Tag: Business/Consumer Services

Stocks are trapped in a trading range. Something’s got to give.

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The U.S. stock market, as measured by the S&P 500 Index SPX, is trapped in a trading range, and volatility seems to be damping down considerably. The significant edges of the trading range are support at 4330 and resistance at 4540. Both of those levels were touched in the latter half of August. A breakout from this range should give the market some strong directional momentum.

Since Labor Day, prices have hunkered down into an even narrower range. Typically, the latter half of September through the early part of October…

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September 14, 2023
Arm Sets IPO Price at $51 a Share. The Stock Is Set to Open Higher.

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Arm is set to start trading today on the Nasdaq under the symbol ARM.

Chris Ratcliffe/Bloomberg

Arm Holdings

priced its initial public offering at $51 a share. That’s at the top of the expected range of $47 to $51, giving the chip design company a valuation of $54.5 billion on a f…

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September 14, 2023
Howard Schultz steps down from Starbucks board of directors

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Starbucks Corp. on Wednesday said former Chief Executive Howard Schultz is stepping down from its board of directors, capping a nearly 40-year career during which the company grew from a handful of stores in Seattle into a global coffee chain.

Schultz’s retirement from the board, which ends his involvement in the company’s leadership, took effect Wednesday and was part of a planned transition, the coffee chain said. Schultz stepped down as Starbucks
SBUX,
+0.72%
chief executive in March.

The company on Wednesday also said that it had elected Wei Zhang to its board of directors, effective Oct. 1. Zhang was most recently a senior adviser to Chinese e-commerce giant Alibaba Group
BABA,
-0.75%
and also held leadership positions at News Corp China and CNBC China.

Shares of Starbucks were down 0.7% after hours on Wednesday.

Starbucks said Schultz “will now turn his attention with his wife, Sheri, to focus on a range of philanthropic and entrepreneurial investments to create greater opportunity, accessible to all.” The company noted that the two were co-founders of the Schultz Family Foundation in 1996, and of the emes project.

Although he was not technically the founder of the coffee chain, Schultz became the modern face of it. Schultz joined Starbucks in 1982 as its director of operations and marketing. After a brief hiatus from the company, he returned in 1987 as chief executive and bought the business with backing from local investors, according to a biography on the Starbucks website. The chain went public in 1992.

As the chain’s footprint expanded beyond the U.S., Schultz stepped down from the CEO role in 2000 but returned in 2008. He retired from Starbucks in 2018, then came back as interim chief executive and board member last year.

Over those years, Starbucks has banked on China for international growth — even as that country’s economy remains turbulent following the postpandemic reopening. It also added food and cold and customizable drinks to its menus and built out its mobile-ordering infrastructure.

The company has branded itself as a progressive employer and a supporter of social justice. But over the past two years, the company, and Schultz in particular, have faced criticism over the handling of employees who were trying to unionize. Union members have accused the chain of unfair labor practices, retaliation for organizing and delaying contract negotiations, leading to deeper scrutiny from lawmakers.

“We hope this is an opportunity for Starbucks to change course and leave their union-busting behind them,” Starbucks Workers United, the union representing those workers, said Wednesday in a tweet.

Still, even as inflation has eaten into consumer savings, Schultz said coffee has remained an “affordable luxury” for many customers. And Starbucks management said that younger, loyal consumers and customizable drinks would help sustain demand.

According to a filing on Wednesday, Schultz will still be connected to the company in other ways. Starbucks said it would amend Schultz’s retirement agreement from 2018 and continue to provide him and his spouse with security services.

“The security services will be provided for a period of 10 years and will be evaluated on an annual basis,” the filing said. “In recognition of Mr. Schultz’s leadership as the company’s founder and chairman emeritus, the company will also provide Mr. Schultz with the reimbursement of his monthly healthcare insurance premiums.”

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September 13, 2023

The economy is doing better than anyone thinks, but these troubles are in the pipeline, says Bill Ackman

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Stock investors are showing some hesitancy for Tuesday, with big signals on the economy coming this week via consumer prices and retail sales. Ahead of that, Apple is expected to tempt consumers with yet another new iPhone on Tuesday.

How much should investors be worrying right now? Our call of the day from Pershing Square Capital Management manager Bill Ackman says that in the near term, we can relax a little, but it isn’t all roses.

Read: Hedge funds have bailed on the U.S. consumer in a big way, Goldman Sachs data finds

He told the Julia La Roche Show in an interview where he felt like he had a “crystal ball of what was going to happen,” starting in January 2020 with the COVID-19 outbreak, and that carried on through interest rates and the economy. Indeed, the manager reportedly made nearly $4 billion on a couple of pandemic-related bets.

“I would say the crystal ball has clouded a bit in the last period. I think these are unusual economic times and perhaps we always say that, but I don’t think this is a pattern that has been repeated…or it hasn’t been for more than 100 years,” he said.

But he remains near-term upbeat. “For two years, people have been saying that recession’s around the corner and you know we’ve had a very different view, and continue to have this view that I think people are coming around to, that the economy is actually still quite strong,” he said.

And while those on lower-income rungs have burned through a lot of COVID savings, he thinks the economy has yet to really see impact from the big fiscal stimulus seen in recent years.

Looking down the road though, Ackman has got a stack of concerns over the economy. He sees about a third of federal debt due to get repriced meaning that over a relatively short period of time, “interest expense will become a much bigger part of the deficit that is not going to be a contributor to the economy.”

And while higher interest rates do help savers, ultimately that will be a big drag on the economy, he said, adding that rising inflation, mortgage rates, car payments and credit card rates, are all set to slow the economy.

“We’re still in the midst of a war and there’s political uncertainty you know with an upcoming election,” he said. That partly explains Pershing Square’s hedge via a short position on the 30-year Treasury bond
BX:TMUBMUSD30Y
that he laid out in a tweet in early August.

For roughly a year, long-term Treasury yields have been trading below short-dated ones, which is known as an inverted yield curve, a phenomenon that’s often seen as a precursor to recession.

“I don’t see inflation getting back to 2% so quickly, if at all, and if in fact we’re in a world of persistent 3% inflation, you know it doesn’t make sense to have a 4.3%, 4.25% Treasury yield,” he said.

Other risks? Ackman remains worried about regional banks following the spring crisis, as many have big fixed-rate portfolios of assets that have gotten less and less valuable as rates rise. “I would say the commercial real estate picture has not gotten better, if anything, you know, you’re going to start seeing real defaults, particularly with office assets,” he said.

“Regional banks have the most exposure to construction loans so they are going to be a lot of construction loans that won’t be able to repaid. There will be a lot of restructurings, so either the investors groups are gonna have to put in a lot more equity or the banks are going to start taking some losses,” he said.

Ackman says investors also face a presidential campaign that could add some stress. The hedge-fund manager said he’s surprised there have not been “more and better alternative candidates” for the 2024 campaign over President Joe Biden and former President Donald Trump.

He’d like to see JPMorgan Chase & Co. CEO Jamie Dimon toss his hat in the ring and believes Biden is “beatable,” by a strong candidate.

