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Bed Bath & Beyond shares plunge after disappointing earnings report

Bed Bath & Beyond shares plunge after disappointing earnings report

  @dwbronner

Bed Bath & Beyond shares plunged nearly 15% in early trading Wednesday following a disappointing earnings report.

The retailer said after the closing bell Tuesday that earnings for the second quarter were $94.2 million, a significant drop from the $167.3 million it reported in the same period last year. Same-store sales fell by about 2.6% from a year ago.

 The company said that while online sales grew by more than 20%, in-store sales have dipped.

The “unfavorable impacts” of restructuring costs and the damage sustained by Hurricane Harvey contributed to the results, Bed Bath & Beyond (BBBY) said in a news release.

The home goods provider is not the only traditional retailer struggling to keep up with online competitors.

Toys ‘R’ Us just filed for bankruptcy, succumbing to mountains of debt it accrued when trying to fight off Amazon (AMZNTech30) and Walmart (WMT). The news is troubling or toy makers Hasbro (HAS) and Mattel(MAT), who saw their stocks dip when the bankruptcy was just a rumor.

Across the board, stores are closing at an alarming rate as shoppers lose interest in brick-and-mortar locations. And as bad as things are now, Wall Street thinks things are only going to get worse.

According to analysis by Bespoke Investment Group, investors are more pessimistic about the retail industry now than they have been since September 2008.

But Bed Bath & Beyond may also be facing tougher competition from traditional rivals. Williams-Sonoma (WSM), which also owns Pottery Barn and West Elm, reported earnings last month that topped forecasts.

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Hedge funds want to kill $20 billion chemicals deal

Hedge funds want to kill $20 billion chemicals deal

  @MarkThompsonCNN

An activist investor has built up a 15% stake in Swiss chemicals group Clariant and is vowing to fight its planned $20 billion merger with Huntsman.

White Tale Holdings, an investment partnership created by hedge funds Corvex and 40 North, has written to Clariant’s (CLZNY) board, urging them to rethink the deal.

“It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders,” the investor wrote in a letter published on Tuesday.

“The proposed transaction has no strategic merit and is a complete reversal of your own publicly-stated strategy of becoming a pure-play specialty chemicals company.”

White Tale Holdings said it had become Clariant’s biggest shareholder with a stake over just over 50 million shares and would vote against the merger unless the company explored “all strategic alternatives” to the deal.

Clariant and U.S.-based Huntsman (HUN) unveiled plans to create a global specialty chemical company in May, saying they expected the transaction to close by the end of 2017.

They said HuntsmanClariant would deliver annual costs savings worth more than $400 million, and enjoy a stronger market position in the U.S. and China.

In a statement late Tuesday, Clariant rejected White Tale’s criticisms and described the deal as the best option for creating value for all stakeholders.

“Since announcement the vast majority of Clariant’s shareholders have expressed their support for the deal,” it said, adding that it would not deviate from the agreement with Huntsman.

The deal has been billed as a “merger of equals” but Clariant shareholders would end up owning 52% of the combined company.

“The Board plans to cede operational control of one of the industry’s most prized specialty chemicals companies for no control premium to Huntsman’s management,” White Tale Holdings wrote, adding that it believed about 75% of the targeted cost savings could be delivered by Clariant on its own.

Clariant denied that it would be ceding operational control, saying its CEO Hariolf Kottmann would become chairman, while Huntsman President and CEO Peter Huntsman would become CEO, of the new company.

— Correction: An earlier version of this article incorrectly stated that Huntsman shareholders would own most shares in the new company.

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Hack of Wall Street regulator rattles investors, lawmakers

Hack of Wall Street regulator rattles investors, lawmakers

WASHINGTON (Reuters) – Wall Street’s top regulator came under fire on Thursday over its cyber security and disclosure practices after admitting hackers had breached its database of corporate announcements in 2016 and may have used it for insider trading.

The breach involved the U.S. Securities and Exchange Commission’s EDGAR filing system, which houses market-moving information with millions of filings ranging from quarterly earnings to statements on acquisitions.

The SEC said on Wednesday evening it discovered in August that cyber criminals might have used a hack detected in 2016 to make illicit trades.

On Wednesday afternoon, SEC Chairman Jay Clayton gave members of Congress a “courtesy call” about the hack before it was announced publicly, said Representative Bill Huizenga, chairman of the U.S. House subcommittee that oversees the SEC, in a phone call.

“It’s hugely problematic and we’ve got to be serious about how we protect that information as a regulator,” Huizenga said.

The SEC disclosure came two weeks after credit-reporting company Equifax Inc (EFX.N) said a breach had exposed sensitive personal of data up to 143 million U.S. customers. This followed last year’s cyber attack on SWIFT, the global bank messaging system.

It is particularly embarrassing for the SEC and its new boss Clayton, who has made tackling cyber crime one of the top enforcement issues.

“The chairman obviously recognizes the irony of the SEC potentially serving as the unwitting tipper in an insider trading scheme,” said John Reed Stark, president of a cyber consulting firm and a former SEC staff member.

The SEC has said it was investigating the source of the hack but did not say exactly when it happened or what sort of non-public data was retrieved. The agency said the attackers had exploited a weakness in a part of the EDGAR system and it had “promptly” fixed it.

Most reports filed with the SEC “generally don’t contain super-sensitive information,” and any insider trading would have taken place soon after company filings were made but before they were released to the public, said Gary LaBranche, president of National Investor Relations Institute.

“People are shocked and disappointed,” LaBranche said. Members of the institute, who work with 1,600 publicly traded companies, will be examining their trading reports for any unusual activity that could be tied to disclosures, he said.

U.S. President Donald Trump’s administration has prioritized protection of federal agency networks after breaches during the Obama administration, including at the Office of Personnel Management, Internal Revenue Service and State Department.

Trump in May signed an executive order requiring agencies to use a specific framework to assess and manage cyber risk, and prepare a report within 90 days about how they implement it.

The SEC did not respond when asked about that review or whether it triggered the disclosure. But Clayton said in his Wednesday statement that he began reviewing the agency’s cyber risk in May.

SEC Commissioners did not learn of the breach until recently. In a statement, Republican SEC Commissioner Mike Piwowar, who for part of 2017 also served as acting chairman, said he was “recently informed for the first time that an intrusion occurred in 2016.”

Erica Elliott Richardson, a spokeswoman for the Commodity Futures Trading Commission (CFTC),the top U.S. derivatives regulator, said in an emailed statement the agency constantly reviewed and updated its cybersecurity protections to guard against the growing threat of a breach.

“Our agency has successfully thwarted hundreds of attempted breaches,” she added.

The Canadian Securities Administrators, an umbrella group representing Canada’s provincial securities regulators, said on Thursday it would conduct an additional security review.

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Ethereum Co-Founder Envisions ‘Visa-Scale’ Capacity

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Ethereum Co-Founder Envisions ‘Visa-Scale’ Capacity

By Nathan Reiff | September 19, 2017 — 6:46 PM EDT

Vitalik Buterin, the enigmatic co-founder of the ethereum network, has a penchant for quotable sound bites that rivals his abilities as a developer of cryptocurrency systems. (See also: Ethereum Founder on ICOs: ‘We Are in a Bubble, A Lot of Projects Will Fail.’) Whenever Buterin speaks, people take notice.

