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VZ | U S trade groups seen leading lawsuits against new Internet rules | By Alina Selyukh and Malathi Nayak WASHINGTON NEW YORK Reuters Trade associations representing large U S Internet service providers are expected to take the lead in suing the Federal Communications Commission over its new web traffic regulations according to several people familiar with the plan U S telecom and cable firms have said they would challenge the FCC s latest net neutrality rules in court But at least some companies including Verizon Communications Inc NYSE VZ are currently not planning to bring individual lawsuits and instead aim to participate through trade groups the sources said Such an approach would allow companies to streamline their litigation efforts and could help firms avoid drawing any fire individually as Verizon did after it challenged the previous version of net neutrality rules on its own in 2010 At least three trade groups are expected to file legal challenges CTIA The Wireless Association the National Cable and Telecommunications Association and the broadband association USTelecom the sources said The three trade groups declined comment Other trade groups such as the American Cable Association and the National Association of Manufacturers are weighing whether to participate in litigation representatives said We believe there will be a lot of litigation which will probably be led by industry associations Verizon Chief Financial Officer Fran Shammo told Reuters this week The company is likely to hold back from filing an individual lawsuit said an industry source familiar with Verizon s plan citing the company s shared concerns with other members of trade associations T Mobile too said on Wednesday it was not planning to get involved in lawsuits at this point We have not at all been vocal on the negative side of the camp and the folks that are talking about litigation Chief Technology Officer Neville Ray said in an interview Internet service providers such as Verizon AT T NYSE T and Comcast NASDAQ CMCSA have decried the FCC s vote last month to regulate broadband as a telecommunications service similar to traditional telephone service instead of a more lightly regulated information service Representatives of AT T and Comcast declined comment on Wednesday CHALLENGE TO MERITS PROCESS The industry lawsuits are likely to challenge both the merits of broadband reclassification as well as the administrative process used to adopt it according to two telecom lobbyists familiar with the discussions The first angle would likely involve an argument that the FCC overstepped its statutory authority and dramatically changed the way it regulates Internet service providers without adequate legal basis the sources said The companies have argued that the FCC has unduly decided to treat Internet providers as common carriers bound by stricter oversight after deciding against it years ago The wireless carriers in particular say that the law has long exempted them from common carrier treatment The second argument would be that the FCC did not properly inform stakeholders and the public that it was seriously thinking about switching the classification and ignored some of the arguments the companies had presented during the rulemaking the sources said FCC officials have said they fully expected court challenges and believe their rules are on much firmer legal ground than previous iterations that were rejected by the U S Court of Appeals for the District of Columbia Circuit
The FCC wrote the latest Internet rules after Verizon won its court case against prior rules in January 2014 |
VZ | U S trade groups seen leading lawsuits against new Internet rules | By Alina Selyukh and Malathi Nayak WASHINGTON NEW YORK Reuters Trade associations representing large U S Internet service providers are expected to take the lead in suing the Federal Communications Commission over its new web traffic regulations according to several people familiar with the plan U S telecom and cable firms have said they would challenge the FCC s latest net neutrality rules in court But at least some companies including Verizon Communications Inc N VZ are currently not planning to bring individual lawsuits and instead aim to participate through trade groups the sources said Such an approach would allow companies to streamline their litigation efforts and could help firms avoid drawing any fire individually as Verizon did after it challenged the previous version of net neutrality rules on its own in 2010 At least three trade groups are expected to file legal challenges CTIA The Wireless Association the National Cable and Telecommunications Association and the broadband association USTelecom the sources said The three trade groups declined comment Other trade groups such as the American Cable Association and the National Association of Manufacturers are weighing whether to participate in litigation representatives said We believe there will be a lot of litigation which will probably be led by industry associations Verizon Chief Financial Officer Fran Shammo told Reuters this week The company is likely to hold back from filing an individual lawsuit said an industry source familiar with Verizon s plan citing the company s shared concerns with other members of trade associations T Mobile too said on Wednesday it was not planning to get involved in lawsuits at this point We have not at all been vocal on the negative side of the camp and the folks that are talking about litigation Chief Technology Officer Neville Ray said in an interview Internet service providers such as Verizon AT T N T and Comcast O CMCSA have decried the FCC s vote last month to regulate broadband as a telecommunications service similar to traditional telephone service instead of a more lightly regulated information service Representatives of AT T and Comcast declined comment on Wednesday CHALLENGE TO MERITS PROCESS The industry lawsuits are likely to challenge both the merits of broadband reclassification as well as the administrative process used to adopt it according to two telecom lobbyists familiar with the discussions The first angle would likely involve an argument that the FCC overstepped its statutory authority and dramatically changed the way it regulates Internet service providers without adequate legal basis the sources said The companies have argued that the FCC has unduly decided to treat Internet providers as common carriers bound by stricter oversight after deciding against it years ago The wireless carriers in particular say that the law has long exempted them from common carrier treatment The second argument would be that the FCC did not properly inform stakeholders and the public that it was seriously thinking about switching the classification and ignored some of the arguments the companies had presented during the rulemaking the sources said FCC officials have said they fully expected court challenges and believe their rules are on much firmer legal ground than previous iterations that were rejected by the U S Court of Appeals for the District of Columbia Circuit
The FCC wrote the latest Internet rules after Verizon won its court case against prior rules in January 2014 |
VZ | FCC sued by broadband companies over net neutrality rules | By Alina Selyukh WASHINGTON Reuters U S broadband providers on Monday filed lawsuits against the Federal Communications Commission s recently approved net neutrality rules launching what is a expected to be a series of legal challenges Broadband industry trade group USTelecom filed a lawsuit against the FCC in the U S Court of Appeals for the District of Columbia which has in the past twice rejected the FCC s net neutrality regulations The group argues the new rules are arbitrary capricious and an abuse of discretion and violate various laws regulations and rulemaking procedures Texas based Internet provider Alamo Broadband Inc challenged the FCC s new rules in the U S Court of Appeals for the Fifth Circuit in New Orleans making a similar argument The rules approved in February and posted online on March 12 treat both wireless and wireline Internet service providers as more heavily regulated telecommunications services more like traditional telephone companies Broadband providers are banned under the rules from blocking or slowing any traffic and from striking deals with content companies for smoother delivery of traffic to consumers USTelecom President Walter McCormick said in a statement that the group s members supported enactment of open Internet principles into law but not using the new regulatory regime that the FCC chose We do not believe the Federal Communications Commission s move to utility style regulation is legally sustainable he said Industry sources have previously told Reuters that USTelecom and two other trade groups CTIA The Wireless Association and the National Cable and Telecommunications Association were expected to lead the expected legal challenges Verizon Communications Inc NYSE VZ which won the 2010 lawsuit against the FCC is likely to hold back from filing an individual lawsuit this time around an industry source familiar with Verizon s plan has told Reuters FCC officials have said they were prepared for lawsuits and the new rules were on much firmer legal ground than previous iterations The FCC said Monday s petitions were premature and subject to dismissal The FCC s rules have yet to be published in the Federal Register and formally go into effect though USTelecom in its lawsuit says it filed the challenge on Monday in case the rules are construed to be final on the date of issue
The case is U S Telecom Association v FCC and United States of America U S Court of Appeals for the District of Columbia Circuit No 15 1063 |
VZ | Sprint settles U S class action lawsuit for 131 million | By Jonathan Stempel Reuters Sprint Corp N S has agreed to a 131 million settlement of a class action lawsuit accusing the third largest U S wireless carrier of defrauding investors about problems dating back to its 36 billion merger with Nextel Communications Inc in 2005 The all cash settlement made public on Monday resolves claims that Sprint former Chief Executive Gary Forsee and other officials fraudulently inflated the company s stock and bond prices between October 2006 and February 2008 Investors said the defendants falsely touted that Sprint was receiving billions of dollars of benefits from the merger and improving its subscriber base by tightening credit standards Instead investors said Sprint was struggling to integrate its cellular networks and was losing hundreds of thousands of subscribers culminating in a 29 7 billion goodwill writedown in February 2008 All of the defendants denied liability in agreeing to settle the 6 year old lawsuit according to settlement papers filed with the federal court in Wichita Kansas The preliminary accord requires court approval Sprint spokeswoman Stephanie Vinge said the Overland Park Kansas based company settled to avoid the cost and distraction of litigation Sprint has and will continue to operate in complete adherence with all federal securities laws she added Japan s SoftBank Corp T 9984 now owns 80 percent of Sprint The lead plaintiffs are the United Steelworkers Pace Industry Union Management Pension Fund Skandia Life Insurance Co and the West Virginia Investment Management Board Their lawyers led by Robbins Geller Rudman Dowd and Motley Rice said the payout represented 12 1 percent of the estimated 1 079 billion of damages a percentage they called very large Tor Gronborg a Robbins Geller partner declined to comment The plaintiffs lawyers plan to seek legal fees of up to 22 percent of the settlement plus up to 4 million for expenses court papers show Shares of Sprint were down 1 1 percent at 4 70 in afternoon trading Its market value was about 18 8 billion at Monday s close The company has in recent months offered discounts to entice prospective subscribers to switch carriers Its rivals include AT T Corp N T and Verizon Communications Inc N VZ
The case is Bennett et al v Sprint Nextel Corp et al U S District Court District of Kansas No 09 02122 |
CSCO | Why Is Cisco CSCO Up 9 Since Last Earnings Report | A month has gone by since the last earnings report for Cisco Systems NASDAQ CSCO Shares have added about 9 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Cisco due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts Cisco Systems Tops Q2 Earnings Revenue EstimatesCisco Systems delivered second quarter fiscal 2019 non GAAP earnings of 73 cents per share which beat the Zacks Consensus Estimate by a penny Further the figure rose 15 9 from the year ago quarter Revenues increased 7 year over year excluding SPVSS business to 12 446 billion and marginally surpassed the Zacks Consensus Estimate of 12 401 billion Acquisitions contributed 140 basis points bps to revenue growth in the reported quarter Strength witnessed in the company s Security and Applications segments drove year over year growth Order strength and improving traction of the subscription based model were other tailwinds Notably during the second quarter of fiscal 2019 the company completed the divestiture of its Service Provider Video Software Solutions SPVSS business Top line DetailsProducts 74 5 of total revenues advanced 9 to 9 27 billion Services 25 5 increased 1 to 3 17 billion This was driven by growth in software and solutions services Revenues from subscriptions represent 65 of the company s software revenues up 10 points year over year Deferred product revenues were 6 billion down 23 1 from the year ago quarter Deferred service revenues were 11 2 billion up 2 6 from the year ago quarter Geographically Americas EMEA and APJC reported revenue growth of 7 8 and 5 on a year over year basis respectively Total emerging markets grew 6 and the BRICs plus Mexico climbed 2 In terms of customer segments enterprise increased 11 while service provider was down 1 Further commercial and public sector rose 7 and 18 respectively Total product orders increased 8 Cisco has realigned Product segments into four distinct categories infrastructure platform applications security and other Wireless Switching Aids GrowthInfrastructure Platforms 57 3 of second quarter revenues comprise Switching NGN routing Wireless and Data Center solutions Revenues grew 6 from the year ago quarter to 7 13 billion The year over year increase can primarily be attributed to robust growth across switching wireless and data center business Switching revenues witnessed robust growth across campus and data center Adoption of new campus switch Cat9K and Nexus 9K was impressive Further wireless revenues grew on the back of company s Wave 2 offerings and Meraki solution Robust demand for the HyperFlex data center solution drove data center s double digit growth Management stated that the subscription based Catalyst 9000 switching platform has been adopted by many customers This has enabled customers in becoming more flexible Moreover results benefited from persistent customer shift from 100G to 400G architectures Additionally rapid adoption of multi cloud infrastructures was a key catalyst AppDynamics Drive GrowthApplications 11 8 of second quarter revenues consist of Collaboration portfolio of Unified Communications UC Conferencing and TelePresence Internet of Things IoT and application software businesses such as AppDynamics and Jasper Revenues increased 24 from the year ago quarter to 1 46 billion Cisco had integrated its Cisco Spark with Webex Platform which enhanced Webex Meeting and enabled it to introduce Webex Teams fortifying the company s collaboration portfolio further Collaboration revenues rose primarily driven by growth across AppDynamics UC infrastructure and TelePresence endpoints Cisco recently unveiled AIOps leveraging artificial intelligence AI machine learning and automation to offer enhanced customer experiences and higher business performance Security Remains StrongSecurity 5 3 of revenues climbed 18 to 658 million Strong growth can be attributed to solid demand witnessed by web security unified threat network security and advanced threat solutions Cisco s AI driven Talos intelligence platform blocks billions of threats per day The company is striving to leverage machine learning to deploy security platforms in order to mitigate online risks on a real time basis Other ProductsOther Products segment contains service provider video cloud and system management and various emerging technology offerings Revenues fell 59 to 22 million Acquisition A Key CatalystCisco inked a deal to buy Luxtera for approximately 660 million in cash Cisco intends to deploy Luxtera s integrated optics technology capabilities across its robust network portfolio featuring capacities ranging from 100GbE Gigabit Ethernet to 400GbE This will enable Cisco to provide ultra high data heavy bandwidth services to CSPs and network service providers Further the deal will help Cisco add more vital technology to its open source software in order to build networking machinery On Jan 30 2019 the company announced its plan to acquire Singularity Networks a privately held network infrastructure analytics company Cisco had also announced that it has successfully closed the buyout of privately held Duo Security Further the integration of Duo s zero trust MFA technology with Cisco s network and cloud security platforms is likely to enhance security features and mitigate phishing incidents on devices This buyout will aid Cisco to deliver on its commitment of safeguarding customer data while focusing on people centric secure enterprise IT approach The company also closed its previously announced Burlingame CA based July Systems acquisition The private company provides cloud based mobile application platform Per the press release July Systems team will join the company s Enterprise Networking Group Operating DetailsNon GAAP gross margin contracted 100 bps from the year ago quarter to 64 1 On a non GAAP basis product gross margin and service gross margin came in at 62 8 and 67 7 compared with 63 8 and 68 7 reported in the year ago quarter respectively Non GAAP operating expenses came in at 4 billion during the reported quarter up 3 year over year As a percentage of revenues operating expenses contracted 110 bps to 31 9 Non GAAP operating margin were flat year over year and came in at 32 1 Balance Sheet and Cash FlowCisco exited the second quarter with cash cash equivalents and investments balance of almost 40 38 billion down from 42 59 billion in the prior year quarter Total debt short plus long came in at 25 63 billion compared with 25 56 billion reported in the previous quarter The company generated 3 8 billion cash flow from operations during the quarter In the second quarter Cisco returned 6 5 billion shares to shareholders in form of share repurchase and dividend The company also announced an additional 15 billion to its current share repurchase program Furthermore the company declared a quarterly dividend of 35 cents per share up 6 from the previous quarter GuidanceFor third quarter fiscal 2019 revenues are expected to grow 4 6 on a year over year basis Non GAAP earnings are anticipated between 76 cents and 78 cents per share Non GAAP gross margin is expected in the range of 64 65 while operating margin is anticipated between 31 and 32 for the quarter
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates
VGM Scores
At this time Cisco has an average Growth Score of C though it is lagging a bit on the Momentum Score front with a D Charting a somewhat similar path the stock was allocated a grade of C on the value side putting it in the middle 20 for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising It comes with little surprise Cisco has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
CSCO | Be Secure With 5 ETFs This Week That Packs A Global Punch | This week is going to be busy with several high profile global events lined up The Fed is meeting on Mar 19 20 for a monetary policy decision in the United States Key rates are expected to remain stable Per CME FedWatch Tool as many as 98 7 of the respondents believes that the rates are going to be intact at 2 25 2 5 But the meeting is crucial as the bank will update its projections for interest rates Notably the Fed has been taking a dovish stance right from the start of the year
The Brexit tale will likely come to the forefront in mid week as the EU leaders are scheduled to begin a two day meeting in Brussels on Mar 21 amid a likely third vote on the UK prime minister Theresa May s deal in the House of Commons read
Plus the Bank of England s meeting on interest rate policy is slated for Thursday Like the Fed expectations for any changes Still market watchers will inspect the minutes of the Monetary Policy Committee s decision to get an idea about how Brexit could impact the British economy according to an article published
Per Financial Times among other central bank meetings this week the Norges Bank could go for a policy tightening as the bank indicated in its January meet
However one of the key developments will emerge from an Asian country namely Thailand The country is preparing for its first election since 2014 s military coup on Mar 24 but with a and confirm the military s continuing role Politicians and parties devoted to the ruling military junta will face off against parties intending to obstruct the military rule from claiming power It now needs to be seen if democracy can return to the country The country has witnessed a lot of political turbulence in the past and
Against this backdrop it is better to stay safe with the following ETFs at the current level
Nasdaq Technology Dividend Index Fund
Tech stocks are deemed to be high risk in nature but the space is likely to survive the odds As a matter of fact elevated demand for the emerging technologies concerted efforts for automation and especially cloud per Gartner already made the space a certain winner And what could be better than a dividend angle associated with the technology spectrum It yields 2 56 annually read
iShares International Dividend Growth ETF
Dividend growth stocks or funds call for a quality exposure Since there are so many forthcoming vital global events crowding this week it is better to have a cautious approach toward global investing The underlying Morningstar Global ex US Dividend Growth Index is a dividend dollars weighted index and seeks to measure the performance of a select few international equities based on the history of consistent dividend hikes It yields 2 66 annually
S P International Developed High Dividend Low Volatility Invesco ETF
One can keep tabs on low volatility ETF The underlying S P EPAC Ex Korea Low Volatility High Dividend Index comprises 100 securities in the S P EPAC Ex Korea LargeMidCap Index which have historically provided high dividend yields with lower volatility over the past 12 months It yields 4 48 annually
iShares Global REIT ETF
Even if there is a bullish sentiment pervading the global market this week rates are likely to stay muted on dovish central banks And if there is any negative news entering the market rates are sure to dive thanks to a safe haven rally So rate sensitive global real estate ETFs are likely to benefit in either of the situation It yields 5 05 annually
Invesco CurrencyShares Japanese Yen
Investors who are extremely averse to taking risks may opt for yen ETF The currency is considered a traditional safe haven Plus the Japanese economy delivered in Q4 of 2018 A strengthening economy should also shore up its currency
Want key ETF info delivered straight to your inbox
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CSCO | Cisco invests 15 mln dollars in Israeli storage firm Elastifile | JERUSALEM Reuters Cisco Systems O CSCO has invested 15 million in Israeli storage software start up Elastifile bringing total investment this year to 50 million Elastifile said on Tuesday Elastifile which helps enterprises scale out primary storage has said the additional funds would enable it to aggressively market its technology that enables customers to expand the number of applications they can deploy on flash In January it raised 35 million in a second private funding round led by existing investors Battery Ventures and Lightspeed Venture Partners |
CSCO | Arista infringes Cisco networking patents U S trade agency rules | By Andrew Chung NEW YORK Reuters Network equipment maker Cisco Systems Inc NASDAQ CSCO won a key victory in a sprawling legal battle with rival Arista Networks Inc on Thursday after the U S International Trade Commission ruled Arista infringed three of Cisco s patents with its ethernet switches used in computer data centers and servers The trade commission upheld a finding of infringement by a U S trade judge in February The ITC which investigates complaints of violations of U S intellectual property also recommended an import ban against Arista s products that infringe the patents The ITC s ruling must now be reviewed by the U S Trade Representative who can approve or disapprove of the commission s orders Arista was down more than 3 percent to 71 50 in after hours trading while Cisco was unchanged Cisco s patents relate to managing and securing communications networks The company filed its trade complaint in December 2014 seeking a ban on Arista s switches The ruling if approved could lead to the exclusion of Arista s 7000 series of switches which generate most of the company s product revenue according to regulatory filings Arista however has said it redesigned the software in its switches to address the ITC s findings Cisco says Arista has not presented its purported redesigns to the ITC This marks the end of Arista s ability to mislead its shareholders and customers about the infringing nature of their products Cisco senior vice president Mark Chandler said in a statement Arista said it intends to comply with the orders The company s senior vice president Marc Taxay said in a statement that Cisco was using litigation to preserve its market share If allowed to succeed Cisco s scheme would have a chilling effect on innovation While we will defend our rights in these actions our primary focus remains on the continued supply of products to our customers The trade action is one front in a fierce legal battle between Cisco and Arista which was formed by former Cisco employees Cisco has a second trade related investigation pending and a judge is scheduled to release findings in that case in August The companies both based in California have also sued each other in federal court in San Jose Arista has requested the U S Patent and Trademark Office review the validity of several Cisco patents Companies frequently turn to the ITC to win an import ban and to district court to win damages
The case is In the Matter of Certain Network Devices 337 944 at the U S International Trade Commission |
VZ | AT T Follows T Mobile US Unveils Offers To Thank Customers | AT T Inc NYSE T announced its plan AT T THANKS to reward customers The move came on the heels of its rival T Mobile US Inc s NYSE T similar but far more generous Get Thanked offering As part of the plan AT T will be giving out movie tickets as freebies every week Additionally the company has joined hands with Live Nation Entertainment Inc NYSE LYV to gain access to tickets to select concerts before they are made available to the general public The DetailsAs per AT T s Ticket Twosdays plan wireless postpaid customers will be given a free ticket if they purchase one on Tuesdays at their full price The telecom giant has teamed up with AMC Entertainment Holdings Inc NYSE AMC and Regal Entertainment Group for this offer However AT T has not disclosed the total amount of tickets that will be made available instead saying that they will be handed out to customers until supplies last each week T Mobile s Get Thanked AT T has basically followed T Mobile US s suit T Mobile recently launched the Get Thanked program under which it gives out free Domino s pizzas Wendy s ice creams movie rentals and other freebies through its T Mobile Tuesdays app Additionally the company introduced the unique Stock Up plan under which the wireless carrier would grant a stock to each of its customers However the implementation of the program was impeded by overloading servers and Domino s Pizza opting out due to overwhelming demand The Bottom LineCompetition in the U S telecom space has been intensifying of late With relatively smaller carriers like T Mobile US and Sprint Corp luring customers through attractive offers like freebies behemoths of the industry like Verizon Communications Inc NYSE VZ and AT T have been facing challenging conditions Thus to tackle competitive threats it was inevitable that AT T would step in with a similar measure Nevertheless we are concerned about the impact of the same on the company s margins going ahead AT T presently has a Zacks Rank 3 Hold |
VZ | Pursuit Of Yield Continues To Benefit Returns For 2016 Dow Stocks | Investors continued pursuit of income in this low bond interest rate environment has led them to higher yielding stocks Partial evidence of this can be found in the total return of the Dogs of the Dow basket of stocks this year
As noted in earlier posts the Dogs of the Dow strategy is one where investors select the ten stocks that have the highest dividend yield from the stocks in the Dow Jones Industrial Index after the close of business on the last trading day of the year
Once the ten stocks are determined an investor invests an equal dollar amount in each of the ten stocks and holds them for the entire next year
The average YTD total return through July 1 2016 of the ten 2016 Dogs of the Dow equals 15 4 This compares to the SPDR Dow Jones Industrial Average NYSE DIA and SPDR S P 500 NYSE SPY returns of 4 4 and 4 0 respectively
The top performing Dow Dog this year is Verizon NYSE VZ returning 24 5 Of course it was also the highest yielding Dow Dog at the beginning of 2016
Below is a table containing various metrics on the 2016 Dogs of the Dow
A full list of the Dow stocks with return and yield data can be found at |
VZ | Japan s SoftBank third quarter profit slips 5 9 percent no end to Sprint costs | By Teppei Kasai TOKYO Reuters Japan s SoftBank Corp said on Tuesday its third quarter operating profit slid 5 9 percent missing estimates as the ambitious mobile telecom firm continues to soak up the cost of trying to turn around loss making U S unit Sprint Corp SoftBank which took over the number 3 U S carrier for more than 20 billion in 2012 said October December operating profit was 191 39 billion yen 1 6 billion down from 203 46 billion yen a year ago That trailed the 219 08 billion yen average of five analysts estimates compiled by Thomson Reuters StarMine Japan s third biggest mobile carrier by subscriber numbers kept its operating profit forecast for the fiscal year ending March unchanged from 900 billion having cut the target by 10 percent in its last quarterly report citing Sprint costs Overall SoftBank is doing well but with Sprint being in a tough situation I think it will have a long battle to fight SoftBank s Chief Executive Masayoshi Son told reporters in Tokyo The comments echoed Son s message from the previous quarter underlining the scale of the task in ending losses as Sprint The company 80 percent owned by SoftBank is locked in intense competition with larger rivals AT T Inc and Verizon Communications Inc to retain subscribers Earlier this month Sprint reported revenue for the quarter ended December fell less than expected as the U S mobile provider attracted more subscribers by cutting prices and offering promotions Still Sprint s net loss more than doubled to 2 38 billion SoftBank bought the number three U S mobile carrier as part of Son s drive to expand outside Japan s sluggish economy but Sprint has been undergoing a painful revamping of its network cutting thousands of jobs that has caused a mass exodus of subscribers On Tuesday SoftBank said it booked a loss of 29 51 billion yen to cover in severance costs associated Sprint job cuts In the same period a year earlier the comparable figure was 5 34 billion yen
1 118 5000 yen |
