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    U.S. consumer is ‘quite healthy,’ VantageScore CEO says, as credit scores rise despite inflation, mounting debt

    Register now for CNBC’s virtual Your Money event on November 9th

    Consumer credit scores held steady in September for the third consecutive month, averaging 701, according to VantageScore.
    Credit scores are used by lenders to assess both a borrower’s ability to repay and what interest rate they will charge.
    A score below 660 is considered subprime.

    While Americans’ credit card debt levels have reached a record high of more than $1 trillion, their overall credit health has remained strong, according to a report from credit scoring company VantageScore. 
    Even with inflation, rising interest rates and concern about the overall economy, U.S. consumers still have room to spend.

    “The consumer is not maxed out; they’re actually reducing their overall credit and managing credit pretty well,” VantageScore CEO Silvio Tavares told CNBC in a recent exclusive interview. “The reality is the consumer is actually quite healthy.”

    More from Your Money:

    Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

    Despite that $1 trillion credit card debt benchmark, the average VantageScore credit score held steady in September for the third consecutive month at 701, up four points from the same month last year.
    Meanwhile, the national average FICO credit score rose two points from a year ago to reach a new high of 718, according to its latest report.
    Both scoring models use a numerical range of 300 to 850.

    These credit scoring models and others use consumer data from the three main credit bureaus — TransUnion, Experian and Equifax — to come up with credit scores. That number is key to helping financial institutions determine what credit cards, mortgages, auto loans, and personal loans consumers qualify for —and at what rates.

    “Typically consumers that have a VantageScore of 660 or above are eligible for the best rates,” Tavares said. “So that’s really the sweet spot.
    “That’s where you want to get to, and that makes you eligible for the best interest rates in a rising interest rate environment,” he added.
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    3 big reasons exchange-traded funds went ‘mainstream’ with investors

    ETF Strategist

    Exchange-traded funds had $7.2 trillion of U.S. investor assets through September.
    Investors, in aggregate, have been putting more money into ETFs each year than in mutual funds.
    ETF market share relative to mutual funds has grown to 30%, up from 13%, in the last decade.
    Taxes and low costs are big drivers of this trend, experts said.

    Kathrin Ziegler | Digitalvision | Getty Images

    ETF demand outstrips mutual funds

    At a high level, ETFs are investment funds that generally hold a basket of many securities such as stocks and bonds, similar to mutual funds.

    Unlike mutual funds, however, ETFs are traded on a stock exchange. Like stocks, they can be traded through the day and their share price rises and falls during that time. Mutual fund trades, by contrast, are executed once a day and all investors get the same price.
    Investors pulled more than $900 billion from mutual funds in 2022 and funneled about $600 billion into ETFs, according to Morningstar. That net difference in dollar flows — about $1.5 trillion — was the largest on record.

    “It was a huge, huge dispersion,” said Bryan Armour, director of passive strategies research for North America at Morningstar.
    The last time mutual fund flows eclipsed those of ETFs was in 2013, he said.
    “Overall, the trend has been toward ETFs and away from mutual funds,” Armour said.
    ETFs’ growth has been global, too: Total assets outside the U.S. market were $2.7 trillion at the end of 2022, up fivefold in a decade, according to Morningstar data. Total global ETF assets may exceed $20 trillion by 2026, according to PwC.

    Asset managers have tried to capitalize on this demand by debuting more funds. There were 419 U.S. ETF fund inceptions in 2022, versus 197 mutual funds, Morningstar found.
    “We really started to see in the past 10 years an acceleration of both the demand of ETFs, and more recently with the supply of ETFs,” Rosenbluth said.
    That said, ETFs have a ways to go before their total assets overtake those of mutual funds. Mutual funds hold about $17 trillion, for a roughly 70% market share versus ETFs, according to Morningstar. Mutual funds are also relatively entrenched in 401(k) plans for the time being, a large pot of aggregate U.S. savings, experts said.

