Report pinpoints income ranges to qualify as middle class

Nasdaq climbs to record;

Nvidia results eagerly anticipated

The Nasdaq closed at a record high on Monday while the S&P 500 gained slightly as technology stocks advanced ahead of Nvidia’s highly anticipated earnings and investors gauged the timing of an interest rate cut by the Federal Reserve.

The S&P 500 technology index led gains among the 11 major S&P sectors, rising 1.32%, helped by chipmakers such as Nvidia, which advanced 2.49% ahead of its quarterly results on Wednesday.

Investors will look for evidence in Nvidia’s earnings that the AI chip leader can maintain its explosive growth and stay ahead of rivals.

At least three brokerages lifted their Nvidia price targets.

A solid earnings season and signs inflation may be starting to cool again have reignited hopes for Fed rate cuts this year, pushing major averages to record levels. The blue-chip Dow closed above 40,000 points for the first time last week.

The Dow Jones Industrial Average fell 196.82 points, or 0.49%, to 39,806.77. The S&P 500 gained 4.86 points, or 0.09%, to 5,308.13; and the Nasdaq Composite rose 108.91 points, or 0.65%, to 16,794.87.

Norwegian Cruise again raises forecast due to robust demand

Norwegian Cruise Line Holdings on Monday raised its full-year profit forecast for a second time in less than three weeks, betting on record demand for cruise vacations and higher ticket prices.

Expectations have been high for the Miami-based Norwegian after strong booking trends drove up results and shares last year, and rival Royal Caribbean Group raised its profit target for a second time last month.

The cruise operator now expects an adjusted profit of $1.42 per share, compared to its previous forecast of $1.32.

Approximately 34.7 million passengers are expected to take cruise vacations this year – around 17% more than the 29.7 million passengers who sailed in 2019, according to a report from the Cruise Line Industry Association.

Last month, Norwegian ordered eight new ships across its three brands to cater to the rising demand.

The company expects to earn an adjusted profit of $2.45 per share, representing a two-year compound annual growth rate from 2024 to 2026 of over 30%.

It also expects to generate total revenue of about $9 billion this year, up from about $8.55 billion in 2023.

UnitedHealth unit to launch new drug pricing model

UnitedHealth said Monday its unit OptumRx would offer a new pricing model, starting next year, to help manage insurers’ costs for drugs. The new model, Optum Rx Clear Trend Guarantee, will provide value-based pricing of drugs per member combining the cost of these medicines from various sources such as retail pharmacy, home delivery, specialty drug and rebates.

Under value-based pricing models, insurers, pharmaceutical companies and the middlemen, which include pharmacy benefit managers (PBMs) like OptumRx, agree to link payment for medicine to the overall outcome for patients.

The new model adds to OptumRx’s announcements of other measures to offer transparent pricing of drugs last year and comes amid increased scrutiny into the role of PBMs in ballooning health care costs in the United States.

Currently, out-of-pocket drug prices are decided by a complex, multi-tiered network including insurers, drugmakers, pharmacies and PBMs, resulting in ambiguity around fees and markups to the original cost of the drug.

PBMs handle prescription drug benefits for health insurance companies, large employers and Medicare prescription drug plans – a group often referred to as payers.

OptumRx’s new model will take effect at the same time as TrueCost, which was announced by CVS’ PBM unit, Caremark, to offer clients more visibility into prescription drug pricing.

Kroger CEO’s pay dropped 18% in 2023 as grocery sales slowed

Kroger CEO Rodney McMullen’s pay dropped 18% in 2023 to $15.5 million, according to a corporate filing Wednesday morning with the U.S. Securities and Exchange Commission.

The head of the nation’s largest supermarket retailer was paid $19 million in the previous year, according to The Associated Press’ methodology for executive compensation that excludes pension value changes.

The typical worker got nearly a $2,700 pay raise, climbing 9% in 2023 to $31,302. The ratio of McMullen’s pay to the median Kroger worker – as required to be reported by the government – was 502 to 1, narrowing from the previous ratio of 671 to 1 in the previous year.

Kroger earned a $2.2 billion profit on sales of $150 billion last year. The modest sales growth occurred as consumers continue to grapple with the cumulative effects of high inflation for food and other items. In recent years, the cost of food purchased at supermarkets and supercenters rose nearly 25% – the worst food inflation seen in America since the early 1980s, according to the U.S. Bureau of Labor Statistics.

Jabil replaces CEO after investigation, pulls 2025 forecast

Jabil CEO Kenneth Wilson will leave immediately, the company said Monday, following the completion of a previously disclosed investigation related to “corporate policies,” and will be succeeded by finance chief Michael Dastoor.

The Florida-based electronic components maker, whose customers include Apple, also withdrew its fiscal 2025 forecast, citing the surprise CEO transition.

Dastoor, who has worked at Jabil for 24 years, was named interim CEO on April 18 while Wilson was on paid leave pending completion of the investigation.

Jabil reiterated the investigation does not relate to, and does not impact, the company’s financial statements or financial reporting.

Meme stocks rally caused hedge funds mild pain, banks say

A rally in meme stocks in early May has caused hedge funds betting against companies like videogame retailer GameStop and cinema chain AMC very mild pain, forcing them to unwind some bearish positions, JPMorgan & Chase and Goldman Sachs said in notes.

Earlier this month, meme stocks soared following a series of posts from Keith Gill’s X account “Roaring Kitty,” whose bullish calls on GameStop were a reason for a meme-stocks frenzy in 2021.

Hedge funds have been both closing their short trades and adding longs in meme stocks, JPMorgan said in a note, adding now hedge funds’ positioning is near 18-month highs.

The bank said it does not believe the dynamic will turn into something similar to January 2021, when a meme stock rally caused severe pain in hedge funds shorting the shares, including causing the closure of Melvin Capital.

Still, JPMorgan cautioned that the short covering continues.

Income ranges for the middle class have seen significant changes over the years. And the income class your household falls into is largely determined by where you live and how much you make.

So what salary qualifies as middle class?

A new report from GOBankingRates pulled data from the U.S. Census Bureau to find what pay grade is considered middle class for all 50 states. Middle class income is defined as households with a salary that is two-thirds to double the U.S. median household income.

According to the latest data from the U.S. Census Bureau, the average median household income in 2022 was $73,914, which would put the national range for middle class income between $49,271 and $147,828.

Below are the top 10 states with income ranges that qualify as middle class:

1. Maryland income range: $65,641 to $196,922

2. New Jersey income range: $64,751 to $194,252

3. Massachusetts

$64,337 to $193,010

4. Hawaii income range: $63,209 to $189,628

5. California to $183,810

6. New Hampshire

$60,563 to $181,690

7. Washington

$60,217 to $180,650

8. Connecticut

$60,142 to $180,426

9. Colorado income range: $58,399 to $175,196

10. Virginia income range: $58,166 to $174,498

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