate how profitable a company could become as efficiencies below this line item (in the operating expense section of the income statement) improve. The greater the gross profit margin, the more flexibility a company has for other expenses — such as marketing or R & D — or to lower costs in the pursuit of greater sales volume. Gross margin This is the percentage of sales left over after accounting for COGS . In Apple's most recent earnings report, the company generated total sales of $82.96 billion and COGS came in at $47.07 billion. Subtracting the COGS from the sales, we get gross margin dollars of $35.89 billion. To calculate a gross margin, we would divide the gross margin dollars by total sales. Apple's gross margin is 43.26% (simple math: divide $35.89 by $82.96, then take the answer and move the decimal point two places to the right to represent it in percentage terms). Why you should care : This key metric of profitability can be used to monitor a company's efficiency in sourcing raw goods or, in some cases, the cost of logistics to get goods to customers. Since it includes the cost of the raw goods (found in COGS), which fluctuate from product to product, the margin also highlights the sales mix (the different streams of revenue). If the margin fluctuates, then the sales mix is something to listen for on an earnings conference call. For example, luxury products typically have higher gross margins because consumers are paying up for brand recognition. But if the margins comes down, it may mean consumers are tightening their belts and more likely to spend discretionary income on lower-priced goods. Operating expenses These costs are made up of R & D and selling, general and administrative (SG & A) costs . (Note, here is one example where we may see some variance from company to company. Club holding Amazon (AMZN), for example, explicitly states fulfillment costs as it is more relevant to understanding that business. That said, the SG & A and R & D categories are quite standard across companies.) We always want to see a healthy R & D budget because while it's an expense in a given quarter, it's the engine that drives innovation and helps a company stay competitive. SG & A may include items such as salaries, advertising, rent, utilities, marketing, legal costs, office supplies and so on — the basic expenses to keep the lights on. Also included here will be depreciation and amortization expenses. Why you should care : A good management team operates to increase efficiency and productivity. Operating expenses are the expenses most directly within their control. A team only has so much power over the cost of things like raw goods (which are related to COGS), but the items that go into operating expenses are directly within their control. By studying these expenses, especially as a percentage of revenue (SG & A divided by sales or R & D divided by sales), we can get a sense of how much operating leverage the team is getting. For example, if SG & A expenses as a percentage of sales are increasing over time, it could indicate that the return on those expenditures is diminishing and management is losing operating leverage. On the other hand, if SG & A as a percentage of revenue holds constant it tells us that we are getting similar returns on that spend, which may justify spending more as every dollar increase here leads to a proportional increase in sales. If the percentage is going down over time, then we are seeing operating leverage improve as the team is spending less per dollar of revenue on SG & A, an indication that efficiency is improving and therefore so is potential earnings power. Operating income Once we remove operating expenses from gross margin dollars , we are left with what is known as operating income. Some may also refer to this as a company's "EBIT" margin, which stands for earnings before interest and taxes. Similar to what we did with gross margin dollars, we can take this operating income, divide it by total sales and calculate the company's operating margin. In Apple's case, we would take operating income of $23.08 billion divided by sales of $82.96 billion (remember to move that decimal over) to get an operating margin of 27.82%. Why you should care : An analysis of the operating margin can tell us how efficiently management is running a company against historical standards or against others in the industry. While changes in the margin are expected from quarter to quarter, or year to year, the why behind the change is crucial. Some questions to be considered: Is too much being spent on marketing? Is enough being spent on R & D? Are fixed costs too high versus peers? Have depreciation and amortization dynamics changed? Did a company hire too many people? Some companies will report a line item before reporting operating income referred to as "EBITDA," which stands for earnings before interest, taxes, depreciation and amortization . The reason we don't find it on Apple's income statement is because EBITDA is not a GAAP measurement and Apple reports on a GAAP (generally accepted accounting principles) basis. Opinions on the usefulness of this metric are mixed. Depreciation and amortization are very real expenses. They may not require a cash outlay to realize, but eventually an asset must be replaced and that is a very real cash cost. The metric is widely used by companies and analysts and can move stock prices. We certainly use it for the Club. How much weight an investor should give to it is up for debate. On the one hand, it does provide a good means of comparing a company to peers because it can provide insight into the strength of a company's operating profitability before non-cash expenses. This helps generate a better apples-to-apples comparison across an industry to see which companies are more efficiently managing items above the EBITDA line, such as the cost of goods (COGS), SG & A, and R & D. On the other hand, it somewhat clouds the profitability profile because it attempts to focus investor attention on a profit metric without including the cost of depreciation or amortization. Other income/expenses This includes interest and dividend income, interest expenses, and other non-operating related income/expenses, such as realized gains or losses on currency hedges used to protect against swings in foreign exchange rates. Remove this from operating income or "EBIT" and we are left with "EBT" (earnings before taxes), which Apple refers to intuitively as "income before provision for income taxes." Why you should care : While less attention is usually placed on the interest and taxes part of the income statement since as it is not a major indicator of operating performance, it is worth a quick look just to ensure there are no surprises. Additionally, if there is a large fluctuation in taxes it may be worth a closer inspection just to ensure there has not been a material change in the tax burden going forward. Net income From there, we have the tax line and once we remove taxes , we are left with net income. Of course, seeing as we trade stocks based on earnings-per-share, we want a per-share number. This is simply calculated as net income divided by shares outstanding. In Apple's case, this would be $19.44 billion divided by 16.26 billion shares outstanding (in general we want the diluted share count as it incorporates any dilution that may occur from items such as convertible debt or employee compensation plans), which results in earnings of $1.20 per share. Why you should care : The primary objective of a business is to generate profits. Without a profit, the business is simply not sustainable. Moreover, earnings-per-share are used to value a business. If earnings go up, then the stock can appreciate sustainably as the multiple (calculated by dividing the price of the stock by forward next 12 months earnings estimates) placed on those earnings need not expand. Remember, stock appreciation via price-to-earnings multiple expansion is less favorable and riskier than stock price appreciation based on earnings growth. Bottom line Reading an income statement can give you an edge when it comes to determining the quality of an earnings release or when comparing a company against its peers. If you know how to read an income statement, cash flow statement, balance sheet and listen to an earnings call, after a while, you can pretty much anticipate what Wall Street analysts will say about the quarter, especially if you know what they were looking for coming into the print. Stay tuned for Part 2 in this financial statement series for the Investing Playbook, where we will go over Apple's balance sheet statement. (Jim Cramer's Charitable Trust is long AAPL and AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. | 2022-10-03T18:25:38Z | www.cnbc.com | How to analyze an earnings report — Part 1: The income statement | https://www.cnbc.com/2022/10/03/how-to-analyze-an-earnings-report-part-1-the-income-statement.html | https://www.cnbc.com/2022/10/03/how-to-analyze-an-earnings-report-part-1-the-income-statement.html |
Satellite operator Viasat up 36% after selling military communications unit to L3Harris for $2 billion
Viasat offices are shown at the company's headquarters in Carlsbad, California, March 9, 2022.
Shares of Viasat surged 36% Monday to about $41 per share, while L3Harris stock climbed about 4% to roughly $216 per share. | 2022-10-03T18:26:41Z | www.cnbc.com | Viasat sells military satellite communications business to L3Harris | https://www.cnbc.com/2022/10/03/viasat-sells-military-satellite-communications-business-to-l3harris.html | https://www.cnbc.com/2022/10/03/viasat-sells-military-satellite-communications-business-to-l3harris.html |
Help the environment by using one of these credit or debit cards, created by fintech companies.
Massimo Colombo | Moment | Getty Images
When it comes to choosing the right credit card for your lifestyle, it's important to consider your spending habits as well as your personal values.
Fintech companies have recently started to think the same way, aligning themselves with consumers' current standards and morals — working to reduce carbon dioxide emissions, for instance, or supporting societal causes such as gender equality — through new financial products.
John Tobin-de la Puente, professor of practice of corporate sustainability at the Dyson School of Applied Economics and Management at Cornell University, notes that in recent years, there has been a significant shift in how people think about investing and spending their money.
"One hundred years ago, you would invest your money in a way that maximized returns in the market. You didn't mix your personal values with your finances," says Tobin-de la Puente. "If tobacco had the best returns, you would invest in tobacco stocks and then at the end of the year, you would donate to public health organizations, but this might cause cognitive dissonance."
Another interesting trend: As these new, more socially and environmentally conscious financial products have gained popularity, so has the overall scrutiny of them.
The U.S. Securities and Exchange Commission recently announced the creation of a task force that would investigate misconduct related to environmental, social and governance funds, many of which claim to avoid investing in tobacco, oil, coal and firearm companies.
With so many companies saying their financial products are helping the environment, it can be difficult to figure out which ones are actually making a difference. Below, Select takes a closer look at three credit and debit cards that claim to help the environment by making eco-friendly promises.
The Aspiration Zero Credit Card
On Aspiration's secure site
0.5% cash back on all eligible purchases (this can be increased to 1.0% cash back; see terms for details*)
$300 welcome bonus when you spend $3,000 on qualifying transactions within the first three months
Either 3% of the amount of each transfer or $5, whichever is greater.
*Terms apply.
Aspiration offers several financial products, including a bank account, an investment account and a credit card. With a $60 annual fee, the Aspiration Zero Credit Card offers an unlimited 0.5% cash back and up to 1% cash back on all eligible purchases, as well as a welcome bonus of $300 if you spend $3,000 with the card within the first three months of opening your account.
According to the card issuer, every time you swipe the card, one tree is planted, with the idea being that consumers can effectively reduce their carbon footprint by making purchases with the card.
While 0.5% is the default cash-back rate, if you reach carbon-neutral status — which you can do by spending enough for 60 trees to be planted or by using your card 60 times in a month — you'll get 1% cash back on every purchase made that month. And thanks to the card's Plant Your Change function, Aspiration automatically rounds up your purchase to the nearest dollar and plants an additional tree.
Keep in mind that the card may not actually be as eco-friendly as Aspiration's executives have claimed. A ProPublica article determined that, in 2021, CEO and co-founder Andrei Cherny claimed far more trees, 35 million, had been planted through the 'Plant Your Change initiative' than actually had been, 12 million at the time of publication. Cherny responded to those claims by asserting that it can take up to 18 months to plant a tree after the time of transaction.
"As mentioned, to make sure that tree planting is a high quality process that maximizes the potential for tree survival, it can take up to 18 months to plant trees after funding," says Sehrish Sayani, Director of Communications at Aspiration. "This includes planting during appropriate planting and growing seasons, planning all logistics, starting up nurseries, and accounting for any climate, political or health challenges that might arise."
That said, if you choose to open an account with the company's banking service, Aspiration's website states "deposits won't be used to finance fossil fuel exploration or production projects." Banks can choose how to use their customers' deposited funds, and Aspiration promises not to use that money to fund oil and coal efforts that would have a negative impact on the environment.
The FutureCard Visa Debit Card is a free digital debit card that provides cash-back rewards when you use it to pay for goods and services that have a lower carbon footprint than other alternatives — it's meant to encourage people to reduce their carbon footprint by using public transportation instead of driving or by buying thrifted clothing rather than fast fashion.
6% back on select Future partners, brands, 5% back on public transportation, thrift stores, electric vehicle charging, bike shops, electric scooters, plant-based food alternatives, recognized sustainable brands and 1% back on all other eligible purchases (up to the first $25,000 worth of purchases)
Since this is a debit card, cardholders can connect it to a bank account, cash app or Venmo. Cardholders won't need to undergo a credit check to get the card and your payment history won't be reported to the credit bureaus. While there's no welcome bonus, there are also no annual fees or foreign transaction fees.
Cardholders can receive 6% cash back by using the card with certain Future partners, 5% cash back by using public transportation, shopping at thrift stores, charging electric vehicles, as well as for purchases made at bike shops, and for plant-based meat alternatives and electric scooters. You'll also get 1% cash back for all other purchases. Note that these cash-back rates only apply to up to the first $25,000 worth of purchases per calendar year.
In order to receive cash-back rewards for purchases involving plant-based meat alternatives, cardholders will need to send photos of their receipts to Future via email, which may be cumbersome process for some. When it comes to redeeming your rewards, cardholders automatically earn a statement credit at the end of each billing cycle.
Ando Visa™ Debit Card
The Ando Visa™ Debit Card is a mobile banking service that offers a checking account, a high-yield savings account and a debit card. All bank accounts are FDIC-insured. While traditional banks exercise discretion when it comes to how they choose to invest your deposits, potentially using them to fund fossil fuel-related projects, Ando promises to only fund clean initiatives with the money you're depositing.
Information about the Ando Visa™ Debit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication. Community Federal Savings Bank is a Member FDIC.
1.5% cash back on all eligible rounded-up transactions
Fee-free withdrawals from more than 34,000 MoneyPass® ATMs
While the Ando Visa Debit Card has one of the best cash-back rates for debit cards on the market, cardholders will need to enroll in the Change That Counts feature, which rounds up your debit card transactions to the nearest dollar to let you earn the full 1.5% cash back.
Like Aspiration, Ando also promises to use the rounded up money from your transactions to plant a tree through a tree-planting partner selected by the company. Cardholders can also connect their Ando bank account or an external bank account to fund their debit card.
Use a traditional card and donate your rewards to charity
Although each of the cards listed above claims to be helping the environment, you may be able to achieve the same goal by opting for a traditional credit card and using it to rack up rewards to donate to relevant environmental causes — or by redeeming those points to buy more sustainable goods.
In that case, no-annual-fee cash-back cards — such as the Wells Fargo Active Cash® Card, the Citi Custom Cash Card or the Chase Freedom Unlimited® Credit Card — would all make good options. These traditional cards all earn cash back at a higher rate than the cards listed above, so you may be able to donate more to eco-friendly charities over time.
Note that traditional banks may have investments in, finance or otherwise support non eco-friendly and fossil-fuel companies.
Aspiration launches first credit card: Earn cash back and plant trees with every purchase
This travel credit card rewards eco-friendly adventurers
Socially responsible investing can help you make a positive impact: Here’s what you need to know | 2022-10-03T21:12:03Z | www.cnbc.com | Best Eco-friendly Debit and Credit Cards of 2022 | https://www.cnbc.com/select/best-eco-friendly-debit-and-credit-cards/ | https://www.cnbc.com/select/best-eco-friendly-debit-and-credit-cards/ |
The release comes as the Department of Justice is conducting a criminal investigation of Trump for taking government documents with him when he left office.