    3 big reasons ETFs have gotten popular

    There are three big reasons investors, in aggregate, have preferred ETFs over mutual funds, experts said.
    For one, ETFs are generally more tax-efficient, experts said.
    When asset managers buy and sell securities within mutual funds, those trades may trigger capital gains taxes for fund investors. (This is largely the case for “actively” managed mutual funds. More on that later.)
    Due to ETFs’ structure, U.S. investors largely escape those taxes, experts said.
    “It’s such a huge advantage for ETFs,” Armour said. “It gives investors control of when they take capital gains and when they don’t.”

    Those tax benefits are important for investors in taxable accounts, but less so for those who invest in tax-advantaged retirement accounts.
    ETFs also tend to have lower costs relative to mutual funds — an attractive feature as investors have generally become more price-conscious, Armour said.
    The average asset-weighted annual fee for mutual funds and ETFs was 0.37% in 2022, less than half the cost 20 years earlier, according to Morningstar data. Asset-weighted fees take investor behavior into account, therefore showing that investors have been seeking out less expensive funds.
    ETFs don’t carry distribution fees, such as 12b-1 fees, that tend to come with certain mutual funds. However, investors may pay commissions to buy and sell ETFs, eroding the fee differential.
    A recent University of Iowa study found that the average annual cost of “passive” mutual funds is 0.45% of investor assets, more than double the 0.21% average for ETFs.

    A passive, or index, mutual fund or ETF differs from an actively managed one. The former tracks a market index, such as the S&P 500 stock index, rather than engaging in active stock or bond picking to try to beat the market. Active management generally costs more as a result of that securities picking.
    The third big reason investors have leaned toward ETFs is somewhat of a “misnomer,” Armour said.
    Many investors think that ETFs are synonymous with passive investing. There are passive mutual funds, too — but investors may not know that. As passive investing has gotten more popular, ETFs have profited from that common misconception.
    “People conflate ETFs with passive investing all the time,” Armour said. More

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    Homeowners associations can be a boon, or bust, for buyers. Here’s how to vet HOAs when house hunting

    While shopping for new homes is already competitive, prospective buyers should consider an additional factor when weighing the pros and cons of a given property: homeowners associations.
    HOAs can carry monthly fees as high as $1,000, the American National Bank of Texas found.
    As these associations become more common, prospective buyers should vet them before signing the deed.

    Miniseries | E+ | Getty Images

    Homebuyers are dealing with record-high costs this year amid interest rate hikes and shrinking supply.
    While shopping for homes is increasingly competitive, prospective buyers should consider an additional factor when weighing the pros and cons of a given property: the homeowners association, or HOA.

    Homeowners associations are run by community residents elected to be members of the board of directors, which govern the neighborhood by a set of rules and regulations. Homeowners pay the HOA fees to have common areas such as parks, roads and community pools maintained and repaired.
    More from Personal Finance:Companies lower salaries in job postingsBuyers must earn $400,000 to afford a home in these metro areasOnly 19% of Americans increased their emergency savings in 2023
    Mandatory membership in an HOA can cost homeowners a pretty penny, with dues as high as $1,000 a month, according to the American National Bank of Texas.
    If the board is running low on money or didn’t budget right, all they have to do is charge a special assessment, said Raelene Schifano, founder of the organization HOA Fightclub.
    “Unless the association members have 51% of the majority voting power, they can’t outvote a budget,” she added. “I’ve seen budgets go from $300 a month to $800 a month.”

    As 84% of newly built single-family homes sold in 2022 belonged to HOAs, per the U.S. Census Bureau, it will be important for prospective buyers to vet these organizations ideally before signing the deed.

    What kind of home are you considering?

    Different types of homes can be affiliated with an HOA, from single-family homes to co-operatives.
    Single-family homes are separate units where residents own both the plot of land and the house on it, said Clare Trapasso, executive news editor at Realtor.com. They have their own entrances and access to the street and don’t share utilities or other systems with other homes. 
    Townhomes and rowhomes are somewhat similar; however, they do share walls with units next to them, although they are separated by a ground-to-roof wall, added Trapasso.

