Category Archives: Market News

CAVU Resources Inc. (CAVR: Pink Limited) | Attorney Letter with Respect to Current Information

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Article source: http://www.otcmarkets.com/financialReportViewer?symbol=CAVR&id=211498

Valentine’s Day gift guide: Gorgeous fragrances she will love

Whether you’re shopping for your girlfriend, your wife, or your best friend (hello, Galentine’s Day!) — you can’t go wrong with a new fragrance for Valentine’s Day. 

Some women find one scent they love and choose to wear it forever, while others like to mix it up. But even if she’s someone who is madly in love with one fragrance, odds are the brand will release a new iteration of the scent — a lighter version for summer, a twist on the original for winter, and she might just love them all. 

Plus, these gorgeous perfume bottles make for some amazing vanity decor. 

So go on, take a look below for some of the most delicious scents on the market right now. There are new releases and classics that never go out of style, and you’re guaranteed to find something you (and she!) will love. 

Michael Kors Sparkling Blush, $115

Available at Macy’s



BUY IT

Jo Malone London Wood Sage Sea Salt Cologne, $68.00-$136.00

Available at Nordstrom



BUY IT

Burberry Her Eau de Parfum, $94.00-$121.00

Available at Nordstrom



BUY IT

Miss Dior Blooming Bouquet Eau De Toilette Spray, $80.00

Available at Macy’s



BUY IT

Chanel Chance Eau De Parfum Spray, $105.00-$135.00

Available at Nordstrom



BUY IT

Miu Miu Twist Eau de Parfum, $125.00

Available at Sephora



BUY IT

Jimmy Choo Floral Eau de Toilette, $105.00

Available at Macy’s



BUY IT

Chanel Coco Mademoiselle Eau De Parfum Spray, $105.00-$215.00

Available at Nordstrom



BUY IT

Tory Burch Love Relentlessly Fou de Toi, $120.00

Available at Sephora



BUY IT

Victoria’s Secret Bombshell Wild Flower Eau de Parfum, $55.00

Available at Victoria’s Secret



BUY IT

CLEAN RESERVE Avant Garden Saguaro Blossom Sand Eau de Parfum, $150

Available at Nordstrom



BUY IT

Demeter Between The Sheets, $40

Available at demeterfragrance.com



BUY IT

KATE SPADE NEW YORK In Full Bloom Eau de Parfum, $78.00

Available at Ulta



BUY IT

Carven Dans Ma Bulle Eau de Parfum, $120

Available at Bloomingdales



BUY IT

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Article source: https://www.aol.com/article/lifestyle/2019/02/06/valentines-day-gift-guide-gorgeous-fragrances-she-will-love/23662526/

‘Pathetic and telling’: Meghan McCain responds after Trump reportedly taunted John McCain after his death

  • President Donald Trump reportedly reignited his feud with the late Republican Sen. John McCain of Arizona.
  • During a private luncheon with TV news anchors, Trump reportedly mentioned McCain’s infamous vote against the “skinny” plan to repeal parts of the Affordable Care Act.
  • “By the way … he wrote a book and the book bombed,” Trump also said of McCain.
  • The late senator’s daughter, Meghan, called Trump’s reported remarks “pathetic.”

President Donald Trump reignited his feud with the late Republican Sen. John McCain of Arizona, according to a New York Times report published on Tuesday.

During a private luncheon with TV news anchors, Trump reportedly mentioned McCain’s infamous vote against the “skinny” plan to repeal parts of the Affordable Care Act. In 2017, McCain made waves after he joined the 49-51 vote against repealing portions of the ACA with his decisive thumbs-down vote.

And Trump took another jab at the now-deceased senator and Vietnam veteran: “By the way … he wrote a book and the book bombed.”

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McCain died on August 25, 2018 after a long battle with brain cancer. Trump was not invited to his funeral.

McCain wrote numerous memoirs spanning his storied career in the US Navy and as a longtime Arizona senator. In his last memoir published in May 2018, the senator warned of “spurious nationalism” and criticizes Trump for downplaying the threat Russia poses to Western democracies, as noted by the US intelligence community.

“I’m not sure what to make of President Trump’s convictions,” Sen. McCain wrote in “The Restless Wave.”

