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Kohl’s Corporation: This Offprice Retailer Is Ready To Rally 2024-03-01 15:55:00+00:00 - Key Points Kohl's is undervalued and yields more than 7% with a catalyst for higher share prices close. The analysts underestimate its Q4 performance; guidance may impress. Institutions are loading up on this name ahead of earnings and have put a floor in the market. 5 stocks we like better than Kohl's Kohl’s Corporation NYSE: KSS stock price has been wallowing near long-term lows despite signs of turnaround and an improving outlook for cash flow. This market needs a catalyst to get it moving, and there is one at hand. Results from TJX Companies NYSE: TJX suggest strength across the off-price universe, and analysts have set the bar low for Kohl’s, which reports in mid-month. Get Kohl's alerts: Sign Up Analysts Underestimate Kohl’s Strengths and Value Analysts expect Kohl’s Q4 revenue to fall slightly compared to last year, setting it up for a significant outperformance. Competitor TJX Companies grew by 13% in Q4 to lead the retail sector. That compares to only 3.8% for the retail industry and 5% for leading player Walmart NYSE: WMT. Target NYSE: TGT, which has been losing share to Walmart and the off-price retailers, contracted by 5%. The TJX Companies also significantly widened its margin and provided solid guidance. Kohl’s is expected to improve margin significantly but may still outpace forecast due to the expected revenue strength. Regardless, the analysts’ consensus is sufficient to sustain the high-yielding dividend, and earnings growth is expected in the 2024 calendar year. Kohl’s dividend is substantial, yielding more than 7% for only 11X earnings, which is a deep value for the sector. Off-price leader TJX Companies trades at a much higher 25X earnings. The dividend payout is high at 80% of earnings, playing into the valuation discrepancy, but the cash flow outlook, balance sheet, and spending discipline offset the risk. Spending discipline, including a 13% reduction in Q3 inventory, is helping to improve cash flow and the balance sheet. Balance sheet highlights from Q3 include a flat cash position and a reduction in long-term debt that should be compounded in Q4. Because Q4 margin and profitability are expected to improve again in Q4, investors should expect additional balance sheet improvement for improvements to continue in 2024. The Sell-Side Put a Floor In Kohl’s Price The institutional activity is telling and may foreshadow a strong report. Institutions have bought this stock on balance for most quarters of the last three years, and activity spiked in Q1. The to-date activity is a three-quarter high and the 2nd highest in the last three years, bringing total ownership to 98%. The largest institutional holders are BlackRock and Vanguard, with about 25% of the stock, but ownership is broad and includes public retirement funds and private capital. Analysts' sentiment will be a catalyst for the market following the release. The analysts lowered their ratings and price targets in 2022 and early 2023, putting intense pressure on the stock’s price, but relented later in the year. The 2nd half of 2023 analysts' activity is mixed but includes an upgrade to Positive from Mixed, a reiterated Moderate Buy, and an initiated equal-weight equivalent with a firmed price target. If Q4 is strong and guidance solid, the analysts' shift could gain traction and lift the price action. Until then, the consensus reported by MarketBeat aligns with the 150-day moving average, which is about 13% below recent action. The Technical Outlook: Kohl’s Is On the Brink of a Reversal Kohl’s stock bottomed over the last twelve months and is trading near the top of the range. The pattern suggests bottoming and potential for reversal that will be confirmed or refuted soon. The critical level is $29, a trigger for bullish trades if crossed. A move above that level may find resistance near $34.50, so upward movement may be capped near term. If the news cannot catalyze a rally, a move back to the bottom of the range is expected but would present a deeper value higher yield opportunity provided no bad news is delivered. Before you consider Kohl's, 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 Kohl's wasn't on the list. While Kohl's currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
U.S. interest payments on its debt are set to exceed defense spending. Should we be worried? 2024-03-01 15:40:00+00:00 - Americans are familiar with the impact of higher interest rates, which are making it more expensive to carry credit card debt or buy homes and cars. But the federal government is also getting walloped: Spending on interest on U.S. debt is now the fastest growing part of the budget, and even projected to overtake national spending on defense this year. Federal spending on interest payments is forecast to hit $870 billion this year — exceeding the $822 billion that the nation will spend on defense in 2024, according to a recent analysis by the Congressional Budget Office. This year's outlay for interest payments represents a 32% increase from last year's $659 billion in interest expense. To be sure, higher interest rates aren't the only factor raising the cost of servicing the country's debt. Over the last decade, the U.S. has almost doubled its outstanding debt, which surged to $33 trillion last year from $17 trillion in 2014, according to Treasury data. Why interest payments have soared The nation's ballooning debt stems chiefly from tax cuts enacted by former President Donald Trump in 2017, as well as the surge in federal aid to keep the economy afloat during the pandemic (assistance authorized by both Trump and President Joe Biden). On top of that, with the Federal Reserve turning to its most effective anti-inflation tool — higher interest rates — the U.S. is paying more for its growing pile of debt. That's steering the U.S. into uncharted territory, according to some policy experts. The problem, they say, is that the nation's mounting debt and interest payments could eventually squeeze federal spending, making it harder to fund core programs like Social Security or to invest in initiatives that drive economic growth, such as infrastructure or education. "Interest is projected this year to be the second-largest federal program — it means your tax dollars are going to interest instead of going to everything else," said Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, a bipartisan think tank. He added, "As far as I know, interest has never been larger than the defense budget." Last year, U.S. interest payments on its debt amounted to 2.4% of GDP, and the CBO projects that will increase to 3.9% by 2034. While that might sound dire, it's not quite right to directly compare spending on programs like Social Security or defense to interest payments, noted Bobby Kogan, senior director of federal budget policy at the Center for American Progress. For one, interest payments are tied to financing for approved spending — in other words, the money reflects lawmakers' earlier decisions to avoid tax hikes or slash key government programs. "A lot of folks tend to say interest is a waste of money, and that's not true," Kogan told CBS MoneyWatch. "The decision to have interest payments happened because we decided not to do tax increases or spending cuts." Second, spending more on interest doesn't equate with cuts in programs. "It's not true that if interest is higher it's impossible to spend a dollar more on nutrition assistance," he said. "The idea that this interest is crowding out other government spending isn't mechanically definitively true in any sense." $37,100 per person Another key point to consider is that the nation's fiscal outlook is now in better shape than the CBO had projected it to be a year ago. That's largely due to stronger-than-expected economic growth as the U.S. recovered from the pandemic, according to senior Biden administration officials who spoke with CBS MoneyWatch. For instance, the government's 2024 budget shortfall will be $63 billion smaller than the CBO projected almost a year ago. Meanwhile, the cumulative federal deficit over the next decade is on track to be $1.4 trillion less than the agency estimated last year, the recent CBO report added. In the Biden administration's eyes, its efforts to raise taxes on the wealthy and big corporations, as well as recoup billions through IRS audits on the rich, will help boost revenue to fund key programs. Stronger GDP growth is also helping to whittle the deficit, they say. Republican lawmakers, the Biden officials argue, could make the nation's debt and interest payment situation worse by extending Trump-era tax cuts that would add $3.5 trillion to the deficit through 2033. Currently, many of the provisions in the 2017 Tax Cuts and Jobs Act, which largely benefited wealthier Americans and corporations, will expire at the end of 2025, although some GOP lawmakers want to renew the cuts. As it is, the federal government over the next decade is projected to spend a total of $12.4 trillion on interest — the highest amount of interest in any historical 10-year period, according to the Peter G. Peterson Foundation, a think tank that's focused on reducing the federal debt. That's the equivalent of about $37,100 per person, it said. In 2023, the U.S. spent more on interest than on Medicaid, the health care program for low-income Americans, the foundation added. It is urging lawmakers to create a bipartisan fiscal commission that would create plans for lowering debt, among other issues. How the Fed figures into all this Experts say the nation's growing debt and interest payments could play a role in the 2024 presidential election. Republicans have sought to blame the Biden administration for excessive pandemic spending that they contend caused drover up inflation. Economists blame the surge in price on a range of factors, including supply-chain snarls, labor shortages, geopolitical factors such as Russia's war on Ukraine, and spending programs under both the Trump and Biden administrations. The resulting interest-rate hikes by the Fed have been painful for families and small businesses, while also adding to the nation's interest burden, Republican members of the House Ways & Means Committee argue. "Rising interest rates, and the associated cost of servicing federal debt, are a direct result of President Biden and Democrats' inflationary spending spree," the GOP lawmakers said in a December statement. Like American consumers, the U.S. could see some relief when the Fed begins cutting rates, which it is expected to do later this year. But the nation could still be trapped in a cycle of escalating interest payments as the U.S. is on track to take on more debt, Goldwein warned. "More debt leads to more interest, and that leads to more debt," he said. The CBO estimates that debt and interest payments will continue to grow over the next 10 years, with federal spending expected to jump 64% to $10 trillion, compared with $6.1 trillion in 2023. Much of that increase is due to mandatory spending programs, including Social Security and Medicare, whose costs are surging due to the aging U.S. population. In Goldwein's view, tackling the nation's growing debt pile will require lawmakers on both sides of the aisle to focus on both raising revenue through higher taxes and cutting spending. "It's not realistic to deal with it on only one side," he said.
