Financial Management: The Next Area for Innovation in Serving Seniors

Financial Management: The Next Area for Innovation in Serving Seniors

With 10,000 people turning 65 each individual working day in the U.S., People in america aged 65 and more mature now keep more than 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of all U.S. prosperity. It is no speculate seniors are prime targets for scammers and swindlers. An skilled at the University of Michigan estimates that “about 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} have mild cognitive impairment while about 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} have dementia.” For these seniors — nearly 20 million — the chore of correctly and promptly paying charges may perhaps be tense and challenging to execute effectively. Medicare Edge (MA) ideas, accountable treatment businesses, extensive-phrase care insurers, Medicaid residence and community-primarily based companies, and other folks with a financial curiosity in preserving the independence of seniors can advantage from helping seniors in their financial jobs.

Powerful private fiscal management is essential for preserving property and keeping independence. This is ever more crucial as the cost of health and fitness treatment continues to raise. Even with Medicare, 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of seniors pay back a lot more than $2,000 a year in out-of-pocket well being care costs. As the nation’s senior population carries on to grow, all those who care for seniors can tackle fraud and cognitive impairment by investing in financial management providers that increase independence for seniors by reliably paying their expenditures.

Reports clearly show that money management providers can also decrease overall health-connected expenditures. In just a single illustration, the Brookdale Heart for Balanced Aging & Longevity analyzed the worth and expenses of daily income administration plans (DMM). The investigation located DMM plans to be value-efficient in extending unbiased living and staving off highly-priced custodial treatment solutions, these as nursing household placement. DMM/scenario administration courses save an approximated $60,000 per personal in contrast with nursing household placement in the course of the Medicare beneficiary’s life time. This is for the reason that men and women with DMM expert services continue being in their households and communities extended and sustain a increased high quality of daily life.

Roughly 80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of people with Alzheimer’s ailment and connected dementias acquire treatment in their houses from family members or pal-of-family members caregivers. In 2020, the economical administration company, SilverBills, was chosen to husband or wife with AARP to carry out exploration research that explored the frame of mind of caregivers for more mature adults with regard to financial administration. Caregivers generally practical experience intense tension involved with taking care of the lives of their loved ones — 40-70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} put up with from caregiver strain syndrome, in accordance to one particular resource. Caregiver stress syndrome is a problem characterized by physical, mental and psychological exhaustion, and it has a important effects on the life of individuals who acquire care of their beloved types. It can influence not only the extended-phrase wellbeing and wellness of the caregiver but also the well being and wellness of the individual. Money management solutions can enable handle caregivers’ disappointment with the too much to handle demands of their liked types by delivering an missed nonetheless necessary gain for the sufferers.

Encouraging seniors with their personalized finances by paying their costs in accordance to their needs is a reasonably new services. Proof exhibits that these money management products and services straight increase the overall health and effectively-becoming of seniors and their caregivers. Some economical management company corporations have acquired the patronage of nearby governments and prestigious funders, including the Nationwide Institutes of Well being and AARP. It is time for wellbeing programs, notably MA strategies, to shell out consideration as perfectly.

Photograph: Olga Shumitskaya, Getty Images

Brexit has cracked Britain’s economic foundations

Brexit has cracked Britain’s economic foundations


London
CNN
 — 

It’s been two years since former Prime Minister Boris Johnson signed his Brexit trade deal and triumphantly declared that Britain would be “prosperous, dynamic and contented” after completing its exit from the European Union.

The Brexit deal would enable UK companies to “do even more business” with the European Union, according to Johnson, and would leave Britain free to strike trade deals around the world while continuing to export seamlessly to the EU market of 450 million consumers.

In reality, Brexit has hobbled the UK economy, which remains the only member of the G7 — the group of advanced economies that also includes Canada, France, Germany, Italy, Japan and the United States — with an economy smaller than it was before the pandemic.

