
<h2 class="wp-block-heading" id="h-topline">Topline</h2>



<p>Equities soared globally Thursday as investors absorbed the Federal Reserve’s jumbo interest rate cut, though stocks’ bond market counterpart appears not to be sold on the Fed cut.<strong></strong></p>



<h2 class="wp-block-heading">Key Facts</h2>



<p>Shortly after market open, the Dow Jones Industrial Average rose 1.3% to a new record of 42,105, the S&amp;P 500 rose 1.6% to its new all-time high of 5,713 and the tech-heavy Nasdaq surged 2.3%, though it remains 4% below its July peak.</p>



<p>The rally comes after a choppy Wednesday trading session as Wall Street reacted to the Fed’s cut in real-time, as the Dow and S&amp;P spiked to all-time highs shortly after the Fed’s afternoon decision,&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/18/stocks-briefly-touch-record-highs-after-fed-opts-for-bigger-interest-rate-cut/">before</a>&nbsp;all three major U.S. indexes closed in the red, even though the central bank opted for the more stock-friendly route of lowering rates by 50, not 25, basis points.</p>



<p>Stocks abroad jumped as well, as Hong Kong’s Hang Seng and Japan’s Nikkei 225 indexes rallied about 2% apiece and Europe’s Stoxx 600 and the U.K’s FTSE 100 indexes both gained about 1%.</p>



<p>A host of big-name stocks soared Thursday morning, with the likes of Apple, Goldman Sachs, Nvidia and Tesla all up more than 2%, while information technology was the S&amp;P’s best-performing sector, rising about 2.5%.</p>



<h2 class="wp-block-heading">Contra</h2>



<p>The bond market has struggled following the rate cut, as the yield for the benchmark 10-year U.S. Treasury note have gained some 10 basis points from its 3.65% level just after the Fed announcement to Thursday’s 3.75%, the highest yield in two weeks. Higher yields indicate lower bond values, and though lower interest rates typically help bonds, the move&nbsp;<a href="https://www.cnbc.com/2024/09/18/us-treasurys-as-investors-look-to-fed-rate-decision.html" rel="noreferrer noopener" target="_blank">reflects</a>&nbsp;fixed income traders’ concerns the Fed&nbsp;<a href="https://www.cnbc.com/2024/09/18/us-treasurys-as-investors-look-to-fed-rate-decision.html" rel="noreferrer noopener" target="_blank">may have</a>&nbsp;acted too aggressively with inflation still above the historic norm, resulting in higher interest rates over the long run. The 10-year yield is still about 15 basis points below where it was at the end of August.</p>



<h2 class="wp-block-heading">Key Background</h2>



<p>The Fed’s decision to lower the federal funds rate from 5.25% to 5.5% to 4.75% to 5% represented its first cut since March 2020. A cut looked all but guaranteed, but the central bank opted for the friendlier route of a 0.5 percentage-point move&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/06/stocks-have-worst-week-of-year-as-recession-fears-reemerge/">to address</a>&nbsp;slowdown in the labor market and growing angst about an economic downturn. In a Thursday note to clients, Sevens Report founder Tom Essaye described the stock market’s jolt and drop as a“a sell the news” knee jerk reaction. Lower interest rates are almost always seen as a boon for stocks as lower debt financing boosts corporate profit margins,&nbsp;<a href="https://www.wsj.com/livecoverage/fed-interest-rate-cut-inflation-live-09-18-2024/card/has-the-fed-ever-cut-by-50-basis-points-in-peacetime--k0XHxG5caL952yAjvUrm" rel="noreferrer noopener" target="_blank">though</a>&nbsp;if such a move from the Fed fails to stimulate the economy and predates an extended economic slump, as it did in 2007, it would likely bring pain for investors.</p>



<h2 class="wp-block-heading">Further Reading</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2024/09/18/fed-cuts-interest-rates-for-first-time-in-4-years-heres-what-it-means-for-you/" target="_blank" rel="noreferrer noopener">Forbes<strong>Fed Cuts Interest Rates For First Time In 4 Years: Here’s What It Means For You</strong><small>By&nbsp;<strong>Derek Saul</strong></small></a></p>



<p><a href="https://www.forbes.com/sites/dereksaul/2024/09/18/stocks-briefly-touch-record-highs-after-fed-opts-for-bigger-interest-rate-cut/" target="_blank" rel="noreferrer noopener">Forbes<strong>Stocks Briefly Hit Record Highs After Fed Opts For Big Interest Rate Cut—But Close Negative</strong><small>By&nbsp;<strong>Derek Saul</strong></small></a></p>


Markets Open After Falling More 800 Points On Tuesday

S&P 500, Dow Rise More Than 1% To New Highs In Delayed Rate Cut Rally


<h2 class="wp-block-heading" id="h-topline">Topline</h2>



<p>The Federal Reserve took the&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/16/fed-once-again-expected-to-make-jumbo-interest-rate-cuts-at-this-weeks-weighty-meeting/">widely expected</a>&nbsp;step Wednesday of announcing its first interest rate cut in years, a move that will have a major impact on the finances of Americans across the board, making borrowing cheaper, though the golden days of high-yield savings instruments may be over.<strong></strong></p>



<h2 class="wp-block-heading" id="h-key-facts">Key Facts</h2>



<p>The Fed’s policy-setting committee cut the federal funds rate by 50 basis points, the more aggressive move as consensus was split between a 25 or 50 basis-point cut.</p>



<p>It’s the first cut to the federal funds rate since March 2020, bringing rates down to 4.75% to 5% from the 5.25% to 5.5% range they’ve sat since last July, the highest rates had been since 2001.</p>



<p>The Fed pivot follows the continued moderation of inflation, which caused rates to spike in the first place.</p>



<h2 class="wp-block-heading" id="h-what-do-fed-rate-cuts-do">What Do Fed Rate Cuts Do?</h2>



<p>The Fed only officially controls the federal funds rate, which determines the interest charged in overnight cash reserve transactions between banks. But the central bank’s rate decisions affect borrowing costs across the board, as lenders typically set rates based upon the Fed-determined range, and rate cuts will more broadly ripple throughout the economy as well. Here are some of the most tangible ways rate cuts will impact everyday Amerians:</p>



<h2 class="wp-block-heading" id="h-housing">Housing</h2>



<p>Mortgages pose perhaps the most obvious jolt for consumers from rate cuts, as mortgage rates are tightly linked to yields for government bonds, which in turn are a reflection of the Fed’s monetary policy. Mortgage rates already&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/12/mortgage-rates-fall-to-62-lowest-borrowing-costs-since-early-2023/">hit</a>&nbsp;a 19-month low last week of 6.2% on 30-year fixed loans, as brokers braced for the impending rate cuts, and it’s likely the downward descent will continue as the Fed prepares to further cut rates.</p>



<h2 class="wp-block-heading" id="h-car-loans">Car Loans</h2>



<p>Consumer loans will get cheaper with lower Fed rates, including auto loans, which&nbsp;<a href="https://fred.stlouisfed.org/series/TERMCBAUTO48NS" rel="noreferrer noopener" target="_blank">sit now</a>&nbsp;at their most expensive rate since 2001, up from 2021’s sub-5% rate for new car loans to about 8.7%. The cost of other debt like variable-rate private&nbsp;<a href="https://www.bankrate.com/loans/student-loans/how-fed-impacts-student-loans/" rel="noreferrer noopener" target="_blank">student loans</a>&nbsp;and&nbsp;<a href="https://www.axios.com/2024/09/12/fed-interest-rate-cut-credit-card" rel="noreferrer noopener" target="_blank">credit card</a>&nbsp;interest should also come down.</p>



<h2 class="wp-block-heading" id="h-job-market">Job Market</h2>



<p>Companies will also reap the benefits of more accessible credit. Lower rates are typically associated with friendlier hiring as employers’ bottom lines get a boost from cheaper borrowing costs.</p>



<h2 class="wp-block-heading" id="h-savings">Savings</h2>



<p>Perhaps the most materially negative change from rate cuts for Americans’ finances is that the high-yield savings accounts, certificate of deposit accounts and money-market funds, which offered enticing returns for savers over the last two years,&nbsp;<a href="https://www.barrons.com/articles/fed-meeting-september-rate-cut-savings-95db9142" rel="noreferrer noopener" target="_blank">will lose</a>&nbsp;some of their luster. Those are tightly linked to the federal funds rate,&nbsp;<a href="https://www.wsj.com/personal-finance/where-to-put-your-money-when-the-fed-cuts-rates-743e8c66" rel="noreferrer noopener" target="_blank">meaning</a>&nbsp;yields for those accounts will quickly fall as the Fed cuts.</p>



<h2 class="wp-block-heading" id="h-how-rate-cuts-impact-stocks">How Rate Cuts Impact Stocks</h2>



<p>Rate cuts are typically considered a boon for stocks, as money gets pulled away from lower-yielding government bonds and money market funds, leaving investors searching for more enticing returns. The U.S. benchmark S&amp;P 500 stock index has gained 86% of the time in the 12 months after the first rate cut in a cycle dating back to 1929,&nbsp;<a href="https://www.schwab.com/learn/story/what-happens-when-fed-lowers-interest-rates" rel="noreferrer noopener" target="_blank">according</a>&nbsp;to Charles Schwab.</p>



<h2 class="wp-block-heading" id="h-contra">Contra</h2>



<p>Though rates are about to come down, it’s not likely the U.S. will return to the low-rate environment that became the norm. The Fed&nbsp;<a href="https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240612.pdf" rel="noreferrer noopener" target="_blank">forecasts</a>&nbsp;a long-term federal funds rate of 2.8%, higher than rates ever were from March 2008 to Sept. 2022, a&nbsp;<a href="https://www.forbes.com/advisor/investing/fed-funds-rate-history/">far ways</a>&nbsp;from the near-zero rates set from Dec. 2008 to Dec. 2015 and March 2020 to March 2022.</p>



<p>.</p>


Finance Calculator

Fed Cuts Interest Rates For First Time In 4 Years: Here’s What It Means For You


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Google parent Alphabet came in above Wall Street’s lofty expectations in its second-quarter earnings report released Tuesday afternoon, as the internet behemoth continues to rake in tens of billions of advertising dollars.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Alphabet’s $84.7 billion of second-quarter revenue was slightly above average analyst estimates of $84.2 billion, according to FactSet, a 14% year-over-year increase.</p>



<p>The company tallied earnings per share of $1.89, also topping forecasts of $1.84, while its $23.6 billion net income was just shy of Q1’s prior record of $23.7 billion.</p>



<p>Shares of the Silicon Valley kingpin rose slightly immediately after the earnings announcement.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Alphabet’s report is part of a flurry of second-quarter earnings, with 25% of S&amp;P 500 companies scheduled to report fiscal results this week, according to Bank of America. A digital age conglomerate whose products include leading search engine Google, paid cable alternative YouTube TV, Microsoft Office 365 competitor Google Workspace and generative artificial intelligence chatbot ChatGPT’s rival Gemini, Alphabet is an advertising business at its core. About three-fourths of its Q2 revenues were from ads, including $49 billion from its search business and $9 billion on YouTube ads. Like it has been for many other big tech stocks during the AI boom, it’s been a very nice stretch for Alphabet stock, returning about 50% over the last year and over 100% from its late 2022 low. Alphabet is the fourth-most-valuable company in the world by market value, worth nearly $2.3 trillion as of Tuesday’s stock market closure, trailing only fellow West Coast tech companies Apple, Microsoft and AI golden child Nvidia in market capitalization. Google paid its first ever quarterly cash dividend of $0.20 per share last month.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>31%. That’s how much higher Alphabet’s second-quarter adjusted earnings per share was than the same period last year. The company is expected to contribute to the fourth-greatest share of profit growth to the S&amp;P,&nbsp;<a href="https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_071924.pdf" rel="noreferrer noopener" target="_blank">according</a>&nbsp;to FactSet, trailing only Nvidia, Google Cloud competitor Amazon and advertising foe Meta, the parent company of Facebook and Instagram.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Alphabet’s potential <a href="https://www.cbinsights.com/research/google-biggest-acquisitions-infographic/" target="_blank" rel="noreferrer noopener">largest-ever</a> acquisition, a $23 billion purchase of Israeli cybersecurity firm Wiz, <a href="https://www.forbes.com/sites/alexkonrad/2024/07/22/google-is-not-buying-wiz-for-23-billion-after-all/">fell through</a> late Monday after the sides were <a href="https://www.wsj.com/business/deals/google-near-23-billion-deal-for-cybersecurity-startup-wiz-622edf1a?mod=article_inline" target="_blank" rel="noreferrer noopener">reportedly</a> in advanced talks for a deal last week.<a href="https://www.forbes.com/sites/dereksaul/"></a></p>


FRANCE-ECONOMY-TECHNOLOGY-VIVATECH

Google Earnings Top Estimates With $24 Billion Quarterly Profit


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Shares of Spotify rose by about 5% on Monday, after the company announced it will once again raise the prices for its subscription plans in the U.S., following an increase in subscribers.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Spotify shares rose to over $310 as of 10 a.m. Monday, following an earlier surge in premarket trading.</p>



<p>The music streaming firm&nbsp;<a href="https://newsroom.spotify.com/2024-06-03/adjusting-spotify-premium-prices-in-the-us" rel="noreferrer noopener" target="_blank">said</a>&nbsp;it would raise the monthly prices of its ad-free, premium subscription tiers in the U.S. starting in July: the individual plan will cost $11.99 per month, up from $10.99, the Duo plan increased from $14.99 to $16.99 and the family plan increased by $3 to $19.99 per month.</p>



<p>Spotify will notify customers with premium subscriptions with an email next month, saying its price hikes will allow the company to “invest in and innovate on our product offerings and features and bring users the best experience.”</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>Spotify is expected to roll out a $11 monthly subscription tier that will offer music and podcasts without audiobooks, requiring users on the plan to pay for audiobooks, Bloomberg&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-04-03/spotify-is-changing-how-it-charges-customers-with-new-plans-and-prices?utm_medium=social&amp;utm_source=twitter&amp;utm_content=business&amp;cmpid=socialflow-twitter-business&amp;utm_campaign=socialflow-organic" rel="noreferrer noopener" target="_blank">reported</a>. Spotify will announce a new “supremium” plan that includes high-fidelity audio at a higher price, though the company has not released details about the plan since being in the works since 2021, sources told Bloomberg.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>239 million. That’s how many subscribers Spotify&nbsp;<a href="https://s29.q4cdn.com/175625835/files/doc_financials/2024/q1/Q1-2024-Shareholder-Deck-FINAL.pdf" rel="noreferrer noopener" target="_blank">reported</a>&nbsp;in its first quarter this year, an increase of 14% year-over-year.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Spotify previously announced price hikes for its monthly subscription tiers last year, when it raised its individual subscription price to $10.99. The company now charges more for its premium, ad-free subscriptions than rivals Amazon and Apple, which charge $9.99 and $10.99 for their individual plans, respectively. Additional price hikes followed Spotify&#8217;s announcement that it would offer subscribers 15 hours of audiobooks per month to compete against Amazon’s Audible.</p>



<p>.</p>


Markets Open On Wednesday As Federal Reserve Is Set To Make Latest Rate Increase Announcement

Spotify Shares Jump 5% Ahead Of Subscription Price Hikes


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>The Dow Jones Industrial Average made history Thursday, setting the latest impressive milestone for 2024’s red-hot stock market.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The Dow crossed 40,000 for the first time in its 128-year history Thursday at about 10:30 a.m. ET, gaining as much as 140 points (0.4%) to a new all-time high of 40,046.21.</p>