3 Stocks Showing Constructive Pullbacks with Indexes at New Highs 2024-03-01 14:13:00+00:00 - Key Points MongoDB, Eli Lilly, and Adobe are among the leading stocks that are pulling back into potentially constructive patterns as major indexes become extended. It's risky to buy extended stocks; it's frequently a better idea to track those with good earnings estimates and technical support. Exuberance about artificial intelligence has sent broad indexes soaring in a short amount of time. 5 stocks we like better than Adobe One of the most exciting things for an investor or trader is to look at tier account statement, or at the charts of what they own, and see a stock like Nvidia Corp. NASDAQ: NVDA or even the broader SPDR S&P 500 ETF Trust NYSEARCA: SPY or Invesco QQQ NASDAQ: QQQ rallying to new highs. The S&P 500 rallied 29.41% in the past year, while the Nasdaq 100 rose 49.90% during that time. Those indicate that the market is extended and it wouldn’t be surprising to see a pullback, meaning that investors may be taking extra risk when making a purchase right now. Get Adobe alerts: Sign Up Entering Overbought Territory? Extended indexes often indicate overbought conditions, where prices may have risen too far, too fast, increasing the risk of a subsequent correction. Also, extended indexes may reflect heightened market exuberance or speculative behavior, which could lead to increased volatility and sudden reversals. An obvious driver in this regard is artificial intelligence. The potential here is real, but there’s the possibility that investors have been piling in due to fear of missing out. However, there are several leading stocks forming potentially bullish formations as they pull back from highs, making them worth watching. Those include MongoDB Inc. NASDAQ: MDB, Eli Lilly & Co. NYSE: LLY and Adobe Inc. NASDAQ: ADBE. AI Capabilities Driving MongoDB While it’s prudent to watch for AI overexuberance, database specialist MongoDB is an example of a stock that’s rallied due to AI-powered search capabilities. The MongoDB chart shows the stock pulling back in the past three weeks after notching a gain of 9.47% so far this year. The stock is finding support at its 50-day moving average, a constructive development, as it means institutional investors are likely taking some profits after a run-up, but not bailing out entirely. The stock is currently in a buy zone, as it trades between its 50-day line and its previous high of $509.62. MongoDB reports earnings on March 7 after the closing bell. The company has guided toward earnings in a range between 17 cents and 20 cents per share, but any negative news has the potential to send the stock sharply lower; investors should always use caution in the days immediately before an earnings report. Eli Lilly EPS Expected to Nearly Double Eli Lilly stock rallied to a new high of $794.47, buoyed by strong sales of weight-loss drug Zepbound and diabetes treatment Mounjaro Analysts expect Lilly earnings to grow by 96% this year and by another 44% next year. In the most recent quarter, blockbuster Zepbound brought in revenue of $175.8 million, twice what analysts had forecast. Mounjaro sales totaled more than $5 billion in its first year on the market. The company also said tirzepatide, the basis of Zepbound and Mounjaro, has early clinical trial data indicating the potential to treat a type of liver disease that currently has no FDA-approved medications. The Eli Lilly chart shows the stock closing in a fairly tight range in the past two weeks. That type of chart action is often a bullish indicator, signaling that investors are holding shares after a run-up, before resuming their buying. Adobe Rebounds off 200-Day Line Abode stock fell 13% the week ending February 16, as investors became spooked after Microsoft Corp. NASDAQ: MSFT-backed OpenAI introduced Sora, an application that can generate sophisticated videos from commands. Sora, which is still being tested and is not yet available to the public, may be a significant rival to Adobe's Creative Cloud suite of products, which includes video creation software. However, it’s a bullish sign that Adobe stock found support at its 200-day line, and began rallying after the company introduced a generative AI tool, AI Assistant for Acrobat and Reader, to create summaries of long documents. Analysts expect Adobe to report an earnings decline this year, but rebounding with double-digit growth in 2025. The decline is due to business users slashing expenses, but analysts see revenue bouncing back as the company rolls out more AI applications. However, as the recent Sora-driven downturn illustrates, cheaper alternatives to Adobe’s suite of products may cut into revenue in the future. Before you consider Adobe, 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 Adobe wasn't on the list. While Adobe currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
New York Community Bancorp shares plummet amid CEO exit and loan woes 2024-03-01 14:00:00+00:00 - Shares of New York Community Bancorp plunged by double digits on Friday after the sudden exit of the regional bank's longtime president and CEO. The departure coincides with the bank's disclosure of "material weaknesses" related to loans. Thomas Cangemi relinquished his leadership roles at the bank after 27 years, with Alessandro DiNello, who serves as its board's executive chairman, succeeding him, the bank said in a statement late Thursday. The bank also said in a regulatory filing that it had discovered "material weaknesses" in loan controls and took a $2.4 billion charge. After plummeting almost 30% at Friday's start, shares of the Hicksville, N.Y.-based commercial real estate lender bank were lately down nearly 23%, and have lost more than half their value this year. The bank — a major lender to New York City apartment landlords — is not able to file its annual report with the Securities and Exchange Commission, and will have to amend its fourth-quarter results, it said in the Thursday notice to regulators. "As part of management's assessment of the company's internal controls, management identified material weaknesses in the company's internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities," the bank said in the filing. The developments come after the company in January said it was stockpiling cash in the event of possible loan troubles. No banking crisis, analyst says NYCB's struggles come nearly a year after three midsize lenders were seized by regulators after deposit runs, with the Federal Deposit Insurance Corp. then selling off the assets of the collapsed entities. Following those bank failures, NYCB subsidiary absorbed the deposits and some loans from one of the institutions, Signature Bank. Yet while NYCB's struggles could be viewed as a warning sign for other regional banks or lenders with sizable commercial real estate loan portfolios, one analyst is pushing back on the idea. "A lot of the issues are NYCB-specific when it comes to multi-family lending," Steve Moss of Raymond James told CBS News. He added that NYCB's problems are unrelated to it acquiring Signature's assets, noting that NYCB appears to have been issuing a lot of interest-only loans, without equity from borrowers. Moss also thinks the bank can work through its current woes. "There is coverage for uninsured deposits, they should have the liquidity to manage through this difficult time," he said.
Harvard Business School grad targeted fellow alumni in Ponzi scheme, New York attorney general says 2024-03-01 13:08:00+00:00 - A Harvard Business School graduate is accused of targeting his own, deceiving fellow alumni into investing in a Ponzi scheme. New York State Attorney General Letitia James, in a court order filed this week, accuses HBS alum, Vladimir Artamonov, of swindling investors out of $3 million. James urged any investors who lost funds to file a complaint. James' office alleges that Artamonov used his HBS network to court investors in a Ponzi scheme that defrauded at least 29 people, many of whom were connected to HBS, of at least $2.9 million in funds. A Ponzi scheme is a type of investment fraud involving an organizer who promises risk-free, high returns and pays investors with new backers' funds, not investment profits. These kinds of schemes don't generate returns but depend on a constant stream of new money to survive. The New York AG has secured a court order that effectively shuts down Artamonov's alleged scheme. Her office said it became aware of the activity after being alerted of the death of an early investor who took his own life after discovering he had lost $100,000 in funds. "Even after the tragedy, Artamonov continued to solicit new investors and lied to them regarding the fund's strategy and performance," James' office said. Anyone can be duped The case highlights that even those with prestigious backgrounds in business or finance can be duped into making unsavory investment decisions, particularly when an opportunity is presented by a trusted contact. "Even sophisticated investors can be conned by fraudsters, especially when personal relationships and networks are used to build a false sense of trust," Attorney General James said in a statement Thursday. "Vladimir Artamonov used his alumnus status from Harvard Business School to prey on his classmates and others while seeming legitimate and dependable. Instead, he has been scamming people out of their investments, with horrific consequences. Today, we have put a stop to this scheme and encourage anyone who has been defrauded to come forward to my office." Artamonov graduated from HBS in 2003 with a master's degree in business administration and later moved to New York where he worked as a securities professional. He called his investment fund "Project Information Arbitrage" or the "Artamonov Fund." In courting potential investors, he claimed to have advance knowledge of Berkshire Hathaway's investment decisions by way of public state insurance filings. He likened his insights to "having a private time machine" or "getting tomorrow's newspaper today," projecting fund returns of 500% to 1,000%, according to the AG. "In reality, Artamonov used his investors' money to buy short-term options that expired within days of purchase and appeared to have no relation to Berkshire Hathaway or its investment activities," the AG's office said, adding that Artamonov funded a cushy lifestyle for himself using investors' money. James' court order requires Artamonov to testify and produce books and records to guide an ongoing investigation. Harvard Business school declined to comment on the matter when reached by CBS MoneyWatch.
