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Arm Holdings and Micron: Top 2 AI Stocks to Buy and Hold 2024-06-25 15:27:00+00:00 - The semiconductor industry is the bedrock of the digital age. Semiconductors have provided the essential building blocks for computers, smartphones, and countless other electronic devices that power our modern world. As technology advances at an unprecedented pace, the demand for increasingly powerful and efficient semiconductors continues to surge. At the front of this technological revolution is artificial intelligence (AI), a transformative tech reshaping industries that is driving an insatiable need for specialized hardware. This combination of factors presents a compelling opportunity for long-term investors seeking to capitalize on the transformative growth of both the semiconductor industry and the AI market. Get ARM alerts: Sign Up Long-Term Investing in Semiconductors While the semiconductor industry is known for its cyclical nature, long-term investors understand that these cycles are temporary deviations from a more significant growth trajectory. By embracing a long-term perspective, investors can look beyond short-term market noise and position themselves to benefit from the industry's sustained expansion. A key to successful long-term investing in semiconductors is identifying companies with robust fundamentals, proven track records, and sustainable competitive advantages. These companies are better equipped to defy market fluctuations and emerge stronger from industry downturns. The semiconductor sector thrives on innovation, consistently pushing the boundaries of what's possible in computing power, efficiency, and miniaturization. This constant drive for technological advancement creates a virtuous growth cycle, with each breakthrough fueling new applications and markets, further propelling demand for cutting-edge semiconductors. With its ability to process vast amounts of data and perform complex tasks, AI represents a paradigm shift in computing, demanding new processing power and memory capacity. This creates an unprecedented opportunity for semiconductor companies at the forefront of developing and manufacturing the specialized chips that power AI applications. Arm Holdings: Architected for the AI Era Arm Holdings NASDAQ: ARM operates with a unique, resilient business model centered on licensing intellectual property rather than manufacturing chips directly. Instead of competing in the volatile production market, Arm licenses its energy-efficient CPU designs to a vast network of partners like Qualcomm NASDAQ: QCOM, Apple NASDAQ: AAPL, and Samsung OTCMKTS: SSNLF. This asset-light approach, generating recurring revenue through royalties on every chip produced using its technology, is reflected in its strong profitability metrics. The company boasts a 9.46% net margin and a 6.56% pretax margin, demonstrating its ability to convert revenue into profits effectively. Arm's dominance in the mobile market, powering an estimated 99% of the world's smartphones, speaks volumes about its technological prowess and market penetration. This success stems from its architecture's inherent focus on energy efficiency and scalability, which are crucial for mobile devices and increasingly important for AI applications. Recognizing the vast potential of AI, Arm has positioned itself strategically, becoming a leading provider of AI-optimized chips. Its Armv9 technology, designed for enhanced performance and efficiency, is gaining rapid adoption in data centers, powering the cloud infrastructure behind AI applications. Further solidifying its position are strategic partnerships with leading cloud providers, including Google NASDAQ: GOOG, Amazon NASDAQ: AMZN, and Microsoft NASDAQ: MSFT. Beyond this, Arm is expanding into the PC market, leveraging its energy efficiency and performance to challenge x86 processors' dominance. This expansion and its firm grip on the mobile market create a compelling growth narrative for long-term investors. Furthermore, the company's financial prudence is evident in its low debt-to-equity ratio of 0.30, indicating a low reliance on debt financing and a stronger ability to weather economic downturns. While Arm Holdings' high valuation might give some investors pause, its robust business model, dominant market share, strategic positioning in the AI ecosystem, and financial health warrant consideration. As AI becomes increasingly ubiquitous, Arm's technology is primed to play a central role, making it a compelling investment for those looking to capitalize on this transformative technology's long-term growth potential. Arm Holdings plc (ARM) Price Chart for Tuesday, June, 25, 2024 Micron Technology: Meeting the Memory Demands of AI Micron Technology NASDAQ: MU is a leading provider of DRAM and NAND flash memory. These products are crucial for every modern electronic device and are at the heart of the data storage revolution. The demand for Micron's high-performance memory products has skyrocketed as AI becomes increasingly sophisticated. With their thirst for vast datasets and rapid processing, AI algorithms rely heavily on high-bandwidth memory modules for efficient training and deployment. Micron Technology Today MU Micron Technology $141.12 +2.11 (+1.52%) 52-Week Range $60.50 ▼ $157.54 Dividend Yield 0.33% Price Target $149.60 Add to Watchlist Recognizing this demand, Micron has strategically focused on developing cutting-edge memory solutions optimized for AI applications. The company's high-bandwidth DRAM and NAND flash memory are finding a ready market in data centers globally, powering the servers behind complex AI workloads. While the memory market is inherently cyclical and prone to oversupply and price fluctuations, Micron's strategic focus on AI-optimized memory puts it in a solid position to navigate these cycles. Further strengthening Micron's near-term prospects are current market dynamics characterized by strong demand and favorable pricing trends fueled by the surge in AI adoption. Micron’s financial performance reflects this positive environment. In its most recent quarter, Micron reversed a year-over-year earnings-per-share (EPS) loss to a gain of $0.71, showcasing a potent turnaround. Notably, revenue surged 58% year-over-year in the same period, primarily driven by the data center market's robust demand. Beyond this sector, Micron sees substantial growth opportunities in AI-enabled PCs and other consumer devices that are increasingly reliant on high-performance memory for AI-powered features. While the inherent cyclical risks of the memory market remain a consideration for long-term investors, Micron's strategic focus on high-growth segments like AI, coupled with its recent financial performance, makes it a compelling investment for those seeking exposure to the memory market's growth potential. Micron Technology, Inc. (MU) Price Chart for Tuesday, June, 25, 2024 Embracing the Long-Term Vision Long-term investing, while offering the potential for substantial returns, is not without risks. Market volatility, economic uncertainty, and unforeseen events can all impact investment performance. Investors in Arm Holdings should be aware of the company's high valuation, which implies significant growth expectations. Any slowdown in the adoption of AI or increased competition could put pressure on Arm's stock price. Micron Technology, operating in the cyclical memory market, faces risks related to potential oversupply and price fluctuations. Economic downturns could also impact demand for memory, potentially impacting Micron's revenue and earnings. Diversification is critical to mitigating these risks. Investors should spread their investments across multiple companies, sectors, and asset classes to reduce the impact of any single investment's performance on their overall portfolio. Thorough research and due diligence are also essential before making any investment decision. Investors should carefully evaluate a company's financials, competitive landscape, and long-term growth prospects. Long-term investing requires patience and willingness to ride out short-term market fluctuations. Investors can benefit from technology's transformative power and the semiconductor industry's enduring growth by focusing on companies with solid fundamentals, a commitment to innovation, and strategic positioning in high-growth markets like AI. Arm Holdings and Micron Technology, with their distinct strengths and strategic advantages, represent compelling opportunities for investors seeking to capitalize on this long-term growth story. Before you consider ARM, 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 ARM wasn't on the list. While ARM currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
US pledges to be a climate finance leader but defends gas expansion 2024-06-25 15:15:00+00:00 - The US will “continue to be a leader” in climate finance, the White House’s top climate official has promised, though without specifying how much it would provide to poor countries. John Podesta, senior adviser to Joe Biden on international climate policy, also defended the large-scale US expansion of gas production, saying the world was fortunate America was strengthening its supply, given the demand for non-Russian sources after the invasion of Ukraine. “The US is in a position to be a leader in the effort [to supply climate finance to the poorer world],” he said in an interview on Monday. “We intend to continue the leadership and be very aggressive in the negotiations during the course of this year.” He pointed to the chasm on the issue between Biden and Donald Trump, his challenger for president this November, who is expected to rein back on US climate commitments if elected. “Obviously, there’s a difference of views reflected in the two principal candidates running for president,” said Podesta, who took over as chief adviser on the climate after John Kerry stepped down earlier this year. “President Biden is committed to not only doing what we need to do to cut our own emissions in half, but also support the world as it’s moving towards a more sustainable pathway.” He would not say whether the US would commit greater sums to climate finance, but said it was on track to meet Biden’s commitment to provide $11bn, a target that campaigners and developing countries have said is woefully inadequate given the size of the US economy and its responsibility for past emissions, but is many times greater than the $1.5bn on offer under Trump in his previous term. Podesta defended the huge US expansion of oil and gas production, which has come in spite of its climate targets, and the recent US decision to slap tariffs on many green goods from China, including electric vehicles. “The US is now the number one producer of oil and gas in the world, the number one exporter of natural gas, and that’s a good thing, because following the illegal invasion of Ukraine, and the need that Europe had to rely on different sources rather than Russia fossils, it was important that the US could step up and supply a good deal of that need,” he said. “But over time, the science is clear, we’ve got to transition away and begin to replace those resources with both zero carbon electricity and renewable resources.” He did not specify a time frame, but said the US was committed to cutting carbon emissions by 50% by 2030 and reaching net zero by 2050. The International Energy Agency (IEA) has previously said there can be no new oil and gas infrastructure if the planet is to avoid exceeding 1.5C (2.7F) of global heating above preindustrial times. The US had the most new oil and gas projects in 2022 and 2023, a recent report found, a surge in production that threatened internationally agreed climate goals. skip past newsletter promotion Sign up to Down to Earth Free weekly newsletter The planet's most important stories. Get all the week's environment news - the good, the bad and the essential 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 Podesta accused China of deliberately overproducing green goods, steel and aluminium, and using coal-fired power to do so, increasing global emissions. He added: “The economic security of the US and [its commitments to cut emissions] rely on the need to have an economy that is not overly dependent on a single source of supply, for critical minerals, for batteries, for other upstream green technologies. We need to diversify that supply. We’re witnessing a renaissance of manufacturing in the US in the green technology space, and will resist unfair trade practices that are going to undermine that investment.” In November, only days after the US presidential election, governments from around the world will meet in Azerbaijan for the Cop29 UN climate summit to come up with a “new collective quantified goal” on climate finance from rich to poor countries, to help them cut greenhouse gas emissions and cope with the impact of extreme weather. There is no consensus on how big that goal should be, though developing countries would like it to reach the trillion mark rather than the $100bn a year that is the current minimum. There is also no agreement on who should provide the cash. Countries classed as developed under the 1992 UN Framework Convention on Climate Change are the only ones obliged to provide finance, but many of those want other big economies and petro states, including China, Saudi Arabia and the United Arab Emirates, to contribute. Podesta made it clear that the US wanted other countries to provide more. “We need a realistic commitment,” he said. “We need other contributors to support the needs of the world, including people with the resources and the obligation as a result of their own emissions to come forward into and try to support the global mobilisation that will come across the board from public resources from domestic resources from the private sector and from philanthropic resources to meet the massive need that is there.”
