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New National Survey Reveals Teens Are Not Financially Ready for Future

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Jun 27, 2024

Majority of Parents Don’t Think Their Teens Understand Personal Finances, Aren’t Confident They’ll Make Smart Financial Decisions

NEW YORK, June 27, 2024 (Newswire.com)
–
Teens are ready to start enjoying their summer vacation, and that means that most parents will be footing the bill for their kids’ fun-filled activities. But before they reach for their wallets, parents might want to consider taking this opportunity to teach their teens about financial management. According to a new national survey[1], when it comes to understanding finances, teens need all the help they can get.

Data from the study conducted by global research company Wired Research and commissioned by Jazmarc Services, which reached more than 1,000 U.S. parents of teens ages 14-18, highlights that teens are anything but financially prepared to navigate their future. In fact, if they had to rate their teens’ financial preparedness, only 18% of parents think their teens are extremely prepared.

The new survey results are part of the inaugural 2024 Teen Financial Readiness Report, a deep dive into how financially prepared today’s teens really are. Key takeaways include:

Parents believe their child’s financial know-how should start at home:
- 98% feel responsible for teaching their teens about managing their finances
- 97% think one of the greatest gifts they can give their teens is the tools to make smart financial decisions
Parents doubt their teens; financial preparedness:
- 7 in 10 (70%) aren’t extremely confident their teens understand personal finances
- 2 in 3 (63%) aren’t completely convinced that as their teens get older they’ll make smart financial decisions
Financial conversations aren’t a focal point: A majority of parents have not had a conversation about:
- Selecting insurance to protect their financial future (83%)
- Investing money (67%)
- Financially planning for unexpected life events (62%)

According to Danielle Sherman, founder and CEO of Wired Research, “This research comes at a time when states across the country are making personal finance coursework a critical part of high-school graduation requirements and our research validates why this is so important.”

Joshua Marcus, founder of Jazmarc Services, agrees. He says, “The research highlights just how financially underprepared teens are to enter adulthood. The data clearly underscores that there is still so much parents want to teach their teens so they will be ready to face whatever financial challenges come their way.”

For more information about the research and to get a copy of the 2024 Teen Financial Readiness Report, visit Jazmarc Services at www.jazmarcllc.com where you can create an account and download it. Alternatively, reach out to Wired Research at info@wiredresearch.com.

[1] An online survey conducted by Wired Research in April 2024 among 1,024 U.S. parents of teens

Source: Wired Research

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June 27, 2024

Stock investors fear ‘no-landing’ economy could spell trouble. What’s next?.

While the U.S. stock market has been pricing in a “soft-landing” scenario for the economy, a blowout January jobs report, relatively strong corporate earnings, and Federal Reserve Jerome Powell’s comments during the past week could point to the possibility of “no landing,” where the economy is resilient while inflation stays on target.

Such a scenario could still be positive for U.S. stocks, as long as inflation remains steady, according to Richard Flax, chief investment officer at Moneyfarm. However, if inflation reaccelerates, the Fed may be hesitant to cut its policy interest rate much, which could spell trouble, Flax said in a call.

What the past week tells us

Investors have just gone through the busiest week so far this year for economic data and corporate earnings reports, with stocks ending at or near their record highs.

The Dow Jones Industrial Average
DJIA
finished the week with its nineth record close of 2024, according to Dow Jones Market Data. The S&P 500 index
SPX
scored its seventh record close this year on Friday, while the Nasdaq Composite
COMP
is about 2.7% lower from its peak.

The Fed kept its policy interest rate unchanged in the range of 5.25% to 5.5% at its Wednesday meeting, as expected. However, in the subsequent press conference, Fed Chair Jerome Powell threw cold water on market expectations that the central bank may start cutting its key interest rate in March, and underscored that they want “greater confidence” in disinflation.

Roger Ferguson, former Fed vice chairman, said Powell introduced “a new kind of risk, the risk of no landing.”

In that scenario, inflation will stop falling, while the economy is strong, Ferguson said in an interview with CNBC on Thursday. However, Ferguson said he doesn’t think it is the likely outcome.

Traders were pricing in a 20.5% likelihood on Friday that the Fed will cut its interest rates in its March meeting, according to the CME FedWatch tool and that’s down from over 46% chance a week ago. The likelihood that the Fed will kick off its rate cutting program in May stood at 58.6% on Friday.

The stronger-than-expected January jobs data released on Friday further eliminates the chance of a rate cut in March, said Flax.

The U.S. economy added a whopping 353,000 new jobs in January while economists polled by The Wall Street Journal had forecast a 185,000 increase in new jobs. Hourly wages rose a sharp 0.6% in January, the biggest increase in almost two years.

The past week has also been heavy with earnings reports, as several tech giants including Microsoft
MSFT,
+1.84%,
Apple
AAPL,
-0.54%,
Meta
META,
+20.32%,
and Amazon
AMZN,
+7.87%
reported their financial results for the fourth quarter of 2023.

Among the 220 S&P 500 companies that have reported their earnings so far, 68% have beaten estimates, with their earnings exceeding the expectation by a median of 7%, analysts at Fundstrat wrote in a Friday note.

While the reported earnings by big tech companies have been “okay,” the guidance was not, said José Torres, senior economist at Interactive Brokers.

What has been driving the tech stocks’ rally since last year was mostly the prospect of sales from artificial intelligence products, but tech companies are not able to monetize the trend yet, Torres said in a phone interview.

