BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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Posted on July 10, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Atracking stock, also known as letter stock and/or targeted stock is a specialized equity offering issued by a company that is based on the operations of a defined business within the larger organization (such as, for instance, a wholly owned subsidiary of a diversified firm). Therefore, the tracking stock will be traded at a price related to the operations of the specific division of the company being “tracked”.
Tracking stock is typically limited, or has no voting rights. Often, tracking stock is issued to separate a high-growth (but initially, unprofitable) division from its parent company, while the parent company and its shareholders remain in control of the subsidiary’s operations.
The Atlanta Braves professional baseball team is set to be spun-off into an independent company along with their related properties (Battery) in two weeks. Along with this change, an as-of-yet unknown amount of equity in the company is set to be publicly traded on the stock market. The easiest explanation of this transition is to get a more accurate (Liberty Media’s Ownership) valuation of the franchise as a precursor to a sale. The Braves already have a pretty unique business structure, being owned by a publicly traded media conglomerate as a semi-autonomous entity within the conglomerate and a tracking stock, but this formalizes the franchises independence much more.
In the view of some, there is significantly more downside as a fan than upside to a sale, as the absolute upside involves more spending on the team payroll, but the team already is near the top of the league in payrolls and the team performance on the field is clearly top tier in the league. The downside is that the new ownership meddles more in the operations of the club in a negative way and/or slashes budgets, etc.
Posted on July 8, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Despite high prices, new car sales have been remarkably strong so far this year and are up 12% compared to the first half of 2022, according to Cox Automotive.
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Here is where the major benchmarks ended:
The S&P 500® Index (SPX) was down 12.64 points (0.3%) at 4398.95, down 1.2% for the week and just the second weekly decline in the past eight weeks; the Dow Jones Industrial Average (DJIA) was down 187.38 points (0.6%) at 33,734.88, down 2% for the week; the NASDAQ Composite (COMP) was down 18.33 points (0.1%) at 13,660.72, down 0.9% for the week.
The 10-year Treasury note yield (TNX) was up about 2 basis points at 4.06%.
CBOE’s Volatility Index (VIX) was down 0.61 at 14.83.
Energy shares were among the strongest performers, with the Philadelphia Oil Service Index (OSX) surging more than 6% to a four-month high. Benchmark WTI crude futures jumped more than 2% to close at a six-week high on hopes that OPEC+ production cuts will tighten supplies.
Regional banks and transportation stocks were also strong.
And, Samsung fell yesterday after revealing that its profits dropped 96% last quarter, giving the company its smallest quarterly profit since 2009 as it continues to sit on more memory chips than the market wants.
Posted on July 7, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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When markets closed Friday, Apple’s market capitalization was over $3 trillion, making it the most valuable company — ever. It’s a massive milestone for the tech giant, which warned investors in May that its current quarter revenue was expected to decline. But Friday’s stock price increasing by just over 2 percent to close at $193.97 per share suggests that investors are still confident in the company, a bright spot in an industry that has otherwise been rocked by layoffs over the past year.
Curiously, Goldman Sachs is considering exiting its partnership with Apple, the Wall Street Journal reported on Friday, citing sources familiar with the matter.
The iPhone-maker and Goldman Sachs started rolling out a virtual credit card in 2019. The bank is in talks with American Express to take over its Apple credit card and other ventures with the tech giant, the report added.
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Here is where the major benchmarks ended:
The S&P 500 Index was up 53.94 points (1.2%) at 4,450.38, a gain of 16% for the first half of 2023. The Dow Jones Industrial Average (DJIA) was up 283.18 points (0.8%) at 34,407.60, up 3.8% in the first half. The NASDAQ Composite was up 196.59 points (1.5%) at 13,787.92 for a first-half gain of 32%.
The 10-year Treasury note yield (TNX) was down about 2 basis points at 3.837%.
CBOE’s Volatility Index (VIX) was down 0.15 at 13.39.
Oilfield services companies and others in energy led sector gainers Friday, after crude oil futures rose 1% (though oil prices are down 12% so far this year).
Technology and Consumer Discretionary stocks were also strong performers, while regional banks were among the laggards. The U.S. Dollar Index (DXY) eased slightly. It is down about 0.5% for the first half.
Posted on July 7, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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(AP) — U.S. officials granted full approval to a closely watched Alzheimer’s drug on Thursday, clearing the way for Medicare and other insurance plans to begin covering the treatment for people with the brain-robbing disease. The Food and Drug Administration endorsed the IV drug, Leqembi, for patients with mild dementia and other symptoms caused by early Alzheimer’s disease. It’s the first medicine that’s been convincingly shown to modestly slow Alzheimer’s cognitive decline.
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Markets: Yesterday was yet another “good news is bad news” day on Wall Street. After the ADP employment report showed private sector companies added more than 2x the jobs that were forecast last month, stocks fell and Treasury yields surged—an indication that investors expect the Fed to resume hiking interest rates to cool down the job market. So, all eyes are on the non-farm payrolls report since a stronger-than-expected report could result in even more Fed rate hikes than currently expected. Here is where the major benchmarks ended yesterday:
The S&P 500® Index was down 35.23 points (0.8%) at 4,411.59; the Dow Jones Industrial Average (DJIA) was down 366.38 points (1.1%) at 33,922.26; the NASDAQ Composite (COMP) was down 112.61 points (0.8%) at 13,679.04.
The 10-year Treasury note yield (TNX) was up about 9 basis points at 4.035%.
The CBOE Volatility Index (VIX) was up 1.25 at 15.43.
Energy was among the weakest sectors despite crude oil futures touching a two-week high.
Regional banks and Consumer Discretionary stocks were also lower. Volatility expectations based on the VIX jumped to their highest level since late May.
Posted on July 6, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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[AP]:Meta is poised to unveil a new app that appears to mimic Twitter — a direct challenge to the social media platform owned by Elon Musk. A listing for the app, called Threads, just appeared on Apple’s App Store, indicating it would debut as early as today. It is billed as a “text-based conversation app” that is linked to Instagram, with the listing teasing a Twitter-like micro-blogging experience.
“Threads is where communities come together to discuss everything from the topics you care about today to what’ll be trending tomorrow,” it said.
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Here is where the major benchmarks ended:
The S&P 500 Index was down 8.77 points (0.2%) at 4,446.82; the Dow Jones Industrial Average was down 129.83 points (0.4%) at 34,288.64; the NASDAQ Composite was down 25.12 points (0.2%) at 13,791.65.
The 10-year Treasury yield (TNX) was up about 7 basis points at 3.932%.
The CBOE Volatility Index (VIX) was up 0.49 at 14.19.
Chemical makers and other materials sector companies were among the weakest performers Wednesday. Semiconductor shares were also lower, as were many energy-company shares despite a 3% surge in crude oil futures. U
Utility stocks were among the strongest performers.
Posted on July 5, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here is where the major benchmarks ended on Monday:
The S&P 500 Index was up 5.21 points (0.1%) at 4,455.59; the Dow Jones Industrial Average (DJIA) was up 10.87 points at 34,418.47; the NASDAQ Composite was up 28.85 points (0.2%) at 13,816.78.
The 10-year Treasury note yield (TNX) was up about 4 basis points at 3.862%.
The CBOE Volatility Index® (VIX) was little changed at 13.58.
Financial companies had a good day Monday, with the KBW Regional Banking Index (KRX) rising more than 2%.
The consumer discretionary sector was also strong, while energy companies got a bump as crude oil futures reached their highest level in more than a week.
Health Care stocks lagged.
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Wall Street is hoping for a strong start to the second half of 2023 taking cues from the recent tech rally that has boosted the overall investor sentiment. Turning toward the U.S.-China trade war, on Monday, the mainland posed restrictions on the export of gallium and germanium to the U.S. citing national security concerns. These metals are used in semiconductor manufacturing and the curb is being used as a means of retaliation to the U.S. chip ban on China.
