Category Archives: Yahoo

A shipping expert believes that the supply chain crisis may last well into 2023 given how global trade has been reshuffled to meet surging American demand.

"We expect... strained supply chains to last until the early parts of 2023," Peter Sand, chief shipping analyst at Copenhagen-based BIMCO, a shipping trade group, told Yahoo Finance Live (video above). "We are basically seeing a global all-but-breakdown of the supply chains from from end-to-end."

In Sand's view, the "spectacular recovery" in U.S. consumer demand the past 15 to 18 months has "completely biased shipping networks."

According to Sand, trade volume between the Far East and North America is "rising so fast" at about 25% higher than 2019 levels. Global demand has only grown by 5.6% in the first eight months of this year.

"That whole reshuffling of container shipping capacity into service of the American consumers has really strained supply chains across the globe," Sand said.

Container ships wait off the coast of the congested Ports of Los Angeles and Long Beach in Long Beach, California, U.S., October 1, 2021. (REUTERS/ Alan Devall)

Deep concern over the supply chain crisis is rippling across every sector of the U.S. economy, with more companies and consumers fearing a massive crunch during the holiday shopping season.

According to a note from Bank of America, the third quarter of 2021 had the third-highest number of "profit warnings" story counts on Bloomberg, behind only the fourth quarter of 2015 and the first quarter of 2019. Mentions of "inflation" have risen by more than 900% year-over-year, the bank added.

Story continues

Amid the influx of bad news about the supply chain crisis, freight rates from China have also increased by 20%, as seen in the chart below.

Bank of America

The costs are adding up due to the immense backlog: According to California's Marine Exchange, there are currently 61 container ships anchored and 25 at berth in the areas between Los Angeles and Long Beach, as of Oct. 11.

"Where we do see the most strained part of this is in the hinterland connectivity," Sand said. "From a container lineup perspective, they are basically transporting more cargo than ever before. ... There are some plus 50 container ships just waiting to offload the cargo off the coast of California."

Though big retailers like Costco (COST), Home Depot (HD), and Walmart (WMT) have attempted to circumvent the issue by buying up their own containers or chartering their own ships, they're likely to run into the same main problem when it comes to unloading the cargo.

"If we cut to the chase here, they face exactly the same obstacles once they arrive at the American coastline," Sand said. "They need to wait in line also to discharge that cargo. And they may also face the same shortages of chassies (specialized trailers or undercarriages used to transport ocean containers over the road) and truck drivers once they get the cargo [on] land."

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Read more from the original source:

Supply chain issues could 'last until the early parts of 2023,' shipping analyst explains - Yahoo Finance

Now is the time to hit your boss up for a raise or even look for a new job, says one economist.

"Worker power is so high right now. That leverage is there because of the tight labor market," Glassdoor Senior Economist Daniel Zhao told Yahoo Finance Live. "Demand for workers is still red hot."

"Now is a good time to ask for that raise or to even ask for more benefits or more flexibility in the work arrangements,"said Zhao. "Employers right now are not just raising wages, they're also throwing everything in the kitchen sink at offering new benefits or experimenting with new perks."

The economy added a disappointing 194,000 jobs last month, far below the more than 500,000 expected. Labor supply shortages have forced employers to raise wages in order to attract talent.

"Quite frankly, if your employer is not willing to meet you where you are and what you want, then right now, there are other opportunities out there," said Zhao.

"Like, the grass is actually greener. And so, I would just encourage job seekers and employees alike to consider whether now's the right time to ask for a raise or to look for a new job," he added.

Unemployment ticked lower to 4.8% percent in September. However, that drop came alongside an unexpected drop in the labor force participation.

Zhao says some of the lower participation trends may be structural such as aging of the population and more workers retiring. The other reason has to do with COVID specific challenges.

Story continues

"Many women have had to leave the workforce and have to stay out of it because they're taking care of kids or taking care of elderly family members," said Zhao. "That's a challenge that we saw in September in particular, where women's labor force participation dropped, as school re-openings were disrupted."

Zhao expects to see some of those factors ease as the threat of COVID and its variants subsides.

"This is something we've been saying for the last year and a half we need to get the pandemic under control in order to make sure that we have a full labor market recovery" he added.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Yahoo Finance +

More:

'Now is the best time to ask for a raise' or switch jobs: Economist - Yahoo Finance

If you thought home prices couldn't go any higher, hold on to your hat: Goldman Sachs (GS) economists are forecasting even more price increases in the year ahead.

"Our model now projects that home prices will grow a further 16% by the end of 2022," wrote a Goldman Sachs team of economists led by Jan Hatzius in a recent note.

"Of all the shortages afflicting the U.S. economy, the housing shortage might last the longest," he said.

Home prices are currently up 20% year-over-year. The boom in prices was spurred by tight housing inventory, low interest rates, and household migration patterns during the pandemic. Millennials buying first time homes has only exacerbated the demand for houses.

