The Schwab US Dividend Equity ETF (SCHD) has done well this year and is hovering near its all-time high of $29.33. It has risen by 16.2% in 2024, underperforming the S&P 500 index, which has risen by over 25% this year. 

SCHD ETF has formed a risky pattern

In addition to lagging the broader market, the SCHD ETF is at risk of a major reversal after forming a rising wedge pattern.  

On the chart below, we have drawn a trendline that connects all higher highs since May 16 of this year. We also connected all the higher lows since that period. 

A closer look shows that the fund has remained inside that ascending channel, which is commonly known as a rising wedge pattern. In most periods, this is one of the most bearish patterns in the market. 

The bearish view is usually confirmed when the two lines are approaching their convergence, which is about to happen. 

Further worryingly is the fact that the SCHD ETF has formed a bearish divergence pattern. The chart shows that the two lines of the MACD indicator have continued to form a series of lower lows and lower highs. Two bars have even moved to the red area. 

The Relative Strength Index (RSI) index has also continued to form a bearish divergence pattern. 

Therefore, there is a risk that the Schwab US Dividend Equity ETF will drop sharply in the coming months or weeks. This decline will be part of mean reversion since the fund remains about 8% above the 200-day moving average at $26.70. 

The bearish view will be invalidated if the SCHD fund rises above the psychological level of $30, which is at the upper side of the wedge pattern. If this happens, it will rise to the key resistance level at $35.

Read more: SCHD and VYM ETFs forecast for November 2024

Is the Schwab US Dividend Equity ETF really a dividend fund?

At the same time, there are questions about whether the SCHD ETF is a good dividend or income fund in the first place. 

In most cases, investors buy the fund because of its long track record of paying and growing its payouts to investors.

SCHD has achieved the latter because it has grown dividends for 12 consecutive years. Its ten-year CAGR rate was 11.1%, much higher than the median of all ETFs at 6.30%. Also, its dividend growth rate has been better than other comparable funds.

The challenge, however, is that the SCHD has a dividend yield of just 3.4%, which is higher than the S&P 500 index, which has 1.25%.

However, for dividend-focused investors, there are other simpler ways of generating dividends over time. A good example of this is the VanEck High Yield Muni ETF (HYD), which has a dividend yield of 4.23%.

The Columbia Multi-Sector Municipal Income ETF (MUST) yields 3.50%, while the Vanguard Tax-Exempt Bond Index Fund (VTEB) yields 3.10%. The benefit of these funds compared to the SCHD ETF is that they invest in tax-exempt municipal bonds. 

The other high-yielding alternative for SCHD is US government bonds, with the 10-year yielding 4.40% and the 30-year yielding 4.60%. 

Read more: Love the SCHD ETF? CLM and CRF are better yielding alternatives

To be sure, investing in government bonds has its limitations, especially now that the Federal Reserve has started to cut interest rates. Also, bonds lack the appreciation that a fund like SCHD has over time. 

Indeed, the SCHD ETF’s total return has been strong over the years. It has jumped by 81% in the past five years, making it a better performer than municipal bonds and US government bonds. However, its total return has constantly underperformed the S&P 500 index, making the latter the better ETF to buy.

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Adani Group stocks experienced a sharp and widespread selloff on Thursday after US prosecutors announced bribery and fraud charges against Gautam Adani and seven associates.

The charges, unveiled late Wednesday, allege that Adani and his executives engaged in a multibillion-dollar scheme involving bribery to secure solar energy contracts in India.

Adani Energy Solutions bore the brunt of the market reaction, with shares plummeting 20%.

Adani Green Energy followed closely, dropping 18%. Adani Total Gas and Adani Power fell by 13-14%, while flagship companies such as Adani Enterprises, Ambuja Cements, ACC, and Adani Ports were locked in at their 10% lower circuit limits.

Other subsidiaries, including NDTV (-11%), Adani Wilmar (-8%), and Sanghi Industries (-6%), also faced significant losses, reflecting the ripple effect across the conglomerate.

Adani Green bond offering scrapped amid fallout

Amid the legal and market turbulence, Adani Green Energy cancelled plans of a $600 million bond issuance scheduled for Thursday.

Adani Green Energy’s dollar bonds issued in March dropped a record 15 cents, hitting a low of 80 cents, as per Bloomberg data.

Bonds from other Adani Group entities also saw significant declines, with some falling to as low as 74 cents—their steepest drop since the 2023 Hindenburg Research report.