“The appearance of toughness or a reality show facsimile of toughness seems to matter more than any of our values.”

Trump’s feud with McCain was on full display during the first half of his presidency and the 2016 US presidential campaign, but Trump’s insults toward McCain stretch back for decades. During a CBS interview with anchor Dan Rather in 1999, Trump downplayed McCain’s military service.

“Does being captured make you a hero,” Trump said in the interview, referring to McCain’s time as a prisoner-of-war during the Vietnam War. He revived those remarks in 2015.

WASHINGTON, DC – AUGUST 31: Meghan McCain, daughter of Sen. John McCain, touches the casket during the ceremony honoring the late US Senator inside the Rotunda of the U.S. Capitol, August 31, 2018 in Washington, DC. A Democrat who voted for Hillary Clinton, Farone said McCain did what was right. ‘He never took the easy way out, he knew actions speak louder than words and he never tweeted about it. He just got it done,’ she said. The late senator died August 25 at the age of 81 after a long battle with brain cancer. He will lie in state at the U.S. Capitol Friday, a rare honor bestowed on only 31 people in the past 166 years. Sen. McCain will be buried at his final resting place at the U.S. Naval Academy on Sunday. (Photo by Drew Angerer/Getty Images)

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McCain’s daughter, Meghan, called Trump’s remarks published by The Times on Tuesday “pathetic.”

“The president’s obsession with my father 6 months after his death is pathetic and telling,” Meghan said on Twitter.

“Even at a time when he should be focusing on his message to the American public and the state of our union – the greatness of my father’s life and legacy haunts you.”

Article source: https://www.aol.com/article/news/2019/02/06/pathetic-and-telling-meghan-mccain-responds-after-trump-reportedly-taunted-john-mccain-after-his-death/23662793/

The most outrageous GRAMMYs looks of all time

All sensible style rules are thrown out the window for the GRAMMYs.

Stars have rocked some jaw-dropping styles through the years — and you better believe celebs will top those outrageous looks at the big show this year.

Fergie has repeatedly made heads turn on several occasions, including in 2012 when she stepped out in an orange Roberto Cavalli lace number. The bright hue of the gown is very similar to the color of a prison uniform.

Lady Gaga in 2017

(Photo by Jon Kopaloff/FilmMagic)

Kim Kardashian in 2011

(Photo by Frank Trapper/Corbis via Getty Images)

Nicki Minaj in 2011

(Photo by Jason Merritt/Getty Images)

Jennifer Lopez in 2000

(Photo by S. Granitz/WireImage)

Christina Aguilera in 2001

(Photo by SGranitz/WireImage)

Rihanna in 2011

(Photo by Frank Trapper/Corbis via Getty Images)

Cyndi Lauper in 1984

(Photo by Barry King/WireImage)

Madonna in 1999

(Photo by Kevin Mazur Archive 1/WireImage)

Toni Braxton in 2001

(Photo by Vinnie Zuffante/Getty Images)

Lil Kim in 2002

(Photo by Jeff Kravitz/FilmMagic, Inc)

Avril Lavigne in 2003

(Photo by Jeff Kravitz/FilmMagic, Inc)

Pink in 2003

(Photo by SGranitz/WireImage)

Lil’ Kim in 2004

(Photo by Jeffrey Mayer/WireImage for NARAS)

Fergie in 2012

(Photo by Frank Trapper/Corbis via Getty Images)

Halsey in 2017

(Photo by Steve Granitz/WireImage)

Mary J. Blige in 2004

(Photo by Gregg DeGuire/WireImage for NARAS)

Margaret Cho in 2004

(Photo by Kevin Winter/Getty Images)

Fergie in 2004

(Photo by SGranitz/WireImage for NARAS)

Kim Kardashian in 2015

(Photo by Jon Kopaloff/FilmMagic)

Fergie in 2005

(Photo by Jon Kopaloff/FilmMagic)

Gwen Stefani in 2006

(Photo by Jeff Kravitz/FilmMagic, Inc)

Imogen Heap in 2007

(Photo by Frank Trapper/Corbis via Getty Images)

Rihanna in 2015

(Photo by Jon Kopaloff/FilmMagic)

Cher in 2008

(Photo by Jeff Kravitz/FilmMagic)

Gwyneth Paltrow in 2009

(Photo by Kevin Mauzr/WireImage)

Lady GaGa in 2010

(Photo by Frank Trapper/Corbis via Getty Images)

Nicki Minaj in 2012

(Photo by Frank Trapper/Corbis via Getty Images)

Miley Cyrus on 2015

(Photo by Jon Kopaloff/FilmMagic)

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Of course, there was Jennifer Lopez’s iconic green Versace gown from the 2000 GRAMMYs, which may be the show’s most memorable look of all time.

