Markus Andrews

Jakub Porzycki | Nurphoto | Getty Images

The U.S. stock market has been under pressure recently due to fears of an economic slowdown, but dividend-paying names can help smooth the ride for investors.
Investors can consider the recommendations of top Wall Street analysts as they search for stocks that are backed by strong financials and the ability to pay dividends consistently.   

Here are three attractive dividend stocks, according to Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
Pfizer
Health-care giant Pfizer (PFE) is this week’s first dividend stock. The company announced better-than-expected second-quarter results, driven by its cost-cutting initiatives and solid sales of non-Covid products. Pfizer raised its full-year guidance, reflecting strong demand for its non-Covid business, which is gaining from several acquired drugs and recently launched products.
In the first six months of 2024, Pfizer returned $4.8 billion to shareholders through dividends. The stock has a dividend yield of 5.9%.
In reaction to the upbeat Q2 results, Goldman Sachs analyst Chris Shibutani reiterated a buy rating on PFE stock and increased the price target to $34 from $31. The analyst said that while he anticipated that Pfizer will raise its outlook, the magnitude of the increase surpassed his expectations.
The analyst increased his revenue estimates to reflect the strength in PFE’s heart disease drug, Vyndaqel, and cancer treatment Padcev. He also raised his EPS estimates, thanks to improved top-line expectations and enhanced gross margin.

Shibutani said that while management didn’t provide any significant updates related to the company’s obesity programs, he does see the “scope for further beat and raise quarters during the balance of the year.” He also noted that the company’s capital allocation priorities, mainly dividends and debt reduction, remain intact. 
Shibutani ranks No. 462 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 46% of the time, delivering an average return of 13%. (See Pfizer Stock Charts on TipRanks)  
Civitas Resources
We move to oil and natural gas producer Civitas Resources (CIVI). On Aug. 1, the company announced its second-quarter results and declared a quarterly dividend of $1.52 per share, payable on Sept. 26.
The amount included a base dividend of 50 cents per share and a variable dividend of $1.02 per share.  
CIVI’s shareholder return policy involves the payment of at least 50% of its free cash flow (after the payment of its base dividend) as a variable component. Interestingly, the company has now revised its shareholder-return program to enhance the flexibility in the way it rewards shareholders with variable returns. Effective Q3 2024, CIVI’s variable component will include a combination of buybacks and dividends, with management and the board deciding the allocation. CIVI also announced a new share buyback plan of up to $500 million.
Following the Q2 results, Mizuho analyst William Janela reaffirmed a buy rating on CIVI stock with a price target of $98, calling the company a top pick. The analyst stated that Civitas delivered another quarter of solid execution across the Permian assets acquired in 2023. 
Commenting on the revised shareholder-return program, Janela said that it gives the company “flexibility to lean more heavily into buybacks, which should resonate with investors and sets up positively into the meaningful FCF [free cash flow] expansion ahead in 2H24.”
The analyst highlighted that Civitas lowered its capital expenditure budget for the year by about 3%, fueled by reductions in well costs as the company integrates its Permian acquisitions. Additional well-cost savings in the DJ Basin also helped the company lower its 2024 capex estimate. 
Janela ranks No. 406 among more than 8,900 analysts tracked by TipRanks. His ratings have been successful 52% of the time, delivering an average return of 25.6%. (See Civitas Resources Stock Buybacks on TipRanks)  
IBM
Finally, there is tech giant IBM (IBM), which recently impressed investors with better-than-expected results for the second quarter. The company, which is seeing solid generative artificial intelligence business, now expects full-year free cash flow to be more than $12 billion compared to its previous forecast of about $12 billion.
IBM returned $1.5 billion to shareholders in dividends in the second quarter. The stock offers a dividend yield of 3.5%. IBM’s dividends are supported by strong cash flows. The company is confident about its growth potential, bolstered by the strength of its diversified business model and the hybrid cloud and AI strategy. 
Following the print, Evercore analyst Amit Daryanani reiterated a buy rating on IBM stock with a price target of $215. He noted that the growth in the company’s software and infrastructure businesses was partially offset by the pressures in the consulting business due to weak discretionary spending by enterprise customers. The analyst added that the overall Q2 results were better than feared.
Commenting on shareholder returns, Daryanani noted the company did not make any share repurchases in the second quarter but remains “committed to a stable and growing dividend.” He expects IBM to allocate more capital to mergers and acquisitions compared to share repurchases.
Daryanani ranks No. 429 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 54% of the time, delivering an average return of 10.4%. (See IBM Ownership Structure on TipRanks)  

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With less than 90 days until the presidential election, voters are focusing on economic policies of the candidates that could impact their wallets.
Vice President Kamala Harris this week unveiled her running mate, Minnesota Gov. Tim Walz, and former President Donald Trump in July selected Sen. JD Vance of Ohio.
Experts cover where the candidates stand on key issues like housing, the child tax credit and student loan forgiveness.

