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  • This record number in Nvidia earnings is a scary sight

    This record number in Nvidia earnings is a scary sight

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    Nvidia Corp.’s financial results had a bit of a surprise for investors, and not on the good side — product inventories doubled to a record high as the chip company gears up for a questionable holiday season.

    Nvidia reported fiscal third-quarter revenue that was slightly better than analysts’ reduced expectations Wednesday, but the numbers weren’t that great. Revenue fell 17% to $5.9 billion, while earnings were cut in half thanks to a $702 million inventory charge, largely relating to slower data-center demand in China.

    Gaming revenue in the quarter fell 51% to $1.57 billion. Nvidia said it is working with its retail partners to help move the currently high-channel inventories.

    While the company was writing off the inventory for China, its own new product inventory was growing. Nvidia
    NVDA,
    -4.54%
    reported that its overall product inventory nearly doubled to $4.45 billion in the fiscal third quarter, compared with $2.23 billion a year ago and $3.89 billion in the prior quarter. Executives cited its coming product launches, designed around its new Ada and Hopper architectures, when asked about the inventory gains.

    In the semiconductor industry, high inventories can make investors nervous, especially after the industry had so many supply constraints in recent years that quickly swung to a glut of chips in 2022. With doubts about demand for gaming cards and consumers’ willingness to spend amid sky-high inflation this holiday season, having all that product on hand just amps up the nerves.

    Full earnings coverage: Nvidia profit chopped in half, but tweaked servers to China offset earlier $400 million warning

    Chief Financial Officer Colette Kress told MarketWatch in a telephone interview Wednesday that the company’s high level of inventories were commensurate with its high levels of revenue.

    “I do believe….it is our highest level of inventory,” she said. “They go hand in hand.” Kress said she was confident in the success of Nvidia’s upcoming product launches.

    Nvidia’s revenue reached a peak in the April 2022 quarter with $8.3 billion, and in the past two quarters revenue has slowed, with gaming demand sluggish amid a transition to a new cycle, and a decline in China data-center demand due to COVID-19 lockdowns and U.S. government restrictions.

    For its data-center customers, the new architectures promise major advances in computing power and artificial-intelligence features, with Nvidia planning to ship the equivalent of a supercomputer in a box with its new products over the next year. Those types of advanced products weigh on inventory totals even more, Kress said, because of the price of the total package.

    “It’s about the complexity of the system we are building, that is what drives the inventory, the pieces of that together,” Kress said.

    Bernstein Research analyst Stacy Rasgon believes that products based on Hopper will begin shipping over the next several quarters, “at materially higher price points.” He said in a recent note that he believes Nvidia’s numbers were likely hitting a bottom in this quarter.

    “We remain positive on the Hopper ramp into next year, and believe numbers have at this point likely reached close to bottom, with new cycles brewing and an attractive secular story even without China potential,” Rasgon said in an earnings preview note Tuesday.

    Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

    Nvidia Chief Executive Jensen Huang reminded investors on a conference call that the company’s inventories are “never zero,” and said everyone is enthusiastic about the upcoming launches. But it doesn’t take too long of a memory to conjure up a time when Nvidia went into a holiday with an inventory backlog that included new architecture and greatly disappointed investors: Four years ago, Huang had to cut his forecast for holiday earnings twice amid a “crypto hangover” with similar dynamics to the current moment

    Investors need faith that this holiday season will not be the same, even as demand for some videogame products declines after a pandemic boom just as the market for cryptocurrency — some of which has been mined with Nvidia products — hits a rough patch. Huang said that Nvidia’s RTX 4080 and 4090 graphics cards based on the Ada Lovelace architecture had an “exceptional launch,” and sold out.

    Nvidia shares gained more than 2% in after-hours trading Wednesday, suggesting that some are betting that this time will be different. That enthusiasm needs to translate into revenue for Nvidia so that this big gain in inventories does not end up being part of another write-down at some point in the future.

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  • Tim Cook has been an excellent leader for Apple — these numbers prove it

    Tim Cook has been an excellent leader for Apple — these numbers prove it

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    How good is a company’s chief executive officer at investing your money most efficiently? This is an important question for long-term investors. It may underline the difference between a steady long-term performer and a flash in the pan.

    And Apple Inc.
    AAPL,
    -4.24%
    now makes up 7% of the SPDR S&P 500 ETF Trust
    SPY,
    -1.03%    ,
    the first and largest exchange-traded fund (with $360 billion in assets), which tracks the benchmark S&P 500
    SPX,
    -1.06%    .
    That’s close to an all-time record, and the iPhone maker has a whopping 14.1% position in the Invesco QQQ Trust
    QQQ,
    -1.95%    ,
    which tracks the Nasdaq-100 Index
    NDX,
    -1.98%    .
    Looking at the full Nasdaq Index
    COMP,
    -1.73%    ,
    which has 3,747 stocks, Apple takes a 13.5% position.

    Apple now makes up 7.3% of the S&P 500 by market capitalization, close to the 8% record it set late in September.


    FactSet

    This is very much an Apple stock market, with the company topping the broad indexes that are weighted by market capitalization. You are likely to be invested in the company indirectly. You also might be feeling Apple’s impact in other ways. Apple’s App Store ecosystem drives more than $600 billion in annual revenue for developers.

    Tim Cook’s tenure as Apple’s CEO has been nothing short of breathtaking when measured by the company’s financial performance. Apple is not one of the fastest-growing companies when measured by sales or earnings — it is too big for that. But its excellent stock performance has reflected Cook’s ability to deploy invested capital with improving efficiency. Cook has also been a market trendsetter in other important ways. He has Apple repurchasing $90 billion of its shares annually, setting the pace for stock buybacks in the market. Cook’s steady hand has also helped Apple withstand the market’s tech wreck and remain a stable pillar for the teetering Nasdaq Composite index generally. For all these reasons, Cook has earned a spot on the MarketWatch 50 list of the most influential people in markets. 

    Apple keeps improving by this important measure

    Investors in the stock market are looking for growth over the long term. The best measure of that is whether or not a company’s share price goes up or down. But Cook isn’t just managing Apple’s stock. Digging a bit deeper into the company’s actual operating performance can provide some insight into what a good job Cook has done.

    What should a corporate manager focus on? The stock price? How about the most efficient and most profitable way to provide goods and services? There are different ways to do this, and Apple has focused on quality, reliability and excellent service to build customer loyalty.

    Apple’s commitment can be experienced by anyone who calls the company for customer service. It is easy to get through to a well-trained representative who will solve your problem. How many companies can say that at a time when it seems many companies cannot even handle answering the phone? 

    Getting back to actual performance, Cook took over as Apple’s CEO in August 2011 when Steve Jobs stepped down. The chart below shows the company’s quarterly returns on invested capital from the end of 2010 through September 2022.

    Apple’s returns on invested capital have increased markedly over the past six years.


    FactSet

    A company’s return on invested capital (ROIC) is its profit divided by the sum of the carrying value of its common stock, preferred stock, long-term debt and capitalized lease obligations. ROIC indicates how well a company has made use of the money it has raised to run its business. It is an annualized figure, but available quarterly, as used in the chart above.

    The carrying value of a company’s stock may be a lot lower than its current market capitalization. The company may have issued most of its shares long ago at a much lower share price than the current one. If a company has issued shares recently or at relatively high prices, its ROIC will be lower.

    A company with a high ROIC is likely either to have a relatively low level of long-term debt or to have made efficient use of the borrowed money.

    Among companies in the S&P 500 that have been around for at least 10 years, Apple placed within the top 20 for average ROIC for the previous 40 reported fiscal quarters as of  Sept. 1.

    As you can see on the chart, Apple’s ROIC has improved dramatically over the past five years, even as the wide adoption of the company’s products and services has led to an overall slowdown in sales growth.

    A quick comparison with other giants in the benchmark index

    It might be interesting to see how Apple stacks up among other large companies, in part because some businesses are more capital-intensive than others. For example, over the past four quarters, Apple’s ROIC has averaged 52.9%, while the average for the S&P 500 has been a weighted 12.1%, by FactSet’s estimate.

    Here are the 10 companies in the S&P 500 reporting the highest annual sales for their most recent full fiscal years, with a comparison of average ROIC over the past 40 reported quarters:

    Company

    		 Ticker

    		 Annual sales ($mil)

    		 Avg. ROIC – 40 quarters

    		 Total Return – 10 Years
    Walmart Inc.

    		 WMT,
    -0.02%         		$572,754

    		 11.0%

    		 142%
    Amazon.com Inc.

    		 AMZN,
    -3.06%         		$469,822

    		 6.8%

    		 693%
    Apple Inc.

    		 AAPL,
    -4.24%         		$394,328

    		 33.0%

    		 721%
    CVS Health Corp.

    		 CVS,
    +1.03%         		$291,935

    		 6.8%

    		 161%
    UnitedHealth Group Inc.

    		 UNH,
    +0.03%         		$287,597

    		 13.7%

    		 1,031%
    Exxon Mobil Corp.

    		 XOM,
    +1.36%         		$280,510

    		 9.9%

    		 85%
    Berkshire Hathaway Inc. Class B

    		 BRK.B,
    -1.94%         		$276,094

    		 8.2%

    		 233%
    McKesson Corp.

    		 MKC,
    -0.61%         		$263,966

    		 6.6%

    		 353%
    Alphabet Inc. Class A

    		 GOOGL,
    -4.07%         		$257,488

    		 16.6%

    		 405%
    Costco Wholesale Corp.

    		 COST,
    +0.57%         		$226,954

    		 16.2%

    		 558%
    Source: FactSet

    Among the largest 10 companies in the S&P 500 by annual sales, Apple takes the top ranking for average ROIC over the past 10 years, while ranking second for total return behind UnitedHealth Group Inc.
    UNH,
    +0.03%
    and ahead of Amazon.com Inc.
    AMZN,
    -3.06%    .
    UnitedHealth has been able to remain at the forefront of managed care during the period of transition for healthcare in the U.S., in the wake of President Barack Obama’s signing of the Affordable Care Act into law in 2010.

