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<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total Turnover (Both Futures and Options) (In Rs Crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020-21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64,36,03,951.51 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,69,52,33,134.47 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022-23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,82,23,26,468.06 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2023-24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

<ul class="summary-list"><li>Australian prime minister Anthony Albanese said he would cut student debt by 20% next year.</li><li>The move aims to boost "intergenerational equity" amid Labor's tight election race.</li></ul>The Australian government on Sunday announced a sweeping plan to forgive 20% of student debt <a target="_blank" class="" href="https://www.businessinsider.com/australia-student-debt-millennial-loan-payments-2023-6">for around 3 million Australians</a>.The move, which takes effect in June next year if the current Labor government stays in power, would erase around $10.5 billion worth of debt."This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead," Australian Prime Minister Anthony Albanese said on Sunday.The government said that the changes would mean the average graduate with a loan of $18,200 would have $3,642 wiped from their bill.The remaining debt would be <a target="_blank" href="https://www.education.gov.au/higher-education-loan-program/making-help-and-student-loan-repayments-fairer">repaid under a new </a>scheme, with a minimum repayment threshold of $44,200.The debt relief is designed to promote "intergenerational equity," Albanese told Australian Broadcasting Radio on Monday, according to <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-11-02/australia-plans-10-5-billion-in-student-debt-cuts-to-ease-costs?srnd=israel-hamas-war&amp;embedded-checkout=true">Bloomberg</a>."We know that 80% of the children who are in primary school today will need either a university degree or a Technical and Further Education qualification, not as an added bonus for their employment, but as a precondition to getting a job because of the changes that are happening in the economy."It is likely also designed to boost support for the Labor government, which has been waning due to high inflation, high costs of living, and a housing shortage. A federal election is expected in May 2025.However, not everyone is convinced it's the right move.Andrew Norton, a Professor in the Practice of higher education policy at the Australian National University, said future debt should also be reduced."The last few years have highlighted how stressful and damaging high levels of student debt can be for younger Australians," he wrote in <a target="_blank" href="https://theconversation.com/albanese-flags-radical-changes-to-student-debt-with-a-20-overall-cut-and-drop-in-payment-rates-242740">The Conversation.</a>"However, the Albanese government's plan comes with a high price tag and the priorities may not be entirely right," he added."Managing future debt, such as by reversing fee hikes <a target="_blank" href="https://theconversation.com/the-universities-accord-should-scrap-job-ready-graduates-and-create-a-new-multi-rate-system-for-student-fees-203910">under the Job-ready Graduates program</a>, is as important as reducing old debt."Richard Holden, a professor of economics at the University of New South Wales, said the changes would not ease students' cost-of-living pressures."It doesn't feel like it moves the needle," he told <a target="_blank" href="https://www.abc.net.au/news/2024-11-04/economic-impact-of-hecs-repayment-debt-reduction/104557004">ABC News</a>. "It's not like taking 20% off someone's mortgage or car loan, so I don't see it having a big effect."In the US, the average student loan balance is around $38,000.However, Biden's efforts to grant broad student loan relief have hit several stumbling blocks. The administration has introduced incremental batches of relief over the past few years.As Business Insider's <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-pslf-more-borrowers-approved-debt-cancellation-biden-2024-10">Ayelet Sheffey reported,</a> Biden's second attempt at broader student-loan forgiveness <a target="_blank" rel="" class="" href="https://www.businessinsider.com/student-loan-borrowers-first-lawsuit-broad-debt-cancellation-biden-relief-2024-9">is stalled in court.</a>Donald Trump and Kamala Harris have focused mainly on <a target="_blank" class="" href="https://www.businessinsider.com/trump-deportation-immigration-policy-election-housing-home-prices-construction-costs-2024-10">immigration</a>, taxes, and the <a target="_blank" class="" href="https://www.businessinsider.com/election-preview-consumer-outlook-how-trump-harris-housing-taxes-2024-11">economy</a> during their presidential campaigns, likely due to multiple polls indicating a downturn in interest on the issue.Biden's Education Department is continuing to work on debt relief proposals; if finalized, <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-plan-borrowers-facing-financial-hardship-education-department-2024-10">the latest one</a> would benefit 8 million borrowers facing hardship.