Democratic vice presidential candidate and Minnesota Governor Tim Walz (L), and Republican Vice Presidential candidate Sen. JD Vance (R-OH).
Getty Images

Housing

Affordable housing is an important topic for many Americans and both Walz and Vance have addressed the issue.

In May 2023, Walz signed housing legislation that included $200 million in down payment assistance. The bill also had $200 million for housing infrastructure and $40 million for workforce housing.
“We expect Walz to be an advocate for demand-side approaches to housing,” Jaret Seiberg, analyst at TD Cowen wrote in a July statement. “These are the type of housing ideas we would expect in a Harris administration,” she wrote.
Demand-side approaches to housing aim to help individual households by improving housing quality or reducing monthly housing costs.

Meanwhile, Vance, who is also a proponent of affordable housing, highlighted the issue in his Republican National Convention acceptance speech and along the campaign trail.
“Prior to running for Senate, Vance argued that one key to tackling poverty is to address affordable housing,” and he has opposed institutional ownership of rental homes and Chinese buyers for U.S. real estate, Seiberg wrote.

Child tax credit

Without action from Congress, trillions of tax breaks enacted by Trump are scheduled to expire after 2025, including the child tax credit, which will drop from $2,000 to $1,000 per child. 
Congress in 2021 approved a temporary expansion of the child tax credit, including upfront monthly payments, which reduced the child poverty rate to a historic low of 5.2% for 2021, according to a Columbia University analysis.
Following the federal policy, Minnesota enacted a refundable state-level child tax credit in 2023, which Walz described as “signature accomplishment.”    

Minnesota’s new child tax credit is unusual in its narrowness, but it is the most generous in the nation for low-income households.

Jared Walczak
Vice president of state projects at the Tax Foundation

“Minnesota’s new child tax credit is unusual in its narrowness,” said Jared Walczak, vice president of state projects at the Tax Foundation. “But it is the most generous in the nation for low-income households.” 
However, a permanent federal child tax credit expansion could be difficult, particularly amid a divided Congress and increasing concerns over the federal budget deficit.
Walz’s campaign did not respond to CNBC’s request for comment.
Senate Republicans blocked a federal child tax credit expansion last week, and Sen. Mike Crapo, R-Idaho, the ranking member of the Senate Finance Committee, described the vote as a “blatant attempt to score political points.”
Despite the failed procedural vote, Crapo voiced openness to negotiating a “child tax credit solution that a majority of Republicans can support.”
Democrats scheduled the vote partially in response to Vance, who has positioned himself as a pro-family candidate. Vance was not present for the Senate vote, but has expressed support for the child tax credit.
Vance’s campaign did not respond to CNBC’s request for comment. 

Student loans

Vance has spoken out against student loan forgiveness policies.
“Forgiving student debt is a massive windfall to the rich, to the college educated, and most of all to the corrupt university administrators of America,” Vance, a Yale Law School graduate wrote on X in April 2022. “Republicans must fight this with every ounce of our energy and power.”
Outstanding education debt in the U.S. stands at around $1.6 trillion. Nearly 43 million people — or 1 in 6 adult Americans — carry student loans. Women and people of color are most burdened by the debt.

Vance does seem to approve of loan forgiveness in extreme cases. In May, he helped introduce legislation that would excuse parents from student loans they took on for a child who became permanently disabled.
Jane Fox, chapter chair of the Legal Aid Society Attorneys union, UAW local 2325, said it was hypocritical and incorrect of Vance to frame debt relief as a benefit to those who are well off.
“Student debt forgiveness is a working-class issue,” Fox said. “Those in the 1% who went to elite institutions and then worked in private equity as Senator Vance did rarely need debt relief.”
Vance’s campaign did not respond to CNBC’s request for comment.   
Meanwhile, Walz, a former school teacher, has supported programs to alleviate the burden of student debt on people, said higher education expert Mark Kantrowitz.
He signed a student loan forgiveness program for nurses into law in Minnesota, Kantrowitz said, as well as a free tuition initiative for low-income students.
“As my daughter prepares to head off to college next year, affordability and student loan debt are at the front of our minds,” Walz wrote on Facebook in 2018. “Every Minnesotan deserves a shot at a great education without being held back by soaring costs and student loan debt.” More