Ackman himself said it’s “possible,” he himself could run someday, but he’s more focused on having a better investment track record over Berkshire Hathaway Chairman and CEO Warren Buffett — and needs some 30 years to match the Oracle of Omaha.

Read: Here’s an easy way to make a more concentrated play on the ‘Magnificent Seven’ stocks

The markets

Stock futures
ES00,
-0.36%

NQ00,
-0.45%
are tilting south, led by tech, with Treasury yields
BX:TMUBMUSD02Y

BX:TMUBMUSD10Y
steady to a touch lower and the dollar
DXY
recovering some ground.

Read: Watch this ‘canary in the coal mine’ for signs of trouble in markets, Neuberger Berman CIO says

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

The buzz

Oracle shares
ORCL,
+0.31%
are down 10% in premarket trading after disappointing guidance from the cloud database group.

Apple’s
AAPL,
+0.66%
big event kicks off at 1 p.m. Eastern, with the launch of the pricier iPhone 15 expected to be on the agenda.

Hot ticket. Arm Holdings’ IPO is already 10 times oversubscribed and bankers will stop taking orders by Tuesday afternoon, Bloomberg reports, citing sources.

Tech’s wild week: How Apple, Google, AI, Arm’s mega IPO could set the agenda for years

Upbeat results are boosting shares of convenience-store operator Casey’s General Stores
CASY,
-1.02%.

Packaging giant WestRock
WRK,
-1.48%
and rival Smurfit Kappa
SK3,
-8.87%
have announced a stock and cash tie up. WestRock shares are up 8% in premarket.

Read: U.S. budget deficit will double this year to $2 trillion, excluding student loans

Best of the web

No better than gambling? Amateur investors are piling into 24-hour options.

Demand for oil, coal, gas to peak this decade, IEA chief says

U.S. takes on tech giant Google in landmark case.

The chart

Bank of America’s global fund manager survey for September sees investors still bearish, but no longer on the extreme side. Here’s the chart:

Read: Fund managers just made their biggest shift ever into U.S. stocks — and out of emerging markets

The tickers

These were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern:

Ticker	Security name
TSLA, +10.09%	Tesla
AMC, +2.23%	AMC Entertainment
CGC, +81.37%	Canopy Growth
NVDA, -0.86%	Nvidia
GME, -3.90%	GameStop
AAPL, +0.66%	Apple
ACB, +72.17%	Aurora Cannabis
NIO, +2.89%	Nio
MULN, +5.77%	Mullen Automotive
AMZN, +3.52%	Amazon

Random reads

“Worst investment ever.” Brady Bunch fan buys original house for cut-price $3.2 million.

And the house from the “Halloween” slasher films just sold for $1.8 million.

China may ban clothes that hurt people’s feelings.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Listen to the Best New Ideas in Money podcast with MarketWatch financial columnist James Rogers and economist Stephanie Kelton.

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September 12, 2023

Oracle stock sinks as revenue outlook falls below Wall Street consensus

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Oracle Corp. shares dropped in extended trading Monday after the software company’s revenue forecast for the current quarter fell short of Wall Street expectations.

Oracle
ORCL,
+0.31%
shares, which had been down about 5% after hours when its earnings call started, dropped more than 9% after Oracle Chief Executive Safra Catz forecast its outlook for the quarter.

On the conference call with analysts, Catz forecast second-quarter earnings of $1.30 to $1.34 a share on revenue growth of 5% to 7%, or $12.89 billion to $13.13 billion.

Analysts surveyed by FactSet had estimated earnings of $1.34 a share on revenue of $13.28 billion.

Catz added that if “currency exchange rates remain the same as they are now,” currency should have a 2% positive effect on total revenue and a 3 cent-a-share positive effect on earnings.

Oracle reported fiscal first-quarter net income of $2.42 billion, or 86 cents a share, compared with $1.55 billion, or 56 cents a share, a year ago.

Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.19 a share, compared with $1.03 a share in the year-ago period.

Revenue rose to $12.45 billion from $11.45 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $1.15 a share on revenue of $12.57 billion.

Oracle reported cloud services and license support revenue of $9.55 billion, while analysts, on average, had forecast $9.43 billion; and cloud license and on-premise license revenue of $809 million, while the Street expected $967 million.

Hardware revenue came in at $714 million, while analysts expected $748 million; and services revenue was $1.38 billion, while the Street expected $1.43 billion.

Oracle shares finished up 0.3% during Monday’s regular session to close at $126.71.

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September 11, 2023
Tech’s wild week: How Apple, Google, AI, Arm’s mega IPO could set the agenda for years

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The second week of September, as in the NFL, marks a kickoff of sorts for the tech year.

Headlined by Apple Inc.’s
AAPL,
+0.72%
seminal iPhone event on the second Tuesday of the month at Apple Park, and anchored by Salesforce Inc.’s
CRM,
+0.33%
wildly popular Dreamforce conference up the road in San Francisco, these several days set a tempo as well as establish a road map for the industry over the next 12 months. They also open the floodgates on tech conference season, with shows stacked up over the next several weeks for Facebook parent Meta Platforms Inc.
META,
+3.33%,
Microsoft Corp.
MSFT,
+1.21%,
and Oracle Corp.
ORCL,
+0.32%.

Oh, and there’s that initial public offering from Arm Holdings Plc, the chip designer owned by SoftBank Group Corp.
9984,
+3.86%
that is expected to value Arm at $50 billion to $54.5 billion on a fully diluted basis. Another IPO candidate, delivery startup Instacart, also plans a public offering that would value it at $7.5 billion. Both deals could jump-start what has been a somnolent tech IPO market the past few years.

For that reason alone, this jam-packed tech week might hold even more import, and consequences, than previous years. A confluence of legal tussles, macroeconomic conditions, a trade war with China, and regulatory bluster have raised the stakes.

“It’s a tale of two cities with this week’s events highlighting both the issues and opportunities in tech,” Silicon Valley analyst Maribel Lopez said in an interview, assessing the week. “Arm’s IPO showcases the strength of tech and AI at a time when the AI forum and Google-DoJ shine a light on the concern that a few companies are wielding tremendous power for the future of the world.”

Consider: Hours before Apple is expected to unveil a new crop of iPhones more noteworthy for pricing than features, Alphabet Inc.’s
GOOGL,
+0.51%

GOOG,
+0.47%
Google faces off with the Justice Department in a federal court in Washington, D.C.

Justice Department officials argue that Google illegally leveraged agreements with phone makers such as Apple and Samsung Electronics Co.
005930,
+0.71%
and with internet browsers like Mozilla to be the default search engine for their customers, thus preventing smaller rivals from gaining access to that business.

“This is a backwards-looking case at a time of unprecedented innovation, including breakthroughs in AI, new apps and new services, all of which are creating more competition and more options for people than ever before,” Google General Counsel Kent Walker said in a statement.

The following day, Wednesday, Senate Majority Leader Chuck Schumer, D-N.Y., convenes an all-star panel of CEOs from Meta, Microsoft, Google, OpenAI and Palantir Technologies Inc.
PLTR,
+4.82%.

