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Philip Morris shares clinched fresh all-time highs.
The stock is once again being viewed as a growth company due to the success of the Zyn oral nicotine pouches.

In this photo illustration, ZYN nicotine cases are seen on a table on January 29, 2024 in New York City. 
Michael M. Santiago | Getty Images

Philip Morris International shares reached record highs Tuesday after the tobacco company’s Zyn brand reported soaring demand.
Shares of the Connecticut-based company jumped to $131.97 at session highs, marking a new intraday record. The stock notched an all-time closing high and saw its biggest one-day gain since October 2008.

Tuesday’s record comes after the company touted an eye-popping increase in shipments of its Zyn oral nicotine pouches. It’s the latest milestone in the stock’s breakout this year as Wall Street catches wind of how the product has captured consumer interest.
The stock saw little action between 2013 and 2023 with investors viewing it as a dividend play in a stagnant industry. Now, traders are seeing the stock as a growth name — thanks in large part to the success of Zyn since Philip Morris acquired the brand through its deal with Swedish Match two years ago.
“The No. 1 U.S. smoke-free brand continued to see very strong underlying momentum,” finance chief Emmanuel Babeau told analysts on a call Tuesday.

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Philip Morris

Zyn demand in the U.S. has primarily driven shipments of Philip Morris’ oral products up nearly 40% in the first nine months of 2024, compared with the same period of the prior year.
Part of that growth is due to easing supply constraints for the product. Shipments of Zyn cans in the U.S. rose more than 41% in the third quarter from the same three-month period in 2023. Philip Morris expects Zyn shipments to match demand “at some point” during the fourth quarter, Babeau said.

Growth is also taking place internationally, with total nicotine pouch volume outside America soaring almost 70% between the third quarters of 2023 and 2024. Zyn is now available in 30 markets after the brand’s recent expansions into Greece and the Czech Republic.
Philip Morris also noted Zyn as main driver of net revenue for the business as a whole. The company issued better financial results than analysts polled by FactSet expected on both lines for the third quarter, while also raising its full-year earnings per share outlook.
Zyn has become a symbol of the shift among tobacco companies toward alternatives to traditional cigarettes. Philip Morris announced earlier this year that it would invest $600 million to build a new production facility for Zyn in Colorado.
Shares of Philip Morris have climbed nearly 40% in 2024. That would mark the best year on record for the company, which was separated in 2008 in part because of smoker lawsuits. Philip Morris kept the international cigarettes business which was still growing. Shares of Altria, which kept the U.S. cigarettes unit, have struggled since, still far below an all-time high reached in 2017. More

ETF Strategist

Exchange-traded funds can help reduce annual tax bills for investors relative to mutual funds.
ETF managers can generally avoid distributing capital gains taxes to shareholders.
The tax savings apply to investors in nonretirement accounts. Those holding U.S. stocks tend to benefit most.

Christopher Grigat | Moment | Getty Images

Investors can generally reduce their tax losses in a portfolio by using exchange-traded funds over mutual funds, experts said.
“ETFs come with tax magic that’s unrivaled by mutual funds,” Bryan Armour, Morningstar’s director of passive strategies research for North America and editor of its ETFInvestor newsletter, wrote earlier this year.

But certain investments benefit more from that so-called magic than others.

Tax savings are moot in retirement accounts

ETFs’ tax savings are typically greatest for investors in taxable brokerage accounts.
They’re a moot point for retirement investors, like those who save in a 401(k) plan or individual retirement account, experts said. Retirement accounts are already tax-preferred, with contributions growing tax-free — meaning ETFs and mutual funds are on a level playing field relative to taxes, experts said.
The tax advantage “really helps the non-IRA account more than anything,” said Charlie Fitzgerald III, a certified financial planner based in Orlando, Florida, and a founding member of Moisand Fitzgerald Tamayo.
“You’ll have tax efficiency that a standard mutual fund is not going to be able to achieve, hands down,” he said.

The ‘primary use case’ for ETFs

Mutual funds are generally less tax-efficient than ETFs because of capital gains taxes generated inside the fund.
Taxpayers who sell investments for a capital gain (i.e., a profit) are likely familiar with the concept of paying tax on those earnings.
The same concept applies within a mutual fund: Mutual fund managers generate capital gains when they sell holdings within the fund. Managers distribute those capital gains to investors each year; they divide them equally among all shareholders, who pay taxes at their respective income tax rate.

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However, ETF managers are generally able to avoid capital gains taxes due to their unique structure.
The upshot is that asset classes that generate large capital gains relative to their total return are “a primary use case for ETFs,” Armour told CNBC. (This discussion only applies to buying and selling within the fund. An investor who sells their ETF for a profit may still owe capital gains tax.)

