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Watch out OPEC, U.S. could break oil production record of 1970

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US is the world's second largest emitter of CO2
US is the world’s second largest emitter of CO2

Watch out OPEC, U.S. could break oil production record of 1970

  @mattmegan5

The U.S. shale oil boom is recovering from the crash faster than almost anyone imagined, OPEC included.

OPEC’s decision in late 2014 to pump oil at high levels launched a devastating price war. It sent oil prices to 13-year lows, dealing a big blow to the shale revolution. Dozens of American producers fell into bankruptcy and countless oil workers lost jobs.

But more recently, OPEC has retreated by putting a lid to its production. Crude prices have stabilized, and shale is coming back stronger than before. Oil companies are discovering that they can pump oil profitably from shale hotbeds, especially the Permian Basin of West Texas, profitably at even today’s prices of $50 a barrel.

Now, some believe that the U.S. could soon be pumping more oil than ever, potentially deepening the oil glut that OPEC has so far failed to fix.

Rystad Energy is predicting that before the end of this year, monthly U.S. oil production will top the record of 10 million barrels per day that was set in November 1970.

“We call U.S. production the anti-fragile: Something that once shocked comes back stronger and more efficient than ever,” said Michael Tran, director of energy strategy at RBC Capital Markets.

“OPEC grossly underestimated the ability of U.S. production,” he said.

The shale revolution has reshaped the global energy landscape, vaulting the U.S. to the upper echelon of oil producers behind only Russia and Saudi Arabia.

U.S. oil output shot up from just 4.7 million barrels per day in October 2008 to a peak of 9.6 million in April 2015. All of that U.S. crude caused a global glut. OPEC responded in late 2014 by launching a price war aimed at regaining market share by drowning high-cost producers like shale in cheap oil.

us oil boom

But America’s oil boom didn’t slow nearly as much as feared. Domestic production dipped to a low of 8.6 million barrels in July 2016, down 10% from the peak. Since then it’s stabilized, and rebounded to 9.1 million barrels a day in March, the most recent month stats are available for.

“Based on proprietary and detailed well level data, Rystad Energy sees current U.S. production bouncing back twice as fast as it dropped,” the firm wrote in a report this week.

U.S. shale ‘dominating’

Goldman Sachs agrees that the U.S. oil boom looks to be back on track.

“The pendulum between shale and OPEC has shifted wildly over the past five years…In 2017, shale is dominating growth again,” Goldman Sachs analysts wrote in a report this week.

So how high will U.S. production go? The EIA is calling for the U.S. to pump 9.74 million barrels per day in December. That would top the recent high but be just shy of the record.

Rystad Energy believes that U.S. shale will once again exceed expectations and output will reach the all-time high of 10 million barrels.

If that happened, the U.S. could surpass Saudi Arabia as the world’s No. 2 oil producer. OPEC estimates the Saudis pumped 9.95 million barrels of oil a day in April, while Russia produced 11.2 million.

‘Drill, baby, drill’

One of the keys behind the revival of U.S. shale is how much more efficient producers have become, thanks to innovation and discounts on service contracts.

Nowhere is that more true than the Permian Basin, where Goldman Sachs estimates that wells have become 50% more productive over the past two years.

Another important factor is that U.S. shale companies have locked in higher oil prices when they occur by turning to hedging contracts. More and more oil companies are using hedges to give them certainty.

“That means regardless of where prices go, it’s still drill, baby, drill,” said RBC’s Tran.

It’s possible that Rystad’s call for record U.S. oil production is too optimistic. Domestic output could be slowed by a new oil price slump. There are also infrastructure challenges in terms of transporting shale oil to refiners, some of which don’t process that type of crude.

Of course, a more moderate pace of U.S. oil output might not be the worst thing for the industry. Too much pumping could deepen the oil glut OPEC and Russia are struggling to fix by extending their production cuts until March 2018.

Published at Thu, 01 Jun 2017 16:22:23 +0000

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Exxon loses key climate change battle

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Rex Tillerson's complicated relationship with climate change
Rex Tillerson’s complicated relationship with climate change

Exxon loses key climate change battle

  @mattmegan5

ExxonMobil just lost a critical climate change battle even as the fate of the Paris accord remains in serious doubt.

In a rare defeat for a major company, over 63% of Exxon shareholders voted in favor of a proposal on Wednesday calling on the world’s biggest public oil company to do more to disclose the risk it faces from the global crackdown on carbon emissions.

The proposal asks Exxon(XOM) to stress test its assets for climate risks each year. The test would include scenarios such as declining demand for oil as a result of emerging technologies like electric cars and regulations, stemming from the Paris climate accord. The vote occurred just hours after CNN and other news outlets reported that President Trump is expected to withdraw from the Paris climate agreement.

It’s very uncommon forthese kinds of campaigns to get such a high percentage of votes, especially in the face of the kinds of intense lobbying efforts Exxon launched against this resolution. Last year, a similar proposal was backed by 38% of shareholders.

“This is an unprecedented victory for investors in the fight to ensure a smooth transition to a low carbon economy,” New York State Comptroller Thomas DiNapoli, who spearheaded the proposal, said in a statement.

The Exxon proposal is nonbinding, meaning the company is not required to follow it. But given the strong support, it will be difficult for Exxon to ignore it will likely force the company to make significant changes.

“The burden is now on ExxonMobil to respond swiftly and demonstrate that it takes shareholder concerns about climate risk seriously,” DiNapoli said.

The resolution calls on Exxon to ensure it “fully evaluates and discloses to investors risks to the viability of its assets as a result of the transition to a low carbon economy.”

After the vote, Exxon CEO Darren Woods said shareholder resolutions that received a majority of support “will be reconsidered by the board.”

Climate activists quickly seized on the Exxon vote as a sign that Big Oil is being forced to change its ways.

“Exxon’s shareholders are finally acknowledging what the company still refuses to — that the age of oil is nearly over,” Greenpeace wrote in a statement. Greenpeace launched a campaign this week attacking Exxon in Dallas ahead of its annual shareholder meeting with billboards, bumper stickers and even a blimp hovering above the city.

While Exxon rejected the need to stress test its climate risk, the oil giant did not back away from its support for the Paris deal despite reports Trump may be about to dump the climate accord.

“I stand by our position,” Woods said in response to a question from a shareholder about the White House’s deliberations.

“We think the advantage of the Paris framework is it engages and involves countries from all around the world, irrespective of their economic development,” Woods said.

The Exxon boss added that it’s a “global challenge which requires global participation.”

Published at Wed, 31 May 2017 17:46:19 +0000

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VMware to Rally 20% on Amazon Partnership: Baird

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VMware to Rally 20% on Amazon Partnership: Baird

By Shoshanna Delventhal | May 31, 2017 — 1:24 PM EDT

Network virtualization and cloud infrastructure leader VMware Inc. (VMW) got a boost from the Street this Wednesday as analysts at R.W. Baird issued a bullish note on the hybrid IT company.

Baird’s Jayson Nolan upped his rating on the cloud play to buy from neutral, highlighting growth potential from VMware’s recent cloud deals. Nolan also raised his price target on VMW to $115 from $90, reflecting a near 20% upside from Tuesday’s close.