A man walks past Kobayashi Pharmaceutical’s headquarters building in Osaka on April 2, 2024.
Yuichi Yamazaki | AFP | Getty Images

Company: Kobayashi Pharmaceutical (4967.T)

Business: Kobayashi Pharmaceutical manufactures and sells pharmaceuticals and consumer products in Japan and internationally. The company operates in three segments: The Domestic Business and International Business segments offer health care, household, skin care and other products. The Company recently merged its mail-order segment into its domestic business segment, which is engaged in the mail-order sale of dietary supplements, skin care and other products. The Other segment is engaged in transportation, plastic container manufacturing, real estate management and advertising planning and production.
Stock Market Value: ~440 billion Japanese yen (5,635 yen per share)

Activist: Oasis Management Company

Percentage Ownership:  5.20%
Average Cost: n/a
Activist Commentary: Oasis Management is a global hedge fund management firm headquartered in Hong Kong with additional offices in Tokyo and Austin, Texas, as well as the Cayman Islands. Oasis was founded in 2002 by Seth Fischer, who leads the firm as its chief investment officer. Oasis is an authentic international activist investor, doing activism primarily in Asia (and occasionally Europe). The firm seeks to identify investment opportunities that are undervalued and have great potential for value creation. The firm has an impressive track record of prolific and successful international activism. Oasis has as many arrows in its quiver as any activist and has been successful in getting seats on boards, opposing strategic transactions, advocating for strategic actions, improving corporate governance and holding management accountable.

What’s happening

Oasis recently reported a 5.20% position in Kobayashi. Amid a scandal around Kobayashi’s red koji-related products, Oasis said that it could engage the company if there was no self-improvement and suggested three paths for value creation: (i) Kobayashi could improve operational performance on its own; (ii) go private via a management buyout; or (iii) work with Oasis to improve operational performance, corporate governance and the constitution of the board.

Behind the scenes

Kobayashi Pharmaceutical is a Japan-based pharmaceuticals and consumer products company. It owns a stable of over 150 brands in categories across pharmaceuticals, oral care, food, skin care, air fresheners, mail order and more. The company generated 173.45 billion yen of sales in 2023 with 75% coming from domestic sales, 24% from international sales, and less than 1% from its other businesses. While the business posted record revenue in 2023, it was coming off of a declining base and only narrowly exceeded its 2018 revenue of 167 million yen. Moreover, since 2019, return on assets declined from 12% to 10.4%, return on equity from 11.3% to 10.1% and operating margins from 16.2% to 14.9%. As a result, the company’s shares declined over 45% from its peak in December 2020 to the end of 2023.

