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Is the iPhone X a disappointment? Investors think so


The “x”citement might be over for the iPhone X.

Shares of Apple and its suppliers tumbled this week after multiple industry analysts predicted weak demand for the new flagship iPhone. Apple’s(AAPL) stock slid by as much as 4% in premarket trading Tuesday.

The radically redesigned iPhone X was supposed to give Apple a boost following a couple years of sinking sales. Early sales reports were positive, and Morgan Stanley reported last week that the iPhone X is especially hot in China.

But the first wave of demand among Apple fanatics seems to have passed, and analysts are skeptical that more casual iPhone customers will upgrade to the iPhone X.

Citing the iPhone X’s super-high $1,000 price and confusing features, a Sinolink Securities analyst predicted that Apple will ship just 35 million iPhone X devices in the first three months of 2018, roughly 10 million fewer than previously expected. JL Warren Capital now estimates Apple will deliver just 25 million iPhone Xs. Jefferies is slightly more bullish, expecting Apple to ship 40 million.

The analyst reports come after Taiwanese newspaper Economic Daily reported Monday that Apple had dramatically lowered its own iPhone sales expectations from 50 million to 30 million.

Apple didn’t immediately respond to CNNMoney’s request for comment.

Investors punished companies that make iPhone components. Shares Genius Electronic Optical, which makes of iPhone lens modules, have fallen by more than 11% this week. Pegatron and Lumentum fell by 3%. Finisar and Skyworks fell by 2%. Foxconn fell by 1%.

The good news for Apple is that the 2017 holiday shopping season was likely its best ever. Analysts predict Apple sold as many as 90 million iPhones over the past three months, which would blow away the company’s previous record.

CEO Tim Cook said in November that orders for the iPhone X have been “very strong” and defended the $999 price tag for the redesigned phone. The company hasn’t publicly released iPhone X sales figures.

Apple’s stock is up 50% for the year and continues to inch closer to becoming the first public company worth $1 trillion.

Published at Tue, 26 Dec 2017 13:42:56 +0000

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This was the year Brexit began to bite

This was the year Brexit began to bite

Britain voted to leave the European Union in 2016, and its exit won’t be official until 2019.

But this was the year that Brexit began to bite.

The price of consumer goods spiked in 2017, business confidence slumped, growth slowed dramatically and the property market stalled.

Kallum Pickering, senior U.K. economist at Berenberg Bank, said the country’s economy “should be riding high on the back of the ongoing global upswing.”

“Instead … the U.K. has missed out on the fun, with its growth rate slowing,” he said.

The malaise crept in slowly, but has its roots in a sudden event: The EU referendum vote in June 2016, which caused the value of the pound to drop sharply.

“Consumers originally kept on spending after the Brexit vote, because at first, nothing really changed,” said Howard Archer, an economic adviser to EY.

But the currency’s plunge soon translated into higher prices on imported goods. Inflation, which began the year at 1.8%, had shot up to 3.1% by November.

“Inflation really started to move up late last year and there has been consistent pressure on consumer spending this year,” Archer said.

Wages, meanwhile, grew only 2.2% on average in 2017. The squeeze has made consumers poorer in real terms, with less cash to splash out on purchases.

Retailers are now feeling the pain.

Spending in brick-and-mortar stores dropped 3.5% from the previous year in November. Visa expects spending to decline this holiday season for the first time since 2012.

Automakers have also had a terrible year: The number of cars manufactured in Britain fell 4.6% over the previous year in November, according to the Society of Motor Manufacturers and Traders.

Sales of new cars, which have also been affected by confusion over diesel regulations, declined 11.2% in November.

“An eighth month of decline in the new car market is a major concern, with falling business and consumer confidence exacerbated by ongoing anti-diesel messages from government,” the industry group said.

The unemployment rate remains very low, but even the labor market is showing signs of wear and tear. Some 65,000 retail jobs have been lost since the Brexit referendum, for example.

brexit wage growth

The chances of a quick turnaround appear slim.

The Office of Budget Responsibility has slashed its growth forecast for 2018 to just 1.4%.

The Resolution Foundation says that average earnings, adjusted for inflation, are likely to stay below the level they hit before the global financial crisis until the start of 2025.

Meanwhile, negotiations between Britain and the EU have now moved on to their second phase, which will include their future terms of trade.

They will also attempt to negotiate a transition of roughly two years that would give British businesses extra time to adapt to life outside the bloc.

Industry groups say they need clarity as soon as possible. But talks could still fall apart.

“The key risk remains that the U.K. will opt for a hard Brexit with few follow-up arrangements for privileged access to the EU market,” Pickering said.

Published at Mon, 25 Dec 2017 08:34:47 +0000

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Uber dealt blow after EU court classifies it as transport service


Uber dealt blow after EU court classifies it as transport service

LUXEMBOURG (Reuters) – Uber [UBER.UL] should be classified as a transport service and regulated like other taxi operators, the European Union’s top court said in a landmark ruling on Wednesday that could impact other online businesses in Europe.

Uber, which allows passengers to summon a ride through an app on their smartphones, has transformed the taxi industry since its launch in 2011 and now operates in more than 600 cities globally.

In the latest of a series of legal battles, Uber had argued it was simply a digital app that acted as an intermediary between drivers and customers looking for a ride and so should fall under lighter EU rules for online services.

“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” the European Court of Justice (ECJ) said.

“Member states can, therefore, regulate the conditions for providing that service,” it said.

The case follows a complaint from a professional taxi drivers’ association in Barcelona that Uber’s activities in Spain amounted to misleading practices and unfair competition from Uber’s use of non-professional drivers – a service Uber calls UberPOP and which has since been suspended in Spain and other countries.


Uber has taken the fight to regulators and established taxi and cab companies, expanding from a Silicon Valley start-up to a business with a valuation of $68 billion.

Following changes at the top and legal battles, it recently adopted a more conciliatory approach under its new chief executive Dara Khosrowshahi.

The European case had been widely watched as an indicator of how the burgeoning gig economy, which also features the likes of food-delivery company Deliveroo, would be regulated in Europe.

The ECJ said Uber “exercises decisive influence over the conditions under which the drivers provide their service” and that without the Uber mobile app “persons who wish to make an urban journey would not use the services provided by those drivers.”

The decision is unlikely to have an immediate impact on Uber’s operations in Europe, where it has cut back its use of unlicensed services such as UberPOP and adheres to local transportation laws.

“This ruling will not change things in most EU countries where we already operate under transportation law,” an Uber spokeswoman said in a statement.

“As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button.”

Uber is in the middle of a legal battle over its right to operate in London, its most important European market.

Bernardine Adkins, Head of EU, Trade and Competition Law at Gowling WLG said the ruling provided “vital clarity to its (Uber‘s) position within the marketplace.”

“Uber’s control over its drivers, its ability to set prices and the fact its electronic service is inseparable from its ultimate consumer experience means it is more than simply a platform connecting drivers to passengers.”


IRU, the world road transport organization, which includes taxi associations, cheered the ruling as finally offering a level playing field for providers of the same service.

“In the area of mobility, the taxi and for-hire sector was one of the first to embrace innovation and new technologies,” said Oleg Kamberski, Head of Passenger Transport at IRU.

“Finding a solution that allows both traditional and new transport service providers to compete in a fair way while meeting the service quality standards became necessary.”

EU law protects online services from undue restrictions and national governments must notify the European Commission of any measures regulating them so it can ensure they are not discriminatory or disproportionate.

Transport, however, is excluded from this.

The tech industry said the ruling would impact the next generation of start-ups more than Uber itself.

“We regret the judgment effectively threatens the application of harmonized EU rules to online intermediaries,” said Jakob Kucharczyk, Vice President, Competition & EU Regulatory Policy at the Computer & Communications Industry Association.

“The purpose of those rules is to make sure online innovators can achieve greater scalability and competitiveness in the EU, unfettered from undue national restrictions,” he added.

“This is a blow to the EU’s ambition of building an integrated digital single market.”

Reporting by Julia Fioretti; editing by Keith Weir and David Evans

Published at Wed, 20 Dec 2017 11:53:37 +0000

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U.S. House to vote again on tax bill, Trump on verge of win


U.S. House to vote again on tax bill, Trump on verge of win

WASHINGTON (Reuters) – The Republican-controlled U.S. House of Representatives on Wednesday was expected to give final approval to a sweeping tax bill and send it to President Donald Trump to sign into law, sealing his first major legislative victory in office.

