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The Market Loves When a Problem is Resolved… or Postponed

This story originally appeared on Zacks

The rebound rally that started yesterday afternoon continued on Thursday, as Congress agreed to a short-term debt ceiling extension. The major indices rose for a third straight session today and are now all in the green for the week as we get ready for the main event.The deal doesn’t solve the problem, of course, but it does delay the deadline to early December. Congress now has a lot more breathing room to get something done, compared to the October 18th deadline set by Treasury Secretary Janet Yellen. And investors can relax… about this issue at least.The NASDAQ rose 1.05% (or about 152 points) to 14,654.02. The index started this week with a more than 2% plunge on Monday as tech was getting shellacked, but it’s now up for the week heading into Friday. It’s all set for a nice reversal from last week’s stiff decline of more than 3%.The Dow rose 0.98% (or around 337 points) on Thursday to 34,754.94, while the S&P advanced 0.83% to 4399.76.“The bulls continued to buy into the relief rally as the debt ceiling issue is all but gone now. To follow up what I said yesterday, we are kicking the can down the road, but time is a negotiators friend,” said Jeremy Mullin in today’s Counterstrike. “I don’t think we go straight back to highs as there is too much supply chain risk for upcoming earnings.”Tomorrow is the main event of the week when the Government Employment Situation is released. The number could go a far way in helping the Fed decide when to start tapering asset purchases, which Chair Jerome Powell said “may soon be warranted” in late September. Last month’s report was surprisingly soft with only 235K jobs added, compared to expectations of more than 700K. The market sees about 500,000 jobs added in September. We’ve already received some positive jobs data recently, including today’s jobless claims number of 326,000 for last week. The result was better than expectations of 345K and an improvement on the previous week’s 364K. Furthermore, yesterday’s ADP employment report beat forecasts as well.Of course, these other reports are not necessarily harbingers of the big number tomorrow. So let’s see what happens…Today’s Portfolio Highlights:Commodity Innovators: A surge in fertilizer prices really turned things around for CF Industries (CF), which was almost stopped out not too long ago. But today Jeremy sold the stock for 21.2% in two months and considers it a “lucky win”. The new buy is American staple Deere & Company (DE), which you already know is the largest producer of agricultural equipment and manufacturing agricultural machinery. This Zacks Rank #1 (Strong Buy) reported a positive surprise of more than 18% in its last quarterly report, but shares are down about 15% from highs. That gives the editor a great entry point. He considers this a long-term hold and will collect a dividend of 1.25%. See the complete write-up for more on today’s action.Home Run Investor: This portfolio sold five positions earlier this week, so it’s got some space to fill. On Thursday, Brian picked up Timken Steel Corp. (TMST), which he considers “a little defensive in nature but also has good growth numbers”. This Zacks Rank #1 (Strong Buy) easily beat earnings estimates for three straight quarters, amassing an average surprise of 30% over the past four quarters. The editor also thinks that TMST has a great valuation, especially for a company that posted topline growth of 112% in its most recent report. Make sure to read the complete commentary for more on this new pick.  Counterstrike: Surging natural gas prices made a lot of money for Jeremy in his Commodity Traders portfolio… and now he plans to profit from the decline. The editor thinks that natural gas prices have topped out, so he bought a 5% position in ProShares UltraShort Bloomberg Natural Gas (KOLD) on Thursday. This inverse ETF moves opposite the commodity’s price. Jeremy warns that this move will be extremely volatile, but it will be a big winner if prices fall back under $5 (which he thinks will happen). By the way, the service also doubled its position in Roku (ROKU) by adding another 4%. The $300 level held and the editor believes it could get to $350 rather quickly. Read the full write-up for more on today’s moves.Options Trader: “But it all leads up to tomorrow morning’s Employment Situation Report by the Bureau of Labor Statistics. While last month’s miss, and persistent worker shortages, has generated some anxiety over this month’s report, the improvement that other labor force reports have shown this week bodes well for this one.”Tomorrow morning’s report is expected to show 475,000 new jobs were created last month (445K for the private sector and 30,000 for the public), while the unemployment rate is expected to have ticked down from 5.2% to 5.1%. But after Wednesday’s ADP report, many are going into the BLS report expecting a similar upside surprise. We shall see.”After the jobs report, the focus will shift to Q3 earnings, which is expected to show another robust quarter of corporate profits.” — Kevin MatrasSee You Friday,Jim Giaquinto
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Morgan Stanley (MS) Stock Sinks As Market Gains: What You Should Know

This story originally appeared on Zacks

Morgan Stanley (MS) closed at $98.80 in the latest trading session, marking a -0.3% move from the prior day. This change lagged the S&P 500’s daily gain of 0.83%.