<p>The Dow, which tracks 30 of the most valuable U.S. public companies across a gamut of industries, is up 6% this year and 23% from its October bottom, reflecting the positive shift in investor sentiment over the period.</p>



<p>Boosting the Dow on Thursday was retailer Walmart, whose shares rallied 7% to an all-time high after reporting first-quarter earnings.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>It took 103 years for the index to top 10,000, set during the dot-com boom in March 1999, another 18 years to cross 20,000, accomplished in Jan. 2017, about 3.5 years to surpass 30,000 in Nov. 2020 and another 3.5 years to eclipse 40,000.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The Dow differs from the U.S.’ two other leading stock indexes – the S&amp;P 500 and tech-heavy Nasdaq Composite – in its narrow basket of constituent companies and its weighting based on share prices, rather than market capitalization. Both the S&amp;P and the Nasdaq also sit at record highs. The 3.5-year period between the Dow’s first times above 30,000 and 40,000 was a rollercoaster. Stocks crashed in 2022 as high inflation caused the market to brace for higher interest rates, which typically bring down stock prices as investors opt for higher returns on bonds and react to worsened corporate earnings power due to higher borrowing costs. But even as interest rates climbed to a two-decade high, stocks stormed ahead, helped by expanding price-to-earnings valuations thanks to artificial intelligence optimism, companies’ tightening of their belts and expectations of interest rate cuts beginning this year.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>The Dow’s 40,000 milestone is a “big psychological boost” for investors, Chris Zaccarelli, Independent Advisor Alliance’s chief investment officer, wrote in emailed comments.</p>



<p>.</p>


Dow Crosses 40,000 For First Time In History


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Chevron will acquire Hess Corporation as part of an all-stock transaction valued at $53 billion, the energy giant announced Monday, the second-largest deal by a major oil firm this month since a nearly <a href="https://www.forbes.com/sites/tylerroush/2023/10/11/exxon-mobil-buying-pioneer-natural-resources-for-nearly-60-billion-in-biggest-deal-in-decades/?sh=57b5a955f1ce">$60 billion acquisition</a> by Exxon Mobil nearly 2 weeks ago.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>The deal values Hess at $171 per share and will provide Hess shareholders with just over 1.02 shares of Chevron for each Hess share at the deal’s closing, according to a&nbsp;<a href="https://www.chevron.com/newsroom/2023/q4/chevron-announces-agreement-to-acquire-hess" target="_blank" rel="noreferrer noopener">joint statement.</a></p>



<p>Chevron will acquire 30% ownership of more than 11 billion barrels of oil equivalent in Guyana, which Hess CEO John Hess called the “world’s largest oil discovery” in the last decade, in addition to 465,000 acres of assets in the Bakken Formation in North Dakota.</p>



<p>With the new assets, Chevron said it expects to increase asset sales and generate $10 billion to $15 billion from the acquisition in before-tax proceeds through 2028.</p>



<p>The deal also includes unspecified “complementary” assets in the Gulf of Mexico and a “steady free cash flow” from natural gas business in Southeast Asia.</p>



<p>Shares for&nbsp;<a href="https://finance.yahoo.com/quote/CVX" target="_blank" rel="noreferrer noopener">Chevron</a>&nbsp;fell over 2% in early market trading on Monday morning, while shares for&nbsp;<a href="https://finance.yahoo.com/quote/HES" target="_blank" rel="noreferrer noopener">Hess</a>&nbsp;fell slightly (0.28%).</p>



<p>Both companies said the deal is expected to close in the first half of 2024, pending approval by regulators and Hess shareholders.</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



<p>Peter McNally, an analyst for Third Bridge, said the “real prize” in the deal is Guyana-based assets, where “the country has vaulted into one of the most important growth areas for non-OPEC oil production.&#8221;</p>



<h2 class="wp-block-heading">BIG NUMBER</h2>



<p>Over 1 million. That’s how many barrels of oil equivalent are expected to be produced per day in Guyana by 2026, according to McNally.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>The Chevron deal follows an announcement earlier this month by&nbsp;<a href="https://www.forbes.com/sites/tylerroush/2023/10/11/exxon-mobil-buying-pioneer-natural-resources-for-nearly-60-billion-in-biggest-deal-in-decades/?utm_source=twitter&amp;utm_medium=social&amp;utm_campaign=forbes&amp;utm_term=se-breaking&amp;sh=6348d9615f1c">Exxon</a>, which said it would acquire Pioneer Natural Resources in a deal valued at $59.5 billion. Both deals come amid U.S. oil and gas production&nbsp;<a href="https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&amp;s=MCRFPUS2&amp;f=M" target="_blank" rel="noreferrer noopener">reaching</a>&nbsp;near all-time highs, though oil companies had challenges acquiring new locations for drilling in recent years. Oil production in Guyana has increased after a net-zero production in 2019 to about 400,000 barrels per day in 2023,&nbsp;<a href="https://www.wsj.com/business/energy-oil/chevron-to-buy-hess-for-53-billion-f1373362" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to the&nbsp;<em>Wall Street Journal</em>. Guyana is expected to become one of the world’s fastest-growing oil developments over the next decade, the&nbsp;<em>Journal&nbsp;</em>reported, as larger oil companies—including Exxon and Cnooc—expand into the country.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/tylerroush/2023/10/11/exxon-mobil-buying-pioneer-natural-resources-for-nearly-60-billion-in-biggest-deal-in-decades/?utm_source=twitter&amp;utm_medium=social&amp;utm_campaign=forbes&amp;utm_term=se-breaking&amp;sh=6348d9615f1c">Exxon Mobil Buying Pioneer Natural Resources For Nearly $60 Billion—In Biggest Deal In Decades</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://apnews.com/article/chevron-hess-exxon-oil-merger-acquisition-37ff382d6fa713b7a1e887c7be5f1e93" target="_blank" rel="noreferrer noopener">Chevron Buys Hess For $53 Billion, 2nd Buyout Among Major Producers This Month As Oil Prices Surge</a>&nbsp;(<em>Associated Press</em>)</p>



<p><a href="https://www.reuters.com/markets/deals/chevron-buy-hess-corp-53-bln-stock-2023-10-23/" target="_blank" rel="noreferrer noopener">Chevron To Buy Hess Corp For $53 Billion In All-Stock Deal</a>&nbsp;(<em>Reuters</em>)</p>


Chevron Posts Near Record Profits, Exceeding Market Expectations

Chevron Buying Hess For $53 Billion In Latest Major Oil Deal


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Shares for Netflix rose by over 15% on Thursday, the largest single-day gain for the firm in nearly three years, after the streaming service reported growth that exceeded analyst expectations, and price increases.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Netflix shares rose by 15.92% to $401.30 as of Thursday morning, following a more than&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/10/18/netflix-earnings-subscribers-swell-to-record-247-million-as-stock-soars/?sh=5f4a761f64df">10% jump</a>&nbsp;to over $390 after the company released its third-quarter earnings report on Wednesday.</p>



<p>This is the largest single-day gain for Netflix since January 20, 2021, when shares rose by 16.86% to $586.34 after the company&nbsp;<a href="https://s22.q4cdn.com/959853165/files/doc_financials/2020/q4/FINAL-Q420-Shareholder-Letter.pdf" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;it had eclipsed the 200 million subscriber mark and announced it was considered stock buybacks.</p>



<p>Netflix added $8.54 billion in revenue and nine million net paid subscribers through a three-month period ending September 30, matching and exceeding estimates of $8.54 billion and 6.08 million, respectively.</p>



<p>A letter to shareholders on Wednesday also indicated Netflix was raising the price of its basic and premium plans to $11.99 and $22.99, up $3 and $2, respectively, as part of an effort to be competitive with other streaming services, including Amazon Prime Video, Disney+ and Paramount+.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>247.2 million. That’s how many global paid subscribers Netflix has, according to its latest earnings report.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>Prior to the nearly 17% single-day gain for Netflix in 2021, the previous high for the streaming firm was a gain of 16.8% on October 18, 2016. The increase followed an announcement from Wells Fargo, which upgraded its price target for Netflix shares to $700 per share, up from $510, adding to similar announcements from other analysts, according to&nbsp;<a href="https://www.cnbc.com/2021/01/20/netflix-stock-soars-13percent-on-subscriber-growth-and-possible-buybacks.html" target="_blank" rel="noreferrer noopener">CNBC</a>.</p>



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<p>By signing up, you accept and agree to our&nbsp;<a href="https://www.forbes.com/terms-and-conditions" target="_blank" rel="noreferrer noopener">Terms of Service</a>&nbsp;(including the class action waiver and arbitration provisions), and you acknowledge our&nbsp;<a href="https://www.forbes.com/privacy" target="_blank" rel="noreferrer noopener">Privacy Statement</a>.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Netflix reported earnings up to $3.73 a share on Wednesday, as chief executive Greg Peters said the firm was “incredibly pleased” with its recent growth, according to&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-10-18/netflix-will-raise-prices-after-best-subscriber-growth-in-years?utm_content=business&amp;utm_campaign=socialflow-organic&amp;cmpid=socialflow-twitter-business&amp;utm_source=twitter&amp;utm_medium=social" target="_blank" rel="noreferrer noopener">Bloomberg</a>. Shares for the company have jumped by nearly 36% this year, and by just over 47% since October 2022. The stock crashed about 75% in the first half of 2022, after Netflix&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2022/04/19/netflix-shares-plunge-over-20-after-company-says-it-lost-subscribers-for-the-first-time-in-10-years/?sh=77df0caa1650">reported</a>&nbsp;its first loss of subscribers in a decade. Netflix has continued to report subscriber growth, after announcing a crackdown on password sharing and a cheaper subscription tier that includes ads. The company also added a paid sharing option—requiring users to pay extra for accounts they share with others—that was called a “primary revenue accelerator in the year” by chief financial officer Spencer Neumann.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/antoniopequenoiv/2023/10/18/netflix-hikes-prices-for-some-plans-as-subscriber-numbers-surge/?sh=73f2ded756e0">Netflix Hikes Prices For Some Plans As Subscriber Numbers Surge</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/10/18/netflix-earnings-subscribers-swell-to-record-247-million-as-stock-soars/?sh=5f4a761f64df">Netflix Earnings: Subscribers Swell To Record 247 Million As Stock Soars</a> (<em>Forbes</em>)</p>


In this photo illustration the Netflix logo seen displayed

Netflix Shares Surge 15% After Subscriber Growth—Largest Single-Day Gain Since 2021


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Global oil demand reached record levels in June and is poised to peak again in August, the International Energy Agency&nbsp;<a href="https://www.iea.org/reports/oil-market-report-august-2023" target="_blank" rel="noreferrer noopener">said</a>&nbsp;on Friday, warning that price hikes could be on the horizon as slowing outputs from major suppliers like Saudi Arabia tighten supply.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>World oil demand hit a record 103 million barrels a day in June, the IEA said.</p>



<p>The agency said demand could rise further in August and demand for 2023 as a whole is expected to reach 102.2 million barrels a day.</p>



<p>The figure, an increase of around 2.2 million barrels a day from the year before, would mark the highest ever annual level, the agency said.</p>



<p>China is responsible for the lion’s share of this growth, accounting for more than 70% of the uptick, the IEA said, adding that demand there was “stronger than expected” and reached new highs “despite persistent concerns over the health of the economy.”</p>



<p>Strong summer air travel and the increased use of oil in power generation also contributed to increased demand, the IEA said.</p>



<p>The IEA forecast continued, albeit slower, growth for oil demand in 2024, pointing to “lacklustre economic conditions,” new electric vehicles and the “post-pandemic rebound running out of steam.”</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>Oil prices could be poised to rise even higher in coming months as major producers, particularly Saudi Arabia, move to constrict supplies. Previous production cuts from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have helped&nbsp;<a href="https://www.reuters.com/markets/commodities/oil-benchmark-brents-price-structure-reflects-tighter-market-2023-08-10/" target="_blank" rel="noreferrer noopener">drive</a>&nbsp;oil prices up and the IEA warns the bloc’s targets, if maintained, pose “a risk of driving prices still higher.”</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>The IEA said Russia’s oil exports breached the price cap put in place by the Group of Seven (G7) nations. Prices reached an average of $64.41 a barrel last month, the IEA said, above the $60 a barrel cap the group set. The cap was designed to limit Moscow’s ability to fund its war in Ukraine while simultaneously averting chaos in global energy markets by keeping its oil on the markets and it limits how companies can move Russian oil by cutting access to things like insurance and other key services should they pay more than this threshold. The rule has changed the map of global oil supply chains and exports from Russia, a major producer, away from Europe and towards Asia. The IEA said crude exports to India and China accounted for 80% of Russia’s shipments.</p>



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<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>While oil demand dropped during the Covid-19 pandemic and as the world shifted to greener forms of energy, supplies have also tightened from output cuts and disruption from Russia’s invasion of Ukraine. The recent squeeze, spearheaded by Saudi Arabia’s voluntary production cuts, have helped push prices up and Brent crude, a key international benchmark, was trading at $88 dollars a barrel on Thursday, a six month&nbsp;<a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">high</a>.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/roberthart/2023/07/19/electricity-demand-slows-in-2023-as-economic-downturn-and-energy-crisis-weighs-on-growth-iea-says/">Electricity Demand Slows In 2023 As Economic Downturn And Energy Crisis Weighs On Growth, IEA Says</a>&nbsp;(Forbes)</p>



<p><a href="https://www.bloomberg.com/news/articles/2023-08-11/global-oil-demand-hits-record-and-prices-may-climb-iea-says" target="_blank" rel="noreferrer noopener">Global Oil Demand Hits Record and Prices May Climb, IEA Says</a>&nbsp;(Bloomberg)</p>



<p><a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">IEA sees slower 2024 oil demand growth, tightening market this year</a>&nbsp;(Reuters)</p>



<p><a href="https://www.bbc.com/future/article/20230726-an-experts-guide-to-peak-oil-and-what-it-really-means" target="_blank" rel="noreferrer noopener">Is the decline of oil in sight?</a> (BBC)<a href="https://www.forbes.com/sites/roberthart/"></a></p>


Oil pump with candle stick graph chart in the background. World Oil Industry

Oil Prices Poised To Soar As Global Demand Hits Record High, IEA Says


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Several large technology stocks soared Friday to their highest level this year as blockbuster earnings and uplifting economic data kept the blistering stock market’s momentum going.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Shares of Alphabet (up 3%), Meta (up 4%) and Intel (up 6%) each set 2023 highs as investors digested the Silicon Valley firms’ earnings reports earlier this week with a smile.</p>



<p>Airbnb, DoorDash, DraftKings, Intuit and Roku also rallied to their highest share price of the year Friday, gaining 3% or more.</p>



<p>In addition to earnings, Friday’s release of the personal consumption expenditures inflation metric helped boost stocks, as it revealed price increases&nbsp;<a href="https://www.cnbc.com/2023/07/28/pce-inflation-june-2023-.html" target="_blank" rel="noreferrer noopener">moderated</a>&nbsp;to their lowest level in about two years last month.</p>