In the largest overhaul of the U.S. tax code in 30 years, Republicans in mere weeks have steamrolled over the opposition of Democrats in an effort to slash taxes for corporations and the wealthy, while offering mixed, temporary tax relief to working American individuals and families.

The Senate approved the bill in the wee hours of Wednesday morning on a 51-48 vote, but had to send it back to the House, which had passed it on Tuesday, for a re-vote due to a procedural foul-up that embarrassed Republicans, but was not expected to change the outcome. The re-vote was expected to take place before noon in the House on Wednesday.

The sprawling, debt-financed legislation cuts the U.S. corporate income tax rate to 21 percent from 35 percent, gives other business owners a new 20 percent deduction on business income and reshapes how America taxes multinationals along lines the country’s largest businesses have recommended for years.

Millions of Americans would stop itemizing deductions under the bill, putting tax breaks that incentivize home ownership and charitable donations out of their reach, but also making their tax returns somewhat simpler and shorter.

It keeps the present number of tax brackets, but adjusts many, though not all, of the rates and income levels for each one. The top tax rate for high earners is reduced. The estate tax on inheritances is changed so far fewer people will pay.

In two provisions added on to secure needed Republican votes, it also repeals part of the Obamacare health system and allows oil drilling in Alaska’s Arctic National Wildlife Refuge.

Democrats have railed against the legislation as a giveaway to the wealthy and the business community that will widen the income gap between rich and poor, while adding $1.5 trillion over the next decade to the $20 trillion national debt, which Trump promised in 2016 he would eliminate as president.

Democratic Senator Chris Van Hollen said the bill “will harm millions of middle-class families … It contains huge, permanent giveaways for big banks and corporations, and asks our children, millions of working Americans and senior citizens, and future generations to pay the price.”

A few Republicans, whose party was once defined by its fiscal hawkishness, have protested deficit-spending entailed by the bill. But most of them have voted for it anyway, saying it would help businesses and individuals, while boosting an already expanding economy they see as not growing fast enough.

“We’ve had two quarters in a row of 3 percent growth. The stock market is up. Optimism is high. Coupled with this tax reform, America is ready to start performing as it should have for a number of years,” said Senate Republican leader Mitch McConnell after the chamber’s vote.

Despite Trump administration promises that the tax overhaul would focus on the middle class and not cut taxes for the rich, the nonpartisan Tax Policy Center, a think tank in Washington, estimated middle-income households would see an average tax cut of $900 next year under the bill, while the wealthiest 1 percent of Americans would see an average cut of $51,000.

The prospect of a Republican victory came tinged with embarrassment. House lawmakers initially voted 227-203, largely along party lines, to approve the bill on Tuesday afternoon.

That sent the measure to the Senate, where the Senate parliamentarian ruled three minor provisions in violation of an arcane Senate rule. To proceed, the Senate deleted the three provisions and then approved the bill.

Because the House and Senate must approve the same legislation before Trump can sign it into law, the Senate’s late Tuesday vote only ping-ponged the bill back to the House.

Democrats pounced on the mistake as evidence of the hurried, often secretive process used by Republicans in developing the bill. Ignoring Democrats and much of their own rank and file, Republican congressional leaders and White House officials drafted the bill behind closed doors, unveiling it on Sept. 27.

No public hearings were held on the measure. Numerous narrow amendments favored by lobbyists were added late in the process, tilting the package more toward businesses and the wealthy.

“When future generations look back at the short and messy history of the Republican tax bill, its most enduring lesson will be what it has taught us about how not to legislate,” said Senate Democratic Leader Chuck Schumer on the Senate floor.

“After only a few months of frantic backroom negotiations by only one party, we are left with a product as sloppy and as partisan as the process used to draft it… What a disgrace.”

Reporting by David Morgan and Amanda Becker; Editing by Kevin Drawbaugh, Paul Tait and Nick Macfie

Published at Wed, 20 Dec 2017 07:07:13 +0000

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Massachusetts and NY probing MetLife over unpaid pensions


Massachusetts and NY probing MetLife over unpaid pensions

(Reuters) – Regulators in Massachusetts and New York State said on Monday they are probing MetLife Inc (MET.N) after the insurer revealed last week it had failed to pay pensions to potentially thousands of people.

“Retirees cannot afford to have glitches with their pension checks,” Massachusetts Secretary of the Commonwealth William Galvin, the state’s top securities regulator, said in a statement announcing an investigation.

“I want to uncover why this occurred and how MetLife is going to rectify the problem for the retirees,” Galvin said.

The New York Department of Financial Services (NYDFS), which regulates insurers and banks in the state, said on Monday that it is reviewing the matter.

MetLife said on Friday that it believed the group missing out on the payments represented less than 5 percent of about 600,000 people who receive a type of annuity benefit from the company via its retirement business.

Those affected generally have average benefits of less than $150 a month, MetLife said.

“We are deeply disappointed that we fell short of our own high standards,” MetLife said. “Our customers deserve better. We are committed to making this right for our customers. We found the issue, we self-reported it, and we are committed to doing better.”

New York’s regulator was aware of the issue prior to MetLife’s disclosure, NYDFS Superintendent Maria Vullo said.

“The department is currently reviewing the matter and will work with MetLife to remediate the issue and ensure that all MetLife’s outstanding pension obligations are fulfilled,” Vullo said.

MetLife, which pledged to fully cooperate with regulators, said the standard way for finding retirees who are owed benefits is no longer sufficient.

“While it is still difficult to track everyone down, we have not been as aggressive as we could have been,” MetLife said in a statement.

“When we realized this was a significant issue, we launched an effort to do three things: figure out what happened, strengthen our processes so that we do a better job locating retirees, and promptly pay anyone we find – as we always do,” the company said.

MetLife said it is now using “enhanced techniques” to locate and promptly pay any those who may be entitled to benefits.

Reporting by Tim McLaughlin and Suzanne Barlyn; Editing by Will Dunham and Leslie Adler

Published at Tue, 19 Dec 2017 01:30:45 +0000

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Disney buying Fox film, TV units for $52 billion in digital push

by StockSnap from Pixabay

Disney buying Fox film, TV units for $52 billion in digital push

(Reuters) – Walt Disney Co has struck a deal to buy film, television and international businesses from Rupert Murdoch’s Twenty-First Century Fox Inc for $52.4 billion in stock, giving the world’s largest entertainment company an arsenal of shows and movies to combat growing digital rivals Netflix Inc and Inc.

The deal brings to a close more than half a century of expansion by Murdoch, 86, who turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world’s most important global news and film conglomerates. The new, slimmed down Fox will focus on TV news and sport.

Early indications are that the deal will not face strong resistance from antitrust regulators as AT&T Corp’s bid to acquire Time Warner Inc has done. U.S. President Donald Trump spoke to Murdoch on Thursday and congratulated him on the deal, according to the White House.

Shares of Fox, which have surged more than 30 percent since talk of the deal surfaced in early November, climbed more than 5 percent. Disney shares rose more than 3 percent after the company said it expects to buy up to $20 billion of its own shares to offset dilution from the all-stock deal. Disney will also assume about $13.7 billion of Fox debt in the deal.

Fox stockholders will receive 0.2745 Disney shares for each share held and will end up owning about a quarter of Disney.

Under the deal, expected to close in 12 to 18 months, Disney acquires 21st Century Fox’s film and television studios, its cable entertainment networks and international TV businesses.

That brings marquee franchises like “Avatar” and “The Simpsons” inside the Mouse House, on top of Iger’s previous purchases, including Pixar Animation Studios, Marvel Entertainment and “Star Wars” producer Lucasfilm.

The deal also includes 22 of Fox’s regional sports networks that have the rights to televise live games of U.S. professional baseball, basketball and hockey teams as well as popular college and high school games.

Disney’s global footprint expands with the acquisition of Fox’s international satellite assets, including Star TV network in India and a stake in European pay-TV provider Sky Plc and sports rights in several countries.

The new pipeline of shows and movies will help Disney battle technology companies spending billions of dollars on programming shown online that is siphoning audiences away from traditional TV networks.

