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Tag: consumer services

  • U.S. stock futures give up early gains after Wall Street’s best week since June

    U.S. stock futures give up early gains after Wall Street’s best week since June

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    U.S. stock futures gave up strong early-session gains overnight after Wall Street notched its best week since June.

    After initially surging about 300 points, or 1% on Sunday evening, Dow Jones Industrial Average futures
    YM00,
    -0.02%
    were last about flat at midnight Eastern, while S&P 500 futures
    ES00,
    +0.05%
    and Nasdaq-100 futures
    NQ00,
    +0.16%
    similarly gave up sharp early gains.

    The U.S. Dollar Index
    DXY,
    +0.19%
    nudged higher, while the British pound
    GBPUSD,
    +0.12%
    surrendered much of an afternoon rally fueled by the possibility that Rishi Sunak will be Britain’s next prime minister, after Boris Johnson bowed out of the running. Crude prices
    CL.1,
    -0.55%
    ticked slightly higher Sunday.

    On Friday, the Dow Jones Industrial Average
    DJIA,
    +2.47%
     gained 748.97 points, or 2.5%, to close at 31,082.56. The S&P 500
    SPX,
    +2.37%
     climbed 86.97 points, or 2.4%, to finish at 3,752.75, and the Nasdaq Composite
    COMP,
    -0.81%
     rose 244.87 points, or 2.3%, to end at 10,859.72.

    The three major indexes scored their biggest weekly percentage gains since June last week. For the week, the Dow rose 4.9%, the S&P 500 gained 4.7% and the Nasdaq advanced 5.2%.  Yields on 10-year Treasury notes
    TMUBMUSD10Y,
    4.156%
    ended Friday at 4.228%.

    Investors were heartened by reports that the Fed may back off slightly from its aggressive rate-hiking policy later this year.

    The upcoming week is the busiest of the third-quarter earnings season, with 165 S&P 500 companies, including 12 Dow components reporting. That includes earnings from Big Tech companies Alphabet
    GOOGL,
    +1.16%    ,
    Amazon
    AMZN,
    +3.53%    ,
    Apple
    AAPL,
    +2.71%    ,
    Meta
    META,
    -1.16%
    and Microsoft
    MSFT,
    +2.53%    .

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  • IRS releases new federal tax brackets and standard deductions. Here’s how they affect your family’s tax bill.

    IRS releases new federal tax brackets and standard deductions. Here’s how they affect your family’s tax bill.

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    America’s high inflation rate will produce a 7% increase in the size of the standard deduction when workers file their taxes on their 2023 income, according to new inflation adjustments from the Internal Revenue Service.

    It’s also going to pump up tax brackets by 7% as well, according to the annual inflation adjustments the IRS announced this week.

    Many tax code provisions — but not all — are indexed for inflation, so the announcements are a recurring event. But when inflation is persistently clinging to four-decade highs, these annual adjustments carry extra significance.

    “When inflation is persistently clinging to four-decade highs, these annual adjustments of approximately 7% for the standard deduction carry extra significance.”

    Start with the standard deduction, which is what most people use instead of itemizing deductions.

    The standard deduction for individuals and married people filing separately will be $13,850 for the 2023 tax year. That’s a $900 increase from the $12,950 standard deduction for the upcoming tax season.

    For married couples filing jointly, the payout climbs to $27,700 for the 2023 tax year. That’s a $1,800 increase from the $25,900 standard deduction set for the upcoming tax year.

    The increases in the marginal tax rates reflect the same 7% rise. For example, the 22% tax bracket for this year is over $41,775 for single filers and over $83,550 for married couples filing jointly. Next year, the same 22% bracket applies to incomes over $44,725 and over $89,450 for married couples filing jointly.

    MarketWatch/IRS

    “The changes seem to be much larger than previous years because inflation is running much higher than it has in previous decades,” said Alex Durante, economist at the Tax Foundation, a right-leaning tax think tank.

    The IRS arrives at its inflation adjustments by averaging a slightly different inflation gauge, the so-called “chained Consumer Price Index” instead of the widely-watched Consumer Price Index, Durante noted. That’s an outcome of the Trump-era Tax Cuts and Jobs Act of 2017, he added.

    “The reason they do this is because the regular CPI is thought to overstate inflation because it doesn’t take into account the substitution that shoppers can make as cost rise,” Durante said. Shoppers substitute when they swap a more expensive item for cheaper one, and research shows many Americans are using the tactic.

    The IRS inflation adjustments come after September CPI data last week showed inflation of 8.2% year-over-year, slightly off from 8.3% in August. Also last week, the Social Security Administration said next year’s payments would include an 8.7% cost of living adjustment.

    “The payout on the earned income tax credit — geared at low- and moderate-income working families who have been hit hard by red-hot inflation — is also increasing. ”

    The payout on the earned income tax credit is also increasing. The maximum payout for a qualifying taxpayer with at least three qualifying children climbs to $7,430, up from $6,935 for this tax year. The longstanding credit is geared at low- and moderate-income working families who have been hit hard by red-hot inflation.

    More than 60 provisions are slated for an increase inline with inflation, but many portions of the tax code are not indexed for inflation. Depending on the circumstances, the taxes or the tax breaks kick in sooner.

    Capital gains tax rules one example. The IRS lets a taxpayer use capital losses to offset capital gains taxes. If losses exceed gains, the IRS allows a taxpayer to deduct up to $3,000 in excess loses. They can then carry the remainder of the capital loses to future tax years. It’s been more than four decades since lawmakers last set the limit, according to Durante.

    “While more than 60 provisions are slated for an increase inline with inflation, many portions of the tax code are not indexed for inflation. They include capital gains tax. ”

    Given the stock market’s rocky downward slide this year, many investors might welcome a fast-approaching tax break — even if it only enables a $3,000 deduction.

    At the same time, a married couple selling their home can exclude the first $500,000 of the sale from capital gains taxation, and it’s $250,000 for a single filer. It’s been that way since the exclusion’s 1997 establishment.

    The once white-hot housing market may be cooling, but many sellers may still be facing the point when taxes kick in. The median home listing was over $367,000 as of early October, according to Redfin
    RDFN,
    +2.29%    .

    The child tax credit is another example. After the payout to parents last year jumped to $3,600 for children under age 6 and $3,000 per child age 6 to 17, it’s back to a maximum $2,000. The credit’s refundable portion climbs from $1,500 to $1,600 during tax year 2023, the IRS notes.

    Proponents of the boosted payouts and some Congressional Democrats want to revive the larger payments in negotiations tied to corporate taxes. The high costs of living are a strong reason to bring back the boosted credit, they say.

    Related:

    What smart strategies can lower your tax bill as year-end approaches? Read this before making any tax moves.

    Three things the best 401(k)s offer that can help you save a lot more

    Enhanced child tax credit helped reduce poverty for families before it ended last year. But there’s one way Republicans and Democrats could agree on reinstating it.

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  • IRS sets new 401(k) limits — investors can save a lot more money in 2023

    IRS sets new 401(k) limits — investors can save a lot more money in 2023

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    People can contribute up to $22,500 in 401(k) accounts and $6,500 in IRAs in 2023, the IRS said Friday.

    For 401(k)s, that’s an almost 10% increase from 2022’s contribution limit of $20,500. For IRAs, it’s a more than 8% rise from 2022’s limit of $6,000.

    As added context, the inflation-indexed bumps tax year 2023 income tax brackets and the standard deduction worked to approximately 7%.

