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VZ | 3 Numbers Weak Inflation Numbers Will Not Move ECB Policy | Analysts predict no change for the ECB s stimulus program
ADP data should show a modestly firmer rise in US private payrolls for May
A strike at tech company Verizon strike may skew employment figures for May
US jobless claims are expected to fall for the third straight week
The European Central Bank s monthly policy announcement followed by a press conference will dominate the economic news in Europe today Later two reports will offer fresh insight into US payrollsfor May starting with the monthly estimate of private employment via ADP Later the Labor Department publishes its weekly release on jobless claims
Eurozone ECB Monetary Policy Announcement 1145 GMT and Press Conference 1230 GMT Consumer inflation fell again in May in the preliminary estimate published by Eurostat on Tuesday
The 0 1 annual decline is the fourth consecutive update of flat to negative year on year inflation Questions about the threat of deflation will no doubt be front and centre today as the crowd pores over today s news from the European Central Bank including the obvious one Should the ECB do even more
Analysts are expecting no change in monetary policy despite the worrisome data in the latest inflation report On that point consider that core inflation which strips out energy and food prices is in no danger of slipping into negative territory for the near term future
Most of the deflationary winds are coming from energy By contrast core inflation arguably a superior benchmark for monitoring the broad pricing trend ticked higher in May inching up to 0 8 in year over year terms
That s a touch lower than the recent highs of 1 Nonetheless the relatively steady trend in core inflation suggests that deflation risk is minimal to non existent Rather it s all about energy
The Eurozone economy is expanding at a satisfactory clip the hypothetical deflation threat has receded and none of the risks that had roiled markets early this year has materialised a Berenberg Bank economist the FT While the ECB will not rule out further easing the council will likely emphasise that its previous stimuli seem to be working
Economic growth is still sluggish but for the moment it appears that a modest expansion will endure albeit at a subdued pace against the trend from a few months earlier
The May report for the a monthly estimate of Eurozone GDP posted a 0 26 advance The softer gain implies that Eurozone GDP growth is headed for a slowdown in the second quarter after firming up to a 0 5 quarter on quarter gain in Q1
In other words the celebrated rebound in Q1 is at risk of faltering It doesn t look fatal at this point a roughly 0 3 GDP rise if that s what Q2 delivers will match the trend in last year s second half Not great but firm enough to fend off predictions of a new recession
In any case the main event for the euro area today centers on a single question What does the ECB s think Tune in to the 1230 GMT press conference for the answer
US ADP Employment Report 1215 GMT A modest round of improvement is expected for today s estimate of US private payrolls from ADP
Econoday com s consensus forecast sees companies adding 175 000 workers in May up from a 156 000 gain in the previous month That s still a modest pace compared with recent history but at least the expected change is positive
Some analysts are warning that a Verizon NYSE VZ strike which ended this week may skew the employment figures for May by temporarily depressing the monthly growth comparison Reuters last week that the Labor Department s payrolls report for last month which is due on Friday will be lighter by at least 35 000 because of striking employees at the US telecom company
If the official jobs data for May will suffer it s reasonable to expect that today s ADP data will be affected too If so a weak number in today s release may not be a reliable estimate of the labour market s health or lack thereof No doubt that s what the bulls will say if the employment numbers for May are weak
In other words we may have to wait until the June reports to figure out what s really going on with payrolls
US Initial Jobless Claims 1230 GMT The Verizon strike is also said to be the source for the early May spike in jobless claims which surged in the first week of last month to a 10 month high
The good news The two subsequent updates show that new filings for unemployment benefits are easing providing the basis for a collective sigh of relief
Today s update for the final week of May is projected to more or less hold steady
Econoday com s consensus forecast calls for a decline of 1 000 to a seasonally adjusted 267 000 If the estimate holds the news will boost confidence that the dramatic rise in claims in early May was for whatever reason noise
For additional perspective keep an eye on today s update of a related indicator the monthly report on job cuts which is published by the outplacement firm Challenger Gray Christmas today s data is due at 1130 GMT
Recent figures on this front however don t offer much support for the bulls The April job cuts data revealed layoffs that accelerated to a six year high of just over 65 000
But a lot of that is due to downsizing in the energy industry which has been hit hard by the bear market in oil prices in recent years downsizing that may not be all that useful for modeling the broad US macro trend
We are also seeing heavy downsizing activity in other areas such as computers and retail where changing consumer trends are creating a lot of volatility Challenger s chief executive officer last month
If job cuts continue to rise in May particularly outside of the energy industry the news will limit any celebrations related to encouraging news on jobless claims
Disclosure Originally published at Saxo Bank TradingFloor com |
VZ | Top 10 ECB Takeaways Nonfarm Payrolls Preview | By Kathy Lien Managing Director of FX Strategy for BK Asset Management
The European Central Bank s monetary policy announcement proved to be a big disappointment as it failed to trigger a breakout for EUR USD Although the currency pair rose to a 1 week high of 1 1220 before the monetary policy announcement it gave up all of its gains after Mario Draghi s press conference The ECB head didn t have anything particularly negative to say about the economy or monetary policy outside of the expected warning that unwanted tightening of financial conditions most likely in reaction to a negative Brexit vote could trigger more stimulus For the time being they remain comfortable with current policy and expect corporate bond purchases which begin June 8 and TLTRO which begins June 22 to provide additional support for the economy Their views even led to upgraded GDP and inflation forecasts for 2016 Still euro traders were not impressed because Mario Draghi went out of his way to emphasize his willingness to increase stimulus if markets go haywire after the U K referendum So between the ECB s dovish bias and its upgraded growth forecasts the EUR USD remained confined between its 1 1100 to 1 1250 trading range A break of this range is now up to the U S nonfarm payrolls report
Top 10 ECB Takeaways
Interest Rates Will Remain Low or Move Lower in the Period Ahead Dovish Bias
ECB Currently in Wait and See Mode Needs to See Full Impact of Stimulus
BUT If Financial Conditions Tighten Significantly it Stands Ready to Act Quickly All Depends on BREXIT vote
There is More Stimulus on the way Corporate Bond Purchases Begin June 8 TLTRO Begins June 22
ECB Expects Extra Impetus from Stimulus Yet to Hit
ECB Hikes 2016 GDP and Inflation Forecasts ECB Optimistic About Inflation and Growth Outlook
ECB Can Adjust QE if Limits are Hit
Q2 Growth May be Slower than Q1 Not Seeing Significant Wage Pressures or Second Round Inflation Effects
Global Economy and Brexit Main Risks for EZ
ECB Wants UK to Remain in EU
The focus now shifts to the U S dollar and nonfarm payrolls USD JPY extended its losses Thursday on the back of Japanese and U S equity market weakness Bank of Japan board member Sato also said the sales tax delay won t affect monetary policy The recent decline in USD JPY has taken the pair near support at 108 25 Whether this level breaks or holds hinges entirely on NFPs We need an unambiguously positive U S labor market report for USD JPY to recapture 109 and possibly even 110 That means nonfarm payrolls need to exceed 175K the unemployment rate needs to drop back to 4 9 and average hourly earnings has to rise more than 0 2 That s a lot to ask for especially with the Verizon NYSE VZ strike expected to reduce payrolls by 35K jobs Still job growth last month was subpar so a bounce in May would not be unusual Every month we take a look at 8 economic indicators for clues about the state of the labor market and this month there are more arguments in favor of a weak release Although Challenger reported fewer layoffs and ADP reported an increase in corporate payrolls the rise in the UMich survey was offset by the drop in the Consumer Confidence index Jobless claims also increased continuing claims rose and jobs contracted at the same pace in the manufacturing sector according to ISM However the strongest leading indicator for NFPs the non manufacturing ISM report won t be released until after the jobs number so there s still chance for an upside surprise The main focus will be on wage growth Last month the dollar soared despite lower job growth because wages grew at a faster pace If the momentum in earnings can be continued weaker job growth can be forgiven
Arguments For Stronger Payrolls
Challenger Reports 26 5 Drop in Layoffs
ADP Employment Change Rises to 173K from 166K
Rise in University of Michigan Consumer Sentiment Index
Arguments For Weaker Payrolls
Jobless Claims 4 Week Average Rises to 276K from 258K
Continuing Claims Rise to 2 17M from 2 16M
Drop in Consumer Confidence Index
No Change In Employment Component of ISM Manufacturing
Verizon Strike Cuts 35 100 Jobs
The OPEC meeting ended with no deal on cutting production and oil prices dropped in reaction There s very little desire among leading oil producers to reduce output and the headlines during the meeting from various nations were consistent They all found the meeting positive and cooperative in the sense that they all agreed that production levels should remain the same 50 a barrel continues to cap gains in oil and encourage rallies for USD CAD We are now looking for a deeper pullback in oil prices but Canadian trade numbers are scheduled for release Friday and the risk is to the upside Manufacturing activity accelerated last month according to the IVEY PMI report and with Western Canada Select oil prices rising 38 in April export values should increase leading to a smaller trade deficit
The Australian dollar traded lower against the U S dollar Thursday while the New Zealand dollar moved higher No economic reports were released from New Zealand but AUD fell victim to risk aversion and the drop in metal prices Retail sales also rose less than expected offsetting the improvement in the trade balance Australia s PMI services report was due Thursday evening along with Chinese service PMIs
Sterling ended the day higher against the U S dollar and euro in what could be interpreted as a delayed reaction to Wednesday s manufacturing PMI report Construction sector activity slowed in May The PMI services report is scheduled for release Friday and based on the improvement in consumer confidence as well as the uptick in the manufacturing report the odds favor a sterling positive release |
VZ | Sprint and T Mobile offer further price discounts | By Marina Lopes WASHINGTON Reuters Sprint Corp N S unveiled a plan on Thursday that gives subscribers access to unlimited data for 60 a month the industry s cheapest unlimited data offering as the carrier attempts to reverse the decline in its subscriber base Wireless carriers have been going after each others subscribers as they try to increase revenue in a nearly saturated market Sprint s new offerings are 20 cheaper than T Mobile s unlimited plan and are available to new and existing customers who bring in their own cellphone or pay full price for a new one The announcement comes just hours after rival T Mobile US N TMUS launched a campaign to lure subscribers away from other carriers If an existing customer is able to persuade a subscriber of another carrier to switch to T Mobile both will get upgraded to an unlimited data plan for free for one year Earlier this week Sprint doubled data offerings for customers in family plans while industry leader Verizon Communications N VZ slashed prices for its unlimited talk and text plan Price cuts are a top priority for Sprint s new chief executive Marcelo Claure as he attempts to turn around a company plagued by customer defections due to a network overhaul that has caused gaps in coverage
Sprint shares edged up O 9 percent to 5 55 while T Mobile shares slipped 1 6 percent to 29 21 on the New York Stock Exchange Reporting by Marina Lopes Editing by Jonathan Oatis |
VZ | Sprint grabs lifeline with rural U S roaming deals | By Marina Lopes and Alina Selyukh WASHINGTON Reuters With plans for a T Mobile US Inc merger in tatters Sprint Corp is expanding a roaming program with rural cellphone companies that could provide a much needed way for the debt laden wireless carrier to cheaply increase its footprint
In March Sprint Chairman Masayoshi Son struck a roaming deal with the Competitive Carriers Association CCA which represents many U S rural and regional carriers to use each other s networks for roaming at a mutually attractive price
In June Sprint announced that a dozen small carriers covering a population area of 34 million people had struck roaming deals following the outlines of the CCA agreement
Sprint and CCA plan to announce another batch of individual agreements to expand the roaming partnerships at an industry trade show in early September CCA President and Chief Executive Officer Steve Berry said this week
When Son announced the mutual roaming agreement many industry observers shrugged it off as a sweetener to soften U S regulators opposition to a T Mobile acquisition Rural carriers have long complained about the difficulty and expense of getting the largest carriers Verizon Communications Inc and AT T Inc to let customers of smaller providers onto their networks
Deals with rural carriers could offer Sprint a lifeline to improve its national presence following the collapse of the merger with T Mobile So far Sprint has already saved an estimated 1 7 billion in costs of building new towers and other infrastructure according to a source familiar with the calculations
Sprint s new CEO Marcelo Claure said that the networks of rural carriers are really important in places where we haven t and don t intend to build our network
CHEAPER ROAMING
The 12 mutual roaming agreements already signed with rural and regional carriers including Virginia based nTelos Wireless and Mississippi based C Spire Wireless have added 352 000 square miles to Sprint s service territory which like T Mobile s has been largely concentrated around metropolitan areas while Verizon and AT T s coverage stretches nationwide
It s a business relationship that s frankly bred out of necessity said CCA s Berry explaining that the agreement helps rural partners share savings with Sprint while staying competitive You ve got to have a roaming partner
Claure s challenges are complex and long term as the company struggles to recover the millions of customers it lost during its messy network overhaul in recent years The task is particularly tough in a nearly saturated market and with No 4 T Mobile pushing to leapfrog Sprint as the No 3 U S carrier
Sprint s debt is equivalent to 147 percent of its market cap compared with 55 percent at Verizon
Perhaps because Sprint needs rural coverage more than its rivals its roaming agreements offer the carriers more perks and more flexibility than they have seen from other companies
While T Mobile has offered some roaming agreements experts say Verizon s rural program is the only comparable alternative that offers rural carriers nationwide 4G roaming
Verizon s program however largely limits partners to building networks that rely on airwaves owned by Verizon while Sprint s allows them to use their own spectrum Sprint s partners also say it offers more attractive roaming rates
It s one thing to get a roaming agreement it s another thing to get a roaming agreement with non punitive roaming rates said Eric Graham senior vice president of strategic relations at C Spire
Roaming agreements are notoriously secretive with companies signing non disclosure agreements about rates Verizon says its roaming rates reflect the value of its nationwide network
Another major perk Sprint offers is access to devices at cheaper prices negotiated with handset distributors solving a major problem for smaller carriers who are often stuck paying top dollar for devices because they lack their competitors scale
Claure s appointment as CEO may lead to even better handset prices
The Bolivian born entrepreneur made his fortune through a cellular phone wholesale business called Brightstar which has close ties with handset makers and may provide better access to the latest smartphones at decent prices both for Sprint and its partners
Editing by Grant McCool |
VZ | Sprint expands rural roaming program adding 15 new carriers | By Alina Selyukh WASHINGTON Reuters Sprint Corp said on Friday it was adding 15 new rural and regional wireless providers to its U S roaming program a move bolstering the company s efforts to cheaply expand its footprint as it fights to stay competitive as a national carrier
The program allows Sprint and its smaller partners to use each other s networks for roaming at a mutually attractive price A total of 27 carriers covering 565 000 square miles and a population area of more than 38 million people have now entered into roaming agreements with Sprint
The 27 partnerships could save Sprint about 1 9 billion in expenditures on new cell phone towers and other infrastructure that would be necessary to bring 4G coverage to new areas on its own based on calculations provided by a source familiar with the program estimates
With those savings deals with rural carriers could offer Sprint a lifeline to improve its national presence following the collapse of the merger with T Mobile US Inc
Like T Mobile s Sprint s network has been largely concentrated around metropolitan areas while the coverage by the two biggest U S carriers Verizon Communications Inc and AT T Inc stretches nationwide
Growing its footprint is one of Sprint s major challenges as the company struggles to win back millions of customers it lost during its messy network overhaul in recent years The task is particularly tough in a nearly saturated market and with No 4 T Mobile pushing to leapfrog Sprint as the No 3 U S carrier
In March Sprint Chairman Masayoshi Son struck an agreement with the Competitive Carriers Association which represents many U S rural and regional carriers providing the framework for a rural roaming program
In June Sprint announced the first 12 individual carriers to launch the rural roaming program into reality including Virginia based nTelos Wireless and Mississippi based C Spire Wireless
The 15 new partners announced Friday include Kentucky based Bluegrass Cellular Idaho based Syringa Wireless and Alabama based Pine Belt Wireless
Perhaps because Sprint needs rural coverage more than its rivals its 4G roaming agreements offer the carriers more perks and more flexibility than they have seen from other companies
Verizon s program for instance largely limits partners to building networks that rely on airwaves owned by Verizon while Sprint s allows them to use their own spectrum Sprint s partners also say it offers more attractive roaming rates
Another major perk Sprint offers is access to devices at cheaper prices negotiated with handset distributors solving a major problem for smaller carriers who are often stuck paying top dollar for devices because they lack their competitors scale
Reporting by Alina Selyukh Editing by Tom Brown |
XOM | Crude oil poised to gain in Asia as Harvey hits U S Gulf hard | Investing com Crude oil prices were poised to gain in Asia on Monday in the aftermath of the massive hit taken to U S Gulf Coast output from Hurricane Harvey and follow on flooding inland in Texas
The U S West Texas Intermediate crude October contract was last quoted up 0 10 to to 47 92 a barrel Elsewhere on the ICE Futures Exchange in London Brent oil for October delivery was last quoted at 51 98 a barrel
Hurricane Harvey has knocked offline 22 of Gulf of Mexico oil production or nearly 380M bbl pay out of 1 75M and 26 of natural gas output or 828M cf day out of 3 22T according to the U S Department of the Interior s Bureau of Safety and Environmental Enforcement
In the refining sector most Texas Gulf Coast refining and shipping is shut or curtailed Exxon Mobil NYSE NYSE XOM closed its Baytown refinery at the Houston Ship Channel the second largest refinery in the U S with production capacity of 560K bbl day due to severe flooding Royal Dutch Shell LON LON RDSa RDS A RDS B says its 325K bbl day Deer Park refinery and chemical plant complex may be shut for a week Petrobras NYSE PBR shut its 112K bbl day Pasadena plant and Phillips 66 NYSE NYSE PSX shut its 247K bbl day Sweeny refinery
All Corpus Christi refineries already were closed so the Houston plant closures compound worries about fuel shortages that could develop as rain continues long term refinery outages could cause fuel shortages and sharply higher gasoline prices around the U S
Houston also is the starting point of the massive Colonial Pipeline that takes gasoline diesel and jet fuel as far north as New York but operations had not been affected as of this afternoon Shell is one of Colonial\ s partners
Last week oil prices ended higher on Friday as Hurricane Harvey threatened to disrupt production and refinery activity along the Gulf Coast
Prices received additional support after an update from oilfield services firm Baker Hughes showed its weekly count of oil rigs operating in the U S fell for the second time in row by four rigs to a total of 759
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand |
XOM | Crude oil mixed in Asia as U S benchmark down on Harvey impact | Investing com Crude oil prices were mixed in Asia on Monday in the aftermath as the U S benchmark was hit by initial weaker demand expectations after the massive hit taken to U S Gulf Coast output and refineries from Hurricane Harvey and follow on flooding inland in Texas
The U S West Texas Intermediate crude October contract fell 0 36 to 47 70 a barrel Elsewhere on the ICE Futures Exchange in London Brent oil for October delivery gained 0 40 to 52 19 a barrel
Hurricane Harvey has knocked offline 22 of Gulf of Mexico oil production or nearly 380M bbl pay out of 1 75M and 26 of natural gas output or 828M cf day out of 3 22T according to the U S Department of the Interior s Bureau of Safety and Environmental Enforcement
In the refining sector most Texas Gulf Coast refining and shipping is shut or curtailed Exxon Mobil NYSE NYSE XOM closed its Baytown refinery at the Houston Ship Channel the second largest refinery in the U S with production capacity of 560K bbl day due to severe flooding
Royal Dutch Shell LON LON RDSa RDS A RDS B says its 325K bbl day Deer Park refinery and chemical plant complex may be shut for a week Petrobras NYSE PBR shut its 112K bbl day Pasadena plant and Phillips 66 NYSE NYSE PSX shut its 247K bbl day Sweeny refinery
All Corpus Christi refineries already were closed so the Houston plant closures compound worries about fuel shortages that could develop as rain continues long term refinery outages could cause fuel shortages and sharply higher gasoline prices around the U S
Houston also is the starting point of the massive Colonial Pipeline that takes gasoline diesel and jet fuel as far north as New York but operations had not been affected as of this afternoon Shell is one of Colonial\ s partners
Last week oil prices ended higher on Friday as Hurricane Harvey threatened to disrupt production and refinery activity along the Gulf Coast
Prices received additional support after an update from oilfield services firm Baker Hughes showed its weekly count of oil rigs operating in the U S fell for the second time in row by four rigs to a total of 759
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand |
CSCO | Cisco Systems CSCO Stock Sinks As Market Gains What You Should Know | In the latest trading session Cisco Systems NASDAQ CSCO closed at 44 06 marking a 0 32 move from the previous day This move lagged the S P 500 s daily gain of 0 01 Elsewhere the Dow gained 0 35 while the tech heavy Nasdaq added 0 45
Prior to today s trading shares of the seller of routers switches software and services had lost 3 39 over the past month This has was narrower than the Computer and Technology sector s loss of 5 51 and the S P 500 s loss of 7 29 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 the Zacks Consensus Estimate for revenue is projecting net sales of 12 38 billion up 4 14 from the year ago period
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
Investors should also note any recent changes to analyst estimates for CSCO Recent revisions tend to reflect the latest near term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Based on our research we believe these estimate revisions are directly related to near team stock moves Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 The Zacks Consensus EPS estimate has moved 0 01 higher within the past month CSCO is currently sporting a Zacks Rank of 3 Hold
Investors should also note CSCO s current valuation metrics including its Forward P E ratio of 14 66 This represents a discount compared to its industry s average Forward P E of 18 96
Also we should mention that CSCO has a PEG ratio of 2 31 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 Computer Networking stocks are on average holding a PEG ratio of 2 11 based on yesterday s closing prices
The Computer Networking industry is part of the Computer and Technology sector This industry currently has a Zacks Industry Rank of 102 which puts it in the top 40 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 | Palo Alto Networks posts biggest revenue rise in 10 quarters | By Abhirup Roy Reuters Cyber security company Palo Alto Networks Inc N PANW reported its strongest revenue growth in 10 quarters and forecast better than expected growth in the current quarter as governments and companies spend more to protect themselves from cyber attacks Palo Alto s shares rose about 5 percent in extended trading on Wednesday The company and its rivals such as FireEye Inc O FEYE and Fortinet Inc O FTNT provide cloud based advanced threat protection and malware analysis products which have helped them grab market share from traditional firewall suppliers We re seeing gains pretty much everywhere where we compete and also now including on the end point side as well and that plays into the product growth Chief Executive Mark McLaughlin said on a conference call with analysts McLaughlin said Palo Alto was winning larger deals with larger customers He said the company had replaced Cisco Systems Inc O CSCO and Checkpoint Systems Inc N CKP as the preferred security provider in some companies in the fourth quarter Palo Alto s customer base grew 35 percent to more than 26 000 with over 2000 new customers in the quarter ended July 31 Billings rose 69 percent to 393 6 million I believe they are only about 10 15 percent penetrated in the market so there is a lot of room to grow in the coming years for Palo Alto FBR Capital Markets Co analyst Daniel Ives said The global cyber security market is estimated to grow to 170 21 billion by 2020 from 106 32 billion in 2015 according to market research firm MarketsandMarkets Palo Alto s revenue rose 59 3 percent to 283 9 million in the quarter beating Wall Street s estimates of 256 4 million Revenue growth was higher in the second quarter of fiscal 2013 Net loss widened to 46 million from 32 1 million Excluding items the company s profit of 28 cents per share was better than analysts estimate of 25 cents Palo Alto expects revenue to increase 46 48 percent to 280 284 million in the current quarter ending October Analysts on average were expecting revenue of 269 7 million according to Thomson Reuters I B E S
Up to Wednesday s close Palo Alto s stock had risen nearly 35 percent this year compared with a 4 8 percent drop in the Dow Jones U S technology index DJUSTC |
CSCO | Cisco router break ins bypass cyber defenses | By Eric Auchard FRANKFURT Reuters Company corrects the 15th paragraph beginning The malicious programme to clarify that the nickname SYNful refers to the signal routers sent to open up communication with other routers rather than how the implanted software jumps between routers Security researchers say they have uncovered clandestine attacks across three continents on the routers that direct traffic around the Internet potentially allowing suspected cyberspies to harvest vast amounts of data while going undetected In the attacks a highly sophisticated form of malicious software dubbed SYNful Knock has been implanted in routers made by Cisco the world s top supplier U S security research firm FireEye said on Tuesday Routers are attractive to hackers because they operate outside the perimeter of firewalls anti virus behavioral detection software and other security tools that organizations use to safeguard data traffic Until now they were considered vulnerable to sustained denial of service attacks using barrages of millions of packets of data but not outright takeover If you own seize control of the router you own the data of all the companies and government organizations that sit behind that router FireEye Chief Executive Dave DeWalt told Reuters of his company s discovery This is the ultimate spying tool the ultimate corporate espionage tool the ultimate cybercrime tool DeWalt said The attacks have hit multiple industries and government agencies he said Cisco confirmed it had alerted customers to the attacks in August and said they were not due to any vulnerability in its own software Instead the attackers stole valid network administration credentials from targeted organizations or managed to gain for themselves physical access to the routers We ve shared guidance on how customers can harden their network and prevent detect and remediate this type of attack Cisco said in a statement CYBERSPIES SEEN RESPONSIBLE Altogether FireEye s computer forensic arm Mandiant has so far found 14 instances of the router implants in India Mexico Philippines and Ukraine the company said in a blog post at It added that this may be just the tip of the iceberg in terms of yet to be discovered attacks Because the attacks actually replace the basic software controlling the routers infections persist when devices are shut off and restarted If found to be infected FireEye said basic software used to control those routers would have to be re imaged a time consuming task for technicians Hitherto infections of commercial routers while not unknown have largely remained theoretical threats DeWalt said as distinct from routers consumers use at home which according to media reports have been hit by malware in recent years Experts reckon there are only a small number of nations with cyber intelligence services which are capable of such attacks on network equipment including those of Britain China Israel Russia and the United States That feat is only able to be obtained by a handful of nation state actors DeWalt said while declining to name which countries he suspected might be behind the Cisco router attacks The malicious program has been nicknamed SYNful a reference to SYN the signal a router sends when it starts to communicate with another router a process which the implant exploited according to FireEye Network logs from infected routers suggest the attacks have been taking place for at least a year FireEye s CEO said The implanted software which duplicates normal router functions could also potentially affect routers from other makers DeWalt said Infected hardware devices include Cisco routers 1841 2811 and 3825 FireEye said Cisco had discontinued selling the products but still supports customers using them
FireEye said it was only announcing its discovery after working with Cisco to quietly notify governments and affected parties We thought it was best to release this so everyone can fix their routers as fast as possible DeWalt said |
VZ | AT T Poised For Long Term Growth Competition Woes Rife | On May 18 we issued an updated research report on U S telecom behemoth AT T Inc NYSE T AT T reported strong financial results in the first quarter of 2016 with both the top and the bottom line beating the Zacks Consensus Estimate However the company s U S postpaid wireless subscriber addition of 129 000 was down a significant 70 7 year over year Nonetheless prospects of better earnings and revenues over the long haul from the DIRECTV NASDAQ DTV purchase are bright From 2016 to 2018 AT T expects consolidated revenue growth to be in line with GDP growth or higher while adjusted earnings per share growth is projected in the mid single digit range With its combination of U Verse DIRECTV s satellite TV and an all fiber GigaPower Internet service AT T now has the operational flexibility to provide traditional cable TV service as well as mobile video streaming service to users In March the company announced plans to offer a version of its DIRECTV satellite TV service through the Internet which would not require customers to have a satellite dish set top box or annual contract The company will be offering three affordable video plans in order to appeal to all types of viewers ranging from those who want the full package to a streamlined bundle We believe that the new endeavor will help AT T attract cord cutters and boost revenues Also offering of two year guaranteed pricing for its new DIRECTV home internet and digital phone customers is expected to aid in expansion of its satellite offering in the residential services segment AT T has revealed plans to field test the next gen 5G technology If the company succeeds to bring 5G to the U S market before any of its peers its quest to be the numero uno in the domestic market will definitely see a positive direction Further the company stands to benefit hugely from initiatives in the Internet of Things IoT space and investments in the Mexican telecom market and fiber arena However AT T has increased the prices of its voice and U verse video services because of rising operating costs especially in programming and service delivery as well as increasing content costs This may impact subscriber retention in the near term Additionally a saturated wireless market spectrum crunch and regulatory risks remain potent headwinds Moreover intensifying competition in the U S wireless market from peers like Verizon Communications Inc NYSE VZ T Mobile US Inc NYSE T and Sprint Corp NYSE S is another major concern AT T currently has a Zacks Rank 3 Hold Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
