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

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

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

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

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

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

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

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

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

Producer Inflation Preview: The Hidden Factor That Could Tame CPI Enthusiasm - iShares Bloomberg Roll Select Commodity Strategy ETF (ARCA:CMDY) 2023-08-10 - In the grand stage of economic ups and downs, there’s a saying that echoes like a mantra: “The last mile is the toughest.” This adage, it seems, finds a perfect resonance when it comes to understanding the inflation dynamics in the U.S. After the twist in July’s consumer price index (CPI) report, in which the annual inflation rate ticked up to 3.2%, albeit slightly below the anticipated 3.3%, the spotlight now shifts to the impending release of the producer price index (PPI) inflation gauge on Friday. As the Federal Reserve steadily aims for a return to the 2% consumer inflation target, the prices faced by producers must not sprint ahead once again, lest a domino effect hits the end consumer products. Yet, a chilling revelation might be on the horizon. July’s PPI Report: What Do Economists Foresee? The median economists’ consensus projects a noticeable bump in the annual PPI for final demand, moving from a marginal 0.1% uptick in June to a more substantial 0.7% climb in July. That would snap a series of 12 consecutive declines in the annual PPI inflation rate. On a monthly basis, the PPI index is expected to have accelerated by 0.2% in July, leaving behind the 0.1% from June. The core PPI index is anticipated to show a year-on-year increase of 2.3% for July, just a tad lower than June’s 2.4%. On a monthly scale, the core PPI is also slated to advance at a 0.2% pace, edging up from the 0.1% witnessed in June. Read Also: Disinflation Talk Grows, Rate Hike Bets Plummet: Top 5 ETFs Rallying On CPI Miss Chart: June’s PPI Inflation Plummeted To The Lowest Level Since August 2020 Commodities Rose In July, Traders Believe Fed Is Done With Hiking July emerged as a positive month for global commodities, which posted an increase not seen since March 2022. The Bloomberg Commodity Index, which is closely tracked by the iShares Bloomberg Roll Select Commodity Strategy ETF CMDY surged almost 6% last month, after rising 3.5% in June. Rising commodity prices may affect the overall producer price index as the weight for final demand goods in the PPI basket hovers at about 30%. However, investors are increasingly convinced the Fed is about to end its rate-tightening campaign. The odds of leaving rates on hold in September according to Fed futures market pricing rose to over 90% on Thursday. The same odds relative to the November meeting amounted to 70%. Now Read: Deflation Rocks Used Car Market, Price Bubble Bursts: 5 Stocks Face Margin Squeeze Risks Photo: Shutterstock

News Corp Beats Q4 Earnings Expectations, Misses On Sales, Stock Slides After Hours - News (NASDAQ:NWS) 2023-08-10 - News Corporation NWS shares are trading lower after-hours Thursday as the company reported fourth-quarter earnings. Here's what happened. What To Know: The company reported quarterly earnings of 14 cents per share which beat the analyst consensus estimate of nine cents, a 62.16% decrease over earnings of 37 cents per share from the same period last year. The company reported quarterly sales of $2.43 billion, which missed the analyst consensus estimate of $2.48 billion, a 9.01% decrease over sales of $2.67 billion in the same period last year. Digital revenues accounted for over 50% of total revenues for the full year. The figure is cited as a significant inflection point in the company's progression. Free cash flow in the fiscal year ended June 30, 2023, was $593 million compared to $855 million in the prior year. Free cash flow available to News Corporation in the fiscal year ended June 30, 2023, was $450 million compared to $663 million in the prior year. Lower cash generated by operating activities was named as the cause. "News Corp's Fiscal 2023 results highlighted the durability and depth of our revenue streams and the impact of stringent cost controls as we navigated challenging macro conditions, supply chain pressures and currency headwinds. We achieved full year Fiscal 2023 revenues of $9.9 billion and profits of over $1.4 billion - the second highest profitability ever recorded by the company," said CEO Robert Thomson. "Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters." Related Link: The Apes Just Resurrected WeWork Stock: 'It Will Go To The Moon' NWS Price Action: Shares of NWS were down 1.59% at $20.38 in the after-hours session at the time of publication, according to Benzinga Pro. Image by Karolina Grabowska from Pixabay

