Investing

Sanjay Mehrotra, CEO, Micron
Scott Mlyn | CNBC

The S&P 500 and Nasdaq notched a solid performance in the first half of 2023, thanks to an impressive rally in major tech stocks. However, macro pressures have not abated, with minutes from the latest Federal Open Market Committee meeting hinting at more interest rate hikes to tame high inflation.
Given the ongoing uncertainty, investors could benefit by looking at stocks with strong fundamentals and long-term growth potential.

Here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Micron

First up is chipmaker Micron (MU), which reported better-than-feared fiscal third-quarter results in late June. The company cautioned that the recently imposed ban on its products by China remains a major headwind. However, investors chose to focus on management’s commentary on improving business conditions, with artificial intelligence driving strong demand for Micron’s memory chips.
Goldman Sachs analyst Toshiya Hari expects Micron’s near-term financial performance to continue to be noisy due to several factors, including the revenue uncertainty associated with the Cyberspace Administration of China’s ban and inventory-related issues.
Nevertheless, the analyst maintained a buy rating on Micron with a price target of $80, saying, “We have confidence in the company’s ability to mitigate potential share loss in China and drive share gains in the HBM3 market over time, while executing on its DRAM and NAND technology roadmaps.”
Hari believes that the company’s solid position in the DDR5 market, which is the latest generation of high-performance memory chips, and the prospects for its high bandwidth memory HBM3 chips (mass production to begin in early 2024) position it well to take advantage of the rapid growth in the AI space.

Hari’s recommendations are worth considering, as he is ranked No. 155 among more than 8,400 analysts tracked on TipRanks. His ratings have been profitable 64% of the time, with each rating delivering an average return of 19.7%. (See Micron Stock Chart on TipRanks)

Texas Roadhouse

Restaurant chain Texas Roadhouse (TXRH) is facing elevated input costs due to sky-high inflation. Despite near- and medium-term margin pressures, Wedbush analyst Nick Setyan continues to believe in the company’s ability to gain further market share in the casual dining restaurant space.
Checks by the analyst’s firm indicate that TXRH is set to deliver second-quarter same-store sales growth ahead of the consensus estimate of 8.2%. Accordingly, Setyan raised his Q2 same-store sales growth estimate from 8.5% to 9.5% to reflect robust dine-in traffic, the impact of increased local marketing efforts, and a higher off-premise mix.
Setyan expects continued strength in the company’s sales to more than offset the ongoing food cost inflation, including beef. He slightly increased his 2023 and 2024 EPS estimates, given his expectation of top-line upside.     
In line with his investment thesis, Setyan reaffirmed a buy rating on the stock with a price target of $123. He explained that his price target reflects a premium valuation, which is “appropriate given our expectation of accelerating market share gains within casual dining for the foreseeable future.”
Setyan holds the 798th position among more than 8,400 analysts on TipRanks. Additionally, 51% of his ratings have been profitable, with an average return of 7.2%. (See TXRH Blogger Opinions & Sentiment on TipRanks)

Carnival

Next on this week’s list is cruise operator Carnival (CCL). After being battered by pandemic-led lockdowns, Carnival and several other travel stocks have bounced back strongly this year due to robust travel demand.
Tigress Financial analyst Ivan Feinseth expects Carnival to benefit from solid bookings, higher pricing, and the reprioritization in consumer spending on travel. He projects revenue, economic operating cash flow, and net operating profit after tax to exceed pre-pandemic record levels by mid-2023.
“CCL’s accelerating Business Performance trends and significant recovery in cash flow continue to enable the ongoing funding of key growth initiatives, fleet expansion/transition, upgrades, and debt reduction,” said Feinseth, who ranks 174 out of more than 8,400 analysts tracked on TipRanks.  
The analyst noted that Carnival paid down $1.4 billion of its debt in the fiscal second quarter. CCL is expected to reduce its debt levels to less than $33 billion by the end of 2023, supported by improved cash flows. The company’s debt peaked at over $35 billion due to the disastrous impact of the pandemic on cruise lines.    
Feinseth reaffirmed a buy rating on CCL and boosted his price target to $23 from $13. He has a success rate of 62% and each of his ratings has returned 13.1%, on average. (See CCL Insider Trading Activity on TipRanks)