    Meanwhile, condominiums, often called condos, and co-operatives, or co-ops, are units in a shared building where residences jointly own the common space, but their ownership structure is different. 
    In a condo, residents own their individual units but jointly own the land and the common areas with other residents. Condos are run with a board of people on the homeowners association making decisions for the community, said Jaime Moore, a premier agent for Redfin.
    In a co-op, residents own shares of a company that owns the building and will have a board made up of each member of each unit creating a community where all parties have a say, he added.
    “Co-ops are popular in places like New York and Boston, but condos are generally more common throughout the rest of the country,” said Trapasso.

    Why HOAs are becoming so common

    A high percentage of new homes built nationwide today are part of developments managed by an HOA due to the financial benefit for local governments, according to Thomas M. Skiba, CEO of the Community Associations Institute, a membership organization of homeowner and condominium associations.
    “They don’t have to plow the street anymore [or] do all that maintenance and they still collect the full property tax value,” Skiba added, referring to local authorities.
    Homebuyers who want to avoid the additional costs associated with HOAs can search older homes on the outskirts of developments, said Redfin agent Moore. If you’re left with no other choice than to buy within an HOA-affiliated area, here are a few ways you can evaluate the organization.

    How to vet an HOA

    While real estate agents are not required nationwide to disclose to buyers if a property is tethered to an HOA, homebuyers can take initiative themselves and review the organization.
    Some states such as Nevada do require sellers to provide potential buyers a disclosure of all things that relate to the homeowners association, including their financial status and meeting minutes, said Redfin’s Moore. However, brush up with local and state laws to be aware of what your rights are as a homebuyer and potential homeowner.  

    These vetting tips may not apply to co-ops, and you may not have the time to completely investigate a given HOA.
    Here is a checklist from experts:

    Ask for a copy of all HOA paperwork, such as covenants, bylaws, rules and regulations, which serve as the community’s constitution, said Schifano of HOA Fightclub. Also ask for meeting minutes to see what repairs have been done or discussed.
    Inquire about monthly or annual fees, the HOA’s budget and the history of how assessments have gone up year to year, said Skiba.
    Look into the community’s reserve funds, which ensures repair and renovation. Check if the community is putting enough money aside for big expenses or if they are properly funded. “No one likes surprises, and that is the kind of big financial surprise [that can] be really problematic for every homeowner,” said Skiba.
    Search the HOA on the county website to see how many liens, judgments and foreclosures have been recorded within the community’s lifespan, said Schifano.
    Look at the financials and see how much in attorney’s fees is disclosed. This signals whether they are having a lot of issues, said Schifano.
    Check for permits with the county for reroofs, electrical and plumbing services for the community, she added.
    Request to attend at least one board or annual meeting if possible. A meeting helps buyers understand who is controlling the finances and decisions of the community, said Schifano. The annual meeting includes other homeowners. As a litmus test of whether the board is doing a good job, note if residents seem to be happy, in a fight or complacent.

    “The most important thing a buyer can do is to ask questions to their agent, the community association and neighbors,” said Skiba.Don’t miss these stories from CNBC PRO: More

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    Top Wall Street analysts say buy these dividend stocks for enhanced returns

    A Citibank sign in front of one of the company’s offices in California.
    Justin Sullivan | Getty Images

    The ongoing market volatility continues to add to investors’ woes, making it difficult for them to pick the right stocks.
    However, it is always better to have a longer-term investment horizon and look for names that can enhance total returns with safe dividends and capital appreciation.

    To that end, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

    Ares Capital

    This week we will first look at a high-dividend yield stock Ares Capital (ARCC). Ares is a business development company that offers a range of financing solutions to the middle market. The company recently reported a beat on third-quarter earnings, driven by higher interest rates and continued stable credit quality.
    The company also declared a dividend of 48 cents per share for the fourth quarter, payable on Dec. 28. ARCC offers a dividend yield of 9.8%.  
    Commenting on the Q3 results, RBC Capital analyst Kenneth Lee noted that credit performance is still good, with loans on non-accrual status declining slightly quarter-over-quarter to a very low 1.2% of the portfolio (on an amortized cost basis). That said, he thinks that non-accruals could rise sometime next year.
    The analyst highlighted other positives for Ares Capital, including portfolio diversification. The analyst also thinks that the company’s dividends are strongly backed by its core earnings per share generation and potential net realized gains.

