How important is the Moody’s downgrade of the US government debt Dow +0.16, S&P 500 -0.08, Nasdaq -0.22
Stocks rose on Monday, as traders tried to move past Moody’s Investors Service lowering its U.S. credit rating outlook to negative from stable.
The S&P 500 added 0.07%, and the Dow Jones Industrial Average rose 100 points to gain 0.3%. The Nasdaq Composite teetered along the flatline.
Leading the S&P 500 gains were DaVita, Insulet and Henry Schein, respectively up 8%, 7% and 6%. Shares of Boeing added more than 4% after Emirates announced a $52 billion order for 95 aircraft, giving the Dow a lift.
Moody’s on Friday underscored the U.S.′ “very large” fiscal deficits and partisan gridlock in Washington as contributing factors for the cut. The ratings agency reaffirmed America’s credit rating at AAA, the highest level. This comes three months after Fitch lowered the U.S. long-term foreign currency issuer default rating to AA+ from AAA, also citing expected fiscal deterioration, an increasing debt burden and political standoffs on fiscal and debt issues.
Does anyone remember the 2023 S&P 500 “earnings” estimated growth 5% $238
Do you think 8%-15% real 8 year growth should equal 125% S&P 500 Stock market growth?=of course NOT=Bubble
3 HOURS AGO
Earnings per share grow in 3Q 2023 for the first time in a year
S&P 500 third-quarter earnings per share have proven resilient, growing for the first time since this time last year, according to Goldman Sachs’ David Kostin.
Earnings per share grew by 4% year over year and was up 10% excluding the energy sector, which was also the worst-performing sector last week.
“Many investors are concerned about downgrades to consensus earnings forecasts, but they are tracking in line with the typical pattern and are being dragged down by Health Care,” Kostin wrote.
The analyst added that he’s maintaining his S&P 500 earnings per share forecasts of $224 in 2023, representing 1% year-over-year growth; $237 in 2024, representing 5% year-over-year growth; and $250 in 2025, representing 5% year-over-year growth.
— Lisa Kailai Han, Michael Bloom
What is the collar trading methodology?= Making up downward movement, converting the profits to more shares, exponential growth when they come back!!!
Why don’t we go to cash?
If an investor were to simply miss the 10 best days in the market, they would have shed over 50% of their end portfolio value. The investor would finish with a portfolio of only $29,708, compared to $64,844 if they had just stayed put.
Making matters worse, by missing 60 of the best days, they would have lost a striking 93% in value compared to what the portfolio would be worth if they had simply stayed invested.
Overall, an investor would have seen almost 10% in average annual returns using a buy-and-hold strategy. Average annual returns entered negative territory once they missed the 40 best days over the time frame.
Do 90% of people lose money in the stock market?
Based on several brokers’ studies, as many as 90% of traders are estimated to lose money in the markets. This can be an even higher failure rate if you look at day traders, forex traders, or options traders
IS IT WORTH THE RISK ???? ABSOLUTELY IF you are protecting with options = That saves you from stocks losing 50, 60 70 or 86.6% of their value
The Big Picture
Last Updated: 10-Nov-23 14:55 ET | Archive
When the consumer’s bark becomes a bite
A lot of retailers will be reporting their quarterly earnings results over the course of the next few weeks. In the midst of those results, we will get the latest retail sales report covering the month of October. Oh, and try as we might, there will be no escaping mention of holiday shopping.
‘Tis the season for the consumer, who will demonstrate if there is actual bite behind the bark of weakening sentiment showing up in surveys and polling data.
That’s no small consideration either. Consumer spending accounts for nearly 70% of GDP, which is to say, as goes the consumer, so goes the economy.
Not Putting Money Where Mouth Is
We know from the advance Q3 real GDP estimate of 4.9% that the consumer went just fine in July, August, and September. Interestingly, consumer sentiment, as measured by the University of Michigan, rose in July but fell in August and September. The same held true for consumer confidence, as measured by The Conference Board.
In brief, consumers weren’t exactly putting their money where their mouth was. They were still spending it — rather freely we might add. Real personal consumption expenditures increased at a seasonally adjusted annual rate of 4.0% in the third quarter, with spending on goods up 4.8% and spending on services up 3.6%.
The overall strength in spending was a surprise, but the continued inclination to spend was not. Between July and September, the unemployment rate ranged from 3.5% to 3.8%, near a 54-year low.
People who are employed are people who spend money. Granted they aren’t always spending money on discretionary items/experiences, because the means to do so just aren’t there. A lot of money is spent only on life’s necessities because, as other reports suggest, a lot of people are living paycheck-to-paycheck.
Now, that could mean some people are spending every dollar they earn, because they can’t resist the temptation of spending on discretionary items/experiences, but it certainly means for others that every dollar earned is spent on rent, food, utilities, insurance, health care, gas, and transportation.
In any case, the spending all goes to the same economic pie and the pie in the third quarter was a Costco-size pie.
Now What?
What happens now is the $22 trillion question.
The market feels hopeful about inflation improving, yet there is an abundance of anecdotal evidence that consumers are feeling the pinch of inflation. Worries about inflation were evident in the November University of Michigan Index of Consumer Sentiment released this week. Year-ahead inflation expectations rose to 4.4% from 4.2%, hitting their highest level since November 2022, while long-run inflation expectations jumped to 3.2% from 3.0%, hitting their highest reading since 2011.
That’s not what the Fed wants to hear, and all else equal, consumers would rather not have to think about it, but inflation pressures are clearly at the forefront of their mind.
Knowing that, there should be a good deal of interest in the upcoming earnings reports from the retailers. Most are now in their seasonally strongest period of the year, so their fiscal fourth quarter guidance will carry some added weight in shaping expectations for consumer spending in the fourth quarter.
What It All Means
Consumers are facing their fair share of challenges, but the continuation of a strong labor market is key to helping them continue to overcome many of the challenges that include the higher cost of living, the resumption of federal student loan payments, and higher credit costs.
There has been a measure of relief of late at the gas pump, the stock market is holding up, many homeowners are sitting on a healthy dose of home equity, and savings rates are providing real rates of return. These elements are supports for spending, but, again, the biggest spending support for the economy as a whole is a strong labor market.
Accordingly, one needs to be careful what they wish for when it comes to the Fed and interest rates.
A rapidly deteriorating labor market would get the Fed’s attention, but it would also translate into lower levels of spending that would undermine earnings estimates. A soft landing for the economy is looking contingent on not only a soft landing for the labor market, but also an unemployment rate that doesn’t take off.
If that component takes flight, there will be some real bite behind the consumer’s bark.
—Patrick J. O’Hare, Briefing.com
Earnings dates:
BABA – 11/16 BMO
BIDU – 11/21 BMO
COST – 12/14 est
MU- 12/21 est
Where will our markets end this week?
Higher
DJIA – Bullish
SPX –Bullish
COMP – Bullish
Where Will the SPX end Nov. 2023?
11-13-2023 +2.5%
11-06-2023 +2.5%
10-30-2023 +1.0%
Earnings:
Mon: TSN,
Tues: HD,
Wed: JD, TGT, TJX, CSCO, PANW,
Thur: M, WMT, BZH, GPS, ROST, BABA
Fri:
Econ Reports:
Mon: Treasury Budget
Tue CPI, Core CPI
Wed: MBA, PPI, Core PPI, Empire, Retail Sales, Retail ex-auto, Business Inventories
Thur: Initial Claims, Continuing Claims, Import, Export, Phil Fed, Capacity Utilization, Industrial Production, NAHB Housing Price Index
Fri: Building Permits Housing Starts
How am I looking to trade?
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
China’s biggest shopping festival is set for a tepid 2023, survey finds
PUBLISHED MON, NOV 6 20238:00 PM ESTUPDATED MON, NOV 6 20238:52 PM EST
KEY POINTS
- to be more stocking up of consumables,” James Yang, partner at Bain, said in a phone interview.
BEIJING — Most consumers in China are planning to keep a lid on spending during this year’s Singles Day shopping festival, which ends Nov. 11.
That’s according to a survey of more than 3,000 consumers in the country by Bain and Company, released Tuesday.
Originally launched by Chinese e-commerce giant Alibaba, Singles Day has expanded from a one-day shopping festival into a multi-week period of shopping promotions across different online platforms in China.
Excitement has waned, and nearly half of consumers surveyed this year also said they were turning to cheaper brands or private label products, the Bain study found. Private label products tend to be cheaper than those from comparable big name brands.
For this year’s festival, more than three-fourths of consumers surveyed — or 77% — said they did not plan to increase spending, according to the report.
