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Healthcare Stocks May Save Your Portfolio

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Apple (AAPL) stocks have declined by more than 20 percent this year. Concerns about sluggish profit growth and a faltering economy have severely impacted the FAANGs (Facebook -now Meta, Apple, Amazon, & Google) of Big Tech and other momentum stocks. In this dismal market for the Nasdaq and S&P 500, however, numerous blue-chip healthcare firms have shown substantial gains.

Merck (MRK) and biotechnology leader Amgen (AMGN) are among Dow’s best performers. McKesson (MCK), Vertex (VRTX), Eli Lilly (LLY), and Cigna (CI) are S&P 500 winners as well. Bristol-Myers Squibb (BMY), Eli Lilly (LLY), and Humana (HUM) are all near record highs.

Notably, these are not the large Covid vaccination supplies either. Pfizer (PFE), BioNTech (BNTX), Moderna (MRNA), and Novavax (NVAX) have all decelerated in 2022 after seeing significant price increases in 2021. Gilead (GILD) and Regeneron (REGN) are also in the red this year as antiviral medicine manufacturers.

The present economic cycle is more influential than the epidemic in driving the big rise of other healthcare firms. During turbulent times, health care equities frequently perform well. Even during a recession, they are viewed as reliable enterprises that deliver products and services that consumers require.

In addition, a number of market leaders in the healthcare industry provide substantial dividends and are relatively inexpensive relative to the rest of the market.
In a recent analysis, UBS Global Wealth Management’s chief investment officer for the Americas, Solita Marcelli, stated that healthcare is trading at an appealing valuation for a late-cycle environment.

Since 2003, she said, global healthcare companies have tended to outperform the overall market by more than 6% when the manufacturing sector is in decline. (The May reading of the ISM Manufacturing Index was the second-lowest since May 2020.)

An economist and portfolio strategist at New York Life Investments, Lauren Goodwin, noted in a study that “as long as economic growth remains in flux,” investors should continue with quality equities with a “defensive bent.” In addition to healthcare, she mentioned utilities and real estate as two more sectors noted for their high payouts.

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An increase in mergers could also benefit the healthcare industry. This year, Pfizer, Bristol-Myers Squibb, and GSK (previously Glaxo Smith Kline) announced multi-billion-dollar agreements.

There are inherent hazards. Depending on the outcome of the midterm elections, regulators and legislators may scrutinize healthcare corporations more closely. If Republicans win control of the House and Senate, the future of the Affordable Care Act (Obamacare) and its impact on prescription pricing could be called into question.

However, as long as the Federal Reserve continues to rapidly raise interest rates and investors remain concerned about inflation, healthcare stocks may continue to do well regardless of what occurs on Capitol Hill.

The stock market has experienced a flight to quality, according to Edward Campbell, co-head of the multi-asset team at PGIM Quantitative Solutions. “I’m not surprised to see more classically defensive sectors like healthcare continue to do well.”

Fears of a recession are mounting as a result of rate hikes, soaring oil and gas prices, and housing market problems. However, one of the most vital aspects of the US economy, the job market, remains robust.

In the middle of the Great Resignation, workers are in the proverbial driver’s seat, commanding substantial compensation as firms struggle to hire staff. But could the job market be about to take a turn for the worse as well?

Friday, the government releases June payroll data. The statistics will conclude a week filled with employment-related headlines, including weekly unemployment figures, monthly reports from payroll processor ADP regarding private-sector jobs, and the government’s job openings and labor turnover (JOLTS) survey.

Economists predict that 295,000 new jobs were created in June. This is still a strong number, although it is lower than the 390,000 jobs added in May and the revised increase of 436,000 jobs in April.

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The unemployment rate is projected to remain stable at 3.6%, but it is likely to gradually begin to rise. According to forecasts made at the Fed’s most recent meeting earlier this month, members of the central bank anticipate that the unemployment rate would end this year at 3.7%, rise to 3.9% in 2023 and reach 4.1% in 2024.

Obviously, this is still historically low. As pay growth begins to stall, though, there are concerns that American workers won’t be able to keep up with soaring inflation. The average hourly wage increased by 5.2% year-over-year in May, down from 5.5% in April.

Economists, investors, and job searchers will closely monitor the June data to determine if wage growth has deteriorated further.