Australia announced a sweeping plan to forgive 20% of student debt

<ul class="summary-list"><li>American consumers and businesses are having a hard time paying off credit card, auto, and commercial real estate debt.</li><li>US banks have increased their reserves in part to prepare for potential loan losses.</li></ul>US banks are having a harder time <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-score/what-is-debt-collection">collecting debts</a>, so they're taking precautions.According to Federal Reserve data, the past-due debt share for <a target="_blank" href="https://www.businessinsider.com/paid-off-credit-card-debt-solid-plan-2024-6">credit card</a>, <a target="_blank" href="https://www.businessinsider.com/consumer-credit-card-debt-auto-loans-delinquency-economic-outlook-bofa-2024-9">auto</a>, and <a target="_blank" href="https://www.businessinsider.com/commercial-real-estate-debt-property-losses-mortgage-interest-rates-prices-2024-7">commercial real estate</a> has recently risen to above pre-pandemic levels. The share of debt banks have written off as a loss because they couldn't collect it has also <a target="_blank" class="" href="https://www.federalreserve.gov/releases/chargeoff/chgallsa.htm">ticked up</a>, with the charge-off rate for two of these three loan types the <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CORCCACBS">highest</a> they've been in <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CORCREXFACBS">more than a decade</a>.Business Insider spoke to industry insiders who said this has prompted a response from big banks anticipating a continued increase in bad loans. <a target="_blank" href="https://www.businessinsider.com/largest-banks-us-list">US banks</a> have increased their reserves in recent years, effectively setting aside cash to cover potential loan losses.While it's commonplace for banks to increase their reserves as loan levels rise over time, reserves have started gradually making up a bigger share of total loans at firms like <a target="_blank" href="https://www.wellsfargo.com/assets/pdf/about/investor-relations/earnings/third-quarter-2024-earnings.pdf">Wells Fargo</a>, <a target="_blank" href="https://d1io3yog0oux5.cloudfront.net/_9d388ee07cccbcc3c8dc5bafe2ea4aff/bankofamerica/db/775/10116/webcast_transcript/2024-10-15+BAC+3Q+Earnings+Call_ADA.pdf">Bank of America</a>, <a target="_blank" href="https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/3rd-quarter/6bca0e4a-703c-4fff-8e70-f026f015fee5.pdf">JPMorgan</a>, and <a target="_blank" class="" href="https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q32024/3Q24-SUPP-ForWeb.pdf">Citigroup</a>. Since June 2022, Wells Fargo's and Bank of America's reserves have risen by about $1.8 billion and $2.4 billion respectively. Still, for context, these firms' cash coffers are still considerably lighter than they were during the Great Recession.<h2 id="3bd35426-2903-4a17-860b-981ba0e86427">America's 3 debt pain points</h2>Each month, the New York Fed <a target="_blank" class="" href="https://www.newyorkfed.org/microeconomics/sce#/debtexp-1">asks</a> roughly 1,300 Americans to estimate the chance they'll be unable to make a minimum debt payment over the next three months. Aside from the pandemic, Americans haven't been this pessimistic since 2017.Consumers' struggles to repay credit card and auto debt suggest that <a target="_blank" href="https://www.businessinsider.com/inflation-september-cpi-consumer-price-index-federal-reserve-interest-rates-2024-10">inflation</a> and <a target="_blank" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">interest rates</a>, while moderating in recent months, are still taking a toll on their finances. Additionally, businesses' struggles to pack back commercial real estate debt show that factors like elevated interest rates and the <a target="_blank" href="https://www.businessinsider.com/office-market-interest-rates-commercial-real-estate-federal-reserve-pandemic-2024-9">remote work revolution</a> are still having lingering effects.Here's a closer look at each of the three debt categories:<h3 id="df61242d-618b-4bfb-824d-874b5a53ce4d">Credit card debt</h3>As of the second quarter of this year, more than <a target="_blank" class="" href="https://fred.stlouisfed.org/series/DRCCLACBS">3%</a> of all credit card accounts in the US had past-due balances — up from less than 2% in 2021.The steady uptick in past-due credit card debt over such a short period of time provides some cause for concern, Bruce McClary, a nonprofit credit counselor and senior vice president at the National Foundation for Credit Counseling, told BI."What we are seeing is that people are struggling to repay debt while continuing to use up what is left of their available credit — forcing more people to start falling behind on their payments and into the hands of debt collectors," he said.David Schiff, senior managing director at FTI, told BI that prolonged debt-repayment problems will eventually present a bigger risk to the economy.The increase in reserves raises "real concerns about the softness of certain assets classes — specifically ongoing uncertainty around the commercial real estate market, and increasing worry about the number of revolving credit card customers and their rapidly growing balances," Schiff told BI.<h3 id="2c271636-eeeb-43a1-a28b-b69f0c808b83">Auto debt</h3>A Federal Reserve <a target="_blank" class="" href="https://www.federalreserve.gov/econres/notes/feds-notes/rising-auto-loan-delinquencies-and-high-monthly-payments-20240926.html">report</a> published on September 26 found that auto loan delinquency rates rose "substantially" above pre-pandemic levels by the end of 2023, driven in large part by growth in monthly debt payments.In fact, a growing number of Americans owe more than their cars are worth, according to a <a target="_blank" href="https://affiliate.insider.com?h=76e351eb917843c15c21c91acd7d8e92304c81583e3e5bb129c38093d6e7aff2&amp;postID=67114ad8434c477c23344eb6&amp;postSlug=big-banks-preparing-loan-loss-credit-card-auto-debt-cre-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.edmunds.com%2Findustry%2Fpress%2Fnegative-equity-on-the-rise-the-average-amount-owed-on-upside-down-car-loans-hit-an-all-time-high-in-q3-2024-according-to-edmunds.html%3Futm_source%3Dsubstack%26utm_medium%3Demail">report</a> published on October 15 by the automotive website Edmunds. Stephen Biggar, director of financial services research at Argus Research, told Business Insider that if a bank is forced to repossess such a vehicle, the car's value wouldn't even cover the loan, resulting in losses to the bank. He said that the uptick in auto delinquencies is "not a spike, but is kind of a concern about what goes on from here."<h3 id="108a8464-8ec8-4eb3-8b19-f2eb7af18b2d">Commercial real estate</h3>Another problem for banks is that some businesses with commercial real estate loans are struggling to repay them. Biggar said some of this is tied to high vacancy rates among offices. While many companies have called employees back to the office since the height of the pandemic, office vacancy rates still <a target="_blank" href="https://www.axios.com/2024/07/09/office-vacancy-rate-record-high">rose</a> to <a target="_blank" href="https://www.businessinsider.com/real-estate-outlook-office-buildings-vacancies-commerical-markets-investors-remote-2024-1">record highs</a> over the past year.Elevated interest rates have also made it difficult for businesses to pay back debt on commercial real estate loans related to offices, retail, hotel, and apartment building properties, among others. That's because some loans are coming due — forcing businesses to refinance at <a target="_blank" href="https://www.businessinsider.com/commercial-real-estate-big-trouble-crash-bank-crisis-2024-2">much higher interest rates</a>.To be sure, we're still far from a debt crisis: The share of past-due and charged-off debt generally remains in line with historical levels after rising from pandemic-era lows. Additionally, some banks are simply restoring reserves that were depleted during the pandemic. However, if the <a target="_blank" class="" href="https://www.businessinsider.com/recession-outlook-economy-layoffs-inflation-spending-job-market-tariffs-morgan-stanley-2024-10">economy slows</a> and the <a target="_blank" class="" href="https://www.businessinsider.com/job-market-recession-unemployment-rate-september-payrolls-report-fed-cuts-2024-10">unemployment rate</a> rises further, the uptick in delinquencies could become a larger concern, Biggar said.<h2 id="3723386c-1711-4911-97f5-b3d9337f3327">Wall Street acknowledgement</h2>While <a target="_blank" href="https://www.businessinsider.com/wall-street-banks-earnings-calls-interest-rates-fed-cuts-debt-2024-10">banking executives</a> this earnings season generally spoke highly of the economy, they did acknowledge that elevated prices and interest rates continue to weigh on American consumers."Our customers are healthy, but more discerning in their spend with signs of stress isolated," <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/15/citigroup-c-q3-2024-earnings-call-transcript/">said</a> Jane Fraser, Citi's CEO, referring to consumers with lower credit scores.Brian Moynihan, Bank of America's CEO, <a target="_blank" href="https://www.fool.com/earnings/call-transcripts/2024/10/15/bank-of-america-bac-q3-2024-earnings-call-transcri/">said</a> that overall consumer spending remains strong but that "consumers are worried of the cost of living, worried about higher rates, and other matters."Charles Scharf, Wells Fargo's CEO, <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/11/wells-fargo-wfc-q3-2024-earnings-call-transcript/">said</a> the bank hasn't seen "meaningful changes" in delinquency rates across its credit portfolio, but that there is evidence of financial strain among some Americans."We continue to see more pronounced stress in certain customer segments with lower deposit and asset levels where inflation has partially offset strong employment and wage growth," he said.Jeremy Barnum, JPMorgan's CFO, <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/11/jpmorgan-chase-jpm-q3-2024-earnings-call-transcrip/">said</a> that consumers' discretionary spending has "normalized" following particularly strong levels in recent years.The financial roller coaster of pandemic payments, whipsawing inflation, and high interest rates are especially affecting lower-income Americans."We know consumers at a certain income level and below are strapped," Biggar said, adding, "There's been a lot of concern, particularly at the lower income category, that people are unable to make ends meet."Going forward, Biggar said that many banks could continue adding to their reserves, particularly if the unemployment rate rises further. That might not ultimately be necessary, since the jobless rate has <a target="_blank" href="https://fred.stlouisfed.org/series/UNRATE">stabilized</a> over the past two months after a surprise increase."I'm not expecting any big spike from here unless the unemployment rate moves materially higher," Biggar said of further reserve reinforcements.

