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  • Why investors are no longer rewarding earnings beats, according to Goldman Sachs

    Why investors are no longer rewarding earnings beats, according to Goldman Sachs

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  • Import prices climb 0.8% in January, up 0.7% minus fuel

    Import prices climb 0.8% in January, up 0.7% minus fuel

    Story developing. Stay tuned for updates here.

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  • Jury says Trump must pay additional $83M to E. Jean Carroll in defamation case

    Jury says Trump must pay additional $83M to E. Jean Carroll in defamation case


    NEW YORK — A jury has awarded an additional $83.3 million to former advice columnist E. Jean Carroll, who says former President Donald Trump damaged her reputation by calling her a liar after she accused him of sexual assault.

    The verdict was delivered Friday by a seven-man, two-woman jury in a trial regularly attended by Trump, who abruptly left the courtroom during closing arguments by Carroll’s lawyer, only to later return.

    Carroll smiled as the verdict was read. By then, Trump had left the building in his motorcade.

    It was the second time in nine months that a jury returned a verdict related to Carroll’s claim that a flirtatious, chance encounter with Trump in 1996 at a Bergdorf Goodman store ended violently. She said Trump slammed her against a dressing room wall, pulled down her tights and forced himself on her.

    In May, a different jury awarded Carroll $5 million. It found Trump not liable for rape, but responsible for sexually abusing Carroll and then defaming her by claiming she made it up. He is appealing that award.

    Trump skipped the first trial. He later expressed regret for not attending and insisted on testifying in the second trial, though the judge limited what he could say, ruling he had missed his chance to argue that he was innocent. He spent only a few minutes on the witness stand Thursday, during which he denied attacking Carroll, then left court grumbling, “This is not America.”

    This new jury was only asked how much Trump, 77, should pay Carroll, 80, for two statements he made as president when he answered reporters’ questions after excerpts of Carroll’s memoir were published in a magazine — damages that couldn’t be decided earlier because of legal appeals. Jurors were not asked to re-decide the issue of whether the sex attack actually happened.

    Carroll’s attorneys had requested $24 million in compensatory damages and “an unusually high punitive award.”

    Her lawyer, Roberta Kaplan, urged jurors in her closing argument Friday to punish Trump enough that he would stop a steady stream of public statements smearing Carroll as a liar and a “whack job.”

    Trump shook his head vigorously as Kaplan spoke, then suddenly stood and walked out, taking Secret Service agents with him. His exit came only minutes after the judge, without the jury present, threatened to send Trump attorney Alina Habba to jail for continuing to talk when he told her she was finished.

    “You are on the verge of spending some time in the lockup. Now sit down,” the judge told Habba, who immediately complied.

    The trial reached its conclusion as Trump marches toward winning the Republican presidential nomination a third consecutive time. He has sought to turn his various trials and legal vulnerabilities into an advantage, portraying them as evidence of a weaponized political system.

    Though there’s no evidence that President Joe Biden or anyone in the White House has influenced any of the legal cases against him, Trump’s line of argument has resonated with his most loyal supporters who view the proceedings with skepticism.

    Carroll testified early in the trial that Trump’s public statements had led to death threats.

    “He shattered my reputation,” she said. “I am here to get my reputation back and to stop him from telling lies about me.”

    She said she’d had an electronic fence installed around the cabin in upstate New York where she lives, warned neighbors of the threats and bought bullets for a gun she keeps by her bed.

    “Previously, I was known as simply as a journalist and had a column, and now I’m known as the liar, the fraud, and the whack job,” Carroll testified.

    Trump’s lawyer, Habba, told jurors that Carroll had been enriched by her accusations against Trump and achieved fame she had craved. She said no damages were warranted.

    To support Carroll’s request for millions in damages, Northwestern University sociologist Ashlee Humphreys told the jury that Trump’s 2019 statements had caused between $7.2 million and $12.1 million in harm to Carroll’s reputation.

    When Trump finally testified, Kaplan gave him little room to maneuver, because Trump could not be permitted to try to revive issues settled in the first trial.

    “It is a very well-established legal principle in this country that prevents do-overs by disappointed litigants,” Kaplan said.

    “He lost it and he is bound. And the jury will be instructed that, regardless of what he says in court here today, he did it, as far as they’re concerned. That is the law,” Kaplan said shortly before Trump testified.

    After he swore to tell the truth, Trump was asked if he stood by a deposition in which he called Carroll a “liar” and a “whack job.” He answered: “100 percent. Yes.”

    Asked if he denied the allegation because Carroll made an accusation, he responded: “That’s exactly right. She said something, I consider it a false accusation.” Asked if he ever instructed anyone to hurt Carroll, he said: “No. I just wanted to defend myself, my family, and frankly, the presidency.”

    The judge ordered the jury to disregard the “false accusation” comment and everything Trump said after “No” to the last question.

    Earlier in the trial, Trump tested the judge’s tolerance. When he complained to his lawyers about a “witch hunt” and a “con job” within earshot of jurors, Kaplan threatened to eject him from the courtroom if it happened again. “I would love it,” Trump said. Later that day, Trump told a news conference Kaplan was a “nasty judge.”



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  • U.K. police arrest six people in plan to disrupt London Stock Exchange

    U.K. police arrest six people in plan to disrupt London Stock Exchange

    Six people are in custody on Sunday as Metropolitan Police detectives investigate a plot to disrupt the London Stock Exchange, authorities said.

    The police said the arrests were made in Brighton, Liverpool, and London.

    In a statement, the Metropolitan Police in the U.K. said the allegations are that activists from the Palestine Action group were intending to target the LSE on Monday, “causing damage and ‘locking on’ in an effort to prevent the building opening for trading.”

    A representative from the LSE said they had no comment but noted that no trading takes place at London Stock Exchange itself. Equity trading is fully electronic, and there hasn’t been a physical trading floor since 1986.

    A representative from Palestine Action said in an email: “The London Stock Exchange raise billions of pounds for apartheid Israel and trade shares in weapons manufacturers which arm Israel’s genocide of the Palestinian people. Whilst Britain remains complicit in the brutal colonisation of Palestine, our direct action campaign will not be deterred.” 

    The arrests were made earlier Sunday, the police said. The Metropolitan Police added that they are in touch with City of London Police and other forces in the U.K. after a suggestion that this was one part of a planned week of action “to ensure that appropriate resources are in place to deal with any disruption.”

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  • U.S., British launch massive retaliatory strike against Houthi rebels in Yemen

    U.S., British launch massive retaliatory strike against Houthi rebels in Yemen

    WASHINGTON — The U.S. and British militaries were bombing more than a dozen sites used by the Iranian-backed Houthis in Yemen on Thursday, in a massive retaliatory strike using warship-launched Tomahawk missiles and fighter jets, several U.S. officials told The Associated Press. The military targets included logistical hubs, air defense systems and weapons storage locations, they said.

    Associated Press journalists in Yemen’s capital, Sanaa, heard four explosions early Friday local time but saw no sign of warplanes. Two residents of Hodieda, Amin Ali Saleh and Hani Ahmed, said they heard five strong explosions. Hodieda lies on the Red Sea and is the largest port city controlled by the Houthis.

    Oil prices
    CL.1,
    +1.99%

    jumped more than 2% immediately after news of the attacks, on fears that a wider Middle East war could imperil oil production and shipments.

    The strikes marked the first U.S. military response to what has been a persistent campaign of drone and missile attacks on commercial ships since the start of the Israel-Hamas. The coordinated military assault comes just a week after the White House and a host of partner nations issued a final warning to the Houthis to cease the attacks or face potential military action. The officials confirmed the strikes on condition of anonymity to discuss military operations.

    The warning appeared to have had at least some short-lived impact, as attacks stopped for several days. On Tuesday, however, the Houthi rebels fired their largest-ever barrage of drones and missiles targeting shipping in the Red Sea, with U.S. and British ships and American fighter jets responding by shooting down 18 drones, two cruise missiles and an anti-ship missile. On Thursday, the Houthis fired an anti-ship ballistic missile into the Gulf of Aden, which was seen by a commercial ship but did not hit the ship.