That’s a touch higher than the 76% reported last year, and up significantly from 49% in 2021, the report said.
Slowing economic growth and worries about future income have weighed on consumer spending over the last few years.
“Look at the broader macroeconomy. The consumer sentiment remains a bit lower than where it was pre-Covid,” James Yang, partner at Bain, said in a phone interview.
“There is more cost [consciousness] among consumers in where and how they want to spend their money.”
This year, “we expect that there is probably going to be more stocking up of consumables,” Yang said.
Keeping quiet on total numbers
Last year, both Alibaba and online retail giant JD.com for the first time declined to disclose Singles Day gross merchandise value, an industry measure of sales over time.
Bain estimates that including other platforms, Singles Day e-commerce GMV rose by 3% to 934 billion yuan ($128.25 billion) in 2022.
When factoring in another 181 billion yuan in livestreaming and content-led e-commerce, the total GMV for last year’s festival topped 1 trillion yuan ($140 billion), the report said.
For context, those China market figures are still multiples larger than the $35.3 billion that Adobe Analytics said U.S. consumers spent online in 2022 for the local equivalent: the week of Thanksgiving, Black Friday and Cyber Monday.
Livestreaming and posting videos or photos on social media as a way to sell products has taken off in China. Alibaba and JD.com both offer livestreaming functions. Douyin, the Chinese version of TikTok, has become a major platform for people and retailers selling to consumers via livestreams.
“The expectation is that the livestreaming share is going to continue to increase,” Bain’s Yang said.
He added that different kinds of consumers are also spending differently. Those with higher incomes are generally still spending, while the blue-collar segment of the population are cutting back, he said.
“Middle class, they fluctuate in between,” he said. “People are more cautious in how they trade off, what they want to buy.”
Texas Instruments breaks ground on ‘greatest single economic investment’ in Utah history
By Logan Stefanich, KSL.com | Posted – Nov. 2, 2023 at 5:04 p.m.
Texas Instruments president and CEO Haviv Ilan talks with Alpine School District superintendent Dr. Shane Farnsworth during a ground breaking ceremony for Texas Instruments’ second Utah semiconductor factory in Lehi on Thursday. Texas Instruments will invest $9 million into the Alpine School District for a K-12 STEM program. (Kristin Murphy, Deseret News)
LEHI — Texas Instruments on Thursday broke ground on its new $11 billion, 300-mm semiconductor wafer fabrication plant in northern Utah County.
Utah Gov. Spencer Cox called the plant “the greatest single economic investment in the history of our state” — creating around 800 new, high-paying jobs and thousands of indirect jobs in Lehi.
“Utah has a strong network of community partners in addition to great people and great talents, all of which makes it a great place for TI to continue to invest,” said Haviv Ilan, president and CEO of Texas Instruments. “We believe strong companies build strong communities, and strong communities build strong companies. TI has found a great partner in this community, and we look forward to the work we will do together in the future.”
The latest plant will add to the production of Texas Instruments’ existing 300-mm wafer fabrication plant in Lehi. Together, the two plants will manufacture tens of millions of analog and embedded processing chips found in items like phones, computers, cars and home appliances every single day.
“This is more than just new jobs and more than just creating some chips for computers,” Cox said. “This is about national security. It’s about supply chains and bringing supply chains back to the United States, away from our adversaries that want to do us harm.”
When most people think of Texas Instruments, their first thought is of the calculators they used in high school and college math classes. Trevor Bee, factory manager at Lehi’s wafer fabrication plant, said the company is involved in so much more than just calculators.
“The bulk of our revenue really comes from the analog and embedded chips that we produce that power everything from consumer electronics to industrial automation to the automotive segment,” Bee said. “People have hundreds or thousands of Texas Instruments chips in their home without ever knowing that that’s what powers the electronic devices that they have.”
The newest plant will produce even more of these chips.
Cox added that although Texas Instruments has only been in Utah for a couple of years, the company already understands the “ethos” of Utah, exemplified by the tech giant’s $9 million investment into Alpine School District.
As the single largest investment that the district has ever received, the money will go toward the development of the state’s first STEM learning community for K-12 students in the district.
“We are excited this partnership will help our students develop essential knowledge and skills, preparing them for success in life and possible careers in the technology sector,” said Shane Farnsworth, Alpine School District superintendent. “Working together with the city of Lehi, Texas Instruments and our schools, this collaborative investment will impact students and their families for many generations to come.”
The multiyear program will implement more science, technology, engineering and math concepts into the district’s coursework and provide STEM-oriented professional development for teachers and administrators.
Local and state officials along with Texas Instruments officials dig in during a groundbreaking for a new factory in Lehi that will create more than 800 jobs and thousands of indirect jobs, according to Texas Instruments’ press release, on Thursday. (Photo: Kristin Murphy, Deseret News)
Another aspect that made welcoming Texas Instruments’ expansion in Utah easy was the company’s vision for building sustainably, Cox said.
The latest wafer fabrication plant will be LEED Gold-certified, powered by 100% renewable energy, and will recycle water at nearly twice the rate of the company’s existing fabrication plant in Lehi.
“I would stand this up as an example for the future of the state, that when companies want to come to Utah or want to expand here in Utah, they have to come to the table with real solutions to make sure that we’re using less water and we’re being more responsible,” Cox said. “It doesn’t matter if we have great jobs in the future if we don’t have anything to drink.”
Funding for Texas Instruments’ manufacturing expansions came in part through the Biden Administration’s CHIPS and Science Act. The wafer fabrication plant is expected to go into production as early as 2026.
Fed’s Goolsbee says ‘golden path’ of a huge drop in inflation without a recession is still possible
PUBLISHED TUE, NOV 7 20239:10 AM ESTUPDATED TUE, NOV 7 202310:38 AM EST
KEY POINTS
- Chicago Fed President Austan Goolsbee believes there is still a chance for a soft landing.
- “Because of some of the strangeness of this moment, there is the possibility of the golden path … that we got inflation down without a recession,” he said.
- The Fed president said the central bank will be data dependent going forward.
Chicago Federal Reserve President Austan Goolsbee said Tuesday a soft landing is still on the table as the central bank seeks to combat inflation without hurting the economy significantly.
“Because of some of the strangeness of this moment, there is the possibility of the golden path … that we got inflation down without a recession,” Goolsbee said on CNBC’s “Squawk Box.” “If that happened … it would just be a continuation of what we’ve already seen this year, which is unemployment up very modestly, while inflation has come down a lot. … That’s our goal.”
The Fed kept interest rates steady last week, the second consecutive meeting that the Federal Open Market Committee chose to hold, following a string of 11 rate hikes.
Core inflation, per the personal consumption expenditures price index, is currently running at 3.7% on an annual basis, still well above the Fed’s 2% annual target. Goolsbee emphasized that the decline in price pressures so far has already been a great achievement.
“The fastest drop in the inflation rate in any year was 1982,” Goolsbee said. “We’ll see what happens over the next couple of months. We might equal the fastest dropping inflation in the last century. So we’re making progress on the inflation rate.”
The economy has held up well so far amid the tightening measures over the past year and a half. Gross domestic product expanded at a 4.9% annualized rate in the third quarter, stronger than even elevated expectations.
Goolsbee stressed that accomplishing such a “golden path” against a historic surge in inflation won’t be an easy task.
“Unusually for a soft landing of this magnitude, there has never been an inflation rate drop, to get inflation down as much as we’re getting it down without a big recession. That’s basically never happened,” he said. “Let’s shoot to try to manage that.”
The Fed president said the central bank will be data dependent going forward, echoing Chair Jerome Powell’s comments last week.
Powell previously said the central bank hasn’t made any decisions yet for its December meeting, saying that “The committee will always do what it thinks is appropriate at the time.”
Credit card balances spiked in the third quarter to a $1.08 trillion record. Here’s how we got here
PUBLISHED TUE, NOV 7 202311:11 AM ESTUPDATED TUE, NOV 7 202312:19 PM EST
KEY POINTS
- Collectively, Americans now owe $1.08 trillion on their credit cards, according to a report from the Federal Reserve Bank of New York.
- Steadily, persistently higher prices have caused consumers to spend down their savings and increasingly turn to credit cards to make ends meet.
- At the same time, credit cards are one of the most expensive ways to borrow money.
Americans now owe $1.08 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances spiked by $154 billion year over year, notching the largest increase since 1999, the New York Fed found.
“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, the New York Fed’s economic research advisor.
Credit card delinquency rates also rose across the board, according to the New York Fed, but especially among millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.
