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Mexico’s army-run airline to take off in September, but the flight attendants won’t be soldiers 2023-08-10 - MEXICO CITY (AP) — Mexico announced Thursday that its army-run airline will start up in September — but the flight attendants won’t be soldiers. The administration of President Andrés Manuel López Obrador has also put trains, law enforcement, tourism and infrastructure projects under the army’s command. That includes one tourist ferry line serving the Isla Marias islands that is manned by navy personnel. But on the new Mexicana airline, you won’t have to worry about being told to “Fasten your seatbelt, and that’s an order!” The Defense Department said the airline will lease 10 Boeing 737-800 jets from the manufacturer, which will provide pilots and cabin crew. Defense Secretary Luis Cresencio Sandoval originally said the contract with Boeing would be for $4 billion, but later corrected himself to say he meant 4 billion pesos, or about $235 million. He said the airline is looking at 20 potential routes between Mexico City and large and mid-size Mexican cities, some of which have limited service at present, as well as tourist resorts like Cancun. Sandoval promised ticket prices would be 18% to 20% below private competitors, but was unsure if the airline would profitable. If not, it presumably would have to operate with government subsidies. The airline has been named Mexicana after a partly state-owned carrier that went into bankruptcy in 2010 and closed. The 8,500 laid-off former employees of Mexicana are longtime supporters of the president, and his administration agreed to pay them almost $50 million for the commercial rights to the old airline’s brand name and some decrepit properties. Experts have said the amount far exceeded the market value. The new airline combines López Obrador’s love of state-owned companies — he has criticized decisions by previous administrations to sell off once-extensive government companies — and his near-total reliance on the armed forces, which he views as honest and a bulwark against corruption. A military-led company operates the new Felipe Angeles airport that the president had built as a third airport serving Mexico City and is constructing a new airport at the Caribbean coast resort of Tulum. Apart from boosting traffic at the underused Felipe Angeles airport, the army-run Mexicana apparently will provide flights to feed passengers into the president’s Maya Train tourism project. The army is also building that train line, which will connect beach resorts and archaeological sites on the Yucatan Peninsula. The army, which has no experience running commercial flights, has created a subsidiary ito be in charge of Mexicana. López Obrador has suggested the new airline might also serve one of the classic roles of state-owned carriers: providing service to provincial airports on routes considered unprofitable by commercial airlines. That idea could run afoul of regulations that now prohibit airlines from running Mexican airports, or vice versa.

Statewide preschool initiative gets permanent approval as it enters 25th year in South Carolina 2023-08-10 - COLUMBIA, S.C. (AP) — South Carolina is cementing a public-private partnership that has been expanding preschool services statewide over the past quarter century. The First Steps initiative enters its 25th year with a novel permanent status that state leaders hope will bolster school preparedness for kids ages 5 and younger. The partnership has served over 1 million children since its adoption in 1999, according to Georgia Mjartan, executive director of South Carolina First Steps, but previously required occasional reauthorization. Government officials and South Carolina First Steps participants celebrated the new stability at a ceremonial bill signing Thursday. Lawmakers unanimously approved the measure this year in a strong show of bipartisan support for the initiative, which began under the last Democrat to serve as governor. “With this legislation, we reaffirm our commitment to building a strong early childhood education system and further ensure our children enter school ready to learn — setting them and our state up for a bright future,” Gov. Henry McMaster said in a statement. Kindergarten for 4-year-olds is available four days a week at no cost in private and charter schools through South Carolina First Steps, according to Mjartan. Local partnerships also enable services like one allowing incoming students to develop relationships with kindergarten teachers before the school year starts. The initiative also has programs in pediatric and child care centers. Families can now trust that such support will be “unwavering,” Mjartan said Thursday in a statement. Frederick Fuller Jr., McCormick County First Steps board chair, applauded the governor’s affirmation of the initiative. He hopes the attention compels officials to increase education funding so youth in poor, rural areas like his community do not get left behind. “It’s very important to give them a head start in life, to make them ready to be able to go to school and be successful,” he told The Associated Press. —- James Pollard is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

Suburban Detroit woman says she found a live frog in a spinach container 2023-08-10 - SOUTHFIELD, Mich. (AP) — A woman in suburban Detroit said she got a scare when she discovered a live frog in a container of spinach purchased from a grocery store. Amber Worrick of Southfield said she bought the sealed Earthbound Farm spinach package earlier this week from a Meijer store, WJBK-TV reported. When she got home, her daughter found a live frog in the container and screamed, Worrick said. “It was alive and moving,” Worrick said. “Just thank God I didn’t eat the frog.” Worrick said she immediately returned the package and the frog to the store. Workers there released the frog and gave her a refund, she said. The TV station’s video showed the frog in a sealed container. Jennifer Holton, a spokesperson with the Michigan Department of Agricultural and Rural Development, told the Detroit Free Press that the store shouldn’t have released the frog because authorities now don’t know whether it’s native to the state. She said the department referred the incident to the U.S. Food and Drug Administration. Meijer officials said the frog was relocated to a new home outdoors. Officials at California-based Taylor Farms, which owns Earthbound Farm, apologized in a statement and promised to continue to provide “the freshest, finest quality veggies for consumers.”

How to help or donate in response to the deadly wildfire in Maui 2023-08-10 - While rescue and emergency operations continued Thursday at the deadly wildfires that swept across the Hawaiian island of Maui, many people are already looking for ways to support the response and provide relief to those affected. The full extent of the damage and the recovery needs may not be known for up to a week, said Regine Webster, vice president of the Center for Disaster Philanthropy, and she urged people to be patient before deciding where to give their support. “You literally have to wait for the firefighters to complete their work before that damage assessment can be fully realized,” she said. Philanthropy experts recommend giving to experienced organizations that are well-situated to respond to a specific disaster. Major disaster response organizations like the American Red Cross have said they are already communicating with local and federal governments to provide assistance. Webster also urged potential donors to support organizations with deep local ties and knowledge of the impacted communities. “To the extent that we can all slow down, wait a week, wait two weeks, to understand where the greatest needs are, and then look toward organizations that are really meeting those needs, again, prioritizing organizations with specific disaster expertise and organizations that are local in nature,” Webster said. The Council for Native Hawaiian Advancement pledged to match donations — up to $100,000 initially, then increased to $250,000 — for a campaign they began Wednesday, with initial support from the Alakaʻina Foundation Family of Companies. An online tracker shows that more than $331,000 has been given from almost 2,500 people as of Thursday. The crowdfunding site, GoFundMe, has vetted fundraisers for individuals and families who lost property or were injured in the fires. That means they’ve taken steps to verify the identify of the organizer and have collected those campaigns on a hub on their website. GoFundMe will take additional verification steps before releasing the funds to the organizer, as well as deduct a transaction fee. Direct donations to individuals or families can be a powerful way to make an impact, but potential donors should be careful in responding to appeals on social media for donations to individuals, through electronic payment apps like Venmo or Cash App, experts say. Potential donors should also consider if it’s important to them to claim a tax benefit for their donation. Only tax-exempt nonprofit organizations will provide a receipt that people who itemize their taxes can use to claim a deduction. The Hawaii Community Foundation has also announced $1 million in support for its Maui Strong Fund. It is collaborating with other nonprofits and the county mayor to deploy those funds to pay for food, shelter and financial assistance, the foundation said in a statement, adding it is also accepting donations and would not collect any fees on gifts to the fund. The Center for Disaster Philanthropy will work closely with the foundation, Webster said, as it launches a fund specific to the Hawaii wildfires that prioritizes equity in recovery. “We actually will wait several months before we understand the full range of needs that exist on Maui and other islands that are also facing wildfires,” she said. “And we will not invest our funds until such time as we understand what those medium- and long-term needs are.” ___ Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