Big banks are bracing for losses as Americans struggle to pay off debt

In recent years, <keyword id="19902194" type="General" weightage="20" keywordseo="Anil-Ambani" source="keywords">Anil Ambani</keyword>'s <keyword id="20479923" type="General" weightage="100" keywordseo="Reliance-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Group" meta.hostid="153" meta.entityid="Reliance Group">Reliance Group</keyword> has seen marquee firms being auctioned in insolvency proceedings and piling debt-fold businesses. But the group has, in the week gone by, made announcements that investors believe may mark its transformation. In three days -- from September 18 to September 20 -- the group announced it has turned into nearly zero debt and is implementing long-term fundraising plans that are said to solidify its financial position. <keyword id="20144587" type="General" weightage="20" keywordseo="Reliance-Infrastructure" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Infrastructure" meta.hostid="153" meta.entityid="Reliance Infrastructure">Reliance Infrastructure</keyword>'s board approved <keyword id="20431799" type="General" weightage="20" keywordseo="fund-raising" source="keywords">fund raising</keyword> of up to Rs 6,000 crore via preferential issue and QIP, while <keyword id="20024191" type="General" weightage="20" keywordseo="Reliance-Power" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Power" meta.hostid="153" meta.entityid="Reliance Power">Reliance Power</keyword> board is meeting on September 23 to consider and approve the fundraise via multiple routes. The speed at which Anil Ambani moved to clear the debt of his companies, and simultaneously announce and execute the fund raising plans for future expansion of his companies, has surprised the investors. Shares of both firms surged on stock markets. The announcement to invest Rs 1,100 crore by the promoters group in Anil Ambani's flagship company, Reliance Infrastructure, has further boosted the confidence of investors in the group's revival plans and its long-term growth story, investors said. Anil Ambani's twin strategy of <keyword id="21440133" type="General" weightage="20" keywordseo="debt-reduction" source="keywords">debt reduction</keyword>, coupled with fresh capital raising, has set the stage for a long-term transformation of the Reliance Group, they feel. Reliance Infrastructure's <keyword id="20000950" type="General" weightage="20" keywordseo="market-capitalisation" source="keywords">market capitalisation</keyword> by the end of this week surged nearly 50%, rising from Rs 8,500 crore to Rs 12,500 crore. Similarly, Reliance Power's market capitalisation increased over 25%, moving from Rs 11,500 crore to Rs 14,600 crore. Reliance Infra announced a significant reduction in standalone external debt, lowering it from Rs 3,831 crore to just Rs 475 crore. This was achieved by clearing outstanding dues to prominent lenders such as Life Insurance Corporation of India (LIC), Edelweiss ARC, ICICI Bank, and Union Bank, according to company filings. The move signals a robust financial recovery and enhances Reliance Infra's financial flexibility. Also, Reliance Infra board approved a preferential issue to raise Rs 3,014 crore, increasing the stake of Risee Infinity Pvt Ltd, a promoter group entity, along with other investors such as Florintree Innovation LLP and Fortune Financial &amp; Equities Services Pvt Ltd. The board also approved seeking shareholder authorization to raise an additional Rs 3,000 crore via a qualified institutional placement. This will provide further capital to strengthen the balance sheet and invest in new growth opportunities. With these fund infusions, Reliance Infra's net worth is set to rise from over Rs 9,000 crore to more than Rs 12,000 crore, according to the filings. The company is now well-positioned to invest in high-growth sectors, investors said.

Anil Ambani's Reliance Group starts transformation journey, achieves near zero-debt