<p>The tech-heavy Nasdaq notched a 2% gain by late afternoon, while the Dow Jones Industrial Average and S&amp;P 500 rose roughly 1% apiece.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/07/27/us-economic-grew-better-than-expected-24-during-second-quarter-again-defying-recession-fears/">Strong</a>&nbsp;economic output growth, a “better-than-expected” earnings season and moderating inflation “could be the catalyst to send the market to new highs,” Bolvin Wealth Management president Gina Bolvin wrote in emailed comments Friday.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The stock market’s strong week came even as the Federal Reserve&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/07/26/fed-hikes-interest-rates-by-25-basis-points-to-highest-level-since-2001/?sh=335986b93892">bumped</a>&nbsp;interest rates to a 22-year high Wednesday. Equity prices historically fall in periods of higher rates as it makes corporate borrowing more expensive and thus cuts into profits, but investors have supported the notion that artificial intelligence-driven growth and a renewed commitment to cost-cutting will prop up long-term growth.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>The Dow’s 13-day winning streak came to an end Thursday, capping the longest positive stretch in 36 years. The Dow is up 7% over the last two months, its best two-month since last October and November.</p>



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<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>Energy giants Chevron and Exxon did not join in on the fun Friday, as their stocks slid roughly 1% apiece after both companies&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/07/28/exxon-and-chevron-profits-plunge-to-pre-ukraine-war-levels-as-oil-price-decline-continues/?sh=483fb0fd516a">reported</a>&nbsp;a roughly 50% year-over-year decline in profits. Energy is one of three S&amp;P sectors down year to date and is the&nbsp;<a href="https://digital.fidelity.com/prgw/digital/research/sector" target="_blank" rel="noreferrer noopener">worst returner</a>&nbsp;of the index’s 13 sectors over the last five years.</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>Apple, the world’s most valuable company, reports quarterly numbers Thursday. Other notable earnings next week include Pfizer, one of the&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/07/03/worst-stocks-of-2023s-first-half-battered-banks-and-vaccine-makers/">worst-performing stocks</a>&nbsp;of the year as Covid-19 vaccine demand dwindles, and Anheuser-Busch, whose shares are&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/05/31/anheuser-busch-stock-enters-bear-territory-amid-anti-trans-bud-light-backlash/">down about 10%</a>&nbsp;over the last three months as Bud Light sales dwindled amid controversy.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/07/26/alphabet-stock-rides-earnings-to-15-month-high-heres-why-some-analysts-expect-it-to-surge-nearly-30-more/?sh=775951e6a87c">Alphabet Stock Rides Earnings To 15-Month High—Here&#8217;s Why Some Analysts Expect It To Surge Nearly 30% More</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/07/26/meta-earnings-stock-rallies-as-facebook-parent-notches-most-profitable-quarter-since-2021/?sh=62656f6550fd">Meta Earnings: Stock Rallies As Facebook Parent Notches Most Profitable Quarter Since 2021</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/07/25/microsoft-earnings-ai-lifts-redmond-to-highest-quarterly-sales-ever/?sh=2a958ed04cb8">Microsoft Earnings: AI Lifts Redmond To Highest Quarterly Sales Ever</a> (<em>Forbes</em>)</p>


These Stocks Hit 2023 Highs As Dow Heads For Best 2-Month Stretch Since November


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Hundreds of Airbus jets are being recalled for an inspection after an issue was discovered in the engines, which are made by Pratt &amp; Whitney, a third party subsidiary of RTX (formerly called Raytheon Technologies), according to&nbsp;<a href="https://www.reuters.com/business/aerospace-defense/rtx-raises-2023-sales-outlook-boosted-by-aviation-recovery-2023-07-25/" target="_blank" rel="noreferrer noopener">multiple</a>&nbsp;<a href="https://www.wsj.com/articles/new-engines-on-hundreds-of-airbus-jets-recalled-for-inspection-ab206106?mod=hp_lead_pos2" target="_blank" rel="noreferrer noopener">reports</a>—the latest in a series of reliability issues with Pratt &amp; Whitney’s flagship engine.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>RTX reportedly said it recently discovered contamination in the metals used to make some engine parts on its geared turbofan engine, or GTF, from 2015 to 2020, requiring the planes to be grounded for inspection.</p>



<p>RTX will be inspecting about 1,200 engines over the next year.</p>



<p>RTX said this isn’t a flight safety issue, and that it won’t impact new shipments of planes as those were built after a change in the production process.</p>



<p>The engines are used in about 40% of Airbus’ A320neo single-aisle jets, which make up a large portion of the global airplane fleet and was the fastest selling airplane in history after its launch in 2014, according to&nbsp;<a href="https://www.bloomberg.com/news/articles/2014-10-15/airbus-wins-accord-from-india-s-indigo-for-250-a320neo-airliners" target="_blank" rel="noreferrer noopener">Bloomberg</a>.</p>



<p>Spirit Airlines, JetBlue Airways, Germany’s Lufthansa and India’s IndiGo all reportedly use Airbus jets with the GTF engine.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>“It’s going to be expensive,” RTX CEO Greg Hayes said Tuesday on an earnings call, adding that it’s too early to know the final cost, but said it will likely cost around $500 million in 2023 alone.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Raytheon Technologies’ stock price plummeted over 15% after the news, but slightly recovered later in the trading day Tuesday. The share price sat at $85.77 at 2:55 p.m. Eastern Time—still down nearly 12% from Monday’s close.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The GTF engine has had reliability issues since it hit the market in 2015, with airlines complaining about the engine’s durability issues virtually from the start. Hawaiian Airlines was recently forced to ground five of its 18 Airbus A321neos due to engine issues,&nbsp;<a href="https://aviationweek.com/mro/aircraft-propulsion/mro-memo-operators-feel-impact-gtf-issues" target="_blank" rel="noreferrer noopener"><em>Aviation Week</em>&nbsp;reported</a>. Spirit Airlines CFO Scott Haralson recently said in an earnings call that the company has been forced to remove many of the engines, and that while it’s hopeful these issues improve, “it will likely remain a drag on utilization for the rest of the year.” Go Airlines India has gone so far as to blame the engines for its bankruptcy in May,&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-02/go-airlines-files-for-insolvency-after-25-aircraft-were-grounded" target="_blank" rel="noreferrer noopener">citing</a>&nbsp;that the engines “suffered from a multitude of defects and a high rate of failure effectively from day one.” (Pratt &amp; Whitney deny responsibility for Go Airlines India’s bankruptcy.)&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-06-16/pratt-s-gtf-engines-for-airbus-a320neo-hit-turbulence" target="_blank" rel="noreferrer noopener">Bloomberg reported</a>&nbsp;that in May, about one in eight A320neos and related aircraft with the GTF spent 30 days or more in storage. While that number includes airplanes that were taken out of service for any reason, only 4% of airplanes using the rival Leap engine from CFM were sidelined for 30 days or more.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/jeremybogaisky/2018/07/12/pratt-whitney-geared-turbofan-united-technologies/?sh=a4bd7e2b7007">Pratt &amp; Whitney Struggles To Get Its Dream Engine Program Humming</a>&nbsp;(Forbes)</p>



<p><a href="https://www.wsj.com/articles/new-engines-on-hundreds-of-airbus-jets-recalled-for-inspection-ab206106?mod=hp_lead_pos2" target="_blank" rel="noreferrer noopener">New Engines on Hundreds of Airbus Jets Recalled for Inspection</a>&nbsp;(Wall Street Journal)</p>



<p><a href="https://www.bloomberg.com/news/articles/2023-06-16/pratt-s-gtf-engines-for-airbus-a320neo-hit-turbulence" target="_blank" rel="noreferrer noopener">Airlines Are Rankled About Pratt &amp; Whitney’s Jet Engine Problems</a> (Bloomberg)</p>


ITA Airways Unveil New Airport Lounge And Aircraft At Fiumicino

Hundreds Of RTX-Made Jet Engines Recalled Over Metal Contamination—Sending Stock Tumbling


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Streaming giant Netflix quietly eliminated its cheapest advertisement-free plan for new U.S. and U.K. customers this month, pushing new users toward either a more expensive monthly plan or a cheaper offer with ads, the latest streaming platform to adjust its pricing.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Netflix’s changes, which do not affect existing customers, leave new customers with the&nbsp;<a href="https://help.netflix.com/en/node/24926" target="_blank" rel="noreferrer noopener">choice of</a>&nbsp;a $6.99 per month “Standard with Ads” plan—the cheapest Netflix offers—as well as a $15.49 “Standard” plan, which allows for two simultaneous streams and 1080p full HD video quality, or a $19.99 “Premium” plan, with up to four simultaneous streams and 4K Ultra HD video.</p>



<p>The company eliminated its $9.99-a-month “Basic” plan and now&nbsp;<a href="https://help.netflix.com/en/node/24926/gb" target="_blank" rel="noreferrer noopener">states</a>&nbsp;on its support page it “is no longer available for new or rejoining members,” a change multiple news outlets spotted Wednesday—as of July 5, the streaming giant still listed the basic subscription tier on its U.S. support site, according to an&nbsp;<a href="https://web.archive.org/web/20230705193321/https://help.netflix.com/en/node/24926" target="_blank" rel="noreferrer noopener">archived version</a>&nbsp;of the webpage.</p>



<p>Under Netflix’s “Standard” plan, customers can opt to pay up to $23.48 a month for an extra member, while Premium users can pay $27.98 per month for one extra member or $35.97 for two.</p>



<p>The platform’s decision to cut its “Basic” plan comes one month after it cut the same offering for customers in Canada, and in the same fashion allows existing customers to stay on the plan.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>The change puts Netflix, a stalwart in the decade-long streaming wars, roughly on par with Disney-controlled rivals Hulu ($7.99 per month with ads, or $14.99 ad-free) and Disney+ ($7.99 with ads and $10.99 ad-free). Warner Bros. Discovery’s platform Max, which&nbsp;<a href="https://www.forbes.com/sites/katherinehamilton/2023/04/12/new-max-streaming-service-combines-hbo-and-discovery-shows-heres-what-you-need-to-know/?sh=6a11dfa037c8">launched</a>&nbsp;this spring as a mega-service combining HBO Max and Discovery+, offers monthly subscriptions starting slightly higher, at $9.99 per month with ads and $15.99 without them, and $19.99 per month for “Ultimate Ad Free,” which allows for up to four simultaneous streams. Some legacy broadcasters have cheaper services: NBCUniversal’s Peacock and CBS owner Paramount Global’s Paramount+ both charge $5.99 per month with ads or $11.99 per month without (in Paramount’s case, the ad-free service includes SHOWTIME). And Amazon Prime Video costs $8.99 a month, but it’s included in a $14.99 Amazon Prime membership.</p>



<h2 class="wp-block-heading" id="h-news-peg">NEWS PEG</h2>



<p>Netflix’s price change follows a series of price hikes by rival streaming services, including Peacock, which announced plans on Tuesday to&nbsp;<a href="https://www.forbes.com/sites/anafaguy/2023/07/18/peacock-raises-its-rates-heres-how-it-compares-to-rivals-netflix-paramount-and-more/?sh=26e692db19c5">raise rates</a>&nbsp;from $4.99 per month to $5.99. The price for ad-free “Premium” subscribers is set to increase next month from $9.99 per month to $11.99, while Peacock’s annual premium plan will jump $10 per year to $59.99. Peacock ended its free streaming tier earlier this year.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Netflix, as well as Max and Disney+, have raised rates in recent months and launched cheaper ad-based subscription options for customers, in a bid to boost revenue in a challenging era and remain competitive with more price-sensitive customers. Netflix’s rate of subscriber growth stalled in the first half of 2022 after two consecutive quarters of declining memberships, spooking investors, though the company ended the year with more subscribers. Meanwhile, rivals like Disney+ remain unprofitable. Despite previously swearing off ads on his streaming service, Netflix co-founder and former co-CEO Reed Hastings&nbsp;<a href="https://www.theverge.com/2022/4/19/23032869/netflix-ads-streaming-reed-hastings-lower-price" target="_blank" rel="noreferrer noopener">said</a>&nbsp;in an earnings call last April he would be “quite open” to low-cost streaming tiers with ads. Last year, Netflix also&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2022/08/12/heres-how-much-more-you-have-to-pay-for-streaming-services-compared-to-last-year/?sh=714d2a1f6dfe">raised prices</a>&nbsp;for its streaming tiers by between $1 and $2 per month, bringing the basic option to $9.99 from $8.99 and its premium option to $19.99 from $17.99. Netflix has also cracked down on password sharing, a well-known secret the platform had once promoted, imposing restrictions in Canada, New Zealand and Spain, and announcing plans in May to prohibit U.S. customers from sharing accounts with people they don’t live with. In October, Netflix boasted&nbsp;<a href="https://www.forbes.com/sites/marisadellatto/2022/10/18/netflix-adds-24-million-subscribers-after-months-of-declines/?sh=5211728577be">2.4 million</a>&nbsp;new paid subscribers over the prior quarter, bringing its total subscribers to 230.75 million after months of decline, putting it above Disney+ (161.8 million), Paramount+ (56 million), Hulu (48 million) and Peacock (20 million).</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/anafaguy/2023/07/18/peacock-raises-its-rates-heres-how-it-compares-to-rivals-netflix-paramount-and-more/?sh=26e692db19c5">Peacock Raises Its Rates: Here’s How It Compares To Rivals Netflix, Paramount+ And More</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/anafaguy/2023/05/23/netflix-starts-long-awaited-password-sharing-crackdown-heres-how/?sh=79780274f884">Netflix Starts Long-Awaited Password-Sharing Crackdown—Here’s How</a> (Forbes)</p>


Netflix

Netflix Scraps Cheapest Ad-Free Plan Amid Streaming Wars—Here’s How It Stacks Up With Hulu, Max, Disney+


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>High-profile collapses in bank stocks and losses for major healthcare and energy companies headlined the biggest names losing out on 2023’s broader market rally.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Banking turmoil was behind much of the market’s less fortunate spots; investors in&nbsp;<strong>First Republic, Signature&nbsp;</strong>and&nbsp;<strong>Silicon Valley Bank&nbsp;</strong>saw their investments turn to dust earlier this year after they&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/05/01/first-republic-bank-failure-a-timeline-of-what-led-to-the-second-largest-bank-collapse-in-us-history/">became</a>&nbsp;three of the four largest American banks to ever fail, with each subsequently losing their spots on the S&amp;P 500<strong>.</strong></p>



<p>Still, 19 of the S&amp;P’s 50 worst performers year-to-date are financial services stocks, including slumping but still alive regional banks&nbsp;<strong>KeyCorp</strong>&nbsp;(down 45%) and&nbsp;<strong>Zions</strong>&nbsp;(down 43%), the second and third-worst performers on the S&amp;P, respectively.</p>



<p>Broadly, the S&amp;P’s financial sector is down 2% year-to-date, making it the worst-performing sector, followed by energy (down 8%), utilities (8%) and healthcare (3%).</p>



<p>Pharmaceutical giant&nbsp;<strong>Pfizer</strong>&nbsp;(down 27%) is the worst-performing stock with a market capitalization over $200 billion&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/01/31/pfizer-expects-covid-vaccine-and-pill-revenues-will-fall-60-in-2023/">due in part</a>&nbsp;to a decline in Covid-19 vaccine sales; vaccine rival&nbsp;<strong>Moderna</strong>&nbsp;is similarly down 33%.</p>



<p>Overall, <strong>Advance Auto Parts</strong> (down 51%) is the S&amp;P’s worst performer of 2023 after it fell <a href="https://www.forbes.com/sites/jonathanponciano/2023/05/31/retailer-stock-crash-signals-potential-price-wars-looming/?sh=7e3012546997">far short</a> on its first quarter earnings estimates as profits dwindled due to price cuts.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes-1024x451.jpg" alt="" class="wp-image-58720" width="750" height="329" srcset="https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes-1024x451.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes-300x132.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes-768x338.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes-1536x676.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2023/07/fornes.jpg 1897w" sizes="(max-width: 750px) 100vw, 750px" /></figure></div>


