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One of the worlds most well-known stock market indexes, the S&P 500, will soon look a little different. Thats because its roster of 500 companies is getting a shakeup, which will see the cryptocurrency exchange Coinbase Global join the index. In the process, Coinbase will replace legacy financial services company Discover Financial. Heres what you need to know about the changes coming to the S&P 500. What is the S&P 500? The S&P 500 is one of the worlds best-known stock market indexes. A stock market index is essentially a running list of publicly traded companies whose stock prices are tracked. These indices can help give investors an overview of how the economyor at least the marketsare behaving over a certain period, whether an hour, day, week, year, or decade. There are numerous stock market indexes across the world. The Dow, S&P 500, and Nasdaq 100 are the most well-known in the United States. Other global indexes include Chinas Hang Seng, Japans Nikkei 225, the U.K.s FTSE, Germanys DAX, and France’s CAC 40. Indices should not be confused with stock market exchanges like the New York Stock Exchange (NYSE) or the Shanghai Stock Exchange. Stocks are bought and sold on these exchanges, whereas an index only tracks the price of certain stocks (though you can buy ETFs and mutual funds on exchanges that are broadly representative of certain indices themselves). As its name suggests, the S&P 500 tracks 500 publicly traded companies in the U.S. markets. This is much more than the Dow, which only tracks 30 companies. The S&P 500 launched in its current form on March 4, 1957. The full name of the S&P 500 is the Standard and Poor’s 500. Why is Coinbase joining the S&P 500? The catalyst for Coinbase joining the S&P 500 is that a legacy financial company that is currently tracked by the index will no longer be separately traded. That company is Discover Financial Services, which is being acquired by Capital One Financial Corporation. Discover’s removal will leave the S&P 500 with only 499 companies, so the S&P 500 needed to find a replacement, which it has done with Coinbase. Why did the S&P 500 choose Coinbase? A committee chooses which companies are included in the S&P 500 and, generally speaking, the committee tries to include companies from a broad range of sectors so it is composed of 500 companies that are a good proportional representation of the American economy. Whats interesting with Coinbases inclusion on the S&P 500 is that it is the first time a cryptocurrency company has been added to the index, notes The Crypto Basic. While this wont change the fundamentals of the company itself, it signifies that crypto companies are becoming a more important part of the U.S. economyor at least, that’s the perception. However, the S&P 500 committee cant just choose any company it wants for the index. It uses multiple criteria when determining which companies to add. As noted by CNBC, any company added to the S&P 500 must have reported a profit in its most recent quarter and have had cumulative profits over the past four quarters. But those arent the only requirements. As S&P Global states, companies must also meet other selection criteria, which include: The company must be a large cap onethat is, it must have a market capitalization of at least $10 billion. The company must have sufficient liquidity. The company must have a sufficient number of shares that are available to the public (known as public float). The company must help contribute to the sector balance. The S&P 500 committee felt that Coinbase met these criteria. How unusual is this? Its important to note that changes to the S&P 500 arent as rare as changes to the Dow, which only tracks 30 companies. The S&P typically makes dozens of changes to its roster every year. As mentioned, the reason Coinbase’s addition is so notable is that its the first crypto company ever added to the S&P. When do these changes take effect? In a press release, S&P Global confirmed that these changes will take place on Monday, May 19. On that day, Discover Financial Services will be delisted from the S&P 500 and Coinbase will be added. How have Coinbase on Discover Financial Services shares reacted to the news? Discover Financial Services stock (NYSE: DFS) pretty much shrugged off the news when it was announced after market close on Monday. Thats because DFS shareholders know the company is already being acquired for a fixed amount. Because Discover Financial Services is being acquired, its removal from the S&P 500 was expected. On the other hand, Coinbase stock (Nasdaq: COIN) has surged on the news that it was joining the S&P 500. Shares are currently up over 10% in premarket trading as of the time of this writing. Yesterday, before the S&P 500 announcement, COIN shares closed at just over $207. However, Coinbases addition to the S&P 500 does not change any of the companys financials. The reason the stock is surging anyway is that many mutual funds and ETFs that track the S&P 500 will likely now add COIN shares to their baskets, meaning they will buy the stock, thus causing it to rise. Still, despite the companys inclusion on the S&P 500, COIN shares have taken a beating this year. As of yesterdays close, they were down over 16% year-to-date. Over the past five years, COIN shares have fallen 45%.
