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Keith "Roaring Kitty" Gill buys $245 million stake in Chewy 2024-07-01 16:22:00+00:00 - Why are GameStop shares on the rise again? Why are GameStop shares on the rise again? Why are GameStop shares on the rise again? Keith Gill, the meme stock investor who sent GameStop shares surging during the pandemic, has taken out a multimillion stake in Chewy. Gill, who goes by the moniker "Roaring Kitty" on X and "DeepF------Value" on Reddit, bought more than 9 million shares of the online pet supply giant, according to a regulatory filing posted Monday. Based on Chewy's share price Friday, which was $27.24, Gill's purchase means he now has a $245 million stake in the company. Chewy's stock price surged as much as 15% Monday on news of Gill's investment. Chewy didn't immediately respond to a request for comment Monday. That investment comes a week after, Gill posted an image of a cartoon dog with no accompanying text on his Roaring Kitty X account. The post gave shares of Chewy, PetMed Express and Petco a temporary jolt. Gill's puppy post came a day after Chewy announced it would spend $500 million to repurchase 17.5 million of its own shares. Companies typically buy back shares to boost their per-share earnings or to increase returns for existing shareholders. Roaring Kitty has become known for making the markets move simply by posting cryptic images on social media. Last month, after the end of a roughly three-year hiatus from social media, Roaring Kitty once again caused GameStop shares to soar after it posted an image of a sketched man leaning forward in a chair on X. The post was followed by several others, featuring various comeback-themed videos and movie clips with charged music. Gill's online influence was established in 2021, after he rallied hordes of amateur investors online to invest in the struggling video game retailer GameStop, causing shares — which Gill had started buying the previous year — to soar, in what became known as the first meme-stock frenzy. "I believed [GameStop] was dramatically undervalued by the market," Gill said in testifying before the House Financial Services Committee in 2021. "The prevailing analysis about GameStop's impending doom was simply wrong." To be sure, Gill profited after promoting the purchase of GameStop shares, but he also later lost big. In 2021, for example, Gill revealed that he had lost $13 million in a single day when shares of the game retailer retreated. Gill's investments in GameStop eventually became a cornerstone storyline in the 2023 film "Dumb Money," where Gill is portrayed by actor Paul Dano.
Crypto firm Circle gets approval to issue stablecoin in EU under bloc’s strict rules 2024-07-01 15:56:00+00:00 - In this article USDC.CM= Follow your favorite stocks CREATE FREE ACCOUNT Launched in 2018 by crypto firm Circle, USDC is now the second-biggest stablecoin globally, with more than $30 billion worth of tokens in circulation. Nurphoto | Getty Images Cryptocurrency firm Circle said Monday it's now registered as an electronic money institution, or EMI, in France, granting the firm a key license to become a compliant stablecoin issuer under the European Union's tough crypto laws. Circle, which is primarily known for its USD Coin , or USDC, stablecoin, said in a statement that it was granted an e-money license by France's banking industry regulator, Autorite de Controle Prudentiel et de Resolution, or ACPR. The license makes Circle the first global stablecoin issuer to achieve compliance with the European Union's landmark Markets in Crypto-Assets, or MiCA, regulatory framework, the company said. Circle added that the approval will mean that both its USDC and Euro Coin, or EURC, tokens are now being issued in the EU in compliance with MiCA's stablecoin regulatory obligations. The company said it is also opening up its Circle Mint, which allows businesses to mint and redeem Circle stablecoins, in France. "Since our founding, Circle has sought to build durable, compliant, and well-regulated infrastructure for stablecoins," Jeremy Allaire, co-founder and CEO of Circle, said in a statement Monday. "Our adherence to MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency into mainstream scale and acceptance," Allaire added. Stablecoins are a type of cryptocurrency pegged to traditional assets, typically government-issued currencies such as the U.S. dollar. Investors hold them to avoid volatility seen in other cryptocurrencies such as bitcoin. watch now They're also a key way to trade in and out of cryptocurrencies quickly that allows users to avoid having to rely on fiat currencies stored in bank accounts. EU ushers in stablecoin rules EU regulators last year passed the world's first comprehensive law that governs how cryptocurrency companies should operate. The law outlines rules specifying ways companies should establish investor protections and make sure their platforms aren't vulnerable to manipulation. The law, known as MiCA, officially entered into force in May 2023. However, provisions governing stablecoins were approved only last week. These measures were viewed as particularly stringent, as they imposed limitations on how much trading could be done in certain stablecoins, particularly U.S.-denominated ones. watch now Under the rules, companies must stop issuing non-euro-denominated stablecoins used as a "means of exchange" if they cross a threshold of more than 1 million transactions or a value of over 200 million euros (US$215.2 million) per day, according to Article 23 of MiCA. As a France-registered EMI, Circle said it is now able to offer its services — which includes the ability to mint and redeem USDC via Circle Mint — to customers not just in France, but throughout the European Union. That's because according to MiCA, crypto businesses can offer their services in one EU country and "passport" them out into other markets within the bloc. The remaining obligations set out under MiCA, which concern crypto asset service providers, will become applicable by December 30, 2024. After that point, crypto companies will have until July 2026 to become fully compliant with MiCA. Launched in September 2018 by Circle and crypto exchange Coinbase, USDC is now the second-biggest stablecoin globally, with $32.4 billion worth of tokens in circulation, according to CoinGecko data. It is second only to Tether's USDT, the world's largest stablecoin with $112.7 billion in circulation, according to CoinGecko.
Thames Water accused of ‘chicanery’ over £150m dividend payment 2024-07-01 15:47:00+00:00 - Thames Water has been urged to show greater transparency over its finances and accused of “financial chicanery” after it emerged its board had approved a £150m dividend hours before its shareholders U-turned on providing emergency funding. The Guardian revealed last week that the board of the struggling water supplier agreed to the payout at a meeting on 27 March. The following day, the debt-laden company said its investors were no longer willing to provide £500m of funding they had previously pledged, raising the prospect that the company may be temporarily nationalised. Thames Water made no mention of the dividend payment at that point. The water industry regulator, Ofwat, planned to investigate the circumstances around the dividend paid by Thames, sources said. The company was already under investigation over its decision to pay a separate £37.5m dividend at the time the £150m dividend was paid. Britain’s biggest water supplier said the payment was made from the regulated company to an intermediate parent company, Kemble Water Eurobond, to “settle a pension top-up payment” and “surrender relief” on tax losses. Gary Carter, GMB national officer, said: “Thames Water has once again shown an alarming lack of transparency. “Of course GMB wants our members’ pension pots to get back in the black – but shareholders should be topping it up. “Instead they’re taking money out of the regulated company, money needed to stop spills and pay our members’ wages.” He added: “Thames Water needs to front up about its financial chicanery, while shareholders need to cough up to fill the pensions black hole – not customers or taxpayers.” The Liberal Democrat Treasury spokesperson Sarah Olney, who has called for Thames Water to be put into special administration by the government and for it to be reformed as a public benefit company, said: “This is a scandalous payout while our rivers are polluted with sewage and the company stands on the brink of bankruptcy. “It is concrete evidence of why we need to abolish Ofwat and create a new water regulator with real teeth and power. “The public will never forgive the Conservative party for how they have let water firms get away with financial mismanagement and environmental vandalism.” Adrian Ramsay, co-leader of the Green party of England and Wales, said: “The further revelations about Thames Water further prove that the experiment of a privatised water system has fundamentally failed. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion “At a time when our rivers are choked with sewage and water pipes are at bursting point, it’s unconscionable that water companies continue to prioritise payouts over their responsibilities to the public and the environment.” The campaigner and former Undertones singer Feargal Sharkey said: “The dividend illustrates yet again the utter contempt and disdain that the water industry treats regulators and the politicians that oversee it with. “Ofwat seems to have no ability to control them. There is an arrogance and contempt towards customers and regulators – that’s what happens when you have a company operating a monopoly with no proper oversight.” The £150m did not reach external Thames shareholders but did leave the ringfenced portion of the group’s complex corporate structure. Ofwat has been clamping down on the flow of cash from ringfenced water companies to holding companies, amid concerns that payouts are weakening the finances of regulated water companies. Ofwat is due to publish its draft response to water firms’ five-year business plans on 11 July. Thames’s annual results need to be published by 15 July. Thames Water has been approached for comment.
