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Frank Shrontz, 92, Dies; Led Boeing in the Last of Its Golden Years 2024-05-22 15:30:01+00:00 - Frank Shrontz, a widely admired executive who led Boeing in the 1980s and ’90s, a decade of spectacular growth in both its bottom line and its prestige as one of the world’s premier aerospace companies — a period very different from its current crisis of public confidence — died on May 3 at an assisted living home in Seattle. He was 92. His son Craig confirmed the death. Although he spent the bulk of his career at Boeing, Mr. Shrontz, who had a law degree and an M.B.A., was an unlikely choice to lead a company that prided itself on letting engineers and not businessmen set the pace. Yet during his time at the helm — he became president in 1985, chief executive in 1986 and chairman of the board in 1988 — he led Boeing through a growth market, a recession and a thorough restructuring that produced one of the most successful commercial aircraft ever put into service, the 777.
Despite Setback, Neuralink’s First Brain-Implant Patient Stays Upbeat 2024-05-22 15:26:31+00:00 - Just four months ago, Noland Arbaugh had a circle of bone removed from his skull and hair-thin sensor tentacles slipped into his brain. A computer about the size of a small stack of quarters was placed on top and the hole was sealed. Paralyzed below the neck, Mr. Arbaugh is the first patient to take part in the clinical trial of humans testing Elon Musk’s Neuralink device, and his early progress was greeted with excitement. Working with engineers, Mr. Arbaugh, 30, trained computer programs to translate the firing of neurons in his brain into the act of moving a cursor up, down and around. His command of the cursor was soon so agile that he could challenge his stepfather at Mario Kart and play an empire-building video game late into the night. But as weeks passed, about 85 percent of the device’s tendrils slipped out of his brain. Neuralink’s staff had to retool the system to allow him to regain command of the cursor. Though he needed to learn a new method to click on something, he can still skate the cursor across the screen.
Biden administration cancels $7.7 billion in student debt for 160,500 people. Here's who qualifies. 2024-05-22 14:07:00+00:00 - Tips for managing student debt for new college graduates Tips for managing student debt for new college graduates 01:29 The White House on Wednesday said it has approved $7.7 billion of student debt cancellation for 160,500 borrowers, part of its ongoing effort to provide relief after the Supreme Court last year blocked President Joe Biden's plan for broad-based college loan forgiveness. With the latest round of forgiveness, the administration has erased a total of $167 billion in student loans for 4.75 million people, or about 1 in 10 student loan borrowers, the Department of Education said. The people who qualify for forgiveness in the latest round of debt cancellation include public servants such as teachers and law enforcement officers, as well as tens of thousands of people who have signed up for Biden's new loan repayment program, called SAVE. That program, created last year, pegs a borrower's monthly payment to their income, lowering their financial payments, and is designed to fix a pitfall of earlier repayment programs that allowed interest to snowball. "One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted," U.S. Secretary of Education Miguel Cardona said in the statement. Here's what to know about the latest round of forgiveness. Who qualifies for loan forgiveness? The Biden administration said there are three groups of borrowers who have been approved for forgiveness in the latest round. 66,900 borrowers will have $5.2 billion forgiven through the Public Service Loan Forgiveness program, which is designed to help public servants such as teachers, nurses and law enforcement officers get their debt canceled after 10 years of repayments. 54,300 borrowers will have $613 million forgiven through the SAVE plan. Another 39,200 borrowers will have $1.9 billion forgiven through adjustments to their income-driven repayment plans. These plans were sometimes mismanaged by loan servicers, which made it more difficult for some borrowers to achieve forgiveness. How will I know if I qualify for forgiveness? The Biden administration said that people who qualify under this latest round of debt cancellation will get an email about their approval. The debt cancellation will then be processed in the next few weeks, it added. Does Biden plan to offer more student loan forgiveness? Yes, because the Biden administration is working on a new effort to provide broad-based loan forgiveness through the Higher Education Act. The new plan could provide relief to about 30 million borrowers, either erasing some or all of their college loans. The Biden administration on Wednesday said the public comment period on the new regulation closed on May 17, with the Department of Education now reviewing the thousands of comments it received. "Our goal is to publish a final rule that results in delivering relief this fall," the Education Department said in the Wednesday statement. How can borrowers sign up for SAVE? The SAVE plan is open for enrollment here. The income-drive repayment plan bases monthly payments on income and family size, with some lower-income households with more family members paying little to nothing each month. For instance, a family of four with less than $50,000 in annual income would have monthly payments of $0. Another benefit to the program is that it eliminates snowballing interest. In previous plans, borrowers sometimes saw their balances grow if their monthly payments didn't cover all their interest, a financial situation called "negative amortization." That's why some borrowers may have left college with, say, $20,000 in debt but ended up with much larger balances even after years of repayment.
RNC’s ‘election integrity’ lawyer arraigned, charged with election crimes 2024-05-22 13:29:28+00:00 - It was just two months ago when the new leadership team at the Republican National Committee started making significant personnel changes, including hiring two new lawyers to oversee the party’s election-year legal efforts. One of the attorneys was longtime Republican lawyer Charlie Spies, who was hired to serve as the RNC’s chief counsel. That didn’t last: Spies was “pushed out” after failing to embrace Donald Trump’s ridiculous election conspiracy theories. The other lawyer the RNC hired in March was Christina Bobb, who was tapped to serve as the party’s senior counsel for election integrity, and who was back in the news Tuesday. My MSNBC colleague Clarissa-Jan Lim reported: Rudy Giuliani and several other defendants in the Arizona “fake electors” case have been arraigned on charges of conspiracy, fraud and forgery over an alleged scheme to overturn the results of the 2020 presidential election in Donald Trump’s favor. ... Others arraigned Tuesday include former Arizona Republican Party chair Kelli Ward and Christina Bobb. All of the criminal defendants, including Bobb, pleaded not guilty. And while time will tell what becomes of the prosecutions, it’s difficult not to marvel at the ongoing set of circumstances. As MSNBC’s Chris Hayes asked online, “What do you think the news cycle today would be like if the DNC’s head of voter mobilization got arraigned for voter fraud?” That need not be a rhetorical question. Bobb, of course, enjoys the presumption of innocence, but it continues to be no small detail that the Republican National Committee’s election integrity lawyer has been indicted on election-related charges. What’s more, by all appearances, this has not affected her status at the RNC. It’s not as if party officials learned of the criminal charges and hastily arranged her going-away party. On the contrary, Bobb stands accused of election-related crimes and she’s still the RNC’s election integrity lawyer. Charlie Spies was shown the door because he was a little too reality-based for the party, but at least for now, the importance of Bobb’s arraignment is being downplayed at the RNC. In case anyone needs a refresher, a recent Washington Post analysis made clear that Bobb’s not just another Republican lawyer. She has a robust pedigree, at least as far as Trump is concerned. Soon after the 2020 election, she began working with Giuliani and others to elevate baseless or later-debunked claims about the results in various states having been tainted by fraud. She was involved in the “audit” of votes in Arizona, working with Trump campaign official (and Georgia co-defendant) Mike Roman. She wrote a book, published in January 2023, cataloguing familiar (and baseless or debunked) criticisms of the results. It’s all there, from Antrim County to State Farm Arena to True the Vote. (The book’s forward was written by Stephen K. Bannon; Jim Hoft of the conspiracy-promoting site Gateway Pundit wrote a blurb.) That was just a sampling. Bobb also talked in 2022 about a plot to overturn the 2020 election results and possibly return Trump to the White House before the 2024 elections. A year later, the lawyer raised the possibility of someone “intentionally” having released Covid as part of a scheme to interfere with Trump’s re-election effort. A year after that, she suggested that it shouldn’t much matter whether a presidential candidate was found guilty of insurrection. Complicating matters, in 2022, a leading Justice Department official went to Mar-a-Lago with a few FBI agents in the hopes of retrieving documents Trump improperly took and refused to voluntarily give back. As part of that meeting, as regular readers might recall, it was Bobb who signed a certification statement, indicating that the former president had fully complied with a grand jury subpoena and no longer had any classified materials at his glorified country club. That statement, we now know, wasn’t true: As the FBI discovered during a search two months later, Trump still had plenty of classified documents at Mar-a-Lago. Bobb later told investigators that she did not draft the statement she signed and blamed the mess on another Trump attorney. In other words, the lawyer who will help oversee the Republican National Committee’s “election integrity” efforts is a “big lie” proponent, an election conspiracy theorist who played a prominent role in a scandal that led to one of Trump’s many felony indictments, and is now under indictment in Arizona, where she has been charged with election-related crimes. This post updates our related earlier coverage.
