ReportWire

Tag: Regulation/Government Policy

  • Apple can sell its latest smartwatches again after court pauses FTC import ban

    Apple can sell its latest smartwatches again after court pauses FTC import ban

    The latest Apple Watches are available again after the company scored a legal victory Wednesday.

    “We are thrilled to return the full Apple Watch lineup to customers in time for the new year,” Apple
    AAPL,
    +0.05%

    said in a statement to MarketWatch. “Apple Watch Series 9 and Apple Watch Ultra 2, including the blood-oxygen feature, will become available for purchase again in the United States at Apple Stores starting today and from apple.com tomorrow by 3 p.m. ET.”

    A U.S. appeals court earlier Wednesday temporarily blocked a government commission’s import ban on popular Apple Watch models following a patent dispute with medical-technology firm Masimo Corp.
    MASI,
    -4.57%
    .

    The court’s order allows Apple to temporarily resume selling the Apple Watch Series 9 and Apple Watch Ultra 2. Both watches were pulled from Apple’s website last week and off store shelves this week when the ban went into effect. The appeals court is weighing a longer halt on the import and sales ban.

    Masimo declined to comment.

    On Tuesday, the tech giant filed an emergency request for the U.S. Court of Appeals for the Federal Circuit to halt the ban at least until U.S. Customs and Border Protection decides whether redesigned versions of its watches infringe Masimo’s patents.

    The appeals court’s decision will allow the U.S. Customs department to consider Apple’s redesign of the offending Apple Watch models. A fix is expected by Jan. 12. Apple said in the motion Tuesday it could “suffer irreparable harm” if the ban is kept in place while the appeal is ongoing.

    Shares of Apple were flat in trading Wednesday.

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  • Why this Treasury market trade continues to draw scrutiny

    Why this Treasury market trade continues to draw scrutiny

    Inside the $26 trillion Treasury market, perhaps the deepest and most liquid place for government debt in the world, a particular trade continues to draw scrutiny ahead of year-end. It’s the “basis trade,” a way of profiting on the differences in prices between Treasurys and Treasury futures. While such differences can be relatively tiny, one’s potential profit or loss can be exponentially magnified when leverage is involved.In a nutshell, the basis trade takes an arbitrage approach: It involves borrowing from the repo market for leverage and financing, and then taking a short Treasury futures position and a long Treasury…

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  • Bluebird Bio Stock Is in Free Fall

    Bluebird Bio Stock Is in Free Fall

    Two weeks ago, bluebird bio secured Food and Drug Administration approval for its gene therapy for sickle cell disease, a significant milestone for the roughly 100,000 people in the U.S. who suffer from the condition.

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  • Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

    Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

    Videogame maker Activision Blizzard has agreed to pay nearly $55 million to settle a California civil-rights lawsuit brought over complaints of sexual harassment, discrimination and pay disparities by women employees that helped trigger the company’s acquisition by Microsoft.

    The settlement, announced by the California Civil Rights Department on Friday evening, resolves the lawsuit filed against the “Call of Duty” videogame studio by the agency in 2021 over claims that it “discriminated against women at the company, including by denying promotion opportunities and paying them less than men for doing substantially similar work,” CRD said.

    The agreement, subject to court approval, will see Activision pay nearly $46 million into a settlement fund dedicated to compensating women employees and contract workers at the company, plus more than $9 million in attorneys’ fees and costs. Additionally, Activision will take steps “to help ensure fair pay and promotion practices at the company,” including retaining an independent consultant to evaluate its compensation and promotion policies.

    Yet the settlement also sees CRD withdraw its initial claims alleging a culture of widespread, systemic workplace sexual harassment at Activision, according to a copy of the agreement provided to MarketWatch. The document notes that the department is filing an amended complaint that removes the sexual-harassment allegations against the company and focuses on the gender-based pay and promotion claims.

    CRD made no note of its prior sexual-harassment claims against Activision in its announcement Friday. A spokesperson for the department said the statement “largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices.

    Representatives for Activision declined to comment.

    The Wall Street Journal first reported the news of the settlement Friday.

    The California agency’s complaint was one of several high-profile investigations by both state and federal regulators in recent years into alleged workplace misconduct at Activision and failures by its leadership to respond appropriately. 