Remarkably, Tesla (NASDAQ:TSLA) stock has been on an uphill climb lately, thanks to the growing adoption of its North American Charging Standard (NACS) charging connectors by major automakers including General Motors (NYSE:GM), Ford (NYSE:F), and Rivian (NASDAQ:RIVN). Moreover, the EV maker posted better-than-expected auto delivery and production numbers for the month and quarter ending June 30, pushing shares up 6.9% on July 3.
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Future Salaries Will Decrease?
Median incomes are projected to drop over the next few decades, falling by 0.43 percentage points per year between now and 2020, 0.52 points per year between 2020 and 2030, and 0.2 points per year between 2030 and 2040.
Although the figures on their own are not staggering, the percentage drops over time will add up significantly. By 2050, an employee who earned $50,000 in 2013 will only make $44,000. The number is even more noticeable after accounting for inflation.
Posted on July 4, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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July Fourth is Today
If you haven’t bought supplies for your cookout yet, you’ll find that sirloin steak and processed cheese for your burger are more expensive than last July Fourth, but chicken and eggs are cheaper, according to Wells Fargo’s Chief Agricultural Economist Michael Swanson.
Plus, filling up your gas tank will cost you about $1.30 less per gallon than a year ago, per AAA.
Jobs Report Incoming
The June jobs report highlights a relatively slow week for economic data. Once again, like in every month before it since January 2021, the report is expected to show that companies are still on the hiring grind, adding an estimated 225,000 new jobs last month.
Posted on July 3, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Investors are coming out of the mid-year investing season enthused and thanks to an Artificial Intelligence fueled stock market rally that turned into an everything rally.
The NASDAQ posted its best H1 since 1983, and the S&P 500 had its best first-half performance since 2019.
But, don’t expect Wall Street fireworks for the next few days. The US stock market will close early today and shut down tomorrow for Independence Day.
Posted on July 3, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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United States stock markets will be closing early on Monday, July 3rd, in observance of the Independence Day holiday.
In recognition of the federal holiday, the Nasdaq and New York Stock Exchange will close at 1 p.m. ET on Monday and remain closed Tuesday.
The U.S. bond market will close at 2 p.m. Eastern on Monday and will also remain closed Tuesday.
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Nevertheless, Tesla beat expectations in the second quarter of 2023, announcing yesterday that it produced nearly 480,000 vehicles and delivered over 466,000.
The majority of production and deliveries were the Model 3 sedan and Model Y crossover, with 460,211 produced and 446,915 delivered. The electric car maker produced 19,489 of the higher-priced Model X and Model S and delivered 19,225.
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And over the next few nights a super-moon is coming for the 2023 4th of July holiday weekend.July’s full moon, also called the buck moon, will be biggest on the nights of Sunday July 2nd and Monday July 3rd.
According to the Old Farmer’s Almanac, the moon will hit its peak illumination at 7:39 a.m. on Monday July 3 rd. It will be below the horizon at that precise moment, the Almanac said, so plan to look towards the southeast after sunset to watch it rise up into the evening sky.
Posted on June 30, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Big banks powered the Dow higher h of positive economic headlines dropped. Financial institutions aced their Fed “stress test” that measures how they’d hold up during a downturn, Q1 GDP was revised much higher than previously calculated, and the number of Americans filing new unemployment claims fell the most in 20 months.
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Solid economic numbers lifted the S&P 500 and Russell 2000 to nearly two-week highs. So, here is where the major benchmarks ended:
The S&P 500 Index was up 19.58 points (0.5%) at 4,396.44; the Dow Jones Industrial Average (DJIA) was up 269.76 points (0.8%) at 34,122.42; the NASDAQ Composite (COMP) was little changed at 13,591.33.
The 10-year Treasury note yield (TNX) was up nearly 13 basis points at 3.838%.
CBOE’s Volatility Index (VIX) was up 0.11 at 13.54.
Financial companies were among the strongest sectors Thursday, with the KBW Regional Banking Index (KRX) rising nearly 2% to its highest level in over a week.
Oilfield services stocks also gained behind strength in crude oil futures, which briefly climbed above $70 a barrel to their highest price in a week. Communications services and technology shares were among the weakest sectors.
The U.S. Dollar Index (DXY) strengthened to its highest level in over two weeks amid expectations for higher interest rates.
Posted on June 29, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The new magic number for retirement is up slightly from last year, when U.S. adults said they believed they needed $1.25 million to retire comfortably, according to new findings from Northwestern Mutual. High-net-worth individuals – those with more than $1 million in investible assets – believe they’ll need $3 million to retire comfortably.
There’s quite a gap, however, between what people have now and what they think they’ll need. The average amount that U.S. adults have saved for retirement is only $89,300, up 3% from $86,869 in 2022, Northwestern Mutual found.
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Interestingly, more than four in 10 Americans (42%) said they could imagine a time when Social Security no longer exists, according to the research. And yet, people are relying on Social Security to provide 28% of their overall retirement funding. That’s more than personal savings (22%) and equal to retirement savings (28%).
Gen Z and millennials have tempered expectations – they anticipate Social Security will provide 15% and 19% of their overall retirement funding, respectively. That’s a significant drop from what boomers+ say – 38%.
Posted on June 29, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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WASHINGTON (Reuters) -The U.S. Justice Department on Wednesday announced federal and local criminal charges targeting 78 defendants across 16 states as part of a law enforcement action involving $2.5 billion in alleged healthcare fraud schemes targeting elderly and disabled people, HIV patients and even pregnant women.
The cases range from allegations of falsely billing the federal Medicare insurance program for elderly and disabled Americans and paying illegal kickbacks, to the illicit diversion of expensive prescription medications and the improper dispensing of highly addictive opioid pain killers.
Among those facing charges include 24 doctors, nurses and other licensed medical professionals, as well as healthcare executives including the current and former CEOs of a durable medical equipment online platform accused of falsely billing $1.9 billion in fraudulent claims.
Of the $2.5 billion in alleged fraudulent claims to Medicare, state Medicaid programs that serve the poor and supplemental Medicare insurance programs offered by private insurers, about $1.1 billion was actually paid out to the fraudsters, officials said.
“The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs,” Attorney General Merrick Garland said in a statement.
On Friday, the Labor Department will update its Personal Consumption and Expenditures (PCE) index, which is the Fed’s preferred inflation measure. The June employment report follows on July 7th.
So, here is where the major benchmarks ended, yesterday:
The S&P 500 Index was down 1.55 points at 4,376.86; the Dow Jones Industrial Average was down 74.08 (0.2%) at 33,852.66; the NASDAQ Composite was up 36.08 points (0.3%) at 13,591.75.
The 10-year Treasury note yield (TNX) was down about 6 basis points at 3.71%.
CBOEs Volatility Index (VIX) was down 0.31 point at 13.43.
Regional banks and utilities were among the weakest sectors Wednesday, with the Philadelphia Utility Index (UTY) ending at its lowest level in nearly four weeks. Energy companies ranked among the top gainers as crude oil futures rose more than 2%.
Insurer Travelers Companies fell 2.5% to become the day’s worst-performing Dow stock.
Salesforce shares rose after Goldman Sachs said the company was poised to boost its profits.
Intel shares fell after Oracle said its software would be compatible with Ampere Computing chips in a blow to Intel’s position with data center customers.
Posted on June 28, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Over $200 billion from the U.S. government’s COVID-19 relief programs were likely stolen, a federal watchdog said on Tuesday, adding that the U.S. Small Business Administration (SBA) had weakened its controls in a rush to disburse the funds.
At least 17% of all funds related to the government’s coronavirus Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) schemes were disbursed to potentially fraudulent actors, according to a report released Tuesday by the SBA’s office of inspector general. Over the course of the pandemic, the SBA disbursed about $1.2 trillion of EIDL and PPP funds.
The SBA disputed the more than $200 billion figure put forward by the watchdog and said the inspector general’s approach had significantly overestimated fraud.