As lawmakers ruminate on how to harness AI responsibly, bipartisan legislation is in the works. Sens. Richard Blumenthal, D-Conn., and Josh Hawley, R-Mo., are among those crafting a bill.

Even Apple and Salesforce aren’t immune from recent events: Apple has endured a relatively rough patch of disappointing (for them) revenue and iPhone sales while balancing risk/reward with its huge investment in China, and Salesforce CEO Marc Benioff has threatened to relocate Dreamforce to Las Vegas after more than two decades in his hometown of San Francisco if drug use and homelessness disrupt this year’s event.

The most pressing concern, when all is said and done, is AI — which hovers like the Death Star over the tech landscape.

“The biggest concern is the forum is behind closed doors, which could lead to regulatory capture, where dominant players in the industry help influence the regulations being imposed,” Kimberlee Josephson, associate professor of business administration at Lebanon Valley College (Pa.), said in an interview. “It’s almost as if it puts them in the hot while giving them a seat at the table at the same time.”

“At the very least, it sends the signal that something is being done,” she said. “Antitrust cases are so subjective. What constitutes barriers to entry? DoJ adds a level of seriousness.”

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September 11, 2023

Here’s an easy way to make a more concentrated play on the ‘Magnificent Seven’ stocks

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Investors in index funds have been well rewarded by a high concentration in the largest technology companies over the past decade. But there are also continuing warnings about the risk of such heavy concentrations, even in index funds that track the S&P 500. Solutions are offered to limit this risk, but if you expect Big Tech to continue to drive the broad market returns over the coming years, why not make an even more focused bet?

Comparisons of three index-fund approaches highlight how successful concentration in the “Magnificent Seven” has been.

The Magnificent Seven are Apple Inc.
AAPL,
+0.16%,
Microsoft Corp.
MSFT,
+0.72%,
Nvidia Corp.
NVDA,
-2.03%,
Amazon.com Inc.
AMZN,
+2.17%,
Alphabet Inc.
GOOGL,
-0.27%

GOOG,
-0.32%,
Tesla Inc.
TSLA,
+9.37%
and Meta Platforms Inc.
META,
+1.67%.
We have listed them in the order of their concentration within the Invesco S&P 500 ETF Trust
SPY,
which tracks the S&P 500
SPX.
The U.S. benchmark index is weighted by market capitalization, as is the Nasdaq Composite Index
COMP
and the Russell indexes.

SPY is 27.6% concentrated in the Magnificent Seven. One way to play the same group of 500 stocks but eliminate concentration risk is to take an equal-weighted approach to the index, which has worked well for certain long periods. But here, we’re focusing on how well the concentrated strategy has worked.

Let’s take a look at the group’s concentration in three popular index approaches, then look at long-term performance and consider what happened in 2022 as rising interest rates helped crush the tech sector.

Here are the portfolio weightings for the Magnificent Seven in SPY, along with those of the Invesco QQQ Trust
QQQ,
which tracks the Nasdaq-100 Index
NDX
and the Invesco S&P 500 Top 50 ETF
XLG
:

Company	Ticker	% of SPY	% of QQQ	% of XLG
Apple Inc.	AAPL, +0.16%	7.05%	10.85%	12.46%
Microsoft Cor.	MSFT, +0.72%	6.65%	9.53%	11.76%
Amazon.com Inc.	AMZN, +2.17%	3.30%	5.50%	5.84%
Nvidia Corp.	NVDA, -2.03%	3.02%	4.44%	5.33%
Alphabet Inc. Class A	GOOGL, -0.27%	2.17%	3.12%	3.83%
Alphabet Inc. Class C	GOOG, -0.32%	1.88%	3.11%	3.32%
Tesla Inc.	TSLA, +9.37%	1.79%	3.10%	3.17%
Meta Platforms Inc. Class A	META, +1.67%	1.77%	3.60%	3.12%
Totals		27.63%	43.25%	48.83%
Sources: Invesco Ltd., State Street Corp.

The same group of seven companies (eight stocks with two common share classes for Alphabet) is at the top of each exchange-traded fund’s portfolio, although the top seven for QQQ aren’t in the same order as those for SPY and XLG. QQQ’s weighting was changed recently as the underlying Nasdaq-100 underwent a “special rebalancing” last month.

Here’s a five-year chart comparing the performance of the three approaches. All returns in this article include reinvested dividends.

FactSet

QQQ has been the clear winner for five years, but it is also worth noting how well XLG has performed when compared with SPY. This “top 50” approach to the S&P 500 incorporates many stocks that aren’t listed on the Nasdaq and therefore cannot be included in QQQ, which itself is made up of the largest 100 nonfinancial companies in the full Nasdaq Composite Index
COMP,
+0.45%.

Examples of stocks held by XLG that aren’t held by QQQ include such non-tech stalwarts as Berkshire Hathaway Inc.
BRK.B,
+0.77%,
Johnson & Johnson
JNJ,
+0.79%,
Procter & Gamble Co.
PG,
+0.94%,
Home Depot Inc.
HD,
-0.12%
and Nike Inc.
NKE,
-0.42%.

Now let’s go deeper into long-term performance. First, here are the total returns for various time periods:

ETF	3 Years	5 Years	10 Years	15 Years	20 Years
SPDR S&P 500 ETF Trust SPY	40%	69%	223%	370%	531%
Invesco QQQ Trust QQQ	41%	113%	430%	882%	1,158%
Invesco S&P 500 Top 50 ETF XLG	41%	85%	262%	404%	N/A
Source: FactSet

Click on the tickers for more about each ETF, company or index.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

There is no 20-year return for XLG because this ETF was established in 2005.

For five years and longer, QQQ has been the runaway leader, but for 5, 10 and 15 years, XLG has also beaten SPY handily, with broader industry exposure.

Something else to consider is that during 2022, when SPY was down 18.2%, XLG fell 24.3% and QQQ dropped 32.6%.

For disciplined long-term investors, the tech pain of 2022 may not seem to have been a small price to pay for outperformance. And it may have been easier to take the pounding when holding SPY or even XLG that year.

Here’s a look at the average annual returns for the three ETFs:

ETF	3 years	5 years	10 years	15 years	20 years
SPDR S&P 500 ETF Trust SPY	11.8%	11.0%	12.4%	10.9%	9.6%
Invesco QQQ Trust QQQ	12.0%	16.3%	18.2%	16.4%	13.5%
Invesco S&P 500 Top 50 ETF XLG	12.2%	13.1%	13.7%	11.4%	N/A
Source: FactSet

So the question remains — do you believe that the largest technology companies will continue to lead the stock market for the next decade at least? If so, a more concentrated index approach may be for you, provided you can withstand the urge to sell into a declining market, such as the one we experienced last year.

Here is something else to keep in mind. In a note to clients on Monday, Doug Peta, the chief U.S. investment strategist at BCA, made a fascinating point: “The only novel development is that all the heaviest hitters now hail from Tech and Tech-adjacent sectors and are therefore more prone to move together than they were at the end of 2004, when the seven largest stocks came from six different sectors. “

Nothing lasts forever. Peta continued by suggesting that investors who are tired of big tech taking all the glory “need only wait.”

