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On politicized prosecutions, Marco Rubio has a poor memory 2024-07-08 18:54:52+00:00 - By all accounts, Sen. Marco Rubio is a finalist for his party’s vice presidential nomination, and with this in mind, the Florida Republican has been an eager participant in the GOP’s “race to the bottom.” It was against this backdrop that the senator sat down with CNN’s Dana Bash, who asked about the Supreme Court’s immunity ruling. In a move that likely pleased viewers at Mar-a-Lago, Rubio largely ignored the question and toed a partisan line. From the “State of the Union” transcript: When Donald Trump was president, I can’t think of a single prominent Democrat who was chased around, persecuted, prosecuted. It’s funny to me to read these people and hear these people out there warning about all the horrible things they ridiculously claim Donald Trump is going to do if he becomes president again. They’re the ones that have been going after their political opponents. The Republican senator added moments later that Trump, in a second term, wouldn’t target his perceived political foes. “His vengeance is going to be by winning and making America great again, not going after his political opponents,” Rubio said. So, a few things. First, if the senator or his allies have any evidence of White House officials “going after their political opponents,” Republicans have kept the proof well hidden. Second, the idea that Trump has no interest in vengeful, retaliatory tactics is belied by Trump repeatedly expressing explicit interest in vengeful, retaliatory tactics. Indeed, the question of whether or not the presumptive GOP presidential nominee would try to prosecute his perceived political enemies in a second term has already been answered by the former president himself many times: As regular readers know, Trump has publicly acknowledged his intentions in multiple interviews. Perhaps Rubio missed them. But of particular interest in the CNN interview was Rubio’s suggestion that Democratic fears of abuses are absurd. Look at that quote again: “It’s funny to me to read these people and hear these people out there warning about all the horrible things they ridiculously claim Donald Trump is going to do if he becomes president again.” The trouble is, Rubio doesn’t seem to recall Trump’s actual presidency. The former president’s critics aren’t just raising concerns about his future plans, they’re making accusations based on Trump’s unambiguous record. As we’ve discussed, the former president spent much of his White House tenure trying to transform Justice Department prosecutors into his own personal attack dogs. The New York Times reported in 2022 that Trump and his team “tried to turn the nation’s law enforcement apparatus into an instrument of political power” to carry out the Republican’s wishes. A Washington Post analysis published soon after highlighted the many instances in which Trump not only leaned on the Justice Department to follow his whims, but also his efforts to push federal law enforcement to validate the “big lie” in the wake of his election defeat. The Republican’s weaponization efforts reached a truly amazing pinnacle less than a month before Election Day 2020, when Trump publicly called on federal prosecutors to go after Joe Biden — at the time, the Democratic Party’s presidential nominee who was leading the Republican incumbent in the polls — and accused him of undefined crimes. The then-president added that his future successor shouldn’t be “allowed” to run against him. On Oct. 7, 2020, with early voting underway across much of the country, Politico published an especially memorable headline: “‘Where are all of the arrests?’: Trump demands Barr lock up his foes.” The next day, the Republican incumbent spoke with Fox Business’ Maria Bartiromo and called on the Justice Department to “indict” his perceived Democratic foes — including Biden. After Trump’s 2020 defeat, his former White House chief of staff, John Kelly, said the former president “regularly” wanted to use the Justice Department to retaliate against critics. To date, Rubio never expressed a word of criticism about any of this, and now the senator appears to have forgotten recent history altogether. This post updates our related earlier coverage.
Multibillion-Dollar Fraud Trial Against Archegos Founder Nears Its End 2024-07-08 18:35:00+00:00 - The collapse of Archegos Capital Management in spring 2021, which caused billions in losses for a handful of Wall Street banks, was the result of “lies and manipulation” by Bill Hwang, the firm’s founder, a federal prosecutor told a jury in Manhattan on Monday. During closing arguments, Andrew Thomas, the prosecutor, said that Mr. Hwang had defrauded the banks and other traders in the market by artificially inflating stock prices to pump up the size of Archegos. Barry Berke, a lawyer for Mr. Hwang, said the government was criminalizing his client’s high-risk trading only because it caused losses for the banks that had lent him billions of dollars. “Mr. Hwang bet on companies he believed in,” Mr. Berke said. “That is not manipulative.” Mr. Hwang, 60, is charged with 11 counts of securities fraud, wire fraud, conspiracy, racketeering and market manipulation. If convicted on all counts, he could spend the rest of his life in prison.
All rail cars carrying hazardous material have been removed from North Dakota derailment site 2024-07-08 18:15:38+00:00 - BORDULAC, N.D. (AP) — All of the rail cars that contained hazardous materials have been removed from the site of a derailment in North Dakota, and all hotspots from the resulting fire have been extinguished, an official with CPKC said Monday. Railroad spokesman Patrick Waldron said in an email that track repairs were completed early Monday, and rail traffic resumed following track safety inspections. No one was injured in the pre-dawn Friday derailment, which knocked 29 CPKC train cars off the tracks in a marshy area surrounded by farmland about 140 miles (225 kilometers) northwest of Fargo, officials said. The train was carrying anhydrous ammonia and other hazardous materials. Officials on Sunday briefly issued a shelter-in-place notice for area residents after air monitors detected low levels of anhydrous ammonia, said Andrew Kirking, emergency management coordinator for Stutsman and Foster counties in east-central North Dakota. No injuries from the leak were reported, and the notice was lifted later Sunday when air monitoring levels returned to zero, Kirking said. Exposure to high concentrations of ammonia in the air can cause burning of the eyes, nose, throat and respiratory tract, and can result in blindness, lung damage or death, health officials say. Exposure to lower amounts can result in coughing and irritation of the nose and throat. The National Transportation Safety Board and Federal Railroad Administration is investigating the cause of the derailment.
Record 3 million passengers passed through TSA checkpoints Sunday after July 4th 2024-07-08 18:11:00+00:00 - Agents with the Transportation Security Administration screened more than 3 million passengers at U.S. airports on Sunday, a record number underscoring the popularity of air travel this year. Exactly 3,013,413 flight passengers stepped through TSA checkpoints, surpassing the previous record of 2.99 million set on June 23. Sunday was a one-day record, but TSA officials said 2024 has been a historic year all around. Nine of the 10 busiest days in TSA history have happened this year, starting on May 25 when agents screened roughly 2.9 million travelers. U.S. Department of Homeland Security Secretary Alejandro Mayorkas said in a statement Monday that TSA agents, in "an extraordinary achievement," effectively checked-in 35 passengers and their luggage every second during an intensely busy weekend. Prioritizing lasting memories One reason TSA agents experienced the record volume is because Americans are prioritizing making memories from traveling with friends and family, one aviation industry expert told CBS MoneyWatch. "During the pandemic, so many Americans got up close and personal with their own mortality," said Peter Greenberg, travel editor for CBS News. "That completely changed their purchasing patterns; people said they don't need new cars, new clothing, the newest electronic device, they want to buy experiences." A March survey from NerdWallet found that nearly half of Americans plan to travel by air this summer either to visit friends and family or vacation with them. Many of those surveyed said they're even planning on going into debt to cover those travel aspirations. In a separate report from American Express, 77% of the 2,000 people surveyed said they care more about the right travel experience than about the cost of the trip. In that report, 72% of respondents said they would rather save money for a major trip than spend it on going out with friends. Americans this year have been ignoring the price of flights and deciding to take trips because they're uncertain if they'll have enough money to do so in the future, Greenberg said. "They're basically saying, 'Screw it, let's just go," he said. "And they're going everywhere." Flight fares dip slightly Another reason TSA has seen record screenings might be flight prices, which had dipped slightly during the holiday weekend. The average cost of a domestic plane ticket during the July 4th weekend was $315, down from $347 a week prior, according to price tracker Hopper. The average flight fare this summer is $305 compared with $324 last summer and $313 in 2018 — before the pandemic. Flight tickets were 2% cheaper during the holiday compared with Independence Day fares in 2023, according to AAA. The TSA was created in November 2011 after the terror attacks on Sept. 11, 2001. The agency replaced a collection of private security companies hired by airlines to do passenger screenings.
