ReportWire

Tag: Consumer affairs

  • Why Fed rate hikes take so long to affect the economy, and why that effect may last a decade or more

    Why Fed rate hikes take so long to affect the economy, and why that effect may last a decade or more

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    The U.S. economy continues to grow despite the 5.5% benchmark federal funds interest rate set by the Federal Reserve in 2023.

    The Fed’s leaders expect their interest rate decisions to eventually slow that growth.

    The increase in borrowing costs that stems from Fed decisions does not affect all consumers immediately. It typically affects people who need to take new loans — first-time homebuyers, for example. Other dynamics, such as the use of contracts in business, can slow the ripple of Fed decisions through an economy.

    “It might not all hit at once, but the longer rates stay elevated, the more you’re going to feel those effects,” said Sarah House, managing director and senior economist at Wells Fargo.

    “Consumers did have additional savings that we wouldn’t have expected if they had continued to save at the same pre-Covid rate. And so that’s giving some more insulation in terms of their need to borrow,” said House. “That’s an example of why this cycle might be different in terms of when those lags hit, versus compared to prior cycles.”

    A 1% interest rate increase can reduce gross domestic product by 5% for 12 years after an unexpected hike, according to a research paper from the Federal Reserve Bank of San Francisco.

    “It’s bad in the short term because we worry about unemployment, we worry about recessions,” said Douglas Holtz-Eakin, president of the American Action Forum, referring to the paper’s implications for central bank policymakers. “It’s bad in the long term because that’s where increases in your wages come from; we want to be more productive.”

    Some economists say that financial markets may be responding to Federal Reserve policy more quickly, if not instantaneously. “Policy tightening occurs with the announcement of policy tightening, not when the rate change actually happens,” said Federal Reserve Governor Christopher Waller in remarks July 13 at an event in New York.

    “We’ve seen this cycle where the stock market moved more quickly in some cases, more slowly in other cases,” said Roger Ferguson, former vice chair of the Federal Reserve. “So, you know, this question of variability comes into play, as in how long it’s going to take. We think it’s a long time, but sometimes it can be faster.”

    Watch the video above to see why the Fed’s interest rate hikes take time to affect the economy.

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  • What to expect as Netflix, Disney and other big streaming names shift strategy

    What to expect as Netflix, Disney and other big streaming names shift strategy

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    Streaming customers are likely to see more familiar faces and less megabudget content in the coming year.

    Shifting consumer tastes and corporate strategies portend changes in programming, with artificial intelligence looming in the background, as major streaming services consider how to use technology and new forms of programming without escalating annual multibillion-dollar content budgets.

    “The big quandary is, how do we make [services] profitable? Things have shifted so dramatically and so quickly in how people consume,” Cole Strain, head of research and development at Samba TV, which tracks viewership of shows, said in an interview. “The streamers that find out what consumers truly want — they win.”

    Streaming services are facing some big choices, noted Jacqueline Corbelli, CEO of software company BrightLine. “The cost of the content and the length of the content war will force them to make some major decisions. They are trying to figure it out,” she said in an interview.

    “Great content has to be paid for, and investors want to see an increasingly efficient and profitable business,” she said, adding: “Right now the economics of these are at odds with one another.”

    This year’s prolonged Hollywood strikes, the prevalence of up-close-and-personal sports documentaries and the increased licensing of older cable-TV shows are the most tangible evidence so far of how content is evolving. Throw in cost-cutting, and customers of services like Netflix Inc.
    NFLX,
    +0.28%    ,
    Walt Disney Co.’s
    DIS,
    -1.33%
    Disney+ and Hulu, and Amazon.com Inc.’s
    AMZN,
    +1.41%
    Prime Video are looking at a vastly different content landscape.

    What’s at stake? Streaming’s big guns continue to spend lavishly in the pursuit of engagement, which is the single most important metric in media. During its third-quarter earnings calls, Netflix said it would spend $17 billion on content in 2024, while Disney pledged $25 billion, including sports rights.

    “‘I think when it comes to creativity, quality is critical, of course, and quantity in many ways can destroy quality.’”


    — Disney CEO Bob Iger

    Complicating matters and raising the urgency is the pressure, particularly at Disney, to cut costs. The very future of blockbuster movies is also in doubt in the wake of box-office misfires such as “Wish,” “Indiana Jones and the Dial of Destiny” and the latest Marvel entries, “Ant-Man and the Wasp: Quantumania” and “The Marvels.”

    “One of the reasons I believe it’s fallen off a bit is that we were making too much,” Disney CEO Bob Iger said at a recent employee town hall meeting in New York City. “I think when it comes to creativity, quality is critical, of course, and quantity in many ways can destroy quality. Storytelling, obviously, is the core of what we do as a company.”

    Also read: Disney CEO Bob Iger walks back comments about asset sales

    Speaking at the New York Times DealBook Summit last week, Iger acknowledged that “the movie business is changing. Box office is about 75% of what it was pre-COVID.” Noting the $7 monthly fee for a Disney+ subscription, he said the experience of viewing content from home on large TV screens is both more convenient and less expensive than going to the movie theater.

    Iger’s task is significantly more fraught than those faced by his rivals. He is in the midst of a turnaround at Disney aimed at making streaming profitable and is simultaneously fending off yet another proxy fight from activist investor Nelson Peltz.

    Part of Iger’s plan is to slash costs. Of the $7.5 billion Disney intends to save in 2024, $4.5 billion will come out of the content budget. Previously, the company was aiming at a $3 billion content cut out of a total annual reduction of $5.5 billion. Disney plans to spend $25 billion on content in 2024, down from $27.2 billion in 2023 and a record $29.9 billion in 2022.

    Read more: Bob Iger: ‘I was not seeking to return’ as Disney CEO

    What streamers have done so far hews closely to the classic TV model of producing original movies and series, broadcasting live sporting events and throwing in licensed content, or syndication. They’ve also displayed a willingness to place ads on their services after vowing not to (in the case of Netflix) and have managed to mitigate spending on pricey sports rights with behind-the-scenes content.

    Most prominently, Netflix has licensed older shows like USA Networks’ “Suits,” reintroducing the cast, including a then-unknown Meghan Markle, to solid viewership. “As the competitive environment evolves, we may have increased opportunities to license more hit titles to complement our original programming,” Netflix said in its third-quarter earnings statement. 

    During the company’s earnings call in October, Netflix co-CEO Ted Sarandos pointed to the historic streaming success of “Suits.” “This continues to be important for us to add a lot of breadth of storytelling,” he said. “Our consumers have a wide range of tastes, and we can’t make everything, but we can help you find just about anything. That’s really the strength.”

    The success of “Suits” and of original sports programming, among several tweaks, indicates that consumers like what they see so far. Streaming additions at Netflix and Disney were significant — 8.76 million and nearly 7 million, respectively — during the recently completed third calendar quarter.

    Read more: Netflix’s stock jumps more than 10% on huge spike in subscribers, price hikes

    “There exist a lot of popular, good shows that people hadn’t seen before. HBO Max has licensed ‘Band of Brothers.’ ‘Yellowstone’ is on the CBS network after performing well on Paramount Global
    PARA,
    -2.76%
    and Comcast Corp.’s
    CMCSA,
    -3.41%
    Peacock,” Jon Giegengack, founder and principal of Hub Entertainment Research, said in an interview. “Consumers increasingly don’t care if a show is new, if they haven’t seen it before.”