“[I]f history is any guide, their time at the top of the capitalization scale will be short,” he wrote.

Don’t miss: These four Dow stocks take top prizes for dividend growth

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September 11, 2023

Just how much is the AI discourse helping stocks? An analyst scoured earnings calls for clues

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Talking about AI alone has been pixie dust for big technology stocks this year. And as executives look for any way to shoehorn AI into their business plans, more S&P 500 index companies during their second quarter earnings calls mentioned “AI” than at any point since at least 2010, according to a report published on Friday.

What’s more, according to the report from FactSet, the companies talking about AI — even the ones that aren’t the big, obvious tech names — have seen their stocks fare better than shares of companies that haven’t.

For S&P 500 companies that mentioned “AI” on their second-quarter earnings calls, shares on average since June 30 dipped 0.8%, while rising 13.3% since Dec. 31, FactSet said. For companies that didn’t talk about AI on those calls, shares on average fell a bit more since the end of June — 2.3% — while inching only 1.5% higher since the end of last year.

“Even excluding the ‘Magnificent Seven’ (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla), the S&P 500 companies that cited ‘AI’ still outperformed the S&P 500 companies that did not cite ‘AI’ on average during these periods,” FactSet Senior Earnings Analyst John Butters said in the report.

Meanwhile, Wall Street has long believed corporate America’s profits would rebound for the second half of 2023, after a year ruled by anxieties over inflation’s impact on the economy. Still, that collective bounce-back, as it has through this year, will hinge on strong results from the world’s biggest tech players.

Wall Street analysts expect S&P 500 companies to eke out a 0.5% gain in per-share profit growth during the third quarter, according to the FactSet report. If that number holds, it would be the first quarter of earnings growth since the third quarter of last year.

Those potential gains, however, will largely depend on results from Amazon.com Inc.
AMZN,
+0.28%,
Meta Platforms Inc.
META,
-0.26%
and Alphabet Inc.
GOOG,
+0.73%

GOOGL,
+0.83%
— outsized companies with outsized influence on markets and S&P 500 company financials overall. Financials for those companies have rebounded this year, after big tech retrenched amid a drop-off in pandemic-related digital demand from people spending more time at home and online.

This week in earnings

Three years of supply disruptions have upended the economy and driven prices higher, forcing the Federal Reserve to embark on a delicate effort to bring them lower by discouraging borrowing and spending through a series of interest-rate hikes. But what about the impact on bowling? For answers, we turn to results this week from bowling-alley chain Bowlero Corp.
BOWL,
-3.43%,
which saw a jump in demand following the economy’s reopening but now faces questions about that demand as it shows signs of returning to Earth. Convenience-store chain Casey’s General Stores Inc.
CASY,
+0.85%
and homebuilder Lennar Corp.
LEN,
+0.50%
also report.

The call to put on your calendar

Adobe results: Digital-media, analytics and design firm Adobe Inc. reports quarterly results on Thursday. But Mizuho analyst Gregg Moskowitz said his focus was on the company’s broader digital transformation.

He cited stronger Web traffic, the potential for more deals with bigger customers, signs of improving trends in Adobe’s
ADBE,
-0.02%
analytics segment, as well as the segment that includes design tools like Photoshop. But he said the company’s moves in generative AI could be “a significant growth driver.” Adobe this year unveiled Firefly, an AI image and text-enhancement model that can be incorporated into Adobe’s software. Moskowitz said that “while very early, our checks indicate an already high level of large customer interest in GenAI projects, including Firefly for Enterprise.” However, he said the company’s $20 billion acquisition of online design platform Figma was still “a big question mark,” as costs and regulatory scrutiny accumulate.

The number to watch

Oracle results, supply situation: Cloud and IT-network developer Oracle Corp.
ORCL,
+0.98%
reports results on Monday. Like much of the tech world, Wall Street sees the company as an AI play. But UBS analysts said that as businesses race to secure the components that power AI, Oracle could have an “underappreciated edge” over rivals.

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September 10, 2023
Pelosi says she’ll seek re-election to House seat in 2024

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WASHINGTON (AP) — Former House Speaker Nancy Pelosi said Friday she will run for reelection to another term in Congress as Democrats work to win back the majority in 2024.

Pelosi, 83, made the announcement before labor allies in the San Francisco area district she has represented for more than 35 years.

From the archives (November 2022): House Democratic caucus confers ‘speaker emerita’ title on Pelosi as Jeffries takes up party leadership reins

Also see (November 2022): Nancy Pelosi steps down as leader of House Democrats after two decades

“Now more than ever our City needs us to advance San Francisco values and further our recovery,” Pelosi said in a tweet. “Our country needs America to show the world that our flag is still there, with liberty and justice for ALL. That is why I am running for reelection — and respectfully ask for your vote.”

First elected to Congress in 1987, the Democratic leader made history becoming the first female speaker in 2007, and in 2019 she regained the speaker’s gavel.

Pelosi led the party through substantial legislative achievements, including passage of the Affordable Care Act, as well as turbulent times with two impeachments of former President Donald Trump.

The announcement quells any talk of retirement for the long-serving leader who, with the honorific title of speaker emeritus, remains an influential leader, pivotal party figure and vast fundraiser for Democrats.

Read on:

Nancy Pelosi: Love or hate her, her senior work ethic is admirable

Nancy Pelosi portrait unveiling at Capitol reduces John Boehner to tears

State of the Union guests include Bono, Paul Pelosi and Tyre Nichols’s parents

Paul Pelosi ‘violently assaulted’ after break-in at home, full recovery expected, Nancy Pelosi’s office says

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September 8, 2023
Retire to Arizona? Seriously?

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The traditional Sunbelt retirement has lost its appeal: Brett Arends

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September 8, 2023
Sorry, Elon, a ‘super app’ is never going to fly in the U.S.

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“Super apps” have never truly existed in the United States, and it is apparent at this point that they never will.

That isn’t stopping some executives and investment analysts from still dreaming of becoming one-stop shops for their users’ needs, something only a small handful of apps in Asia have managed to do. The most prominent is Elon Musk, the Tesla Inc. TSLAchief executive who purchased Twitter last year and has proclaimed that he will turn it into an “everything app” called X that resembles super apps in China.

“I…

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September 7, 2023
Is the Stock Market Open Today? These Are the Trading Hours for Labor Day.

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Is the Stock Market Open Today? These Are the Trading Hours for Labor Day.

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September 3, 2023
Biden surveys hurricane’s toll from the sky and on the ground in Florida. DeSantis opts out of meeting.

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President Joe Biden got a look Saturday from the sky at Hurricane Idalia’s impact across a swath of Florida before setting out on a walking tour of a city recovering from the storm.

Notably absent from his schedule was any time with Gov. Ron DeSantis, a Republican presidential candidate who suggested a meeting could hinder disaster-response efforts.

“Our teams worked collectively to find this area. This was a mutually agreed upon area because of the limited impact,” Deanne Criswell, the head of the Federal Emergency Management Agency, told reporters as the president flew from Washington. She said her teams “have heard no concerns over any impact to the communities that we’re going to visit today.”

