Finance

Day passes at hotels and resorts offer guests access to amenities without the cost of reserving a room.
ResortPass holds 95% share of the day-guest market, according to the company, and has partnered with more than 1,300 luxury hotels, including the Waldorf-Astoria, JW Marriott and Fontainebleau.

Wellness travel can be enjoyed with a loved one, the entire family, or even solo.
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Avid traveler Lora Bowler is cutting back on vacation spending. That doesn’t mean she’s skipping the resort.
The New York resident said she spent more in 2023 than she had expected to, including on travel, and is now reining in her expenses. She uses travel hacks and benefits to cut some of the cost, and she’s part of a growing number of people turning to hotel day passes as a cheaper option for relaxation.

“It’s like a neat way to escape and feel like you’re at a five-star hotel,” Bowler said, “but you can’t afford to stay.”
Day passes at hotels and resorts offer guests access to amenities without the cost of reserving a room. Bowler said she’s booked daybeds and poolside services and even found a pass that offered a room where her husband could work from his laptop.
Hotels and third-party partners are making day passes more readily available to help bridge the gap between travel-minded consumers and luxury prices.
A typical luxury hotel room in the U.S. between Jan. 1 and April 6 cost roughly $400 per night, according to CoStar, a global provider of real estate data, analytics and news. Those rates are about 1% higher than the same period a year ago.
Luxury hotel room rates in July are expected to be 85% higher than the same month in 2019, before the Covid pandemic, according to the luxury travel company Virtuoso.

“People are back to thinking about travel budgets,” said Hayley Berg, lead economist with travel site Hopper. “They’re prioritizing expenditure on vacations, more so than consumer goods.”
In a survey conducted in July 2023 by Booking.com, more than 60% of respondents said their cost of living will determine their travel planning in 2024, while slightly more than half said they were likely to pay for accommodation upgrades.
A majority of U.S. travelers said they would be willing to pay for day passes to use the amenities in a five-star hotel without staying there, according to a Booking.com press release about the survey. The survey included nearly 28,000 adults from 33 countries who said they planned to travel over the next 12-24 months.
Consumers who indulged in travel splurges after Covid restrictions lifted fueled the “revenge travel” trend, Berg said, driving up demand for lavish accommodations. Now, she said, that trend “has very much run out” and many travelers are working with tighter budgets.
Berg said day passes “give people exactly what they want” and provide a separate source of revenue for hotels.
“Hotels get an incremental revenue stream by providing exactly what they already have,” she said.
One of those hotels is the Virgin Hotels New York City, in Manhattan’s Koreatown neighborhood. On May 8 the hotel opened its rooftop pool for the second time, with the option for day guests to use the amenity.
The pool, with cerulean blue tiles flanked by black-and-white lounge chairs, offers guests views of the Empire State Building and city skyline.
Customers can reserve a pool lounge chair or upgrade to a cabana and invite up to four other people. The cabana includes complimentary services and refreshments such as wine and fruit. Day-pass users at the pool club can also get their own personalized server, depending on their selections. A day pass for the pool club starts at $130.
“Everybody needs a little bit of escape,” said Sarah Payton, the hotel’s head of partnerships and programming.
In May 2023 the hotel partnered with ResortPass, a site that provides day-pass access at luxury hotels, resorts and spas, often at a discounted rate.
ResortPass, launched in 2016, holds 95% share of the day-guest market, according to the company, and has partnered with more than 1,300 luxury hotels, including the Waldorf-Astoria, JW Marriott and Fontainebleau.
The day-guest platform has served more than 3 million users and has rolled out day-pass access in more than 250 cities, the company said, at prices as low as $25.
“What we are really able to do is enable people a more local way of getting away without going away,” ResortPass CEO Michael Wolf said. “I think it compliments other types of travel, and serves potentially in lieu of it.”
The average ResortPass customer purchases all-day access at a cost of about $165, the company said. Customers who buy day passes through ResortPass often splurge on poolside or other hotel amenities more than overnight guests do, Wolf said.
“Our guests on average spent over $250 on the premise of the property, and often quite a bit more than that,” he said.
Wolf said ResortPass is currently working on a membership-like program for customers who use day passes frequently, with an announcement expected later in 2024. More

Many employers that sponsor 401(k) plans have adopted “automatic escalation.”
The mechanism automatically raises workers’ savings rate over time.
401(k) investors should ideally save at least 15% of their annual pay, according to one financial advisor.