    Lee reiterated a buy rating on ARCC stock with a price target of $21 saying, “We still favor ARCC’s strong track record of managing risks through the cycle, well-supported dividends, and scale advantages.”
    Lee ranks No. 251 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 57% of the time, with each delivering an average return of 12.6%. (See ARCC Stock Charts on TipRanks)  

    Citigroup

    Next on this week’s list is banking giant Citigroup (C). In October, the bank delivered better-than-anticipated results for the third quarter, fueled by strength in its institutional clients and personal banking units. Citi recently announced a massive reorganization that would simplify its operating model and enhance its business.
    The bank announced a quarterly dividend of 53 cents per share, payable on Nov. 22. Citi’s dividend yield stands at 5%.
    BMO Capital analyst James Fotheringham noted that Citi’s Q3 results were driven by higher-than-projected revenue (with net interest income coming in 5% above consensus), lower operating expenses, and reduced credit costs.
    The analyst raised his core earnings per share estimates for 2023, 2024, and 2025 by 11%, 6%, and 3%, respectively, to reflect lower than previously-modeled credit costs and a slower-than-expected decline in net interest margin.
    Fotheringham also increased his price target for the stock to $66 from $61 and reiterated a buy rating, saying, “C is our top pick among large-cap banks; shares trade at the largest discount (by far) to TCE [total capital employed] among the money-center banks.”   
    Fotheringham holds the 372nd position among more than 8,500 analysts on TipRanks. Moreover, 56% of his ratings have been profitable, with each generating an average return of 9.4%. (See Citigroup Blogger Opinions & Sentiment on TipRanks)

    McDonald’s

    Dividend aristocrat McDonald’s (MCD) recently reported its third-quarter results. The fast-food chain exceeded Wall Street’s expectations, thanks to higher prices that helped offset weakness in the traffic at U.S. restaurants.
    In early October, MCD announced a 10% hike in its quarterly dividend to $1.67 per share, which will be payable on Dec. 15. The company has increased its dividends for 47 consecutive years. The company pays a dividend yield of 2.5%.
    BTIG analyst Peter Saleh, who ranks No. 667 among more than 8,500 analysts on TipRanks, highlighted that the sales and earnings upside in MCD’s Q3 results was coupled with rather cautious comments about the U.S. traffic. Traffic had declined slightly due to reduced frequency from lower-income customers and pressure in the “breakfast daypart.”
    Nonetheless, the analyst noted that MCD still experienced wide geographic strength and remains better positioned than its rivals. Looking ahead, Saleh expects the company to accelerate its U.S. expansion next year, with his checks indicating that MCD has about 250 units in the pipeline. He also expects the company to have a greater focus on value and digital engagement, as well as an expansion of its automated order-taking technology in 2024.
    “We view McDonald’s as one of the strongest restaurant concepts in the world that is in the middle stages of a multi-year sales recovery,” said Saleh.
    Saleh reiterated a buy rating on McDonald’s stock with a price target of $300. His ratings have been successful 52% of the time, with each rating delivering an average return of 7.9%. (See McDonald’s Financial Statements on TipRanks)