“The deal illustrates the huge strategic challenge traditional media companies face and how they need to reinvent their business models to compete with digital, online competitors such as Netflix, Google and Amazon,” said Nick Jones, partner and head of technology at Cavendish Corporate Finance. “(It) helps Disney dramatically reduce its reliance on traditional television, a business that has declined over the last two decades.”


Immediately before the acquisition, Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, its sports channels FS1, FS2 and the Big Ten Network, into a newly listed company that it will spin off to its shareholders.

“This will be a growth company, centered on live news and sports brands and the strength of the Fox network,” 21st Century Fox Executive Chairman Murdoch told investors. He said Fox was not retreating, rather “pivoting at a pivotal moment.”

Disney Chief Executive Bob Iger, 66, will extend his tenure through the end of 2021 to oversee the integration of the Fox businesses. He has already postponed his retirement from Disney three times, saying in March he was committed to leaving the company in July 2019.

If Iger sees out his new term, that would rule out a presidential bid in 2020, which had been the subject of some speculation.

“This acquisition reflects a changing media landscape, increasingly defined by transforming technology and evolving consumer expectations,” Iger told investors on a conference call.

He said new technology would be necessary to meet the demands of viewers who want to access content anytime. Fox’s regional sports networks and cable network puts Disney in a better position to sell more shows directly to more consumers, he added.

Disney has been struggling to bolster its TV business as cancellation of cable subscriptions is pressuring its biggest network, sports channel ESPN.

The company plans to launch its own streaming service in 2019, a calculated gamble that it can generate more profit in the long run from its own subscription service rather than renting out movies to services like Netflix.

It is not clear who will head the new Fox. Iger said current Fox CEO James Murdoch, Rupert’s younger son, will help with the transition and that the two will discuss whether he will have a longer-term role at Disney.


Through Fox’s stake in the Hulu video streaming service, Disney will assume majority control of one of Netflix’s main competitors. Hulu is also partially owned by Comcast Corp and Time Warner Inc.

A majority of antitrust experts contacted by Reuters said the deal would likely win approval from U.S. antitrust authorities, although the U.S. Department of Justice may require asset sales or conditions, they said.

Fox said it remained committed to buying the 61 percent of Sky it does not already own and expects to win regulatory approval from Britain and to close the deal by the end of June, 2018.

Britain’s Takeover Panel said Disney had informed the watchdog that should it only buy 39 percent of the company – if Murdoch fails to buy the rest of Sky – it did not think it should be forced to make a full bid for the company. The statement prompted Sky’s stock to fall by 1 percent.

In Britain, any investor acquiring 30 percent of a listed company is automatically forced to make a bid for the rest of the stock. The Takeover Panel said it would seek the opinions of Sky’s independent directors before making a decision.

Additional reporting by Susan Heavey in Washington, Lisa Richwine in Los Angeles, Diane Bartz in Washington and Kate Holton in London; Editing by Patrick Graham and Bill Rigby

Published at Thu, 14 Dec 2017 19:42:43 +0000

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The Billionaires Betting On Space Travel


The Billionaires Betting On Space Travel

The space race is on for some of the biggest names out there. Leading technology giants like, SpaceX, Microsoft, Virgin Group, Google, and Facebook are all getting in on the action. CEO Jeff Bezos, the world’s second richest man after Microsoft’s Bill Gates, is funding rocket company Blue Origin to the tune of $1 billion a year. Blue Origin has been putting together a rocket factory in Kent, Wash., for several years. The company also plans to launch its rockets from a NASA launch pad in Cape Canaveral, Florida, in the near future.

Tesla CEO Elon Musk, who also heads SpaceX, is overseeing space flights with the mission of eventually making it to Mars. A new version of the ship, Dragon 2, next year will send astronauts to the International Space Station still in orbit around planet Earth.

A Morgan Stanley analyst even claimed that Tesla could lose Musk’s attention as he devotes more time to his SpaceX intergalactic travel company, with the possibility of an alliance between Tesla and SpaceX in the future.

“Investors widely expect Elon Musk to, over time, devote increasing amounts of his time and talents to SpaceX, raising the very real question of who could replace him at Tesla,” Jonas wrote. “A combination of efforts between the two firms could address this important issue.”

The two companies will play on this alliance during a TV commercial that will be broadcast in January. A SpaceX rocket will carry a Tesla Roadster sports car owned by Musk as payload when it travels toward Mars.

While an avid fan of vehicles running off renewably produced electricity, Musk’s Dragon flights are powered by Falcon 9 rockets running off of LOX (liquid oxygen) combined with RP-1, or rocket grade kerosene.

Bill Gates’ old business partner, Microsoft co-founder Paul Allen, sees a large opportunity in offering shared rides to outer space. SpaceFlight, backed by Allen, is already booking payloads on flights and has bought up the capacity of a SpaceX rocket that can be shared by paying customers.

Virgin Group founder Richard Branson’s has already spent more than $600 million to help get commercial passenger flights into suborbital space by the end of 2018.

Branson’s Virgin Galactic spaceflight company will be bringing hyper-fast airline flights to get from places like Boston over to Beijing. Its vehicles will likely fly at a top speed of Mach 2, about twice the speed of sound – or about 774 mph. Branson sees Virgin Galactic someday providing luxurious flight experiences to passengers going to places like Mars.

A study published in August by Bloomberg profiled some of the world’s wealthiest entrepreneurs who’ve invested in space travel startups and technology innovations.

Bill Gates is investing in Kameta, supporting efforts to bring the company’s mTenna satellite technology to market, with is designed around bringing communications to cars, planes, and boats.

Facebook founder Mark Zuckerberg is helping fund SETI, a University of California, Berkeley, project. One of its efforts has been Breakthrough Listen, which is looking into the existence of extraterrestrial lifeforms.

While these entrepreneurs see value in software, electric cars, social media, e-commerce, and airlines, each of them expects space travel to account for a growing part of the global economy. Thousands of residents of planet Earth have expressed interest in living on Mars, and there’s a growing market for rare metals that must be extracted from asteroids, comets, and other planets.

There’s also the appeal of offering hyper-fast trips to wealthy passengers willing to put down thousands on a trip around the Earth’s orbit. Since 2001, a Virginia-based company called Space Adventures has offered multimillionaires the opportunity to ride on a Russian flight to the International Space Station.

Earlier this year, Musk announced a bold new mission for SpaceX during 2018. Two unnamed passengers will be flying a roundtrip around the Moon. It will be the first private enterprise to offer that trip beyond government-funded astronaut space flights.

By John LeSage for

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Published at Tue, 12 Dec 2017 15:01:25 +0000

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Use balance transfers to start 2018 with path to pay off debt


Use balance transfers to start 2018 with path to pay off debt

NEW YORK (Reuters) – When the U.S. Federal Reserve raises interest rates, as it did on Wednesday by a quarter-percentage point, the first pinch consumers usually feel is higher interest rates on credit cards.

U.S. outgoing Federal Reserve Chair Janet Yellen arrives for a news conference after a two-day Federal Open Market Committee (FOMC) meeting in Washington, U.S. December 13, 2017. REUTERS/Jonathan Ernst

Zero-interest balance transfers can offer respite from higher credit card rates, if used properly. These cards allow a person with debt (and a decent credit score) to move their balance to a new card and have no interest for an introductory period. Today’s offers typically top out at 21 months.

“I would jump on it sooner rather than later,” said Greg McBride, chief financial analyst for, whose expectation of three more rate hikes by the Fed in 2018 is in line with the Fed’s own projection.

That is because annual percentage rates on credit cards are currently averaging over 16 percent, and outstanding credit card debt is about to hit $1 trillion, said Jill Gonzalez, senior analyst for, a personal finance site. The average U.S. household has about $8,100 in credit card debt, which can cost a consumer over $1,000 a year in fees and finance charges.

While it sounds like a simple plan, people in debt do not necessarily have all the facts that could help them to make balance transfers happen., a division of LendingTree, surveyed 1,000 Americans with credit card debt in September and found that half did not take out balance transfers because they did not understand the process.

If you want to start the new year with some financial breathing room, here are the steps you need to take.


