Russian Cyber-vengeance?;Insta-gram-ification!; A&Fitch Logo Ditch

Cyber-score?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Now that a massive cyber-attack on JPMorgan Chase and a few other banks has been linked to Russian hackers, the question looms large: Was the hack attack in response to US imposed sanctions? Things that make you go hmmm. And while major amounts of data loss fell into the hands of these hackers, curiously enough, there hasn’t been an unusually high amount of fraudulent activity noted. At least for now. Which kind of suggests – in a really big way  – that yeah, this cyber attack was politically motivated. Incidentally, back in April, JPMorgan blocked a money payment from a Russian embassy to a US sanctioned bank.  That didn’t go over well – probably more so for JPMorgan than the Russians involved. In any case, with global conflicts on the rise, expect to see a lot more cyber-threats, kind of like the ones Iran has been throwing our way for years. Probably because they’re annoyed with US imposed economic sanctions. The attacks on banks are particularly impressive, more so than say those on Target, since banks have security and firewalls that are way more hardcore than those used in the retail sector. But banks have and will continue to step up their cyber-security precautions. JPMorgan is hoping $250 million and 1000 employees will do the trick.

I want it now!

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Look out Veruca Salt! If you want it all and want it NOW then give a big shout out to Instagram for redefining the shopping experince. Now when you see something on Instagram that you absolutely have to have, like, immediately, you don’t just get to like the item on Instagram. You don’t just get to love it the product on Instagram. You actually get to buy the darn thing too! No more brooding over a an Instagram shot while you frantically search the retailer’s products page. A new “Like2Buy” button will take you exactly where you need to go/be. Shopper ecstasy.

Abercrombie & Switch…

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Shockingly…or not, depending on whom you ask, Abercrombie & Fitch had its tenth straight quarter of declining sales. Perhaps it has to do with the fact that retailers like Forever 21, Zara and H&M are offering much trendier clothing for much less. It probably doesn’t help that A&F is helmed by a loud-mouthed CEO, who was stripped of his chairman title for making such stupid, odious comments about how his company’s clothing is intended for cool, skinny and pretty people. But clearly the cool, skinnies don’t care as they have been clearly taking their business elsewhere. The company has now decided that, in the US anyway, it’s going to shed the logo that is so prominently featured on so much of its clothing. They’re hoping that a move like that will bring in more revenue since adding more larger sizes didn’t do the trick. Go figure! Same store sales fell 6% and news of the unimpressive earnings report sent shares south by 8%.

Jessica Alba, “A” List Mogul; Hooray for Hollywood and CA Lawmakers; Get Your Motors Running;

Yeah really, Jessica Alba = Financial News…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Is there anything she can’t do!!!!! Now Jessica Alba is even considered a bona fide mogul all thanks to Santa Monica-based The Honest Company which she co-founded in 2011 together with Christopher Gavigan, Sean Kane and Brian Lee. The company makes all sorts of useful, organic-y, non-toxic household products like cleaners and diapers. Now The Honest Company is gearing up for some major IPO action. Good thing it’s been valued at close to a billion dollars. For 2014, the company is expected to pull in $150 million in revenue. While 80% of the business comes from monthly subscribers, The Honest Company’s products can also be conveniently purchased at Target, Costco and Whole Foods, to name a few. And if Jessica Alba’s “A” list status isn’t enough to sell you on the products then how about the company’s social mission: It regularly donates diapers and cribs to those in need.

Speaking of Hollywood…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Well at least there wont be any major tax inversions coming out of the film industry. For the next five years anyways. After years of losing million upon millions of dollars to other states and countries, California will once again be fiscally alluring to filmmakers. That’s because California Governor Jerry Brown and other California lawmakers finally reached an agreement that would triple the tax credits for moviemakers –  a commitment valued at $330 million a year. Producers can now get up to a 30% refund on production costs. At least 40 states and 30 countries have offered better tax incentives than Hollywood’s own home state – up til now. Go figure. The credits can be used for up to the first $100 million of a film’s budget. After that, you’re on your own. Now if they can just figure out what to do about that pesky drought…

Filler’ Up…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

Go fill up your cars and start guzzling. This Labor Day is going to be a most affordable one, at least as far as gassing up your car is concerned. Gas prices haven’t been this good since 2010. Thanks to a relatively low-key hurrican season (so far, anyway), and the fact that world conflicts haven’t much affected the US fuel demand, website and app GasBuddy reported that the national average price of gas hit $3.42 today. Last year at this time the price was $0.11 higher. Last month it was $0.09 higher. Cha-ching, baby! And GasBuddy ought to know a little about that since this ridiculously helpful app allows users to compare gas prices in their area. But expect some traffic because according to AAA, 300 million American will be road-trippin’ this weekend, with another 14 million racking up some frequent flier miles.