Oftentimes, however, it seems that his words get mistakenly twisted. And even when he doesn’t speak, he seems to be involved in news stories which are somehow misrepresented. (See also: Does Ethereum’s Price Depend On the Life of This One Person?) Buterin’s latest eyebrow-raising quote involves Visa Inc. (V), the multinational financial services juggernaut.

According to a report by Tech Crunch, Buterin believes that the cryptocurrency he helped create will rival Visa within the span of a few years, at least by certain metrics.

Scaling Is the Issue

“There’s the average person who’s already heard of bitcoin and the average person who hasn’t,” Buterin said at Tech Crunch Disrupt SF 2017. He said the Ethereum Foundation, his project working in support of the token’s network, aims to develop additional utility in the blockchain, thus creating something that every person will want to be involved in. The idea is that if there is a benefit to everyone, then everyone will want to be involved.

“Where ethereum comes from is basically, you take the idea of crypto economics and the kinds of economic incentives that keeps things like bitcoin going to create decentralized network with memory for a whole bunch of applications,” Buterin explained. “A good blockchain application is something that needs decentralization and some kind of shared memory.”

Ethereum Needs To Be Faster

Part of the reason that ethereum has not yet been able to achieve these goals seems to be the slowness of the network, stemming from its scaling concerns. “Bitcoin is processing a bit less than 3 transactions per second,” Buterin commented. “Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the blockchain to replace Visa.”

Buterin later clarified his comment via Twitter to suggest that ethereum and its related projects will have “Visa-scale TX capacity” within a couple of years. He made the clarification after being misquoted as having said his cryptocurrency network will “replace Visa.”

The ethereum co-founder believes that many different types of applications can run on the blockchain, and that as technology continues to expand, the blockchain will be able to replace many services requiring parallelization, when programs are required to run at the same time. “Crypto is all about incentives on various levels,” he explained. “You cannot reason about the security of blockchain consensus protocols without incentives.”

 

Published at Tue, 19 Sep 2017 22:46:00 +0000

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NVIDIA Breakout Bodes Well for AMD Stock

 

NVIDIA Breakout Bodes Well for AMD Stock

By Alan Farley | September 18, 2017 — 9:29 AM EDT

Video graphics powerhouse NVIDIA Corporation (NVDA) rocketed higher on Friday, posting heavy volume during a breakout above three-month resistance at $170 and closing at an all-time high above $180. The uptick should gain traction in the coming months, lifting the high-tech market leader well above $200. It also bodes well for Advanced Micro Devices, Inc. (AMD) stock, which has attempted to mimic its larger rival’s bullish behavior in the past two years.

AMD shares rose nearly 400% in 2016, tracking a historic NVIDIA uptrend triggered by growing speculation on virtual reality gaming hardware. AMD stock topped out just above $15 in February and dropped into a long-overdue correction that has held relatively close to resistance in recent months. Its rival’s breakout could now generate fresh buying power, lifting AMD stock off a six-week test at the 200-day exponential moving average (EMA) and into an uptrend that targets the low $20s. (See also: AMD vs. NVIDIA: Who Dominates GPUs?)

AMD Long-Term Chart (1990 – 2017)

The Sunnyvale, California-based chipmaker ended a multi-year decline at $1.82 in 1990, giving way to a volatile uptrend that stalled out at $19.63 in 1995. A steep pullback into the single digits got bought in 1996, triggering a two-legged rally that topped out at an all-time high just above $48 in 2000, at the same time the dotcom bubble was bursting. It plunged with other tech stocks in the next two years, dropping to an 11-year low at $3.10 in October 2002.

The subsequent recovery wave unfolded at the same trajectory as the prior decline, lifting in a V-shaped pattern that stalled within six points of the 2000 high in 2006. That peak marked the highest high in the past 11 years, ahead of a decline that picked up steam during the 2008 economic collapse. It undercut the 1990 low in November, posting an all-time low at $1.62, while the subsequent bounce failed to attract substantial buying interest, topping out at $10.24 in 2010. (For more, see: AMD Surges on Bitcoin-Fueled Earnings.)

A bounce following a 2012 test at the 2008 low stalled in 2013, generating a year-long topping pattern followed by a decline that reached the prior decade’s low once again in 2015. Aggressive buyers emerged in the first quarter of 2016, generating a momentum-fueled uptrend that mounted the 2010 high in January 2017. The rally ended at a 10-year high less than two months later, yielding a trading range that is still under development as we near the fourth quarter.

AMD Short-Term Chart (2015 – 2017)

The 2016 rally broke the 10-year string of lower lows when it mounted the 2013 and 2014 highs in June. Momentum then accelerated, generating a series of rally waves that ran out of gas in the first quarter of 2017. Price action since that time has held support at the 200-day EMA, while a July breakout attempt triggered a major reversal. The subsequent decline settled below $12 in August, giving way to a basing pattern that could now support a trip back to range resistance. (See also: AMD Stock Could Break Out or Break Down.)

On-balance volume (OBV) hit an all-time high in June 2017, but the stock failed to break out, generating a minor distribution wave that has settled into a holding pattern, indicating that shareholders are hanging tough but failing to get paid for their efforts. A rally above $14 is needed to avoid growing frustration and support another test at range resistance above $15. Conversely, a failure to bounce strongly in the next week or two could trigger a capitulative selling event that breaks support and drops the stock into a deeper correction.

The Bottom Line

AMD has settled at the midpoint of a six-month trading range, while its larger rival has broken out to an all-time high. That wake-up call offers a golden opportunity to attract sponsorship lost during six months of corrective action and generate a trend advance that could reach the lower $20s. (For additional reading, check out: Why AMD’s Stock Is Not Worth $20.)

 

Published at Mon, 18 Sep 2017 13:29:00 +0000

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Your Money: Raising money for an emergency raises money questions

 

Your Money: Raising money for an emergency raises money questions

NEW YORK (Reuters) – When Lori Jung set up a crowdfunding campaign to help with her brother’s medical expenses for spinal cord damage, she also spoke to an accountant.

She needed advice on issues ranging from the tax implications of fundraising to managing tens of thousands of dollars in potential donations. Even after the consultation, which took place within days of her brother’s injury jumping off a pontoon boat, she was left with a list of questions.

Jung was wise to start her research early. Money matters often get shunted aside in deference to the emergency at hand when well-meaning people launch campaigns through online crowdfunding sites like GoFundMe.com or YouCaring.com.

Here are five ways to avoid big problems:

1. Pick the right beneficiary

“If I open up an account for you and raise $30,000, and give it to you, then I’ve given you a $30,000 gift,” said Morris Armstrong, an enrolled agent tax accountant and registered investment adviser in Cheshire, Connecticut.

An individual who gives a gift over $14,000 has to file a gift tax form with the IRS.

Also key: do not to offer anything in return for donations, said Armstrong. Offering a t-shirt or hat to boost donations may be great marketing, but suddenly you are in the business of selling merchandise, because you are not a registered charity.

