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Royal Caribbean’s “Icon of the Seas,” billed as the world’s largest cruise ship, sails from the Port of Miami in Miami, Florida, on its maiden cruise, on Jan. 27, 2024.
Marco Bello | Afp | Getty Images

The demand for cruises is still going strong — and it doesn’t appear to be letting up anytime soon.
The industry was the last to recover from the Covid pandemic, but once it did, it has been enjoying strong pricing and booking momentum. While pricing growth is starting to normalize somewhat, it is still well above the rate of inflation, said Patrick Scholes, travel and leisure analyst at Truist.

“Cruise companies are having a moment right now,” he said in an interview with CNBC.
Despite price increases, cruises are still cheaper than land-based lodging. That’s helping the industry stand out as some weakness creeps into other areas of the travel sector. For instance, on Wednesday, Hilton CEO Christopher Nassetta said during the company’s quarterly earnings call that U.S. leisure travel demand “is flat, maybe even a little bit down.”
“The Cruise industry’s continued strength in bookings/demand, whilst cracks form across much of the rest of the travel market, is primarily driven by the combination of the still significant discount to land-based vacations coupled with the relatively elevated service levels,” Barclays analyst Brandt Montour said in a note last week.
As of the second quarter, on a weighted-average basis, the big three cruise operators reported net revenue per diems 17% above 2019, he wrote. Net revenue per diem is the net revenue per passenger cruise day. Caribbean hotel room prices are about 54% ahead of 2019 and U.S. resort prices are up 24%, said Montour, quoting figures from data analytics firm STR.

Carnival CEO Josh Weinstein agreed those so-called cracks elsewhere can help boost his business.

“If that’s true that the consumer is slowing down in other sectors, that really bodes well for us to be able to take them into our demand profile because we will be of value. We give a better experience at a better price than they can achieve elsewhere,” he said in an interview with CNBC’s “Money Movers” after reporting a third-quarter earnings and revenue beat on Sept 30.
Royal Caribbean is set to release its quarterly results on Tuesday, followed by Norwegian Cruise Line Holdings’ report on Wednesday.

Gap wider than it appears

A price gap between hotels and cruises is not new. That’s largely because a lot of hotel demand comes from business travel, while cruise demand is purely from leisure travelers, who are much more price sensitive, explained UBS leisure analyst Robin Farley.
Yet that gap has become even wider than it appears over the last several years, her research shows. That means the cruise lines may have more room to grow, she said.
One reason is the increase in direct bookings for cruises since 2019, according to Farley. That means fewer commissions paid out to travel agents, which is included in gross per diems but netted out of the net per diem line.
“While not disclosed by companies, we believe there has been a meaningful increase in passengers booking directly since 2019,” she wrote. “If the share of cruises booked directly grew by 5 to 10 [percentage points], we calculate that could add close to 200bps to reported net per diems even though it would not mean any growth in gross per diems, or actual ticket price.”
Separately, all three major cruise lines have increased the bundled and presold onboard revenue since 2019, which also is included in their per diems, Farley said. That could suggest another 300 basis point gap between cruise and hotel price growth that doesn’t show up in the metrics, she argued. One basis point equals 0.01%.
Farley sees another potential 350 basis point gap for Royal Caribbean because of its CocoCay private island, which has a water park, zip line and other attractions for which passengers pay an additional cost.

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Royal Caribbean year to date

On top of that, all three cruise lines have been rolling out high-speed internet access through Starlink onboard, which could also boost passenger revenue.
“The wider that gap, the better the opportunity for the cruise lines to have upside,” Farley said in an interview with CNBC.
Meanwhile, every bit of increased pricing helps the cruise operators. Truist’s Scholes’ proprietary research on real bookings for next year shows the price is up mid- to high-single digits. Wall Street is only expecting about 3% growth, but it could easily be 5% or more, he said.
That matters because the industry has extremely high fixed costs.
“One extra point of pricing is extremely material to profitability,” Scholes said. “Almost 90% flows through to the bottom line.”

Investing in cruise stocks

Wall Street analysts are largely bullish on cruise operators’ prospects.
“If we think back to 10 years ago before Covid, these companies were competing against themselves,” said Scholes. Now, they are competing against Orlando theme parks and Las Vegas vacations with more attractions available to passengers.
“They are casting a much wider net now,” he said.