Years of uncertainty over the future trading relationship with the European Union, Britain’s largest trading partner, have damaged business investment, which in the third quarter was 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} below pre-pandemic levels despite a UK-EU trade deal being in place for nearly two years.

And the pound has taken a beating, making imports more expensive and stoking inflation while failing to boost exports, even as other parts of the world have enjoyed a post-pandemic trade boom.

Brexit has erected trade barriers for UK businesses and foreign companies that used Britain as a European base. It’s weighing on imports and exports, sapping investment and contributing to labor shortages. All this has exacerbated Britain’s inflation problem, hurting workers and the business community.

“The most plausible reason as to why Britain is doing comparatively worse than comparable countries is Brexit,” according to L. Alan Winters, co-director of the Centre for Inclusive Trade Policy at the University of Sussex.

The sense of gloom hanging over the UK economy is captured by striking workers, who are walking out in ever larger numbers over pay and conditions as the worst inflation in decades eats into their wages. At the same time, the government is cutting spending and hiking taxes to fill the hole in its budget.

While Brexit isn’t the cause of Britain’s cost-of-living crisis, it has made the problem more difficult to solve.

“The UK chose Brexit in a referendum, but the government then chose a particularly hard form of Brexit, which maximized the economic cost,” said Michael Saunders, a senior adviser at Oxford Economics and former Bank of England official. “Any hope for economic upside from Brexit is pretty much gone.”

NHS nurses strike over pay outside St Thomas' Hospital in London on December 20, 2022.

Although Britain voted to leave the European Union in June 2016, its exit from the single market and customs union was finalized only on December 24, 2020, when the two sides finally agreed a free trade deal.

The Brexit deal, known as the Trade and Cooperation Agreement, came into effect on January 1, 2021.

It eliminated tariffs on most goods but introduced a raft of non-tariff barriers, such as border controls, customs checks, import duties and health inspections on plant and animal products.

Before Brexit, a farmer in Kent could ship a truckload of potatoes to Paris just as easily as they might send it to London. Those days are no more.

“We hear stories every single day from small businesses about the nightmare of forms, transportation, couriers, things getting stuck for weeks at a time… the epic length of the problems is just gobsmacking,” said Michelle Ovens, the founder of Small Business Britain, a campaign group.

“The way things have panned out in the last two years has been really bad for small businesses,” Ovens told CNN.

Researchers at the London School of Economics estimate that the variety of UK products exported to the European Union declined by 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during the first year of Brexit. They said that this was likely because small exporters had exited small EU markets.

Take the example of Little Star, a UK company that makes jewelry for children. Its business took off in the Netherlands and it had plans to expand to France and Germany next. But since Brexit, only two of more than 30 of its Dutch customers are prepared to handle the costs and paperwork to obtain stock from the company.

Products that took two days to ship are now taking three weeks, while import duties and sales taxes have made it much harder to compete with European jewelers, according to Rob Walker, who co-founded the business with his wife, Vicky, in 2017. The company is now looking to the United States for growth opportunities.

“Isn’t it mad that we have to look to the other side of the Atlantic to do business, because it’s so difficult to do business with people 30 miles away?” Walker said.

A truck passes a Union Jack, at the Port of Dover on April 1, 2021. The UK government has delayed post-Brexit checks on EU food imports until the end of 2023.

A British Chambers of Commerce survey of more than 1,168 businesses published this month reported that 77{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} said Brexit has not helped them increase sales or grow their businesses. More than half said they were finding it difficult to adapt to the new rules for trading goods.

Siteright Construction Supplies, a manufacturer in Dorset, told the Chamber that importing parts from the European Union to fix broken machines has become a costly and “time-consuming nightmare.”

“Brexit has been the biggest-ever imposition of bureaucracy on business,” according to Siteright.

Nova Dog Chews, a producer of snacks for canines, said it would have lost all its EU trade had it not set up a base in the bloc. “This has cost our business a huge amount of money, which could have been invested in the UK had it not been for Brexit,” it added.