    Here’s a chart showing 10-year total returns for Apple, UnitedHealth Group, Amazon and the S&P 500:


    FactSet

    Apple is only slightly ahead of Amazon’s 10-year total return. But what is so striking about this chart is the volatility. Apple has had a smoother ride. During the bear market of 2022, Apple’s stock has declined 18%, while the S&P 500 has gone down 20%, the Nasdaq has fallen 32% (all with dividends reinvested) and Amazon has dropped 45%.

    The broad indexes would have fared even worse so far this year without Apple.

    TO SEE THE FULL MARKETWATCH 50 LIST CLICK HERE

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  • 20 dividend stocks that may be safest if the Federal Reserve causes a recession

    20 dividend stocks that may be safest if the Federal Reserve causes a recession

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    Investors cheered when a report last week showed the economy expanded in the third quarter after back-to-back contractions.

    But it’s too early to get excited, because the Federal Reserve hasn’t given any sign yet that it is about to stop raising interest rates at the fastest pace in decades.

    Below is a list of dividend stocks that have had low price volatility over the past 12 months, culled from three large exchange traded funds that screen for high yields and quality in different ways.

    In a year when the S&P 500
    SPX,
    -0.40%
    is down 18%, the three ETFs have widely outperformed, with the best of the group falling only 1%.

    Read: GDP looked great for the U.S. economy, but it really wasn’t

    That said, last week was a very good one for U.S. stocks, with the S&P 500 returning 4% and the Dow Jones Industrial Average
    DJIA,
    -0.32%
    having its best October ever.

    This week, investors’ eyes turn back to the Federal Reserve. Following a two-day policy meeting, the Federal Open Market Committee is expected to make its fourth consecutive increase of 0.75% to the federal funds rate on Wednesday.

    The inverted yield curve, with yields on two-year U.S. Treasury notes
    TMUBMUSD02Y,
    4.540%
    exceeding yields on 10-year notes
    TMUBMUSD10Y,
    4.064%    ,
    indicates investors in the bond market expect a recession. Meanwhile, this has been a difficult earnings season for many companies and analysts have reacted by lowering their earnings estimates.

    The weighted rolling consensus 12-month earning estimate for the S&P 500, based on estimates of analysts polled by FactSet, has declined 2% over the past month to $230.60. In a healthy economy, investors expect this number to rise every quarter, at least slightly.

    Low-volatility stocks are working in 2022

    Take a look at this chart, showing year-to-date total returns for the three ETFs against the S&P 500 through October:


    FactSet

    The three dividend-stock ETFs take different approaches:

    • The $40.6 billion Schwab U.S. Dividend Equity ETF
      SCHD,
      +0.15%
      tracks the Dow Jones U.S. Dividend 100 Indexed quarterly. This approach incorporates 10-year screens for cash flow, debt, return on equity and dividend growth for quality and safety. It excludes real estate investment trusts (REITs). The ETF’s 30-day SEC yield was 3.79% as of Sept. 30.

    • The iShares Select Dividend ETF
      DVY,
      +0.45%
      has $21.7 billion in assets. It tracks the Dow Jones U.S. Select Dividend Index, which is weighted by dividend yield and “skews toward smaller firms paying consistent dividends,” according to FactSet. It holds about 100 stocks, includes REITs and looks back five years for dividend growth and payout ratios. The ETF’s 30-day yield was 4.07% as of Sept. 30.

    • The SPDR Portfolio S&P 500 High Dividend ETF
      SPYD,
      +0.60%
      has $7.8 billion in assets and holds 80 stocks, taking an equal-weighted approach to investing in the top-yielding stocks among the S&P 500. It’s 30-day yield was 4.07% as of Sept. 30.

    All three ETFs have fared well this year relative to the S&P 500. The funds’ beta — a measure of price volatility against that of the S&P 500 (in this case) — have ranged this year from 0.75 to 0.76, according to FactSet. A beta of 1 would indicate volatility matching that of the index, while a beta above 1 would indicate higher volatility.

    Now look at this five-year total return chart showing the three ETFs against the S&P 500 over the past five years:


    FactSet

    The Schwab U.S. Dividend Equity ETF ranks highest for five-year total return with dividends reinvested — it is the only one of the three to beat the index for this period.

    Screening for the least volatile dividend stocks

    Together, the three ETFs hold 194 stocks. Here are the 20 with the lowest 12-month beta. The list is sorted by beta, ascending, and dividend yields range from 2.45% to 8.13%:

    Company

    		 Ticker

    		 12-month beta

    		 Dividend yield

    		 2022 total return
    Newmont Corp.

    		 NEM,
    -0.78%         		0.17

    		 5.20%

    		 -30%
    Verizon Communications Inc.

    		 VZ,
    -0.07%         		0.22

    		 6.98%

    		 -24%
    General Mills Inc.

    		 GIS,
    -1.47%         		0.27

    		 2.65%

    		 25%
    Kellogg Co.

    		 K,
    -0.93%         		0.27

    		 3.07%

    		 22%
    Merck & Co. Inc.

    		 MRK,
    -1.73%         		0.29

    		 2.73%

    		 35%
    Kraft Heinz Co.

    		 KHC,
    -0.56%         		0.35

    		 4.16%

    		 11%
    City Holding Co.

    		 CHCO,
    -1.45%         		0.38

    		 2.58%

    		 27%
    CVB Financial Corp.

    		 CVBF,
    -1.24%         		0.38

    		 2.79%

    		 37%
    First Horizon Corp.

    		 FHN,
    -0.18%         		0.39

    		 2.45%

    		 53%
    Avista Corp.

    		 AVA,
    -7.82%         		0.41

    		 4.29%

    		 0%
    NorthWestern Corp.

    		 NWE,
    -0.21%         		0.42

    		 4.77%

    		 -4%
    Altria Group Inc

    		 MO,
    -0.18%         		0.43

    		 8.13%

    		 4%
    Northwest Bancshares Inc.

    		 NWBI,
    +0.10%         		0.45

    		 5.31%

    		 11%
    AT&T Inc.

    		 T,
    +0.63%         		0.47

    		 6.09%

    		 5%
    Flowers Foods Inc.

    		 FLO,
    -0.44%         		0.48

    		 3.07%

    		 7%
    Mercury General Corp.

    		 MCY,
    +0.07%         		0.48

    		 4.38%

    		 -43%
    Conagra Brands Inc.

    		 CAG,
    -0.82%         		0.48

    		 3.60%

    		 10%
    Amgen Inc.

    		 AMGN,
    +0.41%         		0.49

    		 2.87%

    		 23%
    Safety Insurance Group Inc.

    		 SAFT,
    -1.70%         		0.49

    		 4.14%

    		 5%
    Tyson Foods Inc. Class A

    		 TSN,
    -0.40%         		0.50

    		 2.69%

    		 -20%
    Source: FactSet

    Any list of stocks will have its dogs, but 16 of these 20 have outperformed the S&P 500 so far in 2022, and 14 have had positive total returns.

    You can click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

    Don’t miss: Municipal bond yields are attractive now — here’s how to figure out if they are right for you

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  • As subscription prices rise, here’s what’s worth streaming in November 2022: ‘The Crown,’ ‘Willow,’ ‘Mythic Quest’ and more

    As subscription prices rise, here’s what’s worth streaming in November 2022: ‘The Crown,’ ‘Willow,’ ‘Mythic Quest’ and more

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    So here’s some bad news and some, well, slightly less bad news.

    First, the bad-bad: Streaming prices are increasing almost across the board (Hulu and Apple TV+ rose in October, Disney+ will rise in December, while Netflix and Prime Video rose earlier this year), putting even more of a crunch on budget-conscious consumers.

    But now the less bad: If you can put up with commercials, there are cheaper, ad-supported versions coming your way (Netflix on Nov. 3, Disney+ in December).

    Of course, the other money-saving solution is to double down on a churn-and-return strategy and cut down on recurring subscriptions even more.

    Each month, this column offers tips on how to maximize your streaming and your budget, rating the major services as a “play,” “pause” or “stop” — similar to investment analysts’ traditional ratings of buy, hold and sell. We also pick the best content to help you make your monthly decisions.

    Consumers can take full advantage of cord-cutting by churning and returning — adding and dropping streaming services each month. All it takes is good planning. Keep in mind that a billing cycle starts when you sign up, not necessarily at the beginning of the month, and keep an eye out for lower-priced tiers, limited-time discounts, free trials and cost-saving bundles. There are a lot of offers out there, but the deals don’t last forever.

    Here’s a look at what’s coming to the various streaming services in November 2022, and what’s really worth the monthly subscription fee.

    Netflix ($6.99 a month for basic with ads starting Nov. 3, $9.99 basic without ads, $15.49 standard without ads, $19.99 premium without ads)

    Netflix has another really good month coming up.

     “The Crown” (Nov. 9), returns for its fifth season, set this time in the 1990s as scandals involving Charles and Diana plaster London’s tabloids and the role of Britain’s monarchy in modern society is thrown into question. Imelda Staunton takes over the role of Queen Elizabeth, with Dominic West as Prince Charles, Elizabeth Debicki as Princess Diana and Jonathan Pryce as Prince Philip. Controversy has already erupted over the new season, which will include Diana’s tragic death, as some have spoken out about the show’s increasingly blurry line between truth and fiction. Pryce recently told Vanity Fair, ““The vast majority of people know it’s a drama,” not a documentary. And it’s a pretty good drama.

    Netflix
    NFLX,
    -0.41%
    hasn’t had much success developing original sitcoms, but is hoping to finally break through with “Blockbuster” (Nov. 3), a workplace comedy set at the last Blockbuster video store in America, starring network sitcom veterans Randall Park (“Fresh Off the Boat”) and Melissa Fumero (“Brooklyn Nine-Nine”). There’s also “Wednesday” (Nov. 23), a horror-comedy series from Tim Burton starring Jenna Ortega as the terrifyingly snarky teen Wednesday Addams, with Catherine Zeta-Jones and Luis Guzman playing her creepy and kooky parents, Morticia and Gomez; and the third and final season of the dark comedy “Dead to Me” (Nov. 17), starring Christina Applegate and Linda Cardellini, which returns after a two-and-a-half-year layoff.