Adding to the headwinds is a comeback of concerns around regional banks.

On Thursday, New York Community Bancorp Inc.’s stock triggered the steepest drop in regional-bank stocks since the collapse of Silicon Valley Bank in March 2023. New York Community Bancorp on Wednesday posted a surprise loss and signaled challenges in the commercial real estate sector with troubled loans.

Meanwhile, the Fed’s bank term funding program, which was launched in March last year to bolster the capacity of the banking system, will expire on March 11.

If the Fed could start cutting its key interest rate in March, it would be “sort of like the ambulance that was going to pick regional banks up and save them,” said Torres. “Now the ambulance is coming in May at the earliest, I think that we’re in a particularly risky period from now to May,” Torres said.

What should investors do

Investors should go risk-off before May, according to Torres. “Last year, goods and commodities helped a lot on the disinflationary front. This year for disinflation to continue, we’re going to need services to start contributing to that. Then we’re going to need to see an increase in the unemployment rate,” Torres said.

He said he prefers U.S. Treasurys with a tenor of four years or shorter, as the long-dated ones may be susceptible to risks around the fiscal deficit and government borrowing. For stocks, he prefers the healthcare, utilities, consumer staples and energy sectors, he said.

Keith Buchanan, senior portfolio manager at Globalt Investments, is more optimistic. The slowdown in inflation and the relatively strong economic data and earnings “don’t really paint a picture for a risk-off scenario,” he said. “The setup for risk assets still leans towards the bullish expectation,” Buchanan added.

In the week ahead, investors will be watching the ISM services sector data on Monday, the U.S. trade deficit on Wednesday and weekly initial jobless benefit claims numbers on Thursday. Several Fed officials will speak as well, potentially providing more clues on the possible trajectory of rate cuts.

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February 4, 2024

Mark Zuckerberg could pay millions to the IRS on Meta dividends. He still might be getting ‘a major break’.

Mark Zuckerberg delighted Meta shareholders and Wall Street this week with news of the social media giant’s first-ever dividend.

The IRS may also be happy, now that it’s staring at millions in taxes on the Meta stock dividends bound for Zuckerberg’s portfolio.

Zuckerberg, the CEO of Meta Platforms Inc.
META,
+20.32%,
is poised to make $700 million in dividends yearly. He owns nearly 350 million shares, according to FactSet, and the company will start paying a quarterly dividend of 50 cents a share.

That would yield nearly $167 million in federal taxes yearly, after a qualified-dividend tax of 20% and another 3.8% tax on the investment returns of rich households, two accounting experts said.

California income taxes of 13.3% on the dividends could cost Zuckerberg another $93.1 million, said Andrew Belnap, an accounting professor at the University of Texas at Austin’s McCombs School of Business.

All in, that’s a combined $259.7 million in federal and state taxes annually on the Meta dividends, Belnap estimated.

For context, U.S. taxpayers reported over $285 billion in qualified-dividend income to the IRS though mid-November 2023, according to agency statistics. Nearly 30 million tax returns reported qualified dividends through that time.

Meta said it plans a quarterly cash dividend going forward, with the first such payment in March.

Meta shares soared 20.5% on Friday, ending with a record-high close of $474.99. The Dow Jones Industrial Average
DJIA,
S&P 500
SPX
and Nasdaq Composite
COMP
all closed higher Friday.

‘Zuck is getting a major break’

Meta announced the dividend payment in its earnings results Thursday, on the same week that Americans began filing their income taxes.

A look at Zuckerberg’s dividends and their tax implications offer a peek at the debate about the varying ways wages and wealth are taxed.

“Zuck is getting a major break,” said Andrew Schmidt, an accounting professor at North Carolina State University’s Poole School of Management who also crunched the numbers for MarketWatch.

Approximately $167 million “seems like a high tax bill,” he said. But if Zuckerberg received the $700 million as a straight salary, Schmidt estimated he’d be looking at a roughly $259 million tax bill on the wages after they were taxed at the top marginal rate of 37%.

Federal income tax brackets run from 10% to 37%.

Meanwhile, the IRS taxes qualified dividends and capital gains at 0%, 15% and 20%, depending on income and household status. The net investment income tax adds another 3.8% for individuals making at least $200,000 or married couples worth $250,000.

For federal and state taxes on the Meta dividends, Zuckerberg would face a combined rate of 37.1%, Belnap noted. “His tax rate on this is actually fairly high,” he said.

The gap in tax rates on income derived from wages and investments “has been a big criticism with U.S. tax policy,” Schmidt said, especially as lawmakers look for ways to come up with more tax revenue.

Regular retail investors enjoy the same preferential rates on capital gains and dividends as the top 1% of taxpayers, Schmidt added. The issue is that those dividends and stock profits are a smaller part of their income while salaries, taxed at higher rates, are a bigger proportion.

Belnap noted that California’s state tax rules don’t provide special treatment to dividends.

Zuckerberg received a $1 base salary in 2022, a figure that hasn’t changed in several years. He is now worth $142 billion, according to the Bloomberg Billionaires Index, making him the fifth-richest person in the world.

Meta did not immediately respond to a request for comment.

Taxes on the Meta dividends will not be something Zuckerberg, or any Meta shareholders big or small, need to deal with until next year’s tax season, Belnap and Schmidt observed.

But as taxpayers amass their 1099-DIV forms on dividend income, IRS figures show that it’s mostly upper-echelon taxpayers reaping the rewards on the preferential rates for qualified dividends.

