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3 Artificial Intelligence (AI) Stocks That Can Skyrocket Up to 1,200%, According to Select Wall Street Pundits 2024-08-15 18:06:00+00:00 - Beginning in the mid-1990s, the internet completely changed the way consumers and businesses interacted. Though it took time for this innovative technology to go mainstream and mature, the internet, ultimately, altered the growth trajectory for Corporate America in a positive way. For three decades, Wall Street and investors have been eagerly awaiting the next leap forward in technology that would do for businesses what the internet did in the mid-1990s. After a long wait, artificial intelligence (AI) looks to be the answer. Image source: Getty Images. The massive addressable market for AI stems from the ability of software and systems to learn without human intervention. This machine learning capacity can help AI systems become more efficient at their tasks, or potentially learn entirely new skills, over time. The game-changing potential of AI isn't lost on Wall Street institutions, analysts, or money managers. Most pundits expect this revolutionary technology will make investors richer -- but some price targets are more outsized than others. Based on the prognostications of three Wall Street pundits, the following trio of widely owned AI stocks offer as much as 1,200% upside! Nvidia: Implied upside of 91% The first artificial intelligence stock that at least one Wall Street expert believes will soar is data-center hardware leader Nvidia (NASDAQ: NVDA). Despite Nvidia gaining more than $2.2 trillion in market value since the start of 2023, analyst Hans Mosesmann of Rosenblatt Securities believes it could effectively become Wall Street's first $5 trillion company. His Street-high $200 price target, which was issued following Nvidia's historic 10-for-1 forward split, suggests that 91% upside exists, based on the $104.75 share price the company ended at on Aug. 9. Like most Nvidia optimists, Mosesmann believes it'll maintain its dominance of AI-graphics processing units (GPUs) used in high-compute data centers. With demand for the company's chips handily outpacing supply, it's had little trouble increasing the selling price for its GPUs and boosting its adjusted gross margin. But Mosesmann is equally excited about Nvidia's CUDA platform. This is the toolkit developers use to build large language models. In Mosesmann's view, Nvidia's software will work hand-in-hand with its AI-GPUs to keep clients within its ecosystem. However, history is very much working against Mosesmann's prediction. We haven't seen a next-big-thing innovation in 30 years avoid an early stage bubble. With most businesses lacking a clear game plan for AI, it's pretty evident this technology is still early in its maturation process. In short, there's a high probability of a bubble-bursting event sooner than later with artificial intelligence. Story continues Nvidia's historic run-up also requires flawless execution, which simply isn't sustainable. Less than two weeks ago, it was reported that delivery of the company's next-generation GPU platform, known as Blackwell, would be delayed by at least three months due to design flaws. Even with this chip being sold out well into 2025, a delay opens the door for external and internal competitors to secure valuable data center "real estate." More than likely, we've already witnessed Nvidia's stock peak. Image source: Getty Images. Super Micro Computer: Implied upside of 195% A second leading AI stock that can skyrocket, according to the forecast of one Wall Street analyst, is customizable rack server and storage specialist Super Micro Computer (NASDAQ: SMCI). Less than a month after Super Micro was added to the benchmark S&P 500, Loop Capital's Ananda Baruah issued a sky-high $1,500 price target on the company. With shares of Super Micro having retraced to "just" $508 and change, as of the closing bell on Aug. 9, Baruah's price target implies a near-tripling may await. Baruah believes the company is perfectly positioned within the AI space to capitalize on growing enterprise demand for high-compute data centers capable of running generative AI solutions and training large language models. Additionally, its addition to the S&P 500 should allow for multiple expansion that, ultimately, drives its share price to $1,500 -- or $150 on a split-adjusted basis. On Aug. 6, Super Micro became the latest high-profile company to announce a stock split. While there's no denying that triple-digit year-over-year sales growth for a long-established infrastructure company is impressive, there are also reasons for investors to be cautious. For instance, Super Micro Computer incorporates Nvidia's ultra-popular H100 GPUs into its rack servers. The problem for Super Micro is that Nvidia can't meet all of its demand. This means it's at the mercy of its suppliers. There's a bit of a precedent for expectations getting ahead of reality for Super Micro Computer, as well. The company's stock rocketed higher in the mid-2010s on the expectation that it would be a key infrastructure player in the enterprise cloud boom. Unfortunately, the lofty expectations of Wall Street and investors weren't met. Although Super Micro Computer may continue to surprise in the short run, I find it highly unlikely that Baruah's high-water target of $1,500 comes to fruition. Tesla: Implied upside of 1,200% However, the crème-de-la-crème of upside price targets for AI stocks comes courtesy of Ark Invest CEO and Chief Investment Officer Cathie Wood. In June, Ark's Monte Carlo analysis anointed a (drum roll) $2,600 price target on electric-vehicle (EV) manufacturer Tesla (NASDAQ: TSLA) by 2029. This implies a market cap of roughly $8.3 trillion, which is more than double the value of world's largest publicly traded company at the moment. Wood and her team arrived at this lofty price target by placing immense emphasis on Tesla's AI-powered robotaxi business. Five years from now, Wood expects Tesla to generate $1.2 trillion in annual sales, with 63% of revenue, and 86% of the $440 billion in forecast earnings before interest, taxes, depreciation, and amortization (EBITDA), coming from robotaxis. There is, unfortunately, a glaring flaw with Ark Invest's Monte Carlo model. Namely, Tesla doesn't have a single robotaxi on public roads, despite claims from CEO Elon Musk in April 2019 that his company would have "over a million robotaxis on the road" the following year. Tesla has been unable to move past Level 2 autonomy, which is going to make it virtually impossible for the company to achieve even a fraction of what Wood's Monte Carlo analysis has predicted. Perhaps the bigger issue here is that Tesla's valuation has been inflated by promises made by Musk that haven't been kept. In addition to failing to deliver on "over a million robotaxis," Musk has suggested that Tesla's EV are "one year away" from full autonomy every year for a decade. If this laundry list of unfulfilled promises and hype (e.g., Optimus) are backed out of Tesla's valuation, shares could easily lose three-quarters of their value, if not more. To make matters worse, competition has picked up in a meaningful way for the company's EV business -- i.e., the operating segment that's historically generated most of its cash flow and operating income. The price war Tesla kicked off in 2023 to spur demand for its EVs cratered its operating margin and has been unable to halt the rise of global EV inventory. Last but not least, Tesla's pre-tax income has become increasingly reliant on unsustainable sources. Nearly 66% of the company's pre-tax income in the June-ended quarter was derived from regulatory tax credits sold to other automakers and interest income on its cash. Suffice it to say, nothing justifies Tesla's current $200 price tag, let alone Wood's $2,600 moonshot call. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $711,657!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of August 12, 2024 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy. 3 Artificial Intelligence (AI) Stocks That Can Skyrocket Up to 1,200%, According to Select Wall Street Pundits was originally published by The Motley Fool
Prediction: 2 Stocks That Will Be Worth More Than Apple 5 Years From Now 2024-08-15 17:30:00+00:00 - The stock market has fluctuated and reshuffled a lot since the start of last year. A surge in artificial intelligence (AI) has shed light on the vast potential of tech stocks, rallying investors and boosting the Nasdaq Composite by more than 60% since Jan. 1, 2023. Apple (NASDAQ: AAPL) secured its position as the world's most valuable company by market cap in 2011 and held that spot consistently until this year. The tech giant temporarily lost the top position between January and June of 2024 when Microsoft (NASDAQ: MSFT) surpassed Apple, and Nvidia (NASDAQ: NVDA) briefly achieved a market cap above $3 trillion. However, Apple's market cap of $3.3 trillion has seen it once again become the world's most valuable company. Yet, Microsoft and Nvidia continue to nip at its heels and could overtake the company for good in the coming years. Microsoft's diversified business model and increasingly established position in AI indicate it could have a more reliable position in tech. Meanwhile, Nvidia's nearly unrivaled dominance in the chip market appears to be the gift that keeps on giving as demand for graphics processing units (GPUs) continues to soar. So, here are two stocks that I predict will be worth more than Apple five years from now. 1. Nvidia Nvidia's market cap was $360 billion at the start of 2023 and is now $2.6 trillion, delivering an impressive growth spurt. The company has consistently outperformed Apple in stock growth over the last five years, with its share price up 2,600% compared to the iPhone maker's 330% rise. And that trend is unlikely to slow anytime soon. NVDA Revenue (Quarterly) Chart This chart shows the massive difference in financial growth Nvidia and Apple have experienced over just the last year. While these companies are both leaders in tech, their businesses differ significantly. Nvidia is profiting from soaring demand for chips, specifically its GPUs. These chips power many products, from cloud platforms to AI models, personal computers, game development engines, and more. Meanwhile, Nvidia has achieved an estimated 70% to 95% market share in GPUs. Technological advances are only likely to continue increasing the demand for powerful chips as companies work to improve their hardware and software offerings. Conversely, Apple has struggled to attract new customers to its products over the last year, with its iPhone and Mac revenue down 10% and 8%, respectively. Apple is working to expand in AI and will launch a major software update this fall called Apple Intelligence. The update will overhaul its operating systems, introducing various generative features. The company hopes Apple Intelligence will convince millions of consumers to upgrade their devices, as the features will only be accessible with newer products. While the software could boost earnings for the current fiscal year, how Apple will profit from AI over the long term remains to be seen. Story continues Meanwhile, Nvidia maintains a crucial role in the industry as a leading chipmaker, a position that will likely see it surpass Apple by market cap over the next five years. 