Personal Finance News

The stock market closed out an up-and-down week with another very clear separation of the haves and have-lesses.

Big Tech ruled the day thanks to a trio of mega-cap earnings pops. Apple (AAPL, +10.5%) shot to new all-time highs after its Thursday evening report, where it said quarterly sales jumped 11% year-over-year and announced a 4-for-1 stock split effective in August. It did say, however, that it thinks iPhone supply will be delayed a few weeks this fall.

Amazon.com (AMZN, +3.7%) crushed revenue and profit expectations alike, and its grocery sales tripled year-over-year. Several analysts responded by revising their price targets higher, including Canaccord Genuity's Maria Ripps and Michael Graham. The pair see AMZN shares hitting $3,800 over the next 12 months, up from $3,300 previously.

"With consumer shopping behavior shifting online at an accelerating pace, structural competitive advantages around fulfillment and scale, and a reasonable ~2x multiple on eCommerce GMV driving most of our valuation, we still find AMZN stock very compelling and think much of this strength will persist beyond the current pandemic," they write.

Facebook (FB, +8.2%), meanwhile, reported Q2 revenues that improved by double digits. Also, active user figures grew more than expected, and average revenue per user was better than the Street forecast.

Other areas of the market didn't look so strong. Chevron (CVX, -2.7%) and Exxon Mobil (XOM, +0.5%) both reported quarterly losses, and the Dow finished with a muted 0.4% gain to 26,428 after being in the red much of the day. The S&P 500 was a little better at +0.8% to 3,271, and the small-cap Russell 2000 dropped by 1% to 1,480.

But the tech-laden Nasdaq cruised 1.5% higher to 10,745, where it's flirting yet again with new all-time highs.

"The stock market isn't the economy," you've likely heard in recent months. It's certainly true, but the market is indeed starting to show signs of more accurately reflecting what's going on in the economy, as tech companies positively impacted by COVID-19 continue to climb higher while more economically sensitive stocks sag.

Read more: https://www.kiplinger.com/investing/stocks/601158/stock-market-today-073120-big-tech-aapl-amzn-fb

Short selling gets a bad rap. Short sellers are sometimes seen as vultures, gleefully making money during the darkest times for some companies. And when times get tough, they are often smeared as manipulators of the market.

However, short selling has a long history, and academic research proves these tactics are an important part of price discovery for markets.

So what is short selling? Put simply, it's borrowing shares of a stock or ETF so you can sell them first, then hoping it declines so you can buy shares back at a lower price in the future, thus generating a profit. And rather than moralizing over the nature of it, wise investors should view short selling as one more data point to explore in their research, and view heavily shorted stocks as particularly interesting.

By comparing the raw number of shares sold short with the overall number of shares a company has available to trade, investors can get a quick take on what percentage of the current interest in the stock is coming from bearish investors vs. bullish ones.

It's worth pointing out that like any measure, short interest in a stock is not a foolproof sign it will stumble. There is ample evidence that bearish investors can be wrong. And unlike buy-and-hold investors who can just sit on a paper loss and hope conditions change, short-selling bears who booked the sale first must buy shares back for steep losses and cover their risky trade whether they like it or not. This can lead to a phenomenon known as a "short squeeze," in which buying begets more buying as more short sellers are forced to bail out of their positions.

Here are 18 of the most heavily shorted stocks on Wall Street right now. For each of these companies, total short interest by negative investors represents at least a third of the "float," or shares available for regular trading on public markets. But in many cases, it's far more.

Read more: https://www.kiplinger.com/investing/stocks/601156/most-heavily-shorted-stocks-bears

Some days it feels like there is simply too much news. That clearly was the case on what was a very mixed Thursday for stocks as investors were bombarded with economic and political headlines alike.

The stop-and-watch headline was the Commerce Department's announcement that America's GDP declined 32.9% on an annualized basis during the second quarter – the worst such drop in U.S. history.

"The outcome was broadly in line with our official forecast (-35.0%) and our Q2 GDP tracking estimate (-34.0%)," write Barclays analysts. "As we had noted during the Q1 GDP release, the downturn in activity at the time was just the tip of the iceberg. With the pandemic intensifying in April, prompting the stay-at-home orders, closure of nonessential businesses and a rise in unemployment, a more severe disruption to activity and employment in Q2 was widely expected.

"With the Q2 GDP report broadly in line with our expectations, our outlook for growth in Q3 remains unchanged. We expect growth to rebound in the third quarter (at a 25% quarter-over-quarter seasonally adjusted annual rate), led by an increase in personal consumption spending."

More surprising was that jobless-benefits claims rose last week, to 1.43 million from 1.42 million the week before – a number that itself was revised higher. That weighed on West Texas Intermediate oil prices, which dipped below the $40-per-barrel mark for the first time in weeks. That in turn slammed oil giants Exxon Mobil (XOM, -4.7%) and Chevron (CVX, -4.1%).

President Donald Trump's tweet floating the idea of delaying Nov. 3 presidential elections, a power held only by Congress, threw stocks for a quick loop, too. Meanwhile, Congress remained at a standstill on a second economic package, even as a $600-per-week enhancement of federal unemployment insurance is set to expire Friday, putting millions of Americans at financial risk.

