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      Carl Icahn, Activist Investor, Faces Intense Scrutiny From Wall Street

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      The value of the 88-year-old activist investor’s stake in his own company has fallen by nearly $20 billion. Mr. Icahn said that he was “absolutely not selling.”Chief executives of public companies have long feared Carl C. Icahn. The 88-year-old investor made a name and billions for himself by questioning the decisions and strategies of corporate leaders and agitating for change at companies like Apple, RJR Nabisco and Netflix.But now Mr. Icahn is under intense scrutiny from Wall Street investors, who are rapidly selling his company’s stock. In the past year and a half, shares of Icahn Enterprises, his publicly traded investment company, have dropped more than 75 percent, losing nearly $20 billion of value. After dropping more than 30 percent since mid-August alone, it now trades at about $11 a share, its lowest level in more than two decades.Mr. Icahn owns roughly 86 percent of the shares, so he has personally lost billions of dollars, too.“There’s a confidence game and he’s lost the confidence of investors,” said Don Bilson, who focuses on activist investing as the head of event-driven research at Gordon Haskett Research Advisors.Some Wall Street investors are now worried that the stock’s continuing fall could threaten the health of the entire company and that it could be forced to sell companies it holds. Icahn Enterprises holds a mix of public stocks, real estate and other investments, according to interviews with Mr. Bilson and several other market watchers.Investors have been questioning whether Mr. Icahn himself has been selling his stock. He has taken out personal loans using his stock as collateral. Banks that offer these loans typically have strict requirements related to the value of a company. A sharp drop in a stock price could force a lender to sell shares.

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      Icahn Enterprises share price
      Source: FactSetBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Investors Brace for Another Big Week in the Markets

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      A new batch of inflation data and earnings from major retailers will again put the spotlight on consumer confidence and economic growth.After a topsy-turvy week, investors brace for more volatility.Spencer Platt/Getty ImagesWhy markets are still worried A sense of calm has returned to global markets on Monday, but the economic conditions that triggered last week’s roller coaster swings are still on many minds ahead of a pivotal week.Here’s the latest:S&P 500 futures were up slightly after fears of a slowdown in growth and hiring rocked the benchmark index last week. Investors endured both a stomach-churning rout on Monday and a bounce-back rally on Thursday. Despite that, the S&P 500 ended the week down just 0.04 percent.Investors rushed back into tech stocks even as a “bubble” warning loomed about Nvidia, the chipmaker at the heart of the artificial intelligence boom.Stocks in Europe and Asia gained on Monday, as did the price of oil and crypto.The big event this week is Wednesday’s inflation data. Economists forecast that the Consumer Price Index will show a slight uptick. Yet Wall Street doesn’t think that will dissuade the Fed from cutting interest rates at its next meeting in September. That said, Michelle Bowman, a Fed governor, still sees inflation as “uncomfortably above the committee’s 2 percent goal.”With markets on edge, traders see a big potential swing in the S&P 500 after the report comes out.Interest rates are a concern for consumers, too. If the central bank doesn’t “start taking them down relatively soon, you could dispirit the American consumer,” Brian Moynihan, the C.E.O. of Bank of America, warned in a CBS News interview on Sunday.Markets are still on edge. Early last week, the VIX, Wall Street’s so-called fear gauge, spiked near to levels last reached during the early days of the Covid pandemic and the 2008 global financial crisis. Investors are anxious after tepid jobs and manufacturing data suggested a slowdown was on the horizon.The mountain of levered bets in the market probably added to the volatility. To cash in on a yearlong rally, more traders have borrowed funds to pay for new trades. One favorite: the so-called carry trade involving Japanese equities. But when the outlook soured last week, such trades began to unravel, triggering a stampede of investors selling even profitable positions to cover losses elsewhere.The underlying problems aren’t fixed, economists warn. Lower-income consumers have been pulling back on spending for months. That brings this week’s earnings calls into focus with Home Depot and Walmart set to report on Tuesday and Thursday. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Japan’s Nikkei Rises as Asian Stocks Rebound from Sell-Off

