DAILY UPDATE: Cerberus Capital Management, AT&T, Microsoft, Bank America and the Rising Markets

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The country’s largest private, for-profit hospital chain paid out a $790 million dividend — with a big chunk of that money going to its Manhattan-based private equity owner — before it filed for bankruptcy several years later, according to a report. Steward Health Care System, the Boston-based network of 30 hospitals that operated in rural and low-income areas, made the payout to Cerberus Capital Management in 2016, the same year the chain recorded a net loss of $300 million, The Wall Street Journal reported.

CITE: https://www.r2library.com/Resource

What’s up

  • Roku rose 5.67% thanks to an analyst upgrade by Wolfe Research, pushing the streaming platform from hold to buy based on its focus on profitability.
  • Signet Jewelers gained 11.26% in spite of missing on revenue forecasts. But shareholders were encouraged to see stronger same store sales, solid earnings, and signs that the engagement ring industry is improving.
  • Kroger popped 7.14% after the supermarket stock missed top and bottom line estimates this quarter, but then adjusted its earnings per share to make them look better.
  • Petco Health & Wellness added another 11.27% on top of yesterday’s post-earnings surge after getting a shout-out from meme stock royalty Roaring Kitty.
  • Warner Bros. Discovery jumped 10.37% thanks to a new deal with Charter Communications, whose stock also rose 3.55% on the news.

What’s down

  • Micron Technology dropped 3.79% after a double-whammy of analyst downgrades from Raymond James and BNP Paribas citing its slowing growth.
  • Sirius XM Holdings sank another 9.86% after yesterday’s news that the company will merge with Liberty Sirius XM Group, offer a 10-for-1 stock split, and buy back about $1.2 billion in shares (phew, that’s a busy day).
  • US Bancorp slid 1.95% after announcing a share buyback program of up to $5 billion, which is usually a good thing.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The SPX gained 42 points (0.75%) to 5,595.76; the Dow Jones Industrial Average® ($DJI) rose 235 points (0.58%) to 41,096.77; the NASDAQ Composite® ($COMP) gained174 points (1.0%) to 17,569.68.
  • The 10-year Treasury note yield (TNX) gained 3 basis points to 3.69%.
  • The CBOE Volatility Index® (VIX) fell 3.34% to 17.10.

CITE: https://tinyurl.com/tj8smmes

he networks for Microsoft Teams and Outlook, as well as AT&T, suffered widespread outages on Thursday morning, according to the tracking site Downdetector. About 4,000 outages on Microsoft Teams were reported at 9 a.m. ET, increasing from less than 300 an hour earlier. A lesser outage for Microsoft Outlook was also noted by Downdetector, with reports of more than 1,000 outages at 9 a.m. ET. Reports of an outage with landline internet and mobile internet for AT&T also jumped to more than 4,000 at 9 a.m. ET on Sept. 12th, according to Downdetector.

Stat: $24. That’s Bank of America’s new hourly minimum wage in the US, a dollar increase on the way to its long-promised $25 by 2025. (CBS News)

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Investing “Tips” on Initial Public Offerings [IPOs]

Some Investing Tips and Pearls

By Dr. David Marcinko MBA MEd CMP

http://www.MarcinkoAssociates.com

Initial public offerings, known as IPOs, tend to attract a lot of investor interest – especially when the company is well-known. However, that excitement isn’t always matched by investment returns.

“Tips and Pearls”

So, here are some tips to consider before you decide to invest in an IPO:

• Don’t let the excitement surrounding an IPO cloud your judgment. Too often, there is little financial information about the companies themselves, and many are not profitable. This can translate into extremely volatile stock prices.

• While an IPO’s stock price tends to rise on the day it begins trading, investors who bought shares at the end of the first day haven’t always fared well. The stocks have often fallen below the closing first-day price after six months.

High volatility and a falling stock price are not generally a recipe for attractive investor returns.

So what steps should you take if you’re still interested in an IPO?

1. Understand that the opening price will likely be different from the official IPO price. New issues can experience extreme volatility in the first few hours and days of trading in the secondary market. When the company’s stock opens for secondary trading and becomes more widely available, the price can be significantly different from the IPO price set by the security underwriters. In addition, new issues often do not begin trading the moment the market opens.

2. Use a limit order. This can help you avoid paying more for the stock than you intended. Once you understand the risks of purchasing a stock during its first public trading days, work with your financial advisor to determine the highest price you’re willing to pay for the stock, and then set that amount as your limit.

3. Remember that an IPO must be priced before an order can be accepted. For example, Edward Jones typically does not accept orders until after an IPO has been priced, which is usually the morning the new issue begins trading. In addition, your financial advisor is not permitted to accept market orders for any IPO prior to its trading in the secondary market.

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Assessment

Remember to always do your homework before deciding on any investment, including an IPO. This includes working with your financial advisor or accountant to determine whether the investment is suitable for your portfolio.

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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DAILY UPDATE: Unemployment Rate, Banking Rules and Mental Health as the Markets Continue to Rise

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After rising for more than a year, the unemployment rate fell to 4.2% in August from 4.3% in July, the Bureau of Labor Statistics reported. That dip matched Wall Street’s consensus forecast, but the 142,000 new jobs added fell short of the 160,000 that analysts had expected, according to FactSet data cited by CNN.

The Biden administration released a final rule this week that would require payers to cover behavioral health services, including addiction care, to the same extent that they’d cover all other forms of healthcare. The move comes amid a rising mental health crisis in the US and in light of the fact that the vast majority of people with substance use disorders don’t receive treatment.

CITE: https://www.r2library.com/Resource

What’s up

  • Dave & Busters Entertainment popped 4.66% after announcing strong sales and earnings growth last quarter, along with opening 13 new locations (more tokens for everyone!).
  • Petco Health and Wellness roared 32.90% despite mixed earnings last quarter, though shareholders wagged their tails at new CEO Joel Anderson’s plans to improve profitability.
  • Viking Therapeutics rose 11.31% thanks to JP Morgan initiating coverage of the company with a bullish overweight rating.

What’s down

  • Bank of America slipped 0.71% after a new filing revealed that Warren Buffett sold more shares of the company last quarter.
  • Rentokil Initial plummeted 21.07% once the pest control company made it clear that slow sales and currency exchange rates will take a $105 million toll on full-year profits.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The SPX rose 59 points (1.0%) to 5,554.13; the Dow Jones Industrial Average® ($DJI) gained 125 points (0.3%) to 40,861.71; the NASDAQ Composite® ($COMP)rose 370 points (2.17%) to 17,395.53.
  • The 10-year Treasury note yield (TNX) climbed just under two basis points to 3.66%.
  • The CBOE Volatility Index® (VIX) fell to 17.7, the lowest close so far this month.

CITE: https://tinyurl.com/tj8smmes

Planned Fed rules are a win for big banks. The likes of JPMorgan and Bank of America celebrated the Fed walking back some of its proposals for tighter banking rules yesterday

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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CAREER: Physician Coaching and Development

MARCINKO ASSOCIATES, Inc.

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Did you Know?

Experts estimate that it can cost more than $1 million to recruit and train a replacement for a doctor who leaves the profession because of burnout. But, as no broad calculation of burnout costs exists, Dr. Tait Shanafelt [Mayo Clinic researcher and Stanford Medicine’s first Chief Physician Wellness Officer] said Stanford, Harvard Business School, Mayo Clinic and the American Medical Association (AMA) are further cost estimating the issue. Nevertheless, Shanafelt and other researchers have shown that burnout erodes job performance, increases medical errors, and leads doctors to leave a profession they once loved.

CITE: https://www.r2library.com/Resource

Fortunately, we can help. From formal coaching to second career opinions, mentoring and advising, we can help with our remediation executive career programs. Regardless of what is happening in your life, it is wonderful to have a non-partial, confidential and informed career coach and sounding board on your side.

CITE: JAMA Internal Medicine [Effect of a Professional Coaching Intervention on the Well-Being and Distress of Physicians].

NCBI: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6686971/

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DAILY UPDATE: Google DOJ, Big Lots Bankrupt, Starbucks CEO, Rite Aid Private as Markets Rise

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REMEMBER SEPTEMBER 11th – PATRIOT DAY

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Rite Aid completed its financial restructuring by eliminating $2 billion in debt and adding $2.5 billion in exit financing, as the slimmed-down chain is now led by a new CEO

Google reported to court yesterday to defend itself against monopoly allegations for the second time in less than a year in a new case that has the potential to strip the world’s largest online advertiser of a chunk of its ad business.

And, Apple and Google lost on appeal to the European Union’s highest court Tuesday in two separate cases requiring the tech giants to face billions of dollars in fines. The decisions by the Court of Justice of the European Union mark a significant win for the bloc’s antitrust chief Margrethe Vestager.

CITE: https://www.r2library.com/Resource

What’s up

  • Mission Produce soared 21.05% after the farming company announced impressive revenue growth last quarter thanks to rising avocado, blueberry, and mango prices. Rival produce producer Calavo Growers announced similarly strong results for much the same reasons, pushing shares 10.75% higher.
  • Alibaba rose 2.90% after its Hong Kong shares were added to a new program linking Hong Kong stocks with Chinese stock exchanges, which should help attract more investors.
  • Boot Barn, which is the name of a real company that sells Western apparel, popped 9.94% and hit an all-time high today after a JPMorgan analyst raised his price target 10%.

What’s down

  • Southwest Airlines descended 1.61% after Executive Chairman Gary Kelly announced he’ll retire next year in the face of activist investing pressure.
  • Ally Financial plummeted 17.65% after the consumer lending company’s CEO highlighted ongoing credit challenges in today’s economy.
  • JPMorgan sank 5.21% thanks to comments from its COO that investor expectations for net interest income, a key part of the bank’s business, are too high.
  • Hewlett Packard Enterprise dropped 8.41% on the news that the tech company will sell $1.35 billion in preferred stock to fund its acquisition of Juniper Networks.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The SPX rose 24.47 points (0.45%) to 5,495.52; Dow Jones Industrial Average® ($DJI) fell 92.63 points (–0.23%) to 40,736.96; NASDAQ Composite® ($COMP)added 141.27 points (0.84%) 17,025.88.
  • The 10-year Treasury note yield (TNX) dropped five basis points to 3.64%, the lowest close since mid-2023.
  • The CBOE Volatility Index® (VIX) continued to pull back from last week’s elevations, closing at 19.08.

CITE: https://tinyurl.com/tj8smmes

Big Lots, the 1,300+ store discount chain, has filed for bankruptcy with a plan to sell itself to private equity firm Nexus Capital Management for ~$760 million and a commitment to keep offering “extreme bargains.”