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Good morning! A Sam's Club with robots making pizza and no cash registers could be the new norm for the warehouse club. CEO Chris Nicholas spoke to BI about what he wants <a target="_blank" href="https://www.businessinsider.com/sams-club-ceo-chris-nicholas-interview-2024-10">shopping "in the future" to feel like</a>.In today's big story, Goldman Sachs thinks the past decade of big returns from the S&amp;P 500 <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">is coming to a close</a>.What's on deck:<ul><li>Markets: Americans' rising pile of debt <a target="_blank" href="https://www.businessinsider.com/big-banks-preparing-loan-loss-credit-card-auto-debt-cre-2024-10">is making banks nervous</a>.</li><li>Tech: SoftBank-backed creator-economy startup <a target="_blank" href="https://www.businessinsider.com/jellysmack-layoffs-restructuring-creator-economy-influencer-content-softbank-investment-2024-10">Jellysmack is cutting staff</a>.</li><li>Business: New York magazine and Olivia Nuzzi are <a target="_blank" rel="noopener" href="https://www.businessinsider.com/new-york-magazine-parting-ways-olivia-nuzzi-third-party-investigation-2024-10">parting ways</a>.</li></ul>But first, is this the end?If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="7fa5f018-5b05-4a37-a8dc-d3f89138bcb3">The big story</h3><h2 id="5fd547b9-ec52-41fc-8e08-4f4b27dd8097">A new era for stocks?</h2><div type="image" title="Photo illustration of moody Standard &amp; Poor's sign" height="1440" width="1920" msid="114468948" hostid="261" sizebytes="207764"></div>Forget the economy; Goldman Sachs is projecting a hard landing for future stock returns.The bank's portfolio strategy research team forecasts the S&amp;P 500 <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">will see annualized returns of 3% over the next decade</a>, writes BI's Filip De Mott.That'd be a sharp comedown for stock investors, who have enjoyed 13% in annualized returns for the major index over the past 10 years.Setting aside the market's recent strength, Goldman's forecast still isn't great. Annualized returns of 3% would put it in the 7th percentile of performance since 1930.Goldman's rationale for the pessimistic take includes two things even a rookie investor can appreciate: The market is overvalued AND too concentrated.Currently, the S&amp;P 500 cyclically adjusted price-to-earnings ratio is 38, well above the index's average of 22. And the usual suspects — tech giants like Nvidia and Meta — have done much of the heavy lifting in helping the S&amp;P 500 to record highs.<div type="image" title="Wall Street sign with New York Stock Exchange building in the back." height="4162" width="6243" msid="114468943" hostid="261" sizebytes="1226440"></div>Not everyone agrees with Goldman's forecast.This very newsletter recently included commentary from experts who said <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-bull-rally-anniversary-earnings-interest-rates-sp500-2024-10">the two-year-old bull market still had plenty of gas left in the tank</a>.It seems the only industry consensus we have about stocks' future is there is no consensus. Case in point: Goldman is bullish on a short-term perspective, recently <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-targets-bull-market-goldman-ubs-bmo-2024-10">raising its year-end S&amp;P 500 price target</a>.BI's Matthew Fox has a rundown on predictions from <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-wall-street-bull-bear-predictions-economy-inflation-2024-10">the bulls, the bears, and those somewhere in the middle</a>.UBS, for example, sees <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-prediction-us-economy-no-landing-ubs-2024-10">another big gain for the S&amp;P 500 next year</a>, writes BI's Jennifer Sor.The bank said a "no landing" for the US economy means the S&amp;P 500 could rise roughly 13% from its current levels. Inflation would remain somewhat elevated in the scenario, but the bank still sees room for the Fed to cut rates, which is bullish for stocks.On the other side of the spectrum are JPMorgan, which has maintained its bearish outlook this year in the face of a surging market, and Stifel, which has predicted a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-sp500-prediction-bubble-overvalued-stifel-outlook-2024-10">massive market downturn in 2025</a>.At the center of the debate sits artificial intelligence. Bears point to the tech as overinflating valuations with little to no evidence of it meaningfully driving revenue. Bulls say the hype is warranted, as the impact of AI is inevitable, like the rise of the internet.<h3 id="77f31a4c-8462-4e3d-a71f-838cb79493fb">News brief</h3><h2 id="1fcd294b-3f53-425f-9f20-4093e8623b59">Top headlines</h2><ul><li>Flight logs show Elon Musk's private jets are busy hitting swing states as <a target="_blank" href="https://www.businessinsider.com/elon-musk-private-jet-hits-swing-states-campaigns-donald-trump-2024-10">he campaigns for Trump</a>.</li><li>Ex-Twitter CEO Parag Agrawal has moved his AI startup out of stealth, <a target="_blank" href="https://www.businessinsider.com/ex-twitter-ceo-parag-agrawal-ai-startup-stealth-parallel-2024-10">calling it Parallel</a>.</li><li>'The million-dollar question of this election': Women's health startups are <a target="_blank" href="https://www.businessinsider.com/womens-health-startups-risk-trump-wins-election-2024-10">confronting a shifting legal landscape</a>.</li><li>Putin's expanded BRICS summit proves he has friends — <a target="_blank" rel="noopener noreferrer" href="https://www.businessinsider.com/russia-hosts-brics-summit-defy-west-us-economy-china-dollar-2024-10">but risks buckling under its own contradictions</a>.</li><li>Medicare coverage will change in 2025. Some boomers are <a target="_blank" href="https://www.businessinsider.com/medicare-changes-increase-costs-deductibles-prescription-drugs-premiums-copays-2024-10">already struggling to keep up with their medical bills</a>.</li></ul><h2 id="8120060b-ae66-48dc-b149-f0489a30ffa2">3 things in markets</h2><div type="image" title="Photo illustration of New York's Financial District" height="500" width="1000" msid="114469218" hostid="261" sizebytes="114610"></div><ol><li>Big banks brace for losses as Americans' debt piles up. US consumers and businesses are struggling to pay off auto, credit, and commercial real-estate debt. In response, US banks have <a target="_blank" href="https://www.businessinsider.com/big-banks-preparing-loan-loss-credit-card-auto-debt-cre-2024-10">steadily increased their cash reserves</a> in anticipation of loan losses. (But don't fear the worst; cash reserves are still far from Great Depression levels.)</li><li>Profits, not politics. Bank of America doesn't see November's election substantially impacting the stock market. Share price movement is driven by profit growth, and policies' impact on a sector <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-election-impact-outlook-harris-trump-energy-tesla-biden-2024-10">can be the opposite of what investors expect</a>.</li><li>A famed short-seller doesn't want beef with Tesla. The EV giant reports earnings on Wednesday, but Carson Block <a target="_blank" href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-short-seller-block-wont-elon-musk-valuation-2024-10">won't be betting against Elon Musk's company</a>. The investor known for his short bets said Tesla's massive size and Musk's ability to pull "rabbits out of the hat constantly" means he'll steer clear.</li></ol><h2 id="f4b54806-7f81-450c-ba32-92560d4fae9b">3 things in tech</h2><div type="image" title="Jellysmack's jellyfish symbol glitching" height="900" width="1200" msid="114469221" hostid="261" sizebytes="37624"></div><ol><li>A creator-economy startup is laying off staff and pointing the finger at Meta. The SoftBank-backed company Jellysmack is <a target="_blank" href="https://www.businessinsider.com/jellysmack-layoffs-restructuring-creator-economy-influencer-content-softbank-investment-2024-10">cutting 22 US staffers</a>. A Jellysmack representative told BI it was "scaling back certain operations in our Creator Program on Meta due to the opacity of their new monetization model." The program originally helped creators make money by sharing their content across Meta's platforms.</li><li>Wall Street can't quit Nvidia. Banks have kept hiking their price targets for the chip titan, whose share price is up almost 200% this year. But <a target="_blank" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-prediction-nvda-blackwell-demand-outlook-chips-ai-2024-10">it's not deterring analysts</a>, who remain upbeat about the next-gen Blackwell chip and Nvidia's web of enterprise partnerships.</li><li>Advertisers rally against iPhone "Distraction Control" over fears it could sabotage websites. French groups representing around 800 companies in media and advertising signed an open letter lobbying Tim Cook to suspend the feature, which would allow Safari users to hide images, pop-ups, or ads. They called it <a target="_blank" href="https://www.businessinsider.com/publishers-advertisers-call-on-apple-suspend-distraction-control-feature-2024-10">"an existential threat" to online advertising</a>.</li></ol><h2 id="9260fa45-d397-4b3c-b4f8-4bb193976216">3 things in business</h2><div type="image" title="Photo of Bob Iger" height="1280" width="1920" msid="114468945" hostid="261" sizebytes="74892"></div><ol><li>Disney says it will appoint a new CEO in 2026. The company said it would <a target="_blank" href="https://www.businessinsider.com/disney-bob-iger-ceo-successor-early-2026-james-gorman-chairman-2024-10">announce a successor for Bob Iger</a> before his contract expires in December of that year.</li><li>New York magazine and Olivia Nuzzi are parting ways. The star reporter was placed on leave after her editors learned she'd had a relationship with Robert F. Kennedy Jr. While a third-party investigation into Nuzzi's work found "no inaccuracies nor evidence of bias" in her reporting, the magazine said they'd still <a target="_blank" href="https://www.businessinsider.com/new-york-magazine-parting-ways-olivia-nuzzi-third-party-investigation-2024-10">mutually decided to go their separate ways</a>.</li><li>The vibecession, according to science. Americans are financially better off now than they were at the beginning of the pandemic. So why is everyone so concerned about inflation? A new study details the emotional toll of rising prices, which could explain <a target="_blank" href="https://www.businessinsider.com/inflation-hidden-cost-work-salary-negotiation-boss-conflict-2024-10">why the vibes are so rank right now</a>.</li></ol><h2 id="1ad7b482-3f4b-44b4-81b6-a864aa386478">In other news</h2><ul><li>These tech investors are trawling UC Berkeley <a target="_blank" href="https://www.businessinsider.com/the-house-fund-uc-berkeley-perplexity-databricks-2024-10">to fund the next Perplexity or Databricks</a>.</li><li>Ken Griffin's move to Florida means <a target="_blank" href="https://www.businessinsider.com/ken-griffin-move-to-florida-selling-chicago-homes-at-loss-2024-10">losing millions on homes he never even lived in</a>.</li><li>McDonald's is the latest election battleground <a target="_blank" href="https://www.businessinsider.com/mcdonalds-is-latest-election-battleground-for-trump-and-harris-2024-10">for Trump and Harris</a>.</li></ul><h2 id="9f5d80ac-3466-429f-a50a-2ffbb70c65ff">What's happening today</h2><ul><li>General Motors, GE, Verizon, and other companies report earnings.</li><li>The IMF World Economic Outlook is published.</li><li>NBA season begins with New York Knicks at Boston Celtics and Minnesota Timberwolves at Los Angeles Lakers.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.