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Here is where the major benchmarks ended, yesterday
The S&P 500 Index was up 49.59 points (1.2%) at 4,378.41; the Dow Jones Industrial Average (DJIA) was up 212.03 points (0.6%) at 33,926.74; the NASDAQ Composite was up 219.89 points (1.7%) at 13,555.67.
The 10-year Treasury note yield (TNX) was up about 5 basis points at 3.766%.
Cboe’s Volatility Index (VIX) was up 0.50 at 13.75.
Technology stocks led sector gainers, with the Philadelphia Semiconductor Index (SOX) rising nearly 4%. Consumer Discretionary and Retail shares were also higher. Energy shares lagged as crude oil futures dropped more than 2%.
Posted on June 25, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The S&P 500 Index ($SPX) (SPY) was down -0.61%, the Dow Jones Industrials Index ($DOWI) (DIA) was down -0.45%, and the NASDAQ 100 Index ($IUXX) (QQQ) was down -1.11%.
U.S. stocks were undercut by weak U.S. manufacturing PMI and the weak Eurozone PMI reports, which indicated that the U.S. and Eurozone economies are struggling even as the Fed and the ECB plan further rate hikes.
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Alternative Investments?
Oddity, which runs the makeup brand Il Makiage, has filed paperwork for an IPO.
SpaceX is offering to sell select buyers shares at a price that values the private company at ~$150 billion, Bloomberg reports.
Bitcoin hit its highest price in a year, signaling that a thaw has come in the crypto winter.
Healthy investments: Despite a VC slowdown in 2022, healthcare firms raised $61.1 billion in investments. Want to know how VCs decide which healthcare startups to fund? Read more here.
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Stock spotlight: GSK shares surged on both the London and New York exchanges after the company settled what would have been the first case against it to go to trial in the US claiming its heartburn drug Zantac causes cancer. It would have been a high-profile test case since thousands of similar cases have been filed.
Posted on June 24, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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U.S. stocks slipped on Friday, yesterday, with Wall Street’s benchmark gauge notching its worst week since early March. Equities have stalled in the last few days as the rally has taken a breather.
The tech-heavy NASDAQ Composite (COMP.IND) retreated 1.01% to end at 13,492.52 points, while the S&P 500 (SP500) closed 0.76% lower at 4,348.37 points. The blue-chip Dow (DJI) fell 0.64% to settle at 33,728.69 points.
On a weekly basis, the S&P was down 1.39%, the NASDAQ was down 1.44% while the Dow was down 1.67%.
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The following companies had stock price moves driven by quarterly earnings or analyst ratings:
3M (MMM) agreed to pay up to $12.5 billion to settle hundreds of lawsuits brought by cities that claimed their drinking water had been contaminated by the company’s chemicals. 3M shares still ended with a gain of 0.3%.
C3.ai (AI) shares dropped sharply after Deutsche Bank reiterated its “sell” rating, saying the company hadn’t differentiated itself from other artificial intelligence firms at its investor day. C3 shares fell nearly 11%.
CarMax (KMX) reported quarterly revenue at $7.7 billion, down 17% from a year earlier but still surpassing Wall Street expectations. Shares of the used car retailer rose 10%.
Chipotle (CMG) had its share price target boosted by KeyBanc, which cited sustained traffic momentum and pricing power as inflation for avocado and chicken prices remains tame. Shares of the restaurant chain still ended down about 0.3%.
Delta Air Lines (DAL) had its share price target raised to $55 from $48 by Barclay’s, which cited optimistic expectations for near-term earnings. The airline’s shares still fell about 0.2%.
Ford (F) plans a new round of layoffs for U.S. salaried workers, the Wall Street Journal reported late Thursday. It’s unclear how many jobs will be affected. Ford has said it’s working to get costs in line as it transitions to electric vehicles. Its shares fell about 1.2%.
Starbucks (SBUX) shares fell following reports a union representing workers said some stores would strike beginning Friday. The coffee chain’s shares fell 2.5%.
Under Armour (UAA) shares were downgraded to “equal weight” from “overweight” by Wells Fargo, which cited overexposure to North America, excess inventory, and a fairly new CEO. The athletic apparel company’s shares fell nearly 3%.
Virgin Galactic (SPCE) shares fell sharply following reports the space tourism company had raised $300 million through a common stock offer. Its shares dropped more than 18%.
Wayfair (W) shares were upgraded to “market perform” from “underperform” by MoffettNathanson, which said the online retailer was benefiting from the bankruptcy of Bed Bath & Beyond. Wayfair shares rose about 0.4%.
Among other companies, Carnival Corp. (CCL) is expected to report quarterly results Monday. The cruise operator is expected to report a loss of 35 cents per share for the previous quarter, narrower than the $1.64 per share loss for the same period a year earlier, according to NASDAQ. Walgreens Boots Alliance (WBA), Micron Technology (MU), and General Mills (GIS) are also scheduled to report results next week.
Posted on June 24, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Health care sharing is not insurance, but the plans count as insurance under the Affordable Care Act (ACA). That means more affordable healthcare benefits while avoiding the tax penalty for going uninsured. Other pros of health care sharing over insurance include: Lower cost. Monthly costs of health sharing are usually much lower than insurance premiums, although the rules are different for what’s covered. Also, the annual “unshared amount” is much, much lower than deductibles on lower-premium or catastrophic insurance plans. Your choice of provider. There are no network requirements, and you provide your health sharing card as coverage. If a doctor won’t accept your plan and you have to pay out-of-pocket, health sharing plans reimburse your expense.s
Now, the caveats: Health care sharing plans aren’t required to cover pre-existing conditions, such as cancer, diabetes, or lifestyle-related conditions like smoking. Those who have them may be declined membership or won’t have the conditions fully covered for a year or more. Health care sharing also doesn’t typically cover the essential health benefits like wellness exams or mental health counseling.
Yet, at least 1.7 million Americans are involved in a health sharing agreements despite a lack of protections (KFF Health News).
Posted on June 22, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Wall Street’s major averages yesterday, on Wednesday, ended lower for a third straight session, weighed down by losses in growth stocks. And, sentiment was dampened by Federal Reserve Chair Jerome Powell’s largely hawkish reiteration that more rate hikes were likely.
Powell in his published opening remarks to his two-day testimony to Congress said that nearly all policymakers expect that interest rates would have to be raised further by the end of the year. The Fed chief then, in responses to questions from lawmakers, said that it may “make sense” for the central bank to raise rates at a “more moderate pace” going forward.
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So, here is where the major benchmarks ended:
The S&P 500 Index was down 23.02 points (0.5%) at 4,365.69; the Dow Jones Industrial Average (DJIA) was down 102.35 (0.3%) at 33,951.52; the NASDAQ Composite was down 165.10 (1.2%) at 13,502.20.
The 10-year Treasury note yield (TNX) was little changed at 3.727%.
Cboe’s Volatility Index (VIX) was was down 0.68 at 13.19.
Technology shares were among the weakest performers Wednesday, with the Philadelphia Semiconductor Index (SOX) dropping nearly 2% to near a two-week low. Regional banks were also lower.
Energy stocks led sector gainers as crude oil futures jumped nearly 2% to a two-week high on hopes for stronger demand from China. Volatility based on the VIX sank to its lowest level since January 2020.
Posted on June 21, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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EDX Markets, a cryptocurrency platform backed by Charles Schwab (SCHW), Fidelity and Ken Griffin’s Citadel Securities, launched trading for bitcoin (BTC), ether (ETH), litecoin (LTC), and bitcoin cash (BCH).
Bitcoin hit its highest price since early May after a crypto exchange backed by finance heavyweights Charles Schwab, Fidelity Digital Assets, and Citadel Securities said it was open for trading.
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Key Issues:
Schwab and Fidelity-backed crypto-platform EDX Markets began trading for bitcoin, ether, litecoin, and bitcoin cash.
EDX is a ‘non-custodial’ exchange, meaning it does not hold customer crypto and instead uses a third-party custodian.
EDX plans to launch a clearinghouse later this year to help customers settle trades.
EDX also announced new investors that include Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.
