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  • 20 dividend stocks that may be safest if the Federal Reserve causes a recession

    20 dividend stocks that may be safest if the Federal Reserve causes a recession

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    Investors cheered when a report last week showed the economy expanded in the third quarter after back-to-back contractions.

    But it’s too early to get excited, because the Federal Reserve hasn’t given any sign yet that it is about to stop raising interest rates at the fastest pace in decades.

    Below is a list of dividend stocks that have had low price volatility over the past 12 months, culled from three large exchange traded funds that screen for high yields and quality in different ways.

    In a year when the S&P 500
    SPX,
    -0.40%
    is down 18%, the three ETFs have widely outperformed, with the best of the group falling only 1%.

    Read: GDP looked great for the U.S. economy, but it really wasn’t

    That said, last week was a very good one for U.S. stocks, with the S&P 500 returning 4% and the Dow Jones Industrial Average
    DJIA,
    -0.32%
    having its best October ever.

    This week, investors’ eyes turn back to the Federal Reserve. Following a two-day policy meeting, the Federal Open Market Committee is expected to make its fourth consecutive increase of 0.75% to the federal funds rate on Wednesday.

    The inverted yield curve, with yields on two-year U.S. Treasury notes
    TMUBMUSD02Y,
    4.540%
    exceeding yields on 10-year notes
    TMUBMUSD10Y,
    4.064%    ,
    indicates investors in the bond market expect a recession. Meanwhile, this has been a difficult earnings season for many companies and analysts have reacted by lowering their earnings estimates.

    The weighted rolling consensus 12-month earning estimate for the S&P 500, based on estimates of analysts polled by FactSet, has declined 2% over the past month to $230.60. In a healthy economy, investors expect this number to rise every quarter, at least slightly.

    Low-volatility stocks are working in 2022

    Take a look at this chart, showing year-to-date total returns for the three ETFs against the S&P 500 through October:


    FactSet

    The three dividend-stock ETFs take different approaches:

    • The $40.6 billion Schwab U.S. Dividend Equity ETF
      SCHD,
      +0.15%
      tracks the Dow Jones U.S. Dividend 100 Indexed quarterly. This approach incorporates 10-year screens for cash flow, debt, return on equity and dividend growth for quality and safety. It excludes real estate investment trusts (REITs). The ETF’s 30-day SEC yield was 3.79% as of Sept. 30.

    • The iShares Select Dividend ETF
      DVY,
      +0.45%
      has $21.7 billion in assets. It tracks the Dow Jones U.S. Select Dividend Index, which is weighted by dividend yield and “skews toward smaller firms paying consistent dividends,” according to FactSet. It holds about 100 stocks, includes REITs and looks back five years for dividend growth and payout ratios. The ETF’s 30-day yield was 4.07% as of Sept. 30.

    • The SPDR Portfolio S&P 500 High Dividend ETF
      SPYD,
      +0.60%
      has $7.8 billion in assets and holds 80 stocks, taking an equal-weighted approach to investing in the top-yielding stocks among the S&P 500. It’s 30-day yield was 4.07% as of Sept. 30.

    All three ETFs have fared well this year relative to the S&P 500. The funds’ beta — a measure of price volatility against that of the S&P 500 (in this case) — have ranged this year from 0.75 to 0.76, according to FactSet. A beta of 1 would indicate volatility matching that of the index, while a beta above 1 would indicate higher volatility.

    Now look at this five-year total return chart showing the three ETFs against the S&P 500 over the past five years:


    FactSet

    The Schwab U.S. Dividend Equity ETF ranks highest for five-year total return with dividends reinvested — it is the only one of the three to beat the index for this period.

    Screening for the least volatile dividend stocks

    Together, the three ETFs hold 194 stocks. Here are the 20 with the lowest 12-month beta. The list is sorted by beta, ascending, and dividend yields range from 2.45% to 8.13%:

    Company

    		 Ticker

    		 12-month beta

    		 Dividend yield

    		 2022 total return
    Newmont Corp.

    		 NEM,
    -0.78%         		0.17

    		 5.20%

    		 -30%
    Verizon Communications Inc.

    		 VZ,
    -0.07%         		0.22

    		 6.98%

    		 -24%
    General Mills Inc.

    		 GIS,
    -1.47%         		0.27

    		 2.65%

    		 25%
    Kellogg Co.

    		 K,
    -0.93%         		0.27

    		 3.07%

    		 22%
    Merck & Co. Inc.

    		 MRK,
    -1.73%         		0.29

    		 2.73%

    		 35%
    Kraft Heinz Co.

    		 KHC,
    -0.56%         		0.35

    		 4.16%

    		 11%
    City Holding Co.

    		 CHCO,
    -1.45%         		0.38

    		 2.58%

    		 27%
    CVB Financial Corp.

    		 CVBF,
    -1.24%         		0.38

    		 2.79%

    		 37%
    First Horizon Corp.

    		 FHN,
    -0.18%         		0.39

    		 2.45%

    		 53%
    Avista Corp.

    		 AVA,
    -7.82%         		0.41

    		 4.29%

    		 0%
    NorthWestern Corp.

    		 NWE,
    -0.21%         		0.42

    		 4.77%

    		 -4%
    Altria Group Inc

    		 MO,
    -0.18%         		0.43

    		 8.13%

    		 4%
    Northwest Bancshares Inc.

    		 NWBI,
    +0.10%         		0.45

    		 5.31%

    		 11%
    AT&T Inc.

    		 T,
    +0.63%         		0.47

    		 6.09%

    		 5%
    Flowers Foods Inc.

    		 FLO,
    -0.44%         		0.48

    		 3.07%

    		 7%
    Mercury General Corp.

    		 MCY,
    +0.07%         		0.48

    		 4.38%

    		 -43%
    Conagra Brands Inc.

    		 CAG,
    -0.82%         		0.48

    		 3.60%

    		 10%
    Amgen Inc.

    		 AMGN,
    +0.41%         		0.49

    		 2.87%

    		 23%
    Safety Insurance Group Inc.

    		 SAFT,
    -1.70%         		0.49

    		 4.14%

    		 5%
    Tyson Foods Inc. Class A

    		 TSN,
    -0.40%         		0.50

    		 2.69%

    		 -20%
    Source: FactSet

    Any list of stocks will have its dogs, but 16 of these 20 have outperformed the S&P 500 so far in 2022, and 14 have had positive total returns.

    You can click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

    Don’t miss: Municipal bond yields are attractive now — here’s how to figure out if they are right for you

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  • Education Department overhauls federal student loan system, aiming to make it ‘simpler, fairer and more accountable’

    Education Department overhauls federal student loan system, aiming to make it ‘simpler, fairer and more accountable’

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    Chip Somodevilla | Getty Images News | Getty Images

    The U.S. Department of Education announced on Monday sweeping new changes to the federal student loan system, including additional consumer protections for borrowers and limits on the amount of interest that can accrue on the debt.

    “Today is a monumental step forward in the Biden-Harris team’s efforts to fix a broken student loan system and build one that’s simpler, fairer, and more accountable to borrowers,” said U.S. Secretary of Education Miguel Cardona, in a statement.

    The new regulations should make it easier for students who’ve been defrauded by their schools to get their student loans canceled by the government through the borrower defense process, and allows for the Education Department to come to a determination about these requests for relief as a group, instead of requiring each borrower to individually prove that they were sufficiently harmed or misled by their school.

    More from Personal Finance:
    How Fed’s interest rate hikes made borrowing costlier
    Tips to help stretch your paycheck amid high inflation
    ‘Ugly times’ are pushing record annuity sales

    Under the rules, higher education institutions that accept federal student aid will be banned from requiring borrowers to sign mandatory pre-dispute arbitration agreements or to waive their ability to participate in a class-action lawsuit over their borrower defense claim.

    The Biden administration will also curb the practice of interest capitalization — in which unpaid interest is added to the borrower’s principal.

    The public service loan forgiveness program, which allows public servants and those who work for certain nonprofits to get their debt canceled after a decade, will also get an overhaul. Months that previously didn’t qualify toward a borrowers’ debt relief, including those when they were in a economic hardship deferment, will be counted. Previously ineligible late payments will also now qualify.

    These changes will go into effect on July 1, 2023.

    Biden administration officials described these improvements as necessary and urgent to fix a system plagued by problems.

    Prior to the coronavirus pandemic, when the U.S. economy was enjoying one of its healthiest periods in history, only about half of borrowers were in repayment. A quarter — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief for struggling borrowers, including deferments or forbearances. These grim figures led to comparisons to the 2008 mortgage crisis.

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  • As subscription prices rise, here’s what’s worth streaming in November 2022: ‘The Crown,’ ‘Willow,’ ‘Mythic Quest’ and more

    As subscription prices rise, here’s what’s worth streaming in November 2022: ‘The Crown,’ ‘Willow,’ ‘Mythic Quest’ and more

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    So here’s some bad news and some, well, slightly less bad news.

    First, the bad-bad: Streaming prices are increasing almost across the board (Hulu and Apple TV+ rose in October, Disney+ will rise in December, while Netflix and Prime Video rose earlier this year), putting even more of a crunch on budget-conscious consumers.

    But now the less bad: If you can put up with commercials, there are cheaper, ad-supported versions coming your way (Netflix on Nov. 3, Disney+ in December).

    Of course, the other money-saving solution is to double down on a churn-and-return strategy and cut down on recurring subscriptions even more.

    Each month, this column offers tips on how to maximize your streaming and your budget, rating the major services as a “play,” “pause” or “stop” — similar to investment analysts’ traditional ratings of buy, hold and sell. We also pick the best content to help you make your monthly decisions.