Jung’s family linked the online campaign directly to Brian’s bank account, so that the 36-year-old was the beneficiary. Any donations are considered gifts to him and will not trigger income taxes, although he will have to pay tax on the interest.

2. Set a financial target

Emergencies do not always come with a definite price tag.

Briana Garcia, a 36-year-old from Stoneham, Massachusetts, did not know what her exact costs would be when she needed a stem-cell transplant in 2014. When her insurance denied coverage of the $125,000 procedure, she decided she needed to raise money online.

Garcia set her fundraising target at $40,000 once she negotiated to have the procedure covered. The rest went toward airfare, hotels and food for a month while she was getting ready for the operation.

If Garcia needs more help down the road, she plans to launch an update and refresh her campaign.

3. Beware of fees and fine print

Most crowdfunding platforms charge 5 to 10 percent site fee on top of a processing fee. For every $25 of the $40,000 she raised, Garcia said she got about $22, using GoFundMe.com.

YouCaring.com, however, does not take a cut of each donation, and instead relies on voluntary tips. It charges a processing fee of 2.9 percent, plus 30 cents per transaction.

Some sites will not release your funds unless you meet certain targets. Others may cut you off midway for some ill-defined violation of terms, said Michael Lai, CEO of the consumer advocacy site sitejabber.com. One of the biggest complaints Lai sees is against platforms that never turn over the funds at all.

To combat this, Lai recommends only choosing a platform where funds are directly deposited. Pick from among the more well-rated platforms, which you can discern via research on sites like sitejabber.com.

4. Be transparent with your donors

Garcia posted updates to her campaign page telling people when she was flying and how things were going.

“You want them to feel like they are helping and you are not scamming them,” she said.

YouCaring.com encourages people to post messages, photos and even videos. It helps to be specific about the purpose of the funds.

“It’s valuable to see a sense of purpose, that they are not raising money in a nebulous way,” said Dan Saper, CEO of YouCaring.com.

5. Safeguard your money

Lindsay McGrath, a 36-year-old librarian from Boston, raised about $65,000 via YouCaring.com to pay for an experimental cancer treatment in London. She did the first round in August.

In the meantime, she wants to know what to do with the funds in the bank, which she is keeping in a separate account. All of her expenditures – such as airfare and childcare – are mapped on a spreadsheet.

McGrath’s next step? Solicit some free financial advice through the network she has already established through her crowdfunding campaign.

Her plan is to sock away $25,000 in an investment that is safe, but liquid. She does not want to take any chances with her lifeline.

“I need to be extra-conservative with this money,” McGrath said.

Editing by Lauren Young and Andrew Hay

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Wed, 13 Sep 2017 13:01:41 +0000

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Nordstrom may reinvent itself — away from Wall Street

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America's top retailers in trouble
America’s top retailers in trouble

Nordstrom may reinvent itself — away from Wall Street

  @mattmegan5

Nordstrom has a bold new idea for how to reinvent itself: a store with personal stylists and booze, but no merchandise.

The unusual store concept, called Nordstrom Local, is already unnerving Wall Street, which tends to focus on the short-term.Nordstrom shares fell on Monday after the struggling retailer detailed the new store, slated to open next month.

Soon, Nordstrom may not have to worry about Wall Street.

The Nordstrom family is nearing a deal to team up with private-equity firm Leonard Green to bring the company private, sources told CNBC. That news allowed Nordstrom(JWN) shares to rebound on Wednesday when they climbed 6%.

Nordstrom and the family both declined to comment.

The Nordstrom family, which controls nearly one-third of the retailer, announced in June it’s exploring a go-private deal.

Going private could give Nordstrom the freedom to try more out-of-the-box ideas to reshape its business as traditional brick-and-mortar retailers like Macy’s(M) and JCPenney(JCP)continue to flounder.

Earlier this month, Gap(GPS) announced plans to close about 200 underperforming Gap and Banana Republic stores.

The industry has been slammed by the one-two punch of customers flocking to online shopping from the likes of Amazon and fast fashion from Zara, H&M and others.

It’s “likely” Nordstrom secures a buyout because the company is on “solid footing despite the difficult retail backdrop,” Oliver Chen, a retail analyst for Cowen & Co., wrote in a research report. He predicted a deal in the low $50-range is possible. Nordstrom stock hit nearly $48 on Wednesday.

Related: Billionaire warns about stock market bubble

That’s why Nordstrom is experimenting with a new store concept that would be vastly smaller than its current locations. Nordstrom Local, set to open next month in West Hollywood, California, will feature services like free personal stylists, alterations, manicures, food, wine and espressos.

But unlike traditional stores, the Nordstrom location won’t have any dedicated inventory. Instead, personal stylists will transfer merchandise for customers from other stores. Items can be hand-delivered to a customer’s car through curbside pickup.

Chen, the Cowen & Co. analyst, praised the Nordstrom Local idea as a “bold and exciting attempt” to address dramatic changes in shopping.

“The future is about recreating a store experience that back-solves for what customers want and need,” Chen wrote.

Other retailers have experimented with stores without inventory, including men’s clothing company Bonobos, which was acquired this year by Walmart(WMT).

Of course, going private is hardly a guarantee of success, especially because it would involve saddling a struggling company with extra debt. Payless ShoeSource and Gymboree filed for bankruptcy this year after private-equity firms failed to resurrect their businesses.

James Coulter, founding partner at private-equity firm TPG, believes retailers need to adapt very quickly to a landscape profoundly altered by e-commerce and fast fashion.

“Retail isn’t going away,” Coulter said on Tuesday from the CNBC Institutional Investor Delivering Alpha Conference.

Coulter, whose firm took J. Crew private in 2010, compared it with how traditional airlines had to adapt to discount airlines.

“Everyone thought it was the death of the airline business when Southwest showed up,” Coulter said.

 

Published at Wed, 13 Sep 2017 16:11:00 +0000

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Nordstrom buyout; Apple aftermath; Toshiba’s sale

 

Nordstrom buyout; Apple aftermath; Toshiba’s sale

  @AlannaPetroff

premarket stocks trading futures
Click chart for in-depth premarket data.

1. Nordstrom sale: Shares in Nordstrom(JWN) were surging by about 10% premarket following reports that the company could soon be taken private.

CNBC, citing unnamed sources, said that private equity firm Leonard Green & Partners could partner with the Nordstrom family on a buyout.

The Nordstrom family owns more than 30% of the retailer’s shares. Leonard Green & Partners would reportedly provide roughly $1 billion in equity to help finance the deal.

This comes as the retailer experiments with smaller stores and specialized customer services in an effort to compete with online outlets, including Amazon(AMZN, Tech30).

2. Apple aftermath: Investors will continue to focus on Apple(AAPL, Tech30) after the company unveiled its new iPhone X, iPhone 8 and iPhone 8 Plus on Tuesday.

Shares dipped a tad following the announcement. Futures suggested the stock could drop further when trading starts Wednesday.

The big question: Will consumers pay nearly $1,000 for a phone?