Toyota recalls 381,000 Tacoma trucks in the U.S. over potential rear-axle shaft defect 2024-03-01 10:43:00+00:00 - Toyota is recalling roughly 381,000 Tacoma trucks in the U.S. because of a potential rear-axle shaft defect that could cause the driver to lose control of the vehicle, the car maker said in a notice posted by the National Highway Transportation Safety Administration (NHTSA). "Welding debris left on the ends of the rear-axle assembly during manufacturing could cause certain retaining nuts to loosen over time and eventually fall off, potentially causing a part to separate from the axle. If separation occurs, this can affect vehicle stability and brake performance, increasing the risk of a crash," Toyota said in a statement. The recall covers 381,199 Toyota Tacoma trucks from the 2022 and 2023 model years. Drivers operating vehicles with loosened nuts may detect a vibration, abnormal noise or leakage of differential oil, also known as gear oil, which is found in the axle housing. Customers will be notified of the recall through the mail by late April, Toyota said. For all impacted vehicles, Toyota dealers will inspect the rear axle assembly and retighten the axle retaining nuts for free. Any axle components damaged as a result of the problem will be repaired or replaced. For more information, owners of affected Tacoma trucks can visit Toyota.com/recall or nhtsa.gov/recalls and enter their Vehicle Identification Number or license plate information. For any additional questions, Toyota customer support is also available by calling the Toyota Brand Engagement Center at (800) 331-4331.Owners may also contact NHTSA's safety hotline at (888) 327-4236 (TTY 1-800-424-9153) or go to www.nhtsa.gov. The NHTSA recall notice is No. 24V15200 and can be viewed here.
Why everyone is suddenly talking about Nvidia, the nearly $3 trillion-dollar company fueling the AI revolution 2024-02-24 12:00:00+00:00 - The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular — Nvidia — to power the revolution. On Tuesday, Nvidia shares were up another 5%, leading the Nasdaq stock index, which represents technology firms, to a new all-time high. Over the past 12 months, Nvidia shares are up some 180%. What makes Nvidia so special? Origins Founded in 1993 — famously, over a meal at Denny's — Nvidia designs a special kind of programmable computer chip. For decades, Intel and Advanced Micro Devices had dominated the U.S. chip sector. But those companies specialized in producing CPUs — central processing units, which serve as the foundation for basic computing and software processes. Nvidia, meanwhile, specialized in graphics processing units (GPUs). As their name suggests, GPUs are better able to render images, which meant that they were first associated with video and computer games. But it turns out GPUs are also able to perform calculations concurrently in a way that regular CPUs cannot — making them more energy efficient and better able to handle sophisticated computing demands. Over time, the other big chip makers began manufacturing their own GPUs to compete — but Nvidia, having enjoyed a first-mover advantage in the space, was where companies began to turn to for GPU needs. It combined its chips with a suite of accompanying software that programmers simply preferred. Plus, its supply chain allowed it to produce GPUs in larger volumes, faster, and more reliably, than its rivals. For instance, auto companies began turning to Nvidia chips for use in driver-assistance software that must process image information from sensors. Nvidia hardware is now found in all Tesla vehicles. Still, until 2020, Intel was a larger company by market capitalization than Nvidia. Pandemic surge turns into AI revolution During the pandemic, the shift to remote work and subsequent demand for data centers that could enable cloud-based computing — plus even more interest in video games while everyone was stuck indoors — accelerated Nvidia’s revenues even further. Then Silicon Valley, led by OpenAI, began to realize the potential of artificial intelligence to transform how all companies do business. The Nvidia ecosystem, from its software to its sourcing of materials, allowed it to position itself as the go-to source for companies that needed massive computing power to handle their AI needs. Nvidia's fortunes have since gone stratospheric: Today, it is worth nearly $3 trillion according to its current stock price — nearly as much as Apple. Company co-founder and CEO Jensen Huang acknowledged in an interview with CNBC last year that a combination of luck and skill has led to the company’s success. “We just believed that someday something new would happen, and the rest of it requires some serendipity,” Huang said. “It wasn’t foresight. The foresight was accelerated computing.” Today, virtually every major tech company, including Amazon, Google, Meta, Microsoft and Oracle, has made use of Nvidia chips. Bloomberg News has called Nvidia’s chips the “workhorse for training AI models,” and PNC Financial Services Group analyst Amanda Agati described Nvidia’s lead in the category last fall, based on its valuation, as a “quasi monopoly.” For Moody’s Senior Vice President Raj Joshi, Nvidia represents the “dominant” infrastructure player behind the current rise of the AI sector. While other chip designers continue to work to catch up to Nvidia, the company’s three decades’ worth of GPU specialization — represents a massive advantage, he said. “This emerging field [AI] is better supported by GPUs,” Joshi said in an interview with NBC News, adding: “Nvidia is providing the foundation for it in most cases.” Nvidia also offers solutions for other sectors, like health care, that are not specifically tech-oriented, Joshi said. “They have a big lead in these markets,” he said. Playing catch-up Nvidia’s specialization means it is able to charge a premium for its products. In fact, its chips, which are manufactured in Taiwan, are so unique that companies looking to build AI capabilities are complaining that there is a shortage of them. While the Biden administration’s 2022 CHIPS and Science Act is designed to spur development of GPUs — and do so on U.S. shores — there is already concern about keeping up with market forces. “The volume of chips that [AI companies] project they need is mind-boggling,” U.S. Commerce Secretary Gina Raimondo said this week. She suggested even more federal subsidies would be needed if the U.S. hoped to be a meaningful player in chip manufacturing. “I suspect there will have to be — whether you call it ‘CHIPS Two’ or something else — continued investment if we want to lead the world,” Raimondo said during a virtual appearance at an Intel event. “We fell pretty far. We took our eye off the ball.” In the meantime, investor interest in Nvidia remains frenzied. While some have speculated that its success could be a bubble, many Wall Street analysts say its financial statements have been proof that its product is viable. “The health of their core data center business is genuinely stunning,” Goldman Sachs’ Tony Pasquariello wrote in a note to clients Friday. Because it is now so much more valuable, Nvidia’s financial results carry greater weight for major stock indices, acording to Agati, who is chief investment officer and managing executive for investments at PNC. In other words as Nvidia goes, so goes the stock market. “[Nvidia] has become critical to the market’s path forward,” Agati said in an email to NBC News, adding: “In the saying ‘data is the new oil,’ Nvidia continues to prove it is in a league of its own.”
