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Tesla Stock Bottoms: Factors to Consider Before Buying the Bounce 2024-04-24 12:45:00+00:00 - Key Points Tesla struggled in Q1 and isn't expecting improvement until it launches new products next year. The long-awaited Model 2 is back in the picture and may come as soon as early 2025. Fingers crossed. Analysts' reactions are mixed, but the net result is a downward movement in the consensus price target for this Hold-rated stock. 5 stocks we like better than Tesla Tesla NASDAQ: TSLA shares are up more than 10% following the Q1 earnings release, and they may move higher, but investors should not expect a sustained rally; they should only expect volatility. The news driving the market is good but so futuristic that it will not impact operations positively for at least twelve months. It is nothing more than a relief rally. Among the drivers, no pun intended, are plans to build out a robotaxi fleet, the lean into AI, and cheaper models. Between then and now, the company faces many headwinds, including a tepid EV market, fierce competition, tightening margins, and negative cash flow. Get Tesla alerts: Sign Up The analysts' reaction aligns with the outlook for volatility. Analysts' activity is hot and mixed, but the takeaway is a headwind for share prices. More analysts are lowering their price targets than raising them, and more than one upgrade is needed to alter the consensus rating of Hold, verging on Reduce. The consensus target implies a 30% upside from the pre-release price action but is coming down quickly and a cap to any rally that may form. The takeaway is that Tesla is still a trader's stock and likely to make some wild swings within its trading range over the next few quarters. Tesla Had a Tough Time in Q1 Tesla Today TSLA Tesla $162.13 +17.45 (+12.06%) 52-Week Range $138.80 ▼ $299.29 P/E Ratio 37.62 Price Target $194.33 Add to Watchlist Tesla is in no danger of implosion, but the Q1 results and outlook for the year suggest that the company’s struggles have yet to end. Q1 revenue fell 8.5%, the sharpest decline in over a decade, to $21.31 billion due to tepid demand growth, weak deliveries, and the impact of price and mix. The company issued numerous price cuts in most markets over the past twelve months, impacting the top and bottom lines. The company has issued new price reductions since the end of Q1, so they will continue to influence as the year progresses. The impact of lower prices was felt worse on the bottom line. The company’s gross profit fell by 18% on a 200 bps contraction in margin compounded by higher costs. Operating margin fell by 592 basis points—income by 56% and adjusted earnings by 47%. The top and bottom lines were worse than forecast, with revenue 415 basis points short of the consensus reported by Marketbeat.com and earnings short by 1000. The guidance is optimistic, but the optimism is offset by the continued expectation for weakness this year. In the company’s words, “In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next generation vehicle and other products.” Let’s hope those products come to market in a reasonable time frame without unexpected costs. Tesla is more than a car company; an ecosystem is gaining leverage, but it takes cars to make it work. Costs are also a problem. The company is leaning hard into its next growth phase, which depends on AI, autonomy, and the long-anticipated Model 2. FCF in Q1 came in at a long-term low of -$2.53 billion, resulting in a cash draw on the balance sheet. The company is well-capitalized but is going to burn cash this year. Tesla Rebounds: Significant Resistance Lies Ahead The price action in Tesla has rebounded solidly following the report and may continue higher. The caveat is that this market is still below a critical resistance point that could cap gains. That point is near $180, and lows set in 2021. The $180 level has been a trigger point for buyers since then, and maybe again. However, if this market cannot get above $180 and sustain it, the odds of a new low will grow. In that scenario, shares of Tesla will confirm resistance at a critical level and could fall as far as $115 before hitting solid support. Even if the market for TSLA can rise above $180, it will not be out of the weeds. The long-term 150-day EMA and longer-term 150-week EMA are just above and may also provide significant resistance to higher price action. Before you consider Tesla, 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 Tesla wasn't on the list. While Tesla currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here

Who Stands to Gain from a TikTok Ban 2024-04-24 11:49:44+00:00 - The winners from the TikTok battle The countdown to TikTok disappearing from the United States is about to start. The Senate overwhelmingly passed legislation to force the divestment of the video app by its Chinese owner, ByteDance, within a year or be banned. President Biden is expected to sign it into law shortly. Barring the app from U.S. shores could take months, or even years — if it actually happens. The road ahead is complicated, and any disruptions to the app could bolster its American rivals. Who would benefit? The clear answer is Meta and Google. Both have increasingly emphasized their short-video offerings — Instagram’s Reels and YouTube’s Shorts — as places for creators. (Influencers often post on all three platforms.) Analysts at Bernstein have estimated that, should TikTok be banned, Meta could draw up to 60 percent of TikTok’s American ad revenue, while YouTube could take another 25 percent or so. Meta’s stock was up more than 2 percent in premarket trading this morning.