MongoDB

Feinseth is also bullish on database software maker MongoDB (MDB), which delivered market-beating results for the fiscal first quarter ended April 30 and raised its full-year guidance. The company had more than 43,100 customers at the end of the period, after witnessing the highest net new customer additions in more than two years.
Feinseth expects the growing integration of generative AI tools and capabilities will drive increased adoption of MongoDB’s highly customizable and scalable database as a service platform by enterprise customers.
The analyst said the company will continue to use its solid cash flows to invest in growth initiatives, including innovation, strategic acquisitions, marketing efforts to attract more customers, and international expansion.
“MDB will continue to benefit from increasing enterprise IT spending driven by enterprises’ ongoing needs to leverage AI capabilities as a growing competitive advantage,” said Feinseth.
Even after the solid year-to-date rally in MDB shares, Feinseth sees further upside in the stock. Accordingly, he reiterated a buy rating and increased the price target to $490 from $365. (See MongoDB Financial Statements on TipRanks)   

Amazon

E-commerce giant Amazon (AMZN) is holding its much-awaited 9th annual Prime Day on July 11 and 12. Prime Day is an annual sales event exclusively held for Amazon Prime members, which helps the company deepen its relationship with existing members and win new ones. 
JPMorgan analyst Doug Anmuth expects the 2023 Prime Day to see elevated demand despite a tough macro backdrop. The analyst projects Prime Day will generate about $7 billion in revenue, up more than 12% year-over-over, with gross merchandise value expected to increase more than 13% to $11 billion.
Anmuth highlighted the initiatives taken by Amazon over the past two years to strengthen its network. In particular, the company doubled the size of its retail network, established a massive last-mile transport network, and implemented a new sortation network to increase the speed of delivery for long-distance orders.
Amazon has also transitioned from a national U.S. fulfillment network to a regional model comprising eight interconnected regions to optimize inventory placement and other processes, reduce delivery costs, and boost speed.
“As such, Amazon should be well-equipped for the elevated demand of Prime Day, & the event should also help AMZN right-size inventory ahead of heavier demand deeper into 2H around the holidays,” explained Anmuth.
Amazon continues to be Anmuth’s “best idea,” with a buy rating and a price target of $145. Anmuth is ranked No. 110 among more than 8,400 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each rating delivering an average return of 16.7%. (See Amazon Hedge Fund Trading Activity on TipRanks)           More

New social media videos are start to removing the stigma tied to spending decisions.
As lifestyle choices become more transparent, that may ultimately help people become wealthier, experts say.

Photo taken in Amalfi, Italy
Sergio_pulp | Istock | Getty Images

“Have you ever been broke, but no one believes you because you don’t look like a broke person?”
New videos trending on social media platforms such as TikTok and Instagram are asking that very question.

“The thing is, like you broke, but like a bougie broke, like you ‘broque,'” one narrator said.
“Even on payday you broque,” also spelled “broké.”
The reels are often accompanied by lavish scenes, from restaurant meals with abundant food to travel scenes from locales such as Positano, Italy.
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Social media has upped the ante when it comes to showing off users’ lifestyle or experiences. The new videos show off the same coveted lifestyles with a wink: “You think I can afford this, but little do you know what’s in my bank account.”

Experts say that’s not necessarily a bad thing.
“Money is so taboo,” said Emily Irwin, managing director of advice and planning at Wells Fargo’s Wealth & Investment Management.
“To talk about that, to put it out there in a very vulnerable way, I think is also empowering of others to even start the conversation,” Irwin said.

‘Bougie broke’ is changing money conversations

“Bougie broke” describes the state of “always barely having adequate funds,” whether it be in cash, accounts or on credit cards, according to the Urban Dictionary.
The term is not new.
But the term is trending in a unique set of circumstances — inflation that recently pushed the rate of price increases to the highest in four decades, an already high cost of living that has made achieving major life goals such as buying a home feel out of reach, and a pandemic that tempted more people to prioritize live-for-today experiences.
Generally, “hedonic or conspicuous” spending with the aim of making other people see you in a certain way is not a good thing, according to Dan Egan, vice president of behavioral finance and investing at Betterment.
But the new bougie broke videos may have a positive influence in destigmatizing an uncomfortable topic — feeling conflicted about spending decisions.