    When the IRS increased the 401(k) contribution limits last year, it came to a roughly 5% rise.

    “Given the inflation we have been experiencing recently, the early announcement of this increase is encouraging,” Rita Assaf, vice president of retirement products at Fidelity Investments, said after the IRS released the 2023 contribution limits.

    Seven in 10 people are “very concerned” how inflating costs will impact their readiness for retirement according to a Fidelity study, Assaf noted. “Every dollar counts, and this increase will provide Americans with the opportunity to set aside just a bit more to help fund their retirement objectives,” she said.

    Older workers can save even more

    The 2023 contribution limits that apply to 401(k)s — plus 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan — are even larger for workers age 50 and over.

    Catch-up contribution limits rise to $7,500 from $6,500, the IRS said. Combine the catch-up contributions with the regular contribution limits, and workers age 50 and over can sock away $30,000 for retirement in these accounts during 2023, the agency said.

    Income phase-outs increase when it comes to possible deductions, credits and contributions

    Tax rules can let people deduct contributions to traditional IRAs so long as they meet certain conditions, pegged to issues like coverage through a workplace retirement plan and yearly income. Above phase-out ranges, deductions don’t apply if a person or their spouse has a retirement plan through work, the IRS noted.

    For 2023, a single taxpayer covered by a workplace retirement plan has a phase-out range between $73,000 and $83,000. That’s up from a range between $68,000 and $78,000 during 2022.

    For a married couple filing jointly “if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $116,000 and $136,000,” the IRS said.

    If an IRA saver doesn’t have a workplace plan but their spouse is covered, “the phase-out range is increased to between $218,000 and $228,000,” the agency noted.

    There are also changes coming for the Roth IRA, which people fund with after-tax money and then can tap tax-free later.

    Read also: Here’s when you should choose a Roth IRA over a traditional account

    The Roth IRA contribution limits also climb to $6,500. Retirement savers putting money in their 401(k) can’t also put pre-tax money in a traditional IRA, but they can contribute to a Roth account.

    Still, the eligibility to contribute to Roth IRA accounts is pegged to income, subject to phase-out ranges.

    In 2023, the income phase-out range on Roth IRA contributions climbs to between $138,000 – $153,000 for individuals and people filing as head of household. (That’s up from a range between $129,000 and $144,000, the IRS noted.)

    With a married couple filing jointly, next year’s phase-out range goes to $218,00 – $228,000. That’s a step up from this year’s $204,000 – $214,000 range.

    The income limit surrounding the saver’s credit, which is geared toward low- and moderate-income households, is also getting a lift. The credit lets taxpayers claim 10%, 20% or one-half of contributions to eligible retirement plans, including a 401(k) or an IRA. The credit’s income limits are climbing, the IRS said.

    The 2023 income limit will be $73,000 for married couples filing jointly, $54,750 for heads of household and $36,500 for individuals and married individuals filing separately, according to the IRS.

    Don’t miss: Opinion: It’s harder for me to look at my 529 balance than my 401(k) because I have a high school junior. Here’s some advice for parents on a similar timeline.

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  • Snap investors, do you still trust Evan Spiegel?

    Snap investors, do you still trust Evan Spiegel?

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    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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  • Snap stock plummets more than 25% as online advertising continues to struggle

    Snap stock plummets more than 25% as online advertising continues to struggle

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    A bruising year for Snap Inc.’s shares worsened Thursday, as the stock plummeted more than 20% in after-hours trading as executives launched the company’s first major share-repurchase program amid revenue issues in a poor environment for online advertising.

    Snap
    SNAP,
    -0.64%
    executives revealed that revenue increased less than 6% year-over-year in the quarter — its slowest quarterly grow ever recorded — and said that the holiday season is shaping up similarly, with sales increasing 9% so far in the quarter. The social-media company, which laid off roughly 20% of its staff this summer in response to the issues, also declined to provide a full forecast for the important fourth quarter.

    “Our revenue growth continued to decelerate in Q3 and continues to be impacted by a number of factors we have noted throughout the past year, including platform policy changes, macroeconomic headwinds, and increased competition,” executives said in a letter to shareholders, outlining the results. “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”

    “Forward-looking revenue visibility remains incredibly challenging, and this is compounded by the fact that revenue in Q4 is typically disproportionately generated in the back half of the quarter, which further reduces our visibility,” executives explained about the lack of guidance in a letter to investors.

    The board did approve a $500 million share repurchase, a first for the young company. In a news release, executives said that the move was meant “to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.”

    Snap’s results — the first among the major tech companies who rely heavily on digital advertising — likely portend even more turbulent times ahead for Alphabet Inc.’s 
    GOOGL,
    +0.34%
     
    GOOG,
    +0.24%
    Google, Facebook parent company Meta Platforms Inc. 
    META,
    -1.28%    ,
     Twitter Inc. 
    TWTR,
    +1.18%    ,
     Pinterest Inc. 
    PINS,
    -0.30%
    and others in the grip of inflation, a war in Ukraine, foreign-exchange worries and a widening recession.

    Snap’s desultory news sent shares tumbling in extended trading for Pinterest (-8%), Trade Desk Inc.
    TTD,
    +2.26%
    (-5), Meta (-4%) and Google (-3%).

    Deteriorating macroeconomic conditions have left advertisers with little choice but to delay or cancel buys. At the same time, intensifying competition from the likes of TikTok and others has deepened headwinds.

    “As a smaller player, Snap is more susceptible but no platform is immune,” Insider Intelligence analyst Jasmine Enberg told MarketWatch. “I expect more of the same results next week” when Google and Meta report, she added.

    Snap reported a third-quarter net loss of $359.5 million, or 22 cents a share, compared with a loss of 5 cents a share a year ago. Analysts on average were expecting a loss of 24 cents a share.

    Snap’s sales increased less than 6% to $1.13 billion, barely falling short of Street estimates of $1.14 billion. Daily active users rose 19% to 363 million. FactSet analysts had modeled 358.2 million.

    Snap shares initially fell more than 20% in after-hours trading. They closed the regular trading session down 0.6% to $10.79. Shares of Snap have nosedived 77% this year, while the S&P 500 index 
    SPX,
    -0.80%
    is down 23%.

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  • IBM stock rallies on third-quarter results, upbeat forecast

    IBM stock rallies on third-quarter results, upbeat forecast

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    Shares of International Business Machines Corp. rallied in extended trading Wednesday, after the tech software, consulting and infrastructure giant reported third-quarter results that beat expectations and offered up a more upbeat full-year sales forecast.

    IBM
    IBM,
    -0.35%
    reported earnings as Wall Street tries to gauge the impact of a tough foreign-exchange environment, and the state of business spending on tech services amid worries over a downturn. But the company saw gains in hybrid cloud services, products like open-source software platform Red Hat, its consulting services and its zSystems servers and software.

    “Globally, clients view technology as an opportunity to enhance their business, which is evident in the results across our portfolio,” Chief Executive Arvind Krishna said in a statement. He added that he now expects full-year sales growth “above our mid-single-digit model.”

    That’s a bit more optimistic than the forecast he gave over the summer, when IBM reported second-quarter results. Krishna, at that time, said he continued “to expect full-year revenue growth at the high end of our mid-single-digit model.”

    Wall Street expects IBM’s full-year sales to come in at $59.667 billion, according to FactSet. Analysts expect 2022 earnings per share of $9.28. IBM also said it continued to expect around $10 billion in consolidated free cash flow for the year.

