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Americans See $5 Trillion Disappear In Stock Market Crash

With U.S. wealth numbers in decline, what can investors do to stem the tide?

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With U.S. wealth numbers in decline, what can investors do to stem the tide?

Is the world’s most prosperous nation growing less prosperous?

You bet -- and by trillions of dollars.

According to a new research note from JP Morgan Chase & Co., total U.S. wealth has plummeted by $5 trillion in 2022, down from $13 trillion to $8 trillion, mostly from a sour stock market.

But it’s not just about stocks.

The U.S. economy, as measured by gross domestic product (GDP), slid by 1.4% during the first quarter of 2022, primarily due to high inflation and a massive U.S. trade deficit. 

That could have the U.S. careening into recession territory, which the National Bureau of Economic Research cites as a “significant decline in economic activity that is spread across the economy and lasts more than a few months.”

Shades of 1979?

While economic events are dynamic and happen in real-time, where do economists place the current wealth drought from a historical point of view?

“Given the current high rate of inflation and related unique set of geo-economic factors targeting the supply side of the global economy (the pandemic, Russia's invasion of Ukraine, supply chain concerns, and production slowdowns in China), the closest historical comparison would be 1979,” Dr. Krieg Tidemann, a professor of economics at Niagara University, told TheStreet.com. “However, there are limits to this comparison. Even though the 8% rate of inflation is at its several decade's peak, it is considerably below the 22% inflationary peak experienced during the stagflation economy of 1979.”

Unlike 1979, the trillions of dollars lost to Americans in 2022 comes right after a year where homeowners equity was booming and retirement funds were fairly robust. Now, home values are beginning to slide and retirement assets are not far behind, thanks to a declining stock market.

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“When we think of household wealth in the United States, we’re primarily focusing on retirement savings and homeowner equity,” Tidemann said. “Given that home values have generally appreciated through the pandemic period, the recent decline in American wealth is due to the sharp reductions in the value of stocks and other securities.”

Due to the fact that the wealthiest 10% of Americans own 90% of U.S.-owned stocks, the affluent class is absorbing the brunt of the country’s economic woes -- for now.

“Even though the richest Americans have incurred the greatest loss of wealth this year, a plunging stock market still impacts other non-affluent shareholders,” Tidemann noted. “In particular, this loss of wealth is particularly damaging to those near or at retirement age."

"If older Americans have not already converted much of their assets to less risky holdings, the recent stock market downturn may force these Americans to postpone retirement or significantly curtail spending to account for their lost wealth.”

More Like ’94?

Others say that the current wealth-reducing downturn is closer to 1994, when the Alan Greenspan-led Federal Reserve hiked rates eight times with several multi-hikes to ward off inflation.

“Yet the Economy did not officially go into recession and the plane landed softly,” Charles D. Etzweiler, chief research officer at Nepsis, Inc., an investment advisory firm. “Additionally, the calendar years 1995-1999 were five idyllic years for equity investors and rewarded investors for their patience.”

“If this Powell-led Fed can engineer a soft landing we could see a similar set of years following 2022 that reward investors for sticking to their plan,” Etzweiler said.

Moves to Make

While Americans of any age and asset level should discuss any immediate money management moves with a trusted financial advisor, there are some uniform steps investors can take to help mitigate any further damage.

Mitch Martin, chief executive officer at Nashville-Tenn.-based Stonebridge Investment Counsel, LLC, offers three specific portfolio moves to stem the tide and hopefully keep further wealth loss at bay.

Maintain liquidity. “We recommend a cash flow reserve equal to 18 – 24 months of current lifestyle spending as optimal, both economically and behaviorally,” Martin told TheStreet.

Increase allocation to bonds at the short end of the curve. “If the US economy enters a recession, current bond prices have declined to levels that provide an alternative to equities, which should be considered,” Martin added.

Don’t head for the hills. The greatest danger to any investor, Martin said, is being out of the market.

“The liquidity provided by this cash flow strategy helps investors, not the market, to remain in control affording greater peace of mind today and confidence in the future,” he noted.

Martin also cited a favorite wealth creation quote from legendary Fidelity Investments portfolio manager Peter Lynch, who warned of giving declining markets too much respect.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves,” Lynch said. 

As if Americans haven't lost enough money already this year.

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U.S. FDA will decide on redesigned COVID vaccines by early July

U.S. regulators plan to decide by early July on whether to change the design of COVID-19 vaccines this fall in order to combat more recent variants of…

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U.S. FDA will decide on redesigned COVID vaccines by early July

By Michael Erman

“The better the match of the vaccines to the circulating strain we believe may correspond to improve vaccine effectiveness, and potentially to a better durability of protection,” Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, said at a meeting of outside advisers to the regulator.

