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Six Bullish Signs That a Short-Term Bottom May Be Brewing

The correction in stock prices may be gathering steam, and the potential for a full blown liquidity crisis seems to be rising. The reason may be that several big players in commercial real estate have recently defaulted on billions of dollars’ worth of loans.

Last week, in this space, I wrote: “Something happened to the markets around Valentine’s Day which could reverse the recent uptrend.” Well, the trend is increasingly wobbly, and we are getting new information which may explain at least part of what’s happening.

Real Trouble in Real Estate

The hotter-than-expected PCE (Personal Consumption Deflator) data grabbed the headlines. But it seems that its arrival on the scene may be more of a catalyst for an already churning dynamic in the market than the cause for the renewed selling on 2/24/23.

Think commercial real estate defaults.

Over the last few weeks, in this space, I’ve reported that several major real estate investors have faced increasing difficulties. I’ve also noted that it is possible that these and other commercial property REITs that have had problems with foreclosures may have been selling U.S. Treasury bonds in order to raise cash to fund operations, as their cash flow dries up due to rising vacancies.  

I’ve noted that Brookfield’s LA default (highlighted in prior link) has been well reported, while the even bigger Blackstone (BSX) is also having its share of problems along with Starwood (STWD). Brookfield’s (BAM) CEO Bruce Flatt is calling the L.A. default insignificant, while citing demand for premium space around the world, in places like Dubai, as more than enough to offset the L.A. issues for the company.

Six Bullish Signs that a Short-Term Bottom May be Brewing

The creep up in U.S. Treasury bond yields of late has been due to steady selling from one or more players. The question that matters most for investors is who is doing the selling and why. So far, it’s not clear. But, for now, things seem to have calmed down. And this pause has had a calming effect on the stock market, which may be a worthwhile short-term trading opportunity.

The selling in bonds may have come too far too fast, given the apparent rolling over of yields, on 3/3/23, as I discuss below. Thus, it follows that, if this is the case, then a short-term rebound in stocks is more likely than not.

As a result, there are six short-term indicator reversals in the works for the stock market. And if they hold, they will support higher stock prices. I describe them in detail below. The first one is the pulling back of the U.S. Ten Year note yield below 4%. The other five are related to the technical action in the stock market, including market sentiment, the action in major stock indexes, liquidity indicators, and the market’s breadth.

Meanwhile, although not out of the woods completely, homebuilder stocks may actually have one more price surge, as spooked buyers who have pulled back their horns due to the recent climb in interest rates could return, as they fear that rates will rise again in the not too distant future.

I have recently added several new picks including actionable options to my model portfolio. Check them out with a free trial to my service here.

Is Starwood the Canary in the Coal Mine?

I’ll discuss the homebuilders below. But first, a bit more on commercial real estate.

Investors are clearly losing confidence in companies that invest in commercial real estate. For instance, take the response to real estate giant Starwood’s (STWD) recently reported better-than-expected results. Normally, you’d expect some sort of rally due to the good news. Yet, instead of a move higher, the stock’s price mostly went nowhere. That suggests that confidence in the sector, even in companies that are holding their own, is starting to erode significantly.

Starwood delivered $140 million in profits, a 53% year-over-year increase based on $456 million in revenues, also a nifty 56% year over year increase. CEO Barry Sternlicht shed some light on the status of the commercial market, noting that the multifamily market is “solid” while the commercial market is “bifurcated.” He also added that the U.S. office market is being hampered by the “work from home” dynamic, while noting that the rest of the world isn’t this way anymore.

Perhaps the remark that should have eased investors’ fears was Sternlicht’s comment about Starwood’s exposure to office properties is only 13% of its total portfolio, while adding that the company has “almost no exposure” to New York and San Francisco, where the office markets are struggling more than other areas. He also noted that office markets in states like Texas are doing much better.

Instead, investors seemed to focus on Sternlicht’s comments about the Fed, where he noted that the Fed isn’t likely to bring inflation back to 2% without some sort of miracle occurring.

The stock had a token bounce 3/1/23, but almost immediately rolled over and resumed its downward path — only to then rebound once bond yields reversed on 3/3/23. We’ll see how this develops. Certainly, the stock is oversold. Thus, if bond yields take a breather, the shares could bounce for a few days to weeks.

At this point, though, it may pay to look elsewhere, as the Accumulation Distribution (ADI) and On Balance Volume (OBV) indicators are not offering much hope, as ADI’s recent bounce, an indication of short covering, has been overshadowed by the worsening On Balance Volume (OBV). Putting the two together, sellers are taking the opportunity to increase their selling into the temporary rise in prices due to short sellers abandoning the stock.

You can check out both long and short real estate and homebuilder picks here with a free trial to my service.

