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Tag: Banking/Credit

  • Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

    Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

    U.S. stocks ended sharply higher Friday, more than shaking off weakness seen the previous session in the aftermath of a poor Treasury bond auction and fresh signs that interest rates may stay higher for longer.

    Technology stocks drove the bounce, with the Nasdaq Composite leading major indexes to the upside as it and the S&P 500 logged their highest finishes since September.

    What happened

    • The Dow Jones Industrial Average
      DJIA
      rose 391.16 points, or 1.2%, to close at 34,283.10.

    • The S&P 500
      SPX
      ended with a gain of 67.89 points, or 1.6%, at 4,415.24.

    • The Nasdaq Composite
      COMP
      advanced 276.66 points, or 2%, to finish at 13,798.10.

    The rally left the Dow with a weekly gain of 0.7%, while the S&P 500 advanced 1.3% and the Nasdaq booked a rise of 2.4%. The Dow saw its highest close since Sept. 20, while the S&P 500 ended at its highest since Sept. 19 and the Nasdaq at its highest since Sept. 14.

    Market drivers

    Tech was in the driver’s seat. Shares of Microsoft Corp.
    MSFT,
    +2.49%
    jumped 2.5%, with the Dow component scoring its third record close in four sessions. Intel Corp. shares
    INTC,
    +2.80%
    rose 2.8% to lead Dow gainers.

    Meanwhile, the S&P 500 tested important chart resistance at the 4,400 to 4,415 level, which marks the confluence of previous resistance and the 61.8% Fibonacci retracement of the July-October drop, according to Matthew Weller, global head of research at Forex.com, in a note (see chart below).


    Forex.com

    “From a bigger picture perspective, bulls will need to see the index conclusively break above 4415 before declaring that the post-July streak of lower lows and lower highs is over,” Weller wrote.

    The S&P 500 and Nasdaq Composite ended their longest winning streaks since November 2021 on Thursday, after a poorly-received $24 billion sale of 30-year Treasury bonds.

    A calmer bond market may have helped set the tone for stocks. The yield on the 30-year Treasury bond
    BX:TMUBMUSD30Y
    fell 3.2 basis points to 4.733%, after it nearly notched its biggest one-day jump since June 2022. The yield still saw a weekly decline, its third straight.

    It was unclear whether the Treasury auction had been affected by a reported ransomware attack against the U.S. unit of the Industrial & Commercial Bank of China that apparently disrupted the U.S. Treasury market.

    See: How ransomware attack on ICBC rattled the Treasury market and shook up a 30-year bond auction

    Thursday’s setback was also tied to comments from Federal Reserve Chairman Jerome Powell, who told an International Monetary Fund panel on Thursday that the central bank was wary of “head fakes” from inflation, and the “2% goal was not assured.”

    Much of Powell’s language was nearly identical to remarks he made on Nov. 1, when investors rallied stocks and bonds after the Fed chair didn’t explicitly commit to a further interest rate hike. But the subsequent rally for stocks after the Nov. 1 Fed meeting, with the S&P 500 jumping more than 6% over eight days, and a 50 basis point drop in the 10-year Treasury yield were “overdone and not governed by facts,” said Tom Essaye, founder of Sevens Report Research, in a note.

    “Meanwhile, if we think about what the Fed said last week, namely that the rise in the 10-year yield was doing the Fed’s work for it and as a result they may not have to hike rates, then the short/sharp decline in the 10-year yield we’ve seen could essentially remove the reason for the Fed not having to hike rates — and that could put a rate hike back on the table!” he wrote. “That’s essentially what Powell reminded us of yesterday and that, along with the poor Treasury auction, pushed yields higher,” setting up pressure on stocks.

    U.S. consumer sentiment fell in November for the fourth month in a row due to worries about higher interest rates as well as war in the Middle East. The preliminary reading of the sentiment survey declined to 60.4 from 63.8 in October, the University of Michigan said Friday. It’s the weakest reading since May.

    Investors were also tuning into more comments by Fed officials Friday, including San Francisco Fed President Mary Daly, who said she didn’t know if rates were high enough to bring inflation back down to the central bank’s 2% target.

    Companies in focus

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  • Here’s how to use the new tax-bracket information for 2024 to lower your tax bill

    Here’s how to use the new tax-bracket information for 2024 to lower your tax bill

    When it comes to managing your taxes, where you fall in one of the seven progressive tax brackets is the key to understanding how much you’re going to end up paying when you file your return.

    The Internal Revenue Service announced new inflation-adjusted brackets for 2024 on tax rates that go from 10% to 37%. The dollar amounts of income separating the bands run from as little as $11,600 to more than $365,000, for those filing single, with similar ratios for those married filing jointly. 

    You can pay no attention to this at all, and just let your tax preparer or software figure out the math for you. Or you can delve into the details and potentially reduce the amount you owe. 

    A progressive tax system means you don’t pay the top rate on your whole income. Instead, you pay the rates for each band in a row as you go up the income ladder. If your taxable income as a single filer is $11,600 in 2024, you’ll pay 10% on the entire amount. Anything above that, and you pay the 10% tax on that first chunk, and then add each additional band on top of it.

    Next year, for instance, if you have taxable income of more than $609,350, that puts you in the 37% bracket. You’ll pay $183,647.25 — the stacked combination of the 10%, 12%, 22%, 24%, 32% and 35% brackets — plus 37% of the excess over $609,350. 

    To figure out where you fall on the spectrum, you just need to estimate your 2024 taxable income or extrapolate from your previous tax returns. You can see the full tax-bracket charts here. 

    This may seem like just a curiosity for those with straightforward income, but you’ll need to pay close attention if you’re planning any atypical financial moves, such as a retirement, a conversion from a 401(k) to a Roth IRA or the sale of a business or significant piece of property. 

    “Everyone seems to care about tax brackets,” says Sri Reddy, the senior vice president of retirement and income solutions at Principal Financial Group. “But I wouldn’t tell you to worry about it. You should make as much money as you want, because you get to keep some portion of it. I’d just rather have you have an awareness of what it might mean to you.”

    Here’s where tax-bracket management matters most: 

    Retirement savings

    You can know your tax bracket now, but you don’t know what it will be in the future. Your retirement savings are stuck in the middle. 

    Should you pay tax on your retirement savings now and save in a Roth IRA or Roth 401(k), so the growth is tax-free after you’re 59½? Or should you save in tax-deferred accounts and pay tax down the road when you spend the money — or are forced to withdraw it yearly for required minimum distributions? And if you do this, at some point do you want to convert some of those funds to Roth, pay the tax and then let the funds grow tax-free into the future? 

    “If you’re in a high tax bracket now, doing a Roth contribution to your 401(k) makes no fiscal sense,” says Chris Chen, a Boston-based certified financial planner who runs Insight Financial Strategists. 

    Chen recently advised a couple in their 50s who wanted to shift all of their 401(k) contributions from tax-deferred accounts to Roth to save the hassle of converting the funds later. The challenge is they are currently in the 35% tax bracket, and must also pay Massachusetts’ 5% state income tax. They plan to retire early, at which point they’ll probably drop to the 12% bracket.

    “So putting money in Roth now does not make sense from a tax standpoint,” says Chen. “They got persuaded to continue putting money into a traditional 401(k), and they deferred the Roth idea to later.”

    Roth conversions

    When you do come to the Roth conversion stage, you’ll need to look even closer at your tax bracket so that you can see how much income you can add without pushing into the next level. It’s a particularly steep increase from the 12% bracket to the 22% bracket, and then from the 24% bracket to the 32% bracket. 

    “You have to see at what point is it too painful to pay the tax,” says Ryan Losi, a CPA and executive vice president at PIASCIK, based in Glen Allen, Va. “We don’t want to go up to 32% or 35%, because that’s too big a payment.”

