How to Own a Piece of Ferrari; Unemployment’s Groovy Historic Lows; Under Armour Wants to Score with Basketball

Bellisimo…

Image courtesy of  sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

If you’re among the millions who fantasize about owning an Italian automotive masterpiece, you might just get your chance. Sort of. Ferrari just filed the paperwork for an IPO to be listed on the New York Stock Exchange. Even though 90% of the luxury car company has been owned by FiatChrysler (FCA) since 1988, the company plans to spin off Ferrari into its very own company, in an effort to raise about $5 billion and cut some debt. No actual figures were given as to how many shares are going to be offered, however 10% will be up for grabs by the public, with another 10% going to the Ferrari family and the rest of the 80% to be given to FCA shareholders.  You might have to wait a bit for the big Wall Street debut as it isn’t expected to happen until later in the year or even 2016. The spin-off, while making the business domicile in the Netherlands, will still remain headquartered in its home country of Italy. The company, which is currently valued at about $11 billion, pulled in $3 billion for 2014 on 7,255 cars. Go ahead and do the math on that one. Ferrari takes great pride in employing a “low volume production strategy” meaning the company doesn’t make too many machines because it likes that there’s a certain exclusivity to the automobile. That pretty much explains why people typically drool when they see one on the streets. Just maybe not so much in the Middle East, Europe and Africa from where 50% of Ferrari’s sales come.

How low can you go?

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

The economy has been giving us a lot of interesting numbers in the last few months but this one takes the fiscal cake. It turns out that the number of American filing first-time unemployment claims has hit a 42 year low. Indeed, the rate of first-time applicants hasn’t been this low 1973, falling 26,000 to 255,000, when bell-bottoms were trending, and the word “trending” was decades off from even being coined. FYI, economists didn’t see this one coming. I mean, sure they forecasted a dip, but this would constitute more of a drop…off a cliff.  To put things in perspective, at the height of our most recent fiscal crisis, 600,000 people a week were filing jobless claims each week. Unemployment is also hovering at a seven year low of 5.3% and the economy added 3 million jobs in the last twelve months. And while we had a bit of an ugly unemployment claim number last week, that was primarily because of some auto plant shutdowns and therefore not accurate data. Now, I hate to be a downer but, part of the reason why that unemployment number is so darn low has to do with the fact that plenty of unemployed Americans have thrown up their hands in defeat and given up their job search.

A-Game?

Image courtesy of phanlop88/FreeDigitalPhotos.net

Image courtesy of phanlop88/FreeDigitalPhotos.net

Fitness clothing brand Under Armour is looking to score on the basketball court and hoping to unseat Nike in the process.  Analysts are totally digging the idea too. They figure if Under Armour can gain some major traction in that arena, it’ll give them a real sense of how far the brand can go. It certainly helps that NBA superstar Stephen Curry wore Under Armour kicks en route to the championships and now graces the Under Armour campaign together with his sneaks – the Curry One. But the challenge is great, seeing as how Nike’s got about 90% of the basketball shoe market. As for the athletic apparel makers earnings, Under Armour’s revenue jumped 29% to $783.6 million. Interestingly enough, profits took a 16% to just under $15 million all because of its purchases of some fitness apps earlier in the year.

Rotten Apple Earnings; Housing Boom Surge; Coke Is It With Earnings Beat

Who would have thunk it…

Image courtesy of zirconicusso/FreeDigitalPhotos.net

Image courtesy of zirconicusso/FreeDigitalPhotos.net

Apple lowers its forecast? Say it isn’t so. But shares of the tech giant are taking a hit today as the world’s largest and most expensive company dealt a major buzzkill to Wall Street yesterday with earnings that left many Apple enthusiasts downright bereft. The Cupertino-based company announced that it was expecting to hit between $49 billion to $51 billion in sales for the next quarter, much to the horror of analysts who expected Apple would try to bank $51.13 billion. The company also sold just (gasp!) 47.5 million phones instead of the expected 49 million. Profits hit $10.68 billion adding $1.85 per share. Except that analysts were still disappointed because Apple beat those earnings by a small 4 cents per share margin. And then it got weird. Apple brass said that sales of the Apple Watch beat expectations. The problems is no actual figures were given. So we’re just going to have to take their word for it. But, the Apple watch allegedly sold better than both the iPhone and iPads, in the same period following their launches. However, once again, we’re going to have to take their word for it. So what does this all mean for sure? Who knows. What was so peculiar is that because everyone was so focused on the numbers that they didn’t like, it obscured some other impressive figures. For instance, Apple more than doubled its sales in China from a year ago to $13.23 billion. Unfortunately, China’s economy is kind of iffy these days, so there’s no guarantee that sales there will grow significantly…or at all. So maybe the analysts do have some legitimate gripes after all.

