All posts in "Business"

US insurers get inside cars, mouths, grocery carts in profit search

by stevepb from Pixabay

US insurers get inside cars, mouths, grocery carts in profit search

By Suzanne Barlyn

Twice a day, Scott Ozawa’s Bluetooth-enabled toothbrush tells his dental insurer if he brushed for a full two minutes. In return, the 41-year-old software engineer gets free brush heads and the employer which bought his insurance gets premium discounts.

The scheme, devised by Beam Technologies Inc, is just one of the latest uses of technology by insurers hungry for more real-time information on their customers that they say lets them assess risk more accurately and set rates accordingly.

In theory, everybody wins, as policyholders adopt better habits and insurance companies save money on claims.

However, there are concerns that insurers will eventually use the data they get to cherry-pick the best and most profitable customers, while hiking rates or even denying coverage to people who choose not to participate.

“It’s not expected today, but in the near future it will be used to penalize people,” said Mitchell Wein at Novarica Inc, who advises clients on insurance technology.

Insurers are still in the data collection stage, said Wein, but he predicts that in about five years, tracking tools will have a direct impact on pricing and coverage on a range of policies.

Insurers recognize the dangers but consumers have nothing to fear, according to Michael Barry, a spokesman for the Insurance Information Institute, an industry-funded communications group.

“Insurance is such a heavily regulated industry that insurers must justify, in actuarial terms, the reason for any rate increase they’re seeking in almost any line of business,” he said.

Moreover, the insurance marketplace is competitive. “If any insurer raises rates to the point where a consumer is dissatisfied, the consumer can go elsewhere,” he added.



Beam’s technology follows auto insurers using devices in cars to find out how far and how safely policyholders drive – known as telematics – and life and health insurers giving customers wearable devices such as Fitbit and Apple Watch to keep track of their activity.

U.S. insurers and their customers have generally been slow to adopt new monitoring techniques, which have been common in auto insurance in South Africa, Italy, Brazil and Britain for years.

But the world’s biggest insurance market, with $1.3 trillion in premiums in 2015 – more than a quarter of the global total – is catching up.

Mayfield, Ohio-based Progressive Corp (PGR.N), an early leader in the area, said its telematics-based ‘Snapshot’ auto policy allows it to “attract, identify and reward good drivers while also retaining those customers longer.” Progressive has more than 2 million Snapshot policies in force, about a fifth of its total U.S. auto business.

About 30 percent of North American auto insurers now have telematics programs, according to a survey last year by insurance consultants Strategy Meets Action (SMA). That will rise to 70 percent by 2020, SMA said.

In health insurance, health insurer Anthem Inc (ANTM.N) has been working since 2013 with Fitbit Inc (FIT.N) and Garmin Ltd (GRMN.O) to offer premium discounts to eligible customers who wear the devices and transmit information to the insurer.

In life insurance, John Hancock Financial started offering a policy in 2015 that gives customers discounts on healthy groceries when shopping at certain retailers and rewards for hitting exercise targets as measured by a wearable device.

The program, designed in partnership with Vitality Group, includes a free Fitbit or an Apple Watch for as little as $25 if a customer hits their targets.

“We get to know you better than your doctor does,” said Brooks Tingle, head of insurance marketing for John Hancock, owned by Canada’s Manulife Financial Corp (MFC.TO).



Insurers generally do not disclose data on premiums or profit on specific types of policies, so it is hard to tell what effect such approaches have had on their bottom lines, or whether riskier customers are being asked to pay more.

However, people in the industry agree that increased data from technology means insurers can target more desirable customers.

The benefit for insurers is “competitive advantage, pure and simple,” said Katie DeGraaf, a senior consultant at insurance advisory firm Willis Towers Watson, in a recent report. “Companies that have integrated granular telematics data into rating plans are better positioned to attract and retain the most profitable customers.”

Much of the pioneering work in the area has taken place in South Africa, which suffers chronic high crime and accident rates.

Johannesburg-based financial services firm Discovery Ltd (DSYJ.J), whose car insurance unit has been tracking customers’ driving and using the information in pricing since 2011, said it has seen a 10 percent drop in accident claims since then.

Discovery’s ratio of losses to premiums for drivers in the tracking scheme is more than a quarter lower than those not participating, the company said. Data has also upended a longstanding rule of thumb in the insurance industry that younger drivers are the riskiest.

“The whole beauty is that someone who might be seen to be a bad risk can turn out to be a good risk,” said Anton Ossip, CEO of Discovery Insure, the company’s auto insurer.

The new approach has “substantially improved the quality of new business and our ability to attract and select high-quality clients,” Discovery Insure said in its latest financial report.

Still, Ossip is concerned about consumers who do not want to use the telematics devices to relay data: “Generally, someone who chooses not to use it is a worse risk,” he said.



Insurers interviewed by Reuters said better data collection allows them to underwrite risk better, and customers tend to take better care of themselves when confronted with numbers.

They described participation in data-tracking programs as voluntary, and said they are transparent about what information they collect and confident about data security.

Some of that might be changing, however. Root Insurance Co, a Columbus, Ohio-based startup, immediately uses the information it gathers and only insures what it believes are good drivers.

Root’s smartphone app tracks car movements for two weeks before offering eligible customers a quote, according to CEO Alexander Timm. An algorithm assesses risk using factors such as tailgating, fast turns and texting.

Using data to segment risks in such a way is only set to spread.

“Pricing will change,” said Anand Rao, a principal at consultancy PwC who focuses on analytics and uses of artificial intelligence in business. “Not everyone will change their behavior, which will start translating into different pricing and different types of products.”

Some industry-watchers worry that approach will fundamentally change how the insurance business works. But for now, consumers do not seem too concerned.

“There are a lot of pieces of information that companies are tracking about you anyway,” said Ozawa, referring to Facebook Inc (FB.O) and other social media.

While Ozawa no longer works for the company that introduced him to Beam, he expects the impact will be long-lasting. The two-minute requirement has motivated his kids to do more than a simple “swish-swish” when they brush, he said.


(Reporting by Suzanne Barlyn; Editing by Lauren LaCapra and Bill Rigby)
Published at Sun, 15 Jan 2017 12:00:00 +0000

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Wells Fargo is closing over 400 bank branches


Wells Fargo is closing over 400 bank branches


The vast Wells Fargo branch network is shrinking.

Wells Fargo announced plans on Friday to shut down more than 400 bank branches by the end of 2018. That’s on top of the 84 locations it pulled the plug on in 2016.