    The rebels, who have carried out 27 attacks involving dozens of drones and missiles just since Nov. 19, said Thursday that any attack by American forces on its sites in Yemen will spark a fierce military response.

    “The response to any American attack will not only be at the level of the operation that was recently carried out with more than 24 drones and several missiles,” said Abdel Malek al-Houthi, the group’s supreme leader, during an hour-long speech. “It will be greater than that.”

    The Houthis say their assaults are aimed at stopping Israel’s war on Hamas in the Gaza Strip. But their targets increasingly have little or no connection to Israel and imperil a crucial trade route linking Asia and the Middle East with Europe.

    Meanwhile, the U.N. Security Council passed a resolution Wednesday that demanded the Houthis immediately cease the attacks and implicitly condemned their weapons supplier, Iran. It was approved by a vote of 11-0 with four abstentions — by Russia, China, Algeria and Mozambique.

    Britain’s participation in the strikes underscored the Biden administration’s effort to use a broad international coalition to battle the Houthis, rather than appear to be going it alone. More than 20 nations are already participating in a U.S.-led maritime mission to increase ship protection in the Red Sea.

    U.S. officials for weeks had declined to signal when international patience would run out and they would strike back at the Houthis, even as multiple commercial vessels were struck by missiles and drones, prompting companies to look at rerouting their ships.

    On Wednesday, however, U.S. officials again warned of consequences.

    “I’m not going to telegraph or preview anything that might happen,” Secretary of State Antony Blinken told reporters during a stop in Bahrain. He said the U.S. has made clear “that if this continues as it did yesterday, there will be consequences. And I’m going to leave it at that.”

    The Biden administration’s reluctance over the past several months to retaliate reflected political sensitivities and stemmed largely from broader worries about upending the shaky truce in Yemen and triggering a wider conflict in the region. The White House wants to preserve the truce and has been wary of taking action in Yemen that could open up another war front.

    MarketWatch contributed to this report.

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  • U.S. stocks little changed in cautious trading ahead of inflation report, bank earnings

    U.S. stocks little changed in cautious trading ahead of inflation report, bank earnings

    U.S. stock indexes were edging higher on Wednesday with technology stocks looking to extend gains ahead of the December inflation report, which is expected to shed more direct light on when the Federal Reserve could dial back its two-year-long effort to tighten monetary policy and cool the economy.

    How are stock indexes trading

    • The S&P 500
      SPX
      rose 8 points, or 0.2%, to 4,764

    • The Dow Jones Industrial Average
      DJIA
      was up 38 points, or 0.1%, to 37,562

    • The Nasdaq Composite
      COMP
      gained 43 points, or 0.3%, to 14,901.

    On Tuesday, the Dow industrials fell 0.4%, to 37,525, while the S&P 500 declined 0.2%, to 4,757, and the Nasdaq Composite gained less than 0.1%, to 14,858.

    What’s driving markets

    Inflation and its impact on bond markets and the Federal Reserve’s monetary-policy trajectory are the primary focus for markets this week as investors remain on hold ahead of Thursday’s December inflation reading and high-profile corporate earnings reports on Friday, when some of the big banks will kick off the fourth-quarter 2023 earnings season.

    The S&P 500 sits less than 0.7% shy of its record high of 4796.6 touched a little over two years ago, after rallying strongly in the last few months primarily on hopes that easing inflation will allow the Fed to lower interest rates sooner and faster than the markets previously anticipated.

    The yield on the 10-year Treasury
    BX:TMUBMUSD10Y,
    the benchmark for borrowing costs, has fallen from 5% in October to 4.014% on Wednesday.

    But for this bullish narrative to play out, inflation must be seen continuing to fall back to the central bank’s 2% target. That’s why great importance is therefore being placed on the consumer-price index for December, which will be published at 8:30 a.m. Eastern on Thursday.

    See: These traders bet on surprise blip higher in key December inflation reading

    Economists forecast that annual headline CPI inflation inched up to 3.2% last month from 3.1% in November. The core reading, which strips out more volatile items like food and energy, is expected to fall from 4% to 3.8%.

    Adam Phillips, director of portfolio strategy at EP Wealth Advisors, said the CPI report may give investors enough confidence that the disinflation is likely to continue, even if the price levels are “still a very long way from anything that is considered healthy.”

    However, he cautioned that the economy has “certain factors” that are beyond the Fed’s control, such as the volatility in supply chains and growing geopolitical risks, as well as a potential resurgence in inflation, he told MarketWatch via phone on Wednesday.

    “[E]quities have remained broadly range-bound since just before Christmas, with little to push them in either direction,” said Jim Reid, strategist at Deutsche Bank.

    “That might change soon, since we’ve got the U.S. CPI print tomorrow, and then the start of earnings season on Friday, but for now at least, there’s been few headlines for investors to latch onto, just a bit of indigestion after over exuberance before New Year left markets with a little bit of an extended hangover,” Reid added.

    In U.S. economic data, the wholesale inventories declined 0.2% in November, in line with Wall Street expectations, as manufacturers continue to juggle with a fragile economy, according to the Commerce Department.

    New York Fed President John Williams will speak in White Plains, N.Y., at 3:15 p.m. Eastern time.

    Companies in focus

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  • The former bond king, Bill Gross, says 10-year Treasury is ‘overvalued’

    The former bond king, Bill Gross, says 10-year Treasury is ‘overvalued’

    The former bond king doesn’t like the fixed-income security that’s the lynchpin of the financial world.

    Bill Gross, the retired fund manager and co-founder of Pacific Investment Management, took to the social-media service X to say that the 10-year Treasury
    BX:TMUBMUSD10Y
    is “overvalued” with a yield of 4%. Yields move in the opposite direction to prices.

    Through Monday, the yield on the 10-year Treasury has fallen 99 basis points from its late October peak.

    He said the 10-year Treasury inflation-protected yield at 1.80% is the better choice. “If you need to buy bonds. I don’t,” said Gross.

    Gross also continued to talk of his idea to go long 2-year bonds
    BX:TMUBMUSD02Y
    while shorting the 10-year. “Stick with the return to a positive 10 year/2 year yield curve. Earns carry while you wait,” he said. In previous posts, he talked of making such trades via Treasury futures contracts.

    Gross said he was taking a bow for his recommendation of regional bank stocks six months ago and mortgage REITs in December. The SPDR S&P Regional Banking ETF
    KRE
    has climbed 49% from its May 4 low, and the iShares Mortgage Real Estate ETF
    REM
    has gained 21% from its late October low. Gross in November highlighted Annaly Capital Management
    NLY,
    +2.62%

    and AGNC Investment Corp.
    AGNC,
    +3.75%

    as mortgage REITs he likes for 2024.

    Gross said he still likes Capri Holdings
    CPRI,
    -0.39%

    as a merger arbitrage target. Tapestry
    TPR,
    +2.04%

    in August agreed to buy Capri for $57 per share, and on Monday, Capri closed at $50.49.

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  • Supreme Court to decide if Trump can be kept off 2024 election ballots

    Supreme Court to decide if Trump can be kept off 2024 election ballots

    WASHINGTON — The Supreme Court said Friday it will decide whether former President Donald Trump can be kept off the ballot because of his efforts to overturn his 2020 election loss, inserting the court squarely in the 2024 presidential campaign.

    The justices acknowledged the need to reach a decision quickly, as voters will soon begin casting presidential-primary ballots across the country. The court agreed to take up a case from Colorado stemming from Trump’s role in the events that culminated in the Jan. 6, 2021, attack on the U.S. Capitol.

    Arguments will be held in early February.

    The court will be considering for the first time the meaning and reach of a provision of the 14th Amendment barring some people who “engaged in insurrection” from holding public office. The amendment was adopted in 1868, following the Civil War. It has been so rarely used that the nation’s highest court had no previous occasion to interpret it.

    Colorado’s Supreme Court, by a 4-3 vote, ruled last month that Trump should not be on the Republican primary ballot. The decision was the first time the 14th Amendment was used to bar a presidential contender from the ballot.