Amazon is Be-Twitched; Let’s Hear it for the S&P 500; Oh, Burger King

Getting Twitch-y with it…

Image courtesy of bulldogza/FreeDigitalPhotos.net

Image courtesy of bulldogza/FreeDigitalPhotos.net

Streaming video-game service Twitch just scored a premium deal with Amazon. The super e-tailer just picked up Twitch for close to a billion dollars. Not bad for a service that lets its users watch other people play games. Yes, it’s true. People like to watch other people play games. Whether they’re skilled gamers or total amateurs. The Twitch acquisition happens to be Amazon’s biggest purchase to date. But what was it about Twitch that made Amazon want to add it to its collection? Well, besides the fact that Twitch gets more than 50 million monthly users with about 7 million logging on each day, its users typically linger at the site for around two hours  – that’s two hours of major advertising potential that Amazon is all too eager to tap into. Incidentally, Google was rumored to be the one picking up Twitch. But wouldn’t you know  it….some pesky antitrust issues were getting in the way, presumably because Google already owns the competition – YouTube.

Gimme an S, gimme a P…

Image courtesy of Photokanok/FreeDigitalPhotos.net

Image courtesy of Photokanok/FreeDigitalPhotos.net

The S&P 500, which so often toys with our fiscal emotions, just hit the 2000 mark today. Oddly enough, even though it took the index thirteen years to go from 1500 to 1600, since March of 2009, the index has rallied in a very bullish market, with companies listed on it gaining around 200%. Companies listed in the S&P inlcude Apple, Google and Facebook.  The index is seen as important in terms of the Wall Street psyche. Which is all well and good, since these days the index seems to be indicating that stocks – some anyway – are worth the investment.

Can’t tax this…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In the latest exodus of major companies, Florida-based Burger King is getting set to cross the Canadian border as talks are in the works for a merger between the burger powerhouse and Canadian-based coffee and donut chain Tim Hortons. Besides the fact that Canadians are just so gosh darn nice ( I know this to be true as some of my best friends are Canadian), the country’s corporate tax laws are equally lovely – and considerably lower. Wall Street seemed to also be pleased by the news of this merger as shares of both companies took a nice hike north  – no pun intended – well maybe a little. This move is sure to help Burger King stake out some territory in the increasingly competitive breakfast arena. Of course leave it to politicians who would like to spoil a perectly lucrative merger as tax inversions tend to infuriate them. After all, they don’t so much appreciate US companies defecting in favor of better tax rates. But then perhaps those politicians should focus their efforts on tax reforms instead of trying to prevent these inversions. Some factions in Canada aren’t too thrilled about the inversions either as Canadian comapnies get conveniently scooped up by its neighbors to the south. It should be duly noted that this merger will not dramatically decrease Burger King’s tax rate which is already at a 27 % tax rate, compared to the usual US corporate tax rate of 35%. But Canada’s corporate tax rate is a major bargain at 15%. And who doesn’t like a bargain, eh?

UPS Gets Hacked; Dollar Store Battles: Short on Glamour, Long on Drama; Housing Hits It

Do I need to sign for that?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

UPS now joins that distnguished, tadly crowded field of hacking victims. Between January 20 and August 11, over 100,000 transcations may have been affected by a data breach. But lucky for UPS that it is nothing like the Target behemoth, whose own data breach affected some 70 million customers. That’s because UPS stores are not interconnected, but rather individually owned. Hence, of the over 4,500 UPS locations, only a little over 50 stores in 24 states were affected. How convenient. Sort of. Anyways, UPS, which now became the 58th largest company, taking out a not-so-smug-anymore Eli-Lilly & Co., will offer customers affected by the breach free credit monitoring and identity theft protection for a whole year. How convenient. Sort of. Anyways, after that you’re on your own.

