There are many types of investment accounts you can use to grow your money for retirement or other goals. One of the main reasons investors choose a Roth IRA is the potential for tax advantages later in life: if you expect to be in a higher tax bracket after you retire, you can benefit from your contributions being taxed at a lower rate when you invest now compared to the higher tax rate you expect in the future. 

In this article, we’ll cover: 

• How a Roth IRA works
• Roth IRA contributions
• Roth IRA distributions
• Investment choices in a Roth IRA
• Roth IRAs vs other retirement accounts

How do Roth IRAs work?

Investors contribute to their Roth IRA with after-tax dollars, which means they’ve already paid taxes on them. That money then grows tax-free; once you reach age 59½, qualified distributions of your contributions and earnings are tax-free. 

A Roth IRA can be opened at many banks, brokerage companies, federally insured credit unions, and savings and loan institutions. While investors can open a Roth IRA at any time, contributions for a tax year are required to take place by the investor’s tax-filing deadline, which is normally April 15 of the following year.

Take control of your tomorrow with an IRA.

Set aside money for retirement-and save on taxes-with a traditional or Roth IRA.

Learn more

Roth IRA contributions

There are several ways investors can go about getting started with a Roth IRA and a number of eligibility requirements they have to consider.

Who is eligible to open a Roth IRA?

Anyone who earns income can contribute to a Roth IRA, regardless of age. However, the IRS sets income eligibility limits for Roth IRAs. At higher income levels, investors may be able to contribute to a traditional IRA but not a Roth IRA.

If you’re a high-income investor who wouldn’t normally qualify for a Roth IRA, take a look at the backdoor Roth IRA. This loophole allows high earners to legally take advantage of Roth tax benefits.

What is the max contribution to a Roth IRA?

For 2023, investors under 50 can contribute a maximum of $6,500 to their Roth IRA, and those 50 and older can make up to $7,500 in contributions. However, that limit may be reduced based on your income and tax filing status. 

If you make over $138,000 if single or less than $218,000 if married and filing jointly, your maximum contribution limit will be lower. These income limits are updated periodically by the IRS. 

If you earn less than the contribution limit, you can only contribute up to the amount of your taxable compensation for the year. For example, earning $4,500 in 2023 means you can only contribute up to $4,500 for that year.

Notably, these investment limits apply to all IRA accounts you have combined, both Roth and traditional IRAs. For example, if you’re under 50, you could contribute $3,250 to your traditional IRA and $3,250 to your Roth IRA, for a total of $6,500 in the year.

Exceptions to Roth IRA contribution limits

There are a few special circumstances that will affect your Roth IRA contributions. 

• Employer contributions: Some small businesses and self-employed individuals can open a SEP-IRA or SIMPLE IRA. These plans allow them to contribute to their employees’ retirement; keep in mind that there are generally limits on employer contributions. If your employer contributes to one of these accounts for you, that doesn’t count toward the maximum contribution you can make to any personal IRA accounts you have. For instance, you can contribute $6,500 to your Roth IRA if you’re under 50, even if your employer contributes money to your SEP-IRA. 
• Spousal IRA contributions: Generally, taxable compensation is required in order to contribute to a Roth IRA. However, if you’re married and file your taxes jointly, a spouse who doesn’t earn any income can open a spousal IRA, and the working spouse can contribute to that account up to the annual limit. That’s in addition to the annual limit for their own Roth IRA. There are, however, some restrictions on spousal IRA contributions. 
• Reduced contribution limits: For a full breakdown of how much you can contribute at different income levels and filing statuses, check out the IRS table on reduced contribution limits for Roth IRAs. 

How to contribute to a Roth IRA 

• Regular contributions: Regular contributions must be made in cash and can’t include things like property, securities, rental income, or interest income. Generally, you can only contribute earned income such as salary, wages, commissions, and bonuses. If you’re self-employed, your earned income is your net earnings from your business minus deductions to other retirement plans and taxes. 
• Transfers: A transfer, also called a direct transfer or a trustee-to-trustee transfer, means one Roth IRA custodian sends money directly to another Roth IRA custodian, and the money does not pass through an individual’s hands. With a direct transfer, no taxes are withheld.
• Rollover contributions: Investors who have a Roth 401k, in which they’ve already paid taxes on their contributions, are able to roll that money into a Roth IRA. Rollover contributions do not count towards their yearly contribution limit. This IRS rollover chart explains what types of accounts can be rolled over and the relevant restrictions. 

Roth IRA distributions

A Roth IRA is a retirement account and, like all retirement accounts, comes with rules and penalties around how and when you can withdraw your investments.

When can you withdraw from a Roth IRA?

There are two types of penalty-free distributions, or withdrawals, from your Roth IRA. 

• Initial investment: The money you put into your Roth IRA is relatively liquid. You can withdraw up to the sum you put into the account without paying taxes or penalties. Your contributions are not considered taxable income because you already paid taxes on that money before putting it in the account.
• Qualified distributions: A qualified distribution is a withdrawal that takes place at least five years after you started making contributions and is taken when you are either at least 59½ years old, you are disabled as defined by the IRS, or the a distribution is to a beneficiary of your estate following your death. 

The five-year rule

The Roth IRA five-year rule says that you cannot withdraw earnings tax-free until it’s been at least five years since you first contributed to a Roth IRA account. This five-year waiting period applies even to those aged, 59 ½ and older, who would otherwise get qualified distributions. 

Early distribution penalties

People investing for retirement lose out on the tax advantages of a Roth IRA if they take out their money early. If you withdraw earnings that don’t meet the rules for a qualified distribution, you’ll have to pay income tax on that money, plus a 10% penalty tax. There are a few exceptions, such as money withdrawn for a first-time home purchase and qualified educational expenses. You can find details on all the exceptions to the early distribution penalty at the IRS website.  

Investment choices in a Roth IRA

Roth and traditional IRAs are both relatively straightforward accounts once you’ve met their requirements and understand their limitations. You can choose the investments in your Roth IRA yourself or use robo-advisor to put your money to work in several different kinds of investments. 

Investments you can make in your Roth IRA include:

• Individual stocks
• Individual bonds
• Exchange-traded funds (ETFs)
• Index funds
• Mutual funds

Keep in mind that Roth IRA accounts are investment vehicles, not investments in and of themselves. You can make money with a Roth IRA by investing your contributions in securities. That means you must put your contributions into an investment once you’ve opened your account, or your money won’t be doing any work for you. When you open a Roth IRA, be sure you understand how the financial institution handles your contributions when you make them to ensure your money is being invested, not just sitting around as cash.  

Pros and cons of a Roth IRA 

Roth IRAs can be a powerful vehicle in your retirement investing strategy, but they also come with a number of drawbacks investors should consider. 

Benefits of a Roth IRA

• Tax-free growth: Investors enjoy tax-free growth on their investments. As long as you withdraw your earnings after you’re 59½ and have met the five-year rule, you don’t pay any tax on your earnings.
• Tax-free distributions: Investors don’t have to pay taxes on their withdrawals because they paid their taxes up front, possibly when they were in a lower tax bracket. 
• Can withdraw contributions before retirement: The money you contribute to the account is liquid, which means you can withdraw your contributions anytime without any penalties should you need that money. 
• Flexible timing: While investors have an annual contribution limit, they can contribute up to that limit anytime during that tax year. So you could contribute a little bit from each paycheck throughout the year so that you’re adding money to your retirement account on an ongoing basis. 
• No distribution minimums: Upon retirement, investors don’t have required distributions, so they can theoretically hold money in their account as long as they want. This is a major difference between Roth IRAs and traditional IRAs; some investors opt for a Roth IRA because they want to keep their money invested for as long as possible or pass their IRA down to their heirs after death.

Drawbacks of a Roth IRA

• No tax-deductible contributions: Unlike with a traditional IRA, you cannot deduct your contributions from your taxable income because you’ve already paid taxes before depositing your money into a Roth IRA. 
• Income limit: If you earn more than the income limits, the amount of money you can contribute will be reduced. Some people earn too much to contribute to a Roth IRA directly and must use a backdoor Roth IRA or traditional IRA instead.
• Withdrawal taxes and penalties: Any withdrawals that aren’t qualified distributions are subject to taxes and penalties, barring certain narrow exceptions. These penalties may outweigh any tax advantages you gain with a Roth IRA.  
• Low maximum contribution: The maximum contributions you can make to a Roth IRA are relatively low. Many investors will likely need other retirement vehicles in order to save enough for retirement.
• No employer matching: Unlike a 401(k) or other employer-sponsored retirement account, a Roth IRA does not provide opportunities for employer contributions. 

Roth IRA vs. traditional IRA vs. 401(k)

A Roth IRA, traditional IRA, and 401(k)s are all types of retirement accounts. Each account has different rules, limitations, and benefits that investors can take advantage of, and many people will hold all of these account types. 

Remember, investors are allowed to have all these investment vehicles at the same time. Many people invest in a 401(k) up to the amount their employer matches in order to take make full use of that benefit, then “max out” their contributions to a Roth IRA or traditional IRA. By diversifying where you make your retirement investments, you can take advantage of the different benefits offered by the different account types. 

Is investing in a Roth IRA right for you? 

Once you understand what a Roth IRA is and what it can do for you, you may want to jump right in. But it’s important to take a look at this tax-advantaged retirement account from the perspective of your whole portfolio.

A Roth IRA can make a lot of sense at certain points in your life, but whether or not it’s right for you comes down to how much money you’re making now and how much you expect to make when you stop working. Young investors who expect to make more money in the future could benefit from front-loading their tax burden; you can pay taxes on your money now while you’re in a lower tax bracket, then let it grow tax-free in a Roth IRA. 