Matters went from bad to worse in early 2024 amid reports of health issues that appeared to be linked to Kobayashi’s red koji-related products. In March, the company recalled three products. Subsequently, Kobayashi began an investigation into the matter and formed a fact-finding committee to assess the situation and the board’s response. Last month, the company released the results of the investigation. While the committee concluded that the company did not engage in any malicious actions to conceal the matter, it also found that Kobayashi lacked awareness of the safety of health foods and failed to make timely reports and consultation to the board, auditors, government and consumers. The committee also found that the company lacked preparation for health damages and failed to invest sufficient resources into quality control. The scandal around the red koji supplement has sent the stock down nearly 20% since the end of 2023.
In May, Oasis Management highlighted the opportunity at Kobayashi. At that time, Oasis highlighted that this was not a case of an extraordinary or unimaginable crisis. At the time, Oasis said that they could step in if there was no “self-improvement” and that the company would stand to gain if it implemented improved crisis management protocols and improved corporate governance to better hold management accountable and root out nepotism. Oasis suggested three paths for value creation: (i) improve operational performance on its own; (ii) go private via a management buyout; or (iii) work with Oasis to improve operational performance, corporate governance, and the constitution of the board.
In July, president and CEO Akihiro Kobayashi and Chairman Kazumasa Kobayashi resigned from their roles. However, Akihiro Kobayashi remained on the board to continue handling compensation for victims, and Kazumasa Kobayashi was made a special advisor to the company. Both individuals announced they would return approximately half of their compensation from the past six months. Executive officer and head of sustainability management Satoshi Yamane took over as president and CEO.
Now, Oasis reported a 5.20% stake in the company, likely a sign that the activist is ready to begin engaging management more aggressively. It is clear to us that Kobayashi needs a reset and that Oasis is a willing and able partner to do so, but it is yet to be seen if the newly appointed CEO and shaken board will play ball. The company’s annual meeting passed in March 2024 before the results of the fact-finding committee were released, so we will have to wait nearly a year before Oasis could submit any shareholder proposals barring the requisition of an Extraordinary Meeting. This is a board which has overseen several product recalls and has been found to be ineffective in its oversight role of quality assurance and crisis management. While accepting the resignations of Akihiro and Kazumasa Kobayashi is a step in the right direction, keeping them involved with the company is more telling as to how this board weighs shareholder concerns versus management interests.
Kobayashi would be wise to overhaul much of its board and auditors, and at minimum invite a representative of Oasis onto the board. It would imbue the company with a sense of urgency to improve operational performance, corporate governance and shareholder value maximization. Moreover, Oasis has an extensive history of working to improve corporate governance at its Japanese portfolio companies, delivering an average 31.7% return on its Japanese campaigns with a corporate governance thesis versus 1.9% for the MSCI EAFE index. Despite this, a board invitation to an activist is something that rarely happens in Japanese companies today. If Oasis wants to create value for shareholders from a board level, it is something that would probably have to happen through a proxy fight. But that is also a long shot, even at a company with corporate governance issues as we have here. Oasis has encountered difficulties recently in campaigns which have centered around poor corporate governance, being delivered losses at the 2024 annual general meetings of Hokuetsu and Ain Holdings. The recent loss at Ain was especially disconcerting, as the pharmacy company had displayed problematic corporate governance, yet Oasis was unable to achieve enough shareholder support to gain board representation.
This is not a criticism of Oasis. The firm is a top-tier Japan shareholder activist and if anyone can get board seats in Japan, it is Oasis. Rather, it is more of a reality of Japanese corporate governance, which has come a long way over the past several years but has much further to go. Oasis is not the type of activist to be deterred from one or two losses: Japanese activists are used to losing proxy fights. We would hope the firm pursues this for the sake of Kobayashi shareholders and to continue the upward momentum toward better corporate governance in Japan.
If the firm receives a board seat, Oasis could assist in assessing strategic alternatives, including a management buyout at Kobayashi’s currently depressed share price or an acquisition by a strategic acquirer who could improve quality assurance and integrate it into a more well-governed structure. Oasis has been very active in Japanese pharmaceuticals and drug store companies in recent years. The firm has cited consolidation as a major structural theme, campaigning for change at Tsuruha Holdings, Kao Corp, Ain Holdings and management buyout opposition at Taisho Pharmaceutical Holdings.
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

Power companies such as Constellation Energy and Vistra are in talks with customers interested in directly connecting data centers to nuclear plants.
Constellation and Vistra shares have soared as investors see a chance for their nuclear plants to power the tech sector.
But connecting data centers directly to nuclear plants already faces controversy.
Some utilities have challenged an agreement between Amazon and Talen Energy.

A cooling tower at the Constellation Nine Mile Point Nuclear Station in Scriba, New York, US, on Tuesday, May 9, 2023. 
Lauren Petracca | Bloomberg | Getty Images

Tech companies are increasingly looking to directly connect data centers to nuclear plants as they race to secure clean energy to power artificial intelligence, sparking resistance from some utilities over the potential impact on the electric grid.
Data centers, the computer warehouses that run the Internet, in some cases now require a gigawatt or more of power, comparable to the average capacity of a nuclear reactor in the U.S.

The data centers are essential to U.S. economic competitiveness and national security as the country competes with adversaries such as China for supremacy in the race to develop AI, said Joe Dominguez, the CEO of Constellation Energy, which operates the largest nuclear fleet in the U.S.
“When you’re talking about large [demand] load that also wants to use zero-emission energy, you’re going to bring it very close to nuclear power plants,” Dominguez said on Constellation’s second-quarter earnings call Tuesday. Constellation, headquartered in Baltimore, operates 21 of the 93 reactors in the U.S.
Constellation’s shares have surged 58% this year, the sixth-best stock in the S&P 500, as investors attach a higher value to the company’s nuclear power capacity to meet the growth in data centers. Shares of Vistra Corp., based outside Dallas and owner of six reactors, have doubled this year, the second-best performing stock in the S&P after AI chipmaker Nvidia.
Tech companies are building out data centers just as power supply is increasingly constrained due to the retirement of coal plants and as demand is climbing from the expansion of domestic manufacturing and the electrification of vehicles.
The largest grid operator in the U.S., PJM Interconnection, warned in late July that power supply and demand is tightening as construction of new generation lags demand. PJM covers 13 states primarily in the Mid-Atlantic region, including the world’s largest data center hub in northern Virginia.