A UK government spokesperson told CNN that the government’s export support service has provided exporters with “practical support” on the implementation of the Brexit deal. The deal is “the world’s largest zero tariff, zero quota free trade deal,” the spokesperson added. “It secures the UK market access across key service sectors and opens new opportunities for UK businesses across the globe.”

Britain won’t easily replace what it has lost by forfeiting unfettered access to the world’s largest trading bloc.

The only substantive new trade deals it has struck since exiting the European Union, which did not simply roll over the deals it had as an EU member, have been with Australia and New Zealand. By the government’s own estimate, these will have a negligible impact on the UK economy, increasing GDP in the long run by just 0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 0.03{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} respectively.

By contrast, the UK Office for Budget Responsibility, which produces economic forecasts for the government, expects Brexit to reduce Britain’s output by 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over 15 years compared to remaining in the bloc. Exports and imports are projected to be around 15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower in the long run.

Initial data has borne this out. According to the OBR, in the fourth quarter of 2021, UK goods export volumes to the European Union were 9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} below 2019 levels, with imports from the European Union 18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower. Goods exports to non-EU countries were 18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} weaker than in 2019.

The United Kingdom “appears to have become a less trade-intensive economy, with trade as a share of GDP falling 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} since 2019, two and a half times more than in any other G7 country,” the OBR said in the March report.

The decline in exports to non-EU countries could be a sign that UK businesses have become less competitive as they battle higher supply chain costs following Brexit, according to Jun Du, an economics professor at Aston University in Birmingham.

“The UK’s trading ability has been damaged permanently [by Brexit],” Du told CNN. “It doesn’t mean it can’t recover, but it’s been set back for a number of years.”

Research by the Centre for European Reform, a think tank, estimates that over the 18 months to June 2022, UK goods trade is 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower than it would have been had Britain remained in the European Union.

Investment is 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} weaker and GDP is 5.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} smaller than it would have been, costing the economy £40 billion ($48.4 billion) in tax revenues annually. That’s enough to pay for three quarters of the spending cuts and tax rises that UK finance minister Jeremy Hunt announced in November.

The United Kingdom is projected to have one of the worst performing economies next year among developed nations.

The Organization for Economic Cooperation and Development expects the UK economy to shrink by 0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, ahead only of sanctioned Russia. GDP in Germany is forecast to be 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} smaller.

The International Monetary Fund forecasts growth of just 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for UK GDP next year, ahead of only Germany, Italy and Russia, which are expected to contract.

Both institutions say high inflation and rising interest rates will weigh on spending by consumers and businesses in Britain.

According to the Confederation of British Industry, a leading business group, the fall in private sector activity picked up pace in December and has now declined for five consecutive quarters.

The downward trend “looks set to deepen” in 2023, principal economist at the CBI Martin Sartorius said in a statement.

“Businesses continue to face a number of headwinds, with rising costs, labor shortages, and weakening demand contributing to a gloomy outlook for next year. ”

— Julia Horowitz contributed to this report.

‘Diversity within the financial industry matters’

‘Diversity within the financial industry matters’

Just one way to shrink the racial wealth hole may be by expanding obtain to economic professionals who Black People can identify with, although serving to them to expand their cash.

That’s the takeaway from Kamila Elliott, CEO of Collective Prosperity Partners, who is about to comprehensive her one-year phrase as the to start with Black board chair of the CFP Board, which sets and enforces benchmarks for the licensed money planner certification.

“Having cultural sensitivity, comprehending the load of remaining the very first person in the family to be economically effective, spouse and children responsibility, and the nuances of wealth with 1st-generation creators are why diversity in the financial marketplace matters,” Elliott informed Yahoo Dollars.

The dilemma is that Black CFPs represent only 1.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of all CFPs, even however almost two-thirds of Black Us residents would like a money advisor of the very same race, in accordance to the Ariel-Schwab Black trader study.