Other investors may benefit more from a traditional IRA or 401(k) because those contributions are tax-deductible, which could lower your tax burden for the years in which you contribute.

Which tax-advantaged retirement account, or combination of accounts, is right for you will depend on your unique situation and plans for the future. In any case, it’s never too early to start saving for retirement. The sooner you start, the more wealth you can accumulate for your golden years.  

Investing made easy.

Start today with any dollar amount.

Get Started

The post What Is a Roth IRA? The Complete Guide appeared first on Stash Learn.

Get Started

Welcome to the Weekly Scan. Here’s what we’re following for the week of January 23, 2023.

Hastings hits the road. Netflix’s founder Reed Hastings announced last week that he will be stepping down as co-CEO of the streaming business. Hastings’ current counterpart Ted Sarandos will stay on, and chief operating officer Greg Peters will take over Hastings’ role. Hastings has held the position of CEO since he started Netflix in 1997 and will now serve as executive chairman, where he plans to serve for “many more years to come.” The change in leadership came alongside its most recent earnings report. 

CNBC.

Debt drama continues. As predicted by Treasury Secretary Janet Yellen, the U.S. hit the debt ceiling—$31.4 trillion—on Thursday, January 19. The Treasury will take “extraordinary measures” to prevent the U.S. from defaulting on its debt, according to Yellen. Those measures are set to protect the U.S. from defaulting until June 5, 2023. Yellen has called upon Congress to raise the debt ceiling, but Democrats and Republicans have already expressed an unwillingness to compromise.  Things could become even more difficult as Republicans have control of the House of Representatives, while Democrats hold a majority in the Senate, and the executive branch.

CNN.

Party pooper. Party City has filed for Chapter 11 bankruptcy, as the pandemic and changing consumer behaviors challenged the party supplier’s business. The chain of party stores made a deal with creditors that will support the company as it restructures. The creditors will also convert Party City’s debt to equity, and the company plans to exit bankruptcy in four months. Party City has attributed its woes to smaller gatherings due to the pandemic, lower consumer demand, supply chain issues, and inflation. 

Wall Street Journal.

Something’s fishy. Sales of canned tuna are reportedly on the rise, thanks in part to TikTok. In 2022, sales of canned seafood increased by 9.7% to $2.7 billion as young people look for cheaper food options. The hashtag #tinnedfish, which has more than 25 million views on TikTok, is also reportedly driving demand to younger consumers. Canned fish makers like Wildfish Cannery and Bumble Bee Foods are investing in new marketing campaigns and increased output to meet demand. 

Wall Street Journal.

The post The Weekly Scan January 23, 2023 appeared first on Stash Learn.

The summer of ‘69. Jobless claims fell to their lowest level in more than 52 years, according to the latest data from the U.S Department of Labor. Unemployment claims totaled 187,000, which marked a decrease of 28,000 from the previous week. The number of claims reportedly hasn’t been that low since September 6, 1969, when unemployment claims amounted to 182,000. Unemployment rolls also continued to fall, which is contributing to wage inflation, as the job market forces employers to attract workers with higher wages. The seasonally adjusted insured unemployment rate for the week was 1.0%, according to the Bureau of Labor Statistics. 

• The takeaway: The strong job market could motivate the Federal Reserve (the Fed) to raise the federal funds rate by half a percentage point. On March 16, 2022, the Fed raised the federal funds rate by a quarter of a percentage point, the first rate increase since 2018. If jobless claims remain below 200,000 for several weeks, it could cause concern with the Fed. Currently, there are many more job openings than there are available workers, which means companies aren’t laying off employees.

NBC News

The emission commission. The Securities and Exchange Commission (SEC) has proposed new rules that would require public companies to disclose their greenhouse gas emissions and the climate risks to their businesses. Under the proposal, companies would need to outline their climate risks, the costs associated with moving away from fossil fuel usage, and the costs to their businesses that would be caused by climate change. Companies would have to disclose the direct and indirect greenhouse gas emissions that their work creates. While the SEC released voluntary climate change guidance for companies in 2010, these new rules would be the first mandatory climate guidelines from the commission. 

• The takeaway: Risks of climate change are often overlooked by businesses, which are some of the biggest contributors to greenhouse gasses. The SEC rules are part of a larger government effort to combat climate change. In May 2021, President Biden issued an executive order demanding steps towards fighting climate change, while creating jobs and reducing greenhouse gas emissions. Biden’s climate objectives include reducing greenhouse emissions by 52% below 2005 levels by 2030. The president also hopes to make electric power carbon-free by 2035, and reach net-zero carbon emissions by 2050. Investors are increasingly asking for climate information from companies, according to AP. And many companies already offer that information. But the new rules from the SEC would provide a uniform system. 

AP News

Russia online. President Biden has warned that Russia may be exploring ways to levy cyberattacks on critical infrastructure in the U.S. The president said that American intelligence had found that Russia may attack electrical grids, water treatment plants, hospitals, and the financial sector. Deputy National Security Adviser Anne Neuberger said that there hasn’t been evidence of a specific cyberattack threat, but that “preparatory work,” such as scanning websites and hunting for vulnerabilities, had been noticed, according to reports. In a White House briefing to 100 companies, the Biden Administration also urged businesses to beef up cybersecurity measures. 

• The takeaway: The threat of Russian cyberattacks on American companies is thought to be a response to economic sanctions from the U.S. Russia would reportedly take the cyber route in its counterattack to avoid provoking all-out war with the U.S. The Department of Homeland Security is calling on companies to report any cyber incidents to authorities. The Biden Administration has been pushing companies to increase security efforts in recent months. Russian cyber gangs were found to be behind certain attacks last year, such as the one on the Colonial Pipeline in June, which resulted in a temporary shutdown of the pipeline.

CBS

Where’s my tip? People are suddenly feeling less generous, and they’re tipping less, according to Block Inc., owner of payment app Square. That reverses a trend at the height of the pandemic, when 30% tips in some places weren’t uncommon. For purchases made over the phone or online, the share receiving a tip fell to 84.8% as of February 28, 2022, from 85.7% roughly a year earlier. Tipping reportedly increased to almost 90% during the pandemic, up from less than 50% before the pandemic. While total tipping has fallen, in-person tipping is on the rise. For remote transactions over a 12-month period, the average tip amount hovered around 16% for remote transactions, but ticked up to 21.2% from 20.6% for in-person transactions. 

• The takeaway: Throwing businesses extra cash surged during the pandemic, as people found ways to make up for business closing for in-person services. Consumers tend to show monetary appreciation differently under particular circumstances,for example tipping more when they perceive a service involves risk, research shows. But that could be changing now as consumers face pressure from inflation, which is at its highest level in decades.

Wall Street Journal

Other stories we’re following:

Revving up rates. Fed chairman Jerome Powell said the Fed could start raising the federal funds rate more aggressively in half-a-percentage point increments to fight inflation, rather than in smaller quarter-point jumps. Last week, the central bank raised rates for the first time since 2018, to a range between 0.25% and 0.5% from 0%.

Big yellow taxi. New York City dwellers will soon be able to hail the city’s famed yellow cabs using the Uber app. Rather than running a meter, the app will tell customers the full cost of hte ride. The partnership with the city’s taxi industry could be a lifeline for cab drivers, who have  been hurt by the pandemic, and the rise of ride-hailing services such as Uber and Lyft. 

Amazon’s touchdown. Amazon’s streaming service poached football commentator Al Michaels from Sunday Night Football to announce Thursday Night Football on Amazon Prime Video. 

 Here’s what we covered last week in the Scan: 

• The Fed raises the federal funds rate by a quarter of a percentage point.
• The U.S. Department of Defense will reportedly order 33 fewer F-35s from Lockheed Martin than it had planned.
• Howard Schultz returns to Starbucks as CEO for the third time. 
• Walmart plans to add 50,000 workers by April 30, 2022, the end of its first quarter.

The post The Weekly Scan March 28, 2022 appeared first on Stash Learn.

Gotta go up to get down. Last week, the Federal Reserve (the Fed) raised the federal funds rate by a quarter of a percentage point, its first increase since 2018. The new rate is between 0.25% and 0.5%. The Fed slashed the rate to near 0% in March 2020 as the pandemic shut down the economy. The Fed reportedly will raise that rate up to six more times in 2022. This central interest rate affects interest rates throughout the economy. One goal of raising interest rates is to combat inflation, the rate at which prices for goods and services increase over a period of time. Ideally, higher interest rates make it more difficult for people to borrow money for cars, homes, and more, so demand for those things slows down, and so do prices. 

• The takeaway: Inflation has climbed steadily over the past several months, fueled by low borrowing costs, high consumer demand, and supply chain issues, among other things. In February 2022, the inflation rate, which is measured by the Consumer Price Index (CPI), was 7.9% for the year ending February 2022, the largest spike since 1982. By raising the federal funds rate periodically throughout the year, the Fed is aiming for a “soft landing” from the current state of inflation. Raising interest rates can slow economic growth, so the Fed wants to move slowly to avoid triggering a recession.

New York Times

Can I change my order? The U.S. Department of Defense will reportedly request 61 F-35s from Lockheed Martin in its 2023 budget plan, 33 fewer stealth jets than the department had initially planned to purchase. The request includes 33 for the Air Force, 13 for the Navy, and 15 for the Marine Corps. The U.S. will also increase its purchase of Boeing’s non-stealthy F-15EX jets to 24, up from 14. The reduction of the F-35 request  could be a controversial change to the $770 billion budget plan for the year beginning on October 1, 2023. Currently, the U.S. is using F-35s to monitor Russia’s invasion of Ukraine. 