3 Technologies to Challenge NAND Flash Dominance in AI 2024-04-24 11:19:00+00:00 - Key Points NAND flash memory is the dominant data storage technology when it comes to AI due to its fast speeds and increasing capacity as prices continue to come down. MRAM and PCM are challenging competitors that have superior technology, but infrastructure and costs prevent them from wide mainstream adoption. 3D XPoint is a cautionary tale that illustrates how superior technology can still fail when up against a deeply entrenched incumbent leader. 5 stocks we like better than NVIDIA Artificial intelligence (AI) applications and platforms are growing like weeds. The arms race for AI superiority continues to be waged between the chip makers trying to chip away at Nvidia Co. NASDAQ: NVDA dominance in the GPU segment to Micron Technology Inc. NASDAQ: MU NAND flash memory dominance in memory chips for data storage. The computer and technology sector is always evolving, and today’s winners can be yesterday’s losers in a flash, no pun intended. Here are 3 upcoming disruptive technologies to challenge NAND flash memory dominance in AI. Get NVIDIA alerts: Sign Up Magnetoresistive RAM (MRAM) Everspin Technologies Today MRAM Everspin Technologies $7.46 +0.09 (+1.22%) 52-Week Range $6.20 ▼ $10.50 P/E Ratio 17.76 Price Target $12.00 Add to Watchlist This memory technology is non-volatile (doesn’t lose data when power is shut off), has high radiation resistance, and can be operated in extreme temperature conditions. It’s sometimes referred to as Spin-Transfer Torque Magnetoresistive RAM (STT-MRAM). It utilizes magnetic tunnel junctions (MTJs) to store data by manipulating the electron spins. This results in extremely fast read/write speeds with higher endurance than NAND. It's a combination of storage density coupled with SRAM speed, power efficiency, and non-volatile features. The downside is that the storage density is low, and manufacturing costs are high. In addition to AI applications, it is also ideal for automotive, military and industrial applications due to its ability to operate in extreme temperatures and tamper-resistant nature. While MRAM has yet to reach its potential, Everspin Technologies Inc. NASDAQ: MRAM is considered the leader in the segment. They’ve partnered with GLOBAL FOUNDRIES Inc. NASDAQ: GFS to integrate MRAM into 22FDX technology. Phase-Change Memory (PCM) International Business Machines Today IBM International Business Machines $184.10 +1.91 (+1.05%) 52-Week Range $120.55 ▼ $199.18 Dividend Yield 3.61% P/E Ratio 22.64 Price Target $177.23 Add to Watchlist This non-volatile technology stores data by switching material between amorphous and crystalline states on a nano level. The stored data can be retained and stored for 10 years at room temperature. It's as fast as a DRAM. It has lower power consumption than NAND. However, it has lower storage density and can suffer from resistance drift, where the amorphous state drifts more than the crystalline state. International Business Machines NYSE: IBM is working to progress the technology integrating PCM-based cores with its digital computing processors. 3D XPoint Memory (3DXP) Intel Today INTC Intel $34.50 +0.22 (+0.64%) 52-Week Range $26.85 ▼ $51.28 Dividend Yield 1.45% P/E Ratio 88.46 Price Target $42.38 Add to Watchlist This type of storage memory is being developed by Intel Co. NASDAQ: INTC and Micron Technology. It utilizes a 3D crossbar with resistance-switching materials. Intel's Optane SSDs use 3D XPoint technology which is significantly faster than NAND flash memory in access and transfer times. The speed advantage comes from addressing single cells rather than whole blocks to perform write operations rather than having to perform a whole sequence of read-modify-write operations. The technology has very low latency and simultaneous read and write operations with very high endurance with performance degradation. 3D XPoint bridged the gap between NAND and RAM. Unfortunately, it wasn’t enough. The technology had limited availability, adoption and high costs. Intel has announced the discontinuation of its Optane SSD DC P4800X drives. Despite being superior to NAND, it had limited market adoption as the chips were just not competitive with NAND on price and having an established infrastructure. Intel resumed its focus on developing its core processor business. It's Hard to Knock The King Off the Mountain 3D XPoint can be a cautionary tale of a superior technology that couldn't get major adoption due to NAND Flash's high costs and incumbent dominance. Companies are unlikely to stray from an established infrastructure when something is the standard. The challengers will keep coming, but the moat is wide and deep for NAND as it is the standard, and companies are hesitant to stray from the standard in any technology. Before you consider NVIDIA, 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 NVIDIA wasn't on the list. While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here

Is Zoom Video Stock Getting Too Cheap to Pass Up? 2024-04-24 11:06:00+00:00 - Key Points Zoom Video shares recently hit new 52-week lows at $59.01, creating a potential value opportunity. Zoom Video has $7 billion in cash, representing nearly 40% of its market cap. Zoom Video stock was upgraded to a Buy with a $75 price target by Rosenblatt Securities, citing the combination of a refocused channel strategy, momentum in Zoom Phone, contact center-as-a-service (CCaaS) market improvement, healthy balance sheet and the $1.5 billion stock buyback program. 5 stocks we like better than Zoom Video Communications Zoom Video Communications Inc. NASDAQ: ZM shares hit a new 52-week low despite improvements indicating normalization may be near completion in its business. Zoom stock was the darling of the pandemic era, surging to a high of $588.84 in October 2024 as the whole world went virtual during the global lockdowns. Zoom became a household name and even a verb to describe engaging in video conferences, visits and meetings. It’s become a permanent fixture in the remote and hybrid work segment. The macro market sell off has accelerated the selling in Zoom Video. It’s evident that people are making fewer Zoom calls for social engagements, but the markets care more about whether normalization has concluded and growth resumes in the enterprise business segment. Investors are left to wonder if Zoom shares are getting too cheap to pass up. Get ZM alerts: Sign Up Zoom competes with computer and technology sector giants like Microsoft Co. NASDAQ: MSFT Teams, Salesforce Inc. NYSE: CRM, and Adobe Inc. NASDAQ: ADBE. The Evolution of AI Integration Zoom is mainly known for its video conferencing app and software. What originally started as a video conferencing platform has evolved into a full communications and work collaboration ecosystem. Its Zoom Workplace is an AI-powered collaboration platform that includes meetings, team chat, a scheduler, a whiteboard and spaces. It formed a partnership with Avaya Holdings Co. NYSE: AVYA to integrate with its Communication & Collaboration Suite. Virtual Agent is an AI-powered feature in its Contact Center offering. Virtual Agent has helped save over 400,000 agent hours per month. Generative AI is used to generate meeting notes, summaries and transcription services. Its AI also offers non-verbal cue detection and speaker identification. Daily Descending Triangle Pattern ZM has a descending triangle breakout pattern on its daily candlestick chart. The daily descending trendline formed at $70.60 on March 12, 2024. The lower flat-bottom trendline is at $60.14. As shares approach the apex point, ZM is breaking down under the flat-bottom trendline. The daily market structure low (MSL) trigger forms a breakout through $60.75. The daily relative strength index (RSI) is flat around the 30-band. Pullback support levels are at $59.01, $57.52, $54.56 and $51.12. Impressive Fiscal Q4 2024 Zoom Video Communications Today ZM Zoom Video Communications $61.65 +0.03 (+0.05%) 52-Week Range $58.87 ▼ $75.90 P/E Ratio 30.22 Price Target $77.56 Add to Watchlist The days of Zoom’s scorching hot 325% growth during the pandemic era are over. Investors will have to settle for the 2.6% YoY growth achieved in its fiscal Q4 2024. The $1.15 billion in revenues still beat consensus estimates for $1.13 billion. Zoom has returned to profitability. Its GAAP income rose to $168.5 million in the quarter compared to a loss of $129.9 million in the prior year quarter. The EPS performance of $1.42 beat consensus estimates by 27 cents. The enterprise business rose 5% Year over Year in the quarter, bringing Zoom's year-end total of enterprise customers to 220,400. Customers with $100,000 or more in contract value rose 9.8% Year over Year to 3,810 in the quarter. Zoom closed the fiscal year with $7 billion in cash and cash equivalents, which is nearly 40% of its market capitalization. They also authorized a $1.5 billion stock buyback. Raised EPS Estimates Zoom Video lifted fiscal full-year 2025 EPS to $4.85 to $4.88, beating $4.66 consensus estimates. For fiscal Q1 2025, revenues are expected to be around $1.125 billion. Growth in Phone Zoom Video CFO Kelly Steckelberg noted its growth in Zoom Phone at the KeyBanc Emerging Technology Conference. Steckelberg commented, “And by the way, now with the advent of AI, like one of the features that you're going to get with Zoom AI companion is call summaries. So, if you're having a phone call, you can get a summary of that just like you can get a meeting summary. That innovation that's going to happen with AI is not going to be happening with those on-prem providers. Rosenblatt Upgrade On April 18, 2024, Rosenblatt Securities upgraded shares of Zoom Communications to a Buy from Neutral with a $75 price target. Analyst Catherine Trebnick noted that the upgrade considered a refocused channel strategy, momentum in the Zoom Phone and contact center-as-a-service (CCaaS) market, a healthy balance sheet and the $1.5 billion stock buyback. Zoom Video Communications analyst ratings and price targets are at MarketBeat. Before you consider Zoom Video Communications, 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 Zoom Video Communications wasn't on the list. While Zoom Video Communications currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here