VZ | Sprint says U S telecoms will invest despite stronger net neutrality | By Malathi Nayak SAN FRANCISCO Reuters With its surprise endorsement of a stricter U S regulatory regime for Internet service providers Sprint Corp N S wanted to show that tougher rules would not stop rival telecom players from investing Chief Technology Officer Stephen Bye said in an interview It s one of those topics that is highly charged highly politicized and we took a step back and said it works in the interest of our customers our consumers and the industry and we frankly found some of the arguments of our competitors to be less than compelling Bye told Reuters this week Our competitors are going to continue to invest so they are representing a situation that won t play out he added Sprint s stance starkly contrasts with that of other U S wireless and cable companies such as Comcast Corp O CMCSA Time Warner Cable Inc N TWC Verizon Communications Inc N VZ and AT T Inc N T The companies say they support net neutrality the concept that all web traffic should be treated equally but vehemently oppose the Federal Communications Commission s proposal to regulate Internet service providers more strictly under a section of communications law known as Title II which would treat them more like traditional telephone companies They are expected to challenge the rules in court after the FCC votes on them on Feb 26 In a call with investors last week Verizon s Chief Executive Officer Lowell McAdam said that the stronger regulatory regime is completely the wrong way to go and would stifle job creation and innovation But Bye said that the government s recent record setting 44 9 billion spectrum auction is a great proof point of the level of investment the companies in the industry are willing to make AT T and Verizon emerged among top buyers in the auction with bids worth 18 2 billion and 10 4 billion Sprint did not participate in the auction eyeing the next auction in 2016 The notion that some of our competitors are suggesting that they will stop investing if Title II is brought into effect That s something we ve refused Bye said Sprint s public support of stricter net neutrality rules revealed in a Jan 15 filing in the run up to FCC Chairman Tom Wheeler s latest proposal last week took the industry and competitors by surprise The proposed rules would ban Internet providers from blocking or slowing down websites or charging companies for swifter delivery of their content But Wheeler also sought to address some Internet providers concerns saying he would not pursue price regulations tariffs or requirements to give competitors access to their networks In the terms of Title II with the appropriate forbearance we made the point that we really don t see this as negative for the industry at all Bye said Sprint is the third largest U S wireless carrier based on subscribers Bigger rivals AT T and Verizon have market capitalizations about 10 times that of Sprint s 19 47 billion Given the sheer scale of AT T and Verizon s operations some analysts have argued that they have more at stake when it comes to net neutrality rules |
VZ | China January FDI grows at strongest pace in four years | BEIJING Reuters Foreign direct investment FDI in China grew at its strongest pace in nearly four years in January surging 29 4 percent from a year earlier to 13 9 billion as investors largely shunned the troubled manufacturing sector and focused on the more resilient services industry But analysts cautioned about reading too much into economic indicators for January alone given the strong seasonal distortions caused by the timing of the Lunar New Year holidays which began on Jan 31 last year but start on Feb 19 this year January FDI rose 4 5 percent from December the Commerce Ministry said on Monday In terms of value January FDI was the highest since June 2014 Earlier data showed FDI in China rose just 1 7 percent in 2014 the slackest pace since 2012 The weak performance underscored a cooling economy which is spurring more Chinese firms to plow money into assets overseas in a trend that is soon set to overtake inbound investment Foreign direct investment is an important gauge of the health of the world economy and is also a good indicator of where capital is flowing within the country Shen Danyang the ministry s spokesman told reporters that China s foreign direct investment will be stable for 2015 but it was too early to predict whether China will continue to be the world leader in attracting FDI this year China overtook the United States to become the top destination for FDI in 2014 largely due to falling inflows caused by a deal between U S firm Verizon Communications Inc N VZ and its British partner Vodafone L VOD according to the United Nations economic think tank UNCTAD We are fully confident that China s FDI will be among the highest in the world this year Shen said But he conceded that China s foreign trade still faces many uncertainties as the global economic recovery remains fragile He added that while the world s second largest economy should pay attention to deflationary risks China has not sunk into a deflationary cycle In January the top 10 investors led by Hong Kong South Korea Singapore Taiwan and Japan made up for 96 5 percent of China s FDI the ministry said In line with China s manufacturing slowdown the data showed investors were flocking to the services industry which has remained relatively buoyant Foreign direct investment in the services sector hit 9 2 billion in January up 45 1 percent from a year earlier and accounting for 66 percent of total FDI China s outbound direct investment ODI hit 10 2 billion in January up 40 6 percent from a year earlier the ministry said Last year China drew a record 119 6 billion worth of FDI while ODI surged 14 1 percent to a new high of 102 9 billion
The government has been encouraging Chinese firms to invest abroad to help them become more competitive internationally utilize their surplus capacity and help slow down the rapid build up of foreign exchange reserves |
VZ | Eighty percent of global merchants fall short on card data security compliance report | CHICAGO Reuters Four out of five global retailers and other merchants failed interim tests to determine whether they are in compliance with payment card data security standards putting them at increased risk of cyberattacks according to a new report by Verizon Communications Inc NYSE VZ
Businesses must be vigilant in maintaining security to remain compliant with the Payment Card Industry Data Security Standard PCI DSS required by payment card issuers Most of the companies have a tendency to run upgrades of security software and hardware only when they approach an annual compliance check according to Verizon
The report which gathered data in 30 countries by assessing more than 5 000 merchants including retailers financial institutions and hospitality firms among others found only 20 percent of those tested to be fully compliant less than a year after installing security safeguards
From 2013 2014 overall compliance went up by 18 percentage points for 11 out of the 12 payment data security standards
The report acknowledged the standards are only a baseline an industry wide minimal acceptable standard The volume and scale of breaches in the past 12 months have shown that this is not stopping attackers Verizon said
However out of all the data breaches in the past 10 years that Verizon studied not a single company was found to be compliant at the time of the breach
Credit and debit cards account for two thirds of purchases by value in the United States A further 2 17 trillion is spent via electronic methods such as PayPal and mobile payments many of which are ultimately backed by card transactions the report said |
CSCO | Best Sector Of February And Its Top ETFs Stocks | The technology sector which is heavily depended on China for revenues has been the biggest beneficiary of the optimism surrounding trade deal between the United States and China This is especially true as the nearly year long trade spat between the world s two largest economies seems to be coming to an end after Donald Trump delayed his plan for raising tariff on 200 billion worth of Chinese goods from 10 to 25 indicating a fruitful trade deal read A slew of stronger than expected earnings results by major technology firms also supported investors sentiment Additionally the sector s long term story remains intact with the emergence of cutting edge technology such as cloud computing big data Internet of Things wearables VR headsets drones virtual reality artificial intelligence and machine The deployment of 5G fifth generation technology the next wireless revolution is creating further opportunities The wave of mergers and acquisitions is also providing further impetus to the space Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology which perform typically well in a maturing economic cycle Moreover the technology sector boasts a solid rank which places it in the of the 16 Zacks Sectors in terms of ranking The bullish trend is likely to continue at least in the short term Given this investors might want to tap into the space with the top performing technology ETFs and stocks over the past month For them we have highlighted five ETFs and stocks that are poised to perform well heading into the conclusion of the first quarter Best ETFsiShares North American Tech Multimedia Networking ETF AX IGN This ETF provides exposure to telecom equipment data networking and wireless equipment companies by tracking the S P North American Technology Multimedia Networking Index read Zacks Rank 2 Buy AUM 97 5 millionExpense Ratio 0 47 1 Month Return 14 4 Invesco Dynamic Networking ETF This fund follows the Dynamic Networking Intellidex Index which measures the performance of the companies engaged in the development manufacture sale or distribution of products services or technologies that support the flow of electronic information including voice data images and commercial transactions read Zacks Rank 3 Hold AUM 78 3 millionExpense Ratio 0 63 1 Month Return 11 6 SPDR S P Software Services NYSE XSW ETF This fund targets the software and services segment of the broad technology sector and follows the S P Software Services Select Industry Index Zacks Rank 2AUM 184 9 millionExpense Ratio 0 35 1 Month Return 11 2 SPDR S P Technology Hardware ETF It offers equal weight exposure to the technology hardware segment and tracks the S P Technology Hardware Select Industry Index Zacks Rank 3AUM 7 7 millionExpense Ratio 0 35 1 Month Return 11 First Trust Nasdaq Cybersecurity ETF This ETF follows the Nasdaq CTA Cybersecurity Index which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors read Zacks Rank N AAUM 802 millionExpense Ratio 0 60 1 Month Return 10 8 Best StocksJason Industries Inc NASDAQ JASN It is engaged in the manufacturing of Finishing Seating Components and Automotive Acoustics Zacks Rank 3VGM Score AMarket Cap 69 04 million1 Month Return 85 3 SITO Mobile Ltd NASDAQ SITO It is a technology based mobile solutions provider offering wireless application development publishing and distribution read Zacks Rank 3VGM Score DMarket Cap 61 81 million1 Month Return 80 Pareteum Corp NASDAQ TEUM It is a provider of mobile software defined network architecture platforms for the telecommunications industry Zacks Rank 3VGM Score FMarket Cap 382 61 million1 Month Return 71 5 eGain Corporation NASDAQ EGAN This company provides customer engagement solutions and offers offers web customer interaction applications social customer interaction applications and contact center applications You can see Zacks Rank 1 Strong Buy VGM Score CMarket Cap 318 92 million1 Month Return 68 8 Maxwell Technologies Inc NASDAQ MXWL It is a leading developer and manufacturer of innovative cost effective energy storage and power delivery solutions Zacks Rank 3VGM Score DMarket Cap 217 62 million1 Month Return 64 2 Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CSCO | Make A Good Thing Better | I m pleased to see people are continuing to use and experiment with SlopeRules We re continuing to develop the product behind the scenes and I ll keep you posted on new improvements
As I was looking at the Search page something caught my eye Sloper AndrewA had apparently taken one of my rule sets and improved it
I was terribly impressed with the results of his work I ran his SlopeRules against my Bull Pen watchlist and it definitely outperformed my own efforts
What I found particularly intriguing is that for the most powerful stock performers these SlopeRules actually recommended being OUT of the stocks at the moment Interesting
We can see that reflected for example with Cisco NASDAQ CSCO As you may remember one of the features of SlopeRules is that it actually shows you where hypothetical trades would have taken place It exited its last trade a while ago
Having a simple creation of mine improved upon reminds me of this favorite movie scene
Finally a reminder that SlopeRules Alerts have started shipping out each afternoon via email and even if you get no hits you ll be notified of that fact You can set up and easily manage your alerts on this page |
CSCO | Hyundai Motor Cisco to team up on Internet connected car technology | SEOUL Reuters Hyundai Motor said on Tuesday that it will partner with Cisco Systems NASDAQ CSCO to develop Internet connected car technology the latest alliance between auto and tech firms to expand services that hook cars up to the Internet |
CSCO | Cisco beats estimates on strong demand for security products | Reuters Network equipment maker Cisco Systems Inc NASDAQ CSCO reported a bigger than expected quarterly profit driven partly by strong demand for its security products
The company s shares rose 5 16 percent in after market trading on Wednesday
Cisco also gave an upbeat forecast for the current quarter it expects an adjusted profit of 59 61 cents per share and revenue to range from flat to up 3 percent
Analysts on average had expected a profit of 58 cents and revenue of 12 42 billion for the fourth quarter according to Thomson Reuters I B E S
Revenue in Cisco s security business which offers firewall protection as well as intrusion detection and prevention systems rose 17 percent due to strong sales of its SourceFire products
Cisco has been beefing up its wireless security businesses to offset the impact of sluggish spending by telecom carriers on its main business of making network switches and routers
Revenue in Cisco s data center business rose 1 percent in the third quarter
Revenue in the company s traditional routers business fell 5 percent while switching unit revenue was down 3 percent
Cisco is making a transition to high end switches and routers and investing in new products such as data analytics software and cloud based tools for data centers
The company s net profit fell to 2 35 billion or 46 cents per share in the third quarter ended April 30 from 2 44 billion or 47 cents per share a year earlier
Excluding items the company earned 57 cents per share
Analysts on an average had expected a profit of 55 cents per share and revenue of 11 97 billion according to Thomson Reuters I B E S
Revenue fell to 12 00 billion from 12 14 billion |
VZ | Windstream Holdings WIN To Close Legacy Voice Service | Windstream Holdings Inc NASDAQ WIN has sought permission from the U S telecom regulator Federal Communications Commission FCC to discontinue its operator assisted legacy voice services across its ILEC incumbent local exchange carrier and CLEC competitive local exchange carrier territories
The services that Windstream wants to shut down include operator assisted calls requesting Bill to a Third Number Busy Line Verify Busy Line Interrupt Collect Calling and Person to Person From its May 2016 billing cycle the company is informing its customers about the likely closure of these services
Telecom service providers are moving toward IP based network as more and more enterprise customers are opting for IP enabled cloud services Apart from Windstream national telecom carriers like AT T Inc NYSE T and Verizon Communications Inc NYSE VZ are on the same path AT T has requested the FCC for permission to discontinue a series of legacy services including collect calling person to person calling bill to third party Busy Line Verification Busy Line Interruption and International Directory Assistance to wholesale customers in Jun 2016
Verizon is also awaiting the FCC s nod to stop providing postpaid calling card and personal 800 services Level 3 Communications Inc NYSE T has sought permission from the FCC to discontinue its legacy voice services based on outdated TDM time division multiplexing technology The service is expected to shut down effective Aug 25 2016 subject to the regulatory body s approval
Windstream has focused on improving sales cost cutting initiatives and planned pricing initiatives which are expected to drive revenues and margins going forward Investments made in data center and fiber expansion will provide further impetus to revenue growth in the coming quarters
Windstream is also focusing on optimizing its last mile network and in turn cutting costs Windstream has selected five markets where the company will create a meshed network around its existing network rings to provide last mile access Additionally the company is investing in the expansion of its new Gigabit service
Windstream currently carries a Zacks Rank 3 Hold WINDSTREAM HLDG Price
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VZ | What Does The IoT Boom Mean For The Telecom Industry | The Internet of Things IoT which enables any physical electronic device with a valid IP address to transfer data seamlessly over a wireless network is quickly gaining significant market traction and bringing about fundamental changes in business models
According to a recent report by research firm International Data Corporation IDC spending on IoT in the U S alone is slated to grow at a 16 1 compound annual growth rate CAGR between 2015 and 2019 to reach nearly 357 billion
According to IDC the U S IoT market will reach 232 billion in 2016 The two biggest beneficiaries will be the manufacturing and transportation industries with estimated IoT spending of around 35 5 billion and 24 9 billion respectively Cross industry investment such as investment in smart buildings may go up to 31 billion by year end Other important business verticals will be in store contextual marketing connected vehicles and insurance telematics
In Dec 2015 the IDC had estimated that worldwide spending on IoT will grow at a 17 CAGR to nearly 1 3 trillion in 2019 from 698 6 billion in 2015 As per the report the Asia Pacific region will be the key growth area for IoT with an investment of approximately 280 billion followed by North America and Western Europe which will jointly spend in excess of 250 billion As per industry verticals the manufacturing sector has seen the highest in IoT spending with around 165 6 billion followed by the transportation sector which has recorded an investment of 78 7 billion
IoT to Drive Telecom Industry Growth
Next generation superfast wireless networks 4G LTE LTE A upcoming 5G will provide the primary impetus to the telecom industry In this context IoT holds potential to be the 1 factor driving future growth in the space IoT is a network of physical objects embedded with electronics software sensors and connectivity that enables it to achieve greater value and service by exchanging data with other connected devices
At present deploying innovative connectivity platforms to deliver seamless fully integrated mobile communication with global networking has become crucial for the success of wireless service providers Massive growth of 4G LTE Long Term Evolution and LTE A Advanced networks across the globe will lead the smooth transition from 4G to the upcoming 5G network standard Superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of IoT
U S telecom behemoths Verizon Communications Inc NYSE VZ and AT T Inc NYSE T network infrastructure giant Cisco Systems Inc NASDAQ CSCO and UK based global telecom operator Vodafone Group LON VOD plc NASDAQ VOD are favourably poised to benefit from the IoT boom |
VZ | The Zacks Analyst Blog Highlights Verizon Communications AT T Cisco Systems And Vodafone Group | For Immediate Release
Chicago IL June 28 2016 Zacks com announces the list of stocks featured in the Analyst Blog Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets Stocks recently featured in the blog include Verizon Communications Inc NYSE VZ AT T Inc NYSE T Cisco Systems Inc NASDAQ CSCO and Vodafone Group LON VOD plc
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Monday s Analyst Blog
What Does Internet of Things Mean for the Telecom Industry
The Internet of Things IoT which enables any physical electronic device with a valid IP address to transfer data seamlessly over a wireless network is quickly gaining significant market traction and bringing about fundamental changes in business models
According to a recent report by research firm International Data Corporation IDC spending on IoT in the U S alone is slated to grow at a 16 1 compound annual growth rate CAGR between 2015 and 2019 to reach nearly 357 billion
According to IDC the U S IoT market will reach 232 billion in 2016 The two biggest beneficiaries will be the manufacturing and transportation industries with estimated IoT spending of around 35 5 billion and 24 9 billion respectively Cross industry investment such as investment in smart buildings may go up to 31 billion by year end Other important business verticals will be in store contextual marketing connected vehicles and insurance telematics
In Dec 2015 the IDC had estimated that worldwide spending on IoT will grow at a 17 CAGR to nearly 1 3 trillion in 2019 from 698 6 billion in 2015 As per the report the Asia Pacific region will be the key growth area for IoT with an investment of approximately 280 billion followed by North America and Western Europe which will jointly spend in excess of 250 billion As per industry verticals the manufacturing sector has seen the highest in IoT spending with around 165 6 billion followed by the transportation sector which has recorded an investment of 78 7 billion
IoT to Drive Telecom Industry Growth
Next generation superfast wireless networks 4G LTE LTE A upcoming 5G will provide the primary impetus to the telecom industry In this context IoT holds potential to be the 1 factor driving future growth in the space IoT is a network of physical objects embedded with electronics software sensors and connectivity that enables it to achieve greater value and service by exchanging data with other connected devices
At present deploying innovative connectivity platforms to deliver seamless fully integrated mobile communication with global networking has become crucial for the success of wireless service providers Massive growth of 4G LTE Long Term Evolution and LTE A Advanced networks across the globe will lead the smooth transition from 4G to the upcoming 5G network standard Superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of IoT
U S telecom behemoths Verizon Communications Inc and AT T Inc network infrastructure giant Cisco Systems Inc and UK based global telecom operator Vodafone Group plc are favorably poised to benefit from the IoT boom
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VZ | U S government unveils goal to move Medicare away from fee for service | By David Morgan WASHINGTON Reuters The Obama administration on Monday unveiled an ambitious plan to control health costs by moving the 2 9 trillion U S health systems away from costly fee for service medicine beginning with the Medicare program for the elderly and disabled By the end of 2018 Health and Human Services Secretary Sylvia Burwell told reporters that 50 percent of traditional Medicare s 362 billion in annual payments would go to doctors hospitals and other providers that participate in alternative payment models which emphasize cost containment and quality of care Officials who hope to see the initiative matched by private insurers employers and state Medicaid programs for the poor said the move was intended to head off a resurgence in healthcare cost growth from an historically low 3 6 percent in 2013 to a projected 6 6 percent in 2020 The administration announced its goals after Burwell met with private and public sector stakeholders including insurers consumer and provider groups and employers Boeing Co and Verizon Communications Inc Wall Street analysts said for profit hospitals and private insurers would be well positioned to benefit from a new shift toward lower cost care delivery Groups representing doctors and hospitals said the move could mean greater flexibility for their members in determining care delivery while consumer representatives said the unprecedented goals could boost the quality of care About 20 percent of traditional Medicare payments a sum worth 72 billion currently go to providers with cost saving business models The remainder are based on fee for service payments that reward providers for the volume of care they provide Fee for service has been blamed by policymakers for promoting higher costs mediocre care and unnecessary procedures The administration s goals would be phased in by first increasing the participation of alternative care models to 30 percent of Medicare payments by the end of 2016 Officials described the 50 percent goal for 2018 as a tipping point that could help make payment reform mainstream across the U S health system Within four years the administration expects all but 10 percent of traditional Medicare to be linked to new quality and efficiency standards including most of the remaining fee for service providers
The government has also been experimenting with payment models that officials say have generated 417 million in savings to Medicare But the effort could face long odds New care models have shown limited progress in controlling costs and little evidence of being able to sustain cost savings |
VZ | Verizon close to deals to sell over 10 billion in assets WSJ | Reuters Verizon Communications Inc N VZ is nearing wrapping up deals to sell more than 10 billion in assets the Wall Street Journal reported citing people familiar with the matter The planned sales include cellphone towers and parts of its landline phone business the WSJ reported As Verizon focuses on updating its network the company would consider selling cellphone towers if it found an attractive deal chief executive Lowell McAdam said on a January call with investors There are certain assets on the wireline side that we think would be better off in somebody else s hands so we can focus our energy in a little bit more narrow geography McAdam said Divesting assets could also help Verizon repurchase some shares it issued after it announced the Vodafone deal he added Different buyers are involved in the deals which could be announced late this week the WSJ added A Verizon spokesman declined to comment The largest U S carrier purchased 181 licenses worth 10 4 billion in the AWS 3 spectrum auction that closed last week In 2013 Verizon announced its plans to acquire the 45 percent stake in Verizon Wireless that it did not already own from Vodafone for 130 billion
The company has been exploring steps to speed up its debt repayment in recent months |
CSCO | Infinera INFN Looks Good Stock Adds 8 5 In Session | Infinera Corporation NASDAQ INFN was a big mover last session as the company saw its shares rise nearly 9 on the day The move came on solid volume too with far more shares changing hands than in a normal session This continues the recent uptrend for the company as the stock is now up 26 1 in the past one month time frame The company has seen one negative estimate revision in the past few weeks while its Zacks Consensus Estimate for the current quarter has also moved lower over the past few weeks suggesting there may be trouble down the road So make sure to keep an eye on this stock going forward to see if this recent move higher can last Infinera currently has a Zacks Rank 3 Hold while its is negative Infinera Corporation Price A better ranked stock in the Computer Networking industry is Cisco Systems Inc NASDAQ CSCO which currently carries a Zacks Rank 2 Buy You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here Is INFN going up Or down Predict to see what others think Up or DownThe Could Be the Fastest Way to Grow Wealth in 2019 Research indicates one sector is poised to deliver a crop of the best performing stocks you ll find anywhere in the market Breaking news in this space frequently creates quick double and triple digit profit opportunities These companies are changing the world and owning their stocks could transform your portfolio in 2019 and beyond Recent trades from this sector have generated 98 119 and 164 gains in as little as 1 month |
CSCO | Cisco to invest 100 mln in India s digital push | NEW DELHI Reuters Cisco Systems Inc NASDAQ CSCO will invest over 100 million in India to support the country s ambitious plan to connect thousands of its villages to the internet and create jobs Executive Chairman John Chambers said on Friday India s Prime Minister Narendra Modi has launched a series of initiatives under the Digital India Skill India and Startup India schemes to connect millions of Indians to the Internet create more tech jobs and move more services online Chambers said the company will work with federal and provincial governments in India to launch incubation centers for entrepreneurs and training students Cisco will invest 40 million of the total planned investment into funding early and mid stage startups |
VZ | Verizon VZ Wireline Workers Return To Work In Full Force | The wireline division of Verizon Communications Inc NYSE VZ is again operating in full swing as the strike called by members of the two workers unions has officially come to an end on Jun 17 2016 Nearly 36 500 workers of the company s wireline and cable TV FiOS Internet and TV segment went to strike since Apr 13 2016 On May 31 Verizon and the striking unions The Communications Workers of America CWA and International Brotherhood of Electrical Workers IBEW entered into a tentative deal following which all striking workers resumed work from Jun 1 However union members were given a deadline of Jun 17 to vote on the tentative contract Accordingly the members of both unions voted and ratified the tentative agreement Verizon and its wireline workers were at a stalemate over a labor contract The company s wireline employees were working out of contract since last August In May 2016 the U S Secretary of Labor Thomas Perez met with the Verizon CEO and the heads of the two unions that represent the company s striking workforce Perez requested both sides to sit at the negotiation table to resolve the issues The New ContractUnder the new contract Verizon will provide a 10 9 pay hike to its unionized workers over a period of four years a small increment in pension benefit and a promise to create nearly 1 400 new union jobs This will include around 1 300 new call center jobs and about 70 wireless retail store jobs Importantly the company agreed to reduce subcontracting and withdrew a proposal to relocate employees for extended periods These two were the main issues of the strike The new contract is valid up to Aug 3 2019 Pros and ConsThough Verizon had to make certain concessions it stood to gain on some points The company will be able to reduce benefit costs by modifying employee health care plans Verizon stated that it will achieve cost savings through healthcare plan design changes adopting Medicare Advantage plans for its retirees maintaining limits on post retirement healthcare costs and freezing the mortality table for lump sum pensions using the GATT rate Verizon s CEO had earlier warned that the company s second quarter 2016 financial results may be affected by the strike Lowell McAdam had stated that the company is currently on track with respect to repairing and maintenance issues of the existing installed bases However the number of new installations of FiOS high speed Internet and FiOS pay TV has dropped significantly As a result the company may suffer high speed broadband and pay TV customer attrition In 2015 FiOS generated 29 of Verizon s total revenue and slightly less than 7 of operating income Verizon is already facing severe competitive threat from its telecom rivals AT T Inc NYSE T T Mobile US Inc NYSE T and Sprint Corp NYSE S Therefore a solution to the labor problem will definitely be a tailwind to its near term growth Verizon currently carries a Zacks Rank 3 Hold VERIZON COMM Price |
VZ | LeEco Purchases Yahoo s Santa Clara Real Estate For 250M | With its core business and patents already up for sale what good does it do to hold on to an undeveloped site Probably that s why Yahoo Inc NASDAQ YHOO just sold its Santa Clara CA based real estate property to Chinese technology company LeEco
LeEco has reportedly acquired the 48 6 acre development site for 250 million Yahoo is said to have bought this property back in 2006 for 106 million The pre tax profit from the current sale therefore stands at 144 million
Yahoo had planned to build a massive R D site but failed to achieve its vision The site was approved for building up to 3 million square feet across 13 buildings but stayed undeveloped for the last 10 years
Under the prevailing circumstances where Yahoo itself is up for sale the property sale will surely help the company with liquidity
The once leading Internet giant has been struggling with its core businesses namely mail service online sports financial and general news sections and its vital online advertising technology which includes the video advertising platform BrightRoll
It has been losing its digital advertising foothold to competitors like Facebook Inc NASDAQ FB and Twitter Inc NYSE TWTR YAHOO INC Price
Currently the company is looking to sell itself to the highest bidder after CEO Marissa Mayer s unsuccessful turnaround efforts and mounting pressure from investors
After two rounds of bidding the third and final round is expected to be finished by mid July Verizon Communications Inc NYSE VZ and AT T Inc NYSE T are likely the leading bidders in the third round
The company has also put about 3000 patents related to its original search technology e commerce and online advertising up for sale as well
So much for Yahoo Now let s see what LeEco is in for
It appears that LeEco has the same plan for the site as Yahoo had We think that the acquisition will help LeEco boost its R D operations especially when it is looking to launch a video streaming service and a smartphone in the U S later this year