<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The slump in energy, healthcare and utility stocks follows a year in which the three sectors were the only positive returners on the S&amp;P. The energy sector gained 66% in 2022 as soaring oil and commodity prices led to record profits at oil and gas giants like Chevron and Exxon, whose shares each touched all-time highs last year. But the well’s run dry for the sector thus far this year as energy prices stabilized. Pfizer and Moderna’s combined market capitalization is down some $260 billion from September 2021 as each reported 30% and 70% annual declines in revenue during 2023’s first quarter and forecasted further pain as the pandemic subsides.</p>



<h2 class="wp-block-heading" id="h-crucial-quotes">CRUCIAL QUOTES</h2>



<p>Small and mid-sized banks “will have a very difficult time moving forward,” Wells Fargo Investment Institute Sameer Samana said on a conference call last month, putting a sell rating for the regional banking stocks even after they plunged following prior failures. “It’s not just a 30-day flash in the pan and you go merrily into the night, this crisis could take 12-18 months to play out” and possibly claim more banks, Samana’s colleague Darrell Cronk added.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Outside the S&amp;P, retailer&nbsp;<strong>Walgreens</strong>&nbsp;(down 24%) is the worst performer on the Dow Jones Industrial Average as the pharmacy&nbsp;<a href="https://investor.walgreensbootsalliance.com/news-and-events/financial-news/financial-news-details/2023/Walgreens-Boots-Alliance-Reports-Fiscal-2023-Third-Quarter-Results/default.aspx" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;a steep decline in Covid-related revenues, and Chinese retailer&nbsp;<strong>JD.com</strong>&nbsp;(down 39%) is the Nasdaq’s biggest loser as concerns about China’s economic recovery mounted.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="http://www.forbes.com/sites/dereksaul/2023/06/30/best-stocks-of-2023s-first-half-nvidia-leads-big-tech-renaissance/">Best Stocks Of 2023’s First Half: Nvidia Leads Big Tech Renaissance</a> (<em>Forbes</em>)<a href="https://www.forbes.com/sites/dereksaul/"></a></p>


Citigroup Inc. Plots New Trading Floor With Plans to Double Staff in Paris

Worst Stocks Of 2023’s First Half: Battered Banks And Vaccine Makers


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Fast fashion retailer Shein shot down a Thursday report from&nbsp;<a href="https://www.reuters.com/business/retail-consumer/chinas-shein-files-us-ipo-sources-2023-06-29/?taid=649dc58f25570b0001e072d2&amp;utm_campaign=trueAnthem:+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter" target="_blank" rel="noreferrer noopener">Reuters</a>&nbsp;that claimed it confidentially registered with regulators for a U.S. initial public offering, in what would be a highly controversial listing in the U.S. given controversy around the brand’s labor practices.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Shein told&nbsp;<em>Forbes</em>&nbsp;in an email that it denied “rumors” around the Reuters story, which reported the company had filed for an IPO with the Securities and Exchange Commission.</p>



<p>The company, which has been surrounded by&nbsp;<a href="https://time.com/6247732/shein-climate-change-labor-fashion/" target="_blank" rel="noreferrer noopener">controversy</a>&nbsp;over allegations of using forced labor, could have been the most valuable Chinese company to go public in the U.S., according to Reuters.</p>



<p>Shein was valued at $66 billion following a $2 billion funding round from this year—a valuation down more than 25% from a year earlier, according to the&nbsp;<a href="https://www.wsj.com/articles/fashion-giant-shein-raises-2-billion-but-lowers-valuation-by-a-third-1f8c316b" target="_blank" rel="noreferrer noopener"><em>Wall Street Journal.</em></a></p>



<p>Shein did not immediately respond to a request for comment from Forbes.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Shein is known for its fast fashion platform that offers low prices on a wide variety of men’s and women&#8217;s clothing, making it a popular brand in the U.S. According to a Money.co.uk&nbsp;<a href="https://www.money.co.uk/credit-cards/most-popular-fashion-brands-2022" target="_blank" rel="noreferrer noopener">report</a>&nbsp;last year, Shein managed to overtake companies such as Zara, Nike and Adidas in the world’s most-Googled clothing brands. However, the company’s success comes at a highly-scrutinized cost involving high emissions and alleged forced labor that lawmakers have encouraged the SEC to&nbsp;<a href="https://www.cnbc.com/2023/05/01/shein-china-congress-forced-labor-inquiry.html" target="_blank" rel="noreferrer noopener">crack down on</a>. The company produced about&nbsp;<a href="https://www.businessoffashion.com/news/topics/shein-sustainability-emissions-global-warming-fast-fashion/" target="_blank" rel="noreferrer noopener">6.3 million tons</a>&nbsp;of carbon dioxide in 2021 and has historically&nbsp;<a href="https://www.cnbc.com/2023/05/01/shein-china-congress-forced-labor-inquiry.html" target="_blank" rel="noreferrer noopener">denied</a>&nbsp;forced labor allegations and maintained that it has worked to comply with customs and import laws. However, attempts to clear its record, such as a tour of a clothing factory given by the company to influences, have been&nbsp;<a href="https://www.forbes.com/sites/darreonnadavis/2023/06/27/sheins-influencer-trip-backlash-explained-and-what-we-know-about-allegations-against-them/?sh=49c52cf73508">met with skepticism.</a></p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p><a href="https://www.wsj.com/articles/shein-valued-at-100-billion-in-funding-round-11649126740" target="_blank" rel="noreferrer noopener">$100 billion</a>. That was Shein’s reported valuation in a funding round last year before plummeting down to&nbsp;<a href="https://www.ft.com/content/e84a6fcd-0881-47a1-b5dd-610ab72e7fdf" target="_blank" rel="noreferrer noopener">around $60 billion</a>&nbsp;this year.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.reuters.com/business/retail-consumer/chinas-shein-files-us-ipo-sources-2023-06-29/?taid=649dc58f25570b0001e072d2&amp;utm_campaign=trueAnthem:+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter" target="_blank" rel="noreferrer noopener">Exclusive: China&#8217;s Shein files for U.S. IPO -sources</a>&nbsp;(Reuters)</p>



<p><a href="https://www.axios.com/2023/06/29/shein-denies-report-that-its-filed-for-an-ipo" target="_blank" rel="noreferrer noopener">Shein denies report that it&#8217;s filed for an IPO</a>&nbsp;(Axios)</p>



<p><a href="https://www.forbes.com/sites/darreonnadavis/2023/06/27/sheins-influencer-trip-backlash-explained-and-what-we-know-about-allegations-against-them/?sh=49c52cf73508">Shein’s Influencer Trip Backlash Explained—And What We Know About Allegations Against Them</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://time.com/6247732/shein-climate-change-labor-fashion/" target="_blank" rel="noreferrer noopener">Shein Is the World’s Most Popular Fashion Brand—at a Huge Cost to Us All </a>(<em>Time)</em></p>


In this photo illustration, the fashion retailer Shein

Is Shein About To Hit Stock Market? Report Says Company Filed For IPO—But Chinese Firm Denies Plan


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Beyoncé’s “Renaissance” world tour—which launched with two nights in Stockholm last month—may have contributed to Sweden’s increased inflation rate in May, according to an economist from Danske Bank, after the tour resulted in increased hotel, restaurant and recreation prices.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Michael Grahn, Danske Bank’s chief economist,&nbsp;<a href="https://twitter.com/MichaelGrahn1/status/1668865814110380033?s=20" target="_blank" rel="noreferrer noopener">said</a>&nbsp;Beyoncé’s tour “probably” added between 0.2 and 0.3 percentage points to Sweden’s inflation rate, which fell from 10.5% in April to 9.7% in May.</p>



<p>The Swedish government&nbsp;<a href="https://www.scb.se/en/finding-statistics/statistics-by-subject-area/prices-and-consumption/consumer-price-index/consumer-price-index-cpi/pong/statistical-news/consumer-price-index-cpi-may-2023/" target="_blank" rel="noreferrer noopener">noted</a>&nbsp;in its inflation report that the inflation rate was affected by hotel and restaurant prices, which rose 3.3% over the previous month, and prices for “recreational services,” which include concert tickets.</p>



<p>Grahn—who said the scenario was “very rare”—<a href="https://www.wsj.com/articles/the-beyonce-effect-swedens-inflation-feels-the-hit-417370a6?mod=hp_listb_pos4" target="_blank" rel="noreferrer noopener">told</a>&nbsp;the&nbsp;<em>Wall Street Journal&nbsp;</em>that increased prices were most likely affected by Beyoncé’s fans, who “vacuumed hotels around Stockholm” while “bidding” for hotel rates.</p>



<p>The added percentage points are expected to be “reversed” in June as hotel and ticket prices “reverse back to normal,” Grahn&nbsp;<a href="https://twitter.com/MichaelGrahn1/status/1668865816597610496" target="_blank" rel="noreferrer noopener">added</a>.</p>



<p>Beyonce performed both Stockholm shows before sold-out audiences of 46,000, including many who flew in from around the world.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>“Beyoncé is responsible for the extra upside surprise this month,” Grahn&nbsp;<a href="https://www.ft.com/content/abc431c4-426d-4a9f-9674-f437ed504eb7" target="_blank" rel="noreferrer noopener">told</a>&nbsp;the&nbsp;<em>Financial Times</em>, adding, “It’s quite astonishing for a single event. We haven’t seen this before.”</p>



<p>Forbes Daily: Get our best stories, exclusive reporting and essential analysis of the day’s news in your inbox every weekday.Sign Up</p>



<p>By signing up, you accept and agree to our&nbsp;<a href="https://www.forbes.com/terms-and-conditions" target="_blank" rel="noreferrer noopener">Terms of Service</a>&nbsp;(including the class action waiver and arbitration provisions), and you acknowledge our&nbsp;<a href="https://www.forbes.com/privacy" target="_blank" rel="noreferrer noopener">Privacy Statement</a>.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Ticketmaster&nbsp;<a href="https://blog.ticketmaster.com/beyonce/" target="_blank" rel="noreferrer noopener">warned</a>&nbsp;in February that demand for “Renaissance” tour tickets in “Group A” cities—including Atlanta, Chicago, Houston, Las Vegas, Toronto and Washington D.C.—exceeded the number of tickets available by 800%.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>$2.4 billion. That’s how much&nbsp;<em>Forbes</em>&nbsp;<a href="https://www.forbes.com/sites/petercohan/2023/05/08/beyonc-renaissance-tour-could-outearn-taylor-swift-eras-by-600-million/?sh=4933e31e49bc">estimates</a>&nbsp;Beyoncé’s tour could gross in revenue.</p>



<h2 class="wp-block-heading" id="h-forbes-valuation">FORBES VALUATION</h2>



<p>Beyoncé has a net worth of $540 million,&nbsp;<a href="https://www.forbes.com/profile/beyonce-knowles/?sh=1d5096693ce7">according</a>&nbsp;to our most recent estimates.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Beyoncé—who has won a record 32 Grammy Awards—announced her long-anticipated “Renaissance” world tour to coincide with the release of her&nbsp;<em>Renaissance</em>&nbsp;album, which&nbsp;<a href="https://www.forbes.com/sites/marisadellatto/2022/08/08/beyoncs-renaissance-is-a-no-1-album-but-its-not-her-biggest-debut-ever/?sh=525fc48127d5">debuted&nbsp;</a>No. 1 on the&nbsp;<em>Billboard&nbsp;</em>200 last August. The tour—Beyoncé’s first since 2018—opened in May in Stockholm before subsequently reaching other European cities. The tour will start its North American leg in July. “Renaissance” is Beyoncé’s first solo tour since 2016, when she grossed&nbsp;<a href="https://www.billboard.com/pro/beyonce-formation-tour-2-million-tickets-250-million-dollars/" target="_blank" rel="noreferrer noopener">$256 million</a>&nbsp;with “The Formation World Tour.”</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/carlieporterfield/2023/02/01/beyonc-announces-renaissance-world-tour-dates/?sh=2424d9314d9f">Beyoncé Announces ‘Renaissance’ World Tour Dates</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/marisadellatto/2022/08/08/beyoncs-renaissance-is-a-no-1-album-but-its-not-her-biggest-debut-ever/?sh=72337d5d27d5">Beyoncé’s ‘Renaissance’ Is A No. 1 Album—But It’s Not Her Biggest Debut Ever</a> (<em>Forbes</em>)</p>


Beyoncé RENAISSANCE WORLD TOUR – London

Beyoncé Caused Inflation? ‘Renaissance’ Tour May Have Boosted Sweden’s Costs, Economist Says


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Stocks gained Wednesday thanks in part to another artificial intelligence-powered lift, as optimism emanating from the nascent technology keeps driving equities higher against a suboptimal macroeconomic backdrop.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The Dow Jones Industrial Average, S&amp;P 500 and tech-heavy Nasdaq each rose 1.2% or more Wednesday, just the third time that happened since the beginning of April.</p>



<p>Yet again driving the gains were tech heavyweights, as Tesla (up 4.4%), Nvidia (3.4%), Amazon 1.8%), Meta (1.5%), Alphabet (1.3%), Microsoft (0.9%) and Apple (0.3%) spiked, tacking on a combined $123 billion in market capitalization Wednesday.</p>



<p>Those giants, which have rallied more than $1 trillion year-to-date collectively thanks in large part to the AI boom, offered more fuel for optimistic investors Wednesday, with Amazon&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-17/amazon-unveils-new-alexa-gadgets-as-chatgpt-rivalry-heats-up" target="_blank" rel="noreferrer noopener">announcing</a>&nbsp;AI enhancements to its Alexa devices and Nvidia&nbsp;<a href="https://nvidianews.nvidia.com/news/servicenow-and-nvidia-announce-partnership-to-build-generative-ai-across-enterprise-it" target="_blank" rel="noreferrer noopener">unveiling</a>&nbsp;a new partnership with ServiceNow to expand generative AI in cloud computing.</p>



<p>Hedge fund billionaire Steve Cohen declared Tuesday he has a “pretty bullish” outlook on the market as a whole thanks to streamlined corporate efficiency from AI,&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-17/steve-cohen-says-he-s-pretty-bullish-on-markets-thanks-to-ai?srnd=premium" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to Bloomberg.</p>



<p>“I’m making a prognostication: We’re going up,” Cohen said about broad equity prices, explaining increased automation should widen corporate profits in coming quarters.</p>



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>The S&amp;P is up 9% year-to-date and excitement about what AI could mean for investors is at a&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/03/01/ai-is-the-new-electricity-bank-of-america-picks-20-stocks-to-cash-in-on-chatgpt-hype/?sh=55bfdf2a77ac">fever pitch</a>, but stocks will encounter a “rocky road” later this year, Wells Fargo strategist Scott Wren wrote in a Wednesday note to clients. Wren explained the strong likelihood of the U.S.&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/12/fed-officials-now-expect-us-will-enter-mild-recession-this-year-after-banking-crisis-rattles-markets/?sh=5433b921107c">slipping into</a>&nbsp;a recession and his expectation that companies will fail to deliver on profit expectations thanks to thinner margins as interest rates remain high. Earnings for S&amp;P companies declined by 6.8% year-over-year in the most recent quarter, according to recent Morgan Stanley research.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Tesla, which hosted its annual meeting with shareholders after Tuesday’s market close, posted its second-largest daily stock gain since March, tacking on $25 billion in market value after it said it will advertise its vehicle for the first time and its CEO Elon Musk vowed to remain in charge for the foreseeable future. Musk, who&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/05/16/elon-musks-attack-on-george-soros-distressing-and-dangerous-jewish-group-says/?sh=7ad31cc130ba">drew the ire</a>&nbsp;of several Jewish civil rights groups this week for touting conspiracies mirroring antisemitic tropes about billionaire George Soros, added the most to his net worth of anybody on earth Wednesday with a $5 billion bump.</p>