    AT&T

    We now move to telecommunications giant AT&T (T), which impressed investors by reporting robust subscriber additions for the third quarter, thanks to promotions and phone upgrades. Furthermore, the company raised its full-year free cash flow guidance to about $16.5 billion from $16 billion. AT&T offers an attractive dividend yield of 7%.
    On Oct. 26, Tigress Financial Partners analyst Ivan Feinseth reiterated a buy rating on AT&T stock with a price target of $28. The analyst highlighted that the rise in Q3 subscribers and cash flow mark a significant turn in AT&T’s business performance trends.
    He added that while 2022 was a transitional year, the company’s revenue, cash flow and profitability will rise significantly in 2023 and beyond, with the long-term growth driven by ongoing 5G and broadband rollout in business communications.
    “AT&T will increasingly leverage its 5G high-speed fiber network to drive ongoing subscriber growth and further enhance its Edge Computing capabilities,” said Feinseth.
    The analyst noted that AT&T reduced its debt by over $3 billion in Q3 2023, which would reduce interest expense and drive higher investment in its connectivity business. He thinks that the company will further optimize its dividend payout ratio such that it can support ongoing investments while returning cash to shareholders.
    Feinseth holds the 453rd position among more than 8,500 analysts on TipRanks. Moreover, 54% of his ratings have been successful, with each generating an average return of 8.2%. (See AT&T Hedge Fund Trading Activity on TipRanks)

    Target

    Feinseth is also bullish on another dividend stock: big-box retailer Target (TGT). The analyst thinks that near-term pressures create an attractive opportunity to buy the stock, as the company is well-positioned to drive revenue growth and profitability over the long term and further enhance shareholder value.
    The analyst expects Target’s multiple strengths — including its loyal customer base, operating efficiencies and enhanced fulfillment capabilities — to help it navigate ongoing consumer headwinds, marketing errors and inventory shrink troubles.
    Feinseth also highlighted that the retailer is enhancing its product offerings by adding several new products across its major product lines. It is also expanding its footprint by opening new stores while remodeling existing ones. (See Target Insider Trading Activity on TipRanks)    
    He pointed out that TGT initiated its dividend in 1967 and has increased its dividend annually since 1971. In June 2023, the company raised its quarterly dividend by about 2% to $1.10 per share, following a massive 20% increase in June 2022 to $1.08 per share. TGT’s dividend yield stands at 3.9%.
    Feinseth lowered TGT’s price target to $180 from $215 due to near-term challenges but maintained a buy rating, saying, “Increasing value focus in consumer spending trends, and moderation in inflationary pressures and input costs, will drive a reacceleration in Business Performance trends.” More

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    Retirement is overrated, Gen Z says, as ‘soft saving’ trend takes hold

    Generation Z is taking a more relaxed approach to their long-term financial security, according to a recent study.
    The so-called “soft saving” trend is about living in the moment, with less emphasis on retiring early — or none at all.
    But when it comes to savings, young adults should not discount the power of compound interest.

    Morsa Images | Digitalvision | Getty Images

    Soft saving gains steam in today’s economy

    Only recently, there was tremendous buzz around FIRE, an acronym that stands for Financial Independence, Retire Early, a movement built on the idea that handling your money super efficiently can help you reach financial freedom.
    But putting enough aside to get there has proved increasingly difficult.

    “Younger adults feel discouraged,” said Ted Rossman, senior industry analyst at Bankrate.
    Inflation’s recent run-up has made it harder for those just starting out. More than half, or 53%, of Gen Zers say a high cost of living is a barrier to their financial success, according to a separate survey from Bank of America.

    Younger adults feel discouraged.

    Ted Rossman
    senior industry analyst at Bankrate

    In addition to soaring food and housing costs, millennials and Gen Z face other financial challenges their parents did not as young adults. Not only are their wages lower than their parents’ earnings when they were in their 20s and 30s, but they are also carrying larger student loan balances.
    Roughly three-quarters of Gen Z Americans said today’s economy makes them hesitant to set up long-term financial goals and two-thirds said they might never have enough money to retire anyway, according to Intuit.
    Rather than cut expenses to boost savings, 73% of Gen Zers say they would rather have a better quality of life than extra money in the bank.
    Gen Z workers are the biggest cohort of nonsavers, Bankrate also found. 

    “As a wealth advisor, my radar goes up,” Kara Duckworth, managing director of client experience at Mercer Advisors, said of recent consultations with young clients.
    Many would rather spend their money on an extended trip, she said, than pad a savings account.
    But “first and foremost, do you have an emergency fund?” she asks such clients.
    Most financial experts recommend having at least three to six months’ worth of expenses set aside. If that seems unrealistic, consider saving enough to cover an emergency car repair or dentist bill, Duckworth advised. “You need to have at least some amount of liquid assets.”