The acceleration of branch closures at Wells Fargo is a reflection of Americans’ preference for online and mobile banking these days. Unlike Wells Fargo, its chief rivals Bank of America (BAC) and JPMorgan Chase (JPM) have been a lot more aggressive in shutting branches in recent years.

Wells Fargo (WFC) said the new branch closures haven’t been fueled by the bank’s fake account scandal.

However, Wall Street analysts do see a link. Not only does Wells Fargo face rising legal and compliance costs to clean up the mess, but its branches aren’t likely to be the profit engines they once were.

Wells Fargo has eliminated the unrealistic sales goals that led to the bad behavior and its account openings have declined dramatically in recent months.

UBS analyst Saul Martinez wrote in a report published Friday that he had long expected the “scandal was likely to be a catalyst for a more aggressive focus on expenses.”

wells fargo branch closures


No matter the cause, Wells Fargo isn’t signaling widespread layoffs of bankers, tellers and other branch employees. The bank said that many of the 200 closures it anticipates this year will be in close proximity to other locations it owns and many of the employees can be transferred to nearby branches.

In 2018, Wells Fargo plans to shut down “slightly” more than 200 branches. It’s part of a broader Wells Fargo plan to save about $2 billion a year by the end of next year.

Tim Sloan, who took over after long-time CEO John Stumpf abruptly stepped down last year, said the moves are in response to shifting consumer behavior.

“They still want to come into our branches,” Sloan said, “but they’re also accessing us online, on mobile, through ATMs and over the phone.”

In many ways, Wells Fargo has only just begun to catch up with the trend of big banks closing branches.

Even after accounting for this year’s closures, Wells Fargo still has more than 6,000 branches across 39 states. To put that into context, Wells Fargo has about 1,000 branches more than any other bank in America, according to research by CSLA.

Since 2012, Wells Fargo’s branch count has declined by just 2%. By comparison, CSLA recently estimated that Chase’s branch network has shrunk by 9% and Bank of America’s by 15%.

shrinking bank branches


That’s why some on Wall Street are pushing Wells Fargo to close even more branches.

Mike Mayo, a bank analyst at CSLA, told CNNMoney last fall that he believes Wells Fargo will need to ultimately close 1,000 branches.

Mayo even argued that Wells Fargo’s massive branch network may have helped fuel the scandal. He said the need to justify the costly branches “could have contributed to pressure on staff to sell more.”

Sloan explained on Friday that the pace of branch closures may fluctuate based on how customers respond. “We may increase, or we may decrease, who knows,” he said.

There’s reason to believe Wells Fargo has room for deeper cuts.

A UBS analysis found that more than 40% of Wells Fargo branches lie within a five-minute drive of another Wells Fargo branch. UBS said that’s among the highest “cannibalization” ratios of any of the big banks, even though Wells Fargo doesn’t have as big of an urban presence as other lenders.

UBS’s Martinez said homeownership and income metrics also suggest Wells Fargo’s “footprint does not have especially attractive demographics that would justify a more concentrated branch network.”

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DEFINITION of ‘Doxing’

The means by which a person’s true identity is intentionally exposed online. Doxing is a method by which hackers obtain quasi-identifiers or personally identifiable information of individuals or businesses. The data obtained is then broadcast over the internet without the victim’s permission. Although doxing is normally attributed to cyber-hacking, journalists led by a cause or trying to make a broader point might also partake of this activity.

Doxing is also spelt ‘Doxxing’ and is short for document (docs) dropping.


As the popularity of social media forums gain traction and big data obtained from the forums by companies are shared across sectors and industries, cyber hackers can steal important information about an entity and sell it in underground marketplaces or distribute it online. The latter process is known as Doxing.

Doxing involves the purposeful act of seeking out a person’s identity and revealing it to the public without the individual’s consent. The practice is usually carried out for malicious intent, for fun, or in a vigilante effort to reveal the identity of an infamous person. Ashley Madison, an online dating site for people interested in extramarital affairs, was the target of a doxing act in 2015. The anonymous group responsible for hacking the users’ data questioned the morals of the online company and requested that the website be shut down. When this request was not honored by Ashley Madison, the hacking group made public over 30 million Ashley Madison users’ data including their email addresses, names, credit card details, mailing addresses, phone numbers and sexual preferences. Malicious spectators who got hold of the publicly available information went on a blackmailing spree to extort the victims of money in return for not sharing the information any further.

Michael Brutsch had his identity doxed in 2012 when a Gawker writer exposed him online. Brutsch was a popular Reddit user known for making inappropriate posts and comments on issues of child pornography and incest. The public revelation of his identity lost him his job but the public perception to his exposure was two-fold. While some applauded the bravery of the Gawker writer, others scrutinized the vigilante doxing act and found it meddling on anonymity.

A doxxer can acquire information about people from multiple sources. One source is through underground marketplaces. As data becomes an increasingly valuable commodity on digital platforms, cyber hackers and identity thieves are inventing new ways to access the data. The data stolen can then be sold through underground websites that operate with private and anonymized networks like Tor Network. A doxxer who buys the data from such marketplaces can then publicize the information on the internet. Data can also be obtained through legitimate sources online. If a doxxer can get quasi-identifiers such as postal code, race, sex, date of birth, etc. and effectively piece these identifiers together, she or he will be able to personally identify the individual bearing the identifiers. This could also be seen as a de-anonymizing technique whereby pieces of information from separate anonymized data sets are matched together to identify an entity.

Internet users have to be mindful of what sites they visit and ensure the sites have rigorous security checks in place before providing important data. Although online businesses strive to anonymize the profiles of their users using stringent security techniques, the ability of hackers and doxxers to de-anonymize data is proof that all online activities leave a trail.
Published at Sat, 14 Jan 2017 22:45:00 +0000

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‘Star Wars’ makers vow not to digitally recreate Carrie Fisher


By Steve Gorman

The studio behind the “Star Wars” movie franchise said on Friday is has no plans to digitally recreate film performances of the late actress Carrie Fisher, best known for her role as Princess Leia, in upcoming installments of the blockbuster series.

Speculation had mounted since Fisher died unexpectedly last month, at age 60, that filmmakers might use new advances in computer graphics technology to resurrect digital images of the actress in forthcoming chapters of the “Star Wars” film epic.

Such technology was notably utilized in the newly released “Rogue One: A Star Wars Story,” in which a digital embodiment of British actor Peter Cushing, who died in 1994, returned for the role of the Grand Moff Tarkin that he first played in the original 1977 “Star Wars” adventure.

The Walt Disney Co-owned Lucasfilm, producers of the “Star Wars” franchise, posted a statement online putting to rest the notion that Fisher’s image would likewise be recreated.