VZ | The Zacks Analyst Blog Highlights AT T Verizon Communications T Mobile US And Sprint | For Immediate Release
Chicago IL May 20 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 AT T NYSE T Inc Verizon Communications Inc NYSE VZ T Mobile US Inc and Sprint Corp
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Thursday s Analyst Blog
AT T Poised for Long Term Growth Despite Competition Woes
On May 18 we issued an updated research report on U S telecom behemoth AT T Inc
AT T reported strong financial results in the first quarter of 2016 with both the top and the bottom line beating the Zacks Consensus Estimate However the company s U S postpaid wireless subscriber addition of 129 000 was down a significant 70 7 year over year
Nonetheless prospects of better earnings and revenues over the long haul from the DIRECTV NASDAQ DTV purchase are bright From 2016 to 2018 AT T expects consolidated revenue growth to be in line with GDP growth or higher while adjusted earnings per share growth is projected in the mid single digit range
With its combination of U Verse DIRECTV s satellite TV and an all fiber GigaPower Internet service AT T now has the operational flexibility to provide traditional cable TV service as well as mobile video streaming service to users
In March the company announced plans to offer a version of its DIRECTV satellite TV service through the Internet which would not require customers to have a satellite dish set top box or annual contract The company will be offering three affordable video plans in order to appeal to all types of viewers ranging from those who want the full package to a streamlined bundle
We believe that the new endeavor will help AT T attract cord cutters and boost revenues Also offering of two year guaranteed pricing for its new DIRECTV home internet and digital phone customers is expected to aid in expansion of its satellite offering in the residential services segment
AT T has revealed plans to field test the next gen 5G technology If the company succeeds to bring 5G to the U S market before any of its peers its quest to be the numero uno in the domestic market will definitely see a positive direction
Further the company stands to benefit hugely from initiatives in the Internet of Things IoT space and investments in the Mexican telecom market and fiber arena
However AT T has increased the prices of its voice and U verse video services because of rising operating costs especially in programming and service delivery as well as increasing content costs This may impact subscriber retention in the near term
Additionally a saturated wireless market spectrum crunch and regulatory risks remain potent headwinds Moreover intensifying competition in the U S wireless market from peers like Verizon Communications Inc T Mobile US Inc and Sprint Corp is another major concern
AT T currently has a Zacks Rank 3 Hold
Today Zacks is promoting its Buy stock recommendations
About Zacks Equity Research
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VZ | Verizon VZ Q2 Results Likely To Be Hit By Labor Unrest | Yesterday Lowell McAdam CEO of Verizon Communications Inc NYSE VZ warned that the company s second quarter 2016 financial results may be affected by the ongoing strike of its wireline and cable TV workers which started from Apr 13 2016 Verizon and the striking unions The Communications Workers of America CWA and International Brotherhood of Electrical Workers IBEW are currently at a stalemate over a new 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 However nothing fruitful has emerged so far The CWA said nearly 40 000 workers have gone on strike The company however asserted that it is fully prepared for a strike and has trained thousands of its non union employees to tackle the situation Verizon has guaranteed full uncompromised service to its customers during the strike period Despite this alternative arrangement it seems that all is not going well with the company 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 The situation may become even worse going forward if the strike continues for an indefinite period of time 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 Only time will prove how sound the company s Business Continuity Plans are to overcome such adversities Verizon currently carries a Zacks Rank 3 Hold Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
VZ | Dycom Industries DY Q3 Earnings Revenues Beat Up Y Y | Dycom Industries Inc NYSE DY posted an earnings beat in the third quarter of fiscal 2016 after a miss in the preceding quarter The specialty contracting services provider reported adjusted earnings per share of 1 08 in the quarter crushing the Zacks Consensus Estimate of 75 cents by 44 Also the bottom line witnessed 86 2 growth compared with the year ago tally of 58 cents per share Investors cheered the stellar earnings performance as the stock rallied 11 4 to close at 80 80 in after hours trading on May 24 The bottom line performance was strongly supported by the robust top line growth and diligent operational initiatives undertaken by the company Inside the HeadlinesDycom s third quarter fiscal 2016 contract revenues came in at 664 6 million up 35 year over year Also the top line comfortably surpassed the Zacks Consensus Estimate of 598 million by 11 1 Contract revenues grew 28 7 on an organic basis Acquisitions too added 30 8 million in revenues significantly supplementing the revenue stream Extensive deployment of 1 Gigabyte wireline networks by major customers and increasing rollout of fiber by cable operators in small and medium businesses drove the top line Solid performance across the majority of business lines including engineering design and aerial and underground construction services and healthy inorganic growth also added to revenues The company reported non GAAP adjusted earnings before interest taxes depreciation and amortization EBITDA of 91 9 million for the quarter compared with 63 0 million recorded a year ago LiquidityDycom exited the quarter with cash and cash equivalents of 19 3 million compared with 21 3 million as of Jul 25 2015 The company s long term debt was 723 9 million as of Apr 23 2016 compared with 521 8 million as of Jul 25 2015 GuidanceDycom issued an outlook for fourth quarter fiscal 2016 wherein adjusted earnings per share are projected in the range of 1 45 1 60 and revenues within 750 780 million The Zacks Consensus Estimate for fourth quarter fiscal 2016 earnings is currently pegged at 1 36 per share well below the company s guided range but will likely be revised downward in the future Our TakeWe believe that over the past few quarters Dycom s top line has benefited significantly from favorable industry trends which are boosting client spending The deployment of fiber to the home and fiber to the node technologies by major telecom operators to enable video offerings and 1 gigabit high speed connections are opening up significant growth opportunities for the company Going forward we believe that the significant investments in wireline networks cable capacity projects and the ongoing Connect America Fund II project will help Dycom maintain its growth momentum Also the company s diligent capital expenditure strategy has supplemented organic revenue growth over the past twelve months We also believe that investments made in assets will boost operating efficiency accelerating the delivery of backlogs which in turn bodes well for long term growth This apart an enviable client list including telecom biggies like AT T Inc NYSE T CenturyLink NYSE T and Verizon Communications Inc NYSE VZ and healthy backlog levels work in favor of this Zacks Rank 2 Buy company |
VZ | France s Iliad challenges Sprint for control of T Mobile | By Soyoung Kim and Leila Abboud PARIS NEW YORK Reuters French telecommunications company Iliad SA PA ILD has made a surprise offer for T Mobile US Inc N TMUS setting up a potential bidding war with Sprint Corp N S the U S mobile carrier now controlled by Japan s Softbank Corp T 9984
Iliad which has shaken up the French mobile and broadband market in the past decade with its cheap pared down subscriber plans bid 15 billion in cash for 56 6 percent of T Mobile US at 33 per share it said in a statement on Thursday
The Paris based company said its offer for the fourth largest U S carrier values all of T Mobile at 36 20 per share a premium of 42 percent over the pre announcement share price
That is less than the roughly 40 per share Sprint agreed to pay under the broad terms of an agreement worked out with Deutsche Telekom AG DE DTEGn T Mobile s majority owner The terms of that proposal which followed months of talks and which was reported by Reuters in early June would value T Mobile at nearly 32 billion
Deutsche Telekom and Sprint declined to comment and a representative for Softbank could not be reached
Despite Iliad s lower offer a person close to the French company said founder Xavier Niel believes he has a strong card to play because his bid would not face the antitrust scrutiny that confronts Sprint in trying to merge the third and fourth biggest U S mobile operators
SoftBank has been told in many very clear coded words that the Department of Justice and the FCC would probably not approve the acquisition said Reed Hundt a former chairman of the U S Federal Communications Commission There s no question to me that the FCC would say bienvenue to the proposed Iliad deal
The FCC and Department of Justice expressed a desire earlier this year to have at least two more network operators competing against AT T and Verizon
The T Mobile offer is Niel s most audacious attempt at extending his reach beyond France Monaco and Israel where he owns part of operator Golan Telecom Still his bid to enter the United States mobile market is a long shot some investors and analysts say
The French company specializes in broadband and lacks experience in mobile T Mobile s main business having launched its mobile service only in 2012 It is also unfamiliar with the demands of competing in the United States with its massive coverage needs and deep pocketed competition from AT T Inc N T and Verizon Communications Inc N VZ the market leaders
Iliad expects 10 billion in savings from the deal although it is unclear where they would come from because the company has no U S operations
The Iliad offer could falter on price alone said Joseph Mastrogiovanni and Michael Baresich analysts at CreditSuisse
We are sceptical that T Mobile and its shareholders including Deutsche Telekom will find this bid attractive they wrote in a research note However it could put pressure on Sprint to move sooner rather later
EMPIRE BUILDING
Few doubt the scale of Neil s ambitions The entrepreneur an unknown outsider in France when he started out has joined the elite lunching with ministers starting a tech school and holding part ownership of the influential Le Monde newspaper
He earned his first fortune from an adult chat and dating service on the Minitel a rudimentary computer network that pre dated the Internet in France He then surfed on a wave of market liberalisation in telecoms to create Iliad
In many ways Niel is similar to Masayoshi Son the head of Softbank and his rival for T Mobile US Both have operated their companies as challengers who cut prices and take on larger rivals with bigger resources
Niel sees the U S market as ripe for the kind of challenge Iliad mounted in France where its entry into the mobile market in 2012 sent prices down 30 percent and hurt the profits of bigger rivals Orange SA PA ORAN and SFR as well as Bouygues SA PA BOUY He ranks 133rd on Forbes list of billionaires with a net worth of 9 5 billion
Son who is also Sprint s chairman has pledged to start a price war in the United States and he has said industry consolidation would allow Sprint to compete more effectively against Verizon and AT T He owns 19 3 percent of Softbank and is 46th on the Forbes list with a net worth of 18 4 billion
T MOBILE TURNAROUND
T Mobile would appear well suited for the role of challenger championed by Niel and Son Last year it turned around years of subscriber losses using a strategy that eliminated contracts restructured plans and set off a race to slash prices across the industry
Earlier on Thursday T Mobile posted a net profit after a year of losses and reported the industry s largest post paid phone subscriber additions of the quarter
T Mobile Chief Executive Officer John Legere known for his outspoken and sometimes abrasive style has come to define T Mobile s new audacity epitomized by his frontal attacks on competitors offering to pay early termination fees for customers who defect from rivals for example
We know this is a scale industry Scale brings advantage T Mobile Chief Financial Officer Braxton Carter told Reuters earlier on Thursday
What we ve seen so far is a glimpse of what real competition in this industry looks like If we could turbo charge it it could be an incredible opportunity to bring more competition to the market
BIG BITE FOR ILIAD
Iliad said it would finance its offer which was earlier reported by the Wall Street Journal through a mix of equity and debt and that it already had the backing of unnamed international banks
Nevertheless the deal would be a big bite for Iliad Its market capitalization of just above 16 billion compared with about 25 billion for T Mobile US
T Mobile owner Deustsche Telekom will now have the benefit of two bidders
A person at Deutsche Telekom familiar with the talks also said a deal with Iliad had a certain appeal because of the lower risk of being blocked by U S regulators
Three years ago regulators rejected AT T s 39 billion bid for T Mobile US which resulted in AT T paying Deutsche Telekom T Mobile s full owner a reverse break up fee of 6 billion in cash and U S mobile assets
T Mobile shares closed up 6 5 percent at 32 94 on the New York Stock Exchange Sprint shares were down 5 3 percent at 7 35
Reporting by Edwin Chan in San Francisco Supantha Mukherjee in Bangalore Marina Lopes Diane Bartz and Alina Selyukh in Washington Harro Ten Wolde and Peter Maushagen in Frankfurt Writing by Frank McGurty Editing by Bernadette Baum Greg Mahlich Tom Brown and Andre Grenon |
VZ | T Mobile deal collapse could spark telecom price war | By Marina Lopes WASHINGTON Reuters Sprint Corp s N S newly appointed Chief Executive Marcelo Claure has so far had a Midas touch in the telecoms industry turning Brightstar a reseller of U S handsets to Latin America into a distributor valued at 2 2 billion when it was sold to Japan s SoftBank T 9984
But his talents will now be put to the test like never before as he must complete the No 3 carrier s network upgrade while trying to retain customers who are defecting in droves
We are talking about billions of dollars of capital spending in front of this company before the network is ready MoffettNathanson analyst Craig Moffett said noting that Sprint likely has to cut prices to compete with the industry s top players
Unfortunately raising capital spending and cutting prices at same time is recipe for a very ugly financial situation
Some analysts fear that Sprint s decision to give up its dream of merging with T Mobile US Inc N TMUS could lead to a wider price war as the top carriers slug it out in a nearly saturated market
Without the ability to compete on scale they are going to have to compete on price so the two smaller competitors may become increasingly desperate to maintain market share and could become irrational in pricing which could cause disruptions in pricing in the industry said Mark Stodden analyst at Moody s Investors Service
Sprint might follow the lead of T Mobile which added more subscribers than all of its competitors combined in the first quarter through aggressive promotions and campaigns that addressed customer frustrations with the industry
Sprint could take the same road and try to compete more aggressively on price which could have the effect of restarting subscriber growth said Matthew Goodman analyst at ITG Investment Research who saw few short term alternatives
SUPERIOR NETWORK IN THE WORKS
Sprint long the industry s technological weakling has not been sitting on its laurels It has invested 5 billion to upgrade its much maligned network in a transformation likely to trickle down to customers by the end of next year
Sprint s new network should allow the company to combine the vast and spectrum it obtained from a 2013 acquisition of Clearwire Corp with its other radio wave holdings This has created a superior high speed offering known as Sprint Spark which analysts say should be the best in the industry
Still even more investment is needed to make Sprint s network competitive with those of other top carriers Spark is only available in 24 cities and its goal is to reach 100 U S cities by 2016
The challenge will test the abilities of Claure a Bolivian born billionaire who got his start distributing cellular handsets from U S manufacturers in Latin America Brightstar which he founded in 1997 distributes phones to companies in the United States and elsewhere SoftBank acquired the company in January
They still obviously need a lot of network expertise and they have that But having someone in charge who is more marketing oriented coincides with the chief executive of SoftBank s outlook said Bill Menezes an analyst at Gartner referring to Japanese tycoon and Sprint Chairman Masayoshi Son
Masa is known for innovating pricing and marketing in Japan He needs people to make Sprint their first consideration said Menezes
Claure will have to shed Sprint s image as a lower quality provider at a premium cost But discounting especially to add market share as the new network is being phased in is likely to reduce profit margins as well
While AT T Inc N T and Verizon Communications Inc N VZ have established reputations and T Mobile has been plugging away at its Un carrier brand for a year Sprint has struggled to communicate what it stands for said Jan Dawson of Jackdaw Research
Perception tends to lag reality by good couple years said Dawson Non customers really have a poor sense of network quality Even if Sprint starts to deliver better performance it will take time for people to realize that he said
Reporting by Marina Lopes Editing by Richard Chang |
VZ | T Mobile CEO expects to unseat Sprint as No 3 carrier | By Marina Lopes WASHINGTON Reuters T Mobile US N TMUS will overtake Sprint Corp N S as the No 3 wireless U S carrier in subscribers by the end of the year Chief Executive John Legere tweeted on Thursday
The declaration came a day after T Mobile said it surpassed Sprint as the No 1 wireless provider for prepaid customers with 15 64 million users compared with Sprint s 15 19 million
The figures put T Mobile which calls itself the uncarrier well ahead of rivals AT T N T and Verizon N VZ in the prepaid market Verizon and AT T hold a larger share of the more profitable postpaid U S subscriber base
I predict the uncarrier will overtake Sprint in total customers by the end of the year There I said it tweeted Legere
A spokeswoman for Sprint declined comment
While T Mobile has been adding record numbers of subscribers through promotions and campaigns Sprint customers have been leaving in droves because of service problems arising from carrier s network overhaul
Earlier this week Sprint s parent company SoftBank Corp T 9984 walked away from its offer to buy T Mobile and replaced Sprint CEO Dan Hesse with Miami businessman Marcelo Claure
Legere known for his outspoken style did not waste time in engaging with his new competitor and tweeted at Claure on Thursday Sorry marceloclaure you re already behind
While T Mobile s aggressive strategy has helped the company turn around its parent company Deutsche Telekom T 9984 has been concerned that its lack of low frequency spectrum and fixed line infrastructure is hampering its ability to compete
The company will have to spend an estimated 5 billion to 10 billion in the upcoming auction of radio frequency waves according to one analyst the first public auction of valuable low frequency airwaves in nearly a decade
T Mobile shares were down 4 3 percent and Sprint shares were down 0 8 percent after falling nearly 20 percent on Wednesday
Reporting by Marina Lopes Editing by David Gregorio |
VZ | Dividend payers attractive again as bond yields fall | By Caroline Valetkevitch NEW YORK Reuters Investors once again are snapping up high dividend paying U S stocks as Treasury yields fall which should keep utilities and telecom stocks near the top of the buying list for the near future
The S P 500 utility sector whose dividend yield at 3 9 percent is more than 100 basis points above the 10 year Treasury yield led the S P 500 s advance on Friday after concern about the launch of U S air strikes on Iraq drove the benchmark bond yield to 14 month lows
The equity market recovered from early losses in part due to news that Russia s Defense Ministry said military exercises near the Ukraine border had ended Any global worries that keep a bid in government debt meanwhile will motivate investors to go after stocks with fat dividend yields
The utility sector is up 8 8 percent since Dec 31 the third best performing sector for the year following technology and health care Telecom hasn t been as strong gaining just 0 8 percent in the same period but two of that sector s constituents Windstream Holdings O WIN and Frontier Communications O FTR have both gained roughly 40 percent
Utilities hit a bout of profit taking after ending the first half of the year in the No 1 spot The sector had risen 16 4 percent as of June 30 bolstered in part by the shares high yields and the appeal of a safer sector at a time when investors were still a bit worried about economic growth
Analysts say the attractiveness of high dividend paying sectors such as utilities is not likely to end soon especially with valuations still below the benchmark s level The forward price to earnings ratio for S P utilities is at 14 9 below the S P 500 s p e of 15 2 Thomson Reuters data showed
The U S 10 year is an attractive yield given the backdrop of very weak yields around the world Therefore that does make the dividend paying sectors increasingly attractive That s been the footprint for this market said Quincy Krosby market strategist at Prudential Financial based in Newark New Jersey
Overseas turmoil particularly in Ukraine has driven up demand for safe haven bonds also supported by the Federal Reserve s continued purchase of Treasuries while it gradually pares back its bond buying program
The S P 500 utility sector shot up 2 percent on Friday its biggest daily percentage gain since June Earlier this week the index flirted with correction territory as it lost nearly 10 percent from a high set June 30
Also benefiting from the drop in bond yields are exchange traded funds tied to dividend payers including the Powershares Dividend Achiever exchange traded fund P PFM which rose 1 3 percent on Friday and is up 3 2 percent for the year
The First Trust Morningstar Dividend Leaders Index Fund P FDL has performed better gaining 1 2 percent on Friday and up 6 percent for the year so far
The S P telecommunications index has an even higher dividend yield than utilities at 4 7 percent though a smaller pool of stocks The sector has been weak this year because of a lackluster performance by its biggest names AT T N T and Verizon N VZ
However network communications company Windstream Holdings has a dividend yield of 9 percent the highest in the S P 500 while Frontier Communications is third highest with a yield of 6 2 percent according to Thomson Reuters data Those compare with the S P 500 s dividend yield of 2 4 percent They have gained 40 percent and 37 percent this year respectively
Where yield lies is where investors are continuing to go because there continues to be no alternative from other income producing securities said Mark Luschini chief investment strategist at Janney Montgomery Scott in Philadelphia
Reporting by Caroline Valetkevitch Editing by Leslie Adler |
VZ | U S to review rates for telecom special access lines | WASHINGTON Reuters U S telecommunications regulators will review rates at which telecommunications providers sell high capacity data and voice connections known as special access lines to businesses the Federal Communications Commission said on Monday
Many businesses rely on special access lines to transmit large amounts of data quickly for instance connecting banks to ATM machines
The services are highly lucrative for large carriers such as Verizon Communications Inc N VZ and AT T Inc N T Smaller carriers such as Sprint Corp N S have argued the special access market is uncompetitive
The FCC has now received approval from the Office of Management and Budget to begin collecting information from providers and some purchasers of special access connections on the rates terms and conditions of the services
The FCC will then determine whether the industry is competitive or needs regulation The FCC will begin collecting special access information for 2013 from companies by the end of this year an agency spokesman said
We will move forward with data collection and fact based analysis that will help the Commission better understand competition in this marketplace and the impact on consumers as we pursue the Commission s statutory mandate to ensure special access services are provided at reasonable rates and on reasonable terms and conditions FCC Chairman Tom Wheeler said in a statement
The FCC sought permission last year to collect information about the market from the OMB which analyzes the potential economic consequences of proposed actions by regulatory agencies and studied whether benefits of data collection outweighed its burdens
Reporting by Alina Selyukh and Marina Lopes Editing by Andre Grenon |
VZ | Sprint cuts rates CEO says more new plans to come | By Marina Lopes and Carey Gillam OVERLAND PARK Kan WASHINGTON Reuters Sprint Corp N S on Monday unveiled a new pricing plan that offers customers 20 gigabytes of data and up to 10 lines for 100 doubling its data offerings the latest in a string of price cuts and promotions sweeping the wireless industry
Sprint s chairman business tycoon Masayoshi Son is betting new prices will revive a carrier hampered by an expensive network overhaul and rising competition
The message is simple We are back in the game We are going to offer most competitive value for American consumers Marcelo Claure Sprint s newly appointed chief executive told Reuters in an interview
The company will release new plans for individuals later this week
The announcement marks the first move for the new CEO who last week said cutting prices would be his top priority
The move comes after Verizon slashed prices for its unlimited talk and text plan and T Mobile expanded its family plan to 6 lines and could signal more price cuts ahead for the industry as a whole
Sprint is going it alone after scuttling a months long effort to pursue a merger with No 4 U S cellular provider T Mobile US Inc N TMUS
Last year an aggressive campaign by T Mobile to address subscriber frustrations and lower prices sparked a domino effect that caused the U S top four carriers to restructure pricing plans and cut rates to lure customers in a nearly saturated market
But analysts worry the industry s latest discount spree could increase pressure on already tight margins and rattle dividends
While top carriers AT T N T and Verizon N VZ have largely been able to mitigate the impact of T Mobile s discounts on their subscriber base they would likely have to respond to price cuts at Sprint with steep discounts of their own to keep subscribers from migrating analysts said
We will see a trickle down in pricing concessions across the industry This is the start of a price war many anticipated would be coming said Angelo Zino analyst at S P Capital IQ
New pricing plans that charge customers separately for the cost of their devices have somewhat offset price cuts this year Zino said but if the discounts continue they could pose a long term threat to the dividends
Son CEO of Sprint s parent company SoftBank Corp T 9984 said earlier this year he wants to start a massive price war in the United States and warned that with Claure as CEO price competition will likely heat up
But many question whether Sprint with 27 billion in net debt according to the company s latest filings is in a financial position to fuel a price war with its competitors
Do they have the balance sheet Not really but the good news is that they have a major investor in SoftBank so they have the potential to get more aggressive said Zino
Reporting by Marina Lopes in Washington and Carey Gillam in Overland Park Kansas editing by G Crosse |
XOM | More on Exxon s climate problems | ExxonMobil NYSE XOM contributed to advancing climate science by way of its scientists academic publications but promoted doubt about it in advertorials Harvard University researchers wrote in the Environmental Research Letters journal
Given this discrepancy we conclude that ExxonMobil misled the public
The findings could add fuel to lawsuits brought against the world s largest oil explorer by market value
Now read |
XOM | Harvard researchers say Exxon misled public on climate science | By Emily Flitter NEW YORK Reuters Two Harvard University researchers said in a study published on Wednesday they had collected scientific data proving Exxon Mobil Corp NYSE XOM made explicit factual misrepresentations in newspaper ads it purchased to convey its views on the oil industry and climate science In an article in the journal Environmental Research Letters researchers Geoffrey Supran and Naomi Oreskes said they examined 187 documents including internal memos peer reviewed papers by Exxon scientists and New York Times advertorials paid advertisements in the style of opinion pieces They said they used a social science analysis method to turn statements in the documents into data points that could be counted and compared to each other Supran and Oreskes said that while as early as 1979 Exxon scientists acknowledged burning fossil fuels was adding more carbon dioxide to the atmosphere and causing global temperatures to rise the company s position in newspaper ads remained significantly different by consistently asserting doubt about climate science Exxon spokesman Scott Silvestri said the researchers study was inaccurate and preposterous and that their goal was to attack the company s reputation at the expense of its shareholders Our statements have been consistent with our understanding of climate science he said In an interview on Tuesday Oreskes said the impetus for the study came from Exxon s responses to reports in InsideClimate News and the Los Angeles Times in September 2015 and October 2015 respectively that Exxon s scientists had long known of the dangers fossil fuels posed to the earth s climate They accused the journalists of cherry picking Oreskes said of Exxon s responses They also posted a collection of documents on their website They said read the documents and make up your own mind We thought that was an excellent opportunity Oreskes and Supran pointed to ads such as a 1997 Mobil article that read Let s face it The science of climate change is too uncertain to mandate a plan of action that could plunge economies into turmoil A 2000 advertorial said a U S government report on climate change put the political cart before the horse and was based on unreliable models In his statement on Wednesday Silvestri offered two examples from New York Times advertorials that Exxon bought both published in the year 2000 which he said showed the company did not try to cast doubt on climate change
Enough is known about climate change to recognize it may pose a legitimate long term risk and that more needs to be learned about it one statement read |
XOM | Oil steady after U S crude stockpiles drop traders watch Gulf of Mexico storm | By Henning Gloystein SINGAPORE Reuters Oil was steady on Thursday holding gains from the previous session after another fall in U S crude inventories indicated a tighter market and as a tropical storm was heading for oil producing facilities in the Gulf of Mexico Brent crude futures LCOc1 the international benchmark for oil prices were at 52 58 per barrel at 0658 GMT up 1 cent from their last close U S West Texas Intermediate WTI crude futures CLc1 were at 48 36 a barrel down 5 cents Both crude futures contracts rose more than 1 percent on Wednesday also buoyed by potential output disruptions from the Gulf of Mexico storm For the next few days the U S market is going to be focused on Texas as the tropical depression Harvey is expected to strengthen into a Category I hurricane by Friday said Sukrit Vijayakar director of energy consultancy Trifecta in a note Operators in the area are already closing down platforms and evacuating workers as a precaution he added Harvey strengthened into a tropical storm late on Wednesday night with winds of about 40 miles per hour 65 km per hour and was located about 440 miles 705 km southeast of Port Mansfield Texas the U S National Hurricane Center reported Royal Dutch Shell LON RDSa Anadarko Petroleum NYSE APC and Exxon Mobil NYSE XOM have all taken steps to curb some oil and gas output at platforms in the Gulf the companies said Wednesday Beyond the weather traders said that ongoing declines in U S commercial crude storage levels were a sign of a gradually tightening market although another rise in output held the market back they said Another strong drawdown in U S crude oil inventories should see oil prices well supported ANZ bank said although it added that there was a hint of cautiousness with U S oil output continuing to push higher U S oil production hit 9 53 million barrels per day bpd last week the highest level since July 2015 and up over 13 percent from their most recent low in mid 2016 Despite this U S crude stocks fell last week and gasoline stocks were down as well the Energy Information Administration said on Wednesday