The company offers a wide range of products that include mobile phones smartphones tablets smart home devices Internet TV and Internet linked electric cars
Currently Yahoo is a Zacks Rank 3 Hold stock |
VZ | Verizon VZ Asked To Alter FiOS Advertisement By NARB | Verizon Communications Inc s NYSE VZ claims of providing the highest Internet speeds in the industry were recently questioned by advertisement watchdog the National Advertising Review Board NARB following a complaint by Comcast Corporation NASDAQ CMCSA As per the NARB the advertisement in question didn t convey facts seeing that it is Comcast Gigabit which offers the fastest Internet service Nevertheless the regulatory body has refrained from using words like misleading or deceptive related to the advertisements The NARB panel further recommended the company to revise its claim of providing high picture quality services AT T Inc NYSE T was in a similar situation in 2014 when it was asked by the NARB to stop claiming that U verse offered the fastest Internet service Customer Opinion versus Measured DataVerizon s claims were actually based on PC Magazine s Reader s Choice Survey However the NARB panel noted that the ads made it seem like Verizon provided the fastest Internet speeds in the market Visuals supporting the ad did not state its basis of customer perception anywhere either In fact a head to head comparison of the various Internet service providers ISP reveals a completely different picture Verizon responded by saying that it will consider the panel s recommendations in future advertisements Who Provides the Fastest Internet Now As per a recent testing conducted by the Federal Communications Commission in customers homes Comcast s Internet service outperformed Verizon s FiOS offering While Verizon s top advertised speeds are 500Mbps Comcast offers Gigabit Internet via fiber that boasts Internet speeds as high as 2Gbps The Bottom LineVerizon has a history of claiming superiority of its FiOS offering over other Internet providers Last year it took Cablevision Systems Corporation NYSE CVC to court to challenge the latter s claim of a faster Internet service than FiOS Although this time Verizon isn t specifically required to abide by the NARB panel s recommendations such allegations tend to confuse consumer sentiments and may therefore hurt the company s reputation going ahead Both Verizon and Comcast currently carry a Zacks Rank 3 Hold |
VZ | Verizon approaches AOL on potential deal Bloomberg | Reuters Verizon Communications Inc N VZ approached AOL Inc N AOL about a potential acquisition or joint venture to expand its mobile video offerings Bloomberg reported citing people with knowledge of the matter Verizon has not made a formal proposal to AOL and no agreement is imminent Bloomberg said citing people who asked not to be named AOL shares jumped 12 percent to 50 05 after the bell A spokesman for Verizon declined to comment A joint venture if formed would focus on advertising technology Bloomberg cited one of the people as saying Verizon is seeking expertise in online content mobile video and advertising according to one of the Bloomberg sources The programmatic ads platform could be paired with a future online video product Bloomberg said quoting two people familiar with the matter Last year activist investor Starboard Value LP urged Yahoo Inc O YHOO to consider a strategic combination with AOL to save more than 1 billion in costs
AOL did not immediately respond to requests for comment after regular business hours Reporting by Sudarshan Varadhan and Devika Krishna Kumar Editing by Bernard Orr and Lisa Shumaker |
VZ | Verizon not pursuing AOL takeover CEO | Reuters Verizon Communications Inc NYSE VZ Chief Executive Lowell McAdam said the company is not planning any major acquisitions following a report that Verizon had approached AOL Inc for a potential deal I think AOL along with lots of other media companies are potential for us to do partnering on a commercial basis or whatever McAdam said at a conference on Tuesday But to say that we are having significant acquisition discussions is really not accurate he added
Bloomberg had earlier reported that Verizon was trying to sign an acquisition or joint venture deal with the digital media company to expand its mobile video offerings Reporting by Anya George Tharakan in Bengaluru Editing by Don Sebastian |
VZ | Wall Street ends down fifth session oil prices fall further | By Caroline Valetkevitch NEW YORK Reuters U S stocks ended lower for a fifth session on Tuesday as data showed slower growth in the U S service sector and oil prices fell further The S P 500 s losing streak was its longest in about 13 months but the index ended off the day s lows having fallen as much as 1 4 percent earlier at one point breaking below the 2 000 level for the first time since Dec 17 Data on Tuesday pointed to slowing growth in the fourth quarter The pace of expansion in services moderated in December and new orders for manufactured goods fell for a fourth consecutive month in November The S P 500 is down 4 2 percent for the last five sessions with the Dow and S P 500 suffering on Monday their biggest drops since early October Among the day s biggest drags the S P energy sector fell 1 3 percent as oil prices slid further on mounting worries about a supply glut U S crude settled at 47 93 a barrel down 4 2 percent on the day Shares of energy names tumbled including Southwestern Energy N SWN down 5 percent at 24 71 as brokerages continued to cut price targets It seems to be about oil prices The big debate out there is what does it mean and is there this massive global economic slowdown said Eric Kuby chief investment officer at North Star Investment Management Corp in Chicago But besides that economic news has been modestly disappointing he said The Dow Jones industrial average DJI fell 130 01 points or 0 74 percent to 17 371 64 the S P 500 SPX lost 17 97 points or 0 89 percent to 2 002 61 and the Nasdaq Composite IXIC dropped 59 84 points or 1 29 percent to 4 592 74 An election in Greece which may trigger its exit from the euro zone is about three weeks away increasing the difficulty for the European Central Bank to move towards quantitative easing as it attempts to stabilize the region s economy Among gainers AOL Inc N AOL shares rose 3 4 percent to 46 25 a day after a report that Verizon Communications N VZ approached AOL about a potential acquisition or joint venture About 8 3 billion shares changed hands on U S exchanges above the 5 5 billion average for the last five sessions according to BATS Global Markets Declining issues outnumbered advancing ones on the NYSE by 2 076 to 1 011 for a 2 05 to 1 ratio on the Nasdaq 2 117 issues fell and 657 advanced for a 3 22 to 1 ratio favoring decliners
The S P 500 posted 14 new 52 week highs and 15 new lows the Nasdaq Composite recorded 38 new highs and 73 new lows Editing by Chizu Nomiyama Nick Zieminski and Meredith Mazzilli |
VZ | Verizon launches connected car product for older vehicles | Reuters Verizon Communications Inc unveiled an Internet and wireless car service on Tuesday that lets drivers of older cars get help during a breakdown or find out about repairs and maintenance that might be needed The wireless company said at the Detroit auto show that it will make its Verizon Vehicle service available in the second quarter of this year The subscription based service will work on models dating back to 1996 The monthly service charge for Verizon s new product aimed at modernizing older cars is 15 said Erik Goldman president of Verizon Telematics The service is intended to help drivers of older cars who can opt to receive alerts via text call smartphone notifications or email Other features allow drivers to diagnose mechanical problems talk to car mechanics in real time and access help in an emergency There s a lot of talk of the value of vehicles being connected in the market today but unfortunately there is a number of vehicles roughly 200 million that don t have the availability of those services Goldman said in an interview Even if you buy a new car today there are great services with various service providers but you re tied to one manufacturer |
VZ | NBC woos online viewers with 11 hour stream on Super Bowl Sunday | By Lisa Richwine Reuters U S TV network NBC will stream 11 consecutive hours of live content on Super Bowl Sunday free of charge including the game and halftime show to raise awareness of its online viewing platforms among the event s traditionally record audiences Starting at noon Eastern time on Feb 1 fans will be able to access the NBC Sports Live Extra app and website on their tablets and desktop computers without the typical log in requirement to show proof of a pay TV subscription the network said NBC removed that step to encourage viewers to try out the live streaming options and return for future events Rick Cordella senior vice president and general manager for digital media at NBC Sports Group said in an interview The initiative is part of a push by networks to promote TV Everywhere an industry effort to make content widely available on Internet connected devices as consumers flock to digital options It s just a great means to promote TV Everywhere and our products Cordella said With the Super Bowl we will have maximum eyeballs on it In addition to the game and halftime show featuring singer Katy Perry NBC will stream the pre and post game shows on NBC Sports Live Extra On NBC com the network will also make available a new episode of drama The Blacklist that will run on TV just after Super Bowl coverage concludes The commercials a big draw for some viewers due to their often slick production will differ between the TV and digital stream But NBC plans to make all of the in game television ads available online and will announce details soon Cordella said On mobile phones live viewing of the Super Bowl is available only to customers of Verizon Communications Inc through the NFL Mobile app The Super Bowl which rotates among networks is traditionally the most watched telecast of the year The 2014 Super Bowl averaged a record 112 2 million viewers on network Fox according to researcher Nielsen
NBC is a unit of Comcast Corp Fox is part of Twenty First Century Fox Inc |
VZ | Verizon posts higher revenue wireless margins narrow | By Malathi Nayak and Anya George Tharakan Reuters Verizon Communications Inc said on Thursday that quarterly revenue rose 6 8 percent as it added more customers during the competitive holiday season but profit margins narrowed in its wireless business due to pricing and promotions Shares in Verizon fell 2 5 percent to 47 06 on the New York Stock Exchange while the S P Telecom Services Sector fell 1 8 percent Verizon earned 71 cents per share excluding items in the fourth quarter as revenue rose to 33 19 billion from 31 07 billion The profit per share matched Wall Street estimates according to Thomson Reuters I B E S while revenues came in slightly above expectations of 32 69 billion The largest U S wireless company added 2 million postpaid subscribers or those who pay for service after use topping the 1 5 million subscribers added in the last quarter The real question here is do they have to potentially more aggressively reprice their existing base as we go through 2015 because of competitive pressures Mike McCormack an analyst at Jefferies Co said Investors are concerned the ongoing price wars to attract and keep customers could come at the cost of growth in a nearly saturated wireless market In 2015 Verizon will continue to go after that high value high quality network user who is going to pay a premium for that network and we re not just going to compete on price Chief Financial Officer Fran Shammo said in an interview Verizon s retail postpaid average revenue per account rose to 158 82 from 157 21 but was below the 161 64 estimated by analysts polled by research firm StreetAccount Profit margins in its wireless business narrowed to 42 percent in the quarter from 47 percent a year ago Verizon is the best house in a bad neighborhood said Craig Moffett an analyst at MoffettNathanson You re seeing for the first time the old measure that is average revenue per user starting to fall Customer defections known as churn in postpaid accounts rose to 1 4 percent Verizon had said it expected to see the churn rate elevate in the fourth quarter Some wireless carriers have replaced traditional two year contracts with equipment financing plans that allow payments in monthly installments The plans charge lower service fees but do not subsidize devices Verizon posted a 25 percent rise in customers adopting its no subsidy EDGE plan for upgrading devices
Verizon however reported a net loss of 2 23 billion or 54 cents per share attributable to the company for the fourth quarter compared with a profit of 5 07 billion or 1 76 per share a year earlier mainly due to valuation of benefits plan and pension adjustments |
CSCO | ETFs To Surge On Cisco s Solid Results | After the closing bell on Wednesday tech prime Cisco Systems NASDAQ CSCO reported robust fiscal 2019 second quarter results The networking giant topped estimates on both revenues and earnings and provided an upbeat outlook Results in DetailEarnings of 73 cents per share outpaced the Zacks Consensus Estimate by a penny and improved from the year ago earnings of 63 cents Revenues rose 7 year over year to 12 45 billion and edged past the estimated 12 40 billion The robust results were driven by strength in its newer applications and security businesses and shrugged off the impact of the U S China trade war on its networking gear business The networking leader s transition from its traditional business of high end switches and routers to high growth areas such as security the Internet of Things and cloud computing is clearly paying off As a result Cisco now expects revenue growth of 4 6 and earnings per share in the range of 76 78 cents in third quarter fiscal 2019 The low end of both the ranges is above the Zacks Consensus Estimate of 2 7 for revenue growth and earnings per share of 75 cents see Cisco raised its quarterly dividend by 6 to 35 cents a share and boosted its share buyback program by 15 billion to 24 billion Buoyed by solid results and encouraging guidance Cisco shares rallied as much as 4 in after hours trading on heavy volumes The stock currently has a Zacks Rank 3 Hold and a VGM Score of B Additionally it belongs to a top ranked industry ETFs to WatchETFs having the largest allocation to this network giant will be in focus over the coming days Investors should closely monitor the movement in these funds and grab the opportunity when it arises iShares U S Telecommunications ETF This fund follows the Dow Jones U S Select Telecommunications Index and offers exposure to 43 American companies that provide telephone and Internet products services and technologies Cisco occupies the top position with 14 7 of the assets The ETF has AUM of 471 4 million and trades in average daily volumes of 643 000 shares It charges 43 bps in annual fees and has a Zacks ETF Rank 2 Buy with a Medium risk outlook iShares North American Tech Multimedia Networking ETF AX IGN This ETF provides concentrated exposure to domestic multimedia networking securities by tracking the S P North American Technology Multimedia Networking Index Holding 21 securities in its basket Cisco takes the third spot with an 8 2 allocation The product has accumulated 53 6 million in its asset base while seeing a lower volume of around 12 000 shares a day Expense ratio comes in at 0 47 The fund carries a Zacks ETF Rank 2 with a High risk outlook read First Trust NASDAQ Technology Dividend Index Fund This fund provides exposure to dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index The product has amassed about 905 2 million in its asset base and trades in moderate volume of about 103 000 shares per day The ETF charges 50 bps in annual fees and holds about 97 securities in its basket Of these firms CSCO occupies the third position making up roughly 7 83 of the assets First Trust Nasdaq Cybersecurity ETF This ETF follows the Nasdaq CTA Cybersecurity Index which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors It has accumulated 777 1 million in its asset base The fund charges 60 bps in annual fees and trades in average daily volume of about 194 000 shares In total the product holds 37 stocks in its basket with Cisco taking the fifth spot at 5 7 read Invesco Dynamic Networking ETF This fund follows the Dynamic Networking Intellidex Index holding 28 securities in its basket Out of these Cisco is the sixth firm accounting for 4 93 share The fund is relatively unpopular and illiquid in the broad technology space with AUM of 56 1 million and average daily volume of about 194 000 shares It charges 63 bps in annual fees and has a Zacks ETF Rank 3 with a High risk outlook Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CSCO | Near Term Outlook For Computer Networking Industry Looks Bright | The Zacks industry includes providers of networking and Internet connected products such as wireless WiFi and LTE Ethernet and powerline with a focus on reliability and ease of use
Some of the companies also provide business and mission critical Internet of Things IoT solutions and services to help customers create next generation connected products with high levels of security relentless reliability and assured performance
Increased focus on cloud computing and cloud storage has set the industry on growth trajectory
Here are the three major themes in the industry The industry is characterized by brisk technological change rapidly progressing products high speed connectivity low latency and evolving industry standards The advancements in areas like IoT artificial intelligence AI machine learning ML and increase of cloud applications are creating growth opportunity for the industry players With rapid growth in video and other bandwidth intensive applications the industry participants are making considerable investments in LTE broadband and fiber in order to provide additional capacity and ramp up Internet and wireless networks The impending 5G boom is likely to propel the industry to newer heights The success of 5G technology hinges on substantial investments to upgrade infrastructure in the core fiber backhaul network to support anticipated growth in data services This bodes well for the industry players Nevertheless the ongoing trade war between the United States and China has created an uncertain environment that is not conducive for investments Moreover foreign exchange volatility sluggishness in global economic growth and shift in consumers buying patterns is likely to dampen growth prospects of the industry participants Zacks Industry Rank Indicates Bright Prospects
The Zacks Computer Networking industry is housed within the broader Zacks sector It carries a Zacks Industry Rank 87 which places it in the top 34 of more than 257 Zacks industries
The group s Zacks Industry Rank which is basically the average of the Zacks Rank of all the member stocks indicates solid near term prospects Our research shows that the top 50 of the Zacks ranked industries outperforms the bottom 50 by a factor of more than 2 to 1
The industry s positioning in the top 50 of the Zacks ranked industries is a result of positive earnings outlook for the constituent companies in aggregate Looking at the aggregate earnings estimate revisions it appears that analysts are gaining confidence in this group s earnings growth potential In the past year the industry s earnings estimates for the current year have increased 6 7
Before we present a few stocks that you may want to consider for your portfolio let s take a look at the industry s recent stock market performance and valuation picture
Industry Beats S P 500 and Sector on Shareholder Returns
The Zacks Computer Networking industry has outperformed its own sector and the Zacks S P 500 composite over the past 12 months
The industry has gained 5 3 in the past 12 months against its sector s decline of 1 5 Meanwhile the Zacks S P 500 composite has increased 0 9
One Year Price Performance
Industry s Current Valuation
On the basis of forward 12 month P E which is a commonly used multiple for valuing computer networking stocks we see that the industry is currently trading at 19 02X compared with the S P 500 s 17 26X It is also above the sector s forward 12 month P E of 18 91X
Over the past five years the industry has traded as high as 21 40X as low as 11 84X and at the median of 14 93X as the chart below shows
Bottom Line
Increased focus on cloud computing big data and cloud storage will continue to aid revenue growth for the industry participants However sluggishness in global economic growth and shift in consumers buying patterns are likely to act as dampeners
Here we present two stocks carrying a Zacks Rank 2 Buy that is well positioned to gain amid the prevailing challenges There are also a couple of stocks with a Zacks Rank 3 Hold that investors could hold on to
You can see
NETGEAR Inc NTGR This provider of networking storage and security solutions carries a Zacks Rank 2
Digi International Inc DGII This provider of business and mission critical Internet of Things IoT products and services carries a Zacks Rank 2 The company has a long term expected EPS growth rate of 14 5
Cisco Systems NASDAQ CSCO Inc CSCO The IP based networking company carries a Zacks Rank 3 It has a long term expected EPS growth rate of 6 3
Extreme Networks Inc EXTR The company offers a next generation of switching solutions that meet the increasing needs of enterprise local area networks internet service providers and content providers It has a Zacks Rank 3 and a long term expected EPS growth rate of 14
Zacks Top 10 Stocks for 2019
In addition to the stocks discussed above wouldn t you like to know about our 10 finest buy and holds for the year
From more than 4 000 companies covered by the Zacks Rank these 10 were picked by a process that consistently beats the market Even during 2018 while the market dropped 5 2 our Top 10s were up well into double digits And during bullish 2012 2017 they soared far above the market s 126 3 reaching 181 9
This year the portfolio features a player that thrives on volatility an AI comer and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs |
CSCO | Cisco beats profit estimates adds 15 billion to buyback | By Abhirup Roy Reuters Network equipment maker Cisco Systems Inc O CSCO reported a bigger than expected quarterly profit helped by higher demand for its routers and security products and added 15 billion to its share buyback program The company s shares rose 5 1 percent in after market trading on Wednesday The results were a bright sign for investors after several tech stocks with lofty valuations plunged in the past few days due to disappointing sales outlooks from LinkedIn Corp N LNKD and Tableau Software Cisco is shifting to high end switches and routers and investing in new products such as data analytics software and cloud based tools for data centers Revenue in the company s routers business rose 5 percent to 1 85 billion in the second quarter ended Jan 23 Cisco said Revenue in the switches business the company s biggest fell 4 percent to 3 48 billion Its security business which offers firewall protection as well as intrusion detection and prevention systems recorded an 11 percent rise in revenue to 462 million Cisco boosted its current share buyback plan of 97 billion of which 16 9 billion was remaining by 15 billion The company forecast third quarter adjusted profit of 54 56 cents per share and revenue growth of 1 4 percent excluding revenue from its customer premises equipment business which it has sold Analysts on average expect a third quarter profit of 55 cents per share and revenue of 12 02 billion Net income rose to 3 1 billion or 62 cents per share from 2 40 billion or 46 cents per share a year earlier Excluding items the company earned 57 cents per share beating the average analyst estimate of 54 cents per share according to Thomson Reuters I B E S
Revenue rose 2 percent to 11 8 billion excluding revenue from the customer premises equipment portion of the service provider video connected devices business that was divested |
CSCO | Cisco buying Israel s Leaba Semiconductor for 320 million | TEL AVIV Reuters Cisco Systems O CSCO said on Wednesday it plans to acquire Israel s Leaba Semiconductor a designer of networking chips for 320 million in cash plus additional incentives to retain employees Leaba is a team with a strong and successful track record of designing leading edge networking semiconductors that provide innovative solutions to address significant infrastructure challenges Cisco said in a blog on its website Little is known about Leaba which has raised 16 million since it was founded in 2014 by its chief executive Eyal Dagan and its chief technology officer Ofer Iny who sold Dune Networks to Broadcom NASDAQ BRCM in 2009 for about 200 million Investors in Leaba which has 45 employees and is based in the coastal town of Caesarea include Pitango Venture Capital of Israel and Bessemer Venture Partners By combining Leaba s semiconductor expertise with the Cisco engineering team we will accelerate our plans for Cisco s next generation product portfolio and bring new capabilities to the market faster Cisco said
A source familiar with Leaba noted the company was very young and without a fully developed product This is an acquisition of a talented team working on something of strategic interest to Cisco said the source who asked not to be named |
VZ | 4G LTE LTE A Network Deployment Gain Strong Momentum | Long Term Evolution LTE the most sought after next generation 4G super fast wireless communications technology is gaining rapid momentum worldwide 4G wireless networks primarily aim to cope with the substantial rise in demand for high speed wireless data services and mobile video According to a recent research report published by the Global Mobile Suppliers Association GSA the number of LTE subscribers worldwide has crossed 1 29 billion in the first quarter of 2016 In the first quarter alone LTE subscriptions grew around 182 million At this rate 4G LTE is set to outnumber 3G all form of 3G technologies subscribers globally by 2020 GSA further stated that in the last one year 4G LTE generated over 645 million subscriptions worldwide reflecting a whopping 100 improvement year over year Wireless network standards are continuously evolving around the globe to offer faster speed Following significant deployment of 4G LTE networks LTE A Long Term Evolution Advanced wireless networks are gradually finding a solid foothold globally The GSA report in May 2016 stated that 503 operators have commercially activated LTE networks across 167 countries The LTE networks are expected to reach 550 by the end of 2016 Currently there are approximately 168 LTE A active networks which constitute more than 30 of total LTE networks worldwide As per the GSA report Asia witnessed the maximum LTE subscription of over 734 million constituting 56 9 of the total market At present Asia is way ahead of North America 19 6 Europe 14 Latin American and the Caribbean 5 2 and the Middle East and Africa 4 3 LTE A is a more powerful version of the legacy LTE network offering increased speed and network capacity Carrier aggregation is the most important part of LTE A technology as it allows wireless operators to create large spectrum assets by combining different frequency bands LTE A also incorporates several technological advancements like Coordinated Multi Point Self Optimizing Networks Small cell enhancements Enhanced Inter Cell Interference Coordination and Advanced Multi Input Multi Output antenna Earlier research on 4G in the Americas had stated that the latest version of LTE A network which is popularly known as LTE Advanced Pro 3GPP Release 13 will be a major step toward the smooth transition from 4G to the upcoming 5G network standard In the U S all four national telecom operators namely Verizon Communications Inc NYSE VZ AT T Inc NYSE T T Mobile US Inc NYSE T and Sprint Corp NYSE S have deployed LTE A networks Moreover Verizon has decided to introduce 5G wireless standard in 2017 |
VZ | SoftBank Shrinks US Office Marking End Of Failed T Mobile Bid | By
Softbank Corp CEO Masayoshi Son speaks during a news conference in Tokyo on July 30 2013 title Reuters Issei Kato Softbank Corp CEO Masayoshi Son speaks during a news conference in Tokyo on July 30 2013 rel external image
Reuters Japan s Softbank Corp TOKYO 9984 will soon downsize its Silicon Valley offices people with knowledge of the matter said signaling the company won t revive efforts to buy T Mobile U S Inc
SoftBank subsidiary Sprint Corp NYSE S dropped its bid to acquire the No 4 U S carrier in August but the companies did not rule out future consolidation
The Japanese telecommunications company is now transferring the bulk of manpower out of its West Coast operations including dispersing development engineers to Sprint headquarters in Kansas said the people who declined to be identified because the move has not been made public
SoftBank is also considering renting out one of two buildings it leased at an annual cost of over 3 million to accommodate a T Mobile driven expansion the people said The building has stood largely empty they said
The failed bid by Japan s acquisitive No 3 mobile carrier was a rare setback for founder Masayoshi Son The billionaire encountered resistance from U S regulators who insisted on keeping the number of major wireless carriers at four
There were people sent to Silicon Valley for the purpose of making mobile phone platforms but that job was done and there s nothing else to do said one of the people
SoftBank spokesman Matthew Nicholson said some SoftBank employees are moving back to Tokyo or going to Kansas as certain joint projects between the company and Sprint have finished He declined to comment regarding the relationship between the departures and the failed bid to acquire T Mobile
SoftBank bought No 3 U S carrier Sprint last year for 22 billion as part of an overseas expansion that has included investments across Asia
Son had seen the acquisition of T Mobile as key to taking on U S market leaders AT T Inc and Verizon Communications Inc |
VZ | SoftBank shrinks U S office marking end of failed T Mobile bid | By Yoshiyasu Shida and Teppei Kasai TOKYO Reuters Japan s SoftBank Corp T 9984 will soon downsize its Silicon Valley offices people with knowledge of the matter said signaling the company won t revive efforts to buy T Mobile U S Inc N TMUS SoftBank subsidiary Sprint Corp N S dropped its bid to acquire the No 4 U S carrier in August but the companies did not rule out future consolidation The Japanese telecommunications company is now transferring the bulk of manpower out of its West Coast operations including dispersing development engineers to Sprint headquarters in Kansas said the people who declined to be identified because the move has not been made public SoftBank is also considering renting out one of two buildings it leased at an annual cost of over 3 million to accommodate a T Mobile driven expansion the people said The building has stood largely empty they said The failed bid by Japan s acquisitive No 3 mobile carrier was a rare setback for founder Masayoshi Son The billionaire encountered resistance from U S regulators who insisted on keeping the number of major wireless carriers at four There were people sent to Silicon Valley for the purpose of making mobile phone platforms but that job was done and there s nothing else to do said one of the people SoftBank spokesman Matthew Nicholson said some SoftBank employees are moving back to Tokyo or going to Kansas as certain joint projects between the company and Sprint have finished He declined to comment regarding the relationship between the departures and the failed bid to acquire T Mobile SoftBank bought No 3 U S carrier Sprint last year for 22 billion as part of an overseas expansion that has included investments across Asia
Son had seen the acquisition of T Mobile as key to taking on U S market leaders AT T Inc N T and Verizon Communications Inc N VZ Editing by William Mallard |
VZ | FCC eyes 105 million fine for Sprint over phone bill cramming | By Alina Selyukh WASHINGTON Reuters U S wireless carrier Sprint Corp is expected to face a 105 million fine from the Federal Communications Commission in coming weeks over unauthorized charges on customers cellphone bills a practice known as cramming according to FCC officials FCC commissioners are reviewing and will soon vote on the proposed fine over charges Sprint s consumers faced for services they never requested FCC sources said A 105 million fine would tie as the agency s largest In October AT T Inc agreed to pay 105 million to settle similar cramming allegations in a case negotiated by the FCC and the Federal Trade Commission FCC officials spoke on a condition of anonymity because the proposed fine has not been made public FCC spokesman Neil Grace declined comment Sprint spokeswoman Stephanie Vinge Walsh said the company does not comment on rumor and speculation The FCC has also been investigating cramming complaints against T Mobile US Inc The FTC in July filed a cramming complaint against T Mobile in the U S District Court for the Western District of Washington Prodded by state attorneys general AT T T Mobile Sprint and Verizon Communications Inc agreed in November to stop billing customers for third party services FCC Chairman Tom Wheeler in announcing AT T s settlement in October estimated that 20 million consumers a year are crammed
