Classy…

ID-100200080-2

Image courtesy of bplanet/FreeDigitalPhotos.net

The middle class has fallen to less than 50% of the population, according to a new report published by the Pew Research Center. Gasp. The middle class used to account for 61% of the population and it’s a fact that has got everyone from economists to politicians in a tizzy, as each and everyone of them tries to dissect exactly what that means and how it will help or hinder their agendas. The upper class rose 47%, growing from 20 million people to 50 million people with their share of the national income pie up 49% from 28%. In case you were wondering, 190 million of us are not upper-class. Got three people in your household? Well, if your household income is $41,869, then call yourself middle-class. But, the good news is that the median income for the middle class has risen 34%…since the 1970’s. Then there’s lowest – and fastest growing – bracket: 70 million among us make just 9% of the national income. Apparently, 99% of gains are going to just the top 10% of the population and a family income of less than $50,486 after taxes has a nasty way of causing that particular family to go even deeper into debt. Some argue that this income disparity explains why economic recovery is taking so much longer than it should. Others, however, argue that it’s all matter of how you look at the information and that the picture really isn’t all that grim. Hmmm.

How do you like your stake?

ID-100271804

Image courtesy of bplanet/FreeDigitalPhotos.net

Guess what happens when Warren Buffett tells the world he owns shares of a company? If you guessed that shares go up then you’d be correct. For instance, today the Oracle of Omaha disclosed in a regulatory filing that his company, Berkshire Hathaway, owns a passive 8% stake in Seritage Growth Properties. So what makes for a “passive” stake? Basically, Warren Buffet buys a huge chunk, in this case about 2 million shares worth an estimated $70 million – $100 million and he, well Berkshire Hathaway anyway, sits on it for the long term. With Warren Buffett’s recent disclosure about his stake, the stock went up today as much as 17% at one point, hitting $41.18, all because of the exciting news. Seritage, by the way, is the spawn of a Real Estate Investment Trust (REIT) that was spun-off from Sears Holding Group as a way to help the embattled retailer capitalize on its approximately 235 real estate holdings. And Sears did just that when it managed to raise $2.7 billion from the REIT.  Incidentally, while activist investors tend to love REITs, Washington DC is not fan of the practice and is doing its very best from letting spun-off companies turn into REITs. REITs don’t pay as much to Uncle Sam in corporate income tax like other companies do and its profits go almost entirely to shareholders. Then shareholders pay the taxes on those dividends at the same tax rates as their ordinary income. Preventing companies from exercising this little practice would raise about $4.3 billion for the government. But for now, Warren Buffett can just sit pretty sit on his big/little stake while Washington dukes out the issue in Congress.

Pay days….

ID-100302529

Image courtesy of bplanet/FreeDigitalPhotos.net

Look out Apple Pay, Samsung Pay, Android Pay…Walmart has entered into the almost crowded mobile payment arena by launching, you guessed it – Walmart Pay. Through its own smartphone app, you simply use a credit, debit or even a gift card and voila! That purchase is yours in just a couple of swipes. Testing has already begun at Walmart’s home base in Arkansas and will likely launch in all 4,500 plus stores by next year. Walmart has been on the prowl to find ways to make for an easier shopping experience…at Walmart. It’s estimated that 22 million people use the current Walmart app every single month and that more than 50% of those online transactions take place on mobile devices. Walmart’s system, by the way, is cleverly designed to integrate nicely with other payment applications, including all the ones mentioned in the first sentence. If you need any more of a reason to use Walmart Pay, then consider that it’s actually a more hack-proof alternative – the app stores your card but transmits an alternate card number that is generated by the card issuer. The merchant never gets the real number which leaves hackers with nothing to hack from the merchant. By the way, Walmart doesn’t accept ApplePay. How very convenient.

Tesla’s Earnings Are Charged; Whole Foods Surprises; Posh Earnings for Kate Spade

It’s electric…

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Tesla investors are squealing with energy efficient delight today as the electric car company released third quarter earnings that beat the Street. Perhaps you might have noticed a few more Model S cars tooling around your neighborhood? Well it’s no coincidence that Tesla set a delivery record for those fabulously, environmentally-friendly automobiles. Expect to see even more of them as CEO Elon Musk plans to ship out 50,000 Model S cars in 2015. In fact, just in this quarter alone, Tesla whisked off over 7,800 cars to new owners – over 41% more than last year at this time. Unfortunately, the company didn’t fare so well on its net loss – a whopping $75 million. However, the company blames stuff like the costs involved in opening stores in Asia, not to mention all those pesky fees for research on its upcoming SUV. Analysts predicted Tesla would lose a penny a share. But wouldn’t you know it – it raked in $0.02 per share instead. Analysts also predicted revenues of $892 million but were foiled once again as the company posted $932 million in revenue.