    Don’t discount the power of compounding

    Young adults also have the significant advantage of time when it comes to saving for long-term goals such as retirement.
    “Every dollar you set aside in your 20s will compound over time,” Rossman said. The earlier you start, the more you will benefit from compound interest, whereby the money you earn gets reinvested and earns even more.
    “Compound interest is the eighth wonder of the world,” Rossman added, referring to an earlier comment Einstein reportedly said.

    Even if you don’t set aside much, put enough in your 401(k) to at least get the full employer match, Rossman also advised. Then, opt to auto escalate your contributions, which will steadily increase the amount you save each year. “That can grow tremendously over time.”
    There are no magic bullets, added Matt Schulz, chief credit analyst at LendingTree, but there are a few financial habits that pay off. “Most things around saving aren’t super complicated but it doesn’t mean they’re easy to do,” he said.
    “Just like having a healthy lifestyle, it’s just about doing the right things over and over again over time and having patience.”
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    Activist Engaged Capital sees a path to lift VF Corp’s share price and slash costs

    A shopper passes in front of a North Face store at the Easton Town Center mall in Columbus, Ohio, on Jan. 7, 2021.
    Luke Sharrett | Bloomberg | Getty Images

    Company: VF Corporation (VFC)

    Business: VF Corp. is a consolidator of consumer footwear and apparel brands. It engages in the design, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products, and it operates through three segments: outdoor, active and work. The company’s brands include The North Face, Timberland, Smartwool, Icebreaker, Altra, Vans, Supreme, Kipling, Napapijri, Eastpak, JanSport, Dickies and Timberland Pro brand names.
    Stock Market Value: $6.03B ($15.50 per share)

    Activist: Engaged Capital

    Percentage Ownership:  n/a
    Average Cost: n/a
    Activist Commentary: Engaged Capital was founded by Glenn W. Welling, a former principal and managing director at Relational Investors. Engaged is an experienced and successful small-cap investor and makes investments with a two- to five-year investment horizon. Its style is holding management and boards accountable behind closed doors. Engaged has had great success as an activist, but almost all that success has come at small-cap companies. The firm has generated consistent returns in its small-cap activism. However, of the 31 activist campaigns in their history, this is only the sixth one above a $2 billion market cap. In the previous five, the firm received board representation each time, but has struggled to see financial success.

    What’s happening

    On Oct. 17, Engaged announced that it took a stake in VF Corp. and called on the company to undertake a plan that includes reducing costs, restoring brand autonomy, enhancing the capital structure and refreshing the board. Shortly thereafter, on Oct. 24, Bloomberg reported that Legion Partners Asset Management has also taken a stake in VF Corp. and is calling for the company to divest some of its brands.

    Behind the scenes

    While VF Corp. is a consolidator of consumer footwear and apparel brands, it essentially is comprised of three brands that make up 79% of their revenue – Vans, The North Face and Timberland. Historically, the company was operationally focused and had relatively consistent operating margins. On Jan. 1, 2017, Steve Rendle became CEO and shortly thereafter, he commenced a significant reorganization of the business which included centralizing several key functions previously managed at the brand level and relying on acquisitions for growth. Most notably, in November 2020, he purchased Supreme for over $2 billion expecting (and receiving) $500 million of revenue in 2022 from the streetwear brand. This strategy expanded the corporate cost structure, reduced autonomy of brands and ultimately deprived core brands of capital to offset investments in a corporate center that he had built. Under his tenure, earnings before interest, taxes, depreciation and amortization (EBITDA) margins dropped over 300 basis points, total corporate expense increased 34% from $631 million to $844 million and the stock price has declined 31.27% versus an increase of 77.11% for the S&P 500. By the time Engaged got involved, the company was trading at 10-year lows, down more than 80% from where shares traded prior to the Covid pandemic. VF Corp. was in desperate need of a new CEO, and they got one. Rendle left the company in December 2022. On July 17, 2023, Bracken Darrell, the former CEO of Logitech, became the new CEO at VF Corp.