    For the third quarter, the company reported a net loss of $3.2 billion, or $3.54 per share, compared with a $1.1 billion profit, or $1.25 per share, in the year-earlier period. On an adjusted basis, IBM earned $1.81 per share.

    Sales came in at $14.1 billion, compared with $13.3 billion a year ago.

    Analysts polled by FactSet expected adjusted earnings per share of $1.79, on revenue of $13.517 billion.

    Revenue in the company’s software segment grew 7.5%. Consulting revenue rose 5.4%, while the company’s infrastructure segment jumped 14.8%.

    Shares gained 4.8% after hours on Wednesday.

    Prior to the results, analysts had zeroed in on the impact of the strong dollar and what Morgan Stanley, in a recent note, described as “continued wage pressure in consulting.” IBM has also been trying to lean more into cloud and AI technology, unloading some businesses in an effort to narrow its focus.

    Last year, in a move toward that goal, IBM spun off its infrastructure services business into Kyndryl Holdings
    KD,
    -2.85%    .
    But afterward, some analysts raised questions about IBM’s ability to grow sales and compete in the cloud-services industry. Francisco Partners, an investment firm, this year also acquired health-care data and analytics assets that were part of IBM’s Watson Health segment.

    In January, IBM declined to provide an earnings-per-share forecast. The company also changed how it organizes its business segments at the beginning of this year.

    But during the spring, Krishna said he saw “demand staying strong” even if economic growth flattens or enters into a brief recession, with the decision to halt business in Russia, following its invasion of Ukraine, the only drag on results.

    IBM stock is down 8% year to date. By comparison, the S&P 500 Index
    SPX,
    -0.67%
    is down 22%.

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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

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    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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  • Netflix Adds a Better-Than-Expected 2.4 Million Subscribers

    Netflix Adds a Better-Than-Expected 2.4 Million Subscribers

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    Netflix


    shares were trading sharply higher after the streaming giant posted better-than-expected subscriber growth for the third quarter.

    The company added 2.41 million net new subscribers in the quarter, beating its own forecast of 1 million additions. Netflix (ticker: NFLX) said it expects to add another 4.5 million subscribers in the December quarter.

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  • United Airlines says travel demand is stronger than recession pressures; shares rally

    United Airlines says travel demand is stronger than recession pressures; shares rally

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    United Airlines Holdings Inc. stock rallied after hours Tuesday after the airline said it expected the travel rebound to weather a shakier economy in the months ahead and reported third-quarter results that beat expectations.

    “Looking forward through the end of the year, the airline expects the strong COVID recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” company executives said in a statement.

    That backdrop — along with tighter flight networks and changes in how people work — helped justify the airline’s more upbeat forecast for the fourth quarter. United Airlines
    UAL,
    +3.19%
    said it expected adjusted fourth-quarter operating margin of around 10%, the first time the figure would end above pre-pandemic 2019 levels.

    United also forecast adjusted fourth-quarter earnings per share of between $2.00 and $2.25, well above FactSet forecasts for 98 cents per share. The carrier also said it expected a 24% to 25% gain in total fourth-quarter unit revenue — a much-watched industry metric that measures sales as spread out across an airline’s flight capacity — when compared to the same period in 2019.

    Adjusted fourth-quarter unit costs were seen up between 11% and 12%, and roughly 15% for the full year, when compared to the respective periods in 2019.

    For the third quarter, United reported net income of $942 million, or $2.86 per share, compared with $473 million, or $1.44 per share, in the prior-year quarter.

    On an adjusted basis, the company earned $2.81 per share, compared with a $1.02 per-share loss in the quarter a year ago and $4.07 in 2019. Revenue was $12.877 billion, compared with $7.75 billion a year ago and $11.38 billion in 2019.

    Analysts polled by FactSet expected adjusted earnings of $2.28 per share, on revenue of $12.743 billion.

    Shares jumped 7% after the market’s close. American Airlines Group Inc.
    AAL,
    +3.79%    ,
    which reports earnings on Thursday, rose 3.6% after hours.

    United, in its earnings release, also called out three demand trends that it said were “more than fully offsetting any economic headwinds.” It said that “Air travel is still in the COVID recovery phase, hybrid work gives customers the freedom and flexibility to travel for leisure more often, and external supply challenges will limit industry supply for years to come.”

    The carrier said it expected total flight capacity, a measure of available seats on flights, to be down between 9% and 10% for the fourth quarter and down around 13% for the full year, when compared to 2019 levels.

    United reported as analysts look for cracks in the travel industry’s rebound and holiday demand, after eager travelers this summer ran into flight delays and cancellations, insufficient staffing and severe weather. Airfares and fuel costs are more expensive — a function of strong demand and thinner supplies. Aircraft supply is tight, some executives have said. Airlines have also tried to bulk up flight crews, particularly pilots, after encouraging buyouts in 2020, as the pandemic left the industry without passengers and burning through cash.

    Delta Air Lines Inc.
    DAL,
    +3.34%
    last week said it expected fourth-quarter sales to grow from pre-pandemic levels, as demand for travel, after two years of pandemic-related restraint, holds up against rising prices.

    “The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international,” Delta CEO Ed Bastian said in its earnings release.

    Raymond James analyst Savanthi Syth, in a research note last week, said she expected United to see similar momentum, helped by corporate travel and international demand.

    She said American and JetBlue Airways Corp.
    JBLU,
    +1.90%
    should benefit to a lesser degree, “due to large corp and transatlantic exposure at the former and large coastal-city exposure at the latter.” JetBlue reports earnings on Oct. 25.

    Delta’s international-unit revenue growth outpaced that in its domestic business for the first time since the pandemic started. Leisure travel to Europe helped propel results, as did strong demand for Delta’s premium-class seats. Bastian said he expected Delta’s flight network to be fully restored by summer next year.

    “Demand has not come close to being quenched by a hectic summer travel season,” he said on Delta’s earnings call. “At the same time, industry supply is constrained by aircraft availability, regional pilot shortages and hiring and training needs.” 

    Delta rose 3% after the bell on Tuesday.

    United Airlines stock is down 15% so far this year. By comparison, the S&P 500 Index
    SPX,
    +1.14%
    is down 22% over that time.

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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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  • These 11 stocks can lead your portfolio’s rebound after the S&P 500 ‘earnings recession’ and a market bottom next year

    These 11 stocks can lead your portfolio’s rebound after the S&P 500 ‘earnings recession’ and a market bottom next year

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    This may surprise you: Wall Street analysts expect earnings for the S&P 500 to increase 8% during 2023, despite all the buzz about a possible recession as the Federal Reserve tightens monetary policy to quell inflation.

    Ken Laudan, a portfolio manager at Kornitzer Capital Management in Mission, Kan., isn’t buying it. He expects an “earnings recession” for the S&P 500
    SPX,
    +2.78%
    — that is, a decline in profits of around 10%. But he also expects that decline to set up a bottom for the stock market.

    Laudan’s predictions for the S&P 500 ‘earnings recession’ and bottom

    Laudan, who manages the $83 million Buffalo Large Cap Fund
    BUFEX,
    -2.86%
    and co-manages the $905 million Buffalo Discovery Fund
    BUFTX,
    -2.82%    ,
    said during an interview: “It is not unusual to see a 20% hit [to earnings] in a modest recession. Margins have peaked.”