The future of the S&P 500 has everyone divided

<ul class="summary-list"><li>Grocery chain Asda is calling workers back to the office three days a week from January.</li><li>The British retailer says it will improve on-site catering and provide better bathrooms for staff.</li></ul>Stuart Rose, chair of grocery store Asda and a veteran of British retail, says the company will improve bathroom facilities and on-site food as it mandates a return to the office for corporate staff.Rose, who has also held leadership roles at major UK retailers Marks &amp; Spencer, Argos, and Topshop, said last week that from January, <a target="_blank" class="" href="https://corporate.asda.com/20241105/a-message-from-stuart-and-rob-putting-ourselves-back-in-the-service-of-our-customers">all Asda corporate staff must be in the office three days a week.</a>After the announcement, Rose said in an interview with <a target="_blank" class="" href="https://www.theguardian.com/business/2024/nov/09/in-no-great-rush-to-get-back-to-the-office-uk-home-workers-may-not-have-a-choice">The Observer</a> that having too many staff based at home was "not a satisfactory way of working," particularly in a "fast-moving consumer goods industry.""It's not always as efficient with those teams working together in terms of online, in terms of Zoom calls," he told the outlet.Asda said it will "improve the working environment" in its offices as part of the RTO push.That includes "a better catering offer, an on-site Asda Express, a more welcoming atrium, more meeting spaces, quiet-space working pods, upgraded toilets, new chairs and redecoration."A spokesperson confirmed to Business Insider that in November, the grocery chain cut 475 management roles and announced a major restructuring amid slowing sales.Rose has taken on a leading role in Asda's transformation after one of the grocery chain's owners, Mohsin Issa, stepped down from running day-to-day operations in September.In 2021, Issa, along with his brother Zuber and private equity firm TDR Capital, purchased a majority stake in Asda from its previous owner, Walmart.Asda said that its RTO policy, combined with the restructuring and job cuts, would bring the business "in line with our competitors and the wider market, allowing us to build high-performing teams with a collaborative culture and respond to what our business needs the most."Rose is not alone in wanting his employees back in the office. While many bosses are firm advocates for the potential productivity gains of in-person work, some <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/rto-policies-dont-improve-employee-performance-company-value-controlling-bosses-2024-1">studies</a> have found that hybrid working does not affect productivity.As the pandemic years fade further into the past, more CEOs have been returning to policies similar to those that existed in most corporate environments pre-2020. In recent months, companies like <a target="_blank" class="" href="https://www.businessinsider.com/dell-staff-return-office-order-sparks-panic-parents-childcare-wfh-2024-10">Dell</a> and <a target="_blank" rel="" class="" href="https://www.businessinsider.com/amazon-ceo-return-to-office-mandate-5-days-week-2024-9?utm_source=Iterable&amp;utm_medium=email&amp;utm_campaign=campaign_Insider%20Today,%20September%2017,%202024">Amazon</a> have announced that staff must be back in the office five days a week.Asda's chair told The Observer he thinks demand for hybrid work has swung too far in favor of workers."Hybrid working wasn't invented in the pandemic," Rose said. "It has to fit the business's needs."Experts say workers still have some say in the working culture debate. If RTO policies become too strict, top talent will simply leave to find a system that works for them, Ravin Jesuthasan, a respected future-of-work researcher, <a target="_blank" class="" href="https://www.businessinsider.com/ravin-jesuthasan-why-companies-enforce-rto-mandates-future-of-work-2024-8">previously told Business Insider.</a>If the labor market swings back around to favor workers, organizations will be under more pressure to meet their employees on their terms, the author "The Skills-Powered Organization" said.Nick Bloom, a Stanford economist and a leading expert on remote work, previously told <a target="_blank" class="" href="https://www.businessinsider.com/wfh-remote-work-findings-rto-nick-bloom-2024-10">BI he believed</a> working from home is "here to stay," citing big steps in technology such as video calls and virtual reality.In a presentation published in September, Bloom shared that surveys in 2021 had shown that, on average, employees regarded the right to work two or three days a week from home as valuable as an 8% pay rise, based on 17,087 responses.

Better catering and nicer bathrooms will help get workers back to the office, says this retail CEO