    On the drama side, there’s “1899” (Nov. 17), a mystery-horror series set aboard a transatlantic steamer ship at the turn of the last century, from the makers of the mind-bending German sci-fi series “Dark” — and if it’s even half as trippy and addictive, it’ll be terrific; Part 1 of the fourth season of the supernatural drama “Manifest” (Nov. 4), which Netflix rescued from NBC’s cancellation; and Season 6 of the soapy Spanish high-school drama “Elite” (Nov 18).

    More: Here’s everything new coming to Netflix in November 2022, and what’s leaving

    There’s also the timely documentary “FIFA Uncovered” (Nov. 9), digging into the scandal-plagued organization behind the World Cup; “Pepsi, Where’s My Jet” (Nov. 17), a documentary about a man who sued Pepsi in the 1980s to get a free Harrier fighter jet; the fifth installment of “The Great British Baking Show: Holidays” (Nov. 18); and the new standup comedy special from the outgoing “Daily Show” host, “Trevor Noah: I Wish You Would” (Nov. 22).

    On the movie front, there’s “Enola Holmes 2” (Nov. 4), a sequel to the hit 2020 movie about Sherlock Holmes’ younger sister, played by Millie Bobby Brown (“Stranger Things”), as young detective Enola sets out to investigate her first case; “Slumberland” (Nov. 18), a comedy adventure about a young girl exploring the dreamworld, starring Mallow Barkley and Jason Mamoa; and Lindsay Lohan is back with a Christmas rom-com, “Falling for Christmas” (Nov. 10).

    Who’s Netflix for? Fans of buzz-worthy original shows and movies.

    Play, pause or stop? Play. When it’s at the top of its game, as it is again this month, Netflix is a must-have, at whatever price tier.

    Disney+ ($7.99 a month)

    The TV world has been abuzz about prequels for the past few months, but it’s all about sequels in November for Disney+.

    The biggest of the bunch is “Willow” (Nov. 30), a follow-up series to the cult-favorite 1988 fantasy movie of the same name. The magical adventure is set 20 years after the events of the film, and Warwick Davis returns as farmer-turned-sorcerer Willow Ufgood, who leads an unlikely group of heroes on a quest to save their world. It should be fun for the whole family.

    Disney
    DIS,
    +1.45%
    also has “Disenchanted” (Nov. 18), a sequel to the 2007 hit movie “Enchanted.” The musical fantasy is set 10 years after the happily-ever-after ending, with Giselle (Amy Adams) questioning her happiness and inadvertently setting her two worlds askew. Patrick Dempsey, James Marsden and Maya Rudolph co-star. And then there’s “The Santa Clauses” (Nov. 16), as Tim Allen reprises his role of Santa Claus, who’s now facing retirement and looking for a replacement, in a new miniseries spinoff of the family-movie trilogy.

    Also of note: “The Guardians of the Galaxy Holiday Special” (Nov. 25), as Star-Lord and the gang kidnap Kevin Bacon; the live performance “Elton John: Live from Dodger Stadium” (Nov. 20), the pop icon’s final show in North America; and weekly episodes of “Dancing With the Stars” (season finale Nov. 21), the “Star Wars” prequel “Andor” (season finale Nov. 23) and “The Mighty Ducks: Game Changers” (season finale Nov. 30).

    And heads up: Prices for the ad-free tier will jump to $10.99 a month in December, after Disney+ launches its ad-supported tier for $7.99 a month.

    Who’s Disney+ for? Families with kids, hardcore “Star Wars” and Marvel fans. For people not in those groups, Disney’s library can be lacking.

    Play, pause or stop? Play. There’s something for everyone in the household — even grumps who aren’t “Star Wars” fans can get into “Andor,” which absolutely works as a dark, gripping, spy thriller. Meanwhile, fans are realizing it just might be the best “Star Wars” series or movie ever made.

    HBO Max ($9.99 a month with ads, or $14.99 without ads)

    HBO Max is bringing back  “The Sex Lives of College Girls” (Nov. 17) for its second season. Created by Mindy Kaling and Justin Noble (who also teamed on Netflix’s “Never Have I Ever”), the ensemble comedy about four college roommates picks up right after Thanksgiving break, with the girls organizing a “sex-positive” male strip show. It’s sharp, funny, and less cringey than its title suggests.

    Then there’s “A Christmas Story Christmas” (Nov. 17), a nostalgic sequel to the 1983 classic, starring Peter Billingsley as a grown-up Ralphie who returns to his hometown to try to give his kids a perfect Christmas. It’s risky reviving such a beloved movie, and this could either be wonderful or terrible, there’s really no middle ground.

    HBO Max also has a slew of documentaries, including “Love, Lizzo” (Nov. 24), about the pop superstar’s inspiring life story; “Shaq” (Nov. 23), a four-part docuseries chronicling the rise to superstardom of NBA Hall of Famer Shaquille O’Neal; “Low Country: The Murdaugh Dynasty” (Nov. 3), a true-crime series about a South Carolina lawyer’s scandalous fall; and “Say Hey, Willie Mays!” (Nov. 8), a film exploring the life, career and social impact of the greatest baseball player who ever played the game.

    See more: Here’s everything new coming to HBO Max in November 2022, and what’s leaving

    And every week brings new episodes of Season 2 of the very dark vacation comedy “The White Lotus,” Season 3 of “Pennyworth: The Origin of Batman’s Butler” and Season 2 of the cult documentary “The Vow.”

    Who’s HBO Max for? HBO fans and movie lovers.

    Play, pause or stop? Pause and think it over. “The White Lotus” and “The Sex Lives of College Girls” are both worth watching, but beyond that it’s kinda “meh” this month. And Max is too pricey for “meh.”

    Amazon Prime Video ($14.99 a month)

    Amazon
    AMZN,
    -6.80%
    is bringing the star power in November, starting with the Western drama series “The English” (Nov. 11), starring Emily Blunt as an aristocratic Englishwoman who teams with a Pawnee scout (Chaske Spencer) on a mission to cross the violent 1890s American frontier. It looks stylish and bloody — and promising.

    Meanwhile, James Corden and Sally Hawkins star in “Mammals” (Nov. 11), a dark comedy series about modern marriage; pop star-turned-actor Harry Styles stars in “My Policeman” (Nov. 4), a drama about forbidden romance that’s getting very “meh” reviews in its theatrical release; and Kristen Bell, Ben Platt and Allison Janney star in “The People We Hate at the Wedding” (Nov. 18), a raunchy comedy set at a dysfunctional family wedding.

    More: Here’s what’s coming to Amazon’s Prime Video in November 2022

    There’s also NFL Thursday Night Football every week, and new episodes of the intriguing sci-fi drama “The Peripheral,” which is giving very “Westworld”-but-slightly-less-confusing vibes.

    Who’s Amazon Prime Video for? Movie lovers, TV-series fans who value quality over quantity.

    Play, pause or stop? Pause. There’s good stuff here, but nothing that feels must-see.

    Paramount+ ($4.99 a month with ads but not live CBS, $9.99 without ads)

    Taylor Sheridan (“Yellowstone,” “1883,” “Mayor of Kingstown”) has another new series: “Tulsa King” (Nov. 13), starring Sylvester Stallone as a former New York mafia capo who gets freed from prison after 25 years and settles in Tulsa, Okla., to build a criminal empire of his own. Showrunner Terence Winter (“The Sopranos,” “Boardwalk Empire”) knows a thing or two about mob shows, and this one could be good.

    Paramount+ also has the spinoff series “Criminal Minds: Evolution” (Nov. 24), about an elite team of FBI profilers unraveling a network of serial killers; the family movie “Fantasy Football” (Nov. 25), about a girl who can magically control how her NFL-player dad performs on the field; and the series finale of “The Good Fight” (Nov. 10), which its creators promise will be “cataclysmic.”

    There’s also the Thanksgiving Day Parade (Nov. 24) and a ton of live sports, including college football on Saturdays, NFL football on Sundays (and Thanksgiving Day), and group-stage matches for UEFA’s Champions and Europe leagues.

    Who’s Paramount+ for? Gen X cord-cutters who miss live sports and familiar Paramount Global 
    PARA,
    +3.37%
     broadcast and cable shows.

    Play, pause or stop? Pause. Besides its solid live-sports lineup, it’s a good time to catch up and binge “The Good Fight,” and “Tulsa King” could be worth a watch too.

    Hulu ($7.99 a month with ads, or $14.99 with no ads)

    Hulu has a couple of interesting offerings in November, but nothing that screams must-see. Yet, at least.

    FX’s “Fleishman Is in Trouble” (Nov. 17) stars Jesse Eisenberg as a newly divorced dad whose promiscuous dive into app-based dating is disrupted when his ex-wife disappears and leaves him with their kids. Claire Danes, Lizzy Caplan and Adam Brody co-star in the eight-episode drama, which is based on Taffy Brodesser-Akner’s best-selling novel.

    There’s also “Welcome to Chippendales” (Nov. 22), a true-crime series starring Kumail Nanjiani as the immigrant founder of the 1980s male-stripper franchise, which chronicles his business empire’s rise and fall amid a blizzard of sex, drugs and violence.

    Meanwhile, Adam McKay (“The Big Short”) and Billy Corben (“Cocaine Cowboys”) have the documentary  “God Forbid: The Sex Scandal That Brought Down a Dynasty” (Nov. 1), about the private life of Christian televangelist and former Liberty University president Jerry Falwell Jr. and his very public downfall.

    See: Here’s everything new on Hulu in November 2022 — and what’s leaving

    There are also the final two episodes of “Atlanta” (series finale Nov. 10), whose fourth season has returned to brilliance after an underwhelming Season 3 over the summer, and new episodes every week of ABC’s “Abbott Elementary.”

    Who’s Hulu for? TV lovers. There’s a deep library for those who want older TV series and next-day streaming of many current network and cable shows.

    Play, pause or stop? Stop. While you won’t regret paying for Hulu if you already do, there’s not a lot to lure new subscribers this month.

    Apple TV+ ($6.99 a month)

    Apple TV+ is too inconsistent to be worth the $2-a-month price hike that was just announced, so it’s best to strategically plan when to stream — wait until a good series or two are completed, for example, and binge them all in a month, then cancel. Repeat as needed.