Wayfair Has Multiple Analysts Calling For Multi-Year Highs 2024-05-22 13:20:00+00:00 - Key Points Shares of Wayfair have been giving up their post-earnings gains over the past week. However, a strong earnings report and multiple analyst upgrades suggest this could create an entry opportunity. At least two teams of analysts see a further upside of more than 40% from current levels. 5 stocks we like better than Morgan Stanley A 5% dip during Tuesday’s session was the latest in a run of red days for Wayfair Inc NYSE: W stock. It came as it did in the days after the benchmark S&P 500 index set a fresh all-time high, which will have made it worse for investors. They’d have been forgiven for thinking at the start of May that the online furniture stock would easily outpace the market for the entire month and potentially the whole quarter, if not longer. This optimism came from the stock’s Q1 earnings report at the start of the month, which saw the headline numbers easily top analyst expectations. Get Morgan Stanley alerts: Sign Up Post-Earnings Report Wayfair Today W Wayfair $62.58 -1.66 (-2.58%) 52-Week Range $34.10 ▼ $90.71 Price Target $77.83 Add to Watchlist In the immediate aftermath, it was like a fire had been lit under the stock, which, up to that point, had been trending down after forming a bearish-looking double-top pattern. Indeed, such was the post-earnings enthusiasm that Wayfair shares swung from having lost 30% over the preceding month to gaining 55% through last week. Sure, they’re still up 25% compared to the S&P 500’s 6%, but the rapid narrowing of the gap will be a tough pill for Wayfair investors to swallow. The report showed that it was the company’s sixth straight quarter of share gain, and several analysts have spoken bullishly about its prospects in recent weeks, too. This lends itself to the theory that even with the gains it’s currently holding onto, Wayfair has a lot more to give. The softening in the stock over the past week could be viewed as some profit-taking for investors and an entry opportunity for everybody else. Bullish Upgrades Consider the update from the team at Needham & Company, which reiterated their Buy rating on Wayfair stock just last week. Or that of Argus, which on the same day upped its rating from a Hold to a Buy. The latter’s price target of $83 points to a further upside of some 30% from current levels, and were Wayfair to hit that in the coming weeks, they’d be above their post-earnings high of $76. It would also mean they’d be on the verge of setting a new high in their efforts to undo the vicious sell-off of 2021 and 2022. To do this, they’d need to trade above last August’s $90, but at least 2 heavyweight analysts expect them to do this or to come very close at least. In their bullish update earlier this month, the Piper Sandler team gave Wayfair shares a price target of $91, while Morgan Stanley gave them one right on the money at $90. Wayfair Inc. (W) Price Chart for Wednesday, May, 22, 2024 Morgan Stanley’s targeted upside of 40% coincided with their inclusion of Wayfair on a list of well-positioned but undervalued consumer stocks. Their concerns about consumer spending, in general, are driven by what they called a “triple whammy” of headwinds against consumer and retail companies: falling unit growth, falling pricing power, and a decoupling of retail stocks from the broader risk-on sentiment present in other industries. Attractive Risk/Reward Profile However, in their eyes, Wayfair offers investors an “asymmetric risk/reward skew” that makes them stand out against their peers. Considering Morgan Stanley is far from the only team of analysts calling for more upside in Wayfair, this should be more than enough to justify its inclusion on any watchlist. In terms of timing an entry, it’s worth watching closely to see when the current bout of selling runs out of steam. This could be characterized by tightening the daily trading range and a defiant rally into a close after a fresh low has been set. Before you consider Morgan Stanley, 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 Morgan Stanley wasn't on the list. While Morgan Stanley currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Long vs. Short Position: A Breakdown of Stock Positions 2024-05-22 13:14:00+00:00 - Key Points In a long position, an investor purchases and holds shares of stock they think will increase in value long-term. The investor holds and sells the shares, seeing a profit or loss corresponding to changes in value. In a short position, an investor borrows shares from their broker and sells them at the current market price. The investor then repurchases the shares at a later time and returns them to the broker, with the intention to pay a lower price later on. "Shorting" a stock creates the possibility of unlimited losses, which it is not a strategy reccomended for beginners. Many new investors are surprised to learn that it’s possible to financially benefit from both a bear and bull market. Long and short positions can be used in conjunction to benefit from multiple economic climates and introduce a unique level of opportunity to an otherwise stabilized portfolio. The primary difference between long and short positions is the direction in which the investor believes the underlying stock price will move. In a long position, the investor purchases and holds the shares, benefiting from long-term increases in share price and benefits like dividends. In a short position, an investor borrows and sells shares at the current market price, aiming to buy them back at a lower price and return them when the price per share falls. Get investing news alerts: Sign Up Long Positions: Benefits and Risks The phrases “going long” and “taking a long position” both refer to an investor’s long-term belief that a stock will rise in price. To complement this opportunistic outlook, the investor purchases shares and subsequently owns a portion of the company. If the stock rises in value, the investor can sell their shares or otherwise benefit from price increases. The most important thing to remember about long positions is that when an investor is long, they own the underlying stock. Benefits of Long Positions Long positions are usually recommended for beginner investors and those looking for a “set it and forget it” option for wealth growth. This type of position’s more simple nature and options for long-term gains make them suitable for more types of investors. Own the underlying investment: In a long position, the investor owns shares of the underlying investment, resulting in potential profits from a long-term rise in value. In a long position, the investor owns shares of the underlying investment, resulting in potential profits from a long-term rise in value. You cannot lose more than 100% of your initial investment: In a worst- case scenario, a long position can only reach a value of $0. It’s not possible to lose more money than you originally spent entering your position. case scenario, a long position can only reach a value of $0. It’s not possible to lose more money than you originally spent entering your position. Chance to profit from dividends: Because you own the underlying stock, you’ll be entitled to a portion of any dividend payments offered to investors. Risks of Long Positions Risks of Long Positions While long positions are usually considered less risky than short positions, they still come with the risk of significant market fluctuation and loss. Risk of price fluctuations: No stock can guarantee any type of positive returns. Long positions can come with significant price fluctuations and even the result of long-term loss. No stock can guarantee any type of positive returns. Long positions can come with significant price fluctuations and even the result of long-term loss. Opportunity cost: Holding a long position ties up capital that could be used for other investments or opportunities. If a better investment opportunity arises, you could miss out on the opportunity to purchase shares. Short Positions: Benefits and Risks Taking a short position allows you to benefit when a stock declines in price. Short strategies use more complicated financial instruments to access potentially unlimited gains (and losses) depending on how the underlying stock changes in value. Unlike long positions, short investors do not own the shares they trade on — part of the reason why this strategy is riskier. How Short Selling Works In the short-selling strategy, an investor begins by borrowing shares of stock through their brokerage firm. They sell the shares at the current market price, indicating their belief that the stock will decrease in value over time, and promise to return the shares at a high price. The investor then waits for the price per share to drop and later purchases the shares again at a lower price. The profit from the trade is related to the difference in price between the purchase and sale price of the shares, with higher profits being realized if the stock decreases more in value. However, understanding short selling isn’t as simple as a single calculation. To short a stock, you’ll need to apply for a margin account through your broker, which comes with additional interest fees when you borrow shares to complete your trade. You also don’t own the underlying investment during the shorting period like when you go long on a stock, meaning that you can’t access dividend and retirement account tax benefits. Benefits of Short Positions Investors who correctly predict that the market will soon decline can potentially profit from an environment in which most investors are seeing losses. High profit potential: Investors who sell their shares before the price of a stock suddenly dips can realize unlimited potential profits through short selling. Faster turnover: Unlike long positions, short positions typically close in a matter of days or weeks. This frees up your initial trading capital for future trades. Unlike long positions, short positions typically close in a matter of days or weeks. This frees up your initial trading capital for future trades. More active investment strategy: For investors who prefer to take a more direct approach to their investing strategy, shorting may be a viable