Liberal justices say Trump immunity decision 'will have disastrous consequences' for the U.S. 2024-07-01 15:24:00+00:00 - WASHINGTON — The Supreme Court's liberal bloc issued blistering dissents Monday in the Trump immunity ruling, arguing that it "reshapes the institution of the presidency" and "makes a mockery" of the constitutional principle that no man is above the law. Justice Sonia Sotomayor, reading her dissent from the bench, said that "relying on little more than its own misguided wisdom ... the Court gives former President Trump all the immunity he asked for and more." She added that "because our Constitution does not shield a former President from answering for criminal and treasonous acts, I dissent." The Supreme Court ruled 6-3 on ideological lines that former President Donald Trump has immunity for some of his conduct as president but not unofficial acts in the federal election interference case. The court did not determine what constitutes an "official" act in this case, leaving that to the lower court. Follow live updates on the Trump immunity hearing The decision adds another hurdle and further delay to special counsel Jack Smith's prosecution of the former president. Trump was indicted last year on charges he conspired to "overturn the legitimate results of the 2020 presidential election." Sotomayor said that the majority opinion, written by Chief Justice John Roberts, invents "an atextual, ahistorical, and unjustifiable immunity that puts the President above the law." Their ruling, she went on, makes three moves that she said "completely insulate Presidents from criminal liability." Sotomayor said the court creates absolute immunity for the president's exercise of "core constitutional powers," creates "expansive immunity for all 'official acts,'" and "declares that evidence concerning acts for which the President is immune can play no role in any criminal prosecution against him." Sotomayor warned that the ruling "will have disastrous consequences for the Presidency and for our democracy" and that it sends the message: “Let the President violate the law, let him exploit the trappings of his office for personal gain, let him use his official power for evil ends.” She added, “Even if these nightmare scenarios never play out, and I pray they never do, the damage has been done. The relationship between the President and the people he serves has shifted irrevocably. In every use of official power, the President is now a king above the law.” In her own written dissent, Justice Ketanji Brown Jackson said that the majority's ruling "breaks new and dangerous ground." "Departing from the traditional model of individual accountability, the majority has concocted something entirely different: a Presidential accountability model that creates immunity—an exemption from criminal law — applicable only to the most powerful official in our Government," she wrote. Jackson warned that under the majority's "new Presidential accountability mode," a hypothetical president "who admits to having ordered the assassinations of his political rivals or critics...or one who indisputably instigates an unsuccessful coup...has a fair shot at getting immunity." The chief justice dismissed the dissents, suggesting that his three liberal colleagues had misinterpreted the majority's opinion and were engaging in "fear mongering." Roberts argued that they "strike a tone of chilling doom that is wholly disproportionate to what the Court actually does today." He wrote that "like everyone else, the President is subject to prosecution in his unofficial capacity." He also appeared to scoff at Sotomayor for what she included in her dissent, saying that her "most compelling piece of evidence consists of excerpted statements of Charles Pinckney from an 1800 Senate debate." He continued, "But those statements reflect only the now-discredited argument that any immunity not expressly mentioned in the Constitution must not exist." Justice Amy Coney Barrett wrote in a concurring opinion that she agreed with some of the majority opinion but not all of it. Notably, she said she agreed with Sotomayor that Trump’s immune conduct should still be allowed to be used as evidence in his trial. “The Constitution does not require blinding juries to the circumstances surrounding conduct for which Presidents can be held liable,” she said. Soon after the court issued the ruling, Trump celebrated the decision on his Truth Social account, writing in all caps: "Big win for our Constitution and democracy. Proud to be an American!" A Biden campaign adviser, on the other hand, said that the ruling doesn't change what happened on Jan. 6, 2021. "Donald Trump snapped after he lost the 2020 election and encouraged a mob to overthrow the results of a free and fair election," the adviser said. "Trump is already running for president as a convicted felon for the very same reason he sat idly by while the mob violently attacked the Capitol: he thinks he’s above the law and is willing to do anything to gain and hold onto power for himself."
These Top 3 Banks Raise Dividends After Passing Fed Stress Test 2024-07-01 15:17:00+00:00 - Every once in a while, the Federal Reserve has to step aside from its primary function of keeping markets safe and employment running strong - without too much inflation - to ensure banks are doing okay. What’s called the Fed’s “stress test” ended last week, and despite some concerns about the state of consumer credit, most banks passed with flying colors. Passing the test means these banks have a new capital requirement to upkeep, set by the Fed after analyzing results. Often, the risk management departments at the banks overshoot the capital required before the test, which means they routinely have excess capital after the fact, which is the case today. So, what is management looking to do with this excess capital? Bank of America Co. NYSE: BAC, J.P. Morgan Chase & Co. NYSE: JPM, and Citigroup Inc. NYSE: C have decided to reward their shareholders for sticking by them despite economic concerns. These rewards include a mix of increased dividend payouts, share buybacks, and good ole guidance increases likely to come in the following quarterly announcements. Get Citigroup alerts: Sign Up Bank of America Gets an Upgrade: Here's Why Bank of America Today BAC Bank of America $40.01 +0.24 (+0.60%) 52-Week Range $24.96 ▼ $40.34 Dividend Yield 2.40% P/E Ratio 13.84 Price Target $39.79 Add to Watchlist The bank passed the Fed’s stress test recently and announced a new path forward for its investors. According to management, the bank is now looking to pay a dividend that is 8% higher, sending it to $0.26 a share for the third quarter in dollar terms. Because Bank of America is one of the banks with the most commercial exposure, meaning it derives much of its revenue and earnings from commercial products like credit cards and mortgages, others on Wall Street felt comfortable boosting the bank’s price target. Bank of America Dividend Payments Dividend Yield 2.40% Annual Dividend $0.96 Annualized 3-Year Dividend Growth 8.51% Dividend Payout Ratio 33.22% Recent Dividend Payment Jun. 28 See Full Details Those at Keefe, Bruyette & Woods saw it fit to place a $46 a share price target for Bank of America stock, daring it to rally by as much as 15.3% from where it trades today. By the way, today's price would bring investors close to a new all-time high, reiterating the markets' bullish momentum toward the financial sector. Why? According to the CME's FedWatch tool, the Fed is also looking to announce interest rate cuts later this year, by September 2024. These potential cuts would bring an additional tailwind for consumer activity, translating into credit card interest income. Also, mortgage rates could decrease slightly, creating new potential demand for mortgage originations and more interest income for Bank of America. Following these trends, Wall Street forecasts earnings per share (EPS) growth of nearly 10% in Bank of America stock for the next 12 months. J.P. Morgan's Corporate Branches Hold a Market Premium JPMorgan Chase & Co. Today JPM JPMorgan Chase & Co. $205.45 +3.19 (+1.58%) 52-Week Range $135.19 ▼ $207.09 Dividend Yield 2.24% P/E Ratio 12.41 Price Target $194.10 Add to Watchlist Consumers won’t be the only ones to benefit from potential rate cuts; businesses are, too. The stock market tends to become more active when rates go lower, a nice change from today’s low volatility index (VIX). J.P. Morgan has an extensive trading department, which means the bank can bring in more revenue from awakening markets. JPMorgan Chase & Co. Dividend Payments Dividend Yield 2.24% Annual Dividend $4.60 Dividend Increase Track Record 14 Years Annualized 3-Year Dividend Growth 4.00% Dividend Payout Ratio 27.78% Next Dividend Payment Jul. 31 See Full Details After passing the stress test and knowing what could come down the road, management decided to boost the quarterly dividend to $1.25 from $1.15. In addition, up to $30 billion was allocated toward a share repurchase program. However, because this bank has the most corporate finance exposure on today’s list, markets are willing to pay a premium valuation over peers. On a price-to-sales (P/S) basis, J.P. Morgan commands a 2.3x multiple, a premium of 34% over Bank of America’s 1.7x and 212% over Citigroup’s 0.7x. Seeing analysts at the UBS Group boost the bank’s valuation to $224 a share makes more sense now, daring it to rally by 10.5% from where it trades today. Citigroup's Risk Management Fuels Wall Street Growth Forecasts Citigroup Today C Citigroup $63.43 -0.03 (-0.05%) 52-Week Range $38.17 ▼ $64.98 Dividend Yield 3.34% P/E Ratio 18.77 Price Target $65.03 Add to Watchlist Out of all the banks that passed the Fed’s test, Citigroup delivered the safest results, and now shareholders will be rewarded for it. Management has announced a $0.56 share dividend and an up-to-date buyback program. While this is not the most significant increase in payouts, there is another—better—way for investors to get the lion’s share of return on this stock. Citigroup Dividend Payments Dividend Yield 3.34% Annual Dividend $2.12 Annualized 3-Year Dividend Growth 0.65% Dividend Payout Ratio 62.72% Recent Dividend Payment May. 24 See Full Details Wall Street analysts now forecast EPS growth of 22.2% this year for Citigroup stock. Those at Oppenheimer now see a valuation of up to $86 a share for Citigroup, calling for as much as 35% from where the stock trades today. New evidence may have driven Price T Rowe Associates, Citigroup’s largest shareholder, to boost their stake