The home is where it’s at…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

It’s official. Sales of existing homes in the U.S. have nailed their highest pace, a whopping 3.2%, in eight years. Not since February of 2007, way before the prospect of a recession reared it’s ugly head, have people rushed out to scoop up pre-existing homes, according to the National Association of Realtors. 5.49 million homes took on new owners when analysts only expected 5.4 million to be sold. Experts think this increase might have a bit to do with a steady job market, not to mention the fact that mortgage rates are slowly climbing their way back up and people want to get in their purchases before those rates get too high.  Add to that a limited supply of homes and you’ve got yourself some houses that are getting a lot more buck for their bang. In fact. the median cost to buy a house is up to $236,400, 6.5% more than it was last year at this time.

Coke is it…

Image courtesy of Naypong/FreeDigitalPhotos.net

Image courtesy of Naypong/FreeDigitalPhotos.net

Behold, the world’s largest beverage company has beat the Street. This, despite the fact that for the last decade, the soft drink industry has been experiencing some major declines. This decline has been happening overseas as well, which is a huge problem since 40% of Coca Cola’s sales come from international markets. In any case, Coca Cola scored a profit increase of 20% at $3.1 billion, adding 63 cents per share on $12.2 billion in sales. Analysts only expected 60 cents per share. In fact, it was the beverage maker’s first quarterly sales gain in two years. I guess someone gets to keep their job for yet another quarter. So how did the Atlanta-based company manage to finagle this beat? By simply raising raising prices, but in a way hardly felt by consumers, at least most of them. A tactic that is both so simple, yet so genius. Then Coca Cola pulled another genius move when it started selling smaller cans of soda for more money. Can you believe that? Less product for more cash. And consumers drank it up. As for its “Share a Coke with…” campaign…it worked. Just wish they made a can with my name on it. Oh well. Kudos, Coca Cola brass. Perhaps you could impart some of your fiscal wisdom on Greece now.

Turmoil at Toshiba; Harleys Need Some Revvin'; Citibank Gets Busted

What’s cooking?

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Toshiba. It’s the computer with the great price tag but dude, it’s no Dell. Or Mac. Or HP. Or…well, you get the picture. What you may or may not have realized is that Toshiba is also involved in nuclear energy technology, except that after the 2011 Fukushima disaster, all 48 of its reactors are now offline. But now the company has a brand new disaster on its corporate hands as its CEO, Hisao Tanaka, and several of his subordinates unceremoniously resigned after it was discovered that there had been some major book cooking at the Japanese company. It seems that, during a seven year period, profits were inflated over 152 billion yen ($1.2 billion) all in the name of a challenge initiative that had company leaders setting unrealistic expectations in just about every single business area of the company, from chips to PC’s.  Instead of trying to engage in meaningful discussion that the goals were absurd and unattainable, employees just faked numbers. Which worked for a few years. Sort of. An independent investigation was launched to figure out the hows and whys. In the meantime, shares of Toshiba actually (and finally) went up on the news that members of its top brass were stepping down. At a press conference, Tanaka made a long bow meant to convey shame and remorse. Here in the United States we just settle for a perp walk and a costly, drawn out trial.

Not hog-ging the market…

Image courtesy of debspoons/FreeDigitalPhotos.net

Image courtesy of debspoons/FreeDigitalPhotos.net

Motorcycle maker Harley-Davidson Inc. came out with its earnings and they were nothing to get revved up about. The strong dollar totally messed with the bike maker’s figures and ultimately resulted in a smaller profit. But it wasn’t just the strong dollar that hurt sales. Foreign competitors decided to cut prices on their offerings, amping up the competition, and leaving Harley-Davidson to make fewer bikes. But 88,931 people did get themselves a new hog to ride, though it’s not as many as last year’s 90,218. No worries, however, as the company still  managed to beat analysts estimates by a bright, shiny nickel. The iconic cycle company pulled down a profit of close to $300 million adding $1.44 per share. Unfortunately that’s a 15% hit from last year’s second quarter profit of $354.2 million and $1.62 per share.