    Darrell spent the prior decade creating value as CEO of Logitech. During his time there, Darrell spearheaded a turnaround that included a major cost restructuring, reinvestment in design and innovation to help the company return to growth, as well as a significant improvement in profitability that led to a share price appreciation of over 900% during his decade-long tenure. So, it sounds like the board has found the right person for the job. Engaged thinks that this turnaround should start with unwinding duplicative costs, pointing out that there are over $300 million in cost savings that are actionable in the short term. However, just taking the company from 12% to 15% EBITDA margins will not reverse the sharp decline in the stock price. After this, Engaged suggests a restoration of brand autonomy, with a portion of the cost savings being reinvested to support growth and a product-driven turnaround at Vans. This is much easier said than done. The Vans brand has been in decline, dropping to $3.6 billion of revenue in 2023 from $4 billion in 2020. Engaged also urges VF Corp. to evaluate non-core divestitures to fix the balance sheet.
    At the very least, Engaged would like to see a commitment to no further acquisitions and a reduction of the dividend. The firm would like management to use the additional cash from these activities to pay down debt and support the turnaround at Vans and continued investment in The North Face to maintain its competitive edge. That is a lot to do with an uncertain amount of cash flow, but nearly three-fourths of the VF Corp.’s revenues are generated through wholesale and owned ecommerce channels, so it is easier to grow sales with less incremental capital. Engaged thinks that The North Face, plus the value of a stabilized Vans, could be worth over $30 per share, without applying any value to the remaining portfolio which includes Timberland, Supreme, Dickies and other small brands. After adding up all the pieces, Engaged sees a path to a $46 share price within three years.
    As this is a moving target with important decisions to be made every day, I would expect Engaged would want a board seat to help oversee this turnaround and hold management accountable if the firm is unsuccessful. Moreover, a majority of the current board members served through former CEO Rendle’s whole tenure and allowed the strategic mistakes to go on unchecked. So, fresh blood on the board would certainly be warranted. Engaged is likely working with management behind the scenes to discuss board representation. If no agreement is reached, the director nomination window opens on Jan. 14, 2024, at which time I would expect them to nominate directors.
    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.  More

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    Customers grapple with deposit delays at big banks. What it means for you

    Customers at several big banks on Friday wrestled with direct deposit delays stemming from an industry-wide processing issue.
    The Federal Reserve reported a problem with the Electronic Payments Network, a private sector operator for Automated Clearing House, or ACH, a network that processes transactions.

    A man walks by the Bank of America headquarters in New York on July 18, 2023.
    Eduardo Munoz | View Press | Getty Images

    Customers at several big banks on Friday wrestled with direct deposit delays stemming from an industry-wide processing issue.
    There was a surge of “outages” reported by banking customers Friday morning, including Bank of America, Chase, Truist, U.S. Bank and Wells Fargo, according to Downdetector. But the site does not specify the nature of the complaints.

    All Federal Reserve Financial Services are operating normally, according to a Federal Reserve statement released Friday.
    More from Personal Finance:Social Security changes to help those not able work to full retire ageProgram gets 200,000 students automatic college acceptanceWhat to know as open enrollment begins for ACA insurance
    The Fed reported a processing issue with the Electronic Payments Network, a private sector operator for Automated Clearing House, or ACH, a network that processes transactions.
    “There was a processing error with an ACH file last night; it was a manual error associated with the file,” said Gregory MacSweeney, vice president and head of communications at The Clearing House, the banking association and payments company that owns the EPN processing system.
    Banks are now working to correct the errors in those payments, he said.

    “We’re aware of an industry-wide technical issue impacting some deposits for Nov. 3,” Lee Henderson, vice president of public affairs and communications at U.S. Bank, told CNBC in a statement. “Customer accounts remain secure, and balances will be updated when deposits are received.”