“We want to assure our fans that Lucasfilm has no plans to digitally recreate Carrie Fisher’s performance as Princess or General Leia Organa,” the studio said.

“Carrie Fisher was, is and always will be part of the Lucasfilm family,” the statement added. “She was our princess, our general and more importantly, our friend. We are still hurting from her loss. We cherish her memory and legacy as Princess Leia, and will always strive to honor everything she gave to ‘Star Wars.'”

Fisher appeared in four of the “Star Wars” films, beginning with the original 1977 movie and its two sequels, playing the intrepid Princess Leia as a young actress.

She returned in Disney’s 2015 reboot of the franchise, the “The Force Awakens,” appearing as the more matronly General Leia Organa, leader of the Resistance movement fighting the evil First Order.

She had already filmed her role for the upcoming untitled sequel to that film – “Episode VIII” – which is due for release in 2017, and had been expected to reappear in “Episode IX” out in 2019.

The statement by Lucasfilm on Friday left in question whether her character would be written out of that film or another actress would be hired to play the Leia role.

Fisher died following a heart attack she suffered during a flight to Los Angeles from London, where she had been shooting the third season of the British sitcom “Catastrophe.”


(Additional reporting by Piya Sinha-Roy; Editing by Mary Milliken)
Published at Sat, 14 Jan 2017 03:37:50 +0000

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The Current State of the Solar Energy Industry


The Current State of the Solar Energy Industry

By Shoshanna Delventhal | January 13, 2017 — 6:28 PM EST

Over the recent decade, long-term investors have grown interested in solar energy stocks, as the alternative energy segment is projected to become the world’s largest source of energy by 2050.

As the global economy shifts away from fossil fuels and other polluting energy, solar has taken the lead ahead of a surge of new alternative industries such wind and hydrogen systems. While many may bundle solar companies under one umbrella, the solar segment itself is comprised of companies of different sizes, offering a large variety of products and services.

Different Kinds of Solar

Two competitive solar technologies on the market include photovoltaic (PV or light) and thermal (heat) solar power. In terms of pricing, some firms offer higher quality more-efficient rigid solar panels while others specialize in cheaper, less-efficient thin-film collectors. While some firms sell solar through distributed channels, other use centralized outlets such as large solar farms or fields for utility. Other firms on the supply chain come into play as well, such as the manufacturers of the batteries that store solar energy when the sun is down.

A Cheap Long-Term Pick?

A short-term decline in the industry was partially attributed to slowing Chinese demand driving solar panel prices down, along with other short-term shocks including the surprise election of Donald Trump, who has characterized climate change as a “hoax.”

In particular, First Solar Inc. (FSLR) a leader in both the production and installation of photovoltaic systems, saw its stock lose more than 50% of its value of the course of 2016. The Tempe, Ariz.-based firm has sacrificed its short-term profits in order to restructure its business and streamline the production of its more cost-efficient Series 6 module. (See also: Can First Solar Rebound After 2016’s Decline?)

Along with First Solar, SunPower (SPWR), Vivint Solar (VSLR) and Tesla’s (TSLA) SolarCity should interest investors seeking to gain exposure to the industry while the stocks are relatively cheap.
Published at Fri, 13 Jan 2017 23:28:00 +0000

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Sony Entertainment CEO Lynton to step down; to become Snap Inc chairman

File Photo: Michael Lynton, CEO Sony Entertainment and CEO and chairman Sony Pictures Entertainment, speaks during an investors' conference at the company's headquarters in Tokyo November 18, 2014. REUTERS/Toru Hanai

Published at Fri, 13 Jan 2017 23:33:12 +0000

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Morgan Stanley to pay $13 million for overbilling clients: SEC


By Sarah N. Lynch

Morgan Stanley will pay $13 million to settle civil charges, after it overbilled some of its wealth management clients because of coding and other billing system errors, U.S. regulators said Friday.

The Securities and Exchange Commission said the bank was also charged with violating custody rules designed to safeguard investor assets. The bank agreed to settle the case without admitting or denying the charges.

A spokeswoman for Morgan Stanley’s wealth management unit said the company was pleased to have the matter resolved.

“All affected clients have been reimbursed and the firm has enhanced its policies and procedures, including discontinuing the use of certain legacy systems,” company spokeswoman Christine Jockle said in a statement.

The SEC said that the billing errors at Morgan Stanley affected more than 149,000 clients. Between 2002 and 2016, the bank received more than $16 million in excess fees as a result of the errors.

In addition, the SEC said that Morgan Stanley did not comply with custody rules, in which an independent accountant conducts an annual “surprise” exam to ensure asset managers are keeping their clients’ money safe.

For two consecutive years, the SEC said, Morgan Stanley did not provide the accountant with a complete or accurate list of client funds and it failed to preserve client contracts.

This was the second time in less than a month that Morgan Stanley has faced SEC fines.


On Dec. 20, another unit of the bank paid $7.5 million to settle charges that it violated customer protection rules when it used trades involving customer cash to lower its borrowing costs.


(Reporting by Sarah N. Lynch; Editing by Jonathan Oatis)
Published at Fri, 13 Jan 2017 18:44:03 +0000

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Tesla Reveals Pricing For Supercharger Network


Tesla Reveals Pricing For Supercharger Network

By Rakesh Sharma | January 13, 2017 — 3:58 AM EST

After announcing an end to free lifetime supercharging last November, Tesla Motors Corp. (TSLA) provided additional details about new charging costs yesterday. In a blogpost, the company stated that Tesla Model S and Tesla Model X purchased after January 15 will receive free 400 kWh (or roughly 1,000 miles) of free Supercharging credits. It arrived at this figure after analyzing usage of its charging stations. “We carefully considered current Supercharger usage and found that 400 kWh covers the annual long-distance driving needs of the majority of our owners. As a result, most owners will continue to enjoy the benefits of Supercharging on road trips at no additional cost,” it stated. (See also: Apple, Google, Tesla Are Most Innovative Companies: BCG)

After 400 kWh, Tesla owners will pay a “small fee” at Supercharging stations to charge up their car. The company said the amount of the small fee would depend on applicable laws and policies in individual states and regions. For example, California and Virginia are among states that permit kWh-based charging. Within California itself, electric vehicle owners can also opt for time-based charging, which offers a lower rate for charging during certain windows. Tesla assured its car owners that they will pay per kWh in most regions.