It’s like asking, “What do other people think? Am I the only one here who feels this way?” Egan said.
“There’s definitely a trend towards every generation being a little bit more comfortable talking about things that were serious stigmas in previous generations,” Egan said.
The bougie broke videos highlight the fact that people prioritize different things, and you never know what’s totally behind what you’re seeing, Irwin said.
While you may assume someone’s flashy lifestyle comes with plenty of extra room for savings and the achievement of other big financial goals, that is not necessarily true, she said.
“To dispel that whole notion is really cool, I think,” Irwin said.

This could be a super-interesting way to put your goals out there and hold yourself accountable.

Emily Irwin
managing director of advice and planning at Wells Fargo’s Wealth & Investment Management

Not only do the videos take the stigma out of admitting you’re “bougie broke,” the platforms also offer a new way to share personal goals and hold yourself accountable, she said.
“One of the most impactful steps of setting goals is actually communicating them with someone,” Irwin said.
Whether it’s an audience of one or 1 million, knowing people are listening can help push you to keep going, she said.
“This could be a super-interesting way to put your goals out there and hold yourself accountable,” Irwin said.

Next up: ‘quiet luxury,’ ‘premium mediocre’

Another trend that’s catching on — “premium mediocre” — may have a powerful impact on how people live, Egan said. The term describes goods and services that are just slightly above average, say a six or seven out of 10.
For some things, say when it comes to the salad you eat, the difference in quality is probably not that different from what a billionaire consumes.
Part of the bougie broke trend is separating who you think of as being well off from those who visibly spend a lot of money, he said.
More truly wealthy people are pulling back from showing off their wealth in favor of quiet luxury, Egan said. Ultimately, that’s a good thing.
“We’re decoupling that sense of spending money as a signal for wealth versus spending money for spending money,” Egan said. More

Daniel Balakov | E+ | Getty Images

Company: Algonquin Power & Utilities (AQN)

Business: Algonquin Power is a renewable energy and utility company that provides energy and water solutions and services in North America and internationally. The company operates through two segments – (i) the regulated services group, which provides a portfolio of rate-regulated water, electricity and gas utility services, and (ii) the renewable energy group, which generates and sells electrical energy produced by its portfolio of renewable power generation facilities.
Stock Market Value: ~$5.7B ($7.87 per share)

Activist: Starboard Value

Percentage Ownership:  7.5%
Average Cost: $8.38
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. Starboard has made 111 prior 13D filings and has an average return of 27.52% versus 12.10% for the S&P 500 over the same period. This is Starboard’s first 13D filing in the utilities sector.

What’s happening?

On June 30, Starboard reported a 7.5% interest in Algonquin Power. The firm sent a letter to the company on July 6, saying that a sale of Algonquin Power’s renewables business can help it reduce leverage and provide “a safer dividend.”

Behind the scenes

Algonquin Power is a utility company based in Canada with most of its assets in the United States. The regulated services segment accounts for 87% of the company’s revenue and its business is comprised of the following: 60% electricity, 20% gas, and 20% water. Sixty-five percent of the electricity the company provides is generated by gas and 35% by renewables. The core utilities business is operated efficiently with a rate base growth rate of 8% versus 6% to 7% for peers. Despite this, Algonquin currently trades at 13 times to 14 times price-earnings with a 5% dividend yield, versus 17.5 times P/E and a 3.5% dividend yield for peers. Moreover, the water business is better than electric and gas, and Algonquin Power has more water exposure than peers, so it should trade at an even higher P/E ratio.

