Markus Andrews

Rafael Enrique | Lightrocket | Getty Images

Earnings season is giving analysts plenty to chew on as they learn more about the impact of macro challenges on companies.
Though Wall Street is watching short-term stock moves spurred by quarterly results, the top analysts have their eyes on companies’ long-term prospects.

Bearing that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Netflix
Netflix (NFLX) is this week’s first pick. The streaming giant reported better-than-expected results for the first quarter of 2024. However, investors were disappointed with the company’s decision to stop reporting quarterly subscriber numbers. The company said that it is more focused on the revenue and operation margin metrics.
Following the first-quarter print, BMO Capital analyst Brian Pitz reaffirmed a buy rating on NFLX stock with a price target of $713. The analyst highlighted the company’s addition of 9.3 million subscribers, which handily exceeded BMO’s estimate of 6.2 million and the Street’s expectation of 4.8 million.
Pitz added that Netflix has again proved that it can grow in the U.S., with 2.5 million net additions reported in the first quarter in the U.S. and Canada. He expects continued growth in membership, driven by the ongoing paid sharing efforts and content innovation.   
Explaining his bullish thesis, Pitz said, “$17 billion of content investments for 2024 positions Netflix well for ongoing wallet share gains as linear TV viewership declines.”

Despite Netflix’s growth investments, the analyst expects an improvement in operating margin this year and beyond. He also anticipates that the company will benefit from its focus on advertising, given that $20 billion of linear TV ad dollars are expected to shift to connected TV (CTV)/online globally over the next three years, including $8 billion in the U.S.
Pitz ranks No. 155 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 75% of the time, with each delivering an average return of 18.4%. (See Netflix Ownership Structure on TipRanks)
General Motors
Next up is automaker General Motors (GM), which announced impressive first-quarter results and raised its full-year guidance, backed by strong performance in North America.
In reaction to the solid results and outlook, Goldman Sachs analyst Mark Delaney reaffirmed a buy rating on the stock and increased the price target to $52 from $50. The analyst raised his EPS estimates for 2024, 2025 and 2026 to reflect improved margin expectations. 
“We believe that margins can remain resilient, driven both by cost/efficiencies (including executing on the balance of its $2 bn net cost reduction program this year) and relatively firm pricing,” said Delaney.
The analyst considers General Motors’ progress on electric vehicle profitability to be favorable. It is worth noting that GM continues to expect its EV business’ variable profit to be positive in the second half of this year and generate a mid-single-digit earnings before interest and taxes margin in 2025.
Delaney further added that GM’s optimism is based on its current expectations for EV demand and production growth, with the company projecting increasing gains from the battery production tax credit and fixed cost leverage.
Finally, the analyst thinks that GM’s capital allocation will continue to be a tailwind. He anticipates that the company will return higher levels of capital to shareholders beyond 2024, given its aggressive buyback plan with a goal to reduce its outstanding share count to below 1 billion.  
Delaney holds the 256th position among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 61% of the time, with each delivering an average return of 17.5%. (See General Motors Stock Buybacks on TipRanks)
Wingstop
Finally, there is the restaurant chain Wingstop (WING), which operates and franchises in over 2,200 locations worldwide. Following a recent analysis on the U.S. total addressable market, Baird analyst David Tarantino said that there is upside to the company’s long-term target for the domestic market.
WING sees the potential to scale its presence to more than 7,000 global locations over the long term, including over 4,000 restaurants in the U.S. However, Tarantino stated that Baird’s analysis indicates an upside to the company’s domestic target, with room for at least 5,000 U.S. locations.
Further, BMO’s analysis indicates that there is potential for the estimated TAM to move higher over time, given the company’s continued growth in its most penetrated markets in recent years.
“All in, a sizable domestic runway along with a relatively open-ended opportunity in international markets (only 288 locations after 2023) seems likely to support double-digit unit growth for many years to come,” said Tarantino while reiterating a buy rating on WING stock with a price target of $390.
The analyst estimates that Wingstop’s unit-level cash-on-cash returns are already about 70% for U.S. franchised locations and appear well-positioned to increase further this year, driven by higher average unit sales volumes.
Tarantino contends that WING deserves a significant valuation premium due to its solid near-term operating momentum and attractive long-term growth profile. Looking ahead, the analyst is positive about the company’s ability to maintain annual revenue growth in the mid-teens, along with a very capital-efficient growth model. 
Tarantino ranks No. 264 among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 65% of the time, with each delivering an average return of 11.5%. (See Wingstop Stock Charts on TipRanks) More

The New York Stock Exchange welcomes executives and guests from Wolfspeed (NYSE: WOLF), on Oct. 4th, 2021, in celebration of its listing.