The new CEO of Starbucks, Brian Niccol, formerly of Chipotle, is now officially in charge of the coffee chain.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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PHYSICIAN FINANCIAL & BUSINESS ADVICE ONLY – Not Sales!

MISSION STATEMENT

Open Letter from the CEO

Dr. David Edward Marcinko MBA CMP™

http://www.MarcinkoAssociates.com

ALL MEDICAL AND HEALTHCARE COLLEAGUES

Did you know that at MARCINKO & Associates, all medical colleagues throughout the United States may contact us when they are considering the sale, purchase, strategic operating improvement, merger, acquisition and/or other financial business or related personal financial planning transaction?

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Our difference is “hard” knowledge and insider financial guidance that helps medical colleagues, nurses, private practitioners, clinics, ambulatory surgery, radiology and outpatient wound care centers realize their ultimate economic goals. This typically includes managerial and cost accounting, financial ratio analysis, fair market valuation business appraisals, business plan creation and personal financial planning.

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Our “expert witness” business litigation support service and divorce mediation, arbitration, asset division, settlement and second opinion offerings are always available, as well.

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And, our “soft” skill professional career guidance and mentoring center includes executive coaching, consulting and mentoring advisory programs for stressed, conflicted or burned-out physicians and medical practitioners.

Most importantly, our professional fees are reasonable and always transparent.

MARCINKO & Associates also serves universities, medical, business, graduate and nursing schools; physicians, dentists, podiatrists, optometrists and legal societies. This includes accountants, financial service providers, wealth and hedge fund managers, emerging entities, hospitals, CEOs and their BODs, the press, media and related organizations.

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Contact us for an educational white-paper on most any topic.

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Now, please review our website to learn more.

And, always retain us when needed.

How May We Serve You?

DAVID EDWARD MARCINKO

email: MarcinkoAdvisors@msn.com

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DAILY UPDATE: Eli Lilly & Private Health Equity as Stocks Rebound

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Stat: 60%. That’s how much Eli Lilly’s stock has grown this year, making it a contender to be the first healthcare stock to hit $1 trillion. (CNBC)

Quote: “We can’t wait another day to begin reviewing private equity investments in healthcare. When we look across the nation, we see private equity’s interest in healthcare growing by leaps and bounds.”—Jim Wood, a California state representative who cosponsored a bill to block PE acquisitions in healthcare (the Wall Street Journal)

CITE: https://www.r2library.com/Resource

What’s up

  • Boeing went boing 3.36% after the beleaguered airplane maker reached a tentative agreement with the Machinists union to avoid a strike.
  • Summit Therapeutics soared 55.99% after the pharma company announced the stunning results of its lung cancer treatment ivonescimab (say that name five times fast).
  • JetBlue Airways rose 7.17% after a Bank of America analyst upgraded the company, citing the airline’s revenue-improvement initiatives.
  • Cannabis stocks got high(er) after former President Donald Trump announced he’d be willing to relax Federal marijuana laws if he is re-elected.

What’s down

  • Big Lots plummeted 40% before it was delisted entirely after the discount retailer filed for bankruptcy and sold itself to a private equity firm. Big Lots? More like Big Loss, amirite?! (Credit to reader Chris C. for that terrible joke)
  • Merck sank 2.06% after Summit Therapeutics (see above) announced that, as part of its late-stage trial results, its new drug ivonescimab outperformed Merck’s Keytruda.
  • Alphabet fell 1.33% as the search behemoth’s antitrust trial began this afternoon.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 62.63points (1.16%) to 5,471.05; Dow Jones Industrial Average® ($DJI) gained 484.18 points (1.20%) to 40,829.59; NASDAQ Composite® ($COMP)added 193.77 points (1.16%) 16,884.60.
  • The 10-year Treasury note yield (TNX)fell just over one basis point to slightly below 3.7%.
  • The CBOE Volatility Index® (VIX) dropped sharply to 19.8, back below the historic average of 20.

The influential semiconductor sector, which wilted last week amid concerns about guidance from Nvidia (NVDA) and Broadcom (AVGO), revived Monday with a 2% gain for the PHLX Semiconductor Index (SOX). The SOX is still down double-digits from its August highs, pulled down by concerns of slowing economic demand. 

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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On Internet and Investing Psychology

And … Wi-Fi Doctor Investors

[By ME-P Staff Reporters]

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wifi

Sourcehttp://www.xkcd.com

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OVER HEARD IN THE DOCTOR’S LOUNGE

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Of course you don’t need a human financial advisor … until you do.

Today, we’ve had unfettered internet access to a wide range of investments, opinions and models for at least two decades. So, why the bravado to go it alone; five straight positive years for equities, since 2009!

The financial advisor’s role is to remove the human element and emotion from investing decisions for something as personal as your wealth. Emotion drives the retail investor to sell low (fear) and buy high (greed). This is the reason why the average equity returns for retail investors is less than half of the S&Ps returns.

No, of course you don’t need a human financial advisor … until you do. And when you do, it may be too late.

***

Dan Ariely PhD

[The Irrational Economist]

WiFi

OUR TEXT BOOK

[BY DOCTORS – FOR DOCTORS – PEER REVIEWED]

[Chapter One]

UNIFYING THE PHYSIOLOGIC AND PSYCHOLOGIC FINANCIAL PLANNING DIVIDE  [Holistic Life Planning, Behavioral Economics, Trading Addiction and the Art of Money]

  • Dr. Brad Klontz PhD CFP
  • Dr. Ted Klontz PsyD
  • Dr. Eugene Schmuckler PhD MBA MEd
  • Dr. Kenneth Shubin-Stein MD CFA
  • Dr. David Edward Marcinko MBA CMP MBBS [Hon]

More:

COACH

Channel Surfing the ME-P

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Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Financial Planning MDs 2015

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants

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DAILY UPDATE: Dell, Palantir and the Markets with Fewer Jobs

MEDICAL EXECUTIVE-POST TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

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Dell and Palantir are poised to be added to the S&P 500 index, replacing Etsy and American Airlines, respectively.

CITE: https://www.r2library.com/Resource

Markets: September has been around for one week, and it’s already taking a toll on the market. Stocks dipped yesterday after new government data showed the labor market continuing to cool, capping off the S&P 500’s worst week since March 2023 and the NASDAQ’s worst since 2022. Nvidia had another rough day as investors fretted about tech stocks.

CITE: https://tinyurl.com/2h47urt5

The Labor Department said that the economy added 142,000 jobs in August, which was fewer than economists expected, bringing the three-month job creation average to its lowest since mid-2020.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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About EngagewithGrace.org

Contemplating End-of-Life Dignity

[By Staff Reporters] 

SPONSOR: http://www.MarcinkoAssociates.com

According to the website, Engage with Grace, we make choices throughout our lives — where we want to live, what types of activities will fill our days, and with whom we spend our time, etc. These choices are often a balance between our desires and our means, but at the end of the day, they are decisions made with intent.

Somehow when we get close to death, however, we stop making decisions. We get frozen in our tracks and can’t talk about our preferences for end of life care. 

 

 

Death Studies

Studies loom out there — 73% of Americans would prefer to die at home, but anywhere between 20-50% of Americans die in hospital settings. More than 80% of Californians say their loved ones “know exactly” or have a “good idea” of what their wishes would be if they were in a persistent coma, but only 50% say they’ve talked to them about their preferences.

But, end of life experience is about a lot more than statistics. It’s about all of us.

Genesis and Epiphany

In the summer of 2008, Matt Holt (Founder of Health2.0) and Alexandra Drane (President of Eliza) met with some friends for dinner. Over their second cocktail, they got deep into conversation about these very topics. Many of us live with such intent — why do we put the end of our lives in someone else’s control?  Why isn’t this topic a conversation that people are having? How could we help start it? And it hit them — What if we could work together to start a viral movement — a movement focused on improving the end of life experience?  What if we took responsibility for starting a national (even global) discussion that, until now, most of us haven’t had?

Engage With Grace

The One Slide Project was designed with one simple goal: to help get the conversation about end of life experience started. The idea is simple: Create a tool to help get people talking. One Slide, with just five questions on it.  Five questions designed to help get us talking with each other, with our loved ones, about our preferences. And we’re asking people to share this One Slide — wherever and whenever they can… at a presentation, at dinner, at their book club. Just One Slide with five questions to help get all of us talking about death. Just One Slide that we as a community could collectively rally around sharing — in meetings, at a conference, or over a drink.

This is the link to the slide, and this is what we are asking you to do …

Download the One Slidehttp://engagewithgrace.org/about/

Share it any time you can — at the end of presentations, at dinner, or at your book club. Think of the slide as currency and donate just two minutes whenever you can. Commit to being able to answer these five questions about end of life experience for yourself and for your loved ones. Then commit to helping others do the same. Get this conversation started.

Assessment

Let’s start a viral movement driven by the change we as individuals can affect …and the incredibly positive impact we could have collectively. Donate just two minutes to adding just this One Slide to the end of your presentations. Get others involved. Help ensure that all of us — and the people we care for — can end our lives in the same purposeful way we live them.

Just One Slide, just one goal. Think of the enormous difference we can make together.

Conclusion

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DAILY UPDATE: Nvidia DOJ and Nippon Steel as Stocks Sill Slide

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A bad day for Nvidia got even worse on Tuesday when Bloomberg reported that the Department of Justice subpoenaed the chipmaker as part of its investigation into whether the world’s hottest company unfairly wields its industry dominance. Yesterday, Nvidia denied it was technically subpoenaed. Bloomberg followed up to say that Nvidia was merely splitting hairs about the type of request it received from the DOJ but that it was in fact asked to answer questions about its empire.

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What’s up

What’s down
  • C3.ai, which sounds like the name of a new Star Wars droid, sank 8.21% after the enterprise software company announced that subscription revenue fell short of expectations last quarter.
  • Hewlett Packard Enterprise staggered 6.02% after posting record AI revenue but paying the price for it.
  • Copart dropped 6.67% once the online car auctioneer reported solid revenue growth but missed earnings expectations last quarter.
  • ChargePoint plummeted 17.75% thanks to an absolutely terrible quarter for the EV charging network company.
  • Toro Company, makers of your dad’s favorite lawnmower, fell 10.09%. Sales to residential customers rose last quarter, but sales to professionals, who buy more expensive equipment, fell.