Best Buy Stock May Be Best Bought Before the Holiday Season 2024-06-25 14:56:00+00:00 - Best Buy Today BBY Best Buy $86.52 -2.81 (-3.15%) 52-Week Range $62.30 ▼ $93.72 Dividend Yield 4.35% P/E Ratio 15.15 Price Target $90.87 Add to Watchlist Consumer electronics retailer Best Buy Inc. NYSE: BBY stock surged to 52-week highs following a robust fiscal Q1 2025 performance. The company offers a vast selection of hardline products, including laptops, desktop computers, appliances, televisions, cameras, mobile phones, video game consoles, music, and movies. It’s one of the few remaining brick-and-mortar showroom electronics chain stores in the nation. However, Best Buy has also grown its online sales and bolstered its technical support and services with its Geek Squad division. Best Buy operates in the consumer discretionary sector and competes with electronics retailers like Amazon.com Inc. NASDAQ: AMZN, Walmart Inc. NYSE: WMT, Target Co. NYSE: TGT, and Conn’s Inc. NASDAQ: CONN. Get Best Buy alerts: Sign Up Best Buy and AI Trends: Indicators of a Potential Recovery Cycle? Consumer spending on big-ticket items has been soft, as evidenced by May month-over-month (M/M) retail sales growth of 0.1%, missing consensus estimates for a rise of 0.3%. Furniture and home furnishing took a 6.8% YoY drop. However, electronics and appliances saw a 1.8% YoY bounce. Best Buy is a pure-play benefactor, evidenced by its recent earnings beat and soaring stock price. This leaves investors to wonder if this could be the start of a recovery cycle in the consumer electronics industry. The artificial intelligence (AI) boom could be a factor driving consumers to upgrade computers and laptops acquired during the pandemic to AI-enabled devices. BBY Stock Triggers a Bull Flag Breakout The daily candlestick chart for BBY demonstrates a bull flag breakout pattern. BBY shares surged for five days in reaction to its fiscal Q1 2025 earnings results peaking at $88.96 on June 5, 2024. This was the flagpole. The flag formed on the parallel pullback comprised of lower highs and lower lows on the following six days. The bull flag triggered the breakout through the descending upper trendline at $88.07 on June 17, 2024, as shares surged to a 52-week high of $93.72 before peaking. The daily relative strength index (RSI) also peaked at the 78-band and fell back under the 70-band. Pullback support levels are at $88.07, $82.91, $77.40, and $74.92. Best Buy Scores a Solid EPS Beat, But Revenues Fall Short in Q1 Best Buy reported fiscal Q1 2025 EPS of $1.20, beating consensus analyst estimates by 12 cents. GAAP diluted EPS rose 2% to $1.13. Non-GAAP operating income rate rose 40 bps to 3.8%. Non-GAAP diluted EPS rose 4% to $1.20. Revenues fell 6.5% YoY to $8.85 billion, which missed $8.96 billion consensus estimates. Enterprise comparable (comp) sales fell 6.1% YoY. International comp sales fell 3.3% YoY. Best Buy bought back $50 million in stock in the quarter and paid out $202 million in dividends. The company authorized a 94-cent quarterly cash dividend payable July 11, 2024, to shareholders of record as of the close of business on June 20, 2024. Best Buy's Weakness in Appliances, Home Theater and Gaming Was Offset By Services and Laptops Domestic sales fell 6.8% YoY to $8.20 billion. The largest drivers of comp sales decline on a weight basis were home theater, appliances, mobile phones, and gaming. These are offset by strength in services like Geek Squad membership offerings and laptops (AI-enabled). International revenues fell 3.3% YoY to $644 million. Best Buy Reaffirms Guidance Best Buy reaffirmed fiscal full-year 2025 EPS guidance of $5.75 to $6.20 versus $6.04 consensus estimates. Enterprise non-GAAP operating income rate is expected to be between 3.9% to 4.1%. Full-year revenues are expected between $41.3 billion and $42.6 billion versus $41.94 billion. Comp sales are expected to drop between 3% and 0%. Capital expenditures (CapEx) are expected to be around $750 million. Best Buy CEO Sees the Glass More than Half Full Best Buy CEO Corie Barry was upbeat during the earnings conference call, underscoring the "better-than-expected Q1 profitability" narrative. A combination of macro factors created a challenging sales environment. The weak sellers were phones, gaming, appliances, and home theater products. Strength can come from sales of services like installation and warranties and laptops. Digital sales comprised 31% of domestic sales, and 60% of its packages were delivered or made available for pickup within a day. In-store pickups are applied to 40% of its digital sales, and over 90% are available within just 30 minutes. CEO Barry continues to see 2024 as a year of increasing industry stabilization. Several indicators showed favorability, including lower unemployment, decreasing inflation, and an encouraging trend in consumer confidence, coupled with the beginning of a recovery in the housing market. Best Buy Sees Growth: AI Features Propel Laptop Sales CEO Barry sees the computing category benefitting from early replacement and upgrade cycles gaining momentum, especially as new products featuring AI capabilities are released. Best Buy's laptop sales turned positive in Q4 and have continued into Q1. Microsoft Co. NASDAQ: MSFT announces Copilot Plus AI for laptops available on June 18, 2024. With faster speed, better battery life, and greater efficiency, AI features like summarization can quickly recap lengthy email threads and pages of documents. Barry added exciting new use cases for AI laptops: “For example, there is a recall function that makes it very easy to find documents based on visual cues or help users easily navigate back to a website to find a specific item they shopped for three weeks ago. They also have a live language translation function that works in real-time on videos without requiring a connection to the Internet. And the co-create capability can take your rough sketches and turn them into works of art.” Best Buy analyst ratings and price targets are at MarketBeat. Before you consider Best Buy, 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 Best Buy wasn't on the list. While Best Buy currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
UK winemaker Chapel Down considers raising cash or sale as trade sparkles 2024-06-25 14:56:00+00:00 - Britain’s biggest wine producer, Chapel Down, is considering raising cash and even putting itself up for sale to fund more vineyards and build a new winery in a booming industry transformed by rising temperatures and tax breaks. Chapel Down in Kent is Britain’s best-known producer, founded in 2002 and is expected to make 3.4m bottles of sparkling and still wines from last year’s harvest. It is looking for more funds for its growth strategy, which includes investing in new vineyards, a new winery to be up and running for the 2026 harvest, and the development of its wine estate at Tenterden. It said: “As part of the review, the board will consider all alternatives, including investment from existing shareholders, investment from new shareholders, a sale of the company, and other relevant transactions.” After posting revenue of £18m last year, the company said it was on track for double-digit sales growth this year. Its shares have risen by 14.5% since their debut on London’s junior Aim market last year, moving from the Aquis Exchange, and fell 1.2% on Tuesday, giving Chapel Down a market value of £111m. Britain’s wine industry is still small and concentrated in southern England, but rising temperatures created better growing conditions for grapes, resulting in a boom in new vineyards. Vines are being planted as far north as Yorkshire and Scotland, and their UK number has almost tripled from two decades ago to 943. However, in traditional wine-growing regions such as Italy, Spain, France and southern California, extreme heat is expected to decimate harvests. British wine is also growing in popularity: almost a third of Britons said they would celebrate a wedding with English fizz in a recent Aldi survey, while 15% would serve up champagne at a divorce celebration. Britain is the fastest-growing wine region in the world, according to the property group Knight Frank. Between 2017 and 2022, England and Wales more than doubled wine production from 5.3m to 12.2m bottles, according to WineGB. It expects wine production to double again to 24.7m bottles by 2032. The UK has also caught the eye of Pommery and Taittinger, two of France’s best-known champagne houses, which both bought land and planted vines in England about a decade ago, while the world’s biggest sparkling wine producer, Germany’s Henkell Freixenet, snapped up the English wine estate Bolney in 2022. Last year was a record harvest and will be remembered as a “near perfect year” for vineyards, WineGB said. There was little spring frost, good flowering weather in June, and after a wet July and August some very warm spells in September and October. 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 Russ Mould, the investment director at the stockbroker AJ Bell, said: “Chapel Down has made a name for itself over the years but the business appears to have a hit the ceiling in terms of scale. To grow even more, it really needs a big slug of cash to invest in the business and that might be better coming from a new, bigger owner, rather than going cap in hand to shareholders on an ad hoc basis. “Plenty of big drinks companies would be in the market for a niche player like Chapel Down as it could add something new for them to get their teeth into, and also as a way of cross-selling products.”