Water slides at the Thrill Island waterpark onboard the Royal Caribbean Icon of the Seas cruise ship at PortMiami in Miami, Florida, US, on Thursday, Jan. 11, 2024.
Bloomberg | Bloomberg | Getty Images

Royal Caribbean was the first to up the private-island ante with CocoCay.
“This private island is a really unique offering. It’s not just a nice beach. It has all those amenities that they can charge for,” said UBS’ Farley, who has a buy rating on the stock.
The company’s Icon of the Seas, which officially debuted in January, received a lot of fanfare as the world’s largest cruise ship. Royal Caribbean’s latest ship, Utopia of the Seas, set sail this summer. The fact that the latter offers three- and four-night weekend getaways shows it is really going after first-time cruise passengers, Farley noted.
“They have had so many home runs,” she said.
Royal Caribbean has an average rating of overweight by the analysts covering the stock, but it has about 1% downside to the average price target, per FactSet. The stock has already rallied nearly 56% year to date.
Carnival also has an average rating of overweight by the analysts covering the stock and 12% upside to the average price target, FactSet shows.

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Carnival year to date

During its third-quarter earnings report, the company posted record operating income and raised its estimate for 2024 adjusted earnings before interest, taxes, depreciation and amortization as a result of strong demand and cost-saving opportunities. Carnival also said cumulative advanced booked positions for the full-year 2025 is above the previous 2024 record, with prices ahead of the prior year.
Nearly half of next year is booked — and that doesn’t include the benefit of its new island, Celebration Key, Farley pointed out. The island will be more along the lines of Royal Caribbean’s CocoCay and is set to be launched in July, she said.
“It is a nice catalyst for Carnival,” she said. “It is creating a new destination [and] that tends to drive new interest.”
However, Scholes said his research shows that out of the three major cruise lines, the Carnival brand is facing the most pricing competition from private cruise operator, MSC.
Shares of Carnival have underperformed the market, gaining about 13% year to date. In comparison, he S&P 500 is up about 22%.
Lastly, Norwegian Cruise Line Holdings has an average analyst rating of overweight and about 4% upside to the average price target, according to FactSet.
One of the firms bullish on Norwegian is Citi, which upgraded the stock to buy from neutral on Oct. 9. The call sent shares 11% higher that day. The firm also raised its price target to $30 from $20, suggesting 29% upside from Thursday’s close.

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Norwegian Cruise Lines stock year to date

“NCLH’s shift in strategy gives us confidence that the considerable pricing opportunity will not be offset by runaway costs,” analyst James Hardiman wrote in an Oct. 9 note.
Investors should anticipate a 23% compound annual growth rate for earnings per share over three years, he said. However, that percentage could be closer to 30% if Norwegian can keep its 2.5% yield-to-cost spread, he added.
While Norwegian hasn’t officially announced a CocoCay-type private island experience, Scholes is betting it will have a competitive product by 2026.
The stock has also underperformed the broader market, up nearly 16% so far this year.

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Kenvue, a unit of Johnson & Johnson’s consumer health business.
CFOTO | Future Publishing | Getty Images

Company: Kenvue Inc (KVUE)

Business: Kenvue is a consumer health company. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. Self Care product categories include pain care; cough cold allergy; and “other self care.” The Skin Health and Beauty segment’s product categories include face and body care and hair, sun and others. The Essential Health segment’s product categories include oral care, baby care and other essential health. Its differentiated portfolio of brands includes Tylenol, Neutrogena, Listerine, Johnson’s, Band-Aid, Aveeno, Zyrtec and Nicorette. The company sells and distributes its product portfolio in more than 165 countries across its four regions. The four region consists of North America, Asia Pacific (APAC), Europe, Middle East, and Africa (EMEA), and Latin America (LATAM).
Stock Market Value: $43.36B ($22.64 per share)

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Kenvue shares in 2024

Activist: Starboard Value

Ownership: n/a
Average Cost: n/a
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. Starboard has taken a total of 152 prior activist campaigns in its history and has an average return of 25.02% versus 13.65% for the Russell 2000 over the same period. In 51 of these situations, Starboard had an operational thesis as part of its activist campaign, and it made an average return of 36.19% versus 15.29% for the Russell 2000 over the same period.