49ers CEO Jed York is being sued over insider trading accusations 2023-08-10 - SANTA CLARA, Calif. (AP) — San Francisco 49ers chief executive Jed York is being sued over accusations of insider trading related to his role on the board of an online educational company. The San Francisco Chronicle reported that two shareholder lawsuits have been filed against York and other directors of Santa Clara-based Chegg Inc. The suits allege that York and other directors of Chegg hid the company’s role in helping college students cheat on online exams during the pandemic. The company’s revenues and stock price fell sharply once colleges resumed in-person testing and students couldn’t use Chegg to cheat, according to the lawsuits. The suits also accuse York, Chegg CEO Dan Rosensweig and other company executives of illegal insider trading for selling Chegg stock before investors were told about the extent of the cheating scandal. The suits claim York made $1.4 million in profit on the sale of 20,000 shares “at artificially inflated prices.” Team spokesperson Brian Brokaw didn’t address specifics of the lawsuits, saying in a statement that “the 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students.” A Chegg spokesman told the Chronicle that the “suits are without merit and Chegg is vigorously defending itself.” The Chronicle reported that York has been paid cash and stock worth about $2 million for his part-time work over 10 years as a board member and he made a profit of $4.9 million on sales of company stock. ___ AP NFL: https://apnews.com/hub/nfl

US Supreme Court halts Purdue Pharma bankruptcy settlement pending review 2023-08-10 - A pharmacist holds a bottle OxyContin made by Purdue Pharma at a pharmacy in Provo, Utah, U.S., May 9, 2019. REUTERS/George Frey/File Photo Companies Purdue Pharma LP Follow WASHINGTON, Aug 10 (Reuters) - The U.S. Supreme Court on Thursday agreed to hear a challenge by President Joe Biden's administration to the legality of OxyContin maker Purdue Pharma's bankruptcy settlement, putting on hold a deal that would shield its wealthy Sackler family owners from lawsuits over their role in the country's opioid epidemic. The justices paused bankruptcy proceedings concerning Purdue and its affiliates and said they would hold oral arguments in December in the administration's appeal of a lower court's ruling upholding the settlement. The Supreme Court's new term begins in October. Purdue's owners under the settlement would receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Stamford, Connecticut-based company over its misleading marketing of the powerful pain medication OxyContin. In a statement, Purdue said it was disappointed that the U.S. Trustee, the Justice Department's bankruptcy watchdog that filed the challenge at the Supreme Court, has been able to "single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country and overdose rescue medicines." "We are confident in the legality of our nearly universally supported plan of reorganization, and optimistic that the Supreme Court will agree," the company added. The Justice Department declined to comment. At issue is whether U.S. bankruptcy law allows Purdue's restructuring to include legal protections for the members of the Sackler family, who have not filed for personal bankruptcy. Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of lawsuits alleging that OxyContin helped kickstart an opioid epidemic that has caused more than 500,000 U.S. overdose deaths over two decades. Purdue estimates that its bankruptcy settlement, approved by a U.S. bankruptcy judge in 2021, would provide $10 billion in value to its creditors, including state and local governments, individual victims of addiction, hospitals, and others who have sued the company. The Biden administration and eight states challenged the settlement, but all of the states dropped their opposition after the Sacklers agreed to contribute more to the settlement fund. In May, the 2nd Circuit upheld the settlement, concluding that federal bankruptcy law allows legal protections for non-bankrupt parties like the Sacklers in extraordinary circumstances. The 2nd Circuit ruled that the legal claims against Purdue were inextricably linked to claims against its owners, and that allowing lawsuits to continue targeting the Sacklers would undermine Purdue's efforts to reach a bankruptcy settlement. Members of the Sackler family have denied wrongdoing but expressed regret that OxyContin "unexpectedly became part of an opioid crisis." They said in May that the bankruptcy settlement would provide "substantial resources for people and communities in need." In a court filing, the administration told the Supreme Court that Purdue's settlement is an abuse of bankruptcy protections meant for debtors in "financial distress," not people like the Sacklers. According to the administration, Sackler family members withdrew $11 billion from Purdue before agreeing to contribute $6 billion to its opioid settlement. Many other stakeholders have responded in opposition to the administration's request to halt the settlement. A group comprising more than 60,000 people who have filed personal injury claims stemming from their exposure to Purdue opioid products told the Supreme Court they support the settlement, including legal immunity for members of the Sackler family. "Regardless of how one feels about the role of the Sackler family in the creation and escalation of the opioid crisis," the group told the justices, "the fact remains that the billions of dollars in abatement and victim compensation funds hinge on confirmation and consummation of the existing plan." Reporting by John Kruzel in Washington and Andrew Chung in New York; Additional reporting by Dietrich Knauth in New York; Editing by Will Dunham Our Standards: The Thomson Reuters Trust Principles.

Flying taxi maker Archer settles Boeing Wisk lawsuits, secures new investment 2023-08-10 - Flying taxi company Archer Aviation prepare for the debut of their all-electric aircraft from a facility in Hawthorne, California, U.S. June 8, 2021. Picture taken June 8, 2021. REUTERS/Mike Blake Aug 10 (Reuters) - Air taxi maker Archer Aviation (ACHR.N) has reached an agreement with Boeing (BA.N) and its Wisk air taxi unit to settle litigation and collaborate on autonomous technology, the companies said on Thursday. Separately, Archer said it completed a $215 million equity investment round that includes Stellantis (STLAM.MI), Boeing, United Airlines (UAL.O), and ARK Investment Management, increasing Archer’s total funding to date to over $1.1 billion as it works to win Federal Aviation Administration certification and begin commercial operations in 2025. In a joint statement with Boeing and Wisk, Archer said it "has agreed to make Wisk its exclusive provider of autonomy technology for future variants of Archer’s aircraft." Boeing said it is making an investment in Archer "that will support the integration of Wisk’s autonomous technology in future variants of Archer’s aircraft." The agreement settles several lawsuits. Wisk was formed through a joint venture between Boeing and Google co-founder Larry Page's Kitty Hawk Corp, which is now wholly owned by Boeing. Wisk sued rival Archer in 2021 accusing it of stealing trade secrets and infringing on its patents. Archer counter sued Wisk in 2021 "for its false and malicious extra-judicial smear campaign" and Boeing in 2022. Archer will issue warrants to Wisk for up to 13.2 million shares as part of the settlement and autonomy agreement. Electric vertical takeoff and landing aircraft (eVTOL) have been touted as the future of urban air mobility. Low-altitude urban air mobility aircraft has drawn intense global interest. The $215 million funding includes an acceleration of $70 million from Chrysler-parent Stellantis under a 2023 strategic funding agreement. In January, carmaker Stellantis said it would help build Archer Aviation's electric aircraft and increase its stake in the U.S. company. Airlines and other companies are looking at developing transport services using battery-powered aircraft that can take off and land vertically to ferry travelers to airports or for short city trips, allowing them to beat traffic. Reporting by David Shepardson in Washington Editing by Matthew Lewis and Lisa Shumaker Our Standards: The Thomson Reuters Trust Principles.