Biden administration expands overtime pay to cover 4.3 million more workers. Here's who qualifies. 2024-04-24 10:56:00+00:00 - New study says workplace stress impacting more people's health New study says workplace stress impacting more people's health 05:42 About 4.3 million U.S. workers who previously didn't qualify for overtime pay could soon receive time-and-a-half for working more than 40 hours a week thanks to a new rule from the Biden administration. The U.S. Department of Labor on Tuesday unveiled a new rule that will extend overtime pay to salaried workers who earn less than $1,128 per week, or $58,656 annually. Previously, only workers who made $684 or less each week, or $35,568 annually, were eligible for OT. Businesses are required to pay workers 1.5 times their pay if they work more than 40 hours a week, but that protection has been limited to hourly workers and lower-earning salaried employees. Because of the salary cutoff, many salaried workers were performing the same duties as their hourly coworkers, but weren't able to qualify for overtime, Acting Labor Secretary Julie Su said in a statement. "This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time," she said. The new rule could result in an additional $1.5 billion in pay for employees, according to an estimate from the Economic Policy Institute, a left-leaning think tank. "Employers will be more than able to adjust to the rule without negatively impacting the overall economy," wrote EPI director of government affairs and advocacy Samantha Sanders and President Heidi Shierholz. Here's what to know about the new OT rule. Why is overtime pay getting overhauled? The Fair Labor Standards Act requires that most workers who spend more than 40 hours a week on the job receive 1.5 times their regular pay for each hour they work beyond that amount. While the law covers nearly all hourly workers, salaried employees only qualify for OT if they earn below a specific salary. Currently, that threshold is $684 per week, or $35,568 annually. That means a salaried worker earning less than that cutoff "can be forced to work 60-70 hours a week for no more pay than if they worked 40 hours," Sanders and Shierholz wrote. "The extra 20-30 hours are completely free to the employer, allowing employers to exploit workers with no consequences." Who is covered by the new overtime rule? The law covers salaried workers who earn below certain thresholds, and it will kick in through two phases. Starting July 1, salaried workers who earn less than $844 per week, or $43,888 per year, will be covered by the new rule. On January 1, 2025, the salary threshold will jump to $1,128 per week, or $58,656 per year, the Labor Department said. Most of the additional workers who will now qualify for OT are in professional and business services, health care, and social services as well as financial activities, EPI said. About 2.4 million of the 4.3 million workers are women, while 1 million of color, it said. Who won't qualify for OT? First, overtime pay isn't available to salaried workers who are considered "executive, administrative or professional" employees. Some researchers have pointed out that corporations give fake titles to low-ranking workers like "grooming manager" for a barber in order to make them appear like managers. The new rule stipulates that only "bona fide" executive, administrative or professional employees are exempt from the expanded OT rule. What are businesses saying about the new rule? Some industry groups are pushing back against the overtime rule, saying that it will harm their operations and lead to job cuts. Some are also threatening legal action. "We fear many hoteliers will have no option other than to eliminate managerial jobs that are long-established paths to advancement," American Hotel & Lodging Association (AHLA) interim President Kevin Carey in a statement. "AHLA is reviewing all available options, including litigation, for defeating this ill-advised regulation."

Enphase forecasts revenue below estimates as inverter market stays under pressure 2024-04-24 05:35:00+00:00 - April 23 (Reuters) - Solar inverter maker Enphase Energy projected second-quarter revenue below analysts' estimates on Tuesday, in a sign of sluggish recovery in demand across its markets. The Fremont, California-based company forecast revenue in the range of $290 million to $330 million for the quarter ending June, compared with analysts' average estimate of $348.6 million, according to LSEG data. Rising inventory levels in Europe and a metering reform in top U.S. market California have dented demand for Enphase's inverters used in residential solar units. The metering reform has lowered credit that households with rooftop solar panels received for transferring excess power to the grid. Elevated interest rates, which have raised the payback period for investment in solar, are also hurting demand. Enphase said in February it expects inventory levels to normalize and demand for its products to pick up by the end of the second quarter. Microinverter shipments fell 71% to about 1.38 million in the first quarter from a year earlier. Revenue of $263.3 million missed analysts' average estimate of $279.8 million. The company had cut its workforce by 10% last year and reduced its manufacturing capacity to clear its excess inventory. (Reporting by Sourasis Bose and Tanay Dhumal in Bengaluru; Editing by Sriraj Kalluvila and Shilpi Majumdar)

