Latest News
See the latest news and get GPT analysis of articles
The FOMC Decision Means Higher Prices for Stocks This Summer 2024-06-13 14:17:00+00:00 - SPDR S&P 500 ETF Trust Today SPY SPDR S&P 500 ETF Trust $542.45 +1.09 (+0.20%) 52-Week Range $409.21 ▼ $544.12 Dividend Yield 1.24% Assets Under Management $535.92 billion Add to Watchlist The Federal Open Market Committee (FOMC) didn’t exactly give the market what it wanted, but the policy statement and outlook have the S&P 500 NYSEARCA: SPY on track to hit new highs. High inflation and high interest rates aside, the US economy is growing, labor markets are healthy, and inflation is tracking lower, which has the Fed on track to cut rates. In the eyes of the market, the statement signals a pivot in policy that should spur economic activity and S&P 500 earnings growth. High inflation and interest rates are a worry in this environment, but the index can continue to climb higher. Get SPDR S&P 500 ETF Trust alerts: Sign Up The New Normal Isn’t New Anymore, It’s Just Normal Investors must remember where it came from to keep the current Fed policy in perspective. FOMC policy had been ultra-lenient for over a decade until early 2025, when the committee began its tightening cycle. At the time, the call was to “normalize” interest rates and the economy, which is where we are today. Historically, FOMC policy averages between 4% and 10%, which puts the current policy in the low-end range. In this situation, the FOMC could continue to hike rates again if necessary to curb inflation. Inflation is cooling; that’s a fact. The latest CPI report aligns with an outlook that inflation will cool to the FOMC target of 2% by 2026. The problem for the FOMC is that inflation is cooling ever so slowly, leaving them little choice but to keep rates where they are. As it has been all along, the risk for them is that cutting rates too soon will unleash the economy and spur inflation to new heights. The housing market alone has enough pent-up demand to sustain economic growth and consumer prices. Among the Fed's problems is interest rates. They can’t keep them high forever because rising rates impact everyone's borrowing costs, including the US government. The Committee for a Responsible Federal Budget estimates that a 50 basis point hike would increase the budget deficit by $1 trillion and put the US on the brink of default. The CBO estimates that credit costs will run nearly $850 billion this year alone and double in the next decade due to the deficit and high rates, increasing the risk of default. In this environment, the Fed is left walking a tightrope between fiscal policy and fiscal responsibility. Rates must stay high enough to combat inflation but low enough that US debt doesn’t spin wildly out of control. The FOMC Said Higher for Longer and Meant What It Said The Fed indicated it would cut rates this year but trimmed the forecast from three cuts to one. The best-case scenario is that this cut will come by November, but there is risk. The pace of inflation hasn’t slowed enough to warrant a rapid pace of rate cutting, which means the Fed may only cut once and then sit back to see what happens. Because the pace of inflation isn’t slowing quickly and the Fed is notorious for walking back on its outlook, it is also possible there will be no cut this year. As it is, the CME FedWatch Tool shows the market pricing in the first cut for November. The outlook for earnings is what is driving the market. The consensus estimates that S&P 500 earnings growth will accelerate sequentially through the end of the year and that annual growth will accelerate from this year to the next. This outlook shows that the S&P 500 is in rally mode, and it looks like it will continue to rise. The technical action following the Fed announcement was tepid but led to a significant gap higher the next and is confirmed by buy signals in MACD and stochastic. There is substantial potential in the S&P 500. The market is moving higher after breaking out of a secular grade trading range with a magnitude of nearly 1,300 points. Because the move to new highs is driven by earnings growth, earnings growth acceleration, and a forecast for the trend to continue, it could easily move above the breakout point by the exact figure. This puts a target of SPX 6,100, which may be reached by the end of the year. Before you consider SPDR S&P 500 ETF Trust, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and SPDR S&P 500 ETF Trust wasn't on the list. While SPDR S&P 500 ETF Trust currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Wake up, fund managers: the Royal Mail bid needs more scrutiny | Nils Pratley 2024-06-13 14:09:00+00:00 - There are two reasons to be suspicious of the Daniel Křetínský-led £3.6bn takeover offer for the parent company of Royal Mail. The first is the suitability of the lead bidder and his 44% co-investors, J&T, which could be one for the next government. The other is purely financial: is the Czech billionaire offering a fair price for International Distributions Services (IDS)? Is 370p a share any good? IDS is recommending acceptance, but there is a weirdness here. The directors’ rejection of Křetínský’s opening shot at 320p in April was pitched in such strong terms that one assumed chair Keith Williams, a boardroom heavyweight not scared of a corporate ding-dong, was digging in to resist his 27% shareholder. Instead, May’s 15% improvement in terms – decent, but not otherworldly – prompted an about-turn. The leap from “highly opportunistic” and “significant undervaluation” (320p) to “fair and reasonable” (370p) needs a better explanation than any offered by IDS so far. For all the crises since privatisation at 330p in 2013, its shares have still spent more time above 400p than below. The initial City chatter in April, note, homed in on 400p as the level at which IDS’s board would be obliged to talk. So, well done Columbia Threadneedle Investments, with its 5% stake. It is the sole big shareholder to protest. “The bid at 370p undervalues the business and doesn’t fully reflect its long-term intrinsic value,” it said a fortnight ago. “We believe that the management team has done a good job to turn the company around and additional equity value can be delivered over time for long-term shareholders.” Consider how an imaginary defence document could go. First, IDS could say 214p, the price before the action started, should be ignored as a base valuation because it was depressed by special factors: the sleepy UK stock market; extra illiquidity as a result of Křetínský’s large holding; and uncertainty over the pace of regulatory reform in an election year. 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 It’s not hard to imagine Royal Mail could generate 3% margins again; when turnover is almost £8bn, that’s serious money Second, it would emphasise the £300m of annual cost savings if regulator Ofcom accepts a proposal for a reduced second-class service. There’s no guarantee Ofcom will agree to anything, of course, and, yes, Royal Mail has just had a strike-afflicted year of operating losses of £348m. But political breezes have definitely shifted on reform, and new working practices, the product of a peace deal with the CWU union, are only now being implemented. It’s not hard to imagine Royal Mail could eventually generate 3% margins again; when annual turnover is almost £8bn, that’s serious money. Third, IDS could hammer home the value in GLS, its very profitable Dutch logistics company. In the past, City analysts have put standalone valuations on it as high as 350p a share. Fourth – and this really deserves more attention – a defending board could expand on its line from April about “the significant underpin of value through the group’s extensive freehold property portfolio [and] the pension scheme in material surplus”. How much property could be turned into cash as Royal Mail sends more volumes through its shiny new mega-hubs? The company has never said. As for pension surplus, “material” is the right description: it was £1.02bn, according to IDS’s last full-year report. Trustees run the scheme, of course, and, in any case, Křetínský’s EP Group would not be able to access a penny for five years under its undertakings. But the rules allow any surplus to be refunded to the company at buyout or wind-up, IDS confirms, and one or the other will happen eventually. Even if a future surplus is unknowable, £1bn is an attractive position today. Where are the other big fund managers in the valuation debate? Schroders manages a 6.8% stake and won’t comment. Redwheel, with 6.3%, was vocally opposed to 320p but hasn’t opined on 370p. Nothing has been heard from top 10 shareholder Jupiter. Given that the bid is structured to require 75% acceptances, even just a handful of objectors could make a difference. The relevant fund managers are all members of the brigade that normally sings the virtues of engaged experts who know companies intimately. They’ve had ages to ponder. They should say what they think.
