‘The high for equities is not in,’ says technical strategist who unpacks the stocks to buy now.

Siegel argues that bonds, which have been giving stocks the shove, have proven to be a terrible inflation hedge, but investors have forgotten that given it’s 40 years since the last big price shock. “Stocks are excellent long-term hedges, stocks do beautifully against inflation, bonds do not,” he told CNBC on Tuesday.

Don’t miss: ‘Bond math’ shows traders bold enough to bet on Treasurys could reap dazzling returns with little risk

Other stock cheerleaders out there are counting on a fourth-quarter rally, which, according to LPL Financial, delivers on average a 4.2% gain as portfolio managers snap up stock winners to spiff up performances.

Our call of the day from Evercore ISI’s head of technical strategy, Rich Ross, is in the bull camp as he declares the “high for equities is not in,” and suggests some stocks that will set investors up nicely for that.

Ross notes November is the best month for the S&P 500
SPX,
Russell 2000
RUT
and semiconductors
SOX,
while the November to January period has seen a 6% gain on average for the Nasdaq Composite
COMP.
He says if the S&P can break out above 4,430, the next stop will be 4,630 within 2023, putting him at the bullish end of Wall Street forecasts.

In addition, even with 10-year Treasury yields back at their highs, the S&P 500 is still ahead this week and that’s a “great start” to any rally, he adds.

Evercore/Bloomberg

What else? He says “panic bottoms” seen in bond proxies, such as utilities via the Utilities Select Sector SPD exchange-traded fund ETF
XLU,
real-estate investment trusts and staples, are “consistent with a bottom in bond prices,” which is closer than it appears if those proxies have indeed bottomed.


Evercore/Bloomberg

Among the other green shoots, Ross sees banks bottoming following Bank of America
BAC,
+1.14%

earnings “just as they did in March of ’20 after a similar 52% decline which culminated in a year-end rally which commenced in Q4.”

He sees expanding breadth for stocks — more stocks rising than falling — adding that that’s a buy signal for the Russell 2000, retail via the SPDR S&P Retail ETF
XRT
and regional banks via the SPDR S&P Regional Banking
KRE.

The technical strategist also says it’s time to buy transports
DJT,
with airlines “at bear market lows and deeply oversold,” while railroads are also bottoming and truckers continue to rise.

As for tech, he’s a buyer of semiconductors noting they tend to gain 7% on average in November, and Nvidia
NVDA,
-2.88%

has been under pressure as of late. He also likes software such as Microsoft
MSFT,
+0.82%
,
Zscaler
ZS,
+0.66%
,
MongoDB
MDB,
+0.90%
,
Intuit
INTU,
-1.43%
,
Oracle
ORCL,
-0.05%
,
Adobe
ADBE,
+0.93%
,
CrowdStrike
CRWD,
+0.55%

and Palo Alto Networks
PANW,
+1.38%
.


Evercore/Bloomberg

“The strong tech will stay strong and the weak will get strong,” says Ross.

The markets

Stocks
SPX

COMP
are dropping, with bond yields
BX:TMUBMUSD10Y

BX:TMUBMUSD02Y
mixed. Oil prices
CL.1,
+1.82%

BRN00,
+1.69%

have pared a stronger rally after a deadly hospital explosion in Gaza City, with Iran reportedly calling for an oil embargo against Israel. Gold
GC00,
+1.84%

has shot up $35.

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

The buzz

Morgan Stanley
MS,
-6.02%

posted a 10% earnings fall, but beat forecasts, with shares down. Abbott Labs
ABT,
+3.12%

is up after upbeat results and aguidance hike and Procter & Gamble
PG,
+2.91%

is up after an earnings beat. Tesla
TSLA,
-0.89%

(preview here) and Netflix
NFLX,
-1.20%

(preview here) will report after the close.