    Consumers can take full advantage of cord-cutting by churning and returning — adding and dropping streaming services each month. All it takes is good planning. Keep in mind that a billing cycle starts when you sign up, not necessarily at the beginning of the month, and keep an eye out for lower-priced tiers, limited-time discounts, free trials and cost-saving bundles. There are a lot of offers out there, but the deals don’t last forever.

    Here’s a look at what’s coming to the various streaming services in November 2022, and what’s really worth the monthly subscription fee.

    Netflix ($6.99 a month for basic with ads starting Nov. 3, $9.99 basic without ads, $15.49 standard without ads, $19.99 premium without ads)

    Netflix has another really good month coming up.

     “The Crown” (Nov. 9), returns for its fifth season, set this time in the 1990s as scandals involving Charles and Diana plaster London’s tabloids and the role of Britain’s monarchy in modern society is thrown into question. Imelda Staunton takes over the role of Queen Elizabeth, with Dominic West as Prince Charles, Elizabeth Debicki as Princess Diana and Jonathan Pryce as Prince Philip. Controversy has already erupted over the new season, which will include Diana’s tragic death, as some have spoken out about the show’s increasingly blurry line between truth and fiction. Pryce recently told Vanity Fair, ““The vast majority of people know it’s a drama,” not a documentary. And it’s a pretty good drama.

    Netflix
    NFLX,
    -0.41%
    hasn’t had much success developing original sitcoms, but is hoping to finally break through with “Blockbuster” (Nov. 3), a workplace comedy set at the last Blockbuster video store in America, starring network sitcom veterans Randall Park (“Fresh Off the Boat”) and Melissa Fumero (“Brooklyn Nine-Nine”). There’s also “Wednesday” (Nov. 23), a horror-comedy series from Tim Burton starring Jenna Ortega as the terrifyingly snarky teen Wednesday Addams, with Catherine Zeta-Jones and Luis Guzman playing her creepy and kooky parents, Morticia and Gomez; and the third and final season of the dark comedy “Dead to Me” (Nov. 17), starring Christina Applegate and Linda Cardellini, which returns after a two-and-a-half-year layoff.

    On the drama side, there’s “1899” (Nov. 17), a mystery-horror series set aboard a transatlantic steamer ship at the turn of the last century, from the makers of the mind-bending German sci-fi series “Dark” — and if it’s even half as trippy and addictive, it’ll be terrific; Part 1 of the fourth season of the supernatural drama “Manifest” (Nov. 4), which Netflix rescued from NBC’s cancellation; and Season 6 of the soapy Spanish high-school drama “Elite” (Nov 18).

    More: Here’s everything new coming to Netflix in November 2022, and what’s leaving

    There’s also the timely documentary “FIFA Uncovered” (Nov. 9), digging into the scandal-plagued organization behind the World Cup; “Pepsi, Where’s My Jet” (Nov. 17), a documentary about a man who sued Pepsi in the 1980s to get a free Harrier fighter jet; the fifth installment of “The Great British Baking Show: Holidays” (Nov. 18); and the new standup comedy special from the outgoing “Daily Show” host, “Trevor Noah: I Wish You Would” (Nov. 22).

    On the movie front, there’s “Enola Holmes 2” (Nov. 4), a sequel to the hit 2020 movie about Sherlock Holmes’ younger sister, played by Millie Bobby Brown (“Stranger Things”), as young detective Enola sets out to investigate her first case; “Slumberland” (Nov. 18), a comedy adventure about a young girl exploring the dreamworld, starring Mallow Barkley and Jason Mamoa; and Lindsay Lohan is back with a Christmas rom-com, “Falling for Christmas” (Nov. 10).

    Who’s Netflix for? Fans of buzz-worthy original shows and movies.

    Play, pause or stop? Play. When it’s at the top of its game, as it is again this month, Netflix is a must-have, at whatever price tier.

    Disney+ ($7.99 a month)

    The TV world has been abuzz about prequels for the past few months, but it’s all about sequels in November for Disney+.

    The biggest of the bunch is “Willow” (Nov. 30), a follow-up series to the cult-favorite 1988 fantasy movie of the same name. The magical adventure is set 20 years after the events of the film, and Warwick Davis returns as farmer-turned-sorcerer Willow Ufgood, who leads an unlikely group of heroes on a quest to save their world. It should be fun for the whole family.

    Disney
    DIS,
    +1.45%
    also has “Disenchanted” (Nov. 18), a sequel to the 2007 hit movie “Enchanted.” The musical fantasy is set 10 years after the happily-ever-after ending, with Giselle (Amy Adams) questioning her happiness and inadvertently setting her two worlds askew. Patrick Dempsey, James Marsden and Maya Rudolph co-star. And then there’s “The Santa Clauses” (Nov. 16), as Tim Allen reprises his role of Santa Claus, who’s now facing retirement and looking for a replacement, in a new miniseries spinoff of the family-movie trilogy.

    Also of note: “The Guardians of the Galaxy Holiday Special” (Nov. 25), as Star-Lord and the gang kidnap Kevin Bacon; the live performance “Elton John: Live from Dodger Stadium” (Nov. 20), the pop icon’s final show in North America; and weekly episodes of “Dancing With the Stars” (season finale Nov. 21), the “Star Wars” prequel “Andor” (season finale Nov. 23) and “The Mighty Ducks: Game Changers” (season finale Nov. 30).

    And heads up: Prices for the ad-free tier will jump to $10.99 a month in December, after Disney+ launches its ad-supported tier for $7.99 a month.

    Who’s Disney+ for? Families with kids, hardcore “Star Wars” and Marvel fans. For people not in those groups, Disney’s library can be lacking.

    Play, pause or stop? Play. There’s something for everyone in the household — even grumps who aren’t “Star Wars” fans can get into “Andor,” which absolutely works as a dark, gripping, spy thriller. Meanwhile, fans are realizing it just might be the best “Star Wars” series or movie ever made.

    HBO Max ($9.99 a month with ads, or $14.99 without ads)

    HBO Max is bringing back  “The Sex Lives of College Girls” (Nov. 17) for its second season. Created by Mindy Kaling and Justin Noble (who also teamed on Netflix’s “Never Have I Ever”), the ensemble comedy about four college roommates picks up right after Thanksgiving break, with the girls organizing a “sex-positive” male strip show. It’s sharp, funny, and less cringey than its title suggests.

    Then there’s “A Christmas Story Christmas” (Nov. 17), a nostalgic sequel to the 1983 classic, starring Peter Billingsley as a grown-up Ralphie who returns to his hometown to try to give his kids a perfect Christmas. It’s risky reviving such a beloved movie, and this could either be wonderful or terrible, there’s really no middle ground.

    HBO Max also has a slew of documentaries, including “Love, Lizzo” (Nov. 24), about the pop superstar’s inspiring life story; “Shaq” (Nov. 23), a four-part docuseries chronicling the rise to superstardom of NBA Hall of Famer Shaquille O’Neal; “Low Country: The Murdaugh Dynasty” (Nov. 3), a true-crime series about a South Carolina lawyer’s scandalous fall; and “Say Hey, Willie Mays!” (Nov. 8), a film exploring the life, career and social impact of the greatest baseball player who ever played the game.

    See more: Here’s everything new coming to HBO Max in November 2022, and what’s leaving

    And every week brings new episodes of Season 2 of the very dark vacation comedy “The White Lotus,” Season 3 of “Pennyworth: The Origin of Batman’s Butler” and Season 2 of the cult documentary “The Vow.”

    Who’s HBO Max for? HBO fans and movie lovers.

    Play, pause or stop? Pause and think it over. “The White Lotus” and “The Sex Lives of College Girls” are both worth watching, but beyond that it’s kinda “meh” this month. And Max is too pricey for “meh.”

    Amazon Prime Video ($14.99 a month)

    Amazon
    AMZN,
    -6.80%
    is bringing the star power in November, starting with the Western drama series “The English” (Nov. 11), starring Emily Blunt as an aristocratic Englishwoman who teams with a Pawnee scout (Chaske Spencer) on a mission to cross the violent 1890s American frontier. It looks stylish and bloody — and promising.

    Meanwhile, James Corden and Sally Hawkins star in “Mammals” (Nov. 11), a dark comedy series about modern marriage; pop star-turned-actor Harry Styles stars in “My Policeman” (Nov. 4), a drama about forbidden romance that’s getting very “meh” reviews in its theatrical release; and Kristen Bell, Ben Platt and Allison Janney star in “The People We Hate at the Wedding” (Nov. 18), a raunchy comedy set at a dysfunctional family wedding.

    More: Here’s what’s coming to Amazon’s Prime Video in November 2022

    There’s also NFL Thursday Night Football every week, and new episodes of the intriguing sci-fi drama “The Peripheral,” which is giving very “Westworld”-but-slightly-less-confusing vibes.

    Who’s Amazon Prime Video for? Movie lovers, TV-series fans who value quality over quantity.

    Play, pause or stop? Pause. There’s good stuff here, but nothing that feels must-see.

    Paramount+ ($4.99 a month with ads but not live CBS, $9.99 without ads)

    Taylor Sheridan (“Yellowstone,” “1883,” “Mayor of Kingstown”) has another new series: “Tulsa King” (Nov. 13), starring Sylvester Stallone as a former New York mafia capo who gets freed from prison after 25 years and settles in Tulsa, Okla., to build a criminal empire of his own. Showrunner Terence Winter (“The Sopranos,” “Boardwalk Empire”) knows a thing or two about mob shows, and this one could be good.

    Paramount+ also has the spinoff series “Criminal Minds: Evolution” (Nov. 24), about an elite team of FBI profilers unraveling a network of serial killers; the family movie “Fantasy Football” (Nov. 25), about a girl who can magically control how her NFL-player dad performs on the field; and the series finale of “The Good Fight” (Nov. 10), which its creators promise will be “cataclysmic.”

