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has had a big high and a big surprise in the past week—and Wall Street isn’t happy about it.
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Tag: industrial news
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Exxon Mobil’s top shale exec arrested on sexual assault charge in Texas
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David Scott, the head of Exxon Mobil Co.’s shale oil and gas production business, was arrested in Texas and faces a charge of sexual assault.
According to public records from the Montgomery County, Texas, Sheriff’s Office, Scott, 49, was arrested Thursday afternoon on second-degree felony sexual-assault charges. According to the records, he was released on $30,000 bond. Police records show he was arrested at a La Quinta Inn & Suites hotel in Magnolia, Texas, near Exxon’s headquarters in Spring, Texas, just north of Houston.
No further details of the incident were made clear.
According to his LinkedIn profile, Scott is vice president of Exxon’s upstream unconventional unit, and has worked for Exxon for 26 years at the company’s operations in Australia, the U.K., the United Arab Emirates, Malaysia, Angola and the U.S.
In a statement Sunday, Exxon Mobil
XOM,
-1.67%
said it was “aware of the allegations and cannot comment on a personal matter.” However, “we can say that this individual will not continue work responsibilities as the investigation proceeds.”Scott’s arrest comes as Exxon Mobil is reportedly closing in on a roughly $60 billion deal to buy shale driller Pioneer Natural Resources
PXD,
+10.45% ,
as it looks to become the dominant player in the oil-rich Permian Basin in western Texas and New Mexico.Scott oversees Exxon’s operations in the Permian Basin, but it was unclear if or how he might be involved in the Pioneer deal.
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‘Fear trade’: What Israel-Hamas war means for oil prices and financial markets
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Oil traders on Sunday said crude prices were likely to remain supported in the near term, as investors assessed the fallout from the surprise attack by Hamas on Israel and focused on the role played by Iran and the potential impact on that country’s petroleum exports.
The conflict may also hold market-moving consequences for talks aimed at normalizing relations between Saudi Arabia and Israel.
“While in the short term there is no impact directly on supply, it’s obvious how things play out over the next 24 to 48 hours could change that,” Phil Flynn, an analyst at Price Futures Group in Chicago, told MarketWatch.
Brent crude futures
BRN00,
+4.17% ,
the global benchmark, and West Texas Intermediate oil futures
CL00,
+4.35% CL.1,
+4.35%
jumped more than 3% when the market opened Sunday night. U.S. stock-index futures
ES00,
-0.66%
traded lower, while traditional havens, including gold
GC00,
+0.98%
and the U.S. dollar
DXY
rose.Movements in oil prices, meanwhile, will also serve as a gauge for broader market worries around the conflict, analysts said.
See: Israeli stocks slump in first day of trade since Gaza attack
Hamas, the Iran-backed, Palestinian militant group that controls the Gaza Strip, staged a sweeping attack on southern Israel early Saturday. News reports put Israeli deaths at more than 700. The Gaza Health Ministry said 413 people, including 78 children and 41 women, were killed in the territory as Israel retaliated, according to the Associated Press. Injuries in Israel and Gaza were both said to be around 2,000.
Israeli troops on Sunday were engaged in fierce fighting in an effort to retake territory in southern Israel as Hamas launched further barrages of missiles. Israeli citizens and soldiers were captured and are being held hostage in Gaza, according to the Israeli military.
Read: Israel declares war, approves ‘significant’ steps to retaliate after surprise attack by Hamas
The Wall Street Journal reported that Iranian security officials helped Hamas plan the attack. U.S. officials said they haven’t seen evidence of Iran’s involvement, the report said.
“Iran remains a very big wild card and we will be watching how strongly [Israeli] Prime Minister Netanyahu blames Tehran for facilitating these attacks by providing Hamas with weapons and logistical support,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, in a Sunday morning note.
Iranian crude exports have risen in recent years, indicating the Biden administration has adopted a soft approach to sanctions enforcement, Croft said. Some analysts have put Iranian crude production at more than 3 million barrels a day and exports above 2 million barrels a day — the highest levels since the Trump administration pulled the U.S. out of the Iranian nuclear accord in 2018, according to the Wall Street Journal. Sales fell to around 400,000 barrels a day in 2020 as the U.S. reimposed sanctions.