Read: Ford CEO says Tesla, rival automakers loving the strike. He may be wrong

United Airlines shares
UAL,
-7.83%

are down 5% after the airline lowered guidance due to the Israel/Gaza war. Spirit AeroSystems
SPR,
+22.60%

surged 75% after the aircraft components maker announced a production support deal with Boeing
BA,
+0.88%
.

Housing starts came short of expectations, with the Fed’s Beige Book of economic conditions coming at 2 p.m. Also, Fed Gov. Chris Waller will speak at noon, followed by New York Fed Pres. John Williams at 12:30 p.m. and Fed Gov. Lisa Cook at 6:55 p.m.

China’s third-quarter GDP rose 4.9%, slowing from 6.3% in the previous quarter, but beating expectations.

Middle East tensions are ratcheting up with protests spreading across the region after a massive deadly blast at a Gaza City hospital, and airports evacuated across France over terror threats. President Biden told Israeli Prime Minister Benjamin Netanyahu that “it appears as though it was done by the other team.”

Read: Treasury says Hamas leaders ‘live in luxury’ as it unveils new sanctions

Best of the web

Bridgewater says the market has entered the second stage of tightening

Why the FDA needs to halt Cassava Sciences’ Alzheimer’s clinical trials

Hail, heat, rot in Italy push France to top global winemaking spot

Attacks across Europe put Islamist extremism back in spotlight

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

Ticker

Security name

TSLA,
-0.89%
Tesla

AMC,
-0.73%
AMC Entertainment

AAPL,
-0.39%
Apple

GME,
-1.20%
GameStop

NIO,
-2.99%
Nio

AMZN,
-1.10%
Amazon

PLTR,
-0.59%
Palantir

MULN,
-0.06%
Mullen Automotive

TPST,
-11.20%
Tempest Therapeutics

TTOO,
-8.20%
T2 Biosystems

Random reads

Loudest purr in the world. Congrats Bella the cat.

Asteroid sample offers window to ancient solar system

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Bank of America execs blew $93.6 billion. Here’s how they did it.

In several notes to clients this month, Odeon Capital Group analyst Dick Bove has pointed out that Bank of America’s big spending on stock buybacks over the past five years has been a waste for its shareholders, with the bank’s stock price declining slightly during that period.

The idea behind repurchasing shares on the open market is that they reduce a company’s share count and therefore boost earnings per share and support higher share prices over time. This doesn’t seem to be a bad idea, especially for a company such as Apple Inc.
AAPL,
+1.01%
,
which has generated excess capital and has appeared to be firing on all cylinders for a long time. For a company that is continuing to expand its product and service offerings while maintaining high profitability, buybacks can be a blessing to shareholders.

But for banks, for which capital is the main ingredient of earnings power, a more careful approach might be in order. The data below show how buybacks haven’t helped the largest banks outperform the broad stock market over the past five years. And now, banks face the prospect of regulators raising their capital requirements by 20%, according to a Wall Street Journal report.

Before showing data for the 20 companies among the S&P 500 that have spent the most money on buybacks over the past five years, let’s take a look at how share repurchases are described in a misleading way by corporate executives — and by many analysts, for that matter. During Bank of America’s
BAC,
-0.79%

first-quarter earnings call on April 18, Chief Financial Officer Alastair Borthwick said the bank had “returned $12 billion in capital to shareholders” over the previous 12 months, according to a transcript provided by FactSet.

Borthwick was referring to buybacks and dividends combined. Neither item was a return of capital. In fact, Bove summed up the buybacks elegantly in a client note on June 9: “The money that the company uses to buy back the stock is simply given away to people who do not want to own the bank’s stock.”

It is also worth pointing out that the term “return of capital” actually means the return of investors’ own capital to them, which is commonly done by closed-end mutual funds, business-development companies and some real-estate investment trusts, for various reasons. Those distributions aren’t taxed and they lower an investor’s cost basis.

Dividends aren’t a return of capital, either, if they are sourced from a company’s earnings, as they have been for Bank of America.