Why the 4% Yield on the U.S. Ten Year Note Could Help Homebuilders in the Short Run

The first potentially bullish sign of a turnaround in the markets is the action in bond yields.

For several weeks, I’ve been writing about the U.S. Ten Year note yield (TNX) and the crucial 4% yield area. Well, last week, 4% TNX crossed above the key line in the sand for a couple of days before reversing. What that means is that all market interest rates that are tied to TNX may again reset higher in the next week or so, at least temporarily, due to the lag effect. 

Among the most crucial rates are those related to mortgages. Already, we’ve seen the troubles in commercial real estate due to higher rates. More recently, we’ve seen homebuilder stocks roll over, as investors factor more decreases in existing home sales, and even new home sales which rebounded in January when TNX fell to nearly 3.5%.

Now, we’ll have to see if this was the top for the current move or whether yields will rise further after a pause. With payroll data due on 3/10 and CPI due out on 3/14, anything is possible.

You can see that mortgage rates have already retraced most of their recent drop and that, once again, the 7% yield is within reach. We’ll see what happens to these rates and what the response from potential home buyers is if there is a slight pullback in rates. My guess is that we will see more action on the housing front in the short term as homebuyers try to lock in current rates before the Fed raises rates again.

The homebuilder sector (SPHB) had been fairly steady in comparison to other areas of the stock market, but the move above 4% on TNX is had a noticeable negative effect on the sector. Not surprisingly, though, as soon as TNX pulled back from the 4% area on 3/3/23, homebuilder stocks rebounded.

That’s not really surprising because, for homebuilders and for sellers of existing homes, the recent and aggressive rise in mortgage rates created a panic scenario. Thus, the potential for a temporary reversal in rates may be beneficial in the short term. Indeed, if those buyers who recently pulled back their bids due to higher rates fear that even higher rates are coming in the not-too-distant future, it will likely spur a boost in the homebuilders shares.  

For a detailed explanation of how to manage your portfolio during a liquidity crisis, watch this Your Daily Five video.

Five Technical Signs Which Point to Short Term Bottom

The technical environment for stocks improved on 3/3/23 as bond yields reversed their recent climb and the NYAD, SPX, NDX, VIX, and XED all delivered some positive action. However, if there is going to be a meaningful short term rally, these five signs need to hold.

The New York Stock Exchange Advance Decline line (NYAD) broke below support at its 20-day moving average last week and found support just above its 50-day moving average. This is certainly encouraging, as is the close for NYAD above its 20-day moving average.

Meanwhile, the S&P 500 (SPX) bounced back above the the 4000 area after finding support at its 200-day moving average. This is also bullish.

The Nasdaq 100 Index (NDX) also found support at its 200-day moving average, adding to the short term bullish scenario.

Adding to the sigh of relief, the CBOE Volatility Index (VIX) rolled over, signaling that bearish sentiment is pulling back. 

When VIX rises, stocks tend to fall, as rising put volume is a sign that market makers are selling stock index futures in order to hedge their put sales to the public. A fall in VIX is bullish, as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures, raising the odds of higher stock prices.

Liquidity finally stabilized, as the Eurodollar Index (XED) has found new support at 94.75 after breaking below 95, which had been a reliable support level. Usually, a stable or rising XED is very bullish for stocks.

You can learn more about how to gauge the market’s liquidity in this Your Daily Five video.

To get the latest up-to-date information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!

#1 New Release on Options Trading!

Good news! I’ve made my NYAD-Complexity – Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.

Joe Duarte

In The Money Options

Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.

The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.

To receive Joe’s exclusive stock, option and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.

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Stocks

Find the Strongest Price Charts with the StochClose Rank

Stocks and ETFs trading at or near new highs are leading with clear uptrends. These are the names we want on our watchlist or in our portfolio. We can find leaders by checking the list of 52-week highs or by using the StochClose indicator, which is part of the TIP Indicator Edge Plugin. Today’s article will show how StochClose works and provide a list of current leaders.

The chart below shows the Aerospace & Defense ETF (ITA) hitting a new high last week and the StochClose indicator captures this price strength. StochClose is the Stochastic Oscillator based on closing prices. StochClose (125,5) covers 125 days and this period extends back to early September. Six months is my personal sweet spot for price ranking. StochClose measures the level of the current close relative to the closing high-low range over the last 125 days. Values above 90 mean price is near a six month high, while values below 10 mean price is near a six month low. Note that raw values are smoothed with a 5 day SMA, which introduces a little lag.

The bottom window shows StochClose (125,5) moving above 60 and turning green in late October. Values above 60 indicate that price is in the upper half of its six month range (cup is half full). StochClose is currently at 94.49 and this means price is near a six month high. The raw value would be higher because there is a 5-day smoothing, but I prefer a short smoothing periods because it reduces whipsaws.