    There’s also the Thanksgiving Day Parade (Nov. 24) and a ton of live sports, including college football on Saturdays, NFL football on Sundays (and Thanksgiving Day), and group-stage matches for UEFA’s Champions and Europe leagues.

    Who’s Paramount+ for? Gen X cord-cutters who miss live sports and familiar Paramount Global 
    PARA,
    +3.37%
     broadcast and cable shows.

    Play, pause or stop? Pause. Besides its solid live-sports lineup, it’s a good time to catch up and binge “The Good Fight,” and “Tulsa King” could be worth a watch too.

    Hulu ($7.99 a month with ads, or $14.99 with no ads)

    Hulu has a couple of interesting offerings in November, but nothing that screams must-see. Yet, at least.

    FX’s “Fleishman Is in Trouble” (Nov. 17) stars Jesse Eisenberg as a newly divorced dad whose promiscuous dive into app-based dating is disrupted when his ex-wife disappears and leaves him with their kids. Claire Danes, Lizzy Caplan and Adam Brody co-star in the eight-episode drama, which is based on Taffy Brodesser-Akner’s best-selling novel.

    There’s also “Welcome to Chippendales” (Nov. 22), a true-crime series starring Kumail Nanjiani as the immigrant founder of the 1980s male-stripper franchise, which chronicles his business empire’s rise and fall amid a blizzard of sex, drugs and violence.

    Meanwhile, Adam McKay (“The Big Short”) and Billy Corben (“Cocaine Cowboys”) have the documentary  “God Forbid: The Sex Scandal That Brought Down a Dynasty” (Nov. 1), about the private life of Christian televangelist and former Liberty University president Jerry Falwell Jr. and his very public downfall.

    See: Here’s everything new on Hulu in November 2022 — and what’s leaving

    There are also the final two episodes of “Atlanta” (series finale Nov. 10), whose fourth season has returned to brilliance after an underwhelming Season 3 over the summer, and new episodes every week of ABC’s “Abbott Elementary.”

    Who’s Hulu for? TV lovers. There’s a deep library for those who want older TV series and next-day streaming of many current network and cable shows.

    Play, pause or stop? Stop. While you won’t regret paying for Hulu if you already do, there’s not a lot to lure new subscribers this month.

    Apple TV+ ($6.99 a month)

    Apple TV+ is too inconsistent to be worth the $2-a-month price hike that was just announced, so it’s best to strategically plan when to stream — wait until a good series or two are completed, for example, and binge them all in a month, then cancel. Repeat as needed.

    And it actually is a decent month for Apple. Its second-best comedy, “Mythic Quest” Nov. 11), returns for its third season, with Ian (Rob McElhenny) and Poppy (Charlotte Nicdao) gearing up for war against their old videogame company. With a perfect blend of humor and heart, it’s one of the best workplace comedies on TV.

    Meanwhile, Season 2 of “The Mosquito Coast” (Nov. 4) finds the fugitive Fox family finally hiding out in Central America, after a tedious premise-pilot of a first season that wasted good actors (Justin Theroux and Melissa George) and beautiful cinematography with nonsensical plot twists, while the action series “Echo 3” (Nov. 23) stars Luke Evans and Michiel Huisman as former soldiers trying to rescue a kidnapped scientist in the jungles of South America.

    Apple
    AAPL,
    +7.56%
    also has a pair of high-profile original movies: “Causeway” (Nov. 3), starring Jennifer Lawrence as a former soldier struggling to adjust to civilian life in New Orleans, co-starring Brian Tyree Henry, and “Spirited” (Nov. 18), a musical twist on “A Christmas Carol” told from the ghosts’ point of view, starring Ryan Reynolds and Will Ferrell.

    Who’s Apple TV+ for? It offers a little something for everyone, but not necessarily enough for anyone — although it’s getting there.

    Play, pause or stop? Stop. There’s just not enough to justify a month-to-month subscription. December is a better bet, with “Mythic Quest” and a new season of “Slow Horses” running concurrently.

    Peacock (free basic level, Premium for $4.99 a month with ads, or $9.99 a month with no ads)

    The World Cup from Qatar (Nov. 20-Dec. 18) will be broadcast on Fox and FS1, so cord-cutters are out of luck, unless you subscribe to a live-streaming service like Hulu Live or YouTube TV. However, Peacock will stream every match in Spanish, which could be a decent Plan B for soccer fans.

    And that “it’ll-do-but-it’s-not-exactly-what-I’m-looking-for” description is the running theme for Peacock. November will bring a handful of originals that are unlikely to move the needle, subscriber-wise: There’s the musical-comedy spinoff series “Pitch Perfect: Bumper in Berlin” (Nov. 23), starring Adam Devine; “The Calling” (Nov. 10), a crime drama about a religious cop, from David E. Kelley and Barry Levinson; the Macy’s Thanksgiving Day Parade (Nov. 24); and the streaming debut of Jordan Poole’s sci-fi/horror hit “Nope” (Nov. 18).

    Sports-wise, Peacock has the National Dog Show (hey, it’s a competition!) on Nov. 24, NFL Sunday Night Football every weekend, a full slate of English Premier League matches through Nov. 13, and a ton of golf and winter sports.

    Who’s Peacock for? If you have a Comcast 
    CMCSA,
    -0.06%
     or Cox cable subscription, you likely have free access to the Premium tier (with ads) — though reportedly not for much longer. The free tier is almost worthless, but the recent addition of next-day streaming of NBC and Bravo shows (like “Saturday Night Live” and “Real Housewives”) bolsters the case for paying for a subscription. Still, Peacock is still not really necessary unless you need it for sports.

    Play, pause or stop? Stop. There’s not a lot that’s particularly enticing right now, even on the sports side.

    Discovery+ ($4.99 a month with ads, or $6.99 with no ads)

    More of the same in November for Discovery+, which is a feature, not a bug. Highlights include the vegan cook-and-chat show “Mary McCartney Serves It Up” (Nov. 1); “Tut’s Lost City Revealed” (Nov. 3), about a 3,000-year-old Egyptian city recently discovered by archaeologists; “Vardy vs Rooney: The Wagatha Trial” (Nov. 19), the inside story of the tabloid-fodder “Wagatha” scandal between the wives of English soccer stars; and Season 2 of the excellent CNN food series “Stanley Tucci: Searching for Italy” (Nov. 30). Full disclosure: There are also a handful of sappy holiday movies guest-starring some HGTV and Food Network stars, but they look terrible and I expect better from you, a discerning reader/viewer.

    Who’s Discovery+ for? Cord-cutters who miss their unscripted TV or who are really, really into “90 Day Fiancé.”

    Play, pause or stop?  Stop. Discovery+ is still fantastic for background TV, but it’s not worth the cost. Still, it should add value when the reconfigured Warner Bros. Discovery 
    WBD,
    +3.68%
      combines it with HBO Max next summer.

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  • Where Are Markets Headed? Six Pros Take Their Best Guess

    Where Are Markets Headed? Six Pros Take Their Best Guess

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    A massive selloff in bonds. A plunge in tech stocks. The implosion of cryptocurrencies. The highest inflation in four decades.

    Amid a brutal and uncertain climate, we asked six heavyweights in the world of finance to share their thoughts on the state of the markets, how they have handled this year’s carnage and what they anticipate in the future.

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  • Everything You Know About Your 401(k) is Wrong. Here’s Why.

    Everything You Know About Your 401(k) is Wrong. Here’s Why.

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    Opinions expressed by Entrepreneur contributors are their own.

    Retirement savings is crucial for everyone because relying on social security is not enough to sustain yourself through your twilight years, especially considering that without any changes, the current social security system will only be able to pay benefits at 80% in 2035 and beyond. And the sooner you start, the better off you are.

    It’s true that tax-deferred accounts like traditional IRAs, 401(k)s, defined contribution plans and cash balance plans allow you to save a portion of each paycheck, tax-deferred, to live on once you hit retirement age. Still, everything you’ve learned about these types of accounts is wrong. And here’s the scary part — it’s not that the people spreading incorrect information are uninformed. Many of them absolutely do know that what they’re telling investors is wrong, but they continue because they have a financial incentive to do so.

    So in this article, I’m going to break down why what you know about your tax-deferred accounts is wrong and what you can do to ensure your retirement is spent living the life you love rather than struggling to make ends meet.

    Related: A 401(k) is Risky. Here’s a Safer Investment Strategy.

    Tax deferral plans only sound good in theory

    While most tax-deferred accounts may seem like a great thing, they actually come with a lot of severe disadvantages that adversely affect your investment and retirement goals.

    You’ll face higher taxes in the future

    You may get a perceived tax break right now by putting money into your tax-deferred accounts, but all you’re really doing is deferring your taxes. It’s true that this does allow you to accumulate a larger balance due to compounding, but that also means you’ll pay higher taxes when you eventually do begin withdrawing your money.

    As time goes on, there’s always the risk of higher tax rates when you take distributions. This alone should make you reconsider because you could easily end up paying more tax than you would now. In many cases, your tax-deferred compounding may not make up for the higher taxation, especially in the new economy of stagflation and higher interest rates.

    Most people today go through their daily lives with a false sense of security in their financial decisions. That’s both because we’ve all been misinformed by many in the financial industry and because most people have delegated their financial decisions to someone who has a vested interest in them investing in certain financial asset classes.

    It’s only much later in life, near or after retirement, when most people realize that they’ve made the wrong financial decisions, and by then, it’s usually too late.

    Related: Searching for Talent? Consider Setting Up a 401(k) for Your Small Business to Keep Up in the Market.