Here's Why Analysts Boosted Walmart Stock's Valuation 2024-06-13 13:58:00+00:00 - Shares of Walmart Inc. NYSE: WMT are reaching a new all-time high this week after analysts at HSBC decided to boost their price targets on the stock higher. Seeing the company’s valuation as high as $81 a share, daring the stock to rally by an additional 22.2% from its already elevated levels today. These aren’t the only analysts seeing the stock’s potential being this high. Walmart Today WMT Walmart $66.70 +0.39 (+0.59%) 52-Week Range $49.85 ▼ $67.57 Dividend Yield 1.24% P/E Ratio 28.55 Price Target $69.94 Add to Watchlist Those at J.P. Morgan Chase & Co. also see the stock potentially going higher to the same $81 level, and today’s economy has everything to do with it. It looks like stocks willing to step away from corporate greed, despite the opportunity to keep margins at record highs, are receiving most of the market’s attention and reward through more bullish price action. Get XLP alerts: Sign Up Restaurant stocks like McDonald’s Co. NYSE: MCD and Yum! Brands Inc. NYSE: YUM is experiencing the same dynamic, as markets are now rewarding how Yum! is willing to help today’s inflation-choked consumer. At the same time, McDonald’s takes advantage of today’s market by passing costs onto the consumer to expand margins. Walmart's Price Reductions: A Welcome Relief in Today's Economy Walmart has historically been the discount consumer staples stock that people go to for their home and grocery needs. Hence, its brand moat carries some goodwill apart from unrepeatable strength. Walmart is now cutting prices on thousands of items across its locations to build more upon this popularity. Joining this trend comes Target Co. NYSE: TGT, Walgreens Boots Alliance Inc. NASDAQ: WBA, and even Amazon.com Inc. NASDAQ: AMZN. Because today’s consumers have had to deal with higher interest rates, making shopping on credit cards all that much harder, going to Walmart and seeing lower prices is a welcome relief sure to be rewarded by more shopping volumes and foot traffic. More than that, the U.S. economy is suffering from an economic phenomenon called stagflation, which is defined as low economic growth and high inflation. Now that inflation stood above 3% over the past quarter, and U.S. GDP growth was revised to 1.3%, the economy begins to fit the stagflation definition. For this reason, earnings per share (EPS) growth is becoming more critical than ever. While some may worry that lower prices could undercut Walmart stock’s EPS growth, the opposite is true. What Drives Walmart Stock's Promising Growth Prospects for the Future Trends in the Consumer Discretionary Select Sector SPDR Fund NYSEARCA: XLY show why Walmart stock is set up for success in the coming months. Over the past 12 months, Walmart has outperformed the sector by as much as 20%. The same is true for the Consumer Staples Select Sector SPDR Fund NYSEARCA: XLP, as Walmart outperformed it by up to 25%. Walmart Inc. (WMT) Price Chart for Thursday, June, 13, 2024 Price action is driven by Walmart's passing short-term profits to help its consumers access more affordable items during this economic storm. Looking at the past to guide Walmart's future potential growth, investors can find this in the company's latest quarterly earnings report. Earnings per share grew from $0.21 in 2023 to $0.63 in the most recent quarter, reporting a growth rate of 200% over the year. Considering that analysts only see single-digit growth in EPS for the next 12 months, investors could safely assume that these projections may be on the conservative end of the spectrum. Finding another reason to justify more than today’s growth projections and backing HSBC’s new price target, investors can look to Walmart’s recent margins and return on invested capital (ROIC) rates to predict what the stock could do next. The Role of Walmart Stock's Profits in Enhancing Future Investor Returns Of course, with these new growth prospects under its belt, Walmart’s management is looking to reward those shareholders who patiently stuck with the company despite these decisions to cut prices on items, which could seem to hurt the company’s profitability. Walmart MarketRank™ Stock Analysis Overall MarketRank™ 4.70 out of 5 Analyst Rating Moderate Buy Upside/Downside 5.2% Upside Short Interest Healthy Dividend Strength Strong Sustainability -2.08 News Sentiment 0.66 Insider Trading Selling Shares Projected Earnings Growth 9.92% See Full Details Recent results show up to 15% ROIC rates and a net operating cash flow of $4.2 billion. These figures allowed management to buy back as many as 18 million shares in the open market for a total value of $1.1 billion. Share buybacks can significantly boost investor returns over time, so management knows exactly what it’s doing when allocating large amounts of capital to buy back stock despite it being near all-time highs. Knowing that standing in the way of a company looking out for today’s inflation-choked consumer could be futile, bearish traders decided to step out of the picture. Over the past month, Walmart’s short interest declined by 7.7%, opening the way for bullish traders and investors to take over. Before you consider Consumer Staples Select Sector SPDR Fund, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Consumer Staples Select Sector SPDR Fund wasn't on the list. While Consumer Staples Select Sector SPDR Fund currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
C3.ai Stock: The Rising Powerhouse in the AI Industry 2024-06-13 13:48:00+00:00 - C3.ai NYSE: AI has been garnering attention lately, with many investors wondering if the company could emerge as a leader in the AI field, if it is simply a sleeping giant waiting to be awakened, or if it has come too far too soon and is due for a pullback. Its RSI is now hitting 73. To assess its potential, let's examine C3.ai's recent performance, earnings results, and current sentiment around the stock. Get C3.ai alerts: Sign Up Overview of C3.ai C3.ai is a prominent enterprise software company that provides artificial intelligence (AI) solutions to optimize operations and improve organizational decision-making. The company offers software-as-a-service (SaaS) applications across various industries, including manufacturing, healthcare, energy, and financial services. These applications harness the power of AI and machine learning to drive digital transformation. Over the years, C3.ai has evolved from an energy management company to an Internet-of-Things (IoT) business, and now, it is focused on AI applications. Management believes its latest shift into generative AI is revolutionary. The company's pre-built AI models address everyday situations in many industries, making them an attractive option for businesses that don't want to invest in developing custom models. One of C3.ai's significant emerging clients is the U.S. government, which accounted for nearly half of the company's bookings in the fourth quarter of fiscal 2024, ending April 30. Recent Surge in C3.ai's Stock Performance C3.ai's stock has seen a significant uptick recently. Over the past month, it surged by 31%, bringing its year-to-date performance close to a 10% gain. This surge can be attributed to its strong earnings results for the fourth quarter of fiscal 2024. Historically, C3.ai struggled to demonstrate substantial revenue growth despite its promising AI solutions. However, its latest earnings report impressed investors and led to a notable increase in its share price. On May 29, C3.ai released its fiscal 2024 year-end numbers. During the fourth quarter, the company reported a 20% year-over-year increase in revenue, reaching $86.6 million. This was also a 10% improvement from fiscal Q3's revenue of $78.4 million. For fiscal 2025, C3.ai projects revenue between $370 million and $395 million, representing a 23% increase at the midpoint, indicating a further acceleration in top-line growth. C3.ai, Inc. (AI) Price Chart for Thursday, June, 13, 2024 Despite the promising revenue projections, there are concerns regarding C3.ai's profitability. Management anticipates an adjusted operating loss of between $95 million and $125 million for fiscal 2025, deeper than the $94.9 million loss in fiscal 2024 and the $68.1 million in fiscal 2023. The company is one of the most unprofitable in the software industry, with a high cost of revenue and significant operating expenses leading to substantial losses. In Q1, despite nearly $87 million in revenue, the company incurred $35 million in the cost of revenue and $134 million in operating expenses, resulting in a 95% operating loss margin. Current Analyst Ratings and Price Target for C3.ai C3.ai MarketRank™ Stock Analysis Overall MarketRank™ 2.92 out of 5 Analyst Rating Hold Upside/Downside 1.5% Upside Short Interest Healthy Dividend Strength N/A Sustainability -0.64 News Sentiment 0.52 Insider Trading N/A Projected Earnings Growth Growing See Full Details Analyst sentiment towards C3.ai is beginning to shift positively. The stock holds a "hold" rating based on twelve analyst ratings, with a consensus price target of $31.30, suggesting further upside potential. This is a notable improvement from a year ago when the stock had a "reduce" rating and a consensus price target predicting considerable downside. However, skepticism remains high. C3.ai is one of the most shorted stocks in the market, with a short