The image below shows the ETF TrendComp StochClose Rank Table from TrendInvestorPro. This table shows Trend Composite signals and the StochClose rank for 275 ETFs in our Master List. ITA is number seven on the list, right below the Oil & Gas Equipment & Services ETF (XES). The “Allw” in column two refers to the 50 ETFs that are part of the All Weather List. TrendInvestorPro runs a quantified strategy trading these 50 ETFs using Trend Composite signals and StochClose ranking.

TrendInvestorPro is currently working with three quantified strategies for trading ETFs. In addition to the All Weather Strategy, we have a Trend-Momentum Strategy for 74 stock-based ETFs and a Mean-Reversion Strategy for a broad list of 138 ETFs. Each strategy comes with a detailed article and quantified results. We also update signal tables on a daily basis. Click here to learn more.

StochClose, the Trend Composite, ATR Trailing Stop and eight other indicators are part of the TrendInvestorPro Indicator Edge Plugin for StockCharts ACP. Click here to learn more and take your analysis process to the next level.

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The price of keeping your kids fed at school is rising

School cafeterias are in crisis.

Some school districts are serving more finger foods because they can’t always buy plastic utensils. One is using a federal voucher to subsidize the cheese on its pizzas. Another is agonizing over whether to cut staff to offset its grocery bills.

The reason: Feeding U.S. schoolchildren doesn’t pay in this economy.

Food providers that many of the nation’s public school students rely on for meals are increasingly charging more than administrators can afford, representatives for hundreds of districts and their food-buying groups across the country told NBC News. Their longtime contractors — an array of manufacturers, distributors and suppliers — are passing on higher costs for everything from milk to aluminum foil, raising prices at short notice, missing deliveries or shifting their businesses away from the K-12 market.

As a result, many administrators are weighing which costs to cut as they face ever fewer options to buy ever pricier food. Next week, hundreds of school nutrition professionals are heading to Washington, D.C., as the School Nutrition Association, a national advocacy group, lobbies for more help controlling cafeteria costs.

While inflation is inching down, food prices at primary and secondary schools were up more than 300% in January from the year before, federal data shows. That figure reflects the expiration of pandemic-era aid to schools, but it also includes economywide pressures that have driven up food, energy, labor and delivery costs over the past year for businesses and consumers alike.

Anji Branch, the president of Idaho’s School Nutrition Association, said that “substitutions, cancellations, delays” represent “the new normal for us,” and she’s not alone.

The ‘force majeure’ flood

Paula De Lucca, the nutrition director for Wake County Public Schools in North Carolina, used to receive a “force majeure” letter from food contractors about once a year on average.

But those notices — which warn of price hikes above a contractually agreed level due to factors outside a provider’s control — have already flagged increases for 200 of the roughly 700 products ordered by the district’s buying group for the current school year, she said. Force majeure price increases can come from food distributors or manufacturers of any size, passing along higher costs for everything from labor or fuel to raw materials that they incur from their own suppliers.

We don’t want to reduce our quality. So the only other option, obviously, is positions.

Paula De Lucca, nutrition director for Wake County, N.C., Public Schools

The North Carolina Procurement Alliance — the state-run consortium that represents Wake County and most other North Carolina districts, covering more than 1 million students — said the recent price hikes comprise 52 bid items from the group’s distributors and 148 from manufacturers it buys from directly.

“We’re very seriously concerned about next year and the coming years,” De Lucca said, adding that the district has little choice but to pay the higher prices. Since her district is reluctant to make sacrifices to students’ meals and has recently raised employees’ pay, painful staffing decisions are now on the table.

“We don’t want to reduce our quality. So the only other option, obviously, is positions that you have,” she said.

Leann Seelman, a consultant at the NCPA, said her hopes for price relief have dimmed.

“We met with manufacturers a couple weeks ago,” she said late last month, “and they say they are still seeing issues in the marketplace.”

Other school nutrition directors are also reporting more frequent price hikes this year, many of them steeper than usual. Officials said the increases can range from a few percentage points above an item’s contracted price to 150% or more, affecting everything from chicken and yogurt to plasticware.

One force majeure letter seen by NBC News warned of a nearly 300% increase in liquid whole eggs — used in dishes like omelets and French toast — last July. Another letter announced increases of between 12% and 20% for foil-based items this fall, including aluminum wrap and serving pans.

Unlike restaurants and grocers, schools have little ability to pass along higher costs to those they serve. Many families already can’t afford school lunch. Households can apply for free or reduced-price meals, but not all meet the narrow income guidelines to qualify, which often leaves districts picking up the tab.