    On the sports front, Netflix and Amazon Prime Video have sidestepped expensive rights to live sporting events and instead produced docuseries such as Netflix’s “Quarterback” and “Formula 1: Drive to Survive” and Amazon’s “Coach Prime” and “Redefined: J.R. Smith.” Amazon also continues to air “NFL Thursday Night Football.”

    Competition for eyeballs is tight with so many suitors — from Alphabet Inc.’s
    GOOGL,
    +1.33%

    GOOG,
    +1.35%
    YouTube to TikTok, both of which are developing long-form content — and viewers face “too many streaming options,” said Brittany Slattery, chief marketing officer at OpenAP, an advertising platform founded by the owners of most of the large TV networks.

    “There is a high churn rate, because consumers keep popping in and out of services because they can’t afford all these services,” Slattery said in an interview.

    Also see: Here’s what’s worth streaming in December 2023: Not much new, yet still a lot to watch

    Mark Vena, CEO and principal analyst at SmarTech Research, sums up the typical customer experience: “There are too many services for streaming. I will buy service for a month, watch a movie and then cancel.”

    Using technology for a new experience

    Major streamers are pinning many of their hopes on technology as a way to entice viewers and expand beyond the traditional TV model they’ve adopted. Strategies include mobile gaming (Netflix), gambling (Disney’s ESPN Bet) and shoppable media (Amazon).

    The biggest near-term change would bring ESPN exclusively to streaming, perhaps as early as 2025, although big games would probably be simulcast on network TV to retain older viewers.

    “Technology will be a major impetus for being in the winning circle,” said Hunter Terry, head of connected TV at global data company Lotame, pointing to Amazon’s shoppable-media strategy during Prime Video’s broadcast of an NFL game on Black Friday.

    The NFL game, the first ever on a Friday, featured QR codes of Amazon ads for direct purchases via mobile devices and PCs, contributing greatly to what the e-commerce giant said was its best-ever sales day — 7.5% higher than Black Friday 2022. The game drew between 9.6 million and 10.8 million viewers, according to Nielsen and Amazon, making it the highest-rated show on Black Friday for young adults (18-34) and adults (18-49).

    And what of generative AI, a major flashpoint in the writers and actors strikes that roiled Hollywood for months earlier this year? Creators feared generative AI would be used to produce low- and middle-brow entertainment without the need for writers, actors or production crew.

    The technology is as intriguing to streamers as it is vexing. Full-blown adoption would rankle creators as well as customers. There are also limitations: AI-created content is lacking in humor and original thought, said David Parekh, CEO of SRI International, a leading research and development organization serving government and industry.

    “The pressing question is, who goes first among the streamers and risks getting blowback from studios and consumers?” said Rick Munarriz, a contributing analyst at the Motley Fool who covers streaming-service stocks. “You don’t want to offend people, but there are tools to create ideas” at little cost.

    AI and machine learning are already being used to mine data to find out what resonates with viewers.

    “It is very hard to produce successful content,” said Ron Gutman, CEO of Wurl, which helps streamers and publishers monetize and distribute content, and which was recently acquired by AppLovin Corp.
    APP,
    -0.80%
    for $430 million. “The market is so fragmented. The problem is connecting people to content.”

    Straight to streaming?

    Big-budget busts present another potential source of content, by salvaging unreleased movies, according to experts.

    The so-called dust-bin option is the natural successor to straight-to-video and straight-to-pay-per-view movies. There has been some precedent, with the release of Disney’s superhero hit “Black Widow” simultaneously on streaming and in theaters in May 2021.

    Will streaming services end up as the first stop for movies abruptly canceled before release? Candidates include “Batgirl,” which cost $90 million to make and was in post-production when Warner Bros. Discovery Inc.
    WBD,
    -4.57%
    pulled the plug.

    The same fate could also await two other shelved Warner Bros. movies, “Scoob! Holiday Haunt” and the completed “Coyote vs. Acme.”

    While the $90 million “Batgirl” is a tax write-off, there could be upside to “Coyote” and “Scoob!” if they went to streaming without a costly marketing campaign, said SmarTech Research’s Vena.

    Still, the long-term plans of streaming giants to meld tech to TV remains a ticklish task, said Wurl’s Gutman. “TV is a lean-back experience, not a lean-into technology medium,” he said. “People are looking at their phones while watching TV. It is a passive experience.”

    Tracy Swedlow, founder and co-producer of the TV of Tomorrow Show conference, said: “They’ve been burning a candle at both ends, investing in original content as well as licensing long-tail content such as ‘Suits’ and ‘Breaking Bad.’ Something has to give.”

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  • Don’t ruin Thanksgiving by making these rookie mistakes

    Don’t ruin Thanksgiving by making these rookie mistakes

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    A friend calls this day “Thanksscrapping.” He may have a point. 

    My favorite Thanksgiving story happened at a dinner on Park Avenue about 20 years ago when a lady with a large bouffant and a genial manner — let’s call her Mrs. Anders — raised a glass. Knowing I grew up in Dublin in a Catholic family, she said: “…and I’d like to raise a glass to Fair Eire and hope that the six counties of Northern Ireland are one day free from the British!” She did not realize that the host’s in-laws were Ulster Protestants. They were not amused.

    …

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

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

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

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

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

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

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

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

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

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

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

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

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

    Roth IRA rules and the Saver’s Credit

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

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

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

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

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

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

    Other retirement tax rules are also slated for 2024 updates.

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

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

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

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

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

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

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

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

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

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

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

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

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

    Fed decisions, yields

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • No, you don’t need to buy Costco’s $4,500, 157-piece Le Creuset cookware set

    No, you don’t need to buy Costco’s $4,500, 157-piece Le Creuset cookware set

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    No, you don’t need to spend $4,500 on that 157-piece Le Creuset cookware set from Costco
    COST,
    -0.83%    .

    The pricey package has become an everyone-is-talking-about-it sensation, owing largely to social media. A post about the set on X, the platform formerly known as Twitter, that has now been viewed some 21 million times seems to have been the initial source of the buzz. It noted that the Costco offering has “probably every kitchen item you will ever need.”

    In turn, that post generated more social-media chatter, along with articles in publications including the New York Post and the Delish website.

    Now the set is apparently so popular, you can’t even get it. In several parts of the country, the Costco site doesn’t even list it as being available. MarketWatch reached out to the retailer for details but did not receive an immediate response.

    Perhaps it’s just as well that home cooks won’t be tempted to spend all that money. When MarketWatch spoke with several prominent New York chefs and restaurateurs, they all said the set was overkill, even if it represented a savings compared with buying the items individually.

    If anything, these culinary pros noted that purchasing so many pieces not only poses a storage issue, but it can also create confusion in the kitchen, especially for the home cook.

    “I don’t even have one-tenth of that set,” says veteran chef Konstantinos Kvasilava, who works at Kyma, a high-end Greek restaurant in New York, and who previously was at Geranium, a Michelin-starred establishment in Copenhagen.

    So what are the items you should buy for your kitchen? Here are five rules chefs say you should keep in mind.