RBC Capital Markets
Hedge-fund manager Pierre Andurand, one of the world’s best energy traders, said in a social-media post that a large price spike for oil isn’t likely in coming days, but emphasized the market focus on Iran.
“Now, over the last six months we have seen a very large increase in Iranian supply due to weak enforcement of sanctions. As Iran is also behind Hamas’ attacks on Israel, there is a good probability that the U.S. administration will start enforcing those sanctions on Iranian oil exports more tightly,” he wrote. “That would further tighten the oil market. Also the probability that this will lead to direct conflict with Iran is not zero.”
Meanwhile, the Wall Street Journal late Friday reported that Saudi Arabia had told the White House it would be willing to boost oil production next year if crude prices remained high, as part of an effort aimed at winning goodwill in Congress for a deal that would see the kingdom recognize Israel and in return get a defense agreement with the U.S.
A Saudi production cut of 1 million barrels a day that was implemented in July and recently extended through the end of the year has been given much of the credit for a rally that took global benchmark Brent crude within a few dollars of the $100-a-barrel threshold before retreating this past week. The U.S. benchmark last week briefly topped $95 a barrel for the first time in 13 months.
In a statement, Saudi Arabia’s foreign ministry called on both sides to halt the escalation and exercise restraint, but also recalled its “repeated warnings of the dangers of the explosion of the situation as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights, and the repetition of systematic provocations against its sanctities.”
With the Israeli government vowing an unprecedented response, “it is hard to envision how Saudi normalization talks can run on a parallel track to a ferocious military counteroffensive,” said RBC’s Croft.
Beyond oil, much will depend on the potential for the conflict to widen.
Stocks have stumbled, retreating from 2023 highs set in late July, as yields on U.S. Treasurys have jumped. The yield on the 30-year Treasury bond
BX:TMUBMUSD30Y
rose 23.2 basis points last week to end Friday at 4.941%, its highest since Sept. 20, 2007. The 10-year Treasury note yield
BX:TMUBMUSD10Y
topped 4.80% on Oct. 3, its highest since Aug. 8, 2007, and ended the week at 4.783%. Yields and debt prices move opposite each other.The U.S. bond market will be closed Monday for the Columbus Day and Indigenous People’s Day holiday, while U.S. stock markets will be open.
The S&P 500 index
SPX
rose 0.5% last week, breaking a streak of four straight weekly declines, while the Dow Jones Industrial Average
DJIA
fell 0.3% and the Nasdaq Composite
COMP
gained 1.6%.“I think there will be a negative reaction. However, I don’t see a meltdown,” Peter Cardillo, chief market economist at Spartan Capital Securities, told MarketWatch.
Traditional haven plays, including gold, the dollar and U.S. Treasurys may see a strong move upward, with price gains for Treasurys pulling yields down.
“Geopolitical crises in the Middle East have usually caused oil prices to rise and stock prices to fall,” said economist Ed Yardeni, president of Yardeni Research Inc., in a note. “More often than not, they’ve also tended to be buying opportunities in the stock market.”
The broader market reaction will depend on whether the crisis turns out to be a short-term flare-up or “something much bigger, like a war between Israel and Iran,” he said. The latter is unlikely, but tensions between the two are likely to escalate.
“The price of oil may be a good way to assess the likelihood of a broader conflict,” he said.
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Bristol Myers Squibb to buy Mirati Therapeutics in deal worth up to $5.8 billion
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Bristol Myers Squibb Co. said Sunday it will buy Mirati Therapeutics Inc. in a deal valued at up to $5.8 billion.
The pharmaceutical giant announced it will pay $58 a share for Mirati, for a total equity value of $4.8 billion. Mirati stockholders will also receive one non-tradeable Contingent Value Right for each share they hold, potentially worth $12 a share in cash, representing an additional $1 billion of possible value.
Mirati shares closed Friday at $60.20, with the company’s market cap at about $4.21 billion.
Mirati develops commercial-stage oncology therapies, and through the deal, Bristol Myers Squibb will add lung-cancer medicine Krazati, among others, to its portfolio.
“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” Giovanni Caforio, Bristol Myers Squibb’s chief executive and chairman, said in a statement. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals.”