Meanwhile investors with cash on their hands are trying to hedge against inflation by purchasing hard assets like real estate, thus driving prices higher.

"The supply-demand picture that has been the basis for our call for a multi-year boom in home prices remains intact," wrote Hatzius.

"Housing inventories remain historically tight, and surveys of home buying intentions remain at healthy levels," the note goes on.

Numerous experts have predicted not to expect a housing crash like in 2008, given that the current market is so different. But home buyers may expect to see a leveling off in prices, especially if the Federal Reserve starts tapering its balance sheet and increasing interest rates in the future.

The supply of homes has increased modestly since the spring, though still well below pre-pandemic levels.

Story continues

Supply chain issues are slowing down efforts to get new homes on the market.

"Homebuilders continue to face headwinds that were present before the pandemic especially a lack of construction workers and a lack of available plots to build on and the pandemic has exacerbated those problems," said Hatzius.

His team points to further delays from supply chain disruptions, lumber shortages, and now economy-wide labor shortages.

There is a solution to the national housing shortage which could help ease prices.

"Economic research shows that relaxing the zoning rules and other regulatory constraints that have impeded homebuilding for decades would boost supply and lower prices and rents. But in practice, this has been difficult politically," the note says.

California recently banned single-family zoning statewide, making way for more multi-family dwellings.

However, "nationwide changes seem unlikely for now, and limited state and local changes are only a partial step toward relieving the housing shortage," writes Hatzius.

Yahoo Finance +

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

More:

'Home prices will grow a further 16%' by end of next year: Goldman forecast - Yahoo Finance

A view of the Internal Revenue Service building in Washington, DC. (Photo by Brendan Smialowski / AFP)

Lets say I hire a contractor to do a project on my house, and he asks for payment in cash. It would be cheaper than if I wrote a check, and we both know why: Cash leaves less of a paper trail and the contractor might not report it as income. If he doesnt have to pay income tax on the money, hell share some of the savings with me.

This type of gray-market transaction happens all the time, every day. Parents pay babysitters and nannies in cash. Waiters earning tips report a fraction of what they take home as taxable income. People selling used cars slash hundreds or thousands off the agreed price on the bill of sale they submit to the state, so the buyer pays less in sales tax.

The Biden administration wants Congress to give the IRS authority to look in peoples bank accounts as a tool for helping find tax cheats. The premise is solid: Massive tax avoidance robs the Treasury of as much as $280 billion per year, with wealthy evaders dodging the most in taxes. One recent study found the top 1% of earners underreport their income by 21%. Matching bank records with tax filings and other documents the IRS already has would help identify whos hiding money, and where.

Sen. Rob Portman (R-OH) greets Charles P. Rettig, commissioner of the Internal Revenue Service during a Senate Finance Committee hearing June 8, 2021 on Capitol Hill in Washington, D.C. The committee is hearing testimony on the IRS budget request for 2022. (Photo by Tom Williams-Pool/Getty Images)

Story continues

Reeling in more of the tax revenue evaders already owe might restore some sense of fairness to a system many think is rigged in favor of the wealthy. Democrats with slight majorities in both houses of Congress also need new revenue to pay for a broad package of social-welfare and green-energy programs they want to pass by the end of the year. President Biden says an extra $80 billion in enforcement funding over a decade could help the IRS collect an extra $700 billion in taxes Americans already owe. That would be 900% return on investment. If the return is only one-third that, it would still be a bargain.

In practice, however, the prospect of more IRS snooping into Americans finances is an off-the-shelf outrage generator. Anti-government sentiment is near historic highs. The spread of disinformation is too. Toss in a little demagoguery, and social-media trolls will have half the country thinking the IRS is stealing money from their bank accounts. The Treasury Department says IRS bank reviews would target the wealthy, not lower- or middle-income families. But the scaremongering practically whips itself up.

The original plan was for the IRS to monitor accounts with balances of more than $600, which is meant to filter out inactive accounts or those held by kids. That threshold is way too low. Democrats drafting legislation are considering raising the cutoff to $10,000, but $100,000 or even $1 million might be a better limit. Any proposal to monitor bank accounts, in this climate, would need ironclad assurances that ordinary people wont end up as collateral damage, even if they do cheat in small ways by paying household workers in cash.

President Biden wants to give the IRS more information about money moving in and out of people's bank accounts. (Getty Images)

The IRS already has a strong incentive to focus limited auditing power on the wealthy, for one obvious reason: Thats where the money is. But the IRS sometimes follows the path of least resistance rather than the path of highest return. Audit rates for recipients of the earned-income tax creditlow-income Americans, by definitionget audited at higher rates than any income group except those earning more than $1 million, according to ProPublica.