    And it actually is a decent month for Apple. Its second-best comedy, “Mythic Quest” Nov. 11), returns for its third season, with Ian (Rob McElhenny) and Poppy (Charlotte Nicdao) gearing up for war against their old videogame company. With a perfect blend of humor and heart, it’s one of the best workplace comedies on TV.

    Meanwhile, Season 2 of “The Mosquito Coast” (Nov. 4) finds the fugitive Fox family finally hiding out in Central America, after a tedious premise-pilot of a first season that wasted good actors (Justin Theroux and Melissa George) and beautiful cinematography with nonsensical plot twists, while the action series “Echo 3” (Nov. 23) stars Luke Evans and Michiel Huisman as former soldiers trying to rescue a kidnapped scientist in the jungles of South America.

    Apple
    AAPL,
    +7.56%
    also has a pair of high-profile original movies: “Causeway” (Nov. 3), starring Jennifer Lawrence as a former soldier struggling to adjust to civilian life in New Orleans, co-starring Brian Tyree Henry, and “Spirited” (Nov. 18), a musical twist on “A Christmas Carol” told from the ghosts’ point of view, starring Ryan Reynolds and Will Ferrell.

    Who’s Apple TV+ for? It offers a little something for everyone, but not necessarily enough for anyone — although it’s getting there.

    Play, pause or stop? Stop. There’s just not enough to justify a month-to-month subscription. December is a better bet, with “Mythic Quest” and a new season of “Slow Horses” running concurrently.

    Peacock (free basic level, Premium for $4.99 a month with ads, or $9.99 a month with no ads)

    The World Cup from Qatar (Nov. 20-Dec. 18) will be broadcast on Fox and FS1, so cord-cutters are out of luck, unless you subscribe to a live-streaming service like Hulu Live or YouTube TV. However, Peacock will stream every match in Spanish, which could be a decent Plan B for soccer fans.

    And that “it’ll-do-but-it’s-not-exactly-what-I’m-looking-for” description is the running theme for Peacock. November will bring a handful of originals that are unlikely to move the needle, subscriber-wise: There’s the musical-comedy spinoff series “Pitch Perfect: Bumper in Berlin” (Nov. 23), starring Adam Devine; “The Calling” (Nov. 10), a crime drama about a religious cop, from David E. Kelley and Barry Levinson; the Macy’s Thanksgiving Day Parade (Nov. 24); and the streaming debut of Jordan Poole’s sci-fi/horror hit “Nope” (Nov. 18).

    Sports-wise, Peacock has the National Dog Show (hey, it’s a competition!) on Nov. 24, NFL Sunday Night Football every weekend, a full slate of English Premier League matches through Nov. 13, and a ton of golf and winter sports.

    Who’s Peacock for? If you have a Comcast 
    CMCSA,
    -0.06%
     or Cox cable subscription, you likely have free access to the Premium tier (with ads) — though reportedly not for much longer. The free tier is almost worthless, but the recent addition of next-day streaming of NBC and Bravo shows (like “Saturday Night Live” and “Real Housewives”) bolsters the case for paying for a subscription. Still, Peacock is still not really necessary unless you need it for sports.

    Play, pause or stop? Stop. There’s not a lot that’s particularly enticing right now, even on the sports side.

    Discovery+ ($4.99 a month with ads, or $6.99 with no ads)

    More of the same in November for Discovery+, which is a feature, not a bug. Highlights include the vegan cook-and-chat show “Mary McCartney Serves It Up” (Nov. 1); “Tut’s Lost City Revealed” (Nov. 3), about a 3,000-year-old Egyptian city recently discovered by archaeologists; “Vardy vs Rooney: The Wagatha Trial” (Nov. 19), the inside story of the tabloid-fodder “Wagatha” scandal between the wives of English soccer stars; and Season 2 of the excellent CNN food series “Stanley Tucci: Searching for Italy” (Nov. 30). Full disclosure: There are also a handful of sappy holiday movies guest-starring some HGTV and Food Network stars, but they look terrible and I expect better from you, a discerning reader/viewer.

    Who’s Discovery+ for? Cord-cutters who miss their unscripted TV or who are really, really into “90 Day Fiancé.”

    Play, pause or stop?  Stop. Discovery+ is still fantastic for background TV, but it’s not worth the cost. Still, it should add value when the reconfigured Warner Bros. Discovery 
    WBD,
    +3.68%
      combines it with HBO Max next summer.

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  • ‘He’s not willing to live in my house because it has fewer amenities’: My boyfriend wants me to move in and pay half his monthly costs. Is that fair?

    ‘He’s not willing to live in my house because it has fewer amenities’: My boyfriend wants me to move in and pay half his monthly costs. Is that fair?

    [ad_1]

    Dear Quentin,

    My boyfriend owns a house with a 30-year mortgage balance of $150,000 on a 4% interest rate. He has $275,000 in cash and retirement accounts. He is retired.

    My house is paid off. I have $50,000 in cash and retirement accounts. I would like to retire within one to two years.

    We wish to cohabitate but have not been able to agree on a fair “rent” to pay. He is not willing to live in my house because it has fewer amenities. 

    “‘He believes I should pay half of his monthly cost at his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes to have cash. ‘”

    He believes I should pay half of his monthly cost at his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes to have cash. 

    I have forgone that luxury and paid off my mortgage. I am now working on building my savings. I don’t feel it is fair for me to pay half of the mortgage interest expense. 

    I don’t know what repair and maintenance costs should be expected from me, if I have no equity in his house. There are many points of view, none of which feels fair.

    These are the options he set forth:

    · I live in his house and thus get to rent mine out. Pay him half of what I net from that rental.

    · Pay half of the actual costs of living expenses and upkeep on his house while I live there.

    · Pay him what I pay to live in my current home for taxes, insurance, and utilities: $800/month.

    What say you, Moneyist?

    House Owner & Girlfriend 

    Dear House Owner,

    I’m sure your house is just as nice. And just because he believes you should pay half his costs, does not make it so. If you are paying no mortgage on your own home, I don’t believe you should pay one red cent more to live in his home. 

    That is to say, you should not come out of this arrangement paying more, just because (a) he would like you to live in his home and (b) he would like you to help him pay off his mortgage, or his tax and maintenance.

    You both made different choices: Yours was to have a home that’s free-and-clear of a mortgage, so you can spend this time building up your savings for retirement and/or a rainy day. 

    You have worked hard to pay off your mortgage, and you have $50,000 in savings, less than 20% of your boyfriend’s savings. He has $150,000 left on his mortgage, and that’s his choice.

    “If his aim is to find help to pay off half of his mortgage, he can find a tenant to do that for him. ”

    You are not the answer to his long-term financial plans, you are his partner in life. If his aim is to find help to pay off half of his mortgage, he can find a tenant to do that for him. What do you expect of you? Forget what he expects.

    By the way he is approaching this arrangement, it seems like he wants the equivalent of a detergent and a fabric softener — a girlfriend and a tenant in one handy bottle to keep his financial plans smooth and clean.

    Bottom line: You should not compromise any plans to build your nest egg. The lady’s not for turning. Only acquiesce to his plan if — with the help of an actual tenant in your home — it helps you too. 

    In other words, the desired outcome for you is more important than the suggestions he has put forward. He could save $600 a month! That’s his business. Not yours. What do you want to have in your pocket every month?

    Figure out what you want, and then work your way backwards based on that goal. For instance, if you can pay him $800 a month, charge $1,600 rent for your home, and put $800 towards your savings, do that.

    You’ve come a long way. Don’t let these negotiations scupper that.

    Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

    The Moneyist regrets he cannot reply to questions individually.

    By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

    Also read:

    I built a property portfolio with 23 units while we were dating. How much should I give to my fiancé in our prenup?

    ‘We will not outlive our money’: How can we give $10,000 to our nieces and nephews without offending the rest of the family?

    ‘S‘I hate to be cheap’: Is it still acceptable to arrive at a friend’s house for dinner with just one bottle of wine?

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  • Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief

    Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief

    [ad_1]

    Might the bear market’s losses at its recent low have gotten so bad that it was actually good news?

    Some eager stock bulls I monitor are advancing this convoluted rationale. The outline of their argument is that when things get bad enough, good times must be just around the corner.

    But their argument tells us more about market sentiment than its prospects.

    At the market’s recent closing low, the S&P 500
    SPX,
    +1.19%
    had dropped to 25% below its early-January high. According to one version of this “so-bad-it’s-good” argument, the stock market in the past was a good buy whenever bear markets fell to that threshold. Following those prior occasions, they contend, the market was almost always higher in a year’s time.

    This is not an argument you’d normally expect to see if the recent low represented the final low of the bear market. On the contrary, it fits squarely within the third of the five-stage progression of bear market grief, about which I have written before: denial, anger, bargaining, depression and acceptance.

    With their argument, the bulls are trying to convince themselves that they can survive the bear market, rationalizing that the market will be higher in a year’s time. As Swiss-American psychiatrist Elisabeth Kübler-Ross put it when creating this five-stage scheme, the key feature of the bargaining stage is that it is a defense against feeling pain. It is far different than the depression and eventual acceptance that typically come later in a bear market.

    Though not all bear markets progress through these five stages, most do, as I’ve written before. Odds are that we have two more stages to go through. That suggests that the market’s rally over the past couple of weeks does not represent the beginning of a major new bull market.

    Numbers don’t add up

    Further support for this bearish assessment comes from the discovery that the bulls’ argument is not supported historically. Only in relatively recent decades was the market reliably higher in a year’s time following occasions in which a bear market had reached the 25% pain threshold. It’s not a good sign that the bulls are basing their optimism on such a flimsy foundation.

    Consider what I found upon analyzing the 21 bear markets since 1900 in the Ned Davis Research calendar in which the Dow Jones Industrial Average
    DJIA,
    +1.34%
    fell at least 25%. I measured the market’s one-year return subsequent to the day on which each of these 21 bear markets first fell to that loss threshold. In seven of the 21 cases, or 33%, the market was lower in a year’s time.

    That’s the identical percentage that applies to all days in the stock market over the past century, regardless of whether those days came during bull or bear markets. So, based on the magnitude of the bear market’s losses to date, there’s no reason to believe that the market’s odds of rising are any higher now than at any other time.