'Barbie' Oscar nominations snub discourse has lost the plot 2024-01-25 15:43:35+00:00 - Fans of “Barbie” are outraged that the movie was “snubbed” in this year’s Oscar nominations. Even though the movie was nominated for eight awards, “Barbie” stans are furious that Greta Gerwig wasn't nominated for best director or Margot Robbie wasn't nominated for best actress. The two snubs mark a miscarriage of justice in the eyes of “Barbie” partisans, who have been circulating memes arguing that the Academy of Motion Picture Arts and Sciences has replicated the patriarchal norms that the movie objects to. Ryan Gosling, who was nominated for best supporting actor for his role as Ken, released a statement saying Gerwig and Robbie should’ve been recognized because they “made history.” Former Secretary of State Hillary Clinton published a post on social media standing in solidarity with Robbie and Gerwig. She included the hashtag #HillaryBarbie. This debate means a lot to some people, which speaks to how skillfully Gerwig walked the narrow art-commerce tightrope. But it also overstates what is liberating about "Barbie" and understates what's oppressive about it. "Barbie” is witty and extremely fun, and it featured a thorough and compassionate examination of how patriarchy traps not only women but also men with its oppressive value system. Yet it’s misguided to think the film objectively deserved to receive more nominations than it got — or that not being nominated for 10 Oscars can only be explained by obvious misogyny. The bigger tragedy here may be that “Barbie” is being decorated at all. “Barbie” was an actual two-hour toy commercial backed by Mattel that, by its very nature, could never offer us radical ideas about feminism and power in society. The academy — which consists of thousands of film industry professionals who generally vote in the categories that they specialize in (directors for directors, actors for actors, etc.) — hardly showed disrespect for a movie that was nominated eight times, including for best picture. “Barbie” was one of the most nominated films at the Oscars. And while it’s safe to assume that sexism and all other forms of prejudice are at play during every Oscars cycle, outrage over “Barbie” has helped obscure the good news that more female directors received best picture nominations this year than ever before. The academy seems generally fond of the manifestly talented Gerwig. She is the first filmmaker in history to have had her first three solo features, all of which feature rebellious women, nominated for best picture. One of those movies, “Lady Bird,” also landed Gerwig a best director nomination. Robbie is no stranger to Oscar nominations herself, having been nominated multiple times before, including for best actress. The issue, some “Barbie” fans argue, is the asymmetry between Gosling’s nomination and Gerwig’s and Robbie’s non-nominations. But there are confounding variables. Gosling was in the least competitive category of the three — supporting actor — and benefited from a script that positioned him to deliver many of the funniest lines in a comedy. Gerwig faced stiff international competition and was passed over by a pool of voters — directors — who are also averse to nominating comedies and commercial blockbusters. (“Barbie” was both.) And somehow this crowd seems to be overlooking that America Ferrera, who plays a Mattel employee, was nominated for best supporting actress. There is of course no way to rule out the way that biases shape any nomination process. But getting too litigious about these things is unreasonable. Despite what today’s fervent fandoms seem to take as an article of faith, no film “deserves” any kind of special recognition any more than your favorite color or your favorite food deserves special recognition as my favorites. This is about subjective judgments and expressing taste. And as far as my own taste is concerned, I’m sympathetic to the argument “Barbie” should’ve been snubbed completely. "Barbie’’ was the first product of Mattel’s in-house film division, which saw the movie as a way to boost the sale of Mattel products. Mattel had to convince Gerwig, one of the most talented young directors in America, into making something that Mattel saw as a giant ad. Mattel’s goal was to boost sales, and it succeeded in that goal. Perhaps most harrowingly, the success of “Barbie” appears to have spawned a new subgenre of toy-centric films backed by toy companies, which may mark the next chapter of intellectual property hell as lifeless superhero films finally begin to decline in popularity. Like with "Barbie," these high-dollar projects are soaking up top directing and acting talent who could otherwise be making exciting art that isn't likely to be controlled by toy sales projections. Gerwig did the best job imaginable given the source material. The movie not only feels fresh, but it featured criticisms of previous Barbie toys as retrograde and Mattel as an opportunistic, profit-seeking entity. But despite reports that Gerwig had freedom over the creative process, she had to have known that she was making a movie backed by (and in conversation with) a commercial entity that clearly would’ve drawn lines over certain criticism, political orientations and artistic flourishes. Robbie Brenner, an executive producer of Mattel Films, told Time magazine that “Barbie” is “not a feminist movie.” That doesn’t mean it doesn’t include some feminist ideas — it does — but Brenner’s remark reminds us of the risk-averse corporate interests and the implicit boundaries around the project. Given Mattel’s oversight, one has trouble imagining, say, a deeply pessimistic take on women's liberation, or a socialist feminist perspective, or a radical attack on the very idea of gender making its way into the movie. Ultimately, "stereotypical Barbie" is the hero of the film. As much as Gerwig’s movie is critical of Barbie dolls for promoting unhealthy ideas about womanhood, it features a redemptive arc for the toy. At the end of the film, Barbie Land is set on the path of gender harmony, and Robbie's Barbie spends time with a character who represents Ruth Handler, the original creator of the doll. The real-life Handler reportedly declined to identify as a feminist and came up with the idea for Barbie after seeing a German doll that was a sexualized gag gift for adults in the mid-20th century. Her Barbie designs represent a complicated relationship with women’s empowerment. But she is presented in an unambiguously positive light in the movie. Is that how Gerwig really feels? Or did she feel the need to soften her blows against Mattel? We don’t know. Instead of making a call to arms over the nominations garnered by a movie seeded by a toymaker to sell more toys, we should be looking to bring about a quick end to this inherently stifling subgenre of movies that toy companies are about to roll out. Rather than send memes denouncing the academy for a nomination she didn’t get, those rooting for Gerwig, like I am, would do better to wait until the next time she serves up something exciting and free from this suppressive model of film creation.
Why Barbie's Oscar nomination snubs for Margot Robbie and Greta Gerwig hit deep 2024-01-23 22:19:48+00:00 - The “Barbenhemier” showdown has been a media story ever since the blockbusters “Barbie” and “Oppenheimer” set summer box office expectations ablaze. Everything about the two films has been measured against each other, from reviews to audience attendance and, finally, to the year’s top awards. The snubbing of the movie's lead actress, Margot Robbie, and female director, Greta Gerwig, has fans and critics alike feeling like the academy missed what “Barbie” was saying. Although “Barbie” was nominated for eight Oscars on Tuesday, including best picture, the high-level snubbing of the movie's lead actress, Margot Robbie, and female director, Greta Gerwig, has fans and critics alike feeling like the academy completely missed what “Barbie” was saying. As America Ferrera’s character says during the film’s key scene, women are always caught in a no-win situation. They have to be pretty, but not too pretty, smart, but not so smart that men are intimidated. Those who saw the film may have felt like “Barbie” was preaching to the choir, but Robbie and Gerwig getting snubbed like this is a reminder that some truths need to be spoken often, out loud and to every audience. The optics of two of the eight nominations for an openly feminist movie going to Ryan Gosling, its male lead, were hard to ignore and added to the frustration. Gosling was nominated for best supporting actor and for his performance of the song “I’m Just Ken.” Ferrara was nominated for best supporting actress. Yes, Barbie was nominated for best picture, but a film that doesn’t have a best actor nomination, a best actress nomination or a best director nomination rarely lands the award for best picture. At the end of Tuesday’s announcements, “Oppenheimer,” nominated for 13 Oscars, sat pretty with a full topline slate of nominations. The best picture nod for “Barbie” felt more like the nomination given to “Black Panther” back 2019. That is, the nomination felt more like a grudging acknowledgement that “Barbie” took in all the money. But if “Black Panther” is the guide, the academy has no intention of following through with votes. ABC might still market the March 10 ceremony as “the ‘Barbie’ vs. ‘Oppenheimer’ showdown” to try to juice ratings. But those who know the way the Academy Awards work know the contest is already over. To be fair, this was probably always going to be the outcome. The Oscars routinely deny films that make bank at the box office the top prizes, as if broad popularity is a sign of inferior art. The domestic intake for “Barbie” was basically double that of “Oppenheimer,” and worldwide, Mattel’s princess walked away with more than $1.4 billion, while “Oppenheimer” barely broke $950 million. To the point Ferrara’s character made about the no-win situation women face, in similar fashion, “Barbie” the movie had to be good, but not so good that it made money at the box office hand over fist. Robbie had to be fantastic in the role, but not so funny that her performance wouldn’t be taken seriously or considered for best actress. Although her red-carpet moments had to stand out, her re-creations of famous “Barbie” outfits through the decades were derided by some as “cosplaying.” Gerwig had to be a serious director making a feminist movie about the pain of being a woman, but not too serious lest she be considered joyless. Her jokes had to be sharp, but not so sharp that they made men uncomfortable, which is likely what happened with the movie’s final joke about vaginas. Fans of “Barbie” should admit that the movie was never going to be allowed to win against “Oppenheimer.” While there’s still the formality of the show that needs to be staged, fans of “Barbie” should admit after the announcement of the nominations that the movie was never going to be allowed to win against “Oppenheimer.” Because “Oppenheimer” is about serious things that men value, while “Barbie” is a quiet reminder that the things women value are never deemed as important. No matter how many strides forward we might make, no matter how many inner Weird Barbies we embrace, the finish line will always move, and we’ll always be given second place, even if our only competitor is Just Ken.