Crude inventories fell by 3 3 million barrels in the week ending August 18 to 463 17 million barrels down 13 5 percent from their record levels last March |
XOM | Shell Anadarko Exxon cut Texas Gulf coast production ahead of storm | Royal Dutch Shell LON RDSa RDS A RDS B Anadarko Petroleum NYSE APC and Exxon Mobil NYSE XOM say they are curbing some oil and gas production at facilities in the Gulf of Mexico and on the Texas Gulf coast in preparation for tropical storm Harvey
As of 7 a m the NOAA measured tropical storm force winds at a maximum speed of 60 mph and the storm may strengthen into a Category 1 hurricane by the time it makes landfall near Corpus Christi on Friday
The storm is expected to linger over the area for days bringing a dangerous combination of rainfall and storm surge flooding to areas near the Texas and Louisiana coasts into the weekend or early next week
Crude oil prices are steady so far today after rising yesterday
ETFs USO OIL UWT UCO DWT SCO BNO DBO DTO USL DNO OLO SZO OLEM OILK WTIU OILX WTID USOI
Now read |
XOM | Wall Street s favorite weatherman says Harvey could cause historic flooding | Tropical storm Harvey will become a Category 2 hurricane late today says Weather com s Dan Leonard as the storm grows stronger and more quickly than many meteorologists had been forecasting Historic flooding from Houston to San Antonio is very possible drenching the area for 4 5 days says Leonard a top weather advisor to commodity traders and hedge fund managers Magellan Midstream Partners MMP 0 4 says it has suspended operations at its terminal and condensate splitter in Corpus Christi Tex and Citgo reportedly is shutting down its refinery Shell LON RDSa Anadarko and Exxon NYSE XOM already have said they are cutting production at some of their area facilities ETFs USO UNG OIL UGAZ UWT UCO DGAZ DWT SCO BNO BOIL DBO GAZ UGA DTO USL KOLD UNL DNO OLO SZO DCNG OLEM OILK WTIU OILX WTID USOI GAZB Now read |
CSCO | Cisco Systems CSCO Gains As Market Dips What You Should Know | Cisco Systems NASDAQ CSCO closed the most recent trading day at 47 34 moving 0 11 from the previous trading session The stock outpaced the S P 500 s daily loss of 0 22 Elsewhere the Dow lost 0 11 while the tech heavy Nasdaq lost 0 25
Heading into today shares of the seller of routers switches software and services had gained 3 37 over the past month outpacing the Computer and Technology sector s gain of 1 37 and lagging the S P 500 s gain of 3 57 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 Our most recent consensus estimate is calling for quarterly revenue of 12 38 billion up 4 11 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
Investors should also note any recent changes to analyst estimates for CSCO Recent revisions tend to reflect the latest near term business trends As a result we can interpret positive estimate revisions as a good sign for the company s business outlook
Based on our research we believe these estimate revisions are directly related to near team stock moves 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
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 Within the past 30 days our consensus EPS projection has moved 0 86 higher CSCO is currently sporting a Zacks Rank of 3 Hold
Investors should also note CSCO s current valuation metrics including its Forward P E ratio of 15 68 Its industry sports an average Forward P E of 19 89 so we one might conclude that CSCO is trading at a discount comparatively
We can also see that CSCO currently has a PEG ratio of 2 48 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 was holding an average PEG ratio of 2 24 at yesterday s closing price
The Computer Networking industry is part of the Computer and Technology sector This group has a Zacks Industry Rank of 105 putting it in the top 41 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 |
VZ | Zacks Industry Outlook Highlights Verizon Communications AT T Sprint And T Mobile US | For Immediate Release
Chicago IL May 13 2016 Today Zacks Equity Research discusses the Telecom Part 3 including Verizon Communications Inc NYSE VZ AT T Inc NYSE T Sprint Corp and T Mobile US Inc
Industry Telecom Part 3
Link
Technological invention and innovation at a rapid clip have resulted in significant competition within the telecommunications industry Product life cycle and upgrade cycle have gone down drastically with several firms coming out with new versions of products and services back to back within a short span of time To combat competition firms are thus increasingly looking at consolidation This has resulted in an array of mergers and acquisitions in the telecom space
To add to that the Federal Communications Commission s FCC net neutrality laws have made matters worse for telecom operators Besides several ISPs Internet Service Providers are in a tight spot over the FCC s orders pertaining to increased upload and download speeds of Internet service termed broadband Stiff Competition
In the meantime the U S telecom market continues to witness intense pricing competition The two industry behemoths Verizon Communications Inc and AT T Inc at present command around 68 of the U S wireless market whereas Sprint Corp and T Mobile US Inc jointly control the remaining 32 These two relatively smaller firms are now bringing on board several low priced value added products to lure customers away from their larger peers In 2015 both Sprint and T Mobile US added a substantial number to its customer base
On the video services front the pay TV industry is facing severe competitive threats from low cost online video streaming service providers Cord cutting has become a regular phenomenon in the country with over the top video operators offering smaller packages of channels designed according to a customer s need at dirt cheap prices Established pay TV operators are now opting for the more customer friendly Internet TV service in order to counter the threat
Companies in the telecommunications industry continue with mergers and acquisitions Consolidation among the largest telecommunication services focused companies has created an environment where equipment focused companies have to contend with fewer customers and reduced selling opportunities This has prompted consolidation among equipment companies as well to enhance their marketing value by broadening product offerings for converged fixed mobile networks Net Neutrality A Major Concern
The net neutrality law adoption mandate by the FCC was announced on Feb 26 2015 per which high speed broadband Internet will now be classified as a public utility under Title II of the 1934 Communications Act instead of section 706 of the 1996 Telecom Act Importantly the latest regulations will be applicable to both mobile and fixed broadband networks The reclassification of Internet makes a radical change in the way the government treats high speed broadband services and ISPs The FCC can now strongly regulate the ISPs
Net neutrality implies an open Internet atmosphere which will prohibit ISPs especially telecom and cable TV operators from discriminating against applications In order to control the flow of bandwidth consuming applications such as video streaming the ISPs have been discriminating against several web based content and applications Content developers thus have to pay heavy sums to ISPs for accelerated data transfer
The implementation of the new law will ban common ISP malpractices such as data traffic blocking slowing down data traffic and paid prioritization Notably paid prioritization is a method through which content developers strike deals with ISPs for quick and smooth transmission of their data traffic The FCC will closely monitor and put a check on all such deals in the future Moreover the FCC will also supervise interconnection deals in which content developers pay ISPs to connect to their networks
Notably on Jan 29 2015 the FCC increased the download and upload speeds of Internet services to be deemed as broadband high speed data In a majority vote the FCC raised the new threshold download speed to 25 Mbps from the existing 4 Mbps while the same for upload has been boosted to 3 Mbps from the current 1 Mbps Weaknesses
In general telecommunications companies under pressure have high debt levels and large financial leverage ratios Moreover they are often unable to cope with recent market trends Other risks that pose threats are as follows
Potential Business Slowdown Sales fluctuations of carriers are expected to continue to weigh on capital spending decisions a major problem faced by equipment vendors The companies are expected to retain focus on improving their balance sheets financial discipline and free cash flow generation
Product Overlapping We may see more product sharing deals between telecom cable TV and satellite TV operators as each of these players are vying to grab a sizeable share in each other s territory Even pay TV services offerings to business enterprises mobile backhaul and metro Ethernet segments may witness more convergence Mobile phone makers are now gradually offering tablets and chipset manufacturers are providing chips for personal computers as well as mobile devices thus frequently interchanging their areas of operations
Intensified Competition Technological upgrades and breakthroughs have resulted in cutthroat price competition Product life cycle and upgrade cycle have been reduced drastically as several firms are coming up with new products and services within a short span of time Increasing competition is compelling players to offer heterogeneous and bundled services to retain their position in the space
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VZ | Cuban Shores Beckon US Telecom Operators VZ S TMUS T | President Barack Obama s decision to normalize U S diplomatic and economic relations with Cuba which has been considerably strained since 1961 is starting to show results Under his administration new Cuban policy regulations which have been approved by the Treasury and Commerce departments helped the U S telecommunications industry to gain initial exemptions from the existing embargo to invest in Cuba In Mar 2015 U S based IDT Corp had formed a joint venture with Cuba s state run telecom company Empresa de Telecomunicaciones de Cuba ETECSA to provide direct international long distance service In Sep 2015 Verizon Communications Inc NYSE VZ became the first U S telecom operator to offer roaming wireless services in Cuba Service charges are 2 99 per minute for voice calls and 2 05 per Mb for data The user must add Verizon s Pay As You Go International Travel facility to his her wireless handset to enjoy the roaming service while travelling in Cuba This service is offered through the network of Vodafone Group LON VOD Plc NASDAQ VOD Moreover in Mar 2016 Verizon entered into an agreement with Cuba s ETECSA to offer direct roaming mobile interconnection services between the two countries In Nov 2015 Sprint Corp NYSE S signed the first direct roaming wireless service agreement with ETECSA Earlier in Apr 2015 Sprint s prepaid service division Boost Mobile had launched an unlimited voice call and text message service plan to enhance connectivity between the U S and Cuba Starting at as low as 50 a month the plan allows Sprint s customers in the U S to make calls to Cuba without a long term subscription contract Recently T Mobile US Inc NYSE T has signed an interconnection and roaming wireless service agreement with ETECSA Notably T Mobile US serves the maximum number of customers in the U S who are of Cuban descent Approximately 36 6 of Cuban born U S wireless customers are subscribers of the company Therefore it is a logical step for this company to establish roaming wireless service in Cuba Meanwhile in Mar 2016 Reuters reported that AT T Inc NYSE T has shown its willingness for a mobile roaming agreement with ETECSA At present the company is extensively expanding in Mexico We believe in the long term Cuba may be a boon for U S telecom operators An opportunity to sell products to 11 million odd customers is something to reckon with Further with the waning of communism and the willingness to enter the economic and political mainstream Cuba is poised to become an attractive emerging market in the future Moreover Cuba s geographical proximity to the U S is a major positive from the cost of operations standpoint for these telecom operators |
VZ | U S Equity And Economic Review The Market Retreats From A High Again | This week s employment news was mixed Initial unemployment claims increased for the third consecutive week this time to 294 000 While some commentators argued that the Verizon Communications NYSE VZ strike caused this week s increase the DOL release did not specifically mention a primary cause This gain combined with last week s lower than expected employment report is cause for modest concern In contrast the JOLTs report was positive with more openings than hires This relationship is positive for wages it indicates not only that employees should have additional leverage in negotiating pay but also that employers will be more willing to increase salaries to keep current workers and attract new ones However JOLTs is a less significant report the recent increase in initial unemployment claims is more important
The week s best news however was the 1 3 increase in retail sales
The chart shows this data series moved sideways for the last year a potentially concerning pattern This makes the strong upside move all the more important The following table from the report shows broad based increases
All sectors save two building materials declined 1 while general stores sales were 0 were positive
The Atlanta Fed s GDPNow model which has been fairly accurate increased to a strong 2 8 in the second quarter But it s still too early to place too much emphasis on this report
Economic Conclusion It s possible the employment situation is weakening but we have insufficient data to draw a firm conclusion However weekly initial unemployment claims data has quickly risen in significance The retail sales report is very noisy so arguing that we ve seen a turnaround is premature But at minimum last week s strong number indicates the U S consumer is still willing to spend
Market Analysis This week two bond market charts provide the best explanation for the equity markets
The iShares 7 10 Year Treasury Bond NYSE IEF top chart and iShares 20 Year Treasury Bond NYSE TLT bottom chart are both forming pennant patterns at the top of rallies And both ETFs are about to break out to the upside indicating investors expect slower economic growth This conclusion does not support strong upside equity moves which partially explains this week s weaker equity performance starting with the transports
Three weeks ago the iShares Transportation Average NYSE IYT transports broke an uptrend Last week they crossed below the 200 day EMA and at the end of this week moved lower on increasing volume The Russell 2000s IWMs confirmed the move lower
The iShares Russell 2000 NYSE IWM are fluctuating around the 200 day EMA But the declining momentum implies they will continue moving lower which is bad news for the SPYs
For the third time in a year the SPDR S P 500 NYSE SPY couldn t break through the 210 212 price area Now they are moving lower currently using the 50 day EMA for technical support
With some 90 of S P 500 companies having reported first quarter earnings 71 have turned in bottom line numbers that are better than mean estimates according to FactSet However this may be more due to subdued expectations than improved performance
For first quarter 2016 the blended earnings decline is negative 7 1 The first quarter marked the first time the index has recorded four consecutive quarters of year over year declines in earnings since fourth quarter 2008 through third quarter 2009 said John Butters senior earnings analyst at FactSet
When viewed through a longer historical lens the latest market action is completely understandable The market is expensive it needs increasing revenue to continue rallying But that isn t happening Instead a strong dollar weaker overseas economies and oil market slowdown are lowering revenue growth This leads to the market selling off at higher valuation levels which is exactly what occurred last week And until corporate earnings meaningfully increase we can expect the cycle to occur again |
VZ | Verizon VZ To Resume Talks With Unions To End Labor Strike | Verizon Communications Inc NYSE VZ is willing to negotiate with workers unions representing its wireline and cable workers which went on strike from Apr 13 2016 The two sides will start talks today Last Sunday the U S Secretary of Labor Thomas Perez met with Verizon CEO Lowell McAdam and the heads of the two unions that represent Verizon s striking workforce requesting both sides to sit at the negotiation table to solve the problem Verizon and striking unions namely The Communications Workers of America CWA and International Brotherhood of Electrical Workers IBEW are currently at a stalemate over a new labor contract The company s wireline employees have been working out of contract since August last year The unions have alleged that Verizon is looking to freeze pensions and wants to ease the process of executing layoffs Moreover the union pointed out that Verizon seeks to rely less on its permanent workforce and more on contract based labor which will give it a higher degree of flexibility to manage its employee base Verizon and the unions representing workers from states such as Massachusetts Virginia New York and Rhode Island have been negotiating over the company s plan to cut healthcare and pension related benefits over a three year period The CWA said nearly 40 000 workers have gone on strike Verizon however announced that the figure is approximately 36 000 The company said that it is fully prepared for a strike and has trained thousands of its non union employees to cope with issues if any Verizon has guaranteed full uncompromised service to its customers during the strike period 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 Verizon is already facing 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 a catastrophe for the company Only time will prove how sound the company s Business Continuity Plans are to overcome such adversities Verizon currently carries a Zacks Rank 3 Hold |
VZ | 4 Best Ranked Touchstone Mutual Funds | As of Apr 30 Touchstone Investments managed 15 6 billion of assets excluding money market instruments invested in a wide range of mutual funds The mutual funds are managed by equity and fixed income funds as well as domestic and foreign funds The company seeks to help investors achieve their financial goals by providing access to a distinctive selection of institutional asset managers who are known and respected for proficiency in their specific area of expertise Touchstone provides financial services to its clients with around 18 sub advisors including Analytic Investors LLC and Apex Capital Management Inc
Below we share with you four top rated Touchstone mutual funds Each has earned a Zacks Mutual Fund Rank 1 Strong Buy and is expected to outperform its peers in the future To view the Zacks Rank and past performance of all Touchstone mutual funds investors can
Touchstone Mid Cap Value Y seeks growth of capital TCVYX invests a large chunk of its assets in common stocks of companies having market capitalization within the range of the Russell Midcap Index Touchstone Mid Cap Value Y gained 16 9 over the last three month period
Jay C Willadsen is one of the fund managers of TCVYX since 2014
Touchstone Dynamic Diversified Income A is a fund of funds TBAAX invests in a wide range of underlying mutual funds including both equity and fixed income focused mutual funds Most of the underlying funds in which TBAAX invests its assets are expected to be affiliated Touchstone Dynamic Diversified Income A gained 8 9 over the last three month period
TBAAX has an expense ratio of 0 49 as compared to the category average of 0 80
Touchstone Value A seeks capital appreciation over the long run TVLAX invests primarily in equity securities of mid and large cap companies The fund invests in securities of companies that are believed to be undervalued TVLAX may invest not more than 15 of its assets in securities of companies located in foreign lands Touchstone Value A gained 10 3 over the last three month period
As of March 2016 TVLAX held 46 issues with 3 57 of its assets invested in Verizon Communications Inc NYSE VZ
Touchstone Active Bond Y invests lion s share of its assets in bonds including government as well as corporate debt securities and mortgage related securities TOBYX may also invest a maximum of 20 of its assets in debt securities that are issued by foreign entities Touchstone Active Bond Y gained 1 4 over the last three month period
TOBYX has an expense ratio of 0 65 as compared to the category average of 0 82
To view the Zacks Rank and past performance of all Touchstone mutual funds investors can
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward Learn more about the Zacks Mutual Fund Rank at |
VZ | Verizon Q2 adjusted EPS 0 91 beats expectations for 0 90 | Investing com Verizon Communications NYSE VZ the largest mobile network operator in the U S reported better than expected second quarter earnings and revenue ahead of Tuesday s opening bell sending its shares higher in pre market trade
Verizon said adjusted earnings per share came in at 91 cents above expectations for earnings of 90 cents per share
The mobile network operator s second quarter revenue totaled 31 48 billion beating forecasts for revenue of 31 12 billion
The company said wireless retail net additions totaled 1 4 million in the second quarter
Lowell McAdam Verizon chairman and CEO said Verizon s second quarter results continue to demonstrate our ability to deliver strong customer growth with equally strong financial performance in a dynamic and competitive environment
Immediately after the earnings announcement Verizon NYSE 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 indicated a gain of 0 25 at the open the S P 500 pointed to a rise of 0 2 while Nasdaq 100 tacked on 0 3 |
VZ | Verizon revenues top estimates on wireless surge | By Marina Lopes Reuters Verizon Communications Inc the largest U S wireless telecommunications company on Tuesday reported better than expected quarterly revenue on a jump in wireless customers and a surge in tablet sales The increase in customers is a boost for Verizon which has been reluctant to follow rivals like T Mobile US Inc which have discounted aggressively Profit in the second quarter also topped Wall Street estimates Net additions of wireless subscribers with contracts surged 53 percent to 1 4 million in the second quarter ended June 30 That included a record 1 15 million in tablet sales Wireless companies have been weaning customers from plans that subsidize equipment financing over two years and offering plans that separate service charges from equipment purchases Verizon has not been aggressively promoting such plans and said only 18 percent of wireless customers signed up for them We want our customers to have choice We did not abandon the legacy model when we launched our installment plan as other carriers have said Fran Shammo Verizon s chief financial officer Two year pricing plans have long served as a natural buffer against customer switching according to Craig Moffett chief analyst at MoffettNathanson Verizon has maintained all along that the industry shouldn t be so quick to abandon a strategy that has served it awfully well for last decade said Moffett The risk is that the other carriers will continue to test lower and lower prices until the market finds a new equilibrium and that Verizon will be increasingly isolated at the high end of the market he added The company has focused on retaining customers who bring more monthly revenue and switching them to products such as smartphones and tablets that generate more profit Despite its premium prices the company has been able to reduce customer defections with an average rate of 1 25 percent compared with 1 37 percent last quarter Verizon s wireline revenue rose for the first time in seven years due to increased adoption of its FiOS internet and television products as well as the migration of customers from older copper lines to better performing fiber The company said it added 100 000 FiOS video customers and 139 000 net new FiOS Internet connections in the quarter Verizon shares edged up 0 3 percent at 50 85 The stock has risen about 3 percent so far this year underperforming the S P 500 which is up 7 4 percent Excluding items the company earned 91 cents per share in the quarter Analysts on average expected a profit of 90 cents per share on revenue of 31 12 billion according to Thomson Reuters I B E S Verizon s wireless revenue which accounts for more than two third of total revenue rose 7 5 percent due to strong growth in service revenue
Average monthly revenue per account rose 4 7 percent to 159 73 Reporting by Marina Lopes in Washington Additional reporting by Soham Chatterjee in Bangalore Editing by Kirti Pandey and Jeffrey Benkoe |
VZ | Sprint T Mobile merger not expected before September sources | By Marina Lopes Soyoung Kim and Liana B Baker WASHINGTON NEW YORK Reuters The long anticipated merger of Sprint Corp N S and T Mobile US Inc N TMUS is not expected to occur before September with the companies continuing due diligence and preparing a detailed case for a deal before U S regulators according to people familiar with the matter
Japan s SoftBank Corp T 9984 which controls Sprint and T Mobile owner Deutsche Telekom AG DE DTEGn have agreed to broad terms of a deal under which Sprint would pay around 40 per share for T Mobile valuing the smaller rival at nearly 32 billion Reuters reported in early June
Despite agreeing to other key terms such as break up fees the proposed transaction is taking extra time to finalize partly because the companies are keen to bulletproof their arguments for a merger that is sure to face heavy regulatory scrutiny two of the people familiar with the matter said on Tuesday
All the people asked not to be named because the discussions are private
Representatives for Deutsche Telekom could not be immediately reached for comment while representatives for Sprint T Mobile and SoftBank declined to comment
Analysts see the regulatory challenge as the biggest hurdle facing the companies since both the U S Federal Communications Commission FCC and Department of Justice DOJ have expressed a desire to have at least two more network operators competing against the market leaders AT T N T and Verizon N VZ
SoftBank Chairman Masayoshi Son has argued to U S regulators that a merger would give the companies leverage to compete against the two dominant rivals A combined Sprint T Mobile would boast more than 100 million subscribers still behind both Verizon and AT T
SoftBank is also likely to argue that the huge pending mergers of Comcast Corp O CMCSA with Time Warner Cable Inc N TWC and AT T with DirecTV O DTV would further marginalise Sprint and T Mobile
But top U S antitrust and communications enforcers have already warned that the wireless market is too concentrated In 2011 the Justice Department stopped a bid by AT T to buy struggling T Mobile
Others say recent approval of a merger between US Airways and American Airlines was a sign regulators could be convinced of the merits of a deal that reduces the number of competitors but creates a stronger number three
Reporting by Marina Lopes in Washington Soyoung Kim and Liana Baker in New York |
XOM | Crude oil futures weekly outlook August 21 25 | Investing com Oil prices settled sharply higher on Friday jumping about 3 in a surprise rally amid reports of a unit shutdown at one of the largest oil refineries in the U S as well as data showing a weekly fall in the number of active domestic oil rigs
Traders piled into crude contracts after reports surfaced that a unit at Exxon NYSE XOM Mobil s Baytown Texas refinery shut down The 584 000 barrel a day plant is the second largest refinery in the U S
The report surfaced ahead of an update from oilfield services firm Baker Hughes Friday morning showing its weekly count of oil rigs operating in the U S last week fell by five rigs to a total of 763
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand
Aside from supply and demand investors also bought up oil contracts amid a broader market rally sparked by Steve Bannon s departure from the White House
The U S West Texas Intermediate crude September contract surged 1 42 or around 3 to end at 48 51 a barrel It slumped to its lowest since July 25 at 46 46 a day earlier
Despite Friday s rally New York traded oil prices ended the week down 31 cents or nearly 0 6 its third such loss in a row thanks to heavy losses suffered mid week
Elsewhere on the ICE Futures Exchange in London Brent oil for October delivery soared 1 69 or about 3 3 to settle at 52 72 a barrel by close of trade For the week the global benchmark rose 62 cents or roughly 1 2
London traded Brent futures have been buoyed by recent signs that global supplies are tightening
OPEC and 10 producers outside the cartel including Russia agreed since the start of the year to slash 1 8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market
Elsewhere on Nymex gasoline futures for September rose 3 7 cents or about 2 3 to end at 1 634 on Friday It closed around 0 7 higher for the week
September heating oil finished up 3 8 cents or 2 4 at 1 620 a gallon ending roughly 0 9 lower for the week
Natural gas futures for September delivery shed 3 6 cents or 1 2 to settle at 2 893 per million British thermal units It saw a weekly loss of nearly 3
In the week ahead market participants will eye fresh weekly information on U S stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world s largest oil consumer
Meanwhile traders will also continue to pay close attention to comments from global oil producers for evidence that they are complying with their agreement to reduce output this year
Ahead of the coming week Investing com has compiled a list of these and other significant events likely to affect the markets
Tuesday August 22
The American Petroleum Institute an industry group is to publish its weekly report on U S oil supplies
Wednesday August 23
The U S Energy Information Administration is to release weekly data on oil and gasoline stockpiles
Thursday August 24
The U S government is set to produce a weekly report on natural gas supplies in storage
Friday August 25
Baker Hughes will release weekly data on the U S oil rig count |
XOM | Crude mixed in Asia in narrow ranges with rebalance views growing | Investing com Crude oil prices were narrowly mixed among the two main benchmarks on Monday in Asia with the market poised to accept a rebalancing in global supply and demand is underway but cutious on potential new supplies from produces such as Libya Nigeria and the U s upsetting those views
The U S West Texas Intermediate crude September contract edged up 0 02 to 48 67 a barrel
Elsewhere on the ICE Futures Exchange in London Brent oil for October delivery fell 0 04 to 52 70 a barrel London traded Brent futures have been buoyed by recent signs that global supplies are tightening
OPEC and 10 producers outside the cartel including Russia agreed since the start of the year to slash 1 8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market
Last week oil prices settled sharply higher on Friday jumping about 3 in a surprise rally amid reports of a unit shutdown at one of the largest oil refineries in the U S as well as data showing a weekly fall in the number of active domestic oil rigs
Traders piled into crude contracts after reports surfaced that a unit at Exxon NYSE NYSE XOM Mobil s Baytown Texas refinery shut down The 584 000 barrel a day plant is the second largest refinery in the U S
The report surfaced ahead of an update from oilfield services firm Baker Hughes Friday morning showing its weekly count of oil rigs operating in the U S last week fell by five rigs to a total of 763
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand
Aside from supply and demand investors also bought up oil contracts amid a broader market rally sparked by Steve Bannon s departure from the White House
In the week ahead market participants will eye fresh weekly information on U S stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world s largest oil consumer |
XOM | Oil starts the week on back foot amid U S production jitters | Investing com Oil prices drifted lower on Monday as concern over rising production in the U S dampened sentiment
Data from the U S Energy Information Administration showed last week that total domestic crude production edged up by 79 000 barrels a day to 9 5 million barrels its highest level since July 2015
That comes despite data showing that U S energy firms cut rigs drilling for new oil for a second week in three Drillers cut five oil rigs in the week to Aug 18 bringing the total count down to 763 oilfield services firm Baker Hughes said Friday
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand
The U S West Texas Intermediate crude September contract was at 48 52 a barrel by 3 25AM ET 0725GMT down 14 cents or around 0 3
Elsewhere Brent oil for October delivery on the ICE Futures Exchange in London shed 16 cents or about 0 3 to 52 58 a barrel
Oil prices settled sharply higher on Friday jumping about 3 in a surprise rally after reports surfaced that a unit at Exxon NYSE XOM Mobil s Baytown Texas refinery shut down The 584 000 barrel a day plant is the second largest refinery in the U S
Despite Friday s rally New York traded oil prices ended the week down 31 cents or nearly 0 6 its third such loss in a row In contrast London traded Brent futures notched a weekly gain of 62 cents or roughly 1 2
The global benchmark has been buoyed by recent signs that global supplies are tightening
OPEC and 10 producers outside the cartel including Russia agreed since the start of the year to slash 1 8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market
In the week ahead market participants will eye fresh weekly information on U S stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world s largest oil consumer
Elsewhere on Nymex gasoline futures for September declined 1 7 cents or nearly 1 1 to 1 605 a gallon while September heating oil slumped 0 9 cents or 0 6 to 1 610 a gallon
Natural gas futures for September delivery tacked on 0 9 cents or roughly 0 3 to 2 902 per million British thermal units |
