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Globe and Mail
15 hours ago
- Business
- Globe and Mail
The "DORKs" Are Going to the Moon -- but Can It Last?
Key Points Momentum investors are glomming on to a quartet of fast-rising stocks: Krispy Kreme, Opendoor, Rocket, and Kohl's. Three of the four aren't profitable, and the fourth is loaded down with a lot of debt. The stocks will do well so long as the momentum lasts -- but it won't. 10 stocks we like better than Kohl's › Forget about the BRICs, FANG stocks, and the " Magnificent Seven." Lately, the hottest group of momentum stocks"going to the moon" is the "DORKs." For those not in the know, that's the acronym awarded to donut shop Krispy Kreme (NASDAQ: DNUT), home buyer/seller Opendoor Technologies (NASDAQ: OPEN), Rocket Mortgage owner Rocket Companies (NYSE: RKT), and department store Kohl's (NYSE: KSS). Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Over the past couple of weeks, starting about mid-July and running through Friday's close, shares of Krispy Kreme stock had gained 43.5%. Opendoor soared 144.2%, Rocket rose 12.7%, and Kohl's collected a cool 38% gain. And why? Not because of any substantive news, I can tell you. Over the past two weeks, the most exciting announcements put out by this group of four stocks were Krispy Kreme's announcement of an $0.88-per-donut sale (glazed only) to celebrate its 88th birthday, and Kohl's announcement of savings on back-to-school shopping. Rocket cited a survey saying it's "#1 for client satisfaction" (yeah, and I've got a mug that assures me I'm the "world's best dad"). Opendoor announced a new two-step service whereby it buys a house, and then shares some of the profits with the seller when it resells it -- an interesting twist on the home-flipping theme, but perhaps not quite enough to explain the stock price doubling! To the contrary, after cluing in to the DORKs theme Monday, The Wall Street Journal pointed out the curiousness of investors suddenly glomming on to a pair of real estate picks in the midst of a "stagnant U.S. housing market," at the same time as it questioned the wisdom of buying Kohl's stock, which "has been losing ground to competitors for some time and has replaced its chief executive more than once in recent years." The Journal 's conclusion: "Speculative stocks are having a moment," and "YOLO bets" are back in fashion. You only live once, so invest in profitable companies while you still can But here's the problem with such "you only live once" bets in the stock market: They're a good way to kill your portfolio and ensure it won't be able to come back to life. Benjamin Graham, famed for teaching mega-investor Warren Buffett how to invest, once famously opined, "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." And two of the things that the market weighs when determining whether a stock that's gone up can stay up are its profits and its debt. That's worth keeping in mind before you dive into any of the DORK stocks yourself. Three of these stocks, after all -- Krispy Kreme, Opendoor, and Rocket -- aren't currently earning any profits at all. Kohl's is, and indeed, it earned a pretty respectable $121 million over the past year, and generated nearly that amount ($113 million) of positive free cash flow as well. Is Kohl's stock a buy? The Kohl's story gets even better when you examine the company's history, and notice that as recently as 2022, Kohl's was earning well over $900 million in annual profit -- and that analysts who follow Kohl's expect its earnings to at least double to $230 million in just a few years. The problem with even Kohl's stock, however -- and the reason I worry even this relatively more stable business will probably not be a winner -- is debt. Data from S&P Global Market Intelligence show that, while Kohl's sports a market capitalization of only $1.4 billion, which doesn't look too expensive relative to its $121 million in earnings (the P/E ratio is an unassuming 11.5), Kohl's stock is actually much more expensive than meets the eye. Against cash reserves of only $153 million, Kohl's carries $7.4 billion in debt, pushing its enterprise value up past $8.6 billion -- about 6 times more expensive than its market cap alone would suggest. So even if analysts are right about Kohl's earning nearly $230 million by, say, 2028, at today's prices, that's still a valuation of more than 37 times the earnings that Kohl's might (or might not) earn a few years from now. Long story short, even the most promising of the DORK stocks, Kohl's, is probably too risky to invest in. My advice: Don't be a dork. And don't invest in them, either. Should you invest $1,000 in Kohl's right now? Before you buy stock in Kohl's, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kohl's wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