A Golden Globe for ‘Killers of the Flower Moon’ won't give Osage justice 2024-01-08 14:33:55+00:00 - UPDATE (Jan. 8, 2023 9:30 a.m. ET): On Sunday, "Killers of the Flower Moon" star Lily Gladstone won for best actress in a motion picture, drama. Gladstone is the first Indigenous actress to win a Golden Globe, ever. “Killers of the Flower Moon,” nominated for seven Golden Globes on Monday, unspools a dark chapter in our nation’s history, unknown to many: "the Osage Reign of Terror." Greed and inhumanity in 1920s Oklahoma drove meticulously orchestrated murders and the appropriation of the Osage Nation’s significant oil wealth. Central to this exploitation was the theft of ‘headrights’ — a financial inheritance Osage citizens acquired from leasing their oil rights, making them the wealthiest community globally, per capita, during this moment in history. Amid the chronicle of the ruthless efforts to drain the Osage Nation’s affluence, the film briefly mentions the parallel attempt to destroy the nation’s wealthiest Black community at that time: Greenwood, located just a few miles from the Osage Nation. This attack on Black Oklahomans culminated in the infamous Tulsa Race Massacre. As a son of Greenwood and a lawyer based in Tulsa, I have lived in Osage County while seeking reparations for the last two living survivors of that massacre. With “Killers of the Flower Moon” receiving more and more award recognition, I want to pose a question for the nation that I’ve long asked for Black Tulsans: What are we going to do as a society for the Osage whose oil rights were stolen and remain in the wrong hands today — as well as others in our society who faced similar injustices? Both the Osage Nation and the descendants of the Tulsa Race Massacre victims deserve a shared outcome – justice in its truest sense. You might wonder why a lawyer representing survivors of the Tulsa Race Massacre is addressing this issue. The answer is straightforward: Both the Osage Nation, exploited for its ‘headrights,’ and the descendants of the Tulsa Race Massacre victims deserve a shared outcome – justice in its truest sense. Both tales are grounded in the allure of prosperity. The Osage — by virtue of their oil-rich lands — and Greenwood — propelled by the industriousness of its Black residents — resisted the economic sidelining typically imposed on them in early 20th-century America. Yet, their prosperity was countered with greed, brutality and theft. From the Osage Reign of Terror to the annihilation of Greenwood, economic exploitation was fortified by systemic violence. Following a period in which the Osage were deliberately targeted, coerced into marriages and often murdered for their headrights in sheer greed, many headrights left the Osage Tribe. A century later, the repercussions of this terror persist. Currently, 25% of all headright payments, initially intended for the Osage, are received by non-Osages. A few cases involve bequeaths from Osage estates, Bloomberg News reports, but many holders — ranging from Stanford University to the Catholic Archdiocese of New York — could not or would not explain how they had come to hold headright shares. And regardless of provenance, the Osage Tribe has asked for headrights held by non-Osages to be returned. But returning headrights barely begins to redress the wrongs done to the Osage. True justice for these communities necessitates reparations. Reparations transcend mere compensation; they embody reparative justice. They recognize past injustices, mend wounds and aspire to bridge divides. For years, I’ve been privileged to advocate for the survivors of that calamitous day in 1921. Yet, with the recent passing of Hughes “Uncle Redd” Van Ellis, the need to secure redress for the two remaining survivors, Viola Ford Fletcher and Lessie Benningfield Randle, has become even more pressing. Reparations for the Osage Nation and Greenwood represent not only an economic redress, but also a moral imperative. Since those fateful days more than a hundred years ago, the Tulsa community and my clients have grappled with the catastrophic effects of a massacre that obliterated a vibrant Black community, claiming hundreds of lives and displacing thousands. This event’s painful racial aftermath lingers in Tulsa, a city dear to both my clients and me — with glaring rates of poverty and health disparities in north Tulsa, where half of Black Tulsans reside. But all is not lost. Our fight for reparative justice is still “alive” as last month my team and I filed our last brief with the Oklahoma Supreme Court, asking it to reopen our case against the perpetrators of the massacre, including the city of Tulsa. Crucial to this cause are the testimonies of the two survivors, Mother Randle and Viola Fletcher, shedding light on Greenwood’s ongoing struggles. Cinema like “Killers of the Flower Moon” and television series “Watchmen” (which introduced the Tulsa Race Massacre to a fresh audience) amplify our call for justice by bridging past atrocities with present-day action. Confronted with these revelations, our shock and empathy must morph into tangible actions. Reparations for the Osage Nation and Greenwood represent not only an economic redress, but also a moral imperative. In reflecting upon these interrelated tragedies, we must collectively advocate for reparations, ensuring that history, however unsettling, is recognized and crucially never repeated. Let’s seize this moment to rectify, heal and vow that such atrocities will find no refuge in our shared future.
'Killers of the Flower Moon' is a Native American true story told by white people 2023-10-21 14:38:28+00:00 - “Killers of the Flower Moon,” Martin Scorsese's new big-screen epic starring Leonardo DiCaprio, premiered in theaters just over a week after Americans marked Indigenous People’s Day. Based on David Grann’s bestselling book, the story depicts the brutal serial murders of members of the oil-wealthy Osage Nation in 1920s Oklahoma. Given the inherent drama of the narrative and the buzzy casting, the film seems destined for critical success. But will it usher in a new era for Hollywood’s Native Americans? The film seems destined for critical success. But will it usher in a new era for Hollywood’s Native Americans? Thirty-three years ago, Kevin Costner’s “Dances with Wolves” delivered a watershed moment. After decades of cowboy-and-Indian Westerns, the movie cast Native actors in prominent roles and showed a human dimension to its Native characters. Costner’s epic earned seven Academy Awards, including best picture, and a nomination for Native Canadian actor Graham Greene in a supporting role. The movie also brought in over $400 million worldwide and sparked a mini surge of Native-themed stories, like “The Last of the Mohicans” (1992) and “Geronimo: An American Legend (1993).” Television mini-series like “Son of the Morning Star” (1991) and “DreamKeeper” (2003) followed the same pattern. Even Disney jumped on the bandwagon with its animated hit “Pocahontas” (1995). Many Native actors, including Wes Studi, enjoyed a boost in their careers because of “Dances with Wolves.” But for all its hype, Costner’s epic did not employ Natives Americans in prominent creative roles behind the scenes. Change in the ensuing decades has been incremental. Television has arguably worked the hardest to increase representation, beginning with the 1990 TNT series “The Native Americans. Behind the Legends. Beyond the Myths.” featuring Hanay Geiogamah (Kiowa) as a producer. That same decade brought “Smoke Signals” (1998), the theatrical debut of the Cheyenne and Arapaho filmmaker Chris Eyre. Recently, the streaming series “Rutherford Falls” and “Reservation Dogs” have employed Native artists in front of and behind the camera, including showrunners Sierra Teller Ornelas (Navajo) and Sterlin Harjo (Seminole). Sadly, “Rutherford Falls” was cancelled and “Reservation Dogs” will end after its third season. Now a major motion picture has its chance. “Killers of the Flower Moon” has proudly touted Scorsese’s collaboration with Osage Principal Chief Geoffrey Standing Bear. To the studio’s credit, local Osage talent was hired in various production roles such as the costuming and art departments. But no Native American is credited as being involved in the movie’s screenwriting, production or directing creative processes. This is an ongoing problem. Back in 2020, the Native American & Indigenous Writers Committee of the Writers Guild of America West addressed this same issue in an open letter advising the industry that merely using Natives as cultural consultants was severely limiting. They need to be hired as writers, directors and producers, too. This makes “Killers of the Flower Moon” both an interesting case study and ultimately a missed opportunity. The movie has tried to incorporate some Osage input, but it still is telling this story primarily through the lens of the white main character, played by Leonardo DiCaprio. As Variety has pointed out, DiCaprio grabs the lion’s share of the screen time. And the camera often lingers on his face, even when other characters are speaking. Perhaps one bright spot is the movie’s female lead. Lily Gladstone, an actress of Blackfeet and Nimíipuu heritage, plays the Osage wife of her slippery husband (DiCaprio) and is already garnering some Oscar buzz. “If you’re wondering if you should go see this film, at least go see it for Gladstone’s performance,” advised Osage News editor Shannon Shaw Duty in her review. With her powerful performance, Gladstone joined a small but important club of Native female actors. With her powerful performance, Gladstone joined a small but important club of Native female actors. Elaine Miles stole countless scenes as the unflappable Alaska Native receptionist in 1990s gem “Northern Exposure.” Jana Schmieding of “Rutherford Falls,” Devery Jacobs and Paulina Alexis of “Reservation Dogs,” Sheila Tousey in “Thunderheart” (1992), Irene Bedard in “Lakota Woman: Siege at Wounded Knee” (TV 1994), and the late Misty Upham in “Frozen River” (2008) all won accolades for their portrayals of strong, independent Native women. And Amber Midthunder’s starring role as a young Comanche warrior in Hulu’s release of “Prey” (2022), a prequel to the “Predator” series, proved that Native women can carry blockbusters. “Prey” was produced by Jhane Myers of the Comanche Nation; she was nominated for a Producers Guild Award and a Primetime Emmy Award. Gladstone’s presence and strength may very well continue to open doors for Hollywood’s Native women. But without Native American artists behind the camera in prominent positions, as well as in front of it, Hollywood will struggle to tell Native stories authentically — or without centering and privileging whiteness. Lily Gladstone deserves better, just like the real Osage victims of this white supremacist reign of terror did all those decades ago.