The deal is expected to be dilutive to Bristol Myers Squibb’s non-GAAP earnings per share by about 35 cents a share in the first 12 months after the transaction closes. The merger is expected to close by the first half of 2024.
Bristol Myers Squibb, with a market cap of about $118.4 billion, has seen its shares
BMY,
+0.43%
sink 21% year to date. Mirati shares
MRTX,
-3.49%
are up 33% this year. The S&P 500
SPX,
in comparison, has gained about 12% in 2023.[ad_2]
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U.S. stocks staged a surprising rally on Friday. But can the party last?
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U.S. stocks saw a surprising bounce on Friday, culminating in the S&P 500 index’s biggest intraday comeback since the March banking crisis, even though a monthly jobs report for September came in much higher than expected.
So, are investors no longer worried about the Federal Reserve’s inflation fight or higher interest rates wrecking the U.S. economy?
“Stocks initially sold off on the blockbuster jobs report which indicates the Fed may not be done,” said Gina Bolvin, president of Bolvin Wealth Management Group. “However, after digesting the strong labor market is still strong, stocks rallied. And why shouldn’t they? Will good news- finally – be good news?”
Bolvin said part of the rally could be seasonal, with September typically being a rough months for stocks. There also has been increased optimism that the earnings recession for American corporations may be over, she said.
Analysts are predicting corporate earnings growth rates of 5.9% for the fourth quarter for S&P500 companies, according to John Butters, senior earnings analyst at FactSet. Estimates are for the third-quarter of 2023 after the stock index’s fourth straight quarterly earnings decline on a year-over-year basis.
At Friday’s session lows, the S&P 500 index
SPX
was down 0.9%, but it ended up posting a 1.2% advance, its largest intraday comeback since March 24, 2023, according to Dow Jones Market Data. The Dow Jones Industrial Average
DJIA
booked a 0.9% gain and the Nasdaq Composite Index
COMP
rose 1.6% higher.“The movement in stocks today is certainly encouraging given yields are up as well,” said Chris Fasciano, portfolio manager, Commonwealth Financial Network. “But we will need to see follow through next week.”
The yield on 10-year Treasury
BX:TMUBMUSD10Y
note rose for five straight weeks in a row to 4.783% on Friday, while the 30-year yield
BX:TMUBMUSD30Y
rose to 4.941%, according to Dow Jones Market Data.Read: Why 5% bond yields could wreak havoc on the market
While the U.S. stock-market will be open for business on Monday, the bond market will be closed for Columbus Day and Indigenous Peoples Day holiday, giving investors somewhat of a pause before a big week of economic data that could shape the Fed’s next decision on interest rates.
“Ultimately, stocks and bonds will take their cues next week from the economic releases,” Fasciano told MarketWatch.
Key items on the calendar for the week will be September inflation reports, with the producer-price index on Wednesday and the consumer-price index due Thursday. In between, Fed minutes of its policy meeting in September also are due to be released Wednesday.
“That makes next week an important week for the future direction of both the bond and equity markets as the Fed will certainly be focused on those reports prior to their next meeting on Oct. 31-Nov. 1,” Fasciano said.
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Rivian Stock Downgraded. Its Bond Sale Is a Canary in the Coal Mine.
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[ad_2]stock plummeted earlier this week after announcing plans to raise more capital and one analyst understands why. It was one of the reasons he downgraded the stock.
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U.S. stocks stage a surprising rally on Friday. But can the party last?
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U.S. stocks saw a surprising bounce on Friday, culminating in the S&P 500 index’s biggest intraday comeback since the March banking crisis, even though a monthly jobs report for September came in much higher than expected.
So, are investors no longer worried about the Federal Reserve’s inflation fight or higher interest rates wrecking the U.S. economy?
“Stocks initially sold off on the blockbuster jobs report which indicates the Fed may not be done,” said Gina Bolvin, president of Bolvin Wealth Management Group. “However, after digesting the strong labor market is still strong, stocks rallied. And why shouldn’t they? Will good news- finally – be good news?”
Bolvin said part of the rally could be seasonal, with September typically being a rough months for stocks. There also has been increased optimism that the earnings recession for American corporations may be over, she said.