Most zero-percent cards charge a 3 to 5 percent fee for a balance transfer. But some currently offer this service for no fee – like BankAmericard’s basic card and Chase’s Slate. Both cards feature a zero-percent interest rate for 15 months, said Brian Karimzad, vice president of research for

There are online calculators to help you decide which card is right for you, such as the one at (

But in general, the math is generally simple enough to do in your head.

If you are transferring $10,000, for example, and the balance transfer fee is 3 percent, you would pay $300. Your new balance will be $10,300 and you have up to 21 months to pay it down, said Jocelyn Baird, an associate editor at NextAdvisor.

If you wanted to rid yourself of this debt by the end of that term, pay $490 a month.

Keep in mind that if you choose a card with no fee but a shorter term, you may not be able to pay off the entire debt by the end of the zero rate period. And if you do not pay off the balance before the zero-rate period ends, the interest payments could end up exceeding the amount of the transfer fee.


While it is tempting to load up charges on a new card, you should not use the balance transfer card for anything else. The new charges will eat up all your payments, and may end up cancelling out your zero percent rate if you do not pay off the new charges in full.

Put it on an “island,” suggested Gonzalez. Direct your day-to-day spending card on another island. Use a third card just for travel that gets great rewards.


Pay down the debt on the balance transfer card above the suggested monthly minimum.

“Even if you don’t clear it at the end of that zero percent, if you’ve made a good effort, you’ll have chipped away at a significant portion of that debt,” says NextAdvisor’s Baird.

The final step is to address the actual problem that caused your debt.

“You have to fix the root issue,” said’s McBride. “If that was habit of overspending, that’s the fire you have to fight. You have to discipline yourself and hold yourself accountable to a strict budget. Don’t buy things you can’t afford right away.”

(This version of the story corrects typographical error in company name NextAdvisor in paragraph ten.)

Editing by Lauren Young and Leslie Adler


Published at Thu, 14 Dec 2017 00:19:14 +0000

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Disney deal set to value Fox at more than $75 billion: source

by WolreChris from Pixabay


Disney deal set to value Fox at more than $75 billion: source

(Reuters) – Walt Disney Co’s (DIS.N) deal to buy film, television and international businesses from Rupert Murdoch’s Twenty-First Century Fox Inc (FOXA.O) will value the latter at over $40 per share, or $75 billion, a person familiar with the matter said.

The deal, which is set to be announced on Thursday, will end more than half a century of expansion by Murdoch, 86, who turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world’s most important global news and film conglomerates.

Under the terms of the all-stock deal, Fox assets that will be sold to Disney, including the Twentieth Century Fox movie and TV studio, cable networks and international operations will be valued at around $29 per share, the source said on Wednesday.

Fox’s remaining assets, focused on news and sports, will be offered to existing Fox shareholders in a new company likely to be valued at more than $11 per share, according to the source, which asked not to be identified ahead of an official announcement.

Disney and Fox did not immediately respond to requests for comment. Fox shares ended trading on Wednesday at $32.75, giving it a market capitalization of $30.34 billion. The Wall Street Journal first reported on the exact terms of the deal.

The deal will mark a return by Murdoch to focus on the news business, his lifelong passion. Australian-born Murdoch inherited his father’s newspaper business in 1952 and transformed it over many years, acquiring premiere properties such as the Wall Street Journal, the London Times and the 20th Century Fox movie studio.

Murdoch’s shift to selling assets rather than buying them has come as a surprise to many who expected the 86-year-old to hand over the businesses to his sons, James and Lachlan.

None of the Murdochs are expected to be given board seats at Disney, according to the sources.

Disney has been struggling to bolster its TV business as cancellation of cable subscriptions is pressuring its biggest network, sports channel ESPN.

The Fox deal brings marquee franchises inside the Mouse House, on top of Iger’s previous purchases, including Pixar Animation Studios, Marvel Entertainment and “Star Wars” producer Lucasfilm.

Disney also will buy Fox’s stake in the Hulu video streaming service, giving it majority control of the competitor to Netflix Inc (NFLX.O). Hulu also is partially owned by Comcast Corp (CMCSA.O) and Time Warner Inc (TWX.N).

Under the deal, Disney will gain access to 46 million subscribers in three major markets, the U.S. Western Europe and India, according to Barclays analysts.

Reporting by Greg Roumeliotis in New York; editing by Bil Rigby

Published at Wed, 13 Dec 2017 23:04:18 +0000

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Should You Accept an Early Retirement Offer?


Should You Accept an Early Retirement Offer?

By Roger Wohlner December 13, 2017 — 5:35 PM EST

Many companies offer employees early retirement packages to encourage them to leave. This is generally done to encourage voluntary departures when the organization is looking to reduce headcount. Over the years, I’ve been asked by clients and friends whether they should accept such an offer from their company. Almost without exception, I’ve encouraged these folks to take the offer and not to look back. In my experience, once a person is on “the list,” their employer has decided they should go, and, whether now or down the road, this will generally occur.

Common Early Retirement Packages Features

Severance pay is often based upon years of service with the company. Sometimes an employer will add some additional years to sweeten the deal and make it more attractive. They may even add some years of service to get the employee to a higher payment level if there is a pension plan involved. Severance pay should also include all accrued vacation and any sick leave pay. (See also: The Layoff Payoff: A Severance Package.)

Retiree medical coverage, where available, is a benefit that covers employees until they are eligible for Medicare and may offer supplemental coverage past age 65. The number of companies offering this benefit is shrinking all the time as it is very costly.

Bridging refers to a retirement benefit that some companies may offer early retirees. This is an income supplement meant to bridge the gap between early retirement and eligibility for Social Security. The benefit amount is often equivalent to what the employee would receive from Social Security at age 62. (See also: 4 Unusual Ways to Boost Social Security Benefits.)

First Offer Usually the Best

Every situation is different, but the initial early retirement package offered by a company might include ”sweeteners” such as extended medical coverage, years of service added to a pension calculation and additional severance pay over and above what an employee would normally be entitled to. Additional incentives might include training and outplacement help. In many cases these early retirement packages and the incentives are geared to areas like the ability to receive early pension payments.

A number of years ago a friend called me to discuss an early retirement buyout offer he had received from his employer, a major local corporation. Given his age and the terms of the buyout offer, I strongly encouraged him to take the package. In the end, he declined the offer and stayed with the company. About a year later he was let go and the financial terms of his separation were not nearly as favorable as the initial early retirement package. Almost without exception, in my experience, the initial early retirement package offered by a company is the most lucrative one. (See also: The Layoff Payoff: A Severance Package.)

Refusing the Offer

Losing a job might not seem like a great opportunity, but a generous early retirement package might actually be a great opportunity for you. If you will continue to work and you are able to find a new job quickly the buyout could serve as a nice financial bonus. Turning down an early retirement offer may mean that you that you are “on the list” to eventually be let go and the terms at that point generally will not be as lucrative in the future. If you turn down the package you should have a “Plan B” in mind such as seeking another job or starting your own business, or you should have some reason to believe that you won’t be let go down the road.

What to Consider If You Accept

This situation might serve as a springboard to start your own business. If you were looking to retire in the near future anyway, this could be just the opportunity you were looking for. A client called me a few years ago absolutely giddy that his employer, a major corporation, was asking for volunteers to take a sweetened early retirement package. Between these incentives and the careful planning and investing he had done over the years, this turned out to be a fantastic opportunity to get a jump on his retirement. (See also: Seven Considerations When You Negotiate Severance.)

In analyzing whether to take an early retirement package you should at consider the following factors:

  • What impact will this have on your overall financial plan and goals such as retirement and sending your kids to college?
  • What might you do next?  Retirement? Self-employment? Look for another job?
  • If you will stay in the workforce what are your employment prospects?
  • What are your health insurance options?
  • How good are the incentives being offered? Can you or should you try to negotiate a better package?
  • Are there consulting opportunities with your soon-to-be former employer?

The Role of a Financial Advisor

If you are presented with an early retirement package you would be wise to consult with a knowledgeable financial advisor. He or she can advise you as to the financial ramifications of the package. This might include the impact on your ability to retire. While the package may include some or all of the incentives discussed above, an advisor can help you assess your overall readiness for retirement. Have you saved enough in your 401(k) or other retirement plan? What other retirement resources can you rely upon? A pension? A spouse’s retirement plan? Other tax-deferred and taxable resources? (See also: 6 Tips to Stop Worrying About Retirement.)