    Your money is locked until you’re 59.5 years old

    Any money you place into a tax-deferred account is locked until you reach age 59.5. This means that unless you want to pay a hefty penalty to access it earlier, you’re stuck letting Wall Street handle your funds. There’s no ability to access or use the money for a better investment opportunity that may come along.

    With few and limited exceptions, if you leave the workforce before age 59.5, you can’t live off of your investments if they’re all in a tax-deferred account. A Roth IRA will let you withdraw your contributions but not your earnings, providing some flexibility with those funds.

    You learn little to nothing about investing

    When you put your money into these tax-deferred accounts, you’re trusting your financial future to the financial advisors and money managers who have a vested interest in you following the status quo. Essentially, they make their money by getting you to invest in certain financial instruments and have no direct responsibility or liability for actual performance.

    This teaches you nothing about how to make the most of your wealth, how to use your assets to generate cash flow or how to ensure you’re making solid investments. This is, in my opinion, the biggest disadvantage that no one talks about: Abdication of your own financial future.

    If you discover a fund, stock or another investment that you want to buy, but your retirement plan doesn’t offer it — you’re simply out of luck. The limited choices are meant to keep administrative expenses low, but those limitations prevent you from having full control over the growth of your assets.

    Related: 4 Ways to Save for Retirement Without a 401(k)

    Loss of other tax benefits

    Other tax benefits, such as cost segregation, depreciation and long-term capital gain lower tax rates, are void inside these tax-deferred accounts. You also lose the stepped-up basis tax mitigation allowance for assets you wish to pass to heirs, which greatly reduces the ability to create generational wealth.

    Ridiculous fees and costs

    The small company match in your 401(k) isn’t much more than a little bit of extra compensation. If you’re only using a 401(k) for retirement, you’re doing yourself a disservice. They’re full of fees, from plan administration fees to investment fees to service fees and more. And the smaller the company you work for, the higher these fees tend to be.

    Even if your fee is just 0.5%, which is the absolute bottom of the fee range, you’re still paying far more for your 401(k) than you should, and that money could be invested in other places to help fuel your retirement growth. For example, if you’re maxing out your contributions at $19,500 per year, with an additional $3,000 in employer contributions, you’ll pay about $261,000 in fees, which translates to 9.5% of your returns.

    Opting out of a 401(k) retirement plan enables you to take that 9.5% and invest it in other more effective ways that will provide a higher return. But what should you do instead?

    Self-direction and Roth IRA conversion

    Qualified retirement accounts not tied to an employer-based plan may be “self-directed.” This means that you, the account owner, can choose from an unlimited number of investment assets, including alternatives such as real estate. Moving such accounts from your existing custodian to one that allows for full self-direction is easy to do and should be high on consideration for those who want more control over their investments.

    Roth conversions can be a great way to save money on future taxation. You can convert your traditional IRA into a Roth IRA, which means you will pay taxes on the money you convert in the year of conversion, but after conversion, your money will grow tax-free. This is a great way to save money on taxes in the long run since you won’t have to pay taxes on the money you withdraw from your Roth IRA in retirement.

    Don’t forget the J-Curve strategy

    The idea behind the J-Curve is that if a non-cash asset is converted from a traditional IRA to a Roth IRA and it experiences a temporary loss in market value, the tax on the asset conversion can be proportionally lowered based on the reduced asset value at the time of conversion.

    This strategy is available to anyone who’s invested in stocks, bonds, mutual funds and index funds and experienced a market loss. In the alternative space, however, the decreased valuation is based on information known in advance, with a plan based on a future value add to the asset. This means that while you don’t take a realized loss over the long term, you can benefit from a paper loss to reduce your tax exposure in the short term.

    The J-Curve strategy is underutilized, mainly because so few people know about it, but it can save you hundreds of thousands of dollars when properly applied.

    Ignore what you’ve been taught about retirement savings

    If you want to dramatically change the trajectory of your retirement and create generational wealth for your family, I have a simple piece of advice — ignore everything the financial industry has taught you about tax-deferred accounts.

    Take the time to learn about investing, and avoid the traditional tax-deferred accounts like traditional IRAs, 401(k)s, defined contribution plans, and cash balance plans — instead, leverage assets like Roth IRAs and real estate, which are superior in literally every way.

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    Dr. David Phelps

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  • Homebuyers are making the biggest down payments in these 5 metros. Here’s how much you actually need for a house

    Homebuyers are making the biggest down payments in these 5 metros. Here’s how much you actually need for a house

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    nd3000 | iStock | Getty Images

    Despite signs of a cooling housing market, home prices are still relatively high, resulting in bigger down payments. 

    Over the past year, average down payments in the country’s 50 biggest metros have grown by more than 35%, according to a LendingTree report, based on 30-year fixed-rate mortgage data from Jan. 1 through Oct. 10, 2022.

    While high home prices and interest rates may push some buyers to the sidelines, those still in the market may have “deeper resources,” particularly if they’re downsizing, explained Keith Gumbinger, vice president of mortgage website HSH.

    More for Personal Finance:
    How to best position yourself to buy a house, according to financial advisors
    Your last chance to secure 9.62% annual interest for Series I bonds is Oct. 28
    Federal consumer watchdog is upping efforts to crack down on ‘junk fees’ at banks

    Here are the top five metros with the largest down payments.

    5 metros with the biggest down payments

    In 2022, these five metros have had the highest down payments based on LendingTree mortgage data from from Jan. 1 through Oct. 10, 2022.

    1. San Jose, California: $142,006
    2. San Francisco, California: $131,631
    3. Los Angeles, California: $104,749
    4. San Diego, California: $98,593
    5. Seattle, Washington: $96,056

    With higher average mortgages and annual household incomes, it’s not surprising these metros topped the list. And these down payments represent a large share of yearly earnings.

    How a bigger down payment lowers mortgage costs

    “In general, the more you can afford to put down, the lower your ultimate costs are going to be,” said Gumbinger.

    A larger down payment means a smaller mortgage, which can “certainly help offset the cost of rising interest rates to a degree,” he said.

    While certain kinds of mortgages allow down payments as low as 3%, you’ll have to pay mortgage insurance on loans with less than 20% down, and you may see higher interest rates, Gumbinger said.

    The average interest rate for 30-year fixed-rate mortgages of $647,200 or less is still above 7% for loans with a 20% down payment.

    “More is generally better because that helps to lower your costs overall,” he added.

    In 2021, the median down payment was 13%, with nearly 4 in 10 using proceeds from a previous home sale, according to a 2022 report from the National Association of Realtors.

    With high prices, many buyers struggle to put down 20%

    Despite softening demand, home prices are still “significantly higher than two years ago,” with many buyers struggling to put 10% or 20% down, said Melissa Cohn, regional vice president at William Raveis Mortgage.

    The median home sales price was $454,900 during the third quarter of 2022, compared to $337,500 during the third quarter of 2020, according to Federal Reserve data.

    Many buyers take advantage of lower down payment options, she said, such as 3% or 5% for conventional mortgages or 3.5% for Federal Housing Administration loans.

    “With a smaller down payment, it’s more expensive every which way,” Cohn said. “But for many people, it’s the only way they can afford to get into their home.” 

    While smaller down payments mean higher interest rates and mortgage insurance, home buyers may reduce these expenses in the future, she said. When interest rates drop, there may be a chance to refinance, and buyers may remove mortgage insurance once they reach 20% equity in the home, Cohn said.

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  • ‘He’s not willing to live in my house because it has fewer amenities’: My boyfriend wants me to move in and pay half his monthly costs. Is that fair?

    ‘He’s not willing to live in my house because it has fewer amenities’: My boyfriend wants me to move in and pay half his monthly costs. Is that fair?

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    Dear Quentin,

    My boyfriend owns a house with a 30-year mortgage balance of $150,000 on a 4% interest rate. He has $275,000 in cash and retirement accounts. He is retired.

    My house is paid off. I have $50,000 in cash and retirement accounts. I would like to retire within one to two years.

    We wish to cohabitate but have not been able to agree on a fair “rent” to pay. He is not willing to live in my house because it has fewer amenities. 

    “‘He believes I should pay half of his monthly cost at his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes to have cash. ‘”

    He believes I should pay half of his monthly cost at his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes to have cash. 

    I have forgone that luxury and paid off my mortgage. I am now working on building my savings. I don’t feel it is fair for me to pay half of the mortgage interest expense. 

    I don’t know what repair and maintenance costs should be expected from me, if I have no equity in his house. There are many points of view, none of which feels fair.

    These are the options he set forth:

    · I live in his house and thus get to rent mine out. Pay him half of what I net from that rental.

    · Pay half of the actual costs of living expenses and upkeep on his house while I live there.

    · Pay him what I pay to live in my current home for taxes, insurance, and utilities: $800/month.

    What say you, Moneyist?

    House Owner & Girlfriend 

    Dear House Owner,

    I’m sure your house is just as nice. And just because he believes you should pay half his costs, does not make it so. If you are paying no mortgage on your own home, I don’t believe you should pay one red cent more to live in his home. 

    That is to say, you should not come out of this arrangement paying more, just because (a) he would like you to live in his home and (b) he would like you to help him pay off his mortgage, or his tax and maintenance.

    You both made different choices: Yours was to have a home that’s free-and-clear of a mortgage, so you can spend this time building up your savings for retirement and/or a rainy day. 

    You have worked hard to pay off your mortgage, and you have $50,000 in savings, less than 20% of your boyfriend’s savings. He has $150,000 left on his mortgage, and that’s his choice.

    “If his aim is to find help to pay off half of his mortgage, he can find a tenant to do that for him. ”

    You are not the answer to his long-term financial plans, you are his partner in life. If his aim is to find help to pay off half of his mortgage, he can find a tenant to do that for him. What do you expect of you? Forget what he expects.

