ARMRA | June 18th, 2024

Today's insights are courtesy of ARMRA Colostrum™, it protects, rebuilds, and strengthens your body’s barriers for defense against everyday threats and enhanced vitality.

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GOOD MORNING

Here's everything you need to know today: Goldman Sachs has boosted its S&P 500 year-end target to 5,600 amid strong tech earnings and enthusiasm for AI. This upward revision highlights the significant impact of major tech stocks like Microsoft, Nvidia, and Google, which now comprise 25% of the S&P 500 equity cap.

China is outpacing the U.S. in the nuclear energy race, with 27 reactors under development. This rapid progress exposes the U.S. as lagging by 10-15 years in deploying next-generation atomic reactors, highlighting significant challenges and opportunities for the U.S. in the global energy race.

The IRS has set its sights on wealthy tax dodgers, aiming to recoup $50 billion over the next decade. This initiative signals heightened scrutiny on high-net-worth individuals and corporations employing complex tax strategies, as the Biden administration intensifies efforts to address tax avoidance and reduce the deficit.

Let’s dive into more detail below.

INDICIES

Goldman Sachs Boosts S&P 500 Year-End Target to 5,600 Amid AI Enthusiasm

The impact of AI and strong tech earnings leads Goldman Sachs to boost its S&P 500 target to 5,600, signaling investor optimism

BREAKING NEWS
Even with the S&P 500 hitting all-time highs last week, Goldman Sachs has increased its 2024 year-end target to 5,600, driven by strong earnings growth from major tech stocks and heightened enthusiasm for AI.

This upward revision highlights the impact of Microsoft, Nvidia, Google, Amazon.com, and Meta Platforms, which have surged by 45% collectively and now comprise 25% of the S&P 500 equity cap.

WHAT HAPPENED
Goldman Sachs’ decision to raise its year-end target for the S&P 500 to 5,600 signifies an overall positive market outlook, supported by robust earnings projections for leading tech companies that have fully embraced AI. The brokerage emphasized the upward revisions in consensus 2024 earnings estimates for these tech giants, along with increased valuation multiples driven by ongoing advancements in AI technology.

The brokerage also noted that the upcoming U.S. presidential election could introduce short-term volatility. Historically, such fluctuations tend to stabilize post-election, allowing the S&P 500 to recover and climb higher. Historically, returns have tended to be somewhat muted in the 10 months leading up to presidential elections, but the S&P 500 has still delivered positive returns more often than not during this period.

Evercore ISI’s upgrade of the information technology sector to “outperform” highlights the structural demographic trends and the persistence of AI enthusiasm that are expected to benefit the sector.

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NUCLEAR

China Outpacing U.S. in Nuclear Energy Race

China’s rapid progress in nuclear energy, with 27 reactors under development, exposes the U.S. lagging behind by 10-15 years

BREAKING NEWS
The power of nuclear energy has carried a certain stigma since the United States unleashed it on Hiroshima and Nagasaki in 1945. Since then, the U.S. has hesitated to fully embrace nuclear energy, resulting in a significant lag behind China in deploying next-generation atomic reactors. A recent report indicates that the U.S. is now 10 to 15 years behind China in this crucial field.

This gap highlights significant challenges and opportunities for the U.S. in the global energy race.

WHAT HAPPENED
The Information Technology and Innovation Foundation’s report underscores China’s rapid advancements in nuclear energy. With 27 reactors under development, China is leading globally, taking just seven years on average to bring each reactor online. This accelerated progress is driven by a coherent national strategy, which includes low-interest financing, feed-in tariffs, and streamlined regulatory approvals.

Between 2008 and 2023, China’s share of nuclear patents surged from 1.3% to 13.4%, leading the world in atomic fusion patent applications. Despite the U.S. being the top country for nuclear power generation, with 94 reactors contributing to one-third of global output, its progress has stalled. It has only built two new reactors in the past decade, which have been significantly delayed and over budget.