The Dow Jones Industrial Average closed with a 0.9% decline to 26,313, the S&P 500 dropped 0.4% to 3,246, and the small-cap Russell 2000 fell 0.4%, too, to 1,495. The tech-heavy Nasdaq Composite, howe

Read more: https://www.kiplinger.com/investing/stocks/601154/stock-market-today-073020-stocks-grind-news

Once upon a time, the biggest hurdle for beginner investors who wanted to build a diversified portfolio was saving up enough to buy that first investment. Funds typically involved large minimum purchases, some of which was eaten up by onerous sales charges.

Today, that hurdle has been flattened. Exchange-traded funds (ETFs) can now be purchased for the price of just one share, and many mutual funds now have low (and even no) minimum investments. Better still, annual expenses are edging lower every day.

The biggest hurdle nowadays for beginners is deciding which mutual funds and ETFs they should invest in. We can help with that.

Today we're going to look at a short list of the best funds for beginner investors. But understand that the idea of this list isn't to go out and invest equally across all of these funds. Instead, consider it an abbreviated menu from which you might choose one or two or three options to start your portfolio.

You'll notice these top beginner funds lean almost exclusively toward stocks. That's because bonds are often too defensive and low-growth in nature for younger beginners, who have time to ride through the stock market's ups and downs. Just remember that when you invest in stocks, volatility is natural. Your investments will go down some days, but historically, the stock market has gone up over the long term, and that should continue to be the case going forward.

Here, then, are seven of the best funds for beginners.

Read more: https://www.kiplinger.com/investing/mutual-funds/601151/best-funds-for-beginners

There's a new stimulus check proposal on the table. This one is coming from four Republican senators: Sens. Cassidy (La.), Daines (Mont.), Romney (Utah), and Rubio (Fla.). They want the next stimulus check payments to focus on families, because other federal relief measures, such as enhanced unemployment benefits, are not adjusted for family size. So, their plan is to send a $1,000 stimulus payment to all American citizens equally, regardless of age or dependent status. That means money will be available for families with adult dependents, including those with disabilities or college students.

Like the first-round payments under the CARES Act, the proposed second-round stimulus checks would be reduced for people with a higher income. If you're single, married but filing a separate tax return, or a qualifying widow(er), the phase-out would kick in if your adjusted gross income (AGI) is above $75,000. If you're a head-of-household filer, the AGI threshold would be $112,500. If you're married filing a joint tax return, it would be $150,000.

The senators' stimulus check proposal is structured like the CARES Act plan in other ways, too. For instance, nonresident aliens would not get a check. Anyone who could be claimed as a dependent on someone else's tax return would not get one, either (although the person who claims them as a dependent would get an extra $1,000). You would also have to have a Social Security number to receive a payment.

To illustrate the focus on families, the senators note that a mom and dad with two dependent children would get $4,000 under their plan (assuming there was no phase-out). Under the CARES Act, that same family only got $3,400. A single parent with two children would get $3,000 under the senators' plan, while that family only got $2,200 under the CARES Act. And so on, and so on.

Read more: https://www.kiplinger.com/taxes/601153/new-family-focused-stimulus-check-plan-introduced-by-four-republican-senators

These days, the prospect of buying a vacation home could hardly be more alluring. Mortgage rates are at historic lows. During a pandemic, escaping to a less-crowded area is just what the doctor ordered. Plus, to minimize the spread of COVID-19, many employees are working remotely well into the fall, giving them the freedom to virtually check in to the office from just about anywhere.

But getting the house of your dreams may be a challenge. In many popular areas, move-in ready homes are flying off the market, receiving multiple bids from buyers. Especially if employers extend work-from-home policies and students kick off the school year with remote learning, bustling activity in the vacation-home market may continue beyond the peak summer season.  

Here, we’ve highlighted five vacation areas around the country to suit every taste, featuring seaside towns with craggy coastlines and sandy beaches, mountain getaways for hikers, skiers and snowboarders, and lake retreats for boating and fishing enthusiasts. You have a shot of snagging a great home at an affordable price at these locations, based on inventory and price data from Realtor.com. As of June, homes listed for sale in each county represented had a median price of no more than $400,000—and in some cases, median prices were significantly lower.

Read more: https://www.kiplinger.com/real-estate/buying-a-home/601122/5-great-places-to-buy-a-retirement-home

Whether your kids will be learning from home or in the classroom this fall, you'll have to do some back-to-school shopping to prepare for the new school year. And, as every parent knows, the bill for new clothes, shoes, backpacks, and other schools supplies can get very high, very quickly.

Thankfully, some states cut you a break on back-to-school shopping by holding a sales tax holiday before school starts. As the name suggests, if you purchase qualifying items during one of these holidays, the store won't tack on sales tax at the register. Most of these back-to-school sales tax holidays are in August and run through the weekend (often starting on Friday). But the dates, duration, and qualifying items vary widely from state to state. So, if you live in (or near) a state with one of these "tax-free weekends," make sure you familiarize yourself with the timing and scope of the available sales tax exemption before you head out for your back-to-school shopping.

To get you up to speed, we've listed the 16 states with a tax-free weekend for back-to-school shopping in 2020. We also provide an overview of the sales tax exemption and provide links to additional information (unless otherwise noted, the exemptions cover both state and local sales taxes). If you're interested in other 2020 sales tax holidays, see Sales Tax Holidays in 2020.

Read more: https://www.kiplinger.com/taxes/state-tax/601132/tax-free-weekend-dates-states-and-savings-for-back-to-school-shopping