The heads of prominent U.S. and Indian companies will meet at the White House on Friday with President Joe Biden and Indian Prime Minister Narendra Modi to discuss investment in areas including artificial intelligence.
Those attending include Sam Altman, CEO of OpenAI, as well as Apple AAPL, +0.04%
CEO Tim Cook and Google GOOG, -0.49%
GOOGL, -0.41%
CEO Sundar Pichai. Indian company executives include Mukesh Ambani, chair of Reliance Industries, and Anand Mahindra, chair of Mahindra Group.
“The president and Prime Minister Modi of the Republic of India will meet with senior officials and CEOs of American and Indian companies gathered to discuss innovation, investment, and manufacturing in a variety of technology sectors, including AI, semiconductors, and space,” the White House said.
Friday’s meeting is part of Modi’s high-profile visit to Washington, which included a state dinner at the White House and the announcement of a number of business deals.
My wife and I are both 54 years old and have accumulated a taxable account totaling $2.3 million, and retirement assets totaling $2.2 million. We hope to retire at 55, and we are wondering about the best way to take our distributions. Clearly we will not touch the qualified money until we reach 59½.
I understand the 4% rule, but when it comes to taking the money, is it better to have a set monthly, quarterly, or annual withdrawal, or is it better to take a lump sum? I can see myself going crazy trying to time market tops in order to take distributions. I was planning to take money off the table after the peak in 2021. I purposely held out until 2022 for tax purposes and that backfired.
Is the best course of action to set it and forget on a monthly, quarterly, or annual basis?
You touch on a really common issue retirees have: the distribution phase.
For decades, Americans are told to save, save, save for retirement, but then they get to the point where they need to start using the money…and that can be a complicated process. Retirees need to have an idea of how much to withdraw, what that distribution’s impact will be on the rest of their nest egg, what to expect come tax time and how not to use that money too quickly.
Like so much in personal finance, the answer to your question is highly dependent on individual circumstances. I’ll get to that in a minute.
First, a note about the 4% rule. This rule is meant to be a guideline. For some people, 4% is too much, while for others, it isn’t enough. Experts have argued its applicability, too — Morningstar, for example, said retirees could use a rate of 3.3% and would have a 90% probability of not running out of money in retirement.
Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column
Before you commit to the 4% rule (which, of course, you can always adjust as the years go on), do a few quick calculations on how much you expect to spend in retirement — with a buffer included — and see what the percentage of your total retirement savings actually is. You may be able to retain more in your retirement assets than you expected.
If you’re still not sure on how much to take out, perhaps start a bit more conservatively in an effort to preserve your investments. The less money you take out, the more in your accounts that can continue to grow.
Also, be aware of something called the “sequence of returns” risk, which is when your portfolio value drops too quickly at the beginning of your distribution journey. The result could be less than ideal for your account.
Pay attention to the tax implications of your decision, and consider consulting a qualified financial planner and/or an accountant to help you run the numbers. There are plenty of factors you have not included in your letter, such as if any of that money is in Roth accounts, and even then, a qualified financial planner can get into the granular details to help you make the most of your retirement spending and savings. You might find making Roth conversions to be beneficial as your taxable income drops — it’s also a way to avoid required minimum distributions down the road.
Also, you’re right not to touch your retirement assets until you’re 59 ½ years old (and for readers who are unaware, that’s when most retirement account assets become available without incurring a penalty). There are exceptions, such as the “55 rule,” which is when you are allowed to withdraw from your retirement account after separation from service if you are 55 or older. The account you can withdraw from must be linked to the job from which you’re separating, and there may be other stipulations attached. Check with your employer about what you are and aren’t allowed to do with your retirement plan.
Now, how often to distribute. This will depend on your comfort level, but some advisers suggest pulling six to 12 months’ of monthly expenses in a money-market account and then creating a paycheck effect. “Setting up monthly or biweekly distributions will create the feel of still working and help you stay within your budget,” said Brian Schmehil, a certified financial planner and managing director of wealth management for The Mather Group.
Make sure the accounts you’re drawing from have shorter investment horizons and are in less risky investments, which will help you “continue to spend what you want to spend and accomplish your goals without having to be overly mindful of market volatility,” Schmehil said. This is in line with the bucket approach, which is when your assets are divided into various investment horizons. The least risky is in your shorter-term “bucket,” whereas the investments with the most risk are earmarked for the long term.
Having a monthly distribution schedule might help keep you in check. “I like to use monthly for most people,” said David Haas, a certified financial planner and owner of Cereus Financial Advisors. “It keeps them thinking about a monthly budget if they have a propensity to spend too much.”
Keep in mind how many variables can change over the course of your retirement. For example, if you switch up where your retirement money comes from — your taxable account, your retirement accounts, Social Security, etc. — your tax liabilities could change. Also, inflation might have an impact on your spending, or how quickly you draw down your distribution. Your risk tolerance may also transform, especially as you get older and you see your nest egg dwindle or you face market volatility. The frequency in which you take your money might change too, and if it does, that’s OK.
Readers: Do you have suggestions for this reader? Add them in the comments below.
My wife and I are both 54 years old and have accumulated a taxable account totaling $2.3 million, and retirement assets totaling $2.2 million. We hope to retire at 55, and we are wondering about the best way to take our distributions. Clearly we will not touch the qualified money until we reach 59½.
I understand the 4% rule, but when it comes to taking the money, is it better to have a set monthly, quarterly, or annual withdrawal, or is it better to take a lump sum? I can see myself going crazy trying to time market tops in order to take distributions. I was planning to take money off the table after the peak in 2021. I purposely held out until 2022 for tax purposes and that backfired.
Is the best course of action to set it and forget on a monthly, quarterly, or annual basis?