    By the way he is approaching this arrangement, it seems like he wants the equivalent of a detergent and a fabric softener — a girlfriend and a tenant in one handy bottle to keep his financial plans smooth and clean.

    Bottom line: You should not compromise any plans to build your nest egg. The lady’s not for turning. Only acquiesce to his plan if — with the help of an actual tenant in your home — it helps you too. 

    In other words, the desired outcome for you is more important than the suggestions he has put forward. He could save $600 a month! That’s his business. Not yours. What do you want to have in your pocket every month?

    Figure out what you want, and then work your way backwards based on that goal. For instance, if you can pay him $800 a month, charge $1,600 rent for your home, and put $800 towards your savings, do that.

    You’ve come a long way. Don’t let these negotiations scupper that.

    Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

    The Moneyist regrets he cannot reply to questions individually.

    By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

    Also read:

    I built a property portfolio with 23 units while we were dating. How much should I give to my fiancé in our prenup?

    ‘We will not outlive our money’: How can we give $10,000 to our nieces and nephews without offending the rest of the family?

    ‘S‘I hate to be cheap’: Is it still acceptable to arrive at a friend’s house for dinner with just one bottle of wine?

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  • Saudi oil giant Aramco unveils $1.5B sustainability fund

    Saudi oil giant Aramco unveils $1.5B sustainability fund

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    Saudi oil and gas company Aramco unveiled a $1.5 billion fund on Wednesday for sustainable investments, part of efforts to burnish the state-owned company’s green credentials in an announcement ahead of the U.N. climate conference next month in Egypt.

    Aramco CEO Amin Nasser said at an investment conference in Saudi Arabia that the fund will focus on “breakthrough technologies that are important and startups that will help us to address climate change.”

    Nasser billed the fund as one of the world’s biggest sustainability-focused venture capital funds and said it would invest globally and launch immediately. He spoke at Saudi Arabia’s Future Investment Initiative meeting, sometimes known as “Davos in the Desert,” a comparison to the World Economic Forum’s annual meeting of corporate bigwigs and world leaders in the Swiss Alps.

    Aramco is one of the largest corporate greenhouse gas emitters. Environmentalists have long accused oil and gas companies of using climate-friendly pledges to “greenwash” their polluting activities.

    One area Aramco’s fund will focus on is carbon capture and storage, which involves sucking heat-trapping carbon dioxide from factory smokestacks and storing it underground.

    Climate experts, however, warn the technology is risky, unproven and expensive and could be used to delay the phaseout of fossil fuels. Others say all untested solutions should be pursued given how little time there is left to meet U.N. emissions-cutting goals.

    Other investment themes the fund will target include greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels.

    Aramco has committed to reaching net zero operational emissions by 2050, but that only accounts for a fraction of the company’s total emissions. It does not include the carbon dioxide released by the burning of fossil fuels that the company produces.

    Oil companies have been using “green-sounding ‘net-zero by 2050’ pledges” to justify technological fixes that will allow them to “keep on digging up and selling oil and gas,” said Pascoe Sabido, a researcher specializing in the energy and climate sector at Corporate Europe Observatory, which investigates European Union business lobbying.

    “Aramco’s sustainability fund has nothing to with fighting climate change and everything to do with extending the life of its fossil fuel business,” he said.

    Saudi Crown Prince Mohammed bin Salman has been trying to diversify the economy away from oil revenue, though the government continues to rely heavily on crude exports.

    The U.N. climate conference, known as COP27, will hold negotiations aimed at limiting global temperature increases next month in the Red Sea resort town of Sharm el-Sheikh, Egypt.

    ———

    Follow AP’s climate and environment coverage at https://apnews.com/hub/climate-and-environment

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  • Australian health insurer says data of all customers hacked

    Australian health insurer says data of all customers hacked

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    CANBERRA, Australia — Australia’s largest health insurer said on Wednesday a cybercriminal had hacked the personal data of all its 4 million customers, as the government introduced legislation that would increase penalties for companies that fail to protect clients’ private information.

    Medibank said “significant amounts of health claims data” had also been accessed in the breach, which was reported to police a week ago when trade in the company’s shares was halted.

    The thief has demanded ransom and has reportedly threatened to expose the diagnoses and treatments of high-profile customers.

    Medibank said its priority was to discover the specific data stolen in relation to each customer and to share that information with those customers.

    The company had previously said the breach was thought to be limited to its subsidiary AHM and foreign students.

    “Our investigation has now established that this criminal has accessed all our private health insurance customers’ personal data and significant amounts of their health claims data,” Medibank chief executive David Koczkar said in a statement to the Australian Securities Exchange.

    “This is a terrible crime – this is a crime designed to cause maximum harm to the most vulnerable members of our community,” Koczkar added, with an apology to customers.

    The government has been planning urgent legislative reforms on cybersecurity regulation since a hacker stole the personal data of almost 10 million current and former customers of Optus, Australia’s second-largest wireless telecommunications carrier.

    Optus became aware on Sept. 21 that personal data of more than one-third of Australia’s population of 26 million had been stolen.

    In introducing amendments to the Privacy Act to Parliament on Wednesday, Attorney-General Mark Dreyfus mentioned both companies and MyDeal, an online retail intermediary that lost the data of 2.2 million customers in a hack revealed two weeks ago.

    “As the Optus, Medibank and MyDeal cyberattacks have recently highlighted, data breaches have the potential to cause serious financial and emotional harm to Australians, and this is unacceptable,” Dreyfus told Parliament.

    “Governments, businesses and other organizations have an obligation to protect Australians’ personal data, not to treat it as a commercial asset,” Dreyfus added.

    The government is critical of companies that amass more customer data than necessary to make money from it in ways unrelated to the services for which the information was provided.

    The penalties for serious breaches of the Privacy Act would increase from 2.2 million Australian dollars ($1.4 million) now to AU$50 million ($32 million) under the proposed amendments.

    A company could also be fined the value of 30% of its revenues over a defined period if that amount exceeded AU$50 million ($32 million).

    Medibank said on Wednesday it did not have cyber insurance and estimated the hack would reduce its earnings by between AU$25 million ($16 million) and AU$35 million ($22 million) by early next year.

    The Medicare trading halt was lifted on Wednesday and shares slid more than 14% in early trading.

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  • Why Gold Isn’t the Ideal Hedge Against Inflation in 2022

    Why Gold Isn’t the Ideal Hedge Against Inflation in 2022

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    Opinions expressed by Entrepreneur contributors are their own.

    Gold has long been regarded as one of the most effective investments for protecting one’s wealth from various possible adverse financial effects. A plummeting stock market and an increase in inflation are two examples of these hazards. Currently, inflation is at extremely high levels, yet gold prices have not been doing particularly well. In terms of the U.S. dollar, it has decreased by over 10% so far this year, which contradicts the overarching perception of gold as an inflation hedge.

    Uncovering the appeal of gold as a traditional inflation hedge

    To reduce their risk exposure, traders and investors in the financial markets often use a strategy known as hedging. In most cases, this is accomplished by creating an opposite position in the market to compensate for any loss that may have been made in their primary position. Hedging may be thought of in a straightforward manner by comparing it to purchasing an insurance policy. When we speak about hedging against inflation, we are referring to the process of preserving your capital from the depreciating effects of inflation. Therefore, to hedge against inflation, investors want assets that are unaffected by growing inflation.

    Gold has always been seen as a hedge against inflation throughout time. As a result, it is the asset of choice for investors who want to ensure that their money will continue to have the same buying power in the future while minimizing the amount of risk they are exposed to. When there is an uptick in inflation that is being kept under control, central banks will not necessarily vote to raise their key interest rates automatically. This indicates that the real interest rates, calculated by subtracting the nominal interest rate from the inflation rate, will be negative for assets such as government bonds.

    When interest rates are at historically low levels, gold’s ability to shift in the opposite way of real interest rates makes it an efficient hedge against inflation. Because of this, investors can protect the value of their funds from experiencing a significant decline.

    Related: Gold Stocks That Might Be Worth A Look As Inflation Continues To Run Hot

    Gold’s decline over 2022

    In March 2022, as a direct consequence of the conflict between Ukraine and Russia, the price of gold reached an all-time high of more than $2,000 per ounce. Although inflation has reached record highs, gold prices have been falling for the last few months.

    As interest rates continue to climb, some investors are considering selling gold, which does not pay interest, to purchase assets that do pay interest. Temptations come in the form of greater returns, which are now accessible in bonds, property or even shares of stock. Other temptations come in the form of higher interest rates on cash.

    Gold’s position in comparison to other asset classes — such as stocks, currencies and bonds — has recently seen significant shifts due to these developments. All asset classes function independently of one another for various reasons, including changes in how the economy operates, modifications to monetary and fiscal policy and many other factors. Because each of these asset classes experiences a different price action dependent on a variety of factors, including supply and demand, the prevailing interest rate regime, inflation, gross domestic product and other factors, investors should view each of these asset classes as having equal importance.

    Nowadays, the reputation of gold as a trustworthy hedge against inflation is in jeopardy as investors go to other parts of the market in which they might seek refuge from increasing costs.

    Related: Here’s How Inflation Might Impact Your Portfolio

    Why isn’t gold performing better?

    Some analysts consider that gold is a good method to protect oneself against inflation before it occurs. However, the situation changes drastically whenever there is significant price inflation — assuming that the Fed successfully brings inflation under control. Once inflation has reached a high level, it is essentially too late to “hedge” against the inflation that has already occurred, and the gold prices often suffer when the dollar is stronger as well. The price of bullion is expressed in terms of the U.S. dollar, and a strong dollar has the effect of dampening excitement.