    Trump is separately appealing to state court a ruling by Maine’s Democratic secretary of state, Shenna Bellows, that he was ineligible to appear on that state’s ballot over his role in the Capitol attack. Both the Colorado Supreme Court and the Maine secretary of state’s rulings are on hold until the appeals play out.

    Three of the nine Supreme Court justices were appointed by Trump, though they have repeatedly ruled against him in 2020 election-related lawsuits, as well as his efforts to keep documents related to Jan. 6 and prevent his tax returns from being turned over to congressional committees.

    At the same time, Justices Amy Coney Barrett, Neil Gorsuch and Brett Kavanaugh have been in the majority of conservative-driven decisions that overturned the five-decade-old constitutional right to abortion, expanded gun rights and struck down affirmative action in college admissions.

    Some Democratic lawmakers have called on another conservative justice, Clarence Thomas, to step aside from the case because of his wife’s support for Trump’s effort to overturn the results of the election, which he lost to Democrat Joe Biden. Thomas is unlikely to agree. He has recused himself from only one other case related to the 2020 election, involving former law clerk John Eastman, and so far the people trying to disqualify Trump haven’t asked Thomas to recuse.

    The 4-3 Colorado decision cites a ruling by Gorsuch when he was a federal judge in that state. That Gorsuch decision upheld Colorado’s move to strike a naturalized citizen from the state’s presidential ballot because he was born in Guyana and didn’t meet the constitutional requirements to run for office. The court found that Trump likewise doesn’t meet the qualifications due to his role in the U.S. Capitol attack on Jan. 6, 2021. That day, the Republican president had held a rally outside the White House and exhorted his supporters to “fight like hell” before they walked to the Capitol.

    The two-sentence provision in Section 3 of the 14th Amendment states that anyone who swore an oath to uphold the constitution and then “engaged in insurrection” against it is no longer eligible for state or federal office. After Congress passed an amnesty for most of the former confederates the measure targeted in 1872, the provision fell into disuse until dozens of suits were filed to keep Trump off the ballot this year. Only the one in Colorado was successful.

    Trump had asked the court to overturn the Colorado ruling without even hearing arguments. “The Colorado Supreme Court decision would unconstitutionally disenfranchise millions of voters in Colorado and likely be used as a template to disenfranchise tens of millions of voters nationwide,” Trump’s lawyers wrote.

    They argue that Trump should win on many grounds, including that the events of Jan. 6 did not constitute an insurrection. Even if it did, they wrote, Trump himself had not engaged in insurrection. They also contend that the insurrection clause does not apply to the president and that Congress must act, not individual states.

    Critics of the former president who sued in Colorado agreed that the justices should step in now and resolve the issue, as do many election law experts.

    “This case is of utmost national importance. And given the upcoming presidential-primary schedule, there is no time to wait for the issues to percolate further. The Court should resolve this case on an expedited timetable, so that voters in Colorado and elsewhere will know whether Trump is indeed constitutionally ineligible when they cast their primary ballots,” lawyers for the Colorado plaintiffs told the Supreme Court.

    The issue of whether Trump can be on the ballot is not the only matter related to the former president or Jan. 6 that has reached the high court. The justices last month declined a request from special counsel Jack Smith to swiftly take up and rule on Trump’s claims that he is immune from prosecution in a case charging him with plotting to overturn the 2020 presidential election, though the issue could be back before the court soon depending on the ruling of a Washington-based appeals court.

    And the court has said that it intends to hear an appeal that could upend hundreds of charges stemming from the Capitol riot, including against Trump.

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  • Japan issues tsunami warnings after dozens of quakes, including a 7.6 magnitude, off western coast

    Japan issues tsunami warnings after dozens of quakes, including a 7.6 magnitude, off western coast

    TOKYO (AP) — Japan issued tsunami alerts and ordered evacuations following a series of earthquakes on Monday that started a fire and trapped people under rubble on the west coast of its main island.

    The Japan Meterological Agency reported quakes off the coast of Ishikawa and nearby prefectures shortly after 4 p.m., one of them with a preliminary magnitude of 7.6.

    The agency issued a major tsunami warning for Ishikawa and lower-level tsunami warnings or advisories for the rest of the western coast of the island of Honshu, as well as the northernmost of its main islands, Hokkaido.

    Japanese public broadcaster NHK TV warned torrents of water could reach as high as 5 meters (16.5 feet) and urged people to flee to high land or a top of a nearby building as quickly as possible.

    NHK said the tsunami waves could keep returning, and warnings were continuing to be aired nearly an hour after the initial alert. Several aftershocks also rocked the region.

    Government spokesman Yoshimasa Hayashi told reporters that nuclear plants in the area had not reported any irregularities. But he said it was critical for people in coastal areas to get away from the oncoming tsunami.

    “Every minute counts. Please evacuate to a safe area immediately,” he said.

    A tsunami of about 3 meters (about 10 feet) high was expected to hit Niigata and other prefectures on the western coast of Japan, and the waves were confirmed to have reached parts of the coastline.

    At least six homes were damaged by the quakes, with people trapped inside. A fire has broken out in Wajima city, Ishikawa Prefecture, and electricity is out for more than 30,000 households, Hayashi said.

    He said no reports of deaths or injuries had been confirmed, saying the situation was still unclear. Japan’s military was taking part in the rescue efforts, he said.

    Japanese media footage showed people running through the streets, and red smoke spewing from a fire in a residential neighborhood. Photos showed a crowd of people, including a woman with a baby on her back, standing by huge cracks that had ripped through the pavement.

    Bullet trains in the area were halted. Parts of the highway were also closed, and water pipes had burst, according to NHK. Some cell phone services in the region weren’t working.

    The Meteorological Agency said in a nationally broadcast news conference that more major quakes could hit the area over the next week, especially in the next two or three days.

    More than a dozen strong quakes had been detected in the region, with risks of setting off landslides and houses collapsing, according to the agency.

    Takashi Wakabayashi, a worker at a convenience store in Ishikawa Prefecture, said some items had tumbled from the shelves, but the biggest problem was the huge crowd of people who had shown up to stock up on bottled water, rice balls and bread.

    “We have customers at three times the level of usual,” he said.

    Tsunami warnings were also issued for parts of North Korea and Russia. Russian officials issued a tsunami alert for the island of Sakhalin, warning that areas across the island’s west coast could be affected by the waves.

    In nearby South Korea, the weather agency urged residents in some eastern coastal towns to watch for possible changes in sea levels. Tsunami waves that hit later later can be bigger than the initial ones.

    The Japanese government has set up a special emergency center to gather information on the quakes and tsunami and relay them speedily to residents to ensure safety, Prime Minister Fumio Kishida told reporters.

    He reiterated the warning for immediate evacuation in affected areas.

    Japan is an extremely quake-prone nation. In March 2011, a major quake and tsunami caused meltdowns at a nuclear plant. Government spokesman Hayashi told reporters that nuclear plants in the affected area had not reported any irregularities on Monday.

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  • Falling behind on retirement savings? 4 steps to get back on track in 2024.

    Falling behind on retirement savings? 4 steps to get back on track in 2024.

    For a substantial number of people approaching retirement, the future looks grim. Their savings rate is low, their anxiety level is high and they aren’t even sure they’ll be able to retire at all.

    More than one in five adults — 22% — have no retirement savings, according to AARP. Meanwhile, 64% are worried that they will not have enough money in their later years, and 47% of adults who are not yet retired think they will need to work at least part-time in retirement for financial reasons, AARP said.

    “It’s a public health crisis. Many people don’t have any retirement savings. People feel lousy — that they haven’t done enough — and say, ‘There’s nothing I can do about it.’ They put their head in the sand and try not to think about it,” said Mary Liz Burns, senior director of communications strategy at AARP.

    To raise awareness and in hopes of reversing this trend, AARP, the lobbying group focused on issues facing older adults, has launched a public service campaign with the Ad Council called “This is Pretirement.” The campaign is aimed at people who might feel invisible as they grapple with the stress of financing retirement, Burns said.

    “The average American is having a tough time saving. They’re not alone — there are many, many people in that same position,” Burns said. “There’s no judgment about what you have or haven’t done.”