interest of 28.25%, up 3.23% from the previous month. This indicates that many are still betting against the company, reflecting ongoing concerns about its profitability, valuation, and long-term viability. C3.ai's Significant Potential with Notable Risks C3.ai has shown significant promise with its recent performance and earnings growth, positioning itself as a legitimate growth play within the AI industry. However, the company's substantial losses and high short interest suggest that investors should remain cautious. As the company continues to grow and evolve, its ability to achieve profitability will be crucial in determining whether it can transition from a potential sleeping giant to a dominant force in the AI sector. Before you consider C3.ai, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and C3.ai wasn't on the list. While C3.ai currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Broadcom Stock Soars 15.3% on Strong Q2 Results and Stock Split 2024-06-13 13:12:00+00:00 - Shares of Broadcom Inc. NASDAQ: AVGO soared 15.3% in the after-market hours of Wednesday evening. The reaction came after the company reported its second quarter 2024 financial results, which were better than expected, to say the least. Some in the financial markets thought that only technology stocks like NVIDIA Co. NASDAQ: NVDA were worthy of attention, but they were wrong. Broadcom Today AVGO Broadcom $1,678.99 +183.48 (+12.27%) 52-Week Range $795.09 ▼ $1,735.85 Dividend Yield 1.25% P/E Ratio 62.23 Price Target $1,371.04 Add to Watchlist NVIDIA stock gets more media exposure, but Broadcom is showing the type of financial growth that would warrant similar headlines, giving investors a new reason to stick with it. In fact, investors will soon find an unexpected twist in how markets have begun to prefer Broadcom over its peers in the semiconductor industry. Get Samsung Electronics alerts: Sign Up Backed by a solid fundamental thesis in rising artificial intelligence demand, Broadcom stock has surpassed all of today’s analyst price targets, putting the ball on Wall Street’s court to adjust how the stock is perceived within the banks. One thing is sure, as long as Broadcom’s customers are still in business, shareholders have a reason to watch it. Broadcom's Quarterly Results: What Investors Need to Focus On Current ISM manufacturing PMI index trends show that the electrical equipment sector, including electronics that rely on Broadcom's chips, contracted in the past month. This should have been enough to make Broadcom shareholders' stomachs churn. Broadcom Dividend Payments Dividend Yield 1.25% Annual Dividend $21.00 Annualized 3-Year Dividend Growth 12.58% Dividend Payout Ratio 77.84% Next Dividend Payment Jun. 28 See Full Details However, some may have underestimated the company’s current positioning in the market, of which Broadcom is very well positioned by serving clients like Apple Inc. NASDAQ: AAPL and Samsung Electronics Co. OTCMKTS: SSNLF, which allowed for an explosive jump. Revenue grew by an impressive 43% in the past 12 months, mainly attributed to a record $3.1 billion within the A.I. division for the quarter. For Broadcom’s second-largest segment, VMware clients were quoted to have an accelerating adoption rate over the quarter. Due to these trends, management confidently raised its 2024 guidance to $51 billion in revenue with EBITDA margins up to 61%. But here’s what matters most for investors: it is the one financial metric to keep funding future growth. Free cash flow (operating cash flow minus capital expenditures) jumped by 18% over the year, reaching $5.3 billion. With this free cash flow, Broadcom’s management rewarded shareholders with a $5.25 a share dividend for an annualized dividend of roughly 1.2%. Broadcom Stock Rides High on Bullish Market Sentiment Following this recent financial momentum, markets have a new reason to be bullish on stocks, and investors can gauge just how bullish markets have become by following two metrics. The first one is price action, which is already covered now that Broadcom stock is reaching a new all-time high after earnings. The second metric is how markets perceive the company’s future earnings today, which can be measured with the forward P/E ratio. Compared to peers like Taiwan Semiconductor Manufacturing Co. NYSE: TSM, Broadcom stock’s 25.7x forward P/E commands a premium valuation of roughly 13.3% over Taiwan’s 22.7x, meaning markets are willing to pay a higher price to have access to Broadcom’s future EPS. Markets are willing to overpay for Broadcom because of its expected EPS growth rates for the next 12 months. Analysts think Broadcom could see up to 32% EPS growth this year, compared to Taiwan Semiconductor’s projections of only 24.5%. Now that management has also boosted its revenue guidance for Broadcom this year, the stock is trading at a premium to the semiconductor industry on a price-to-sales (P/S) basis. Its 19.4x multiple is 44.7% higher than the industry’s 13.4x average multiple. Broadcom Inc. (AVGO) Price Chart for Thursday, June, 13, 2024 Broadcom Stock’s 10 to 1 Split Just Made it More Affordable for Investors If a $1,700 price tag is too high for investors to afford, management kept those with a tighter budget in mind when announcing a 10 to 1-stock split. No, this does not make Broadcom more or less valuable in the open market; it simply lowers the stock price for shareholders by adjusting the outstanding shares. The same strategy was recently used by NVIDIA in its own stock split, bringing the current price to less than $130 a share. This new stock price can attract more investors who were once on the sidelines waiting to save up to afford a significant enough position in Broadcom stock. Historically, because of these new affordable levels, split stocks tend to outperform the market in the coming months. While history may not necessarily repeat itself, the stars could line up for Broadcom stock. Before you consider Samsung Electronics, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Samsung Electronics wasn't on the list. While Samsung Electronics currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
What is a Bull Flag Pattern? Explanation and Examples 2024-06-13 13:00:00+00:00 - A bull flag is an uptrend continuation chart pattern in the stock market or an individual stock that signals that a bullish trend is likely to persist. Traders and investors use bull flags to identify a potential entry into the next leg of an uptrend. When traders use the phrase, "Wait for a pullback," they are often referring to the conditions that form a bull flag. When you enter a bull flag pattern, you are never chasing the top. Instead, you're waiting patiently for the pullback to complete and enter the breakout trigger. In this article, we'll dissect the pieces of a bull flag so you can identify them and review how to trade them. Characteristics of a Bull Flag Pattern A bull flag pattern can be seen as two rallies in a stock separated by a pullback in between. It indicates an initial buying frenzy that spikes the price of the stock, which then takes a rest as it sells off before surging again as buyers rush back into the stock. Get TEVA alerts: Sign Up Formation of the Bull Flag A bull flag is a stock chart pattern comprised of three parts: the flagpole, the flag, and the breakout. The flagpole, sometimes called an impulse wave, is a parabolic stock price rise and signals the start of a bullish trend. After the spike peaks, it forms a consolidation phase known as the flag. This pullback consists of a series of lower highs and lower lows in a parallel manner, representing the upper and lower descending trendlines. The pattern culminates in a breakout where the price exits the flag pattern and surges through the upper trendline resistance. Technical Indicators Bull flag patterns are best identified on a candlestick chart. You can also use various technical indicators to identify, visualize, and confirm them. Some popular analysis tools include price indicators like moving averages and Bollinger Bands and momentum indicators like the relative strength index (RSI), moving average convergence divergence (MACD) and stochastic oscillators. Remember that bull flag patterns are linear through all time frames. This means they can form on any time frame chart from a one-minute, five-minute, 15-minute, or 60-minute to daily, weekly, or monthly charts. Robust stock patterns, as a rule, should be linear in all time frames. Tips for Trading the Bull Flag Pattern Bull flag patterns provide opportunities to buy a long position in the underlying stock. As with all trades, it's prudent to plan your entry and exits, which include profit and stop-loss exits. You can also include a momentum indicator to confirm the breakout and momentum shift from selling to buying. The RSI is a great tool to confirm a breakout when it rises again. Entry Points To determine the entry points on a bull flag pattern, it’s important to make sure you have the proper parallel lines representing the upper descending and lower descending trendlines. The upper trendline is formed by connecting the candlestick highs starting from the peak of the flagpole. The lower trendlines are formed by connecting the lows of the candlesticks. The lines should be parallel. Many charting platforms have a drawing tool called “parallel channel” to plot these. The entry point for a bull flag