Thats not necessarily because the IRS is cruel. Claiming the EITC can be complicated and filers often make mistakes that IRS computers pick up, triggering an audit or a delayed tax refund. Still, its a distortion of the tax enforcement system that misdirects very scarce IRS resources and contributes to the IRSs lousy reputation. The same thing could happen with bank monitoring if it turns out to be easy to spot cash babysitter payments, say, and go after middle-income workers for a couple of thousand of dollars here and there. The wealthy, meanwhile, would still have their complex tax-evading schemes, and in many cases better lawyers and accountants than the IRS can muster.

As a worker earning almost all of my income from labor, with no capital-gains tax shelters, I want the IRS to collect every penny of unpaid tax evaders owe. If monitoring my bank account will somehow shrink the massive tax gapthe $280 billion per year tax cheats owe but dont payIm all for it. The IRS already knows how much money I make and where it comes from. Monitoring my bank account would give them a little extra info on where I spend my money. Since I have nothing to, um, hide, I'd never even expect to hear from the IRS, no matter how deep they went into my account.

A Citibank bank branch at 6th Avenue in New York City. (Photo by Nicolas Economou/NurPhoto via Getty Images)

But skepticism is appropriate, and if Democrats pass legislation allowing the IRS to monitor anybodys bank account, there should be a foolproof way for Americans to know ordinary people are off-limits. In addition to a high threshold for bank balances, there could be an income threshold as welland it should be higher than the $400,000 limit Biden uses as this hands-off boundary for tax increases. Many two-income families earn more than $400,000 but live fairly ordinary lives, carpooling kids to school and sports and struggling to find a little downtime. They dont need the IRS hassling them for the Beltway equivalent of cushion change. A $1 million minimum income threshold feels about right, for starters.

In fact, how about a demonstration targeting only the richest families in America? The IRS knows who they are, and Congress could give the IRS a down payment on that $80 billion to troll around in the bank accounts of Jeff Bezos and Elon Musk and Peter Thiel and find their hidden money. After a couple of years, the IRS could report back, in the aggregate, and let everybody know how much extra tax revenue they were able to snag by matching billionaire bank records with other data. Then Congress could give them a little more money to go down the chain from billionaires to multimillionaires, and so on.

So sure. When the IRS shows that monitoring bank accounts will net enough revenue from rich tax evaders to be worth the trouble, Ill gladly let them into my account. Theres nothing to see there anyway, but it would be nice to have some assurance that they wont waste their time with people like me.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Ricks stories by email.

Read more:

Get the latest financial and business news from Yahoo Finance

Continue reading here:

Here's when the IRS can check out my bank account - Yahoo Finance

This is not supposed to happen at this time of year.

At a moment when gasoline prices are usually heading down, the reverse is happening. Prices are soaring amid a spike in the price of oil, which is refined into gas for cars.

Normally, prices ease after the end of the summer travel season as vacationing Americans go back to school and work.

This time, though, the upward pressure on prices as a result of the increase in oil is causing pain at the pump.

I dont think were going to see much of a decline this fall like we usually see, said Patrick De Haan, head of petroleum analysis for fuel-savings app GasBuddy.

The national average price of gas has been at a seven-year high in recent days. As of Thursday morning, it was $3.30, up from $3.24 a week ago, $3.18 a month ago and $2.18 a year ago, according to AAA.

That means it costs $13.44 more to fill up a 15-gallon tank today than it did at this time in 2020. Thats more than $50 a month in additional costs for anyone who fills up weekly.

Blame it on the price of oil, which is trading at about $80 a barrel. Thats up from the low $60s at one point in August and the low $70s in September.

De Haan predicted that gasoline price would rise by another few cents a gallon in the coming days.

Millennials flooding the housing market: But what (and where) are they buying? That depends.

Inflation, energy prices take toll: Winter heating bills set to jump as much as 54%

Heres what you need to know about rising gas prices:

The Organization of the Petroleum Exporting Countries recently met and decided not to increase oil production as a way to build up supply and therefore lower prices amid the global economic recovery.

That means key members of the oil cartel, like Saudi Arabia, wont be extracting more oil from the ground, keeping global supplies low and prices higher.

To be sure, OPECs influence over the global oil market has declined in recent years amid a surge of production in the U.S. and elsewhere.

Story continues

But U.S. producers havent increased production quickly because they fear that investments in fossil fuels could prove to be a poor use of their resources, De Haan said.

The (Biden) administration has made it plain and simple that they are going to be pushing a very, very accelerated time schedule to get off fossil fuels, he said.

A global spike in natural gas prices is causing some energy companies to consider switching to oil to generate heat this winter.

That unexpected increase in demand is reverberating through the supply chain and affecting the price at the pump.

That demand to turn a bigger share of petroleum into hearing oil comes as oil production has lagged far behind, De Haan said.

In some areas of the country, the spike in gas prices is eye-popping.