You touch on a really common issue retirees have: the distribution phase.
For decades, Americans are told to save, save, save for retirement, but then they get to the point where they need to start using the money…and that can be a complicated process. Retirees need to have an idea of how much to withdraw, what that distribution’s impact will be on the rest of their nest egg, what to expect come tax time and how not to use that money too quickly.
Like so much in personal finance, the answer to your question is highly dependent on individual circumstances. I’ll get to that in a minute.
First, a note about the 4% rule. This rule is meant to be a guideline. For some people, 4% is too much, while for others, it isn’t enough. Experts have argued its applicability, too — Morningstar, for example, said retirees could use a rate of 3.3% and would have a 90% probability of not running out of money in retirement.
Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column
Before you commit to the 4% rule (which, of course, you can always adjust as the years go on), do a few quick calculations on how much you expect to spend in retirement — with a buffer included — and see what the percentage of your total retirement savings actually is. You may be able to retain more in your retirement assets than you expected.
If you’re still not sure on how much to take out, perhaps start a bit more conservatively in an effort to preserve your investments. The less money you take out, the more in your accounts that can continue to grow.
Also, be aware of something called the “sequence of returns” risk, which is when your portfolio value drops too quickly at the beginning of your distribution journey. The result could be less than ideal for your account.
Pay attention to the tax implications of your decision, and consider consulting a qualified financial planner and/or an accountant to help you run the numbers. There are plenty of factors you have not included in your letter, such as if any of that money is in Roth accounts, and even then, a qualified financial planner can get into the granular details to help you make the most of your retirement spending and savings. You might find making Roth conversions to be beneficial as your taxable income drops — it’s also a way to avoid required minimum distributions down the road.
Also, you’re right not to touch your retirement assets until you’re 59 ½ years old (and for readers who are unaware, that’s when most retirement account assets become available without incurring a penalty). There are exceptions, such as the “55 rule,” which is when you are allowed to withdraw from your retirement account after separation from service if you are 55 or older. The account you can withdraw from must be linked to the job from which you’re separating, and there may be other stipulations attached. Check with your employer about what you are and aren’t allowed to do with your retirement plan.
Now, how often to distribute. This will depend on your comfort level, but some advisers suggest pulling six to 12 months’ of monthly expenses in a money-market account and then creating a paycheck effect. “Setting up monthly or biweekly distributions will create the feel of still working and help you stay within your budget,” said Brian Schmehil, a certified financial planner and managing director of wealth management for The Mather Group.
Make sure the accounts you’re drawing from have shorter investment horizons and are in less risky investments, which will help you “continue to spend what you want to spend and accomplish your goals without having to be overly mindful of market volatility,” Schmehil said. This is in line with the bucket approach, which is when your assets are divided into various investment horizons. The least risky is in your shorter-term “bucket,” whereas the investments with the most risk are earmarked for the long term.
Having a monthly distribution schedule might help keep you in check. “I like to use monthly for most people,” said David Haas, a certified financial planner and owner of Cereus Financial Advisors. “It keeps them thinking about a monthly budget if they have a propensity to spend too much.”
Keep in mind how many variables can change over the course of your retirement. For example, if you switch up where your retirement money comes from — your taxable account, your retirement accounts, Social Security, etc. — your tax liabilities could change. Also, inflation might have an impact on your spending, or how quickly you draw down your distribution. Your risk tolerance may also transform, especially as you get older and you see your nest egg dwindle or you face market volatility. The frequency in which you take your money might change too, and if it does, that’s OK.
Readers: Do you have suggestions for this reader? Add them in the comments below.
All five passengers on the missing submersible that has captured the world’s attention over the past week are believed to “have sadly been lost,” the tour company revealed on Thursday.
OceanGate Expeditions released a statement Thursday afternoon that the Titan submersible’s pilot and the tour company’s chief executive, Stockton Rush, along with passengers including British-Pakistani businessman Shahzada Dawood and his 19-year-old son Suleman, British billionaire businessman Hamish Harding, and Titanic specialist Paul-Henri Nargeolet have been killed.
“We now believe that our CEO Stockton Rush, Shahzada Dawood and his son Suleman Dawood, Hamish Harding, and Paul-Henri Nargeolet, have sadly been lost,” OceanGate said in a statement.
“These men were true explorers who shared a distinct spirit of adventure, and a deep passion for exploring and protecting the world’s oceans. Our hearts are with these five souls and every member of their families during this tragic time. We grieve the loss of life and joy they brought to everyone they knew.”
The company did not release specifics on what led to the “loss of life,” but Rear Adm. John Mauger of the U.S. Coast Guard revealed during a press conference Thursday afternoon that the debris found in the search area of the missing submersible was consistent with “catastrophic loss of the pressure chamber,” presumably killing all five people on board.
“Upon this determination, we immediately notified the families,” said Mauger, who has been leading the search. “On behalf of the United States Coast Guard, I offer my deepest condolences to the families.”
The submersible Titan was launched from a hired Canadian research icebreaker, Polar Prince, on Sunday morning to visit the Titanic wreckage site located in a remote area of the North Atlantic. The diving vessel went missing that same morning and was unable to communicate with the surface roughly an hour and 45 minutes after it began its descent, the Coast Guard said. This has spurred a search-and-rescue operation in the ensuing days that amounted to a race against the clock, as the Titan’s estimated 96-hour oxygen supply was expected to run out early Thursday.
Plenty of questions remain, including how, why and when this implosion may have happened. Mauger said that it’s still “too early to tell,” as this is “an incredibly complex operating environment on the seafloor over two miles beneath the surface.” But a top-secret U.S. Navy listening system may have detected the implosion of the Titan shortly after its disappearance on Sunday, the Wall Street Journal reported.