Constellation’s Dominguez argued that connecting data centers directly to nuclear plants, called co-location by the industry, is the fastest and most cost-effective way to support the buildout of data centers, without burdening consumers with the costs of building new transmission lines.
“The notion that you could accumulate enough power somewhere on the grid to power a gigawatt data center is frankly laughable to me — that you could do that in anywhere that doesn’t start with decades of time,” Dominguez said. “This is an enormous amount of power to go out and try to concentrate.”

Amazon’s nuclear agreement

But co-locating data centers next to nuclear plants already faces controversy.
In March, Amazon Web Services bought a data center powered by the 41-year-old Susquehanna nuclear plant in Pennsylvania from Talen Energy for $650 million . But the agreement to directly sell power to the AWS data center from the nuclear plant already faces opposition from utilities American Electric Power and Exelon, who have filed complaints at the Federal Energy Regulatory Commission (FERC).
AEP and Exelon argue that the deal between Amazon and Talen sets a precedent that will result in less available power in the PJM grid area as resources “flee to serve load that uses and benefits from — but does not pay for — the transmission system”
“This will harm existing customers,” the utilities told FERC in a filing in June. Talen Energy has dismissed the objections as “demonstrably false,” accusing the utilities of stifling innovation.
“The rapid emergence of artificial intelligence and data centers has fundamentally changed the demand for power and leads to an inflection point for the power industry,” Talen said in a June statement. “Talen’s co-location arrangement with AWS brings one solution to this new demand, on a timeline that serves the customer quickly.”
FERC has requested more information on the service agreement between Talen and AWS. The regulator is holding a conference in the fall to discuss issues associated with connecting large electricity loads directly to power plants.
“It really is a great opportunity for there to be interaction between stakeholders and the commissioners in an informal setting like a conference, as opposed to doing so in litigation,” Kathleen Barrón, chief strategy officer at Constellation, said on the power company’s recent earnings call, referring to the fall FERC meeting.

Shopping for nuclear power

Constellation and Vistra have backed the AWS-Talen agreement in filings to FERC, with each of their CEOs saying on their earnings calls this week that co-location and traditional grid connection will be needed to meet demand.
Barrón told CNBC that Constellation has “seen interest from many” tech companies in potentially co-locating a data center at one of its sites.
Vistra is having numerous conversations with customers about co-location and is “in due diligence for a number of sites,” CEO Jim Burke said Thursday. With the dispute in the PJM region over co-location, data center developers may take a closer look at Texas, which operates its own grid called ERCOT, Burke said.
“We’re seeing some interest in Comanche Peak,” Burke told analysts on the company’s second-quarter earnings call, referring to one of Vistra’s nuclear plants. Comanche Peak, about 50 miles outside Fort Worth, Texas, has two reactors with 2.4 gigawatts of capacity, enough to power 1.2 million homes in typical conditions and 480,000 homes in peak periods, according to Vistra.
And Dominion Energy has indicated it is open to connecting a data center to the Millstone nuclear plant in Connecticut. The Dominion service region includes northern Virginia, the epicenter of the data center boom.
“We continue to explore that option,” CEO Robert Blue said on Dominion’s second-quarter earnings call. “We do clearly realize any co-location option is going to have to make sense for us, our potential counterparty and stakeholders in Connecticut.”
Kelly Trice, president of Holtec International, a privately held nuclear company headquartered in Florida, said the U.S. needs to start thinking more about balancing the power needs of data centers with those of all consumers. Holtec is working to restart the Palisades nuclear plant in Michigan and has also had conversations with tech companies about nuclear energy.
“Essentially, the hyperscalers and the data centers can take all the power and the consumer not get any of that if we’re not careful,” Trice told CNBC. “So the balance there, where the consumers actually get what is rightfully theirs too, is a factor.”
“The United States hasn’t really started wrestling [with] that yet,” Trice said. “But I think we’re getting close.” More

Former President Donald Trump repeated his plan to eliminate taxes on Social Security benefits for seniors.
But the plan could accelerate insolvency for the Social Security and Medicare trust funds, experts say.
Roughly 40% of Americans who receive Social Security benefits pay federal income tax, according to the Social Security Administration. 

Republican presidential nominee and former U.S. President Donald Trump holds a campaign rally in Harrisburg, Pennsylvania, U.S., July 31, 2024.
Elizabeth Frantz | Reuters

Trump’s plan could move insolvency for Social Security, including the disability program, up two years, from 2035 to 2033, according to the Tax Foundation. Insolvency for Medicare could move up six years, from 2036 to 2030.