pattern is when the stock breaks out through the upper descending trendline. Therefore, the entry points are above the upper descending trendline as the price exits the flag formation. Try to enter as close to the breakout level as possible to increase the potential for gains. Setting Stop-Loss and Take-Profit Levels Once properly set up, the stop-loss level can be on a new lower low or under the lower trendline price of the flag. Taking a stop on the next lower low can cut losses much earlier than taking a stop under the lower descending trendline. Profit taking levels can begin when the stock rises to the peak of the flagpole level or the high of the flagpole. After that, you can take profits incrementally utilizing various methods, including a momentum peak using the RSI or stochastic indicator or sell into the strength on a gap fill. Advantages of Trading Bull Flag Patterns Trading bull flag patterns offers several key advantages that make them a popular choice among traders. They have very distinct setups that can be rather easy to identify once you get used to spotting them. They have very distinct entry and exit levels. Most importantly, they are linear across all time frames, so they can occur frequently across stocks that trade in similar industries and sectors. When a benchmark index forms a bull flag pattern, it can trigger across many stocks simultaneously. As the saying goes, "When it rains, it pours." Predictability and Reliability The predictability and reliability of bull flag patterns are subjective, so when it comes to bull flags, the most important thing to do is react, not predict. Bull flag patterns are known to be particularly effective in bull and rising markets, offering reliable continuation signals. When they break out through the peak of the flagpole, it means the next leg of the uptrend. Risk-Reward Ratio The risk-reward ratio can vary depending on the specific trade. Ideally, you should aim for a 1:2 risk-to-reward ratio when trading a bull flag breakout, i.e. a $1 gain for every 50 cents risked on a stop-loss. This helps in identifying quality setups. However, in some cases, a 1:1 ratio may be acceptable if the probability of making the profit is 90% or higher. This assessment can be enhanced using multiple indicators and time frames for a Doppler radar effect. Common Mistakes to Avoid You can improve your bull flag trading strategy by understanding and avoiding these common mistakes: Misidentifying the Pattern Bull flags can be misidentified, especially if they are missing any of the three necessary parts of the formation, including the flagpole (parabolic price surge), the flag (parallel descending trendlines) and the breakout (price surges through the upper descending trendline). If the flagpole peaks but forms a drop and higher lows against a flat-top high, this is an ascending triangle pattern. If the flagpole peaks and then forms lower highs and higher lows, this may be a pennant pattern. While these are bullish patterns, they aren't bull flags. Ignoring Market Context Ask yourself, would it be easier to light a campfire during a rainstorm or a sunny day? Context makes a huge difference. The same applies to the stock market. Bull flag patterns work best in bull markets, so be sure to take advantage of rising markets and train yourself to spot bull flags, but also be frugal in falling markets. Example of a Bull Flag Pattern Let's take a look at a bull flag breakout in medical sector stock Teva Pharmaceutical Industries Ltd. NYSE: TEVA, a leading manufacturer of generic and biosimilar medicine. The weekly candlestick chart on TEVA illustrates a bull flag breakout. The flagpole forms from a swing low of $8.06 on October 23, 2023, rising to a peak at $14.47 on April 8, 2024. The flag forms from the $14.47 peak as it falls in parallel lower highs and lower lows, reaching a low of $12.51. The RSI fell from the overbought 78-band down to the 60-band, where it bounced with the stock. TEVA formed a breakout through the flag’s upper trendline at $12.94 on April 22, 2024. This triggered the entry long. The stop-loss at the break of the lower trendline would be under $11.83. The weekly RSI bounced back up through the 70-band as TEVA bounced back up through the $14.47 flagpole high. TEVA surged to $16.64 on its earnings release and continued to grind higher to a peak of $17.39 as the next leg continued the uptrend. Plan Your Trade and Trade Your Plan Whether you’re a trader or an investor, having a plan is always prudent before clicking the buy button. Bull flags present opportunities to enter or reenter an uptrending stock. However, it would be best to lay out the fundamental and technical reasons for entering the trade ahead of time. Don't predict the breakout; wait for it to occur and then react with your entry. Once you have entered your position, it's important to have the discipline to take profits and stop losses as they occur. Don't let a small loss turn into a larger one; stops are a pause in your trading, not the end. As a rule of thumb, it's wise to raise your stop loss levels as the stock rises. And remember: not all bull flags result in continuation; sometimes, the breakout loses momentum. Be prepared to exit the trade if it doesn't play out as expected. Level Up Your Stock Analysis with MarketBeat Traders use bull flags to identify potential entry points into the next leg of an uptrend by waiting for a pullback and then entering at the breakout trigger. MarketBeat's libraries of resources and tools can help you identify the pattern, plan entries and exits, and manage risks when trading bull flags. Before you consider Teva Pharmaceutical Industries, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Teva Pharmaceutical Industries wasn't on the list. While Teva Pharmaceutical Industries currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
We finally have some evidence that California's new $20 fast food wage is hurting business 2024-06-13 12:45:04+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 Foot traffic to McDonald's, Burger King, and In-N-Out Burger restaurants in California appeared to fall in the weeks after they raised prices to offset the state's new $20 minimum wage for workers at limited-service restaurants, new data shows. Since April, year-over-year visit trends to fast-food chains in the Golden State have lagged behind national trends, suggesting that diners could be put off by the higher menu prices, per data from Placer.ai, which tracks foot traffic analytics. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. "It's clear that the menu price increase is having an impact," R.J. Hottovy, Placer.ai's head of analytical research, wrote in a report. According to the data, the year-over-year change in the number of visits to fast-food chains in California across February and March was slightly higher than the national average. Advertisement "However, this abruptly shifted when the minimum wage increase went into effect," Hottovy wrote in the report, noting that traffic to fast-food chains in California had been weaker than the national average in seven of the eight weeks in April and May. Restaurants raised prices to offset the new wage California raised its minimum wage for workers at limited-service restaurants to $20 an hour on April 1. Related stories The legislation applies to chains with at least 60 locations nationwide and has faced fierce opposition from the fast-food industry. To offset their higher labor costs, restaurants have raised prices, turned to technology and automation like order kiosks, and considered reducing their opening hours. Some pizza restaurants have even laid off delivery workers. Advertisement Year-over-year visits to McDonald's, Burger King, and Wendy's restaurants in California trended well behind the chains' national averages in April and May, according to Placer.ai's data. Jack in the Box and In-N-Out also underperformed on foot traffic in California compared to their national averages, per the data. A Jack in the Box spokesperson previously told Business Insider that at its company-owned locations in California, it had raised menu prices by between 6% and 8% in response to the minimum wage change. In-N-Out told KTVU that it had raised prices "incrementally" on April 1. The data has to be taken with a pinch of salt, however. After all, it only measures footfall, not delivery orders or the size of in-person orders. And there could be other factors, other than menu price increases, deterring diners. Advertisement But Placer.ai's research indicates that the legislation does appear to be having at least some impact on the number of customers visiting fast-food spots in the state, especially when restaurant chains are cagey about sharing their own data showing the effects of their price hikes. The legislation was introduced to help workers cope with the state's rising living costs, though many fast-food franchisees have questioned why the wage only applies to their industry. Some fast-food executives, however, say it could make jobs in the industry more desirable and mean they have better-quality candidates. Californian residents are divided: Some acknowledge that fast food is a tough gig and support the new minimum wage, while others say it will push prices up too much. Are you a fast-food worker, franchisee, or restaurant manager in California? Email this reporter at gdean@insider.com.