The House Just Passed the TikTok Ban. Here's What That Means for Meta Stock. 2024-04-24 05:15:00+00:00 - The U.S. House of Representatives passed a bill on Saturday that's not good for popular social-media app TikTok. But it may have gone unnoticed by many investors because it was packaged inside of a foreign aid bill for Ukraine and Israel. Because of the bill, TikTok's parent company is faced with the choice of selling its popular app in the U.S. or pulling it from the U.S. market entirely. Facebook's parent company Meta Platforms (NASDAQ: META) is seen as a clear beneficiary of the TikTok legislation. I'll explain why that's the case but I'll also explain why Meta investors might want to tap the brakes on their enthusiasm. First, let's tap the brakes I've noted that the TikTok bill made it through the House of Representatives but this doesn't mean it's now a done deal. The bill still has to make it through the Senate. And after that, it has to be signed by President Biden. Granted, there's bipartisan support for the bill and it passed the House of Representatives with ease. Therefore, it's reasonable to expect it to pass the Senate. From there, comments from President Biden make it sound like he will indeed sign it. However, even if the bill is signed by the president, TikTok wouldn't be in immediate danger of disappearing. Parent company ByteDance would have up to a year to become compliant with the law. By then, it's possible Biden would no longer be the president, suddenly pushing U.S. policy in another direction. Therefore, ByteDance might stall for time. Finally, ByteDance could sell TikTok. And if it does, the app might not ever leave the U.S. market, leaving the competitive landscape unchanged. This possibility is quite realistic. For example, former Treasury Secretary Steve Mnuchin is already assembling a team of investors to buy TikTok if it goes up for sale. In summary, Meta Platforms' shareholders shouldn't celebrate yet. The bill hasn't completely passed yet, ByteDance will have about a year to weigh its options, and TikTok may never disappear in the U.S. anyway if it's sold to a party that can keep it running. Why it could be good for Meta The company sells hardware products, is pushing research in artificial intelligence (AI), and has big plans for the metaverse. But in 2023, 98% of Meta's revenue came from digital advertising. Therefore, advertising is clearly the most important thing for Meta investors to watch. Digital advertising depends on user engagement. It doesn't matter how many users a platform technically has. What matters is whether they are using the platform and can be shown an ad. And for Meta, video is a key component of user engagement. Story continues In the fourth quarter of 2023, video watch time for Meta was up a whopping 25% year over year, which shows how quickly user engagement is growing. In the Q4 conference call, Meta's CFO Susan Li said that video has lower levels of monetization right now. That's why the company is doing what it can to increase engagement. Regardless of what happens with TikTok, Meta is busy building its AI engine for recommending videos to viewers, which can boost engagement if done well. Given the 25% growth in Q4, there's reason to believe that Meta's AI engine is off to a good start. However, it stands to reason that Meta would additionally benefit if TikTok did disappear from the market. Advertisers spend money on the popular platform. But if it were banned, those dollars would flow elsewhere. And some of that spend would logically wind up with Meta. In conclusion, the TikTok bill that just passed in the House of Representatives doesn't mean anything for Meta stock right now and it's possible that it never does. Therefore, Meta investors need to focus on what the company is doing regardless of what happens with TikTok. That said, if things with TikTok play out a certain way, then it could eventually give Meta's business a boost. Therefore, it's not entirely immaterial to investors today and it's worth monitoring. Should you invest $1,000 in Meta Platforms right now? Before you buy stock in Meta Platforms, 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 Meta Platforms 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 $487,211!* 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 April 22, 2024 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy. The House Just Passed the TikTok Ban. Here's What That Means for Meta Stock. was originally published by The Motley Fool

Biden's Old '0% Inflation' Comment Comes Back To Bite As McKinsey Says New Biggest Splurge For US Consumers Is Groceries 2024-04-24 05:03:00+00:00 - Biden's Old '0% Inflation' Comment Comes Back To Bite As McKinsey Says New Biggest Splurge For US Consumers Is Groceries According to a recent CBS News poll, 39% of Americans believe the economy is "good," with 57% of respondents viewing the economy as "bad." It's an issue President Joe Biden has to grapple with as his reelection campaign gears up, especially given that 65% of Americans remember the economy as good under former President Donald Trump, according to the poll. In August 2022, Biden announced "zero inflation" at a time when the consumer price index (CPI) reported it was 8.5%. While he was referring to 0% month-over-month inflation at the time, it rubbed many the wrong way given the negative perception of the economy, with one Republican senator calling the claim "gaslighting." Don't Miss: While Biden has slightly backed off those claims in the face of still rising inflation, citing "progress" while acknowledging "prices are still too high," a report from the consulting firm McKinsey & Co. uncovered what Americans are now splurging on. It found that "groceries were the new biggest splurge category," beating out other more discretionary categories such as eating out, travel and beauty, with millennials being the most likely to count groceries as their biggest luxury. Trending: Invest alongside execs from Uber, Facebook and Apple in this wellness app Transforming a $5.6 TRILLION dollar industry. While the same report cited improving consumer optimism about the economy, some commentators found humor that groceries are the biggest splurge category in the face of persistent inflation. Former American intelligence contractor Edward Snowden posted on X, "The ratchet: first they criticize you for eating avocado toast and then for eating at all." As many Americans struggle to keep up with the rising prices of necessities, some funds see an opportunity to profit. Alaska Permanent Fund, the largest U.S state wealth fund, recently disclosed it tripled its stake in Walmart Inc. (NYSE:WMT) and Kroger Co. (NYSE:KR), America's two largest grocery players by market share. Even Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK) is a big fan of Kroger, owning 6.9% of the grocer. Keep Reading About Startups: Invest like a millionaire. Exclusive opportunity to invest in Epic Games $17 billion gaming empire. "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! Story continues Get the latest stock analysis from Benzinga? This article Biden's Old '0% Inflation' Comment Comes Back To Bite As McKinsey Says New Biggest Splurge For US Consumers Is Groceries originally appeared on Benzinga.com © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Visa Profit Climbs 17% as Consumer Credit-Card Spending Grows 2024-04-24 04:16:00+00:00 - (Bloomberg) — Visa Inc. reported a quarterly profit that beat Wall Street predictions as US credit-card spending climbed. Most Read from Bloomberg Adjusted net income for the fiscal second quarter rose 17% to $5.1 billion, or $2.51 a share, Visa said Tuesday in a statement. That was 7 cents more than the average estimate of analysts in a Bloomberg survey. In the US, where Visa gets more than 40% of its revenue, credit-card spending grew 6.2% from a year earlier. Worldwide payments volume climbed 8% and total processed transactions rose 11%. “We remain focused on the trillions of dollars of opportunity in consumer payments and new flows and on continuing to deepen our partnerships with clients around the world,” Chief Executive Officer Ryan McInerney said in the statement. Shares of San Francisco-based Visa rose 2.9% to $281.91 in extended trading at 4:11 p.m. in New York. The stock had climbed 5.3% this year through the close of regular trading. In March, Visa and smaller rival Mastercard Inc. agreed to cap swipe fees and allow US merchants to charge consumers extra for using credit cards — a deal that retailers said would save them at least $30 billion over five years. The pact, one of the most significant antitrust settlements ever, followed a legal fight spanning almost two decades and remains subject to court approval. The bulk of those fees, also known as interchange, are passed on to card-issuing banks that use the revenue in part to fund customer rewards programs. Read More: Visa, Mastercard Reach $30 Billion Deal With US Retailers Other second-quarter highlights: Revenue climbed 10% to $8.8 billion Operating expense rose 29% to $3.4 billion, more than the $2.89 billion average estimate of analysts in the Bloomberg survey Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.