“President Trump delivered on his promise to protect Social Security and Medicare in his first term” and will “continue to strongly protect Social Security and Medicare in his second term,” Trump campaign national press secretary Karoline Leavitt said in a statement.
She said Trump will boost the U.S. economy and strengthen Social Security, “all the while eliminating taxes on Social Security for America’s well-deserving seniors.”

Cutting tax primarily benefits higher earners

“In the short run, [Trump’s plan] will provide a fairly modest benefit, on average, to Social Security beneficiaries,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. “But nearly all of that benefit goes to high-income retirees who really don’t need it.”
For 2025, the tax break could save U.S. households an average of $550, according to a Tax Policy Center analysis released Aug. 1. But households could see an average tax break of $90 with income between $32,000 and $60,000 or no benefit with earnings of $32,000 or less.

Roughly 40% of Americans who receive Social Security benefits pay federal income tax, and several states collect taxes on Social Security.
The federal income tax formula uses “combined income,” including your adjusted gross income, non-taxable interest and one-half of Social Security benefits.
With combined income between $25,000 and $34,000 — or $32,000 and $44,000 for married couples filing jointly — up to 50% of Social Security benefits may be taxable. Once combined income exceeds those levels, up to 85% of your Social Security benefits could be subject to tax.
The thresholds don’t adjust for inflation, so “it’s hitting middle-income people who have Social Security benefits and probably a pension or 401(k),” Gleckman said. More

The Biden administration’s new affordable repayment plan, known as SAVE, may be on hold for months or longer due to legal challenges.
Here’s what borrowers should know in the meantime.

Alistair Berg | Digitalvision | Getty Images

Why the SAVE plan is on hold

The SAVE plan has been a magnet for controversy ever since the Biden administration rolled out the program in the summer of 2023, describing it as “the most affordable student loan plan ever.”
Indeed, the terms of the new income-driven repayment plan are the most generous to date.
SAVE comes with two key provisions that legal challenges have targeted: It has lower monthly payments more than any other federal student loan repayment plan, and it leads to quicker debt erasure for those with small balances.

Republican-led states that have sued the U.S. Department of Education over SAVE argue that the agency overstepped its authority and essentially is trying to find a roundabout way to forgive student debt after the Supreme Court blocked its sweeping plan in June 2023.

Before the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE plan.
Those who have already received the relief are not impacted by any pause to the plan, experts say.

Payments are not due for now

No credit toward forgiveness

Unlike during other payment pauses on student loans, months during this forbearance will not count toward borrowers’ timeline to loan forgiveness.
That means those enrolled in SAVE who are hoping to eventually get their debt cleared under either the income-driven repayment plan’s terms or Public Service Loan Forgiveness are not getting credit for this period in which they’re not making payments.
However, borrowers pursuing student loan forgiveness should still explore their options, said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing.

For example, the Education Department offers a so-called buyback option for borrowers working toward PSLF who might have missed payments. That opportunity lets borrowers close to debt forgiveness get credit for previous months by retroactively making payments, Rubin said.
Alternatively, borrowers who don’t want to lose credit for the months they spend in this forbearance might consider switching to another income-driven repayment plan, Rubin said.
“However, transitioning between repayment plans may take several months,” she said. “Some borrowers have reported that their servicers informed them it could take up to 90 days.”
Also, even if they’re not moving closer toward debt forgiveness for the time being, SAVE enrollees are benefiting from a $0 monthly payment, Kantrowitz pointed out.
“Borrowers do not lose anything because of the pause, other than time,” he added. More

Debby has weakened to a post-tropical storm, after making landfall in Florida as a Category 1 hurricane Monday.
It’s expected to bring more heavy rain and flooding to the Mid-Atlantic and Northeast on Friday and into the weekend.
Homeowners insurance doesn’t cover flood damage. You need a separate flood insurance policy.
Flood insurance generally doesn’t cover items stored in basements, however.

A flooded street caused by the rain and storm surge from Hurricane Debby on Aug. 05, 2024, in Cedar Key, Florida.
Joe Raedle | Getty Images

You need a separate insurance policy for floods

A house is surrounded by floodwaters from Tropical Storm Debby on Aug. 6, 2024 in Charleston, South Carolina.
Miguel J. Rodríguez Carrillo | Getty Images

Flooding causes 90% of annual disaster damage in the U.S., according to the Federal Emergency Management Agency.
Just an inch of water can cause roughly $25,000 of damage to a property, the agency said.
Homeowners and renters insurance policies do not cover flood damage, however.
Consumers need separate insurance to cover physical damage caused by a flood, which is defined as water entering a home from the ground up. That may occur due to storm surge, heavy rainfall or an overflowed body of water like a lake or river.
Most people who have flood insurance get it through the federal government, via FEMA’s National Flood Insurance Program, experts said.

