Tag: Political/General News

Stocks are rallying now, but the 9 painful stages of this bear market are not even halfway done
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The official definition of a bear market is a 20% or greater decline from an index’s previous high. Accordingly, the three major U.S. stock-market benchmarks — the Nasdaq
COMP,
+0.90%,
the S&P 500
SPX,
+1.14%
and the Dow Jones Industrial Average
DJIA,
+1.12%
— are currently all in a bear market.

Based on my work with stock market strategist Mark D. Cook, a typical bear market goes through nine stages. Right now we are in Stage 4. Keep in mind that a bear market does not always follow these stages in the exact order.
1. Failed rallies: Failed rallies represent the first clue that a bear market is here. Failed rallies often appear before the market “officially” becomes a bear market. If the rally doesn’t have legs and cannot go higher for the next few days or weeks, it confirms that the bear’s claws have sunk in. Along the way, many failed rallies will fool bulls into thinking the worst is over. Watch the rallies for bear-market clues. The rally so far this week is an example. Now in its second day, a failure of this rally would confirm that stocks are not yet out of a bear market.

2. Low-volume rallies: Another bear market clue is that stocks move higher on low volume. This is a clue the major financial institutions aren’t buying, although algos and hedge funds might be. It’s easy for the algos to push prices higher in a low-volume environment, one of the reasons for monster rallies that go nowhere the following day (i.e. a “one-day wonder”).

3. Terrible-looking charts: The easiest way to identify a bear market is by looking at a stock chart. It goes without saying that the charts look dreadful, both the daily and the weekly. While rallies help relieve some of the pressure, they typically don’t last long.

4. Strong selloffs: It’s been a couple of years since markets have experienced extremely strong selloffs, but that record was broken the week of September 26 when the S&P 500 hit a new low for 2022. These strong selloffs are typical of a bear market, followed by rallies that don’t last (a roller-coaster that so far has played out during October).

5. Mutual-fund redemptions: During this stage, after looking at their quarterly and monthly statements, horrified investors throw in the towel and sell their mutual funds (also, some investors refuse to look at those reports). As a result, mutual fund companies are forced to sell (which negatively affects the stock market). Typically, when the indexes fall more than 20%, mutual fund redemptions increase.

6. Complacency turns to panic: As more investor money leaves the market, many investors panic. The most bullish investors are holding on for dear life but are buying fewer stocks. The most nervous investors sell to avoid risking precious gains.

7. All news is bad news: As the bear market pushes stock prices lower, it seems as if most economic data and financial news is negative. Many people become skeptical of the bullish predictions from market professionals, who earlier had promised the market would keep going up. In the depths of the worst bear markets, some bullish professionals are jeered or ignored. Even die-hard bulls are increasingly nervous as the market heads lower and lower (with occasional rallies along the way).

8. Bulls throw in the towel: As trading volume increases on down days, and some investors experience 30% or higher losses, they give up hope and sell. The market turns into a free-for-all as even the Fed appears to have lost control. Many in the media admit that a bear market has arrived.

9. Capitulation: After weeks and months of selloffs (and occasional rallies), many investors are panicked. Investors realize that it may take years before their portfolios will return to breakeven, and some stocks never will. In the final stage of a bear market, trading volume is more than three times higher than normal. Even some of true believers liquidate positions, as many portfolios are down by 40% or 50% and more. Almost every financial asset has fallen, with the exception of fixed income such as CDs and T-bills. Traders or investors who trade on margin feel the most pain.

Read: ‘Material risk’ looms over stocks as investors face bear market’s ‘second act,’ warns Morgan Stanley

Take action

This bear market is fairly young, but already there have been so many failed rallies that many investors are too afraid to buy. Some investors with cash are looking for bargains, but it takes nerves of steel to buy when everyone is selling.

One of the keys to success in the market is to buy what people don’t want. Here are several ideas of what to do (and it is not too late to act):

During bear markets, a key to survival is diversification. If you are patient and are willing to hold positions for years, dollar-cost average into index funds on the way down.

In the early stages of a bear market, consider moving to the sidelines with CDs or Treasury bills.

Consider building a strong cash position, although inflation will cut into some of those gains. Nevertheless, losing to inflation is better than losing 30% in the stock market. The goal is not to lose money; in a bear market, cash is king.

The length and volatility of every bear market is different. No one can predict how this one will turn out, but based on previous bear markets, there’s still a long way to go before it’s over.

Michael Sincere (michaelsincere.com) is the author of “Understanding Options” and “Understanding Stocks.” His latest book, “How to Profit in the Stock Market” (McGraw Hill, 2022), explores bull -and bear market investing strategies.

More: Could there be a stock market rally? Probably. Would it be the end of the bear market? Probably not.

Also read: Whatever you’re feeling now about stocks is normal bear-market grief — and the worst is yet to come
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October 18, 2022
Home builders sentiment index falls for record tenth month in a row in October. Home builders say the ‘situation is unhealthy and unsustainable.’
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The numbers: The National Association of Home Builders’ (NAHB) monthly confidence fell 8 points to 38 in October, the trade group said on Tuesday.

It’s the tenth month in a row that the index has fallen.

Outside of the pandemic, the October reading of 38 is the lowest level since August 2012.
A year ago, the index stood at 80.

The index’s ten-month drop is a new record. The index last fell for 8 months straight in 2006 and 2007.

Key details: All three gauges that underpin the overall builder-confidence index fell.

The gauge that marks current sales conditions fell by 9 points.

The component that assesses sales expectations for the next six months fell by 11 points.

And the gauge that measures traffic of prospective buyers fell by 6 points.

All four NAHB regions posted a drop in builder confidence, led by the south and the west.

It’s also likely that this year will be the first time since 2011 that single-family starts see a decline, the NAHB added.

Big picture: Builders continue to struggle to find buyers with the current rate environment.

Now they’re saying they’re worried about that depressed demand impacting supply moving forward.

Specifically, they’re concerned about housing affordability worsening, with potentially fewer new homes being built in the future.

Mortgage rates have doubled from last year, now exceeding 7%, which has considerably cooled buyer demand.

Home price growth is moderating, but prices have not come down substantially — yet.

The median sales price for a new home was $436,800 in August, according to the U.S. Census Bureau.

What the NAHB said: Builders are expecting single-family starts to fall for the first time in 11 years — and expect additional declines through 2023, said NAHB Chief Economist Robert Dietz, due to the Federal Reserve’s projected rate hikes to control inflation.

“While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates, and ongoing elevated construction costs continue to price out a large number of prospective buyers,” he added.

“This situation is unhealthy and unsustainable,” Jerry Konter, a home builder and developer from Savannah, Ga. and the NAHB’s chairman, said in a statement.
“Policymakers must address this worsening housing affordability crisis,” he added.

What are they saying? “The housing sector – sentiment, building activity and sales – is collapsing under the weight of a rapid increase in interest rates and elevated prices, which are crimping affordability and demand,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a note.

So expect building activity to be depressed, she added.

Market reaction: The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.989%
fell to 3.98% on Tuesday morning.

While the SPDR S&P Homebuilders ETF
XHB,
+2.15%
traded slightly higher during the morning session, and the big home-builder stocks, from D.R. Horton Inc.
DHI,
+2.90%
to Toll Brothers
TOL,
+1.87%
to Lennar
LEN,
+2.97%,
edged higher.
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October 18, 2022
Microsoft Lays Off Employees After Slowdown in Earnings Growth
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Tech

The software giant said earlier this year that it planned to reduce staff by less than 1%
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October 17, 2022
Halloween spending expected to increase by $500 million — as candy prices soar at the highest rate on record

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It’s going to be a big year for Halloween, despite millions of Americans feeling under financial pressure due to inflation.

Total spending is expected to hit $10.6 billion, an increase of 5% or $500 million on last year, the National Retail Federation estimates. That’s up $2 billion or 20% on the $8.8 billion Halloween expenditure in 2019 before the COVID-19 pandemic.

Spending on costumes expect to reach $3.6 billion this year, the NRF survey finds, the highest since 2017. Adult costume spending could reach $1.7 billion this year, $200 million more than last year.

More than half (57%) of Americans said that inflation did impact their Halloween spending, according to a separate LendingTree Halloween spending survey. In fact, nearly a quarter of this group said they were buying less candy.

Inflation was 8.2% in September compared to last year, according to Bureau of Labor Statistics data. It was among the highest level in the past four decades.

Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record, the BLS said. To put that in context: Candy and chewing gum increased 13% from December 1997 to December 2006.

“Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record.”

For those who haven’t started, the competition was already on. In July, Home Depot
HD,
+2.13%
announced that its popular 12-foot skeleton was sold out, three months before the celebration.