3. Toshiba deals with Bain: Beleaguered tech giant Toshiba(TOSYY) has signed a memorandum of understanding to negotiate a deal to sell its business unit — Toshiba Memory Corporation — to Bain Capital.

Bain Capital is working with a larger consortium on the deal.

Toshiba is trying to recover from billions of dollars in losses stemming from the collapse of Westinghouse Electric, its now bankrupt U.S. nuclear unit.

Before the Bell newsletter: Key market news. In your inbox. Subscribe now!

4. Global market overview: Global stock markets are looking soft following two days of strong gains.

U.S. stock futures were dipping a bit, alongside many European markets.

Asian markets ended the day with mixed results.

The Dow Jones industrial average, S&P 500 and Nasdaq all gained 0.3% on Tuesday.

5. Earnings and economics:Cracker Barrel(CBRL) will announce earnings before the open on Wednesday.

New data shows the U.K. unemployment rate dropped to 4.3% in the second quarter, its lowest level in more than 40 years.

It’s not all good news: Prices are rising at a faster rate than British wages, meaning workers are feeling poorer.

Download CNN MoneyStream for up-to-the-minute market data and news

6. Coming this week:

Thursday — Bank of England rate decision
Friday — Samsung(SSNLF) releases Galaxy Note 8

 

Published at Wed, 13 Sep 2017 09:25:12 +0000

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Sell GE, Earnings Won’t Matter: Deutsche Bank

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Sell GE, Earnings Won’t Matter: Deutsche Bank

By Shoshanna Delventhal | September 12, 2017 — 10:09 PM EDT

As Boston-based multinational industrial conglomerate General Electric Co. (GE) struggles to revamp its business, instating a new CEO after facing pressure from activist investors who lost patience with its turnaround, one team of analysts on the Street has joined the growing number of bears now doubting whether the company can even manage to maintain its praised dividend payout. (See also: The Future of General Electric: The Red or Blue Pill?)

Analysts at Deutsche Bank issued a downbeat research note on GE this week, cutting their price target from $26 to a “Street low” of $21, well ahead of the company’s earnings, slated for October. Deutsche Bank’s John Inch wrote to clients that “2017 results would no longer appear to matter as much.” Given the new CEO’s pending review, including the “assumed earnings reset lower coupled with an updated strategic playbook,” the analyst expects the next two quarters to have less share price significance, given that the expected results of the upcoming review are “likely to dominate investor sentiment.”

Diminished Dividends?

As the review is scheduled after the upcoming earnings report in November, Deutsche Bank anticipates “substantial subsequent charges and potential portfolio re-classifications” that will overshadow fourth-quarter results and make them difficult to compare and analyze. As a result, although it may seem that many are focused on anticipating the absolute level of the 2018 EPS reset, the investment bank expects the outlook, and “investor conviction” to be the main drivers of GE’s future share price.

“For a variety of reasons, including GE’s large size and complexity hurdles, a scenario of rapid growth in the foreseeable future seems off the table,” concluded Inch, who also doubts that GE’s dividend will remain intact. “Cash pressures, challenged business outlooks and substantial pension underfunding could still result in a dividend cut,” wrote the analyst. “While GE could continue to sell off businesses and other assets to raise capital, eventually this source of funding should run out.”

Trading up 0.2% on Tuesday afternoon at $23.76, GE stock reflects an approximate 25% decline year-to-date (YTD), versus the SP 500’s 11.4% gain over the same period. (See also: GE Tanks, Fundamentals ‘Worse Than We Think’: JPM.)

 

Published at Wed, 13 Sep 2017 02:09:00 +0000

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Whole Foods Foot Traffic Up 25% After Amazon Deal

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Whole Foods Foot Traffic Up 25% After Amazon Deal

By Donna Fuscaldo | September 11, 2017 — 7:13 PM EDT

Amazon.com Inc.’s (AMZN) acquisition of Whole Foods Market has already resulted in an increase in foot traffic to the tune of a 25% rise since closing the deal on Aug. 24.

Foursquare Labs, the location intelligence technology company, complied location data during the first two days after Amazon became the owner of the organic food supermarket chain and found that price cuts lured more shoppers to the stores. The data, which is analyzed anonymously, was compared to the same time frame a week earlier, reported Bloomberg. The 25% uptick is good news for the e-commerce giant, which is trying to transform how we shop in physical stores. While a portion of that increased foot traffic could be more about curiosity than eating healthier, the lower prices are also likely helping. (See also: How Amazon Benefits From Lower Prices at Whole Foods.)

Price and Value

When the Seattle-based online retailing giant announced the closing of the deal, it revealed plans to slash prices for popular products at Whole Foods. It is also planning to expand its Amazon Prime rewards program to Whole Foods customers and is establishing lockers for e-commerce deliveries at the retail chain. Prices for popular Whole Foods products, such as organic salmon, baby kale and bananas, were lowered on day one and expectations are high that more of the same is coming. According to Bloomberg, price cuts were as high as 43% on a range of items on the first day under Amazon.

“We are determined to make healthy and organic food affordable for everyone,” said Jeff Wilkes, CEO of worldwide consumer at Amazon, in statement at the time. A strategy consultant who worked at Amazon earlier said that prices for popular products could go down by as much as 25%. (See also: Amazon Announces Lower Prices for Whole Foods Products.)

An uptick in foot traffic this early on is seen as a confirmation that Amazon can successfully operate physical stores. Foursquare found foot traffic was up 35% in Chicago, reported Bloomberg. What remains to be seen, however, is if shoppers will continue to purchase organic food from the chain. “A lot of people went to see what they could see,” said Jennifer Bartashus, an analyst at Bloomberg Intelligence, in the report. “The question is if they think the prices are low enough to change their shopping behavior—it takes a very long time to change a consumer’s perception of prices and value.”

 

Published at Mon, 11 Sep 2017 23:13:00 +0000

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Goldman: Hurricane and Economic Data

 

Goldman: Hurricane and Economic Data

by Bill McBride on 9/10/2017 09:32:00 AM

A few excerpts from a research note by Goldman Sachs economist Spencer Hill: Hurricane Handbook: Natural Disasters and Economic Data

• We find that major natural disasters are associated with a temporary slowdown in most major growth indicators. … Modeling these effects, we estimate that hurricane-related disruptions could reduce 3Q GDP growth by as much as 1 percentage point. We believe the main channels for these GDP effects are consumption, inventories, housing, and the energy sector.

• We expect a meaningful drag on key growth indicators over the next two months, including a temporary drag on September payrolls growth of 20k—or as much as 100k if severe storm effects persist into next week (the payrolls reference period). We also expect a near-term boost to headline inflation (around 0.2pp on the yoy rate) due to higher gasoline prices …

• Given potentially sizeable growth effects from Harvey—and with Irma risks now moving to center stage—we are lowering our Q3 GDP tracking estimate by 0.8pp to +2.0%. However, we expect this weakness to reverse over the subsequent three quarters, more than recouping the lost output.
emphasis added

CR Note: We’ve already seen a sharp increase in unemployment claims (as expected), and a drop in auto sales. Harvey and Irma will probably negatively impact other indicators for August and September. As Hill notes, we should see a sharp rebound later this year in many indicators.