Poor state of Thames Water a ‘critical risk’ to UK, Starmer and Reeves told 2024-07-08 18:05:00+00:00 - The prime minister and chancellor have been briefed by Whitehall officials that the poor state of Thames Water presents a “critical risk” to the country, the Guardian understands. Fears about the company go beyond its precarious financial position and include the management of sites that provide drinking water and sewage treatment for millions of customers across the capital and the Thames valley. Keir Starmer and Rachel Reeves were first to be briefed on the issue. They were warned by civil servants that the dire state of Thames’s infrastructure is one of the most urgent problems facing the new government, according to sources. The condition of Coppermills, a vast water treatment works in north-east London that serves as many as 3 million people, is particularly alarming, ministers and aides have been told. The site is classed among the UK’s most important pieces of national infrastructure. A financial update on Tuesday is due to reveal more about the frayed finances of Britain’s biggest water company. Thames’s annual results will be followed on Thursday by an initial verdict from the water watchdog Ofwat on water companies’ five-year spending plans and bill increases. Thames was among a list of “critical risks” that require urgent attention, with its potential financial collapse considered a potential “major threat to critical national infrastructure”, according to briefings given to the prime minister and chancellor. Management failings have added to fears of potential “widespread disruption to essential services” caused by crumbling infrastructure, it is understood. It has been reported that the ailing water company is among the top priorities of the prime minister’s chief of staff, Sue Gray. On Monday, the PM’s spokesperson suggested that the government would prefer not to nationalise the company, saying it doesn’t “think it’s the right course of action”. They added: “Instead, the government’s focused on holding these companies to account, ensuring they’re investing and improving our systems rather than rewarding themselves.” Nevertheless, the government will have no choice but to move to safeguard London’s water supply should Thames’s finances fail. Thames is the most indebted of the UK’s water monopolies and is labouring under a £15.6bn debt pile. Its finances have been left threadbare after previous shareholders, led by the Australian bank Macquarie, siphoned out billions of pounds of dividends and it was fined for pollution and leaks. Emergency plans drawn up by Whitehall and seen by the Guardian would turn the company into a publicly owned arm’s-length body under the state’s special administration regime. This would ensure that it can continue to provide water and sewage treatment services to its 16 million customers in London and the Thames valley. Thames is burning through its cash reserves as it struggles to attract new investment. Last month it was revealed by the Guardian that the company agreed to pay a £150m dividend in late March – hours before its existing shareholders U-turned on providing £500m of emergency funding. Concerns about its future rest not only on its financial position. Officials are fearful of the ability of the company to make and manage essential improvements to is creaking operations and infrastructure. 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 In a sign of how serious concerns about its future are, the debate is being weighed at No 10 and 11, rather than solely at the Department for Environment, Food and Rural Affairs, which has been working on rescue plans with the Treasury. A spokesperson for Defra said: “We are closely monitoring the situation and the company remains stable.” A source close to Steve Reed, the newly appointed Defra secretary of state, said: “We are in this situation because of 14 years of Conservative incompetence. The Conservatives weakened regulation, allowing water companies to get into debt while the sewage system crumbled and illegal sewage-dumping hit record levels.” They added: “The election of this Labour government is a reset moment for the water industry. Over the coming weeks and months, this government will outline its first steps to reform the water sector.” Plans for Thames’s nationalisation would in effect pull it on to the government’s balance sheet. Investors would be likely to face steep losses on loans made to the company. Thames Water declined to comment. A spokesperson for Ofwat declined to comment on specific briefings. They said in a statement: “Safeguards are in place to ensure that services to customers are protected, regardless of issues faced by shareholders of Thames Water. We will publish our view of its business plan for the 2025-2030 period on 11 July, along with all other water companies, as part of our PR24 proposals. Thames Water must continue to pursue all options to seek further equity to fund its turnaround plan for the benefit of customers and the environment.”
Cherokees in North Carolina begin sales of recreational marijuana to adult members 2024-07-08 17:34:09+00:00 - CHEROKEE, N.C. (AP) — A tribal-owned medical marijuana dispensary in western North Carolina is also now selling cannabis products for adult recreational use just weeks after the Eastern Band of Cherokee Indians governing board approved its expanded use on tribal lands. The Great Smoky Cannabis Co. began recreational marijuana sales on July 4 to adults at least 21 years of age who are enrolled Eastern Band members or members of any other federally recognized tribe, according to news outlets. A company social media post included a photo of what it called last Thursday’s first legal sale of marijuana for recreational use on Eastern Band land called the Qualla Boundary. Recreational sales to nonmembers are expected to begin later in the summer. In April, Great Smoky Cannabis opened its doors for medical marijuana purchases for adults with a tribe medical cannabis patient card or an out-of-state approved medical marijuana card. But tribal members had already voted in a referendum last September backing adult recreational use on their reservation as well, and telling the tribal council to develop legislation to regulate such a market. Based on the referendum, the council approved language last month that effectively decriminalizes cannabis on the Qualla Boundary, but also updates the tribe’s laws to reflect its use. Marijuana possession or use is otherwise illegal in North Carolina, but the federally recognized tribe can pass rules related to cannabis as a sovereign nation. Of North Carolina and its surrounding states, only Virginia allows for the legal recreational use of marijuana statewide. Qualla Enterprises, the tribe’s cannabis subsidiary, had previously signaled that adult-use sales would initially be limited to tribal members. The expansion to others could begin in August, a Qualla Enterprises executive said recently. The Great Smoky Cannabis marijuana sales center, located near the Harrah’s Cherokee Casino Resort, is predicted to be more of a revenue-generator for the 14,000-member tribe as its customer base is expanded. At a council late last month, the tribal council voted to overturn two provisions contained in the new adult-use ordinance. One amendment now overturned had made it illegal for non-tribal government-owned businesses to sell hemp on the Qualla Boundary. Another had allowed medical marijuana card holders to grow up to four plants in homes without children.
Hatch recalls nearly 1 million power adapters sold with baby sound machines due to shock hazard 2024-07-08 17:30:43+00:00 - NEW YORK (AP) — Due to a shock hazard, a California company is recalling nearly 1 million power adapters sold with sound machines marketed to help infants and young children sleep. The plastic surrounding the AC power adapter that was supplied with some of Hatch’s Rest 1st generation sound machines can come off when removing the product from an outlet, leaving its prongs exposed, the U.S. Consumer Product Safety Commission said. That increases risks of electric shock. There have been 19 reports of the plastic housing surrounding the adapter coming off, including two instances of consumers getting a minor electric shock, the CPSC said in its Wednesday recall notice. The recall is specific to power adapters supplied by Jiangsu Chenyang Electron Co., Hatch said in a company announcement, adding that it is no longer sourcing from Jiangsu Chenyang for its products. Palo Alto, California-based Hatch also noted that the issue is only with the adapter accompanying the sleeping machines, not the device itself. “Once a replacement power adapter is issued, the Hatch Rest 1st generation device is safe to continue using,” the company wrote. In the meantime, consumers in possession of the faulty power adapters are urged to stop using them. The now-recalled adapters, which were manufactured in China, can be identified by their model number: CYAP05 050100U. The adapters were sold with Rest 1st generation sound machines on Hatch.co, as well as major retailers including Target and Walmart, between January 2019 and September 2022. Some were also sold on Amazon through May 2024. The machines produce white noise or lullabies to help babies and young children sleep, and also have features including a night light. An estimated 919,400 of them were purchased in the U.S., and over 44,000 in Canada. Hatch is offering a free replacement adapter to impacted customers and says it’s contacting all registered owners directly. Consumers can learn more about registering for the recall on the company’s website.
U.S. to expand control of land sales to foreigners near 56 additional military sites 2024-07-08 17:30:26+00:00 - WASHINGTON (AP) — The U.S. wants to expand a Treasury committee’s jurisdiction to review land sales near U.S. military sites where foreigners are the buyers. New Treasury rulemaking would expand the U.S. Committee on Foreign Investment in the United States’ powers to review land sales near 56 additional military sites, bringing the overall number to 227 military sites. A 2018 law granted the committee authority to review real estate transactions near sensitive sites across the U.S. The U.S. Committee on Foreign Investment in the United States is a little-known but powerful government committee also known as CFIUS — tasked with investigating corporate deals for national security concerns that holds power to force companies to change ownership structures or divest completely from the U.S. It is made up of members from the State, Justice, Energy and Commerce departments among others. The Monday rulemaking announcement comes after President Joe Biden in May issued a divestment order blocking a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling its proximity to the base a “national security risk.” Treasury Secretary Janet Yellen said in a statement that the Biden administration is “committed to using our strong investment screening tool to defend America’s national security, including actions that protect military installations from external threats.” In May 2023, rulemaking began to give CFIUS the power to review land sales near military bases after controversy arose over plans by the Fufeng Group to build a $700 million wet corn milling plant about 12 miles from the Grand Forks Air Force Base, which houses air and space operations. The proposed rule will be open for public comment for 30 days. The U.S. has already issued major new tariffs on electric vehicles, semiconductors, solar equipment and medical supplies imported from China.