California is Exhibit A. The states average per gallon was $4.46 on Thursday, up $1.26 from a year ago.

In the San Francisco area, it was $4.65.

California and San Francisco specifically may spend a record amount of time at these prices, De Haan said.

De Haan said he does not believe the state or San Francisco will reach an average of $5 this year. But he did not rule it out for 2022.

Thats a topic that could come up for next spring and summer depending on if any of these supply chain issues get resolved, he said.

The average price at the top 10% most expensive stations was $4.20 last week, compared with an average of $2.77 at the cheapest 10%, according to GasBuddy.

President Joe Biden is frustrated at rising gas prices, and the Department of Energy is considering releasing crude oil from the U.S. Strategic Petroleum Reserve, a massive government supply of crude set aside for emergencies. The goal is to help ease prices.

But that might not have a big impact. Goldman Sachs analyst Damien Courvalin estimated that such a move would lead to a $3 decline in the price of a barrel of oil.

In the end, the pain at the pump may be temporary.

While oil production hasnt ramped up much yet, it will likely catch up next year, according to a report by research firm Fitch Solutions.

We think that growth in crude oil supply will soon outpace that of demand and that the (price of) crude oil will fall in 2022, the group reported.

Fitch forecasts that the average price of Brent crude, the global benchmark, will be $67 in 2022.

You can follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey and subscribe to our free Daily Money newsletter here for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Gas prices rise: Oil prices lead to increased fuel costs

Read the original:

Gasoline prices usually fall this time of year as vacation season ends. So why are they jumping? - Yahoo Finance

The supply chain crisis is testing retailers across the country ahead of the holiday season, and one executive detailed the question on everyone's minds.

As every retailer is feeling the global supply chain disruption, CarParts.com Chief Operating Officer David Meniane told Yahoo Finance Live (video above), the question becomes: "What do you do about it? Do you see it as an opportunity to be more aggressive and double down on investments? Or do you pull back?

Supply chains have been bogged down for weeks with bottlenecks in shipping and labor shortages in trucking, causing massive delays in moving goods across borders.

Oxford Economics

According to California's Marine Exchange, there are currently 61 container ships anchored and 25 at berth in the areas between Los Angeles and Long Beach, as of Oct. 11. When this happens, container fees can spike.

"Let's look at the math: It's 14 days to get a container from APAC to the U.S. and 40 days for it to get back," Coresight Research Founder and CEO Deborah Weinswig said in a previous interview on Yahoo Finance. "And we have a complete container misalignment right now. So that's 80 days, we're talking, in our opinion we're probably looking at Q1 2023 before all of those containers get back and realign."

For CarParts.com, the company has tried to get ahead of the crisis by going at maximum speed with its investments over the last year.

We've been very aggressive for the last 18 months in terms of bringing in inventory, Meniane said. "We're deploying capital. We're buying inventory. We're opening distribution centers. We're trying to get closer to our customers. ... I think we've ... done a great job at kind of working around the constraints."

Story continues

But the labor shortage is also playing a major role in compounding supply chain bottlenecks.

The Marco Polo, the largest cargo ship to call at an East Coast port, arrives into New York Harbor on May 20, 2021 in New York City. (Photo by Spencer Platt/Getty Images)

While the September jobs report noted "notable job gains" for the month, with employment in transportation and warehousing increasing by 47,000 and employment in retail trade rising by 56,000, companies are short staffed, with warehouses preparing for more tightness in the market.

All these constraints, experts have repeatedly stressed over the last few weeks, also leads to elevated inflation, and Meniane said his industry was no exception.

In terms of auto parts in general, there's definitely some inflationary pressure, both on inbound freight, outbound freight, cost of goods, and also labor, he said.

But if you look at auto parts in general, as far as protecting from inflation, it's usually a good bet, he countered, adding that "we're slightly raising prices, and we've been able to protect margin in general.

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Link:

The question that retailers are asking themselves amid the supply chain crisis - Yahoo Finance

According to data released in the Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics (BLS) on Tuesday, Oct. 12, job quits to total separations reached a record high of 71.1% in August. Co-founder of DataTrek Research Jessica Rabe believes that this indicator provides useful insight into current job market conditions.

Our Take this job and shove it indicator or quits to total separations rose to a record high of 71.1% in August since the series started in December 2000, Rabe said in DataTreks Morning Briefing newsletter. Thats due to an all-time high in quits as a percentage of the labor force (2.6 pct) and a record low in layoffs/discharges as a percentage of the workforce (0.8 pct).

DataTrek Research, co-founded by Rabe along with Wall Street veteran Nicholas Colas, provides a daily financial newsletter to hedge funds, asset managers, RIAs/family offices, and other investment firms.