The National Journal was first to report the news of the planned fine for Sprint Reporting by Alina Selyukh Editing by David Gregorio |
VZ | U S consumer bureau sues Sprint for phone bill cramming | By Alina Selyukh WASHINGTON Reuters The U S Consumer Financial Protection Bureau on Wednesday filed a lawsuit against Sprint Corp over unauthorized charges on customers cellphone bills a practice known as cramming in the agency s first foray into mobile payments Marking the third cramming related government enforcement action this year the CFPB alleges that from 2004 through 2013 the wireless carrier allowed third parties to charge consumers tens of millions of dollars for services like ringtones or text message horoscopes that consumers had not requested while keeping 40 percent of the gross revenue The Federal Communications Commission is weighing a 105 million cramming fine against Sprint Sprint mistreated consumers egregiously by creating a billing system that invited illegal third party charges and processed them in a highly irresponsible manner the CFPB s director Richard Cordray said Sprint expressed disappointment in being the target of the CFPB s lawsuit and disputed the accusations listing various steps it said it took to monitor third party charges such as hiring an outside compliance vendor and vetting billing companies We strongly disagree with the CFPB s characterization of our business practices Sprint spokeswoman Stephanie Vinge Walsh said in a statement It appears the CFPB has decided to use this issue as the test case on whether it has legal authority to assert jurisdiction over wireless carriers she said in an email In July the Federal Trade Commission sued T Mobile US Inc over similar billing issues and in October the FCC and the FTC settled such a case with AT T Inc For the CFPB which oversees consumer financial products such as mortgages and credit cards Wednesday s case marked the first public action coordinated with the FCC If a company is processing payments over a mobile network that s something that the bureau has jurisdiction over the CFPB s deputy enforcement director Jeff Ehrlich told reporters We ll take action against anyone who violates the consumer financial protection laws FCC spokespeople said the FCC and the CFPB have agreed to continue close cooperation on this and other cases on behalf of wireless customers nationwide Verizon Communications Inc is the only nationwide wireless carrier that so far has not been subject to government actions over cramming The FCC s investigation of T Mobile is ongoing Prodded by state attorneys general Verizon AT T Sprint and T Mobile last year agreed to stop billing customers for third party services The case is Consumer Financial Protection Bureau v Sprint Corp U S District Court Southern District of New York No 14 cv 9931 Reporting by Alina Selyukh Editing by G Crosse and Leslie Adler |
VZ | Top four U S wireless carriers increase control of market review finds | WASHINGTON Reuters The top four U S mobile carriers expanded their control of the U S wireless market last year a federal government report said on Thursday once again finding the industry is highly concentrated as a result of continuing consolidation The Federal Communications Commission s annual review of mobile industry competition found the two largest carriers Verizon Communications Inc and AT T Inc together controlled around 70 percent of both the nationwide market share based on service revenues and the most prized type of radio airwaves Those two nationwide carriers Sprint Corp and T Mobile US Inc controlled more than 95 percent of the industry s mobile wireless service revenue up from 91 5 percent the year before the report said The FCC did not draw conclusions on whether the wireless industry was effectively competitive saying that such an assessment required analysis of numerous other factors such as prices or entry conditions The concentrated nature of the telecommunications industry has influenced the government s approach to its efforts to auction off more airwaves to wireless companies as well as potential new mergers The FCC and the Department of Justice earlier this year expressed skepticism about a proposed merger between the No 3 and No 4 carriers Sprint and T Mobile and the companies abandoned the deal Yet when it came to products and services the FCC s report found the wireless companies are expanding their new generation coverage across the country improving data downloading speeds and allowing more and more data for the same or lower prices The agency also reported that virtually all of Americans had access to at least one wireless carrier more than 99 percent of the U S population had a choice of two or more providers and almost 97 percent had three or more Those estimates have remained roughly unchanged in recent years although the portion of Americans with access to five or more carriers dropped sharply to about 23 percent in 2014 from about 80 percent in 2012 The FCC did not specify a reason To view the FCC report see Reporting by Alina Selyukh Editing by Cynthia Osterman |
XOM | Putin rues awarding U S top diplomat Tillerson Russian state honor | VLADIVOSTOK Russia Reuters Vladimir Putin took a jab at Rex Tillerson on Thursday joking that the U S Secretary of State had fallen in with the wrong company since he had awarded him a Russian state honor for his contribution to Russian U S relations Hopes of detente in Moscow s relations with Washington under Donald Trump who had praised President Putin before winning the White House have faded as the countries have imposed sanctions and expelled diplomats in recent months Addressing a U S citizen at a plenary session of an economic forum in the far eastern city of Vladivostok Putin said We awarded your compatriot Mr Tillerson the Order of Friendship but he seems to have fallen in with the wrong company and to be steering in the other direction I hope that the wind of cooperation friendship and reciprocity will eventually put him on the right path Putin added drawing cheers from the crowd In 2013 Putin awarded Tillerson then CEO of energy giant Exxon Mobil NYSE XOM the Order of Friendship a Russian state honor for his significant contribution to strengthening cooperation in the energy sector Russia s relations with the United States deteriorated over its annexation of the Black Sea peninsula of Crimea in 2014 and support for pro Russian separatists in eastern Ukraine prompting Washington to impose economic sanctions against Moscow The Kremlin which has denied U S allegations it meddled in the presidential vote had heaped praise on Trump during his election campaign saying it supported efforts to improve Russian American relations
But Trump who was faced scrutiny over the alleged ties of his entourage with Russia reluctantly signed into law fresh sanctions against Moscow further straining relations |
XOM | Russian tax agreement with Exxon | Russia may resolve a tax dispute with Exxon Mobil NYSE XOM over the Sakhalin 1 oil and gas project in September according to Energy Minister Alexander Novak
The company which is the operator of the facility and works in partnership with Rosneft OTCPK RNFTF is demanding that Russian authorities reimburse part of its overpaid profit tax for the last six years for the sum 500M
Now read |
XOM | Statoil adds two exploration licenses off South Africa | Statoil NYSE STO says it has acquired participating interests in two additional offshore frontier blocks including one operatorship offshore South Africa
STO obtains a 35 interest in a deepwater exploration block covering 45K sq km from Exxon Mobil NYSE XOM for an undisclosed amount operator XOM retains a 40 interest while Impact Africa holds 25
STO also picks up a 90 interest and operatorship in an adjacent block covering 9 3K sq km from OK Energy
Now read |
XOM | Exxon CEO cites progress in Harvey recovery preparations for Irma | Exxon Mobil XOM 0 2 is making good progress in restarting operations at its Baytown Tex refinery in the wake of Hurricane Harvey and is taking steps to ensure that Florida will stay supplied with gasoline after Hurricane Irma passes through the state CEO Darren Woods tells CNBC
It s very difficult to predict exactly when all those units will be back up and we ll be back on our full load at the 560K bbl day Baytown refinery the second largest in the U S but we re making good progress We re hoping to get some units started up later this week and then it will be one unit after another Woods says
XOM s Beaumont Tex refinery which processes 363K bbl day remains offline due to flooding though operations at the Beaumont chemical manufacturing complex restarted on Sunday
XOM has not yet assessed Harvey s impact on Q3 earnings but Woods says the storm will not affect its capital spending plans
Now read |
XOM | Harvey may pinch some Gulf Coast refining chemical projects | By Jarrett Renshaw and Ernest Scheyder NEW YORK HOUSTON Reuters Oil and petrochemical plants along the U S Gulf Coast intend to go ahead with plans for near record spending on expansions next year despite Hurricane Harvey driving up labor costs and slowing work experts said Harvey largely spared oil and petrochemical plants along the U S Gulf Coast from significant damage but thousands of homes and businesses were not as fortunate Refiners and recovery projects will complete for the same labor driving up costs or causing labor shortages Industrial investment in the Gulf Coast is expected to hit 51 9 billion next year near the 2015 peak requiring an army of pipefitters ironworkers and other craftsman said Industrial Information Resources IIR which tracks labor supply for refiners and other industrial companies We had a labor shortage before Harvey but now it s significantly worse said IIR s Anthony Salemme It s going to spread to soft crafts like painters and insulators Investments have soared in recent years because the shale revolution fed off an existing infrastructure The region s deep water ports and expanding pipeline and storage networks offer an easy outlet to global markets It also boasts a welcoming regulatory climate and skilled workforce Since 2010 85 billion worth of petrochemical projects have started or been completed across the United States nearly all of them in the Gulf Coast region according to the American Chemistry Council But the concentration along the Gulf of Mexico leaves these facilities and supporting networks exposed to the brutal force of tropical storms and hurricanes as Harvey laid bare last month The storm shut roughly a quarter of the nation s refinery capacity and more than a dozen petrochemical plants halted operations Ports were closed and key fuel pipelines serving the Midwest and U S Northeast were partially or completely shut driving up pump prices as fears of fuel shortages took hold Preliminary assessments suggest that storm s hit to the region is not deterring companies from going ahead with existing projects But global commodities buyers such as Ineos Group INEOSG UL and Reliance Industries Ltd that relied on existing facilities shut by the storm may now consider putting some warehouses and stock elsewhere The robustness of the supply chain is brought a little more under attention said David Witte a senior vice president at consultants IHS Markit They may be looking at it differently Construction costs also could slow some work INVESTMENT PLANS There is no sign that major new projects are under threat Several with plans on the drawing board including BASF SE DE BASFN DowDuPont Inc and Exxon Mobil Corp NYSE XOM are sticking to growth plans Others said they will repair Harvey s damage before making any decisions on long term strategy for the region Exxon earlier this year said it would invest 20 billion to expand Texas refining and petrochemical operations in Beaumont Corpus Christi and Baytown All three communities were damaged by Harvey As part of that expansion Exxon and Saudi Basic Industries Corp are proposing an about 10 billion chemical plant in Corpus Christi near where Harvey made landfall The project is moving forward according to a source familiar with the matter Exxon spokesman Scott Silvestri declined to comment DowDuPont is also undeterred from an ongoing 4 billion expansion project that includes new capacity in Freeport Texas on the coast Hurricane Harvey does not change our perspective on the region being a great location for our investments spokeswoman Rachelle Schikorra said in a statement Royal Dutch Shell LON RDSa Plc which is expanding its operations in the Gulf also has proposed new investments in western Pennsylvania near the natural gas rich Marcellus formation The plant will help Shell capture a larger share of the U S market for polyethylene more than half of which is concentrated in northern states It took Shell years to make the decision to build the plant Pennsylvania has started to position itself as a second U S refining region even though new plants are years away from opening The state lacks the specialized refining workforce and proximity to open water and the Panama Canal that make the Gulf Coast area still so appealing The U S Gulf Coast will remain an attractive investment area said Shell spokesman Curtis Smith and other energy officials
What this storm has demonstrated is the resilience of the energy system said Torgrim Reitan who runs Statoil OL STL ASA s U S operations Even a Harvey can t take out this capacity |
CSCO | Cisco Systems CSCO Q2 Earnings And Revenues Surpass Estimates | Cisco Systems NASDAQ CSCO came out with quarterly earnings of 0 73 per share beating the Zacks Consensus Estimate of 0 72 per share This compares to earnings of 0 63 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 1 39 A quarter ago it was expected that this seller of routers switches software and services would post earnings of 0 72 per share when it actually produced earnings of 0 75 delivering a surprise of 4 17
Over the last four quarters the company has surpassed consensus EPS estimates four times
Cisco which belongs to the Zacks Computer Networking industry posted revenues of 12 45 billion for the quarter ended January 2019 surpassing the Zacks Consensus Estimate by 0 37 This compares to year ago revenues of 11 89 billion The company has topped consensus revenue estimates four times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Cisco shares have added about 10 5 since the beginning of the year versus the S P 500 s gain of 9 5
What s Next for Cisco
While Cisco has outperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Cisco was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 75 on 12 80 billion in revenues for the coming quarter and 3 02 on 51 49 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Computer Networking is currently in the top 30 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
CSCO | Cisco wins U S patent dispute over wifi technology | By Andrew Chung NEW YORK Reuters Cisco Systems Inc O CSCO did not infringe a patent holding company s wifi technology a U S appeals court ruled on Monday reversing a near 64 million judgment against the networking equipment maker in the long running patent dispute After eight years of litigation that also included a trip to the U S Supreme Court the decision from the U S Court of Appeals for the Federal Circuit said Cisco was not liable for directly infringing or inducing others to infringe a patent held by Commil USA LLC on a way to help spread wireless signals over a large area where multiple access points are needed Cisco General Counsel Mark Chandler said the company was gratified by the ruling The patent never had anything to do with our products and the millions of dollars spent defending this unmeritorious suit are a travesty he said in an emailed statement Representatives for Commil could not be reached on Monday Texas based Commil USA sued Cisco in 2007 shortly after buying the patent from an Israeli company Commil Ltd according to court documents Cisco has called it a non practicing entity referring to a company that primarily makes money by licensing patents instead of making products In 2011 a federal jury in Texas found that Cisco induced infringement by encouraging its customers to use Cisco products that infringe Commil s patent The jury awarded Commil almost 63 8 million in damages A judge subsequently added 10 3 million in interest In 2013 the Washington D C based Federal Circuit the nation s top appeals court specializing in patent issues ordered a new trial saying that Cisco should have been able to mount a defense based on its good faith belief that Commil s patent was invalid The Supreme Court in May said that defense was not legitimate throwing out the ruling and sending the case back to the Federal Circuit A three judge Federal Circuit panel on Monday again ruled in favor of San Jose California based Cisco The panel said that when it last considered the case it did not consider some of Cisco s arguments that it did not infringe the patent In weighing those arguments this time the panel said that substantial evidence did not support the jury s findings
The case is Commil USA LLC v Cisco Systems Inc in the U S Court of Appeals for the Federal Circuit No 12 1042 |
VZ | EUR USD Euro Steady After Cautious Yellen Speech | EUR USD is subdued on Tuesday continuing the lack of activity which marked the Monday session The pair is trading at 1 1370 On the release front German Industrial Production posted a gain of 0 8 matching the forecast There are no major US events on the schedule so it could be another quiet day for EUR USD
The euro is trading quietly after a closely watched speech by Fed Chair Janet Yellen on Monday Speaking at the World Affairs Council in Philadelphia Yellen said she remained optimistic about the US economy and hinted that the Fed would raise interest banks but crucially she gave no indication as to when that might occur This omission was in sharp contrast to her remarks just over a week ago when she declared that a hike would likely be appropriate in the coming months Yellen was cautious in her tone on Monday saying i f incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective as I expect further gradual increases in the Federal Funds Rate are likely to be appropriate Yellen played down the dismal Nonfarm Payroll report saying that the markets shouldn t attach too much significance to one soft report The markets had lowered expectations for a June rate hike and Yellen s speech has all but priced out a June move However and any decision by the Fed to raise or maintain rates will be data dependent particularly inflation and employment data
The currency markets wrapped up last week with strong volatility courtesy of a dismal Nonfarm Payrolls report The April release plunged to 38 thousand stunning the markets This was the lowest reading since August 2010 The estimate stood at 159 thousand which was almost identical to the previous release The US dollar took a beating on Friday and the euro took full advantage gaining over 200 points climbing to 3 week highs The unexpectedly soft release dampened expectations for a June hike Some of the plunge in the NFP release was attributable to a strike by workers at Verizon Communications Inc NYSE VZ a major communications company Still even without this component the indicator would have posted a gain of only 72 000 well short of expectations In other US employment news Average Hourly Earnings which measures wage growth posted a weak gain of 0 2 The unemployment rate fell to 4 7 but workforce participation dropped to 62 6
EUR USD Fundamentals
Monday June 6
23 45 Japanese 3 year Bond Auction Estimate 0 31
Tuesday June 7
1 00 Japanese Leading Indicators Estimate 100 8 Actual 100 5
All release times are GMT
EUR USD for Tuesday June 7 2016
EUR USD June 7 at 8 20 GMT
Open 1 1363 Low 1 1349 High 1 1372 Close 1 1367
EUR USD Technical
EUR US has been flat in the Asian and European sessions
1 1278 is providing support
1 1376 remains a weak resistance line and could be tested in the Monday session
Further levels in both directions
Below 1 1278 1 1054 and 1 0909
Above 1 1376 1 1495 and 1 1638
Current range 1 1376 to 1 1495
OANDA s Open Positions Ratio
EUR USD ratio is unchanged on Tuesday This is consistent with the lack of movement shown by EUR USD Short positions have a majority 58 indicative of trader bias towards EUR USD breaking out and climbing to higher ground |
VZ | Level 3 Communications To Shut Down Legacy Voice Service | Level 3 Communications Inc NYSE LVLT has sought permission from the U S telecom regulator Federal Communications Commission FCC to discontinue its legacy voice services based on outdated TDM time division multiplexing technology The service is expected to shut down effective Aug 25 2016 subject to the FCC s approval All affected users will be shifted to high speed IP based network before the termination of the legacy voice system Telecom service providers are moving toward IP based network as more and more enterprise customers are opting for IP enabled cloud services Apart from Level 3 Communications national telecom carriers like Verizon Communications Inc NYSE VZ and Sprint Corp NYSE S are on the same path Verizon is awaiting the FCC s nod to stop providing postpaid calling card and personal 800 services while Sprint wants FCC approval to shut down its long distance voice network Level 3 Communications legacy voice service mainly consists of Analog PBX Trunk service and Digital PBX Trunk Service Level 3 Communications has a strong presence in several fields of enterprise networking including data networks content distribution managed services securities voice cloud and cloud connection The company stands to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber based network architecture With growing demand for bandwidth for implementing converged IP based networks Level 3 Communications growth prospects are on a solid footing Level 3 Communications is enhancing its bandwidth capability and flexibility to enable customer MNCs to adjust bandwidth according to their requirements By gradually expanding its footprint overseas the company is now threatening to overtake European market leaders like Orange SA NYSE ORAN and BT Global Services a division of BT Group LON BT Plc NYSE BT Level 3 Communications currently carries a Zacks Rank 3 Hold |
VZ | Jobs Report Changes The Landscape For Gold | Gold soars as chances for a Fed rate hike this month evaporate Brien Lundin editor of Gold Newsletter details what that means for investors
Perhaps the lesson is this Don t count gold out
Last week I was expecting another thrust downward for gold with the metal losing perhaps another 35 60 to the 1 150 1 175 range
Instead the metal soared 32 on Friday thanks to the stunning miss on the May nonfarm payrolls report
Against the consensus expectation of 158 000 jobs being created in May the report showed just 38 000 jobs a shocking miss to the downside
Rubbing salt in the wound was the fact that revisions to the April and March reports slashed another 59 000 jobs The three month average thus fell to just 116 000 a major deceleration from the monthly average of 219 000 jobs for the previous 12 months
The headline unemployment rate fell to 4 7 from 5 0 but that was solely due to 458 000 people leaving the workforce
A 180 Turn in Expectations
Prior to Friday s jobs number the market had finally begun to believe the Federal Reserve governors who had been universally pleading that Really this time we mean it We re going to hike rates this month or the next
While the odds of a June rate hike were still rather low at around 21 as judged by Fed fund futures those odds immediately collapsed to only around 4 after the release of the May jobs number
The odds of a July hike similarly collapsed from 64 to just below 30
In other words investor expectations made a 180 turn from Fed tightening to potentially monetary accommodation if the employment data continue to point toward an economic slowdown
I had been guilty of buying into the idea that the Fed was going to tighten soon While the economic data had been mixed the FOMC desperately wanted to get some breathing room above zero and the impending election would soon close the window of opportunity to raise rates
Still while I expected rate hikes I warned that gold has proven naysayers wrong time and again this year I wouldn t be surprised to see it rebound from here
My point is that gold has been performing in a bull market manner Instead of looking for excuses to sell the metal as we saw from 2011 2014 investors are interpreting new developments as reasons to buy gold
And it s hard to imagine a piece of news more dramatically bullish for gold than the disastrous May jobs number
Where we once thought the Fed would be tightening it s now obvious that we are in a dramatically new environment for investors a new world entirely than that of last week
There is of course the chance that the May payrolls report is an outlier and many have pointed to last month s Verizon NYSE VZ strike as being a one time mitigating factor But 38 000 jobs was such a massive miss even accounting for the Verizon situation that it seems almost certainly indicative of serious employment weakness
Add in the downside revisions for the prior two months and the argument for at least some sector based recessions in the U S economy seems very convincing
Yes a different world than that of last week when a Fed rate hike was looming over the markets gold bugs expected the metal to lose another 50 or so and we were eagerly awaiting a clearance sale on gold and silver companies with established resources
If the new perception indeed represents the reality of the U S economy and I think it does then we ll need to start looking further down the food chain into the drill plays for the greatest upside potential
One would expect that a move like last Friday s would need some time to consolidate and even a small correction would not be surprising
That said the decline in job creation as marked by not only the May number but also the downward revisions to the previous two months completely changes the outlook for the U S economy going forward
It s a different world than what we were expecting just last week and we need to be ready for it by owning gold silver and well positioned junior mining exploration stocks
Disclosure 1 Statements and opinions expressed are the opinions of Brien Lundin and not of Streetwise Reports or its officers The author is wholly responsible for the validity of the statements Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector The author was not paid by Streetwise Reports for this article Streetwise Reports was not paid by the author to publish or syndicate this article
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VZ | Comcast CMCSA Rolls Out DOCSIS 3 1 For Trial In Nashville | Comcast Corp NASDAQ CMCSA has initiated a consumer trial of its DOCSIS 3 1 supported advanced Gigabit Internet service in Nashville The cable behemoth had started rolling the service out in Atlanta in March this year The company is offering the service to interested customers for a 36 month period at 70 per month Upgrading to the new DOCSIS 3 1 will allow Comcast to compete effectively against AT T Inc s NYSE T ongoing Fiber to the Home FTTH program DOCSIS 3 1 versus DOCSIS 3 0 DOCSIS Data Over Cable Service Interface Specification is a communications protocol that allows cable multi service operators MSOs to provide high speed broadband connections This technology was specifically designed to be the cable TV industry s answer to high speed wireless and fiber based wireline networks of telecom operators The currently available DOCSIS 3 0 technology has helped cable TV operators compete in the race for the fastest Internet speed available in the market The DOCSIS 3 1 standard is an improved formulation of the existing DOCSIS 3 0 Theoretically while DOCSIS 3 0 supports 152 Mbps download and 108 Mbps upload speeds DOCSIS 3 1 offers as high as 10 Gbps downstream and up to 1 Gbps upstream network capabilities Additionally DOCSIS 3 1 comes with several operational benefits The technology is also backward compatible allowing the present hybrid fiber coaxial cable lines to allow such high Internet speed by simply switching to a DOCSIS 3 1 compatible modem Although FTTH has the advantage of providing unlimited bandwidth backward compatibility is a major advantage of DOCSIS 3 1 which allows cable MSOs like Comcast to provide high speed Gigabit broadband to customers without having to incur additional digging or other cable laying costs unlike FTTH providers This is sure to boost margins for the company The Bottom LineRecently increased cord cutting has put pressure on the pay TV industry leaving them looking for alternatives for revenue generation Broadband Internet has now become a key focus area for the cable MSOs like Comcast It is a no brainer that a high speed and stable broadband connection will help in customer retention and provide a host of other Internet based services such as Internet TV which is vital for future growth However Comcast will face competition from its peers like CenturyLink Inc NYSE T and wireless service providers like Verizon Communications Inc NYSE VZ who have already begun trials of a 5G network Comcast currently carries a Zacks Rank 3 Hold |
XOM | Gas prices still rising post Harvey | Several key refineries including those of ExxonMobil NYSE XOM and Phillips 66 NYSE PSX began restarting over the weekend after Hurricane Harvey slammed into the U S Gulf Coast but gasoline prices are still heading past two year highs
The storm has lifted average gasoline prices by more than 20 cents since Aug 23 as the majority of Texas ports remained closed to large vessels limiting discharge of imported crude
ETFs UGA
Now read |
XOM | Key fuel lines restart as concerns ease over supply crunch after Harvey | By Catherine Ngai HOUSTON Reuters Two key fuel pipelines were set to start up on Monday after certain segments in Texas were shut because of Hurricane Harvey helping alleviate concerns about rising retail prices and the domestic distribution of gasoline and distillates Colonial Pipeline Co the biggest U S fuel system said on Sunday it planned to reopen the main distillate line between Houston and Hebert Texas on Monday and the gasoline line between those two points on Tuesday The company had initially aimed to restart both its lines by Sunday The company s pipelines connect refineries along the U S Gulf Coast to markets in the Northeast transporting more than 3 million barrels a day of gasoline diesel and jet fuel Explorer Pipeline said late on Sunday that its Texas to Oklahoma 28 inch fuel pipeline started up as expected Its 24 inch fuel pipeline which will run from Oklahoma into the U S Midwest will restart on Monday The return of supply eased some concerns after the storm took down nearly a quarter of U S oil refining capacity hit oil and gas platforms along the Gulf and lifted average gasoline prices by more than 20 cents since Aug 23 U S gasoline futures RBc1 fell by 3 percent in early trade on Sunday Futures prices had traded at a two year high on fears of supply shortages Gasoline margins were down 9 percent Colonial is also petitioning the Federal Energy Regulatory Commission to allow it to move so called transitionary gasoline a grade between summer and winter blend which would ease the supply crunch On Sunday average retail prices rose again to 2 621 a gallon with weekly increases hitting 18 percent in Georgia and 19 percent in South Carolina according to motorists advocacy group AAA The hurricane battered Texas before weakening to a tropical storm and inundated the region with torrential rains and flooding Several refineries terminals drilling platforms and other facilities were working to restart or return to normal operations on Sunday About 5 5 percent of the Gulf s oil production and 8 4 percent of the natural gas output remained shut the federal Bureau of Safety and Environmental Enforcement said while operators began inspecting facilities and resuming work The total lost production in the Gulf since platforms started shutting is about 2 97 million barrels of oil and 6 35 billion cubic feet of gas ExxonMobil Corp N XOM said on Sunday that its Hadrian South subsea production system and Galveston 209 platform in the U S Gulf of Mexico were back online after shutting because of Harvey The firm had said over the weekend that it began restarting the country s second largest oil facility the 560 500 barrel per day Baytown Texas refinery while Phillips 66 N PSX said it was working to resume operations at its 247 000 bpd Sweeny refinery Pipelines and terminals have also been restarting over the weekend assuaging worries over the ability of refineries to get the crude oil they need to operate
Still several Texas ports remained closed to large vessels limiting discharge of imported crude and products |
XOM | Motiva refinery begins restart Exxon says Baytown refinery making progress | Saudi Aramco s Motiva Enterprises says it is in the initial phase of restarting its 603K bbl day Port Arthur Tex refinery the largest crude oil refinery in the U S after it was shut by Hurricane Harvey last week
Meanwhile Exxon Mobil NYSE XOM says it continues to work to reopen its 560K bbl day Baytown Tex refinery and has made significant progress in restarting its chemical facilities