Published at Sun, 10 Sep 2017 13:32:00 +0000

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Nuclear plants in Hurricane Irma’s path are shutting down

 

Nuclear plants in Hurricane Irma’s path are shutting down

  @CNNMoneyInvest

Florida begins to evacuate and prepare for Irma
Florida begins to evacuate and prepare for Irma

Two Florida nuclear power plants in the path of Hurricane Irma are shutting down to brace for the Category 5 storm’s devastating wind and rain.

Florida Power & Light announced on Thursday it will shut down the Turkey Point and St. Lucie nuclear plants ahead of Irma’s expected arrival this weekend. The two facilities are Florida’s only operating nuclear power plants. Both are on Florida’s Atlantic Coast, which is bracing to get hit very hard by Irma’s ferocious winds.

“This is an extremely dangerous storm,” Rob Gould, chief communications officer at Florida Power & Light, told reporters.

Gould said the nuclear sites are among the strongest in the United States and are designed to withstand heavy wind and storm surge. Turkey Point’s nuclear reactors are enclosed in six feet of steel-reinforced concrete and sit 20 feet above sea level, the Miami Herald reported. Nuclear plants also have significant redundancies that serve as back-ups to back-ups.

Turkey Point, located just south of Miami in Homestead, survived a direct hit from Hurricane Andrew in 1992. However, the facility did suffer $90 million in damage from that Category 5 storm, according to press reports.

“This storm has the potential to eclipse Hurricane Andrew,” Gould said.

Related ‘Panic buying’ sparks gas shortages in Florida

Florida Power & Light declined to give specific timing on when the nuclear plants will be shut.

The U.S. Nuclear Regulatory Commission said it expects Turkey Point to be shut down Friday evening and St. Lucie to go offline about 12 hours later, depending on the storm track.

The country has 61 operating nuclear power plants in 30 states, according to the Energy Information Administration.

Florida is also grappling with gasoline shortages caused by panic-buying from motorists in the storm’s path and lingering supply disruptions from Hurricane Harvey. At least 40% of gas stations in the Miami-Fort Lauderdale region are without fuel, according to estimates from crowdsourcing platform GasBuddy.

 

Published at Thu, 07 Sep 2017 17:25:18 +0000

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Column: Report card on aging nations gives U.S. mixed grades

 

Column: Report card on aging nations gives U.S. mixed grades

CHICAGO (Reuters) – Which nations are doing the best job adapting to their aging populations?

Japan has the healthiest seniors. Spain gets top marks for supportive relatives and friends. In Norway, income inequality among older people is the lowest in the world.

How about the United States?

A new global aging index places it among the top five nations, alongside Norway, Sweden, the Netherlands and Japan. But our performance in most of the index categories suggests much work remains.

The Hartford Index, funded by The John A. Hartford Foundation, was developed by researchers at Columbia University and the University of Southern California. Previous studies comparing retirement across nations have focused mainly on economic and financial measures. But this one takes a wide view, examining data for 30 countries in five areas: productivity and engagement, well-being, equity, cohesion and security.

The categories are important to consider – they reflect the researchers’ consensus on the factors that contribute to a successful environment for aging.

“There are many elements beyond economic measures that are important,” said Dr. John Rowe, a professor at the Columbia University school of public health who led the research team.

The United States, despite ranking in the top five, receives decidedly mixed grades. It ranks No. 1 for “productivity and engagement,” which considers labor force participation rates, effective retirement ages and time spent volunteering.

We also get good marks for strong relationships among generations. But our rankings are mediocre-to-poor in categories measuring health, financial security and income inequality.

LENS INTO THE FUTURE

The index offers a lens into the future, Rowe says, because European countries are further along the aging curve. “After World War II the U.S. had a baby boom, but western Europe had a baby bust – fertility rates fell sharply because their economies were weak while countries worked to recover from the war,” he said. As a result, Europe aged ahead of the United States.

The U.S. Census Bureau reports that the U.S. 65-and-over population will nearly double over the next three decades, from 48 million to 88 million by 2050. But worldwide, the older population will more than double, to 1.6 billion by 2050 – and the U.S. population will stay younger than in other countries. The largest share of older people will be in Japan, South Korea, Hong Kong and Taiwan in 2050, according to the bureau.

The Hartford index performance on financial security is especially worrisome. The United States ranks 19th among 30 countries in this category, which looks primarily at income of the 65-plus population. It uses a straightforward measure called poverty risk – the share of a nation’s older population below a certain income threshold. For example, if a country’s median income is $40,000, a senior with income of $20,000 would be considered impoverished.

It also assesses food security – the proportion of older people who are able to buy the food they need. Top performers were Luxembourg, the Netherlands and Spain.

The index ranks the United States 16th for well-being – an important gauge of health, not just from the perspective of longevity, but healthy life expectancy, as calculated by the average number of years a person age 65 can expect to live without disability.

“What’s important is adding life to years, not years to life,” Rowe says. “Policies that are embedded in good health-care systems on prevention and geriatrically competent care will decrease disability rates.”

Top performers in this category, along with Japan, are Switzerland, Australia, Canada, New Zealand and France.

On equity, a measure of the gaps in well-being and economic security between the haves and have-nots, the United States ranks 21st, reflecting wider U.S. income inequality compared with other countries.

The United States scores better for cohesion, which aims to measure tension across generations, and social connectedness. We rank fifth in this category, reflecting the number of people who report having relatives or friends they can count on, the percent of people who say they trust their neighbors and intergenerational wealth transfers.

Most encouraging is the U.S. performance on productivity and engagement. Our workers are staying on the job longer and finding volunteer opportunities at higher rates than in many western European nations.

We could do even better in this category. Efforts to engage older Americans for a range of volunteer efforts are gaining ground (reut.rs/2w3epzD), but need greater support.

“We may be doing better than other countries on volunteering, but we haven’t done as well as we could,” says Rowe.

Editing by Lauren Young and Dan Grebler

 

Published at Thu, 07 Sep 2017 16:35:05 +0000

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3 Reasons Apple Will Keep Beating the Market: Bernstein

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3 Reasons Apple Will Keep Beating the Market: Bernstein

By Shoshanna Delventhal | September 6, 2017 — 6:06 PM EDT

As shares of tech behemoth Apple Inc. (AAPL) surge nearly 40% in 2017 versus the S&P 500’s 10% gain over the same period, one team of analysts foresees further upside in shares ahead of the tech giant’s anticipated new product releases slated for mid-September.

“We continue to believe that Apple offers attractive risk reward,” wrote Bernstein’s Toni Sacconaghi in a research note this week. The analyst, reiterating an outperform rating on AAPL, notes that the stock multiple is still less than it was at the time of the iPhone 6 unveiling in 2015. Bernstein foresees a $999 priced iPhone 8 adding $0.70 to his fiscal 2018 earnings per share (EPS) estimate, now at $11.05. (See also: Apple iPhone 8: Leak ‘Confirms’ a Price of $999.)

What About Samsung?

“As Apple’s stock sits at all-time highs and as the highly anticipated iPhone 8 launch approaches, many investors have asked how to play AAPL from here,” wrote the analyst, highlighting three main reasons the stock could surge higher.