Walmart, Chipotle, others criticized over higher prices 2024-07-08 17:03:00+00:00 - Inflation may be cooling, but consumers’ outrage over higher prices is running hot. TikTok users blasted Walmart for rolling out digital shelf labels that allow it to quickly raise and lower prices. Wendy’s backpedaled after its CEO suggested the burger chain may start using dynamic pricing. And at some Chipotle locations, customers filmed workers to try to make sure they didn’t skimp on their burrito bowls. The three joined a growing list of consumer brands contending with customers’ deep frustration over high prices — and wariness that prices will only rise more. Many retailers, restaurants and other consumer companies have seen sales fall as shoppers pull back their spending. Businesses are now trying to convince customers that they offer the best deals, fueling a rise in discounts, promotions and value meals. Consumers are fed up with deceptive pricing, said Jean-Pierre Dubé, a professor of marketing at the University of Chicago Booth School of Business. They’ve seen smaller items on shelves, paid tacked-on fees and felt pressure to tip workers for things they didn’t tip for in the past. “We’re reaching a boiling point on this,” he said. The companies stocking grocery aisles contend consumer perception is skewed. Grocery prices have risen just 1% in the past year. But food at home prices have climbed more than 24% since May 2019, stretching consumers’ wallets and stoking anger with companies. Consumers’ buying power has also increased as inflation cools and the job market remains strong, boosting real hourly earnings for the average private sector worker, according to U.S. Bureau of Labor Statistics data. Other key costs are raising Americans’ expenses, such as electricity and rent, which have climbed over the last 12 months. “People experience the price of consumer products constantly, and that does tend to be a focus of what they can remember buying last,” said David Chavern, president of the Consumer Brands Association, a trade group representing Coca-Cola, Procter & Gamble and dozens of other consumer packaged goods companies. “But the reality is that what’s happening in the grocery store, in the drug store has not been a source of material inflation over the last 12 to 18 months.” In a Pew Research Center survey from May, 62% of U.S. adults said inflation was “a very big problem in the country today,” a higher percentage than any other issues they were asked about including illegal immigration, gun violence, violent crime and the federal budget deficit. That percentage has held roughly steady, even as inflation cools. In the year-ago survey by Pew, 65% of Americans said inflation was a very big problem. Inflation has also become a major talking point on the presidential campaign trail. Former President Donald Trump has blamed President Joe Biden, while has Biden accused companies of greed. Shrinkflation in the spotlight Grocery inflation may be back to pre-pandemic levels, but that hasn’t eased the frustration of Americans who are paying way more than they did years ago. Consumers, businesses and the Federal Reserve will get the latest read on inflation on Thursday, when the federal government reports the consumer price index for June. Dianna Campbell, 69, a TV producer and consultant in Manhattan, said she’s noticed prices rising and staying high, whether it’s for laundry detergent or a restaurant meal. “You’re paying more for it, but you’re giving me less, and the quality is worse,” she said. Campbell isn’t the only consumer angry about shrinkflation, the practice of cutting an item’s size, but not its price. Over the past year, the term has become a household phrase through references in pop culture and politics. In March, both the Cookie Monster and Biden called out shrinkflation by name, the former for reducing the size of his beloved treats and the latter for decimating Snickers bars. (Snickers’ parent company, Mars, denied skimping on the chocolate bars). Customers have seen plenty of other examples on trips to the grocery store. In a report on shrinkflation, Sen. Bob Casey, D-Pa., called out Gatorade for swapping out a 32-ounce bottle for a 28-ounce version and keeping the same price. Gatorade denies that it changed its packaging for profits. PepsiCo spokesperson Andrea Foote told CNBC that the 28-ounce bottle of Gatorade has been around for more than a decade, and widening its distribution was part of the company’s long-term strategy, not a response to the current economic climate. Retailers have also been accused of shrinking the size of private label items. Walmart, for instance, cut the number of sheets in its Great Value paper towel rolls from 168 to 120 but did not reduce the price. Company spokeswoman Tricia Moriarty said it’s not shrinkflation because Walmart reformulated the product to make each sheet more absorbent. Awareness of shrinking portions contributed to recent backlash against Chipotle. After some customers thought their burrito bowls were smaller, they began filming the workers making their orders and posting the videos on TikTok. In an interview with Jim Cramer on CNBC’s “Mad Money” in late May, CEO Brian Niccol said Chipotle has not reduced portion sizes and described the TikTok trend of filming workers as “a little rude.” “The whole thing is kind of crazy to me,” he said. “We’ve always said we want to give people great portions. We want to give them what they want.” Wells Fargo analyst Zachary Fadem tested out the theory himself, ordering 75 burrito bowls from eight New York City Chipotle restaurants and weighing them. The burrito bowls’ weight varied based on location, leading the analyst to conclude that consistency was the issue — not shrinkflation. But the feeling of paying more and getting less isn’t just in consumers’ heads. It’s become a common experience when shoppers stock up on groceries and get ready for backyard barbecues. This July 4, for example, customers paid an average of $71.22 for a cookout for 10 people, according to the American Farm Bureau Federation. That’s up 5% from last year and 30% from 2019. Pricing pushback Wendy’s and Walmart have also recently felt fury from consumers concerned about getting ripped off. In late February, the burger chain had to backpedal after CEO Kirk Tanner told investors that Wendy’s would test features as soon as 2025 that included “dynamic pricing” — such as adjusting menu prices to drive demand during slower times of the day. Wendy’s later said that it had no plans to raise prices when demand is highest and blamed misleading media reports for the uproar. More recently, social media users criticized Walmart over its decision to roll out digital shelf labels, higher-tech price tags that allow it to quickly and easily change prices. The retailer said last month that it would add the technology to more of its stores and plans to have them in 2,300 locations, or roughly half of its U.S. footprint, by 2026. On TikTok, some saw the move as the first step toward the nation’s largest retailer using dynamic pricing, the practice of raising and lowering prices based on demand, similar to Uber’s surge pricing. Walmart, on the other hand, said the new price tags will cut a tedious task from store workers’ to-do lists. Digital shelf labels are designed to save time, Walmart spokeswoman Cristina Rodrigues said. They have LED lights that blink to guide store workers who are restocking items or to help them find products for a customer’s online order. They eliminate the need for store workers to swap out traditional paper tags. She said Walmart has “no plan to change the frequency or implement different pricing methods.” She said all price changes will still be approved by the merchandising team. With the tech, a store worker has to stand in front of the shelf and use a mobile app to raise or lower the price, she said. Dubé of University of Chicago said the pushback comes from years of shoppers feeling ripped off by price increases. “Consumers’ automatic reaction is, ‘This sounds like yet another unfair thing firms are going to do to try and cheat us,’” he said. “The presumption is this is just another attempt to screw them over.” But he added dynamic pricing can have silver linings if restaurants and retailers pursue it. Prices can go down as well as up, he said. In Europe, for example, some grocery stores cut prices toward the end of the day to accelerate sales of baked goods or perishable items and reduce food waste. If Wendy’s lowered prices during slower times, he said customers could actually get cheaper meals. More price cuts, value meals But consumers don’t have to wait much longer to start seeing lower prices. As foot traffic declines for retailers and restaurants, some are leaning into value to bring back customers. Over the past couple of months, Target, McDonald’s, Aldi and others have stepped up price cuts and debuted new deals for customers. Walmart said it rolled back prices on nearly 7,000 items in its food categories in the first quarter of the year. Amazon-owned Whole Foods reduced prices over the last six months on about 25% of its items, including nearly 900 of its private label items. And a slew of fast-food chains, from McDonald’s to Starbucks to Burger King, have recently unveiled new value meals to drive sales. Consumer packaged goods companies are also reversing course as their volumes decline and investors fret over lagging sales. During Covid, companies like Mondelez stopped promotions as they focused on keeping up with demand and navigating supply chain snarls. But now Mondelez is one of the companies looking to bring back consumers with lower prices. The snacking company, which owns Oreos and Clif bars, is expecting a challenging year for its U.S. business, as low-income consumers buy its cookies and crackers less frequently. Mondelez executives said in June that they’re planning promotions for brands like Chips Ahoy!, which tends to lose ground to cheaper private-label options. The company also cut prices on some of its larger pack sizes. “The top priority is really to keep on growing the company and keep on delivering volume growth,” Mondelez CFO Luca Zaramella said at the Evercore ISI Consumer & Retail Conference last month. Kroger, which carries many of those items, has noticed that trend, too. Kroger CEO Rodney McMullen said on an earnings call in mid-June that brands are spending more of their own money to offer discounts to customers and drive more volume. And he said the level of promotions is similar to pre-pandemic. It remains to be seen whether companies can tamp down consumer outrage as the deals and discounts start to take hold.