    While Activision repeatedly denied the allegations, they ramped up pressure on the Santa Monica, Calif.-based company and its CEO, Bobby Kotick, and eventually led to a $68.7 billion takeover bid by Microsoft
    MSFT,
    +1.31%

    in January 2022. The acquisition closed this October after receiving approval by U.K. and E.U. antitrust regulators, though the U.S. Federal Trade Commission continues to challenge the deal in court. Kotick is expected to leave the company, which he led for more than three decades, at the end of this year.

    The settlement would be the second-largest ever for the California Civil Rights Department, according to the Journal, after its $100 million agreement with another Los Angeles-area videogame developer, Riot Games, to resolve gender-discrimination allegations in 2021. The agency had initially sought a much-larger settlement with Activision, the publication reported, citing how the state had estimated the company’s liability at nearly $1 billion to some 2,500 employees with potential claims.

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  • Apple braces for EU antitrust order over App Store: report

    Apple braces for EU antitrust order over App Store: report

    The European Union is about to hit Apple Inc. 
    AAPL,
    +0.75%

    with a ban on App Store rules that govern music-streaming rivals like Spotify Technology
    SPOT,
    -0.93%

    and a potential hefty fine in the regulatory body’s latest bid to thwart the power and reach of Big Tech. A Bloomberg report Wednesday said the EU’s imminent antitrust order would prohibit Apple’s practice of blocking music services from pushing their users away from the App Store to alternative subscription options. Regulators are also mulling a fine of up to 10% of Apple’s annual sales. Apple was not immediately available to comment on the report.

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  • China’s debt outlook cut to negative by Moody’s

    China’s debt outlook cut to negative by Moody’s

    Moody’s Investors Service on Tuesday cut the outlook on China’s debt to negative from stable citing expectations that the national government will have to step in to rescue regional and local governments.

    Moody’s kept China’s long-term rating at A1.

    “The change to a negative outlook reflects rising evidence that financial support will be provided by the government and wider public sector to financially-stressed regional and local governments and state-owned enterprises, posing broad downside risks to China’s fiscal, economic and institutional strength,” said the note from the rating agency, which last month cut the outlook on the U.S.

    China’s property troubles mean that regional and local governments face a loss of land sale revenue, which accounted for 37% of their revenue in 2022 outside of central government transfers. Moody’s says regions that relied most heavily on land sales won’t be able to offset that revenue loss from other sources.

    Moody’s estimates one-third of state-owned enterprises debt — some 40% of GDP — has an interest coverage below 1, which indicates weak debt sustainability. “While not all [state-owned enterprises] are likely to need direct government support, even a moderate proportion doing so over the medium term would represent a significant crystallization of contingent liabilities for the sovereign, increasing the costs of financial support and diminishing fiscal strength,” said Moody’s.

    In a rough day for Chinese stocks, the Hang Seng
    HK:HSI
    fell 1.9%, and the Shanghai Composite
    CN:SHCOMP
    dropped 1.7%.

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  • Why Sam Altman is a no-brainer for Time’s ‘Person of the Year’

    Why Sam Altman is a no-brainer for Time’s ‘Person of the Year’

    Nothing has changed our lives more this year than the advances made in artificial intelligence — and they have the potential to alter our lives in even more dramatic ways down the road.

    So it’s a no-brainer that Sam Altman, co-founder and recently returned chief executive of the once-little-known OpenAI, should be named “Person of the Year” by Time Magazine when the selection is announced Wednesday.

    Altman has already cracked Time’s shortlist, joining candidates from varied backgrounds, including world leaders like Xi Jinping and entertainment phenomenon Taylor Swift. The selection ultimately comes down to an “individual or group who most shaped the previous 12 months, for better or for worse.”

    But Time has often given “agents of change” its yearly honor — just look at 2021 winner Elon Musk — and Altman certainly fits that bill.

    No other innovation in the past year has had an impact in such disparate realms. OpenAI publicly launched its ChatGPT chatbot late last year, and as the technology grew viral in 2023, it upended the stock market, Silicon Valley and companies that wouldn’t normally be classified as technology businesses. The ensuing product development and surge in generative AI investment revitalized a tech industry that had sunk into the doldrums amid a pandemic hangover.