A Home Depot spokesperson confirmed the initial sellout of the skeleton in summer, and said the company has been releasing more of these items periodically since then.

Supply-chain disruptions could also complicate the competition. During Hershey’s
HSY,
+0.57%
second-quarter earnings call in July, Chief Executive Officer Michele Buck said the candy manufacturer had to prioritize the everyday candy packaging over the Halloween ones. She said that decision was “critical to enable us to increase advertising and merchandising levels.”

In an email to MarketWatch, however, a Hershey’s spokesperson said this decision was not a sign of shortage, adding that the brand had produced more candies for the season than they had in previous years, as Halloween demand remains high.

“Like every season over the past few years, sell-through at retail remains high with people purchasing candy, décor and other seasonal items earlier and more often. As a result, seasonally packaged candy may be more limited on the shelf as we get to the final week of the season. Fortunately, the same great brands in snack sizes are available to help fill trick-or-treat bags and buckets,” she said.

“On average, Americans plan to spend between $100 and $169 on Halloween candy, décor, cards and costumes.”

On average, Americans plan to spend $100 on average for Halloween candy, décor, cards and costumes, the National Retail Federation said. LendingTree estimates that households will spend $169 this year, with six-figure salary earners and parents with young children planning to spend the most — $340 and $309 respectively.

More than a third of the consumers surveyed admit they plan to spend more than they can afford this year. Generation Z — those aged 18 to 24 — and parents with younger children are the most likely to admit to overspending.

“With the worst of the pandemic further in the rearview mirror, people are excited to get back to spending on the things they love most —, particularly the things they maybe couldn’t fully enjoy over the last few years,” LendingTree chief credit analyst Matt Schulz said.

The most common reason for overspending: 44% of respondents said they spent more than they had expected, while 34% said they were making their children happy.

The NRF concluded that 40% of people are shopping at discount stores this Halloween, 36% at specialty Halloween costume stores, and 31% online. Another 11% said they will shop at thrift stores and resale shops.

“Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” Phil Rist, executive vice-president of strategy at Prosper Insights & Analytics, said. “Younger consumers, particularly those under the age of 25, will look to platforms like Instagram and TikTok for costume inspiration this year.”

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October 17, 2022
CDC identifies new COVID variants that accounted for 11.4% of new cases in week ending Oct. 15

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The Centers for Disease Control and Prevention said a new COVID variant dubbed BQ.1 and a descendant called BQ.1.1 have gained traction in the U.S., accounting for 11.4% of new cases across the nation in the week ending Oct. 15.

The two variants are lineages of BA.5, the omicron subvariant that remains dominant but has shrunk to account for just 67.9% of circulating variants, the agency said in a Friday update. The CDC had previously combined BQ.1 and BQ.1.1 with BA.5 cases because the numbers of the new variants were so small. BQ.1 was first identified by researchers in early September and has been found in the U.K. and Germany, among other places.

New York and New Jersey currently have the highest proportion of BQ.1 and BQ.1.1 infections, at about 20% of overall cases, according to CDC estimates.

“When you get variants like that, you look at what their rate of increase is as a relative proportion of the variants, and this has a pretty troublesome doubling time,” Anthony Fauci, President Joe Biden’s chief medical adviser, said in an interview with CBS News.

Adding to concerns, the variant seems “to elude important monoclonal antibodies,” he added.

Fauci is confident that Moderna
MRNA,
+3.92%,
as well as Pfizer
PFE,
+1.84%
and German partner BioNTech
BNTX,
+2.45%,
will be able to update boosters to target the new subvariant. “The somewhat encouraging news is that it’s a BA.5 sublineage, so there are almost certainly going to be some cross-protections that you can boost up,” he said.

So far, only 14.8 million people living in the U.S. have taken advantage of the new bivalent boosters that were authorized by the Food and Drug Administration in late August. That’s equal to about 7% of the 209 million who were initially eligible.

The FDA authorized the Pfizer booster for use in people aged 12 and older and the Moderna booster for adults aged 18 and older. Last week, the FDA added children aged 5 to 11 to the Pfizer program and children aged 6 through 17 to the Moderna one.

Experts are concerned that the low number of vaccinations is due to a sense that the pandemic is over and no longer poses a major risk for most people. U.S. cases are steadily declining and now stand at their lowest level since mid-April; however, the true tally is likely higher than the official count, because many people are testing at home, where data are not being collected.

The daily average for new cases stood at 37,649 on Sunday, down 19% from two weeks ago, according to a New York Times tracker.

The daily average for hospitalizations was down 5% to 26,475, while the daily average for deaths was down 8% to 374.

But cold weather is expected to bring a new wave of cases, and hospitalizations are rising again in much of the Northeast, the Times tracker is showing.

“That’s the thing that’s so frustrating for me and for my colleagues who are involved in this, is that we have the capability of mitigating against this. And the uptake of the new bivalent vaccine is not nearly as high as we would like it to be,” said Fauci.

Coronavirus Update: Ma rketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• Moderna and Gavi, the Vaccine Alliance, which is supplying vaccines to low- and middle-income countries, have agreed to cancel remaining orders under their 2022 COVID-19 vaccine agreement given “sufficient supply.” The biotechnology company has supplied Gavi with nearly 70 million doses of COVID-19 vaccines, in addition to facilitating the donation of more than 100 million doses. Moderna and Gavi said they will create a new framework that enables Gavi to buy up to 100 million COVID-19 vaccine doses in 2023.

• The World Health Organization, the Food and Agriculture Organization of the United Nations, the United Nations Environment Program and the World Organization for Animal Health on Monday launched a new initiative that aims to address health threats to humans, animals, plants and the environment. The One Health Joint Plan of Action “aims to create a framework to integrate systems and capacity so that we can collectively better prevent, predict, detect, and respond to health threats,” the four agencies said in a statement.

• China is doubling down on its zero-COVID strategy as a historic Communist Party congress opens in Beijing, BBC News reported. Zero COVID was a “people’s war to stop the spread of the virus,” said President Xi Jinping as he kicked off the meeting. There is increasing public fatigue over lockdowns and travel restrictions, and Beijing has come under strict security measures ahead of the congress, sparking frustration in the city, including a rare and dramatic public protest on Thursday criticizing Xi and his strategy.

In a rare display of defiance, two banners were unfurled from a highway overpass in Beijing condemning Chinese President Xi Jinping and his strict COVID-19 policies. The protest took place days before the expected extension of Xi’s tenure.

• Airline stocks rallied Monday after data showed that on Sunday, more people flew than on any other day since before the pandemic. Data from the Transportation Security Administration showed that 2.495 million travelers went through TSA checkpoints on Sunday, which is just above the previous 2022 high of 2.490 million on July 1 and the most since Feb. 11, 2020, which was exactly one month before the World Health Organization declared COVID-19 a global pandemic. In comparison, the day with the fewest travelers since the start of the pandemic was April 12, 2022, with 87,534 people traveling. And in 2019, there were 116 days of more travelers than Sunday, while the average for that year was 2.306 million. The U.S. Global Jets ETF
JETS,
+2.02%
was up 2.2%.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 624.7 million on Monday, while the death toll rose above 6.56 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 96.9 million cases and 1,065,118 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 226.2 million people living in the U.S., equal to 68.1% of the total population, are fully vaccinated, meaning they have had their primary shots. Just 110.8 million have had a booster, equal to 49% of the vaccinated population, and 25.6 million of those who are eligible for a second booster have had one, equal to 39% of those who received a first booster.

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October 17, 2022
I want to retire next year, but I have $25,000 in credit card debt and a major monthly mortgage payment — I also live with my three kids and ex

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I’ll be 57 next month and am divorced with three kids living with me. One is 28, she’s working, another is 21 and a senior in college (with a full scholarship) and the youngest is 15 (a sophomore in high school with a full scholarship).

I plan to retire at the end of next year with $25,000 in credit card debt and 15 more years to pay my mortgage. The credit cards have 0% interest. I have a good medical benefit when I retire and it will cover my two sons under 26 years old. My monthly expenses are $2,000, including life insurance, utilities, and a car payment.

My mortgage is around $4,000 monthly impounded. The interest rate is 2% until January 2022, then 3% until January 2023 and the remaining loan is 4.5%. Is it worth it to refinance to a lower rate? I also plan to just pay the principal and pay interest in December and April. I have two credit cards: one that totals $20,000, where the 0% promo ends in April 2021, and another with $4,500 where the 0% interest promo ends this December.

I work for the state and have a pension and 401(k) and 457 investments that total $110,000. I also have one month’s worth of expenses in an emergency fund. I can only apply for a loan to the retirement accounts while employed.

