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Carnival Cruise Line executive shares key piece of advice for passengers

The advice also applies to passengers on Royal Caribbean cruises, especially those who are easily offended.

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While Carnival and Royal Caribbean offer family-friendly cruises, not every aspect of your trip will be G- or even PG-rated.

Some would argue that the attire at both cruise lines' pools may cross over into being not suitable for all ages. In reality, standards for what constitutes a family-friendly bathing suit vary not just by country, but by U.S. state.

It's safe to say that if you will be offended by women of all ages wearing thongs and low-cut tops, or men in Speedos, then a cruise may not be the right environment for you. Both Royal Caribbean (RCL) - Get Free Report and Carnival  (CCL) - Get Free Report ban topless sunbathing for women, and technically have dress code standards, but short of outright nudity, you will not see either cruise ask a passenger to change or cover-up. 

In a broad sense, both cruise lines can only provide guidance to passengers about certain rules. That's why you rarely see dressing standards enforced in the main dining room (MDR) beyond not allowing bathing suits. Yes, pants are technically required for men, and hats are not allowed, but no cruise line wants to antagonize its customers unless it absolutely has to. 

Standards are also very broad when it comes to entertainment. A few events, like Royal Caribbean's "Crazy Quest" game show, are strictly for those 18 and over, but most shows, game shows, and other events are for all ages. Both cruise lines, however, do offer 18 and over comedy shows as well as all-ages comedy.

All-ages, however, does not always mean fully family-friendly or designed to not offend anyone. That's not possible when it comes to comedy and that led Carnival Cruise Line CCL Brand Ambassador John Heald to issue a warning on his Facebook page.

Carnival ships are designed to be fun for the whole family.

Image source: Carnival Cruise Line

All-ages Carnival and Royal Caribbean comedy shows could still offend you 

Heald, who spends most days answering questions from Carnival customers on his Facebook page chose to be proactive in this case.  

"If you’re going to a comedy show on the ship, and in your mind, you’re thinking I might be offended, I probably will be offended or anything similar, please don’t sit in the front few rows," he shared. "If you stand up and leave in the middle of the show and it is obvious to the comedian, it is in the DNA that they may say something about you leaving."

Heald, who has a humorous streak himself, qualified his warning a bit.

"I hope that’s OK and I hope it’s advice that will be taken when needed," he added.

That simple warning was met with hundreds of responses.

"If people can't handle comedy, they just shouldn't go. Simple," Regnier Brian posted.

Others noted that they agreed, but approached things in a different way.

"I totally agree. I sit up front because I want to be in the show," added Gail Jankowski Wojciechowski.

Both Carnival and Royal Caribbean have dedicated, or mixed-use, comedy venues on most of their newer ships. On older ships, they generally have comedy shows in the main theater and will often offer an 18+ show in the later hours of the night. 

Carnival's Heald responds to comedy criticism  

Heald often shares emails he receives on his Facebook page and answers them. One recent email made a charge that you hear often from both Royal Caribbean and Carnival cruisers, that the family-friendly comedy shows aren't funny.     

"All of Carnival’s comedians don’t know how to be funny for the early showtimes. Based on my last 2 cruises, it is apparent that these comedians only know how to perform in the R R-rated shows: Get rid of family shows. Let the comedians do only adult shows!! Family shows are not funny to any normal person," a person Heald identified as "G" wrote.

Heald, pushed back on that idea.

"Thanks 'G' and while I have no idea what you mean by 'normal person.' I will say this is not a normal post. Usually, when I see a post on the subject of our comedians it is that the occasional person does not like the adult nature of the R R-rated shows," he shared.

"I can tell you that standing on a stage with a microphone performing comedy to a lounge full of families is not easy, especially in today’s immediately offended world," he added. "But I disagree with you 'G' I think our comedians have superbly funny family comedy shows and relish the challenge of performing them."

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Dr. Phil Shocks ‘The View’ Hosts By Slamming Impact Of COVID Lockdowns On Children

Dr. Phil Shocks ‘The View’ Hosts By Slamming Impact Of COVID Lockdowns On Children

Authored by Paul Joseph Watson via Modernity.news,

Dr….

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Dr. Phil Shocks 'The View' Hosts By Slamming Impact Of COVID Lockdowns On Children

Authored by Paul Joseph Watson via Modernity.news,

Dr. Phil left The View hosts stunned after revealing the true impact COVID lockdowns had on children.

During an appearance on the ABC show, the television host began by explaining the harm smart phones and social media had wrought on childhood development.