Now you’ve really done it…

Image courtesy of  Sura Nualpradid/FreeDigitalPhotos.net

Image courtesy of Sura Nualpradid/FreeDigitalPhotos.net

Citibank was behaving badly and now it has to pay $700 million in “consumer relief” to all the innocent credit card users who were duped by the bank’s deceptive and illegal practices. So how exactly did Citibank mislead its unsuspecting 7 million consumers? Well, for one, Citibank marketed products but conveniently neglected to mention or clearly articulate their costs.  As for those fraud-alert services, well there wasn’t much alerting when it came to “fraudulent purchases.” Instead, the service only alerted customers to when changes occurred in their files by credit reporting firms.  Then there were times when Citibank signed up folks for products and services for which they didn’t explicitly request, not to mention enrolling them in programs and then charging them for services for which they were not even eligible. How does that even work?

Greek Banks Open for Business Again. Sort of.; Avengers: Age of Ultron Beats the Street; Morgan Stanley Profit Beat

Bank on it…

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

After one long, fiscally painful week where Greek Prime Minister Alexis Tsipras begrudgingly agreed to terms for a bailout with Greece’s creditors, the country’s banks are finally back up and running. It only took three weeks to get to this point. But at least now both the IMF and ECB can look forward to getting some of their money back and Greece gets to stay in the euro. It’s a win-win. Sort of. And while here in the states, running to the bank can be nothing short of a tedious errand, in Greece, that one act is now reason enough to celebrate. Of course with the sales taxes in Greece increasing so dramatically  – from 13% to 23% –  celebrating such an event might become prohibitively expensive. But like I said, at least Greece gets to stay in the euro. As these austerity measures take effect, Greeks will now be able to make deposits, access their safety deposit boxes and above all else, make withdrawals. Only now, they aren’t limited to daily withdrawals of $65 per day anymore. Instead, Greeks can actually withdraw a whopping max of 420 euros ($455 bucks)  a week. As for transfers abroad…those are gonna have to wait.

Dinosaurs, Avengers and Star Wars – oh my!

Image courtesy of  Dr Joseph Valks/FreeDigitalPhotos.net

Image courtesy of Dr Joseph Valks/FreeDigitalPhotos.net

It’s been a super-hero kind of a quarter for Hasbro whose earnings had a major boost from Avengers: Age of Ultron, Jurassic World and perennial classic, Star Wars. The toy company actually posted a smaller than expected decline. Yes, you read that right. But what’s really weird – in a good way – is that the toys typically favored by boys were the big winners/earners this quarter. Usually, its the female driven categories that hog the earnings glory. Only this time, that category that includes Nerf Rebelle and My Little Pony took a 22% hit in net revenue. But, the company’s revenue didn’t go down as much as analysts thought it would. And that’s why everyone seems to be so stoked about the $779 million in revenue Hasbro did bank. That’s a welcome difference from the estimated $773 million Hasbro was expected to take in. And because it’s the cool fiscal thing to do these days, the strong dollar/foreign exchange rates took some flack for the drop in the toy company’s revenue. Otherwise, profit was a cool $41 million adding 33 cents per share when Wall Street only expected a paltry 29 cents per share.

They got the beat…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Morgan Stanley’s profit fell by 8.5% over last year’s results. But no one’s too upset. I mean, don’t get me wrong. Nobody’s whipping out the champagne (that I know of) but the bank still managed to score some impressive gains in all three of its main businesses so hope isn’t exactly lost. With a little help from brokerage fees and increased trading, Morgan Stanley banked a $1.8 billion profit adding 79 cents per share – after a tax benefit. Analysts only expected the bank to earn 74 cents per share. However, not be a downer but last year at this time the company scored a profit of $1.9 billion with 92 cents per share. However,  Morgan Stanley does get bragging rights – for this quarter anyway – as it had the biggest revenue increase out of all six major U.S. banks,  pulling down a whopping $9.7 billion. Last year at this time that figure was closer to $8.6 billion.The question is, can they keep pulling that trick off?