Posted on June 21, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: A solstice occurs when one of the Earth’s poles (today, it’s the north) tilts toward the sun at the maximum angle. The two solstices, in December and June, mark the beginning of winter and summer and give us the longest days and nights of the year.
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Summer officially arrives: The summer solstice is on Wednesday today, marking the astronomical beginning of summer in the Northern Hemisphere. It’s also the longest “day” of the year above the equator. Soak in those 9 pm sunsets, because they won’t last forever … or at least until next year 2024.
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Here is where the major benchmarks ended:
The S&P 500 Index was down 16.25 points (0.4%) at 4,409.59; the Dow Jones industrial Average was down 108.94 (0.3%) at 34,299.12; the NASDAQ Composite was down 93.25 (0.7%) at 13,689.57.
The 10-year Treasury note yield (TNX) was up about 4 basis points at 3.769%.
CBOEs Volatility Index (VIX) was down 0.97 at 13.53.
Retailers and regional banks were among the weakest performers Friday, and the Russell 2000 ended with a loss of about 1%.
Energy companies were among the strongest sectors thanks to crude oil futures extending a recent rally above $70 a barrel.
Posted on June 20, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Markets were closed for Juneteenth yesterday, but the NASDAQ is coming into the short trading week hot: The tech-heavy index had its eighth consecutive week of gains last week, the best it’s done since March 2019.
But, Investors are divided over whether the rally driven by mega-stocks like Nvidia, Apple, and Tesla is a bubble poised to pop or the start to an AI revolution that not even Jerome Powell can dissuade.
Posted on June 20, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The average balance in employer-sponsored savings plans last year was $112,572, well below the $141,542 recorded in 2021. That’s according to the latest annual report, “How America Saves,” from investment firm Vanguard, which serves as record keeper for defined contribution plans that, combined, have nearly 5 million participants with a median age of 43. Such plans include 401(k)s and 403(b)s, as well as a much smaller universe of plans that employers simply put money into for employees and then employees direct how that money is invested.
“Vanguard participants’ average account balances decreased by 20% since year-end 2021, driven primarily by the decrease in equity and bond markets over the year,” according to the report.
And, the numbers look worse if you consider the median balance, which was just $27,376 last year, down from $35,345 in 2021. The median in some ways is a truer read on the state of employees’ retirement savings since it is the middle point — meaning half of accounts have higher balances, and half have lower ones.
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According to the Social Security Administration, Social Security benefits make up about a third of the income of the elderly. In general, single people depend more heavily on Social Security checks than do married people. In 2023, the average monthly retirement income from Social Security is $1,827.
Keep in mind, though, that your Social Security benefits could be smaller. If you don’t have 35 years of work under your belt when you start claiming benefits, if your earnings were consistently low or if you claim benefits starting at age 62 rather than waiting until your full retirement age (or age 70, if you want maximum benefits), then you can expect a small monthly check. There’s also a gender gap in Social Security income. Women, because they tend to earn less and work for fewer years, draw smaller Social Security checks than men do.
Posted on June 17, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here is where the major benchmarks ended; yesterday
The S&P 500 Index was down 16.25 points (0.4%) at 4,409.59; the Dow Jones industrial average was down 108.94 (0.3%) at 34,299.12; the NASDAQ Composite was down 93.25 (0.7%) at 13,689.57.
The 10-year Treasury note yield (TNX) was up about 4 basis points at 3.769%.
CBOE’s Volatility Index (VIX) was down 0.97 at 13.53.
Retailers and regional banks were among the weakest performers Friday, and the Russell 2000 ended with a loss of about 1%.
Energy companies were among the strongest sectors thanks to crude oil futures extending a recent rally above $70 a barrel.
Posted on June 16, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks climbed again yesterday—and it wasn’t just tech companies carrying the team this time. The DJIA was the best-performing major index, showing how the current market rally is spreading beyond the A.I. frenzy. But the Artificial Intelligence frenzy is still frenzied. Microsoft, seen as the de facto AI leader, hit a record high.
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On Wall Street yesterday, CAVAwent public in the sixth-biggest US IPO of the year. Shares of the Mediterranean fast-casual chain popped 99%, giving it a market value of $4.9 billion at market close. Cava’s successful debut could inspire other restaurant brands, such as Panera and Fogo De Chão, to accelerate their plans to go public and wake up a slow IPO market.
Posted on June 16, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The number of Americans applying for unemployment benefits remained elevated last week, a possible sign that the Federal Reserve’s interest rate hikes over the past year may taking hold in what’s proved to be a resilient job market. U.S. applications for jobless claims were 262,000 for the week ending June 10th, the Labor Department reported Thursday, more than analysts were expecting. This week’s number mirrors last week’s, which was revised up by 1,000. The claims numbers for the past two weeks are the highest since October of 2021. The four-week moving average of claims, which flattens some of the week-to-week fluctuations, rose by by more than 9,000 to 246,750. That’s the highest level since November of 2021.
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Here is where the major benchmarks ended:
The S&P 500 Index was up 53.25 points (1.2%) at 4,425.84; the Dow Jones industrial average was up 428.73 (1.3%) at 34,408.06; the NASDAQ Composite was up 156.34 (1.2%) at 13,782.82.
The 10-year Treasury note yield (TNX) was down about 8 basis points at 3.718%.
CBOE’s Volatility Index (VIX) was up 0.61 at 14.49.
Energy was the best performing sector Thursday as WTI crude oil futures rose more than 3%, putting them back above $70 per barrel, thanks to improving demand from China. Health care and retail stocks were also strong.
The euro surged above $1.09, its strongest level against the U.S. dollar in over a month, after the European Central Bank earlier Thursday hiked its benchmark deposit rate a quarter point to 3.5%, saying inflation is still too high.
Posted on June 15, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
UnitedHealth Group expects to spend more of its members’ premiums on medical care in the second quarter, driven by a rise in outpatient care for Americans 65 and older in Medicare plans, CFO John Rex said Tuesday at a Goldman Sachs investor conference. Speaking at a Goldman Sachs healthcare conference, Tim Noel, CEO of UnitedHealth’s Medicare and retirement business, pointed to elevated demand for outpatient procedures from Medicare patients, per Reuters.
“We’re seeing that more seniors are just more comfortable accessing services for things that they might have pushed off a bit like knees and hips,” Noel reportedly said at the conference. The elevated demand is expected to increase the company’s second-quarter costs and premiums look set to lag spending on claims. As a result, UnitedHealth said it expects its medical loss ratio for full-year 2023 to be in the upper end of its prior outlook.
But, following the news, RBC Capital analyst Ben Hendrix reiterated UnitedHealth with an Outperform and maintained its $592 price target. Mizuho analyst Ann Hynes also reiterated UnitedHealth with a Buy and a $600 price target.
The S&P 500 Index was up 3.58 points (0.1%) at 4,372.59; the Dow Jones Industrial Average (DJIA) was down 232.79 (0.7%) at 33,979.33; the NASDAQ Composite was up 53.16 (0.4%) at 13,626.48.
The 10-year Treasury note yield (TNX) was down about 4 basis points at 3.80%.
Cboe’s Volatility Index (VIX) was down 0.74 at 13.87.
Regional banks and retail were among the weakest sectors Wednesday. The KBW Regional Banking Index (KRX) tumbled from a 14-month high earlier in the day, ending down nearly 3%. Small-caps stocks also took a hit, as the Russell 2000 Index (RUT) fell 1.2%. The U.S. Dollar Index (DXY) rebounded sharply from a four-week low, boosted by the indications rates will stay higher for longer.
Posted on June 14, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time.
1. Energy is doing a lot of the work. Cheaper energy played a major role in pulling inflation down to 4% last month from 4.9% in April, per Axios. Gas prices plunged almost 20% from last year, when Russia’s invasion of Ukraine sent fuel costs to the moon, while broader energy prices fell nearly 12%.