Why U.S. stocks ‘almost always’ benefit from ETFs

U.S. stock mutual funds have tended to generate the most capital gains relative to other asset classes, experts said.
Over five years, from 2019 to 2023, about 70% of U.S. stock mutual funds kicked off capital gains, said Armour, who cited Morningstar data. That was true of less than 10% of U.S. stock ETFs, he said.
Capital gains aren’t bad; they’re investment profits. But ETF managers often avoid taxes on those profits whereas mutual funds don’t, due to differences in how they can trade.
“It’s almost always an advantage to have your stock portfolio in an ETF over a mutual fund” in a nonretirement account, Armour said.

U.S. “growth” stocks — a stock subcategory — saw more than 95% of their total return come from capital gains in the five years through September 2024, according to Morningstar. That makes them “the greatest beneficiary of ETFs’ tax efficiency,” Armour said.
Large-cap and small-cap “core” stocks also “benefit considerably,” with about 85% to 90% of their returns coming from capital gains, Armour said.
About 25% to 30% of value stocks’ returns come from dividends — which are taxed differently than capital gains within an ETF — making them the “least beneficial” U.S. stocks in an ETF, Armour said.
“They still benefit substantially, though,” he said.
ETF and mutual fund dividends are taxed similarly. ETF dividends are taxed according to how long the investor has owned the fund.

Actively managed stock funds are also generally better candidates for an ETF structure, Fitzgerald said.
Active managers tend to distribute more capital gains than those who passively track a stock index, because active managers buy and sell positions frequently to try to beat the market, he said.
However, there are instances in which passively managed funds can trade often, too, such as with so-called strategic beta funds, Armour said.

Bonds have a smaller advantage

ETFs are generally unable to “wash away” tax liabilities related to currency hedging, futures or options, Armour said.
Additionally, tax laws of various nations may reduce the tax benefit for international stock ETFs, like those investing in Brazil, India, South Korea or Taiwan, for example, he said.
Bond ETFs also have a smaller advantage over mutual funds, Armour said. That’s because an ample amount of bond funds’ returns generally comes from income (i.e., bond payments), not capital gains, he said.
Fitzgerald says he favors holding bonds in mutual funds rather than ETFs.
However, his reasoning isn’t related to taxes.
During periods of high volatility in the stock market — when an unexpected event triggers a lot of fear selling and a stock market dip, for example — Fitzgerald often sells bonds to buy stocks at a discount for clients.
However, during such periods, he’s noticed the price of a bond ETF tends to disconnect more (relative to a mutual fund) from the net asset value of its underlying holdings.
The bond ETF often sells at more of a discount relative to a similar bond mutual fund, he said. Selling the bond position for less money somewhat dilutes the benefit of the overall strategy, he said.

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New tax changes for 2025 announced by the IRS may affect tax liabilities for families.
The refundable portion of the child tax credit will be $1,700, unchanged from 2024.
Other changes to the earned income tax credit, adoption credit and annual gift tax exclusion may also affect parents.

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Child tax credit for 2025

The refundable portion of the child tax credit — a tax break parents can take for qualifying children — will be $1,700 for 2025, which is unchanged from 2024. That figure represents how much families may claim even with zero tax balance on their tax returns.
The maximum child tax credit of $2,000 per child under 17 is available to parents with up to $400,000 in modified adjusted gross income if they are married and filing jointly, or under $200,000 if they are single. Those figures are also unchanged from 2024.
Notably, the terms of the current child tax credit are set to expire at the end of tax year 2025. At that time, the child tax credit is scheduled to drop to a maximum $1,000 per child.

However, lawmakers on both sides of the aisle have touted proposals to make the credit more generous.
The new changes for 2025 are standard adjustments for inflation so taxpayers don’t face higher tax liabilities, according to Alex Durante, economist at the Tax Foundation. The terms still reflect the Tax Cuts and Jobs Act of 2017.
“But the year following, 2026, families should be expecting to see higher tax liabilities unless Congress votes to extend these tax provisions that were implemented in 2017,” Durante said.

Earned income tax credit for 2025

A tax credit for low- to middle-income individuals and families — the earned income tax credit, or EITC — will have higher maximum amounts in 2025.
The earned income tax credit helps qualifying individuals and families reduce the amount of tax they owe, while also potentially providing a refund, according to the IRS.
In 2025, the maximum EITC amount will be $8,046 for qualifying taxpayers with three or more eligible children. That is up from $7,830 for tax year 2024.
The maximum amount available for qualifying taxpayers with two eligible children will be $7,152, up from $6,960 in 2024; one qualifying child, $4,328, compared with $4,213 in 2024; and no qualifying children, $649, up from $632 in 2024.