Positive on Tech Leader’s Strategic Shift

Analysts suggest that the Palo Alto, Calif.-based company, once threatened by the swift adoption of public cloud computing and container software, has held its own and is now “thriving” in cloud deals, in which public cloud computing operators run its virtual machines in their facilities. Nolan indicated that VMware is also benefiting from a “more engaged” parent company, Dell Technologies, which bought out EMC last year in the largest tech deal to date: $67 billion.

“We are positive on VMware’s strategic shift to partner, not compete with the public cloud,” wrote the Baird analyst. “VMware is better strategically positioned now than in years, in our opinion.” In particular, Baird indicates its channel work shows “great positivity and excitement” surrounding the recent VMware and Amazon.com Inc. (AMZN) Amazon Web Services partnership.

“Naturally, a co-development between the respective leaders in private and public clouds should offer an unparalleled level of seamlessness in hybrid cloud mobility, which to date remains one of the largest challenges to enterprise cloud deployment,” wrote the analyst. (See also: VMware CEO ‘Really Excited’ About AWS Partnership.)

Analyst Highlights VMware’s Dominance

Nolan applauded the cloud infrastructure provider’s success in maintaining its “pioneering dominance over the server virtualization market,” despite “a myriad of low-cost, alternative hypervisors” introduced with the goal of “dethroning vSphere from its market leadership.” While looking forward, the analyst says Microsoft Corp.’s (MSFT) Hyper-V cannot be discounted and that Nutanix Inc.’s (NTNX) Acropolis solution is beginning to see early success, the impact will remain limited to smaller environments and VMware will continue its market leading position through at least 2020.

The upgrade comes before VMware is slated to report its most recent fiscal first-quarter report after the closing bell on Thursday. (See also: VMware Bids Farewell to vCloud Air Business.)
Published at Wed, 31 May 2017 17:24:00 +0000

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Did Apple Poach a Qualcomm Engineer to Develop Chips In-House?

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Did Apple Poach a Qualcomm Engineer to Develop Chips In-House?

By Daniel Liberto | May 31, 2017 — 6:55 AM EDT

Apple (AAPL) has poached a leading communication chip engineer from Qualcomm (QCOM), the company it is currently in a legal battle with over wireless modem royalties, prompting speculation that the iPhone-maker is keen to start developing its own in-house solutions.

Esin Terzioglu, who played an important role in helping Qualcomm become an industry leader in cellular modem chip technology, announced the move, which was first highlighted by analyst Neil Shah of Counterpoint Research, on his LinkedIn page.

“It has been my honor and privilege to have worked with so many talented and dedicated individuals at Qualcomm where we accomplished great feats as a team (10nm bring up was a doozy and the team did an amazing job bringing the first product to market!!!),” Terzioglu wrote in his post on the social networking website. “I feel privileged for the opportunity to continue my career at Apple. Stay in touch.”

What Is Apple Playing at?

Apple’s decision to hire one of Qualcomm’s leading engineers has fueled speculation that it is keen to develop wireless modem chips in-house. Qualcomm was the sole provider of cellular modems used in iPhones and iPads, until Apple fired a lawsuit against the company in January, alleging that the chip maker was charging excessive royalties for its patented products. (See also: Qualcomm Countersues Apple.)

Since then Apple has opted to use Intel’s (INTC) rival technology in some versions of the new iPhone, even though the Santa Clara-based company’s products are believed to be inferior to Qualcomm’s offerings. At the same time, Apple has reportedly been working on developing its own cellular chip, a challenging feat given the expensive and complicated nature of the technology. (See also: Qualcomm Vs. Intel In Server Chip Market.)

However, with Terzioglu now on board, Apple’s bid to stop outsourcing could now become more achievable. Raymond James (RJF) analyst Tavis McCourt believes this to be the case. In a note reported on by Barrons he said, “The data point is the latest in a list of instances suggesting that Apple has plans to develop full SoCs (system-on-a-chip) in-house for future mobile devices.” He added, “The current A series processors lack a baseband modem and Terzioglu’s move seems to suggest that Apple is acquiring the necessary expertise to develop such technology.”
Published at Wed, 31 May 2017 10:55:00 +0000

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Consumer spending jumps; monthly inflation rebounds

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Consumer spending jumps; monthly inflation rebounds

By Lucia Mutikani| WASHINGTON

U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to firming domestic demand that could allow the Federal Reserve to raise interest rates next month.

The Commerce Department said on Tuesday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.4 percent last month after an upwardly revised 0.3 percent gain in March. Households spent more on both goods and services last month.

April’s increase was the biggest since December and could ease concerns about second-quarter economic growth after weak reports on core capital goods orders, the goods trade deficit and inventory investment in April. Consumer spending was previously reported to have been unchanged in March.

U.S. stock index futures pared losses after the data while the dollar edged up against the yen. Prices of U.S. Treasuries were trading slightly higher.

Consumer spending grew at its slowest pace in more than seven years in the first quarter, helping to restrict gross domestic product growth to a 1.2 percent annual rate in the first three months of the year. GDP growth estimates for the second quarter range between a rate of 2 percent and 3 percent.

Minutes of the Fed’s May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, “most participants” believed “it would soon be appropriate” to raise borrowing costs.

The U.S. central bank hiked rates by 25 basis points in March. Expectations of further policy tightening next month are also supported by steadily rising inflation.

The personal consumption expenditures (PCE) price index rebounded 0.2 percent in April, reversing March’s 0.2 percent drop. In the 12 months through April, the PCE price index increased 1.7 percent after rising 1.9 percent in March.

Excluding food and energy, the so-called core PCE price index also bounced back 0.2 percent after dipping 0.1 percent in March. In the 12 months through April, the core PCE price index increased 1.5 percent after rising 1.6 percent in March.

The core PCE is the Fed’s preferred inflation measure. The central bank has a 2 percent target for core PCE.

But rising inflation is cutting into both consumer spending and income growth. When adjusted for inflation, so-called real consumer spending rose 0.2 percent last month after advancing 0.5 percent in March.

While personal income rose 0.4 percent last month, as wages jumped 0.7 percent, income at the disposal of households after accounting for inflation advanced 0.2 percent. Real disposable income increased 0.4 percent in March.

Savings were little changed at $759.1 billion last month.

(Reporting by Lucia Mutikani; Editing by Paul Simao.
Published at Tue, 30 May 2017 12:53:31 +0000

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Jobs report; ExxonMobil’s big meeting; Earnings season winds down

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Unemployment rate at lowest in 10 years
Unemployment rate at lowest in 10 years

Jobs report; ExxonMobil’s big meeting; Earnings season winds down

  @shannonfgupta

1. Jobs report: On Friday, the Labor Department will reveal how many jobs were added in May.

A strong report could bolster the case for another interest rate hike. The Federal Reserve has already said it will likely raise rates in June — a sign it’s confident in the economy’s health. The Fed last triggered a hike in March.

Unemployment dropped to 4.4% in April, it’s lowest level since 2007. Economists believe the U.S. economy is now at or near full employment.

2. ExxonMobil’s big meeting: Exxon will be holding its annual shareholders meeting on Wednesday.

Stock holders will likely bring up climate concerns. Exxon has called on President Trump to remain in the Paris climate deal, saying the global agreement provides an “effective framework for addressing the risks of climate change.”

The meeting comes two weeks after Exxon announced plans to open its first Mobil gas station in Mexico. The company also promised to invest $300 million in operations and marketing over the next decade.

3. Earnings season winds down: We’re almost done with first-quarter earnings, and investors hopeLululemon(LULU) will go out with a bang (or at least a sparkle).