• The takeaway: The reasoning behind the Defense Department’s decision won’t be known publicly until the actual budget is released. But the change could be related to the F-35’s “Block 4” software and hardware upgrade, which is already being used on the jets despite it being “immature, deficient and insufficiently tested,” according to the Pentagon. The department could be holding off on its objective  to purchase 1,763 of the jets until that Block 4 update is successfully deployed. Additionally, a combat simulation of the jets’ against Russian and Chinese technology has been delayed to 2023, which could have contributed to the budget change.

Bloomberg

Schultz takes an extra shift. Howard Schultz is returning to Starbucks as CEO for the third time to tackle the current issues facing the coffee chain. Schultz served as the company’s CEO from 1987 to 2000, making Starbucks the household name it is today. He returned as CEO again in 2008 with the goal of improving performance, and retired again in 2017, when he was replaced by Kevin Johnson, who will step down and take on an advisory role. As CEO, Schultz will earn a base salary of one dollar, with company benefits. He won’t receive any other compensation or benefits. 

• The takeaway: When Schultz resumes his duties, he’ll be tasked with handling the increasing push for unionization among Starbucks workers, as well as recovery from a pandemic-induced sales drop. Of the 9,000 total Starbucks locations, 130 have now petitioned to unionize. Six locations are seeking representation from the Starbucks Workers Union. Some investors have asked Starbucks not to engage with employees unionizing, but Starbucks has said they hope to keep the line of communication open. Starbucks has also announced three wage increases, which are expected to amount to $1 billion. Additionally, at the height of the pandemic, Starbucks’ same-store sales fell for the first time in more than 10 years. 

ABC News

You’re hired. Walmart said that it plans to add 50,000 workers by April 30, 2022, the end of its first quarter. The new hires will cover store roles, as well as those in health and wellness, and advertising. Throughout 2021, the retail chain hired more than 100,000 workers, including 5,500 pharmacists and pharmacy managers, more than 13,000 pharmacy technicians, and roughly 4,500 truck drivers. Walmart is the largest employer in the U.S., with 1.6 million employees on its payroll in the U.S., and 2.3 million workers globally. 

• The takeaway: Walmart’s hiring announcement comes as employers struggle to attract workers during a national labor shortage. The retail giant raised its minimum wage for workers to $12 in September 2021, and pays $30 per hour for some roles. The company’s average hourly wage is $16.40. Walmart has also started offering its employees free telehealth and mental health services, as it attempts to rebuild its hiring and human-resources practices. And over the summer of 2021, Walmart said it would cover some college costs for workers. Walmart isn’t the only company wooing workers. Companies like Target, Amazon, and Costco are raising wages and offering new perks. Target has raised its minimum wage to as much as $24. 

CNN and Wall Street Journal

Other stories we’re following:

Make it. Despite ongoing supply chain concerns, U.S. factory production, a key indicator of economic health, rose to its highest level in four months in February, while manufacturing capacity increased by the biggest amount since 2018.

Can we watch? Streaming giant Netflix said it will test charging people who share account passwords outside of their families. They will encourage users to set up sub-accounts for $3 a month.

You’ve got the power. Layoffs reached a two-decade low, with employers letting go or discharging less than 1% of staff in December 2021, according to the Department of Labor.

 Here’s what we covered last week in the Scan: 

• Inflation continued to climb in February 2022, according to the latest data from the Bureau of Labor Statistics. 
• President Biden has banned imports of oil, gas, and coal from Russia as Russia continues to invade Ukraine. 
• Tesla CEO Elon Musk asked a federal judge to throw out a previous settlement he reached with the Securities and Exchange Commission (SEC)  in 2018 over allegations of fraud.

The post The Weekly Scan March 21, 2022 appeared first on Stash Learn.

No end in sight. Inflation continued to climb in February 2022, according to the latest data from the Bureau of Labor Statistics. The inflation rate, which is measured by the Consumer Price Index (CPI), was 7.9% for the year ending February 2022, the largest spike since 1982. Almost every category of consumer prices moved up from January to February 2022. Grocery prices surged 1.4%, the biggest one-month increase since 1990, except for during 2020, due to the pandemic. Fruit and vegetable costs jumped 2.3%, the highest since 2010. Gas prices went up 6.6% month-over-month, and 38% year-over-year. Housing prices increased 4.1% year-over-year. 

• The takeaway:  Price increases, strong consumer spending, pay raises, and supply chain issues have reportedly all contributed to inflation. But for most Americans, the inflation rate is outpacing pay bumps, making it hard to afford necessities, like groceries and gas. And experts say that last month’s numbers indicate that the U.S. hasn’t yet reached peak inflation. The most recent statistic also doesn’t include the increase in prices, specifically those of oil and gas, caused by Russia’s invasion of Ukraine. The Federal Reserve (the Fed) is hoping to stem inflation with its upcoming interest rate hike, but it could also make matters worse if it moves too quickly. 

US News

Oil and water. President Biden has banned imports of oil, gas, and coal from Russia as Russia continues to invade Ukraine. The decision last week came after a bipartisan group of U.S. Senators introduced legislation to fast track the banning of those imports. The House of Representatives and the Senate, meanwhile, passed a federal spending bill that included nearly $14 billion in aid for Ukraine last week. The United Kingdom also said it would phase out Russian oil imports by the end of the year. And the European Union pledged to reduce its reliance on Russian oil over the next few years. 

• The takeaway: Biden warned that the U.S. will likely see gas prices increase further due to the ban. The price of gas already reached $4.173 per gallon as a national average, which is roughly $.72 higher than it was a month earlier. The U.S. imports a relatively small percentage of its oil from Russia—7%—, while other countries, such as Italy, import a much greater portion of their oil from Russia. The U.S. could reportedly seek to cover the gap in Russian oil supply by working with Saudi Arabia, after pulling away from the country’s leader, the Crown Prince Mohammed bin Salman, a year ago. 

Reuters, New York Times

Elon wants his phone back. Tesla CEO Elon Musk asked a federal judge to throw out a previous settlement he reached with the Securities and Exchange Commission (SEC)  in 2018 over allegations of fraud. The SEC’s original complaint against Musk involved tweets suggesting he would take Tesla private at $420 per share, a large premium to its trading price at the time. As part of the settlement, Musk agreed to pay a $40 million fine, stepped down as Tesla chairman, and put in place a procedure to control his external communications. The settlement requires Musk to submit some of his tweets to the SEC for approval before sending them. Musk’s team has said that the policy is no longer sustainable, and that the SEC has overreached by asking for “round after round of demands for voluminous, costly document productions, with no signs of abatement.” 

• The takeaway: Musk’s choice to resurrect his old battles with the SEC comes after a recent SEC investigation into how Musk and his brother, Kimbal Musk, have traded their Tesla shares. In November 2021, Musk tweeted a poll to his followers asking them whether or not he should sell 10% of his holdings in Tesla. The following day he sold $5 billion worth of his stock in the company. The day before he tweeted the poll, Kimbal Musk sold $108 million worth of his shares. 

Wall Street Journal

Coupon for 20% off? Bed Bath & Beyond’s stock was the latest “meme stock” to see its value jump unexpectedly. Shares in Bed Bath & Beyond increased 34% last week when the chairman of GameStop, Ryan Cohen, announced he held a 10% stake in the retailer. Cohen wrote a letter to Bed Bath & Beyond’s board, suggesting multiple strategies, such as reducing the chief executive officer’s compensation, selling to a private equity firm, and spinning off BBB’s Buybuy Baby arm. 

• The takeaway: Cohen, who is also the founder of online pet supplies retailer Chewy, joined GameStop in January 2021, a move that reportedly contributed to the surge in share price as retail investors bought up shares in an attempt to cause a short squeeze. Bed Bath and Beyond has struggled in recent years, bringing on former Target executive Mark Tritton to take over as CEO in 2019. Tritton has closed hundreds of stores since taking over, but Cohen argued in his letter that Tritton’s “scattershot approach” is ineffective.

CNBC

 Here’s what we covered last week in the Scan: 

• President Biden gave his State of the Union address, discussing Ukraine, inflation, and Covid-19. 
• A cargo ship carrying vehicles from Germany to the U.S. sank in the mid-Atlantic.
• Credit reporting bureau Equifax will now record “pay-in-four” installment loans from Buy Now Pay Later (BNPL) services in credit reports.
• For the fourth quarter ending January 29, 2022, Target reported 9% sales growth.

The post The Weekly Scan March 14, 2022 appeared first on Stash Learn.

SOTU economics. President Biden’s annual State of the Union speech last week focused on key issues facing the U.S. and the world, including: 

• The war in Ukraine. Biden emphasized the importance of democracy against autocracy, while also emphasizing that the U.S. will not send troops in to defend Ukraine. The president also said that the U.S. would continue to work with the North Atlantic Treaty Organization (NATO) to support Ukraine. 
• Inflation at home. In an attempt to relate to viewers experiencing the effects of inflation, Biden cited the effects of inflation on his own family growing up. Biden also called upon American companies to manufacture more products at home, while hiring more U.S. workers. He also stressed the need to confirm his nominees for the Federal Reserve Board, which sets monetary policy, and spoke out against oil price gouging. 
• Covid-19 protocols. In contrast to last year’s speech, members of Congress didn’t wear masks, and neither did Vice President Kamala Harris or Speaker of the House Nancy Pelosi. Biden said he expects the country to move, “safely back to a normal routine,” including the return to work, and easing of mask mandates.
  • The takeaway: The president touched on these three points, as well as others, that could affect the economy. While Biden reportedly can’t do much to move inflation, he emphasized that recovery from the pandemic could ease inflation. Biden also discussed how the war between Russia and Ukraine could put further pressure on the economy. One such effect could be higher gas prices, which are already on the rise. Currently, the inflation rate is 7.5% for the year ending January 2022, as measured by the Consumer Price Index.