Bank of England should keep interest rates on hold, says policymaker 2024-07-08 16:58:00+00:00 - A senior Bank of England policymaker has said Britain’s battle against inflation remains incomplete, requiring interest rates to be kept at elevated levels for longer than expected in financial markets. Pouring cold water on City predictions for a cut in rates in August, Jonathan Haskel said inflation was on course to return above the government’s 2% target. “I would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably,” said Haskel, a member of the Bank’s monetary policy committee (MPC), in a speech at King’s College London on Monday. While adding there were “encouraging signs” in the battle against fast-rising prices after a drop in the headline rate of consumer price inflation to 2% in May, he warned that the return to the official target set by the government would be temporary amid pressures from a tight jobs market. “The playing out of those shocks through the economy, and the continued tight and impaired labour market, means that inflation will remain above target for quite some time,” he said. Financial markets currently estimate there is a 60% chance the Bank will cut interest rates on 1 August for the first time since the Covid pandemic. While some members of the Bank’s nine-strong MPC have pushed for a cut in official borrowing costs over recent months, Haskel has voted to keep rates on hold. The economist, who will complete his term on the MPC at the end of August, has previously expressed caution over cutting rates, as one of the more hawkish members of the rate-setting panel. The appointment of his successor will fall to the new chancellor, Rachel Reeves, as one of her first tasks in government. In the first speech by one of the Bank’s policymakers since the general election, Haskel said the lingering impact from soaring energy prices after the Russian invasion of Ukraine had been “sufficient to impart momentum to current inflation”. UK inflation peaked at 11.1% in October 2022. “The labour market continues to be tight, and I worry it is still impaired. I would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably,” he said. 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 Rishi Sunak had argued before last week’s election that “difficult decisions” taken by his Conservative government had helped the economy “turn a corner”, making a pitch to the electorate that a vote for the Tories was a vote for lower interest rates. The former prime minister called the general election in May after official figures confirmed inflation had dropped to 2.3% in April, amid hopes in Tory circles that the Bank would cut interest rates in June, before the ballot. However, the central bank kept rates unchanged at 5.25% last month, having consistently warned that inflation was likely to rise later this year, amid pressure from rising prices in the service sector and resilient wage growth. Having shifted his party to the economic centre, Keir Starmer argued that Labour would bring stability to policymaking after years of turmoil under the Conservatives and boost economic growth as a result.
Right or wrong, Biden is the candidate Republicans want to face 2024-07-08 16:42:12+00:00 - In mid-January 2008, it was an open question as to who would win the Democratic Party’s presidential nomination. Republicans, however, had a preference. Writing at the time for National Review, Byron York reported on a Barack Obama campaign rally he attended in South Carolina with a Republican friend. Watching the candidate, seeing the crowd, and hearing the message, York’s Republican friend said at the time, “Oh, s--t.” The report added that some Republicans were hoping that Hillary Clinton would ultimately prevail because “running against the man on stage at the convention center would be a hard, hard campaign.” In other words, in 2008, Republicans took a long look at Obama and saw him as a formidable opponent. They were, for lack of a better word, scared that they just wouldn’t be able to defeat the Illinois Democrat — and those fears were proved true months later when Obama dispatched a popular and respected war hero with relative ease. Sixteen years later, it’s probably fair to say that Republicans aren’t scared at all of President Joe Biden. On the contrary, it appears their greatest fear is that the Democratic incumbent might be convinced to abandon his re-election plans. The Washington Post reported: Donald Trump and his campaign hope President Biden stays in the race, according to four people familiar with private discussions, believing they can beat him even with Trump’s felony conviction and other charges. ... Trump advisers were privately stunned at how poorly Biden performed, believing he would be a stronger debater, people familiar with the matter said. They have plenty of company. Republican National Committee co-chair Lara Trump insisted last week that if Democrats were to choose a new nominee, it would be an affront to the democratic process. Sen. Lindsey Graham of South Carolina argued soon after that Biden’s refusal to withdraw is “very good news” not just for Trump, but also for “the entire down-ballot Republican team.” In case that weren’t quite enough, the far-right Heritage Foundation has indicated that it’s eyeing steps that would make it “extraordinarily difficult” for Democrats to replace Biden on the general election ballot. There’s no great mystery here. The political dynamic is not subtle. In the wake of the presidential debate 11 days ago, Republicans and their allies have come to believe that Biden would be easier to beat in November than the other possible Democratic contenders. It’s at this point when the incumbent president’s allies are likely saying, “Yeah, but Republicans might very well be wrong.” The benefit of this response is that it’s true. Not only does Trump have terrible political instincts, but the GOP has been wrong about questions like these plenty of times before. In fact, it’s not especially unusual for partisan players and operatives — folks with extensive experience in professional politics — to embrace all kinds of false assumptions. In October 2016, a striking number of Republicans concluded that there was simply no way Americans would elect Trump to the presidency after the “Access Hollywood” recording reached the public. Those conclusions were mistaken, and Trump won soon after. It’s entirely possible that many of these same GOP officials, certain that Biden is simply unelectable, are wrong again. But as Democrats weigh their options, the fact that Republicans appear even more excited about Biden’s candidacy than many in the president’s own party seems like a relevant detail.
Don’t Miss These Stock Picks for the Lumber Price Surge 2024-07-08 15:57:00+00:00 - Some stocks depend on commodity prices for their success – or failure – and the main ones that come to mind may be inside the energy sector. If Warren Buffett chooses to buy an oil company, as he did through a nine-day buying streak in shares of Occidental Petroleum Co. NYSE: OXY, it may be because he sees a fundamental reason for oil prices to move higher and bring the company’s valuation up with it. Today, investors can step outside the most commonly watched commodities, such as oil and precious metals. While gold makes a breakout, taking silver along for a ride, some mining stocks can become an excellent space to watch today. But note that today’s soon-to-be hot commodity is the least expected: lumber. Get West Fraser Timber alerts: Sign Up That’s right, lumber prices crashed after their stratospheric rallies in 2020 through 2022, raising the cost of building homes. Today, there are reasons to believe that lumber could make a comeback soon, backed by housing and economic fundamentals. Because of this, investors can have their top pick between stocks like West Fraser Timber Co. NYSE: WFG, Weyerhaeuser NYSE: WY, and even Lennar Co. NYSE: LEN. Why Analysts' Downgrade of Lennar Stock Might Be Wrong Lennar Today LEN Lennar $142.63 0.00 (0.00%) 52-Week Range $102.90 ▼ $172.59 Dividend Yield 1.40% P/E Ratio 9.70 Price Target $166.69 Add to Watchlist Recently, analysts at Citigroup decided to lower their targets on Lennar stock from $174 a share to $164 a share, roughly a 6% decline in forecasted valuations. These analysts lowered their targets due to bearish expectations for the housing sector moving forward. Weaker readings in the national building permits, roughly 7% down on the year and 3.5% on the month, can be attributed to these bearish views. Lower building permits may indicate weaker housing demand and financial situations among homebuilders and would-be homebuyers. Lennar MarketRank™ Stock Analysis Overall MarketRank™ 4.82 out of 5 Analyst Rating Hold Upside/Downside 16.9% Upside Short Interest Healthy Dividend Strength Moderate Sustainability -1.81 News Sentiment 0.18 Insider Trading Selling Shares Projected Earnings Growth 12.81% See Full Details But that could be about to change. The Federal Reserve postponed interest rate cuts throughout 2024. Still, the CME’s FedWatch tool now sees over 60% probability for a rate cut as soon as September of this year. That could spark new housing demand as mortgage rates also come down. Cheaper mortgages could spark new housing demand. Now that lumber prices are back to normal, margins for newly built homes could help Lennar see better treatment from Wall Street analysts. In fact, some in the construction sector may be already aware of these coming trends. According to their second quarter 2024 earnings results, Lennar reports a 19% increase in new orders, bringing the total to 21,293 homes today. The company’s backlog is now worth up to $8.2 billion, and according to the latest employment situation report (NFP), out of the total 206,000 jobs added to the economy, roughly 27,000 (or 13%) jobs went to the construction sector. New hands are needed to respond to the potential demand breakout if and when the Fed cuts rates in September. The