Michaels earnings grew by 40% in the third quarter, a blowout result that extends the arts-and-crafts retailer’s rebound from earlier this year https://t.co/hbqkXh5h1I ...

Core Viewpoint - The article highlights concerns regarding "deferred interest" retail payment plans, which many Americans believe should be outlawed due to their complexity and potential for high costs if not fully understood and managed [1][2][3]. Group 1: Understanding Deferred Interest - Deferred interest plans allow consumers to make large purchases without immediate interest if paid off within a promotional period, but failing to do so results in retroactive interest charges, often exceeding 30% annually [2][8]. - Approximately 50% of American consumers do not fully understand how deferred interest works, leading to potential financial pitfalls [2][9]. - A WalletHub study indicates that 51% of consumers believe deferred interest should be illegal, reflecting widespread dissatisfaction with these financing options [3]. Group 2: Retailer Practices - Many major retailers, including JCPenney, Best Buy, and Home Depot, utilize deferred interest plans to encourage purchases of high-ticket items, often downplaying the associated high-interest rates in fine print [4][6]. - WalletHub has been monitoring deferred interest practices since 2012, rating retailers on the transparency of their financing offers [4]. Group 3: Consumer Behavior and Alternatives - In 2020, consumers spent over $60 billion on deferred interest purchases, with a significant portion allocated to home improvement [12]. - While about 80% of consumers using deferred interest manage to pay off their debt within the promotional period, those with lower credit scores face challenges, with only 60% successfully avoiding interest [13]. - Experts suggest that zero-APR credit cards are a better alternative, allowing consumers to avoid deferred interest altogether by only incurring interest on remaining balances after the promotional period [14].

Core Insights - Third Point's Offshore Fund returned 3.2% net in Q3, underperforming compared to the S&P 500 Index which returned 8.1% [2][3] - The fund's annualized return since inception is 13.2%, indicating strong long-term performance despite recent quarterly challenges [3] Portfolio Performance - Top five winners for the quarter included TSMC, Nvidia, CRH PLC, Comfort Systems USA, and Pacific Gas and Electric [4] - Major losses were seen in Kenvue, DSV A/S, Primo Brands, London Stock Exchange Group, and Flutter Entertainment, with overall performance below expectations due to weak event-driven positions [4] Market Trends - The equity market in 2025 is characterized by increasing concentration, particularly in gold and AI-related stocks, with structural problems noted in various sectors [5] - The demand for AI compute has accelerated, driven by advancements in model architectures and user engagement, benefiting investments in semiconductor companies like TSMC and Nvidia [6][8] Investment Opportunities - Third Point has invested in SK Hynix and Ebara, viewing them as undervalued leaders in their respective sectors, particularly benefiting from the AI buildout [9][12] - SK Hynix holds over 50% market share in high bandwidth memory (HBM), which is expected to grow significantly, contributing to a larger portion of the company's revenue [10][11] - Ebara is positioned well in the semiconductor production equipment market, particularly with its CMP tools, which are critical for advanced semiconductor manufacturing [13][14] Credit Market Insights - The credit market has shown resilience, with specific distressed trading opportunities arising from events in the subprime auto sector [17][18] - Third Point's corporate credit strategy has rebounded, achieving a 4.0% gross return in Q3, with significant contributions from companies like Michaels and exposure to Elon Musk's ventures [20][23] Business Updates - New team members have joined the equities team, enhancing the firm's analytical capabilities [29]

In a sign of how US tariffs could be primed to unleash more pain on consumers, employees at arts and crafts retailer Michaels have been busy boosting prices on Halloween and fall items. https://t.co/oSeG2gDhHU ...

Michaels is trying to rid its shelves of a line of coffee products launched by a romantic partner of its former CEO as the arts and crafts retailer tries to move past a corporate ethics scandal https://t.co/rOsRasXyWi ...