Indeed, Americans are leaving their jobs at record rates. A total of 4.3 million Americans quit their jobs in August, as workers jump ship to seek higher wages and better employment conditions. The quits to total separations indicator hitting its all-time high comes around a year and a half after it reached its all-time low of just under 18% in April 2020.

Rabe noted that retail trade and accommodation and food services represented 81% of the monthly jump in overall quits in August.

Story continues

Workers continue to leave the retail and restaurant industries amid challenging demands put on existing staff due to labor shortages and other measures, such as mask requirements for customers, she said.

According to Rabe, the high quits rate in these industries throughout the pandemic means that they will remain especially constrained amid the current labor crunch. She believes that the labor market dynamics will also continue to weigh on overall employment given the size of both industries.

For example, right before the pandemic hit in February 2020, retail trade and leisure and hospitality made up a fifth of total nonfarm payrolls, Rabe said. Ultimately, this is a sign that employers are still not willing to increase pay enough to attract and retain employees, which should put upward pressure on wages.

Jobless claims numbers released by the Department of Labor Thursday morning also beat consensus estimates compiled by Bloomberg, with initial unemployment claims for the week ended Oct. 9 coming in at 293,000 against 320,000 expected and a revised 329,000 during the prior week. Continuing claims for the week ended Oct. 2 amounted to 2.593 million against 2.670 million expected and a revised 2.727 million during the prior week.

Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV

All Markets Summit

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

The rest is here:

Take this job and shove it indicator hits all-time high: DataTrek - Yahoo Finance

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Monday, October 11, 2021

Funny (or sad, depending on how you look at it) short story from this past week that will inspire you to (hopefully) scrutinize your portfolio as we head into 2022.

I enjoy grocery shopping, really ever since I raised hell down the canned-goods aisles with my mom as a kid. The thrill of finding that perfect looking steak or fish or lemon is somewhat therapeutic. A true moment of relaxation away from the addictive hue of the iPhone and in my world, the alluring laptop.

Last week, while on a 10-minute break around 7:00 p.m. ET I picked up a slab of heaven from the butcher inside the local supermarket (no, not from "Whole Paycheck"): a two-inch thick ribeye steak. Yum. I put the steak in my basket, didn't think too much about it seeing as I buy the same cut of steak once a week. The cashier rings up the steak and I almost fall on the floor: $45. Too late to put the steak back, I didn't want to be that person in line.

After I paid, I went back into the store and took a look around at the prices for "stuff" as if I was still a stock analyst doing channel checks. Down each aisle it was like I was being hit in the head by little dancing sticker prices, each seemingly 35% higher than a week earlier. All of these little dancing sticker prices were laughing at me, of course.

In light of this expedition (a bizarre one at that), I can confidently share with you this dose of wisdom to kick off the week. Inflation ain't goin' nowhere baby. In fact, you are about to be smacked in the head with laughing sticker prices for food, gas, heating oil, jeans, Red Bull and maybe even clean air if you haven't already been.

All year the Federal Reserve has shoved down Mr. Market's throat that inflation is transitory. I would encourage all of these government workers in their gilded offices to spend a week touring grocery stores and maybe do some real on the ground work because they have set investors up to fail.

Story continues

Oil prices are at seven-year highs. Natural gas prices have nearly doubled in six months. Gas prices along the West Coast are north of $4 a gallon, according to AAA. Cotton prices are up 25% since Sept. 20 (stat complements of NYSE analyst Michael Reinking).

Start saving up so you can splurge on some inflationary meat.

Having digested this impressive deep dive into the shipping crisis by Yahoo Finance editor-in-chief Andy Serwer and my latest shopping trip it's clear all sorts of price inflation will be here to stay. In other words, this notion of inflation being transitory is a cruel sick joke by a Fed trying to cover their own rear-ends.

Should one not be inclined to embrace the stats above, then take a gander at what top executives recently told me about inflation on Yahoo Finance Live:

"The reality is everything has got some inflation. I agree with your point that it [inflation] doesn't feel very transitory at the moment. The reality is we came off the pandemic, where basically most of the industrial economy and the consumer economy shut down and now the demand has snapped back much faster than pretty much everybody has predicted." Dow CFO Howard Ungerleider. He added he is "working to raise prices" to compensate for higher costs.

"We have been able to lock in the price of cotton for the first half of next year at very, very low single-digit [percentage] inflation. We are negotiating for the second half [of 2022] and we think we can offset inflationary prices." Levi Strauss CFO Harmit Singh

"There is really no company that is immune to what has been happening in terms of commodity as well as operation expense inflation. Everyone's prices are up a little bit in a world where prices are increasing." PepsiCo CFO Hugh Johnston

Inflation is appearing so sticky that "stagflation" a slowing economic growth backdrop and high levels of inflation has become the topic de jure among clients at Goldman Sachs.

"Stagflation was the most common word in client conversations this week as equity market volatility remained elevated," said David Kostin, Goldman Sachs U.S. equity strategist.