XOM says its Houston area fuel terminals are open and supplying gasoline offshore Gulf of Mexico operations are starting to return to normal operations and its 362K bbl day Beaumont refinery is still offline due to flooding
Now read |
CSCO | Stock Market Mixed Week | Markets It was a mixed week with the DOW and S P flat as the NASDAQ and the Russell small caps gained 5
After lurching into Christmas U S stocks had staged an almost uninterrupted rebound in 2019 before hitting a wall this week and ending virtually flat It happened against a worrisome backdrop in which skeptical analysts have cut estimates for first quarter profit growth below zero for the first time in three years
No problem say the bulls Valuations are reasonable Earnings for the full year are still predicted to climb 5 4 percent But a concern lurks for anyone who has followed markets for very long Wall Street s near perfect record of over estimating growth Short declines in profits have a habit of turning into long ones And most of this year s gains expected are clustered precariously at its end Bloomberg
Stocks sank on Thursday as worries that the United States and China would not be able to reach a trade deal before the March 1st deadline increased concerns about slowing global economic growth NY Times
High Dividend Stocks These high yield stocks go ex dividend next week DX IVZ ARR EVA LKSD SXCP
Volatility The VIX fell 2 6 this week ending at 16 14
Currency The U S rose vs most major currencies this week
Market Breadth 15 DOW 30 stocks fell this week vs 21 rising last week 56 of the S P 500 rose this week vs 78 rising last week
Economic News
Australia s dollar won the wooden spoon among Group of 10 currencies last year beating its New Zealand cousin in a race to the bottom This year the contest is a race to the top
Both commodity currencies are rallying in 2019 after the Federal Reserve turned dovish and as China introduces a slew of measures to bolster flagging growth The Aussie and kiwi have both strengthened about 3 percent since the start of January after sliding 9 7 percent and 5 3 percent respectively in 2018
The first half of February will go a long way to proving if the Aussie or kiwi is the real deal with interest rate decisions from the two central banks along with the Australia central bank s quarterly assessment of economic conditions and key New Zealand job data
The Aussie may get a further leg up if the RBA gives out any further hawkish signals in this Tuesday s policy statement For the kiwi any improvement in employment and wage data on Thursday would back up recent gains in business sentiment and possibly herald a more positive tone when policymakers meet on Feb 13 Bloomberg
ISM non manufacturing the index came in at 56 7 for January below expected 57 1
Week Ahead Highlights
Trade talks are the biggest event of the week ahead for markets and investors are watching for signs of progress ahead of a March 1 deadline on new tariffs The fourth quarter earnings season continues to roll on with about 60 S P 500 companies reporting including Coke Pepsi and Cisco NASDAQ CSCO CNBC
Next Week s U S Economic Reports
Sectors Utilities led the pack this week with Energy trailing as investors turned defensive
Futures
WTI Crude fell 4 6 this week finishing the week at 52 71 while Natural Gas fell 4 2 |
CSCO | Cisco chairman promises win win deal with China over network control | By Matt Smith DUBAI Reuters Cisco s O CSCO executive chairman on Monday declined to say whether it would cede to China s demands to be able to control equipment deployed in the world s largest internet market instead pledging to find a win win solution The world s top maker of switching equipment and routers that run the Internet has a bet big on China announcing in June it would invest more than 10 billion in the country along with local business partners Cisco s commitment comes despite unease among foreign business groups over a China national security law adopted in July demanding all key network infrastructure and information systems be secure and controllable We will find a way to make it a win win situation executive chairman John Chambers told Reuters on the sidelines of a news conference in Dubai Foreign firms warn China s new law is vaguely worded and could require technology firms to manufacture products in China or release source code to inspectors thereby exposing intellectual property We give our source code to no one Chambers told the conference when asked if Cisco would give China a written promise that it would comply with government demands declining to directly answer the question We spent three years winning the trust of the Chinese government and if you watch most American companies their businesses in China is down dramatically so was ours for several years Do you know how much we grew in China last quarter Forty percent Foreign technology firms have been increasingly squeezed out of China the world s biggest Internet market as Beijing seeks to promote domestic technology suppliers it says are needed to protect state secrets and data Earlier this year a Reuters analysis found Cisco was among U S technology firms that had been dropped from state procurement lists in recent years There are legitimate needs of all government in terms of the issues of terrorism and national security added Chambers
I think you have to disclose when you re gathering information on people and if you do it right on a trust basis even with some of the countries of the world that might surprise you you can find a true partnership basis |
CSCO | Philips in lighting partnerships with Cisco SAP and Bosch | AMSTERDAM Reuters Philips AS PHG has entered strategic partnerships with Cisco O CSCO SAP DE SAPG and Bosch ROBG UL under which the Dutch company will become their preferred supplier for networked lighting
Philips Lighting CEO Eric Rondolat said on Wednesday that his company would collaborate with Cisco on networked lighting for office buildings SAP for city lighting and Bosch on networked homes
The Dutch healthcare systems and lighting group is planning to spin off its lighting division the world s largest next year
The companies did not provide financial details of the partnerships and the deals are not exclusive
Cisco manager Steve Steinhilber described the partnership as transformational and said his company is devoting a lot of resources to making Philips lights an integral part of Cisco s platform for managing office networks
Philips estimates the office lighting market at 1 billion euros 1 09 billion a year
SAP manager Martin Klein said his company has no plans to draw on other suppliers for its HANA platform used by city managers to provide an overview of vital city infrastructure
In October Philips Lighting reported third quarter earnings before interest tax and amortization EBITA of 126 million euros on sales of 1 83 billion euros
1 0 9160 euros |
VZ | U S Bond Market Week In Review The Hawks Get Silenced | Hawkish sentiment was the norm at the Federal Reserve guaranteeing a rate hike in the next few meetings But Fed policy remains data dependent as their noted in their last policy statement However the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data From an analytical standpoint we re now looking for any event that would change the Fed s hawkish bias All data sans Friday s employment report supported the hawks But Friday s jobs numbers were so negative that a June rate hike is probably off the table
On Wednesday the Fed released the Beige Book which once again painted a picture of a modest or moderately expanding economy
Information received from the 12 Federal Reserve Districts mostly described modest economic growth since the last Beige Book report Economic activity in April through mid May increased at a moderate pace in the San Francisco District while modest growth was reported by Philadelphia Cleveland Atlanta Chicago St Louis and Minneapolis Chicago noted that the pace of growth slowed as did Kansas City Dallas reported that economic activity grew marginally while New York characterized activity as generally flat since the last report Several Districts noted that contacts had generally optimistic outlooks with firms expecting growth either to continue at its current pace or to increase
Consumer spending was up modestly on balance in many Districts though contacts in the Boston Cleveland Minneapolis and Dallas Districts reported mixed or flat activity and New York reported weakened sales Many Districts reported modest growth in nonfinancial services Manufacturing activity was mixed across Districts Construction and real estate activity generally expanded since the last report and the overall outlook among contacts in these industries remained positive Overall loan demand was up moderately in all but one of the Districts that reported it and many Districts reported steady to good credit availability Crop conditions were promising in many Districts but low commodity prices continued to put pressure on agricultural incomes The energy sector remained weak Employment grew modestly since the last report but tight labor markets were widely noted wages grew modestly and price pressure grew slightly in most Districts
The first paragraph provides an overview of each Fed district with the majority reporting a positive economic environment Four districts Chicago Kansas City Dallas and NY reported slightly weaker growth but none are in dire shape The second paragraph contains an overview of each GDP component again all show modest increases There were a few cautionary remarks several districts saw somewhat weaker consumer sales while manufacturing was mixed But on balance the various economic sectors point to a continued modest expansion
Price and unemployment claims also support the hawks On Tuesday the BEA released the latest person income figures
The April PCE price index increased 1 1 percent from April a year ago The April PCE price index excluding food and energy increased 1 6 percent from April a year ago
Price increases are approaching the Fed s 2 target And on Thursday the Department of Labor reported initial claims for unemployment dropped a third consecutive week this time to 267 000 Several weeks ago this number increased to just shy of 300 000 which caused some analysts to issue cautionary comments It s likely the recently settled Verizon Communications Inc NYSE VZ strike had a disproportionate impact on the number But the now lower number clearly supports the hawks
And then we come to Friday s jobs report with a 38 000 headline number a very large miss Both manufacturing and service sector growth showed sharp declines The previous two months were lowered by a combined 59 000 And while the unemployment rate declined to 4 7 people leaving the labor force were the primary reason for the decline There was nothing good in the report In fact it was so negative that a June rate hike is probably off the table |
VZ | Sprint Presents 5G Capability At Copa America Centenario | U S national wireless carrier Sprint Corp NYSE S unveiled its 5G technology at a Copa America event in Santa Clara CA The company exhibited live streaming of videos in 4K resolution with very low latency The company is working with Nokia HE NOKIA Corporation and Ericsson ST ERICAs for testing its 5G network Sprint s telecom rivals Verizon Communications Inc NYSE VZ AT T Inc NYSE T and T Mobile US NYSE T all had initiated 5G testing earlier The 5G Advantage Several industry researchers hold that 5G network will provide a download speed of 1 Gbps gigabit per second which is 200 times the throughput of the currently available standard 4G LTE network Latency period of data delivery will be in single milliseconds Further 5G technology is designed to be more power efficient than other standard wireless networks available these days Therefore 5G enabled mobile devices are likely to last much longer than their 3G or 4G counterparts Additionally superfast 5G mobile networks will be of utmost necessity in managing exponential growth of Internet connected devices popularly known as Internet of Things IoT Advantages for SprintSprint has been losing customers lately and is trying every means to control churn to keep up with the competition In this regard the company has been continually making efforts to lure customers from rival carriers through offering attractive promotional plans This has led to a high cash burn rate and heavy losses for the company over several years Notably Sprint refrained from taking part in the ongoing 600 MHz low band spectrum auction popularly known as Incentive Auction conducted by the U S telecom regulator Federal Communications Commission FCC due to a shortage of funds Although several industry researchers do not expect a full fledged 5G network deployment to start until 2020 Sprint s rival Verizon projects some level of commercial deployment in 2017 Given the stiff competition in the telecom space Sprint s efforts on making its mark among the industry leaders and actively researching and demonstrating its 5G capabilities have been commendable However only time can tell whether Sprint will be able to deploy the technology effectively before its peers and benefit from being the first player in this market |
VZ | EUR USD Target Raised To 1 1490 Profit Locked In At 1 1240 | EUR USD Target Raised To 1 1490 Profit Locked In At 1 1240
Nonfarm payrolls increased by only 38k jobs last month the smallest gain since September 2010 Employment gains were also restrained by a month long strike by Verizon Communications Inc NYSE VZ workers which depressed information sector payrolls by 34k jobs Underscoring the report s weakness employers hired 59k fewer workers in March and April than previously reported While the unemployment rate fell three tenths of a percentage point to 4 7 in May the lowest level since November 2007 that was because 458k Americans gave up the search for work
The weakness in the May employment data was broad based The private sector added only 25k jobs the smallest number since February 2010 Manufacturing employment fell by 10k jobs and construction payrolls dropped by 15k the most since December 2013 Mining employment maintained its downward trend shedding 10k positions Mining payrolls have dropped by 207k since peaking in September 2014 with three quarters of the losses in support activities Retail payrolls rose 11 400 after losing jobs in April for the first time since December 2014 Wholesale trade employment fell by 10 300 jobs Temporary help jobs a harbinger for future hiring dropped by 21k There were declines in utilities and transportation and warehousing employment Government payrolls increased by 13k and healthcare jobs jumped by 55k
The Fed has signaled its intention to raise rates soon if job gains continue and economic data remain consistent with a pickup in growth in the second quarter The US economy created the fewest number of jobs in more than five and a half years in May which could make it harder for the Federal Reserve to raise interest rates in June
Financial markets largely priced out a rate increase at the Fed s June 14 15 policy meeting after Friday s data The chance of an increase in July fell to 37 from about 59 late on Thursday
Federal Reserve Governor Lael Brainard said the US labor market may be slowing and the economy is still too fragile for a rate hike Brainard s remarks may not shift the immediate debate ahead of the Fed s upcoming June meeting Expectations were already low for rate hike at that session because it falls a week before a British vote on whether to leave the European Union an event Brainard cited alongside her other Fed colleagues as a risk they d rather have behind them before raising rates
On the other hand Cleveland Federal Reserve President Loretta Mester said the latest disappointing US jobs number has not changed the overall economic picture and gradual rate hikes remain appropriate
Boston Fed President Eric Rosengren gave the latest hint that while the US central bank remains on track to continue tightening policy it likely will not do so at a June 14 15 meeting Rosengren said the jobs data contrasted with a strong pick up in US spending and growth in the second quarter so it will be important to see whether the weakness in this report is an anomaly or reflects a broader slowing in labor markets
The Commerce Department said on Friday new orders for manufactured goods increased 1 9 the largest increase since October suggesting the sector was starting to stabilize March s orders were revised to show a 1 7 increase instead of the previously reported 1 5 gain
These so called core capital goods are seen as a measure of business confidence and spending plans on equipment Core capital goods shipments which are used to calculate business equipment spending in the GDP report rose 0 4 in April rather than the 0 3 gain reported last month
Inventories of factory goods dipped 0 1 suggesting factories were making progress in reducing the inventory bloat That could support future production at factories The inventories to shipments ratio fell to 1 36 in April down from 1 37 in March Unfilled orders at factories increased 0 6 while shipments of manufactured goods rose 0 5
The Commerce Department said also the trade gap rose to USD 37 4 billion in April March s trade deficit was revised down to USD 35 5 billion which was the smallest since December 2013 from the previously reported USD 40 4 billion The trade deficit for April was smaller than the monthly average for the first quarter suggesting trade will probably contribute to gross domestic product in the April June period Trade has been a drag on GDP growth over the last three quarters
The USD languished at more than three week lows against a basket of major currencies on Monday after a strongly disappointing employment report prompted investors to rule out the chance of a hike in US interest rates this month
In our opinion Federal Chair Janet Yellen who is due to speak on economic outlook and monetary policy to the World Affairs Council of Philadelphia at 16 30 GMT will craft her message to keep expectations for a July hike alive
Our EUR USD long is in good shape after weaker than expected US jobs report However today s speech of Janet Yellen is an important risk factor That is why we have locked in profit in the speculative part of our portfolio at 1 1240 On the other hand dovish Yellen may trigger another jump in the EUR USD and we have raised the target on short term position to 1 1490 We keep bullish EUR USD outlook in the long term part of the portfolio here we have raised the target to 1 1650
USD CAD Loonie Stronger Against Dollar But Weaker Against Euro
The CAD strengthened to a one week high against its broadly weaker USD on Friday after a slowdown in US jobs growth lowered chances of an interest rate hike by the Federal Reserve offsetting disappointing domestic data
Investors also weighed the impact on Canada s economy if growth in its biggest trading partner falters The implied probability of a Bank of Canada interest rate cut this year jumped to more than 50 from less than 30 before the US jobs data overnight index swaps showed However the gap between the yield on Canada s 2 year bond and the comparable US Treasury narrowed as US yields fell more sharply than Canada s That is why the CAD appreciated against the USD but is weaker against the EUR
Canada s trade deficit in April narrowed to CAD 2 94 billion from a record CAD 3 18 billion in March as exports grew at a slightly faster rate than imports Exports rose by 1 5 overall as oil prices recovered slightly and the United States imported more natural gas Exports of industrial machinery equipment and parts jumped by 10 5 to hit a 15 year high Imports increased by 0 9 on higher imports of aircraft and other transportation equipment
We keep bearish USD CAD outlook The nearest important support is the area from 1 2911 low May 10 to 1 2916 low June 3
FOREX MAJOR PAIRS
It is usually reasonable to divide your portfolio into two parts the core investment part and the satellite speculative part The core part is the one you would want to make profit with in the long term thanks to the long term trend in price changes Such an approach is a clear investment as you are bound to keep your position opened for a considerable amount of time in order to realize the profit The speculative part is quite the contrary You would open a speculative position with short term gains in your mind and with the awareness that even though potentially more profitable than investments speculation is also way more risky In typical circumstances investments should account for 60 90 of your portfolio the rest being speculative positions This way you may enjoy a possibly higher rate of return than in the case of putting all of your money into investment positions and at the same time you may not have to be afraid of severe losses in the short term
How to read these tables 1 Support Resistance three closest important support resistance levels 2 Position Trading Idea BUY SELL It means we are looking to open LONG SHORT position at the Entry Price If the order is filled we will set the suggested Target and Stop loss It means we have already taken this position at the Entry Price and expect the rate to go up down to the Target level 3 Stop Loss Profit Locked In Sometimes we move the stop loss level above in case of LONG or below in case of SHORT the Entry price This means that we have locked in profit on this position 4 Risk Factor green means high level of confidence low level of uncertainty grey means medium level of confidence red means low level of confidence high level of uncertainty 5 Position Size forex position size suggested for a USD 10 000 trading account in mini lots You can calculate your position size as follows your account size in USD USD 10 000 our position size You should always round the result down For example if the result was 2 671 your position size should be 2 mini lots This would be a great tool for your risk management Position size precious metals position size suggested for a USD 10 000 trading account in units You can calculate your position size as follows your account size in USD USD 10 000 our position size 6 Profit Loss on recently closed position forex is the amount of pips we have earned lost on recently closed position The amount in USD is calculated on the assumption of suggested position size for USD 10 000 trading account Profit Loss on recently closed position precious metals is profit loss we have earned lost per unit on recently closed position The amount in USD is calculated on the assumption of suggested position size for USD 10 000 trading account
Source |
VZ | EUR USD Euro Steady After Huge Gains On Friday | EUR USD is subdued on Monday following very sharp gains in the Friday session The pair is trading at 1 1357 On the release front it s a quiet start to the week German Factory Services declined 2 0 well below expectations Eurozone Retail PMI improved to 50 6 points and Eurozone Sentix Investor Confidence jumped to 9 9 points well above the forecast In the US there are no major releases on the schedule Fed chair Janet Yellen will address a conference in Philadelphia
The currency markets wrapped up last week with strong volatility courtesy of a dismal Nonfarm Payrolls report The April plunged to 38 thousand stunning the markets Analysts could be forgiven for rubbing their eyes in disbelief at this figure which was the lowest reading since August 2010 The estimate stood at 159 thousand which was almost identical to the previous release The US dollar took a beating on Friday and the euro took full advantage gaining over 200 points climbing to 3 week highs This release could have significant ramifications and c Some of the plunge in the NFP release is attributable to a strike by workers at Verizon Communications Inc NYSE VZ a major communications company Still even without this component the indicator would have posted a gain of only 72 000 well short of expectations In other US employment news Average Hourly Earnings which measures wage growth posted a weak gain of 0 2 The unemployment rate fell to 4 7 but workforce participation dropped to 62 6
As expected the ECB opted to remain on the sidelines at its policy meeting on Thursday The ECB maintained its monetary policy as the main lending rates remained at 0 00 the deposit rate at 0 40 and the asset purchase program QE at 80 billion euros month Speaking after the ECB announcement Mario Draghi reiterated that inflation was likely to remain very low or in negative territory for some time He stated that the ECB had revised its inflation forecast for 2016 to 0 2 from 0 1 Draghi acknowledged that risks to the euro area growth outlook remain tilted to the downside but tried to put a positive spin on the bloc s economy However the markets are likely to remain skeptical about Draghi s optimistic spin Eurozone inflation remains far far away from the target of 2 0 and given current economic conditions the inflation picture is unlikely to improve anytime soon Draghi is clearly reluctant to lower interest rates into negative territory so he may opt to extend the QE program beyond March 2017 Commerzbank chief economist Jorg Kramer has called Draghi s monetary stance forced optimism and says that the ECB will have no choice but to adopt further stimulus measures
EUR USD Fundamentals
Monday June 6
6 00 German Factory Orders Estimate 0 4 Actual 2 0
8 10 Eurozone Retail PMI Actual 50 6
8 30 Eurozone Sentix Investor Confidence Estimate 7 1 Actual 9 9
14 00 US Labor Market Conditions Index
16 30 US Fed Chair Janet Yellen Speaks
Key events are in bold
All release times are GMT
EUR USD for Monday June 6 2016
EUR USD June 6 at 9 00 GMT
Open 1 1350 Low 1 1134 High 1 1363 Close 1 1355
EUR USD Technical
EUR US has shown little movement in the Asian and European sessions
1 1278 is providing support
1 1376 is a weak resistance line and could be tested in the Monday session
Further levels in both directions
Below 1 1278 1 1054 and 1 0909
Above 1 1376 1 1495 and 1 1638
Current range 1 1376 to 1 1495
OANDA s Open Positions Ratio
EUR USD ratio has posted strong movement towards short positions This is consistent with the sharp gains shown by EUR USD on Friday Short positions have a majority 58 indicative of trader bias towards EUR USD resuming its upward movement |
VZ | AUD USD Aussie Steady Ahead Of RBA Rate Announcement | The Australian dollar has edged higher on Monday as the pair trades at 0 7360 line early in the North American session On the release front Australian Inflation Gauge declined 0 2 while ANZ Job Advertisements posted a gain of 2 4 Early Wednesday the RBA will release its interest rate announcement In the US there are no major releases on the schedule Fed chair Janet Yellen will deliver remarks at an event in Philadelphia
Will the RBA lower rates at the upcoming policy meeting The markets don t think so as rates are expected to remain steady at 1 75 The RBA lowered rates in May by a quarter point from 2 00 to 1 75 Although inflation remains low and the RBA has sent clear messages to the markets that it expects to lower rates However there are two factors mitigating against a June move First a national election has been called for July 2 and the RBA will likely want to avoid any major moves during an election campaign As well a strong GDP report for the first quarter gives the RBA some breathing room GDP expanded 1 1 well above the estimate of 0 6 The strong reading was credited to a strong increase in exports to China and higher consumer spending This marked the strongest GDP report since 2014
The US dollar was broadly lower on Friday courtesy of a dismal Nonfarm Payrolls report The April release fell to just 38 thousand stunning the markets Analysts could be forgiven for rubbing their eyes in disbelief at this figure which was the lowest reading since August 2010 The estimate stood at 159 thousand which was almost identical to the previous release The Aussie jumped on the bandwagon climbing 130 points on Friday and hitting a 3 week high This NFP report could have significant ramifications and Some of the plunge in the NFP release is attributable to a strike by workers at Verizon Communications Inc NYSE VZ a major communications company Still even without this component the indicator would have posted a gain of only 72 000 well short of expectations In other US employment news Average Hourly Earnings which measures wage growth posted a weak gain of 0 2 The unemployment rate fell to 4 7 but workforce participation dropped to 62 6
AUD USD Fundamentals
Sunday June 5
21 00 Australian Inflation Gauge Actual 0 2
21 30 Australian ANZ Job Advertisements Actual 2 4
Monday June 6
10 00 US Labor Market Conditions Index
12 30 US Fed Chair Janet Yellen Speaks
19 30 Australian AIG Construction Index
Upcoming Key Events
Tuesday June 7
00 30 Australian Cash Rate Estimate 1 75
00 30 Australian RBA Rate Statement
Key releases are highlighted in bold
All release times are EDT
AUD USD for Monday June 6 2016
AUD USD June 6 at 8 50 EDT
Open 0 7343 Low 0 7314 High 0 7371 Close 0 7361
AUD USD Technical
AUD USD posted small losses in the the Asian session but recovered in European trade
0 7339 was tested earlier in support and could break in the North American session
0 7472 is a strong resistance line
Current range 0 7339 to 0 7472
Further levels in both directions
Below 0 7339 0 7251 and 0 7160
Above 0 7472 0 7612 and 0 7339
OANDA s Open Positions Ratio
AUD USD ratio is showing long positions with a strong majority 62 indicative of trader bias towards AUD USD continuing to move higher |
VZ | S P 500 Futures 38 000 Jobs Flunk A Dunk | We knew there was going to be a big drop in the May non farm payroll number due to over 40k people out of work because of the Verizon Communications Inc NYSE VZ strike and when the 7 30 CT number was released showing only 38 000 jobs created the S P futures dropped and then dropped again after the 8 30 futures open The number sent shock waves all over the place but the two places it really showed up in were the Japanese yen which rallied 2 1 and the CBOT s 30 year bond futures ZBU6 CBT which traded all the way up to 166 28 up two full handles The 1 74 million ES contracts traded was an uptick in the daily volume but still not overly large when you consider the big move down and the big move back up late in the day Throughout the day the yen and bonds maintained their rally but the S P 500 futures found an early first hour low and began to climb throughout the midday into the afternoon Going into the close the ES was once again tagging the 2100 level before closing just off the highs on a MOC imbalance of over 1 Billion to buy making it 1 Billion to buy in three of the last five MOC days
Thinking You Know Better
I have been preaching about becoming more patient and on Friday instead of paying attention to the ESM16 trading range I bought too early I knew the Twitter bears were out calling for blood but by the time the ES actually rallied I had tried to buy the futures 3 different times with the final trade being stopped out at 2083 50 three ticks off the low of the day It happens like that when you think you know better than the markets They have a way of feeling out bad trading decisions and most of the time like Friday the markets will go back the other way It s just a question of how much you are willing to risk
It s become obvious that until the market shows a different hand the tape clearly favors dip buyers Sure 2100 has been resistance but the inability of sellers to capitalize on this resistance and maintain a push lower is telling Last year the S P futures spent a lot of time crossing back and forth through 2100 Heading into this summer it feels that one of these time the S P is going to bounce above stay above build a floor there and start to target many of those upside buy stops
Overnight markets in Asia and Europe rallied modestly helping the S P 500 futures maintain a sideways bid on low volume at 6 30 am cst The ESM16 traded up to 2102 75 early in the European session up 8 75 handles from the early 2094 globex low and is currently just trading two handles off that high Today s calendar features Janet Yellen speaking in the afternoon which could lead to some volatility otherwise it looks to be a Mutual Fund Monday with a low volume grind higher Levels to watch are the 2095 2094 globex low area then Friday afternoons 2091 50 low Pullbacks to these areas look like good buying opportunities To the upside bulls need to push above Friday s globex high today making a higher high
In Asia 8 out of 11 markets closed higher Shanghai 0 16 and In Europe 8 out of 11 markets are trading higher this morning DAX 0 14 This week s economic calendar includes 20 reports 3 Fed speakers and 11 US Treasury events Today s economic calendar includes Eric Rosengren Speaking Gallup US Consumer Spending Measure Labor Market Conditions Index 4 Week Bill Announcement 3 Month Bill Auction 6 Month Bill Auction TD Ameritrade IMX and Janet Yellen Speaks
Our View Smart guys don t always win in this game patient guys and gals win It s one of the hardest and most profitable things we can learn Had I widened out my stops to 5 handles I would have caught it but that goes back to the shoulda woulda coulda thing that just doesn t work in the real world You are either in or you re out there is no between