    Stick with the basics

    The Costco Le Creuset set includes several pots and pans, plus bakeware, dinnerware and more. Let’s presume you already have some plates and utensils in your kitchen. Beyond that, chefs generally recommend a small number of pieces — think in terms of as few as four and as many as 10, says Franklin Becker, chef and owner of the Press Club Grill and Point Seven restaurants in New York. His must-have list includes 8-inch and 10-inch nonstick pans, a high-sided stainless-steel sauté pan and 1-quart, 4-quart and 8-quart pots. “Those are the essentials,” says Becker, explaining that such items will cover your needs depending on what you’re cooking — the nonstick pans are great for eggs, he notes — and how many people you’re cooking for. The 8-quart pot will work if you’re entertaining a crowd and need to make a big dish.

    Other chefs’ must-haves include a cast-iron pan, often a preferred method for cooking steaks; a casserole dish, which is good for casseroles, naturally; and a Dutch oven. It’s always best to think of items that can be used in multiple ways. Rose Noel, executive chef at New York’s Peak restaurant, likes a cast-iron pan, for example, because it can go into the oven and can also be used on an outdoor grill. “It carries everywhere,” she explains. And, she says, a decent-sized casserole dish can double as a roasting pan for, say, cooking a chicken.

    Add extras, depending on what you eat

    One you have those basics, look at your daily diet and buy items that fit your own needs. Simon Kim, proprietor of Cote Korean Steakhouse, which has locations in New York and Miami, says he doesn’t make eggs at home for breakfast, but he always makes smoothies, so a powerful blender is a must for him. And he eats a lot of rice, so he has a rice cooker, which he says is much better than an everyday pot when it comes to preparing that staple.  

    Buy quality

    It’s always tempting to go the cheap route, but chefs say you’ll pay for it in the end by having cookware that doesn’t last as long and doesn’t cook as well. Becker notes that aluminum cookware, which typically costs less, should be avoided at, well, all costs.

    In terms of brand preferences, chefs mention many higher-end names, such as T-fal , All-Clad and Le Creuset. And when it comes to that blender for his morning smoothies, Kim says he swears by his Vitamix.

    Avoid sets

    The problem with buying any cookware set, even one with as few as 10 pieces, is that it often means duplicating items you already have, chefs say. Plus it doesn’t allow you to mix and match brands and take advantage of the fact that certain brands may be better than others for certain items.

    Noel suggests you purchase cookware for your kitchen the same way you purchase clothes for your wardrobe. “Buy pieces to fill in what you’re missing or need to update,” she says.

    Take care of what you own

    Even the best cookware won’t measure up if you don’t treat it properly. Becker says it’s important to wash pots and pans pretty much immediately after each use so that food and grease don’t harden and become difficult to remove. And when it comes to that cast-iron pan, Becker suggests that it be seasoned and cleaned with salt before being oiled lightly to seal it.

    Now read: Americans are sick and tired of tipping. Here’s why we need to tip more — not less.

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

    The Nasdaq just fell into a correction. Now what?

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

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

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

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

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

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

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

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

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


    Dow Jones Market Data

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

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

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

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  • Homes are expensive right now, but these mortgage bonds look cheap

    Homes are expensive right now, but these mortgage bonds look cheap

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    U.S. homes may be wildly unaffordable for first-time buyers, but mortgage bonds backed by those same properties could be dirt cheap.

    Shocks from the Federal Reserve’s dramatic rate increases have walloped the $8.9 trillion agency mortgage-bond market, the main artery of U.S. housing finance for almost the past two decades.

    Spreads, or compensation for investors, have hit historically wide levels, even through the sector is underpinned by home loans that adhere to the stricter government standards set in the wake of the subprime-mortgage crisis.

    Bond prices also have tumbled, sinking from a peak above 106 cents on the dollar to below 98, despite guarantees that mean investors will be fully repaid at 100 cents on the dollar.

    From $106 to $98 cents, agency mortgage-bond prices are falling.


    Bloomberg, Goldman Sachs Global Investment Research

    “It’s really, really struggled,” Nick Childs, portfolio manager at Janus Henderson Investors, said of the agency mortgage-bond market during a Thursday talk on the firm’s fixed-income outlook.

    Yet Childs and other investors also see big opportunities brewing. While mortgage bonds have gotten cheaper with the sector’s two anchor investors on the sidelines, the stalled housing market should breed scarcity in the bonds, which could help lift the sector out of a roughly two-year slump.

    Prices have tumbled since rate shocks hit, but also since the Fed continued winding down its large footprint in the sector by letting bonds it accumulated to help shore up the economy roll off its balance sheet.

    Banks awash in underwater securities have pulled back too. The repricing of similar bonds helped hasten the collapse of Silicon Valley Bank in March.

    “Banks have been not only absent, but selling,” said Childs, who helps oversee the Janus Henderson Mortgage-Backed Securities exchange-traded fund
    JMBS,
    an actively managed $2 billion fund focused on highly rated securities with minimal credit risk.

    “But we’re moving into an environment where supply continues to dwindle,” he said, given anemic refinancing activity and the dearth of new home loans being originated since 30-year fixed mortgage rates topped 7%.

    The bulk of all U.S. mortgage bonds created in the past two decades have come from housing giants Freddie Mac
    FMCC,
    +0.66%    ,
    Fannie Mae
    FNMA,
    +1.09%
    and Ginnie Mae, with government guarantees, making the sector akin to the $25 trillion Treasury market. But unlike investors in Treasurys, investors in mortgage bonds also earn a spread, or extra compensation above the risk-free rate, to help offset its biggest risk: early repayments.

    While homeowners typically take out 30-year loans, most also refinanced during the pandemic rush to lock in ultralow rates, instead of continuing to make three decades of payments on more expensive mortgages. If someone refinances, sells or defaults on a home, it leads to repayment uncertainty for bond investors.

    “To put this another way, the biggest risk to mortgages is now off the table, yet spreads are at or near historic wides,” said Sam Dunlap, chief investment officer, Angel Oak Capital Advisors, in a new client note.

    That spread is now far above the long-term average, topping levels offered by relatively low-risk investment-grade corporate bonds.

    Agency mortgage bonds are offering far more spread that investment-grade corporate bonds. But these mortgage bonds will fully repay if borrowers default.


    Janus Henderson Investors

    Agency mortgage bonds typically are included in low-risk bond funds and can be found in exchange-traded funds. While they have been hard hit by the sharp selloff in long-dated Treasury bonds
    BX:TMUBMUSD10Y

    BX:TMUBMUSD30Y,
    there has also been hope that the worst of the storm could be nearly over.

    Goldman Sachs credit analysts recently said they favored the sector but warned in a weekly client note that it still faces “high rate volatility and a dearth of institutional demand.”

    As evidence of the U.S. bond selloff, the popular iShares 20+ Year Treasury Bond ETF
    TLT
    recently sank to its lowest level in more than a decade. It also was on pace for a negative 10% total return on the year so far, according to FactSet. Janus Henderson’s JMBS ETF was on pace for a negative 2.7% total return on the year through Friday.

    “Frankly, why they fit portfolios so well is that because the government backs agency mortgages, there is no credit risk,” Childs said. “So if a borrower defaults, you get par back on that. It just comes through as a typical payment.”

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  • Subprime car-loan rates are hitting 17%-22%. Should investors be worried?

    Subprime car-loan rates are hitting 17%-22%. Should investors be worried?