    The multi-year “pretirement” campaign started in November and will continue to roll out to more markets and media outlets including TV, radio and social media. 

    The ads encourage pre-retirees to face the daunting aspects of saving for retirement. There’s also a website, ThisIsPretirement.org, that features free tips, resources and tools. Near-retirees can take a quiz and get a recommended action plan.

    “Think about actions you’re taking that may be harming you, such as carrying over credit-card debt each month. Think about the steps you can take to start,” Burns said.

    “Start somewhere. Anything is better than being frozen.”

    Where to start? 

    First, experts say you should create a budget that includes your income and all your expenses. You can do this on your own or with a financial adviser. 

    “Make sure you have a plan. If you don’t do the planning, you really won’t have a successful retirement,”  said David Schneider, founder of Schneider Wealth Strategies.

    JB Beckett, founder of the Beckett Financial Group, suggested working with a financial adviser who can examine your tax strategies, insurance coverage, Social Security strategy and healthcare expenses with an eye toward longevity and the unknown.

    And Joel Russo, founder of N.J. Retirement Planning, noted that retirement can last a long time. “A lifetime these days can be 100-plus years. People think retirement isn’t going to be that long, but it can last 30 years or more. That’s hard to finance without a comprehensive plan,” he said.

    Advisers need to look at a client’s whole situation to see the reasons someone may not be saving enough money.

    “People aren’t saving enough. But why aren’t they saving enough? What else is going on for them that they can’t?” Russo said. Getting an overview of your budget and your expenses can show you where your money is going.

    Catch up on contributions

    “Your 50s are a really important time to be very serious,” Schneider said. “Hunker down and get serious. Every investment needs to be prudent and diversified. Increase any savings, if possible. Make catch-up contributions, if possible.”

    Starting at age 50, you can make extra investments called catch-up contributions to your 401(k) and individual retirement accounts. In 2024, the 401(k) contribution limit will be $23,000, but catch-up contributions will allow you to save an additional $7,500. For IRAs, the contribution limit is $7,000, with a catch-up contribution of $1,000.

    Check in with Social Security

    As you work on your long-term plan, get your Social Security statement from SSA.gov and check it for errors. This will let you make sure you’re receiving credit for all your work over the years and find out where you stand with Social Security benefits, Schneider said.

    And because the last 10 to 15 years of your career are often peak earnings years, Beckett said to take advantage of savings opportunities to maximize your retirement efforts and minimize your expenditures.

    “You’re entering that retirement red zone in the last 10 to 15 years. If you haven’t saved enough, [then] cut expenses and save as much as you can,” he said. “Be careful not to spend too much. Don’t celebrate and buy a car when you get a promotion and end up with a $1,000 car payment. Use that extra money to sock away more money. Use science and math when it comes to money. Don’t get emotional with money.”

    It’s also crucial to prepare for the cost of long-term care.

    “The one thing that can erode an estate is long-term care,” said Eric Bond, wealth manager with Bond Wealth Management. “You might have $300,000 for long-term care, but that needs to be $500,000. It’s the most unsexy thing in the world to plan for, but you have to.”

    Earn more, save more

    You can also think about leveraging your experience and skills to get a higher-paying job that can help you close that savings gap, Bond said.

    “The best way to save more is to earn more. Try to make as much money as you can. Your job is to get another job that pays more,” he said. “In the past, pensions would keep people at companies longer. But now you can’t rely on a company that way.”

    Dial up retirement savings

    “Just try saving a little extra,” Bond said. “If you find you’re only eating mac and cheese, scale it back.”

    Bond also cautioned against borrowing or taking out a mortgage to fund your kids’ college education.

    “They can get just as good a job coming out of a state school. College is college. Unless [they’re] going to be a doctor, an attorney or an engineer — fine. But don’t sell your house or downsize to pay for college,” Bond said.

    Being open to continuing to work — even doing part-time or consulting work — can help you stretch your retirement nest egg. And working in your retirement years, if you’re healthy enough to do so, can provide not just extra income, but also routine and stimulation, which can be crucial for mental health.

    In the end, your retirement is likely going to be financed by your own savings and investments. So squirrel away as much as possible.

    “You only get one shot at retirement,” Beckett said. “There’s a retirement crisis out there. People need to save more — and save even more than they think.”  

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  • Maine bars Trump from presidential primary ballot, citing insurrection clause

    Maine bars Trump from presidential primary ballot, citing insurrection clause

    PORTLAND, Maine — Maine’s Democratic secretary of state on Thursday removed former President Donald Trump from the state’s presidential primary ballot under the Constitution’s insurrection clause, becoming the first election official to take action unilaterally as the U.S. Supreme Court is poised to decide whether Trump remains eligible to return to the White House.

    The decision by Secretary of State Shenna Bellows follows a ruling earlier this month by the Colorado Supreme Court that booted Trump from the ballot there under Section 3 of the 14th Amendment. That decision has been stayed until the U.S. Supreme Court decides whether Trump is barred by the Civil War-era provision, which prohibits those who “engaged in insurrection” from holding office.

    The Trump campaign said it would appeal Bellows’ decision to Maine’s state courts, and Bellows suspended her ruling until that court system rules on the case. In the end, it is likely that the nation’s highest court will have the final say on whether Trump appears on the ballot in Maine and in the other states.

    Bellows found that Trump could no longer run for his prior job because his role in the Jan. 6, 2021, attack on the U.S. Capitol violated Section 3, which bans from office those who “engaged in insurrection.” Bellows made the ruling after some state residents, including a bipartisan group of former lawmakers, challenged Trump’s position on the ballot.

    “I do not reach this conclusion lightly,” Bellows wrote in her 34-page decision. “I am mindful that no Secretary of State has ever deprived a presidential candidate of ballot access based on Section 3 of the Fourteenth Amendment. I am also mindful, however, that no presidential candidate has ever before engaged in insurrection.”

    The Trump campaign immediately slammed the ruling. “We are witnessing, in real-time, the attempted theft of an election and the disenfranchisement of the American voter,” campaign spokesman Steven Cheung said in a statement.

    Legal experts said that Thursday’s ruling demonstrates the need for the nation’s highest court, which has never ruled on Section 3, to clarify what states can do.

    “It is clear that these decisions are going to keep popping up, and inconsistent decisions reached (like the many states keeping Trump on the ballot over challenges) until there is final and decisive guidance from the U.S. Supreme Court,” Rick Hasen, a law professor at the University of California-Los Angeles, wrote in response to the Maine decision. “It seems a certainty that SCOTUS will have to address the merits sooner or later.”

    While Maine has just four electoral votes, it’s one of two states to split them. Trump won one of Maine’s electors in 2020, so having him off the ballot there, should he emerge as the Republican general election candidate, could have outsized implications in a race that is expected to be narrowly decided.

    That’s in contrast to Colorado, which Trump lost by 13 percentage points in 2020 and where he wasn’t expected to compete in November if he wins the Republican presidential nomination.

    In her decision, Bellows acknowledged that the U.S. Supreme Court will probably have the final word but said it was important she did her official duty.

    That won her praise from the former state lawmakers who filed one of the petitions forcing her to consider the case.

    “Secretary Bellows showed great courage in her ruling, and we look forward to helping her defend her judicious and correct decision in court. No elected official is above the law or our constitution, and today’s ruling reaffirms this most important of American principles,” Republican Kimberly Rosen, independent Thomas Saviello and Democrat Ethan Strimling said in a statement.

    But other Republicans in the state were outraged.

    “This is a sham decision that mimics Third World dictatorships,” Maine’s House Republican leader, Billy Bob Faulkingham, said in a statement. “It will not stand legal scrutiny. People have a right to choose their leaders devoid of mindless decisions by partisan hacks.”

    The Trump campaign on Tuesday requested that Bellows disqualify herself from the case because she’d previously tweeted that Jan. 6 was an “insurrection” and bemoaned that Trump was acquitted in his impeachment trial in the U.S. Senate after the capitol attack. She refused to step aside.