Company: Wolfspeed (WOLF)

Business: Wolfspeed is a semiconductor company focused on silicon carbide technologies. The company provides solutions for efficient energy consumption and a sustainable future. Its product families include silicon carbide material and power devices targeted for various applications such as electric vehicles and fast charging, as well as renewable energy and storage.
Stock Market Value: $3.3B ($26.25 per share)

Activist: Jana Partners

Percentage Ownership: n/a
Average Cost: n/a
Activist Commentary: Jana is a very experienced activist investor founded in 2001 by Barry Rosenstein. The firm made its name taking deeply researched activist positions with well-conceived plans for long term value. Rosenstein called his activist strategy “V cubed.” The three “Vs” were” (i) Value: buying at the right price; (ii) Votes: knowing whether you have the votes before commencing a proxy fight; and (iii) Variety of ways to win: having more than one strategy to enhance value and exit an investment. Since 2008, the firm has gradually shifted from that strategy to one which we characterize as the three “Ss” (i) Stock price – buying at the right price; (ii) Strategic activism – sale of company or spinoff of a business; and (iii) Star advisors/nominees – aligning with top industry executives to advise them and take board seats if necessary.

What’s happening

On April 22, Jana sent a letter urging Wolfspeed to engage in a comprehensive review of strategic alternatives, including a sale of the company.

Behind the Scenes

Wolfspeed is the world’s leading producer of silicon carbide, or SiC, and a manufacturer of silicon carbide applications. SiC is an extremely difficult and expensive substrate to manufacture: It requires growing epitaxial layers, baking at up to 4,532 degrees Fahrenheit, and then using ion implantation. This gives Wolfspeed a competitive advantage as the market leader. As a first mover, the company enjoys domination of the global market for SiC, having produced on the order of 90% of the material to ever exist. Due to the increased demand for their materials products and power devices in EVs, motor drives, power supplies, solar and transportation applications, the company sold its LED business in 2021 and its radio frequency business in 2023 to, in part, fund an increase in manufacturing capacity of SiC and vertically integrated manufacturing. The company has announced and is in the process of ramping up two major manufacturing facilities simultaneously in Siler City, N.C. and Marcy, N.Y. The John Palmour Manufacturing Center for Silicon Carbide in North Carolina is a facility dedicated to the production of SiC wafers. The company’s Mohawk Valley project in New York will produce advanced SiC devices like metal oxide semiconductor field-effect transistors, or MOSFETs, which are widely used in electronics and power applications.

Over the past one-, three-, five- and 10-year periods, Wolfspeed has had a negative total shareholder return and has vastly underperformed its peers. The company doesn’t have a demand problem. In fact, demand is quite robust, and the company has a substantial moat in SiC. For example, in 2023, Renesas made a customer deposit of $2 billion to Wolfspeed in order to secure a 10-year supply agreement for SiC wafers. Further, from a current base of nearly $1 billion, the company’s expansion plan supports a $20 billion market opportunity by 2030. Even in the event of an EV slowdown, Wolfspeed is such a small part of the market, that it could easily reach capacity on its facilities.
What Wolfspeed really has is a supply and ambition problem. The rollout of its two new facilities have been plagued by delays, and the company still only projects 20% utilization for the Mohawk Valley plant by the end of fiscal 2024. Even more concerning for investors has been the fact that the company announced in early 2023 plans to construct the world’s largest and most advanced SiC device manufacturing facility in Germany. Expansion is a great idea for a company that is executing well and reaching capacity. Wolfspeed is doing neither right now, and announcing further expansion plans before proving that it can execute scares the market as evidenced by the stock’s performance. Jana would like to see Wolfspeed do the following: (i) prioritize execution at Mohawk Valley and Siler City, (ii) earn an acceptable return on capital, (iii) set realistic targets and (iv) outline a clear plan for capital expenditures to assure that the company will not need to pursue any additional dilutive capital raises. If the company can create a credible forward-looking plan to earning an acceptable return on capital and set realistic targets, then the market will begin to regain confidence and the stock should rebound from its current depressed levels.
Jana also recommends that the board commences a review of strategic alternatives, including a possible sale of the company. However, with a stock price teetering at about $25 per share – it was trading as high as $70 per share in July 2023 – a sale of the company at an acceptable premium is highly unlikely here. The more likely outcome is for management to fix the problems with the company and potentially pursue a future sale or look for an investment from a strategic investor that might be willing to invest at a high multiple to shore up supply. Jana notes that Denso and Mitsubishi Electric recently made a minority investment in Coherent at a multiple of 10 times revenue. Wolfspeed presently trades at less than six times revenue.
This is similar to the issues Jana identified at Freshpet when the firm invested there: supply shortages and difficulty rolling out its U.S. manufacturing operations. At Freshpet, Jana also made operational and capital allocation recommendations in addition to reviewing a sale of the company. Jana ultimately received board representation and a sale never happened as the operational fixes worked. Freshpet’s stock closed at $106.36 on Friday, up from $45.37 in September 2022. As is customary for Jana, at Freshpet, the investor launched its activist campaign with a team of experienced industry executives ready to be board nominees, if necessary. Here, there has been no such mention of a “Jana Dream Team,” but it is a little too early for that. The director nomination window does not open until June 25 and closes on July 25, at which time we will have more clarity on which road this campaign will take.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.