The fitness retailer’s stock slid in March after its CEO admitted that its clothing was just, well, boring. Vera Bradley, Michael Kors and Express are also on the earnings docket.

4. Big tech conference: Media and tech leaders will descend on Recode’s annual Code Conference next week.

Hillary Clinton, Venture capitalist Marc Andreesen, Google CFO Ruth Porat and Netflix CEO Reed Hastings are among the scheduled speakers.

The conference in Los Angeles will focus on a variety of topics, including the future of digital tech and product development.

5. Coming this week:

Monday – Markets closed for Memorial Day

Tuesday – “House of Cards” season 5 premiers on Netflix(NFLX, Tech30)

Wednesday – ExxonMobil(XOM) shareholders meeting; Michael Kors(KORS), Vera Bradley(VRA) and Hewlett Packard(HPE, Tech30) earnings

Thursday – Lululemon(LULU) and Express(EXPR) earnings

Friday – Jobs report
Published at Sun, 28 May 2017 12:06:28 +0000

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Wells Fargo ups recruitment bonuses to grow brokerage ranks

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Wells Fargo ups recruitment bonuses to grow brokerage ranks

By Elizabeth Dilts

Wells Fargo & Co will offer more money in recruitment bonuses to financial advisers after competitors announced plans to pull back from recruiting, two people familiar with the matter said on Thursday.

The bank’s wealth management unit, known as Wells Fargo Advisors, will increase recruiting offers by as much as 50 percent, according to two people briefed on the changes who asked not to be named because they were not authorized to discuss them publicly.

The extra money will show up in the upfront bonus checks brokers receive when they join Wells Fargo, as well as in their deferred compensation, which is paid out after several years. The increase was first reported by The Wall Street Journal.

“Attracting the industry’s top talent will always be a priority for Wells Fargo Advisors,” said spokeswoman Emily Acquisto in a statement. “We’ve been disciplined in recruiting and it has worked for us. Adding great advisers and new clients has helped us grow in key markets.”

Wells Fargo’s move comes after three primary rivals, Morgan Stanley, Bank of America Corp and UBS AG announced they were cutting recruiting budgets.

While some of those firms, known in industry parlance as the “wirehouses,” have said they will continue selective recruiting, it has left an opening that Wells appears to be stepping into, the sources said. Wells has traditionally offered less compensation than the other three big Wall Street brokerages, so the increase puts it at or near what its competitors had offered until recently.

(Reporting by Elizabeth Dilts and Dan Freed in New York; writing by Dan Freed; Editing by Lauren Tara LaCapra and Cynthia Osterman)
Published at Thu, 25 May 2017 22:02:11 +0000

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Mark Zuckerberg supports universal basic income. What is it?

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Zuckerberg's commencement speech sounds a lot like a campaign speech
Zuckerberg’s commencement speech sounds a lot like a campaign speech

Mark Zuckerberg supports universal basic income. What is it?

  @CNNMoney

Facebook founder and CEO Mark Zuckerberg supports an idea called universal basic income.

“We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas,” Zuckerberg said at his Harvard commencement address Thursday.

So, what exactly is it?

It’s a concept that’s getting a lot of attention, especially in Silicon Valley. A country that has universal basic income guarantees every person a set minimum income regardless of criteria — age, wealth, job status, hometown, family size, etc.

That means everyone gets a paycheck, whether they have a job or not.

However, the countries actually experimenting with the concept, Canada and Finland, aren’t embracing the universal nature of it. So far, they’re only giving guaranteed income to residents who were were either recently on unemployment benefits or are low income.

Proponents say the aim is to give workers greater financial security as concerns rise about machines taking away jobs. It’s also intended to alleviate income inequality.

Critics say the idea has good intentions but it doesn’t solve bigger problems related to abysmal wage growth in recent decades. They also say it challenges the notion that you need to work to earn money.

“It’s a misguided mission,” says Lawrence Mishel, president of the Economic Policy Institute, a nonpartisan research center. “It’s a tech CEO view of the world that I think is distorted.”

Countries are experimenting with UBI in varying degrees.

Starting this year, Finland is giving out a guaranteed monthly income of nearly $600 to 2,000 citizens. The citizens were randomly selected but had to have received unemployment benefits or an income subsidy. The money they are paid isn’t taxed. It’s a two-year program that could be expanded nationwide depending on the results.

Canada’s province of Ontario, which includes Toronto, started a pilot program in April that provides 4,000 citizens with an unconditional income of about $12,600 a year. Applicants must be between ages 18 and 64 and living on a limited income.

But there are plenty of skeptics. Voters in Switzerland shot down a referendum last year to provide a basic income to citizens.

Could the US ever implement a system of universal basic income? It looks highly unlikely.

Experts argue that a UBI program and the costs associated with it could put other US safety net programs — social security, Medicaid, Medicare, Pell grants for low-income college students — at risk.

The US is also going in the opposite direction on similar programs like unemployment insurance. Some states, like Florida and North Carolina, have reduced those benefits to 13 and 12 weeks respectively, down from the typical 26 weeks paid out by most states.

Published at Fri, 26 May 2017 18:24:27 +0000

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What is Term Life Insurance

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What is ‘Term Life Insurance’

A type of life insurance with a limited coverage period. Once that period or “term” is up, it is up to the policy owner to decide whether to renew or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, which is intended to provide life-long protection.

Other characteristics of term insurance include:

  • Low cost
  • No cash value
  • Usually renewable
  • Sometimes convertible to permanent life insurance

BREAKING DOWN ‘Term Life Insurance’

Term life insurance policies provide a stated benefit upon the death of the policy owner, provided that the death occurs within a specific time period. However, the policy does not provide any returns beyond the death benefit (the amount of insurance purchased); the policy has no additional cash value, unlike permanent life insurance policies, which have a savings component, increasing the value of the policy and its eventual payout.

Because of this, term life insurance is also known as “pure life insurance”: Its only purpose is to insure individuals against the loss of life, and all premiums paid are used to cover the cost of insurance protection.

Characteristics of Term Life Insurance

Premiums for term life insurance are based on a person’s age, health and life expectancy, as determined by the insurer. If the person dies within the specified term, the insurer pays the face value of the policy; if the term expires before death, there is no payout. Policyholders may be able renew a term policy at its expiration, but their premiums will be based on their attained age.

Say, George is 30 years old and wants to protect his family in the unlikely event of his early death. He buys a $500,000 term life insurance policy that charges him $50 a month for the next 10 years. If George is suddenly struck by lightning and dies before the 10-year period is over, the policy will pay George’s wife and children $500,000 as long as he’s kept up the payments. Or, say George pays his premiums every month until he’s 40 and must then decide whether to renew. If he chooses not to, and he’s struck by lightning the day after his policy expires, his family gets nothing.

Since it is for a temporary amount of time, and it pays only a set death benefit, term life is the least expensive type of insurance to buy. A healthy 35-year old (non-smoker) can typically obtain a 20-year level-premium policy with a $250,000 face value, for between $20-$30 per month. Purchasing a comparable whole life policy (a type of permanent life insurance) would more likely cost four figures a month. Because the majority of term life policies never pay a death benefit, insurance companies can offer them much more cheaply than whole life policies (every one of which eventually pays), and still make money.