One Stock to Watch as Housing Demand Surges: West Fraser Timber West Fraser Timber Today WFG West Fraser Timber $74.68 -0.09 (-0.12%) 52-Week Range $64.11 ▼ $90.17 Dividend Yield 1.71% Price Target $106.25 Add to Watchlist Of course, analysts could be wrong about lowering Lennar’s price targets, but investors shouldn’t risk their capital on ‘what ifs’; rather, they can take a safer view on stocks that provide homebuilders with the main commodity they need, which is lumber. Because lumber prices are so low compared to their 2020-2022 peaks, the profit margin cycle is also lower for companies in the sector. Despite the cycle’s lows, analysts at TD Securities still see a price target of $118 a share for West Fraser Timber stock, daring it to rally by roughly 60% from where it trades today. West Fraser Timber MarketRank™ Stock Analysis Overall MarketRank™ 3.89 out of 5 Analyst Rating Buy Upside/Downside 42.3% Upside Short Interest Bearish Dividend Strength Weak Sustainability N/A News Sentiment 1.67 Insider Trading N/A Projected Earnings Growth 72.73% See Full Details But West Fraser Timber isn’t the only lumber provider in the block. Weyerhaeuser is also an honorable mention, but here’s how that stock compares to West Fraser. Wall Street analysts only forecast 17.2% earnings per share (EPS) growth for Weyerhaeuser in the next 12 months, where those covering West Fraser Timber see up to 72.7% EPS growth this year as well, backing up the upside set by price targets. On a valuation basis, this upside spread is just as evident. Trading at a 9.2x forward P/E multiple today, West Fraser Timber offers a discount of 61% to Weyerhaeuser’s 23.7x forward P/E valuation. If price action can be taken as another gauge of market sentiment, here’s what it looks like for both stocks. Weyerhaeuser stock traded down to 75% of its 52-week high price, showing investors some bearish momentum. On the other hand, West Fraser Timber stock has traded up to 83% of its 52-week high, spreading the two companies into bearish and bullish momentum separately. Before you consider West Fraser Timber, 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 West Fraser Timber wasn't on the list. While West Fraser Timber currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Despite reality, Trump tries to distance himself from Project 2025 2024-07-08 15:28:30+00:00 - In recent weeks, President Joe Biden’s re-election campaign and its allies set out to inform the public about Project 2025 — a right-wing policy agenda being crafted by The Heritage Foundation, with the assistance of several prominent Donald Trump associates. The Democratic incumbent’s campaign website created a page dedicated specifically to the governing blueprint and promoted it via social media in the hopes of getting the word out. The push caught on. Not only has it become more common to see “Google Project 2025” messages online, but as my MSNBC colleague Ja’han Jones recently noted, the right-wing plan also became “the talk of the Black Entertainment Television Awards” after host Taraji P. Henson “made multiple references to it.” By Friday, it reached the point that the presumptive Republican presidential nominee decided to issue a brief statement about it by way of his social media platform: I know nothing about Project 2025. I have no idea who is behind it. I disagree with some of the things they’re saying and some of the things they’re saying are absolutely ridiculous and abysmal. Anything they do, I wish them luck, but I have nothing to do with them. There are, of course, a few glaring problems with Trump’s pushback. The first is the flawed logic: On the one hand, the former president would have the public believe he doesn’t know anything about Project 2025. On the other hand, Trump believes some of the provisions in the right-wing document are “absolutely ridiculous and abysmal” — suggesting he does know at least something about it. The second problem is that it’s impossible to take seriously. Popular Information’s Judd Legum published a detailed takedown on this, highlighting the lengthy list of people from Trump’s own team who co-authored the Project 2025 document. “I literally don’t have enough time to list every connection between Donald Trump and Project 2025,” MSNBC’s Ali Velshi told viewers over the weekend. “But I can absolutely confidently say that Donald Trump’s claim that he ‘knows nothing about Project 2025’ and has ‘no idea who is behind it’ is, how do we say it in Canada? Complete and utter BS.” But I’m also struck by the larger context: Trump wouldn’t have bothered to publish a denial unless he was concerned that Democrats’ focus on Project 2025 was gaining traction. In other words, the efforts to make Project 2025 a real campaign issue are having the intended effect, and it’s making the former president nervous.
Target will stop accepting personal checks 2024-07-08 15:26:00+00:00 - Target will soon stop accepting personal checks as a form of payment at checkout. In a statement to NBC News, the retail giant said it was committed to creating an easy and convenient checkout experience — but that due to "extremely low volumes," it would no longer take personal checks starting July 15. It said it has taken several measures to notify guests in advance of the move. It will still accept cash; digital wallet payments like Apple Pay; SNAP/EBT; buy now, pay later services; and credit and debit cards. Rival Walmart will still accept personal checks. Target has announced several new store policies aimed at streamlining the checkout process, some of which were also aimed at curbing theft. In March, the company said it would be taking steps to limit or eliminate self-checkout options at some stores this year. Last month, Bloomberg News reported that Target was allowing employees to stop thefts of $50 or more — lower than the previous $100 threshold.
3 Highly Profitable Companies Set for Double-Digit Upside 2024-07-08 15:15:00+00:00 - Most investors fail to realize that a stock price has nothing to do with the underlying company, as more than 90% of the time, there is a wide gap between value and price. How come businesses like PepsiCo Inc. NASDAQ: PEP, which have a solid global presence with sales coming in almost auto-pilot mode, are trading at 5% over its 52-week low price? That’s the sort of gap savvy investors dream of catching with great businesses, as it is almost a sure profitable investment. Investors can also take the example of Home Depot Inc. NYSE: HD, one of the strongest home renovation brands in the United States. That company has fallen to trade within 23% of its 52-week low on an unjustified fear of weakness within the consumer discretionary sector. Even athleisure favorite Lululemon Athletica Inc. NASDAQ: LULU is now beaten to a new 52-week low, following the same fearful behavior that savvy investors can exploit today. Get Zillow Group alerts: Sign Up Of course, there is always a good reason why markets send stock crashes down, and often, these reasons are justified. But that’s not going to be the case today. Investors will find out why these stocks can be sensible watchlist additions today, especially when digging into the fundamentals, where the unwavering profitability of these companies stands the test of the market’s emotional swing. Home Depot Is About to Give Investors a New Reason to Buy Stock Notice that stocks like Zillow Group Inc. NASDAQ: Z have taken off in the past two months as markets leaned on the news that U.S. listings rose for the first time in a few quarters. With listings on the rise and building permits decreasing by 7% on the year and 3.5% on the month, the real estate sector is starting to look like a bottom in the making. Home Depot Today HD Home Depot $339.60 +5.02 (+1.50%) 52-Week Range $274.26 ▼ $396.87 Dividend Yield 2.65% P/E Ratio 22.78 Price Target $378.42 Add to Watchlist What this means for Home Depot is increased demand, as home improvement and renovation activity takes off for sellers getting their homes ready to hit the market or new home buyers looking to design their new homes just how they want them. More than that, investors now have a timetable that they can follow in anticipation of this event. CME’s FedWatch tool now prices over a 60% probability of the Federal Reserve (the Fed) cutting interest rates as soon as September 2024. This would also lower mortgage rates, sparking housing demand. So, why pick Home Depot? For starters, analysts at Evercore felt comfortable slapping a valuation of $420 a share for Home Depot stock, daring it to rally by as much as 24.1% from where it sits today. Second, the company’s financials have a few factors to add to the potentially bullish case. Home Depot’s gross margins are above 33%, enabling more capital to reach the bottom line for management to generate more capital. How much is management generating? Return on invested capital (ROIC) rates of 32% show investors how Home Depot stock could be one of the best picks to compound their wealth at a discount. Lululemon Stock Hits 7-Year Low Valuation, Attracting Institutional Investors That’s right, shares of Lululemon are now trading at a P/E ratio of 23.8x today, a valuation not seen since 2017, making it a new 7-year low valuation that savvy investors can exploit today. But, as always, Wall Street beat Main Street to the curb. Lululemon Athletica Today LULU Lululemon Athletica $294.03 -4.11 (-1.38%) 52-Week Range $293.03 ▼ $516.39 P/E Ratio 23.58 Price Target $431.94 Add to Watchlist The Vanguard Group decided to boost its stake in Lululemon stock by 1.6% as of May 2024. This boost increased the asset manager’s net investment to $3.9 billion, a vote of confidence that Lululemon is not in trouble. Analysts at Robert W. Baird reiterated an ‘outperform’ rating on Lululemon stock, with a price target of $470 a share, or 57.8% from where the stock traded. Lululemon’s financials, particularly its profit margins, back Wall Street's confidence. A 58.3% gross margin is high enough for Lululemon’s