    This doesn’t mean that there aren’t good arguments for why the market might rise. But the 25%-loss concept isn’t one of them.

    Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

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  • Snap investors, do you still trust Evan Spiegel?

    Snap investors, do you still trust Evan Spiegel?

    [ad_1]

    When Snap Inc. went public in 2017, this column boiled down the entire investment opportunity to one, simple question: Do you trust Evan Spiegel?

    As Snap
    SNAP,
    -0.64%
    stock heads toward its lowest prices since March 2020, and potentially even lower, that question is even more important, and answering “yes” should be even harder.

    Three months ago, amid the beginning of a huge slowdown in the ad business, Snap initiated a unique dividend meant to ensure that the founders maintained control of the company, even if they sold their stock — protecting themselves. Then in August, news came that Snap was laying off one in five employees. As Snap again reported disappointing results Thursday and saw the stock plunge again, the company decided now was the time to initiate a stock buyback plan, promising to spend up to $500 million to offset the dilution from employee stock plans — in the past nine months, Snap has spent $937 million on stock-based compensation.

    On the face of it, this seems like an investor-friendly approach — Barron’s pointed out earlier this year that investors were suffering while employees were faring better with the hefty stock-comp plans. But it’s also worth pointing out who the biggest investors in Snap are: Spiegel and his co-founder Bobby Murphy.

    As the company’s largest individual shareholders, Spiegel and Murphy are among the key beneficiaries of Snap’s plans to buy back stock, which usually leads to a boost in the stock price. Those two still control over 99% of the voting power of the company’s capital stock, and as the parent of Snapchat reminded investors in its annual report, “Mr. Spiegel alone can exercise voting control over a majority of our outstanding capital stock.”

    Shares of Snap tumbled an additional 25% to just under $8 in after-hours trading, putting them near the lowest prices since March 2020. On Thursday, the company ended regular trading hours with a market capitalization of around $17.91 billion, but that was headed toward $13 billion with the after-hours collapse.

    Besides protecting themselves and their investment, Snap’s executives have shown little ability to head off big issues, nor offer any worthwhile solutions to the current ad downturn. In the third quarter, its revenue grew a paltry 6%, down from the most recent second-quarter revenue growth of 13%. Snap appears to be in a steady revenue slowdown, from its peak growth of 116% in the June 2021 quarter.

    Snap has blamed both privacy changes that Apple Inc.
    AAPL,
    -0.33%
    made to the iPhone that affected ad tracking, and more recently, the macroeconomic advertising climate, while avoiding one of the biggest factors — the rise of TikTok. Top executives didn’t seem to see any of those challenges coming early enough, and did not do enough about them once they did.

    “The company was slow to react — or acknowledge — the significant headwinds faced by privacy initiatives, compounded by competition, and more recently macro headwinds,” Colin Sebastian, an analyst at Baird Equity Research, wrote in a note.

    The competition factor, mostly from China’s TikTok, was addressed briefly on the company’s call with analysts, but was not really acknowledged by Snap leaders.

    “We believe that the differentiated nature of our service is what’s contributing to the daily active-user growth, which grew 19% year-over-year to 363 million daily active users,” Spiegel said. “In terms of the content specifically, I think there’s a lot of headroom, of course, to continue to grow content engagement.”

    In the company’s shareholder letter, Spiegel acknowledged that the results were “far from our aspirations,” and that Snap would use this time of reduced demand “to pull forward and accelerate changes to our advertising platform and auction dynamics that we believe will deliver better results for our advertising partner.”

    Spiegel is known for going by his own instincts and not listening to other executives, employees or even market forces, as was noted in a Wall Street Journal report that detailed his push for an unsuccessful product redesign in 2018. While the company appeared to have snapped back from that debacle last year, it is now facing a fiercer rival for young people on social media in the form of TikTok.

    Investors who still have patience to wait and see if this stock ever recovers will also have to stick around with Spiegel — and as our IPO column noted — Snap is unapologetically founder-controlled. No change at the top can ever come unless it is initiated by Spiegel himself. Investors have to make a leap of faith that Spiegel can turn things around, but they need to remember that Spiegel usually thinks about himself first.

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  • These 27 stocks can give you a more diversified portfolio than the S&P 500 — and that’s a key advantage right now

    These 27 stocks can give you a more diversified portfolio than the S&P 500 — and that’s a key advantage right now

    [ad_1]

    You probably already know that because of market-capitalization weighting, a broad index such as the S&P 500
    SPX,
    -0.67%
    can be concentrated in a handful of stocks. Index funds are popular for good reasons — they tend to have low expenses and it is difficult for active managers to outperform them over the long term.

    For example, look at the SPDR S&P 500 ETF Trust
    SPY,
    -0.71%    ,
    which tracks the S&P 500 by holding all of its stocks by the same weighting as the index. Five stocks — Apple Inc.
    AAPL,
    +0.08%    ,
    Microsoft Corp.
    MSFT,
    -0.85%    ,
    Amazon.com Inc.
    AMZN,
    -1.11%    ,
    Alphabet Inc.
    GOOG,
    -1.08%

    GOOGL,
    -1.13%
    and Tesla Inc.
    TSLA,
    +0.84%    ,
    make up 21.5% of the portfolio.

    But there are other considerations when it comes to diversification — namely, factors. During an interview, Scott Weber of Vaughan Nelson Investment Management in Houston explained how groups of stock and commodities can move together, adding to a lack of diversification in a typical portfolio or index fund.

    Weber co-manages the $293 million Natixis Vaughan Nelson Select Fund
    VNSAX,
    -0.96%    ,
    which carries a five-star rating (the highest) from investment-researcher Morningstar, and has outperformed its benchmark, the S&P 500.

    Vaughan Nelson is a Houston-based affiliate of Natixis Investment Managers, with about $13 billion in assets under management, including $5 billion managed under the same strategy as the fund, including the Natixis Vaughan Nelson Select ETF
    VNSE,
    -0.87%    .
    The ETF was established in Sept, 2020, so does not yet have a Morningstar rating.

    Factoring-in the factors

    Weber explained how he and colleagues incorporate 35 factors into their portfolio selection process. For example, a fund might hold shares of real-estate investment trusts (REITs), financial companies and energy producers. These companies are in different sectors, as defined by Standard & Poor’s. Yet their performance may be correlated.

    Weber pointed out that REITs, for example, were broken out of the financial sector to become their own sector in 2016. “Did that make REIT’s more sensitive to interest rates? The answer is no,” he said. “The S&P sector buckets are somewhat  better than arbitrary, but they are not perfect.”

    Of course 2022 is something of an exception, with so many assets dropping in price at the same time. But over the long term, factor analysis can identify correlations and lead money managers to limit their investments in companies, sectors or industries whose prices tend to move together. This style has helped the Natixis Vaughan Nelson Select Fund outperform against its benchmark, Weber said.

    Getting back to the five largest components of the S&P 500, they are all tech-oriented, even though only two, Apple and Microsoft, are in the information technology sector, while Alphabet is in the communications sector and Tesla is in the consumer discretionary sector. “Regardless of the sectors,” they tend to move together, Weber said.

    Exposure to commodity prices, timing of revenue streams through economic cycles (which also incorporates currency exposure), inflation and many other items are additional factors that Weber and his colleagues incorporate into their broad allocation strategy and individual stock selections.

    For example, you might ordinarily expect inflation, real estate and gold to move together, Weber said. But as we are seeing this year, with high inflation and rising interest rates, there is downward pressure on real-estate prices, while gold prices
    GC00,
    -0.01%
    have declined 10% this year.

    Digging further, the factors also encompass sensitivity of investments to U.S. and other countries’ government bonds of various maturities, credit spreads between corporate and government bonds in developed countries, exchange rates, and measures of liquidity, price volatility and momentum.

    Stock selection

    The largest holding of the Select fund is NextEra Energy Inc.
    NEE,
    -1.89%    ,
    which owns FPL, Florida’s largest electric utility. FPL is phasing-out coal plants and replacing power-generating capacity with natural gas as well as wind and solar facilities.

    Weber said: “There’s not a company on the planet that is better at getting alternate (meaning solar and wind) generation deployed. But because they own FPL, some of my investors say it is one of the largest carbon emitters on the planet.”

    He added that “as a consequence of their skill in operating, they re generating amazing returns for investors.” NextEra’s share shave returned 446% over the past 10 years. One practice that has helped to elevate the company’s return on equity, and presumably its stock price, has been “dropping assets down” into NextEra Energy Partners LP
    NEP,
    -2.61%    ,
    which NEE manages, Weber said. He added that the assets put into the partnership tend to be “great at cash-flow generation, but not on achieving growth.”

    When asked for more examples of stocks in the fund that may provide excellent long-term returns, Weber mentioned Monolithic Power Systems Inc.
    MPWR,
    -0.24%    ,
    as a way to take advantage of the broad decline in semiconductor stocks this year. (The iShares Semiconductor ETF
    SOXX,
    +0.64%
    has declined 21% this year, while industry stalwarts Nvidia Corp.
    NVDA,
    +0.70%
    and Advanced Micro Devices Inc.
    AMD,
    -1.19%
    are down 59% and 60%, respectively.)

    He said Monolithic Power has been consistently making investments that improve its return on invested capital (ROIC). A company’s ROIC is its profit divided by the sum of the carrying value of stock it has issued over the years and its current debt. It doesn’t reflect the stock price and is considered a good measure of a management team’s success at making investment decisions and managing projects. Monolithic Power’s ROICC for 2021 was 21.8%, according to FactSet, rising from 13.2% five years earlier.

    “We want to see a business generating a return on capital in excess of its cost of capital. In addition, they need to invest their capital at incrementally improving returns,” Weber said.

    Another example Weber gave of a stock held by the fund is Dollar General Corp.
    DG,
    +0.33%    ,
    which he called a much better operator than rival Dollar Tree Inc.
    DLTR,
    +0.14%    ,
    which owns Family Dollar. He cited DG’s roll-out of frozen-food and fresh food offerings, as well as its growth runway: “They still have 8,000 or 9,000 stores to build-out” in the U.S., he said.