How Premiums Work

Term life insurance premiums are set based on the age, sex and health of the policyholder, as determined by a medical exam; also included factors such as driving record, medications, smoker or non-smoker status, occupation and family history.

The younger a person is when he takes out a term life policy, the cheaper his premiums. The reason is obvious: A person is statistically less likely to die between the ages of 25 and 35 than between the ages of 50 and 60. For younger ages, term coverage is inexpensive and the premium can be guaranteed not to change for up to 30 years. Once the guaranteed period ends, the policy still remains in force, but changes to a one-year renewable term. The premium is then based on your attained age and increases every year.

Interest rates, the financials of the insurance company and state regulations can also affect premiums. In general, companies often offer better rates at “break point” coverage levels of $100,000, $250,000, $500,000 and $1,000,000.

Types of Term Life Insurance

Level Term or Level-Premium: Level term life insurance provides the insured with coverage for a specified period of time; the term may be one, five, 10, 20 years or longer. The premium is calculated based on the age and health of the insured. The insurer levels out the premium payments by charging more at the beginning of the policy than mortality costs require, so the premium payments are fixed and guaranteed for the duration of coverage.

Yearly Renewable Term: A yearly renewable term (YRT) policy has no specified term and is renewable every year without evidence of insurability. The premiums on a YRT policy start off low and increase each year because they are based on the insured’s attained age. Although there is no specified term with a YRT policy, premiums can become prohibitively expensive for those at later ages, making the policy difficult to maintain.

Decreasing Term: A decreasing term policy features a death benefit that declines each year according to a predetermined schedule. The insured pays a fixed, level premium for the duration to the policy. Decreasing term policies are often used in concert with a mortgage to match the coverage with the declining principal of the loan.

Who Is Term Life Insurance Good For?

A popular time to take out a term life insurance policy, particularly one with a 20-year term, is upon having children. They are usually a good fit for younger people with families, just in case something happens to the primary earner. They are also well-suited to people who know for certain their need for life insurance coverage will be temporary — in other words, they feel their surviving family members will no longer have a need for the extra protection life insurance provides or that they will have accumulated enough liquid assets to self-insure. If you only need insurance for 10 years, then buy term.

As you move through different phases of life – buying a house, starting a family, opening a business, retirement – the amount and kind of life insurance you need also changes. When you’re young and need a lot of coverage to replace a loss of income for your dependents, term life insurance often makes the best sense (and in fact has become the default option for most insurance buyers, primarily because it is inexpensive and uncomplicated). As you accumulate assets and need coverage that will last for your lifetime, permanent life insurance may be the better option.

Term vs. Perm: Term Life Insurance Vs. Permanent Insurance

However, the right choice between permanent insurance/cash-value insurance products (whole life, universal life, etc.) and term life insurance also depends in large part on the circumstances and mindset of the policyholder.

In general, term life policies are ideal for people who want a lot of coverage but do not want to pay a lot in premiums each month. Whole life customers pay more in premiums for less coverage, but they have the security of knowing they are covered for life at a set premium, assuming they keep up with their monthly payments.

While many people strongly favor the affordability of term life – relatively low premiums for a higher death benefit – others cannot stomach the idea of paying  premiums every month for 10 or 20 years and then, assuming they are still alive (which is the most likely scenario) having nothing to show for it at the end of the term. It’s similar to people preferring to buy their homes rather than renting. They like the fact that home ownership provides tax benefits, builds equity and, at some point, they will own their houses outright. The same is true for permanent life insurance.

Not to mention the fact that term insurance premiums get more expensive as one ages: Those who choose to carry term into their later years may end up paying premiums that are commensurate with the cost of some of the newer permanent products that are now available in the marketplace. If you remain healthy, you may be able to find new coverage at a reasonable cost. However, if you have health or other issues (such as traveling to foreign countries), you may be rated (which increases the premium), or even deemed uninsurable – and stuck with the increasing annual renewable term policy.

Some customers also prefer permanent life insurance because these policies can be used as investment/savings vehicles: A portion of each premium payment is allocated toward building up cash value (one reason why it’s higher than a term policy premium), and with many types of policies, the cash value growth is guaranteed. Some plans pay dividends, which can be paid out or kept on deposit within the policy. Over time the cash value growth may be sufficient to pay the premiums on the policy, so, in essence, you own your policy outright. There are also several unique tax benefits, such as tax-deferred cash value growth and tax-free access to the cash portion.

Of course, as many financial advisers point out, the growth rate of a cash value life insurance policy is often paltry compared to other financial instruments, such as mutual funds and exchange-traded funds (ETFs); substantial fees often hinder the rate of return. Hence, the common saying “Buy term and invest the difference.”

Still, the return is steady and tax-advantaged. And many products are getting more sophisticated, too, permanent-life supporters say. Some illustrations only use traditional whole life insurance and compare the guaranteed values in those policies against the historical growth of the stock market. But newer, more competitive products, such as an equity indexed universal life policy, may be able to produce much higher returns over time.

Term vs. Perm: Other Factors to Consider

Obviously, there is no-one-size-fits-all answer to the term vs. perm debate; even generalizations are difficult. Proponents of both sides can cite numerous studies and examples based on historical performance that show why their position is the correct one. But other factors to consider include:

  • Rate of return earned on investments versus permanent policy cash value (and whether consistent investing is feasible for the client).
  • Whether these investments will be in a traditional or Roth IRA or qualified plan and whether there will be any matching contributions in employer-sponsored plans.
  • The type of term policy used and whether it has any riders, such as guaranteed renewable or return of premium.
  • Loan provisions and other features in the permanent policy.
  • When the permanent coverage becomes paid up.
  • Rate of withdrawal of assets at retirement.
  • Lifespan of the investor and spouse.
  • When Social Security will be taken.
  • Whether accelerated benefit riders are purchased and used in either type of policy.
  • Whether policyholders expect to carry a mortgage late in life.
  •  The policyholder has or intends to have a business which requires insurance coverage.
  • Whether life insurance could play a role in tax-sheltering a sizeable estate.

Convertible Term Life Insurance

To many, convertible term life insurance offers the best of both worlds. This is a term life policy which includes a conversion rider: The rider guarantees you the right to convert an in-force term policy (or one about to expire) to a permanent policy without going through underwriting or proving insurability.

The key features of the rider are: (a) you maintain the original health rating from the term policy upon conversion, even if you later have health issues or become uninsurable, and (b) you decide when and how much of the coverage to convert. The premium for the new permanent policy will be based on your age at the time of conversion. For example, say you purchase $1 million in a 20-year term policy at age 29. At age 39, you decide to convert $250,000, then convert another $250,000 at age 49, and allow the remaining $500,000 of coverage to lapse. The premium for each of the $250,000 policies would be different based on ages 39 and 49.

Of course, overall your premiums increase significantly, since whole life insurance is more expensive than term life insurance. The advantage is the guaranteed approval: You does not have to undergo a medical exam as a new customer would. Any long-term medical conditions developed during the term life period cannot be used to adjust premiums upward. Even if there haven’t been major changes in your health, insurance companies continually review underwriting standards as new technology becomes available, and you could suddenly go from a preferred to a lesser rating if you tried to buy a whole new policy.

However, if you wanted to add additional riders to the new policy (e.g., a long-term care rider), the insurance company may require you to go through underwriting again, and only offer you the new policy with additional riders at a lower health rating.