“ On Friday, hours after President Biden indicated he would be meeting with Gov. DeSantis, the Republican’s office issued a statement saying there were no plans for such a get-together. ”

Air Force One landed at the airport in Gainesville, where the president and first lady Jill Biden boarded Marine One for a helicopter flight to Live Oak, about 80 miles east of Tallahassee, the capital. He awaited a briefing on response and recovery efforts and a session with federal and local officials and first responders before his walk.

On Friday, hours after Biden said he would be meeting with DeSantis, the governor’s office issued a statement saying there were no plans for such a get-together.

“In these rural communities, and so soon after impact, the security preparations alone that would go into setting up such a meeting would shut down ongoing recovery efforts,” DeSantis spokesman Jeremy Redfern said in a statement.

Criswell said aboard the flight that power is being restored and the road are all open in the area where Biden was going. “Access is not being hindered,” she said, adding that her team had been in “close coordination” with the governor’s staff.

Idalia made landfall Wednesday morning along Florida’s sparsely populated Big Bend region as a Category 3 storm, causing widespread flooding and damage before moving north to drench Georgia and the Carolinas.

As Biden left Washington on Saturday morning, he was asked by reporters what happened with that meeting. “I don’t know. He’s not going to be there,” the president said. He later said the federal government would “take care of Florida.”

Previously: Idalia: Biden tells DeSantis Florida will have ‘full support’

Gov. Ron DeSantis looks on in 2021 as President Joe Biden speaks during a Miami Beach briefing on the partial condominium collapse in Surfside, Fla.

AP/Susan Walsh

The political disconnect between both sides is a break from the recent past, since Biden and DeSantis met when the president toured Florida after Hurricane Ian hit the state last year, and following the Surfside condo collapse in Miami Beach in summer 2021. But DeSantis is now running to unseat Biden, and he only left the Republican presidential primary trail with Idalia barreling toward his state.

Putting aside political rivalries following natural disasters can be tricky, meanwhile.

Another 2024 presidential candidate, former Republican New Jersey Gov. Chris Christie, has long been widely criticized in GOP circles for embracing then-President Barack Obama during a tour of damage 2012’s Hurricane Sandy did to his state. Christie was even asked about the incident last month, during the first Republican presidential debate.

Both Biden and DeSantis at first suggested that helping storm victims would outweigh partisan differences. But the governor began suggesting that a presidential trip would complicate response logistics as the week wore on.

“There’s a time and a place to have political season,” the governor said before Idalia made landfall. “But then there’s a time and a place to say that this is something that’s life threatening, this is something that could potentially cost somebody their life, it could cost them their livelihood.”

By Friday, the governor was telling reporters of Biden, “one thing I did mention to him on the phone” was “it would be very disruptive to have the whole security apparatus that goes” with the president “because there are only so many ways to get into” many of the hardest hit areas.

“What we want to do is make sure that the power restoration continues and the relief efforts continue and we don’t have any interruption in that,” DeSantis said.

Biden joked while delivering pizzas to workers at FEMA’s Washington headquarters on Thursday that he’d spoken to DeSantis so frequently about Idalia that “there should be a direct dial” between the pair.

Homeland Security adviser Liz Sherwood-Randall pointed to the experiences after Ian and Surfside collapse in saying earlier this week that Biden and DeSantis “are very collegial when we have the work to do together of helping Americans in need, citizens of Florida in need.”

The post-Idalia political consequences are high for both men.

As Biden seeks re-election, the White House has asked for an additional $4 billion to address natural disasters as part of its supplemental funding request to Congress. That would bring the total to $16 billion and highlight that wildfires, flooding and hurricanes have intensified during a period of climate change, imposing ever higher costs on U.S. taxpayers.

DeSantis has built his White House bid around dismantling what he calls Democrats’ “woke” policies. The governor also frequently draws applause at GOP rallies by declaring that it’s time to send “Joe Biden back to his basement,” a reference to the Democrat’s Delaware home, where he spent much of his time during the early lockdowns of the coronavirus pandemic.

From the archives (January 2022): Critics accuse DeSantis of base pandering as he pushes bill to shield white people in Florida from ‘discomfort’ at school or in job training

Also see (May 2023): Florida school library limits access to Amanda Gorman’s poem for Biden inauguration after parent complaint

But four months before the first ballots are to be cast in Iowa’s caucuses, DeSantis still lags far behind former President Donald Trump, the Republican primary’s dominant early frontrunner. And he has cycled through repeated campaign leadership shakeups and reboots of his image in an attempt to refocus his message.

The super PAC supporting DeSantis’s candidacy also has halted its door-knocking operations in Nevada, which votes third on the Republican presidential primary calendar, and several states holding Super Tuesday primaries in March — a further sign of trouble.

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September 3, 2023
My not-so-empty nest and the dirty little secret that no one talks about

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Ever since my daughters entered high school, I was preparing myself for the dreaded “empty nest.” While it was years away, I worried about how I would adjust to the reality of kids in college and no more time-sucking chores to do.

Even though I have been a working mother in a two-income household, family always was a priority, and I was devoted to caring for our daughters. So, I did wonder how I would adjust to the hole left in my daily calendar when our girls went off to school, graduated or moved on and launched their own lives.

But here’s the dirty little secret that no one talks about until it happens. After decades of marriage and three years of COVID quarantine, I’ve got a different problem: I can’t get my husband to leave the house.

It’s a topic of conversation among my girlfriends, all of us looking for some solitude but instead faced with our husbands, always in their sweatpants, happily hanging out around the house.

Of course, COVID was the trial run, the big disrupter, for being at home. My husband, pre-COVID, was a human tourism brochure, constantly digging up great activities we could go to. Most of them were things we did together but since we weren’t holed up together at home, it didn’t feel stifling.

The COVID pivot

But once COVID hit, all those activities came to a screeching halt and my husband proclaimed that with all the books, CDs and vinyl from his youth along with tchotchkes he’s collected over decades, he could be more than happy to stay home forever and read, listen to music and peruse his collections.

Maybe I have done such a good job of creating a comfortable nest that my husband just doesn’t feel the need to leave. Perhaps COVID caused him to re-evaluate just how important it was to get some fresh — and possibly contaminated — air.

Maybe, like so many men his age, he doesn’t have enough friends — Jane Fonda has expounded on that of late, explaining to anyone who will listen how vital her women friends are to her well-being, while all men want to do is sit next to each other and watch sports or cars or women from afar. And she’s right, women have friends that are soul mates, advisers, co-conspirators. Most men haven’t thrown each other that emotional lifeline.

The timing is unfortunate. I’m working less than full time at this stage of life. Now that I’ve gotten accustomed to my children being gone and look forward to some time to myself, my husband has had to rethink his motivation to get out of the house every day.

Still working, but from home

The fact that he continues to work, but now fully from home, hasn’t helped. After stressful workdays I understand that he also needs some downtime.

Many men are at the stage of life where a decision about whether to retire is also on the table. But here is a word of warning to husbands considering that as their next chapter: Check your Rolodex for friends you want to spend time with because we can’t be your constant companions.

