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Stock investors are paying attention to these 2 long-term climate forecasts

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To understand how necessary weather and climate risks are to the economy, watch investors. New research shows that two long-term seasonal weather forecasts particularly can impact the stock market in interesting ways.

We often consider forecasts as what the weather will probably be like in the approaching days, but… National Oceanic and Atmospheric Administration it also predicts weather conditions for several months. These seasonal climate projections tell us whether hurricane season will likely be lively no matter whether Winter it’s going to probably snow or be cold, and whether Boy Or Girl A climate pattern is probably going to emerge that would influence weather across the United States

I research the impact of weather on business activities as economist. In a brand new article entitled atmospheric scientist at NOAA and I analyzed the impact of long-term forecasts taking a look at changing stock option prices over 10 years and 1000’s of corporations.

We found that investors pay tens of millions of dollars to hedge the chance of NOAA’s seasonal forecasts. Their bets suggest that seasonal climate matters to the success of corporations across the economy, even in sectors that won’t seem particularly exposed to weather conditions.

Betting on seasonal forecasts in options markets

When you purchase shares, you are buying shares in the corporate. The value of these shares is tied to the corporate’s expected future profits.

When you purchase a stock optionyou pay for the precise to buy a selected stock at a selected price at a selected future date. Importantly, the choice is just a purchase order option, not a purchase order requirement. You pays a premium for this flexibility.

If the stock falls in value, you’ll be able to simply let the choice expire and all you’ll lose is the premium. However, if the stock price increases enough, you’ll be able to exercise the choice and buy the stock on the lower cost built into the choice. Another form of option, called “placement”.”, allows you to sell shares you already own in the same way.

The prices of these options tell us how uncertain investors are concerning the future economy.

Quotations on the New York Stock Exchange on April 24, 2024.
AP Photo/Mary Altaffer

Imagine that that NOAA will release its winter seasonal forecast in 10 days. You’re wondering whether to put money into a ski resort whose profits are directly tied to snowy winter skiing. You expect the forecast to affect the ski resort’s stock price, but you do not know which way it’s going to all go.

The more uncertain investors are concerning the future price of a stock, the greater they expect to gain from owning options: they get all of the potential benefit from large increases within the stock price and haven’t any risk of suffering a loss in the shape of a fall in stock prices. The greater their expected profits, the more they are willing to pay for the choice and option higher option price within the shop. Thus, knowledge of impending winter seasonality may induce an individual to pay more for a ski resort stock option and increase the worth of the choice out there.

Although they are now many predictions AND available data to provide clues about upcoming seasons, two predictions tend to move the market.

Winter and El Niño forecasts impact many businesses

We found that from 2010 to 2019, company option prices on US markets showed a downward trend after NOAA published its Winter prospectsin October and an important of his El Niño prospectsreleased in June.

In other words, before the reports got here out, investors were willing to pay a premium for options that hedged or protected against any news that was about to be released. Therefore, investors must imagine that seasonal climate matters to corporate profits and that forecasters can say something necessary concerning the climate in the approaching season.

We didn’t detect the same effect on option prices when or NOAA Or Colorado State University released their hurricane forecasts in May and April or when Farmers’ Almanac published its winter forecast in August. Traders appear to differentiate prospects based on their perceived quality and the importance of what they are able to predict in these reports, slightly than media attention.

Seasonal climate is vital not just for the outdoor industry. We found that June’s El Niño forecasts are impacting options in construction, transportation and utilities – all industries that could possibly be directly impacted by the weather. It also influences options for other sectors equivalent to manufacturing and education, possibly reflecting spillovers from other parts of the economy. NOAA’s winter forecast has similarly broad implications.

The only sector not clearly impacted by the June El Niño forecast is agriculture, which can simply reflect the incontrovertible fact that the strongest effects of El Niño and La Niña are on winter weather, when most agriculture is less affected.