A financial advisor can put together a financial plan including retirement projections based on a variety of scenarios and assumptions that factor in the impact of any incentives. Planning is important because, all things being equal, an early retirement puts added stress on your retirement resources.

The tax impact of the offer must also be considered. Depending upon your age, withdrawals from your retirement plan may be subject to a 10% penalty on top of regular income taxes if you are under 59½. There are potential exceptions to this for 401(k) plans and an advisor can help determine if this applies to your situation. (See also: How to Minimize Taxes on Severance Pay.)

The Bottom Line

Early retirement packages have long been offered to groups of employees at companies to provide an incentive for them to leave the company as they seek to reduce their headcount. If you are offered a package you should strongly consider it and should engage the services of a financial advisor to help you evaluate the terms of the package and the impact on your retirement. (See also: Laid Off? You Can Still Retire.)

Published at Wed, 13 Dec 2017 22:35:00 +0000

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Blockchain, IoT, and a $3.6 trillion Infrastructure Crisis

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Blockchain, IoT, and a $3.6 trillion Infrastructure Crisis

By: Michael Kern | Fri, Dec 8, 2017

There is a crisis unfolding in the United States. Infrastructure has become dated, decayed, and vulnerable to attack. A problem which the American Society of Civil Engineers estimates says will cost the country up to $3.6 trillion to address. So where does technology fit in to the United States’ next great undertaking?

The Internet of Things (IoT) is set to completely change every aspect of infrastructure as we know it. From transportation to energy production, there is an application for IoT technology. The world is more connected than it has ever been, and harnessing the technology at the core of this connection will present unique opportunities to usher in a new era of efficiency and security.

The Internet of Transportation

The U.S. highway system was arguably one of the most beneficial projects for the country’s economy that has ever been constructed. Built in what is known as “The Greatest Decade,” 1956-1966, America’s interstate highway system gave way to new opportunities for trade and the distribution of goods. But not only is it falling behind its competitors, it’s falling apart.

As the United States looks to rebuild its infrastructure, its highway system is a top priority, and in this massive operation, the U.S. has a chance to once again emerge as a leader in new infrastructure development.

The Internet of Things will have an essential role in the new highway system. With the development and rollout of self-driving cars, interconnected micro-sensors will provide connectivity between smart vehicles, creating a virtual highway on top of the physical highway. The development of this web of connection will be vital to navigation and safety of tomorrow’s self-driving fleet of cargo trucks and personal cars.

Additionally, the internet of transportation will provide a new opportunity to harness and distribute energy. Using piezoelectric crystals layered on the country’s new highways, energy could be generated from cars’ vibrations and with the addition of the expansive distribution of micro-sensors, energy can be connected to existing power grids, monitored, and secured, creating an entirely new source of power for U.S. cities.

While outfitting the country’s vast highway system with piezoelectric crystals and censors will certainly prove to be a massive project, U.S. cities are also looking to benefit from IoT tech. A number of cities have already begun integrating the IoT with basic infrastructure. These smart transportation initiatives include more intelligent traffic lights, data collection, and new routes for public transit outfitted with tech designed to reduce costs, increase safety, and alleviate congestion.

Transportation is only one aspect of the United States’ infrastructure challenges, but perhaps the most pressing is the country’s energy infrastructure, which has come under fire due to high profile pipeline leaks and its shocking susceptibility to malicious cyber-attack.

The Internet of Energy

It’s no secret that fossil fuels will reign as the go-to source of energy around the world for years to come, but distribution and management is currently a huge issue which stands to benefit from a tech overhaul.

The United States loses billions every year due to inadequate, old, or mismanaged energy infrastructure. Just a few weeks ago, there was a leak from the controversial Keystone pipeline, spilling up to 200,000 gallons of crude oil in South Dakota. Not only is this a costly problem for taxpayers, it is extremely detrimental to the environment. The Internet of Things looks not only to address some of these issues, but create even greater efficiency than previously thought possible.

Using smart sensor networks and artificial intelligence, oil and gas pipelines, nuclear plants, or even hydro-electric dams can be monitored and shut down the second there is an issue, giving way to a new era of safety.

In addition to the safety concerns which can be addressed by the IoT, the tech can completely transform the entire supply chain. In a system where getting from point A to point B is riddled with middle-men, unnecessary delays, and lost supplies, smarter monitoring of the chain will give way to cheaper energy and a more streamlined delivery of the end-product.

Renewables stand to benefit, as well. With a greater focus on smaller, smarter, and more independent grids, powered by renewable energy, the Internet of Things may very well be the answer the industry has been looking for. Producers and consumers will be connected in a new way, with the flow of energy carefully monitored and distributed in the most efficient manner possible.

With all of these interconnected censors spread throughout tomorrow’s energy infrastructure, there is also a tremendous amount of data being collected. Using this data, it is fair to suggest that the industry as a whole will be able to be analyzed and improved over time. But building and maintaining this huge collection of data and connecting the country’s most critical infrastructure on such a level also gives way to a new challenge – protecting it against malicious cyber-threats.

The Internet of Blockchain

There have already been several high-profile attacks on critical infrastructure around the world, with the most notable being Ukraine’s wide spread power outages in 2015 and 2016, which highlights a pressing need for new solutions to secure our grids. While it’s not entirely clear exactly how vulnerable America’s infrastructure is to malicious attack, the Federal Energy Regulatory Commission (FERC) has expressed its concerns.

John Wellinghoff, former chair of the FERC, noted: “We never anticipated that our critical infrastructure control systems would be facing advanced levels of malware.”

Enter blockchain tech. The decentralized nature of the technology creates a system which requires no approval from a single authority, and a ledger in which the blocks and transactions within the blocks created are viewable by anyone, while the content of the transactions remain private.

Sending and storing the vast amounts of information created by the IoT becomes seamless and secure. Because the information sent is unable to be changed or redirected, potential threats to the infrastructure are decreased drastically.

Though security risks are greatly reduced with new technology, it is not entirely free from potential attacks. Social engineering is already a huge piece of the hacking puzzle. Pretexting, phishing, and even tailgating have all been used to gain entry to some of the most secure places on the planet. While technology has the potential to create a safer world, it Is still up to the people in vulnerable positions to remain vigilant.

By Michael Kern via Crypto Insider

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Published at Fri, 08 Dec 2017 15:45:15 +0000

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These companies are coming clean on climate change


Exxon's climate change problem: A timeline
Exxon’s climate change problem: A timeline

These companies are coming clean on climate change

Hundreds of major companies have promised to come clean on the risks from climate change.

Nearly 240 firms have signed up to a disclosure campaign led by billionaire Michael Bloomberg and Bank of England Governor Mark Carney. The number has more than doubled over the past six months.

BlackRock(BLK), Burberry(BURBY), JPMorgan Chase(JPM) and Mercedes-Benz owner Daimler(DMLRY) have all promised to reveal information about climate change in a standardized way, much like they report quarterly earnings.

The firms will report on topics such as carbon footprint, energy usage, risk management plans and strategy to slow climate change. The new signatories were revealed at a summit to celebrate the second anniversary of the Paris Climate Agreement.

“[Investors are] looking for this financial information,” Carney told Bloomberg TV. “Now they have a framework to get it.”

Bloomberg, the former mayor of New York City, said the firms will benefit by demonstrating to employees, customers and shareholders that they are being environmentally friendly, managing climate risks and pursuing climate-related business opportunities.

“If the investing public likes what they are doing, they’ll get a higher valuation, their stock will go up and [corporate] bonuses will be bigger,” he said.

The announcement was made one day after oil giant Exxon Mobil(XOM) bowed to shareholder pressure and agreed to disclose more details on how climate change could affect its business.

Some of its top rivals, including Shell(RDSA), Statoil(STO) and Total(TOT), have signed up to the initiative promoted by Bloomberg and Carney, which is called Task Force on Climate-related Financial Disclosures.

Carney said there is huge demand among top investment houses and insurance firms to see climate data as they make financial decisions.

“You now have the mass of the financial sector saying, ‘We want to distinguish between those who can see the [climate] opportunities, those who can manage the risks, and [those] companies that just don’t know the answers.’ ” he said. “It’s going to be more awkward to be in that last group.”