Analysts are predicting corporate earnings growth rates of 5.9% for the fourth quarter for S&P500 companies, according to John Butters, senior earnings analyst at FactSet. Estimates are for the third-quarter of 2023 after the stock index’s fourth straight quarterly earnings decline on a year-over-year basis.
At Friday’s session lows, the S&P 500 index
SPX
was down 0.9%, but it ended up posting a 1.2% advance, its largest intraday comeback since March 24, 2023, according to Dow Jones Market Data. The Dow Jones Industrial Average
DJIA
booked a 0.9% gain and the Nasdaq Composite Index
COMP
rose 1.6% higher.“The movement in stocks today is certainly encouraging given yields are up as well,” said Chris Fasciano, portfolio manager, Commonwealth Financial Network. “But we will need to see follow through next week.”
The yield on 10-year Treasury
BX:TMUBMUSD10Y
note rose for five straight weeks in a row to 4.783% on Friday, while the 30-year yield
BX:TMUBMUSD30Y
rose to 4.941%, according to Dow Jones Market Data.Read: Why 5% bond yields could wreak havoc on the market
While the U.S. stock-market will be open for business on Monday, the bond market will be closed for Columbus Day and Indigenous Peoples Day holiday, giving investors somewhat of a pause before a big week of economic data that could shape the Fed’s next decision on interest rates.
“Ultimately, stocks and bonds will take their cues next week from the economic releases,” Fasciano told MarketWatch.
Key items on the calendar for the week will be September inflation reports, with the producer-price index on Wednesday and the consumer-price index due Thursday. In between, Fed minutes of its policy meeting in September also are due to be released Wednesday.
“That makes next week an important week for the future direction of both the bond and equity markets as the Fed will certainly be focused on those reports prior to their next meeting on Oct. 31-Nov. 1,” Fasciano said.
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Exxon-Pioneer merger: Here’s why FTC’s Khan may shy from a fight with the ‘800 pound gorilla.’
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Exxon Mobil Corp.
XOM,
-1.67%
is reportedly nearing a deal to buy energy-exploration company Pioneer Natural Resources Co.
PXD,
+10.45%
for $60 billion, a combination that could shake up Texas’ storied and oil-rich Permian Basin.It’s also bound to attract attention from the Biden Administration’s antitrust enforcers, including Federal Trade Commission Chair Lina Khan, given the paramount political importance of oil and gasoline prices.
“You can be sure that the FTC will give this acquisition a serious look,” Stephen Calkins, former general counsel at the FTC told MarketWatch, adding that the agency has long paid special attention to the oil and gas industry at the behest of Congress, which has long been sensitive to anything that may increase prices at the pump.
Read more: Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources
The high cost of living after several years of historic inflation is one of President Joe Biden’s most important political vulnerabilities ahead of the 2024 election. A recent poll by Investors Business Daily showed only 24% of voters approve of his economic record.
The president has campaigned on gasoline prices specifically, telling an audience in Maryland last month, “I’m going to get those gas prices down again, I promise you.”
But any decision to challenge a merger must be based on the facts of the market in question and whether it would present a threat to competition that could lead to higher prices for consumers or other adverse effects.
Frederick Lawrence, director and energy analyst at Capital Alpha Partners told MarketWatch that there is much greater competition in the market for oil exploration and production, where Pioneer is a major player, than in other segments of the industry including gasoline stations, pipeline operators or refining.
Independent oil companies produce roughly 85% of natural gas and 65% of oil in the U.S., he said, and that fact will make it difficult for the Exxon acquisition to meaningfully reduce competition in oil exploration.
“People just think about big oil and they forget that there’s a very healthy independent community out there competing,” he said. “That said, this is Exxon Mobil we’re talking about, the 800 pound gorilla of the upstream oil value chain, so it’s important to acknowledge they’ll get more scrutiny.”
See also: Why gasoline prices are set to fall even as oil marches toward $100 a barrel
Investors should be prepared for the deal to take longer to consummate than a similar acquisition in another industry, Lawrence added, pointing to a recent deal between private equity firm Quantum and natural-gas producer EQT that was slowed because of additional information requests from the FTC.
The deal was ultimately consummated in August, nearly a year after it was announced.