What’s happening

On Oct. 21, news broke that Starboard Value took a position in Kenvue. The firm thinks there is an opportunity to improve revenue growth and margins in the Skin Health and Beauty segment.

Behind the scenes

Kenvue is a consumer health company specializing in Self Care, Skin Health and Beauty, and Essential Health, with world-class brands that are synonymous with these three categories such as Tylenol, Neutrogena and Neosporin. The company was spun out of Johnson & Johnson in May 2023, which by all accounts seemed like a smart move by management as the consumer health sector lacked synergies with J&J’s core competencies of pharma and medtech. Coupled with the fact that consumer health only made up 16% of total sales for J&J prior to the spin, it was hard to argue against the merit of this separation that now allows a separate company to prioritize these great brands and businesses.

At a glance, post-spin, the company seemed poised to flourish. It has stronger brand recognition than peers like Colgate-Palmolive, Haleon, and P&G. It also has lower threat from private-label alternatives than peers, with private labels only having a 6% share of Kenvue’s product categories compared to a peer median of 10%. Additionally, Kenvue operates in extremely attractive end markets with structural tailwinds, including an increasingly health-conscious consumer and a growing middle class in emerging markets, that provide a strong foundation for low to mid-single digit revenue growth. Despite their enticing market position and superior brand quality, the company has traded poorly since its spin with the lowest valuation multiple of its peers at 18-times – staggeringly lower than the peer median of 25-times. As a result, the company has delivered a -15% total shareholder return since the IPO compared to a peer median of 6% shareholder return over the same period.
Kenvue has struggled with its organic growth in a way that it seems to have not expected. The company missed its post spin FY23 guidance for organic growth by 75 basis points, even after previously lowering their guidance by 25 basis points. Kenvue expects a 3.3% compound annual growth rate compared to a 4% median for peers. This is not a huge difference, but an issue that can easily be identified and rectified. Self Care delivered a strong year of 8.4% organic growth, and Essential Health grew ahead of expectations at 3.6% organic growth, so these sectors are not the issue. The challenge for the company lies within Skin Health and Beauty, which delivered only 1.8% organic growth despite peers growing 4.4% from CY19-CY23. If you were to take Skin Health and Beauty out of the picture, Kenvue’s organic growth from FY19-FY23 would have been 5.1%, significantly outperforming the consolidated market growth of 4%.
Starboard’s path to value creation involves management adopting a “marketing first” strategy and embracing omni-channel and digital marketing. Skin Health and Beauty has been proven to be a marketing business whose growth can be greatly aided by social media. This can make marketing an extremely powerful and profitable tool for companies that know how to use it. L’Oreal’s acquisition of CeraVe in 2017 serves as a strong example of this. After acquiring CeraVe for $1.3 billion, L’Oreal launched a hyper-focused digital marketing campaign that included iconic advertising material such as the witty “Michael CeraVe” campaign. While it may seem goofy, these strategies really work: Just look at CeraVe’s sales growth of 10-times over the first five years after the acquisition. Starboard plans to tackle the issues with the Skin Health and Beauty business head on, as it appears to be the key obstacle preventing Kenvue from creating immense shareholder value. There is no doubt about the strength of Kenvue’s brands and products in this sector — highlighted by two shining stars, Neutrogena and Aveeno — that remain highly regarded and widely purchased. A better marketing plan will not only increase the top line at Skin Health and Beauty but also should improve the operating margins, which are presently 12% versus a peer median of 17%.
Kenvue seems to already be making strides towards this business model, as they increased FY24 advertising spend to 11.1% of sales compared to 8.7% for FY23. This budget increase reflects a shift toward a “marketing first” approach, particularly through social media, as evidenced by their recent Neutrogena Collagen Bank product launch. First, the company introduced the product on TikTok prior to in-store distribution. Next, it partnered with major celebrity Hailee Steinfeld to be the face of the product, who currently has over 25 million social media followers. Lastly, the company introduced it in the early innings of the Collagen Bank beauty trend.
As far as activist campaigns go, there are two extremes. There are Herculean, heavy-lift campaigns, where the activist comes in pushing for a complete overhaul of the board, capital allocation, management team and operations. Then there is the “pushing an open-door” campaign — situations where the activist and company are aligned, there are clear paths to value creation and engagement is constructive. By all accounts, this situation is the latter. Kenvue has a solid business with iconic brands and one underperforming segment in Skin Health and Beauty. Starboard believes this can be remedied by embracing a marketing-driven culture, and this is already happening. Management has committed to prioritizing marketing. They have already begun pushing a marketing-first mentality with increased social media campaigns and celebrity partnerships. Starboard has not made any public demands for board representation, and we expect that they will monitor Kenvue’s progress as an active shareholder before making any decisions in this regard. However, the firm does not have that much time to spare as the nomination window for directors is between Nov. 11 and Dec. 11. It is possible that Starboard will nominate some directors just to preserve its rights while it is talking with management and monitoring the progress.
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