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POLITICAL

IRS Sets Sights on Wealthy Tax Dodgers Seeking to Recoup $50 Billion

While the move is likely to generate headlines and political debate, its impact on the stock market and the almost $35 trillion national debt will likely be minimal

BREAKING NEWS
Under the Biden administration, the IRS announced plans Monday to close a tax loophole exploited by wealthy individuals and corporations. The goal is to generate $50 billion in additional revenue over the next decade.

This initiative has significant implications for high-net-worth individuals and corporations employing complex tax strategies, as it signals heightened scrutiny and potential changes to tax liabilities.

WHAT HAPPENED
Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel championed this seemingly strategic political move from the Biden administration. It reflects the administration's broader commitment to addressing tax avoidance and reducing the deficit. Ultimately, it builds upon the IRS's ongoing efforts to intensify audits on high-income earners, large corporations, and complex partnerships.

The agency estimates that the targeted loophole, which allows for asset transfers between entities for seemingly non-economic purposes, enabled the top 1% of earners to avoid $a160 billion in taxes between 2010 and 2019. This practice, deemed a "shell game" by Deputy Treasury Secretary Wally Adeyemo, highlights the administration's focus on ensuring greater tax fairness and holding wealthy taxpayers accountable. However, the proposed changes have sparked debate, with Republicans and conservative lawmakers criticizing the increased IRS funding and vowing to curtail it, setting the stage for a potential political showdown over tax policy and enforcement.

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1. Philip Morris suspends nationwide sales on Zyn.com after D.C. subpoena

Philip Morris has halted sales on Zyn.com after Swedish Match North America, acquired in a $16 billion deal in 2022, received a subpoena from D.C.'s Attorney General. The subpoena requests information on compliance with D.C.'s 2022 ban on flavored tobacco sales, reflecting increased scrutiny amid shifting consumer preferences and regulatory pressures.

2. Volvo hints the EX30 could be exported from Belgium to the US to avoid new EV tariffs

With new tariffs on EVs made in China, Volvo is considering exporting its EX30 model from Belgium to the US. The company criticizes the EU's tariff decision, stating it will negatively impact the industry and consumers.

3. Pizza Hut has abruptly closed 15 restaurants - with 129 more at risk

Pizza Hut has suddenly closed 15 of its locations, with an additional 129 at risk of closing due to a significant financial dispute with one of its major franchisees.

4. Boeing chief executive faces Senate hearing amid investigations

David Calhoun, Boeing’s chief executive, is set to face a Senate hearing where lawmakers are expected to question him about the company's recent quality control issues and ongoing investigations.

5. Tesla reportedly delays Cybertruck deliveries because of windshield wiper issues

Tesla has reportedly delayed deliveries of its Cybertruck due to problems with its unique, large windshield wiper, which is failing and causing the motors to burn out.

6. Apple Pay Later is dead, long live Affirm loans

Apple has confirmed the discontinuation of its Apple Pay Later service, only two years after its announcement, marking a shift in the company’s approach to consumer financing.

7. FTC sues Adobe for allegedly hiding fees, making it tough to cancel subscriptions

The Federal Trade Commission has filed a lawsuit against Adobe, accusing the company of hiding termination fees and making it difficult for customers to cancel subscriptions, targeting deceptive business practices.

8. Nationwide Insurance to non-renew 100,000 pet insurance policies

Nationwide Insurance plans to non-renew about 100,000 pet insurance policies due to rising veterinary care costs, following similar actions by other insurance companies.

9. FDA approves Merck vaccine designed to protect adults from bacteria that can cause pneumonia, serious infections

The FDA has approved a new Merck vaccine that protects against 21 strains of bacteria responsible for pneumococcal disease and pneumonia, providing a significant advancement in adult immunization.

10. Kansas AG Kobach accuses Pfizer of misleading vaccine marketing in lawsuit

Attorney General Kris Kobach has filed a civil lawsuit against Pfizer, alleging the company engaged in deceptive marketing practices regarding its COVID-19 vaccine. The lawsuit claims Pfizer violated Kansas's Consumer Protection Act by misrepresenting the efficacy and safety of the vaccine.

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Today's insights are courtesy of ARMRA Colostrum™, it protects, rebuilds, and strengthens your body’s barriers for defense against everyday threats and enhanced vitality.

Learn More ➔