Aleksandarnakic | E+ | Getty Images

You may be saving more money for retirement and not even know it.
An increasing share of employers are automating how people save in their company 401(k) plans, in a bid to overcome the inertia that often keeps us from building a nest egg.

“Automatic escalation” — or auto-escalation, for short — is one of those popular mechanisms.
It automatically raises workers’ savings rate each year, often by 1 percentage point at a time up to a cap. The intent is to help boost savings when workers might not take action on their own.

However, the amount of additional money coming out of each paycheck may be indiscernible to many people.
“I have a bet they don’t realize it,” said Ellen Lander, founder of Renaissance Benefit Advisors Group, based in Pearl River, New York.
However, it’s generally a good thing.

In an ideal world, workers would be saving at least 15% of their annual pay in a 401(k) plan, Lander said. This includes both their own contributions and employer contributions like a company match. The ideal rate may fluctuate depending on factors like age and outside savings.
“Philosophically, I think auto-escalation makes perfect sense,” Lander said. “We want people to save as much as they can.”

Automated 401(k) savings is more widespread

Auto-escalation has become more widespread alongside automatic enrollment, which is when employers divert a portion of workers’ paychecks into a 401(k) if they don’t sign up voluntarily.
About 64% of companies with a 401(k) plan automatically enrolled workers in 2022, according to an annual survey by the Plan Sponsor Council of America, a trade group.
Of those companies, 78% also automatically increased workers’ savings, up from 65% in 2013, according to the poll.
Most, or 84%, of these 401(k) plans raise workers’ savings rate by 1 percentage point a year.
More from Personal Finance:U.S. centenarian population will quadruple by 2054Why working longer is a bad retirement planLabor Department cracks down on bad retirement savings advice
Here’s a basic illustration of how it works: Let’s say a worker earns $75,000 a year, contributes 6% of their annual salary to a 401(k), and is paid twice a month. This person saves $4,500 a year, or $187.50 per paycheck.
Raising the savings rate to 7% brings annual savings to $5,250, or $218.75 per pay cycle — amounting to just $31.25 more per paycheck.
(This example doesn’t account for additional financial factors like taxes or annual pay increases.)
Employees can opt out of the arrangement. Employers are also obligated to send a notice to workers communicating that they are being automatically enrolled into a 401(k) and their savings rate will be increased, but such communiques may go unnoticed.

Many companies are hesitant to add auto-escalation altogether because they fear it may be “onerous” and place too much of a financial burden on some workers, Lander said.
Among 401(k) plans that use automatic enrollment, just 40% automatically escalate savings for all workers, according to data from the Plan Sponsor Council of America. About 12% do so only for investors who are “under-contributing.” And 26% make escalation a voluntary choice for workers, while d 22% don’t offer it at all.
The vast majority of 401(k) plans don’t automatically raise savings beyond a cap, and nearly two-thirds, or 63%, limit those automated worker contributions to 10% or less of annual pay.
Of course, reaching the cap doesn’t necessarily mean workers are saving enough. Workers can voluntarily set their savings rate higher.

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Michael Arougheti, Ares Management Corporation Co-Founder, CEO & President
Adam Jeffery | CNBC

The explosion of private credit has been met with a whole host of concerns, but among the louder ones more recently is that the industry has not experienced a downturn at scale. And therefore, what does that mean for borrowers when there’s some kind of crisis?
When asked about the migration of assets to the non-bank sector during JPMorgan’s Investor Day earlier this week, Chairman and CEO Jamie Dimon said, “we’ll compete. We’re going to be fine.” But he added that the “question they should be asking is, what does it mean for the United States of America?” 

“A lot of those folks who took private-credit loans will be stranded when [obscenity] hits the fan,” Dimon said. “Banks tend to work with the borrower and the middle-market loan in the crisis…in the mark-to-market world of private credit, they have to, as a fiduciary, book it at par.” 
In other words, he said, “private credit hasn’t dealt with high interest rates, hasn’t dealt with the recession, and it hasn’t dealt with high spreads.”
We don’t know how those workouts will…work. 
The next day, the CEO of one of the largest private-credit firms defended the industry and how it will act in times of stress. When asked on CNBC about Dimon’s recent comments, Ares Management CEO Michael Arougheti responded: “False.” 
“We’ve been investing in the private markets for 30 years; A loan is a loan whether it’s held on a bank balance sheet or held in a private-credit fund,” Arougheti said. “[Ares has] invested $150 billion into the private-credit market since we founded the firm, and we had a loss rate of one basis point. So everything that we’ve seen over the last 30 years would indicate that the risk people are trying to argue exists in our market just isn’t true.” 