“Kids stopped living their lives and started watching people live their lives and so we saw the biggest spike and the highest levels of depression, anxiety, loneliness and suicidality since records have been kept and it’s just continues on and on and on,” said Phil McGraw.

That narrative was palatable to the hosts, but when McGraw used the same logic to slam COVID lockdowns, the hosts bristled.

“Then COVID hits ten years later and the same agencies that knew that are the agencies that shut down the schools for two years – who does that? Who takes away the support system for these children?”

Dr. Phil also pointed out that COVID lockdowns prevented interventions for children who were being violently and sexually abused.

Whoopi Goldberg then shot back claiming “they were trying to save kids’ lives,” to which McGraw responded by pointing out that school children were almost completely unaffected by COVID.

Goldberg then tried to argue that this was thanks to the lockdown, before another host confronted Dr. Phil by saying, “Are you saying no school children died of COVID?”

“I’m saying it was the safest group, they were the less vulnerable group and they suffered and will suffer more from the mismanagement of COVID than they will from the exposure to COVID and that’s not an opinion, that’s a fact,” said McGraw.

The audience then started applauding, something which triggered Goldberg to immediately scramble to go to break.

“Audience clapping at end triggered those wicked witches,” commented Mike Cernovich.

Dr. Phil is completely correct in that COVID affected children far less severely than adults, something that Goldberg incorrectly claims is thanks to lockdowns but in fact was due to their superior immune response.

As we previously highlighted, multiple major studies confirm that pandemic lockdowns had devastating effects on children, harming their emotional development, social skills and driving mass clinical depression.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Wed, 02/28/2024 - 10:45

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Apple’s Magic – Are Buybacks Worth Paying Up For?

Apple’s Magic – Are Buybacks Worth Paying Up For?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Apple’s valuations are near…

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Apple's Magic - Are Buybacks Worth Paying Up For?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Apple’s valuations are near their most expensive levels of the last ten years. Now consider that today’s valuation premiums are amidst a much higher risk-free bond yield than during most of the previous ten years.

Apple has a market cap of $2.8 trillion. Assuming its price-to-earnings ratio and margins remain stable, Apple must sell nearly $400 billion of products and services each year to keep its share price stable. To fathom that, consider that every man, woman, and child on planet Earth must spend about $45 on Apple products yearly.

The point of sharing those statistics and the valuation premium is to contextualize whether Apple can grow at the growth rate implied by its investors. Further, if its earnings growth alone doesn’t support a valuation premium to the market’s valuation, can the continued use of stock buybacks support the premium?

Apple’s Track Record

The graph below shows Apple shares have provided its investors with a fantastic 20% annualized growth rate for the last 39 years. That is more than double the 8.7% growth rate for the S&P 500 over the same period.

Its exceptional outperformance versus the market is warranted. Since 1993, Apple’s earnings per share have grown at over 3x the rate of the S&P 500.

Apple’s Recent Trends

While Apple may have an incredible record of earnings growth and share price appreciation, current investors must avoid the temptation to rest on prior trends. Instead, their focus should be on what may lie ahead.

The following graph shows the running 3-year annualized growth rates for sales, net earnings, and earnings per share. Recent growth rates are much lower than they have been. We truncated the graph to the last ten years to better highlight the more recent trends.

Earnings and sales were boosted in 2021 and 2022 by the stimulus-related spending and inflation caused by the massive pandemic-related fiscal stimulus. Many companies, including Apple, saw demand increase and could expand profit margins, as inflation was easy to pass on to customers.

However, Apple’s earnings and sales growth are returning to pre-pandemic levels. To better appreciate what the future may hold, consider the five pre-pandemic years highlighted in blue. During that period, sales grew by 4.2% annually. Net earnings grew by 4.3% and EPS by 10.4%

The Magic of Stock Buybacks

The price of a stock is not meaningful. Apple stock trades for $182 a share. Its market cap is roughly $2.85 trillion. If the company repurchased all but one share, its market cap would be unchanged, but its share price would be $2.85 trillion. 

That simple example highlights how valuable buying back shares can be for investors.

Back to Apple’s recent EPS, net earnings and sales trends. Its EPS grew roughly double that of sales or net earnings. The graph below helps explain how they pulled off such a feat. Once Apple started buying back shares in late 2013, its EPS grew 4-6% more than its actual earnings.

The following graph compares Apple’s annual EPS versus its EPS if it had not repurchased shares. The graph starts in 2013 when Apple began to aggressively buy back shares.

Why The Premium Versus The Market?