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    Many borrowers with subprime credit have been paying 17% to 22% rates on new auto loans this year as the Federal Reserve’s inflation fight takes a toll on lower-income households.

    That borrowing range reflects the average cost, or annual percentage rate, for a loan in recent subprime auto bond deals, according to Fitch Ratings, an increase from last year’s average APR of closer to 14%.

    Higher borrowing costs can mean households need to put more of their income into monthly auto payments, ramping up the risks of late payments, defaults and car repossessions. Those risks, however, have yet to make investors flinch.

    The subprime auto sector already has cleared almost $30 billion of new bond deals this year, according to Finsight, a pace that’s slightly below volumes from the past two years, but still above historical levels since 2008.

    The subprime auto bond market is revved up, even as borrowing rate soar


    Finsight

    “I do believe there has to be a reckoning if rates stay higher for longer,” said Tracy Chen, a portfolio manager on Brandywine Global Asset Management’s global fixed income team.

    Figuring out when the tumult might hit has proven difficult. Instead of slowing, the economy has shown resilience despite the Fed lifting its policy rate to a 22-year high of 5.25% to 5.5%. The central bank also indicated it might need to keep rates higher for some time to fight inflation. Longer-duration bond yields, as a result, have pushed higher, but still hover below 5%.

    Subprime standoff

    Inflation eats away at paychecks, especially those of lower-wage workers, a problem the Fed hopes to solve by keeping borrowing rates elevated. A gauge of inflation out Thursday showed consumer prices were steady at a 3.7% yearly rate in September, above the Fed’s 2% target.

    “This recession has been on everyone’s mind for the past three years,” Chen said. While she thinks the economy will likely contract in the middle of 2024, a lot of damage could be done before that. “The longer rates stay here, the harder the landing.”

    For now, the Fed is widely expected to hold rates steady at its next meeting in November. “Fed policy makers are now shifting their focus from ‘how high’ to raise the policy rate to ‘how long’ to maintain it at restrictive levels,” said EY Chief Economist Gregory Daco, in emailed comments.

    Stocks were flat to slightly higher in choppy trade at midday Thursday after the inflation report came in hotter than forecast, with the Dow Jones Industrial Average
    DJIA
    near unchanged and the S&P 500 index
    SPX
    up 0.2%.

    Past recessions and the burden of higher interest costs typically hit lower-wage workers harder, making subprime credit a canary in the coal mine for the rest of financial markets. Even so, investors in subprime auto bonds have yet to demand significantly more spread, or compensation, to offset potentially higher defaults among these borrowers.

    Related: Subprime auto defaults on path toward 2008 crisis levels, say portfolio managers

    Take the AAA rated 2-year slice of a new bond deal issued in mid-October by one of the subprime auto sector’s biggest players. It priced at a spread of 115 basis points above relevant risk-free rate, up from a spread of 90 basis points on a similar bond issued in August, according to Finsight, which tracks bond data.

    When factoring in Treasury rates, the yield on the bonds bumped up to about 6% and 5.7%, respectively. The shot at higher returns and low delinquencies in subprime auto bonds have likely helped with investor confidence. The rate of subprime auto loans at least 60-day past due in bond deals was about 5% in September, according to Intex, up from historic lows around 2.5% two years ago.

    “I think people still feel confident,” Chen said of subprime auto bonds. When putting a recent bond out on a Wall Street list to gauge its market value, she said bids come in right away.

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  • ‘Banks fail. It’s OK,’ says former FDIC chair Sheila Bair.

    ‘Banks fail. It’s OK,’ says former FDIC chair Sheila Bair.

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    Higher interest rates may be painful in the short term, but banks, savers and the financial ecosystem will be better off in the long run, said Sheila Bair, former chair of the Federal Deposit Insurance Corp.

    “When money is free, you squander it,” Bair said in an interview with MarketWatch. “It’s like anything. If it doesn’t cost you anything, you’re going to value it less. And we’ve had free money for quite some time now.”

    Bair, who led the FDIC from 2006 to 2011, caused a stir recently in criticizing “moonshots,” the crypto industry and “useless innovations” like Bored Ape NFTs, which proliferated because of speculation and near-zero interest rates.

    Her main message has been that the path to higher rates, while potentially “tricky,” ultimately will lead to a more stable financial system, where “truly promising innovations will attract capital” and where savers can actually save.

    Former FDIC Chair Sheila Bair was dubbed “the little guy’s protector in chief” by Time Magazine in the wake of the subprime mortgage crisis.

    Bair sat down for an interview with Barron’s Live, MarketWatch edition, to talk about the ripple effects of higher rates, what could trigger another financial crisis and why more regional banks sitting on unrealized losses could fail in the wake of Silicon Valley Bank’s collapse in March.

    “We probably will have more bank failures,” Bair said. “But you know what? Banks fail. It’s OK. The system goes on. It’s important for people to understand that households stay below the insured deposit caps.”

    The FDIC insures bank deposits up to $250,000 per account. It also has overseen 565 bank failures since 2001.

    “I know borrowing costs are going up, but your rewards for saving it are going up too,” she said. “I think that’s a very good thing.”

    However, Bair isn’t focused only on money traps and pitfalls for grown-ups. She also has two new picture books coming out that aim to explain big financial themes to young readers, including where easy-money ways, speculation and inflation come from.

    “One thing that I’ve learned from the kids is to not ask them what a loan is, because when I did that, a little hand when up, and she said: ‘That’s when you’re by yourself,’” Bair said.

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  • Family Dollar recalls dozens of P&G, J&J, Colgate products in 23 states due to incorrect temperature storage

    Family Dollar recalls dozens of P&G, J&J, Colgate products in 23 states due to incorrect temperature storage

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    Family Dollar voluntarily recalled dozens of over-the-counter drugs, products and medical devices sold at its stores because they had been stored at improper temperatures, according to the Food and Drug Administration late Tuesday.

    On the FDA’s website, the regulator said products affected by the recall were stored “outside of labeled temperature requirements by Family Dollar and inadvertently shipped to certain stores on or around June 1, 2023 through September 21, 2023.”

    Brands affected by the recall include Procter & Gamble’s
    PG,
    +0.99%
    Crest, Vicks and Pepto Bismol; Colgate
    CL,
    +0.26%
    ; Johnson & Johnson Inc.’s
    JNJ,
    -0.11%
    Tylenol and Listerine; and Bayer’s
    BAYN,
    +3.04%
    Aleve, according to a list provided by the FDA.

    The items were sold at stores in Alabama, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Montana, North Dakota, Nebraska, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming, between June 1 and Oct. 4, the FDA said.

    Family Dollar was acquired by Dollar Tree Inc.
    DLTR,
    +3.26%
    in a deal that closed in July 2015.

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  • Treasury yields are climbing: ‘There’s never really been such an attractive opportunity for fixed-income investments’

    Treasury yields are climbing: ‘There’s never really been such an attractive opportunity for fixed-income investments’

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    While stocks get clobbered by rising bond yields, financial experts say everyday investors can roll with the punches by increasing their exposure to longer-term Treasurys and other fixed income — so long as they understand what they are doing.

    Yield — and more of it — has been a great-sounding idea for more people ever since the Federal Reserve started increasing its benchmark interest rate in March 2022.