    Fund holdings

    In order to provide a full current list of stocks held under Weber’s strategy, here are the 27 stocks held by the the Natixis Vaughan Select ETF as of Sept. 30. The largest 10 positions made up 49% of the portfolio:

    Company

    		 Ticker

    		 % of portfolio
    NextEra Energy Inc.

    		 NEE,
    -1.89%         		5.74%
    Dollar General Corp.

    		 DG,
    +0.33%         		5.51%
    Danaher Corp.

    		 DHR,
    -2.89%         		4.93%
    Microsoft Corp.

    		 MSFT,
    -0.85%         		4.91%
    Amazon.com Inc.

    		 AMZN,
    -1.11%         		4.90%
    Sherwin-Williams Co.

    		 SHW,
    -2.53%         		4.80%
    Wheaton Precious Metals Corp.

    		 WPM,
    -2.28%         		4.76%
    Intercontinental Exchange Inc.

    		 ICE,
    -1.16%         		4.52%
    McCormick & Co.

    		 MKC,
    +0.11%         		4.48%
    Clorox Co.

    		 CLX,
    +1.27%         		4.39%
    Aon PLC Class A

    		 AON,
    +0.21%         		4.33%
    Jack Henry & Associates Inc.

    		 JKHY,
    -0.97%         		4.08%
    Motorola Solutions Inc.

    		 MSI,
    -0.64%         		4.08%
    Vertex Pharmaceuticals Inc.

    		 VRTX,
    -2.72%         		4.01%
    Union Pacific Corp.

    		 UNP,
    -0.78%         		3.99%
    Alphabet Inc. Class A

    		 GOOGL,
    -1.13%         		3.03%
    Johnson & Johnson

    		 JNJ,
    -0.80%         		2.98%
    Nvidia Corp.

    		 NVDA,
    +0.70%         		2.92%
    Cogent Communications Holdings Inc.

    		 CCOI,
    -2.10%         		2.81%
    Kosmos Energy Ltd.

    		 KOS,
    +5.62%         		2.68%
    VeriSign Inc.

    		 VRSN,
    -0.43%         		2.15%
    Chemed Corp.

    		 CHE,
    -0.73%         		2.06%
    Berkshire Hathaway Inc. Class B

    		 BRK.B,
    -1.18%         		2.00%
    Saia Inc.

    		 SAIA,
    -4.36%         		1.97%
    Monolithic Power Systems Inc.

    		 MPWR,
    -0.24%         		1.96%
    Entegris Inc.

    		 ENTG,
    -0.17%         		1.93%
    Luminar Technologies Inc. Class A

    		 LAZR,
    -6.90%         		0.96%
    Source: Natixis Funds

    You can click on the tickers for more about each company. Click here for a detailed guide to the wealth of information available free on the MarketWatch.com quote page.

    Fund performance

    The Natixis Vaughan Select Fund was established on June 29, 2012. Here’s a 10-year chart showing the total return of the fund’s Class A shares against that of the S&P 500, with dividends reinvested. Sales charges are excluded from the chart and the performance numbers. In the current environment for mutual-fund distribution, sales charges are often waived for purchases of new shares through investment advisers.


    FactSet

    Here’s a comparison of returns for 2022 and average annual returns for various periods of the fund’s Class A shares to that of the S&P 500 and its Morningstar fund category through Oct. 18:

     

    		 Total return – 2022 through Oct. 18

    		 Average return – 3 Years

    		 Average return – 5 Years

    		 Average return – 10 years
    Vaughan Nelson Select Find – Class A

    		 -20.2%

    		 11.8%

    		 10.8%

    		 13.0%
    S&P 500

    		 -21.0%

    		 9.4%

    		 9.7%

    		 12.0%
    Morningstar Large Blend category

    		 -20.3%

    		 8.1%

    		 8.2%

    		 10.7%
    Sources: Morningstar, FactSet

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  • Stocks are rallying now, but the 9 painful stages of this bear market are not even halfway done

    Stocks are rallying now, but the 9 painful stages of this bear market are not even halfway done

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    The official definition of a bear market is a 20% or greater decline from an index’s previous high. Accordingly, the three major U.S. stock-market benchmarks — the Nasdaq
    COMP,
    +0.90%    ,
    the S&P 500
    SPX,
    +1.14%
    and the Dow Jones Industrial Average
    DJIA,
    +1.12%
    — are currently all in a bear market.

    Based on my work with stock market strategist Mark D. Cook, a typical bear market goes through nine stages. Right now we are in Stage 4. Keep in mind that a bear market does not always follow these stages in the exact order. 

    1. Failed rallies: Failed rallies represent the first clue that a bear market is here. Failed rallies often appear before the market “officially” becomes a bear market. If the rally doesn’t have legs and cannot go higher for the next few days or weeks, it confirms that the bear’s claws have sunk in. Along the way, many failed rallies will fool bulls into thinking the worst is over. Watch the rallies for bear-market clues. The rally so far this week is an example. Now in its second day, a failure of this rally would confirm that stocks are not yet out of a bear market.

    2. Low-volume rallies: Another bear market clue is that stocks move higher on low volume. This is a clue the major financial institutions aren’t buying, although algos and hedge funds might be. It’s easy for the algos to push prices higher in a low-volume environment, one of the reasons for monster rallies that go nowhere the following day (i.e. a “one-day wonder”). 

    3. Terrible-looking charts: The easiest way to identify a bear market is by looking at a stock chart. It goes without saying that the charts look dreadful, both the daily and the weekly. While rallies help relieve some of the pressure, they typically don’t last long.

    4. Strong selloffs: It’s been a couple of years since markets have experienced extremely strong selloffs, but that record was broken the week of September 26 when the S&P 500 hit a new low for 2022. These strong selloffs are typical of a bear market, followed by rallies that don’t last (a roller-coaster that so far has played out during October).

    5. Mutual-fund redemptions: During this stage, after looking at their quarterly and monthly statements, horrified investors throw in the towel and sell their mutual funds (also, some investors refuse to look at those reports). As a result, mutual fund companies are forced to sell (which negatively affects the stock market). Typically, when the indexes fall more than 20%, mutual fund redemptions increase. 

    6. Complacency turns to panic: As more investor money leaves the market, many investors panic. The most bullish investors are holding on for dear life but are buying fewer stocks. The most nervous investors sell to avoid risking precious gains. 

    7. All news is bad news: As the bear market pushes stock prices lower, it seems as if most economic data and financial news is negative. Many people become skeptical of the bullish predictions from market professionals, who earlier had promised the market would keep going up. In the depths of the worst bear markets, some bullish professionals are jeered or ignored. Even die-hard bulls are increasingly nervous as the market heads lower and lower (with occasional rallies along the way). 

    8. Bulls throw in the towel: As trading volume increases on down days, and some investors experience 30% or higher losses, they give up hope and sell. The market turns into a free-for-all as even the Fed appears to have lost control. Many in the media admit that a bear market has arrived. 

    9. Capitulation: After weeks and months of selloffs (and occasional rallies), many investors are panicked. Investors realize that it may take years before their portfolios will return to breakeven, and some stocks never will. In the final stage of a bear market, trading volume is more than three times higher than normal. Even some of true believers liquidate positions, as many portfolios are down by 40% or 50% and more. Almost every financial asset has fallen, with the exception of fixed income such as CDs and T-bills. Traders or investors who trade on margin feel the most pain.

    Read: ‘Material risk’ looms over stocks as investors face bear market’s ‘second act,’ warns Morgan Stanley

    Take action

    This bear market is fairly young, but already there have been so many failed rallies that many investors are too afraid to buy. Some investors with cash are looking for bargains, but it takes nerves of steel to buy when everyone is selling.

    One of the keys to success in the market is to buy what people don’t want. Here are several ideas of what to do (and it is not too late to act): 

    1. During bear markets, a key to survival is diversification. If you are patient and are willing to hold positions for years, dollar-cost average into index funds on the way down. 

    2. In the early stages of a bear market, consider moving to the sidelines with CDs or Treasury bills. 

    3. Consider building a strong cash position, although inflation will cut into some of those gains. Nevertheless, losing to inflation is better than losing 30% in the stock market. The goal is not to lose money; in a bear market, cash is king. 

    The length and volatility of every bear market is different. No one can predict how this one will turn out, but based on previous bear markets, there’s still a long way to go before it’s over. 

    Michael Sincere (michaelsincere.com) is the author of “Understanding Options” and “Understanding Stocks.” His latest book, “How to Profit in the Stock Market” (McGraw Hill, 2022), explores bull -and bear market investing strategies. 

    More: Could there be a stock market rally? Probably. Would it be the end of the bear market? Probably not.

    Also read: Whatever you’re feeling now about stocks is normal bear-market grief — and the worst is yet to come

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  • Home builders sentiment index falls for record tenth month in a row in October. Home builders say the ‘situation is unhealthy and unsustainable.’

    Home builders sentiment index falls for record tenth month in a row in October. Home builders say the ‘situation is unhealthy and unsustainable.’

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    The numbers:  The National Association of Home Builders’ (NAHB) monthly confidence fell 8 points to 38 in October, the trade group said on Tuesday.

    It’s the tenth month in a row that the index has fallen.

    Outside of the pandemic, the October reading of 38 is the lowest level since August 2012.

    A year ago, the index stood at 80.

    The index’s ten-month drop is a new record. The index last fell for 8 months straight in 2006 and 2007.

    Key details: All three gauges that underpin the overall builder-confidence index fell.

    • The gauge that marks current sales conditions fell by 9 points. 

    • The component that assesses sales expectations for the next six months fell by 11 points.

    • And the gauge that measures traffic of prospective buyers fell by 6 points.

    All four NAHB regions posted a drop in builder confidence, led by the south and the west. 

    It’s also likely that this year will be the first time since 2011 that single-family starts see a decline, the NAHB added.

    Big picture: Builders continue to struggle to find buyers with the current rate environment.

    Now they’re saying they’re worried about that depressed demand impacting supply moving forward.

    Specifically, they’re concerned about housing affordability worsening, with potentially fewer new homes being built in the future.

    Mortgage rates have doubled from last year, now exceeding 7%, which has considerably cooled buyer demand. 

    Home price growth is moderating, but prices have not come down substantially — yet. 

    The median sales price for a new home was $436,800 in August, according to the U.S. Census Bureau.