Former FTC official Calkins said that investors should also be prepared for the FTC to get creative as it studies the deal, noting that Biden administration antitrust enforcers “have been receptive to unusual theories of competitive harm” and will study the impact of the merger on downstream businesses, like refiners and gasoline retailers.
The agency will also scour the deal for “any part of the business where there’s an anticompetitive story,” Calkins said, noting that large complex mergers often involve the transfer of a more obscure but valuable asset that could illegally boost an acquiring company’s market power.
Meanwhile, the FTC also has to contend with an already heavy workload, with ongoing cases against well-resourced companies like Amazon.com Inc.
AMZN,
+1.59% “The FTC right now is doing a lot of litigating,” Calkins said. “There is a resources question of whether they have the ideal number of staff with the right skill set to add to their already full plate.”
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Treasury yields are climbing: ‘There’s never really been such an attractive opportunity for fixed-income investments’
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While stocks get clobbered by rising bond yields, financial experts say everyday investors can roll with the punches by increasing their exposure to longer-term Treasurys and other fixed income — so long as they understand what they are doing.
Yield — and more of it — has been a great-sounding idea for more people ever since the Federal Reserve started increasing its benchmark interest rate in March 2022.
High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. It’s easy to find these products with rates in the 4% and 5% range.
Treasury bills, which come due within a year, have also been a yield-producing place to put cash. Yields on T-bills
BX:TMUBMUSD06M
of varying length are over 5%, up from roughly 4.5% around the start of the year.“High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. ”
Yet yields have been inducing anxiety lately. For well over a month, the speedy ascent of yields for longer-term Treasury debt and a bond market sell-off have been knocking the stock market for a loop.
Still, some financial experts say there’s nothing wrong with buying longer-term Treasurys for the person who wants to keep putting their cash to work. Of course, they need to understand the risks and rewards for bonds when interest rates rise and fall.
“Moving from cash to fixed income is the right move right now,” said wealth adviser Marisa Bradbury, managing director of the Florida offices for Sigma Investment Counselors. “You can definitely lock in some decent rates we haven’t seen in a long time.”
“Before, fixed income was so much a principal protection piece of the portfolio. Now you can actually earn a decent income on it too,” she said.
“The upside to what’s happened is for savers,” said Matt Sommer, head of specialist consulting group at Janus Henderson Investors. “There’s never really been such an attractive opportunity for fixed income investments as there is now.”
To be sure, there was a time when Treasury yields where far above their current mark. In the early to mid-1980s, the yields on the 10-year Treasury note and 30-year Treasury bond exceeded 10%. Of course, Sommer and other financial planners are focused on the present and the future because that’s what financial planning is all about. Here’s what they are thinking:
The ‘barbell’ approach
When clients building their nest egg want to go all in on T-bills, Sommer is instead advising they use a “barbell” approach that adds a mix of longer-term Treasurys and fixed income too.
“This is exactly the time investors shouldn’t hibernate on the short end of the [yield] curve,” said Richard Steinberg, chief market strategist and a principal at The Colony Group, a wealth advisory firm. He’s also advising clients to extend their duration on their Treasury and fixed income investments.
Yields climbed again Friday morning after the stronger than expected September jobs report. The yield on the two-year Treasury note
BX:TMUBMUSD02Y
rose to almost 5.1%, up from 5.023% Thursday afternoon and up from 4.26% a year ago.The yield on the ten-year Treasury note
BX:TMUBMUSD10Y
climbed to 4.86%, up from 4.715% Thursday afternoon, and up from 3.82% a year ago. The yield on the 30-year bond
BX:TMUBMUSD30Y
reached 5.01%, up from 4.88% on Thursday and up from 3.78% a year ago – heading Friday morning for the highest level since August 2007.Bond yield and price always move in different directions. When interest rates rise, bond prices decrease and bond yields increase. When rates fall, prices increase and yields decrease. That’s where the note of caution comes in.
Brace for losses if the Fed keeps increasing interest rates, said David Sekera, chief U.S. market strategist at Morningstar, the investment research firm.
For now, it may be a good time for bond portfolios to beef up the long side. “Part of what we are seeing in the stock market is a reallocation out of stocks and into fixed income,” he said.