in the bank by 123.5% as of May 2024. That increase made the asset manager’s investment as big as $2 billion today. Before you consider Citigroup, 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 Citigroup wasn't on the list. While Citigroup currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Inside Starbucks' plans to improve stores for customers and baristas 2024-07-01 15:14:00+00:00 - watch now Starbucks cafes across the country are starting to change how they make drink orders, among other tweaks designed to reduce bottlenecks and long wait times that have dogged the chain. The overhaul comes as the coffee giant prepares for an anticipated swell of orders through its mobile app. At the heart of the plan is Starbucks' "Siren Craft System," a series of processes that are aimed at making baristas' jobs easier and speeding up service times for customers. Starbucks said more than 10% of its 10,000 stores have already implemented the system, which includes changing the production order for hot and cold drinks. It will be in use across North America by the end of July, according to the company. Executives hope the changes will provide a much-needed jolt to Starbucks. In April, the company reported a disappointing second quarter, as U.S. same-store sales fell 3% and traffic dropped 7%. The coffee chain cut its 2024 outlook. Starbucks reported rates of incomplete mobile app orders in the mid-teens and said occasional customers came in less. CEO Laxman Narasimhan mentioned the need to make improvements to stores. Katie Young, senior vice president of store operations at Starbucks, said the most immediate shift that needed to happen in cafes was better handling the unexpected. "It's the ability to flexibly respond to things we cannot predict," she told CNBC in an interview. Starbucks Coffee shop in Krakow, Poland on February 29, 2024. Beata Zawrzel | Nurphoto | Getty Images The store changes will be key this month, as Starbucks on Monday started opening up its app to non-rewards members, which the company believes will increase traffic and orders. Analyst Peter Saleh, managing director at BTIG, said, "My sense is that they have a lot of demand in certain stores, and the footprint of the kitchen is so small, you have to find ways to be more efficient." Losing customers because of slow orders and other store frustrations could cost Starbucks at a particularly vulnerable time. Americans have become cost conscious in the face of ongoing inflation, and in some cases have pulled back on morning or afternoon beverages and snacks. Narasimhan in April said consumers are spending more cautiously. Starbucks has done something uncharacteristic in recent weeks, joining the stream of value offerings with a $5 food and beverage combo option. Communicating value to customers is also part of the plan to drum up business. The Siren system Starbucks has been diagnosing the bottleneck issue for more than a year, since the company's reinvention plan rollout in 2022, said Young. At the time, Howard Schultz was at the helm, having returned during a burgeoning unionization movement and shifts in consumer preferences. The changes underway in cafes were first previewed that fall, to be rolled out in the years to come. Narasimhan took over for Schultz in March 2023. The Siren system processes were developed with worker feedback on which issues stopped them from creating beverages and connecting with customers. Starbucks said it plans to add a role akin to an expediter in a restaurant production line, a "play caller" who steps away from production and helps solve logjams in cafes, handling tasks such as restocking cups or helping when an unexpected crowd arrives. The company plans to train existing workers for the role or potentially add new baristas, if needed. "One of the pain points we saw was [that] our espresso machine was often running all the time, and that was one of the things that kept our partners from being able to check in. And another thing we saw that you didn't necessarily know was which part of the store would get crowded," Young said. "We needed to actually have a partner that was dedicated when things got busy to pulling out of production and just helping." Starbucks said it will also change the order in which beverages are made. Previously, cold drinks were prioritized from start to finish, even if a hot beverage order came in first, as pulling espresso shots was the last step. This could create a traffic jam in the drive-thru, for example, if a person ordered one of each beverage, as the cold item would be ready while the hot drink was still in production. Macoy McLaughlin, manager of Seattle's First and Walker Starbucks location, said producing beverages in the order they were placed allows for a faster, streamlined process. "We actually have proper sequencing between our hot and cold bars, versus cold bars becoming as popular as ever, to really have a consistent experience for the customers. So we're actually making them in the order they're coming in," McLaughlin said, adding that the cafe feels busier, but customers in store and in the drive-thru are getting drinks faster. Baristas also will have more control over the company's digital production manager, an iPad system that controls the sequencing of orders in various channels from cafes, mobile orders and the drive-thru, the company said. Workers will have more flexibility over changing order priority. Starbucks app expands
Meta accused of breaking EU digital law by charging for ad-free social networks 2024-07-01 14:59:00+00:00 - The European Commission has accused Mark Zuckerberg’s Meta of breaching the EU’s new digital laws with an advertising model that charges users for ad-free versions of Facebook and Instagram. Meta launched a “pay or consent” model last year in an effort to comply with the bloc’s data privacy rules, under which users pay a monthly fee for an ad-free version of Facebook or Instagram that does not use their personal data for advertising purposes. If users do not pay, their data is used to tailor personalised adverts that appear in their social media feeds. The European Commission, the EU’s executive body, said the model did not comply with the Digital Markets Act (DMA), which is designed to rein in big tech companies. The commission issued preliminary findings from an investigation into “pay or consent” on Monday and found the model “forces users to consent” to their data being collected from multiple platforms if they don’t want to pay. Meta also does not allow users to choose a service that uses less of their data but is broadly similar to the “with adverts” versions of Facebook and Instagram, the commission said. “In the commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks,” it said. It said in order to comply with the DMA, Meta must launch “equivalent” versions of Facebook and Instagram that use less personal data. A Meta spokesperson said the new model had been designed to comply with the DMA and other regulatory demands. “Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed subscription for no ads to address several overlapping regulatory obligations, including the DMA. We will continue to engage constructively with the commission,” they said. Anne Witt, a professor of antitrust law at EDHEC Business School in France, said the key question behind the case is whether consumers “freely consent” to their data being collected when the choice is either to pay for a service or use it free of charge, but with the caveat that Meta is then allowed to build profiles of them for advertisers. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion “The commission is arguing that Meta should give users a choice between a highly personalised service for which it is allowed to collect user data and a less-personalised service for which it may not collect users’ data,” she said. The commission must finish its investigation by the end of March next year and Meta faces a fine of up to 10% of global turnover – equivalent to $13.5bn (£10.5bn) – if it is deemed to have breached the act. The commission said last week that Apple had breached the DMA by restricting competition on its app store.
Eli Lilly Stock Up: GLP-1 Zepbound Targets Sleep Apnea Market 2024-07-01 14:39:00+00:00 - Eli Lilly and Company Today LLY Eli Lilly and Company $914.37 +8.99 (+0.99%) 52-Week Range $434.34 ▼ $916.83 Dividend Yield 0.57% P/E Ratio 134.66 Price Target $812.72 Add to Watchlist Global pharmaceutical giant Eli Lilly & Co. NYSE: LLY has made headlines with its leading GLP-1 weight loss drugs, Mounjaro and Zepbound. Mounjaro is prescribed for Type 2 diabetes but is often used off-label for weight loss. Zepbound is prescribed for obesity treatment. The active ingredient in both is Tirzepatide. Lilly submitted an application to the U.S. Food and Drug Administration (FDA) to expand the label for Zepbound to include treatment of obstructive sleep apnea (OSA) backed by its Phase 3 SURMOUNT-OSA clinical studies. OSA sufferers often use a continuous positive airway pressure (CPAP) machine to keep their airways open while they sleep to ensure they receive enough oxygen. Get Eli Lilly and Company alerts: Sign Up Eli Lilly’s List of Competitors Just Got Bigger Eli Lilly and Company MarketRank™ Stock Analysis Overall MarketRank™ 4.31 out of 5 Analyst Rating Moderate Buy Upside/Downside 11.0% Downside Short Interest Healthy Dividend Strength Weak Sustainability -2.25 News Sentiment 0.57 Insider Trading Selling Shares Projected Earnings Growth 40.04% See Full Details Eli Lilly operates in the medical sector and competes with GLP-1 weight-loss medication providers and developers, including Novo Nordisk A/S NYSE: NVO, Viking Therapeutics Inc. NASDAQ: VKTX, and Altimmune Inc. NASDAQ: ALT. With its pending FDA application for OSA, ResMed Inc. NYSE: RMD and Inspire Medical Systems Inc. NYSE: INSP became the competitors, as evidenced by their 11.5% and 16% stock price drop, respectively, following news of Lilly’s trial results on June 21, 2024. GLP-1 drugs were created to help Type 2 diabetes patients. A side effect was dramatic weight loss, especially among diabetes patients with obesity. Obesity has been linked to many health issues, including heart disease and stroke. Obesity can lead to OSA or worsen its symptoms. Obstructive Sleep Apnea Impacts over 80 Million Americans OSA is a breathing disorder experienced during sleep where the upper airway partially or completely collapses, resulting in apnea, decreased oxygen saturation, and waking up. The lack of efficient sleep can lead to more weight gain and other