Kevin Keller, Kamila Elliott, LeCount R. Davis Sr.

Kevin Keller, Kamila Elliott, LeCount R. Davis Sr. (Credit rating: CFP Board)

“There’s an inherent absence of trust with people today of colour when it arrives to the economic industry owing to a absence of economical literacy — making us simple prey,” Elliott reported.

For instance, the Ariel-Schwab Black investor study located that Black Individuals are fewer trusting of the inventory marketplace and fiscal establishments than white Us citizens. And Black buyers are far more probably to trust social media to make investment decision choices, specially those people beneath 40.

“People even now hold cash in the residence simply because they do not rely on the lender, but change to economical ‘influencers’ that are not held to any standards or accountability and no one particular is kicking the tires to see if this individual is accredited or licensed,” Elliott included.

There is also a absence of access. Obtaining a monetary planner to navigate investing is harder if an trader has smaller sums to invest. Now, with robo-advisors like Fidelity Go, it’s easier to get started investing at a considerably lower threshold.

On the other hand, a robo advisor is not the exact same as a fiscal advisor or money planner. A good fiscal planner develops a holistic system that incorporates budgeting, estate and retirement arranging, economical planning, and has a fiduciary responsibility to clientele.

“The target of the CFP Board is to serve the public by delivering skilled ethical scheduling and making sure that CFP industry experts are held to the maximum specifications,” Elliott reported. “The CFP Board’s Let’s Make a Approach web-site can help shoppers discover a fiscal planner, like individuals that particularly want to help men and women setting up off.”

Couple meeting with lawyer

Credit history: Getty Photographs

The CFP Board gives methods to buyers, lots of professional bono, by means of its Center for Monetary Setting up. There’s also CFP Pro, which attributes youthful, varied CFPs achieving youthful generations.

The CFP Board is also working to broaden its ranks of Black CFPs.

For occasion this 12 months, the CFP Board introduced the LeCount Davis Sr. endowed scholarship for African American pupils and gurus who want to get CFP certification and apply financial organizing named following the 1st Black CFP

“First, they said we didn’t have the schooling and would not take into account graduates from HBCUs — historically Black schools and universities — when most of the professors at HBCUs are Ivy educated,” Davis, who initially turned a CFP in 1978, advised Yahoo Dollars. “Then they claimed, we didn’t have the experience, but we never have encounter because they won’t hire us or give us an possibility. The CFP endowed scholarship is to bridge the encounter hole.”

To boost diversity in the subject of money scheduling, the CFP Board has scholarships that address the class and take a look at costs for the CFP test and in 2022 gave around $500,000 in scholarships to experts of color, Elliott explained.

That really should assistance more aspiring Black money planners abide by in Davis’ footsteps.

“My spouse and children was inadequate fiscally and I was the very first in my family to graduate from large university,” Davis mentioned. “When I been given an athletic scholarship for school, the whole community gave me a parade send off since I represented their hopes and dreams. I was a product of the village and it manufactured them happy.”

Ronda is a private finance senior reporter for Yahoo Dollars and attorney with experience in law, insurance plan, education and learning, and govt. Adhere to her on Twitter @writesronda

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The Zacks Analyst Blog Highlights Veritiv, Caterpillar, Arista Networks, First Financial Bancorp and WhiteHorse Finance

The Zacks Analyst Blog Highlights Veritiv, Caterpillar, Arista Networks, First Financial Bancorp and WhiteHorse Finance

For Immediate Release

Chicago, IL – December 23, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Veritiv Corp. VRTV, Caterpillar Inc.’s CAT, Arista Networks Inc. ANET, First Financial Bancorp. FFBC and WhiteHorse Finance Inc. WHF.

Here are highlights from Thursday’s Analyst Blog:

Top 5 Momentum Stocks to Gain from a Possible Santa Rally

Wall Street is heading toward completing a terrible 2022. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 8.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, 18.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 31.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively. Major indexes are set to terminate a three-year winning streak and record the worst yearly performance since 2008.