Related: Why rising Treasury yields are upsetting financial markets
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Pepsi Stock Gets Rocked by Weight-Loss Drug Fears. Earnings Could Make Shares a Buy.
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Updated Oct 06, 2023, 2:51 am EDT / Original Oct 06, 2023, 1:15 am EDT
[ad_2]Consumer-staples stocks have gotten hit hard in recent weeks, and hasn’t escaped the carnage. With the steady-Eddie beverage and snack giant set to report earnings on Oct. 10, its stock could be ready to pop.
Continue reading this article with a Barron’s subscription.
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Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources: report
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Exxon Mobil Corp. is close to a deal to buy shale-drilling company Pioneer Natural Resources for about $60 billion, the Wall Street Journal reported late Thursday.
Citing sources familiar with the matter, the Journal said the deal could be finalized in the coming days. The Journal had reported in April that the two companies had held preliminary talks.
The acquisition would be one of the largest in the U.S. this year, and Exxon’s biggest since it bought Mobil in 1999. The Journal noted that Exxon has been flush with cash since posting record profits last year, and is looking to become the dominant player in the oil-rich Permian Basin in western Texas and New Mexico.
Exxon has a market cap of about $446 billion, as of Thursday, while Pioneer is valued at about $50 billion.
Exxon shares
XOM,
-2.25%
have fallen about 1% year to date, while Pioneer
PXD,
-0.17%
stock is down about 6% in 2023, The S&P 500
SPX,
in comparison, is up about 11% year to date.[ad_2]
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GM stock sinks to 3-year low after report that faulty air-bag parts may lead to massive recall
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General Motors Co.’s stock ended at its lowest in three years on Thursday following a news report saying that the carmaker may face a massive recall in connection with defective air-bag inflators.
The Wall Street Journal reported Thursday that at least 20 million GM
GM,
-2.35%
vehicles are built with the potentially dangerous air-bag part, made by auto supplier ARC Automotive of Tennessee.GM stock fell 2.4% to close at $30.31, its lowest since Sept. 30, 2020, when it closed at $29.59. The stock has been down for five straight sessions, and off more than 8% in the period.
The report, citing people familiar with the matter, said that GM would be among the “most exposed” automaker to the recall, which involves 52 million inflators made by ARC.
At least two people have been killed and several others injured after the inflators exploded with too much force during a crash, sending shrapnel flying, the report said.
The National Highway Traffic Safety Administration has not yet released how many vehicles would be in the recall, or the specific models that would be affected, it said.
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Social Security Administration to review overpayments, may claw back payments
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The Social Security Administration said Wednesday it would review its overpayment procedures and policies, and may claw back any overpayments found.
During the 2022 fiscal year, the agency recovered $4.7 billion of overpayments, according to a report by the SSA’s Office of the Inspector General.
While payment accuracy rates are high, overpayments do happen given the number of people the agency serves, the number of changes in their circumstances and the complexity of the programs, the SSA said.
“Despite our high accuracy rates, I am putting together a team to review our overpayment policies and procedures to further improve how we serve our customers,” said Kilolo Kijakazi, acting commissioner of Social Security.
“There is misinformation in the media claiming that the Social Security Administration is attempting to collect $21 billion. This figure was derived from the total amount of overpayments that have occurred over the history of the programs,” the SSA said in a statement.
The announcement comes the week before Social Security’s cost-of-living adjustment, or COLA, is expected to be released.
The 2024 COLA for Social Security is expected to rise about 3.2%, according to estimates from the Senior Citizens League, a pro-senior think tank. That’s compared with an 8.7% increase for 2023, which was the highest COLA in more than 40 years amid high inflation.
Social Security is an important benefit for most Americans. Half of the population age 65 or older live in households that receive at least 50% of their family income from Social Security benefits, according to SSA data, and about 25% of senior households rely on Social Security benefits for at least 90% of their income.
“The government’s got to fix this,” Sen. Sherrod Brown, the Ohio Democrat who chairs a Senate panel that oversees Social Security, recently told KFF Health News on the subject of overpayments. Meanwhile, Rep. Mike Carey of Ohio, the No. 2 Republican on a House panel that oversees Social Security, has called for a congressional hearing to review the problem, according to the KFF Health News report.