Lady Gaga and Nicki Minaj, two stars who have a flair for the dramatic, have donned bizarre outfits over the years to the point that it’s not even surprising anymore. In 2012, Minaj showed up with a strange accessory — an old man dressed up as a pope. Gaga wore an uncomfortable-looking gown in 2010 that had many wondering: How did she manage to sit in that?!

Check out all the other outrageous GRAMMYs looks through the years in the gallery above, and see all of the looks from last year’s show in the gallery below:

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Article source: https://www.aol.com/article/entertainment/2019/02/06/the-most-outrageous-grammys-looks-of-all-time/21706616/

President Trump says former trade policies were ‘historic blunders’

President Donald Trump delivered his second State of the Union Address on Tuesday, February 5. 

The president’s long-awaited speech touched on highly-contentious topics including his call for a wall on the U.S.-Mexico border, the upcoming 2020 presidential election, tax reform, U.S.-China trade relations and prescription drug prices. Millions are expected to watch the full address, but for investors in particular, Trump’s stance on these crucial policies have the potential to drastically influence the stock market.

READ MORE: Here are 7 ridiculous things Trump could’ve purchased with the $38M he paid in taxes

According to MarketWatch, stocks closed higher on Tuesday with the SP extending its winning streak as investors awaited Trump’s address. Analysts at Yahoo Finance, however, predict some of Trump’s points may be “market moving.”

Nearly 50 minutes into the address, Trump touched on the ‘”travesty” that is the U.S-China trade war. “To build on our incredible economic success, one priority is paramount: Reversing decades of calamitous trade policies — so bad — we are now making it clear to China that after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end,” said Trump. According to Trump, the imposed tariffs on Chinese goods has brought “millions and billions of dollars” into America. 

The president also accredited NAFTA as a “historic trade blunder.” He went on to say, “the U.S.-Mexico-Canada agreement, the USMCA, will replace NAFTA and deliver for American workers like they haven’t had delivered to for a long time.” 

“I know that Congress is eager to pass an infrastructure bill, and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting-edge industries of the future. This is not an option, this is a necessity,” he pleaded. 

It is unclear whether Trump’s remarks will impact stocks.  

Following Trump’s speech, Stacey Abrams will make history as the fist black woman to give the official response to the State of the Union address. 

Watch President Trump’s State of the Union address here

Top 5 Reasons to File Your Taxes Early

Every April, many taxpayers wait until the last minute to file their federal income tax returns. Despite this tendency, there are many reasons to file your taxes early. If you will receive a refund, you may want to submit your return as quickly as possible. Additionally, there are benefits to filing early for those taxpayers who have a balance due.

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Brought to you by TurboTax.com

How Does Your Charitable Giving Measure Up?

Giving is truly better than receiving, especially when your generosity can provide income tax benefits.

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Brought to you by TurboTax.com

What is IRS Form 8615: Tax for Certain Children Who Have Unearned Income

Typically, children are placed in a lower tax bracket than their parents and the reason for this is quite simple: most children don’t have that much income, and those that do, rarely earn more than their parents. Some parents have attempted to take advantage of this by putting investments in their children’s names, hoping that any investment profits would be taxed at the child’s lower rate. In response, the federal government changed the tax treatment of children’s unearned income by taxing it at the parent’s tax rate. Form 8615 is used to make the child’s tax calculations for this income.

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Claiming a Domestic Partner as a Dependent

Most people claimed as dependents on tax returns are children or other relatives. But what you may not know is that under certain circumstances you can also claim someone as a dependent even if you’re not related, as is the case with a domestic partner.

Read More

Brought to you by TurboTax.com

Article source: https://www.aol.com/article/finance/2019/02/05/president-trump-says-former-trade-policies-were-historic-blunders/23662432/

Valentine’s Day dessert recipes to impress your beau

Receiving a bouquet of flowers is nice and all, but have you ever had a bite of warm chocolate lava cake? Yeah, we know which one you’d pick. 