XOM | Crude prices remain lower amid glut worries | Investing com Crude oil prices remained lower on Monday as concerns over U S oil production levels and a global supply glut persisted
The U S West Texas Intermediate crude September contract was at 48 55 a barrel by 9 00 a m ET 01 00 p m GMT down 13 cents or around 0 27
Elsewhere Brent oil for October delivery on the ICE Futures Exchange in London lost 25 cents or about 0 51 to 52 45 a barrel just off Friday s one week high of 52 96
Crude prices remained under pressure after U S government data this week revealed an increase in domestic production to the highest level in over two years
Oil prices weakened after data from the U S Energy Information Administration showed last week that total domestic crude production edged up by 79 000 barrels a day to 9 5 million barrels its highest level since July 2015
That comes despite data showing that U S energy firms cut rigs drilling for new oil for a second week in three Drillers cut five oil rigs in the week to Aug 18 bringing the total count down to 763 oilfield services firm Baker Hughes said Friday
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand
The commodity briefly rallied on Friday following reports a unit at Exxon NYSE NYSE XOM Mobil s Baytown Texas refinery shut down The 584 000 barrel a day plant is the second largest refinery in the U S
Elsewhere on Nymex gasoline futures for September slid 0 41 to 1 601 a gallon while September heating oil declined 0 94 to 1 605 a gallon
Natural gas futures for September delivery dropped by 0 2 cent or roughly 0 8 to 2 873 per million British thermal units |
XOM | Exxon needs to raise its dividend to boost stock Wells Fargo says | Exxon Mobil NYSE XOM needs to raise its dividend to lift the stock in any meaningful way as a bigger payout would signal to the market that lower for longer oil prices are no longer restraining cash returns Wells Fargo NYSE WFC analysts say
In an analyst lunch last Thursday XOM CEO Darren Woods offered no surprises Its top near term concern is that OPEC s production cuts are helping support the current oil price but while commodity prices will fluctuate XOM s discipline to high grade its projects across its segments reduces the risk of misallocated capital
Wells maintains its Market Perform rating and 82 price target on the stock as there is much to like about XOM but the near term drivers of valuation remain neutral based on our outlook estimates and forecasts
Now read |
CSCO | ETFs To Watch On Cisco s Solid Results | After the closing bell on Wednesday tech prime Cisco Systems NASDAQ CSCO reported robust fiscal 2019 first quarter results The networking giant topped estimates on both revenues and earnings and provided an upbeat outlook Results in DetailEarnings of 68 cents per share outpaced the Zacks Consensus Estimate by a couple of cents and improved from the year ago earnings of 55 cents Revenues rose 8 year over year to a record 13 1 billion and edged past the estimated 12 87 billion Robust results were driven by strong product sales across the board and all geographies Notably the networking gear company reported its fourth consecutive quarter of growth following eight quarters of declines 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 5 7 and earnings per share in the range of 71 73 cents in second quarter fiscal 2019 The mid point of both the ranges is above the Zacks Consensus Estimate of 4 82 for revenue growth and earnings of 71 cents per share see
If the networking giant could maintain its projected revenue growth throughout fiscal 2019 then it could top 50 billion in revenues for the first time in its history Buoyed by solid results and an encouraging guidance Cisco shares rallied as much as 5 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 45 American companies that provide telephone and Internet products services and technologies Cisco occupies the third position with 14 6 of the assets The ETF has AUM of 501 9 million and trades in average daily volumes of 474 000 shares It charges 43 bps in annual fees and has a Zacks ETF Rank 2 Buy with a Medium risk outlook read iShares North American Tech Multimedia Networking ETF SNX IGN This ETF provides concentrated exposure to domestic multimedia networking securities by tracking the S P North American Technology Multimedia Networking Index Holding 23 securities in its basket Cisco takes the second spot with an 8 8 allocation The product has accumulated 53 1 million in its asset base while seeing a lower volume of around 17 000 shares a day Expense ratio comes in at 0 47 The fund carries a Zacks ETF Rank 2 with a High risk outlook 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 874 4 million in its asset base and trades in moderate volume of about 79 000 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 second position making up roughly 8 4 of the assets read 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 733 9 million in its asset base The fund charges 60 bps in annual fees and trades in average daily volume of about 198 000 shares In total the product holds 38 stocks in its basket with Cisco taking the second spot at 6 5 read Invesco Dynamic Networking ETF This fund follows the Dynamic Networking Intellidex Index holding 29 securities in its basket Out of these Cisco is the third firm accounting for 5 5 share The fund is relatively unpopular and illiquid in the broad technology space with AUM of 69 4 million and average daily volume of about 5 000 shares It charges 63 bps in annual fees and has a Zacks ETF Rank 3 Hold 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 | Cisco Rises On Solid Quarter More Room To Run | Summary
Cisco Systems NASDAQ CSCO traded 6 higher on Thursday morning
The company posting earnings that beat Wall Street expectations for revenue and earnings demonstrating it was continuing to deliver on its software as a service business model
Given its positive technical patterns we see additional upside for this stock
The networking and telecommunications company reported earnings per share of 0 75 and total revenue of 13 1 billion compared to analyst estimates of 0 72 and 12 9 billion Cisco also nailed its guidance projecting 0 71 0 73 for Q4 with the average analyst estimating 0 72
Speaking of their competitive advantage CEO Chuck Robbins explained that We are fundamentally changing the industry We re building an architecture that is designed to securely connect any user on any device on any network to any application running anywhere
This stock has bucked a negative trend in the tech sector Looking at the market cycles for CSCO our analysis is that it is in the rising phase of its current cycle As it is early in this cycle we believe there is still room for the stock to run Our near term target is a test of recent highs near 50
For more from Slim or to learn about cycle analysis check out the askSlim Market Week show every Friday on our YouTube channel |
CSCO | Cisco Systems CSCO Stock Moves 1 29 What You Should Know | Cisco Systems NASDAQ CSCO closed at 45 75 in the latest trading session marking a 1 29 move from the prior day This change was narrower than the S P 500 s 1 66 loss on the day Meanwhile the Dow lost 1 56 and the Nasdaq a tech heavy index lost 3 03
Heading into today shares of the seller of routers switches software and services had gained 1 96 over the past month outpacing the Computer and Technology sector s loss of 5 28 and the S P 500 s loss of 2 43 in that time
Investors will be hoping for strength from CSCO as it approaches its next earnings release which is expected to be February 13 2019 The company is expected to report EPS of 0 72 up 14 29 from the prior year quarter Our most recent consensus estimate is calling for quarterly revenue of 12 37 billion up 4 03 from the year ago period
For the full year our Zacks Consensus Estimates are projecting earnings of 3 per share and revenue of 51 43 billion which would represent changes of 15 38 and 4 26 respectively from the prior year
Investors might also notice recent changes to analyst estimates for CSCO Recent revisions tend to reflect the latest near term business trends As such positive estimate revisions reflect analyst optimism about the company s business and profitability
Our research shows that these estimate changes are directly correlated with near term stock prices Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 The Zacks Consensus EPS estimate has moved 0 04 lower within the past month CSCO is currently sporting a Zacks Rank of 3 Hold
Investors should also note CSCO s current valuation metrics including its Forward P E ratio of 15 46 Its industry sports an average Forward P E of 19 58 so we one might conclude that CSCO is trading at a discount comparatively
It is also worth noting that CSCO currently has a PEG ratio of 2 44 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 CSCO s industry had an average PEG ratio of 2 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 108 putting it in the top 42 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 to buy OpenDNS for 635 million to boost security business | By Abhirup Roy Anya George Tharakan and Liana B Baker Reuters Cisco Systems Inc O CSCO said on Tuesday it would buy OpenDNS a privately held cloud based security firm for 635 million the latest move to boost its security business as cyber attacks increase in number and sophistication Cisco has been buying a number of security companies which has made its relatively tiny security business one of its fastest growing areas in the past two years OpenDNS uses predictive intelligence to block malware botnets and phishing threats that antivirus and firewalls miss Cisco was a minority investor and was one of the backers that invested 35 million in OpenDNS in May last year When Cisco buys stakes in startups it often receives defensive rights that give it an edge to acquire companies it has invested in ahead of competitors The acquisition of OpenDNS is Cisco s first after it said in May that veteran sales executive Chuck Robbins would replace John Chambers as CEO in July M A will continue to be an important part of what we do said Hilton Romanski Cisco s chief technology strategy officer adding that the M A strategy of being an active investor and potential acquirer will continue under Robbins The company whose security business is known for its firewalls expanded into intrusion detection and prevention systems with the 2 7 billion acquisition of Sourcefire in 2013 We re going to continue to focus on deals that allow us to complement what we ve done with Sourcefire in the area of intrusion prevention and we ll continue to look at malware and other key verticals inside the security domain Romanski said in an interview The global cybersecurity market is estimated to grow to 170 21 billion by 2020 from 106 32 billion in 2015 according to market research firm MarketsandMarkets Cisco s shares closed down 8 cents or 0 3 percent Tuesday Cisco which has acquired dozens of companies over the years is transitioning towards high end switches and routers and investing in new products such as data analytics software and cloud based tools for data centers It bought malware analysis company ThreatGRID in 2014 and security advisory firm Neohapsis this year San Francisco California based OpenDNS has partnerships with network gear makers such as Aruba Networks Inc and Netgear Inc O NTGR as well as cybersecurity companies such as FireEye Inc O FEYE
The acquisition is expected to close in the first quarter of fiscal year 2016 Cisco said in a statement |
CSCO | BlackBerry names Cisco veteran as global head of sales | By Euan Rocha TORONTO Reuters BlackBerry Ltd named Carl Wiese as head of global sales on Monday an appointment that comes at a critical juncture for the former smartphone leader which needs to spur top line growth for its turnaround efforts to succeed Wiese has spent the past 12 years at Cisco Systems Inc NASDAQ CSCO initially heading advanced technology sales and later Cisco s collaboration product sales efforts At BlackBerry he replaces John Sims as global head of sales BlackBerry did not provide any reasons for the departure of Sims who was at the company for about 18 months The move comes less than three weeks after BlackBerry posted weaker than expected sales growth from its software business in the first quarter ended May 30 BlackBerry Chief Executive Officer John Chen has built his turnaround plan around a software growth strategy hoping sales from device management software and fledgling areas like the so called Internet of Things can replace BlackBerry s traditional service fee structure and falling revenue from smartphone sales Chen has set a software revenue target of 500 million for the current fiscal year Although software revenue more than doubled year over year to some 137 million in the latest quarter much of the growth came from two patent cross licensing deals This spooked many analysts who were disappointed by the weaker than expected core software growth BlackBerry shares tumbled to a 13 month low on the Nasdaq last week BlackBerry shares were up 1 7 percent at 7 82 on Monday morning The company has also backed away from a separate 100 million target for revenue from its BlackBerry Messenger service leading to further concern about its ability to increase sales Some analysts have long been skeptical about the viability of BlackBerry s software revenue targets When Chen went over the sales targets at an analysts event in San Francisco last November and received pushback from some analysts he smiled and stated that if targets are not met he d still be around next year though some of his team might not The company declined to comment on whether Sims departure was tied to weaker than expected software revenue growth Chen indicated last month that he remains comfortable with the 500 million revenue target and noted that some of that growth is set to come from acquisitions The company is also widely expected to debut a new Android based smartphone before the end of the year to try to boost its hardware sales |
VZ | Jobs Friday Results | DOW 79 17 740SPX 6 2057NAS 19 473610 Y 03 1 78 OIL 29 44 61GOLD 10 10 1288 70
in April missing expectations of about 200 000 The unemployment rate held steady at 5 Employment gains for March and February meanwhile were reduced by a combined 19 000 The government said 208 000 new jobs were created in March instead of 215 000 February s gain was trimmed to 233 000 from 245 000
climbed 0 3 to 25 53 an hour a gain of 8 cents up from a gain of 6 cents per hour in March Hourly pay rose 2 5 in the past 12 months up from 2 3 reflecting a tighter labor market Inflation has been running at about 2 so workers are seeing real wage growth
Next week the Labor Department will announce that it s doubling the salary threshold under which virtually all workers will be eligible for overtime The current threshold is 23 660 As far back as 1940 it was common for presidential administrations to update the wage thresholds with 6 revisions over 35 years The outgoing Carter administration issued a rule to raise the threshold in 1980 but when Reagan took over revisions to increase the salary levels in 1981 were stayed indefinitely
It wasn t until 2004 23 years later that the Labor Department next raised the threshold and then only slightly to 23 660 Now the Labor Department plans to double the threshold to about 47 000 and to raise it automatically thereafter with inflation restoring the status quo that existed before the only US president ever to serve as a union leader took office
Since the start of the year we have started to see new most notably California Colorado Michigan and Massachusetts increased their minimum wages at the start of 2016 while Maryland and the District of Columbia are set to enact raises on July 1 In a first of its kind report researchers at the National Employment Law Project pore over employment data from every federal increase since the minimum wage was first established making simple before and after comparisons of job growth trends 12 months after each minimum wage increase
What did the researchers find The paper s title says it all Raise Wages Kill Jobs Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels They found that 68 percent of the time total jobs went up across the economy Retail jobs increased 73 percent of the time Hospitality employment rose 82 percent of the time The researchers say business cycles explain the instances when employment fell Each of those times they write the economy had entered or just come out of a recession or was about to enter one
While there is some structural change for wages these really tend to have a very small impact on the overall wage story A bigger impact is expected if and when we start to get to full employment and possibly start seeing labor shortages but we are not there yet
The U 6 unemployment rate came in at 9 7 down one tenth of a point 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
Gains in general were tilted toward part time work with full time workers declining by 253 000 and part time workers also dropping but by just 21 000 The number of people working part time for economic reasons at just over 6 million remains 50 percent above what it was before the 2007 2009 financial crisis and recession But it has been stuck around that level for more than half a year a sign that progress may have stopped or that employers have shifted some jobs permanently away from full time status
The number of long term unemployed those jobless for 27 weeks or more declined by 150 000 to 2 1 million in April These individuals accounted for 25 7 percent of the unemployed
Job growth was concentrated in the business and professional services sector which added 65 000 positions Health care was up 44 000 while financial institutions added 20 000 despite some high profile layoff announcements on Wall Street
Mining lost another 7 000 this category includes energy related jobs in the oil patch Companies that drill for oil and natural gas or mine for coal and other metals have cut almost 200 000 jobs since the fall of 2014 Energy firms have reduced payrolls for 18 straight months Retail lost about 3 000 jobs Construction added about 1 000 jobs Government continued to shed jobs 11 000 last month
When roughly 40 000 Verizon NYSE VZ workers went on strike last month it was right in the middle of the week that government number crunchers analyze to gauge the strength of the job market Over all the muted tone of April s report wasn t because of a big drop in any particular industry
If you are looking for positive trends in the report consider that this marks the 74th consecutive month of job gains Private employment is now 5 8 million above the pre recession peak Private employment is up 14 6 million from the recession low In April the year over year change was 2 69 million jobs Over the last 12 months employment growth averaged 232 000 jobs per month
For Fed watchers the jobs report was a red flag and the thinking is that a drop of 48 000 jobs might stop the Fed from raising interest rates at their June meeting Futures tied to the Fed s benchmark policy rate now put the next interest rate hike into next year but that might be a disconnect from what Fed policymakers have in store The rise in wages still might push the Fed closer to hiking rates if not June maybe September
And the simple fact is that employment was not going to continue rising at 200 000 a month indefinitely Monthly gains of about 100 000 jobs would be enough to maintain the rate of economic growth and absorb new job entrants as the population increases especially as boomers continue retiring in a huge demographic shift
The labor force participation rate which had been on the rise in recent months fell to 62 8 percent down two tenths of a point and its lowest level since January The total labor force contracted by 362 000 Analysts are divided on whether the decline is structural in other words due to big long term shifts in the economy like baby boomers retiring or cyclical driven primarily by shorter term moves in hiring due to the business cycle
It s an important question If it is structural it means that the labor pool is smaller and most of the slack is already out of the labor market If it is cyclical it means that there are still plenty of potential workers on the sidelines waiting to get back into the labor pool A third option is that we are nearing some sort of equilibrium where fewer people are leaving the workforce rather than people re entering If that is the case then we might expect the labor force participation rate to trend sideways or lower from here
The labor force participation rate edged down consistent with what Fed policymakers feel is a longer term trend given the country s aging population Since 2008 the labor participation rate has fallen from a high of 67 3 in 2000 to 62 8 which is near a 38 year low It seems that most not all of the sidelined workers have come back to the labor pool We are getting closer to full employment not there yet but at least wringing some of the slack from the labor market
Still most people don t think this feels like a robust labor market According to the US Bureau of Labor workers are considered employed even if they are working a couple of part time jobs to scrape by even if they work just a couple of hours a week Many of the jobs created in the recovery are low paying or part time many of the jobs are part of the 1099 economy or the gig economy temp jobs freelance or contracted jobs in other words jobs without benefits The number of Americans working in this capacity grew from 10 1 in 2005 to 15 8 in 2015
After decades of stagnant wages 73 million Americans nearly one quarter of our population now live in households eligible for the Earned Income Tax Credit a benefit exclusively available to the working poor And according to a 2014 report from the Organization for Economic Cooperation and Development rising income inequality and the reduced consumer demand that comes with it knocked 6 to 9 off US economic growth over the previous two decades
If the US economy were 9 bigger than it is today it would have created about 11 million additional jobs Working people and their families are keenly aware of the fact that strong wage growth continues to be the lagging indicator in this recovery
The Fed raised rates in December and its current projections call for another two hikes this year But you have to wonder if the Fed really has incentive to hike rates in June Perhaps the Fed will look at the possible inflationary impact of wage gains but Yellen has said she is not yet convinced that recent signs of rising prices are evidence of a durable trend There will be one more jobs report before the Fed FOMC meeting in June Today s report was not enough to take a rate increase off the table but it was enough to make the policymakers think twice
Stocks bounced back from earlier weakness to close higher on Friday but logged their second straight week of losses Treasury yields rose today after plunging early in the session to a nearly one month low Treasury prices rose for the second week in a row pushing yields to their largest two week decline in a month |
VZ | US Cellular USM Poised For Long Term Growth Risks Stay | On May 10 we issued an updated research report on wireless service provider United States Cellular Corp NYSE USM a subsidiary of Telephone and Data Systems Inc NYSE T United States Cellular posted dismal first quarter 2016 results wherein both the top and the bottom line failed to beat the Zacks Consensus Estimate Nonetheless we expect U S Cellular to benefit from its LTE expansion and increased smartphone sales which are likely to drive earnings The PositivesU S Cellular has successfully completed its 4G LTE network rollout in 2015 Moreover the company has initiated testing of voice over LTE or VoLTE and plans for commercial deployment early next year Additionally multiple 4G LTE roaming agreements have been duly signed We thus expect the company to benefit from the implementation of its VoLTE services U S Cellular is optimistic about the growing demand for smartphones which enjoy significant market penetration supporting growth in data revenues Given the improvement in the company s smartphone portfolio smartphone sales represented 75 penetration among postpaid customers in the first quarter up from 67 recorded in the year ago quarter Meanwhile over the last few years U S Cellular has been divesting its non strategic assets in order to focus on long term growth opportunities The company has also taken a number of strategic actions that will likely accelerate growth in the future thus enhancing its returns Also continued focus on subscriber base expansion and reduction of churn through various initiatives should boost the company s performance RisksHowever U S Cellular operates in an intensely competitive wireless market and remains highly susceptible to aggressive pricing by rivals like Verizon Communications Inc NYSE VZ and AT T Inc NYSE T Moreover though U S Cellular has sufficient liquidity the resources might be inadequate for future expansion purposes such as the purchase of spectrum license in the upcoming FCC auctions This might lead to high levels of borrowing and the company s liquidity would be affected if it is unable to obtain short or long term financing on acceptable terms further pressurizing its cash flow Additionally the ongoing consolidation in the wireless industry roaming revenues related woes declining service revenues and high costs remain potent headwinds U S Cellular currently carries a Zacks Rank 3 Hold Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
VZ | Don t Miss Out On Telecom Momentum | Telecommunications is one of the few industries to have undergone rapid technological improvements during the recession An era of digitization and technology has essentially been built on the very human need to remain connected It is in this context that telecommunications comes to the fore as a necessary utility The rising demand for technologically superior products offers a silver lining to the telecom industry in an otherwise tough environment Future Growth Driver Internet of Things
We expect wireless networks to provide the primary impetus to the telecom industry In this regard Internet of Things IoT has the potential to emerge as the 1 factor for future growth in the space The 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 Machine to machine M2M communications is a key example IoT needs superfast wireless links to run effectively This signals massive growth potential for the telecom industry
Expansion of Fiber Optic Network
The fiber optic network is increasingly becoming the most sought after technology for secure and fast data transmission over long distances Going forward the wireline industry will largely evolve around fiber based superfast gigabit data transmission network
In this regard Verizon Communications Inc NYSE VZ has decided to launch a fiber to the premises FTTP network for both residential and business customers to deliver an exceptional 10 Gbps gigabit per second of upload and download speeds Alphabet Inc s fiber network currently offers 1 Gbps of speed while Comcast Corp NASDAQ CMCSA s Gigabit Pro provides 2 Gbps of residential broadband Internet speed AT T Inc NYSE T is gradually expanding its super fast fiber optic broadband service GigaPower AT T s service offers 1 Gbps Internet speed to both residential and small business customers Geographical Expansion
Cutting across barriers has become common among telecom players The motive is to offer better service and customer convenience In Feb 2015 AT T launched a service which allows its prepaid GoPhone customers on 60 data plans the benefit of unlimited calling from the U S to Mexico without any additional charge The company s postpaid customers on World Connect Value plans can also avail unlimited calls to Mexico with a 5 add on
Meanwhile T Mobile US Inc introduced an innovative Mobile Without Borders plan through which its subscribers will be able to make calls to Canada and Mexico without paying any roaming charges America Movil S A B has also unveiled a pan North American roaming charge free calling facility covering Mexico and the U S which will be further extended to Canada
In Apr 2015 Sprint Corp s prepaid service division Boost Mobile launched an unlimited voice call and text message service plan to enhance connectivity between U S inhabitants and their friends and family in Cuba
In Mar 2016 Verizon Partner Solutions a division of U S telecom behemoth Verizon entered into an agreement with Cuba s state run telecommunications company Empresa de Telecomunicaciones de Cuba to offer direct roaming mobile interconnection services between the two countries Notably in Sep 2015 Verizon became the first U S telecom operator to offer roaming wireless services in Cuba Opportunities
The telecommunications industry as a whole offers a number of positives that are difficult to disregard from the standpoint of investors
Immune to External Disturbances A major characteristic of the telecommunications industry is that it is immune to any international geo political disturbance even when it leads to economic fluctuations Thus the ongoing sovereign debt crisis in Europe the slowdown in China or other non U S economic volatility is not expected to have any immediate impact on the industry
Barrier to Entry The lack of public airwaves spectrum in the telecommunications industry creates a high barrier to entry The U S telecom market is controlled by just four national players as regional low cost operators are not eligible to compete with large carriers Furthermore it is not easy for a new telecom carrier to establish itself in the market as it requires government approval to transmit voice data and video on public airwaves Spectrum licenses are limited and are therefore quite expensive Moreover the deployment of network infrastructure requires significant capital expenditure which very few entities can afford Thus this barrier protects the profits of incumbents in the telecom space
Strong Demand A recovering economy speeds up the demand for real time voice data and video manifold The escalation in demand has encouraged telecom service providers to undertake large network extensions while upgrading plans Moreover the FCC projects mobile data demand to grow 25 50 folds over the next five years |
VZ | Zacks Industry Outlook Highlights Verizon Communications Alphabet Comcast T Mobile US And America Movil S A B | For Immediate Release
Chicago IL May 12 2016 Today Zacks Equity Research discusses the Telecom Part 2 including Verizon Communications Inc NYSE VZ Alphabet Inc Comcast Corp NASDAQ CMCSA T Mobile US Inc and America Movil S A B
Industry Telecom Part 2
Link
Telecommunications is one of the few industries to have undergone rapid technological improvements during the recession An era of digitization and technology has essentially been built on the very human need to remain connected It is in this context that telecommunications comes to the fore as a necessary utility The rising demand for technologically superior products offers a silver lining to the telecom industry in an otherwise tough environment
Future Growth Driver Internet of Things
We expect wireless networks to provide the primary impetus to the telecom industry In this regard Internet of Things IoT has the potential to emerge as the 1 factor for future growth in the space The 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 Machine to machine M2M communications is a key example IoT needs superfast wireless links to run effectively This signals massive growth potential for the telecom industry Expansion of Fiber Optic Network
The fiber optic network is increasingly becoming the most sought after technology for secure and fast data transmission over long distances Going forward the wireline industry will largely evolve around fiber based superfast gigabit data transmission network
In this regard Verizon Communications Inc has decided to launch a fiber to the premises FTTP network for both residential and business customers to deliver an exceptional 10 Gbps gigabit per second of upload and download speeds Alphabet Inc s fiber network currently offers 1 Gbps of speed while Comcast Corp s Gigabit Pro provides 2 Gbps of residential broadband Internet speed Geographical Expansion
Cutting across barriers has become common among telecom players The motive is to offer better service and customer convenience In Feb 2015 AT T NYSE T launched a service which allows its prepaid GoPhone customers on 60 data plans the benefit of unlimited calling from the U S to Mexico without any additional charge The company s postpaid customers on World Connect Value plans can also avail unlimited calls to Mexico with a 5 add on
Meanwhile T Mobile US Inc introduced an innovative Mobile Without Borders plan through which its subscribers will be able to make calls to Canada and Mexico without paying any roaming charges America Movil S A B has also unveiled a pan North American roaming charge free calling facility covering Mexico and the U S which will be further extended to Canada
In Mar 2016 Verizon Partner Solutions a division of U S telecom behemoth Verizon entered into an agreement with Cuba s state run telecommunications company Empresa de Telecomunicaciones de Cuba to offer direct roaming mobile interconnection services between the two countries Notably in Sep 2015 Verizon became the first U S telecom operator to offer roaming wireless services in Cuba Opportunities
The telecommunications industry as a whole offers a number of positives that are difficult to disregard from the standpoint of investors
Immune to External Disturbances A major characteristic of the telecommunications industry is that it is immune to any international geo political disturbance even when it leads to economic fluctuations Thus the ongoing sovereign debt crisis in Europe the slowdown in China or other non U S economic volatility is not expected to have any immediate impact on the industry
Barrier to Entry The lack of public airwaves spectrum in the telecommunications industry creates a high barrier to entry The U S telecom market is controlled by just four national players as regional low cost operators are not eligible to compete with large carriers Furthermore it is not easy for a new telecom carrier to establish itself in the market as it requires government approval to transmit voice data and video on public airwaves Spectrum licenses are limited and are therefore quite expensive Moreover the deployment of network infrastructure requires significant capital expenditure which very few entities can afford Thus this barrier protects the profits of incumbents in the telecom space
