Sneaker Brand Taps 80s Celebrity to Take On Nike
por Sarah Jean Callahan

The Street: Stock Market / 2023-04-23 19:32

Sneaker brand takes a page out of Nike's marketing campaign with its latest collaboration.

Sneaker brands have been in the news more than normal recently.

Adidas  (ADDYY)  was in the middle of a huge shoe deal with musician Kanye West, or 'Ye.' when the celebrity made anti-Semitic comments that left Adidas in a pickle. Adidas chose to pull out of the deal because it was the "right" decision. It chose to not proceed with the deal after the rapper's unsavory comments.

More negative news hit as Olympia Sports and Shoe City filed for bankruptcy after financial difficulties. Shoe City had been in the red for a couple years, before the company realized the best option was to close its doors. Olympia Sports met the same demise as Shoe City, both filing for bankruptcy leaving shoe brands like Nike, Adidas, Skechers  (SKX) - Get Free Report and other shoe brands as creditors left holding the bill.

Nike  (NKE) - Get Free Report came onto the stage with Amazon's new movie about Michael Jordan and the shoe deal featuring the basketball G.O.A.T as a rookie in "Air: Courting a Legend." The movie follows the story of Nike doing something unheard of at the time, developing a shoe completely around a rookie. This move was risky, but lucky for Nike, the rookie was Michael Jordan, and the rest is, well, history.

Skechers Brings In Mr. T
Skechers is taking a page out of Nike and Adidas marketing campaign books, but in a very different way than its competitors. Nike risked a lot doing a deal with an unknown rookie. Now Nike is featuring lots of rookies and getting deals signed with lesser known young talent hoping for the next big thing, like LeBron James and Kevin Durant, who each got major deals with Nike that worked out for both parties.

Skechers latest marketing campaign is all about nos'T'algia and is using its name which is has the 'T' sound in the brand name, but the 'T' is left out. So, bringing the 'T' to Skechers is none other than Mr. T, known to many as B.A. Baracus from the 1980's NBC-TV show "The A-Team." Mr. T is well known for his distinct look with a mohawk hairstyle, layers of gold chains, gold rings and tank top to show off his muscles. He looks like no one in their right mind would mess with him.

In the Skechers commercial, Mr. T is sporting different Skechers shoes while he participates in several different activities like playing pickleball, karate, arm wrestling and grilling out. 

"The people have spoken and it's about time there was a 't' in Skechers," according to Mr. T. He continued with his famous catchphrase, "I pity the fool who doesn't see how easy I find my way into every comfortable pair!" 

"The letter 't' has never been part of our name but sometimes computers and voice-to-text apps autocorrect it the wrong way," said Skechers President, Michael Greenberg. He continued, "Not that we are considering changing the spelling of our name, but it would have been foolish to say no to Mr. T – the only 't' that belongs in Skechers."

Shoe Brand Marketing Genius
Skechers has partnered with other celebrities like Snoop Dogg and other sports stars like Tony Romo and Cris Carter. Skechers branches out with its latest commercial showing Mr. T, who is a 1980's celebrity and will appeal to a totally different generation of shoppers, instead of those who just want the latest sports stars sneaker to play sports in, Gen X. 

While some older millennials may remember Mr. T, it is more likely that Gen-X will smile and appreciate the 80's muscle man icon and know his iconic catch phrase. Showing that Skechers shoes are great for more than just basketball, but other sports and just hanging out as Mr. T is just chilling by his van, is also reminiscent of the A -Team van.  

Whether Gen-X will choose to buy the Skechers brand over any other may not come down to whether or not Mr. T makes them or inspires them to, but probably more about comfort for this target audience at this point. The shoe commercial bringing back Mr. T is certainly amusing enough on its own. 

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Bed Bath & Beyond Throws in the Towel
Yahoo! Finance: Top Stories / 2023-04-23 21:01



Bed Bath & Beyond (BBBY), the beleaguered home goods retailer, has filed for bankruptcy after months of sounding the alarm and taking increasingly desperate measures to come up with enough cash just to stay afloat.

Bed Bath & Beyond filed for Chapter 11 bankruptcy on Sunday, ending its months-long effort to remain liquid.
The company has begun a liquidation sale but will use bankruptcy proceedings to explore selling its assets.
Attempts to raise capital through convertible share sales, equity offerings, and reverse stock splits failed.
The company filed for Chapter 11 bankruptcy in New Jersey on Sunday, beginning the process of winding down its business. The company has secured $240 million in debtor-in-possession financing with which it plans to finance operations at its nearly 500 stores during the bankruptcy proceedings.

"We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process," said CEO Sue Gove in an announcement of the filing. "We will continue working diligently to maximize value for the benefit of all stakeholders."

Bed Bath & Beyond, once a thriving home goods retailer, struggled to adapt to a changing retail landscape dominated by e-commerce and everything stores like Amazon (AMZN). The company's woes were exacerbated by the pandemic when physical stores became money pits and supply chain snarls wreaked havoc on inventory management.

The company has been sending up flares for months. The company first warned about bankruptcy in January, when it said widening quarterly losses and negative cash flow called into question its "ability to continue as a going concern."

Bed Bath & Beyond missed a $25 million interest payment in February, sinking its shares almost 50%. The company was able to pay within the one-month grace period, avoiding being forced to immediately pay its entire $1 billion debt.

That same month the company tried to sell up to $1 billion worth of convertible shares and warrants in a last-ditch effort to shore up its finances. But the sale was scrapped late last month after grossing just a fraction of the goal.

Instead, Bed Bath & Beyond initiated an "at-the-market" offering of up to $300 million of stock. But by mid-March, the company's share price had dipped below $1 for the first time since 1992, the year of its IPO.

The company was scheduled to hold a special meeting for shareholders in May to approve a reverse stock split.
Enclosures

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Jeremy Siegel says he's 'shocked' at what the Fed's overlooked and sees stocks struggling over the next 6 months
Yahoo! Finance: Top Stories / 2023-04-13 20:3251



Jeremy Siegel, professor of finance at the Wharton School of the University of Pennsylvania.Scott Mlyn/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images
Wharton economist Jeremy Siegel says he's shocked the Fed has overlooked the drop in bank lending.