Arun Banskota was named Algonquin Power’s CEO in 2020 and has prioritized strategic transactions over operations. Accordingly, the company announced an agreement in October 2021 to buy Kentucky Power for nearly $3 billion. In December 2022, the Federal Energy Regulatory Commission denied approval of the transaction. In April 2023, the company terminated the agreement to acquire Kentucky Power. Amid these developments, Algonquin Power’s stock fell from over $15 per share to roughly $6.52 per share as shareholders lost confidence in management. And for good reason: A large acquisition was the last thing the company needed. Investors were looking for a stable, predictable company with a strong balance sheet and a good dividend ratio – things you generally expect from utilities. Instead, the acquisition would have added to an already over-leveraged balance sheet, putting Algonquin Power in an even less stable financial position.
The activist campaign here is relatively simple: Sell the renewables business and focus on the core, stable regulated utility business. Selling the renewables business will not only provide the company with a large capital infusion to stabilize its balance sheet and secure its dividend, but it would also provide the type of investors who like utilities businesses with more certainty, predictability and stability. In other words, it would do the exact opposite of what the Kentucky Power acquisition would have done. While the renewables business only accounts for about $300 million in revenue and roughly $200 million in earnings before interest, taxes, depreciation and amortization, there is a lot more value in this business than may appear for several reasons. That includes the fact that Algonquin Power has several joint ventures in which income has not started coming in yet, plus there are significant tax benefits that are not included in EBITDA. Based on the per megawatt basis of comps, the renewables business could yield over $5 billion in a sale to one or more larger companies.
Moreover, this may be similar to pushing an open door. In May, the company announced that it retained JPMorgan to conduct a strategic review of the renewables business. So, unlike many activist campaigns, persuading management is no longer an obstacle: It now just depends on execution. We have no doubt that Starboard will be keeping a close eye on the company to see how it executes this strategic review. If the firm feels the company needs some guidance in the process, we expect Starboard to seek board representation, given its history. Finally, if this happens it will likely lead to a more operationally focused CEO as opposed to a strategic visionary.
There is also an Activist ESG (AESG) thesis here. Algonquin Power’s energy generation is currently divided into natural gas and renewables. However, as equipment and facilities depreciate, they can no longer be included in the rate base, and the company cannot get paid on them. So, companies like Algonquin Power will close facilities and retire equipment and build new facilities and buy new equipment that can be added back into the rate base. The trend in the industry is toward more environmentally friendly assets. So, while the company presently is approximately 65% natural gas and 35% renewables, there is an opportunity to increase the percentage of renewables in the future.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and he is the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Algonquin Power is a holding in the fund. Squire is also the creator of the AESG™ investment category, an activist investment style focused on improving ESG practices of portfolio companies. More

If you win the Powerball jackpot, your winnings will shrink significantly after the IRS cut.
The winner can choose between a lump sum of $310.6 million cash or yearly payments worth $615 million.
The 30-year annuity option may offer more flexibility for tax purposes, experts say.

Justin Sullivan | Getty

More than $74.5 million ‘comes off the top’

Before winners see a penny of the multimillion-dollar jackpot, there’s a mandatory 24% federal withholding that goes to the IRS. The withholding applies to winnings of more than $5,000.

If you choose the $310.6 million cash option, the 24% withholding automatically reduces your cut by over $74.5 million. However, many taxpayers wrongly assume they’re off the hook after that 24%, Chichester said.
“That 24% comes off the top, but you’re still responsible for the other 13% at some point,” he said.

Here’s why: Millions in lottery winnings will push you into the top federal income tax bracket. For 2023, the 37% rate applies to taxable income of $578,126 or more for single filers and $693,751 or higher for married couples filing together. (You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.)  
Of course, the 37% doesn’t apply to all of your taxable income. For 2023, single filers will pay $174,238.25 plus 37% of the amount over $578,125. As for married couples filing together, the total owed is $186,601.50 plus 37% of the amount above $693,750.
The remaining tax bill depends on several factors, but could easily represent millions more.

You may also owe state taxes, depending on where you live and where you bought the ticket. While some states have no income tax or don’t tax lottery winnings, others have top income state tax brackets exceeding 10%. 
Powerball isn’t the only chance to win big this weekend. The jackpot for Friday night’s Mega Millions drawing, meanwhile, now stands at $450 million. The chance of hitting the jackpot in that game is roughly 1 in 302 million. More

As the Federal Reserve works to curb inflation, experts are forecasting for a mild recession.
Here’s when they say that downturn may start, following the latest jobs numbers.

Jamie Grill | Getty Images

It has been well reported that an economic downturn could be coming.
But the big question is when might a recession happen, and how bad could it be?

Many Americans fear an economic downturn could be as bad as the 2007 to 2009 Financial Crisis, a recent Nationwide survey of 2,000 adults found.
To that point, 68% are expecting a recession in the next six months, and 80% of those respondents expect it to be severe.
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Yet, predictions from various experts are not as dire.
“We’re not expecting that,” Kathy Bostjancic, chief economist at Nationwide, said of the firm’s outlook for the U.S. economy.

A recession is typically defined as a period when gross domestic product declines for two consecutive quarters.
“We’re still in the camp that we get a recession,” she said. “We think it’s been delayed, but not canceled.”