In a November survey conducted by the School Nutrition Association, nearly 850 of about 1,200 school systems reported shouldering meal debt, with the median of $5,164 per district up from $3,400 pre-pandemic. While some meal debt among the nation’s more than 13,000 school districts can be rolled over into the next year or written off as an operating expense, much of it will need to be paid off by the end of this school year, administrators and policy experts said.

Many food expenses for schools participating in the National School Lunch Program have long been subsidized by reimbursements from the U.S. Agriculture Department. Extra lifelines in recent years, such as a universal free meal program that expired at the end of last school year, and other pandemic aid, also helped cover costs temporarily.

Food service operators are more challenged than they’ve ever been, K-12 in particular.

Kathryn Fenner, Principal Consultant at Technomic

But those are winding down, and Kathryn Fenner, who follows the K-12 market for the food-service consultancy Technomic, says current USDA reimbursement rates lag well behind schools’ needs.

“Food service operators are more challenged than they’ve ever been, K-12 in particular,” Fenner said. “It’s never been an easy job, but the pandemic made it that much harder.”

A USDA spokesperson said the agency encourages schools to apply for “community eligibility,” which means that if enough students apply and qualify for free or reduced meals, their whole district can be provided with free breakfast and lunch.

Reimbursement rates are adjusted annually to reflect the consumer price index’s “food away from home” category, which was up 8.2% this January from the year before. Raising reimbursement rates beyond the CPI adjustments would require Congress to expand the USDA’s funding powers, the spokesperson said.

A ‘less strategic’ market

The food service industry is dominated by a handful of large companies. Just three — Sysco, Performance Food Group and US Foods — captured nearly 40% of all distributor sales as of 2021, up from about 30% in 2018, according to Technomic.

Among the 50 biggest broadline distributors that supply large quantities of food to institutions from hospitals and catering groups to universities and public schools, those same three companies accounted for 67% of sales, Technomic found. The food service industry hasn’t grown much in the last few years largely because of the pandemic, but Sysco, Performance and US Foods have increased their collective market share in part through acquisitions, Fenner said.

For major food service companies, the K-12 market is chump change.

Faced with strict regulations around what they can serve, budgets tied to taxpayer funding and limited scale (even a consortium of dozens of districts lacks the buying power of a massive hospital system), K-12 schools aren’t the most lucrative customers. According to Datassential, a food and beverage research company, they account for just 4% of operator purchasing.

In May 2021, US Foods CEO Pietro Satriano told investors that K-12 is among the “segments which are less strategic to us.” On a February 2022 earnings call, CFO Dirk Locascio said that executives “expect to grow below the market there” and cited “added complexity” among the reasons K-12 customers “tend to not be as profitable.”

We’re biting our fingernails hoping that we’ll get a distributor that will service our group.

Rae Hollenbeck, executive director of the power buying group in florida

US Foods didn’t comment on its strategic outlook for the school market. “We support many K-12 accounts across the United States and take our commitments seriously,” a spokesperson said. “As with all customers, we may evaluate new and existing relationships based on the strategic needs of the market.”

Sysco didn’t comment on its K-12 business. Performance Food Group didn’t respond to requests for comment.

Many school officials say there have never been so few food providers that want their business. Some administrators say contractors have been dropping service to entire regions. Others are getting only one bid when they used to get a handful. A few are receiving none at all.

In July 2021, Florida’s largest buying group, representing over 600 schools, was alerted that US Foods was terminating a contract set to last through 2024 in just 90 days, ending a nearly 20-year relationship.

After scrambling for new bidders, the Power Buying Group entered an emergency contract with Sysco, featuring delivery fees 250% as high as it paid previously, said Rae Hollenbeck, the group’s executive director. Federal pandemic aid helped cover those costs, but that funding and the emergency contract expire at the end of this school year.

“We’re biting our fingernails hoping that we’ll get a distributor that will service our group,” Hollenbeck said.

A US Foods spokesperson said, “In the event we do decide to exit a customer relationship, we honor our contractual obligations and work diligently to ensure a smooth transition for the customer.” Sysco didn’t respond to requests for comment on the emergency contract.

In Pennsylvania, a buying group representing 60 school districts said it received a bid from US Foods for the current school year with prices up 35% from its prior contract. Over the past year, the group has received hundreds of price hike notices citing inflation, said Kristan Delle, the food services director at Upper Dublin School District and a leader of the buying group.

“In our role as a food service distributor, we have been working closely with our customers to help navigate increased food costs by offering cost-appropriate alternatives,” a US Foods spokesperson said, adding, “We take our contractual obligations very seriously.”