2. Microsoft For years, Microsoft has played second fiddle to Apple on the list of most valuable companies. Apple has consistently outperformed the Windows company in stock growth, rising 330% since 2019 compared to Microsoft's 195%. However, that trend has shifted in 2024. Microsoft's share price is up 12% year to date, with Apple's up 8%. It's not a huge difference, but Microsoft's head start in AI and potent position in software will likely see it continue to outperform its rival. The AI market is projected to expand at a compound annual growth rate of 37% through 2030, which would see it hit nearly $2 trillion in spending. Meanwhile, Microsoft's diverse business model grants it multiple ways to monetize its AI products, thanks to homegrown brands like Windows, Office, Azure, Bing, Xbox, and LinkedIn. Since the start of 2023, the company has introduced generative features across its product lineup. This includes new productivity tools on Windows and its Office productivity suite, a revamp of Bing, and multiple AI solutions on its cloud platform Azure. Microsoft has also begun recouping some of its hefty investment in AI, attracting new members to Azure and Microsoft 365. Their respective segments have enjoyed year-over-year sales rises of 12% and 20% in 2024. MSFT Revenue (Quarterly) Chart Like Nvidia, Microsoft is outperforming Apple in earnings growth. Over the last three years, Microsoft's quarterly revenue and operating income have risen far higher than Apple's. Microsoft became a behemoth in tech thanks to its success in software. The emergence of AI has given it the opportunity for its unique skill set and product range to shine. The company arguably has more growth potential in AI, which could allow it to overtake Apple in market value before the end of the decade. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $711,657!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of August 12, 2024 Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That Will Be Worth More Than Apple 5 Years From Now was originally published by The Motley Fool
2 AI stocks to Buy Now With $200 2024-08-15 17:20:00+00:00 - Artificial intelligence (AI) is estimated to add trillions in value to the global economy through cost savings and productivity gains in the coming years. The returns for investors could be very lucrative, if you own the right stocks. While some AI stocks will be volatile as Wall Street sorts out the winners and losers, investors can stack the odds in their favor by investing in profitable tech leaders that are already seeing growing demand for their services. Here are two stocks benefiting from the AI boom that an investor can easily afford with less than $200. 1. Palantir Technologies Palantir Technologies (NYSE: PLTR) is seeing accelerating growth for its AI software platforms. The company is known for its relationship with the U.S. Department of Defense and intelligence agencies, but its momentum in signing corporate deals speaks to the inherent value of the company's AI platform and why the stock should be a long-term winner. Palantir's revenue, which comes from subscriptions, grew 27% year over year in the second quarter. That's also is up from 13% in Q3 2023, and its quarterly growth has improved each quarter over the last year. Government revenue is still growing fast at 23% year over year and reaching $371 million in the second quarter. But Palantir's U.S. commercial customer count nearly doubled over the last year, with U.S. commercial revenue reaching $159 million last quarter. Palantir is signing deals with companies across multiple industries, including healthcare and consumer goods. Earlier this year, it signed a 10-year expansion deal with Cleveland Clinic to deploy Palantir across more hospitals. It also expanded its deal with General Mills; the Cheerios maker is saving $14 million annually using Palantir. These deals show the breadth of Palantir's software capabilities. Most of its revenue has been driven by the U.S. government, but Palantir is proving to be a viable option for the largest organizations in the world. The long-term growth potential of the business could be massive. Most importantly, Palantir is a profitable business, generating a net profit of $134 million in the second quarter. The stock has had its ups and downs over the last few years, but it will follow the long-term growth of the business. 2. Arm Holdings Arm Holdings (NASDAQ: ARM) is a global leader in the semiconductor industry. Virtually every smartphone in the world uses Arm-based processors, but it has a huge opportunity to expand in the data center market as cloud companies upgrade their infrastructure for AI. Story continues The first thing to understand about Arm, and this speaks to why it's a good investment, is the company generates revenue from licensing its chip products to other semiconductor companies and manufacturers. What's more, after licensing a product, it then earns royalties on a per-unit basis on nearly all shipped processors using its technology. This royalty is usually based on a percentage of the chip's average selling price. As you might guess, Arm has a very lucrative business model. In the most recent quarter, its adjusted operating profit was $448 million on $939 million of revenue -- a sky-high margin of 47%. Its Armv9 chip technology is generating a quarter of its revenue right now and is seeing strong adoption, which bodes well for future royalties. In addition to smartphones, management is seeing strong demand for Armv9 in cloud computing. Arm's market share in the cloud has nearly doubled to 15% over the last two years, and it's also gaining share in automotive, consumer electronics, and networking equipment. AI-optimized data centers rely on customized equipment, and that plays to Arm's advantage. The company is increasingly investing to help manufacturers design customized chips, which explains why it is starting to gain market share in the cloud market. Arm has excellent growth prospects in the $600 billion semiconductor industry, and the stock's recent dip gives investors an opportunity to buy shares at a more reasonable price. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $711,657!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of August 12, 2024 John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy. 2 AI stocks to Buy Now With $200 was originally published by The Motley Fool
3 Stocks Prominent Billionaires Can't Stop Buying 2024-08-15 17:05:00+00:00 - Following billionaires for investment ideas can help you avoid a lot of mistakes. These professionals usually have a long career of picking stocks that beat the market's average return, and importantly, they have access to resources to assist in their research that individual investors don't have. David Tepper of Appaloosa Management, CEO Warren Buffett at Berkshire Hathaway, and Chase Coleman of Tiger Global Management all have built considerable wealth through the stock market. Here are three of their largest holdings in 2024. 1. Alibaba Group David Tepper has an outstanding record of building wealth through his firm over the last 30 years. His own net worth has almost doubled since 2019 to $20 billion, and the largest holding in his fund is Chinese tech titan Alibaba Group (NYSE: BABA). Tepper doubled his stake in Alibaba in the first quarter to over 11 million shares. He has often bought and sold the stock over the last decade, so he seems to follow a very opportunistic investing strategy that is grounded in business fundamentals and valuation. There are a few things that stand out about Tepper's bet. First, Alibaba is dirt cheap. The stock is 75% off its previous highs and trading at a single-digit multiple of free cash flow. Second, the last time Tepper made a bet this big in Alibaba was 2019 -- right before the stock soared over 40% in 2020. The stars seem to be aligning for Tepper once again. Alibaba is getting more aggressive at fighting back against competitors, which pressured its growth last year and contributed to the stock sell-off. Its e-commerce business is seeing improving buyer frequency and purchasing behavior that drove an 8% year-over-year increase in revenue in the March-ending quarter. Because Alibaba generates revenue from fees charged to merchants that sell on its e-commerce platforms, it is a very profitable business, and its long-term growth potential seems significantly underestimated right now. The stock is a steal at its current price-to-free-cash-flow multiple of 8 and could deliver market-beating returns if it continues to show stable commerce revenue. 2. Occidental Petroleum Warren Buffett is without a doubt the most closely watched billionaire investor. His net worth currently sits at $135 billion, according to Forbes, virtually all of it earned through his shares of Berkshire Hathaway that have a compound annual growth rate close to 20% since 1965. Berkshire Hathaway has been dumping its massive position in Apple and buying shares of Occidental Petroleum (NYSE: OXY) instead. Story continues He has a long history of making profitable bets on energy companies. In 2007, Buffett sold Berkshire's shares in PetroChina for $4 billion (he paid $488 million for the shares four years prior). What's more, utilities and energy are among Berkshire's main business operations, generating 10% of the company's non-insurance operating earnings in 2023. Berkshire's acquisition of a majority interest in electric utility MidAmerican Energy in 1999 was a huge step in building Berkshire's energy business. Suffice to say, Buffett knows a great value in energy when he sees one. Occidental stock has been flat over the last two years. The main concern is the potential for lower oil prices to pressure the company's financial results, and the impact this could have on the debt reduction plans. However, the company's recent acquisition of CrownRock will add high-margin assets to its production business. This will pad the company's free cash flow, which could unlock significant upside in the share price. On an enterprise value-to-EBITDA basis, the stock trades at a multiple of 5.8. That is a discount to other leading oil stocks that trade between 6.5 to 7.5 times trailing EBITDA (earnings before interest taxes, depreciation, and amortization). Investors can still buy Occidental shares close to the $59 price that Buffett was recently paying in June. 3. Take-Two Interactive Software Chase Coleman started Tiger Global Management in 2001 and earned 21% annualized returns through the first few decades of operation. His net worth currently stands at $5.5 billion, according to Forbes. Tiger Global initially bought shares of video game producer Take-Two Interactive Software (NASDAQ: TTWO) in 2022, and except