“We are only aiming to recover a portion of our costs and set up a fair system for everyone; this will never be a profit center for Tesla,” stated the company. As an example, the company has calculated the price for a road trip between major cities on the three continents. “Customers will pay about $15 for a road trip from San Francisco to Los Angeles, about $120 from Los Angeles to New York, about €60 from Paris to Rome, and about ¥400 from Beijing to Shanghai,” the company stated. Tesla has 795 Supercharging stations worldwide. It intends to double the number of stations by the end of this year.

Tesla’s announcement comes as European car makers are mounting a serious challenge to the company’s charging stations in the continent. According to a Reuters report, BMW (BMW.DE), Daimler AG, Volkswagen AG, and Ford Motor Company (F) are planning to build 400 next-generation charging stations in Europe. These stations will take minutes, instead of hours, to charge an electric vehicle. The Reuters report notes that Tesla’s Supercharging stations, which are the fastest in Europe right now, take 30 minutes approximately to fully charge an electric vehicle. (See also: Tesla Opens World’s Largest Supercharging Station)
Published at Fri, 13 Jan 2017 08:58:00 +0000

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CVS slashes price of Impax’s EpiPen rival


Drugstore chain CVS Health Corp (CVS.N) has cut the price of a generic version of Impax Laboratories Inc’s (IPXL.O) emergency allergy injection, a device similar to Mylan NV’s (MYL.O) controversial EpiPen.

Mylan, which has been lambasted by consumers and lawmakers for raising EpiPen prices six-fold in less than a decade, said last month it would start selling a generic version of EpiPen for $300 per two-pack, a more than 50 percent discount.

CVS’s move comes after health insurer Cigna Corp (CI.N) revised its coverage list to include the generic version of Epipen instead of the branded version.

“These formulary changes were anticipated and are why we anticipate successful generic utilization,” Mylan spokeswoman Julie Knell said in an email.

Impax’s branded Adrenaclick has not caught on with patients and doctors and is not considered by regulators to be an exact copy of EpiPen.


The authorized Adrenaclick generic, which was earlier sold at about $200 a two-pack, is now available at all CVS Pharmacy locations at $109.99 for both insured and cash-paying patients without insurance, CVS said on Thursday.

The two-pack device, which is assembled by hand by manufacturers, has a list price of more than $400.

Mylan’s branded EpiPen doublet has a list price of $649.99, and the authorized generic costs $339.99, CVS added.

(This version of the story was corrected to say that Impax’s authorized generic, not the branded one, was earlier sold at about $200. The story was earlier corrected to say that CVS slashed the price of the treatment, not started selling it)

Reporting by Natalie Grover and Ankur Banerjee in Bengaluru and Caroline Humer in New York; Editing by Saumyadeb Chakrabarty and Maju Samuel)
Published at Thu, 12 Jan 2017 22:53:37 +0000

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Trump says pharma ‘getting away with murder,’ stocks slide


By Caroline Humer and Rodrigo Campos

U.S. President-elect Donald Trump on Wednesday said pharmaceutical companies are “getting away with murder” in what they charge the government for medicines, and promised that would change, sending drugs stocks sharply lower.

The benchmark S&P 500 index slipped into negative territory after his remarks at a news conference spooked investors. The Ishares Nasdaq Biotech ETF (IBB.O) dropped 4 percent at its session low and was on track for its largest daily percentage drop since late June. [nL4N1F14CH]

“When the president-elect says we’re going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there’s not going to be clarity on drug pricing reform anytime soon,” said Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF (CNCR.O). “When somebody that high profile says something that negative, people do not want to invest in it.”

Trump has blasted other industries for charging the government too much, particularly defense companies, but has made only a few public statements about drug pricing since being elected. He briefly mentioned Lockheed Martin Corp (LMT.N) and Ford & Co (F.N), and United Technologies Corp (UTX.N) during the Wednesday news conference and promised a border tax for companies producing products for U.S. consumers outside the United States.

After his promise to bring down drug spending, the ARCA pharmaceutical index fell 2 percent as Pfizer Inc (PFE.N) gave up 2.6 percent and Johnson & Johnson (JNJ.N) fell 1 percent. Biotech Gilead Sciences Inc (GILD.O) fell 2.3 percent.

The drug industry has been on edge for two years about the potential for more government pressure on pricing after sharp increases in the costs of some life-saving drugs drew scrutiny in the press and among lawmakers. The government is investigating Medicaid and Medicare overspending on Mylan NV’s (MYL.O) allergy treatment EpiPen, for instance.

David Katz, chief investment officer at Matrix Asset Advisors in New York, said negative comments on drug pricing trigger selling both from algorithms and investors who suffered from share drops when Democrat Hillary Clinton campaigned against healthcare cost increases.

Options traders’ expectation for near-term volatility in shares of Health Care Select Sector SPDR Fund (XLV.P) jumped to a one-month high.

Trading volume in the healthcare fund’s options jumped to 52,000 contracts, more than twice the average daily volume, with bearish/defensive bets dominating, according to options analytics firm Trade Alert data.

Trump’s campaign platform included allowing the Medicare healthcare program to negotiate with pharmaceutical companies, which the law currently prohibits. He has also discussed making it easier to import drugs at cheaper prices.

We are going to start bidding. We are going to save billions of dollars over time,” Trump said.

Medicare, which covers more than 55 million elderly or disabled Americans, spent $325 billion on medicines in 2015.

Industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA President Stephen Ubl said “Medicines are purchased in a competitive marketplace where large, sophisticated purchasers aggressively negotiate lower prices.”

He said the industry is “committed to working with President-elect Trump and Congress to improve American competitiveness and protect American jobs.”

Daniel O’Day, CEO of Roche Pharmaceuticals, a division of Roche Holding AG(ROG.S), said in an interview on the sidelines of the JP Morgan conference that the company focuses on innovation and investing in research.

Price increases over the past several years have been “responsible” and in the range of low to mid single digits, he said.

Mylan CEO Heather Bresch said it was premature to respond to Trump’s comments, when she was asked during an investor presentation at the JP Morgan Healthcare conference in San Francisco. She said the industry should relook at how healthcare is set up as the government repeals the Affordable Care Act.

Trump said he plans to repeal the Affordable Care Act, or Obamacare, and replace it at about the same time. The news helped shares of hospitals, which are nervous about losing government payments for medical services. It hurt some health insurers, like Anthem Inc. (ANTM.N), which sell plans on the government-run health insurance exchanges.

Healthcare ETFs including the Health Care Select Sector SPDR Fund (XLV) (XLV.P) and the iShares Nasdaq Biotechnology ETF (IBB) drew their highest trading volume since Nov. 10, after the election. (GRAPHIC link here:

The healthcare sector .SPXHC was the largest drag on the S&P 500 .SPX and the Nasdaq 100 .NDX while all major U.S. stock indexes were lower in mid-afternoon trading on Wall Street.