Branch, of the Idaho school nutrition group, said she’s spent hours hunting for off-bid sources or local suppliers that can meet USDA requirements. Several Idaho school systems are moving to six-month bid cycles because providers can’t secure prices for a full school year, she said. Many items Branch’s district agreed to buy last June have already become unavailable or prohibitively expensive, she said.

Fresh snack boxes at a Missouri school. Some districts are serving more finger foods to avoid having to provide utensils.Courtesy Lori Danella

Schools also said their food contractors are getting less reliable. A nationwide truck driver shortage has contributed to inconsistent delivery times, with a few districts saying they now pay staff overtime to wait for food trucks late into the evening. Some deliveries never show up, officials said.

The problems have pushed some schools to ink deals with local grocery chains, whose prices tend to be higher.

Lori McCoy, director of food services at Colonial School District, which belongs to the same buying group as Delle, said she has been working with Giant Supermarkets to get food into her suburban Philadelphia cafeterias after US Foods’ deliveries became inconsistent.

Although many districts contract with specialty distributors and secondary suppliers, it’s less common for schools to rely on off-bid sources for their cafeterias. McCoy said it’s the first time she’s had to work with a supplementary source to get food on the fly.

Since many regional grocers don’t carry some of the USDA-approved products schools are required to serve, like certain whole-grain foods, McCoy said she’s often stuck with whatever she can get. The USDA has loosened some rules in light of supply chain issues and inflation, but many of those criteria are expected to come back into force next school year and more guidelines have been proposed.

“I guess I’m not supposed to say I serve [unapproved ingredients] anyway, but if it comes down to that and not feeding our kids, I mean, we have to do something,” McCoy said. “We are trying everything we can to meet the regulation, but at this point there are challenges beyond our control that are making it really difficult for us to do so.”

US Foods said it works with customers “to offer alternative products to meet their immediate needs” in case of supply disruptions.

Filling the gap

Some schools have found creative, if often imperfect, solutions.

Lori Danella, the nutrition director at Lee’s Summit School District, says her district was one of very few in the Kansas City metro area that wasn’t dropped by their distributors in recent years.

She had to take chicken wings off the menu after prices tripled earlier this school year, but she’s managed to keep serving “Big Daddy’s Pizza.” Its survival is thanks to the federal Foods in Schools program — which districts can use to order USDA-purchased commodities in bulk to be sent to a processing company — that helps pay for the cheese on top of the popular Schwan’s brand pies.

A Kansas City-area school subsidizes the cost of the pizza it serves through a federal voucher program.Courtesy Lori Danella

It isn’t just food that’s gotten costlier and harder to source. Wake County School District bought silverware because it had trouble getting plastic utensils during the pandemic, De Lucca said. While that shortage has eased, it has meant short-staffed cafeteria workers sometimes hand-washing “a thousand forks a day” because they don’t have a dishwasher, she said.

Some districts have begun serving more finger foods to avoid that problem, Technomic’s Fenner said.

In Indianapolis, Adelante Schools chose to start from scratch after suffering supply chain issues and price hikes. Managing Director of Operations Jordan Habayeb said he was worried about narrow, repetitive menus in his K-8 cafeterias after affordable USDA-approved options dwindled. He said Adelante is partnering next year with an area nonprofit to source fresh foods from local vendors. The idea, he said, will likely save money, too.

Longer-term fixes to reign in cafeteria costs would likely require broad policy action and more federal funding, said Crystal FitzSimons of the Food Research and Action Center, an advocacy group. Raising USDA reimbursement rates for the upcoming school year and reinstating universal free lunch as a permanent program would help, she said. Both are moves that the SNA also supports.

“It’s taken longer than I think anybody had expected for the school nutrition programs to recover,” FitzSimons said, adding that the process is far from over. “They still have not recovered from the impact of the pandemic.”

This post appeared first on NBC NEWS
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Rest over reps: Tiger Woods will skip next week’s Players Championship

The PGA Tour announced the field for next week’s Players Championship in Ponte Vedra Beach, Florida on Friday and one notable name was missing – Tiger Woods. 

The 15-time major winner didn’t enter the PGA Tour’s flagship event ahead of Friday’s  entry deadline, meaning he’ll sit out the tournament at the TPC at Sawgrass Stadium Course he won on in 2001 and 2013. 

Woods shot 1-under 283 and finished T-45 at the Genesis Invitational last week at the Riviera Country Club near Los Angeles. He made the cut but showed signs of fatigue during the weekend as he continues to recover from a car crash in 2021.

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The 47-year-old said his body will only allow him to participate in select tournaments.

‘Here’s the deal: Like I told you guys last year, I’m not going to play any more than probably the majors and maybe a couple more. That’s it, that’s all my body will allow me to do,’ Woods said at the Genesis Invitational. ‘My back the way it is, all the surgeries I had on my back, my leg the way it is, I just can’t. That’s just going to be my future.’