Strong Demand A recovering economy speeds up the demand for real time voice data and video manifold The escalation in demand has encouraged telecom service providers to undertake large network extensions while upgrading plans Moreover the FCC projects mobile data demand to grow 25 50 folds over the next five years
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VZ | U S Telecom Pricing War Net Neutrality Woes | Technological invention and innovation at a rapid clip have resulted in significant competition within the telecommunications industry Product life cycle and upgrade cycle have gone down drastically with several firms coming out with new versions of products and services back to back within a short span of time To combat competition firms are thus increasingly looking at consolidation This has resulted in an array of mergers and acquisitions in the telecom space
To add to that the Federal Communications Commission s FCC net neutrality laws have made matters worse for telecom operators Besides several ISPs Internet Service Providers are in a tight spot over the FCC s orders pertaining to increased upload and download speeds of Internet service termed broadband Stiff Competition
In the meantime the U S telecom market continues to witness intense pricing competition The two industry behemoths Verizon Communications Inc NYSE VZ and AT T Inc NYSE T at present command around 68 of the U S wireless market whereas Sprint Corp and T Mobile US Inc jointly control the remaining 32 These two relatively smaller firms are now bringing on board several low priced value added products to lure customers away from their larger peers In 2015 both Sprint and T Mobile US added a substantial number to its customer base
On the video services front the pay TV industry is facing severe competitive threats from low cost online video streaming service providers Cord cutting has become a regular phenomenon in the country with over the top video operators offering smaller packages of channels designed according to a customer s need at dirt cheap prices Established pay TV operators are now opting for the more customer friendly Internet TV service in order to counter the threat
Companies in the telecommunications industry continue with mergers and acquisitions Consolidation among the largest telecommunication services focused companies has created an environment where equipment focused companies have to contend with fewer customers and reduced selling opportunities This has prompted consolidation among equipment companies as well to enhance their marketing value by broadening product offerings for converged fixed mobile networks Net Neutrality A Major Concern
The net neutrality law adoption mandate by the FCC was announced on Feb 26 2015 per which high speed broadband Internet will now be classified as a public utility under Title II of the 1934 Communications Act instead of section 706 of the 1996 Telecom Act Importantly the latest regulations will be applicable to both mobile and fixed broadband networks The reclassification of Internet makes a radical change in the way the government treats high speed broadband services and ISPs The FCC can now strongly regulate the ISPs
Net neutrality implies an open Internet atmosphere which will prohibit ISPs especially telecom and cable TV operators from discriminating against applications In order to control the flow of bandwidth consuming applications such as video streaming the ISPs have been discriminating against several web based content and applications Content developers thus have to pay heavy sums to ISPs for accelerated data transfer
The implementation of the new law will ban common ISP malpractices such as data traffic blocking slowing down data traffic and paid prioritization Notably paid prioritization is a method through which content developers strike deals with ISPs for quick and smooth transmission of their data traffic The FCC will closely monitor and put a check on all such deals in the future Moreover the FCC will also supervise interconnection deals in which content developers pay ISPs to connect to their networks
Notably on Jan 29 2015 the FCC increased the download and upload speeds of Internet services to be deemed as broadband high speed data In a majority vote the FCC raised the new threshold download speed to 25 Mbps from the existing 4 Mbps while the same for upload has been boosted to 3 Mbps from the current 1 Mbps Weaknesses
In general telecommunications companies under pressure have high debt levels and large financial leverage ratios Moreover they are often unable to cope with recent market trends Other risks that pose threats are as follows
Potential Business Slowdown Sales fluctuations of carriers are expected to continue to weigh on capital spending decisions a major problem faced by equipment vendors The companies are expected to retain focus on improving their balance sheets financial discipline and free cash flow generation
Product Overlapping We may see more product sharing deals between telecom cable TV and satellite TV operators as each of these players are vying to grab a sizeable share in each other s territory Even pay TV services offerings to business enterprises mobile backhaul and metro Ethernet segments may witness more convergence Mobile phone makers are now gradually offering tablets and chipset manufacturers are providing chips for personal computers as well as mobile devices thus frequently interchanging their areas of operations
Intensified Competition Technological upgrades and breakthroughs have resulted in cutthroat price competition Product life cycle and upgrade cycle have been reduced drastically as several firms are coming up with new products and services within a short span of time Increasing competition is compelling players to offer heterogeneous and bundled services to retain their position in the space |
VZ | Sprint Close To Agreement On Terms To Buy T Mobile Report | By Sprint Corp NYSE S is closing in on an agreement to pay 40 a share to buy T Mobile US Inc NYSE TMUS Bloomberg reported on Wednesday drawing the two companies toward a deal to combine the country s third and fourth largest telecoms carriers
The price reportedly under discussion represents about a 17 percent premium to T Mobile s Wednesday close and values the No 4 carrier at more than 32 billion
Under a proposed agreement Sprint would offer about 50 percent stock and 50 percent cash for T Mobile leaving parent Deutsche Telekom AG XETRA DTEGn with about a 15 percent stake in the combined company Bloomberg cited people with knowledge of the matter as saying
A deal could be announced as soon as July Bloomberg said
Softbank Corp TOKYO 9984 owns Sprint while Deutsche Telekom owns 67 percent of T Mobile
Softbank Chairman Masayoshi Son has long been eager to buy T Mobile and merge it with Sprint creating a carrier with the resources to upgrade its network and better compete with market leaders AT T Inc NYSE T and Verizon Wireless NYSE VZ
An exit from the United States would allow Deutsche Telekom to beef up its operations across Eastern Europe
But the U S Federal Communications Commission and Justice Department have raised concerns about such a tie up revolving around the risk that it could raise prices for consumers U S regulators rejected AT T s 39 billion takeover bid for T Mobile US in 2011
Sprint declined comment T Mobile did not respond to requests for comment Softbank and Deutsche Telekom were not immediately available for comment
The agencies have tipped their hand and the parties know that said an antitrust expert who spoke anonymously to protect business relationships
They must think that they have stronger arguments and they re willing to battle them out with the agencies That has to be part of their calculus here |
VZ | Sprint Agrees To Buy T Mobile For 32 Billion | By Sprint Corporation NYSE S has agreed to pay about 32 billion or 40 per share to buy T Mobile US Inc NYSE TMUS Reuters reports taking the third and fourth largest U S mobile network operators one step closer in their merger that could happen as early as this summer
The share price is 17 percent above T Mobile US s closing share price on Wednesday and the shares have more than doubled after the company bought smaller competitor MetroPCS last year
S the No 3 mobile carrier title Reuters Logo of Sprint Nextel Corp NYSE S the No 3 mobile carrier rel external image
The Sprint T Mobile merger will need to pass regulatory challenges from the U S Federal Communications Commission FCC and the Department of Justice DOJ which have both expressed a desire to have at least two more network operators competing against market leaders AT T Inc NYSE T and Verizon Communications Inc NYSE VZ
Three years ago the regulators rejected AT T s 39 billion bid for T Mobile and AT T paid T Mobile s owner Deutsche Telecom XETRA DTEGn a break up fee of 6 billion
Deutsche Telecom which owns 67 percent of T Mobile would keep a 15 to 20 percent stake in the combined company in the sale to Sprint Reuters reported Sprint would pay T Mobile more than 1 billion in cash and assets if the deal is rejected by regulatory authorities the Wall Street Journal reported |
XOM | Philippines says China agrees on no new South China Sea expansion | China has assured the Philippines it will not occupy new features or build new structures in the South China Sea the Philippine defense minister says Philippines also is working on a commercial deal with China to explore and exploit oil and gas resources in disputed areas of the South China Sea with an aim to begin drilling within a year according to the Philippine foreign minister China claims nearly all of the South China Sea a waterway through which 3T worth of seaborne trade passes every year but Philippine Pres Duterte has been courting China and avoiding disputes over maritime sovereignty while berating the U S The chairman of Philippine oil and gas firm PXP Energy says any joint venture with China likely would be with a company like CNOOC NYSE CEO Now read |
XOM | Exxon safety order voided by U S appeals court | A U S appeals court has voided an order that would have required Exxon Mobil XOM 0 9 to revise its pipeline safety procedures after the 2013 Pegasus pipeline spill in Arkansas The U S Pipeline and Hazardous Materials Safety Administration issued the order in 2015 and it could have applied to more than 1K miles of XOM pipelines but the Fifth U S Circuit Court of Appeals vacated the order resulting from the spill The court also voided 1 63M of the 2 63M the pipeline agency had fined the company Now read |
XOM | Tillerson condemns racism calls for national reconciliation | By Yeganeh Torbati WASHINGTON Reuters U S Secretary of State Rex Tillerson issued a forceful condemnation of bigotry in all its forms on Friday and called for national reconciliation as he promised to work toward making the government more racially diverse His remarks to State Department interns and fellows dozens of whom were recruited through programs targeting minority candidates followed the backlash from political and business leaders over President Donald Trump s response to Saturday s white nationalist violence in Charlottesville Virginia Tillerson invoked the 1865 second inaugural address by Abraham Lincoln the president who freed the slaves and presided over the Civil War against rebellious pro slavery Confederate Southern States As the war drew to a close Lincoln asked the nation to bind up its wounds from the conflict Tillerson noted We too today should seek to bind up the wounds Tillerson said We must pursue reconciliation understanding and respect regardless of skin color ethnicity or religious or political views Though Tillerson acknowledged First Amendment protections for free speech he said those who embrace hate speech poison our public discourse and they damage the very country that they claim to love He added Racism is evil it is antithetical to America s values It s antithetical to the American idea Tillerson did not mention Trump s comments on the Charlottesville violence which erupted as white nationalists protested the removal of a statue of Confederate General Robert E Lee The president has said anti racism counter protesters shared blame for the violence He has also decried the removal in numerous cities of beautiful Confederate monuments Tillerson who was chief executive of oil giant Exxon Mobil Corp N XOM before becoming secretary of state this year said one of America s defining characteristics is the promise of the opportunity for advancement regardless of your skin color how much money your parents make or where you came from He announced a new State Department policy in which at least one candidate for any opening for an ambassador post must be a minority noting that currently only about 12 percent of U S senior foreign service officers are non white The State Department must redouble our efforts to increase diversity at the highest ranks of the department including at the ambassador level Tillerson said As the arm of government representing the United States abroad the department should be a clear display of America s values and our people not just in our mission but in the composition of our work force he added Statistics published by the State Department show that as of the end of June 88 percent of senior foreign service officers the high ranking diplomats from which the country s ambassadors are drawn are white and 4 percent are black One third of senior foreign service officers are women and 7 percent of the agency s civil service members are Hispanic To remedy the lack of diversity Tillerson said he had told committees that nominate ambassadorial candidates at least one candidate for each opening must be a member of a minority group To recruit a more diverse young talent pool Tillerson also said the State Department needs to look beyond elite universities and should more aggressively recruit at the dozens of historically black colleges in the United States
America s best and brightest are not just from the Ivy League but they re from a lot of other places in the country Laredo Texas Detroit Michigan Roanoke Virginia he said |
CSCO | Cisco Systems CSCO Earnings Expected To Grow What To Know Ahead Of Next Week s Release | Cisco Systems NASDAQ CSCO is expected to deliver a year over year increase in earnings on higher revenues when it reports results for the quarter ended October 2018 This widely known consensus outlook gives a good sense of the company s earnings picture but how the actual results compare to these estimates is a powerful factor that could impact its near term stock price
The earnings report which is expected to be released on November 14 2018 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This seller of routers switches software and services is expected to post quarterly earnings of 0 72 per share in its upcoming report which represents a year over year change of 18
Revenues are expected to be 12 87 billion up 6 1 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 0 17 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
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 subject 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
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Cisco
For Cisco the Most Accurate Estimate is the same as the Zacks Consensus Estimate suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate This has resulted in an Earnings ESP of 0
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that Cisco will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Cisco would post earnings of 0 69 per share when it actually produced earnings of 0 70 delivering a surprise of 1 45
Over the last four quarters the company has beaten consensus EPS estimates four times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Cisco doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
CSCO | Cisco Systems CSCO Q1 Earnings And Revenues Top Estimates | Cisco Systems NASDAQ CSCO came out with quarterly earnings of 0 75 per share beating the Zacks Consensus Estimate of 0 72 per share This compares to earnings of 0 61 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 4 17 A quarter ago it was expected that this seller of routers switches software and services would post earnings of 0 69 per share when it actually produced earnings of 0 70 delivering a surprise of 1 45
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 13 07 billion for the quarter ended October 2018 surpassing the Zacks Consensus Estimate by 1 56 This compares to year ago revenues of 12 14 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 17 8 since the beginning of the year versus the S P 500 s gain of 1 8
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 71 on 12 46 billion in revenues for the coming quarter and 2 97 on 51 48 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 45 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 | U S top court rules against Cisco Systems in patent infringement fight | By Lawrence Hurley WASHINGTON Reuters The U S Supreme Court on Tuesday ruled against Cisco Systems Inc O CSCO over a patent infringement claim the tech giant is fighting On a 6 2 vote with Justice Stephen Breyer recused from the case the court threw out a ruling by the U S Court of Appeals for the Federal Circuit in favor of Cisco There is now likely to be a new trial The case concerns a patent held by Commil USA LLC on a way to improve the implementation of a wireless network where multiple access points are needed Commil sued Cisco for patent infringement and induced patent infringement based on the network equipment maker s use of similar technology In April 2011 a jury awarded Commil almost 63 8 million in damages A judge subsequently added 10 3 million in interest In June 2013 the appeals court ordered a retrial concluding in part that Cisco should be allowed to mount the good faith defense The high court ruled in an opinion written by Justice Anthony Kennedy that Cisco s belief that the patent was invalid was not a legitimate defense Washington based intellectual property lawyer William Jackson said the ruling means the patent owner must merely prove that the other party knew of the patent and intended to induce infringement not that the party had any particular belief about validity The ruling restores common sense to patent litigation said Commil s attorney Mark Werbner Seth Waxman one of Cisco s lawyers said the ruling simply eliminates one of many defenses available to Cisco which looks forward to retrial of the case In a brief filed at the invitation of the high court the U S government had warned that companies accused of inducing patent infringement were likely to raise the good faith defense in most cases if not all of them The court appeared to buy that argument with Kennedy writing that if Cisco prevailed on its theory there would be negative consequences in other cases It can render litigation more burdensome for everyone involved Kennedy said of the good faith defense The case was closely watched by Silicon Valley and biotechnology firms Justice Antonin Scalia wrote a dissenting opinion in which he was joined by Chief Justice John Roberts Scalia said the ruling would benefit so called patent trolls companies that hold patents only for the purpose of suing firms seeking to develop new products The case is Commil v Cisco U S Supreme Court No 13 896 |
CSCO | U S tech firm Cisco to invest 10 billion in China expansion | By Dominique Patton
BEIJING Reuters Cisco O CSCO plans to invest more than 10 billion in China along with local business partners over the next several years the U S network equipment maker said on Wednesday as it seeks to shore up its position against strong domestic rivals
Cisco the world s biggest maker of switching equipment and routers that run the Internet announced the investment plans following high level meetings between top executives and Chinese Vice Premier Wang Yang and other government agency leaders
A statement issued by the Silicon Valley company provided the broad outlines of how it planned to invest but did not detail any specific spending or timelines for doing so
It said in a statement it had signed a Memorandum of Understanding MoU with China s state planner the National Development and Reform Commission to expand investment
This will be used to fund innovation equity investment research and development and job creation Cisco said
It also signed an MoU with the Association of Universities Colleges of Applied Science AUAS to advance technical training of information and communications engineers
The company said it will invest in a four year network engineer training program with 100 universities and colleges of applied science recommended by AUAS
Cisco is looking to capitalize on initiatives promoted by the Chinese government including China Manufacturing 2025 Internet and its strategy to deliver more services as cloud based Internet services
The move comes as pressure has grown on foreign technology firms in the world s biggest Internet market as Beijing has moved 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 which had been dropped from state procurement lists in recent years
Cisco and arch rival Huawei Technologies HWT UL of China have been battling each other for a decade Political controversies over ties to their respective governments have raised questions about their futures on each other s lucrative home turf
In 2013 John Chambers Cisco s long serving chairman and chief executive acknowledged that security controversies had stymied the company s moves to expand in China
Chambers took part in the recent meetings with Chinese government officials along with CEO Designate Chuck Robbins who is scheduled to take over as chief executive in July Chambers will remain as executive chairman of the company |
CSCO | BlackBerry quarterly software revenue jumps shares climb | By Euan Rocha WATERLOO Ontario Reuters BlackBerry Ltd TO BB O BBRY said on Tuesday its turnaround gained traction as sales at its crucial software segment rose in the first quarter and its broader revenue slide began to ease sending its shares up 4 3 percent Quarterly revenue totaled 658 million in the quarter slightly lower than the prior period but software revenue more than doubled from a year ago to 137 million as the company pivots to that segment The reaction is all about the software revenues said Morningstar analyst Brian Colello This is the best sign yet that the turnaround is working Its shares rose to 9 60 in premarket trade on the Nasdaq from a close of 9 20 on Monday The software revenue growth calmed the fears of analysts and investors who have been concerned about BlackBerry s ability to grow those revenues as it transforms itself from a hardware focused company to more of a software and services provider I m obviously quite pleased with the quarter We have some very good achievements said BlackBerry Chief Executive John Chen on a conference call Separately BlackBerry announced a long term patent cross licensing agreement with Cisco Systems Inc O CSCO that covers their respective products and technologies BlackBerry said that it will receive a license fee from Cisco but terms of the deal were not disclosed The agreement is part of Chen s push to license and monetize the company s deep pool of patents that it has built up over the years BlackBerry said it has signed partnership deals with Wistron Corp TW 3231 and Compal Electronics TW 2324 extending the company s reliance on others for joint development and manufacturing of its devices as it aims for profitability in its handset business The company already has a deal in place with Taiwanese electronics company Foxconn Technology Co TW 2354 Excluding a one time accounting gain and charges related to restructuring the company reported a first quarter loss of 28 million or 5 cents a share
Analysts on average expected a loss of 3 cents a share according to Thomson Reuters I B E S With additional reporting by Alastair Sharp and Allison Martell in Toronto Editing by Jeffrey Benkoe and Chizu Nomiyama |
VZ | Verizon to Commercially Deploy 5G Wireless Networks in 2017 | The U S telecom behemoth Verizon Communications Inc NYSE VZ is currently conducting field trials for its upcoming 5G wireless network with its partners The company is looking at mobile hotspot and fixed wireless for initial deployment of the next generation 5G wireless networks in the U S in 2017
Verizon s CFO Fran Shammo told investment analysts yesterday at the company s first quarter 2016 earnings conference call The CFO s statement is in line with the company s focus on building a fiber and wireless infrastructure in order to deliver mobile video efficiently
The wireless giant which was the first to deploy the 4G LTE Long Term Evolution network nationwide is initially testing equipment at 15GHz 28GHz 39GHz and 64GHz frequency bands for 5G network deployments The company s partners in its 5G projects are Cisco Systems Inc NASDAQ CSCO Ericsson ST ERICAs LM NASDAQ ERIC Nokia HE NOKIA Corp NYSE NOK and Samsung KS 005930
Although several industry researchers have predicted that a full fledged 5G network deployment will not start until 2020 Verizon expects some level of commercial deployment in 2017 Industry researchers expect the Asia Pacific region to spearhead the global deployment of 5G wireless networks However neither South Korea nor Japan the two leading countries opting for 5G network are likely to start commercial deployment before late 2018
Advantage of 5G
Verizon claims that its 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 any 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 the exponential growth of Internet connected devices popularly known as Internet of Things IoT According to a recent report by research firm International Data Corporation IDC worldwide spending on IoT is slated to grow at a 17 compound annual growth rate CAGR to nearly 1 3 trillion in 2019 from 698 6 billion in 2015
The Bottom Line
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 competitors existing players need to be constantly on their toes to introduce innovative products At this juncture we believe Verizon s drive for 5G wireless network bodes reasonably well for its future growth The stock currently carries a Zacks Rank 4 Sell
Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
VZ | Yahoo CEO To Get Severance Package Worth 55M Upon Sale | It seems that Yahoo Inc NASDAQ YHOO still has long way to go and a number of hurdles to cross before its future is ascertained After losing more than a third of its important executives Yahoo somehow managed to avert a proxy war and is still struggling to get a suitable buyer But the nightmare doesn t seem to end here for Yahoo Let s see what s with latest move
In a regulatory filing with the Securities and Exchange Commission last Friday Yahoo revealed that CEO Marissa Mayer will get a severance package of 55 million if the sale of its Internet operations costs Mayer her job The payout includes cash severance of 3 million restricted stock units and options
The company refused to comment beyond the filing
Mayer was hired by Yahoo in 2012 to turn the company around but she repeatedly failed in her efforts to develop successful products and boost revenues She has been making herself unpopular among employees and investors with her pressing management style and unsuccessful strategic moves
Her latest strategy included cutting back total employees by 15 and selling off properties but that eventually backfired
Since 2015 more than a third of the company s employees including some of Mayer s key lieutenants have left She announced hefty packages to put a check on the brain drain but she had already lost the trust of senior employees
The company cut Mayer s compensation by from 42 million in 2014 to 36 million in 2015 She however received only about 14 million owing to the company s poor financial performance
Other executives could also get huge amounts if they are terminated after the sell Chief Revenue Officer Lisa Utzschneider could get about 20 million while Chief Financial Officer Ken Goldman may receive 16 million
Although takeover offers are in consideration the majority of investors believe that the company will eventually decide to sell its core Internet business that includes search mail and news sites In February Yahoo launched an auction and has reportedly narrowed down its list of bidders to 10 companies by now
Capital Markets analyst Mark Mahaney believes that Verizon Communications Inc NYSE VZ heads the list of prospective buyers and that being the case there is a chance that Verizon will make Tim Armstrong the new CEO of Yahoo Armstrong currently is the CEO of AOL Inc that Verizon recently acquired for 4 4 billion
Last week Yahoo managed to avert a proxy war when it reached a settlement with activist shareholder Starboard Value LP which was pushing to replace Yahoo s entire board Under the agreement Yahoo agreed to add four independent directors of Starboard including CEO Jeffery Smith
Despite growth in new businesses we are still in a transition phase as we work on our turnaround strategy Yahoo said in the filing
Currently Yahoo is a Zacks Rank 3 Hold stock Better choices for investors would be Facebook Inc NASDAQ FB sporting a Zacks Rank 1 Strong Buy and Blue Calypso Inc OTC BCYP carrying a Zacks Rank 2 Buy |
VZ | The Zacks Analyst Blog Highlights Yahoo Verizon Communications Facebook And Blue Calypso | For Immediate Release
Chicago IL May 03 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 the Yahoo Inc NASDAQ YHOO Verizon Communications Inc NYSE VZ Facebook NASDAQ FB Inc and Blue Calypso Inc
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Monday s Analyst Blog
Yahoo s Marissa Mayer to Get 55M Severance Upon Sale
It seems that Yahoo Inc still has long way to go and a number of hurdles to cross before its future is ascertained After losing more than a third of its important executives Yahoo somehow managed to avert a proxy war and is still struggling to get a suitable buyer But the nightmare doesn t seem to end here for Yahoo Let s see what s with latest move
In a regulatory filing with the Securities and Exchange Commission last Friday Yahoo revealed that CEO Marissa Mayer will get a severance package of 55 million if the sale of its Internet operations costs Mayer her job The payout includes cash severance of 3 million restricted stock units and options
The company refused to comment beyond the filing
Mayer was hired by Yahoo in 2012 to turn the company around but she repeatedly failed in her efforts to develop successful products and boost revenues She has been making herself unpopular among employees and investors with her pressing management style and unsuccessful strategic moves
Her latest strategy included cutting back total employees by 15 and selling off properties but that eventually backfired
Since 2015 more than a third of the company s employees including some of Mayer s key lieutenants have left She announced hefty packages to put a check on the brain drain but she had already lost the trust of senior employees
The company cut Mayer s compensation by from 42 million in 2014 to 36 million in 2015 She however received only about 14 million owing to the company s poor financial performance
Other executives could also get huge amounts if they are terminated after the sell Chief Revenue Officer Lisa Utzschneider could get about 20 million while Chief Financial Officer Ken Goldman may receive 16 million
Although takeover offers are in consideration the majority of investors believe that the company will eventually decide to sell its core Internet business that includes search mail and news sites In February Yahoo launched an auction and has reportedly narrowed down its list of bidders to 10 companies by now
Capital Markets analyst Mark Mahaney believes that Verizon Communications Inc heads the list of prospective buyers and that being the case there is a chance that Verizon will make Tim Armstrong the new CEO of Yahoo Armstrong currently is the CEO of AOL Inc that Verizon recently acquired for 4 4 billion
Last week Yahoo managed to avert a proxy war when it reached a settlement with activist shareholder Starboard Value LP which was pushing to replace Yahoo s entire board Under the agreement Yahoo agreed to add four independent directors of Starboard including CEO Jeffery Smith
Despite growth in new businesses we are still in a transition phase as we work on our turnaround strategy Yahoo said in the filing
Currently Yahoo is a Zacks Rank 3 Hold stock Better choices for investors would be Facebook Inc sporting a Zacks Rank 1 Strong Buy and Blue Calypso Inc carrying a Zacks Rank 2 Buy
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VZ | Sprint S Q4 Loss Wider Than Expected Revenues Beat | Sprint Corp NYSE S reported mixed financial results in the fourth quarter of fiscal 2015 wherein revenues outpaced the Zacks Consensus Estimate while earnings lagged the same This Zacks Rank 3 Hold stock faces fierce competition in the U S wireless market from the likes of Verizon Communications Inc NYSE VZ AT T Inc NYSE T and T Mobile US Inc NYSE T In order to remain competitive Sprint recently launched several low priced data and voice plans Quarterly net loss was 554 million or 14 cents per share wider than a net loss of 224 million or 6 cents per share in the year ago quarter Fourth quarter net loss per share was also wider than the Zacks Consensus Estimate of a loss of 12 cents Quarterly total revenue came in at 8 071 million down 2 5 year over year but ahead of the Zacks Consensus Estimate of 8 002 million Service revenues were 6 574 million down 7 9 while Equipment revenues totaled 1 497 million up a substantial 30 9 Operating expenses were 8 063 million up 1 2 year over year Operating income was a mere 8 million compared with 318 million in the year ago quarter Adjusted EBITDA improved a whopping 23 8 year over year to 2 158 million Adjusted EBITDA margin was 32 8 compared with 24 4 in the year ago quarter Cash FlowIn the fourth quarter of fiscal 2015 Sprint generated 1 294 million of cash from operations compared with 976 million in the prior year quarter Quarterly free cash flow was a marginal 3 million while it was a negative 914 million in the prior year quarter LiquidityAt the end of fiscal 2015 Sprint had 2 641 million of cash and marketable securities compared with 5 253 million at the end of fiscal 2014 Total debt outstanding at the end of fiscal 2015 was 33 958 million compared with 33 831 million at the end of fiscal 2014 At fiscal 2015 end the debt to capitalization ratio was 0 60 flat year over year Wireless SegmentTotal segment revenue was 7 651 million down 0 2 year over year Postpaid revenues totaled 4 793 million down 5 1 Prepaid revenues were 1 203 million down 5 4 Wholesale revenues were 155 million down 18 Transactions revenues totaled 3 million down by a substantial 97 5 Equipment revenues were 1 497 million up 30 9 year over year Wireline SegmentTotal segment revenue was 562 million down 15 9 year over year Voice revenues totaled 194 million down 26 5 Data revenues were 37 million down 28 8 Internet revenues were 316 million down 5 7 Other revenues were 15 million down 11 8 year over year Subscribers StatisticsIn the reported quarter Sprint gained 56 000 postpaid subscribers 655 000 wholesale customers but lost 264 000 prepaid customers As of Mar 31 2016 Sprint had 58 806 million wireless customers up 4 8 year over year This includes 30 951 million postpaid 14 397 million prepaid and 13 458 million wholesale customers Quarterly total retail postpaid churn rate was 1 72 compared with 1 84 in the year ago quarter Total retail prepaid churn rate was 5 65 up from 3 84 in the prior year quarter Total retail postpaid ARPU average revenue per user was 51 68 down 9 2 year over year Total retail pretpaid ARPU was 27 72 up 0 8 year over year OutlookSprint expects fiscal 2016 adjusted EBITDA of 9 5 billion to 10 billion and operating income of 1 billion to 1 5 billion Capital expenditures will be approximately 3 billion Adjusted free cash flow will be around break even |