Masonite's Margins To Remain Strong Despite Demand Issues, Analyst Highlights Acquisition Synergies, Robust FCF - Masonite International (NYSE:DOOR) 2023-08-10 - Stephens analyst Trey Grooms reiterated an Overweight rating on Masonite International Corporation DOOR, raising the price target to $130 from $110. The company recently reported Q2 results, where net sales declined 3% year over year due to continued softness in end-market demand. The analyst notes that EBITDA was ahead of expectations, but FY23 guidance was reiterated as overall end-market demand is progressing as expected with better new residential and softer R&R. The analyst adds that DOOR's continued progress on internal initiatives is starting to bear fruit, driving margin expansion from cost reduction efforts and generating robust FCF from lowering working capital levels. While prices could see modest declines in 2H, margins should still expand year-over-year from the further realization of Endura acquisition synergies and cost-outs, Grooms adds. However, the analyst cautions of the company's challenging demand environment looming large. For Q3, the analyst lowered sales estimates to $702.6 million (from $712.8 million), adj. EBITDA to $112.1 million (from $113.4 million) and EPS estimate to $2.08 (from $2.16). For FY23, Grooms lowered sales estimate to $2.84 billion (from $2.86 billion), adj. EBITDA to $430.5 million (from $429.5 million) and EPS estimate to $7.70 (from $7.73). For FY24, the analyst lowered sales estimates to $2.97 billion (from $2.99 billion)—however, FY24 adj. EBITDA is raised to $464.2 million (from $453.4 million), and the EPS estimate is raised to $8.68 (from $8.47). Price Action: DOOR shares closed lower by 0.69% to $104.74 on Thursday.

What's Going On With Wish Stock Today? - ContextLogic (NASDAQ:WISH) 2023-08-10 - ContextLogic Inc. WISH shares fell on Thursday. The stock is down nearly 60% year-to-date. What To Know: On Aug. 3, ContextLogic posted second-quarter earnings. The company reported quarterly losses of $3.38 per share, which beat the analyst consensus estimate of $3.74, a 13.33% increase over losses of $3.90 per share from the same period last year. The company reported quarterly sales of $78.00 million, which missed the analyst consensus estimate of $94.25 million, a 41.79% decrease over sales of $134.00 million in the same period last year. Also of note, during the past month, the company's board approved a plan to reduce its workforce by 34%. The news caused the stock to trade lower. The stock did benefit from Amazon's announcement of strong Prime Day sales in mid-July, however, at the end of June, Loop Capital downgraded the stock from Hold to Sell and announced a $7 price target, causing it to sink. Related Link: Autoworkers Union Talks Drive Ford And General Motors Stock Lower WISH Price Action: Shares of WISH were down 1.70% at $5.78 at the time of publication, according to Benzinga Pro. Image by Tumisu from Pixabay

