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Yahoo
3 days ago
- Business
- Yahoo
Alternative assets in your 401(k): Here are the pros & cons
President Trump signed an executive order last week allowing crypto and other alternative assets in 401(k) accounts. Mitlin Financial founder and "Financial Planning Made Personal" author Lawrence Sprung joins Market Catalysts with Julie Hyman to discuss the pros and cons of adding these types of assets into your 401(k). To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. An executive order signed by President Trump last week would allow 401k plans to offer alternative assets, including private equity, real estate, crypto and infrastructure. What would that look like in a retirement account and what are the benefits and risks? Let's bring in Lawrence Sprung, Mitlin Financial founder and author of Financial Planning Made Personal for this week's FA Corner, brought to you by Capital Group. Lawrence, it's good to see you. Good to see you. So this would be a big change in 401Ks to have these assets in them. What is it important to keep in mind if investors are considering whether they should put these in their 401Ks? I think the most important things for them to consider are how old are they? What's their risk profile? What's their time horizon? And do these instruments add value to their overall allocation or add too much risk? And then make the decision how they're going to allocate those funds to those areas. Okay, so let's talk about, let's take private equity for as an example here. What are some of the pros and cons of something like that? So I think it's going to be a huge win for the product manufacturers because now they have this whole new opportunity of client base, right? So it's going to be huge win for them. As far as clients go, they have to be concerned and look at, well, is this really adding alpha, increased returns to my portfolio? Am I okay with the potential illiquidity because I may not be able to buy and sell these as actively as my other investments in my 401k? And what are the costs and do those costs offset the benefits that I'm getting? So there are things to look at overall that I think are a little bit more difficult than just looking at traditional stocks and bonds. And we should mention as well, this even though the executive order was just signed, it's not happening immediately, right? Correct. Yeah, it's going to probably be months before the Department of Labor starts enacting this and, you know, there is some uncertainty whether it actually goes through. I'm pretty certain it will ultimately end up going through. It's not a matter of if, it'll just be a matter of when and how long that is. And Lawrence, I'm curious whether, I mean, your investors, people that you're advising are probably already in some of these instruments, right? Has there been a big increase in interest in things like crypto from your clients, things like private assets? We are definitely getting more inquiries over the last, let's say, two years than we ever had in the last 15, right? And I think it's primarily because everybody's hearing about, everybody's hearing about the boon in some of those areas. So there are additional questions and then it's a matter of working with them to have them understand what the pros and cons are, and if it makes sense for them in their own individual situations. And are there things that people need to think about about holding an asset, whatever it is, be it equities or anything else, outside of 401k versus inside of a 401k? Sure. There are inherent benefits to both depending on what your goals are with this money, right? The benefit to having it in the 401k, if you have it in the traditional side, is that money's going in, it's growing tax deferred, you'll pay taxes when you withdraw it. If you're doing it in the Roth 401k component, then you're going to have a tax-free growth of that asset in perpetuity and you won't have to pay any taxes. Whereas outside the 401k, in your individual name, it's going to be either a long or a short-term capital gain at some point. There are benefits to holding things long term in terms of not paying as much in taxes as short term, but you will have to pay taxes. So if there are assets that are more risky that you may not need long term, you may benefit from putting it in the traditional or that Roth 401k component because you'll receive some significant tax benefits. Now, switching gears, there's something else I wanted to ask you about because during the commercial break you told me you're getting a lot of questions about it. And this is something else that's a policy change from this administration, and it's the so-called Trump child accounts, right? The seeding of a bank account with $1,000 when a child is born. What's going on with those? Are they happening? So it was passed in the one big beautiful bill. And as of January 1, you are able to start doing those and having January 1 of this 2025 it was able to be seated. But the issue is none of the custodians, none of the investment firms at this point that I'm aware of were prepared for it or are prepared for it. So what I'm hearing is sometime in 2026, hopefully early 2026, these accounts