VZ | Vodafone Fully Takes Over Indian Operations For 1 68B | By Vodafone Plc ADR NASDAQ VOD on Friday acquired full control of its India operations by buying out minority shareholders including an 11 percent stake held by a local conglomerate for nearly 1 7 billion
UK based Vodafone closed the deal by buying a minority stake worth 1 48 billion from Piramal Enterprises Ltd BOM 500302 a conglomerate operating in real estate pharmaceuticals and finance in the country The latest buyout of Piramal s stake follows the company s announcement Thursday of the purchase of a 4 5 percent stake from another minority shareholder Analjit Singh for an undisclosed amount The company had received the Indian government s approval for the takeover of its India subsidiary in February
In March 2014 Vodafone completed the acquisition of indirect equity interests in VIL held by Analjit Singh and Neelu Analjit Singh taking its stake to 89 03 of VIL Today Vodafone acquired the remaining 10 97 of VIL from Piramal Enterprises Limited The combined cash consideration for both transactions was INR 101 418 billion 1 0 billion the company said in a statement Friday
Vodafone announced Friday that the company now owns its Indian business in its entirety and the deal will make India the second largest market for Vodafone after Germany once New York based Verizon Communications Inc NYSE VZ sells back its 45 percent stake worth 130 billion the Wall Street Journal reported quoting Vittorio Colao Vodafone s CEO
Vodafone is stuck in a long running tax dispute with the Indian government since 2007 and the country s tax authorities claim that the company owes more than 2 billion in capital gains taxes linked to the British telecom giant s acquisition of a controlling stake in Hong Kong based telecom company Hutchison Whampoa Ltd
Vodafone had added 4 9 million mobile customers in India until December while the parent company generated nearly 7 21 billion in revenues for the year ending March 2013 Vodafone s shares closed 2 7 percent lower on the Nasdaq exchange Thursday while shares of Mumbai based Piramal gained 5 77 percent in late afternoon trade on the BSE Sensex
The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long term return on equity Ajay Piramal chairman of the Piramal Group said in a statement released by the company adding I am glad to say that we have delivered against our targeted returns with this investment |
VZ | Can T Mobile Survive Without A Merger | By T Mobile attracted new customers at a breakneck pace with its Un Carrier initiative offering to pick up the tab for new customers willing to break contracts with their existing provider Some 1 3 million monthly subscribers were added in the first quarter of 2013 alone
But the cost of those early termination fees ETFs was steep bringing the wireless company fresh recruits at a loss of 151 million Some investors question whether the process is sustainable but BTIG Research analyst Walter Piecyk says that such losses are necessary for a telecommunications company to grow
Telecom is a scale business Piecyk told International Business TImes You want as much revenue for your fixed costs as possible so it s very important to grow revenue
T Mobile US Inc NYSE TMUS saw margins fall to 20 percent from 29 percent in January to March of last year but its revenue growth thanks to all the new subscribers have made it a very attractive prospect as Sprint Corp NYSE S pursues a merger of the two companies As it scales up the number of paying customers profits will fall in the short term
T Mobile returned to revenue growth for the first time in two years Piecyk says So the growth in subscribers more than offset the decline from some of their strategies
Similar to how subsidizing mobile phone purchases cost carriers when they signed customers to new contracts a business model T Mobile has eliminated in its move to prepaid telecoms care more about having a paying customer every month
At the end of the day no matter whether it s termination fees or leases it s still taking the same form of the same thing where you re subsidizing paying an upfront cost to get new customers Piecyk said That is an economic model that has existed in the wireless business for decades
While T Mobile returned to revenue growth for the first time in two years it is still far behind bigger carriers in customers Imagine riding on a Segway trying to catch up to sports cars driven by AT T Inc NYSE T and Verizon NYSE VZ in years past
This has been extolled as T Mobile s best quarter ever yet Verizon s market share of wireless service revenue increased in the first quarter as well Piecyk said In the best quarter that T Mobile ever reported the dominant player was still able to grow their market share
T Mobile is increasing the scale of customers paying their bills every month but to compete with the Big Two it will need to merge with Sprint Piecyk said the combination of Sprint and T Mobile would provide them with the needed scale to be more competitive
Strong subscriber growth may have a temporary impact on T Mobile s profits but the real challenge will be for the carrier to hold onto those customers You don t really buy loyalty that way in my view and those customers will switch back Verizon CEO Lowell McAdam said during a company webcast at this year s Consumer Electronics Show and Piecyk was inclined to agree
With the growth of wireless data usage it s going to be increasingly difficult for Sprint and T Mobile to individually be competitive with companies that can spend more than both of them combined on their network Piecyk said
Verizon lost 138 000 phone customers in the first quarter but added 539 000 new subscriptions overall thanks to tablets while AT T added 621 000 They ll have plenty of room if they elected to cut prices to take more share back from T Mobile Piecyk said
To continue to compete a combined T Mobile Sprint would be able to make additional pricing moves to gain customers or to create more loyal customers The way to do that Piecyk said is by offering a faster network
Competition is not always about the lower price its also about building a better network Piecyk said Since T Mobile and Sprint pay competitors to access their wireless networks it increases both companies costs By combining their spectrum and revenues the two would have an opportunity to build networks that have faster speeds than existing operators and the capacity to handle it
Combining T Mobile and Sprint is exactly what Softbank CEO Masayoshi Son plans to do The Japanese telecom owns the majority of Sprint but it will have to overcome many regulatory obstacles to do so including an FCC that credits T Mobile s success on its failed merger with AT T
If the merger succeeds then it could have an impact on the troubled wired broadband industry Piecyk said With the amount of spectrum and revenue the merger would provide the new company would be able to offer a product to the same customers who were most willing to cancel their landline telephones when they started paying for mobile retirees
My mom uses an iPad to go online Piecyk said Her Internet could be more than handled with a 5 gigabyte or so rate plan on LTE So why is she paying Comcast 50 a month for broadband
Follow Reporter Thomas Halleck on Twitter |
VZ | Comcast Partners With Japan s KDDI Taiwan Mobile | By Comcast Corp NASDAQ CMCSA is offering at least two Asian cellular operators access to its WiFi hot spots in the United States in trial partnerships that illustrate the cable company s ambitions to compete with U S wireless carriers
The deals with Japan s KDDI TOKYO 9433 and Taiwan Mobile allow their subscribers to use Comcast s WiFi hot spots when they travel to the United States reducing the international roaming charges that they would otherwise have to pay according to a Comcast spokesman
Comcast has been steadily building out its WiFi network and said last week that it aims to have 8 million hot spots by the end of the year covering 19 of the 30 largest U S cities The No 1 U S cable company is also seeking U S regulatory approval to buy Time Warner Cable Inc NYSE TWC which now has 34 000 WiFi hot spots
If the merger is approved the combined company would have a nationwide footprint that could potentially challenge the dominance of U S telecom giants Verizon Communications Inc NYSE VZ and AT T Inc NYSE T an idea that Comcast floated in an April 8 regulatory filing touting the deal s benefits
Since that filing investors have been trying to figure out what Comcast and other cable companies might be planning do in the mobile market The topic came up frequently in the latest round of quarterly earnings calls
Cable is well positioned to enter the wireless voice and data market with costs that are lower than those of existing wireless carriers New Street Research analyst Jonathan Chaplin said This could be truly disruptive with grave implications for new entrants and established wireless carriers alike
Comcast has adopted a more cautious tone We view WiFi and cellular as complementary There are many different situations and applications where consumers may prefer one or the other said Tom Nagel Comcast s senior vice president and general manager of wireless services
Comcast has not disclosed how much it is charging KDDI and Taiwan Mobile in these deals which were signed earlier this year The amounts are thought to be small since WiFi data fees are typically much lower than wireless data charges
A representative for Taiwan Mobile confirmed the Comcast partnership and directed Reuters to a website promoting the offer to its subscribers The website said subscribers normally pay T 4 per minute 0 13 minute to use Comcast WiFi but a promotion lasting until the end of June this year cuts that to T 2 a minute 0 07 minute
A representative for KDDI did not immediately respond to a request for comment
MOBILE INTERNET
U S pay TV and phone companies are casting around for new business models amid sky rocketing growth in mobile Internet use Satellite TV provider Dish Network Corp has spent billions of dollars on wireless spectrum and DirecTV is working with financial advisers on a possible merger with AT T
Even though cable WiFi networks are a potential competitor to wireless networks Comcast s Nagel said he believes cable and telecom companies could partner to make sure customers devices can more easily move between their networks
One day it should be that Sprint or any wireless carrier and Comcast can identify each other s devices and networks For example Sprint s device finds a Comcast access point and says Hey I think I can get on your network Nagel said
Building a wireless network from scratch is something cable companies considered over the past few years but never committed to due to the high costs involved
One advantage cable companies have is a large amount of fiber wire in the ground known as backhaul which they already rent out to wireless companies to handle data traffic
While cable companies have bought and sold wireless spectrum before analysts say the quickest way for a cable company to get into the cellular market would be to rent airwaves from wireless companies through a mobile virtual network operator agreement or MVNO Such an agreement would give cable companies wireless cover for areas outside the range of WiFi
New Street Research estimates that Comcast which already has MVNO agreements with Verizon NYSE VZ and Sprint NYSE S could capture about 6 percent of the retail wireless market within five years after its acquisition of Time Warner Cable |
XOM | Exclusive Exxon mulls Beaumont refinery crude unit addition | By Erwin Seba HOUSTON Reuters ExxonMobil NYSE XOM Corp is considering expanding light crude processing capacity at its Beaumont Texas refinery with the addition of a third crude distillation unit a company spokeswoman said on Thursday If approved construction could begin on Unit C in 2019 and be completed in 2022 said Exxon spokeswoman Charlotte Huffaker She declined to disclose the contemplated capacity or possible cost of the Unit C expansion These investments reflect the increased availability of abundant affordable supplies of U S light crude Huffaker said The expansion would be part of the 20 billion Growing the Gulf project announced in March by Exxon Chairman and Chief Executive Darren Woods While Exxon has mentioned potential expansion of light oil refining capacity at the Beaumont plant as part of that project this is the first time the company has talked about Unit C and given a timeline for possible construction Since at least 2014 Exxon has been considering the addition of a large distillation unit that would boost Beaumont s crude oil refining capacity from 362 300 barrels per day bpd to between 700 000 and 850 000 bpd sources told Reuters in 2014 and 2015 The contemplated crude capacity expansion was put on hold in early 2016 due to cuts in capital spending sources said at the time On Thursday night sources familiar with Exxon s plans said the company was now looking at adding a large crude distillation unit at the refinery The two crude units currently at the Beaumont refinery are Units A and B The last major expansion of a U S refinery was the 5 year 10 billion addition of a crude distillation unit and other units at Motiva Enterprises Port Arthur Texas refinery which more than doubled its size to 603 000 bpd The expansion was completed in 2012 The Motiva expansion was originally budgeted at 5 billion but went through a year long review in 2009
Last year Exxon added 20 000 bpd in light crude refining capacity to Unit A at the Beaumont refinery Huffaker said |
XOM | Senior U S envoy tries to calm fears over State Department re design | By Yeganeh Torbati WASHINGTON Reuters The No 2 U S diplomat on Tuesday sought to allay concerns among the State Department s rank and file employees over possible layoffs and perceptions of a lack of firm direction under the administration of President Donald Trump U S Secretary of State Rex Tillerson formerly chief executive of Exxon Mobil NYSE XOM and new to government has initiated a top to bottom re organization of the agency saying it will improve diplomats experience and help the department better meet 21st century challenges Re design is not a synonym for layoffs Deputy Secretary of State John Sullivan was quoted as saying by two officials who listened to his remarks to around 450 employees at a town hall style event that was closed to journalists Diplomats have fretted over a hiring freeze that has hampered their ability to switch jobs the slow pace of appointments to senior positions and a proposed 28 percent cut in State Department funding Sullivan acknowledged in remarks to a small group of reporters after the event that the pace of senior job hires had been frustrating Tillerson is not directing any specific outcome from the re design which is being led by senior career officials other than a better running and more efficient department Sullivan said According to the Partnership for Public Service which tracks political appointments the Trump administration has not yet put forward a nominee for 86 of 131 Senate confirmed positions at the department including posts leading diplomacy on the Middle East and East Asia where there are several potential crises No one here would say that we re pleased by the fact that we don t have more of our undersecretary and assistant secretary slots filled but we re working hard to do that Sullivan told reporters Sullivan said media portrayals of a listless bureaucracy and a hollowed out State Department that is not effective were wrong He said work was being done on major issues such as the North Korea nuclear and missile programs a rift between Gulf nations and Qatar and Ukraine State Department officials said the tone of the town hall event was professional with pointed exchanges of views at times One said that Sullivan s public appreciation for career diplomats has been desperately needed Sullivan s uncle was William H Sullivan the last U S ambassador to Iran who left in 1979 when Iran s monarchy was overthrown and replaced with an Islamic theocracy
In response to a question from an employee about State Department efforts for gay and lesbian couples posted abroad Sullivan told employees he would do everything he can to make sure everyone is treated fairly a remark that drew strong applause one of the officials said |
CSCO | Conspicuous Weakness In Market Internals A Bad Omen For Stocks | One week ago FactSet revealed that 250 of the stocks in the S P 500 had dropped more than 20 from all time peaks The index itself however had only declined a modest 5 from its record top
Today there are more indications of market distress The Russell 2000 a popular small cap barometer has dropped 13 from its high The Dow Jones Transportation Average has fallen 13 as well And the Financial Select Sector SPDR NYSE XLF is sitting at a 52 week low
Theoretically shares of financial institutions should perform well when the economy is firing on all cylinders However the investment community is expressing concern about higher interest rates and the credit risks associated with outstanding loans
Is another financial crisis lurking That depends on one s perspective on developments abroad
For example Italy s battle with the European Union has revived fears about bank exposure to Italian sovereign debt The iShares European Financials ETF NASDAQ EUFN is down 26 5 from its 52 week high water mark
In contrast price depreciation for U S assets has largely coincided with a hawkish Federal Reserve Chairman Powell and committee member colleagues appear resolute in hiking the overnight lending rate four more times by the end of 2019
On the surface pushing the Fed Funds Rate FFR from the 2 level to the 3 level across a 12 month span may not seem like a big deal On the flip side the shift from zero percent rate policy to where we currently stand 2 has adversely impacted mortgage rates and home affordability The latter is at a 10 year low
Another concern may be profit margins When one couples higher borrowing costs with higher labor costs U S dollar strength and tariffs it is not too difficult to forecast deceleration in U S corporate profit growth
It follows that some of the volatility and rapid fire selling of stock assets relate to investors rethinking valuations For instance year over year earnings growth comparisons lose the tax cut benefit in the first quarter of 2019 Higher overall costs are likely to hinder profitability And previous claims regarding a low rate justification for exceedingly high stock valuations falls by the wayside
At present market internals look horrendous Nearly one quarter of securities trading on the NYSE have hit 52 week lows In fact the New York Stock Exchange High Low Index has not pointed to market breadth this troublesome since the world s central banks e g Bank of Japan European Central Bank etc injected trillions of quantitative easing stimulus into the global financial system nearly three years ago
Back then the U S Fed backed off its four rate hike plan for 2016 by telegraphing an intention for a single year end hike The markets rejoiced Today the U S Fed is decidedly in favor of regular rate hikes and shows little indication of capitulating to critics
Back then the world s central banks were willing to create trillions of currency credits to push bond yields lower even negative Today None of the world s influential central banks are discussing emergency stimulus measures
Granted there may be little evidence of a U S based recession in sight Nevertheless decreasing liquidity tighter credit and asset price depreciation themselves can bring about recessionary pressure
Not sure about that Then you may have a short memory
A bursting of the technology stock bubble preceded the 2001 economic downturn It came about in a Fed tightening cycle Meanwhile the popping of the residential housing balloon preceded the Great Recession It occurred after the Fed kept rates too low for too long before slowly hiking rates 17 times to a level that it considered neutral
So here we are again Asset prices are falling or flat lining at a time when the overwhelming majority of economists and Fed committee members see nothing but blue skies for years to come
Me I see speculative behavior in clients that remind me of when I co hosted a national talk radio show in 1999 Then callers peppered me with inquiries about the New Economy s dot com revolution What did I think about Cisco NASDAQ CSCO JDS Uniphase JDSU and Sun Microsystems SUNW Now clients are interested in cryptocurrencies like bitcoin and cannibis stocks like Tilray NASDAQ TLRY
Even when we step outside of the crazes that emulate a MegaMillions lottery the notion of normal seems skewed Right now there are are more U S stocks trading at insane price to sales ratios of 10x revenue than at any moment since the 2000 tech top
I am not advocating a panicky run for the exit on all of one s holdings That said I see every reason to be patient with a larger than usual percentage allocation to cash equivalents |
CSCO | Strong revenues for Cisco Systems in spite of CEO Chambers departure | Investing com Days after outgoing CEO John Chambers reaffirmed a decision to leave his post later this summer Cisco Systems Inc NASDAQ CSCO posted strong earnings on Wednesday for the quarter that ended in late April
Cisco posted third quarter revenue of 12 1 billion a spike of 5 from the same period in 2014 Chambers who joined a startup founded by Cisco in 1983 ascended to company CEO 12 years later in 1995 Chambers 65 will be succeeded by Chuck Robbins who previously served as the company s senior vice president of Worldwide Field Operations
I am extremely honored and proud to have led Cisco for the last 20 years and to get us to this positive inflection point We have a tremendous opportunity to extend our lead in the industry and with Chuck Robbins as the CEO for Cisco s next chapter we have exactly the right leader to capture that opportunity I could not be more confident in our future Chambers said in a statement
Cisco also reported net income of 2 44 billion for the quarter or 0 47 per share By comparison the Silicon Valley based networking equipment company earned net income of 2 18 billion or 0 42 per share in the same quarter in 2014 Cisco credited a 6 increase in its switching systems division for the strong quarter
Cisco is in a very strong position and we delivered another solid quarter Our vision and strategy are working and we are executing very well in a tough environment as evidenced in our revenue growth profitability strong gross margins and cash generation Our customers feel the pace of change and disruption in every industry and market and know their success depends on digitizing their business Chambers added
Whether they are the disruptor or the incumbent they are coming to Cisco as their strategic partner We believe we are pulling away from our competition using the same formula we ve always used integrating our industry leading products in every category into architectures and solutions that deliver real outcomes We ve created this opportunity and it is ours to execute
Shares in Cisco Systems fell slightly by 0 20 or 0 68 to 29 14 Cisco shares are still up by more than 25 over the last year |
CSCO | Cisco profit edges past estimates despite weak telecom spending | By Anya George Tharakan and Arathy S Nair Reuters Cisco Systems Inc s O CSCO quarterly profit edged past market estimates as demand for new switches routers wireless gear and servers made up for sluggish spending by telecom customers and weak sales in emerging markets The network equipment maker is making a transition toward high end switches and routers and investing in new products such as data analytics software and cloud management tools Last month market research firm Gartner N IT forecast a decline in telecom services spending this year In terms of the whole service provider carrier spending we are not assuming that it s going to improve in the near future Chief Financial Officer Kelly Kramer told Reuters In his last post earnings conference call outgoing Chief Executive John Chambers also dispelled rumors that Cisco had bid 9 billion for FireEye Inc O FEYE sending the cybersecurity company s shares down 3 4 percent in extended trading Company veteran Chuck Robbins will take over as CEO when Chambers steps down in July after 20 years at the helm I will be his wingman Chambers said Several analysts have interpreted the transition as a signal of changing priorities of the company which is struggling to boost bottom line in the era of cloud computing Cisco said it expects an adjusted profit of 55 57 cents per share for the current quarter Analysts on average were expecting 56 cents per share according to Thomson Reuters I B E S The company also forecast revenue growth of 1 3 percent We are modeling the volatility in emerging markets to continue for several more quarters Chambers said Revenue from Russia fell 41 percent in the in the third quarter ended April 25 the company said Revenue from Brazil declined 10 percent and from China 20 percent Total revenue increased 5 1 percent to 12 14 billion ahead of an expected 12 07 billion On an adjusted basis the company earned 54 cents per share a cent more than what analysts expected The results were a solid execution in a tough environment said analysts at Cantor Fitzgerald The company s net profit rose to 2 44 billion or 47 cents per share from 2 18 billion or 42 cents per share a year earlier
Cisco shares were marginally down in after market trading on Wednesday |
VZ | Sector Earnings Update Can Telco Sustain Its Upside Momentum | I wanted to post this data from Thomson and Factset just to show how sector earnings data can be useful and how forward estimates can be impacted by M A
Here is the spreadsheet detailing the trends in revenue and forward earnings estimates for the Telecom sector
Q4 15 was the strongest quarter of Telco earnings growth in years per and much of it had to do with AT T s NYSE T acquisition of DirecTV Prior to T closing the DirecTV acquisition T was expecting 1 revenue growth in 2015 but after the Q3 15 closing expected T revenue growth for 2015 shot up to 12 and also finished the year at 12
Note how revenue and EPS growth accelerated for Telco through 2015 second spreadsheet and then look at the first link again and see what 2016 holds for the sector
The fascinating thing to me is that there are just 5 companies left in the Telco sector per the Thomson Reuters data and the two 800 lb gorilla s are T and Verizon NYSE VZ Why doesn t Standard Poors simply roll up the Telco sector into the Technology sector as Transports were rolled into Industrials years ago and leave it at that With Telco just 2 3 of the S P 500 by market cap it is relatively insignificant to the index although there are a lot of income investors and elderly piled into the stocks for the dividends no doubt
As a long time fan of T both as a customer and investor I am watching the stock here without any positions in either T or VZ The ability for AT T to drive free cash flow and synergies i e expense savings from the DirecTV merger is crucial We ll find out more in April 16 on how T is doing integrating DirecTV
Here is the weekly chart of T showing it near the top of a 6 year trading range
A trade through 38 39 on heavy volume and T makes sense as a capital appreciation play as much as a dividend play No question though the earnings expectations for 2016 are subdued
VZ is testing the 2013 high near 53 81 and T is testing the 2012 and 2013 highs near 38 50 38 80 Both stocks are at the high end of multi year trading ranges
Be careful out there |
VZ | Dow SPX Finally Turn Positive | Markets Even though all 4 indexes were negative in March the Dow and the S P 500 finally turned positive for 2016 However the NASDAQ and the Russell 2000 small caps are still in the red As you ll see in the Sectors section below all sectors were positive in March with Tech Energy and Utilities leading the way
Dividend Stocks Update These high dividend stocks go ex dividend this coming week Manhattan Bridge Capital Inc NASDAQ LOAN Pearson PLC NYSE PSO RAIT Financial Trust NYSE RAS Verizon Communications Inc NYSE VZ
Volatility The VIX fell 11 this week finishing at 13 10 its lowest close since August 17th
Currency The US dollar fell vs most major currencies in March
Year to date the USD has fallen vs most major currencies except the British pound
Market Breadth 29 of the Dow 30 stocks rose in March and 65 of the S P 500 also rose in March
US Economic News Nonfarm Payrolls fell to 215K in March less than the 245K created in February but better than the forecast Gains occurred in Retail Construction and Health Care while losses happened in Manufacturing and Mining
The Unemployment Rate went to 5 from 4 9
Week Ahead Highlights Fed minutes from last month s meeting will be released on Wed Fed Chief Yellen a talk with former Fed chiefs Ben Bernanke Alan Greenspan and Paul Volcker in New York Creditors resume talks with Greece about its latest bailout
Next Week s US Economic Reports
Sectors and Futures Tech led in March with Health Care trailing Year to date Utilities lead by a wide margin with Financials turning in the worst performance by far down 9 38 followed by Health Care which is down 5 90
OJ and Lumber futures led in March with Rough Rice and the USD trailing |
VZ | Vodafone To Buy Spanish Cable Operator For 10B | By British telecom giant Vodafone NASDAQ VOD will buy Spanish cable operator Grupo Corporativo Ono for 7 2 billion euros 10 billion to make deeper inroads into television and broadband Internet news reports said Monday citing sources
The deal is expected to be announced Monday and should get regulatory approval before summer Bloomberg reported citing sources Thomas H Lee Partners and Quadrangle Capital Partners two private equity firms together hold 54 4 percent of Ono which added 9 000 Internet customers and 183 000 mobile subscriptions but lost 17 000 cable TV customers in the fourth quarter of 2013
We are clearly interested in broadband in Spain we are clearly interested in offering our own solutions Vittorio Colao Vodafone s CEO reportedly said in Barcelona last month according to Bloomberg and increased the offer to Ono from 6 billion euros on March 5 to 7 billion euros
The deal will allow the British telecom major to compete with Spain s Telefonica and French company Orange which also has reportedly started searching for more acquisitions in Spain Last year Vodafone sold its 45 percent stake in New York based Verizon Wireless NYSE VZ for 130 billion to focus on Europe and emerging markets
In 2013 Ono s earnings before taxes depreciation and amortization fell to 686 million euros dropping 8 8 percent from the same period last year according to the New York Times
Vodafone had reportedly submitted a tentative offer for Ono last week just before the latter s annual meeting after which the due diligence process began Although Ono s initial public offering got shareholders approval at the annual meeting its board continued the discussion with Vodafone for a potential deal New York Times reported citing a source
According to data from Thomson Reuters deals in the last 12 months in the telecom sector including Vodafone s sale of its stake in Verizon Wireless increased by four times to 194 billion
French media reported last week that media conglomerate Vivendi may enter into negotiations with Altice for its mobile arm SFR in a deal worth 11 75 billion euros leading to a race between Altice and Bouygues Telecom to acquire SFR according to the Times |
XOM | Exxon profit nearly doubles but falls short of expectations | By Ernest Scheyder Reuters Exxon Mobil Corp NYSE XOM the world s largest publicly traded oil producer said on Friday its quarterly profit nearly doubled on surging margins at its operations outside the United States but results fell shy of Wall Street s expectations Shares of Irving Texas based Exxon fell about 1 9 percent in premarket trading to 79 30 While Exxon s U S portfolio including its shale projects lost money Exxon s gas and oil operations across the world posted a 69 percent jump in profit The company sold more gasoline and kerosene in the quarter boosting the bottom line as well but sales of chemicals slipped due in part to plant maintenance costs and weak margins Our job is to grow long term value by investing in our integrated portfolio of opportunities that succeed regardless of market conditions Chief Executive Darren Woods said in a statement The company posted second quarter net income of 3 35 billion or 78 cents per share compared to 1 7 billion or 41 cents per share a year earlier Analysts expected earnings of 84 cents per share according to Thomson Reuters I B E S Production fell about 1 0 percent to 3 9 million barrels of oil equivalent per day The results come as Exxon battles its shareholders and others over climate change issues Exxon has been locked in an aggressive back and forth skirmish over climate change documents with New York State Attorney General Eric Schneiderman who has sought to punish the oil producer for what he says are misleading public disclosures