Politico
18-07-2025
- Business
- Politico
Weak dollar means worse tariff inflation
Presented by Editor's note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. Quick Fix The steady decline of the dollar under President Donald Trump has led to a lot of hyperventilating about its role as the global reserve currency and threats posed by alternatives like the euro or whatever the BRICs have cooking. That's a long-term problem (to the extent it's a problem at all). For now, the weak dollar means a lot of things are just a little more expensive. And that defies what had been anticipated by most economists – as well as Trump advisers like Treasury Secretary Scott Bessent and Council of Economic Advisers Chair Stephen Miran — when the president began ratcheting up tariffs shortly after taking office. 'One of the biggest surprises so far has been the weakness of the dollar. It was textbook: If you put in place tariffs, it's going to put upward pressure on the dollar,' said Ernie Tedeschi, a former Biden administration economist who is now a director at the Budget Lab at Yale. 'That has major implications for the passing through of tariffs to prices.' Tariffs were widely expected to push up consumer prices, of course, but a portion of those increases was expected to be offset by a stronger greenback. Bessent said he expected 10 percent tariffs to translate into a 4 percent appreciation of the dollar — in line with the research cited by Yale's Budget Lab. Miran also anticipated dollar growth would diminish the effect of higher prices. If Trump's tariffs are putting upward pressure on the dollar, it hasn't been enough to overcome the myriad factors that contributed to its decline over the last seven months. The dollar has fallen by about 9 percent year-to-date against other currencies. If the global demand for the greenback is down — and most global trade is transacted in dollars — that limits the likelihood that foreign companies will reduce prices for U.S. importers looking to offset the cost of Trump's tariffs. Wells Fargo economists Sarah House and Nicole Cervi put it this way in a research note on Thursday: 'The broad depreciation has likely incentivized foreign suppliers to bump up their invoice prices, as dollar-denominated revenues are not stretching as far when translated to their home currencies.' [Emphasis mine.] Of course, the subtle increase in import prices in June reported by the Labor Department on Thursday belies the decline in overall import prices that occurred over the previous year. There is evidence that certain exporters — particularly Chinese businesses— are absorbing some of Trump's tariff costs by slashing what they charge. (And, over time, a weaker dollar would be a boon to domestic exporters that the administration is aiming to support.) But the fact that import prices climbed at all last month has been interpreted by some economists as a sign that the dollar's relative weakness could reverse last year's trend. That means consumers are likely to feel more of a bite if tariff-related price increases persist. 'I would think in the rest of the year that import prices move up at a faster rate, largely due to the dollar,' said Michael Pearce, the deputy chief U.S. economist at Oxford Economics. 'That means you'll get more of a burden borne by either U.S. companies shrinking their margins or passing it along to consumers.' 'It's still very early days,' he added. 'The next few months are going to be noisy.' IT'S FRIDAY — As always, send MM tips and pitches to Sam at ssutton@ Driving the day Housing starts and building permits data for June will be out at 8:30 a.m. … The University of Michigan's preliminary consumer sentiment estimate for July is out at 10 a.m. The man, the myth, the X account — Federal Housing Finance Agency Director Bill Pulte has been at the forefront of the administration's efforts to oust Federal Reserve Jerome Powell. The real estate scion 'is rubbing some mortgage industry players and senior Trump administration officials the wrong way,' writes The WSJ's Gina Heeb. So that's the strategy — Outside lawyers have warned Trump that he would likely be on shaky legal ground if he attempts to fire Powell, Megan Messerly, Victoria Guida and Jake Traylor scooped on Thursday. 'Whether or not it's illegal, I don't know,' said one official, granted anonymity to speak candidly about the legal strategy. 'But is it a good thing to point out to damage this guy's image? Yeah.' Powell fights back — The Fed chair defended his handling of the costly renovation of the central bank's headquarters in a letter to White House Budget Director Russ Vought. Powell said the Fed has made only small changes to its plans since they were approved by the National Capital Planning Commission in 2021, Victoria reports. 