Microsoft faces huge antitrust fine over Teams app 2024-06-25 14:29:00+00:00 - Microsoft faces a hefty antitrust fine after the European Commission on Tuesday accused it of illegally linking its chat and video app Teams with its Office 365 suite of products including Word. The allegations, which the US tech company can challenge, are the most serious it has faced since 2013 when it was hit with an unprecedented €561m (£474m) fine for failing to promote rivals to its Internet Explorer web browser. Use of the Teams video platform rocketed during the pandemic when lockdowns around the world led offices to hold meetings using what were new applications for many customers. According to data platform Statista, the tech company had about 20 million Teams customers in 2019, the before the pandemic began, but by 2023 that had rocketed to 300 million. The commission informed Microsoft of its preliminary antitrust investigation findings on Tuesday. It concluded that Microsoft was “dominant worldwide” in the market for professional “software as a service” (Saas) and said it was concerned that the company had been tying Teams with its core products, disadvantaging those who were selling rival products individually such as messaging platform Slack, whose 2020 complaint triggered the launch of the investigation last July. “Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets. If confirmed, Microsoft’s conduct would be illegal under our competition rules. Microsoft now has the opportunity to reply to our concerns,” said Margrethe Vestager, the executive vice-president in charge of competition policy at the commission. With so many customers already buying the company’s Office 365 suite, the commission said it was concerned that “may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe”. Earlier this year Microsoft tried to avert regulatory action by announcing plans to unbundle Teams from some software packages sold in Europe. However, regulators have called the changes “insufficient”, arguing that additional adjustments are necessary. Microsoft’s vice-chair and president, Brad Smith, said: “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the commission’s remaining concerns.” The commission’s inquiry began last July after it received complaints from the Canadian Slack Technologies, which has since been acquired by Salesforce, and the German video conference software provider Alfaview. The chief executive of Alfaview, Niko Fostiropoulos, welcomed the commission’s preliminary findings, saying it shared the view that the countermeasures taken by Microsoft were “insufficient, as they maintain the bundling in essential parts”. He added that direct talks between Microsoft and alfaview also failed to result in a solution that would address the competition concerns.
Has the Summer Stock Market Rally Peaked? 2024-06-25 14:01:00+00:00 - The stock market has been on a robust and impressive upward trend this year, with gains reaching nearly 15% year-to-date and close to 25% over the previous year. This strong performance in the SPDR S&P 500 ETF NYSE: SPY has been primarily driven by technological advancements, particularly in Artificial Intelligence (AI) and semiconductors. Companies like NVIDIA NASDAQ: NVDA and other "Magnificent 7" members have been at the forefront of this rally. However, the market's overall gains would be much more modest without the technology sector and its titans. Recent market activity raises the question of whether the summer stock market rally has peaked. Get XLU alerts: Sign Up Market Breadth Concerns: NVIDIA's Pullback Signals Trouble One of the reasons for this concern is the significant pullback in NVIDIA, the market's leading stock. NVDA has fallen over 15% from its recent high, entering correction territory. The semiconductor sector, represented by the VanEck Semiconductor ETF NASDAQ: SMH, has also declined by almost 8% from its recent peak. This pullback may signal that speculative interest in the sector is waning as we approach the third quarter. Consequently, the overall market has dropped over 1% from its recent highs, predominantly due to NVDA's decline. NVIDIA Today NVDA NVIDIA $126.09 +7.98 (+6.76%) 52-Week Range $39.23 ▼ $140.76 Dividend Yield 0.03% P/E Ratio 73.74 Price Target $122.13 Add to Watchlist NVIDIA shares have now experienced three consecutive sessions of decline after briefly becoming the world's most valuable company last week. The stock has surged more than 140% this year and briefly surpassed Microsoft NASDAQ: MSFT in market value. The AI and chip giant has been a significant driver of the S&P 500's gains in the year's first half, contributing significantly to its recovery from late April lows. For that reason, several analysts and market participants are now expressing concern about the market's narrow breadth, where only a few heavily weighted stocks are driving overall performance. Analysts at Morgan Stanley noted that market breadth is as narrow as it has been since 1965. This lack of breadth leaves the market vulnerable to corrections, as highlighted by Yardeni Research. They observed that while the S&P 500 has been reaching new highs, the percentage of companies trading above their 200-day moving averages has been falling, which could signal a looming correction. Third Quarter Opportunities: Financials, Utilities, and Industrials Gaining Momentum The "Magnificent 7" tech giants, including NVDA, Meta Platforms NASDAQ: META, Alphabet NASDAQ: GOOGL, and Amazon NASDAQ: AMZN, have all seen impressive gains. Meta has risen over 40%, Alphabet is up over 28%, and Amazon has surged over 22% YTD. However, relying on these few stocks for market gains raises concerns about market vulnerability. Maintaining the current market levels could be challenging if capital continues to flow out of leading tech stocks, such as NVDA. Adding to these concerns, the price of Bitcoin, a highly speculative and volatile asset, has recently taken out near-term support and fallen significantly. Bitcoin has dropped nearly 13% over the past month and was trading near $60,000 at the time of writing. This decline further signals a decrease in speculative appetite, with capital potentially flowing towards more defensive sectors. A potential solution lies in the rotation into other sectors, such as financials, utilities, and industrials, showing signs of significant moves in the third quarter. These more traditional sectors offer promising opportunities for investors looking to diversify. If these lagging sectors attract new inflows, the market might experience a healthy rotation, allowing it to sustain corrections in a few high-flying stocks like those in the semiconductor sector. Q3 Strategy: Balancing Portfolios Amid Tech Sector Pullbacks While the technology and semiconductor sectors have driven the market to impressive heights, recent pullbacks in key stocks like NVDA and a drop in speculative assets like Bitcoin have raised questions about the sustainability of the summer rally. Investors should monitor potential sector rotations and consider diversifying their portfolios to navigate possible market corrections as we move into the third quarter. Before you consider Utilities Select Sector SPDR Fund, 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 Utilities Select Sector SPDR Fund wasn't on the list. While Utilities Select Sector SPDR Fund currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Reddit Stock and the Rubberband Effect: A Case for Lower Prices 2024-06-25 13:45:00+00:00 - Reddit NYSE: RDDT stock can rocket higher, and the rubberband strategy is one way to capture the gains. The rubberband strategy uses moving averages to target deeply oversold stocks that are ready to rebound, and if there are other factors in play, the rebound could be significant. Triple digits or more. However, anyone expecting a rebound in Reddit today may be disappointed in the outlook. While some moving averages support this market, more are against it. As good as rubberbanding strategies are, moving averages are much better suited for trend-following, and Reddit’s shares are far from oversold. Today’s moving average signal isn’t a buy signal but a sell signal that could shave 3.5% to 10% or more off the stock price before the next earnings report. A move below the critical support level, near $53, could lead to a much larger decline if the Q2 release fails to deliver. Get Reddit alerts: Sign Up Rangebound Reddit Has Headwinds and Tailwinds to Drive Volatility The best that can be said about Reddit’s technical outlook is that it is rangebound. The bad news is that it is moving lower within the range and below critical moving averages. Those include the 6- and 30-day EMAs, which are acting as resistance. There is evidence of buying in the candles; there are lower shadows on most, but the market is still above strong support targets, the closest being $54 or 2.5% lower, and risk is tilted to the downside. The latest signal confirms resistance at the pair of EMAs, accompanied by bearish indications in the MACD momentum indicator and the stochastic oscillator that points to lower prices. Why EMAs or exponential moving averages? They add weight to the more recent data and give a clearer view of what the market is doing today. Short interest is an issue. Short-sellers