Banking chaos and tighter credit could spur a big fall in US economic activity, he told CNBC.

He expects stocks to struggle in the next 6 months – and lifted odds of a recession this year.

Wharton professor Jeremy Siegel says he's amazed the Federal Reserve has overlooked tighter lending standards,  while warning US stocks could struggle over the next six months.

"What happened to the banking system, and what I see in data on lending falling off the cliff, really portends a much bigger decline in economic activity," the veteran economist said in a CNBC interview Wednesday.

"I am shocked that no one at the Fed has cited the reduction in lending that has occurred — almost the most in 75 years, actually," Siegel added.

Americans are already feeling the pinch of tighter credit conditions after the failure of Silicon Valley Bank, as banks become more cautious about how much they lend and who they lend to. That's sparked worries that a full-blown credit crunch is coming for the US.

Some think it could also spell tough times for the economy, given the higher cost of borrowing, the lower access to credit and the chances of a bump in unemployment.

Siegel is pessimistic about US stocks and the economy because the Fed is set on continuing to jack up interest rates despite the turmoil in the banking industry.

"I believe the Fed has already done too much. ... Their trajectory was way too high," he said.

According to Siegel, any more rate hikes by the Fed could spell pain for US stocks over the next six months and raises the probability of a US recession this year.

"Even though it might be rough over the next three to six months, unless you're very tactical and very short-term, I'm not a seller," he said, adding that he's still a "very bullish" long-term investor.

The US central bank has lifted benchmark interest rates from almost zero to upwards of 4.75% over the past 12 months — the steepest jump in US borrowing costs since the 1980s. It's trying to quell persistently high inflation, which hit a 40-year high of 9.1% last summer and remained above the Fed's 2% target at 5% year-over-year in March.

Traders expect the Fed to bring in another 25 basis-point rate hike at its May meeting, fed funds futures show. They also expect its policymakers to begin cutting interest rates in July.

But Siegel thinks the Fed will cut rates this year lower than those futures signal, once policymakers have seen a slowdown in inflation and economic activity.

Read the original article on Business Insider

Enclosures

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Jeff Bezos, George Soros, Mark Cuban, and Ray Dalio All Have One Thing in Common: They're Making a Big Bet on This Industry
Yahoo! Finance: Top Stories / 2023-04-13 20:3251

When billionaires jump on the same trend, it's important for investors to take notice. The pieces often don't come together immediately, but these investors have millions of dollars in resources dedicated to getting the most up-to-date information as quickly as possible. They might see trends months in advance that others might not notice until it's too late.

Don't Miss: The House-Printing Robot Shaking Up a $7.28 Trillion Industry

Hedge fund manager George Soros is a polarizing figure, but you'd be foolish not to take notice of some of his investing trends. The Soros Fund Management Holdings 13F was recently released, and a new company tops the list as its biggest holding. Soros recently purchased $325 million worth of Horizon Therapeutics PLC (NASDAQ: HZNP), which now makes up 5.54% of his portfolio, despite previously owning none of it.

Horizon is a biotechnology company developing cures for rare and rheumatic diseases. In a vacuum, this may or may not be significant. But a number of other notable billionaires also are making similar headway into the healthcare industry.

To stay updated with top startup news & investments, sign up for Benzinga's Startup Investing & Equity Crowdfunding Newsletter

Ray Dalio, founder of Bridgewater Associates, the largest hedge fund in the world, is making similar bets. Two of its largest holdings are in Procter & Gamble Co. (NYSE: PG) and Johnson & Johnson (NYSE: JNJ). Collectively, they make up 7.57% of the entire hedge fund's portfolio. In a recent interview, Dalio noted that biotech is one of the current investment areas he finds interesting.

Jeff Bezos's Amazon.com Inc. also is quickly becoming a healthcare powerhouse. Amazon officially closed its $3.9 billion acquisition of One Medical earlier this week. Earlier this year, Amazon rolled out a low-cost subscription service for generic medications to Prime members. This comes after the full rollout of Amazon Pharmacy, other ventures around telehealth and significant investments in the space.

In competition with Amazon, entrepreneur and TV personality Mark Cuban rolled out his Mark Cuban's Cost Plus Drugs Co. in 2021. This has been one of his biggest focal points of the past two years and likely what the billionaire wants to be his legacy. Cuban's startup being an example of the potential upside in startup investing and private markets.

This means at least four prominent billionaires are using some of the biggest companies in the world to invest in healthcare. Following in the footsteps of these magnates in these holdings are a pretty easy and straightforward option. Mark Cuban's Cost Plus Drugs Co. is a private startup, so investors are out of luck. But investors do have options if they're looking to invest in healthcare startup in general. For example, Aura Health is the world's leading marketplace for mentel wellness and used by more than 7 million people worldwide. For a limited time, anyone can invest in Aura Health.

See more on startup investing from Benzinga.

Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

This article Jeff Bezos, George Soros, Mark Cuban, and Ray Dalio All Have One Thing in Common: They're Making a Big Bet on This Industry originally appeared on Benzinga.com

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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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USD/CAD falls to a two-month low. What's next
por Adam Button

Forexlive RSS Breaking news feed / 2023-04-13 21:01

The Canadian dollar is back.

A month ago, the thinking was that the Federal Reserve would continue to hike to levels well-beyond the Bank of Canada's 4.50% overnight rate and that was followed by a crumbling of global growth sentiment on a bank run and oil falling to the lowest levels in a year.

Since the bank run has stabilized but the market is increasingly confident that the Fed is nearly done hiking and OPEC swooped in to reverse the losses in oil.

That's prompted a sharp turnaround in USD/CAD from 1.3862 on March 9 to 1.3338 currently -- a two-month low.

Can USD/CAD continue to fall?

Technically, the pair will soon run into a series of previous lows stretching from 1.3218 to 1.3273. If those don't break, it would reinforce a pattern of higher lows that's been ongoing for nearly two years. If that cracks, it would highlight and confirm a double top below 1.40 with a measured target of 1.26.

To get there, I would need to grow more confident in the outlook for global growth and energy. That could come from a further rise in crude prices due to OPEC cuts but that would need to be matched on strengthening global demand, particularly from China.