US mortgage delinquency rates fall to all-time low 2023-08-10 - Real estate signs advertise new homes for sale in multiple new developments in York County, South Carolina, U.S., February 29, 2020. REUTERS/Lucas Jackson/File Photo Aug 10 (Reuters) - U.S. mortgage delinquency rates fell to a record low in the second quarter due to a strong job market and low interest rates prevailing on most home loans despite the big jump in mortgage rates over the last two years, a report on Thursday said. Delinquency rates fell to 3.37% at the end of the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey, their lowest since the MBA began collecting data in 1979 and down from 3.64% year-on-year. Seriously delinquent loans, which are 90 days or more past due or in the process of foreclosure, fell to the lowest non-seasonally adjusted rate in 23 years at 1.61%. Economists are watching mortgage delinquency rates closely for signs of weakness amidst the Federal Reserve's aggressive 525 basis point interest rate increase since March 2022, which increased the cost of borrowing across the board. While the MBA said many borrowers have been able to withstand surging mortgage costs in large part due to a resilient job market and strong wage growth throughout the year, most homeowners are also paying interest rates well below those charged on new loans. Real estate brokers estimated in June that more than eight in 10 loans outstanding featured at rate below 5% at the end of 2022, well below the MBA's most recent contract rate above 7%. More than six in 10 pay 4% or less. While the share of those paying such low rates is declining, many homeowners are opting to remain where they are rather than move and take on a new loan at current rates, which are approaching a 22-year high. Despite the historically low delinquency rate, the MBA said not every borrower has been able to withstand the recent stress of hiked interest rates. The delinquency rate on loans for low-income and first-time buyers, backed by the Federal Housing Administration (FHA), edged up 10 basis points annually to 8.95% in the second quarter. Separately on Thursday, the National Association of Realtors released a report showing that the median home price in the second quarter fell 2.4% year-on-year to $406,000, albeit with significant variations nationwide. “Home sales were down due to higher mortgage rates and limited inventory,” said NAR chief economist Lawrence Yun. “Affordability challenges are easing due to moderating and, in some cases, falling home prices, while the number of jobs and incomes are increasing.” Reporting by Safiyah Riddle; Editing by Dan Burns and Marguerita Choy Our Standards: The Thomson Reuters Trust Principles.

Tutoring firm settles US agency's first bias lawsuit involving AI software 2023-08-10 - [1/2] AI (Artificial Intelligence) letters and robot miniature in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration/File photo Aug 10 (Reuters) - A China-based tutoring company has agreed to settle a U.S. government agency's novel lawsuit claiming it used hiring software powered by artificial intelligence to illegally weed out older job applicants. The 2022 lawsuit against iTutorGroup Inc was the first by the U.S. Equal Employment Opportunity Commission (EEOC) involving a company's use of AI to make employment decisions. The commission, which enforces workplace bias laws, in 2021 launched an initiative to ensure that AI software used by U.S. employers complies with anti-discrimination laws. The EEOC has warned that it will focus enforcement efforts on companies that misuse AI. ITutorGroup agreed to pay $365,000 to more than 200 job applicants allegedly passed over because of their age, according to a joint filing made in New York federal court on Wednesday. The settlement must be approved by a federal judge. The company, which provides English-language tutoring to students in China, denied wrongdoing in the settlement. The EEOC had alleged that iTutorGroup in 2020 programmed online recruitment software to screen out women aged 55 or older and men who were 60 or older. ITutorGroup, a unit of Ping An Insurance Group Co of China (601318.SS), did not immediately respond to a request for comment. An EEOC spokesperson said the agency would not comment until the settlement is approved. At least 85% of large U.S. employers are using AI in some aspects of employment, according to recent surveys. That includes software that screens out job applicants before a human reviews any applications, human resources "chatbots," and programs that conduct performance reviews and make recommendations for promotions. Many worker advocates and policymakers are concerned about the potential for existing biases to be baked into AI software, even unintentionally. In a pending proposed class action in California federal court, Workday (WDAY.O) is accused of designing hiring software used by scores of large companies that screens out Black, disabled and older applicants. Workday has denied wrongdoing. Experts expect an increasing number of lawsuits accusing employers of discriminating through their use of AI software. Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Andy Sullivan Our Standards: The Thomson Reuters Trust Principles.

Analysis: US stock gains may grow elusive as boost from inflation slowdown wanes 2023-08-10 - The Charging Bull or Wall Street Bull is pictured in the Manhattan borough of New York City, New York, U.S., January 16, 2019. REUTERS/Carlo Allegri/File Photo NEW YORK, Aug 10 (Reuters) - As inflation worries ease, U.S. stocks may need a fresh source of fuel to propel further gains this year, investors said. Data released on Thursday showed annual inflation, which had been running at 40-year highs a year ago, rose at a more moderate pace than expected in July, supporting the so-called "Goldilocks" narrative of disinflation and resilient growth that has won over bearish investors and boosted risk assets this year. The S&P 500 (.SPX) has gained more than 16% on a year-to-date basis, though it was last trading largely flat on Thursday. But with many traders now betting the Federal Reserve is unlikely to raise interest rates again this year and fears of a U.S. recession receding, an improving inflationary picture may become less of a driver for stock prices going forward. That may make it more challenging for stocks to continue their recent rise, with high Treasury yields offering an attractive alternative, equity valuations stretched and investors' stock exposure far higher than it had been at the beginning of the year. The latest CPI report "is good news. At the same time, I think that the S&P is pretty fully valued," said Jack Ablin, chief investment officer at Cresset Capital. "With stocks priced where they are, they are going to need a tailwind of lower rates to keep this momentum going." Indeed, stock moves have been more constrained on the CPI release dates in 2023 compared to last year, with the S&P 500 moving at least 1% in either direction just once so far this year, compared to six times in 2022, when it was far less clear how far prices would rise and how aggressively the U.S. central bank would respond. Individual CPI reports have not had "a material and lasting impact" on markets for several months, said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. "I suspect that's because, very simply, the crisis period of inflation is over and really has been for a few months," LeBas said. Some investors also said the July CPI report, while encouraging, was not enough to take more Fed rate hikes decisively off the table. Traders of futures tied to the Fed's policy rate saw less than a 10% chance the central bank will lift that rate from the current 5.25%-5.50% range at its Sept. 19-20 policy meeting, according to CME Group's FedWatch Tool. However, another CPI report is due to be released before that meeting. The Fed's annual economic policy gathering in Jackson Hole, Wyoming later this month also could influence markets. The CPI report is "obviously positive for the markets," said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest Wealth Management. "But I think when you look at the overall picture, it still keeps the Fed engaged," he said, noting that the latest annual inflation rate of 3.2% remained above the Fed's 2% target. END OF RELIEF RALLY? Meanwhile, with the S&P 500 about 2.5% off the year-to-date high it hit last month, investors have cast a wary eye on the market's stretched valuations. The index's forward price-to-earnings ratio has risen to 19 times, well above its long-term average of 15.6 times, according to Refinitiv Datastream. That reduces the attractiveness of stocks compared to bonds, with the benchmark 10-year US Treasury note yielding more than 4.00% and six-month Treasuries offering about 5.5%. The equity risk premium, which compares the attractiveness of stocks over risk-free government bonds, has been shrinking for most of 2023 and was around its lowest levels in well over a decade this week. At the same time, stocks will have to contend with what has historically been a challenging calendar period for equities. The month of August has delivered on average the third-lowest return for the S&P 500 since 1945, with September ranking as the lowest, according to CFRA Research. Stifel equity strategist Barry Bannister is among those who expect the U.S. stock market will be hard-pressed to climb from its current levels. In a note on Wednesday, he said the S&P 500 would likely "trade sideways" in the second half of the year and end 2023 at 4,400 points, which was about 1.5% below Wednesday's closing level. "We believe the relief rally that was predicated on 'no recession in 2023' is now over," Bannister wrote. Reporting by Lewis Krauskopf; additional reporting by Karen Brettell; Editing by Ira Iosebashvili and Paul Simao Our Standards: The Thomson Reuters Trust Principles.