Market participants are busy analyzing whether a year-end rally in Wall Street — popularly known as Santa Claus rally — will materialize this year. U.S. stock markets tumbled in the last two weeks, although the Fed reduced the magnitude of its interest rate hike in the December FOMC meeting. However, Fed Chairman Jerome Powell’s hawkish comments for next year unnerved investors.

Recent Positives

Despite headwinds, we believe a Santa Clause rally is likely this year. Peak inflation seems behind us. Less-than-expected inflation rates in October and November with respect to several measures have clearly indicated this.

On Dec 21, the Conference Board reported that Consumer Confidence in December came in at 108.3, marking its highest reading since April. The consensus estimate was 101.2. November’s data was revised upward to 101.4 from 100.2 reported earlier. A similar type of metric, the preliminary data of consumer sentiment  for December reported by the University of Michigan, also showed the same type of results.

Consumers’ 12-month inflation expectations fell to 6.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in December from 7.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} last month, marking the lowest level since September. The present situation index, based on consumers’ assessment of current business and labor market conditions, rose to 147.2 in December from 138.3 last month.

The expectations index, based on consumers’ short-term outlook for income, business, and labor market conditions, increased to 82.4 in December from 76.7 in November.

In fact, economic indicators like a tepid housing sector, declining commodity prices (except food and energy), growing accumulation of inventories on the part of manufacturers and retailers, a gradual slowdown of the ISM manufacturing PMI and retail sales along with a decline in the job openings rate are all pointing to the cooling down of the U.S. economy.

For this reason, the Fed may loosen its monetary tightening in 2023. The U.S. stock market is highly oversold. Stocks of several corporate behemoths are currently available at a lucrative valuation. The Dow, the S&P 500 and the Nasdaq Composite – have corrected significantly in December plummeting 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 6.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively. Therefore, at least a pullback rally at the year-end cannot be ruled out.

Stock Selection Process

Momentum investing calls for the continued appraisal of stocks, ensuring that an investor does not pick a beaten-down name or overlook a thriving one. Momentum investors buy high on anticipation that a stock will only ascend in the short to intermediate term. At this stage, momentum stocks with a favorable Zacks Rank are likely to become an ideal combination of investments.

We have narrowed our search to five momentum stocks that have solid upside left for December. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Veritiv Corp. is engaged in offering North American business-to-business distribution solutions. VRTV provides packaging, print and print management, publishing, supply-chain, facility and logistics solutions that span the entire lifecycle of core business operations. VRTV’s customers vary across a number of industries, including manufacturing, healthcare, retail and more.

Veritiv has an expected earnings growth rate of 48.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the current quarter. The Zacks Consensus Estimate for current-quarter earnings has improved 8.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the last seven days.

Caterpillar Inc.’s revenues and earnings grew year over year for seven straight quarters thanks to its cost-saving actions, strong end-market demand and pricing actions that offset the impact of the ongoing supply-chain snarls and cost pressures. We expect CAT’s adjusted earnings per share for 2022 to grow 29.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while revenues are predicted to rise 13.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

The Construction Industries space is expected to benefit from rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment. CAT’s dividend yield and payout ratio are higher than its peers. A strong liquidity position, investments in expanding services and digital initiatives should help Caterpillar deliver outsized returns.

Caterpillar has an expected earnings growth rate of 47.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the current quarter. The Zacks Consensus Estimate for current-quarter earnings improved 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the last seven days.

Arista Networks Inc. develops markets and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANET benefits from the expanding cloud networking market, driven by strong demand for scalable infrastructure. The company recently joined the Microsoft Intelligent Security Association.

Arista Networks continues to gain from solid momentum and diversification across its top verticals and product lines. It is well-poised for growth in the data-driven cloud networking business, with proactive platforms and predictive operations. ANET introduced an enterprise-grade Software-as-a-Service offering for its flagship CloudVision platform.