Maybe it’s a “Men Are from Mars, Women Are from Venus” kind of thing. But after watching all the episodes of “The Sopranos” for the first time recently, I feel that if only there was a Bada Bing club — without the Bada Bing. Maybe someone should start a Daddy Daycare to literally take care of Daddy.

Guys of a certain age need a place to meet and schmooze, a clubhouse where someone can make them a plate and just create an inviting space to shoot the breeze. I have no idea what they would talk about, though.

See: ‘It’s just a nice place for an old guy to go, I guess’: Men’s Sheds offer camaraderie and connection

Women know that building deep friendships has paid huge dividends as we all have gotten older. Long-married spouses need more time with their friends — a respite from too much togetherness at home and an opportunity to discuss something beyond what’s for dinner.

I did gently mention a few weeks ago to my husband that he rarely leaves the house these days and maybe he could take an outing one afternoon a week that didn’t include me.

“What do you mean I never leave the house?” he said, incredulous. “I went to Ralph’s just the other day.” And proud hunter-gatherer that he is, we’ve got the boxes and cans of unheard-of sale items we will probably never use to prove it.

Also see: Am I lonesome? ‘I’m fine. I’m fine.’ How single men can prepare to age alone.

Growth of gray divorces

I have found women are often more adventurous, even as we age. We are less willing to just hang back and “relax.” For an increasing number of women, gray divorce has become a term that sociologists are noticing, as more older women have chosen to approach their senior years alone.

See: Gray divorce can be financially devastating — especially for women

For others, independent travel is an answer. There are so many blogs, Instagram and Facebook
META,
+0.17%
accounts by women traveling alone that we are practically our own demographic. In my independent solo travels, I have encountered many women who got tired of asking their reluctant husbands to come along and have happily set out on their own.

Once you arrive in a strange city, it is totally liberating to explore when you don’t have to check in with anyone else about what to do when, how to get wherever, or what time or what to eat each day. And it’s easier to engage in conversations with strangers when you are by yourself. I find I’m more open to those encounters when I’m on my own.

See: This 82-year-old woman ended up traveling alone in France for three weeks. It turned out pretty great.

Dolly Parton’s secret

I heard a story recently from a photographer who was photographing Dolly Parton. The soon-to-be-married photographer asked the performer her secret to her long marriage. Parton’s answer: “Travel a lot. Separately.”

While it’s important to get away, for me, who never described myself as a homebody, it’s essential to have some alone time that doesn’t involve leaving the house. As we age, the one thing that is certain is that the future is unpredictable.

There may come a time when leaving the house is not a safe or viable option. While we are healthy and active enough, let’s give each other the space to enjoy one of life’s guilty pleasures — moments of solitude at home where you have a chance to think, regroup, dream and sometimes to just do absolutely nothing.

The added bonus will be that the time we do spend together will be all the more interesting, with new adventures to hear about.

Iris Schneider has been a journalist and photographer since the 1970s, starting in New York City while teaching at PS 97 on the Lower East Side. She became a staff photographer at the Los Angeles Times in 1980. Her work can be seen on her website or on Instagram (@schneidereye).

This article is reprinted by permission from NextAvenue.org, ©2023 Twin Cities Public Television, Inc. All rights reserved.

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September 3, 2023
Congress returns to face shutdown fears — here’s what it means for markets

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U.S. lawmakers are due to get back to work Tuesday on Capitol Hill, and there are growing expectations that one fruit of their labors will be a partial government shutdown.

“My guess is that we will have a lot of screaming and shouting, and we’ll end up shutting down the government, and a lot of people will be inconvenienced or hurt as a result of doing that, but we’ll do it,” said Republican Sen. Mitt Romney of Utah in an interview with a TV station in his home state.

“And by the way, we’ll shut down government, and then we’ll open it. It’s not like that means that we win. No, no. We just shut it down to show that we’re fighting and making noise.”

Investors should view the shutdown as largely noise, according to a number of analysts in Washington, D.C., who track lawmakers’ moves for Wall Street.

“The stakes here are significantly lower than they were back in June, when we were facing default,” said Ed Mills, Washington policy analyst for Raymond James, referring to lawmakers’ efforts to reach a deal on raising the U.S. debt ceiling in order to avoid a market-shaking default.

“For the most part, this is a 1 or 2 on a scale of 1 to 10 in terms of concern,” Mills told MarketWatch, adding that a U.S. default, on the other hand, would have registered as a 10 on that scale.

There have been six government shutdowns since 1978 that lasted five days or more, and the S&P 500 stock index
SPX
gained in the four most recent shutdowns. Brian Gardner, chief Washington policy strategist at Stifel, emphasized that history in a note to clients.

“Headlines regarding a potential budget impasse will grow and there could be a whiff of panic in the air, but investors should take all of this in stride. Markets tend to ignore the impact of a government shutdown,” Gardner wrote, as he offered the chart shown below.

There have been six shutdowns since 1978 that lasted five days or more. Here’s how stocks handled them.

Stifel

From MarketWatch’s archives (September 2021): Here’s how the stock market has performed in past government shutdowns

And from January 2019: The latest government shutdown is ending, after becoming the longest on record — by a wide margin

How government shutdowns can hurt

Stifel’s Gardner said that while past shutdowns suggest that investors should not panic, there still is some damage.

“There will be extensive media coverage of closed entrances at national parks and other government facilities. Government salaries will not be paid on time which is, certainly, a hardship for some families,” he wrote. At the same time, he emphasized that “much of the country will operate as usual,” including the military
ITA
and air traffic controllers — and missed paychecks will come through once the shutdown ends.

From MarketWatch’s archives (January 2019): How furloughed federal workers can rebuild their finances after the shutdown

“From a market perspective, the biggest concern relating to a government shutdown is that it could delay official government data reports at a pivotal time for the Federal Reserve,” said BTIG’s Issac Boltansky and Isabel Bandoroff in a note.

Related: Jackson Hole recap: Fed rate hikes likely on hold for ‘several meetings’

The BTIG analysts said they expect a shutdown will occur but it should be a “nonevent for markets” overall, because it “would have no impact on debt payments and any missed activity would be settled on the other side of reopening.”

There could be a greater-than-anticipated impact on stocks
DJIA

COMP
if the shutdown lasts for a longer time than expected, and if the deal to end the shutdown features unexpectedly large cuts to spending along with significant repeals of Democrats’ Inflation Reduction Act, according to Mills, the Raymond James analyst.

“The most likely scenario is that it’s days, not weeks,” he said, regarding the length of any shutdown. He also noted it could hit consumer confidence and disrupt the initial-public-offering process for some companies.

What’s likely to happen on Capitol Hill

Only one chamber of Congress is returning to Washington on Tuesday, the day following Labor Day, after an August recess — the Senate. The House of Representatives is slated to resume its work on Capitol Hill a week later, on Sept. 12.

Ahead of their returns, the Biden White House’s budget office has pushed for passage of a short-term funding measure to avoid a partial federal government shutdown on Oct. 1, when the government’s 2024 fiscal year starts.

Such a measure is known as a continuing resolution, or CR, and they’re often used as the House and Senate work to agree on a dozen appropriations bills that would fund government operations for a full fiscal year.