will be available and people will get them seated back to January 1, 2025, and then they'll be able to start contributing. But we've gotten calls about it, people are anxious to set them up and get them going, but nobody's really prepared to get these moving in the right direction at this point. And just real quick, if you're putting in $1,000 when your kid is born, you want to be pretty aggressive with the investments initially, I would imagine. I would, I would. I mean, you have at least an 18-year runway, chances are that there's a lot of runway there that you can withstand that volatility and benefit from that compound growth over that period of time. Right. Lawrence, good to see you. Thanks for coming in. We appreciate it. Thank you. Related Videos What economists are saying about inflation now Trump: 'I Would Walk' if Talks Don't Go Well Putin Will Try His 'Charm Offensive' on Trump in Alaska, Bolton Says Trump on Alaska Summit: 'I Want to See a Cease-Fire' Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Fed's labor mandate is 'more important' than inflation right now
July's Producer Price Index (PPI) data came in hotter than expected, stoking concerns about rising inflation. Chris Watling, Longview Economics global economist and chief market strategist, and Stephanie Roth, Wolfe Research chief economist, joins Market Catalysts with Julie Hyman to discuss the importance of PPI and how labor trends and overall economic growth could influence the Federal Reserve's next move. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. I want to sort of dig more into this discussion with both of you because we're talking about a cadence issue here, right? This is something the Fed has said over and over again that they're sort of waiting to see how the tariffs make their way through the economy. And if we're seeing PPI at this level now, Chris, won't you then see it in PPI, as we had in CPI, excuse me, as we had towards the fall? Well, there's a lot of things going on in CPI, and there's a lot of factors that influence CPI, and one of the most important ones is really how strong the economy is. And I think the data has been building in the last few months that show the economy is slowing, and it seems to me pretty, getting clearer and clearer and we're getting these calls for 50 basis points from from members of the sort of finance community, even the Treasury Secretary. So um, I you know, I think it's um, I think that's a more important factor. CPI is a lagging factor. Maybe a bit of PPI shows up in this, but but frankly, we've been talking about this for three or four months now and the evidence isn't very clear. It's in bits and pieces of CPI, but it's not affecting CPI in the round. So so I think the more important factor here is is the is the employment and the growth mandate, if you like, which is a sort of subset of the employment mandate of the of the Fed rather than the inflation mandate, which is, I say is lagging. So I think that's where the focus should be and I think that's where the market's focus is shifting as it's priced in these cuts in the last uh few days in the curve out to the end of the year, pricing more cuts. So Stephanie, is the labor side of the equation going to be continuing to show weakness and supportive of a cut? Yeah, I think that's where my view differs a bit. So, yes, there were some significant downward revisions to June, and then mathematically that may may get revised down to some extent. Looking ahead, we're starting to see signs that the data are bottoming. And if you think back to what happened from May to June, you had significant tariff uncertainty, you had 500,000 people lose their work authorization from some of the immigration policy. That's kind of in the past. And now you're starting to see things bottom out, sentiment is stabilizing, job postings from Indeed are starting to pick up. So this might have actually just been a a one-time shock to the economy, and we might start to see a labor market that's a bit better. Now, payrolls are likely to still be fairly muted, something like 60 to 70,000 per month, but not something that's that onerous, something that's decelerating at least into the future. Okay, so Stephanie, put all that together for us then. Do you think that that September rate cut is happening? I think it has a lower odds than what's priced into market. So I don't think it's in the 90% range, which is currently in the pricing. I think it's much more of a debate than that. Realistically, the you know, the odds are shaping up that it's more likely than not, but I think what's more concerning or confusing is to what extent they're going to be more rate cuts after that. It's possible the Fed will cut in September and then the inflation data will make it a lot more difficult from there. Related Videos Investors shouldn't 'overreact' to hot PPI data, strategist says PPI comes in hot: When will wholesale inflation hit consumers? Cava stock plunges on Q2 results: CEO explains what happened White House Expects Monthly Jobs Report to Continue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
US beef prices could be higher for next two years: JBS global CFO