    What the NAHB said: Builders are expecting single-family starts to fall for the first time in 11 years — and expect additional declines through 2023, said NAHB Chief Economist Robert Dietz, due to the Federal Reserve’s projected rate hikes to control inflation.

    “While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates, and ongoing elevated construction costs continue to price out a large number of prospective buyers,” he added.

    “This situation is unhealthy and unsustainable,” Jerry Konter, a home builder and developer from Savannah, Ga. and the NAHB’s chairman, said in a statement.
    “Policymakers must address this worsening housing affordability crisis,” he added.

    What are they saying? “The housing sector – sentiment, building activity and sales – is collapsing under the weight of a rapid increase in interest rates and elevated prices, which are crimping affordability and demand,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a note.

    So expect building activity to be depressed, she added.

    Market reaction: The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.989%
    fell to 3.98% on Tuesday morning.

    While the SPDR S&P Homebuilders ETF
    XHB,
    +2.15%
    traded slightly higher during the morning session, and the big home-builder stocks, from D.R. Horton Inc.
    DHI,
    +2.90%
    to Toll Brothers
    TOL,
    +1.87%
    to Lennar
    LEN,
    +2.97%    ,
    edged higher.

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  • Weekend reads: The Federal Reserve gets a lot of flak for inflation, but it has actually hit its target recently

    Weekend reads: The Federal Reserve gets a lot of flak for inflation, but it has actually hit its target recently

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    The U.S. stock market benchmark rebounded from a steep loss on the day when the government published hot inflation numbers.

    The S&P 500 Index ended Thursday with a 2.6% gain after investors took a closer look and saw a significant improvement from July through September, as Rex Nutting explained.

    The whipsaw action wasn’t limited to stocks, and was described by Rick Rieder, the chief investment officer for global fixed income at BlackRock, as “one of the craziest days” of his career.

    The bond market’s warning

    Some investors who focus on stocks might not realize that the bond market is much larger, and that its movements can cause government and central-bank policies to shift. Larry McDonald, founder of The Bear Traps Report and author of “A Colossal Failure of Common Sense,” which described the 2008 failure of Lehman Brothers, explained just how bad the action was in the U.K. bond market over the past few weeks, when 30-year government bonds issued in December traded as low as 24 cents on the dollar. He also predicted what will happen if the Federal Reserve continues on its current course of interest-rate increases.

    Related outlooks for interest rates:

    Bullish signs for long-term stock investors

    Getty Images

    Michael Brush argues the Federal Reserve is moving too quickly to raise interest rates and cool the U.S. economy. He expects a rapid decline in inflation and a new bull market for stocks. In a column, he shares five sentiment indicators that suggest it is time to buy stocks — especially this group of companies.

    More: Here’s how you’ll know stock-market lows are finally here, says the legendary investor who called 1987 crash

    Don’t forget to look over your portfolio

    Beth Pinsker explains how to make sure your investments are best diversified to fit your needs during time of uncertainty in all financial markets.

    Read on: $22 billion in I-bond sales can’t be wrong. Why you may want to buy them even when their rate resets soon

    Time for a refreshing COLA if you are on Social Security

    Getty Images

    The Social Security Administration has announced that its cost-of-living adjustment (COLA) for 2023 will be 8.7%, the largest increase in four decades. There is more to the story, including tax implications and changes to Medicare, as Jessica Hall and Alessandra Malito explain.

    Related: Can I stop and restart Social Security benefits?

    Pay attention to Medicare open enrollment

    Getty Images/iStockphoto

    Medicare’s annual open enrollment season runs from Oct. 15 to Dec. 7. The majority of Medicare recipients don’t review their plans each year, which can cost them a lot of money. Here’s how to approach Medicare’s 2023 enrollment period.

    You won’t like this ‘new normal’ for the housing market

    West Coast housing markets are already seeing price declines as mortgage loan rates hit 7%.


    Stefani Reynolds/Agence France-Presse/Getty Images

    Freddie Mac said interest rates on 30-year mortgage loans averaged 6.92% on Oct. 13, up from 3.05% a year earlier. Mortgage Daily said rates had hit 7.10% — the highest in 20 years — and economists are warning these levels could be a “new normal.”

    A homeowner locked-in with a low interest rate on their mortgage loan will be reluctant to sell. And some would-be buyers may now be priced out of the market because of much higher loan payments. Here’s what economists expect for home prices in 2023.

    More housing coverage from Aarthi Swaminathan: ‘No housing market is immune to home-price declines’: Home values are already falling in these pandemic boomtowns.

    Tips for maximizing financial aid for college

    Getty Images/iStockphoto

    When you fill out the Free Application for Federal Student Aid, or FAFSA, to help pay for your child’s college education, there may be a problem — old news. The form reflects your financial situation up to two years ago, and things may have worsened recently. Here’s how to make sure schools have the most recent information to help you get as much financial aid as possible.

    This is why Florida’s insurance market is such a mess

    Florida insurers are not only suffering from storm-damage payouts.


    Joe Raedle/Getty Images

    Hurricanes are nothing new to Floridians, but insurers in the state are losing money even though premiums have doubled over the past five years. Shahid S. Hamid, the director of the Laboratory for Insurance at Florida International University, explains why the Florida insurance market is so distorted.

    Here’s a travel option you may never have heard of — home swapping

    Villefranche-sur-mer on the French Riviera.


    istock

    Home swapping can give you an opportunity to live as a local in a faraway place while spending much less than you would as a tourist. Here’s how it works.

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

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  • The stock market is in trouble. That’s because the the bond market is ‘very close to a crash.’

    The stock market is in trouble. That’s because the the bond market is ‘very close to a crash.’

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    Don’t assume the worst is over, says investor Larry McDonald.

    There’s talk of a policy pivot by the Federal Reserve as interest rates rise quickly and stocks keep falling. Both may continue.

    McDonald, founder of The Bear Traps Report and author of “A Colossal Failure of Common Sense,” which described the 2008 failure of Lehman Brothers, expects more turmoil in the bond market, in part, because “there is $50 trillion more in world debt today than there was in 2018.” And that will hurt equities.

    The bond market dwarfs the stock market — both have fallen this year, although the rise in interest rates has been worse for bond investors because of the inverse relationship between rates (yields) and bond prices.

    About 600 institutional investors from 23 countries participate in chats on the Bear Traps site. During an interview, McDonald said the consensus among these money managers is “things are breaking,” and that the Federal Reserve will have to make a policy change fairly soon.

    Pointing to the bond-market turmoil in the U.K., McDonald said government bonds that mature in 2061 were trading at 97 cents to the dollar in December, 58 cents in August and as low as 24 cents over recent weeks.

    When asked if institutional investors could simply hold on to those bonds to avoid booking losses, he said that because of margin calls on derivative contracts, some institutional investors were forced to sell and take massive losses.

    Read: British bond market turmoil is sign of sickness growing in markets

    And investors haven’t yet seen the financial statements reflecting those losses — they happened too recently. Write-downs of bond valuations and the booking of losses on some of those will hurt bottom-line results for banks and other institutional money managers.

    Interest rates aren’t high, historically

    Now, in case you think interest rates have already gone through the roof, check out this chart, showing yields for 10-year U.S. Treasury notes
    TMUBMUSD10Y,
    3.898%
    over the past 30 years:

    The yield on 10-year Treasury notes has risen considerably as the Federal Reserve has tightened during 2022, but it is at an average level if you look back 30 years.


    FactSet

    The 10-year yield is right in line with its 30-year average. Now look at the movement of forward price-to-earnings ratios for S&P 500
    SPX,
    -0.03%
    since March 31, 2000, which is as far back as FactSet can go for this metric:


    FactSet

    The index’s weighted forward price-to-earnings (P/E) ratio of 15.4 is way down from its level two years ago. However, it is not very low when compared to the average of 16.3 since March 2000 or to the 2008 crisis-bottom valuation of 8.8.

    Then again, rates don’t have to be high to hurt

    McDonald said that interest rates didn’t need to get anywhere near as high as they were in 1994 or 1995 — as you can see in the first chart — to cause havoc, because “today there is a lot of low-coupon paper in the world.”

    “So when yields go up, there is a lot more destruction” than in previous central-bank tightening cycles, he said.

    It may seem the worst of the damage has been done, but bond yields can still move higher.

    Heading into the next Consumer Price Index report on Oct. 13, strategists at Goldman Sachs warned clients not to expect a change in Federal Reserve policy, which has included three consecutive 0.75% increases in the federal funds rate to its current target range of 3.00% to 3.25%.

    The Federal Open Market Committee has also been pushing long-term interest rates higher through reductions in its portfolio of U.S. Treasury securities. After reducing these holdings by $30 billion a month in June, July and August, the Federal Reserve began reducing them by $60 billion a month in September. And after reducing its holdings of federal agency debt and agency mortgage-backed securities at a pace of $17.5 billion a month for three months, the Fed began reducing these holdings by $35 billion a month in September.

    Bond-market analysts at BCA Research led by Ryan Swift wrote in a client note on Oct. 11 that they continued to expect the Fed not to pause its tightening cycle until the first or second quarter of 2023. They also expect the default rate on high-yield (or junk) bonds to increase to 5% from the current rate of 1.5%. The next FOMC meeting will be held Nov. 1-2, with a policy announcement on Nov. 2.

    McDonald said that if the Federal Reserve raises the federal funds rate by another 100 basis points and continues its balance-sheet reductions at current levels, “they will crash the market.”

    A pivot may not prevent pain

    McDonald expects the Federal Reserve to become concerned enough about the market’s reaction to its monetary tightening to “back away over the next three weeks,” announce a smaller federal funds rate increase of 0.50% in November “and then stop.”

    He also said that there will be less pressure on the Fed following the U.S. midterm elections on Nov. 8.

    Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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  • 21 dividend stocks yielding 5% or more of companies that will produce plenty of cash in 2023

    21 dividend stocks yielding 5% or more of companies that will produce plenty of cash in 2023

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    When the stock market has jumped two days in a row, as it has now, it is easy to become complacent.

    But the Federal Reserve isn’t finished raising interest rates, and recession talk abounds. Stock investors aren’t out of the woods yet. That can make dividend stocks attractive if the yields are high and the companies produce more cash flow than they need to cover the payouts.