    For example, if your taxable income for 2024 is going to be $80,000 as a married couple, you’d be in the 12% bracket. If you plan to convert $20,000 from your 401(k) or IRA to Roth, that pushes you over the $94,300 limit, and $5,700 would be taxable at 22%, to the tune of $1,254. So perhaps you’d want to only convert $14,000 instead, and by controlling the size of the conversion, you can minimize your tax liability. 

    You can do some of this tax-bracket management on the income side as well, Reddy says. You can employ a bunching strategy, meaning you make all your stock sales that would cause capital gains in one year and avoid transactions the following year. Or you might be due a lump-sum payment for disability or severance or from an annuity, and you can spread it out instead. “This is where awareness is important,” says Reddy. 

    Charitable giving

    Bunching strategies also are helpful with charitable giving. Losi’s high-income clients are big users of donor-advised funds, which are charitable accounts that allow donors to take a deduction the year they deposit the funds and then distribute them later. “Clients will call and ask me, ‘What do I need to contribute this year to get me out of the 37% bracket?’” Losi says. 

    This works with the lower brackets, too, not just among the rich. If you’re in a high-tax state or paying a mortgage, it might benefit you to see where you are in your tax bracket. If you make a charitable donation of even a few hundred dollars, it could make sense for you to itemize instead of taking the standard deduction, and that extra amount could push you into a lower bracket. 

    Business owners and QBI

    Business owners and sole practitioners are the ones who pay the most attention to their tax brackets, Losi says, especially because of the qualified business income deduction that can reduce taxes on business income by up to 20%. The rules are complicated, and it takes a lot to manage not only where you fall in the brackets, but also the phase-outs for specific trades. 

    For these taxpayers, it may make sense to try to get paid less by clients in a certain calendar year, and pay themselves more. 

    “You can invoice, but tell clients to hold off on payment,” Losi says. “You can accelerate deductions. You can deduct 100% of capital spent for automobiles, desks, chairs — everything [a business] needs to run.”

    Losi also encourages business owners to pay themselves a healthy salary, which can reduce business income, and then set up solo qualified plans and cash-balance pension plans to put that money away pretax. “Heck yeah, cash-balance pension plans,” Losi says. “I’m the trustee of ours.”

    More on investment tax strategy:

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  • UBS Issues $3.5B in AT1 Bonds in First Issuance Since Credit Suisse Acquisition

    UBS Issues $3.5B in AT1 Bonds in First Issuance Since Credit Suisse Acquisition

    By Miriam Mukuru

    UBS Group issues $3.5 billion in Additional Tier 1 bonds in the first issuance since the acquisition of Credit Suisse.
    

    It is comprised of two tranches of $1.75 billion of 9.25% perpetual notes redeemable at the option of UBS after five years and $1.75 billion of 9.25% perpetual notes redeemable after 10 years.
    

    

    “Each issue is a direct, unsecured and subordinated obligation of UBS Group AG,” it said.
    

    “The notes provide that, following approval of a minimum amount of conversion capital by UBS Group AG’s shareholders, upon occurrence of a trigger event or a viability event, the notes will be converted into UBS Group AG ordinary shares rather than be subject to write-down,” UBS added.
    

    Write to Miriam Mukuru at miriam.mukuru@wsj.com
    

    

    


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  • 
		
		
    
			
    A wall of debt rolling over: Here’s what’s scaring Bridgewater’s co-CIO
    
			
    A wall of debt rolling over: Here’s what’s scaring Bridgewater’s co-CIO
    
			
    

    A weak session is setting up for Tuesday, with oil under pressure after unexpectedly downbeat China export data.  So the preference is for bonds this morning, as stock futures tilt south. 
    

    Onto our call of the day, which deals with another worry — a wall of government debt that will be with us for decades. It comes from Bridgewater’s highly regraded co-chief investment officer Bob Prince, who was speaking at the Global Financial Leaders’ Investment Summit on Tuesday, hosted by the Hong Kong Monetary Authority.
    

    

    Prince touches on asset liability mismatches, such as what was seen during the banking crisis earlier this year. He explains that one big factor behind a crisis is when a certain economic regime exists for an extended period of time and “people extrapolate that into the future on the basis of leverage and asset liability mismatches. Then you get a shift in that regime.”
    

    The events of March, which saw the collapse of SVB, Signature Bank and Silvergate, were a perfect example of that, Prince says. Then he turns to what he calls the “broader effects of a transition from 15 years of abundant free money,” that was first used to battle deleveraging pressures in the financial system in 2008 and then the pandemic. 
    

    One long-term effect of that gets particular attention by Prince, who points out how U.S. government Treasury debt to GDP was about 70% in 2008, around where it had been for decades.
    

    “The after effects of offsetting deleveraging and pandemic, you’ve had a massive wealth shift from the public sector to the private sector and that’s left the government with debt to GDP up from 70% up to 120%. And the particular vulnerability of that is in the debt rollovers and the gross issuance that you’re going to see in the coming decades . You’re stuck with that debt until you pay it off and that means you have to roll it over like anybody else does,” said Prince.
    

    “Gross debt issuance will be running at 25% for as far as the eye can see, that means every year you’re issuing 25% of GDP in debt. In 1960, the average amount of debt issuance was 12% of GDP,” he said. 
    

    Prince says most people really don’t pay attention to debt rollovers because they just assume those will get done, but notes that when countries have experienced balance of payments crisis in the past, mostly emerging markets, that is because they have been unable to roll over that debt. 
    

    In the U.S. case, it’s crucial to look at who is holding the debt, particularly the 27% held by foreign investors and 18% by central banks. “Foreign investors would normally be a reliable source of investment but it does heighten sensitivity to geopolitical risk, and so geopolitical risk converges with debt rollovers and gross issuance of the Treasury is an issue that you need to pay attention to in the coming years. 
    

    While not an “acute problem,” he says, it’s a lingering one, and when it comes to central banks it’s also unclear whether their holdings also present a “rollover risk.”
    

    Prince also touches on the fact that that all that “abundant free money” has fueled a private-equity boom, but with interest rates now at 8% instead of 2% or 3%, “the pace and transaction cycle is bound to slow,” and they are starting to see that. 
    

    “When we talk to institutional investors around the world, many of them are experiencing liquidity issues right now and the liquidity issues result from the fact so much money was allocated to private assets and the transaction cycle is slowing,” he said.
    

    MarketWatch 50: Forget U.S. stocks for now. Invest here instead, says Bridgewater’s co–investment chief
    

    A team of analysts at Citigroup led by Nathan Sheets have also weighed in on government debt, telling clients in a new note that “it’s unwise for policy makers to experiment or test” where the threshold for too much debt lies. Here’s their chart showing the bleak trajectory:
    

    

              
    

    

    
      
    

    

    Dirk Willer, head of global asset allocation at Citigroup, said a debt crisis scenario in the U.S. would likely mean a selloff of risk assets globally. He notes that bonds in rival countries may not be the best bet as they don’t always benefit. And both gold and bitcoin underperformed during the U.K. gilt crisis, so those may be out. 
    

    Also in attendance at the conference in Hong Kong, Deutsche Bank’s CEO is worried geopolitics could create another market event and Citadel’s Ken Griffin said investors should put money in China.
    

    Read: ‘Stock-market correction is over’ after broad surge amid ‘epic’ market rallies
    

    The markets
    

    

              
    

    

    
        
      
    
      
    

    

    Stock futures
    
        ES00,
    
        -0.02%
    

            NQ00,
    
        +0.31%
    
       are pointing to a weak to flat session ahead, while the 10-year Treasury yield
    
        BX:TMUBMUSD10Y
    
       eases back. U.S. crude
    
        CL.1,
    
        -2.20%
    
       is under $80 a barrel after worse-than-forecast China exports signaled more economic bumps in the global growth engine. The dollar
    
        DXY
    
       is up.
    