The premium for a term policy with a conversion rider may cost more, but it may be worth the small additional cost to have the option of switching to permanent coverage. The conversion rider should allow you to convert the term coverage to any permanent policy the insurance company offers with no restrictions (i.e., having to convert by a certain age during the first five to 10 years that the term policy is in force, or limiting partial or multiple conversions)
Published at Wed, 24 May 2017 21:38:00 +0000

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Google’s Waymo worth more than GM, Tesla and Uber?

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Google launches Waymo, its self-driving car company
Google launches Waymo, its self-driving car company

Google’s Waymo worth more than GM, Tesla and Uber?

  @lamonicabuzz

Self-driving cars may be the wave of the future. But analysts at Morgan Stanley think one driverless car tech company may already be worth more than all of the US auto industry’s established giants and newer competitors from Silicon Valley as well.

Morgan Stanley analyst Brian Nowak and his team of Internet analysts said in a report earlier this week that Waymo, the autonomous car company that is owned by Google parent Alphabet, could have a value of $70 billion.

To put that in perspective, Alphabet’s overall market value is about $665 billion. So Waymo would account for more than 10% of that.

What’s more, $70 billion for Waymo is higher than Detroit’s Big Three, electric car king Tesla and the most recent valuation for the world’s biggest unicorn — ridesharing giant Uber.

 

  • Fiat Chrysler(FCAU) — $16 billion

 

  • Ford(F) — $43.5 billion

 

  • GM(GM) — $50 billion

 

  • Tesla(TSLA) — $51 billion

 

  • Uber — $68 billion

The Morgan Stanley analysts said Waymo’s recent partnership with Uber rival Lyft to develop self-driving cars — or robo-taxis as some have dubbed them — is a big plus for the company.

So there is clearly a lot of hype about autonomous cars. The hope is that fewer humans actually operating vehicles will lead to a drop in accidents due to distracted drivers.

But is a $70 billion value for Waymo realistic anytime soon?

For one, competition is going to be fierce — especially with Uber. In fact, Waymo is currently suing Uber.

Waymo claims that former employee Anthony Levandowski stole proprietary technology. Levandowski left Waymo last year to start a self-driving truck company called Otto that was later bought by Uber.

The Morgan Stanley analysts conceded that Waymo is unlikely to post its first operating profit until 2022 and that operating margins will only be about 8% by 2030 — on par with what rental car companies Hertz(HTZ) and Avis Budget Group(CAR) generate now.

It’s expected that Waymo would get a sizable percentage of its revenue from technology licensing deals it strikes with other car companies. So it’s unlikely that you’ll be going to a Google dealership to buy a Waymo-branded SUV anytime soon — if ever.

Nonetheless, Morgan Stanley thinks Waymo is the most likely of Alphabet’s so-called other bets — units like Nest, fiber and healthcare division Verily that are not part of the core advertising business — to one day be spun off as a separate company.

So a cynic might naturally wonder if Morgan Stanley is trying to plant a seed in the minds of Google/Alphabet executives.

Wall Street firms like Morgan Stanley make a big chunk of their revenue from investment banking fees, which includes advisory work on initial public offerings.

And there already is a notable Alphabet-Morgan Stanley connection. Alphabet CFO Ruth Porat was the CFO of Morgan Stanley before she left New York to head to the West Coast. In theory, that gives Morgan Stanley an edge over rivals like Goldman Sachs.

A spokeswoman for Morgan Stanley said that its analysts were merely noting that a spinoff of Waymo is just one possible scenario and that no such talks between Morgan Stanley and Alphabet about any investment banking business has taken place.
Published at Wed, 24 May 2017 16:44:41 +0000

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BlackBerry Turnaround Catching Fire

by Meditations from Pixabay

BlackBerry Turnaround Catching Fire

By Alan Farley | May 24, 2017 — 12:19 PM EDT

BlackBerry Ltd. (formerly known as Research in Motion Ltd.) (BBRY) is trading at a 2-year high this week, after lifting into double digits for the first time since May 2015. A refocus on software, and licensing fees has underpinned the long overdue turnaround, following a brutal downtrend triggered by market share destruction in the wake of iPhone and Android. While revenues are unlikely to reach lofty levels posted during its smartphone reign, the newer smaller operation could pay dividends for patient shareholders.

The company beat fiscal fourth-quarter profit and revenue estimates in its March release while surprising Wall Street analysts with guidance that expects profitability and positive cash flow into 2018. Enterprise mobility management and security software divisions comprised nearly 84% of total revenues, with those units expected to drive growth in coming quarters.

BBRY Monthly Chart (1999-2017)

BBRY

The Canadian technology company listed on the U.S. exchanges in February 1999, at the height of the Dot.com bubble. It opened at $3.69 and fell sharply, dropping to an all-time low at $1.14 just one month later. A bounce into midyear caught fire, lifting the stock in a vertical rally that topped out at $29.29 in March 2000. It fell more than 80% in the next three months, victimized by the collapse in tech stocks, and bounced back into the lower teens in October.

The wild two-sided action continued into the second half of 2001 when a more persistent downtrend took control. The decline broke yearlong support near $2.59 in May 2002 and entered a climactic phase that ended 25-cents above the 1999 low in October. The subsequent bounce continued the pattern of broad price swings, returning to the 2000 high in 2004 and breaking out in 2006, setting off a final buying spree that posted an all-time high at $148.13 in June 2008.

A bear market decline into the mid-30s generated horizontal support within a multi-year double top that broke to the downside in 2011. The stock plunged into the second half of 2012, finding support near $6.20 in 2012 but selling pressure didn’t end until it posted a deeper low at $5.44 more than one year later. Price action since that time has carved a shallow basing pattern that’s triggered an aggressive reversal each time it’s lifted into double digits.

As a result, the current rally wave has now entered a critical testing phase, highlighted by a series of 2014 and 2015 highs between $11.50 and $12.50. That price zone hides a massive June 2013 gap between $14.48 and $10.98 that remains partially unfilled nearly 4-years later. Also, the 50-month EMA has dropped into that resistance level, setting up a major battle because the stock hasn’t traded above that line-in-the-sand since 2011.

BBRY Weekly Chart (2012–2017)

BBRY

A Fibonacci grid stretched over the 2013 decline brings order to the chaotic basing pattern, with the 2014 into 2015 recovery wave stalling at the 50% retracement level. The stock is now headed into that zone after lifting above the 200-week EMA for the first time since 2011. This combination suggests the upside will flame out in coming weeks, giving way to a bullish consolidation pattern or a major reversal back into single digits.

A trading range between $10 and $13 will set the stage for a secondary assault that could eventually reach the 2013 high above $18. Progress above that level will be difficult due to the massive double top breakdown and intense selling pressure in 2011. Even so, the majority of shareholders impacted by that catastrophic price action have now departed, allowing a new crowd of speculators to take advantage of the turnaround.

The Bottom Line

BlackBerry has rallied to a 2-year high in double digits and is expecting profitable results in the coming year. This positive price action should mark a long-term reversal that generates the first sustained uptrend in many years for the former smartphone giant.
Published at Wed, 24 May 2017 16:19:00 +0000

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Jewellers Vulnerable to Brick & Mortar Exodus

 

Jewellers Vulnerable to Brick & Mortar Exodus

By Alan Farley | May 22, 2017 — 12:35 PM EDT

Jewelry stores and other luxury retailers have grown more vulnerable to the exodus out of brick and mortar sales into e-commerce, as evidenced by Signet Jewelers, Ltd.’s (SIG) March shortfall, which triggered a breakdown to a 4-year low. Larger rival Tiffany and Co.’s (TIF) eased sector anxiety a few weeks after that dismal report, beating estimates while guiding higher, but also raised red flags with declining holiday sales and limp year-over-year growth.