(Reporting by Caroline Humer, Rodrigo Campos and Lewis Krauskopf in New York, Deena Beasley in San Francisco and Ankur Banerjee and Natalie Grover in Bengaluru; Editing by Chizu Nomiyama and David Gregorio)
Published at Wed, 11 Jan 2017 19:33:44 +0000

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Now You Can Pick Up FedEx Deliveries at Walgreens

by CheccoRomeo from Pixabay

Now You Can Pick Up FedEx Deliveries at Walgreens

By Daniel B. Kline | January 11, 2017 — 3:33 PM EST

Walgreens Boots Alliance (NASDAQ: WBA) has partnered with FedEx (NYSE: FDX) to make it easier for people to get their packages picked up and delivered.

The two companies have signed a long-term agreement where thousands of the pharmacy chain’s stores will become pickup and drop-off sites for the shipping service. Implementation of the agreement across the United States should begin within the next several months.

“Walgreens, with its strong focus on customer care, is the perfect retailer to help us continue to meet the growing demand for convenient, secure dropoff and pickup options, and our research has shown that customers rank pharmacies as a preferred location for accessing their e-commerce shipments,” said FedEx EVP Raj Subramaniam in a press release.

It’s all about e-commerce

The important part of this deal is that it’s not just about getting packages delivered, but also being able to have them delivered to a Walgreens location for pickup. That’s an important option to offer to consumers who don’t feel comfortable having packages left on their doorsteps.

“The addition of Walgreens locations to the existing network of FedEx retail offerings will substantially increase customer access to staffed pickup and dropoff location,” said Subramaniam.

This is good for both companies

This agreement not only makes FedEx more useful as a delivery service for online merchants, it also should increase foot traffic to Walgreens stores. That should lead to an increase in sales above and beyond any fees the company receives for processing packages.

It’s hard to see a downside to this deal for either company or their customers. This is simply making a known delivery service more convenient to use while also giving consumers another reason to stop into a Walgreens. It might even lead to some people ordering items online they otherwise wouldn’t have, because of their concerns about having their delivery stolen. That’s a victory for everyone involved, and it should lead to happier customers of both companies.

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Published at Wed, 11 Jan 2017 20:33:02 +0000

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Tillerson ducks Exxon climate change allegations


Tillerson: Sanctions harm U.S. businesses 'by their design'
Tillerson: Sanctions harm U.S. businesses ‘by their design’

 Tillerson ducks Exxon climate change allegations


Rex Tillerson just doesn’t want to talk about whether oil giant Exxon misled the public on climate change.

It was a major bone of contention during his questioning at Thursday’s confirmation hearing for secretary of state.

Exxon is currently being investigated for allegedly misleading the public about what it knew of climate change decades ago. And Tillerson led Exxon as CEO for 10 years.

Citing recent investigative journalism exposés, Democratic Senator Tim Kaine asked Tillerson whether Exxon ignored internal research going back to the 1970s on the impact of burning fossil fuels on the climate, and funded organizations that spread misinformation about the growing scientific consensus.

“Since I’m no longer with ExxonMobil, I’m in no position to answer on their behalf,” said Tillerson, who resigned as CEO at the end of 2016 to prepare for the confirmation hearings.

Noting the 42 years Tillerson spent at Exxon, Kaine asked whether Trump’s pick for secretary of state lacks the knowledge to respond — or is simply refusing to answer.

“A little of both,” Tillerson said, prompting laughs from the audience.

Kaine, Hillary Clinton’s 2016 running mate, said he had a “hard time believing” Tillerson lacked the knowledge.

Tillerson’s refusal to defend Exxon’ (XOM)climate change history stood in stark contrast with his willingness to explain other actions taken by the company he worked at for four decades.

Tillerson hearing secretary state

The back-and-forth between Tillerson and Kaine highlighted the awkwardness of Trump nominating an Exxon man who could be representing America as its key emissary on climate issues. As secretary of state, Tillerson would have the power to negotiate a U.S. exit from the Paris climate agreement and even give the controversial Keystone XL pipeline a green light.

Tillerson’s hearing was interrupted several times by outburst from protesters who urged the senators to vote against his confirmation.

While Trump has said that “nobody really knows” if climate change is real, Tillerson is not a skeptic.

During the hearing, Tillerson said he came to the conclusion years ago that “the risk of climate change does exist and the consequences could be serious enough that action should be taken.”

Asked if human activity is contributing to climate change, Tillerson said the “increase in greenhouse gas concentration in the atmosphere is having an effect.” However, he added that “our ability to predict that effect is very limited.”

Seeking to ease conflict of interest concerns, Tillerson has reached an ethics agreement that would require him to sell the $54 million in Exxon stock he owns. Exxon will also cash out Tillerson’s $181 million retirement package and put it in a trust that can’t invest in the company.

Kaine asked Tillerson if he is subject to a confidentiality agreement that continues to be enforced that would limit his ability to answer questions, such as the ones on climate change.

“To my knowledge I have no such confidentiality agreement in place, but I would have to consult with counsel,” Tillerson said.

Climate activists were quick to seize on Tillerson’s evasive answers.

“We need a secretary of state who acknowledges that the climate crisis requires bold action, not an oil industry CEO who is dedicated to spreading misinformation,” May Boeve, executive director of climate activist group, said in a statement.

During the hearing, Kaine read from a 1982 letter uncovered by Inside Climate News that was written by an Exxon scientist.

“Over the past several years a clear scientific consensus has emerged regarding the expected climatic effects of increased atmospheric CO2,” Roger Cohen, Exxon’s former director of theoretical and mathematical sciences laboratory, wrote in the letter.

Cohen noted the “consensus is that a doubling of” carbon emissions from pre-industrial revolution levels would cause a rise in temperatures that would “bring about significant changes in the earth’s climate.”

Tillerson refused to answer the questions about whether Exxon downplayed or obscured the climate research.

“The question would have to be put to ExxonMobil,” he said.

For its part, Exxon said in a statement that it rejects “long-discredited conspiracy theories that attempt to portray legitimate scientific observations and differences on policy approaches as climate denial.”

Exxon said that it provides funding to a “broad range of groups that support free market solutions.” However, the company said it discontinued funding to groups when they took “extreme positions that were distracting from the important discussions on climate policy and/or not supported by science.”

“We do not fund climate denial,” Exxon said.

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Small business optimism gains the most since 1980


by Alexas_Fotos from Pixabay

Small business optimism gains the most since 1980


Small business owners haven’t felt this good about their future for a long time.