    The buzz
    

    Planet Fitness stock
    
        PLNT,
    
        -0.27%
    
      is surging on upbeat results and an improved growth outlook. Uber
    
        UBER,
    
        +0.82%
    
       is up as earnings beat forecasts, but revenue fell short. D.R. Horton
    
        DHI,
    
        -0.96%
    
       stock is also getting a boost from results. EBay
    
        EBAY,
    
        -0.44%    ,
    
       Occidental Petroleum
    
        OXY,
    
        -2.00%    ,
    
        Akamai Tech
    
        AKAM,
    
        -0.06%
    
       and Gilead Sciences
    
        GILD,
    
        -0.55%
    
       after the close. 
    

    Reporting late Thursday, Tripadvisor
    
        TRIP,
    
        +2.29%
    
       delivered blowout results and the stock is surging, while Sanmina
    
        SANM,
    
        -1.03%
    
       is down 14% after the manufacturing services provider’s disappointing results.
    

    UBS
    
        UBS,
    
        -0.49%
    

            UBSG,
    
        +2.79%
    
       swung to a $785 million quarterly loss on lingering effects of its Credit Suisse takeover, but it pulled in $33 billion in new deposits and shares are up.
    

    After a decade of turmoil, office-sharing group WeWork
    
        WE,
    
        -24.73%
    
       filed for Chapter 11 bankruptcy protection on Monday. 
    

    The U.S. trade deficit climbed 5% in September to $61.5 billion as imports rebounded. Still to come is consumer credit at 3 p.m. Fed Vice Chair for Supervision Michael Barr speaks at 9:15 a.m., followed by Fed Gov. Christopher Waller at 10 a.m. 
    

    The International Monetary Fund boosted its China outlook for 2023 and 2024.
    

    Best of the web
    

    Big banks are cooking up new ways to offload risk.
    

    Retirees continue to flock to places where climate risk is high.
    

    How to know when it’s time to retire
    

    The chart
    

    According to this recent JPMorgan survey, two-thirds of investors are ready to start pumping more money into equities, while just 19% plan to increase bond exposure. Also, note that 67% also said they did not expect performance of the Magnificent 7 stocks — Apple, Microsoft, Alphabet,  Amazon, Nvidia, Tesla and Meta —  to “crack before the end of the year.” 
    

    

              
    

    

    
        
      
    
      
    

    

    Top tickers
    

    These were the top-searched tickers on MarketWatch as of 6 a.m.:
    

    

    

        TSLA,
    
        -0.31%    
          		

      Tesla
    
    		

    

    

        AMC,
    
        +2.15%    
          		

      AMC Entertainment
    
    		

    

    

        NVDA,
    
        +1.66%    
          		

      Nvidia
    
    		

    

    

        AAPL,
    
        +1.46%    
          		

      Apple
    
    		

    

    

        NIO,
    
        -3.16%    
          		

      NIO
    
    		

    

    

        GME,
    
        -2.45%    
          		

      GameStop
    
    		

    

    

        AMZN,
    
        +0.82%    
          		

      Amazon.com
    
    		

    

    

        PLTR,
    
        -1.85%    
          		

      Palantir Technologies
    
    		

    

    

        MULN,
    
        +3.88%    
          		

      Mullen Automotive
    
    		

    

    

        MSFT,
    
        +1.06%    
          		

      Microsoft
    
    		

    

    

        NVDA,
    
        +1.66%    
          		

      Nvidia
    
    		

    

    

    Random reads
    

    Fifteen people ended up with eye pain and sight issues after a Bored Ape NFT event.
    

    A death metal band asked for singers on social media. A choir responded.
    

    undefined
    

    


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  • 
		
		
    
			
    Here’s why you might not have to pay a 6% commission next time you sell a home
    
			
    Here’s why you might not have to pay a 6% commission next time you sell a home
    
			
    

    Going back decades, if you wanted to buy or sell a stock on the open market, you had to pay a 2% commission to buy and a 2% commission to sell. Then the advent of discount brokerage, led by Charles Schwab Corp.
    
        SCHW,
    
        +1.64%    ,
    
       made lower commissions available until eventually, with improved technology and efficiency, the entire industry changed to enable the average investor to avoid commissions completely.
    

    

    But the internet hasn’t done much to reduce the cost of selling a home in the U.S. Sellers typically pay a 6% commission to a real-estate agent to list and sell a home, with the seller’s agent splitting that commission with the buyer’s agent. But all of that may change because of a verdict this week in a class-action lawsuit in federal court against the National Association of Realtors. 
    

    Aarthi Swaminathan covers the case, what may happen next and the implications for home sellers and buyers:
    

    Real-estate advice from the Moneyist
    

    

              
    

    

    
          
    
            MarketWatch illustration
    
          
    
  
    

    

    Quentin Fottrell — the Moneyist — works with three readers to answer tricky real-estate questions:
    

    Economic outlook
    

    On Wednesday, Federal Reserve Chair Jerome Powell may have bolstered the case that the central bank is finished raising interest rates for this economic cycle. The federal-funds rate was left in its target range of 5.25% to 5.50%.
    

    Jon Gray, the president of Blackstone Group, spoke with MarketWatch Editor in Chief Mark DeCambre and said he expected the Fed to succeed in bringing down inflation without pushing the U.S. economy into a deep recession.
    

    Friday employment numbers: Jobs report shows 150,000 new jobs in October as U.S. labor market cools
    

    Bond-market trend switches again
    

    

              
    

    

    
        
      
    

    The U.S. Treasury yield curve has been inverted for nearly a year.
    

          
    
            FactSet
    
          
    
  
    

    

    Normally, longer-term bonds have higher yields than those with short maturities. But the yield curve has been inverted for nearly a year, with 3-month U.S. Treasury bills
    
        BX:TMUBMUSD03M
    
       having higher yields than 10-year Treasury notes
    
        BX:TMUBMUSD10Y.
      
    

    There has been elevated demand for long-term bonds, as investors have anticipated a recession and a reversal in Federal Reserve interest-rate policy. When interest rates decline, bond prices rise and vice versa.
    

    As you can see on the chart above, the yield curve was narrowing until mid-October. Yields on 10-year Treasury notes were close to 5% on Oct. 19, but they have been falling the past several days as the three-month yield has remained close to 5.5%.
    

    In this week’s ETF Wrap, Christine Idzelis reports on where all the money is flowing in the bond market.
    

    In the Bond Report, Vivien Lou Chen summarizes the action as investors react to the Federal Reserve’s decision not to change its federal-funds-rate target range this week and to other economic news.
    

    For income-seekers looking to avoid income taxes, here’s a deep dive into municipal bonds, with taxable-equivalent yields and a deeper look at those within four high-tax states.
    

    Ford’s good news — in the bond market 
    

    

              
    

    

    
        
      
    

    Ford Motor Co.’s debt rating has been lifted by S&P to investment-grade.
    

          
    
            Getty Images
    
          
    
  
    

    

    Ford Motor Co.’s
    
        F,
    
        +4.14%
    
       credit rating was upgraded to an investment-grade rating by Standard & Poor’s on Monday. This takes about $67 billion in bonds out of the high-yield, or “junk,” market, as Ciara Linnane reports.
    

    A stock-market warning based on history
    

    

              
    

    

    
        
      
    

    The original Magnificent Seven.
    

          
    
            Courtesy Everett Collection
    
          
    
  
    

    

    By now you have probably heard the term “Magnificent Seven” used to describe stocks of the tremendous tech-oriented companies that have led this year’s rally for the S&P 500
    
        SPX
    
      : Apple Inc.
    
        AAPL,
    
        -0.52%    ,
    
       Microsoft Corp.
    
        MSFT,
    
        +1.29%    ,
    
       Amazon.com Inc.
    
        AMZN,
    
        +0.38%    ,
    
       Nvidia Corp.
    
        NVDA,
    
        +3.45%    ,
    
       Alphabet Inc.
    
        GOOGL,
    
        +1.26%
    

            GOOG,
    
        +1.39%    ,
    
       Meta Platforms Inc.
    
        META,
    
        +1.20%
    
       and Tesla Inc.
    
        TSLA,
    
        +0.66%    .
    