With most people feeling strained by higher prices — particularly for food, gas and housing — more cardholders are carrying debt from month to month or falling behind on payments, and a greater percentage of balances are going more than 180 days delinquent, according to a separate report from the Consumer Financial Protection Bureau.
Nearly one-tenth of credit card users find themselves in “persistent debt” where they are charged more in interest and fees each year than they pay toward the principal — a pattern that is increasingly difficult to break, the consumer watchdog said.
“It’s a big deal,” said Ted Rossman, senior industry analyst at Bankrate. “Your credit card is probably your highest cost debt by a wide margin.”
Credit card rates top 20%
Credit card rates were already high but have recently spiked along with the Federal Reserve’s string of 11 rate hikes, including four in 2023.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit.
The average annual percentage rate is now more than 20% — also an all-time high.
Why credit card debt keeps rising
Despite the steep cost, consumers often turn to credit cards, in part because they are more accessible than other types of loans, according to Matt Schulz, chief credit analyst at LendingTree. But that comes at the expense of other long-term financial goals, he added.
“That’s money that doesn’t go to a college fund or down payment on a home purchase or Roth IRA,” he said.
Up until recently, most Americans benefited from a few government-supplied safety nets, most notably the large injection of stimulus money, which left many households sitting on a stockpile of cash that enabled some cardholders to keep their credit card balances in check.
But that cash reserve is largely gone after consumers gradually spent down their excess savings from the Covid-19 pandemic years
Now, “consumers are maintaining and supporting their lifestyles using credit card debt,” said Howard Dvorkin, a certified public accountant and the chairman of Debt.com.
“It has been a struggle,” said Adriana Cubillo, 25, of Modesto, California. “My rent is going up, so even though all my bills are paid, sometimes I’m living paycheck to paycheck.”
Still, consumer credit scores have remained high, helped by a strong labor market and cooling inflation, along with the removal of certain medical collections data from consumer credit files, recent reports show.
What to do if you’re in credit card debt
If you’re carrying a balance, try calling your card issuer to ask for a lower rate, consolidate and pay off high-interest credit cards with a lower interest home equity loan or personal loan or switch to an interest-free balance transfer credit card, Schulz advised.
To optimize the benefits of their credit card, consumers should regularly compare credit card offers, pay as much of their balance as they can as soon as they can and avoid paying their bill late, said Mike Townsend, a spokesperson for the American Bankers Association.
“Any credit card holder who finds themselves in financial stress should always contact their card issuer to make them aware of their situation,” Townsend said. “They may be eligible for some relief or assistance depending on their individual circumstances.”
Disney expands cost-cutting plan by $2 billion, posts better-than-expected profit
PUBLISHED WED, NOV 8 202312:00 PM ESTUPDATED THU, NOV 9 20234:00 PM EST
KEY POINTS
- Disney reported quarterly earnings after the closing bell.
- Profit topped expectations, but revenue came up short.
- Ad revenue slumped, but the streaming segment narrowed its loss.
LOS ANGELES — Disney earnings topped expectations thanks in part to profit at ESPN+ and continued growth at theme parks, but a decline in ad revenue weighed on the top line.
Disney also said it plans to continue to “aggressively manage” its cost base, increasing its cost-cutting measures by an additional $2 billion to a target of $7.5 billion.
Shares of the company closed higher than 6% Thursday.
The decrease in ad revenue was primarily from Disney’s ABC Network and other owned TV stations, which saw lower political advertising revenue during the quarter. Over the summer, CEO Bob Iger said the company could be open to selling its TV assets.
Meanwhile, the company added 7 million new core Disney+ subscribers from the previous quarter, bringing its total number of users to 150.2 million, including Hotstar. The streaming business also narrowed its losses compared with a year earlier.
Wall Street had expected Disney to report a total of 148.15 million subs for the quarter. The company touted the addition of theatrical titles such as “Elemental,” “Little Mermaid” and “Guardians of the Galaxy: Vol. 3” as well as the new Star Wars series “Ahsoka” as key streaming content during the last three months.
The company continues to expect that its combined streaming businesses will reach profitability in the fiscal fourth quarter of 2024.
“As we look forward, there are four key building opportunities that will be central to our success: achieving significant and sustained profitability in our streaming business, building ESPN into the preeminent digital sports platform, improving the output and economics of our film studios, and turbocharging growth in our parks and experiences business,” CEO Bob Iger said in a statement Wednesday.
Here are the key numbers from Disney’s report:
- EPS: 82 cents per share adjusted vs. 70 cents per share expected, according to LSEG, formerly known as Refinitiv
- Revenue: $21.24 billion vs. $21.33 billion expected, according to LSEG
- Total Disney+ subscribers: 150.2 million vs. 148.15 million expected, according to StreetAccount.
The company reported net income of $264 million, or 14 cents per share, for the fiscal fourth-quarter ended Sept. 30, up from a net income of $162 million, or 9 cents a share, during the year-ago period.
Excluding impairments, the company earned 82 cents per share, higher than the 70 cents per share Wall Street had expected.
Revenue increased 5% to $21.24 billion, just short of estimates, which called for revenue of $21.33 billion. This is the second consecutive revenue miss for Disney and the first time it has had a consecutive revenue miss since early 2018.
This is also the first quarter that Disney is using its new financial reporting structure, which segmented the company into three divisions — entertainment, sports and experiences. Entertainment contains all of Disney’s streaming and media operations, sports includes ESPN, and experiences includes the company’s theme parks, hotels, cruise line and merchandising efforts.
Disney’s experience division saw revenues jump 13% to $8.16 billion during the quarter as parks saw higher attendance and ticket prices domestically and abroad. The company reported that there are still lower hotel rates at its Florida resort and that area is experiencing higher operating costs. Parks represented around 66% of total revenue for this division.
Mortgage rates plunge and demand finally inches back
PUBLISHED WED, NOV 8 20237:00 AM ESTUPDATED WED, NOV 8 20237:40 AM EST
Diana Olick@IN/DIANAOLICK@DIANAOLICKCNBC@DIANAOLICK
KEY POINTS
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased last week to 7.61% from 7.86%
- Applications to refinance a home loan increased 2% for the week and were 7% lower than the same week one year ago.
Mortgage rates saw the biggest one-week drop in over a year last week, causing the first increase in mortgage demand in a month.
Total mortgage application volume rose 2.5% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.61% from 7.86%, with points falling to 0.69 from 0.73 (including the origination fee) for loans with a 20% down payment.
“Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market,” said Joel Kan, vice president and deputy chief economist at the MBA.
Applications to refinance a home loan increased 2% for the week and were 7% lower than the same week one year ago. Mortgage rates are pretty close to where they were at this time last year, so there is not a lot of incentive to refinance. Most homeowners refinanced two years ago when rates were hovering near record lows. The vast majority of current homeowners carry mortgages with rates below 4%.
Applications for a mortgage to purchase a home rose 3% for the week but were 20% lower than the same week a year ago. The decline in interest rates is still not enough to offset sky-high home prices, which are still rising due to the very low supply of houses for sale.
Mortgage rates started the week slightly higher, but this week holds fewer economic events or reports that would influence rates. Last week’s combination of the Federal Reserve keeping interest rates unchanged and a lower-than-expected monthly employment report was the perfect storm for the dramatic move lower in rates.
Patients are lining up for $2,500 full-body MRI scans that can detect cancer early
PUBLISHED FRI, NOV 10 202310:00 AM EST
KEY POINTS
- Thousands of people have paid $2,500 for full-body MRI scans from Prenuvo, whose technology can detect more than 500 conditions.
- The scans take about an hour and are reviewed by one of Prenuvo’s licensed radiologists.
- “When you’re catching stage one cancer, what you’re doing will save lives,” said Prenuvo CEO Andrew Lacy.
While celebrating the July Fourth holiday last year on a boat in Tyler, Texas, Dr. Julianne Santarosa received the results from her full-body MRI scan. What she saw put a damper on the festivities.
Radiologists at Prenuvo, which performed the scan, had identified a nodule in her lungs. Santarosa, who works as a spinal access surgeon in Dallas, could see the spot circled as she looked at the images from the patient portal on her phone.
“I was like, unless I swallowed a taco chip, that something should not be there,” she told CNBC in an interview.
Before paying $2,500 for the Prenuvo scan, Santarosa, who was 41 at the time, hadn’t felt any pain in and around her lungs and had no reason to suspect anything specific was wrong. Rather, she’d felt generally off since going through in vitro fertilization and had a gut feeling she should do the scan after seeing a Prenuvo ad on Facebook.
The day after seeing her Prenuvo results, Santarosa had a follow-up CT scan at a local hospital. The nodule was cancerous. She had it removed the following week.