NPR, CNN

A sinking feeling. A cargo ship carrying vehicles from Germany to the U.S. sank in the mid-Atlantic last week, after being on fire for almost two weeks. The 200-meter long ship, called the Felicity Ace, sank 400 kilometers off the coast of Portugal’s Azores Islands while it was being towed. When the fire started the ship’s 22 crew members were airlifted to safety. While the origin of the fire has not yet been confirmed, there has been speculation that lithium batteries in electric vehicles are to blame. The Felicity Ace was carrying both regular cars and electric ones. The total number of vehicles on board the ship is unknown, but the craft can carry up to 4,000 cars. 

• The takeaway: The car brands onboard the Felicity Ace are also currently unknown. However, Porsche dealers in the U.S. were reportedly contacting customers regarding their orders. Another concern is how the sinking might pollute the ocean. The Felicity Ace was carrying 2,000 metric tons of oil and 2,000 metric tons of fuel. Portuguese authorities have said they will monitor the scene for pollution. The sinking comes almost a year after a cargo ship known as the Ever Given blocked traffic through the Suez Canal for roughly a week. It also comes amid record shortages of automobiles in the U.S., caused by supply chain interruptions and a scarcity of semiconductors.

ABC News

Keeping score. Credit reporting bureau Equifax will now record “pay-in-four” installment loans from Buy Now Pay Later (BNPL) services in credit reports. Equifax’s decision to include BNPL loans in consumer credit files is part of a move by the three big credit bureaus in the U.S.—Equifax, TransUnion, and Experian—to give lenders more transparency into a borrower’s debt history. Including BNPL payments may also help borrowers build credit history through new lending products. BNPL loans allow people to spread out purchases over a period of time, such as four bi-weekly payments, rather than all at once. Shoppers are reportedly drawn to using BNPL because of convenience, low or no-interest payments plans, and the uncertain credit implications.

• The takeaway: The decision to record BNPL transactions on credit reports could be a reaction to the increasing popularity of that payment option. BNPL transactions were reportedly on track to reach a total of $55 billion in 2021, and big retailers like Amazon, Sephora, and Priceline have started partnering with BNPL providers to offer payment plans at checkout. Credit reporting on BNPL can help or hurt your credit score. Failing to make your payments on time might not lead to fees and interest charges, but it could make your credit score fall. 

Wall Street Journal 

On Target. For the fourth quarter ending January 29, 2022, Target reported 9% sales growth, and said that it expects growth to continue. Adjusted earnings per share for the quarter were $3.19, versus the $2.86 per share that was expected. Revenue came slightly under the projected $31.39 billion at $31 billion. Net income grew 12% to $1.54 billion. Shares of Target increased 10% following the earnings report. 

• The Takeaway: Target, like many other big retailers, has benefited from the Covid-19 pandemic, as more people have spent money on consumer staples. The company’s annual revenue has surged 36% to $106 billion since the pandemic began in March, 2020. Consumers have less spending money coming in from stimulus, but Target said that they expect spending to continue. Target’s in-store and online traffic increased 8.1%, while the average transaction amount ticked up 1%. Target’s CEO Brian Cornell said that purchases are starting to reflect a changing attitude, with more customers spending on items like swimsuits and suitcases.  

CNBC

 Here’s what we covered last week in the Scan: 

• Markets tumbled as Russia invaded Ukraine, and Western and Asian nations enacted economic sanctions against Russia for its unprovoked attack. 
• Sanofi is seeking approval for a new Covid-19 vaccine that it says is 100% effective against severe Covid-19.
• Starbucks employees may be one step closer to unionizing, after the National Labor RelatIons Board (NLRB) ruled that workers at single stores may organize.
• The number of people who socked away $1 million or more in IRA and 401(k) retirement saving plans reached a record high in the fourth quarter of 2021.

The post The Weekly Scan March 7, 2022 appeared first on Stash Learn.

• As of October 2021, since the beginning of the pandemic, the economy has lost more than 4 million jobs, and women account for 57% of those losses. 

• While women gained 304,000 jobs in October 2021, they were still 2.4 million jobs behind where they were in February 2020, before the pandemic. 

• Almost 80 percent of people over the age of 20 who left the workforce in January 2021 were women. 

• While January’s unemployment rate was 6.3 percent overall, it was 8.5 percent for Black women over the age of 20.

“Unfortunately,” says Ruth Thomas, co-founder and senior consultant at the financing and loan outfit CURO based in San Carlos, California. “We are now starting to understand the gender impact of the pandemic and the economic fallout being dubbed the ‘Shecession.’” 

So what does this Shecession mean if you’re a woman with a job eyeing a pay raise during a pandemic? 

“They aren’t even thinking about asking for a raise, but they should,” says Sonya Sigler, an author, executive coach and consultant based in London, England. Sigler says she keeps encountering women who fear asking for a raise, because they’re afraid to rock the boat during this already-turbulent time. 

Addressing pay inequality

But Thomas notes this is a particularly good time to ask for a raise, and points to a study showing that 60 percent of companies are now making a concerted effort to address pay equality.  

Indeed, inequality is everywhere, from the top to the bottom. On the low end, if the federal minimum wage were increased to $15 per hour, the people who would benefit would be 59 percent women and only 41 percent men. This just shows that the lowest wage work still overwhelmingly belongs to women. And at the top, even the highest-paid women are still earning 82 cents to every man’s dollar. 

And we still see troubling numbers in STEM (Science Technology Engineering and Math) fields, where only a quarter of the workforce is women, and about half of women in STEM report experiencing gender discrimination.

Despite the relative dearth of women in the workforce and companies’ often lackluster efforts to address pay inequality, women who are still employed should feel emboldened to make their needs heard, according to Sigler.

Ask for what you want

“My advice to women is to ask for what you want – a raise, a promotion, a change in your schedule, or whatever else it is that you want. You can’t get what you don’t ask for,” Sigler says, adding that if you ask for and don’t get a raise, then ask for specific details on what criteria must be met to get that raise or promotion. 

“That gives you a game plan to meet and then to ask again,” Sigler says.

Working remotely may actually help

And make sure to ask for enough! A 2019 study showed that the majority of women ask for raises of $5,000 or below. About the same number of men and women ask for raises of $5K-$10K, but men were way more likely than women to ask for raises of $10K or more. 

Though the fallout from this pandemic will likely affect women in the workforce for years to come, Thomas notes one silver lining: the acceptance of flexible work situations. For the most part, gone are the days that working remotely or working odd hours made an employee seem underinvested. Now, it’s the norm. And Thomas says this tears down a major blocker for women’s career progression. 

At least that’s one thing to celebrate this Women’s History Month.

The post Asking for a Raise if You’re a Woman appeared first on Stash Learn.

War in Ukraine. Markets tumbled late last week as Russia invaded Ukraine, and Western and Asian nations enacted economic sanctions against Russia for its unprovoked attack. The sanctions include blocking technology exports, freezing financial assets, and preventing large state-owned Russian companies, such as natural gas concern Gazprom, from raising money in bond markets. The Nasdaq, Dow Jones Industrial Average, and S&P 500 have all touched upon correction territory in recent weeks.

• The takeaway: Russia is one of the largest producers of commodities needed worldwide, including oil, natural gas, and wheat. Ukraine is also a major exporter of wheat and corn. Prices for these commodities rose last week, with oil approaching $105 a gallon, and  wheat surging past 10-year highs. The escalation in prices comes as consumers are already feeling the pinch of inflation, which rose to 7.5% in January, a 40-year high. 

CNN, WSJ

New Covid-19 booster. Pharmaceutical company Sanofi is seeking approval for a new Covid-19 vaccine that it says is 100% effective against severe Covid-19 disease for people who have received previous Covid-19 vaccinations and boosters. The Paris-based pharmaceutical company claims its shot may increase virus antibodies up to 30 times. The vaccination, which requires two doses,  is based on more traditional protein-based technology and may be easier to store and transport than currently available mRNA vaccines, which require storage at low temperatures. Sanofi, which developed the vaccine in conjunction with London-based GlaxoSmithKline, received $2 billion from the U.S. federal government in 2020 for development.

• The takeaway: Covid illnesses, hospitalizations, and deaths globally have escalated in recent months, following the spread of Omicron, a highly contagious strain of the virus, which began circulating in November, 2021. Nearly 1 million people have died from Covid-19 in the U.S. and approximately six million people have died from the disease globally since the beginning of the pandemic.The new vaccine would add to an arsenal of shots provided by Moderna, Pfizer, and Johnson & Johnson. Meanwhile, Moderna recently said Covid-19 is entering a more predictable endemic phase and, like flu, could require annual vaccinations. 

Reuters

Start now

State of the union. Starbucks employees may be one step closer to unionizing, after the National Labor RelatIons Board (NLRB) ruled that workers at single stores may organize. Starbucks had previously argued before the board that workers must unionize in larger geographic areas and hold a single election, effectively making unionization more difficult, according to reports. The NLRB is an independent government agency that oversees issues of collective bargaining between employees and companies. 

• The takeaway: To attract workers and fend off threats of unionization last year, Starbucks announced it would increase its average hourly wage to approximately $17 by summer of 2022.  Workers at more than 100 Starbucks stores have filed for union elections, while workers at two stores Buffalo, New York have already unionized.

NYT

IRA all the way. The number of people who socked away $1 million or more in IRA and 401(k) retirement saving plans reached a record high in the fourth quarter of 2021. That’s according to new data from Fidelity, the largest provider of retirement plans in the U.S., which counted 376,100 IRA millionaires and 442,000 401(k) millionaires among its customers. That’s an increase of 30% and 32% respectively, compared to the same period a year ago. 