Signing up for Amazon Prime is as easy as 1-2-3. Canceling it, not so much.
For years, up until this past April, the online retail giant made customers trying to quit its signature service navigate an odyssey through a labyrinthine system called the “Iliad Flow” named after the epically long and complex masterwork by the Greek poet Homer.
According to a civil lawsuit filed Wednesday by the Federal Trade Commission, Amazon customers were required to make their way through a four-page, six-click, 15-option process to stop paying for the service. One wrong click, and they were sent back to the beginning, the lawsuit said.
The FTC noted that Amazon AMZN, +3.69%
maintained the multistep process even though new subscribers in the U.S. to $14.99-a-month or $139-a-year Prime accounts needed only one or two clicks. And even though subscribers could sign up on a multitude of devices, they could only cancel using their desktop computer or mobile phone or by calling customer service.
The FTC suit also accused Amazon of manipulating millions of customers into inadvertently signing up for Prime and then hitting them with automatic renewals without warning.
Amazon has dismissed the charges as misguided, adding that the lawsuit is legally and factually inaccurate. It has vowed to fight the FTC.
The FTC said in court papers that Amazon created the complex “Iliad Flow” exit strategy in 2016 and kept it in place until April of this year, when it caught wind that the agency was preparing to file a lawsuit about the practice.
During that time frame, Amazon quadrupled the number of global Prime subscribers from around 50 million to more than 200 million. The program brings around $25 billion into Amazon’s coffers every year.
The suit described an allegedly maddening process for a customer to actually cancel a subscription.
To start, a subscriber first had to find the “Iliad Flow,” which was not made easy, the FTC suit said. A customer had to select the “accounts and list” dropdown menu, navigate to the third column and then select the eleventh option there: Prime Membership.
That would bring the customer to the Prime Central page. There, one would have to click the “manage membership” button to trigger options that finally included an “end membership” button. But that was only the beginning.
Only after clicking “end membership” would the customer enter the “Iliad Flow” process. From there, a customer would need to navigate three more pages, each with a multitude of options, to finally complete canceling the subscription.
This is one of several web pages a Prime customer would need to navigate in order to cancel the service, the FTC said.
Federal Trade Commission
On the first page, customers were forced to “take a look back at [their] journey with Prime” — a kind of greatest-hits reel of Prime services used over the years. The page was also loaded with marketing material for a multitude of Prime services, with links reading: “Start shopping today’s deals!” and “You can start watching videos by clicking here!” or “Start listening now!”
One wrong click would knock the subscriber out of the “Iliad Flow.”
If the subscriber managed to navigate to the bottom of the page, he or she would finally find a “continue to cancel” button. That would take them to Page 2.
According to the FTC, that page would present the customer with a number of discount options, such as switching from monthly to annual payments, or taking advantage of student discounts or discounts for people on government assistance. The page also included warning icons and links stating: “Items tied to your Prime membership will be affected if you cancel your membership,” and “By canceling, you will no longer be eligible for your unclaimed Prime exclusive offers.”
Clicking on any of those would take the subscriber out of the “Iliad Flow.”
At the bottom of that page was another “continue to cancel” button, which would take the user to Page 3.
If you managed to get to this page, you were only six options away from actually being able to quit Amazon’s Prime service, the FTC suit said.
Federal Trade Commission
On this final page, a customer was presented with five options, only the last of which — “end now” — would actually allow the subscription to be canceled. The other options included pausing the subscription or canceling its auto-renewal function. Pressing any of the four other choices would bring the user out of the “Iliad Flow.” They would have to start over if they wanted to continue.
Only after successfully navigating this maze of web pages would the customer be allowed to actually cancel the service.
The suit said this process caused cancellations to drop significantly.
The summer haze settling over stocks doesn’t look ready to budge Thursday, with the S&P 500 index SPX, -0.52%
in the throes of its longest losing streak since May.
On the bright side, the index is looking at a 6% gain for the June quarter, whose end is just a few days away.
In other corners of the market, the quarter has been less forgiving. Consumer staples, those things you can’t live without, have lost over 1%, perhaps reflecting the tougher economic times we are living in. Within that sector, though, is beer and one name that has indeed had a quartarius horriblis.
BUD, -0.05%
U.S.-listed shares are down about 15%, as Bud Light sales have tumbled following consumer backlash to a social-media campaign featuring trans activist Dylan Mulvaney in April.
But our call of the day from Deutsche Bank says it’s time to buy this unloved stock, even if those Bud Light sales never recover. A team of analysts led by Mitch Collett have upgraded Anheuser-Busch shares to buy from hold and lifted their price target to €60 euros from €59 euros (they didn’t offer an ADR price target).
Recent underperformance of the stock “implies a permanent reduction in ABI’s U.S. business. Our proprietary survey data suggests these headwinds are likely to fade even if we do not expect the U.S. business ever to fully recover from its current challenges,” said Collett.
The analysts pointed to recent Nielson data that showed ABI’s U.S. business currently down 12%, with Bud Light sales off 24% and the rest of its portfolio down 7%. But an analysis of distribution data shows ABI itself isn’t “losing shelf presence” as sales velocity is the primary driver of the decline, which bodes well if consumer sentiment improves, said Deutsche Bank.
Those declines are about a 12% headwind to ABI’s annual net income, which is in line with European underperformance seen by the stock, added Collett and the team.
Deutsche Bank conducted its own survey that showed 24% of Bud Light consumers are no longer buying that brand, with 18% buying less, but 21% buying more and 37% buying the same amount. Those findings are largely consistent with Nielson;s, said the analysts.