The 2023 Masters is a little more than a month away. Many assumed that Woods would participate in the Players Championship to get more reps in ahead of Augusta, but his latest move shows he’s opting for more rest ahead of the first major of the year. 

After missing 14-months of competition following the crash, Woods played three of the four majors last year. He returned to the Masters last April and made the cut. He also made the cut in the PGA Championship, only to withdraw after the third round at Southern Hills with a severe limp. He skipped the U.S. Open to make sure he was ready for St. Andrews, but missed the cut at the British Open.

‘My intent last year was to play in all four majors, I got three of the four,’ he said. ‘Hopefully this year I can get all four and maybe sprinkle in a few here and there. But that’s it for the rest of my career. I know that and I understand that. That’s just my reality.’

This post appeared first on USA TODAY
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Chiellini, LAFC beat Timbers 3-2 after raising title banners

LOS ANGELES (AP) — Giorgio Chiellini scored his first MLS goal, and Los Angeles FC opened its defense of the MLS title with a 3-2 victory over the Portland Timbers on Saturday.

Carlos Vela and Mahala Opoku also scored after LAFC unveiled its title banners and handed out championship rings during a lively pregame ceremony at its sold-out stadium. Retired Welsh forward Gareth Bale carried the MLS Cup onto the field .

Evander scored his first MLS goal for Portland, and Cristhian Paredes added a late score in the Timbers’ third straight loss to LAFC.

LAFC improved to 6-0-0 in season openers, matching Dallas as the only MLS clubs to achieve that feat in their first six openers. Los Angeles also became only the second defending MLS Cup champion to win its opener in the past seven years.

Banners celebrating LAFC’s two Supporters’ Shield titles and its 2022 Western Conference and MLS Cup championships were unveiled above the east stands at BMO Stadium during the pregame festivities.

Chiellini then got his second MLS season off to a strong start after appearing in 11 matches last year as a midseason arrival from Juventus. Along with a strong defensive performance, the 38-year-old Italian great opened the scoring in the 24th minute with his first stateside goal when he banged home a loose ball in the box from Kellyn Acosta’s cross.

LAFC had a goal by Ryan Hollingshead taken off the board moments later by a head-scratching foul call, but Vela coolly converted a penalty in the 34th minute after Opoku was fouled in the box. Opoku then ripped a goal past David Bingham in the 52nd minute for a 3-0 lead.

Evander, the Brazilian midfielder who joined Portland in December from Midtjylland, got the Timbers on the board in the second half. Paredes then scored in the 84th minute when John McCarthy, LAFC’s MLS Cup MVP goalkeeper, ventured too far from his own net while defending a corner.

LAFC rested Vela and Spanish star Ilie Sánchez in the 65th minute. This match was the first of five in 15 days for LAFC, including two CONCACAF Champions League games.

LAFC’s scheduled season opener at the Rose Bowl against the LA Galaxy last week was postponed by severe rainstorms. Portland beat Sporting Kansas City 1-0 in its opener last week.

___

AP soccer: and

This post appeared first on USA TODAY
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LSU responds after TikTok-famous gymnast promoted AI tool

LSU gymnastics star Olivia Dunne is at the center of an educational dilemma. Dunne, who has over 7.2 million followers on TikTok, promoted a new artificial intelligence service designed to help students in the classroom.

The AI tool curates writing prompts based on certain verbal phrases. According to The Advocate, Dunne partnered with Caktus AI in the TikTok video. The paid promotion shows Dunne speaking the phrase “gymnastics is the hardest sport.” The AI service translates the phrase into a written sentences based on the prompt.

RELATED: LSU beefs up security at gymnastics meets after incident with Olivia Dunne fans

This week, LSU addressed concerns regarding AI services. In a statement, the university referred to the Code of Conduct as AI service usage could result in academic misconduct.

‘At LSU, our professors and students are empowered to use technology for learning and pursuing the highest standards of academic integrity,’ LSU said. ‘However, using AI to produce work that a student then represents as one’s own could result in a charge of academic misconduct, as outlined in the Code of Student Conduct.’

The LSU Code of Conduct highlights guidelines that do prohibit plagiarism and shares what falls into the category. This includes a student failing to attribute ‘appropriate citations’ and ‘unacknowledged inclusion of words, structure, ideas or data.’

However, the LSU Code of Conduct doesn’t specifically outline the usage of artificial intelligence. 

LSU has addressed AI platforms in recent months, discussing the use of ChatGPT and warned students and teachers about the best ways to effectively incorporate the new technology into learning exercises.