A detailed property inventory of documents and other items seized from former U.S. President Donald Trump's Mar-a-Lago estate is seen after the document was released to the public by the U.S. District Court for the Southern District of Florida in West Palm Beach, Florida, September 2, 2022.
The communications related to NARA's efforts to recover those documents, which included letters to Trump from former President Barack Obama and North Korean dictator Kim Jong Un. They also expressed the agency's concern about Trump's reported penchant for ripping some documents he read in the White House.
Other communications released Monday included correspondence between NARA and the House Committee on Oversight and Reform, which earlier this year asked David Ferriero, the archivist of the United States, for details about 15 boxes of presidential records that it had recently recovered from Trump's Mar-a-Lago club residence in Palm Beach, Florida.
The release comes as the Justice Department is conducting a criminal investigation of Trump for taking government documents with him when he left office.
Trump took more than 700 pages of classified documents from White House
That probe led to an FBI raid in early August of the Mar-a-Lago Club. Agents seized thousands of government records, a number of them highly classified. The raid occurred after the DOJ came to suspect that Trump had retained more official documents than the ones included in the 15 boxes given to NARA.
As an example, Stern wrote "the original correspondence between President Trump and North Korean Leader Kim Jong-un were not transferred to us; it is our understanding that in January 2021, just prior to the end of the Administration, the originals were put in a binder for the President, but were never transferred to the Office of Records Management for transfer to NARA."
"It is essential that these original records because transferred to NARA as soon as possible."
Stern added that the letter that former President Obama left for Trump at that Oval Office when Obama's presidency ended likewise "has not been transferred" to NARA.
"It is a Presidential record," and thus must be held by NARA, Stern noted.
Stern also wrote that NARA understood that about two dozen boxes of original presidential records were kept in the residence of the White House during Trump's final year in office, but had not yet been sent to NARA "despite a determination by [White House counsel] Pat Cipollone in the final days of the Administration that they need be." | 2022-10-03T22:11:29Z | www.cnbc.com | Trump documents: National Archives release records about recovery effort | https://www.cnbc.com/2022/10/03/trump-documents-national-archives-release-records-about-recovery-effort.html | https://www.cnbc.com/2022/10/03/trump-documents-national-archives-release-records-about-recovery-effort.html |
The U.K.'s property market has been thrown into turmoil after political turmoil saw borrowing costs in the country soar. Earlier this month, expansive tax cuts announced by U.K. Finance Minister Kwasi Kwarteng sent interest rates on U.K. government bonds to their highest levels in over a decade. This saw British property stocks become less attractive to investors, who turned to government bonds as a higher-yielding — and safer — bets. As a result, investment research group Stifel Europe made "significant" downgrades across the sector. Here are the five stocks that saw the biggest cuts to their price targets by Stifel, along with their ratings: In a Sept. 30 report titled "In Liz we're Trussed," the analysts said interest rates, driven by government policy, were the key driver for their outlook on the property sector. "The gamble to generate growth via lower taxes has sent shock waves through the financial markets, such that the 10-year gilt yield is up over 100bps in two weeks, and 230bps in two months," they said. The report noted that the stock prices of property companies had yet to factor in the impact of rising interest rates, due to a lag between property valuations and the disclosure of these valuations. In the meantime, Stifel believes that corporate bond yields, which are priced in real-time, are good indicators of future pressures on property assets. One of the sector's leading companies, SEGRO, has seen the interest rate on its bonds rise to 6.4% from 1.2% just over a year ago. Hammerson, the owner of multiple shopping malls, has similarly seen its bond yields touch 10.7% from 2.6% last year. Shaftesbury The West End property investment company saw the biggest cut in price target in percentage terms from Stifel Europe. The analysts said that while the company might benefit from weaker sterling , it won't be immune to rising interest rates. Shares in the company have already fallen by 42% this year and are now trading at 3.5% below Stifel's price target. British Land Stifel said its previous positive outlook for the FTSE 100 company had reversed due to the significantly deteriorating macroeconomic conditions prompting a rating downgrade. The analysts expect the London office space property sector, where British Land has significant investments, to lose value this year, as well as 2023. Stifel's note to clients said British Land was unlikely to be upgraded in the short-term until there's more clarity on the change in property values. As a result, shares in the company have fallen by 35% this year. Great Portland Estates Despite suffering a 65% cut in its price target, the FTSE 250 stock still has a buy rating from Stifel. Shares in the company are expected to rise by 10% by the end of the year, according to Stifel. The research note said that while Great Portland Estates will also face headwinds from rising interest rates, its "conservatively financed" balance sheet will allow it to emerge stronger than its peers. The company reported a loan-to-value of just 24% in its most recent filing, which Stifel said will give it plenty of room to expand when property asset prices are declining. "The shares will likely be volatile in the short term, but at the current valuation, the shares represent a deep value opportunity for investors willing to endure a bumpy ride, in our opinion," they said. 'Radical change in political leadership' John Cahill, led analyst of the Stifel note, welcomed the U.K. government's U-turn on its plans to cut the top tax rate, but said he still saw their large spending plans as inappropriate in the current environment. "This may not be our last downgrade unless there is a radical change in political leadership in the U.K. and a U-turn in fiscal policy," he said in the note. "It is not impossible to imagine the Prime Minister fires the Chancellor in an effort to save her position and electoral suicide for the Conservative party." | 2022-10-04T01:27:21Z | www.cnbc.com | UK property market could be about crack. Here's how to trade the sector, analyst says | https://www.cnbc.com/2022/10/04/uk-property-market-could-be-about-crack-heres-how-to-trade-the-sector-analyst-says.html | https://www.cnbc.com/2022/10/04/uk-property-market-could-be-about-crack-heres-how-to-trade-the-sector-analyst-says.html |
China aims to reach peak carbon emissions in 2030. Pictured here is a wind farm in Chongqing in southwest China, on June 28, 2022.
Degrowth: Is it time to live better with less?
China's leaders also recognize that, in the long term, China's development will not be economically sustainable – and hence politically and socially sustainable – until it is also environmentally so.
Cory Combs
Why climate change could lead to a financial crisis (and what we can do about it
UBS discusses what China needs to do to meet its decarbonization goals | 2022-10-04T03:28:52Z | www.cnbc.com | China's carbon neutral climate goals could spawn new global players | https://www.cnbc.com/2022/10/04/chinas-carbon-neutral-climate-goals-could-spawn-new-global-players.html | https://www.cnbc.com/2022/10/04/chinas-carbon-neutral-climate-goals-could-spawn-new-global-players.html |
The former football star Walker adamantly denied the claim detailed in a Daily Beast article, calling it a "flat-out lie," and vowed to sue the news outlet.
In another tweet Monday night, Christian wrote, "Every family member of Herschel Walker asked him not to run for office, because we all knew (some of) his past. Every single one. He decided to give us the middle finger and air out all of his dirty laundry in public, while simultaneously lying about it."
Warnock and Sen. Jon Ossoff won Georgia's two Senate seats in election run-offs in early 2021, giving Democrats majority control of the Senate.
The Daily Beast's article quoted an unidentified woman who said she became pregnant by Walker when they were dating in 2009, at a time when he was not married, and that he "urged her to get an abortion."
The outlet reported that the woman said she was telling her story because of Walker's public stance as a GOP candidate on abortion, which he claims to oppose with no exceptions for rape or incest.
Sollenberger in June broke the news that Walker had three other children with different women besides Christian, who up to that point was his only publicly known son. One of the children was a 10-year-old boy that Walker has not played an active role in raising, the Daily Beast reported in June.
Walker, who is Black, has been critical of African-American absentee fathers.
"I'm noting taking this anymore," Walker wrote in his statement Monday. "I planning [sic] to sue the Daily Beast for this defamatory lie. It will be filed tomorrow morning." | 2022-10-04T04:21:24Z | www.cnbc.com | Herschel Walker denies abortion claim in Georgia Senate race | https://www.cnbc.com/2022/10/04/georgia-senate-gop-candidate-herschel-walker-denies-abortion-claim.html | https://www.cnbc.com/2022/10/04/georgia-senate-gop-candidate-herschel-walker-denies-abortion-claim.html |
Investors looking to shore up their portfolios in this volatile market should look into buying companies with strong free cash flows, according to Morgan Stanley. Free cash flow theoretically measures the amount of cash a business will have left after paying operating expenditures. Morgan Stanley found that in the last 12 months, operating cash flows have increased nearly 5% on the year to $2.2 trillion, and capital expenditure spending increased by more than 18% to $786.1 billion. This is important because it shows what companies may have a better financial foundation in place if the economy does fall into a recession, wrote strategist Todd Castagno in a Friday note. Investors have been wary of a U.S. recession following two consecutive quarters of negative gross domestic product and continued high inflation that's spurred aggressive interest rate hikes from the Federal Reserve. Markets have been choppy all year but had a particularly dismal September, where the S & P 500 hit a new bear market low. "Self-financing companies with strong FCF may be better able to weather a prolonged storm, deploying capital effectively and seizing upon opportunities that come along the way," Castagno wrote. "Cash rich companies with high free cash flow yields should also have better downside protection, while providing longer-term upside potential if management is able to deploy cash effectively." Morgan Stanley also made a list of companies with strong free cash flows ranging from 10% to nearly 30% as ideas for investors, though the bank notes that individual assessment is warranted before buying any of the names. Most names on the list are energy or materials companies such as Marathon Oil and Steel Dynamics. There are also industrial names such as Manpower Group , health care companies such as Jazz Pharmaceuticals and Info Tech names like Western Union Company . The year-to-date performance of names on the list has been varied. Energy names such as Marathon Oil and HF Sinclair company have surged this year, up more than 40% and 65%, respectively. But other names on the list are trading at more of a discount. Dow, for instance, is down about 18% this year. Westlake Corporation has also shed more than 11%. Overall, however, the group has had a solid performance. So far this year, the group has outperformed the S & P 500 by roughly 21%, according to Morgan Stanley. — CNBC's Michael Bloom contributed to this report.
Market rout has muni bonds looking attractive. How to add them to your portfolio | 2022-10-04T04:21:30Z | www.cnbc.com | Morgan Stanley says these cash-rich companies are set up to 'weather a prolonged storm' | https://www.cnbc.com/2022/10/04/morgan-stanley-says-these-cash-rich-companies-are-set-up-to-weather-a-prolonged-storm.html | https://www.cnbc.com/2022/10/04/morgan-stanley-says-these-cash-rich-companies-are-set-up-to-weather-a-prolonged-storm.html |
President Ronald Reagan holding up an ax emblazoned with "The Official TAX AX!" at a speech in 1986.
Truss and her Finance Minister Kwasi Kwarteng's so-called mini-budget has been slammed by various think tanks, billionaire hedge fund managers, and politicians within their own Conservative Party. Polls show the opposition Labour party rising to a level of popularity not seen since the 1990s. In a rare statement, even the International Monetary Fund said it was not the right time for such a fiscal pivot. | 2022-10-04T06:40:22Z | www.cnbc.com | UK Truss' tax cuts have been compared to 'Reaganomics.' But there are differences | https://www.cnbc.com/2022/10/04/uk-truss-tax-cuts-have-been-compared-to-reaganomics-but-there-are-differences.html | https://www.cnbc.com/2022/10/04/uk-truss-tax-cuts-have-been-compared-to-reaganomics-but-there-are-differences.html |
The main concern for Credit Suisse was whether it could restructure its business without the need for additional financing. The most immediate manifestation of this growing concern was the escalating cost of buying Credit Suisse's credit default swaps.
A credit default swap (CDS) is a financial derivative that allows an investor to swap or offset their credit risk with that of another investor. Investors use it to hedge credit risk.
As we can see, Credit Suisse's credit default swap (CDS) costs have significantly outpaced those of UBS, the top Swiss bank, and Credit Suisse, the second largest bank. Credit Suisse's credit default swaps jumped to an all-time high on Monday.
Meanwhile, Credit Suisse's stock has plunged, falling more than 20% in September and has fallen about 60% so far this year.
Credit Suisse has said that it will disclose a sweeping restructuring plan on Oct. 27. It is believed that the bank may sell or shutter parts of its global investment banking franchise as part of that plan. For this, the market has different opinions.
Analysts at Bank of America say that equity financing will be central to the restructuring at this point in time due to the rising cost of debt. If Credit Suisse exits the capital-intensive investment banking business, this will alleviate some of the capital pressure, while also improving its debt financing costs.
Jefferies analysts wrote that asset sales are only a "partial solution" because the bank would be a forced seller in a down market. The sales would also cut future earnings and cost 1.5 billion to 2.5 billion Swiss francs in restructuring costs.
KBW analysts wrote that Credit Suisse needs around 6 billion Swiss francs to support its restructuring plan and "protect from the unknown." While asset sales will help, about 4 billion Swiss francs of the effort will likely come by selling shares, they said.
While the current situation at Credit Suisse has created some degree of nervousness in the market, most analysts do not see this as a repeat of the Lehman moment and generally believe that the current crisis at Credit Suisse does not pose a risk to the banking system as a whole.
Economist Mohamed El-Erian pointed out that this actually shows the anxiety of investors about the functioning of the market, so many years of repressed interest rates brought about by a variety of problems, finally slowly began to surface.