option. Risks of Short Selling Attempting to time the market is never recommended, especially for beginners. The inherent nature of borrowing shorts from your broker means that losses from short selling can be sudden and significant. Potential for unlimited losses: Unlike when going long, shorting a stock can result in a loss of more money than you initially invested. You’ll always need to return shares to your broker, no matter how the price moves after purchase. Unlike when going long, shorting a stock can result in a loss of more money than you initially invested. You’ll always need to return shares to your broker, no matter how the price moves after purchase. Requires a margin account: Shorting requires approval and funding for a margin account, which not all investors may be able to access. Margin accounts also come with additional fees, as you’re essentially borrowing the shares with interest for the period before you return them to your broker. Investing Strategy: When to Go Long or Short The decision whether to take a long vs short position on a stock involves more than your opinion on its potential; the best investment strategy will also vary depending on your goals and risk tolerance as well. Market Analysis and Timing Look at the news and examine what experts are saying about the condition of the economic climate and potential future developments. If you believe that an industry or stock is likely to increase in value over time, it can make sense to go long. If you believe the stock will soon see a dip in value, short selling can create opportunities. However, it’s important not to put too much emphasis on attempting to “time the market,” as unforeseen events can quickly reverse trends and expert predictions. Investor's Risk Tolerance and Goals Your individual risk tolerance also influences the best type of investments to include in your portfolio. If you’re like most investors, you likely want to take a lower risk, long-term approach to investing for a major goal like retirement. In these circumstances, it makes the most sense to invest more conservatively, using long positions to generate wealth over time. Fewer transactions and long positions also result in less ongoing maintenance expenses on your account, which can result in additional streams of revenue. If you’re taking a short-term timeline to investing for a goal other than retirement, shorting might be a better route toward your goals. This can be especially true if you’re an experienced investor looking to short a few select stocks that you’ve traded in before. Be sure to review company leadership goals and financials before shorting to limit loss potential. Portfolio Diversification Diversification is an important concept in investing that helps limit losses in changing economic climates. To diversify, it’s important to invest in a series of asset types, companies and sectors. Short positions can be used to introduce a unique level of opportunity to an otherwise stabilized portfolio made up primarily of long-term holds. This allows you to benefit from riskier positions while also limiting losses if your predictions aren’t correct. Make Informed Investments with MarketBeat If you believe a stock’s price will rise in value, you may want to take a long position by purchasing and holding shares. Short positions can be used (with caution) to benefit from declining share prices potentially. Both types of positions can both have an important place in a well diversified portfolio, with long positions making up the majority of investments for risk tolerance reasons. Before you make your next trade, 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. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now... See The Five Stocks Here
3 High-Quality Value Stocks You Should Know 2024-05-22 12:59:00+00:00 - Key Points These are three quality stocks that every investor should keep on a watchlist. They meet the three typical requirements that mega investors look for. With great margins and moats around their products and services, Wall Street analysts are willing to give them a double-digit upside. Predictable cash flow and profits will help investors compound their capital for years. 5 stocks we like better than Carvana Investors looking for worthwhile companies to add to their portfolios should consider a few factors that make up a ‘high-quality’ stock. The company’s product or service and the relative moat around them are among these factors. Moat is a word today’s newer retail investors throw around, so here’s a better definition. A relatively recession-proof product or service with predictable demand—that is ideally growing—is needed. These products or services can be found in companies like Colgate-Palmolive NYSE: CL or H&R Block Inc. NYSE: HRB, as they are needed regardless of what the underlying economy is doing. As these are one extreme of stability and predictability, their stock price becomes boring. Get Carvana alerts: Sign Up Not swinging into the ‘unpredictable’ or ‘unstable’ side of the spectrum, investors can find the middle in stocks like Copart Inc. NASDAQ: CPRT, Ulta Beauty Inc. NASDAQ: ULTA, and even Altria Group Inc. NYSE: MO and the products or services they offer. More than that, a few other business requirements need to be met, including: Three Must-Haves for Every Value Investor Once an investor can identify a product or service that is predictable and stable in demand through the economic cycle but not too stable or predictable to wash away the investment's wealth-compounding effects, further financial ratios can be analyzed. Focusing on profitability and bringing home the bacon (returns) for investors, these are some of the few that Warren Buffett fans boast about in their books and Twitter (now X) accounts: Gross Margins: Businesses with gross margins above 20% typically achieve this by having an attractive positioning in their respective market or niche, which translates into pricing power and audience penetration. Return on Invested Capital (ROIC): This tells investors what each dollar invested into the business is expected to return to them; of course, the higher, the better, as ROIC can determine a wealth-building investment from the start. Reasonable debt: Counting with these two first requirements would amount to nothing if the business carries a heavier-than-ideal debt burden, so a relatively low percentage of debt (as a total of the balance sheet). Now that investors have a post-it note-sized guide, it is easier to stay on track when looking over the stocks on this list. Ulta’s Dip Comes First and Foremost Ulta Beauty Today ULTA Ulta Beauty $378.33 -3.50 (-0.92%) 52-Week Range $368.02 ▼ $574.76 P/E Ratio 14.52 Price Target $535.45 Add to Watchlist After coming down to only 66% of its 52-week high price , shares of Ulta Beauty could become attractive for those investors looking to buy a one-quality business at a discount today. Make-up and other skincare products are typically part of this ‘moat’ category, as their user base will probably keep making a budget for them regardless of whether the economy is booming or busting. Investors can quantify this relationship in the company’s financials, which show a gross margin rate of up to 43%. Keeping more dollars each time a sale is made enables management to reinvest this capital at high rates of return, where Ulta’s steady 25% average ROIC comes in to steal the spotlight. Last but not least, Ulta’s balance sheet shows that only 45% of total capital comprises debt. Because leases on the property are considered debts, Ulta’s physical locations (and their leases) represent most of this debt balance, with nothing to worry about. And analysts really aren’t worried, as the stock holds a consensus price target of $535.5 a share, daring it to rally by as much as 40.2% from where it trades today. Copart Stock is Good Enough for Smart Money Copart Today CPRT Copart $53.95 -0.98 (-1.78%) 52-Week Range $42.41 ▼ $58.58 P/E Ratio 37.99 Price Target $51.00 Add to Watchlist Which isn’t that smart if retail investors follow this simple formula. Up to $14.9 billion in institutional buying was reported for Copart over the past 12 months; if it’s good enough for them, it’s good enough for anyone, and here’s why. A 47.3% gross margin is characteristic of many technology companies. However, this is more of an automotive stock with a technology layer added on top, like Carvana Co. NYSE: CVNA, but better. Better how? Carvana has barely any profits, so its ROIC for the past 12 months (the only positive one) was only 1.8%. Compared to Copart’s average of 15.5% over the past 5 years, this is one quality stock to follow. The best part is that the company has barely any debt, as its balance sheet shows only 1.5% of total capital being debt. No wonder the stock recently traded up to 94% of its 52-week high. Altria’s Returns Show Saints Don’t Live on Wall Street Altria Group Today MO Altria Group $46.32 -0.01 (-0.02%) 52-Week Range $39.06 ▼ $46.60 Dividend Yield 8.46% P/E Ratio 9.69 Price Target $46.90 Add to Watchlist Shares of Altria are trading at a new 52-week high , though today’s price remains only a fraction of the stock’s all-time high of $77.8 in 2017, giving investors a bit more bullish breathing room. Investors can check these features off the list when examining the company's financials, starting with gross margins. As of the past 12 months, Altria's margins stood at 69.5%, proving the brand's pricing power and market penetration through tobacco and other non-cyclical products. Keeping more capital rotating within the business allows management to recently deliver an ROIC rate of 36.2%, with a five-year average of 32%, making Altria stock a potential wealth compound candidate. Following this thread, analysts at Jefferies Financial saw fit to set a price target of $56 a share for Altria. The stock would need to rally by 20.9% from its current level to prove these predictions correct. Before you consider Carvana, 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 Carvana wasn't on the list. While Carvana currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Jeremy Hunt’s tax cut plans face setback as government borrowing tops £20bn 2024-05-22 12:59:00+00:00 - Jeremy Hunt’s plans for