On the domestic side, the Canadian housing market is at an inflection point as the spring real estate market ramps up. So far, pricing is holding up ok but I don't have confidence that demand will last. Every day homeowners are hit with rate resetting higher on 5-year mortgages and that could put more homes on the market.

So for now, I'm cautious on further declines in USD/CAD. There's good support nearby so the risk-reward doesn't argue for selling now but I'm open to the idea of selling on a break of 1.3200.

This article was written by Adam Button at www.forexlive.com.

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Norway counts the cost of its new wealth tax as billionaires flee to Switzerland
Yahoo! Finance: Top Stories / 2023-04-10 21:111



Norway - Natnan Srisuwan/Moment RF
"A difficult choice has been made. I've moved from Asker, Norway, to Lugano in Switzerland," Norway's biggest taxpayer, and the largest shareholder of investment firm Aker ASA, Kjell Inge Røkke wrote to the rest of the board in an open letter last September.

Mr Røkke, an industrial tycoon with an estimated net worth of Nkr 19.6bn (£1.5bn), is among 50 billionaires and millionaires to have left Norway over the past year as they were hit with higher rates of wealth tax.

Record numbers of the country's richest residents have fled since the Labour-centre coalition increased wealth tax rates by 0.1 percentage points, costing the government tens of millions in lost tax revenue. The 50 high earners, with a combined net worth of more than Nkr 40bn (£3bn), make up more than the total number who have left the country for Switzerland since 2009, according to Norwegian newspaper Dagens Naeringsliv.

It is expected that even more wealthy Norwegians will leave because of the tax raid which kicked in last November.

The exodus from Norway, which is one of just four in the OECD to still impose a wealth tax, may be noticed by the Treasury as Labour discusses ways to make the rich pay more tax in the UK. Sir Keir Starmer is believed to be considering various forms of wealth taxation – including a capital gains tax raid and a removal of various tax-free exemptions for the rich, should Labour win the next election.

Norway's wealth tax has long been a thorn in the side of the country's super-rich. It is one of only a handful of OECD countries to impose a wealth tax on the global net worth of its citizens – defined as total assets minus total debt.

In 1990, 12 OECD countries, all in Europe, levied wealth taxes. However, most of them repealed these in the 1990s and 2000s due to growing fears that in a globalised world the wealthy would simply take their riches elsewhere. France was the last to scrap its wealth tax in 2017, after losing an estimated 60,000 millionaires between 2000 and 2016, according to research by intelligence firm New World Wealth.

Now the only European countries to levy a wealth tax are Norway, Spain and Switzerland.

This is despite the fact that wealth taxes raise surprisingly little for the government. Only a tiny proportion of Norway's tax take – about 1pc, according to the OECD – comes from wealth taxes. Dan Neidle of Tax Policy Associates, a non-profit, said: "Norway is probably the developed country with the most significant wealth tax, but it's still not very significant."

This is in part due to discounts that apply to primary residence and unlisted shares.

Mr Neidle said these rules have some "weirdly distortive effects" on behaviour. "That creates an incentive to avoid listing your business, and put as much of your net worth into your house as possible. These are not great outcomes from a policy perspective."

Under Norway's tax policy, an individual with worldwide net wealth above Nkr 1.7m (£130,000) is taxed at 1pc on everything above this threshold. Of this tax take, 0.3pc goes to the state and the remaining 0.7pc goes to the person's municipality. Those with over Nkr 20m (£1.5m) pay a rate of 1.1pc. This extra 0.1pc goes to the state.

Mr Røkke did not give any financial reasons for the move, adding that although Lugano is "neither the cheapest nor has the lowest taxes" it is "a great place with a central location in Europe".

Other wealthy individuals who have recently abandoned Norway include Tore Ivar Slettemoen, co-founder of battery company Feyr, and Ninja Tollefsen, daughter of property investor Ivar Tollefsen. Fredrik Haga, 31-year-old co-founder of cryptocurrency data business Dune, has also gone to Switzerland. Mr Haga, who has most of his wealth tied up in the rapidly growing company, told the Financial Times that he was worried his next tax bill would be several times his disposable income.

It may seem strange that so many Norwegians are moving to Switzerland, a country that has a wealth tax of its own. In fact, Switzerland makes even more from wealth taxes than Norway does – making up about 4pc of the total tax take. However, the country offers deals for foreigners that place it high on the list of wealthy individuals in search of a new home.

In certain Swiss cantons, a person who is living but not working in Switzerland can opt for a favourable lump-sum tax based on their expenditures and standard of living rather than their worldwide income and assets.

In a desperate attempt to stop high taxpayers leaving the country, Norway has said it is investigating the possibility of an "exit tax" where individuals are taxed on saved capital income the moment they move out of the country.

Its government has already taken a major step to stop its wealthiest individuals flowing out of the country when, last November, it repealed "the five-year rule" that meant wealthy Norwegians could sell their shares without paying tax on the gain if they had lived abroad for more than five years.

Norway has been led by a Labour-Centre coalition government since the parties won by a landslide in September 2021 bringing to an end eight years under its Conservative Party led by Erna Solberg.

The centre-left government's state budget last autumn, which raised wealth taxes, was welcomed by many in the left-leaning party. Jonas Gahr Støre, the prime minister, told his Labour Party members at their national meeting in September: "Shifting power in society never happens without friction and some noise. A more fair tax system challenges those with means who don't want to contribute more to society. We have to be prepared for that."

The OECD has warned that wealth taxes have a negative impact on long-term growth, damaging entrepreneurship and risk-taking.

In Scotland there are mounting concerns that a 1 percentage point rise in the two top rates of income tax will lead to a "brain drain" across the border. This month, the higher rate of tax in Scotland has increased from 41pc to 42pc, while the additional rate has gone up from 46pc to 47pc. By comparison, the additional rate in England is 45pc.

Labour members have openly called on Sir Keir to impose some form of wealth tax. The Labour leader has denied he is planning to introduce such a policy, but he is nonetheless planning to target forms of wealth.

Sir Keir wants to remove private schools' charitable status, meaning they lose their VAT exemption – a move that would cost families thousands of pounds a year in private school fees. According to investment firm Waverton, a family currently paying £31,310 a year to put two children through private school would see their bills go up by £6,262 annually if the VAT exemption was cut.