Danaher Unusual Options Activity - Danaher (NYSE:DHR) 2023-08-10 - Someone with a lot of money to spend has taken a bearish stance on Danaher DHR. And retail traders should know. We noticed this today when the big position showed up on publicly available options history that we track here at Benzinga. Whether this is an institution or just a wealthy individual, we don't know. But when something this big happens with DHR, it often means somebody knows something is about to happen. Today, Benzinga's options scanner spotted 11 options trades for Danaher. This isn't normal. The overall sentiment of these big-money traders is split between 27% bullish and 72%, bearish. Out of all of the options we uncovered, there was 1 put, for a total amount of $25,175, and 10, calls, for a total amount of $484,330.. What's The Price Target? Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $200.0 to $267.5 for Danaher over the last 3 months. Volume & Open Interest Development In terms of liquidity and interest, the mean open interest for Danaher options trades today is 319.5 with a total volume of 788.00. In the following chart, we are able to follow the development of volume and open interest of call and put options for Danaher's big money trades within a strike price range of $200.0 to $267.5 over the last 30 days. Danaher Option Volume And Open Interest Over Last 30 Days Biggest Options Spotted: Symbol PUT/CALL Trade Type Sentiment Exp. Date Strike Price Total Trade Price Open Interest Volume DHR CALL TRADE BEARISH 01/19/24 $200.00 $136.0K 83 20 DHR CALL SWEEP BEARISH 08/18/23 $250.00 $61.8K 730 149 DHR CALL TRADE BEARISH 08/18/23 $250.00 $55.9K 730 43 DHR CALL TRADE BULLISH 08/18/23 $250.00 $49.8K 730 192 DHR CALL SWEEP BEARISH 08/18/23 $250.00 $40.0K 730 75 Where Is Danaher Standing Right Now? With a volume of 1,698,965, the price of DHR is up 0.52% at $257.38. RSI indicators hint that the underlying stock may be approaching overbought. Next earnings are expected to be released in 70 days. What The Experts Say On Danaher: Stifel has decided to maintain their Hold rating on Danaher, which currently sits at a price target of $240. RBC Capital has decided to maintain their Outperform rating on Danaher, which currently sits at a price target of $292. Raymond James downgraded its action to Outperform with a price target of $270 Barclays has decided to maintain their Overweight rating on Danaher, which currently sits at a price target of $290. Raymond James has decided to maintain their Outperform rating on Danaher, which currently sits at a price target of $290. Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely. If you want to stay updated on the latest options trades for Danaher, Benzinga Pro gives you real-time options trades alerts.

Amazon.com Unusual Options Activity For August 10 - Amazon.com (NASDAQ:AMZN) 2023-08-10 - A whale with a lot of money to spend has taken a noticeably bearish stance on Amazon.com. Looking at options history for Amazon.com AMZN we detected 133 strange trades. If we consider the specifics of each trade, it is accurate to state that 43% of the investors opened trades with bullish expectations and 56% with bearish. From the overall spotted trades, 45 are puts, for a total amount of $2,907,796 and 88, calls, for a total amount of $7,197,968. What's The Price Target? Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $50.0 to $200.0 for Amazon.com over the last 3 months. Volume & Open Interest Development In terms of liquidity and interest, the mean open interest for Amazon.com options trades today is 7531.35 with a total volume of 784,047.00. In the following chart, we are able to follow the development of volume and open interest of call and put options for Amazon.com's big money trades within a strike price range of $50.0 to $200.0 over the last 30 days. Amazon.com Option Volume And Open Interest Over Last 30 Days Biggest Options Spotted: Symbol PUT/CALL Trade Type Sentiment Exp. Date Strike Price Total Trade Price Open Interest Volume AMZN PUT SWEEP BULLISH 08/11/23 $138.00 $342.4K 9.5K 19.0K AMZN CALL TRADE NEUTRAL 01/17/25 $60.00 $300.0K 1.6K 86 AMZN CALL TRADE BULLISH 01/17/25 $105.00 $235.5K 1.9K 90 AMZN CALL TRADE BULLISH 06/21/24 $100.00 $232.2K 16.5K 52 AMZN CALL SWEEP BULLISH 06/21/24 $122.50 $194.3K 1.6K 70 Where Is Amazon.com Standing Right Now? With a volume of 54,373,427, the price of AMZN is up 0.52% at $138.56. RSI indicators hint that the underlying stock may be approaching overbought. Next earnings are expected to be released in 77 days. What The Experts Say On Amazon.com: Rosenblatt upgraded its action to Buy with a price target of $184 Citigroup has decided to maintain their Buy rating on Amazon.com, which currently sits at a price target of $167. Needham has decided to maintain their Buy rating on Amazon.com, which currently sits at a price target of $160. Evercore ISI Group has decided to maintain their Outperform rating on Amazon.com, which currently sits at a price target of $190. Credit Suisse has decided to maintain their Outperform rating on Amazon.com, which currently sits at a price target of $176. Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely. If you want to stay updated on the latest options trades for Amazon.com, Benzinga Pro gives you real-time options trades alerts.