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Ares Management (ARES), 1 year

Ares’ Executive Chairman Tony Ressler, sitting next to Arougheti in the CNBC interview, said the growth in private credit will “actually reduce systemic risk.” 
“These assets are going onto the balance sheets of companies that are not highly levered and that do not finance themselves with short-term liabilities or customer deposits,” Ressler said. 

Private credit default rates

In January, the Federal Reserve looked at default rates in private credit and how they compare with loans made by traditional banks (leveraged loans and high-yield bonds). Citing KBRA DLD data, the Fed showed, “despite seniority in debt structure, private-credit loans have relatively low recovery rate upon default (or equivalently, exhibit high loss given default) compared to syndicated loans or HY bonds.”
We obtained updated figures on Thursday from KBRA DLD, which showed more of a mixed picture when it comes to implied recoveries. The average post-default value of a direct loan was about 53.1 percent, below that of syndicated loans, which were 57.5 percent but higher than high-yield bonds, which were 46.3 percent
The Fed attributes some of that gap to private credit exposure being more tilted to sectors with lower collateralizable or tangible assets, like software, financial services or healthcare services. 
But the quicker private credit grows, the more interconnected it becomes with the traditional banking space. JPMorgan executives at Investor Day said the firm is the largest financier of private-credit portfolios, and it already has dedicated capital on the balance sheet that it uses in a direct-loan format for corporate borrowers. The firm is also developing a co-lending program to boost the amount of capital it can deploy in this space. 
So if the eventual downturn does manifest in the economy, it’s likely that you-know-what will hit the fan for everyone. Some borrowers will feel the hit more than others.  More

Nvidia shares surged to a record high Thursday after the company beat earnings and revenue estimates for the fiscal first quarter.
The chipmaker also announced a 10-for-1 stock split on Wednesday in its report.
Wall Street analysts have since grown more bullish following the results.

Nvidia CEO Jensen Huang delivers a keynote address during the Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California. 
Justin Sullivan | Getty Images

Nvidia shares jumped more than 9% on Thursday after the company on Wednesday reported earnings that topped Wall Street estimates and showed that there’s still ferocious demand for its artificial intelligence chips. The company’s data center revenue grew by a whopping 427% during the quarter.
Shares closed above $1,000 for the first time, reaching a high of $1,037.99. Its previous high of $953.86 was set on May 21.

First-quarter revenue came in higher than expected at $26.04 billion compared with the LSEG estimate of $24.65 billion. And the demand isn’t wavering.
The company issued strong guidance, saying it expects $28 billion in revenue for the current quarter, beating the LSEG estimate of $26.61 billion.
Despite some analysts fearing an “air pocket,” others have grown even more bullish on the company since its results. Bernstein’s Stacy Rasgon increased the firm’s price target to $1,300, writing in a note to investors that the narrative surrounding the company is “clearly nowhere near its end, or likely nowhere near its peak.” He wrote that shares seem inexpensive.
Jefferies raised its target on the stock to $1,350 due to a strong ramp for its new AI graphics processors called Blackwell and anticipation of an acceleration in “magnitude of beats” later this year when the platform launches.
Nvidia posted net income of $14.88 billion, or $5.98 per share, a dramatic pop from the $2.04 billion, or 82 cents per share, it reported in the year-ago quarter.
Nvidia on Wednesday announced a 10-for-1 stock split, with shares set to begin trading on a split-adjusted basis at market open on June 10. More

Norfolk Southern has agreed to pay $310 million to settle charges over the East Palestine, Ohio, train derailment that occurred in February 2023, with the majority of that going to cleanup costs.
The company will pay a $15 million fine for alleged violations of the Clean Water Act as part of the federal settlement.
Norfolk Southern is estimating it will spend $1.7 billion in total costs associated with the incident.

Officials continue to conduct operation and inspect the area after the train derailment in East Palestine, Ohio, United States on February 17, 2023. 
EPA | Anadolu | Getty Images

Norfolk Southern has agreed to pay $310 million to settle charges over a toxic train derailment in East Palestine, Ohio, in February 2023, the company announced on Thursday.
The majority of the settlement is an estimated $235 million to cover all past and future cleanup costs. Per the agreement, the company will also pay a $15 million civil penalty to resolve alleged violations of the Clean Water Act.