Apple has recently grown its earnings and sales at an approximate 5% growth rate. This is only about 1% higher than the approximate 4% nominal GDP growth from 2017 to 2019. But less than the approximate 9% EPS and sales per share growth of the S&P 500. 

So why are Apple investors willing to pay a premium for subpar growth?

Apple is an incredibly successful and innovative company with a long history of rewarding investors. Investors are willing to pay for the future potential of new products and services with enormous income potential. Such investor goodwill is hard to put a price on.

Passive investment strategies are a second reason. Apple and Microsoft are the two largest stocks by market cap. The increased popularity of passive investment strategies feeds the most extensive market cap stocks disproportionately to smaller companies.

Consider the holdings of XLK, the $52 billion tech sector ETF. Apple and Microsoft make up almost 50% of the ETF. If an investor buys $1,000 of XLK, approximately $500 will go to Apple and Microsoft, and the remaining 62 companies will get the rest.

Finally, and most importantly, are share buybacks. While we can’t quantify what future innovation, goodwill, and passive investment strategies are worth, we can grasp Apple’s ability to continue forward with buybacks.

Future Buyback Funding

The chart below shows Apple has been spending between $60 and $80 billion per year on stock buybacks. Keep that figure in mind as we walk through its sources of cash to continue buying back shares.

Debt, cash, and earnings are their predominant sources to fund buybacks.

Debt Funded Buybacks

Apple came to market with its first long-term debt offering in 2013, commensurate with its initiation of share buybacks. Apple’s debt peaked eight years later at $109 billion. Using debt to fund share buybacks made sense, with borrowing rates in the very low single digits. However, the calculus has changed, with rates now at 4% and higher.

Cash and Marketable Securities on Apple’s balance sheet are at $61.5 billion, about a year’s worth of buyback potential. While a massive amount of money, it is off its peak of $107 billion.

Lastly are earnings. Apple has been earning about $100 billion a year since 2021. Even if they regress to pre-pandemic levels ($50-$60 billion), earnings are enough to continue supporting its buyback program. However, if earnings are employed to buy back shares, it comes at the expense of investments toward innovations and product upgrades. Furthermore, Apple pays about $15 billion yearly in dividends, which also requires funding.

The graph below shows that from 2018 to 2020, Apple spent more on buybacks than it made. It was relying on debt and cash to make up the difference.

Over the last two years, buybacks only account for 60% of earnings, allowing cash to grow for future buybacks and investments. Hence, if $100 billion a year in earnings is sustainable, even without growth, $60 to $80 billion a year in buybacks is entirely possible. If earnings retreat to their pre-pandemic level, debt and cash will be required. If interest rates stay at their current levels, debt may not be financially sensible.

Summary

Unlike most “growth” companies, a bet on Apple is a bet on their ability to buy back shares. It appears that Apple can continue to buy back its shares with earnings and cash. Such would maintain their higher-than-market EPS growth with or without above-market earnings growth.

Other than negative earnings growth and high-interest rates, a buyback tax on corporations, as is being proposed, could also reduce or eliminate their buyback program. If such a bill were to pass or Apple cuts back on buybacks for another reason, its premium valuation may wither away.

Tyler Durden Wed, 02/28/2024 - 10:25

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Dollar Jumps

Overview: A less hawkish Reserve Bank of New Zealand and a
slightly softer than expected January CPI from Australia appears to have
sparked a broad US…

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Overview: A less hawkish Reserve Bank of New Zealand and a slightly softer than expected January CPI from Australia appears to have sparked a broad US dollar rally. The Dollar Index is up almost 0.25%, which, if sustained, would be its best day since the US CPI was reported on February 13. Most of the greenback's strength was seen in the Asia Pacific region, and it has steadied in the European morning. The dollar approached JPY150.80 and there are large options at JPY151 that expire today. The yen is the strongest of the G10 currencies, off less than 0.15%. The Antipodeans have been hit the hardest. The Australian dollar is off around 0.75% and the New Zealand dollar has been tagged for 1.2%. The euro briefly traded below $1.08 for the first time in a week. Emerging market currencies are also weaker, with the South African rand, Thai baht leading the drop with 0.65%-0.85% declines. With herculean efforts the dollar continues to hold slightly below CNY7.20. 