Valentine’s Day Brownie Bites by Fab Everyday

Get the recipe here

Red Velvet Cupcakes by Philadelphia Cream Cheese

Get the recipe here

Chocolate Raspberry Espresso Pudding Cake by Country Cleaver   

Get the recipe here

Cupid’s Cakes (Strawberry Nutella) by Sally’s Baking Addiction

Get the recipe here

Red Velvet No-Bake Cheesecake by Jelly Toast | Emily Caruso

Get the recipe here

Heart Shaped Chocolate Whoopie Pies by Donuts, Dresses And Dirt | Sheri Silver

Get the recipe here

Red Velvet Pound Cake with Cream Cheese Frosting by Love and Confections

Get the recipe here

Orange, Almond and Dark Chocolate Crinkle Cookies by Cooking and Beer | Justine Sulia

Get the recipe here.

Sweetheart Jelly Donut Muffins by The Kitchen Prep | Dianna Muscari

Get the recipe here

Cabernet-Cherry-Chocolate Almost Healthy No-Bake Cookies by Justin Warner

Get the recipe here

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Give your significant other, best friend, parent, sibling or anyone else in your life deserving of your love something they can really enjoy — a tasty, decadent dessert. 

These Valentine’s Day dessert recipes work great as gifts or even as a romantic after-dinner treat. From classic red velvet cupcakes to brownies to jelly donuts, check out all our favorite and most romantic recipes above. 

Spice up your night with these special Valentine’s Day cocktails below!

Strawberry Kiwi Cocktail

Ingredients:

Preparation:

  1. Pour over ice with fresh, frozen strawberries and kiwis for the ultimate, refreshing low-sugar cocktail

Match Made in Haven

Ingredients:

  • 2 parts RumHaven 
  • 2 parts Pineapple Juice
  • 2 parts Ruby Red Grapefruit Juice

Preparation

1. Add all ingredients into an ice-filled Collins glass, stir to combine and chill. 

2. Garnish with pineapple or grapefruit.

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Article source: https://www.aol.com/article/lifestyle/2019/02/05/valentines-day-dessert-recipes-to-impress-your-beau/23662461/

Trump immigrant crime hotline still faces hurdles, pushback

WASHINGTON (AP) — President Donald Trump picked the grandest stage to unveil one of his first immigration initiatives: Appearing before a joint session of Congress a month after taking office, Trump announced the creation of a hotline to help victims of crimes committed by immigrants.

Almost immediately, the Victims of Immigration Crime Engagement hotline was immersed in controversy and confusion.

Trump’s critics saw the hotline, known as VOICE, as a cynical stunt that played to his political base, wasting millions of taxpayer dollars and perpetuating the false notion that immigrants are more likely to commit crimes than U.S. citizens. Others wrongly saw it as a hotline for reporting neighbors, colleagues or strangers they suspect are in the United States illegally.

Two years later, the hotline continues on. Its hurdle is to go beyond the political powder keg of the immigration debate and help crime victims in ways that local courts can’t, such as providing details about whether their assailants have been deported.

“I would stress no matter what opinion someone has, the fact remains that we are here to help victims,” the head of the endeavor, Barbara Gonzalez, told The Associated Press. Gonzalez is a longtime civil servant with the U.S. Immigration and Customs Enforcement, or ICE.

Though ICE is responsible for arresting and deporting people in the U.S. illegally, Gonzalez stresses that her hotline isn’t involved in that. It strives to help victims regardless of their immigration status. Callers aren’t asked their status when they call.

Still, callers are warned that they are being recorded and their names, addresses, phone numbers and other information are collected and may be shared within the Department of Homeland Security. Crime victims who are in the country illegally may be reticent to share that information.

Gonzalez said information on victims is shared with other components on a “need-to-know” basis and their privacy is a concern, but didn’t get into specifics on what was shared. It’s also not clear how long data is stored.

She said before the hotline was created, crime victims couldn’t get information about a suspect’s immigration status. State and local officials can provide details of convictions and sentences, but don’t know whether a suspect could be deported. They don’t have access to ICE data.

That doesn’t sway immigration advocates.