Social Security pays $1.4 trillion in benefits to more than 71 million people each year. Only around 0.5% of Social Security payments are overpayments, the SSA said.
“For the Supplemental Security Income (SSI) program, overpayments also represent a small percentage of payments — about 8% — but are higher due to the complexity in administering statutory income and resource limits and asset evaluations,” the agency said in the announcement.
If a person doesn’t agree that they’ve been overpaid, or believes the amount is incorrect, they can appeal. If they believe they shouldn’t have to pay the money back, they can request that the agency waive collection of the overpayment. There’s no time limit for filing a waiver.
The SSA said it is required by law to adjust benefits or recover debts when overpayments occur. The law allows Social Security to waive recovery in some cases.
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Amazon, Microsoft Cloud Services Face UK Competition Probe
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By Michael Susin
The U.K.’s communications regulator has referred the cloud market to the country’s competition watchdog for an investigation, alleging that certain features by market leaders Amazon and Microsoft could limit competition.
The Office of Communications regulator said Thursday that a market study found that high fees for transferring data, committed spend discounts and technical restrictions could make it difficult for customers to switch cloud provider or to use multiple providers.
“Some U.K. businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well. So, we’re referring the market to the [Competition and Markets Authority] for further scrutiny, to make sure business customers continue to benefit from cloud services,” Ofcom’s director responsible for the market study, Fergal Farragher, said.
The regulator said Amazon Web Services (AWS) and Microsoft had a combined market share in the U.K. of 70% to 80% in 2022.
The CMA will now start an independent investigation to decide whether there is an impact on competition.
Neither Amazon nor Microsoft were immediately available for comment.
Write to Michael Susin at michael.susin@wsj.com
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Rivian shares sink after preliminary sales estimates, plan to offer $1.5 billion in convertible notes
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Shares of Rivian Automotive Inc. slid in the extended session Wednesday after the EV maker issued preliminary quarterly sales estimates that were on par with Wall Street’s forecasts and announced plans to offer $1.5 billion worth of convertible notes.
Rivian
RIVN,
+9.22% ,
in a filing, gave a preliminary third-quarter sales estimate of between $1.29 billion and $1.33 billion. Analysts polled by FactSet expected sales of $1.31 billion. The company estimated it had cash, cash equivalents and short-term investments of $9.1 billion as of Sept. 30.Rivian also said it plans to offer, subject to market and other conditions, $1.5 billion worth of “green” convertible senior notes due in 2030. That would be in a private offering to “qualified institutional buyers,” Rivian said.
The plan would give buyers the option to purchase up to an additional $225 million in notes. The notes will be senior, unsecured obligations of Rivian. Noteholders will have the right to convert their notes in certain circumstances and during specified periods, the company said.
Shares fell 8% after hours.
Rivian stock ended the regular trading day up 9.2%, and so far this year has gained around 28%, which compares with an advance of around 10% for the S&P 500 index
SPX,
+0.81% .[ad_2]
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Exxon expects profit bump from oil prices of around $1 billion in third quarter
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Exxon Mobil Corp. said in a filing late Wednesday that its third-quarter profit is likely to get a bump of around $1 billion from rising crude prices.
Exxon
XOM,
-3.74%
estimated between $900 million and $1.3 billion more than second-quarter profit due to crude-price changes, and between $200 million and $400 million in gas-price changes.The energy giant is expecting $600 million to $400 million less as a result of thinner margins for its chemicals, however.
Exxon shares dropped 0.5% in the extended session after ending the regular trading day down 3.7%. The stock late last month ended at a record, according to data going back to November 1972.
Oil futures prices on Wednesday ended at their lowest in about five weeks, but had been inching closer to $100 a barrel recently.
Exxon is slated to report third-quarter earnings in early November, with FactSet consensus calling for adjusted earnings of $2.35 a share on sales of $85.6 billion. That would compare with adjusted EPS of $4.45 on sales of $112 billion in the third quarter of 2022.
So far this year, Exxon shares have gained nearly 2%, compared to an advance of around 10% for the S&P 500 index
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Clorox slashes forecast due to effects of cyberattack; stock falls
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Clorox Co. shares fell in the extended session Wednesday after the company slashed its outlook stemming from the impact of a cybersecurity attack over the summer.