Traders pay money to wait for the El Niño forecast

Trader interest within the June El Niño forecast is especially interesting because NOAA releases an El Niño forecast every month. In most months, the outlook isn’t much different from the previous month’s forecasts. But in June (*2*)when spring has already passedthe flexibility to accurately forecast future El Niño events suddenly increases.

We have found that salespeople value quality leaps.

The June forecast corresponds a $12 million bonus on average yearly, showing that investors are willing to put real money on the road to discover what NOAA will say in its June forecast before they determine to buy the stock. This is about 4 times greater than the common forecast for May.

Hedging traders show that having high-quality seasonal climate forecasts matters to investors, in addition to to the communities, businesses and emergency services that prepare based on these analyses for difficult seasons.

This also supports the argument that there’s value in investing in technology to improve these forecasts. And that shows the burden With keeping these views secret until they are officially published, just because the U.S. government closely guards necessary economic statistics before they are made public.

This article was originally published on : theconversation.com
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Business and Finance

Reginald Lewis’ daughter opens Beatrice Advisors

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Christina Lewis, Reginald Lewis, Beatrice Advisors, Reginald Lewis


Daughter of a superstar Black financier Reginald Lewis followed in his father’s footsteps opening Beatrice Advisors to assist families like hers.

Christina Lewis opened an organization publicly on June 13 in New York. It is the primary multifamily office of its kind to be owned by a Black woman. Meredith Bowen, former partner at Seven Bridges Advisors, will function president and chief investment officer. With a few of their assets coming from the family business BFO21 and Lewis’ personal network, the band is pushing to maneuver away from the established order of occupying a particular area of interest.

Lewis’ goal is to spotlight the importance of getting a tax-efficient portfolio for the following generation of heirs, entrepreneurs and multiracial families like hers. He also desires to set a regular for having a solid team of investment managers, lawyers and accountants that clients can trust and never feel obliged to do.

“The next generation may be very uninformed, just like me and my whole family were when my dad died,” she said, recalling her father, who died when she was 12.

“He had all the intellectual capital around investing and financial access, and of course he never expected to die at 50.”

Her father was the one black person on Forbes’ list of the 400 richest Americans after appearing on the list in 1991 – with a net price of $340 million and an estimated net price of $400 million – which increased in 1992 that very same 12 months he was diagnosed with a terminal brain tumor and died in January 1993, aged just 50.

His estate was left to his wife Loida Lewis and daughters Christina and Leslie. Now, greater than 30 years later, she lives by the three mantras her father left her: do your homework and follow it, make a plan and follow it, and be good at your job.

Beatrice, apparently named after the landmark Beatrice acquisition, which was curated by Christina’s father and have become the primary Black-owned billion-dollar company, offers clients single-family offices and an progressive and technology-driven approach that encourages clients to tailor their investments to suit their individual goals. The current offer includes three key services: investment management, financial planning advice for clients and own investments.

However, Lewis doesn’t stop there and plans to expand his business over time.

Former vp and financial advisor at Shufro, Rose & CoMichael Hymes will function managing director and head of client advisory on the chief team. Bowen spoke highly of Lewis’s leadership she said she was excited to be a part of a “new level of autonomy”.

“Meeting customers where they are now and where they will be tomorrow, while giving them a new level of autonomy, makes Beatrice’s offering an exciting one,” Bowen said.

“Christina has demonstrated an exceptional ability to drive meaningful change, and I am excited to work with her and the team to build a truly differentiated set of solutions for our clients.”

The latest investment firm owner also serves as vp of the Reginald F. Lewis Foundation and is an executive producer of the upcoming biopic about her father’s life, named after his autobiography, “Why Should White Guys Have Fun?”


This article was originally published on : www.blackenterprise.com
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Business and Finance

4 ways to protect your credit during the holidays

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Black-Owned Credit-Building App, Michael Broughton


The holiday season is sort of here. But before you finalize your plans, stop and be certain that you are not practicing behaviors that might jeopardize your credit.