Vials with Pfizer-BioNTech and Moderna coronavirus disease (COVID-19) vaccine labels are seen in this illustration picture taken March 19, 2021. REUTERS/Dado Ruvic/Illustration

The committee is scheduled to vote on a recommendation on whether to make the change later on Tuesday.

The updated shots are likely to be redesigned to fight the Omicron variant of the coronavirus, experts say. read more The exact composition of the retooled shots and whether they also will include some of the original vaccine alongside new components will be considered at the meeting.

Pfizer Inc (PFE.N), Moderna Inc (MRNA.O) and Novavax Inc. (NVAX.O) are scheduled to present data at the meeting. All three companies have been testing versions of their vaccines updated to combat the BA.1 Omicron variant that was circulating and led to a massive surge in infections last winter.

Both Moderna and Pfizer with partner BioNTech (22UAy.DE) have said that their respective redesigned vaccines generate a better immune response against BA.1 than their current shots that were designed for the original virus that emerged from China.

They have said that their new vaccines also appear to work against the more recently circulating BA.4 and BA.5 Omicron subvariants, even though that protection is not as strong as against BA.1.

Experts also want to know if the new shots will boost protection against severe disease and death for younger, healthier people or merely offer a few months’ additional safeguard against mild infection.

Scientists who have questioned the value of booster shots for young and healthy people have said a broad campaign is not needed with an updated shot either.

Other experts have championed any additional protection new vaccines may offer.

Reporting by Michael Erman Editing by Bill Berkrot and Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters

 

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Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing

Markets opened in the green today as they rebound from Monday’s losses.
The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock…

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Stock Market Today Mid-Morning Updates

On Tuesday, the Dow Jones Industrial Average is up by 270 points as it followed modest losses on Wall Street. Investors are still weighing the risks of red-hot inflation as rates continue to rise. Aside from the U.S., European Central Bank Leader Christine Lagarde downplayed recession concerns in the eurozone, already being destabilized by Russia’s war on Ukraine. She also says that her team is ready to raise rates at a faster pace if needed, in order to combat inflation.

Shares of Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) raised their dividends after passing their annual stress tests. For instance, Goldman Sachs is boosting its dividend payout by 25% to $2.50 per share. On the other hand, shares of Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are up today after China announced that it will be easing Covid-19 quarantine rules for international arrivals.

Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.13% today while Microsoft (NASDAQ: MSFT) is down by 0.79%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.17% while JPMorgan Chase (NYSE: JPM) is also up by 1.67%

Shares of EV leader Tesla (NASDAQ: TSLA) are up by 0.83% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are down by 0.17%. Lucid Group (NASDAQ: LCID) is down by 1.09% today as well. However, Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed today. 

Dow Jones Today: U.S. Treasury Yields Inches Higher; House Price Increases Slows Down In April 

Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading higher at 0.68%, 0.89%, and 0.31% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 0.28% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also up by 0.67%. 

The benchmark 10-year U.S. Treasury yield currently hovers around 3.22% as the market continues to push against a bear market. Oil prices rallied for the third day today as major producers like Saudi Arabia looked unlikely to be able to boost output significantly. This comes as the West agreed to explore ways to cap the price of Russian oil. Brent crude, for instance, currently trades at around $116 per barrel.

Home prices increased slower than before in April and could be a potential sign of a cooling in prices. Diving in, prices rose by 20.4% nationally in April compared with a year earlier. This is according to the S&P CoreLogic Case-Shiller Index. For comparison, home prices increased by 20.6% year-over-year in March. Cities like Tampa, Miami, and Phoenix continue to lead the pack with the strongest price gains. Tampa home prices, for instance, are up by a whopping 35.8% year-over-year.

[Read More] Top Stock Market News For Today June 28, 2022 

Trip.com Stock Gains Following Better-Than-Expected Quarterly Performance On Travel Rebound; China Covid Easing

Trip.com Group (NASDAQ: TCOM) seems to be among the top gainers in the stock market now. Evidently, TCOM stock is now up by over 14% at the opening bell today. Overall, this likely stems from the company’s latest financial update. Getting straight into it, Trip.com reported a quarterly loss per share of $0.01. Furthermore, the company’s total quarterly revenue is $649 million. For reference, consensus figures on Wall Street are a loss per share of $0.08 on revenue of $575.04 million. With these commendable results, investors looking to bet on the return of travel would be considering TCOM stock.

According to Trip.com, the company has recovering travel demand in global markets to thank for its latest quarterly performance. In particular, Trip.com highlights a bump in activity from consumers across its Europe and Asia Pacific user bases. This, the company believes, is a result of easing travel restrictions amidst countries in these regions. Moreover, Trip.com also notes that staycation-related travel in China is another notable contributor to growth for the quarter. Accordingly, its local hotel bookings are now up by 20% year-over-year.