Households worth at least $1 million accounted for 40% of the approximate $285.3 billion in qualified dividends reported through mid-November, according to agency figures.

For less affluent investors, “it’s usually a nice supplement, but I’d say very few people are living off dividends,” Belnap said.

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February 2, 2024

Meta’s stock is the most overbought in 11 years, but that could be a good thing

There’s a common belief that “overbought” is a technical condition for a stock, but in practice it seems to be more of an ability.

Meta Platforms Inc.’s stock
META,
+20.32%
soared so much Friday after a blowout earnings report, that some technical readings have reached levels not seen in 11 years.

The stock rocketed 20.9% to close at a record $474.99, to book the third-biggest gain since going public in May 2012. The only bigger rallies were 23.3% on Feb. 2, 2023 and 29.6% on July 25, 2013, which were also after earnings reports.

The stock’s Relative Strength Index, which is a momentum indicator that measures the magnitudes of recent gains and losses, climbed to 86.48. That’s the highest level seen since it closed at a record 89.39 on July 30, 2013.

But that shouldn’t scare off Meta bulls.

Many chart watchers believe RSI readings above 70 are signs of “overbought” conditions, which suggests bulls need a breather after running faster and farther than they are used to.

There are also many who believe the ability to become overbought is a sign of underlying strength, since a stock tends to be trending higher when RSI hurdles 70. (Read Constance Brown’s “Technical Analysis for the Trading Professional.”)

For example, the record RSI reading came three days after the record stock-price rally of 29.6% on July 25, 2013. Even though RSI closed at what was then a record of 88.27 after a record price gain on the 25th, the stock continued to rally and become even more overbought.

It was that spike that snapped the stock out of the year-long doldrum that followed the initial public offering, and flipped the long-term narrative on the stock to bullish. (Read “Facebook’s ‘breakaway gap’ is a bullish game changer,” from The Wall Street Journal.)

FactSet, MarketWatch

And while the record RSI readings in July 2013 did lead to a minor short-term pullback, it didn’t stop the stock from embarking on a long-term uptrend, in which RSI made multiple forays above 70.

And the last time RSI closed above 85 was Feb. 2, 2023, when it closed at 86.07, also after a blowout earnings report.

And similar to 10 years earlier, that historically high overbought reading helped launch another long-term rally.

So yes, Meta’s stock is now facing historically high overbought conditions. But as many chart watchers like to say, overbought doesn’t mean over.

One thing to consider, however, is that the two prior times RSI spiked above 85 were while the long-term fates of the stock were still in question — the stocks were working on short-term bounces following long-term downtrends.

But Friday’s blast off happened just days after the stock closed at a record high. There was no resistance to hurdle, so rather than a bullish “breakaway gap,” Friday’s jump could be considered more a bullish leap of faith.

Also read:

Meta’s killer stock rally could add $200 billion in market cap — a historic haul.

Nvidia’s stock could rise above $600 — despite signs it’s already overbought.

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February 2, 2024

Alphabet’s stock dips because advertising was good, but not good enough

Google parent Alphabet Inc.’s stock was tumbling late Tuesday, as a rebound in digital advertising fell short of analysts’ lofty expectations.

The search-engine powerhouse reported a jump in fourth-quarter sales, chiefly through advertising, but Alphabet’s shares
GOOGL,
-1.34%

GOOG,
-1.16%
fell 4% in after-hours trading.

Total revenue was $86.3 billion, up 13% from $76 billion a year ago. Sales minus total acquisition costs (TAC) came in at $72.3 billion, compared with $63.1 billion a year ago.

Alphabet reported fourth-quarter net income of $20.7 billion, or $1.64 a share, compared with net income of $13.6 billion, or $1.05 a share, in the year-ago quarter.

“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come,” Alphabet Chief Executive Sundar Pichai said in a statement announcing the results.

Analysts surveyed by FactSet had expected on average net earnings of $1.59 a share on revenue of $85.3 billion and ex-TAC revenue of $71.2 billion.

Google’s total advertising sales climbed to $65.5 billion from $59 billion a year ago, edging analysts’ average expectations of $65.8 billion. YouTube ad sales rose to $9.2 billion from $7.96 billion a year. Google Cloud rang up $9.2 billion in sales, up from $7.3 billion.

Alphabet is also ramping up AI initiatives to improve operational efficiency and productivity for 2023 and beyond. The company is using AI in its finance organization and analytics, but Alphabet did not break out AI revenue in Tuesday’s earnings report.

Alphabet Chief Financial Officer Ruth Porat told CNBC that gen-AI will be a focus of the call with analysts now taking place.

Shares of Google have climbed 53% over the past 12 months. The S&P 500 index
SPX
has risen 21% the past year.

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January 30, 2024

Beware ‘pricey’ stocks as inflation may ‘roller-coaster back up,’ says BlackRock

U.S. stocks appear on course for “another year of flip-flopping market narratives” as falling inflation may “roller-coaster back up” and rattle investor expectations for a “soft landing,” according to BlackRock.

“Market jitters in early January suggest there is some anxiety about macro risks further out,” said BlackRock Investment Institute strategists in a note Tuesday. “We stay selective as we expect resurgent inflation to come into view.”

The strategists also pointed to “pricey valuations” in the U.S. stock market.