       With Tesla’s recent decline, that company is now the ninth-largest holding in the portfolio of the SPDR S&P 500 ETF Trust
    
        SPY,
    
       which tracks the benchmark index. Here are the top 10 companies held by SPY (11 stocks, including two common-share classes for Alphabet), with total returns through Thursday:
    

    

    

      Company
    
    		

      Ticker
    
    		

      % of SPY portfolio
    
    		

      2023 total return
    
    		

      2022 total return
    
    		

      Total return since end of 2021
    
    		

    

    

      Apple Inc.
    
    		

        AAPL,
    
        -0.52%    
          		

      7.2%
    
    		

      37%
    
    		

      -26%
    
    		

      1%
    
    		

    

    

      Microsoft Corp.
    
    		

        MSFT,
    
        +1.29%    
          		

      7.1%
    
    		

      46%
    
    		

      -28%
    
    		

      5%
    
    		

    

    

      Amazon.com Inc.
    
    		

        AMZN,
    
        +0.38%    
          		

      3.5%
    
    		

      64%
    
    		

      -50%
    
    		

      -17%
    
    		

    

    

      Nvidia Corp.
    
    		

        NVDA,
    
        +3.45%    
          		

      3.0%
    
    		

      198%
    
    		

      -50%
    
    		

      48%
    
    		

    

    

      Alphabet Inc. Class A
    
    		

        GOOGL,
    
        +1.26%    
          		

      2.1%
    
    		

      44%
    
    		

      -39%
    
    		

      -12%
    
    		

    

    

      Meta Platforms Inc. Class A
    
    		

        META,
    
        +1.20%    
          		

      1.9%
    
    		

      158%
    
    		

      -64%
    
    		

      -8%
    
    		

    

    

      Alphabet Inc. Class C
    
    		

        GOOG,
    
        +1.39%    
          		

      1.8%
    
    		

      45%
    
    		

      -39%
    
    		

      -11%
    
    		

    

    

      Berkshire Hathaway Inc. Class B
    
    		

        BRK.B,
    
        +0.80%    
          		

      1.8%
    
    		

      13%
    
    		

      3%
    
    		

      17%
    
    		

    

    

      Tesla Inc.
    
    		

        TSLA,
    
        +0.66%    
          		

      1.7%
    
    		

      77%
    
    		

      -65%
    
    		

      -38%
    
    		

    

    

      UnitedHealth Group Inc.
    
    		

        UNH,
    
        -0.98%    
          		

      1.4%
    
    		

      2%
    
    		

      7%
    
    		

      9%
    
    		

    

    

      Eli Lilly and Company
    
    		

        LLY,
    
        -2.15%    
          		

      1.3%
    
    		

      60%
    
    		

      34%
    
    		

      115%
    
    		

    

    

      Sources: FactSet, State Street (for SPY holdings)
    
    		

    

    

    Five of these stocks (including the two Alphabet share classes) are still down from the end of 2021. SPY itself has returned 14% this year, following an 18% decline in 2022. It is still down 7% from the end of 2021.
    

    Mark Hulbert makes the case that a decade from now, the Magnificent Seven are unlikely to be among the largest companies in the stock market.
    

    More from Hulbert: These dividend stocks and ETFs have healthy yields that can lift your portfolio
    

    A different market opportunity: India is seeing a multidecade growth surge. Here’s how you can invest in it.
    

    The MarketWatch 50
    

    

              
    

    

    
        
      
    
          
    
            MarketWatch
    
          
    
  
    

    

    The MarketWatch 50 series is back, with articles and video interviews starting this week, including:
    

    PayPal soars after earnings report
    

    

              
    

    

    
        
      
    

    PayPal CEO Alex Chriss.
    

          
    
            MarketWatch/PayPal
    
          
    
  
    

    

    After the market close on Wednesday, PayPal Holdings Inc.
    
        PYPL,
    
        +1.89%
    
       announced quarterly results that came in ahead of analysts’ expectations, and the stock soared 7% on Thursday even though the company lowered its target for improving its operating margin.
    

    In the Ratings Game column, Emily Bary reports on the positive reaction to PayPal’s new CEO, Alex Chriss.
    

    A less enthusiastic earnings reaction: EV-products maker BorgWarner’s stock suffers biggest drop in 15 years after downbeat sales outlook
    

    Consumers drive mixed reactions to earnings results
    

    

              
    

    

    
        
      
    

    Apple Inc. reported mixed quarterly results.
    

          
    
            Mario Tama/Getty Images
    
          
    
  
    

    

    Here’s more of the latest corporate financial results and reactions. First the good news:
    

    And now the news that may not be so good:
    

    Harsh verdict for SBF
    

    

              
    

    

    
        
      
    

    FTX founder Sam Bankman-Fried.
    

          
    
            AP
    
          
    
  
    

    

    It might seem that some legal battles never end, but it took only a year from the collapse of FTX for the cryptocurrency exchange’s founder, Sam Bankman-Fried, to be convicted on all seven federal fraud and money-laundering charges brought against him. The charges were connected to the disappearance of $8 billion from FTX customer accounts. 
    

    Here’s more reaction and coverage of the virtual-currency industry:
    

    Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.
    

    


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  • 
		
		
    
			
    Goldman Sachs leads gainers among the 30 stocks in the Dow Jones Industrial Average; Bank of America up handily
    
			
    Goldman Sachs leads gainers among the 30 stocks in the Dow Jones Industrial Average; Bank of America up handily
    
			
    

    

    Goldman Sachs Group Inc.’s stock
    
        GS,
    
        +4.42%
    
       is the biggest gainer among the 30 stocks in the Dow Jones Industrial Average
    
        DJIA,
    
        +0.66%
    
       at midday Friday with a rise of 4%. The stock has risen 12.6% so far this week. It’s also on pace for largest percent increase since November 10, 2022, when it rose 4.51%, according Dow Jones Market Data. Meanwhile, Bank of America Corp.’s stock
    
        BAC,
    
        +2.90%
    
       was up about 3% and is on track for a 13% gain this week, which would be its best since it rose by 16.5% in the week ending June 5, 2020.
    

    


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  • 
		
		
    
			
    You can save up to $23,000 in your 401(k) next year, IRS says
    
			
    You can save up to $23,000 in your 401(k) next year, IRS says
    
			
    

    

    Retirement savers can tuck away slightly more in 2024 than in 2023, but this year’s contribution increases are more modest than last year’s, according to new inflation-related adjustments released by the IRS.
    

    People who are building up their 401(k) accounts will be able to contribute a maximum of $23,000, a more than 2% increase from the $22,500 maximum for 2023. 
    

    

    IRA contribution limits will climb to $7,000 for 2024, a 7.6% increase over the $6,500 limit in 2023.
    

    When the IRS announced its adjustments for 2023, 401(k) savers got a big increase of nearly 10% year over year, and the IRA contribution limit went up more than 8%.
    

    The 2024 adjustments reflect an economy where inflation rates, although cooling, are still warm.
    

    For 2024, the catch-up amount for workers 50 and older is holding at a maximum of $1,000 on IRA contributions and of $7,500 for people with 401(k)s and other defined-contribution plans, the IRS said. 
    

    The IRS numbers set a limit on how much people can set aside each year in 401(k) accounts, but data suggest many people fall far short of those maximums. 
    

    In 2022, people with retirement accounts through Vanguard had an average account balance of $112,572. The median account balance was $27,376, the wealth-management giant reported.
    

    The new retirement-account contribution limits are part of the tax code’s yearly changes to account for inflation.
    

    Taxpayers are still awaiting the IRS adjustments for tax brackets, standard-deduction amounts and other provisions for tax year 2024.
    

    The tax agency adjusted the ranges on income-tax brackets last year by 7%.
    

    Roth IRA rules and the Saver’s Credit
    

    The numbers on 401(K) and IRA contributions were just one part of the IRS announcement Wednesday.
    