    “My decision was based exclusively on the record presented to me at the hearing and was in no way influenced by my political affiliation or personal views about the events of Jan. 6, 2021,” Bellows told the Associated Press Thursday night.

    Bellows is a former head of the Maine chapter of the American Civil Liberties Union. All seven of the justices of the Colorado Supreme Court, which split 4-3 on whether to become the first court in history to declare a presidential candidate ineligible under Section 3, were appointed by Democrats. Two Washington, D.C.-based liberal groups have launched the most serious prior challenges to Trump, in Colorado and a handful of other states.

    That’s led Trump to contend the dozens of lawsuits nationwide seeking to remove him from the ballot under Section 3 are a Democratic plot to end his campaign. But some of the most prominent advocates have been conservative legal theorists who argue that the text of the Constitution makes the former president ineligible to run again, just as if he failed to clear the document’s age threshold — 35 years old — for the office.

    Likewise, until Bellows’ decision, every top state election official, whether Democrat or Republican, had rejected requests to bar Trump from the ballot, saying they didn’t have the power to remove him unless ordered to do so by a court.

    The timing on the U.S. Supreme Court’s decision is unclear, but both sides want it fast. Colorado’s Republican Party appealed the Colorado high court decision on Wednesday, urging an expedited schedule, and Trump is also expected to file an appeal within the week. The petitioners in the Colorado case on Thursday urged the nation’s highest court to adopt an even faster schedule so it could rule before March 5, known as Super Tuesday, when 16 states, including Colorado and Maine, are scheduled to vote in the Republican presidential nominating process.

    The high court needs to formally accept the case first, but legal experts consider that a certainty. The Section 3 cases seem tailor-made for the Supreme Court, addressing an area of U.S. governance where there’s scant judicial guidance.

    The clause was added in 1868 to keep defeated Confederates from returning to their former positions of power in local and federal government. It prohibits anyone who broke an oath to “support” the Constitution from holding office. The provision was used to bar a wide range of ex-Confederates from positions ranging from local sheriff to Congress, but fell into disuse after an 1872 congressional amnesty for most former Confederates.

    Legal historians believe the only time the provision was used in the 20th Century was in 1919, when it was cited to deny a House seat to a socialist who had opposed U.S. involvement in World War I. But since the Jan. 6 attack, it has been revived.

    Last year, it was cited by a court to remove a rural New Mexico County Commissioner who had entered the Capitol on Jan. 6. One liberal group tried to remove Republican Reps. Madison Cawthorn and Marjorie Taylor Greene from the 2022 ballot under the provision, but Cawthorn lost his primary so his case was thrown out, and a judge ruled for Greene.

    Some critics of the movement to bar Trump warn that the provision could be weaponized in unexpected ways.

    They note that conservatives could argue, for example, that Vice President Kamala Harris is likewise barred from office because she raised bail funds for people arrested during the unrest following George Floyd’s 2020 murder at the hands of Minneapolis police.

    The plaintiffs in Colorado presented historical evidence that even the donation of small sums to money to those seeking to join the Confederacy was grounds for being barred by Section 3. Why, critics have asked, wouldn’t that apply to Democrats like Harris today?

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  • 10-year Treasury yield drops toward 3.8% after market absorbs sale of 5-year notes

    10-year Treasury yield drops toward 3.8% after market absorbs sale of 5-year notes

    U.S. bond yields fell on Wednesday as investors continued to bet inflation will ease and the Federal Reserve will cut interest rates in 2024, with rates extending their drop in the afternoon after the Treasury Department sold a slug of 5-year Treasury notes.

    What’s happening

    • The yield on the 2-year Treasury
      BX:TMUBMUSD02Y
      fell more than 11 basis points to 4.238%. Yields and debt prices move opposite each other.

    • The yield on the 10-year Treasury
      BX:TMUBMUSD10Y
      dropped 9.9 basis points to 3.803%.

    • The yield on the 30-year Treasury
      BX:TMUBMUSD30Y
      declined 8.5 basis points to 3.96%.

    What’s driving markets

    Benchmark U.S. bond yields extended a drop after market participants absorbed a sale of $58 billion in 5-year Treasury notes
    BX:TMUBMUSD05Y.

    Yields had declined as investors continued to bet that the easing of inflation — down to 3.1% in November — means the Federal Reserve will lower borrowing costs next year.

    The auction produced a high yield of 3.801%, down from 4.42% at the last sale of 5-year supply in October. The bid-to-cover ratio — a measure of bids versus the amount on sale — was 2.50, up from 2.46 in the October auction.

    Markets, meanwhile, are pricing in an 85.5% probability that the Fed will leave interest rates unchanged at a range of 5.25% to 5.50% after its next meeting on Jan. 30-31, according to the CME FedWatch tool.

    “A moderation in headline and core inflation has created a pathway for central banks to ease off on restrictive policies,” said Stephen Innes, managing partner at SPI Asset Management.

    “As inflation subsides, the Federal Reserve sees higher real rates becoming increasingly economically unfavorable, possibly reducing the necessity for policy rates to remain in prohibitive territory,” Innes added.

    But the chances of at least a 25 basis point rate cut at the subsequent meeting in March is priced at 84.6%. Indeed, traders reckon that by December 2024, the Fed’s main rate will be at least down to a range of 3.75% to 4.0%.

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  • Dow lands second-highest close ever as stocks build on eight-week winning streak

    Dow lands second-highest close ever as stocks build on eight-week winning streak

    U.S. stocks closed higher Tuesday, building on a streak of eight straight weekly gains as the final, holiday-shortened week of 2023 got under way.

    What happened

    On Friday, stocks finished a choppy pre-holiday trading session mostly higher, with the S&P 500, Dow and Nasdaq each scoring an eighth straight weekly gain. The S&P 500 finished 0.9% away from its record close of 4,796.56, set on Jan. 3, 2022.

    Read:…

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  • Why the 60-40 portfolio is poised to make a comeback in 2024

    Why the 60-40 portfolio is poised to make a comeback in 2024

    Speculation that the 60-40 portfolio may have outlived its usefulness has been rife on Wall Street after two years of lackluster performance.

    But as the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    hovers around 4%, some strategists say the case for allocating a healthy portion of one’s portfolio to bonds hasn’t been this compelling in a long time.

    And with the Federal Reserve penciling three interest-rate cuts next year, investors who seize the opportunity to buy more bonds at current levels could reap rewards for years to come, as waning inflation helps to normalize the relationship between stocks and bonds, restoring bonds’ status as a helpful portfolio hedge during tumultuous times, market strategists and portfolio managers told MarketWatch.

    Add to this is the notion that equity valuations are looking stretched after a stock-market rebound that took many on Wall Street by surprise, and the case for diversification grows even stronger, according to Michael Lebowitz, a portfolio manager at RIA Advisors, who told MarketWatch he has recently increased his allocation to bonds.

    “The biggest difference between 2024 and years past is you can earn 4% on a Treasury bond, which isn’t that far off from the projected return in U.S. stocks right now,” Lebowitz said. “We’re adding bonds to our portfolio because we think yields are going to continue to come down over the next three to six months.”

    See: Case for traditional 60-40 mix of stocks and bonds strengthens amid higher rates, according to Vanguard’s 2024 outlook

    Does 60-40 still make sense?

    Since modern portfolio theory was first developed in the early 1950s, the 60-40 portfolio has been a staple of financial advisers’ advice to their clients.

    The notion that investors should favor diversified portfolios of stocks and bonds is based on a simple principle: bonds’ steady cash flows and tendency to appreciate when stocks are sliding makes them a useful offset for short-term losses in an equity portfolio, helping to mitigate the risks for investors saving for retirement.

    However, market performance since the financial crisis has slowly undermined this notion. The bond-buying programs launched by the Fed and other central banks following the 2008 financial crisis caused bond prices to appreciate, while driving yields to rock-bottom levels, muting total returns relative to stocks.

    At the same time, the flood of easy money helped drive a decadelong equity bull market that began in 2009 and didn’t end until the advent of COVID-19 in early 2020, FactSet data show.