• The takeaway: Americans are sitting on record savings of $2.7 trillion since the pandemic began in 2020, thanks in part to various federal stimulus programs, such as the CARES Act and American Rescue Plan, that have resulted in billions of dollars of direct payments to U.S. consumers. However, just over half of consumers have access to workplace retirement plans, according to federal data, with just 35 percent of Black families and 26 percent of Hispanic families having access to such accounts, compared to 57 percent of White families.  

Washington Post

 Here’s what we covered last week in the Scan: 

• Remington Arms Co. reaches a $73 million settlement with families of the 2012 Sandy Hook Elementary School shooting. 
• Google announces new restrictions on tracking for Android devices, and upgrades to privacy.
• DoorDash beats revenue expectations as food delivery demand continues to surge.
• The U.S. pauses avocado imports from Mexico following threats to a food safety inspector, sparking fear of shortages.

The post The Weekly Scan February 28, 2022 appeared first on Stash Learn.

Remington’s settlement. Nine families of the people killed during the 2012 shooting at Sandy Hook Elementary School reached a $73 million settlement with Remington Arms Co., manufacturer of the gun used to kill 20 students and six staff members. Remington’s four insurers will reportedly pay those families the full amount of coverage available to the gun manufacturer. Remington previously filed for bankruptcy in 2020, selling off all of its assets. On December 14, 2012, 20-year-old Adam Lanza broke into Sandy Hook Elementary in Newton, Connecticut and used a semiautomatic rifle to kill his victims, before shooting himself. The Sandy Hook shooting was, at the time, the second-deadliest mass shooting in the United States. The families reportedly will no longer go to trial with Remington, and thousands of pages of Remington’s internal documents could now be made public, as result of the settlement. The suit, which was filed two years after the shooting, argued that Remington prioritized “profit over public safety,” by marketing and selling assault rifles to civilians. 

• The takeaway: The settlement marks the first damages award of this size against a gun manufacturer in regards to a U.S. mass shooting, according to Adam Skaggs, the chief counsel and policy director for the Giffords Law Center to Prevent Gun Violence. The lawyer representing the nine families, Josh Koskoff, said that he hopes the settlement will send a message to gun manufacturers, as well as the companies that insure them, that marketing their guns to civilians can lead to financial consequences.

NPR

Searching for privacy. Google announced that it’s rolling out new restrictions that will reduce tracking on Android devices, and increase privacy. The tech company will replace its advertising ID, a unique string of characters used to identify a person’s device. Ad tech companies often use those IDs to track and share information about a person, which they then use in targeted advertisements. Google will reportedly continue to use its current system for two years. Android is the operating system for Google mobile devices.

• The takeaway: Google’s decision follows a similar move by Apple in 2021 to increase user privacy by limiting tracking on Apple devices. In April 2021, Apple released a software update, allowing users to opt out of tracking on their iPhones, preventing advertisers from gleaning that data. The changes, called App Tracking Transparency, received backlash from tech companies like Facebook’s parent company Meta, Snap, and Peloton. Meta has said that it expects Apple’s changes to reduce its sales this year by $10 billion. On the flip side, Meta has praised the way Google is rolling out their privacy changes, saying that Google has been a collaborative partner in beefing up privacy.  

CNBC

Dashing to the top. Delivery service DoorDash reported revenue and order volume that beat its 2020 numbers. Revenue totaled $4.89 billion in 2021, 69% higher than revenue for 2020, when indoor dining was temporarily halted due to Covid-19 restrictions. For the three months ending in December 2021, DoorDash brought in $1.3 billion in revenue, a 34% increase from the same quarter of the previous year. DoorDash said that it expects its total value of orders to increase to $50 billion in 2022, from $42 billion in 2021. Despite its strong revenue numbers, DoorDash reported losses and earnings that fell short of analyst expectations. DoorDash’s losses reportedly increased to $468 million in 2021 from $461 million in 2020, due to the company’s expansion into Germany and Japan, and its acquisition of Finland-based start-up Wolt Enterprises. 

• The takeaway: DoorDash’s 2021 revenue numbers could be a sign that food delivery is still a growing industry, even as indoor dining has mostly returned. The Covid-19 pandemic reportedly gave the delivery industry a jumpstart, as consumers stayed home and ordered in. DoorDash took advantage of that trend, and started to deliver groceries, alcohol, and pet food, in addition to restaurant orders. DoorDash also partnered with retailers including Walmart and Macy’s to fulfill online orders for them. DoorDash is the largest food-delivery company by market share in the U.S., with revenue of nearly $5 billion for 2021.

Wall Street Journal

A rotten avocado situation. The U.S. has paused imports of avocados from Mexico after a food safety inspector in Mexico reportedly received a death threat. The U.S. has banned avocados from Michoacán, a coastal state west of Mexico City, starting February 11, 2022. Michoacan is the only state authorized to export avocados to the U.S. It is also reportedly subject to frequent cartel violence. Mexican President Andres Manuel Lopez Obrador criticized the decision, suggesting that certain parties hope to keep Mexican avocados out of the U.S. market to support political and economic interests. Mexico has historically supplied 80% of avocados in the U.S. market. 

• The takeaway: The price of avocados reached record levels in the U.S. in February 2022, at $26 a box. Demand for avocados has also steadily increased over the years, doubling to 9 pounds per-capita for the 10 years through 2020. The U.S. currently has 57 million tons of avocados, roughly a two-week supply, according to sources. Food prices in the U.S. have jumped 6.5% in January, due to record inflation and supply chain issues.

Bloomberg

 Here’s what we covered last week in the Scan: 

• Peloton announced that it would lay off 2,800 employees, and remove its CEO and founder John Foley in response to the company’s recent performance problems.
• The U.S. Department of Justice seized more than $3.6 billion in stolen cryptocurrency from a New York couple Ilya Lichtenstein and his wife Heather Morgan.
• Amazon announced last week that it will increase the cost of its yearly Prime membership by 17%, raising the price to $139 from $119.
• The Biden Administration will require states to submit plans to put electric vehicle chargers along highways to provide better support for the U.S. electric vehicle industry. 

The post The Weekly Scan February 21, 2022 appeared first on Stash Learn.

And just like that. Fitness equipment company Peloton announced last week that it would lay off 2,800 employees, and remove its CEO and founder John Foley in response to the company’s recent performance problems. Foley will become the company’s executive chairman, and will be replaced by former Spotify CEO Barry McCarthy. The president of Peloton, William Lynch, will also step down from his position. Foley founded Peloton in 2013, and is being removed in response to criticism from activist investor Blackwells Capital, which owns a 5% stake in Peloton. Plans to build a factory in Ohio have also been abandoned. Peloton’s restructuring is expected to reduce the company’s annual costs by $800 million. Blackwells is also pushing for the sale of the company.

• The takeaway: Peloton was an early winner during the pandemic, with people spending on at-home fitness bikes and treadmills in response to stay-at-home orders preventing people from going to the gym. But the tide has turned as people have returned to gyms, and Peloton has confronted a few different issues. In May 2021, Peloton recalled its Tread and Tread+ products after several children were injured, and one was killed, while the products were in use. And in December, Peloton’s reputation came under the microscope after a character on Sex and the City reboot died after using a Peloton bike. In recent weeks, Peloton’s share price has tanked in response to falling demand for products, which has caused Peloton to pause production of certain items. 

Bloomberg, Washington Post

Crypto crackdown. The U.S. Department of Justice seized more than $3.6 billion in stolen cryptocurrency from a New York couple Ilya Lichtenstein and his wife Heather Morgan, in the largest financial seizure in the department’s history. Liechtenstein and Morgan reportedly presented themselves as an entrepreneurial couple well-versed in technology and cryptocurrency. The couple reportedly laundered approximately 120,000 bitcoin, which has been stolen in a 2016 hack of the cryptocurrency exchange Bitfinex. A hacker had initiated more than 2,000 unauthorized transactions on the platform, and some of the funds from the hack went to accounts associated with Lichtenstein and Morgan. At the time of the hack, the amount of stolen bitcoin was valued at $70 million. The price of Bitcoin, however, has surged since the 2016 attack, resulting in the $3.6 billion seizure by the Justice Department. The total value of the stolen bitcoin is estimated at $4.6 billion, but not all of it has been recovered.

• The takeaway: The Justice Department cited the Bitcoin seizure as an example of the government’s crackdown on the use of cryptocurrency for criminal activity. Cryptocurrency has been used in a variety of different cyber attacks in recent years. In October 2021, the Justice Department created the National Cryptocurrency Enforcement Team to root out crime in cryptocurrency. The government was able to take back roughly $2.3 million worth of bitcoin that had been paid by Colonial Pipeline Company to a Russian ransomware gang after it attacked the pipeline, forcing it to shut down for several days.

Wall Street Journal

Prime time. Amazon announced last week that it will increase the cost of its yearly Prime membership by 17%, raising the price to $139 from $119. The monthly Prime membership price will jump to $14.99 from its current $12.99. Amazon last increased its annual membership cost to $119 from $99 in 2018. New Prime customers will pay the higher Prime price starting on February 18, 2022, while existing Prime customers will see prices increase on March 25. Amazon cited expanded Prime membership benefits, including more Prime Video content and expanded free same-day shipping, as one reason for higher prices. The company also said that higher labor costs contributed to the price hikes. Over the last two years, Amazon has doubled its workforce to 1.6 million people, and increased wages for thousands of workers. The company has 200 million Prime customers.