pre-election tax cuts have received a setback after higher spending on benefits and lower tax receipts pushed government borrowing above £20bn last month. The Office for National Statistics (ONS) said the budget deficit – the gap between public spending and tax receipts – was £1.5bn higher than a year earlier and the fourth highest for an April since records began. Hunt is relying on an improvement in the public finances to justify tax cuts before voters go to the polls, but the latest figures show them to be in a worse state than forecast at the time of the March budget. The Office for Budget Responsibility (OBR) said April’s deficit was £1.2bn higher than it had predicted, with the overshoot caused by higher Whitehall spending, benefit increases and weaker tax revenues. Last month marked the introduction of Hunt’s second cut in national insurance contributions (NICs). The OBR said it had also revised up its estimate of the 2023-4 deficit by £0.8bn. The ONS chief economist, Grant Fitzner, said: “While central government spending and income overall both rose on this time last year, a large drop in NICs meant receipts did not grow as fast as spending. “Here, falls in expenditure on energy support were offset by increases in benefit spending from the annual uprating.” Debt as a share of national income stood at 97.9% in April and stood at its highest level since the early 1960s after rising by 2.5 percentage points over the past year. Analysts said the April public finances data further eroded Hunt’s already limited scope for tax cuts without breaking his self-imposed rule that debt should be falling as a share of national income within five years. Rob Wood, chief UK economist at Pantheon Macro, said: “The headroom to cut taxes doesn’t exist, but chancellor Hunt seems likely to go ahead anyway in a pre-election autumn statement, probably in September. “Spending demands overshooting forecasts is likely to be an ongoing theme for the public finances, with Hunt planning implausibly weak expenditure to generate his tax-cutting room.” skip past newsletter promotion Sign up to First Edition Free daily newsletter Our morning email breaks down the key stories of the day, telling you what’s happening and why it matters 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 Peter Arnold, chief economist at EY UK, said he saw April’s under performance continuing through the rest of the 2024-5 financial year. Yields on government bonds and official interest rates were likely to be higher than the assumptions used in the OBR’s March forecast, implying higher-than-expected debt servicing costs. “Some of this impact looks likely to endure to the end of the OBR’s five-year forecast horizon, cutting the already-slim headroom against the government’s main fiscal rule,” Arnold said. On Tuesday, the International Monetary Fund warned Hunt against pre-election tax cuts and pointed to a looming £30bn hole in the public finances. A Treasury spokesperson said: “We rightly protected millions of jobs during Covid and paid half of people’s energy bills after Putin’s invasion of Ukraine sent bills skyrocketing – but it wouldn’t be fair to leave future generations to pick up the tab. “That’s why we must stick to the plan to get debt falling.”
Target Misses the Mark: Shares Pulling Back to the Buy Zone 2024-05-22 12:22:00+00:00 - Key Points Target struggled in Q1 with revenue contracting versus gains for its largest competitor. Guidance is tepid and has the market resetting its outlook for the stock price. Analysts are on board with the turnaround but may cap stock gains for the foreseeable future with lowered price targets. 5 stocks we like better than Target Target’s NYSE: TGT Q1 results highlight the growing bifurcation in retail. Its results include contracting revenue driven by weakened discretionary spending and loss of market share. That is not good news because Target is the discretionary choice compared to its largest competitor, Walmart NYSE: WMT. The takeaway is that Target is on the cusp of a pivot back to growth that will be weaker than forecast and has the market resetting the outlook. Because Target is still a solid retail name with a healthy balance sheet, cash flow, and capital return, the stock is worth buying, but there may be a better time to do it. In this environment, there is a risk the market could return to the low end of its trading range, where it would present a deeper value and provide a higher yield. Get Target alerts: Sign Up Target Falls on Weak Results, Optimistic Guidance Target Today TGT Target $143.27 -12.51 (-8.03%) 52-Week Range $102.93 ▼ $181.86 Dividend Yield 3.07% P/E Ratio 16.04 Price Target $181.96 Add to Watchlist Target struggled in Q1 with revenue of $24.53 billion , contracting by 3.1% compared to Walmart’s 6% gain . The revenue is as expected but provides no bullish catalyst, and the internals are iffy. Systemwide, comps are down 3.7% on a 4.8% decline in store comp, offset by a 1.4% increase in digital. Digital sales are the only real strength in the report, rising 1.4% net on a 9% increase in same-day and 13% in drive-up services. CEO comments highlight a decline in discretionary sales offset by an increase in beauty, which is unsurprising. That trend has been in place for more than a year. The margin news is good but tainted by a decreased inventory and a YOY decline in earnings. The gross margin improved by 140 basis points but was offset by increased SG&A to leave the operating income margin up 100 bps. The result is an EPS of $2.03, down 1% compared to last year, and the consensus was missed by 2%. Guidance is a sore spot for the market. The company is guiding for 0% to 2% comp store growth this year and to pivot back to growth in the current quarter, but the current quarter guidance is weak relative to consensus, and the full year is optimistic given the Q1 results and Q2 guide. Because the company struggles in today’s critical categories, including grocery and everyday items, it will likely continue to underperform this year. Target’s Dividend is Safe and Reliable Target Dividend Payments Dividend Yield 3.07% Annual Dividend $4.40 Dividend Increase Track Record 53 Years Annualized 3-Year Dividend Growth 17.61% Dividend Payout Ratio 49.27% Next Dividend Payment Jun. 10 See Full Details Target’s performance is weak, but the cash flow is sufficient to pay the dividend and improve the balance sheet. Balance sheet highlights include a 3X increase in cash, flat assets, decreased debt, and flat liabilities that have equity up 19%. The company did not repurchase any shares during the quarter but could have, and there is still $9.7 billion available under the board's authorization. Leverage is low at less than 1X equity, including a 20% increase in equity compared to last year. Trading at 16X this year’s earnings guidance, the stock is a value compared to Walmart, and the dividend is substantial, more than double the yield, with an outlook for distribution growth. The pace of distribution growth may slow this year and next, but increases are expected to outpace inflation. Target Stock Price Falls Through Support, Lower Prices in Sight Target’s stock price fell more than 7% in pre-market trading to crash through critical support. The move has the market near $140 and the next critical support target, which may be reached soon after the opening. If the market moves below $140, a fall to $130 is likely. The $130 level is a high-probability target for solid support and will likely produce a bounce, if not a rebound. Because Target is expected to return to growth soon, lower lows are not expected, but range-bound trading is. Before you consider Target, 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 Target wasn't on the list. While Target currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Average U.S. vehicle age at record 12.6 years due to high prices of newer models 2024-05-22 12:19:00+00:00 - Detroit — Cars, trucks and SUVs in the U.S. keep getting older, hitting a record average age of 12.6 years in 2024 as people hang onto their vehicles largely because new ones cost so much. S&P Global Mobility, which tracks state vehicle registration data nationwide, said Wednesday that the average vehicle age grew about two months from last year's record. But the growth in average age is starting to slow as new vehicle sales start to recover from pandemic-related shortages of parts, including computer chips. The average increased by three months in 2023. Still, with an average U.S. new-vehicle selling price of just over $45,000 last month, many can't afford to buy new - even though prices are down more than $2,000 from the peak in December of 2022, according to J.D. Power. "It's prohibitively high for a lot of households now," said Todd Campau, aftermarket leader for S&P Global Mobility. "So I think consumers are being painted into the corner of having to keep the vehicle on the road longer." Other factors include people waiting to see if they want to buy an electric vehicle or go with a gas-electric hybrid or a gasoline vehicle. Many, he said, are worried about the charging network being built up so they can travel without worrying about running out of battery power. Also, he said, vehicles are made better these days and simply are lasting a long time. New vehicle sales in the U.S. are starting to return to pre-pandemic levels, with prices and interest rates the big influencing factors rather than illness and supply-chain problems, Compau said. He said he expects sales to hit around 16 million this year, up from 15.6 million last year and 13.9 million in 2022. As more new vehicles are sold and replace aging vehicles in the nation's fleet of 286 million passenger vehicles, the average age should stop growing and stabilize, Compau said. And unlike immediately after the pandemic, more lower-cost vehicles are being sold, which likely will bring down the average price, he said. People keeping vehicles longer is good news for the local auto repair shop. About 70% of vehicles on the road are 6 or more years old, he said, beyond manufacturer warranties. Those who are able to keep their rides for multiple years usually get the oil changed regularly and follow manufacturer maintenance schedules, Campau noted.