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Here’s where the major benchmarks ended:

  • The SPX fell 16.66 points (–0.30%) to 5,503.41; the Dow Jones Industrial Average® ($DJI) dropped 219.22 points (–0.54%) to 40,755.75; the NASDAQ Composite® ($COMP) added 43.36 points (0.25%) to 17,127.66.
  • The 10-year Treasury note yield (TNX)slid to 3.73%, its lowest close since August 5 following today’s jobs-related data. 
  • The CBOE Volatility Index® (VIX)fell to just above 20, near its historic average.

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The president is gearing up to block Japan’s Nippon Steel from acquiring US Steel, according to the Washington Post—a move that could end the highly politicized deal.

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DAILY UPDATE: Pfizer and Eli Lilly as Stock Fall Again!

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Pfizer is stepping out from the pharmacy aisle and into the living room with a new website called PfizerForAll. The platform helps patients find information about migraines, Covid, flu, or other seasonal respiratory viruses, the pharma giant said in a Tuesday press release.

Eli Lilly is slashing the price of its blockbuster weight loss drug, Zepbound, offering new, single-dose vials, the company announced on August 27th. Self-pay patients with an on-label prescription can purchase 2.5-mg and 5-mg single-dose vials of Zepbound at roughly 50% off the drug’s list price through the pharma giant’s direct-to-consumer website, LillyDirect, which launched in January. This is the first time the drug maker has offered the drug in single-dose vials rather than an auto-injector.

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What’s up

What’s down

  • Dollar Tree plummeted 22.16%, its biggest selloff in 23 years, after the discount retailer posted a terrible earnings report.
  • Zscaler plunged 18.67% after issuing much lower guidance for the coming quarters than shareholders expected, despite the cybersecurity company beating estimates this quarter.
  • Dick’s Sporting Goods fell 4.89% in spite of management projecting strong sales growth in the rest of the year. Investors thought that forecasts would be higher.
  • Asana sank 4.97% due to today’s theme: The software management company’s growth projections didn’t meet shareholder expectations.
  • Super Micro Computer dropped 4.14% after it was downgraded by Barclays analysts as the fallout from short seller Hindenburg Research’s latest report continues.

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Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) fell 8.86points (–0.16%) to 5,520.07; the Dow Jones Industrial Average® ($DJI) added 38.04 points (0.09%) to 40,974.97; the NASDAQ Composite® ($COMP) declined 52.00 points (–0.30%) to 17,084.30. 
  • The TNX dropped to just under 3.77%, the lowest since August 21st.
  • The CBOE Volatility Index® (VIX) closed higher at 21.05 but down from intra-day peaks.

And, the market’s defensive pose continued, with utilities, staples, and real estate leading sector gains, while energy dove again amid weak commodity prices. Info tech, the last place finisher Tuesday, fell again, but only 0.35%, helped by slight gains in the semiconductor sector.

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Stat: 19%. That’s how much lower your risk of developing heart disease could be if you caught up on sleep during the weekend, according to a recent study. (CNN)

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DAILY UPDATE: Berkshire Hathaway & the “September Effect” Stock Market Collapse

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The September Effect refers to the historically weak stock market returns observed during the month of September. In fact, September has been the worst performing month, on average, going back nearly a century.

Stat: $1 trillion. That’s how much Berkshire Hathaway is now worth. The Warren Buffet-led company is the first outside of tech to join the trillion-dollar club, joining behemoths like Apple, Amazon, and Microsoft. (the Washington Post)

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What’s up

What’s down

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Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX)dropped 119.47points (–2.12%) to 5,528.93; the Dow Jones Industrial Average® ($DJI) fell 626.15 points (–1.51%) to 40,936.93; the $COMP plummeted 577.32 points (–3.26%) to 17, 136.30.
  • The 10-year Treasury note yield gave back seven basis points to 3.84%.
  • The VIX soared to 20.72, the highest since August 13.

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DAILY UPDATE: Softening U.S. Labor Market

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Recent data suggest that the US labor market is softening, and the Federal Reserve appears to be taking notice. The Fed gave a strong signal in July that it was prepared to cut the federal funds rate target by 25 basis points in September. And so, Vanguard RIA is anticipating an additional second 25-basis-point cut this year and a target range of 3.25%–3.5% at the end of 2025.

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  • The U.S. economy created 114,000 jobs in July, and the unemployment rate rose to 4.3%. The unemployment rate increase is attributable to labor force growth exceeding job growth rather than an increase in job losses.
  • Broad consumer prices rose in July at the slowest year-over-year pace since early 2021. The Consumer Price Index (CPI) rose by 2.9% compared with July 2023, with shelter price increases accounted for nearly 90% of the monthly increase. The report reaffirms our view that shelter inflation will remain sticky through the rest of the year as supply expands only slowly and demand remains steady.
  • The Fed’s preferred inflation measure to guide policymaking, the core Personal Consumption Expenditures (PCE) price index, held steady year-over-year in June, rising by 2.6%. We foresee the pace of core PCE rising to 2.9% by year-end because of challenging comparisons with year-earlier data.
  • The U.S. economy displayed continued resilience in the second quarter, with real GDP growth increasing by an annualized 2.8%, with support from increases in consumer spending, nonresidential fixed investment, and government spending. Through midyear, GDP growth is tracking largely in line with our 2% outlook for the year. 

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LABOR DAY: 2024 Message from the Editor

 

Dear Medical Executive-Post Readers and Subscribers

To give my health a boost, I’m taking a complete break from alcohol, sugar, cookies, ice cream, coffee and tea for the entire month of September. Besides that, I’ll also prioritize sleep and increase my exercise from 7 to at least 10 times [hours] a week. This will allow me to focus on my diet and mental well-being. It’s essentially a month of health and wellness rejuvenation.

I’ve chosen to focus on alcohol and sugar because I want to challenge the idea that moderate drinking is part of a healthy lifestyle. In reality, only those who maintain a healthy lifestyle can afford to enjoy alcohol in moderation. But, sugar is everywhere and must be minimized for Type II diabetes and weight control.

Moreover, the long-term and excessive intake of sugary beverages and refined sugars can negatively impact your overall caloric intake and create a domino effect on your health. For example, excess sugar in the body can turn into fat deposits and lead to fatty liver disease.

A low sugar diet can help you lose weight and also help you manage and/or prevent diabetes, heart disease5 and stroke, reduce inflammation, and even improve your mood and the health of your skin. That’s why the low sugar approach is a key tenet of other well-known healthy eating patterns, such as the Mediterranean diet and the DASH diet.

And so, do you also commit to such “factory resets” now and then? Please comments. Do, enjoy the Labor Day Weekend, Bar-B-Ques with friends, family and colleagues.

I hope you continue to find the Medical Executive-Post useful!

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ChatGPT: Considers Changing Corporate Structure

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The Financial Times reports that the ChatGPT-maker is discussing changing its corporate structure, which currently has it governed by a nonprofit entity, to make it more attractive to investors as the company works to complete a funding round that values it at $100 billion.

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Apple, Nvidia, and Microsoft (which is already a big OpenAI backer) are said to be considering participating in the investment round.

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PHYSICIANS: Seeking Vital [Non-Clinical] Second Opinions?

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DAILY UPDATE: Medicare Part D Drugs, Kidney Donor Tax Credits, UnitedHealth and the Robust Stock Markets with DJIA at Record High

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What’s up

  • Dell Technologies rose 4.33% after beating analyst estimates on both the top and bottom lines thanks to strong AI demand.
  • Marvell Technology popped 9.16% after beating analyst estimates on both the top and bottom lines thanks to, believe it or not, strong AI demand.
  • MongoDB gained 18.34% after beating analyst estimates on both the top and bottom lines thanks to, you’re never going to guess, strong AI demand.

What’s down

  • After accidentally announcing earnings earlier than it intended, Gap fell 1.67%, despite earnings actually looking pretty good.
  • Super Micro Computer sank another 2.48% as the fallout from short seller Hindenburg Research’s latest report continues.
  • Elastic NV plummeted 26.49% after the software maker announced a weak quarterly report and forecast worse quarters ahead.
  • Alnylam Pharmaceuticals stumbled 8.47% in spite of announcing positive Phase 3 trial results for its new heart disease drug. Shareholders don’t think the new drug is as groundbreaking as it could’ve been compared to offerings from competitors like BridgeBio, which popped 13.12% on the news.

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Here’s where the major benchmarks ended:

  • The SPX climbed 56.44 points (1.01%) to 5,648.40, roughly flat for the week; the $DJI rose 228.03 points (0.55%) to 41,563.08, up almost 1% for the week; the NASDAQ Composite®($COMP) added 197.19 points (1.13%) to 17,713.62, down nearly 1% from a week ago.
  • The 10-year Treasury note yield (TNX) climbed three basis points to 3.91% but fell about 20 basis points in August.
  • The CBOE Volatility Index® (VIX) fell moderately to 14.96, well below levels above 30 recorded earlier this month.

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The Centers for Medicare and Medicaid Services (CMS) has been doing victory laps since announcing discounts on August 15 for 10 of the most expensive Medicare Part D drugs, a change that is set to go into effect in 2026. These discounts, called maximum fair prices (MFPs), kick off annual negotiations between the CMS and drug manufacturers. The negotiations were made possible by the Inflation Reduction Act (IRA), which also brings other changes such as Medicare Part D benefit redesign.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

And, Remember NFTs? This is an excellent history of OpenSea, the largest NFT marketplace, and all the chaos within its walls.

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DAILY UPDATE: Record DJIA High

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What’s up

What’s down

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Here’s where the major benchmarks ended:

An early rally lost steam, once again victimized by selling in semiconductors and mega caps despite signs of progress elsewhere. That progress helped lead the Dow Jones Industrial Average® ($DJI) to a new all-time high for the third time in four sessions.

  • The SPX fell 0.22 points (0.00%) to 5,591.96; the $DJI rose 243.63 points (0.59%) to 41,335.05; the NASDAQ Composite®($COMP) dropped 39.59 points (–0.23%) to 17,516.43.
  • The 10-year Treasury note yield (TNX) climbed two basis points to 3.86%.
  • The CBOE Volatility Index® (VIX) eased to 15.99.

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DAILY UPDATE: McKesson, CMS and Epic as Stocks Lost Ground

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McKesson plans to grow its oncology platform by investing nearly $2.5 billion for a 70% stake in Community Oncology Revitalization Enterprise Ventures (Core Ventures), which was launched earlier this year by Florida Cancer Specialists & Research Institute (FCS). The institute is a group practice of more than 250 physicians, 280 advanced practice providers and almost 100 Florida locations that will remain independent following the deal’s close. The deal will bring advanced treatments and improved care to patients while reducing the overall cost of care, McKesson’s chief executive said.