    More recently, bonds failed to offset losses in stocks in 2022. And in 2023, U.S. equity benchmarks such as the S&P 500
    SPX
    have still outperformed U.S. bond-market benchmarks, despite bonds offering their most attractive yields in years, according to Dow Jones Market Data.

    The Bloomberg U.S. Aggregate Total Return Index
    AGG
    has returned 4.6% year-to-date, according to Dow Jones data, compared with a more than 25% return for the S&P 500 when dividends are included.

    But this could be about to change, according to analysts at Deutsche Bank. The team found that, going back decades, the relationship between stocks and bonds has tended to normalize once inflation has slowed to an annual rate of 3% based on the CPI Index.

    DEUTSCHE BANK

    The CPI Index for November had core inflation running at 4% year over year, a level it has been stuck at for the past several months. The Fed’s projections have inflation continuing to wane in 2024.

    Staff economists at the central bank expect the core PCE Price Index, which the Fed prefers to the CPI gauge, to slow to 2.4% by the end of next year. If that comes to pass, investors should see the inverse relationship between stocks and bonds return, according to Lebowitz and others.

    A window of opportunity

    The dismal performance of 60-40 portfolios over the past two years has inspired a wave of Wall Street think pieces questioning whether it still makes sense for contemporary investors.

    A team of academics led by Aizhan Anarkulova at Emory University in November presented findings showing that over a lifetime, investors would have reaped higher returns via a portfolio consisting of 100% exposure to stocks, split between foreign and domestic markets.

    But fixed-income strategists at Deutsche and Goldman Sachs Group, as well as others on Wall Street, say investors wouldn’t be well-served by excluding bonds from their portfolio, particularly with yields at current levels.

    Rob Haworth, senior investment strategy director at U.S. Bank’s wealth-management business, says investors now have an opportunity to lock in attractive returns for decades to come, ensuring that the bonds in their portfolios will, at the very least, deliver a steady stream of income that would reduce any losses in stocks or declines in bond prices.

    There is, however, one catch: with the Fed expected to cut interest rates, that window could quickly close.

    “The problem is, for investors in cash, the Fed’s just told you that is not going to last. I think that means it is time to start thinking about your long-term plan,” Haworth said.

    Read: Fed could be the Grinch who ‘stole’ cash earning 5%. What a Powell pivot means for investors.

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  • U.S. stocks struggle to resume climb as Dow edges higher after notching 5th straight record close

    U.S. stocks struggle to resume climb as Dow edges higher after notching 5th straight record close

    U.S. stock indexes were higher on Wednesday as Wall Street tried to build on their year-end rally with a fresh record in sight for the S&P 500 index.

    How are stock indexes trading

    • The S&P 500
      SPX
      was inching up 3 points, leaving it nearly flat, at 4,771

    • The Dow Jones Industrial Average
      DJIA
      was rising 15 points, leaving it nearly flat, at 37,570

    • The Nasdaq Composite
      COMP
      was edging up 35 points, or 0.2%, to 15,038

    On Tuesday, the Dow booked a fifth straight record close, while the S&P 500 rose and the Nasdaq extended its winning streak to a ninth day.

    What’s driving markets

    U.S. stocks were edging higher on Wednesday with the S&P 500 less than 1% shy of the all-time closing high of 4796.56 it recorded at the start of January 2022, while the Dow industrials and Nasdaq were struggling to extend their nine consecutive daily gains.

    The Wall Street large-cap benchmark S&P 500 has jumped 24.3% this year, partially powered by hopes that the U.S. economy has not been too badly damaged by the Federal Reserve’s ratcheting up of interest rates to cool inflation.

    The latest leg of the rally reflects hopes that with inflation back down to 3.1%, the central bank will begin quickly trimming borrowing costs next year. Not even an concerted effort by Fed officials to counter the market’s rate-cut optimism has damped trader’s ardor.

    This dismissal of less-dovish Fedspeak has left some observers bemused.

    “Investors are dreaming of aggressive rate cuts in an environment of strong economic growth, and that is not the right recipe for easing inflation and keeping it sufficiently low,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “The robust economic data and high earnings expectations are not compatible with a dovish Fed,” she said.

    See: Why the 60-40 portfolio is poised to make a comeback in 2024

    Perhaps the current bullishness is also reflective of seasonal trends, with optimism about a festive bounce underpinning stocks. The “Santa Claus Rally” period stretches from the last five trading days of the year and first two trading days of the new year, according to the Stock Trader’s Almanac.

    Since 1950, the S&P 500 has averaged a gain of 1.32% and closed higher 78.1% of the time over that period, according to Dow Jones Market Data.

    SOURCE: DOW JONES MARKET DATA

    In U.S. economic data, existing-home sales rose 0.8% in November to 3.82 million, the National Association of Realtors said on Wednesday. Sales of previously owned homes unexpectedly inched up last month, snapping a five-month slump as easing mortgage rates encouraged some U.S. homebuyers.

    Meanwhile, U.S. consumer confidence index rose to 110 in December, up from a downwardly revised 101 in the previous month, the Conference Board said Wednesday.

    “The consumer is feeling pretty well as rates move lower, employers add to their payroll, and income expectations improve,” said Jeffrey J. Roach, chief economist at LPL Financial. “So far, investors have a green light as they merge into the new year.”

    That said, investors will continue seeking guidance from more economic data due later this week that may provide more clarity on the Fed’s interest-rate path in 2024. A revision of third-quarter GDP print is expected on Thursday morning, followed by Friday’s personal consumption expenditure (PCE) inflation report — the Fed’s preferred inflation gauge.

    Companies in focus

    • Shares of Alphabet Inc.
      GOOGL,
      +2.82%

      were jumping 3.3% on Wednesday following a report that said its Google unit plans to reorganize a large part of its advertising sales unit.

    • Shares of FedEx Corp.
      FDX,
      -10.56%

      were slumping 11% after the package-delivery giant trimmed its full-year sales forecast, amid continued concerns about subdued shipping demand through the peak holiday season.

    • Shares of General Mills Inc. 
      GIS,
      -2.26%

       were off 2.8% after the consumer-foods company reported fiscal second-quarter profit that beat expectations, while revenue missed and the full-year outlook as consumers continue “stronger-than-expected value-seeking behaviors.” 

    • Toro Corp.’s stock 
      TORO,
      -2.15%

      was down 2.2% despite the lawn mower company’s fourth-quarter profit and revenue beat analyst estimates. 

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  • Colorado Supreme Court bars Trump from the state’s primary ballot

    Colorado Supreme Court bars Trump from the state’s primary ballot

    DENVER — A divided Colorado Supreme Court on Tuesday declared former President Donald Trump ineligible for the White House under the U.S. Constitution’s insurrection clause and removed him from the state’s presidential primary ballot, setting up a likely showdown in the nation’s highest court to decide whether the front-runner for the GOP nomination can remain in the race.

    The decision from a court whose justices were all appointed by Democratic governors marks the first time in history that Section 3 of the 14th Amendment has been used to disqualify a presidential candidate.

    “A majority of the court holds that Trump is disqualified from holding the office of president under Section 3 of the 14th Amendment,” the court wrote in its 4-3 decision.

    Colorado’s highest court overturned a ruling from a district court judge who found that Trump incited an insurrection for his role in the Jan. 6, 2021, attack on the Capitol, but said he could not be barred from the ballot because it was unclear that the provision was intended to cover the presidency.

    The court stayed its decision until Jan. 4, or until the U.S. Supreme Court rules on the case.

    “We do not reach these conclusions lightly,” wrote the court’s majority. “We are mindful of the magnitude and weight of the questions now before us. We are likewise mindful of our solemn duty to apply the law, without fear or favor, and without being swayed by public reaction to the decisions that the law mandates we reach.”

    Trump’s attorneys had promised to appeal any disqualification immediately to the nation’s highest court, which has the final say about constitutional matters.

    “The Colorado Supreme Court issued a completely flawed decision tonight and we will swiftly file an appeal to the United States Supreme Court and a concurrent request for a stay of this deeply undemocratic decision,” Trump campaign spokesman Steven Cheung said in a statement Tuesday night.