Mohamed El-Erian,
Chief economic adviser at Allianz
"So I do not think this is a Lehman moment. It is the market reaction. That's the interesting thing here. And it tells you that there's anxiety not only about the things we knew, tightening financial conditions, and central bank mistakes, slowing global economy, all these other non-economic issues. There's also concern about market functioning. and that's what the UK and Credit Suisse really tell you is that market functioning, after years of repressed interest rates are starting to be an issue." | 2022-10-04T07:06:22Z | www.cnbc.com | CCTV Script 04/10/22 | https://www.cnbc.com/2022/10/04/cctv-script-04/10/22.html | https://www.cnbc.com/2022/10/04/cctv-script-04/10/22.html |
Investor anxiety over Credit Suisse has sent its shares tumbling over recent days , but short sellers appear to be eyeing another European bank, data shows. Paris-headquartered BNP Paribas was the most shorted European banking stock as of Monday, with a total of $1.68 billion in bets against the bank's shares, according to data from S3 Partners. Short-sellers profit when stocks fall. They borrow shares to immediately sell them and plan to buy them back when the price is lower, making a profit from the difference. More than 3.66% of traded shares in BNP Paribas were used to short it — the highest percentage among 17 banks for which data is available, according to the data analytics firm S3. While shares in the French bank have already fallen by 28% this year, most analysts still have a buy rating on BNP Paribas, according to FactSet, with analysts giving the stock an average upside of 52%. Meanwhile, Credit Suisse was the eighth-most shorted European bank, with 2.42% of its floated shares used to bet against it. Shares in the bank pared losses after plunging as much as 10% on Monday. Over the year to date, Credit Suisse shares are down over 55%. The Financial Times reported Monday that the Swiss bank's executives were in talks with its major investors to reassure them amid rising concerns over the lender's financial health. In a statement on Monday, Credit Suisse told CNBC that it will provide an update on its strategy review when the bank releases its third-quarter results on Oct. 27. "It would be premature to comment on any potential outcomes before then," it said. In a separate memo obtained by CNBC, Credit Suisse's CEO urged people not to confuse "our day-to-day stock price performance with the strong capital base and liquidity position of the bank." Data shows that the Swiss bank had the second-largest increase in short-selling activity in September, with $167 million being bet against the shares. "With its recent market volatility we should see continue short selling in the stock as traders look to increase their exposure," a research note from S3 Partners said. Italian investment bank Mediobanca and Germany's Commerzbank were the second and third most shorted stocks, respectively, according to S3. | 2022-10-04T07:06:28Z | www.cnbc.com | Credit Suisse is under pressure, but short sellers appear to be eyeing another global bank | https://www.cnbc.com/2022/10/04/credit-suisse-is-under-pressure-but-short-sellers-appear-to-be-eyeing-another-global-bank.html | https://www.cnbc.com/2022/10/04/credit-suisse-is-under-pressure-but-short-sellers-appear-to-be-eyeing-another-global-bank.html |
Treasury yields fell across the board on Tuesday as stock markets rose to kick off the fourth quarter while investors continued to digest the unexpected slowdown of U.S. manufacturing.
The benchmark 10-year Treasury was down 6 basis points to 3.5854% at around 4 a.m. ET, after having surpassed the 4%-mark last week. The yield on the policy-sensitive 2-year Treasury fell to 4.0224% as it traded 8 basis points lower.
Stock markets rallied on Monday, closing higher as the new quarter began. Futures on major U.S. indexes followed their example and climbed higher on Tuesday. That's a significant shift from the previous quarter, and especially the month of September, which saw stocks slide considerably.
Markets also continued to absorb the unexpected decline of the U.S. Purchasing Managers' Index data for the manufacturing sector, which measures factory activity. During September, it slowed to the lowest level since May 2020, suggesting a drop in demand for factory-produced goods.
Tuesday will also bring insights into the labor market as job openings data for August is released. | 2022-10-04T09:29:50Z | www.cnbc.com | Treasury yields tumble as stock market rebounds | https://www.cnbc.com/2022/10/04/treasury-yields-tumble-as-stock-market-rebounds.html | https://www.cnbc.com/2022/10/04/treasury-yields-tumble-as-stock-market-rebounds.html |
East and southeast Asia are set to post growth rates below those in the five years prior to the pandemic.
We still have time to step back from the edge of recession. Nothing is inevitable. We must change course.
Secretary-General of UNCTAD
Focusing solely on a monetary policy approach — without addressing supply-side issues in trade, energy and food markets — to the cost-of-living crisis may indeed exacerbate it.
What is a recession, and can you predict one is going to happen? | 2022-10-04T09:29:57Z | www.cnbc.com | UNCTAD warns that Asia, global economy headed for a recession | https://www.cnbc.com/2022/10/04/unctad-warns-that-asia-global-economy-headed-for-a-recession.html | https://www.cnbc.com/2022/10/04/unctad-warns-that-asia-global-economy-headed-for-a-recession.html |
Credit Suisse to remain 'under pressure' but analysts wary of Lehman comparison
Credit Suisse shares briefly sank to an all-time low on Monday while credit default swaps hit a record high, as the market's skittishness about the Swiss bank's future became abundantly clear.
Shares continued to recover on Tuesday from the previous session's low of 3.60 Swiss francs ($3.64), but were still down more than 53% on the year.
This reflects a price-to-book ratio of 0.2x versus a European investment bank average of 0.44x, CFRA Equity Analyst Firdaus Ibrahim said in a note Monday. CFRA also lowered its earnings-per-share forecasts to -0.30 francs from -0.20 francs for 2022, and to 0.60 francs from 0.65 francs for 2023.
A price-to-book ratio measures the market value of a company's stock against its book value of equity, while earnings-per-share divides a company's profit by the outstanding shares of its common stock.
No solvency concerns for Credit Suisse, says analyst
Scholtz dismissed the idea that a "Lehman moment" could be on the horizon for Credit Suisse, pointing to the fact that markets knew that there were "serious issues" with the Lehman Brothers balance sheet in the runup to the 2008 crisis, and that "serious writedowns" were needed.
"Whilst there is a potential for new writedowns being announced by Credit Suisse at the end of the month when they're coming up with results, there is nothing publicly available at the moment that indicates that those writedowns will be sufficient to actually cause solvency issues for Credit Suisse," Scholtz said.
Citi says in a new note that concerns over Credit Suisse 'is not 2008'
"Its wealth management business is still a decent business, and if you look at the kind of multiples that its peers – especially standalone wealth management peers – trade at, then you can make a very strong case for some deep value in the name," he added. | 2022-10-04T11:18:43Z | www.cnbc.com | Credit Suisse to remain 'under pressure' but analysts wary of Lehman comparison | https://www.cnbc.com/2022/10/04/credit-suisse-to-remain-under-pressure-but-analysts-wary-of-lehman-comparison.html | https://www.cnbc.com/2022/10/04/credit-suisse-to-remain-under-pressure-but-analysts-wary-of-lehman-comparison.html |
That would affect the likes of Apple whose iPhone uses the company's proprietary Lightening charger.
European lawmakers are looking to introduce a law that would require electronic devices to use a common charger. EU lawmakers have proposed USB Type-C as the common standard.
That would affect companies like Apple and others that currently don't use USB Type-C. Apple's iPhone uses its proprietary Lightening charger. In theory, Apple would need to include the common charging type if it were to sell its iPhones in the EU.
"This future-proof law allows for the development of innovative charging solutions in the future, and it will benefit everyone - from frustrated consumers to our vulnerable environment," Alex Agius Saliba, a member of European Parliament, said in a press release. | 2022-10-04T11:44:50Z | www.cnbc.com | Apple could have to change iPhone charger to USB-C under new EU rules | https://www.cnbc.com/2022/10/04/apple-could-have-to-change-iphone-charger-to-usb-c-under-new-eu-rules.html | https://www.cnbc.com/2022/10/04/apple-could-have-to-change-iphone-charger-to-usb-c-under-new-eu-rules.html |
Bitterroot Capital Advisors, based in Bozeman, MT, is ranked No. 78 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
Accounts Under Management: 17
Andrew Martzloff, Managing Director, Principal & Founder
William Powers, Principal & Chief Compliance Officer
bitterrootcapital.com
118 East Main Street, Bozeman, MT 59715 | 2022-10-04T13:52:34Z | www.cnbc.com | Bitterroot Capital Advisors - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/bitterroot-capital-advisors-fa-100.html | https://www.cnbc.com/2022/10/04/bitterroot-capital-advisors-fa-100.html |
Certified Financial Group, based in Altamonte Springs, FL, is ranked No. 95 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
Total AUM: $2.2M
Sheri Cuff, President
Joseph Bert, Chief Executive Officer
financialgroup.com
1111 Douglas Avenue, Altamonte Springs, FL 32714 | 2022-10-04T13:53:22Z | www.cnbc.com | Certified Financial Group - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/certified-financial-group-fa-100.html | https://www.cnbc.com/2022/10/04/certified-financial-group-fa-100.html |
This advice often boils down to "stay calm" and "don't let short-term news lead to impulsive moves that have long-term consequences." Many advisors also offer a reminder that clients who already have a plan in place need to to trust in that and stay the course.
Helping consumers make smart money decisions is a key part of what the personal finance team does at CNBC, and that includes figuring out when to enlist help, and from who.
That mission has been a big driver behind the CNBC FA 100 list, now in its fourth year. The list is based on a proprietary methodology developed by CNBC in partnership with data provider AccuPoint Solutions. The process starts with data culled from SEC filings for a list of 39,818 registered investment advisory firms, which gets winnowed down to the final 100. (View the full methodology here.)
The top-ranked advisors on the CNBC list have an average 30 years in business, and collectively have more than $300 billion in assets under management.
Yet reports indicate that many consumers aren't thinking about an advisor as their first choice for financial help. A recent survey from advisor technology platform intelliflo found that 59% of respondents want financial advice but aren't sure where to get it. Those figures jump to 71% for Gen Zers surveyed, and 72% for millennials. (The firm polled 2,067 adults.)
If you are looking for financial assistance, we hope CNBC's FA 100 can be a resource in your search. The ranking is meant to be used as a starting point for investors who are looking for an advisor. We hope this list will help to narrow your search. If you're looking for an advisor with a particular specialty or background, search on sites like XY Planning Network and FPA PlannerSearch.
Expect to interview to several advisors as you look for someone you can trust, who feels like the right fit for your life and financial needs. | 2022-10-04T13:53:47Z | www.cnbc.com | CNBC's FA 100 recognizes advisors who help people make smart money moves | https://www.cnbc.com/2022/10/04/cnbcs-fa-100-recognizes-advisors-who-help-people-make-smart-money-moves.html | https://www.cnbc.com/2022/10/04/cnbcs-fa-100-recognizes-advisors-who-help-people-make-smart-money-moves.html |
Tune in: CNBC's top-rated FA 100 firm today on Halftime Report, 12 pm ET
George S. Farra (far left), co-founder and principal of Woodley Farra, and the team at Indianapolis-based financial advisory firm, which comes in at No. 1 on the CNBC FA 100 list for 2022.
In a high-inflation environment, stay away from growth and add to energy, says Hightower's Link
What we're trying to do is to help the client bring the future into the present.
co-founder and principal at Woodley Farra | 2022-10-04T13:53:53Z | www.cnbc.com | CNBC's No. 1 advisor agrees with Warren Buffett: 'He likes cash flow' | https://www.cnbc.com/2022/10/04/cnbcs-no-1-advisor-agrees-with-warren-buffett-he-likes-cash-flow.html | https://www.cnbc.com/2022/10/04/cnbcs-no-1-advisor-agrees-with-warren-buffett-he-likes-cash-flow.html |
Column Capital Advisors, based in Indianapolis, IN, is ranked No. 57 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
Brian Upchurch, President & Managing Director
Kevin Sweet, Chief Investment Officer
columncapital.com
3815 River Crossing Parkway, Suite 340, Indianapolis, IN 46240 | 2022-10-04T13:54:05Z | www.cnbc.com | Column Capital Advisors - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/column-capital-advisors-fa-100.html | https://www.cnbc.com/2022/10/04/column-capital-advisors-fa-100.html |
Donaldson Capital Management, based in Evansville, IN, is ranked No. 85 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
Sarah Moore, President
Ciavon Hartman, Chief Operations Officer & Chief Compliance Officer
dcmol.com
20 N.W. First Street, Fifth Floor, Evansville, IN 47708 | 2022-10-04T13:54:54Z | www.cnbc.com | Donaldson Capital Management - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/donaldson-capital-management-fa-100.html | https://www.cnbc.com/2022/10/04/donaldson-capital-management-fa-100.html |
Farr, Miller & Washington, based in Washington, D.C., is ranked No. 71 on the 2022 CNBC Financial Advisor 100 list. The firm also appeared on last year's FA 100 list.
Michael Farr, President & Chief Executive Officer
Taylor McGowan, Principal & Chief Investment Officer
Disclosure: Michael Farr, President & Chief Executive Officer of Farr, Miller & Washington, is a CNBC Contributor
farrmiller.com
1020 19th Street, NW Suite 200, Washington, DC 20036 | 2022-10-04T13:55:31Z | www.cnbc.com | Farr, Miller & Washington - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/farr-miller-washington-fa-100.html | https://www.cnbc.com/2022/10/04/farr-miller-washington-fa-100.html |
Hahn Capital Management, based in Walnut Creek, CA, is ranked No. 55 on the 2022 CNBC Financial Advisor 100 list. The firm also appeared on last year's FA 100 list.
John Schaeffer, President & Chief Investment Officer
Paul Javier, Chief Compliance Officer & Director of Operations
hahncap.com
1990 North California Boulevard, Suite 600, Walnut Creek, CA 94596 | 2022-10-04T13:56:32Z | www.cnbc.com | Hahn Capital Management - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/hahn-capital-management-fa-100.html | https://www.cnbc.com/2022/10/04/hahn-capital-management-fa-100.html |
Oak Ridge Investments, based in Chicago, IL, is ranked No. 50 on the 2022 CNBC Financial Advisor 100 list. The firm most recently appeared on the 2020 FA 100 list.
David Klaskin, Chief Executive Officer & Chief Investment Officer
Rob McVicker, Senior Vice President
Brian King, Senior Vice President & Senior Portfolio Manager
John Brinckerhoff, Chief Operating Officer
oakridgeinvest.com
10 South LaSalle Street, Suite 2130, Chicago, IL 60603 | 2022-10-04T13:58:44Z | www.cnbc.com | Oak Ridge Investments - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/oak-ridge-investments-fa-100.html | https://www.cnbc.com/2022/10/04/oak-ridge-investments-fa-100.html |
Professional Advisory Services, based in Vero Beach, FL, is ranked No. 15 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
David Jaffe, President
Carol Bieber, Vice President & Chief Commercial Officer
Kenneth Ligon III, Vice President
pa-services.com
2770 Indian River Boulevard, Suite 204, Vero Beach, FL 32960 | 2022-10-04T13:59:16Z | www.cnbc.com | Professional Advisory Services - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/professional-advisory-services-fa-100.html | https://www.cnbc.com/2022/10/04/professional-advisory-services-fa-100.html |
Billionaire investor Ray Dalio is having a change of heart about cash. The founder of Bridgewater Associates, one of the world's largest hedge funds, had been calling it "trash" since the purchasing power of cash diminishes amid rising inflation. Late Monday, he tweeted about his shift in thinking. "The facts have changed and I've changed my mind about cash as an asset: I no longer think cash is trash," he wrote. "At existing interest rates and with the Fed shrinking the balance sheet, it is now about neutral—neither a very good or very bad deal. In other words, the short-term interest rate is now about right." Cash as an asset has started to come back into focus as higher interest rates have led to it finally providing some return. The market turmoil also has investors looking for a safer bet. The Dow Jones Industrial Average and S & P 500 notched their biggest monthly losses in September since 2020. The Dow ended the quarter down 6.66%, finishing its third consecutive negative quarter for the first time since the third quarter of 2015. The S & P 500, meanwhile, hit a three-quarter losing streak for the first time since 2009. While stocks started October off with a rally, experts expect the turbulence to continue as the Federal Reserve continues to hike rates and fears about a possible recession grow. In September, Dalio predicted a rise in rates to about 4.5% will drag the economy down and result in a 20% plunge in equity prices. | 2022-10-04T13:59:36Z | www.cnbc.com | Ray Dalio says he's changed his mind and cash is no longer trash as an investment | https://www.cnbc.com/2022/10/04/ray-dalio-says-hes-changed-his-mind-and-cash-is-no-longer-trash-as-an-investment.html | https://www.cnbc.com/2022/10/04/ray-dalio-says-hes-changed-his-mind-and-cash-is-no-longer-trash-as-an-investment.html |
Applications for financial aid are now available for the 2023-2024 school year.