health issues. OSA impacts 80 million adults in the U.S., and over 20 million have moderate-to-severe OSA. OSA can lead to health problems, including hypertension, coronary heart disease, stroke, heart failure, atrial fibrillation, and Type 2 diabetes. Eli Lilly Looks to Boost Zepbound Audience to Include Obstructive Sleep Apnea Patients For this reason, GLP-1 drug makers are trying to expand their indications to broaden their user base suffering from health issues stemming from obesity. This has led Eli Lilly to study the effects of its GLP-1 obesity treatment, Zepbound (Tirzepatide), on obstructive sleep apnea. Eli Lilly conducted SURMOUNT-OSA phase 3 clinical trials on its impact on OSA. The 52-week studies evaluated Tirzepatide injections in adults with moderate-to-severe OSA and obesity who were not on continuous positive airway pressure therapy (CPAP devices) and a second group of adults who were on CPAP devices. The apnea-hypopnea index (AHI) measures the number of times a person’s breathing is restricted or complete airflow blockage per hour of sleep. It’s used to determine the severity of OSA. Zepbound Results in 55% AHI Reduction in OSA Patients without PAP Treatment For the non-PAP patients, the Tirzepatide resulted in a mean AHI reduction from baseline of 27.4 events per hour compared to a mean AHI reduction from baseline of 4.8 events per hour with the placebo. Tirzepatide results in a 55% reduction versus 5% from baseline for placebo. It also led to a mean body weight reduction of 18.1% from baseline versus 3.1% for placebo. Zepbound Results in 62.8% AHI Reduction for OSA Patients Using CPAP Machines For the PAP patients, Tirzepatide led to a mean AHI reduction from a baseline of 30.4 events per hour compared to the mean AHI reduction from a baseline of 6 events per hour for the placebo. In key secondary outcomes, Tirzepatide resulted in a 62.8% AHI reduction compared to a 6.4% reduction for placebo in patients undergoing PAP therapy. They also had a mean bodyweight reduction of 20.1% from baseline compared to 2.3% for placebo. The FDA Has Fast-Tracked a Decision on Zepbound Label Expansion to Include OSA On June 24, 2024, Eli Lilly submitted an FDA application to expand the label for Zepbound to include treatment of OSA. The FDA has fast-tracked the application, leading to a quicker review process. Fast track is a designation for drugs that fill an unmet need or treat severe conditions. A decision from the FDA is expected by the end of 2024. This news sent shares of ResMed, the largest maker of CPAP machines, and Inspire Medical Systems plummeting over 10% each. LLY Stock Continues its Parabolic Arc Pattern The daily candlestick chart for LLY illustrates a parabolic arc pattern. LLY initially peaked at $800.78 on March 4, 2024. It formed a rounding bottom after hitting a low of $718.30 on April 25, 2024. Shares surged through the prior high to complete a cup pattern and continued to rise parabolically to new all-time highs on the run-up to $915.54. Incidentally, the daily relative strength index surged up through the overbought 70-band on June 3, 2024, and it has been able to float above there ever since. Parabolic arc patterns are usually topping patterns, providing a buy-the-dip opportunity on the pullbacks as the RSI oscillates back down through the 70-band. The question is when, not if, it happens. Pullback support levels are at $870.13, $837.01, $800.78, and $766.12. Eli Lilly & Co. analyst ratings and price targets are at MarketBeat. Before you consider Eli Lilly and Company, 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 Eli Lilly and Company wasn't on the list. While Eli Lilly and Company currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Environment Agency refuses to reveal directors’ possible conflicts of interest 2024-07-01 14:26:00+00:00 - The Environment Agency is refusing to provide campaigners with details of potential conflicts of interests with water companies held by its directors across England. The refusal to provide the information comes after the head of the agency, Philip Duffy, admitted that freedom of information requests have been buried by the regulator because the truth about the environment in England is “embarrassing”. Ash Smith, of Windrush against Sewage Pollution (Wasp), said the refusal to provide details of any potential conflicts of financial and business interests held by the regulator’s regional directors was inexcusable. He revealed that a freedom of information (FoI) request had been rejected by the EA on the grounds that there was no lawful basis on providing the information as it was not necessary to satisfy a legitimate interest. The EA also said it would be unfair to individuals to disclose such information to the world at large. The Information Commissioner’s Office (ICO) is now investigating the refusal to comply with the FoI request. In a letter to Duffy, Smith said: “Claiming that the public has no right to know and that the interest of potentially conflicted employees takes precedence is ludicrous and disgraceful … public scrutiny and transparency are vital.” He called on Duffy not to wait for the ICO ruling on the refusal but “to set the professional standards of your organisation, apply the Nolan principles of public life and order the release of the directors interests under the Freedom of Information Act”. Smith highlighted past cases of senior agency staff moving to work for water companies as the reason transparency was needed. These include the former director of operations for the EA, who became a non-executive director of British Water, then an industry lobbying organisation, and was later recruited by Southern Water at the time it had been accused of illegal sewage dumping, for which it was later fined a record £90m. Duffy, who took over as the EA chief executive last July, told an audience at the Rivers Summit last month that his officials were “worried about revealing the true state of what is going on” regarding the state of the environment. Duffy said: “I see these letters and these FoI requests and I’ve got great volumes of them, and I see local officers going through quite a contorted processes to not to answer when they know, often, the answer but it’s embarrassing. “They do it because they are frightened. They are worried about revealing the true state of what’s going on, they’re worried about reaction from NGOs and others, and possibly from the government, about the facts of the situation. And they’re often working at a local level but in a very nationally charged political environment, which is very difficult for them.” The ICO, which oversees the law on the Freedom of Information Act, has warned the EA that the public have a right to have their requests answered and that transparency should be taken seriously. Last year, theEA was served with an enforcement notice by the ICO because of evidence seen by the commissioner about its performance in relation to its statutory duties under the FoI Act. An EA spokesperson said: “We are completely committed to complying with the freedom of information/environmental information regulations. It’s a top priority and we constantly review our performance. We receive around 46,000 requests each year. As is standard practice for public sector organisations, we make public the personal interests of all board members and executive directors at the Environment Agency, but it’s right we do not make public the interests of other employees. This is because it would be unlawful, unfair and would breach data protection rules.”
Applied Digital Boosts Stock with Cutting-Edge AI Data Centers 2024-07-01 13:50:00+00:00 - Applied Digital Today APLD Applied Digital $6.50 +0.55 (+9.24%) 52-Week Range $2.36 ▼ $11.07 Price Target $8.40 Add to Watchlist Applied Digital Co. NASDAQ: APLD designs, develops and operates next-generation data centers accommodating artificial intelligence (AI) service providers in the high-performance computing (HPC) industry. The AI boom has been driving the demand for more data centers, which is driving demand for next-gen data centers that fall right in Applied Digital's wheelhouse. The company also provides blockchain colocation services for cryptocurrency miners and GPU cloud services through its Applied Digital Cloud segment. They are an NVIDIA Co. NASDAQ: NVDA Elite Partner. Applied Digital operates in the computer and technology sector, competing with data center companies, including data center REIT Digital Realty Trust NYSE: DLR and giant Equinix NASDAQ: EQIX. Get Applied Digital alerts: Sign Up The company has two blockchain data centers. Its JMS01 data center is located in Jamestown, North Dakota, and has a capacity of 100 MW. Its ELN01 data center is in Ellendale, North Dakota, and has a capacity of 180 MW. Its 2 HPC customer-built AI data centers are JMS02 in Jamestown and ELN02 in Ellendale, North Dakota, and have capacities of 9 MW and 100 MW, respectively. Applied Digital's Ellendale Data Centers: Power Outages and Growth Plans Applied Digital MarketRank™ Stock Analysis Overall MarketRank™ 3.89 out of 5 Analyst Rating Buy Upside/Downside 31.0% Upside Short Interest Healthy Dividend Strength N/A Sustainability N/A News Sentiment 0.88 Insider Trading N/A Projected Earnings Growth Decreasing See Full Details In fiscal Q3 2024, Applied Digital suffered several power outages in its Ellendale data centers. In Q2 2024, Applied Digital broke ground on its first 100 MW HPC facility in Ellendale. The 342,000-square-foot building is designed to provide highly efficient and ultra-low-cost HPC applications with a liquid-cooled infrastructure. The company secured an exclusive letter of intent (LOI) with a US-based hyperscaler for a 400 MW capacity lease of its Ellendale HPC campus as an anchor tenant. This includes the 100 MW facility, which is still under construction, and plans for two additional buildings. The company continues to witness outsized demand for HPC hosting at its differentiated Ellendale campus. Ellendale has 600 MW of future capacity. Applied Digital's Data Center Hosting Updates The 100 MW Jamestown facility operates at full capacity. The 180 MW Ellendale facility experienced a power outage that started in January 2024. Its utility provider installed equipment that enables them to power down affected portions of the site. They discovered the power failures were due to transformers that didn't meet industry standards. The company procured the correct transformers and components to start re-energizing to around 14% of its capacity. Its blockchain data centers total 280 MW capacity