The Real Reason Yum! Brands Is Outperforming McDonald's Stock 2024-06-13 11:45:00+00:00 - Some may call it corporate greed, and some may buy the media message, but the truth is that fast food isn’t cheap or quick. This CNBC short documentary covered some of the factors behind fast food price increases. However, it only covered one side of the equation, and investors should have access to the whole picture. The whole picture includes some corporate greed factors, as the issue doesn’t just lie with wage increases and commodity costs; it goes way beyond that. Investors—and consumers—should know that brands like McDonald’s Co. NYSE: MCD keep taking advantage of today’s environment to bloat the bottom line, which is also a benefit of having such a strong brand moat. Get XLY alerts: Sign Up On the other hand, the corporate greed index (proxied by net income margins) did not reach stocks like Yum! Brands Inc. NYSE: YUM, and that is why markets have been rewarding the stock over McDonald’s. Before investors find the truth behind Yum! Brands’ outperformance in detail, here’s where the fast food industry is headed. Understanding Why Fast Food Inflation Is Surpassing Overall Inflation Rates Investors were told it was because of wage increases, as remote and hybrid work outcompeted the demanding shifts behind a burger and fry station. However, because fast food margins are already pretty thin, boosting wages means these added costs must be made up somehow. This is where rising prices come to fix the issue. Over the past 12 months, fast food inflation has outpaced not only restaurant inflation but overall U.S. inflation. Readings of 5.2% stood over 3.8% for restaurants and roughly the same for national core inflation rates. Chicken and beef prices, the primary proteins used in fast food, have declined over the past 12 months. So, suppose commodity inputs can’t be blamed for price increases. What else could these companies point to to justify these accelerating price increases? The answer is corporate greed or the net profit margin rate. If net income margins rise, it cannot be due to higher input costs like commodities and wages. If item prices rise at a similar pace to input costs, then net income margins should stay the same; that’s not the case at McDonald’s. McDonald's Brand Moat: The Secret Behind Price Hikes Exceeding Cost Increases Suppose there is no corporate greed factor to this issue. In that case, net income margins should increase yearly at a rate that roughly matches inflation. McDonald’s financials show a net income margin of 24.6% in 2020. Then, a sudden jump to 32.5% in 2021 is far from a behavior expected from rising wages and food costs. McDonald's Today MCD McDonald's $253.70 -0.78 (-0.31%) 52-Week Range $245.73 ▼ $302.39 Dividend Yield 2.63% P/E Ratio 21.54 Price Target $316.15 Add to Watchlist These elevated margins remained at these levels until 2023, when the net income margin reached 33.2%. 2023 saw a roughly 8.6% jump in margins, crystalizing the possibility of corporate greed beyond any wage or commodity cost increase. Focused on these financial ratios, Wall Street analysts were happy to slap a $316.2 a share price target for McDonald’s stock, calling for a 23.7% upside from where it trades today. However much upside there may be for this stock, the market doesn’t like greed that much. How can investors tell? McDonald’s stock has fallen behind over the past 12 months compared to the consumer discretionary sector. The Consumer Discretionary Select Sector SPDR Fund NYSEARCA: XLY pushed out a 9% annual performance, while McDonald’s stock actually fell by 11.4%. Applying the same analysis to Yum! Brands will show investors a different story, one that favors Main Street over Wall Street. Here are the facts. Markets Favor Yum! Brands Stock for Maintaining Prices in Line with the Economy For Yum! Brands' financials, investors can see the company’s net income margin remains relatively steady. Before the COVID pandemic, Yum! Brands saw a net income margin of 23.1% in 2019, which didn’t jump as aggressively as McDonald’s. Yum! Brands Today YUM Yum! Brands $138.01 +0.71 (+0.52%) 52-Week Range $115.53 ▼ $143.20 Dividend Yield 1.94% P/E Ratio 24.47 Price Target $143.80 Add to Watchlist Fast forwarding to 2023, net income margins stood at 22.6% despite the wage increases and commodity input costs. As the company never pushed its luck by squeezing the situation into a profit margin expansion, analysts saw no need to reward it with a rising valuation. This is why Wall Street analysts only see a $143.8 price target for Yum! Brands, implying a mere 4.2% upside from where it trades today, far from the double-digit run proposed for McDonald’s stock. Despite the lack of Wall Street enthusiasm, markets noticed how Yum! keeps its situation realistic with the economy. Over the past 12 months, Yum! Brands stock outperformed McDonald’s stock by over 12%. If the fast food industry's current state remains the same and corporate greed stays at the helm of restaurant stocks, considerate brands like Yum! could see another winning round in the next couple of quarters. Before you consider Consumer Discretionary Select Sector SPDR Fund, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Consumer Discretionary Select Sector SPDR Fund wasn't on the list. While Consumer Discretionary Select Sector SPDR Fund currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Stock market today: S&P 500, Nasdaq soar to fresh records after inflation cools and Fed sees improving outlook 2024-06-13 05:50:00+00:00 - US stocks popped to fresh records Wednesday as investors digested a one-two punch: a cooler-than-expected reading on inflation, and the Federal Reserve holding interest rates steady but slashing projections for cuts this year. The S&P 500 (^GSPC) notched a record close for the 28th time this year, rising about 0.9% and closing above 5,400. The tech-heavy Nasdaq Composite (^IXIC) rose about 1.5%, also adding to a record close from the prior day. The Dow Jones Industrial Average (^DJI) gave up 0.1%. The Consumer Price Index (CPI) remained flat over the previous month and rose 3.3% over the prior year in May — a deceleration from April's 0.3% month-over-month increase and 3.4% annual gain in prices. Both measures beat economist expectations. On a "core" basis, which strips out the more volatile costs of food and gas, prices in May climbed 0.2% over the prior month and 3.4% over last year — cooler than April's data. Both measures also came in better than economist estimates. Later in the day, the Fed held rates steady at multi-decade highs and projected just one rate cut this year — down from three in March. Policymakers also projected core inflation would end the year at 2.8%, also an increase from March. However, the Fed in its policy statement noted "modest" recent progress on inflation. To that end, Chair Jerome Powell said the Fed "welcome[d]" Wednesday's CPI print while noting it would need to see similar future readings to remain confident in inflation's progress. "We have the ability now to approach this question carefully and that’s what we are doing," he said of rate cuts in response to a question from Yahoo Finance. He added that it is not the Fed’s plan to "wait for things to break and then try to fix them." Read more: How does the labor market affect inflation?
Chipmaker Broadcom raises annual revenue forecast, unveils stock split 2024-06-13 05:37:00+00:00 - (Reuters) -Chipmaker Broadcom raised its annual revenue forecast on Wednesday and announced a stock split, following a massive rally in the stock, with Wall Street betting heavily on the hardware that supports the generative AI technology. Shares of the Palo Alto, California-based company surged 12% in extended trading. The stock has rallied more than 30% so far this year, after almost doubling in 2023. The company will carry out a 10-for-1 forward stock split, in a bid to make its shares more affordable for retail investors. The split-adjusted trading is expected to begin on July 15. Broadcom manufactures advanced networking chips that help move around vast amount of data used by AI applications such as OpenAI's ChatGPT, making it one of the beneficiaries of businesses heavily investing in the booming technology. Broadcom recorded revenue of $3.1 billion from AI products during the second quarter. Its custom chips unit has also attracted orders from large cloud providers looking to reduce their dependence on Nvidia's pricey processors. Revenue from the semiconductor solutions segment, which houses the company's networking and custom chips, rose about 6% to $7.20 billion in the quarter, compared with the Visible Alpha estimate of $7.12 billion. Broadcom had said in March it added a third customer for its custom AI chip business. The other so-called "hyperscalers" it makes custom chips for are widely considered by analysts to be Google and Meta. Revenue from the company's infrastructure software segment more than doubled, as it expanded its software portfolio through acquisitions of leading software providers such as VMware. Broadcom now expects full-year 2024 revenue at about $51 billion, including contribution from VMware, versus its prior forecast of about $50 billion. Analysts on average estimate $50.42 billion, according to LSEG data. It also raised its annual core profit projections and beat analysts' estimates for second-quarter earnings and revenue. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)