Yellow employees getting paid a day late; $92.9M in vacation time in limbo 2023-08-10 - Former Yellow employees told FreightWaves they're still waiting for pay for accrued vacation time. (Photo: Jim Allen/FreightWaves) Yellow employees who were expecting what are likely their final paychecks Thursday will instead receive them Friday, according to a company official. “Employees who are on a weekly pay schedule and are normally paid on Thursday will be paid on Friday this week, one day late due to the court hearing,” the official told FreightWaves in an emailed statement. Four truck drivers and dockworkers based around the U.S. told FreightWaves that they had not received their final paychecks, which they expected Thursday. Some former employees of Yellow sounded off on social media and messaging boards Thursday, frustrated that they had not received their final paychecks. Yellow, which filed for bankruptcy on Monday, laid off most of its staff of about 30,000 employees over the past few weeks. Approximately 23,000 of those workers are represented by the Teamsters, according to its Monday bankruptcy filing. The company ceased regular operations on July 28, as FreightWaves first reported. Truck driver William Stephens is one of those laid-off employees represented by Teamsters. He worked for the trucking giant for seven years at a Columbus, Ohio, terminal. When he checked his payroll portal on Tuesday, he was happy to see a final pay stub from Yellow. The payment, according to a document viewed by FreightWaves, was supposed to cover days worked between July 23 and July 29. However, when Stephens checked his bank account on Thursday, there was no payment from Yellow. And his employee portal access was shut down. The Yellow company official wrote in a statement that the company is doing “all it can to provide employees with compensation to which they are entitled.” Yellow also pointedly blamed Teamsters leadership for the company’s closure. “IBT leadership is solely responsible for destroying 30,000 jobs,” the spokesperson said. “Yellow was forced to file for bankruptcy on August 6th as a result of the IBT’s nine month refusal to negotiate the company’s long-planned modernization effort, One Yellow, which included significant pay raises for employees. Sadly, Teamster leaders did not care enough about Yellow’s union employees to discuss their contract until after the IBT had driven away all business and it was too late. Yellow fought until the end to save employees’ jobs. Yellow is working through the bankruptcy process. The timing of this process and legal determinations are not under the company’s control. Yellow will do all it can to provide employees with compensation to which they are entitled.” Story continues Meanwhile, the Teamsters wrote in a statement on Sunday that Yellow “abandoned its entire workforce” with its Chapter 11 filing. The organization noted that it would support members through the bankruptcy proceedings. “Our members’ loss of work at Yellow was no fault of their own. They should be the first in line for real relief as bankruptcy moves forward,” said John A. Murphy, Teamsters national freight director. “While Yellow’s closure represents one last shameful act by a greedy employer, the Teamsters will never desert our brothers and sisters. We will do everything we can to prioritize our members at Yellow and their families during forthcoming bankruptcy proceedings.” Yellow nearly filed for bankruptcy several times over the past 15 years. Teamsters estimates that, since 2009, its members have given away more than $5 billion in wage and benefit concessions to support Yellow. Most recently, the trucking company received a $700 million loan from the U.S. Treasury in 2020 to avoid collapse. For Stephens, the lack of communication has come as yet another disappointment during these last few weeks of Yellow’s shutdown. “No one ever called me or anyone in Columbus or anything about being laid off,” Stephens said. “We never got a notice in the mail. Nothing. We went to work and saw the gates locked. It’s just disappointing – you would think a big company like that would at least notify you that you don’t have a job anymore.” A dockworker in Oklahoma City, who asked that her name not be printed as she looks for another job, is also waiting for her last check. She said she learned she was out of a job from a piece of paper taped to a stop sign at her terminal stating company operations had ceased. Vacation time pay remains in limbo for former Yellow employees Two laid-off Yellow employees who were not represented by Teamsters told FreightWaves that they did receive their final paychecks last Friday. However, they said they did not receive payment for unused vacation time. Yellow wrote in its separation agreement dated July 28 that laid-off employees would receive payment for unused vacation “[a]s soon as administratively practicable.” Eight Teamsters members who previously worked at Yellow also said they had not received payment for accrued vacation time. Another truck driver based near Columbus, Ohio, who had worked for Yellow for 19 years said he has about four weeks of unused PTO. Arcadio Gonzlalez, a former Yellow employee based in Wheeling, Illinois, said he has some 130 hours unpaid — roughly equal to more than three weeks of unpaid vacation. Yellow revealed in a Monday bankruptcy filing that it would seek $92.9 million to pay outstanding PTO. However, it’s immediately asking $8,725,000 to pay wages. It’s unclear how much of those wages will go toward recently laid-off employees or Yellow’s “core group” of around 1,650 remaining employees. Do you have a story to share about Yellow’s shutdown and bankruptcy? Email rpremack@freightwaves.com. The post Yellow employees getting paid a day late; $92.9M in vacation time in limbo appeared first on FreightWaves.
Guggenheim CIO Says Credit Market Is ‘Next Shoe to Drop’ 2023-08-10 - (Bloomberg) -- While calls for a soft-landing are piling up on Wall Street, Anne Walsh is staying on the defensive. Most Read from Bloomberg The chief investment officer of Guggenheim Partners Investment Management, which manages more than $225 billion, is hiding out in high quality bonds while bracing for lower quality parts of the credit market to get hit. “I don’t think the market is really pricing in the next shoe to drop, and that’s credit,” she said on Bloomberg Television. “Recession seems to be off everybody’s mind, but I think that’s probably a mistake at this point in time.” Walsh sees lower-quality borrowers at risk with the prospect of a higher-for-longer Federal Reserve and rising downgrades, defaults and bankruptcies. Higher quality credit is less of a concern. Yields over 5.5% on investment grade bonds are “attractive,” and the spread widening that happens in recessions is not likely to have a big impact on that space, she explained. “For those borrowers and credit takers who have cash and have the wherewithal for repayment right now, they’re going to come through the cycle pretty well,” she said. “The problem is the weaker credits, those that don’t have a lot of cash sitting on the sidelines,” Walsh said. “They’re not able to offset these higher costs of capital with reinvestment in cash instruments.” Walsh also likes US government bonds, as yields have remained in a relatively stable trading range and offer investors the opportunity to wait on the sidelines, investing in lower rated credit in the future if spreads get more attractive. “I think it’s a really good time to be defensive and thoughtful and wait for the next opportunity set,” said the CIO. Story continues Walsh expects the US recession to be a “rolling one,” where different parts of the economy are hit and other, stronger capitalized parts are spared. She also highlighted that the market hasn’t yet reacted to the commercial real estate cycle, where the cost of leverage is still high for borrowers and some tenants are vulnerable. “If you are a small developer who owns a handful of small office buildings in a suburban location, and you’re now paying 6% for your debt, and all of a sudden your tenants are starting to walk out the door, now you’ve got a problem,” Walsh said in a separate interview. She will be closely assessing the health of consumer spending over the next several months to determine the extent of policy tightening working its way through the economy. She also said that while Thursday’s CPI print means the Federal Reserve is done hiking interest rates, the central bank is still tightening through shrinking its balance sheet. “I think we’re done with the hikes right now, but then there’s QT still going on,” said Walsh. “Don’t ignore that.” --With assistance from Alix Steel. Most Read from Bloomberg Businessweek ©2023 Bloomberg L.P.
GM Shares Drop After Warning Battery Issues Are Slowing EV Production, Again 2023-08-10 - Key Takeaways GM once again noted that issues in producing new Ultium battery packs is slowing the manufacturing of its electric vehicles. CFO Paul Jacobson and CEO Mary Barra have both talked about the battery problem recently. Production of the Cadillac Lyriq has been especially impacted by the battery issue. General Motors (GM) shares fell almost 6% on Thursday after the carmaker once again warned that production of its electric vehicle (EV) lineup is being slowed by issues assembling updated battery modules. At a conference, CFO Paul Jacobson repeated concerns that he and CEO Mary Barra had expressed when the company released its second quarter earnings report last month. The battery issue was especially impacting manufacturing of the Cadillac Lyriq. Jacobson said that more than 1,000 were produced in July, but that was well below the rate GM had originally estimated. The company missed production targets last year, and delivered fewer than 2,400 of the luxury SUVs in the first half of this year. Overall, GM produced just 50,000 EVs from January through June, with a large majority of them being the Chevrolet Bolts that use an older battery pack. The new, modular Ultium batteries are made at a plant in Lordstown, Ohio that GM owns with Korea’s LG Energy Solution. Two more battery factories are under construction. Shares of General Motors slipped to their lowest level in more than two months following the news.