Arista Networks has an expected earnings growth rate of 47.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the current quarter. The Zacks Consensus Estimate for current-quarter earnings improved 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the last 60 days.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois.

FFBC accepts various deposit products, such as interest-bearing and noninterest-bearing accounts, time deposits, and cash management services for commercial customers. FFBC also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and investor income-producing real estate consisting of apartments, shopping centers, or office buildings.

First Financial has an expected earnings growth rate of 17.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the current quarter. The Zacks Consensus Estimate for current-quarter earnings improved 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the last 30 days.

WhiteHorse Finance Inc. is a business development company focused on originating loans to privately held small-cap companies across a broad range of industries. WHF specializes in originating senior secured loans, lower middle market, growth capital industries. It prefers to invest in the United States. WHF typically invests between $5 million to $25 million in companies having an enterprise value between $50 million and $350 million.

WhiteHorse Finance has an expected earnings growth rate of 33.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the current quarter. The Zacks Consensus Estimate for current-quarter earnings improved 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the last 30 days.

Why Haven’t You Looked at Zacks’ Top Stocks?

Our 5 best-performing strategies have blown away the S&P’s impressive +28.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} gain in 2021. Amazingly, they soared +40.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, +48.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, +67.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, +94.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and +95.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Today you can access their live picks without cost or obligation.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Tesla’s largest-ever decline has short sellers sitting on $15 billion in profits: Morning Brief

Tesla’s largest-ever decline has short sellers sitting on $15 billion in profits: Morning Brief

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Friday, December 23, 2022

Today’s newsletter is by Myles Udland, senior markets editor at Yahoo Finance. Follow him on Twitter @MylesUdland and on LinkedIn. Read this and more market news on the go with the Yahoo Finance App.Yahoo Finance App.

Tesla stock fell another 8.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on Thursday, bringing its year-to-date losses to 64{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

With this decline, more than $800 billion in market capitalization has been erased from the electric carmaker. The current 69.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drawdown from its most recent high reached in late 2021 is the largest in Tesla’s corporate history.

And this slide has been good news to short-sellers.

Data from S3 Partners published Thursday showed that through Wednesday’s close, Tesla was the year’s most profitable short — or stock traders were betting against — with mark-to-market profits totaling $15.03 billion so far this year. And these figures don’t reflect Thursday’s decline.

“In December, TSLA shorts are up $4.54 billion in month-to-date mark-to-market profits, up +33.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on an average short interest of $13.67 billion,” S3 Partners said in its report. “Since Elon Musk’s Twitter bid on 4/14/22, TSLA shorts are up $13.74 billion in mark-to-market profits, up 77.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on an average short internet of $17.74 billion.”

Short interest in Tesla has surged in the last few months and shares have fallen to multi-year lows. (Source: S3 Partners)

Short interest in Tesla has surged in the last few months and shares have fallen to multi-year lows. (Source: S3 Partners)

And the next most-profitable short this year isn’t even close — short-sellers have made $6.2 billion betting against Amazon in 2022, a stock that was down 49.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} so far this year through Thursday’s close.

The notion that Musk’s involvement with Twitter is the predominant issue facing Tesla shares has become a widely held view in recent weeks. Consensus, even.

Wall Street analysts have said Musk “needs to pull it together,” while slashing price targets and downgrading Tesla along the way. Some of Musk’s most ardent defenders have openly begun calling for him to step away from Twitter.

And, to an extent, Musk himself seems to agree, hosting a poll on whether he should step down as Twitter’s chief and saying he will resign the post once a replacement is found.

This is all coming as reports indicate Tesla has brought in leaders from its team in Shanghai to help steady U.S. operations while the company is now offering $7,500 rebates to U.S. customers willing to take delivery of some models before the end of this year.

That Musk’s attention appears to be lacking at Tesla is not news to Musk.