Beef prices are expected to remain elevated as US cattle supply faces years-long pressure from herd rebuilding delays. Guilherme Cavalcanti, JBS (JBS) global CFO and investor relations officer, joins Market Catalysts to discuss how the company's diversified protein portfolio and global footprint are helping offset weakness in US beef. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. Joining me now, Gilherme Cavalcanti, JBS's global chief financial officer. Guilherme, good to see you once again. Good to see you, Julie. Um, talk to me about US beef. What is going on with cattle in the US that caused this shortage, and how long do you expect it to last? Uh yes, so, basically the the herd of US in the lowest level in decades, uh, for many reasons, I think we passed through a a lot, uh, through a good moment, uh, in 2020, 2021, uh, that was followed by, uh, three years of droughts. So, the cattle rebuild herd, uh, took longer than expected. Basically, because we had again, uh, droughts in the last years. Uh, this year, uh, we have moisture, we have, uh, rain and snow, uh, so pasture conditions, uh, are good for cattle rebuild. Uh, but this in the short term, uh, already impacts. Because in order to rebuild the herd, you have to retain cow. When you retain cow, is the less cows for slaughter and then more pressure, uh, on the supply of cattle. How long? We've already seen beef prices go up here in the United States. How long do you expect those prices to be elevated? Yeah, so basically, on the cattle side, uh, as you mentioned we still expect. So if we start the cattle, uh, rebuild, uh, this year, uh, we will have the, the cycle of the cattle is two years. So we will be, uh, starting the inflection point in 2027 and seeing results in 2028. During this period, most likely, uh, beef prices will continue to be pressured because of the supply of cattle. Wow, that's a long time to have those higher, uh, beef prices. Um, luckily you guys have the chicken business as well. And that business is been performing better. Um, and when we last spoke, which was on the day that your listing, uh, your primary listing came to here in the US and this is your first earnings report since then, we should mention. You talked about that balance in the business, right, that diversification in the business. So, um, how much did chicken make up for some of the weakness in beef? Yeah, so yeah, the beef is is 30% of our business is the US beef in terms of revenues. Uh, the chicken, uh, US chicken PPC is around 25%, uh, of our, uh, global business. So, uh, the chicken going, uh, going, uh, on a on a tailwind, uh, offsets great part of the, the US beef. But also, the Brazil beef and the Australia beef is also offsetting, uh, the, the US beef. So again, our, basically, in our platform, um, basically all business units except the US beef, they are all performing well, helping to offset what one third of our business is in this challenging period. Um, since we last spoke, we have seen more tariff headlines. I know the bulk of your, uh, business, you know, is in, you do production in the countries where then you are selling into. Um, but, or is there any sort of cross border tariff exposure that you have? Yes, you, you were exactly right. So, more than 50% of our sales are in the US, which is mostly local. Uh, US exports around 15%, uh, of their revenues. Uh, and then the other regions of the world, because of this, our global footprint. And that's the idea of this geographic diversification, is that we can rearrange trade flows, uh, to offset this impact. We always have an impact, but looking globally to JBS will not be relevant, uh, because again, is rearrangement of trade flows. Basically, we can export more from Australia, we can export less from US, and then offsetting and balancing this to minimize the impact. Related Videos Tapestry stock sinks: Why Kate Spade needs to catch up to Coach Deere tariff outlook, mortgage rates hit 2025 low, Li downgrade Apple Watch blood oxygen, Klarna users, Tapestry stock plunges Investors shouldn't 'overreact' to hot PPI data, strategist says Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Shelter inflation is sticky as housing affordability woes persist
Mortgage rates are on the decline, yet shelter remains among the stickiest components of inflation. chief economist Danielle Hale and Yahoo Finance Housing Reporter Claire Boston join Market Catalysts to discuss. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. Really, shelter has been sticky, as economists like to call it. Um, those shelter costs, even if they're moderating, they've just been sort of persistent here. Um, Claire, what do we see in the numbers for last month? Definitely. So we are still seeing shelter inflation run quite a bit hotter than general inflation. Um, you know, it is coming down. Um, this is kind of the lowest year-of-a-year print, uh, since I believe October of 2021. Um, that being said, you know, housing costs are still rising and, um, you know, I think that that kind of, we talk a lot about affordability. You know, a lot of both renters and potential buyers are still feeling stretched and, you know, their incomes may not be keeping up right now with their housing costs. So Daniel, let's bring you into this. Why has this been