Curious and concerned patients like Santarosa are flooding Prenuvo’s nine clinics in the U.S. and Canada. There’s so much demand that the 5-year-old Silicon Valley-based company has announced 11 more locations opening by 2024, including one in London and another in Sydney.
Kim Kardashian called Prenuvo a “life saving machine” in an August post on Instagram that’s generated more than 3.4 million likes. Actress and model Cindy Crawford is an investor, alongside Google ex-Chairman Eric Schmidt, 23andMe co-founder Anne Wojcicki and Nest Labs founder Tony Fadell. The company raised $70 million late last year in a funding round led by Felicis Ventures.
Prenuvo CEO Andrew Lacy said he wants to help customers understand what’s going on beneath their skin, which his company’s technology can do by identifying more than 500 conditions like cancer, multiple sclerosis and brain aneurysms. As of now, the scans have a limited audience because they aren’t covered by insurers, requiring patients to pay out of pocket.
For Santarosa, the imaging was worth every penny and more. Her cancer was detected early enough that she didn’t need to undergo treatments like chemotherapy or radiation. More importantly, it hadn’t spread to the point that it was life threatening.
“There’s no screening test for this,” Santarosa said. “I would’ve been stage 4. I would’ve figured this out when I was coughing up blood.”
An MRI, which stands for magnetic resonance imaging, is traditionally used when ordered by a doctor. Interpreting the images is a complex science, and the scan alone can take more than an hour, even if it covers just part of the body.
Prenuvo’s custom MRI machines, which received clearance from the U.S. Food and Drug Administration in 2018, can scan a person’s entire body in about an hour. Once a scan is complete, the images are reviewed by one of the company’s 30 licensed radiologists. Customers usually receive their results back within five to 10 business days.
Waitlists are long. According to Prenuvo’s website, the next available slot for a full-body scan in New York is in March. The same is true for the Los Angeles clinic. In the Dallas suburb of Irving, there’s availability starting in mid-December.
Lacy said the business has spiked as awareness in the past 12 months has grown “incredibly.”
“These days, when people ask me what I do, and I say I work at Prenuvo, it’s ‘Oh, I heard that on this podcast,’ or ‘That influencer talked about it,’” he said.
In addition to full-body scans, Prenuvo offers a head and torso scan for $1,800 and a scan of just the torso for $1,000.
‘Old-fashioned scaling’
Lacy said Prenuvo is working to bring prices down through “old-fashioned scaling.”
Some companies have started offering Prenuvo scans as a perk for employees, which has helped increase access to the technology. Lacy said it works for companies with self-funded insurance plans, because they’re able to customize their offerings while assuming the risks.
Traditional insurance companies are paying attention.
“Over time, that data helps inform insurance companies about whether this should be something that would be covered across the insurance plans that they offer,” Lacy said.
Prenuvo is looking for other ways to lower costs through artificial intelligence and by potentially reducing the durations of the scans even further. Lacy said the cost is directly correlated to the amount of time customers spend in the expensive machines.
Radiologists are at the core of Prenuvo’s business. That brings its own challenges.
Many radiologists are fighting burnout as an aging population has led to mounting caseloads. Emerging technologies like AI have also discouraged some young physicians from pursuing the practice. By 2034, the U.S. could see an estimated shortage of up to 35,600 radiologists and other specialists, according to a report from the Association of American Medical Colleges.
So far, it’s a problem Prenuvo has managed to avoid.
Lacy said Prenuvo has a backlog of radiologists who want to work for the company. In traditional medicine, radiologists are often diagnosing patients with serious and advanced diseases, so identifying conditions early can be a welcome change, he said.
“When you’re catching stage 1 cancer, what you’re doing will save lives,” Lacy said.
Prenuvo is still in its early days. Medical experts caution that, in addition to the steep price, full-body MRI scans won’t catch everything and aren’t meant to replace targeted screenings like colonoscopies and mammograms.
“It is a tool that your physician and you can use, but it does not replace a full diagnostic examination,” said Dr. Jasnit Makkar, an assistant professor of radiology at Columbia University Medical Center, in an interview. “It is a work in progress.”
Dr. Kimberly Amrami, vice chair of the department of radiology at Mayo Clinic Rochester, said that because of the limitations, patients’ expectations have to be set accordingly. She said it can be challenging to identify lesions in the lungs, for instance, and scanning different body parts like the knee, the pelvis, the breasts and the prostate all require different techniques.
“There’s always a wish to do an exam that’s going to answer every question,” Amrami said in an interview. “It’s just not really the way that it works with MRI in particular, because the way that you evaluate different body parts in different disease states is quite different.”
Prenuvo doesn’t use contrast, a heavy metal that’s injected into the blood vessels, when conducting its scans. Contrast can help radiologists visualize certain conditions better, but there’s controversy surrounding its use, and the company doesn’t want to deter people.
Lacy said Prenuvo’s hardware was designed to do “almost as good a job” as contrast by using other techniques.
“We believe that that’s the best possible solution for screening patients who are at normal risk and asymptomatic,” he said. “If we find something that’s very concerning, oftentimes, we will suggest that the patient gets some type of follow-up dedicated imaging that might involve contrast.”
Amrami said people should consult with their physicians to determine what kind of imaging works best for them.
“There is no one-size-fits-all for MRI,” Amrami said.
A look inside a Prenuvo clinic
Lacy said he was inspired to create Prenuvo after he started to wonder about how his high-stress lifestyle was affecting his body. He previously started an internet search company and helped found a gaming company, among other ventures.
He found a radiologist who was offering an early version of a full-body MRI scan. Lacy said he learned a lot from that experience.
“Although my lifestyle was impacting my health, there was nothing crazy going on,” Lacy said. “I remember just this incredible feeling of peace of mind.”
Prenuvo designed its experience for relaxation. Its New York location has the feel of a cross between a spa and a doctor’s office.
Upon arrival at the clinic, patients are led from a cozy waiting room to a private area where they can change into scrubs and remove their jewelry.
While lying down in the machine, patients are given a pair of headphones and can choose to listen to music or watch TV during the scan.
Dr. Eduardo Dolhun, a family physician in San Francisco, decided to get his first Prenuvo scan more than five years ago after Lacy stopped by his office. He said he was skeptical but intrigued by the technology, so he decided to fly to Vancouver, British Columbia, to try an early version of it.
After going through his results with a Prenuvo radiologist, Dolhun called one of his medical school peers at the Mayo Clinic.
“I think this is going to change medicine,’” Dolhun said, recalling the conversation.
Dolhun said he gets a scan every 18 months or so and recommends it to some of his patients. He still advises them to get screening exams like physicals and mammograms as well.
“Good science takes time,” he said.
Top Boeing exec says 2023 will be the ‘year of wide-body orders’ with more deals to come
PUBLISHED MON, NOV 13 20233:36 AM ESTUPDATED 3 HOURS AGO
KEY POINTS
- Boeing Commercial Airplanes CEO Stan Deal says 2023 has been a year of orders for widebody aircraft.
- Earlier this year, Saudi Arabian flag carrier Saudia and the newly-established Riyadh Air each logged orders for 39 of Boeing’s 787 Dreamliner jets.
Stan Deal, CEO of commercial airplanes at Boeing, says 2023 has been a year of orders for wide-body aircraft with the U.S. manufacturer expecting to announce more deals at this week’s Dubai Airshow.
“We’ve seen strong recovery in the narrow-body ordering in 2022 and now in 2023 it seems to be the year of wide-body orders, and I suspect as you see this show unfold, you’re going to see many more wide-body orders for the industry,” Deal, who is also the executive vice president of Boeing, told CNBC’s Dan Murphy.
Later Monday, Boeing and Emirates agreed on a major order of 777 jets, adding to the Emirati flag carrier’s existing order backlog of 155 777X aircraft from Boeing.
Earlier this year, Saudi flag carrier Saudia and the newly established Riyadh Air each logged orders for 39 of Boeing’s 787 Dreamliner jets, and Deal believes demand from the Gulf will continue to grow rapidly.
The Dubai Airshow kicked off Monday, and Deal confirmed that active discussions are underway with a number of Gulf carriers.
“This is a very unique region in the geography that it represents. Within an eight-hour flight, you are able to get to 80% of the world’s population, and we forecast over the next 20 years about 3,000 aircraft will be needed in this region,” Deal said.
“This region tends to skew towards wide-body order demand — that’s been the hallmark characteristic because they are connected worlds — so in orders you’ve seen last year from Saudia and Riyadh Air ordering 787s, that was kind of the start point of what appears to be an order period for us now.”