Brad Pitt Thinks Costco is Setting a Bad Egg-sample; Summer Style Black Friday Results Are In.; Netflix Is Having the Best. Year. Ever.;

Hold the yolk…

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Image courtesy of SOMMAI/FreeDigitalPhotos.net

It’s Brad Pitt and Bill Maher versus Costco as the A-listers take issue with the wholesaler’s egg selection. The two Hollywood celebs think Costco contributes to animal cruelty by selling eggs from caged hens. Brad Pitt sent a very polite, but strongly worded, letter to Costco CEO Craig Jelinek telling him why eggs from caged birds is such a bad idea, Bill Maher, however, took to the pages of The New York Times, penning a scathing editorial, as only he can, detailing the horrifying results from the practice. It should be duly noted that both Pitt and Maher also praised Costco for its efforts toward animal welfare. They just want to make sure that the chain makes good on its 2007 promise to only sell eggs from uncaged hens. Perhaps then will Brad Pitt and Bill Maher return to the hallowed aisles of Costco, where they will whip out their membership cards and load up their tricked out SUV’s with a year’s worth of toilet paper. And, of course, some eggs.

Was it all that and a bag of chips?

Image courtesy of  Iamnee/FreeDigitalphotos.net

Image courtesy of Iamnee/FreeDigitalphotos.net

The results are in. Kind of. Amazon’s Prime Day did manage to pull in some boffo sales and surpassed November’s Black Friday sales despite mounting criticism over the paltry selections on its  “Lightning Deals,” not to mention the not-so-deep discounts. Prime Day, which was established to honor the sanctity of the humble beginnings of Amazon just twenty years ago, pulled in 80% higher sales over this time last year. That was just for the US. In Europe, sales jumped 40% (though I suspect none of that came from Greece). With numbers like that, it seems not everybody took issue with the offerings. Take for instance the tens of thousands of people who purchased Amazon Fire Sticks. Or how about that Kate Spade bag that sold out in less than a minute. Shoppers also seemed to dig the “Lord of the Rings” blu-Ray set as Amazon sold 35,000 of them. But Wal-Mart’s not complaining either. In response to Prime Day, the world’s largest retailer offered up its own Black Friday deals, discounting some 2,000 items including an Apple iPad Air 2 for just $400. For Wal-Mart, these last three days have been some of its most successful online shopping days. Ever. Orders increased by triple digits over the same time period last year. So I guess Wal-Mart’s feeling pretty merry right about now.

No kidding…

Image courtesy of  David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Netflix whipped out their earnings to much fanfare but little surprise. The internet streaming service picked up a few more subscribers. Make that a few million more subscribers, even scoring some record-breaking gains this year. This should probably come as no surprise since Netflix currently reigns supreme as the S&P’s fave top stock. Yes. That is a thing. International markets seem to be jumping on the Netflix bandwagon, where the service bagged some 2.37 million new subscribers. As for new subscribers on this side of the pond, Netflix gained 900,000 new customers who now get to binge watch such classics like “Orange Is the New Black.” Naturally, news of its impressive earnings caused the stock to take a nice jump today. Netflix total subscriber-ship now comes to 65.6 million people, and yet, the company is still far from its goal of conquering the world. Japan, Spain, Italy and Portugal are set to be getting access to the popular platform later this year.

Greece’s Chance to Save Itself; BofA Banks Big; It Figures: IRS Numbers Need Work

Come on Greece, you can do it…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Greek Prime Minister Alexis Tsipras isn’t down with the reforms proposed by Greece’s creditors in order to get his country the financial aid it so desperately needs. Tsipras even went so far as to call the reforms “irrational.” But you know what’s actually irrational? Letting your country’s banking system collapse as your homeland dives head-first into financial ruin. So instead Tsipras has decided to take one for the team, embracing the strict reforms and urging his MP’s to the same.  Aw. Isn’t that sweet of him? What a guy. Those reforms, which are putting frowns on the faces of many Greeks, include imposing higher taxes on just about…everything. Early retirement would not only now be off the table, but the retirement age would also go up to 67. And while Tsipras may do his political best to get his MP’s to agree to these measures, he’s already getting some heated opposition from the Syriza Party who have no intention of allowing the reforms to easily pass.