The taxable income limit for the 0% capital gains bracket will be higher for 2025.
That could offer a chance to harvest profits or rebalance brokerage account assets without triggering a tax bill.
But you need to project your complete tax situation first, experts say.

dowell | Moment | Getty Images

The earnings limit for the 0% capital gains bracket will rise in 2025, which could offer tax planning opportunities, financial experts say.
At sale, profitable assets owned for more than one year qualify for lower taxes — known as long-term capital gains. Those rates are 0%, 15% or 20%, depending on taxable income.   

The IRS this week unveiled inflation adjustments for 2025, including higher taxable income limits for the 0% capital gains bracket.
More from Personal Finance:Key change to 529 plans this year is already triggering parents to save moreDo I have enough money to retire? Ask yourself 3 questions to tell if you’re readyHere’s how much you can make in 2025 and still pay 0% capital gains
Starting in 2025, single filers qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less, while married couples filing jointly are eligible with $96,700 or less.

You could qualify for the 0% bracket with higher earnings than you expect. The taxable income formula subtracts the greater of the standard or itemized deductions from your adjusted gross income.
Here’s what investors need to know about planning around the 0% capital gains bracket, according to financial experts.

Weigh ‘tax gain harvesting’

If you’re sitting on profitable investments, the 0% capital gains bracket could offer a chance for “tax gain harvesting,” said certified financial planner Ashton Lawrence, a director at Mariner Wealth Advisors in Greenville, South Carolina.
Here’s how it works: Investors in the 0% capital gains bracket can strategically sell profitable brokerage account assets without triggering capital gains taxes.
You can then repurchase the same assets to “reset your cost basis,” or original purchase price, to save on future taxes, Lawrence said.

Opt for tax-free rebalancing

You can also leverage the 0% capital gains bracket to rebalance brokerage account assets without triggering a tax bill, experts say. You rebalance by purchasing and selling assets to reach a target mix of assets based on your goals and risk tolerance.With the stock market up significantly in 2024, investors should “take some of those gains off the table” before 2025, said George Gagliardi, a CFP and founder of Coromandel Wealth Management in Lexington, Massachusetts. 
“The S&P 500 and some of its largest companies have all seen substantial gains the past few years,” he said. But “markets don’t go up forever” and current gains could become losses. Rebalancing can help reduce portfolio risk amid future volatility, depending on your goals and timeline.

‘Project your entire tax situation’

While the 0% capital gains bracket could save you money, you’ll need to fully estimate your income, which includes assets you plan to sell.
“It’s crucial to project your entire tax situation with and without the capital gains,” said Dallas-based CFP Brandon Gibson, wealth manager at Gibson Wealth Management. “Don’t just do rough math based on the capital gains brackets.”
Plus, boosting your income can trigger other “tax side effects,” such as higher Social Security taxes, increased Medicare premiums or eligibility for marketplace health insurance subsidies, he said. More

Most experts expected that a new rule, which allows money saved in a 529 college savings plan to roll into a Roth individual retirement account, would help increase interest.
Now, 76% of parents say this benefit makes them more likely to open a 529 account, according to a recent report.
Already, $100 million in assets from 15,000 529 plans were transferred to Roth IRA accounts, other data shows.

Flexibility ‘motivates’ 529 funding

The added flexibility is having a significant impact on savers: 23% of parents said the ability to roll over funds into a Roth IRA was one of the key factors that most influenced their decision to open a 529 plan, according to a recent report by Saving For College, a Miami-based company focused on making 529 plans more accessible.
Among the roughly 12% of respondents who don’t yet have a 529 plan, 76% say this benefit makes them more likely to open an account, the report found.