    The consensus among analysts polled by FactSet is for weighted aggregate earnings for the S&P 500 to total $238.23 a share in 2023, which would be an 8% increase from the current 2022 EPS estimate of $220.63.

    Laudan said his base case for 2023 is for earnings of about $195 to $200 a share and for that decline in earnings (about 9% to 12% from the current consensus estimate for 2022) to be “coupled with an economic recession of some sort.”

    He expects the Wall Street estimates to come down, and said that “once Street estimates get to $205 or $210, I think stocks will take off.”

    He went further, saying “things get really interesting at 3200 or 3300 on the S&P.” The S&P 500 closed at 3583.07 on Oct. 14, a decline of 24.8% for 2022, excluding dividends.

    Laudan said the Buffalo Large Cap Fund was about 7% in cash, as he was keeping some powder dry for stock purchases at lower prices, adding that he has been “fairly defensive” since October 2021 and was continuing to focus on “steady dividend-paying companies with strong balance sheets.”

    Leaders for the stock market’s recovery

    After the market hits bottom, Laudan expects a recovery for stocks to begin next year, as “valuations will discount and respond more quickly than the earnings will.”

    He expects “long-duration technology growth stocks” to lead the rally, because “they got hit first.” When asked if Nvidia Corp.
    NVDA,
    +6.14%
    and Advanced Micro Devices Inc.
    AMD,
    +3.69%
    were good examples, in light of the broad decline for semiconductor stocks and because both are held by the Buffalo Large Cap Fund, Laudan said: “They led us down and they will bounce first.”

    Laudan said his “largest tech holding” is ASML Holding N.V.
    ASML,
    +3.79%    ,
    which provides equipment and systems used to fabricate computer chips.

    Among the largest tech-oriented companies, the Buffalo Large Cap fund also holds shares of Apple Inc.
    AAPL,
    +3.09%    ,
    Microsoft Corp.
    MSFT,
    +3.88%    ,
    Amazon.com Inc.
    AMZN,
    +6.63%
    and Alphabet Inc.
    GOOG,
    +3.91%

    GOOGL,
    +3.73%    .

    Laudan also said he had been “overweight’ in UnitedHealth Group Inc.
    UNH,
    +1.77%    ,
    Danaher Corp.
    DHR,
    +2.64%
    and Linde PLC
    LIN,
    +2.25%
    recently and had taken advantage of the decline in Adobe Inc.’s
    ADBE,
    +2.32%
    price following the announcement of its $20 billion acquisition of Figma, by scooping up more shares.

    Summarizing the declines

    To illustrate what a brutal year it has been for semiconductor stocks, the iShares Semiconductor ETF
    SOXX,
    +2.12%    ,
    which tracks the PHLX Semiconductor Index
    SOX,
    +2.29%
    of 30 U.S.-listed chip makers and related equipment manufacturers, has dropped 44% this year. Then again, SOXX had risen 38% over the past three years and 81% for five years, underlining the importance of long-term thinking for stock investors, even during this terrible bear market for this particular tech space.

    Here’s a summary of changes in stock prices (again, excluding dividends) and forward price-to-forward-earnings valuations during 2022 through Oct. 14 for every stock mentioned in this article. The stocks are sorted alphabetically:

    Company

    		 Ticker

    		 2022 price change

    		 Forward P/E

    		 Forward P/E as of Dec. 31, 2021
    Apple Inc.

    		 AAPL,
    +3.09%         		-22%

    		 22.2

    		 30.2
    Adobe Inc.

    		 ADBE,
    +2.32%         		-49%

    		 19.4

    		 40.5
    Amazon.com Inc.

    		 AMZN,
    +6.63%         		-36%

    		 62.1

    		 64.9
    Advanced Micro Devices Inc.

    		 AMD,
    +3.69%         		-61%

    		 14.7

    		 43.1
    ASML Holding N.V. ADR

    		 ASML,
    +3.79%         		-52%

    		 22.7

    		 41.2
    Danaher Corp.

    		 DHR,
    +2.64%         		-23%

    		 24.3

    		 32.1
    Alphabet Inc. Class C

    		 GOOG,
    +3.91%         		-33%

    		 17.5

    		 25.3
    Linde PLC

    		 LIN,
    +2.25%         		-21%

    		 22.2

    		 29.6
    Microsoft Corp.

    		 MSFT,
    +3.88%         		-32%

    		 22.5

    		 34.0
    Nvidia Corp.

    		 NVDA,
    +6.14%         		-62%

    		 28.9

    		 58.0
    UnitedHealth Group Inc.

    		 UNH,
    +1.77%         		2%

    		 21.5

    		 23.2
    Source: FactSet

    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.

    The forward P/E ratio for the S&P 500 declined to 16.9 as of the close on Oct. 14 from 24.5 at the end of 2021, while the forward P/E for SOXX declined to 13.2 from 27.1.

    Don’t miss: This is how high interest rates might rise, and what could scare the Federal Reserve into a policy pivot

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  • A Tesla stock plunge could destroy ‘zombie stocks’ such as GameStop and Peloton, warns equity research firm New Constructs

    A Tesla stock plunge could destroy ‘zombie stocks’ such as GameStop and Peloton, warns equity research firm New Constructs

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    Tesla shares could decline dramatically — and that could mean disaster for a number of stocks that have already seen deep share-price cuts, according to equity research firm New Constructs.

    The research firm, which uses machine learning and natural language processing to parse corporate filings and model economic earnings, called the stocks in danger “zombie stocks,” and defined them as companies with poor business models that are burning cash at an alarming rate and are at risk of seeing their stock decline to $0 per share.

    The research firm estimates there could be some 300 zombie companies across the marketplace.

    “The Federal Reserve’s aggressive rate hikes so far in 2022 have ended the era of free money and exposed a worrisome dynamic throughout capital markets: zombie stocks,” wrote New Constructs CEO David Trainer, in a note.

    See Now: Tesla earnings are coming, but do record deliveries mask a demand problem?

    New Constructs does not define Tesla Inc.
    TSLA,
    +7.01%
    as a “zombie stock,” citing CEO Elon Musk’s ability to raise capital, but does see the electric car manufacturer as a bellwether for the sector. “It shares many of the common characteristics of a zombie stock, such as an outrageous valuation and high cash burn,” wrote Trainer. “We believe Tesla’s unrelenting share price rise over the past three years – where investors completely ignored company fundamentals – inspired the birth of many of today’s zombie stocks.” 

    Tesla reports its third-quarter results after the closing bell on Oct. 19.

    The company’s stock was trading around $220 on Monday, an increase of over 1,000% compared to three years ago. But Trainer feels that Tesla is at risk of falling more than 80% to $25 a share.

    Tesla’s Optimus bot: ‘High school science project’ or robotics game changer?

    Tesla’s stock has fallen 37.6% in 2022, outpacing the S&P 500 Index’s
    SPX,
    +2.65%
    decline of 22.7%.

    “Its valuation remains nosebleed high because the cash flow expectations baked into the stock price are unreasonably optimistic,” Trainer wrote. “Our message to investors is to take profits in Tesla and avoid zombie stocks at all costs.”