The Centers for Medicare & Medicaid Services (CMS) issued a new report detailing total complaints related to the No Surprises Act and Affordable Care Act compliance. Providers and consumers earned $4.18 million in relief. More than 12,000 complaints were tied to the No Surprises Act compliance, 10,300 of which were against providers, facilities and air ambulance services. Most of such complaints were about surprise billing for non-emergency services at an in-network facility, followed by surprise billing for emergency services and good faith estimates.


And…Electronic health records giant Epic recently announced plans to transition its customers to TEFCA, the Trusted Exchange Framework and Common Agreement, a nationwide network to exchange patient data that was mandated by the 21st Century Cures Act back in 2016. On the same day, Carequality, an interoperability network that Epic belongs to, also announced that it plans to align with TEFCA. As one of the largest health IT vendors in the industry, Epic’s commitment to moving customers over to TECFA is noteworthy and will likely help to drive adoption, health IT experts say.  

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What’s up

  • Chewy gained 11.06% today as profits at the online pet supplies retailer surged last quarter, easily beating projections.
  • Ambarella, a semiconductor company, jumped 10.63% after topping Q2 revenue estimates.
  • Box rose 10.83% with the cloud company upping its sales outlook for the year.
  • AeroVironment was up 9.06% after the defense firm secured a $990 million five-year contract with the US Army.

What’s down

  • Super Micro Computer plunged 19.02% after announcing it would delay filing its annual financial disclosures with the SEC. Yesterday, short-seller Hindenburg Research accused the high-flying server maker of “glaring accounting red flags” and other sketchy business practices.
  • Abercrombie & Fitch’s 21% revenue growth last quarter wasn’t enough to impress investors, who sent the retailer’s stock down 16.99%. They got spooked when CFO Fran Horowitz mentioned the “increasingly uncertain environment” in the second half of the year.
  • Trump Media stock dipped below $20/share for the first time since the Truth Social owner went public in March. It’s down more than 75% from its intraday peak set that month.
  • Foot Locker beat top and bottom line estimates for the second quarter. But its stock dropped 10.24% when it kept its full-year outlook steady and announced store closures in Asia and Europe.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) fell 33.62 points (–0.60%) to 5,592.18; the Dow Jones Industrial Average® ($DJI) declined 159.08 (–0.39%) to 41,091.42; the NASDAQ Composite®($COMP) dropped 198.79 points (–1.12%) to 17,556.03.
  • The 10-year Treasury note yield (TNX) rose about one basis point to 3.84%.
  • The CBOE Volatility Index® (VIX) climbed to 16.95, back toward levels seen nearly a week ago.

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DAILY UPDATE: Apple, Uber, Temu, Papa John’s, Icahn Enterprises & NFL Private Equity as Stock Markets Nudge Upward

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The National Football League is expected to vote to allow private equity ownership of franchises, marking a significant change to its ultra-exclusive ownership club. The vote, all but guaranteed to pass, is a historic softening by the NFL, which will be the last of the major sports leagues in North America to permit private equity ownership. The NBA, MLB and NHL currently allow PE to own up to 30% of a team, while the NFL’s expected cap is 10%.

And, the stock of PDD Holdings, parent company of the fast-growing Temu shopping app, sank more than 30% on Monday, losing more than $50 billion in market value, after the e-commerce giant posted disappointing revenue results and executives warned of rapid competition and non-business challenges that may dampen growth and profits going forward.

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What’s up

  • Costco (+1.84%) hit an all-time high and topped $900/share for the first time. Don’t be surprised if it becomes the latest retailer to announce a stock split after Chipotle, Walmart, and Williams-Sonoma, according to Barron’s.
  • Hain Celestial Group, the better-for-you food company that makes those veggie straw snacks in your office pantry, popped 18.59% after beating profit expectations for the latest quarter.

What’s down

  • Hims & Hers, the direct-to-consumer provider of generics, fell 7.51% after Eli Lilly announced a cheaper version of its weight loss drug Zepbound.
  • Paramount Global dropped 7.15% after billionaire Edgar Bronfman Jr. decided he wouldn’t pursue an acquisition of the legacy media company. That leaves Skydance Media poised for an $8 billion takeover.
  • Cannabis stocks including Curaleaf Holdings (-13.52%), Canopy Growth (-9.56%), and Green Thumb Industries (-10.76%) went up in smoke when the DEA said it would hold its hearing over changing the classification of cannabis on Dec. 2—after the election.
  • Cava got bowled over 6.10% after its CEO and other insiders revealed stock sales.

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Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 8.96 points (0.16%) to 5,625.80; the Dow Jones Industrial Average® ($DJI) rose 9.98 (0.02%) to 41,250.50; the NASDAQ Composite®($COMP) added 29.05 points (0.16%) to 17,754.82.
  • The 10-year Treasury note yield (TNX) increased nearly two basis points to 3.83%.
  • The CBOE Volatility Index® (VIX) slipped to 15.42.

About half of S&P 500 sectors finished in the green today. Financials have been on a roll lately amid rate cut hopes and continued their solid performance Tuesday, while energy did a 180 Tuesday as crude oil lost ground.

Treasury yields remained in their recent trading range, with the gap narrowing further between the 2-year and 10-year Treasury note yields to roughly seven basis points. The inversion, in which two-year yields hold a premium to 10-year yields, reached 100 basis points a year ago as the Fed rapidly raised rates. The 10-year yield got some traction today from a solid Consumer Confidence report.

CITE: https://tinyurl.com/tj8smmes

Apple has announced “it’s glowtime” for a Sept. 9th event during which the company is expected to debut the iPhone 16.

And, Uber was fined 290 million euros ($347 million) by Dutch regulators for transferring driver data from the EU to the US. It’s one of the biggest fines ever issued under the EU’s data privacy law.

Icahn Enterprises L.P.’s stock tumbled 11.5% Monday to close at a roughly 21-year low, after billionaire Carl Icahn’s publicly traded investing arm filed to sell up to $400 million of its depositary units in an “at-the-market offering.” The news comes after Icahn and his company agreed last week to pay $2 million in civil penalties for failing to make required disclosures relating to personal margin loans worth billions of dollars. The stock closed at $14.07, its lowest level since it closed at $14.04 on Nov. 25, 2003.

Papa John’s (NASDAQ:PZZA) rose 4% and then surged amid some takeover speculation concerning Restaurants Brands (QSR), the parent of Burger King and Tim Hortons. 

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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FINANCING: A Medical Practice or Clinic?

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Every medical practice, clinic or healthcare business needs financial organization. At Marcinko Associates, we provide it through our detailed annual reports.

For example, when starting out, the pre-construction phase of a medical practice is crucial, because it sets the course for a successful project. It includes business and financial assessments in which we learn about your goals, vision, financial realities and current clinic, practice and future facility needs.

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DAILY UPDATE: Nvidia Delayed and Covid Tests Mailed as Dow Rises and Technology Stocks Lag

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Nvidia will drop its Q2 numbers on Wednesday. Investors will also look for an update from CEO Jensen Huang about reported delays in production of the company’s highly anticipated new Blackwell chips.

CITE: https://www.r2library.com/Resource

Andersen, the US unit of Andersen Global, is considering an IPO in 2025, the Wall Street Journal reported. Andersen Global, an association of consulting firms, was formed in the wake of the 2002 collapse of Big Five accounting firm Arthur Andersen. The parent company has more than 17,000 employees worldwide and earned around $1.9 billion in revenue last year.

CITE: https://tinyurl.com/2h47urt5

What’s up

  • Kroger gained 1.6% as the antitrust trial began over its plan to merge with rival Albertsons in a $25 billion deal.
  • XPeng ADRs (American Depositary Receipts) spiked 7.90% on news that the Chinese EV maker’s CEO bought more than 2 million of the company’s shares. Those ADRs are still down nearly 50% this year. Here’s what an ADR is, by the way.

What’s down

  • Nvidia (-2.25%), Super Micro Computer (-8.27%), and Broadcom (-4.05%) stunk up the joint today. Investors are biting their nails ahead of Nvidia’s earnings report on Wednesday.
  • Uber dropped 2.30% on a day it was hit with a record $324 million fine by the Dutch data protection regulator for violating EU personal data rules.
  • Intel plopped 2% after CNBC reported on Friday that the chipmaker has hired advisors to help defend the castle against activist investors.

CITE: https://tinyurl.com/tj8smmes

Here’s where the major benchmarks ended:

  • The SPX dropped 17.77 points (–0.32%) to 5,616.84; the Dow Jones Industrial Average® ($DJI) rose 65.44 points (0.16%) to 41,240.52; the NASDAQ Composite®($COMP) fell 152.02 points (–0.85%) to 17.725.77.
  • The 10-year Treasury note yield (TNX) inched up about one basis point to nearly 3.82%.
  • The CBOE Volatility Index® (VIX) edged up to 16.09 but remains below its historic average.

Americans can receive free Covid-19 tests through the mail beginning next month.

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DAILY UPDATE: Nvidia, Medical Practice and Healthcare Costs

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Every medical practice, clinic or healthcare business needs cost and financial organization. We provide it through our detailed annual reports. When starting out, the pre-construction phase of a medical practice is crucial, because it sets the course for a successful project. It includes business and financial assessments, in which we learn about your goals, vision, financial realities and current and future facility needs.

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Employers are Bracing for Healthcare Costs to Spike in 2025. Employers are up against escalating healthcare costs driven by mounting prescription drug expenses, inflation, and worsening chronic conditions, a new survey shows. The Business Group on Health released its annual Employer Health Care Strategy Survey, which examines the trends that large employers are watching and their plans to address the healthcare challenges they may face. The survey projects that healthcare cost trends will jump to 8% in 2025, growing from 6% in 2022. Actual healthcare costs have increased by 50% since 2017, according to the report.

Source: Paige Minemyer, Fierce Healthcare [8/20/24]

CITE: https://tinyurl.com/2h47urt5

  • Markets: Jerome Powell spoke in Jackson Hole on Friday and finally confirmed that interest rate cuts are on the way. The news set stocks up for a big finish to the week.
  • Stock spotlight: Nvidia was among the stocks that jumped, and investors will be keeping an eye on it this week, when the AI chipmaker reports earnings.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: Telehealth and the RealPage

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Telehealth has taken more hits lately than a piñata at a birthday party. For example:

In April, UnitedHealth Group announced it was shutting down its Optum Virtual Care program. Days later, Walmart announced it would shutter both Walmart Health and Walmart Health Virtual Care.