'I'm 70 And Only Have $900 To My Name' — Caller Asks Dave Ramsey If Refinancing Mortgage And Using Equity To Build A Garage Is A Good Move 2024-06-13 05:00:00+00:00 - Sandi, a resident of the quaint town of Ocean Shores, located two hours west of Olympia, recently sought financial advice on the widely-followed Dave Ramsey Show in a video titled "I'm 70 And Only Have $900 To My Name." Her query revolved around a long-cherished dream to build a detached garage on her property. The house, which lacks a garage, is currently valued at approximately $190,000, with an outstanding mortgage of $136,000. Don't Miss: The average American couple has saved this much money for retirement — How do you compare ? Warren Buffett flipped his neighbor's $67,000 life savings into a $50 million fortune — How much is that worth today? "I would need to refinance the house and take out enough equity to do this, up to $20,000," Sandi explained to Ramsey. She then asked the burning question: "Would this be a good move? I'm retired." Sandi, who is 70 years old, disclosed her modest financial resources, revealing she has only $900 in savings. Her income primarily comes from Social Security and a teacher's retirement plan, providing about $25,000 annually. Occasionally, she supplements this with income from substitute teaching, bringing her total yearly income to around $30,000. Dave Ramsey, known for his firm stance against debt, responded with his characteristic concern and straightforward advice. "I do not want my new 70-year-old friend with $900 to go further into debt," Ramsey said emphatically. "I'd love for you to have a garage, but I love more that you've got a very low house payment that you can manage with the income that you have coming in." Despite Sandi's hopes to enhance her property and perhaps improve her quality of life, Ramsey's advice was unequivocal: avoid additional debt. He noted that taking on more debt at her stage in life, given her limited savings and fixed income, could be risky and detrimental to her financial stability. "You are a frugal, common-sense lady, and you've got a little bit of garage fever going here. Usually, a good cold shower will fix those fevers," he added with a touch of humor. Trending: This Uber-for-moving startup is quietly taking the world by storm, here’s how anyone can invest with $100. The interaction between Sandi and Ramsey highlights a common financial dilemma many retirees face: balancing the desire for home improvements and other life enhancements with the stark realities of fixed incomes and limited savings. For Sandi, the dream of a new garage must be weighed against the practical advice of staying debt-free and maintaining financial security. Story continues While not everyone can consult Ramsey directly, you can always seek guidance from your own financial advisor. These experts can provide detailed advice to ensure you are on track financially to achieving all your goals — whether they're saving for retirement, remodeling your home, or building a garage. In a world where many face similar choices, Sandi's story reminds us of the importance of careful financial planning and the value of seeking sound advice when making significant financial decisions. As Ramsey often advocates, living within one's means and avoiding unnecessary debt are crucial steps toward achieving long-term financial stability and peace of mind. Read Next: Are you rich? Here’s what Americans think you need to be considered wealthy. Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you. "ACTIVE INVESTORS' SECRET WEAPON" Supercharge Your Stock Market Game with the #1 "news & everything else" trading tool: Benzinga Pro - Click here to start Your 14-Day Trial Now! Get the latest stock analysis from Benzinga? This article 'I'm 70 And Only Have $900 To My Name' — Caller Asks Dave Ramsey If Refinancing Mortgage And Using Equity To Build A Garage Is A Good Move originally appeared on Benzinga.com © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
GameStop Calls ‘Roaring Kitty’ Claimed to Own See Trading Flurry as Shares Dive 2024-06-13 04:38:00+00:00 - (Bloomberg) -- The GameStop Corp. calls that Keith Gill — known online as ‘Roaring Kitty’ — purported to own traded huge volumes late Wednesday as the firm’s shares dove in the final stretch of trading. Most Read from Bloomberg GameStop $20 calls expiring June 21 traded 93,266 times, with most of that happening after 3:30 p.m. While the average trade on the day was 21 contracts, trades in the last period of the day were almost twice as big. In a social media post earlier this month, Gill alleged to have bought 120,000 of the contracts, with a subsequent post indicating he hadn’t yet closed his position. News of his position sent shares nearly doubling to over $45 this month, before retreating. The company capitalized on the rally to sell $2.14 billion of shares. With expiration approaching, the question has remained whether Gill would exercise the contracts to receive shares, or close out the position. While there’s no way to tell if he was involved in the flurry of trading on Wednesday, the specter of the stock’s key booster exiting some or all of his position could weigh on shares, which dipped as much as 19% intraday and closed 17% lower at $25.46. The $20 calls traded as high as $13.90 each earlier Wednesday, dropping to $6.40 at the close. That’s still above his purported average purchase price of $5.6754. (Updates with additional context starting in fourth paragraph) Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Fed Chair Powell Tempers Market Excitement: 'We Want To Gain Further Confidence' On Inflation 2024-06-13 03:50:00+00:00 - Fed Chair Powell Tempers Market Excitement: 'We Want To Gain Further Confidence' On Inflation Federal Reserve Chair Jerome Powell reiterated during his June press conference that policymakers “want to gain further confidence” on inflation before considering interest rate cuts, slightly dampening market enthusiasm fueled by a lower-than-expected inflation report released earlier Wednesday. “So far this year, the data has not given us that greater confidence. The inflation data received earlier this year were higher than expected, though more recent monthly readings have eased somewhat,” Powell stated. Powell welcomed today’s reading but warned that upcoming inflation data may be “good but not [as] great” as the last one, given unfavorable base effects from the second half of 2023 which are likely to affect annual readings. Powell somehow cooled investor excitement over today’s reading: “That’s a step in the right direction. But one reading is only one reading.” Read also: Fed Holds Rates Steady: Projections Show Fewer Rate Cuts, Higher Inflation Outlook May Inflation Report Hasn’t Altered Fed’s New Inflation Outlook Powell explained that Federal Open Market Committee (FOMC) members had the opportunity to update their inflation forecasts in the Summary of Economic Projections (SEP) following the new inflation data for May that was released this morning. However, the outcome of the SEP likely indicates that the majority of members generally left their opinions unchanged. The projected median total Personal Consumption Expenditure (PCE) inflation for this year has risen to 2.6%, an increase from 2.4% in March. Next year’s projection has also risen, now estimated at 2.3%, up from 2.2% in March. The projection for 2026 remains unchanged at 2.0%. According to Powell, conditions in the labor market have returned into better balance, about where they stood on the eve of the pandemic, “relatively tight but not overheated.” When asked whether a September rate cut is feasible given the prospect of just one rate cut in 2024 (as indicated in the SEP), Powell stressed that any decision will be data-dependent, as the Fed does not make decisions about future meetings until they have all the necessary information. Powell reiterated: “We don’t see ourselves having the confidence that would warrant loosening policy,” stressing the need to witness further positive inflation data in the coming months. The Fed Chair also hinted that an “unexpected weakening in the labor market” would also encourage the Federal Reserve to cut interest rates. “We don’t want to wait things to break and then fix them,” Powell said, indicating that the Fed will be highly attentive in monitoring the evolution of labor market data. Story continues Market Reactions Stocks slightly trimmed their session gains, while Treasury yields recovered from the sharp declines experienced earlier in the day, triggered by the May inflation report. Market-implied expectations for a September rate cut slightly eased from about 70% to 63%. Traders continue to expect two fully priced rate cuts by December 2024. The S&P 500 Index, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.8% higher at 3:30 p.m. ET, easing after hitting all-time highs earlier in the day. The tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:QQQ) was 1.1% higher, cutting gains after it was 1.9% higher at 3:15 p.m. ET. The yield on a 2-year Treasury bond traded at 4.76%, rebounding after hitting an intraday level as low as 4.67%. The yield on a 10-year Treasury bond was 4.32%, bouncing off an intraday low of 4.25%. Gold, as tracked by the SPDR Gold Trust (NYSE:GLD), erased all session gains, trading flat for the day. Read now: How May’s Inflation Slowdown Could Influence Fed’s Next Move: Insights From 6 Economists Photo: Fed "ACTIVE INVESTORS' SECRET WEAPON" Supercharge Your Stock Market Game with the #1 "news & everything else" trading tool: Benzinga Pro - Click here to start Your 14-Day Trial Now! Get the latest stock analysis from Benzinga? This article Fed Chair Powell Tempers Market Excitement: 'We Want To Gain Further Confidence' On Inflation originally appeared on Benzinga.com © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
I retired in my 30s with a net worth of $2.5 million over a decade ago. Now, I'm going back to work at 46. 2024-06-13 03:17:00+00:00 - Sam Dogen gave up financial freedom to give his family a bigger home. Courtesy of Sam Dogen Sam Dogen retired from his VP role at Credit Suisse in 2012 after over a decade of intense saving. He planned to live of the passive income from his investments in stocks and real estate. After having two children, Dogen is looking to work again to meet his family's financial needs. This as-told-to essay is based on a conversation with Sam Dogen, a 46-year-old in San Francisco. It has been edited for length and clarity. Even as a child, I knew I didn't want to be poor. I'd lived in five countries before settling in Virginia, USA, and saw the clear dichotomy between the wealthy and the poor. I wanted to understand how people made money so I could live like the rich. I studied economics at the College of William and Mary in Virginia because it was the cheapest option. After graduation, I landed a job as a financial analyst with Goldman Sachs on Wall Street in 1999. My first day in the office lasted 14 hours. The first month was tiresome and stressful, and I realized I wouldn't last another 40 years on Wall Street. I was making $40,000 a year in twice-monthly payments. If I invested 50% of my income for 20 years, I would save at least 20 years of living expenses. I could work until 42, then live on 5 to 8% of my savings, stocks, and potential real estate income each year to get to 62. I'd be set for life. It was easy to save money because I was working so much I started saving only a month after starting at Goldman Sachs. Every month, I invested half my paycheck into the S&P 500, a smattering of random tech stock, and 5% of that half into a general savings account. After being advised by someone in our HR department, I maxed out my 401(k). The fewer taxes I had to pay, the better for my savings goals, and there was a 401(k) match at my company. I was able to save so much because I was very frugal. For the first two years at Goldman Sachs, I lived in a studio apartment in Manhattan, paying $700 monthly rent. One of the perks of working past 7 p.m. was that you