HI Market View Commentary 11-13-2023
https://youtu.be/mWo2hMkKX08
How important is the Moody’s downgrade of the US government debt Dow +0.16, S&P 500 -0.08, Nasdaq -0.22
Stocks rose on Monday, as traders tried to move past Moody’s Investors Service lowering its U.S. credit rating outlook to negative from stable.
The S&P 500 added 0.07%, and the Dow Jones Industrial Average rose 100 points to gain 0.3%. The Nasdaq Composite teetered along the flatline.
Leading the S&P 500 gains were DaVita, Insulet and Henry Schein, respectively up 8%, 7% and 6%. Shares of Boeing added more than 4% after Emirates announced a $52 billion order for 95 aircraft, giving the Dow a lift.
Moody’s on Friday underscored the U.S.′ “very large” fiscal deficits and partisan gridlock in Washington as contributing factors for the cut. The ratings agency reaffirmed America’s credit rating at AAA, the highest level. This comes three months after Fitch lowered the U.S. long-term foreign currency issuer default rating to AA+ from AAA, also citing expected fiscal deterioration, an increasing debt burden and political standoffs on fiscal and debt issues.
Does anyone remember the 2023 S&P 500 “earnings” estimated growth 5% $238
Do you think 8%-15% real 8 year growth should equal 125% S&P 500 Stock market growth?=of course NOT=Bubble
3 HOURS AGO
Earnings per share grow in 3Q 2023 for the first time in a year
S&P 500 third-quarter earnings per share have proven resilient, growing for the first time since this time last year, according to Goldman Sachs’ David Kostin.
Earnings per share grew by 4% year over year and was up 10% excluding the energy sector, which was also the worst-performing sector last week.
“Many investors are concerned about downgrades to consensus earnings forecasts, but they are tracking in line with the typical pattern and are being dragged down by Health Care,” Kostin wrote.
The analyst added that he’s maintaining his S&P 500 earnings per share forecasts of $224 in 2023, representing 1% year-over-year growth; $237 in 2024, representing 5% year-over-year growth; and $250 in 2025, representing 5% year-over-year growth.
— Lisa Kailai Han, Michael Bloom
What is the collar trading methodology?= Making up downward movement, converting the profits to more shares, exponential growth when they come back!!!
Why don’t we go to cash?
If an investor were to simply miss the 10 best days in the market, they would have shed over 50% of their end portfolio value. The investor would finish with a portfolio of only $29,708, compared to $64,844 if they had just stayed put.
Making matters worse, by missing 60 of the best days, they would have lost a striking 93% in value compared to what the portfolio would be worth if they had simply stayed invested.
Overall, an investor would have seen almost 10% in average annual returns using a buy-and-hold strategy. Average annual returns entered negative territory once they missed the 40 best days over the time frame.
Do 90% of people lose money in the stock market?
Based on several brokers’ studies, as many as 90% of traders are estimated to lose money in the markets. This can be an even higher failure rate if you look at day traders, forex traders, or options traders
IS IT WORTH THE RISK ???? ABSOLUTELY IF you are protecting with options = That saves you from stocks losing 50, 60 70 or 86.6% of their value
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 10-Nov-23 14:55 ET | Archive
When the consumer’s bark becomes a bite
A lot of retailers will be reporting their quarterly earnings results over the course of the next few weeks. In the midst of those results, we will get the latest retail sales report covering the month of October. Oh, and try as we might, there will be no escaping mention of holiday shopping.
‘Tis the season for the consumer, who will demonstrate if there is actual bite behind the bark of weakening sentiment showing up in surveys and polling data.
That’s no small consideration either. Consumer spending accounts for nearly 70% of GDP, which is to say, as goes the consumer, so goes the economy.
Not Putting Money Where Mouth Is
We know from the advance Q3 real GDP estimate of 4.9% that the consumer went just fine in July, August, and September. Interestingly, consumer sentiment, as measured by the University of Michigan, rose in July but fell in August and September. The same held true for consumer confidence, as measured by The Conference Board.
In brief, consumers weren’t exactly putting their money where their mouth was. They were still spending it — rather freely we might add. Real personal consumption expenditures increased at a seasonally adjusted annual rate of 4.0% in the third quarter, with spending on goods up 4.8% and spending on services up 3.6%.
The overall strength in spending was a surprise, but the continued inclination to spend was not. Between July and September, the unemployment rate ranged from 3.5% to 3.8%, near a 54-year low.
People who are employed are people who spend money. Granted they aren’t always spending money on discretionary items/experiences, because the means to do so just aren’t there. A lot of money is spent only on life’s necessities because, as other reports suggest, a lot of people are living paycheck-to-paycheck.
Now, that could mean some people are spending every dollar they earn, because they can’t resist the temptation of spending on discretionary items/experiences, but it certainly means for others that every dollar earned is spent on rent, food, utilities, insurance, health care, gas, and transportation.
In any case, the spending all goes to the same economic pie and the pie in the third quarter was a Costco-size pie.
Now What?
What happens now is the $22 trillion question.
The market feels hopeful about inflation improving, yet there is an abundance of anecdotal evidence that consumers are feeling the pinch of inflation. Worries about inflation were evident in the November University of Michigan Index of Consumer Sentiment released this week. Year-ahead inflation expectations rose to 4.4% from 4.2%, hitting their highest level since November 2022, while long-run inflation expectations jumped to 3.2% from 3.0%, hitting their highest reading since 2011.
That’s not what the Fed wants to hear, and all else equal, consumers would rather not have to think about it, but inflation pressures are clearly at the forefront of their mind.
Knowing that, there should be a good deal of interest in the upcoming earnings reports from the retailers. Most are now in their seasonally strongest period of the year, so their fiscal fourth quarter guidance will carry some added weight in shaping expectations for consumer spending in the fourth quarter.
What It All Means
Consumers are facing their fair share of challenges, but the continuation of a strong labor market is key to helping them continue to overcome many of the challenges that include the higher cost of living, the resumption of federal student loan payments, and higher credit costs.
There has been a measure of relief of late at the gas pump, the stock market is holding up, many homeowners are sitting on a healthy dose of home equity, and savings rates are providing real rates of return. These elements are supports for spending, but, again, the biggest spending support for the economy as a whole is a strong labor market.
Accordingly, one needs to be careful what they wish for when it comes to the Fed and interest rates.
A rapidly deteriorating labor market would get the Fed’s attention, but it would also translate into lower levels of spending that would undermine earnings estimates. A soft landing for the economy is looking contingent on not only a soft landing for the labor market, but also an unemployment rate that doesn’t take off.
If that component takes flight, there will be some real bite behind the consumer’s bark.
—Patrick J. O’Hare, Briefing.com
Earnings dates:
BABA – 11/16 BMO
BIDU – 11/21 BMO
COST – 12/14 est
MU- 12/21 est
Where will our markets end this week?
Higher
DJIA – Bullish
SPX –Bullish
COMP – Bullish
Where Will the SPX end Nov. 2023?
11-13-2023 +2.5%
11-06-2023 +2.5%
10-30-2023 +1.0%
Earnings:
Mon: TSN,
Tues: HD,
Wed: JD, TGT, TJX, CSCO, PANW,
Thur: M, WMT, BZH, GPS, ROST, BABA
Fri:
Econ Reports:
Mon: Treasury Budget
Tue CPI, Core CPI
Wed: MBA, PPI, Core PPI, Empire, Retail Sales, Retail ex-auto, Business Inventories
Thur: Initial Claims, Continuing Claims, Import, Export, Phil Fed, Capacity Utilization, Industrial Production, NAHB Housing Price Index
Fri: Building Permits Housing Starts
How am I looking to trade?
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
China’s biggest shopping festival is set for a tepid 2023, survey finds
PUBLISHED MON, NOV 6 20238:00 PM ESTUPDATED MON, NOV 6 20238:52 PM EST
KEY POINTS
- to be more stocking up of consumables,” James Yang, partner at Bain, said in a phone interview.
BEIJING — Most consumers in China are planning to keep a lid on spending during this year’s Singles Day shopping festival, which ends Nov. 11.
That’s according to a survey of more than 3,000 consumers in the country by Bain and Company, released Tuesday.
Originally launched by Chinese e-commerce giant Alibaba, Singles Day has expanded from a one-day shopping festival into a multi-week period of shopping promotions across different online platforms in China.
Excitement has waned, and nearly half of consumers surveyed this year also said they were turning to cheaper brands or private label products, the Bain study found. Private label products tend to be cheaper than those from comparable big name brands.
For this year’s festival, more than three-fourths of consumers surveyed — or 77% — said they did not plan to increase spending, according to the report.