for one quarter when it sold a small amount of shares, it has been adding to its stake over the last few years. It bought more shares earlier this year in the first quarter. Take-Two's Grand Theft Auto series is one of the best-selling video game franchises in history. The fifth and latest installment in the more than 20-year history of the series has sold 200 million copies since its 2013 release. The popularity of this title and the more than 10 years since the last release will lead to tremendous pent-up demand for the next installment. Grand Theft Auto VI is scheduled to be released in calendar 2025. The official trailer on YouTube has been watched over 200 million times, which is pointing to massive sales numbers. And this is just one title among several that Take-Two will launch over the next few years. Its current pipeline features 27 titles from core franchises and new versions of previously released titles. Releasing titles from existing series with established fan bases is a low-risk strategy to generate growth in the video game business, which has to be one reason Coleman likes Take-Two's growth strategy. The Wall Street consensus has Take-Two's adjusted earnings per share reaching $9.25 in fiscal 2027. If the stock is trading at a price-to-earnings (P/E) ratio of 30, lower than its current 55 forward P/E, the share price could reach $276. That is roughly double the current share price and certainly lends to the likelihood that Coleman has picked another winner. Should you invest $1,000 in Alibaba Group right now? Before you buy stock in Alibaba Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alibaba Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $711,657!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of August 12, 2024 John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Take-Two Interactive Software. The Motley Fool recommends Alibaba Group and Occidental Petroleum. The Motley Fool has a disclosure policy. 3 Stocks Prominent Billionaires Can't Stop Buying was originally published by The Motley Fool
Stocks Edge up With More Data Due After CPI Boost: Markets Wrap 2024-08-15 16:48:00+00:00 - (Bloomberg) -- European stocks and US equity futures made small advances as traders looked forward to more economic data that could reinforce the case for Federal Reserve interest-rate cuts. Most Read from Bloomberg Shares in Bavarian Nordic A/S, one of the few companies with an approved mpox vaccine, jumped 17% in Copenhagen after the World Health Organization declared a fast-spreading outbreak of the disease a global public health emergency. Europe’s Stoxx 600 Index rose 0.2%. US futures pointed to a modestly positive open on Wall Street after the S&P 500 extended its winning streak to a fifth day Wednesday, buoyed by a benign consumer price index print. Cisco Systems Inc. rose as much as 7.4% in premarket after the computer networking equipment maker’s results beat expectations. “The latest US inflation data supports our view of a gradual cooling of the US economy,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “This underlines our view that the Fed will start easing policy at its September meeting. That provides a positive backdrop for risk assets. It would also erode returns on cash, underlining our view that investors should brace for lower rates.” There’s no let-up for traders tracking a busy week of updates on the world’s biggest economy. Thursday brings readings on initial jobless claims and retail sales, while Walmart Inc.’s earnings should provide insights into the state of the American consumer. Figures out Wednesday showed that US year-on-year core consumer prices in July rose at the slowest pace since 2021. Traders are fully pricing in one 25 basis-point cut by the Fed next month and 100 basis points of reductions through year-end. Treasuries were steady, as was a gauge of dollar strength. In Asia, Japan’s Topix index and China’s CSI 300 benchmark rose in a broadly positive reaction to data points in the two countries. Japan’s economy grew faster in the second quarter than analysts forecast. China, meanwhile, saw signs of stabilization that included slowing declines in home prices and better-than-expected retail sales. Not everyone saw the latest China numbers positively. The “July data suggest the government will have to provide more stimulus to meet its 5% economic growth target for the year,” Ed Yardeni, who runs Yardeni Research, wrote in a research note. “Most striking is the small but unusual decline in bank loans during the month. It suggests a lack of confidence among businesses and consumers, potentially leading to reduced investment and spending.” Story continues In commodities, oil clawed back some gains after falling for a second session on Wednesday. Gold edged higher after two daily declines to trade above $2,450 per ounce. Key events this week: US initial jobless claims, retail sales, industrial production, Thursday Fed’s Alberto Musalem and Patrick Harker speak, Thursday US housing starts, University of Michigan consumer sentiment, Friday Fed’s Austan Goolsbee speaks, Friday Some of the main moves in markets: Stocks The Stoxx Europe 600 rose 0.2% as of 9:36 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.2% The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index fell 0.2% Currencies The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1007 The Japanese yen was little changed at 147.29 per dollar The offshore yuan fell 0.2% to 7.1607 per dollar The British pound rose 0.1% to $1.2846 Cryptocurrencies Bitcoin fell 1.5% to $58,294.34 Ether fell 2.3% to $2,615.04 Bonds The yield on 10-year Treasuries was little changed at 3.84% Germany’s 10-year yield advanced two basis points to 2.20% Britain’s 10-year yield advanced three basis points to 3.85% Commodities Brent crude rose 0.1% to $79.86 a barrel Spot gold rose 0.3% to $2,456.35 an ounce This story was produced with the assistance of Bloomberg Automation. --With assistance from Richard Henderson and Sagarika Jaisinghani. Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Interest Rates Are About to Do Something They Haven't Done Since March 2020, and It Could Trigger a Big Move in the Stock Market 2024-08-15 14:25:00+00:00 - Inflation refers to the general rise in the price of goods and services. The U.S. Federal Reserve aims to keep the consumer price index (CPI) measure of inflation growing at an annual rate of 2%, and the central bank will adjust the federal funds rate (overnight interest rates) when it deviates too far from that target. The CPI hit a 40-year high of 8% in 2022, triggering one of the most aggressive campaigns to hike interest rates in the history of the Fed. The rate of inflation has cooled considerably since then, so the central bank appears set to reverse that policy. That means interest rates may be cut for the first time since March 2020. If history is any guide, that could trigger a big move in the benchmark S&P 500 (SNPINDEX: ^GSPC) stock market index -- but the direction might surprise you. The Fed could cut interest rates three times before the end of 2024 The U.S. government injected trillions of dollars' worth of stimulus into the economy during 2020 and 2021 to counteract the negative economic effects of the COVID-19 pandemic. At the same time, the Fed slashed interest rates to a historic low of 0% to 0.25%, and it injected trillions of dollars into the financial system through quantitative easing (QE) by buying government and agency bonds. Loose monetary policy and drastic increases in money supply tend to be inflationary, but disruptions to global supply chains also drove prices higher. Factories and shippers were periodically shutting down all over the world to stop the spread of COVID-19, which led to shortages of everything from televisions to cars. So, a cocktail of factors sent the CPI surging during 2022, which triggered the flurry of rate hikes that followed. The federal funds rate ultimately settled at 5.25% to 5.50% after the Fed's last rate hike in August 2023. That's a long way from the pandemic low point. But here's the good news: It's working. The CPI ended 2023 at 4.1%, and it came in at an annualized rate of 3% in June 2024, which is the most recent reading. In other words, inflation is closing in on the Fed's 2% target. That's why most experts are expecting imminent rate cuts. According to the CME Group's FedWatch tool, the Fed is likely to cut rates three times by the end of 2024 (once each in September, November, and December). The stock market doesn't always respond well to rate cuts Conventional wisdom suggests rate cuts are great for the stock market. They reduce the yield on risk-free assets like cash and Treasury bonds, which pushes investors into growth assets like stocks and real estate. Story continues However, if we examine the chart below, which overlays the federal funds rate with the S&P 500 going all the way back to 2000, we can see that falling interest rates often foreshadow a decline in the stock market. ^SPX Chart To be clear, the prevailing trend is always up for the S&P 500, so long-term investors shouldn't be swayed by the potential for imminent weakness. Plus, there were some overriding themes in the past that make this correlation a little murky. In other words, we have to look at why the Fed was cutting rates during the periods depicted in the above chart: During the early 2000s, the dot-com tech bubble burst, which triggered a recession in the economy. The S&P 500 fell by 9.1% in 2000, 11.9% in 2001, and 22.1% in 2002. During the late 2000s, the global financial crisis forced a decisive intervention by the Fed, which included rapid rate cuts and the introduction of QE for the first time. The S&P 500 plunged 37% in 2008. Finally, the sharp fall in rates in 2020 was triggered by the pandemic. The S&P 500 suffered a peak-to-trough decline of 31.8% in 2020, but it actually ended the year in positive territory thanks to all of the stimulus I mentioned earlier. Therefore, we can't exactly say that the stock market fell because the Fed cut rates. Rather, it likely fell on each of those occasions because of what else was happening in the underlying economy. Image source: Getty Images. Will this time be different? There are no signs of an impending crisis for the U.S. economy right now, nor of a garden-variety recession. But there are some signs of weakness. The unemployment rate, for example, has ticked higher to 4.3% (from 3.7% in January), and a softening jobs market can be a precursor for weak consumer spending in the near future. Since the CPI is almost back to the Fed's target, it probably isn't appropriate to maintain a restrictive policy stance. Plus, interest rate moves tend to have a lagged effect on the economy, so it's possible we haven't even seen the full effect of the Fed's past hikes just yet. By the same token, any rate cuts at the end of this year probably won't feed through to the economic data until sometime in 2025. That means the sooner the Fed starts cutting, the higher the probability the U.S. economy will avoid any unnecessary deterioration down the road. The stock market trades based on corporate earnings, and it's very hard for companies to deliver growth in a slowing economy. If Wall Street starts to reduce earnings forecasts, that will almost certainly lead to a down period for stocks. In that scenario, the S&P 500 could be falling while the Fed is cutting rates at the same time. The Fed typically cuts rates when it observes weakness in the economy, which can be a signal that the S&P 500 is heading lower in the short term. But imminent rate cuts aren't a reason to sell stocks -- as I mentioned earlier, they often recover over the long term, so any weakness might actually be a buying opportunity. Don’t miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this. On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves: Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $19,172 !* Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,859 !* Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $349,472!* Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon. See 3 “Double Down” stocks » *Stock Advisor returns as of August 12, 2024 Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy. Interest Rates Are About to Do Something They Haven't Done Since March 2020, and It Could Trigger a Big Move in the Stock Market was originally published by The Motley Fool