First, Sacconaghi suggests that the consensus’ view on average selling prices (ASPs) and units of the iPhone 8 “may still be too conservative,” while Apple’s stock has “continued to outperform in iPhone cycles that have exceeded investor expectations.” The analyst also noted that AAPL is trading “comfortably below its peak relative multiple during its last iPhone super-cycle,” in which it would trade at $186 versus $161.91 at Wednesday close. Further, Bernstein suggests that, “the potential contribution from currency and other products (HomePod, LTE Watch) may be material.”

In response to fears that consumers will shy away from the iPhone 8 in turn for cheaper options, Sacconaghi notes, “such pricing is not entirely outlandish, given Samsung’s recent launch of the Galaxy Note 8 pricing that has a starting price tag of $960.” (See also: Apple iPhone 8 Won’t Stop Market Share Loss: IDC.)

 

Published at Wed, 06 Sep 2017 22:06:00 +0000

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Prime Working-Age Population near 2007 Peak

 

Prime Working-Age Population near 2007 Peak

by Bill McBride on 9/05/2017 02:51:00 PM

The prime working age population peaked in 2007, and bottomed at the end of 2012. As of August 2017, according to the BLS, there were still fewer people in the 25 to 54 age group than in 2007.

At the beginning of this year – based on demographics – it looked like the prime working age (25 to 54) would probably hit a new peak in 2017.

However, since the end of last year, the prime working age population has declined slightly.

Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the “baby boomer” generation, the movement of younger cohorts into the prime working age is another key story. Here is a graph of the prime working age population (25 to 54 years old) from 1948 through August 2017.

Note: This is population, not work force.

Prime Working Age PopulatonClick on graph for larger image.

There was a huge surge in the prime working age population in the ’70s, ’80s and ’90s.

The prime working age labor force grew even quicker than the population in the ’70s and ’80s due to the increase in participation of women. In fact, the prime working age labor force was increasing 3%+ per year in the ’80s!

So when we compare economic growth to the ’70s, ’80, or 90’s we have to remember this difference in demographics (the ’60s saw solid economic growth as near-prime age groups increased sharply).

The good news is the prime working age group should start growing at 0.5% per year – and this should boost economic activity.

 

Published at Tue, 05 Sep 2017 18:51:00 +0000

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If world is drifting apart, it isn’t happening in economic growth: James Saft

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If world is drifting apart, it isn’t happening in economic growth: James Saft

(Reuters) – If the world becoming less economically integrated, someone is going to have to explain why growth around the world is so remarkably consistent and tightly correlated.

It isn’t just that all 45 OECD countries are growing together for the first time since 2007, but that the level of growth around the world is as similar as its been in a long time. Growth levels among the Group of 10 wealthy nations are as tightly clustered – meaning rates of growth are similar – since at least 1991, and among 21 countries, large European Union countries’ growth figures are as tightly packed as they’ve been since at least 1997.

It also isn’t that growth is particularly rapid: the IMF is forecasting 3.5 percent, an improvement on last year’s 3.1 percent and well below the kinds of figures that usually prevailed in the last century. But wherever this tide is coming from, it is truly lifting all boats.

That’s remarkable for a number of reasons. There has been a widespread expectation that a period of de-globalization in which the world became less tightly knit would be part of the bitter fruit of the great financial crisis.

That idea is partly borne out by trade and financing statistics, as well as some striking political realities. The world’s most powerful man, Donald Trump, is an economic nationalist who at least talks the talk of capturing more of the pie rather than growing it through greater integration. At the same time, Britain, one of the principal leaders, for good or ill, of globalization over the past several hundred years is in the process of ham-handedly attempting to work out its divorce from the European Union.

Yet here we are, despite disparate demographic pressures and slowly rising U.S. interest rates, with virtually the entire planet in synchrony.

“The key theme in the financial world is the remarkably synchronous economic recovery across different regions and sectors, with muted inflationary pressures: not only are most parts of the world growing, but the dispersion in economic performances is remarkably low, compared to history,” Stephen Jen of hedge fund SLJ Capital wrote to clients.

Jen argues that this is in part the result of China’s new eminence.

“For the first time since China became big enough to be considered the ‘second sun in our solar system,’ its growth has been in synch with that of the U.S. If both the U.S. and China enjoy strong expansions, it would be difficult for any economy not to enjoy the growth beta,” he writes.

ANOTHER GREAT MODERATION?

One of the supposedly discredited theories popular before the financial crisis was the idea of the “Great Moderation,” a new predictability in U.S. economic growth supposedly produced by better fiscal and monetary management. While the global economy did erupt violently in the last decade, a 2014 research piece from the Federal Reserve concluded that low economic volatility would become the norm, punctuated by periods of high volatility. (here)

It may be that the coordinated growth globally is the result of the relative uniformity of supportive monetary policies put into place and more or less maintained since the crisis. On that view it is possible that a change of gears by one important central bank or another might upset things, perhaps if the Fed actually carries through with normalizing interest rates.

It is also possible that synchronized monetary policy is supporting growth even as the process of de-globalization gathers steam. De-globalization isn’t just the result of destructive populist urges; part of the argument was that individual nations needed better control over the financial systems, which they backstopped with their taxes, but which were highly inter-related.

There is good evidence that globalization is slowing, if not reversing. Global trade is forecast to grow about 2.4 percent this year, well below overall economic growth. Between 1950 and 2008, global trade grew at three times the rate of the global economy, reflecting the post-war expansion and the eventual integration of China and the Soviet bloc.

Cross-border claims among banks, another good indicator of economic globalization, have oscillated at around zero percent growth for much of the post-crisis period, a stark contrast to their previous robust expansion.

Can the great moderation in globally synchronized growth last? For a time, yes, but as with the great moderation in the United States, volatility may in the end have been suppressed, and not extinguished, by policy.

(James Saft is a Reuters columnist. The opinions expressed are his own)

Editing by Dan Grebler

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Tue, 05 Sep 2017 23:23:56 +0000

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3 Gold Miners With Low-Risk Buy Patterns

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3 Gold Miners With Low-Risk Buy Patterns

By Alan Farley | September 5, 2017 — 11:25 AM EDT

Gold and gold miners are gaining ground in reaction to the North Korean crisis as well as the continued failure of world economies to generate significant inflation, despite U.S. interest rate hikes. These tailwinds are likely to continue into 2018, underpinning recovery rallies that could eventually reach two- or three-year highs. Fortunately, the upside is developing at a relatively slow pace, giving late-to-the-party bulls plenty of time to get on board.

The gold mining sector has carved dozens of low-risk buy patterns in recent weeks, offering a broad array of short-term trading choices. At the same time, the Vaneck Vectors Junior Gold Miners ETF (GDXJ) has lifted above the 200-day exponential moving average (EMA) for the first time since April, highlighting rapid improvement at the low end of the capitalization spectrum. As a result, buying the fund or a basket of low-priced components with room to run could offer the strongest returns. (See also: GDXJ: Market Vectors Junior Gold Miners ETF.)