‘This is an ideal opportunity to reflect on our current teaching practices, experiment with new opportunities, and brainstorm ways they could be utilized effectively in a classroom,’ LSU added in their AI service explainer.

Dunne is a rising NCAA gymnastics star. She returned to action last week and posted 9.825 on the uneven bars. LSU defeated Alabama in their meet and will compete on Friday against California, Washington and George Washington.

This post appeared first on USA TODAY
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MLS commissioner boasts flexibility in potential Lionel Messi transfer

Lionel Messi’s contract talks are set to become the biggest story in soccer with multiple suitors potentially lining up to acquire the World Cup champion and international star.

Messi is evaluating options as his deal with Paris Saint-Germain expires this summer and while he has reportedly had extension talks, interest has also been expressed by Major League Soccer club Inter Miami CF.

MLS commissioner Don Garber reflected on a potential Messi deal. In an interview with The Athletic, Garber said Messi would be a great addition to the league.

‘You’re dealing with perhaps the most special player in the history of the game,’ Garber said. ‘So, when there are rumors of him connected to Miami, that’s great. And if it could happen, it would be terrific for MLS, it would be terrific for Messi and his family, and like everything with us, we try to run every opportunity down. I can’t give any more details than that because we don’t have them.’

So, what would a potential Messi deal look like?

Garber mentioned that an MLS deal would be creative. Inter Miami would have to craft the right compensation to land the 36-year-old standout. Currently, Toronto FC star Lorenzo Insigne is the highest-paid player in the league with a base salary of $14 million.

‘We’re gonna have to structure a deal that’s going to compensate [Messi] in ways that he and his family expect,’ Garber said in terms of contract flexibility. ‘What that is? Honestly, we don’t know today.’

Speculation is that Messi could draw a contract similar to Cristiano Ronaldo’s new deal with Saudi club Al Nassar. Ronaldo is reportedly getting $75 million per year, according to The Athletic.

‘Teams have the flexibility to do unique things,’ Garber said.

It’s already been a whirlwind year for Messi, winning the 2022 World Cup with Argentina and FIFA’s Best men’s player award – his seventh time being named FIFA’s player of the year.

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Georgia has discipline problem that calls for action from Kirby Smart

Once is an incident, twice is a pattern and three times is a problem.

Kirby Smart has a problem within Georgia’s football program. There’s no denying that, not after Jalen Carter’s misdemeanor arrests for racing and reckless driving, connecting him to the high-speed car crash that killed Georgia football player Devin Willock and recruiting staff member Chandler LeCroy.

Too many people within Georgia’s football program throw caution into the wind when behind the wheel of a vehicle.

Police say LeCroy’s blood-alcohol content was more than twice the legal limit and that she was driving a Ford Expedition leased by Georgia athletics at speeds reaching 104 mph before crashing on a road with a 40 mph speed limit. LeCroy was racing Carter, Athens-Clarke County police say, with their vehicles switching lanes, overtaking other vehicles and driving in wrong lanes as they tried to outdistance each other.

Carter starred on defense for Georgia’s back-to-back national championship teams. He returned from the NFL scouting combine to turn himself in on the warrant, and he was released on bond. In a statement, Carter says he expects to be exonerated.

The fatal car crash continued a pattern of high-speed and dangerous driving emanating from Smart’s football program. Georgia football has a problem that calls for Smart to be more than a sympathetic spectator.

Smart has offered little public comment since the 2:45 a.m. car crash on Jan. 15 that killed LeCroy and Willock and injured athlete Warren McClendon and recruiting staffer Tory Bowles.

In a Wednesday statement, Smart said the charges against Carter are “deeply concerning,’ and Georgia is “assessing what we can learn from this horrible tragedy.” He better be saying a whole lot more internally to players and staff members, reaffirming ground rules for acceptable conduct and then enforcing them.

Start with Jamon Dumas-Johnson.

Carter is no longer subject to Smart’s discipline. Dumas-Johnson is, and Smart should suspend his star linebacker following his arrest on misdemeanor charges for racing and reckless driving in an incident occurring mere days before the fatal crash. Dumas-Johnson also was listed on police logs as a person police wanted to speak with on the night of the fatal accident.

Dumas-Johnson’s name on a log proves nothing but insinuates plenty.

This situation stinks more with each peel of the onion.

You just knew there was more to this story after the Atlanta Journal-Constitution’s report weeks ago that Willock, McClendon and two women resembling LeCroy and Bowles left an Athens strip club shortly before the crash.

Visiting a strip club is no crime. Neither is enjoying libations at a strip club.

But it all points to a night that needed to end with a safe ride home in an Uber after the reveling concluded.

This situation is a tragedy – tragedy that could have been avoided.