I would like to ask if retiring will be a good idea. If so, is it appropriate to take a loan with my investment to pay off the credit card debt before retiring? Based on our benefit, I don’t have to repay the debt (to the 401(k)) after my retirement unless I win the lottery or something. There won’t be a penalty. My annual gross income is $96,000.

I’m a cohabitant with my ex on the house but get no contribution from him at all. I am working with my lawyer to see if I have the right to kick him out of the house.

Please help.

Thank you.

CDT

See: I’m a 57-year-old nurse with no retirement savings and I want to retire within seven years. What can I do?

Dear CDT,

You have a lot to juggle, so the fact that you’re reaching out to someone for some financial guidance should be deemed an accomplishment all its own!

The truth is, you may want to hold off on retiring if you can. Having $110,000 in retirement accounts is great, and you don’t want to have to start dwindling that down while also trying to manage a way to effectively pay down credit card debt and a mortgage. Should an emergency arise, taking a big chunk out of that nest egg could end up hurting you significantly in the long run.

“I think she needs to take a hard look at her income and expenses,” said Tammy Wener, a financial adviser and co-founder of RW Financial Planning. “When it comes to retirement, so many things are out of your control, like inflation and investment return. The one thing you do have control over is expenses.” Furthermore, your pension may be enough to maintain your lifestyle — though advisers wondered what exactly you would be getting from that pension every month — but you would still be better off with a larger nest egg to fall back on.

Say you retire next year after all, but you still have credit card debt and hefty bills to pay. Any retirement income you have with and outside of your current funds may not be sufficient for your current living expenses, and if in a few years you realize this, you could end up back in the workforce — though it may be hard to get the same or a similar job you already have.

Let’s look at your 401(k) and 457 plans for a moment. You said you could take a loan and based on your benefit you don’t need to pay it back, but you should be extremely cautious about this. With 401(k) loans, employees may be required to repay that loan if they’re separated from their employers, so this is a stipulation you should absolutely verify. If there was any misunderstanding as to how a loan is treated, that remaining loan would be treated as taxable income when you left your job, Wener said.

Financial advisers usually caution investors not to take loans and withdrawals from retirement accounts if they can avoid it, and in your case, this may be especially true as you plan to retire in the next year. When you take a loan, you may be paying yourself and your account back, but your balance is reduced by the amount of the loan, which means you could lose out on investment returns. In the midst of this pandemic, many of the Americans who took a loan or withdrawal regret it now, a recent survey found. “I would not recommend ‘swapping debt’ by taking a loan from her investments,” said Hank Fox, a financial planner. “Instead, she should pay whatever amount is due each month to avoid the finance charges and continue to pay-down the balances.”

Don’t miss: 5 ways to find free financial advice

Also, consider what would happen if you continued to work: you’d still be able to contribute to a retirement account, boost your savings and, if applicable, reap the rewards with an employer match. You’d also narrow the amount of time you have between retirement and when you can claim Social Security benefits, Fox said.

Outside of the retirement accounts, you should try to build a “sizable” emergency fund, Wener said. Financial advisers typically suggest three to six months’ worth of living expenses, though you might want to strive for closer to six to offset any undesirable scenarios.

I’m not sure what the motivation was to retire next year, but if you can delay it, this may be the best solution. “The first thing I would recommend is that she reconsider retiring next year,” Fox said. “Since she will be 57 in November and assuming she is in good health, she should expect to be in retirement for 30 years or more.”

If postponing retirement is not an option, and it isn’t always, he suggests reducing or eliminating your mortgage, since it’s your largest expense by far. You could refinance, Wener said. Interest rates are very low these days, and while you may end up paying a little more every month for the next two years compared with that 2% rate you currently have, you’d end up paying the same and then less from February 2022 and on.

As for your credit cards, having a 0% interest rate is such a huge help in paying off debts faster, so you should try to extend that benefit, either by calling and asking about your options with your current credit card company or looking at alternative 0% interest cards.

A financial adviser — specifically, a Certified Financial Planner — could really help you crunch the numbers and find meaningful ways to make the most of the money you have now and will be getting in retirement, said Vince Clanton, principal and investment adviser representative at Chancellor Wealth Management.

An adviser can gather information on your current earnings and expenses, retirement savings, potential Social Security benefits and pension and create a financial plan to help you navigate retirement. “Voluntary retirement, and particularly early retirement, are very big decisions,” Clanton said. “It’s extremely important to know and understand all of the variables.”

Letters are edited for clarity.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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October 15, 2022
Nikola founder Trevor Milton found guilty of securities fraud over misleading statements

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A federal jury in New York convicted Nikola Corp. founder Trevor Milton of securities fraud for what prosecutors said were his repeated lies about the development of the company’s zero-emissions trucks and technology.

The guilty verdict caps the downfall of Milton, who founded Nikola
NKLA,
-1.29%
in his basement in 2015 and took it public in 2020 at a valuation of $3.3 billion, when the company hadn’t sold a single truck. The company’s market valuation briefly exceeded that of industry giants such as Ford Motor Co.
F,
-0.85%

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October 14, 2022
Study finds Paxlovid can interact badly with some heart medications, and White House renews COVID emergency through Jan. 11

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A new study has found that the COVID antiviral Paxlovid can interact badly with certain heart medications, raising concerns for patients with cardiovascular risk who test positive.

The study was published in the Journal of the American College of Cardiology and found the reaction involved such medications as blood thinners and statins. As patients who are hospitalized with COVID are at elevated risk of heart problems, they are likely to be described Paxlovid, which was developed by Pfizer
PFE,
-0.45%.

“Co-administration of NMVr (Paxlovid) with medications commonly used to manage cardiovascular conditions can potentially cause significant drug-drug interactions and may lead to severe adverse effects,” the authors wrote. “It is crucial to be aware of such interactions and take appropriate measures to avoid them.”

The news comes just days after the White House made a renewed push to encourage Americans above the age of 50 to take Paxlovid or use monoclonal antibodies if they test positive and are at risk of developing severe disease.

White House coordinator Dr. Ashish Jha told the New York Times that greater use of the medicine could reduce the average daily death count to about 50 a day from close to 400 currently.

“I think almost everybody benefits from Paxlovid,” Jha said. “For some people, the benefit is tiny. For others, the benefit is massive.”

Yet a smaller share of 80-year-olds with COVID in the U.S. is taking it than 45-year-olds, Jha said, citing data said he has seen.

On Thursday, the White House extended its COVID pubic health emergency through Jan. 11 as it prepares for an expected rise in cases in the colder months, the Associated Press reported.

The public health emergency, first declared in January 2020 and renewed every 90 days since, has dramatically changed how health services are delivered.

The declaration enabled the emergency authorization of COVID vaccines, as well as free testing and treatments. It expanded Medicaid coverage to millions of people, many of whom will risk losing that coverage once the emergency ends. It temporarily opened up telehealth access for Medicare recipients, enabling doctors to collect the same rates for those visits and encouraging health networks to adopt telehealth technology.

Since the beginning of this year, Republicans have pressed the administration to end the public health emergency.

President Joe Biden, meanwhile, has urged Congress to provide billions more in aid to pay for vaccines and testing. Amid Republican opposition to that request, the federal government ceased sending free COVID tests in the mail last month, saying it had run out of funds for that effort.

Separately, the head of the World Health Organization urged countries to continue to surveil, monitor and track COVID and to ensure poorer countries get access to vaccines, diagnostics and treatments, reiterating that the pandemic is not yet over.

Tedros Adhanom Ghebreyesus said most countries no longer have measures in place to limit the spread of the virus, even though cases are rising again in places including Europe.

“Most countries have reduced surveillance drastically, while testing and sequencing rates are also much lower,” Tedros said in opening remarks at the IHR Emergency Committee on COVID-19 Pandemic on Thursday.

“This,” said the WHO leader, “is blinding us to the evolution of the virus and the impact of current and future variants.”

U.S. known cases of COVID are continuing to ease and now stand at their lowest level since late April, although the true tally is likely higher given how many people overall are testing at home, where the data are not being collected.

The daily average for new cases stood at 38,530 on Thursday, according to a New York Times tracker, down 19% from two weeks ago. Cases are rising in six states, namely Nevada, New Mexico, Kansas, Maine, Wisconsin and Vermont, and are flat in Wyoming. They are falling everywhere else.

The daily average for hospitalizations was down 7% at 26,665, while the daily average for deaths is down 7% to 377.

The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging. Illustration: Ryan Trefes

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• Federal Health Minister Karl Lauterbach has urged German states to reintroduce face-mask requirements for indoor spaces due to high COVID cases numbers, the Local.de reported. Lauterbach was launching his ministry’s new COVID campaign on Friday. “The direction we are heading in is not a good one,” he said at a press conference in Berlin, adding it’s better to take smaller measures now than be forced into drastic ones later.