“I think the whole premise of it is racist,” said Angelica Salas, executive director of the Coalition for Humane Immigrant Rights. “It uses their pain and suffering and their legitimate tragedy for a very political goal, which is to create the support for President Trump’s anti-immigrant agenda.”

While victims of crime should be provided with support and services, the hotline has helped to fuel “the whole sense of fear thy immigrant neighbor,” Salas said.

Douglas Rivlin, a spokesman for the immigrant advocacy group America’s Voice, said the hotline was set up because Trump “wanted to be able to say he was addressing the fictitious immigrant crime-wave he has conjured from his anti-immigrant fever dreams.”

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The hotline got off to a rocky start. Personal data of callers was accidentally briefly released through a Freedom of Information Request by news outlets. In the first months, most of the calls were obvious hoaxes after someone suggested on Twitter that people call in to report space aliens.

One log entry says a caller reported “an alien who is outside his house and has green skin color.”

Other callers decried what they viewed as racist immigration policies by the Trump administration.

The most recent public report includes data from the hotline’s April 26, 2017, launch until Sept. 30, 2017, when there were 4,602 calls. Initially, most of the calls — 2,150 out of 3,351 — were unrelated, generally pranks. Toward the end of the period, call volume dropped and most of the calls were reporting crimes.

Gonzalez’s staff of 27 are stationed around the country and are part of ICE’s community engagement office with a budget of $3.9 million. Hotline calls are taken by operators and routed to the case agents. Callers are greeted with a recording saying the hotline’s main purpose is to provide information for victims. Because of privacy laws, they may not be able to help everyone, but they will try, she said.

“We are not a tip line,” Gonzalez said.

One caller, a mother of a 20-year-old college student who was raped, said she felt concerned about the hardline politics before she reached out to the hotline.

“When you’re a victim of crime, none of us gets enough support,” she said. “To have an office dedicated to this peculiar intersection of immigration and criminal justice, two systems that don’t know how to talk to each other, well, it was just really helpful for me, even though I know how rare it is for an immigrant to commit crime against a citizen.”

The woman spoke to AP on condition of anonymity because she did not want to reveal her daughter’s identity. Her daughter’s attacker pleaded guilty to reduced charges and got five years in prison. The mother didn’t get to speak at his parole hearing because she didn’t get proper notification, and she was growing increasingly frustrated.

She said she believed that while her daughter was attacked by an immigrant, it’s not the norm. But, she still needed help figuring out whether he’d be deported when he finished his sentence, and she was afraid for her daughter’s safety. She called the prison, the prosecutors, even her local ICE office; No one knew how to help.

But after she called VOICE, a caseworker found his information, figured out when he was getting released and when he’d be picked up by immigration. The caseworker kept her notified throughout, including after the man was deported in August.

“Honestly, the help they provided was an unbelievable relief,” she said.

Article source: https://www.aol.com/article/news/2019/02/05/trump-immigrant-crime-hotline-still-faces-hurdles-pushback/23662485/

Awards season 2019: Regina King’s best red carpet moments

All hail queen Regina King!

The actress has been the belle of the ball all throughout the 2019 awards season so far, with her co-starring role in Barry Jenkins’ “If Beale Street Could Talk” garnering her endless praise — including some of the most prominent awards in Hollywood.

SEE ALSO: Timothee Chalamet’s awards season style

King has won at the Golden Globes, Palm Springs International Film Festival, National Society of Film Critics Awards and more for the role, and she looks to continue her haul as awards season comes to a close at the Oscars. The actress is the favorite to win a Best Supporting Actress Oscar at this month’s Academy Awards.

See Regina King’s 2019 awards season style:

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But it’s not just her performance in “Beale Street” that King is winning rave reviews for: The actress, who has also won multiple Emmys, has been shutting down every red carpet that she appears on with her effortless beauty and sophisticated style. 

SEE ALSO: Regina King reflects on her decades-long career (Exclusive)

The 48-year-old beauty has shown a knack for combining her love of traditionally feminine colors like pink, purple and blush with daring silhouettes. King clearly loves showing off her enviably toned arms on the red carpet, and she isn’t afraid of a little sparkle, as evidenced by her looks at the Critics Choice Awards and Golden Globes.