• The takeaway: Amazon reported that its profits doubled during the quarter ending December 2021 to $14.3 billion, higher than analyst forecasts. The large profit increase is reportedly due in part to Amazon’s accounting for its investment in electric vehicle company Rivian Automotive, which went public in November of last year. Amazon’s biggest source of profit, Amazon Web Services, saw a 49% jump in operating income to $5.3 billion. 

CNN

Charge it. The Biden Administration will require states to submit plans to put electric vehicle chargers along highways to provide better support for the U.S. electric vehicle industry. The requirement is part of a $1 trillion infrastructure bill passed by Congress in November 2021, which includes $5 billion over five years for the construction of these stations. All 50 states must submit their plans to install charging stations along or near major highways. Those stations need to be no more than 50 miles apart. The federal government will issue a final approval of plans by the end of September. The government plans to spend $615 million in a first wave, followed by another $2.5 billion in rural areas. 

• The takeaway: Electric vehicles are seen as an important way for the U.S. to reduce greenhouse gas emissions, and combat climate change. Electric vehicles have increased in popularity, making up 9% of total new car sales last year. But better infrastructure to charge electric vehicles is necessary to see greater adoption of electric cars, particularly in the U.S. The U.S. reportedly falls behind Europe when it comes to charging locations. The money allotted in the infrastructure bill reportedly won’t be enough to build the necessary charging network, but government officials reportedly hopei state plans will spur private companies to help with the build out.

Reuters, New York Times

 Here’s what we covered last week in the Scan: 

• The nation’s total debt reached a record $30 trillion in February. 
• AT&T announced February  that it plans to spin off its WarnerMedia unit and combine it with Discovery.
• Google parent company Alphabet announced that it will conduct a 20-for-1 stock split.
• Starbucks said last week that it plans to raise prices again, after hiking them in January, and in October 2021.

The post The Weekly Scan February 14, 2022 appeared first on Stash Learn.

Dirty thirty. The nation’s total debt reached a record $30 trillion in February. Increased federal spending to combat the economic fallout of the Covid-19 pandemic is thought to have contributed to reaching the milestone years earlier than anticipated. The U.S. has spent roughly $5 trillion to expand jobless benefits, support small businesses, and provide direct stimulus payments to people throughout the pandemic. In addition to record debt, the U.S. has seen the highest inflation rate since the 1980s, due in part to Federal Reserve monetary policy that has kept interest rates low. Higher inflation has led the Federal Reserve (the Fed) to reverse course, saying that it plans on raising interest rates several times in 2022. 

• The takeaway: The high level of debt isn’t necessarily a problem, because the economy continues to expand, interest rates are low, and people are still buying Treasury securities, say some analysts interviewed by the New York Times. Nevertheless, the country’s whopping debt has caused some friction among legislators, with Senator Joe Manchin (D-WV) citing the high debt as a reason he opposes President Biden’s $2 trillion safety net and climate bill. 

New York Times

WarnerMedia: the spin-off series. AT&T announced February  that it plans to spin off its  WarnerMedia unit and combine it with Discovery, cutting dividends to investors in half. The deal will give AT&T shareholders 0.24 shares in the new company, which will be called Warner Brothers Discovery. The company plans to reduce per-share dividends to approximately $1.11 from its current $2.08. The total cost of dividend payments for AT&T is expected to fall to $8 billion annually, from $15 billion in 2021. AT&T has historically offered one of the highest dividend yields, 8.52% as of February 1, 2022. Verizon, for example, had a 4.81% dividend yield on the same day. 

• The takeaway: In May 2021, AT&T announced it would merge its WarnerMedia unit with Discovery Inc. in a cash and debt deal reportedly worth $43 billion.The combined companies reportedly would have been bigger than either Netflix and NBCUniversal. WarnerMedia includes networks such as HBO, CNN, TNT, and TBS. AT&T initially acquired WarnerMedia in 2018 for $80 billion, saddling the company with massive debt. The company has reportedly struggled to maintain investor confidence following the deal, with AT&T’s value dropping by one-third since the merger. (The S&P 500, meanwhile, has doubled in value since then.) The arrangement will reportedly also help AT&T shed some of the debt it took on because of the acquisition. 

Wall Street Journal

Splitting up isn’t hard to do. Google parent company Alphabet announced that it will conduct a 20-for-1 stock split. The goal of a stock split is to lower the company’s stock price and make it more affordable for retail investors. In this case, Alphabet will turn each class A share into 20 shares. Based on February’s closing price, Alphabet’s price-per-share would fall to roughly $138 per share after the split, from $2,752.88 per share. Alphabet’s share price hasn’t been that low since 2005. 

• The takeaway: Another motivation for the split, in addition to affordability, could be the Alphabet’’s desire to join the Dow Jones Industrial Average (DJIA), according to Bloomberg.The Dow uses a weighted system, basing entry on share price rather than market capitalization, as other indexes do. And Alphabet’s share price has been too high for the Dow. Stock splits reportedly have become less popular with companies over the years. In 2019, only two companies conducted stock splits, compared to 47 companies in 2006 and 2007. In 2020, Apple and Tesla performed 4-for-1 and 5-for-1 stock splits, respectively.

Bloomberg

More bucks for Bucks. Starbucks said last week that it plans to raise prices again, after hiking them in January, and in October 2021. The coffee chain cited inflation and labor costs as reasons for the price increases. Prices for consumer goods have risen across the U.S., with the Consumer Price Index (CPI), a key indicator of inflation, increasing 7% in the fourth quarter of 2021, the biggest spike since 1981. Meanwhile, Starbucks has expanded wages for workers to attract employees amid a labor shortage. In October 2021, Starbucks said that it would start paying baristas at least $15 per hour, and most hourly workers an average of $17 by the summer. 

• The takeaway: So far, Starbucks hasn’t taken a hit for increasing customer costs. For the three months ending January 12, 2022, Stabucks sales surged 13% globally and 18% in North America at locations that had been open for at least 13 months. Earnings per share, however, fell short of predictions, at $0.69 per share. Other food chains, such as Little Caesars, Chipotle, and McDonald’s have also increased their prices recently. Costs at all U.S. restaurants ticked up 6% in 2021.  

CNN

 Here’s what we covered last week in the Scan: 

• The cost of employee wages and salaries increased at an annualized 4% rate in the fourth quarter of 2021. 
• Bitcoin, the world’s biggest cryptocurrency fell more than 12% on January 21, 2022, dropping below $36,000 to its lowest price since July 2021.
• For the first time ever, taxes generated from cannabis sales surpassed those generated by alcohol sales in Massachusetts.
• Neil Young sent a letter to Spotify last week demanding that it remove his library of music as long as it plans to keep content that spreads vaccine misinformation on the platform.
• In 2021, the number of unprovoked shark bites worldwide increased to 73, returning to levels seen before the Covid-19 pandemic.

The post The Weekly Scan February 7, 2022 appeared first on Stash Learn.

Labor pains. The cost of employee wages and salaries increased at an annualized 4% rate in the fourth quarter of 2021, reportedly the biggest increase in 20 years. The jump in labor costs follows a 3.7% increase in last year’s third quarter. The increases come at a time when the economy is combatting record inflation of near 7%, and has reportedly reached maximum employment capacity.

• The takeaway. The combination of higher prices and increased job openings has reportedly encouraged record numbers of workers to demand higher wages or switch jobs. Employers reported nearly 11 million job openings at the end of November, 2021, and unemployment is near 4%. Although the economy has recovered only 84% of jobs lost during the pandemic, the size of the labor force has reportedly grown smaller. 

U.S. News and Reuters

Cryptocoaster. Bitcoin, the world’s biggest cryptocurrency fell more than 12% on January 21, 2022, dropping below $36,000 to its lowest price since July 2021. The cryptocurrency’s price fell 45% from its previous high in November, when it reached nearly $70,000. Bitcoin on the whole lost $600 billion in value. Other cryptocurrencies, such as Ethereum and “meme” coins, also tumbled in recent weeks. The cryptocurrency market altogether lost more than $1 trillion, making this largest drop in dollars for both Bitcoin and the entire cryptocurrency market. Funds that contain cryptocurrency holdings also experienced volatility, with Coinbase and MicroStrategy both declining. 

• The takeaway: Cryptocurrencies, as well as stocks, were responding to the expectation that the Federal Reserve (the Fed) would reverse its pandemic policies by raising the federal funds rate, its benchmark interest rate. Last week, the Fed said it would raise interest rates in March 2022, two years after it first slashed rates to near-zero. The Fed lowered rates in order to stimulate the economy during the Covid-19 pandemic. However, concerns over how low rates have contributed to inflation, or the rate at which prices for goods and services increase over a period of time, have pushed the Fed to reverse course. Cryptocurrency is a relatively new concept and tends to be volatile, with prices moving up and down sharply. 

Bloomberg, The Street

Cannabis sales ablaze. For the first time ever, taxes generated from cannabis sales surpassed those generated by alcohol sales in Massachusetts. As of December 2021, excise taxes on marijuana for the first half of the fiscal year totaled $74.2 million, compared to excise taxes for alcohol, which totaled $51.3 million. For the entirety of 2021, excise taxes on marijuana sales came to $112 million, a figure 206% higher than anticipated. Retailers in the state of Massachusetts must pay a 10.75% excise tax on the projected price of recreational cannabis, a 6.25% sales tax, and a local tax of up to 3%. Massachusetts, which has legalized the purchase and recreational or medicinal use of marijuana, opened its first cannabis retailers in November 2018. 

• The takeaway: Alcohol sales have traditionally been a massive source of tax revenue for states. Excise taxes generated from alcohol have reportedly been relatively stagnant over the past five years in Massachusetts, with the state charging $0.55 per gallon of wine and $4.05 per gallon of hard alcohol. Illinois also collected $100 million more in taxes from marijuana than from alcohol during 2021. Massachusetts’ and Illinois’ success in taxing marijuana could be a good sign for the many other states that have legalized the recreational use of marijuana in recent years. In 2020 alone, Montana, New Jersey, Arizona, and South Dakota became the latest states to legalize marijuana for recreational use in those states via ballot measures.