could go into the free cafeteria. I would eat dinner there and bring home leftovers for the next day. I also stuck to a spending budget for myself. It was a plan born out of misery. I was working 60-plus hours a week, every week. A promotion and move to San Francisco got me on the property ladder In June 2001, I was recruited to join Credit Suisse and moved to San Francisco. My base salary jumped to $85,000. Now I was making more, I saved 60% of each paycheck, putting money into long-term CDs, which are savings accounts with a high fixed interest rate that you can't withdraw money for a fixed period. Story continues In 2003, at age 26, I decided to buy a two-bedroom apartment in San Francisco using the money I had earned and saved from 1999 to 2003. My goal was to diversify my wealth away from equities into real estate. I used 80% of my savings and liquid investments to put a 25% down payment on a condo. I lived there with my then-girlfriend, who helped pay for some expenses. By 27, I was promoted to vice president at Credit Suisse, and my income jumped to six figures plus larger potential bonuses. I saved and invested around 70% of my after-tax income in 2003, 2004, and 2005. In 2005, I bought a house for $1,520,000 in San Francisco and rented my condo until I sold it in 2017. I had used up all my savings and investments to buy the house. It was a huge risk. The 2009 crash slashed my net worth but launched my blogging career I continued my saving plan until the housing and stock markets crashed in 2009. I didn't get laid off in the crash, but I did lose between 35 and 40% of my net worth in six months when stocks and real estate prices cratered. I started my blog, Financial Samurai, in 2009 to heal. The more I wrote, the better I felt because I had connected with other people going through the same fears on the road to financial independence. In October 2011, at 34, I was making a $250,000 base salary. Credit Suisse had undergone several layoffs during the global financial crisis. I spoke with my HR manager, who said more layoffs were coming. This was my exit to early retirement. I talked to my manager and asked him to consider laying me off with a severance package and deferred compensation if I stayed on to train my junior employee. By April 2012, I was laid off and received the severance package I'd negotiated. It felt scary, but also like I had won the lottery. The severance covered multiple years of my projected living expenses. Retiring at 34 I retired at 34 with a net worth was around $2.5 million after saving and investing 50 to 75% of my income for 12 years. I made around $80,000 of passive income from rent, stock dividends, and CD income a year. I continued to save 50% of my income and live on $40,000. In my final year at work, I'd been saving even more of my income, around 80%, so the adjustment to living off less wasn't huge. It was outweighed by the increased freedom I had. After I retired, I realized I didn't need as much money as I'd thought to be happy. In 2015, my wife also retired. She's three years younger than me, and we planned for her to retire by 35. Once she left, we had to pay for full healthcare benefits. It cost us around $1,680 monthly in healthcare premiums because we didn't qualify for subsidies. Having kids took up a lot of our passive income budget Once our son was born in 2017, we began spending more of our passive income. We spent even more of our passive income when our daughter was born in 2019. We now pay $2,500 monthly for unsubsidized healthcare premiums for a family of four. Preschool for each child was as much as $3,200 a month. We are spending nearly 100% of our passive income now. I believe I've failed early retirement. Despite lasting 12 years without a job, I recognize I need to save and earn more to generate more passive income. I didn't anticipate having two kids after trying so long for one. When we retired, my wife and I were looking forward to living off less than $100,000 a year in early retirement. But our annual expenses are over $250,000 a year. We chose to have two kids and to remain in expensive San Francisco. As a result, we must pay the price accordingly. I want to get into part-time tech consulting I promised to be a stay-at-home father until my children were in school full time. My second child is starting school in September, so I am considering returning to work part-time. I'd like to do part-time consulting for a tech startup in San Francisco, where there is a lot of buzz around tech and AI. In retrospect, retiring at age 34 was too early. If I could retire again, I would have tried to stick it out until age 40. But I'm not sure if my health would have cooperated or if we would have been able to have children if I did. I was very stressed at work. My challenge now is finding meaningful part-time work. I tried consulting part-time at a fintech startup earlier this year, but it became all-consuming and interfered with my duty as a father. At least I know better what to look for this fall when my daughter begins school full-time. Read the original article on Business Insider
Ryan Reynolds says his friendship with Rob McElhenney got him through the stress of shooting the new 'Deadpool': 'He's covered and cared for me in ways I can't fully comprehend' 2024-06-12 21:43:06+00:00 - Rob McElhenney helped support Ryan Reynolds through one of the most stressful times in his life. Reynolds says McElhenney took on more Wrexham responsibilities while he was working on the new "Deadpool." "I'm lucky to call him my friend," the Marvel star told Business Insider. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up 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. Advertisement Ryan Reynolds and Rob McElhenney aren't just business partners and costars on "Welcome to Wrexham," the FX docuseries that chronicles the pair buying a down-on-its-luck Welsh football club and turning it into a success. They're also good friends — and according to Reynolds, McElhenney helped him through a particularly stressful time in his life. In a recent interview for Business Insider's digital cover story on McElhenney, Reynolds reflected on how the last few years have been "the most stressful and all-consuming" of his life, between working on the third "Deadpool" movie, managing his many business ventures, and also being a cochairman of the Wrexham football club. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
What happened to the likes? X is now hiding which posts you like from other users 2024-06-12 21:35:22+00:00 - NEW YORK (AP) — Social media platform X is now hiding your likes. In an update posted on the platform formerly known as Twitter earlier this week, X’s engineering team said it would be “making Likes private for everyone to better protect your privacy.” That means that users will still be able to see their own likes, but others will not — putting an end to a feature that many had long used. The change went into effect Wednesday. As of the afternoon, the “Likes” tab appeared to only be available on users’ own profile page. But when visiting other accounts, that tab is no longer available. Users also received a pop-up notification that seemed to suggest the change would result in more user engagement. “Liking more posts will make your ‘For you’ feed better,” the message read. According to the engineering team’s update, like counts and other metrics for a user’s own posts will still show up under notifications. Posts still appear to show how many likes they have — but the author will be the only person who can see a list of those who liked it. The option to hide likes was previously just available to paying Premium subscribers. When X announced that option in September, it said users could “keep spicy likes private by hiding your likes tab.” The hidden like count is one of many changes that have come to the platform since billionaire Elon Musk purchased it for $44 billion in 2022. Beyond a new name and logo, other changes include doing away with the once-coveted blue checks for non-Premium users — and then restoring them to some. The in-app changes have seen mixed receptions on the platform. In the early days of X stripping the verification badges from prominent officials and news organizations, for example, many voiced misinformation concerns. The platform has also faced both rising user and advertiser pushback amid ongoing concerns about content moderation and hate speech on the San Francisco-based platform, which some researchers say has been on the rise under Musk.
GameStop tanks with huge volume in the call options owned by ‘Roaring Kitty’ 2024-06-12 21:32:00+00:00 - A holding page for Keith Gill, a Reddit user credited with inspiring GameStop's rally, before a YouTube livestream arranged on a laptop at the New York Stock Exchange on June 7, 2024. A sell-off in GameStop shares intensified in afternoon trading Wednesday, and that coincided with a spike in trading volume in the call options that meme stock leader "Roaring Kitty" owns. The last time Roaring Kitty, whose legal name is Keith Gill, disclosed his portfolio was Monday night, showing he still owned 120,000 call options contracts with a strike price of $20 and an expiration date of June 21. GameStop calls with the exact strike price and expiration traded a whopping 93,266 contracts Wednesday, more than nine times its 30-day average volume of 10,233 contracts. The price of these contracts dropped more than 40% during the session, while the stock plunged 16.5%. It is unclear if it was indeed Roaring Kitty behind the large volume, but options traders said he could be involved given he is such a large holder of those contracts.
Did Jerry West Inspire the N.B.A.’s Logo? ‘There Was Never Any Doubt.’ 2024-06-12 21:25:12.177000+00:00 - Shortly after the announcement that Jerry West, the Hall of Fame basketball player and executive, had died at age 86 on Wednesday, the N.B.A. emailed a statement to the news media from Adam Silver, the league’s commissioner, extolling the virtues of Mr. West as “a basketball genius” who contributed to every facet of the league over a period of more than 60 years. Just above the statement was an image of the league’s iconic logo: A rounded rectangle, blue on one side, red on the other, with a white silhouette of a player dribbling up the middle. In keeping with one of the league’s oddest traditions, no acknowledgment was made that the man dribbling at the top of the statement was, in fact, Mr. West. It had once been one of the worst kept secrets in sports. The N.B.A. hired Alan Siegel — the branding expert who created Major League Baseball’s logo — to create a logo for the league in 1969 and he based the image off a photograph of Mr. West, who was a star player for the Los Angeles Lakers at the time.