WASHINGTON DC, USA - MARCH 9: Elon Musk, Founder and Chief Engineer of SpaceX, attends the Satellite 2020 Conference in Washington, DC, United States on March 9, 2020. (Photo by Yasin Ozturk/Anadolu Agency via Getty Images)

Elon Musk, Founder and Chief Engineer of SpaceX, attends the Satellite 2020 Conference in Washington, DC, United States on March 9, 2020. (Photo by Yasin Ozturk/Anadolu Agency via Getty Images)

Meanwhile, the Tesla CEO has tweeted at length about the impact tighter monetary policy from the Federal Reserve is having on all financial assets, Tesla included.

Looking at the success of short-sellers this year, there’s little doubt the challenges for markets go beyond the CEO of Tesla having a second job as the CEO at Twitter: Data from S3 Partners also shows shorts are up more than $300 billion in realized and unrealized gains this year.

In a widely-covered exchange on Twitter earlier this week, Musk chided longtime Tesla bull Ross Gerber to read Security Analysis 101 to understand what is happening to Tesla stock.

Musk added in a follow-up tweet: “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.”

As Warren Buffett told Yahoo Finance editor-in-chief Andy Serwer years ago: “Everything in valuation gets back to interest rates.”

At the time of Buffett’s comments back in 2017, investors were perhaps puzzled why stocks continued to rise so aggressively. Rock bottom interest rates were a helpful guide then. Now, investors face the opposite problem — elevated and still-rising rates are crushing financial assets.

Hedge fund titan David Tepper said Thursday he’s still “leaning short” on stocks right now because he believes what central bankers are saying: that interest rates will go higher next year.

For Tesla shorts — and short-sellers across the market — the Fed’s plans may remain welcome news. And Wall Street strategists broadly expect bets against the stock market will still work in the first half of 2023.

If an anticipated recession finally pushes the Fed and other central banks to ease off the accelerator, expect stocks to rebound abruptly. And don’t expect Tesla to be left out.

Of course, none of this is very “Tesla.”

Tesla has been a battleground stock for so many years because the company’s ambitions — and the persona of its CEO — have always seemed to transcend mundane market talking points like Fed policy. Boring stocks, not category-definers like Tesla, get pushed around by central banks.

Though perhaps this market moment is telling us something else about the maturation of Tesla, signaling it is now becoming more like every other stock. And in this way offering the bulls a new story, which is that it might simply start fitting in.

What to Watch Today

Economy

  • 8:30 a.m. ET: Personal Income, month-over-month, November (0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Personal Spending, month-over-month, November (0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Real Personal Spending, month-over-month, November (0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: PCE Deflator, month-over-month, November (0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: PCE Deflator, year-over-year, November (5.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 6.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: PCE Core Deflator, month-over-month, November (0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: PCE Core Deflator, year-over-year, November (4.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 5.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Durable Goods Orders, November Preliminary (-1.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Durables Excluding Transportation, November Preliminary (0.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Non-Defense Capital Goods Orders Excluding Aircraft, November Preliminary (0.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 8:30 a.m. ET: Non-Defense Capital Goods Shipments Excluding Aircraft, November Preliminary (-0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

  • 10:00 a.m. ET: University of Michigan Consumer Sentiment, December final (59.1 expected, 59.1 prior)

  • 10:00 a.m. ET: New Home Sales, November (600,000 expected, 632,000 during prior month)

  • 10:00 a.m. ET: New Home Sales, month-over-month, November (-5.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 7.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

Earnings

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Secure 2.0 clears Congress, will bring changes to retirement system

Secure 2.0 clears Congress, will bring changes to retirement system

Michael Godek | Moment | Getty Images

Three years after the Secure Act of 2019 ushered in the first major changes to the U.S. retirement system in more than a decade, more modifications are now on their way.

Dozens of retirement-related provisions collectively known as “Secure 2.0” are included in a $1.7 trillion omnibus appropriations bill that received approval from the House on Friday — following the Senate’s nod on Thursday — and will head to President Joe Biden for his signature.