    New Constructs recently added cloud-based communication company RingCentral Inc.
    RNG,
    +6.49%
    to its list of “zombie” stocks. Other companies on the list are Freshpet Inc.
    FRPT,
    -2.03%    ,
     Peloton Interactive Inc.
    PTON,
    +7.04%    ,
     Carvana Co.
    CVNA,
    +6.30%    ,
     Snap Inc.
    SNAP,
    +6.01%    ,
     Beyond Meat Inc.
    BYND,
    +0.64%    ,
     Rivian Automotive Inc.
    RIVN,
    +6.93%    ,
     DoorDash Inc.
    DASH,
    +6.15%    ,
     Shake Shack Inc.
    SHAK,
    +4.01%    ,
     Chewy Inc.
    CHWY,
    +10.76%    ,
     Uber Technologies Inc.
    UBER,
    +4.98%    ,
     Robinhood Markets Inc.
    HOOD,
    +3.24%    ,
     Tilray Brands Inc.
    TLRY,
    +7.32%    ,
     Affirm Holdings Inc.
    AFRM,
    +6.72%    ,
     SunRun Inc.
    RUN,
    +1.70%    ,
     Blue Apron Holdings Inc.
    APRN,
    +3.26%    ,
     and meme stocks AMC Entertainment Holdings Inc. 
    AMC,
    +6.00%
    and GameStop Corp.
    GME,
    +5.40%    .

    See Now: RingCentral added to ‘zombie’ stocks list by equity research firm New Constructs

    “Investors are now fed up with these kinds of companies, especially amid this year’s stock market volatility,” wrote New Constructs’ Trainer. “If investors start to give up on Tesla and take profits on the stock, which is up over 1,000% over the past three years, that spells terrible news for all of the other zombie stocks that don’t have the cash-raising luxury that Tesla has.”  

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  • Halloween spending expected to increase by $500 million — as candy prices soar at the highest rate on record

    Halloween spending expected to increase by $500 million — as candy prices soar at the highest rate on record

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    It’s going to be a big year for Halloween, despite millions of Americans feeling under financial pressure due to inflation.

    Total spending is expected to hit $10.6 billion, an increase of 5% or $500 million on last year, the National Retail Federation estimates. That’s up $2 billion or 20% on the $8.8 billion Halloween expenditure in 2019 before the COVID-19 pandemic. 

    Spending on costumes expect to reach $3.6 billion this year, the NRF survey finds, the highest since 2017. Adult costume spending could reach $1.7 billion this year, $200 million more than last year.

    More than half (57%) of Americans said that inflation did impact their Halloween spending, according to a separate LendingTree Halloween spending survey. In fact, nearly a quarter of this group said they were buying less candy.

    Inflation was 8.2% in September compared to last year, according to Bureau of Labor Statistics data. It was among the highest level in the past four decades.

    Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record, the BLS said. To put that in context: Candy and chewing gum increased 13% from December 1997 to December 2006.

    “Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record.”

    For those who haven’t started, the competition was already on. In July, Home Depot
    HD,
    +2.13%
    announced that its popular 12-foot skeleton was sold out, three months before the celebration. 

    A Home Depot spokesperson confirmed the initial sellout of the skeleton in summer, and said the company has been releasing more of these items periodically since then.

    Supply-chain disruptions could also complicate the competition. During Hershey’s
    HSY,
    +0.57%
    second-quarter earnings call in July, Chief Executive Officer Michele Buck said the candy manufacturer had to prioritize the everyday candy packaging over the Halloween ones. She said that decision was “critical to enable us to increase advertising and merchandising levels.”

    In an email to MarketWatch, however, a Hershey’s spokesperson said this decision was not a sign of shortage, adding that the brand had produced more candies for the season than they had in previous years, as Halloween demand remains high. 

    “Like every season over the past few years, sell-through at retail remains high with people purchasing candy, décor and other seasonal items earlier and more often. As a result, seasonally packaged candy may be more limited on the shelf as we get to the final week of the season. Fortunately, the same great brands in snack sizes are available to help fill trick-or-treat bags and buckets,” she said.  

    “On average, Americans plan to spend between $100 and $169 on Halloween candy, décor, cards and costumes.”

    On average, Americans plan to spend $100 on average for Halloween candy, décor, cards and costumes, the National Retail Federation said. LendingTree estimates that households will spend $169 this year, with six-figure salary earners and parents with young children planning to spend the most — $340 and $309 respectively.

    More than a third of the consumers surveyed admit they plan to spend more than they can afford this year. Generation Z — those aged 18 to 24 — and parents with younger children are the most likely to admit to overspending.

    “With the worst of the pandemic further in the rearview mirror, people are excited to get back to spending on the things they love most —, particularly the things they maybe couldn’t fully enjoy over the last few years,” LendingTree chief credit analyst Matt Schulz said.

    The most common reason for overspending: 44% of respondents said they spent more than they had expected, while 34% said they were making their children happy.

    The NRF concluded that 40% of people are shopping at discount stores this Halloween, 36% at specialty Halloween costume stores, and 31% online. Another 11% said they will shop at thrift stores and resale shops.

    “Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” Phil Rist, executive vice-president of strategy at Prosper Insights & Analytics, said. “Younger consumers, particularly those under the age of 25, will look to platforms like Instagram and TikTok for costume inspiration this year.”

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  • 8 Mining Stocks: Why Their Long-Term Outlook Is Bright

    8 Mining Stocks: Why Their Long-Term Outlook Is Bright

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    The world needs metals like copper, iron, and cobalt, but investors don’t seem to need mining stocks. They should reconsider.

    Investor reluctance is understandable. Why get exposure to an industry whose profits hinge on the health of industrial activity when the global economy seems headed for a downturn that would probably send metal prices lower?

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  • Infowars host Alex Jones ordered by Connecticut jury to pay $965 million over Sandy Hook ‘hoax’ claims

    Infowars host Alex Jones ordered by Connecticut jury to pay $965 million over Sandy Hook ‘hoax’ claims

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    WATERBURY, Conn. (AP) — The conspiracy theorist Alex Jones should pay $965 million to people who suffered from his false claim that the Sandy Hook Elementary School shooting was a hoax, a jury in Connecticut decided Wednesday.

    The verdict is the second big judgment against the Infowars host over his relentless promotion of the lie that the 2012 massacre never happened, and that the grieving families seen in news coverage were actors hired as part of a plot to take away people’s guns.

    It came in a lawsuit filed by the relatives of five children and three educators killed in the mass shooting, plus an FBI agent who was among the first responders to the scene. A Texas jury in August awarded nearly $50 million to the parents of another slain child.

    “ Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales. ”

    The Connecticut trial featured tearful testimony from parents and siblings of the victims, who told about how they were threatened and harassed for years by people who believed the lies told on Jones’s show.

    Strangers showed up at their homes to record them. People hurled abusive comments on social media. Erica Lafferty, the daughter of slain Sandy Hook principal Dawn Hochsprung, testified that people mailed rape threats to her house.

    Mark Barden told of how conspiracy theorists had urinated on the grave of his 7-year-old son, Daniel, and threatened to dig up the coffin.

    Superior Court Judge Barbara Bellis discusses a question from the jury with attorneys on Tuesday.


    H. John Voorhees III/Hearst Connecticut Media/AP

    Testifying during the trial, Jones acknowledged he had been wrong about Sandy Hook. The shooting was real, he said. But both in the courtroom and on his show, he was defiant.

    He called the proceedings a “kangaroo court,” mocked the judge, called the plaintiffs’ lawyer an ambulance chaser and labeled the case an affront to free speech rights. He claimed it was a conspiracy by Democrats and the media to silence him and put him out of business. “I’ve already said ‘I’m sorry’ hundreds of times, and I’m done saying I’m sorry,” he said during his testimony.