2 Stock-Split AI Stocks to Buy Before They Surge 165% and 245%, According to Certain Wall Street Analysts 2024-08-15 13:42:00+00:00 - Year to date, Nvidia (NASDAQ: NVDA) and Super Micro Computer (NASDAQ: SMCI) have been the best-performing stocks in the Nasdaq 100 and two of the three best-performing stocks in the S&P 500. Both companies have elected to split their stocks to make shares more affordable. Specifically, Nvidia completed a 10-for-1 stock split in June, and Supermicro has a 10-for-1 stock split planned for September. Somewhat surprisingly, Wall Street remains bullish on both companies. The median price targets imply 21% upside for Nvidia and 22% upside for Supermicro, but certain analysts see much larger gains on the horizon. In June, Beth Kindig at the I/O Fund published an analysis in Forbes that values Nvidia at $10 trillion by 2030, echoing a prediction Jim Cramer made two years ago. That implies 245% upside from its current market capitalization of $2.9 trillion. In April, Ananda Baruah at Loop Capital raised his 12-month price target on Supermicro to $1,500 per share, which implies 165% upside from its current price of $567 per share. Similarly, Hans Mosesmann at Rosenblatt set his price target at $1,300 per share, implying 129% upside. Here's what investors should know about these artificial intelligence (AI) stocks. 1. Nvidia Nvidia graphics processing units (GPUs) were originally designed to render stunning computer graphics for video games and 3D design applications. But the company repurposed its GPUs as data center accelerators when it launched its parallel computing platform CUDA in 2006. CUDA has evolved into a robust ecosystem of software tools that streamlines the development of GPU-accelerated applications across various disciplines, from computational chemistry to artificial intelligence. Nvidia dominates the data center accelerator market. The company accounted for 98% of data center GPU shipments in 2023, according to semiconductor analysts at TechInsights. Nvidia also holds more than 80% market share in AI processors. That dominance is partially due to superior performance. Nvidia GPUs consistently outperform competing chips at the MLPerf benchmarks, tests that provide unbiased evaluations of AI systems across training and inference. However, the company is truly formidable because it offers a full-stack computing solution -- meaning it combines the hardware, software, and services businesses need to build, deploy, and manage AI applications. I'm not only referring to GPUs and CUDA. Nvidia also provides supplemental data center hardware, like networking equipment and central processing units (CPUs), and provides a comprehensive AI-as-a-service solution called DGX Cloud. Story continues Nvidia reported better-than-expected financial results in the first quarter of fiscal 2025 (ended April 2024). Revenue increased 262% to $26 billion on strong momentum in the data center segment, and non-GAAP net income surged 461% to $6.12 per diluted share. CEO Jensen Huang said, "Our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the Hopper platform." Wall Street expects Nvidia to grow adjusted earnings at 52% annually through fiscal 2026 (ending January 2026). That consensus estimate makes its current valuation of 57.7 times adjusted earnings look reasonable. Investors interested in purchasing shares of Nvidia should start with a small position today. If the stock drops following the upcoming earnings report on Aug. 28, consider using that opportunity to build a slightly larger position. Eventually, I believe Nvidia could be a $10 trillion company, but I'm skeptical about it reaching that milestone by 2030. 2. Super Micro Computer Supermicro manufactures high-performance computing platforms, including storage solutions and servers optimized for intensive workloads like data analytics and artificial intelligence. The company holds a leadership position in the AI server market, due to its modular approach to product design and its internal manufacturing capabilities. Specifically, Supermicro makes "electronic 'building blocks' that can be assembled into servers in an almost endless number of combinations. Rivals offer a more limited menu to customers," according to The Wall Street Journal. The company also handles most research, development, and assembly at facilities in Silicon Valley, which support the rapid rollout of servers featuring the latest from suppliers like Nvidia. Supermicro reported mixed financial results in the fourth quarter of fiscal 2024 (ended June 30). Revenue surged 143% to $5.3 billion on record demand for AI infrastructure. But non-GAAP net income rose just 78% to $6.25 per diluted share as costs associated with direct liquid cooling (DLC) components pressured margins. Wall Street anticipated adjusted earnings growth of 130%. That miss caused the stock to tumble 17% following the report. However, management provided important context on the earnings call. While gross profit margin dropped 5.8 percentage points to 11.2% in the fourth quarter, CFO David Weigand told analysts that figure should normalize between 14% and 17% by the end of fiscal 2025 as DLC manufacturing capacity scales. Moreover, investments in DLC could help Supermicro gain share in AI servers. Liquid-cooled AI servers reduce data center power consumption. So demand for DLC solutions is expected to increase rapidly, representing at least 15% of all data center installations in the next two years, up from less than 1% historically. Supermicro has emerged as an early leader in DLC solutions, which could ultimately boost demand for its AI servers. Wall Street expects Supermicro to grow adjusted earnings at 41% annually through fiscal 2026. That makes the current valuation of 25.7 times adjusted earnings look cheap. That said, the stock could still plunge if Supermicro misses Wall Street's earnings estimates in future quarters. Investors who are comfortable with that risk could buy a small position today, but not with the expectation of triple-digit gains in the next 12 months. It could happen, but anyone counting on that outcome is begging to be disappointed. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $711,657!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of August 12, 2024 Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. 2 Stock-Split AI Stocks to Buy Before They Surge 165% and 245%, According to Certain Wall Street Analysts was originally published by The Motley Fool
David Tepper's Strategic Moves in Q2 2024: A Deep Dive into NVIDIA's Significant Reduction 2024-08-15 11:54:00+00:00 - Insights from Appaloosa Management's Latest 13F Filing David Alan Tepper, the esteemed founder of Appaloosa Management, has once again made headlines with his latest 13F filing for the second quarter of 2024. Known for his sharp investment acumen, Tepper's strategies often reflect his deep understanding of market dynamics, honed over years of experience since his early days in Pittsburgh. Appaloosa Management, based in Miami Beach, Florida, is renowned for its focus on public equity and fixed income markets globally, with a particular expertise in distressed debt investing. David Tepper's Strategic Moves in Q2 2024: A Deep Dive into NVIDIA's Significant Reduction Portfolio Adjustments and Key Increases During the second quarter, David Tepper (Trades, Portfolio) made significant adjustments to his portfolio, including increasing his stakes in 9 stocks. Notably, Tepper's investment in Lyft Inc (NASDAQ:LYFT) surged by 1,602.51%, with an additional 7,493,639 shares, bringing the total to 7,961,257 shares. This move had a 1.71% impact on his current portfolio, valued at approximately $112,253,720. Another significant increase was in KraneShares CSI China Internet ETF (KWEB), where he added 1,015,000 shares, resulting in a 29.21% increase in share count and a total value of $121,319,800. Strategic Exits Tepper's strategy also included complete exits from certain holdings. Notably, he sold all 45,000 shares of Norfolk Southern Corp (NYSE:NSC), which impacted the portfolio by -0.17%. Significant Reductions Tepper's portfolio adjustments included reducing positions in 26 stocks. The most significant reduction was in NVIDIA Corp (NASDAQ:NVDA), where he cut his holdings by 3,730,000 shares, marking an 84.39% decrease. This reduction had a -4.99% impact on the portfolio. During the quarter, NVIDIA's stock traded at an average price of $101.1, returning 29.19% over the past three months and 138.34% year-to-date. Another major reduction was in Microsoft Corp (NASDAQ:MSFT), with a 15.62% decrease in shares, impacting the portfolio by -1.36%. Portfolio Overview and Sector Focus As of the second quarter of 2024, David Tepper (Trades, Portfolio)'s portfolio comprised 37 stocks. The top holdings included 12.24% in Alibaba Group Holding Ltd (NYSE:BABA), 10.87% in Amazon.com Inc (NASDAQ:AMZN), 8.55% in Microsoft Corp (NASDAQ:MSFT), 7.63% in Meta Platforms Inc (NASDAQ:META), and 5.72% in Alphabet Inc (NASDAQ:GOOG). The investments are primarily concentrated across seven industries: Technology, Consumer Cyclical, Communication Services, Energy, Industrials, Healthcare, and Real Estate. Story continues David Tepper's Strategic Moves in Q2 2024: A Deep Dive into NVIDIA's Significant Reduction This detailed analysis of David Tepper (Trades, Portfolio)'s latest 13F filing highlights his strategic investment decisions, reflecting both his bullish and cautious stances in various sectors. As markets continue to evolve, Tepper's moves offer valuable insights for investors looking to understand the complexities of portfolio management in today's economic environment. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus.