    “We do not have an estimate on timing at this point,” Henderson added. “Customers do not need to take any action.”
    “The originators of these deposits are working to resend the payment files, and we will post them as soon as we can,” said a Chase spokesperson in a written statement. Bank of America, Truist and Wells Fargo did not provide commentary by publication time.
    Customers affected by the deposit delays can call their lenders and explain their late payments were due to an industry-wide issue, said Matt Schulz, chief credit analyst at LendingTree.
    “When money that we expect to be there on a Friday morning isn’t there and your autopay is set up to pay a credit card or a buy now pay later loan, it can cause some real issues,” he said.Don’t miss these stories from CNBC PRO: More

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    Cooling job market no reason for panic yet, economists say: ‘It’s a slowdown, not a collapse’

    U.S. job growth fell to 150,000 last month and unemployment rose to 3.9%, according to the U.S. Bureau of Labor Statistics’ October jobs report.
    Workers have lost some bargaining power and leverage from the historic levels seen in 2021 and 2022.
    Despite a broad cooldown, the labor market has been resilient in the face of headwinds and there doesn’t seem cause for panic yet, economists said.

    Jobseekers wait in line at a Nov. 2, 2023 career fair in Los Angeles.
    Frederic J. Brown | Afp | Getty Images

    The unemployment rate rose to 3.9% in October, from 3.8% in September, the BLS said. Average hours worked declined slightly to 34.3 a week, the “very bottom end of the range” typical for good economic times, Pollak said.
    “There’s almost no exception in this report: Every indicator suggests a slowing, slackening labor market,” she said.

    Yet, there’s cause for optimism. The job market has proven resilient in the face of economic headwinds and remains healthy in historical terms, economists said.
    “The days of explosive growth are gone, as the labor market shifts into healthier and more sustainable territory,” said Noah Yosif, lead labor economist at UKG, a payroll and shift management company. “All indicators point to a continued lull in the immediate future. It’s a slowdown, not a collapse.”

    Workers have lost some leverage

    Why the data isn’t so gloomy

    The overall jobs figure for October would have been higher — closer to 200,000 — absent strikes among autoworkers, actors and other union workers, economists said.
    That would have been a “pretty spectacular number,” said Aaron Terrazas, chief economist at Glassdoor, a career site.
    “On the surface it was a weak number, but this was clearly clouded by all of the strikes that were happening mid-month,” Terrazas said.

    Indeed, there were nearly 50,000 workers on strike during the reference period the BLS uses to compile the jobs report, which was the largest number of workers on strike dating to 2004, Terrazas said.
    Those strikes are now largely resolved.
    The unemployment rate also remains below 4%, a key barometer.
    “It tends to do great things in the labor market” when below 4%, Pollak said. “It tends to cause people to come off the sidelines, cause racial and gender wage gaps to narrow and force employers to improve working conditions and expand their talent pools.”

    However, the unemployment rate was 3.5% just a few months ago, in July, and it’s rare to see that big an increase outside of recessions, Andrew Hunter, deputy chief U.S. economist at Capital Economics, said Friday in a research note.
    That recent rise isn’t yet “panic-worthy,” but further increases “may begin to trip some recessionary alarm bells,” said Nick Bunker, head of economic research at job site Indeed.
    The rise in the unemployment rate may also just be a sign that the extremely hot labor market is loosening a bit, Bunker added.

    The labor market cratered in the early days of the Covid-19 pandemic amid mass job loss, a scale unseen since the Great Depression. However, it began heat up in 2021 and 2022 as the U.S. economy reopened and business’ demand for workers spiked to a historic level.
    Now, the Federal Reserve has raised interest rates to cool the economy and tame inflation. That increase in borrowing costs for households and businesses is beginning to bite, Pollak said.
    “While much in today’s payroll report appeared to confirm a continued slowing in the labor markets, it’s remarkable to witness how dynamic and resilient employment has been in the wake of the pandemic and inflationary shocks,” said Rick Rieder, head of the global allocation investment unit at asset manager BlackRock. More