NewsWatch: Stocks push higher, fresh records in sight, as earnings and service-sector data surprise to the upside

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U.S. stocks rise Wednesday as corporate earnings results surprised to the upside and rosy service-sector data outweighed a disappointing jobs report from payroll provider ADP. See full story.

Trump suddenly supports mail-in voting — for the key swing state of Florida

After weeks of bashing mail-in voting and even suggesting the 2020 election should be delayed. President Donald Trump has changed his tune — at least when it comes to the critical swing state of Florida. Now he’s for it. See full story.

White House, Democrats agree to try to reach coronavirus-aid deal by week’s end

After more than a week of almost daily face-to-face meetings, Trump administration officials and congressional Democratic leaders have agreed to try to reach a deal by the week’s end. See full story.

Disney shakes up streaming approach after losing nearly $5 billion due to pandemic

Walt Disney Co. is doubling down on streaming after reporting a quarterly loss of nearly $5 billion Tuesday amid a pandemic that has all but paralyzed its theme parks, live productions and cruise line. See full story.

Kodak shareholders were not the only beneficiaries of the sudden stock surge — holders of convertible bonds also saw tidy gains

Eastman Kodak Co.’s share price rally after news of a $765 million government loan to help it make drug ingredients at its U.S. factories has offered shareholders and executives with stock options a tidy windfall. But they’re not alone. See full story.

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COVID-19 gives us an opportunity to take care of our people See full story.

Where Should I Retire?: I want to retire in Texas and near freshwater on $4,000 a month — where should I go?

Dear MarketWatch,

I want to retire to Texas. I will be moving from Maine within the next five years and would like a location that has freshwater and some national or state parks. I estimate my monthly retirement income in the range of $3,750 to $4,200. I will be buying a house and selling the one in Maine. Some of the equity will be used for college.

I would like a good hospital and airport within a one-hour drive. Live entertainment would be a plus!

What have you got for me?

Much appreciated!

Rachel

Dear Rachel,

Join the line of people heading to the Lone Star State — about 1,500 every day in 2018. There are many reasons for the state’s popularity, and you know your reasons best. Just a word of caution: Maine to Texas is quite a temperature switch, so consider investigating your possibilities during the summer. Texas is hot, hot, hot that time of year, and you don’t want to discover you hate the weather after you’ve paid for a move.

But assuming you’re good with 100-degree days, you can certainly find places that offer what you are looking for, all with different personalities. As always, some places that sound great on paper may not look as appealing in real life. I can’t stress enough the importance of treating your exploration time as if you were living there, not just visiting on vacation.

Taxes can be a big focus for retirees, and Texas appeals to many because it doesn’t have a state income tax. (Maine, by the way, won’t tax your Social Security check.) While the overall tax burden is low, sales tax and property taxes are on the higher side.

You say you want to use some of the money from selling your Maine house for college. Depending on the school you pick, you may qualify for reduced or even free tuition as a senior citizen, freeing up some of your budget.

Speaking of budget, be honest about what you’ll be spending more on, not just how you’ll be cutting some costs by leaving Maine. The last thing any of us want in retirement is to be unnecessarily squeezed.

Read:There is more to picking a place to retire than low taxes — avoid these 5 expensive mistakes

Also:Health care will cost this much in retirement — but probably even more

Ready to look? Here are three options that give you a lake nearby:

New Braunfels’ Gruene Hall is the oldest dance hall in Texas.

Jim Flynn/Courtesy New Braunfels CVB
Texas Hill Country

This is the area between Austin and San Antonio and includes plenty of state parks. If the sale of your home in Maine means you’ve got the money to afford a lake house, why not consider Canyon Lake in what’s dubbed the Hill Country Coast? More than 20% of the 21,000 residents there are 65 and older. The drawback is you’ll have a longer drive to college classes, airports and hospitals.

If it’s city living you want, look at New Braunfels, 30 minutes away on the Comal and Guadaloupe rivers, home to 90,000 people and with easy interstate access to both Austin and San Antonio. (The name is a hint that the town was founded by German immigrants.)

Live entertainment? Among other choices, you’d have Gruene Hall, Texas’s oldest dance hall and a spot for live music every day. And in how many other places can you still find a drive-in movie theater?

You can take your college classes at Texas State University in San Marcos, 20 minutes from New Braunfels. Texas State has 38,000 students and will let you earn up to six credits per semester for free if you are at least 65 years old. (You can audit classes at no cost too, without a limit on credit hours.)