Ask an Advisor: I'm 5 Years Away From RMDs But Recently Lost 30% of My 401(k). Should I Stay Aggressive to Regain My Losses or Rebalance? 2024-04-23 23:48:00+00:00 - Financial advisor and columnist Brandon Renfro When I retired in September 2022, my 401(k) was invested aggressively (90/10 split between stocks to bonds) and lost approximately 30%. I left the 401(k) invested in mutual funds in hopes it would gain back some of the losses. A year later it has gained back approximately 20%. I'm not required to take RMDs for another five years. My question is should I transfer the 401(k) funds to my traditional IRA account, which is invested 100% in equities and let an advisor manage the account? Or should I leave it in the mutual funds and rebalance the stock/bond percentage to be less aggressive, say 80/20 or 70/30? – Bev Congratulations on your recent retirement and being in what sounds like a stable financial position. Your question is a simple but somewhat loaded one. The answer depends a lot on what you want and need from your retirement account and what you would want from an advisor. Instead of focusing on returns, I would encourage you to think about how your investments fit within a broader context of your goals, attitudes and lifestyle preferences. (And if you need help making important retirement decisions, consider working with a financial advisor.) Assessing Your Situation A newly retired woman looks out the window as she thinks about her plans for retirement. The reason I say it sounds like you may be in a good financial position is the implication that you aren't withdrawing from your account. I take that to mean you have enough other income or savings to get you through until required minimum distributions (RMDs) begin. If so, that's great that you're able to do that. That being said, let's talk about your asset allocation – the mix of different investments you hold. On one hand, for a retiree to have 90% of their investments in stocks is incredibly aggressive. For the vast majority of retirees, that would be too aggressive. Ordinarily, that money needs to be much more stable so you can take regular withdrawals from it. Since you implied that you won't begin withdrawals for another five years, this may not be the case for you. Your investment horizon may be much longer, and you may not need the money you’re required to withdraw once you hit RMD age. If that’s the case, it's possible that you have the capacity to invest aggressively in stocks, although I can't say for certain based on the information you shared. (And if you need help selecting an appropriate asset allocation, consider speaking with a financial advisor.) Consider Your Risk Tolerance Of course, your attitude toward risk comes into play, too. You made the right choice by waiting it out rather than panic-selling after your account dropped in value. This suggests you may have a high enough risk tolerance to stomach an aggressive asset allocation. However, consider how stressed you were, too. Story continues But your asset allocation and risk tolerance shouldn’t be the only determining factors. You seem very focused on the investment aspect, but I think it is important that you ask yourself what you want from the money. (A financial advisor can help you answer this all-important question.) Is there a goal you’re saving that money for? Does it need to support your income? Are you wanting to leave it to heirs? Your goals should drive your investment decisions. Don't invest in a vacuum. Working With an Advisor A financial advisor goes over retirement investments with a client. I'm curious about the way you tied rolling your 401(k) into an IRA, investing it 100% in stocks and letting an advisor manage it all together. Those are each independent decisions that aren't inherently connected. Again, make sure you think through your goals and what you want to accomplish with the money. An advisor who is also a financial planner would help you with this. A financial planner can also help you make sense of how you should be investing given your goals and risk tolerance. I think that is key. Financial planners may also be able to manage your investments for you in a way that aligns with the plan the two of you lay out. (And if you’re ready to work with a financial advisor, this tool can help you match with one.) Bottom Line Don't make investment allocation decisions in a vacuum. Consider your personal situation, attitudes and goals. Then, choose an allocation that is most appropriate for you. This should be the approach whether you choose to do it on your own or with the help of an advisor. Tips for Finding a Financial Advisor Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now. Consider a few advisors before settling on one. It's important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice. Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you'd like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column. Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity. Photo credit: ©iStock.com/Ridofranz, ©iStock.com/shapecharge The post Ask an Advisor: I’m 5 Years Away From RMDs But Recently Lost 30% of My 401(k). Should I Stay Aggressive to Regain My Losses or Rebalance? appeared first on SmartReads by SmartAsset.

Tesla profits plunge as it grapples with slumping electric vehicle sales 2024-04-23 22:52:00+00:00 - Electric vehicle incentives | On Your Side Electric vehicle incentives | On Your Side 02:41 Mounting competition in the stuttering electric vehicle market is taking the juice out of Tesla. The automaker's first-quarter profit plummeted 55% as falling global sales and price cuts sliced into the EV maker's revenue and earnings. The company said Tuesday it made $1.13 billion in profit from January through March, compared with $2.51 billion in the same period a year ago. Revenue was $21.3 billion, down 9% from last year, the company said. Tesla executives blamed the dip partly on EV sales being "under pressure as many carmakers prioritize hybrids over EVs." The weak earnings report landed on the same day Tesla announced it plans to lay off nearly 2,700 workers at its factory in Austin, Texas. The layoffs will happen during a two-week period starting June 14, according to a layoff notice. Tesla said last week that it's planning to lay off more than 10% of its roughly 140,000 workers globally. Tesla didn't immediately respond to a request for comment. The latest financial results continue what has been tough stretch for Tesla this year. The company said earlier this month that it delivered 386,810 vehicles in the first quarter, almost 9% below the 423,000 it delivered in the year-ago period. Tesla blamed the decline partly on phasing in an updated version of the Model 3 sedan at its Fremont, California factory. Plant shutdowns due to shipping diversions in the Red Sea and an arson attack that knocked out power to its German factory also curtailed deliveries, according to Tesla. In another black eye for the company, Tesla said on April 19 that it is recalling nearly 4,000 Cybertrucks because of a faulty accelerator pedal. Tesla is facing increasing competition overseas and in the U.S. as automakers race to introduce new, and more affordable, EV models. Between 2018 and 2020, Tesla accounted for 80% of EV sales in the U.S., but that figure fell to 55% in 2023, according to Cox Automotive. Although the pace of EV sales has dipped this year, the longer term forecast shows continued global growth. Automakers around the world will sell about 17 million EVs this year, up from 14 million last year, according to a recent estimate from the International Energy Agency (IEA). "Electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022 and only 2% five years earlier, in 2018," the IEA said. "These trends indicate that growth remains robust as electric car markets mature." And Tesla investors took heart Tuesday from Tesla vowing to accelerate its introduction of a low-cost vehicle, boosting the company's shares in after-hours trading. —The Associated Press contributed to this report.