    Twenty children and six adults died in the shooting on Dec. 14, 2012. The defamation trial was held at a courthouse in Waterbury, about 20 miles from Newtown, where the attack took place.

    The lawsuit accused Jones and Infowars’ private parent company, Free Speech Systems, of using the mass killing to build his audience and make millions of dollars.

    Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales.

    Don’t miss: Alex Jones’s audience and Infowars’ revenue grew as Jones alleged Sandy Hook school massacre was a hoax

    Also: Alex Jones has created a ‘living hell’ of harassment and death threats, testify Sandy Hook school parents

    In both the Texas lawsuit and the one in Connecticut, judges found the company liable for damages by default after Jones failed to cooperate with court rules on sharing evidence, including failing to turn over records that might have showed whether Infowars had profited from knowingly spreading misinformation about mass killings.

    See: Texas jury orders Alex Jones to pay more than $49 million in damages in Sandy Hook case

    Because he was already found liable, Jones was barred from mentioning free-speech rights and other topics during his testimony.

    Jones now faces a third trial, in Texas around the end of the year, in a lawsuit filed by the parents of another child killed in the shooting.

    It is unclear how much of the verdicts Jones can afford to pay.

    During the trial in Texas, he testified he couldn’t afford any judgment over $2 million. Free Speech Systems has filed for bankruptcy protection. But an economist testified in the Texas proceeding that Jones and his company were worth as much as $270 million.

    Read on: Alex Jones’s Infowars picks new CRO for bankruptcy

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  • Asian stocks moving lower in wake of latest volatile session on Wall Street

    Asian stocks moving lower in wake of latest volatile session on Wall Street

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    TOKYO (AP) — Asian shares were mostly lower on Wednesday following another volatile day on Wall Street, as traders braced for updates on inflation and corporate earnings.

    Benchmarks fell in Tokyo
    NIY00,
    +0.09%    ,
    Shanghai
    SHCOMP,
    -1.12%
    and Hong Kong
    HSI00,
    -2.90%
    but rose in Sydney.

    South Korea’s Kospi
    180721,
    +0.34%
    lost 0.1% to 2,189.86 after the Bank of Korea raised its key rate by 0.5 percentage point, amid the backdrop of Fed rate hikes in the U.S. and growing inflation risks from the weak won and rebounding global oil prices.

    In currency trading the Japanese yen declined to a 24-year low against the U.S. dollar
    JPYUSD,
    -0.24
    at 146 yen-levels, raising expectations of another intervention by Tokyo to prop up the yen. By midday the dollar
    USDJPY,
    +0.24%
    was at 146.17 yen, up from 145.80 late Tuesday. The euro
    EURUSD,
    +0.12%
    cost 96.96 cents, inching down from 97.07 yen.

    The weaker yen raises costs for both consumers and businesses who rely on imports of food, fuel and other needs, but the bigger purchasing power for foreign currencies is expected to boost tourism. Japan reopened fully to individual tourist travel this week after being closed for more than two years because of the pandemic.

    Japan’s benchmark Nikkei 225 lost 0.2% to 26,348.73 in morning trading. Australia’s S&P/ASX 200
    ASX10000,
    -1.54%
    gained nearly 0.2% to 6,656.00. Hong Kong’s Hang Seng slipped 2% to 16,491.39, while the Shanghai Composite shed 1.2% to 2,943.24.

    On Tuesday, the S&P 500
    SPX,
    -0.65%
    fell 0.7%, marking its fifth straight loss, closing at 3,588.84. The Nasdaq
    COMP,
    -1.10%
    dropped 1.1% to 10,426.19. The Dow Jones Industrial Average
    DJIA,
    +0.12%
    added 0.1% to 29,239.19, while the Russell 2000 index
    RUT,
    +0.06%
    rose 1 point, or about 0.1%, to 1,692.92.

    Recession fears have been weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. Economic growth has been slowing as consumers temper spending and the Federal Reserve and other central banks raise interest rates.

    The International Monetary Fund on Tuesday cut its forecast for global economic growth in 2023 to 2.7%, down from the 2.9% it had estimated in July. The cut comes as Europe faces a particularly high risk of a recession with energy costs soaring amid Russia’s invasion of Ukraine.

    See: Global economy most vulnerable since COVID crisis, with housing market at potential ‘tipping point,’ IMF warns

    Wall Street is closely watching the Federal Reserve as it continues to aggressively raise its benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into a recession.

    “The market desperately wants a reason for the Fed to be able to stop tightening and the data recently hasn’t given them that opening with respect to inflation,” said Willie Delwiche, investment strategist at All Star Charts.

    Computer-chip manufacturers continued slipping in the wake of the U.S. government’s decision to tighten export controls on semiconductors and chip manufacturing equipment to China. Qualcomm
    QCOM,
    -3.99%
    fell 4%.

    See: Intel reportedly plans to lay off thousands of workers, with details potentially emerging alongside quarterly earnings

    Uber
    UBER,
    -10.42%
    fell 10.4% and Lyft
    LYFT,
    -12.02%
    slumped 12% following a proposal by the U.S. government that could give contract workers at ride-hailing and other gig economy companies full status as employees.

    The Fed will release minutes from its last meeting on Wednesday, possibly giving Wall Street more insight into its views on inflation and next steps.

    Investors still expect the Fed to raise its overnight rate by three-quarters of a percentage point next month, the fourth such increase. That’s triple the usual amount, and would bring the rate up to a range of 3.75% to 4%. It started the year at virtually zero.

    Rex Nutting: Leading indicators show inflation is slowing, but Fed policy makers are too busy looking in rearview mirror to notice

    The government will also release its report on wholesale prices Wednesday, providing an update on how inflation is hitting businesses. The closely watched report on consumer prices will be released on Thursday, and a report on retail sales is due Friday.

    “Everyone is still hoping that every inflation report will be the one that shows that pressure is alleviating,” Delwiche said.

    Wall Street is also gearing up for the start of the latest corporate earnings reporting season, which could provide a clearer picture of inflation’s impact.

    Among the companies reporting quarterly results this week: PepsiCo
    PEP,
    +0.48%    ,
    Delta Air Lines
    DAL,
    -1.97%
    and Domino’s Pizza
    DPZ,
    -1.99%    .
    Banks including Citigroup
    C,
    -2.76%
    and JPMorgan Chase
    JPM,
    -2.89%
    will also report results.

    In energy trading, benchmark U.S. crude
    CL00,
    -0.75%
    lost 82 cents to $88.53 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude-oil prices fell 2% Tuesday. Brent crude
    BRN00,
    -0.56%    ,
    the international pricing standard, fell 62 cents to $93.67 a barrel.

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  • Meet the 10 biggest megadonors for the 2022 midterm elections

    Meet the 10 biggest megadonors for the 2022 midterm elections

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    With four weeks until Election Day, congressional candidates are on track to break midterm fundraising records, having raised nearly $2.5 billion so far this cycle. That’s already 70% more than what was raised during the 2014 cycle and just $200 million shy of the total raised during the full 2018 cycle.

    This cycle has also seen record-shattering outside spending, topping $1 billion through the beginning of October, according to an OpenSecrets estimate.

    The increase in spending and fundraising is due in large part to the involvement of millionaire and billionaire megadonors who have sought to influence the outcome of an election in which both chambers of Congress are in play.

    “When megadonors pump millions of dollars into super PACs, they get to help call the shots,” said Michael Beckel, research director at Issue One, a nonpartisan political reform organization. “Massive spending from a megadonor can influence what issues are talked about on the campaign trail and in Congress.”