    The tax agency also lifted the income thresholds for people making Roth IRA contributions. Roth IRAs are funded with after-tax dollars, so they aren’t taxed when account holders pull out the money.
    

    Read also:  If saving $23,000 in your 401(k) next year isn’t enough, you can double that (or more) with the right strategy — and it’s legal
    

    But Roth IRA contributions hinge on household income. In 2024, individuals and people filing as head of household who make between $146,00 and $161,000 must limit their Roth IRA contributions. People with incomes above $161,000 won’t be able to contribute to a Roth IRA.
    

    That’s up from a 2023 phase-out range of $138,000 to $153,000.
    

    For married couples filing jointly, the phase-out range climbs to $230,000  – $240,000. That’s an increase from this year’s range of $218,000 to $228,000.
    

    Other retirement tax rules are also slated for 2024 updates.
    

    For example, there’s the “saver’s credit” which is designed to help low- and moderate-income households that are finding a way to put aside money for retirement. It pays up to $1,000 for individuals and up to $2,000 for married couples. The amount depends on income and contribution amounts.
    

    For 2024, married couples saving for retirement are eligible for the credit if their income stays under $76,500, up from $73,000. The income maximum is $38,250 for individuals, up from $36,500.
    

    

    


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  • 
		
		
    
			
    Prosecutors hammer at Sam Bankman-Fried’s credibility in FTX criminal fraud trial
    
			
    Prosecutors hammer at Sam Bankman-Fried’s credibility in FTX criminal fraud trial
    
			
    

    

    Federal prosecutors on Monday sought to chip away at FTX founder Sam Bankman-Fried’s credibility, pointing to discrepancies between his public comments and actions taken behind the scenes as the company collapsed.
    

    In a steady drumbeat of questions, Assistant U.S. Attorney Danielle Sassoon tried to paint Bankman-Fried, the 31-year-old former wunderkind of the crypto world, as someone who lied to his customers about the safety of their investments, while secretly raiding their accounts to fund his own risky investments, luxury real estate purchases, costly celebrity endorsements and political contributions.   
    

    

    In his second day of testimony before a jury in his criminal fraud trial in Manhattan’s federal court, Bankman-Fried repeatedly said he couldn’t remember exactly what he had said in numerous media interviews in the days and weeks after FTX had declared bankruptcy and $8 billion in customer deposits had vanished. 
    

    He also sought to distance himself from decision-making at FTX’s sister investment firm, Alameda Research, whose risky bets helped bring the crypto trading platform down. 
    

    Sassoon pointed to multiple public comments by Bankman-Fried in which he claimed FTX’s risk management protocols made it safer than other crypto currency trading platforms, while the company allowed its own investment arm, Alameda Research to make risky bets without limit. 
    

    FTX ultimately collapsed largely as a result of the billions in loans it had extended to Alameda, which prosecutors allege was done using customer money.
    

    Federal prosecutors have alleged that Alameda was effectively granted carte blanche to use FTX customer money to make risky bets. One key element was that certain risk-management systems that FTX used to to liquidate customer accounts that had entered into negative territory were disabled for Alameda, allowing it unfettered ability to make high-risk moves.
    

    Throughout his testimony, Bankman-Fried claimed he had limited visibility as to what was happening at Alameda, which he founded and mostly owned, but which had ceased running day-to-day in 2021, when his ex-girlfriend Caroline Ellison took over as CEO. 
    

    He said he only became aware of how bad a liquidity issue Alameda faced well after a financial crisis began sweeping through the crypto industry in the summer of 2022.  Bankman-Fried said he had told Ellison, who had pleaded guilty and testified against him, that she should have taken hedge positions earlier to lessen the company’s risk.
    

    But he said he continued to believe up until just days before the companies collapsed, that both Alameda and FTX were on firmer financial footing.
    

    “I viewed Alameda as solvent and FTX as solvent and decently liquid,” he testified. “Had that analysis come up any other way, I would have been in full on crisis mode. But in my view at the time that wasn’t the case.”
    

    Bankman-Fried did admit that he consulted frequently with Ellison about moves that Alameda made and even signed off on several billion-dollar investments. 
    

    “I think a few billion of them were my decision,” he said when asked about several large investments made by Alameda in 2021 and 2022. 
    

    Bankman-Fried is expected back in court for further cross examination on Tuesday. The judge in the case said he expected the case may go to the jury as early as Friday. 
    

    

    


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  • 
		
		
    
			
    HSBC Holdings 3Q Net $5.62B Vs. Net $2.00B >0005.HK
    
			
    HSBC Holdings 3Q Net $5.62B Vs. Net $2.00B >0005.HK
    
			
    

    

    By Sherry Qin
    

    HSBC Holdings PLC’s third-quarter net profit more than doubled as the London-based banking giant continued to benefit from higher interest rates and sharply higher non-interest income.
    

    The Asia-focused lender posted net profit of $5.62 billion for the three months to Sept. 30, up from $2.00 billion in the year-earlier period, it said Monday. HSBC’s pretax profit, the bank’s preferred profit measure, rose to $7.71 billion from $3.23 billion.
    

    

    The bank’s quarterly revenue rose 40% compared with the same period a year earlier to $16.2 billion. It attributed the growth to the higher interest rate environment, which supported growth in net interest income in all of their global businesses and higher non-interest income.
    

    Its non-interest income rose 97% on year to $6.9 billion, primarily due to the sale of its retail banking operations in France.
    

    The bank’s net interest income, its main source of income, reached $9.25 billion, from $8.01 billion in the same period last year. Its net interest margin increased by 19 basis points to 1.70% from the year-earlier period.
    

    “We have had three consecutive quarters of strong financial performance and are on track to achieve our mid-teens return on tangible equity target for 2023,” HSBC Chief Executive Noel Quinn said.
    

    HSBC reiterated its guidance for 2023 net interest income to be above $35 billion, it said.
    

    The board has approved a third interim dividend of $0.10 per share. It also intends to initiate a further share buyback of up to $3 billion after announcing three share buybacks in 2023 totaling up to $7 billion.
    

    Write to Sherry Qin at sherry.qin@wsj.com
    

    

    


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  • 
		
		
    
			
    How stock-market investors can ride out a ‘fear cycle’ as S&P 500, Nasdaq fall into correction
    
			
    How stock-market investors can ride out a ‘fear cycle’ as S&P 500, Nasdaq fall into correction
    
			
    

    Many people like to feel at least a little bit of fright. 
    

    That has been the whole point of Halloween for ages. The spooky traditions might even be a sort of hedge, a way to limit carnage should darker days lurk around the corner. 
    

    

    Where it gets trickier is when fear impacts a nest egg, retirement fund or portfolio holdings. And fear of looming mayhem has been higher in October, with a sharp selloff causing the S&P 500 index
    
        SPX
    
       to break below the 4,200 level, landing it in a correction on Friday. It also joined the Nasdaq Composite Index in falling at least 10% from a summer peak.
    

    In addition, a brutal bond-market rout has pushed the 10-year and 30-year Treasury yields
    
        BX:TMUBMUSD10Y
    
       up dramatically, with both recently dancing around the 5% level, which can drive up borrowing costs for the U.S. economy and cause havoc in financial markets.
    

    “Round numbers matter,” said Rich Steinberg, chief market strategist at The Colony Group, which has $20 billion in assets under management. He said the backdrop has investors trying to figure out “where to put money” and wanting to know “where can we hide?”
    

    “When you get into a fear cycle, the dynamics can get out of whack with reality,” Steinberg said. He thinks investors won’t go wrong earning roughly 5.5% on shorter term risk-free Treasurys, while penciling in stock prices they like. 
    

    “That’s where investors really get rewarded over the long-term,” he said, granted they have enough liquidity to ride out what could be elongated patches of volatility.
    

    Increasingly, investor worries tie back to U.S. government spending, with the Treasury Department early next expected to release an estimated $1.5 trillion borrowing need to accommodate a large budget deficit. That would unleash even more Treasury supply into an unsettled market, and potentially strain the plumbing of financial markets. 
    