On the whole, travel firms like Trip.com continue to thrive as consumers book their vacations. For its latest quarter, the company’s air-ticket bookings on global platforms are now up by a whopping 270% year-over-year. As mentioned earlier, this is mainly led by a rebound in demand from its European and Asian Pacific operations. Looking forward, CEO Jane sun notes that Trip.com will “remain adaptive to embrace the changing environment and be flexible with our strategies to swiftly seize growth opportunities.” With all this in mind, I could understand if TCOM stock is turning some heads in the stock market today.

TCOM stock
Source: TradingView

[Read More] Best Oil Stocks To Buy Right Now? 5 For Your Late June 2022 Watchlist 

Occidental Petroleum On The Rise Following Latest Berkshire Hathaway Stake Increase

Meanwhile, the likes of Occidental Petroleum (NYSE: OXY) seem to be gaining attention in the stock market now. For the most part, this is likely a result of the latest regulatory filing from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A). Namely, Berkshire disclosed a purchase of an additional 794,000 shares of Occidental. This adds up to a $44 million transaction, bringing its total stake to about 16.4%. In total, Berkshire currently holds about 153.5 million shares of OXY stock, worth $9 billion.

All in all, Buffett’s focus on Occidental would likely draw attention to the energy firm’s shares. This is apparent as OXY stock is currently gaining by over 6% in the stock market now. According to Berkshire’s filings since March, the company’s average purchase price per share of OXY stock is $53. Following this investment, Berkshire would be bolstering its position as Occidental’s largest stakeholder. In second place on this front is investment firm Vanguard with an almost 11% stake. As a result of all this, it would not surprise me to see OXY stock making the rounds in the stock market now.

OXY stock
Source: TradingView

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The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Royal Caribbean Shares Huge News on Covid Testing, Vaccine Rules

President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&A during the cruise…

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President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&A during the cruise line's President's Cruise.

Being on a cruise has largely returned to the same experience it was before the pandemic. Mask requirements have been dropped, capacities have returned to normal, and social distancing requirements have been dropped.

In fact, aside from crew members still having to wear masks and some stray passengers opting to do so in certain indoor situations, there's really no sign of covid rules once you board your cruise.

Before you board, however, the pandemic still has an effect on cruising. Every passenger 12 and older must be vaccinated (and must prove so before getting on board) and all passengers must produce a negative covid test taken no more than two days before getting on the ship.

And, while covid remains a problem, the cruise industry sees some light at the end of the tunnel when it comes to pre-cruise protocols. Executives from the major cruise lines -- Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report -- have said very little about plans to drop pre-cruise testing and vaccination requirements,

Now, however, Royal Caribbean President Michael Bayley has spoken out on both issues and has given cruise fans some real answers.

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When Will Covid Tests and Vaccinations Get Dropped?

The major cruise lines have largely stayed quiet about covid protocols because they remain somewhat beholden to the Centers for Disease Control (CDC). The current CDC rules are voluntary, but voluntary is sort of a relative term when it comes to the power the federal agency has over the cruise industry.

It makes sense that the industry has been cautious in commenting on when covid protocols may change, but with the end at least seeming feasible Bayley answered questions about both the end of pre-cruise testing and potentially dropping vaccination requirements during the 2022 Royal Caribbean President's Cruise on Ovation of the Seas, the Royal Caribbean Blog reported.

"I think pre-cruise testing is going to be around for another couple of months," Bayley said. "We obviously want it to go back to normal, but we're incredibly cognizant of our responsibilities to keep our crew, the communities and our guests safe."

Bayley was less hopeful about the end of vaccinations, according to the blog, which has no connection to Royal Caribbean.

"The no vaccine question is is a huge question that none of us know the answer to," he said. "I'm skeptical that's going to change in the in the real short term. Many and most of the destinations that we visit require a high degree of vaccination, and they expect our crew to be vaccinated."

Cruise Lines Covid Protocols Are Working

Covid has not gone anywhere, but the cruise industry has been very successful at controlling the impact of the virus. Bayley noted that the CDC shares some information with him about the "millions" of people who have sailed from U.S. ports over the past 12 months.

"And the number of people who died from COVID who'd sailed on ships over the past year was two," the Royal Caribbean Blog reported. "Two is terrible. But against the context of everything we've seen, that's it's truly been a remarkable success."

Vaccine requirements remain a touchy issue as some people have chosen not to be vaccinated and that means they cannot cruise. That seems unlikely to change anytime soon given the destinations Royal Caribbean visits and the CDC information which shows that the current protocols are working.

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