<h2 class="wp-block-heading" id="h-forbes-valuations">FORBES VALUATIONS</h2>



<p>Musk holds the second-largest fortune in the world at $181 billion, while Cohen is owner of the planet’s 93rd-largest wealth pile at $17.5 billion. Cohen chairs Point72 Asset Management and owns the New York Mets MLB team.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Since the late 2022 launch of the Microsoft-subsidized ChatGPT generative AI product, AI fever has infected Wall Street; Bank of America strategists dubbed AI the “new electricity” in a March note, projecting it to create massive gains for stocks. A slew of technology companies have revealed their own AI services, but&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2023/04/29/this-stock-market-indicator-is-the-weakest-its-ever-been-and-other-warning-signs-are-flaring/?sh=162f37947b4c">benefitting the most</a>&nbsp;are mega-cap tech stocks like Nvidia, Meta, Alphabet and Amazon, four of the 20 best-performing stocks on the S&amp;P year-to-date.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/03/01/ai-is-the-new-electricity-bank-of-america-picks-20-stocks-to-cash-in-on-chatgpt-hype/?sh=55bfdf2a77ac">‘AI Is The New Electricity’: Bank Of America Picks 20 Stocks To Cash In On ChatGPT Hype</a> (<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/"></a><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


Dow Jumps 400 Points As This Billionaire Investor Says Stock Market Has Room To Grow


<p><strong>The party is over for struggling retailers that enjoyed a pandemic-era boost of cheap loans and stimulus-driven spending.</strong></p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p><strong>Retailers that have no business still being in business are starting to go out of business.</strong></p>



<p>Unfortunately, it’s about time.</p>



<p>This year is on track to be the worst year for retail bankruptcies since 2020, with strip-mall mainstays like Bed Bath &amp; Beyond, Tuesday Morning, Party City and David’s Bridal all filing for Chapter 11 in the last several months.</p>



<p>“These are companies that have been in trouble for a while,” said Neil Saunders, managing director at research firm GlobalData. “It was almost a matter of when, rather than if, they went under.”</p>



<p>The spate of bankruptcies comes at a time when Americans have pulled back on discretionary spending and begun socking away more in savings as the cost of gas, groceries and other staples becomes more expensive, talk of a potential recession continues and major companies conduct layoffs. Consumer spending is watched closely since it accounts for more than two-thirds of the nation’s gross domestic product. Shoppers have shifted spending sharply in different directions over the pandemic, including pivoting away from categories like home goods after an early-pandemic buying spree.</p>



<p>However, while the economy isn’t helping and may be acting as a catalyst, the retailers who are teetering now have long had major problems. Retail spending remains “surprisingly robust” in some ways, said Saunders. More often a retailer’s downfall can be traced to shabby stores or an uninspiring online presence.</p>



<p>Plenty more retailers could go bankrupt before the year is over. The ones that look the most vulnerable to default include Rite Aid, Jo-Ann, Belk, At Home and 99 Cents Only, according to ratings companies Moody’s and S&amp;P Global. This watchlist skews toward specialty stores with exposure to the pressured home goods sector.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p>The pandemic bought many retailers more time. Consumers spent freely, flush with cash from stimulus checks and unable to put it toward vacation or dinner and a movie. Retailers were also able to borrow money on the cheap.</p>



<p>“Covid masked some of the weak players,” said Steve Dennis, founder of SageBerry Consulting. “It staved off the reckoning.”</p>



<p>Now that the pandemic is over, at least officially, it’s back to reality and retailers are confronting the sins of the past: too many stores, too much debt and too few customers.</p>



<p>Retailers who loaded up on debt are having a harder time making payments as they watch sales and profits deteriorate. For instance, discount home goods retailer Tuesday Morning referenced its “exceedingly burdensome debt” in February when filing for bankruptcy for the second time in two years. Its net debt has increased tenfold, jumping from $23 million in 2019 to some $250 million last year. Sales during that time fell by 25%.</p>



<p>Christmas Tree Shops also cited its “burdensome liabilities” when filing for bankruptcy earlier this month. Its owner, Handil Holdings, listed liabilities of as much as $100 million in court documents.</p>



<p>Twelve percent of retailers now have a Triple-C rating from S&amp;P Global, meaning there’s a 50-50 chance that things get so bad they’ll default on their loans. That’s double the figure from last year and triple the year before.</p>



<p>“A lot of these companies were essentially zombie companies pre-Covid,” said Craig Ganz, an attorney at Ballard Spahr who has handled retail bankruptcies for several decades. “They were primarily surviving on debt, and now debt has become simply too expensive for them to afford.”</p>



<p>The Federal Reserve’s rapid rate hikes have made it much costlier for retailers to take on new debt, whether it’s to finance investments in growth areas or give themselves some breathing room, said Sarah Wyeth, who leads the retail and consumer sectors for S&amp;P Global Ratings.</p>



<p>“Any issuer that’s very stressed and needs to go to the market in the next year or so is going to be very challenged,” said Wyeth.</p>



<p>Meanwhile, the bills must be paid. Overhead is especially vexing for retailers stuck with large, lumbering brick-and-mortar fleets from an earlier era who aren’t drawing enough shoppers to cover the costs of paying workers, stocking shelves and keeping the lights on. The home furnishing sector is notorious for having too many stores, said Craig Johnson, founder of Customer Growth Partners, a retail research firm.</p>



<p>“The seeds of these companies’ demise was planted not just years ago, but decades ago,” he said.</p>



<p><em><strong>By Lauren Debter, Forbes Staff</strong></em></p>


Netherlands Reimposes Partial Lockdown Amid Latest Covid-19 Wave

Plenty More Retailers Will Go Bankrupt This Year. The Only Surprise Is It Didn’t Happen Sooner.


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Big-tech stocks rallied after earnings this week and drove big gains for major indexes, but the number of stocks actually outperforming the broader market has slipped to levels unseen in decades—and in some cases, ever—pushing some experts to warn the strength may be a telltale sign of economic weakness.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Buoyed by blockbuster&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/25/microsoft-earnings-stock-climbs-as-company-rides-ai-wave-to-profit-sales-beats/">earnings</a>&nbsp;releases from Microsoft, Meta and Google-parent Alphabet, the S&amp;P 500 and tech-heavy Nasdaq have jumped about 2% and 3% since Tuesday, respectively—tacking on to a rally that&#8217;s seen the Nasdaq surge 17% this year.</p>



<p>Despite the gains, however, JPMorgan analysts led by Dubravko Lakos-Bujas warned clients in a note that market breadth—as measured by the percentage of stocks in the S&amp;P that have outperformed the broader index—is the &#8220;weakest ever&#8221; by some measures.</p>



<p>For one, the market value of the S&amp;P&#8217;s two largest stocks, Apple and Microsoft, commands some 14% of the index&#8217;s value as a whole—the most ever in history; meanwhile, the 10 largest stocks are responsible for nearly 90% of the S&amp;P&#8217;s return this year—also the most ever.</p>



<p>Such &#8220;extreme concentration&#8221; in stocks supports a &#8220;bearish outcome for the market&#8221; because it has typically preceded economic slowdowns or recessions in the past, Dubravko Lakos-Bujas wrote, adding that the current rally, in particular, seems fueled by optimism that should soon fade about the end of the Federal Reserve&#8217;s interest rate hikes.</p>



<p>To make matters worse, JPMorgan notes the current degree of crowding implies &#8220;the risk of recession is far from priced in&#8221; even though fears have re-emerged following the collapse of Silvergate, Silicon Valley Bank and Signature Bank last month.</p>



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<p>Morgan Stanley&#8217;s Michael Wilson is no more optimistic, saying on Tuesday he&#8217;s not convinced the bear market is over unless the performance of small-cap and regional bank stocks—both of which have underperformed while big tech rallies—improves.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>&#8220;We are challenged to find a period in history during which these indices have underperformed to such a degree while a new bull market was beginning,&#8221; says Wilson.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>After slipping into a bear market late last year, stocks have largely rallied over the past four months. Much of the bullishness has been fueled by hopes the Fed may soon cut interest rates (after more than a year of hiking them) to help ease uncertainty in the financial sector. &#8220;Big tech has been outperforming this year as Wall Street expects rate cuts to provide relief,&#8221; explains Oanda analyst Edward Moya—before expressing some doubts: &#8220;For the rally to continue we need to see a few hundred basis points in rate cuts, which is not necessarily going to happen if the Fed chooses inflation over financial stability over the next year.&#8221;</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>The Fed’s next policy meeting concludes next Wednesday. The futures market implies just a 14% chance the central bank will keep rates the same and an 86% chance it will again raise rates by 25 basis points, according to the CME FedWatch Tool. Over the past few weeks, the odds have only grown in favor of another rate hike. Annual inflation fell for a ninth-straight month in March, but consumer prices still&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2023/04/12/prices-rose-another-5-in-march-lowest-inflation-reading-in-nearly-two-years/?sh=613fed083932">rose</a>&nbsp;by 5% on a yearly basis—well above the Fed&#8217;s 2% target.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/04/10/these-7-tech-stocks-command-almost-90-of-the-sp-500s-gains-signaling-market-rally-may-not-be-so-healthy/?sh=1b83adce65d5">These 7 Tech Stocks Command Almost 90% Of The S&amp;P 500’s Gains</a><em>&nbsp;(Forbes)</em></p>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/04/27/dow-gains-500-points-thanks-to-big-techs-320-billion-rally/">Dow Gains 500 Points Thanks To Big Tech’s $320 Billion Rally</a><strong>&nbsp;</strong><em>(Forbes)</em><a href="https://www.forbes.com/sites/jonathanponciano/"></a></p>



<p><strong><em>By Jonathan Ponciano, Forbes Staff</em></strong></p>


Illustrations of Cryptocurrency In Indonesia

This Stock Market Indicator Is The Weakest It’s Ever Been—And Other Warning Signs Are Flaring


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>The market value of LVMH, the company chaired by the world’s richest person Bernard Arnault, just surpassed that of Tesla, the firm led by the world’s second-richest person Elon Musk, for the first time in several months, as Arnault’s lead on Musk as the richest man extends to nearly $70 billion.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>LVMH, the French luxury conglomerate behind brands such as Tiffany, Christian Dior and Moët Hennessy, had a market capitalization of $484 billion Tuesday at 11 a.m. ET.</p>



<p>That narrowly falls short of Tesla’s $510 billion market cap after shares of the American electric vehicle titan slipped, bringing its April&nbsp;<a href="https://www.forbes.com/sites/dereksaul/?sh=49a4ec1d76f9">stock slide</a>&nbsp;to 22% amid investor concerns about dwindling profit margins.</p>



<p>It’d the first time since mid-January that LVMH’s market cap topped Tesla’s, according to YCharts data, and the first time since June 2020, excluding the three-week blip for Tesla at the turn of 2023.</p>



<h2 class="wp-block-heading" id="h-forbes-valuations">FORBES VALUATIONS</h2>



<p>Arnault is worth $240.4 billion, according to our&nbsp;<a href="https://www.forbes.com/real-time-billionaires/#2426131b3d78">latest estimates</a>, $67.1 billion more than Musk’s $173.3 billion wealth pile. Roughly 97% of Arnault’s fortune&nbsp;<a href="https://www.forbes.com/sites/forbeswealthteam/article/behind-the-billions-bernard-arnault/?sh=3ca8b6e8316d">comes from</a>&nbsp;his 48% stake in LVMH, while Musk’s 23% stake in Tesla&nbsp;<a href="https://www.forbes.com/sites/forbeswealthteam/article/elon-musk/?sh=b48f04026afa">accounts for</a>&nbsp;about 58% of his net worth.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>LVMH hit another key milestone earlier this week,&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-04-24/lvmh-s-market-value-surpasses-500-billion-a-first-in-europe" target="_blank" rel="noreferrer noopener">becoming</a>&nbsp;the first European company to ever exceed a $500 billion valuation. Tesla and LVMH are the 10th and 11th most valuable companies in the world, according to&nbsp;<a href="https://companiesmarketcap.com/" target="_blank" rel="noreferrer noopener">Companies Market Cap</a>. Arnault&nbsp;<a href="https://www.forbes.com/sites/mattdurot/2022/12/07/elon-musk-was-overtaken-as-richest-person-in-the-worldbriefly/?sh=4682c562778e">overtook</a>&nbsp;Musk as the richest person on earth in December. Musk’s net worth has cratered by 15% thus far in April.</p>



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<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/kerryadolan/2023/04/04/the-worlds-richest-person-2023/?sh=108c50344e49">The World’s Richest Person 2023</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/forbeswealthteam/article/behind-the-billions-bernard-arnault/?sh=3ca8b6e8316d">Behind The Billions: Bernard Arnault</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/forbeswealthteam/article/elon-musk/?sh=b48f04026afa">Behind The Billions: Elon Musk</a> (<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/"></a><strong><em>By Derek Saul, Forbes Staff </em></strong></p>


Untitled design (8)

LVMH Is Almost More Valuable Than Tesla—As Wealth Gap Widens Between Arnault And Musk


<p><strong>Name:&nbsp;</strong>Angela Mwanza</p>



<p><strong>Firm:&nbsp;</strong>UBS Private Wealth Management</p>



<p><strong>Location:</strong>&nbsp;New York, NY</p>



<p><strong>AUM:</strong>&nbsp;$878 million</p>



<p><strong>Forbes Rankings:&nbsp;</strong>Best-in-State Wealth Advisors, Top Women Wealth Advisors Best-In-State, America’s Top Women Wealth Advisors</p>



<p><strong>Background:</strong>&nbsp;Angela Mwanza was born and raised in Zambia, where her family still lives. She eventually moved to Germany and learned the language there while pursuing a degree in Linguistics. While studying, Mwanza worked for a sports fashion sales company specializing in snowboarding. “I’m scared of heights and come from Africa so I had never snowboarded… but I self taught myself and still snowboard to this day!,” says Mwanza. In the late 90s, Mwanza decided it was time for a change of pace so she earned her MBA at Cornell University and then landed a job at JPMorgan Private Bank in 2000. When the financial crisis rolled around eight years later, she was working at Lehman Brothers, but was able to move to UBS in the midst of the downturn, where she has worked ever since.</p>



<p><strong>Competitive Edge:</strong>&nbsp;Mwanza is highly focused on family finances and philanthropy in her practice, honing in on the purpose and values of each client in order to be intentional about all aspects of their wealth. “The pain points I kept hearing from clients all had to do with the complexities that wealth brings—and the number one thing people care about is their family,” says Mwanza. As a result she is “always thinking generationally”, engaging the next generation and facilitating discussions throughout the entire family. What’s more, many of her clients have a passion for making a positive change in the world, so a key part of her practice revolves around socially responsible and impact investments.</p>



<p><strong>Biggest Challenge:&nbsp;</strong>When she first moved to the United States for business school, Mwanza had to build up her knowledge and expertises from scratch. “I was so out of my element and completely clueless at the time,” she recalls. “I had never heard of&nbsp;<em>The Wall Street Journal</em>!”</p>