At Raymond James, the current forecast calls for a “very, very mild” recession, according to chief economist Eugenio Aleman.
“Our biggest issue today is whether it starts in the fourth quarter of this year or the first quarter of next year,” Aleman said.
For now, the firm is leaning towards the fourth quarter, he said.
“It will all depend on how strong the slowdown in employment is,” Aleman said.

Slower employment growth expected

Friday’s new jobs numbers showed private jobs creation in June reached the lowest level since December 2020, Aleman noted.
Nonfarm payrolls rose 209,000 in June, while the unemployment rate was 3.6%, the U.S. Department of Labor said Friday. 
That’s after ADP reported this week that private sector companies added 497,000 jobs in June — more than double expectations.
So far this year, the economy has created 85% of all of the jobs that were created in 2019, according to Aleman.

We’re still in the camp that we get a recession. We think it’s been delayed, but not canceled.

Kathy Bostjancic
chief economist at Nationwide

“Unless the economy starts to grow again, there is no reason why employment is so strong,” Aleman said.
A “very, very large slowdown in employment growth” is expected for the second half of the year, he said.
Employers have announced 458,209 job cuts so far in 2023, according to Challenger, Gray and Christmas, a 244% increase from the 133,211 cuts announced through June 2022.
Other economic indicators to take into account to gauge where the U.S. economy is headed, including new government inflation data due out next week. That may help determine whether the Federal Reserve continues to raise interest rates.
Raymond James is predicting a 1.3% growth rate for 2023 and 0.6% for 2024 — which coincides with the firm’s forecast for a  “very, very mild recession,” Aleman said.

Inflation ‘really weighs on the consumer psyche’

Images By Tang Ming Tung | Digitalvision | Getty Images

Nationwide’s consumer survey points to shaky confidence in the American economy.
While recent bank failures may bring back echoes of the 2008 crisis, inflation is actually the bigger factor that is weighing on people’s minds, Bostjancic said.
Even if people still have steady income, they are still faced with prices that are significantly higher than they were a few years ago, she said.
“That really weighs on the consumer psyche,” Bostjancic said.

To cope with high inflation, Nationwide’s survey found more than half of respondents are eating out less, with 54%. Others said they are driving less, 37%; delaying a major purchase 32%; and relying more on credit cards, 23%.
Yet as higher interest rates make carrying debts more expensive, experts are cautioning consumers that they should strive to pay balances down rather than take on more debt.
Auto loans and credit cards may be two weak points for consumers as household budgets tighten, experts warn.
Repayment of federal student loans, set to begin in the fall, may also weigh on consumers’ ability to make discretionary purchases, Aleman noted.

To get ahead of those risks, experts recommend those who can find the wiggle room to set aside more cash to prepare for future expenses or an unexpected job loss.
While it remains to be seen whether the Federal Reserve will continue to raise rates, the increases that have already happened put savers at a significant advantage.
That includes the possibility of 5% or more interest on online savings accounts, according to Greg McBride, chief financial analyst at Bankrate.
“We haven’t seen returns like that in 15 years,” McBride said. More

When federal student loan borrowers start making payments on their debt again in the fall, many will find they have a new, more affordable option.
Here’s what to know.

Rockaa | E+ | Getty Images

When federal student loan borrowers resume their payments in the fall, they’ll find another repayment option available to them.
The U.S. Department of Education said borrowers can enroll in “the most affordable repayment plan ever created” later this summer, and before the over three-year-long pause on federal student loan payments concludes.

According to the Education Department, the Saving on a Valuable Education, or SAVE, plan, is an income-driven repayment plan that can cut borrowers’ monthly payments in half, and will leave many people with a $0 monthly bill.
“The SAVE plan is very generous to borrowers, almost like a grant after the fact,” said higher education expert Mark Kantrowitz.
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But there’s a catch: Some of these benefits won’t fully go into effect until next summer, due to the timeline of regulatory changes.
The new SAVE plan replaces one of the existing income-driven repayment plans, which cap borrowers’ bills at a share of their discretionary income with the aim of making the debt more affordable to pay off.

Instead of paying 10% of their discretionary income a month toward their undergraduate student debt under the previous Revised Pay As You Earn Repayment Plan, or REPAYE, plan, borrowers will eventually be required to pay just 5% of their discretionary income. Borrowers who make under $15 an hour won’t need to make any payments, the department says.
Kantrowitz provided an example of how monthly bills could change with the overhauled option.

