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Billionaire boom: Wealthiest individuals are growing richer and more numerous than ever

The world’s billionaires are richer and more numerous than ever, with their collective wealth reaching unprecedented levels.

According to the 2023 Billionaire Census by Altrata, the global billionaire population grew by 4% to 3,323 individuals, while their combined net worth surged 9% to a staggering $12.1 trillion.

This remarkable concentration of wealth underscores the growing economic divide even among the super-rich.

An elite group of just 18 billionaires, each worth over $50 billion, now controls nearly $2 trillion—16% of all billionaire wealth.

This is a fourfold increase in their share compared to a decade ago, highlighting the rapid pace of wealth accumulation at the very top.

Tech tycoons and North America dominate the billionaire boom

North America remains the hub of billionaire wealth, with its billionaire population rising by 9.9% to 1,111 individuals.

The region’s collective wealth jumped 15.7% to surpass $5 trillion, driven by strong stock market gains and the meteoric rise of mega-cap technology stocks.

While Altrata’s report does not name individuals, the Bloomberg Billionaires Index identifies tech magnates like Elon Musk, Jeff Bezos, Mark Zuckerberg, and Nvidia CEO Jensen Huang as standout performers.

These leaders capitalized on bullish equity markets and investor confidence in tech-driven innovation.

Source: Wealth-X, an Altrata company, 2024

Unequal distribution among billionaires

Despite the surge in numbers, billionaire wealth remains unevenly distributed.

Most billionaires—84%—have fortunes between $1 billion and $5 billion, accounting for 42% of total billionaire wealth.

In contrast, a smaller cohort of 194 billionaires, each worth $10 billion or more, controls 41% of global billionaire wealth, or $5 trillion.

“The wealth of billionaires is increasing year-on-year, hitting the highest numbers on record,” said Maya Imberg, head of thought leadership at Altrata.

She credited compounding investment returns during economic growth periods for this accumulation, despite challenges such as inflation and geopolitical uncertainties.

Source: Wealth-X, an Altrata company, 2024

India leads in billionaire growth

India posted the fastest growth in billionaire numbers in 2023, with a 16% increase to 131 individuals.

Their collective wealth stands at $395 billion, making India the fourth-ranked country in billionaire wealth after the US, China, and Germany.

China, however, saw its billionaire count shrink by 15% to 304, with total wealth falling to $1.2 trillion.

Altrata attributes this decline to China’s slowing economy and underperforming stock markets, reflecting broader macroeconomic challenges.

Women billionaires gain ground globally

Female billionaires now account for 13% of the global total, numbering 431 individuals.

Among them, 38% inherited their fortunes, including Alice Walton, heir to Walmart, and Françoise Bettencourt Meyers, the world’s wealthiest woman and granddaughter of L’Oréal’s founder.

Interestingly, female billionaires are 1.5 times more likely than their male counterparts to own luxury real estate and 1.3 times more likely to invest in fine art.

Their portfolios also feature a higher proportion of privately held investments, often tied to multi-generational family businesses.

Self-made female billionaires are predominantly active in the financial services and technology sectors, while philanthropy and financial services are the most common areas of focus for female billionaires overall.

As the global billionaire population hits new records, the growing concentration of wealth at the top sparks debates about its broader economic and societal implications.

The post Billionaire boom: Wealthiest individuals are growing richer and more numerous than ever appeared first on Invezz

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Is Russia’s war economy sustainable or is it heading for disaster?

Russia’s economy is showing cracks as the country struggles to sustain its military operations in Ukraine.

Officially, Russia’s GDP grew by 3.6% in 2023, with similar growth expected this year.

However, this economic performance hides deeper problems caused by skyrocketing military spending, weapon production bottlenecks, and a labor market stretched to its limits.

As the war nears its third year, Russia’s financial and industrial systems are under immense pressure.

The defense budget alone will account for 6% of GDP in 2024, the highest since the Cold War.

Combined with security services spending, this amounts to 40% of the government budget.

At the same time, the central bank has raised interest rates to 21%, making it harder for businesses and consumers to borrow, with rates expected to rise further.

A tight labor market creates risks

Russia’s unemployment rate is at a record low of 2.4%, an unusual figure for a country at war.

Yet, this tight labor market signals significant challenges.

The Kremlin has redirected workers into the defense sector, with over 500,000 new employees in arms production and paramilitary roles since 2022. 

Additionally, the military requires 30,000 recruits each month to replace battlefield losses, forcing it to turn to unconventional sources like prisoners and North Korean soldiers.

These shifts leave civilian industries short-staffed.

Employers in non-defense sectors struggle to compete with the fivefold wage increases offered in defense-related jobs.

Rising labor costs have further fueled inflation, which now exceeds 8%.

Price hikes for essential goods like potatoes (+73%) and butter (+30%) are worsening living conditions for average Russians.