Eldorado Gold Corporation (EGO) stock topped out just above $20 in 2010 and tested that level one year later, ahead of a steep decline that ended in the first quarter of 2016 when it found support at a 13-year low under $2.00. It rallied above $5.00 in the second quarter and stalled out, building a small double top and breaking down in a decline that undercut the 2016 low in August. Committed buyers then emerged, triggering a 2B buying signal that denotes the failure of bears to defend a new resistance level.

The stock has been grinding higher in the past five weeks, while the monthly stochastics oscillator remains stuck at the most extreme oversold level since 2013. It will take little additional upside to flip the indicator into a buying cycle that supports continued gains into the $3.00 to $3.50 resistance zone. Market players may wish to withhold long exposure until the bounce clears the top of the unfilled July 31 gap at $2.23. (For more, see: Do Gold Miners Need to Look to Emerging Markets for Growth?)

Yamana Gold Inc. (AUY) shares topped out at $19.93 in 2008 and sold off to $3.31 during the economic collapse. The stock returned to resistance in 2012 and completed a double top, ahead of a severe decline that continued into the January 2016 13-year low at $1.38. The subsequent recovery wave stalled at a 21-month high in the third quarter, giving way to a slow-motion pullback that may have ended at the .786 Fibonacci sell-off retracement level in July 2017.

A bounce into September broke a six-month trendline​ of lower highs, improving the bearish technical tone while generating a test at the 200-day EMA. A breakout above that level would mark important progress that generates the next wave of buying signals, in turn favoring upside into the 2017 high at $3.65. Meanwhile, the monthly stochastics oscillator has now lifted into its first buying cycle since September 2016, predicting another six to nine months of relative strength. (See also: Yamana Gold to Spin Off Brio Gold Subsidiary.)

B2 Gold Corp. (BTG)came public on the U.S. exchanges at $1.25 in 2010 and lifted in a steady uptrend that ran out of gas near $4.50 in 2011. It built a two-year triple top at that level and broke down, entering a volatile downtrend that posted an all-time low at 60 cents in January 2016. The subsequent bounce displayed excellent relative strength into the third quarter, lifting the stock within one point of the 2012 high.

It then eased into a symmetrical triangle pattern that is still in force nearly 13 months later. A rally above $3.65 is needed to clear resistance, while selling waves need to hold range support near $2.20. The stock is now trading 60 cents or so above that level, offering a low-risk entry that could generate a sizable profit before a breakout that tests 2012 resistance. On-balance volume (OBV) has held close to the multi-year high throughout the consolidation, offering a stiff tailwind for an eventual uptrend. (For more, see: B2Gold Stock Upgraded at Dundee Capital.)

The Bottom Line

Junior gold miner stocks are ticking higher, with geopolitical tensions and weak inflation underpinning strong buy bids. These lower-priced issues may offer superior returns in this scenario, posting the next rally legs in long-term recovery waves. (For additional reading, check out: Strike Gold With Junior Mining.)

 

Published at Tue, 05 Sep 2017 15:25:00 +0000

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Which Are the Top Jobs of 2017?

 

Which Are the Top Jobs of 2017?

By Tim Parker | Updated September 4, 2017 — 6:00 AM EDT

If you’re starting out in your career – or wondering if your current field is a dead end – it’s worth knowing where the job market is going and what the top jobs of 2017 are. That’s where Glassdoor can help. The career website helps you find open jobs, and it has just released its “50 Best Jobs in America for 2017” report.

What Are the Top Jobs of 2017?

Glassdoor compile its list from three key metrics: how many job openings there are, how well the position pays, and whether or not people like it. For a job to make the list, Glassdoor must have received 100 salary reports and 100 job satisfaction ratings from U.S. employees over the past year. If your dream job of professional elephant dresser (yes, that’s a real job) isn’t there, Glassdoor probably didn’t receive enough salary reports to include it. Here are the top 20 jobs on Glassdoor’s list:

  1. Data Scientist, Base Salary $110,000 Yes, it pays well, but in the survey workers in this field were the most satisfied with their job. You probably know that computers (and humans) produce a lot of data, and somebody has to organize and analyze it. Enter the data scientist.
  2. DevOps Engineer, Base Salary $110,000 DevOps engineers can do any number of IT-related tasks, but often the job includes coding and communication and collaboration with others on a development team.
  3. Data Engineer, Base Salary $106,000 Data engineers prepare the data for analysis by the data scientists.
  4. Tax Manager, Base Salary $110,000 Tax managers manage the reporting of a company’s taxes to authorities.
  5. Analytics Manager, Base Salary $112,000 Before data makes it into a database, it has to be collected. Analytics managers create strategies for creating accurate, usable data.
  6. HR Manager, Base Salary $85,000 – Somebody has to keep all of the employees in line. A human resources (HR) manager often handles employee benefits, “onboarding” (bringing new employees up to speed), and other items related to employment.
  7. Database Administrator, Base Salary $93,000 The data that companies (and humans) produce is stored in a database. The administrator makes sure it is secure, accurate and easy to work with.
  8. Strategy Manager, Base Salary $130,000 When the boss dreams, somebody has to make those dreams a reality. Enter the strategy manager.
  9. UX Designer, Base Salary $92,500 Think about your favorite app for a minute and how much you enjoy interacting with it. A UX (user experience) designer, often with the help of a UI (user interface) designer, made that happen.
  10. Solutions Architect, Base Salary $125,000 A solutions architect is responsible for developing IT systems to solve certain problems.
  11. Marketing Manager, Base Salary $90,000A product or service is only as good as its ability to create demand. Marketing managers work with marketing teams to create campaigns to promote a product or service.
  12. Occupational Therapist, Base Salary $72,000 Want to help others? Occupational therapists help people do the things they want to do when something is holding them back. They might help kids with disabilities or people recovering from injuries.
  13. Audit Manager, Base Salary $98,000 Audit managers help companies stay compliant with applicable laws and regulations.
  14. Electrical Engineer, Base Salary $78,000 Do you like designing new electrical products? This is your dream job.
  15. Nurse Practitioner, Base Salary $100,000 According to nurse.org, a nurse practitioner has additional responsibilities for administering patient care beyond those of registered nurses. They can prescribe medication, diagnose illnesses and provide treatment.
  16. Software Engineer, Base Salary $101,000 Software engineer was the job with the most openings in the top 20 jobs ranked, according to the report. If you like writing computer code, this is your perfect job.
  17. Corporate Recruiter, Base Salary $60,000 Corporate recruiters match outstanding candidates with jobs in a certain company. They could be freelance or work for a company.
  18. Supply Chain Manager, Base Salary $100,000 Manufacturing involves a lot of pieces and parts, and often those come from around the world. Supply chain managers make sure all of the components work together to produce the product.
  19. Finance Manager, Base Salary $116,000 Finance managers are responsible for the financial health of a company. They produce reports, create long-term financial goals and more.
  20. Mechanical Engineer, Base Salary $76,000 Mechanical engineers combine disciplines such as physics, engineering and others to create, manufacture and maintain mechanical systems.