One more thing for investors to think about is that large companies typically award newly issued shares to executives as part of their compensation. This dilutes the ownership stakes of nonexecutive shareholders. So some of the buybacks merely mitigate this dilution. An investor hopes to see the buybacks lower the share count, but there are some instances in which the count still increases.

How buybacks can hurt banks

Banks’ management teams and boards of directors have engaged in buybacks because they wish to boost earnings per share and returns on equity by shedding excess capital. But Bove made another industry-specific point in his June 9 note: “If the bank buys back stock it must sell assets that offer a return to do so; it lowers current earnings.” Buybacks can also hurt future earnings. Less capital can slow expansion, loan growth and profits.

According to Bove, Bank of America CEO Brian Moynihan, who took the top slot in 2010 and saw the bank through the difficult aftermath of its acquisition of Countrywide and Merrill Lynch in 2008, “is one of the brightest, most capable executives for operating a banking enterprise.”

But he questions Moynihan’s ability to manage the bank’s balance sheet. Bove expects that Bank of America will need to issue new common shares, in part because rising interest rates have reduced the value of its bond investments.

In a June 5 note, Bove wrote: “Mr. Moynihan indicated twice [during a recent presentation] that the bank has excess cash that apparently could not be invested profitably. Possibly he is unaware that the cost of deposits at the bank in [the first quarter of] 2023 was 1.38% while the yield in the Fed Funds market can be as high as 5.25%.” In other words, the bank could earn a high spread at little risk with overnight deposits with the Federal Reserve.

That is a very simple example, but if Bank of America had grown its loan book more quickly over recent years while focusing less on buybacks, it might not face the prospect of a near-term capital raise, which would dilute current shareholders’ stakes in the company and reduce earnings per share.

Top 20 companies by dollars spent on buybacks

To look beyond banking, we sorted companies in the S&P 500
SPX,
+0.51%

by total dollars spent on buybacks over the past five years (the past 40 reported fiscal quarters) through June 9, using data suppled by FactSet. It turns out 11 have seen prices increase more quickly than the index. With reinvested dividends, 12 have outperformed the index.

Company

Ticker

Dollars spent on buybacks over the past 5 years ($Bil)

5-year price change

5-year total return with dividends reinvested

Apple Inc.

AAPL,
+1.01%
$393.6

279%

297%

Alphabet Inc. Class A

GOOGL,
+0.84%
$180.6

116%

116%

Microsoft Corporation

MSFT,
+0.87%
$121.5

221%

239%

Meta Platforms Inc.

META,
+1.58%
$103.4

42%

42%

Oracle Corp.

ORCL,
+6.11%
$102.6

140%

161%

Bank of America Corp.

BAC,
-0.79%
$93.6

-2%

10%

JPMorgan Chase & Co.

JPM,
-0.18%
$87.3

27%

47%

Wells Fargo & Co.

WFC,
-1.01%
$84.0

-24%

-13%

Berkshire Hathaway Inc. Class B

BRK.B,
-0.80%
$70.3

70%

70%

Citigroup Inc.

C,
+0.09%
$51.4

-29%

-16%

Charter Communications Inc. Class A

CHTR,
+1.09%
$48.5

20%

20%

Cisco Systems Inc.

CSCO,
+1.00%
$46.5

15%

34%

Visa Inc. Class A

V,
+0.75%
$45.6

66%

72%

Procter & Gamble Co.

PG,
-1.26%
$42.1

89%

116%

Home Depot Inc.

HD,
+1.01%
$41.0

51%

71%

Lowe’s Cos. Inc.

LOW,
+1.92%
$40.8

111%

131%

Intel Corp.

INTC,
+4.67%
$39.0

-40%

-31%

Morgan Stanley

MS,
+1.04%
$36.7

67%

93%

Walmart Inc.

WMT,
+0.33%
$35.6

82%

99%

Qualcomm Inc.