Weapon production cannot keep up

Russia is losing military equipment at unsustainable rates.

Analysts report monthly losses of 320 artillery barrels and 155 infantry vehicles.

Domestic production falls far short of meeting these needs, with only 20 artillery barrels and 17 infantry vehicles manufactured each month.

The country has turned to old Soviet-era stockpiles and imports, including artillery shells from North Korea, but these sources are depleting quickly.

Weapon production faces technical barriers as well.

Russia’s capacity to produce tank barrels and large-caliber cannons is limited by its reliance on specialized rotary forges, of which it has only two.

Each forge produces just 10 barrels per month, highlighting severe industrial constraints.

Without external assistance—such as from China, which has yet to commit its resources—Russia’s weapons shortages will likely worsen by late 2025.

Why are interest rates rising during wartime?

While most central banks aim to lower interest rates during conflicts to encourage spending, Russia’s central bank is taking the opposite approach. 

Interest rates now stand at 21%, compared to just 6% before the war.

This policy reflects a desperate effort to stabilize the ruble, which has fallen 10% against the yuan this year.

Maintaining the ruble’s value is critical because Russia relies on imports, especially from China, for key technologies like microelectronics used in drones, missiles, and tanks.

High borrowing costs are already taking a toll.

Mortgage volumes halved in July when subsidies ended, and corporate bankruptcies are up 20% this year.

Even state-aligned entities like the Russian Union of Industrialists and Entrepreneurs report that investment plans for 2025 are being postponed due to unaffordable financing.

Dependence on China grows

China has become Russia’s largest trading partner, supplying over 90% of its microelectronics and a third of all imports. However, this dependence creates vulnerabilities for Russia.

Unlike the US-UK alliance during World War II, where the US provided critical supplies through the Lend-Lease program, China’s support comes with demands.

Russia must pay for imports in yuan, making the ruble’s stability a key factor in sustaining military operations.

This reliance on China also limits Russia’s geopolitical flexibility.

While the recent BRICS summits have been used to project an image of strength, they underline how much Russia’s economy and military now depend on Beijing.

China accounts for over 60% of BRICS economic output, giving it significant influence over the bloc.

Lowering the nuclear threshold

Russia’s recent update to its nuclear doctrine raises new concerns.

The revised policy allows for nuclear strikes in response to conventional attacks that threaten the sovereignty or territorial integrity of Russia or Belarus.

This lowers the threshold for nuclear use, potentially escalating tensions with NATO.

The doctrine also includes a broader definition of mass attacks, such as those involving drones or cruise missiles.

The timing of this update coincides with Ukraine’s use of US-supplied ATACMS missiles to strike deep inside Russia.

Moscow considers such attacks to be part of a coordinated NATO effort and has warned that any further escalation could provoke direct retaliation.

Economic growth masks deeper problems

Although Russia’s GDP figures suggest resilience, the underlying picture is far less rosy.

Military-driven growth, or “military Keynesianism,” is unsustainable in the long term. 

Most new jobs are linked to defense and add little value to the civilian economy.

Inflation, high interest rates, and a shrinking private sector are eroding the foundations of Russia’s economic stability.

The International Monetary Fund (IMF) projects that Russia’s growth will slow sharply to 1.3% in 2025.

Even state-backed entities like VEB, Russia’s development bank, have cut growth forecasts to 2%.

With fewer resources for investment and a labor market strained by conscription, the outlook is bleak.

Is Putin running out of time?

Putin has a mountain to climb as he tries to sustain the war effort without crippling Russia’s economy. 

Dependence on China, weapon and labour shortages, as well as high borrowing costs are straining the country’s ability to maintain both military and domestic stability. 

The economic pressures are growing, and the cracks in Russia’s war economy are becoming harder to ignore.

The post Is Russia’s war economy sustainable or is it heading for disaster? appeared first on Invezz

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ProShares TQQQ ETF is about to explode higher if this happens

The ProShares UltraPro QQQ (TQQQ) ETF has performed well over the years, beating the Nasdaq 100 index by far. Data shows that the fund’s total return in the past five years stood at 327% compared to the Nasdaq 100’s 157%. 

The same trend has happened this year as the fund gained 53.90%, higher than Nasdaq 100’s 27%.

Technicals point to a TQQQ ETF surge

There are rising chances that the ProShares UltraPro QQQ ETF is about to go parabolic in the next few years if it rises above the key resistance level at $83.68. Moving above that level will be important because it will invalidate the double-top pattern that has been forming. 

A double-top is one of the riskiest patterns in the market. In this case, it brings the possibility that the ETF will drop by 36% to get to its neckline at $48.93, its lowest level on August 5 of this year. 

On the positive side, the ETF has been forming a multi-year cup and handle pattern, which is characterized by a rounded bottom and a consolidation or pullback at the top.