Dassault confident of 2023 target for Falcon deliveries 2023-08-10 - SAO PAULO, Aug 10 (Reuters) - Dassault Aviation (AM.PA) is confident it will be able to meet its target to deliver 35 Falcon business jets in 2023, but its order backlog is not likely to expand this year as much as it did in 2022, an executive said in an interview. Private aviation boomed during the COVID-19 pandemic as wealthy travelers sought to reduce exposure to the coronavirus, helping business jet makers post strong figures. Dassault added 64 Falcon orders to its backlog in 2022, up 25.5% from the year before. Since then, it saw signs of a cooling market, but things are starting to heat up again. "We noticed a little slowdown at the end of last year, still in place this year as the first half was not crazy on our side," Dassault's vice president of civil aircraft, Carlos Brana, told Reuters at Sao Paulo's LABACE airshow late Wednesday afternoon. "But now we see little turbulences - meaning, an improvement - compared to what we saw in the first few months," he said. "I'm not saying that we'll have the same figures as last year. I think that would be very optimistic, but we see the market coming back again. Slowly, but coming back." Dassault is a major player in the super mid-size, large and long-range categories of business jets, with products such as the Falcons 2000 and 8X that it showcased in Sao Paulo. Its newest developments include the Falcon 6X, which it hopes will be certified within weeks, and the 10X, a "game changer" for which it expects certification in 2025. Brana highlighted a wave of new customers in the business jet market as a result of the pandemic, saying that about 20% of Falcon buyers last year were first-time purchasers of a private aircraft. Dassault delivered 32 Falcon aircraft in 2022 and aims for 35 this year, as it works to overcome supply-chain issues affecting the sector in recent years. "We are doing our best with the supply chain constraints," Brana said. "We're still targeting the 35." Reporting by Gabriel Araujo Editing by Brad Haynes and Leslie Adler Our Standards: The Thomson Reuters Trust Principles.

Yellen to tout U.S. economy's resilience, jobs recovery in major speech 2023-08-10 - WASHINGTON, Aug 10 (Reuters) - U.S. Treasury Secretary Janet Yellen will highlight the U.S. economy's continuing resilience in a major speech in Las Vegas on Monday, touting the creation of 13 million new jobs and progress in driving down inflation, a Treasury official said. Yellen will speak at a training center operated by the International Brotherhood of Electrical Workers (IBEW) union after touring its cutting-edge clean energy training programs where workers learn how to install solar panels. The remarks in Nevada, likely to be a key battleground state in the 2024 presidential election, are part of a monthlong travel blitz by President Joe Biden and his cabinet as they work to convince skeptical Americans that their policies are working to boost economic growth and fight global warming. The U.S. economy has outrun recession warnings with record-low unemployment, strong wage gains and better-than-expected GDP growth, but many voters who backed Biden in 2020 think the economy has faired poorly, and may not vote for him in the 2024 election, a Reuters/Ipsos poll released last week showed. Yellen's speech comes two days before the one-year anniversary of the Inflation Reduction Act (IRA), one of three major laws passed since Biden took office that Yellen says are transforming the U.S. economy, rebuilding its manufacturing base and making it fairer for workers and businesses. The Treasury official said Yellen will say the U.S. economy is on the right track toward stable growth, while underscoring the need to remain vigilant on potential challenges. She will note that the resilience of the U.S. economy - which she hailed in a major speech last July - has lasted over the past year despite many naysayers, who warned it could not last, the official added. Yellen will argue that the IRA is making the U.S. less vulnerable to fossil fuel price shocks and strengthening clean energy supply chains, while creating good-paying jobs, the official said. She will also cite a historically fast jobs recovery and the creation of millions of new jobs, a strong rebound in workforce participation, and the fact that both the inflation and unemployment rates are now below 4% after the shock of the COVID-19 pandemic, the official added. The Treasury will complete the first phase of implementing the IRA in coming weeks after issuing 37 separate pieces of guidance on investment and production tax credits over the past year. It will announce plans for the second phase of implementation in September, the official said. Biden on Thursday welcomed new inflation data released Thursday that showed underlying price pressures were subsiding, with the annual increase in prices excluding food and energy tracking their smallest rise in nearly two years. Reporting by Andrea Shalal; editing by Jonathan Oatis Our Standards: The Thomson Reuters Trust Principles.

Tech stocks are headed for their worst stretch since December, threatening to unravel 2023’s stock-market rally 2023-08-10 - The Nasdaq-100 crashed below its 50-day moving average for the first time since March this week, putting it on pace for its worst stretch of losses since December. What’s more, the tech-heavy index is on track to cap off a two-week pullback of 4%, as of Thursday’s close. If those losses hold, it would mark the worst such stretch since Dec. 23, when the index fell 5% over two weeks, according to Dow Jones Market Data. On Wednesday, the popular Nasdaq-100-tracking Invesco QQQ Trust Series 1 QQQ exchange traded-fund, closed below its 50-day moving average for the first time since March 10, FactSet data showed. It managed to recoup some of those losses on Thursday, rising 0.2% to $368.59, but remained below the moving average for a second day. Given that the most valuable tech stocks are responsible for such a large proportion of the index’s value, their performance since mid-July is prompting analysts to worry that this late-summer pullback might morph into a bigger, and potentially broader, selloff. Among the so-called “Magnificent Seven” stocks credited with being the biggest contributors to this year’s rally, Apple Inc. AAPL, -0.12% , Nvidia Corp. NVDA, -0.39% , Microsoft Corp. MSFT, +0.22% and Tesla Inc. TSLA, +1.30% all closed below their 50-day averages this week. Analysts said other discouraging signs lurk under the hood. In a research note shared with clients and the media on Thursday, Jonathan Krinsky, the top technical analyst at BTIG, said that QQQ and several other popular tech-heavy ETFs are nearing a “volume pocket” that could see them move even lower, in a hurry. An analysis of volume-at-price data over the past three years shows a sustained break below $368 for QQQ would leave it vulnerable to a more rapid selloff based on historical volume-at-price, a tool used by stock analysts to parse where levels of support and resistance might emerge for a given security. Volume-at-price measures trading volume for a given security at a range of price points over a given period. Krinsky looked back at the last three years in his analysis. “Support and resistance is based on prior price memory,” Krinsky said during a phone interview with MarketWatch. “Within that range, there is not as much price memory from participants. That is when you can get the faster price moves,” he added. BTIG He noted that QQQ rallied by roughly 16% over six weeks from late April to mid-June, raising the likelihood that a reversal could happen just as swiftly, if not faster. QQQ is up 38.4% year to date as of Thursday’s close, according to FactSet data. Technology stocks have fallen in recent weeks after their latest quarterly earnings failed to impress the market. Rising Treasury yields have helped to heap more pressure on stocks, especially the highflying technology names that are particularly sensitive to interest rates. The big question now is whether a further unraveling of Big Tech’s advance will take the broader market down with it, or whether other corners of the market will help to pick up the slack. Together, the biggest tech stocks are responsible for roughly 40% of the valuation of the Nasdaq-100 following last month’s special rebalancing. See: Here are 4 of the biggest changes to the Nasdaq 100 from Monday’s special rebalancing James St. Aubin, chief investment officer at Sierra Investment Management, said it looks like traders have been content to rotate into other areas of the market that aren’t quite as richly valued as the Big Tech names. The leaders are fading, but the laggards are coming up right behind them,” St. Aubin said during a phone interview with MarketWatch. “If money was flowing out across the board and going into cash and bonds, that would be a bit more concerning.” U.S. stocks eked out a gain on Thursday after blowing most of their early gains. The market initially rallied after the release of July inflation data that largely matched economists’ expectations. But San Francisco Fed President Mary Daly said later that the Fed still has more work to do to tame inflation, sending Treasury yields higher and provoking a swift turnaround for equities. The S&P 500 SPX finished barely in positive territory at 4,468, while the Nasdaq Composite COMP gained 15.97 points, or 0.1%, to 13,737.99 and the Dow Jones Industrial Average DJIA rose 52.79 points, or 0.2%, to 35,176.15, FactSet data show. The blue-chip gauge had risen more than 450 points at its highs of the session. The 10-year Treasury yield BX:TMUBMUSD10Y jumped to 4.081%, its second highest level of the year, according to Dow Jones Market Data.