The buck stops here…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In the drama-packed world of dollar stores, the latest episode has Family Dollar rejecting a $9 billion buyout offer from Dollar General. Instead, the dollar chain store is thought to be seriously considering another offer from contender Dollar Tree not so much because it’s offering more money – because it is not. Dollar Tree offered only $8.5 billion. Rather, because the deal from Dollar Tree would likely allow Family Dollar CEO Howard Levine to keep his day job. The deal from Dollar General would probably have Levine taking LinkedIn resume workshops by now. Apparently there are also some anti-trust issues associated with a deal from Dollar General. Allegedly. Back in June, activist investor Carl Icahn had a hefty 9.4% stake in Family Dollar. These days his stake is around 3.6%. What that tells us could be a lot. Or nothing at all. But probably a lot. And while all this talk about dollar stores might seem funny to you, just know that there is nothing funny about the tens of BILLIONS in cash that these discount stores rake in.

Home sweet affordable home…

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

It’s been an exciting July. Maybe not for you. But for the housing market it sure has been. And yes, the words housing market and excitement can go hand in hand, especially since July marks the fourth straight month that existing home sales increased – a sure sign that the housing market is headed in the right – up – direction. Unfortunately, as I have written several times, the housing recovery just hasn’t been happening quick enough. Sure, sales were up 2.4%, but that percentage is still way down from where it should be in a truly healthy market. Right now, it’s like the housing recovery is at the end stages of a cold, still some coughing and a slightly runny nose.  However, home construction surged a very impressive  15.7%. That and the fact that interest rates are low and there’s more inventory coming up should make for an equally riveting August. We hope.

BofA Boffo Payout; Nyet to Big Macs; and HP’s Big Little Surprise

Would you like that in small bills?

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Bank of America just set a new record but they probably wont be bragging about this particular accomplishment. The bank officially (as of tomorrow, anyways) holds the dubious distinction of having to pay the largest settlement ever to settle a number of allegations brought by Federal and state authorities over its sales of mortgage-backed securities leading up to the 2008 financial crisis. That magical number weighs in at a monstrous $17 billion easily surpassing the paltry $13 billion that JP Morgan Chase had to pay to settle similar allegations. The money will be divided with $7 billion going towards consumer relief and the rest going towards paying back Uncle Sam for all the misery it caused. But that’s not all. As part of the deal, BofA actually has to admit – ADMIT – wrongdoing. Countrywide Financial and Merrill Lynch will also be held to the task as the bulk of bad mortgages came courtesy of them when BofA acquired them in 2008. Of course no actual heads will roll. Or will they? One Los Angeles US attorney filed a civil suit against Countrywide co-founder Angelo Mozilo. While BofA must not have been too happy about the settlement, Wall Street sure was as shares of the bank took a little climb following the news.

No need to supersize that just yet…

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Image courtesy of tiverylucky/FreeDigitalPhotos.net

You know Russia is royally ticked off at the US when McDonalds starts to suffer. Of course that wasn’t the official line coming out of the Kremlin, mind you. But it is true that four McDonald’s in Moscow were just shuttered for “sanitary reasons.”  One of the “temporarily” shuttered eateries happens to have been one of the most frequented McD’s in the world. In fact, Russia is one of the biggest markets for McDonalds. When asked if the closures had anything to do with the sanctions, officials referred to the “sanitary” statement without actually answering the question. Hmmm. However, there are still well over 430 McDonalds in Russia. For now, anyways.

Surprise surprise…

Image courtesy of jannoon028/FreeDigitalPhotos.net

Image courtesy of jannoon028/FreeDigitalPhotos.net

HP surprised everyone today, perhaps even itself, as it reported increased revenue in its earnings. While it was a modest 1% gain, it was nothing to scoff at. The increase was due in large part to its personal computer division which took in a plump 12% increase. The company is currently undergoing a major overhaul. Which is kind of ironic as my brand new HP laptop (I purchased it in February) is also undergoing a major overhaul at Geek Squad headquarters –  that is after already spending lots of quality phone time with several Geek Squad technicians over the last few months – but I digress. Profits came in at just under a billion which might seem impressive. But it’s not since last year at this time the HP reported $1.4 billion in profits.

 

 

Bieber Fever Doesn’t Smell Like Profit; Home Depot Keeps Improving on Wall Street; and Dick’s Sporting Goods Scores Without Golf

What’s that smell?

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Looks like Justin Bieber isn’t as marketable as previously thought. Oddly enough neither is Taylor Swift. And Nicki Minaj and…Celebrity fragrances put a major crimp in sales at Elizabeth Arden causing its shares to drop 24% on news of its stinky earnings. In fact, the company hasn’t seen earnings this bad since August of 2010. Hmmm. How old was the Beebs then? The drop in sales for celebrity fragrances was even bigger than expected. While the company pulled in $191.7 million in sales, expectations were over $241 million. That’s a big stininking gap, alright. Shares of Elizabeth Arden dropped $1.04 per share which was almost three times the loss that was predicted. That’s on top of the fact that shares already dropped 58% this year. Yikes. But the comapny has plans this year to focus on stabilizing its business – which I can only assume means less Justin Bieber.