Markets have historically hated stagflation, per Goldman's research.

"During the last 60 years, the S&P 500 has generated a median real total return of +2.5% per quarter, but that quarterly return fell to -2.1% in stagflationary environments, worse than the median returns in environments characterized solely by weak economic growth or high inflation," Kostin added.

Brawny paper towels = increasingly brawny price.

So what's the play for investors in a world where inflation isn't going anywhere anytime soon? Well, it could be multi-faceted, depending on your level of investing expertise. Here's what several market veterans told me on how to invest amid pesky inflation:

"As cost inflation accelerates, we recommend dividend growth stocks that benefit from inflation. We also like small caps, which are more tethered to U.S. GDP, benefit more from capex cycles (highly correlated with commodity inflation) and trade at a historical discount vs. large caps. The equity market offers far more attractive inflation-protected yield than TIPS [Treasury Inflation Protected Securities]." Savita Subramanian, Bank of America equity and quant strategist

"From a sector perspective, higher energy prices are often associated with rising inflation, and we are currently overweight the energy sector which is a beneficiary of higher oil prices. Also, if there is inflation, that is typically associated with higher rates, which would benefit financials; we are also overweight. We are also overweight REITs the index is a diverse mix of industries, but given we are seeing a rise in rents and a shortage of supply in housing and areas such as cell towers have pricing power, this is another area that should benefit. Outside of sectors, commodities in general should be a beneficiary of supply disruptions and the Bloomberg commodity index just hit a cycle high. Within a portfolio context, you would generally want to be underweight fixed income in a rising rate inflation environment. Within fixed income, investors would want to be short duration and generally overweight areas such as leveraged loans, which would provide a hedge against the Fed tightening policy quicker than current market expectations to deal with inflations, and TIPS which are indexed to inflation." Keith Lerner, Truist Wealth co-chief investment officer/chief market strategist

"From a market standpoint its banks and materials/resources. Banks benefit from rising rates. Resource stocks (miners, energy companies, agricultural companies) benefit from rising commodity prices. Mix in commodity exposure but not too much. Just some as its volatile (and most investors should just use ETFs). More broadly, go value over growth. In the fixed income realm look for floating rate debt or short duration. Bank loans or senior secured debt that reprices frequently will outperform as rates rise. Finally, watch for the exits. At some point the Fed will kill inflation and markets will drop. But were likely years from that now." Tom Essaye, Sevens Report Research founder

Now go forth and slay the inflationary beast coming for your portfolio. As for me, I am off to find a cheaper cut of steak or to open a crypto trading account so I can afford the ribeye I have been eating for the past 20 years.

Bank earnings: Speaking of things rising in price, bank stocks have been on fire into earnings this week, from JPMorgan, Bank of America, Goldman Sachs and Morgan Stanley (preview here from Yahoo Finance's Emily McCormick). The KBW Bank Index is up a cool 40% on the year (Wells Fargo up the most among the big banks, go figure, +59%) as traders bet on rising rates (positive for bank margins) in 2022 and a supportive economy for loan growth. Since the Fed's last policy decision on Sept. 22 where it signaled a bond tapering plan was nearing the KBW Bank Index has added 6.5%. I would say the backdrop for bank stocks is ripe for a sell the news event bank profit margins could disappoint elevated expectations due to rising costs for talent, among other inflationary expense lines. A couple items to be on the lookout for in these reports: 1) trading revenue in light of the pickup in activity late in the quarter in stocks and bonds; 2) debit and credit card spending by customers inside a slowing growth environment; 3) hints of new year-end expense cutting programs to counteract inflationary costs; 4) efforts on the crypto front.

Hasbro: I send my best wishes to Hasbro CEO Brian Goldner. Hasbro disclosed yesterday its long-time CEO will take a medical leave of absence to focus on his health. Goldner disclosed in August 2020 that he was undergoing ongoing medical care following treatment for cancer in 2014. Full transparency, Goldner gave me one of my first "CEO interviews" when I was starting out in this crazy news business. He has led the public company for 13-plus years. I wish him a speedy full recovery.

By Brian Sozzi, editor-at-large at Yahoo Finance and anchor for Yahoo Finance Live. Follow him at @BrianSozzi

Try Yahoo Finance Plus now.

Economy

Earnings

Politics

The U.S. House of Representatives and Senate are both out of session until Oct. 18.

The World Bank Group and the International Monetary Fund (IMF) kick off their annual meetings in Washington D.C. They will release the World Economic Outlook tomorrow morning.