• Health officials in Washington and Oregon said Thursday that a fall and winter COVID surge is likely headed to the Pacific Northwest after months of relatively low case levels, the AP reported. King County (Wash.) Health Officer Dr. Jeff Duchin said during a news briefing that virus trends in Europe show a concerning picture of what the U.S. could soon see, the Seattle Times reported.

Two banners unfurled from a highway overpass in Beijing condemned Chinese President Xi Jinping and his strict Covid policies, in a rare display of defiance. The protest took place days before the expected extension of the leader’s tenure.

• Kevin Spacey’s trial on sexual-misconduct allegations will continue without a lawyer who tested positive for COVID on Thursday, Yahoo News reported. The “American Beauty” and “House of Cards” star is on trial in Manhattan federal court facing allegations in a $40 million civil lawsuit that he preyed upon actor Anthony Rapp in 1986 when Rapp was 14 and Spacey was 26. Jennifer Keller’s diagnosis comes after she spent about five hours cross-examining Rapp on the witness stand over two days — a few feet away from the jury box without wearing a mask.

• A man who presents himself as an Orthodox Christian monk and an attorney with whom he lived fraudulently obtained $3.5 million in federal pandemic relief funds for nonprofit religious organizations and related businesses they controlled, and spent some of it to fund a “lavish lifestyle,” federal prosecutors said Thursday. Brian Andrew Bushell, 47, and Tracey M.A. Stockton, 64, are charged with conspiracy to commit wire fraud and unlawful monetary transactions, the U.S. attorney’s office in Boston said in a statement, as reported by the AP.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 623.9 million on Monday, while the death toll rose above 6.56 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 96.9 million cases and 1,064,821 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 226.2 million people living in the U.S., equal to 68.1% of the total population, are fully vaccinated, meaning they have had their primary shots. Just 110.8 million have had a booster, equal to 49% of the vaccinated population, and 25.6 million of those who are eligible for a second booster have had one, equal to 39% of those who received a first booster.

Some 14.8 million people have had a shot of the new bivalent booster that targets the new omicron subvariants.

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October 14, 2022
Weekend reads: The Federal Reserve gets a lot of flak for inflation, but it has actually hit its target recently
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The U.S. stock market benchmark rebounded from a steep loss on the day when the government published hot inflation numbers.

The S&P 500 Index ended Thursday with a 2.6% gain after investors took a closer look and saw a significant improvement from July through September, as Rex Nutting explained.
The whipsaw action wasn’t limited to stocks, and was described by Rick Rieder, the chief investment officer for global fixed income at BlackRock, as “one of the craziest days” of his career.

The bond market’s warning

Some investors who focus on stocks might not realize that the bond market is much larger, and that its movements can cause government and central-bank policies to shift. Larry McDonald, founder of The Bear Traps Report and author of “A Colossal Failure of Common Sense,” which described the 2008 failure of Lehman Brothers, explained just how bad the action was in the U.K. bond market over the past few weeks, when 30-year government bonds issued in December traded as low as 24 cents on the dollar. He also predicted what will happen if the Federal Reserve continues on its current course of interest-rate increases.

Related outlooks for interest rates:

Fed’s benchmark interest rate may peak above 5% after Sept inflation data, some economists think

This is how high interest rates might rise, and what could scare the Federal Reserve into a policy pivot

Bullish signs for long-term stock investors

Getty Images

Michael Brush argues the Federal Reserve is moving too quickly to raise interest rates and cool the U.S. economy. He expects a rapid decline in inflation and a new bull market for stocks. In a column, he shares five sentiment indicators that suggest it is time to buy stocks — especially this group of companies.

More: Here’s how you’ll know stock-market lows are finally here, says the legendary investor who called 1987 crash

Don’t forget to look over your portfolio

Beth Pinsker explains how to make sure your investments are best diversified to fit your needs during time of uncertainty in all financial markets.

Read on: $22 billion in I-bond sales can’t be wrong. Why you may want to buy them even when their rate resets soon

Time for a refreshing COLA if you are on Social Security

Getty Images

The Social Security Administration has announced that its cost-of-living adjustment (COLA) for 2023 will be 8.7%, the largest increase in four decades. There is more to the story, including tax implications and changes to Medicare, as Jessica Hall and Alessandra Malito explain.

Related: Can I stop and restart Social Security benefits?

Pay attention to Medicare open enrollment

Getty Images/iStockphoto

Medicare’s annual open enrollment season runs from Oct. 15 to Dec. 7. The majority of Medicare recipients don’t review their plans each year, which can cost them a lot of money. Here’s how to approach Medicare’s 2023 enrollment period.

You won’t like this ‘new normal’ for the housing market

West Coast housing markets are already seeing price declines as mortgage loan rates hit 7%.

Stefani Reynolds/Agence France-Presse/Getty Images

Freddie Mac said interest rates on 30-year mortgage loans averaged 6.92% on Oct. 13, up from 3.05% a year earlier. Mortgage Daily said rates had hit 7.10% — the highest in 20 years — and economists are warning these levels could be a “new normal.”

A homeowner locked-in with a low interest rate on their mortgage loan will be reluctant to sell. And some would-be buyers may now be priced out of the market because of much higher loan payments. Here’s what economists expect for home prices in 2023.

More housing coverage from Aarthi Swaminathan: ‘No housing market is immune to home-price declines’: Home values are already falling in these pandemic boomtowns.

Tips for maximizing financial aid for college

Getty Images/iStockphoto

When you fill out the Free Application for Federal Student Aid, or FAFSA, to help pay for your child’s college education, there may be a problem — old news. The form reflects your financial situation up to two years ago, and things may have worsened recently. Here’s how to make sure schools have the most recent information to help you get as much financial aid as possible.

This is why Florida’s insurance market is such a mess

Florida insurers are not only suffering from storm-damage payouts.

Joe Raedle/Getty Images

Hurricanes are nothing new to Floridians, but insurers in the state are losing money even though premiums have doubled over the past five years. Shahid S. Hamid, the director of the Laboratory for Insurance at Florida International University, explains why the Florida insurance market is so distorted.

Here’s a travel option you may never have heard of — home swapping

Villefranche-sur-mer on the French Riviera.

istock

Home swapping can give you an opportunity to live as a local in a faraway place while spending much less than you would as a tourist. Here’s how it works.

Want more from MarketWatch? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.
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October 14, 2022
Why Kwasi Kwarteng could not survive the battle with the Bank of England

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Jeremy Hunt was appointed U.K. chancellor of the exchequer on Friday after Kwasi Kwarteng was sacked in response to the market’s rebellion over his tax-cutting budget.

Kwarteng lasted just 38 days, the second shortest tenure for the office in history. It was Prime Minister Liz Truss who wielded the knife. But, arguably, it was Bank of England Governor Andrew Bailey who set up the hit.

Simply put, in the fight between monetary and fiscal policy, Threadneedle Street has taken out Downing Street. Once Bailey stood his ground, Kwarteng was toast.

To explain, a quick recap. Kwarteng’s recent budget containing £45 billion in tax cuts, mainly funded by more debt issuance, came at a time when government borrowing costs were already rising as the Bank of England raised interest rates to combat inflation at 40-year highs around 10%.

Indeed, Kwarteng’s proposals were seen juicing up spending just as the BoE was trying to damp demand in its efforts to push inflation back to the 2% target. The market recognized this dichotomy and rebelled, realizing that it faced more debt sales and even tighter monetary policy.

The resulting selling by over-leveraged pension funds caused a crash in gilt prices and surging yields to multi-decade highs, threatening to break the U.K pension system. Bailey stepped in to calm the markets by pledging a bond buying package of up to £65 billion — right around the time when he had planned to actually sell gilts as part of quantitative tightening.

It worked, mostly. But, keen to ensure the City of London would undertake the necessary deleveraging quickly, and it would not be infected with moral hazard, Bailey said the support would end on Friday October 14th.

And this week he stressed it would definitely end on Friday.

So, to the present. What Bailey’s insistence meant was that the BoE, via monetary policy, was done helping. If the bond market was still to be worried about the situation when it opened on Monday, then it would have to be the fiscal side that changed.

And for the fiscal side to shift it would mean the removal of the tax-cutting elements that so rattled investors. Some, like the axing of the top rate of personal tax, had already been reversed. But more needed to be done to try and recover a sense of fiscal prudence.

And that, inevitably, meant the removal of the author of the budget: Kwarteng.

Shortly after his departure, Truss announced that she was seeking to calm markets and had decided to cancel the corporation tax cut that had been a cornerstone of the budget. The proposal, delivered just 21 days ago, was now an ideological husk.