Deutsche Bank’s own survey also showed that 42% of Bud Light drinkers expect to be buying Bud Light again in three to six months, versus 29% who see that as unlikely. And 50% expect that battered beer’s reputation will recover in time, versus 30% who says it won’t. “We believe this bodes well for the brand, recapturing some of its lost share,” said Collett and the team.
Analysts at RBC Capital also recently pushed back on the selloff for the stock, saying the hit to the shares and forecasts for the stock are “excessive,” as they don’t see Bud Light’s troubles hurting AB InBev outside the U.S.. They said AB InBev is a “nerve-racking buying opportunity.”
Ahead of Thursday’s open, U.S.-listed Bud shares were up about 1.3%, tracking gains from its Belgian shares.
TMUBMUSD10Y, 3.743%
on the rise and oil prices CL.1, -1.82%
also weaker. The Norwegian krone USDNOK, -0.80%
is up 1.5% against the dollar after the country’s central bank hiked interest rates 50 basis points. Switzerland also hiked rates, but the Swiss franc is steady USDCHF, +0.12%.
The British pound GBPUSD,
is higher after the Bank of England also hiked interest rates by 50 basis points. The Turkish lira was falling slightly after the central bank, under new management, hiked interest rate to 15% from 8.5%, against forecasts for a hike to 20%.
China markets were closed for a holiday, with losses elsewhere, such as Japan NIK, -0.92%
and Australia XJO, -1.63%.
Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill kicks off at 10 a.m. Eastern. On Wednesday, he said higher interest rates should be expected , but didn’t offer any clues on timing. U.S. weekly jobless benefit claims and current account data are due at 8:30 a.,m. ET, with leading indicators also at 10 a.m., alongside a speech from Cleveland Fed President Loretta Mester. Richmond Fed President Tom Barkin will speak at 4:30 p.m.
The Bank of England will announce an interest-rate decision at 7 a.m. ET and after worse-than-expected inflation data on Wednesday, a 50 basis-point hike hasn’t been ruled out.
Darden Restaurants DRI, +0.36%
will report ahead of the open, with Smith & Wesson SWBI, +0.52%
due after the close.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Stock futures were falling following three straight days of losses for Wall Street. Federal Reserve Chairman Jerome Powell again will be delivering testimony before Congress. His comments on Wednesday that the central bank likely would be raising rates further this year pushed markets lower.
offered positive news on its foundry business Wednesday as it continues to build out new facilities to expand the custom chip-making service. Investors sold the stock anyway.
U.S.-listed shares of Logitech International SA, a Swiss maker of computer peripherals and software, were down about 3.6% Monday, amid reports that one of the company’s gamepads was being used to steer the submersible that went missing while taking five people down to the wreck of the Titanic.
Logitech’s $30 F710 gamepad was the controller of the OceanGate submarine vessel that is the subject of a massive sea-and-air search, according to a segment on the “CBS News Sunday Morning Show” by reporter David Pogue that aired last November.
In the segment, OceanGate Chief Executive Stockton Rush, one of the five people currently onboard the submersible, showed Pogue the game controller that he said “runs the whole thing,” causing the reporter to burst out laughing.
Pogue later describes the “MacGyver jerry-riggedness” of the whole thing, which included off-the-shelf components such as lights from Camper World and construction pipes as ballast. Rush explained that other parts of the vessel were made in cooperation with Boeing, NASA and the University of Washington.
As The Verge pointed out, game controllers are used in other instances to control submarine periscopes, including by the U.S. Navy and Elon Musk’s The Boring Company.
On Monday, Pogue tweeted that during his report which was filmed last summer, the submersible got lost for a period — while he was on the surface.
In that instance, the vessel still had contact with the surface. This time, there are no communications, although a Canadian military surveillance aircraft detected underwater noises early Wednesday, as the Associated Press reported.
A statement from the U.S. Coast Guard did not elaborate on what rescuers believed the noises could be, though it offered a glimmer of hope for those lost aboard the Titan. Estimates suggested as little as a day’s worth of oxygen could be left if the vessel is still functioning.
The submersible had a four-day oxygen supply when it was put to sea around 6 a.m. Sunday, according to David Concannon, an adviser to OceanGate Expeditions, which oversaw the mission.
Questions remain about how teams could reach the lost submersible, which could be as deep as about 12,500 feet (3,800 meters) below the surface near the watery tomb of the historic ocean liner. Newly uncovered allegations also suggested there had been significant warnings made about the vessel’s safety prior to its disappearance.
Shares of Tesla Inc. ended more than 5% lower Wednesday in the wake of a downgrade by Barclays.
The electric-vehicle maker’s TSLA, -5.46%
stock notched its worst one-day percentage drop since April 20, when it fell 9.75%.
Earlier Wednesday, analyst Dan Levy at Barclays said that for all that Tesla has been a momentum stock often “driven by more than fundamentals,” the surge that started in April, in which Tesla shares have gained about 70%, is likely “too sharp” against “challenging” near-term trends.
Tesla shares have been on a tear in recent weeks, boosted by news that major U.S. automakers such as Ford Motor Co. F, -1.41%
and General Motors Co. GM, -0.83%
have forged agreements that will allow their EV owners to use Tesla’s fast-charging network, which has stations located alongside major highways.
On Tuesday, EV startup Rivian Automotive Inc. RIVN, -6.88% announced a similar deal. The agreements have made Tesla’s EV fast-charging connector type, which it calls the North American Charging Standard, or NACS, the de facto standard in North America.
Shares of Tesla have more than doubled this year, up 111%, compared with gains of around 14% for the S&P 500 SPX, -0.52%
in the same period. The stock is also in the black for a 12-month span, up 10%, while the S&P 500 has advanced 16%.