QCOM,
+2.12%
$35.1

101%

130%

S&P 500

SPX,
+0.51%
55%

69%

Source: FactSet

Click on the tickers for more about each company or index.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

The four listed companies with negative five-year returns are three banks — Citigroup Inc.
C,
+0.09%
,
Wells Fargo & Co.
WFC,
-1.01%

and Bank of America — and Intel Inc.
INTC,
+4.67%
.

Don’t miss: As tech companies take over the market again, don’t forget these bargain dividend stocks

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I’m a parent with an active social media brand: Here’s what you need to check on your child’s social media right now | CNN

Editor’s Note: Sign up for CNN’s Stress, But Less newsletter. Our six-part mindfulness guide will inform and inspire you to reduce stress while learning how to harness it.



CNN
— 

If you follow me on Twitter or Instagram, you’ll know I wear a lot of hats: romance author, parent of funny tweenagers, part-time teacher, amateur homesteader, grumbling celiac and the wife of a seriously outdoorsy guy.

Because I’m an author with a major publisher in today’s competitive market, I’ve been tasked with stepping up my social media brand: participation, creation and all. The more transparent and likable I am online, the better my books sell. Therefore, to social media I go.

It’s rare to find someone with no social media presence these days, but there’s a marked difference between posting a few pictures for family and friends and actively creating social media content as part of your daily life.

With a whopping 95% of teens polled having access to smartphones (and 98% of teens over 15), according to an August Pew Research Center survey on teens, social media and technology, it doesn’t look like social media platforms are going away anytime soon.

Not only are they key social tools, but they also allow teens to feel more a part of things in their communities. Many teens like being online, according to a November Pew Research Center survey on teen life on social media. Eighty percent of the teens surveyed felt more connected to what is happening in their friends’ lives, while 71% felt social media allows them to showcase their creativity.

So, while posting online is work for me, it’s a way of life for the tweens and teens I see creating and publishing content online. As a parent of two middle schoolers, I know how important social media is to them, and I also know what’s out there. I see the good, the bad and the viral, and I’ve have put together some guidelines, based on what I’ve seen, for my fellow parents to watch for.

Here are eight questions to ask yourself as you check out your children’s social media accounts.

If you don’t, it’s time to start. It’s like when I had to look up the term “situationship,” I saw that ignorance is not bliss in this case. Or really any case when it comes to your children. Both of my children have smartphones, but even if your children don’t have smartphones, if they have any sort of device — phone, tablet, school laptop — it’s likely they have some sort of social media account out there. Every app our children wish to add to their smart devices comes through my husband’s and my phone notifications for approval. Before I approve any apps, I’ll read the reviews, run an internet search and text my mom friends for their experience.

Most tweens and teens use social media for socializing with local friends.

If I’m still uncertain about an app, I’ll hold off on approving it until I can sit down with my children and ask them why they want it. Sometimes just waiting and forcing a short discussion is enough to convince them they no longer want it. In our household, I avoid any apps that run social surveys, allow anonymous feedback or require the individual to use location services.

If you don’t have your family phone plan all hooked together with parental controls, I’d advise setting that up ASAP. Because different devices and apps have different ways to monitor and set up parental controls, it’s impossible to link all the options here. However, a quick search will give you exactly the coverage you are comfortable with, including apps that track your child’s text messages and changing the settings on your child’s phone to lock down at a certain time every night.

The top social media platforms teens use today are YouTube (95% of teens polled), TikTok (67%), Instagram (62%) and Snapchat (59%), according to the Pew Research Center survey on teens and social media tech. Other social media platforms teens use less frequently are Twitter, Reddit, WhatsApp and Facebook. Most notably, Facebook is seeing a significant downturn in teen users. This list isn’t exhaustive, however. I would check out your children’s devices for group chat apps (such as Slack or Discord) and also scroll through their sport or activity apps where group chat capabilities exist.

I’ve seen preteens and teens using their real names, birthdate, home address, pets’ names, locker numbers or their school baseball team. Any of that information could be used to identify your child and location in real life or using a quick Google search. All of that is an absolute “no” in our house.