The debt-ceiling deal negotiated between House Speaker Kevin McCarthy and President Joe Biden set spending levels over the next two years, keeping nonmilitary spending for 2024 the same as 2023 levels. But House Republicans have adopted spending targets for the coming fiscal year at levels below the McCarthy-Biden agreement.

McCarthy has raised the idea of a short-term funding bill with his fellow Republicans.

“The thing that Kevin McCarthy is trying to tell his caucus is that we probably need to have a short-term CR, so that the House can finish its work on appropriations bills and establish the best negotiating position,” Mills said.

The House Freedom Caucus, a hardline GOP group known for causing headaches for the chamber’s leaders, has voiced concerns. It said in an Aug. 21 statement that its members want to rein in outlays and will oppose any spending measure that doesn’t include a House-passed bill focused on security at the U.S. southern border. In addition, the group said any spending measure must address the “unprecedented weaponization” of the Justice Department and the FBI, as well as end “woke policies in the Pentagon.”

The most likely path forward is the GOP-run House passes a short-term funding measure that incorporates House Freedom Caucus goals, and then there’s a showdown with the Democratic-controlled Senate over those policy riders, with a short-lived shutdown potentially taking place, Mills said.

The Raymond James analyst said the most likely deal is a budget that’s in line with what was negotiated as part of the debt-limit deal. He also expects supplemental measures that provide relief for areas hit by Hurricane Idalia and the Maui wildfires, as well as some funding for Ukraine as it continues its fight against Russia’s invasion.

“For investors, they have seen McCarthy go up to the brink, go through a tough situation and be able to pull a rabbit out of it,” Mills said, referring to his January battle to become House speaker and the spring’s debt-limit talks. And they’ve “gone through government shutdowns in the past, mostly with very minimal market reaction,” he added.

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September 1, 2023
Intuit braces for negative FTC ruling on free tax prep advertising, vows appeal

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More than a year ago, the Federal Trade Commission sued Intuit Inc., the maker of TurboTax, for allegedly tricking people into thinking they could file their income taxes for free with the tax-preparation giant.

Now, an administrative judge inside the agency has ruled against Intuit — and the company said in a Friday afternoon SEC filing that it’s going to keep fighting the case, even if that means incurring “significant costs.”

“We expect to appeal this decision to the FTC Commissioners and, if necessary, then to a federal court of appeals. We intend to continue to defend our position on the merits of this case,” the company said in its 10-K filing.

“There is no monetary penalty, and Intuit expects no significant impact to its business,” Intuit spokesman Rick Heineman said in a statement. The company will appeal “this groundless and seemingly predetermined decision by the FTC to rule in its own favor,” he said.

Intuit already reached a $141 million settlement with state attorneys general about the allegations of deceptive advertising. The company says it has been clear and upfront with customers about costs. It did not admit liability in the settlement.

The FTC could not be immediately reached for comment Friday afternoon.

In March 2022, the regulator sued Intuit in federal court to immediately stop commercials that repeated “free” over and over. Intuit pulled some of the advertising and after filing season ended, a San Francisco federal judge said the FTC bid for emergency halts didn’t need to happen under the circumstances.

FTC lawyers also lodged an internal administrative complaint. “Intuit widely disseminated ads on television, on the radio, and online that gave consumers the impression that they could use TurboTax for free, even though two-thirds of taxpayers don’t qualify for Intuit’s free TurboTax offerings,” they wrote in administrative complaint proceedings.

The ongoing legal fight is happening while the broader fight over of free tax preparation is heating up. The Internal Revenue Service is planning to test its own pilot program in the upcoming filing season where taxpayers can file their taxes directly with the IRS instead of through tax preparation companies or individual preparers.

TurboTax and the tax software industry oppose the proposed IRS direct file system. So do Congressional Republicans.

One sticking point in the looming government shutdown is how much money the IRS should be getting in its budget. The House appropriations bill would forbid the IRS from using any money to build the direct file system.

Intuit Inc.
INTU,
+1.44%
shares closed 1.4% higher Friday, at $549.60, and the disclosure didn’t seem to be having much effect on the shares in after-hours trading. Shares are up 41% year to date, while the Dow Jones Industrial Average
DJIA
is up 5% and the S&P 500
SPX
is up 17.6%.

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September 1, 2023
Labor Day is just a ‘milestone’ in the marathon to get workers back to the office

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The U.S. Labor Day holiday will mark another milestone in the marathon to bring workers back to the office, but it won’t be a quick fix for landlords, according to Thomas LaSalvia, head of commercial real estate economics at Moody’s Analytics.

Employers from Facebook parent Meta
META,
+0.27%
to Goldman Sachs
GS,
-0.26%
recently laid out mandates for staff to return to the office more frequently, starting this fall, including the big one — the federal government.

“A lot of companies are saying that after Labor Day, ‘We expect more out of you,” LaSalvia said, referring to days in the office. Still, office attendance, he argues, likely only stages a fuller comeback if a job or promotion is on the line.

Amazon.com Inc.’s
AMZN,
+2.18%
Chief Executive Andy Jassy has been trying to drive home the point by warning staff to return at least three days a week, or face the consequences.

That could prove difficult, with Friday’s U.S. jobs report for August expected to show U.S. unemployment at a scant 3.5%, near the lowest levels since the late 1960s, even if hiring has been slowing. The labor market, so far, appears unfazed by the Federal Reserve’s benchmark rate reaching a 22-year high.

It has been a different story for landlords facing a roughly 19% vacancy rate nationally and piles of debt coming due, especially for owners of older Class B and C office buildings with a bleak outlook or properties in cities with wobbling business centers.

See: San Francisco’s office market erases all gains since 2017 as prices sag nationally

As with shopping malls, LaSalvia said it’s largely a problem of oversupply, with many office properties at risk of becoming obsolete as tenants flock to better buildings and locations staging a rebirth. The trend can be traced in leasing data since 2021, with Class A properties in central business districts (blue line) showing a big advantage over less desirable buildings in the heart of cities (orange line).

Return to office isn’t going to save the entire office property market

Moody’s Analytics

“Little by little, we are finding the office isn’t dead,” LaSalvia said, but he also sees more promise in neighborhoods with a new purpose, those catering to hybrid work and communities that bring people together.

Another way to look at the trend is through rents. Manhattan’s Penn Station submarket, with its estimated $13 billion overhaul and neighboring Hudson Yards development, has seen asking rents jump 32% to $74.87 a square foot in the second quarter since the fourth quarter of 2019, according to Moody’s Analytics. That compares with a 2% bump in asking rents in downtown New York City to $61.39 a square foot for the same period.

The push for a return to the office also doesn’t mean a repeat of prepandemic ways. Goldman Sachs analysts estimate that part-time remote work in the U.S. has stabilized around 20%-25%, in a late August report, but that’s still up from 2.6% before the 2020 lockdowns.

Furthermore, the persistence of remote work will likely add another 171 million square feet of vacant U.S. office space through 2029, a period that also will see tenants’ long-term leases expire and many companies opting for less space. The additional vacancies would roughly translate to 57% of Los Angeles roughly 300 million square feet of office space sitting empty.