Equities are under pressure. All the large markets in the Asia Pacific region but South Korea, sold off. That included a 2% slide in the Chinese shares that trade in Hong Kong and a 3.8% slump in the Shenzhen Composite. Europe's Stoxx 600 is giving back yesterday's nearly 0.2% gain. US index futures are modestly softer after a mixed performance yesterday. European 10-year yields are mostly softer, but UK Gilts are flat. The 10-year US Treasury yield is a basis point lower near 4.29%. The stronger dollar has weighed on gold. It had poked above $2039 yesterday but settled lower on the day and follow-through selling today has seen in slip below $2025 before finding support. April WTI rallied more than $3 a barrel from Monday's low to $79 yesterday. An 8 mln-barrel build in US stocks according to API estimates seemed to blunt the speculation that OPEC+ will extend its output cuts. April WTI is trading softer, around $78, but within yesterday's range.

Asia Pacific

Japan's slightly firmer than expected January CPI (core rate at 2.0% target instead of falling to 1.9% from 2.3% as economists expected) seemed to renew speculation of a BOJ rate hikes after the unexpected economic contraction in Q4 23 fanned doubts. Tomorrow, the pendulum may swing again on the back of what is likely to be dismal data, fanning fears of another quarterly contraction. The preliminary January industrial production is like to fall sharply (nearly 7%), disrupted by the earthquake at the start of the year. Also, Japanese housing starts, which rose 6.6% year-over-year last January may be 7.8% last month and will also be reported tomorrow. And even where there is an uptick in activity, like January retail sales (median forecast in Bloomberg's survey is for a 0.5% rise) seems lackluster after falling an average of 1.1% in Q4 23, the weakest since the early days of the pandemic.

Different institutional arrangements product different response to similar challenges. For more 35 years, people have been talking about a "Fed put." If the stocks market slide threatens the Fed's third mandate, financial stability, it will take action, such as lowering rates. Remember the attention drawn to the so-called Plunge Protection Team? As part of its qualitative and quantitative easing, the Bank of Japan has bought stocks as well as bonds. Its preferred vehicle has been ETFs, and the BOJ owns around 2/3 of the equity ETFs, which account for about a quarter of the central bank's assets. The Swiss National Bank bought foreign equities as a way to expand its balance sheet. How does China do it? Reports suggest that state-owned funds, apparently similar to sovereign wealth funds, have stepped into to support the market this year. One bank estimates these funds have bought a little more than CNY400 bln (~$57 bln) of equities this year. The bank estimates than around 3/4 of the inflows were for products that track the CSI 300. 

The Reserve Bank of New Zealand kept rates steady as expected but were less hawkish than previously. The central bank said that inflation risks were more balanced, suggesting less of a risk of a rate hike this year. Yesterday, the swaps market was pricing in around a 50% chance of a May hike. That has been cut to near 10% today. The market had the implied target rate around 5.18% at the end of November and now it is slightly above 5.0%. Australia's January CPI was unchanged at 3.4%. The median forecast in Bloomberg's survey was for 3.6%. The swaps curve hardly changed. Yesterday, it was pricing 40 bp of cuts this year and now it is almost 42 bp. The first cut continues to be fully discounted for September, with a slightly higher chance (80%) of a cut in August. It was closed to 75% chance yesterday. 

The dollar bottomed yesterday in early North American turnover near JPY150 but recovered to almost JPY150.60 as US 10-year yields traded higher, even though the seven-year auction saw solid even if not spectacular interest. It returned to JPY150.80 in late Asia Pacific turnover and found sellers in early Europe. For the past five sessions, the settlement has been gravitated around JPY150.50. There are options for $1.8 bln at JPY151 that expire today. The Australian dollar set a five-day low in the local session yesterday near $0.6525. It recovered but stalled near $.06560. It has been sold to $0.6490 today, so far, its lowest level since February 15. Nearby support is seen near $0.6470 and then the month's low near $0.6445. The break of $0.6500 weakens the technical tone. Retail sales tomorrow should show a recovered from the dreadful 2.7% drop in December. The New Zealand dollar is also trading much lower. It settled near $0.6170 and is pushing below $0.6100 in the European morning. Initial support now is seen near $0.6075 and then $0.6040-$0.6050. The broad US dollar gains today lifted it a bit closer to CNY7.20, which it continues to hover near but remains below. Press reports says state banks sold dollars and, of course, if the dollar meets resistance at CNY7.20, the largest market participants are involved. The PBOC set the dollar's reference rate at CNY7.1075 (CNY7.1057 yesterday). The average in Bloomberg's survey was CNY7.2004 (CNY7.1966 yesterday). 