hosting infrastructure (power and maintenance) for Bitcoin miners and blockchain infrastructure companies. Its largest Bitcoin miner is Marathon Digital Holdings Inc. NASDAQ: MARA. Applied Digital Cloud Services Update Applied Cloud Services enable customers to execute and scale critical HPC workloads cost-effectively, including AI, rendering, and machine learning (ML). It enables AI/ML companies to access cloud servers to run and train AI applications. While the initial customers were startup AI companies with significant funding, Applied Digital is now experiencing demand from medium to large-size enterprises. This is essentially GPU-as-a-service (GaaS), which enables AI companies to perform AI applications without having to invest in buying the equipment. Understanding Parameters: Fueling the AI Boom and LLM Complexity The evolution and upgrade of ChatGPT models bring a significant rise in the number of parameters and higher energy consumption. Parameters are pieces of information learned from training data for large language models (LLMs). As they encounter sequences of words, they change the value of the parameters to create connections and ultimately predict the next word or phrase in the sequence. The more parameters are used, the better its performance can be. Parameters are the numerical foundation of LLMs representing learned relationships between training data. The more parameters that are used, the more power in terms of computational and energy is needed. Chat-GPT 3, released in 2020, had 175 billion parameters. GPT-4 in 2023 had 8X 220 billion or 1,760,000,000,000 or 1.76 trillion parameters, which require exponentially more computing power and energy consumption. The number of parameters continues to climb, requiring even more power. Data center electricity consumption is expected to grow 125% by 2030, using 9% of all electricity in the US. Comparing Traditional Existing Data Centers to Next-Get AI Data Centers AI hardware requires much more power than traditional devices. A conventional CPU in a traditional data center uses 300 watts per hour, while an NVIDIA H100 GPU uses 700 watts per hour. A typical Google request/query takes 0.3 watt-hours, compared to a Chat-GPT request, which is 10x at 2.9 watt-hours. With the elevated power needed to operate AI applications, the traditional data center is lacking. Traditional data centers have low IT MW load and low power density design (12 kW to 15 kW). They are located in major cities and are optimized for high-speed and ultra-low latency. They are used for the internet backbone, centralized data, and instantaneous streaming apps that are evolving for Web 2.0. Next-gen AI data centers are purpose-built to support significantly higher energy consumption. They are better suited to remote locations with high-density support up to 120kW and are latency insensitive due to training. They are used for HPC functions like AI, ML, language processing, drug discovery, and graphics rendering. Applied Digital has over 6,000 H100 GPUs deployed as clusters across 3 data center footprints. APLD Stock is Forming a Potential Cup and Handle Pattern The daily candlestick chart for APLD depicts a cup and handle pattern. The cup line has been tested at $6.34 and is awaiting a retracement to form the handle. The daily relative strength index peaked at the 70-band and is pulling back to the 61-band. Pullback support levels are at $5.57, $4.82, $4.35, and $3.84. Applied Digital analyst ratings and price targets are at MarketBeat. The consensus price target suggests a 41.18% upside. Before you consider Applied Digital, 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 Applied Digital wasn't on the list. While Applied Digital currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Meta’s Ad-Free Subscription Violates Competition Law, E.U. Says 2024-07-01 13:31:19+00:00 - When Meta introduced a subscription option last year that would allow users in the European Union to pay for an advertising-free experience of Instagram and Facebook, it was meant to fix regulatory problems the company faced in the region. The plan created new legal headaches instead. On Monday, European Union regulators said Meta’s subscription, which costs up to 12.99 euros a month, amounted to a “pay or consent” scheme that required users to choose between paying a fee or handing over more personal data to Meta to use for targeted advertising. Meta introduced the subscription last year as a way to address regulatory and legal scrutiny of its advertising-based business model. Of most concern was the company’s combination of data collected about users across its different platforms — including Facebook, Instagram and WhatsApp — along with information pulled from other websites and apps. Meta argued that by offering a subscription, users had a fair alternative. But regulators on Monday said the system was no choice at all, forcing users to pay for privacy. The authorities said Meta’s policy violated the Digital Markets Act, a new law aimed at reining in the power of the biggest tech companies.
French market leaps amid hopes Le Pen will fall short of outright victory 2024-07-01 13:22:00+00:00 - Shares on the French stock market have risen after the first round of voting in the country’s parliamentary election eased concerns about an outright victory for the rightwing National Rally (RN) party. The euro rose against the dollar, while the risk premium investors demand for holding French government bonds fell as the markets took the view that the result could have been worse. But despite a 1.5% jump in France’s benchmark stock market measure – the Cac 40 – on Monday, shares have fallen 5% in the past month amid fears that Marine Le Pen’s RN could still emerge from next Sunday’s second round of voting with an overall majority. RN secured 33% of the vote, while the leftwing New Popular Front secured 28% and Emmanuel Macron’s centrist bloc won the support of 20% of those who voted. Alex Everett, an investment manager at the fund management company abrdn, said: “We are not out of the woods yet. The National Rally exceeded expectations and may yet pick up the second-round votes for a relative or even absolute majority. “Intense horse trading until Tuesday evening will likely see deals cut between the left and centre parties to try to derail this.” On Friday, the gap between the interest rate (yield) on French and German bonds had widened to its highest since the eurozone debt crisis in 2012, but the spread narrowed slightly from 0.85 percentage points to 0.75 points after the results came in. The gap was less than 0.5 points before the snap election was called. Krishna Guha, an analyst at the US investment bank Evercore, said: “The vote is far from definitive but leans in favour of the less bad scenario of a hung parliament, political paralysis in Paris and chronic dysfunction at the EU level rather than the worse scenarios of an outright win for the far right or far left that might directly lead to a new European sovereign crisis.” skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Guha warned that the fall in the stock market since Macron announced the election and the only partial narrowing of bond spreads underlined “that material risks remain heading into the second round vote Sunday and beyond”.
Chewy Stock Surges on Roaring Kitty's Disclosure of Major Stake 2024-07-01 13:07:00+00:00 - Chewy Inc. NYSE: CHWY shares spiked as much as 29% in premarket trading Monday after Keith Gill—known online as "Roaring Kitty"—disclosed a 6.6% passive stake in the online pet food and product retailer. Chewy Today CHWY Chewy $25.44 -1.80 (-6.61%) 52-Week Range $14.69 ▼ $39.46 P/E Ratio 141.33 Price Target $26.50 Add to Watchlist The US Securities and Exchange Commission filing reveals that Gill owns roughly 9 million Class A shares, valued at about $245 million based on Friday's closing price. This surge follows last week's brief spike in shares of Chewy and Petco Health and Wellness Co. NASDAQ: WOOF after Gill posted a cartoon image of a dog on social media platform X. Get Chewy alerts: Sign Up Keith Gill rose to fame during the GameStop stock surge in 2021, where his online persona, "Roaring Kitty," played a significant role in the meme stock movement. Monday's filing for Chewy lists June 24 as the event date and includes an amusing reference to Gill's Roaring Kitty persona. The SEC's Edgar database document has a section for the reporting person to "designate whether you are a cat," followed by two checkboxes. The box reading "I am not a cat" is marked. Interestingly, as the news of Gill's stake in Chewy sent its shares soaring, GameStop shares plummeted in premarket trading, last down close to 9%. This drop comes amid news of Gill facing a new class action lawsuit over allegations of a pump-and-dump scheme involving GameStop Corp. The lawsuit, filed on June 28 in the Eastern District of New York, accuses Gill of manipulating GameStop's stock price through his social media influence. Plaintiff Martin Radev alleges that Gill discreetly bought a large number of GameStop call options before making a social media post on May 12, 2024, which sparked renewed interest in the company's stock. Additionally, retail holders might be selling GameStop shares to purchase Chewy shares, aiming to follow Gill's investment moves. Chewy’s Impressive Gains: Analyzing Earnings and Performance Chewy MarketRank™ Stock Analysis Overall MarketRank™ 2.16 out of 5 Analyst Rating Moderate Buy Upside/Downside 2.2% Upside Short Interest Healthy Dividend Strength N/A Sustainability N/A News Sentiment 0.61 Insider Trading Selling Shares Projected Earnings Growth 63.64% See Full Details Year-to-date, Chewy has posted impressive gains, with the stock up just over 15%, not accounting for today's premarket gains. Chewy last posted its earnings data on May 29, 2024, reporting $0.15 earnings per share for the quarter, beating the consensus estimate of $0.04 by $0.11. The firm had revenue of $2.88 billion for the quarter, compared to analysts' expectations of $2.85 billion. Over the past several years, revenue has largely met estimates, with modest upticks. From a valuation perspective, the stock does not appear to be the best value play, with a P/E ratio of 151 and a forward P/E of 81. A potential worrying sign for holders is that insiders have been selling shares this year. Over the past twelve months, five insider sales totaling roughly $756 million have been recorded, with no insider buys during the same period. However, the stock has a significant institutional ownership of 93.09%. During the previous twelve months, total institutional inflows have reached $504 million versus outflows of $168 million. Could CHWY be the Next Big Short Squeeze? As of June 15, Chewy's short interest stood at just 4.58%, far from the levels seen in GameStop during the meme stock craze. This suggests Chewy is unlikely to experience the same volatility and outcome as GameStop. Chewy, Inc. (CHWY) Price Chart for Monday, July, 1, 2024 Before you consider Chewy, 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 Chewy wasn't on the list. While Chewy currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