European markets suffer sluggish start amid interest rate concerns [Yahoo Finance UK]

Lenovo stock drops 17% after withdrawing Shanghai listing application [Reuters]

Southwest cancels many flights, blames weather and air traffic control issues [Reuters]

China tech stocks extend rebound on relief over Meituan fine [Bloomberg]

Federal Student Aid's Cordray details increased oversight over student loans

Child care woes leave small biz 'struggling to get people in' as job growth fizzles

Natty Light introduces flavored vodka as domestic beer sales slump: 'Nothing is off the table'

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

See the rest here:

Inflation is here. It's ugly. It stings. But it could make you money: Morning Brief - Yahoo Finance

BeInCrypto

Edward Snowden recently took to Twitter to weigh in on the hypothetical central bank digital currency (CBDC) issued by the US Federal Reserve Bank (Fed). In the tweet, Snowden commented on and gave criticisms against CBDCs.

Edward Snowdens (@Snowden) original post was a link to an article that he published about CBDCs on Oct 9, 2021. In this post, Snowden delivers a comprehensive description of his position and arguments on the state of CBDCs and how they might be implemented by the US Federal government. Importantly, he stated that he is hoping for the article to specifically to influence the Feds much-heralded and still-forthcoming discussion paper, a group-authored text on the topic of the costs and benefits of creating a CBDC.

In the reply which Snowden later responded to @adasound_io (the Twitter handle of the Cardano-based NFT platform for musicians), sharing an excerpt of an opinion piece written by Dr. Prasad which was published in the New York Times in July 2021. In the excerpt, Dr. Prasad presents his arguments, which appear to paint the so-called digital dollar in a positive light.

This story was seen first on BeInCrypto Join our Telegram Group and get trading signals, a free trading course and more stories like this on BeInCrypto

Follow this link:

Snowden: Deflationary Fed-Controlled CBDC Will Cause Annihilation of Savings - Yahoo Finance

From first dates to family outings, a night at the movies used to be a huge pre-pandemic draw. However, one of societys biggest rituals is struggling to recover, even as COVID-19 capacity limits are lifted.

Like many other sectors, the longer-term survival of movie theaters is a huge open question, especially among small and independent operators. Many theaters across the country were shuttered for over a year as Hollywood drastically curtailed the number of new releases, or narrowed the theatrical windows before making them available on video.

This weekend, Daniel Craigs final turn as James Bond in No Time to Die will be a big test of the publics willingness to turn out in the same numbers as before the virus dramatically changed life around the world.

Even though U.S. movie theaters have now fully reopened and people are finally returning to the cinemas, an ever-expanding glut of streaming options make some observers doubt that cinemas golden era will return soon if ever.

People were going to movie theaters less frequently [and] the pandemic has served as an accelerant to those trends, Paul Hardart, director of entertainment, media and technology program at New York Universitys Stern School of Business, told Yahoo Finance in an interview.

The pandemic also changed certain aspects of consumers at-home viewing habits, which shows no signs of slowing down. According to a June 2020 study by Statista, 14% of adults surveyed strongly preferred seeing a movie for the first time in a theater, but 36% said that they would much rather stream at home.

Meanwhile, at home options are booming. About 20% of time was spent on streaming last year, according to Nielsen data recently cited by The New York Times, and may hit 33% by the end of the year, the report added.

Another challenge has been inflation: Ticket prices have been on the rise, with the average ticket price in the US jumping from $5.39 in 2000 to $9.16 in 2020, which even before COVID-19 was cited by consumers as a negative.

Story continues

We can all expect the ticket price to go up and the type of movies that we go see will start to change, Hardart said.

People wear face masks as they walk by a movie theater during the coronavirus disease (COVID-19) pandemic in Newport, New Jersey, U.S., April 2, 2021. REUTERS/Eduardo Munoz

However, recent months have given some theaters cause for optimism.

Over Labor Day weekend, Classic Cinemas locations in Illinois and Wisconsin saw more visitors than in 2019 to see the release of Marvels (DIS) Shang-Chi and the Legend of the Ten Rings, which bowed to a debut of over $70 million.

It was the first time attendance at the family-owned chain surpassed pre-coronavirus numbers since reopening in April, coing after a year-long shutdown.

The guests are absolutely willing, able, and coming back when there are movies they want to see, said Chris Johnson, CEO of Classic Cinemas.

As the first Marvel film to be shown exclusively in cinemas since the pandemic began, Shang-Chi cleared a huge bar for moviegoers willingness to come back to theaters Julys Black Widow was a simultaneous Disney+/ theater release, and earned more on streaming than on screens).

During the pandemic, studios like HBO/Warner (T) (DISCA) followed a similar hybrid strategy, hoping it would buy time until mass vaccinations would curb COVID-19s spread.

We need consistent supply. We could build some momentum this year but its all reliant on the studio product.Chris Johnson, CEO of Classic Cinemas

However, the Delta variant surge unsettled many moviegoers, and the dual release strategy was a perverse incentive of sorts. When given the option, many consumers just decided to watch from home.