    Admittedly, it will take time for companies to realize the true financial benefits of AI: Nvidia Corp.
    NVDA,
    -2.68%

    is among the few to generate serious money from the frenzy so far. But market researcher IDC predicted that global spending on AI, including software, hardware and services for AI-centric systems will reach $154 billion this year, up 27% from a year ago. That total could zoom above $300 billion by 2026.

    Also read: One year after its launch, ChatGPT has succeeded in igniting a new era in tech

    And AI isn’t only impacting the corporate world. The technology is already affecting our daily lives, and it will have even deeper effects going forward. Chatbots are getting smarter on websites, facilitating better customer service. They’re starting to alter the workplace as well, spitting out mostly coherent marketing copy, research and even, gasp, news articles — albeit with plenty of errors.

    At first, ChatGPT seemed like a fun way to kill time or get homework help, but the chatbot and its ilk will seriously alter the working world, helping to eliminate perhaps millions of jobs. Morgan Stanley recently predicted that more than 40% of occupations will be affected by generative AI in the next three years.

    Altman himself has been the face of OpenAI in the past year. He’s talked up the technology, but he also appeared at congressional hearings in May to discuss potential regulation of AI, testifying that “if this technology goes wrong, it can go quite wrong.” His recent firing and quick rehiring by OpenAI and its small, nonprofit board late last month fueled a veritable media storm before the Thanksgiving holiday in the U.S.

    Time chooses its persons of the year for their impact, not because they’re saints. And Altman’s own story is not without controversy. The recent brouhaha over his leadership of OpenAI is believed to have been caused by a deep schism over the ethics of AI development. The board seemingly wanted more guardrails and precautions, and feared that rushed development could irrevocably doom mankind.

    Read in the Wall Street Journal: How effective altruism split Silicon Valley and fueled the blowup at OpenAI

    Altman, who also wooed Microsoft Corp.
    MSFT,
    -1.43%

    to become an investor in OpenAI, emerged the victor in the upheaval with his own company’s altruistic board. Had Altman truly been fired from OpenAI, Microsoft was planning to hire him, and nearly every employee at OpenAI was ready to quit and follow him there. While OpenAI faces plenty of competition, including from Alphabet Inc.’s
    GOOG,
    -2.02%

    GOOGL,
    -1.96%

    Google, Altman should continue to be the face of AI development, for good and for bad, even as he has advocated industry regulation.

    The debut and influence of ChatGPT and follow-on AI products are having the biggest impact on tech development since the invention of the iPhone. Altman is at the center of it and leading the charge. Whether he can keep the lid on Pandora’s Box or not depends on many factors, but he and the company he leads are clearly driving a new tech movement that affects us all, whether we like it or not.

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  • Will George Santos still qualify for a pension and strolling around the House floor?

    Will George Santos still qualify for a pension and strolling around the House floor?

    Rep. George Santos was expelled from Congress in an historic vote Friday, following a House panel’s findings of substantial evidence of lawbreaking by the New York Republican.

    But could Santos, 35, still enjoy some of the benefits that come with having served as his Long Island district’s congressman?

    The answer is yes for some perks, but not all. Read on for details.

    Question: Can an expelled member of Congress still collect a pension?

    Answer: No, not if the lawmaker has served for less than five years. Santos was sworn into office just 11 months ago, after Republicans picked up enough seats in November 2022’s midterm elections to gain a small majority in the House.

    U.S. lawmakers are eligible for a pension at age 62 only if they have completed at least five years of service, according to a Congressional Research Service report.

    What’s more, lawmakers can lose their pension if they’re convicted of fraud-related offenses, and Santos is facing such charges. But that provision came relatively recently, with 2007’s Honest Leadership and Open Government Act, and some watchdogs say that law has loopholes that need to be closed up.

    Question: Does an expelled member of Congress still get free healthcare?

    Answer: It’s a myth that House lawmakers and U.S. senators get totally free healthcare, according to the office of Rep. Rep. Scott Perry of Pennsylvania.

