The CPI Report and Inflation

By Staff Reporters

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Stocks were a mixed bag yesterday after the consumer price index showed prices rose 4.9% last month, marking the 10th month in a row of cooling inflation and the first time inflation has dipped below 5% in two years. That’s still higher than the Fed’s 2% target, but it leaves space for Jerome Powell to chill out a bit. Tech stocks got a boost from that news, especially Google’s parent, Alphabet, which also benefited from rolling out its new AI.

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What drove the markets?

Economists polled by the Wall Street Journal had forecast the CPI increasing 0.4% and advancing 5.0% over the past year. The core inflation rate rose 0.4% in April for the second straight month, in line with economists forecasts. For the year, the core inflation rate, excluding food and energy prices, increased 5.5% down from a 5.6% rise in March.

“The below 5% headline CPI number is a sigh of relief to a market on edge,” said Alexandra Wilson-Elizondo, co-head of portfolio management for multi asset solutions at Goldman Sachs Asset Management.

Traders hoped that the lower-than-expected inflation data may leave room for the U.S. central bank to refrain from raising interest rates further at its June meeting.

“The data today will be interpreted as not hot enough to force the Fed’s hand in June … We do not think this one data point will determine the outcome of the June FOMC meeting because we still have a string of economic data to process between now and then,” wrote Wilson-Elizondo.

“The details of the print suggest that we are still a meaningful distance from the Fed’s 2% target, giving little reason for the Fed to cut this year.”

Investors priced in the Federal Reserve beginning to trim borrowing costs in coming months, a hope that is seen underpinning stocks of late and helping the S&P 500 index move towards the top of the 3,800 to 4,200 range its has held all year.

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TECH STOCKS UP: Bank Earnings Reports are Next?

By Staff Reporters

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YouTube: CEO Susan Wojcicki Logs Off

By Staff Reporters

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Susan Wojcicki, the CEO of YouTube for the last nine years, is stepping down. The video site has exploded under her watch, and its $29.2 billion in ad revenue last year accounted for about 10% of Google parent company Alphabet’s total sales.

But Wojcicki’s time at the company far predates YouTube—in fact, she was Google’s 16th employee. She was also its first landlord: In 1998, Wojcicki rented out her garage in Menlo Park, CA, to Google’s co-founders for $1,700 a month.

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ARTIFICIAL INTELLIGENCE: Google V. Microsoft

The AI Gloves are Coming Off?

By Staff Reporters

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Google (GOOG, GOOGL) just announced several new AI-powered features for its Search, Maps, and Lens apps. The announcement comes just a day after rival Microsoft (MSFT) rolled out a new version of its Bing search engine complete with generative AI capabilities, bringing a rare threat to Google’s search supremacy.

But, shares of Google parent company Alphabet were down more than 7% today as investors expressed skepticism about these new features.

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Wither STOCK SPLITS?

By Staff Reporters

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A stock split occurs when a company breaks up its existing shares to create a higher number of lower-value shares. Stock splits have the effect of reducing the trading price of a stock, which makes it more liquid and more affordable for investors.

Companies that engage in stock splits often have a nominally high share price, which is typically achieved by executing and innovating on the operating front. Companies within this list have high potential for a stock split, given their nominally high stock price.

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Last year, well over 200 companies announced and implemented stock splits. However, the type of split that excites investors most is a forward stock split. This is where the share price of a company is reduced and its outstanding share count increases by the same magnitude, Thus, there’s no change in market cap. Companies that enact forward stock splits are usually firing on all cylinders and out-innovating their competition.

Reverse: https://medicalexecutivepost.com/2022/10/08/what-is-a-reverse-stock-split/

As we go boldly forward into a new year, two stock-split stocks stand out as amazing values that can confidently be bought hand over fist. Alphabet and Amazon? Meanwhile, another widely owned stock-split stock looks to be worth avoiding in 2023. Tesla?

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FLASH ALERT: “Alphabet” Stock Shares!

By Staff Reporters

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  • Stocks are hot and posted their third straight day of gains on hope that the FOMC might end its rate hikes at some point in the future. But that streak could end today.
  • Alphabet shares took a tumble in late trading after the company revealed its fifth consecutive quarter of slower revenue growth. Cracks are emerging in some of its core properties: Google search and YouTube. YouTube revenue declined for the first time since Google started reporting the division’s earnings separately.
  • Alphabet’s total quarterly revenue growth drastically declined from 41% to 6%.
  • The growth rate of Microsoft’s search and news advertising business has been shrinking each quarter of the past year, coinciding with the general downward trajectory of the entire online advertising market.

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PODCASTS: The “Long Fix” for America’s Healthcare Crisis

By Vivian Lee MD PhD MBA

Politics and Prose

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ERIC BRICKER MD PODCAST: https://www.youtube.com/watch?v=fbXM44YSBfs

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ALPHABET GOOGLE: Stock Splitting!

By Staff Reporters

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DEFINITION: A stock split or stock divide increases the number of shares in a company. For example, after a 2-for-1 split, each investor will own double the number of shares, and each share will be worth half as much. A stock split causes a decrease of market price of individual shares, but does not change the total market capitalization of the company: stock dilution does not occur.

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EXAMPLE:

Google parent company Alphabet said it would split its stock 20–1. That means in July 2022, Alphabet shareholders will receive 19 more shares for every one that they own. It doesn’t mean they’ll be 20x richer—the price of the stock they hold will drop a proportional amount. If the stock split were to happen now, Alphabet’s share price would fall from $2,865 to $143.

Image result for stock split

Why does it matter?

In many ways, it doesn’t. A stock split does not change the value of the company. It’s simply a way to increase the number of shares outstanding.

Think of it like slicing a pizza. At a share price of almost $3,000, Alphabet’s slices were a wide a monstrosity. With the stock split, it’s cutting company ownership into smaller portions. But, in the end, the pizza isn’t growing—there are just more slices to be shared.

So why do it? By making the slices of its company smaller, it hopes that more people will look at them and say, “Well I guess one couldn’t hurt.” Alphabet said the goal of the stock split is to attract more small-time investors who might have been intimidated by buying in at such a steep share price.

  • Only 27 other stocks in the S&P 500 have share prices above $500 besides Alphabet.

And, there’s evidence this bit of corporate inception can be effective. To see why, let’s look at what happened when two other tech giants, Tesla and Apple, split their stock recently.

  • When Apple split its stock 4–1 in July 2020, retail investors upped their purchases from $150 million per week to nearly $1 billion, according to Vanda Research.
  • When Tesla split its stock 5–1 in August 2020, retail investing jumped from $30–$40 million/week to $700 million.

There may be another play for Alphabet here—and that is to pad its resume for inclusion in the iconic Dow Jones Industrial Average. Because the Dow is weighted by share price (an antiquated system, to be sure), Alphabet at its current price would overwhelm all of the companies. It would become the Alphabet Industrial Average. At $247, it becomes a much more attractive candidate for the Dow.

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Stock MARKET Update

ALL TIME HIGHS?

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  • Markets: The S&P begins the week after closing at an all-time high last Friday. The index has closed at a record more times this year (67) than in any other year since 1995. It needs 10 more to tie the mark.
  • More S&P fun facts: Microsoft, Alphabet, Apple, Nvidia, and Tesla alone account for over a third of the S&P’s gains this year.
  • CITE: https://www.r2library.com/Resource/Title/082610254

NOTE: 35,630.18market open‎-340.81 (‎-0.95%)as of 12/13/2021, 11:31 AM EST

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