– Zacks

Prior to today’s trading, shares of the investment bank had lost 4.32% over the past month. This has lagged the Finance sector’s loss of 1.34% and the S&P 500’s loss of 3.68% in that time.Investors will be hoping for strength from MS as it approaches its next earnings release, which is expected to be October 14, 2021. In that report, analysts expect MS to post earnings of $1.70 per share. This would mark year-over-year growth of 6.92%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.85 billion, up 18.82% from the year-ago period.For the full year, our Zacks Consensus Estimates are projecting earnings of $7.56 per share and revenue of $57.79 billion, which would represent changes of +14.89% and +19.9%, respectively, from the prior year.Any recent changes to analyst estimates for MS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.36% higher. MS is currently sporting a Zacks Rank of #3 (Hold).Looking at its valuation, MS is holding a Forward P/E ratio of 13.11. For comparison, its industry has an average Forward P/E of 11.2, which means MS is trading at a premium to the group.Also, we should mention that MS has a PEG ratio of 2.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Financial – Investment Bank was holding an average PEG ratio of 0.64 at yesterday’s closing price.The Financial – Investment Bank industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 40% of all 250+ industries.The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Okta (OKTA) Outpaces Stock Market Gains: What You Should Know

This story originally appeared on Zacks

Okta (OKTA) closed the most recent trading day at $233.96, moving +0.88% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.83%.

– Zacks

Heading into today, shares of the cloud identity management company had lost 11.97% over the past month, lagging the Computer and Technology sector’s loss of 7.26% and the S&P 500’s loss of 3.68% in that time.Wall Street will be looking for positivity from OKTA as it approaches its next earnings report date. The company is expected to report EPS of -$0.23, down 675% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $327.33 million, up 50.58% from the year-ago period.Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$0.75 per share and revenue of $1.25 billion. These totals would mark changes of -781.82% and +49.55%, respectively, from last year.Investors should also note any recent changes to analyst estimates for OKTA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. OKTA is currently a Zacks Rank #5 (Strong Sell).The Internet – Software and Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 237, which puts it in the bottom 7% of all 250+ industries.The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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I Was in a Coma and Couldn’t Pay My Credit Card Bills