Yellow bankruptcy: Treasury’s $700 million pandemic loan is ‘undercollateralized,’ congressman warns 2023-08-10 - In the wake of Yellow Corp.’s bankruptcy announcement, Rep. French Hill of Arkansas has again voiced his concerns about a $700 million federal loan that the trucking company received in 2020. On Sunday, the beleaguered Nashville, Tenn.,-based company announced its bankruptcy filing, which it blamed on the International Brotherhood of Teamsters union. The $700 million bailout was made under the CARES Act during the COVID-19 pandemic. The Treasury Department’s summary of the loan transaction described YRC Worldwide, as Yellow YELL, +14.71% was then known, as “a leading provider of Department of Defense supply transportation and other delivery services for the U.S. Government.” Hill, a Republican who is currently the sole member of the Congressional Oversight Commission, has been a vocal critic of the loan. “Anytime you have government directly involved in trying to make credit decisions for businesses, you’re going to have catastrophic problems,” he told MarketWatch on Tuesday. Related: Yellow blames bankruptcy filing on ‘bullying’ by Teamsters The congressman has argued that Yellow should never have received the $700 million bailout. “Yellow, certainly for many years following the financial crisis in 2008-09, would be deemed an overleveraged, struggling company,” he said. Hill is also the author of a Congressional Oversight Commission report on the Yellow bailout that was released in June. “Overall, the Commission continues to believe that the Treasury and the Defense Department made missteps in deeming Yellow as critical to maintaining national security and in executing the loan to Yellow,” the report said. So could the government take a financial hit in the wake of Yellow Corp.’s bankruptcy? “I think the Treasury is undercollateralized. I’ll leave it at that,” Hill said. The loan was broken up into two tranches, with the $300 million tranche A dedicated to YRC’s “near-term contractual obligations and non-vehicle capital expenditures.” Tranche B provided “$400 million for capital investments made pursuant to capital plans subject to approval by Treasury,” the summary said, noting that both tranches mature on Sept. 30, 2024. As taxpayer compensation, the Treasury Department also received shares, equal to 29.6% of YRC’s common stock on a fully diluted basis, to be held in a voting trust. With its stake of 15.94 million shares, the U.S. Treasury is Yellow’s second-largest shareholder, according to FactSet data. Related: As Yellow files for chapter 11, $700 million pandemic bailout is in the spotlight “Unfortunately for the Treasury, I am afraid that their A tranche is in the third lien position behind the senior creditors,” Hill said. “They do have the additional support of their warrant for the company’s common stock, but I don’t know if that will end up having any value.” Yellow has said that the loan, which was made in July 2020, will be paid back in full. “Our employees are professionals who, despite heavy hearts, worked diligently to clear the docks, deliver remaining freight, and close our terminal doors one last time,” Yellow CEO Darren Hawkins said in the company’s statement Sunday. “It is with this same professionalism that we intend to wind down our business, maximize recoveries for creditors and pay back the CARES Act loan in full.” The company also directed MarketWatch to letters sent by Yellow to the House Select Subcommittee on the Coronavirus Crisis. “The information the company provided in applying for the loan was completely accurate, and the use of the loan funds were and are completely appropriate, transparent, and in full compliance with the loan agreements,” Hawkins wrote in one letter, dated June 2021. “The Committee continues to call into question, without substantiation, Yellow’s eligibility for and use of its CARES Act loan funds,” the company added in a letter dated April 2022. “In truth and fact, and as this Committee now indisputably knows, Yellow’s eligibility for and use of its CARES Act funds is, was, and continues to be appropriate in every respect.” Related: Tupperware and Yellow have skyrocketed, but don’t confuse them with meme stocks Hill told MarketWatch that he hopes the recommendations in the report, which was the commission’s final one, will help Congress down the line. The report urged Congress not to create an open-ended sector-specific loan program in the future. “While the national security loan program may have been a well-intentioned response to extraordinary events, it ultimately proved to be unnecessary and morphed into something that Congress never intended — a risky taxpayer bailout for businesses, like Yellow, that struggled financially before the COVID-19 pandemic and were not critical to maintaining national security,” it said. The commission ended its work for the CARES Act June 30. The congressman also told MarketWatch that, in the future, he wants to see “mutual due diligence” on the part of both the Treasury Department and the Department of Defense. MarketWatch has reached out to the Treasury and Defense departments with a request for comment. Shares of the less-than-truckload company rose 20% Thursday. The stock is trading almost 30% below where it closed at $2.87 on July 7, 2020, when it entered into the loan agreement with the Treasury Department. Tomi Kilgore contributed.