Previously, a borrower who made $40,000 a year would have a monthly student loan payment of around $151. Under the SAVE plan, their payment would drop to $30.
Similarly, someone who earned $90,000 a year could see their monthly payments shrink to $238 from $568, Kantrowitz said.
Most borrowers should qualify for the plan as long as their loan is in good standing.

Halved payments won’t go into effect until July 2024

The reduction in payments on undergraduate loans to 5% from 10% of discretionary income will be available to borrowers in July 2024, when the SAVE plan is fully implemented.
At that point, borrowers who have both undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon their original principal balances, the Education Department says.
But borrowers who enroll now in the SAVE plan — or before bills restart in the fall — should see certain benefits sooner.

A higher share of their income will be protected from their monthly payment calculation, for one. As a result, single borrowers earning less than $32,805 a year will not have to make any payments.
“This will allow them to focus on food, rent and other basic needs instead of loan payments,” the Education Department said.
In addition, under the SAVE plan, the agency will cease charging any interest that is not covered by the borrowers monthly payment.
Married borrowers who file their taxes separately also will no longer be required to include their spouse’s income to get their payment calculation. More

With higher prices causing financial strain, Americans are cutting back.
Now, more consumers are embracing the “little treat” lifestyle with less expensive indulgences.
Amazon Prime Day, Target Circle Week and Walmart+ Week could be good opportunities to get some retail therapy without breaking the bank, experts say.

Prime Day, competitor sales start soon

Amazon’s highly anticipated Prime Day starts at 3 a.m. ET on July 11 and run through July 12.
Competitors such Walmart, Target and Best Buy are also holding overlapping deal events — Best Buy’s “Black Friday in July” event will run July 10 to 12, while Walmart+ Week starts July 10 and goes to July 13. Target Circle Week offers an even longer stretch of deal days July 9 to 15.

Meanwhile, other retailers like Macy’s, Nordstrom, Sur La Table and Wayfair are cutting prices by 50% or more throughout the month.
“Inflation is pressing consumers to start early and find the deals from retailers willing to offer the door buster promotions that will drive traffic and excitement in a challenging environment,” said Matt Kramer, KPMG’s consumer and retail sector leader.

‘Lipstick index’ is back as form of retail therapy

Over the last six months, higher prices have led nearly 80% of consumers to cut back on nonessential goods, like entertainment, home décor and clothing, according to a recent CNBC and Morning Consult survey.
Still, nearly 80% of adults said they intend to shop on Amazon Prime Day, a survey by The Vacationer found. And, 70% of consumers said indulging in retail therapy can have a positive impact on your mental state, according to a separate report by shopping rewards site Smarty.
The theory goes that even in tough times, consumers might rein in their spending, but will still buy small luxuries.

The so-called lipstick index was initially coined by former Estee Lauder chairman Leonard Lauder after the bursting of the dot-com bubble in the early 2000s sent the economy reeling. Lauder noticed that women substituted costlier luxury items for smaller indulgences like lipstick.
“Many consumers shop on Prime Day to get their mid-year ‘retail therapy,’ but it’s important to spend smart so that the stress relief of going shopping doesn’t turn into an impulse purchase bill to pay off,” said Vipin Porwal, Smarty’s CEO.
To that end, here’s how to navigate the summer sales without breaking the bank.

What to buy on Prime Day

The best deals will be on Amazon’s own devices, such as 75% off the Amazon Fire TV 43-inch Omni Series. But it’s also a good time to find discounts on other popular personal tech from brands like Apple, Fitbit, Samsung, Google and Sony, according to BlackFriday.com.
Look for a wide selection of back-to-school essentials on sale, including children’s clothing, backpacks and tablets, according to RetailMeNot’s shopping experts.

Expect home and garden deals to dominate.

Julie Ramhold
consumer analyst at DealNews.com

For those interested in saving money on everyday goods, some of the best-selling items on Prime Day in previous years have included apparel, beauty products, kitchen essentials, toys and outdoor gear.
This time, “expect home and garden deals to dominate,” said Julie Ramhold, a consumer analyst at DealNews.com.

How to take advantage of Prime Day deals

To take advantage of Prime Day deals, you must be an Amazon Prime member. 
You can sign up for an annual or month-to-month membership or, if not yet sure, a free trial. For the first time, Amazon will also offer invite-only deals where members of its Prime subscription club can request an invitation to access discounts on items that typically sell out fast. (CNBC’s Select has more on how to avoid the membership fee in time to score Prime Day deals.)