Monthly data from Datex Property Solutions shows that national chains paid 95% of owed rent in August as receipts rebounded. Collections from movie theaters have skyrocketed 81% from 48.9% a year ago, but sales are down by 48% since 2019, Datex found.

However, occupancy costs are up a staggering 96% relative to 2019 one reason why chains like ArcLight Cinemas and Pacific Theatres have closed many of their Los Angeles locations permanently.

The closures have flooded the LA market with movie theater real estate an opportunity major chains such as Regal, AMC and Cinemark will likely capitalize on as the three make up nearly 70% of the regional cinema market, CBRE Group Inc. said in a recent report.

We need consistent supply, Classic Cinemas Johnson told Yahoo Finance. We could build some momentum this year but its all reliant on the studio product.

Like many of its cohorts, Classic Cinemas was decimated by the pandemic. After its long closure, the movie theater installed a new air filtration system, hired extra cleaning staff to attract more customers, and paid more for just about everything.

The challenge is when you're trying to spread that out amongst a small movie going audience, everything gets sort of taken care of when you have the appropriate number of people, Johnson said.

The chain got Paycheck Protection Program (PPP) and Shuttered Venue Operators Grant (SVOG) money, which helped cover labor and overhead through the pandemics worst days.

Still, the box office is limping back to normal as people slowly head back to the movie theaters. The global box office is expected to reel in $20.2 billion in 2021, down 52 percent from the record-breaking 2019, but 68 percent above last year according to a new study from London-based data firm Gower Street Analytics.

I am absolutely confident that if we're supplied with movies that we're going to be fine, Johnson added. Movie theaters will be back.

A moviegoer shops at concession stands retrofitted with plexiglass partitions before the movie "Raya and the Last Dragon" on the reopening day of El Capitan theatre during the outbreak of the coronavirus disease (COVID-19), in Los Angeles, California, U.S., March 19, 2021. REUTERS/Mario Anzuoni

Yet signs are emerging that movie lovers are more eager to fill seats again.

Sonys Venom: Let There Be Carnage blasted past all expectations with an estimated $90.1M opening on over 4,000 screens , the best opening weekend previously set by Disney Black Widow at $80.73M.

While cinemas are showing signs of recovery from last year, it's been a wild ride for the film industry. Big players like Disney, HBO and more recently Comcasts (CMCSA) Peacock platform opted to make many of its new films available in cinemas and streaming, either for free or for a $30 fee (Disney+).

For its part, Disney seems to be confident that consumers are ready to return to cinemas and the future of blockbuster features are on the big screen. After Shang-Chi defied expectations, the company announced the rest of its 2021 schedule will be shown in theaters exclusively.

Everyone acknowledges the fact that film distribution fails to become profitable without the theatrical presence, said Cory Jacobson, president and owner of Michigan-based Phoenix Theatres. If you do not have the theatrical window in place, it's just lost money.

Amid the anticipated arrival of No Time to Die, which earned $22 million in global ticket sales in its first two days of release, the jury is still out on whether movies will be viable again.

Meanwhile, new headwinds could emerge as moviegoers in big cities like New York will now have to show proof of vaccination status and wear a mask in order to attend screenings.

According to NYUs Hardart, the Delta variants prevalence will make movie goers reconsider going to the cinemas and wait to watch it at home.

I am not worried about wearing a mask for two hours. I'm not worried about getting sick, Hardart said.

A recent Deloitte study underscores the pandemic-era challenges for movies, with 57% of respondents saying watching TV and movies at home continues to be the overall favorite entertainment options.

Although box-office receipts suggest that movie theaters are heading for a recovery, bigger chains have been the main beneficiaries.

AMC (AMC), which made a number of bold moves to lay the groundwork for its renaissance, is banking on consumers coming back to theaters. Riding the wave of the meme stock trading phenomenon, the company has raised more than $1.8 billion in cash, mostly from stock sales.

The retail investors provided AMC a lifeline, Alicia Reese, equity research analyst, told Yahoo Finance in an interview.

They have the cash to reinvest in the company to expand their footprint with some of the theaters that are coming up for sale because they didn't make it through the pandemic, Reese added.

The company will also pay down some of its $5 billion in debt, reducing interest costs and paying millions in unpaid rent.

AMC barely escaped bankruptcy this year. But small, local theaters lacking the same resources may not be so lucky, especially as operating costs climb.

We spent $10,000 on hand sanitizer, which is a lot of hand sanitizer, said Jacobson, who also got PPP and SVOG assistance.

In December, the Small Business Administration set up a $16.1 billion fund to provide eligible movie theaters, live venues operators and performing arts organizations with grants that could help save their businesses.

The people that are in it for the long haul seem to be pretty happy and bullish about the future and where they're going with this, Jacobson said.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn and YouTube.

Follow this link:

Theaters in Bond-like No Time to Die' survival mode as Hollywood banks on return - Yahoo Finance