    Trump lost Colorado by 13 percentage points in 2020 and doesn’t need the state to win next year’s presidential election. But the danger for the former president is that more courts and election officials will follow Colorado’s lead and exclude Trump from must-win states.

    Colorado officials say the issue must be settled by Jan. 5, the deadline for the state to print its presidential primary ballots.

    Dozens of lawsuits have been filed nationally to disqualify Trump under Section 3, which was designed to keep former Confederates from returning to government after the Civil War. It bars from office anyone who swore an oath to “support” the Constitution and then “engaged in insurrection or rebellion” against it, and has been used only a handful of times since the decade after the Civil War.

    The Colorado case is the first where the plaintiffs succeeded. After a weeklong hearing in November, District Judge Sarah B. Wallace found that Trump indeed had “engaged in insurrection” by inciting the Jan. 6 attack on the Capitol, and her ruling that kept him on the ballot was a fairly technical one.

    Trump’s attorneys convinced Wallace that, because the language in Section 3 refers to “officers of the United States” who take an oath to “support” the Constitution, it must not apply to the president, who is not included as an “officer of the United States” elsewhere in the document and whose oath is to “preserve, protect and defend” the Constitution.

    The provision also says offices covered include senator, representative, electors of the president and vice president, and all others “under the United States,” but doesn’t name the presidency.

    The state’s highest court didn’t agree, siding with attorneys for six Colorado Republican and unaffiliated voters who argued that it was nonsensical to imagine the framers of the amendment, fearful of former Confederates returning to power, would bar them from low-level offices but not the highest one in the land.

    “You’d be saying a rebel who took up arms against the government couldn’t be a county sheriff, but could be the president,” attorney Jason Murray said in arguments before the court in early December.

    Trump’s attorneys argued unsuccessfully that the writers of the amendment expected the Electoral College to prevent former insurrectionists from becoming president.

    They also had urged the Colorado high court to reverse Wallace’s ruling that Trump incited the Jan. 6 attack. His lawyers argued the then-president had simply been using his free speech rights and hadn’t called for violence. Trump attorney Scott Gessler also argued the attack was more of a “riot” than an insurrection.

    That met skepticism from several of the justices.

    “Why isn’t it enough that a violent mob breached the Capitol when Congress was performing a core constitutional function?” Justice William W. Hood III said during the Dec. 6 arguments. “In some ways, that seems like a poster child for insurrection.”

    In the ruling issued Tuesday, the court’s majority dismissed the arguments that Trump wasn’t responsible for his supporters’ violent attack, which was intended to halt Congress’ certification of the presidential vote: “President Trump then gave a speech in which he literally exhorted his supporters to fight at the Capitol,” they wrote.

    Colorado Supreme Court Justices Richard L. Gabriel, Melissa Hart, William W. Hood III and Monica Márquez ruled for the petitioners. Chief Justice Brian D. Boatright dissented, arguing the constitutional questions were too complex to be solved in a state hearing. Justices Maria E. Berkenkotter and Carlos Samour also dissented.

    “Our government cannot deprive someone of the right to hold public office without due process of law,” Samour wrote in his dissent. “Even if we are convinced that a candidate committed horrible acts in the past — dare I say, engaged in insurrection — there must be procedural due process before we can declare that individual disqualified from holding public office.”

    The Colorado ruling stands in contrast with the Minnesota Supreme Court, which last month decided that the state party can put anyone it wants on its primary ballot. It dismissed a Section 3 lawsuit but said the plaintiffs could try again during the general election.

    In another 14th Amendment case, a Michigan judge ruled that Congress, not the judiciary, should decide whether Trump can stay on the ballot. That ruling is being appealed.

    The liberal group behind those cases, Free Speech For People, also filed another lawsuit in Oregon seeking to bounce Trump from the ballot there. The Colorado case was filed by another liberal group, Citizens for Responsibility and Ethics in Washington.

    Both groups are financed by liberal donors who also support President Joe Biden. Trump has blamed the president for the lawsuits against him, even though Biden has no role in them, saying his rival is “defacing the constitution” to try to end his campaign.

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  • S&P 500 eyes record high as interest rate cut hopes underpin sentiment

    S&P 500 eyes record high as interest rate cut hopes underpin sentiment

    U.S. stock index futures were hovering around their highs of the year and just shy of record levels as investors continued to revel in an expected loosening of monetary policy by the Federal Reserve in 2024 amid a ‘soft landing’ for the U.S. economy.

    How are stock-index futures trading

    • S&P 500 futures
      ES00,
      +0.05%

      rose 3 points, or less than 0.1% to 4796

    • Dow Jones Industrial Average futures
      YM00,
      +0.01%

      added 10 points, or less than 0.1% to 37688

    • Nasdaq 100 futures
      NQ00,
      +0.02%

      were unchanged at 16940

    On Monday, the Dow Jones Industrial Average
    DJIA
    rose 1 points, or 0%, to 37306, the S&P 500
    SPX
    increased 21 points, or 0.45%, to 4741, and the Nasdaq Composite
    COMP
    gained 91 points, or 0.62%, to 14905.

    What’s driving markets

    The S&P 500 was set to open Tuesday’s session only about 1% below its record close as traders remained energized by the prospect of the Federal Reserve starting to cut interest rates by the spring of next year.

    Some Fed officials in recent days pushed back against the market’s hopes for lower borrowing costs as early as March, but equity investors seem to have shrugged off those comments, for now.

    Meanwhile, the Bank of Japan on Tuesday reminded traders that an important spigot of cheap money still remains open. The BOJ left its main interest rate at minus 0.1%, and in the accompanying news conference, Governor Kazuo Ueda provided little evidence he was minded to exit the central bank’s ultra-loose monetary policy anytime soon, despite inflation running above its 2% target for 19 consecutive months.

    The Japanese yen
    USDJPY,
    +1.32%

    fell 1.2% and the Nikkei 225 stock index
    JP:NIK
    rose 1.4% as 10-year government bond yields
    BX:TMBMKJP-10Y
    fell 3.6 basis points to 0.634%, the lowest in nearly four months.

    “Whenever central banks take positions that the market thinks are unsustainable, it’s always the currencies that play the role of the canary in the coal mine. No surprise then to see the Yen weakening by around 1% against every major currency overnight as investors vote with their feet,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.

    Traders were also warily eyeing the oil market, after benchmark Brent crude
    BRN00,
    +0.06%

    jumped on Monday following BP’s statement it was halting shipments through the Red Sea, and thus the Suez Canal, because of attack’s by the Houthi in Yemen.

    Many of the world’s biggest shipping companies have said they also will steer clear of the region, prompting concerns about rising costs that may build inflationary pressures.

    “An extended period of disruption in global trade ways should not only sustain energy prices, but also put a renewed pressure on global supply chains and shipping prices,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

    Read: Attacks in the Red Sea add to global shipping woes

    “The latter is a threat to inflation. Remember, the pandemic-related supply chain disruptions were the major reason that sent inflation to almost 10% in the U.S.,” Ozkardeskaya added.

    However, there was little evidence early Tuesday that investors were overly concerned by that narrative, with 10-year U.S. Treasury yields
    BX:TMUBMUSD10Y
    dipping 2.7 basis points to 3.912%.

    U.S. economic updates set for release on Tuesday include November housing starts and building permits at 8:30 a.m. Eastern.

    Atlanta Fed President Raphael Bostic is due to speak at 12:30 p.m.

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  • Dow nabs 3rd straight record close, S&P has longest weekly win streak in 6 years

    Dow nabs 3rd straight record close, S&P has longest weekly win streak in 6 years

    U.S. stocks closed mostly higher Friday, with major U.S. equity indexes booking a seventh straight week in the green in the wake of the Federal Reserve’s policy meeting.

    The S&P 500 saw its longest weekly winning streak since November 2017, according to Dow Jones Market Data.

    How stock indexes traded

    • The Dow Jones Industrial Average
      DJIA
      rose 56.81 points, or 0.2%, to close at a record 37,305.16.

    • The S&P 500
      SPX
      was about flat, slipping less than 0.1%, to finish at 4,719.19

    • The Nasdaq Composite
      COMP
      gained 52.36 points, or 0.4%, to end at 14,813.92.