And in July, Teladoc posted a net loss of $838 million in Q2. The drop was largely driven by an impairment charge of ~$800 million for BetterHelp, the virtual mental health platform it acquired in 2015, Fierce Healthcare reported. Executives attributed the decline to increased customer acquisition costs, among other factors.

CITE: https://tinyurl.com/2h47urt5

  • The Justice Department and the attorneys general of eight states sued RealPage, an apartment-pricing tool widely used by corporate landlords, alleging that it lowers competition by allowing property owners to coordinate higher rents.

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DAILY UPDATE: Medicare Part C and CON Laws as Stocks Drift Higher

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Read: Georgia’s bipartisan effort to amend its “certificate of need” system to bring back shuttered rural hospitals. (KFF Health News)

CITE: https://www.r2library.com/Resource

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 63.97 points (1.15%) to 5,634.61, up 1.5% on the week; the Dow Jones Industrial Average® ($DJI) added 462.30 points (1.14%) to 41,175.08, up 1.3% for the week; the NASDAQ Composite®($COMP) advanced 258.43 points (1.47%) to 17,877.79, up 1.4% for the week.
  • The 10-year Treasury note yield (TNX) fell nearly six basis points to just under 3.81%.
  • The CBOE Volatility Index® (VIX) dropped sharply to 15.79, the lowest close since Monday.

CITE: https://tinyurl.com/2h47urt5

As Medicare Advantage (MA) enrollment grows, hospitals are breaking up with MA [Part C] insurance plans. Becker’s Healthcare reported that, so far in 2024, at least 17 systems ended a contract with an MA insurer.

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TRANSACTIONAL STOCK ANALYSIS: What Is It?

Versus Technical Analysis

By Staff Reporters

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In traditional finance transaction data is guarded by exchanges, brokers, banks and regulators. It’s not accessible to everyone and big players pay a fortune for it.

But, in crypto, Transaction Data is public and on-chain – but it’s not usable by everyone. So, manually making sense of raw blockchain data is practically impossible. The data needs to be processed and analyzed to be made useful. That’s what sophisticated blockchain analytics tools are doing.

The combination of on-chain data and transaction analysis is something that hasn’t been before – in crypto or traditional finance. Getting access to transaction data and tools for searching and analyzing it will unlock a goldmine of potential insight.

People who have been on the inside of projects and see how the sausage is made know that the explanations for price movements are often simple and based on key players buying and selling. When the biggest holders are dumping the price is likely to go down. When a major new buyer takes a position prices are likely to go up.

That’s insight traditional Technical Analysis cannot provide, because it’s limited to looking at price movements. Transaction data, instead, is the underlying activity that generates prices in crypto.

CITE: https://www.r2library.com/Resource/Title/0826102549

Technical Analysis: https://medicalexecutivepost.com/2022/06/23/the-technicians/

Related: https://medicalexecutivepost.com/2022/09/25/what-is-sentimental-stock-market-analysis/

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DAILY UPDATE: Stock Markets Drop!

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What’s up

  • Zoom Video Communications zoomed 12.97% higher after beating earnings estimates and raising its revenue forecast for the year.
  • Crocs gained 1.04% after Williams Trading upgraded the company from Hold to Buy and boosted its price target to $163 from $135.
  • Deutsche Bank climbed 3.38% thanks to an announcement that it has reached a settlement with the majority of plaintiffs in its long-running case regarding its Postbank acquisition a decade ago.
  • Paramount Global rose 0.81% after its special committee extended its “go shop” period ahead of its potential merger with Skydance.

What’s down

  • Advance Auto Parts plummeted 17.47% thanks to a massive earnings miss this quarter and management’s prediction that earnings will drop for the rest of the year.
  • Nvidia fell 3.70% after it came to light that investors and insiders like CEO Jensen Huang keep selling their shares of the company.
  • Charles Schwab dropped 0.46% after TD Bank announced it will sell part of its stake in the company to cover recent fines.
  • Williams-Sonoma sank 9.21% due to a poor earnings report as consumers slow their spending with the home goods retailer.
  • Wolfspeed declined 5.38% after the chipmaker revealed that slowing EV sales had hurt its bottom line and that it’s closing one of its manufacturing plants to cut costs.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500 index (SPX) lost 50.21 points (–0.89%) to 5,570.64; the Dow Jones Industrial Average® ($DJI) fell 177.71 points (–0.43%) to 40,712.78; the NASDAQ Composite®($COMP) dropped 299.63 points (–1.67%) to 17,619.35. 
  • The 10-year Treasury note yield rose about eight basis points to 3.86%, roughly the midpoint of its recent range.
  • The CBOE Volatility Index® (VIX) climbed moderately to 17.66, the highest close since August 13.

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DAILY UPDATE: Covid, Medicaid, DNC, Tesla, UAW, Boeing and the Roller-Coaster Stock Markets

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Stat: 2.4%. That’s the percentage of US emergency department visits that involved patients positive with Covid during the week ending August 16th, down from the prior week (but still high). (Becker’s Clinical Leadership)

Quote: “The pandemic was destructive and concerning and clearly demonstrated that Medicaid is so crucially important for our national safety net.”—Jennifer Babcock, SVP for Medicaid policy at the Association for Community Affiliated Plans, on state efforts to expand Medicaid (KFF Health News)

Read: Here are the healthcare-related topics to keep tabs on during the Democratic National Convention. (Stat)

CITE: https://www.r2library.com/Resource

What’s up

  • Target popped 11.25% thanks to an impressive earnings report that included a 36% increase in earnings.
  • Toll Brothers rose 5.59% after beating earnings estimates and raising its projections for home deliveries this year.
  • TJX Companies gained 6.06% and hit a new record high thanks to a strong beat-and-raise earnings report.
  • Ford climbed 1.54% after overhauling its EV plans, including canceling production of a new EV SUV and delaying a new EV plant.
  • Keysight Technologies soared 13.91% after beating earnings expectations and projecting an even stronger second half of the year ahead.
  • BigBear.ai skyrocketed 27.07% thanks to a new contract with the Federal Aviation Administration to provide IT and tech solutions.

What’s down

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 23.73 points (0.42%) to 5,620.85; the Dow Jones Industrial Average® ($DJI) advanced 55.22 points (0.14%) to 40,890.49; the NASDAQ Composite®($COMP) added 102.04 points (0.57%) to 17,918.99.
  • The 10-year Treasury note yield (TNX) fell three basis points to just under 3.78%, near recent lows.
  • The CBOE Volatility Index® (VIX) increased to 16.27.

CITE: https://tinyurl.com/tj8smmes

Tesla cars manufactured in China were slapped with a new tariff by the European Union as part of the group’s crackdown on Chinese green-energy exports.

And, The UAW threatened to strike against Stellantis for allegedly reneging on its promise to reopen an Illinois factory, which the carmaker denies.

Finally, Boeing was forced to pause progress on its oft-delayed 777X aircraft after discovering a structural problem during test flights.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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FAIR MARKET VALUATION DETERMINATION: Medical Practices or Clinics

MEDICAL PRACTICE OR AMBULATORY SURGERY CENTER

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FAIR MARKET VALUATION DETERMINATION

There are a Myriad of Reasons for Obtaining a Medical Practice Valuation and Appraisal Engagement:

  • Outright selling-buying
  • Partnership and Associate buy-in / buy-out
  • Mergers and Acquisitions
  • Organic growth tracking
  • Hospital integrations
  • Private and public reporting
  • Financing and Venture Capital
  • Estate and tax planning

Our Capability

We have the ability to provide extensive analysis of value components in healthcare practices and provide appraisals based on business, economic, and market conditions. This involves detailed examination of financials and clinical data in the context of numerous factors including medical specialty, physician supply and demand, payer mix, regulatory environment, regional dynamics, and risk premium.

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DAILY UPDATE: Medicare Part C & Healthcare Bankruptcies as Stock Market Volatility Rises

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Unlike previous election cycles, members of both political parties are skeptical of Medicare Advantage, prompting former HHS Secretary Alex Azar to say plans need to engage in “myth busting.”


Mass General Brigham is showing a slight year-over-year financial improvement across the first half of 2024.


And … a decline in healthcare bankruptcies appears to be driven by middle-market companies.

CITE: https://www.r2library.com/Resource

What’s up

What’s down

  • Lowe’s sank 1.18% after beating earnings expectations but missing on sales and, more importantly, announcing weaker sales lie ahead.
  • Paramount Global stumbled 1.08% after a new $4.3 billion bid to acquire the company came out of left field.
  • Boeing fell 4.24% on the announcement that the company is grounding its test fleet of the new 777X airplane due to, what else, maintenance issues.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The SPX fell 11.13 points (–0.20%) to 5,597.12; the Dow Jones Industrial Average® ($DJI) dropped 61.56 points (–0.15%) to 40,834.97; the NASDAQ Composite®($COMP) ended 59.83 points lower (–0.33%) to 17,816.94.
  • The 10-year Treasury note yield (TNX) fell five basis points to 3.82%.
  • The CBOE Volatility Index® (VIX) climbed 8% to 15.84

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PREFERRED versus COMMON Stock?

Is there a Difference?

What is the Difference?

This image has an empty alt attribute; its file name is dem-at-wharton1.jpg

By Dr. David Edward Marcinko MBA MEd CMP®

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A common stock is the least senior of securities issued by a company. 

A preferred stock, in contrast, is slightly more senior to common stock, since dividends owed to the preferred stockholders should be paid before distributions are made to common stockholders. 

However, distributions to preferred stockholders are limited to the level outlined in the preferred stock agreement (i.e., the stated dividend payments).  Like a fixed income security, preferred stocks have a specific periodic payment that is either a fixed dollar amount or an amount adjusted based upon short-term market interest rates. 

However, unlike fixed income securities, preferred stocks typically do not have a specific maturity date and preferred stock dividend payments are made from the corporation’s after tax income rather than its pre-tax income.  Likewise, dividends paid to preferred stockholders are considered income distributions to the company’s equity owners rather than creditors, so the issuing corporation does not have the same requirement to make dividend distributions to preferred stockholders. 

So, preferred stock is generally referred to as a “hybrid” security, since it has elements similar to both fixed income securities (i.e., a stated periodic payments) and equity securities (i.e., shareholders are considered owners of the issuing company rather than creditors). 

Convertible preferred stocks (and convertible corporate bonds) are also considered hybrid securities since they have both equity and fixed income characteristics.   A convertible security whether a preferred stock or a corporate bond, generally includes a provision that allow the security to be exchanged for a given number of common stock shares in the issuing corporation. The holder of a convertible security essentially owns both the preferred stock (or the corporate bond) and an option to exchange the preferred stock (or corporate bond) for shares of common stock in the company. 