'The Board does not regard any of these changes as warranting further review' by the commission, Powell wrote. — In a case that could have bearing for the Fed — and every independent federal agency — U.S. District Judge Loren AliKhan issued the order on Thursday saying that the Trump administration violated the FTC Act and protections under a 1935 Supreme Court precedent when it fired commissioner Rebecca Kelly Slaughter from her role at the Federal Trade Commission. Crypto Crypto blowout — The House voted overwhelmingly on Thursday to pass the first-ever major legislative overhaul of cryptocurrency regulations, teeing Trump up for a big signing ceremony today at the White House, the tireless Jasper Goodman reports. House lawmakers voted 308-122 to adopt a Senate-passed stablecoin bill known as the GENIUS Act, with more than 100 Democrats on board. The blowout vote is the latest sign of the industry's ascendence as a major political force in Washington. But the big surprise of the day was the vote tally on a second crypto market structure bill that is now headed to the Senate with more bipartisan momentum than expected. That bill, the CLARITY Act, drew 78 Democrats — a tally that topped the vote tally that a similar bill received on the House floor last year. The vote was a major win for the GOP leaders of the effort — namely House Financial Services Chair French Hill (R-Ark.), who has worked for years to win bipartisan buy-in on the proposal. They hope the tally propels the Senate to take the proposal up. 'The vote total in the House shows massive support across party lines,' said Rep. Bryan Steil (R-Wis.), who chairs a Financial Services subcommittee on crypto. 'To me, that's a sign that the United States Senate should pick up this legislation and move quickly.' Fed File Waller weighs in — Fed Gov. Christopher Waller doubled down on his call for a July rate cut, contending that the labor market is showing signs of weakness. 'While the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed, and other data suggest that the downside risks to the labor market have increased,' he said in prepared remarks. 'With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate.' — Consumers are still showing signs of strength, however. Retail and food services sales climbed by 0.6 percent last month, according to Census Bureau data. Warsh's take — Former Fed Gov. Kevin Warsh, who like Waller is in the running to take over as Fed chair, reiterated his recent call to lower rates in an appearance on CNBC. Per The WSJ, he also said 'there needs to be an exit plan to get the Fed out of the fiscal business, to give powers back to Secretary Bessent,' he said. 'But it can't be done in a rushed way.' At the regulators A massive story in any other news cycle — Securities and Exchange Commission Chair Paul Atkins said he was open to merging his agency with the Commodity Futures Trading Commission, per Declan Harty. In an interview on FOX Business, Atkins said combining the SEC and CFTC is 'not the primary job that we have before us.' But he said he has supported the idea 'for years' and that it 'makes a lot of sense — especially with the potentially overlapping jurisdictions' between the two. On the Hill Profiles in courage — From Ari Hawkins and Daniel Desrochers: 'President Donald Trump's determination to barrel ahead with tariffs is forcing a growing number of Republican lawmakers to make an uncomfortable choice: defend the president's agenda or influential industries back home.' HUD budget advances — The House Appropriations Committee advanced its fiscal 2026 DOT and HUD spending bill, Sam Ogozalek reports. Davidson tees up outbound — Rep. Warren Davidson (R-Ohio) said Thursday that the Defense Production Act could be a vehicle for legislation that would restrict U.S. investments in China and other countries, writes Katherine Hapgood. At the White House Welp — Trump allegedly wrote a 'bawdy' letter as part of a birthday gift for disgraced financier Jeffrey Epstein. From The WSJ: 'The letter bearing Trump's name, which was reviewed by the Journal, is bawdy—like others in the album. It contains several lines of typewritten text framed by the outline of a naked woman, which appears to be hand-drawn with a heavy marker. A pair of small arcs denote the woman's breasts, and the future president's signature is a squiggly 'Donald' below her waist, mimicking pubic hair.' — Trump denied penning the letter and said he would sue the Journal. Meanwhile — Meredith Lee Hill reports that House Speaker Mike Johnson and Republicans 'are trying to forge a likely nonbinding resolution on the [Epstein] matter that could help fend off Democratic attacks that the GOP is showing a lack of transparency on the case.'