UK economy ‘grows strongly’ for second quarter running, but stalls in June – business live 2024-08-15 10:54:00+00:00 - 10.07 BST A quick summary Britain’s economy has extended the recovery from recession last year after recording growth of 0.6% in the three months to June. Figures from the Office for National Statistics (ONS) show gross domestic product (GDP) continued to grow in the second quarter, after growth of 0.7% in the first three months of 2024. City economists had forecast growth of 0.6%. Liz McKeown, the ONS director of economic statistics, said: “The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year. “Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.” However, the UK economy did not grow in June. The ONS said there were anecdotal reports from businesses that general election uncertainty, and public sector strikes, hit activity in June. GDP per head of population grew by 0.3% in the quarter, but was still lower than a year ago – and before the Covid-19 pandemic starter. Chancellor Rachel Reeves said economic growth was the Labour government’s “national mission”… … her predecessor, Jeremy Hunt, said the data were “further proof that Labour have inherited a growing and resilient economy”. The UK is likely to be the third-fastest G7 economy in the second quarter of 2024, with only Canada yet to publish GDP data. Since the pandemic, though, it’s the second slowest G7 member: Over Q2, economy grew 0.6% - on top of 0.7% for Q1. Puts UK economy 2.3% larger than its pre-pandemic level (not great in G7 terms). Note - Germany will report overhauled GDP estimates shortly (of the kind that produced big upward revisions to other countries' GDP) pic.twitter.com/wOhocMD0IV — Andy Bruce (@BruceReuters) August 15, 2024 Economists welcomed the GDP report. Deutsche Bank said the near-term economic outlook has improved, while PWC predicts the second half of 2024 will be strong too. But, the New Economics Foundation said the government needs to invest more in infrastructure, to support growth.
Elon Musk Is Beefing With Mark Cuban Again After 'Shark Tank' Fame Slams Tesla Founder For Manipulating X Algorithm - Tesla (NASDAQ:TSLA) 2024-08-15 10:35:00+00:00 - The online feud between billionaires Elon Musk and Mark Cuban has flared up again, with Musk resorting to emoji insults. What Happened: The disagreement was rekindled when Cuban, during a “The Daily Show” interview, insinuated that the Tesla TSLA founder might have manipulated X’s algorithm to favor his preferences. Musk retorted with a post on X stating, “Mark Cuban is a giant [emoji] in human form,” Business Insider reported on Thursday. Cuban, a familiar face on “Shark Tank,” responded to Musk’s insult with heart hands emojis. He had previously mentioned in June that he enjoys engaging with Musk despite their differences. Musk’s ire may also be connected to Cuban’s remarks about Silicon Valley billionaires, including Musk, trying to gain influence by supporting former President Donald Trump. Musk has publicly endorsed Trump and backed his 2024 presidential run. See Also: Kevin O’Leary Calls Kamala Harris’ ‘Show-Me’ Story, Elon Musk ‘Modern Day Bruce Wayne:’ ‘Shark Tank’ Star Discusses Inflation And Market Opportunity Despite their disagreements, Cuban has shown support for Musk’s ownership of X, stating in a September GQ interview that a Musk-led X could thrive if Musk “can get out of his own way.” In the same interview, Cuban also discussed Musk’s immense influence, particularly through his ownership of X. He had stated that Musk was trying to become the most influential man in the world. Why It Matters: The two billionaires have had online clashes before. Musk had earlier mocked Cuban for stating he would still vote for President Joe Biden over Trump. In April, Cuban vowed to defend the positive impact of diversity, equity, and inclusion (DEI) in business, which contrasts with Musk’s views. Did You Know? Congress Is Making Huge Investments. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool Photo courtesy: Shutterstock
Bill Gates' Ex-Wife Reportedly Left 'Unsettled' After Meeting Jeffrey Epstein With Husband: 'I Regretted It From The Second I Stepped In The Door' 2024-08-15 10:24:00+00:00 - A new book has revealed that a meeting between Melinda French Gates and Jeffrey Epstein left her feeling “unsettled.” The book, authored by New York Times correspondent Anupreeta Das, provides a detailed account of the encounter, which took place at Epstein’s New York City home in 2013. What Happened: The book, titled “Billionaire, Nerd, Savior, King: Bill Gates and His Quest to Shape Our World,” describes a dinner at Epstein’s seven-story mansion that left French Gates feeling uneasy. The book offers a detailed account of the evening, including the mansion’s decor and Epstein’s behavior, reported Business Insider. French Gates, who was then married to Bill Gates, met Epstein only once. In a 2022 interview with CBS, she expressed her disapproval of Epstein’s professional relationship with her ex-husband. “I regretted it from the second I stepped in the door. He was abhorrent. He was evil personified,” French Gates said. She later confided in friends that she was furious that Bill Gates would not sever ties with Epstein. Despite the discomfort, Bill Gates was reportedly unofficially campaigning for a Nobel Peace Prize for their foundation’s work toward eradicating polio at the time. Epstein allegedly offered to help the Gates Foundation secure a win. French Gates made her displeasure with her then-husband’s ties to Epstein clear. Bill Gates’ office has criticized the book, according to the report, stating that it includes “highly sensationalized allegations and outright falsehoods.” See Also: Tim Walz Turns Trump’s Border Wall Into A Punchline – ‘I’ll Invest In The 30-Foot Ladder Factory’ Why It Matters: The revelations about Melinda French Gates’s discomfort with Jeffrey Epstein come amid a series of significant changes in her life. Following her divorce from Bill Gates in 2021, she has embraced a simpler lifestyle. In a June 2024 interview with Time, she expressed her joy in her new walkable neighborhood, stating, “I live in a neighborhood. Now I can walk to little stores. I can walk to the drugstore, I can walk to a restaurant. I absolutely love it.” Additionally, French Gates has been vocal about her views on philanthropy. In July, she commented on Warren Buffett‘s decision to create a charitable trust managed by his children, calling it a “good evolution of his thinking.” Her stance on philanthropy has also sparked debates. Recently, Bill Ackman, CEO of Pershing Square, responded to her criticism of his philanthropic efforts, advocating for for-profit solutions over traditional philanthropy. Moreover, her political activities have drawn attention. In June, Tesla Inc. CEO Elon Musk commented on her support for President Joe Biden, suggesting that her political leanings could impact Western civilization. Read Next: Image Via Shutterstock
UK economy continues recovery from recession with GDP growth of 0.6% 2024-08-15 10:24:00+00:00 - Britain’s economy has extended the recovery from recession after growth of 0.6% in the three months to June, handing a boost to the chancellor, Rachel Reeves, in the run-up to the autumn budget. Figures from the Office for National Statistics (ONS) show gross domestic product continued to grow in the second quarter, after growth of 0.7% in the first three months of 2024. The reading matched the forecasts of City economists. However, monthly GDP growth was flat in June as wet weather deterred shoppers from spending amid a washout summer for retailers. Ben Jones, the lead economist at the Confederation of British Industry, said the figures showed the economy had “finally shaken off its slumber of recent years”, but warned there were still challenges to sustainably boost Britain’s long-term growth rate. “We think the quarterly data probably overstates the underlying momentum in the economy, with recent CBI surveys of activity remaining fairly subdued,” he said. “But firms nonetheless appear confident that the recovery will continue.” According to the latest snapshot, service sector output increased by 0.8% in the second quarter, powered by scientific research and development. There was also strength in the IT, transport, legal, architecture and engineering sectors. Consumer-facing service output fell by 0.1%, reflecting the weaker period for purchases of physical goods amid the cost of living crisis and poor weather hitting retail sales. Manufacturing and construction output also fell. The UK has grown at a faster pace this year than many forecasters predicted, in a development seized on by the shadow chancellor, Jeremy Hunt, as evidence that the previous government had helped the economy to turn a corner. “Today’s figures are yet further proof that Labour have inherited a growing and resilient economy. The chancellor’s attempt to blame her economic inheritance on her decision to raise taxes – tax rises she had always planned – will not wash with the public,” he wrote on X. The latest figures show the UK recorded the strongest growth in the G7 group of advanced economies over the past six months. The second quarter growth rate of 0.6% compares with 0.3% in the eurozone, and 0.7% in the US. However, it comes after a lacklustre performance over the past decade, and high living costs, elevated interest rates and faltering productivity gains are keeping a lid on momentum. The UK economy entered recession – defined as two consecutive quarters of falling GDP – in the second half of last year as households cut back on spending. Reeves has said rebooting the economy is Labour’s No 1 priority, arguing that stronger growth will help boost living standards and raise more tax revenue to repair battered public services. The chancellor will deliver an autumn budget on 30 October. “The new government is under no illusion as to the scale of the challenge we have inherited after more than a decade of low economic growth and a £22bn black hole in the public finances,” she said. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion “That is why we have made economic growth our national mission and we are taking the tough decisions now to fix the foundations, so we can rebuild Britain and make every part of the country better off.” Experts said the recent strength in the economy was unlikely to last. Earlier this month the Bank of England raised its growth forecast from 0.5% to 1.25% for 2024, but warned of a weaker medium-term outlook as high interest rates hit activity. Financial markets expect the Bank could cut interest rates for a second time in September, after figures on Wednesday showed inflation rose by less than expected in July to 2.2%. Much of the recent expansion has been driven by a growing population. The latest figures showed GDP per head, an important barometer of living standards, was 0.1% lower than a year earlier in the second quarter, and 0.8% below pre-pandemic levels. Simon Pittaway, a senior economist at the Resolution Foundation, said: “Britain’s medium-term record is far less impressive, and has been driven by a growing population rather than rising productivity. “Without a return to productivity growth, living standards will continue to stagnate and Britain will continue to fall behind its peers.”
Biden administration to release prices for first 10 drugs subject to landmark Medicare negotiations 2024-08-15 09:56:00+00:00 - Activists protest the price of prescription drug costs in front of the U.S. Department of Health and Human Services building in Washington, D.C., on Oct. 6, 2022. The Biden administration on Thursday will release prices for the first 10 prescription drugs that were subject to landmark negotiations between drugmakers and Medicare, a milestone in a controversial process that aims to make costly medications more affordable for older Americans. The government estimates that the new negotiated prices for the medications will lead to around $6 billion in net savings for the Medicare program in 2026 alone, when they officially go into effect. That is based on the estimated savings the prices would have produced if they were in effect in 2023, senior administration officials told reporters on Wednesday. The Biden administration also expects the new prices to save Medicare enrollees $1.5 billion in out-of-pocket costs in 2026 alone. "For so many people, being able to afford these drugs will mean the difference between debilitating illness and living full lives," Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid Services, told reporters. "These negotiated prices. They're not just about costs. They are about helping to make sure that your father, your grandfather or you can live longer, healthier." It comes one day before the second anniversary of President Joe Biden's signature Inflation Reduction Act, which gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program's nearly 60-year history. The administration unveiled the first set of medications selected for the price talks in August 2023, kicking off a nearly year-long negotiation period that ended at the beginning of the month. The final prices give drugmakers, which fiercely oppose the policy, a glimpse of how much revenue they could expect to lose over the next few years. It also sets a precedent for the additional rounds of Medicare drug price negotiations, which will kick off in 2025 and beyond. In a statement Thursday, President Joe Biden called the new negotiated prices a "historic milestone" made possible because of the Inflation Reduction Act. He specifically touted Vice President Kamala Harris' tie-breaking vote for the law in the Senate in 2022. Harris, the Democratic presidential nominee, said in a statement that she was proud to cast that deciding vote, adding there is more work to be done to lower health-care costs for Americans. "Today's announcement will be lifechanging for so many of our loved ones across the nation, and we are not stopping here," Harris said in a statement Thursday, noting that additional prescription drugs will be selected for future rounds of negotiations. Here are the 10 drugs that were subject to the initial talks: The Biden administration will release the so-called maximum fair price of each drug, the highest price that a Medicare Part D plan sponsor or beneficiary can pay for the treatment. Medicare Part D plans, which are administered by private insurers, cover prescription medications that older Americans fill at retail pharmacies. The lengthy negotiation process involved months of back-and-forth price offers between companies and Medicare, which determined its initial offer for each medication using sales volume data, federal financial support for the drug's development and data on pending or approved patent applications and exclusivities, among other information. It is difficult to compare the new negotiated price of a drug with its current list price, which is what a wholesaler, distributor or other direct purchaser paid a manufacturer for a medication before any discounts. That's because most of the 10 medications are already subject to significant rebates after private negotiations with Medicare Part D plans. But the heavily rebated net price that Part D plans pay for a given drug is unknown since those talks are confidential, according to Leigh Purvis, a prescription drug policy principal with AARP Public Policy Institute. AARP, the influential lobby group that represents people older than 50, has advocated for Medicare's new negotiation powers. "So that's I think what people are going to be trying to get to – are these negotiated prices lower than the net prices that Medicare Part D were already paying?" Purvis told CNBC. "And so that's the comparison that people are looking for. Now, recognizing that rebates are confidential, it's going to be a tough ask." A senior administration official confirmed that a direct comparison between the negotiated prices and net prices paid by Medicare is "commercially confidential information." "Each Medicare Part D plan has their own individual rebate agreements, and Medicare is prohibited from sharing any information that we have there," the official told reporters. The negotiations are the centerpiece of the Biden administration's efforts to rein in the rising cost of medications in the U.S. Some congressional Democrats and consumer advocates have long pushed for the change, as many seniors around the country struggle to afford care. The price talks are expected to save money for people enrolled in Medicare, who take an average of four to five prescription drugs a month. Almost 10% of Medicare enrollees ages 65 and older, and 20% of those under 65, report challenges in affording drugs, a senior administration official told reporters last year.
Kim Dotcom to be extradited from New Zealand to US 2024-08-15 09:45:00+00:00 - Kim Dotcom, who is facing criminal charges relating to the defunct file-sharing website Megaupload, is to be extradited to the US, the New Zealand justice minister has said. German-born Dotcom has New Zealand residency and has been fighting extradition to the US since 2012 following an FBI-ordered raid on his Auckland mansion. The justice minister, Paul Goldsmith, had signed an extradition order for Dotcom, a spokesperson said on Thursday. “I considered all of the information carefully, and have decided that Mr Dotcom should be surrendered to the US to face trial,” Goldsmith said in a statement. “As is common practice, I have allowed Mr Dotcom a short period of time to consider and take advice on my decision. I will not, therefore, be commenting further at this stage.” In a post on X on Tuesday, Dotcom said: “The obedient US colony in the South Pacific just decided to extradite me for what users uploaded to Megaupload,” in what appears to be a reference to the extradition order. Reuters could not immediately contact Dotcom for a response. US authorities say Dotcom and three other Megaupload executives cost film studios and record companies more than $500m by encouraging paying users to store and share copyrighted material, which generated more than $175m in revenue for the website. The company’s chief marketing officer, Finn Batato, and chief technical officer and co-founder, Mathias Ortmann, both from Germany, along with a third executive, the Dutch national Bram van der Kolk, were arrested in Auckland with Dotcom in 2012. Ortmann and Van der Kolk entered plea deals that resulted in them being sentenced in 2023 to jail terms in New Zealand but allowed them to avoid extradition. Batato died in 2022 in New Zealand.