After The 4/20 Smoke Clears: What Do The Billions Spent On Cannabis Say About Sales In Key States? - WM Tech (NASDAQ:MAPS) 2024-04-23 22:27:00+00:00 - Loading... Loading... This year's 4/20 cannabis celebrations demonstrated not only a growth in consumer demand but also the crucial role of technology in understanding this surge. The overall week of 4/20 saw 3x the sales and units sold compared to any typical week. Treez, a point-of-sale provider, reported a 120% increase in sales on 4/20 compared to the previous year, with a striking 200% increase the day before. This indicates consumers were preparing early for the festivities. Transaction Data Jane Technologies, a leading digital provider for cannabis dispensaries, smoothly handled over half a million transactions, totaling $23,878,546.72 in sales. Despite a minor 8% decrease from 2023's sales on the same day, the combined total for 4/19 and 4/20 reached a record $45,708,937.34, up 14.32% from the previous highest two-day total. Sales Highlights Illinois led state sales with $4,494,973.86, though slightly down from the previous year. Sales figures from California and Colorado also highlighted significant market activity, with California recording $2,271,390.97 in sales and Colorado bringing in $671,307.73. Loading... Loading... Pricing Online According to Weedmaps data MAPS, pricing trends on 4/20 in 2024 showed notable changes: the average price of vape pens decreased by 16% since 2021, and edibles saw a 21% reduction. Conversely, the average price of flowers on Weedmaps experienced a 5% year-over-year increase from 2023, although it remained 10% below 2021 levels. Additionally, with 4/20 falling on a Saturday, order volumes surged earlier than typical, peaking around 11 a.m. PT. This early peak was preceded by an 18% increase in orders on Friday, 4/19, compared to the average of the previous two Fridays in April, indicating an extended period of heightened activity. Shifts In Consumer Preferences The preference for convenience was apparent as, for the first time, pre-rolls tied with flowers, each accounting for 25% of total sales. This shift suggests consumers favor ready-to-use options during significant cannabis holidays. According to Jane Technologies, the top-selling product categories on 4/20 were led by flowers with sales reaching $9,388,597.82, followed by vapes at $6,216,507.58, edibles totaling $3,234,281, pre-rolls at $2,098,248.69, and extracts with $1,419,352.37. The most popular brands driving these sales included RYTHM, &Shine, STIIIZY, Savvy, and Float. Moreover, data from Weedmaps, which verifies retail cannabis products, showed that 72% of items ordered were brand-verified, pointing to a strong consumer preference for recognized and trusted brands. Impact Of Discounts And Promotions Promotional strategies were critical in driving sales, with Jane Technologies offering an average discount of 37% on 4/20. Weedmaps recorded a 130% increase in deal redemptions during the week of 4/20 compared to the same period in 2023, emphasizing the effectiveness of discounts in boosting transaction volumes. Data-Driven Market Compasses The extensive data provided by companies like Jane Technologies, Weedmaps and Treez underscores the expanding reach and acceptance of cannabis while highlighting the crucial contributions of data-driven platforms in the industry. With ongoing technological advancements and strategic insights, the future of the cannabis industry appears to be increasingly driven by data, focusing on optimizing consumer experiences and market efficiencies. Photo: AI-Generated Image.

Twill Payments Secures Pre-Seed Funding to Revolutionize Data Analytics with AI 2024-04-23 22:23:00+00:00 - Loading... Loading... CAMDEN, Del., April 23, 2024 (GLOBE NEWSWIRE) -- Twill Payments, an innovative startup payments company, is excited to announce the successful closure of its pre-seed funding round, marking a significant milestone in its mission to democratize data analytics for small to medium-sized businesses (SMEs) with Twill AI. This round of funding will fuel the development of Twill's compelling platform, designed to aggregate and interpret business data through a secure, user-friendly interface. Founded by a seasoned team of designers, data experts, and payments veterans who are passionate about empowering companies with actionable insights, Twill AI aims to address a crucial gap in the market. Recognizing that SME's pay steep costs to process payments but often lack the resources to harness their data fully, Twill is committed to creating a solution that not only simplifies data analysis but also makes it accessible to all business owners. Twill's platform will offer a vast API library to securely connect business applications to a secure, centralized database; allowing users to engage dimensionally with their data and spark ideas organically through conversation with a trusted partner. By facilitating a deeper understanding of their operations, Twill AI enables businesses to uncover hidden opportunities, forecast trends, and streamline their decision-making processes. "We are thrilled to have the support of our investors, who share our vision for a future where every business, regardless of size, can leverage the power of their data," said Michael Wright, Founder of Twill. "This funding is not just an investment in Twill but in the potential of SMEs to innovate, grow, and compete on a level playing field." The pre-seed funds will be instrumental in further developing Twill's AI capabilities, including advanced analytics features that proactively identify insights and trends businesses might not know to look for. Moreover, Twill believes in the power of people, and imbuing superpowers to the bookkeepers and accountants that keep SME's running is a primary objective of the platform with every development. As Twill Payments prepares for its next phase of growth, the company is committed to building not just a platform, but a community of businesses and financial professionals equipped to navigate the complexities of the modern data landscape. With Twill, SMEs have a data analytics partner ready to illuminate the path to success. For more information about Twill AI and its upcoming product launch, please visit twillpayments.com/ai . About Twill Payments Twill Payments is a leading payment integration solution provider, revolutionizing the payment experience for businesses worldwide. With a strong focus on innovation and advanced technology, Twill empowers brands to seamlessly integrate payment solutions into their operations, enhancing customer experience and driving growth. Through effortless integration, cutting-edge tools, and personalized support, Twill Payments simplifies and optimizes the payment process, allowing businesses to focus on what matters most - their core operations. Media Contact: Loading... Loading... David C. Vix Media Group hello@vixmg.com A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/df2b4ca3-c698-448f-a8c4-7f18b53185c4