That’s a touch higher than the 76% reported last year, and up significantly from 49% in 2021, the report said.
Slowing economic growth and worries about future income have weighed on consumer spending over the last few years.
“Look at the broader macroeconomy. The consumer sentiment remains a bit lower than where it was pre-Covid,” James Yang, partner at Bain, said in a phone interview.
“There is more cost [consciousness] among consumers in where and how they want to spend their money.”
This year, “we expect that there is probably going to be more stocking up of consumables,” Yang said.
Keeping quiet on total numbers
Last year, both Alibaba and online retail giant JD.com for the first time declined to disclose Singles Day gross merchandise value, an industry measure of sales over time.
Bain estimates that including other platforms, Singles Day e-commerce GMV rose by 3% to 934 billion yuan ($128.25 billion) in 2022.
When factoring in another 181 billion yuan in livestreaming and content-led e-commerce, the total GMV for last year’s festival topped 1 trillion yuan ($140 billion), the report said.
For context, those China market figures are still multiples larger than the $35.3 billion that Adobe Analytics said U.S. consumers spent online in 2022 for the local equivalent: the week of Thanksgiving, Black Friday and Cyber Monday.
Livestreaming and posting videos or photos on social media as a way to sell products has taken off in China. Alibaba and JD.com both offer livestreaming functions. Douyin, the Chinese version of TikTok, has become a major platform for people and retailers selling to consumers via livestreams.
“The expectation is that the livestreaming share is going to continue to increase,” Bain’s Yang said.
He added that different kinds of consumers are also spending differently. Those with higher incomes are generally still spending, while the blue-collar segment of the population are cutting back, he said.
“Middle class, they fluctuate in between,” he said. “People are more cautious in how they trade off, what they want to buy.”
Texas Instruments breaks ground on ‘greatest single economic investment’ in Utah history
By Logan Stefanich, KSL.com | Posted – Nov. 2, 2023 at 5:04 p.m.
Texas Instruments president and CEO Haviv Ilan talks with Alpine School District superintendent Dr. Shane Farnsworth during a ground breaking ceremony for Texas Instruments’ second Utah semiconductor factory in Lehi on Thursday. Texas Instruments will invest $9 million into the Alpine School District for a K-12 STEM program. (Kristin Murphy, Deseret News)
LEHI — Texas Instruments on Thursday broke ground on its new $11 billion, 300-mm semiconductor wafer fabrication plant in northern Utah County.
Utah Gov. Spencer Cox called the plant “the greatest single economic investment in the history of our state” — creating around 800 new, high-paying jobs and thousands of indirect jobs in Lehi.
“Utah has a strong network of community partners in addition to great people and great talents, all of which makes it a great place for TI to continue to invest,” said Haviv Ilan, president and CEO of Texas Instruments. “We believe strong companies build strong communities, and strong communities build strong companies. TI has found a great partner in this community, and we look forward to the work we will do together in the future.”
The latest plant will add to the production of Texas Instruments’ existing 300-mm wafer fabrication plant in Lehi. Together, the two plants will manufacture tens of millions of analog and embedded processing chips found in items like phones, computers, cars and home appliances every single day.
“This is more than just new jobs and more than just creating some chips for computers,” Cox said. “This is about national security. It’s about supply chains and bringing supply chains back to the United States, away from our adversaries that want to do us harm.”
When most people think of Texas Instruments, their first thought is of the calculators they used in high school and college math classes. Trevor Bee, factory manager at Lehi’s wafer fabrication plant, said the company is involved in so much more than just calculators.
“The bulk of our revenue really comes from the analog and embedded chips that we produce that power everything from consumer electronics to industrial automation to the automotive segment,” Bee said. “People have hundreds or thousands of Texas Instruments chips in their home without ever knowing that that’s what powers the electronic devices that they have.”
The newest plant will produce even more of these chips.
Cox added that although Texas Instruments has only been in Utah for a couple of years, the company already understands the “ethos” of Utah, exemplified by the tech giant’s $9 million investment into Alpine School District.
As the single largest investment that the district has ever received, the money will go toward the development of the state’s first STEM learning community for K-12 students in the district.
“We are excited this partnership will help our students develop essential knowledge and skills, preparing them for success in life and possible careers in the technology sector,” said Shane Farnsworth, Alpine School District superintendent. “Working together with the city of Lehi, Texas Instruments and our schools, this collaborative investment will impact students and their families for many generations to come.”
The multiyear program will implement more science, technology, engineering and math concepts into the district’s coursework and provide STEM-oriented professional development for teachers and administrators.
Local and state officials along with Texas Instruments officials dig in during a groundbreaking for a new factory in Lehi that will create more than 800 jobs and thousands of indirect jobs, according to Texas Instruments’ press release, on Thursday. (Photo: Kristin Murphy, Deseret News)
Another aspect that made welcoming Texas Instruments’ expansion in Utah easy was the company’s vision for building sustainably, Cox said.
The latest wafer fabrication plant will be LEED Gold-certified, powered by 100% renewable energy, and will recycle water at nearly twice the rate of the company’s existing fabrication plant in Lehi.
“I would stand this up as an example for the future of the state, that when companies want to come to Utah or want to expand here in Utah, they have to come to the table with real solutions to make sure that we’re using less water and we’re being more responsible,” Cox said. “It doesn’t matter if we have great jobs in the future if we don’t have anything to drink.”
Funding for Texas Instruments’ manufacturing expansions came in part through the Biden Administration’s CHIPS and Science Act. The wafer fabrication plant is expected to go into production as early as 2026.
Fed’s Goolsbee says ‘golden path’ of a huge drop in inflation without a recession is still possible
PUBLISHED TUE, NOV 7 20239:10 AM ESTUPDATED TUE, NOV 7 202310:38 AM EST
KEY POINTS
- Chicago Fed President Austan Goolsbee believes there is still a chance for a soft landing.
- “Because of some of the strangeness of this moment, there is the possibility of the golden path … that we got inflation down without a recession,” he said.
- The Fed president said the central bank will be data dependent going forward.
Chicago Federal Reserve President Austan Goolsbee said Tuesday a soft landing is still on the table as the central bank seeks to combat inflation without hurting the economy significantly.
“Because of some of the strangeness of this moment, there is the possibility of the golden path … that we got inflation down without a recession,” Goolsbee said on CNBC’s “Squawk Box.” “If that happened … it would just be a continuation of what we’ve already seen this year, which is unemployment up very modestly, while inflation has come down a lot. … That’s our goal.”
The Fed kept interest rates steady last week, the second consecutive meeting that the Federal Open Market Committee chose to hold, following a string of 11 rate hikes.
Core inflation, per the personal consumption expenditures price index, is currently running at 3.7% on an annual basis, still well above the Fed’s 2% annual target. Goolsbee emphasized that the decline in price pressures so far has already been a great achievement.
“The fastest drop in the inflation rate in any year was 1982,” Goolsbee said. “We’ll see what happens over the next couple of months. We might equal the fastest dropping inflation in the last century. So we’re making progress on the inflation rate.”
The economy has held up well so far amid the tightening measures over the past year and a half. Gross domestic product expanded at a 4.9% annualized rate in the third quarter, stronger than even elevated expectations.
Goolsbee stressed that accomplishing such a “golden path” against a historic surge in inflation won’t be an easy task.
“Unusually for a soft landing of this magnitude, there has never been an inflation rate drop, to get inflation down as much as we’re getting it down without a big recession. That’s basically never happened,” he said. “Let’s shoot to try to manage that.”
The Fed president said the central bank will be data dependent going forward, echoing Chair Jerome Powell’s comments last week.
Powell previously said the central bank hasn’t made any decisions yet for its December meeting, saying that “The committee will always do what it thinks is appropriate at the time.”
Credit card balances spiked in the third quarter to a $1.08 trillion record. Here’s how we got here
PUBLISHED TUE, NOV 7 202311:11 AM ESTUPDATED TUE, NOV 7 202312:19 PM EST
KEY POINTS
- Collectively, Americans now owe $1.08 trillion on their credit cards, according to a report from the Federal Reserve Bank of New York.
- Steadily, persistently higher prices have caused consumers to spend down their savings and increasingly turn to credit cards to make ends meet.
- At the same time, credit cards are one of the most expensive ways to borrow money.
Americans now owe $1.08 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances spiked by $154 billion year over year, notching the largest increase since 1999, the New York Fed found.
“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, the New York Fed’s economic research advisor.
Credit card delinquency rates also rose across the board, according to the New York Fed, but especially among millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.