The TQQQ ETF peaked at $88.66 in November 2021 and then crashed to $15.95 in 2022 as technology stocks tumbled. Its lowest level turned into the lower side of the cup and handle pattern. 

It has now bounced back and is only 15% below the upper side of the cup pattern. It has also formed the handle section this year. 

Therefore, a move above the double-top’s level at $83.68 and the upper side of the cup at $88.65, will validate the C&H pattern and point to more gains. 

Technicians identify the target of a cup and handle by measuring the distance between the upper and lower side of the pattern. They then measure the same distance from the upper side of the cup. 

In this case, the distance between the lower and upper side of the pattern is 452%. If the index rises even by half of that, it means that the fund could soar to $290 in the coming years. 

Supporting the bullish case is the fact that the TQQQ ETF has remained above the 50-week and 200-week Exponential Moving Averages (EMA), which is a positive sign. 

Read more: TQQQ vs SQQQ: better ETF to buy as the Nasdaq 100 index falls?

Fundamental catalysts for the Nasdaq 100 

The TQQQ ETF also has several positive catalysts that could push it higher in the coming months. First, there is the recent Donald Trump election in the United States, which will usher in an era of low regulations and taxes. Technology stocks thrive when these conditions are met.

For one, analysts believe that the deregulation aspect will lead to more mergers and acquisitions (M&A) in the technology sector. 

Meanwhile, the Federal Reserve has started cutting interest rates as inflation has stabilized. It has slashed them by 0.75% this year, and analysts see more cuts in the coming months. In most periods, technology companies thrive when the Fed is slashing rates.

Additionally, companies are reporting strong earnings, signaling that there is a strong demand. For example, NVIDIA said that its revenues jumped to over $37.5 billion, beating analyst estimates. Its revenue jumped by 94% from the same period last year. 

NVIDIA’s profits also continued doing well as the earnings per share rose to 81 cents, higher than the expected 76 cents.

Data by FactSet shows that the blended earnings growth was 5.4%, the fifth consecutive quarter of growth. This earnings growth will likely continue in the coming quarters, which is a positive thing.

Read more: Nvidia Q3 earnings surpass expectations as AI demand drives record revenue

The post ProShares TQQQ ETF is about to explode higher if this happens appeared first on Invezz

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Avoid MicroStrategy stock: buy MSTU and MSTX ETFs instead

MicroStrategy stock price continued its strong rally, reaching its all-time high of $503 this week. MSTR has been one of the best-performing companies in Wall Street as it jumped by over 830% in the last 12 months, bringing its market cap to over $87 billion. 

MicroStrategy stock and Bitcoin

MSTR stock price is expected to continue rising on Thursday because of the ongoing Bitcoin price action. BTC price jumped above $97,000 for the first time ever, raising the possibility that the coin will get to $100,000 soon. 

Such a move will benefit MicroStrategy, a company that has been accumulating Bitcoins in the past few years. It has now added over 252,000 coins in its balance sheet, with a valuation of over $33 billion, a figure that is expected to continue growing. 

The main catalyst for the MicroStrategy stock is the view that Bitcoin price will continue rising in the longer term. Bitcoin has spent over 16 years to get to $100,000. Analysts believe that it will take a shorter period to get to $200,000. 

This is something that happens all the time. For example, the S&P 500 index took over five decades to rise from $44 to $1,000, which it reached in August 2010. It then spent just five years to hit $2,000. 

Similarly, the index jumped to $3,000 in 2019 for the first time ever. It has spent less than five years to hit $6,000.

The main catalyst for Bitcoin is the fact that more mainstream companies will continue allocating the coin as part of their treasuries. For example, news reports show that Michael Saylor, MicroStrategy’s founder, will talk to Microsoft’s board on how to incorporate Bitcoin in its balance sheet. 

If a big company like Microsoft does that, then other firms will follow in short order. Most of these firms may decide to either buy Bitcoin itself or spot Bitcoin ETFs, which have continued to gain traction among investors. Data shows that these coins have had a cumulative inflow of almost $30 billion. 

MSTU and MSTX are better assets

MSTU vs MSTX vs MSTR

Therefore, if you strongly believe that the MicroStrategy stock price has more room to run, it makes sense to invest in MSTU and MSTX ETFs. 

The T-Rex 2X Long MSTR Daily Target (MSTU) has accumulated over $2.8 billion in assets, while the Defiance Daily Target 2X Long MSTR ETF (MSTX) has $1.8 billion in assets. 

These funds have are created to track the daily price change of the MicroStrategy stock and then magnify it by 2x. As such, if MSTR stock rises by 1%, the two funds will rise by 2% on that day.

Similarly, if the MSTR share price falls by 1%, they will fall by 2%. As such, these funds always do well when MicroStrategy shares are firing on all cylinders. 