Further, 57% of families with an account are also more likely to boost their 529 plan contributions due to the 529-to-Roth rollover benefit that went into effect in January. The survey polled more than 1,100 adults through Saving For College’s site and newsletter, so respondents were likely more aware of the advantages of 529 plans.
“Knowing there’s a little more flexibility does help motivate clients to fund a 529,” said David Nienaber, a financial planner and shareholder at Foster & Motley Wealth Management. The firm ranked No. 34 on the 2024 CNBC Financial Advisor 100 list.

529-to-Roth rollovers are ‘icing on the cake’

Previously, tax-advantaged 529 plan withdrawals were limited to qualified education expenses, such as tuition, fees, books, and room and board. The restrictions loosened in recent years to include continuing education classes, apprenticeship programs and student loan payments.
But with the 529-to-Roth rollovers, these plans offer much more flexibility, even for those who never go to college, which Nienaber called “the icing on the cake.”
One point of resistance to 529s had been if a child doesn’t end up needing some, or any, of that savings for education, other experts also say.
“The potential of overfunding a 529 plan account and having to face tax consequences with removing excessive funds has been a real concern for many education savers over the past few years,” said Vincent Birardi, a wealth advisor at Halbert Hargrove Global Advisors in Long Beach, California, which ranked No. 54 on CNBC’s FA 100.

“Of the new benefits, this is the one we’ve seen the most excitement around,” said Martha Kortiak Mert, chief operating officer at Saving For College.
“The problem this solves is the barrier to entry,” she said. “This opens up possibilities, new opportunities of what they can do with this kind of account.”
There are still some limitations.
The 529 account must have been open for 15 years and account holders can’t roll over contributions made in the last five years. Rollovers are subject to the annual Roth IRA contribution limit, and there’s a $35,000 lifetime cap on 529-to-Roth transfers.

Total investments in 529s hit $508 billion

Financial experts and plan investors agree that 529 plans are a smart choice for many. And yet, in previous years, data shows that regular contributions to a 529 college savings plan often took a back seat to paying more pressing bills or other priorities.
At the same time, sky-high costs and concerns over ballooning student loan balances have weighed heavily on considerations about college for students and their parents.

Fstop123 | E+ | Getty Images

But this year, in part because of the new changes, more parents are utilizing a 529 college savings plan, with most making recurring monthly and quarterly contributions.
In 2024, total investments in 529s jumped to $508 billion in June, up nearly 13% from $450.5 billion the year before, according to data from the College Savings Plans Network, a network of state-administered college savings programs.

How much you can contribute to a 529 plan

This year, individuals can gift up to $18,000, or up to $36,000 if you’re married and file taxes jointly, per child without those contributions counting toward your lifetime gift tax exemption, up from $17,000 in 2023.
Anyone can contribute — and for grandparents, there is also a new “loophole,” which allows them to fund a grandchild’s college fund without impacting their financial aid eligibility.
High-net-worth families that want to help fund a family member’s higher education could also consider “superfunding” 529 accounts, which allows front-loading five years’ worth of tax-free gifts into a 529 plan.
In this case, you could contribute up to $90,000 in a single year, or $180,000 for a married couple. But then you wouldn’t be able to give more money to that same recipient within a five-year period without it counting against your lifetime gift tax exemption.
A larger lump-sum contribution upfront may potentially generate more earnings compared with the same size contribution spread out over a few years because it has a longer time horizon, according to Fidelity.
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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 24, 2024. 
Brendan McDermid | Reuters

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Here’s what CNBC TV’s producers were watching as the S&P 500 ended a three-day losing streak, and what’s on the radar for the next session.

Tesla

The stock is back in fashion among traders and investors. Tesla was up nearly 22% Thursday. The stock is now just 4% from the July 11 high.
Volume was off the charts today, more than tripling the 30-day average.
CNBC contributor Jeff Kilburg wrote up an options strategy on the stock the evening of the Robotaxi demonstration Oct. 10. It was featured on CNBC.com/pro. Kilburg sold out of the position Thursday when the stock hit $255 a share, locking in a profit that netted him about 220% in two weeks.
The stock went as high as $262.12 Thursday, breaking far above the 200-day moving average. 
The lifetime high is $414.50, hit back in the fall of 2021.
It was Thursday’s most sought-after ticker on CNBC.com, even outpacing the popular 10-year Treasury. 