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As Democrats and Republicans vie for power in November, experts have said Social Security is on the ballot.
With Social Security’s trust funds set to run out in the next decade, benefit cuts are inevitable without congressional action.
As lawmakers weigh that dilemma, they are also poised to define the program’s future role in American’s lives.

Demonstrators attend a rally asking Rep. Kean to “Stop MAGA Cuts! Protect Social Security!” on Feb. 24, 2023 in Bridgewater, New Jersey.
Dave Kotinsky | Getty Images Entertainment | Getty Images

Voters who show up at the polls this November may not just be choosing among Republicans, Democrats and third-party tickets — but also casting a vote on the future of Social Security.
Social Security is expected to pay $1.5 trillion in benefits to an average of almost 68 million Americans per month in 2024.

More than half of peak baby boomers — the largest cohort expected to turn 65 by 2030 — are expected to rely primarily on Social Security for income in retirement.
Meanwhile, Social Security’s trust funds are projected to run out in the next decade, which will prompt an across-the-board benefit cut of at least 20% if no changes happen sooner. As Congress weighs that dilemma, they will also decide Social Security’s future role in Americans’ lives.
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Democratic lawmakers like Rep. John Larson, D-Conn., who is running for reelection this year, say today’s benefits are not enough.
“Nobody’s getting wealthy on Social Security,” Larson said in a recent interview with CNBC, noting that more than 5 million Americans receive monthly benefit checks that are below the federal poverty level.

“It is the very sustenance that 40% of all Americans need just to get by, and it hasn’t been adjusted in more than 50 years,” Larson said.

‘Why hasn’t Congress voted?’

In 1983, when the last major Social Security reforms were enacted, there were no benefit enhancements, Larson argued. Among the changes put in place at that time was a gradual increase in the retirement age, taxes on benefit income and reduced benefits for public employees with pensions.
For years, Larson has championed a bill — Social Security 2100 — that aims to increase benefits for all beneficiaries by lifting the payroll tax cap for taxpayers earning over $400,000. Today, annual earnings of up to $168,600 are subject to a 6.2% payroll tax toward Social Security paid by both workers and employers. Larson’s plan also calls for closing loopholes that allow wealthy taxpayers to avoid paying Social Security taxes on other income.
Larson said the public is well aware that Social Security benefits are theirs and they’ve paid for them. Yet the same question comes up again and again: “Why hasn’t Congress voted?”

Rep. John Larson, D-Conn., speaks during an event to introduce legislation called the Social Security 2100 Act. which would increase increase benefits and strengthen the fund, on Capitol Hill on Jan. 30, 2019.
Mark Wilson | Getty Images News | Getty Images

The latest version of Larson’s bill has 184 Democratic co-sponsors yet has never been brought to the House floor for a vote.
Another bill, the Social Security Fairness Act, has even broader support, with 318 co-sponsors from both sides of the aisle, yet that also has yet to be put up for a vote. That proposal tackles just two changes also included in Larson’s bill — repealing the Windfall Elimination Provision and Government Pension Offset rules that limit Social Security benefit income for individuals who receive other benefits like pensions from a state or local government.