Applications for financial aid are now available for the upcoming academic year. Although the Free Application for Federal Student Aid for 2023-2024 isn't due until June 30, 2024, it's wise to apply as soon as you can.
"You want to maximize that free money first," said Sallie Mae spokesman Rick Castellano. "Before you borrow."
But students must first fill out the FAFSA to access any assistance. The FAFSA filing season for the 2023-24 academic year opened on Oct. 1 and the sooner students file, the better.
Just about every family will qualify for some form of college aid.
Sallie Mae spokesman
About 6 in 10 who used scholarships got them directly from their student's school. Those students received $6,335, on average.
How to use a 529 plan to save for college | 2022-10-04T14:01:16Z | www.cnbc.com | This is the best time to apply for college financial aid | https://www.cnbc.com/2022/10/04/this-is-the-best-time-to-apply-for-college-financial-aid.html | https://www.cnbc.com/2022/10/04/this-is-the-best-time-to-apply-for-college-financial-aid.html |
Wetherby Asset Management, based in San Francisco, CA, is ranked No. 20 on the 2022 CNBC Financial Advisor 100 list. This is the firm's first appearance on CNBC's FA 100 list.
Kristen Bauer, Chief Executive Officer
Deb Wetherby, Managing Partner
wetherby.com
580 California Street, 8th Floor, San Francisco, CA 94104 | 2022-10-04T14:01:48Z | www.cnbc.com | Wetherby Asset Management - Top 100 Financial Advisors 2022 | https://www.cnbc.com/2022/10/04/wetherby-asset-management-fa-100.html | https://www.cnbc.com/2022/10/04/wetherby-asset-management-fa-100.html |
This 34-year-old family-owned car auction brought in a record $675 million last year—by finally embracing the internet
Dave Magers has served as CEO of Mecum Auctions, the world's largest collector car auction house, since 2013.
Source: Mecum Auctions
Despite the popularity of websites like eBay, the world's largest auction house for collector cars never really embraced online bidding.
Not until the Covid-19 pandemic stepped in. What started as a survival tactic — a failsafe in case live events never came back — turned into a strategy that helped Mecum Auctions bring in a record $675 million in revenue last year, according to CEO Dave Magers.
The business, based in the small town of Walworth, Wisconsin, has been around since 1988. It wasn't exactly a small company pre-Covid: In 2019, it brought in more than $400 million in revenue from live auction events around the country. The auctions can attract anywhere from 20,000 attendees to 100,000 apiece, the company says.
Without them, Mecum was left with only an online bidding process that Magers admits was "pretty boring ... it was a static screen with a number on it, and you press a button."
Over four months of lockdown, the company built a new system that implements livestreaming video meant to make you feel like you're sitting in the front row of a fast-paced auction. The idea is to make you experience the excitement of bidding on a 1966 Shelby Cobra convertible, or the 1968 Ford Mustang driven by Steve McQueen in the movie "Bullitt" — even if you're sitting on your couch on the other side of the world.
Collector cars are on display at a Mecum Auctions live event in Kissimmee, Florida in January 2022.
The system only exists to augment live events: Mecum doesn't host online-only auctions. But when the company resumed live events in July 2020, its number of online bidders skyrocketed from roughly 50 per event to more than 1,700. People showed up again in person, too.
"We dramatically increased the number of eyeballs and the number of participants just because we had people sitting at home with nothing else to do," Magers says. "And this was something for them to do."
Replacing a 'pretty boring' system
Before Covid, Mecum was largely known for its televised auctions on auto-centric TV network Speedvision and NBC Sports. It's long been one of the top employers in Walworth, a town of more than 2,800 people near Wisconsin's Lake Geneva.
The company is still owned by founder and president Dana Mecum, who ran the business with his wife and four sons for decades. Magers, a former insurance executive, came on as CEO in 2013 after previously serving as Mecum's financial advisor.
Seven years later, Magers wasn't sure what to expect from Mecum's first live event in the pandemic era. "Our thought was: When we go back to auction, there's going to be a lot of empty seats, and there's going to be a lot of internet bidders," he says.
Instead, he was shocked to see that "every seat in the house was full." Attendees flocked to the in-person event at Indianapolis' Indiana State Fairgrounds, which can seat nearly 14,000 people. The 1,700 people who joined virtually could finally participate too, with a live video stream of both the auctioneer and the cars on the auction block.
"The auctioneer knows who you are and talks to you just like he talks to somebody who's sitting at the auction," Magers says.
Not only did the increased online activity not come at the expense of in-person attendees, Magers says having more internet bidders from around the world actually inspired more spirited bidding and resulted in higher sales numbers.
"The more people that are bidding on a car, the higher the price will be," says Magers, adding that Mecum was also experiencing pent-up demand from an audience that was eager to spend money after being cooped up in their homes during the pandemic — a phenomenon that affected consumers and businesses in a variety of markets.
"What we saw was prices started to rise relatively dramatically during the pandemic, because of that competition [and] because of built up resources," he says, adding that Mecum is on track to easily outpace last year's revenue totals in 2022.
Magers projects more to come: The company signed a media partnership with the Motor Trend Group last year that now airs Mecum's auctions on Motor Trend's television network, alongside 160 hours of auctions livestreamed online each year.
The idea is to reach as many potential bidders as possible, whether they attend in person or virtually, Magers says. The company's forced embrace of the internet could make the deal more fruitful if the livestreaming helps Mecum develop a more global audience beyond the reach of cable television.
"In our mind, the entertainment side of our business, the entertainment value of what we do, is relatively infinite," he says. "And we've barely scratched the surface of that."
Disclosure: CNBC parent NBCUniversal owns NBC Sports.
Billionaire Jim Koch gave up a six-figure job to launch Sam Adams: 'If you'd rather be rich than happy, you're a sociopath' | 2022-10-04T15:48:43Z | www.cnbc.com | Classic car house Mecum Auctions embraced internet, set record revenue | https://www.cnbc.com/2022/10/04/classic-car-house-mecum-auctions-embraced-internet-set-record-revenue.html | https://www.cnbc.com/2022/10/04/classic-car-house-mecum-auctions-embraced-internet-set-record-revenue.html |
In an event for advertisers on Monday, Meta introduced a new way for advertisers to display ads on Instagram's explore page, which shows content to users based on their preferences and routines, and on the profile pages of Instagram influencers with whom they have deals.
There's more pain to come in the tech sector, says Jefferies' Brent Thill | 2022-10-04T15:48:55Z | www.cnbc.com | Facebook is selling ads in new places on Instagram and Messenger | https://www.cnbc.com/2022/10/04/facebook-is-selling-ads-in-new-places-on-instagram-and-whatsapp-.html | https://www.cnbc.com/2022/10/04/facebook-is-selling-ads-in-new-places-on-instagram-and-whatsapp-.html |
Wastewater surveillance later found the virus had been spreading slightly in the New York City area for months.
The individual, a resident of Rockland County, had suffered from a fever, a stiff neck, back and abdominal pain as well constipation for five days. The patient was hospitalized and tested for enterovirus, a family of pathogens that in rare cases can cause weakness in the arms and legs.
How polio remerged in New York this year remains the subject of investigation, but public health officials believe the virus originated overseas in a country that still uses the oral polio vaccine. American health officials stopped using the oral vaccine more than 20 years ago because it contains live virus that can —in rare circumstances — mutate to become virulent, but it is still common in other countries.
As recently as 1988, polio paralyzed 350,000 children annually across 125 countries, according to data from the polio eradication initiative. Today, Pakistan and Afghanistan are the only countries in the world where the remaining wild type polio is still endemic with 27 cases confirmed so far this year. The annual number of wild poliovirus cases has declined by 99% since 1988.
Although recently immunized people can pass the oral vaccine virus on to others for a few weeks, it's not normally a problem because the strain is weakened so it does not cause disease, Rosenbauer said. When the weakened virus from the shots spreads from person to person, it can actually help build immunity in a community, he said. The transmission eventually burns out once enough people have immunity, he said.
The problem begins when immunization rates are so low in a community that the weakened virus from the vaccine spreads uninterrupted for a prolonged period and mutates into a virulent strain, called a vaccine-derived poliovirus. And when people who are not immunized catch the mutated vaccine-derived virus, they can become paralyzed like the patient in Rockland County.
"This thing has now circulated and emerged into something different," Rosenbauer said. "It's linked to the vaccine, but it's actually more linked to vaccination coverage because it doesn't happen overnight, it takes months for these amounts of changes to occur."
The U.S. uses an inactivated polio vaccine administered as a shot. The polio strains in the shots have been killed, meaning the virus cannot mutate into a more virulent form. The inactivated polio vaccine is very effective at preventing disease, but it is does not stop transmission of the virus.
It builds immunity in the bloodstream, which prevents the virus from attacking the spinal chord and causing paralysis. But the inactivated vaccine does not stop the virus from replicating in the gut, which means transmission between people is still possible if there's an outbreak.
Most people who catch polio don't show symptoms, while about one out every four people infected have a mild illness similar to the flu. Paralysis occurs in one out of every 200 or one out every 2,000 people who catch the virus depending on the strain. The identification of even single paralytic case is an alarm bell that indicates the virus has been spreading widely in the community.
"When we see one case of paralytic polio, that means there are probably hundreds and hundreds of cases that are out there in the community but not diagnosed because 75% of the cases are asymptomatic," Schnabel Ruppert said.
New York Health Commissioner Dr. Mary Bassett last Wednesday declared the poliovirus outbreak an imminent threat to public health.
New York isn't the only polio-free place where the virus has remerged this year. Poliovirus has also been detected in wastewater in London and Jerusalem. Fortunately, there are no known cases of paralysis in either city, though the U.K. health authorities declared a national incident after detecting the virus.
The New York poliovirus samples are genetically linked to the specimens found in London and Jerusalem, according to group. The viruses in all three countries are related to the weakened Sabin Type 2 virus used in one of the oral polio vaccines.
The U.S. and the U.K. do not use the oral vaccines at all, and Israel does not use oral vaccines containing the Sabin Type 2 strain, according to the initiative. And the poliovirus samples from the three countries are not linked to known vaccine-derived polio virus outbreaks in other countries such as the Democratic Republic of the Congo, Nigeria, Somalia and Yemen, Rosenbauer said.
This suggests that someone from a country that still administers the oral vaccine containing Sabin Type 2 traveled to Israel, the U.K. or the U.S. and seeded the weakened virus there, Rosenbauer said. It then mutated at some point to become more virulent but it's unclear whether this evolution occurred in Israel, the U.K. or the U.S., he said.
Israel and U.K. have detected poliovirus in sewage samples dating back to January and February respectively, well before the earliest known U.S. specimen from April, according the World Health Organization.
Health authorities in New York, Israel and the United Kingdom have all responded swiftly to prevent an explosive outbreak of polio like the one in the Netherlands 30 years ago, Rosenbauer said. The arrival of fall and winter in New York and London should also help slow transmission because polio doesn't spread as efficiently in colder weather, he said.
In Rockland County, more 6,400 doses of the inactivated vaccine have been administered so far this year and about 64% were given in the two ZIP codes with the lowest immunization rates for kids under age two, Schnabel Ruppert said. But there's still a long road ahead to achieve a vaccination rate of more than 90%, she said. Children need four doses of the vaccine and unvaccinated adults need three.
Rosenberg said while receiving the entire vaccination series is crucial, the biggest jump in protection against severe disease and death comes for the first dose, which is why it's so important for the unvaccinated to get their first shot now.
Rosenbauer with polio eradication initiative said the question is whether immunization campaigns with the inactivated vaccines in New York and London are enough, or whether the oral vaccine might need to be temporarily reintroduced to break the chain of transmission.