ASSESSMENT: Thus, at times the convertible security may behave more like the issuing company’s common stock than it does the issuing company’s preferred stock (or corporate bonds), depending upon how close the common stock’s market price is to the designated conversion price of the convertible security.

CITATION: https://www.r2library.com/Resource/Title/0826102549

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DAILY UPDATE: NAR Commissions Down as Stock Markets Rise

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On last Saturday, a class-action settlement with the National Association of Realtors (NAR) went into effect, ripping up the playbook on how real estate agents are compensated. The NAR was accused of artificially inflating commission rates, which have historically ranged from 5% to 6%, a higher fee than the rest of the world. Consumer advocates hope the new rules will lead to lower commissions, shift power away from agents, and add transparency into what’s been an opaque system.

CITE: https://www.r2library.com/Resource

What’s up

  • AMD rose 4.52% on the news that it will acquire server manufacturer ZT Systems for $4.9 billion. While this escalates the AI arms race, competitor Nvidia rose 4.35% regardless.
  • FuboTV soared yet another 17.65% after a judge temporarily blocked the launch of a sports streaming service created by Disney, Warner Bros. Discovery, and Fox last week.
  • McDonald’s climbed 3.25% after Evercore ISI analysts raised their price target for the stock to $320 per share.
  • Zim Integrated Shipping Services rocketed 16.74% higher after the marine shipping company posted impressive earnings and raised its full-year guidance.

What’s down

  • Trump Media & Technology Group fell 3.56% as the Democratic National Convention kicks off in Chicago today, with investors fretful that the stock could be more volatile than usual during the event.
  • HP sank 3.65% after Morgan Stanley analysts downgraded the stock from Equal Weight to Overweight, though they kept their price target the same.
  • Sweetgreen dropped 6.82% thanks to Piper Sandler analysts downgrading the stock from Overweight to Neutral after the company’s big pop last week made shares too pricey.

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Here’s where the major benchmarks ended:

  • The S&P 500 index rose 54.00 points (0.97%) to 5,608.25; the Dow Jones Industrial Average® ($DJI) added 236.77 points (0.58%) to 40,896.53; the NASDAQ Composite®($COMP) points increased 245.05 (1.39%) to 17, 876.77.
  • The 10-year Treasury note yield (TNX) fell about two basis points to just under 3.87%.
  • The CBOE Volatility Index® (VIX) fell to 14.61, near one-month lows.

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Stat: 12%. That’s how much mpox vaccine maker Bavarian Nordic’s stock shot up after the WHO declared a global health emergency. (Fortune)

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REAL ESTATE Investing for Physicians

SOME GUIDELINES FOR COLLEAGUES

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By Dr. David Edward Marcinko MBA CMP®

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According to Rick Kahler MS CFP® ChFC CCIM [www.KahlerFinancial.com] real estate is one of the largest asset classes in the world. The family home is the largest asset many middle-class Americans own. And, real estate makes up a significant portion of the net worth of many wealth accumulators. Directly owning real estate is not an investment for the faint of heart, the armchair investor, or the uneducated. Most wealth accumulators would do well to leave direct ownership of real estate to the pros and invest in real estate investment trusts (REITs) instead [personal communication].

Still, as we have seen, the lure of investing in a tangible asset like real estate is enticing for high risk tolerant physician-investors who need a sense of control and interaction with their investments. If you are among them, here are a few guidelines that may keep you on a profitable path.

1. Don’t attempt to purchase investment real estate without the help of a commercial real estate specialist who is a fiduciary bound to look out for your best interest. Engage a Certified Commercial Investment Member (CCIM) with years of training and experience in analyzing and acquiring investment real estate. To find a CCIM near you, go to http://www.ccim.com.

2. You will sign a disclosure agreement that will tell you who the Realtor represents. Be sure the Realtor you engage represents you and not the seller, both parties, or neither party.

3. Never trust the income and expense data provided by the seller’s Realtor. While a seller represented by a CCIM will have a greater chance of supplying you with accurate data, most will significantly understate expenses and overstate the capitalization rate. Selling Realtors often understate the average annual cost of repairs and maintenance. I estimate this annual expense at 10%.

4. Another often understated expense is management. Many owners manage their own properties, so the selling broker doesn’t include an estimate for management expenses. They should. Real estate doesn’t manage itself, ever. You will either need to hire professional management or do your own management (always a scary proposition). Even if you do it yourself, you have an opportunity cost of your time, so you must include a management fee in the expenses. Most small residential apartments and single-family homes will pay 10% of their rents to a manager.

5. You must verify all the costs presented to you by the seller’s Realtor. Demand copies of at least the last three and preferably five years of tax returns. Research items like utility bills, property taxes, legal fees, insurance costs and repairs, maintenance costs, replacement reserves, tax preparation and all management fees. As a rule of thumb, expenses will average 40% of rental income on average-aged properties where the tenants pay all utilities except water. Newer properties may have expenses as low as 35%, while older properties can be as high as 50%.

6. By subtracting the vacancy rate and stabilized expenses from the rent, you will find the net operating income. This is the income you will put in your pocket—assuming the property is paid for. By dividing the net operating income by the purchase price, you will find the return you will receive on your investment, called the capitalization or “cap” rate. In Rapid City SD, for example, the cap rate tends to be 4% for single-family homes, 5% to 8% for duplexes to eight-plexes, and 8% to 12% for larger residential and commercial properties.

Citation: https://www.r2library.com/Resource/Title/0826102549

ASSESSMENT: Yes, physician-investors and all of us can build wealth with real estate. You just need to educate yourself, work hard, start conservatively, think long-term, and be prepared for lean years. This is not a quick or easy path to riches. Your comments are appreciated. Thank You.

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DAILY UPDATE: Monkey-Pox is Up but Health Insurance is Down

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The World Health Organization declared monkey-pox a global health emergency last Wednesday, about two years after pulling the same alarm on a different variant that infected almost 100,000 people worldwide and 32,000+ in the US, according to the New York Times.

CITE: https://tinyurl.com/2h47urt5

The number of people in the US without health insurance has been steadily rising since the official end of the Covid-19 public health emergency was declared in May 2023. The uninsured rate rose to 8.2% (or roughly 27 million people) in Q1 2024 after falling to a record low of 7.2% in Q2 2023, CDC data shows. That low was largely thanks to the Medicaid continuous enrollment policy that allowed all beneficiaries to keep their coverage until May 2023, according to Daniel Polsky, a health economist and professor at Johns Hopkins Carey Business School.

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Stocks: Global equities just scored their best week of 2024. Keep reading for a full breakdown of the bullish wave sweeping Wall Street and beyond.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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Why [Some] Doctors Won’t Ever Work for Uncle Sam

Understanding the Medical Career Path

[circa 2024]

cropped-dem 

By Dr. David E. Marcinko MBA, MEd, CMP

By Eugene Schmuckler PhD, MBA, CTS

www.MedicalBusinessAdvisors.com

MEDICARE FOR ALL?

Who seeks or writes about, physician careers under a M-4-Uber scenario?

When you think about careers, how many adults are truly aware of their own interests, values, strengths and weaknesses during their teen years? As with much of human behavior, career choices actually go through a series of stages.

Psychologists have for years identified stages of human development.  Kohlberg discussed stages of moral development. In the 1970’s, Daniel Levinson published The Season’s of a Man’s Life, a project he undertook when he began to look inward and tried to understand his behaviors, values and attitudes to work. Discussions with his university colleagues indicated that what he was experiencing was not unique to him.

Traditional Career Routes

For many years the prevailing thought was that the correct way to function in the labor market was to gain employment with a company progressing through the years until such time as you were eligible to receive the “gold watch”, the symbol of retirement. If you entered a professional discipline such as medicine or law, you did that for the rest of your life.

Alternate Career Paths

Today there are still individuals who follow these traditional patterns but there are other career paths that may be taken.

The most traditional career route follows a linear path, one that most of you have rejected. This entails gaining employment in a large, bureaucratic organization with a tall pyramidal structure [command-control]. It involves a series of upward (hopefully) moves in the organization until the career limit is reached. As the individual progresses upward in the organization he or she may work in different functional departments such as marketing, finance, and production. Organizations having these paths seek employees who tend to be highly oriented toward success defined in organizational terms and exhibit “leadership” skills. In general, these people demonstrate a strong commitment to the workplace. A person with this type of orientation (Organizationalist) exhibits the following tendencies:

  1. A strong identification with the organization; seeking organization rewards and advancement that are important measures of success and organizational status.
  2. High morale and job satisfaction.
  3. A low tolerance for ambiguity about work goals and assignments.
  4. Identification with superiors, showing deference toward them, conforming and complying out of a desire to advance; maintains the chain of command and compliance, and views respect for authority as the way to succeed.
  5. Emphasis on organizational goals of efficiency and effectiveness, avoiding controversy and showing concern for threats to organizational success.

As many readers of the Medical Executive-Post are aware, you have followed the expert medical career path, building a career on the basis of personal competence, or the development of a profession (legal or accounting professionals). As you are so painfully aware, you invest heavily, personally and financially in acquiring a particular skill and then you spend the major portion of your life following that skill. Unlike the pyramidal structure of the linear path, career paths are found in organizations that tend to be relatively flat, have departments in which there is a functional emphasis, emphasize quality and reliability, and have reward systems containing a strong recognition component.

md

Medical Professionals are Different

Medical professionals are folks who are job-centered – not organization centered – viewing the demands of the organization as a nuisance that they seek to avoid [THINK: Gregory House MD].

However, that avoidance is impossible since the healthcare professional must have an organization in which to work. This is even more prevalent in today’s era of managed health care and e-Health 2.0, than ever before. At work, professionals experience more role conflict and are more alienated. Medical professionals exhibit these four tendencies:

  1. An experience of occupational socialization that instills high standards of performance in the chosen field; highly ideological about work values.
  2. Sees organizational authority as non-rational when there is pressure to act in ways that are not professionally acceptable.
  3. Tends to feel that their skills are not fully utilized in organizations; self-esteem may be threatened when they do not have the opportunity to do those things for which they have been trained;
  4. Seeks recognition from other professionals outside the organization, and refuses to play the organizational status game except as it reflects their worth relative to others in the organization. Professionals are very concerned with personal achievement and doing well in their chosen field. Organizational rewards serve to reflect the professional’s importance relative to others in the system. This recognition may be extremely fulfilling, especially when he or she is accorded higher status and pay than others. In the absence of organizational rewards the professional may use material objects (large homes, expensive cars) as a way of reflecting status and accomplishment.