Jamie Dimon, other CEOs will attend private Trump meeting — some will skip 2024-06-12 21:21:00+00:00 - Former President Donald Trump will address some of the world’s most powerful corporate leaders on Thursday, albeit with some notable absences. In addition to Trump, President Joe Biden’s chief of staff, Jeff Zients, will speak to the CEOs in Biden’s place because the president is in Italy at the G7 meeting. A spokeswoman for the Business Roundtable said it expects “roughly” 100 of the over 200 chief executives who belong to the exclusive forum to attend its quarterly meeting in Washington on Thursday, a participation rate she described as typical. CNBC reached out to each of the more than 200 companies whose chief executives are listed online as members of the Business Roundtable to ask whether they planned to attend Thursday’s meeting. Only 17 would confirm whether or not the company’s CEO was attending. The rest — more than 180 companies — did not respond to emails over several days. So here’s what we know: Out of the 17 corporate spokespeople who replied to CNBC, four said their CEOs planned to attend: JPMorgan Chase CEO Jamie Dimon, Citigroup CEO Jane Fraser, Bank of America CEO Brian Moynihan and Edison International CEO Pedro Pizarro. Another 13 said their CEOs will not be going to see Trump and Zients speak. Blackstone Group CEO and Trump ally Steve Schwarzman, Goldman Sachs CEO David Solomon, Steelcase CEO Sara Armbruster, ExxonMobil CEO Darren Woods, Delta Air Lines CEO Ed Bastian, Morgan Stanley CEO Ted Pick and the company’s executive chairman James Gorman, and Duke Energy CEO Lynn Good are among those who will be absent from the conference, according to their company representatives. Some of these, such as Armbruster, Good and Solomon, are not attending due to scheduling conflicts and travel. BlackRock CEO Larry Fink and Microsoft CEO Satya Nadella, for instance, will reportedly be at the G7 summit in Italy. Representatives for Woods and Bastian did not reply to questions about why their chief executives aren’t attending the meeting. Representatives for Fink and Nadella did not return requests for comment. The meeting’s attendee list could read like a roster of which CEOs are willing to head to Washington to hear Trump — and which are not — just weeks after his conviction in New York on 34 felony counts of falsifying business records. Trump’s comments to the group could also offer a split-screen comparison to what Biden said in his speech to the CEOs at a March 2022 Business Roundtable meeting he attended. As the president campaigns for reelection, Biden is running on his administration’s record of aggressive antitrust enforcement and blanket bans on so-called “junk fees” that companies charge for services that don’t cost the company anything. These policies have drawn the ire of some business leaders, and left them rooting for a second Trump administration and the regulatory easing up it could bring. Behind closed doors, however, Biden has made his own efforts to court corporate America. The president has regularly met with CEOs and industry executives to discuss the U.S. economy’s post-pandemic recovery and global standing. Republican former House Speaker Kevin McCarthy, Calif., said the willingness of busy CEOs to schlep to Washington for face time with Trump was a function of the tight presidential race. “I think [CEOs] see what everybody else sees, that he’s going to win,” McCarthy said Wednesday on CNBC’s Squawk Box. For some of the CEOs planning to attend Thursday, the choice to be there represents a shift in their attitude towards the former president. Following the Jan. 6, 2021 attack on the Capitol by Trump supporters, several top executives broke sharply with Trump, either publicly or privately. Last year, Dimon told attendees at the New York Times’ DealBook conference that they should “help” Trump’s rival, former U.N. ambassador Nikki Haley, win her primary fight against Trump. If Haley were to do well, he said, voters might have “a choice on the Republican side that might be better than Trump.” The former president responded by ripping Dimon on social media, calling him an “overrated globalist.” But just two months later, Dimon had changed his tune. “Take a step back, be honest. [Trump] was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China,” Dimon said on the sidelines of the World Economic Forum in Davos. Trump has sketched out a second-term economic agenda that many economists believe could reheat inflation, a dreaded prospect for investors and consumers who have spent the past year eagerly waiting for the Federal Reserve to respond to cooling inflation by cutting interest rates. The former president has also proposed extending his first-term tax cuts past their 2025 expiration date, and imposing draconian tariffs on imports across the board, especially those coming from China. Speaking in Davos, Dimon implied that his willingness to defend some of Trump’s policies was at least partly in order to avoid a scenario where either he, or JPMorgan Chase, ends up on the bad side of a notoriously vengeful Trump. “I have to be prepared for both [Trump and Biden to win]” he said. “I will be prepared for both. We will deal with both.”
Federal Reserve now expects to cut interest rates just once in 2024 amid sticky inflation 2024-06-12 21:20:00+00:00 - The Federal Reserve on Wednesday left its benchmark interest rate unchanged and penciled in only one rate cut in 2024 as policymakers await more evidence that U.S. inflation is cooling in earnest. The central bank kept the federal funds rate — or what banks charge each other for short-term loans — in a range of 5.25% to 5.5%. It has remained at that level, the highest in 23 years, since July of 2023. The Fed has been wary of cutting rates due to stubborn inflation, which is showing some signs of easing yet remains above the central bank's 2% annual target. Earlier on Wednesday, the government said consumer prices in May rose 3.3% on an annual basis, showing some easing from April, when the pace stood a tick higher at 3.4%. In its statement, the Fed said there has been some "modest" progress of late in lowering inflation closer to its target, but added that the pace of price increases "remains elevated." Inflation-weary consumers will likely have to bear higher borrowing costs throughout 2024, with the Fed adding that it's penciling in just one rate cut this year, down from the three reductions it had earlier forecast. Fed Chairman Jerome Powell said the Consumer Price Index report released earlier Wednesday is encouraging, but noted that the central bank wants to see more evidence in coming months that inflation is on a path to return to about 2% before moving to cut the benchmark rate. "We see today's report as progress and building confidence, but we don't see ourselves as having the confidence that would warrant beginning to loosen policy at this time," Powell said in a press conference to discuss the Fed's latest outlook. When will the Fed cut rates? The Fed's rate policies affect the costs of mortgages, auto loans, credit card rates and other forms of consumer and business borrowing. The downgrade in their outlook for rate cuts would mean that such borrowing costs would likely stay higher for longer. "The fact that the Fed scaled back the number of rate cuts from three to one is going to disappoint those who were hoping for a summer rate drop," said Bright MLS chief economist Lisa Sturtevant in an email. "Mortgage rates, which have remained higher for longer, will likely remain in the high sixes until later this year." At Wednesday's press conference, Powell didn't address when the Fed might make its single projected rate cut in 2024, with the central bank scheduled to meet four more times this year in July, September, November and December. Although most forecasters rule out a July cut, some economists said the Fed could still opt to lower rates at its September meeting, although that will depend on how inflation plays out over the summer. "Overall, there's nothing here that rules out a September rate cut. It all depends on the incoming data," Capital Economics noted in a research note. Looking to 2025 Some Federal Reserve participants have pushed back their rate-cut expectations into 2025, Powell added. The Fed's Summary of Economic Projections, also released today, shows four cuts penciled in for next year, with the benchmark rate expected to dip to about 4.1% by the end of 2025. "Rate cuts that might have taken place this year, take place next year," Powell said. "There are fewer rate cuts in the median this year, but one more next year. By year-end 2025 and 2026, you are almost exactly where you would have been — it's just later." Powell on Wednesday again stated that the central bank prefers keeping rates elevated until inflation falls closer to its 2% annual target because of the risk that cutting too soon could fuel another round of price spikes. Still, the Fed's quarterly projections of future interest rate cuts are by no means fixed in time. Policymakers frequently revise their plans for rate cuts or hikes depending on how economic growth and inflation measures evolve over time, something that Powell stressed on Wednesday. "Now we have today's inflation reading, which is very much more positive," he said, adding, "One reading is just one reading ... you don't want to be too motivated by any single data point." Voters and inflation The central bank's rate policies over the next several months could also have consequences for the presidential race. Though the unemployment rate is a low 4%, hiring is robust and consumers continue to spend, many voters have taken a dour view of the economy under President Joe Biden. In large part, that's because prices remain much higher than they were before the pandemic struck in 2020. High borrowing rates impose a further financial burden. Asked whether he has a message for Americans with downbeat views on the economy, Powell responded that the steps needed to reduce inflation can be painful. "But the ultimate pain would be a long period of high inflation," he said. "It's the people at the margins of the economy who experience the worst pain from inflation." Powell added, "I don't think anyone has a definitive answer about why people are as happy about the economy as they should be. People experience what they experience." —With reporting by the Associated Press.