President Trump announced earlier this year that the United States, which is the world’s second biggest carbon emitter, would pull out of the Paris accord.

“Regardless of what our president [is doing]… the federal government doesn’t really have a lot of say in all of this,” said Bloomberg.

“In some senses, I think Trump has been helpful because he’s at least brought the issue out,” he said. “Those of us who think there really is [an environmental] problem, and hope to convince him that there is, we’ve rallied together.”

Published at Tue, 12 Dec 2017 15:18:17 +0000

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VW executive convicted in U.S. may seek transfer to Germany: Welt am Sonntag


VW executive convicted in U.S. may seek transfer to Germany: Welt am Sonntag

BERLIN (Reuters) – Volkswagen (VOWG_p.DE) executive Oliver Schmidt, convicted in the United States this week for his role in the German carmaker’s emissions scandal, may ask to serve his prison sentence in Germany, German weekly Welt am Sonntag reported, citing sources close to Schmidt.

The paper said such a request would have to be approved by the U.S. Department of Justice as well as a German court.

Schmidt was sentenced on Wednesday to seven years in prison and fined $400,000, the maximum possible under a plea deal the German national made with prosecutors in August after admitting to charges of conspiring to mislead U.S regulators and violate clean-air laws.

Schmidt read a written statement in court acknowledging his guilt.

Welt am Sonntag quoted Schmidt’s lawyer Alexander Saettele as saying that he was looking into a possible appeal but that no decision had been made yet.

The verdict “was not a surprise, but it was still disappointing to him that he was not able to get through to the judge,” Saettele told the paper.

Saettele of Berlin-based lawfirm Danckert Huber Baerlein was not immediately available for comment outside his firm’s office hours.

David DuMouchel, a Detroit-based lawyer for Schmidt of lawfirm Butzel Long, declined to provide any details on the case.

“There are a number of matters that remain to be done and so the matter is still active and therefore I cannot comment,” he said in an e-mailed statement.

Schmidt also still faces possible disciplinary action at Volkswagen, including damages claims and termination of his contract, according to a company spokesman.

“That is an integral part of the compliance guidelines of any company,” the spokesman told Reuters on Friday.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to elude emissions tests.

Schmidt was in charge of the company’s environmental and engineering office in Auburn Hills, Michigan, until February 2015, where he oversaw emissions issues.

U.S. prosecutors have charged eight current and former Volkswagen executives.

Reporting by Maria Sheahan; Additional reporting by Jan Schwartz; Editing by Elaine Hardcastle

Published at Sat, 09 Dec 2017 23:04:23 +0000

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Why Isn’t Wall St. Backing The Next Shale Boom?

Why Isn’t Wall St. Backing The Next Shale Boom?

Only four of the companies in our Large-Cap Growth Portfolio are trading today in the upper half of their 52-week ranges: Concho Resources (CXO), Continental Resources (CLR), EOG Resources (EOG) and Diamondback Energy (FANG).

No doubt, these four companies are solid and have a lot of running room, but so are the other 12 companies.

Plus, all of the upstream oil & gas companies we follow are in much better shape today than they were a year ago. So, why is the Wall Street Gang not moving more money into these high quality upstream companies?

1. FEAR: This oil price cycle has been much worse and lasted much longer than previous cycles. Wall Street analysts are afraid to recommend upstream oil & gas companies when they fear an oil price pullback might come the next morning. I guess it is easier to recommend buying Bitcoin in your IRA even though no one on earth can explain the valuation.

2. There is not much confidence in OPEC + Russia sticking with their production quotas, despite the fact that they have actually been quite disciplined. In my opinion, OPEC + Russia must push up oil prices if they wish to survive. Even Saudi Arabia cannot survive Brent under $70 for more than a few more years. 2/3s of the OPEC nations are already bankrupt.

3. Wall Street still thinks the U.S. shale oil producers will ramp up production each time they can hedge oil over $50. Per EIA: U.S. crude oil production rose by 25,000 barrels per day (bpd) last week to 9.71 million barrels per day, bringing output close to levels of top producers Russia and Saudi Arabia. Early this year, the EIA predicted that U.S. oil production would top 10.0 million barrels per day by December 31st. Obviously that isn’t going to happen. My swag is that it will be difficult for the U.S. to get to and maintain production over 10.0 million barrels per day, unless oil prices go a lot higher. Global demand for oil will continue to go up by 1,500,000 barrels per day year-after-year and there is no way that the United States can keep up with the global rate of demand growth on its own.

4. Fear that electric vehicles will destroy demand for gasoline. My swag: Twenty years from now EVs will still be less than 10 percent of the vehicles on the road. Plus, no one knows where the battery materials are coming from even to make that happen. I am very bullish on a few lithium companies, especially Nemaska Lithium (NMKEF). I think the home market for power storage is much larger than the vehicle market.Related: Gas Shortage Has China Backtracking On Coal Ban

So, what will it take for Wall Street to wake up? Answer: a “Paradigm Shift”

A paradigm shift occurs when the under-lying assumptions that a person is basing their actions on are proven or perceived to be wrong. New assumptions cause a change in behavior.

Here is what I believe will cause a Paradigm Shift on Wall Street with regard to investing in upstream oil & gas companies:

1. Within six months, OECD oil in storage will dip below the 5-year average. There is already less than 30-days’ supply of oil in OECD storage, which is more important than the 5-year average.

2. Each year there is a big increase in demand for oil in the second quarter. 2018 will be no different than previous years. U.S. inventories of refined products are low today, so refinery utilization should remain high (93.8 percent per yesterday’s EIA report, compared to 90.4 percent a year ago). Winter has arrived in the Northeast U.S. an area that still burns a lot of oil for space heating.

3. The technical pattern for oil confirms strong support level at $55. This morning WTI moved briefly below $56 and then moved higher. In my opinion, the higher lows on each pullback since June 21st (when WTI dipped to $42) are very bullish.

Hang tough: It only takes a few Wall Street firms recommending rotation into the energy sector and “The Herd” will follow.

By Dan Steffens for

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Published at Fri, 08 Dec 2017 15:47:17 +0000

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Intel Stock Nears Breakdown From Key Support Levels


Intel Stock Nears Breakdown From Key Support Levels

By Justin Kuepper | December 8, 2017 — 11:17 AM EST

Intel Corporation (INTC) shares have been trending lower since making 52-weeks highs of $47.30 in early November. Despite the recent weakness, the company has outperformed many other chipmakers that experienced similar sell-offs over the past month as traders took profit off the table, including Advanced Micro Devices, Inc. (AMD) and NVIDIA Corporation (NVDA). All of these companies had realized strong gains since the beginning of the year.

The positive news is that the industry’s fundamental performance has remained strong. During the third quarter, Intel’s revenue rose 2.3% to $16.15 billion – beating consensus estimates by $420 million – and net income of $1.01 per share beat consensus estimates by 21 cents per share. Management also raised its fourth quarter guidance to revenue of $16.2 billion and net income of 86 cents per share, both of which were above consensus estimates. (See also: Intel Stock Well Positioned for Year-End Rally.)

Technical chart showing the performance of Intesl Corporation (INTC) stock

From a technical standpoint, the stock moved sharply lower from its highs made earlier this year to trendline and S1 support around $43.38. The relative strength index (RSI) moderated to neutral levels of around 44.98, while the moving average convergence divergence (MACD) remains in a bearish downtrend dating back to mid-November. The stock remains significantly higher than its 52-week lows despite the recent downturn.

Traders should watch for a breakdown from the 50-day moving average at $42.88 to S2 support at $41.91 or to close the gap to around $41.00. If the stock rebounds from these levels, traders should watch for some resistance at around $44.50 or a move to the pivot point at around $45.23. Traders should maintain a bullish long-term bias on Intel but a bearish short-term bias, especially if the stock breaks down from current support levels. (For more, see: Why Intel and Broadcom Are Still Cheap.)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.

Published at Fri, 08 Dec 2017 16:17:00 +0000

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U.S. tax repatriation plan may not cure long-term dollar weakness

By Skitterphoto from Pixabay

U.S. tax repatriation plan may not cure long-term dollar weakness

NEW YORK (Reuters) – Investors looking for the U.S. Republican tax bill to prompt multinational companies to convert foreign profits into dollars and end the worst slide in the greenback in a decade may have to temper their hopes for a prolonged rebound.