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Tesla shares in 2024

Cramer on the rig

CNBC’s “Mad Money” did the full hour 140 miles deep into the Gulf of Mexico on a rig run by Chevron. If you want to know about the energy market, go back and take a look. He hit the big integrated stocks, the drillers and more.
Cramer spoke with CEO Mike Wirth who said, “Energy is such a vital part of the global economy that if we find ourselves in the situation where energy supplied are constrained, particularly if they’re constrained by political actions, it can trigger inflationary reactions in the economy.” He added that “because the price of energy is embedded in everything, because everything is delivered, and everything is manufactured, energy is the lifeblood of the economy. So, affordable and reliable energy is essential to keeping inflation at a level that economies can handle.”
Chevron is 10% from the April high and flat year to date.
The S&P Energy sector is 8% from the 52-week high. It’s up about 8% year to date.
Targa Resources is the top performer in the sector, up 94% in 2024.
Williams Companies is second, up 51% in 2024.
Kinder Morgan comes in third, up 42% this year. All three names are near highs.
APA, Halliburton and SLB are at the bottom of the sector. They are down in the 20% to 30% range in 2024.

Capri-Tapestry deal blocked

A judge said “no” to the proposed retail deal after the Federal Trade Commission sued to block it.
Tapestry jumped 14% after the bell. Capri, which holds brands including Versace, Jimmy Choo and Michael Kors, is down 47%. Tapestry has Coach, Kate Spade and Stuart Weitzman.

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Tapestry in 2024

The restaurants

CNBC TV’s Kate Rogers will look ahead at upcoming restaurant reports.
This includes Starbucks and McDonald’s. Both took tumbles on bad news this week. McDonald’s is down nearly 5% week to date in the wake of the E. coli problems. The stock is up 19% in three months. Starbucks is now flat this week. Shares are up 30% in three months. In large part, that’s due to optimism over the new CEO, former Chipotle chief Brian Niccol
Chipotle is on Rogers’ watchlist. The stock is up 15% in three months, but it’s 14% from the June high.
Cava is up 78% in three months. That’s a lot of pita. The stock hit a new high Thursday.
Sweetgreen is up about 50% in three months. The stock is 8% from the high reached two weeks ago.
Darden is up 16% in three months, and it’s 8% from the March high. Brands include Olive Garden, LongHorn Steakhouse, Ruth’s Chris Steak House, The Capital Grille and Seasons 52.
Bloomin’ Brands has Bonefish Grill and Outback Steakhouse, but it is the stock that’s really down under: Shares are off 15% in three months, and the stock is 47% from the March high.

Fannie and Freddie

Both stocks are up as of late. In part, that’s due to speculation that if former President Trump wins the election, he’ll privatize them.
Federal National Mortgage Association is up about 9.4% in four days. The stock is up roughly 29% in October.
Freddie Mac is up 5.4% this week so far, and it’s up 18% in October. More

Brad Garlinghouse, CEO of Ripple, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 4, 2022. 
Mike Blake | Reuters

Ripple Labs CEO Brad Garlinghouse has been skeptical of crypto regulation in the U.S., but he is feeling highly optimistic about the post-election environment around the corner.
“This is the most important election we’ve had, but I also believe no matter what happens, we’re going to have a more pro-crypto, more pro-innovation Congress than we’ve ever had,” he said in a Wednesday conversation with CNBC at DC Fintech Week.

Ripple, a veteran company in crypto known in part for its close association with the XRP token, operates a global payments business with banks and financial institutions as its main customers. About 95% of its business takes place outside of the U.S., which Garlinghouse said is partly a reflection of the contentious environment in Washington.
In 2020, the U.S. Securities and Exchange Commission sued Ripple, but last year the company scored a big victory for the industry when a judge determined that XRP is not a security when sold to retail investors on exchanges.
On Wednesday, Garlinghouse offered a piece of advice to fintech startups in this changing time: “Incorporate outside the United States.”
Nevertheless, he was upbeat about where the industry is heading in the long term.
“Anybody who doesn’t believe that no matter what, we’re going to end up in a better place, is not paying attention … and [if in] 10 years we look back on how the U.S. got it wrong for years and years. … It’s going to be a speed bump, and this industry is going to continue to thrive.”