Falling into vacation mode – and the charging frenzy that comes with it – is what gets lots of us into trouble. Here are 4 ways to keep your credit in great shape during the holidays:

Don’t apply for retail credit cards

Getting 10% off your purchase really is not value it in the long term. Opening a brand new account could mean problems for your credit rating, as the length of your credit history accounts for 15% of your FICO rating. The older your credit age, the higher, because it shows you’ve a protracted history of credit management. Opening a brand new credit card account will lower your overall credit age and, subsequently, your rating. Applying for a loan also signifies that an inquiry can be processed on your report. Inquiries make up 10% of your FICO rating.

Be careful when shopping online

If you might be purchasing gifts online, remember to only visit sites you might be conversant in or have done business with in the past. Don’t share your credit card number with anyone.

Don’t overload

Be careful how much you spend. If at the end of the month you might be unable to repay the amount charged, reconsider your purchases. Overcharging your card will end in a rise in the amount due. Amounts owed are 30% of your FICO rating.

Don’t forget to pay your bills

It could appear obvious, but when traveling and visiting relatives, it is easy to forget to pay the bills. Set reminders on your calendar or automatic bill payments so you do not miss a payment and get a negative mark on your credit report. Your payment history accounts for 35% of your FICO rating.


This article was originally published on : www.blackenterprise.com
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Business and Finance

4 square tips to avoid leaving money on the table

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As a newcomer to the Omega Psi Phi National Convention, Karla Spencer-George has learned lots from other vendors who’ve been in the industry for years. But when she pulled out her Square bank card reader, everyone was impressed by her ability to quickly process transactions using the device on her Android phone.

“I wish they would have used it instead of a traditional machining machine,” says Spencer-George, who worked as an electrical engineer at Lockheed Martin for 12 years before founding Liberation Clothing & Gifts, LLC in February 2010.

It sells merchandise promoting Black history and culture, including T-shirts, documentaries, books, calendars and paintings. Although the company’s business is primarily online, Spencer-George also sells its merchandise at Black Run events, comparable to national and regional Black sorority and sorority conventions, Black History Month fairs, science fairs, Juneteenth observances and natural hair symposia .

Spencer-George selected to use Square for events since it was faster and cheaper than a bank card processing machine. In any case, bank card payments can account for 35% to 65% of the products it sells. She learned that despite the fact that the Square device only cost $10, she could get it back once she arrange an account. It also helped that there have been no fixed monthly fees.

Additionally, Square allowed her to call regular customers without having to re-enter their email addresses or phone numbers to send them confirmations. She was also impressed by the plug-and-play features of Square’s software.

“Just connect the device to your phone or iPad and swipe,” says Spencer-George, who also studied computer science in college. “I also see the proven fact that transactions are paperless as a bonus for me and the environment.

Already an experienced seller, Spencer-George offers the following tips to make sure you don’t miss a sale:

Perform advanced on-site testing

“It’s necessary that my bank card payment processor runs easily. Whether your event is held at an out of doors trade show or in the underground, lower level of the exhibit hall, you will need to travel to the event venue and complete a test Square transaction prior to the event. If you might be unable to get to the event location upfront, please call your ISP to discuss coverage in that area. Additionally, if a spot offers secure Internet for industrial transactions, consider purchasing it.

Don’t stop at a single point of failure

To avoid falling victim to Murphy’s Law, use two mobile devices with Square software. This way, if one device dies, you’ll have one other one. I take advantage of each a Droid phone and an iPad. I take advantage of a wireless hotspot separate from my Droid phone for iPad. This will make your Droid phone take longer to charge. Finally, I’m bringing my laptop so I can use an old-fashioned merchant account if all else fails.

Charge all of your devices

Since you might not have access to electricity during the event, make certain to charge all of your devices the night before. Before each event, I charge my Droid phone, iPad, laptop, wireless hotspot, and portable wireless charger.

Use a stylus

Invest in a stylus for touchscreen devices. Let your customers sign transactions with a stylus as an alternative of their fingers. Using a stylus is more skilled and easier for purchasers to write.


This article was originally published on : www.blackenterprise.com
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