management to duplicate the ROIC rates achieved by those at the Home Depot. For Lululemon, ROIC stands under 30%, making it another excellent choice for investors to compound their wealth on a potential dip-buy. Why Pepsi Stock's Dividend Makes the Dip Worth Watching Inflation today is a concern slowing down the potential interest rate cuts that – as discussed – could come by September 2024. So, one thing investors can add to their filtering criteria is a high enough dividend yield to cushion this sticky inflation rate today. PepsiCo Dividend Payments Dividend Yield 3.34% Annual Dividend $5.42 Dividend Increase Track Record 53 Years Annualized 3-Year Dividend Growth 7.12% Dividend Payout Ratio 81.50% Recent Dividend Payment Jun. 28 See Full Details PepsiCo stock fits that profile, as its $5.4 a share payout would translate into an annual dividend yield of 3.3%, roughly matching inflation but also beating the latest U.S. GDP growth rate, revised to 1.3% in the past quarter. Analysts at Jefferies Financial Group slapped a $211 a share valuation for PepsiCo stock, and to prove them right, the stock needs to rally by 29.3% from where it trades today. Encouraging the stability of these dividends and the upgrades from Wall Street comes the company’s financials. A 54% gross margin allows management to replicate what investors have seen in Lululemon and Home Depot, this time generating 17.3% ROIC rates for PepsiCo. DekaBank Deutsche, PepsiCo’s largest shareholder, used these factors to justify a 6.1% boost in its position, bringing its net investment in PepsiCo stock to $480.5 million. Before you consider Zillow Group, 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 Zillow Group wasn't on the list. While Zillow Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
A Wall Street Law Firm Wants to Define Consequences of Israel Protests 2024-07-08 15:09:13+00:00 - For as long as students at colleges across the United States have protested the war in Gaza, they’ve drawn the fury of some of the financial world’s mightiest figures — investors, lawyers and bankers — who have flexed their financial power over universities, toppling school leaders in the process. It didn’t stop the students. The protests intensified this year until campuses emptied out for the summer. Now, a prominent Wall Street law firm is taking a more direct approach with protesters. Sullivan & Cromwell, a 145-year-old firm that has counted Goldman Sachs and Amazon among its clients, says that, for job applicants, participation in an anti-Israel protest — on campus or off — could be a disqualifying factor. The firm is scrutinizing students’ behavior with the help of a background check company, looking at their involvement with pro-Palestinian student groups, scouring social media and reviewing news reports and footage from protests. It is looking for explicit instances of antisemitism as well as statements and slogans it has deemed to be “triggering” to Jews, said Joseph C. Shenker, a leader of Sullivan & Cromwell.
Top Oil Stocks Primed to Surge Ahead of Buffett's Occidental Move 2024-07-08 15:06:00+00:00 - In today's environment, the lion’s share of market attention is focused on two main things. First, most have headed to the technology sector, particularly stocks like NVIDIA Co. NASDAQ: NVDA, exposed to the hype around artificial intelligence expansion and adoption throughout the global economy. The second area commanding the most market attention is the promise of interest rate cuts from the Federal Reserve. What investors are missing in this equation is the coming cycle, and by cycle, this means the business cycle, which also happens to drive the commodity cycle just as much. The main commodities that lead the cycle are precious metals like gold and silver, which have recently made record annual highs and are drawing attention to mining stocks as potential winners. However, the second-most common commodity is still lagging: oil. Get Occidental Petroleum alerts: Sign Up Struggling to break above the recent $85 to $95 price per barrel channel, oil prices now have a reason to break above this ceiling, all due to solid fundamental trends developing in the background. The next leg in the business cycle will likely call on stocks like Williams Companies Inc. NYSE: WMB and Expro Group Holdings NYSE: XPRO, giving them reasons to rally before others in the energy sector. Buffett’s Choice is Good, But These Two Stocks Are Better After a nine-day buying streak, Warren Buffett now owns up to 29% of all stock in Occidental Petroleum Co. NYSE: OXY. Of course, Buffett understands that the prospect of interest rate cuts in the next quarter could push demand for oil as things like travel, construction, and manufacturing become cheaper or more in demand for the global economy. There are enough reasons to agree with this pick, one being Wall Street analyst forecasts for 27.8% earnings per share (EPS) growth in the next 12 months for Occidental stock. Backed by these growth rates, analysts at Susquehanna boosted their valuations on the stock to $81 a share, or 31% higher than today's stock price. But Occidental is part of the second link of the energy sector's value chain: the integrated business. Before oil can be refined and integrated into other products, it needs to be produced through exploration and then transported through pipelines. This is where stocks like Williams Companies and Expro Group come into play, as they deal in these sectors, so the corporate profit (EPS) value chain favors these two before any profit gain makes its way to Occidental Petroleum. Investors can check this very fact by spreading Wall Street analyst forecasts. Why Expro Holdings Commands a Premium Valuation Over Peers Expro Group Today XPRO Expro Group $22.50 0.00 (0.00%) 52-Week Range $14.33 ▼ $25.04 Price Target $27.25 Add to Watchlist Expro Holdings projection lies at roughly 36.9% EPS growth for the rest of the year. Those at J.P. Morgan Chase & Co. see a price target of up to $30 a share, daring it to rally by as much as 33.3% from where it trades today; keep in mind that these targets haven't been changed since September 2023, and no news is sometimes good news. More than that, investors can gauge market sentiment through how much premium a stock's future earnings commands compared to peers. Occidental Petroleum trades at a forward P/E ratio of only 12.5x today, falling significantly below these other production stocks. Conversely, Expro trades at a 17.5x valuation, which is also a premium of 40% over Occidental Petroleum. Expro Holdings stock has seen roughly $281.6 million of institutional capital inflow over the past 12 months, bringing the level of ownership up to 92.1%. This means the stock has now become a high-stakes game for these asset managers to maintain and defend. Expro Group Holdings (XPRO) Price Chart for Monday, July, 8, 2024 Williams Companies' Strong Valuation and Income Potential Williams Companies Today WMB Williams Companies $42.35 -0.13 (-0.31%) 52-Week Range $32.49 ▼ $43.22 Dividend Yield 4.49% P/E Ratio 17.79 Price Target $41.42 Add to Watchlist Moving to Williams Companies, valuations and price actions are a better way for investors to gauge the market's reaction to the stock today. The stock trades at a new 52-week high, while Occidental Petroleum trades at only 87% of its 52-week high level. Williams Companies trades at a forward P/E multiple of 20.8x today, a premium of nearly 100% over Buffett's top choice. Investors can look for other stamps of quality when approving a potential addition to a future watchlist, some of which can be found in the way institutions regard these companies as well. Williams Companies' annual payout of $1.9 per share offers an attractive income for investors. With a dividend yield of 4.5%, it outpaces current U.S. inflation and prospects for GDP growth. Compare this to Occidental Petroleum, which only offers a 1.5% dividend yield and a much lower 88.7% institutional ownership rate. The Williams Companies, Inc. (WMB) Price Chart for Monday, July, 8, 2024 Harnessing Potential in Overlooked Energy Stocks As investors navigate today's market, attention often gravitates towards tech and interest rate changes. However, considering the business cycle and commodity trends reveals overlooked opportunities. Stocks like Williams Companies Inc. and Expro Group Holdings stand to benefit from the next phase in the energy sector. While Warren Buffett's investment in Occidental Petroleum highlights potential in oil, these upstream stocks offer stronger growth prospects and better valuations. With robust institutional support and attractive yields, Williams Companies and Expro Group present compelling cases for inclusion in any forward-looking portfolio. Before you consider Occidental Petroleum, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Occidental Petroleum wasn't on the list. While Occidental Petroleum currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Amazon's Asian rival Shein wants to be supply chain giant, but some fear Chinese cyber spying inside global trade links 2024-07-08 14:59:00+00:00 - The rise of Asian fast fashion retailer Shein already has Amazon on alert, but its plans of selling proprietary supply-chain technology and services to companies around the world has attracted attention from another corner: U.S. cybersecurity firms and national security experts who warn of the potential for a company with close ties to China spying on the supply chain as it seeks to grow its global logistics footprint. Shein logistics software is in beta testing with select supply chain customers, according to a person familiar with its plans. The U.S. supply chain has millions of connection points that link companies of all sizes. What makes the connections hum are application programming interfaces, or APIs, used by companies to increase efficiencies and save money. API software allows applications to communicate with each other in real-time and is crucial to logistics companies