The Bottom Line

You can find 30 additional jobs on the 2017 report. If one of these fields is a good match for your skills and interests, there’s good news: You’re probably going to be happy with your salary, and, more important, you’re going to enjoy the work. (For more, see The 10 Highest-Paying Jobs in AmericaandThe Most Valuable Career Skills in 2016.)

 

Published at Mon, 04 Sep 2017 10:00:00 +0000

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Gasoline spikes to $2/gallon, crude slips as Harvey wreaks havoc on refiners

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Gasoline spikes to $2/gallon, crude slips as Harvey wreaks havoc on refiners

SINGAPORE (Reuters) – Gasoline prices hit $2 a gallon for the first time since 2015 on Thursday as flooding from tropical storm Harvey knocked out almost a quarter of U.S. refineries, while crude oil prices fell again on the resulting drop in demand.

Harvey has battered the U.S. Gulf coast since last Friday, ripping through Texas and Louisiana at the heart of the U.S. petroleum industry. At least 4.4 million barrels per day (bpd) of refining capacity was offline, or almost a quarter of total U.S. capacity, based on company reports and Reuters estimates.

Fearing a gasoline supply squeeze, U.S. gasoline prices on Thursday jumped to $2 per gallon for the first time since July 2015.

Crude prices, by contrast, fell as the closure of so many U.S. refineries led to a slump in demand for the most important feedstock for the petroleum industry.

U.S. West Texas Intermediate (WTI) crude futures were trading at $45.91 per barrel at 0212 GMT, down 5 cents, or 0.1 percent, from their last close. International Brent crude was down 8 cents, or 0.2 percent, at $50.78 a barrel.

“The flooding from Hurricane Harvey shut the largest refinery in the U.S., pushing gasoline prices to a two-year high. In contrast, oil prices retreated,” ANZ bank said.

Goldman Sachs said it could take several months before all production could be brought back online.

“While no two natural disasters are similar, the precedent of Rita-Katrina would suggests that 10 percent of the … currently offline capacity could remain unavailable for several months,” the bank said.

Meteorologists said that Harvey could be the worst storm in U.S. history in terms of financial cost.

“The economy’s impact, by the time its total destruction is completed, will approach $160 billion,” said Joel N. Myers, president and chairman of meteorological firm AccuWeather.

Other estimates have put the economic losses from Harvey at under $100 billion.

And although Harvey keeps getting weaker, meteorologists say more floods are expected.

The National Hurricane Center (NHC) said in its latest update that flooding and heavy rain continued in eastern Texas and western Louisiana.

AccuWeather also said that “the worst flooding from Harvey is yet to come as rivers and bayous continue to rise in Texas with additional levees at risk for breaches and failures.”

Beyond Harvey, U.S. commercial crude oil stocks fell by 5.39 million barrels last week, to 457.77 million barrels, according to data released Wednesday by the U.S. Energy Information Administration.

That’s 14.5 percent down from record levels reached last March, and it is below 2016 levels.

This came on the back of record U.S. gasoline demand of 9.846 million bpd last week, and as U.S. refining utilization rates rose to 96.6 percent, the highest percentage since August of 2015.

However, the data was collected before Hurricane Harvey hit the Gulf Coast.

Reporting by Henning Gloystein; Editing by Richard Pullin

 

Published at Thu, 31 Aug 2017 02:18:06 +0000

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Apple Suppliers Catch Bid After Analog Devices Results

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Apple Suppliers Catch Bid After Analog Devices Results

By Alan Farley | August 30, 2017 — 11:52 AM EDT

Shares of Apple Inc. (AAPL) supplier Analog Devices, Inc. (ADI) gained more than 5% in the first hour of Wednesday’s session after the company beat fiscal third quarter profit and revenue estimates while raising fourth quarter guidance. The bullish results should generate a steady tailwind for the broad swath of companies that make iPhone components, especially with the iPhone 8 set for release in September or October.

These symbiotic issues have underperformed their benefactor throughout 2017, with the biggest names trading well below their 2017 highs while Apple stock grinds out a series of all-time highs. This laggard behavior suggests that product lines outside the iPhone universe have weighed on results, which makes sense given the highly commoditized nature of the semiconductor business. (For a refresher, see: The Industry Handbook: The Semiconductor Industry.)

Analog Devices stock topped out at $103 in 2000 and entered a multi-year downtrend that finally bottomed out in the mid-teens in 2008. The stock returned to resistance at the 2004 swing high just above $50 in 2013 and broke out one year later, making steady progress into the May 2017 high at $90.49. It then reversed on heavy volume and sold off in a rounded correction that tested 200-day support for nearly three months.

The post-news reaction has broken the trendline of lower highs in place since June 2017 and reached the 50% sell-off retracement level above $83. The rally wave is likely to stall between that level and the .618 retracement at $85, giving way to a broader basing pattern before it tackles the multi-year high in the low $90s. Meanwhile, pullbacks to new trendline support in the $80 to $81 price zone should now offer low-risk buying opportunities. (See also: Analog Devices Beat Earnings and Revenues in Q3.)

Cirrus Logic, Inc. (CRUS) shares posted an all-time high at $61.13 in 1995 and entered a persistent decline that ground out lower lows into the October 2002 all-time low at $1.47. The stock lagged badly during the mid-decade bull market, struggling in the lower third of its multi-year trading range, and posted a higher low during the 2008 economic collapse. The stock finally completed a 100% round trip into the prior century’s high in January 2017.

Cirrus Logic stock broke out in April, hitting an all-time high at $71.97 in June before turning sharply lower, dropping into new support in the low $60s. An early August plunge completed a failed breakout that reached a five-month low last week, while this week’s news has completed a three-week basing pattern. This reversal should support a relief rally into new resistance, which is likely to deny bulls into the fourth quarter. iPhone hype at that time could then yield an even stronger recovery wave. (For more, see: 2 Suppliers Dependent on Apple for a Majority of Revenue.)

Skyworks Solutions, Inc. (SWKS) shares stalled at $78.25 in 2000 following a multi-year uptrend and sold off to $2.89 in 2002. The stock underperformed throughout the mid-decade bull market and tested the multi-year low in 2009, grinding out a long-term double bottom reversal. The subsequent uptick reached the prior decade’s high in February 2015, giving way to a second quarter breakout to an all-time high at $112.88, followed by a rounded correction that found support in the upper $50s in 2016.

Sellers took control after a steady recovery wave reached 2015 resistance in June 2017, dumping the stock to a three-month low, ahead of consolidative price action between June’s high and low. The stock struggled at the 50-day exponential moving average (EMA) into this week’s news and has turned higher but not broken key resistance now centered at $103.50. As a result, interested market players should keep their powder dry, focusing on today’s other entries or stalking this chart until price action sets off buying signals with a breakout toward $105. (See also: Chip Stocks Not Finished Yet, More Room to Run.)

The Bottom Line

Apple suppliers are gaining ground this week after Analog Devices reported surprisingly strong quarterly results while raising forward guidance. This bullish price action could mark the start of a long-term rally for the group, with many components set to hit new highs in the triple digits. (For additional reading, check out: Top 5 Semiconductor ETFs.)

 

Published at Wed, 30 Aug 2017 15:52:00 +0000

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