UK inflation falls by less than expected to 2.3%, reducing chance of June rate cut 2024-05-22 08:12:00+00:00 - UK inflation fell to 2.3% in April – its lowest level for almost three years – but the decline was smaller than expected, denting hopes of an early interest rate cut. City analysts had forecast the annual increase in the cost of goods and services would fall to 2.1%, close to the Bank of England’s 2% target. Markets responded by trimming their predictions that the Bank would cut rates from their current 5.25% level as early as next month, with forecasts of a reduction in August also scaled back. Last month’s 2.3% fall in the consumer prices index (CPI), down from 3.2% in March, was driven by easing energy and food costs. The last time inflation was lower was in July 2021. Electricity and gas prices fell over the last year by 27%, the biggest drop on record, and food and soft drink prices increased by 2.9% annually, the lowest rise since November 2021. Illustrating the pressure on household budgets and the reluctance to buy big-ticket items, furniture retailers cut prices by 0.9% between March and April, and the cost of all goods dropped by 0.8% month on month. Annual services inflation, which mainly reflects the costs companies charge each other, was 5.9%, barely down from March’s 6%. A sharp rise in property rents over the last year kept a measure of inflation that includes housing costs much higher than the headline CPI. Higher mortgage costs were another factor that meant the ONS’s alternative consumer prices index including housing (CPIH) rose by 3% year on year. The Office for National Statistics (ONS) said inflation was prevented from slowing more last month by a rise in petrol and diesel prices, although the price of a barrel of Brent crude has steadied recently at about $83 (£65). Yael Selfin, the chief economist at KPMG UK, said the likelihood of an interest rate cut as soon as next month had receded. “Falling inflation closes in on the Bank of England’s target but may not be enough to sway an early rate cut,” she said. Paula Bejarano Carbo, an economist at the National Institute of Economic and Social Research, said core inflation – which strips out food and energy costs – remained higher than its historical average at 3.9% and this would need to fall before the central bank’s monetary policy committee was comfortable cutting rates. “Paired with last week’s strong wage growth data, we believe that elevated services inflation will remain an upwards risk to inflationary pressures in the second half of this year. As a result, the MPC may exert caution at its upcoming meeting and hold interest rates, despite today’s encouraging fall in the headline rate.” Rishi Sunak said April’s CPI figure marked “a major moment for the economy, with inflation back to normal”. The prime minister said: “This is proof that the plan is working and that the difficult decisions we have taken are paying off.” The shadow chancellor, Rachel Reeves, said although inflation had fallen, now was “not the time for Conservative ministers to be popping champagne corks”. She posted on X: “Prices have soared, mortgages bills have risen and taxes are at a 70-year high. Only Labour can be trusted to protect and improve family finances.” 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 Inflation was 2.4% in the 20-member eurozone in April, the same as the previous month. Separate ONS figures also released on Wednesday showed the public finances suffered a larger-than-expected rise in April. The high cost of financing the UK’s government debt played a large part in pushing the monthly deficit to £20.5bn, the fourth highest April borrowing since monthly records began in 1993 and £1.9bn more than official forecasts. Debt payments decreased by £1.7bn to £8.6bn but remained at a higher level than the Office for Budget Responsibility (OBR) had pencilled in. Some analysts said the figures showed the government’s finances were being squeezed and ruled out tax cuts by the chancellor before the general election. Martin Beck, an economic adviser to the EY Item Club, said: “The new fiscal year got off to a disappointing start for the UK’s public finances, with borrowing coming in above the OBR forecast. The effect on debt servicing costs of higher bank rate and gilt yields than the OBR assumed in its budget forecast mean that this under-performance is likely to continue for the rest of the financial year. “It’s unlikely that OBR forecast revisions would offer the government scope for another tax-cutting fiscal event before the next general election.”
Firm building QatarEnergy-Exxon LNG plant in Texas files for bankruptcy 2024-05-22 07:46:00+00:00 - By Curtis Williams HOUSTON (Reuters) -The lead contractor building a Texas liquefied natural gas (LNG) plant for QatarEnergy and Exxon Mobil on Tuesday filed for Chapter 11 bankruptcy protection, citing challenges at the project. Zachry Holdings, which held the lion's share of the $10 billion construction project called Golden Pass LNG, said it was pursuing a "structured exit." Exxon said it would review construction timing and provide an update in the future. Golden Pass LNG is being built at the site of a former gas-import terminal that has been converted to process natural gas for LNG exports. It is one of two large U.S. LNG terminals whose startup will significantly expand exports in the next 12 months. "We, along with the other stakeholders, are considering all available options to implement a smooth transition and minimize any impacts," an Exxon spokesperson said. "We plan to continue to fully support Golden Pass LNG through completion." Exxon, which owns a 30% stake in the project, earlier this year said it expected first LNG production in the first half of 2025. "Because we have been unable to find a path forward, we have been forced to take action to protect our business," John Zachry, CEO of the San Antonio, Texas-based company, said in a statement on Tuesday. Zachry Holdings said it faced cost challenges over a change order and billings schedule, and it engaged in negotiations with Golden Pass LNG for additional funding without success, according to its filing in U.S. Bankruptcy Court for the Southern District of Texas. Zachry's share of the project was valued at $5.8 billion. Prior to April 2024, Zachry said it was incurring weekly expenses of $30 million to $40 million for payroll, vendor payments, equipment and other costs, but was receiving approximately $70 million per month from Golden Pass LNG. “In March of this year, Golden Pass began direct-paying vendors, and clawed back much of those funds from advance progress payments due to Zachry,” the filing said. Rival LNG developer Venture Global LNG "does not anticipate any material impacts" on work at its Plaquemines LNG export facility in Louisiana as a result of the Zachry bankruptcy filing, a spokesperson said. Its plant is being constructed by a KBR and Zachry joint venture. According to court filings, Golden Pass on May 8 notified Zachry of default of its engineering, procurement and construction contract, citing, among other factors, Zachry’s inability to pay subcontractors and vendors promptly, the court filing showed. Story continues Zachry that same day received a notice of default from another Golden Pass contractor, Chiyoda International, the company said. Unable to reach an agreement with Golden Pass, Zachry said it had no choice but to file for Chapter 11 protection. Golden Pass LNG had warned earlier this month of possible impacts on construction of the first three trains of the project, which was designed to produce up to 18 million metric tons per annum of LNG. The project is one of two large LNG export plants that had been expected to expand U.S. exports in the next 12 months. The United States is the largest exporter of LNG. (Reporting by Curtis Williams and Sabrina Valle in Houston and Dietrich Knauth in New York; Editing by Chizu Nomiyama, Gary McWilliams, Matthew Lewis and Mark Porter)