Ford is going all in on hybrids. Here’s why. 2023-08-10 - Ford Motor Co. is betting that hybrid vehicles will be the bridge toward an all-electric-vehicle future for perhaps longer than most people expect. It’s a cautious strategy that has its admirers on Wall Street. Ford F, -4.48% is not thinking about “extremes” between hybrids and EVs, company Chief Executive Jim Farley said recently. The automaker decided to keep investing in heavy-duty hybrid vehicles and has been surprised by their popularity, he said. That’s a “subtle shift of strategy” for Ford, but one that makes sense in the current reality, said Garrett Nelson, an analyst with CFRA. On the call with analysts following Ford’s quarterly results last month, Farley noted that Ford’s hybrid offerings are extremely popular. About 10% of F-150 pickup trucks and 56% of smaller Maverick pickup trucks being sold in the U.S. are hybrids, he said. “We are adding hybrid options across our [internal-combustion-engine] lineup,” he said. “And we expect to quadruple our hybrid sales in the next five years, and we were already No. 2 in the market last year.” The pure-battery EV market has become saturated, and Ford is indicating that it is willing to be flexible, CFRA’s Nelson said. “Bottom line, aside from Tesla TSLA, +1.30% EVs, the vast majority of other EV models have sold very poorly,” Nelson said, adding that although many people are not interested in EVs, hybrids could be an easier sell. Related: Electric vehicles vs. gas-powered cars: Which one is cheaper to buy and own? “Consumers are becoming much more educated,” he said. “You can in a lot of cases go on pure battery power and not even use any fuel with these hybrids.” Japanese carmakers such Toyota Motor Corp. 7203, +1.40% TM, +0.26% and Honda Motor Co. 7267, +5.87% HMC, -0.09% have taken that approach from the start, making much bigger bets on hybrids, and “in hindsight that appears to have paid off,” Nelson said. Indeed, “hybrids are a much easier purchase in today’s environment,” said Karl Brauer, an analyst with iSeeCars.com. “They cost less than electric vehicles, they don’t involve range anxiety, and Ford has managed to make them quite practical in how it pairs the technology with the F-150,” Brauer said. Hybrids are more expensive to buy than internal-combustion-engine vehicles, but they are cheaper than electric vehicles because their batteries are significantly smaller — even those in plug-in hybrids, which are capable of driving several dozen miles solely on an electric charge. About a third of the cost of an EV is the cost of the battery. Hybrids have one more critical advantage over EVs, Brauer said — they can be produced and sold for a profit. Ford’s strategy contrasts with a more aggressive EV push by General Motors Co. GM, -5.79% , Nelson said. GM late Wednesday unveiled its Cadillac Escalade IQ, a luxury EV that starts at around $130,000 and has 450 miles of range. GM expects to begin making the vehicle in the summer of 2024, with sales beginning in late 2024. GM’s future lineup includes a number new EV models as well as electric versions of popular vehicles that were previously available only as gas-powered models. That includes an electric Chevy Equinox for next year and a return of the Chevy Bolt, among the cheapest EVs available in the U.S. See also: GM is bringing back the Bolt. What do we know so far about the updated EV? GM will cease production of the Bolt later this year but has promised to bring it back using the company’s new shared EV platform. Observers expect the new Bolt to be available around 2025. GM’s EV strategy is generally viewed as more risky. Tesla started a price war earlier this year, cutting prices of its EVs several times. Ford also cut prices, most notably on the F-150 Lightning, the electric version of a pickup truck that’s been the best-selling vehicle in the U.S. since the 1980s. Hybrids also do away with so-called charge anxiety, because their gas-powered engines kick in when needed. Related: EVs zoomed ahead with a 8.2% slice of auto financing pie in second quarter According to a Consumer Reports survey in June, about 6 in 10 respondents said that concerns about charging were holding them back from purchasing an EV, and about 5 in 10 cited range as a reason they wouldn’t buy one just yet. Tesla has made its fast-charging ports the de facto standard in the U.S., and several automakers, including Ford and GM, have inked deals to allow their EV owners to power up at Tesla’s Supercharger network, which has charging stations located near major highways. An often-cited 2022 study about the reliability of public, open-to-all fast-charging stations in nine counties in the San Francisco Bay Area found a range of issues with the stations, from charging and payment failures to annoyances such as spaces being occupied by gas-powered vehicles or EVs that are not actively charging.

Canopy Growth beats analyst targets as its ‘asset-light’ strategy bears fruit, but Curaleaf’s miss weighs on pot stocks 2023-08-10 - Canopy Growth Inc. disclosed another quarterly loss but managed to beat analysts’ expectations as its efforts to contain costs in its Canadian business start to pay off. However, an earnings miss from U.S. cannabis company Curaleaf CURLF, +1.64% weighed on the sector, and many cannabis stocks moved into the red on Thursday. Meanwhile, a revenue beat from Verano Holdings Corp. VRNOF, -1.05% failed to provide a lift to the stock. Canopy Growth CGC, -7.93% WEED, -6.56% CEO David Klein told MarketWatch the company is leveraging efforts to reduce both its employee base and cannabis-growing capacity by 60% each as part of an “asset-light” approach to the business. “We’ve been working really hard on our transition to an asset-light business model,” Klein said. “Our business is now built for today’s reality…Now we know what our market is going to be.” Canopy Growth is launching a strategic review of its BioSteel business, which booked C$32.5 million in sales in the first quarter. BioSteel “is a great brand,” but that type of consumer-packaged goods requires “a lot of investment to grow” and it’s not the best fit for a cannabis company, Klein said. Canopy Growth’s first-quarter loss of 5 cents a share beat the FactSet consensus projection for a loss of 13 cents a share. Its revenue of $80.9 million beat analysts’ views of $68.3 million by a significant margin. TD Cowen analyst Vivien Azer reiterated a market-perform rating on Canopy Growth and said the company’s BioSteel sports drink powered its top-line results as revenue rose 2.6% over the year-ago period. She also cited strength in its core cannabis business. “The biggest contribution to incremental revenues came from adult-use cannabis, where it seems that the revitalization work (and improved product quality) that the company is delivering in flower is resonating with consumers,” Azer said. Also read: Green Thumb Industries posts another profit as CEO channels Warren Buffett Looking ahead, Canopy Growth continues to work toward a Nasdaq listing of its U.S. businesses including Jetty extras, Wana Brands edibles and Acreage. It’s also planning a reverse stock-split authorization at its annual general meeting on Sept. 25. Canopy reiterated the “going concern” language from the previous quarter, but it still has more than C$571 million in cash, down C$212 million from the previous quarter as it paid down debt and ran the company. Canopy Growth stock fell 9% on Thursday. Also read: Once-mighty Canopy Growth loses billions as dream of pot riches runs into reality of oversupply and overspending Curaleaf stock drops after revenue, earnings miss the mark Curaleaf Growth Corp.’s CURLF, +1.64% stock fell 3.8% after the U.S. cannabis company’s second-quarter loss of 9 cents a share fell short of the FactSet consensus estimate for a loss of 5 cents a share. The company’s revenue of $338.6 million fell short of analysts’ forecast of $339.3 million. Benchmark analyst Mike Hickey reiterated a hold rating on Curaleaf and said the results were disappointing, with international expansion hurting the company’s margins. Despite these setbacks, “CURLF has made great strides in reducing annualized expenses while prioritizing their brand portfolio in their dispensaries,” Hickey said. Curaleaf CEO Matt Darin said, “The fact is that no company is better positioned than Curaleaf to capitalize on the global cannabis market opportunities when the sector eventually and fully unlocks,” according to a statement. Verano emphasizes cash-flow generation Verano’s second-quarter results marked its 10th quarter in a row of positive operating cash flow and its third quarter in a row of positive free cash flow. The company boosted the lower end of its 2023 free cash flow guidance to $65 million from $50 million and kept the top end of the range at $75 million. Verano’s second-quarter loss of 4 cents a share missed analysts’ estimates by a penny a share, while its revenue of $234 million beat the FactSet consensus view of $230.6 million. Alliance Global Partners analyst Aaron Grey reiterated a buy rating on Verano and cited positive developments such as signs of price stabilization and free cash flow generation that appears to be sustainable. Verano stock dipped 1% on Thursday. Also read: Verano cannabis cultivation takes root in massive ex-retail space as legal industry gears up