LeCroy’s decisions cost her and Willock their lives.

Carter’s decisions might damage his NFL draft stock. Once projected a top-five pick, he’ll go under the microscope of NFL evaluators.

The AJC has shined a light on what happened the night of the deadly crash with multiple investigative reports. The newspaper, citing documents it had reviewed, reported that Carter left the accident scene for more than an hour before returning and giving police shifting accounts of what happened.

Recent events point to continued bad choices by Carter after he was cited in September for driving 89 in a 45 mph zone.

And what of Dumas-Johnson, whom police say was engaged in high-speed, side-by-side racing?

Georgia officials have said little about Dumas-Johnson’s charges other than they’re aware of them.

Anyone who monitors college football is aware of them, but Georgia and its coach have the responsibility to do something. It’s unclear whether they have. At a minimum, Dumas-Johnson’s decisions should result in a suspension that keeps him off the field when Georgia opens the season.

Disciplinary action serves multiple purposes. It addresses the misconduct, and it acts as a deterrent aimed at nipping problem issues in the bud.

Reckless driving is a problem issue that Smart cannot ignore amid sweeping disciplinary problems. An analysis by the Athens Banner-Herald cited at least nine Georgia football player arrests in the past 13½ months for charges ranging from reckless driving to battery to false imprisonment.

At least one law enforcement warning went unheeded.

The police officer who stopped Carter for high-speed driving last September repeatedly asked him to slow down in the future and to caution his teammates to do the same.

High-speed reckless driving, according to the officer’s remarks recorded on body camera, was an issue rooted within the program.

“I’ve stopped a bunch of y’all’s football players,” the officer told Carter, as he rattled off other traffic stops he’d made. “Y’all need to slow down.”

“When you’re around your teammates, just tell them to slow down. It’s so easy. Just slow down.”

The message didn’t get through.

Smart must use his voice and his leadership position to ensure it does.

Blake Toppmeyer is an SEC Columnist for the USA TODAY Network. Email him at BToppmeyer@gannett.com and follow him on Twitter @btoppmeyer.

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2020 NASCAR champ has surgery after injuring leg in snowboard accident

NASCAR star Chase Elliott underwent successful surgery on his left leg Friday night but will miss this weekend’s Cup Series race at Las Vegas Motor Speedway.

The 2020 NASCAR Cup champion fractured the tibia in his left leg in a snowboarding accident earlier Friday while on the slopes in Colorado. He’s expected to be released from the hospital Saturday. 

‘Chase did go through a successful surgery last night that lasted about three hours. He’s doing well,’ team president Jeff Andrews said in a press conference Saturday, adding that there’s no timetable for his return. ‘At this point in time, we would expect this obviously to be several weeks. But beyond that, I don’t have a timeline to offer for you.’

But when Elliott is healthy and ready to return, Andrews said they’ll ‘have his seat ready for him.’

The 27-year-old Elliott has been voted the series’ most popular driver for five consecutive years. Hendrick Motorsports is NASCAR’s winningest team.

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Andrews emphasized that ‘the most important thing is Chase’s health and his wellbeing,’ echoing the statement team owner Rick Hendrick released Friday. 

‘We’re going to race a long time together with Chase Elliott and we’re going to win a lot more races together,’ Andrews said. ‘It’s certainly a little bit of a setback and obviously Chase is very disappointed, but again, I want to reiterate that the most important thing is Chase’s health.’

Andrews said Hendrick Motorsports won’t reevaluate its policies for activities racers are allowed to do during the season, saying Elliot could’ve suffered the same injury ‘stepping off a curb’ as he did during his snowboard accident. 

‘These guys have to go out and live a life outside of the race track, and certainly what Chase (Elliott) was doing was not anything abnormal for him. He’s an experienced snowboarder,’ Andrews said. 

LAST WEEK: Kyle Busch takes new team to victory lane at Fontana

The Georgia native and and son of NASCAR Hall of Famer Bill Elliott, finished second in the Pala Casino 400 at Auto Club Speedway in Fontana, California last week. Elliott had a rough season opener, however, finishing third-to-last in the Daytona 500 following a crash.  

Elliott will be replaced in the No. 9 Chevrolet in Las Vegas by NASCAR Xifinity Series driver Josh Berry. The 32-year-old Berry, who drives for Hendrick affiliate JR Motorsports, is a two-time winner in the Xfinity Series at Las Vegas.

Sunday’s Pennzoil 400, which is scheduled to begin at 3:30 p.m. ET (FOX), will be the first time Elliot has missed a Cup Series race since beginning his full-time career in 2016. Dating back to the 2016 Daytona 500, Elliott had made 254 consecutive starts and recorded 18 wins, including his 2020 championship.

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