2. “Revenge spending” is down. Once COVID pandemic lock downs lifted, Americans splurged on vacations, leisure, and recreation (new pickle ball paddles!) in what economists dubbed “revenge spending.” Now that everyone has taken their week long trip to Italy, there are signs that revenge spending is waning: Airfare prices dropped 13% annually in May and, according to the US Travel Association, hotel demand is below 2019 levels. Bad for your Instagram, but good for inflation.
3. Food prices are up. The cost of food ticked up 0.2% in May from April after staying flat in the previous two months, showing how inflation has persisted on grocery store shelves. But not all aisles are created equal—the price of eggs dropped nearly 14% from April (the biggest one-month drop since 1951), while fruit and veggie prices rose 1.3%.
4. More than anything else, rent is propping up inflation. Shelter costs are the largest category in the CPI report, and they’re still on the upward march, climbing 8.7% from a year earlier. The good news: Economists say this government data doesn’t reflect on-the-ground information, such as reports of softening rent by Zillow and Apartment List. Shelter costs in the CPI are expected to decline during the second half of the year.
Posted on June 14, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
FLAG DAY 2023
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Measured year over year, inflation slowed to just 4 per cent in May — the lowest 12-month figure in over two years and well below April’s 4.9 per cent annual rise. The pullback was driven by tumbling gas prices and smaller increases in grocery prices and other items.
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Here is where the major benchmarks ended, today:
The S&P 500® Index was up 30.08 points (0.7%) at 4,369.01; the Dow Jones industrial average was up 145.79 (0.4%) at 34,212.12; the NASDAQ Composite was up 111.40 (0.8%) at 13,573.32.
The 10-year Treasury note yield (TNX) was up about 6 basis points at 3.829%.
CBOE’s Volatility Index (VIX) was down 0.4 at 14.61.
Regional banks and oilfield services stocks led the gainers Tuesday. Crude oil futures rose 3% on expectations of stronger demand from China. Small-caps were also strong, with the Russell 2000 Index (RUT) rising more than 1% to its highest level since early March. The U.S. Dollar Index (DXY) fell to its lowest level in more than three weeks thanks to expectations interest rates could be near their peak.
Posted on June 13, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The Biden administration finalized a deal to preserve the federal mandate requiring U.S. health insurers to cover preventive care like cancer screenings and HIV-preventing medication at no extra cost to patients while a legal challenge continues. The agreement, first disclosed last Friday and now finalized in a filing in the New Orleans-based 5th U.S. Circuit Court of Appeals, leaves the mandate in place nationwide while the administration appeals a court order striking it down.
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Here is where the major benchmarks ended yesterday:
Stock indices finished yesterday’s trading session in the green. The NASDAQ 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.76%, 0.94%, and 0.56%, respectively. The energy sector (XLE) was the session’s laggard, as it fell 0.95%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 2.18%.
Furthermore, the U.S. 10-Year Treasury yield saw little change, as it hovers around 3.74%. Conversely, the Two-Year Treasury yield decreased to 4.58%. This brings the spread between them to -84 basis points.
Posted on June 12, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The US economy remains “very, very hot,” though not as much as it was six to 12 months ago, said former Treasury Secretary Lawrence Summers. “The United States is, today, an underlying 4.5-5% inflation country,” Summers said, speaking via video link at the start of the two-day Caixin Asia New Vision Forum in Singapore. At the same time, soft landings “represent the triumph of hope over experience,” and commercial real estate is one area where there are likely to be “pockets of distress,” said Professor Summers of Harvard University.
At its meeting this week, the Federal Reserve is expected to do something it hasn’t done in the last 15 months: not raise interest rates. Chair Jerome Powell suggested it might be time to take a breather as a series of rate hikes filters through the economy.
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Last week, the S&P 500 reached its fourth consecutive winning week and the NASDAQ seventh as investors find fewer things to be worried about. In a sign of that cautious optimism, Goldman Sachs slashed its probability of a recession in the next year from 35% to 25%.
Crypto: SEC Chair Gary Gensler dramatically escalated his war on crypto-currency last week, and prices took a big hit. Four of the 10 most valuable cryptocurrencies fell by at least 15%, per CoinMarketCap.
Posted on June 10, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Republicans in the U.S. House of Representatives just unveiled a series of new tax breaks aimed at businesses and families while proposing to reverse some of President Joe Biden’s legislative victories, including credits to spur the sale of clean-burning electric vehicles.
Under the proposed legislation, married couples filing jointly would receive a $4,000 “deduction bonus” for two years that the committee said would potentially help up to 107 million families who take the standard deduction.
The legislation also would significantly increase the way businesses could claim depreciation deductions, raising the threshold to a permanent $2.5 million from the current $1 million that was contained in the Republicans’ broad 2017 tax cut package.
Other provisions include an expansion of tax benefits for small start-up enterprises to “S Corporations,” while eliminating some “red tape” that small businesses experience related to contract workers.
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The Closing Friday Markets
Markets: Stocks celebrated the summer Friday by jumping up yesterday, giving the S&P 500, which recently reentered bull market territory, its fourth positive week in a row. And, Tesla enjoyed its eleventh consecutive trading day in the green, matching its longest hot streak.
The S&P 500 Index was up 4.93 points (0.11%) at 4,298.86; the Dow Jones Industrial Average (DJIA) was up 43.17 points (0.13%) at 33,876.78; the NASDAQ Composite (COMPX) was up 20.62 points (0.16%) at 13,259.14.
The 10-year Treasury note yield (TNX) was little changed at 3.740%.
CBOE’s Volatility Index (VIX) was up 10 points at 13.75.
The Technology, Consumer Discretionary, and Communication Services sectors—home to market heavyweights such as Alphabet (GOOGL), Apple (AAPL), Meta (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA)—were the strongest performers Friday. Energy was among the weaker sectors, as crude oil futures fell 1.5% to just above $70. The small-company-focused Russell 2000 (RUT) lagged, falling about 0.9%.
Posted on June 8, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Turkey’s lira plunged 7% to a record low yesterday in its biggest selloff since a historic 2021 crash, a move traders said is a “strong signal” that Ankara is moving away from state controls toward a freely traded currency. The currency has come under increasing pressure since President Tayyip Erdogan was re-elected on May 28. It was trading at 23.18 against the dollar at 1500 GMT, after touching a record low of 23.19, bringing its losses this year to around 20%.
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Treasury Secretary Janet Yellen, in her first interview since the U.S. debt-ceiling was lifted last week by Congress, warned on Wednesday about the potential for banks to feel strain from their exposure to weakening commercial real estate valuations. Yellen was asked by CNBC “Squawk Box” host Andrew Ross Sorkin about if she’s worried about the state of estimated $20.7 trillion commercial real-estate market, particularly the office, and if weakness in the sector could potentially spark more bank failures.
“Well, I do think that there will be issues with respect to commercial real estate,” Yellen said. “Certainly, the demand for office space since we’ve seen such a big change in attitudes and behavior toward remote work has changed and especially in an environment of higher interest rates.”
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The equities market diverged today between a small handful of strong-performing mega-cap companies, which delivered most of the gains recently in the big benchmark indexes, and the lagging majority. Such concentration suggests a weakness below the headline numbers that could become a problem down the line.
Here is where the major benchmarks ended today:
The S&P 500® Index (SPX) was down 16.33 points (0.4%) at 4267.52; the Dow Jones Industrial Average (DJIA) was up 91.74 (0.3%) at 33,665.02; the NASDAQ Composite (COMPX) was down 171.52 (1.3%) at 13,104.90.
The 10-year Treasury note yield (TNX) was up about 9 basis points at 3.791%.
CBOEs Volatility Index (VIX) was down 0.04 at 13.92.
Smaller financial companies were also in the spotlight again, with the KBW Regional Banking Index (KRX) continuing its rebound with a nearly 4% jump. Energy stocks were also strong as crude oil futures climbed more than 1%, and transportation companies also gained. Communication Services led decliners among S&P 500 sectors.
Posted on June 7, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
Meta, the Facebook tech giant sold the GIF platform it had recently bought at a steep loss after the UK’s competition regulator demanded it unwind its acquisition over antitrust concerns.