The small business optimism index hit a 12-year high in December, according to the National Federation of Independent Businesses. It rose to 105.8 from 98.4 the previous month, the biggest one month gain since July 1980.

Expectations for better sales and more favorable business conditions in the next six months under President-elect Donald Trump and the Republican-led Congress accounted for the lion’s share of the increase. The December results confirmed the “euphoria” seen in its November survey, NFIB said in its statement

“Trump has small business owners very excited,” says Michael Block, chief strategist at Rhino Trading Partners, a firm in New York.

The sharp rise in small business optimism comes on the heels of consumer confidence hitting a 15-year high in late December. That increase was also attributed to high hopes for Trump’s economic agenda.

Mom and pop business owners are very hopeful for the future. The percent of businesses expecting better business conditions in the next six months skyrocketed to 50% in December from 12% in November. Business owners also said they see higher wages, more expansion and more capital spending in the months ahead.

Trump is aiming to cut taxes, spend big on infrastructure projects, increase manufacturing jobs and repeal the Affordable Care Act, better known as Obamacare. Small business owners have complained for years that the costs associated with Obamacare hit them harder than big corporations.

Some experts caution that the small business index is a bit slanted. The respondents to NFIB’s survey tend to be disproportionately Republican, says Jim O’Sullivan, chief U.S. economist at High Frequency Economics, a research firm.

The NFIB did endorse Trump’s pick for labor secretary, Andrew Puzder, who liberals have derided for what they describe as a poor record of protecting workers’ rights.

Business owners may be more optimistic than what reality could turn out to be. The high level of optimism reflects hopes of 5% economic growth, O’Sullivan says. The U.S. economy is projected to grow about 2% this year, according to the Federal Reserve. Even Trump is only pledging 4% growth.

“I do think that hopes have been probably raised too much here and there will probably be a little bit of disappointment,” O’Sullivan noted.

 CNNMoney (New York)First published January 10, 2017: 11:19 AM ET
Published at Tue, 10 Jan 2017 16:19:26 +0000

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First Midwest Completes Standard Deal (FMBI)


First Midwest Completes Standard Deal (FMBI)

By Jeff Hawkins | January 10, 2017 — 8:53 AM EST

First Midwest Bancorp Inc. (FMBI), the Itasca, Illinois-based holding company of First Midwest Bank, announced Monday it completed the acquisition of Standard Bancshares, according to a press release.

“We are very excited about our partnership with Standard Bank and extend a warm welcome to our newest clients and colleagues,” First Midwest President and CEO Michael Scudder said. “This combination strengthens our position as Chicago’s premier commercial bank, enhances our leading metro market presence and continues our expansion into Northwest Indiana.”

One of the largest independent public bank holding companies in the region, First Midwest listed approximately $14 billion in assets and $8.5 billion in assets under management. First Midwest offers commercial, leasing, retail and wealth management services to more than 130 branches in three states, including Iowa, a release noted. (See also: America’s Best 10 Banks for Customer Service.)

First Midwest had a market cap of $2.3 billion, and its stocks closed Monday’s trading session at $24.93, a decline of 1.62 percent. It will release its full-year and fourth-quarter earnings on Jan. 24 after the market closes. (See also: Top 10 Bank Stocks for 2016.)

Based in Hickory Hills, Illinois, Standard Bank & Trust listed approximately $2.3 billion in assets, $2.1 billion in deposits and $1.9 billion in loans, as of Dec. 31. Former Standard Bank & Trust President and CEO Lawrence Kelley accepted a role on First Midwest’s board and as a market president. Standard’s senior lending team will also join First Midwest, a release stated.
Published at Tue, 10 Jan 2017 13:53:00 +0000

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Alcoa Offered Support by Australian Government


Alcoa Offered Support by Australian Government

By Richard Saintvilus | January 10, 2017 — 8:31 AM EST

It’s easy to know the value of a corporation to a city or country by the extent to which its government, and tax payers, are willing to help. In that vein, Alcoa Corporation (AA) is highly valued in Australia.

According to Reuters, the Australian government, led by Federal Minister Greg Hunt, has offered “substantial” financial support to help repair Alcoa’s aluminum smelter in Victoria that was crippled in December by a state-wide blackout. The government had offered “significant, immediate financial support” as well as the potential for further assistance through Australia’s Clean Energy Finance Corporation, said a spokesman for Minister Hunt. (See also: Alcoa Assessing Damage at Portland Smelter.)

The December power outage affected Alcoa’s Portland smelter when a power interconnection between the states of Victoria and South Australia went down, knocking out power to both of the plant’s potlines for about five-and-a-half hours.

The outage, which caused molten aluminum to solidify, forced Alcoa to postpose potlines. All told, with the company suffering production challenges at the 300,000-ton per year smelter, the long-term future of the facility was in doubt. Alcoa said in a statement last month that it was assessing the operational impact of the outage, saying it had “substantial challenges and analysis ahead.” (See also: Alcoa Initiated With ‘Sell’ by Deutsche Bank.)

However, in light of the recent support from the Australian government, there is optimism that the smelter may resume operation in a much quicker time than expected. “The state’s substantial support is aimed at keeping the smelter open and sustainable into the future,” said State Minister Philip Dalidakis in a statement, Reuters reports.

Dan Tehan, federal member of parliament for the district that includes Portland, told Reuters,”It is critically important to the local economy that we get the smelter back up and running at full production.” He added, ”Everyone is working to ensure that the smelter remains open.”

Alcoa stock closed Monday at $29.48, down 3.93%. The shares have risen 5% year to date, compared with a 1.44% gain in the S&P 500 (SPX) index. (See also: Alcoa Stock Shines With 9% Gains Last Week.)
Published at Tue, 10 Jan 2017 13:31:00 +0000

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FDIC: Bank of America owes us half a billion dollars


Janet Yellen on Dodd-Frank: 'I wouldn't want to see the clock turned back'
Janet Yellen on Dodd-Frank: ‘I wouldn’t want to see the clock turned back’

FDIC: Bank of America owes us half a billion dollars

Bank of America is being accused of stiffing the FDIC, the government agency that insures people’s deposits against a bank failure.

The FDIC filed a lawsuit in federal court on Monday demanding that Bank of America pay $542 million it owes to the regulator’s deposit insurance fund.

“Because Bank of America refuses to pay, the FDIC seeks relief from this Court,” the suit in federal court in Washington said.

The reason: Bank of America (BAC) underreported a key risk metric by tens of billions of dollars during the final three quarters of 2013 and all of 2014, the lawsuit said. The FDIC said that allowed BofA to appear less risky than it really was — and avoid paying the FDIC an average of $77 million each quarter into the agency’s deposit insurance fund.