For example, the MSTX ETF has jumped by 310% in the last 30 days, while the MSTU fund has spiked by 321% in the same period. MicroStrategy shares have soared by 122% in the same period.

Read more: MSTU vs MSTX vs MSTU: Which is the better MicroStrategy ETF?

Therefore, if you are a strong believe in Michael Saylor’s vision, then it makes sense to invest in the two funds. 

These ETFs can be compared to the ProShares UltraPro QQQ ETF (TQQQ), which provides two times the returns of the Naadaq 100 index. Over time, the fund has done much better than the Nasdaq 100 index. For example, it has risen by 1,661% in the last decade, beating the Invesco QQQ which has jumped by 370% in the same period. 

The risk, however, is when the Bitcoin price suffers a harsh reversal, as it regularly does. If this happens, the losses in MSTU and MSTX ETFs will be magnified.

The post Avoid MicroStrategy stock: buy MSTU and MSTX ETFs instead appeared first on Invezz

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Business

Very bad news for the popular SCHD ETF

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%.

SCHD vs S&P 500 index

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.

The post Very bad news for the popular SCHD ETF appeared first on Invezz

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Opera stock price is rising: could OPRA jump 40%?

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.

The post Opera stock price is rising: could OPRA jump 40%? appeared first on Invezz

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Williams-Sonoma stock analysis: sky is the limit for WSM?

Williams-Sonoma (WSM) stock price is on track to have its best week on record after the American retailer published strong financial results and boosted its returns to shareholders. 

WSM shares have soared by over 32% this year and are hovering at their all-time high. This makes it one of the best-performing retailers since it has soared by 265% from its 2022 lows. This jump has brought its market cap to over $17 billion. 

Williams-Sonoma has been firing on all cylinders

Williams-Sonoma is an American retailer that has been ahead of its time. It was one of the first companies to embrace the internet and offer its products online. 

Today, while the company has hundreds of stores in the country, it generates most of its sales online. It has even become the 22nd biggest e-commerce company in the US, making it bigger than Fanatics, Lululemon, and Urban Outfitters.

Also, the company has done well by having brands that cater to most people. In addition to its eponymous brands, the company also owns other brands like Pottery Barn, West Elm, and Pottery Barn Kids & Teen. Pottery Barn is its biggest brand, accounting for over 50% of its total revenue. 

The company has a leading market share in the specialty furniture industry. Its annual revenue of $7.8 billion is more than twice that of RH, the second biggest player. It is also bigger than Crate & Barrel, Arhaus, Ethan Allen, and Serena & Lily, which made less than $4 billion last year.

The WSM stock price has done well, helped by its strong financial results as its annual revenue has soared to over $7.7 billion. 

Read more: Williams-Sonoma stock: is this future dividend aristocrat a buy?

WSM earnings

The most recent results showed that WSM’s comparable brand revenue dropped by 2.9% in the last quarter. Its operating margin rose to 17.8%, while its diluted EPS growth rose by 7.1% during the quarter.

Williams-Sonoma’s revenue came in at $1.8 billion, down from $1.85 billion. Similarly, the nine-month revenue was $5.2 billion, down from $5.4 billion. This decline is mostly because of the ongoing general consumer spending because of the relatively high inflation rate.

Pottery Ban’s revenue was $718 million, while West Elm, Williams Sonoma, and Pottery Barn Kids & Teens made $451 million, $252 million, and $287 million, respectively. 

The most important part of its report was the fact that the company boosted its forward guidance, citing resilient demand.  

Most importantly, the company announced that it will repurchase shares worth $1 billion, a substantial amount for a company valued at $1 billion. These repurchases have helped to reduce its outstanding shares over time. Shares have moved from 173.7 million in 2017 to 123 million today. This trend has helped to move its EPS rise from $1.65 to $7.3. 

The other potential catalyst for the Williams-Sonoma stock price is that it has become an undervalued company. It has a forward price-to-earnings ratio of 16.8, lower than the median industry of 19. 

Williams-Sonoma stock analysis

The weekly chart shows that the WSM share price has staged a strong bullish comeback. This recovery happened after the stock formed a double-bottom at $125.81, a popular bullish sign. 

It has also moved above the important resistance at $172.91, its highest swing in June and the previous all-time high. 

The stock has moved above the 50-week and 100-week Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) has moved to 65. 

Therefore, the path of the least resistance for the stock is bullish, with the next point to watch being at $200. The stop-loss for this trade is at $160.

The post Williams-Sonoma stock analysis: sky is the limit for WSM? appeared first on Invezz

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Very bad news for the popular SCHD ETF

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%.

SCHD vs S&P 500 index

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.

The post Very bad news for the popular SCHD ETF appeared first on Invezz

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Adani stocks plummet, bond offering pulled as Gautam Adani faces US bribery allegations: what’s next?

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’s groundbreaking bill seeks to ban under-16s from social media

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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