    Higher U.S. bond yields threaten to make it more expensive for the federal government to service its debt load, but they also can be prohibitive for companies, sparking layoffs and defaults.
    

    Fed decisions, yields
    

    The Federal Reserve is expected to hold its policy interest rates steady on Wednesday following its two-day meeting, keeping the rate at a 22-year high in the 5.25%-5.5% range.
    

    The real fireworks, however, often appear during Fed Chairman Jerome Powell’s afternoon press conference following each rate decision.
    

    “I firmly believe they are done for good,” said Bryce Doty, a senior portfolio manager at Sit Investment Associates, of Fed hikes in this cycle, which he notes should set up bond funds for a banner 2024, after two rough years, given today’s higher starting yields.
    

    Yet, Doty also sees two “wild cards” that could rattle markets. Heavy Treasury debt issuance could overwhelm liquidity in the marketplace, causing yields to go up higher and potentially force the Fed to restart its bond-buying program, he said. 
    

    War abroad also could expand, including with the Israel-Hamas conflict, which could spark a flight to quality and push down U.S. bond yields. 
    

    With that backdrop, Doty suggests adding duration in bonds
    
        BX:TMUBMUSD03M
    
       as longer-term yields rise above short-term yields, and the so-called Treasury yield curve gets steeper. “This is the time,” he said. Investors should “keep marching” out on the curve as it steepens.
    

    “Yields, in my mind, have been the main challenge for the equity market,” said Keith Lerner, chief markets strategist at Truist Advisory Services, while noting that stocks have been wobbly since the 10-year Treasury yield topped 4% in July.
    

    Lerner also said the near 17% drop in the powerful “Magnificent Seven” stocks, while notable, isn’t as bad as in some other S&P 500 index sectors, like real estate, were the retrenchment is closer to 20%. 
    

    “We’ve had a pretty good reset,” he said, adding that lower stock prices provide investors with “somewhat better compensation” for the uncertainties ahead.
    

    “This is one of the most challenging investment environments we’ve seen in a long time,” said Cameron Brandt, director of research at EPFR, which tracks fund flows across asset classes.
    

    With that backdrop, he expects investors to keep more dry powder on hand through the end of this year than in the past.
    

    The Dow Jones Industrial Average
    
        DJIA
    
       shed 2.1% for the week and closed at its lowest level since the March banking crisis. The S&P 500 lost 2.5% for the week and the Nasdaq Composite fell 2.6% for the week.
    

    Another big item on the calendar for next week, beyond the Treasury borrowing announcement and Fed decision Wednesday is the Labor Department’s October jobs report due Friday.   
    

    


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  • 
		
		
    
			
    Big Tech earnings have been strong, but Apple is about to answer the thousand-dollar question
    
			
    Big Tech earnings have been strong, but Apple is about to answer the thousand-dollar question
    
			
    

    

    While the stock market reactions may not prove it, Big Tech is four-for-four so far this earnings reporting season. 
    

    Alphabet Inc.
    
        GOOG,
    
        -0.03%
    

            GOOGL,
    
        -0.09%    ,
    
       Amazon.com Inc.
    
        AMZN,
    
        +6.83%    ,
    
       Meta Platforms Inc.
    
        META,
    
        +2.91%
    
       and Microsoft Corp.
    
        MSFT,
    
        +0.59%
    
       all beat earnings and revenue expectations for the latest quarter, showing, among other things that the advertising market was healthy in the latest quarter and that software spending is holding up.
    

    

    But one more major test looms in the week ahead. Apple Inc.
    
        AAPL,
    
        +0.80%
    
       is due to deliver September-quarter results on Thursday and those earnings will answer a key question: Are consumers still so willing to purchase thousand-dollar iPhones in the current economy?
    

    Results from other companies in recent weeks have painted a mixed picture of consumer spending. Visa Inc.
    
        V,
    
        -0.87%    ,
    
       Mastercard Inc.
    
        MA,
    
        -0.14%
    
       and American Express Co.
    
        AXP,
    
        -1.42%
    
       say that spending remains resilient, but there are also signs that cracks are starting to form in categories deemed non-essential. Just look at Align Technology Inc.
    
        ALGN,
    
        +0.20%    ,
    
       the maker of Invisalign orthodontic aligners, which saw its stock plunge last week after noting that people seem to be putting off dental and orthodontic visits. 
    

    Read: Invisalign maker’s stock craters after soft earnings, but analysts still say it’s a buy
    

    Granted, some might say that iPhones are glorified necessities these days for Apple fans, even with their high price tags. But Apple conducted an effective price increase on its iPhone 15 Pro model when it rolled out its new phones in September, all while delivering a mostly incremental suite of feature upgrades across all its latest models. Will the new phones prove enticing enough in a period of stretched budgets?
    

    Just judging by S&P 500
    
        SPX
    
       results so far in the aggregate, the odds would seem to be in Apple’s favor for a beat this quarter. About half of index components have already reported, and 78% have posted earnings upside, while 62% have surprised positively on the top line, according to FactSet.
    

    Revenue will be the key item for Apple, as consensus expectations call for a small decline on the metric, which would mark the fourth consecutive year-over-year drop. It’s also worth noting that companies on the whole haven’t been topping revenue estimates by their usual margin. S&P 500 components in aggregate have reported revenue 0.8% above expectations, which compares with a five-year average of 2.0%, FactSet Senior Earnings Analyst John Butters wrote in a recent report.
    

    Apple’s report could also highlight the impact of currency on corporate results, as the company generates more than half of its revenue internationally. 
    

    “Given the stronger U.S. dollar in recent months, are S&P 500 companies with more international revenue exposure reporting lower (year-over-year) earnings and revenues for Q3 compared to S&P 500 companies with more domestic revenue exposure?” Butters asked. “The answer is yes.”
    

    This week in earnings
    

    Many U.S. investors in financial-technology companies likely hadn’t heard of European payments player Worldline SA
    
        WLN,
    
        +9.06%
    
       before last week, but a warning from the French company about deteriorating conditions in Europe helped send shares of PayPal Holdings Inc.
    
        PYPL,
    
        -2.63%
    
       and Block Inc.
    
        SQ,
    
        -3.98%
    
       sharply lower Wednesday, in a selloff one analyst deemed an overreaction. Those companies will look to reassure Wall Street about the health of their businesses with their own reports this week. Plus, while not a payments name, SoFi Technologies Inc.
    
        SOFI,
    
        -0.43%
    
       will provide another read on the fintech sector. Investors will be watching to see how the end of the student-loan moratorium impacted student lending volumes. 
    

    The week ahead will also shed light on how consumers’ dining preferences have evolved in the current economy. Starbucks Corp.
    
        SBUX,
    
        -0.70%    ,
    
       Dine Brands Global Inc.
    
        DIN,
    
        -0.12%    ,
    
       Cheesecake Factory Inc.
    
        CAKE,
    
        -0.47%
    
       and Sweetgreen Inc.
    
        SG,
    
        +0.59%
    
       are among names on the docket. Plus, amid concerns about the impact of GLP-1 drugs such as Ozempic and Wegovy on eating habits, Kraft Heinz Co.’s management will be in the spotlight.
    

    Don’t miss: What exactly are patients taking new weight-loss drugs eating and what are they avoiding? Bernstein asked them.
    

    The call to put on your calendar
    

    You can’t spell Advanced Micro Devices without AI (sort of): Nvidia Corp.
    
        NVDA,
    
        +0.43%
    
       has been ruling the chip world this year thanks to its dominance with the sort of hardware needed to power the corporate AI fervor. Investors will be watching Tuesday afternoon to see how quickly Advanced Micro Devices Inc.’s
    
        AMD,
    
        +2.95%
    
       own AI story is coming together. “The AMD narrative feels all about their data center (and, particularly, their AI story) right now,” Bernstein analyst Stacy Rasgon wrote in a note to clients. “In the near term the achievability of their 2H data-center growth (guided to 50% half-over-half) will be the question.” Rasgon expects AMD to discuss recent customer wins for its MI300X chip, though he thinks it will take time for the company to see “real volume.”
    