Fortune

The needle and the damage done. Rock-and-roll artist Neil Young sent a letter to Spotify last week demanding that it remove his library of music as long as it plans to keep content that spreads vaccine misinformation on the platform. Young specifically called out Spotify’s relationship with podcaster Joe Rogan, whose show is Spotify’s most popular podcast. Spotify acquired Rogan’s podcast “The Joe Rogan Experience” for more $100 million in 2020. Rogan and his guests have frequently made false claims about Covid-19, including saying that the vaccine isn’t necessary for the young and healthy and that those who’ve had Covid-19 could face health risks by getting vaccinated. The podcaster has also promoted the use of anti-parasite drug ivermectin to treat Covid-19, which can actually cause health issues. Spotify sided with Rogan over Young, opting to remove Young’s songs. 

• The takeaway: The battle between Young and Spotify highlights the position that streaming and social media platforms play in the spread of misinformation, while also not censoring people. Daniel Ek, the company’s CEO, has previously discussed censorship on Spotify, saying: “We have a lot of really well-paid rappers on Spotify too, that make tens of millions of dollars, if not more, each year from Spotify. And we don’t dictate what they’re putting in their songs, either.” In defending the decision to keep Rogan’s podcast on Spotify, the company said it has detailed content policies in place and has removed over 20,000 podcast episodes related to Covid-19 since the start of the pandemic.

The New York Times

Jaws: Covid-19 edition. In 2021, the number of unprovoked shark bites worldwide increased to 73, returning to levels seen before the Covid-19 pandemic. The number of shark attacks fell to 52 in 2020, when beaches closed and people avoided traveling because of the pandemic. The five-year average for the number of shark attacks, however, remains at 71. Forty-seven of the shark attacks reported in 2021 occurred in the U.S., while the others were reported in Australia, New Zealand, Brazil, and South Africa. In the U.S., most attacks happened in Florida, where blacktip sharks tend to hunt in warm, shallow waters. Globally, most of the bites can be attributed to great white sharks, which have been growing in population in recent years. 

• The takeaway: The return to pre-pandemic shark attack numbers is reportedly another indication that the travel industry is recovering, after people spent most of 2020 inside to prevent the spread of Covid-19. The rollout of Covid-19 vaccines in 2021 has made it increasingly possible for people to travel and go to beaches. Demand for flights grew in 2021, as people traveled for summer vacations and holiday get-togethers more than they did in the previous year. 

Wall Street Journal

 Here’s what we covered last week in the Scan: 

• Microprocessor maker Intel said that it will invest $20 billion in the construction of two new semiconductor factories near Columbus, Ohio.
• Exercise equipment company Peloton will pause production of several of its most popular connected fitness products.
• As part of its effort to expand into the metaverse, Microsoft announced that it will acquire video game maker Activision Blizzard .
• “We Don’t Talk About Bruno,” a song from Encanto, became the first song from a Walt Disney Animation Studios movie to reach the top of Billboard Streaming Songs chart. 

The post The Weekly Scan January 31, 2022 appeared first on Stash Learn.

Chipping away. Microprocessor maker Intel said that it will invest $20 billion in the construction of two new semiconductor factories near Columbus, Ohio. Construction will begin at the end of 2022, and conclude in 2025. Intel also promised to invest $100 million in partnerships with educational institutions to support talent development in the area. The project is expected to create 3,000 factory jobs, 7,000 construction jobs, and tens of thousands of support jobs. The new factories will reportedly be part of Intel’s efforts to reclaim its reputation as a top chip manufacturer. In 2020, chipmaker Nvidia surpassed Intel as the most valuable semiconductor maker in the U.S. Also last year, Samsung beat out Intel as the biggest chipmaker by quarterly revenue. In 2021, Intel said it would invest in chipmaking in Arizona and New Mexico, and promised $95 billion towards those efforts in Europe. 

• The takeaway: Intel is one of many semiconductor manufacturers investing in increased  chip production, as the U.S. and Europe struggle with a chip shortage. Samsung said in 2021 that it would invest more than $205 billion over the next three years and Taiwan Semiconductor Manufacturing said it would put $100 billion into greater production capacity over the next three three years. Micron Technology said it would spend $150 billion over the next decade to develop its memory chips and Texas Instruments will spend $30 billion building a new facility in Sherman, Texas. Semiconductors are essential to many electronic products, and are found in many of today’s cars, as well as home appliances, computers, smart phones, and more. Since early 2021, chip makers have experienced shortfalls in manufacturing microprocessors used in those products.

NPR

Just spinning. In response to decreasing consumer demand, exercise equipment company Peloton will pause production of several of its most popular connected fitness products. From February to March 2022, Peloton will stop making its Bike. Peloton also will not produce the Tread for six weeks and the Tread+ for all of 2022. The company previously halted manufacturing its Bike+ in December 2021, and will not produce it again until June 2022.The decision is a big shift from the height of the pandemic, when Peloton faced high demand, and not enough supply, as more consumers worked from home and avoided public gathering spots including gyms. Peloton recorded its first-ever quarterly profit in September 2020, with a 172% increase in sales and 1 million people subscribing to its virtual fitness classes. In March 2020, Peloton acquired exercise equipment maker Precor for $420 million to keep up with the demand. 

• The takeaway: Lower demand for Peloton’s core products could prove that gyms and traditional fitness services are making a resurgence, and that at-home fitness might not outlive the pandemic. For the third and fourth quarter of 2021, Peloton reportedly set demand and delivery goals that were far too high, according to a company presentation, and Peloton issued new goals on December 14, 2021. For the quarter ended September 30, Peloton added 161,000 net new subscribers, the lowest growth the company had seen in two years.

CNBC

Game on. As part of its effort to expand into the metaverse, Microsoft announced last week that it will acquire video game maker Activision Blizzard for a record $68.7 billion in an all-cash deal. The deal, reportedly the largest acquisition ever by a technology company, needs to be approved by regulators, but it would make Microsoft the third-largest video game company in the U.S. The tech company has made several gaming acquisitions since Satya Nadella became CEO in 2014, including its $2.5 billion acquisition of Mojang and a $7.5 billion acquisition of ZeniMax Media. Microsoft, creator of the gaming console Xbox, has its own games, like Minecraft and Doom.  But this deal will allow Microsoft to add Activision Blizzard’s portfolio of games, including Call of Duty, World of Warcraft, and Candy Crush.

• The takeaway: Microsoft cited its interest in expansion into the metaverse as one of the reasons for the acquisition. The metaverse is a much-hyped concept that people will increasingly be able to do in-person activities like playing games, attending shows, and watching sporting events as three-dimensional virtual experiences. Big tech companies have started exploring the potential of the metaverse, with Facebook even changing its name to Meta Platforms in 2021. Shares of gaming rival Sony fell 13% in response to the news, reducing its valuation by $20 billion. Microsoft is pushing its subscription games service, Game Pass, which gives gamers access to its portfolio of games. Microsoft’s acquisition of more games could put pressure on Sony, which relies mostly on exclusive title and hardware sales. 

Bloomberg

Let’s talk about it. “We Don’t Talk About Bruno,” a song from the new Disney animated movie Encanto, became the first song from a Walt Disney Animation Studios movie to reach the top of Billboard Streaming Songs chart. Separately, the song was number four on Billboard’s Hot 100 last week, becoming the first song from a Disney animated movie in 26 years to reach a top spot on that chart. The music, whose lyrics were written by songwriter, singer, playwright, and producer Lin-Manuel Miranda, has Latin American influences. The last song to reach Billboard’s Hot 100  top four was “Colors of the Wind” from 1995’s “Pocahontas.” Billboard has compiled charts of top popular songs since the 1950s.

• The takeaway: Disney has recently made changes to address criticism that the company has included stereotypical or racist themes in movies and theme park rides. Encanto focuses on a Colombian character. Disney’s decision to make Encanto appears to be paying off, with the movie reportedly becoming one of the biggest animated movies of the pandemic, bringing in $93.1 million domestically and $222.6 million globally. 

Wall Street Journal

 Here’s what we covered last week in the Scan: 

• The Supreme Court overturned a Biden administration mandate for Covid-19 testing and vaccines for workers at large businesses.
• Bank of America announced that next month it will end its $35 non-sufficient funds (NSF) fee, and it will reduce its overdraft fee to $10 from $35 in May. 
• Starting January 15, 2022, U.S. health insurers are required to cover eight over-the-counter testing kids for Covid-19 per month.
• Navient, one of the largest student loan servicers in the U.S., will cancel the debt of 66,000 borrowers
• Poet, writer, and civil-rights activist Maya Angelou is the first Black woman to be featured on a U.S. quarter.

The post The Weekly Scan January 24, 2022 appeared first on Stash Learn.

Overruled. The Supreme Court overturned a Biden administration mandate for Covid-19 testing and vaccines for workers at large businesses. The court decided last week that the rule represented an overreach by the Occupational Safety and Health Administration (OSHA), the federal agency that administers the requirement and oversees the safety of workplaces nationwide. However, it allowed another administration requirement that healthcare employees working in facilities covered by Medicare and Medicaid, the federal healthcare programs, be vaccinated. That mandate falls under the U.S. Department of Health and Human Services, which the court said has a role in fighting the epidemic by ensuring the health and safety of patients.