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October 14, 2022
U.K. bond yields continue to drop as Kwarteng set to be fired with further tax-cut reversals expected

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U.K. bond yields continued to drop on Friday, on expectations the U.K. government will further backtrack on its tax cut plans and that U.K. Prime Minister Liz Truss will fire Chancellor of the Exchequer Kwasi Kwarteng.

Kwarteng was photographed entering Downing Street after flying home early from the International Monetary Fund meeting in Washington, D.C. Truss’s office has announced a press conference. Both The Times and the Financial Times newspapers reported Kwarteng will be fired.

The yield on the 30 year gilt
TMBMKGB-30Y,
4.265%
— which was high as 5.1% as recently as Wednesday — fell 28 basis points to 4.27%.

The yield on the 10-year gilt
TMBMKGB-10Y,
3.947%
dropped 25 basis points to 3.95%. Yields move in the opposite direction to prices.

The pound
GBPUSD,
-0.75%
fetched $1.1273, down from $1.1331 on Thursday.

Kwarteng in recent interviews has done nothing to douse speculation the U.K. government will further pare its tax-cut plans.

Speculation of further U-turns has centered around corporate tax cuts in particular. Other tax cuts that could be reversed include the planned personal income-tax reduction to 19% from 20%.

The government has already relented on a planned cut for those making above £150,000. Financial markets gyrated after Kwarteng announced its mini-budget, which called for some £45 billion in tax cuts on top of capping energy prices. Investec Securities estimates the total cost of the stimulus to be on the order of £150 billion.

A medium-term fiscal plan, as well as an independent forecast from the Office of Budget Responsibliitiy, is due at the end of October.

The Bank of England’s emergency bond-buying plan — designed to ease tensions for pension funds — is due to expire on Friday.

The central bank says it’s purchased £17.8 billion in securities.

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October 14, 2022
North Korea fires another missile, flies warplanes near border

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North Korea early Friday local time launched a short-range ballistic missile toward its eastern waters and flew warplanes near the border with South Korea, further raising animosities triggered by the North’s recent barrage of weapons tests.

South Korea’s military also said it detected North Korea firing about 170 rounds of artillery from eastern and western coastal areas near the border region and that the shells fell inside maritime buffer zones the Koreas established under a 2018 military agreement on reducing tensions.

The North Korean moves suggest it would keep up a provocative run of weapons tests designed to bolster its nuclear capability for now. Some experts say North Korea would eventually want the United States and others to accept it as a nuclear state, lifting economic sanctions and making other concessions.

South Korea’s Joint Chiefs of Staff said in a statement the missile lifted off from the North’s capital region at 1:49 a.m. Friday (1649 GMT Thursday; 12:49 p.m. EDT Thursday). It said the North’s artillery firings were a clear violation of the 2018 agreement, which created buffer zones along land and sea boundaries and no-fly zones above the border to prevent clashes and that the military has boosted its surveillance and defense posture in close coordination with the United States.

Friday’s ballistic launch extended a record number of missile demonstrations by North Korea this year as it exploits the distraction created by Russia’s war on Ukraine to accelerate its arms development and increase pressure on Washington and its Asian allies.

In response to North Korea’s intensifying testing activity and hostility, South Korea on Friday imposed unilateral sanctions on the North for the first time in five years, targeting 15 North Korean individuals and 16 organizations suspected of involvement in illicit activities to finance North Korea’s nuclear weapons and missile program

Japanese Defense Minister Yasukazu Hamada said the missile flew on an “irregular” trajectory — a possible reference to describe the North’s highly maneuverable KN-23 weapon modeled on Russia’s Iskander missile.

“Whatever the intentions are, North Korea’s repeated ballistic missile launches are absolutely impermissible and we cannot overlook its substantial advancement of missile technology,” Hamada said. “North Korea’s series of actions pose threats to Japan, as well as the region and the international community, and are absolutely intolerable.”

The South Korean and Japanese militaries assessed that the missile traveled 650 to 700 kilometers (403-434 miles) at a maximum altitude of 50 kilometers (30 miles) before landing in waters between the Korean Peninsula and Japan.

The U.S. Indo-Pacific Command said in a statement the North Korean launch didn’t pose an immediate threat to U.S. personnel or territory, or to its allies, adding that the U.S. commitments to the defense of South Korea and Japan remain “ironclad.”

It was the latest in a series of missile launches by North Korea in recent weeks.

North Korea said Monday that its missile tests in the past two weeks simulated nuclear attacks on key South Korean and U.S. targets. It said the tests included a new intermediate-range missile that flew over Japan and demonstrated a potential range to reach the U.S. Pacific territory of Guam, and a ballistic missile fired from an inland reservoir, a first for the country.

North Korea said the weapons tests were meant to issue a warning to Seoul and Washington for staging “dangerous” joint naval exercises involving a U.S. aircraft carrier.

Friday’s launch was the North’s second since its announcement on the simulation of nuclear strikes. Some observers had predicted North Korea would likely temporarily pause its testing activities in consideration of its major ally China, which is set to begin a major political conference Sunday to give President Xi Jinping a third five-year term as party leader.

North Korea said leader Kim Jong Un supervised the test-launches Wednesday of long-range cruise missiles that he said successfully demonstrated his military’s expanding nuclear strike capabilities.

After the tests, Kim praised the readiness of his nuclear forces, which he said were fully prepared for “actual war to bring enemies under their control at a blow” with various weapons systems that are “mobile, precise and powerful.” He also vowed to expand the operational realm of his nuclear armed forces, according to KCNA.

The urgency of North Korea’s nuclear program has grown since it passed a new law last month authorizing the preemptive use of nuclear weapons over a broad range of situations.

Most of the recent North Korean tests were mostly of short-range nuclear-capable missiles targeting South Korea. Some experts say North Korea’s possible upcoming nuclear test, the first of in five years, would be related to efforts to manufacture battlefield tactical warheads to be placed on such short-range missiles.

These developments sparked security jitters in South Korea, with some politicians and scholars renewing their calls for the U.S. to redeploy its tactical nuclear weapons in South Korea as deterrence against intensifying North Korean nuclear threats.

South Korea’s Joint Chiefs of Staff said in a separate statement that North Korea had flown warplanes, presumably 10 aircraft, near the rivals’ border late Thursday and early Friday, prompting South Korea to scramble fighter jets.

The North Korean planes flew as close as 12 kilometers (7 miles) north of the inter-Korean border. South Korea responded by scrambling F-35 jets and other warplanes, according to the Joint Chiefs of Staff.

There were no reports of clashes. A similar incident took place last week, but it was still uncommon for North Korea to fly its warplanes near the border. Also, in the previous flight last week, North Korean warplanes flew much farther away from the border.

North Korea’s military early Friday accused South Korea of carrying out artillery fire for about 10 hours near the border. It didn’t say whether the artillery fire was an exercise or firing at North Korea. The North Korean military said it took unspecified “strong military countermeasures” in response.

“The (North) Korean People’s Army sends a stern warning to the South Korean military inciting military tension in the front-line area with reckless action,” an unidentified spokesman for the General Staff of the Korean People’s Army said in a statement carried by KCNA.

The public affairs office at the South Korean Defense Ministry said it had no immediate comment.

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October 13, 2022
Supreme Court refuses to get involved in Trump’s Mar-a-Lago case

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WASHINGTON (AP) — The Supreme Court on Thursday rejected former President Donald Trump’s plea to step into the legal fight over the FBI search of his Florida estate.

The justices did not otherwise comment in turning away Trump’s emergency appeal.

Trump had pressed the court on an issue relating to classified documents seized in the search authorized by a federal judge of Mar-a-Lago.

The Trump team was asking the justices to overturn a lower court ruling and permit an independent arbiter, or special master, to review the roughly 100 documents with classified markings that were taken in the Aug. 8 search of Mar-a-Lago.

A three-judge panel from the Atlanta-based U.S. Court of Appeals for the 11th Circuit last month limited the special master’s review to the much larger tranche of non-classified documents. The judges, including two Trump appointees, sided with the Justice Department, which had argued there was no legal basis for the special master to conduct his own review of the classified records.

But Trump’s lawyers said in their application to the Supreme Court that it was essential for the special master to have access to the classified records to “determine whether documents bearing classification markings are in fact classified, and regardless of classification, whether those records are personal records or Presidential records.”

The Justice Department said in a Supreme Court filing that Trump’s request had no merit.

The FBI says it seized roughly 11,000 documents, including about 100 with classification markings, during its search. The Trump team asked a judge in Florida, Aileen Cannon, to appoint a special master to do an independent review of the records.