<p><strong>Investment Philosophy/Strategy:</strong>&nbsp;Mwanza takes a holistic approach to working with clients: “I can’t be a good advisor if I’m not speaking to their other advisors and attorneys,” she says. In terms of investing, she and her team are strong believers in long-term, risk-adjusted and tax-aware returns. “Most clients who are entrepreneurial tend to have a lot of risk outside of the portfolio we are managing—so we tend to be moderately conservative when thinking about their lifetime,” adds Mwanza.</p>



<p><strong>Investment Outlook:&nbsp;</strong>“Markets like this with rising rates tend to favor value over growth, so we position more defensively from a tactical standpoint,” she says. “There’s a lot of unknowns but that’s something we just<a href="https://www.forbes.com/digital-assets/assets/just-just/" target="_blank" rel="noreferrer noopener">just</a>&nbsp;<a href="https://www.forbes.com/digital-assets/assets/just-just/">-0.3%</a>&nbsp;have to be ready for and resilient about when it comes to client portfolios.” Mwanza and her team like alternative investments but shuns gold, which “doesn’t make sense” as a hedge to market volatility when Treasuries are yielding nearly 5%. “Our outlook is long term, so we’re not bothered by day to day volatility,” says Mwanza.</p>



<p><strong>Best Advice:</strong>&nbsp;“It’s very important not to be emotionally invested—people get antsy and feel like they have to do something but that’s when most mistakes are made,” she says.</p>



<p><strong>Favorite Hobby: </strong>Mwanza loves pushing her limits outside of work, too: “Don’t tell me I can’t do something,” she says. She has run six marathons (one in Boston, five in New York) and has scaled the summit of Mt. Kilimanjaro. Mwanza also enjoys traveling with her husband, taking trips to see endangered species like rhinos in Asia or tortoises in the Galapagos.</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/"></a><strong><em>By Sergei Klebnikov, Forbes Staff</em></strong></p>


Mighty Dream Forum Hosted By Pharrell Williams 2022 – Day 2

Zambia-Born UBS Advisor Loves Snowboarding And Impact Investing


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>As fears grow over a wobbly economy, talk of the yield curve—especially when it becomes inverted—grows, because it has often been seen as a chief predictor of a recession.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p><strong>Key terms:</strong>&nbsp;Interest rates are the percentage a lender will charge a borrower for the amount borrowed, while a&nbsp;<a href="https://www.forbes.com/advisor/investing/what-is-a-bond/">bond</a>&nbsp;is a loan instrument issued by a government or a company (both public and private) to a lender.</p>



<p>Bonds can be used when a government needs to fund roads, schools and other infrastructure, or when a company wants to grow its business by buying property, research and hiring new staff.</p>



<p>Federal government bonds—simply called Treasurys—are virtually guaranteed to be paid back after a certain period of time at a fixed interest rate (unless the U.S. defaults); they usually promise the investor a higher rate the longer they take to pay back.</p>



<p>The yield curve measures interest rates of bonds over a range of time before they are paid back, which can range from a single month to 30 years and is tracked daily by the&nbsp;<a href="https://home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics" target="_blank" rel="noreferrer noopener">U.S. Department of Treasury</a>.</p>



<p>A normal yield curve shows yields of short-term bonds (two to five years) through long-term bonds (between 10 to 30 years) and shows an upward slope showing a higher yield over time, signaling confidence in government or corporate bonds are strong investments likely to pay off over time.</p>



<p>A flat curve is when all bond rates are similar across companies and governments alike and show no difference, suggesting longer-term bonds may not yield more over time.</p>



<p>The&nbsp;<a href="https://www.washingtonpost.com/business/what-the-inverted-yield-curve-says-about-the-next-recession/2022/12/06/5367ddb8-755e-11ed-a199-927b334b939f_story.html" target="_blank" rel="noreferrer noopener">inverted yield curve</a>&nbsp;shows that investors aren’t sure of the long-term profitability of a company’s or government’s ability to pay a debt in a certain fixed time, may be demanding more money for short-term bonds, or are willing to accept lower rates for long-term bonds, out of concern for what’s coming in the future.</p>



<p>Investors often use the yield curve to&nbsp;<a href="https://fred.stlouisfed.org/series/T10Y3M" target="_blank" rel="noreferrer noopener">track&nbsp;</a>where the economy is headed and make predictions about where to invest their money: if there is a flat curve, investors may put their money in reliable areas like consumer staples as opposed to luxury goods companies.</p>



<p>While the inverted yield curve does not serve as a forecast for a recession, it’s certainly an indicator tied to recessions, but investors should look at the economy as a whole including other factors such as inflation, job reports and wage growth before reaching the conclusion that we are in a recession.</p>



<h2 class="wp-block-heading" id="h-news-peg">NEWS PEG</h2>



<p>The yield curve inversion became more intense after Federal Reserve Chairman Jerome Powell signaled the Fed would hike <a href="https://www.barrons.com/articles/yield-curve-inversion-bonds-a483aaed" target="_blank" rel="noreferrer noopener">interest rates</a> higher than it previously expected to deal with inflation, driving fears the spike could slow the economy and trigger a recession. We have been experiencing a yield curve inversion since <a href="https://www.forbes.com/sites/simonmoore/2022/10/19/recession-alarm-just-sounded-by-yield-curve-indicator-with-stellar-track-record/?sh=71b54d309fee">October</a>, when 3-month rates rose above 10-year treasury bonds. Previously, the last inversion was in <a href="https://www.forbes.com/sites/chuckjones/2020/12/31/2019s-yield-curve-inversion-means-a-recession-could-hit-in-2020/?sh=73e689a14229">May 2019</a> when U.S. 3-year treasury bonds were higher than the 10-year treasury bonds and lasted until October that same year. Then in 2020 the U.S. entered a recession due to the Covid-19 pandemic, lasting just <a href="https://www.reuters.com/business/recession-ended-april-2020-making-it-shortest-record-2021-07-19/" target="_blank" rel="noreferrer noopener">two months</a> (the shortest on record).</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>&#8220;If you lock your money up for a longer period of time, you almost always get a higher interest rate,&#8221; Duke University finance professor Campbell Harvey told ABC News. &#8220;However, today, things are backwards &#8211; 10-year interest rates are far below short-term rates. This is known as an &#8216;inverted yield curve.&#8217; In the past 50 years, we have seen seven inverted interest rate curves. Each one was followed by a recession.&#8221;</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>In 1986, Harvey published a dissertation that linked inverted yield curves to recessions after closely studying four major economic downturns from the 1960s to the 1980s. All nine recessions since 1955 have been preceded by an inverted yield curve according to <a href="https://www.frbsf.org/economic-research/wp-content/uploads/sites/4/el2018-07.pdf" target="_blank" rel="noreferrer noopener">research</a> from the San Francisco Fed—except in one case. The time between an inverted yield curve and a recession has ranged from six to 24 months. As soon as the yield curve begins to invert, economists and investors begin to turn their heads.</p>



<p><strong><em>By Anthony Tellez, Forbes Staff</em></strong></p>


Business fund investor planning for investment in crisis

What To Know About The Yield Curve—And Why It May Predict A Recession


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Shares of Novavax fell more than 25% in after-hours trading Tuesday, following a dismal fourth quarter earnings report and a<a href="https://ir.novavax.com/2023-02-28-Novavax-Reports-Fourth-Quarter-and-Full-Year-2022-Financial-Results-and-Operational-Highlights" target="_blank" rel="noreferrer noopener"> warning</a> from the Covid vaccine maker that uncertainty over future funding for coronavirus shots has prompted “substantial doubt” about its ability to stay in business.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>The company’s stock price rose more than 6.8% to $9.26 before the market closed Tuesday but plummeted some 25.7% to $6.88 following the after-hours earnings report.</p>



<p>Novavax reported fourth quarter losses of $182 million after only posting $357 million in sales—well below expectations of $383 million.</p>



<p>Its statement about future financial framework was even more troubling, saying, “substantial doubt exists regarding our ability to continue” over the next year.</p>



<p>The company stated it believes it has enough capital to run for another year, but the forecast is of low confidence, in part because the Biden Administration is expected to<a href="https://www.cnbc.com/2023/02/04/us-plans-to-stop-buying-covid-shots-in-the-fall-what-that-means.html" target="_blank" rel="noreferrer noopener"> stop</a> buying Covid vaccines and distributing them to Americans for free at some point this year.</p>



<h2 class="wp-block-heading">WHAT TO WATCH FOR</h2>



<p>Novavax will likely cut some jobs to reduce its “hot rate” of spending, CEO John Jacobs told<a href="https://www.reuters.com/business/healthcare-pharmaceuticals/novavax-raises-doubts-about-its-ability-remain-business-2023-02-28/" target="_blank" rel="noreferrer noopener">&nbsp;Reuters</a>. The company says it has more than 1,500 employees.</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



<p>&#8220;We&#8217;re in the process of assessing the global footprint of Novavax, rationalizing our supply chain, rationalizing the portfolio and rationalizing the company structure and our infrastructure,&#8221; Jacobs told Reuters.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>Novavax’s Covid-19 vaccine was the first product the 36-year-old company brought to the market. It was<a href="https://www.nytimes.com/2020/07/16/health/coronavirus-vaccine-novavax.html" target="_blank" rel="noreferrer noopener">&nbsp;reportedly</a>&nbsp;nearing collapse in 2020 before the Trump Administration awarded it a $1.6 billion contract to develop a vaccine as part of Operation Warp Speed.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>Novavax’s stock traded at more than $300 at times in 2021 as investors put high hopes in its development of a protein-based vaccine, a more traditional method compared with Pfizer and Moderna’s mRNA approach. Continued manufacturing problems led to a delay in winning regulatory approval, and by the time<a href="https://www.forbes.com/sites/carlieporterfield/2022/07/13/fda-authorizes-novavaxs-covid-19-vaccine-for-adults/?sh=31d2d61e54f3">&nbsp;Novavax’s shot became available</a>&nbsp;in July 2022, Americans’ initial rush to get<a href="https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/#us" target="_blank" rel="noreferrer noopener">&nbsp;vaccinated</a>&nbsp;was long over. Novavax’s vaccine was the fourth to reach the U.S. market, entering U.S. arms more than a year after Pfizer, Moderna and Johnson &amp; Johnson. Only about 80,000 Novavax shots have reportedly been given in the U.S., compared to hundreds of millions of Pfizer and Moderna doses. Novavax<a href="https://ir.novavax.com/2022-02-23-Novavax-Announces-Shipments-of-its-COVID-19-Vaccine-to-European-Union-Member-States" target="_blank" rel="noreferrer noopener">&nbsp;won</a>&nbsp;approval in the European Union several months before its U.S. rollout, but it was still well behind competitors, and its international campaign has not been enough to overcome a slow rate of uptake in the United States.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/carlieporterfield/2022/07/13/fda-authorizes-novavaxs-covid-19-vaccine-for-adults/?sh=31d2d61e54f3">FDA Authorizes Novavax’s Covid-19 Vaccine For Adults</a>&nbsp;(Forbes)</p>



<p><a href="https://www.nytimes.com/2020/07/16/health/coronavirus-vaccine-novavax.html" target="_blank" rel="noreferrer noopener">How a Struggling Company Won $1.6 Billion to Make a Coronavirus Vaccine</a> (New York Times)</p>



<p><strong><em>By Nicholas Reimann, Forbes Staff</em></strong></p>


Vaccinations at Egoli Township as Omicron Cases Spread

Novavax Stock Plunges 25% As Vaccine Maker Has ‘Substantial Doubt’ About Staying In Business


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>After a slew of data showing the economy in a much more precarious position than previously believed, the stock market could be poised for another forceful plunge in March, according to Morgan Stanley’s investment chief, who notes that the last month of the quarter has been difficult for stocks over the year, as investors gear up for a fresh round of negative earnings reports.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>Though high inflation and Federal Reserve interest rate hikes have fueled much of the fears driving the ongoing stock weakness, the depth and length of most bear markets are determined by the trend in earnings projections, the Morgan Stanley team led by Michael Wilson told clients in a Monday note.</p>



<p>Over the past year, stocks have rallied as corporate earnings come out, but then plunged in the month leading up to new reports, which have consistently shown companies cutting profit expectations.</p>



<p>After surging more than 16% since October and then abruptly falling 3% last week, the S&amp;P 500 is at a “critical” level, cautions Wilson, saying there’s a “high risk” the bear market could induce a forceful stock plunge in March (the last month of the quarter)—particularly since earnings are expected to take another hit once reports start trickling in.</p>



<p>“Ultimately, we think this rally is a bull trap,” he notes, positing the S&amp;P &#8220;may have one last stand&#8221; but then could plunge as much as 13% more until earnings projections stop falling—which the analyst believes won’t happen for “several more months, if not quarters.”</p>



<p>The Fed’s “relentless” efforts to slow down the economy will “inevitably” hurt earnings and push stocks to a new multi-year low, says Principal Asset Management’s Seema Shah, who is telling investors to brace for increased volatility since it’s become increasingly clear this year that the Fed is not yet finished with its rate hikes.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>After a &#8220;particularly tough&#8221; year for stocks and a&nbsp;<a href="https://www.morningstar.com/articles/1139572/why-are-bonds-selling-off-again" target="_blank" rel="noreferrer noopener">Fed-induced</a>&nbsp;global bond market selloff, yields on the ten-year Treasury are now more than twice the S&amp;P’s estimated dividend yield—bad news for stocks but an opportunity for investors looking to lock in income with a less volatile asset, says Shah.</p>



<h2 class="wp-block-heading">TANGENT</h2>



<p>Texas factory activity fell in February for the first time since May 2020, according to the Dallas Fed’s manufacturing survey&nbsp;<a href="https://www.dallasfed.org/research/surveys/tmos/2023/2302" target="_blank" rel="noreferrer noopener">released</a>&nbsp;Monday. “February has been a slow month—it is hard to know why, but our outlook has worsened for both our business and retail activity in general,” one respondent said, while another posited, “We are not sure if it’s the Fed jacking with interest rates or some sort of cyclical slowdown, but it feels like business has ground to a halt.”</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>After hitting a near two-year low in October, stocks rallied as signs that inflation was slowing started to abound, but this month has shown the journey to normal price levels may be much longer than many hope. On Friday, the Commerce Department&nbsp;<a href="https://www.bea.gov/news/2023/personal-income-and-outlays-january-2023" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;the prices consumers paid for goods and services last month edged up 5.4% from a year ago—up from 5.3% one month prior despite expectations calling for a decline. Though it’s unclear when the Fed will stop raising rates, analysts at Goldman and Bank of America added another rate hike to their forecasts following another hotter-than-expected inflation reading earlier this month. They now expect the central bank will raise rates to a top level of 5.5%, potentially hitting the highest level in more than 20 years.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/jonathanponciano/2023/02/24/dow-falls-400-points-as-surprisingly-hot-inflation-data-threatens-more-aggressive-fed-policy/">Dow Falls 400 Points As Surprisingly Hot Inflation Data Threatens More Aggressive Fed Policy</a> <em>(Forbes)</em></p>



<p><strong><em>By Jonathan Ponciano, Forbes Staff</em></strong></p>


Stock Market At ‘Critical’ Level And Braced For ‘High Risk’ Of Collapse In March—Here’s What Investors Should Know


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Netflix’s stock extended its rally Friday as investors continue to slowly regain confidence in the streaming giant after a decline in subscriber growth earlier this year fueled market panic.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>Netflix shares rose 5% to $326 Friday, outpacing a largely flat market, after analysts at Cowen and Wells Fargo raised their price targets for the stock.</p>