There are a lot of low level economic reports this week 20 compared with last week s 25 June is kicking into gear and kids are getting out of school Plain and simple there is going to be less trading That doesn t mean the ES and NQ won t be moving they will be I think there is a lot of chop coming
In Asia 8 out of 11 markets closed higher Shanghai Composite 0 16 Hang Seng 0 40 Nikkei 0 37
In Europe 8 out of 11 markets are trading higher CAC 0 02 DAX 0 14 FTSE 0 97 at 6 30am CT
Fair Value S P 1 47 NASDAQ 1 20 Dow 12 90
Total Volume 1 7mil ESM and 6 8k SPM traded |
VZ | T Mobile US To Offer Stocks Other Freebies To Customers | T Mobile US Inc NYSE T the fastest growing wireless carrier in the U S has introduced the Get Thanked program to execute a series of giveaways Under the program T Mobile US will give its customers free Domino s pizzas Wendy s ice creams movie rentals and a bunch of other freebies through its T Mobile Tuesdays app While free giveaways and cash credits have been frequently used by wireless players to retain customers in the heavily contested telecom market none of these came close to T Mobile US latest Stock Up promotional campaign an innovative idea of granting a stock to its postpaid customers Would Giving Away Free Stocks Do the Trick Of late T Mobile US customer base has been growing impressively At the end of first quarter 2016 the company s branded postpaid phone customers totaled 30 232 million up 12 7 year over year The branded postpaid mobile broadband customer count was 2 504 million up a substantial 69 8 The quarterly churn rate was also stable at 1 3 Most of these came on the back of the novel Un carrier campaign as well as T Mobile US efforts on network improvement and modernization However with rivals like AT T Inc NYSE T Sprint Corporation NYSE S and Verizon Communications Inc NYSE VZ stepping up the game by the introduction of aggressive promotional plans the cost for a customer to switch to another carrier s network commonly known as switching cost is now at an all time low In general a high switching cost in any industry translates higher customer retention Meanwhile under the Stock up plan T Mobile will give each of its postpaid customers a stock of the company as a gesture of gratitude Customers can also get a stock per referral with a cap of 100 stocks in a year However there will be no new issue of shares except for a stock buyback from the market and re issuance of the same to eligible customers The entire operation will be undertaken by Loyal3 an online brokerage firm Our AnalysisGiven that the Stock up plan is the first of its kind let s try to analyze the effects of such an initiative on the company s finances share price and most importantly its investors Per the buyback plan the company has registered 1 million shares under a regulatory filing on Monday However with T Mobile US postpaid customer base of 10 million there is an inherent risk of customers demanding for more than 1 million of such shares This could stretch the company s share price for a short period increasing the cash outflow for T Mobile US thereby causing short term liquidity pressure Meanwhile if the company successfully implements and manages this operation the buyback activities will drive its shares Apart from this an increase in customer count would also be a positive for the stock Moreover the cost of executing this plan could be lower than other customer incentive and loyalty plans such as cash credit and payment of termination charges for facilitating customer transition from other carriers However a widespread redeeming of stock for cash will exert selling pressure dragging the stock down T Mobile currently carries a Zacks Rank 3 Hold |
VZ | Verizon Q3 adjusted EPS 0 89 below expectations for 0 90 | Investing com Verizon Communications NYSE VZ the largest mobile network operator in the U S reported weaker than expected third quarter earnings and revenue ahead of Tuesday s opening bell
Verizon said adjusted earnings per share came in at 0 89 just missing expectations for earnings of 0 90 per share
The mobile network operator s third quarter revenue totaled 31 59 billion broadly in line with market expectations
The company said wireless retail net additions totaled 1 5 million in the three months ended September 30
Chairman and CEO Lowell McAdam said We have great confidence heading into the fourth quarter as Verizon continues to deliver consistently strong operating and financial results
Immediately after the earnings announcement VZ shares tacked on 0 6 in trading prior to the opening bell
Meanwhile the outlook for U S equity markets was upbeat The Dow futures indicated a gain of 0 45 at the open the S P 500 futures pointed to a rise of 0 65 while Nasdaq 100 futures tacked on 0 8 |
VZ | Verizon posts higher revenue as consumers use more data | By Marina Lopes WASHINGTON Reuters Verizon Communications Inc s N VZ quarterly revenue rose 4 3 percent matching forecasts as price cuts attracted more customers and growing mobile video traffic boosted data usage Subscribers tendency to use more than one device plugging in tablets and vehicle consoles to its network also bolstered results Postpaid customers connected nearly three devices per account an increase of 3 7 percent Verizon the largest U S wireless carrier added 1 5 million postpaid subscribers or those who pay for service after use beating Wall Street estimates of about 1 million customers Overall it was a good quarter for Verizon in terms of new additions It is still a very competitive landscape and the fourth quarter could be challenging on a margin front as you look at a promotional period with a new iPhone said Angelo Zino analyst at S P Capital IQ in New York As subscribers watch more videos on their phones the amount of data they consume is increasing Customers on Verizon s More Everything shared data plan which accounts for over one half of its customers are using 50 percent more data than a year ago It is not just about a smartphone customer it is about how we build a base of revenue Fran Shammo chief financial officer told investors on a conference call Subscribers were also drawn to the carrier by cheaper prices Verizon has been cautious in cutting prices in a hyper competitive environment but recently launched a series of promotions following reductions by rivals Quite honestly this puts us back in the market Given all the pricing moves we were quite honestly out of the market said Shammo The service margin for Verizon s wireline sector fell 1 6 percent to 49 5 percent pressured by equipment financing plans that have lower service fees Increasing competition and lower prices are expected to squeeze margins across the telecom sector this quarter AT T N T reports earnings on Wednesday followed by Sprint N S and T Mobile N TMUS next week Recent price cuts and aggressive promotions has some investors worried the industry has entered a price war as carriers compete for customers in a near saturated market In response many wireless carriers have replaced traditional two year contracts with equipment financing plans that charge lower service fees but do not subsidize devices But Verizon has been reluctant to dump the two year contract The carrier saw a tepid rise in customers subscribing to such plans in the most recent quarter but expects the percentage of those signing up to double in the fourth quarter Verizon reported third quarter profit of 89 cents per share up from 78 cents per share a year earlier but a penny shy of the average analyst estimate according to Thomson Reuters I B E S Revenue rose 4 3 percent to 31 6 billion matching forecasts Total revenues for Verizon s wireless business grew 7 percent year over year while falling 0 8 percent for its broadband internet and video product
Verizon shares rose 10 cents to 48 58 Reporting by Marina Lopes Editing by Lisa Von Ahn Jeffrey Benkoe and Cynthia Osterman |
VZ | U S sues AT T over alleged data throttling on phone plans | By Diane Bartz WASHINGTON Reuters The U S government sued AT T Inc N T on Tuesday alleging the No 2 U S wireless carrier sold consumers unlimited data plans but would reduce their Internet speeds once they exceeded a certain amount of data
The Federal Trade Commission said this throttling of Internet feeds was deceptive and that in some cases data speeds were slowed by nearly 90 percent
FTC Chairwoman Edith Ramirez said that AT T wanted to retain longtime customers and so allowed them to buy unlimited data plans in some cases after new customers were no longer offered unlimited plans Then they unilaterally changed the terms she said
They stopped providing the service that customers understood they had purchased when they entered into their contract she said Customers would be subject to an early termination fee if they wanted to get out of their existing contract
AT T called the allegations baseless and said the practice was needed to manage network resources
We have been completely transparent with customers since the very beginning said Wayne Watts AT T s general counsel This program has affected only about 3 percent of our customers and before any customer is affected they are also notified by text message
More than 3 5 million customers with legacy unlimited data plans had their Internet speeds slowed more than 25 million times by AT T s practice which began in October 2011 the FTC said
AT T says on its support website that people with certain plans can experience data slowdowns once they exceed certain limits Customers with a 3G smartphone will experience slowdowns after using 3 gigabytes of data in a month while those with 4G LTE smartphones can use 5 gigabytes before potential slowdowns
Those who dislike the throttling can use Wi Fi or switch to a different plan AT T says on its website
AT T closed up 0 6 percent at 34 33 per share
Federal Communications Commission Chairman Tom Wheeler has said that his agency was troubled that some carriers singled out specific customers for throttling
The FCC is reviewing wireless carriers data management practices after Verizon N VZ in July announced that the top 5 percent of high speed data users on its older unlimited data plans might experience slower speeds
Verizon the largest U S wireless provider ultimately scrapped the plan for the higher speed 4G network though the policy is in effect for unlimited subscribers on the 3G network
Sprint N S and T Mobile US N TMUS continue to offer unlimited data plans
Earlier this month AT T said it would pay 105 million to settle FTC allegations that it put unauthorized changes on customers mobile phone bills
Separately the Justice Department is currently reviewing AT T s proposed purchase of DirecTV O DTV
The case in the U S District Court for the Northern District of California is FTC v AT T Mobility LLC
Reporting by Diane Bartz Editing by Ros Krasny Alan Crosby and Phil Berlowitz |
VZ | AT T to pause fiber spending on net neutrality uncertainty | By Marina Lopes WASHINGTON Reuters AT T Inc N T on Wednesday raised pressure on the U S telecommunications regulator s work on new net neutrality rules saying it would stop investing in high speed Internet connections in 100 cities until the Web rules were settled The statement from AT T Chief Executive Officer Randall Stephenson is the first move by an Internet service provider in response to President Barack Obama s unexpected call on the Federal Communications Commission on Monday to regulate these companies more like public utilities AT T has been spending heavily on acquisitions and the statement came only days after it cut its capital spending estimate for 2015 The industry and Republican lawmakers have protested Obama s proposal saying stricter Internet traffic regulations would stifle growth and investment We can t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed Stephenson said at an analyst conference In April AT T said it would deploy its high speed fiber network in 100 cities including Chicago Los Angeles and Miami Ensuring access to quality Internet for all Americans has been the FCC s major focus The White House detailed Obama s plan in a blog post on Monday saying that if implemented it shouldn t create any new burden for Internet providers Telecom companies plan to fight Obama s call for utility style regulations in Congress and the courts More than three dozen congressional Republicans wrote to FCC Chairman Tom Wheeler on Wednesday that Obama s proposed changes were beyond the scope of the FCC s authority Comcast Corp O CMCSA now closing a merger deal with Time Warner Cable Inc N TWC that would create the nation s top cable Internet service provider said on Wednesday the net neutrality uncertainty would chill investment in Web infrastructure The regulatory insecurity creates investment insecurity Comcast CEO Brian Roberts told reporters in San Francisco We will spend 20 billion in capital spending if you include Time Warner Cable We want to have open internet rules but don t want to discourage investment AT T whose 48 5 billion bid for DirecTV O DTV is under government review said on Friday it would also pay 1 7 billion to acquire Mexican wireless operator Iusacell It trimmed its 2015 capital spending outlook to 18 billion from 21 billion At the same conference on Wednesday Verizon Communications Inc N VZ CFO Fran Shammo struck a more restrained tone She said the FCC could restrict paid prioritization deals where content companies pay for faster downloads of some websites or applications without pursuing utility style regulations
I think the independent agency of the FCC will make the right decision Shammo added Reporting by Marina Lopes Additional reporting by Alina Selyukh and Christina Farr Editing by Franklin Paul Lisa Von Ahn and Andre Grenon |
XOM | Future of oil takes center stage in Norwegian election | By Gwladys Fouche STAVANGER Norway Reuters The future of Norway s oil sector is emerging as a key issue for voters in a Sept 11 parliamentary election nowhere more so than in the oil capital of Stavanger The right wing bloc of Conservative Prime Minister Erna Solberg is neck and neck in opinion polls with an opposition grouping led by Jonas Gahr Stoere s Labour Should neither secure a majority the smaller Green party which pledges to stop oil exploration and phase out production within 15 years could become kingmakers There is little chance of the Greens being able to call time on Norway s number one industry which all major parties back to the hilt accounts for half of national exports and employs over 180 000 people But they have been gradually gathering support over the past four years and are polling at about 5 percent of the vote underlining changes in Norwegian society and divisions over the future of oil Should they hold the balance of power they could seek to force compromises to trim the oil industry s ambitions with environmentalists in recent months focusing on the need to limit oil companies expansion in the Arctic The Norwegian oil sector is still in recovery mode after thousands of local jobs were lost when crude prices crashed between 2014 and 2016 So the risk of any curbing of its prospects is high in people s minds in Stavanger a windswept west coast city set among fjords If you were to just close down this industry what are we supposed to live off This is a big question for many said Egil Ellingsen 38 a Lutheran pastor who said he had counseled many people in the area who had lost their jobs Ellingsen organized a public debate at his church last weekend with local parliamentary candidates attended by about 800 people The subject of jobs how to create them how people would survive if the oil industry declined surfaced regularly during the debate At one point Ellingsen asked the local Green candidate Can you give me concrete examples of what jobs people could do if oil stops The candidate cited the offshore wind industry and the forestry and fisheries sectors as examples WE NEED CLEAR DIRECTION Such assurances are not assuaging the concerns of workers at Dusavik port outside Stavanger which Total ExxonMobil NYSE XOM and Statoil OL STL use to ship equipment to their platforms in the North Sea On a cloudy morning staff are unloading drilling fluid from the Normand Leader ship just back from the Johan Sverdrup oil and gas field which Norwegian state controlled Statoil and its partners are developing offshore Production at the giant field up to 3 3 billion barrels of oil is due to start in 2019 but it is already keeping the harbor busy After Johan Sverdrup was discovered in 2010 the port s operator NorSea Group invested 220 million crowns 28 53 million in its infrastructure to accommodate increased activity Even as crude prices plunged it kept all its 150 full time employees at Dusavik but let go the 20 30 workers who were on temporary contracts at Dusavik and its sister port in nearby Tananger Rune Veenstra the port s managing director said the election campaign was sending out conflicting signals and creating uncertainty What his company needed more than anything was clarity and predictability so that it can make long term investments he added If we can t have a clear direction it is no good for anyone Veenstra told Reuters ECONOMY ON THE MEND The main parties say they will not give ground to the Greens or any other group seeking to curb Norway s oil sector which is pivotal to a national economy that is turning a corner after a couple of slow years In the first half of 2017 the economy grew more than expected and reached 0 7 percent in the second quarter data from Statistics Norway showed on Aug 24 The current government coalition the centre right Conservatives and the populist Progress Party claim credit for the turnaround Their approach has been to cut taxes on businesses and individuals and plug the gap thanks to Norway s near 1 trillion sovereign wealth fund This is a sign that the economic policy that the government has been running over the last years has been right Health Minister Bent Hoeie a Conservative told Reuters That view is shared among some voters such as 47 year old Finn a former oil worker who says he will vote for the Conservatives When Reuters met him in October 2015 Finn had just been laid off and was looking for work He is now employed by a state agency working for the Norwegian armed forces I am interested in schools and creating workplace opportunities the Conservatives have a better programme he said He declined to give his full name But Labour which was in government in 2005 2013 is emphasizing that even though the economy is on the up there are still challenges to address if the country wants to finance its cradle to grave welfare state in the future We have to make sure that more of those who are outside the job market get an opportunity to have a job in the future Hadia Tajik Labour s deputy leader told Reuters Many Labour supporters told Reuters they would vote for the party because it was best at delivering good public services such as schools and hospitals When Labour was in power the schools the hospitals everything was good Now it is not said Atif Nisar a 39 year old taxi driver My whole family has decided we are all voting Labour
For a graphic on the parliamentary election click |
XOM | Vanguard indicates more social activism ahead in evaluating companies | Vanguard is calling on U S companies to improve their governance and outlines new factors such as climate change and diversity that will take on added importance in its evaluation of companies In an open letter to boards and leaders of publicly traded companies Vanguard Chairman and CEO Bill McNabb says it is incumbent on all market participants investors boards and management alike to embrace the disclosure of sustainability risks that bear on a company s long term value creation prospects According to newly released proxy records Vanguard revealed that for the first time it voted against Exxon Mobil NYSE XOM management earlier this year to require the company to report on climate change the fund company had not previously revealed its vote Vanguard also revealed that it voted against three Wells Fargo NYSE WFC directors earlier this year Vanguard s views will not be ignored In June WSJ reported that Vanguard s passive funds have at least a 5 stake in 468 companies in the S P 500 Now read |
XOM | Exxon plans 200M investment in Argentina s Vaca Muerta | Exxon Mobil NYSE XOM says it plans to invest 200M to boost natural gas production in Argentina s Vaca Muerta shale play
The company also has asked the government of Neuquen province for a 35 year unconventional production concession in the Los Toldos I Sur block
XOM s Argentine subsidiary owns 80 of the Los Toldos I Sur block and is the operator while Argentine oil company Tecpetrol and a provincially owned firm each control 10
Now read |
XOM | Exxon restarting second largest U S refinery | HOUSTON Reuters ExxonMobil Corp N XOM was restarting its Baytown Texas refinery the nation s second largest on Saturday six days after it was shut because of heavy rain from Tropical Storm Harvey The company said it began initial restart of the 560 500 barrel per day bpd Baytown refinery on Friday night Sources familiar with plant operations said the refinery was preparing to resume production but it was unknown when production would resume Exxon spokeswoman Charlotte Huffaker said an initial assessment revealed only minor repairs were needed at Baytown We are making good progress on restart activities Huffaker said Timing on when operations can resume to normal will largely depend on the availability of transportation infrastructure We are working with the Port of Houston to expedite vessels through the Houston Ship Channel and we are coordinating with railroads to help facilitate necessary repairs
The sources said the closure of the upper Houston Ship Channel has not only cut off waterborne crude shipments from coming in but refined products shipment from going out along the waterway to the Gulf of Mexico |
CSCO | Why The Earnings Surprise Streak Could Continue For Cisco CSCO | If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report you should consider Cisco Systems NASDAQ CSCO This company which is in the Zacks Computer Networking industry shows potential for another earnings beat
This seller of routers switches software and services has an established record of topping earnings estimates especially when looking at the previous two reports The company boasts an average surprise for the past two quarters of 2 81
For the last reported quarter Cisco came out with earnings of 0 75 per share versus the Zacks Consensus Estimate of 0 72 per share representing a surprise of 4 17 For the previous quarter the company was expected to post earnings of 0 69 per share and it actually produced earnings of 0 70 per share delivering a surprise of 1 45
Price and EPS Surprise
With this earnings history in mind recent estimates have been moving higher for Cisco In fact the Zacks Earnings ESP Expected Surprise Prediction for the company is positive which is a great sign of an earnings beat especially when you combine this metric with its nice Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Cisco currently has an Earnings ESP of 1 28 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner We expect the company s next earnings report to be released on February 13 2019
When the Earnings ESP comes up negative investors should note that this will reduce the predictive power of the metric But a negative value is not indicative of a stock s earnings miss
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
CSCO | Cisco Systems A Strong Short Level Is Near | Shares of Cisco Systems NASDAQ CSCO are up nearly 20 in the last month The vertical nature of the move has all technical indicators screaming overbought and a pullback is near The exact price comes to us from a gap fill at 47 50 less than 0 50 away Pro traders signal a high reward low risk short at 47 50 The downside target is 43 75 the stop that can be used is a daily close above 49 50 |
CSCO | Cisco second quarter forecast misses on order slowdown | Reuters Network equipment maker Cisco Systems Inc s O CSCO forecast second quarter adjusted profit and revenue growth ranges below analysts estimates citing a slowdown in order growth Shares of Cisco considered a bellwether for the performance of the broader network gear industry fell 3 2 percent at 26 95 in extended trading on Thursday The company forecast adjusted profit in the range of 53 55 cents and revenue between flat and 2 percent growth which translates to 11 94 billion 12 17 billion Analysts were expecting a profit of 56 cents per share on revenue of 12 55 billion according to Thomson Reuters I B E S Our guidance reflects lower than expected order growth in the first quarter driven largely by the uncertainty of the macro environment and currency impacts Chief Executive Officer Chuck Robbins said in the earnings statement Cisco is shifting to high end switches and routers and investing in new products such as data analytics software and cloud based tools for data centers Net income rose 33 percent to 2 43 billion or 48 cents per share in the first quarter ended Oct 24 On an adjusted basis the company earned 59 cents per share above analysts average estimate of 56 cents per share
Revenue rose 3 6 percent to 12 68 billion topping 12 65 billion that analysts had expected |
VZ | Will NFP Contain Dollar s Move | Friday June 3 Five things the markets are talking about
The ECB did nothing OPEC did nothing and ADP signalled another month of acceptable U S job gains
So what s left to look forward to Today it s nonfarm payrolls the granddaddy of fundamental indicators
This key reading could help determine the course for interest rates in the world s largest economy Investors seem hesitant to make any big bets across the board in the run up to this morning s release 08 30 a m EDT
The Fed has been open and transparent in their rhetoric of late They are a tad hawkish to a rate hike but it s all data dependant NFP is the final major release on the U S labor market before the Fed s June 15 meeting
A strong report could encourage Fed officials to raise benchmark interest rates this summer for the first time this year Currently Fed funds futures are pricing a 20 probability for a hike rate in a few weeks
1 What the Fed needs to see in NFP
Investors and dealers continue to search for clues for any re pricing of Fed policy expectations
Dollar bulls require a U S s jobs report to show healthy job additions higher wage growth and a labor participation rate showing some traction
However with the U S consistently ticking the job growth box for the past year the market has naturally shifted its focus to wage growth To date the U S s impressive growth in jobs has generally not translated to meaningfully higher wages Any improvement in pay along with a gradual recovery in the labor participation rate is expected to lead to higher consumption
The U S still needs to move the needle on wages Average hourly earnings need to show a monthly gain of 0 2 and then some Anything on the positive side will have fixed income dealers repricing current yield curves
Then there is labor force participation The U S participation rate continues to hover near its historical lows 62 6 It s healthy to see it edge higher even if it does happen to push the unemployment rate up 4 9
The dollar is trading in a contained range ahead of the release Market consensus is looking for payrolls to have risen by 158k in May note some analysts expect the number to be depressed due to the Verizon NYSE VZ strike
A print there or there about could see some modest dollar strength The event risk is that the data disappoints
2 Dovishness dominated ECB meet
There were no surprises in yesterday s ECB policy decision Draghi and company remains in wait and see mode Their corporate bond buying program and the new round of targeted long term refinancing operations will begin this month
The one surprise to dealers and investors was policy makers keeping their medium term inflation projections unchanged In his press conference Draghi indicated that officials have shifted their focus elsewhere namely to the looming Brexit vote June 23 and the incomplete re pricing of the Fed outlook Both of these event risks will keep markets occupied over the coming weeks and not the ECB
3 OPEC full of hot air
OPEC failed to agree on a new production ceiling at its semi annual meeting in Vienna yesterday
Heading into the summit the Saudi s Kuwait and Qatar supposedly were leaning towards a renewal of an OPEC output ceiling while others such as Iran Venezuela and Algeria were insisting that an output ceiling must be accompanied by a country specific quota system It s not a surprise that self interest won the debate
Crude prices initially came under pressure on the news but have found traction WTI 49 19 Brent 50 09 ever since on the back of the weekly U S crude inventories and production data by the EIA reporting a steady decline in stocks 1 4m barrels drawdown
Mohammed Barkindo from Nigeria was chosen to be OPEC s new secretary general
4 PMI s from China slow
In the overnight session China s Caixin Services and Composite PMI s slid to a new three month low 51 2 vs 51 8 prior but remained in expansion territory
Digging deeper there were reported declines in the new orders component marginal job creation and rising volume of unfinished work
Analysts noted that easing cost pressures in the PMI gauges also do not bode well for upcoming official May inflation figures all of the index categories except output prices showed signs of deterioration This suggests that the Chinese government needs to continue with their policy steps to boost its economy
In Hong Kong May s composite PMI contracted for the fifteenth consecutive month 47 2 vs 45 3 but at a slower pace Output new orders and employment components all fell at softer rates
5 Yen at risk to go higher
Thus far the fallout from PM Abe s decision to postpone his sales tax hike appears to be contained
All three major credit rating agencies have expressed varying amount of caution though only one Moody s was most concerned stating it considers the decision as a credit negative
Overnight Japan May services PMI returned to expansion at 50 4 Growth was supported by a modest increase in new orders for the second consecutive month Even employment remains in growth territory
However Japan s deflationary trend continues A concern for the BoJ was that input prices rose to the weakest rate in over three and a half years
The yen is trading atop of its three week high 108 60 on the sales tax decision Traders are looking at this latest move as a fiscal step that could potentially detract from more aggressive BoJ policy moves in the second half of the year If the BoJ is out of the equation it would suggest that Yen is at risk to go much higher |
VZ | NFP Prints Massive Miss | Employers in May added the fewest number of workers in almost six years reflecting broad cutbacks that may raise concern about U S growth and prompt Federal Reserve policy makers to put off an increase in interest rates
The addition of 38 000 workers the fewest since September 2010 followed a 123 000 advance in April that was smaller than previously estimated a Labor Department report showed Friday The increase in May was less than the most pessimistic forecast in a Bloomberg survey The jobless rate dropped to 4 7 percent the lowest since November 2007 as Americans left the labor force
Smaller employment gains reduce the odds of a more pronounced upturn in household spending and economic growth after a poor start to the year Fed officials will take into account more judicious hiring at a time when corporate profits are on a downswing and global markets remain weak as they consider whether to raise interest rates again
It will put a dent in optimism about the second quarter rebound Thomas Costerg senior economist at Standard Chartered LON STAN Bank in New York said before the report A lot of hopes are hanging on the labor market If job growth softens it ll be a signal that the U S economy is a bit more fragile than we think There are a lot of question markets about the second half
The median forecast in a Bloomberg survey of economists called for a 160 000 gain in May employment Estimates of 90 economists in ranged from job gains of 90 000 to 215 000 after an initially reported 160 000 increase in April Revisions to prior reports subtracted a total of 59 000 jobs from payrolls in the previous two months
The report showed a broad hiring slowdown including declines in payrolls in construction manufacturing and mining Job growth at private service producers slowed with employment climbing by just 61 000 That brought the diffusion index which measures the breadth of hiring to 51 3 in May the lowest since February 2010
Furthermore Americans who are working part time though would rather have a full time position or the measure known as part time for economic reasons climbed to 6 4 million in May the highest since August from 6 million a month earlier
The unemployment rate which is derived from a separate Labor Department survey of households was projected to drop to 4 9 percent matching the lowest level since 2008 from 5 percent according to the survey median
Hourly Pay
A bright spot in the report was worker pay Average hourly earnings rose by 0 2 percent in May after a 0 4 percent gain in April that was a bit stronger than initially reported Worker pay increased 2 5 percent over the 12 months ended in May