Retirement age may be pushed higher

Meanwhile, the Republican Study Committee’s budget, comprising proposals from 192 Republican House members, has suggested changes to Social Security, like raising the retirement age, as it seeks to cut federal spending across the board.
Democrats have called out the more than $1.5 trillion in cuts to Social Security that the Republicans’ proposal may entail.
By raising the retirement age for everyone 59 and younger, Budget Committee Democrats estimate that 257 million people would have to work longer.  

The Republican budget proposal has prompted fears that the party could move to enact those changes through a closed-door commission, Nancy Altman, president of advocacy organization Social Security Works, testified before the House Ways and Means Committee last week.
In response, Rep. Drew Ferguson, R-Georgia, who serves as chairman of the House Ways and Means Subcommittee on Social Security, said the committee would not be voting on the Republican budget proposal.
“I have said many times that the only way that this gets solved is in a bipartisan open forum,” said Ferguson during the hearing.

Path to bipartisan compromise uncertain

But how a bipartisan effort should proceed is up for debate.
Larson hopes to bring his Social Security 2100 proposal to the House floor for a vote, betting that some Republicans may come around and back making benefits more generous.
The extra money sent to the nation’s seniors would be spent in their districts, he argued. Moreover, the tax increases would require wealthy individuals to pay what every other working American is already contributing to Social Security, he said.

During last week’s hearing, Rep. Jodey Arrington, R-Texas, said that while he respects Larson’s passion, he still expects it will be necessary for lawmakers to agree on some combination of tax increases and benefit cuts that will affect future beneficiaries.
Experts including Charles Blahous, senior research strategist at the Mercatus Center at George Mason University, agreed.
“The size of the shortfall now is so huge, and so far beyond anything that lawmakers have successfully closed before, the notion that either party can ram through its preferred solution is fanciful,” Blahous said.
Benefits are regularly increased, Blahous argues, through changes to the initial benefit formula and cost-of-living adjustments.

Larson, for his part, has vowed to “never give up, never relent,” when it comes to pushing for his proposal.
Social Security advocates argue that those changes are what people want.
“If you expand Social Security’s benefits … and you pay for it by requiring the uber wealthy to pay their fair share, you will receive widespread praise and the gratitude of the nation,” Altman told members of the House Ways and Means Committee last week. More

Homebuyers are paying attention to new construction due to more supply and incentives. 
About 693,000 new single-family houses were sold in March, up 8.3% from a year ago.
The median sales price was $430,700, according to the latest report by the U.S. Census Bureau.

While the spring housing market has been plagued with low supply, high prices and spiking interest rates, would-be homebuyers are focusing on new construction. 
The reason? New homes have more incentives and availability than previously owned ones.

“There’s more opportunity in new construction,” said Nicole Bachaud, a senior economist at Zillow Group.
About 693,000 new single-family houses were sold in March, up 8.3% from a year ago, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. The median sales price was $430,700, the agencies found.
Meanwhile, sales for previously owned homes dropped by 3.7% from March 2023, the National Association of Realtors found.
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Many areas in the U.S. face a low inventory of existing homes as the mortgage rate lock-in effect, or the golden handcuff, keeps “existing owners from becoming sellers,” Bachaud explained.

With 30-year fixed-rate mortgage rates sitting above 7%, homeowners who bought at much lower rates in recent years don’t like the prospect of trading in their low rate for a higher one.

Meanwhile, buyers are turning to builders, who are typically more flexible with pricing. Homebuilders offer buyers incentives like rate buy-downs and price cuts. Homebuilders can even pay for closing costs, experts say.
“This has been helping incentivize some potential buyers to turn to the new home sales market,” said Matthew Walsh, assistant director and economist at Moody’s Analytics.

New build price gap narrows

While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed since the fall.
“Prices are much closer to parity than during any point in the last three decades,” Walsh said.

Over the last six months, the median price for a new home is only about 4% higher than the median price of an existing house. That level is significantly lower than before the pandemic when the median price of a new home was more than 40% higher than an existing house, Walsh explained.

“On the existing side, you have such a tight supply for sale,” he said. “But on the new homes side, you have builders prioritizing transaction volumes over margins.”
In the past, price-sensitive buyers with tighter budgets were limited to the existing homes market. Nowadays, buyers who remain looking might have more options on the new home sales side. More

This season, more than 140,000 taxpayers successfully filed returns using IRS Direct File, a free tax filing pilot from the IRS.
The program fully opened for certain taxpayers in 12 states in early March and saved filers an estimated $5.6 million in tax preparation fees for federal returns.
However, the IRS has not made a decision about the future of Direct File.