    Current members of Congress are authorized to receive free outpatient medical care and emergency dental care at military facilities in the Washington, D.C., area, but they’re billed for inpatient services and former members aren’t eligible, according to a separate CRS report.

    Overall, just as tens of millions of Americans make use of employer-sponsored health insurance, members of Congress and designated congressional staff receive employer-sponsored insurance through the District of Columbia’s Obamacare exchange, known as DC Health Link, the report said, though some lawmakers have opted to pay for other health plans.

    Question: Does an expelled member of Congress still get access to the House floor?

    Answer: Yes. Former members of the House are entitled to admission to that chamber’s floor while it’s in session, as long as they aren’t lobbyists, according to another CRS report.

    It’s among the courtesies and privileges for ex-lawmakers that come from U.S. law, chamber rules or as a matter of custom, the report said. Others include access to parking, athletic and dining facilities.

    However, Santos on Friday sounded like he wouldn’t make use of his floor privileges or other such perks. “Why would I want to stay here? To hell with this place,” he told reporters after his expulsion, according to a CNN report.

    Question: Can former House lawmakers lobby their old colleagues?

    Answer: Yes, once they go through a one-year “cooling off” period.

    Turning to lobbying is a common move. For example, at least 15 members of the 115th Congress had taken up work at lobbying firms by March 2019, just two months after the 116th Congress had been sworn in.

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  • The Cost of Doing Business With China? A $40,000 Dinner With Xi Jinping Might Be Just the Start

    The Cost of Doing Business With China? A $40,000 Dinner With Xi Jinping Might Be Just the Start

    Updated Nov. 28, 2023 12:54 am ET

    Broadcom Chief Executive Hock Tan shelled out $40,000 to sit at Xi Jinping’s table for the Chinese leader’s recent dinner in San Francisco with the heads of American businesses. Tan had a lot more at stake—a $69 billion deal he was waiting on China to approve.

    For months, Chinese regulators wouldn’t clear the U.S. chipmaker’s bid to buy enterprise software developer VMware, leading Broadcom to put off its date for completion of the deal—first announced in May 2022—three times. Beijing had held up previous mergers involving U.S. companies. Intel’s planned acquisition of Israeli firm Tower Semiconductor, for more than $5 billion, was scuttled in August after Chinese regulators failed to approve it.

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • No, Jeff Bezos hasn’t been unloading Amazon stock

    No, Jeff Bezos hasn’t been unloading Amazon stock

    A number of Amazon.com Inc. executives have disclosed sales of some of their Amazon stock holdings in recent weeks, but Jeff Bezos, the company’s executive chair and a mega-shareholder, was not among them.

    Despite some reports to the contrary, Bezos hasn’t disclosed any sales of Amazon shares AMZN for two years, but he has given some shares away to nonprofit organizations.

    There…

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  • Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Both the House and Senate are due to get back to work this week after their Thanksgiving break, and lawmakers have a lot on their plates.

    A divided Washington put off the threat of a partial government shutdown until mid-January by enacting a short-term spending bill in mid-November, but the measure didn’t address President Joe Biden’s $106 billion funding request that includes wartime aid for Israel and Ukraine.

    So…

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  • Hamas releases first group of hostages under truce agreement with Israel

    Hamas releases first group of hostages under truce agreement with Israel

    DEIR AL-BALAH, Gaza Strip (AP) — Hamas released the first batch of hostages under a ceasefire deal that began Friday, including 13 Israelis who have been held in the Gaza Strip since the militant group staged a raid on Israel nearly seven weeks ago, according to officials and media reports.

    Twelve Thai nationals were also released, according to Thai Prime Minister Srettha Thavisin.

    Dozens of Palestinian prisoners are expected to be freed by Israel.

    The ceasefire between Israel and Hamas began Friday, setting the stage for the exchange and allowing sorely needed aid to start flowing into Gaza.

    Don’t miss: A secret line of communication and a pivotal U.S. role: How the hostage-release deal evolved — and nearly fell apart — in final days

    There were no reports of fighting after the truce began. The deal offered some relief for Gaza’s 2.3 million people, who have endured weeks of Israeli bombardment and dwindling supplies of basic necessities, as well as for families in Israel worried about loved ones taken captive during Hamas’s Oct. 7 attack, which triggered the war.