The report showed weakness in sectors vulnerable to slow overseas markets and the cutbacks in energy investment along with hiring slowdowns in services Factories cut employment for the third time in the last four months while construction companies shed 15 000 jobs
The payrolls figure also reflected a work stoppage at Verizon Communications NYSE VZ that Labor Department data showed involved some 35 100 workers the most in four years Those workers were idle for the entire payroll survey pay period which includes the 12th of the month
Landline workers at Verizon began protesting in April as the company sought to increase workers contributions for health benefits and greater flexibility in temporary job relocations
Friday s report showed employment in the information sector dropped by 34 000 Fed policy makers who are considering when to next raise interest rates after lifting them in December for the first time in almost a decade have said they expect continued improvement in the job market |
VZ | Dollar Tanks On Epic Jobs Miss | By Kathy Lien Managing Director of FX Strategy for BK Asset Management
Friday s extraordinarily weak nonfarm payrolls report sent the U S dollar tumbling against all of the major currencies We haven t seen a move this strong in 2 months for EUR USD and it s been more than a month for USD JPY The 2 year Treasury yield dropped by the largest amount since March 2009 and Fed Fund futures are now only pricing in a 29 chance of tightening in July down from more than 50 pre NFP A mere 38K jobs were created in May the weakest since September 2010 and while the data is distorted by the Verizon NYSE VZ strike even if you add back the 35K jobs lost the number was still terrible The unemployment rate hit its lowest level since 2007 but the improvement was driven by a drop in the participation rate Average hourly earnings growth eased to 0 2 from 0 3 The softness of Friday s report caused the market to downgrade its expectations for a summer rate hike and the question now is how that affects Janet Yellen s thinking She was unabashedly hawkish last month when she said a rate hike might be appropriate in the coming months If she repeats that view and she could due to the consistency of comments from U S policymakers and their overall view that the labor market is doing well the dollar will rebound But don t expect the greenback to recapture all of Friday s moves Significant technical damage was done and the weakness of Friday s report will have investors eyeing every positive comment from Yellen with skepticism In addition to the soft labor data service sector activity also slowed There are very few pieces of market moving U S economic reports on next week s calendar but even if there were Yellen is the one to watch as her comments frequently sets the tone for trading which is now truer than ever
Euro Soars on NFPs ECB in Wait and See Mode
After consolidating for more than a week the soft nonfarm payrolls report drove the EUR USD out of its 1 0950 to 1 1250 trading range However for the Eurozone the ECB monetary policy meeting was the main focus and investors were unimpressed by the Mario Draghi who had nothing new to say on monetary policy The central bank increased its growth and inflation outlook but Draghi spent a greater portion of his press conference emphasizing ECB s willingness to increase stimulus if financial conditions tighten significantly Like the Fed the ECB is waiting for the results of the U K referendum before deciding what steps to take next The bank is comfortable with the current level of monetary policy and expects corporate bond purchases set to start on June 8 and TLTRO which begins June 22 to provide additional support for the economy Looking ahead Mario Draghi will be speaking again on Thursday revisions to Eurozone GDP is scheduled for release and from Germany we have factory orders industrial production and the trade balance Considering that we just heard from the ECB head none of these event risks is likely to be big market movers for the euro
GBP Brexit Trumps All
For the past few months sterling completely shrugged off economic data The currency soared in May despite weaker PMI numbers and this month it plunged even though manufacturing and service sector activity beat expectations to rise at a faster pace And the reason is simple Brexit trumps all The performance of the British pound has been driven entirely by Brexit polls and the same is expected in the coming week with only industrial production and the trade balance scheduled for release The U K referendum is only 3 weeks away which means investors will be laser focused on Brexit polls To this day the polls are close with some reporting more Britons in favor of remaining in the European Union while others seem to favor an exit Leaving the EU poses a significant risk for the financial markets and could mean a period of deep economic uncertainty that will hurt consumer business and investor confidence ultimately translating into weaker headline growth Some even argue that it could drive the U K into recession There could be significant costs for trade investment and jobs if the U K fails to strike a trade deal with the EU and U S The stakes are high and that s why every time a politician warns about the consequences of Brexit sterling rises as investors view it as another reason for the British to remain in the Union Keep an eye on the polls because they will dictate how sterling trades on a day to day basis next week
USD CAD Tanks But Oil Remains Weak
When it comes to the Canadian dollar there s nothing more important than oil For the past week oil prices struggled to break above 50 a barrel and that resistance translated into steady gains for USD CAD However Friday s soft U S labor market report and stronger Canadian trade data took USD CAD back to the bottom of its range OPEC s decision to leave production levels unchanged put a cap on oil prices and even with the decline in Friday s dollar crude failed to rise However with USD CAD s decline stopping right at the 50 day SMA we are now looking for a bounce back to 1 3000 USD CAD will remain in focus next week with Canada s IVEY PMI and employment report scheduled for release These are tier one economic releases that tend to have a significant impact on the currency and will help determine whether USD CAD clears 1 3000 or breaks 1 29
AUD Soars Above 200 day SMA
Both the Australian and New Zealand dollars ended the week sharply higher against the greenback While NZD showed steady performance all of AUD s gains came on Friday after the abysmal nonfarm payrolls report This week s Australian economic reports were mixed with the PMI services index rising while the manufacturing index fell GDP growth was very strong in Q1 but consumer spending growth is slowing These mixed reports will give the Reserve Bank strong reasons to leave monetary policy unchanged next week However the minutes from the last RBA meeting indicated that the decision was a close one so the tone of the RBA statement could be slightly less dovish The outperformance of the New Zealand dollar can be credited to the uptick in dairy prices but dovish comments from RBNZ Governor Wheeler in the coming week could strip the pair of its gains When the RBNZ met last month it maintained a dovish bias saying that further policy easing may be required and that a lower New Zealand dollar is desirable Since then there has been very little reason for their views to change China s trade balance is also scheduled for release and the outcome of the report will affect all 3 commodity currencies |
VZ | CCI A High Yield REIT Paying Safe Growing Dividends | Crown Castle NYSE CCI only began paying dividends in 2014 but the company currently offers income investors a high dividend yield near 4 with 6 7 annual dividend growth potential
Crown Castle also has an attractive business model with substantial recurring revenue excellent free cash flow generation and extremely high incremental margins
Let s take a closer look at Crown Castle s business for consideration in our Top 20 Dividend Stocks portfolio Business OverviewCrown Castle began operating as a real estate investment trust REIT in 2014 and is the largest provider of shared wireless infrastructure in the country
Crown Castle owns approximately 40 000 towers and 16 500 miles of fiber supporting small cell networks
The company leases its towers out to wireless carriers which need Crown Castle s infrastructure to provide wireless services to consumers and businesses
Tenants deploy communications equipment coaxial cables and antennas at the top of Crown Castle s towers that transmit signals between the tower and mobile devices Most towers have capacity for at least four tenants
The big four wireless carriers account for 90 of Crown Castle s revenue and the company is completely focused on the U S wireless market where over 70 of its towers are located in the top 100 largest markets
Over 80 of the company s revenue is recurring and most of its site rental revenue results from long term leases with initial 10 year terms and five year renewal periods thereafter Business AnalysisDespite its customer concentration Crown Castle s business model is attractive for a number of reasons beginning with its predictability
The company has an average remaining customer contract term of six years and approximately 20 billion remaining in contracted lease payments compared to 3 billion in 2015 site rental revenue providing excellent cash flow visibility
Crown Castle s leases also have built in price escalators which are expected to continue adding around 3 to the company s annual earnings growth
In addition to annual rent escalators tower economics are also attractive because very little cost is involved to add additional tenants
A recent investor presentation by Crown Castle highlighted that the company enjoys a 96 incremental margin when it adds an additional tenant to one of its existing towers
In other words if a new tenant brings in 25 000 of additional rental revenue Crown Castle keeps 24 000 in gross profits The operating leverage in this business is tremendous and substantially all of Crown Castle s wireless infrastructure can accommodate additional tenancy
As data growth continues accelerating it seems reasonable that demand for Crown Castle s wireless infrastructure will also rise over time
Carriers have no substitutes for wireless infrastructure which is mission critical for their businesses to operate
Additionally by collocating on shared wireless infrastructure wireless carriers only have to pay for their proportional usage of the infrastructure
Instead of needing to occupy an entire company owned tower themselves carriers can rent only the space they need to enhance their network coverage and continue servicing their customers
As a result of these factors tenant leases have historically enjoyed a high renewal rate Non renewals have averaged just 2 of site renewal revenues over the last five years
Many of Crown Castle s towers are also located in areas with strict zoning restrictions and other regulations limiting supply and making its infrastructure harder to replicate by new entrants
Crown Castle s cost structure is also fairly stable because the company maintains long term control over the majority of land under its towers
About one third of Crown Castle s site rental gross margin is generated from towers on land the company owns and its current portfolio of ground leases have an average remaining term of about 31 years
Importantly over 75 of its site rental gross margin is from towers where the land is owned or controlled by company for at least 20 years There is little risk of Crown Castle losing control of its real estate assets
As a result of continuously growing demand for data and a portfolio of mission critical wireless infrastructure Crown Castle has delivered extremely reliable growth throughout numerous market cycles In fact the company s rental revenue and gross income has increased every year since 2002
The company also maintains an investment grade credit rating which allows it to continue accessing capital on favorable terms to invest opportunistically in growth projects
Overall Crown Castle has a fundamentally strong business that seems to have a solid outlook for at least the next five years The company possesses a number of the factors I look for to find safer stocks
Crown Castle s Key RisksThe biggest risks facing Crown Castle are customer concentration and evolving technological trends
AT T NYSE T 30 of rental revenue T Mobile NASDAQ TMUS 22 Sprint NYSE S 19 and Verizon NYSE VZ 18 account for about 90 of the company s total revenue
The U S wireless market is an oligopoly so there s really not much Crown Castle can do to diversify its customer base
While the U S wireless market is relatively stable Sprint faces financial difficulties and has been slashing spending to begin working down its substantial debt load The company has lost money for seven straight years and is struggling as the smallest major carrier
Will Sprint s struggles impact Crown Castle It s hard to say The company is likely too large to be acquired by one of the other major carriers due to anti trust concerns and it s difficult to know if it would benefit from cutting back its business with Crown Castle a lower quality network with less coverage isn t exactly a winning strategy Regardless Sprint s situation is certainly worth monitoring because the company faces legitimate financial challenges
It goes without saying that the loss of any of Crown Castle s major customers would be devastating However I think this risk has a very low probability
Non renewals are usually the result of mergers between carriers because they can consolidate their wireless infrastructure needs Recent examples include AT T T Mobile and Sprint acquiring Leap Wireless MetroPCS and Clearwire respectively
For now Crown Castle is the largest wireless infrastructure player in the market and has long standing relationships with the major carriers It s hard to imagine any of them being able to operate a network without the use of Crown Castle s products and services which likely explains the excellent 2 non renewal rate the company has historically enjoyed
Besides customer concentration risk Crown Castle could be impacted by changes in wireless deployment technology
If wireless networks become more efficient e g network sharing or experience a substantial change in design demand for Crown Castle s wireless infrastructure could decline
Other technologies such as WiFi small cells satellites and mesh transmission systems could eventually serve as substitutes for the company s wireless infrastructure as well
None of these potential evolutions can happen overnight but they could potentially jeopardize Crown Castle s earnings 5 10 years from now no one knows
The company s industry is also heavily regulated by the FCC FAA and local ordinances They control the siting of towers and oversee tower and antenna structures amongst other issues It seems unlikely that a new regulation would crop up and harm Crown Castle s business but the company does face some regulatory risk
Finally near term demand can be impacted by trends in capital spending by the major carriers If they decide to pullback on plans to expand their coverage or capacity Crown Castle could temporarily see reduced demand for its wireless infrastructure This risk factor doesn t impact the company s long term outlook but it could potentially cause near term volatility
Overall there are a few risks that could jeopardize the company s very long term future However the near to mid term outlook looks good Technology changes are likely to happen at a moderate pace and it s hard to imagine any of Crown Castle s major customers no longer needing its services anytime soon Dividend Analysis Crown CastleWe analyze 25 years of dividend data and 10 years of fundamental data to understand the safety and growth prospects of a dividend Dividend Safety ScoreOur Safety Score answers the question Is the current dividend payment safe We look at factors such as current and historical EPS and FCF payout ratios debt levels free cash flow generation industry cyclicality ROIC trends and more Scores of 50 are average 75 or higher is very good and 25 or lower is considered weak
Crown Castle s Dividend Safety Score of 62 suggests that the company s current dividend payment is pretty safe
The dividend payout ratio is one of the most important financial ratios for dividend investing because it shows how much of a company s earnings are being consumed to pay the dividend
Net income is most commonly used to compute a company s payout ratio but REITs face several complications
REITs own a lot of property so they record substantial non cash depreciation charges every year which reduces their reported net income However the value of real estate usually rises over time creating a mismatch between accounting and reality
For this reason and others real estate businesses use a supplemental measure called adjusted funds from operation AFFO instead of net income to provide a better sense of their real dividend payout ratios
AFFO measures cash flow by removing the non cash impact of real estate depreciation along with several other items to give a more accurate look at a company s operating performance
For fiscal year 2016 Crown Castle expects AFFO per share of 4 70 With annual dividend payouts of 3 54 per share the company s forward looking payout ratio stands at 75
I generally prefer to invest in companies with a lower payout ratio but will make exceptions for businesses with extremely steady cash flows
Crown Castle seems to fit this profile The company generates consistent cash flow thanks to its long term leases mission critical services large base of recurring revenue and high renewal rate
As long as the company continues to retain its tenants and continue collecting monthly rent payments the relatively high payout ratio shouldn t be an issue
Another one of the most important factors impacting dividend safety is a company s performance during the last recession As seen below Crown Castle s revenue continued growing at a double digit clip throughout the downturn Source Simply Safe Dividends
Economic weakness did not significantly impact Crown Castle s recurring revenue and demand for wireless services continued to grow Site rental revenues increased at a mid single digit clip throughout the downturn underscoring its resiliency
Despite stable fundamentals Crown Castle s stock plunged by nearly 60 in 2008 significantly underperforming the S P 500
In 2008 the company had around 240 million in cash on hand compared to total book debt in excess of 6 billion As credit markets froze up many highly leveraged companies such as Crown Castle were smoked
A similar situation seems unlikely in today s age of rock bottom interest rates and easy money but the company s history is worth being aware of
Besides stable business results across many different economic environments Crown Castle s excellent free cash flow generation boosts its Dividend Safety Score
As seen below Crown Castle has generated positive growing free cash flow over the last decade Most of the company s costs are fixed which allows it to generate high incremental cash flows when it adds new tenants to existing towers
Maintaining its wireless infrastructure is also relatively inexpensive The company estimates that sustaining capital expenditures are typically just 2 3 of net revenues If another downturn were to happen Crown Castle could easily ramp up free cash flow by cutting out discretionary spending Source Simply Safe Dividends
As I mentioned earlier Crown Castle does maintain a high debt load Debt can be good or bad depending on the type of business e g cyclical versus stable and the amount of leverage used
Since Crown Castle generates extremely stable free cash flow and owns a good portion of its land and properties it can reasonably afford to maintain more debt than the average firm
The figure below shows that Crown Castle currently holds 305 million in cash compared to a debt load of nearly 12 billion
The company is committed to improving its balance sheet and maintains an investment grade credit rating from the major agencies It also has around 2 billion available to use from its credit revolver alleviating some of my leverage concerns Source Simply Safe Dividends
Overall Crown Castle s dividend payment looks safe The company s payout ratio is reasonable its free cash flow generation is excellent and the services provided by Crown Castle are at least somewhat recession resistant The balance sheet could be in better shape but the company s reliable cash generation reduces some of this risk Dividend Growth ScoreOur Growth Score answers the question How fast is the dividend likely to grow It considers many of the same fundamental factors as the Safety Score but places more weight on growth centric metrics like sales and earnings growth and payout ratios Scores of 50 are average 75 or higher is very good and 25 or lower is considered weak
Crown Castle s Dividend Growth Score of 50 suggests that the company s dividend growth potential is average
The company began paying a dividend in early 2014 and raised its quarterly payout from 35 cents per share to 82 cents at the end of 2014
Most recently management increased Crown Castle s dividend by 8 5 at the end of 2015 raising it from 82 cents per share to 89 cents Source Simply Safe Dividends
The company targets 6 7 long term annual growth in dividends per share going forward which is similar to the S P 500 s historical dividend growth rate
Since REITs are required to pay out at least 90 of their taxable income as a dividend and are often capital intensive businesses their dividend growth rates are usually low but consistent
Crown Castle scores better for Dividend Growth than many other REITs because much of its future growth requires little capital e g adding additional tenants to existing towers annual price escalators
The company s reasonable AFFO payout ratio 75 is also supportive of decent dividend growth especially considering the low amount of sustaining capital expenditures required by the business i e if Crown Castle cut back on growth investments its AFFO payout ratio would drop and provide even more room for dividend increases
While the company is too young to be considered a blue chip dividend stock it s dividend growth profile over the next few years looks healthy ValuationCrown Castle s stock trades at 19 7 times forward AFFO per share guidance and offers a dividend yield of 3 8
If AFFO per share grows at management s targeted rate of 6 7 per year the stock appears to offer annual total return potential of 10 11
The stock s current valuation seems reasonable considering the company s stability but I d prefer to own the stock at a somewhat lower cash flow multiple for a greater margin of safety
ConclusionThe investment case for Crown Castle over the next five years is very interesting
As demand for data and wireless connectivity continues to grow Crown Castle s wireless infrastructure should become even more valuable
The company has room to add more tenants to its existing towers at very high incremental margins and will continue to enjoy annual price increases across its portfolio of leases
These two factors should help earnings and dividends continue to grow at a mid single digit clip
Crown Castle looks like an interesting business for dividend growth investors to keep an eye on especially if the stock sees a pullback |
VZ | S P 500 Snapshot A Modest Decline After A Weak Employment Report | US equity markets took a hit today following the big miss on May new jobs more The S P 500 plunged at the open to its 0 95 intraday low in the first hour of trading The index then recovered in a couple of waves to its 0 06 afternoon high Some selling in the final minutes led to a 0 29 closing loss The weak jobs report was likely the result of some isolated circumstances most notably the Verizon NYSE VZ strike Trading volume on today s mini drama was unremarkable Week over week the index price was unchanged
Treasurys were more impacted by this morning s jobs report than equities 10 year note closed at 1 71 down ten basis points from the previous close
Here is a snapshot of past five sessions in the S P 500
Volume was light on today s decline
A Perspective on Drawdowns
Here s a snapshot of selloffs since the 2009 trough
Here is a more conventional log scale chart with drawdowns highlighted
Here is a linear scale version of the same chart with the 50 and 200 day moving averages
A Perspective on Volatility
For a sense of the correlation between the closing price and intraday volatility the chart below overlays the S P 500 since 2007 with the intraday price range We ve also included a 20 day moving average to help identify trends in volatility |
VZ | 38 000 Not A Typo | DOW 31 17 807SPX 6 2099NAS 28 495210 Y 11 1 70 OIL 39 48 76GOLD 33 10 1244 50
The US economy added 38 000 jobs in May which is not a typo it is the fewest jobs added in more than 5 years just 38 000 The unemployment rate fell three tenths of a percentage point to 4 7 percent in May again not a typo the lowest since November 2007
The unemployment rate went down for the wrong reason not because people were finding jobs but because 458 000 people dropped out of the labor force Most forecasts were calling for 150 000 to 180 000 new jobs so this was a big miss
The government revised down the number of new jobs created in April to 123 000 from 160 000 March s gain was lowered to 186 000 from 208 000 or a downward revision of 59 000 Over the past 3 months job gains have averaged 116 000 per month The drop off in 2016 is the sharpest of the seven year old recovery
Most industries eliminated jobs last month the first time that s happened in several years but there may be some noise in the statistics 35 000 striking Verizon NYSE VZ workers were counted as unemployed but the jobs report was still the weakest in at least two and a half years even if there were no ill effects from the strike
Now it seems a bit strange that the unemployment rate dropped from 5 to 4 7 even as the economy added just 38 000 jobs Part of this is that fewer people were in the labor pool The number of Americans not in the labor force surged to a record 94 7 million an increase of 664 000 The labor force participation rate or the share of working age Americans who are employed or at least looking for a job fell 0 2 percentage point to 62 6 percent
The participation rate has fallen since the recession but economists don t agree on why Some suggest that demographic shifts mainly the retiring baby boomers is the main cause Others think it s more cyclical factors or changes in the economy in other words people can t find jobs and they give up
That 4 7 unemployment rate is the headline number also known as the U 3 unemployment rate U 3 is defined as the total unemployed as a percent of the civilian labor force but doesn t include a number of employment situations A broader figure is the U 6 rate
The U 6 rate remained unchanged at 9 7 percent in May The U 6 rate is defined as all unemployed as well as persons marginally attached to the labor force plus total employed part time for economic reasons as a percent of the labor force That means the unemployed the underemployed and the discouraged
Involuntary part time workers that is those who would opt for full time jobs were they available rose by 468 000 to 6 4 million Jobs were skewed toward part time which added 139 000 positions Full time lost 59 000 jobs While the U 6 rate has made substantial gains in the past years it remains stubbornly at pre recession levels
Average hourly wages climbed 0 2 last month to 25 59 Hourly pay rose 2 5 from May 2015 to May 2016 just a hair below the post recession high The average workweek for all employees on private non farm payrolls was unchanged at 34 4 hours in May
In another bad sign temp employment fell by 21 000 and it s down 64 000 so far this year Health care added 46 000 positions Leisure and hospitality added 11 000 Government gained 13 000 Professional services up 10 000 Financial activities up 8 000
However mining which includes jobs in the oil patch lost 10 000 jobs information related jobs fell by 34 000 the consequence of the recently resolved Verizon strike while manufacturing lost 18 000 Construction lost 15 000 jobs
Treasury prices jumped higher this morning pushing yields lower following the release of May s official jobs report Spot gold jumped almost 3 The dollar dropped more than 1 5 against the euro and the yen Financial shares were hit higher interest rates allow banks to earn larger spreads on the deposits they ve collected While the Fed s efforts to reduce rates stabilized asset prices and helped lenders access cheap debt in the wake of the credit crisis prolonged low rates have crimped banks margins
The surprisingly weak jobs report pulled the rug from under a June Fed rate hike Traders who use fed funds futures contracts now see only a 4 chance of a rate hike at the FOMC meeting in June according to CME FedWatch The odds of a rate hike in July have fallen to 36 from 42 prior to the job report For September the odds of a hike are 51 Add in a UK referendum on a possible Brexit from the EU scheduled for one week after the June FOMC meeting
When we look at 38 000 jobs and realize it is not a typo we then need to look at why we saw such a dramatic drop One explanation is that it is statistical noise The Verizon strike skewed things a bit The jobs report is notoriously imprecise by some estimates there is a margin of error of about 100 000 jobs give or take in any month It isn t easy to track all the job changes in the country There will be revisions Blah blah the economy only added 38 000 jobs That s the number for now
Some claim the recovery is getting long in the tooth The economy has added jobs for 75 consecutive months The economy cannot continue to create jobs more rapidly than the labor force is growing But it certainly doesn t feel like we ve reached a tight labor market There seems to be an overabundance of slack as evidenced by part time jobs and weak wage growth
Another theory is that we might be seeing early indicators that productivity is increasing Productivity has been very low over the past five years If productivity goes back to near normal the jobs numbers are going to deteriorate quite a lot because it takes fewer workers to do the job
The problem with this argument is that we haven t seen any uptick in productivity The Conference Board estimates domestic productivity ticked up an average of only 0 34 percent per year between 2011 and 2015 That s well shy of the 1 93 percent average maintained between 1990 and 2010 And that recent productivity growth also falls short of several other major world economies
So what happened to productivity Well one of the things is that following the Great Downturn residential mobility evaporated homeowners with negative equity were unable to sell and move We have a long history of packing up and moving to new places and new jobs and historically this mobility has provided the economy with a critical dose of oomph or the technical term stimulus
A slide in job turnover and relocation rates is undermining the economy s dynamism damping productivity and wages while making it more difficult for sidelined workers to find their way back into the labor force Staying put can mean that workers are not moving to jobs where they would be more productive
At the same time many are forgoing the raises and ascents on the career ladder that often come with a job switch Fewer openings can also have a ripple effect shrinking the bargaining power of workers in general making it tougher to ask for a bump up in pay Mobility normally drops during downturns and that was the case during the Great Recession Millions of jobs vanished and those fortunate enough to be working were less inclined to give up the one they had
Another factor is that business investment has dried up Many businesses saw Zero Interest Rate Policy as an excuse for stock buybacks incurring low priced to repurchase equity Stock buybacks are a vehicle for returning excess cash to shareholders without the commitment usually associated with a dividend also a handy vehicle for executive compensation According to analysis from Barclays LON BARC these repurchases which are a primary source of demand for equities have contributed to the increase in the S P 500 2010 Almost 60 of the 3 297 publicly traded non financial U S companies have bought back their shares since 2010 according to a report from Reuters
Unfortunately this strategy undermines the companies that use it Debt producing buybacks mean money is not being reinvested in the company for innovation and improving productivity And among the approximately 1 000 firms that buy back shares and report R D spending the proportion of net income spent on innovation has averaged less than 50 percent since 2009 increasing to 56 percent only in the most recent year as net income fell It had been over 60 percent during the 1990s
If U S companies continue to dole out their cash to investors economic investment will go where it can be used well If a company in Germany India or Brazil has something to do with the money it will flow there as it should and create growth and activity there not in the United States
And if the money isn t being reinvested in R D it certainly isn t going into training employees or providing them tools to be more productive The productivity in the US is down not because US workers suddenly got lazy but because companies aren t giving workers the tools to be productive opting instead to financialize value over the short term