Markets have favored a small group of seven megacap stocks “for their ability to leverage artificial intelligence,” they said. Those stocks’ price-to-earnings ratios for the next 12 months are “about a third higher than for the S&P 500 and when excluding them,” a chart in their note shows.

BLACKROCK INVESTMENT INSTITUTE NOTE DATED JAN. 16, 2024

Price-to-earnings ratios, which “divide a company’s share price by its earnings per share,” fell in the second half of 2023 as stronger earnings expectations supported the megacap rally, the BlackRock strategists said. The so-called Magnificent Seven, as those market-leading megacap tech stocks are known, skyrocketed last year, fueling the S&P 500 index’s 24% surge.

“Even after the market-wide rally in December, market concentration in a handful of megacaps — firms with ultra-large market capitalizations — remains high,” the strategists said.

The seven companies with massive market values — Apple Inc.
AAPL,
-1.24%,
Microsoft Corp.
MSFT,
+0.49%,
Google parent Alphabet Inc.
GOOGL,
-0.11%

GOOG,
-0.11%,
Amazon.com Inc.
AMZN,
-0.94%,
Nvidia Corp.
NVDA,
+3.09%,
Facebook parent Meta Platforms Inc.
META,
-1.88%
and Tesla Inc.
TSLA,
+0.49%
— have an outsized weighting in the S&P 500.

Chip maker Nvidia was among the best-performing stocks in the S&P 500 in afternoon trading on Tuesday, with a sharp gain of 2.7% at last check, according to FactSet data. By contrast, the broad S&P 500 index
SPX
was down 0.7% on Tuesday afternoon, while the Dow Jones Industrial Average
DJIA
and technology-heavy Nasdaq Composite
COMP
were also declining.

Read: What’s next for stocks as ‘tired’ market stalls in 2024 ahead of closely watched retail sales

Potential catalysts

“We find valuations tend to matter more for long-term rather than near-term stock returns, and that’s why they usually aren’t enough to spoil market sentiment without a catalyst,” the BlackRock strategists wrote.

“Earnings could be a catalyst,” as well as inflation, they said.

Consensus expectations for earnings growth rose last year, with forecasts now calling for an increase of as much as 11% in the next 12 months, their note says, citing LSEG data.

BlackRock expects that U.S. inflation will this year subside to near the Federal Reserve’s 2% target. For now, that may support the soft-landing scenario the stock market and Fed have “largely embraced,” in which the U.S. may avoid a recession as inflation falls to that desired target, according to the strategists.

Many investors expect the Fed may start cutting interest rates this year as inflation eases, after the central bank hiked rates aggressively in a bid to tame it.

“The problem: Inflation won’t remain at that target, in our view, and this risk becoming clearer could challenge upbeat sentiment,” the BlackRock strategists said. “So we monitor earnings season for any signs of cracks given pricey valuations.”

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January 16, 2024

‘Plant-Based’ Peanut Butter … And Shampoo … And Booze

Several years ago, I made a New Year’s resolution to eat more plants. Doing so, I assumed, would be better for my health, for animals, and for the planet. Besides, it would be easy: The rise of plant-based meat alternatives, offered by companies such as Impossible Meat and Beyond Meat, made it a breeze to eat less meat but still satisfy the occasional carnivorous urge. I could have my burger and eat it too.

Or so I thought. Meat alternatives, I found, cost more than their conventional counterparts and are made with complicated ingredients that raise doubts about their healthiness—and even then, taste just okay. Other people have had similar concerns, part of the reason the popularity of those products has declined in recent years to such a degree that Beyond Meat is reportedly now in “survival mode.” But beyond the meat aisle, the “plant-based” label lives on in virtually every food product imaginable: instant ramen, boxed mac and cheese, Kraft singles, KitKat bars, even queso. You can now buy plant-based peanut butter. You can also wash your hair with plant-based shampoo and puff on a plant-based vape.

Queso made from cauliflower instead of milk is correctly described as plant-based. But if peanut butter is vegan to begin with, then what is the point of the label? And who asked for plant-based liquor? On packaging and ad copy, plant-based has been applied to so many items—including foods that are highly processed, or those that have never contained animal ingredients—that it has gotten “diluted to nothing,” Mark Lang, a marketing professor at the University of Tampa who studies food, told me.

Technically, plant-based does have a clear definition. The Cornell University biochemist Thomas Colin Campbell is often credited for coining the term in the 1980s as a neutral, less fraught descriptor for diets considered “vegan” or “vegetarian.” That is what made plant-based a popular term for companies eager to sell their meat replacements to a wide range of eaters. The Plant Based Foods Association uses essentially the same criteria—foods made from plants that do not contain animal products—to determine which products can bear its “Certified Plant Based Seal.”

Some companies describe products as “plant-based,” however, even if they don’t meet these criteria. Items sold as such include foods that have always been vegan, such as prepackaged jackfruit, and those mixed in with some animal products, such as Wahlburgers’ “Flex Blend” patties. But even a product that is properly described as “plant-based” might mean different things to different people, because there is no one reason to try and avoid the consequences of animal rearing and consumption. Health is the leading one, followed by environmental and ethical concerns, Emma Ignaszewski, the associate director of industry intelligence and initiatives at the Good Food Institute, told me.

The label’s vagueness has been a marketer’s dream, creating an enormous opportunity to capitalize on the perceived virtuousness and healthiness of eating plant-based. Brands use the “plant-based” label to “draw people’s attention to the aggregate goodness of a particular product” and simultaneously “deflect attention” from any less appealing attributes, Joe Árvai, a professor of psychology and biological sciences at the University of Southern California, told me. Some, like coconut water, are relatively good for you; others, like booze, are probably not. And their environmental benefits remain murky: Using fewer animal ingredients generally decreases emissions, but the climate impacts are not always straightforward.