“While Adani has demonstrated resilience in handling previous allegations, including those from Hindenburg, this incident highlights the ongoing risks tied to emerging markets, particularly regarding governance, transparency, and regulatory oversight,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital Pte in a Bloomberg report.

Bribery allegations against Adani and nephew explained

The indictment filed by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) outlines serious accusations against Adani, his nephew Sagar Adani, and other executives.

They are charged with conspiring to defraud US investors and global financial institutions through false representations.

According to the indictment, the group paid $265 million in bribes to Indian officials to secure state solar energy contracts.

The prosecutors claim these contracts were projected to generate $2 billion in profits over 20 years.

Some participants in the scheme allegedly referred to Gautam Adani by code names such as “Numero uno” and “the big man.”

The bribes were reportedly concealed from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.

The charges fall under the Foreign Corrupt Practices Act (FCPA), which targets corruption and bribery in international business dealings.

Deputy Assistant Attorney General Lisa H. Miller called the allegations a “massive fraud,” stating, “This indictment alleges schemes to pay over $250 million in bribes, lie to investors and banks to raise billions of dollars, and obstruct justice.”

A second major blow for Adani Group

This development marks another significant setback for Gautam Adani, whose business empire has been under fire since the January 2023 Hindenburg Research report accused the group of financial misconduct.

That report led to a staggering $150 billion loss in market capitalization across Adani’s companies.

Gautam Adani, ranked by Forbes as the 22nd richest person globally with a net worth of $69.8 billion, now faces not only financial challenges but also potential legal consequences.

Reports indicate that arrest warrants have been issued for Gautam Adani and his nephew Sagar Adani, compounding the group’s troubles.

What’s next for Adani Group?

The allegations have cast a long shadow over Adani Group’s global operations and its access to international capital markets.

It could also intensify foreign fund withdrawals, which have already reached record levels since October.

“Foreign investor sentiment could be affected if the investigation escalates,” Manish Bhargava, CEO of Straits Investment Management told Bloomberg, adding that the case heightens reputational risks for the group.

The charges came on the heels of Adani announcing a fresh investment in green energy and congratulating US President-elect Donald Trump on his election victory.

Trump, known for his pro-energy deregulation stance, has pledged to simplify rules for energy companies, including those operating in renewable sectors.

As the case progresses, its trajectory will likely depend on the incoming Trump administration.

Breon Peace, the Brooklyn US attorney appointed under Biden, is expected to step down.

“It’s unusual for charges like this to emerge during a transition of power,” said Gary Dugan, CEO of Global CIO Office. “The hope is that Donald Trump dismisses it once in office.”

The Adani Group has not yet issued a statement in response to the charges, but analysts predict extended volatility for its stocks and bonds as the legal process unfolds.

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Australia has unveiled a bold new policy to curb social media access for children under 16, introducing some of the toughest controls globally.

A new bill proposed in parliament seeks to enforce an age-verification system, backed by fines of up to A$49.5 million ($32 million) for platforms that fail to comply.

This legislation targets major players like Meta’s Instagram and Facebook, Bytedance’s TikTok, and Elon Musk’s X.

The proposed measures are part of a broader initiative to address concerns over the mental and physical health risks posed by social media to young users.

Age-verification system

Australia’s policy includes an age-verification system that may use biometrics or government-issued identification, a first of its kind globally.

The initiative stands out for its stringent measures, as it makes no exceptions for parental consent or existing accounts.

If implemented, this system will place the onus on social media companies to verify user ages and block underage access.

Platforms will be required to safeguard privacy by destroying any information collected for verification purposes.

The government believes this ensures compliance while addressing concerns about data security.

Strong bipartisan support, but opposition raises concerns

The bill has garnered support from the opposition Liberal party, while independent lawmakers and the Greens have requested more details before backing the proposal.

Although the Albanese-led Labor government is optimistic about passing the legislation, critics argue that the specifics of enforcement and the protection of user privacy need further clarity.

The law’s robust privacy provisions could make it a model for future global efforts, but its stringency may face challenges from tech companies and advocacy groups.

For now, the bipartisan support strengthens the likelihood of the bill’s passage.

No exemptions

Unlike similar policies in other countries, Australia’s proposed rules would not allow children to circumvent the ban with parental consent.

France, for example, introduced a similar policy last year for users under 15 but included a parental consent clause.

In contrast, Australia aims to establish an unequivocal age limit, setting a new standard in the global push to regulate social media use among minors.