have been in this market since the IPO and capped gains near $68. The latest data had short interest at nearly 20% of the public float, and there is also the float to worry about. Reddit is a low-float company; ample shares are available for the company’s purposes, and numerous large insiders are incentivized to sell when shares move higher, providing significant overhang for the market. In this situation, Reddit is unlikely to move above $68 without a change in the outlook. Analysts are Raising Their Targets for Reddit: Risk Is on the Horizon The analysts are vocal in supporting the business, so the downside could be limited. The 16 tracked by MarketBeat peg the stock at Moderate Buy and have been lifting their price targets over the last two months. The latest updates come from Citigroup and Needham & Company, which see it trading between $70 and $75. Among the drivers for the upgrade is the company’s plans to increase ad content across the platform. As it is, the ads are only shown to a limited audience, so the revenue boost could be significant if and when it materializes. The next visible catalyst is the Q2 earnings report scheduled for early August. The analysts have been cautious with their estimates for revenue and earnings, leaving them unchanged since the quarter began, and expect modest sequential growth and adjusted profits. This sets the company up to outperform the consensus, but the whisper figures are much higher. The chatter on Reddit, home to the infamous r/wallstreetbets sub-Reddit, is that the stock is in an accumulation phase, gearing up for another meme-stock rally the Q2 release will catalyze. The Risk for Reddit Is a High Expectation: Market Is in Wait-and-See Mode A high expectation among retail investors built into Reddit’s upcoming earnings release sets it up to disappoint the market. The recent surge in traffic suggests the business is booming, but the question is monetization. As it is, the best opportunity for improved monetization is with OpenAI and ad sales. The company enhanced its collaboration with OpenAI, allowing ChatGPT to access the API feed and embedding AI features into Reddit. However, the impact on revenue and earnings is questionable and may not be seen in the results until late in the year. Regarding ads, the company is increasing the number of ads and locations displayed, which may hurt as much as it harms. The bottom line is that Reddit’s market is in a wait-and-see posture, tilted to the downside, with a significant catalyst on the horizon. Before you consider Reddit, 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 Reddit wasn't on the list. While Reddit 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 Sell Covered Puts from Income If You’re Bearish 2024-06-25 12:36:00+00:00 - Utilizing stock options can help you hedge against risks, generate additional income, and potentially enhance returns. For example, writing covered calls can generate income on stocks you own long in your portfolio. Strategies and methodologies in the financial markets are linear and can work inversely, and the flip side of writing covered calls on long positions is writing covered puts on short positions. Short Selling Has Unlimited Risk and Isn’t For Everyone Right off the bat, you should be weary and aware of the “unlimited” risk that comes with any strategy that incorporates short selling. While stocks can only go to zero, short selling has unlimited loss potential because stocks have no ceiling when they rise, which means your losses have no ceiling if you're caught short. The only way to mitigate this is to cut your losses before they get too large. Strict discipline is the only way to survive a short squeeze. As they say, it's better to lose a toe than your whole foot or leg. This strategy is only for seasoned traders, not beginners. Get Advanced Micro Devices alerts: Sign Up What is a Covered Put? With a covered call, you would sell/short/write a call option on a stock you are holding a long position in. With a covered put, you would sell/short a put option on a stock you are holding a short position in. It’s a covered position because you already have a position in the underlying stock. To execute a covered put, you would short sell an out-of-the-money (OTM) put on the stock that you have a short position in. For example, if you have a short position at $27 on XYZ and it is trading at $26, then you could sell a put option at $25. This would result in receiving a credit from the short put up front, which can be income or used as a buffer on the short stock position if the stock rises. What are the Advantages of a Covered Put? A covered put allows you to receive a credit upfront on the put, which can add to your total profit or be used as a buffer against losses if the stock price rises against your short stock position. Like a covered call, you can make income from the premium as well as from the stock position. However, the stock profits are capped at the strike price. Ad InvestorPlace Did Jeff Bezos Just Make the AI Apocalypse Worse? For the last 18 months, AI has dominated the news cycle unlike anything we've seen in years... And although many have praised the upside, many tech experts, from Elon Musk to Bill Gates, have warned of the catastrophic consequences AI represents. What 99% of people don't realize is that there's an even bigger threat on the horizon. Go here now for full details Therefore, even if XYZ falls below $25, the max profit is capped at the $25 strike price for $2; even if it falls to $20, the max profit is capped at $2 on the stock since the short put would start to rise in value to offset the gains on the underlying short stock position. A covered put strategy is effective when you’re bearish on a stock. Profits can be made when the stock falls or even moves sideways and closes above the put option strike price and preferably below your short stock entry price into expiration. Example of Covered Put on AMD Stock. Let’s use an example with a computer and technology sector stock Applied Micro Devices Inc. NASDAQ: AMD. AMD failed to break out of a daily bullish ascending triangle pattern. Upon breaking down below the ascending trendline and the RSI falling to the 40-band, let's assume you took a short AMD trade at $155. The next support level is around the $150 area. Executing the Covered Put With the short position in tow at $155, AMD is trading around $154.50. The position is 50 cents in the money. You feel there is more downside to the trade, so you decide to execute a covered put. The AMD $150 put option is expiring in 10 days on June 28, 2024. This trade will provide a $2.12 credit upon execution. The $2.12 can be considered income if AMD stock falls. If AMD stock rises, it provides a loss cushion of $2.12, which means you are protected on the stock short position up to $157.12. The Potential Outcomes Assuming you hold the position into the options expiration on June 28, 2024, in 10 days. Here are the potential outcomes. The breakeven price level would be $157.12 on AMD. A close at $157.12 would result in a $2.12 loss on the short stock position offset by the $2.12 credit received on a short $150 put option since it would expire worthless. The maximum profit occurs at $150 or below on AMD. A close at $150 on AMD would result in a $5 profit on the short stock position (assuming you covered on the close) and the $2.12 credit you received upfront on the put option (which would expire worthless) for a total of $7.12 maximum profit. If AMD falls below $150, then the short stock position profit would increase, but the rise in the value of the short put position would offset that. This negates any extra profits being made on a further drop in the stock price under $150. For example, if AMD closed at $148, your short position would have a $7 profit. However, the option position would have a $2 loss. This would still result in a $5 profit on the short position, along with the $2.12 premium collected on the short option for a maximum profit of $7.12. The maximum loss is unlimited. Yes, unlimited. You would be protected if AMD stock rises to $157.12, but beyond that, your losses continue to mount. While the short 150 put option would expire worthless, enabling you to keep the $2.12 credit, your short stock position would continue to lose money as AMD shares continue to rise. This is where the trouble can begin and continue to get worse. Be Disciplined and Be Proactive with Stop Losses As you can see, there are many benefits to using a covered put strategy, as it can protect your short position by the amount of the premium and enable you to profit from the short stock position. On the other hand, your losses will mount higher if you continue to hold either position if the stock goes into a short squeeze. For this reason alone, it's crucial to make sure you're aware of the resistance levels and be disciplined in executing stop-losses on the trade. It's also prudent to only execute this strategy in very liquid stocks that don't have a high short interest (above 20%) and are not on the hard-to-borrow (HTB) lists, which are prone to short squeezes. Covered puts, like covered calls, are a useful income-generating strategy if you can maintain your discipline and be proactive when it comes to risk management.