An approaching ‘reset’

Ripple has donated at least $45 million to the Fairshake pro-crypto political action committee. Co-founder Chris Larsen recently donated $11 million to Vice President Kamala Harris’ campaign. Garlinghouse pointed out he was intentionally wearing a purple tie on Wednesday.
“Obviously, Trump came out early and very aggressively in a pro crypto [way] and said he’s the crypto president,” Garlinghouse said. “Team Harris have been more nuanced. This week, they had some of the most constructive things they have said publicly.”
“Kamala Harris is from Silicon Valley, she has generally been pro technology over the years,” he added. “She has been relatively quiet on the topic, but I think no matter what happens, we’re going to see a reset.”
Because of that contrast, sentiment in the crypto industry has grown increasingly partisan — even as it has previously applauded growing bipartisan support for crypto issues in Congress. Many pro-crypto voters fear that the Harris campaign would continue the “attack” on crypto, as Garlinghouse called it.

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“No matter what happens, we’re going to leave behind a failed approach from the Biden administration,” he said. “It has been an attack, and it isn’t just the SEC. The [Office of the Comptroller of the Currency] is hostile towards crypto; the Treasury is hostile towards crypto.”
He highlighted banks becoming unwilling to work with crypto businesses in what many in the industry have referred to as “Operation Chokepoint 2.0.” The term refers to an Obama-era project known as “Operation Choke Point,” which discouraged banks from serving risky but legal enterprises, such as payday lenders and online gambling businesses.
“That is a hostile administration, and no matter what happens in this next election, we will have a reset,” Garlinghouse said. “We can debate the magnitude of that reset, and there’s lots of disagreement about that. … We’re going to see forward progress, and I certainly am looking forward to that.”
Though Garlinghouse hasn’t publicly backed any of the presidential candidates, he said that this week he endorsed John Deaton, an attorney seeking to unseat Sen. Elizabeth Warren, D-Mass. Warren has been critical of the crypto industry, seeking additional oversight of the space.

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The IRS on Tuesday announced 2025 inflation adjustments for long-term capital gains, which apply to investments owned for more than one year.
In 2025, single filers can have $48,350 in taxable income or $96,700 for married couples filing jointly and still pay 0% capital gains taxes.
The 0% capital gains bracket could offer a tax planning opportunity for investors, experts say. 

Phynart Studio | E+ | Getty Images

If you’re ready to rebalance investments or harvest profits, you could shield more earnings from capital gains taxes in 2025.
The IRS on Tuesday announced dozens of inflation adjustments for 2025, including long-term capital gains brackets, which apply to assets owned for more than one year.

Starting in 2025, there are higher taxable income thresholds for the 0% capital gains bracket, meaning investors can sell more assets without triggering taxes.
The 0% capital gains bracket creates a “significant opportunity” for tax planning, according to certified financial planner Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas.
More from Personal Finance:The IRS unveils higher capital gains tax brackets for 2025How to rethink cash as the Fed cuts interest ratesHealth savings accounts offer ‘unmatched’ tax benefits, expert says
The 0% capital gains bracket can “allow you to transform your taxable account into a tax-free account, at least temporarily,” said Krishnaswamy, who is also an enrolled agent.
Here’s what to know about the 0% long-term capital gains rate for 2025 and how to qualify.

Who qualifies for 0% capital gains in 2025

Starting in 2025, single filers can 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.
However, taxable income is significantly lower than your gross earnings. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Most taxpayers use the standard deduction, which also adjusts for inflation. In 2025, the standard deduction increases to $15,000 for single filers and $30,000 for married couples filing jointly.

In 2025, a couple making well over $100,000 could still fall within the 0% capital gains bracket after subtracting the standard deduction, experts say. 
For example, if a married couple earns $125,000 together in 2025, their taxable income could be under $96,700 after subtracting the $30,000 standard deduction.

However, “people still need to be mindful about their income and where they may fall within the bracket,” said Ashton Lawrence, a CFP and director at Mariner Wealth Advisors in Greenville, South Carolina. “Surpassing the 0% threshold by even a small amount could mean a 15% tax on all gains above the limit.”
Plus, profitable assets you sell will be part of the taxable income calculation and could bump you above the 0% capital gains threshold. Before selling assets, you should run a full-year tax projection and understand how the increased income could impact your situation.