to integrate with freight providers, streamline operations, and create efficiencies for providers in their supply chain and ultimately, the end customer. “The APIs in the logistics infrastructure are very interconnected, often without cybersecurity being contemplated,” said Lee Kair, principal and head of the transportation and innovation practice at The Chertoff Group, who formerly served as a top official at the Transportation Security Administration. Cybersecurity experts and policy analysts say the supply chain of vendors is constantly changing, and the potential to gain data access is as simple as identifying the weakest link in a company’s data network. Typically, small companies have more vulnerable back-office systems, with weaker cyber protocols. “There is a tremendous amount of logistics integration in the world of fast fashion. These integrations can be compromised for nefarious purposes to expose customer data or compromise other connected systems,” Kair said. According to data from Exiger, a supply chain intelligence intelligence company used by the U.S. government and critical infrastructure industries for risk management, there is a complex web of entities connected to Shein which indicates the company’s supply chain is more expansive and complex than most people realize. Exiger data shows that while Shein has 44 direct relationships, such as with its parent company Zoetop, and discloses over 5,000 suppliers, an analysis of all of its materials producers shows a supply chain connectivity map that expands substantially. In all, 10,821 companies comprise a supply chain one tier away from Shein. Drilling down deeper into that network of those Shein partners, it expands to 50,000-plus entities, including major U.S. companies, such as Forever 21, operated by Authentic Holdings and mall operator Simon Property Group — both of which announced formal partnerships with Shein last year focused on access to bricks-and-mortar retail. Allowing Shein to embed its technology within U.S. supply chains could undermine the competitive landscape, violate regulatory standards, and introduce a host of risks, including cybersecurity, said Dewardric McNeal, managing director and senior policy analyst at Longview Global, who served as a policy expert on Asia for the Obama administration’s Department of Defense. “Given the intricate nature of the U.S. and global supply chains, the potential for espionage or data gathering is a significant risk,” McNeal said. “Shein’s software could provide unprecedented access to sensitive supply chain data, which the Chinese government could seize under its laws. This exposure poses a direct threat to U.S. supply chain integrity, making it vulnerable to exploitation and manipulation.” Shein has made moves to distance itself from Chinese affiliations. In 2022, Shein moved its headquarters from China to Singapore for regulatory and financial reasons. However, the company’s supply chains and warehouses are still in China. “The concern of any company with significant Chinese ownership and physical presence is the legal framework in China,” Kair said. “Chinese law requires the company’s cooperation in providing sensitive information related to U.S. citizens to the Chinese government. Even with a headquarters based in Singapore, company supply chain data could be subject to seizure by the Chinese. This is a clear vulnerability of U.S. customer data.” Kair referred to the moving of the company’s headquarters from China to Singapore to ease regulatory scrutiny as another example of the practice known as “Singapore washing.” There are certifications in place for companies to prove their information security controls meet accepted corporate standards, including a SOC2 Type II Report created by a third party auditing firm to examine a company’s internal controls and how well they safeguard customer data — an audit that can take several months or more. The other primary certification is an ISO 27001 certification, which is the international industry standard for information security management systems, and its extension, ISO 27701 — both of which Shein says are among its implementation of industry standard controls to protect customers’ data. “We try to limit our data collection to the minimum amount of information necessary to process commercial transactions,” Shein said in a statement to CNBC. “We have built systems in accordance with leading data protection frameworks such as the International Standards Organization’s standard 27001 and 27701,” it stated. The International Standards Organization, which maintains ISO standards, explained by email that it does not carry out any certifications, which are issued independently of ISO by the various national and international certification bodies operating around the world. “As such, the ISO Central Secretariat doesn’t have a database of these certifications,” it wrote. Certified companies have an obligation to inform customers of the name of the organization having issued the certificate, and verification of certification should be addressed to that certification organization. CNBC searched the ISO’s IAF CertSearch database to find a certificate for Shein or its parent company Zoetop, but no certificate validation was found. Shein told CNBC that it has the relevant certifications from third-party auditors. Storing sensitive data locally To allay national security concerns, Shein has set up data storage in respective markets. It stores U.S. customer data within Microsoft U.S.-based Azure cloud and AWS US-based cloud. In the EU, customer data is stored in Frankfurt, Germany. Payment data is not collected by the company in the U.S., but by American payment processing company, Worldpay, which is majority owned by public equity firm GTCR. The data stored in China covers its industrial supplier management and digital merchant system, which facilitates the transactions from garment raw materials — ancillary materials like buttons, zippers — in moving the product in China. Ram Ben Tzion, co-founder and CEO of Publican, a digital vetting platform for global trade, tells CNBC it is possible for Shein, and the Chinese government, to misuse supply chain and consumer data. He says the effort to raise Shein’s profile as a global logistics provider is directly related to the intensifying economic battle between the U.S. and China. “You are now seeing this new business service being offered,” said Ben Tzion. “Pushing Shein as a logistics company is a response or retaliation to the U.S. tightening up everything outsourcing from China,” he said. “This is a way for China to regain a hold on the global supply chain,” he added, referring to the flow of trade away from China, and Chinese giants finding it difficult to raise capital in the U.S. market. Shein’s manufacturing and supply chain infrastructure has also presented legal issues for partners and political blowback in the U.S. related to the longstanding international issue of forced labor in China. The source familiar with Shein’s operations said it is in compliance with policies from Social Accountability International, an NGO that sets strict international fair labor standards. McNeal said there are significant concerns about Shein’s supply chains being deeply intertwined with forced labor from Xinjiang Province in potential violation of the Uyghur Forced Labor Protection Act. “Supporting a company with such links contradicts U.S. regulatory efforts and ethical standards and could increase scrutiny from the Department of Homeland Security’s, Customs and Border Patrol and the UFLPA Entities List Office,” he said. Shein’s planned U.S. IPO is considered “all but dead,” with several powerful political figures in the nation’s capital among those who sought to block it for reasons including its supply chain issues and use of trade loopholes (Shein is now pursuing a potential London listing instead). Shein has also been spurned by the U.S. retail industry’s largest trade group, into which it sought membership. Shein’s cybersecurity protocols have previously come under fire. In October 2022, the New York Attorney General fined Shein, its affiliate Romwe, and parent company Zoetop for $1.9 million over its handling of a 2018 data breach in which 39 million Shein accounts and seven million Romwe accounts were stolen, including accounts for more than 800,000 New York residents. “Data ownership and protecting against cybersecurity threats are absolutely essential in the context of global supply chains,” said Srini Cherukuri, vice president of IT infrastructure & chief information security officer at ITS Logistics. “Conducting due diligence of data security and privacy practices of everyone in the supply chain is crucial to protecting against cybersecurity attacks, mitigating impacts, and optimizing the recovery time of business operations.” Shein's fast rise to dominance Shein’s dominance lies in the company’s hyper-flexible supply chain, according to a recent report from supply chain intelligence firm Zero100. It found that using over 5,400 nearby factories in Guangzhou for micro-batch production, the company is able to work with rapi design-to-delivery cycles, lower production costs, and minimize inventory risk. Led by founder Chris Xu’s deep knowledge of SEO and online marketing, Shein has also developed a data-driven approach to fuel its growth. Integrating continuous, real-time AI data across its marketplace platform, Shein enables “dynamic demand-supply matching, data-driven trendspotting, and algorithmic supplier selection, with AI outputs feeding into subsequent models for comprehensive decision-making across the value chain,” Zero100 stated. That supply chain efficiency is being hailed as a positive, but Ben Tzion said that smaller manufacturers and social media influencers should understand that China’s effort to push Shein as a logistics company “is an attempt to distance itself from the liabilities associated with its trade practices and push it on to smaller