    Below is a list of 21 stocks drawn from the S&P Composite 1500 Index
    SP1500,
    +3.12%
    that appear to fit the bill. The S&P Composite 1500 is made up of the S&P 500
    SPX,
    +3.06%    ,
    the S&P 400 Mid Cap Index
    MID,
    +3.18%
    and the S&P Small Cap 600 Index
    SML,
    +3.80%    .

    The purpose of the list is to provide a starting point for further research. These stocks may be appropriate for you if you are looking for income, but you should do your own assessment to form your own opinion about a company’s ability to remain competitive over the next decade.

    Cash flow is key

    One way to measure a company’s ability to pay dividends is to look at its free cash flow yield. Free cash flow is remaining cash flow after planned capital expenditures. This money can be used to pay for dividends, buy back shares (which can raise earnings and cash flow per share), or fund acquisitions, organic expansion or for other corporate purposes.

    If we divide a company’s estimated annual free cash flow per share by its current share price, we have its estimated free cash flow yield. If we compare the free cash flow yield to the current dividend yield, we may see “headroom” for cash to be deployed in ways that can benefit shareholders.

    For this screen, we began with the S&P Composite 1500, then narrowed the list as follows:

    • Dividend yield of at least 5.00%.

    • Consensus free cash flow estimate available for calendar 2023, among at least five analysts polled by FactSet. We used calendar-year estimates, even though fiscal years for many companies don’t match the calendar.

    • Estimated 2023 free cash flow yield of at least double the current dividend yield.

    For real-estate investment trusts, dividend-paying ability is measured by funds from operations (FFO), a non-GAAP figure that adds depreciation and amortization back to earnings. Adjusted funds from operations (AFFO) takes this a step further, subtracting cash expected to be used to maintain properties. So for the two REITs on the list, the FCF yield column makes use of AFFO.

    For many companies in the financial sector, especially banks and insurers, free cash flow figures aren’t available, so the screen made use of earnings-per-share estimates. These are generally considered to run close to actual cash flow for these heavily regulated industries.

    Here are the 21 companies that passed the screen, with dividend yields of at least 5% and estimated 2023 FCF yields at least twice the current payout. They are sorted by dividend yield:

    Company

    		 Ticker

    		 Type

    		 Dividend yield

    		 Estimated 2023 FCF yield

    		 Estimated “headroom”
    Uniti Group Inc.

    		 UNIT,
    +7.36%         		Real-Estate Investment Trusts

    		 8.33%

    		 25.25%

    		 16.92%
    Hanesbrands Inc.

    		 HBI,
    +5.56%         		Apparel/ Footwear

    		 8.33%

    		 17.29%

    		 8.96%
    Kohl’s Corp.

    		 KSS,
    +5.80%         		Department Stores

    		 7.68%

    		 16.72%

    		 9.04%
    Rent-A-Center Inc.

    		 RCII,
    +10.40%         		Finance/ Rental/ Leasing

    		 7.52%

    		 17.26%

    		 9.73%
    Macerich Co.

    		 MAC,
    +8.18%         		Real-Estate Investment Trusts

    		 7.43%

    		 18.04%

    		 10.60%
    Devon Energy Corp.

    		 DVN,
    +5.72%         		Oil & Gas Production

    		 7.13%

    		 14.47%

    		 7.33%
    AT&T Inc.

    		 T,
    +1.19%         		Major Telecommunications

    		 6.98%

    		 14.82%

    		 7.84%
    Newell Brands Inc.

    		 NWL,
    +5.16%         		Industrial Conglomerates

    		 6.59%

    		 17.42%

    		 10.82%
    Dow Inc.

    		 DOW,
    +2.96%         		Chemicals

    		 6.18%

    		 15.63%

    		 9.45%
    LyondellBasell Industries NV

    		 LYB,
    +3.64%         		Chemicals

    		 6.09%

    		 16.07%

    		 9.99%
    Scotts Miracle-Gro Co. Class A

    		 SMG,
    +5.01%         		Chemicals

    		 6.04%

    		 12.68%

    		 6.65%
    Diamondback Energy Inc.

    		 FANG,
    +5.23%         		Oil & Gas Production

    		 5.56%

    		 13.63%

    		 8.08%
    Best Buy Co. Inc.

    		 BBY,
    +5.86%         		Electronics/ Appliance Stores

    		 5.53%

    		 14.08%

    		 8.55%
    Viatris Inc.

    		 VTRS,
    +5.62%         		Pharmaceuticals

    		 5.50%

    		 28.95%

    		 23.45%
    Prudential Financial Inc.

    		 PRU,
    +5.66%         		Life/ Health Insurance

    		 5.38%

    		 13.30%

    		 7.91%
    Ford Motor Co.

    		 F,
    +7.76%         		Motor Vehicles

    		 5.23%

    		 15.95%

    		 10.72%
    Invesco Ltd.

    		 IVZ,
    +6.76%         		Investment Managers

    		 5.23%

    		 14.95%

    		 9.73%
    Franklin Resources Inc.

    		 BEN,
    +4.37%         		Investment Managers

    		 5.17%

    		 13.21%

    		 8.04%
    Kontoor Brands Inc.

    		 KTB,
    +0.73%         		Apparel/ Footwear

    		 5.17%

    		 14.15%

    		 8.98%
    Seagate Technology Holdings PLC

    		 STX,
    +4.09%         		Computer Peripherals

    		 5.11%

    		 13.19%

    		 8.07%
    Foot Locker Inc.

    		 FL,
    +1.35%         		Apparel/ Footwear Retail

    		 5.03%

    		 15.52%

    		 10.49%
    Source: FactSet

    Any stock screen has its limitations. If you are interested in stocks listed here, it is best to do your own research, and it is easy to get started by clicking the tickers in the table for more information about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

    For the “estimated FCF yields,” consensus free cash flow estimates for calendar 2023 were used for all companies except the following:

    Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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  • Weekend reads: What to expect now for home prices, stocks and bonds

    Weekend reads: What to expect now for home prices, stocks and bonds

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    This week Freddie Mac said the average interest rate on a 30-year mortgage loan in the U.S. had climbed to 6.70% from 6.29% the week before and 6.02% two weeks ago. The average rate a year ago was 3.01%.

    Would-be sellers who have low-rate mortgage loans are reluctant if it means they need to take out a new loan to fund their next home. Would-be buyers are forced out of the market, as the monthly principal and interest payment for a new 30-year loan, based on Freddie Mac’s figures, has increased 53% from a year ago.

    Home-sale contracts are being canceled at a record pace in some areas.

    But these factors could lead to a buyer’s market in 2023 if prices plunge. Here are the areas economists expect to see the largest home price declines.

    The strong dollar and the stock market

    Khaled Desouki/Agence France-Presse/Getty Images

    The dollar has strengthened as the Federal Reserve has taken the lead among central banks in raising interest rates. This is reverberating across the world, making it more costly for countries to make interest payments on dollar-denominated debt and increasing the cost of any commodity traded in dollars.

    The rising dollar lowers prices on imported goods for Americans and can also lower their international travel costs. But Michael Wilson, Morgan Stanley’s chief equity strategist, warns that earnings for the S&P 500
    SPX,
    -1.51%
    would decline as a direct result of the strong dollar and called the current foreign-exchange backdrop an “untenable situation” for the stock market.

    On the other hand: Companies are trying to blame weak earnings on the strong U.S. dollar, but that’s a lame excuse

    This is what happens when bearish sentiment runs high

    Michael Brush interviews David Baron, co-manager of the Baron Focused Growth Fund
    BFGFX,
    -0.76%    ,
    who describes opportunities cropping up as institutional investors dump stocks. He also explains his winning long-term strategy, which has included a very long-term investment in Tesla Inc.
    TSLA,
    -1.10%    .

    A a positive sign for the stock market: These 12 stocks have seen strong insider buying

    Time to buy bonds?

    When interest rates rise, bond prices fall. But it also means that if you have money to put to work, bond yields have become much more attractive.

    Khuram Chaudhry, a European equity quantitative strategist at JPMorgan in London, makes the case for buying bonds now.

    What about preferred stocks?

    Getty Images/iStockphoto

    Preferred stocks feature stated dividend yields and prices that move the same way bond prices do. That means prices for many issues are now heavily discounted to face value and that current yields are much higher than they were at the end of 2021. Here’s an in-depth guide on how to research preferred stocks and make your own selections.

    Related: 22 dividend stocks screened for quality and safety

    The problem with macro market projections

    Stanley Druckenmiller predicted a “hard landing” in 2023 for the U.S. economy while speaking at CNBC’s Delivering Alpha Investor Summit on Sept. 28.


    Bloomberg

    Stanley Druckenmiller predicted a U.S. recession in 2023 as a result of monetary policy tightening by the Federal Reserve. That may not be much of a stretch, considering that the U.S. economy contracted during the first half of 2022, according to revised GDP figures from the Bureau of Economic Analysis.

    But investors should be careful — macro forecasts often turn out to be incorrect, Mark Hulbert warns.

    More on stocks: It’s the worst September for stocks since 2008. What that means for October.

    Recessions and your retirement plans

    Getty Images

    Alessandra Malito has advice on how retirees and people planning for retirement can prepare for tough economic times.

    Also: Reset your retirement calculator now for today’s bleaker stock markets and make sure you’re still on track

    Investors tremble and a central bank scrambles

    The Bank of England’s headquarters.


    Agence France-Presse/Getty Images

    After the new U.K. government of Prime Minister Liz Truss announced a massive tax cut along with a new spending program to help counter rising fuel costs and new borrowing, the pound hit a new low against the dollar on Sept. 26 as investors and money managers panicked and sold-off U.K. government bonds. Steve Goldstein explains how and why the Bank of England came tot the rescue.

    A closer look at reverse mortgages

    Getty Images/iStockphoto

    Beth Pinsker digs deeply to explain how to use a reverse mortgage as a financial planning tool.

    Poking a little fun at Elon Musk

    Getty Images

    After Tesla CEO Elon Musk said the upcoming Cybertruck would be sufficiently waterproof to “serve briefly as a boat,” the San Francisco Bay Ferry offered this advice to patrons.

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