The FDIC insures customers’ deposits up to $250,000 in case a bank collapses. That’s why even though hundreds of banks went belly up during the 2008 crisis, Americans didn’t lose money that was kept in FDIC-insured accounts.

Banks of all sizes must pay into the insurance fund, which currently has nearly $81 billion.

The FDIC said this is the first time it has filed suit against a bank to recover insurance fees in more than two decades.

The insurance premiums are calculated based on the risk level of banks. Not only do the banks have to spell out their own risk exposure, but also those of their business partners.

A 2014 FDIC rule change requires big banks to add up their total exposure to business partners by their parent company rather than by individual entity. For instance, Goldman Sachs has to break out its total exposure to all of Facebook (FB, Tech30) instead of listing individual subsidiaries like Instagram and WhatsApp.

The thinking is that banks with more concentrated “counterparty” exposure are at more risk of getting into financial trouble.

The FDIC said Bank of America failed to divulge this risk. The lawsuit said Bank of America was the only bank, out of the nine that are required to do this, that failed to report this kind of exposure.

Bank of America, however, disputes the FDIC claims. It said in a statement there is a “technical disagreement” over the 2014 rule change but that it believes it’s in compliance.

“We look forward to the court’s review,” the bank said.

Eugene Scalia, a lawyer from Gibson Dunn who represents Bank of America, questioned how the FDIC could have been unaware of the bank’s approach to this issue.

The FDIC “received reports from the bank each quarter which made crystal clear what approach the bank was taking,” Scalia said.

Bank of America and the FDIC had been in talks about the issue. “They agreed to provide us additional information, but recently they indicated that they felt they must file suit by mid-January,” he said.

It’s unclear if the FDIC wanted to file the lawsuit before the arrival of President-elect Donald Trump, who has promised to dial back regulation, including on banks.

A person familiar with the FDIC’s thinking said the lawsuit was triggered by a statute of limitations issue, not a change in administration.

Bank of America is being accused of stiffing the FDIC, the government agency that insures people’s deposits against a bank failure.

The FDIC filed a lawsuit in federal court on Monday demanding that Bank of America pay $542 million it owes to the regulator’s deposit insurance fund.
Published at Mon, 09 Jan 2017 21:41:56 +0000

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HMD Global launches first Nokia smartphone


HMD Global launches first Nokia smartphone

HMD Global, the Finnish company that owns the rights to use Nokia’s brand on mobile phones, announced on Sunday its first smartphone, targeted for Chinese users with a price of 1,699 yuan ($246).

The launch marks the first new smartphone carrying the iconic handset name since 2014 when Nokia Oyj (NOKIA.HE) chose to sell its entire handset unit to Microsoft (MSFT.O).

The new device, Nokia 6, runs on Google’s (GOOGL.O) Android platform and is manufactured by Foxconn (2354.TW). It will be sold exclusively in China through online retailer (JD.O), HMD said.

“The decision by HMD to launch its first Android smartphone into China is a reflection of the desire to meet the real world needs of consumers in different markets around the world… it is a strategically important market,” HMD said in a statement.

Nokia was once the world’s dominant cellphone maker but missed the shift to smartphones, and then chose Microsoft’s Windows operating system for its “Lumia” range.

After the 2014 deal, Microsoft continued selling cheaper basic phones under Nokia’s name and Lumia smartphones under its own name, but last year, it largely abandoned both businesses.

HMD in December took over the Nokia feature phones business and struck a licensing deal that gave it sole use of the Nokia brand on all phones and tablets for the next decade.


It will pay Nokia royalties for the brand and patents, but Nokia has no direct investment in HMD. Nokia Oyj is currently focused on telecom network equipment business and technology patents.

HMD CEO Arto Nummela, who was once responsible for Nokia’s sales and product development, told Reuters last month that HMD aims to be one of the key competitive players in the smartphone business where it faces tough competition from Apple (AAPL.O), Samsung (005930.KS) and dozens of other players.


HMD launched some new Nokia basic phones last month. It said on Sunday it was looking to launch more new products in the first half of the year.


(Reporting by Jussi Rosendahl and Eric Auchard)
Published at Sun, 08 Jan 2017 00:40:30 +0000

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10 Jobs Where Women Earn More Than Men


10 Jobs Where Women Earn More Than Men

By Tim Parker | January 7, 2017 — 6:00 AM EST

On average, women are still paid less than men doing the same job but that’s not true of every job field. Job posting platform Glassdoor looked at more than 500,000 salary reports shared by full-time U.S. employees. Here are 10 jobs where women outearn men, according to its study, “Demystifying the Gender Pay Gap.” (The pay differentials for these jobs are the “adjusted” pay gap – the difference that remains after statistical controls are added for personal characteristics, job title, company, industry and other factors, making possible an apples-to-apples comparison between workers.) The jobs are ranked from smallest female/male pay differential to largest.

10. Business Coordinator

Administrative tasks like purchasing, billing and filing.

Women earn about 0.5% or 1 cent more on the dollar than men.

9. Procurement

Purchasing and contract negotiations for a company.

Women earn 0.8% or 1 cent more on the dollar than men.

8. Health Educator

Works in a variety of mostly healthcare settings, teaching people how to live a healthy lifestyle.

Women earn 0.9% or 1 cent more on the dollar than men.

7. Social Media

Manages company social media properties.

Women earn 1.9% or 2 cents more on the dollar than men.

6. Communications Associate

Creates buzz by working with the press to gain coverage of company news and events.

Women earn 2.2% or 2 cents more on the dollar than men.

5. Physician Advisor

Checks for compliance issues in hospital settings.

Women earn 2.4% or 2 cents more on the dollar than men.

4. Purchasing

Manages purchasing for construction companies, restaurants, hotels and others.

Women earn 5.5% or 6 cents more on the dollar than men.

3. Research Assistant

Helps collect and analyze data, often as part of a larger project.

Women earn 6.6% or 6 cents more on the dollar than men.

2. Merchandiser

Promotes retail products or services with the primary goal of increasing revenue.

Women earn 7.6% or 7 cents more on the dollar than men.

1. Social Worker

Public or private sector job often providing services to those in need.

Women earn 7.8% or 8 cents more on the dollar than men.

Men Still Outearn Women in Most Fields

Overall, men’s base pay is 24% higher – that is, women still only earn 76 cents for every dollar men earn. (If you’re thinking the gender pay gap is just a United States thing, that’s not true. Although the U.S. has the largest gap of the five industrialized countries studied, men earn 22.9% more than women in the UK, 22.5% more in Germany, 17.3% more in Australia and 14.3% more in France.)