Other options are the University of Texas at San Antonio, less than an hour from either New Braunfels or Canyon Lake, and the University of Texas at Austin, less than an hour from New Braunfels. These two big schools also offerauditing options.

While New Braunfels has a hospital, you could also go to San Antonio or Austin for care.

To get a sense of the housing your money can buy, here’s what’s on the market now in Canyon Lake and New Braunfels, using listings from Realtor.com (which, like MarketWatch, is owned by News Corp.).

Conroe

This fast-growing city of nearly 90,000 is 40 miles north of Houston and abuts Lake Conroe, a 33-square-mile lake, and is close to Sam Houston National Forest. With Lone Star College nearby, you can claim that same fee waiver for six credit hours per semester. Texas A&M University is 65 miles away in College Station.

Locals say Conroe still has a small-town feel, but its status as the seat of Montgomery County means it also has a bustling, historic downtown. You’ll find antique stores and craft brewers there too. And while you can live in a neighborhood, you could also opt to find a home with more land.

Here’s what’s on the market now.

For entertainment, you don’t need to go all the way to Houston. If the historic Crighton Theatre doesn’t have what you’re looking for, you can head to The Woodlands, a planned community in the southern end of the county with an amphitheater that draws big names. While this community of 100,000-plus has an upscale reputation (and upscale shopping in its downtown), there are some homes at lower price points. It’s also more densely populated than Conroe, if that’s more your style.

You play an instrument? Check out the local symphony orchestra, a mix of professionals and amateurs. If you like to golf, you’ll have plenty of choices. The Chamber of Commerce counts more than 20 public and private courses in the county. But Conroe isn’t a retiree haven, although it does attract plenty of snowbirds. About 13% of the city and county population is 65 and older, less than the U.S. average.

Obviously there are plenty of amenities in Houston, including an international airport and big-name hospitals. And if Conroe or The Woodlands isn’t for you, you’re likely to find something in the wider Houston metro area.

A mural outside Andy’s Bar, one of dozens of murals painted on buildings in Denton, Texas.

Victoria DeCuir/ Courtesy Denton Public Library
Denton

You have plenty of options in the Dallas-Fort Worth area as well. But look at rapidly growing Denton. The appeal of this city and its 140,000 residents includes the University of North Texas (39,000 students) and Texas Woman’s University (coed and another 13,000 students), both with the ability to take classes for free at age 65, as well as a lively downtown and music scene (the free Denton Arts and Jazz Festival attracts hundreds of thousands every year). And yes, living here offers access to top-quality hospitals.

Some like to make comparisons to Austin of a few decades back, with one DFW resident saying downtown Denton has a “hippie dippy college town vibe.” Outside of downtown, however, the feeling is much more suburban.

Denton also stands out among neighboring cities that were just farms a few decades back and are now planned communities, given that it has some older housing stock. You still find Texas horse country and small towns to the north and west. However, empty land is rapidly filling up, and it’s only a matter of time until the DFW megapolis fills the I-35 corridor up to the Oklahoma state line.

As for fresh water, you’d be close to Ray Roberts Lake State Park and a nearly 46-square-mile lake.

A walking and biking trail, the 19-mile A-train Rail Trail connects Denton to similarly sized Lake Lewisville. The trail in part parallels the A-train that connects to Dallas County’s rail network, getting you to downtown Dallas and beyond. If you’re driving, it’s about 30 miles to Dallas/Fort Worth International Airport and 36 miles to Dallas Love Field.

To get a sense of the housing market, here’s what’s on the market now.

Now read:I’m 52, won’t live past 80 and have $1.6 million. ‘I am tired of both the rat race and workplace politics.’ Should I retire?

The Ratings Game: For Nikola stock, no news was not good news

Wall Street sold off shares of Nikola Corp. on Wednesday, disappointed that the company had no major announcements to take the sting out of a disappointing second quarter.

Nikola NKLA, -10.00% shares extended losses on Wednesday, a day after the electric-vehicle maker reported a wider-than-expected adjusted quarterly loss and said the COVID-19 pandemic disrupted its supply chain.

Shares traded as low as $32.15, down as much as 17%, before recouping some losses. The stock is on track for its largest one-day percentage drop since July 24, when it fell 12%. Wednesday’s drop also snaps a three-day winning streak and whittles year-to-date gains to 234%, which compare with gains of around 3% for the S&P 500 index. SPX, +0.50%

“The company did not report any meaningful new business development along with its 2Q earnings, likely putting large pressure on the stock price today,” Emmanuel Rosner at Deutsche Bank said in a note Wednesday.