The party has also promised to remove the "non-dom status" which allows UK residents who live abroad not to pay UK tax on overseas income. It is thought Labour would significantly shorten the window down from 15 years, the current timeframe before the status expires. Tax experts have warned that slashing the status could drive the economic elite out of the country.

It is understood that Labour also wants to raise tax for second homeowners, by blocking them from a planned freeze on council tax and increasing capital gains tax rates in line with income tax rates.

Of the proposed wealth taxes in the UK, Mr Neidle said: "We don't really know what the impact of these taxes would be. But if existing wealth taxes damage growth, then the proposals for more ambitious wealth taxes would presumably be more damaging."

Enclosures

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Key Words: Hedge-fund billionaire Paul Singer still sees dangerous 'bubble securities, bubble asset classes' in markets
MarketWatch.com - Top Stories / 2023-04-10 22:21



""Credit collapse, although terrible, is not as terrible as hyperinflation in terms of destruction wrought upon societies.""

— Paul Singer, hedge-fund manager and founder of Elliott Management
That's hedge-fund billionaire Paul Singer of Elliott Management, on why he thinks a deep recession and credit collapse will be necessary to purge financial markets of excesses created by more than a decade of easy-money policies.

"I think that this is an extraordinarily dangerous and confusing period," Singer told The Wall Street Journal, in a recent interview, warning that trouble in markets may only be getting started a year into the Federal Reserve's rate hikes.

"Credit collapse, although terrible, is not as terrible as hyperinflation in terms of destruction wrought upon societies," he said. "Capitalism, which is economic freedom, can survive a credit crisis. We don't think it can survive hyperinflation."

Singer, called a "doomsday investor" by the New Yorker, including for his epic battle with Argentina over its defaulted debt, in't a fan of sweeping banking regulations from the Dodd-Frank Act of 2010, or prolonged market interventions by global central banks in the wake of the 2008 global financial crisis, or cryptocurrencies.

He called crypto, "completely lacking in any value," in his WSJ interview. He also said: "There are thousands of cryptocurrencies. That's why they're worth zero. Anybody can make one. All they are is nothing with a marketing pitch—literally nothing."

Bitcoin BTCUSD, +3.44% was edging closer to the $30,000 mark on Monday, but still off its roughly $67,000 record price in November 2021, according to CoinDesk.

Singer worries the Fed and other central banks will respond to the next downturn by picking up their recent playbook of slashing interest rates, and potentially resuming large-scale asset purchases.

To bolster his point, Singer called the regulatory response to the collapse of Silicon Valley Bank and Signature Bank, including the guaranteeing of all deposits from the two lenders akin to "wrapping all market movements in security blankets."

"I know these guys got fired, but all concepts of risk management are based around the possibilities of loss," he said. "Take it away, it's going to have consequences."

With that backdrop, Singer said there may be only a few places for investors to ride out the storm that he sees brewing.

"At such times, some consider the safest bet to be relatively short-term U.S. government debt," Singer said, adding that "such debt pays a decent return with virtually no chance of a negative outcome."

Singer also said having some gold GC00, -0.99% in portfolios may makes sense.

The 2-year Treasury rate TMUBMUSD02Y, 4.016% was around 4% on Monday, while the 10-year yield TMUBMUSD10Y, 3.422% was at 3.24%, according to FactSet. Stocks were trading between small gains and losses, with the S&P 500 index SPX, +0.10% about 0.1% higher, at last check.

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How to fix the International Monetary Fund | Leaders
The Economist Print edition / 2023-04-05 17:1151
EVER SINCE it was founded in 1944, the imf has had to get used to reinventing itself. Today, however, it faces an identity crisis like none before. The fund, whose annual spring jamboree kicks off on April 10th, is supposed to provide a financial safety-net for countries in distress. Yet, although the poor world is in the throes of the worst debt crisis in decades, the fund seems all but unable to lend. An extra $1trn has been committed to the IMF since the covid-19 pandemic began; however its loan book has grown by a paltry $51bn.

The fund is paralysed because it is a multilateral institution that aspires to represent the whole world, at the same time as being a club which is controlled by America and its Western allies. That worked when America was the world's dominant power and was intent on pursuing liberal internationalism. Now China is trying to build an alternative order and America is turning inward. Unless the fund acts soon, its ability to do its job as a crisis lender will be in question.

In its infancy the imf's main role was to promote balanced trade and manage the Bretton Woods system of fixed exchange rates. It was only when those arrangements collapsed that it shifted its focus to another of its missions: providing emergency cash, with strings attached, to countries in crisis. From the 1980s, and especially during the Asian financial crisis in 1997, the fund became known for its unyielding application of economic orthodoxy. In the 2010s it revised some of its views on austerity and capital controls, and tried to promote its softer side.

Today the fund's role as a crisis lender is both shrunken and less successful. Many big emerging markets have amassed vast quantities of foreign-exchange reserves to guard against currency crises. Some 30% of the fund's outstanding lending has gone to just one borrower, Argentina. The imf lends to countries like Egypt and Pakistan, which are strategically important to America. But these have gained licence to put off reform indefinitely; the fund has been urging Pakistan to mend its sales tax since at least 1997. And the imf is no longer the only crisis lender in town. Gulf countries including Saudi Arabia now offer emergency cash, often using obscure methods, say by depositing money at the borrower's central bank.

The main problem is that China has become a big creditor to the poorest countries, whose needs are small but urgent. Rising interest rates and the pandemic have left at least 21 in default or seeking debt restructuring, and many more look fragile. Yet China is reluctant to participate in debt write-downs, in part because it objects to the imf not bearing its share of losses—a vital safeguard for a lender of last resort. The fund has not overseen a single write-down involving China since the crisis started.

Without them, countries' finances may not be sustainable even as creditors are bailed out. America worries about imf funds flowing into China's pockets. Although many loans have been approved, most are supposed to be conditional on restructuring that has not been agreed on—much of the cash intended for Suriname, for example, has been in limbo for more than a year. As the fund has floundered, China has boosted its own emergency lending.