Both companies step to the plate this week with first-quarter confessionals that are unlikely to calm nerves about market share loss to online portals. That’s especially true with bearish chatter rising after a recent expose alleged that industry leaders including Tiffany’s mark-up diamonds more than 250%. At a minimum, the allegation opens the door to Net upstarts undercutting traditional price mechanisms to steal customers.

TIF

Tiffany’s rallied above a 10-year resistance zone between $45 and $58 in 2010 and reached $84.49 in 2011, ahead of a decline that tested new support for nearly two years. It resumed its upward trajectory in 2013, grinding out a series of 2014 highs before reaching November’s all-time high at $110.60. The stock gapped down more than 14-points in January 2015 and entered a steep downtrend that continued into June 2016 when it finally held support at a 3-year low.

It turned higher in July and remounted the broken February low, setting off a 2B buying signal triggered by the failure of bears to hold a new resistance level. That technical event attracted steady interest that lifted the stock above the broken 200-day EMA after the November election. It added to gains in the first quarter of 2017, stalling at $97.29 a few weeks after earnings triggered a quick 8-point rally.

On Balance Volume (OBV) stalled in the second half of 2014 and entered an aggressive distribution wave that finally ended in June 2016. Accumulation since that time has been impressive, but price remains stuck under resistance generated by the 2015 gap and .786 Fibonacci selloff retracement. It will take a post-earnings rally above $104 to undo that technical damage while a selloff through $90 could signal a lower high within a broad topping pattern.

SIG

Signet Jewelers Ltd. topped out at $99.10 in 1990 and entered a downtrend that reached $2.54 in 1992. It rallied above $50 into the middle of the last decline and plunged during the 2008 economic collapse, posting a higher long-term low at $5.91. The stock completed a 24-year round trip into the 20th century’s high in 2014 and broke out into triple digits, reaching an all-time high at $152.27 in October 2015.

It turned sharply lower in 2016, giving up more than half its value into the October low at $72.65. A bounce into year’s end got sold aggressively at the start of 2017, generating a steady downtick that’s now reached at 4-year low in the upper-50s. Fortunately for beaten down bulls, the decline is nearing strong support at the 2013 breakout above the 2007 and 2012 highs near $50. That level could trigger a sizable bounce, regardless of company performance.

The decline since 2015 has ground out a broad descending channel with support now located in the upper-30s. Meanwhile, OBV topped out with price and rolled into a downtrend that’s continued to gather steam for the last 18-months, highlighting the exodus of institutional and retail capital worried the company has fallen prey to the persistent flight out of traditional storefronts.

The Bottom Line

Traditional jewelry stores could show heightened vulnerability to the brick and mortar exodus in first-quarter earnings reports later this week. The relatively stronger Tiffany’s has more to lose than Signet Jewelers, which has hit highly oversold readings since dropping into a string of multi-year lows.

 
Published at Mon, 22 May 2017 16:35:00 +0000

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Boeing signs defense, commercial deals with Saudi Arabia

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Boeing signs defense, commercial deals with Saudi Arabia

By Alexander Cornwell| DUBAI

Boeing Co has signed several defense and commercial deals with Saudi Arabia including for the sale of military and passenger aircraft, the company said on Sunday during a visit by U.S. President Donald Trump to the kingdom.

Boeing said Saudi Arabia agreed to buy Chinook helicopters, associated support services and guided weapons systems, and intends to purchase P-8 surveillance aircraft.

The U.S State Department in December announced plans to sell Saudi Arabia CH-47F Chinook cargo helicopters and related equipment, training and support worth $3.51 billion. Congress was informed last year that a sale to Saudi Arabia would involve 48 of the helicopters.

Saudi Arabia is seeking closer defense and commercial ties with the United States under Trump, as it seeks to develop its economy beyond oil and leads a coalition that is fighting a war in Yemen. Saudi Arabia is seeking to end Iran-allied Houthi control over most of Yemen’s main population centers and restore its internationally recognized government to power.

The total value of the deals was not disclosed in a statement announcing the agreements.

The Boeing announcement is the latest in business deals worth tens of billions of dollars signed between U.S. and Saudi companies since Trump arrived in Riyadh on Saturday.

“These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the United States, helping to create or sustain thousands of jobs in our two countries,” said Boeing Chief Executive Officer Dennis Muilenburg.

Boeing also said it would negotiate the sale of up to 16 widebody airplanes to Saudi Gulf Airlines, which is based in the country’s east in Dammam.

A sale to the privately owned commercial airline is expected to include Boeing 777 and or 787 aircraft, according to a person familiar with the matter. Saudi Gulf, which started operations last year, could not be reached immediately for comment.

Boeing also will establish a joint venture with Saudi Arabia to provide “sustainment services for a wide range of military platforms,” the statement said, including non-Boeing supplied equipment. A separate joint venture would “provide support for both military and commercial helicopters.”

The Saudi Rotorcraft Support Center recently received its commercial certificate and is expected to start operations in the near future. The center is a joint venture with Alsalam Aerospace Industries, Saudi Aerospace Engineering Industries and Boeing.

(Reporting by Alexander Cornwell Editing by Gary McWilliams and Jeffrey Benkoe)
Published at Sun, 21 May 2017 18:46:28 +0000

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Softbank-Saudi tech fund becomes world’s biggest with $93 billion of capital

by stephen4 from Pixabay

Softbank-Saudi tech fund becomes world’s biggest with $93 billion of capital

By Andrew Torchia| RIYADH

The world’s largest private equity fund, backed by Japan’s Softbank Group and Saudi Arabia’s main sovereign wealth fund, said on Saturday it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

“The next stage of the Information Revolution is under way, and building the businesses that will make this possible will require unprecedented large-scale, long-term investment,” the Softbank Vision Fund said in a statement.

Japanese billionaire Masayoshi Son, chairman of Softbank, a telecommunications and tech investment group, revealed plans for the fund last October and since then it has obtained commitments from some of the world’s most deep-pocketed investors.

In addition to Softbank and Saudi Arabia’s Public Investment Fund (PIF), the new fund’s investors include Abu Dhabi’s Mubadala Investment, which has committed $15 billion, Apple Inc, Qualcomm, Taiwan’s Foxconn Technology and Japan’s Sharp Corp.

The new fund made its announcement during the visit of President Donald Trump to Riyadh and the signing of tens of billions of dollars worth of business deals between U.S. and Saudi companies. Son was also in Riyadh on Saturday.

After meeting with Trump last December, Son pledged $50 billion of investment in the United States that would create 50,000 jobs, a promise Trump claimed was a direct result of his election win.

The fund may also serve the interests of Saudi Arabia by helping Riyadh obtain access to foreign technology. The Saudi economy has been severely damaged by low oil prices, and policymakers are trying to diversify into new industries.

The PIF signaled an interest in the tech sector last year by investing $3.5 billion in U.S. ride-hailing firm Uber. Saturday’s statement did not say how much the PIF had committed to the fund, but previously it has said it would invest up to $45 billion over five years. Softbank is investing $28 billion.