business owners.” Using Shein for logistics also means giving up all control of their supply chain and followers. “It is a safe assumption to say using a third-party like Shein for manufacturing and production will give Shein complete access to all company information, as well as its consumers and followers’ shopping habits,” he said. Fast fashion's trip from manufacturing to market Logistics services tied to production of items like sneakers and apparel in Asia require multiple supply chain touchpoints. “The average touch point for a sneaker and apparel is 5.6,” said Eric Fullerton, senior director of product marketing for supply chain research firm Project44. “These shipments on average use three out of four modes of transportation [ocean, rail, truck, air].” According to Project44′s analysis, sneakers and apparel travel an average of 42% around the world during the manufacturing process. The average distance traveled from the factory to the distribution center is 9,630 miles. That is long enough to walk back and forth across the United States nearly four times. The average shipment travels through 8.4 states in the US. “If you are an old school retailer, you don’t want to give your sales, inventory, geographic strategy to a fast fashion competitor that could make a knockoff product,” Fullerton said. “In a supply chain crisis, would Shein prioritize the supply chain fulfillment of a competitor or would they prioritize their own? In a retail world of razor-thin margins, more organizations see supply chain efficiency as a way to win the battle of the purse strings. “Not only would Shein be able to knock off the product, but they would also be able to identify the region where it is selling and for how much,” Fullerton said. “This supply chain data would provide Shein with the ability to see a company’s distribution strategy.” Risky reliance on China Amassing supply chain data makes sense for Shein from both financial and strategic standpoints, according to McNeal. “Purchasing this software provides Shein with an additional revenue stream, thereby strengthening its financial position and competitive edge in the market,” he said. In addition, using Shein’s supply chain services and software, foreign companies grant it access to their data. “This access enables Shein to enhance its AI and algorithmic models, leading to more efficient operations and better market intelligence for Shein,” McNeal said. That may ultimately place firms at odds with a growing Asian retail and logistics giant. “This makes foreign firms vulnerable to over-reliance on a competitor, potentially compromising their own ability to harness and use their data and strengthen their supply chain and logistics operations.” Shein’s rapid rise has led Amazon to deepen its own ties within China. CNBC recently learned that Amazon plans to launch a new section on its site dedicated to low-priced fashion and lifestyle items that will allow Chinese sellers to ship directly to U.S. consumers. In December, Amazon announced a new “innovation center” in Shenzhen, a popular technology and manufacturing hub, and it also slashed the fees it charges merchants selling clothing priced below $20. Meanwhile, the U.S. government has a close eye on companies with ties to China and where supply chains or data relationships are a national security issue, Kair said. “The scrutiny on Shein by U.S. regulators and legislators is consistent with their supply chain and data security concerns of other companies such as TikTok, DJI drones, and manufacturers of cranes operated in U.S. ports.” A Department of Transportation spokesperson referred CNBC to the Commerce Department and the National Security Council. A Department of Commerce spokesperson wrote in an email that it is, “committed to protecting U.S. information and communications technology supply chains. We will continue to proactively identify and mitigate vulnerabilities in the U.S. ICTS supply chain and safeguard our national security.”
Arm Holdings Stock Soars: Powering the Edge AI Revolution with v9 2024-07-08 14:39:00+00:00 - U.K.-based semiconductor company Arm Holdings plc NASDAQ: ARM stock is up 141% year-to-date (YTD). The artificial intelligence (AI) revolution is driving big gains as it becomes more apparent that Arm will continue to be a large benefactor from AI tailwinds. While Arm is a semiconductor company, it doesn’t actually manufacture computer chips. Instead, it designs, develops, patents its architectures, licenses them, and collects royalties. It’s the ultimate asset-light business model. The migration of AI to the Edge is a boon for Arm Holdings as its architecture enables more power-efficient chips. Arm Holdings operates in the computer and technology sector and competes with Synopsis Inc. NASDAQ: SNPS, Advanced Micro Devices Inc. NASDAQ: AMD, and Intel Co. NASDAQ: INTC, which use x86 architecture. Get ARM alerts: Sign Up The ARMv9 Revolution Has a Long Runway Its latest iteration, ARMv9, has many features that help optimize AI and machine learning (ML) processes, including scalable vector extensions (SVE2), scalable matrix extensions (SME), and confidential computing architecture (CCA). ARMv9 isn’t just a single monolithic architecture but a rolling program of enhancements released over time. As AI moves closer to the Edge with PCs, laptops, smartphones, and mobile devices, more companies are licensing ARMv9. Most importantly, the royalty rates are double those of earlier versions, which sets Arm up for bountiful future gains for years to come. NVIDIA is a Customer, Partner and Investor Its v9 architecture will gradually gain market share in the PC segment as its v8 dominates smartphones. NVIDIA is synonymous with AI chips. It can’t produce its H100 GPU fast enough to keep up with demand. Its next-generation GH200 Grace Hopper Superchip licenses ARMv9 architecture. ARM CPU and NVIDIA's GPU on Grace Blackwell are anticipated to eat into the x86 market share in the data center server market as they roll out in 2026. NVIDIA is not only a big Arm CPU architectures licensor but also an Arm Holdings investor. AI Moves Closer to the Edge Edge computing refers to processing that occurs closer to where it is generated at the network's edge. Traditionally, data is collected and processed at a centralized data center. Edge computing processes the data closer to the source of the data through gateways and edge servers, which speeds up the process. The same holds true for AI. When you use an AI application like ChatGPT, your queries are sent to centralized servers that process your request and push back results. Edge AI enables processing to be done on devices like PCs, laptops, and smartphones. It brings the processing power directly onto your devices—AI in the palm of your hand, literally. The benefits are low latency since the data doesn't have to travel so far, less bandwidth, offline functionality that doesn't require an internet connection, and enhanced security as sensitive data is processed locally. ARM Stock Triggers a Bull Flag Breakout The daily candlestick chart on ARM triggered a bull flag breakout as shares surged through the peak of the flagpole to new all-time highs. The flagpole formed after triggering a market structure low (MSL) breakout above $94.00 on April 23, 2024. ARM surged to a flagpole peak at $177.31 before pulling back in a parallel channel of lower highs and lower lows. The breakout formed when ARM surged through the upper descending trendline at $170.66. The daily relative strength index (RSI) is bouncing back up through the 70-band. Pullback support levels are at $164.00, $149.50, $135.41, and $121.38. Arm’s Royalty Cycle is Accelerating Arm reported fiscal Q4 2024 EPS of 36 cents, beating consensus estimates by 6 cents. Revenues surged 46.6% YoY to $928 million, crushing $866 million consensus analyst estimates. Royalties rose 37% YoY, driven by v9 adoption. It was licensing for 60% YoY. Google has licensed ARMv9 for its custom Axion processor for use in data centers. Arm Raised Fiscal 2025 Guidance Arm issued upside guidance for fiscal Q1 2025 EPS of 32 cents to 36 cents versus 31 cents consensus estimates. Revenues are expected between $875 million to $925 million versus $866 million consensus analyst estimates. Full-year 2025 EPS is expected between $1.45 and $1.65, versus the $1.54 consensus estimate. Full-year 2025 revenues are expected between $3.8 billion and $4.1 billion versus $3.98 billion. The company expects to have over 100 billion ARM devices ready for AI by 2025's end. Arm CEO Rene Haas commented, “What we are seeing is because ARM has the largest installed base of CPUs on the planet and has over 70% of the world's population using those CPUs. It's natural that as these AI workloads are now being moved from anywhere from the edge devices to the training data center, they need support from an ARM CPU standpoint. So whether it's from cloud Edge from GPT to Llama, all AI workloads rely on and run on ARM, and we only see this increasing. Arm Holdings analyst ratings and price targets are at MarketBeat. 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
U.S. Creates High-Tech Global Supply Chains to Blunt Risks Tied to China 2024-07-08 14:30:48+00:00 - If the Biden administration had its way, far more electronic chips would be made in factories in, say, Texas or Arizona. They would then be shipped to partner countries, like Costa Rica or Vietnam or Kenya, for final assembly and sent out into the world to run everything from refrigerators to supercomputers. Those places may not be the first that come to mind when people think of semiconductors. But administration officials are trying to transform the world’s chip supply chain and are negotiating intensely to do so. The core elements of the plan include getting foreign companies to invest in chip-making in the United States and finding other countries to set up factories to finish the work. Officials and researchers in Washington call it part of the new “chip diplomacy.”