    “Gold seems to protect purchasing power over a long period — say, 100-plus years — but provides very little protection against inflation in the short term,” according to Kevin Lum, a CFP and founder of Foundry Financial.

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    Ron Bauer

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  • Amazon to allow US customers to pay with Venmo

    Amazon to allow US customers to pay with Venmo

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    FILE – This March 20, 2018, file photo shows the Venmo app on an iPad in Baltimore. Amazon is rolling out a feature that allows shoppers to pay for items using their Venmo accounts. The e-commerce giant said in a news release the payment option will be available for select customers beginning on Tuesday, Oct. 25, 2022. By Black Friday, it will be available nationally. Venmo is largely known for peer-to-peer transactions, but it has been expanding its offering to allow payments to businesses. (AP Photo/Patrick Semansky, File)

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  • Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief

    Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief

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    Might the bear market’s losses at its recent low have gotten so bad that it was actually good news?

    Some eager stock bulls I monitor are advancing this convoluted rationale. The outline of their argument is that when things get bad enough, good times must be just around the corner.

    But their argument tells us more about market sentiment than its prospects.

    At the market’s recent closing low, the S&P 500
    SPX,
    +1.19%
    had dropped to 25% below its early-January high. According to one version of this “so-bad-it’s-good” argument, the stock market in the past was a good buy whenever bear markets fell to that threshold. Following those prior occasions, they contend, the market was almost always higher in a year’s time.

    This is not an argument you’d normally expect to see if the recent low represented the final low of the bear market. On the contrary, it fits squarely within the third of the five-stage progression of bear market grief, about which I have written before: denial, anger, bargaining, depression and acceptance.

    With their argument, the bulls are trying to convince themselves that they can survive the bear market, rationalizing that the market will be higher in a year’s time. As Swiss-American psychiatrist Elisabeth Kübler-Ross put it when creating this five-stage scheme, the key feature of the bargaining stage is that it is a defense against feeling pain. It is far different than the depression and eventual acceptance that typically come later in a bear market.

    Though not all bear markets progress through these five stages, most do, as I’ve written before. Odds are that we have two more stages to go through. That suggests that the market’s rally over the past couple of weeks does not represent the beginning of a major new bull market.

    Numbers don’t add up

    Further support for this bearish assessment comes from the discovery that the bulls’ argument is not supported historically. Only in relatively recent decades was the market reliably higher in a year’s time following occasions in which a bear market had reached the 25% pain threshold. It’s not a good sign that the bulls are basing their optimism on such a flimsy foundation.

    Consider what I found upon analyzing the 21 bear markets since 1900 in the Ned Davis Research calendar in which the Dow Jones Industrial Average
    DJIA,
    +1.34%
    fell at least 25%. I measured the market’s one-year return subsequent to the day on which each of these 21 bear markets first fell to that loss threshold. In seven of the 21 cases, or 33%, the market was lower in a year’s time.

    That’s the identical percentage that applies to all days in the stock market over the past century, regardless of whether those days came during bull or bear markets. So, based on the magnitude of the bear market’s losses to date, there’s no reason to believe that the market’s odds of rising are any higher now than at any other time.

    This doesn’t mean that there aren’t good arguments for why the market might rise. But the 25%-loss concept isn’t one of them.

    Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

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  • Migrants feel inflation’s squeeze twice — at home and abroad

    Migrants feel inflation’s squeeze twice — at home and abroad

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    Dubai, UNITED ARAB EMIRATES — In nearly every corner of the globe, people are spending more on food and fuel, rent and transportation.

    But inflation isn’t affecting people equally. For migrants with relatives relying on money they send back, higher prices are pinching families twice: at home and abroad.

    Migrant workers who send cash to loved ones overseas are often saving less because they’re forced to spend more as prices rise. For some, the only option is hustling harder, working weekends and nights, taking on second jobs. For others, it means cutting back on once-basic things like meat and fruit so they can send what’s left of their savings to family back home, some of whom are struggling with hunger or conflict.

    “I used to save something, about $200 weekly. Now, I can barely save $100 per week. I live by the day,” said Carlos Huerta, a 45-year-old from Mexico working as a driver in New York City.

    Across the Atlantic, Lissa Jataas, 49, sends about 200 euros ($195) from her desk job in Cyprus to family in the Philippines each month. To save money, she looks for cheaper food at the grocery store and buys clothes from a charity shop.

    “It’s about being resilient,” she said.

    Economies reeling from the shocks of the COVID-19 pandemic and effects of climate change were hit again by Russia’s war in Ukraine, which sent food and energy prices soaring.

    Those costs plunged 71 million more people worldwide into poverty in the weeks following the February invasion, which cut off critical grain shipments from the Black Sea region, according to the United Nations Development Program.

    When food and fuel prices shoot up, the money people can send to relatives doesn’t go as far as it once did. The International Monetary Fund estimates that global inflation will peak at 9.5% this year, but in developing countries, it’s much higher.

    “Poorer people are spending far more of their income on food and energy,” said Max Lawson, head of inequality policy at anti-poverty organization Oxfam.

    He said inflation is “pouring fire” on inequality: “It’s almost like poor people are kind of like a sponge that are meant to absorb the economic shock.”

    Mahdi Warsama, 52, came to the U.S. from Somalia as a teenager. An American citizen who works for the nonprofit Somali Parents Autism Network, he sends anywhere from $3,000 to $300 a month to relatives in Somalia, sometimes borrowing money to send what relatives need for medical bills and other emergencies.

    Warsama, who splits his time between Columbus, Ohio, and Minneapolis, estimates he sent $1,500 last month to help his relatives pay for necessities like food and water for themselves and their livestock.

    Thousands of people have died in a drought gripping Somalia, with the U.N. saying half a million children are at risk of death due to malnutrition or near famine.

    “Just as we have inflation in the United States, in Somalia, it’s even worse,” he said, adding that sacks of rice, sugar and flour that once cost $50 are now $70.

    He’s changed his spending habits, is looking for ways to earn more and monitors interest rate hikes and inflation — something he never did before this year.

    “I am more determined to work harder and make more money,” Warsama said. “I have to be more mindful, the fact that I have to help my relatives back home.”

    In New York, Huerta has been living apart from his wife and kids for nearly 20 years, picking up jobs from washing dishes to driving executives — whatever it takes to earn enough.

    He said he sends about $200 a week to his wife and mother in Puebla, Mexico. Huerta also learned to paint houses, so if there’s no demand for a chauffeur, he can still earn around $150 a day.

    With earnings of about $3,600 a month and rent for his Queens apartment going up, Huerta said he’s switched out steak for chicken, eats less fruit as prices skyrocketed and canceled his cable.

    For Jaatas, who has lived in Cyprus for almost two decades, the six relatives she supports in the Philippines are not only facing rising costs but are reeling from the aftermath of a typhoon that knocked out water and electricity.

    “We really like to help our family back home regardless of whatever disaster or shortcomings,” she said.

    Analysis by the Carnegie Endowment for International Peace says the Philippines is the most food-insecure country in emerging Asia due to its reliance on imported food.

    Ester Beatty, who heads a chapter of the European Network of Filipino Diaspora in Cyprus, said it’s common for Filipinos to work Sundays in the Mediterranean island nation as they seek extra income to support relatives back home struggling to afford staples like rice and sugar.

    In developing countries, it’s estimated that lower-income families spend over 40% of their household earnings on food even with government subsidies, said Peter Ceretti, an analyst tracking food security at risk advisory firm Eurasia Group.

    Ali el-Sayyed Mohammed, 26, came to the United Arab Emirates in February after several years searching for work in Egypt.

    “Life is expensive and wages don’t cover enough so I took the step of leaving,” he said. “It was a hard decision at first, but the situation left me with no choice.”

    With his father deceased, Mohammed is the family’s breadwinner, supporting three sisters and his mother. He hails from Beheira, a Nile Delta province that has seen many of its young men leave, sometimes embarking on deadly voyages across the Mediterranean Sea in search of work in Europe.

    With around $1,000 saved up, Mohammed came to Dubai and crashed with friends until he landed a job at one of the city’s most popular Egyptian restaurants, Hadoota Masreya.

    The rising cost of living in Egypt, though, has made his goals of saving enough to help his sister get married next year or secure his own future even harder. Egypt’s inflation has climbed to about 16% as the currency’s value has dropped, making life for millions of Egyptians living in poverty even more difficult.

    “I have a lot of staff whose families rely on the income they make from the restaurant and a big portion of their incomes are sent back home so people there can live,” said Mohamed Younis, manager at Hadoota Masreya.

    The restaurant recently increased wages to keep up with the rising cost of living, he said.

    Younis said growing numbers of Egyptian men are reaching out in search of work. Younis manages a YouTube channel called “Restaurant Clinic” that gives advice in Arabic on succeeding in the restaurant industry. He warns that moving to the UAE comes with risks because finding a job takes time and money.

    Back in Minnesota, 36-year-old school bus driver Mohamed Aden says he moonlights as an Uber driver to support his wife, children and siblings who fled Somalia for Kenya due to violence in his homeland.

    With no work authorization in Kenya, his family relies on the money he sends — nearly half of his $2,000 in monthly earnings.

    But he’s paying more for gas, and food prices are higher in Kenya, so the money doesn’t go as far.

    Aden tries to visit Kenya each December during the cold Minnesota winter.

    “This year, I can’t because of inflation,” he said. “I’m the only one here, feeding the family … but I will go back when I get the money.”

    ———

    Ahmed reported from Minneapolis, Torrens from New York and Hadjicostis from Nicosia, Cyprus.

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  • Companies lure hourly workers with college tuition perks

    Companies lure hourly workers with college tuition perks

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    NEW YORK — When Daniella Malave started working for Chipotle at 17, the main benefit she was seeking was free food. As it turned out, she also got a free college education.