Stock market today: Wall Street retreats from its records as worries about high interest rates weigh 2024-05-22 07:01:02+00:00 - NEW YORK (AP) — U.S. stock indexes retreated from their records Wednesday as concerns about high interest rates weighed on the market. The S&P 500 fell 14.40 points, or 0.3%, to 5,307.01, a day after setting its latest all-time high. The Dow Jones Industrial Average sank 201.95, or 0.5%, to 39,671.04, and the Nasdaq composite slipped 31.08, or 0.2%, to 16,801.54 after after setting its latest record. Indexes had been close to flat early in the day, but they slunk lower after the Federal Reserve released the minutes of its last policy meeting. Discouragingly for markets, the minutes showed Fed officials suggesting it “would likely take longer than previously thought” to get inflation fully under control following disappointingly high readings at the start of the year. And even though Fed Chair Jerome Powell said after that meeting that the Federal Reserve is more likely to cut rates than to hike them, the minutes said “various participants” were willing to raise rates if inflation worsens. That cut at the rekindled hopes on Wall Street that the Fed will be able to cut its main interest rate at least once this year. One of the market’s worst losses came from Target, which tumbled 8% after the retailer reported profit for the latest quarter that fell short of analysts’ expectations. It also gave forecasted ranges for upcoming profit where the midpoints fell below analysts’ estimates, as it said customers are holding back on purchases of non-essentials. Earlier this week, Target said it was cutting prices on thousands of everyday basics to entice customers struggling with still-high inflation. Lululemon Athletica sank 7.2% after it said its chief product officer, Sun Choe, is leaving the company this month to “pursue another opportunity.” The company announced a new organizational structure where it won’t replace the role of chief product officer. They helped to counter a 17.6% leap for Petco Health & Wellness, which reported results and revenue for the latest quarter that were better than analysts feared. TJX, the off-price retailer, rose 3.5% after topping profit expectations. The company behind TJ Maxx and Marshalls also raised its forecast for earnings per share over the full year, saying its prices are helping to attract customers. In the bond market, the yield on the 10-year Treasury rose to 4.42% from 4.41% late Tuesday. The two-year yield, which moves more closely with expectations for the Fed, rose a bit more. It climbed to 4.87% from 4.84%. Helping to keep the move in yields in check was the fact that the harsh talk in the minutes from the Fed’s latest meeting was from May 1. That was before some reports showed softening in inflation and certain parts of the U.S economy, which may have changed the minds of some Fed officials. In recent speeches since that May 1 meeting, some Fed officials have indeed called those recent reports encouraging. But they have also said they still need to see months more of improving data before they could cut the federal funds rate, which is sitting at its highest level in more than 20 years. The Fed is trying to pull off a tightrope walk where it slows the economy just enough through high interest rates to get inflation under control but not so much that it causes a bad recession. High rates have made everything from credit-card bills to auto-loan payments more expensive. Mortgage rates are also high, and a report on Wednesday showed sales of previously occupied homes were weaker last month than economists expected. Central banks around the world seem eager to cut interest rates, but “they may not go far” given how well economies are doing and how high inflation still is, according to Athanasios Vamvakidis, a strategist at Bank of America. He said in a BofA Global Research report that he expects only shallow cuts to interest rates, which may also come later than financial markets seem to be forecasting. In stock markets abroad, indexes were modestly lower across much of Europe and Asia. London’s FTSE 100 sank 0.5% after the U.K. Office for National Statistics announced a stronger-than-expected inflation reading that hurt hopes for a rate cut in June. Tokyo’s Nikkei 225 fell 0.8% after Japan reported its trade deficit rose last month. ___ AP Writers Matt Ott and Zimo Zhong contributed.
Stock market today: Nasdaq, S&P pop to records as Wall Street waits for Nvidia earnings 2024-05-22 05:51:00+00:00 - US stocks closed in a sea of green on Tuesday with record highs for both the tech-heavy Nasdaq Composite (^IXIC) and benchmark S&P 500 (^GSPC). The positive moves come as investors await heavily anticipated earnings results from Nvidia (NVDA), set for release after the bell on Wednesday. The Nasdaq recovered from earlier session lows to rise about 0.2%, capping off Tuesday's trading day with another consecutive record close. The S&P 500 (^GSPC), which also reached a record, rose about 0.3% while the Dow Jones Industrial Average (^DJI) climbed roughly 0.2%. Nvidia's upcoming report is expected to spur a big move in its share price and jumpstart stocks more broadly. In the meantime, a wave of quarterly reports from retailers offered some insights into the state of the consumer and the health of the economy. Lowe's (LOW) sales dropped less than expected as cash-strapped Americans continued to spend on small repairs, while Macy's (M) shares gained after the department store chain's earnings beat a low bar. Investors have also listened closely to speeches from Federal Reserve officials as a dearth of economic releases starves the rate-cut debate of fuel. Fed governor Chris Waller said Tuesday he needs to see several more months of favorable inflation data before lowering rates, echoing the higher-for-longer policy stance of other central bank leaders in recent weeks. Read more: How does the labor market affect inflation?
Tesla stock gains on electric Semi truck progress, updates 2024-05-22 04:28:00+00:00 - Shares of Tesla (TSLA) are trading higher ahead of Tuesday's market close, propelled by new details on the EV company's highly anticipated electric Semi truck project. First unveiled in 2017, the automaker has now set its sights on delivering these cutting-edge vehicles by 2026. Yahoo Finance's Pras Subramanian breaks down the details, discussing features within the vehicles and the truck's intended use cases. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Angel Smith Video Transcript Well, let us stick with electric vehicles and talk about Tesla shares of that company rising after it provided an update on its long awaited electric semi truck project or I should say semi truck project. Here are the details of Yahoo Finance Pro Subman semi for truck, semi, four conductors. I think I've heard both. Ok. Well, in any case, we're talking about tractor trailers is what I what I always called them tractor. This is a weird term. A tractor trailer there, understood the whole, the whole concept. But anyway, yes, update on the long awaited semi, semi, semi semi truck. Yes. Uh the car that a truck, sorry that came out that was debuted in 2017 still is in the pilot testing of that vehicle right now. So basically uh uh the project, the project manager was speaking at the Act Expos or the alternative Clean Transportation Expo. Someone how they're on track to deliver these by early 2026. Um There's a new facility they're building attached to G in Nevada. When that gets fully ramped up, they'll be potentially producing 50,000 units a year, which was I think kind of a uh more than what people thought they would be kind of produced for this, such a big, big vehicle. But anyway, uh, early kind of specs here, the 500 mile range version, the long range one. we on 23,000 and the, the kind of the 300 mile kind of intermediate uh length of truck, uh range truck is 20,000. Sorry, a lot of numbers here. So, yes. Uh I think some, some bullet is there for that vehicle to tell us about how they have 3.5 million test miles done both with Pepsi co their original test partner and also they're using the truck to deliver batteries from their uh battery facility in Nevada to the Fremont factory. So a lot going on there trying to ramp up this truck, it's working. It's, it seems to be pretty efficient. They, they're saying, um, they can do pull a full 82,000 load. Uh, the beginning runs of 250 to 500 miles, uh, based on how the elevation changes, things like that. So, uh, pretty kind of efficient there for this long haul, uh, sort of uh, truck real quickly. Story continues When are we going to see this on the road? 2026 when they say early 2026 1st, real beyond production or beyond pilot spec models. So we'll be looking for them. All right. Thanks for us. Appreciate it.