How to Invest in Gold: A Complete Guide 2024-07-01 13:00:00+00:00 - Gold is a precious metal like silver or copper, although its shiny appearance and valuable physical properties have made it one of the most desirable elements. Used in everything from jewelry to electronics, investors have sought gold to preserve (or increase) wealth for longer than any public company has existed. Gold has a diverse number of investment vehicles but also plenty of unique risks that you must understand before investing. Different Forms of Gold Investing If you want to invest in gold, you'll have four main options: physical gold, gold mining companies, gold funds, and gold futures contracts. Let's look at the pros and cons of each type to help you determine the best fit for your portfolio. Get stock market alerts: Sign Up Physical Gold The oldest form of investing is still quite prevalent today: buying and holding physical gold. Physical gold comes in various forms. You’re likely reading this article on a smartphone or device that uses physical gold as an electrical conductor. Gold coins, bars, jewelry, and bullion are some everyday items investors use to add physical gold to their portfolios. Buying and holding physical gold might seem like a good way to simplify the investing process, but there are some complications with owning and storing physical gold. For starters, physical gold must be stored in a safe location, which often comes with recurring costs if you own a significant amount. If you store gold yourself, you must invest in a safe or other secure receptacle. Physical gold is also highly illiquid; you can’t buy and sell gold on an exchange like stocks or futures contracts, although you can buy gold bullion at Costco Wholesale Corp. You must sell physical gold at a jeweler, bullion dealer, online marketplace, or another local collector. Finally, taxes can be a significant headache when investing in physical gold bullion. The IRS considers physical precious metals like gold and silver collectibles, not securities. Collectibles held for less than a year will be taxed at the ordinary income rate like stocks, but the long-term capital gains rate for collectibles is a flat 28%. Obviously, 28% is much higher than the long-term capital gains rate on securities like stocks, which can be 0%, 15%, or 20%, depending on your income level. If minimizing taxes is your primary concern, owning physical gold is the least efficient way to make a gold investment. Gold Mining Stocks If you don’t mind a little risk in your portfolio, gold mining stocks could be a path to outsized returns. However, these stocks are volatile, and gold miners often face financial difficulties if their exploration efforts are unsuccessful. The day-to-day price of gold doesn’t matter as much for these companies as their mining operations, although a prolonged downturn in gold prices could limit their profitability. Individual gold mining stocks carry significant risks. If a gold miner has poor results, its stock price will likely plummet regardless of whether the spot price of gold rises or falls. Mining companies are often looking for more than just gold. For example, Harmony Gold Mining Company (NYSE: HMY) looks for gold, silver, uranium, and copper from mining operations in the Witwatersrand Basin in South Africa, as well as locations in Papua New Guinea and Australia. Gold ETFs and Mutual Funds If owning physical gold sounds like too much of a hassle, let an investment company do the work for you. Exchange-traded funds (ETFs) and mutual funds can be used to gain exposure to gold directly from your brokerage account. And since you own securities and not physical gold, you’ll benefit from the typical capital gains rate, not the collectible rate. Gold ETFs and mutual funds are structured in different ways. The SDPR Gold Shares ETF (NYSE: GLD) seeks to match the spot price of gold by holding bullion in a vault and creating shares based on its gold holdings. ETFs that hold physical gold charge high expense rates to cover costs, but a 40 basis point expense rate is far more manageable than a 28% collectible tax rate. Other funds that hold physical gold bullion include the iShares Gold Trust ETF (NYSE: IAU) and the Van Eck Merk Gold Trust ETF (NYSE: OUNZ). Some ETFs use a portfolio of gold stocks to gain indirect exposure to the asset. Note that these ETFs might have vastly different performances from the gold spot price due to the fundamentals of the companies in the portfolio. For example, the Van Eck Gold Miners ETF (NYSE: GDX) holds a portfolio of gold mining companies that depend on finding gold deposits. If the gold miners in the portfolio have a bad haul, the price of the GDX could decline even if the spot price of gold is accelerating upward. Gold Futures Derivatives like futures contracts can also add exposure to gold, but these instruments are complex and should only be used by experienced investors. Gold futures investors must project not only where the commodity's price is going but also how long it will take to get there. A typical gold futures contract has an expiration date, much like a stock option, but no strike price. These contracts usually represent an ownership claim of 100 troy ounces, however smaller amounts are available. The agreement calls for the delivery of physical gold at expiration, although most investors settle futures in cash before delivery. If you expect the price of gold to rise, you might buy the August 2024 gold futures contract that trades around $2342 (as of June 28, 2024). If the price of gold jumps to $2500 by August, you can sell the contract for a profit or take delivery of the 100 troy ounces at the lower price. However, futures trading involves plenty of risk. Commodities trade 24 hours per day during the week, and volatility is frequently high. Futures trading also involves margin, which means you could lose more than your original investment amount. Benefits and Risks of Investing in Gold Some of the benefits of adding gold to your portfolio include: Diversification: Gold is a commodity that often does well in turbulent periods, and its price movements tend to be uncorrelated with the overall stock market. A portfolio with a diverse asset base can help protect your capital across bull and bear markets. Protection Against Inflation: In periods of high inflation, gold can preserve purchasing power better than cash and help investors maintain their wealth. Long-term Value Retention: Gold has been a valuable commodity for thousands of years and will likely continue to be so. Unlike a stock that can see its underlying company go out of business, owning gold is considered a safe way to preserve capital over time. Investing in gold has downsides as well, so consider the following risks when adding gold exposure to your portfolio: Volatile Price Swings: Like any commodity, precious metals like gold are subject to market volatility. Gold might be considered a safe haven, but that doesn’t mean it can't have whipsaw price action. Expenses: Physical gold requires storage, which can be costly, and is also subject to high taxation due to its status as a collectible in the eyes of the IRS. Potential Underperformance: Gold is often considered a safety play, but if the market or economy doesn’t roll over, gold could be left in the dust by the performance of other assets like stocks. Are Gold Stocks Worth Buying? Whether or not gold is a worthwhile investment for your portfolio depends on your goals, risk tolerance, and investment timeframe. Like any commodity, gold can be volatile and taxed differently depending on how you own it. Owners of gold bullion face storage costs and high taxes, while investors in gold stocks and ETFs face individual company and issuer risk. If you want to preserve wealth in times of economic trouble, gold has long been a steady asset, especially when the threat of inflation is looming. Gold prices often rise during inflationary spells as investors seek to preserve purchasing power while taking money from riskier ventures like stocks. Gold bullion, stocks, and futures offer three unique avenues for exposure, but you must understand the risks of each asset, as well as the overall market risk. Like any company or stock sector, gold has a place in a portfolio but should never be the only asset. How to Start Investing in Gold Thanks to assets like gold ETFs and mutual funds, you can get started with gold investing as quickly as you can open your brokerage app and purchase shares. Gold miner stocks and futures contracts can also be purchased on an exchange through a brokerage account. Owning physical gold is a little more complicated. You’ll need to purchase assets like bullion or jewelry from reputable sources and store them safely. Physical gold is also taxed at a higher rate than assets like stocks or futures contracts, so always consult your investment plan or an advisor when adding a new asset class to your portfolio. Gold is One of the Oldest and Safest Assets, But Is Not Without Risk Gold is a unique investment asset. It has been desirable for thousands of years and has many practical uses beyond just shiny coins and pretty jewelry. And, unlike our investment ancestors, gold can be added to your portfolio today as easily as buying a stock or contracts on a futures exchange. However, while gold is often considered a safe haven during economic turbulence, it's not without risk. Just like other asset classes, gold prices can have volatile moves, and predicting bear markets and recessions is hard. Gold may lag other asset classes like stocks during bull markets, and owning bullion is especially onerous from a tax perspective. Safe doesn’t mean risk-free, so consider talking with an advisor before adding gold to your holdings. Start Your Research With MarketBeat Want to learn more about investing in commodities like gold? MarketBeat has tools to track commodity prices like gold, oil, and more. Click here to learn more about our latest offerings.