    High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. It’s easy to find these products with rates in the 4% and 5% range.

    Treasury bills, which come due within a year, have also been a yield-producing place to put cash. Yields on T-bills
    BX:TMUBMUSD06M
    of varying length are over 5%, up from roughly 4.5% around the start of the year.

    “High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. ”

    Yet yields have been inducing anxiety lately. For well over a month, the speedy ascent of yields for longer-term Treasury debt and a bond market sell-off have been knocking the stock market for a loop.

    Still, some financial experts say there’s nothing wrong with buying longer-term Treasurys for the person who wants to keep putting their cash to work. Of course, they need to understand the risks and rewards for bonds when interest rates rise and fall.

    Also see: As Treasury yields rise, Wall Street wonders what the Fed will do next. Where should you park your extra cash?

    “Moving from cash to fixed income is the right move right now,” said wealth adviser Marisa Bradbury, managing director of the Florida offices for Sigma Investment Counselors. “You can definitely lock in some decent rates we haven’t seen in a long time.”

    “Before, fixed income was so much a principal protection piece of the portfolio. Now you can actually earn a decent income on it too,” she said.

    “The upside to what’s happened is for savers,” said Matt Sommer, head of specialist consulting group at Janus Henderson Investors. “There’s never really been such an attractive opportunity for fixed income investments as there is now.”

    To be sure, there was a time when Treasury yields where far above their current mark. In the early to mid-1980s, the yields on the 10-year Treasury note and 30-year Treasury bond exceeded 10%. Of course, Sommer and other financial planners are focused on the present and the future because that’s what financial planning is all about. Here’s what they are thinking:

    The ‘barbell’ approach

    When clients building their nest egg want to go all in on T-bills, Sommer is instead advising they use a “barbell” approach that adds a mix of longer-term Treasurys and fixed income too.

    “This is exactly the time investors shouldn’t hibernate on the short end of the [yield] curve,” said Richard Steinberg, chief market strategist and a principal at The Colony Group, a wealth advisory firm. He’s also advising clients to extend their duration on their Treasury and fixed income investments.

    Yields climbed again Friday morning after the stronger than expected September jobs report. The yield on the two-year Treasury note
    BX:TMUBMUSD02Y
    rose to almost 5.1%, up from 5.023% Thursday afternoon and up from 4.26% a year ago.

    The yield on the ten-year Treasury note
    BX:TMUBMUSD10Y
    climbed to 4.86%, up from 4.715% Thursday afternoon, and up from 3.82% a year ago. The yield on the 30-year bond
    BX:TMUBMUSD30Y
    reached 5.01%, up from 4.88% on Thursday and up from 3.78% a year ago – heading Friday morning for the highest level since August 2007.

    Bond yield and price always move in different directions. When interest rates rise, bond prices decrease and bond yields increase. When rates fall, prices increase and yields decrease. That’s where the note of caution comes in.

    Brace for losses if the Fed keeps increasing interest rates, said David Sekera, chief U.S. market strategist at Morningstar, the investment research firm.

    For now, it may be a good time for bond portfolios to beef up the long side. “Part of what we are seeing in the stock market is a reallocation out of stocks and into fixed income,” he said.

    Related: Why rising Treasury yields are upsetting financial markets

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  • How to maximize your streaming in October 2023, and why Netflix is all you really need

    How to maximize your streaming in October 2023, and why Netflix is all you really need

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    It’s time to churn, baby, churn.

    The streaming scene has changed significantly over the past year or so, and for the worse: more expensive, less new programming, smaller libraries of older shows. And it’s coming at a time when consumers are being increasingly pressed by higher costs on all fronts. Prices for Disney’s ad-free tiers are rising sharply in October, and Amazon will jack up prices early next year for those who don’t want to see commercials. So it’s time for consumers to once again reassess which services are really worth paying for.

    There are three options if you don’t want your monthly streaming bill to look like your old triple-digit cable bill: bundle (you can save significantly with a Hulu-Disney+ package, for example), move to cheaper plans with commercials (ugh) or just drop the services you watch least. Pick a maximum monthly price ceiling and stick to it — at this point, most people don’t need more than two or three services anyway.

    If you’re frustrated by paying more for less, and want to make a point, cancelling a service is the one way that companies will take notice. Streaming services hate churn (adding and dropping services month-to-month) because it lowers their subscriber base and forces them to raise their marketing costs to win you back. As a consumer, it’s really your only weapon.

    Don’t like how Max keeps removing older shows? Dump it. Finding yourself watching less and less Disney+? Ditch it. It’s satisfying, it’s economical and you can always sign up again in the future.

    One benefit of streaming services is they’re a lot easier to cancel than cable. With prices soaring, now’s the time to be brutal in winnowing your subscriptions. A churn strategy takes some planning, but it pays off. Keep in mind that a billing cycle starts when you sign up, not necessarily at the beginning of the month.

    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 or sell, and picks the best shows to help you make your monthly decisions.

    Here’s a look at what’s coming to the various streaming services in October 2023, and what’s really worth the monthly subscription fee:

    Netflix ($6.99 a month for basic with ads, $15.49 standard with no ads, $19.99 premium with no ads)

    After a ho-hum past few months, Netflix
    NFLX,
    +0.33%
    is rolling out a more robust lineup in October. Which is nice, because no other streaming service is.

    After a two-year layoff, the French heist thriller series “Lupin” (Oct. 5) returns for its third season. Omar Sy stars as a master thief who’s now on the lam, and he carries the show largely on his charisma. It’s a fun one, and a welcome return for viewers.

    But the big-name show of the month is “The Fall of the House of Usher” (Oct. 12), from horror hit-maker Mike Flanagan (“The Haunting of Hill House,” “Midnight Mass”). The miniseries, based on Edgar Allan Poe’s classic story, combines Gothic horror with a modern twist, as the corrupt CEO of a family-owned and scandal-plagued pharmaceutical company is forced to face demons from his past as his family members keep dying, one by one, in increasingly gruesome ways. The sprawling cast includes Bruce Greenwood, Annabeth Gish, Carl Lumbly, Carla Gugino, Rahul Kohli, Mark Hamill, Henry Thomas and Mary McDonnell. This should be one to watch, if for nothing else than to finally see a Sackler-like family get their comeuppance.

    Also on the way: the seventh seasons of the raunchy animated adolescent comedy “Big Mouth” (Oct. 20) and the Spanish high school soap “Elite” (Oct. 20); “Pain Hustlers” (Oct. 27), a meh-looking satirical crime drama starring Emily Blunt and Chris Evans as scheming pharmaceutical reps; and the nature documentary “Life on Our Planet” (Oct. 25), narrated by Morgan Freeman.

    More: What’s new on Netflix in October 2023 — and what’s leaving

    And you may have missed it, but Netflix snuck in a new season of “The Great British Baking Show” at the end of September. New episodes stream every Tuesday, and feature new co-host Alison Hammond, replacing Matt Lucas, who always seemed out of place.

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

    Play, pause or stop? Play. Between some good-looking new shows, fresh eps of the “Great British Baking Show” and recent additions such as “Sex Education” (though its final season is underwhelming) and HBO’s classic “Band of Brothers,” Netflix is once again a must-have.

