Day: September 20, 2024

(Bloomberg) — Skechers U.S.A. Inc. shares delivered their worst daily performance since February after the footwear company’s chief financial officer told an industry conference that China sales will be under pressure the rest of the year.

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Shares slipped 9.6% Thursday to close at $61.56, the lowest level since early August. Footwear peers including Nike Inc. and Under Armour Inc. saw their shares briefly dip on the comments, then rebound. The stock of competitor On Holding AG shed 2.4%.

“We’ve definitely seen worse conditions unfold in China than we expected for the back half of the year, so I would expect the back of the year’s going to be more disappointing than what we had originally thought,” said Skechers CFO John Vandemore at the Wells Fargo Consumer Conference. “I think that’s a market that’s still re-forming itself post Covid.”

China is a major market for global retailers, and concerns about the strength of Chinese consumer buying have long been a focus. The Asia Pacific region accounted for more than a quarter of Skechers’ sales in 2023, according to a filing.

Thursday’s slump put Skechers shares in negative territory for the year. Still, Wall Street is bullish on the company.

Wall Street analysts give Skechers 17 buy ratings and one hold, according to data compiled by Bloomberg. The average price target of about $81 is more than 30% higher than where shares currently trade.

–With assistance from Janet Freund.

(Updates stock move at market close)

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• The Fed should have cut interest rates a lot sooner, according to Jeff Gundlach.

• The “Bond King” thinks the economy is already in recession, as evidenced by rising layoffs.

• Job cut announcements climbed 193% over the last month, per a report from Challenger.

The Fed is cutting interest rates too late, as mounting job losses show that the US economy is already in a recession, according to Jeff Gundlach.

The billionaire “bond king” and DoubleLine CEO pointed to the Fed’s anticipated rate move on Wednesday, with markets expecting central bankers to lower the federal funds rate by 50 basis points at the conclusion of their policy meeting. That will mark the first rate cut the Fed has issued in over four years — a shift to prevent high rates from weighing too heavily on the job market and economic growth.

But the economy has already slowed to recessionary levels, Gundlach said in a conference panel on Tuesday, pointing to concerns surrounding the weakening job market.

“We are in a recession already,” Gundlach said at the event, per Bloomberg’s report. “I see an awful lot of layoffs announcement.”

Hiring has slowed steadily over the past year, even as GDP has continued to grow in recent quarters. Layoff announcements climbed 193% over the last month, according to a report from the consultancy Challenger, Gray, & Christmas. Hiring plans for the year have also fallen to their lowest level on record, down 41% in August compared to last year, the report added.

Still, most experts note that the US economy remains on solid footing. GDP grew 3% last quarter. Unemployment, meanwhile, remains near historic lows, with the jobless rate clocking in at 4.2% in August.

Gundlach, though, said he would give the Fed an “F” grade for its performance over the past several years. Central bankers hiked interest rates 525 basis-points in 2022 and 2023 to lower inflation, but they should have responded to inflationary pressures much sooner, he said, which could have prevented interest rates from being kept too high for too long.

“I think they’re going to cut 50 — they seem so out of line,” Gundlach said. ‘The Fed is way behind the curve and they should get their act together.”

Markets will be watching for the Fed’s next rate move and Powell’s prepared remarks Wednesday afternoon. The Fed chief is expected to deliver guidance on the path of further rate cuts, as well as the outlook for the job market and the economy.

Read the original article on Business Insider

It’s easy to think that once someone hits billionaire status, they’d just buy whatever they want with cash – especially something as basic as a home. But even the world’s wealthiest, like Elon Musk, Mark Zuckerberg and Jay-Z, have taken out mortgages for their homes. It’s not because they must, but because it makes good financial sense.

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According to Federal Reserve data, the typical U.S. home price has shot up over the years – from around $288,000 in 2014 to over $412,000 in 2024. With median annual wages just below $60,000 this year, it’s no wonder people struggle to scrape together enough for a down payment, let alone the full cost of a house.

But here’s where things get interesting. When you’re sitting on billions, like Musk or Zuckerberg, you could buy a house outright without blinking. However, these moguls choose to take out loans instead of dropping cash on the table. Why? It’s all about smart money management.

Trending: Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” These high-yield real estate notes that pay 7.5% – 9% make earning passive income easier than ever.

First, taking out a mortgage helps keep cash on hand. Cash flow isn’t an issue for people like Musk, but it’s still a handy tool. Think about it – homes are what’s called “illiquid.” Unlike stocks, which can be sold in seconds, homes take time to sell.

Instead of locking away millions in a house, the ultrawealthy prefer to keep their cash accessible, ready for new investments or business opportunities. They can make easy mortgage payments while their liquid assets stay free for more profitable uses.