Together these trends risk making the imf irrelevant—just like another global institution, the World Trade Organisation, which has also been sabotaged, this time by America. With debt talks frozen, the fund is conjuring up new goals, such as lending to help with climate change. That has caused a turf war with the World Bank, which is better suited to project finance.

The fund does not need a new mission. It needs the ability to get tough on rogue creditors. For some the solution is for it to align itself explicitly with the West, perhaps by implementing restructurings that ban countries from ever again borrowing from unco-operative official creditors. But even if such a policy were credible, it would be a mistake to freeze out China entirely. Not only would it be against the spirit of the fund's mission, but if countries are forced to make a once-and-for-all choice between financial spheres, some may well choose China's.

Instead the imf should make borrowers suspend payments on their debts to obstructive official creditors for as long as a fund programme is active. That would circumvent and punish lenders that block restructuring, while leaving open a path to their participation should they decide to behave constructively. The IMF would remain open and global. It would not push China away, but save a seat at the table should it choose to take one. Such a strategy would echo the fund's inclusive approach to several communist states in the cold war.

Though the imf should not close itself off, the sooner it can bypass today's blockages, the better. Helping countries in crisis is much harder and less glamorous than it used to be. But it is still essential. ■

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Bills, Notes, Or Bonds?
por Tyler Durden

Zero Hedge / 2023-04-05 17:30294
Bills, Notes, Or Bonds?
Authored by Michael Lebowitz via RealInvestmentAdvice.com,

260 Fed meetings will occur between the issuance and maturity of a 30-year Treasury bond. There will be 260 times when the Fed raises, lowers, or does nothing with Fed Funds. In that perspective, why should a bondholder care what the Fed does or doesn't do at the next few meetings? We ask the question because we get many questions from potential bond investors on whether they should buy bills, notes, or bonds based solely on expected Fed policy.

Many inquiries are concerned about buying bonds too soon because they fear the Fed may still raise rates once or twice. While the Fed is an important variable in the performance of all bills, notes, and bonds, its actions significantly impact shorter-term bills and have less influence on longer-term notes and bonds. 

To better appreciate what drives yields across the spectrum of Treasury securities, we share some evidence on what factors influence bill, note, and bond yields. This exercise will help better assess which maturity bond may best serve your needs while effectively reflecting your economic and Fed outlook.

For a refresher on bond basics, we recommend reading our article Treasury Bonds FAQ. Additionally, watch our YouTube appearance, Bonds Explained Simply, with Adam Taggart of Wealthion.

Bond Market Lingo
Before moving on, it's worth a quick review of what constitutes bills, notes, and bonds.

Bills encompass all securities issued with a maturity of one year or less. They are sold at a discount to par and do not pay a coupon. Bill investors instead receive the difference between the purchase price and par at maturity.

Notes and bonds pay coupons and are initially auctioned at or very close to par. Bonds include all maturities of more than ten years, while notes include anything between one year and ten years.

Short-Term Bills Are Bets on the Fed
The shorter the bond term, the greater its yield is influenced by the Federal Reserve. Therefore, the most significant factor is the Federal Reserve if you are considering anything between a one-month and six-month bill. Of course, what the Fed does or doesn't do depends on economic data and the financial markets.

The graph below shows that 3-month Treasury bill yields are nearly perfectly correlated with the average of Fed Funds and the market implied forward Fed Funds rate (rolling three months Fed Funds futures contract).


For short-term bill investors, the most critical factor in deciding which maturity bill to buy is your expectation of monetary policy in the coming meeting or two.

If you think future expectations for the Fed Funds rate are too high, you are best served to lock in the longer six-month yield. Conversely, if you think they are too low, buy a shorter three-month bill and another three-month one in three months. If you are correct, your combined return will exceed the six-month yield. 

The equation below closely approximates the market's future yield expectation. In the example, we solve for rate A (a 3-month yield, three months from now). We assume a 5.00% 3-month bill and a 5.20% 6-month bill:

(3 X 5%) + (3 X A%) = (6 X 5.2%)

15           + 3 X A      = 31.2

3 X A =  31.2-15 = 16.2

A = 16.2/3 = 5.40%

If the future 3-month bill yields 5.41% or more, you are better off buying the 3-month bill and buying a second one when it matures. If not, the six-month bill is the better decision.

Long-Term Notes and Bonds
Unlike bills, notes and bonds better reflect longer-term economic and inflation expectations.

Treasury investors, like all investors, strive to earn a positive real return. Such means they should buy assets that provide a positive return after subtracting inflation. They want to increase, not decrease, their purchasing power.

Given what longer-term bond investors seek, they tend to focus more on the economy and inflation and less on what the Fed will do at the next one or two meetings. That said, Fed Funds are still a significant factor, as shown below. The graph below plots ten-year notes versus Fed Funds.



The R-squared (.75) is statically high but far from the near-perfect correlation we showed with 3-month bills. While the relationship is strong, there is a wide variance in the instances versus the trend line. If you recall, there was minimal variance in the 3-month bill vs. Fed Funds plot.

The following two plots show that ten-year yields have near equally strong relationships with three-year GDP and inflation trends. 



Yield Curves
The graph below compares the 3-month T-bill and 10-year note yields and their moving averages.



While both securities trend in the same direction, the change in the yield difference over time is volatile. To highlight better, we show below the 3-month bill/ 10-year note yield curve. The curve is the difference between the two yields.



We hope this is your aha moment. When buying a bill, note, or bond, the bet is on the Fed. But note and bond investors, unlike bill investors, also care about future economic trends. The sharp gyrations in the graph above make that abundantly clear. It also those gyrations that dictate relative returns for bills, notes, and bondholders.

Current Situation
The yield curve is currently inverted by 1.47%. Ten-year investors are willing to sacrifice one and a half percent versus what they could earn in a three-month bill. They make such an investment because, in time, they believe economic growth and inflation will be slower than they are today. As such, they are comfortable locking in 3.35% for ten years and passing on the opportunity to buy bills and make more for the next few months but possibly a lot less for the next nine years.

Further, if long-term bond investors are correct, the price of notes and bonds will appreciate much more than shorter-term notes and bills. If the two-year and ten-year note rates decline by 2%, the two-year note investor could see their price rise by about 3.75%. Ten-year investors should expect a 17% gain. For more on bond math and the potential gains of losses associated with yield changes, please read our article, Treasury Bond FAQ.