3 Stocks Wall Street Could Be Watching on Fannie Mae’s Rally 2024-07-01 12:54:00+00:00 - The new market cycle could be the best environment for ‘boring’ stocks to take off. Recently, there has been some interest in the real estate sector, especially after Warren Buffett started buying homebuilding stocks like PulteGroup Inc. NYSE: PHM and D.R. Horton Inc. NYSE: DHI over the last quarter of 2023. This raised the question of whether the industry could see more rallies ahead. While it may be too late to buy the home builders, considering that they have already rallied significantly over the past 12 months, there are other ways to play the value chain, some of which require more work than most retail investors are willing to do. To save investors hours of research, here’s a list of three stocks to watch out for, notably after shares of Federal National Mortgage Association OTCMKTS: FNMA rallied by nearly 10% in a single day. Get CEMEX alerts: Sign Up Fannie Mae’s rally is directly tied to the price action seen in shares of Zillow Group Inc. NASDAQ: Z, but investors will learn more about why in a bit. For now, the focus lies in the road ahead, not in the rear-view mirror, and what lies ahead is stocks like Equity LifeStyle Properties Inc. NYSE: ELS, SoFi Technologies Inc. NASDAQ: SOFI, and even Mexican-based Cemex NYSE: CX. What 90% of Traders Missed About Cemex Stock CEMEX Today CX CEMEX $6.28 -0.11 (-1.72%) 52-Week Range $5.67 ▼ $9.27 Dividend Yield 0.32% P/E Ratio 44.86 Price Target $9.46 Add to Watchlist Over the past month, traders have received a lot of economic data, with GDP growth and inflation data taking the spotlight. However, the building permits report should be included, but it should be. Over the past year, building permits have been down over 7%, but not all states are equal. According to this Zillow report, Florida is the one state that reports the highest housing shortage, which is why it also received the most building permits over the month, even if the nation is experiencing slowing permit approvals. CEMEX MarketRank™ Stock Analysis Overall MarketRank™ 4.03 out of 5 Analyst Rating Hold Upside/Downside 50.4% Upside Short Interest Healthy Dividend Strength Weak Sustainability N/A News Sentiment 0.81 Insider Trading N/A Projected Earnings Growth 17.24% See Full Details Other states are actually putting their homes for sale on the market, which is why Zillow stock jumped on the rising U.S. home listings report, considering that the platform will be front and center in connecting buyers and sellers. Now, mortgage financing comes after the listed house is sold, right? Hence, Fannie Mae’s rally as well. But that’s outside the scope of the situation in Florida. There’s still a lot of work to be done regarding construction, and that is where Cemex comes into play. Mexico is one of the U.S.’s largest trading partners, and a good chunk of Florida’s cement imports comes directly from Cemex. Knowing that the stock is an indirect way to play Florida’s construction boom, analysts on Wall Street now forecast up to 17.2% earnings per share (EPS) growth for the next 12 months. More than that, those at Morgan Stanley raised their price targets on Cemex stock up to $12 a share. Analysts at Goldman Sachs also boosted the stock to $10 a share, driving both banks to see an 87.5% upside in Cemex stock from where it trades today. SoFi Stock's 200% EPS Growth Shows the Stock is Next in Line SoFi Technologies Today SOFI SoFi Technologies $6.43 -0.18 (-2.72%) 52-Week Range $6.20 ▼ $11.70 Price Target $9.32 Add to Watchlist While Fannie Mae is the tried and tested government entity that typically issues mortgages, SoFi’s popularity is growing like a hiccup. The company’s latest quarterly financials show that SoFi’s net members rose by 44% over the year, bringing the net to 8.1 million today. This rapid adoption comes as new generations prepare to buy their first home, and the more accessible and straightforward financing process sure connects with more tech-savvy customers. SoFi Technologies MarketRank™ Stock Analysis Overall MarketRank™ 2.82 out of 5 Analyst Rating Hold Upside/Downside 41.5% Upside Short Interest Bearish Dividend Strength N/A Sustainability N/A News Sentiment 0.42 Insider Trading Selling Shares Projected Earnings Growth 212.50% See Full Details Due to this rapid user expansion, SoFi’s platform pushed out up to 26% annual revenue growth. Because of double-digit growth across the board for SoFi’s key performance indicators (KPIs), Wall Street analysts feel comfortable forecasting over 200% EPS growth in the next 12 months. Backed by these growth projections, those at Deutsche Bank saw it fit to boost SoFi’s stock valuation to $11 a share. To prove these analysts right, the stock would need to rally by as much as 66.7% from its current price. For these same reasons, the Vanguard Group (SoFi’s largest shareholder) boosted its stake in the stock by 1.7%, bringing its net investment up to $604.6 million today. Why Equity LifeStyle Properties is Outpacing Other REITs in Valuations SoFi Technologies Today SOFI SoFi Technologies $6.43 -0.18 (-2.72%) 52-Week Range $6.20 ▼ $11.70 Price Target $9.32 Add to Watchlist Shares of Equity LifeStyle Properties are now trading at a price-to-book (P/B) ratio of over 8.1x, more than double the average real estate investment trust (REIT) industry average of 2.3x today. There must be a reason why markets are willing to pay a premium to access Equity LifeStyle properties’ book of properties. A good amount of rental income comes from the Floridian market, and here’s why those properties now command a premium value today. Equity LifeStyle Properties MarketRank™ Stock Analysis Overall MarketRank™ 3.40 out of 5 Analyst Rating Hold Upside/Downside 6.8% Upside Short Interest Healthy Dividend Strength Strong Sustainability -2.35 News Sentiment 0.11 Insider Trading N/A Projected Earnings Growth 5.86% See Full Details It will take substantial time for building permits to be converted into sold homes. In the meantime, Florida’s housing shortage will drive would-be homebuyers to rent instead. This wave of rental income is set to hit Equity LifeStyle Properties’ doors. This could be why analysts at Barclays see the stock valued up to $75 a share, daring it to rally by 15.2% from where it trades today. More than that, Wall Street forecasts up to 5.9% EPS growth in the REIT, outpacing inflation and GDP growth to show the superior rental income growth that could come soon. Before you consider CEMEX, 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 CEMEX wasn't on the list. While CEMEX currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
3 Recent Stock Buybacks: Adobe, Marathon, and FedEx Lead the Way 2024-07-01 12:39:00+00:00 - When investors consider the main ways to get their money back from an investment and a reasonable return on that initial investment, the average retail investor thinks of two main approaches. First is the classic ‘buy low and sell high’ approach, which means someone sold stock at a profit and created a taxable event for those capital gains. The second way investors tend to get paid is through dividends, which are taxed once received. Investors should be wary of the inefficiencies of dividend stock investing for reasons that will become clear in just a bit. A third - very well-hidden - way to compound an investment in the stock market is by picking companies that, well, compound their value. Management teams do this by buying back stock, a tax-efficient way to reward patient shareholders. Before investors dig into the nuances of how stock buybacks benefit them, they should keep in mind that it is names like Adobe Inc. NASDAQ: ADBE, Marathon Petroleum Co. NYSE: MPC, and even FedEx Co. NYSE: FDX that have announced increases in their buyback programs, picked up by this scanner. Get Occidental Petroleum alerts: Sign Up Why Stock Buybacks Are the Most Efficient Return Strategy When a company generates free cash flow (operating cash flow minus capital expenditures), it can use this financial metric to do a few things, including paying dividends. However, some companies with negative cash flow still pay dividends, as they take on debt to do this atrocity. Walgreens Boots Alliance Inc. NASDAQ: WBA is one example, offering an over 8% annual dividend financed through debt. This free cash flow is a proxy for income, so the government taxes it first. When investors receive a dividend (funded by free cash flow), they are taxed individually, creating double taxation inefficiency. Since stock buybacks are investments made back into the company, they cannot be taxed (again). Hence, investors can keep a larger share of an ideally growing pie. Here’s why management is buying back stock in these mentioned companies. Management Doubles Down on Adobe Stock's Bright Future Adobe Today ADBE Adobe $560.01 +4.47 (+0.80%) 52-Week Range $433.97 ▼ $638.25 P/E Ratio 50.32 Price Target $607.67 Add to Watchlist Since Adobe’s financials show the company generated roughly $1.6 billion in operating cash flow minus $47 million in capital expenditures, investors can see where buybacks can be funded. In this case, from over $1.5 billion in free cash flow. Recent stock buyback announcements show Adobe’s program at $25 billion, or approximately 10.8% of all outstanding shares today. Buying back that much of the total share float should never be taken lightly, and Wall Street analyst forecasts reflect this. Adobe MarketRank™ Stock Analysis Overall MarketRank™ 4.62 out of 5 Analyst Rating Moderate Buy Upside/Downside 9.0% Upside Short Interest Healthy Dividend Strength N/A Sustainability -0.55 News Sentiment 0.90 Insider Trading Selling Shares Projected Earnings Growth 13.27% See Full Details Earnings per share (EPS) forecasts for Adobe stock stand at 13.3% growth in the next 12 months, which would seem conservative considering the company delivered over 27% growth in the past quarterly earnings results. More than that, price targets show how analysts really feel about the stock. Those at Piper Sandler saw it fit to place a $ 700-a-share valuation on Adobe stock. Considering that these ratings were placed in January 2024, the potential upside of 26% is as valid today as it was back then. The Buffett Effect Fuels Oil Stocks: Marathon Petroleum Joins the Rally Marathon Petroleum Today MPC Marathon Petroleum $174.79 +1.31 (+0.76%) 52-Week Range $112.82 ▼ $221.11 Dividend Yield 1.89% P/E Ratio 8.73 Price Target $192.08 Add to Watchlist After a nine-day buying streak in shares of Occidental Petroleum Co. NYSE: OXY, Warren Buffett let the market know where he stands regarding the energy sector. Marathon Petroleum management is joining this potential move higher in the industry. Announcing