• The takeaway: Approximately 80 million people work for companies with 100 or more employees and fall under the mandate blocked by the Supreme Court. More than 10 million healthcare workers are subject to the vaccination requirement that the high court let stand. Covid testing and vaccines have been the source of resistance nationwide since the beginning of the pandemic. For the week of January 12, there were a reported 782,000 new Covid cases in the U.S., an increase of 33% compared to the previous week. The highly contagious Omicron variant is reportedly fueling the increases, according to the Centers for Disease Control.

CNN and SCOTUSblog

Fee-lin’ good. Bank of America announced that next month it will end its $35 non-sufficient funds (NSF) fee, and it will reduce its overdraft fee to $10 from $35 in May. Wells Fargo followed suit, also announcing that it will stop charging its non-sufficient funds fee, and transfer fees for overdraft-protected accounts, by the end of the first quarter, 2022. The bank will also enact a 24-hour grace period for customers who overdraft their accounts. Other institutions, including PNC Bank, Capital One, Ally Bank, and JP Morgan Chase have said they will reduce or eliminate various fees, in an attempt to compete with financial technology companies that offer low- or no-fee banking opportunities. 

• The takeaway: Maintenance, low-funds, and overdraft fees are reportedly often called the “penalty for being poor,” and fintech companies have presented themselves as an alternative to big banks. Financial institutions are battling to retain customers, especially as checking balances have risen during the pandemic. The average checking account balance at the end of 2021 was $8,244, compared to $3,698 in 2019, and $3,754 in 2018. Good to know: A non-sufficient funds fee is charged when a customer lacks the funds in his or her account for a particular transaction, and that transaction is denied. An overdraft fee is also charged when a customer lacks the money to cover a transaction, but the bank covers the charge.

MarketWatch

Covering Covid. Starting January 15, 2022, U.S. health insurers are required to cover eight over-the-counter testing kids for Covid-19 per month, according to a deal between the Biden Administration and insurance providers. Additionally, there will be no limit to the number of Covid-19 tests that an insurer must provide if ordered by a healthcare provider. Last month, President Biden also said that his administration hopes to distribute 500 million at-home tests and set up federal testing sites. 

• The takeaway: The testing agreement comes as the latest variant of Covid-19 spreads, and demand for at-home tests increases. Average daily Covid-19 infections reached about 405,000 in the first week of January, approximately 60% higher than the previous U.S. peak in January 2021, according to reports. Meanwhile, a national shortage of Covid-19 tests has sent the price of at-home tests through the roof. In some cases, the price of a single at-home test sold online has tripled, with the popular BinaxNOW test reportedly selling for $75 from some secondary retailers. 

Reuters

Student aid. Navient, one of the largest student loan servicers in the U.S., will cancel the debt of 66,000 borrowers, totaling $1.7 billion. The action follows a $1.85 billion settlement with 39 states over Navient’s alleged predatory private educational loans. Navient, formerly part of Sallie Mae, will also have to pay $95 million in restitution, including $260 payments to 350,000 people who were placed in particular forbearance programs. Pending judicial approval, the servicer will also pay the states participating in the lawsuit $145 million. Navient reportedly engaged in deceptive and abusive practices and targeted students who would struggle to repay their loans. For the most part, those whose debt will be canceled attended for-profit institutions such ITT Institute and Corinthian Colleges. 

• The takeaway: Student debt forgiveness and predatory student lending practices have increasingly come under fire. Federal student loan payments have been paused since March 2020 due to the pandemic, and the Biden administration is reportedly exploring options for widespread student loan forgiveness. In 2021, the administration also ushered in several student forgiveness updates, including $500 million in student loan forgiveness for former students of ITT Technical Institute, a private chain of colleges that was shut down in 2016 for misrepresentation. 

New York Times

Phenomenal Woman. Poet, writer, and civil-rights activist Maya Angelou is the first Black woman to be featured on a U.S. quarter. The U.S. Mint began shipping out quarters, with an engraved portrait, in early January. They show Angelou on the back of the coin with her arms uplifted, and with a rising sun and flying bird behind her. The images are a reflection of Angelou’s poetry, according to the Mint. Angelou, who died in 2014, wrote about subjects like sexism, racial identity, and rape in her famous writings such as “I Know Why the Caged Bird Sings.”

• The takeaway: The quarter is part of a larger initiative called the American Women Quarters Program. The program will ship out five quarters featuring various honorees between 2022 and 2025. The Mint will also issue quarters with the first woman astronaut Dr. Sally Ride, the first woman to be principal chief of the Cherokee Nation Wilma Mankiller, the first Chinese American woman to be a movie star Anna May Wong, and a New Mexico suffrage movement leader Nina Otero-Warren. Additionally, last year, the Biden Administration said that it would renew efforts to get Harriet Tubman, a slave-turned-aboiltionist, on the $20 bill. 

Wall Street Journal

 Here’s what we covered last week in the Scan: 

• A record 4.5 million people quit their jobs in November 2021.
• Toyota ousted General Motors (GM) as the highest-selling car manufacturer in the U.S.
• A national shortage of Covid-19 tests has sent the price of at-home tests through the roof.
• Taco Bell will launch a taco-per-day subscription service called the Taco Lover’s Pass.

The post The Weekly Scan January 17, 2022 appeared first on Stash Learn.

Keepin’ up with the quits. A record 4.5 million people quit their jobs in November 2021, according to the latest data from the U.S. Department of Labor. The total quits rate jumped to  3%, an uptick from 2.8% in October. Meanwhile, there were an estimated 12 million job openings at the end of December, up from 10.6 million in November. 

• The takeaway: Employers have cited higher wages, more flexibility, better opportunities, burnout, and stress as reasons why workers have left jobs. In the healthcare industry, which has been battered by Covid-19, the quits rate reached a record high of 3%. In addition to record quits and job openings, the labor participation rate, which measures how many eligible workers are employed or seeking employment, remains below pandemic levels. November’s labor participation rate was 61.8%, compared to 63.4% in January 2020. 

Wall Street Journal

Welcome to the fast lane. Japanese car manufacturer Toyota ousted General Motors (GM) as the highest-selling car manufacturer by annual sales in the U.S. in 2021, for the first time ever. Toyota sold about 114,00 more cars than GM in the U.S., with its total sales reaching 2.3 million, a 10% increase from the previous year. GM’s sales, meanwhile, decreased 13% to 2.2 million cars. GM has been the industry leader in U.S. car sales since 1931. Toyota reportedly benefited from stockpiling semiconductors ahead of a global microchip shortage. Other automakers—including Tesla, Hyundai, Honda, and Mazda—also experience above-average sales.

• The takeaway: The semiconductor shortage, as well as general supply-chain disruptions, has hurt the auto industry, which was already suffering from lower sales due to the Covid-19 pandemic. Semiconductors are required for the manufacturing of many of today’s cars, as well as home appliances, technological devices, and more. Since early 2021, chip makers have experienced shortfalls in manufacturing  microprocessors used in those products. While total car sales increased slightly in 2021 year-over-year to roughly 15 million cars, sales are still far below the pre-pandemic level of 17 million vehicles. 

Fortune and Wall Street Journal

Testing 123. As the Omicron variant surges in the U.S., a national shortage of Covid-19 tests has sent the price of at-home tests through the roof. In some cases, the price of a single at-home test sold online has tripled, with the popular BinaxNOW test reportedly selling for $75 from some secondary retailers. The average price for a two-pack test typically ranges between $15 and $25. Popular retailers including Kroger and Walmart have also increased the price of at-home tests in recent days, following the end of a deal with the federal government to sell the kits at a discount.

• The takeaway. President Biden is reportedly in the final stages of sending 500 million rapid tests free of charge, directly to households via a federal website. Average daily Covid-19 infections reached about 405,000 in the first week of January, approximately 60% higher than the previous U.S. peak in January 2021, according to reports. There are three tests currently available for Covid-19. The most accurate is something called a polymerase chain reaction (PCR) test, which is typically administered in a doctor’s office. Another test, called an antigen test, looks for antibodies to the virus in the blood, and must also be administered in a medical setting. Rapid tests, which are considered less accurate than PCR tests, rely on a nasal swab.

Bloomberg and Washington Post

Live mas every day. Fast food chain Taco Bell said it will launch a taco-per-day subscription service called the Taco Lover’s Pass, which will allow people to get one taco each day for 30 days for roughly $10 per month. Customers reportedly will be able to get one crunchy taco, soft taco, spicy potato soft taco, Doritos Locos taco, or the supreme version of any of those with the subscription. In a test of the program, Taco Bell found that 20% of subscribers were new to Taco Bell’s existing rewards program, and 20% renewed the subscription a second time. 

• The takeaway: The subscription program is an attempt by Taco Bell, a subsidiary of Yum Brands, to recover from pandemic-induced losses. The company is reportedly hoping that the program will encourage customers to visit more, and purchase additional items. In its most recently reported quarter, Yum Brands said U.S. same-store sales fell 5% below expectations. Other restaurant chains, including bakery and sandwich chain Panera and salad purveyor Sweetgreen, have also experimented with their own subscription services in recent months.

CNBC and CNN

 Here’s what we covered last week in the Scan: 

• The fast-spreading Omicron variant of Covid-19 has thrown a wrench in the U.S. economic recovery.
• Payments for the advanced child tax credit, which provided nearly 30 million qualifying families with hundreds of dollars in monthly federal payments, ended.
• Transportation Secretary Pete Buttigieg and Federal Aviation Administration (FAA) lead Steve Dickson have reportedly asked AT&T and Verizon to delay their launch of 5G.
• Amid surging prices for food nationwide, the Supreme Court will consider a petition from the National Pork Producers Council and the American Farm Bureau Federation over a California law.

The post The Weekly Scan January 10, 2022 appeared first on Stash Learn.