Inside Nvidia’s $500 Billion Wipeout 2024-06-25 11:59:36+00:00 - Nvidia’s fall to earth It looks like another volatile day for Nvidia shareholders. And given the company’s enormous influence on the entire S&P 500, they may not be the only investors facing big swings. A head-snapping recap: The chip maker that rode the artificial intelligence boom to become the world’s most valuable public company last week has fallen into correction territory. It closed Monday down roughly 16 percent from its intraday high on Thursday, shedding more than $550 billion in value — roughly the size of Tesla’s market capitalization — offering the markets a tough reminder that the A.I. rally could become harder to sustain. Investors are processing other points of concern. Mary Daly, the president of the San Francisco Fed, warned Monday of a slowdown in the labor market hitting the U.S. economy. “At this point, inflation is not the only risk we face,” she said. Another big piece of data comes out on Tuesday: The Conference Board is set to release its monthly consumer confidence index. Markets will closely scrutinize that for households’ take on the economy.
Tesla Stock: The Pay Package Battle and Its Impact on Investors 2024-06-25 11:30:00+00:00 - Tesla NASDAQ: TSLA stock has been on a roller coaster ride recently, experiencing a notable decline of nearly 30% in one-year performance. While various factors contribute to this volatility, one key element driving uncertainty is the ongoing legal battle surrounding CEO Elon Musk's $56 billion pay package. Understanding this complex situation is crucial for investors seeking to capitalize on the complexities of Tesla's current trajectory. Get Tesla alerts: Sign Up Tesla's Stock Metrics Tesla Today TSLA Tesla $187.35 +4.77 (+2.61%) 52-Week Range $138.80 ▼ $299.29 P/E Ratio 47.79 Price Target $184.62 Add to Watchlist Tesla's current price-to-earnings (P/E) ratio is approximately 47.21, indicating that the stock trades at 47 times its current earnings. Tesla's P/E ratio is approximately three to four times higher than that of its automotive sector peers. This premium reflects investors' optimism in Tesla's potential for growth and technological advancements in the electric vehicle (EV) market. However, it is essential to note that this high valuation also signifies a higher risk for investors, as it reflects a significant degree of faith in Tesla's future performance. If the company fails to meet these high expectations, Tesla’s stock price could experience a considerable decline. Tesla MarketRank™ Stock Analysis Overall MarketRank™ 4.21 out of 5 Analyst Rating Hold Upside/Downside 1.6% Downside Short Interest Healthy Dividend Strength N/A Sustainability -0.51 News Sentiment 0.35 Insider Trading Selling Shares Projected Earnings Growth 31.55% See Full Details Additionally, Tesla's price-to-sales (P/S) ratio stands at 6.07, meaning its market cap is six times its annual revenue. This high P/S ratio further suggests that Tesla's market valuation is elevated compared to its current revenue generation. However, it's crucial to consider that Tesla is still a relatively young company, and its sales growth potential is significant. Tesla's debt-to-equity ratio is 0.04, indicating a relatively low level of debt compared to equity. This suggests that Tesla is financially healthy and has a lower risk of financial distress, which could support its growth initiatives. Nevertheless, investors should remain vigilant about Tesla's financial performance and ability to manage its debt levels while navigating the competitive EV landscape. Tesla Shareholders Reaffirm Support for Musk's Pay Package In 2018, Tesla shareholders approved a performance-based compensation package for Elon Musk that could reach $56 billion. However, the path to this massive payout faced a significant obstacle in January 2024 when a Delaware judge overturned the initial agreement. This decision stemmed from concerns about the Tesla board's independence and the lack of transparent disclosure of potential conflicts of interest related to Musk's influence. The judge argued that the board's close ties to Musk might have clouded their judgment when approving the compensation package. Despite the legal setback, Tesla shareholders recently reaffirmed their support for the pay package in a June 2024 vote. Over 70% of shareholders, excluding Musk and his brother Kimbal, voted in favor of the package, suggesting confidence in Musk's leadership and Tesla's prospects. However, this shareholder vote does not automatically resolve the legal challenge. Possible Scenarios in the Legal Battle Over Musk's Pay Package The legal battle surrounding Musk's pay package remains ongoing, creating uncertainty for investors. Tesla argues that the recent shareholder vote validates the compensation agreement and seeks the judge to overturn the previous ruling. Opponents of the pay package contend that it is excessive and detrimental to shareholder interests, asserting that the board's decision was not truly independent. Several scenarios could unfold in this legal battle. One possibility is that the court could order a third shareholder vote, allowing further scrutiny of the pay package and its potential implications. Alternatively, the judge could decide to reinstate the original 2018 agreement, potentially leading to Musk receiving his $56 billion payout. However, the judge could also uphold the previous ruling, effectively blocking Musk from receiving this significant compensation. Ultimately, the outcome of the legal battle will depend on the court's interpretation of shareholder voting rights, its assessment of board independence, and its evaluation of the potential consequences of the pay package for Tesla and its shareholders. Impact on Tesla Stock and the Company's Future The pay package battle has undoubtedly contributed to Tesla's recent stock decline, creating uncertainty and volatility for investors. However, other factors also play a role in Tesla's stock performance. Tesla's recent financial performance has been impacted by a slowdown in sales, particularly in the highly competitive Chinese market, raising concerns about the company's growth trajectory. Additionally, Musk's involvement in X / Twitter, SpaceX, StarLink, and other ventures outside of Tesla has distracted investors, raising questions about his commitment to Tesla's long-term strategy. This has led some investors to doubt Tesla's ability to maintain its rapid growth and navigate the competitive EV landscape. The legal battle surrounding the pay package could further influence Musk's dedication to Tesla's future. If the legal challenge prevents Musk from receiving compensation, it could impact his commitment to the company. However, the possibility of a large payout might also incentivize Musk to focus on Tesla's growth and success. Ultimately, the outcome of the pay package battle could significantly impact Tesla's business strategy and growth prospects. If the court rules against Musk and blocks the compensation package, it could lead to a shift in Tesla's management or a change in the company's direction. However, a positive resolution could provide Musk with financial security to focus on Tesla's long-term goals and position in the EV market. Staying Informed: Essential Considerations for Tesla Investors The Tesla stock situation presents significant challenges for investors seeking to navigate its complexities. Understanding the legal battle surrounding Musk's pay package and its potential impact on Tesla's financial performance, growth prospects, and future direction is crucial for informed decision-making. Investors should carefully evaluate Tesla's stock metrics, recent performance, and ongoing legal developments before making investment decisions. Staying informed about these critical elements by monitoring Tesla’s headlines will empower investors to make informed decisions about their investment strategy and position in Tesla. Tesla, Inc. (TSLA) Price Chart for Tuesday, June, 25, 2024 Before you consider Tesla, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tesla wasn't on the list. While Tesla currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
E.U. Charges Microsoft With Antitrust Violations Over Teams Bundling 2024-06-25 10:40:43.778000+00:00 - European Union regulators on Tuesday charged Microsoft with breaking antitrust rules by bundling its Teams video conferencing and collaboration software with a suite of other productivity tools, giving it an unfair advantage over rivals. Regulators said Microsoft’s packaging of Teams with other well-established software tools in Office 365 and Microsoft 365, which includes programs like Word, Excel, PowerPoint and Outlook, amounted to an illegal abuse of market dominance that rival companies like Zoom and Slack could not match. Regulators said businesses essentially had little choice but to take Teams if they wanted other software made by Microsoft. The charges are just the latest in a barrage of announcements by the European Union in recent months in its effort to crack down on the world’s largest tech platforms. On Monday, regulators accused Apple of violating competition rules because of its App Store policies. Amazon, Google, Meta, TikTok and X are also facing investigations related to their business practices and services. The Microsoft case has its roots in the Covid-19 pandemic, when videoconferencing and collaboration tools like Zoom, Slack and Teams became essential for remote workforces. In 2020, Slack, now owned by Salesforce, complained to regulators that Microsoft’s bundling of Teams with other productivity software was anticompetitive, setting off the initial E.U. investigation.