Check out the gallery above for a look back at Regina King’s 2019 awards season style.

RELATED: See Lady Gaga’s best looks from 2019 awards season:

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Article source: https://www.aol.com/article/entertainment/2019/02/05/awards-season-2019-regina-king-best-red-carpet-moments/23662126/

Your Money: The romance and reality of running a food truck

NEW YORK (Reuters) – Anyone with a boring 9-to-5 job and some culinary talent has at some point probably dreamed of opening their own food truck.

Just think of it: Hitting the road, hanging out at music festivals, making delicious food, being your own boss.

While running a food truck does involve all those things, it also means plenty of not-so-dreamy things like parking tickets, health permits, hefty payments to event operators, mechanical repairs and sweaty, hard work.

This is what Jill Moskites learned on the road in Connecticut. As one-half of the team operating Hartford’s The Whey Station (with husband Josh), she has been making divine grilled-cheese sandwiches on the go for almost eight years.

Along the way the duo has garnered accolades like Best Food Truck in Hartford, Best Grilled Cheese in Connecticut – and Jill even became a champion on the popular TV show “Chopped.”

“It’s an exciting life, but you have to be willing to work hard, because it’s incredibly difficult,” said Moskites, who now operates three mobile locations and one brick-and-mortar restaurant, Whey Station(ary), in Middletown, Connecticut.

It took the couple a full three years before they saw the operation as a viable, standalone business.

Many other would-be chefs harbor the same dream. There are now more than 4,000 food trucks rumbling around the nation, according to market research firm IBISWorld. That means an annual growth rate of 7.3 percent over the last five years, for an industry that brought in almost a billion dollars in 2017.

Revenue can vary wildly by product and location. On average, IBISWorld found that wages will gobble up 38.7 percent, and food purchases 39.7 percent. In terms of profit, you are going to be left with 7.7 percent. If you are pulling in $200,000, for instance, that is just $15,400.

So how can food-truck dreamers drive their way to steady financial success? A few road-tested tips:

*Do one thing, and do it well.

Most food trucks go wrong trying to generalize. “I have personally seen 15-20 trucks come and go just in my own town, because they didn’t really know what their concept was, and were just flying by the seat of their pants,” said Bruce Smith, owner of Chick-N-Nooga in Chattanooga, Tennessee, whose truck serves his specialty fried chicken.

When you have settled on a home-run dish, then you can develop your brand by building Twitter followers, posting mouth-watering Instagram pics, partnering with other local brands and making media appearances.

* Start small with the truck.

Your natural instinct will be to buy the biggest, best food truck out there. Part of this expense will depend on your location, and state regulations: In Texas you might be able to get a new truck for $40,000, said Matt Geller, CEO of the National Food Truck Association, while in California a tricked-out ride can range from $110,000 to $170,000.

But get something reasonable – or consider renting or leasing to start. Chattanooga’s Bruce Smith, for instance, stayed conservative with his $25,000 trailer.

The Whey Station started with a beater. “Other trucks used to laugh at us, because ours was so ugly. But an hour into the event, when lines started forming, they weren’t laughing anymore,” Moskites said.

*Be wary of events.

Event organizers have begun to see food trucks as cash cows, skimming a big part of their take. That makes it almost impossible to make a buck – and if you have to hike your prices to break even, that risks alienating your loyal fans.

“Watch out for any event that is taking over 20 percent of your money,” said Smith. “Some are even charging 30 percent or more these days. I would just steer clear of those.”

*Calculate all costs, not just some.

Non-food costs will probably take you by surprise.

Fuel, labor, insurance, permits, power usage and parking all add up. For food trucks around L.A. and Orange County, they might be looking at 10-15 different business licenses and $1,700 just to obtain the right to start selling, Geller said.

Since every event and each Connecticut town requires its own permit, the Moskites dropped $6,000 just on permits in a single year. For them it has been worth it, as they have managed to boost revenue by $50,000 every single year.

Editing by Beth Pinsker; Editing by Dan Grebler

Article source: http://feeds.reuters.com/~r/news/wealth/~3/VqlcaEXUWL0/your-money-the-romance-and-reality-of-running-a-food-truck-idUSKCN1PU1Y7

Small-cap stocks shrug off debt concerns, for the moment

NEW YORK (Reuters) – Small-cap stocks were among the biggest losers during the stock market’s rout late last year as investors worried about high leverage, but they have outperformed in 2019’s rebounding market, with shares of debt-laden companies leading the charge.