A nascent category of mental health treatments is getting a major cash infusion.
Blake Mycoskie, founder of the canvas-footwear phenomenon TOMS Shoes, has committed to giving $100 million to support psychedelic research and access, Mycoskie told MarketWatch in an exclusive interview. The money will help fund academic institutions investigating psychedelics’ potential to treat anxiety, depression, post-traumatic stress disorder and other mental-health issues, as well as nonprofits helping to connect patients in need with psychedelic treatments.
Traditional psychedelics include hallucinogens like LSD and psilocybin, or “magic” mushrooms–recently legalized in Oregon and Colorado. Other drugs that can alter mood and perception–such as ketamine and MDMA, also known as ecstasy–aren’t classical psychedelics but are broadly included in the research and policy discussions generating a surge of interest in this class of treatments. The U.S. Food and Drug Administration, for example, has granted psilocybin and MDMA “breakthrough therapy” status, a designation designed to expedite development and review of drugs for serious conditions, and could approve MDMA for treatment of PTSD as soon as next year.
Given the rapid developments in the field, ”we really need to get this right, and we really need to have these foundations and nonprofits funded properly,” therapists trained, and clinics open and running smoothly, Mycoskie said. “I felt a real sense of urgency,” he said, and asked his wealth manager, “what’s the most that I can give?”
The $100 million answer to that question amounts to about a quarter of Mycoskie’s net worth and marks a major milestone in psychedelics’ delicate image transformation. Shedding some of their dangerous-party-drug reputation, psychedelics are gaining attention from top pharmacologists, the scientific community, biotech companies and investors who see them as a critical part of the solution to America’s mental health crisis.
Cracked open
Mycoskie, 46, said his interest in psychedelics dates back to 2017, when a friend returning from a trip to Central America described his incredible experience with ayahuasca, a plant-based psychedelic brewed into a tea. As an entrepreneur under intense pressure to perform, Mycoskie said, he decided to try it for himself. The experience “cracked me open, and it connected me more to my faith in God, made me feel that we were all connected and everything was fine and perfect,” he said. “I came back just feeling like, wow, that was more powerful than any therapy I’d ever done.” He later tried MDMA-assisted therapy, he said, which also helped him process issues that traditional talk therapy had left unresolved.
Realizing how many people could benefit from similar treatments, Mycoskie started giving money to academic groups and the Multidisciplinary Association for Psychedelic Studies, or MAPS, a nonprofit organization. He also got involved in last year’s Colorado ballot initiative, which legalized psilocybin and several other psychedelic substances, including ibogaine, which has shown potential to treat substance-use disorders. Mycoskie has already given about $10 million to psychedelic research and access, he said, and plans to give about $5 million annually for 18 more years.
Mycoskie was a bit squeamish at first, he acknowledges, about publicly backing research on drugs that are largely illegal. “Am I going to get held up at TSA every time I go through the airport?” he remembers thinking. The U.S. Drug Enforcement Administration categorizes LSD and MDMA alongside heroin as “schedule one” drugs, defined as “drugs with no currently accepted medical use and a high potential for abuse.” But with growing public awareness and acceptance of the drugs’ potential as mental-health treatments, he said, he felt emboldened to make a big public commitment, and “the research has caught up,” he said. “It’s important that people like myself put their name out there and their money out there to show that this really is a path forward,” he said.
Mycoskie’s $100 million commitment “is the biggest that we’ve ever seen in the psychedelics space,” said Joe Green, president of the Psychedelic Science Funders Collaborative, a nonprofit supporting philanthropy in the field, and a MAPS board member. Now that research has made great strides to support use of the medicines as mental-health treatments, that money can help ensure that “these actually come to the world in a safe and beneficial way,” Green said. With certain treatments legalized in Oregon and Colorado, for example, “the system requires licensed guides, facilitators, licensed service centers,” he said. “It’s not like cannabis medical–you won’t be able to take the mushrooms outside the service center.”
Psychedelic therapeutics market could be worth more than $8.3 billion by 2028
Mycoskie plans to publicize his pledge at the Multidisciplinary Association for Psychedelic Studies’ psychedelic science conference–billed as “the largest psychedelic conference in history”–this week in Denver. On the agenda: Sessions ranging from state policy and regulatory considerations to clinical trials of psilocybin- and MDMA-assisted therapy and “sex and psychedelics: weaving altered states for healing and pleasure.”
The news comes as lawmakers on both sides of the aisle are pushing for new funding for research into the use of psychedelics to treat PTSD in military service members as part of the fiscal year 2024 National Defense Authorization Act, which the House Armed Services Committee will consider Wednesday.
Already, public companies like Atai Life Sciences ATAI, -6.91%,
Compass Pathways CMPS, -3.37%
and Cybin CYBN, +6.81%
are developing therapies based on psychedelic substances. The psychedelic therapeutics market could be worth more than $8.3 billion by 2028, according to InsightAce Analytic. Even the federal government is throwing money at this niche, funding efforts to develop psychedelic mental-health treatments without the hallucinogenic side effects.
More than one in five U.S. adults live with a mental illness, according to the National Institute of Mental Health, and less than half of the roughly 58 million adults with any mental illness are receiving treatment. Suicide rates, which have been on a long upward trajectory, declined briefly between 2018 and 2020 before returning to peak levels in 2021, according to the Centers for Disease Control and Prevention. Nine out of 10 U.S. adults believe the country is suffering a mental health crisis, according to a survey last year by CNN and KFF, a health policy nonprofit. And commonly prescribed antidepressants, such as selective serotonin reuptake inhibitors (SSRIs) don’t work well for many patients.
Nushama, a New York City wellness center offering ketamine-based therapy.