Earnings beat…

Image courtesy of Kookkai_nak/FreeDigitalPhotos.net

Image courtesy of Kookkai_nak/FreeDigitalPhotos.net

On the heels of yesterday’s good news about the improving  housing sector, Home Depot came out with earnings today that easily beat analysts’ expectations. The nations largest home improvement company pulled in $23.8 billion in second quarter revenue, an almost 6% increase from this time last year. Wall Street expected a mere $23.5 billion. The company also pulled in net income of $2.1 billion, gaining $1.52 a share, and coming  in $.08 above expectations. By George,  that’s more than a 22% increase over the same time last year. While some feel that Home Depot’s earning’s success is tied to improvements in the housing market, others feel Home Depot would have gone up no matter what. So there.

Fly away birdie…

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Dick’s Sporting Goods announced its earnings with some mixed results. The company pulled in $1.7 billion in second quarter revenue, which happens to be a 10% increase over the same time last year. The company also scored a $69.5 million profit. Sounds pretty good, right? Unfortunately that figure was more than 17% less than the same time last year. However, the sporting goods chain did gain $.67 per share, instead of the predicted $.65 per share. So where is all this money coming from anyways? Well it’s not coming from golf. And hunting. But definitely not golf.  It is coming from women’s and youth apparel.  The company consolidated its golf division which also includes its Golf Galaxy chain, and yeah, some people were given their walking papers with this “restructuring.” But at least it will free them up a little to play some profit-sucking golf while pondering their next career move.

GM Gets Buffet-ed, Great Earnings Are Beautiful and Missed Earnings = Score for Killer Whales

Warren Buffet auto know…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

There’s no denying GM had nothing short of a disastrous year. Not quite as disastrous as it was for the victims of their faulty ignition switches, of course. But as far as Wall Street was concerned their earnings were a fiscal nightmare (and deservedly so for not being on its safety “A” game). But despite GM’s lousy earnings and even lousier – make that non-existent profits – Warren Buffet’s Berkshire Hathaway (BRKA) holding company picked up 3 million shares of the embattled auto maker, according to an SEC regulatory filing. Laugh all you want but they don’t call him the Oracle of Omaha for nothing. The stock is at what you would call a “discount” and Warren Buffet loves himself a good discount. The man knows a thing or two about investing, seeing as how his company’s stock just hit  $200,00 a share. He also happens to think GM CEO Mary Barra is friggin’ awesome. Just don’t expect a quick turn-around as Mr. Buffet is known for holding onto stocks for the long-term. And in this case, that term might just be longer than usual.

Make-up retail wake-up….

Image courtesy of keakguru/FreeDigitalPhotos.net

Image courtesy of keakguru/FreeDigitalPhotos.net

Apparently the quest for beauty is well…priceless. Estée Lauder Companies Inc. released really good and very attractive earnings, especially considering lots of other retailers posted less than glamorous earnings and the US Department of Commerce reported that July retail sales were virtually flat, effectively spooking plenty on Wall Street. Estée Lauder Companies Inc. also owns MAC, Clinique and La Mer (famous as much for the cost of its products as it is for the products themselves). The $28 billion make-up company pulled in $2.73 billion in revenues. Wall Street clearly underestimated the love for make-up and had pegged estimates at $2.66 billion. As for net income – it more than doubled coming up to $257.7 million. The company’s guidance also expects some nice growth hopefully adding a little height to a very unsightly, flattened retail graph.

A whale of tale…

Image courtesy of bandrat/FreeDigitalPhotos.net

Image courtesy of bandrat/FreeDigitalsPhotos.net

Nothing like some bad earnings to get killer whales some new and much bigger digs. Following its really bad earnings the other day, with shares of SeaWorld falling 35%, the amusement park company is pledging $10 million for killer whale research and ocean health. Its CEO is also hoping that doubling the size of its Orca tanks will attract more people to its park and boost revenue. SeaWorld attributed some of its losses to the unflattering film “Blackfish” which SeaWorld called a “propaganda film. Two California lawmakers are hoping get a ban on killer whale performances. Of course PETA entered the fray telling whoever that a “bigger prison is still a prison.”