    While working full time for the chain, Malave completed two years of community college with annual stipends of $5,250 from Chipotle. After that, she enrolled in the company’s free online college program, through which she earned a bachelor’s degree in business management from Wilmington University in 2020.

    “I didn’t have to pay for my education,” said Malave, 24, who now works as a recruiting analyst for Chipotle in New Jersey. “Every time I say it out loud, I’m like, ‘Is this real?’”

    Chipotle is one of more than a dozen companies that have launched free or almost-free college programs for their front-line workers over the last decade. Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi and Lowe’s have made free college available to more than 3 million U.S. workers.

    Companies see the programs as a way to recruit and retain workers in a tight labor market or train them for management positions. For hourly employees, the programs remove the financial barriers of obtaining a degree.

    Thousands of people are now taking advantage of the benefits. Starbucks, which operates an online college program through Arizona State University, says 22,000 workers are currently enrolled in its program. Guild Education, which administers programs for Walmart, Hilton, Disney and others and offers online programs at more than 140 schools, says it worked with 130,000 students over the last year.

    But some critics question whether the programs are papering over deeper problems, like pay so low that workers can’t afford college without them or hours so erratic that it’s too hard to go to school in person.

    “I do think they are providing these programs to skirt around the issue of just paying people more, giving people more certainty, improving their quality of life,” said Stephanie Hall, a senior fellow at The Century Foundation, a nonpartisan think tank.

    Hall said a lack of data also makes it difficult to judge the programs’ effectiveness. Chipotle, Walmart, Amazon and Starbucks, for example, don’t share graduation rates, in part because they’re hard to calculate because students often take a semester off or take more than four years to earn a degree. Rachel Carlson, CEO for Guild Education, which also doesn’t reveal graduation rates, says the more relevant data is whether college classes help employees get promotions or wage increases.

    Others question the quality of the online programs and whether students’ degrees will be marketable or help them pursue other careers, especially since many companies limit what employees can study. Discover only fully funds 18 bachelor’s degrees at eight universities through Guild, for example.

    “My sense is that most of these programs are hoping that employees would stay with the company,” said Katharine Meyer, a fellow in the governance studies program for the Brown Center on Education Policy at the Brookings Institution.

    Amazon for its part touts college programs that offer opportunities outside the company, like nursing. But Walmart pared down the number of programs it offers to 60 from 100 because it wanted to focus on skills that would align with careers at the company.

    More than 89,000 workers have participated in Walmart’s college program and more than 15,000 have graduated, said Lorraine Stomski, Walmart’s senior vice president of associate learning and leadership.

    Tanner Humphreys is one of them. He started working at Walmart in 2016, bouncing around hourly jobs as he tried to accommodate his in-person class schedule at Idaho State University. But under the company’s online program, which it launched with Guild in 2018, he transferred his credits to Southern New Hampshire University and graduated in February with a bachelor’s degree in computer science. At 27, he now works at Walmart’s headquarters for its cybersecurity team as a salaried employee.

    “I was working paycheck to paycheck, living with a whole bunch of friends to pay my rent and stuff,” he said. “The change from an hourly to salary is truly life changing.”

    Companies paying for college or graduate school isn’t new. But for decades, the benefit was mostly offered to salaried professionals. In many cases, workers were required to spend thousands of dollars for tuition up front and then get reimbursed by their company.

    Starbucks’ program, which launched in 2014, was initially a tuition-reimbursement program, but in 2021, it began covering tuition costs upfront. Now, 85% of the company’s stores have at least one employee in the program, which will celebrate its 10,000th graduate in December.

    Carlson said companies see an average return of $2 to $3 for every dollar they put into education because it saves recruitment and retention costs. Walmart said participants leave the company at a rate four times lower than non-participants and are twice as likely to be promoted.

    “If I know it’s going to cost me $7,000 to have my cashier not show up tomorrow, I would rather spend our average of our partners today — $3,000 to $5000 — paying for her to go to college,” Carlson said.

    Companies say the programs also give opportunities to minorities. Macy’s, which started its program with Guild earlier this year, said that half of the women enrolling are women of color.

    Some companies, like Chipotle and JPMorgan Chase, offer online programs through Guild as well as stipends students can put toward in-person learning at local institutions. Amazon’s college programs offer a mixture of online and in-person learning at local community colleges or universities.

    Hall said she would like to see more companies offer that kind of flexibility, since online learning isn’t ideal for everyone.

    Zachary Hecker, 26, a Starbucks employee in New Braunfels, Texas, began working toward his bachelor’s in electrical engineering last summer through the company’s college program.

    Hecker appreciates the free tuition, but he often wishes he could attend classes in person or have more choices beyond Arizona State. His classes are challenging, he said, and professors aren’t always to meet and offer guidance.

    But Carlson said online classes are ideal for the average Guild enrollee, who is a 33-year-old woman with children. Carlson said students in its programs often lack consistent access to a car and need to be able to study anytime, like after kids are in bed.

    The chance to earn a free degree can be life-changing. Angela Batista was 16 and homeless when she started working for a Starbucks in New York.

    “College was never in my dream,” Batista said, now 38. “I didn’t even have the audacity to fantasize about it.”

    This December, she will graduate from Arizona State University with a degree in organizational leadership paid for by Starbucks. And now her son, who also works at Starbucks, is starting work toward his own degree.

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  • Companies lure hourly workers with college tuition perks

    Companies lure hourly workers with college tuition perks

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    NEW YORK — When Daniella Malave started working for Chipotle at 17, the main benefit she was seeking was free food. As it turned out, she also got a free college education.

    While working full time for the chain, Malave completed two years of community college with annual stipends of $5,250 from Chipotle. After that, she enrolled in the company’s free online college program, through which she earned a bachelor’s degree in business management from Wilmington University in 2020.

    “I didn’t have to pay for my education,” said Malave, 24, who now works as a recruiting analyst for Chipotle in New Jersey. “Every time I say it out loud, I’m like, ‘Is this real?’”

    Chipotle is one of more than a dozen companies that have launched free or almost-free college programs for their front-line workers over the last decade. Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi and Lowe’s have made free college available to more than 3 million U.S. workers.

    Companies see the programs as a way to recruit and retain workers in a tight labor market or train them for management positions. For hourly employees, the programs remove the financial barriers of obtaining a degree.

    Thousands of people are now taking advantage of the benefits. Starbucks, which operates an online college program through Arizona State University, says 22,000 workers are currently enrolled in its program. Guild Education, which administers programs for Walmart, Hilton, Disney and others and offers online programs at more than 140 schools, says it worked with 130,000 students over the last year.

    But some critics question whether the programs are papering over deeper problems, like pay so low that workers can’t afford college without them or hours so erratic that it’s too hard to go to school in person.

    “I do think they are providing these programs to skirt around the issue of just paying people more, giving people more certainty, improving their quality of life,” said Stephanie Hall, a senior fellow at The Century Foundation, a nonpartisan think tank.

    Hall said a lack of data also makes it difficult to judge the programs’ effectiveness. Chipotle, Walmart, Amazon and Starbucks, for example, don’t share graduation rates, in part because they’re hard to calculate because students often take a semester off or take more than four years to earn a degree. Rachel Carlson, CEO for Guild Education, which also doesn’t reveal graduation rates, says the more relevant data is whether college classes help employees get promotions or wage increases.

    Others question the quality of the online programs and whether students’ degrees will be marketable or help them pursue other careers, especially since many companies limit what employees can study. Discover only fully funds 18 bachelor’s degrees at eight universities through Guild, for example.

    “My sense is that most of these programs are hoping that employees would stay with the company,” said Katharine Meyer, a fellow in the governance studies program for the Brown Center on Education Policy at the Brookings Institution.

    Amazon for its part touts college programs that offer opportunities outside the company, like nursing. But Walmart pared down the number of programs it offers to 60 from 100 because it wanted to focus on skills that would align with careers at the company.

    More than 89,000 workers have participated in Walmart’s college program and more than 15,000 have graduated, said Lorraine Stomski, Walmart’s senior vice president of associate learning and leadership.

    Tanner Humphreys is one of them. He started working at Walmart in 2016, bouncing around hourly jobs as he tried to accommodate his in-person class schedule at Idaho State University. But under the company’s online program, which it launched with Guild in 2018, he transferred his credits to Southern New Hampshire University and graduated in February with a bachelor’s degree in computer science. At 27, he now works at Walmart’s headquarters for its cybersecurity team as a salaried employee.

    “I was working paycheck to paycheck, living with a whole bunch of friends to pay my rent and stuff,” he said. “The change from an hourly to salary is truly life changing.”

    Companies paying for college or graduate school isn’t new. But for decades, the benefit was mostly offered to salaried professionals. In many cases, workers were required to spend thousands of dollars for tuition up front and then get reimbursed by their company.

    Starbucks’ program, which launched in 2014, was initially a tuition-reimbursement program, but in 2021, it began covering tuition costs upfront. Now, 85% of the company’s stores have at least one employee in the program, which will celebrate its 10,000th graduate in December.

    Carlson said companies see an average return of $2 to $3 for every dollar they put into education because it saves recruitment and retention costs. Walmart said participants leave the company at a rate four times lower than non-participants and are twice as likely to be promoted.

    “If I know it’s going to cost me $7,000 to have my cashier not show up tomorrow, I would rather spend our average of our partners today — $3,000 to $5000 — paying for her to go to college,” Carlson said.

    Companies say the programs also give opportunities to minorities. Macy’s, which started its program with Guild earlier this year, said that half of the women enrolling are women of color.

