In S&P 500 companies, may be, added for money. In the US people get fired not because, that the economy is bad, and therefore, that it grows and changes. TuSimple is close to world domination.
Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
How companies pay to get into S&P 500
Recently, an article “Is Stock Index Membership for Sale” was published in the West?», dedicated to probability analysis, that companies pay the rating agency S&P (NYSE: SPGI) for inclusion in index S&P 500.
The authors of the article suggested, that the issuer's chances of getting into this index are greatly increased in case, if the issuer pays S&P for assessing the credit rating of their bonds or actively using other paid services S&P.
Strictly speaking, directly S&P is not accused of anything in the article - it just says, that companies are heavily buying from S&P credit ratings in hopes, that it will increase their chances of being indexed. Interestingly: companies, presumably included in the index in this way, then show not very good growth of financial indicators.
The benefit of companies from getting into the index is obvious: The rise of index investing has led to, that index funds began to play a huge role in the market, infusions of which can seriously pump up the capitalization of individual companies. The appearance of a new company in the index automatically leads to an inflow of money into its shares.
Benefit S&P is also understandable: they buy credit ratings from her, maintaining the stability of this part of the company's business.
Representatives S&P, of course, all vehemently deny. However, Considering, that even judges and regulators in the US risk being fired and sued, for not very big money considering the cases of issuers, whose shareholders include, won't be much of a surprise, if the conclusions of the authors of the article turn out to be true.
All this once again reminds us of the problem of "who will evaluate the evaluator".
For example, Many fund managers rely on MSCI indices, but the quality of these ratings is not perfect. The company fell for it, that included Chinese companies in its indices: her business in China was under pressure from the Chinese government.
Actually, we discussed the problem of honesty of rating agencies in the investment idea on S&P Global: companies pay rating agencies to rate their bonds, which creates a serious conflict of interest. If the rating agency does not give ratings that suit the customer, then customers will go to their competitors, who will put the "correct" ratings.
Maybe, the discussion around the article about the index will attract the attention of regulators, but the topic of bond ratings has long been on the surface, and no action has been taken so far.. All this led to the emergence of a mountain of credit obligations from companies., That, maybe, can't close them.
All, who loves index investments, worth thinking about, who forms these indices and for what purposes. It will be interesting, if the scandal surrounding the conclusions of this article develops, and then the funds, S-oriented&P 500, will be forced to react somehow.
Vaccines and warehouses: how the American labor market is changing
Challenger Company, Gray & Christmas, providing professional services in the field of management and personnel training, shared her analysis of the US labor market. Here's what's interesting.
Downsizing plans. In October 2021, American employers announced plans to cut the number of jobs by 22 822 thousands - what's on 27,5% more, than in September. About 22% of the total number of laid-off employees were, refusing to vaccinate against coronavirus. The remaining layoffs are related to business restructuring and optimization or bankruptcies..
At this point, the most interesting is the significant percentage of dismissals of workers due to vaccinations.. This topic will remain very hot for the next few months., because of which the cost of labor for most companies is at risk of rising even more, which will have an extremely negative impact on their reporting.
At the same time it is visible, that sufficiently large layoffs occur without negative economic news - it’s just that the corporate sector for the most part successfully manages without an excess of labor and increases returns, reducing costs, among other things, and for employees. In this context, ideas by company, dealing with work automation, acquire additional attractiveness.
Seasonal workers. Retail, transport and logistics companies plan to hire over 849 thousand seasonal workers for the November-December holidays - which is 11% more, than for the same period 2020. All of this in general correlates well with forecasts for the growth of holiday spending in the retail sector.. Therefore, you can try to make money on companies, related to logistics: warehouses and related services, - as well as the supply of equipment in this area.
Not too dimple: trucker robots take over the roads
From self-driving truck software maker TuSimple (NASDAQ: TSP) another success: the company is preparing to launch commercial flights for UPS in North Carolina and Florida. Considering, that TuSimple is still mainly working on R&D and has little pure business activity, this is a significant success, which brings the company closer to the mass adoption of its technology by carriers.
All this is happening against the backdrop of the worst shortage of truck drivers in the United States.: the country needs to get 80 thousand new truckers from somewhere. However, and on the other side of the ocean the same problems: like in UK, as well as in continental Europe. So mass automation of cargo transportation - to be!
By the way, the idea for TuSimple worked - at this pace it will be possible to make another one.