With most people feeling strained by higher prices — particularly for food, gas and housing — more cardholders are carrying debt from month to month or falling behind on payments, and a greater percentage of balances are going more than 180 days delinquent, according to a separate report from the Consumer Financial Protection Bureau.
Nearly one-tenth of credit card users find themselves in “persistent debt” where they are charged more in interest and fees each year than they pay toward the principal — a pattern that is increasingly difficult to break, the consumer watchdog said.
“It’s a big deal,” said Ted Rossman, senior industry analyst at Bankrate. “Your credit card is probably your highest cost debt by a wide margin.”
Credit card rates top 20%
Credit card rates were already high but have recently spiked along with the Federal Reserve’s string of 11 rate hikes, including four in 2023.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit.
The average annual percentage rate is now more than 20% — also an all-time high.
Why credit card debt keeps rising
Despite the steep cost, consumers often turn to credit cards, in part because they are more accessible than other types of loans, according to Matt Schulz, chief credit analyst at LendingTree. But that comes at the expense of other long-term financial goals, he added.
“That’s money that doesn’t go to a college fund or down payment on a home purchase or Roth IRA,” he said.
Up until recently, most Americans benefited from a few government-supplied safety nets, most notably the large injection of stimulus money, which left many households sitting on a stockpile of cash that enabled some cardholders to keep their credit card balances in check.
But that cash reserve is largely gone after consumers gradually spent down their excess savings from the Covid-19 pandemic years
Now, “consumers are maintaining and supporting their lifestyles using credit card debt,” said Howard Dvorkin, a certified public accountant and the chairman of Debt.com.
“It has been a struggle,” said Adriana Cubillo, 25, of Modesto, California. “My rent is going up, so even though all my bills are paid, sometimes I’m living paycheck to paycheck.”
Still, consumer credit scores have remained high, helped by a strong labor market and cooling inflation, along with the removal of certain medical collections data from consumer credit files, recent reports show.
What to do if you’re in credit card debt
If you’re carrying a balance, try calling your card issuer to ask for a lower rate, consolidate and pay off high-interest credit cards with a lower interest home equity loan or personal loan or switch to an interest-free balance transfer credit card, Schulz advised.
To optimize the benefits of their credit card, consumers should regularly compare credit card offers, pay as much of their balance as they can as soon as they can and avoid paying their bill late, said Mike Townsend, a spokesperson for the American Bankers Association.
“Any credit card holder who finds themselves in financial stress should always contact their card issuer to make them aware of their situation,” Townsend said. “They may be eligible for some relief or assistance depending on their individual circumstances.”
Disney expands cost-cutting plan by $2 billion, posts better-than-expected profit
PUBLISHED WED, NOV 8 202312:00 PM ESTUPDATED THU, NOV 9 20234:00 PM EST
KEY POINTS
- Disney reported quarterly earnings after the closing bell.
- Profit topped expectations, but revenue came up short.
- Ad revenue slumped, but the streaming segment narrowed its loss.
LOS ANGELES — Disney earnings topped expectations thanks in part to profit at ESPN+ and continued growth at theme parks, but a decline in ad revenue weighed on the top line.
Disney also said it plans to continue to “aggressively manage” its cost base, increasing its cost-cutting measures by an additional $2 billion to a target of $7.5 billion.
Shares of the company closed higher than 6% Thursday.
The decrease in ad revenue was primarily from Disney’s ABC Network and other owned TV stations, which saw lower political advertising revenue during the quarter. Over the summer, CEO Bob Iger said the company could be open to selling its TV assets.
Meanwhile, the company added 7 million new core Disney+ subscribers from the previous quarter, bringing its total number of users to 150.2 million, including Hotstar. The streaming business also narrowed its losses compared with a year earlier.
Wall Street had expected Disney to report a total of 148.15 million subs for the quarter. The company touted the addition of theatrical titles such as “Elemental,” “Little Mermaid” and “Guardians of the Galaxy: Vol. 3” as well as the new Star Wars series “Ahsoka” as key streaming content during the last three months.
The company continues to expect that its combined streaming businesses will reach profitability in the fiscal fourth quarter of 2024.
“As we look forward, there are four key building opportunities that will be central to our success: achieving significant and sustained profitability in our streaming business, building ESPN into the preeminent digital sports platform, improving the output and economics of our film studios, and turbocharging growth in our parks and experiences business,” CEO Bob Iger said in a statement Wednesday.
Here are the key numbers from Disney’s report:
- EPS: 82 cents per share adjusted vs. 70 cents per share expected, according to LSEG, formerly known as Refinitiv
- Revenue: $21.24 billion vs. $21.33 billion expected, according to LSEG
- Total Disney+ subscribers: 150.2 million vs. 148.15 million expected, according to StreetAccount.
The company reported net income of $264 million, or 14 cents per share, for the fiscal fourth-quarter ended Sept. 30, up from a net income of $162 million, or 9 cents a share, during the year-ago period.
Excluding impairments, the company earned 82 cents per share, higher than the 70 cents per share Wall Street had expected.
Revenue increased 5% to $21.24 billion, just short of estimates, which called for revenue of $21.33 billion. This is the second consecutive revenue miss for Disney and the first time it has had a consecutive revenue miss since early 2018.
This is also the first quarter that Disney is using its new financial reporting structure, which segmented the company into three divisions — entertainment, sports and experiences. Entertainment contains all of Disney’s streaming and media operations, sports includes ESPN, and experiences includes the company’s theme parks, hotels, cruise line and merchandising efforts.
Disney’s experience division saw revenues jump 13% to $8.16 billion during the quarter as parks saw higher attendance and ticket prices domestically and abroad. The company reported that there are still lower hotel rates at its Florida resort and that area is experiencing higher operating costs. Parks represented around 66% of total revenue for this division.
Mortgage rates plunge and demand finally inches back
PUBLISHED WED, NOV 8 20237:00 AM ESTUPDATED WED, NOV 8 20237:40 AM EST
Diana Olick@IN/DIANAOLICK@DIANAOLICKCNBC@DIANAOLICK
KEY POINTS
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased last week to 7.61% from 7.86%
- Applications to refinance a home loan increased 2% for the week and were 7% lower than the same week one year ago.
Mortgage rates saw the biggest one-week drop in over a year last week, causing the first increase in mortgage demand in a month.
Total mortgage application volume rose 2.5% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.61% from 7.86%, with points falling to 0.69 from 0.73 (including the origination fee) for loans with a 20% down payment.
“Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market,” said Joel Kan, vice president and deputy chief economist at the MBA.
Applications to refinance a home loan increased 2% for the week and were 7% lower than the same week one year ago. Mortgage rates are pretty close to where they were at this time last year, so there is not a lot of incentive to refinance. Most homeowners refinanced two years ago when rates were hovering near record lows. The vast majority of current homeowners carry mortgages with rates below 4%.
Applications for a mortgage to purchase a home rose 3% for the week but were 20% lower than the same week a year ago. The decline in interest rates is still not enough to offset sky-high home prices, which are still rising due to the very low supply of houses for sale.
Mortgage rates started the week slightly higher, but this week holds fewer economic events or reports that would influence rates. Last week’s combination of the Federal Reserve keeping interest rates unchanged and a lower-than-expected monthly employment report was the perfect storm for the dramatic move lower in rates.
Patients are lining up for $2,500 full-body MRI scans that can detect cancer early
PUBLISHED FRI, NOV 10 202310:00 AM EST
KEY POINTS
- Thousands of people have paid $2,500 for full-body MRI scans from Prenuvo, whose technology can detect more than 500 conditions.
- The scans take about an hour and are reviewed by one of Prenuvo’s licensed radiologists.
- “When you’re catching stage one cancer, what you’re doing will save lives,” said Prenuvo CEO Andrew Lacy.
While celebrating the July Fourth holiday last year on a boat in Tyler, Texas, Dr. Julianne Santarosa received the results from her full-body MRI scan. What she saw put a damper on the festivities.
Radiologists at Prenuvo, which performed the scan, had identified a nodule in her lungs. Santarosa, who works as a spinal access surgeon in Dallas, could see the spot circled as she looked at the images from the patient portal on her phone.
“I was like, unless I swallowed a taco chip, that something should not be there,” she told CNBC in an interview.
Before paying $2,500 for the Prenuvo scan, Santarosa, who was 41 at the time, hadn’t felt any pain in and around her lungs and had no reason to suspect anything specific was wrong. Rather, she’d felt generally off since going through in vitro fertilization and had a gut feeling she should do the scan after seeing a Prenuvo ad on Facebook.
The day after seeing her Prenuvo results, Santarosa had a follow-up CT scan at a local hospital. The nodule was cancerous. She had it removed the following week.