As financial planner Matt Wilson said, “Mortgages allow wealthy individuals to be more flexible with their money. They can take advantage of better investment opportunities by not tying up a large chunk of it in one place.”

Trending: This billion-dollar fund has invested in the next big real estate boom, here’s how you can join for $10.

According to financial experts, there’s another sweet perk – tax deductions. In the U.S., mortgage interest is tax-deductible on loans up to $750,000. This means billionaires can still claim a deduction on their tax returns. While it may seem like small change to them, it’s still cash saved.

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Another reason is investment returns. Currently, the average mortgage rate hovers around 6.2%. Historically, though, rates were even lower. Conversely, the stock market has an average return of 10% annually. Even if the actual return is closer to 7%, that’s still better than what a mortgage costs.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.

Think about it this way: why spend $500,000 outright on a house when you could take out a mortgage, invest that same $500,000 in stocks and potentially make an 8% return? You’d end up with more money in the long run. It’s like killing two birds with one stone.

As financial expert Sarah Newman explains, “Why pay off a mortgage when you can invest that money and earn a higher return? It’s about making your money work harder.”

Jay-Z, for instance, took out a mortgage on his $88 million Bel-Air estate. He could have written a check, but took out a loan. Why? Likely because that freed-up cash could be used to invest in more ventures like art, tech or startups, all of which can yield much higher returns over time.

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This article Elon Musk, Mark Zuckerberg And Jay-Z Take Out Mortgages Despite Their Billion-Dollar Fortunes – Here’s Why The Ultra-Wealthy Borrow originally appeared on Benzinga.com

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Dividend investing took a back seat ever since the AI-led craze caused everyone to pile into technology growth stocks. However, long-term investors seeking a stable and reliable income stream always look for strong dividend payers that can survive market volatility. A few days ago, a Redditor posted a detailed income report on r/Dividends, a community of over 580,000 members, saying he earns $110,000 a year in dividends with an investment of about $1.2 million.

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The Redditor said part of his portfolio is allocated to money market funds and fixed income.

“About half of it is in money market/fixed income making 5%. All of it together is making $110k a year. Just sharing for feedback and comments. The plan is to move the fixed income into dividend equities as the rates go down so the income keeps up or increases,” he said.

When asked how he accumulated $1.2 million to invest, the Redditor said he worked for 20 years while his wife worked for 15 years.

“We both have 401ks apart from this after-tax account, which we plan to leave alone for a while,” he added.

The investor generously shared his detailed portfolio. Let’s examine some of the important stocks and funds in it.

Schwab Value Advantage Money Fund (SWVXX)

The biggest investment in the portfolio of the Redditor making about $110,000 a year is the money market fund Schwab Value Advantage Money Fund (SWVXX). The fund is suitable for those looking for a stable, secure place to park their cash. It has total assets of about $204 billion and yields approximately 5.13%.

Blackrock Multi-Sector Income Trust

Blackrock Multi-Sector Income Trust (NYSE:BIT) yields about 9.8% and invests in loan and debt instruments. The fund’s goal is to generate income and capital appreciation. Some of its top holdings include FEDERAL NATIONAL MORTGAGE ASSOCIATION, UNIFORM MBS, TRANSDIGM INC., CLOUD SOFTWARE GROUP INC. and HUB INTERNATIONAL LTD.

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AGNC Investment Corp

AGNC Investment Corp (NASDAQ:AGNC) is a mortgage REIT with a dividend yield of about 13%. The company pays monthly dividends. AGNC invests in secure agency mortgage-backed securities since Fannie Mae or Freddie Mac guarantees the MBS principal in case of defaults.

Icahn Enterprises LP

Billionaire Carl Icahn’s conglomerate, Icahn Enterprises LP (NASDAQ:IEP), is one of the stocks in the Redditor’s portfolio. IEP has a 30% yield, but its sustainability and safety have been raising questions for quite a while now.

In August, Icahn settled with the SEC over charges related to personal margin loans. Last year, IEP cut its dividend by 50% and now pays about $1 per share.

Horizon Technology Finance Horizon Technology Finance Corp (NASDAQ:HRZN) is a business development company that lends to technology, life science, health care and information services companies. HRZN pays monthly dividends and yields about 12%.

Stellus Capital Investment Corp

Stellus Capital Investment Corp (NYSE:SCM) is another business development company on the list. It pays monthly dividends and yields around 12%. Stellus generates income through its portfolio of debt investments in middle-market companies. The stock is up about 6.5% this year.

Realty Income

Realty Income Corp (NYSE:O) has become a no-brainer dividend stock in Redditors’ portfolios, generating decent monthly income. The company pays monthly dividends and has increased its payouts for 29 years. The latest monthly dividend increase came earlier this month when Realty Income raised its dividend by 0.2%.