Trump's Truth Social tipped FBI to man killed during arrest attempt for Biden threats 2023-08-10 - This photo illustration shows an image of former President Donald Trump next to a phone screen that is displaying the Truth Social app, in Washington, DC, on February 21, 2022. The social media company owned by former President Donald Trump in March tipped off the FBI about threats made by a Utah man who was fatally shot Wednesday by FBI agents as they attempted to arrest him for threatening to kill President Joe Biden, NBC News reported. Truth Social notified the FBI after Craig Deleeuw Robertson made threats to kill Manhattan District Attorney Alvin Bragg Jr., according to a senior law enforcement official who spoke to NBC. Bragg is prosecuting Trump for allegedly falsifying business records related to a 2016 hush money payment to porn star Stormy Daniels. Robertson was armed when FBI agents confronted him at his home in Provo on Wednesday morning, and had pointed his weapon at agents and did not respond to their commands before agents fatally shot him, a senior official told NBC. Agents were there to arrest him on a federal criminal complaint accusing him of making death threats against Biden, Bragg, and FBI agents. Robertson was killed hours before Biden arrived in Utah for a visit. He was described by the FBI in a court filing as a white man "approximately 70-75 years old" who was surveilled "wearing a dark suit (later observed as having an AR-15 style rifle lapel pin attached), a white shirt, a red tie, and a multi-colored (possibly camouflage) hat bearing the word "TRUMP" on the front." Trump Media & Technology Group started Truth Social in late 2021, months after Trump was banned from Twitter on Jan. 8, 2021. Twitter, now known as X, feared he might incite further violence on the heels of the Capitol riot by a mob of his two days earlier.

Tech investors face 'new era' of China restrictions after Biden order limits funding in A.I., chips 2023-08-10 - US President Joe Biden speaks on how "Bidenomics" is helping clean energy and manufacturing, at Arcosa Wind Towers in Belen, New Mexico, on August 9, 2023. The Biden administration's executive order restricting U.S. private equity and venture capital investments in Chinese technology finally landed on Wednesday. For U.S. tech investors who'd already grown wary of the budding cross-Pacific rivalry, the ruling is the clearest signal yet that the world's second-biggest economy is off limits. Biden is specifically targeting investments in technologies like semiconductors, quantum computing and artificial intelligence on concern that China's advancements in those areas run counter to U.S. national security interests. The new measure is expected to go into effect next year. U.S. investors have been steadily retreating from China due to a combination of a weakening economy and the fraught geopolitical environment. Combined U.S. private equity and venture investments in China fell to an eight-year low in 2022 in terms of capital deployed, a trend that continued into the first half of this year, according to PitchBook data. "We've had conversations with with our own clients who have said, 'Yeah, look, we've really been pulling back on on our presence in China for a little while,'" said Elena McGovern, co-head of the national security practice at private equity advisory firm Capstone, in an interview. "This is the first time that the U.S. government is imposing restrictions on how U.S. capital flows out of the country, how U.S. investors are making investment decisions. So that is a new era." Political pressure has been bipartisan. Last month, the House Select Committee on the Chinese Communist Party sent letters to four U.S. venture firms, expressing "serious concern" about their investments in Chinese tech startups. And in July, legendary VC firm Sequoia Capital said it would split its international business into three parts, with Neil Shen helming its powerful Sequoia China unit. At this point, any technology that can be used to enhanced China's military strength or surveillance capabilities is of notable concern to the White House. "U.S. money should not be used to finance Beijing's military development," said Eric Reiner, managing partner at Vine Ventures, which backs early-stage companies in the U.S., Israel and Latin America. "A lot of these firms that have been investing in China and setting up offices there are really playing with fire." While AI, computer processors, and quantum computing are areas of stated concern, many investors and experts say they have to move forward with the expectation that the ban will widen, essentially making any deal in Chinese technology too risky to pursue. "It's likely to deter investments in those sectors, even beyond what is explicitly prohibited," said, Adam Hickey, a former deputy assistant attorney general for the Justice Department's national security division who's now a partner at law firm Mayer Brown. "Most investors want to avoid being seen as acting against U.S. national security interests." Steve Sarracino, the founder of Activant Capital, said "I don't know anyone that's doing early-stage China investing from from the U.S." The only exception, he said, were "hedge funds, who really are in the business of calculating geopolitical risks." Activant has offices in the U.S., Germany and South Africa. The U.S. government's ongoing hostility towards China carries its own risks. For one, there's a ton of investment money in and around China that can fill the vacuum and potentially generate huge returns. There's also the challenge of dealing with existing investments. For example, major U.S. venture firms have invested in ByteDance, the parent of mobile video app TikTok, which has faced the threat of a potential ban in the U.S. or a forced sale to keep operating. Investors want to maximize their returns, which could be huge should ByteDance go public.