Summary- The Case for Long Bonds
We think the economy and inflation will revert to pre-pandemic trends. Such means GDP and CPI will be at or below 2%. As a result, Treasury note and bond yields will likely fall to similar levels. We like locking yields well above those rates for ten or more years. If correct, we may monetize the yield decline and re-invest the funds in riskier bonds, stocks, or another asset class offering higher returns when the time is right. The timing of such a trade may not be perfect. Still, in a disinflationary and slow economic growth environment, the long-term benefits of owning notes or bonds versus bills outweigh short-term price volatility and the opportunity cost of higher bill yields for another quarter or two.

Today, the Fed risks aggravating the banking crisis and a recession because they may have already raised rates too far. It is quite possible that even if the Fed hikes rates more, notes and bonds may fall in yield. Bond investors are looking ahead and realizing the higher the Fed goes, the more crippling the effects on the economy and inflation.

Tyler Durden Wed, 04/05/2023 - 10:20

Enviado do meu Galaxy

New Ceramic Battery Could Replace Lithium-Ion Batteries
por Brian Westenhaus

Oilprice.com / 2023-04-03 20:0460


Researchers at Vienna University of Technology have developed an oxygen-ion battery based on ceramic materials that has a longer lifespan than lithium-ion batteries.
The new battery can be regenerated and does not require rare elements, making it an ideal solution for large energy storage systems.
While the battery's energy density is lower than that of lithium-ion batteries, its strengths lie in its long service life and incombustible properties.
Scientists at Vienna University of Technology have invented a new oxygen ion battery chemistry based on ceramic materials. If it degrades, it can be regenerated, therefore it potentially has an extremely long lifespan. Also, it does not require any rare elements and it is incombustible. For large energy storage systems, this could be an optimal solution.

Power and energy density comparison chart of modern battery chemistries and a fuel cell with a plot of the new oxygen ion chemistry. 

Lithium-ion batteries are common today – from electric cars to smartphones. But that does not mean that they are the best solution for all areas of application. TU Wien has now succeeded in developing an oxygen-ion battery that has some important advantages. Although it does not allow for as high of energy densities as the lithium-ion battery, its storage capacity does not decrease irrevocably over time: it can be regenerated and thus may enable an extremely long service life.

In addition, oxygen-ion batteries can be produced without rare elements and are made of incombustible materials. A patent application for the new battery idea has already been filed together with cooperation partners from Spain. The oxygen-ion battery could be an excellent solution for large energy storage systems, for example to store electrical energy from renewable sources.

The paper describing the research 'Rechargeable Oxide Ion Batteries Based on Mixed Conducting Oxide Electrodes.' has been published in the journal Advanced Energy Materials.

Ceramic materials as a new solution

Alexander Schmid from the Institute for Chemical Technologies and Analytics at TU Wien noted, "We have had a lot of experience with ceramic materials that can be used for fuel cells for quite some time. That gave us the idea of investigating whether such materials might also be suitable for making a battery."

The ceramic materials that the TU Wien team studied can absorb and release doubly negatively charged oxygen ions. When an electric voltage is applied, the oxygen ions migrate from one ceramic material to another, after which they can be made to migrate back again, thus generating electric current.

Professor Jürgen Fleig explained, "The basic principle is actually very similar to the lithium-ion battery. But our materials have some important advantages."

Ceramics are not flammable – so fire accidents, which occur time and again with lithium-ion batteries, are practically ruled out. In addition, there is no need for rare elements, which are expensive or can only be extracted in an environmentally harmful way.

Tobias Huber expanded the explanation with, "In this respect, the use of ceramic materials is a great advantage because they can be adapted very well. You can replace certain elements that are difficult to obtain with others relatively easily."

The prototype of the battery still uses lanthanum – an element that is not exactly rare but not completely common either. But even lanthanum is to be replaced by something cheaper, and research into this is already underway. Cobalt or nickel, which are used in many batteries, are not used at all.

High life span

 But perhaps the most important advantage of the new battery technology is its potential longevity.

"In many batteries, you have the problem that at some point the charge carriers can no longer move," said Alexander Schmid. "Then they can no longer be used to generate electricity, the capacity of the battery decreases. After many charging cycles, that can become a serious problem."

The oxygen-ion battery, however, can be regenerated without any problems: If oxygen is lost due to side reactions, then the loss can simply be compensated for by oxygen from the ambient air.

The new battery concept is not intended for smartphones or electric cars, because the oxygen-ion battery only achieves about a third of the energy density that one is used to from lithium-ion batteries and runs at temperatures between 200 and 400° C. The technology is, however, extremely interesting for storing energy.

Alexander Schmid makes the case this way, "If you need a large energy storage unit to temporarily store solar or wind energy, for example, the oxygen-ion battery could be an excellent solution. If you construct an entire building full of energy storage modules, the lower energy density and increased operating temperature do not play a decisive role. But the strengths of our battery would be particularly important there: the long service life, the possibility of producing large quantities of these materials without rare elements, and the fact that there is no fire hazard with these batteries."

***

This battery technology does have a serious level of promise. Even at only a third of lithium ion capacity the longevity has to have a very large impact. A daily cycled lithium ion battery should perform well into the third year, but how would that compete with a battery that might last 20 years or more? Would the lithium ion solution of the same capacity cost 80% less?

The metric of concern is the cost to make the ceramic and package it. Building a service center of these batteries might be lower cost or not, but a comparison to lithium ion needs to come.

The problem is going to be the costs to heat the battery sets and keep them at 200 to 400° C. That's a bit under the ignition temp of paper up past the temperature of dry steam.

But nothing mentioned exceeds or even really heavily challenges conventional engineering. So. Lets hope getting a prototype up and running happens soon to find the unforeseen matters that need exposed.

By Brian Westenhaus via New Energy and Fuel 

More Top Reads From Oilprice.com:

Enviado do meu Galaxy

Stock Market Sell-Off: Where to Invest $500 Right Now

por newsfeedback@fool.com (Jon Quast)

The Motley Fool / 2023-04-01 14:179


I don't know how much $500 is to you personally, but I do know it's a lot of money to many people.