“The fundamental reason why we had offices in the first place have not completely disintegrated,” LaSalvia said. “But for some of those Class B and C offices, the writing was on the wall before the pandemic.”

U.S. stocks were mixed Thursday, but headed for losses in a tough August for stocks, with the S&P 500 index
SPX
off about 1.5% for the month, the Dow Jones Industrial Average
DJIA
2.1% lower and the Nasdaq Composite
COMP
down 2% in August, according to FactSet.

Related: Some employers mandate etiquette classes as returning office workers walk barefoot, burp loudly and microwave fish

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August 31, 2023
How the stock market’s performance under Biden is worse than under Obama or Trump — in one chart

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U.S. stocks so far haven’t fared as well under President Joe Biden as they did in Donald Trump’s single term or in either of Barack Obama’s two terms.

The research team at Wilshire Indexes is pointing that out this month with the chart below, which features the FT Wilshire 5000
XX:W5000FLT,
an index that aims to reflect the performance of the total U.S. stock market.

U.S. stocks haven’t performed as well in Biden’s current term as they did under Obama or Trump.

Wilshire Indexes

Biden and his allies could be worried about how stocks
SPX
are doing, and it’s possible his administration will try to help the market somehow in 2024, according to Philip Lawlor, managing director of market research at Wilshire Indexes.

“With the 2024 election in sight, the disparity in cumulative equity return generated so far under the Biden administration compared to the superior return trajectory delivered by the Trump and Obama presidencies could cause some concern,” Lawlor wrote. “Electoral cycle logic points to the Biden administration doing its utmost to ensure that the gap closes next year.”

Biden officially launched his re-election campaign in April, and the Democratic incumbent and his cabinet officials have traveled around the U.S. in recent months to talk up their economic policies, including measures such as the Inflation Reduction Act.

When asked about the stock market’s struggles earlier this year, one White House official told MarketWatch that the administration wants to see “strong performance,” but he also noted that roughly half of Americans don’t hold stocks and highlighted other economic indicators.

“The markets are going to go up and down. The main measure that the president has about the state of the economy is, how are middle-class families doing?” said Bharat Ramamurti, deputy director of the White House’s National Economic Council.

“Do they have good-paying jobs that allow them to support themselves and their families? Are they seeing their wages go up? Do they feel like they have good opportunities to advance in their career, good opportunities to switch jobs and make more money? Or live in a better neighborhood, or whatever the case may be? By those metrics, we think that the economy is doing very, very well.”

Republican presidential hopefuls made their economic pitches at a debate on Wednesday night in Milwaukee, with Florida Gov. Ron DeSantis, who is currently running second in GOP primary polls, saying the country “must reverse ‘Bidenomics’ so that middle-class families have a chance to succeed again.” Trump, the current frontrunner in the 2024 primary, skipped the debate and instead released an interview just before the event kicked off.

Betting markets tracked by RealClearPolitics give Biden a 35% chance of winning the 2024 presidential election, while Trump is at 27% and DeSantis is at 6%.

Stocks
DJIA

COMP
were higher in choppy trading Friday after Federal Reserve Chair Jerome Powell warned that the central bank may need to raise interest rates even higher to temper a strong U.S. economy and quell inflation, while assuring investors that the Fed would proceed cautiously.

From MarketWatch’s archives (Dec. 31, 2022): U.S. stocks log their worst year since 2008, crushed by Fed’s rate hikes

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August 25, 2023
3M charged with violating Foreign Corrupt Practices Act in China, pays $6.6M settlement

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3M Co.
MMM,
+0.46%
agreed to pay disgorgement plus prejudgment interest totaling $4.58 million and a $2 million civil penalty for charges that it violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) in its business activities in China, the Securities and Exchange Commission said Friday. The SEC’s order found that 3M’s Chinese subsidiary paid about $1 million for at least 24 trips for Chinese government officials that included tourism activities as part of efforts to persuade them to buy 3M products, from at least 2014 to 2017. Without admitting or denying the findings, 3M agreed to cease and desist from future violations. 3M stock was up by 0.1% on Friday, while the S&P 500
SPX,
+0.67%
rose fractionally.

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August 25, 2023
Heineken is the latest Western corporate giant to exit Russia

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Beer giant Heineken N.V. is the latest Western company to exit Russia, announcing Friday the sale of its Russian operations to Arnest Group for one euro.

Under the terms of the deal, all of Heineken’s
HEIA,
+0.77%
remaining assets, including seven breweries in Russia, will transfer to the new owners, the beer giant said in a statement. The Russian Arnest Group has also taken over responsibility for Heineken’s 1,800 employees in Russia.

Heineken began the process of exiting Russia in March 2022, following that country’s invasion of Ukraine. The company said it expects to incur a total cumulative loss of €300 million ($324.1 million) as a result of its exit.

“We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” Heineken CEO Dolf van den Brink said in a statement. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”

Related: Unilever CEO vows to look at Russian operations with ‘fresh eyes’ as pressure to exit the country mounts

A number of major Western corporations, including U.S. giants Apple Inc.
AAPL,
+1.26%,
Alphabet Inc.
GOOGL,
+0.08%

GOOG,
+0.21%,
Amazon.com Inc.
AMZN,
+1.08%,
International Business Machines Corp.
IBM,
+1.25%
and McDonald’s Corp.
MCD,
+0.79%,
have left Russia in response to Moscow’s February 2022 invasion of Ukraine.

Earlier this week, DP Eurasia, the master franchiser of the Domino’s Pizza Inc.
DPZ,
+0.49%
brand in Turkey, Russia, Azerbaijan and Georgia, also announced its exit from Russia.

But Heineken is “no hero,” according to Mark Dixon, the founder of the Moral Rating Agency, an organization set up after the invasion of Ukraine to examine whether companies were carrying out their promises of exiting Russia. “It failed to leave Russia for a year and a half,” he told MarketWatch via email. “The explanation that it took longer than expected doesn’t hold water, because of course it’s difficult to find a buyer if you remain so long a pariah state.”

The Ukraine Solidarity Project said that Heineken’s move should increase the pressure on companies that remain in Russia, such as consumer-goods giant Unilever PLC
ULVR,
+0.44%.
“The point here is that major companies, like @Heineken, are and have taken loses of hundreds of millions and billions in leaving the Russian market. It is possible,” the Ukraine Solidarity Project tweeted Friday. “We’re sure @Unilever can do it, too.”

Related: WeWork, Carl’s Jr., Unilever and Shell among companies slammed by Yale over operations in Russia

The Ukraine Solidarity Project recently launched a high-profile campaign urging Unilever to get out of Russia, using images of Ukrainian veterans injured in the war with Russia. Last month, activists from the Ukraine Solidarity Project held up a giant poster featuring the veterans outside Unilever’s London headquarters.

The Moral Rating Agency has also reiterated its calls for Unilever to end its Russian operations.

“We have always said we would keep our position in Russia under close review,” a Unilever spokesperson told MarketWatch earlier this month. The spokesperson also directed MarketWatch to a statement on the war in Ukraine that the company released in February 2023.

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August 25, 2023