    The number to watch
    

    PayPal transaction margins: Shares of the one-time investor darling are trading at their lowest levels since May 2017, and the latest source of anguish for Wall Street is the company’s transaction margins. PayPal’s lower-margin unbranded checkout business has been growing more quickly than its higher-margin branded checkout product, a trend that’s been weighing on overall transaction margins. Barclays analyst Ramsey El-Assal expects the third quarter to mark a bottom on the metric before trends stabilize in the fourth quarter. “We do not believe the stock is crowded on the long or short side into earnings, as investors lack conviction regarding the magnitude of transaction margin headwinds in Q3,” he wrote in a recent preview. “In any case, we view Q3 as a potential clearing event.” PayPal posts results Wednesday afternoon.
    

    

    


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  • 
		
		
    
			
    Here’s how much money you need to buy a $400,000 home with 8% mortgage rates
    
			
    Here’s how much money you need to buy a $400,000 home with 8% mortgage rates
    
			
    

    U.S. home buyers face a tough real-estate market, with the 30-year mortgage near 8%. 
    

    Exactly how tough is it to buy a house these days? MarketWatch worked with Redfin to find out how much a home buyer needs to earn to buy a median-priced house in September 2023 with the 30-year fixed-rate mortgage at 8%. 
    

    

    It’s not a pretty picture. Mortgage rates have more than doubled since the pandemic, when the U.S. Federal Reserve kept interest rates low to promote economic activity amid mass closures to prevent the spread of the coronavirus. 
    

    The Fed’s aggressive and quick hiking of rates since then has made it much more expensive to buy a house, particularly with a mortgage. Higher rates have also spooked homeowners who might have been considering a move, which in turn has resulted in very low inventory and pushed up home prices. Even all-cash buyers cannot catch a break in this environment, because there are few listings.
    

    A median-priced home, meaning a house right in the middle of the price ladder, was roughly $412,000 in September 2023, according to real-estate brokerage Redfin
    
        RDFN,
    
        -2.33%    .
    
       The 30-year rate varied between 7.63% according to Freddie Mac and 8.03% according to Mortgage News Daily.
    

    “It’s important to note that reported rate numbers are averages at best and don’t apply across the board,” Andy Walden, vice president of enterprise research at Intercontinental Exchange, said. 
    

    “Actual offerings will vary by lender and are dependent on the loan type and creditworthiness of the individual borrower,” he added. 
    

    With that in mind, here’s a look at exactly how various mortgage rates affect your monthly housing payment.
    

    Buying a median-priced home at 8% rates
    

    Mortgage News Daily on October 19 noted that some lenders were quoting a rate of 8.03%. 
    

    That means that if a home buyer is paying for a median-priced $412,000 home with a 30-year mortgage at 8% after putting 20% down, they would have to pay roughly $3,019 per month, which includes not just their principal and interest, but taxes and insurance as well, according to Redfin.
    

    To afford that on a monthly basis, a prospective buyer would need to make $120,773. Redfin considers a monthly payment as “affordable” if the buyer is spending no more than 30% of their income on housing.
    

    Buying a median-priced home at 7% rates
    

    In October, Fannie Mae said that it expected the 30-year mortgage to fall to 7.1% in the first quarter of 2024, and go lower after that, ending the year at 6.7%.
    

    If a home buyer is paying for the $412,000 home with a 30-year mortgage at 7% after putting 20% down, they would have to pay roughly $2,794 per month, which includes not just their principal and interest, but taxes and insurance as well, Redfin said.
    

    To afford that on a monthly basis, a prospective buyer would need to make at least $111,747 a year. 
    

    Buying a median-priced home at 6% rates
    

    The Mortgage Bankers Association, an industry group, expects the 30-year to fall to 6.1% by the end of 2024.
    

    If a home buyer is paying for the $412,000 home with a 30-year mortgage at 6% after putting 20% down, they would have to pay roughly $2,577 per month, which includes not just their principal, interest, taxes, and insurance, Redfin said.
    

    To afford that on a monthly basis, a prospective buyer would need to make at least $103,078 a year. 
    

    Real-estate is much more expensive today than before the pandemic
    

    Rising rates have made buying a home a much more expensive process than before the coronavirus pandemic. 
    

    A home buyer buying a median-priced home today has to earn 50% more than they would have if they wanted to buy a median-priced home at the start of the pandemic, Redfin said in a blog post. 
    

    “Buyers — particularly first-timers — who are committed to getting into a home now should think outside the box,” Chen Zhao, economics research lead at Redfin, said in the post. 
    

    “Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb,” she added.
    

    


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  • 
		
		
    
			
    WSJ News Exclusive | Xi Jinping Is Looking for Someone to Blame for China’s Property Bust
    
			
    WSJ News Exclusive | Xi Jinping Is Looking for Someone to Blame for China’s Property Bust
    
			
    

    

    

    

    

    

    

    

    Updated Oct. 26, 2023 12:05 am ET
    

    

    

    

    

    

    

    

    With China’s property bust threatening to sink the country’s economic recovery, Xi Jinping is looking for someone to blame.
    

    After putting the billionaire founder of Evergrande, a heavily indebted property firm, under investigation for possible crimes, Beijing is expanding its probes to include bankers and financial institutions that facilitated developers’ risky behavior, people familiar with the matter say.
    

    

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
    

    


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  • 
		
		
    
			
    The Nasdaq just fell into a correction. Now what?
    
			
    The Nasdaq just fell into a correction. Now what?
    
			
    

    

    The Nasdaq Composite Index fell into its 70th correction in history on Wednesday, as surging long-term Treasury yields increased borrowing costs and weighed on stocks.
    

    The interest rate sensitive Nasdaq
    
        COMP
    
       barreled higher in the year’s first half, in part on optimism about a potential Federal Reserve pivot away from rate hikes to fight inflation, but stocks have been under fire in recent months as the Fed dialed up its message that interest rates could will stay higher for longer.
    

    

    The tech-heavy equity index fell 2.4% on Wednesday to close below the  12,922.216 threshold, marking a drop of a least 10% from its prior peak, which was set in mid-July at 14,358.02, according to Dow Jones Market Data. 
    

    That met the common definition for a correction in an asset’s value and is the Nasdaq’s 70th close in correction territory since the index’s inception in February 1971.
    

    Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said the sharp rise in long-term Treasury yields has spooked investors, especially those in highflying, high-growth technology stocks where rising rates can be particularly corrosive.
    

    Pavlik likened the dynamic to the spending power of a lottery winner hitting a jackpot when rates are at 2% versus someone who wins when rates are closer to 10%. 
    

    He also expects the 10-year Treasury yield
    
        BX:TMUBMUSD10Y,
    
       which rose to 4.952% Wednesday, to top out at 5.25% to 5.5% and likely complicate any recovery for the Nasdaq.
    

    In the past 20 corrections for the Nasdaq, it took an average of three months for performance to improve, with index then gaining 14.4% on average a year later, according to Dow Jones Industrial Average.
    

    

              
    

    

    

    Nasdaq corrections are usually followed by a bounce in a few months
    

          
    
            Dow Jones Market Data
    
          
    
  
    

    

    The damage on Wednesday was most acute in shares of highflying technology stocks, including Alphabet Inc.
    
        GOOG,
    
        -9.60%
    
       as shares skid 9.5%, after it reported earnings that were overshadowed by downbeat performance for its Google Cloud business. Spillover also hit shares of rival cloud computing giant Amazon.com Inc.,
    
        AMZN,
    
        -5.58%
    
       with its shares slumping 5.6%
    

    “You’re feeling the pressure in some big-name stocks,” Pavlik said. “But this too will, at some point, end. But concerns about the Fed are still in the forefront of everybody’s minds.”
    