In this way, the evolution of plant-based mirrors that of organic or gluten-free. These terms have specific meanings that are legitimately useful for helping people make choices about their food, but they have been overused into oblivion. You can now buy organic marijuana and gluten-free water along with your plant-based energy drinks. With multiple labels, including gluten-free, plant-based, GMO-free, Earth-friendly, and Fair Trade, “some products look like a NASCAR” vehicle, Lang said. “You’re just putting buttons all over the place, trying to get my attention.”

We may have already hit peak “plant-based.” According to a recent survey from the Food Industry Association, there is substantial confusion about what the label means—and that could be discouraging people from buying plant-based products. Some are now outright skeptical of the label. A 2023 study co-authored by Árvai suggested that people are less likely to go for foods described as “plant-based” (or “vegan”) compared with those called “healthy” or “sustainable.” One reason may be negative associations with plant-based meat alternatives, which are seen as “artificial” because of their ultra-processed nature, co-author Patrycja Sleboda, an assistant professor of psychology at Baruch College, City University of New York, told me.

Another may be that consumers are not sure whether “plant-based” foods are healthy. Americans may respond better when the actual benefits of the food are highlighted, she said. Similarly, market research conducted by Meati, a company that sells meat alternatives made of mushrooms, found that the “plant-based” label, applied to food, signaled “bad eating experience, bad flavor, bad texture, poor nutrition, too many ingredients, and overprocessing,” Christina Ra, Meati’s vice president of marketing and communications, told me.

Some good may still come out of the messiness of “plant-based” everything. Meati deliberately avoids the label altogether, opting instead to highlight the contents of its products (“95 percent mushroom root”). A recent Whole Foods report predicted that in 2024, consumers will want to “put the ‘plant’ back in ‘plant-based’” by replacing “complex meat alternatives” with recognizable ingredients such as walnuts and legumes. In a particular literal interpretation of this prediction, the company Actual Veggies sells a greens-and-grains patty called “The Actual Green Burger.” And some milk alternatives are also now skipping “plant-based” and simplifying their ingredient lists to just two items (nuts and water).

Shoppers just want to know what’s in their food without having to think too hard about it. Plant-based hasn’t helped with that. Even Campbell, after he coined the term, acknowledged that it was a limiting, potentially misleading phrase that left too much room for unhealthy ingredients, such as sugar and flour. Perhaps shoppers’ exasperation with the vagueness of “plant-based” eating may eventually lead brands to promote more plant-based eating: that is, just eating plants.

Yasmin Tayag

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January 8, 2024

Outpace Competitors in 2024 with Fresh Niche Growth Tactics | Entrepreneur

Opinions expressed by Entrepreneur contributors are their own.

A niche market is simply defined as a subset of an overall market, with the individuals comprising it sporting unique and often nuanced needs. This is why businesses that target them typically focus on one type of product or service. And this focused effort can result in remarkable returns: A study published in a May, 2013 edition of Market Intelligence & Planning revealed that businesses that engage with niche markets experience “increased profits, prices, sales, growth, market shares and competitiveness.”

The challenge is that anticipating future growth in these sectors, while vital to success, is no easy feat.

1. Early homework

The first step in securing growth is to find your niche market — a sector underserved by current products and perhaps ignored by broad-market companies. The good news is that the possibilities are expansive. Harvard Business Review found that no less than two-thirds of customers feel that “companies are not responding fast enough to their changing needs.”

One reliable way to find a niche market with potential for growth is to evaluate your own needs and the needs of those around you. Does your mother lament how bare her house feels now that you’ve moved out? Then she’s part of a growing community of empty nesters perhaps in need of personalized home décor. Does your gym buddy keep complaining about how his coffee doesn’t fit into a training regimen? Then he might be part of the health-conscious cold-brew lovers market.

2. Evaluate demand

A market close to your heart will be the easiest to research and serve. Just ensure that yours isn’t too small to be profitable. Simply because a sector is underserved does not mean it has the potential for growth. This is why evaluating market demand — including its maturity and business cycle — is crucial.

That said, even if there doesn’t appear to be growing demand, this doesn’t mean your business cannot drive it. For example, in 2021, a garden furniture company conducted a case study revealing that UK households, on average, invested approximately £670 ($853 US) in enhancing outdoor spaces, then strategically analyzed how to better impact sales outcomes. Resulting insights led to a remarkable 160% boost in revenue and the introduction of 450 unique stock-keeping units to the company’s product lineup. By conducting a similar base-rate analysis, your business, too, can shape products for a niche market while simultaneously influencing that market.

Of course, customers’ needs are always changing, so you’ll likely need to pivot and expand at some point, but the street goes both ways; you can also strategically drive demand with a product line.

3. A deeper market dive

Once you have found a market with potential for growth, you’ll need to find out what product or service will meet its unique needs and why these needs aren’t currently being met. There are a variety of ways to conduct associated research, usually by looking at the broader markets they’re part of. Methods include:

Tracking down current industry reports: They must detail the size and drivers of — and barriers within and without — a sector, including its potential for growth.
Engaging with potential customers: Despite its time-consuming nature, this step is essential. Surveys are an effective mode of interaction, but for more in-depth insights, don’t shy away from individual discussions, either through social media platforms or face-to-face meetings.
Identify competitors: Oversaturated markets will likely have the least potential for growth, not surprisingly, but also keep in mind that — though they may be tempting — niche markets with no competitors can also pose sales risks, even when catered to. So, it can be helpful to expand or pivot slightly to give yourself competitive protection.