The plan, designed in part to give U.S. multinationals a reason to repatriate the roughly $2.6 trillion in profits held by their foreign subsidiaries, would slash tax rates on such previously accumulated earnings. Companies have been slow to recognize those profits on their balance sheets so they can avoid paying U.S. corporate taxes, which stand at a rate of 35 percent. (Graphic: Overseas Cash Stash –

The dollar is down roughly 8.1 percent so far this year against a basket of currencies. The greenback has suffered as the Federal Reserve has raised interest rates more slowly than expected and President Donald Trump has not been able to sign any major legislation into law. (Graphic: Dollar Rise During 2005 Tax Holiday –

Yet analysts say that even if the tax bill becomes law, the dollar may not benefit in the long term because the legislation gives companies little incentive to convert their foreign profits right away. At the same time, many large companies already have those profits in dollar-denominated securities.

The Republicans’ proposals differ from the last tax break on foreign profits, which global financial services company Unicredit said brought roughly $300 billion to the United States.

The bill President George W. Bush signed in October 2004 drastically reduced tax rates to 5.25 percent over a 12-month window and, along with aggressive tightening by the Federal Reserve, helped send the dollar nearly 13 percent higher the following year.

This time, however, the Republican bills before a conference committee would permanently change how U.S. companies’ foreign profits are taxed.

The United States would no longer collect taxes on most future earnings a company makes beyond its borders. As a result, companies would have fewer incentives to bring previously accumulated foreign profits home quickly because rates are not scheduled to revert higher.

Up to $250 billion in foreign earnings could be repatriated over an indefinite period, according to TD Securities. While that could provide some boost to the dollar, repatriation will probably not be a significant ongoing factor in the $4.5 trillion global currency market, analysts said.

“It was a one-off repatriation and mandatory in 2005 so companies took advantage of it, and the dollar benefited from it,” said Mark McCormick, North American head of FX strategy at TD Securities in Toronto. “But this tax bill doesn’t have that same urgency.”

So far, there is no final version of the tax bill. Legislation passed by the House of Representatives would allow companies to bring back foreign profits at a 14 percent repatriation tax rate, as opposed to the current 35 percent, over eight years. The Senate bill, approved over the weekend, puts the rate at 14.49 percent.

Neither bill requires companies to convert foreign profits into dollars.


Prospects of a tax break on companies’ foreign earnings and expectations of wider U.S. budget deficits helped boost the dollar to its highest levels since 2002 soon after Trump’s presidential victory in November 2016.

Now that the tax bills have passed both houses of Congress, “dollar bulls have started banging their drums” again, analysts at Unicredit said. However, they said this attitude is misguided because the vast majority of the earnings that companies will repatriate are probably already in dollar-denominated securities in the United States.

“Even a significant wave of repatriation might not lift the dollar directly, as some of the largest U.S. corporations already hold a lot of cash in dollar-denominated assets,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

In many cases, foreign profits are based in dollars held in accounts at U.S. banks, yet are treated as overseas assets on a company’s balance sheet. As a result, they are not recognized as U.S. income and are therefore not subject to U.S. taxes.

The Brookings Institution, a non-profit public policy organization based in Washington, estimates that at the 15 U.S. companies with the largest cash balances abroad, 95 percent of foreign profits are held in U.S. dollar-denominated cash or equivalents.

For example, Microsoft Corp noted in its annual report that as of June 30, roughly 92 percent of the cash and short-term investments held by its foreign units was already invested in U.S. dollar assets.

Despite some skepticism about U.S. repatriation flows, some analysts say the dollar could get a short-term boost.

“Immediately after tax reform is passed, you’re going to hear this giant sucking sound as money is heading home very quickly,” said David Woo, head of global rates and currencies research at Bank of America Merrill Lynch. Yet he does not expect a dollar rally to continue beyond the second quarter of 2018, partly due to concerns about the tax plan’s impact on the U.S. fiscal deficit.

Over the long term, the dollar will probably continue to slide, said Brian Jacobsen, multi-asset strategist at Wells Fargo Asset Management. The effects of the tax bill are already largely priced into the currency market, leaving little unexpected demand over the following 12 months, he said.

“We are positioning client portfolios for a little more dollar weakness,” he said. “Not strength.”

Reporting by Gertrude Chavez-Dreyfuss and David Randall; Additional reporting by Saqib Iqbal Ahmed and Megan Davies; Editing by Megan Davies, Jennifer Ablan and Lisa Von Ahn

Published at Fri, 08 Dec 2017 17:15:59 +0000

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California blames Wells Fargo for 1,500 fake insurance policies

California blames Wells Fargo for 1,500 fake insurance policies


Wells Fargo is being accused of more shady business.

Authorities say Wells Fargo customers in California were charged for insurance policies that they didn’t want.

A year-long investigation by the California Department of Insurance blamed the sale of nearly 1,500 of these unauthorized renters and term life insurance policies on “improper sales practices” at Wells Fargo.

These insurance policies were sold to Wells Fargo(WFC) customers at computer kiosks inside bank branches between 2008 and 2016.

Even though the insurance policies were provided by Prudential(PRU) and other third-parties, Wells Fargo’s notoriously unrealistic sales goals counted these insurance referrals towards employee compensation goals.

“Many customers complained they simply had no knowledge of ever signing up for such policies,” the complaint said.

Other Wells Fargo customers said bank employees entered their information onto a policy application “in the guise of merely issuing a quote, when in fact such applications were later submitted.” That’s despite the fact that the kiosks were supposed to be “self service” because Wells Fargo workers weren’t licensed to sell insurance.

Authorities said Wells Fargo “caused” a total of 1,469 unauthorized insurance policies to be issued to California customers. It’s not clear how many customers from other states were impacted.

California regulators are now moving to suspend or even revoke Wells Fargo’s insurance licenses, afterthe investigation found the bank “lacking in integrity,” “not of good business reputation” and having “shown incompetency or untrustworthiness.”

The probe also determined that Wells Fargo employees were selling insurance without a license.

“We are sorry for any harm this caused our customers,” Wells Fargo said in a statement, adding that it’s been cooperating with California authorities. Wells Fargo said it suspended the bank’s online insurance operation in December 2016 and is “making things right” for customers with refunds.

It’s the latest example of Wells Fargo’s rotten sales culture hurting customers. The bank has uncovered as many as 3.5 million fake bank and credit card accounts created by workers trying to meet unreachable goals.

Last week, Wells Fargo announced plans to exit the personal insurance business. It’s a significant shift for Wells Fargo. Since 2003 the bank has provided auto, homeowners, renters and umbrella personal insurance products. It plans to keep its life insurance business.

Most of the unauthorized insurance sales took place between 2008 and 2012 and concerned renters insurance issued by American Modern Insurance Group. Premiums typically ranged between $12 and $28 per month and were often automatically transferred from customer’s bank accounts.

Wells Fargo caused 1,258 unauthorized American Modern Insurance Group renters insurance policies to be issued, regulators allege. American Modern Insurance Group did not respond to requests for comment.

Investigators found another six unauthorized renters insurance policies provided by Assurant(AIZ), which replaced American Modern Insurance Group in 2012.

In a statement, Assurant said it has been “made aware of this matter” but it does not “comment on ongoing investigations.

Wells Fargo’s branch kiosks also allowed customers to sign up for term life insurance provided by Great-West Financial and Prudential. These policies had monthly premiums of $29 to $37.

California regulators uncovered 187 unauthorized Great-West term life insurance policies sold to Wells Fargo policies. Great-West terminated its agreement with Wells Fargo in 2014 following complaints, according to regulators.

“We did not suspect any fraudulent activity on the part of Wells Fargo,” a Great-West spokesman said. “We ended the relationship because we did not believe the business model was effective.”

There were another 18 unauthorized term life insurance policies at Wells Fargo when Prudential took over in 2014.

Prudential suspended its agreement with Wells Fargo in December 2016 and launched a review of the insurer’s relationship with the bank. That decision came after Prudential employees alleged in a lawsuit that Wells Fargo customers were sold insurance products they didn’t want. The Prudential lawsuit said that some insurance applications listed obviously fake home and email addresses on their applications like “Wells Fargo Drive” or “”

An investigation released earlier this year by Wells Fargo’s board of directors acknowledged that “sales practice concerns” have been “implicated” with the bank’s online insurance program. The board report said Wells Fargo has hired outside lawyers to conduct a probe into the insurance problems.