I Want to Retire at 60. Will $300,000 in Savings Be Enough? 2024-06-25 05:00:00+00:00 - Can I Retire at 60 With $300,000 The short answer to this question is, “Yes, provided you are prepared to accept a modest standard of living.” To get an an idea of what a 60-year-old individual with a $300,000 nest egg faces, our list of factors to check includes estimates of their income, before and after starting to receive Social Security, as well as expenses after retirement. Your own prospects in this kind of situation will vary, but by doing the sorts of calculations and estimates below, you’ll have a reasonable idea of what it will take for you to retire at 60 with $300,000. Consider working with a financial advisor as you explore your prospects for retiring early. Income After Retirement: Social Security A good place to start your assessment of whether you can retire at 60 with $300,000 is by looking at sources of income, including Social Security. The program is reverse-means tested, meaning that the less money you made during your working years the less generous your benefits in retirement. Earnings scale up to the maximum Social Security income, after which additional earnings no longer add to your lifetime benefits. The maximum taxable income changes each year based on inflation. In 2022, it is set at $147,000, meaning that during 2022 you accrue the most Social Security credits if you earn up to that amount. If you earn less, you will collect fewer benefits when you retire. If you earn more, it will not add to your benefits. Your benefits also change based on when you decide to retire. You receive the smallest amount of money if you file at age 62, scaling up each month that you wait until a maximum benefit payment at age 70. The standard set of benefits are paid at full retirement age, which is set at 66 years and four months for everyone under the age of 65 at time of writing. Finally, Social Security benefits change each year as the Social Security Administration and Congress adjust this payment for inflation. For 2022, the average retiree Social Security is $1,657 per month. For the purposes of this article we will assume a retiree who begins collecting benefits at full retirement age receives the average payment. You can calculate your own estimated benefits at the Social Security Administration’s website. Income After Retirement: Investments and Savings The average retirement account generates an average return of about 5% annually. Some estimates place this number higher, but we’ll use conservative math. With a retirement account of $300,000, this means an average return of about $15,000 per year. If you withdraw only those returns, you can generate income from your retirement portfolio without drawing down on the principal. Story continues Let’s assume there are no income sources besides this $300,000 retirement account and average Social Security benefits. In this situation, an annual 2022 income would be: $15,000 from retirement savings $19,884 from Social Security payments ($1,657 per month) Total: $34,884 ($2,907 per month) Income Before Social Security The first two, six or eight years, depending on when you decide to start taking Social Security, will be the most financially challenging. For example, if you begin collecting benefits at age 62 (the earliest you can do so), you cut your lifetime benefits to 70% of full value. In the case of an average Social Security benefit, this means that you reduce your Social Security benefits to $1,160 monthly or $13,919 annually and cut your total annual income (Social Security plus investment income) down to $28,918, or $2,410 per month. In most cases, you will have to wait until age 66 and four months to collect enough Social Security for a stable retirement. If you want to retire early, you will have to find a way to replace your income during that six-year period. In most cases $300,000 is simply not enough money on which to retire early. If you retire at age 60, you will have to live on your $15,000 drawdown and nothing more. This is close to the $12,760 poverty line for an individual and translates into a monthly income of about $1,250 per month. Potential Pitfalls Can I Retire at 60 With $300,000 As tempting as it would be to draw down the principal of your retirement account, resist the urge. Consider the consequences of not resisting. To match the estimated $34,884 per year budget, you would need to withdraw $19,884 per year from the principal of your retirement account in addition to withdrawing all of its average returns, so nothing will replace those withdrawals. Over a six-year period this would chop your retirement account to $119,304 from $300,000. And as your withdrawals shrink your nest egg’s balance, that balance would produce less and less income. By the time you begin collecting Social Security, relatively little would be left of your original $300,000. Therefore, with a $300,000 retirement account, the odds are you will need to wait until full retirement age before collecting Social Security benefits. Collecting Social Security early reduces your benefits for each month you start before full retirement age. If you begin collecting benefits at age 62 (the earliest you can do so), you cut your lifetime benefits to 70% of full value. In the case of an average Social Security benefit, this means that you reduce your Social Security benefits to $1,160 monthly or $13,919 annually, and your total income (Social Security plus investment income) down to $28,918 or $2,410 per month. For most people this is not a practical budget. It is just a little over 200% of the national poverty line for an individual ($12,760 per year in 2022) and well below the median income. Even if practical for a short period of time, this budget leaves no room for unexpected or growing expenses. These could include higher medical bills as you age or inflation. It also removes any flexibility to adjust for market downturns in your retirement. For most retirees, if possible, you should wait until full retirement age. You may want to discuss your retirement concerns with a financial advisor who can offer professional advice. Get matched with a financial advisor today. Retirement Expenses: Taxes With a good sense of your annual income based on a $300,000 retirement, the next question is simple: Will that be enough? With $34,884 in annual income and a planned retirement age of 60, we need to anticipate three main issues: Taxes, expenses and pre-Social Security expenses. You may have to plan on paying income taxes in retirement. This depends on a number of factors, most critically whether you primarily used a 401(k) or IRA (which taxes your withdrawals) or a Roth IRA (which does not tax withdrawals). Social Security benefits may also be taxed, depending on how much you earn. While not fully accurate, the best way to estimate if you will owe taxes on Social Security is to take half of your benefits and add them to the rest of your income. For an individual, if this comes to more than $25,000 per year from all sources, you will likely owe taxes. In our case we would calculate taxes as follows: Social Security benefits = $19,884 $19,884 ÷ 2 = $9,942 All other income = $15,000 $15,000 + $9,942 = $24,942 When it comes to taxes, a miss is as good as a mile. We are below the $25,000 cutoff for individuals, and so our Social Security benefits won’t see taxes. This leaves us with only $15,000 of potentially taxable income. But individuals avoid taxes on capital gains below $40,400, so there are also no taxes on this money. Now, it’s important to understand that we did not include potential state taxes in this analysis. And individual circumstances will vary. However, in this case, with $300,000 in retirement savings, average Social Security benefits and an individual filer, we can expect to pay no federal taxes in 2022. Retirement Expenses: Annual Cost of Living With $300,000 and Social Security, you can expect to collect just under $35,000 per year. On a monthly basis, that works out to about $2,900 per month. Is that enough to live on? It depends on numerous variables: Do you pay a mortgage or rent? Groceries Utilities What are your taxes (property, state and federal)? What are your insurance (auto, life, medical, long-term care) expenses? The above lists ignores entirely discretionary and luxury expenditures like travel and vacations. Even more critically, the above-listed expenses will rise yearly due to inflation. In general, a retirement income of $35,000 is not unrealistic. At time of writing the median individual income in America, according to the St. Louis Fed, is $35,805. An income of approximately $35,000 is livable in the U.S. However, much of that depends on where you choose to live. Taking a retirement account like this to Kalamazoo, Michigan will be far more practical than trying to live in Chicago. Reasons for Optimism Can I Retire at 60 With $300,000 When trying to estimate your own lifestyle needs, most experts recommend estimating between two-thirds and three-quarters of your pre-retirement income. While working, you’ll have expenses that you won’t carry into retirement. In turn, you’ll also have more flexibility to move somewhere less expensive. That means that you’ll need less money than during your working life, though lifestyle bills can still add up. In the case of a $34,884 retirement income, this estimate puts us around a pre-retirement income of $50,000 per year. If you earned around $50,000 per year before retirement, the odds are good that a $300,000 retirement account and Social Security benefits will allow you to continue enjoying your same lifestyle. You can get matched with a financial advisor if you have questions about financing your retirement. Bottom Line By age 55 the median American household has about $120,000 saved for retirement, and about $212,500 in net worth. So getting to $300,000 by 60 means you’ll have to be a better saver or investor than the average American. That’s because for the majority of people, early retirement is probably off the table. But if you’re willing to budget and keep an eye – a very close eye – on your expenses, it is possible. Just remember that the years between age 60 and whenever you begin getting Social Security will be the most challenging. Tips on Retirement You can do some learning about retiring on $300,000, but a financial advisor may have more insight into planning for this than you do. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. It pays to get a good estimate of whether you’re financially ready for retirement. Use SmartAsset’s free retirement calculator to begin. Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid -- in an account that isn't at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks. Photo credit: ©iStock.com/Fly View Productions, ©iStock.com/AsiaVision, ©iStock.com/sanfel The post Can I Retire at 60 With $300,000? appeared first on SmartAsset Blog.