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      The Nikkei 225, the benchmark index in Japan, rose on Tuesday after a record decline.Investors in Asia reclaimed a measure of calm on Tuesday, after a day of frenzied selling around the world over concerns about a potential U.S. recession.In Japan, where the losses Monday were largest, stocks bounced higher. The Nikkei 225 index rose 11 percent after plunging 12.4 percent the day before. That was the benchmark index’s biggest one-day point decline, larger than the plummet during the Black Monday crash in October 1987.Stocks in South Korea, which were also down more than 10 percent at one point on Monday, regained about 4 percent.The jolt to stock markets started last week in Japan, where worries about the state of the U.S. economy were compounded by concerns about the effects a rapidly strengthening yen would have on corporate profits.On Friday, a report on American jobs showed a considerable slowdown in hiring, prompting a sell-off in U.S. markets. More widespread panic took hold on Monday over fears that the Federal Reserve may have waited too long to start cutting interest rates, threatening the strength of the U.S. economy. On Wall Street, the S&P 500 fell 3 percent, its sharpest daily decline since September 2022.The Fed is expected to start cutting rates, which are at a more-than-two-decade high, later this year.Conditions in Japan have been complicated by a policy shift in the opposite direction. The Bank of Japan last Wednesday increased its key rate to a quarter point. It was only the central bank’s second rate increase since 2007. After years in which policymakers kept interest rates low to try to boost prices and consumption, inflation has risen to levels at which they felt they could begin raising rates.The prospect of higher rates caused the yen to strengthen, a trend that could be good for Japan’s economy over the longer term but will be a drag on corporate profits, especially for big companies that rely on selling abroad. The currency’s rise spooked investors, some of whom feared a stronger yen would spell the end of a more-than-yearlong rally in Japanese stocks that had been driven by a weakened currency.A stronger yen also undercut some global investments made when the currency was cheaper, acting as a catalyst to wider selling across markets already nervous that stock prices had risen too high, too quickly. A popular trade among some investors involved borrowing in yen, and then investing it in markets like the U.S. But as the strength of the dollar this year began to ebb, profits from that trade also started to reverse course.The yen weakened on Tuesday, trading at around 145 to the dollar, compared with 141 the previous day.While the chain reaction of a strengthening Japanese currency and declining stocks seems to have calmed, analysts expect large market fluctuations to carry forward until there is more clarity about the direction of the economy in the United States.Joe Rennison More

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      When the Stock Market Drops, Stay Calm and Do Nothing

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      The markets are in turmoil, but you know what you’re supposed to do now, right? Let’s all take a deep breath, tie our hands behind our backs and say it together: We will not sell stocks in a panic. We will, in fact, do nothing at all right now.Many of the people who are trading today are professional investors of various sorts. Here’s a dirty little secret about, say, hedge funds: All of their trading in reaction to world events doesn’t lead most of them to do better than sticking their money in an index fund that tracks the stock market. Mutual fund managers don’t do much better.So there is no reason to think that you can predict what will happen in the markets in the next few hours or in the near future. It’s better not to try.Remember, much of the money you have in the stock market is probably for retirement anyhow. Chances are, you won’t need it for many years or even decades.But rational thinking often eludes us in moments like this. So here are a few things that may make you feel better.First, look at the performance of your investment portfolio over the last year or three or 10. Chances are, you’ve made a lot of money if you’ve invested regularly and then left things alone. Nice going! Try to think about those enormous gains and not any smaller paper losses from today’s drop.Second, consider the early days of the pandemic, when stocks fell by more than a quarter in the space of a month or so. Who would have thought that within a year, market gains would wipe out those losses and then some? But that’s what happened.Finally, and as ever, you are not the market. You are the sum of many large parts, including home equity and future salary, not to mention the immeasurably high returns that come from friends and family and playing outside and taking in art.Go fly a kite or wander among beautiful buildings and check in with the market again tomorrow. More

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      Berkshire’s Cash Stockpile Soars as It Cuts Its Stake in Apple

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      The conglomerate reported nearly $277 billion in cash in the second quarter. And while it sold about 390 million shares in Apple, it still owned about 400 million.Cash at Berkshire Hathaway, the conglomerate run by Warren E. Buffett, soared to nearly $277 billion in the second quarter as it sold a large chunk of its stake in Apple.Berkshire reported on Saturday that it had sold about 390 million Apple shares in the quarter, after selling 115 million shares from January to March, as Apple’s stock price rose 23 percent. It still owned about 400 million shares worth $84.2 billion as of June 30.The cash stake grew to $276.9 billion from $189 billion three months earlier largely because Berkshire sold $75.5 billion in stocks, including shares in Bank of America. The conglomerate said its stake in the bank was worth $41.1 billion as of June 30. It was the seventh straight quarter Berkshire sold more stocks than it bought.Second-quarter profit from Berkshire’s dozens of businesses rose 15 percent to $11.6 billion from $10.04 billion a year earlier. Nearly half of that profit came from Berkshire’s insurance businesses, which include Geico. The higher insurance earnings, it said, reflected increased revenue from premiums, rising investment income as well as the fact there were no significant catastrophic events.Berkshire’s net income fell 15 percent to $30.34 billion from $35.91 billion a year earlier, when it benefited from rising stock prices that boosted the value of its investments.Mr. Buffett has long urged shareholders to ignore Berkshire’s quarterly investment gains and losses, which often lead to outsize net profits or net losses.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Stocks Drop as Jobs Report Shakes Market