An astronaut stuck on the International Space Station due to Boeing Starliner delays is roughing it in a sleeping bag over in the Japanese space module 2024-08-15 09:42:55+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Access your favorite topics in a personalized feed while you're on the go. download the app Thanks for signing up! Go to newsletter preferences Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Suni Williams and Butch Wilmore, the two NASA astronauts stuck on the International Space Station due to delays with the Boeing Starliner aircraft, previously said they were doing great while waiting to come back to Earth. In a press conference on July 10, Williams said they were having a good time on the ISS and that it "feels good to float around." And Wilmore said he was "absolutely confident" the Starliner will get them home safe. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. But according to a report by Time editor Jeffrey Kluger, who covers space and science, Wilmore is roughing it out during his stay. Wilmore, per Kluger, was prepared to rest in a sleeping bag in the Japanese Space Agency's Kibo module for eight days. But that trip on June 5 has extended well beyond two months, and it may be February 2025 when the astronauts are brought back to Earth. Advertisement According to NASA, the ISS only has six private sleeping quarters. Time reported that each quarter has a sleeping bag, a storage area for snacks and personal belongings, and two laptops attached to the walls. But Wilmore and Williams joined an international crew of seven people already at the ISS — so the sleep cabins were already at maximum capacity. Time reported that Williams camps with one of the astronauts in a basic sleep module called the CASA, or Crew Alternate Sleep Accommodation. And Wilmore has been given a sleeping bag to rest in, out in the Japanese module. Advertisement Kluger wrote that Williams joked to him in May before she left for space, saying: "Butch is going to have to rough it a little bit." While they're stuck in space, the duo has likely also started working odd jobs on the ISS, per Time. They began with mission goals for the short stint they initially planned to be on, like carrying out checks on the Starliner after its test flight. Related stories "But they long since finished up that checklist and have instead been assisting the rest of the crew with science experiments and maintenance chores, including such unglamorous work as repairing a urine processing pump," the Time report said. The duo also packed a small selection of clothes, insufficient for a prolonged stay. But Time reported that a Northrop Grumman resupply spaceship delivered fresh clothes to both astronauts last week. Advertisement A waiting game The astronauts have now spent more than 70 days in the ISS, with no immediate end in sight. On August 7, NASA floated the possibility of using SpaceX's Crew Dragon to bring the duo down to Earth if the Starliner proves unviable. However, the downside is that they will be stuck on the International Space Station for about eight months longer than planned and will only be able to return in February 2025. The Starliner spaceship had thruster issues and helium leaks as it approached the ISS in June. Even after weeks of testing and troubleshooting, NASA still has concerns about the aircraft's ability to bring the astronauts home. Advertisement Williams, who NASA selected as an astronaut in 1998, spent 322 days in space before the Starliner project. Wilmore, a NASA astronaut since 2000, spent 178 days in space before the Starliner launch. Representatives for NASA did not immediately respond to requests for comment from Business Insider sent outside regular business hours.
A Texas boomer couple who retired to an expat hot spot in Ecuador explains how it helps them save money 2024-08-15 09:39:01+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Access your favorite topics in a personalized feed while you're on the go. download the app Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Karl was getting disillusioned with the US. The Air Force veteran began practicing as an orthodontist in 1990 and raised three daughters in Texas. But over time he became concerned about the US financial system, even joining an advocacy group to educate voters about the ballooning national debt. But then came 2008 and its fiscal crisis. "Nobody had their hand slapped. The only thing that was done was to print money and bail all the big boys out," Karl, whose full name is known to Business Insider but withheld over privacy concerns, said. "I finally decided that things were not going well in the United States, and I started looking for a place, what I would call a 'bug-out' place for my children in case things didn't go well in the United States." This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Advertisement A year earlier, Karl's first wife had died. All of that led him to ponder retiring abroad. His goal for retirement was simply to read and write for his own education, poring over his collection of books. The places that he had been eyeing didn't have good climates for books, though, so he fired up a simple Google search: "Best weather in the world." That's how he chanced upon Cuenca, Ecuador. At the same time, Karl had met someone: Brenda, a medical technologist who was also pondering a retirement elsewhere. In Texas, Brenda found an environment heavy with tension: "Every time I would go into a store, I get this feeling that everyone's stressed." Brenda was also concerned about having a financially sustainable retirement, after buying a house in 2007 and then weathering the subsequent financial fallout. Today, though, she and Karl are happily living in Ecuador, with a retirement nest egg that's only growing. It's an option that's become increasingly enticing to some older Americans, who are finding that their retirement funds go further abroad and that thriving ex-pat communities — alongside cheaper and more accessible healthcare — create a version of a comfortable retirement that the US has failed to deliver on. Advertisement "We have more in savings now than we left with, and that's living a very nice lifestyle, traveling all over the world, and not having to scrimp or save at all," Karl said. "So it is the best of all worlds. It's a wonderful, wonderful place to live." Pros and cons of moving abroad The decision to pack up two entire lives isn't always an easy one. Karl said that ex-pats need to adjust to a new reality: Don't expect to find the usual big box stores or even own a car. Related stories "You can't buy everything in one place, but it's more of a European style of shopping," Karl said. Other cultural differences may prove daunting for some; Karl said it's important for people to learn at least a "passable" level of Spanish out of courtesy to the locals, and to make their experiences easier. Indeed, moving abroad can present new logistical and cultural challenges for both movers and locals. New residents have to adapt to a new way of living, and often new systems of infrastructure, healthcare, and taxes; at the same time, locals might feel the ripple effect of wealthier ex-pats driving up prices. Advertisement But for Karl and Brenda, the pros of making the move far outweigh the cons. The healthcare in Ecuador is "wonderful" — Karl said that they can't praise the medical facilities there enough. In fact, he said that the area is becoming a medical and dental vacation spot, where Americans come for cheaper elective procedures. Brenda has been amazed by their experience with the medical system in Ecuador. A few years back, she was in and out of the hospital for a few months, which amounted to about five trips to the emergency room and three surgeries. "Our total bill on our food, our room, our surgery, our medicine was $25,000. It would've been $600,000 in the States," she said. Another big change from the states: Most retirees don't own a car, Karl said. Instead, they can get around the city in a $2.50 taxi, or pay the $0.17 senior fare for an aboveground tram. Advertisement "You almost have to laugh at the savings that you can make and it's a nice, clean, safe, very efficient way to get around in town," he said. American ex-pat communities are growing The American retirement dream is increasingly slipping away for many older workers hoping to hang up their hats. Savings are dwindling, Social Security isn't enough to get by, and healthcare costs are racking up. Karl and Brenda are sitting content with their nest egg. They receive Social Security, and said that they have cashed everything else out into certificate of savings deposits in Ecuador, which earn a robust return rate. As of December 2022, just over 450,000 retired Americans were collecting Social Security in foreign countries. In Ecuador alone, there were 2,795 retirees collecting Social Security. That's up from just over 300,000 retirees collecting Social Security from abroad in 2008. Ecuador alone has seen its Social Security population grow by about 7,000 over that 14-year span. Advertisement That's a shift Karl and Brenda are seeing firsthand: Cuenca is a growing ex-pat hotspot, with ever-more retirees flocking in. Mansion Global said that the area is the "hottest current real estate market for US immigrants to Ecuador." There are around 10,000 expats in the area who bring in around $360 million to the local economy annually, per Mansion Global. Cuenca expats even have their own magazine. And the appeal of the lifestyle is stretching beyond just retirees, according to Karl. "There is a growing community of expats here, younger people from Europe, from all over the world that are working remotely," he said, adding: "It's not just retirees. It's open to all sorts of possibilities." Are you an American who's retired abroad for cheaper living or better healthcare? Contact this reporter at jkaplan@businessinsider.com.