<ul class="summary-list"><li>Stocks rose Thursday as investors digested strong retail sales data and more earnings.</li><li>Retail sales data showed US consumer spending remains robust, with monthly spending up 0.4%.</li></ul>US stocks climbed on Thursday as traders saw better-than-expected retail sales data and continued to digest strong corporate earnings reports.The Dow Jones Industrial Average added to record levels achieved at Wednesday's close. Bond yields rose, with the 10-year Treasury up six basis points to 4.075%. September's retail sales report showed consumer spending remains strong, with monthly spending up 0.4% from August, just above a Dow Jones consensus estimate of 0.3%.Retail sales climbed 1.7% compared to a year ago, according to Commerce Department data released Thursday.The strong spending data comes on the heels of a <a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-10">blockbuster September jobs report</a>, and further solidifies assessments that the US economy is strong and that the Federal Reserve may not need to cut rates as steeply or quickly as previously thought. Weekly jobless claims were lower than expected at 241,000, a 19,000 decline from the week before, according to Labor Department data released Thursday. Economists had forecast 260,000 weekly claims. Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,873.45, up 0.53% </li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 43,279.21, up 0.47% (+201.51 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 18,523.24, up 0.85% </li></ul>Meanwhile, a <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-stock-price-q3-earnings-chip-stocks-asml-nvidia-amd-2024-10">highly anticipated report</a> from chipmaker Taiwan Semiconductor Manufacturing Company came in strong, showing net income surpassed estimates while net revenue for the quarter rose 36% compared to the same last year."We have talked to our customers all the time, including our hyperscaler customers who are building their own chips. And almost every AI innovator is working with TSMC," TSMC chairman and CEO C.C. Wei said.Shares of TSMC rose 7% after the opening bell, pulling other chip stocks higher. Nvidia was up almost 2%, and AMD was up over 1%.TSMC's optimism about demand for AI tech follows a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/chipmakers-tumble-asml-guidance-semiconductor-nvidia-chip-growth-2024-10?_gl=1*1isprkj*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyOTE2NTYwMS4yODIuMS4xNzI5MTY3OTk1LjM0LjAuMA..">chip sector sell-off</a> earlier this week when chip machine maker ASML slashed its sales guidance on weaker demand from chipmakers.TSMC joins a string of strong earnings reports this week. Morgan Stanley and United Airlines posted strong results on Wednesday. Netflix will report third-quarter results after the close on Thursday. Here's what else is going on Thursday:<ul><li>A number of bank research desks are <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-targets-bull-market-goldman-ubs-bmo-2024-10?_gl=1*njfdt3*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyOTE2NTYwMS4yODIuMS4xNzI5MTY2MzczLjYwLjAuMA..">boosting their S&amp;P 500 price targets</a> in recent weeks as the bull market charges on.</li><li>China could raise nearly <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-beijing-stimulus-1-trillion-debt-package-fiscal-deficit-2024-10">$1 trillion of fresh debt</a> in the next 3 years to revive its economy, according to a report from Caixin Global.</li><li>The US freight recession is showing <a target="_blank" class="" href="https://www.businessinsider.com/author/filip-de-mott">early signs of recovery</a> as trucking company JB Hunt posted a rare earnings beat on Tuesday.</li></ul>In commodities, bonds, and crypto:<ul><li>Oil futures fell. <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/oil-price?type=wti">West Texas Intermediate crude</a> dipped 0.2% to $70.22 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price?utm_medium=ingest&amp;utm_source=markets">Brent crude</a>, the international benchmark, fell 0.3% to $74.01 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price?utm_medium=ingest&amp;utm_source=markets">Gold</a> rose 0.33% to $2,700.4 an ounce.</li><li>The 10-year Treasury yield was up six basis points to 4.075%.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> dipped 1.5% to $66,761.</li></ul>

Stock market today: Indexes gain after strong retail sales data

<ul class="summary-list"><li>President Joe Biden's key plans for broad student-debt relief are blocked in court.</li><li>Neither former President Trump nor VP Kamala Harris would be able to act on them imminently.</li></ul>Millions of federal student-loan borrowers remain in <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-blocked-biden-debt-cancellation-education-department-relief-2024-10">a debt-relief limbo</a> that the election won't immediately solve.That's because President Joe Biden's latest attempt to grant broad relief is blocked in court by a lawsuit from GOP-led states. Vice President Kamala Harris has said she supports Biden's efforts, but if she wins she won't have the option to move it forward until the court reaches a decision. Former President Donald Trump has opposed forgiveness altogether and has called for abolishing the Education Department.Despite its inability to provide broad cancellation, Biden's Education Department has issued targeted relief that has given nearly 5 million borrowers debt cancellation to date.Under Secretary of Education James Kvaal has been working on these efforts since 2021, trying to improve a higher education system that heavily relies on<a target="_blank" href="https://www.businessinsider.com/student-loan-repayment-issues-debt-relief-broken-industry-2023-9"> student loans</a>.He told Business Insider that shifting to a new administration's priorities will be "a baton race." He hopes the next president continues his work of thinking beyond just relief."We need to make sure that we run the student loan programs in a way that protects students from being left with unaffordable debts," he said. "But we also need to invest in making those programs affordable on the front end and then making sure that those programs reliably lead to graduation and a job."The issue has hardly been mentioned by the presidential candidates — drowned out by concerns about the <a target="_blank" class="" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10">economy</a>, <a target="_blank" class="" href="https://www.businessinsider.com/trump-harris-immigration-jobs-arizona-economy-mass-deportation-employment-wages-2024-10">immigration</a>, and <a target="_blank" class="" href="https://www.businessinsider.com/tax-cut-tariff-plan-outlook-presidential-election-scenarios-harris-trump-2024-10">taxes</a>. It's