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Meta Is Fined $275 Million By The Irish Data Privacy Authorities

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In a data breach that occurred in 2019, Meta was issued a fine of approximately $275 million by Ireland’s data privacy commission for its failure to prevent hackers from stealing the personal information of more than 500 million Facebook users.

The announcement made on Monday marked the fourth time in about a year that Facebook (FBparent )’s corporation had been punished by the Irish Data Protection Commission. The Irish Data Protection Commission is the major privacy regulator monitoring Meta’s operations in Europe. According to the commission’s statement, the decision to issue the fine was reached on Friday of last week.

Meta has been hit with fines totaling 912 million euros by the Data Protection Commission of Ireland (DPC) since the fall of 2021. The DPC is pursuing the social media giant and its other subsidiaries, Instagram and WhatsApp, for alleged violations of the General Data Protection Regulation, which is Europe’s signature data privacy law (GDPR).

In the early fall of this year, Meta was handed the second-largest GDPR fine in history, which was for the way in which Instagram handled the data of children. The fine was 405 million euros. Additional enforcement procedures, which took place in March 2022 and September 2021, respectively, resulted in the imposition of fines totaling 17 million and 225 million euros.

A representative for Meta issued a statement on Monday stating that the company was “seriously” analyzing the decision made by the DPC and that it had cooperated fully with the investigation being conducted by the agency. The investigation was kicked out in April of last year after it was reported by Business Insider that the personal information of more than half a billion Facebook users had been published on a hacker website. At the time, Facebook stated that hostile actors had used its contact importer tool in order to match known phone numbers to the accounts of Facebook users before extracting more information from their profiles. According to a statement released by Meta on Monday, “Protecting the privacy and security of people’s data is crucial to how our business works.” [Citation needed] “During the time in question, we implemented a number of changes to our systems, one of which was the removal of the capability to scrape our features in this manner by using phone numbers. The scraping of data without authorization is against both our policy and our terms of service, and we will continue to collaborate with our competitors to find a solution to this industry problem.

This judgment was made by the Irish Data Protection Commissioner in the midst of widespread criticism from privacy activists who claim that regulators have proceeded slowly and tentatively to enforce GDPR, which became law in 2018.

Privacy regulators in Luxembourg issued a punishment of 746 million euros to e-commerce giant Amazon (AMZN) in accordance with the General Data Protection Regulation (GDPR) last year. They did so on the grounds that the manner in which Amazon processes personal data is in violation of the law. Amazon (AMZN) is attempting to get the penalty overturned.

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Musk Alleges Apple “Threatening To Withhold” Twitter From Its App Store

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Elon Musk said that Apple has “threatened” to remove Twitter from its iOS app store, which might devastate the $44 billion firm he acquired.

Musk tweeted Monday that Apple (AAPL) and its CEO had threatened to remove Twitter from its App Store without explaining why.

Musk tweeted that Apple had basically discontinued Twitter advertising. “Do they detest free speech in America?” he asked, referring to his repeated calls for platform free speech. “What’s up, Tim Cook?” Musk tweeted again. He also blasted Apple’s scale, “restriction,” and 30% transaction fee for large app creators in its app store.

Musk’s tweetstorm emphasizes his tense relationship with Apple, which along with Google controls mobile app distribution. Before taking over Twitter, the Tesla CEO stated he explored selling the firm to Apple, but Cook refused to meet with him. Twitter, which has lost advertisers since Musk’s takeover and struggled to grow its subscription business, would suffer if it were removed from Apple’s or Google’s app stores.

Musk’s tweets were unanswered by Apple. The business has already indicated it’s willing to delete apps from its app store over worries about their ability to filter dangerous content or if they attempt to evade the cut Apple takes from in-app sales and subscriptions. After the US Capitol attack, Apple withdrew Parler, a conservative app, from its app store over concerns about its capacity to recognize and filter hate speech and incitement. After improving its content moderation, Apple reinstated Parler three months later.

Apple’s app store review criteria require apps to prevent “material that is unpleasant, insensitive, distressing, intended to disgust, in extraordinarily poor taste, or just plain creepy” such hate speech, pornography, and terrorism. The guidelines declare that the App Store is not the place for apps that shock and offend.