Cannon subsequently assigned a veteran Brooklyn judge, Raymond Dearie, to review the records and segregate those that may be protected by claims of attorney-client privilege and executive privilege. The Justice Department objected to Dearie’s ability to review the classified records, prompting the 11th Circuit to side with the department.

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October 13, 2022
Trump subpoenaed by House Jan. 6 committee in unanimous vote

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Former President Donald Trump was subpoenaed for testimony about the Jan. 6, 2021, attack on the U.S. Capitol by the House committee probing the insurrection, in a unanimous vote on Thursday. The committee held what is likely to be its final public hearing on Thursday. Trump is unlikely to comply, according to a CNN analyst, and the panel could decide to hold him in criminal contempt of Congress.

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October 13, 2022
Some good news: One key driver of inflation is finally showing signs of easing

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Rent growth is beginning to cool. But it’s descending from a heck of a peak.

Rental prices climbed 7.2% between September 2021 to September of this year, the largest annual increase since 1982, according to consumer price data released Thursday. Overall, shelter costs were also among the most significant drivers in rising consumer prices, along with the cost of food and medical care, the Labor Department said.

Still, it’s not all bad news for tenants. A new report from Realtor.com out Thursday found that nationwide, median rental prices in 50 large metros grew at their slowest annual pace in 16 months in September — at 7.8%. That marked the second consecutive month of single-digit year-over-year growth for 0-2 bedroom properties, and it meant that median asking rents fell by $12 in a month, Realtor.com said.

Housing inflation in the Consumer Price Index lags trends in the rental market, though, meaning the slowdown in rent growth might not register in the data for a while.

While median rental prices are still nearly 23% higher than they were two years ago, they’re no longer climbing at breakneck speeds with no end in sight. These days, economists say, that counts as a silver lining.

“After more than a year of double-digit yearly rent gains and nearly as many months of record-high rents, it’s especially important to see consistency before we confirm a major shift like the recent rental market cool-down,” Realtor.com Chief Economist Danielle Hale said in a statement. “But September data provides that evidence, as national rents continued to pull back from their latest all-time high registered just two months ago.”

“This return of more seasonal norms indicates that rental markets are charting a path back toward a more typical balance between supply and demand, compared to the previous year,” Hale added. “We expect rent growth to keep slowing in the months ahead, partly driven by the impact of inflation on renters’ budgets.”

Affordability, however, is worsening, Realtor.com said. Blame the fact that consumer prices are rising faster than wages.

(Realtor.com is operated by News Corp
NWSA,
+1.64%
subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

A Redfin
RDFN,
-3.55%
report out Thursday, meanwhile, said rents grew 9% year-over-year in September — the slowest pace since August 2021. Rents were still way up year-over-year in cities like Oklahoma City (24.1%), Pittsburgh (20%), and Indianapolis (17.9%.)

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October 13, 2022
OPEC+ supply cut threatens to tip global economy into recession, IEA says

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An oil supply cut from the Organization of the Petroleum Exporting Countries threatens to deepen a global energy crisis by sending oil prices higher at a time of already elevated inflation and weak economic growth, the International Energy Agency said.

Last week’s two million barrel-a-day reduction in the group’s output targets, which incurred sharp criticism from the U.S. and its partners, will tighten the oil market further at a moment of extreme vulnerability with few additional sources of supply available to compensate, the Paris-based agency said Thursday.

The cut’s impact will be to exacerbate a mix of high oil prices and weakening global growth, both of which would undermine longer-term demand for oil, the IEA said, as it slashed its oil-demand forecasts.

“With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the IEA said in its monthly market report.

The IEA cut its oil-demand growth forecasts by 470,000 barrels a day for 2023, to 1.7 million barrels a day. It also lowered its 2022 oil-demand growth forecast by 60,000 barrels a day, to 1.9 million barrels a day. Oil demand growth has steadily fallen throughout the year and is forecast to contract in the fourth quarter by 340,000 barrels a day, the IEA said.

OPEC has said higher oil prices are necessary to spur fresh investments in oil production but the IEA said constraints among oil producers meant additional supplies would be scant. U.S. shale oil producers facing higher costs are withholding investment, while most Western nations are consciously moving away from fossil fuels. OPEC’s own members are struggling with a lack of spare capacity.

The cut has undone a trend of steadily recovering oil supply following the Covid-19 pandemic “with the resulting higher price levels exacerbating market volatility and heightening energy security concerns,” the IEA said.

The IEA’s report characterizes the supply cut as a lose-lose situation for both oil producers and consumers, as buyers of oil suffer from higher prices in the short term, while oil producers stand to see weaker demand as a result.

The cut also comes ahead of an EU embargo on Russian oil and a plan by the Group of Seven wealthy nations to cap oil prices, both of which analysts warn could further undermine global energy supplies.

Russia has said it would cut production and withhold supplies from nations participating in the price cap mechanism. Meanwhile, time was running out for EU states to find alternative sources of energy to compensate for the still-high levels of oil currently imported from Russia, the IEA said.

Russia’s oil exports to the EU fell by 390,000 barrels a day in September, to 2.6 million barrels a day, the IEA said. The EU has just two months until the embargo on Russian crude imports comes into force, but still needs to find an alternative source for 1.3 million barrels a day of Russian oil, it warned.

OPEC has said its production cut is aimed at stabilizing oil markets and countering declining oil-demand growth. On Wednesday, in its own report, the group sharply slashed its forecasts for global economic growth and oil demand.

For 2022, the IEA now expects total oil demand of 99.6 million barrels a day and 101.3 million barrels a day in 2023.

The agency cuts its forecast for global oil supply next year by 1.2 million barrels a day to 100.6 million barrels a day and by 200,000 barrels a day to 99.9 million barrels a day for 2022.

Write to Will Horner at william.horner@wsj.com

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October 13, 2022
Moderna Stock Takes Off on Cancer Vaccine News

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Moderna

stock shot up after

Merck

said it is exercising an option to work on a personalized cancer vaccine with the Covid-19 vaccine maker.

Merck (ticker: MRK) will pay

Moderna

(MRNA) $250 million for the joint development and future commercialization of the vaccine, which is currently in Phase 2 clinical trials. The two companies had announced a “strategic collaboration” in June 2016.

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October 12, 2022
Infowars host Alex Jones ordered by Connecticut jury to pay $965 million over Sandy Hook ‘hoax’ claims

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WATERBURY, Conn. (AP) — The conspiracy theorist Alex Jones should pay $965 million to people who suffered from his false claim that the Sandy Hook Elementary School shooting was a hoax, a jury in Connecticut decided Wednesday.

The verdict is the second big judgment against the Infowars host over his relentless promotion of the lie that the 2012 massacre never happened, and that the grieving families seen in news coverage were actors hired as part of a plot to take away people’s guns.

It came in a lawsuit filed by the relatives of five children and three educators killed in the mass shooting, plus an FBI agent who was among the first responders to the scene. A Texas jury in August awarded nearly $50 million to the parents of another slain child.

“ Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales. ”

The Connecticut trial featured tearful testimony from parents and siblings of the victims, who told about how they were threatened and harassed for years by people who believed the lies told on Jones’s show.

Strangers showed up at their homes to record them. People hurled abusive comments on social media. Erica Lafferty, the daughter of slain Sandy Hook principal Dawn Hochsprung, testified that people mailed rape threats to her house.

Mark Barden told of how conspiracy theorists had urinated on the grave of his 7-year-old son, Daniel, and threatened to dig up the coffin.

Superior Court Judge Barbara Bellis discusses a question from the jury with attorneys on Tuesday.

H. John Voorhees III/Hearst Connecticut Media/AP

Testifying during the trial, Jones acknowledged he had been wrong about Sandy Hook. The shooting was real, he said. But both in the courtroom and on his show, he was defiant.

He called the proceedings a “kangaroo court,” mocked the judge, called the plaintiffs’ lawyer an ambulance chaser and labeled the case an affront to free speech rights. He claimed it was a conspiracy by Democrats and the media to silence him and put him out of business. “I’ve already said ‘I’m sorry’ hundreds of times, and I’m done saying I’m sorry,” he said during his testimony.

Twenty children and six adults died in the shooting on Dec. 14, 2012. The defamation trial was held at a courthouse in Waterbury, about 20 miles from Newtown, where the attack took place.

The lawsuit accused Jones and Infowars’ private parent company, Free Speech Systems, of using the mass killing to build his audience and make millions of dollars.

Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales.

Don’t miss: Alex Jones’s audience and Infowars’ revenue grew as Jones alleged Sandy Hook school massacre was a hoax

Also: Alex Jones has created a ‘living hell’ of harassment and death threats, testify Sandy Hook school parents

In both the Texas lawsuit and the one in Connecticut, judges found the company liable for damages by default after Jones failed to cooperate with court rules on sharing evidence, including failing to turn over records that might have showed whether Infowars had profited from knowingly spreading misinformation about mass killings.