Exxon s shareholders in May approved a resolution in May that called for the company to issue a report on how climate change affects operations The vote which was non binding passed with 62 percent of ballots cast and was a rare defeat for Exxon s management |
XOM | Eni to fast track first oil from Gulf of Mexico s Amoca field | Eni E 0 8 says it will fast track development of the first new field drilled by an international company in Mexico in nearly 80 years after discovering an estimated 1bn barrels of oil in the Gulf of Mexico s Amoca field earlier this year Eni CEO Claudio Descalzi tells Financial Times that plans are being prepared for an early production system that should deliver the first oil from Amoca in H1 2019 with potential for 50K bbl day The CEO says Mexico has become one of the best prospects in the global oil and gas industry providing a rare opportunity because it offers plentiful resources in shallow water close to the coastline of a relatively developed country with good infrastructure already in place Eni is targeting a breakeven point below 20 bbl from Amoca which lies off the coast in Campeche Bay west of the Yucatan peninsula Now read |
XOM | Trump administration sends conflicting signals on Russia sanctions | By Yeganeh Torbati WASHINGTON Reuters President Donald Trump grudgingly accepted new congressional sanctions on Russia the top U S diplomat said on Tuesday remarks in contrast with those of Vice President Mike Pence who said the bill showed Trump and Congress speaking with a unified voice The U S Congress voted last week by overwhelming margins for sanctions to punish the Russian government over interference in the 2016 presidential election annexation of Crimea and other perceived violations of international norms U S Secretary of State Rex Tillerson told reporters that he and Trump did not believe the new sanctions would be helpful to our efforts on diplomacy with Russia Trump has been clear that he wants to improve relations with Russia a desire that has been hamstrung by findings of U S intelligence agencies that Russia interfered to help the Republican against Democrat Hillary Clinton U S congressional panels and a special counsel are investigating Moscow denies any meddling and Trump denies any collusion by his campaign Tillerson who did business in Russia when he was chief executive of Exxon Mobil NYSE XOM has said repeatedly that the world s two major nuclear powers cannot have such a bad relationship The action by the Congress to put these sanctions in place and the way they did neither the President nor I were very happy about that Tillerson said We were clear that we didn t think it was going to be helpful to our efforts but that s the decision they made they made it in a very overwhelming way I think the president accepts that Tillerson stopped short of saying definitively that Trump would sign the sanctions saying only that all indications are he will sign that bill Vice President Mike Pence at a press conference in Georgia with Prime Minister Giorgi Kvirikashvili said unequivocally that President Trump will sign the Russia sanctions bill soon Pence acknowledged that the administration objected to earlier versions of the sanctions bill because it did not grant enough flexibility to the administration but said it improved significantly in later versions And let me say that in signing the sanction our President and our Congress are speaking with a unified voice Pence said White House spokeswoman Sarah Sanders said on Tuesday the sanctions bill was under review and would be signed There s nothing holding him back Sanders said at a news briefing Trump has until Aug 9 to sign the bill or veto it or it will automatically become law In retaliation for the sanctions Russian President Vladimir Putin said on Sunday that the U S diplomatic mission in Russia must reduce its staff by 755 people Russia is also seizing two properties near Moscow used by American diplomats Tillerson said Putin probably believes his response was a symmetrical action to Washington seizing two Russian properties in the United States and expelling 35 diplomats last December Of course it makes our lives more difficult he said
Tillerson said he and Russian Foreign Minister Sergei Lavrov would meet in Manila on the margins of next weekend s meetings of the Association of Southeast Asian Nations |
XOM | 3 Top Ranked Large Cap Value Mutual Funds For Great Returns | Large cap funds are better than small or mid cap ones for risk averse investors These funds have exposure to large cap stocks with a long term performance history and more stability than what mid or small caps offer Companies with market capitalization of more than 10 billion are generally considered large cap However due to their significant international exposure large cap companies might be affected by a global downturn Meanwhile investors looking for a bargain i e stocks at a discount are mostly interested in value funds that pick stocks having a tendency to trade at a price lower than their fundamentals i e earnings book value debt equity and pay out dividend In the long run value stocks are expected to outperform growth ones across all asset classes and are less vulnerable to trending markets However investors interested in choosing value funds for yield should check the mutual fund yield as not all value funds include only companies that primarily use their earnings to pay out dividend Below we share with you three top ranked large cap value mutual funds Each has earned a Strong Buy and is expected to outperform its peers in the future Investors can Vanguard US Value Investor seeks growth of capital and income over the long run VUVLX invests nearly all of its assets in undervalued stocks of companies that are domiciled in the U S The fund looks for price earnings P E ratios lower than industry averages in order to identify undervalued common stocks The fund primarily invests in companies with large and mid capitalization It picks undervalued stocks that also have impressive growth prospects Vanguard US Value Investor has returned 18 7 in the last one year period As of March 2017 VUVLX held 211 issues with 3 22 of its assets invested in Exxon Mobil Corp NYSE XOM American Funds American Mutual F2 primarily invests in common stocks securities convertible into common stocks non convertible preferred stocks U S government securities bonds rated A or better and cash AMRFX seeks appreciation of capital and a high level of income American Funds American Mutual F2 has returned 15 9 over the last one year period AMRFX has an expense ratio of 0 42 compared with the category average of 1 06 Fidelity Equity Dividend Income seeks reasonable income and capital appreciation FEQTX normally invests a major portion of assets in equity securities FEQTX also invests primarily in income producing equity securities which tend to lead to investments in large capital value stocks Fidelity Equity Dividend Income has returned 17 over the last one year period Scott Offen is the fund manager of FEQTX since 2011 To view the Zacks Rank and past performance of all large cap value mutual funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
XOM | Eni E Expands Footprint In Mexico With New Block Wins | Eni SpA NYSE E has been awarded three out of 10 offshore blocks by Mexico s National Hydrocarbon Commission CNH in the Sureste Basin situated in the Gulf of Mexico The first bids awarded under Ronda 2 saw CNH offer blocks located in water depth ranging between 20 to 500 meters in the Sureste and Tampico Misantla Basins Eni Mexico will be managing all the three licenses which include Block 10 Block 7 and Block 14 Eni will be the operator of Block 10 with a holding of 100 The partners in Block 7 are Eni Cairn and Citla holding 45 30 and 25 respectively The partners of Block 14 are Eni and Citla holding 60 and 40 respectively The contract awards which consist of production sharing agreements are subject to final approval by the authorities Eni s presence in Mexico dates back to 2006 The company established its wholly owned subsidiary Eni Mexico in 2015 The company has a 100 interest in Area 1 in the Sureste Basin Eni is successfully conducting an exploration and appraisal campaign in the Basin A fast track plan for the development of the Amoca field is being finalized with an early production phase The new blocks are linked to Area 1 and in the case of a successful exploration campaign will permit Eni to build up a new core area with considerable operational synergies in the country These awards are in line with the country s Energy Reform and boosts The company s presence in a market that opened up to foreign investments in 2014 which resulted in the offering of huge growth potential Eni s price chart is unimpressive Shares of the company lost 5 3 in the last three months while the Zacks categorized industry registered a decline of 0 1 in the same time span ExxonMobil NYSE XOM currently has a Zacks Rank 3 Hold Some better ranked stocks from the same space include SunCoke Energy Inc NYSE SXC Enbridge Energy L P NYSE EEP and Canadian Natural Resources Limited Ltd TO CNQ All these stocks sport a Zacks Rank 1 Strong Buy You can see SunCoke Energy delivered a positive earnings surprise of 120 in the preceding quarter The company beat estimates in two of the trailing four quarters with an average negative earnings surprise of 35 78 Enbridge Energy delivered a positive earnings surprise of 128 57 in the preceding quarter The company beat estimates in three of the trailing four quarters with an average positive earnings surprise of 38 22 Canadian Natural Resources delivered a positive earnings surprise of 30 77 in the preceding quarter It surpassed estimates in two of the trailing four quarters with an average negative earnings surprise of 275 46 Zacks Hidden TradesWhile we share many recommendations and ideas with the public certain moves are hidden from everyone but selected members of our portfolio services Would you like to peek behind the curtain today and view them Starting now for the next month I invite you to follow all Zacks private buys and sells in real time from value to momentum from stocks under 10 to ETF to option movers from insider trades to companies that are about to report positive earnings surprises we ve called them with 80 accuracy You can even look inside portfolios so exclusive that they are normally closed to new investors |
VZ | Daily Stock Market Forecast Monday Lower | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 2023 67 Holding below is bearish
Rest of week bias lower technically
Monthly outlook bias higher
Single stock trader ended
Happy New Year And good riddance to 2015 With all the holidays now out of the way and a full week of trading ahead of us to start off 2016 let s see what the charts have to offer us and what might be in store for Monday
The technicals
The Dow Last Thursday for anyone who can remember that far back the Dow plunged through its 200 day MA with a 179 point loss On top of that the indicators all started moving lower falling off of overbought and the stochastic gave us a completed bearish crossover All of that looks simply bearish for Monday
The VIX In contrast to an ugly looking Dow chart on Thursday the VIX while rising just over 5 did it on a very tall lopsided spinning top almost an inverted hammer Although indicators continue to rise they are no longer oversold and there is at least a suggestion of a reversal lower here for Monday
Market index futures Tonight all three futures are lower at 12 08 AM EST with ES down 0 77 Last Thursday like the Dow ES broke through its 200 day MA with a very ugly red candle making it two in a row to fall back to 2035 and a half That sent it just to the edge of overbought with a freshly completed bearish stochastic crossover The new Sunday overnight is now down nearly as much making this all look pretty grim indeed
ES daily pivot Tonight the ES daily pivot falls from 2061 00 to 2041 17 ES remains below its new pivot so this indicator is clearly bearish
Dollar index After falling relentlessly through the last half of December the dollar has now reversed course and exited that descending RTC We now in fact have a bullish trigger on that as indicators continue to rise off of oversold The dollar last Thursday in fact rose 0 4 and with no resistance now until back in the middle of December it looks like it will test its upper BB on Monday at 66 32 on the USD UPX
Euro Similarly the euro is now has now fallen out of its rising RTC from last month and last Thursday continued that descent falling all the way back down to 1 0859 Indicators are now oversold but the stochastic is still a long way from even starting a bullish crossover And with the lower BB now not too far away at 1 0821 I wouldn t be surprised to see the euro test that level on Monday
Transportation After a decidedly weak showing on Wednesday last Thursday the trans fell further but this 0 38 loss was on a red spinning top Although the indicators are all now moving lower just short of overbought there s at least the suggestion of reversal here for Monday though one which requires confirmation
This wasn t too bad Four months of four digit returns and only one losing month Recall that the Dow points are calculating by taking abs Dow open Dow close and adding that number to each month when I called the close correctly and subtracting it when I was wrong
For conditional calls I increment the conditional column when I m right and the wrong column when I m wrong but I don t take any Dow points for conditional calls since there s no fixed starting value for them The no call column is a bit of a misnomer That gets incremented when I make an uncertain call
On days when I make no call at all like if I take a vacation then nothing gets changed I think this is a pretty reasonable way to gauge my effectiveness at calling the action of the market a day ahead of time And the winner is
The first day of January is historically quite bullish but I don t think that s going to be the case this year The charts are uniformly bearish and the futures tonight are looking just plain awful apparently on some bad economic news from our pals the Chicoms I m afraid I m just going to have to call Monday lower This doesn t bode well for the First Five Days of January indicator either
Single Stock Trader
This feature was pretty much a bust in 2015 I had high hopes for swing trading N VZ after it started off oscillating nicely But that pattern broke off after a few months and then the rest of the year gave us very few opportunities to do anything productive with it So until I figure out something more interesting the idea of following a single stock all year long is finished |
VZ | Thursday s Market Forecast Is It 2008 All Over Again | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday uncertain
ES pivot 1845 92 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
YM futures trader N VZ not a swing trade buy
OK so we all know what happened on Wednesday it was Stockopalypse Now I ve been resisting the temptation to compare this to 2008 because everyone s been saying how this isn t 2008 Then I got one of those emails from one of my brokers today about how it was important to stay the course and not to panic etc The last time I got one of those was in yes 2008 So let s take a good look at the bogeyman 2008 Here he is on the left
OK and then here s today s action on the right Click to enlarge as they say Take a look at the action of October 2008 compared to January 2016 The similarities are striking I d say
OK so in the meantime let s see where the world is going on Thursday before it comes to a sudden and awful end
The technicals
The Dow The Dow s monthly low close of last August was 15 666 interesting how that 666 keeps coming up isn t it 666 was also the SPX low in 2009 On Wednesday we retested that low successfully as it turns out The resulting candle was a fat hammer the biggest we ve seen this year so far and on heavier than normal volume If you don t believe the Dow will hit zero in April then you must believe there comes a point when all the margin calls have been satisified all the scaredy cats have fled and all the shorts have shorted all they dare I don t know if Wednesday was capitulation but the headlines in the paper and on the TV news were all about the stock market And that s always a good sign the bottom is near Of course when we get into these sorts of death spirals we have to see confirmation so I can t call it just yet
The VIX I was thinking the VIX might go lower on Wednesday but instead it gained nearly 6 on a giant lopsided long legged doji star that tested its upper BB before falling back Once again the upper BB proved to be the third rail of the VIX With two thirds of a bearish evening star now in place I m thinking this could be a sign that the VIX moves lower on Thursday
Market index futures Tonight all three futures are higher at 12 34 AM EST with ES up 0 08 Mr Market must have had an excellent lunch on Wednesday because shortly after 12 30 PM the market began reversing its ugly declines of the morning with ES ending the day on a very tall classic hammer This candle also marked the second day trading outside the year long descending RTC and that qualifies as a bullish trigger Whether or not that actually means anything remains to be seen However we note that the new overnight is trading non trivially higher Also the indicators all continue slowly but steadily rising off of oversold and that eventually has to count for something
ES daily pivot Tonight the ES daily pivot rises again from 1878 92 to 1845 92 That again places ES back above its new pivot so this indicator continues its flip flopping this time back to bullish
Dollar index Last night the dollar disconfirmed Tuesday s dark cloud cover by gaining 0 14 on a small doji star Indicators remain overbought but the action over the past week has been herky jerky and therefore I just can t come up with a valid reason to call it one way or the other tonight
Euro And it s pretty much the same story with the euro which seems to be stuck lately in a congestion range between the area of 1 086 and 1 096 The indicators are pretty much all just moving sideways so they are no help And the bottom line here is that I am not touching this chart either tonight
Transportation In something of an odd bullish divergence of sorts on Wednesday the trans lost only 0 48 in other words three times better than the performance of the Dow The resulting candle was a very long legged doji star on increased volume Indicators remain oversold so the next move could just possibly be higher although given the performance year to date this requires confirmation
Tonight we have a successful retest of the August lows and big hammers on the charts usually good reversal signs But the prevailing sentiment has been just so awful for so long lately that I m leery of calling the market higher I d say we re overdue for a reversal but none of the reversal signs has been panning out all year so far We re also not close enough to the ES pivot to make a conditional call so I guess all that leaves is Thursday uncertain
YM Futures Trader
Ugh Don t even ask |
XOM | Unrest bubbles among Trump s key foreign policy aides sources | By John Walcott WASHINGTON Reuters Frustration is mounting among leading foreign policy officials in President Donald Trump s administration as they chafe at some policy and bureaucratic defeats and complain they lack independence to do their jobs officials say The clash between internationalists urging the traditional U S leadership role in the world and advocates of an America First approach has worn down foreign policy and intelligence professionals inside the government according to the officials Secretary of State Rex Tillerson has told friends he will be lucky to last a year in his job according to a friend while two officials said national security adviser H R McMaster was frustrated by what he sees as disorganization and indiscipline on key policy issues inside the White House A source familiar with the situation told Reuters that Tillerson was very upset at not having autonomy independence and control over his own department and the ability to do the job the way the job is traditionally done The source said he had heard nothing about any possible departure but added The situation doesn t seem to be getting any better and in some respects appears to be getting worse R C Hammond Tillerson s spokesman denied Tillerson was considering leaving or that his frustrations were boiling over saying he had plenty of reasons to stay on the job and all of them are important to America There s a desperate need for American leadership in the world and that s where the secretary s focusing his attention he said Tillerson scored a policy win last week when the administration certified albeit reluctantly that Iran was complying with the 2015 nuclear deal under which Tehran agreed to restrain its atomic program in exchange for sanctions relief He was upset however by fierce internal criticism from Trump as well as his chief strategist Steve Bannon and White House aide Sebastian Gorka over the decision said another U S official who spoke on condition of anonymity The secretary does not feel that White House staff members should be in a position to conduct hostile cross examinations of Cabinet officials the official said Hammond disputed the account of harsh discord between Trump and Tillerson regarding recertifying the Iran nuclear deal saying I don t buy this whole thing that there are tensions Developing public policy is about vetting out ideas he said Following last month s move by Saudi Arabia the United Arab Emirates Bahrain and Egypt to boycott Qatar which they accuse of financing extremist groups and supporting terrorism Tillerson publicly asked the nations to ease their blockade and put the onus on both sides to end the crisis Less than 90 minutes later Trump accused Qatar of being a high level sponsor of terrorism and suggested he had helped plan the Qatar action with Arab leaders As a government we offered some confusing signals but we ve since been able to clear up and clarify that Hammond said Politico reported last month that Tillerson was furious with Johnny DeStefano the head of the presidential personnel office for torpedoing proposed nominees to key State Department posts DISRUPTIVE FIGURE Senior national security officials said McMaster was dismayed that his recommendations backed by his senior director for Russia Fiona Hill about taking a tough stance with Russian President Vladimir Putin had been ignored Trump has questioned the U S intelligence community s conclusion that Russia interfered in the 2016 U S presidential election to try to help him defeat Democrat Hillary Clinton McMaster a three star Army general who once praised Trump as a disruptive figure is also troubled by a protracted debate about sending more U S forces to help Afghanistan reverse gains by the Taliban officials familiar with the matter told Reuters Asked to respond to the characterizations of the views of McMaster and other officials a White House official said Assertions not of fact but of state of mind in internal thought have no place in a story like this While circumspect Tillerson talked about the challenges of his new job earlier this month telling reporters that it differed from his former role as chief executive of Exxon Mobil Corp NYSE XOM where I was the ultimate decision maker That always makes life easier I knew what to expect and we had very long standing disciplined processes and decision making he said Those are not the characteristics of the United States government Additonal reporting by Steve Holland and Yeganeh Torbati Writing by Arshad Mohammed Editing by Peter Cooney |
XOM | Exxon Mobil declares 0 77 dividend | Exxon Mobil NYSE XOM declares 0 77 share quarterly dividend in line with previous Forward yield 3 82 Payable Sept 11 for shareholders of record Aug 14 ex div Aug 10 Now read |
XOM | The Day Ahead Top 3 things to watch | Investing com Here s a preview of the top 3 things that could rock markets tomorrow
US GDP to show rebound in second quarter
The U S economy is expected to show an improvement in the second quarter with the release of preliminary GDP figures due Friday as economist forecast GDP grew at an annualised rate of 2 5 in the second quarter from the first when it increased just 1 4
The GDP data comes a few days after the Federal Reserve stood pat on interest rates leaving its benchmark rate at a target of 1 00 1 25 while expressing concerns about the slowdown in inflation
Following the release of GDP data investors are expected to carefully monitor movements in the dollar against its rivals after it rebounded from 14 month lows on Thursday
Slowdown in US rigs to continue
The weekly instalment of drilling activity from Baker Hughes on Friday will provide investors with fresh insight into U S oil production and demand after the number of active drilling rigs has slowed in recent weeks
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand
At Thursday s settlement price crude futures remained on track to post a third straight week of gains on the back of bullish U S crude inventory data showing supplies dropped for a fourth straight week
Exxon Mobil earnings on tap
Exxon Mobil NYSE XOM is set to release its second quarter results before U S markets open on Friday
The oil major is expected to report a dip in earnings and free cash flow amid lower upstream earnings following a slump in oil prices in the second quarter
In the second quarter of the year crude prices averaged 48 24 a barrel falling from 51 77 a barrel in the first quarter as investors continue to fret about surplus crude supplies in the market
For the second quarter Exxon Mobil is expected to report earnings of 0 83 per share up from 0 41 in Q2 2016 on revenue of 61 16 billion |
XOM | Exxon Mobil misses by 0 06 beats on revenue | Exxon Mobil NYSE XOM Q2 EPS of 0 78 misses by 0 06 Revenue of 62 9B 9 0 Y Y beats by 980M Shares 0 4 PM Press ReleaseNow read |
CSCO | Cisco CSCO Down 2 6 Since Earnings Report Can It Rebound | A month has gone by since the last earnings report for Cisco Systems Inc NASDAQ CSCO Shares have lost about 2 6 in that time frame
Will the recent negative trend continue leading up to its next earnings release or is CSCO due for a breakout 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 drivers
Recent EarningsCisco Systems delivered third quarter fiscal 2018 non GAAP earnings of 66 cents per share coming ahead of the Zacks Consensus Estimate by a penny Further the figure rose 10 from the year ago quarter Revenues increased 4 4 year over year to 12 463 billion and marginally surpassed the Zacks Consensus Estimate of 12 421 billion Acquisitions contributed 120 basis points bps to revenue growth in the quarter Strength witnessed in company s Security and Applications segments drove year over year growth Order strength and improving traction of the subscription based model were other tailwinds Top line DetailsProducts 74 7 of total revenues increased 4 7 to 9 30 billion Services 25 3 advanced 3 4 to 3 16 billion This was driven by growth in software and solutions services Almost 32 of the revenues were recurring in nature gaining 2 from the year ago quarter Revenues from subscriptions represent 55 of the company s software revenues Recurring software and subscriptions generated 5 6 billion deferred product revenues which surged 29 from the year ago quarter Geographically Americas EMEA and APJC reported revenue growth of 2 9 and 7 on a year over year basis respectively Total emerging markets grew 7 and the BRICs plus Mexico climbed 12 In terms of customer segments enterprise increased 11 while service provider dropped 4 However commercial and public sector rose 7 and 2 respectively Total product orders increased 4 Cisco has realigned Product segments into four distinct categories infrastructure platform applications security and other Wireless Switching Witnessed GrowthInfrastructure Platforms 57 5 of third quarter revenues comprise Switching NGN routing Wireless and Data Center solutions Revenues inched up 2 from the year ago quarter to 7 16 billion The year over year increase was primarily due to robust growth across switching wireless and data center business Switching revenues increased witnessed strong growth across campus and data center Adoption of new campus switch Cat9K 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 However continued weakness in service provider which led a slowdown in enterprise routing business remained a headwind during the quarter Management stated that the subscription based Catalyst 9000 switching platform has been adopted by more than 5 800 customers up 2 700 sequentially Moreover results benefited from the continuing customer shift to 100 gig architectures Additionally rapid adoption of multi cloud infrastructures was a key catalyst Cisco s ACI solution continues to witness traction The company believes that ACI customers are gaining from increased business agility owing to network automation simplified management and improved security features of the product Management remains optimistic on the newly introduced ACI SDN offering AppDynamics Drive GrowthApplications 10 5 of third 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 19 from the year ago quarter to 1 31 billion In the quarter Cisco integrated its Cisco Spark with Webex Platform which enhanced Webex Meeting and enabled it to introduce Webex Teams further strengthening the company s collaboration portfolio Collaboration revenues rose primarily driven by growth across AppDynamics UC infrastructure and TelePresence endpoints Security Remains StrongSecurity 4 7 of revenues climbed 11 to 583 million The results were noticeable as deferred revenues surged 38 from the year ago quarter Strong growth can be attributed to solid demand witnessed by web security unified threat and advanced threat solutions Cisco s AI driven Talos intelligence platform blocks 20 billion threats per day The company is striving to leverage machine learning to deploy security platforms to mitigate online risks on a real time basis Other ProductsOther Products segment 2 of revenues contains service provider video cloud and system management and various emerging technology offerings Revenues fell 6 to 249 million A positive development pertaining to the sector is the recent divestiture of a portion of company s previously acquired NDS video assets This move is likely to mitigate the sluggishness persistent in this segment Operating DetailsNon GAAP gross margin contracted 40 bps from the year ago quarter to 63 9 Management claims that the decrease can be attribute to higher memory pricing This is anticipated to persist in the near term Non GAAP operating expenses during the quarter came in at 4 05 billion up 5 7 year over year Non GAAP operating expenses as percentage of revenues expanded 40 bps to 32 5 As a result non GAAP operating margin contracted 80 bps to 31 5 Balance Sheet and Cash FlowCisco exited the third quarter with cash cash equivalents and investments balance of almost 54 43 billion down from 67 97 billion in the prior year quarter Cash cash equivalents and investments available in the United States at the end of quarter were 47 5 billion The company generated 2 42 billion cash flow from operations down from the year ago figure of 3 3 billion In the third quarter Cisco repurchased approximately 140 million shares of common stock for 6 02 billion translating to an average price of 42 83 per share Furthermore the company paid a cash dividend of 33 cents per share GuidanceFor fourth quarter fiscal 2018 revenues are expected to grow 4 6 on a year over year basis Non GAAP earnings are anticipated between 68 cents and 70 cents per share Non GAAP gross margin is expected in the range of 63 64 while operating margin is anticipated between 29 5 and 30 5 for the quarter
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates There have been six revisions higher for the current quarter
Cisco Systems Inc Price and Consensus
VGM Scores
At this time CSCO has an average Growth Score of C however its Momentum is doing a lot better with an A The stock was allocated a grade of B on the value side putting it in the second quintile for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Based on our scores the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising Interestingly CSCO has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
XOM | BP Reliance To Invest 6 Billion In Gas Blocks In India | BP plc LON BP NYSE BP and Reliance Industries have planned an investment of 6 billion to augment India s gas output from an east coast block D6 The companies are collaborating after eight years and plan to work in an area where both face troubles while increasing their production These companies aim to expand their tie up in order to meet the South Asian nation s growing fuel and renewable energy demand India is substituting China as the driver of fuel demand growth globally Per the International Energy Agency India is expected to account for 25 of global energy use by 2040 BP targets to sell fuel in India in collaboration with Reliance which runs the world s biggest refining complex and is chaired by billionaire Mukesh Ambani BP has a license to sell jet fuel and construct 3 500 fuel stations in India Per India s pricing formula higher profits is given to retailers with refining plants or domestic supply sources Ambani stated that the partnership would also look at opportunities in trading that could include products such as oil gas fuels liquefied natural gas LNG power and carbon BP S CEO wants to draw level with production volumes of its biggest rivals ExxonMobil Corporation NYSE XOM and Royal Dutch Shell LON RDSa plc Therefore it is banking on Indian policy moves and a favorable investment climate to unlock the resources BP has decided to revive gas sales joint venture with Reliance The companies aspire to develop about 3 trillion cubic feet of resources that will result in incremental output of 30 35 million cubic meters a day between 2020 and 2022 from the D6 block in the Krishna Godavari basin This will facilitate India s gradual shift to a gas based economy In 2011 BP entered into India s exploration sector when it inked a 7 2 billion deal to acquire a 30 stake in some oil and gas blocks operated by Reliance It created gas sourcing and marketing tie ups with the Indian conglomerate The gas joint venture is marketing some of the LNG sourced from BP s portfolio The initial contract awards will be given by the companies for work in the R series ultra deep water gas fields in the block lying 70 kilometers offshore Plans for development of the satellite and D 55 fields in the block will be presented to the government before the end of 2017 Gas production from the KG D6 block has declined by over 85 from its peak in 2010 Output was about 7 4 million cubic meters a day in the quarter ended March 2017 compared with 54 5 million in the three months ended December 2010 just before BP purchased a 30 stake Investor confidence on the BP stock is reflected in its price chart Shares of the company gained 2 7 in the last three months while the Zacks categorized industry registered a decline of 1 0 in the same time span BP currently has a Zacks Rank 3 Hold Another better ranked stock from the same space includes Enbridge Energy L P NYSE EEP which sports a Zacks Rank 1 Strong Buy You can see SunCoke Energy posted a positive earnings surprise of 120 in the preceding quarter The company beat estimates in two of the four trailing quarters with an average negative earnings surprise of 35 78 Enbridge Energy posted a positive earnings surprise of 128 57 in the preceding quarter The company beat estimates in three of the four trailing quarters with an average positive earnings surprise of 38 22 Canadian Natural Resources posted a positive earnings surprise of 30 77 in the preceding quarter It surpassed estimates in two of the four trailing quarters with an average negative earnings surprise of 275 46 3 Top Picks to Ride the Hottest Tech TrendZacks just released a Special Report to guide you through a space that has already begun to transform our entire economy Last year it was generating 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for those who make the right trades early |