I also tell my kids not to answer the fun surveys and quizzes that invite children to share their unique information and repost it for others to see. These can be useful tools for predators and people trying to steal your children’s identity.

What I do: I made the choice a long ago to withhold the names of my children and partner. It’s not an exact science, and I know some clever digging could find them. For my husband, it’s for the sake of his privacy and also the protection of his professionalism. Just because he’s married to a romance author doesn’t mean he should have to answer for my online antics, whatever they may be. For my children, I want to avoid anything embarrassing that could be traced back to them during their college application season.

Even if your children keep their social media profiles private (more on that later), their biographical information, screen name and avatar or profile picture are public information.

Do an internet search of your child’s name to see what’s out there and scroll through images to make sure there isn’t anything you wouldn’t want to be made public. In our household, I’ve asked my children to use generic items or illustrated avatars in their social media bios.

What I do: Parents who do have active social media accounts may want to do a search of their own names. When my first book was published in 2019, I did a search of my name and images and found many photos of my children that came directly from my social media pages. I hadn’t posted pictures of them, but I did use a family photo as my profile photo and those are public record. Once I deleted them, the photos disappeared.

Another “no” in our household is posting videos or photos of our home or bedrooms. Something that feels innocent and innocuous to your middle schooler may not feel that way to an adult seeking out inappropriate content.

I learned this from one of my children’s Pinterest accounts. My kid loves to create themed videos using her own photos and stock pictures, and she’s gained over 500 followers in a short period of time. She has completely followed our rules and I know, because I check and follow her myself — but it hasn’t stopped the influx of adult men following her content.

What we do: Over the holidays, I sat with her and went through each follower one by one and blocked anyone we decided was there for the wrong reasons. In the end, we blocked close to 30 adult men on her account. (I also know that some predators cleverly disguise themselves as children or teens, and we may not catch them all, but this is still a worthy exercise.)

We also talk to our children about how to protect themselves. They wouldn’t want those strangers standing in their bedroom; therefore, they don’t want to post videos of their bedroom or bathroom or classroom for strangers to view.

This is a tricky one for lots of reasons. For content creators to build their following, they need to remain public on social media. If your child is an entrepreneur or artist hoping to grab attention, locking down their account will prevent that from happening.

That said, a way around this is to have two accounts. First, a private one, locked down and only used for family and close friends, and second, a public one that lacks identifiers but showcases whatever branding the child is hoping to grow. I’ve come across some well-managed public accounts for children who have giant followings and noticed they are usually run by parents, who state that right in the profile. I like this. If your children want public profiles because they are hoping to catch the attention of a talent scout, having the accounts monitored by a responsible adult who has their best interest in mind is a healthy compromise.

This is the exception, however. Most tweens and teens today use their social media for socializing with local friends. The benefit of keeping their account as private (or as private as can be) is threefold. It allows them to screen who follows their content, thus preventing our Pinterest fiasco. It prevents strangers from accessing their content and making it viral without their permission. And it protects them from unsolicited contact with strangers.

Not all social media platforms have the option to make your account “private.” For example, YouTube has parental controls that can be adjusted at any time. TikTok and Instagram can be made private (which means users must approve followers) by making the change in the account settings. Once the account is private, a little padlock will show next to the username.

Snapchat allows users to approve followers on a case-by-case basis as well as turn off features that disclose a user’s location. Notably, Snapchat also informs users when another user takes a screenshot of their story, which is a feature other social media platforms don’t have yet.

Most group chat apps don’t have the ability to go private so much as they ask users to approve of follower requests. Take time to discuss with your children who they allow to follow them and what personal information they allow those followers to know. It’s also a great time to teach them the art of “blocking” those individuals who are unsafe or unkind.

My suggestion is to log in, scroll around and even ask your children to teach you about the platforms they use. Then, when they roll their eyes at you, go ahead and tell them about your first Hotmail email address and the way you picked the perfect emo playlist on your Myspace page … and when they’re bent over laughing, sneak a peek at their follower list. Trust me, it’ll be worth it.

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