happening? Why are these costs, why is that shelter inflation so sticky and so persistent? Well, we had a huge run-up in prices during the pandemic, uh, especially in rents, which really soared. They've softened recently, at least on the asking rent side of things, but if you look at rents more broadly across the economy, so for renters who might be staying in place and renewing, they are in many cases still playing catch up to those significant increases that we saw during the pandemic. So that's why shelter inflation costs tend to lag market rents. The good news is that market rents have actually softened again. Our rental report shows that we've had 24 consecutive months of rent softening as of July, uh, and the rents were down 2.7% on a year-over-year basis. So it's, it's a bit of a discount, but again, this is just asking rents. And so, uh, what we're seeing in those broader trends when we examine, uh, the data for all rental units is not quite as much softness yet, but we do expect to see that on the horizon. Now, one sort of caveat or warning is that with the trade uncertainty that we've seen, uh, and the softness that we're seeing in rental data, we're starting to see multi-family construction slow, at least on permits and completions. And so that means that the softness may not last. Uh, but it is there and I do think that's going to help, uh, bring inflation down, uh, as we look in the months ahead, but then we do have this wild card of tariffs, which, which could, uh, lead to some opposite findings. Yes, we do. I mean, and in terms of how people feel about it, they definitely feel that things are unaffordable. Claire, um, we did a Yahoo Finance poll recently that sort of dug into that idea of affordability. Yeah, I mean in general, um, most people are saying that they really feel like the housing market is out of reach for them, um, you know, at current prices. Especially when we look at the purchase side, um, you know, home prices depending on your metro area are up anywhere from 15 to 50%, you know, from those pre-pandemic levels. And that makes it really difficult to, you know, get into this market. It's not just purchase price. It's also that, you know, that 6.6, 6.7% mortgage, uh, you know, that really cuts into your buying power right now. Related Videos Bullish soars in public debut, Amazon delivery, downgraded Perplexity's Google Chrome offer may be a PR stunt aimed at Apple Data Not Supporting a Big Fed Rate Cut, BofA's Cabana Says CoreWeave earnings don't answer the big question bears are asking Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
D-Wave CEO talks quantum computing's capabilities & what's next
D-Wave (QBTS) CEO Alan Baratz sits down with Julie Hyman on Market Catalysts to outline the quantum computing company's current offerings, growth opportunities, and business model. The CEO also shares his expectations for quantum computing advancements and competition with China in the space and teases potential upcoming acquisition plans. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. Turning to me now to discuss Alan Barrett, who is D-Wave's CEO. Thanks for being here. Thank you for having me. So obviously, there has been this huge upsurge in interest in and knowledge about quantum, although I think we're all still learning quite a bit about it. What do you think of all of these sort of competing timelines, especially when you guys are already making these machines? Making them and we have customers using them today as part of their business operations. So we're truly commercial. There are a number of different approaches to developing quantum computers. Some of them will take longer to mature, some of them are near term. At D-Wave, we provide what's called annealing quantum computers, and those are commercial today with companies like NTT DoCoMo or Ford, ArcelorMittal, Pattison Food Group, all using us today to help benefit their businesses. So for people who are interested in investing in something like quantum computing, what is the use case today for the computers that you're selling versus the next step and the step after that and the step after that? So, um, I think about it in three phases, near term, medium term, long term. In the near term, there are a broad array of problems that we typically think of as business optimization problems. This can be anything from workforce scheduling to manufacturing, plant floor optimization, even protein folding. And these problems can be addressed today with D-Wave's annealing quantum computers. And so the companies that I mentioned a minute ago are all using us for business optimization. In the medium term, I think that quantum is going to make a significant impact on AI and machine learning. Specifically, quantum computers are very fast and very energy efficient. And what this means is that all this rhetoric around AI requiring nuclear power plants and massive energy generation stations is likely not going to be required to anywhere near that level once quantum computers are a part of the training process. But when is that? I think that we may be able to get there within a year or two. We're not, this is medium term. We're not talking about long term. In fact, at D-Wave, we announced a few