So far this year, the small-cap Russell 2000 index has advanced 12.9 percent, versus a 9-percent gain for the benchmark SP 500 index. Another small-cap index, the SP 600, has gained 12.1 percent.

An expected pause in the Federal Reserve’s course of interest-rate hikes – and optimism that a recession is not imminent in the next 12 months – support a further run in small-caps, investors say. The caveat is that as economic growth and corporate earnings taper off, these companies will find it increasingly difficult to make payments on their borrowings.

The rebound comes after the Russell 2000 and the SP 600 both hit levels in December that were more than 20 percent below their August peaks, which many investors consider confirmation of a bear market. The SP 500 bottomed 19.8 percent below its September peak, just missing the bear designation.

Small-cap stocks’ performance typically tracks investor appetite for debt. Though the median debt-to-equity ratio for the SP 500 is greater than that for the Russell 2000, small-caps are seen as more sensitive to debt concerns because such companies often secure financing through bank loans with adjustable rates rather than fixed-rate bonds.

Last year’s rise in interest rates means more and more highly-indebted companies may have to scramble to make payments. The number of companies struggling with debt obligations is near record highs, according to the Institute of International Finance.

Moreover, of Russell 2000 companies, 38.3 percent have no net income, whereas only 1.4 percent of SP 500 companies have no net income.

LEADING THE WAY UP

In December, credit spreads, the difference in yield between corporate securities and U.S. Treasuries, widened by the most in more than seven years for both high-yield and investment-grade corporate bonds, according to ICE BofAML index data.

But as credit spreads have narrowed, a sign investors are less risk-averse, small-cap stocks have climbed. They got a further reprieve last Wednesday when Federal Reserve policymakers signaled a pause in its tightening cycle.

“With still-low interest rates and an environment of still-solid growth, the concerns about how many (companies) will default are just pushed off to the next slowdown in the cycle, which we don’t see happening anytime soon,” said Kate Warne, investment strategist at Edward Jones in St. Louis.

Highly leveraged companies led the way down in late 2018 and have led the way higher this year.

In the fourth quarter, the Russell 2000 companies whose shares were in the highest quartile of percentage declines had a median debt-to-equity ratio of 41.1 percent. By contrast, Russell 2000 companies whose shares were in the lowest quartile of percentage declines had a median debt-to-equity ratio of 32.3 percent, according to a Reuters analysis.

However, in January, the first group gained 16.6 percent on average, while the second group gained just 4.7 percent.

Highly leveraged small-caps on the upswing – tmsnrt.rs/2Tkhpnz

“They’ve dropped so much that they’ve become an area of interest to screen,” said Scott Hood, chief executive at First Wilshire Securities Management in Pasadena, California, of highly-leveraged small caps.

DEBT CONCERNS LINGER

Yet concerns about leverage have not entirely abated as economists and market watchers anticipate the end of the current economic cycle in the next few years.

At last week’s news conference, Federal Reserve Chairman Jerome Powell said that the U.S. central bank was monitoring corporate debt levels.

At the recent World Economic Forum in Davos, Switzerland, International Monetary Fund First Deputy Managing Director David Lipton pointed to corporate debt as an economic risk.

“There’s going to be a big focus this year by companies in general, but also small caps, to de-lever as much as they possibly can before the economy deteriorates,” said Kristina Hooper, chief global market strategist at Invesco in New York.

Even those sanguine on the prospects for small caps, such as Eric Marshall, portfolio manager at Hodges Capital Management in Dallas, say they have focused more intensely on companies’ balance sheets when picking stocks.

Tim Ghriskey, chief investment strategist at Inverness Counsel in New York said the recent run-up in small caps is “simply a dead-cat bounce.”

“The levels of debt for not only small caps but also selective large caps remain an issue,” he said.

Reporting by April Joyner; Editing by Alden Bentley and Nick Zieminski

Article source: http://feeds.reuters.com/~r/news/wealth/~3/WIr7JmOzIzA/small-cap-stocks-shrug-off-debt-concerns-for-the-moment-idUSKCN1PU220

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