Amazon workers sort packages for delivery in New York on July 12, 2022.
Michael M. Santiago | Getty Images News | Getty Images

Then, scroll through upcoming deals and set up deal alert notifications on Amazon or through your Alexa device so you’ll know when the price drops.
When a deal is live, add the item to your cart immediately. Some intermittent “Lightning Deals” sell out quickly, Ramhold said. Once a sale item is in your cart, you’ll have 15 minutes to decide whether to complete the purchase.
If there is a specific product you are set on and you don’t see it in upcoming sales, you can create a wish list and Amazon will alert you if it does become part of a Prime Day deal.

Where to find the best price beyond Amazon

Other retailers may have better deals without a membership required, according to consumer finance expert Andrea Woroch. Plus, most offer free shipping or curbside pick up.
A price-tracking browser extension such as CamelCamelCamel or Keepa can help you keep an eye on price changes and alert you when a price drops.
Some of Woroch’s top picks include $181 off the Beats Studio3 wireless noise cancelling headphones or $242 off the iRobot Roomba wi-fi connected robot vacuum at Walmart and $350 off the Lenovo 15.6-inch Touchscreen IdeaPad 3i laptop or $130 off a Dyson V8 Origin Cordless Stick Vacuum at Target.
Woroch recommends stacking discounts, for example, combining credit card rewards with store coupons and then using a cash-back site such as CouponCabin.com to earn money back on those purchases.
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Without yearly inflation adjustments for income thresholds, more investors are paying the net investment income tax than a decade ago.
The levy may apply to capital gains, interest, dividends, rents and more once your so-called modified adjusted gross income, or MAGI, exceeds $200,000 for single filers or $250,000 for married couples filing together.
The 3.8% tax may apply to the lesser of two thresholds: your actual net investment income, or your MAGI minus the net investment income tax threshold.

Vesna Andjic | E+ | Getty Images

Higher earners are more likely to owe an extra levy on investment earnings than a decade ago. But there are ways to reduce your tax bill, experts say.
Enacted as part of the Affordable Care Act health-care expansion, the 3.8% net investment income tax applies to capital gains, interest, dividends, rents and more once your so-called modified adjusted gross income, or MAGI, exceeds certain thresholds. MAGI can be higher than adjusted gross income because it adds back the foreign earned income exclusion.

While dozens of tax code provisions adjust for inflation every year, the thresholds for net investment income tax have remained the same since 2013 — MAGI above $200,000 for single filers and $250,000 for married couples filing together.
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“It’s been around for a while, and the rules haven’t changed since it went into effect,” said Brian Schultz, a certified public accountant and partner at Plante Moran in Southfield, Michigan. “But the cost of inflation and incomes have trended up since then, so it’s become more of an issue.” 
An estimated 7.3 million taxpayers paid nearly $60 billion in net investment income tax in 2021, compared with 3.1 million taxpayers paying $16.5 billion in 2013, according to the Congressional Research Service.

How the net investment income tax works

It’s possible you may owe net investment income tax along with regular income taxes, said certified financial planner Jim Guarino, a CPA and managing director at Baker Newman Noyes in Woburn, Massachusetts.

“Some folks refer to the net investment income tax as a type of stealth tax because taxpayers may not discover they owe this tax until they are preparing their income tax returns,” he said.
Here’s how it works. The 3.8% net investment income tax applies to the lesser of two thresholds: your actual net investment income, or your MAGI minus the net investment income tax threshold, he said.

For example, let’s say a married couple has a MAGI of $260,000 and $50,000 net investment income. The calculation would be $260,000 minus the $250,000 threshold, which means the tax applies to the $10,000 excess.
By comparison, if the same married couple has a $300,000 MAGI and $15,000 net investment income, subtracting the $250,000 threshold from their MAGI leaves $50,000. So in this case, the tax applies to the $15,000 net investment income.
You can also trigger the tax from a one-time income boost, such as the sale of a business or home sale with profits above the capital gains exclusions, Schultz said.

‘Awareness and planning are integral’

With many investors unaware of the net investment income tax, “awareness and planning are integral,” Guarino said, noting that it may be challenging for do-it-yourself tax preparers.
Investors who may be subject to the tax may consider strategies such as buying municipal bonds, which avoid federal taxes on interest and may bypass state and local levies, depending on where you live, he said. More