Is Fidelity Ripping You Off?
Market Sizzle: Pandemic Peaks Plummet, Fidelity Faces Lawsuit, Single-Stock ETF Risks Soar, Whistleblower Alleges High-Fee Schemes
Have you ever noticed how boarding a plane can feel more like a strategic game of chess?
Well, over at Southwest Airlines, the stakes are high, and the side-eyes are flying faster than the aircraft. Frequent fliers are buzzing about folks who seem to bend the rules of the airline's open seating system, snagging the best seats without forking over extra dough.
Grab your boarding pass, folks—it's about to get bumpy!
Profits Propel Economy
Even though more people aren't getting hired this April, things aren't as bad as they sound. Companies in the U.S. are still making more money. The big businesses, like those in the S&P 500, are doing even better than what experts thought they would. They're earning 5.2% more than last year!
When companies make money, it usually means the economy will keep getting better. The bosses of these companies feel good about things. They're not even talking much about recessions or big problems right now. This shows they expect things to stay okay.
Even if some companies like Tesla and Amazon.com are letting go of workers, most aren't. The government says not many people are losing their jobs these days. And while the people who make big decisions about money are trying to slow down rising prices by making it more expensive to borrow money, for now, people are still buying things and the economy is moving along.
Single-Stock ETF Surge
2024's hot stock market is making some investors want more risk. They are now betting big on just one company's stock with new types of funds called single-stock ETFs. These funds use borrowed money or special contracts to try and double the money from one stock like Nvidia. If Nvidia does well, these funds can do even better.
But these funds are super risky. One fund that bets Nvidia will do bad lost 77% already! Experts say these funds are like playing a very risky game and are not for everyone. They work best for short, quick bets on stocks, not long-term investments.
Jeremy Vreeland, who used to fix cars, now trades these risky funds. He likes to make fast trades to earn money from big swings in stock prices. This kind of investing has gotten easier and cheaper because of these new funds.
While some people make money, others could be shocked by sudden big losses. So, it's important to really understand what these funds do before jumping in.
Whistleblower Wars at Fidelity
A former financial advisor is suing Fidelity Investments, claiming he was fired for not pushing high-fee investments on clients. According to him, these investments would profit the company more but weren't the best for the clients.
He alleges that his manager pressured him to sell these pricier options and the company even ranked managers based on how much they sold. He reported these practices to the company and OSHA, believing this led to his dismissal in December 2022.
Fidelity denies these claims, asserting he was let go for other reasons. The advisor argues that Fidelity's actions and statements have damaged his reputation and hindered his ability to find new employment. He had been with the company from 1998 until his firing and had maintained a clean professional record. Now, he seeks compensation through a lawsuit for these alleged injustices.
Pandemic Stars Plummet
After the pandemic started, some companies like Zoom and Peloton got really popular. They made a lot of money because people needed things like video calls and home workout gear. But since 2020, these companies have lost about $1.5 trillion in value. That's a huge drop!
Zoom's value went down by 80%, and Peloton's by 97%. This happened because people are going back to offices and not shopping online as much. High costs and interest rates are also making it tough.
Only seven companies out of the top 50 from 2020 are still doing well. These include BYD and CrowdStrike. Some other big companies like Nvidia and Amazon keep doing great even after the pandemic.
But many companies that grew fast in 2020 are struggling now. The world is changing again, and it's hard for them to keep up.
Quick Sizzles:
Shopify Slump: Shares plunged 19% after forecasting slow sales and tighter margins, amid global consumer spending fears and fierce competition from low-cost online players.
Microsoft's AI Boom in Wisconsin: Announced a $3.3 billion investment in AI infrastructure and training, aiming to boost local tech jobs and soothe AI-related anxieties.
EU Gas Prices Surge: Investment funds ramp up bullish bets on European gas prices, reaching the highest since early 2022, amidst volatile global LNG markets and regional supply concerns.
Silver Lake's Tech Takeover: Raised a record $20.5 billion for large-scale tech investments, moving away from smaller pandemic-era bets that didn't pan out.
Uber's Regulatory Costs Bite: Legal battles dent profits, with the ride-hailing giant reporting a significant drop in expected earnings, overshadowed by a $178 million legal settlement in Australia.
That’s your Market Sizzle; good trading, good life!
As a client of Fidelity for over 30 years I find the honesty, integrity, low cost and excellent quick executions with price improvements to be above any other on line broker.. PS I was the Senior Options Representative at a Major Wall Street Firm as well as a allied member NYSE and a founding member of the CBOE ... Fidelity is the lowest cost, Professional Honest broker for the publc.