Europe

There are two metrics of stress in Europe. The first is Italy's premium over Germany. Italy's two-year yield was almost 95 bp above German yields at the 2023 peak (in late October). It fell below 50 bp last month and is slightly above there now. The 2022 and 2023 low was about 35 bp. Italy's 10-year premium peaked early last year near 215 bp. It narrowed by around 50 bp in H1 23 but widened back above 200 bp last October and is now a little below 145 bp, near two-year lows.

The second metric is the euro-Swiss franc cross. The euro has fallen for the past six years against the Swiss franc and in nine of the past ten years. However, the euro has traded higher against the franc this year and has risen for six of the past eight weeks. The euro rose almost 3.3% from the end of last year through yesterday's nearly three-month highs near CHF0.9560. Perhaps, speculation that the Swiss National Bank would cut rates ahead of the European Central Bank weighed on the franc. That said, the momentum indicators are stretched and the chart resistance near CHF0.9570 has been approached. The euro looks vulnerable to near-term setback.

The euro made a marginal new three-day high in Asia Pacific on Tuesday ($1.0865) and was sold in Europe and North American to slightly through $1.0835. It held barely above the five- and 200-day moving averages, which converge near $1.0830. Follow-through selling today saw if dip below $1.08 in early European turnover before finding bids, allowing it to recovery toward $1.0820. The technical tone looks more fragile, though the intraday momentum indicators are oversold. A break of the $1.0770-$1.0790 area would weaken the outlook. Sterling recorded its third consecutive inside day yesterday but broke down today. It saw nearly $1.2620 in early Europe. It has recovered to almost $1.2650. Still, it remains within last Thursday's range (~$1.2610-$1.2710). A move back above $1.2660 would help stabilize the tone. 

America

GDP revisions tend not to move the markets, and the second look at Q4 23 US GDP is not expected to be revised by much. Investors and businesses are forward-looking and more interested in Q1 24 GDP. The Atlanta Fed's GDP tracker was updated yesterday, and it is now at 3.2% from 2.9% on February 16. The January trade and inventory data will be reported. The market is also looking ahead to tomorrow's personal; income, consumption and deflators and the Atlanta Fed's GDP tracker will be updated after the day. Income is expected to have risen more than consumption and this will be consistent with a moderation in consumption that is expected to unfold here in H1 24. A 0.3% rise in the headline deflator will translate into a three-month annualized rate of 1.6% and about 1.8% at a six-month annualized rate. The core rate is seen accelerating by around 0.4%. That would be the most since the 0.5% increase in January 2023. The three-month annualized pace would be about 2.5% and the six-month annualized pace would be near 2.6%. Three Fed officials speak today, Atlanta's Fed's Bostic, NY Fed's Williams, and the Boston Fed President Collins. The former two vote at the FOMC. So far, officials seem to be on the same page as Fed Chair Powell. They are encouraged by recent trends but need to see more to be sufficiently confident to cut rates.

Canada runs a small current account deficit. It was 2% of GDP in 2019 and 2020 but has been below 1% more recently. Canada's Q4 23 current account is due today and C$2 bln deficit is expected, which would be the smallest in six quarters. That should keep the deficit below 1% of GDP. It is not a market mover. Tomorrow, Canada reports December and Q4 23 GDP. Canada contracted by almost 1.1% in Q3 23 but looks to have returned to growth in Q4. It probably not enough to fully recoup the loss of output in Q3. True to form, Mexico's trade balance deteriorated in January. It was the 14th consecutive January that the seasonal pattern played out. Still, the shortfall was well above expectations as exports fell and imports rose. Still, the seasonal pattern points to a sharp improvement in February, which has been better than January for 17 consecutive Februarys. Mexico's central bank's inflation report will be released later today. It will help shape expectations for the March 21 central bank meeting. The statement after the last meeting suggested rate cuts in the coming months.

The US dollar had gone nowhere against the Canadian dollar and remained in the range set on February 13 when the US reported January CPI (~CAD1.3440-CAD1.3585). Yesterday, the greenback dollar closed at its best level in nearly two weeks and posted an outside up day. Follow-through buying today lifted it to almost CAD1.3590. Nearby resistance is in the CAD1.3600-CAD1.3620 area. The intraday momentum indicators are stretched. There is scope back toward CAD1.3540 initially. The larger than expected Mexican trade deficit did not prevent the peso for strengthening to its best level in three days. The US dollar fell to almost MXN17.04 but remains in the range set last Thursday (~MXN17.0120-MXN17.1570). The downtrend line from the January 23 high comes in near MXN17.10 today and is bumping against it. The trendline has frayed on an intraday basis but has held at settlement.

 

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