The CDC, in a statement, said it is not changing its recommendations on the use of the inactivated polio vaccine at this time. Polio is not endemic in the U.S. and vaccination coverage remains high at more than 92% nationwide, according to CDC. | 2022-10-04T15:49:01Z | www.cnbc.com | How polio silently spread in New York and left a person paralyzed | https://www.cnbc.com/2022/10/04/how-polio-silently-spread-in-new-york-and-left-a-person-paralyzed.html | https://www.cnbc.com/2022/10/04/how-polio-silently-spread-in-new-york-and-left-a-person-paralyzed.html |
One thing that separates fledgling investors from the pros is reading financial statements. For amateurs, comparing the so-called headline numbers — sales and earnings — to estimates is the full extent of research into a company, whereas in more experienced hands, they are just a starting point. If you want to become a better investor, make like a pro and digest the financials. It's the best way to truly understand a company's performance. In the lead up to the start of earnings season later this month, we've put together a five-part series to help Club members better understand all the tables and charts and how to analyze them. Here's Part 2: the balance sheet. Part 2: Balance sheet If the income statement, which we covered in Part 1 , is akin to a report card, the balance sheet is most like a physical exam: Here we discover just how healthy — or sick — a company is at the end of each quarter. This check-up includes the good (assets and equity) along with potential risk factors (liabilities). It's one of three main sections — the other two are the income sheet and the cash flow statement — included in the earnings reports companies file with the U.S. Securities and Exchange Commission on a quarterly and annual basis. Let's run through what's in most balance sheets and, more importantly, how understanding how to read one can help make you a better investor. First, some basics: All balance sheets are divided into three main parts: assets, liabilities and equity (assets minus liabilities). Additionally, assets and liabilities are segmented into short term (referred to as "current") and long term (referred to as "non-current"): Short term refers to those assets or liabilities intended to be held for a year or less, while long term refers to assets or liabilities with a lifespan greater than a year. As with our discussion on reading an income statement , we'll use Club holding Apple (AAPL) as our example. Here's what we see in Apple's most recent quarterly report. Current assets Cash and cash equivalents : Nothing to unpack here. This first line is cash and other things treated as cash — like short-term Treasurys. Apple puts "highly liquid investments with maturities of three months or less" here, considering bonds of longer maturities as marketable securities. Why you should care : Cash is the ultimate form of liquidity and allows companies to invest in growth and innovation without the need to raise funds by some other means, such as taking on additional debt or issuing additional shares. Marketable securities : These are extremely liquid securities that can quickly be converted to cash if needed. Examples of marketable securities include stocks, longer maturity bonds, derivatives, and other similar investments. But while they may be viewed as similar to cash, they're also more susceptible to market volatility so should be considered a shorter-term investment. Why you should care: Many analysts will include the marketable securities alongside cash and cash equivalents when thinking about how much readily available funds are on the balance sheet. Accounts receivable : This represents sales made on credit. When you buy an iPhone with a credit card, the company doesn't actually receive any cash at the time of purchase. As a result, Apple can't list the proceeds of that sale as cash on the balance sheet. Think of this as an IOU. Eventually, this moves over to the cash line once payment is actually collected. But until then, there is going to be some credit risk. Why you should care: In theory this represents cash to come in the future. That said, it is important to monitor fluctuations here. A rapid increase in receivables indicates that more sales are being made on credit and, if so, an investor must ensure that the company has not reduced the quality of credit it demands to sell goods or services, as this increases the risk that the cash is never actually received and the receivables are written down. Inventories : Apple can't sell you what they don't have. That's why the company keeps an inventory of its products. This line represents the total dollar value of that inventory. Since it isn't broken down by product, we don't have any detail on the mix. While that's normal, you might learn a bit more detail on the earnings call. Why you should care: Comparing inventory levels against history can tell us a bit about management's demand expectations. If management is bullish on demand, they may seek to build up inventory (such as before a holiday selling season). On the other hand, if inventory is trending lower, it may speak to concerns about near-term demand. For all companies — but especially Apple and other names that need to keep innovating with products — managing inventory appropriately is absolutely crucial to financial performance. If there isn't enough product to meet demand, the company misses out on sales. If there's too much inventory, management will be forced to cut prices to clear the shelves and make way for the next product iteration. Vendor non-trade receivables : This is a line item a bit more unique to Apple and a good reminder to Club members: When there is a line item on a financial statement that is unusual, the best thing to do is look for an explanation in the company's 10-K, the annual report all companies must file with the SEC. A quick search of Apple's 10-K informs us that this line item represents components that Apple purchases directly from suppliers and then sells to its manufacturing vendors for assembling into the final products for the company. Why you should care: This line item is a bit more opaque, but similar to inventories can provide some insight into future expectations of demand since it is a gauge of manufacturing activity. Given that this speaks to supplies provided to manufacturers to assemble products, like the inventory line, it may indicate future sales expectations or product ramps. Other current assets : This is a catch-all for anything considered to be an asset that falls outside the other major categories. Why you should care: On its own this isn't the most informative line item. However, it adds to the total current assets value — and as we will see later in our analysis of important financial ratios, the level of total current assets plays into crucial ratios that signal liquidity levels. Non-current assets Marketable securities : These are no different than the marketable securities listed under current assets, except that Apple plans to hold these as investments for more than one year. Once the status of these holdings change — Apple plans to hold for less than a year — the value moves to current assets. Why you should care: When Apple discusses the amount of cash, cash equivalents and marketable securities on the balance sheet during earnings calls, the team usually adds this non-current portion to the value of "cash" on the balance sheet. Property, plant and equipment (PP & E) : This represents the total value of hard assets such as land, buildings, machinery, equipment and internal-use software. Why you should care: In a vacuum, the the value of this line item offers little information. But by analyzing the value against past releases, we can get a sense of how much money Apple spends on hard assets. This is especially important from a cash flow perspective as many companies define free cash flow (a non-GAAP metric) as "operating cash flow less expenditures on property, plant and equipment." So if the company doesn't provide the cost of PP & E explicitly (Apple does not provide a spend amount on PP & E in a given quarter, nor does it provide a free cash flow line since that is not a GAAP metric), we can calculate the difference in value between one period and the next (after adjusting from any depreciation realized during the period) to determine capital expenditures in the period. GAAP stands for generally accepted accounting principles. Other Non-Current Assets : Another catch-all, but adds to total value of non-current assets. Current liabilities Accounts Payable : Whereas receivables represent money owed to Apple, payables represent money Apple owes to others. Why you should care: A company must be able to meet its financial obligations, or risk litigation or, even worse, bankruptcy. Payables represent those obligations that are most front and center. However, unlike commercial paper or term debt (below), which represent debt taken on in exchange for cash, payables represent a liability due to purchases made on credit. Other Current Liabilities : Similar to "other current assets," this is a catch-all for anything considered to be a liability that falls outside the other major categories. Why you should care: While it may not provide much detail on these liabilities, they are earmarked as current and, therefore, represent an obligation that must be met within the next year. Deferred Revenue : This represents money that has been collected for sales, but the product or service hasn't been delivered yet. For example, when a service is sold, the money is collected up front but the product (think music streaming) is delivered over the course of a month. That revenue is only realized as the service is delivered. Consider: Apple collects $15 for 30 days of access to Apple Music; it may index $15 to deferred revenue at the time of collection and then realize $0.50 per day as the service delivered, thereby realizing the full $15 over the 30-day period. Why you should care: This represents the value of sales that Apple can realize over time (the timing is generally available within the company's 10-Q or 10-K). As a result, deferred revenue provides some indication of sales — depending on cancelation policies — that have been locked in. They rely solely on Apple delivering the associated product or service. Importantly, seeing as this is an obligation to deliver goods/services, it is important to keep in mind that it does not require a cash outlay. So if deferred revenue is a high percentage of liabilities, it may determine which financial ratios — such as cash versus liabilities without the deferred revenue included — are best for valuing the company. Commercial Paper : This refers to debt taken on with a payback period of less than one year. Why you should care: This is a line worth taking note of, especially in relation to liquid assets on the balance sheet, as it speaks to an upcoming need for cash — and therefore, the company's liquidity. We'll discuss these relationships between assets and liabilities when we review financial ratios every investor should be familiar with. Term Debt : This refers to debt with a payback period of greater than a year, but when listed under current liabilities represents the portion of longer-term debt that is coming to maturity within the next year. In this way, it is similar to commercial paper; the difference is that when initially issued, this debt has a payback period greater than one year. Why you should care: This can pretty much be grouped in with commercial paper as far as an investor is concerned because, like commercial paper, it represents an upcoming need for cash and further highlights the company's liquidity. Non-current liabilities Term Debt : As noted above, this refers to debt with a payback period of greater than a year. The difference between term debt listed as non-current versus current is that the former still has greater than a year remaining before the maturity date is reached. Why you should care: This provides an indication of what must eventually be paid back to borrowers and, shedding light on the company's future cash requirements. Importantly, this line item does not indicate when the debt must actually be paid back. If the number is high versus the company's liquid assets — indicating that more cash is ultimately needed to pay it back, either via cash flow or additional borrowing and equity offers — further investigation is required. To do this, hop over to the company's 10-K annual report. On the first page of the report you will find all registered securities associated with the company, including the equity shares (and any associated classes) and all debt notes outstanding. A little more digging and you can find a better description of the outstanding debt securities, which will provide an indication of how much money — and when — the company is required to payback. For exact amounts, one must go even deeper and look for the financial statement schedule, where you'll find links to the 8-K "current report" associated with each issue and the exact amounts and terms. Other Non-Current Liabilities : Once again, this is a catch-all for anything considered to be a liability that falls out of the other major categories with an expected holding period longer than one year. Equity Equity is equal to total assets less total liabilities. Here we can find a count of the total shares outstanding, which are used in the calculation of earnings-per-share, which is simply net income divided by shares outstanding. Retained earnings: This represents net income minus money paid out to investors via dividends and stock buybacks. It is important to note that this is a running calculation. We start with the prior period's ending retained earnings value, add net income for the period, and then subtract dividend and share purchases done during the reported period. Why you should care: This isn't the most telling number in terms of how a company is doing in the here and now, but it can provide some insight into a company's history of generating profits and losses. There is also an argument to be made that in the earlier stages of a company, the more importance one should place on this number. For example, when a company decides to go public, we may get a few years of financial data, but it's this line item that gives us a grand total of how much money may have been lost to get to this point, indirectly indicating how efficient management is when it comes to allocating capital. Accumulated other comprehensive income/(loss) : This represents unrealized gains or losses unrelated to daily operations. For example, Apple may utilize currency hedges to protect against swings in foreign exchange rates. The value of those hedges will fluctuate and the unrealized gain or loss will be recorded here. Eventually, when the gain or loss is realized, they will be reclassified into earnings and be reflected on the income statement under other income/(expense). Why you should care: In general, there won't be enough information here for an investor to work off, however, it is worth a look because if the number is out of whack versus historical norms, it may be worth looking for an explanation in the 10-Q or 10-K, which are filings required by the government. Total shareholders' equity : As noted previously, this is simply the result of total assets less total liabilities. Right underneath this we will always see "total liabilities and shareholders' equity," which is simply a double check of the accounting. It should always be equal to total assets. If it isn't, we know something went wrong somewhere in the calculation of either assets or liabilities. (This should never be the case, as management should catch this blatant error before ever publishing their financials.) Bottom line While it may not be the most exciting thing in the world, knowing how to read a balance sheet is one of the most important skills an investor can have. Whereas the income and cash flow statements provide insight into performance over a three-month period, the balance sheet is like something of a "financial physical." It provides insight into both a company's ability to invest in growth and innovation in the future, as well as its ability to weather any potential storms on the horizon. Stay tuned for Part 3 in our financial statement series for the Investing Playbook where we will go over Apple's cash flow statement. (Jim Cramer's Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
blackred | Getty Images
One thing that separates fledgling investors from the pros is reading financial statements. For amateurs, comparing the so-called headline numbers — sales and earnings — to estimates is the full extent of research into a company, whereas in more experienced hands, they are just a starting point. If you want to become a better investor, make like a pro and digest the financials. It's the best way to truly understand a company's performance. In the lead up to the start of earnings season later this month, we've put together a five-part series to help Club members better understand all the tables and charts and how to analyze them. Here's Part 2: the balance sheet. | 2022-10-04T15:49:07Z | www.cnbc.com | How to analyze an earnings report — Part 2: The balance sheet | https://www.cnbc.com/2022/10/04/how-to-analyze-an-earnings-report-part-2-the-balance-sheet.html | https://www.cnbc.com/2022/10/04/how-to-analyze-an-earnings-report-part-2-the-balance-sheet.html |
August did see a sharp bump in the labor force, which increased by 786,000, pushing up the participation rate by 0.3 percentage point to 62.4%, tied for highest of the year. The rate remains one full percentage point below where it was in February 2020, just prior to the Covid pandemic. | 2022-10-04T15:49:13Z | www.cnbc.com | JOLTS August 2022: | https://www.cnbc.com/2022/10/04/jolts-august-2022.html | https://www.cnbc.com/2022/10/04/jolts-august-2022.html |
Greg Abel, Warren Buffett's designated successor, just increased his stake in Berkshire Hathaway significantly. Abel, vice chairman of Berkshire's non-insurance operations, established a $68 million position in Berkshire Class A shares on Thursday at between $405,000 and $408,000 per share, a regulatory filing showed. The price range represents a 25% discount from Berkshire's all-time high of $544,389 reached in March. "It likely may represent a shift as he prepares to assume more responsibility," said Cathy Seifert, a Berkshire analyst at CFRA Research. "Not a whole lot is ever telegraphed out of Berkshire, but I think this represents a pivot point." Abel has been an heir apparent for Buffett for a few years after the "Oracle of Omaha" and his longtime business partner Charlie Munger hinted at his eventual role in the conglomerate at recent annual shareholder meetings. However, up until this point, Abel, who runs Berkshire's massive energy empire, hadn't been a major shareholder himself. A March proxy filing showed he owned 5 A shares and 2,363 B shares, which were worth less than $3 million. Meanwhile, Abel's compensation over the five years including 2022 would likely to be close to $95 million, according to company filings. "This is an important first step for Mr. Abel to demonstrate his long-term commitment to BRK, as well as his alignment with shareholders," James Shanahan, Berkshire analyst at Edward Jones, said in a note. Abel recently sold his 1% stake in the company's Berkshire Hathaway Energy unit for $870 million. The action made some believe he has the opportunity and capital to further increase his stake in Berkshire. Buffett, 92, has been increasing Berkshire's exposure to the energy sector, ramping up his stakes in Chevron and Occidental Petroleum . Some Buffett watchers view the moves as a way to pave the way for his successor Abel, who has been leading the conglomerate's energy unit Berkshire Hathaway Energy. Berkshire acquired MidAmerican Energy in 1999, and Abel became CEO of MidAmerican Energy in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014. | 2022-10-04T15:49:25Z | www.cnbc.com | Warren Buffett's successor Greg Abel ramps up Berkshire Hathaway stake significantly | https://www.cnbc.com/2022/10/04/warren-buffetts-successor-greg-abel-ramps-up-berkshire-hathaway-stake-significantly.html | https://www.cnbc.com/2022/10/04/warren-buffetts-successor-greg-abel-ramps-up-berkshire-hathaway-stake-significantly.html |
Please stop! The clamor from international agencies demanding that central banks stop raising interest rates is suddenly getting louder. The United Nations Conference on Trade and Development (UNCTAD) is out with its annual report on the global economic outlook . It's filled with dire warnings that central banks are going to throw the world into a massive global recession if they keep raising rates. "The attention of policymakers has become much too focused on dampening inflationary pressures through restrictive monetary policies, with the hope that central banks can pilot the economy to a soft landing, avoiding a full-blown recession," the report said. "Not only is there a real danger that the policy remedy could prove worse than the economic disease, in terms of declining wages, employment and government revenues, but the road taken would reverse the pandemic pledges to build a more sustainable, resilient and inclusive world." If you're not familiar with UNCTAD, it is an intergovernmental organization set up in 1964 to promote the interests of the developing world. And UNCTAD does not like what it sees. "If monetary tightening in the advanced economies continues over the coming year, however, a global recession is more likely, and, even if it is looser than the 1980s, it will almost unavoidably harm potential growth rate in the developing economies," the report said. "A lasting war in Ukraine, persistently high inflation, a Volcker-like shock to real interest rates and heightened financial turbulence could push the world economy into a deeper recession, followed by a long stagnation," UNCTAD said. The UN agency is only the latest global organization to raise the alarm on rate hikes. Last month, World Bank President David Malpass also warned that the global economy could be headed for a recession. Whether this chorus of complaints actually influences central bankers is unclear, but bulls point to the Reserve Bank of Australia (RBA), which raised rates only 25 basis points, a quarter of a percentage point Tuesday, rather than the 50 basis points that had been expected, though it did say further hikes would be needed. "The cash rate has been increased substantially in a short period of time," RBA Governor Philip Lowe said. "Reflecting this, the board decided to increase the cash rate by 25 basis points this month as it assesses the outlook for inflation and economic growth in Australia." That is a pause statement, complete with the magic words: "Assessing the outlook for inflation and economic growth." Is this a sign central banks are listening? Maybe, but for the moment most observers seem to be on the side of the central bankers. "This is the last chance they [central banks] have to maintain credibility, " Komal Sri-Kumar, President at Sri-Kumar Global Strategies, said on CNBC's " Squawk Box " this morning. "They would rather make a mistake in overtightening, rather than easing."