Whole-Y organic cow…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

It wasn’t the best quarter, or year, for that matter, for Whole Foods. After all, having to compete against mainstream supermarkets that offer up organic fare for so much less is…hard. But it looks like the grocery chain did okay, after all, seeing as how it reported a 5.8% profit increase in its quarterly report. Perhaps it’s those touching, poignant commercials that have caught your organic eye. Or maybe you enjoy the perks from the Whole Foods customer loyalty program (who wouldn’t?). The company also put the spotlight on value and its attempt to lower prices. That profit spike was also probably helped by its tech offerings like Instacart and the Apple Pay option. Whatever it was, the green green grocer managed to bag a $128 million, $0.35 per share profit from its 360+ stores. There was only one not-so-slight problem: Whole Foods had its lowest growth rate in four years.

Now that’s pretty…

Image courtesy of Sicha Pongjivanich/FreeDigitalPhotos.net

Image courtesy of Sicha Pongjivanich/FreeDigitalPhotos.net

Nothing says fashionable like a 30% rise in sales. Which must make Kate Spade & Co. very posh indeed. Especially because those surprisingly fashon-forward numbers came after the company said its margins would likely be an “issue.” The trendy label even saw shares climb 10% in pre-market trading today. All while fellow fashion companies and competitors Michael Kors and Coach have been seeing numbers that would make even the most durable fabrics want to shrivel up into nowhere. So what gives? Well for one thing, at Kate Spade promotions are out, for now anyways. What is in are theme-driven sales. You might not care for the lack of promotions not being offered but it’s certainly working for Kate Spade’s numbers. The company earned $0.02 per share  with net sales up 36% to over $250 million. To be fair though, analysts did expect $4 million more. But that might change now that it is teaming up with the Gap. The company has 98 stores and 57 outlets. Kate Spade is hoping it can double its sales by the end of 2016 to $2 billion (aren’t we all?).

Analysts Not Atwitter Over Twitter; Apple and Alibaba Can’t Fight This Feeling Anymore; No Seven Year Itch for Consumer Confidence

Tweetered out…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Twitter earnings were all the rage yesterday. However, they weren’t much more than that. The micro-blogging site posted better than expected numbers for its third quarter revenue. But that $361 million figure and $0.01 profit the social media site pulled in was just not enough to turn Wall Street’s attention away from the negative, which is: slow user growth. Analysts are more than a bit concerned that it lacks a certain something. That something being broad mainstream appeal. While user growth was up to 284 million from 271 million in the second quarter, the pace at which it grew was simply too slow. It also doesn’t help that actual usage –  as in people who were already members – slowed as well. Users are just not spending as much time On Twitter as analysts would like. Basically, analysts feel that…I hate to say it…that it’s just not Facebook. There. I’ve said it. Don’t hate me for it.

No fear of commitment…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

What happens when a US tech giant and a Chinese e-commere giant start gushing all over each other? Well for one, the e-commerce giant hits a pricey milestone. In this case, I’m talking about Alibaba topping the $100 mark yesterday all because of talk of potential. Really. As in the potential for things to happen. At the WSJD global tech conference, Apple CEO Tim Cook and Alibaba CEO Jack Ma entertained a little lovefest over each other and the potential opportunities that could potentially occur from potential partnerships from the two companies – particularly with regard to Apple Pay. All this talk of potential set Wall Street tongues wagging. Jack Ma said of Apple and Cook, “I hope we can do something together.” How touching. How touching that the mere “hope” of something coming out of a union between Apple and Alibaba caused stock prices to increase. But Tim Cook took the gushing to new heights when he said of Jack Ma and Alibaba, “We’re going to talk about getting married later this week.” How potentially beautiful.

It’s all about the confidence, baby…

Image courtesy of sheelamohan/FreeDigitalPhotos.net

Image courtesy of sheelamohan/FreeDigitalPhotos.net

Feeling confident, are we? Well, actually we are, at least according to the handy dandy Consumer Confidence Conference Index, that good old barometer of all things fiscally confident, (or lack thereof). October’s reading was a very robust 94.5, which just so happens to be the highest reading in seven years and a far cry from September’s paltry 89. Experts had expected a number in the 86 range, but what do they know? Actually a lot, but let’s move on. So what exactly is making us so confident these day? It’s the not so little things like a strong labor market and low gas prices. If those things aren’t enough to boost your self-esteem, then I don’t know what is. Now if we could just keep riding this fiscal wave…