Nvidia earnings, revenue expected to surge first quarter as AI trade faces latest test 2024-05-22 03:41:00+00:00 - Nvidia (NVDA) is set to report its first quarter earnings after the bell on Wednesday in what will be one of the most consequential reports for investors this year. Wall Street is expecting Nvidia to report revenue and profits that rose more than 200% and 400%, respectively, from the prior-year period as the company experiences a surge in demand for its chips amid the AI boom. Analysts expect adjusted earnings per share to total $5.65 on revenue of $24.69 billion, according to data from Bloomberg. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year. Nvidia stock has been on a tear over the last year, rising over 200%. The stock has risen nearly 700% since the stock market lows in October 2022. Shares closed at a record high on Tuesday. The vast majority of Nvidia's revenue will come from its Data Center business, which is set to pull in $21 billion, up from $4.28 billion in Q1 last year. The company’s Gaming division, formerly its largest segment, is expected to see revenue of $3.5 billion, up from $2.24 billion in the same quarter last year. Ahead of Nvidia’s earnings announcement, Stifel analyst Ruben Roy raised his price target on the company’s share price to $1,085 from $910, saying that he anticipates Nvidia will once again beat expectations on the top and bottom lines and raise its guidance for the next quarter. Demand for its chips from hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), Microsoft (MSFT), and others has boosted the company's results, making Wednesday's report a key check on the industry's appetite for further AI investment. And as Yahoo Finance's Josh Schafer reported Tuesday, the AI trade has moved beyond the borders of tech, with investors looking to energy and power companies as derivative plays on the AI boom. But Roy, like analysts at BofA Global Research and Loop Capital, says there remain near-term concerns about how much the transition from Nvidia’s current Hopper line of AI chips to its Blackwell line will impact overall sales. The fear is that customers will put some of their orders for Hopper chips on hold while they wait for Nvidia to roll out its more powerful Blackwell products. The Financial Times reported Tuesday that Amazon had paused some orders from Nvidia as it waits for more advanced Blackwell chips to be made available. Loop Capital’s Ananda Baruah argued it's possible Nvidia won't let companies put their Hopper orders on hold without losing their place in line to purchase Blackwell chips. If enough customers put their orders on hold in favor of Blackwell chips, Nvidia could see a temporary dip in quarter-over-quarter sales. Story continues NVIDIA's CEO Jensen Huang displays products onstage during the annual Nvidia GTC Artificial Intelligence Conference at SAP Center in San Jose, Calif., on March 18, 2024. (JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images) Nvidia is also contending with the threat of its customers building their own in-house AI chips. So far Amazon, Google, and Microsoft are using — or are working toward — their own AI chips that provide better power efficiency than Nvidia’s offerings. That doesn’t mean those companies will completely abandon Nvidia’s chips, though the push to their own products could cut into the chip giant’s market share. AMD (AMD) and Intel (INTC) are gaining steam when it comes to their own AI chips. On Tuesday, Microsoft announced during its Build conference that it would begin offering AMD’s MI300X chips for developers looking to train and deploy AI models. The Windows maker also made sure, however, to point out that it is using Nvidia’s chips as well. Subscribe to the Yahoo Finance Tech newsletter. (Yahoo Finance) Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley. Click here for the latest technology news that will impact the stock market. Read the latest financial and business news from Yahoo Finance
Why Bloom Energy Surged Today 2024-05-22 03:13:00+00:00 - Shares of fuel cell manufacturer Bloom Energy (NYSE: BE) were on the rise today, up 10.1% as of 1 p.m. ET. There wasn't too much company-specific news today. However, Bloom was highlighted as a top pick in the past weekend's edition of Barron's Magazine as a stock poised to benefit from increasing energy demand resulting from the AI data center buildout. Now potentially regarded as an esteemed "AI beneficiary," Bloom's stock is rising days after the article and one day before AI chip juggernaut Nvidia's earnings report tomorrow. Bloom's innovative fuel cell tech can help fix the missing energy problem In last weekend's Barron's, Stephen Byrd, the head of clean technology research at Morgan Stanley, highlighted Bloom as one of his top five energy stocks to benefit from the AI data center buildout. The Barron's roundtable was focused on the increased demands for electricity from energy-hungry AI data centers. As a result, electricity demand in the U.S. is expected to accelerate from flattish, which it has been over the past few decades, to around 2% growth, given the needs of AI data centers and the electrification of the auto industry. Given that U.S. electricity generation is somewhat constrained both by the amount of installed clean energy capacity as well as the slow buildout of the next-generation electrical grid, certain companies that can deliver clean power from existing sources or grid-independent sources are therefore poised to benefit. Byrd highlighted Bloom's potential to ink large contracts with data center operators seeking grid-independent power sources. Bloom's fuel cell-based energy servers, about the size of refrigerators, have unique technology that can transform fuel into energy without combustion, using either hydrogen or biogas for zero-carbon emissions, or natural gas, which has a 50% lower carbon emission profile with Bloom's servers relative to grid-sourced natural gas. But Bloom has in fact already inked partnerships with several high-profile cloud data center operators and large technology companies. Its most recent deal was a power purchase agreement with Intel, announced on May 9, which will result in "the single largest fuel cell-powered high-performance computing data center in Silicon Valley." Is Bloom a buy? Bloom may not seem like a star grower; last quarter, revenue actually declined by 14.5%, and the company had an adjusted (non-GAAP) operating loss of $30.7 million. However, its sales can be lumpy, given the nature of its hardware business. Even on the back of a "weak" quarter, management still forecast revenue between $1.4 billion and $1.6 billion this year, which would be an increase over 2023's $1.334 billion. Moreover, the company sees adjusted operating income flipping to positive $75 million to $100 million in 2024 as well. Story continues That doesn't make Bloom a cheap stock, as it still has a $3.3 billion market cap after today's surge. However, the company's technology appears to be catching on with AI companies. That makes it a growth stock to watch. Should you invest $1,000 in Bloom Energy right now? Before you buy stock in Bloom Energy, 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 Bloom Energy 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 $580,722!* 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 May 13, 2024 Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy. Why Bloom Energy Surged Today was originally published by The Motley Fool
3 High-Yield Stocks That Raised Dividends During The Last Recession And Every Year Since 2024-05-22 01:56:00+00:00 - 3 High-Yield Stocks That Raised Dividends During The Last Recession And Every Year Since Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. When searching for reliable dividend-paying stocks, it’s important to choose companies that have demonstrated their ability to not only maintain but also grow dividend payments, even during tough economic times. Highlighted below are three dividend-paying companies that continued to increase their dividends through the 2008 financial crisis and have increased them every year since. Be sure to read to the end to check out two other high-yield opportunities with yields as high as 13%. Realty Income Corp (NYSE:O) Realty Income, an S&P 500 company, is a real estate partner to the world’s leading companies. Founded in 1969, the company invests in diversified commercial real estate and has a portfolio of over 15,450 properties across the U.S., the U.K., and six other countries in Europe. Known as “The Monthly Dividend Company,” Realty Income’s mission is to deliver stockholders dependable monthly dividends that grow over time. During the last recession, Realty Income increased its dividends four times in 2007, five times in 2008 and four more times in 2009. The company’s most recent dividend increase was announced last week, increasing from $0.2570 per share to $0.2625 per share. With a current dividend yield of 5.73% and a 5-year dividend growth rate (CAGR) of 3.55%, Realty Income has increased its dividend for 26 consecutive years. Enterprise Products Partners LP (NYSE:EPD) Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products. Between 2005 and 2019, Enterprise Products Partners increased its dividend every quarter, even throughout the 2008 financial crisis. The company raised its dividend from $0.50 per share to $0.515 per share in the first quarter of 2024. With a current dividend yield of 7.19% and a 5-year dividend growth rate (CAGR) of 3.19%, Enterprise Products Partners has increased its dividend for 25 consecutive years. NNN REIT Inc. (NYSE:NNN) NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN REIT increased its quarterly dividend in 2007 and 2008. While the quarterly dividend remained flat in 2009, its annual payout was still higher than in 2008. The company began increasing at least once per year again in 2010 and has continued to do so since. With a current dividend yield of 5.36% and a 5-year dividend growth rate (CAGR) of 2.47%, NNN REIT has increased its dividend for 34 consecutive years. Story continues Other High-Yield Opportunities In addition to