Prudential declined to comment. The insurer has said it’s willing to reimburse concerned customers.

A spokeswoman for the California Department of Insurance said that any decision to suspend or revoke Wells Fargo’s license would block the bank from selling life insurance in California.

Published at Wed, 06 Dec 2017 19:58:24 +0000

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Amazon’s Apparel Biz to Hit $85B by 2020: Instinet


Amazon’s Apparel Biz to Hit $85B by 2020: Instinet

By Shoshanna Delventhal | December 6, 2017 — 7:25 PM EST

After Inc.’s (AMZN) blowout “Turkey 5” shopping period—from Thanksgiving Day to Cyber Monday—one team of analysts on the Street expects the e-commerce and cloud computing giant to continue taking market share and adding partnerships in the apparel segment. (See also: Amazon—Not Apple—Will Be First $1T Co.: NYU Prof.)

Geared with hundreds of new brick-and-mortar locations following its $13.7 billion acquisition of natural food grocer Whole Foods Market, analysts see Amazon as better positioned to expand into markets such as apparel and pharmacy. Over the holiday, Amazon noted strong sales of its branded hardware at Whole Foods locations. In this way, consumers could start to see an apparel section, a pharmacy, and other non-food products being sold at the organic food retailer.

Largest Ever Total Available Market

Instinet’s Simeon Siegel and team, noting that Amazon may already be the biggest apparel retailer, expect sales to boom between $45 billion and $85 billion by fiscal 2020. The analysts estimate that overall apparel and accessories sales on the platform exceed $1 trillion, with “above average” online penetration and “leading gross margins” compared with other categories.

“We believe Amazon has the largest [total available market] TAM (ever), doesn’t carry socio-economic retailing stigmas, can stock a limitless number of goods on its virtual shelf and knows customers better than they do,” wrote Siegel. “Amazon’s path to book dominance provides a potential road map for apparel success, with its fiscal 2007 media progress sharing similarities to its fiscal 2017 apparel achievements.”

Instinet also sees upside in Amazon’s growing importance among brands such as the world’s largest sportswear company Nike Inc. (NKE), with whom Amazon just inked a deal. Siegel, who rates AMZN at buy, has a price target of $1,360 on the stock, reflecting an 18% upside from Wednesday close. (See also: Amazon Pushes Into New Territory—Australia.)

Published at Thu, 07 Dec 2017 00:25:00 +0000

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First Solar Stock Showing Unusual Strength


First Solar Stock Showing Unusual Strength

By Alan Farley | December 6, 2017 — 9:35 AM EST

First Solar, Inc. (FSLR) stock is sticking like glue to fourth quarter highs despite a series of bear raids intended to drop the Tempe, Arizona-based solar giant into an intermediate decline. This unusual strength suggests that the stock will head much higher in the first quarter of 2018, perhaps adding another 25% to dramatic gains posted since it bottomed out in April at a four-year low. As a result, market players should watch resistance at $62.50 for a breakout that sets off profitable buying signals.

The company raised 2018 earnings per share estimates above expectations in a Dec. 5 Analyst Day meeting, forcing many short sellers to cover positions. The bullish metrics eased newly bearish sentiment following passage of the Senate’s tax reform bill, which limits alternative energy credit provisions. On the flip side, a recent ruling on solar panel dumping by the the U.S. International Trade Commission (ITC) should underpin profits at the largest U.S. panel manufacturer starting in the first quarter of 2018. (See also: First Solar and SunPower: Effects of Solar Panel Tariffs.)

FSLR Long-Term Chart (2006 – 2017)

The company came public on the Nasdaq exchange in November 2006, opening at $24.50 and taking off in a powerful uptrend that reached $283 at the end of 2007. The stock’s value was nearly cut in half in the next 30 days, dumping to $143 ahead of an equally vigorous recovery wave that posted an all-time high at $317 in May 2008. A modest pullback accelerated during the economic collapse, dropping the stock through the prior low and into a 52-week low in the mid-$80s.

It bounced back above $200 in May 2009, stalling at the 50% sell-off retracement level while marking the highest high in the past eight years. A slow-motion decline followed, posting a series of lower highs and lower lows into a dramatic 2011 breakdown through the 2008 bear market low. The subsequent decline crushed remaining shareholders in a vertical impulse that reached an all-time low at $11.43 in June 2012.

A sturdy bounce into 2014 ended in the mid-$70s, marking major resistance that remains in force more than three years later. The stock then eased into a trading range, with support at $40 holding into a 2015 breakdown that ended at a higher low in the mid-$20s in April 2017. Committed buyers entered in force a few weeks later, generating a new uptrend that mounted broken range support in July. It stalled just above $60 in November and has spent the past five weeks consolidating impressive annual gains in a narrow range price pattern. (For more, see: The History of First Solar.)

FSLR Short-Term Chart (2016 – 2017)

A Fibonacci grid stretched across the 2016 into 2017 decline organizes two-sided price action, with the rally since April stair-stepping through harmonic resistance levels into the .786 retracement in the low $60s. Many bounces end at this critical level, while breakouts can be dramatic, generating momentum-fueled advances that complete V-shaped patterns. The 2016 high in the mid-$70s could be reached quickly if the bullish scenario plays out, offering sizable profits as long as exits are taken promptly.

On-balance volume (OBV) lifted to an all-time high at the start of 2016 and rolled into a distribution wave that ended at the same time the stock posted the deep April 2017 low. Healthy accumulation since that time has nearly reached the prior high, generating a bullish divergence, predicting that price will play catch up in the coming weeks. This bodes well for a breakout above harmonic resistance in the low $60s and a rapid ascent into the mid-$70s. (See also: First Solar Tops Q3 Earnings, Raises ’17 EPS Outlook.)

The Bottom Line

First Solar is holding close to fourth quarter highs while the Nasdaq-100​ sells off, signaling resiliency that should translate into higher prices. A breakout above horizontal resistance at $62.50 could set this rally wave into motion, targeting six-year resistance in the mid-$70s. (For additional reading, check out: Top 3 Solar Stocks as of December 2017.)

Published at Wed, 06 Dec 2017 14:35:00 +0000

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Shares of big U.S. banks jump as Senate approves tax overhaul


Shares of big U.S. banks jump as Senate approves tax overhaul

(Reuters) – Shares of the biggest U.S. banks rose on Monday, after the Senate approved a tax overhaul bill on Saturday, raising investor hopes that their earnings would get a boost from a significantly lower tax bill.

JPMorgan Chase rose 2.4 percent to hit a record on Monday, while Bank of America rose 3.5 percent to its highest since October 2008. Both were the top performers on the S&P 500 Index, which was up 0.7 percent.

Mid-cap and regional banks also gained, with KeyCorp, Citizens Financial and M&T Bank Corp rising almost 4 percent. Zions Bancorp and Comerica Inc rose more than 2.5 percent.

“Banks might be the biggest winners from the tax reforms,” Michael Mayo, a senior Wells Fargo analyst said.

Of the major S&P sectors, financials pay the highest effective tax rate at 27.5 percent, a Wells Fargo analysis of historical tax rates showed.

The tax cuts could add 16 percent to median bank earnings in 2018 and 18 percent in 2019, said Brian Klock, managing director in equity research at Keefe, Bruyette & Woods, who covers large regional banks.

Among large regional banks, Zions Bancorp, M&T Bank Corp and Comerica Inc stand to benefit the most, Klock said.

Talks will begin, likely next week, between the Senate and the House, which has already approved its own version of the legislation, to reconcile their respective bills.

While negotiations are ongoing, the legislation could cut the corporate tax rate to as low as 20 percent from 35 percent.

The tax overhaul is seen by President Donald Trump and Republicans as crucial as they head into mid-term elections in November 2018, when they will have to defend their majorities in Congress.

The S&P financial index rose nearly 2 percent to its highest since 2007, while the KBW Bank Index rose 2.7 percent.

Reporting By Aparajita Saxena; Additional reporting by Roopal Verma in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty

Published at Mon, 04 Dec 2017 16:15:42 +0000

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