Oracle is moving its world headquarters to Nashville to be closer to health-care industry 2024-04-23 22:02:00+00:00 - Larry Ellison, co-founder and chairman of Oracle, speaks during the Oracle OpenWorld 2017 conference in San Francisco on Oct. 3, 2017. Oracle Chairman Larry Ellison said Tuesday that the company is moving its world headquarters to Nashville, Tennessee, to be closer to a major health-care epicenter. In a wide-ranging conversation with Bill Frist, a former U.S. Senate Majority Leader, Ellison said Oracle is moving a "huge campus" to Nashville, "which will ultimately be our world headquarters." He said Nashville is an established health center and a "fabulous place to live," one that Oracle employees are excited about. "It's the center of the industry we're most concerned about, which is the health-care industry," Ellison said. The announcement was seemingly spur-of-the-moment. "I shouldn't have said that," Ellison told Frist, a longtime health-care industry veteran who represented Tennessee in the Senate. The pair spoke during a fireside chat at the Oracle Health Summit in Nashville. Shares of Oracle were mostly flat in extended trading Tuesday. Oracle moved its headquarters from Silicon Valley to Austin, Texas, in 2020. The company has been making a major push into health care in recent years, most notably with its $28 billion acquisition of the medical records software giant Cerner. Ellison said Tuesday that Oracle is relatively new to the health-care sector, but he believes the company has a "moral obligation" to solve problems facing the industry. Nashville has been a major player in the health-care scene for decades, and the city is now home to a vibrant network of health systems, startups and investment firms. The city's reputation as a health-care hub was catalyzed when HCA Healthcare, one of the first for-profit hospital companies in the U.S., was founded there in 1968. HCA helped attract troves of health-care professionals to Nashville, and other organizations quickly followed suit. Oracle has been developing its new $1.2 billion campus in the city for about three years, according to The Tennessean. "Our people love it here, and we think it's the center of our future," Ellison said. Oracle did not immediately respond to CNBC's request for comment.

Jack Dorsey’s payments company, Block, is building its own bitcoin mining system 2024-04-23 21:58:00+00:00 - Block Inc logo is seen displayed in this illustration taken, April 10, 2023. Jack Dorsey says that his payments company, Block (formerly Square), is expanding its bitcoin mining ambitions from designing chips to developing a full bitcoin mining system. In a post on Tuesday, the global tech firm announced that it had finished the development of its own standalone three-nanometer bitcoin mining chip and was now in the process of working through the design with a "leading global semiconductor foundry." Block also unveiled plans to broaden out the scope of its mining project to include system design. "We've spent a significant amount of time talking to a wide variety of bitcoin miners to identify the challenges faced by mining operators," Block writes. "Building on these insights and pursuant to our goal of supporting mining decentralization, we plan to offer both a standalone mining chip as well as a full mining system of our own design." Democratizing access to bitcoin mining — the process of creating new bitcoins by solving increasingly complex computational problems — is a big part of the mission statement of this project. "Mining isn't accessible to everyone," Dorsey wrote when Block first entered the business of building mining hardware in 2021. "Bitcoin mining should be as easy as plugging a rig into a power source. There isn't enough incentive today for individuals to overcome the complexity of running a miner for themselves." Indeed, members of the bitcoin community have long been concerned that hardware vulnerabilities might compromise network stability. The ASIC chip used in mining rigs, for example, is manufactured in China, a country that has proven hostile to the crypto sector in recent years. Block said in its memo on Tuesday that the goal of this project is to both decentralize the supply of bitcoin mining hardware and the distribution of hashrate — a proxy for industry competition and mining difficulty. To that end, the fintech firm is solving one major barrier to entry: Mining rigs are hard to find and expensive, and delivery can be unpredictable. The company was light on the details in this latest announcement, but Dorsey posted in 2021 that the company was considering a "bitcoin mining system based on custom silicon." At the time, Dorsey went on to share his thoughts on the need for more of a focus on vertical integration, as well as on silicon design, which he says is too concentrated among a few companies. Block's general manager for hardware, Thomas Templeton, previously disclosed plans to improve reliability and the user experience of mining, addressing common issues around heat dissipation and noise production. The announcement comes just after the most recent bitcoin halving, which took effect late on Friday. The event happens roughly every four years, and it cuts the issuance of new bitcoin in half. The idea of making the mining process more accessible has to do with more than just generating new bitcoin. Instead, Dorsey sees it as a long-term need for a future that is fully decentralized and permissionless. "Mining needs to be more distributed," Dorsey posted on X in October, when he first floated the idea. "The more decentralized this is, the more resilient the bitcoin network becomes." Toward that end, Block's venture arm backed Gridless, a company that operates bitcoin mines from renewable power sources in Kenya, Malawi and Zambia.

Tesla just said it's going to launch cheaper EVs sooner than expected 2024-04-23 21:42:31+00:00 - Tesla says cheaper models are coming sooner than they'd planned. The news comes as the carmaker announced Q1 results and noted global EV sales are under pressure. CEO Elon Musk has long promised the launch of a $25,000 Tesla. NEW LOOK 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. Advertisement Tesla is pivoting its plan for vehicle production amid a steep revenue drop in the first quarter of 2024. The electric vehicle maker said Tuesday it will be launching "new and more affordable products" ahead of its previous timeline, which had predicted production to start in the second half of 2025. To make the process move along faster, the new EVs "will be able to be produced on the same manufacturing lines as our current vehicle line-up," it said. Related stories "Ultimately, we are focused on profitable growth, including by leveraging existing factories and production lines to introduce new and more affordable products," the company said. Advertisement Tesla's revenue slumped 9% year-over-year in Q1 — the steepest drop since 2012. Deliveries of its vehicles fell 9%, far faster than its 2% drop in production. "Global EV sales continue to be under pressure," it also said today. In recent weeks, Tesla has slashed the prices of the Model S, X, and Y in the US and China. It has faced stiff competition from Chinese automakers who also slashed vehicle prices. Since 2020, Musk has claimed that a $25,000 EV is attainable in the near future. It has also launched the Cybertruck —with a retail price that can reach six figures. Advertisement The company is also turning to job cuts. CEO Elon Musk told staff earlier in April that Tesla plans to slash more than 10% of its workforce.

Trump thought hush money was risky because 'It always gets out,' National Enquirer exec testifies. In this case, Trump was right. 2024-04-23 21:42:04+00:00 - Donald Trump's Manhattan hush-money trial is in its second week. On Tuesday, ex-tabloid publisher David Pecker described Trump's prophetic hesitancy over hush money. "It always gets out," Pecker testified Trump told him. NEW LOOK 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. Advertisement Donald Trump should have gone with his gut on this one. In the summer before his election, the then-candidate wanted nothing to do with buying the silence of a Playboy Bunny. Model Karen McDougal was shopping around a story of a love affair with Trump from ten years prior. But Trump was queasy about the required payoff, according to testimony on Tuesday in the former president's Manhattan hush-money trial. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .

Fragments of Bird Flu Virus Discovered in Milk 2024-04-23 21:42:02+00:00 - Federal regulators on Tuesday said that samples of pasteurized milk from around the country had tested positive for inactive remnants of the bird flu virus that has been infecting dairy cows. The viral fragments do not pose a threat to consumers, officials said. “To date, we have seen nothing that would change our assessment that the commercial milk supply is safe,” the Food and Drug Administration said in a statement. Over the last month, a bird flu virus known as H5N1 has been detected in more than 30 dairy herds in eight states. The virus is also known to have infected one farmworker, whose only symptom was pink eye. Scientists have been critical of the federal response, saying that the Agriculture Department has been too slow to share important data and has not adequately pursued the testing of cattle for the infection.

FTC votes to ban noncompete clauses that bar employees from working for competitors 2024-04-23 21:42:00+00:00 - Federal Trade Commission Chair Lina Khan testifies before a House Judiciary Committee hearing on Oversight of the Federal Trade Commission, on Capitol Hill in Washington, D.C., July 13, 2023. The Federal Trade Commission on Tuesday voted 3-2 for a nationwide ban against noncompete agreements, which companies use to prevent employees from taking jobs with competitors in the same industry. The new rule is slated to go into effect 120 days after it is officially published in the Federal Register, though business groups are expected to challenge it. Within hours of the vote, the U.S. Chamber of Commerce pledged to sue the agency over the rule. If officially implemented, the rule will not only prohibit new noncompete clauses, but will also force companies to scrap their existing noncompetes for all employees except senior executives who earn more than $151,164 annually and who are in policy-making roles. "Workers ought to have the right to choose who they want to work for," President Joe Biden said Tuesday. The FTC estimates that 30 million American workers, or roughly 18%, are currently subject to a noncompete. The noncompete provision of an employee's contract may prevent someone from going to work for a competing company within the same industry, in pursuit of a better career opportunity, higher compensation or a more suitable geographic location. "Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned," said Federal Trade Commission Chair Lina Khan in a press release. The FTC initially proposed the noncompete ban in January 2023. It has since received over 26,000 comments on the proposal, the large majority of which were in support, according to the agency. The FTC claims that noncompetes impede the efficiency of the labor market and can lead to "increased market concentration and higher prices for consumers." Meanwhile, business trade groups claim that noncompetes help preserve intellectual property and company secrets. The FTC suggests that companies lean on other avenues like non-disclosure agreements to secure proprietary information. Tuesday's vote comes as the latest move from an FTC that has been at the forefront of President Joe Biden's broader crusade against corporate behemoths and the rules that help them dominate markets. The agency, along with the Department of Justice's antitrust division, has filed dozens of lawsuits against proposed corporate deals over the past several years. In March, Biden launched a task force on corporate pricing practices, to be jointly led by the FTC, an independent agency, and the DOJ. Biden has repeatedly accused companies of artificially keeping prices high, in part to help the president explain why inflation has remained so sticky over the past several years.

FTC bans noncompete agreements, making it easier for workers to quit. Here's what to know. 2024-04-23 21:35:00+00:00 - Biden's latest executive order could make it easier for Americans to quit their jobs Federal regulators on Tuesday enacted a nationwide ban on new noncompete agreements, which keep millions of Americans — from minimum-wage earners to CEOs — from changing jobs within their industries. The Federal Trade Commission on Tuesday afternoon voted 3-to-2 to approve the new rule, which will ban noncompetes for all workers when the regulations take effect in 120 days. For senior executives, existing noncompetes can remain in force. For all other employees, existing noncompetes are not enforceable. The antitrust and consumer protection agency heard from thousands of people who said they had been harmed by noncompetes, illustrating how the agreements are "robbing people of their economic liberty," FTC Chair Lina Khan said. The FTC commissioners voted along party lines, with its two Republicans arguing the agency lacked the jurisdiction to enact the rule and that such moves should be made in Congress. Why it matters The new rule could impact tens of millions of workers, said Heidi Shierholz, a labor economist and president of the Economic Policy Institute, a left-leaning think tank. "For nonunion workers, the only leverage they have is their ability to quit their job," Shierholz told CBS MoneyWatch. "Noncompetes don't just stop you from taking a job — they stop you from starting your own business." Since proposing the new rule, the FTC has received more than 26,000 public comments on the regulations. The final rule adopted "would generally prevent most employers from using noncompete clauses," the FTC said in a statement. The agency's action comes more than two years after President Biden directed the agency to "curtail the unfair use" of noncompetes, under which employees effectively sign away future work opportunities in their industry as a condition of keeping their current job. The president's executive order urged the FTC to target such labor restrictions and others that improperly constrain employees from seeking work. Still, the rule is virtually certain to be challenged in court, with the U.S. Chamber of Commerce in the past calling it "blatantly unlawful. The trade group, which advocates for U.S. corporations and businesses, did not respond to a request for comment. "The freedom to change jobs is core to economic liberty and to a competitive, thriving economy," Khan said in a statement making the case for axing noncompetes. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand." A threat to trade secrets? An estimated 30 million people — or one in five U.S. workers — are bound by noncompete restrictions, according to the FTC. The new rule could boost worker wages by a total of nearly $300 billion a year, according to the agency. Employers who use noncompetes argue that they are needed to protect trade secrets or other confidential information employees might learn in the course of their jobs. But corporations concerned about protecting their intellectual assets can use restraints such as confidentiality agreements and trade secret laws, and don't need to resort to noncompete agreements, the FTC staff determined. The commission's final rule does not nullify existing noncompetes with senior executives, who are defined as those earning more than $151,164 a year and who hold a policy-making position. Those execs are much more likely to negotiate the terms of their compensation, according to regulators. Still, the FTC is banning new noncompetes for senior executives on the grounds that the agreements stifle competition and discourage employees from creating new businesses, potentially harming consumers. The idea of using noncompetes to keep business information out of the hands of rivals has proliferated, noted Shierholz, citing a notorious case involving Jimmy John's eateries. Low-paid workers are now the hardest hit by restrictive work agreements, which can forbid employees including janitors, security guards and phlebotomists from leaving their job for better pay even though these entry-level workers are least likely to have access to trade secrets. Real-life consequences In laying out its rationale for banishing noncompetes from the labor landscape, the FTC offered real-life examples of how the agreements can hurt workers. In one case, a single father earned about $11 an hour as a security guard for a Florida firm, but resigned a few weeks after taking the job when his child care fell through. Months later, he took a job as a security guard at a bank, making nearly $15 an hour. But the bank terminated his employment after receiving a letter from the man's prior employer stating he had signed a two-year noncompete. In another example, a factory manager at a textile company saw his paycheck dry up after the 2008 financial crisis. A rival textile company offered him a better job and a big raise, but his noncompete blocked him from taking it, according to the FTC. A subsequent legal battle took three years, wiping out his savings.