Gen Z and millennials are outpacing older generations in 401(k) contributions because they’re so worried they’ll never be able to retire 2023-08-10 - If building wealth is an obstacle course for Gen Z and millennials, they’re willing to jump all the hurdles. The youngest generations contributed more to their 401(k)s last quarter than anyone else at a time when the promise of retirement has never felt less hollow. That’s according to Bank of America’s Q2 2023 Participant Pulse report, released Tuesday, which found that Americans’ average 401(k) balances have increased by $7,250—nearly 10%—since the end of 2022. This quarter, many more of the 4 million workers BofA analyzed increased their contribution rate than decreased it. That push was led by the youngest workers, who contributed more than any other age group: 19.3% of Gen Zers upped their contributions, as did 11% of millennials, compared to 9.7% of Gen Xers and just 7.8% of baby boomers. The momentum among Gen Z and millennials (fewer than 3% of them decreased contribution rates this year) contributing to their 401(k)s is exciting given that older generations usually outpace their younger colleagues both in 401(k) plan participation and contribution, says Lisa Margeson, managing director of external affairs, retirement research, and insights at BofA. Contribution rates can give us a glimpse into how 401(k) plan participants feel about retirement, she tells Fortune. For young professionals, those feelings stem from the economic hardships they’ve weathered in early adulthood. Millennials, who grappled with two recessions before the age of 40, have struggled to accrue wealth amid a volatile housing market, crushing student debt crisis, and a soaring cost of living. Gen Z—many of whom don’t think they’ll ever be able to retire—have borne witness to millennials’ strife and are anxious to avoid falling victim to their same pitfalls. “The onset of the COVID-19 pandemic rocked the economy as Gen Z entered young adulthood,” Charlie Pastor, a financial planner, told Fortune’s Alicia Adamczyk. “Older generations should understand that the next generation of savers has seen a lot of economic turbulence in a short period of time.” Story continues Considering that $1 million is no longer enough to retire in today’s economy, retirement feels far out of reach for many young adults, who want to start saving as early as possible (no wonder Americans’ number one financial regret is not saving enough for retirement). The share of workers unsure they’ll ever be able to retire has grown from 10% to 24% since 2021, a BlackRock report found, with Gen Zers feeling the least confident. It explains why they invest in their company’s retirement plans at significantly higher rates than their older colleagues did when they were their age. Yet, at the same time, a growing number of workers are withdrawing “hardship distributions” from their retirement accounts in an economy that has been marred by sky-high inflation. Thirty-six percent more people have done so this year than last year, BofA found. “The data from our report tells two stories—one of balance growth, optimism from younger employees and maintaining contributions, contrasted with a trend of increased plan withdrawals,” Lorna Sabbia, who leads BofA’s retirement and personal wealth solutions, wrote in the report. But despite dire straits, she added, employees must continue investing in “life’s biggest expense”: retirement. Start ’em young Of course, Gen Z and millennials might be a bit better at saving for retirement because the benefits of saving early have become more widespread over the years. “While saving for retirement is important for all employees, we want to encourage younger employees to get started as soon as possible,” BofA’s Margeson says. “Saving and investing your money early in life will put you on the best path forward.” It’s hard to undersell how crucial investing early really is thanks to the power of compound interest, which has "the potential to magnify regrets about foregone savings over time as a ‘what could have been’ realization becomes more stark,” Greg McBride, Bankrate’s chief financial analyst explained in a recent report on Americans' financial regrets. “At a modest 6.5% annual return, every dollar you put away in your twenties becomes $17 by the time you retire.” Most experts advise contributing at least up to the full employer match to maximize your benefits. But if you’re on an entry-level salary, putting away as little as 1% to 2% of your monthly earnings—if you can afford it—is better than nothing. That compound interest might just be enough to convince Gen Z to save instead of spend, even if it means ditching their rich friends or suffering from vacation FOMO. After all, there will be plenty of time to travel if you can eke out an early retirement. This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
‘Don’t be fooled’ by the uptick in inflation, economist says. Prices are falling, and the Fed now has the ammo to pause its rate hikes 2023-08-10 - The latest inflation data could be a bit misleading to the untrained eye. But “don’t be fooled by the uptick,” said Julia Pollak, ZipRecruiter’s chief economist. “Inflation is slowing, and doing so across a broader range of goods and services.” Headline inflation rose from 3% in June to 3.2% last month, the Bureau of Labor Statistics (BLS) reported Thursday. But the rise was partly caused by changing year-over-year comparisons, and monthly data showed inflationary pressures are stabilizing. Pollak noted that if you annualized the latest inflation data instead of comparing it with last year, when inflation hit a four-decade high, it looks far less intimidating. In July, inflation was 2.52% on a six-month annualized basis and just 1.89% on a three-month annualized basis, she noted. That’s right around the Fed’s 2% target rate. Backing up that view was Rick Rieder, BlackRock’s CIO of global fixed income and head of the BlackRock global allocation investment team. “Today’s CPI [consumer price index] data depicted continued softening in the elevated inflation levels we have witnessed over the past couple of years,” he said, adding that “it’s not just encouraging that today’s report was softer, but also that the three- and six-month trends of these inflationary indicators are decisively lower.” Core inflation—which excludes more volatile food and energy prices and is often seen as a stronger indicator of true underlying inflation—also rose just 0.2% for the second straight month in July, marking the smallest back-to-back gain in the measure in over two years. Year-over-year core inflation remained elevated at 4.7%, again in part owing to base effects, but the trend there was “encouraging” as well, Pollak said. “Wage growth continues to outpace inflation,” she added. “As workers see their purchasing power improve, expect to see consumer spending continue to grow and the labor market continue to be resilient.” For BlackRock’s Rieder, the current inflationary trend should be “encouraging to consumers, as well as to Federal Reserve policymakers.” Fed officials have raised interest rates to a 22-year high in their attempt to quash inflation since March of last year, leading to a flood of recession predictions from Wall Street. But with underlying inflationary pressures fading, Chair Jerome Powell and company may be nearing the end of the painful rate hiking process. Story continues “We remember last year’s soaring prices like they were yesterday, and consequently the Fed will not cut interest rates for a while, but hopefully the central bank can stay on hold for an extended period of time, before presumably starting to cut rates later in 2024, as today’s high prices become merely stable over the coming months and quarters,” Rieder said. A boost for the soft landing narrative Pollak and Rieder aren’t the only ones who saw the bright side of the latest inflation report. Investors celebrated the data on Thursday, with the S&P 500 rising 0.6% by midday. And Charlie Ripley, a senior investment strategist at Allianz Investment Management, argued that the inflation data showed “the soft landing narrative”—that idea that inflation can fade without the need for the Fed to create a job-killing recession—continues to gain traction. Several price categories that had worried economists and the Fed continued to fall in July, including airfare, which sank for the fourth consecutive month, this time by 8.1% month over month, and used cars and trucks, which dropped 5.6% from a year ago. “A building trend of disinflation will certainly be welcomed by the Fed as they prepare for a policy decision at the September meeting,” Ripley said, arguing “the case continues to build” for the end of the interest rate hiking cycle. George Mateyo, CIO at Key Private Bank, which manages $50.2 billion, said that July’s consumer price index data was even “reminiscent of the good old days” before the pandemic, when inflation was far from a problem. “In 2019, the average monthly increase in inflation was 0.2%, and that’s what we’ve experienced in the past two months in 2023,” he noted. “The Fed, therefore, might feel as if they’ve ‘stuck the landing’ and can pause as planned and not raise interest rates in September.” ‘Grounds for caution’ amid inflation’s last stand While there were a number of positive signs in the latest consumer price index data, some economists are still worried that inflation could become “sticky.” Brian Coulton, chief economist at Fitch Ratings, said that although the slowdown in core inflation is clearly “good news,” the CPI report wasn’t all positive. “The pickup in core services inflation to 0.4% month over month from 0.3% in June will be seen by the Fed as grounds for caution,” he warned. “Rents just don’t seem to be slowing by much at all on a month-over-month basis and, given the 34% weight of shelter in the CPI, this is significant.” To Coulton’s point, the index for shelter accounted for over 90% of the increase in inflation last month, according to the BLS. Rent prices have continued to rise throughout the year, even as the average sales price for U.S. homes declined for the second straight quarter over the summer. Morning Consult chief economist John Leer also said that shelter inflation could accelerate by the end of the year. He warned that demand for housing remains “resilient” as the chronic undersupply of homes in the U.S. is overpowering the cooling effect of higher rents and mortgage rates. “While core CPI is showing signs of slower trend growth, future progress in the fight against inflation will be harder, not easier,” he said. “The longer inflation remains elevated, the more entrenched it becomes. The question we should all be asking is how long the Fed is willing to accept core inflation above 4%. My sense is that their tolerance is pretty low, meaning that we shouldn’t expect rate cuts this year.” This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
Stocks close higher after inflation data, Disney pops: Stock market news today 2023-08-10 - Stocks inched higher Thursday as newly released data showed inflation ticked up on an annual basis for the first time in over a year but disinflationary trends remained positive. At the close, the Dow Jones Industrial Average (^DJI) had gained about 0.2%. The S&P 500 (^GSPC) was roughly flat, while the tech-heavy Nasdaq Composite (^IXIC) was up 0.1%. All three indexes had pared larger gains from earlier in the session. The Consumer Price Index (CPI) rose 0.2% over last month and 3.2% over the prior year in July, in line with June's 0.2% month-over-month increase but higher than June's 3% annual increase. Economists surveyed by Bloomberg had expected a 3.3% yearly increase in July. On a "core" basis, which strips out the more volatile costs of food and gas, prices in July climbed 0.2% over the prior month and 4.7% over last year. Both measures were also slightly better than economist expectations. Core inflation increased at its slowest pace since October 2021. Meanwhile, earnings season nears its close, with Alibaba (BABA) and Ralph Lauren (RL) releasing quarterly reports. Shares of Disney (DIS) closed up almost 5% after the media giant said it will raise monthly prices for its ad-free streaming plans. More Yahoo Finance inflation coverage:
California agency to vote on San Francisco robotaxi expansion amid heavy opposition 2023-08-10 - A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company's headquarters in San Francisco where it does most of its testing, in California, U.S., September 26, 2018. REUTERS/Heather Somerville/File Photo SAN FRANCISCO, Aug 10 (Reuters) - Amid strenuous pushback from San Francisco officials and many residents, a California state agency is set to vote on Thursday on a proposal to allow the city to be blanketed in self-driving taxis at all hours. Approval would grant General Motors' Cruise and Alphabet Inc's (GOOGL.O) Waymo the right to expand testing of their autonomous vehicles as paid taxis across the city, putting them in direct competition with ride-hailing providers Uber and Lyft (LYFT.O). The California Public Utilities Commission (CPUC), which has statewide jurisdiction over autonomous vehicle regulation, drafted the proposal after Waymo and Cruise applied for permits that would allow for broader testing of the robotaxis. The companies, which have plowed billions into developing the vehicles, with little revenue, see the vote as a critical next step to broader regulation as they eye expanding into new cities and states. But the vote at the meeting that begins at 11 a.m. PDT (1800 GMT) comes amid vigorous opposition from transportation and safety agencies in San Francisco. They say the robot cars' sometimes unpredictable driving has interfered with fire officials, caused traffic jams and violated other rules of the road and that the companies fail to fully disclose data showing hiccups. They have sought a slower rollout. Cruise and Waymo, in contrast, have asserted their robotaxis are safer than distractable human drivers, have not caused any deaths or life-threatening injuries over millions of collective miles driven and that real-world testing is critical to perfecting the technology. Cruise said at a recent public hearing that it has about 300 vehicles in operation at night and 100 during the day, while Waymo said it has roughly 250. Both are expected to add to that number if the CPUC approves the proposal. The measure has divided San Francisco between locals who resent their city being used as a testing lab for what they say is an unproven technology and those who say they feel the symbolic technology capital ought to be the leader in developing what could lead to fewer traffic accidents and injuries. The CPUC has twice delayed the vote, in part because of the mounting opposition. The CPUC on Tuesday heard testimony from the San Francisco Municipal Transportation Agency that it had logged close to 600 incidents involving autonomous vehicles since spring of 2022 and that they believe that is "a fraction" of the total due to what they say are lax reporting requirements. Outfitted with spinning sensors, Waymo and Cruise vehicles are an arresting sight around San Francisco, particularly to visitors unaccustomed to cars with no human driver behind the wheel. Summoned by app, like ride-hailing trips, the vehicles are allowed to take passengers for free around much of the city, with some restrictions, and can only charge at night. Reporting by Greg Bensinger; Editing by Jamie Freed Our Standards: The Thomson Reuters Trust Principles.