    The Nasdaq was still up 22.5% on the year through Wednesday, while the Dow Jones Industrial Average
    
        DJIA
    
       was down 0.3% and the S&P 500 index
    
        SPX
    
       was up 9% in 2023, according to FactSet.
    

    

    


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  • 
		
		
    
			
    Morgan Stanley names Ted Pick its next CEO
    
			
    Morgan Stanley names Ted Pick its next CEO
    
			
    

    

    Morgan Stanley said late Wednesday that Co-President Edward “Ted” Pick will become its chief executive, effective Jan. 1. 
    

    Outgoing Chief Executive James Gorman will become executive chairman, Morgan Stanley said.  Pick will also join the firm’s board of directors.
    

    

    “The board has unanimously determined that Ted Pick is the right person to lead Morgan Stanley and build on the success the firm has achieved under James Gorman’s exceptional leadership,” the company said in a statement. 
    

    “Ted is a strategic leader with a strong track record of building and growing our client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward our culture and values,” it said.
    

    Gorman had announced his intention to step down in May, setting off a “Sucession”-like run for the top job at the investment bank.  
    

    Pick’s name had been among those in the running. The executive joined Morgan Stanley in 1990, and was promoted to managing director in 2002, according to his bio on the company’s website. 
    

    Gorman became CEO in January 2010, having joined the firm in 2006. 
    

    The lack of a clear successor at Morgan Stanley has weighed on its stock lately. 
    

    The shares are down 24% in the last three months, three times the losses for the S&P 500 index
    
        SPX
    
       in the same period. So far this year, Morgan Stanley shares are down 16%, contrasting with an advance of about 9% for the S&P. 
    

    

    


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  • 
		
		
    
			
    Barclays 3Q Rev GBP6.258B
    
			
    Barclays 3Q Rev GBP6.258B
    
			
    

    

    By Elena Vardon
    

    Barclays lowered its U.K. net interest margin guidance for 2023 as it posted third-quarter results.
    

    The British bank on Tuesday said its now expects its net interest margin for Barclays U.K. to come between 3.05% and 3.10%. It had guided for a 2023 margin of no more than 3.20% at its half-year results in July with a view of around 3.15%.
    

    

    The lender said its net interest margin for the three months ended Sept. 30 was 3.04%, following a 3.22% margin for the second quarter.
    

    Write to Elena Vardon at elena.vardon@wsj.com
    

    

    


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  • 
		
		
    
			
    Bitcoin rallies to almost 18-month high on ETF optimism
    
			
    Bitcoin rallies to almost 18-month high on ETF optimism
    
			
    

    

    Bitcoin surged over 10% on Monday, briefly surpassing $34,500, on continued optimism that an exchange-traded fund investing directly in the cryptocurrency will soon be approved in the U.S. 
    

    The largest cryptocurrency
    
        BTCUSD,
    
        +6.59%
    
       by market cap on Monday reached as high as $34,616, the loftiest level since May 2022, according to CoinDesk data, before falling to around $33,021 by Monday evening. Other major cryptocurrencies also rose, with ether up 5.8% over the past 24 hours to $1,763. 
    

    

    The U.S. Securities and Exchange Commission has repeatedly rejected bitcoin ETF applications in the past, citing risks of market manipulation. But crypto-industry participants are expecting that to change soon. 
    

    Read more: Bitcoin climbs above $30,000 for first time since August as hopes for ETF approval intensify
    

    A U.S. Appeals court on Monday issued a mandate, putting into effect its ruling in August, which overturned the SEC’s rejection of Grayscale Investments’ application to convert its Bitcoin Trust product
    
        GBTC
    
       into an ETF. The final ruling on Monday confirmed Grayscale’s win in court. 
    

    Meanwhile, BlackRock’s proposed bitcoin ETF has been listed on the Depository Trust & Clearing Corporation. While it doesn’t mean that the ETF is guaranteed to be approved, it shows another step closer for BlackRock to bring the fund to the market. 
    

    If bitcoin ETFs are approved, the crypto may see “historical price increases,” with a crypto bull market coming, according to Alex Adelman, chief executive and co-founder of Lolli. “Bitcoin ETFs will give institutional and retail investors new ways to gain exposure to bitcoin within established regulations,” Adelman said. 
    

    

    


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  • 
		
		
    
			
    Can the average American family be called millionaires? Yes, but …
    
			
    Can the average American family be called millionaires? Yes, but …
    
			
    

    

    It seems hard to believe, and it’s one of those cases where definitions mean everything, but the average family in America has achieved millionaire status.
    

    That’s according to the Federal Reserve’s latest authoritative survey of consumer finances, and it comes with lots of asterisks attached.
    

    

    But first, the data: The mean net worth of the average American household, even adjusting for inflation, was $1.06 million last year. Compared with 2019, that figure was up 23%, boosted by rising house prices and a surging stock market
    
        SPX.
      
    

    OK, here comes the but: The median, as opposed to the mean, net worth of the typical American household is just $192,900. That figure still represents an impressive after-inflation gain of 37% over those three years, but it’s more in line with what everyday experience suggests.
    

    The median household refers to the grouping smack in the middle of rankings. The average, or mean, gets boosted by the likes of billionaires Elon Musk and Jeff Bezos. American households by income in the top 10% have a net worth, on average, of $6.63 million, according to the Fed.
    

    Showing the massive importance of home ownership to amassing wealth, those who own their residence have an average net worth of $1.53 million, compared with just $155,000 for renters.
    

    

    


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  • 
		
		
    
			
    Morgan Stanley earnings fall 10% but beat Wall Street expectations
    
			
    Morgan Stanley earnings fall 10% but beat Wall Street expectations
    
			
    

    

    Morgan Stanley on Wednesday said its third-quarter profit fell 10% amid weakness in its investment banking business, but its trading and asset-management revenue rose.
    

    Morgan Stanley
    
        MS,
    
        +2.03%
    
       said profit for the three months ended Sept. 30 fell to $2.26 billion, or $1.38 a share, from $2.49 billion, or $1.47 a share, in the year-ago period. 
    

    

    Analysts tracked by FactSet expect Morgan Stanley to earn $1.28 a share.
    

    At the start of the quarter, analysts were expecting earnings of $1.58 a share.
    

    Revenue fell 1% to $13.27 billion, ahead of the FactSet consensus estimate of $13.22 billion.
    

    Morgan Stanley’s stock fell 2.8% in premarket trading on Wednesday.
    

    Chief Executive James Gorman said the market environment was mixed.
    

    “Our equity and fixed income businesses navigated markets well, and both wealth management and investment management producer higher revenues and profits year-over-year,” Gorman said. 
    

    Morgan Stanley’s stock fell 4.4% in the third quarter in a choppy period for bank stocks overall.  Prior to Wednesday’s trades, the stock was down just under 10% in the past month, compared with 1.9% drop by the S&P 500
    
        SPX.
      
    

    For the third quarter, trading revenue rose 10% in the quarter to $3.68 billion.
    

    Asset-management revenue increased by 6% to $5.03 billion, while investment-banking revenue dropped 24% to $1.05 billion. 
    

    During the past month, 11 analysts cut their profit estimates for Morgan Stanley and only one increased their view. 
    

    UBS analyst Brennan Hawken downgraded Morgan Stanley to neutral from buy last week, cutting his price target to $84 from $110. 
    

    “Despite its successful transformation into a wealth-management-focused firm with a solid, wire house peer leading growth profile, MS is confronted with obstacles such as deposit sorting/yield seeking, intense competition for talent, and a challenging revenue environment,” Hawken said.
    

    The average rating among 26 analysts that cover Morgan Stanley is overweight. 
    

    The bank is in the midst of a leadership transition, with Chief Executive James Gorman planning to step down by next May. Three potential successors at the bank include Andy Saperstein, who heads up wealth management; Ted Pick, who runs capital markets; and Dan Simkowitz, head of investment management.  
    

    Also read: Bank of America’s profit climbs 10%, boosted by interest rates and loans
    

    

    


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