Does strong economic growth so far in 2024 bode well for Rachel Reeves? Don’t count on it 2024-08-15 09:37:00+00:00 - In the first half of the year the UK economy grew at a faster pace than many economists believed was possible for the whole of 2024. Official figures show a rise of 0.6% in the second quarter and 0.7% increase in the first three months of the year, pushing the growth rate above the 1% mark some analysts had said at the start of the year was the likely maximum rate of expansion. It would be satisfying for Rachel Reeves if she knew there was some momentum in the data. The chancellor is preparing her first budget and is hopeful that the Office for Budget Responsibility (OBR), the Treasury’s independent forecaster, will examine the figures and conclude that her arrival at No 11 Downing Street coincides with a better economic outlook and with that, higher tax receipts. Yet it’s possible all we have seen is a bounce back from last year’s recession and the strength of the rebound is not enough to boost the long-term outlook. The figures for June bear this out. They showed growth juddered to a halt. That growth was zero in a single month should not be overly alarming when there are so many one-off factors that can influence the outcome. Monthly figures can bounce around, which is why the Office for National Statistics prefers to focus on the quarterly data. In this case it could be a sign that consumers are financially exhausted and either unable or unwilling to carry on spending.. The services sector, which covers about three-quarters of activity in the economy, suffered a 0.1% drop brought on by a drop in sales across the retail and wholesale trades. It is an unexpected fall because, reading across from the inflation figures and the level of pay rises, consumers should be in a strong position. Inflation has fallen from a peak of 11.1% in October 2022 to 2% this year (before a modest tick upwards to 2.2% in July) while wages have remained above 5%. For almost a year, wages adjusted for inflation have been rising, putting more money in the pockets of the average household. However, in the UK, the government and the Bank of England focus on a measure of inflation that excludes housing costs. There is no space in the consumer prices index (CPI) for rental cost inflation or the rise in mortgage costs. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion When mortgage interest bills have jumped for millions of people and rents are rising at a record level, it seems bizarre that policymakers think they have a sense of how well the nation is coping with inflation when major elements are excluded. For many people, a broader measure of inflation that included housing costs would have shown how they have been hit harder than the CPI reveals and that they have very little spare cash. The Institute for Fiscal Studies has also shown that inflation rose much more for people on low and middle incomes at the height of the cost of living crisis, denying them an increase in spending power during 2022 and 2023 and pushing many deeper into debt. It means that the next six months could be tougher than the first. And June may be a harbinger, not a blip.
Texas comptroller adds NatWest to list of firms said to be ‘boycotting’ energy companies 2024-08-15 09:37:00+00:00 - Texas officials have added NatWest Group to a growing list of financial firms considered to be taking part in a “boycott” of energy companies, in a move that could limit the UK bank’s business with the oil-rich US state. The high street banking group is the latest company to be targeted by the Texas comptroller, Glenn Hegar, who has been naming companies that restrict their business dealings with climate-harming fossil fuel firms. NatWest has said that, by 2026, it “will not renew, refinance or extend existing reserve-based lending used specifically for the purpose of financing oil and gas exploration, extraction and production”. The lender’s website said that the sustainability policy was part of its efforts to “end the most harmful activity” fuelling the climate crisis. The stance puts NatWest among a growing list of financial services companies on the Texas comptroller’s divestment statute list, including BlackRock, HSBC, UBS, and Société Générale. The list – entitled “financial companies that boycott energy companies” – is the result of a 2021 law designed to protect the state’s oil and gas sector. The law states that Texas agencies must either stop doing businesses with companies divesting from the oil and gas industry, or explain why they are continuing to deal with those firms. NatWest is understood to have limited exposure to Texas. The banking group, formerly named Royal Bank of Scotland, declined to comment. Hegar’s decision is part of a wider crackdown on companies’ environmental, social and governance (ESG) policies by the oil-friendly state, which has also put pressure on financial companies to pull out of international initiatives that push signatories to reduce their greenhouse gas emissions. In February, Hegar welcomed news that JP Morgan and State Street Global Advisors had pulled out of Climate Action 100+, and chastised the ESG movement for creating an “environment that put politics above profits and led many financial firms to disregard their fiduciary duty to clients”. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The Texas policies are contrary to the shift taking place in countries in mainland Europe and the UK, which are increasingly pushing for more climate-friendly policies from financial institutions, as governments race to limit global heating to 2 degrees above preindustrial levels.
The 2 hottest states to buy property in right now — and 3 where home price appreciation is being crippled by soaring insurance costs 2024-08-15 09:30:02+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Access your favorite topics in a personalized feed while you're on the go. download the app Thanks for signing up! Go to newsletter preferences Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview After their 5% pullback in the second half of 2022, US home prices have rebounded steadily. Over the last 12 months, they've climbed 4%, according to Redfin data. But some markets are hotter than others, and BiggerPockets' housing market guru Dave Meyer says home price appreciation in two states in particular are catching his eye at the moment: New York and Connecticut. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Appreciation in the two states is indeed outpacing the national average of 4%, Redfin data shows. In New York, prices are up 7% year-over-year while Connecticut's home prices have risen 11.3% over the last 12 months. In New York, Meyer pointed specifically to home price growth in the western part of the state in cities like Rochester, Buffalo, and Syracuse. While prices in the cities have been fairly volatile in recent years, since February 2023, home values have risen by 48% in Rochester and Syracuse and 35% in Buffalo. That crushes the 14% national average over that timeline, according to Redfin data. Advertisement While Meyer said it's difficult to predict whether these states will continue outperforming in the future, he said he likes their prospects over a 10-to-20-year time horizon. Part of Meyer's bullishness stems from the fact that Connecticut and western New York are fairly insulated from the impacts of the climate crisis relative to other states, especially those in the south with more exposure to heat and severe storms. Plus, he's skeptical that the migration from Northeastern and West Coast cities to southern states during the pandemic can keep going. Areas like western New York and the Midwest have excess infrastructure, he said, while places like Florida have struggled with the influx of people. 3 states where appreciation is being stifled While New York and Connecticut might be among the areas less vulnerable to the climate crisis going forward, states in the south are more likely to be impacted. Advertisement Three states that are particularly susceptible to more extreme weather are Florida, Texas, and Louisiana, and home values feeling the brunt of this reality, Meyer said. That's because of expensive insurance premiums, Meyer said. Related stories "Major carriers are pulling out of the market, and for many homeowners, the premiums are just unaffordable," he told Business Insider. The numbers back up Meyer's argument. Home price growth over the last 12 months was 2.3% in Florida, -1.1% in Texas, and 2.2% in Louisiana, according to Redfin data. Again, the national average was 4% growth over the last 12 months. Advertisement On the insurance premiums front, the data is also there. According to Bankrate, the national average premium is $2,270 per year for a $300,000 home. But in Florida, the average is $5,531 per year; in Louisiana, it's $4,296; and in Texas, it's $3,898. In New York and Connecticut, by comparison, annual average premiums are $1,733 and $1,698, respectively. A recent study from Bankrate found that average annual premiums in Miami are the highest in the country at $10,473. Some housing economists and investors are starting to warn of the impacts of climate change on property values. DeltaTerra Capital CEO David Burt recently told Business Insider that home values in higher-risk areas could drop by 60% thanks to higher insurance premiums eating into homebuyers' budgets. Advertisement Skylar Olsen, Zillow's chief economist, is also warning of trouble ahead for home prices in coastal areas of states like Florida and Texas. "There are large swaths of communities in Florida at risk from storm surge," she told Business Insider in March. "I would not recommend, from an investment perspective, to invest in areas that will be at risk."
Kamala Harris Plans Historic Federal Ban On 'Corporate Price-Gouging' In Food And Grocery Industries 2024-08-15 09:25:00+00:00 - In an unprecedented move, Vice President Kamala Harris is set to propose a federal ban on corporate price-gouging within the food and grocery sectors. What Happened: The Harris campaign is planning to announce the proposed ban as part of a wider economic policy platform. The Democratic presidential nominee is expected to officially present this platform at a campaign rally in North Carolina on Friday, CNBC reported on Thursday. The proposal includes increased scrutiny of potential mergers between large supermarkets and food producers, specifically for the risk of raising grocery prices for consumers. This regulatory package is one of the earliest efforts by the Harris campaign to outline an economic platform independent of President Joe Biden‘s agenda. See Also: Joe Biden Calls Ukraine’s Aggressive Assault On Russia’s Territory A ‘Real Dilemma’ For Russian President Despite this, Harris’ plan aligns with the Biden administration’s focus on consumer protections and opposition to massive corporate mergers. Earlier this year, the White House initiated a “Strike Force on Unfair and Illegal Pricing,” a collaboration between the Justice Department and the Federal Trade Commission. On Friday, Harris will specifically address the meat industry, attributing soaring meat prices to a significant portion of Americans’ increased grocery bills. The Democratic nominee will also propose measures to reduce consumer costs in the prescription drugs and housing sectors. The announcement comes two days after former President Donald Trump, Harris’ opponent, blamed her for the high price of consumer goods in his own economic policy speech in North Carolina. Why It Matters: This proposal follows Harris’s earlier promise to cap unfair rent increases and take on corporate landlords. It also comes after she cast the deciding vote for the Inflation Reduction Act, which has been blamed for the current inflation crisis. Harris’s focus on consumer protection and corporate regulation aligns with her history of standing with striking workers and challenging corporations, a stance that has earned her the endorsement of United Auto Workers (UAW) leader, Shawn Fain. Check This Out: Lawmakers Made Huge Investments This Year. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool Image via Shutterstock