a $5 billion buyback program would essentially target as many as 7.8% of the stock's outstanding shares. Marathon Petroleum MarketRank™ Stock Analysis Overall MarketRank™ 3.40 out of 5 Analyst Rating Moderate Buy Upside/Downside 9.5% Upside Short Interest Healthy Dividend Strength Moderate Sustainability -9.13 News Sentiment 1.30 Insider Trading N/A Projected Earnings Growth -12.49% See Full Details Once again, investors can review Wall Street forecasts to verify whether this is the right move today. Analysts could be mistaken in their projections for an EPS decline of 12.5%, considering that those at Goldman Sachs want to see oil at up to $100 a barrel this year alone, boosting Marathon's profits in the process. Wells Fargo analysts want to see Marathon Petroleum as high as $223 a share, daring it to rally by 28.5% from where it trades today. This would give investors another bullish factor to lean on. Short Sellers Retreat: FedEx's $5 Billion Buyback Changes the Game FedEx Today FDX FedEx $298.68 -1.16 (-0.39%) 52-Week Range $224.69 ▼ $302.41 Dividend Yield 1.85% P/E Ratio 17.33 Price Target $314.00 Add to Watchlist Who would’ve thought a company so ‘boring’ as FedEx could cause such a significant sentiment change amongst traders? Over the past month, FedEx stock’s short interest collapsed by over 15%, showing that bearish traders wanted to avoid what could be in store for the company’s future. FedEx MarketRank™ Stock Analysis Overall MarketRank™ 4.48 out of 5 Analyst Rating Moderate Buy Upside/Downside 4.7% Upside Short Interest Healthy Dividend Strength Moderate Sustainability -5.80 News Sentiment 0.68 Insider Trading Selling Shares Projected Earnings Growth 7.79% See Full Details Knowing that potential interest rate cuts set by the Federal Reserve (the Fed) this year could spur business activity in transportation stocks, management saw it fit to place a $5 billion buyback program for the company, looking to take back roughly 7.6% of the total shares. Analysts at Goldman Sachs think the stock is worth more like $333 a share, a price target that stands 11% higher than where the stock trades today. Following this confident move from management, those at Price T Rowe Associates decided to boost their stake in the stock by 8.4% as of May 2024, bringing their net investment up to $306 million today. Before you consider Occidental Petroleum, 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 Occidental Petroleum wasn't on the list. While Occidental Petroleum currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
UK house prices still unaffordable for many people, says Nationwide 2024-07-01 12:16:00+00:00 - House prices in the UK remain unaffordable for many households despite wages rising above inflation for the typical earner, Nationwide has said. Britain’s largest building society said prices had risen slightly in June amid the impact of higher mortgage costs, with a 0.2% month-on-month increase. On an annual basis house price growth accelerated from 1.3% in May to 1.5% in June, leaving prices about 3% below the record high set in summer 2022. The average price of a UK home was £266,064 in June, Nationwide said. House prices in the UK fell last year as households came under pressure from 14 consecutive interest rate rises from the Bank of England, but they remain at historically high levels relative to earnings. Prices returned to growth earlier this year, but activity has been constrained by persistently higher borrowing costs and prices remaining unaffordable for many households. Robert Gardner, the Nationwide chief economist, said mortgage rates were still well above the record lows of 2021 and that rising costs had outstripped the benefit from stronger levels of average pay growth in recent months. “As a result, housing affordability is still stretched. Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay – well above the long run average of 30%,” he said. Separate figures from the Bank of England revealed a slowdown in housing market activity in May as people borrowed £1.2bn of mortgage debt, down from £2.2bn in April. Net mortgage approvals for house purchases also fell slightly from 60,800 in April to 60,000 in May. Official figures show average annual wage growth in the three months to April was 6%, above the rate of inflation, which fell back to the Bank’s target of 2% in May after reaching a peak of 11% in October 2022, the highest level in four decades. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The figures come as Labour and the Conservatives promise to boost housing affordability in their manifestos for Thursday’s general election, including pledges to build millions of new homes and support households with raising deposits and accessing cheaper mortgages. Since 2010, despite a succession of government pledges, the average age of a first-time buyer in the UK has risen, rents have soared, homelessness has more than doubled and housebuilding targets have been missed.
What Will Biden Donors Do Now? 2024-07-01 11:59:28+00:00 - Donors still on edge The shock waves from last week’s presidential debate are still reverberating, as President Biden and his aides sought to allay concerns from despondent Democrats and wealthy donors about his age and fitness for office. Donors are increasingly becoming reconciled to Biden remaining the Democratic nominee even after Biden’s disastrous performance. But some in the party, and in the markets, are increasingly expecting Donald Trump to win in November. Here’s the latest fallout from the debate. Seventy-two percent of registered voters don’t believe Biden has the mental and cognitive health to serve as president, according to a CBS News poll published Sunday, compared with 65 percent in early June. With the odds for a Trump win rising after the debate, Wall Street analysts are recalculating what that could mean for the economy and the markets. Among their forecasts are a slowdown in growth and resurgence in inflation that could muddle the Fed’s interest rate policy, especially if Trump carries out his proposals for mass deportation of undocumented migrants and higher tariffs.
Hurricane Beryl brings 'life-threatening winds and dangerous storm surge' to southeastern Caribbean 2024-07-01 09:54:00+00:00 - Hurricane Beryl entered the southeastern Caribbean on Monday, bringing “life-threatening winds and dangerous storm surge” to the southern Windward Islands, which include Grenada, St. Vincent and the Grenadine Islands and Martinique. The extremely dangerous Category 4 storm made landfall on Grenada's Carriacou Island with 150-mph winds. "Residents in Grenada, the Grenadine Islands, and Carriacou Island should not leave their shelter as winds will rapidly increase within the eyewall of Beryl," the National Hurricane Center warned Monday afternoon. "Remain in place through the passage of these life-threatening conditions and do not venture out in the eye of the storm." The storm could bring up to 10 inches in the Grenadines and as much as 6 inches across Barbados. Hurricane warnings were in effect for Barbados, St. Vincent and the Grenadine Islands, Grenada and Tobago. A hurricane watch was issued in Jamaica. Grenada Prime Minister Dickon Mitchel said there had been reports of "extensive storm surge," damage to buildings and loss of electricity in the country. "And there is the likelihood of even greater damage," Mitchell said, adding that there have been no reports of casualties or injuries. Beryl is the first Category 4 hurricane on record to form in June. The hurricane is also the earliest Category 4 or the Atlantic hurricane season, beating the previous record of Hurricane Dennis which formed July 8, 2005. Videos shared by UNICEF Eastern Caribbean show storm surge on Barbados' south coast and strong winds in Saint Lucia. The U.S. Embassy in Barbados reported power outages and flooding in some areas. Beryl had been gaining strength last week, intensifying from a tropical depression to a Category 3 hurricane in 42 hours. It became a Category 4 hurricane in 48 hours. According to ClimateCentral.org, hurricanes get stronger at a faster rate due to warm waters brought on by climate change. Beryl will continue moving westward, across the southeastern and central Caribbean Sea at least until Wednesday, the agency added. “Potentially catastrophic wind damage is expected where the core of Beryl moves,” it said. Hurricane Beryl approaches the West Indies in the early hours of Monday morning. NOAA Beryl became an “extremely dangerous” Category 4 storm as it approached the Islands early Sunday before leveling off slightly. While the winds had slightly decreased overnight, the center said, "the area of stronger winds has grown, so the hazards of the hurricane are likely to affect a larger area." In Barbados, officials began opening emergency shelters Sunday evening, ordering the closure of all businesses by 7 p.m. Its water authority also urged people to store potable water as water lines would be shut out of precaution. Thousands of people descended upon the Caribbean island to watch the Twenty20 Cricket World Cup final on the weekend. But the worsening weather meant many including the triumphant India team had not been able to leave. “Some of them have never gone through a storm before,” Prime Minister Mia Mottley said, according to the Associated Press. U.S. forecasters added said that while Beryl is expected to turn more westward, "it is too soon to discuss what could happen with Beryl if it makes it into the Gulf of Mexico." The hurricane is likely to be in the Caribbean Sea for the rest of the week before making landfall on the Yucatán Peninsula as a Category 2 storm. It is expected to weaken to a tropical storm as it moves into the southwestern Gulf of Mexico.
Signs of Life Appear in TV Show Purchases 2024-07-01 09:04:37+00:00 - It has been nearly seven months since Hollywood resolved its strikes, but momentum still hasn’t taken hold in the entertainment industry. “Survive till ’25” has become an informal slogan among entertainment workers. But the global market for ordering new TV shows is beginning to show some signs of life, and it has been overwhelmingly driven by two players — Netflix and Amazon. Netflix greenlit more scripted television projects through the first quarter of this year than in any quarter since 2022, according to Ampere Analysis, a research firm. Amazon had its most active quarter since Ampere started tracking market activity five years ago, the firm said. Many of their competitors are still taking a more cautious approach. As a result, Netflix and Amazon collectively accounted for 53 percent of the scripted television series orders among the major studios through the first three months of the year, according to Ampere.