Performance not Authority

Medical professionals are of the opinion that successful performance, not compliance with authority, is more reinforcing. With this mindset it is not surprising why many medical practitioners balk at working in the managed health care, state-run or governmental lead healthcare environment. Many professionally oriented people come from the middle class and have become successful through a higher level of education or by other efforts to acquire competence.

The Spiral Career Path

Those on the spiral career path make periodic moves from one occupation to another. Individuals who follow this career path tend to have high personal growth motives and are relatively creative. Usually these changes come after you have developed competence in the occupation you are working in and you think it is time to change what you do. The ideal spiral career path is to move from one occupation to an area related to it. This enables you to use some of the basic knowledge that you developed in your past work and to transfer it to your new occupation. The difference between this path and the linear path discussed above is that in this case the mobility pattern is lateral, not upward.

The Transitory Career Path

People who take the transitory career path cannot seem to, and perhaps do not want to settle down. The pattern is one of consistent inconsistency in their work. These are individuals who may find a great deal of satisfaction working as healthcare consultants. The work style is marked by an ability to do many things reasonably well. They value independence and variety, and they work best in relatively loose and unstructured organizations that tolerate the type of freedom they demand in their work.

Sam (1)

The Indifferents          

We have so far discussed the four types of career paths and two career orientations. A final form of career orientation is that of the indifferents, those who simply work for a paycheck. Will this be the result of Obama care? These are individuals who do their work well, but they are not highly committed to their job or the organization. Some characteristics of indifferents are:

  1. More oriented toward leisure, not the work ethic (is it Friday yet?); separates work from more meaningful aspects of life, and seeks higher-order need satisfaction outside the work organization.
  2. Tends to be alienated from work and not committed to the organization.
  3. Rejects status symbols in organizations.
  4. Withdraws psychologically from work and organizations when possible.

Assessment

Indifferents are not necessarily born that way; some are actually a product of their work experiences. People who once had an organizational orientation and were highly loyal may no longer follow orders without question.

For example, you may have had a medical officer manager who very early in his or her career was extremely committed to you and your medical practice, hospital or healthcare organization. He or she may seek rewards and want to advance. However, in later career life, after having been passed over several times for promotion, the person seeks rewards elsewhere. Thus, it is possible that through office practices, your healthcare organization may turn highly committed organizationalists (or medical professionals) into relative indifferents; HMO patsies or grunts for Uncle Sam.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe. It is fast, free and secure.

Note: Dr. Gene Schmuckler is director of behavioral economics. He is an expert on physician career re-engineering, and a retired Professor of Organizational Behavior who taught Dr. Marcinko [our Publisher-in-Chief] in business school, a decade ago.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko and Dr. Schmuckler are available for seminar or speaking engagements .Contact: MarcinkoAdvisors@msn.com

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Brousseau, K.R., Driver, M.J., Eneroth, K. and Larson, R.: Career Pandemonium: Realigning organizations and individuals. Academy of Management Executive 10 (4), 52-66. 1996

Presthus, R. The Organizational Society. New York, NY: St. Martin’s Press.

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DAILY UPDATE: Telehealth Down but Stock Markets Up for the Week

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In April, UnitedHealth Group announced it was shutting down its Optum Virtual Care program. Days later, Walmart announced it would shutter both Walmart Health and Walmart Health Virtual Care.

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And in July, Teladoc posted a net loss of $838 million in Q2. The drop was largely driven by an impairment charge of ~$800 million for BetterHelp, the virtual mental health platform it acquired in 2015, Fierce Healthcare reported. Executives attributed the decline to increased customer acquisition costs, among other factors.

CITE: https://tinyurl.com/tj8smmes

Finally, Stocks are way out of whack with reality, the WSJ argues. Nevertheless, a slew of encouraging economic data helped propel the S&P 500 to its best week of the year—a welcome change from the whiplash volatility of the week before. Bayer jumped after scoring an appeals court victory in a case over claims its Roundup weed killer causes cancer.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: Medicare Drug Price Negotiations as Stock Markets Hold Steady

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Here’s where the major stock market benchmarks ended:

  • The S&P 500® index (SPX) rose slightly, up 11 points (0.2%) to end the day at 5,554.25, finishing up 3.9% for the week; the Dow Jones Industrial Average® ($DJI) jumped 96.7 points (0.24%) to close the week at 40,659.76, up 2.9% from last Friday; the NASDAQ Composite®($COMP) gained 37.2 points (0.21%) to 17,631.72, up 5.3% for the week.
  • The 10-year Treasury note yield (TNX) fell three basis points to just above 3.89%.
  • The Cboe Volatility Index (VIX) dropped to 14.74, the lowest in three weeks.

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What’s up

  • Bavarian Nordic, which makes an m-pox vaccine, jumped 15.64%, continuing its surge after the World Health Organization on Wednesday declared a public emergency over the disease’s spread in Africa.
  • Bayer popped 8.36% after the firm won a legal dispute against claims that its weedkiller Roundup causes cancer.
  • Rocket Lab rose 12.52% after the aerospace company announced it shipped two spacecraft to Cape Carnival in preparation for a launch to Mars.
  • H&R Block had its best day since 2022 (up 12.24%) after raising its dividend by 17% and announcing a $1.5 billion share buyback.
  • Maravai LifeSciences leaped 21.46% on reports that the drugmaker received a takeover offer from Repligen Corp.

What’s down

  • On the flip side of that last gainer, Repligen Corp. plummeted 9.26% on the takeover news.
  • Astera Labs dropped 5.52% after several investment firms, including Evercore and JPMorgan, lowered their price target for the chipmaker.
  • ReNew Energy Global dropped 5.91% after the company reported it missed earnings and revenue expectations yesterday.

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The Biden administration announced yesterday that Medicare used its newfound power to negotiate with drug makers to win landmark discounts for 10 widely prescribed drugs to treat ailments like heart disease, cancer, and diabetes. The Inflation Reduction Act, signed into law two years ago, allows the federal health insurance program to directly bargain with pharma companies for the first time.

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Four Percent Rule VERSUS Rule of Twenty-Five

PHYSICIAN RETIREMENT PLANNING

By Staff Reporters

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The rule of 25 is just a different way to look at another popular retirement rule, the 4% rule. It flips the equation (100/4% = 25) to emphasize a different part of the retirement planning process — withdrawing vs. saving.

The 4% rule outlines a safe rate to withdraw funds for 30 years without running out of money. On the other hand, the rule of 25 is a savings-focused approach, providing a quick estimate of how much you need to accumulate before exiting the workforce.

LINK: https://www.nerdwallet.com/calculator/retirement-calculator

Let’s consider a scenario to highlight the difference:

  • Rule of 25: After accounting for her Social Security and other sources of retirement income, Dr. Matie PhD plans to spend $40,000 a year in retirement. 40,000 x 25 = $1 million, so Matie would need $1 million invested to cover annual expenses of $40,000.
  • The 4% rule: Dr. Matie, now a retiree, has $1 million in retirement savings and follows the 4% rule. She can safely withdraw $40,000 annually (4% of $1 million).

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While the 4% rule helps plan withdrawals during retirement, the rule of 25 helps establish a savings goal before retirement begins.

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DAILY UPDATE: Cisco Lays Off as Stock Markets Blast Off

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What’s up

What’s down

  • T-Mobile US fell 0.95% after the Committee on Foreign Investment in the US fined the company after sensitive customer data was exposed.
  • Dillard’s slid 10.85% after reporting lower earnings and sales than expected as the retailer struggles to lure customers through its doors.
  • AT&T stumbled 2.78% on the news that a major shareholder sold off a large portion of its stake in the company last quarter.
  • Pilgrim’s Pride dropped 3.28% thanks to a re-rating from Bank of America analysts pushing the company from Buy to Neutral.
  • Grab Holdings sank 7.42% after the app maker reported a terrible quarter.

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Here’s where the major benchmarks ended:

  • The S&P 500 index rose 88.02 points (1.61%) to 5,543.23; the Dow Jones Industrial Average® ($DJI) added 554.67 points (1.39%) to 40,563.06; the NASDAQ Composite advanced 401.89 points (2.34%) to 17,594.50. 
  • The 10-year Treasury note yield (TNX) rebounded about 10 basis points to nearly 3.93%, lifted by strong U.S. data. 
  • The CBOE Volatility Index® (VIX) finished at 15.45, the lowest since July 23 and back under the historic average near 19.

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Cisco will lay off 7% of its workforce to cut costs, although it projects an improvement in sales.

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DAILY UPDATE: Hospital Private Equity and AI with Upbeat DJIA

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Private equity (PE) firms might make it rain cash for investors, but hospitals under their ownership are facing an asset drought, according to a research letter published in JAMA on July 30th. While fans of PE argue it can bring much-needed financial resources to struggling hospitals, the data disagrees. “Private equity acquisitions appear to have depleted, rather than augmented, hospital assets,” the authors, a group of physicians from medical institutions across the US, wrote.

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What’s up

What’s down

  • Peloton Interactive stumbled 4.64% on the news of a deal allowing Google’s Fitbit users to have access to Peloton classes.
  • Brinker International sank 10.51% after the parent company of Chili’s announced lower-than-expected earnings last quarter.
  • Ouster plummeted 27.44% after the lidar manufacturer reported disappointing revenue last quarter and forecast for worse to come next quarter.
  • Starbucks fell 2.09% as investors took some profits after yesterday’s gigantic pop.

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Here’s where the major benchmarks ended:

  • The S&P 500 rose 20.78 points (0.38%) to 5,455.21; the Dow Jones Industrial Average® ($DJI) added 242.75 points (0.61%) to 40,008.39; the NASDAQ Composite®($COMP) squeaked out a slight gain of 4.99points (0.03%) to 17,192.60.
  • The 10-year Treasury note yield (TNX) dropped three basis points to 3.82%, the lowest close in more than a week.
  • The Cboe Volatility Index® (VIX) fell to 16.22, the lowest since July 23.

CITE: https://tinyurl.com/tj8smmes

Stat: 21%. That’s the percentage of US physicians who are still paying off student loan debt. (Becker’s Hospital Review)

Quote: “The federal government is particularly ineffective and slow these days.”—Rep. Brianna Titone, a Colorado Democrat, on why states need to “step up” and make their own laws regulating the use of artificial intelligence in healthcare (Axios)

Read: A US Olympic athlete is taking advantage of free healthcare to catch up on preventive care while in Paris. (the Washington Post)

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: United Health, CVS, Talkspace, Health Catalyst and the Rocketing Stock Markets

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The Fierce Healthcare team recapped second quarter earnings for the country’s biggest payers and health tech companies. See how UnitedHealth, CVS, Talkspace and Health Catalyst fared.