IRS Commissioner Danny Werfel testifies during the Senate Finance Committee hearing on the fiscal 2024 IRS budget and the IRS’ 2023 filing season, in the Dirksen Building in Washington, D.C., on April 19, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty Images

This season, more than 140,000 taxpayers successfully filed returns using IRS Direct File, a free tax filing pilot from the IRS, according to the U.S. Department of the Treasury and the IRS.
The program fully opened for certain taxpayers in 12 states in early March and saved filers an estimated $5.6 million in tax preparation fees for federal returns, IRS Commissioner Danny Werfel told reporters on a press call.

Direct File surveyed more than 15,000 users, around 90% of whom rated their experience as “excellent,” the agencies reported.
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“We have not made a decision about the future of Direct File,” Werfel said, noting the agency still needs to analyze data and get feedback from a “wide variety of stakeholders.”
The IRS plans to release a more detailed report about the Direct File pilot “in the coming days,” he added.

How Direct File could be expanded

The Direct File pilot included Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

The pilot only accepted Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less. This excluded filers with contract income reported via Form 1099-NEC, gig economy workers and self-employed filers.
Filers had to claim the standard deduction, which was $13,850 for single filers and $27,700 for married couples filing jointly for 2023. More

The warming planet is proving costly for many Americans.
U.S. weather and climate disasters cost more than $600 billion between 2018 and 2022 — a record figure, according to the U.S. Department of Treasury.
In a new series, CNBC will examine what climate change means for your money, from retirement savings to insurance costs to career outlook.

A man stands outside his flooded home after heavy rain in Fort Lauderdale, Florida, on April 13, 2023.
Chandan Khanna | AFP | Getty Images

The warming planet is already proving expensive.
U.S. weather and climate disasters cost more than $617 billion between 2018 and 2022 — a record figure, according to the U.S. Department of the Treasury. The October report found that around 13% of Americans reported economic hardship over the prior year due to climate change.

More people are likely to experience financial pain as temperatures climb and extreme weather events become more common, experts say.
With each additional degree of warming, the U.S. is expected to take a bigger economic hit, the Fifth National Climate Assessment warns. For example, an increase in global temperatures by 2°F is anticipated to double the financial impact induced by 1°F of warming.
Climate change could cost Americans born in 2024 nearly $500,000, due to higher taxes and pricier housing and food, among many other factors, ICF, a consulting firm, recently found in a report commissioned by Consumer Reports.
“The basic building blocks of our financial lives — housing, insurance, social welfare programs, taxes — will become more expensive or less valuable due to climate change, with lots of consequences for people’s wallets,” said Andrew Rumbach, a senior fellow at the Urban Institute.

‘Climateflation’ is already affecting prices

‘Household wealth is tied to housing’ — and that’s risky

A destroyed house following Hurricane Ian in Fort Myers Beach, Florida, US, on Tuesday, Oct. 4, 2022. 
Eva Marie Uzcategui | Bloomberg | Getty Images

Some of the biggest financial risks of climate change come into play with housing, Wagner said.
“Most household wealth is tied to housing, which [is] directly affected by everything from floods to droughts to wildfires,” he said.
At least 3 million Americans already report being displaced by a disaster, one survey by the U.S. Census Bureau found.
“That is tremendously costly for people and businesses,” Urban Institute’s Rumbach said.
Insurance companies are raising their monthly premiums on homeowner policies and rolling back coverage in areas prone to certain disasters to “adjust to climate risk,” he said.
“Florida, Louisiana and California are all facing severe challenges, and I expect these issues will spread to other states in the years ahead,” Rumbach said.

Globally, natural catastrophes cost insurers $108 billion in 2023, which is well above the annual average over the past 10 years of $89 billion, according to Swiss Re Institute. The institute estimates these losses could double within the next decade, as temperatures rise and storms intensify.
These costs are likely to be passed on to consumers, Rumbach said.
Currently, only around 40% of the expenses from natural catastrophes are covered by insurers, meaning the rest falls on governments and individuals, Swiss Re Institute found.