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      Stocks skidded on Friday, capping off a turbulent week for Wall Street, as investors were jolted by data showing that hiring slowed and unemployment rose in July.The spiking uncertainty about the economic outlook, and the question of whether the Federal Reserve has been too slow to raise interest rates, was evident across financial markets.The S&P 500 fell 2.4 percent within the hour after the jobs report was released, while the tech-heavy Nasdaq dropped 3 percent. Yields on government bonds, which are sensitive to expectations for the economy, dropped sharply, and oil prices were lower too.The U.S. economy added 114,000 jobs on a seasonally adjusted basis, much fewer than economists had expected and a significant drop from the average of 215,000 jobs added over the previous 12 months. The unemployment rate rose to 4.3 percent, the highest level since October 2021.“That all-important macro data we have been hammering for months is finally starting to turn in an ominous direction,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth.Markets are now predicting a half a percent cut in interest rates at the Fed’s next meeting in September, up from the quarter-point cut investors had been anticipating as of Thursday, according to CME FedWatch. The two-year Treasury yield, which is also reflective of short-term interest rate expectations, fell 20 basis points, to 3.96 percent.This week had already been a rocky one for Wall Street. The Federal Reserve’s indication on Wednesday that it was moving closer to cutting interest rates in September prompted an accelerated market rally, and the S&P 500 rose 2 percent on comments by Jerome H. Powell, the Fed chair.But the market sold off on Thursday, with the S&P 500 falling 1.4 percent, led lower by a drop in chip stocks and economic data suggesting the economy is cooling. The 10-year U.S. Treasury yield — which underpins many other borrowing costs — also dropped below 4 percent on Thursday.All this comes as investors started reconsidering their appetite for big technology stocks last month and bought up shares of smaller companies, which are particularly sensitive to borrowing costs and stand to benefit from interest rate cuts. Also driving this shift is a rethink among investors about the potential for artificial intelligence to continue to drive gains at big companies like Microsoft, Nvidia and Alphabet, after shares of those businesses surged in the past year. More

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      Why You Should Be Taking a Hard Look at Your Investments Right Now

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      After big gains in stocks and mediocre returns for bonds, investors are taking on undue risk if they don’t rebalance their holdings, our columnist says.All eyes were on the Federal Reserve this past week, or so several market analysts solemnly said. This was true even though the Fed essentially did nothing in its latest meeting but hold interest rates high to fight inflation, just as it has done for many months.To be fair, there was a little news: The Fed did appear to affirm the likelihood of rate cuts starting in September, and that’s important. But so are the big performance shifts in the market, away from highflying tech stocks like Nvidia and toward a broad range of less-heralded, smaller-company stocks. In fact, there’s a great deal to think about once you start focusing on the behavior of the markets and the health of the economy in an election year.But what is perhaps the most important issue for investors rarely gets attention.In a word, it is rebalancing.I’m not talking about a yoga pose, but rather about another discipline entirely: the need to periodically tweak your portfolio to make sure you’re maintaining an appropriate mix of stocks and bonds, also known as asset allocation. If you haven’t considered this for a while — and if nobody has been doing it for you — it’s important to pay attention now because without rebalancing, there’s a good chance you are taking on risks that you may not want to bear.The rise in the stock market over the last couple of years, and the mediocre performance of bonds, has twisted many investment plans and left portfolios seriously out of whack. I found, for example, that if you had 60 percent of your investments in a diversified U.S. stock index fund and 40 percent in a broad investment-grade bond fund five years ago, almost 75 percent of your investments would now be in stock. That could make you more vulnerable than you realize the next time the stock market has a big fall.Asset AllocationThe Securities and Exchange Commission defines asset allocation as “dividing an investment portfolio among different asset categories, such as stocks, bonds and cash.” It’s an important subject, but it’s not as straightforward as that description seems.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More