Trump Media rebounds after Trump hush money verdict spooked DJT shares 2024-06-25 04:27:00+00:00 - Donald Trump’s namesake social media company is bouncing back after a weekslong decline that cut the stock price in half and knocked shareholders for a loop. Trump Media & Technology Group shares sank last week on news that early investors could potentially sell tens of millions of shares – a development Trump Media previously warned could result “in a significant decline in the public trading price of our common stock.” The development only added to the uncertainty that has surrounded the Trump Media stock since it began trading in March after the merger with shell company Digital World Acquisition Corp. Trump Media put a positive spin on the news, saying it could rake in an additional $247 million in cash if early investors converted all their warrants into shares. Friday it said it expected to receive nearly $70 million from the recent cash exercise of warrants. Trump Media & Technology Group stock price rallies Shares of Trump Media, which trade under the vanity ticker DJT on the Nasdaq, jumped 21% to close at $33.52 Monday, lifting the company’s market cap to nearly $6 billion. Republican presidential candidate, former President Donald Trump walks offstage after speaking at a campaign rally at the Liacouras Center on June 22, 2024 in Philadelphia, Pennsylvania. Wild swings like these are nothing new for Trump Media shareholders who have been taken for a turbulent ride. Since going public earlier this year, the stock has soared as high as $79.38 and dropped as low as $22.55. Trump Media stock tracks Donald Trump's fortunes The stock’s fortunes track Trump’s. The long slide began following the former president’s guilty verdict on all 34 felony counts in his criminal hush money trial. Trump Media, which trades under the vanity ticker “DJT” on the Nasdaq composite, has tanked 48% since May 30 when a New York jury found Trump guilty of falsifying business records. The former president and Republican nominee is a majority stakeholder in Trump Media, the company behind Trump’s go-to social media platform Truth Social. He has lost billions in paper wealth since the beginning of June. Trump and other insiders are restricted from selling stock until September unless the board waives that restriction or moves up the lock-up period. What's behind DJT stock volatility? DJT stock dive: What's behind Trump Media's plummeting price? That volatility stems, in part, from Trump Media’s financial performance. In competing for ad dollars and eyeballs with big-name social media companies like Facebook, TikTok and YouTube, Trump Media is a distant laggard. It reported a first-quarter net loss of $327.6 million on less than $1 million in revenue. Trump Media officials have blamed the stock’s volatility on “naked” short selling, an illegal form of short selling. Story continues Trump Media Chief Executive Officer Devin Nunes wrote letters to Congress and other regulators asking for an investigation into the short selling allegation. Short sellers don't actually own the shares, but borrow them and then sell them, betting the stock will fall so they can buy back the shares at a lower price and keep the difference. “Naked” short selling involves betting a stock will fall without borrowing or owning the shares. This article originally appeared on USA TODAY: DJT stock surges as Trump Media rebounds from verdict decline
Leveraged Wrong-Way Nvidia Bet Drew $740 Million Before Rout 2024-06-25 04:21:00+00:00 - (Bloomberg) -- For day traders riding the AI-fueled stock mania, it’s been a money-minting bet like no other — offering double-digit returns week in and week out. Most Read from Bloomberg Now though — after pouring a record amount of cash into a leveraged-up ETF — a cohort of retail investors faces big losses following the roughly $400 billion wipeout in Nvidia Corp. The GraniteShares 2x Long NVDA Daily ETF (ticker NVDL), which delivers double the daily return of the Jensen Huang-run company, saw a record $743 million inflow last week as investors sought to amplify gains in what has been dubbed the world’s “most important stock.” The timing has proven inopportune, as the fund has tumbled around 25% since Tuesday’s close. It’s still up about 329% in 2024. “It is a very high-risk, high-return move piling into leveraged NVDA positions - given the stock has been driven by momentum and sentiment, so it’s hard to tell when the stock would finally retrace,” said Dave Lutz, head of ETFs at JonesTrading. “Retail traders need to really understand the structure of these products to fully understand the risk they entail.” The ill-timed rush in last week underscores the feast-or-famine performance risk when it comes to investing in this high-octane breed of ETF, which uses derivatives to boost returns or reverse performance. Inverse and leveraged ETFs are popular among day traders as they’re designed to be held for short periods. But their structure means they can deliver swift losses as well as big gains. Launched in December 2022, the $3.7 billion ETF has lured about $1.8 billion in 2024, after attracting $189 million last year. Nvidia, the posterchild of the AI craze, is up some 140% this year. The chipmaker has ascended to become the second-largest weighting in the $70 billion Technology Select Sector SPDR Fund (XLK), comprising over 20% of the tech ETF. Meanwhile, Nvidia bears have gotten crushed this year by the $93 million GraniteShares 2x Short NVDA Daily ETF (NVD), which tracks the daily inverse return of the underlying stock, and is down nearly 90% this year. For now, Nvidia’s spectacular surge is taking a breather. The stock on Monday entered correction territory as it extended a sharp selloff. After briefly claiming the title of the world’s largest stock last week, it has tumbled 13% across three sessions, past the 10% threshold that represents a correction. Story continues “NVDA and its AI peers were ripe for a correction after their huge run-up,” said Jane Edmondson, head of thematic strategy at TMX VettaFi. “Investors are likely taking some profits at quarter end and realigning their portfolio allocations. But the underlying fundamentals are still in place.” --With assistance from Lu Wang. (Updates shares.) Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Where Have All the Chinese I.P.O.s Gone? 2024-06-25 04:00:10+00:00 - There was a time when a Chinese internet company’s initial public offering was the hottest thing on Wall Street. As the e-commerce giant Alibaba prepared to go public on the New York Stock Exchange a decade ago, the world’s biggest banks competed fiercely to underwrite the offering. When the opening bell rang on Sept. 19, 2014, stock traders cheered, wearing hoodies in Alibaba’s signature orange over their suits. The I.P.O. raised $25 billion, the biggest listing ever at the time. Scores of other Chinese companies raised billions in the United States over the next few years. Those days are firmly in the past. Wall Street has not seen anything close to a blockbuster Chinese I.P.O. in three years. In fact, the drought is getting worse. So far this year, Chinese companies have raised about $580 million in U.S. listings, almost all of it last month from one I.P.O. by the electric vehicle maker Zeekr. As the geopolitical relationship between China and the United States has deteriorated, it has become increasingly difficult for Chinese companies to find a foreign market where a listing might not be jeopardized by political scrutiny.
What You Need To Know Ahead of Chipotle's 50-for-1 Stock Split Tuesday 2024-06-25 03:06:00+00:00 - Bloomberg / Contributor / Getty Images Key Takeaways Chipotle stock is set to undergo a 50-for-1 split after markets close Tuesday, with shareholders receiving 49 additional shares for each share they owned previously. The first day of Chipotle's split-adjusted trading will be on Wednesday. The split will lower the cost of each individual share and could make the stock more accessible to Chipotle's employees and a wider range of investors. Chipotle Mexican Grill (CMG) investors will soon see a much larger number of shares in their portfolios after Chipotle stock undergoes a 50-for-1 split after markets close Tuesday, with investors gaining 49 new shares for each one they owned before the split. The fast-casual chain announced plans for a 50-for-1 stock split in March, and the move was approved by shareholders at its annual meeting earlier this month. Shares rose after the initial announcement and have largely gained since, though they declined late last week and through Monday morning. Why Chipotle Is Splitting Its Stock Chipotle shares have climbed steadily since the company's public debut in 2006, with an initial public offering (IPO) price of $22 per share. Shares are up more than 57% over the last year after first closing above the $2,000 mark in April 2023. Recently, the company has managed to continue reporting strong earnings despite a broader pullback on discretionary spending that has been felt by other fast food giants like McDonald's (MCD). However, fast casual chains like Chipotle and Sweetgreen (SG) have been able to resist the trend of lowering prices. When the split was announced in March, Chipotle CFO Jack Hartung said the company wanted to make its stock more accessible to a wider range of investors, especially Chipotle employees, by trading at a lower price. The chain also said it planned to offer a special one-time equity grant, a type of stock compensation, to general managers and employees with more than 20 years at Chipotle to promote employee ownership of the stock. How the Split Will Work The new shares will be distributed after markets close Tuesday, resulting in 50 times as many shares at a lower price per share, without changing the total value of investors' Chipotle holdings or the company's market capitalization. For example, if Chipotle shares were trading at $3,194.50 before the split, an investor holding one share before the split would hold 50 shares priced at $63.89 each after the split. The first day of Chipotle's split-adjusted trading will be on Wednesday. Chipotle's stock split also comes just weeks after tech giant and artificial intelligence (AI) darling Nvidia (NVDA) performed its own stock split at a 10:1 ratio earlier this month. Nvidia shares rose following the split, briefly making Nvidia the world's most valuable company by market cap, but they declined late last week and into Monday. Story continues Chipotle shares were 0.7% lower at $3,194.50 as of 2:30 p.m. ET Monday, though they've gained nearly 40% since the start of the year, and closed at a record high of $3,427.61 last Tuesday, before slipping later in the week. Read the original article on Investopedia.