This type of ETF is designed to hedge against volatility and help investors navigate a stormy stock market 2023-08-10 - Hello! This is MarketWatch reporter Isabel Wang bringing you this week’s ETF Wrap. In this week’s edition, we look at covered-call ETFs, which use an options strategy known as covered-call writing which may limit potential upside participation but generates income for investors in volatile markets. Please send tips, or feedback, to isabel.wang@marketwatch.com or to christine.idzelis@marketwatch.com. You can also follow me on Twitter at @Isabelxwang and find Christine at @CIdzelis. Sign up here for our weekly ETF Wrap. This week’s stock-market volatility is the latest reminder that it is time to revisit risks and play defense in your investment portfolio. The CBOE Volatility Index VX00, -1.33% , known as Wall Street’s fear gauge, rose as high as 18.14 on Tuesday, its highest level in over two months, according to FactSet data. Investors in exchange-traded funds who are looking for alternative income solutions while avoiding market volatility in the rising interest-rate environment may want to consider covered-call ETFs as part of their defensive portfolio, said Rohan Reddy, director of research at Global X ETFs. A covered-call ETF, or an option-income ETF, is a fund that uses an options strategy called covered-call writing to generate income through collecting premiums. In a covered-call trade, investors sell a call option on an asset they hold, which gives the buyer of the option the right, not the obligation, to purchase the asset from them at a specified “strike” price on or before a certain date. When the price of the asset goes down and doesn’t reach the “strike” price before the expiration date, the call option will expire as buyers walk away, but investors could still keep the premium as their payouts. However, if the asset rises above the “strike” price, the option buyer has the right to purchase the underlying asset at that price. Investors still keep the premium as income, but they miss out on any additional gains on the stock they own unless they buy back the option at a loss. “That means you give up the upside, but the plus for the investor is because you need to be compensated for giving up the upside, you get a higher level of options premium,” said Reddy in a phone interview on Thursday. That’s why the covered-call strategy usually performs best in what Reddy called “sideways or choppy market environment,” where there are no clear trends found in the markets. “That might imply there could be higher volatility so you’re getting higher premiums while also potentially outperforming the market in that environment.” The use of this defensive equity strategy gained popularity during the long period of low interest rates in 2020 and 2021, and became even more popular last year when markets closed out their worst year since the 2008 financial crisis as the Federal Reserve aggressively raised interest rates to curb the highest inflation in 40 years. See: Looking for stock dividends of 9% to 11%? That’s what these ETF managers are aiming for with an AI-aided strategy. The largest U.S.-listed covered-call ETF, the nearly $29 billion JPMorgan Equity Premium Income ETF JEPI, brought in record inflows for an actively-managed ETF of over $12.8 billion in 2022, according to FactSet data. Other covered call ETFs were also popular. The Global X Nasdaq 100 Covered Call ETF QYLD and Global X S&P 500 Covered Call ETF XYLD saw $2.7 billion and $1.7 billion of inflows in 2022, respectively. JEPI lost 3.5% in 2022, compared to a 19% of decline in the large-cap benchmark S&P 500 SPX, while XYLD lost 12.1% and QYLD dropped 19.1%, far outperforming the Nasdaq 100 NDX’s nearly 33% decline, according to FactSet data. “The overwhelming majority of our clients use these funds for income, so they’re less sensitive to the way that the markets are going,” Reddy said. “A lot of it goes back to even though inflation has fallen this year, it’s still hard to find real incomes – you need to stretch in an environment where it’s getting harder to get real cash flow, that’s why we’re seeing these alternative sources of income, particularly in the derivative space with these covered-call strategies that come more popular.” See: An ETF that can’t go down? This new ‘buffer’ fund is designed to provide 100% protection against stock-market losses In 2023, as the stock-market rally that marked the first half of the year continues into the second half, these funds have been lagging the major indexes. JEPI rose 7% so far this year, while XYLD was up 10.6% and QYLD jumped nearly 20% year-to-date – less than the 38% advance in the Nasdaq 100 and the 16.4% gain in the S&P 500, according to FactSet data The flows into these ETFs also slowed down in 2023, with XYLD collecting $687 million in 2023 and QYLD has attracted over $1 billion over the same period, according to FactSet data. Reddy pointed to the recent “FOMO” rally led by megacap technology stocks, which made covered-call ETFs’ investors unable to capture all the upside in an uptrend market. “If the Fed does engineer a soft landing, I think giving up the upside is maybe more challenging for investors. Maybe that’s why some of the flows recently have slowed down, but overall, they’ve been pretty good,” he told MarketWatch. Meanwhile, there’s still concern about whether the current rally is sustainable as the rest of the stock-market hasn’t fully caught up with the big-tech companies, while investors are still assessing if July’s report on consumer prices could spell the end of Fed’s interest-rate hikes. “We could see at least lower-for-longer returns going forward, maybe not necessarily a major downturn, but a more choppy market environment,” Reddy said. “So something like a covered-call strategy would honestly be an ideal solution.” See: U.S. inflation rate creeps back up, CPI shows, but probably not enough to worry the Fed As usual, here’s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data. The good… Top Performers %Performance United States Natural Gas Fund L.P. UNG 15.8 Invesco High Yield Equity Dividend Achievers ETF PEY 4.1 SPDR S&P Oil & Gas Exploration & Production ETF XOP 3.6 PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF ZROZ 3.3 Vanguard Extended Duration Treasury ETF EDV 3.1 Source: FactSet data through Wednesday, August 9. Start date August 3. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater. …and the bad Bottom Performers %Performance ARK Next Generation Internet ETF ARKW -6.8 ARK Innovation ETF ARKK -6.3 ARK Fintech Innovation ETF ARKF -5.3 WisdomTree Cloud Computing Fund WCLD -4.8 SPDR S&P Health Care Equipment ETF XHE -4.8 Source: FactSet data New ETFs USCF Wednesday announced it has launched the USCF Sustainable Commodity Strategy Fund ZSC which seeks total return by providing broad exposure to commodities across three different sustainability focused themes: agriculture, renewable energy and electrification. Weekly ETF reads

Fed has ‘more work to do’ to get inflation back down, Daly says 2023-08-10 - San Francisco Federal Reserve President Mary Daly said Thursday it was premature to declare victory on inflation despite the soft consumer inflation data for July released earlier that morning. “There’s still more work to do,” Daly said, in an interview on Yahoo Finance. See: U.S. inflation rate creeps back up, CPI shows, but probably not enough to worry the Fed Daly said the CPI data was good news for families and businesses and was consistent with inflation gradually coming down. She said inflation remains the “number-one concern” of people that she talks with. “It is not a data point that says victory is ours,” Daly said. Fed officials have said they want to get interest rates high enough to put downward pressure on inflation. The plan is then to leave rates at that level as inflation slowly falls. But the central bank doesn’t know for sure how high interest rates need to go to get inflation back down to its target of 2%. . Late last month, the Fed hiked its benchmark rate by 25 basis points to a range of 5.25%-5.5%. In June, Fed officials had projected an additional 25 basis point hike before the end of the year. Daly said it was too soon to say if she would push for another rate hike as soon as the September meeting. “There’s a lot of time between now and September,” she said. The central bankers will update their plans when they meet at the end of September. Daly will be a voting member of the Fed’s interest-rate committee next year. U.S. stocks DJIA SPX were unable to hold onto sharp gains seen just after the July consumer inflation data was released Thursday morning. Some analysts said that Daly’s comments helped fuel the pullback.