Bloomberg
17-07-2025
- Business
- Bloomberg
Importance of G20 is a little bit diminished, Pictet Research Head Says
"It's no surprise that the time of intense negotiations around trade deals with the rest of the world, the US would not want to be part of this gathering," says Maria Vassalou, Head of Pictet Research Institute at Pictet Group on absence of US Treasury Secretary Scott Bessent from the G20 meeting in South Africa. She adds: "What we are seeing is the emergence of a bipolar world where on one side you have the US and the G7, and on the other side you have China with the BRICs." Vassalou speaks to Anna Edwards and Lizzy Burden on 'Bloomberg: The Opening Trade'. (Source: Bloomberg)
Yahoo
10-07-2025
- Business
- Yahoo
Trump's Brazil tariff threats add to complex global trade week
Trade tensions are heating up again as President Trump targets Brazil with tariffs, tying the country's politics directly to a broader tariff push. Yahoo Finance Washington Correspondent Ben Werschkul joins Morning Brief to break down how Trump's moves on Brazil, BRICs, and the EU are complicating the global trade picture. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. this Brazil trade threat, which is different both in magnitude and in reasoning from some of the others that we've gotten. For sure. Yeah, so I don't I I can't tell you whether the trade war is is the worst of it is behind us or it's ahead of us, but it's definitely getting more complex this week. That's my kind of overall takeaway this morning, partly because Trump is bringing in all these outside issues. Brazil is the number one issue clearly here. He's he's he's made this trial of the former president now a centerpiece with trade in the middle of it. We've already seen some sharp back and forth this morning. Brazil's current president is is responded sharply saying, we're not going to take orders from everyone. So tensions are rising there based on with trade now in the middle of it. Another one of this theme that I would add is India. We've been waiting all week for a deal with India. Another sort of outside issue Trump has really elevated in recent days is bricks. This this alliance of of of of countries outside of the United States, he's saying he's going to put a 10% tariff on any member of bricks and it's forced India according to one report overnight to kind of try to reassure Washington that it's not behind every idea that bricks is behind. The big one, the big issue there is an idea for a a a rival to the dollar, which economists say is unlikely, but is is part of the bricks platform. So a third and a third headline to sort of flag to that we're watching today today is Trump's self-imposed deadline for either a letter or a deal with the European European Union. So that that's another that's another big trend we're watching today. It all comes, as you mentioned at the top, as markets kind of take a kind of nuanced look at this, partly because every of these issues, nearly every one of these issues has an August 1st start date. So I think there's a lot of waiting and seeing going on to see how all these different complicated trends play out in the next few weeks before any tariff rates actually change.
Express Tribune
08-07-2025
- Business
- Express Tribune
Waning US power
Listen to article The US is accelerating its own decline through a toxic cocktail of fiscal recklessness, diplomatic retreat and humanitarian abandonment. By voluntarily withdrawing from the world order, the US has created space for several other countries to raise their international profiles, particularly in terms of economic stability, alliance leadership and moral authority. At home, American debt has reached $36 trillion, and for the first time ever, net interest payments are exceeding defence spending — 3.1% of GDP and 2.9%, respectively. Some historians see this as a sign of a country's global power waning. In May, credit rating agency Moody's downgraded the US for the first time since 1919, citing the country's rising debt and erratic trade policies. The addition of over $3 trillion in debt via tax cuts for the ultra-rich and destabilising funding cuts for foreign aid and domestic social services, passed last week, may lead to another downgrade. China, Russia, Brazil and other regional and emerging powers, such as the BRICs bloc — which includes all three countries — are among the biggest beneficiaries of Washington's erratic polices regarding things such as NATO, the WHO and the entire concept of foreign aid. As many academics and experts have noted, USAID is probably the best thing to ever come out of Washington. The decision to gut it is expected to cause at least 14 million additional deaths around the world by 2030. Depending on their regional geopolitics, most countries around the world have shifted their focus away from the US and are now looking to China and the EU for assistance and leadership over the past decade. China, in particular, has capitalised on this, by expanding the scope of its Belt and Road Initiative and using aid, particularly vaccine diplomacy, to fill critical gaps around the world. The end result of this US withdrawal is that now, as BRICs and other international alliances work to further their own interests, the US sits alone, reduced to barking threats that, if implemented, will spell disaster for its own citizens.