Meta had acquired Giphy in 2020 for $400 million, and just sold the company to Shutterstock for nearly $350 million less than that—$53 million. This was the first instance of British authorities dismantling a Big Tech deal that had already closed
The Biden administration is confident it will succeed in the courts against Merck & Co’s lawsuit filed on Tuesday, the White House said, defending the Medicare health insurance program’s authority to seek deals on medicine prices. “We are confident we will succeed in the courts: there is nothing in the Constitution that prevents Medicare from negotiating lower drug prices,” White House spokeswoman Karine Jean-Pierre said in a statement.
Behind negative returns for shares of UnitedHealth and Merck, as noted above, UnitedHealth’s shares were off $14.28, or 2.9%, while those of Merck have dropped $3.23, or 2.9%. A $1 move in any one of the 30 components of the Dow results in a 6.59-point swing. In summary:
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Here is where the major benchmarks ended yesterday:
The S&P 500® Index was up 10.04 points (0.2%) at 4283.84; the Dow Jones industrial average was up 10.48 at 33,573.34; the NASDAQ Composite was up about 47 points (0.36%) at 13,276.42.
The 10-year Treasury yield was little changed at 3.687%.
Posted on June 6, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The Securities and Exchange Commission sued cryptocurrency platform Coinbase today, charging the company with operating an unregistered securities platform and brokerage service. The lawsuit comes a day after the SEC filed charges against Binance, below.
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Cryptocurrencies and shares in crypto and blockchain-related companies tumbled yesterday after the U.S. securities regulator sued crypto exchange Binance, another blow to the industry. The U.S. Securities and Exchange Commission sued Binance and its CEO Changpeng Zhao for secretly controlling Binance.US as part of a “web of deception” to evade U.S. laws, among other charges. Reuters earlier reported that Binance controlled its US affiliate’s bank accounts, despite claiming it was independent.
The SEC also said Binance artificially inflated trading volumes on the platform, diverted customer funds and failed to restrict U.S. customers from its platform and misled investors about market surveillance controls.
Bitcoin, the world’s biggest cryptocurrency was down 5.45% after falling to its lowest level since mid-March following the news. Binance’s cryptocurrency fell 9.72%.
Posted on June 6, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The Normandy landings were the landing operations and associated airborne operations on Tuesday, 6th June 1944 of the Allied invasion of Normandy in Operation Overlord during World War II. Code-named Operation Neptune and often referred to as D-Day, it was the largest seaborne invasion in history.
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It has also been 42 years since the CDC first reported on AIDS in the US, describing five Los Angeles-area patients with Pneumocystis jiroveci pneumonia. Today about 1.2 million people in the US live with HIV, the virus that causes AIDS, a condition that’s considered chronic but not necessarily fatal. Still, US leaders want to end the HIV epidemic by 2030.
Advocates are calling for gun violence to be considered as an “adverse childhood experience.”
Chicago health officials still recommend exercising caution over Mpox in the year following a major outbreak.
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With the drama of earnings season, the debt ceiling battle, and last Friday’s crucial jobs report in the rear-view mirror, Wall Street enters the week seeking new catalysts.
The S&P 500 Index (SPX) starts the week on the cusp of a new bull market. A close of 4,292 or above would represent approximately a 20% gain from the 2022 low close of 3,577 posted last October 12. A 20% gain from the bottom represents a new bull market. That said, the SPX is still down about 11% from its all-time high close of 4,796 posted January 3, 2022.
You may recall a strong rally last summer. But the 17% rally that lasted from mid-June 2022 through mid-August 2022 lifted the SPX just 17%—not enough to put it into bull market territory.
The 10-year Treasury note yield ($TNX) was down slightly to 3.68%. The U.S. Dollar Index ($DXY) is up slightly to 104.29. The Cboe Volatility Index® ($VIX) has been in positive territory all day today and was last seen up by 0.27 to 14.87. WTI Crude Oil (/CL) is up to $73.22 per barrel after Saudi Arabia said it would cut production.
Gold prices have traded in a range of $1,953.80 to $1,978.00 and were last seen trading higher by 0.17% to $1,973.00.
Natural Gas prices have traded in a range of $2.184-2.2301 so far today and were last seen trading higher by $0.077 (or + 3.55%) to $2.249/MMBtu.
Posted on June 5, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Saudi Arabia said yesterday that it will reduce how much oil it sends to the global economy, taking a unilateral step to support the sagging cost of crude after two earlier production cuts by members of the OPEC+ alliance of major oil-producing countries failed to push prices higher. The announcement of the Saudi cuts of 1 million barrels per day, which will start in July, followed a meeting of the alliance at OPEC headquarters in Vienna. The rest of the OPEC+ producers agreed to extend earlier cuts in supply through the end of 2024.
The slump in oil prices has helped U.S. drivers fill their tanks more cheaply and given consumers worldwide some relief from inflation. That the Saudis felt another cut was necessary underlines the uncertain outlook for demand for fuel in the months ahead. And, there are still concerns about economic weakness in the U.S. and Europe, while China’s rebound from COVID-19 restrictions has been less robust than many had hoped.
However, some statistics from the US Chamber of Commerce show signs the situation is getting better: Leisure and hospitality lost 833,000 workers in July 2022, but 1.1 million people were hired into the industry that same month.
Posted on June 4, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The US kept adding jobs according to new data from the Bureau of Labor Statistics. The economy gained 339,000 pay-rolled employees in May, more than in each of the preceding three months and way more than the 190,000 Dow Jones predicted (to be fair, expert estimates low-balled 13 of the last 16 job reports, according to CNBC. This growth happened despite climbing interest rates, inflation, recent bank failures, and a nerve-racking debt ceiling standoff that threatened to destroy the economy And, Wall Street interpreted the data as a big green “buy” sign. For example:
Stocksleaped up last week as investors celebrated the deal to lift the debt ceiling being showed that the economy is still going strong. In fact, Lululemon stretched toward the heavens after beating earnings expectations thanks to a 24% year over year jump in sales.
But not all indications pointed to the hot streak continuing indefinitely.
The unemployment rate inched, wage growth slowed, and workers appear less self-assured in the labor market:
The self-employed lost 369,000 people from its ranks in May, a possible sign that folks might be ditching the self-employment for the security of a traditional employer.
And, recent data shows the quit rate has declined from an all-time high in late 2021, bringing an end to the pandemic job-hopping trend dubbed the Great Resignation.
Ultimately, the Fed will have to use the conflicting and mixed economic indicators to decide whether to further crank up interest rates at their next meeting. The Federal Reserve has been hinting that it might cease raising interest rates, and investors seem convinced the central bank will follow through and at least “skip” a hike this month even though the labor market is still radiating heat.
Posted on June 3, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The end of debt standoff and a stronger-than-expected jobs report helped boost the Dow to its biggest gain in over six months, while the NASDAQ is near a 14-month high.
Here is where the major benchmarks ended yesterday:
The S&P 500® Index (SPX) was up 61.35 points (1.5%) at 4282.37, near a 10-month high; the Dow Jones industrial average was up 701.19 (2.1%) at 33,762.76; the NASDAQ Composite was up 139.78 (1.1%) at 13,240.77.
The 10-year Treasury note yield (TNX) was up about 9 basis points at 3.695%.
CBOE’s Volatility Index (VIX) was down 1.07 at 14.58.
Financial companies were among the strongest performers Friday, with the KBW Regional Banking Index (KRX) rising more than 6%.
Oilfield services companies and others in the energy sector were also strong, as crude oil futures extended a recent rally above $70 per barrel. Volatility measures dropped as the debt ceiling deal removed a source of uncertainty, with the VIX hitting its lowest level since July 2021.
Though individual borrowers are expected to pay off debts, the same isn’t true for governments, Paul Krugman argued in a column for the New York Times last week. That’s because unlike people, governments don’t die, and they gain more revenue with each passing generation. “Governments, then, must service their debts – pay interest and repay principal when bonds come due – but they don’t necessarily have to pay them off; they can issue new bonds to pay principal on old bonds and even borrow to pay interest as long as overall debt doesn’t rise too much faster than revenue,” he added.