See: Texas jury orders Alex Jones to pay more than $49 million in damages in Sandy Hook case

Because he was already found liable, Jones was barred from mentioning free-speech rights and other topics during his testimony.

Jones now faces a third trial, in Texas around the end of the year, in a lawsuit filed by the parents of another child killed in the shooting.

It is unclear how much of the verdicts Jones can afford to pay.

During the trial in Texas, he testified he couldn’t afford any judgment over $2 million. Free Speech Systems has filed for bankruptcy protection. But an economist testified in the Texas proceeding that Jones and his company were worth as much as $270 million.

Read on: Alex Jones’s Infowars picks new CRO for bankruptcy

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October 12, 2022

Meet the 10 biggest megadonors for the 2022 midterm elections

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With four weeks until Election Day, congressional candidates are on track to break midterm fundraising records, having raised nearly $2.5 billion so far this cycle. That’s already 70% more than what was raised during the 2014 cycle and just $200 million shy of the total raised during the full 2018 cycle.

This cycle has also seen record-shattering outside spending, topping $1 billion through the beginning of October, according to an OpenSecrets estimate.

The increase in spending and fundraising is due in large part to the involvement of millionaire and billionaire megadonors who have sought to influence the outcome of an election in which both chambers of Congress are in play.

“When megadonors pump millions of dollars into super PACs, they get to help call the shots,” said Michael Beckel, research director at Issue One, a nonpartisan political reform organization. “Massive spending from a megadonor can influence what issues are talked about on the campaign trail and in Congress.”

Super PACs are independent political action committees that can raise unlimited sums of money but are not allowed to coordinate with a candidate or campaign. Due to contribution limits, such as those restricting individuals’ candidate contributions to $2,900 per election per candidate, most megadonor spending goes to super PACs.

More context: These are the basics of campaign finance in 2020 — in two handy charts

A MarketWatch analysis of Federal Election Commission data through the end of September shows that these 10 business moguls and philanthropists are the biggest federal-level donors this cycle.

Read: These 3 races could determine whether Democrats or Republicans control the Senate in 2023

And see: If this seat flips red, Republicans will have ‘probably won a relatively comfortable House majority’

Top federal-level megadonors this cycle

Rank	Contributor	Total Contributions	For Republicans	For Democrats	Nonpartisan/Bipartisan
1	George Soros	$128,782,000	$0	$128,782,000	$0
2	Ken Griffin	$50,955,800	$50,955,800	$0	$0
3	Richard Uihlein	$49,117,000	$49,117,000	$0	$0
4	Sam Bankman-Fried	$39,931,000	$201,000	$37,725,000	$2,005,000
5	Jeff Yass	$32,754,000	$32,754,000	$0	$0
6	Peter Thiel	$30,189,000	$30,189,000	$0	$0
7	Fred Eychaner	$22,343,000	$0	$22,343,000	$0
8	Stephen Schwarzman	$21,870,000	$21,865,000	$0	$5,000
9	Larry Ellison	$21,003,000	$21,003,000	$0	$0
10	Ryan Salame	$18,932,000	$17,432,000	$0	$1,500,000

	Totals:	$415,877,000	$223,517,000	$188,850,000	$3,510,000

Source: MarketWatch analysis of FEC data as of Sept. 30, 2022
Note: Partisan breakdown includes non-party affiliated PACs with over 95% of their spending benefitting one party, data has been rounded to the nearest thousand

Big spending by itself doesn’t automatically mean winning. There have been notable instances of the financially strongest candidates losing (such as crypto-backed House candidate Carrick Flynn earlier this year and billionaire Michael Bloomberg’s self-financed presidential bid) — but money can certainly help put a candidate on the right track.

“Money alone doesn’t guarantee electoral success, but every candidate prefers to be the one with more money to spend,” Beckel said. He added: “Outside spending on behalf of a candidate isn’t a silver bullet that’s going to guarantee electoral success. But it goes a long way to boosting somebody’s name recognition, and to presenting them as a viable candidate — somebody who has the resources to run a competitive campaign.”

Information about the spending by the top 10 donors this cycle has been compiled from MarketWatch’s analysis of FEC data and filings, super PAC websites and previously reported comments. Read on to find out who are the top 10 biggest donors this cycle.

10. Ryan Salame — $19 million

Ryan Salame, the co-CEO of FTX Digital Markets, a subsidiary of cryptocurrency exchange FTX, founded a hybrid PAC earlier this year called American Dream Federal Action. The vast majority ($15 million) of the $19 million Salame has spent this cycle has gone into bankrolling the PAC, which has spent $2.4 million in independent expenditures supporting Illinois Republican Rep. Rodney Davis, $2 million supporting Republican Senate candidate Katie Britt from Alabama, and $1.2 million each supporting Arkansas GOP Sen. John Boozman and Brad Finstad, a GOP congressional candidate in Minnesota.

On its website, the PAC describes itself as “organization dedicated to electing forward-looking candidates — those who want to protect America’s long term economic and national security by advancing smart policy decisions now.” A representative for Salame didn’t respond to a request for comment.

9. Lawrence Ellison — $21 million

The co-founder of Oracle
ORCL,
+0.26%
has similarly bankrolled a PAC this election cycle — giving a total $20 million to Opportunity Matters Fund Inc. The super PAC has largely held onto its funds so far, recent FEC records show, having $17 million cash on hand as of the end of August. Of the independent expenditures it has made this cycle, it spent the most on Georgia Republican Senate candidate Herschel Walker ($1.3 million), Wisconsin Republican Sen. Ron Johnson ($1.3 million) and North Carolina Senate candidate and current Republican Rep. Ted Budd ($1.1 million). A representative for Ellison didn’t respond to a request for comment.

8. Stephen Schwarzman — $22 million

Billionaire Stephen Schwarzman, the CEO of private-equity giant Blackstone
BX,
-2.41%,
is the eighth biggest donor at the federal level this cycle. In March, Schwarzman gave $10 million to both the Senate Leadership Fund and Congressional Leadership Fund, super PACs aimed at obtaining a Republican majority in the Senate and House, respectively. A representative for Schwarzman didn’t respond to a request for comment.

7. Fred Eychaner — $22 million

Fred Eychaner has also contributed $22 million so far this cycle, but unlike most of the spending on this list, his has been directed toward Democratic causes. The chairman of Chicago-based Newsweb Corporation has given $9 million to the House Majority PAC and $8 million to the Senate Majority PAC, as well as just under $1.5 million to the Democratic National Committee and several hundred thousands to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee. A representative for Eychaner didn’t respond to a request for comment.

6. Peter Thiel — $30 million

Venture capitalist Peter Thiel was heavily involved in backing Ohio Republican J.D. Vance’s primary bid, giving $15 million in the spring to the Vance-aligned Protect Ohio Values PAC.

The massive primary investment was “historic” and record-setting, according to Beckel, who added that Thiel’s involvement in the Ohio Senate primary could mark “a new chapter of how mega donors are choosing to play in politics.”

“I think it’s become clear for a lot of megadonors that there are high stakes to a lot of primaries, and by spending in the primary, where there is typically lower turnout than in say, a statewide general election, they can get a lot of bang for their buck by investing in a primary election,” Beckel added.

Thiel has indicated that he doesn’t intend to put any more money toward Vance’s bid as he reportedly believes the Ohio candidate is on track to win, and instead will focus his funding on Arizona Republican Blake Masters’ bid to oust Democratic Sen. Mark Kelly in the final weeks leading up to the midterm election.

Thiel, known for his roles in PayPal
PYPL,
-1.69%,
Palantir
PLTR,
-0.25%
and Facebook
META,
-3.92%,
has also given a total $15 million to the Masters-aligned PAC, Saving Arizona, with his most recent contribution in July. Both Vance and Masters are venture capitalists, but Masters has worked with Thiel. He served as chief operating officer of Thiel Capital and president of the Thiel Foundation, and he co-authored a book on startups with Thiel in 2014. A representative for Thiel didn’t respond to a request for comment.

5. Jeff Yass — $33 million

Options trader Jeff Yass, who founded trading firm Susquehanna International Group, has contributed about $33 million on a federal level this cycle. Yass has given $15 million to the School Freedom Fund, or the equivalent of 97% of the PAC’s total fundraising. The group focuses on the issue of school choice, and its website states that some bureaucrats “hindered the development and education of our youth through school closures, mask mandates, critical race theory, and more.”