a big turnaround from the <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-debt-forgiveness-biden-campaign-promises-education-department-2021-6">2020 election</a> when candidates made ambitious campaign promises. That's likely because polling shows it's not a top issue for voters. Just 18% of respondents said student-debt relief would impact their vote in a May Bankrate<a target="_blank" href="https://www.bankrate.com/loans/student-loans/student-loans-presidential-elections-survey/#struggling"> survey</a>, and a separate May <a target="_blank" href="https://apnews.com/article/student-loan-cancellation-forgiveness-college-debt-e5ad2748058cfd037e0323321f532836">survey</a> by the AP-NORC found just three in 10 adults approved of Biden's actions on the issue.While over 40 million Americans still hold student loan balances of about $38,000 on average, and it's keeping them from buying homes, starting a family, or saving for retirement, any future president has limited motivations — or options — for broad relief.<h2 id="de4b5f8c-f342-470c-b137-e8b952968ece">Without broad cancellation, Biden has been chipping away at relief for targeted groups of borrowers</h2>Despite getting stuck on broad relief, Biden's Education Department has spent the last four years making a slew of changes to relief programs like<a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-pslf-borrowers-getting-debt-cancellation-biden-relief-2024-7"> Public Service Loan Forgiveness</a>,<a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-art-institutes-borrower-defense-debt-cancellation-biden-2024-5"> borrower defense to repayment</a> for defrauded borrowers, and the<a target="_blank" href="https://www.businessinsider.com/what-is-new-gainful-employment-rule-student-loan-debt-relief-2023-9"> gainful employment rule</a>, which ensures a borrower's debt doesn't pile up after they graduate.The department also implemented a new income-driven repayment plan, SAVE, intended to lower monthly payments and provide a shorter timeline for forgiveness. The plan has been blocked in court since July following challenges from GOP-led states, and 8 million enrolled borrowers won't have to make payments for at least six more months as the Education Department works to reprogram its systems and adjust repayment plans for impacted borrowers.Some borrowers have lost hope. Constance, 65, has nearly $200,000 in student debt, an amount that's ballooned since she graduated from law school in 1994. Constance — who requested to go by her first name for privacy — went through periods during which her kids' expenses took up most of her salary. She placed her student loans on deferment, meaning she didn't make payments but interest accrued."It's just out of control at this point, and there's no way I'm going to be able to pay it off," Constance said.She's disappointed because she would likely qualify for Biden's<a target="_blank" href="https://www.businessinsider.com/biden-announces-new-student-loan-forgiveness-plan-who-qualifies-relief-2024-4"> second attempt at broader student-debt relief</a>, which has been blocked in court.Specifically, the plan would cancel up to $20,000 in student debt for borrowers whose balances have grown because of unpaid interest and provide relief for borrowers who first entered repayment at least 20 years ago.On October 25, the Education Department unveiled a separate proposal to provide relief to borrowers<a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-plan-borrowers-facing-financial-hardship-education-department-2024-10"> experiencing long-term financial hardship</a> that prevents them from repaying their loans, including challenges with high childcare or healthcare costs. The department expects to finalize the plan in 2025, and it did not comment on how a future administration could impact the relief.Sara Partridge, associate director for higher education policy at the left-leaning Center for American Progress Action Fund, told BI that it's hard to predict what relief will come for student-loan borrowers as legal challenges remain ongoing."We will likely need to see how the current case against the Plan B rule plays out to have a better understanding of what exactly is possible in the future," Partridge said.Kvaal said that moving forward, he wants to focus on the way the country finances higher education. He also said that borrowers should expect more action on student-loan industry regulation, pointing to the Education Department's restructuring of servicers' contracts over the past year. Those changes have enabled the department to process debt relief applications quicker and implement more safeguards for borrowers to ensure their servicers are fulfilling their contractual obligations.<h2 id="a6faf6f8-07ba-4a7e-9d8c-539861222c09">Harris vs. Trump on student loans</h2>Even though both Harris and Trump provided minimal detail on how they would address student debt, Partridge said it's helpful to look back on their previous actions."I would expect continued improvements and limited expansions of debt relief where legally possible under a Harris-Walz administration," Partridge said.She said the Trump administration "didn't take any major steps" to fix long-standing issues, like backlogs with Public Service Loan Forgiveness and borrower defense applications. Borrowers should not expect expanded relief or reform should Trump win the election. He also lauded the Supreme Court decision striking down Biden's debt relief.The composition of Congress will also impact what's in store for student-loan borrowers — Republican control would mean that <a target="_blank" href="https://www.businessinsider.com/gop-bill-overhaul-student-loan-repayment-stop-debt-relief-foxx-2024-1">previously introduced legislation</a> to prevent relief could be signed into law."Where is the forgiveness for the guy who didn't go to college but is working to pay off the loan on the truck he takes to work? What about the woman who paid off her student loans, but is now struggling to afford her mortgage? Is the administration providing them relief? Of course not," Sen. Bill Cassidy, the top Republican on the Senate Education Committee, said in a recent statement.Regardless of who wins the election, legal challenges to debt relief will keep borrowers in limbo. Kvaal said the fight isn't over, and the Biden administration will work to provide relief under its authority as long as it can."It has gone to the full extent of its authority to offer relief to borrowers," Kvaal said. "We are fighting currently in court to offer more debt relief, but we also are taking dozens of actions that are not contested in court that have helped millions of borrowers."