Related:Fisker is going public: Five things to know about the electric-car maker ahead of its IPO

It confirmed, however, it is “well on track” to deliver “critical” milestones over the next few months, including lining up an OEM manufacturing partner for its Badger pickup truck and commercial collaboration partners for its hydrogen stations, and some of the arrangements could be formally announced soon, Rosner said, keeping his rating on the stock at hold.

“They seem to involve industry leaders in their respective fields (large commercial fleets, leading pickup manufacturers, global energy companies) which if finalized, could provide solid external validation for Nikola’s business plan,” Rosner said.

Analysts at J.P. Morgan led by Paul Coster, said that Nikola’s second-quarter results “basically met expectations.” With the catalysts ahead, “we therefore recommend accumulating shares in NKLA.”

Don’t miss:Here’s how much Ford stock has lost under outgoing CEO Jim Hackett

The analysts reiterated their equivalent of a buy rating on the shares with a price target of $45, representing upside of around 30% from Wednesday’s share price.

Nikola’s first quarter as a public company laid out its long-term vision, Jeffrey Osborne at Cowen said in his note. “Management struck a confident tone” regarding key initiatives for the next few months, he said.

Cowen kept its equivalent of a buy rating on the stock and its $79 price target, reflecting “the many unique characteristics to the Nikola story as well as the scarcity value of the first to market zero emission heavy-duty truck company,” Osborne said.

See also:Nikola on road to ‘disrupt transportation,’ JP Morgan says

“We also note the bevy of items that are not in our model that we believe can accrete to investors over time, which could provide further upside to our price target. We have high confidence that the ecosystem can drive revenue growth and a path to mid-teens EBITDA margins over time.”

Nikola went public in June, and shares doubled shortly after. In a matter of days, Tesla Inc. TSLA, -0.35% Chief Executive Elon Musk was urging his company to “go all out” with the Tesla Semi, the Silicon Valley auto maker’s long-haul electric truck expected to be available in 2021.

Nikola’s popularity is also part of a wave of IPOs through a special purpose acquisition corporation, or SPAC, also called blank-check companies. Electric-car maker Fisker Inc. also chose to go public through a SPAC.

Stock market bulls should consider owning gold as an insurance policy

This article is in response to questions after I predicted gold was on its way to $3,000 an ounce.

Gold has risen above $2,000 for the first time since the prediction. Gold, in addition to being an investment by itself and a substitute for fiat currencies, should also be considered by stock market investors as insurance. Let’s explore this with the help of a chart.

Chart

Please click here for an annotated chart of gold ETF GLD, +1.12%.

Note the following:

• From a technical perspective, gold has broken out.

• Gold has broken out after a very long base, as shown on the chart.

• A breakout to new highs after a long base is considered very bullish.

• The chart shows that RSI (relative strength index) has traced a very bullish pattern.

• I have received quite a bit of hate mail from stock market investors who do not believe in gold and consider it a worthless yellow piece of metal. Many quote Warren Buffett’s dislike for gold.

• In many ways, this call on gold is similar to the call I made on the stock market. When the Dow Jones Industrial Average DJIA, +1.15% was in the 16,000-point range, my call was for the Dow to reach 30,000. Please see “Here’s the case for Dow 30,000 in Trump’s first term.”

• I do have a track record with gold. The chart shows the Arora Report call to back up the truck and buy gold when it was in the $600 range. The chart also shows the call to sell gold at $1,904, exactly on the day gold topped out before plunging to about $1,000.

• Gold is not going to go up to $3,000 in a straight line. Gold is very overbought in the short term. When a commodity gets overbought, it is vulnerable to a pullback.

Insurance

Even stock market bulls who normally do not invest in gold may consider buying it on a pullback as insurance for their stock market portfolios. Here are a few scenarios to consider:

• The present policies of money printing by the Federal Reserve and massive borrowing by the government may debase the U.S. dollar. Gold is priced in U.S. dollars. As the dollar weakens, initially both the stock market and gold will benefit. In the longer term, gold will continue to benefit from a weaker dollar, but the U.S. stock market may be hurt.

• If the economy worsens, real interest rates may go lower. This will benefit gold at a time when the stock market may go lower.

• Gold works in both deflationary and inflationary environments. If the stock market goes lower because of deflation, gold may act as good insurance.

• If inflation heats up, in the long run the stock market may fall but gold may benefit.

• The stock market is in a bubble. The Arora Report’s call has been that the bubble will get bigger. If at some point the stock market bubble bursts, gold will benefit.