Americans had about 4.4 million residential NFIP policies at the end of 2023, according to FEMA. They had total coverage of $1.2 trillion.
Many homeowners go without coverage, though. On average, about 30% of U.S. homes in the highest-risk areas for flooding have flood insurance, according to the University of Pennsylvania’s Wharton Risk Center.
Nearly 21,000 policyholders filed a claim in 2023, with an average payment of almost $46,000, according to FEMA data.
The average annual flood insurance premium was $700 in 2019, FEMA said.
Private insurers also offer flood policies and may offer higher coverage than FEMA’s policies, according to the Insurance Information Institute.

What items aren’t covered in a basement?

A Johnson, Vermont, resident removes items destroyed in flooding of a finished basement in 2023.
Jessica Rinaldi/The Boston Globe via Getty Images

American basements can be a hodgepodge of personal property, leveraged as storage units, man caves, game rooms, wine cellars, home bars and secondary living rooms.
But basement coverage “is limited” through NFIP policies, FEMA said.
The agency defines a “basement” as any area of a building with a floor below ground level on all sides.
Even rooms that aren’t fully below ground level — like sunken living rooms, crawlspaces and lower levels of split-level buildings — may still be considered basements, the agency said.

Its flood policies exclude the following items from coverage in a basement:

“Personal property” like couches, computers, or televisions
Basement improvements (such as finished flooring, finished walls, bathroom fixtures, and other built-ins)
Generators (and similar items)
Certain dehumidifiers

Items “stored in a basement, meaning they are not connected to a power source,” aren’t covered, FEMA said.
Consumers concerned about flood risk and insurance coverage should consider removing their stuff from a basement, if possible, Kochenburger said. They should “move it to a storage unit or somewhere else” on higher ground, he said.

These basement items are included, with an add-on

A man uses a mop to wipe up rain water on the interior of the Lincoln Memorial on Aug. 09, 2024 in Washington, DC. The Washington DC area experienced a tornado warning and flooding as a result of remnants from Debby. 
Anna Moneymaker | Getty Images

The following basement items are covered, but only if NFIP policyholders buy additional “contents coverage,” which is optional, and if connected to a power source, FEMA said:

Clothes washers and dryers
Air conditioners (portable or window units)
Food freezers and the food in them (excluding walk-in freezers)

Private insurance policies may offer broader property coverage in basements, depending on the insurer, Don Griffin, vice president of policy and research at the American Property Casualty Insurance Association, previously told CNBC.

You can put anything you want in your basement, but don’t expect it to be insured for floods.

Peter Kochenburger
visiting law professor at Southern University Law Center

One silver lining to all this: Fewer U.S. homes are being built with basements.
The share of new single-family homes with full or partial basements has fallen by more than half since the mid-1970s, from 45% to 21%, according to U.S. Census Bureau data as of 2022.
On Feb. 6, FEMA announced a proposal to update its NFIP program and potentially enhance basement coverage for policyholders.
“Policyholders with basements continue to be surprised that under the current Dwelling Form, the policy provides limited coverage in a basement,” FEMA wrote.

What basement items are covered by flood insurance?

“Flood insurance’s primary focus is structure: the building itself,” Kochenburger said.
Here are examples of how NFIP policies cover the building and structure in basements, FEMA said:

Central air conditioners
Fuel tanks and the fuel in them
Furnaces and water heaters
Sump pumps, heat pumps, and well water tanks and pumps
Electrical outlets and switches
Elevators and dumbwaiters
Certain drywall
Electrical junction and circuit breaker boxes
Stairways and staircases attached to the building
Foundation elements and anchorage systems required to support a building

Policyholders can also get compensation for cleanup costs such as pumping out trapped floodwater, treatment for mold and mildew and structural drying of the interior foundation, FEMA said.
As a precaution, the agency recommends documenting the manufacturer, model, serial number and capacity of equipment in your basement like furnaces, central AC units and appliances like freezers, washers and dryers.
Should you experience flooding, the NFIP requires this information during the claims process, FEMA said.
Policyholders should review their flood insurance policy for a comprehensive list of covered items and expenses, according to FEMA. More

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 8, 2024.
Brendan McDermid | Reuters

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Here’s what CNBC TV’s producers were watching during the rebound and what’s on the radar for the next session.