There you are, living your best life, when a sudden sharp abdominal pain hits. It sends you to the emergency room. Before you know it, what should be a routine procedure turns into a medical fluke, and your stay in the hospital is extended from one week to three months.
This is what happened to me a few years ago when an appendectomy turned into a much more serious medical emergency — one that left me in a coma, in the intensive care unit for a few months. And while the physical and emotional strain I experienced was tough, the financial burden I was met with after my hospital stay was a uniquely difficult obstacle to tackle. I came home to unpaid credit card bills, late fees and a credit score that had plummeted.
The possibility of an unexpected hospital stay has become an all-too-familiar fear over the past two years for many. And during a medical emergency — whether COVID-related or something else entirely — one of the last things on your mind tends to be managing your bills or, in my case, paying off a credit card. But unpaid card payments add up quickly and can really hurt your credit score.
Here’s what to expect if you ever find yourself in a similar situation, what I did (or rather, didn’t do) to try to fix my plunged score, and what I would have done differently to undo all the damage.
My missed payments had serious consequences
When I emerged from my medical emergency and got home from the hospital, missed credit card payments weren’t at the forefront of my mind: I was focused on recovery. When I did have the mental capacity to face my finances, I had assumed that my mostly on-time, albeit not perfect, payments were enough to spare my credit score at least a little.
But the damage had been done: I had hundreds of dollars in late fees from almost four months of unpaid bills, and my credit score had plummeted by close to 200 points.
Unfortunately, a one-time delinquency is enough to put a significant dent in your credit score. This is because up to 35% of your score is determined by payment history. A late payment of more than 30 days can lower your score by as much as 100 points, even with a previously pristine credit history. Overdue payments can also impact your credit history for up to 7.5 years after the fact.
In addition to the late fees and ding to my score, I was charged a penalty APR. A penalty APR is an elevated interest rate, which can be up to two times your normal rate, that is applied to your balance. And while not all cards charge penalty APRs, those that do can charge you an elevated rate on new charges for up to six months.
Although I tried to undo the damage by getting back on track and making partial payments, my late fees, coupled with my new sky-high interest rate, made it costly and difficult to pay down my balance. Between this and the hospital bills I had racked up, I became overwhelmed and fell further behind on my credit card payments.
What I wish I had known 
NerdWallet writer Funto Omojola says she wishes she had known about credit card hardship programs after a medical emergency caused her to miss almost four months of payments.
When I was drowning in credit card debt, I had assumed that I didn’t have any options — that all I could do was try to pay what I could and that with time, things could hopefully be repaired. But what I didn’t know was that because my delinquencies were due to a medical emergency, there were options available that could have helped me more easily manage paying back what I owed and deal with the subsequent financial strain. And had I known these options were available to me, I would have immediately taken advantage of them.
Hardship programs can help
Some credit card issuers offer hardship plans that can help alleviate the financial burden brought on by emergencies like natural disasters, loss of income, unexpected illness or, as one would hope, a worldwide pandemic.
“(These) programs may include temporarily reducing interest rates, lowering minimum payments, waiving late fees, and/or extending due dates,” said Katie Ross, executive vice president of the nonprofit American Consumer Credit Counseling, in an email. But not all credit card issuers offer hardship plans, and even those that do don’t always clearly outline the process on their websites, she noted.
If your credit card issuer has not clearly stated on its website that it offers a hardship plan, don’t be afraid to call anyway to see what options it might be able to offer, Ross advised. To reach your issuer, dial the number on the back of your card.
Be prepared
Before you call, though, make sure you’ve worked out what to say and what to ask for.
“It’s important to prepare for the call ahead of time,” Ross said. “Be prepared to offer documentation explaining your financial issues.”
In the case of my medical emergency, for instance, I would have needed to provide a clear explanation of my hospitalization, how it caused my initial delinquency and my subsequent inability to pay my balance, and what type of assistance I needed, among other things.
Understand the terms
It’s important to note that not all hardship requests will be granted and that even for those who are able to enroll in a program, what is offered will differ based on each individual borrower’s circumstances.
“There is no one-size-fits-all hardship program that credit card companies offer everybody,” Ross said.
For example, American Express states on its website that eligibility in its financial relief program will be determined by “delinquency status, prior enrollment in the program or the balance on your card account.” Terms apply.
Once you’ve signed on to a relief plan, it’s important to get your agreement in writing. Some programs charge fees or come with conditions on card usage and length of program enrollment, so understanding your specific terms is crucial.
It’s OK to take a second to breathe before diving in
Being met with a large financial burden after my hospital stay was challenging. I didn’t feel like I had a full enough grasp on my recovery, much less on how to handle the debt I was faced with.
“The first step in managing the potential financial toll is taking the time to just recognize, ‘Are you OK?’” says Aja Evans, a financial therapist. “And usually the answer is probably gonna be no, but give yourself the time to just process that.”
Once you’ve taken the time you need to tend to yourself physically and emotionally, making a plan can help to further alleviate the stress of tackling what’s ahead of you.
“If you have a plan for how you’re gonna pay back the debt, it’s gonna be a lot easier to navigate it emotionally,” Evans says.
Alternative options
If you’re unable to enroll in a hardship plan or your card issuer doesn’t offer one, there are alternative steps you can take to ease your debt.
Talk to a credit counselor
Credit counselors from nonprofit credit counseling agencies can advise you on what your options are. They’re able to create a tailored plan for tackling your credit card debt. “They could enroll you in a debt management program to help you pay off that debt,” Ross said. “And in these programs, interest rates are lower and late fees are typically waived.”
Balance transfer credit cards
A balance transfer allows you to move debt from a high-interest card to a new account that charges lower interest, which can make it less costly and faster to pay off your debt. The best balance transfer cards come with $0 annual fees as well as lengthy introductory 0% APRs. Note, however, that these kinds of cards typically require good to excellent credit, which may be a tough hurdle to clear if your credit has already been dinged. These cards also generally charge a balance transfer fee, usually 3% to 5% of the total amount transferred.
Add a consumer statement to your credit report
Ross suggested adding a consumer statement to your credit report, which can help to explain why you missed or made late payments on your credit cards. “This won’t have any impact on your credit score, but that notation could help lenders understand your situation,” she said.
Statements are limited to 100 words or less and can include as much or as little detail as you deem appropriate for your specific situation.
“These statements can be as simple as ‘I was unable to make payments on this account due to the fact that I lost wages during the COVID-19 pandemic,’” Ross said.
Typically, you can submit your statement by mail or online, although the process differs across the three major credit bureaus. To submit one through Equifax, for example, you can physically mail in your statement to the bureau or add it to your consumer report online.
Photos courtesy of Funto Omojola.
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The article I Was in a Coma and Couldn’t Pay My Credit Card Bills originally appeared on NerdWallet.