CSCO | Dow Drops 100 Points As Oil Surges On Saudi Airstrikes In Yemen | By
Dow Jones Industrial Average dropped more than 100 points Thursday morning after tensions in the Middle East escalated overnight triggering fears over crude oil supply Saudi Arabia began military airstrikes in Yemen sending oil prices surging as much as 6 percent overnight title Reuters Brendan McDermid The Dow Jones Industrial Average dropped more than 100 points Thursday morning after tensions in the Middle East escalated overnight triggering fears over crude oil supply Saudi Arabia began military airstrikes in Yemen sending oil prices surging as much as 6 percent overnight rel external image
U S stocks traded sharply lower Thursday with the blue chip Dow Jones Industrial Average tumbling more than 100 points Investor sentiment was tempered after tensions in the Middle East escalated overnight triggering fears over crude oil supply Saudi Arabia began military airstrikes in Yemen sending oil prices surging as much as 6 percent
In morning trading Thursday the Dow Jones Industrial Average INDEXDJX DJI which measures the share prices of 30 large industrial companies dropped 115 51 points or 0 65 percent to 17 603 03 The Standard Poor s 500 INDEXNASDAQ IXIC lost 13 04 points or 0 63 percent to 2 048 65 The Nasdaq composite INDEXSP INX fell 44 17 points or 0 87 percent to 4 834 31
Airstrikes from Saudi Arabia and its Gulf allies raised concerns about the security of Middle East oil shipments Yemen is on the Bab el Mandeb Strait one of the world s main transit points for seaborne trade In morning trading Brent crude the benchmark for global oil prices rose more than 1 5 percent Thursday to 57 98 a barrel for May 15 delivery on the London ICE Futures Exchange West Texas Intermediate crude the benchmark for U S oil prices 2 8 percent to 50 59 a barrel for May 15 delivery on the New York Mercantile Exchange
U S stocks edged lower in premarket trading after Atlanta Federal Reserve President Dennis Lockhart warned U S economic growth in the first quarter looks very soft he told CNBC Thursday ahead of his speech at an investment education conference in Detroit The Fed policymaker also said an interest rate hike from the central bank should come in the middle of the year or later
Meanwhile St Louis Federal Reserve President James Bullard said now may be a good time to start normalizing U S monetary policy he said during a speech on monetary policy in Frankfurt Germany Thursday Bullard is not a voting member on the Federal Open Market Committee this year the central bank s board that determines the direction of monetary policy However Lockhart is a voting member in 2015
Dow component Cisco Systems Inc NASDAQ CSCO dropped more than 2 percent Thursday to 26 89 leading most blue chips lower while Exxon Mobil Corporation NYSE XOM was the largest gainer in the index advancing more than 0 5 percent to 85 31
Shares of Lululemon Athletica Inc NASDAQ LULU jumped more than 4 percent to 63 65 after the athletic apparel retailer reported fourth quarter earnings that topped forecasts beating estimates by 5 cents with quarterly profit of 78 cents per share However the company s forecast for the current quarter fell short of Wall Street estimates
Separately the number of Americans filing unemployment benefits fell to a five week low last week after jobless claims dropped 9 000 to a seasonally adjusted 282 000 for the week ended March 21 the Labor Department said Thursday Economists had expected claims to decline to 290 000 last week according to analysts polled by Thomson Reuters |
VZ | VIX Ready To Move Lower So Calling Thursday Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2052 00 Holding below is bearish
Friday bias uncertain technically
Monthly outlook bias higher
Single stock trader N VZ not a swing trade buy
Recap
Things were looking great for my call for a higher close Wednesday until oil collapsed again That sent the rest of the market lower after a wild ride that saw triple digit moves both up and down in the Dow before ending with a 76 point loss Tonight I m short on time again so it s another Night Owl Lite night
The technicals
Market index futures Tonight all three futures are higher at 12 18AM EST with ES up 0 38
ES daily pivot Tonight the ES daily pivot falls from 2063 50 to 2052 00 That still leaves ES below its new pivot so this indicator continues bearish
I think things got a bit overextended on Wednesday and the VIX is now looking ready to move lower finally so I m going to try this again and call Thursday higher
Single Stock Trader |
VZ | Friday s Forecast Market Futures To Move Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Friday higher
ES pivot 2053 33 Breaking above is bullish
Next week bias uncertain technically
Monthly outlook bias higher
Single stock trader N VZ not a swing trade buy
It s been quite an interesting week in the markets so far Many of the charts are in play right around their 200 day moving averages and oil still seems to be in the driver s seat With yet another surprising move on Thursday we turn the charts to try to make some sense of all of these shenanigans for Friday
The technicals
The Dow After finding support at its 200 day MA on Tuesday the Dow broke under on Wednesday but put in a gigantic spinning top the likes of which I ve never seen and I went all the way back to the crazy days of 2008 I figured that was a good reversal sign and indeed on Thursday the Dow moved higher again to just barely reclaim the same MA on a tall inverted hammer Indicators continue to be confused some rising some falling halfway between overbought and oversold so there s no guidance there However on Thursday the Dow closed above the MA so I think that number will now serve as support So if anything there s a good possibility of the Dow could add to these gains on Friday
The VIX On Wednesday the VIX touched its upper BB at 19 93 and right on cue it backed off it And as I ve often said the upper BB generally spells the end of a VIX rally That proved to be the case on Thursday as the VIX lost 1 38 bouncing off that same upper BB with a small doji star Indicators are now just short of overbought and with the star in place there s at least the suggestion that the VIX could go lower again on Friday
Market index futures Thursday night all three futures were higher at 12 11 AM EST with ES up 0 17 After breaking below its 200 day MA on Wednesday things weren t looking so hot for ES But on Thursday it managed to post a small gain closing back up to 2049 25 just shy of its 200 day MA after some intraday excursions above that level That could be taken as a failed test of the MA but we have the benefit of the new Thursday overnight which is showing a nice gap up over that level and making it look like it has enough gas in the tank for a move higher on Friday Note also that the stochastic is now on the verge of a bullish crossover and volume has increased
ES daily pivot Tonight the ES daily pivot ticks up from 2052 00 to 2053 33 That s just barely enough to put ES negligibly below it new pivot I m calling this one a wash
Dollar index After getting hammered over the course of the past week the dollar seems to have finally bottomed on Wednesday stopping just short of its 200 day MA Indicators are now quite oversold and we got a decent bounce up 0 64 on Thursday This makes it look like more upside could be coming on Friday
Euro And the euro was also telling us something on the charts on Thursday After a big gain on Wednesday that just touched its 200 day MA it retreated significantly retracing those gains on Thursday With that MA now serving as resistance the indicators all overbought and a negative candle on the books it looks like there s more downside to come on Friday The action lower in the overnight seems to support that idea
Transportation The trans have been getting absolutely hammered for three weeks now but after a giant decline on Tuesday that had a whiff of panic to it on Wednesday the trans found a bit of buying coming in in the form of a classic spinning top doji star and then that was confirmed on Thursday with a 0 57 gain its first up day since December 4th That confirms the spinning top and makes it look that there could be more upside coming on Friday particularly with the indicators now all being significantly oversold
With the charts generally looking at least modestly bullish and certainly not bearish and with ES having regained its 200 day MA and carrying higher though the overnight so far anyway I m going to go out on a limb and call Friday higher Keep in mind there s some economic news coming out on Friday that could easily derail that given the fragile state of Mr Market s personality lately but for now that s what I see
That s all she wrote See you again Sunday night
Single Stock Trader
Last night I said that Verizon was not a buy and indeed on Thursday was only one of a handful of losers on the Dow down four cents But the chart is even worse than that with a freshly completed bearish stochastic crossover and three spinning tops in a row now There are no bullish signs at all on this chart It is definitely still not a swing trade buy or a buy of any other kind |
VZ | Monday Higher ES Pivot 2023 67 | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday higher
ES pivot 2023 67 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader N VZ not a swing trade buy
Well it looks like I picked a bad day to be wrong last Friday as the Dow Jones tanked 310 points with all 30 components lower in a broad based sell off as oil continued to sink That led to some important changes so let s take a look at them as we start off what may be the most momentous week in a long long time as the market is just waiting for the Fed announcement on interest rates The fact that it s an options expiration doesn t help matters either One thing s for sure we re in for a bumpy ride
The technicals
The Dow The 200 day MA proved to be no support at all as last Friday the Dow broke right through it for its biggest drop since August stopping only on its lower BB And even this giant 1 76 crash wasn t enough to take the indicators oversold They re all heading lower but still not there yet The Dow successfully tested support from the November lows though which is about the best that can be said for it Other than that there s nothing at all bullish about this chart tonight
The VIX Last Thursday night I noted that the VIX had touched its upper BB and suggested that might mean it could go lower on Friday That proved to be a very bad suggestion as instead the VIX popped an astonishing 26 on Friday on a giant gap up green marubozu that blasted right through its upper BB to not only close above 20 but almost 25 for its highest finish since the last big spike we got back in September That was enough to drive the indicators overbought and even send the stochastic starting to curve around for a bearish crossover But we re not there yet so it s too soon to call this chart lower on Monday Sometimes when the VIX gets this excited it takes it a few days for it to come back to its senses
Market index futures Tonight all three futures are higher at 12 59 AM EST with ES up 0 49 Perhaps the ugliest charter last Friday came from ES After stopping right on its 200 day MA on Thursday on Friday it was completely unable to make any headway at all and crashed right back down through its lower BB at 2018 50 and then kept right on going to close at 2009 75 That was its worst showing since last September It was also enough to send the indicators oversold and it stopped just shy of the November lows Interestingly the new Sunday overnight seems to be attempting to stage something of a small rally and after such a big one day lost one might expect at least a DCB on Monday
ES daily pivot Tonight the ES daily pivot dives from 2053 33 to 2023 67 That still leaves ES below its new pivot although it appears to be making an attempt to climb out of its crater as I write But for the time being this indicator continues bearish
Dollar index I missed the dollar last Thursday night too Instead of rising it gave up all of Thursday s gains and then some for a 0 44 decline that sent it right back oversold The stochastic is now threaded out at a low level so is useless for predictive purposes at this point The candlestick is something of a lopsided bearish engulfing pattern though so if anything this chart looks lower again on Monday
Euro And of course I missed the euro on Friday too After looking lower Thursday night instead it climbed right back up to close at 1 0992 leaving it still overbought However the new Sunday overnight is actually going higher again now back over 1 10 And with the 200 day MA now at 1 1038 not too far away it s entirely possible the euro might want to take a look at that level on Monday
Transportation And finally as bad as the Dow s 1 76 dump was last Friday it was only worse with the trans which loss 1 91 on a tall red marubozu This continues what is now a three week long waterfall decline dribbling down their lower BB and is now as bad as it was last August Indicators continue to be oversold but that doesn t seem to help any And there s no support from here until the August bottom at 7465 So just like the Dow there s nothing bullish about this chart either tonight and Dow Theory wise that ain t a good sign
I m probably a fool for even attempting to make any calls on an op ex week featuring such a big Fed meeting but here goes anyway I think Friday s action was overdone to the down side Note particularly that the SPX Hi Lo indicator has now hit 2 5 and that s definitely the territory from which rallies spring We re also at a few key support levels and with no economic news scheduled for Monday I m just going to give this another try and call Monday higher Hey I can t be wrong forever
Single Stock Trader
At least I was right last Thursday night when I called Verizon lower because on Friday it dropped another 1 1 on a tall gap down inverted hammer And even that only left the indicators about halfway between overbought and oversold With no support now until 44 58 I see no sign of a move higher on Monday |
VZ | With Fed News Ahead Calling Wednesday Uncertain | The Hoot Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 2039 50 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader N VZ not a swing trade buy
It s nice to see the technicals play out as expected for once and on Tuesday they delivered nicely with a 156 point gain in the Dow I was a bit surprised to see a move this big ahead of the Fed but it is what it is Moving forward it is my standing policy to never call Fed days and this one coming up is about the best one I can think of to stay away from Accordingly we re skipping the detailed charts tonight There s no point in analyzing anything when the conclusion is foregone
The technicals
Market index futures Tonight all three futures are higher at 12 31 AM EST with ES up 0 24
ES daily pivot Tonight the ES daily pivot rises again from 2013 00 to 2039 50 That leaves ES above its new pivot so this indicator continues bullish
Will the Fed deliver good news on Wednesday or bad news And then will Mr Market react to good news as good news or bad news or bad as good etc Who knows I sure don t so I m not touching this one at all even though the futures are guiding higher at the moment Bottom line Wednesday uncertain
Single Stock Trader
VZ did manage a small advance on Tuesday but it was a classic doji star so that closes the window on this buy The conservative choice would be to get out now while the gettin s good |
VZ | If ES Stays Above New Pivot By Mid Morning Thursday Will Close Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Thursday higher only if ES stays above its new pivot else lower
ES pivot 2063 00 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader N VZ not a swing trade buy
Recap
I had a bad feeling about Wednesday After all all year long it was clear that Mr Market hates everything But then right at 2 PM Auntie Janet served up some of her tasty Interest Rate Surprise and it was like hey Mikey He likes it With the Dow up 1 28 the SPX up 1 45 and the Nasdaq up 1 52 it was a sea of green on the Street as the Night Owl had her best day of the year so far Yum There were some interesting charts to be sure but now we have to ask will Mr Market have a sugar crash on Thursday or will he be hankering for another helping of Feds Let s check the charts to find out
Let me also add that with Christmas coming next week the Night Owl is planning to take the entire week off With a holiday shortened week and after all the excitement this week I m sure a lot of traders will be ready for a vacation
The technicals
The Dow Looking at it from a purely technical point of view on Monday we got a nice hammer on the Dow which was confirmed on Tuesday And on Wednesday we got the payoff in the form of a tall green marubozu good for a 2 24 point pop that took the Dow straight through its 200 day MA That left indicators only barely off of oversold with a long way to go before hitting overbought So with a new rising RTC established with three up days in a row something haven t seen in since the end of September this chart looks flat out bullish for Thursday
The VIX On Monday the VIX traded almost entirely above its 200 day MA by putting in a fat red spinning top That was confirmed on Tuesday with a small gap down spinning top that completed a bearish evening star And that in turn was confirmed on Wednesday with another gap down spinning top this one red that resulted in a nearly 15 decline That leaves the VIX just above its 200 day MA at 16 51 with falling indicators and a completed bearish stochastic corssover And there s no reason to believe that it won t try to touch that level on Thursday
Market index futures Tonight all three futures are lower at 12 49 AM EST with ES down 0 29 Like the Dow and the SPX on Wednesday ES smashed right through its 200 day MA in this case at 2049 to finish at 2072 on a tall green candle That leaves all of the indicators rising towards overbought but they re not there yet With Monday s green spinning top confirmed and no real resistance between here and 2090 there is technically nothing bearish about this chart tonight The only worry is that after such a big three day gain investors might want to be taking some profits off the table on Thursday and the overnight pin action seems to be supporting that idea Oh something else to note it looks to me like ES is putting in a double bottom with support at 2007 a bullish sign for sure Just take a look at the daily chart here and see if you don t agree
ES daily pivot Tonight the ES daily pivot rises again from 2039 50 to 2063 00 Even at that ES is still above its new pivot so this indicator continues bullish
Dollar index For all the hoopla on Wednesday it wasn t particularly reflected in the dollar which lost 0 41 a move that in other times might have seemed large but given the giant decline we saw just two weeks ago it was nothing out of the ordinary This fat red spinning top in bearish harami position sent the indicators moving lower before ever reaching overbought That makes it questionable whether the dollar can advance any further on Thursday
Euro And on Wednesday the euro which had been frustrated for a week now by its own 200 day MA at 1 1038 finally gave up the ghost with a gap down red marubozu that took it back to 1 0889 That also sent all the indicator is falling off of overbought and left the stochastic in full on bearish crossover mode And that leaves nothing at all bullish about this chart for Thursday
Transportation And finally the trans also had a great day on Wednesday with a 1 8 gain on a tall green marubozu That confirms Monday s hammer and sent all of the indicators rising off of oversold We are now also just on the edge of a three week long descending RTC for a bullish set up It very well looks like the three week long descending RTC might finally be over In any case tonight there s nothing at all bearish about this chart for Thursday
Surely I can t be the only person who was surprised at the extent of the rally the last two days I think this may tempt traders to take some profits and some may develop a case of Fed remorse Either way although the charts are uniformly bullish tonight the futures are guiding lower and we may be in for a pause or a bit of retracement on Thursday so I m going to make a conditional call if ES can stay above its new pivot by mid morning we ll close Thursday higher but if it breaks under and stays there we close lower
Single Stock Trader
On Wednesday Verizon was one of the better performers in the Dow and that was good enough for a better than 2 pop That move took it above its upper BB on a tall green candle for a new rising RTC Indicators are now all solidly rising along with a nicely completed bullish stochastic crossover Since we are still nowhere near overbought there might still be some more upside available on Thursday but this bus has now left the station so it is sadly no longer a swing trade buy |
VZ | Market Rally Comes To An End | The Hoot Actionable ideas for the busy trader delivered daily right up front
Friday lower
ES pivot 2049 67 Holding below is bearish
Next week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Blame it on Fed regret or on the price of oil which snapped a two day winning streak on Thursday to resume its downward march but the recent market rally is now over We re going to take one more look at the charts for Friday before taking next week off for the Christmas holidays I m not expecting a lot of market action next week anyway
The technicals
The Dow With a dark cloud cover on Thursday that saw the Dow fall right back through the same 200 day MA that it broke above the day before this chart now turns decidedly bearish for Friday
The VIX In a similar vein on Thursday the VIX rose 6 05 but the candle belies that small move It was a tall green marubozu that successfully tested its own 200 day MA and finished by giving us a bullish piercing pattern Although indicators are not yet oversold the stochastic is starting to come around for a bullish crossover and the net impression of this chart is bullish
Market index futures Tonight all three futures are lower at 12 31 AM EST with ES down 0 25 Like the Dow on Thursday ES completely reversed course and fell right back through its own 200 day MA on a tall red candle to finish right back down to 2034 25 On top of that the new overnight is continuing lower and that is causing a brand new bearish stochastic crossover before the indicators have even reached overbought That s not a good sign and so I m not optimistic for Friday here
ES daily pivot Tonight the ES daily pivot drops from 2063 00 to 2049 67 That now puts ES below its new pivot so this indicator turns bearish
Dollar Index Perhaps the most extraordinary chart of the day was the dollar which took a massive 1 47 gap up pop thus completely canceling Wednesday s bearish harami With such a big gap below it now it looks like two thirds of a bearish evening star so I give better than even odds at this point that the dollar goes lower on Friday
Euro And of course just as impressively on Thursday the euro ignored a bullish harami to gap down on a tall red marubozu and close back down to 1 0830 That sent all the indicators continuing lower and they are now just off of oversold And that marks a clear rejection of its 200 day MA and the start of a new downtrend The overnight seems to be trying to stage something of a rally but I m not convinced it will hold through Friday
Transportation The trans was as bearish as anything else in the charts on Thursday completely unable to make any headway above Wednesday s highs as they fell a large 2 to give up all of Wednesday s gains and half of Tuesday s as well Even at that the indicators continue rising just barely off of oversold Still with such a tall red candle it s hard to find anything bullish about this chart tonight
And the winner is
What a difference a day makes With a promising rally short circuited and all of the charts looking rather bearish tonight I m just going to call Friday lower I ll be happy to be proven wrong That s all she wrote
See you again not this coming Sunday night but the week after that since I m taking next week off Merry Christmas one and all
Single Stock Trader
Last night I said that Verizon Communications Inc N VZ looked to be done as a swing trade buy and indeed on Thursday it fell along with the rest of the Dow The candle is basically a dark cloud cover and while the indicators are now only just short of overbought they look to be about ready to turn around So there is nothing bullish here tonight |
VZ | Monday Stock Forecast Uncertain Monthly Outlook Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday uncertain
ES pivot 2053 33 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader N VZ still not a swing trade buy
Ho ho ho Looks like Santa showed up just in the St Nick of time last week to deliver loads of nicely wrapped profits for all the good little traders everywhere Nicely done and a round of applause for Mr Claus
Now we turn our attention to the waning days of the year as we look forward to 2016 With another holiday shortened week ahead I m considering extending my vacation And I m also not expecting a lot of action on New Year s Eve leaving just three days here
In fact I was contemplating just taking the entire week off once again but what the heck I just can t stay away that long and after all it s the last gasp of the year so let s at least take a look to see how Monday will shake out Of course there s little point in reviewing four day old charts so we ll do a Night Owl Lite and just present the conclusions Maybe I ll do Tuesday too
The technicals
Market index futures Tonight all three futures are slightly higher at 12 09 AM EST with ES up 0 04
ES daily pivot Tonight the ES daily pivot rises from 2047 17 to 2053 33 That now places ES just below its new pivot so this indicator is bearish tonight
The first day after Christmas is historically quite bullish according to the Stock Traders Almanac We ve also been seeing a run of down Fridays that are followed by up Mondays However tonight we re looking at a monster three day run up last week ending in a red inverted hammer coupled with sagging futures in the Sunday overnight
I note too that the indicators are all quite confused tonight with RSI and money flow falling but momentum and the stochastic rising and OBV flat Because of all this plus the difficulty of calling a day following an extended holiday I will simply note a modestly bearish bias but not enough to actually call Monday lower So I guess all that leaves is Monday uncertain
Single Stock Trader
After three nice gap up days and a bounce off its 200 day MA this one is clearly not a swing trade buy tonight |
VZ | Tuesday s Stock Market Forecast | The Hoot Actionable ideas for the busy trader delivered daily right up front
Tuesday higher only if ES remains above its pivot else lower
ES pivot 2046 17 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ still not a swing trade buy
It was probably good that I called Monday uncertain because after a morning dip the Dow wobbled its way back to finish off just 24 points on low holiday week volume We re going to write one more post for 2015 and then call it a year as I m not expecting much of anything on Wednesday and even less on New Year s Eve
The technicals
The Dow After a bearish candle last Thursday on Monday the Dow gapped down through its 200 day MA but ended with a very long tailed hammer Not quite sure what to make of that since the indicators continue to be confused with half rising and the rest falling as they meander around between overbought and oversold So there s really no clear direction here for Tuesday
The VIX And in exact mirror image the VIX gapped up above its own 200 day MA on Monday gaining 7 43 but on a red candle Frustratingly indicators remain oversold and the stochastic has just barely squeaked out a bullish crossover It was a bullish exit from a descending RTC though so the overall impression is less than totally clear
Market index futures Tonight all three futures are higher at 12 10 AM EST with ES up 0 16 On Monday ES successfully tested its 200 day MA with a tall hanging man to close down just a bit at 2048 75 That leaves the indicators just short of overbought and the stochastic on the brink of a bearish crossover The new overnight is trading just outside the rising RTC for a bearish setup but in the absence of a move lower and an apparent rally forming in the wee hours it s hard to call this chart for Tuesday
ES daily pivot Tonight the ES daily pivot falls from 2053 33 to 2046 17 That s enough to put ES back above its new pivot so this indicator now turns bullish
Dollar Index On Monday the dollar gapped down for the second day in a row but only for a 0 07 loss on a small doji star With indicators nearly oversold this is looking like a possible reversal for Tuesday
Euro The euro also did little on Monday rising back to 1 1005 on a small green candle that sent the indicators overbought Despite that the new overnight is continuing higher so in the absence of a reversal candle I d have to guess the euro gains some more on Tuesday
Transportation After peaking on Thursday the trans dropped 0 73 on Monday to exit a rising RTC for a bearish setup Indicators are confused though some rising some falling The net impression is bearish but there s considerable uncertainty around that
The charts are a bit muddled tonight and if anything have a bearish bend to them But ES seems to be staging something of a comeback as I write Generally that would be cause for an uncertain call but I think I ll hedge it with a conditional If ES can stay above its new pivot by mid morning Tuesday we ll close higher If it falls below and stays there we close lower
That s all she wrote and that wraps up 2015
Single Stock Trader
After bouncing off its 200 day MA last week on Monday Verizon Communications Inc N VZ finally managed a small gain but it came on an odd little green candle sitting below most of last Friday s action In addition all the indicators are moving lower and the stochastic looks like it s making a bearish crossover so I really can t bless this as a swing trade buy right now |
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XOM | Papua New Guinea PM wins seat in general election as votes are tallied | By Harry Pearl SYDNEY Reuters The prime minister of Papua New Guinea PNG Peter O Neill has won a fourth term in Parliament but the South Pacific nation is still no clearer on who will lead it through a period of economic uncertainty Opposition politicians have harshly criticized O Neill s economic management including his handling of a budget deficit that has ballooned in recent years as oil and gas prices slumped But O Neill weathered the criticism to win 48 714 votes or 78 per cent of all ballots cast in his Ialibu Pangia district his office said in a statement on Sunday Our promises to the people are clear and can be delivered and we have a proven track record to deliver on our promises O Neill told supporters in the Southern Highlands Province His People s National Congress party was in line to form the next government he added The resource rich nation is still tallying votes however with final results not expected until month end Analysts expect a tight race between O Neil s party and that of his main rival former Treasurer Patrick Pruaitch who has formed a coalition with several opposition party leaders promising to boost growth and stabilize the economy Sam Basil leader of the junior opposition Pangu Party has vowed to put an end to the exports of raw resources and create jobs Polling in PNG has been marred by reports of disruptions and voters being left off electoral rolls souring the mood in a country with a history of electoral violence and corruption Despite its mineral wealth which includes Exxon NYSE XOM Mobil s 20 billion LNG plant most of the nearly 8 million population live at subsistence level Last week the Commonwealth Observer Group said it was concerned about reports of election related violence and vote buying in some cases through the use of state resources and development funds It recommended an urgent review of the election process and for the PNG government to boost the accuracy of electoral rolls There had been some unfortunate incidents O Neill said but the election had been a success overall In past elections hundreds of people have been killed through election violence and this year we saw a very smooth electoral process O Neill who came to power in 2012 promising to rein in corruption has faced allegations of having authorized millions of dollars in fraudulent payments to a leading law firm
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