Posted on June 2, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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National Hurricane Season Commences
The Atlantic hurricane season is the period in a year, from June 1st through November 30th, when tropical or subtropical cyclones are most likely to form in the North Atlantic Ocean. These dates, adopted by convention, encompass the period in each year when most tropical cyclogenesis occurs in the basin. Even so, subtropical or tropical cyclogenesis is possible at any time of the year, and often does occur.
Interest Rates?
New US government data shows there were more open jobs last month than expected, raising the possibility that the Federal Reserve could keep hiking Interest Rates Up.
Banks
Shares of large and mid-sized U.S. banks sharply under performed the broader markets with worries about commercial real estate loans in focus among bank investors.
Companies
The e-commerce giant Amazon has agreed to shell out the cash to settle a pair of lawsuits lodged by the Federal Trade Commission. It will cough up $5.8 million to resolve claims that it let employees and contractors access footage from Ring doorbell cameras and another $25 million because Alexa allegedly improperly retained information from children. Amazon’s also facing criticism from its staff—hundreds of corporate employees walked out yesterday to protest the company’s layoffs, return to office mandate, and contributions to climate change.
Advance Auto Parts tanked after the car parts seller cut its dividend and outlook for the year.
The Markets
Here is where the major benchmarks ended, yesterday:
The S&P 500 Index was up 41.19 points (1.0%) at 4221.02; the Dow Jones industrial average (DJIA) was up 153.30 (0.5%) at 33,061.57; the NASDQ Composite was up 165.70 (1.3%) at 13,100.98.
The 10-year Treasurynoteyield (TNX) was down about 3 basis points at 3.603%.
CBOE’s Volatility Index (VIX) was down 2.25 at 15.69.
Oilfield services providers and other energy companies led sector gains, as crude oil futures rallied nearly 3% and pushed back above $70 barrel despite higher-than-expected U.S. inventories reported Thursday. Semiconductor makers and other tech companies continued their recent show of strength. The U.S. Dollar Index ($DXY) fell to its lowest level in more than a week amid ideas the Fed may soon “pause” its sharp rate hikes of the past year.
Posted on June 1, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Student loan payments could restart soon. Tucked into the debt ceiling deal agreed to by President Biden and House Speaker Kevin McCarthy is a measure that requires student loan borrowers to start paying their monthly bills again 60 days after June 30th.
A freeze on repayments has been in place since March 2020 due to COVID-19, and it’s been extended several times as the pandemic dragged on. This deadline for the resumption of payments is similar to the timeline previously laid out by President Joe Biden, but it prevents him from issuing another pause.
Posted on June 1, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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According to ABC News, the US House of Representatives just approved a bill to raise the nation’s debt ceiling while cutting some government spending over the next two years, in a major victory for both the White House and Republican leaders as the country tip-toes closer to a historic default on its bills. The final vote was 314-117. Now, the deal moves to the Senate, where Majority Leader Chuck Schumer has promised to work to pass it quickly.
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Here is where the major benchmarks ended yesterday:
The S&P 500 Index was down 25.69 points (0.6%) at 4179.83; the Dow Jones industrial average was down 134.51 (0.4%) at 32,908.27; the NASDAQ Composite was down 82.14 (0.6%) at 12,935.29.
The 10-year Treasury yield was down about 5 basis points at 3.641%.
CBOE’s Volatility Index was up 0.26 at 17.74.
Regional banks were among the weakest performers Wednesday, while energy stocks also slumped as crude oil futures extended a recent sell-off.
The utilities and healthcare sectors were among the few gainers.
Despite weakness in technology, the NASDAQ still ended with a gain of 5.8% for the month, while the S&P 500 was up 0.3%. The U.S. dollar index rose to a 2½-month high.
Posted on May 31, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Workers appear to value paid time off even more than having employer-funded health insurance, a recent study found. The Pew Research Center report called “How Americans view their jobs” found 62% of the 5,900 people surveyed felt it’s “extremely” important to have paid time off for vacations or minor illness, with a further 27% saying it’s “very” important. That’s higher than the 51% who said employer-funded health insurance was extremely important, with 28% saying it’s very important.
And, here is where the major market benchmarks ended yesterday:
The S&P 500 Index was up 0.07 point at 4205.52; the Dow Jones industrial average was down 50.56 (0.2%) at 33,042.78; the NASDAQ Composite was up 41.74 (0.32%) at 13,017.43.
The 10-year Treasury yield was down about 13 basis points at 3.694%.
CBOE’s Volatility Index was little changed at 17.46.
Oilfield services companies and others in energy were among the weakest performers as crude oil futures dropped more than 4% to less than $70 a barrel, reflecting ample supply.
Consumer staples and health care were also weak. The U.S. dollar index was down slightly after rising earlier to its highest level since mid-March.
Posted on May 30, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy N. Katsenelson CFA
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You can also listen to a professional narration of this article on iTunes, Google & online.
CHARTER COMMUNICATIONS: Why we’re confident in our investment
December 12, 2022
When my wife Rachel and I were getting married, the preparations for the wedding were stressful. It was the usual stuff – finding caterers, picking a wedding dress and invitations, shrinking the enormous guest list, and making a lot of other (in hindsight), unimportant decisions. (My advice to my kids: Have a destination wedding in Hawaii on the beach; this will shrink your guest list by 90%, leaving only those who really care about you. This way, you’ll be planning a small party, not orchestrating a giant brawl.)
I remember the preparations for the wedding being unnecessarily frustrating. My bride and I thought once we got married and the wedding was behind us, life would get easier. My father made an important observation: “Do you think all your problems will go away once you get married? This is when a different, often more difficult, chapter of your life begins – you’ll be facing different, more important, problems.”
He was so right.
This applies to investing as well. Researching companies is preparation for the wedding. But after we buy a stock – “get married” – is when the real research begins, because life happens to companies. I have to admit, this wedding analogy is imperfect on many levels: Selling stocks is not as traumatic as getting divorced (our stocks don’t know we own them). We are not really married to our stocks; we would love to own them for a long time but will sell them with ease if new information starts hinting that our initial thesis was wrong.
I did not enjoy the preparations for my wedding, but I actually love doing research. Most of our research doesn’t turn into weddings – we buy only a few companies a year but research hundreds.
If this analogy is so bad, why keep it? It highlights what investing is and, as importantly, what it is not. Plus, I sank an hour into it, which I’ll never get back.
We had done a tremendous amount of research before we bought Charter Communications (CHTR). It seems like we have done twice as much research since we bought CHTR (“got married to it“) and have been kicked in the face by the declining stock price. However, we are convinced that our initial decision, although in hindsight it was imperfectly timed (an understatement), was the correct one.
The market’s concerns about the competitive threat to cable operators from fiber and fixed wireless drove all cable stocks down, creating an opportunity (more on that later). The more work we have done, the more we are convinced that this threat, though it may shave off a few percent from revenue growth in the short run, will have little impact on cable operators’ cash flows in the long term.
This is what I wrote about wireless competition: Let’s start with 5G. It is exponentially better than 4G. It is faster, has less latency, and drains batteries less. But it is still constrained by the scarcity of wireless spectrum – the “air pipe.” This is why wireless providers usually limit how much you can download on your device. Typical wireless providers put a cap of 50GB a month of downloads per household. The average cable customer consumes 400GB of data if they have TV service and 700GB if they don’t. (Remember, if you don’t have TV, you stream it over the internet, and thus consume more data.) Our internet data consumption is only moving in one direction, at a very fast pace, indefinitely: up! This will put further stress on the finite 5G spectrum, whereas broadband’s upward bound is virtually unlimited.
5G wireless customers will pay as much as Charter cable customers but will get 10-15x less data and slower speeds. If each 5G customer used as much internet as broadband customers, wireless providers would either go broke (they’d have to be spending hundreds of billions of dollars on new spectrum) or download speeds would slow to a crawl.The observation above is partially correct. T-Mobile, after merging with Sprint, has more spectrum than AT&T and Verizon and has been offering unlimited broadband, at very fast download speeds, for only $30 a month.