Aside from the School Freedom Fund, Yass’ other biggest contributions are to the conservative Club for Action ($6.5 million), Kentucky Freedom ($5 million), Protect Freedom ($2 million) and Crypto Freedom ($1.9 million). A representative for Yass didn’t respond to a request for comment.

4. Sam Bankman-Fried — $40 million

Sam Bankman-Fried, the founder and CEO of FTX, is the main funder behind Protect Our Future PAC, giving it $27 million of the $28 million it raised this cycle.

The organization says on its website that it focuses on promoting Democratic candidates championing pandemic preparedness and prevention “so this is the last time in our lifetime, and our children’s lifetimes, that we will face the devastation that has gripped communities across the U.S. since 2020.”

The group spent more than $10 million supporting Democrat Carrick Flynn’s House bid in Oregon. Flynn lost his primary in May by 18 points despite his massive outside spending advantage. In addition to Flynn, the group has made over $1 million in independent expenditures each supporting Democratic congressional candidates Lucy McBath, a current representative from Georgia; Jasmine Crockett of Texas, Adam Hollier of Michigan, Valerie Foushee of North Carolina and Shontel Brown, a current representative from Ohio.

Most of the other $10 million Bankman-Fried spent this cycle has gone to the House Majority PAC ($6 million) and the crypto PAC GMI ($2 million).

While the vast majority of his spending has supported Democratic candidates and causes, Bankman-Fried does not classify himself as an exclusively Democratic donor — for instance he gave $105,000 to the Alabama Conservatives Fund in June and $45,000 to the NRCC in July.

He told Politico in August that he is “legitimately worried about doing things that will make people view me as partisan when it’s not how I feel … because I think it both misses what I’m trying to do and makes it harder for me to act constructively.” A representative for the FTX boss didn’t respond to a request for comment.

3. Richard Uihlein — $49 million

Richard Uihlein is the founder of the shipping and business supply company Uline, and is a longtime conservative donor. This cycle has seen nearly $50 million in political spending by him, with just over half of it going to Club for Growth Action. Uihlein has also given about $14 million to Restoration PAC, an organization that says it is “dedicated to strengthening the foundations that made America the greatest nation in the world: God, family, education, and community.”

Uihlein’s next largest contributions are to the conservative Team PAC ($2.5 million) and the Arkansas Patriots Fund ($2.2 million), which earlier this year made ad buys favoring Republican Sen. John Boozman’s primary opponent. A representative for Uihlein didn’t respond to a request for comment.

2. Ken Griffin — $51 million

With $51 million in federal-level political spending, Ken Griffin, CEO of hedge fund Citadel, is the second most prolific donor this cycle.

The biggest beneficiaries are the Republican-aligned Congressional Leadership Fund with $18.5 million in contributions, the Senate Leadership Fund with $10 million and Honor Pennsylvania, a super PAC that backed Republican Dave McCormick’s Senate bid. McCormick lost in the primary to Mehmet Oz by less than a thousand votes.

While Griffin spent about $64 million during the last cycle, his $51 million figure this year marks by far the most he has spent during a midterm cycle. During the 2018 cycle, his contributions totaled less than $8 million.

A spokesperson for Griffin told MarketWatch that Griffin “supports leaders who are committed to protecting the American Dream and pursuing policies that will create a better future for the United States.”

“The right policies will focus on creating rewarding jobs, prioritizing public safety, and investing in a strong national defense,” his spokesperson said. “Preserving the American Dream will require that every child is well educated, can access great healthcare, and has the opportunity to succeed.”

1. George Soros — $129 million

Not one donor comes close to matching the sum that billionaire philanthropist George Soros has contributed this cycle: $129 million. However, much of that money hasn’t actually been put to work this cycle.

The majority of those on this list have focused their funding on Republican causes, but Soros’ money has gone to Democratic groups — specifically Democracy PAC II, whose $125 million in contributions comprises 99% of its fundraising. The super PAC spent more than $80 million on Democratic groups and candidates during the 2020 election.

A representative for Soros pointed MarketWatch to a Politico article from January, in which Soros said the $125 million is aimed at supporting pro-democracy “causes and candidates, regardless of political party” who are invested in “strengthening the infrastructure of American democracy: voting rights and civic participation, civil rights and liberties, and the rule of law” and called his contribution a “long-term investment” that will support political work beyond this year.

So far this cycle, Democracy PAC has spent very little and holds $113 million in available cash. Contributions the PAC has made this cycle include $5 million to the Senate Majority PAC, $2.5 million to One Georgia and $1 million to both Care in Action and House Majority PAC.

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October 11, 2022

The stock market is in trouble. That’s because the the bond market is ‘very close to a crash.’

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Don’t assume the worst is over, says investor Larry McDonald.

There’s talk of a policy pivot by the Federal Reserve as interest rates rise quickly and stocks keep falling. Both may continue.

McDonald, founder of The Bear Traps Report and author of “A Colossal Failure of Common Sense,” which described the 2008 failure of Lehman Brothers, expects more turmoil in the bond market, in part, because “there is $50 trillion more in world debt today than there was in 2018.” And that will hurt equities.

The bond market dwarfs the stock market — both have fallen this year, although the rise in interest rates has been worse for bond investors because of the inverse relationship between rates (yields) and bond prices.

About 600 institutional investors from 23 countries participate in chats on the Bear Traps site. During an interview, McDonald said the consensus among these money managers is “things are breaking,” and that the Federal Reserve will have to make a policy change fairly soon.

Pointing to the bond-market turmoil in the U.K., McDonald said government bonds that mature in 2061 were trading at 97 cents to the dollar in December, 58 cents in August and as low as 24 cents over recent weeks.

When asked if institutional investors could simply hold on to those bonds to avoid booking losses, he said that because of margin calls on derivative contracts, some institutional investors were forced to sell and take massive losses.

Read: British bond market turmoil is sign of sickness growing in markets

And investors haven’t yet seen the financial statements reflecting those losses — they happened too recently. Write-downs of bond valuations and the booking of losses on some of those will hurt bottom-line results for banks and other institutional money managers.

Interest rates aren’t high, historically

Now, in case you think interest rates have already gone through the roof, check out this chart, showing yields for 10-year U.S. Treasury notes
TMUBMUSD10Y,
3.898%
over the past 30 years:

The yield on 10-year Treasury notes has risen considerably as the Federal Reserve has tightened during 2022, but it is at an average level if you look back 30 years.

FactSet

The 10-year yield is right in line with its 30-year average. Now look at the movement of forward price-to-earnings ratios for S&P 500
SPX,
-0.03%
since March 31, 2000, which is as far back as FactSet can go for this metric:

FactSet

The index’s weighted forward price-to-earnings (P/E) ratio of 15.4 is way down from its level two years ago. However, it is not very low when compared to the average of 16.3 since March 2000 or to the 2008 crisis-bottom valuation of 8.8.

Then again, rates don’t have to be high to hurt

McDonald said that interest rates didn’t need to get anywhere near as high as they were in 1994 or 1995 — as you can see in the first chart — to cause havoc, because “today there is a lot of low-coupon paper in the world.”

“So when yields go up, there is a lot more destruction” than in previous central-bank tightening cycles, he said.

It may seem the worst of the damage has been done, but bond yields can still move higher.

Heading into the next Consumer Price Index report on Oct. 13, strategists at Goldman Sachs warned clients not to expect a change in Federal Reserve policy, which has included three consecutive 0.75% increases in the federal funds rate to its current target range of 3.00% to 3.25%.

The Federal Open Market Committee has also been pushing long-term interest rates higher through reductions in its portfolio of U.S. Treasury securities. After reducing these holdings by $30 billion a month in June, July and August, the Federal Reserve began reducing them by $60 billion a month in September. And after reducing its holdings of federal agency debt and agency mortgage-backed securities at a pace of $17.5 billion a month for three months, the Fed began reducing these holdings by $35 billion a month in September.

Bond-market analysts at BCA Research led by Ryan Swift wrote in a client note on Oct. 11 that they continued to expect the Fed not to pause its tightening cycle until the first or second quarter of 2023. They also expect the default rate on high-yield (or junk) bonds to increase to 5% from the current rate of 1.5%. The next FOMC meeting will be held Nov. 1-2, with a policy announcement on Nov. 2.

McDonald said that if the Federal Reserve raises the federal funds rate by another 100 basis points and continues its balance-sheet reductions at current levels, “they will crash the market.”

A pivot may not prevent pain

McDonald expects the Federal Reserve to become concerned enough about the market’s reaction to its monetary tightening to “back away over the next three weeks,” announce a smaller federal funds rate increase of 0.50% in November “and then stop.”

He also said that there will be less pressure on the Fed following the U.S. midterm elections on Nov. 8.

Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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October 11, 2022

Tag: Political/General News

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