    Super PACs are independent political action committees that can raise unlimited sums of money but are not allowed to coordinate with a candidate or campaign. Due to contribution limits, such as those restricting individuals’ candidate contributions to $2,900 per election per candidate, most megadonor spending goes to super PACs.

    More context: These are the basics of campaign finance in 2020 — in two handy charts

    A MarketWatch analysis of Federal Election Commission data through the end of September shows that these 10 business moguls and philanthropists are the biggest federal-level donors this cycle.

    Read: These 3 races could determine whether Democrats or Republicans control the Senate in 2023

    And see: If this seat flips red, Republicans will have ‘probably won a relatively comfortable House majority’

    Top federal-level megadonors this cycle
    Rank

    		 Contributor

    		 Total Contributions

    		 For Republicans

    		 For Democrats

    		 Nonpartisan/Bipartisan
    1

    		 George Soros

    		 $128,782,000

    		 $0

    		 $128,782,000

    		 $0
    2

    		 Ken Griffin

    		 $50,955,800

    		 $50,955,800

    		 $0

    		 $0
    3

    		 Richard Uihlein

    		 $49,117,000

    		 $49,117,000

    		 $0

    		 $0
    4

    		 Sam Bankman-Fried

    		 $39,931,000

    		 $201,000

    		 $37,725,000

    		 $2,005,000
    5

    		 Jeff Yass

    		 $32,754,000

    		 $32,754,000

    		 $0

    		 $0
    6

    		 Peter Thiel

    		 $30,189,000

    		 $30,189,000

    		 $0

    		 $0
    7

    		 Fred Eychaner

    		 $22,343,000

    		 $0

    		 $22,343,000

    		 $0
    8

    		 Stephen Schwarzman

    		 $21,870,000

    		 $21,865,000

    		 $0

    		 $5,000
    9

    		 Larry Ellison

    		 $21,003,000

    		 $21,003,000

    		 $0

    		 $0
    10

    		 Ryan Salame

    		 $18,932,000

    		 $17,432,000

    		 $0

    		 $1,500,000
    Totals:

    		 $415,877,000

    		 $223,517,000

    		 $188,850,000

    		 $3,510,000

    Source: MarketWatch analysis of FEC data as of Sept. 30, 2022
    Note: Partisan breakdown includes non-party affiliated PACs with over 95% of their spending benefitting one party, data has been rounded to the nearest thousand

    Big spending by itself doesn’t automatically mean winning. There have been notable instances of the financially strongest candidates losing (such as crypto-backed House candidate Carrick Flynn earlier this year and billionaire Michael Bloomberg’s self-financed presidential bid) — but money can certainly help put a candidate on the right track.

    “Money alone doesn’t guarantee electoral success, but every candidate prefers to be the one with more money to spend,” Beckel said. He added: “Outside spending on behalf of a candidate isn’t a silver bullet that’s going to guarantee electoral success. But it goes a long way to boosting somebody’s name recognition, and to presenting them as a viable candidate — somebody who has the resources to run a competitive campaign.”

    Information about the spending by the top 10 donors this cycle has been compiled from MarketWatch’s analysis of FEC data and filings, super PAC websites and previously reported comments. Read on to find out who are the top 10 biggest donors this cycle.

    10. Ryan Salame — $19 million

    Ryan Salame, the co-CEO of FTX Digital Markets, a subsidiary of cryptocurrency exchange FTX, founded a hybrid PAC earlier this year called American Dream Federal Action. The vast majority ($15 million) of the $19 million Salame has spent this cycle has gone into bankrolling the PAC, which has spent $2.4 million in independent expenditures supporting Illinois Republican Rep. Rodney Davis, $2 million supporting Republican Senate candidate Katie Britt from Alabama, and $1.2 million each supporting Arkansas GOP Sen. John Boozman and Brad Finstad, a GOP congressional candidate in Minnesota.

    On its website, the PAC describes itself as “organization dedicated to electing forward-looking candidates — those who want to protect America’s long term economic and national security by advancing smart policy decisions now.” A representative for Salame didn’t respond to a request for comment.

    9. Lawrence Ellison — $21 million

    The co-founder of Oracle
    ORCL,
    +0.26%
    has similarly bankrolled a PAC this election cycle — giving a total $20 million to Opportunity Matters Fund Inc. The super PAC has largely held onto its funds so far, recent FEC records show, having $17 million cash on hand as of the end of August. Of the independent expenditures it has made this cycle, it spent the most on Georgia Republican Senate candidate Herschel Walker ($1.3 million), Wisconsin Republican Sen. Ron Johnson ($1.3 million) and North Carolina Senate candidate and current Republican Rep. Ted Budd ($1.1 million). A representative for Ellison didn’t respond to a request for comment.

    8. Stephen Schwarzman — $22 million

    Billionaire Stephen Schwarzman, the CEO of private-equity giant Blackstone
    BX,
    -2.41%    ,
    is the eighth biggest donor at the federal level this cycle. In March, Schwarzman gave $10 million to both the Senate Leadership Fund and Congressional Leadership Fund, super PACs aimed at obtaining a Republican majority in the Senate and House, respectively. A representative for Schwarzman didn’t respond to a request for comment.

    7. Fred Eychaner — $22 million

    Fred Eychaner has also contributed $22 million so far this cycle, but unlike most of the spending on this list, his has been directed toward Democratic causes. The chairman of Chicago-based Newsweb Corporation has given $9 million to the House Majority PAC and $8 million to the Senate Majority PAC, as well as just under $1.5 million to the Democratic National Committee and several hundred thousands to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee. A representative for Eychaner didn’t respond to a request for comment.

    6. Peter Thiel — $30 million

    Venture capitalist Peter Thiel was heavily involved in backing Ohio Republican J.D. Vance’s primary bid, giving $15 million in the spring to the Vance-aligned Protect Ohio Values PAC.

    The massive primary investment was “historic” and record-setting, according to Beckel, who added that Thiel’s involvement in the Ohio Senate primary could mark “a new chapter of how mega donors are choosing to play in politics.”

    “I think it’s become clear for a lot of megadonors that there are high stakes to a lot of primaries, and by spending in the primary, where there is typically lower turnout than in say, a statewide general election, they can get a lot of bang for their buck by investing in a primary election,” Beckel added.

    Thiel has indicated that he doesn’t intend to put any more money toward Vance’s bid as he reportedly believes the Ohio candidate is on track to win, and instead will focus his funding on Arizona Republican Blake Masters’ bid to oust Democratic Sen. Mark Kelly in the final weeks leading up to the midterm election.

    Thiel, known for his roles in PayPal
    PYPL,
    -1.69%    ,
    Palantir
    PLTR,
    -0.25%
    and Facebook
    META,
    -3.92%    ,
    has also given a total $15 million to the Masters-aligned PAC, Saving Arizona, with his most recent contribution in July. Both Vance and Masters are venture capitalists, but Masters has worked with Thiel. He served as chief operating officer of Thiel Capital and president of the Thiel Foundation, and he co-authored a book on startups with Thiel in 2014. A representative for Thiel didn’t respond to a request for comment.

    5. Jeff Yass — $33 million

    Options trader Jeff Yass, who founded trading firm Susquehanna International Group, has contributed about $33 million on a federal level this cycle. Yass has given $15 million to the School Freedom Fund, or the equivalent of 97% of the PAC’s total fundraising. The group focuses on the issue of school choice, and its website states that some bureaucrats “hindered the development and education of our youth through school closures, mask mandates, critical race theory, and more.”