To qualify for the tax credit, individuals and families must be under certain thresholds for adjusted gross income — defined as total income excluding any eligible deductions.
In 2025, the maximum AGI to qualify for the EITC for married couples with three or more children will be $68,675, up from $66,819 in 2024; and for single, head of household and widowed filers with three or more children it will be $61,555, adjusted from $59,899 in 2024. The EITC is also subject to phaseout thresholds.
Taxpayers are also limited to how much investment income they can have in order to qualify for the earned income tax credit. In 2025, that threshold will go to $11,950, up from $11,600 in 2024. If investment income is above $11,950 in 2025, taxpayers will not qualify for the credit.

Adoption, gift tax exclusion changes

Other changes announced by the IRS may also affect families.
The maximum adoption credit for a child, including those with special needs, will apply to qualified expenses of up to $17,280 in 2025, up from $16,810 in 2024.
The annual exclusion for gifts will go up to $19,000, up from $18,000 in 2024. If taxpayers give $19,000 to each of their children in 2025, the annual exclusion will apply to each gift. More

The IRS announced a higher estate and gift tax exemption for 2025.
The “basic exclusion amount” rises to $13.99 million for 2025, up from $13.61 million in 2024, the agency said.
The exemptions apply to tax-free transfers during life and at death.

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The IRS has unveiled higher federal tax brackets for 2025 to adjust for inflation.
The standard deduction will increase to $30,000 for married couples filing together and $15,000 for single taxpayers.
There are also changes to the long-term capital gains brackets, estate tax exemption, child tax credit eligibility and more. 

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Federal tax brackets for 2025

Federal income tax brackets show how much you owe on each part of your “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Higher standard deduction

The standard deduction will also increase in 2025, rising to $30,000 for married couples filing jointly, up from $29,200 in 2024. Starting in 2025, single filers can claim $15,000, a bump from $14,600.
Trump’s tax cuts also included higher standard deductions, which will sunset after 2025 if Congress doesn’t extend that tax break.  More

The IRS on Tuesday unveiled 2025 inflation adjustments for the long-term capital gains tax brackets, which apply to investments owned for more than one year. 
For 2025, single filers can earn up to $48,350 in taxable income — $96,700 for married couples filing jointly — and still pay 0% for long-term capital gains.
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Xavier Lorenzo | Moment | Getty Images

The IRS has unveiled higher capital gains tax brackets for 2025.
In its announcement Tuesday, the agency boosted the taxable income limits for the long-term capital gains brackets, which apply to assets owned for more than one year.  The IRS also increased figures for dozens of other provisions, including federal income tax brackets, the estate and gift tax exemption and eligibility for the earned income tax credit, among others.More from Personal Finance:Tax brackets may increase after 2025. It could affect your brokerage accountBuying a home? Here are key steps to consider from top-ranked advisorsTrump’s tax cuts could expire after 2025. How advisors are preparing

The capital gains rate you pay is based on which bracket you fall into based on taxable income. 
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income. For 2025, the standard deduction will rise to $15,000 for single filers and $30,000 for married couples filing jointly.Starting in 2025, single filers will qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less and married couples filing jointly are eligible with $96,700 or less.  More

The trust fund Social Security relies on to pay retirement benefits faces a looming 2033 projected depletion date.
If no changes are made by that date, the general expectation is that an across-the-board benefit cut would be inevitable.
Yet new research suggests the president would have room to adjust those cuts to protect those who most need benefit income.

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Social Security may not be able to pay full retirement benefits as soon as 2033, based on current projections from the program’s trustees.
If Congress doesn’t move to fix the situation by that date, the general expectation is that millions of retirees could see a 21% across-the-board benefit cut.

The effects of that lost income could be enough to prompt a retirement crisis, since it would double the elderly poverty rate and reduce median senior household income by nearly 14%, according to new research from the American Enterprise Institute.
Yet those broad benefit cuts would not necessarily have to happen, as the worst effects of insolvency could be prevented by executive action, according to the report.
More from Personal Finance:Social Security Administration announces 2.5% COLA for 2025House may force vote on bill affecting pensioners’ Social Security benefits72% of Americans worry Social Security will run out in their lifetime
Instead of across-the-board benefit cuts, benefits could be reallocated to avoid increases in poverty for low earners while having just a small effect on the middle class, according to Andrew Biggs, a senior fellow at the AEI, who co-wrote the report with Kristin Shapiro, counsel at BakerHostetler.
“It means big cuts on very rich people, but it avoids what you might think of as a retirement crisis, where everything is thrown into upheaval,” Biggs said.