    Max ($9.99 a month with ads, or $15.99 with no ads)

    After a dismal September, Max has a better October lineup, with Season 2 of the beloved pirate comedy “Our Flag Means Death” (Oct. 5), starring Rhys Darby and Taika Waititi as wildly different ship captains involved in a star-crossed romance; Season 2 of “The Gilded Age” (Oct. 29), Julian Fellowes’ “Downton Abbey”-esque costume drama set in 1880s New York high society, with a sprawling cast that includes Carrie Coon, Cynthia Nixon, Christine Baranski, Morgan Spector and Louisa Jacobson; and the fourth and final season of the DC superhero dramedy “Doom Patrol” (Oct. 12).

    Notably, Warner Bros. Discovery’s
    WBD,
    +1.59%
    Max is launching its live-sports tier — the unfortunately named Bleacher Report Sports — on Oct. 5, just in time for the MLB playoffs and upcoming NBA season. The add-on tier will be free for all subscribers through February, when its price will shoot up to $9.99 a month.

    Also: What’s new on Max in October 2023 — and what’s leaving

    This is also your last chance to watch a bunch of AMC shows that are getting a two-month promotional run on Max: “Fear the Walking Dead” Seasons 1-7, “Anne Rice’s Interview with the Vampire” Season 1, “Dark Winds” Season 1, “Gangs of London” Seasons 1-2, “Ride with Norman Reedus” Seasons 1-5, “A Discovery of Witches” Seasons 1-3, and “Killing Eve” Seasons 1-4 will all leave Oct. 31. Do yourself a favor and at least watch “Dark Winds.”

    One more hidden gem to discover: Season 3 of the British rom-com “Starstruck,” which landed Sept. 28. It’s utterly charming and unwaveringly romantic, with literal LOL moments and some of the most swoon-worthy banter in recent years. Catch up with all three seasons, it’s an easy binge that’s well worth it.

    Who’s Max for? HBO fans and movie lovers. And now, unscripted TV fans too, with a slew of Discovery shows.

    Play, pause or stop? Pause and think it over. It’s an exceptionally weak month for streamers, but Max’s lineup — especially with the addition of live sports and its deep library — makes it one of the least weakest.

    Amazon’s Prime Video ($14.99 a month, or $8.99 without Prime membership)

    Prime Video has a fine lineup in October. Not great. Not terrible. But very OK.

    “Totally Killer” (Oct. 6) looks to be a cleverer-than-most spin on a horror trope, as Kiernan Shipka (“Mad Men”) stars as a 17-year-old who travels back in time to 1987 to stop a serial killer before he can start a slaying spree that terrorized her mother (Julie Bowen).

    Greg Daniels’ existential comedy “Upload” (Oct. 20) is back for its third season of rom-com exploits in a digital afterlife, thanks to uploaded consciousness. (Disclaimer: I liked Season 1, but can’t for the life of me remember if I ever watched Season 2, which doesn’t bode well, but perfectly fits this month’s “meh it’s OK” theme.)

    Meanwhile, Amazon’s
    AMZN,
    +0.90%
    free, ad-supported channel, Freevee, has the second season of “Bosch: Legacy” (Oct. 20), the “Bosch” spinoff starring Titus Welliver as a private investigator in L.A., while his daughter Maddie (Madison Lintz) charts her own path as a police officer. As gritty detective shows go, it’s solid.

    Prime Video also has a decent lineup of NFL Thursday Night Football; “The Burial” (Oct. 13), a funeral-home drama movie starring Oscar-winners Jamie Foxx and Tommy Lee Jones; all 11 seasons of the classic sitcom “Frasier” (Oct. 1), just in time for the reboot on Paramount+; as well as new eps every week of “The Boys” spinoff “Gen V” and the season finale of “The Wheel of Time” (Oct 6).

    See more: Everything coming to Amazon’s Prime Video and Freevee in October 2023

    It’s also a good time to dig into Prime Video’s extensive library, before commercials come early next year. In an obnoxious move, rather than add an ad-supported tier at a lower price, Amazon will subject all subscribers to commercials — unless they pay an extra $3-a-month ransom. Commercials will be especially annoying on Prime’s more cinematic series, so watch great-looking shows like “I’m a Virgo,” “Dead Ringers” and “The English” interruption-free, while you still can.

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

    Play, pause or stop? Pause. There’s no a compelling reason to start a subscription now, but if you already have one, there’s probably enough to watch.

    Disney+ ($7.99 a month with ads, $13.99 with no ads, starting Oct. 12)

    After a hiatus of more than two years, Marvel’s “Loki” (Oct. 5) is finally back for its second season. The new season finds the eponymous god of mischief (played by Tom Hiddleston) bouncing across the multiverse in a battle for free will while trying to elude agents of the mysterious Time Variant Authority. Season 1 of “Loki” was one of Marvel’s better TV adaptations, and hopes are high that Season 2 can recapture that sense of chaotic fun. Owen Wilson returns as TVA agent Mobius, and Oscar winner Ke Huy Quan (“Everything Everywhere All at Once”) joins the cast, which also features Jonathan Majors as big bad Kang the Conqueror, which is… problematic. Disney is reportedly still planning for Majors to play a key role in “Loki” and the next phase of “Avengers” movies despite his arrest on assault charges earlier this year, which prompted troubling allegations of past physical and emotional abuse toward women. (“Loki” had already finished filming prior to his arrest.)

    Disney also has “Goosebumps” (Oct. 13), about a group of high school friends fighting supernatural forces as they uncover long-buried secrets about their small town in this series adaptation of R.L. Stine’s hugely popular series of spooky novels. (It’ll also stream on Hulu.)

    The “Star Wars” spinoff “Ahsoka” has its season finale Oct. 3, while ABC’s “Dancing with the Stars” will stream every Tuesday.

    Who’s Disney+ for? Families with kids, hardcore “Star Wars” and Marvel fans. For people not in those groups, Disney’s
    DIS,
    +1.15%
     library can be lacking.

    Play, pause or stop? Pause. The price of ad-free Disney+ jumps by $3 a month starting Oct. 12 — how much do you or your family really want to watch “Loki” and “Goosebumps”? It’ll be worth it for some, but an opportune time to cancel for others.

    Hulu ($7.99 a month with ads, or $17.99 with no ads, starting Oct. 12)

    Hulu has been on a fantastic run since the start of summer, but all good things must end. And it happens to coincide with a $3-a-month hike to its ad-free subscription.

    October’s lineup is weak, and heavily weighed toward Halloween-themed fare, such as Season 2 of FX’s spinoff anthology “American Horror Stories” (Oct. 26); the Stephen King thrillers “Rose Red” (Oct. 1) and “The Boogeyman” (Oct. 5); the Starz horror series “Ash vs. Evil Dead” (Oct. 1); the body-horror movie “Appendage” (Oct. 2); and “Goosebumps” (Oct. 13), a live-action adaptation of R.L. Stine’s bestselling kids’ book series (which will also stream on Disney+).

    Non-horror shows include new seasons of Fox’s “The Simpsons,” “Family Guy” and “Bob’s Burgers” (all Oct. 2), and Season 2 of the comedy “Shorsey” (Oct. 27), the “Letterkenny” spinoff series about minor-league hockey that has a surprising amount of heart to go with its absolutely filthy dialogue.