• If the stock market falls due to a geopolitical event, a rush to safety will benefit gold.

Caution

There are some scenarios in which gold as an insurance for the stock market will not work and gold as an investment may also not work. Investors can easily experience large losses in gold. Here are five scenarios:

• If interest rates rise, gold may fall.

• If the dollar rises, gold may fall.

• Gold is often sold at times of distress in the stock market as investors sell anything they can to meet margin calls.

• Central banks hold large amounts of gold. It is conceivable that central banks may start selling their gold.

• Gold is a very small market and it can be easily manipulated by the governments.

For the foregoing reasons, it is important to properly do the following:

• Portfolio structure.

• Allocation to gold.

• Changes to the portfolio with market conditions.

• Scaling into gold.

• Risk controls.

Disclosure: Arora Report portfolios have positions in Apple, Amazon, Alphabet, Microsoft and Facebook. Nigam Arora is the founder of The Arora Report, which publishes four newsletters. He can be reached at Nigam@TheAroraReport.com.

Pandemic has boosted online dating, sending Match Group stock surging

COVID-19 has closed a lot of traditional meeting grounds for singles, but the online equivalent has been open, and apparently thriving.

Match Group Inc. MTCH, +10.17% on Tuesday reported strong gains in profit and revenue in the second quarter, beating Wall Street estimates in the first full period of sheltering-in-place due to the spread of the coronavirus pandemic. Shares in the parent company of Tinder, Match.com, OKCupid and other online-dating properties are up nearly 12% in Wednesday morning trading.

“Despite the pandemic, our user trends, like engagement and willingness to pay for our products, is up, proving what we’ve always known: Our products satisfy a very critical human need, and those needs aren’t going anywhere,” Chief Executive Shar Dubey said in an email.

Match reported second-quarter profit of $103.1 million, or 51 cents a share, on sales of $555.5 million, up from earnings of 45 cents a share on revenue of $498 million a year ago and better than Match expected three months ago, when it guided for a sequential decrease from first-quarter revenue of about $545 million. Analysts on average expected earnings of 45 cents a share on sales of $520.3 million, according to FactSet.

Match showed more confidence in its third-quarter guidance Tuesday, predicting revenue of $600 million or more. Analysts on average were projecting about $563 million in third-quarter sales, according to FactSet. The company expects at least $2.3 billion in revenue for the full year.

The guidance reflects an outlook for “general stability or even slight acceleration in top-line year-over-year growth rates for the remaining two quarters of the year,” Chief Financial Officer Gary Swidler said on the Wednesday morning earnings call.

Match has attempted to roll out video offerings on its online-dating properties to respond to new needs during the pandemic, and executives said in a letter to shareholders Tuesday that the effort was paying off.

“Our one-to-many live-streaming video products, especially at Plenty of Fish, are seeing healthy adoption and associated revenue generation,” executives said in the letter. “We have also introduced one-to-one video chat capabilities on most of our major platforms, including Face-to-Face at Tinder.”

Don’t miss: Online dating amid coronavirus means longer conversations and a ‘pivot’ to video dates

Services such as video dating are important for Match’s efforts to add paying subscribers to Tinder and other properties, a big reason for its increased revenue recently. Match topped 10 million average subscribers in the quarter, an 11% gain year over year and higher than analysts’ average expectations for 9.88 million subscribers.

“Since early May, we have seen a recovery in propensity to pay across the portfolio,” Dubey and Swidler wrote in the letter to shareholders. “Increases in both subscriber conversion and ARPU led to year-over-year revenue growth for almost all of our major brands in the second quarter. On top of 15% direct revenue growth for Tinder, for the first time since 2016 our non-Tinder brands delivered a second consecutive quarter of year-over-year direct revenue growth, increasing 9% in Q2.”

Revenue at Tinder rose in July for the third straight month despite increased COVID-19 case numbers in many U.S. states. Though trends seem more stable in the U.S., Dubey said that Tinder has seen negative impacts in some international markets including India and Brazil. India was “the most impacted of any markets that we’ve seen thus far” and is still “under pressure,” while Brazil is “recently starting to tick back up” after challenges in May and June.

The report arrives not long after a big change for Match, which completed its separation from former corporate parent IAC/InteractiveCorp. IAC, +1.09% on June 30 after starting the process almost a year ago. Match also promoted Dubey to CEO earlier this year and named a new leader for Tinder last week.

Shares have gained about 13% since the separation from IAC was made official, as the S&P 500 index SPX, +0.50% has increased roughly 6%.