China hailed a property developer with $64 billion in revenue as a role model. Now the country’s property crisis threatens to send it into default too 2023-08-10 - Country Garden was supposed to be a survivor of China’s property crisis. Officials hailed the company, led by chair Yang Huiyan, as a model developer. It avoided default even as competitors missed payments in late 2021 and early 2022. It delivered its audited results on time, while auditors were busy bailing on the sector. And investors were hopeful that Country Garden, which generated $64 billion in revenue last year, would benefit from Beijing’s promised support measures for the housing market. Yet now China’s property crisis is getting so bad that even this role model is now under threat, and it doesn’t bode well for the industry. “If Country Garden, the biggest privately owned developer in China goes down, that could trigger a crisis in confidence for the property sector,” Edward Moya, a senior market analyst for Oanda, wrote in a Tuesday note. On Tuesday, Country Garden confirmed that it failed to make a $22.5 million interest payment on some of its dollar-denominated bonds. If it doesn’t pay within a 30-day grace period, it will be in default for the very first time. “The developer’s struggle to address even a modest coupon payment underscores the extent of its cash crunch,” Sandra Chow, head of Asia-Pacific research at CreditSights, told the New York Times. The bonds in question are now trading at just 8 cents to the dollar, according to the Wall Street Journal citing Tradeweb data, a sign that traders have all but priced in a default. In a stock filing to Hong Kong’s exchange on July 31, the developer had warned of a net loss in the first half of 2023, down from a net profit of $264 million in the previous year’s period. It blamed the loss on charges incurred from writing down the value of its properties following a downward slide in home prices. In its filing, Country Garden said it would “actively seek guidance and support from the government and regulatory authorities.” The very next day, however, the developer abruptly canceled a $300 million share sale, citing a failure to come to a “final agreement.” Story continues Investors now fear that Country Garden could be the next major developer to fall in China’s already yearslong property crisis. Shares in the developer are down by over 60% since the start of January. Country Garden vs. Evergrande Founded in 1992, Country Garden stood in contrast to China Evergrande Group, the massive property developer whose default in 2021 arguably marked the start of China’s property crisis. Evergrande, at one point China’s largest developer, loaded up on debt to fuel its rapid expansion. The company splurged on big, expensive projects, like Ocean Flower Island, a $35 billion set of artificial islands similar to Dubai’s Palm Jumeirah. Yet new rules on how much debt developers could hold sent Evergrande into a liquidity crisis, and the company defaulted on its foreign-held debt in December 2021. Other developers, like Kaisa Group and Shimao Group Holdings, also defaulted on their payments. Last month, Evergrande finally revealed that it has lost a combined $81 billion in 2021 and 2022. The developer also reported $340 billion in liabilities, including $85 billion in more short-term borrowings. Unlike Evergrande, investors saw Country Garden as far more financially prudent. The developer didn’t borrow as heavily as its peers, and focused on building affordable homes in China’s less prominent and less developed cities. The developer had $199 billion in liabilities at the end of 2022, according to Bloomberg. Still, Country Garden could not escape the overall slowdown in China’s property sector, and the developer was forced to report a $900 million loss for 2022 after revenue slumped by a fifth. Yet the hopes of Country Garden’s investors had initially been buoyed by official promises of support for the property sector late last year. The sector received access to billions of dollars in loans from Chinese state-owned banks, as part of a broader scheme to provide liquidity to developers. Now, more than halfway through 2023, the story is far different. Home prices are falling again: An official index of home prices in 70 cities reported a 2.2% year-on-year decline last month, and investment bank Goldman Sachs is warning of “persistent weakness” in the real estate sector. Country Garden’s decision to focus on China’s poorer areas may also be backfiring, since home price declines have been steeper in less developed cities. Wealthier cities are also considering easing restrictions on property purchases, threatening to soak up demand from low tier cities, which account for 70% of national new home sales volume, analysts at Nomura noted in a report last week. This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
New ferry linking El Salvador and Costa Rica aims to cut shipping times, avoid border problems 2023-08-10 - LA UNION, El Salvador (AP) — A new commercial ferry line moving through Central America began operating Thursday, directly connecting El Salvador and Costa Rica to the exclusion of Nicaragua and Honduras. The Blue Wave Harmony sailed out of La Union, El Salvador, headed for Caldera, Costa Rica, a trip that its backers say will save shipping time, avoid border closures and eliminate delays at two extra border crossings between the two countries. Officials launching the new service in El Salvador were diplomatic, avoiding direct references to the increasingly authoritarian government of Nicaraguan President Daniel Ortega. Federico Anliker, president of El Salvador’s Executive Port Commission, said the new ferry will help ensure that traffic keeps flowing “when certain countries close their borders.” In 2020, early in the coronavirus pandemic, Nicaragua closed its border with Costa Rica in protest of health measures implemented by Costa Rican authorities, specifically testing truck drivers for COVID-19. In February, Nicaragua expelled more than 200 prisoners that human rights groups and foreign governments had described as political, putting them on a plane to the United States. Tens of thousands of Nicaraguans have fled to Costa Rica since Ortega’s government violently cracked down on national protests in 2018, leading to several rounds of sanctions from the U.S. government and the European Union. While some business associations in El Salvador said they were optimistic about the ferry, transport companies downplayed it, saying it would not be viable because it would be more expensive than moving merchandise by land. Ferry operators say it will be able to move some 100 tractor trailers over the 430 miles (691 kilometers) by sea in less than 24 hours. “You avoid the red tape and waiting hours at the border crossings, you reduce the risks of theft, assaults, roadblocks and highway problems,” said Silvia Cuellar, president of COEXPORT, a private association of El Salvador exporters. “Above all it reduces the transit time, arriving to your destination in less time.” Cuellar said it was not meant to isolate Nicaragua. “Here both modalities will coexist,” she said. In fact, the ferry will be able to carry very little of the commerce that moves through the region. Cristian Flores, El Salvador’s presidential commissioner for strategic projects, said that the ferry would only be able to move about 3% to 5% of the existing transport market. Marvin Altamirano, president of the Association of Nicaraguan Truck Drivers, told local press this week that the new ferry service was worrisome and an irresponsible act by El Salvador and Costa Rica, but downplayed its impact. He did not immediately respond to an email request for comment.