Courtesy of Nushama and Costas Picadas
Mental illness “is truly an epidemic, and we are losing the fight,” said Dylan Beynon, CEO and founder of Mindbloom, which offers a telehealth ketamine treatment program. While there are some existing solutions that are helping to bend the curve, he said, more research and educational support for providers and patients is needed, he said.
Indeed, some substantial hurdles still separate psychedelic mental-health treatments from many of the patients they might benefit, including a lack of insurance coverage for the currently legal treatments and debate over how to administer them safely. In the case of ketamine, for example, which is FDA-approved as an anesthetic and used off-label as a mental-health treatment, some providers favor in-person guided sessions while others, like Beynon, advocate for telehealth prescribing–a model that boomed during the pandemic.
Some experts have lately warned that the practice of psychedelic medicine may be getting ahead of the science. Given the growing public and commercial interest, “there is the risk that use of psychedelics for purported clinical goals may outpace evidence-based research and regulatory approval,” the American Psychiatric Association said last year in a position statement on psychedelic and “empathogenic” agents–a category that includes MDMA.
Mycoskie has also made some investments in the psychedelics space, although he said profits aren’t his motivation. He has invested in Mind Medicine Inc. MNMD, -0.50%,
which says it is developing “psychedelic inspired medicines” that aim to treat the underlying causes of distress in the brain. And Mycoskie helped fund a public benefit corporation linked with MAPS, which is taking MDMA through the FDA approval process–an investment that will pay dividends when the treatment is commercialized, he said.
Providers currently offering ketamine treatments say they’re eager to expand into MDMA and other therapies in the category as soon as they’re legal. Mindbloom, for example, currently offers a ketamine treatment program that’s available through telehealth in several dozen states and aims to start offering MDMA-assisted therapy late next year after FDA approval is finalized, Beynon said. Psilocybin-assisted therapy could come a couple of years after that, he said.
Nushama, a New York City psychedelic wellness center that offers ketamine-based therapy, delivered through in-person IV infusions, also hopes to expand into MDMA when it’s approved, said co-founder Jay Godfrey.
Treatment without the trip
Still on the horizon: New treatments that could produce psychedelic medicines’ mental-health benefits without the trip. University of North Carolina School of Medicine pharmacology professor Dr. Bryan Roth is leading an effort to create new medications for depression, anxiety and substance abuse that work similarly to psychedelics but without the hallucinogenic, disorienting side effects. His effort is backed by a $27-million grant from the Defense Advanced Research Projects Agency. Such treatments, Roth said, could help the many patients for whom such psychedelic effects are unappealing or ill-advised–such as military service members. “You would never want to give psilocybin or ketamine to somebody who has a gun,” Roth said.
Having worked with Vietnam veterans suffering from PTSD while training as a psychiatrist earlier in his career, Roth said, he’s keenly aware of the need for safe and effective treatments. “There was nothing we could give them for their symptoms,” he said. “The most we could do was give them medications to stop their ability to have dreams, so they wouldn’t have nightmares. That was basically it.”
“Undoing 52 years of propaganda is a heavy lift,” said Nushama co-founder Jay Godfrey.
Costas Picadas
Roth’s team has already developed compounds that have shown antidepressant effects without psychedelic side effects in mice, he said. The team is now working to find a clinical candidate suitable for testing in humans, he said.
Treatments that can help “break bad emotional or psychological patterns without scary, high-friction psychedelic experiences would be a great thing for patients, providers and the healthcare system,” said Mindbloom’s Beynon.
Much more remains to be done to reduce the stigma associated with psychedelics, experts say. It has been 52 years since President Richard Nixon declared drug abuse “public enemy number one,” and billions of dollars have been spent since then telling people that “these medicines are dangerous, that they’re addictive, and that they’ll fry your brains,” Godfrey said. “Undoing 52 years of propaganda is a heavy lift, but one thing I’m optimistic about is that the outcomes are starting to speak for themselves.”
Shares of FedEx Corp. fell after hours on Tuesday after the package deliverer offered up a full-year profit forecast that fell short of expectations, as Wall Street zeroes in on the company’s efforts to cut billions in costs over its next two fiscal years following a drop-off in consumer demand.
Not long after the company released those results, FedEx also said FDX, -0.78%
that Chief Financial Officer Michael Lenz would retire on July 31. Management said it had begun an external search to fill the position. Lenz, who became CFO in March 2020, will serve as a senior adviser until Dec. 31 to help with the changeover.
The company reported fourth-quarter net income of $1.54 billion, or $6.05 a share, compared with $558 million, or $2.13 a share, in the same quarter last year. Revenue fell to $21.9 billion, compared with $24.4 billion in the prior-year quarter.
Adjusted for goodwill, efforts to slim the business and a legal issue within FedEx’s FDX, -0.78%
ground delivery operations, FedEx earned $4.94 a share, compared with $6.87 a year ago.
Analysts polled by FactSet expected adjusted earnings per share of $4.85, on revenue of $22.55 billion.
“The quarter’s results were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and U.S. domestic package yield improvement,” management said in a statement.
For the fiscal year ahead, which ends next May, FedEx forecast “flat to low-single-digit-percent” growth in sales, with earnings per share of $16.50 to $18.50. The company said it expects permanent reductions from its cost-cutting program — which it calls “DRIVE” — of $1.8 billion.
For the full year, analysts expect FedEx to earn $18.33 a share, on $90.91 billion in sales. FedEx ended its most recent fiscal year with $90.2 billion in sales.
Shares fell 4% after hours.
FedEx since last year has tried to slash billions in costs amid slowing demand for package deliveries, after inflation forced customers to rethink their spending priorities. It has nudged shipping prices higher, cut flights, cut executive jobs and closed offices. In April, FedEx announced plans to consolidate its air and ground operations into a single organization.