Clorox
CLX,
+1.21%
shares fell about 3% after hours, following a 1.2% gain to close the regular session at $131.83. At Wednesday’s close, Clorox shares were down 6.1% for the year, while the S&P 500 index
SPX
has gained 11.1%.The company forecast a loss of 75 cents to 35 cents a share, or a loss of 40 cents to break-even per share on an adjusted basis, for the quarter ending Sept. 30.
Clorox said sales are expected to decrease by 28% to 23% from the year-ago first quarter of $1.74 billion, or in a range between $1.25 billion and $1.34 billion.
Analysts surveyed by FactSet had forecast first-quarter earnings of $1.29 a share on revenue of $1.77 billion.
In a statement late Wednesday, Clorox said the reduced outlook was “due to the impacts of the recent cybersecurity attack that was disclosed in August, which caused wide-scale disruption of Clorox’s operations, including order-processing delays and significant product outages.”
The company said shipment and consumption trends prior to the cyberattack factored in its prior forecast.
In early August, Clorox forecast sales in 2024 would be flat to 2% higher than 2023’s $7.39 billion, and adjusted earnings between $5.60 and $5.90 for the year, while analysts had expected $5.62 a share on revenue of $7.4 billion at the time.
Analysts currently forecast, on average, adjusted earnings of $5.78 a share on revenue of $7.5 billion.
Based on the company’s current assessment, Clorox said it expects “to experience ongoing, but lessening, operational impacts in the second quarter as it makes progress in returning to normalized operations,” and restocking retailers.
Analysts also forecast second-quarter earnings of $1.18 a share on revenue of $1.77 billion.
Clorox said it was “in the process of assessing the impact of the cybersecurity attack on fiscal-year 2024 and beyond,” and said it would provide an update during its first-quarter earnings call scheduled in November.
Back in mid-September, Clorox said the cyberattack would weigh on its results, and by the end of the month shares were on their longest losing streak since 2009.
Clorox shares have fallen nearly 18% since the company first disclosed the attack in a filing with the Securities and Exchange Commission on Aug. 14.
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Why McDonald’s is bringing back its McRib for the umpteenth time
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Call it the long goodbye, fast food-style.
McDonald’s
MCD,
+0.27%
is planning to bring back its beloved McRib sandwich, just one year after giving the porky treat a “farewell tour.” The menu item is set to return next month, according to the company.“While it won’t be available nationwide, some lucky fans may find their favorite elusive saucy sandwich at their local McDonald’s restaurants this November,” McDonald’s said in a statement to MarketWatch on Wednesday.
Not that the news should come as a complete surprise. McDonald’s has always employed a scarcity tactic in marketing the McRib. That is, the key to the sandwich’s appeal has been that it’s never around for long, leaving fans (including Homer Simpson) to devour it while they can.
As Restaurant Business, a trade publication, observed last year: “If consumers think there is a shortage of a product, or that it won’t be around for long, they will rush out to get it. Think of the Great Toilet Paper Shortage in 2020 and how many people rushed out to get some the moment they thought they might run out.”
The publication quoted McDonald’s CEO Chris Kempczinski about this approach, particularly in relation to the “farewell tour”: “The McRib is the GOAT of sandwiches on our menu. And so like the GOATs Michael Jordan, Tom Brady, and others, you’re never sure if they’re fully retired or not.”
By all accounts, the strategy has worked: A Wall Street Journal story once noted that McDonald’s sold more than 60 million of the sandwiches over a three-year period — in spite of the fact (or maybe because of the fact) it’s available in such limited fashion.
Further proof of the McRib’s success: It has spawned some competition. In 2021, Arby’s released a Country Style Pork Rib sandwich as a limited-time fall offering — and took cheeky aim at McDonald’s in its marketing, referring to the McRib as a “rib-shaped sandwich” (there’s some truth to that — the McRib features a boneless pork patty with no actual ribs).
Naturally, the McRib’s return has sparked plenty of reaction on social media. One commenter on X (formerly Twitter) referred to the fact the sandwich seemingly has nine lives. Another said that McDonald’s retracting of its “farewell tour” announcement has left them having “trust issues.”
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