    The truce raised hopes of eventually winding down the conflict, which has flattened vast swaths of Gaza, fueled a surge of violence in the occupied West Bank and stirred fears of a wider conflagration across the Middle East. Israel, however, has said it is determined to resume its massive offensive once the ceasefire ends.

    Under the deal, Gaza’s ruling Hamas group pledged to free at least 50 of the about 240 hostages it and other militants took in the Oct. 7 raid. In exchange, Hamas said Israel would free 150 Palestinian prisoners.

    It was not expected that captive Americans would be among those released late Friday afternoon, but the Biden White House said in a statement that it continued to work to ensure that U.S. nationals, including an Israeli-American girl who turns 4 on Friday, are among the initial 50.

    Both sides agreed to release women and children first, in stages starting Friday, and as planned 13 Israelis were released, according to Israeli media, citing security officials. An Israeli official, meanwhile, confirmed that the Thai captives left Gaza and were en route to a hospital in Israel.

    The official spoke on condition of anonymity because she was not authorized to discuss the releases with the media.

    Israel said the deal calls for the truce to be extended an extra day for every additional 10 hostages freed.

    Early in the day, ambulances were seen arriving at the Hatzerim air base in southern Israel, preparing for the release. Those freed will then be taken to hospitals for assessment and treatment, Israeli officials said.

    See: Ambulances positioned at Israeli military base ahead of Hamas hostage release

    Among the Israeli citizens freed some have a second nationality, according to a Hamas official who spoke on condition of anonymity because he was not authorized to discuss details with the media.

    Israel’s Justice Ministry published a list of 300 Palestinian prisoners eligible for release. Thirty-nine — 24 women, including some convicted of attempted murder for attacks on Israeli forces, and 15 teenagers jailed for offenses like throwing stones — were expected to be freed Friday, Palestinian authorities said.

    On Friday, the truce brought quiet after weeks in which Gaza saw heavy bombardment and artillery fire daily as well as street fighting as ground troops advanced through neighborhoods in the north. The last report of air-raid sirens in Israeli towns near the territory came shortly after the truce took effect.

    Not long after, four tankers with fuel and four with cooking gas entered the Gaza Strip from Egypt, Israel said.

    Israel has agreed to allow the delivery of 130,000 liters, or 34,340 gallons, of fuel per day during the truce — still only a small portion of Gaza’s estimated daily needs of more than 1 million liters.

    For most of the past seven weeks of war, Israel had barred the entry of fuel to Gaza, claiming it could be used by Hamas for military purposes — though it has occasionally allowed small amounts in.

    U.N. aid agencies pushed back against the claim, saying fuel deliveries were closely supervised and urgently needed to avert a humanitarian catastrophe since fuel is required to run generators that power water-treatment facilities, hospitals and other critical infrastructure.

    The Israeli military dropped leaflets over southern Gaza, warning hundreds of thousands of displaced Palestinians who sought refuge there not to return to their homes in the territory’s north, the focus of Israel’s ground offensive.

    Even though Israel warned that it would block such attempts, hundreds of Palestinians could be seen walking north Friday.

    Two were shot and killed by Israeli troops and another 11 were wounded. An Associated Press journalist saw the two bodies and the wounded as they arrived at a hospital.

    Sofian Abu Amer, who had fled Gaza City, said he decided to risk heading north to check on his home.

    “We don’t have enough clothes, food and drinks,” he said. “The situation is disastrous. It’s better for a person to die.”

    The hope is that “momentum” from the deal will lead to an “end to this violence,” said Majed al-Ansari, a spokesman for the Foreign Ministry of Qatar, which served as a mediator along with the United States and Egypt.

    But hours before it came into effect, Israeli Defense Minister Yoav Gallant was quoted telling troops that their respite would be short and that the war would resume with intensity and continue for at least two more months.

    Prime Minister Benjamin Netanyahu has also vowed to continue the war to destroy Hamas’s military capabilities, end its 16-year rule in Gaza and return all the hostages.

    Israel’s northern border with Lebanon was also quiet on Friday, a day after the militant Hezbollah group, an ally of Hamas, carried out the highest number of attacks in one day since fighting there began Oct. 8.