Share repurchases have helped the stock market climb to records from the depths of the financial crisis As a result shareholders and corporate executives whose pay is linked to share prices are feeling a lot wealthier That wealth some economists argue has come at the expense of workers by cutting into the capital spending that supports long term growth and jobs |
VZ | Mixed Data Week Leaves Market Mostly Neutral | Markets It was a mixed data week that left the market mostly neutral with the exception of small caps which led again with a 1 20 gain Housing numbers were strong Consumer Spending was the best in 7 years and Mfg rose for the 3rd straight month However a very weak Non Farm Payrolls report Friday ended the week on a down day
Dividend Stocks Update These high dividend stocks go ex dividend this coming week Greenhill Co Inc NYSE GHL Global Net Lease NYSE GNL New Senior Investment Group NYSE SNR Triangle Capital Corporation NYSE TCAP Fidus Investment Corp NASDAQ FDUS Garrison Capital Inc NASDAQ GARS Hudson Global Inc NASDAQ HSON
Volatility The VIX fell 4 2 this week finishing at 14 75
Currency The dollar fell vs most major currencies except the pound as a June Fed rate hike seemed more unlikely in the face of Friday s jobs report
Market Breadth 17 of the Dow 30 stocks rose this week vs 29 last week 67 of the S P 500 rose this week vs 92 last week
US Economic News Housing prices were strong in all areas especially in the West and Northwest Consumer Spending had its biggest 1 month rise in 7 years in April Non Farm Payrolls fell to only 38K jobs created in May with the previous month also cut by 37K to 123K The Unemployment Rate fell to 4 7 its lowest point in 8 years but the drop was mainly due to 458 000 people dropping out of the labor force More than half of those who dropped out were people over 55 years old The May employment numbers were also hurt by a Verizon NYSE VZ strike which accounted for an approx 35 000 worker decline
However before we hit the panic button let s remember that job growth tends to slow down as an economy reaches full employment which is virtually where we are now in the US
CCN reports that Back in 2009 the unemployment rate hit 10 Now it s down to 4 7 the lowest rate since 2007 Yes it recently dropped in May because more Americans dropped out of the job market But much of the decline in the unemployment rate since 2009 is for good reasons The economy has added 13 6 million jobs since October 2009 when the unemployment rate hit double digits
Now we re at a moment when the unemployment rate can t go much lower Typically job growth tends to slow down and wage growth tends to go up as the economy gets closer to full employment Plus other recent indicators show improvement Jobless claims have been below 300 000 for 65 straight weeks That s the longest streak since 1973 And the ADP payroll number which shows private sector hiring for May was much higher at 173 000 jobs The May report is already drawing skepticism from some market observers
Source CNN online
PCE Prices one of the Fed s favorite inflation barometers rose 0 2 in line with expectations and didn t fan any inflationary fears The Fed is targeting a 2 inflation rate
Week Ahead Highlights Fed chief Yellen speaks on Monday afternoon and is sure to get peppered with questions about her take on the jobs report Since a June rate hike seems to be off of the table now it s on to July for the next possibility of a hike Investors will be parsing new data out in coming weeks to see if this weak May report is an anomaly or not
Sectors and Futures Even though small caps led this week it was still a defensive week sector wise with Utilities and Healthcare leading as Financials trailed Oddly Telecoms also lagged The Dividend heavy sectors are leading year to date Utilities Energy Basic Materials Telecoms and Consumer Staples
Natural Gas led this week with oats trailing |
VZ | Verizon open to divesting cell tower assets CFO | WASHINGTON Reuters Verizon Communications Inc is open to divesting its network s assets including its cell towers the company s chief financial officer said on Wednesday
Verizon which in February completed a 130 billion deal to buy Vodafone s stake in Verizon Wireless and get full ownership over the company has previously announced plans to trim some aspects of its portfolio
CFO Fran Shammo said the company was inspired by rival AT T s 4 85 billion sale of some of its towers to tower operator Crown Castle last year a deal which preserved AT T s right to lease and operate the towers for about 28 years
The AT T deal was a good deal for them It opened our eyes and we said OK maybe there is a way to get through this and protect our interest and get a deal that is palatable to us Shammo told investors at a conference in Los Angeles adding that Verizon wants to protect its ability to expand its network when necessary
Shammo also said the company s multicast technology which allows mass audiences to stream content from multiple devices without crowding Verizon s network will be available in most devices the company launches in the fourth quarter
Verizon is negotiating deals with content providers to create a web based TV service delivered to mobile platforms outside of a linear TV subscription
However Shammo predicts it will be a few years before the multicast technology translates into greater leverage for negotiations with content providers
It will take a year or two before we have a meaningful number of subscribers where content providers say I can get my hands around this you now have a meaningful base of subscribers he said
The company will also have better leverage once Nielsen Holdings which measures television audiences is able to measure mobile audiences he said Nielsen is expected to launch that service in the fourth quarter
Reporting by Marina Lopes Editing by James Dalgleish and Andrew Hay |
VZ | France s Iliad plans to bid for bigger T Mobile stake Bloomberg | Reuters French low cost telecom operator Iliad SA PA ILD is gearing up to bid for a significantly larger stake in T Mobile US Inc N TMUS than it previously sought for in July a Bloomberg report said citing people familiar with the matter
Iliad which had initially proposed buying a 56 6 percent stake in Deutsche Telekom AG s DE DTEGn U S unit is still prepared to offer about 33 for each T Mobile share the Bloomberg report said on Thursday
Executives at Deutsche Telekom which owns 66 percent of the fourth largest U S carrier feel that a minimum of 35 per share would be a fairer price for T Mobile the report cited two people as saying
Sprint Corp N S which in August dropped its bid to acquire T Mobile had agreed to pay 40 per share under the broad terms of an agreement worked out with Deutsche Telekom
Iliad has set a mid October deadline to decide whether to improve its bid or walk away sources had told Reuters earlier in September
Deutsche Telekom which makes about a third of its sales and a fifth of core profits in the United States has tried to sell T Mobile twice since late 2011 because it sees it as too small to compete with market leaders Verizon Communications Inc N VZ and AT T N T
Iliad s spokeswoman declined to comment T Mobile and Deutsche Telekom could not be reached immediately for comment
T Mobile s shares closed up 2 5 percent at 28 80 on the New York Stock Exchange
Reporting by Anya George Tharakan in Bangalore and Maya Nikolaeva in Paris Editing by Sriraj Kalluvila |
VZ | AT T to pay 105 million to settle charges it crammed phone bills | By Diane Bartz and Alina Selyukh WASHINGTON Reuters AT T Inc N T will pay 105 million to settle allegations that it put unauthorized charges on customers cell phone bills a practice known as cramming federal regulators said on Wednesday The settlement comes after years of complaints from cell phone owners about being charged for services like daily horoscopes or trivia that they never requested It was negotiated by the Federal Trade Commission the Federal Communications Commission and all state attorneys general AT T will pay 80 million to refund customers while 20 million is earmarked for penalties and fees to all 50 U S states and Washington said the FTC The FCC also fined the company 5 million The FTC alleged that for companies whose billing was handled by AT T as many as 40 percent of subscribers complained about the charges What s shocking to me as I thought about this particular settlement is that we re talking about reputable companies like AT T and others This isn t you know Phil s Phone Shack that s doing this said Maryland Attorney General Doug Gansler Prodded by state attorneys general AT T T Mobile US N TMUS Verizon N VZ and Sprint N S agreed in November to stop billing customers for such third party services FCC Chairman Tom Wheeler estimated that 20 million consumers a year are crammed and said other wireless providers were under scrutiny Stay tuned said Wheeler hinting of potential actions against other carriers AT T said it had rigorous protections against unauthorized billing but it eventually scrapped what it called premium short messaging services or PSMS We reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third parties that the customers did not authorize This settlement gives our customers who believe they were wrongfully billed for PSMS the ability to get a refund an AT T spokesman said in an emailed statement FTC Chairwoman Edith Ramirez said consumers were often hit with 9 99 charges lumped together into AT T monthly subscriptions on their bills When customers protested Ramirez said Instead of acting to stop the charges AT T continued to make hundreds of millions of dollars from the practice by taking at least 35 percent of every charge and refused to provide refunds to many consumers The FTC has also moved against the smaller companies which originate the charges The FCC and the Justice Department are reviewing AT T s proposal to buy DirecTV N DTV for 48 5 billion In July the FTC filed a complaint against T Mobile USA accusing the wireless provider of cramming The commission asked the court to order T Mobile US the fourth largest U S mobile phone provider by number of customers to stop mobile cramming provide refunds and give up revenues from the practice The FCC is also investigating T Mobile US for cramming
AT T shares were up 0 3 percent in afternoon trade Editing by Ros Krasny Susan Heavey David Gregorio and Bernard Orr |
XOM | Reports Beaumont Motiva refineries may start shutdowns tomorrow | Exxon Mobil NYSE XOM may begin shutting units as early as tomorrow at its 362K bbl day Beaumont Tex refinery due to high water in the plant from Tropical Storm Harvey Reuters reports
Also Motiva Enterprises reportedly will make a final decision tomorrow morning on whether to shut its 603K bbl day Port Arthur Tex refinery the largest in the U S Motiva continued to operate today but high water and problems obtaining needed production supplies are said to be inhibiting operations
Now read |
XOM | Report Exxon completely shutting Beaumont refinery | Exxon Mobil XOM 0 4 reportedly has shut all units at its 362K bbl day refinery in Beaumont Tex due to high water in the plant that likely will get worse as Harvey s path now looks set for the area east of Houston Motiva Enterprises reportedly will make a final decision today on whether to shut the largest U S crude oil refinery which also has taken on rising water levels at Port Arthur Just up the coast from Houston the four refineries in the Beaumont and Port Arthur area are home to 8 5 of total U S refining capacity Now read |
XOM | Gasoline jumps 4 percent oil mixed as storm hits more refineries | By Julia Simon New York Reuters U S gasoline futures jumped 4 percent while crude prices were mixed on Tuesday after a hurricane shut down more than 19 percent of the country s refining capacity curbing fuel production and further bloating crude inventories Gasoline rose still higher post settlement after sources told Reuters that Motiva was shuttering the largest U S refinery That meant at least 3 65 million barrels per day bpd of refining capacity was offline or 19 6 percent of total U S capacity based on company reports and Reuters estimates The Gulf is home to nearly half of U S refining capacity Because that demand is gone that s where the selling pressure in the market is coming from said Gene McGillian manager of market research at Tradition Energy We have no idea when the refineries will come back on the market is taking a wait and see approach U S West Texas Intermediate WTI crude CLc1 edged down 13 cents or 0 3 percent to 46 44 a barrel International Brent crude futures LCOc1 closed up 11 cents or 0 2 percent to 52 00 a barrel The discount for U S WTI versus Brent reached 5 92 a barrel on Tuesday its widest in more than two years U S gasoline futures RBc1 jumped 4 percent to settle at 1 7833 the highest in more than two years After settlement sources told Reuters that Motiva Enterprises was shutting down the nation s largest refinery due to flooding Motiva has already been reducing production at the 603 000 barrel per day bpd Port Arthur Texas refinery as flood waters continued to inundate the area The Motiva shutdown sent after settlement gasoline prices up to 1 8180 Prices would be higher if not for record refinery runs in 2017 said Matt Smith director of commodity research at Clipperdata They re not spiking as much as they would have had we not had the backdrop of plentiful inventories said Smith noting gasoline supplies sit at a five year high for this time of year Sources told Reuters ExxonMobil NYSE XOM was shutting its Beaumont Texas refinery Some refineries were preparing for restarts but heavy rains were expected to last through Wednesday adding to catastrophic flooding The storm has set a rainfall record for tropical cyclones in Texas the National Weather Service said More than 18 percent of oil production in the Gulf of Mexico was shut in the U S Department of the Interior s Bureau of Safety Environmental Enforcement said Still tropical Storm Harvey which was downgraded from a hurricane hit refiners harder After settlement industry group the American Petroleum Institute said its data showed that last week U S crude stocks fell while gasoline inventories increased and distillate stocks drew Crude markets were also eyeing disruptions in Libya and Colombia Yet crude remains in ample supply Jefferies bank said it was lowering its fourth quarter Brent oil price estimates to 55 a barrel from 60 and its 2018 forecast to 57 from 64
For a graphic on North Atlantic storms history click |
XOM | Schroeder accuses his critics of wanting a new Cold War | By Thomas Escritt BERLIN Reuters Former German Chancellor Gerhard Schroeder hit back at those criticizing him for taking a job at a Russian energy company saying some of his critics wanted to push Germany into a new Cold War The critics include his successor as chancellor Angela Merkel who is campaigning to win her fourth term in elections to be held Sept 24 The nomination of Schroeder to the board of state owned Rosneft which is subject to Western sanctions over Moscow s role in the Ukraine crisis has caused an outcry in Germany where many fear Russian interference in the coming elections But Schroeder interviewed at a town hall style event in the western town of Rotenburg said Rosneft was being falsely portrayed in the German media questioning whether he would face similar criticism if he had chosen to work for a U S company Imagine if I had been proposed not for a Rosneft board position but for Exxon NYSE XOM in America he said Nobody would ask my true motives he said replying to a question put by a party ally and a parliamentary candidate in the Sept 24 election It is the largest oil company in the world with important links to Germany he said It is not the long arm of the Kremlin They are the majority shareholder but BP LON BP is a shareholder not a small shop Qatar is a shareholder Schroeder has been slammed as Gazprom MCX GAZP Gerd for his relationship with Gazprom another major Russian energy company Martin Schulz running against Merkel for the Social Democrat party has come under pressure to distance himself from Schroeder the party s last national election winner But Schroeder 73 who makes no bones about his friendship with Russian President Vladimir Putin said he had been vindicated in his decision to oppose former U S President George Bush s Iraq war in 2003 and said he was confident that his involvement with Russia would be seen in the same way Merkel his Christian Democrat successor and a staunch Atlanticist who backed the Iraq war said Schroeder s decision to take on corporate retirement jobs was not okay The people who are now particularly critical wanted to sign us up to the Iraq war and they ve never apologized for standing on the wrong side then Schroeder said The ones doing it again clearly have an interest in us entering into a new Cold War for example with Russia The former chancellor still popular among his party faithful also took a swipe at U S President Donald Trump comparing Trump s seemingly impulsive Twitter diplomacy unfavorably with his Russian counterpart s approach
It s very problematic if someone goes about things depending on their mood railing against this media organization or the other he said Compared to Mr Trump Mr Putin is a very rational man you have to admit |
CSCO | Cisco Systems CSCO Dips More Than Broader Markets What You Should Know | Cisco Systems NASDAQ CSCO closed at 42 77 in the latest trading session marking a 0 33 move from the prior day This move lagged the S P 500 s daily loss of 0 12 At the same time the Dow lost 0 33 and the tech heavy Nasdaq gained 0 08
Prior to today s trading shares of the seller of routers switches software and services had lost 9 36 over the past month This has lagged the Computer and Technology sector s loss of 4 42 and the S P 500 s loss of 6 96 in that time
Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date This is expected to be February 13 2019 In that report analysts expect CSCO to post earnings of 0 72 per share This would mark year over year growth of 14 29 Meanwhile our latest consensus estimate is calling for revenue of 12 38 billion up 4 14 from the prior year quarter
CSCO s full year Zacks Consensus Estimates are calling for earnings of 3 02 per share and revenue of 51 45 billion These results would represent year over year changes of 16 15 and 4 29 respectively
It is also important to note the recent changes to analyst estimates for CSCO These recent revisions tend to reflect the evolving nature of short term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Our research shows that these estimate changes are directly correlated with near term stock prices To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
The Zacks Rank system which ranges from 1 Strong Buy to 5 Strong Sell has an impressive outside audited track record of outperformance with 1 stocks generating an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 0 01 higher CSCO is holding a Zacks Rank of 3 Hold right now
Investors should also note CSCO s current valuation metrics including its Forward P E ratio of 14 23 This valuation marks a discount compared to its industry s average Forward P E of 17 4
It is also worth noting that CSCO currently has a PEG ratio of 2 25 This metric is used similarly to the famous P E ratio but the PEG ratio also takes into account the stock s expected earnings growth rate The Computer Networking industry currently had an average PEG ratio of 2 as of yesterday s close
The Computer Networking industry is part of the Computer and Technology sector This group has a Zacks Industry Rank of 83 putting it in the top 32 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Make sure to utilize Zacks Com to follow all of these stock moving metrics and more in the coming trading sessions |
CSCO | Cisco Systems CSCO Gains But Lags Market What You Should Know | Cisco Systems NASDAQ CSCO closed the most recent trading day at 43 21 moving 0 68 from the previous trading session This move lagged the S P 500 s daily gain of 0 7 At the same time the Dow added 0 42 and the tech heavy Nasdaq gained 1 26
Coming into today shares of the seller of routers switches software and services had lost 11 3 in the past month In that same time the Computer and Technology sector lost 4 86 while the S P 500 lost 6 13
Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date This is expected to be February 13 2019 In that report analysts expect CSCO to post earnings of 0 72 per share This would mark year over year growth of 14 29 Our most recent consensus estimate is calling for quarterly revenue of 12 38 billion up 4 14 from the year ago period
Looking at the full year our Zacks Consensus Estimates suggest analysts are expecting earnings of 3 02 per share and revenue of 51 45 billion These totals would mark changes of 16 15 and 4 29 respectively from last year
Any recent changes to analyst estimates for CSCO should also be noted by investors These recent revisions tend to reflect the evolving nature of short term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Our research shows that these estimate changes are directly correlated with near term stock prices We developed the Zacks Rank to capitalize on this phenomenon Our system takes these estimate changes into account and delivers a clear actionable rating model
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 0 07 lower CSCO currently has a Zacks Rank of 3 Hold
Investors should also note CSCO s current valuation metrics including its Forward P E ratio of 14 23 This represents a no noticeable deviation compared to its industry s average Forward P E of 14 23
It is also worth noting that CSCO currently has a PEG ratio of 2 25 The PEG ratio is similar to the widely used P E ratio but this metric also takes the company s expected earnings growth rate into account The Computer Networking industry currently had an average PEG ratio of 2 01 as of yesterday s close
The Computer Networking industry is part of the Computer and Technology sector This industry currently has a Zacks Industry Rank of 175 which puts it in the bottom 31 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Make sure to utilize Zacks Com to follow all of these stock moving metrics and more in the coming trading sessions |
CSCO | BlackBerry CEO sees company patents as key to turnaround strategy | By Euan Rocha WATERLOO Ontario Reuters BlackBerry Ltd TO BB sees its massive patent portfolio as one of the key elements in its turnaround strategy as it pivots to focus more on its software and enterprise business Chief Executive John Chen said on Thursday We have today about 44 000 patents The good thing about this is that we also have one of the youngest patent portfolios in the entire industry so monetization of our patents is an important aspect of our turnaround Chen said while speaking in the company s hometown at the Waterloo Innovation Summit BlackBerry s fiscal first quarter results in June benefited from this strategy of monetizing its intellectual property with software and licensing revenue rising more than 150 percent to 137 million The gains were largely driven by two new licensing deals one with Cisco Systems Inc O CSCO and one with an unnamed party that made significant contributions to its software revenue in the quarter Chen said the challenge is balancing between aggressively safeguarding one s patents via lawsuits or monetizing them via collaborative licensing agreements If you go too far and become too aggressive you become a patent troll said Chen who said the company was not keen on taking that approach or gaining such a reputation If you want to go about monetizing your patents in a non aggressive legal way then it takes time and in a turnaround time is one of the key commodities you don t have so balancing those two is very difficult Chen stressed that the company plans to keep innovating and staying a market leader in secure communications where the company has tremendous amounts of know how The fact that a company is financially not doing that well or that it s market share is not doing that well doesn t mean it can t innovate said Chen |
CSCO | Cisco security researchers disable big distributor of ransomware | By Joseph Menn SAN FRANCISCO Reuters Cisco Systems Inc NASDAQ CSCO said it had managed to disrupt the spread of one of the most pernicious systems for infecting Internet users with malicious software such as so called ransomware which demands payment for decrypting users data The investigators from Cisco s Talos security unit were looking at the Angler Exploit Kit which analysts at several companies say has been the most effective of several kits at capturing control of personal computers in the past year infecting up to 40 percent of those it targeted They found that about half of computers infected with Angler were connecting to servers at a hosting provider in Dallas which had been hired by criminals with stolen credit cards The provider Limestone Networks pulled the plug on the servers and turned over data that helped show how Angler worked The research effort aided by carrier Level 3 Communications allowed Cisco to copy the authentication protocols the Angler criminals use to interact with their prey Knowing these protocols will allow security companies to cut off infected computers It s going to be really damaging to the attacker s network Telos manager Craig Williams told Reuters ahead of the release of the report Cisco said that since Limestone pulled the plug on the servers new Angler infections had fallen off dramatically Limestone s client relations manager told Reuters his company had unwittingly helped the spread of Angler before the Cisco investigation Often sold in clandestine Internet forums or in one to one deals exploit kits combine many small programs that take advantage of flaws in Web browsers and other common pieces of software Buyers of those kits must also arrange a way to reach their targets typically by sending spoof emails hacking into websites or distributing malicious advertisements Once they win control of a target s computer exploit kit buyers can install whatever they want including so called ransomware This includes a number of branded programs also sold online that encrypt users computer files and demand payment to release them
Telos estimated that if three percent of infected users paid the ransom averaging 300 the criminals that had used the Limestone servers to spread Angler could have made about 30 million a year |
CSCO | OnePlus announces plans to make in India | By Supantha Mukherjee
BENGALURU Reuters Chinese phone maker OnePlus said it had entered into an agreement with Foxconn Technology to manufacture phones in India making the mobile phone company the latest to join a spate of rivals who have announced similar plans
All our handsets are made in China and then shipped to India So making them locally will help reaching our Indian customers faster Chief Executive Pete Lau told reporters in a conference on Monday
India under Prime Minister Narendra Modi has sought to reboot manufacturing but the country is yet to rival China particularly in technology where most factories will likely be assembly units to begin with
Foxconn the world s biggest contract manufacturer for electronic parts has said it is aiming to develop 10 12 facilities in India including factories and data centers by 2020
India being one of our biggest markets worldwide we are committed to a long term sustainable growth path This move will strengthen our presence and help us step up momentum in India Lau said
A growing middle class and an expected surge in the use of mobile data in the coming months have turned India into a lucrative market for Chinese players
India is the fastest growing smartphone market in the world but most Indians are first time user preferring cheaper alternatives to iPhones or higher end Samsung KS 005930 devices
Local production of OnePlus upcoming devices will start before end of this year the company said with a peak capacity of producing up to 500 000 units per month
Rivals such as Oppo and Xiaomi have already announced plans to manufacture in the country
India has the second highest number of mobile phone accounts behind China According to networking solutions company Cisco Systems O CSCO there will be 650 million smartphones in the country by 2019 |
VZ | T Mobile US TMUS To Acquire 700 MHz Spectrum From ATT | T Mobile US Inc NYSE T is gradually expanding its 4G LTE coverage in the U S Recently the company has entered into an agreement with AT T Inc NYSE T to acquire spectrum in the 700 MHz band This will help the company to provide LTE network in the greater Chicago area AT T had acquired this license as part of its takeover of Leap Wireless two years ago Although the financial terms of the T Mobile US AT T deal have been kept under wraps the transaction is likely to be closed in the fourth quarter of 2016 In 2014 T Mobile US acquired 700 MHz spectrum from Verizon Communications Inc NYSE VZ in a deal worth multi billion dollar Ever since that buy T Mobile US has systematically increased its 700 MHz airwaves portfolio through 23 transactions After the completion of the AT T deal T Mobile US will install LTE coverage in the top 10 markets of the U S Notably in Mar 2016 T Mobile US sought the telecom regulator Federal Communications Commission s FCC approval for a millimeter wave radio test license using the company s 28 GHz and 39 GHz frequency bands to conduct a test run of the upcoming 5G wireless standard The company has formed partnerships with Ericsson ST ERICAs AB NASDAQ ERIC and Nokia HE NOKIA Corp NYSE NOK to set up field and lab trials for 5G networks A full fledged 5G network deployment will not start until 2020 The U S telecom industry has lately emerged as an intensely contested space where success thrives largely on technical superiority quality of services and scalability Thus in order to stay ahead of competition existing players need to be constantly on their toes to introduce innovative products At this juncture we believe T Mobile US decision to expand 4G LTE network and its drive for 5G wireless network will prepare the ground for its future growth The stock currently carries a Zacks Rank 3 Hold |
VZ | Verizon VZ Enters Tentative Deal With Unions To End Strike | Verizon Communications Inc NYSE VZ has entered into a tentative deal with two workers unions whose members went to strike from Apr 13 2016 Verizon and the striking unions The Communications Workers of America CWA and International Brotherhood of Electrical Workers IBEW have almost resolved their differences and nearly 36 500 workers in the company s wireline and cable TV FiOS Internet and TV segment will resume work from Jun 1 2016 Union members will vote on the tentative contract by Jun 17 Verizon and its wireline workers were at a stalemate over a labor contract The company s wireline employees have been working out of contract since August last year Earlier this month the U S Secretary of Labor Thomas Perez met with the Verizon CEO and the heads of the two unions that represent the company s striking workforce Perez requested both sides to sit at the negotiation table to resolve the issues Under the new contract Verizon will provide a 10 9 pay rise to its unionized workers over a period of four years a small increment in pension benefit and a promise to create nearly 1 400 new union jobs This will include around 1 300 new call center jobs and about 70 wireless retail store employees Importantly the company agreed to reduce subcontracting and withdrew a proposal to relocate employees for extended periods These two were the main issues of the strike Though Verizon had to make certain concessions it stood to gain on some points The company will be able to reduce benefit costs by modifying employee health care plans Verizon stated that it will achieve cost savings through healthcare plan design changes adopting Medicare Advantage plans for its retirees maintaining limits on post retirement healthcare costs and freezing the mortality table for lump sum pensions using the GATT rate Just a week ago Verizon s CEO warned that the company s second quarter 2016 financial results may be affected by the ongoing strike Lowell McAdam stated that the company is currently on track with respect to repairing and maintenance issues of the existing installed bases However the number of new installations of FiOS high speed Internet and FiOS pay TV has dropped significantly As a result the company may suffer high speed broadband and pay TV customer attrition It is crucial for Verizon to ensure smooth operations and continuing service even in the face of a walkout Cable and landline revenues although not comprising a large share of the pie come directly from Verizon s business customers In 2015 FiOS generated 29 of Verizon s total revenue and slightly less than 7 of operating income Verizon is already facing severe competitive threat from its telecom rivals AT T Inc NYSE T T Mobile US Inc NYSE T and Sprint Corp NYSE S and any disruption in services can prove to be fatal for the company Therefore a solution to the labor problem will bode well for the company s near term growth Verizon currently carries a Zacks Rank 3 Hold |
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