<p>That’s a 69% increase from its $193 ticker six months ago.</p>



<p>Netflix is by far the biggest riser on the S&amp;P 500 during the period, according to FactSet data as of mid-morning Friday, with no other stock rising more than 61% in the timeframe and the index down 1.3% overall since June 9.</p>



<p>But Netflix is still down 45% year-to-date, placing it among the 50 worst performers on the S&amp;P, though Netflix has by far shed its dubious crown of the worst performer on the index it&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/22/netflix-is-now-the-worst-performing-stock-in-sp-500-as-shares-plunges-over-60-in-2022/?sh=4d87bb887ac7">achieved</a>&nbsp;in August.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>Netflix’s primary competitors have not fared as well over the last six months, with shares of streaming rivals Disney, Warner Bros. Discovery and Paramount dropping 9%, 29% and 35% during the period, respectively. Other members of the FAANG (Facebook, Amazon, Apple, Netflix, Google) group of West Coast technology giants have similarly failed to match Netflix’s latest rally. Facebook parent Meta is down 37% over the last six months, Amazon 23%, and Google parent Alphabet 18%, while Apple is up 1% during the period.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>With the company well-positioned to capitalize on a thirst for online entertainment amid stay-at-home orders during the pandemic, Netflix shares rose more than 60% from March 2020 to November 2021, peaking at $692. Consecutive quarters of subscriber losses to start 2022 sent Netflix’s stock spiraling, with shares dropping 35% on April 20 after the first reported user decline. Investors&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2022/10/19/netflix-stock-hits-6-month-high---even-as-wall-street-remains-skeptical/?sh=220cec653d30">piled back</a>&nbsp;into Netflix after the company’s strong quarterly earnings report revealed 2.4 million net subscriber gains and the rollout of its less expensive, advertising-supported tier.</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



<p>Netflix’s “global scale, strong brand, and superior user experience position it to remain a leader” in the ever-changing content space, Bank of America analyst Jessica Reif Ehrlich wrote in a note to clients last month, citing optimism about what the new ad tier and password sharing crackdowns would mean for the company’s bottom line.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/22/netflix-is-now-the-worst-performing-stock-in-sp-500-as-shares-plunges-over-60-in-2022/?sh=4d87bb887ac7">Netflix Is Now The Worst-Performing Stock In The S&amp;P 500 As Shares Plunge Over 60% In 2022</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2022/10/19/netflix-stock-hits-6-month-high---even-as-wall-street-remains-skeptical/?sh=220cec653d30">Netflix Stock Hits 6-Month High — Even As Wall Street Remains Skeptical</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2022/10/28/heres-how-big-tech-stocks-have-performed-in-2022-as-faang-softens-its-bite/?sh=2f199b4f12db">Here’s How Big Tech Stocks Have Performed In 2022 As FAANG Softens Its Bite</a>&nbsp;(<em>Forbes</em>)</p>



<p><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


Latest Consumer Technology Products On Display At CES 2016

Netflix Comeback? Shares Surge Again To Make Streamer Best Performing Stock On S&P 500 Following Rout


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Oil prices spiked early Monday, <a href="https://www.forbes.com/sites/dereksaul/2022/11/28/oil-drops-to-near-2022-low-on-china-demand-concerns-heres-what-it-means-for-prices-at-the-pump/?sh=306354c27ccb">paring</a> last week’s dip to their lowest level since early January, as markets held their breath about Russia’s reaction to the price cap on its oil exports implemented Monday by the U.S., European Union and its allies and priced in stronger demand from China as its government loosens pandemic restrictions.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>International benchmark Brent Crude rose 2.4% to $87.64, while U.S. benchmark West Texas Intermediate rose 2.6% to $82.06.</p>



<p>The latest geopolitical events involving Russia, the world’s third-largest <a href="https://www.eia.gov/tools/faqs/faq.php?id=709&amp;t=6" target="_blank" rel="noreferrer noopener">oil producer</a>, and China, the world’s second-largest oil consumer, each placed significant upward pressure on prices, with Russia’s <a href="https://www.nytimes.com/2022/12/04/world/europe/russia-oil-cap-zelensky.html" target="_blank" rel="noreferrer noopener">stated commitment</a> to evade the $60 price cap on its oil potentially threatening supply and China’s most recent <a href="https://www.forbes.com/sites/roberthart/2022/12/05/chinese-stocks-rally-as-beijing-signals-reopening-but-economists-divided-over-covid-rebound/?sh=60d6858a11ac">reopening signals</a> indicate demand for fuel in the country will grow.</p>



<p>Oil prices, which surged to near-record levels earlier this year after Russia invaded Ukraine and the subsequent sanctions against Moscow, are in line for a further bump next year, according to several banks.</p>



<p>Brent crude prices will average $110 per barrel in 2023, Goldman Sachs strategists forecasted last week, a 26% increase from Monday, while Bank of America forecasted a more modest $100 2023 average for Brent, though it predicted a rise to $110 in the second half of the year as travel in Asia recovers.</p>



<p>Key storylines to watch for oil price movements are recession-related demand issues, with Goldman saying only an “economic hard landing” in the U.S. would “justify sustained lower prices” for the commodity, and the Kremlin’s next move, with Bank of America noting “further disruptions of Russian supplies present clear upside risk” to oil prices.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>U.S. markets largely did not follow the bumper Monday for oil as investors once again flip flopped on expectations for the length of the Federal Reserve’s aggressive monetary policy campaign. The Dow Jones Industrial Average dipped 0.8%, or 260 points, and the bond market tanked, with the yield on 10-year U.S. Treasury notes rising six basis points to 3.56%.</p>



<h2 class="wp-block-heading">WHAT TO WATCH FOR</h2>



<p>How a sustained increase in oil prices impacts U.S. gas prices. The average price of gas skyrocketed over $5 per gallon earlier this year as the cost of oil surged, but has fallen off significantly in recent months, with AAA&nbsp;<a href="https://gasprices.aaa.com/" target="_blank" rel="noreferrer noopener">reporting</a>&nbsp;a $3.40 average per gallon Monday.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.nytimes.com/2022/12/04/world/europe/russia-oil-cap-zelensky.html" target="_blank" rel="noreferrer noopener">The Kremlin’s defiance adds to questions over whether the price cap will work.</a> (<em>New York Times</em>)</p>



<p><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


Oil Surges As Russian Oil Price Cap Kicks In—Here’s How High Experts Predict It Could Go


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Apple shares tumbled Wednesday amid a broader market gain due to a report on lowered iPhone 14 production, shedding about $50 billion in market capitalization, but analysts say the dip is an unnecessary knee jerk reaction and retain a strong view on the current iPhone cycle.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>Apple stock fell by as much as 4.4% to $145.03, a two-month low, in Wednesday morning trading after Bloomberg&nbsp;<a href="https://www.bloomberg.com/news/articles/2022-09-28/apple-iphone-14-sales-not-strong-enough-to-trigger-production-boost" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;the company backed off plans to ramp up iPhone 14 production by as many as six million units in the second half of 2022 due to faltering demand.</p>



<p>However, Bloomberg reported Apple still expects to match its goal to produce 90 million iPhone 14 units in the second half of the year, <a href="https://www.bloomberg.com/news/articles/2022-08-11/apple-expects-to-sustain-iphone-sales-in-2022-as-market-slows" target="_blank" rel="noreferrer noopener">in line</a> with its reported estimate in July, and Morgan Stanley and Citi analysts each wrote in Wednesday notes their projections for iPhone demand remained unchanged.</p>



<p>Worries about iPhone 14 demand are “more bark than bite,” Morgan Stanley analysts wrote.</p>



<p>Demand for the pricier iPhone 14 Pro models outpaces demand for the base models, according to Bloomberg, and Wedbush analyst Dan Ives wrote “the iPhone 14 Pro demand is robust and this will enable Apple to power through near-term macro headwinds much better than feared by the Street.”</p>



<p>Apple shares recovered value in later trading, closing down only 1.3%, though Apple was the only company on the Dow Jones Industrial Average down for the day.<img decoding="async" src="https://img.connatix.com/pid-546f0bce-b219-41ac-b691-07d0ec3e3fe1/546f0bce-b219-41ac-b691-07d0ec3e3fe1/1.png" alt=""><img decoding="async" src="https://img.connatix.com/pid-546f0bce-b219-41ac-b691-07d0ec3e3fe1/e8869d3f-0f3e-474a-a43d-be85f87597b4/5f0ba3f9-4a2c-4501-ba59-91685227137f.jpg?crop=390:292,smart&amp;width=390&amp;height=292&amp;format=jpeg&amp;quality=60&amp;fit=crop" alt="3 Big Questions For Milwaukee Bucks’ Training Camp"></p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>Apple shares&nbsp;<a href="https://finance.yahoo.com/losers/" target="_blank" rel="noreferrer noopener">fell</a>&nbsp;more than those of any other large-cap companies in Wednesday trading. Despite Apple’s decline, the Dow Jones Industrial Average, tech-heavy Nasdaq Composite and S&amp;P 500 each rose by more than 1% as the market looks to snap its week-long losing streak. Apple’s stock is down 19% year-to-date, outperforming the S&amp;P 500’s 23% drop in the period.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>Apple <a href="https://www.forbes.com/sites/dereksaul/2022/09/07/apple-launch-new-iphones-watches-airpods/?sh=789800da1287">unveiled</a> the new iPhone models at a September 7 launch event, along with several other products. The company, which produces most of its iPhones in China, <a href="https://www.ft.com/content/d5fc0566-9916-449d-953f-85b4d325bcc0" target="_blank" rel="noreferrer noopener">announced</a> Monday it began to produce some iPhone 14 models in India as the company looks to diversify from political tension and supply chain snags originating in China. Apple will move 5% of iPhone production to India by year’s end and 25% of all iPhone production to the country by 2025, <a href="https://techcrunch.com/2022/09/21/apple-to-move-25-iphone-production-to-india-by-2025-20-ipad-and-apple-watch-to-vietnam/?tpcc=tcplustwitter" target="_blank" rel="noreferrer noopener">according</a> to a report from JP Morgan analysts last week.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.bloomberg.com/news/articles/2022-09-28/apple-iphone-14-sales-not-strong-enough-to-trigger-production-boost" target="_blank" rel="noreferrer noopener">Apple Ditches iPhone Production Increase After Demand Falters</a> (Bloomberg)</p>



<p><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


Apple’s iPhone 14 Series On Sale In China

Apple Stock Plunges 3% On Report About Dampened iPhone Demand—But Analysts Say Drop Is Unwarranted


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Global crude oil prices surged past $100 per barrel on Wednesday for the first time in more than three weeks following a warning by Saudi Arabia that oil-producing nations may have to cut output to deal with the recent drop in prices, amid fears of a global recession.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>The global benchmark Brent Crude Futures index rose to $101.20 per barrel early on Wednesday morning—up nearly 5% since Monday.</p>



<p>The U.S. West Texas Intermediate benchmark has also risen 5.5% since Monday to $94.50 per barrel.</p>



<p>Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman <a href="https://www.bloomberg.com/news/articles/2022-08-22/saudi-prince-says-oil-futures-disconnect-may-force-opec-action?sref=CSMHWBLp#xj4y7vzkg" target="_blank" rel="noreferrer noopener">told</a>Bloomberg earlier this week the OPEC+ group of oil-producing nations may be forced to cut output to deal with “thin liquidity and extreme volatility” in the oil market.</p>



<p><a href="https://www.reuters.com/business/energy/oil-prices-rise-after-saudi-says-opec-could-cut-output-2022-08-23/?taid=63048326d74624000184ae37&amp;utm_campaign=trueAnthem:+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter" target="_blank" rel="noreferrer noopener">According to</a> Reuters, the slashing of output may not take place immediately but will instead happen once Iran returns to the global oil markets after securing a nuclear deal with the West.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>OPEC+’s oil output in July was already 2.9 million barrels per day below its target, Reuters&nbsp;<a href="https://www.reuters.com/markets/commodities/opec-missed-output-targets-by-29-mln-bpd-july-sources-say-2022-08-22/" target="_blank" rel="noreferrer noopener">reported</a>, citing unnamed sources. It is unclear if this purported deficit would impact the bloc’s plan to cut back on production.</p>



<h2 class="wp-block-heading">BIG NUMBER</h2>



<p>$3.883. That is the current average national price per gallon of gasoline according to the American Automobile Association’s <a href="https://gasprices.aaa.com/" target="_blank" rel="noreferrer noopener">tracker</a>, down from a high of $5 per gallon in June. The steep drop in prices has been chiefly attributed to the slump in global crude prices.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.reuters.com/markets/commodities/opec-missed-output-targets-by-29-mln-bpd-july-sources-say-2022-08-22/" target="_blank" rel="noreferrer noopener">OPEC+ missed output targets by 2.9 million barrels per day in July, sources say</a>&nbsp;(Reuters)</p>



<p><a href="https://www.cnbc.com/2022/08/23/oil-markets-price-rise-saudi-arabia-opec-output-supply.html" target="_blank" rel="noreferrer noopener">Oil rises as Saudi Arabia hints at possible output cut</a> (CNBC)</p>



<p><strong><em>By Siladitya Ray, Forbes Staff</em></strong></p>


Crude Oil Prices Climb Above $100 After OPEC Warns Of Output Drop


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Shares of videoconferencing service Zoom, one of 2020’s pandemic-era stock market darlings, have continued to struggle this year, plunging 15% on Tuesday after several Wall Street analysts downgraded the stock amid concerns that the company faces slowing revenue growth.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>A day after reporting quarterly&nbsp;<a href="https://www.globenewswire.com/news-release/2022/08/22/2502515/0/en/Zoom-Video-Communications-Reports-Financial-Results-for-the-Second-Quarter-of-Fiscal-Year-2023.html" target="_blank" rel="noreferrer noopener">earnings</a>&nbsp;that underwhelmed investors, Zoom’s stock fell over 15% to under $82 per share, adding to already significant losses so far this year.</p>



<p>The videoconferencing platform missed on revenue, which came in at $1.10 billion—short of the $1.12 analysts were hoping for.</p>



<p>Revenue grew at an annual rate of 8%, but slowed from 12% in the previous quarter, while net income fell to $45.7 million compared to nearly $317 million a year ago as the company spent more on sales and marketing.</p>



<p>Management cited the negative impact of a strong U.S. dollar on revenue in the most recent quarter, while executives also warned of “macro dynamics” and challenging economic conditions as the company slashed its financial outlook for the rest of the year.</p>



<p>BTIG analysts on Tuesday downgraded shares of the video platform to a “neutral” from a “buy” rating, warning that the recent pullback in profitability and cash flow is “somewhat concerning as top-line growth slows further.”</p>



<p>Analysts at Citi similarly slashed their outlook for Zoom shares to a sell rating from neutral as the company faces increased competition, while also warning about economic pressures on small and medium-size businesses who use the product.</p>



<h2 class="wp-block-heading">SURPRISING FACT</h2>



<p>Zoom is among the worst-performing stocks in the tech-heavy Nasdaq Composite index, which is down 21% this year in comparison. Other pandemic-era darlings—such as Peloton, Teladoc and Roku—have similarly struggled, all losing more than 60% so far in 2022.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>After surging over 400% in 2020 as business turned to videoconferencing services during stay-at-home mandates amid the pandemic, Zoom’s stock has since struggled, falling roughly 45% in 2021 and now down more than 55% so far in 2022.&nbsp;</p>