Shares of red-hot Apple and Nvidia have hit rough patches. Here's what we think is happening 2023-08-10 - Apple (AAPL) and Nvidia (NVDA) — the Club's two "own it, don't trade it" stocks — have seen their fortunes sour somewhat in recent weeks, sliding to become among our five worst-performing holdings in August. Plenty of investors may be bailing on these two stellar performers. We are not. "I think Apple and Nvidia are the two you have to watch," Jim said Thursday morning. "They have to stop [declining]." .SPX AAPL,NVDA 1M mountain The S & P 500's performance over the past month compared with Apple and Nvidia. Despite initially trading modestly higher Thursday morning, Apple and Nvidia shares steadily lost ground into the afternoon in lockstep with the market. They popped a bit with the S & P 500 's brief move positive just before 2 p.m. ET, before leveling off around the flat line. For the month of August, Apple and Nvidia have both lost about 9%, giving back some of their spectacular year-to-date gains. Both hit record highs in mid-July. The recent moves in Apple and Nvidia have coincided with a roughly 2% drop in the S & P 500 so far in August, after finishing the July 31 session at 4,588.96 — its peak for the year. At the index level, it's not necessarily a shock to see some weakness. Overbought conditions in the market for much of late July suggested investors stay vigilant and prepare for a pullback. There are no guarantees that Apple and Nvidia — two of the largest stocks in the S & P 500 and large contributors to the index's 17% gain this year — will shake their recent malaise anytime soon. When it does happen, though, we'll be around to see it. "Apple's gotten stuck," Jim said, falling in six of the seven August trading days, as of Wednesday's close. Apple's June quarter, released a week ago, hasn't helped matters, with the once-$3 trillion company now valued below that level . AAPL YTD mountain Apple YTD performance In our minds, the iPhone maker's results were impressive – led by a record $21.2 billion in high-margin Services revenue. Combined with the largest base of installed devices in company history, those are more than enough reasons for us to look past weaker-than-expected Products sales. Other investors have viewed the quarter differently. So be it, as Jim wrote earlier this week . That's the sellers' mistake. The "own it, don't trade it" mantra is built for moments like this, giving us an intellectual foundation to keep our eyes on focused on Apple's bright multiyear prospects and not minor quarter-to-quarter fluctuations. Apple shares are still up a robust 37% for the year. The annual September new product launch also is right around the corner. All is not lost. NVDA YTD mountain Nvidia YTD performance Nvidia's stock chart may get worse before it gets better. "I do not think you should start to buy Nvidia right here, right now," Jim said Thursday. "I think it's going to go lower." The stock's nearly 5% decline Wednesday may be tied to a supply warning from server maker Super Micro Computer , which Morgan Stanley analysts called a "key" original equipment manufacturer customer for Nvidia. Step back a little bit, though, and here's a stock that more-than tripled in value in 2023 by the time August rolled around, thanks to investor optimism around its artificial intelligence chips. It's reasonable to conclude a breather is in order, which last week on "Mad Money" is exactly what market historian and veteran chartist Larry Williams told Jim could happen. "Be careful," Williams said. "I like Nvidia longer term, but short term I agree with [Williams]," Jim said Thursday. "Short term, Nvidia was up 200%, the most in the S & P, and that's just a rather high bar." To be sure, Nvidia's stock entering a period of digestion is not the same thing as its fundamental business is souring. Quite the opposite. The king of AI chips this week made a series of announcements aimed at strengthening its already-dominant position in the market . What's more, the Financial Times reported that Chinese internet giants, including Alibaba and TikTok parent ByteDance, ordered $5 billion worth of AI chips from Nvidia, in a scramble to beat any new U.S. export restrictions on the key pieces of technology. Bottom line Put it together, and there's no change to our stance on Nvidia. The ascent higher just may be on hold, for now. Investors whose focus is different than ours at the Club are bailing on Apple and Nvidia, turning what had once been two sterling stock charts into sour situations. We're not going to try and trade around it. (Jim Cramer's Charitable Trust is long NVDA and AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. Apple CEO Tim Cook speaks before the start of the Apple Worldwide Developers Conference at its headquarters on June 05, 2023 in Cupertino, California. Apple CEO Tim Cook kicked off the annual WWDC23 developer conference. Justin Sullivan | Getty Images