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Secure 2.0 “addresses gaps that have left some people on the sidelines of retirement savings, unable to access the workplace retirement plans that do so much good in establishing the capability and habit of savings,” said Susan Neely, president and CEO of the American Council of Life Insurers.

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“Part-time workers, military spouses, small-business employees, and student loan borrowers are just a few who will benefit and have a better chance of positioning themselves for a more financially secure retirement as a result of Congress’s action today,” Neely said.

The Secure 2.0 provisions are intended to build on improvements to the retirement system that were implemented under the 2019 Secure Act. Those changes included giving part-time workers better access to retirement benefits and increasing the age when required minimum distributions, or RMDs, from certain retirement accounts must start — to age 72 from 70½.

Retirement plan changes in the omnibus spending bill

This time around, some of the many provisions that are in the massive appropriations bill include:

  • Requiring automatic 401(k) enrollment: Employers would be required to automatically enroll employees in their 401(k) plan at a rate of least 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} but not more than 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Businesses with 10 or fewer workers and new companies in business for less than three years are among those that would be excluded from the mandate.
  • Increasing the age when RMDs would need to start: The current bill would increase it from age 72 to age 73 in 2023 and then to age 75 in 2033. Additionally, the penalty for failing to take RMDs would be reduced to 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and in some cases, 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, from the current 50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
  • Creating bigger “catch-up” contributions for older retirement savers: Under current law, you can put an extra $6,500 annually in your 401(k) once you reach age 50. Secure 2.0 would increase the limit to $10,000 (or 50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} more than the regular catch-up amount) starting in 2025 for savers ages 60 to 63. Catch-up amounts also would be indexed for inflation. Additionally, all catch-up contributions will be subject to Roth treatment (i.e., not pretax) except for workers who earn $145,000 or less.
  • Broadening employer 401(k) match options: A proposal would make it easier for employers to make contributions to 401(k) plans on behalf of employees paying student loans instead of saving for retirement.
  • Improving worker access to emergency savings: One provision would let employees withdraw up to $1,000 from their retirement account for emergency expenses without having to pay the typical 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} tax penalty for early withdrawal if they are under age 59½. Companies also could let workers set up an emergency savings account through automatic payroll deductions, with a cap of $2,500.
  • Increasing part-time workers’ access to retirement accounts: The original Secure Act made it so part-time workers who book between 500 and 999 hours for three consecutive years could be eligible for their company’s 401(k). Secure 2.0 reduces that to two years. Companies already have been required to grant eligibility to employees who work at least 1,000 hours in a year.
  • Helping workers who are repaying student loans save for retirement: Secure 2.0 makes it easier for employers to make contributions to 401(k) plans (and similar workplace plans) on behalf of employees who are making student loan payments instead of contributing to their retirement plan.
The New Congress, Part 2: Senate
  • Boosting how much can be put in a qualified longevity annuity contract: Currently, the maximum that can go into a QLAC is either $135,000 or 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the value of your retirement accounts, whichever is less. Secure 2.0 eliminates the 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} cap and increases the maximum amount allowed in a QLAC to $200,000.
  • Changing the required minimum distribution rules for Roth 401(k)s: Currently, while Roth IRAs come with no RMDs during the original account owner’s life, that’s not the case for Roth 401(k)s. Starting in 2024, the pre-death distribution requirement would be eliminated.
  • Broadening uses for unused college savings money: A provision would allow for tax- and penalty-free rollovers to Roth IRAs from 529 college savings accounts that are at least 15 years old, within limits.
  • Helping military spouses get access to retirement plans: Secure 2.0 creates tax credits for small businesses that let military spouses enroll right away in their plan and qualify for immediate vesting of any employer matches.

The bill also includes incentives for small businesses to set up retirement savings plans for their workers, encourages individuals to set aside long-term savings and makes it easier for annuities to be an income option for retirees.