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Traders work on the floor of the New York Stock Exchange (NYSE) on October 22, 2024 in New York City. 
Spencer Platt | Getty Images

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Here’s what CNBC TV’s producers were watching as the 30-stock Dow and the S&P 500 posted a third straight losing day, and what’s on the radar for the next session.

The airlines

After two big interviews regarding the Boeing strike in two days, CNBC TV’s Phil LeBeau turns his attention to two big airlines.
He’ll interview Robert Isom, CEO of American Airlines, in the 7 a.m. hour ET and Robert Jordan, CEO of Southwest Airlines, in the 9 a.m. hour.
American Airlines is up 22% in the past three months. The carrier reports on Thursday morning. American is 20% from the March high.
Southwest also reports Thursday morning. The stock is up 13% in three months. Southwest is 12.6% from the February high.
Over the last three months, United Airlines is the leader in the group. Shares are up 52% over that period. The stock hit a high Monday.

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American Airlines over the past three months

The utilities

Utilities are the only S&P 500 sector up so far this week: up 0.26%. It is up 17% in three months.
Four utilities hit new highs Wednesday, including Dominion Energy, DTE Energy, Consolidated Edison and Entergy.
Entergy is now at an all-time high. The stock is up 5.3% in a month and 24% in three months.
Consolidated Edison, also hit a new all-time high Wednesday. The stock is up 3% in October, and it has gained 15% in three months.
DTE is at a 25-month high. The stock is up about 3% in a month, and it’s up 12% in three months.
Dominion Energy is at a 20-month high. The stock is up 5.4% in October and up 20% in three months.

Honeywell reports before the bell

In a week full of reports from big industrials, Honeywell is next on the list. The company reports Thursday before the bell.
The stock is up 1.4% since last reporting three months ago and hit a high Monday. The stock is up 6.6% so far in October.
The S&P Industrials sector is up 39% in the last year.
Howmet Aerospace is the top performer, up 136% in the past year. It’s followed by GE Aerospace, up 113%. Axon is up 110% in the last year.
Paycom, Boeing and UPS are the weakest performers in the industrials in the last year. Paycom is down 36% in the past year, while UPS is down 11%. Boeing is down 13% in a year.

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Honeywell in 2024

CBRE Group reports before the bell

The real estate investment trust reports Thursday morning.
The stock is up 24% in the last three months and hit a high Monday.
Many of the office REITs have had a solid three months.
Vornado is up 46% in three months. BXP is up nearly 26% in three months, and SL Green is up 20%. Brandywine is up about 12% in that period.
The S&P Real Estate sector is up 8.5% in three months. It’s 2% from the mid-September high.

Several regional banks report Thursday

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Valley National Bancorp over the past three months

Weyerhaeuser reports after the bell

The company specializing in timber products is up 5% over the past three months.
Weyerhaeuser is 12% from the March high.
There are two ETFs with nifty symbols in the space. CUT is the Invesco MSCI Global Timber ETF, and it is flat in three months. It’s 4.6% from the September high.
WOOD is the iShares Global Timer & Forestry ETF. It is also flat in three months. The ETF is 7% from the September high.

Microsoft’s AI Copilot

CNBC TV’s Steve Kovach is tracking Microsoft’s AI Copilot product on Thursday, almost a year after its release.
Microsoft ended Wednesday’s trading at $424.60 a share. That is 9.3% from the July high. 
The stock is up about 13% so far in 2024.

Nvidia’s Jensen Huang in India

CNBC TV’s Seema Mody will watch and listen in on Nvidia CEO Jensen Huang’s trip to India, a growing tech hotspot.
Nvidia is 3.4% from the high hit Tuesday.
The stock is up about 15% so far in October and up 181% in 2024.

Palantir’s Alex Karp

The CEO of the defense tech company will be with CNBC TV’s Morgan Brennan and Jon Fortt in the 4 p.m. hour.
Palantir is up 14.5% in October.
The stock is down 4% from the Oct. 14 high.
Palantir has almost doubled in the last six months. It ended Wednesday’s session at $42.59, and shares are up 1% after hours. More