The agreement resolves a lawsuit filed in March 2023 by the EPA and the U.S. Department of Justice against Norfolk Southern for allegedly violating the Clean Water Act after the derailment of a freight train carrying hazardous substances ignited a dayslong fire that forced local residents to evacuate and contaminated the soil and waterways.
“We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community’s needs and our mission to be the gold standard of safety in the rail industry,” Alan Shaw, president and CEO of Norfolk Southern, said in a statement. “We will continue keeping our promises and are invested in the community’s future for the long-haul.”

Smoke rises from a derailed cargo train in East Palestine, Ohio, on February 4, 2023.
Dustin Franz | Afp | Getty Images

The settlement, if approved by the U.S. District Court for the Northern District of Ohio, would require Norfolk Southern to not only “take measures to improve rail safety” but also “pay for health monitoring and mental health services for the surrounding communities,” among other actions, the EPA said Thursday. That includes paying an estimated $7 million for remediation projects to curb pre-existing pollution and boost the region’s water quality.
“No community should have to experience the trauma inflicted upon the residents of East Palestine,” said EPA Administrator Michael Regan in a statement. “Today’s enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again.”

US President Joe Biden receives an operational briefing from officials on the continuing response and recovery efforts at the site of a train derailment which spilled hazardous chemicals a year ago in East Palestine, Ohio on February 16, 2024. 
Mandel Ngan | Afp | Getty Images

Norfolk Southern is estimated to have spent approximately $1.7 billion in total costs associated with the incident. The company said Thursday’s settlement won’t add to that total figure because it had already set aside money and had been anticipating the cost.

The entire cleanup effort is currently anticipated to conclude on or around November 2024, but that “may change,” according to EPA spokesman Remmington Belford.
The resolution with the EPA comes one month after the company agreed to pay $600 million in a class-action lawsuit settlement related to the 2023 derailment. More

If current forecasts are accurate, 2064 will be the first year in centuries when fewer babies are born than people die. Birth rates in India will fall to below the level seen in America last year. Even with immigration and successful pro-natal policies, America’s population will only have a little bit of growth left. By 2100 there will be many fewer migrants left to attract. The world’s fertility rate will hit 1.7. Just two Pacific islands and four African countries will manage to reproduce above replacement level.Sooner or later, therefore, every big economy will collide with a demographic wall. The bill from pensions and hospitals will pile on fiscal pressure. Sapped of workers and ideas, economic growth could collapse while public debt balloons. Just how catastrophic the situation becomes depends on whether policymakers maintain budgetary discipline, withstand pressure from angry older voters and, crucially, are willing to inflict pain on populations now in order to save future generations from more later on. More

As one of the leaders of the passive-investing revolution, BlackRock is usually a disruptive force in the financial world. But the asset-management giant’s battle with Saba Capital, an activist fund, has cast it in an unfamiliar role: as besieged incumbent. Ten of BlackRock’s investment vehicles, known as closed-end funds, are in Saba’s sights.The funds—worth nearly $10bn based on current share prices—run at a steep discount to the value of the assets in their portfolios. Like publicly listed firms, closed-end funds sell shares in an initial public offering and trade on secondary markets. Since they do not offer new shares to incoming investors, as mutual and exchange-traded funds do, their share prices are able to drift far from the value of their assets. Boaz Weinstein, Saba’s founder, wants BlackRock’s funds to offer to buy back shares from investors, pointing to a history of poor returns. He argues that if investors could exit at the full value of their assets, some $1.4bn in value would be unlocked. Saba is also promoting a slate of nominees to the funds’ boards at shareholder meetings scheduled across the second half of June. These representatives will, it says, negotiate for lower fees. More

At last, it seemed time for a manufacturing take-off. Having struggled to compete with China’s industrial might, other emerging markets stood ready to benefit as their rival’s labour costs surged and rising tensions between it and the West pushed firms to look for new factory locations. Last year foreign direct investment into China fell to a 30-year low.But China has started to fight back. To reverse an economic slowdown and cement its control over global supply chains, its leaders have launched an investment spree in high-tech goods, such as batteries, electric vehicles and other green devices. Weak domestic demand for traditional products, such as cars, chemicals and steel, mean they are also flooding global markets. The average price of Chinese manufactured exports fell by nearly 10% from 2022 to 2023. China’s export volumes have surged to near-record levels. More