Profit from Nature’s Wrath: Catastrophe Bonds

Catastrophe bonds help insurers manage financial risks from natural disasters and offer investors high returns, unless claims exceed certain levels.

The National Oceanic and Atmospheric Administration predicts an 85% chance of an intense season, including up to six major hurricanes.

Last year, catastrophe bonds had a 20% return. Brookmont Capital Management plans to launch a catastrophe bond ETF, ticker ROAR, on September 25th. The fund aims to gather $200 million in assets in its first year.

With a $47.4 billion market today, catastrophe bonds are favored for their uncorrelated returns.

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McDonald's Faces First Global Sales Drop in 3 Years

McDonald's reported its first global sales decline in 13 quarters, falling 1% in Q2 against a forecasted 0.5% increase.

The company earned $2.97 per share in Q2, missing the expected $3.07. US same-store sales dipped by 0.7%, with international sales also down 1.1%, impacted by weaker performance in France and a slow recovery in China.

Despite the drop, McDonald's shares rose nearly 4% after executives revealed the $5 meal deal, launched in June, exceeded expectations. The company plans to extend this offer beyond August to boost traffic.

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Medicare Price Talks: 2026 Cuts

Pharmaceutical companies are easing concerns over Medicare's upcoming price negotiations. Bristol Myers Squibb, Johnson & Johnson, AbbVie, and AstraZeneca believe the impact on their businesses won't be severe.

These firms are part of the first US price negotiations for Medicare. The list prices are expected to drop by at least 25% by 2026.

Medicare spends billions annually on drugs for over 66 million people. Under the Inflation Reduction Act of 2022, the government chose the 10 most expensive drugs for price talks.

Despite initial fears, pharma companies now feel the suggested prices are reasonable.

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Court Blocks Rule on Airline Fee Disclosures

An appeals court halted the Transportation Department's new rule on airline fee disclosures. The rule required airlines to reveal service fees upfront.

In April, the DOT reported that hidden fees cost consumers $543 million annually. Airlines collected $7.1 billion in baggage fees in 2023.

A panel of three judges from the Fifth US Circuit Court of Appeals ruled that the regulation might exceed the DOT’s authority.

The ruling followed lawsuits by major airlines, including American, Delta, and United. They argued the rule would force them to spend millions on website changes.

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