Curious and concerned patients like Santarosa are flooding Prenuvo’s nine clinics in the U.S. and Canada. There’s so much demand that the 5-year-old Silicon Valley-based company has announced 11 more locations opening by 2024, including one in London and another in Sydney.
Kim Kardashian called Prenuvo a “life saving machine” in an August post on Instagram that’s generated more than 3.4 million likes. Actress and model Cindy Crawford is an investor, alongside Google ex-Chairman Eric Schmidt, 23andMe co-founder Anne Wojcicki and Nest Labs founder Tony Fadell. The company raised $70 million late last year in a funding round led by Felicis Ventures.
Prenuvo CEO Andrew Lacy said he wants to help customers understand what’s going on beneath their skin, which his company’s technology can do by identifying more than 500 conditions like cancer, multiple sclerosis and brain aneurysms. As of now, the scans have a limited audience because they aren’t covered by insurers, requiring patients to pay out of pocket.
For Santarosa, the imaging was worth every penny and more. Her cancer was detected early enough that she didn’t need to undergo treatments like chemotherapy or radiation. More importantly, it hadn’t spread to the point that it was life threatening.
“There’s no screening test for this,” Santarosa said. “I would’ve been stage 4. I would’ve figured this out when I was coughing up blood.”
An MRI, which stands for magnetic resonance imaging, is traditionally used when ordered by a doctor. Interpreting the images is a complex science, and the scan alone can take more than an hour, even if it covers just part of the body.
Prenuvo’s custom MRI machines, which received clearance from the U.S. Food and Drug Administration in 2018, can scan a person’s entire body in about an hour. Once a scan is complete, the images are reviewed by one of the company’s 30 licensed radiologists. Customers usually receive their results back within five to 10 business days.
Waitlists are long. According to Prenuvo’s website, the next available slot for a full-body scan in New York is in March. The same is true for the Los Angeles clinic. In the Dallas suburb of Irving, there’s availability starting in mid-December.
Lacy said the business has spiked as awareness in the past 12 months has grown “incredibly.”
“These days, when people ask me what I do, and I say I work at Prenuvo, it’s ‘Oh, I heard that on this podcast,’ or ‘That influencer talked about it,’” he said.
In addition to full-body scans, Prenuvo offers a head and torso scan for $1,800 and a scan of just the torso for $1,000.
‘Old-fashioned scaling’
Lacy said Prenuvo is working to bring prices down through “old-fashioned scaling.”
Some companies have started offering Prenuvo scans as a perk for employees, which has helped increase access to the technology. Lacy said it works for companies with self-funded insurance plans, because they’re able to customize their offerings while assuming the risks.
Traditional insurance companies are paying attention.
“Over time, that data helps inform insurance companies about whether this should be something that would be covered across the insurance plans that they offer,” Lacy said.
Prenuvo is looking for other ways to lower costs through artificial intelligence and by potentially reducing the durations of the scans even further. Lacy said the cost is directly correlated to the amount of time customers spend in the expensive machines.
Radiologists are at the core of Prenuvo’s business. That brings its own challenges.
Many radiologists are fighting burnout as an aging population has led to mounting caseloads. Emerging technologies like AI have also discouraged some young physicians from pursuing the practice. By 2034, the U.S. could see an estimated shortage of up to 35,600 radiologists and other specialists, according to a report from the Association of American Medical Colleges.
So far, it’s a problem Prenuvo has managed to avoid.
Lacy said Prenuvo has a backlog of radiologists who want to work for the company. In traditional medicine, radiologists are often diagnosing patients with serious and advanced diseases, so identifying conditions early can be a welcome change, he said.
“When you’re catching stage 1 cancer, what you’re doing will save lives,” Lacy said.
Prenuvo is still in its early days. Medical experts caution that, in addition to the steep price, full-body MRI scans won’t catch everything and aren’t meant to replace targeted screenings like colonoscopies and mammograms.
“It is a tool that your physician and you can use, but it does not replace a full diagnostic examination,” said Dr. Jasnit Makkar, an assistant professor of radiology at Columbia University Medical Center, in an interview. “It is a work in progress.”
Dr. Kimberly Amrami, vice chair of the department of radiology at Mayo Clinic Rochester, said that because of the limitations, patients’ expectations have to be set accordingly. She said it can be challenging to identify lesions in the lungs, for instance, and scanning different body parts like the knee, the pelvis, the breasts and the prostate all require different techniques.
“There’s always a wish to do an exam that’s going to answer every question,” Amrami said in an interview. “It’s just not really the way that it works with MRI in particular, because the way that you evaluate different body parts in different disease states is quite different.”
Prenuvo doesn’t use contrast, a heavy metal that’s injected into the blood vessels, when conducting its scans. Contrast can help radiologists visualize certain conditions better, but there’s controversy surrounding its use, and the company doesn’t want to deter people.
Lacy said Prenuvo’s hardware was designed to do “almost as good a job” as contrast by using other techniques.
“We believe that that’s the best possible solution for screening patients who are at normal risk and asymptomatic,” he said. “If we find something that’s very concerning, oftentimes, we will suggest that the patient gets some type of follow-up dedicated imaging that might involve contrast.”
Amrami said people should consult with their physicians to determine what kind of imaging works best for them.
“There is no one-size-fits-all for MRI,” Amrami said.
A look inside a Prenuvo clinic
Lacy said he was inspired to create Prenuvo after he started to wonder about how his high-stress lifestyle was affecting his body. He previously started an internet search company and helped found a gaming company, among other ventures.
He found a radiologist who was offering an early version of a full-body MRI scan. Lacy said he learned a lot from that experience.
“Although my lifestyle was impacting my health, there was nothing crazy going on,” Lacy said. “I remember just this incredible feeling of peace of mind.”
Prenuvo designed its experience for relaxation. Its New York location has the feel of a cross between a spa and a doctor’s office.
Upon arrival at the clinic, patients are led from a cozy waiting room to a private area where they can change into scrubs and remove their jewelry.
While lying down in the machine, patients are given a pair of headphones and can choose to listen to music or watch TV during the scan.
Dr. Eduardo Dolhun, a family physician in San Francisco, decided to get his first Prenuvo scan more than five years ago after Lacy stopped by his office. He said he was skeptical but intrigued by the technology, so he decided to fly to Vancouver, British Columbia, to try an early version of it.
After going through his results with a Prenuvo radiologist, Dolhun called one of his medical school peers at the Mayo Clinic.
“I think this is going to change medicine,’” Dolhun said, recalling the conversation.
Dolhun said he gets a scan every 18 months or so and recommends it to some of his patients. He still advises them to get screening exams like physicals and mammograms as well.
“Good science takes time,” he said.
Top Boeing exec says 2023 will be the ‘year of wide-body orders’ with more deals to come
PUBLISHED MON, NOV 13 20233:36 AM ESTUPDATED 3 HOURS AGO
KEY POINTS
- Boeing Commercial Airplanes CEO Stan Deal says 2023 has been a year of orders for widebody aircraft.
- Earlier this year, Saudi Arabian flag carrier Saudia and the newly-established Riyadh Air each logged orders for 39 of Boeing’s 787 Dreamliner jets.
Stan Deal, CEO of commercial airplanes at Boeing, says 2023 has been a year of orders for wide-body aircraft with the U.S. manufacturer expecting to announce more deals at this week’s Dubai Airshow.
“We’ve seen strong recovery in the narrow-body ordering in 2022 and now in 2023 it seems to be the year of wide-body orders, and I suspect as you see this show unfold, you’re going to see many more wide-body orders for the industry,” Deal, who is also the executive vice president of Boeing, told CNBC’s Dan Murphy.
Later Monday, Boeing and Emirates agreed on a major order of 777 jets, adding to the Emirati flag carrier’s existing order backlog of 155 777X aircraft from Boeing.
Earlier this year, Saudi flag carrier Saudia and the newly established Riyadh Air each logged orders for 39 of Boeing’s 787 Dreamliner jets, and Deal believes demand from the Gulf will continue to grow rapidly.
The Dubai Airshow kicked off Monday, and Deal confirmed that active discussions are underway with a number of Gulf carriers.
“This is a very unique region in the geography that it represents. Within an eight-hour flight, you are able to get to 80% of the world’s population, and we forecast over the next 20 years about 3,000 aircraft will be needed in this region,” Deal said.
“This region tends to skew towards wide-body order demand — that’s been the hallmark characteristic because they are connected worlds — so in orders you’ve seen last year from Saudia and Riyadh Air ordering 787s, that was kind of the start point of what appears to be an order period for us now.”
HI Financial Services Mid-Week 06-24-2014