    For more: What’s coming to Hulu in October 2023 — and what’s leaving

    As an added bonus, all five seasons of ABC’s 1980s detective-agency rom-com “Moonlighting” (Oct. 10), starring Bruce Willis and Cybill Shepherd, will stream for the first time ever (legally at least). If I remember correctly, there were some really high highs but also some really low lows — but it’ll be worth checking out, for nostalgia if nothing else.

    There are also new eps every week of “The Golden Bachelor” and “Bachelor in Paradise,” the season finale of “Only Murders in the Building” (Oct. 3) and the series finale of “Archer” (Oct. 11). And if you missed it, all three seasons of “Reservation Dogs” are there and just begging to be watched, or rewatched. (It’s about as perfect as a TV series could ever be, and the recently concluded Season 3 is the best thing I’ve seen this year.)

    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. If you’re on the ad tier, this month might be tolerable, but it’s certainly not worth $17.99.

    Paramount+ ($5.99 a month with ads, $11.99 a month with Showtime and no ads)

    Twenty years after ending its 11-season run (with 37 Emmy wins), the classic sitcom “Frasier” (Oct. 12) is back. Sort of. Kelsey Grammar returns in this revival as the pompous Dr. Frasier Crane, who’s moved back to Boston to be closer to his adult son (played by Jack Cutmore-Scott), who doesn’t necessarily want him there. The cast is mostly new, though Bebe Neuwirth (as Frasier’s ex-wife Lilith) and Peri Gilpin (his radio producer Roz) will reportedly guest star. David Hyde Pierce (Niles) and Jane Leeves (Daphne) will not return, however, which is a bummer since that’s where much of the original show’s laughs came from (John Mahoney, who played Frasier’s father Marty Crane, died in 2018). The jury’s out on this one — while in theory, it could be a refreshing update to a nostalgic favorite, the trailer is not encouraging.

    Paramount+ also has “Pet Sematary: Bloodlines” (Oct. 6), a creepy prequel to the 2019 horror reboot; “Fellow Travelers” (Oct. 27), a decades-spanning queer love story starring Matt Bomer and Jonathan Bailey; and Showtime’s courtroom drama “The Caine Mutiny Court-Martial” (Oct. 6), the late director William Friedkin’s last film, starring Keifer Sutherland, the late Lance Reddick and Jake Lacy.

    That’s on top of a live-sports lineup that includes SEC and Big Ten college football on Saturdays, NFL football every Sunday and UEFA Champions League soccer matches.

    Who’s Paramount+ for? Gen X cord-cutters who miss live sports and familiar Paramount Global
    PARA,
    +0.62%
     broadcast and cable shows.

    Play, pause or stop? Stop. There’s a good football lineup, at least.

    Apple TV+ ($6.99 a month)

    It’s another slow month for Apple
    AAPL,
    +0.30%    ,
    highlighted by the miniseries “Lessons in Chemistry” (Oct. 13), based on Bonnie Garmus’ bestselling novel. Brie Larson stars as a woman in the 1950s whose dreams of becoming a scientist are scuttled by male chauvinism, and instead becomes the host of a TV cooking show, where she inspires housewives and fights the patriarchy. Apple is getting a reputation for getting big-name stars for prestige-type series, only for the shows to fizzle out and quickly be forgotten (like “Mosquito Coast,” “Hello Tomorrow” and “Dear Edward,” for starters). I have yet to see any marketing for this series, and it would not be a surprise for someone to ask six months from now: “Wait, Brie Larson was in an Apple show?”

    There’s also a new documentary from Errol Morris, “The Pigeon Tunnel” (Oct. 20), about the life of spy-turned-writer David Cornwell, aka John le Carré; and “The Enfield Poltergeist” (Oct. 27), a four-part docuseries about the supposed real-life haunting that inspired “The Conjuring 2.”

    Apple’s biggest title will be on Oct. 20 in movie theaters, with the wide release of Martin Scorsese’s “Killers of the Flower Moon,” the spectacular-looking historical drama about a series of mysterious killings of Osage tribal members in Oklahoma in the 1920s, starring Leonardo DiCaprio, Lily Gladstone and Robert De Niro. There’s no streaming release date yet, but expect it to land on Apple TV+ after its theatrical run, possibly in November but more likely in December.

    There are also new episodes every week of “The Morning Show,” “The Changeling” (season finale Oct. 13) and “Invasion” (season finale Oct. 25).

    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. Apple’s had a great year, but there’s just not a lot on right now. But there’s good stuff coming in November (Season 4 of “For All Mankind”) and December (Season 3 of “Slow Horses”).

    Remember, you can get three free months of Apple TV+ if you buy a new iPhone, iPad or Mac. Strategically, if you buy an iPhone 15, and wait a bit to redeem the free trial, you’ll want it to extend into January.

    Peacock (Premium for $5.99 a month with ads, or $11.99 a month with no ads)

    It’s all about horror and sports for Peacock this October.

    On the scary side, there’s Season 2 of the werewolf rom-com “Wolf Like Me” (Oct. 19), starring Josh Gad and Isla Fisher; “Five Nights at Freddy’s” (Oct. 27), a horror movie based on the videogame about a troubled security guard who starts working the night shift at a cursed pizza parlor, starring Josh Hutcherson and Matthew Lillard; and the true-crime anthology “John Carpenter’s Suburban Screams” (Oct. 13).

    On the sports side, Peacock has the Rugby World Cup (through Oct. 28), NFL Sunday Night Football, Big Ten and Notre Dame college football, English Premier League soccer, and a full slate of golf, motorsports and horse racing.

    Meanwhile, the “John Wick” prequel miniseries “The Continental” ends Oct. 6.

    Who’s Peacock for? Live sports and next-day shows from Comcast’s
    CMCSA,
    -1.16%
     NBCUniversal are the main draw, but there’s a good library of shows and movies.

    Play, pause or stop? Stop. The live-sports offerings are the only lure.

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  • Medical debt should be fully removed from credit reports, Biden administration says

    Medical debt should be fully removed from credit reports, Biden administration says

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    The Consumer Financial Protection Bureau is taking steps toward removing all medical debt information from Americans’ credit reports, a move meant to help the millions of Americans whose credit scores drop after bills for expenses like unexpected hospital visits go unpaid.

    While the information surrounding most unpaid medical debts has already been removed from credit reports by the three major reporting agencies — Equifax, Experian and TransUnion — the CFPB on Thursday announced plans for a rule- making process that would…

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  • A stranger in your hotel room? Kitty-litter shortages? Online attacks are causing real-world effects.

    A stranger in your hotel room? Kitty-litter shortages? Online attacks are causing real-world effects.

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    It was past midnight when Alessandra Millican and a friend entered the Bellagio hotel room that was costing them hundreds of dollars a night, but unexpected noises made them stop cold.

    “We started hearing grunts,” she said. “It’s somebody waking up — we were halfway through the room and we realized there’s somebody sleeping in here.”

    Millican…

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  • Why the Fed’s next decisions on rates could lead to a wave of commercial-debt defaults

    Why the Fed’s next decisions on rates could lead to a wave of commercial-debt defaults

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    Getting staff back to the office is only part of the battle.

    Regional banks that went big lending on office properties also face a ticking time bomb of maturing debt that they helped create, particularly if the Federal Reserve holds its policy rate near the current 22-year high well into next year.