Brian Sullivanan hour ago | 2022-10-04T16:49:32Z | www.cnbc.com | Chorus of international agencies are calling on central banks to please stop raising rates | https://www.cnbc.com/2022/10/04/chorus-of-international-agencies-are-calling-on-central-banks-to-please-stop-raising-rates-.html | https://www.cnbc.com/2022/10/04/chorus-of-international-agencies-are-calling-on-central-banks-to-please-stop-raising-rates-.html |
NBCUniversal CEO Jeff Shell says movie business benefitting from new release model
NBCUniversal CEO Jeff Shell said Universal's film business is performing well with a pandemic-inspired model of film releases.
Shell said in an interview with CNBC's David Faber that Universal is "attracting the best filmmakers."
Universal's film slate has been a boost to Peacock, which now has 15 million paying subscribers, Shell said.
CEO of NBC Jeff Shell arrives for the Allen & Company Sun Valley Conference on July 06, 2021 in Sun Valley, Idaho. After a year hiatus due to the COVID-19 pandemic the world's most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort for the exclusive week-long conference.
NBCUniversal CEO Jeff Shell said Tuesday the company's movie business is performing well on the hybrid model of releasing some films simultaneously in theaters and on streaming services, while waiting to make others available for viewers at home.
In an interview with CNBC's David Faber on Tuesday, Shell said the pandemic-inspired model of film releases has been "attracting some of the best filmmakers."
Previously, studios typically made movies available exclusively in theaters before releasing them for viewers at home, including on streaming services. That changed when the Covid-19 pandemic shut down theaters, leading some companies to release films directly on streaming services for a period.
Shell said the breakdown of the traditional film release model, known as the movie windowing scheme, is having a positive impact on both the movie and streaming businesses.
"That construct of the windowing combined with the fact that streamers really want movies, movies are driving platforms, has in my opinion made the movie business economically better," Shell said.
The changing film release model during the pandemic initially caused some strife for media companies. Some evaluated releasing movies directly on streaming services on a case-by-case basis, which Shell said NBCUniversal continues to do. Others such as Warner Bros. released many of its biggest movies on its HBO Max streaming service and in theaters at the same time.
"We've reacted to that by putting more money into the business," Shell said Tuesday.
In many cases, the window to bring a film to a streaming service or premium video on-demand can now be as little as 45 days, cutting the previous window in half.
Comcast's NBCUniversal has continued to adapt its approach on a movie-by-movie basis. Some films, such as "Nope," are released in theaters before they become available exclusively on the company's Peacock streaming service for a period. Others, such as the latest installment of the "Halloween" movie franchise, are released in theaters and on the streaming service at the same time.
"We're making twice as many movies as our nearest competitors, and we're buying all that content and moving it into Peacock to establish the streaming service," Shell said.
Peacock now has 15 million paying subscribers and 30 million active accounts, Shell said on Tuesday. Much of its subscriber growth has been driven by content such as the company's sports and movie offerings, he said. | 2022-10-04T16:49:38Z | www.cnbc.com | NBCUniversal CEO Jeff Shell says movie business benefitting from new release model | https://www.cnbc.com/2022/10/04/nbcuniversal-ceo-jeff-shell-says-movie-business-is-better-with-new-release-model.html | https://www.cnbc.com/2022/10/04/nbcuniversal-ceo-jeff-shell-says-movie-business-is-better-with-new-release-model.html |
Some bank stocks may look cheap, but for New York University's Aswath Damodaran, they aren't worth the risk. Instead, he would get exposure to the sector without taking the chance that a catastrophic risk could take out a specific stock, he told CNBC's " TechCheck " on Tuesday. "Rather than put my money in the cheapest banks, I'd buy a bank ETF," said Damodaran, professor of finance at the Stern School of Business at NYU, who is sometimes referred to as the "Dean of Valuation." "They are not all going to go under," he said of the banks. However, he said there is a real risk some financial institutions could come under stress in the near term. For instance, Credit Suisse recently sold off after concerns were raised about the bank's financial health. There was also panic among pension funds in the U.K. after some bonds held within them lost half their value in a matter of days. That led to the Bank of England's emergency bond-buying in late September. SPDR S & P Bank ETF , which is composed of big banks, is down about 13% this year. The SPDR S & P Regional Banking ETF has lost more than 11% year to date. Damodaran's call on the banks fits into his larger thesis around the market worrying about "catastrophic risk." His biggest concern is that some stocks may not be able to take the moves in the market when it reacts to variables such as interest rates and exchange rates. "I want to steer away from companies which are close to the edge … that are too highly levered, that have big fixed costs," he said. Accounting for the ability to weather the market turbulence is like having a house inspection on home on the Florida coast and a hurricane is coming. "Your house inspection has to make sure your house can withstand a hurricane before you go in and ask, 'How old is the air conditioning?' I think that worry has to be brought into your valuation when you look at a company," Damodaran said. "That catastrophic risk has to be factored in." | 2022-10-04T17:41:45Z | www.cnbc.com | How NYU's 'Dean of Valuation' would trade bank stocks as fear about the industry grows | https://www.cnbc.com/2022/10/04/how-nyus-dean-of-valuation-would-trade-bank-stocks-as-fear-about-the-industry-grows.html | https://www.cnbc.com/2022/10/04/how-nyus-dean-of-valuation-would-trade-bank-stocks-as-fear-about-the-industry-grows.html |
Woodley Farra Manion ranked #1 Financial Advisor
After stocks slumped in September, markets have had a strong start to the month, and are now on track to notch the biggest two-day rally since March 2020.
The key to navigating the recent ups and downs comes to down "buying high quality stocks that pay dividends that tend to be a lot more stable during environments like this," said George Farra, the co-founder and principal of Woodley Farra Manion, which ranked No. 1 on CNBC's list of the top 100 financial advisors in the U.S. for 2022. | 2022-10-04T19:30:38Z | www.cnbc.com | CNBC's No. 1 financial advisor shares his top 3 stock picks | https://www.cnbc.com/2022/10/04/cnbcs-no-1-financial-advisor-shares-his-top-3-stock-picks.html | https://www.cnbc.com/2022/10/04/cnbcs-no-1-financial-advisor-shares-his-top-3-stock-picks.html |
Meanwhile, 50% of money that was traded came out target date funds — which are designed to invest more conservatively as you get older. And more than a third of outflows came out of large U.S. equity and mid U.S. equity funds.
The traditional 60%-stock-and-40%-bond portfolio has lost about 20% of its value so far this year, but most investment advisors recommend sticking with a balanced strategy. With bond yields improving, that mix looks better than it has in years, some say.
"If you wake up in the morning and decide to cash out and capture losses, it's either too late or a bad decision," said certified financial planner Jon Ulin with Ulin & Co. Wealth Management in Boca Raton, Florida. "Cash does not provide much in the way of a dividend and will not help to make up for 8% losses to inflation overtime in as much as a diversified portfolio."
The 60/40 split can be a good starting point for a moderate-risk investors, who don't need to pull the money for 10 years or more. Some advisors say what we saw this year with stocks and bonds both declining at the same time could be an anomaly.
Cash is an option for the risk-averse
For investors who really can't stomach the risk, cash may not be a bad placeholder for now. But the risk-adverse should know it is difficult to generate the returns they will need to retire with a 3% return.
Ray suggests investors break down their portfolios to see the returns in different asset classes. He recommends adding dividend-paying stocks as a value play and suggests younger investors with a longer time horizon add alternative investments, including investing in early-stage start-up companies and real estate. | 2022-10-04T19:31:21Z | www.cnbc.com | S&P 500 down 20% for year, retirement investors reconsider stock, bond strategy | https://www.cnbc.com/2022/10/04/sp-500-down-20percent-for-year-retirement-investors-reconsider-stock-bond-strategy-.html | https://www.cnbc.com/2022/10/04/sp-500-down-20percent-for-year-retirement-investors-reconsider-stock-bond-strategy-.html |
This firm's market-beating ETFs show how alternative strategies are working in 2022
The broad sell-off in September confirmed that Wall Street is still in a bear market. However, it also served as a chance for investment firms to prove their alternative strategies are worth a look from investors seeking less volatility. One firm with several winners this year is First Trust, which has multiple funds that have risen in 2022 despite not being pure inverse index funds or energy-focused products, which make up the bulk of top performers' lists. Ryan Issakainen, an exchange-traded fund strategist at the firm, described the different offerings as a "toolset" for advisors and investors looking to diversify their portfolios, and that markets like this serve as an example of the utility of alternative strategies. "Even as the equity markets start to outperform again, and they will, it's bad environments like this that remind people why they want to add different risk premiums and assets to their portfolio," Issakainen said. The funds offer a differentiated return for investors, and they can show the biggest outperformance during broad sell-offs that hit every sector — like September's decline. Merger Arbitrage A merger arbitration strategy has been a winner for First Trust and a few other investment firms this year. It's a strategy used by hedge funds — and on occasion even by Warren Buffett — to collect the small upside that often exists between a stock that is being acquired and its announced deal price. First Trust's Merger Arbitrage ETF (MARB) is actively managed, which means that its portfolio will be different from others in the space. "They want to invest in the deals that have the highest quality and the highest likelihood that they're actually going to close," Issakainen said of the managers running the fund. The fund does not have a position in Twitter , for example, which has been in a legal fight regarding its deal with Elon Musk. Merger arbitrage certainly carries risk, but it is mostly different from broader market risks. At the basic level, the strategy works as a bet that a deal will close at the agreed-upon price, creating a small and limited upside for the stock of the company that is being acquired. The risk is that if a deal falls through the stock in question can fall significantly — meaning that these trades often have more potential downside than upside. The First Trust fund also has some short positions on deals that the managers think are likely to not close or close at a lower price. "When the equity market is up 30%, people tend to be less interested in a merger-arb strategy because they tend to be more focused on what we're doing really well today," Issakainen said. The fund has attracted more than $70 million of inflows this year, according to FactSet. Another benefit of an actively managed fund during a bear market is that it gives the fund managers the option to do nothing. While the fund is designed to be close to fully invested during normal market conditions, Issakainen said, it currently has a large cash position. However, if the broader market rebounds, the cash pile could become a drag on the portfolio. Another downside of the fund during periods of rising markets is the cost. The fund has a management fee of 1.25%, and First Trust says that interest and margins expenses can push the total cost for investors above 2%. Managed futures Another area where First Trust has had success this year is managed futures products. The firm has two that play in this space — the Alternative Absolute Return Strategy ETF (FAAR) , which uses commodity futures, and Managed Futures Strategy Fund (FMF) , a combo of commodity, equity, currency and interest rate futures. The funds are up roughly 8% and 12% year to date, respectively, and the FMF has pulled in more than $100 million of inflows, according to FactSet. The managed futures strategies give investors a more strategic position than trying to buy broad long funds and inverse funds themselves to take position. They also are tweaked by professional portfolio managers as market conditions change. The funds are a bit more complicated than just buying or shorting the current futures contracts. One part of the strategy is "to identify along the curve which contract in the long portfolio has the highest probability based on a number of different factors of achieving the maximum return," Issakainen said, describing FAAR. "So once you find out which commodity you want to buy, you need to figure out which contract you want to have a long position on. And they do this on the long and short sides of the portfolio," he said. While these funds provide investors with more nuanced exposures and professional management, they do come at a cost. The two funds have expense ratios of more than 0.90%, which can be pricey relative to broad index funds that are passively managed. | 2022-10-04T19:31:39Z | www.cnbc.com | This firm's market-beating ETFs show how alternative strategies work | https://www.cnbc.com/2022/10/04/this-firms-market-beating-etfs-show-how-alternative-strategies-are-working-in-2022.html | https://www.cnbc.com/2022/10/04/this-firms-market-beating-etfs-show-how-alternative-strategies-are-working-in-2022.html |
Paul Souders | Stone | Getty Images
This year is currently looking like one of the roughest ever for the stock market.
Through the first nine months of 2022, the S&P 500 index lost 23.9%. Only five full calendar years have produced worse returns: three years from the Great Depression, 2008 and 1974.
But if market history paints a dire picture for what's gone on so far this year, it also offers a silver lining for long-term investors. Bear markets like the current one tend to be short, and investors who keep their cool tend to make out alright.
That's what Charles Rotblut, vice president at the American Association of Individual Investors, pointed out in a recent tweet. "Not only is the current bear market well within the typical range of past bears, those who stick w/ their allocations get rewarded for doing so," he wrote.
The data he's referencing is from CFRA chief investment strategist Sam Stovall, who analyzed 13 bear markets — defined as a decline of 20% or more from market peaks — dating back to 1945.
The current bear falls under what Stovall calls "garden variety" bear markets — those that feature a stock market slide between 20% and 40%. The others he calls "mega-meltdown" bears, which saw drawdowns of more than 40%.