Legal-ease…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Bank of America is having a very good day. Make that a very good quarter. After some unimpressive quarters, the bank had a major rebound in large part because it doesn’t have to pay as much money to a bunch of lawyers anymore.  Because of the bank’s sketchy role in the 2008 fiscal crisis, BofA already had to fork over $13 billion to both federal and state regulators. That was just for the settlement. The bank’s legal fees this time last year were a staggering $4 billion. However, this quarter, those fees went down to only $175 million. It probably would have been a whole lot cheaper for Bank of America to just admit its shifty involvement from the get-go. But, oh well. BofA took in close to $5 billion in profit this quarter, with $22 billion in revenue and 45 cents per share, when analysts only expected 36 cents a share. What is down from a year ago are delinquent mortgages. Those fell by more than half to an almost respectable 132,000.  And nobody is complaining about that drop.

In case you were wondering…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

U.S. taxpayers filed a whopping 126 million tax with 94 million of those filers even having health insurance. $249 billion were awarded in refunds to 92 million filers. The average refund came in at $2,711.  A total of 7.7 billion in subsidies was claimed and 6.6 million taxpayers paid an average of $190.00 in fines for not having insurance. As for the IRS’s customer service, or lack thereof, the agency received 50 million calls, although 8.8 million of those calls were disconnected by the IRS. Oops. 20 million filers requested to speak to a real live person at the IRS and 37% actually got to do just that. They only had to wait an average of 23 minutes. Clearly they possess the virtue of patience.

Twitter Buyout Hoax Sends Shares Up; Colorado’s Schools Getting Built on Pot; June Consumer Spending Blues

Nothing to get all tweeted up about…

Image courtesy of  winnond/FreeDigitalPhotos.net

Image courtesy of winnond/FreeDigitalPhotos.net

It’s the big news that wasn’t. A story about a $31 billion Twitter buyout made its way online on a website that looked suspiciously like it came straight out of Bloomberg headquarters. Except that it didn’t. A Bloomberg spokesperson said that the story was “fake and appeared on a bogus website that was not affiliated with Bloomberg.”In fact, the website was created just a few days ago, was rife with typos and referred to Twitter’s former CEO Dick Costolo as “Richard ‘Dick’ Costello.”  Talk about rookie mistakes. It’s too bad the story was false as the news caused shares of Twitter to spike more than 8%. I guess this means Wall Street digs the idea of a Twitter buyout. It’s not the first time a bogus story caused a stock to artificially inflate. Avon Products had a similar situation months back when a company calling itself PTG Capital Partners filed a bid to buy the company for $8 billion. Now, Avon’s great and all but that price seemed a bit too high for a company that hadn’t had a good quarter in too long of a time. This, of course, raised some red flags and now the perp behind the phony filing is facing the legal wrath of the SEC.

High-er education…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

Ever since Colorado decided to legalize recreational marijuana, schools in the Rocky Mountain State have been emerging victorious. A special fund from marijuana sales, set aside for Colorado schools, has been setting records thanks to a 15% excise tax. In 2014, $13.3 million in pot taxes for school construction was raised. But in just the first five months of 2015, that fund already surpassed $13.7 million. Part of the reason for the huge price increase is because marijuana businesses received a one time tax exempt transfer of medical plants. But it also helps that there are three different taxes imposed on marijuana, including a 2.9% sales tax, a 10% special marijuana sales tax and a 15% excise tax on wholesale marijuana transfers. Unfortunately, pot still has its haters and those opponents are coming out in full force using a racketeering law – that was initially established to bring down organized crime – by suing not just pot businesses, but their banks, their bond companies and even their accountants. Now if only there was a way for marijuana businesses to sue the pot opponents and level the playing field.

June gloom…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Well it looks like the Fed won’t be rushing to hike rates anytime soon all thanks to the Commerce Department’s latest report for June. In case you missed it, consumer retail sales were pretty depressing. The numbers were weak and that is a problem since consumer spending accounts for 70% of the economy, suggesting that the economy isn’t growing as it should. Sales of automobiles and other goods took quite the hit as would-be spenders are playing it cautiously about spending their hard-earned cash lest they need it for a rainy day. The fiscal crisis of 2008 is still managing to spook a lot of people even though hiring is pretty decent and the labor market is fairly healthy. To be fair, though, wages are kind of flat and everyone would appreciate a little rise on that front. Even the revised growth rate for May was disappointing coming in at 1.0% as opposed to the 1.2% that was first reported. Here’s hoping July brings better fiscal news.