According to research by The Motley Fool, the median annual family income in the U.S. was almost $70,000 in 2021, which works out to about $5,800 per month. Let's say the median family saved 10% of monthly income for investing in stocks -- a percentage worthy of applause. For such a money-smart family, $500 would almost be an entire monthly investment.

With this in mind, I'm treating a $500 investment as one whole position in a diversified portfolio -- if you invest the Motley Fool way, you'll be looking to build a portfolio of at least 25 companies. And buying stocks during a pullback like right now (the S&P 500 is down 17% from its all-time high) is a great time to do it.

However, rather than shortchange you with just one idea for your portfolio today, I'll be giving you three different ideas: equipment-rental company United Rentals (URI 2.48%), furniture company Lovesac (LOVE 4.75%), and online education platform Udemy (UDMY 3.28%). And each idea could serve a different purpose in a portfolio.

1. United Rentals: The safe dividend-growth opportunity
If I were starting out today, I would want to begin by laying a strong foundation for my portfolio. And United Rentals is the kind of company that can be foundational, in my opinion.

It has a long history of market-beating returns. And it just started paying a dividend, leaving plenty of room to grow it in the future.

According to management, United Rentals finished 2022 with 17% market share in the equipment-rental space in North America with nearly 1,500 locations. It has over 1 million equipment units (backhoes, water pumps, scissor lifts, and more), which are valued at nearly $20 billion. That scale is hard to replicate and gives it a competitive advantage.

As long as people need equipment to do jobs, United Rentals has a reliable business. Moreover, it has a very profitable business: It has generated positive free cash flow in 17 of the past 20 years. And management expects more than $2 billion in free cash flow in 2023, which should be around a 15% margin.

Management has options for its cash flow, including acquiring other companies and repurchasing shares; it frequently does both. But it also just started using some of its cash to pay a quarterly dividend of $1.48 per share. For perspective, that's only about 20% of its earnings, leaving plenty of room to increase the dividend in the future.

And if United Rentals isn't up your alley, don't worry: There are other safe, dividend-growth opportunities out there for laying a strong foundation in your portfolio.

2. Lovesac: The profitable growth company
United Rentals' revenue is up around 66% over the past five years. But that doesn't hold a candle to Lovesac's revenue growth of more than 400% during this time. The company's high-quality beanbag chairs and sectional couches are increasingly in demand.

And high margins allow it to turn a profit while it grows. This is a great kind of company to add to a portfolio as you build beyond your foundational stocks.

On the surface, one would think that Lovesac is just another furniture company. But it has some important distinctions. Nearly 90% of sales come from its sectional couches, called Sactionals. And this has many advantages for the business.

For starters, Lovesac is constantly updating its Sactionals. In 2021, it released its StealthTech technology, which provides immersive sound and wireless charging for phones. In a brilliant move, management makes all new Sactional add-on products backward compatible so existing customers can spend more over time. In this way, Lovesac can extract more lifetime value from its customers than many of its peers can.

Moreover, it has advantages because all Sactional sections are uniform in size. Showrooms need little space to demonstrate how to configure them in multiple ways. Inventory stacks nicely in the back. And e-commerce orders -- about one-quarter of sales -- ship easier than typical bulky furniture. This helps Lovesac showrooms have a payback period of under one year, which is very important for retail companies with physical stores.

Lovesac's unit economics support its profitability. It earned $28 million in net income in its recently completed fiscal 2023 and expects $30 million to $36 million in its fiscal 2024.

And the company still has great revenue growth prospects. It has 195 showrooms right now but plans to more than double its store count over the next five years. Assuming the popularity of its products continues, this profitable growth stock could outperform the average for the S&P 500.

3. Udemy: The speculative stock with a high upside
According to third-party research group Arizton, the market size for e-learning is around $214 billion worldwide. But this is expected to surpass $475 billion by 2027. And it's clear that much of this spending will come from businesses looking to increase their workers' skills. HR media platform People Matters estimates that corporate e-learning could be a $370 billion market. 

So Udemy has an enormous runway for growth, considering that annual recurring revenue (ARR) for its enterprise segment was only $372 million at the end of 2022.

Udemy's education content is generated by users, not the company. It is merely the distribution platform connecting educators with anyone who wants to learn. User-generated content businesses typically have good margins. And indeed, Udemy's gross margin is 56%.

Udemy is not profitable; it had a net loss of $154 million in 2022. But there's a simple reason to hope the company quickly turns this around. Its enterprise segment has a more robust gross margin of almost 67%. And this part of the business is growing faster than the business as a whole.

As a whole, revenue was only up 22% year over year in 2022. But ARR for its enterprise segment was up 57%. Projecting this rapid growth forward, Udemy's gross margin should creep higher, potentially improving its bottom line substantially, which could make this a winning investment.

On the flip side, Udemy might never turn the corner on profits. And if it doesn't, chances are slim that it will enrich shareholders. That's why Udemy (and other promising tech stocks that are still unprofitable) might be best to buy only after you've built your portfolio around 25 or more companies that have higher chances of positive returns, like United Rentals and Lovesac.

However, considering it trades at less than two times trailing sales, I'd say now is an opportune time to take a chance on Udemy. There are risks with this stock, but at least the valuation risk is minimal here.

Personally, my retirement portfolio is already quite large with over 30 stocks. And that's why of these three companies, Udemy is the one I'd consider buying today. But I believe all three could be good investments from here.

Jon Quast has positions in United Rentals. The Motley Fool recommends Lovesac. The Motley Fool has a disclosure policy.

Enviado de Outlook para Android

Deep Dive: This stock ETF keeps beating the S&P 500 by selecting for quality

MarketWatch.com - Top Stories / 2023-04-01 15:37



There are many approaches to building stock portfolios for the long term, but all of them require patience. And chasing last year's best performers can hurt your long-term results, as Mark Hulbert explained.

And even if you are patient, a long-term active strategy may underperform broad indexes and the exchange-funds that track them. One reason for underperformance might be that the actively managed funds have higher expenses. Another reason is that the S&P 500 SPX, +1.44% has been so top-heavy, with the largest technology players dominating its performance during the bull market through 2021.