4. Consider external factors

When contemplating the potential for growth, be sure to take into account external factors that alter customer need and demand, and otherwise alter a market broadly. (We all saw, for example, how impactful the Covid-19 pandemic was on businesses of every size.) Getting ahead of them will let you plan and adapt. Also, it’s not uncommon for radical innovations (in technology, principally) to “leapfrog” a business, so keep a wary eye on advancements and plan how to incorporate them into offerings.

Another common external factor is the gamut of governmental regulations and their capacity to force compliance, influence customer buying willingness and trust, and/or outlaw a product altogether. Here again, being a student of possibilities — taking note of even possible regulatory changes — will allow you to quickly customize offerings and educate customers.

5. Potential for early adopter relationships and strategic partnerships

Cultivating relationships with your early adopters will provide valuable insights and feedback, which helps refine, improve and expand a product in alignment with the ever-evolving needs of a niche market.

Another key growth assist can come in the form of helpful allies. The presence of influencers is a good indicator that a market has room for growth. Partnerships with these influencers and other thought leaders can fuel increased visibility and access.

Pritom Das

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January 5, 2024

Mark Zuckerberg sold $428 million of Meta stock in the last two months of 2023

Mark Zuckerberg cashed in on his company’s 2023 stock rally in a big way — selling nearly $428 million worth of shares in Meta Platforms Inc. over the final two months of the year.

The Meta
META,
-0.53%
co-founder and chief executive offloaded just under 1.8 million shares over the course of every trading day between Nov. 1 and the end of last year, according to a regulatory filing with the U.S. Securities and Exchange Commission on Tuesday.

The sales were in accordance with a Rule 10b5-1 trading plan adopted by Zuckerberg in July and saw him capitalize on Meta’s rebounding stock price, which soared 194.1% in 2023 — and nearly threefold since it hit a seven-year low in November 2022. By comparison, the S&P 500
SPX
and the Nasdaq Composite
COMP
indexes gained 24.2% and 43.4%, respectively, in 2023.

The moves also broke a two-year hiatus, dating back to November 2021, during which Zuckerberg did not sell any of his stock in the Facebook parent company, according to Bloomberg, which first reported the news. Zuckerberg, who owns roughly 13% of Meta, is ranked the seventh-richest person in the world with a net worth of $125 billion, according to the Bloomberg Billionaires Index.

Nasdaq-listed Meta shares, which fell 0.5% on Wednesday to $344.47, are now roughly 11% off their all-time closing high of $382.18 from September 2021.

Representatives for Meta could not immediately be reached for comment.

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January 3, 2024

These 20 stocks soared the most in 2023

(Updated with Friday’s closing prices.)

The 2023 rally for stocks in the U.S. accelerated as more investors bought the idea that the Federal Reserve succeeded in its effort to bring inflation to heel.

The S&P 500
SPX
ended Friday with a 24.2% gain for 2023, following a 19.4% decline in 2022. (All price changes in this article exclude dividends). Among the 500 stocks, 65% were up for 2023. Below is a list of the year’s 20 best performers in the benchmark index.

This article focuses on large-cap stocks. MarketWatch Editor in Chief Mark DeCambre took a broader look at all U.S. stocks of companies with market capitalizations of at least $1 billion, to list 10 with gains ranging from 412% to 1,924%.

The Fed began raising short-term interest rates and pushing long-term rates higher in March 2022 by allowing its bond portfolio to run off. That explains the poor performance for stocks in 2022, as bonds and even bank accounts because more attractive to investors.

The central bank hasn’t raised the federal-funds rate since moving it to the current target range of 5.25% to 5.50% in July, and its economic projections point to three rate cuts in 2024.

Investors are anticipating the return to a low-rate environment by scooping up 10-year U.S. Treasury notes
BX:TMUBMUSD10Y,
whose yield ended the year at 3.88%, down from 4.84% on Oct. 27 — the day of the S&P 500’s low for the second half of 2023.

Read: Treasury yields end mostly higher but little changed on year after wild 2023

Before looking at the list of best-performing stocks of 2023, here’s a summary of how the 11 sectors of the S&P 500 performed, with the full index and three more broad indexes at the bottom:

Sector or index	2023 price change	2022 price change	Price change since end of 2021	Forward P/E	Forward P/E at end of 2022	Forward P/E at end of 2023
Information Technology	56.4%	-28.9%	11.5%	26.7	20.0	28.2
Communication Services	54.4%	-40.4%	-7.6%	17.4	14.3	21.0
Consumer Discretionary	41.0%	-37.6%	-11.4%	26.2	21.7	34.7
Industrials	16.0%	-7.1%	8.0%	20.0	18.7	22.0
Materials	10.2%	-14.1%	-4.9%	19.5	15.8	16.6
Financials	9.9%	-12.4%	-3.4%	14.6	13.0	16.3
Real Estate	8.3%	-28.4%	-21.6%	18.3	16.9	24.7
Healthcare	0.3%	-3.6%	-3.3%	18.2	17.7	17.3
Consumer Staples	-2.2%	-3.2%	-5.4%	19.3	20.6	21.4
Energy	-4.8%	59.0%	51.8%	10.9	9.8	11.1
Utilities	-10.2%	-1.4%	-11.4%	15.9	18.7	20.4