<h2 class="wp-block-heading">WHAT TO WATCH FOR</h2>



<p>The company has seen “ongoing success” in its Enterprise business segment—with over 204,000 customers, which is up 18% from last year, BTIG analysts point out. But that progress has been “overshadowed” by high-single-digit declines in the company’s online business, as well as “continued pressure” in emerging markets, the analysts led by Matt VanVliet wrote on Tuesday. Given the uncertain economic climate, the firm is warning that the stock could struggle further amid Zoom’s “significantly reduced near-term expectations.”</p>



<h2 class="wp-block-heading">BIG NUMBER: NEARLY $700 MILLION</h2>



<p>That’s how much Zoom founder Eric Yuan’s fortune declined on Tuesday as shares of his videoconferencing company fell. Yuan’s&nbsp;<a href="https://www.forbes.com/profile/eric-yuan/?sh=5ef6090461bf">net worth</a>&nbsp;now sits at $4.5 billion, down from a peak of nearly $15 billion last year, according to&nbsp;<em>Forbes</em>’ calculations.</p>



<h2 class="wp-block-heading">FURTHER READING:</h2>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/22/netflix-is-now-the-worst-performing-stock-in-sp-500-as-shares-plunges-over-60-in-2022/">Netflix Is Now The Worst-Performing Stock In The S&amp;P 500 As Shares Plunge Over 60% In 2022</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/22/dow-falls-400-points-as-experts-warn-bear-market-rally-is-grinding-to-a-halt/">Dow Falls Over 600 Points As Experts Warn Bear Market Rally Is ‘Grinding To A Halt’</a>&nbsp;(<em>Forbes</em>)</p>



<p><em><strong>By Sergei Klebnikov, Forbes Staff</strong></em></p>


In this photo illustration a Zoom Video Communications logo

Zoom Shares Sink 15% After ‘Concerning’ Earnings Miss, Analysts Downgrade The Stock


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Several Wall Street experts are warning that despite moving higher in recent weeks, the stock market still has further to fall—with recent gains likely to be nothing more than a “bear market rally,” as investor concerns about Fed rate hikes and slowing economic growth continue to weigh on markets.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>Despite an earnings season marked by profit warnings from major companies, the stock market has risen significantly from its low point on June 16, with the S&amp;P 500 gaining roughly 12% and rallying for the last three weeks in a row.&nbsp;</p>



<p>With stocks starting to recover from a brutal selloff in the first half of the year, investors are now debating whether recent gains are merely a bear market rally—with stocks set to hit new lows—or the start of a new bull market.</p>



<p>Analysts at Bank of America argue that it’s “premature to declare a ‘big low’ in the market,” predicting more downside ahead and advising investors to remain “tactically cautious,” especially as the Federal Reserve continues to hike interest rates for the foreseeable future.</p>



<p>The firm describes that many traditional indicators of a market bottom are yet to be triggered—such as rising unemployment, the Federal Reserve starting to lower interest rates, a slowdown in profit estimates and a decline in the two-year Treasury yield.</p>



<p>What’s more, the last three market lows occurred after investors began to sell stocks, which hasn&#8217;t happened just yet: Since the end of June, clients have been net buyers of equities rather than sellers, according to Bank of America.</p>



<p>The unexpectedly&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/05/stocks-fall-despite-strong-jobs-report-as-investors-fear-bigger-fed-rate-hikes/">strong jobs report</a>&nbsp;last Friday, which investors worry will embolden the Fed to continue aggressively raising rates, also signals that the “recent bear market rally” will soon come to an end, according to LPL chief global strategist Quincy Krosby.</p>



<h2 class="wp-block-heading">WHAT TO WATCH FOR:</h2>



<p>The optimism about inflation peaking and a looming “Fed pivot”—where the central bank pulls back from its aggressive tightening of monetary policy—is certainly “<a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/02/heres-why-more-fed-officials-are-warning-that-the-market-is-getting-ahead-of-itself/?sh=56e9a86833d1">overdone</a>,” while “nonsensical behaviors” are also returning to the market, according to Vital Knowledge founder Adam Crisafulli. Both factors should “temper” investors’ near-term enthusiasm as they suggest further downside risks—though on the bright side, the U.S. economy is proving “more resilient than it’s being given credit for.”</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE:</h2>



<p>“Investors are increasingly in a game of tug-of-war over bullish and bearish talking points,” says Nationwide chief of investment research Mark Hackett. “Confusion is driving investor decisions,” which generally leads to “directionless volatility,” he warns.</p>



<h2 class="wp-block-heading">TANGENT:</h2>



<p>What can investors do if the market does hit new lows? “Use bear market rallies to raise cash and rotate into higher quality assets,” according to analysts at Bank of America. “Keep dividend and bond coupon reinvestments paused and use tax-loss harvesting techniques ahead of better buying opportunities this year.”</p>



<h2 class="wp-block-heading">FURTHER READING:</h2>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/05/stocks-fall-despite-strong-jobs-report-as-investors-fear-bigger-fed-rate-hikes/">Stocks Under Pressure Despite Strong Jobs Report As Investors Fear Bigger Fed Rate Hikes</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/02/heres-why-more-fed-officials-are-warning-that-the-market-is-getting-ahead-of-itself/">Here’s Why More Fed Officials Are Warning That The Market Is Getting Ahead Of Itself</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/08/bed-bath--beyond-surges-nearly-40-as-retail-traders-pile-back-into-meme-stocks/">Bed Bath &amp; Beyond Surges Nearly 40% As Retail Traders Pile Back Into Meme Stocks</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/03/dow-jumps-400-points-as-stocks-rebound-thanks-to-solid-earnings-upbeat-economic-data/">Dow Jumps 400 Points As Stocks Rebound Thanks To Solid Earnings, Upbeat Economic Data</a>&nbsp;(<em>Forbes</em>)</p>



<p><em><strong>By Sergei Klebnikov, Forbes Staff</strong></em></p>


New York Stock Exchange Opens To Begin The Week

Some Experts Are Warning Of A ‘Bear Market Rally’—Here’s Why Stocks Could Hit New Lows


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Ukraine’s suspension of Russian oil to Eastern Europe sent oil prices soaring Tuesday morning, after Russian oil company Transneft announced Ukraine had not received transfer fees for the oil for nearly a week due to Western sanctions, renewing fears of supply shortages.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p><a href="https://www.marketwatch.com/investing/future/brn00?countrycode=uk" target="_blank" rel="noreferrer noopener">Brent Crude Oil</a>&nbsp;shot up 1.13% Tuesday morning, hitting $97.78 per barrel, while&nbsp;<a href="https://www.cnbc.com/quotes/@CL.1" target="_blank" rel="noreferrer noopener">West Texas Intermediate</a>&nbsp;increased 1.3%, to $92.06, following the announcement from&nbsp;<a href="https://www.forbes.com/companies/transneft/?sh=670e78d23771">Transneft</a>, Russia’s pipeline monopoly.</p>



<p>Transneft wrote in a statement obtained by <a href="https://www.reuters.com/business/energy/russia-suspends-oil-exports-via-southern-leg-druzhba-pipeline-due-transit-2022-08-09/" target="_blank" rel="noreferrer noopener">Reuters</a> that it had paid a transfer fee to Ukraine, but the money was returned because of European Union sanctions against Russia for its ongoing invasion of Ukraine.</p>



<p>Ukraine’s decision to halt Russian oil affects the southern leg of the Druzhba pipeline, which feeds Hungary, Slovakia and the Czech Republic, according to Transneft.</p>



<p><a href="https://www.worldometers.info/oil/hungary-oil/" target="_blank" rel="noreferrer noopener">Hungary</a>’s oil reserves now sit at 28.6 million barrels, leaving it with enough oil for one year of consumption, while the&nbsp;<a href="https://www.worldometers.info/oil/czechia-oil/#:~:text=as%20of%202016).-,Oil%20Imports,barrels%20per%20day%20in%202016)." target="_blank" rel="noreferrer noopener">Czech Republic</a>&nbsp;has 15 million barrels (less than a year) and&nbsp;<a href="https://www.worldometers.info/oil/slovakia-oil/#:~:text=as%20of%202016).-,Oil%20Imports,barrels%20per%20day%20in%202016)." target="_blank" rel="noreferrer noopener">Slovakia</a>&nbsp;has 9 million barrels in reserves (less than a year), according to the site Worldometer.</p>



<p>The Czech Republic imported 3,417 kilotons (2.2 million barrels) of Russian oil in 2021, more than it imported from any other country, <a href="https://www.mpo.cz/en/energy/statistics/oil-and-oil-products/statistics-of-crude-oil-imports-to-the-czech-republic--260434/#:~:text=In%202021%2C%20crude%20oil%20was,oil%20pipelines%2C%20partly%20by%20rail." target="_blank" rel="noreferrer noopener">according to</a> Czech Ministry of Industry and Trade.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>The news came amid a steady two-month decline in gas prices, which had momentarily assuaged fears of a pending recession in Europe (Brent crude prices had been declining since it hit a $123.58 peak on June 22). The European Union has also been embracing a potential energy shortage as Russia threatens to cut off oil and gas supplies to the West. Speaking to member countries in a conference last month, European Union Commission President Ursula von der Leyen pushed for a&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2022/07/20/russia-is-blackmailing-us-eu-plans-gas-reduction-as-putin-threatens-shutoff/?sh=2c8055492534">15% cut</a>&nbsp;in gas use through March, in response to a shutoff of Russian gas — which she called a “likely scenario.” The plea came a week after Russia&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2022/07/11/russia-shuts-down-gas-pipeline-for-maintenance-europe-holds-breath-worried-it-wont-re-open/?sh=8597eeedd88e">shut down</a>&nbsp;the Nord Stream I pipeline for maintenance, sparking fears a routine measure could be prolonged into a long-term closure in response to Western sanctions. The pipeline has since been&nbsp;<a href="https://www.forbes.com/sites/roberthart/2022/07/21/russia-restarts-key-gas-pipeline-to-europe-after-fears-moscow-would-keep-taps-closed/?sh=68920e113a93">restarted</a>. In June, the EU&nbsp;<a href="https://www.csis.org/analysis/european-union-imposes-partial-ban-russian-oil#:~:text=A1%3A%20On%20June%203%2C%20the,as%20of%20February%205%2C%202023." target="_blank" rel="noreferrer noopener">adopted</a>&nbsp;a round of sanctions (the sixth overall) targeted at Russian oil, with embargoes starting Dec. 5 on crude oil, and Feb. 5, 2023 on petroleum products — with an exemption from oil imported via pipeline.</p>



<h2 class="wp-block-heading">TANGENT</h2>



<p>On Monday, the European Union&nbsp;<a href="https://www.theguardian.com/world/2022/aug/08/eu-submits-final-text-talks-2015-iran-nuclear-deal-revival-tehran-washington" target="_blank" rel="noreferrer noopener">released</a>&nbsp;a final draft to revive a 2015 nuclear deal with Iran, in hopes of restoring Iranian crude exports to 2018 levels, when former United States President Donald Trump reneged on the deal.</p>



<h2 class="wp-block-heading">BIG NUMBER</h2>



<p>250,000. That’s how many barrels of oil Russia typically supplies through the southern leg of the Druzhba pipeline per day, Reuters reported.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/ianpalmer/2022/07/28/russia-threatens-eu-reduces-us-industry-helps-to-untangle-the-natural-gas-war-in-europe/?sh=175004d12186">Russia Threatens, EU Reduces, US Industry Helps To Untangle The Natural Gas War In Europe.&nbsp;</a>(Forbes)</p>



<p><a href="https://www.forbes.com/sites/brianbushard/2022/07/20/russia-is-blackmailing-us-eu-plans-gas-reduction-as-putin-threatens-shutoff/?sh=2c8055492534">‘Russia Is Blackmailing Us’: EU Plans Gas Reduction As Putin Threatens Shutoff</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2022/07/22/germany-bails-out-energy-giant-uniper-in-latest-sign-of-deepening-european-energy-crisis/?sh=800273a53ad8">Germany Bails Out Energy Giant Uniper In Latest Sign Of Deepening European Energy Crisis </a>(Forbes)</p>



<p><strong><em>By Brian Bushard, Forbes Staff</em></strong></p>


Oil Prices Moving Down

Oil Prices Jump As Russian Oil Supplies Halted To Eastern Europe


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>The stock market was mixed Friday after the U.S. economy added back a better-than-expected 528,000 jobs in July, with investors now anticipating that a strong labor market will keep the Federal Reserve on its path of aggressive interest rate hikes to bring down inflation.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>The Dow Jones Industrial Average rose 0.2%, nearly 100 points, while the S&amp;P 500 fell 0.2% and the tech-heavy Nasdaq Composite dropped 0.5%.</p>



<p>The S&amp;P 500 fell despite a strong non-farm payrolls <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" target="_blank" rel="noreferrer noopener">report</a>: The labor market added back 528,000 jobs in July—easily surpassing the 258,000 expected by analysts, according to the Bureau of Labor Statistics on Friday.</p>



<p>Unemployment ticked down to 3.5%, while wage growth continued to rise, up 0.5 percentage points from the previous month and over 5 points higher than a year ago, signaling that inflation pressures continue to remain.&nbsp;</p>



<p>With the labor market still running hot, investors now worry that the latest data means that the Federal Reserve will continue to aggressively raise interest rates in an effort to bring down high inflation.</p>



<p>Following the jobs report, traders are now pricing in another 75 basis point rate increase at the central bank’s next meeting in September, up from previous expectations of a 50 basis point increase, according to CME Group data.</p>



<p>“The knee-jerk reaction” in markets is clearly negative, as the market “picked up a head of steam” in recent weeks based on a view that the Fed was on the cusp of a monetary pivot, “but that clearly isn’t happening anytime soon based on this labor report,” says Vital Knowledge founder Adam Crisafulli.</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE:</h2>



<p>“We don’t add 528k jobs in a month when we’re in a recession. … That’s the good news,” says Cliff Hodge, chief investment officer at Cornerstone Wealth. “The bad news for markets is that strength in the labor market and the broader economy will keep the Fed on a more aggressive hiking path, especially with wages being so hot.”</p>



<h2 class="wp-block-heading">TANGENT:</h2>



<p>Shares of Tesla fell over 6% after shareholders approved a <a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/04/teslas-31-stock-split-wins-shareholder-approval-heres-what-it-means-for-investors/?sh=110a75d9efdc">3:1 stock split late</a> on Thursday. It is the company’s second stock split in roughly two years: The move is meant to make its shares more affordable to retail investors, which often helps provide a short-term boost to the share price. Tesla’s stock has rallied over 30% since announcing the stock split in June, though it’s still down roughly 25% so far in 2022 amid the wider market selloff.</p>



<h2 class="wp-block-heading">FURTHER READING:</h2>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/04/teslas-31-stock-split-wins-shareholder-approval-heres-what-it-means-for-investors/">Tesla’s 3:1 Stock Split Wins Shareholder Approval—Here’s What It Means For Investors</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/03/dow-jumps-400-points-as-stocks-rebound-thanks-to-solid-earnings-upbeat-economic-data/">Dow Jumps 400 Points As Stocks Rebound Thanks To Solid Earnings, Upbeat Economic Data</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/02/heres-why-more-fed-officials-are-warning-that-the-market-is-getting-ahead-of-itself/">Here’s Why More Fed Officials Are Warning That The Market Is Getting Ahead Of Itself</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/sergeiklebnikov/2022/08/02/us-and-chinese-stocks-plunge-as-tensions-escalate-before-pelosis-visit-to-taiwan/">Dow Falls 400 Points Amid U.S.-China Tensions After Pelosi’s Visit To Taiwan</a> (<em>Forbes</em>)</p>



<p><strong><em>By Sergei Klebnikov, Forbes Staff</em></strong></p>


Category: Markets