Even now, following an 18% decline in 2021, and a 4% return in 2023, the top five companies held by the SPDR S&P 500 ETF Trust SPY, +1.41%, which tracks the benchmark index, make up 21.3% of the portfolio. These are Apple Inc. AAPL, +1.56%, Microsoft Corp. MSFT, +1.50%, Amazon.com Inc. AMZN, +1.26%, Nvidia Corp. NVDA, +1.44% and Alphabet Inc. GOOG, +2.65% GOOGL, +2.81%. (All returns in this article include reinvested dividends.)

The last four companies listed above are also held by the $7.2 billion Van Eck Morningstar Wide Moat ETF MOAT, +1.60%, but this fund uses a modified equal-weighted strategy as it is reconstituted and rebalanced every quarter. The fund was established in 2012. It tracks Morningstar's Wide Moat Focus Index.

Here are MOAT's returns through March 28, compared with those of SPY, over various periods:

ETF Ticker 2023 1 year Three-year average Five-year average 10-year average
VanEck Morningstar Wide Moat ETF MOAT, +1.60% 9.1% -4.4% 19.8% 13.1% 13.2%
SPDR S&P 500 ETF Trust SPY, +1.41% 3.8% -11.7% 17.8% 10.7% 11.8%
Source: FactSet
Here's a 10-year chart of the ETFs' total returns:


FactSet
During an interview, Brandon Rakszawski, director of product management at VanEck, said the Morningstar Wide Moat Focus Index reflects that firm's own research, with its analysts assigning "economic moat" ratings to companies they believe have special, long-term competitive advantages. Going further, he described the eligible universe that MOAT might invest in as a group of only about 145 companies.

The list is narrowed down for value. "A lot of investors want to own great companies, so they tend to trade at high valuations," Rakszawski said. "So the strategy tends to go toward those that are underpriced at any time."

The Morningstar analysts assign an "intrinsic value per share" for each eligible company, using a long-term discounted cash flow model. Then those values are compared with current stock prices as the index and the fund's portfolio are adjusted quarterly. The fund current holds 49 stocks.

An index such as the S&P 500 is weighted by market capitalization which means it is "rewarding success" as stocks of large-cap companies that soar can be weighted heavily. A typical equal-weighted approach to an index fund is meant to "allow smaller companies to participate," Rakszawski said. But MOAT's weighting approach is more about "allowing each stock to have its valuation dynamics play out for the portfolio," he said.

He summed up five sources of competitive advantages cited by the Morningstar analysts, as they assign economic moat ratings.

Switching cost — This benefits companies such as Salesforce.com Inc. CRM, +1.62%, which is held by MOAT currently. The cost of switching to another software provider includes the time spent making the decision, IT resources used to make the switch and retraining staff. It is typically easier not to make a move.
Intangible assets — These include intellectual property, brands, patents and government licenses. Rakszawski cited Starbucks Corp. SBUX, +2.77% as a company with a very strong brand. It is not currently held by MOAT. He also pointed to pharmaceutical companies "that can charge more" for patented brands.
Network effect — This is a competitive advantage that builds as a user base grows. "One of the more controversial holdings [of MOAT] is Meta, with its Facebook platform," Rakszawski said. Meta can benefit as its advertisers decide to spend more, based on increasing user traffic flowing from Facebook.
Cost advantage — "Morningstar looks at each company to see if they can keep their input costs lower, to realize higher margins or even to undercut competitors," Rakszawski said. He named Walmart Inc. WMT, +1.22%, an occasional holding of MOAT, as an example.
Efficient scale — Some markets are dominated by only one or two players. Examples include railroads, although MOAT holds none currently.
Don't miss: 11 stocks in the S&P 500 expected to form an exclusive growth club for investors

Enviado de Outlook para Android

Saudi Arabia Joins Shanghai Cooperation Organization As It Embraces China

por Tyler Durden

Zero Hedge / 2023-04-01 16:3513
Saudi Arabia Joins Shanghai Cooperation Organization As It Embraces China
While the US continues to splinter and cannibalize itself as it turns into a third world country, China is expanding its zone of economic and military influence that covers virtually all global commodity producers as it prepares for the next stage in the Sino-US cold war.

On Wednesday, Saudi Arabia's cabinet approved a decision to join the Shanghai Cooperation Organization, as Riyadh builds a long-term partnership with China despite - or perhaps due to - US security concerns. Saudi Arabia has approved a memorandum on granting the kingdom the status of a dialogue partner in the Shanghai Cooperation Organization (SCO), state news agency SPA said.

The SCO is a political and security union of countries spanning much of Eurasia, including China, India and Russia. Formed in 2001 by Russia, China and former Soviet states in Central Asia, the body has been expanded to include India and Pakistan, with a view to playing a bigger role as counterweight to Western influence in the region. Iran also signed documents for full membership last year.


Joining the SCO was discussed during a visit by Chinese President Xi Jinping to Saudi Arabia last December, sources told Reuters, adding that dialogue partner status will be a first step within the organization before granting the kingdom full membership in the mid-term.

The decision followed an announcement by Saudi Aramco which raised its multi-billion dollar investment in China on Tuesday, by finalizing a planned joint venture in northeast China and acquiring a stake in a privately controlled petrochemical group.

Participants of the Shanghai Cooperation Organization summit attend an extended-format meeting of heads of SCO member states in Samarkand, Uzbekistan
Riyadh's growing ties with Beijing have raised security concerns in Washington, its traditional ally but increasingly less so, especially following Biden's catastrophic attempts to force OPEC+ to boost oil production, an overture which backfired spectacularly and to global humiliation by the Biden admin.

Meanwhile, Washington says Chinese attempts to exert influence around the world will not change U.S. policy toward the Middle East, which of course is a lie.

Saudi Arabia and other Gulf states have voiced concern about what they see as a withdrawal from the region by main security guarantor the United States, and have moved to diversify partners, shifting their alliance to the biggest US challenger in the global arena. Washington says it will stay an active partner in the region.

Countries belonging to the organisation plan to hold a joint "counter-terrorism exercise" in Russia's Chelyabinsk region in August this year.

Tyler Durden Sat, 04/01/2023 - 11:00

Enviado de Outlook para Android