Hawaii wildfires: Biden vows immediate aid, deploys military to assist victims 2023-08-10 - An aerial view of a wildfire in Kihei, Maui County, Hawaii, U.S., August 8, 2023 in this screen grab obtained from a social media video. President Joe Biden on Thursday vowed immediate assistance for Maui residents who have lost loved ones and their homes in devastating wildfires that have taken at least 36 lives. Biden declared a major disaster in Hawaii two days after wildfires rapidly swept across parts of Maui, devastating the historic city of Lahaina, the former capital when the islands were an independent kingdom. "We have just approved a major disaster declaration for Hawaii which will get aid into the hands of the people desperately, desperately needing help now," the president said during remarks in Utah. "Anyone who's lost a loved one, whose home has been damaged or destroyed, is going to get help immediately," Biden said. The president said he spoke with Hawaii Gov. Josh Green Thursday morning and vowed to provide any federal assistance the state needs to recover from the fires. Biden said he directed FEMA Administrator Deanne Criswell to streamline requests to get federal aid to survivors without delay. Criswell will travel to Maui on Friday, the president said. The disaster declaration that Biden issued Thursday will provide money to help with temporary housing, home repairs and uninsured property losses.

Supreme Court blocks Purdue Pharma's $6 billion opioid settlement, will hear challenge 2023-08-10 - The Supreme Court on Thursday blocked, for now, a $6 billion bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to the opioid crisis. The Supreme Court also said it will hear a U.S. Bankruptcy trustee's challenge to the settlement by Purdue, the maker of the opioid OxyContin. The order Thursday directed parties to file briefs on a question of whether bankruptcy courts can approve a Chapter 11 reorganization that releases claims by non-debtors against non-debtor third parties "without the claimants' consent." "We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree," the company said in a statement. "Even so, we are disappointed that the U.S. Trustee, despite having no concrete interest in the outcome of this process, has been able to single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country, and overdose rescue medicines." There were no dissents by any of the court's justices in the order granting the requested hold, which was sought by the Department of Justice. The DOJ had argued in a court filing that the release of the Sacklers from civil liability "is not authorized by the Bankruptcy Code, constitutes an abuse of the bankruptcy system, and raises serious constitutional questions." The case will be argued in December at the high court.