Cornerstone Strategic Value Fund

Cornerstone Strategic Value Fund Inc. (NYSEAMERICAN: CLM) is a closed-end fund that generates income by investing in public companies. The fund yields about 17% and pays monthly dividends.

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• This billion-dollar fund has invested in the next big real estate boom, here’s how you can join for $10.
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Global X Nasdaq 100 Covered Call ETF

Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) generates income by selling covered call options on the Nasdaq-100 Index. The fund was started in 2013 and has since paid monthly income to investors. The fund yields about 11.5%. Some of the top holdings of the ETF are Apple, Nvidia, Microsoft, Amazon and Broadcom.

Energy Transfer

With a dividend yield of about 8%, Energy Transfer LP (NYSE:ET) is a popular dividend stock on Reddit. The company is relatively insulated from the volatile commodities market since most of its revenue comes from fee-based contracts. Last month, Energy Transfer LP (NYSE:ET) increased its full-year profit outlook after posting strong volumes for the second quarter.

MPLX

Midstream energy infrastructure company MPLX LP (NYSE:MPLX) is one of the high-yield dividend stocks in the Redditor’s portfolio. The company has a dividend yield of about 8% and is owned by Marathon Petroleum. During the second quarter, MPLX revenue rose about 13% yearly, beating Wall Street’s estimates.

Ares Capital

Ares Capital Corporation (NASDAQ:ARCC) is one of the notable business development companies in the Redditor’s portfolio, earning $110,000 in dividends. The stock has a dividend yield of about 9.4%. During its second-quarter earnings call, Ares Capital’s management said the company swapped its $850 million issued debt to a floating interest rate. Analysts believe this move would help the company position well for the upcoming rate cut cycle, as its interest burden will decrease with the expected ease in monetary policy.

Interest Rates Are Falling, But These Yields Aren’t Going Anywhere

Lower interest rates mean some investments won’t yield what they did in months past, but you don’t have to give up those gains. Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.

Arrived Homes, the Jeff Bezos-backed investment platform, offers a Private Credit Fund. This fund provides access to a pool of short-term loans backed by residential real estate with a target of 7% to 9% net annual yield paid to investors monthly. The best part? Unlike other private credit funds, this one has a minimum investment of only $100.

Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.

This article Dividend Investor Making $110,000 Shares His Portfolio: Top 12 Stocks and ETFs You Might Be Missing originally appeared on Benzinga.com

• Bernard Arnault has gone from the world’s wealthiest person to being on the brink of dropping to fifth.

• The LVMH CEO’s net worth has tanked by $54 billion from its March peak, and $30 billion so far this year.

• LVMH stock has slumped 16% this year as softer demand has hit the company’s sales and profits.

Bernard Arnault was the richest person on the planet six months ago; now he’s flirting with fifth place.

Arnault is the founder and CEO of LVMH Moët Hennessy Louis Vuitton, the French luxury-goods behemoth. In late March, he was worth an estimated $231 billion, ranking him ahead of Tesla CEO Elon Musk and Amazon founder Jeff Bezos at the top of the Bloomberg Billionaires Index.

The fashion tycoon’s fortune has shrunk by $54 billion since then to $177 billion at Wednesday’s close. That places him fourth and only $1 billion ahead of the Oracle cofounder Larry Ellison.

Arnault’s net worth has tanked by $30 billion this year, making him the biggest wealth loser among the 500 individuals on Bloomberg’s list. He’s also the only person among the 18 richest people who’s in the red for 2024; the others have all gained at least $14 billion and as much as $63 billion.

Forbes’ wealth rankings tell a similar story: Arnault has dropped from first place, with a $233 billion net worth on March 8, to fifth, with a $175 billion fortune, behind Musk, Bezos, Ellison, and Meta CEO Mark Zuckerberg.

The wealth hit for the “Wolf in Cashmere” reflects a 16% slump in LVMH’s stock price to its lowest level in two years. Arnault owns about 48% of the luxury conglomerate, which houses around 75 brands, including Tiffany & Co., Louis Vuitton, Dom Perignon, and Sephora.

LVMH shares have been hit by the company’s troubles. It struggled in the first half of this year with underlying revenues inching up only 2% and income from recurring operations sliding 8%. Underlying profits tanked 26% in the wines and spirits business, 19% in watches and jewelry, and 6% in the key fashion and leather goods segment.

Arnault also warned of a “climate of economic and geopolitical uncertainty” in the earnings release. Meanwhile, Bloomberg reported last month that Sephora was slashing its 4,000-person workforce in China by 10% to weather a challenging local market.

The luxury industry boomed after the pandemic as travel resumed and pent-up shopping demand was released. But it has struggled more recently as historic inflation, steeper interest rates, and recession fears have tempered demand even among wealthy consumers.

Read the original article on Business Insider