The new fund said it would seek to buy minority and majority interests in both private and public companies, from emerging businesses to established, multi-billion-dollar firms. It expects to obtain preferred access to long-term investment opportunities worth $100 million or more.

Other sectors in which the fund may invest include mobile computing, communications infrastructure, computational biology, consumer internet businesses and financial technology.

The fund aims for $100 billion of committed capital and expects to complete its money-raising in six months, it added.

 

(Reporting by Andrew Torchia; Editing by Dale Hudson)
Published at Sun, 21 May 2017 15:02:09 +0000

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Wells Fargo suffers slump in muni bond underwriting

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Wells Fargo suffers slump in muni bond underwriting

By Karen Pierog and Robin Respaut| CHICAGO/SAN FRANCISCO

Wells Fargo & Co is paying a price in the U.S. municipal bond market for the bogus customer accounts scandal that hit the bank last year and led to bans by some cities and states, an analysis of Thomson Reuters data shows.

So far in 2017, Wells Fargo is in sixth place among senior underwriters of municipal bonds with 85 deals totaling nearly $8.13 billion, according to the data. During the same period in 2016, the bank ranked fourth with 134 issues totaling $12.74 billion.

In September, Wells Fargo agreed to pay a $190 million settlement over its staff opening as many as 2 million accounts without customers’ knowledge.

California, along with Massachusetts, Chicago, and Ohio, suspended Wells Fargo last fall from pricing their negotiated bond sales due to the scandal.

Municipal issuers typically sell their debt either by hiring underwriters to price their bonds or by setting a date and time for underwriters to bid on the debt, and then choose the lowest bid.

Wells Fargo’s ranking for negotiated deals slid to eighth place between Jan. 1 and May 17 from fourth place during the same period in 2016. The bank was the bookrunning underwriter on 45 deals totaling $5.2 billion so far this year, compared to 79 deals totaling $9.25 billion in 2016.

The bank’s ranking drop for winning competitively bid issues was not as steep, falling to fifth place with 40 deals totaling $2.92 billion so far this year from third place with 55 deals totaling $3.48 billion last year.

“Public Finance is an important business for Wells Fargo with many opportunities for growth,” Philip Smith, head of government and institutional banking at Wells Fargo, said in a statement to Reuters.

“We are continuing to invest in the business. Despite current political challenges affecting league tables, our strong relationships and diversified municipal business model have us growing (revenue) 15 percent year over year,” Smith said.

 

CALIFORNIA DEAL

California sanctioned Wells Fargo over the accounts scandal last year. In April, however, it beat out eight other banks to win a $635 million competitive deal in the state with a 2.811 percent interest rate, according to the California Treasurer’s Office.

“We had no choice,” said California State Treasurer spokesman Marc Lifsher. California law requires the state to award competitive sales of general obligation bonds to the bidder with the lowest interest cost, Lifsher said.

He added that the state plans to review the sanctions this fall, but as of Monday, the bank was “still in our dog house.”

“We’re continuing to pressure them to show us that they’ve cleaned up their act,” Lifsher said.

(Refiles to fix typographical error in headline)

(Reporting By Karen Pierog in Chicago and Robin Respaut in San Francisco; Editing by Daniel Bases and Tom Brown)
Published at Fri, 19 May 2017 21:21:47 +0000

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Snap Worst Case Off the Table After Bounce

Snap Worst Case Off the Table After Bounce

By Alan Farley | May 18, 2017 — 12:20 PM EDT

Snap, Inc. (SNAP) (formerly know as Snapchat) shocked shareholders last week after missing top and bottom line estimates in its first release as a publically traded company. More importantly, the newly-minted tech giant reported an unexpected deceleration in daily average users, a key metric for social media engagement. Not surprisingly, the bearish news triggered a fierce reaction, dropping the stock 21.5% to an all-time low at $17.59.

Fortunately for bulls, the worst-case scenario has come off the table with constructive price action since that ugly session, buoyed by reports that hedge funds used the decline to increase their long positions. Of course, it takes more than dip buyers to build a sustained uptrend after a technical breakdown, but recent developments mark a good first step toward a longer-term recovery.

SNAP Daily Chart (March-May 2017)

SNAP

The stock came public at $24 (red line) on March 2, holding up well in its first trading day and then posting an all-time high at $29.44 in the following session. Aggressive sellers then took control in a wide range decline that broke the IPO opening print on day four. That marked a significant technical event because the level signifies major support on pullbacks and major resistance on bounces.

Selling pressure eased in the upper teens nearly two weeks later, giving way to a healthy bounce that stalled at new resistance at the opening print, ahead of a dull contracting pattern that settled near $23 ahead of last week’s earnings release. The bad news triggered a 5-point down gap trapping all shareholders in losing positions because it immediately posted an all-time low at $17.59.

However, the decline ended that ugly session relatively close to the day’s opening print and traded higher the following morning, setting the stage for a recovery wave that stalled earlier this week. The bounce ended at the green trend line of rising lows broken after earnings, signaling new resistance just above $20, ahead of a minor pullback during the broad mid-week selloff.

A Fibonacci grid stretched across 2-month price action highlights major technical levels but could be deceptive because we don’t know if last week’s low will mark the final swing low. The IPO placement at the 50% retracement could be instructive, with three failed bounces at that level giving order to the scattering of price bars. It also suggests that a breakout above $24 will set off major buying signals that predict a quick rally into the historic high near $30.

SNAP 60-Minute Chart (April 24–May 18)

SNAP

The May 10 release triggered a vertical decline that started within a few cents of resistance at the IPO print and carried more than 6-points. It bottomed out in the first hour on May 11 ahead of a recovery wave that stalled at the 50% retracement and alignment between the 50- and 200-bar EMAs. Two subsequent tests at that resistance level failed to yield a breakout, but price action has been constructive, holding close to that level rather than yielding to lower prices.

The stock has also been glued to round number 20 during options expiration week, which may be generating support that vanishes once this monthly exercise is over on Monday May 22. Mark that date on your calendar because price action out of the gate could signal short-term direction, with a breakout that heads into the .618 Fibonacci retracement level at $21.50 or rolls over into a test at the downtrend low in the upper teens.

The Bottom Line

Snap is trading above $20 after hitting an all-time low at $17.59 after last week’s poorly received earnings report. A rollover at this level needs to hold in the vicinity of the March low at $18.90 to build a secondary recovery wave that fills the big gap and bring resistance at $24 into play.
Published at Thu, 18 May 2017 16:20:00 +0000

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HPE Unveils Largest Single Memory Computing System

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HPE Unveils Largest Single Memory Computing System

By Shoshanna Delventhal | May 16, 2017 — 6:38 PM EDT

Palo Alto, Calif-based enterprise IT giant Hewlett Packard Enterprise Co. (HPE) continues on its mission to become a leader in the next-gen tech space with the hybrid cloud and computing at the core of its business.

In 2015, HPE split from its PC and printing arm HP Inc. (HPQ), wherein after Chief Executive Officer (CEO) Meg Whitman helped transition the company away from software and enterprise services to core hardware sales and new investments. (See also: Analysts See ‘Real Muscle’ in HPE, Arista Alliance.)

Debut of ‘The Machine’

On Tuesday, HPE released its latest product designed for “the age of big data,” a new computer that holds a massive 160 terabytes. For reference, one terabyte equals 1,000 gigabytes, with the latest iPhone 7 Plus containing just 3 gigabytes of random-access memory. The prototype reportedly has enough memory to store and work with every book in the Library of Congress five times over.