the three stocks mentioned above, investors seeking high-yield opportunities may also consider the following income opportunities for consistent payouts through all economic cycles. Ascent Income Fund The Ascent Income Fund targets stable income from senior commercial real estate debt positions, offering a compelling yield backed by real assets. With a historical distribution yield of 12.1% and investments in loans that hold full payment priority, the fund provides investors with an attractive income opportunity. Redemption options are available starting one year after the initial investment, and the fund targets 11-13% net annualized returns, with distributions paid quarterly or automatically reinvested. The fund is offered by EquityMultiple, and new users to the platform can invest in the fund with a reduced minimum of $5,000. Click here to learn more about the Ascent Income Fund. Basecamp Alpine Notes Basecamp Alpine Notes, offered by EquityMultiple, provide investors with a powerful short-term cash management tool, offering a target APY of 9.00% over a 3-month term and a minimum investment of $1,000. These notes offer high liquidity with the shortest terms of any EquityMultiple investment, and the company charges no fees on any Alpine Note investment. Since its inception, the Alpine Note has been EquityMultiple’s most popular offering, with over 79% of investors choosing to reinvest in Alpine Notes. Click here to learn more about Basecamp Alpine Notes. When selecting dividend stocks or high-yield investment opportunities, it’s crucial to conduct thorough research and consider factors such as the company’s financial health, growth prospects and the sustainability of their dividend payouts. By investing in companies with a proven track record of increasing dividends, even during challenging economic times, investors can potentially build a more resilient and income-generating portfolio. This article 3 High-Yield Stocks That Raised Dividends During The Last Recession And Every Year Since originally appeared on Benzinga.com
New college grads face a cooling job market. Here's where the jobs are. 2024-05-21 22:06:00+00:00 - What college graduates face as they enter the workforce What college graduates face as they enter the workforce 04:06 After earning their college degrees this month, new graduates are understandably eager to land their first job and start making their education pay off. But that could pose more of a challenge this year than in 2023. Hiring for freshly minted college grads is forecast to decline 6% from a year earlier, according to a recent survey of more than 200 employers from the National Association of Colleges and Employers, a group representing college career services employees. Data from payroll services provider Gusto also shows that the new grad hiring rate — the share of recent graduates who are hired in a given month — is now about 6%, down from a recent peak of 10% in 2021. Still, the hiring rate is about level from a year earlier, with Gusto principal economist Liz Wilke telling CBS MoneyWatch that the job market for new grads is relatively stable. 40% underemployed Securing that first job out of college may be a rite of passage, but it can also be nerve-racking for young adults who need to pay for groceries and make the rent. And about 4 in 10 recent college grads are currently "underemployed," meaning they're working in a job that doesn't require a college degree, according to data from the Federal Reserve Bank of St. Louis. "We know that the first job out of college is incredibly important when setting the course for the rest of a person's career," Wilke said. "However, not every college graduate is going to enter a booming job market, and some are not afforded the option of being picky." According to Gusto, the top five industries currently hiring new college grads are legal, nonprofits, arts and entertainment, health care, and social assistance and construction. "New grads with skills that are applicable to these industries are likely to see increased interest in their resumes," Wilke noted. Some industries are planning to cut back on the number of new hires from the class of 2024, the National Association of Colleges and Employers found in its survey. Among them are computer and electronics manufacturers, with those businesses projecting a decline of about 12% in hires of new grads, while financial firms expect an almost 15% drop, the group found. Technology companies have slashed thousands of jobs in recent months as they shift toward artificial intelligence. Yet new grads who know how to work with artificial intelligence may have an edge, Wilke said. "AI skills are something [businesses] are seeking from this younger cohort of workers," she added. "Business owners believe that since this younger generation has 'come of age' with this technology, that they are better equipped to figure out how to best put it into practice." Employers say the modest pullback in hiring comes after an extremely tight labor market in the years after the pandemic, when workers were harder to come by and they weren't seeing as many resumes. "It's easier now than it was last year," Chris Jones, the founder of tutoring company Planting Seeds Academic Solutions, which is now in the process of hiring about 40 workers, many of them recent college grads, for its summer camps. "We're getting 50 to 100 applicants per opening," compared with 20 to 30 applicants in 2021 to 2022, a time when he said many applicants didn't want to work in person. Samuel Clark, the CEO of Broadway Crew, which provides staffing and support for Broadway shows, said he thinks hiring has returned to a more "normal" pace. "A year ago it was really, really difficult, I was pulling my hair out and paying them an absurd amount of money to make sure they'd be there on time," Clark told CBS MoneyWatch. "Now the power dynamic is coming back in the middle." For new college grads who are looking for work, Clark said his advice is to hustle, but he noted that landing that first job can be difficult. "Sometimes it's really hard and you have to take the slings and arrows," he added. What new grads want in a job As for what new grads want in their first jobs, they're looking for hybrid roles with some in-person and some remote days, Vicki Salemi, a career expert at job site Monster, told CBS New York. And they're very interested in learning about a job's salary, with particular fears of ending up underemployed, she added. "They want to talk about salary on the job interview," Salemi said. "They might not even pursue the job if salary isn't discussed in the interview." That's especially important in high-cost cities like New York, which Gusto found is the top metro area for hiring the class of 2024, representing 10% of all new grad hires. The average new grad's starting salary in New York is $64,134, which equates to only $28,500 in other cities when adjusted for the cost of living, Gusto found. "Our report shows New York as being the most popular city for new grads, but last on the list in terms of affordability," Wilke said. "People this age should consider what cities they see themselves ending up in and jobs those cities have to offer."
Nestle to launch food products that cater to Wegovy and Ozempic users 2024-05-21 22:01:00+00:00 - Nestle is launching a new line of high-fiber, protein-packed foods directed at the growing number of Americans on Wegovy or Ozempic, and others trying to lose weight. Called Vital Pursuit foods, the products are "well-suited to support a balanced diet for anyone on a weight management journey" the Swiss food and beverage maker said Tuesday, but "are portion-aligned" for consumers taking GLP-1 medications, also known as semaglutides. Twelve newly designed food items — including whole grain bowls, sandwich melts and pizzas — will hit select stores nationwide toward the end of this year, Nestle added. "We know that every consumer on a health journey has individualized needs and considerations, and having options to support those needs will continue to play an important role," Tom Moe, president of Nestle USA Meals Division, said in a statement. Nestle's move comes as GLP-1 medications are becoming more widely used for weight management and other newly discovered potential health benefits. Ozempic, Mounjaro, Wegovy and Zepbound were originally prescribed for managing Type 2 diabetes because they help regulate blood sugar. But the medications also send a signal to the brain that the stomach is full, which leads patients to eat less than they normally would have. The drugs' effectiveness in reducing appetite has generated concern from food retailers including Conagra and Nestle, who fear the medications could take a bite out of their profits. About 9 million prescriptions were written for GLP-1 medications in the fourth quarter of 2022, according to analytics firm Trilliant Health. GLP-1 users are expected to reach 30 million by 2030, according to JPMorgan, which predicts the semaglutide market will exceed $100 billion that same year. Morgan Stanley Research analysts estimate in a recent report that 24 million people, or 7% of the U.S. population, will be using the drugs by 2035. As more Americans take GLP-1 medications, Nestle executives "see an opportunity to serve those consumers," Nestle North America CEO Steve Presley said in a statement Tuesday. Other food producers see the same opportunity. Vegan meal delivery service Daily Harvest launched a GLP-1 medication friendly line of 15 foods in January that's $20 a day for a five-day meal plan. Abbott Laboratories also announced a protein-laden drink that can be used by consumers taking GLP-1. Nestle, the parent company of DiGiorno pizza and Stouffer's frozen meals, said it will price each food item at $4.99 but retailers may change that figure. A new line of foods appears to be one of several steps Nestle is taking to capture the weight loss consumer. Nestle CEO Mark Schneider said in an earnings briefing last year that the company is developing supplements to help people on GLP-1 medications get the vitamins and nutrients they might need when consuming fewer calories.