    Hezbollah is not a party to the ceasefire agreement but was widely expected to halt its attacks.

    The war erupted when several thousand Hamas militants stormed into southern Israel, killing at least 1,200 people, mostly civilians, and taking scores of hostages, including babies, women and older adults, as well as soldiers.

    The soldiers will only be released in exchange for all Palestinians imprisoned by Israel, according to the Islamic Jihad militant group, which is reportedly holding about 40 hostages.

    It is not clear how many of the hostages are currently serving in the military or whether the militants also consider reserve soldiers to be “military hostages.”

    According to the Palestinian Prisoners’ Club, an advocacy group, Israel is currently holding 7,200 Palestinians on security charges or convictions, including about 2,000 arrested since the start of the war.

    The Israeli offensive has killed more than 13,300 Palestinians, according to the Health Ministry in Hamas-ruled Gaza, which resumed its detailed count of casualties in Gaza after stopping for weeks because of the health system’s collapse in the north.

    The ministry says some 6,000 people have been reported missing, feared buried under rubble.

    The ministry does not differentiate between civilians and militants in its death tolls. Women and minors have consistently made up around two-thirds of the dead, though the new number was not broken down. The figure does not include updated numbers from hospitals in the north.

    Israel says it has killed thousands of Hamas fighters, without presenting evidence for its count.

    MarketWatch contributed.

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  • How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

    How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

    WASHINGTON (AP) — The negotiations hardly ran smoothly. But, in the end, persistence paid off.

    Six weeks ago, not long after Hamas killed more than 1,200 people in Israel and took scores of others hostage in a surprise assault, the government of Qatar quietly reached out to the United States to discuss how to secure the release of those who were taken captive by the militant group.

    But…

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  • SEC charges crypto platform Kraken with operating as an unregistered exchange

    SEC charges crypto platform Kraken with operating as an unregistered exchange

    The Securities and Exchange Commission charged cryptocurrency trading platform Kraken with operating as an unregistered securities exchange.

    The charges are the latest effort by regulators to crack down on crypto companies, some of which the SEC views as illegally selling securities without registering with the commission.

    Kraken didn’t immediately…

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  • Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

    Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

    Israel’s military campaign against Hamas has entered its sixth week, and the country is facing a growing backlash against the humanitarian toll of the war as well as uncertainty over the fate of a U.S. military aid package that has stalled amid partisan bickering in Washington, D.C.

    President Joe Biden has requested $14.3 billion in military assistance for Israel as it seeks to destroy Hamas after the group killed 1,200 Israeli citizens and took more than 200 hostage last month. More than 12,000 Palestinians have died in…

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  • How a second set of Trump tax cuts could jack up the national debt

    How a second set of Trump tax cuts could jack up the national debt

    If Donald Trump were to be elected president in 2024, what would it mean for U.S. tax policy and the national debt?

    There are growing expectations that he could deliver another round of big tax cuts, with the reductions coming right as those enacted in 2017’s Tax Cut and Jobs Act are due to expire in 2025.

    “If Republicans hold their House…

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  • You can save up to $23,000 in your 401(k) next year, IRS says

    You can save up to $23,000 in your 401(k) next year, IRS says

    Retirement savers can tuck away slightly more in 2024 than in 2023, but this year’s contribution increases are more modest than last year’s, according to new inflation-related adjustments released by the IRS.

    People who are building up their 401(k) accounts will be able to contribute a maximum of $23,000, a more than 2% increase from the $22,500 maximum for 2023.

    IRA contribution limits will climb to $7,000 for 2024, a 7.6% increase over the $6,500 limit in 2023.

    When the IRS announced its adjustments for 2023, 401(k) savers got a big increase of nearly 10% year over year, and the IRA contribution limit went up more than 8%.

    The 2024 adjustments reflect an economy where inflation rates, although cooling, are still warm.

    For 2024, the catch-up amount for workers 50 and older is holding at a maximum of $1,000 on IRA contributions and of $7,500 for people with 401(k)s and other defined-contribution plans, the IRS said.

    The IRS numbers set a limit on how much people can set aside each year in 401(k) accounts, but data suggest many people fall far short of those maximums.