Brendan Snow (IMA analyst) and I went to the T-Mobile store to check it out. T-Mobile offered broadband in Brendan’s neighborhood but not in mine. I live in a very average suburban neighborhood, but despite owning more spectrum than its rivals, T-Mobile doesn’t have enough spectrum capacity to offer its service to me. Remember, broadband users consume 50–70 times more broadband than traditional wireless consumers.
Also, this offer is only available to customers who have wireless service with T-Mobile. I have read reviews of T-Mobile’s broadband service, and they all mention one thing in common: Service is intermittent and speed fluctuates a lot depending on the time of day. Bottom line: This service will take some market share from cable providers in areas with low population density, where cable companies have limited presence anyway.
Fiber is another threat that drove cable stocks down. “Fiber to the home providers” offer 1 gigabit speed on both downloads and uploads. Both Charter and Comcast have announced they will be upgrading their networks to DOCSIS 4.0, a new technology which, at a relatively small cost (less than $200 per customer), will put cable data speeds at parity with fiber. Comcast announced that they will roll out the technology everywhere by 2025, while Charter said they will focus on markets where they face the most competition from fiber. DOCSIS 4.0 will turn cable networks from smart to “brilliant” (this is how one cable executive described this technology), promising to increase uptime and reduce maintenance capital expenditures.
Our thinking on the wireless offerings by Charter and Comcast has changed. Initially, we thought it was a defensive move to compete with wireless providers, with the ultimate goal of bundling it with internet service and reducing churn. We assumed it would produce a limited stream of cash flows.
We changed our thinking here.
Cable companies have a structural cost advantage in offering wireless service, as consumers have been trained to connect their phones to Wi-Fi. This means that when we are on our mobile phones, we offload 90–95% of our data to wired networks, where cable companies have virtually unlimited capacity.
Wireless companies have to spend a tremendous amount of money on building and maintaining wireless networks, and pay tens of billions of dollars for spectrum. Cable companies, however, are able to shortcut this expense by buying buckets of data from wireless companies (AT&T and Verizon). As a result, both Charter and Comcast are offering wireless service at a significant discount to their wireless competitors.
The wireless business is growing at a rate of 30–40% a year, requiring minimal investment from cable companies. In a few years, once it reaches scale, it will become a significant contributor to earnings.
December 18th, 2022
Just as we were ready to send out this letter, right after I wrote the above, Charter held an investor day on December 13th. Management said they would roll out DOCSIS 4.0 across their full footprint in three years. The cost per customer is going to be $100, not the $200 that we, and everyone else, had expected. This was great news! $100 is less than two months of internet subscription.
Charter has 55 million customers, so additional investment (capital expenditure) over the next three years will total $5.5 billion. Charter will pay for it from its abundant cash flows. This new technology will allow customers to download and upload at 1 gigabit per second (with potential to take it up to 10 gigabits per second), putting cable technology completely on par with fiber.
In addition to increasing the company’s competitive advantage and pricing power (its product is priced lower than the fiber competition), management said that this investment in DOCSIS 4.0 will reduce its maintenance capital expenditures by $600 million to $1 billion a year.
The stock declined by 20% in response to the news. We laughed!
The market did not appreciate this investment, as it meant that Charter would have to reduce the amount of money it spends on buying back its own stock by the increase in capital expenditures. This is one of the best examples of time arbitrage we have ever seen. The market is not looking past its nose. Charter’s management’s time horizon is years into the future, as it should be.
The value of any asset, be it a company, cow, or bond, is the present value of its future cash flows. We put the new assumptions into our Charter discounted cash flow model: We reduced its cash flows by $5.5 billion over the next three years, and then increased them by $800 million after that (a midpoint number in the company’s guidance). Cost savings alone, ignoring the improved ability to raise prices and grow market share, increase Charter’s value (the present value of cash flows) by about 10%.
Paraphrasing Ben Graham, in the short term the market is a speculative casino but in the long term it is an Excel spreadsheet running discounted cash flows.
All cable stocks have declined, so we did some minor reshuffling of the portfolio. In taxable accounts we sold all of Charter, took a short-term loss, and bought Comcast. In nontaxable accounts we reduced our position in Charter and bought Comcast. We also bought Liberty Broadband in almost all accounts. Liberty Broadband is a company controlled by John Malone that owns about 30% of Charter. The Liberty discount for Charter has widened to about 25%, giving us the opportunity to buy Charter at a significant discount. Though this number may vary by portfolio, our exposure to the cable industry is now about 5%.
Charter and Comcast are like two first cousins who share the same grandparent – John Malone. A large part of Comcast is TCI, a company started by Malone. Today, Malone personally owns roughly 2% of Charter through his Liberty Broadband holding.
Cable is a much better business than wireless, for one reason: It has much less competition. Charter and Comcast compete with wireless carriers and phone companies, but they don’t compete against each other. Their footprints don’t overlap and will never overlap. In fact, they have joint ventures together. Charter’s and Comcast’s cable businesses are of a similar size. Charter has a laser focus on the cable business, whereas Comcast also has a media business (it owns NBC, Sky, and other media properties). Charter is more leveraged than Comcast, but its stock is cheaper. We like the management of both companies.
Posted on May 29, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
COLLEGE 529 SAVINGS PLAN DAY
By Staff Reporters
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May 29th is observed across the U.S. as 529 Day or 529 College Savings day. It was introduced to increase awareness of these plans and encourage families to start saving toward future education expenses.
Posted on May 28, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Happy Summer 2023
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Key negotiators struck an agreement in principle Saturday night to extend the debt ceiling and avert a catastrophic default, just days before the Treasury Department says the U.S. could run out of money, according to three Republican sources. The deal — which will raise the federal debt limit in exchange for cuts to spending — still has to be converted into legislative language and pass both the Republican-led House and Democratic-controlled Senate. It follows weeks of negotiations led by President Joe Biden and Speaker Kevin McCarthy, amid demands by the GOP to extract spending cuts in exchange for allowing the nation to continue to pay the bills.
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Nvidia published thunderous first quarter earnings and shared insane forecasts for the second quarter that fueled its stock in after-hours trading. Nvidia shares, which closed at $305.38, soared nearly 29% to $393.49. This spectacular surge put Nvidia close to the symbolic threshold of $1 trillion in market value ($972 billion). Nvidia (NVDA) – Get Free Report said, in a statement, it expects revenue of around $11 billion, plus or minus 2%, for the second quarter of its fiscal year. This figure is about $4 billion higher than analysts’ expectations of $7.15 billion.
Posted on May 27, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Money managers often share their thoughts in real time, but fewer still have 50 years of experience navigating the markets. Hedge fund manager Doug Kass is one of them.
Kass, who offers his stock picks and insights in his Real Money Pro Daily Diary, doesn’t pull any punches when it comes to managing risk. He recently told investors interested in artificial intelligence that the road to AI profits will likely be rockier than expected for the likes of Nvidia (NVDA) – Get Free Report, Microsoft (MSFT) – Get Free Report, Alphabet (GOOGL) – Get Free Report, and C3.ai (AI) – Get Free Report.
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Here is where the major benchmarks ended yesterday:
The S&P 500® Index was up 54.17 points (1.3%) at 4205.45; the Dow Jones industrial average was up 328.69 (1.0%) at 33,093.34; the NASDAQ Composite was up 277.59 (2.2%) at 12,975.69.
The 10-year Treasury yield was little changed at 3.81%.
CBOE’s Volatility Index was down 1.22 at 17.93.
Tech remains the runaway upside leader among sectors, with the Philadelphia Semiconductor index soaring over 6% to a 14-month high Friday. The NASDAQ-100 also ended near a 14-month high. Communications services and real estate were also strong.
Oilfield services and other energy companies were among the weakest sectors, despite a jump of more than 1% in crude oil futures.
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