S&P 500 SPX	24.2%	-19.4%	0.4%	19.7	16.8	21.6
Dow Jones Industrial Average DJIA	13.7%	-8.8%	3.8%	17.6	16.6	18.9
Nasdaq Composite COMP	43.4%	-33.1%	-3.5%	26.9	22.6	32.0
Nasdaq-100 NDX	53.8%	-33.0%	3.5%	26.3	20.9	30.3
Source: FactSet

A look at 2023 price action really needs to encompass what took place in 2022 for context. The broad indexes haven’t moved much from their levels at the end of 2022 (again, excluding dividends). We have included current forward price-to-earnings ratios along with those at the end of 2021 and 2022. These valuations have declined a bit, which may provide some comfort for investors wondering how likely it is for stocks to continue to rally in 2024.

Biggest price increases among the S&P 500

Here are the 20 stocks in the S&P 500 whose prices rose the most in 2023:

Company	Ticker	2023 price change	2022 price change	Price change since end of 2021	Forward P/E	Forward P/E at end of 2022	Forward P/E at end of 2021
Nvidia Corp.	NVDA,	239%	-50%	68%	24.9	34.4	58.0
Meta Platforms Inc. Class A	META, -1.22%	194%	-64%	5%	20.2	14.7	23.5
Royal Caribbean Group	RCL, -0.37%	162%	-36%	68%	14.3	14.9	232.4
Builders FirstSource Inc.	BLDR, -1.02%	157%	-24%	95%	14.2	10.7	13.3
Uber Technologies Inc.	UBER, -2.49%	149%	-41%	47%	56.9	N/A	N/A
Carnival Corp.	CCL, -0.70%	130%	-60%	-8%	18.7	41.3	N/A
Advanced Micro Devices Inc.	AMD, -0.91%	128%	-55%	2%	39.7	17.7	43.1
PulteGroup Inc.	PHM, -0.26%	127%	-20%	81%	9.1	6.3	6.2
Palo Alto Networks Inc.	PANW, -0.24%	111%	-25%	59%	50.2	38.0	70.1
Tesla Inc.	TSLA, -1.86%	102%	-65%	-29%	66.2	22.3	120.3
Broadcom Inc.	AVGO, -0.55%	100%	-16%	68%	23.2	13.6	19.8
Salesforce Inc.	CRM, -0.92%	98%	-48%	4%	28.0	23.8	53.5
Fair Isaac Corp.	FICO, -0.46%	94%	38%	168%	47.1	29.3	28.7
Arista Networks Inc.	ANET, -0.62%	94%	-16%	64%	32.7	22.3	41.4
Intel Corp.	INTC, -0.28%	90%	-49%	-2%	26.6	14.6	13.9
Jabil Inc.	JBL, -0.45%	87%	-3%	81%	13.5	7.9	10.3
Lam Research Corp.	LRCX, -0.81%	86%	-42%	9%	25.2	13.5	20.2
ServiceNow Inc.	NOW, +0.57%	82%	-40%	9%	56.0	42.6	90.1
Amazon.com Inc.	AMZN, -0.94%	81%	-50%	-9%	42.0	46.7	64.9
Monolithic Power Systems Inc.	MPWR, -0.23%	78%	-28%	28%	49.1	27.3	57.9
Source: FactSet

Click on the tickers for more about each company.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Don’t miss: Nvidia tops list of Wall Street’s 20 favorite stocks for 2024

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December 30, 2023

The Magnificent 7 dominated 2023. Will the rest of the stock market soar in 2024?

2023 will go down in history for the start of a new bull market, albeit a strange one.

Despite some year-end catch-up by the rest of the S&P 500 index, megacap technology stocks, characterized by the so-called Magnificent Seven, have dominated gains for the large-cap benchmark SPX, which is up 23.8% for the year through Friday’s close.

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December 24, 2023

November's rally just erased two months of Fed tightening, economist says

Financial conditions are now looser than in September, says economist

Financial conditions in the U.S. are looser than in September, says economist.

Getty Images

The feel-good tone gripping markets in the home stretch of 2023 may not be what the Federal Reserve had penciled in for the holidays.

The stock market in December, once again, has been knocking on the door of record levels, driven by optimism about easing inflation and potential Fed rate cuts next year.

But while the prospect of double-digit equity gains this year would be a reprieve for investors after a brutal 2022, the latest rally also points to looser financial conditions.

Ultimately, the risk of looser financial conditions is that they could backfire, particularly if they rub against the Fed’s own goal of keeping credit restrictive until inflation has been decisively tamed.

Read: Inflation is falling but interest rates will be higher for longer. Way longer.

Specifically, the November rally for the S&P 500 index
SPX
can be traced to the 10-year Treasury yield
BX:TMUBMUSD10Y
dropping to 4.1% on Thursday from a 16-year peak of 5% in October.

Falling 10-year Treasury yields from a 5% peak in October coincides with a sharp rally in the S&P 500 at the tail end of 2023.

Oxford Economics

The Fed only exerts direct control over short-term rates, but 10-year and 30-year Treasury yields
BX:TMUBMUSD30Y
are important because they are a peg for pricing auto loans, corporate debt and mortgages.