    “The area of greatest concerns for banks is office space,” says Tom Collins, senior partner focused on regional banks and credit unions at consulting firm firm West Monroe. Should rates stay high, “borrowers are going to face a tough decision of whether they refinance or default,” he said.

    The fight to bring more staff back to half-empty office buildings comes as an estimated $1 trillion wall of commercial real-estate loans is set to mature through 2024. While tenants haven’t shied away from signing up to pay top rents at trophy buildings, the same can’t be said for the rows of lower-rung properties lining financial districts in big cities.

    See: Labor Day is just a ‘milestone’ in the marathon to get workers back to the office

    The Fed embarks on a two-day policy meeting on Tuesday, with expectations running high for rates to stay steady, giving more time to study the impact of earlier rate increases.

    The central bank’s rate hikes have further complicated matters for landlords, and fresh debt for office buildings no longer looks cheap nor abundant. Regional banks also have been piling back on lending after Silicon Valley Bank and Signature Bank collapsed in March and as deposits fled for yield elsewhere.

    Related: FDIC kicks off $33 billion sale of seized assets from Signature Bank

    Loan volumes from Wall Street similarly have been anemic. This year it has produced slightly more than $10 billion in “conduit,” or multi-borrower, commercial mortgage-backed securities deals through the end of August, the least since 2008, according to Goldman Sachs. Coupons, a proxy for mortgage rates, have climbed above 7%, the highest since the early 2000s.

    “I don’t think this is a wash out here,” Collins said of the threat of more regional bank failures, but he does anticipate pain for lenders heavily exposed to lower quality class B and C office buildings in urban areas.

    Banks can help mitigate the wall of debt coming due by stepping up the pace of loan modifications to help borrowers keep properties, but Collins said he also anticipates lenders will need to increase loan sales, write downs and mergers or acquisitions.

    “There is no doubt there will be private equity and other investors that will be interested in buying some of these loans, taking them off the balance sheets of banks,” Collins said.

    “The obvious question there is at what discount?” he said, adding, “I think investors will wait until things get more dire to try to get a better deal.”

    Another offset to banks’ office exposure has been the relatively stable performance of hotels, industrial and other property types. But Collins said that if rates stay high and the economy falters, those sectors are likely to face challenges as well.

    The 10-year Treasury yield,
    BX:TMUBMUSD10Y
    a benchmark lending rate for the commercial real estate industry, was near 4.32% on Monday, hovering around a 16-year high ahead of the Fed meeting, while the policy-sensitive 2-year Treasury rate
    BX:TMUBMUSD02Y
    was near 5.06%. Stocks
    SPX

    DJIA
    were edging higher.

    Office distress intensified in August, with the special servicing rate of loans in bond deals hitting 7.72%, compared with a 6.67% rate for all property types, according to Trepp, which tracks the commercial mortgage-backed securities market. A year ago, the rate of problem office loans was 3.18%.

    “If I was an investor, I would be patient around this, because values are only going to come down, I would imagine,” Collins said.

    Check out: Powell could still hammer U.S. stocks on Wednesday even if the Fed doesn’t hike interest rates

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  • UAW strike sets the stage for the 4-day work week — and a win could take it mainstream

    UAW strike sets the stage for the 4-day work week — and a win could take it mainstream

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    Striking United Auto Workers want better wages, improved job security, retiree pay increases, and a 32-hour work week that could turbocharge broader acceptance of shorter work weeks.

    Right now, nearly 13,000 UAW workers have walked off the job at Ford Motor Co.
    F,
    -0.08%    ,
    General Motors Co.
    GM,
    +0.86%
    and Jeep and Chrysler parent Stellantis
    STLA,
    +2.18%    ,
    still considered the influential Big Three for car makers.

    If the union gets a win from on its 32-hour work week demand, that could be a big deal for momentum behind the broader four-day work week movement, experts say.

    Four days of work is “still in the early-adoption phase,” said Alex Soojung-Kim Pang, director at Four Day Week Global, where he advises companies considering how to implement a curtailed traditional work week.

    A UAW win on the 32-hour demand “would help move the four-day week from being something you do if you have a bold leader and you want to stand out in your industry, to a mainstream aspiration for every worker and business owner,” said Soojung-Kim Pang.

    “A lot more people can look at the four-day week and say if they are doing this in an auto factory, I absolutely can do it here in my small plant, or in my business,” he added.

    Even if the 32-hour work week doesn’t make it to the final deal, it’s a “game changer” that the demand is there at all, he said. The demand could plant the idea in labor talks far beyond the UAW-company standoff.

    A UAW win on the 32-hour week would cause a “massive reverberation,” said Cathy Creighton, of Cornell University’s School of Industrial and Labor Relations.

    The demand’s presence is a sign of the COVID-19 pandemic’s lasting effects, said Creighton. While five days of in-person office attendance seems like a thing of the past, “we’ve had fundamental changes in how workers and employers view work life and work-life balance.”

    Many factory workers may not be able to pull off remote work but they can press for a shortened week on the physically demanding work, she noted. Historically, the UAW was one of the first unions to deliver health benefits, vacation and pensions for its members, she noted.

    “I think the labor movement has been playing it safe for a long time, and now they are not,” Creighton said. The UAW’s 32-hour work week demand is a prime example, she said. “The five-day work week is so ingrained in our psyche that to think of something different is like an earthquake.”

    Some research indicates people are ready for a shake-up. Nearly six in 10 people who work five days say they would prefer four 10-hour days, according to an August poll in an ongoing look at worker attitudes run by academic researchers.

    “We all know that living in a plant seven days a week, 12 hours a day, isn’t a living at all. We need real work-life balance. Auto workers deserve a life,” UAW president Shawn Fain told members in a video update days before the targeted strike.

    Roughly 12,700 UAW members so far have walked off the job at a Ford Motor plant in Michigan, a GM plant in Missouri and an Ohio plant for Stellantis NV, the maker of brands like Dodge, Chrysler, Jeep and Ram Trucks.

    Of course, there’s no guarantee how far the demand gets. The companies have counter proposals for the array of union asks, as a chart shows from researchers at Evercore ISI. They don’t yet have counters on the 32-hour work week.

    Switching to a 32-hour week with a 40-hour pay rate would be a sharp labor cost on top of the wage increases the UAW is already seeking, a Stellantis spokeswoman said. It would require hiring at least 25% more workers to stick with current manufacturing schedules, she said.

    “We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers,” the company said in a statement.

    In a statement, GM said it was “disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments.”

    Ford did not respond to a request for comment.

    “It’s a big game of chess that Shawn Fain is playing. We’ll see how it turns out,” Creighton said.

    “Even if they don’t get the four-day week this time, there are going to be other moves in this game in the future,” from the UAW and beyond, Soojung-Kim Pang said.

    “Even if you have to give on the four-day week now, that doesn’t mean you give on the four-day week as an ideal or a goal.”

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  • Household income rose in just 5 states last year. Is your state one of them?

    Household income rose in just 5 states last year. Is your state one of them?

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    American workers are feeling the pinch.

    The median annual household income in the U.S. was $74,755 in 2022, a 0.8% decline from the previous year after adjusting for inflation, according to the latest data from the Census Bureau.

    The decline in income is “disappointing,” said Sharon Parrott, president of the Center on Budget and Policy Priorities,…

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