E.l.f. Beauty blew past Wall Street estimates, posting a 50% gain in sales in its fiscal first quarter. That follows a 76% jump in the year-ago period. On its post-earnings conference call, the company said to expect higher container and transportation cost headwinds in FY25. Shares rose 3.4% during the regular session, but fell 10% in after-hours trading.
Paramount Global added 5% after the closing bell – after dropping 2.4% during the regular trading day. The company’s streaming division swung to an unexpected profit for the first time ever. Paramount also announced it is cutting 15% of its U.S. workforce, as part of broader cost savings. CNBC TV’s Julia Boorstin will have the latest.
Sweetgreen soared more than 20% after the closing bell. The company boosted its full-year sales outlook. Earnings missed, with a loss of 13 cents per share versus the Street’s estimates of a loss of 10 cents a share. Revenue came in at $185 million, beating estimates of $181 million.

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Sweetgreen’s year-to-date performance

Dropbox added 3% in after-hours trading after the company beat on earnings and revenue.
Archer Aviation tumbled in after-hours trading, after reporting quarterly results. The company also unveiled plans for a Los Angeles air taxi network, as soon as 2026. CNBC TV’s Phil LeBeau will cover the story on Friday.

—Jill Schneider

Renovation nation

CNBC’s real estate reporter Diana Olick will report on an uptick for home renovations in the U.S.
She’ll have details on CNBC TV Friday.
Shares of Home Depot are down 2% this week. The stock is 12% from the 52-week high hit back in March. Year to date, shares are flat.
Lowe’s is 10% from the 52-week high. The stock is down 1.7% week to date, but it’s up 6% in 2024.

Bonds in the U.S.A.

CNBC.com’s Darla Mercado reports as the Federal Reserve may very well be getting ready for a rate cut, investors will have to look for new sources of yield rather than those 5%-plus short-term bonds.
She lists several core and core-plus bond funds for investors to consider including Vanguard’s Core Bond Fund (VCORX), which has a 30-day SEC yield of 4.47% right now.
Fidelity’s Intermediate Bond Fund (FTHRX) has a 30-day yield of 4.32%.
Vanguard’s Core-Plus Bond Fund (VCPIX) has a 30-day SEC yield of 4.66%.
BAGIX is the Baird Aggregate Bond Fund, which has a 30-day SEC yield of 4.32%.
BlackRock’s Total Return ETF (BRTR) has a 30-day SEC yield of 4.97%.

Magnificent gains for the Magnificent Seven

Nvidia jumped 6% on Thursday. The stock is 25% from the June 20 high.
Meta Platforms was up 4.2% in Thursday’s rally. The stock is 6% from the July 8 high.
Tesla added 3.7% in the session. The stock is 28.7% from the September high.
Alphabet was up nearly 2%. The stock is 15.5% from the July high.
Amazon was up 1.86% Thursday. The stock is 17.6% from the July high.
Apple was up about 1.7%. The stock is 10% from the July high.
Microsoft closed 1% higher. The stock is 14% from the early July high.
Thursday was the S&P 500’s best session since November 2022. Tech was the best performing sector of the day, while Communication Services was second.

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S&P 500’s five-day performance

Delta Air Lines and CrowdStrike

The airline says the CrowdStrike tech outage last month cost it $380 million dollars.
CrowdStrike said it offered to help, and it called the airline’s narrative “misleading.”
“Fast Money” trader Karen Finerman announced that she was opening a position in CrowdStrike, saying the sell-off since the crisis is “overdone.”
CrowdStrike was up 4.27% on Thursday. The stock is 40% from the July 9 high.
The relative strength index on the stock, which is one metric traders use to tell when a stock is oversold, is now at 30.8. An RSI of 30 suggests a stock may be oversold, while a reading of 70 or greater means it’s overbought. There is no guarantee that a stock will fall when the RSI hits 70 or that it will jump at 30, but it is one piece of data that some traders use to make decisions.

Make-up

As Jill Schneider said above E.l.f. sales jumped 50% in the last quarter. That seems pretty good.  Guidance, however, was cautious. The stock is down 11% after hours. E.l.f. is up 13% in four days. It’s up 30% year to date, and it’s 15% from the March high.
Ulta Beauty is 43% from the March high.
Estee Lauder is down 45% in the last year.
Coty is 30% from the February high.

—Jason Gewirtz More