‘Clear interactions’ between climate and health

The warming planet could result in larger medical bills for many Americans.
Health-care costs due to fossil fuel pollution and climate change already exceed $800 billion a year in the U.S., a report by the Natural Resources Defense Council found.
Some of these expenses are a direct result of individual, dangerous disasters.
For example, Hurricane Sandy, which pounded the mid-Atlantic region in 2012, led to more than 12,000 hospital admissions, emergency room visits and outpatient encounters.

Damage is seen in the Breezy Point area of Queens in New York on October 30, 2012 after fire destroyed about 80 homes as a result of Hurricane Sandy which hit the area on October 29.
Stan Honda | AFP | Getty Images

Other health effects of climate change reflect more widespread shifts in global conditions.
“There are clear interactions between heat waves and health conditions,” said Charles Driscoll, a professor at Syracuse University who studies climate change. “For example, heat waves exacerbate cardiovascular events.”
Air pollution, for its part, is associated with respiratory diseases, cancer and nervous system disorders, Driscoll added.

Knock-on effects for taxes, wages, retirement savings

Federal, local and state governments will likely raise taxes as they deal with the higher costs of a hotter planet and more demand for their services.
At the same time, workers may see their wages shrink as businesses and communities are disrupted by storms and heat waves. Within seven years, up to 3.8% of total working hours around the world could be lost due to higher temperatures, according to the International Labour Organization. That amounts to roughly 136 million full-time jobs.
More than 65 million adult workers in the U.S. are in occupations endangered by climate-related health risks, KFF, formerly the Kaiser Family Foundation, estimated in a July 2023 analysis. These include fields with increased exposure to heat and decreased air quality, including construction and agricultural jobs.
ICF, the consulting firm, warns that global warming could put people’s retirement savings in jeopardy, too.
“Climate change is expected to decrease retirement income by impacting the value of corporate stocks held in retirement portfolios through higher costs to companies, declines in corporate productivity, damages to physical assets and supply chains, reduced resource availability and new costs associated with transitioning to low-carbon solutions,” it wrote.

A new economy in a hotter planet

The Woolsy fire burns a home near Malibu Lake in Malibu, Calif., Friday, Nov. 9, 2018. 
Ringo H.W. Chiu | AP

The workforce and education system are changing in anticipation of a hotter planet.
People are switching careers to leave fields threatened by global warming, such as gas and coal, while a small number of colleges are offering a new major: climate change studies.
Schools that offer such majors “are reporting a big increase” in demand, said higher education expert Mark Kantrowitz.
Meanwhile, the number of jobs in climate science is expected to grow by 6% between 2022 and 2032, compared to an average 3% for all occupations, the Bureau of Labor Statistics found.
“Slowing down and stopping climate change is a challenge, but also an opportunity for tremendous innovation and economic growth,” Urban Institute’s Rumbach said.

Climate change leads to droughts, which lead to crop failures, which cause food price spikes.

Gernot Wagner
a climate economist at Columbia Business School

In this new series, CNBC will examine what climate change means for your money, from retirement savings to insurance costs to career outlook.
We start with a story by reporter Greg Iacurci on how people continue to build in and move to Miami, despite the city being, in the words of one expert, “ground zero” for global warming. This dynamic is playing out across the country, and could worsen the financial pain ahead.
Has climate change left you with bigger or new bills? Tell us about your experience by emailing me at annie.nova@nbcuni.com. More

As wage growth outpaces inflation, Americans have reason to be more optimistic about long-term goals like retirement.
But many still fear that uncertainties like a higher cost of living or U.S. government changes to the retirement system may throw them off track.

Viewstock | View Stock | Getty Images

Last year, Americans’ confidence that they would have enough money to live comfortably in retirement fell the most since the global financial crisis.
New research shows both workers’ and retirees’ confidence has not recovered. But some signs of optimism have emerged, particularly as wage growth now outpaces inflation growth, according to the Employees Benefit Research Institute and Greenwald Research.

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The more than 2,500 Americans surveyed said certain factors are most likely to throw them off course — for example, an increasing cost of living that will make it harder to save and the U.S. government making significant changes to the retirement system.
The latter worry comes as both retirees and workers expect to rely on three sources of income in their golden years: Social Security, workplace retirement savings plans and personal retirement savings or investments, the research found.
While 88% of workers expect Social Security will be a source of retirement income, almost all of today’s retirees, 91%, say they depend on those benefit checks.