Millions of student-loan borrowers are waiting for broad debt cancellation. The next president won't have any immediate answers.

<ul class="summary-list"><li>When deciding where to shop, consumers face trade-offs between convenience, quality, and price.</li><li><a target="_blank" href="https://www.businessinsider.com/history-of-sams-club-walmart-owned-warehouse-2023-5">Sam's Club</a> CEO Chris Nicholas tells BI he wants shoppers to have all three.</li></ul>At the back of Sam's Club's new tech-infused location in Grapevine, Texas, an unassuming floor-scrubber robot sits in a maintenance closet near the loading docks.Each day, the autonomous unit glides through the aisles cleaning up spills and crumbs while its <a target="_blank" href="https://www.businessinsider.com/sams-club-worker-ai-replaced-tiresome-daily-task-2024-6">cameras and sensors check inventory levels</a> and update the company's computers with the latest numbers.Using that blizzard of data, emerging technologies, and what CEO Chris Nicholas calls "design thinking," Sam's Club is challenging some commonly held assumptions about the warehouse club business."This, here, represents what the future looks like for Sam's Club," Nicholas told Business Insider in an interview Thursday, standing in what would normally be the checkout lanes of a traditional store.<div type="image" title="Sam's Club CEO Chris Nicholas at the company's new store in Grapevine, Texas" height="2251" width="3000" msid="114428150" hostid="261" sizebytes="235426"></div>The newly opened Grapevine store is the <a target="_blank" href="https://www.businessinsider.com/sams-club-opens-first-new-location-in-years-2024-10">first to eschew conveyer belts and cash registers</a> in favor of mobile apps and AI-powered computer vision.Shoppers passed through three <a target="_blank" href="https://www.businessinsider.com/sams-club-will-scan-cart-instead-of-checking-receipt-2024-1">towering blue gateways</a> on their way out to the parking lot, pushing carts full of items they'd scanned and paid for on the app.Thanks to data from sources like the floor scrubber, shoppers can find what they're looking for in the warehouse, scan the barcode, and pay through the app. And they can complete the entire process without waiting in line for a cash register — or a <a target="_blank" href="https://www.businessinsider.com/why-walmart-costco-check-receipts-2023-6">receipt check</a> at the door.Those who needed additional assistance were met by tablet-wielding associates who could ring up orders and process payments on the spot.<div type="image" title="A Sam's Club employee stands ready to process shoppers' orders on a mobile tablet." height="2251" width="3000" msid="114428151" hostid="261" sizebytes="353236"></div>While many of the systems have been in development at Sam's Club since before Nicholas became CEO, it's now up to him to ensure they all perform harmoniously.Nicholas said the club model's success historically has been a function of high-quality products sold at bargain prices."The price you pay for great items and great prices is friction," he said. "You queue to get in the door, you queue at the register, you queue to get out. You don't have e-commerce, or if you have e-commerce, you pay a premium."Consumers deciding where to shop long faced trade-offs between convenience, quality, and price.Sol Price — the godfather of the club store, progenitor of Costco, and acknowledged inspiration for Sam Walton to launch Sam's Club — was able to <a target="_blank" href="https://www.businessinsider.com/founding-history-of-costco">crack the code on quality and price</a> at the sacrifice of convenience. Other retail concepts have achieved convenience and price at the expense of quality. Still others offer convenience and quality for premium prices.In short, US shoppers often face a "pick two" scenario, but Nicholas said it doesn't have to be that way. With the help of the modern technology found in the newly opened location, he believes shoppers can enjoy all three."The total club channel is doing OK — it's growing faster than retail — but it hasn't been where innovation has lived," he said.One advantage Sam's Club has over most of its rivals is its massive parent company: Walmart, the world's largest retailer."The beauty of being owned by Walmart for us is we get to leverage a big supply chain that's automated, we get to leverage technology, which is front-end and back-end, and we don't have to pay for it," Nicholas said.<div type="image" title="Sam's Club shoppers visit the newly opened location in Grapevine, Texas." height="2250" width="3000" msid="114428156" hostid="261" sizebytes="863370"></div>"We don't have these massive investments that we have to make. We have capacity ready," he added. "We can innovate at the pace of inspiration, versus innovating at the pace of a capital budget."The Grapevine Sam's Club is literally bristling with tech, not just in the form of the hulking blue AI-powered gateways. There's a pizza robot in the café that can knock out 100 pies per hour, RFID sensors on every aisle, computer vision pallet scanners on the loading docks, and a fleet of battery-powered coolers that will extend the club's delivery range for perishables.It's Sam's Club's first new store in seven years and a model for the roughly 30 new locations and an unspecified number of remodels <a target="_blank" class="" href="https://www.businessinsider.com/walmart-sams-club-plans-open-30-new-warehouses-us-2023-1">planned for the next five years</a>.Walmart, for its part, has a clear incentive to experiment with new technology at Sam's Club. After growing sales by nearly 50% over the past five years, Sam's Club's $86 billion in revenue is still less than half of what Costco's North American business makes. There's plenty of ground to gain.Several shoppers told BI they've been using the new tech at other Dallas-area stores and that it generally <a target="_blank" href="https://www.businessinsider.com/sams-club-ai-receipt-checks-exit-success-2024-4">worked as expected</a>, apart from a few hiccups due to the larger-than-usual crowd at the grand opening. Many of the shoppers had Costco memberships too. One shopper told BI he planned to cancel his.Sam's Club has also been a test-bed for retail concepts that eventually find their way into Walmart's 4,600 US stores and beyond. Walmart Plus members can use a similar mobile app scan-and-go feature, and the businesses continue to combine resources — recently <a target="_blank" href="https://www.businessinsider.com/walmart-sams-club-corporate-supply-chain-teams-merge-memo-2024-9">merging their supply chain management teams</a>, BI first reported.<div type="image" title="Sam's Club shoppers visit the newly opened location in Grapevine, Texas." height="2250" width="3000" msid="114428155" hostid="261" sizebytes="553648"></div>Former Sam's Club CEO John Furner is now CEO of Walmart US, and Nicholas was <a target="_blank" href="https://www.supermarketnews.com/executive-moves/walmart-promotes-chris-nicholas-to-new-role-of-u-s-coo">instrumental</a> in planning the modernization of Walmart's store fleet during his earlier stint as chief operating officer for Walmart US.During the interview, <a target="_blank" class="" href="https://www.businessinsider.com/walmart-ceo-doug-mcmillon-bio-career-life-salary-first-job-2021-6">Walmart CEO Doug McMillon</a> strolled over to say hello as he wrapped up his <a target="_blank" href="https://www.linkedin.com/feed/update/urn:li:activity:7253079909311356928/">tour</a> of the store. He, too, previously served as Sam's Club CEO.Many of the same design principles in Grapevine can be observed at <a target="_blank" class="" href="https://www.businessinsider.com/visiting-walmart-recently-renovated-supercenters-in-wisconsin-2023-11">Walmart's recently remodeled stores</a>, such as low-friction checkout options, larger dedicated space for e-commerce fulfillment, and tightly interconnected use of mobile app shopping through scannable codes and showcase displays.Nicholas said he wants to transform shopping at Sam's Club into a "delightful" experience, whether that means using AI to interpret the jumbled contents of a shopping cart or redesigning the pockets on the Member's Mark jogger sweatpants to be an inch deeper after feedback so keys and phones are less likely to fall out when sitting."My hope is that Sam's Club, when you shop, feels like what it's like to shop in the future. That's what I hope, and so that's my job," he said. "This is a glimpse of that."

Sam's Club CEO wants you to feel like you're shopping in the future

<ul class="summary-list"><li>Investment firms want to offer private-credit ETFs to ordinary investors, the WSJ reported. </li><li>It would give retail investors access to a $1.7 trillion market. </li></ul>A booming corner of the financial markets that has only been available to institutions might soon be open to everyday investors. <a target="_blank" class="" href="https://www.wsj.com/finance/investing/wall-street-races-to-bring-private-credit-to-the-masses-8a25b624?mod=finance_lead_story">According to The Wall Street Journal,</a> some of the biggest private equity and investment management giants want to offer retail investors access to exchange-traded funds backed by private credit. The term broadly refers to loans made to companies and consumers by nonbank lenders. Historically, fund managers have sold "alternative assets" like private debt to institutional investors at a high cost, generating returns of around 10% in recent years — more than they would have seen from investing in the stock or bond markets.Now, as those institutions slow allocations to private credit, the biggest players in the space want to target a new class of investors. According to the Journal, firms like State Street, Apollo Global Management, and BlackRock are working to roll out private credit ETFs to regular investors. The challenge, though, is building a highly liquid ETF out of illiquid private loans. That hurdle is also what will likely draw the eye of regulators as they ensure the ETFs are appropriate for retail investors. But if these ETFs get approved, they will enable regular investors to tap into a booming market, one that BlackRock expects will more than double to $3.5 trillion by 2028. The race to launch private credit ETFs has heated up in recent months.In May, Capital Group and KKR teamed up to start offering funds investing in both public and private assets—including in private credit—starting next year.Last month, State Street proposed a private debt ETF to the Securities and Exchange Commission. The ETF would blend public debt with private debt on mortgage, corporate, and consumer loans purchased from Apollo Global Management. Anna Paglia, State Street's chief business officer, <a target="_blank" class="" href="https://investors.statestreet.com/investor-news-events/press-releases/news-details/2024/State-Street-Global-Advisors-and-Apollo-Global-Management-Join-Forces-to-Increase-and-Broaden-Investor-Access-to-Private-Markets/default.aspx">said in a statement</a> the ETF would "democratize access to private asset exposures," and make them "more accessible to a wider swathe of investors.""It is our goal to bring these investments to scale and help facilitate the process of making private assets more accessible and liquid over time. We see this as only the beginning of a new wave of innovation as public and private markets increasingly converge," Paglia said. Alternative assets make up a small share—less than 3%—of individual investors' global investments, KKR's head of Global Client Solutions Eric Mogelof, told the <a target="_blank" href="https://www.wsj.com/finance/investing/wall-street-races-to-bring-private-credit-to-the-masses-8a25b624">Wall Street Journal</a>.But he says there is huge potential for that share to grow by over three times. "We anticipate these allocations to rise to 10% or greater in the future," he told the Journal.

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