days ago a first step toward this by introducing an AI machine learning platform that developers can use to start investigating how to use quantum for large language model training. But we still have a ways to go on developing that technology and bringing a complete product to market. And then longer term, we're talking about, you know, almost unimaginable things like designer drugs where we could develop a drug that would address just your specific set of ailments. Um, so, you know, for people who are investing in stocks like yours and others, you know, obviously you've seen crazy gains in the stock that are are exponential. What do you think is still, um, sort of the biggest misconception or what do you, what kind of education do you have to do for investors and potential investors? Well, there are quite a few different quantum computing companies that are pursuing different approaches to developing their systems. And so I think you really need to take a look at which of these companies are talking about delivering products five or 10 years from now, and which of them are delivering products in the near term. I'm very proud of the fact that we are delivering products today that are creating value. And so I think that that's a really good place to start. But there is huge long-term opportunity as well. Um, and I, I should mention the opportunity there. You guys have been growing a lot, but you're still relatively small in terms of the revenue that you bring through the door. And so how quickly do you expect that to ramp up? At some point, is there sort of a tipping point? Yeah. So there are two components to our business model. One is a service-based component, what we call quantum compute as a service. And for commercial companies that really just care about leveraging quantum to get better solutions to their applications, quantum compute as a service is the ideal model. But it takes time to build a revenue base around that because it's a service-based business. It's a recurring revenue business goodness, more predictable revenue growth in the long term, but it takes time to build that base of revenue. We also sell systems. Now, we just started selling systems only about six months ago. We sold our first system to the Ulix Supercomputing Center in Germany. Um, that is a very complementary model because it's a to supercomputing centers, government labs, so not necessarily commercial. So more research based. More research based, but it's near-term revenue recognition. As soon as we install and deliver the system, we recognize revenue up front. So I think the two will work together very well to allow us to build both near-term revenue more rapidly, as well as that base of longer-term recurring revenue. Now, I, I know you guys have, um, you don't yet, haven't made a lot of acquisitions, but you're thinking about, thinking about how you want to make acquisitions. I don't know if that's the right way to put it, but what, where are you kind of in that process? And what would be complementary for you guys? So over the course of the last six months, we were fortunate enough to be able to raise a fair amount of cash through at the market transactions. And, and we thank all our shareholders, and we work every day to try to make them proud of D-Wave and comfortable with their investment. But we now have over 800 million in the bank, and that's well more than we need to achieve profitability, we believe, um, based on our normal, uh, course of business. So we are now looking at trying to accelerate growth through acquisitions. We haven't talked about what the acquisition strategy is. We've been working on it for the last few months. Um, I hope to be able to announce something in the near future, but we're very excited to now have the opportunity to pursue that. All right. Well, obviously, we'll stay in touch on that. And lastly, I wanted to sort of zoom back out. And I, I'm curious about the competition between the US and China. Um, we've obviously seen it in AI. How is that playing out in quantum computing? And is there a risk that we see, you know, them outpacing us as they have tried to do in some other technologies? There's absolutely a risk. So China is by far investing more in quantum than any other country. Um, they're leading at about 17 billion. Uh, if we take Europe, the EU, all those countries together, it's about 11 billion, and the US is at about 5 billion. So we are behind China significantly. In fact, you know, all countries in the world are well behind China. So I do think it's important for the US to really start focusing on a better strategy for quantum and really to up that investment. Have you gotten heard any glimmers of that from Washington? There's obviously been a lot of focus on AI there, but what about quantum? Yeah, I, I mean, look, the, the premier funding mechanism for quantum in the US is called the National Quantum Initiative. Uh, and that was put into place under the initial Trump administration. It was supposed to be renewed under Biden. It never got renewed. It still hasn't been renewed. So we really need to get focused on getting that renewed, getting the right programs in place, and making sure that the US is the leader in quantum computing.