In the U.S., even when the gender pay gap is “adjusted” to compare workers with similar age, education and years of experience and with the same job title, employer and location, there remains an unexplained 5.4% differential, with women earning 94.6 cents on the dollar. That adjusted gap is larger in some fields: In health care and insurance, men outearn women by 7.2%. In the financial industry, pay is 6.4% higher for men, and even in retail, men outearn women by 5.9%. What’s more, when considering the significance of any pay gap, the pay rate in occupations also needs to be considered. When a male computer programmer earns an adjusted 28.3% more than a woman programmer (as the Glassdoor study found), the bonus in his paycheck will be a lot bigger in real dollars than that of a woman social worker who earns 7.8% more than her male counterpart. (See also: The Gender Wage Gap: Beware Age 32!)

What Causes the Gap?

According to the report, the largest contributing factor is something called industry sorting. Women make up only 26% of highly paid chief executives but 71% of lower paid jobs like cashiers. Previous research, according to the Glassdoor study, suggests that this is partly due to social pressure that sorts women and men into different college majors and career tracks. Additionally, women tend to take on a larger share of child and elder care, causing them to look for jobs with more flexible schedules – which come with lower pay. The study found that level of education, age and experience are a much smaller factor in pay inequality.

The Bottom Line

These data have remained largely unchanged since the late 2000s, indicating that little has been done to close the pay gap. Glassdoor’s report points out that overt forms of bias and discrimination, while important, aren’t the main driver of the persistent gender pay gap. Policies that address sorting by occupation and industry, for instance, and encourage women to enter higher-paying, male dominated fields might be a good way to bring wages to parity between men and women. Making affordable child care more accessible could also help even the playing field for men and women.

For related reading, see Retirement Planning for Women: Overcoming the Gender Pay Gap.
Published at Sat, 07 Jan 2017 11:00:00 +0000

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BMO Capital Upgrades Western Digital


BMO Capital Upgrades Western Digital

By James Garrett Baldwin | January 6, 2017 — 7:04 PM EST

On Jan. 5, BMO Capital analyst Tim Long upgraded shares of Western Digital Corp. (WDC) to Outperform. The analyst also raised his price target from $66.00 to $90.00 per share. According to, Long is a four-star analyst with a 59 percent success rate and an average return of 6.1 percent.

In a research note released on Thursday, Long cited increasing demand in flash-storage devices for the higher price target. Long also projected improving profit margins in the wake of the company’s acquisition of SanDisk Corporation. The $90.00 price target represents potential upside of 27.1 percent from the stock’s closing price of $70.83 on Friday, Jan. 6.

“We expect to see the return of organic revenue growth in [the fiscal year 2017] fueled by continued demand for flash in a supply-constrained environment, the catching up on 3D NAND, high capacity HDDs and favorable customer relationships,” Long wrote, according to “The continued margin expansion from HGST and SanDisk synergies will help drive further earnings growth.”

During CES 2017 in Las Vegas, the company unveiled a new 256-gigabyte flash drive called the SanDisk Extreme Pro USB 3.1 Solid State Flash Drive. The firm says it is the fastest USB flash drive it has ever developed and can transfer information at up to 420 megabytes per second.

The upgrade from BMO Capital came the same day that analysts at Guggenheim initiated coverage of the company, set a Buy rating and issued a price target of $100.00. According to Fox Business, Guggenheim analysts called WDC stock their “best idea in IT Hardware & Mobility.”

On Wednesday, Brean Capital analyst Ananda Baruah reiterated a Buy rating and set a price target of $100.00 per share. (See also: Brean Capital Rates Western Digital a Buy.)

According to, WDC stock is rated a consensus Moderate Buy. Among 22 analysts, 17 have rated the stock a Buy and five analysts have rated it a Hold. The consensus price target is $78.00 per share. That figure represents potential upside of 10.83 percent from Friday’s closing price. (See also: Understanding Analyst Ratings.)
Published at Sat, 07 Jan 2017 00:04:00 +0000

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Pimco Total Return posts $3.2 billion outflows in December


By Sam Forgione

Investors pulled $3.2 billion from the Pimco Total Return Fund, once the world’s largest bond fund, in December, bringing last year’s total cash withdrawals to $16.1 billion, Morningstar data showed on Friday.

The Pimco Income Fund, which Pimco Group Chief Investment Officer Dan Ivascyn told Reuters on Friday has increased its exposure to safer securities in recent weeks, posted net inflows of $1.5 billion last month for a total cash inflow of $13.7 billion in 2016.

Pimco’s U.S. open-end mutual funds collectively posted $1.7 billion in net outflows last month for 2016 total cash outflows of $16.6 billion.

Pimco Total Return, which hit a peak of $292.9 billion in assets under management in April 2013, now has $75.7 billion in assets. The Income Fund, overseen by Ivascyn and widely seen by investors and analysts as Pimco’s new flagship fund, now has assets under management of $70.3 billion, according to Morningstar data.


Last year, the Pimco Total Return Fund returned 2.6 percent, lagging 63 percent of its intermediate-term peer category, according to Morningstar. For the same period, the Pimco Income Fund returned 8.3 percent, surpassing 63 percent of its multisector bond category.

In December alone, the Total Return Fund gained 0.7 percent to beat 94 percent of its peers, while the Income Fund gained 1 percent to beat 61 percent of its peers, Morningstar data showed.

The Pimco Income Fund’s exposure to higher-quality securities such as U.S. Treasuries, U.S. agency mortgages, and Australian government bonds has risen significantly in the past several weeks while the fund’s exposure to riskier U.S. corporate bonds has fallen, Ivascyn said.

Ivascyn said that move had been implemented given uncertainty surrounding U.S. President-elect Donald Trump’s policies and because the market seemed to be factoring in an extremely low probability of recession and other sources of volatility.

“We think U.S. Treasury bonds, high-quality bonds, are priced more fairly than at any point in the last year or so,” he said. Ivascyn said that, despite Treasuries being fairly priced currently, the benchmark 10-year yield could still rise to the low 3 percent range over the next 12 months.

U.S. 10-year yields, which hit a more than two-year high of 2.641 percent in mid-December, were last at 2.419 percent.

Pacific Investment Management Co, a unit of German insurer Allianz SE, is based in Newport Beach, California. It had about $1.55 trillion in assets under management at Sept. 30.


(Editing by Jeffrey Benkoe; Editing by Lisa Shumaker)
Published at Fri, 06 Jan 2017 21:28:24 +0000

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