The United States requires parental consent for data access of children under 13, but its approach lacks the enforcement power proposed in Australia’s law, which directly targets platforms for accountability.

How is Australia addressing mental health risks?

Prime Minister Anthony Albanese and Communications Minister Michelle Rowland have framed the reform as a critical step to protect children’s well-being.

Reports suggest that almost two-thirds of Australian teens aged 14 to 17 have encountered harmful content online, including depictions of drug abuse, self-harm, and suicide.

The government believes excessive social media use exacerbates mental health issues, with girls particularly affected by body image concerns and boys exposed to misogynistic content.

Rowland emphasised the social responsibility of platforms, stating that this legislation is about holding companies accountable for ensuring user safety.

Exemptions

Despite the proposed restrictions, children will still have access to vital online services, including youth mental health platforms like Headspace, educational tools such as Google Classroom, and communication platforms used for online gaming and messaging.

The government aims to strike a balance between reducing harmful social media exposure and ensuring access to essential digital resources.

Australia’s proposed social media policy could serve as a blueprint for other nations.

While several countries have initiated efforts to regulate social media for children, none have proposed measures as comprehensive as Australia’s.

By enforcing strict penalties and robust age-verification systems, the legislation demonstrates an aggressive approach to mitigating risks to young users.

Its success will depend on effective implementation and cooperation from social media companies.

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Opera stock price has staged a strong comeback in the past few months as the company has continued to report strong financial results. The OPRA share price surged to $19.93, its highest level since July 2023. It has jumped by over 470% from its lowest level in 2022, giving it a market value of over $1.75 billion.

Opera is a good niche company

Opera is a niche company that operates in one of the most competitive industries globally. Its core product is a browser, which can be installed on smartphones, tablets, and computers. 

It is an underdog that competes with the biggest companies globally. Google owns Chrome, which has a commanding market share of 60%. Chrome comes installed on platforms like Chromebooks and Android devices.

Apple has Safari, which comes installed across all its products. Similarly, Microsoft has Edge, which has a small but growing market share. On top of this, there are hundreds of browsers out there, including Phoenix, Aloha, Firefox, and DuckDuckGo. 

Opera makes its money in several ways. Most of its revenue comes from Google, which pays it money to ensure that its search engine is the default. It also makes money by inking marketing deals with companies like Booking, Samsung, and eBay. These firms want exposure to its millions of users.

Opera has also expanded to other industries. It has moved to the news industry, where it offers Opera News, a platform that aggregates news content, especially in the emerging markets. It also launched its VPN solution and Aria, its AI chat bot, 

Over time, Opera’s business has continued growing, with its annual revenue rising from $177 million in 2019 to over $396 million last year. 

Strong earnings and guidance

The most recent catalyst for the Opera stock price was its strong earnings, which showed that the company was still growing.

Opera’s revenue rose to $123 million in the last quarter, a 20% increase from the $102 million it made in the same period last year. Its net income jumped to $17.9 million.

This growth happened after the company’s monthly active users jumped to 296 million. Notably, the number of active users in western countries jumped to over 51 million during the quarter. These users stood at 34 million in the same period in 2020.

Opera also increased its forward guidance. It expects that its annual revenue will be between $470m and $473m, while its adjusted EBITDA will be between $112m and $114m. 

Most importantly, Opera is a high-margin company. It has a gross profit margin of 53%, higher than the sector median of 50.26%.

It also has a net income margin of 35%, also higher than the sector median of 3.55%. The company has tools to continue growing these margins over time since its business is asset-light. It can also add more solutions and make money over time. A good example of this is what it did with its VPN solution.

Analysts are optimistic about the Opera stock price, with the average target being $24, higher than the current $18. They expect that its annual revenue will continue having double-digit growth in the next few years.

A key risk for Opera is that it still depends on Google for a substantial part of its revenue. On the positive side, Google will still remain being a key provider as long as it demonstrates more user growth. 

Opera stock price analysis

The weekly chart shows that the OPRA share price has been in a strong bull run in the past few months. It recently crossed the important resistance level at $16.78, its highest level in March and June this year.

Opera share price has remained above the 50-week and 25-week moving averages. It has also moved above the 38.2% Fibonacci Retracement level. 

Therefore, the stock will likely continue rising as bulls target the all-time high, which is almost 40% above the current level. A drop below the support at $16.78 will invalidate the bullish view.

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