Changes to Social Security benefits may be on the horizon, as the program’s trust funds face depletion dates in the next decade that make benefit cuts of at least 20% inevitable if Congress does not take action. Meanwhile, Medicare’s trust fund that covers Part A hospital insurance is due to run out even sooner.

Other factors, like changes in tax breaks to employment-based retirement savings or individual retirement accounts, could also upend retirement planning if they were put in place, noted Craig Copeland, director of wealth benefits research at EBRI.
“That can really change the dynamics of what would happen in retirement and how people plan for retirement,” Copeland said.
Social Security is always a top issue in polls AARP conducts of its members, Nancy LeaMond, the interest group’s executive vice president and chief advocacy and engagement officer, said during a Wednesday press briefing.
“In light of that, and the importance of Social Security, we are asking every candidate for federal office this cycle what his or her position is on Social Security,” LeaMond said.

New survey results released by the AARP this week paint a less optimistic outlook for Americans ages 50 and up, with 20% indicating they have no retirement savings. Moreover, 61% say they worry they will not have enough money in retirement.
The nonprofit organization, which represents Americans 50 and up, is also pushing for lawmakers’ positions on family caregiving, which tends to contribute to women’s economic insecurity in retirement, LeaMond said.
AARP is also backing other legislative proposals to improve retirement security by providing Americans who do not have access to employer-sponsored retirement plans with retirement savings accounts or automatic IRAs.  
While Congress has also taken action to address retirement security through recent legislation, the effects may be limited for people who are close to retirement, Copeland noted. That includes changes that make it possible for savers in their 60s to make additional catch-up contributions and a match for low-income workers.
“There wasn’t a great deal that’s really change the dynamic for people near retirement,” Copeland said.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

Restricted stock units, or RSUs, are a type of equity compensation that grants company stock to employees over a set schedule.
RSUs have become more common over the past two decades, and most public companies now offer RSUs to at least mid-level employees, according to the National Association of Stock Plan Professionals.
However, employees need a comprehensive strategy for RSUs, experts say.

Enes Evren

When you receive equity compensation from an employer, it typically requires a comprehensive financial plan — and restricted stock units are no exception.
In 2000, only 20% of public companies granted restricted stock or restricted stock units, primarily for senior executives or higher, according to the National Association of Stock Plan Professionals.

That percentage, however, has jumped to 94%, and most public companies now extend grants to at least middle managers, the organization’s most recent survey from 2021 found.
From a tax perspective, “it’s very similar to a cash bonus,” said certified financial planner Chelsea Ransom-Cooper, chief financial planning officer for Zenith Wealth Partners in New York.
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However, once the shares vest, you’ll have to decide whether to sell or continue holding company stock, she said.
That could hinge on several factors, including your short- and long-term financial goals, how much company stock you already own and how you feel about the company’s growth potential.

How restricted stock units work

Typically, you’re granted RSUs upon hiring, throughout employment or tied to corporate performance.
“That first grant is typically always the biggest,” Ransom-Cooper said. “The additional ones are going to be those golden handcuffs.”
You acquire the actual shares over a set period or “vesting” schedule. Until you own the shares, you won’t receive dividends or have voting rights.
The vesting schedule could be graded, which delivers shares over specific increments. Alternatively, there could be a cliff, such as one year of employment. In either case, you could forfeit unvested shares by leaving the company early.
After RSUs vest, you can sell shares or continue holding them, similar to other investments. Over time, you could amass a sizable concentration of a single stock, which experts say could be risky.

‘Pick a strategy’ for RSUs and taxes

If you’re granted RSUs, you should plan to incur regular income taxes on the market value of shares as they vest. Your company’s tax withholding may not be enough, experts say.
“Companies have a flat withholding rate” of 22% or 37%, explained Bruce Brumberg, editor-in-chief and co-founder of myStockOptions.com, which covers RSUs and other equity compensation.
“You have to be aware of that and pick a strategy,” he said. If your company only withholds 22% and your tax bracket is higher, you may need to make quarterly estimated tax payments.

If you sell your shares, the taxes depend on how long you’ve owned the shares. Your purchase date, or “basis,” is the shares’ market value at vesting.
You could pay long-term capital gains for profitable shares — taxed at 0%, 15% or 20% — if you owned the shares for more than one year. But you’ll owe regular income taxes on short-term gains from shares owned for one year or less.
Whether you’re vesting or selling shares, you’ll need to weigh your complete tax situation — and how the additional income could impact things like college financial aid, eligibility for certain tax breaks and more.

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