Can the stock-market rally survive rising Treasury yields? Here’s what history says. 2023-08-10 - There’s more than one way to interpret the impact that Treasury yields can have on U.S. stocks. Ed Clissold, chief U.S. strategist, and Thanh Nguyen, senior quantitative analyst, for Ned Davis Research described three scenarios in which the direction of short- and long-term bond yields and their moves relative to one another have produced “interesting — albeit complicated — messages for the stock market.” Their bottom line is that the S&P 500 SPX tends to rise at a decent clip except during periods of “bull steepeners,” in which the 10-year Treasury yield BX:TMUBMUSD10Y is falling, but at a slower pace than its 2-year counterpart BX:TMUBMUSD02Y. It’s often presumed that rising Treasury yields are bad for U.S. stocks overall, but research from Clissold and Nguyen comes up with more nuanced conclusions. They found that higher yields, which occur when investors sell off the underlying government debt, can be quite consistent with risk-on sentiment in equities, based on data that stretches back more than 40 years. “Conventional wisdom is that rising yields are negative for stocks because they increase the cost for companies to borrow and provide competition for asset allocators,” Clissold said via phone on Thursday. “However, rising yields can also be a sign that the economy is proving to be more resilient than expected.” What’s more, when recession risks appear high, rising bond yields can reflect the Treasury market’s view that a recession is not imminent, “which would be bullish for stocks.” Markets have been locked in what’s known as a “bear flattener” environment since March 29, 2021, according to Clissold — a period which captures the S&P 500’s all-time closing high of 4,796.56 on Jan. 3, 2022. “Bear” refers to investors’ decision to sell Treasurys, which pushes yields up. The term “bull” refers to an environment of government-debt buying, which pulls down yields. “Steepener” and “flattener” describes the shape that the Treasury curve takes on as a result, based on moves in the 2- and 10-year rates. NDR uses 150-basis-point swings in the Treasury curve to determine when markets have shifted into a different regime. Here’s how NDR’s research, released on Wednesday, breaks down: The bull steepener. The bull steepener occurs when both the 2- and 10-year yields are falling, but the short-term rate does so at a faster pace. Theoretically, that would happen when recession fears pick up again. The long-term outlook not only turns more pessimistic, but traders and investors see greater reason for the Fed to start cutting rates in the near term. The bull steepener “has been the worst yield curve regime for stocks,” Clissold and Nguyen wrote. “The economic message from a bull steepener is that the economy is slowing to the point that the Fed will likely have to cut rates. The market is pricing in the risk of a policy mistake.” The last time such a regime was in place was between Aug. 27, 2019-Aug. 4, 2020, a period which includes the onset of the Covid-19 pandemic in the U.S. The bull steepener occurs when both the 2- and 10-year yields are falling, but the short-term rate does so at a faster pace. Theoretically, that would happen when recession fears pick up again. The long-term outlook not only turns more pessimistic, but traders and investors see greater reason for the Fed to start cutting rates in the near term. The bull steepener “has been the worst yield curve regime for stocks,” Clissold and Nguyen wrote. “The economic message from a bull steepener is that the economy is slowing to the point that the Fed will likely have to cut rates. The market is pricing in the risk of a policy mistake.” The last time such a regime was in place was between Aug. 27, 2019-Aug. 4, 2020, a period which includes the onset of the Covid-19 pandemic in the U.S. The bear steepener. The bear steepener takes place when the 10-year yield is rising and doing so at a faster pace than the 2-year rate. Such a move ordinarily takes place in a situation where traders and investors see brightening U.S. economic growth prospects over the longer term. “The macro message is that the economy is strengthening, and the Fed is expected to hike. Put another way, the economy is getting the all-clear message, but the Fed has not overtightened.” The last time a bear-steepener regime was in place was from Aug. 4, 2020 to March 29, 2021, according to NDR. Still, yields can sometimes rise for the wrong reasons, as they did last week on increased worries about the U.S. fiscal outlook, which knocked the wind out of stocks. The bear steepener takes place when the 10-year yield is rising and doing so at a faster pace than the 2-year rate. Such a move ordinarily takes place in a situation where traders and investors see brightening U.S. economic growth prospects over the longer term. “The macro message is that the economy is strengthening, and the Fed is expected to hike. Put another way, the economy is getting the all-clear message, but the Fed has not overtightened.” The last time a bear-steepener regime was in place was from Aug. 4, 2020 to March 29, 2021, according to NDR. Still, yields can sometimes rise for the wrong reasons, as they did last week on increased worries about the U.S. fiscal outlook, which knocked the wind out of stocks. The bear flattener. Finally, there’s the bear flattener, which is produced when the 10-year yield rises but at a slower pace than the two-year rate. In other words, traders and investors are selling off both underlying maturities, but doing so more aggressively with the 2-year Treasury. Under a bear-flattening regime, which has been in place since March 29, 2021, “the yield curve is signaling that the economy is still strong, but the market is starting to anticipate conditions may cool to the point that the Fed may need to cut.” Source: NDR. Data as of Aug. 8, 2023. Orange shading indicates bull steepeners. Gray shading indicates bear steepeners. No shading indicates bear flatteners. Thursday’s financial-market action provided another example of how rising yields don’t necessarily undermine the performance of equities. All three major U.S. stock indexes DJIA SPX COMP managed to eke out gains even though two- and 10-year Treasury yields ended the New York session at one-week highs.

Supreme Court Halts Purdue Pharma's $6B Settlement: Sackler Family's Shield From Opioid Lawsuits Challenged - Johnson & Johnson (NYSE:JNJ), Teva Pharmaceutical Indus (NYSE:TEVA) 2023-08-10 - On Thursday, the Supreme Court temporarily blocked a $6-billion bankruptcy settlement by Purdue Pharma, the maker of the opioid OxyContin, that would shield the Sackler family from civil lawsuits related to the opioid crisis. The court also announced that it will hear a challenge to the settlement by a U.S. bankruptcy trustee. The directive from the court requires the parties involved to submit legal documents addressing the issue of whether a Chapter 11 reorganization can be sanctioned by bankruptcy courts, allowing non-debtor third parties to be released from claims by non-debtors, even if the claimants have not given their consent, as reported by CNBC. The Opioid Settlement Background: In May, Purdue Pharma arrived at a settlement with numerous U.S. states and local governments that could ultimately be worth over $10 billion. As part of the agreement, the Sackler family, who owns the Stamford, Connecticut company, consented to give up control. The Supreme Court will hear the case by the end of the year, and the temporary halt on the settlement will be removed after the court delivers its ruling. Also Read: Disney CEO Bob Iger Says ESPN Bet Had Multiple Suitors. Here's Why Penn Entertainment Won The Rights. Previous Developments: A federal appeals court in New York had previously cleared the way for a bankruptcy deal that would protect the Sackler family from future lawsuits in exchange for a contribution of up to $6 billion. The Sacklers were expected to personally pay billions of dollars to help fight the ongoing opioid epidemic, a crisis many believe they played a significant role in creating. This decision was met with mixed reactions, with some calling it a "victory" and others expressing disappointment that the Sacklers' liability shield from private claims was not lifted. State Opioid Settlements: In a separate development, 15 states had landed on a deal with Purdue Pharma that cleared the way for a $4.5-billion settlement. As part of this deal, the Sackler family agreed to pay an additional $50 million. The settlement also included provisions for Purdue to release millions of documents detailing the company's role in the opioid epidemic. Impact And Reactions: The opioid crisis has claimed the lives of more than 564,000 people between 1999 and 2020, with over 106,000 deaths in 2021 alone. The Sackler family's involvement in the crisis has led to high-profile protests and demands for accountability. The Supreme Court's decision to block the settlement and hear the challenge adds a new layer of complexity to the ongoing legal battles surrounding Purdue Pharma and the Sackler family. Related Stocks and ETFs: The legal challenges surrounding Purdue Pharma and the opioid crisis may have implications for other pharmaceutical companies. Investors may want to keep an eye on stocks like Johnson & Johnson JNJ and Teva Pharmaceutical Industries Ltd. TEVA, both of which have faced legal scrutiny related to opioids. Related ETFs include the Health Care Select Sector SPDR Fund XLV and the iShares U.S. Pharmaceuticals ETF IHE, which invest in the broader pharmaceutical industry. Now Read: Is Airbnb Behind The Housing Crisis? Data Says No, But City Restrictions Can Still Affect Its Bottom Line This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Shutterstock.