    In 2022, people with retirement accounts through Vanguard had an average account balance of $112,572. The median account balance was $27,376, the wealth-management giant reported.

    The new retirement-account contribution limits are part of the tax code’s yearly changes to account for inflation.

    Taxpayers are still awaiting the IRS adjustments for tax brackets, standard-deduction amounts and other provisions for tax year 2024.

    The tax agency adjusted the ranges on income-tax brackets last year by 7%.

    Roth IRA rules and the Saver’s Credit

    The numbers on 401(K) and IRA contributions were just one part of the IRS announcement Wednesday.

    The tax agency also lifted the income thresholds for people making Roth IRA contributions. Roth IRAs are funded with after-tax dollars, so they aren’t taxed when account holders pull out the money.

    Read also: If saving $23,000 in your 401(k) next year isn’t enough, you can double that (or more) with the right strategy — and it’s legal

    But Roth IRA contributions hinge on household income. In 2024, individuals and people filing as head of household who make between $146,00 and $161,000 must limit their Roth IRA contributions. People with incomes above $161,000 won’t be able to contribute to a Roth IRA.

    That’s up from a 2023 phase-out range of $138,000 to $153,000.

    For married couples filing jointly, the phase-out range climbs to $230,000 – $240,000. That’s an increase from this year’s range of $218,000 to $228,000.

    Other retirement tax rules are also slated for 2024 updates.

    For example, there’s the “saver’s credit” which is designed to help low- and moderate-income households that are finding a way to put aside money for retirement. It pays up to $1,000 for individuals and up to $2,000 for married couples. The amount depends on income and contribution amounts.

    For 2024, married couples saving for retirement are eligible for the credit if their income stays under $76,500, up from $73,000. The income maximum is $38,250 for individuals, up from $36,500.

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  • Here’s why Zillow, Redfin and other real-estate stocks tanked after a jury ruling

    Here’s why Zillow, Redfin and other real-estate stocks tanked after a jury ruling

    Shares of real-estate names plunged Tuesday following a jury ruling that has the potential to shake up the way people purchase homes.

    A Missouri jury earlier Tuesday deemed that the National Association of Realtors, HomeServices of America and Keller Williams colluded to inflate or maintain high commission rates. Jefferies analyst John Conaltuoni said in a note to clients that a judge could issue an injunction preventing commission sharing on MLSs, or multiple listing services, which would hurt the buyer-agent business.

    See more: A Missouri jury goes after the real-estate industry’s commission structure. Here’s what that could mean for homeowners.

    Shares of Opendoor Technologies Inc.
    OPEN,
    -9.09%

    plunged 9% on Tuesday, while shares of Zillow Group Inc.
    ZG,
    -6.87%

    Z,
    -6.98%

    fell 7%, shares of Redfin Corp.
    RDFN,
    -5.67%

    dropped 6% and shares of RE/MAX Holdings Inc.
    RMAX,
    -4.36%

    declined 4%.

    Conaltuoni thinks the recent ruling could bring big changes to the Participation Rule, which is an NAR requirement for seller agents to disclose the compensation being offered to buyer agents when they list through an MLS. The Participation Rule could soon get banned or turn optional, in his view.

    Such a ban “would cause negotiations about buyer agent commissions to occur when an offer is presented, since there would no longer be an avenue to communicate splits up front,” he wrote. “This would eliminate the seller’s incentive to compensate buyer agents, which would force them to seek compensation directly. Shifting the burden of payment to buyers would likely meaningfully reduce their use of agents given most already struggle to cover closing costs.”

    Conaltuoni further commented that were the rule to become optional, the “status quo” likely would continue.

    Read: Why aren’t homeowners selling their homes? It’s not just the ‘lock-in effect’

    What would these developments mean for Zillow, which reports earnings Wednesday afternoon? He flagged that nearly two-thirds of the company’s revenue comes from its Premier Agent business, which itself is primarily made up of revenue from buyer agents. “[A] reduction in their usage would force [Zillow] to pivot to offering products for seller agents and create near-term headwinds to revenue,” he wrote, while cutting his price target on Zillow’s stock to $48 from $60.