The latter sort are especially tough for investors, lasting for just short of two years on average, with an average decline of 51%.
The garden-variety bear is somewhat less intimidating. The average drawdown during these periods is 27%, and they tend to last for 13 months on average. And importantly for investors, it took only 27 months for stocks to return to their peaks after these down periods, on average. That compares with an average recovery time of nearly five years for the harsher bears.
Two years may seem like a long time to stare down red numbers in your portfolio, and five may seem like an eternity. But if you're invested for decades, a period of a few years is a blip.
More importantly, you'd be wise to add to your portfolio during down markets, rather than selling, says Rotblut.
"Have you ever looked at the chart and thought, 'I wish I bought that stock when it was down at this price?' Then why aren't you buying now?" he says. "No one knows where the bottom is, but we do know stocks are on sale right now."
The bottom of the market could be well into the future, and selling now before things get worse could, in the long run, boost your returns. But it would most likely be a mistake, experts say, for two reasons.
One: Even if you're right about the market going down further, selling now would require you to peg the right time to get back in in order to turn a profit. "If you're going to cash, what is your rule for getting back into the market? What are you going to use as your marker? And what happens if you don't act then?" says Rotblut.
Timing the market is extraordinarily difficult, and getting it wrong could cripple your returns. A $10,000 investment in a fund tracking the S&P 500 at the end of 2006 would have grown to nearly $46,000 by the end of 2021, according to Putnam Investments.
But subtract the 10 best days from that 15-year period, and the total declines to about $21,000. "Time, not timing, is the best way to capitalize on stock market gains," Putnam researchers say.
The other reason: Although past returns are no guarantee of future results, markets have historically rewarded investors for buying into the market after it's had the kind of slide investors have seen so far this year.
As measured by the Wilshire 5000 — a broad U.S. stock market index — the first nine months of 2022 rank among the worst 20 nine-month periods of the last half century, according to data from Compound Capital Advisors.
In all but one of those instances, the index logged a positive return in the one-year period following the nine-month decline, with an average return of 12%. Over the next three years, the index was positive each time, with an average gain of 41%.
Simply put in a tweet from Compound CEO Charlie Bilello: "Has selling AFTER large 9-month declines been a good strategy for long-term investors in the past? No." | 2022-10-04T19:32:04Z | www.cnbc.com | Why it's smart to keep investing during a 'garden variety' bear market | https://www.cnbc.com/2022/10/04/why-its-smart-to-keep-investing-during-a-garden-variety-bear-market.html | https://www.cnbc.com/2022/10/04/why-its-smart-to-keep-investing-during-a-garden-variety-bear-market.html |
Jerome Powell, chairman of the US Federal Reserve, speaks during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022. Federal Reserve officials this week gave their clearest signal yet that they're willing to tolerate a recession as the necessary trade-off for regaining control of inflation.
"They have to stick the landing," said Joseph Brusuelas, U.S. chief economist at RSM.. "It's the lower end of the economic ladder that is going to bear the burden if the Fed doesn't stick the landing correctly. They lose jobs and their spending goes down and they have to draw on savings and 401(k)s to make ends meet."
The Fed will be surprised by deflationary pressures over next 3-6 months, says Cathie Wood
There's a disconnect between the hope of the market and the reality of the Fed, says Roger Ferguson
The Fed will not completely abandon the idea of rate hikes, says former Dallas Fed president | 2022-10-04T19:32:10Z | www.cnbc.com | Why the Federal Reserve won't be so quick to ease up on its fight against inflation | https://www.cnbc.com/2022/10/04/why-the-federal-reserve-wont-be-so-quick-to-ease-up-on-its-fight-against-inflation.html | https://www.cnbc.com/2022/10/04/why-the-federal-reserve-wont-be-so-quick-to-ease-up-on-its-fight-against-inflation.html |
A roadside screen in Sapporo in Hokkaido, on Oct. 4, 2022, shows a news report on North Korea's launch of a ballistic missile over the Japanese archipelago for the first time in five years.
WASHINGTON -- The Biden administration responded on multiple levels Tuesday to North Korea's latest long-range ballistic missile launch, reaching out to allies in the region on diplomatic and military fronts, and at the leader level by U.S. President Joe Biden.
This latest North Korean missile test — the 23rd one so far this year — was different because it marked the first time in five years that a North Korean missile had been fired directly over Japan. Residents in northern prefectures awoke to sirens and directions to take cover.
On Tuesday morning, Biden spoke to Japanese Prime Minister Fumio Kishida to reinforce America's "ironclad commitment to Japan's defense," and recognize the launch "as a danger to the Japanese people," the White House said in a readout of the call.
The presidential call followed Monday night conversations held by National Security Adviser Jake Sullivan and Secretary of State Antony Blinken with their Japanese and South Korean counterparts, White House press secretary Karine Jean-Pierre told reporters at a briefing Tuesday.
Defense Secretary Lloyd Austin also spoke by phone with his counterparts in Tokyo and Seoul, according to Pentagon readouts of the call.
A unifying thread running through all the official readouts of phone calls was the word "ironclad," which is how each of these U.S. officials described America's commitment to the defense of Japan and South Korea.
This commitment and its military alliances were audible and visible Tuesday in the skies above northeastern Asia.
In airspace over the Yellow Sea off the Korean peninsula, the U.S. and South Korea conducted joint aerial flight and precision targeting exercises on Tuesday in response to the missile launch. The training exercise included firing at a target on an uninhabited island.
A similar joint exercise was held for U.S. Marine Corps fighters and Japan air self-defense fighters, Jean-Pierre said at the White House. | 2022-10-04T21:15:03Z | www.cnbc.com | North Korean missile launch raises alarm in Washington | https://www.cnbc.com/2022/10/04/north-korean-missile-launch-raises-alarm-in-washington-.html | https://www.cnbc.com/2022/10/04/north-korean-missile-launch-raises-alarm-in-washington-.html |
Former President Donald Trump asked the Supreme Court to intervene in a dispute over the Department of Justice's review of documents seized by the FBI during a raid on his Florida residence.
Trump, in a court filing, asked the Supreme Court to vacate last week's ruling by the 11th Circuit Court of Appeals, which allowed the DOJ to resume using classified documents seized in the raid as part of its ongoing criminal probe of Trump.
Former U.S. President Donald Trump makes a fist while reacting to applause after speaking at the North Carolina GOP convention dinner in Greenville, North Carolina, June 5, 2021.
Jonathan Drake | Reuters
Trump in a court filing urged the Supreme Court to vacate a ruling last week by the 11th Circuit Court of Appeals which allowed the DOJ to resume using classified documents seized in the raid as part of its ongoing criminal probe of Trump.
Lawyers for the former president argue that the 11th Circuit lacks "jurisdiction to review, much less stay" an order from a lower federal court judge, who had appointed a third-party watchdog to examine all of the seized documents before the DOJ was allowed to use them in its investigation.
Weeks after the raid, Trump asked a federal judge in Florida, Aileen Cannon, to appoint a so-called special master to review the documents seized in the raid to determine if any of them should be withheld from use in the criminal probe by the DOJ on the grounds they are protected by the attorney-client privilege or executive privilege.
Federal prosecutors then appealed to the 11th Circuit, asking that court to lift Cannon's order as it applied to the classified material seized in the raid. A panel of judges in the appeals court granted that bid.
In their filing Tuesday asking the Supreme Court to reverse that decision, Trump's lawyers said Cannon's appointment of a special master "is simply not appealable on an interlocutory basis." An interlocutory appeal seeks to reverse a lower court's ruling when a case is still pending, as opposed to after it ended. | 2022-10-04T21:15:09Z | www.cnbc.com | Trump asks Supreme Court to intervene in Mar-a-Lago documents dispute | https://www.cnbc.com/2022/10/04/trump-asks-supreme-court-to-intervene-in-mar-a-lago-documents-dispute.html | https://www.cnbc.com/2022/10/04/trump-asks-supreme-court-to-intervene-in-mar-a-lago-documents-dispute.html |
One of the company's spacecraft in orbit.
AEI has made a variety of investments in the space sector over the last two years, taking positions in companies like Sierra Space, Firefly Aerospace, Redwire, Terran Orbital, and Virgin Orbit. BlackRock's private equity arm joined AEI in the York investment.
The company maintains multiple facilities with about 165,000 total square feet of manufacturing room, with capacity to produce upwards of 750 satellites per year.
In a press release, AEI said that Wallinger will continue as CEO, while chairman Charles Beames will continue serving on the York board of directors. | 2022-10-04T21:15:28Z | www.cnbc.com | York Space hits $1 billion valuation after AEI investment deal | https://www.cnbc.com/2022/10/04/york-space-hits-1-billion-valuation-after-aei-investment-deal.html | https://www.cnbc.com/2022/10/04/york-space-hits-1-billion-valuation-after-aei-investment-deal.html |
Stock futures fall slightly following a sharp two-day rally on Wall Street
Dow Jones Industrial Average futures declined by 45 points, or 0.19%. S&P 500 and Nasdaq 100 futures dipped 0.15% and 0.13%, respectively.
During the regular session Tuesday, the Dow jumped about 825 points, or 2.8%. The S&P 500 gained nearly 3.1%, while the Nasdaq Composite advanced 3.3%.
Meanwhile, a weakening in the most recent job openings data had some investors considering whether the Federal Reserve will slow the pace of interest rate hikes.
Traders are expecting a raft of economic reports on Wednesday. Data on weekly mortgage applications is expected. September's ADP private payrolls report is due out at 8:15 a.m. ET. The latest international trade reading is due at 8:30 a.m. ET, while the ISM services index is set to be released at 10 a.m. ET. | 2022-10-04T22:55:13Z | www.cnbc.com | Stock futures fall slightly following a sharp two-day rally on Wall Street | https://www.cnbc.com/2022/10/04/stock-market-futures-open-to-close-news.html | https://www.cnbc.com/2022/10/04/stock-market-futures-open-to-close-news.html |
Shares in the Asia-Pacific were set to rise on Wednesday after U.S. stocks rallied for a second day.
The Nikkei futures contract in Chicago was at 27,150 while its counterpart in Osaka was at 27,190. That compared with the Nikkei 225's last close at 26,992.21.
Australia's S&P/ASX 200 was up 1.73%.
Mainland China markets remain closed for the Golden Week holiday, and India's market is also closed for a holiday. | 2022-10-05T00:09:23Z | www.cnbc.com | Asia markets: Wall Street, South Korea CPI, stocks, oil, OPEC | https://www.cnbc.com/2022/10/05/asia-markets-wall-street-south-korea-cpi-stocks-oil-opec.html | https://www.cnbc.com/2022/10/05/asia-markets-wall-street-south-korea-cpi-stocks-oil-opec.html |
Displaced people in floodwater after heavy monsoon rain at Usta Mohammad city, in the Jaffarabad district of Balochistan province, on Sept. 18, 2022. Thirty-three million people have been affected by the floods in Pakistan, which started with the arrival of the monsoon in late June.