Walgreens could sell its stake in VillageMD and Roche may sell health tech startup Flatiron Health.


And … Texas Children’s Hospital reduced its workforce by 5%, or approximately 1,000 jobs. Keep up with other cuts with Fierce Healthcare’s layoff tracker.

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What’s up

What’s down

  • Trump Media & Technology Group sank 3.62% following the Donald Trump and Elon Musk interview on X.
  • Tencent Music Group plummeted 15.18% thanks to a mixed quarter with lower revenue but a higher subscriber count.
  • ViaSat tanked 22.57% after the company revealed that some of its biggest shareholders plan to sell 11.2 million shares of the satellite company.
  • Baxter International slid 6.53% after it struck a deal with The Carlyle Group to sell its kidney-care unit for $3.8 billion.

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Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX)rose 90.04points (1.68%) to 5,434.43; the Dow Jones Industrial Average® ($DJI) added 408.63 points (1.04%) to 39,765.64; the NASDAQ Composite®($COMP)rallied406.99points (2.43%) to 17,187.61.
  • The 10-year Treasury note yield (TNX) fell about six basis points to 3.85%.
  • The CBOE Volatility Index dropped nearly 13% to 18.04, its lowest close since July 31.

Every S&P sector besides energy finished higher today, with info tech and consumer discretionary in the lead and both gaining more than 2%.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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Why I Hate Non-Publicly Traded REITS

On Product Frustration

Lon JefferiesBy Lon Jefferies MBA CFP® CMP®

As my experience in the financial planning and investment advisory industries has grown over the years, there is one investment that I’ve seen no logical reason to own — non-publicly traded real estate investment trusts.

Josh Brown, one of my favorite analysts and author of TheReformedBroker.com nailed each of my frustrations with these products. Here is a significant excerpt from his post:

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I consider non-traded REITs or nREITS to be part of the group of investments that are just absolute murderholes for clients – they pay the brokers so much that they cannot possibly work out (and they rarely do without all kinds of aggravation and additional costs). Further, I have yet to hear a single credible explanation as to why a broker would recommend a non-traded REIT over a public REIT other than compensation. The only explanation that makes sense to me is that 7% is a lot more than the 1% commission you get doing an agency trade on a NYSE-traded REIT. A reader with experience in the industry sent this to me and I found it hilarious. Below, a fictional, transparent conversation between an indie broker and his “client” that would never occur…

If Brokers Were Transparent:

Rep:

Before we wrap up our quarterly portfolio review I would like to talk to you about a new investment I think you might be interested in.  You have been looking for more income and this is an investment vehicle that pays a 7% dividend.

Client:

Sounds great, give me the details.

Rep:

With your portfolio size and risk tolerance I would recommend a $100,000 investment.  Given that amount let’s first go over the fees. If you invest $100,000 I will be paid a commission of $7,000. My firm is going to get $1,500 – $2,000 in revenue share. My wholesaler, the salesman that works for the investment’s sponsor company, will get $1,000. He is a great guy, buys me dinner and takes me golfing. The sponsor company is going to get around $3,000 to pay for some of the costs they incurred in setting up the investment. So after Day 1 there will be around $87,000 left over to actually invest.  I bet you are getting excited.

Client:

Are you on drugs? Why would I pay 13% in fees on anything?

Rep:

Don’t worry, it won’t feel like you are paying $13,000 in fees. The rules allow my firm to report your investment at $100,000 on your statement. You never really know what its worth but you will think you never lost money. Pretty sweet huh?

Client:

You have to be kidding.

Rep:

No, this is a really good investment. Let me tell you about the income component before you jump to any conclusions. Like I said this investment pays a 7% dividend and the dividend won’t change.

Client:

That sounds high and how do you know it won’t change?

Rep:

You see, the sponsor just picks the 7% dividend number out of thin air. Here’s how it works. You see the vehicle you are going to invest in is new and it’s going to take the firm a while before your net $87,000 is actually invested. Later on, maybe 2-4 years from now they will have the money fully invested and it will generate actual cash flow. So they just pay a quarterly dividend of 7% by giving you your money back. This is great from a tax perspective because return of capital isn’t taxed as income.

Client:

Are we on hidden camera or something?

Rep:

Ha, you are funny. I bet this next benefit will change your mind.

Client:

I hope so or I should start looking for another financial advisor.

Rep:

This is the best feature. You can’t sell your investment until the sponsor has the opportunity to create liquidity. You might be locked up in this investment for 7-10 years.

Client:

This feels like the Twilight Zone. Your firm allows you to sell this crap?

Rep:

Oh yeah, our firm sells a ton of it. In fact independent broker dealer firms like mine sold over $20 billion of these investments in 2013. Think about that. Reps like me made over $140 million dollars and our firms pocketed $20-$30 million.

Client:

This is crazy, what is this investment?

Rep:

Non-traded REITs. $100,000 sound about right?

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Currency

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Josh touched on every part of these investments that I despise — excessive commission paid to the so-called “financial advisor” (salesman), a supposed “dividend” that is really just paying the investor his own money back (essentially providing an interest-free loan), and a complete lack of liquidity and transparency.

When I begin working with a new client who owns one of these products, it is impossible to obtain accurate, current information on the investment (not even a true value is apparent). Even worse, if the client wants to sell the investment he would need to do so at pennies on the dollar. For the most part, once an investor purchases one of these products he just needs to forget about it and hope that one day he can get his money back.

Assessment

The bottom line is that if your advisor ever recommends a non-publicly traded REIT, I’d strongly recommend you walk out the door and start searching for a true financial advisor with a fiduciary responsibility to act in your best interest.

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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DAILY UPDATE: Aetna Ratings Down as Stock Markets Flatten

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Aetna, CVS’s health insurance arm and the third largest payer in the US, is struggling amid higher medical costs and lower Medicare Advantage star ratings. After CVS reported a nearly 40% YoY drop in operating income in its Q2 2024 earnings released on August 7th, President and CEO Karen Lynch announced the company will replace Aetna’s president, Brian Kane, and initiate a $2 billion cost-savings plan.

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What’s up

  • Nvidia jumped 4.08% after it was named a top “rebound” stock by Bank of America.
  • Keycorp leaped 9.24% on the news that the Bank of Nova Scotia will invest $2.8 billion in the company.
  • Robinhood Markets rose 3.46% due to an upgrade from Piper Sandler analysts who say the company’s sudden decline gives it an attractive entry point.
  • Monday.com popped 14.78% thanks to a strong earnings report from the software maker, due in no small part to sealing the largest deal in company history.
  • Barrick Gold soared 9.36% after beating earnings estimates on both the top and bottom lines thanks to the rising price of gold.

What’s down

Here’s where the major stock benchmarks ended:

  • The S&P 500®  index (SPX)added 0.23(0.00%) to 5,344.39; the Dow Jones Industrial Average® ($DJI) fell 140.53 points (–0.36%) to 39,357.01; the NASDAQ Composite rose 35.30points (0.21%) to 16,780.61.
  • The 10-year Treasury note yield (TNX) fell three basis points to just under 3.91%.
  • The CBOE Volatility Index® (VIX) increased 0.34 points (1.67%) to 20.71.

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Stat: 8.2%. That’s the percentage of people in the US without health insurance in the first quarter of 2024. (Healthcare Dive)

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: Consumer Spending with Spotlight on Intel

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US consumers in the spotlight: How much have you been shopping? We’ll find out this week when crucial July retail sales data is released on Thursday, and Walmart and Home Depot report earnings. The resilience of the US consumer is at the heart of recent concerns over a potential downturn since consumer spending drives 70% of the US economy. So far this earnings season, companies have given more mixed signals than a menu offering jumbo shrimp.

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Tech giant Intel will be shedding more than 15% of its workforce—or over 19,000 employees—as part of a plan to cut $10 billion in costs after it failed to meet quarterly expectations.

Intel reported revenue of $12.83 billion on expectations of $12.94 billion in revenue in its second quarter 2024 earnings, reported CNBC. The company reported plunging from a net income of $1.48 billion in Q2 2023 to a net loss of $1.61 billion YOY.

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What is a Stock Market Index IMPLIED OPEN?

FINANCIAL TERMS AND DEFINITIONS FOR PHYSICIANS AND ALL INVESTORS

By Dr. David E. Marcinko MBA MEd CMP®

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The stock markets have been near all time highs, lately. Physician colleagues and clients are so excited that they are even checking the overnight status of favorite stocks and/or the domestic/overseas markets.

Some colleagues are even becoming a bit OCD by checking the implied open of various markets the night before. But, what exactly is the Implied Open? How is it calculated?

DEFINITION: The Implied Open attempts to predict the prices at which various stock indexes will open, at 9:30am New York time. It is frequently shown on various cable television channels prior to the start of the next business day.

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EXAMPLE: Considering the DJIA as an example, the basis of calculating implied open is the price of a “DJX index option futures contract”. This is not the price of the DJIA itself but rather the current ticker price of an option issued by the Chicago Board Options Exchange.

CBOE: The Chicago Board Options Exchange, located at 400 South LaSalle Street in Chicago, is the largest U.S. options exchange with annual trading volume that hovered around 1.27 billion contracts at the end of 2014. CBOE offers options on over 2,200 companies, 22 stock indices, and 140 exchange-traded funds.

CALCULATION: https://www.quora.com/How-do-you-calculate-the-implied-open-from-futures

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NOTE: We would like to remind you that new amendments adopted by the U.S. Securities Exchange Commission (SEC) have gone into effect as of September 28, 2021. These amendments restrict the ability of market makers to publish OTC quotations for those companies that have not made required current financial and company information available to regulators and investors.

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DAILY UPDATE: MDMA, Stellantis & Zelle While Correlation is not Causation

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The FDA declined to approve MDMA as a PTSD treatment, which would have been a big step forward for psychedelics use in mental health care, saying further study is needed. But the agency did approve a nasal spray to treat severe allergic reactions as an alternative to shots like EpiPen.

Stellantis will lay off 2,450 factory workers this year as it phases out an older version of its Ram pickup truck.

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Scams via Zelle, the payment service you turn to when you run out of wedding gift ideas, are the subject of an ongoing inquiry by the Consumer Financial Protection Bureau (CFPB), the Wall Street Journal reported this week. Zelle was founded in 2017 by seven of the biggest US banks to compete with peer-to-peer payment apps like Venmo and Cash App. It outgrew its rivals but became a magnet for scams, which customers typically don’t get reimbursed for.

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Correlate: A website that shows spurious correlations.

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