    Bernstein’s Nikhil Devnani wrote that Zillow “is NOT part of this case and not directly impacted by the ruling,” but there’s the potential for repercussions down the line.

    “Premier Agent is built around buyer commissions,” Devnani said. “And a reduction to commission rates (which could happen if cooperative compensation were outright banned in the worst case scenario) would create challenges for industry revenue growth, in our view. Maintaining the current structure with more transparency would have less impact we believe. It would need a stronger decoupling of who pays for buyer and seller agents.”

    While Redfin shares dropped Tuesday along with other names, Chief Executive Glenn Kelman put out a blog post titled: “Change Comes to the Real Estate Industry.”

    “The judge may take days or weeks to decide what structural changes the jury’s verdict will entail,” he wrote, and appeals could take years.

    But traditional brokers “will undoubtedly now train their agents to welcome conversations about fees, just as Redfin has been doing for years, especially when advising a seller on what fee to offer to buyers’ agents,” he continued. “Rather than saying that a fee for the buyers’ agent of 2% or 3% is customary or recommended, agents will say that a buyers’ agent fee, if one is offered at all, is entirely up to the seller. This is as it should be.”

    RBC Capital Markets analyst Brad Erickson wrote after the ruling that just over half of Redfin transactions come from the buyside. Its stock and Zillow’s “partially reflected these risks coming in,” in his view.

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  • AI could spark the next financial crisis, SEC Chair Gary Gensler says

    AI could spark the next financial crisis, SEC Chair Gary Gensler says

    Securities and Exchange Commission Chair Gary Gensler has plenty to worry about as he seeks to bring order and fairness to America’s $100 trillion capital markets, and there are few issues that cause him more concern than the spread of artificial-intelligence technology. 

    In an exclusive interview with MarketWatch, the regulator argued that generative AI technologies in the vein of ChatGPT have the potential to revolutionize the way we invest by leveraging large data sets to “predict things that were unimaginable even 10 years ago,” but that these new powers will come with great risks. 

    “A growing issue is that [AI] could lead to a risk in the whole system,” Gensler said. “As many financial actors rely on one or just two or three models in the middle … you create a monoculture, you create herding.” 

    Gary Gensler: AI could pose ‘a risk in the whole system.’

    This herding effect can be dangerous if there is a flaw in the model that might reverberate through markets during a time of stress, causing abrupt and unpredictable price changes in markets. Gensler pointed to the examples of cloud computing and search engines as markets for tech products that have quickly become dominated by one or two major players, and he said he worries about similar concentration in the market for AI technology.

    The regulator said this issue is especially difficult because of the fragmented nature of the U.S. regulatory apparatus, which relies on the SEC to oversee securities markets while other agencies have responsibility for banks or commodity markets. 

    “This is more of a cross-entity issue,” Gensler said. “That’s the challenge for these new technologies.”

    As SEC chair, Gensler has escalated his regulatory agency’s crackdown on the cryptocurrency industry in 2023 by launching lawsuits against Binance and Coinbase, the two largest digital asset exchanges in the world by trading volume. The SEC alleges the two companies are operating unregistered securities exchanges in the U.S., but the companies say they are not running afoul of securities laws.

    Gensler is simultaneously pushing forward the most fundamental market-structure reform measures in a generation. Gensler lands on The MarketWatch 50 list of the most influential people in markets

    But AI is another issue that Gensler is starting to ring alarm bells over. There’s a little bit of irony because the promise of AI has largely been responsible for the S&P 500’s
    SPX
    gains in 2023. The SEC chair said that his agency is already contemplating new rules to regulate artificial intelligence. For example, the SEC proposed a rule this summer to address conflicts of interest associated with stock brokers and investment advisors that leverage algorithms to predict and guide investor decisions through their smartphone applications or web interfaces.

    The industry is pushing back on the proposal, arguing that existing rules are sufficient to prevent harm to investors and that a new rule would prevent brokers from using technology to create a better experience for clients. 

    Gensler said that the SEC benefits from such feedback, but still believes that regulators must be vigilant about the impact of these so-called predictive analytical tools. “If they do that to suggest a certain movie on a streaming app, okay,” he said. “But if they’re doing that about your financial help … we should address those conflicts.”

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