That makes long-term rates matter a lot to investors in stocks, bonds and other assets, since higher rates can lead to rising defaults, but also can crimp corporate earnings, growth and the U.S. economy.

Michael Pearce, lead U.S. economist at Oxford Economics, thinks the November rally may put Fed officials in a difficult spot ahead of next week’s Dec. 12 to 13 Federal Open Market Committee meeting — the eighth and final policy gathering of 2023.

“The decline in yields and surge in equity prices more than fully unwinds the tightening in conditions seen since the September FOMC meeting,” Pearce said in a Thursday client note.

The Fed next week isn’t expected to raise rates, but instead opt to keep its benchmark rate steady at a 22-year high in a 5.25% to 5.5% range, which was set in July. The hope is that higher rates will keep bringing inflation down to the central bank’s 2% annual target.

Ahead of the Fed’s July meeting, stocks were extending a spring rally into summer, largely driven by shares of six meg-cap technology companies and AI optimism.

From June: Nvidia officially closes in $1 trillion territory, becoming seventh U.S. company to hit market-cap milestone

Rates in September were kept unchanged, but central bankers also drove home a “higher for longer” message at that meeting, by penciling in only two rate cuts in 2024, instead of four earlier. That spooked markets and triggered a string of monthly losses in stocks.

Pearce said he expects the Fed next week to “push back against the idea that rate cuts could come onto the agenda anytime soon,” but also to “err on the side of leaving rates high for too long.”

That might mean the first rate cut comes in September, he said, later than market odds of a 52.8% chance of the first cut in March, as reflected by Thursday by the CME FedWatch Tool.

Stocks were higher Thursday, poised to snap a three-session drop. A day earlier, the S&P 500 closed 5.2% off its record high set nearly two years ago, the Dow Jones Industrial Average
DJIA
was 2% away from its record close and the Nasdaq Composite Index
COMP
was almost 12% below its November 2021 record, according to Dow Jones Market Data.

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December 7, 2023

AMD wins high praise for AI advancements as its stock soars 6%

While Advanced Micro Devices Inc. shares didn’t enjoy a Wednesday bump during the company’s artificial-intelligence event, they were rallying sharply Thursday as analysts reflected on the chip maker’s presentation.

Chief Executive Lisa Su and her team “put together one of the most impressive new product event/launches by our reckoning in the last decade, perhaps ever,” Rosenblatt Securities analyst Hans Mosesmann wrote in a note to clients.

The launch of AMD’s
AMD,
+7.09%
MI300X AI/graphics-processing-unit accelerator “was not just a speeds and feeds geek fest (it was that for sure, with AMD claiming superiority in AI inferencing), but an industry movement coalescing around the concept of ‘open’ sourced technologies are preferred (demanded really), to address the insanely fast/accelerating life-changing thing that AI has become,” Mosesmann continued.

Opinion: AMD’s new products represent the first real threat to Nvidia’s AI dominance

He was also impressed by the company’s talk of its software platform ROCm, which he thinks is catching up to Nvidia Corp.’s
NVDA,
+1.54%
CUDA.

“Of course, Nvidia is not going away, and we are quite sure will remain the dominant AI player for years to come but AMD we feel made the case yesterday that they will be an important AI innovator on a secular basis,” Mosesmann noted, as he kept his outperform rating and $200 target price on the stock.

AMD shares were up 6% in Thursday morning trading.

Baird’s Tristan Gerra was also impressed.

“Rapidly unfolding hyperscaler engagements, highly competitive AI architecture specs, along with accelerated new product roadmap, bode well for share gains and continued acceleration in AI-related revenue for AMD beyond 2024, while faster-than-expected rate of adoption so far could potentially drive upside in the AI revenue outlook for 2024, in our view,” he wrote.

Read: Nvidia and Microsoft CEOs say industrial companies will benefit most from AI. Here are stocks to put on your watch list.

Gerra also sees the potential for “high-volume deployments,” thanks to the “significant software milestones” AMD is showing. He rates the stock at outperform with a $125 target price.

TD Cowen’s Matthew Ramsay said that AMD’s event reinforced his belief that the company “is well positioned to meaningfully participate” in the large total addressable market for AI accelerators.

The company called out Microsoft Corp.
MSFT,
-0.01%,
Meta Platforms Inc.
META,
+2.41%
and Oracle Corp.
ORCL,
-0.08%
as customers, announcements that were “strong” but not “surprising,” in Ramsay’s view.

“We remain encouraged that AMD is making an impressive case (and is getting customer support) to provide adaptive computing solutions for both training and inference in increasingly large [generative-AI] infrastructure builds,” he wrote. “We believe this signifies a strong AI strategy of delivering a broad portfolio of [central processing unit], GPU, and [field-programmable gate array] assets, with open software that enables easily deployed AI workloads while leveraging the company’s existing partnerships to accelerate its AI ramps at-scale.”

Ramsay has an outperform rating and $130 target price on AMD shares.

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December 7, 2023

Nvidia ends an earnings recession and is helping to reshape corporate profits

With yet another blowout earnings report, Nvidia Corp. has ended an earnings recession in the U.S. and helped to solidify the continuation of a drastic change to corporate profits.

Nvidia NVDA on Tuesday rode enduring demand for hardware that is essential for artificial-intelligence tasks to yet another record quarter, as revenue tripled and profit zoomed more than 1,300% higher year over year. Nvidia recorded earnings of more than $9 billion in just three months, a total it had never achieved in a full year before 2022.

…