The prototype computer is part of HPE’s new memory-driven computing project called “The Machine,” intended to rethink how computers work. By using a new kind of memory, HPE expects to be able to build a machine which can hold up to 4,096 yottabytes, large enough to store 250,000 times all the data currently stored around the globe.

Edging Aside Intel, Microsoft

“With the exploding growth in data, computer architectures are hitting a wall with how to deal with all that data,” said HPE’s Chief Technology Officer (CTO) Mark Potter.

As part of the new project, HPE is dropped its long-standing partnership with Microsoft Corp. (MSFT) and building a new operating system based on Linux to run the computer. The firm will also employ ARM chips as the computer’s main processor instead of Intel Corp. (INTC) chips.

Closing up about 0.6% on Tuesday at a price of $19.11 per share, HPE stock reflects an approximate 61.6% gain over the 12-month period and a 10.2% increase year-to-date (YTD). (See also: HPE Lowers Outlook After Completion of Spinoff.)
Published at Tue, 16 May 2017 22:38:00 +0000

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This big retailer isn’t getting Amazon-ed

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Is the mall dead?
Is the mall dead?

This big retailer isn’t getting Amazon-ed

  @lamonicabuzz

It looks like most builders aren’t buying plywood, concrete, bricks and other construction supplies from Amazon. Or even Walmart. They are doing so at Home Depot — and that’s why it is a bright spot in an otherwise gloomy time for traditional retailers.

Home Depot reported earnings and revenues that topped Wall Street’s forecasts Tuesday. The company also raised its profit outlook for the year. And it reported a same-store sales increase (stores open at least a year) of 5.5% overall and 6% in the US.

Home Depot(HD) stock rose 2% in early trading to a new all-time high. The stock is now up nearly 20% this year, making it one of the top performers in the Dow this year — along with Apple(AAPL, Tech30), McDonald’s(MCD) and Visa(V).

Home Depot is benefiting from a strong housing market. So is its rival Lowe’s(LOW), which will report its latest results on May 24. Shares of Lowe’s are up 20% this year as well.

During a conference call with analysts Tuesday, Home Depot chief financial officer Carol Tomé said that the housing market continues to grow despite mixed forecasts for the overall economy.

Housing prices have been steadily on the rise, which motivates prospective sellers to do home improvement projects to maximize the sale price for their house.

Home Depot isn’t ignoring the digital opportunities that have helped Amazon and Walmart either. Quite the contrary. Home Depot CEO Craig Menear said during the conference call that online sales rose 23% in the most recent quarter.

But it clearly helps that both Home Depot and Lowe’s are specialty stores that sell things that many people still want to buy at physical locations, especially professional builders and contractors.

Menear added during the call that sales to its “Pro” customer segment continue to outpace that of average DIY customers looking to fix a broken closet door or leaky faucet.

Still, Home Depot remains one of the exceptions in an otherwise dismal environment for many retailers.

Teen apparel retailer Rue21 announced Tuesday it was filing for bankruptcy protection, joining a long and growing list of retailers that have been forced to go the Chapter 11 route, such as Aeropostale, Wet Seal, Pacific Sunwear and The Sports Authority.

Abercrombie & Fitch(ANF), once one of the hottest apparel chains for young adults, is looking to sell itself to a buyer as its sales continue to fall.

Department stores Macy’s(M), Sears(SHLD), JCPenney(JCP), Kohl’s(KSS) and Nordstrom(JWN) have been struggling to compete with Amazon and Walmart as well.

And two other retailers reported weak sales and gave sluggish outlooks on Tuesday — T.J. Maxx and Marshalls owner TJX(TJX) and Dick’s Sporting Goods(DKS). Shares of TJX fell 4% on the news while Dick’s stock plunged 12%.

That makes the gains for Home Depot on Tuesday all the more impressive. The company’s signature color is orange. But perhaps Home should change that to green instead. It’s one of the few traditional retailers not in the red lately, after all.
Published at Tue, 16 May 2017 14:55:25 +0000

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Nasdaq launches machine intelligence-enhanced data service

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Nasdaq launches machine intelligence-enhanced data service

By John McCrank| NEW YORK

Nasdaq Inc (NDAQ.O) on Tuesday launched a service to help fund managers and quantitative traders better use data from social media, central bank announcements, retail sentiment and other sources to improve trading profits.

The Nasdaq Analytics Hub will use machine intelligence, a subset of artificial intelligence, to derive signals from end-of-day data that market participants can use to enhance investing strategies, the exchange operator said.

The data from Nasdaq and third party providers are vigorously vetted with the help of financial technology startup Lucena Research, Mike O’Rourke, global head of machine intelligence and data services at Nasdaq, said in an interview.

“We back test the data using a number of strategies and then we use machine intelligence to add value-added analytics to the data that allows firms to make it more actionable.”

The exchange operator said it would add new data sets and sources, as well as new insights and analytics, on a continual basis.

(Reporting by John McCrank; Editing by Richard Chang)
Published at Tue, 16 May 2017 21:12:10 +0000

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Hackers Demand Bitcoin Ransom for Stolen Disney Movie

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Hackers Demand Bitcoin Ransom for Stolen Disney Movie

By Daniel Liberto | May 16, 2017 — 6:35 AM EDT

Hackers claim to have access to a new Walt Disney movie (DIS) and are threatening to release it, should the film studio refuse to pay them a huge bitcoin ransom, according to The Hollywood Reporter.

Speaking at a town hall meeting with ABC employees in New York, Disney’s CEO Bob Iger confirmed that the company is working with federal investigators to deal with the threat. Iger didn’t disclose the name of the film, nor the amount the hackers are seeking, but did state that the responsible party plans to release the first five minutes of the movie, followed by 20 minute segments, if Disney refuses to meet their demands. Iger added that Disney has no intention to pay the ransom. (See also: Disney (DIS) Tops Q2 Earnings, Sales Lag, ESPN Woes Linger.)

The studio aims to release two big films this summer: Pirates of the Caribbean: Dead Men Tell No Tales and Cars 3. Deadline.com reports that the upcoming Pirates of the Caribbean film is the one being held at ransom.

News that a major movie picture has been stolen came just one week after rumors circulated online that Disney’s Star Wars: The Last Jedi was in the hands of ransom-seeking hackers. The rumors were later confirmed to be false. (See also: Disney Shareholder Meeting Gets Political.)

Cyber Criminals Target Hollywood

Hollywood has become a prime target for cyber-criminals. Last month, hackers stole the entire fifth season of Orange is the New Black and then uploaded the 10 episodes on Pirate Bay six weeks ahead of the official June 9 launch date after Netflix (NFLX) refused to pay a ransom.

Moreover, back in 2014, hackers, dubbed the “Guardians of Peace”, demanded that Sony Pictures (SNE) cancel its distribution of The Interview, a comedy movie based on a plot to assassinate North Korea’s leader, Kim Jong-un. The studio responded by cancelling the film’s formal premiere and mainstream release after the the cyber-criminals threatened to launch terrorist attacks on U.S. cinemas showing the movie.

Several Hollywood agencies, including UTA, ICM and WME, have also reportedly been targeted by hackers.
Published at Tue, 16 May 2017 10:35:00 +0000

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