Why Social Security’s trust funds face depletion dates

Social Security draws from multiple sources to pay benefits — ongoing revenue from payroll taxes and income taxes, as well as trust funds that are used to supplement the monthly checks beneficiaries receive.
Yet as more people collect Social Security retirement benefits, the trust fund used to pay those benefits is running low. The depletion date — currently 2033 — represents the point at which the fund will be exhausted.
At that point, it is expected that 79% of those benefits will be payable.

Social Security has more than one trust fund, including one that pays retired workers, their families and survivors, and a second that pays disability benefits.
Together, those trust funds have a projected depletion date of 2035, when 83% of benefits would be payable. While merging the funds could provide additional financial runway, doing so is not allowed under current law, according to the AEI report.

How broad benefit cuts could be avoided

As the November election approaches, experts generally hope a new president and new Congress will address Social Security’s solvency.
“We far prefer for Congress to enact comprehensive Social Security reforms before 2033,” the AEI report says.
The sooner Congress acts, the better it will be for all beneficiaries involved, to give them more certainty, said Shai Akabas, executive director of the Bipartisan Policy Center’s Economic Policy Program. A recent survey from Nationwide Retirement Institute found 72% of adults worry Social Security will run out of funding in their lifetime.
The roughly 21% across-the-board benefit cut is “untenable and unsustainable, both politically and financially from a household perspective,” Akabas said.
However, if lawmakers fail to come to an agreement by the depletion date, the president could move to protect beneficiaries from the worst effects of the ensuing cuts, according to Biggs and Shapiro.

Once the depletion date arrives — whether it remains 2033 or shifts to another year — the president at the time could move to cap monthly benefits at about $2,050, the AEI report proposes.
That change would reduce payments to beneficiaries who receive more than that amount and make Social Security solvent without adding new debt or increasing taxes.
At the same time, about half of all retirees and survivors would still receive their full benefit payments. Notably, no retiree would be pushed into poverty, according to the research.
If the fund depletion date were crossed, lawmakers would face an unprecedented situation.
What happens next would depend on the interpretation of Constitutional law. That could prompt litigation, the report notes, including from beneficiaries who may not receive the benefits they were promised. More

The New York Stock Exchange.
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Here’s what CNBC TV’s producers were watching as the Dow Jones Industrial Average snapped a three-day win streak, and what’s on the radar for the next session.

Starboard Value’s investment in Kenvue

We’ll find out a lot more on Tuesday when Starboard’s Jeff Smith joins CNBC TV’s David Faber.
Kenvue shares shot up 5.5% Monday as investors got behind Starboard.
Kenvue was spun off of Johnson & Johnson last year.
The stock is flat since the company started trading more than a year ago.
After Monday’s jump, the stock is 2.7% from the 52-week high.
As of Monday’s close, Kenvue has a 3.6% dividend yield.
Kenvue is the company that makes Listerine, Aveeno, Tylenol and Zyrtec.

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Kenvue in 2024

GE Aerospace reports before the bell

GE Aerospace reports in the morning.
It is just off the 52-week high hit last week.
The stock is up 90% so far in 2024 and up about 130% in a year.
Over the past three months, GE is up 22%.

General Motors reports before the bell

GM also reports Tuesday morning.
The stock is 3% from the July high.
Shares fell as low as $26.30 in the days following the 2023 United Auto Workers’ strike.
The stock is up 86% from that level.
So far in October, GM is up 9%.
In the past three months, GM is up 1%.
CNBC TV’s Phil LeBeau will cover it all.

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General Motors shares over the past three months.

The defense companies report

CNBC’s Morgan Brennan will cover Lockheed Martin and RTX on Tuesday.
Lockheed hit a new high Monday. The stock is up 29% in the last three months.
RTX is right near the high hit last week.
The stock is up 22.5% over the past three months.
RTX and Lockheed are both in the middle of the pack as far as where the defense stocks stand in October. BWX Technologies is up about 17% this month, and Elbit Systems is up nearly 7%. Howmet Aerospace is up 6% month to date.

Verizon reports before the bell

The communications stock is up 5% in three months.
Verizon is 3.6% from the Sept. 30 high.
As of tonight, the stock has a dividend yield of 6.2%.
AT&T has a dividend yield of 5.1% tonight.
AT&T is up 13% in three months.

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Verizon Communications in the past three months.

Texas Instruments

IPOs

Several debuts are expected on Wall Street Tuesday: SAG Holdings, which is a Cayman Islands holding company that specializes in the auto market. There’s also Huhutech, a China-based industrial company, as well as Jinxin Technology and Aldel Financial.
The Renaissance IPO ETF (IPO) hit a new high Monday. The ETF is up 46% in the last year. More