(KRON) — In today’s installment of Winners & Losers, financial expert Rob Black discusses the rise in stocks, a fall in home sales and the surge in Mega Millions.
Winner: Stocks rise as investors await key Fed decision
Equities climbed, boosted by strong gains from Google-parent Alphabet and Microsoft as traders awaited the Federal Reserve’s latest interest rate decision, scheduled for later in the day.
Alphabet shares rose 5% after strong revenue from Google’s search business.
Microsoft posted earnings and revenue below analyst estimates but reported a 40% jump in revenue growth for Azure and cloud services. Shares popped 5%.
Meta’s earnings will come today and may see fallout due to TikTok.
McDonald’s has raised the price of a cheeseburger in the UK for the first time in 14 years. The cost of a cheeseburger has increased from 99 pence ($1.19) to £1.19, marking a 20% price increase. Other items on McDonald’s U.K. food menu have increased in price by 10p to 20p, including its McNugget share boxes, breakfast meals and meal upgrades.
Telehealth expansion for Medicare enrollees will be extended until the end of 2024. During the first year of the pandemic, more than 28 million Medicare beneficiaries used telehealth services,
Loser: Pending home sales fell 20% in June
When will be the best time to put a bid on a home?
Signed contracts to purchase existing homes dropped 20% in June compared with the same month a year ago.
On a monthly basis, pending home sales fell a wider-than-expected 8.6% in June. That is a quick and sharp drop.
The drop in sales was hardest here in the West, seeing a 19.2% drop.
The average on the 30-year fixed loan crossed over 6% in the middle of June. It started the year around 3%.
High rates and inflation in the general economy are hitting buyer sentiment hard.
There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pending contracts should also begin to stabilize.
Total sales for this year will be down 13%, but sales should start to rise in early 2023.
Looking ahead, there will be a moderation in the pace of mortgage rate gains as investors shift allocations toward the safety of bonds. Combined with the increase in housing supply, we could see improved opportunities for homebuyers later in the year.
Loser: Uncle Sam wins as Mega Millions has surged to over $1 billion
The Mega Millions jackpot just won’t quit.
It marks the fourth time a lottery jackpot has crossed the $1 billion mark.
While the chance of a single ticket hitting the motherlode is roughly 1 in 302.5 million, there’s always a guaranteed winner: Uncle Sam.
The windfall can be taken as an annuity of 30 payments over 29 years or as an immediate, reduced cash lump sum.
For this $1.02 billion jackpot, the cash option is $602.5 million.
A mandatory 24% federal tax withholding on that amount would reduce your winnings by $144.6 million.
Another 13%, or $78.3 million, would be due to the IRS. That’s $222.9 million in all.
That would reduce the windfall to $379.6 million.
State taxes would be about 10% in California.
Total winnings would be $330 million on over 1 billion.
That’s 67% less than a billion even before you hire an attorney, financial advisor and tax advisor.
Powerball jackpot is a pitiful $145 million tonight.