In the process, the delivery service’s stock price has rebounded significantly since getting slammed in September, when it warned of a slowdown in shipping demand. That rebound has put the stock in roughly in the same spot it was a year ago.
The company also reported earnings amid other tensions within the nation’s shipping and transportation infrastructure, after online-shopping demand during the pandemic led to higher shipping prices and thus a surge in profits.
While West Coast dockworkers and their employers reached a tentative deal on a contract last week, Teamsters union members at FedEx’s main rival, United Parcel Service Inc. UPS, -0.73%, voted to authorize a strike if UPS doesn’t offer them a contract they don’t like. The friction has led to worries that businesses and customers would have to pay more to have products delivered.
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The numbers: For the first time in nearly a year, home builders are upbeat about the housing market outlook.
The shortage of previously-owned sales is helping to buoy builders’ confidence.
With mortgage rates above 6%, many homeowners find little incentive to sell—nearly 92% have an outstanding mortgage with a rate below 6%, according to a recent survey conducted by Redfin RDFN, -0.37%,
a brokerage and real estate listings company. And 23.5% of homeowners have a mortgage rate of less than 3%. Consequently, the number of new home listings has dropped by 22%, as compared with the same period a year ago, according to a Realtor.com housing trends report.
In turn, home builders are feeling good about their business. The National Association of Home Builders’ (NAHB) monthly confidence index rose 5 points to 55 in June, the trade group said Monday.
This is the sixth month in a row that sentiment has improved among builders. It is also the first time in 11 months that builder confidence has moved into positive territory of above 50.
The June reading of 55 was the strongest since July 2022. A year ago, the index stood at 67.
Key details: Builders were starting to pull back on sales incentives. The share of builders cutting prices to boost sales has dropped to 25% in June, from a peak of 36% in November 2022.
The typical builder was cutting prices by 7% in June, the NAHB said.
The three gauges that underpin the overall builder-confidence index were up.
A reading on current sales conditions rose by 5 points.
A measure on future sales gained 6 points.
A gauge of traffic of prospective buyers rose by 4 points.
Big picture: Due to pandemic-era monetary policies that depressed mortgage rates, the home buyers, real-estate agents, mortgage brokers and the rest of the industry are stuck trying to find solutions to a major supply crunch of homes.
Builders seem to be one of the few participants who have benefited from the supply crunch, given the nature of their business of new construction. The homebuilder ETF, XHB, -0.38%,
is up 25% year-to-date.
What the NAHB said: “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year,” Robert Dietz, chief economist at the NAHB, wrote.
And with the “Federal Reserve nearing the end of its tightening cycle,” the statement read, it’s “good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.”
BEIJING (AP) — U.S. Secretary of State Antony Blinken met with Chinese President Xi Jinping on Monday, as the top U.S. diplomat wrapped up a high-stakes two-day visit to Beijing aimed at easing soaring tensions between the countries.
The 35-minute meeting at the Great Hall of the People had been expected and was seen as key to the success of the trip, but neither side confirmed it would happen until a State Department official announced it just an hour beforehand.
In footage of the meeting released by state broadcaster CCTV, Xi is heard to say “The two sides have agreed to follow through on the common understandings President Biden and I have reached in Bali.”
In earlier meetings between Blinken and senior Chinese officials, the two sides expressed willingness to talk but showed little inclination to bend from hardened positions on disagreements ranging from trade, to Taiwan, to human rights conditions in China and Hong Kong, to Chinese military assertiveness in the South China Sea, to Russia’s war in Ukraine.
Xi said that they had made progress and reached agreements on “some specific issues” without elaborating. “This is very good,” Xi said.
“I hope that through this visit, Mr. Secretary, you will make more positive contributions to stabilizing China-US relation,” Xi added.
Despite Blinken’s presence in China, he and other U.S. officials had played down the prospects for any significant breakthroughs on the most vexing issues facing the planet’s two largest economies.
Instead, these officials have emphasized the importance of the two countries establishing and maintaining better lines of communication.
Blinken is the highest-level U.S. official to visit China since President Joe Biden took office, and the first secretary of state to make the trip in five years. His visit is expected to usher in a new round of visits by senior U.S. and Chinese officials, possibly including a meeting between Xi and Biden in the coming months.
Blinken met earlier Monday with China’s top diplomat Wang Yi for about three hours, according to a U.S. official.
China’s Ministry of Foreign Affairs wrote in a statement that Blinken’s visit “coincides with a critical juncture in China-U.S. relations, and it is necessary to make a choice between dialogue or confrontation, cooperation or conflict,” and blamed the “U.S. side’s erroneous perception of China, leading to incorrect policies towards China” for the current “low point” in relations.
It said the U.S. had a responsibility to halt “the spiraling decline of China-U.S. relations to push it back to a healthy and stable track” and that Wang had “demanded that the U.S. stop hyping up the ‘China threat theory’, lift illegal unilateral sanctions against China, abandon suppression of China’s technological development, and refrain from arbitrary interference in China’s internal affairs.”
The State Department said Blinken “underscored the importance of responsibly managing the competition between the United States and the PRC through open channels of communication to ensure competition does not veer into conflict.”
In the first round of talks on Sunday, Blinken met for nearly six hours with Chinese Foreign Minister Qin Gang after which both countries said they had agreed to continue high-level discussions. However, there was no sign that any of the most fractious issues between them were closer to resolution.
Both the U.S. and China said Qin had accepted an invitation from Blinken to visit Washington but Beijing made clear that “the China-U.S. relationship is at the lowest point since its establishment.” That sentiment is widely shared by U.S. officials.