After extensive layoffs and large employee departures, civil society groups, researchers, and industry watchers have voiced worries about Twitter’s ability to monitor dangerous content and keep the network safe. Musk also wants to promote “free expression” on Twitter by restoring banned or suspended accounts. Musk has tweeted a conspiracy theory and other controversial messages since taking over Twitter.

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Since becoming CEO, Musk, a prolific and aggressive tweeter, has continued. He claims engagement has compensated for revenue losses. The objective appears to be persistently targeting enemies of his or “free speech.” Cook was questioned in an interview earlier this month if Twitter might alter to make Apple remove it from the app store. “They say they’ll moderate and so… “I trust them,” Cook said. Because no one wants hate speech on their platform. I expect them to continue.”

Last week, Twitter’s former head of trust and safety, Yoel Roth, who departed the business earlier this month, wrote in the New York Times that app store operators had started calling Twitter after Musk’s takeover. Roth called violating Google and Apple’s app store guidelines “catastrophic.”

Last Sunday, Apple app store boss Phil Schiller canceled his Twitter account.

Apple ran Black Friday adverts on Twitter on Thursday, though their relationship is unclear.

As the economy has weakened, many corporations have cut digital ad expenditure, and Twitter has likely always been a modest part of Apple’s budget. If Musk succeeds in converting Twitter’s core business to subscription revenue and needs to give Apple a 30% cut, Apple’s impact on Twitter may be considerably greater.

Musk tweeted, “Apple charges a concealed 30% tax on anything you buy through their App Store?” In another tweet, he showed a motorway exit with two lanes: “pay 30%” and “go to war.” Elon’s ancient automobile slid toward him.

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Returning Disney CEO Bob Iger Outlines His Objectives

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After shocking the media industry with his return as CEO of Disney the previous week, Bob Iger visited the company’s headquarters on Monday to speak with employees for the very first time since making the announcement.

Iger addressed a variety of concerns that have been raised about the corporation, including the current hiring moratorium at Disney and the areas of concentration for the Disney+ streaming service that he has in mind. In addition to this, he emphasized that the most important thing for him to focus on as he regains control is creativity.

During a town hall meeting held at the company’s headquarters in Burbank, California, Iger informed staff that Disney’s hiring freeze would continue to be in effect – at least for the time being. His predecessor, Bob Chapek, made the announcement of the hiring freeze at the beginning of this month. Iger took over as CEO of Disney after Chapek, whose time in that role was brief but fraught with conflict. Iger has stated that maintaining the freeze is the “sensible thing to do” in light of the issues that are now facing the corporation. When addressing Disney’s overall “cost structure,” he also said that the length of time the employment freeze will be in effect will be a consideration for him.

The announcement of Iger’s return comes at a time when Disney is facing a great deal of hardship and criticism across its entire media empire. Disney is currently facing challenges in both the film and television industries. This includes a share price that has remained flat during the entire year as well as a streaming business that is expanding but is still losing money. Iger stated that when he departed the firm a year ago, Disney’s performance in streaming was being judged by a variety of criteria; nonetheless, growth was the primary element being considered. Since then, the emphasis has switched to “the bottom line” and “how much we are losing and when we will be profitable,” according to Iger’s statement.

He stated that the corporation should begin “chasing profitability” rather than “chasing subs with aggressive marketing and aggressive spend on content.” He stated that in order for Disney to accomplish this goal, the company must do a “very, very serious look” at the cost structure of all of its companies. However, Iger emphasized that “creativity” should be the primary focus of the corporation, as the returning CEO already stated that this endeavor will be his top priority.

Iger was asked about Disney’s creative muscle, and he responded by saying, “A number of you who worked with me know I’m obsessed with that.” “However, there is a logic behind my fixation on that. It is the engine that keeps the business going.

Iger stated that the quantity of content that Disney develops is not as important as the “greatness of the things that we do make.”

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Iger wasted no time in making his stamp on the corporation and did so immediately. Soon after it was announced that he would be taking over as CEO, he reorganized Disney’s content distribution structure and announced that Kareem Daniel, chairman of the company’s Media and Entertainment Distribution unit, would be leaving Disney. Kareem Daniel had been the person responsible for overseeing the distribution of Disney’s content.

Iger tweeted a picture of Disney’s offices early on Monday morning, which was his first day back on the Walt Disney Studio lot. He captioned the image with the phrase “full with gratitude and delight to be back.”

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