Oracle Warns That a TikTok Ban Would Dent Revenue and Profit 2024-06-25 02:49:00+00:00 - (Bloomberg) -- Oracle Corp. warned investors that a new law potentially banning TikTok in the US threatens to hurt its financial results. Most Read from Bloomberg The law signed by President Joe Biden in April “will make it unlawful to provide internet hosting services to TikTok” unless certain steps are taken by its China-based owners, Oracle wrote Thursday in a regulatory filing. “If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted.” Compliance with the new law may also increase expenses, the company added. TikTok uses Oracle’s cloud infrastructure to store and process US user data, and is considered by many Wall Street analysts to be one of the Austin-based company’s largest customers for that closely watched business. “Oracle could lose a sizable portion of revenue associated with hosting the bulk of TikTok’s US business,” Derrick Wood, an analyst at TD Cowen, wrote in April. Oracle’s annual revenue from the popular video app may be in the range of $480 million to $800 million, estimated Kirk Materne, an analyst at Evercore ISI. The company’s unit that rents computing power and storage generated about $6.9 billion in sales in the year ended May 31. The growing cloud infrastructure business, fueled by demand for artificial intelligence work, has helped propel Oracle’s shares to a 34% gain this year through Friday’s close. Oracle didn’t respond to a request for comment. US lawmakers have long been concerned that TikTok poses a security threat to US users because China requires its companies, upon request, to share any national security-related data with the government. The law signed in April gives TikTok 270 days to find a buyer or be banned in the US, with some possibility of an extension. TikTok has pushed back on these concerns, suing to overturn the law. As part of its defense in recent years, TikTok has invoked its work with Oracle to cordon off US data from its Chinese parent, ByteDance Ltd. The initiative, dubbed “Project Texas,” was named after the state of Oracle’s headquarters. Still, Oracle has traditionally been mute on its relationship with TikTok — it doesn’t list the company among its flagship cloud customer successes. In 2020, when the US first pressed ByteDance to sell the app to a US buyer, Oracle was among those considering a deal. The company at that time declined to answer any questions about its relationship with TikTok. Story continues If TikTok is sold, replacing Oracle as a cloud vendor would likely be a very low priority, Materne wrote. Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Bitcoin drops below US$60,000 as Mt. Gox repayment looms 2024-06-25 02:37:00+00:00 - Bitcoin fell below the US$60,000 mark for the first time since early May, according to CoinGecko data, as Mt. Gox prepares to disburse funds from creditors. On Monday, the Mt. Gox trustee announced that it will start repaying creditors next week, a move that could introduce more selling pressure and destabilize the market further. The unfolding of the Mt. Gox saga, a decade-long overhang on the cryptocurrency market, is a critical development as the exchange begins repaying its creditors with over US$9.4 billion in Bitcoin owed to around 127,000 creditors. The distribution of such a substantial amount could lead to increased market volatility. Additionally, the recent sale of US$325 million worth of Bitcoin by German authorities, part of nearly US$3 billion in their possession, adds to the current selling pressure. Data from CoinGlass shows that over US$335 million were liquidated in the 24 hours leading up to 1:30 p.m. ET. Of that total, almost US$300 million came from long positions.
Nvidia stock falls more than 6% as investors rotate out of chip heavyweight 2024-06-25 01:37:00+00:00 - Nvidia (NVDA) stock fell more than 6% to close at $118.11 per share on Monday as investors rotated out of the hottest AI play of the year. The session marked the third consecutive day of losses for shares of the chip heavyweight. The stock has declined more than 12% from its all-time closing high of $135.58 last Tuesday when Nvidia's market cap temporarily dethroned Microsoft (MSFT) as the most valuable company. The chipmaker has since given back the crown with its market capitalization at around $2.9 trillion, below Microsoft's and Apple's (AAPL) valuations of more than $3 trillion each. Up until Thursday of last week, Nvidia played a pivotal role in buoying the S&P 500 (^GSPC) and the Nasdaq (^IXIC) to repeated record highs in 2024. The Santa Clara, Calif.-based company completed a 10-for-1 stock split on June 10. As Yahoo Finance's Allie Canal recently reported, Wall Street is mixed on whether the recent sell-off signals long-term concerns with the stock. "The stock's steep climb makes it vulnerable to profit taking, but we argue any volatility [is] likely to be short-lived," Bank of America analysts stated in a note last week, reiterating a Buy rating and $150 price target while calling Nvidia a "top pick." Over the weekend Jefferies analysts maintained a Buy rating on the stock and raised their price target to $150 from $135, calling Nvidia the "king and kingmaker." Meanwhile Patrick Moorhead, Moor Insights & Strategy founder and CEO, told Yahoo Finance on Friday that investors should be watchful for signs a pullback is here to stay. While he doesn't see the status quo of Nvidia's dominance changing over the next six to nine months, investors should focus on "the downstream profitability that people in the ecosystem are making or not making." "These are the software companies like Adobe, Salesforce, SAP, and ServiceNow. Because if those enterprises and those consumers aren't paying more for these new AI features, then this whole gravy train comes to a screeching halt, like we saw in the internet bust," he explained. Nvidia CEO Jensen Huang speaks at the Computex 2024 exhibition in Taipei, Taiwan in June. (AP Photo/Chiang Ying-ying, File) (ASSOCIATED PRESS) Correction: A previous version of this article misstated Microsoft's and Apple's valuations as being in the billions. Both companies have market capitalizations above $3 trillion. We regret the error. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for the latest stock market news and in-depth analysis, including events that move stocks Read the latest financial and business news from Yahoo Finance
CDK Global calls cyberattack that crippled its software platform a "ransom event" 2024-06-24 22:36:00+00:00 - How CDK cyberattack is impacting Michigan car dealerships How CDK cyberattack is impacting Michigan car dealerships 02:03 CDK Global is now calling the cyberattack that took down its software platform for its auto dealership clients "a ransom event." In a note to clients Saturday, CDK for the first time acknowledged that the hackers that made its dealer management system, or DMS, unavailable to clients for days, are demanding a ransom to restore its systems. "Thank you for your patience as we recover from the cyber ransom event that occurred on June 19th," CDK said in a memo to clients on Saturday, according to a copy of the email obtained by CBS MoneyWatch. CDK added in the note that it has started restoring its systems and expects the process of bringing major applications back online "to take several days and not weeks." Beware of phishing In its memo, the company also warned car dealerships to be alert to phishing scams, or entities posing as CDK but who are in fact bad actors trying to obtain proprietary information like customers' passwords. A CDK spokesperson told CBS MoneyWatch that it is providing customers "with alternate ways to conduct business" while its systems remain inoperative. The cybercriminals behind the CDK attack are linked to a group called BlackSuit, Bloomberg reported on Monday, citing Allan Liska of computer security firm Recorded Future. In a June 21 story, the media outlet also said the hackers were demanding tens of millions of dollars and that CDK planned to pay the ransom. Liska didn't immediately respond to a request for comment. CDK itself hasn't pointed to any group behind the attack on its system that has disrupted car dealerships across the U.S. since last week. Companies targeted in ransomware schemes are often reluctant to disclose information in the midst of negotiations with hackers on a payment. "Doing everything manually" The hack has left some car dealers unable to do business altogether, while others report using pen and paper, and even "sticky notes" to record transactions. Tom Maoli, owner of Celebrity Motor Car Company, which operates five luxury car dealerships across New York and New Jersey, on Monday told CBS MoneyWatch his employees "are doing everything manually." "We are trying to keep our customers happy and the biggest issue is the banking side of things, which is completely backed up. We can't fund deals," he said. Asbury Automotive Group, a Fortune 500 company operating more than 150 new car dealerships across the U.S., in a statement on Monday said the attack has "adversely impacted" its operations and has hindered its ability to do business. Its Koons Automotive dealerships in Maryland and Virginia, however, which don't rely on CDK's software, have been able to operate without interruption, the company said. Ransomware attacks are on the rise. In 2023, more than 2,200 entities, including U.S. hospitals, schools and governments were directly impacted by ransomware, according to Emisoft, an anti-malware software company. Additionally, thousands of private sector companies were targeted. Some experts believe that the only way to stop such attacks is to ban the payment of ransoms, which Emisoft said would lead bad actors to "quickly pivot and move from high impact encryption-based attacks to other less disruptive forms of cybercrime." Earlier this year, the U.S. Department of State offered $10 million in exchange for the identities of leaders of the Hive ransomware gang, which since 2021 has been responsible for attacks on more than 1,500 institutions in over 80 countries, resulting in the theft of more than $100 million.