Blinken’s visit comes after his initial plans to travel to China were postponed in February after the shootdown of a Chinese surveillance balloon over the U.S.
A snub by the Chinese leader would have been a major setback to the effort to restore and maintain communications at senior levels.
Biden and Xi had made commitments to improve communications “precisely so that we can make sure we are communicating as clearly as possible to avoid possible misunderstandings and miscommunications,” Blinken said before leaving for Beijing.
And Biden said over the weekend that he hoped to be able to meet with Xi in the coming months to take up the plethora of differences that divide them.
In his meetings on Sunday, Blinken also pressed the Chinese to release detained American citizens and to take steps to curb the production and export of fentanyl precursors that are fueling the opioid crisis in the United States.
Since the cancellation of Blinken’s trip in February, there have been some high-level engagements. CIA chief William Burns traveled to China in May, while China’s commerce minister traveled to the U.S. And Biden’s national security adviser Jake Sullivan met with senior Chinese foreign policy adviser Wang Yi in Vienna in May.
But those have been punctuated by bursts of angry rhetoric from both countries over the Taiwan Strait, their broader intentions in the Indo-Pacific, China’s refusal to condemn Russia for its war against Ukraine, and U.S. allegations from Washington that Beijing is attempting to boost its worldwide surveillance capabilities, including in Cuba.
And, earlier this month, China’s defense minister rebuffed a request from U.S. Defense Secretary Lloyd Austin for a meeting on the sidelines of a security symposium in Singapore, a sign of continuing discontent.
Intel Corp. plans to build a “huge and unprecedented” $25 billion advanced chip manufacturing plant in Israel, Prime Minister Benjamin Netanyahu announced Sunday.
The agreement in principle would see a factory in Kiryat Gat open by 2027, according to a statement from Israel’s Finance Ministry.
“This is the largest investment ever in the State of Israel,” Netanyahu’s office said in a tweet Sunday. “It is an expression of great confidence in the Israeli economy and reflects the strength of the free economy we have built, and the technological economy we’re developing here.”
Intel has operated in Israel since 1974, and has a number of facilities there.
An Intel INTC, +1.54%
spokesperson confirmed the company’s “intention to expand manufacturing capacity in Israel” in support of Chief Executive Pat Gelsinger’s “IDM 2.0” strategy, which includes expanding manufacturing capabilities around the world.
Intel is looking to reduce its reliance on Asian chip manufacturing to avoid potential snags in the global supply chain. Last week, the Santa Clara, Calif.-based company announced a $4.6 billion semiconductor assembly and test facility in Poland.
Boeing Stock Usually Wins From the Paris Air Show. This Is the Catch.
Investors who are buying into the post-Covid recovery of commercial aerospace will get an important update about the industry, including the hot issues of sustainability and supply-chain snags, when the Paris Air Show kicks off on Monday.
While the Emancipation Proclamation that freed U.S. slaves was supposed to go into effect in January 1863, the Civil War lasted another two years, and slavery persisted in places under Confederate control. It wasn’t until federal troops marched on Galveston, Texas and took over the state on June 19, 1865 — more than two months after the Civl War ended — that the remaining 250,000 or so slaves in Texas were finally freed. So the date came to be known as Juneteenth — a portmanteau of June 19th.
President Joe Biden signed legislation naming Juneteenth a federal holiday in 2021 — the first time that a new federal holiday had been approved since Martin Luther King Jr. Day in 1983. So 2023 is the second year that Juneteenth will be observed as a federal holiday. And this means that the U.S. stock markets and many federal offices and parks will be closed, as well as plenty of workplaces and schools. But some services will still be running.
So if you’re wondering if banks will be open on Juneteenth, or whether the post office is still delivering mail, then read on.
Is the stock market closed on Juneteenth?
Yes, U.S. stock markets — including the New York Stock Exchange, NASDAQ and bond markets, will be closed in observance of Juneteenth on Monday, June 19.
Will banks be closed on Juneteenth?
Yes, you should expect banks to be closed on Juneteenth. Federal Reserve banks and their branches are observing the holiday on Monday, and most other banks follow the Federal Reserve’s holiday schedule. For example, Bank of America BAC, +0.86%
and JP Morgan Chase & Co. JPM, +1.13%
have declared Juneteenth a holiday, so their branches are closed on Monday. But check with your local banking branch to be sure.
You can still use ATMs to withdraw or deposit cash, of course. And banking services like transferring money may also be available on your bank’s app or website.
Will the United States Postal Service deliver mail on Juneteenth?
Some postal services may be available online, however, such as ordering stamps and other mail supplies, printing shipping labels or scheduling package pickups for after the holiday. You’ll just need a USPS.com account.
Are UPS and FedEx open on Juneteenth?
Yes. UPS UPS, +2.36%
and FedEx FDX, +2.95%
are operating normally on Monday, June 19, and their FedEx Office and UPS Store brick-and-mortar locations will be open for business, as well.
Are schools open on Juneteenth?
Many U.S. schools are already in summer recess. But as far as summer classes or summer semesters go, schools tend to follow federal holiday schedules, so they are also probably closed. Check with your school district to be sure.
What else is closed on Juneteenth?
All non-essential federal offices will be closed on Monday, and federal courthouses will be closed, as well. DMV locations will depend on the state, however: While New York’s DMV offices will be closed, for example, Florida’s DMV offices will be open. In fact, state-run offices may be open on Juneteenth, so check your local listings.
What about stores and restaurants?
Most retail, chain and grocery stores should be running on Juneteenth. Some companies including Target TGT, +3.46%,
Best Buy BBY, +3.05%
and Nike NKE, -0.40%
have declared Juneteenth a company holiday, for example, but their stores remain open.