    What drove markets

    U.S. stocks finished mostly higher Friday, with the Dow Jones Industrial Average logging a third straight record close.

    Equities broadly rallied this week after investors digested a closely watched reading on U.S. inflation as well as the Federal Reserve’s latest policy statement and projections on interest rates. The Dow, S&P 500 and Nasdaq Composite each logged a seventh straight week of gains.

    The “more optimistic tone of markets over the last several weeks has been justified,” Russell Price, chief economist at Ameriprise Financial, said in a Friday phone call. It’s “reasonable” for the stock market to be pricing in rate cuts by the Federal Reserve in 2024, with the recent drop in 10-year Treasury yields helping to lift equities, he said.  

    Price said he’s expecting the Fed may begin cutting rates in June and the U.S. economy will slow to a “sustainable” pace of growth in 2024. In his view, real gross domestic product may rise 1.8% to 1.9% next year.

    Nearly all of the S&P 500’s 11 sectors finished with gains this week, while small-capitalization stocks saw a stronger rally than large-cap equities.

    The small-cap Russell 2000 index
    RUT
    posted a weekly gain of around 5.6%, FactSet data show. The S&P 500 rose around 2.5% this week.

    At his press conference on Wednesday, Fed Chair Jerome Powell gave “a nod” that inflation was on the right path and lower rates were on the horizon next year, according to Price. But when it comes to the federal-funds futures, Price said that traders appear to have gotten “too far ahead” in their bets on rate cuts.

    Fed-funds futures pointed to the central bank starting to reduce its benchmark rate as soon as March, according to the CME FedWatch Tool.

    Stocks hit a speed bump in Friday’s trading session after New York Federal Reserve Bank President John Williams pushed back against those rate expectations during an interview with CNBC. “We aren’t really talking about cutting interest rates right now,” Williams said.

    Inflation, as measured by the consumer-price index, slowed to a year-over-year rate of 3.1% in November, down significantly from last year’s peak of 9.1% in June.  But “it’s too early to call ‘mission accomplished’ just yet” for the Fed’s goal of bringing inflation down to its 2% target, said Price.

    Still, Powell was explicit during his press conference about not needing a recession to cut rates, according to Nationwide’s chief of investment research Mark Hackett. “That was code for a soft landing,” Hackett said by phone Friday. 

    See: Williams says the Fed isn’t ‘really talking about cutting interest rates right now’

    On the economic news front Friday, the New York Fed’s Empire State manufacturing survey showed U.S. manufacturing activity continued to struggle as the gauge tumbled to a four-month low. Flash services and manufacturing PMIs from S&P affirmed that manufacturing activity remained weak, while services activity reached a five-month high.

    Read: U.S. economy posts steady but lackluster growth at year’s end, S&P finds

    Meanwhile, the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    fell 31.7 basis points this week to 3.927%, the largest weekly drop since November 2022, according to Dow Jones Market Data.

    The S&P 500 ended Friday about flat, but just 1.6% below its record close, reached Jan. 3, 2022.

    “The momentum in the market is undeniably incredibly strong right now,” said Nationwide’s Hackett, though on Friday investors appeared to be taking “a natural break.”

    Companies in focus

    • Palantir Technologies Inc. shares
      PLTR,
      -0.05%

      slipped about 0.1% on Friday after the company announced an extension to a U.S. Army contract.

    • Steel Dynamics Inc.’s shares
      STLD,
      +4.52%

      jumped 4.5% after the company reported earnings, making it one of the S&P 500’s best performers in Friday’s trading session.

    • Costco Wholesale Corp. shares
      COST,
      +4.45%

      climbed around 4.5% after reporting fiscal first-quarter earnings and revenue largely in line with expectations following the market’s close on Thursday, and announced a special dividend of $15 a share.

    • JD.com
      JD,
      +4.46%

      gained 4.5% as fresh stimulus out of China helped boost shares of companies based in the world’s second-largest economy. Alibaba Group Holding Ltd.’s stock
      BABA,
      +2.76%

      rose 2.8%.

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  • Import prices fall for second straight month and as U.S. inflation eases

    Import prices fall for second straight month and as U.S. inflation eases

    Developing story. Check back for updates.

    The numbers: The cost of imported goods fell 0.4% to mark the second decline in a row, contributing to a slowdown in U.S. inflation more broadly.

    Economists polled by the Wall Street Journal had estimated a 0.8% drop.

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  • The Sahm rule: What to know about the recession indicator that has Wall Street talking

    The Sahm rule: What to know about the recession indicator that has Wall Street talking

    That was close.

    After the U.S. unemployment rate climbed to 3.9% in October, stoking fears that the labor market might finally be starting to crack under the weight of the Federal Reserve’s interest-rate hikes, economic data released Friday showed that unemployment retreated to 3.7% in November.

    That means the Sahm rule, an indicator devised to sniff out a recession long before one is officially declared, is now even further from triggering, after nearly brushing up against the threshold last month.

    And according to the rule’s creator, former Federal Reserve economist Claudia Sahm, perhaps it won’t trigger, at least not during this cycle.

    “I am more optimistic today that it doesn’t trigger,” Sahm told MarketWatch during a phone interview Friday.

    What’s the Sahm rule, and why should we care about it?

    Wall Street and social media were abuzz with talk of the Sahm rule last month as the rising unemployment rate sparked a debate about whether a recession had begun.

    The increase brought the Sahm rule indicator to 0.30, according to data available on a Federal Reserve branch website, bringing it closer to triggering than at any time during the past two years. It also sparked a brisk conversation among professional economists and amateur market watchers about what the Sahm rule is, how it works and why investors should care about it.

    After Sahm declared that the rule hadn’t triggered, some on social media accused her of misrepresenting her own rule, said the economist, who now runs her own consulting business.

    She was surprised by this, she told MarketWatch, since she thought the rule’s simplicity was one of its most important features.

    It was initially devised with lawmakers in mind, intended to become an automatic mechanism to send out stimulus checks more quickly as a recession begins, thus helping to shield workers from some of the worst financial consequences.

    But the debate has helped her realize that perhaps the rule’s dynamics aren’t clearly understood by all.

    To try to remedy this, she published a step-by-step guide explaining how the Sahm rule is calculated, or at least how Sahm and the Fed calculate it. Economists are free to devise their own variations on the rule. Here are some key points:

    • The Sahm rule uses the three-month average of the monthly unemployment rate, instead of taking the latest rate in isolation.

    • The current average is then compared with the lowest three-month average from the past year. Right now, that stands at around 3.5, Sahm said.

    • The 12-month low is subtracted from the current three-month average, and if the difference is 0.5 percentage point or greater, it means the rule has triggered. The rule is based on history and it has a strong precedent, meaning that almost every time unemployment has risen past this threshold, a recession has ensued.

    The snowball effect

    The logic undergirding the rule is pretty straightforward, Sahm said: The rule is grounded in the notion, supported by historical data, that once employment starts to rise, it often snowballs.

    Typically it increases by anywhere between 4 and 6 percentage points during a recession, Sahm said.

    But just because the rule has held in the past doesn’t mean it always will. Sahm has previously said that she wouldn’t be surprised if the rule were to break because of pandemic-related distortions in the global economy.

    She affirmed on Friday that she still believes this to be the case, although she doubts the rule will trigger this cycle.

    That is largely because, as Sahm sees it, the rise in the unemployment rate has been driven not only by slowing job creation, but by workers returning to the workforce, a sign that supply-and-demand dynamics in the U.S. labor market are coming back into balance, and that maybe employers won’t need to be as precious about hiring in the future.

    “If [the rebalancing] happens fast enough, then we won’t trigger. But if it slows down, then maybe we’ll trigger, but we’ll likely see unemployment move sideways before coming back down,” Sahm said.

    Labor Department data showed the U.S. economy added 199,000 jobs in November, surpassing economists’ expectations for 190,000 new jobs. The number was also higher than the 150,000 created during the previous month.

    See: Job report shows gain of 199,000 in November. Wages are still hot.

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