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E-Commerce
California’s governor called upon the state’s cities and counties to ban homeless encampments this week, even providing blueprint legislation for dismantling the tents lining streets, parks and waterways throughout much of the state.Gov. Gavin Newsom, a Democrat, made homelessness a priority of his administration when he took office in 2019. It had previously been an issue primarily for mayors and other local officials, but Newsom pumped money into converting old motels into housing and launched other initiatives to tackle the issue. Still, he has repeatedly called out cities and counties to do their part, and on Monday, he unveiled draft language that can be adopted by local governments to remove encampments. Here is what to know: What does the model ordinance say? Newsom’s model ordinance includes prohibitions on “persistent camping” in one location and encampments blocking sidewalks and other public spaces. It asks cities and counties to provide notice and make every reasonable effort to identify and offer shelter before clearing an encampment. What do local governments say? Organizations representing California’s cities and counties balked at the suggestion that they are to blame for street conditions. They say they need dedicated, sustained funding over multiple years for permanent projects instead of sporadic, one-time funding.Carolyn Coleman, executive director and CEO of the League of California Cities, said that eight in 10 cities have policies to address encampments but they need money to address the root causes of homelessness, such as more housing.The California State Association of Counties said the state has not provided as much money to address homelessness as it says it has and that half of the money has gone to housing developers. What do homeless advocates say? Studies have shown that encampment bans and other punitive measures make it even harder for people to find stable housing and work, said Alex Visotzky with the National Alliance to End Homelessness.People may lose critical documents or lose contact with a trusted case manager, forcing them to start all over again.In Los Angeles, Jay Joshua watches over a small encampment in which he also lives. He says encampments can be a safe space for those living there. What are California cities doing about encampments? Major cities with Democratic mayors have already started cracking down on encampments, saying they present a public health and safety hazard.In San Francisco, new mayor Daniel Lurie vowed to clean up city sidewalks. In San Jose, Mayor Matt Mahan has proposed arrests if a person refuses shelter three times. Do cities and counties have to adopt it? Newsom can’t make cities and counties adopt an encampment ban.But the proposed encampment legislation was paired with an announcement of $3.3 billion in grant money for facilities to treat mental health and substance abuse disorders, suggesting that he could condition state funding on compliance.In 2022, he paused $1 billion in state money for local government, saying that their plans to reduce homelessness fell short of the acceptable. Janie Har, Associated Press
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E-Commerce
Since it launched two years ago, Spotifys AI DJ has been a one-way experience. It curates old favorites and helps listeners discover new tracks based on past listening experience and what similar users like. But now its getting interactive. Spotify unveiled the ability to request songs from the DJ based on mood, genre, and vibe. The feature, which launched across 60 markets, is exclusive to Spotify Premium users, who can access the DJ by searching for the tool in the app. Its the latest AI feature to come from Spotify, which introduced an AI-generated playlist builder for Premium users in the United States last fall. But Molly Holder, Spotifys senior director of product for personalization, says that tool was designed for people who want to take an active role in their listening experience. The new DJ request feature, by contrast, is designed to give users more input into an essentially lean back experience. We know that even in a lean back moment, users still want some semblance of control,” she says. How does the DJ request feature work? After a user searches for and calls up the DJ in the app, they can make a request by holding down the DJ icon and speaking a prompt. (The feature requires microphone access.) After receiving the prompt, such as upbeat songs for running or ambient for a rainy day, the DJ will “think” for a bit before launching into a tailored playlist. [Image: Spotify] Focusing on mood or moment along with a genre tends to be the best approach for using the feature. Wanting to give it a slam dunk, I asked for early 2000s patriotic country and immediately got Toby Keiths Courtesy of the Red, White and Blue. Not too hard. But when I asked for undiscovered African gems for a summer barbecue, expecting Afrobeats and Amapiano, the DJ instead served songs from the African diaspora. (The first was by Timbuktu, who Spotify describes as one of Swedens most well-known hip-hop artists.) Once I specified the genre, the results were better, but Id forgotten to make clear I wanted undiscovered artists, so I got a lot of Tyla. With several of the requests, the DJ seemed somewhat buggy, abruptly stopping a song and launching into its more default mode. When I asked for DIY indie rock from the mid-2010s, it played a few bars from an early Mitski song, then reset itself and introduced my top songs from 2023. Pairing insight with a human touch Spotify’s Holder says that while the DJs content-surfacing abilities are powered by AI, many of the comments and insights that it delivers in between songsthe bits that make the tool feel like a personalized and expert experienceare powered by humans. We have music experts and editors who have built whats called the writers room for the DJ product, she says. These folks come together with generative AI to build the commentary that DJ offers throughout the experience. This commentary can increase listener engagementwhich can be beneficial for artists who are trying to break through as well. In that writers room, when we build that commentary, it helps to bring artists stories to life to bring a little bit more context to the content were recommending,” Holder says. One thing we see is that users who hear commentary about a track in the DJ experience are more likely to listen to a track they might have otherwise skipped. Holder also positions the new feature in Spotifys long history of using machine learning to build personalization into the user experience, from Discovery Weekly to Daylists and now the DJ requests. Were really applying AI strategically across our product portfolio in ways that enhance the value proposition of our products.”
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E-Commerce
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