    Aside from the School Freedom Fund, Yass’ other biggest contributions are to the conservative Club for Action ($6.5 million), Kentucky Freedom ($5 million), Protect Freedom ($2 million) and Crypto Freedom ($1.9 million). A representative for Yass didn’t respond to a request for comment.

    4. Sam Bankman-Fried — $40 million

    Sam Bankman-Fried, the founder and CEO of FTX, is the main funder behind Protect Our Future PAC, giving it $27 million of the $28 million it raised this cycle. 

    The organization says on its website that it focuses on promoting Democratic candidates championing pandemic preparedness and prevention “so this is the last time in our lifetime, and our children’s lifetimes, that we will face the devastation that has gripped communities across the U.S. since 2020.”

    The group spent more than $10 million supporting Democrat Carrick Flynn’s House bid in Oregon. Flynn lost his primary in May by 18 points despite his massive outside spending advantage. In addition to Flynn, the group has made over $1 million in independent expenditures each supporting Democratic congressional candidates Lucy McBath, a current representative from Georgia; Jasmine Crockett of Texas, Adam Hollier of Michigan, Valerie Foushee of North Carolina and Shontel Brown, a current representative from Ohio.

    Most of the other $10 million Bankman-Fried spent this cycle has gone to the House Majority PAC ($6 million) and the crypto PAC GMI ($2 million).

    While the vast majority of his spending has supported Democratic candidates and causes, Bankman-Fried does not classify himself as an exclusively Democratic donor — for instance he gave $105,000 to the Alabama Conservatives Fund in June and $45,000 to the NRCC in July. 

    He told Politico in August that he is “legitimately worried about doing things that will make people view me as partisan when it’s not how I feel … because I think it both misses what I’m trying to do and makes it harder for me to act constructively.” A representative for the FTX boss didn’t respond to a request for comment.

    3. Richard Uihlein — $49 million

    Richard Uihlein is the founder of the shipping and business supply company Uline, and is a longtime conservative donor. This cycle has seen nearly $50 million in political spending by him, with just over half of it going to Club for Growth Action. Uihlein has also given about $14 million to Restoration PAC, an organization that says it is “dedicated to strengthening the foundations that made America the greatest nation in the world: God, family, education, and community.”

    Uihlein’s next largest contributions are to the conservative Team PAC ($2.5 million) and the Arkansas Patriots Fund ($2.2 million), which earlier this year made ad buys favoring Republican Sen. John Boozman’s primary opponent. A representative for Uihlein didn’t respond to a request for comment.

    2. Ken Griffin — $51 million

    With $51 million in federal-level political spending, Ken Griffin, CEO of hedge fund Citadel, is the second most prolific donor this cycle.

    The biggest beneficiaries are the Republican-aligned Congressional Leadership Fund with $18.5 million in contributions, the Senate Leadership Fund with $10 million and Honor Pennsylvania, a super PAC that backed Republican Dave McCormick’s Senate bid. McCormick lost in the primary to Mehmet Oz by less than a thousand votes. 

    While Griffin spent about $64 million during the last cycle, his $51 million figure this year marks by far the most he has spent during a midterm cycle. During the 2018 cycle, his contributions totaled less than $8 million.

    A spokesperson for Griffin told MarketWatch that Griffin “supports leaders who are committed to protecting the American Dream and pursuing policies that will create a better future for the United States.”

    “The right policies will focus on creating rewarding jobs, prioritizing public safety, and investing in a strong national defense,” his spokesperson said. “Preserving the American Dream will require that every child is well educated, can access great healthcare, and has the opportunity to succeed.”

    1. George Soros — $129 million

    Not one donor comes close to matching the sum that billionaire philanthropist George Soros has contributed this cycle: $129 million. However, much of that money hasn’t actually been put to work this cycle.

    The majority of those on this list have focused their funding on Republican causes, but Soros’ money has gone to Democratic groups — specifically Democracy PAC II, whose $125 million in contributions comprises 99% of its fundraising. The super PAC spent more than $80 million on Democratic groups and candidates during the 2020 election.

    A representative for Soros pointed MarketWatch to a Politico article from January, in which Soros said the $125 million is aimed at supporting pro-democracy “causes and candidates, regardless of political party” who are invested in “strengthening the infrastructure of American democracy: voting rights and civic participation, civil rights and liberties, and the rule of law” and called his contribution a “long-term investment” that will  support political work beyond this year.

    So far this cycle, Democracy PAC has spent very little and holds $113 million in available cash. Contributions the PAC has made this cycle include $5 million to the Senate Majority PAC, $2.5 million to One Georgia and $1 million to both Care in Action and House Majority PAC.

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  • Midterm elections: Republicans regain edge over Democrats in generic ballot, scoring biggest advantage in 2 months in key indicator

    Midterm elections: Republicans regain edge over Democrats in generic ballot, scoring biggest advantage in 2 months in key indicator

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    The Republican Party has an edge again in the generic ballot, and that advantage has reached a level last seen in late July, according to a RealClearPolitics average for that closely watched indicator.

    That could be another sign that the GOP may be getting back some momentum as November’s midterm elections approach, after Democratic prospects improved during the summer.

    Republicans are now scoring 46.0% support in the RCP average of generic ballots, a percentage point ahead of Democrats at 45.0%.

    The GOP hit a 1-point edge last Wednesday, then saw a dip, but as of Tuesday was back at that level, as shown in the chart below.

    It’s not a big advantage, but it’s the best showing for Republicans in RCP’s data for generic ballots since July 28, as Democrats had the advantage for much of August and September.

    Related: If this seat flips red, Republicans will have ‘probably won a relatively comfortable House majority’

    Also read: ‘Republican control of the House is not a foregone conclusion,’ says political analyst


    RealClearPolitics

    The generic ballot refers to a poll question that asks voters which party they would support in a congressional election without naming individual candidates. Analysts tend to see it as a useful indicator.

    Other websites focused on political analysis and forecasting, such as FiveThirtyEight, still show Democrats with an edge in their data for generic ballots.

    Election Day for the midterm contests is now five weeks away. Democrats have focused their campaigns on abortion rights after the Supreme Court’s June decision that overturned Roe v. Wade, while Republicans have seized on Americans’ frustration with high inflation.

    The additional chart below is interactive and shows RCP’s data for the generic ballot over a longer time frame.

    Related: Biden to talk up Democrats’ support for abortion rights, with midterm elections now just 5 weeks away

    And see: New poll finds just 30% of Americans approve of how Biden is handling inflation

    Plus: Republicans’ chances for taking control of Senate rebound to 46%, a level last seen about 8 weeks ago

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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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  • Buffett’s Likely Successor Buys $68 Million of Berkshire Stock

    Buffett’s Likely Successor Buys $68 Million of Berkshire Stock

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    Berkshire Hathaway


    Vice Chairman Greg Abel, the likely successor to CEO Warren Buffett, bought about $68 million of the company’s shares last Thursday in what appears to be his first purchases of Berkshire stock since he assumed the position in 2018.

    In several Form 4 filings Monday with the Securities and Exchange Commission, Abel disclosed that he purchased 168 Berkshire Hathaway (ticker: BRK/A, BRK/B) Class A shares through the Gregory Abel Revocable Trust on behalf of his wife, children, and other family members.

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