    Some companies, like Chipotle and JPMorgan Chase, offer online programs through Guild as well as stipends students can put toward in-person learning at local institutions. Amazon’s college programs offer a mixture of online and in-person learning at local community colleges or universities.

    Hall said she would like to see more companies offer that kind of flexibility, since online learning isn’t ideal for everyone.

    Zachary Hecker, 26, a Starbucks employee in New Braunfels, Texas, began working toward his bachelor’s in electrical engineering last summer through the company’s college program.

    Hecker appreciates the free tuition, but he often wishes he could attend classes in person or have more choices beyond Arizona State. His classes are challenging, he said, and professors aren’t always to meet and offer guidance.

    But Carlson said online classes are ideal for the average Guild enrollee, who is a 33-year-old woman with children. Carlson said students in its programs often lack consistent access to a car and need to be able to study anytime, like after kids are in bed.

    The chance to earn a free degree can be life-changing. Angela Batista was 16 and homeless when she started working for a Starbucks in New York.

    “College was never in my dream,” Batista said, now 38. “I didn’t even have the audacity to fantasize about it.”

    This December, she will graduate from Arizona State University with a degree in organizational leadership paid for by Starbucks. And now her son, who also works at Starbucks, is starting work toward his own degree.

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

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

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

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

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

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

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

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

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

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

    MarketWatch/IRS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Related:

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

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

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

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  • Federal appeals court temporarily blocks Biden’s student loan forgiveness program

    Federal appeals court temporarily blocks Biden’s student loan forgiveness program

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    ST. LOUIS (AP) — A federal appeals court late Friday issued an administrative stay temporarily blocking President Joe Biden’s plan to cancel billions of dollars in federal student loans.

    The Eighth Circuit Court of Appeals issued the stay while it considers a motion from six Republican-led states to block the loan cancellation program. The stay ordered the Biden administration not to act on the program while it considers the appeal.

    The order came just days after people began applying for loan forgiveness. It was not immediately clear how the stay would impact those have already applied.

    The court set a deadline of Monday at 5 p.m. CDT for a response for a response from the Biden administration and a 5 p.m. Central Tuesday deadline for any replay from the appellants.

    See also: What are Pell grants? Biden student-loan forgiveness climbs to $20,000 for recipients of Pell grants.

    See also: ‘It’s $10,000 that’s on the line.’ Borrowers who used Pell grants decades ago can’t find proof and worry they will lose Biden’s relief.

    The attorneys for the Republican-led states had asked the court to reconsider their effort to block the Biden administration’s program to forgive the student loan debt.

    A notice of appeal to the Eighth U.S. Circuit Court of Appeals was filed late Thursday, hours after U.S. District Judge Henry Autrey in St. Louis ruled that since the states of Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina failed to establish standing, “the Court lacks jurisdiction to hear this case.”

    Separately, the six states also asked the district court for an injunction prohibiting the administration from implementing the debt cancellation plan until the appeals process plays out.

    Speaking at Delaware State University, a historically Black university where the majority of students receive federal Pell Grants, Biden on Friday said nearly 22 million people have applied for the loan relief in the week since his administration made its online application available.

    Also see: How to avoid being scammed when you apply for student-loan forgiveness

    The plan, announced in August, would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, will get an additional $10,000 in debt forgiven.

    The Congressional Budget Office has said the program will cost about $400 billion over the next three decades. James Campbell, an attorney for the Nebraska attorney general’s office, told Autrey at an Oct. 12 hearing that the administration is acting outside its authorities in a way that will cost states millions of dollars.

    The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans. Current college students qualify if their loans were disbursed before July 1. The plan makes 43 million borrowers eligible for some debt forgiveness, with 20 million who could get their debt erased entirely, according to the administration.

    The announcement immediately became a major political issue ahead of the November midterm elections.

    Conservative attorneys, Republican lawmakers and business-oriented groups have asserted that Biden overstepped his authority in taking such sweeping action without the assent of Congress. They called it an unfair government giveaway for relatively affluent people at the expense of taxpayers who didn’t pursue higher education.

    Many Democratic lawmakers facing tough reelection contests have distanced themselves from the plan.

    Biden on Friday blasted Republicans who have criticized his relief program, saying “their outrage is wrong and it’s hypocritical.” He noted that some Republican officials had debt and pandemic relief loans forgiven.

    The six states sued in September. Lawyers for the administration countered that the Department of Education has “broad authority to manage the federal student financial aid programs.” A court filing stated that the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, allows the secretary of education to waive or modify terms of federal student loans in times of war or national emergency.

    “COVID-19 is such an emergency,” the filing stated.

    The HEROES Act was enacted after the Sept. 11, 2001, terrorist attacks to help members of the military. The Justice Department says the law allows Biden to reduce or erase student loan debt during a national emergency. Republicans argue the administration is misinterpreting the law, in part because the pandemic no longer qualifies as a national emergency.

    Justice Department attorney Brian Netter told Autrey at the Oct. 12 hearing that fallout from the COVID-19 pandemic is still rippling. He said student loan defaults have skyrocketed over the past 2 1/2 years.

    Other lawsuits also have sought to stop the program. Earlier Thursday, Supreme Court Justice Amy Coney Barrett rejected an appeal from a Wisconsin taxpayers group seeking to stop the debt cancellation program.

    Barrett, who oversees emergency appeals from Wisconsin and neighboring states, did not comment in turning away the appeal from the Brown County Taxpayers Association. The group wrote in its Supreme Court filing that it needed an emergency order because the administration could begin canceling outstanding student debt as soon as Sunday.

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  • 3 things that will help reduce the sting of high inflation | CNN Business

    3 things that will help reduce the sting of high inflation | CNN Business

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    There’s really nothing nice to say about inflation when it comes to your bottom line.

    It’s hard on your wallet. It’s hard on your savings because it reduces the buying power of the dollars you socked away. And it’s hard on your paycheck, because chances are your last raise did not keep pace with headline inflation, which the latest reading puts at 8.2%.

    But that same high inflation has led to a couple of changes that might offer you a little relief. And every little bit helps.

    Starting next year, your paycheck could be a little bigger thanks to inflation adjustments that the Internal Revenue Service will make to 2023 federal income tax brackets and other provisions.

    The net effect of those adjustments is this: More of your 2023 wages will be subject to lower tax rates than they were this year. And you may be able to deduct higher amounts of income.

    Here’s the skinny on that.

    When you save money in a tax-deferred workplace retirement plan like a 401(k) or 403(b), you can reduce your taxable income because you get a deduction for your contribution the year you make it. The more you save, the more you cut your tax bill.

    Starting next year, you will be allowed to contribute up to $22,500 into your 401(k), 403(b), most 457 plans or the Thrift Savings Plan for federal employees.

    That’s $2,000 – or roughly 9.8% – more than the current $20,500 federal contribution limit, a direct result of higher inflation. Those are the biggest adjustments made to the contribution limit in decades.

    More about those changes and changes to IRA contribution limits can be found here.

    Social Security recipients will receive an annual cost-of-living adjustment of 8.7% next year, the largest increase since 1981.

    The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023.

    No one will be living large on that amount, but the extra cash will offset some of the higher prices for everyday expenses that seniors incur.

    Here’s more on the coming boost to Social Security checks, along with welcome news that there will be a drop in Medicare Part B premiums next year.

    – CNN’s Tami Luhby contributed to this report

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  • Pfizer says COVID-19 vaccine will cost $110-$130 per dose

    Pfizer says COVID-19 vaccine will cost $110-$130 per dose

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    Pfizer will charge $110 to $130 for a dose of its COVID-19 vaccine once the U.S. government stops buying the shots, but the drugmaker says it expects many people will continue receiving it for free.

    Pfizer executives said the commercial pricing for adult doses could start early next year, depending on when the government phases out its program of buying and distributing the shots.

    The drugmaker said it expects that people with private health insurance or coverage through public programs like Medicare or Medicaid will pay nothing. The Affordable Care Act requires insurers to cover many recommended vaccines without charging any out-of-pocket expenses.

    A spokesman said the company also has an income-based assistance program that helps eligible U.S. residents with no insurance get the shots.

    The price would make the two-dose vaccine more expensive for cash-paying customers than annual flu shots. Those can range in price from around $50 to $95, depending on the type, according to CVS Health, which runs one of the nation’s biggest drugstore chains.

    A Pfizer executive said Thursday that the price reflects increased costs for switching to single-dose vials and commercial distribution. The executive, Angela Lukin, said the price was well below the thresholds “for what would be considered a highly effective vaccine.”

    The drugmaker said last year that it was charging the U.S. $19.50 per dose, and that it had three tiers of pricing globally, depending on each country’s financial situation. In June, the company said the U.S. government would buy an additional 105 million doses in a deal that amounted to roughly $30 per shot. The government has the option to purchase more doses after that.

    Pfizer’s two-shot vaccine debuted in late 2020 and has been the most common preventive shot used to fight COVID-19 in the U.S.

    More than 375 million doses of the original vaccine, which Pfizer developed with the German drugmaker BioNTech, have been distributed in the U.S., according to the Centers for Disease Control and Prevention.

    That doesn’t count another 12 million doses of an updated booster that was approved earlier this year.

    The vaccine brought in $36.78 billion in revenue last year for Pfizer and was the drugmaker’s top-selling product.

    Analysts predict that it will rack up another $32 billion this year, according to FactSet. But they also expect sales to fall rapidly after that.

    More than 90% of the adult U.S. population has already received at least one dose of COVID-19 vaccine, according to the CDC. But only about half that population has also received a booster dose.

    ———

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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  • IRS to Make Largest Increase Ever to 401(k) Contribution Limit

    IRS to Make Largest Increase Ever to 401(k) Contribution Limit

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    IRS to Make Largest Increase Ever to 401(k) Contribution Limit

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