Floods in Pakistan are a 'predictable disaster' that will happen again: UNDP
Pakistan struggles in the wake of historic floods
CNBC News and Programming
U.S. government agency discusses the pace and scale of the climate crisis | 2022-10-05T02:10:39Z | www.cnbc.com | Climate reparations ethical but not best fix: Climatologist | https://www.cnbc.com/2022/10/05/climate-reparations-ethical-but-not-best-fix-climatologist.html | https://www.cnbc.com/2022/10/05/climate-reparations-ethical-but-not-best-fix-climatologist.html |
The stock market got off to a better start in October, after ending the prior month in a sea of red. The three major U.S. indexes all posted their second straight day of gains on Tuesday, with the S & P 500 posting its best two-day gain in roughly two years, while the Dow Jones Industrial Average and the Nasdaq Composite jumped more than 3%. Market veteran Phil Blancato believes the market is now heading into a "turnaround week," and investors should take the chance to "jump into the market." "I would argue the second week of October, which is traditionally the best week of the year, is going to be a rallying point going into the U.S. mid-term elections," Blancato told CNBC's 'Squawk Box Asia" on Tuesday. The president and CEO of Ladenburg Thalmann Asset Management, which has more than $4 billion in assets under management, said investors will get a "pretty good idea" where inflation stands, as CPI data is scheduled to be released on Oct. 13. He also said it was "inevitable" that the Federal Reserve will not want to be "aggressive" in an election cycle. "When you see stocks trading at multiples below historical averages and you know that third quarter earnings and growth are probably going to be strong enough to support current valuations. I think today investors are finally realizing that stocks are less expensive and it's a chance to enter the market," Blancato said. "Hold on to your hat. We could end this year a heck of a lot closer to -5[%] then -25[%]," he added. The S & P 500 is currently trading down around 23% year to date, while the Dow Jones is down over 19%. Own the 'great names' Blancato believes investors "have no choice" but to gravitate to the "great names that you want to own." One such stock is Microsoft . He believes the company will benefit from more than $900 billion of aggregate spending in the U.S. this year. "A lot of [this money] is going to go to a company like Microsoft because they do commercial and retail businesses. These two come together at a time like this, it's really going to drive revenue higher and you're finally buying it at a price point that is fairly reasonable," Blancato said. He also likes Costco for its "tremendous e-commerce penetration." The online platform now has 65 million members and is growing 11% year-on-year, according to Blancato. He expects the company to benefit heading into a period of prolific growth for goods, with Costco well-positioned in both day-to-day products and more upscale offerings. While Costco has a current dividend yield of just 0.8%, according to FactSet data, the company has a track record of returning cash to shareholders. It paid out special dividends of $7, $5, $7, and $10 per share in 2012, 2015, 2017, and 2020, respectively. Read more Stocks were crushed in September. Here’s what's coming next, according to Wall Street pros Should investors flee stocks? Strategists give their take — and reveal how to trade the volatility Want a 'short term defensive move' with up to 5% return? Buy this fund, says strategist "Now you have got a strong barbell between the two. You get a great dividend, you are going to be able to play the tech rally that happens to a degree with Microsoft, but also be with consumers spending on staples and on discretion. That's how you play this market. Be paid to wait around," he said. While Blancato likes Apple , he is not adding to his position just yet. He said there remains uncertainty over the success of the new iPhone 14, while the company's products remain underpenetrated in China. Nevertheless, he acknowledged Apple's ability to "constantly reinvent" itself, while the company is also heading into a seasonally strong period where it could put up "some really impressive numbers." "It's a company that could easily trade back in the $170s if we get that rally. So, if you don't own it, I would say as an entry point here — the $136, $138 trade, if you can get that low enough," he said. | 2022-10-05T02:10:55Z | www.cnbc.com | Market veteran names 3 stocks to buy in market turnaround | https://www.cnbc.com/2022/10/05/market-veteran-names-3-stocks-to-buy-in-market-turnaround.html | https://www.cnbc.com/2022/10/05/market-veteran-names-3-stocks-to-buy-in-market-turnaround.html |
There's unlikely to be a sustainable market bottom unless three conditions are met, according to Morgan Stanley. The investment bank reiterated that it expects the low for this bear market to come between 3,000 and 3,400 points for the S & P 500 , its analysts, led by U.S. equity strategist Mike Wilson, wrote in an Oct. 3 note. They added that this forecast "now skews toward the lower end." The index closed at 3,790.93 on Tuesday. "We … remind readers that the last few innings of every bear market are very challenging to trade as volatility becomes extreme," they wrote. "None of the conditions we have been looking for to call an end to this bear market are in place." Wall Street is coming off a tough month , with the Dow and S & P 500 notching their biggest monthly losses since March 2020. Monday, however, brought something of a relief rally. Morgan Stanley stressed that until two or three of the following conditions are met, the bank is "unlikely to call a sustainable low" to markets: S & P 500 Equity Risk Premium at or above 450 basis points. Currently, the ERP is at 276 bps, Morgan Stanley noted. This measures the spread of returns of U.S. stocks over long-term government bonds, and is a indicator of how well the stock market will outperform risk-free debt assets. Bottom-up consensus NTM EPS (next 12 months earnings per share) for the S & P 500 at or below $225. The bank said currently it is currently at $237. Headline ISM Manufacturing PMI at or below 45. This is a gauge of the health of the U.S. manufacturing sector. September's data, which was released earlier this week , fell to 50.9 in September from 52.8 in August — barely in expansion territory. Morgan Stanley noted that it takes a long time for the next 12 months earnings per share to fall for the S & P 500, "because it's a very high quality, diversified index and companies are loathe to throw in the towel on the future quarters until they have to." "It appears that more companies are reaching that point where they can't fight it anymore," it added. Stocks are likely headed lower without any change in strategy by the U.S. Federal Reserve, but the situation could soon turn anyway, according to Morgan Stanley. "In the absence of a Fed pivot, we wouldn't be surprised if all three of these conditions are met by mid November," the bank said, adding that shift at the Fed was likely to come in stages, as it is unlikely to reverse "too soon" given the inflation threat. The crucial dollar The U.S. dollar , which has been surging all year — much to the consternation of many companies — is another important factor that Morgan Stanley is looking at. "Like it or not, the world is still dependent on US dollars, which provide the oxygen for global economies and markets," it said. "The US dollar is very important for the direction of risk markets and this is why we track the growth of M2 so closely," the bank added, referring to a broad measure of the money supply. The bank cited a number of reasons as to why U.S. dollar liquidity is so tight right now. These include rising rates and shrinking balance sheets, higher oil prices as well as inflation in many goods bought and sold in dollars, the bank wrote. "In our view, such tightness is unsustainable because it will lead to intolerable economic and financial stress," it added. | 2022-10-05T02:11:01Z | www.cnbc.com | Morgan Stanley on conditions for market bottom, S&P 500 and dollar | https://www.cnbc.com/2022/10/05/morgan-stanley-on-conditions-for-market-bottom-sp-500-and-dollar.html | https://www.cnbc.com/2022/10/05/morgan-stanley-on-conditions-for-market-bottom-sp-500-and-dollar.html |
Interest rate rises, soaring energy prices and political turmoil in some parts of the world have battered stocks going into the final quarter of this year. To help investors navigate the volatility, Bank of America has revealed its top "short-term stock recommendations" for the next quarter. The investment bank's analysts said in an Oct. 3 note that they expect the following five stocks to "significantly outperform" their peers this quarter: STMicroelectronics Bank of America's analysts say shares in the semiconductor maker are expected to soar 108.4% to 71 euros ($71) by July next year from their current level. STMicro , the largest European manufacturer of semiconductors, has benefited enormously from shortages in microchips over the first half of the year and reported its highest gross margin in the past two decades, the bank's research said. BofA's analysts believe those issues will likely continue in the near future. "We expect pricing and mix tailwinds to continue into H2 given ongoing supply constraints. We expect gross margins to continue increasing in mid-term thanks to higher pricing power and an improved product mix," they said. The company's shares, which also trade on the NYSE, have declined by more than 35% this year. Fortum The analysts expect shares in Finnish energy company Fortum to rise by more than 40% to 20 euros per share by September next year. A 4 billion euro loan due from Uniper, the German energy giant that was recently nationalized, and another 4 billion euro in guarantees have "weighed hugely" on the stock price this year, according to the Bank of America. However, the nationalization of Uniper means the Helsinki-listed company has "de-risked" its balance sheet by 8 billion euros, the bank said, describing the company as a "pure play clean power generator." Equinor Equinor is another energy company recommended by Bank of America Global Research. The analysts expect shares in the Norwegian company to rise by 24% to 453 Norwegian Krone ($43). The investment bank believes the natural gas producer is the primary beneficiary of soaring energy prices in Europe as it offers the most significant alternative to Russian gas for the continent. As gas flows from Russia have halted, Europe will increase its dependency on the liquified natural gas market, which is already very tight, according to Bank of America's analysis. "Hence, we expect gas price to remain higher for longer and Equinor to be the main beneficiary," the analysts said. Croda Croda , a speciality chemicals company, is now debt-free after a £700 million ($797 million) asset sale earlier this year. As a result, Bank of America predicts that the clear balance sheet will benefit its stock price in an era of rising interest rates. The London-listed company's share price is expected to rise by 22.9% to £83 by August next year. Without debt, the company is expected to recycle more of its profits into new investments in the healthcare sector and improve revenue in the future. | 2022-10-05T02:11:07Z | www.cnbc.com | Q4 stock picks by Bank of America, including one company with 100% upside | https://www.cnbc.com/2022/10/05/q4-stock-picks-by-bank-of-america-including-one-company-with-100percent-upside.html | https://www.cnbc.com/2022/10/05/q4-stock-picks-by-bank-of-america-including-one-company-with-100percent-upside.html |
What the market is most concerned about, and has yet to learn, is how much and for how long this production cut will be. Expectations vary, but overall, OPEC+, led by Saudi Arabia and Russia, is expected to push for production cuts of 1 million to 2 million barrels per day, or more. If that comes to pass, it would be by far the largest since early in the coronavirus pandemic.
Analysts at Energy Aspects noted that OPEC+ hopes to boost oil prices by cutting supply before demand shrinks significantly due to concerns about a global economic slowdown and the effect on consumption growth in emerging markets
The market reacted rather quickly. The possibility of a large production cut immediately pushed up WTI and Brent crude futures prices. Brent crude, the international benchmark, rose above $90 a barrel on Tuesday, up about 7 percent since the weekend. But it is still well below the high of $130 per barrel seen at the beginning of the Russia-Ukraine conflict.
If OPEC+'s production cuts lead to a significant, or sustained, rise in oil prices, then this clearly conflicts with the U.S. goal of lowering inflation. Some analysts believe this reflects tensions between Saudi Arabia, the world's largest exporter of crude oil, and the United States, the world's largest consumer of crude oil.
Jeff Currie
Goldman Sachs global head of commodities
"I'd like to argue that, you know, the old oil order is back. OPEC is probably more powerful than it's ever been in its 60-year history since its inception. And one of the key reasons, really is the fact that we have not been investing in alternative energy sources. So they're really the only game in town."
On Tuesday, Biden's press secretary Karine Jean-Pierre said the White House would not comment on any Opec+ moves in advance. She also noted that the US was not considering new releases from the country's Strategic Petroleum Reserve (SPR).
We should also pay attention to whether the cut is as regard to existing production or quota levels. Some analysts point out that if the reduction is quota levels, rather than existing production, then the impact on international oil prices will be relatively limited.
The latest data from the international energy and commodity price assessment agency, Argus, shows that in August, the 10 OPEC members and nine other non-OPEC oil producers actually produced a total of 3.41 million barrels less than their scheduled quotas. That means that for those countries that were already producing less than their quota, their actual production would likely not have been affected much if the cut was to their quota.
We will learn the final decision of this meeting tonight. We will also keep you posted on the supply and demand dynamics and price fluctuations in the international energy markets. | 2022-10-05T03:46:22Z | www.cnbc.com | CCTV Script 05/10/22 | https://www.cnbc.com/2022/10/05/cctv-script-05/10/22.html | https://www.cnbc.com/2022/10/05/cctv-script-05/10/22.html |
Updated Wed, Oct 5 202212:18 AM EDT
Overnight in Asia-Pacific markets, shares traded higher after U.S. stocks rallied for a second day Tuesday.
A weakening in the most recent job openings data had prompted some investors to consider whether the Federal Reserve would slow the pace of interest rate hikes. | 2022-10-05T05:22:04Z | www.cnbc.com | European markets: Open to close, stocks, data, earnings and news | https://www.cnbc.com/2022/10/05/european-markets-open-to-close-stocks-data-earnings-and-news.html | https://www.cnbc.com/2022/10/05/european-markets-open-to-close-stocks-data-earnings-and-news.html |
While there is a great deal of excitement about fusion, there are huge challenges too.
Monday's announcement was welcomed by the nuclear industry. Tom Greatrex, who is chief executive of the Nuclear Industry Association, said the news represented "a huge moment for fusion energy in the UK."
Sam Meredith11 min ago | 2022-10-05T05:22:28Z | www.cnbc.com | UK selects site for prototype fusion energy plant | https://www.cnbc.com/2022/10/05/uk-selects-site-for-prototype-fusion-energy-plant.html | https://www.cnbc.com/2022/10/05/uk-selects-site-for-prototype-fusion-energy-plant.html |
Germany's economy minister has accused the U.S. and other "friendly" gas supplier states of astronomical prices for their gas supplies.
He suggested some gas suppliers were profiting from the fallout of the war in Ukraine which has sent global energy prices soaring.
Habeck, the co-leader of Germany's Green Party, which is a part of Berlin's coalition government led by center-left Chancellor Olaf Scholz, said the EU should also do more to address the region's gas crisis, with countries scrambling for alternative supplies which has pressured prices even more, that was brought about by the war in Ukraine and deteriorating relations with Russia.
The U.S. energy economy is benefiting while Europe suffers, says Citi's Morse
Moscow's state-owned gas giant Gazprom has cut supplies to the bloc drastically over the last few months, largely due to international sanctions and a desire to punish Europe — the EU used to import around 45% of its gas supplies from Russia but is seeking to halt all imports — for supporting Kyiv.
More recently, Russia and Europe's energy ties have literally been damaged with the Nord Stream pipelines suffering leaks last month in suspicious circumstances.
Russia denied it had sabotaged the pipelines, with reported underwater explosions damaging the pipes in several places, sending natural gas spewing from the Baltic Sea. The damage prompted an international outcry with the EU vowing a "robust" response to attacks on its energy infrastructure. | 2022-10-05T10:00:31Z | www.cnbc.com | German minister criticizes U.S. over 'astronomical' natural gas prices | https://www.cnbc.com/2022/10/05/german-minister-criticizes-us-over-astronomical-natural-gas-prices.html | https://www.cnbc.com/2022/10/05/german-minister-criticizes-us-over-astronomical-natural-gas-prices.html |
Musk moves ahead with Twitter deal in 13D filing
New York Yankees center fielder Aaron Judge (99) hits his 62nd home run to beat the Roger Maris home run record during the game between the Texas Rangers and the New York Yankees on October 4, 2022 at Globe Life Field in Arlington, Texas. | 2022-10-05T11:31:53Z | www.cnbc.com | 5 things to know before the stock market opens Wednesday, October 5 | https://www.cnbc.com/2022/10/05/5-things-to-know-before-the-stock-market-opens-wednesday-october-5.html | https://www.cnbc.com/2022/10/05/5-things-to-know-before-the-stock-market-opens-wednesday-october-5.html |
Airbnb is on track to become the biggest travel western travel platform over the next five years, making this a good entry point for investors, according to Bernstein. Richard Clarke initiated Airbnb as outperform with a price target of $143, indicating an upside of about 30% from Tuesday's close of $110.81. The stock traded slightly lower in the premarket. He sees the vacation rental industry valued at about $150 billion, noting the space could see high single- to low-digit growth going forward. He also said that Airbnb is well-positioned to grow in other markets including hotels, experiences and long-term stays. "Airbnb a unique business within travel, with a triple moat from an aspirational brand, a unique product set and a loyal customer base - all focused in one of travel's fastest swim lanes," Clarke said in a Tuesday note to clients. Clarke said Airbnb should be the biggest western travel platform by 2027, while the consensus is for the company to reach this feat by 2029. It should also be the most profitable online travel agency within two years, beating out competitors such as Expedia and Booking.com. Bernstein sees a record-setting third quarter that is 5% ahead of estimates on room nights surpassing 100 million. Airbnb has been able to grow while cutting marketing costs, which points to the strength of the brand, he said. To be sure, there are concerns about supply and meeting demand, as the company breaks in to new markets. There's also been talk about Airbnbs being "hotels with chores" and complaints about additional fees, Clarke said. The looming threat of greater regulation remains, though Clarke said those concerns have diminished and the platform has shown its ability to preform regardless. And Airbnbs, despite being considered a "good value," are still more expensive than hotels, which are currently still depressed from the pandemic. But "any modest backlash against Airbnb is also not stifling demand," Clarke said. And now is a good time to buy given its "attractive" entry point. "Even if you have a negative outlook on travel demand, we would see Airbnb as the best stock to own given its more defensive position, faster growth and more attractive valuation on a 4-year forward multiple," he added. Airbnb shares have struggled this year, losing 33%. — CNBC's Michael Bloom contributed to this report. | 2022-10-05T11:31:59Z | www.cnbc.com | Airbnb is a buy as it could soon become the biggest western travel company, Bernstein says | https://www.cnbc.com/2022/10/05/airbnb-is-a-buy-as-it-could-soon-become-the-biggest-western-travel-company-bernstein-says.html | https://www.cnbc.com/2022/10/05/airbnb-is-a-buy-as-it-could-soon-become-the-biggest-western-travel-company-bernstein-says.html |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.