Apple Throws Billions Towards U.S. Manufacturing; Ferrari Speeds into Double Digit Margins; Republicans Wage War on Dodd-Frank

iManufacture…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

China’s about to get some very unwelcome manufacturing competition from Apple. The tech giant just announced that it is starting a $1 billion fund promoting advanced manufacturing. Gosh, is the President going to take credit for this too? In fact, CNBC host Jim Cramer had the dubious distinction of being the first person to hear the news on his show “Mad Money.”  For those of you wondering what the difference is between manufacturing and “advanced manufacturing,” it means Apple will basically have to offer specialized skills and training for the latter and fill job gaps with these newly-trained, highly-skilled workers. In any case, Apple has thus far created some two million jobs in the U.S. and can hardly wait to create even more. But how does Apple plan on spending that $1 billion it’s setting aside for this latest project? Well, don’t get too excited just yet, because some of that cash is first going to a company that Apple has partnered with for this initiative. And the name of that lucky company has yet to be announced.

Magnifico!

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Image courtesy of Teerapun/FreeDigitalPhotos.net

Ah Ferrari. What could be better than tooling around in a machine like that? How about its earnings, for one. The Italian automaker just released its first quarter earnings report and they were everything you’d expect from the maker of one of the world’s finest sports cars. Shares are up well over 6% today after the company announced a 36% earnings increase along with a 50% surge in deliveries. And by the way, those earnings were even better than expected, coming in at around $265 million  – which equals 242 million euros – in case you were curious. Estimates, mind you, were for 222 million euros. Revenues also impressed and elated investors, as they increased 22% to 821 million euros, easily beating expectations of 767 million euros.  Sure, those numbers are almost magical, but that’s not really what’s got Wall Street tongues wagging. It was Ferrari’s margins, which are now right up there with the aforementioned tech giant we call Apple. But I guess that’s to be expected when you’re selling cars whose ticket prices start well into the six-figures and can exceed $2 million. After all, we are talking about a company who sold out of a car, the Aperta convertible, before the car even made its official debut.

Let’s me be Dodd-Frank with you…

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Image courtesy of Tony Dowson/FreeDigitalPhotos.net

Things are looking grim for Dodd-Frank, the Wall Street Reform and Consumer Protection Act. The Republican-led House Financial Services Committee argued that the law sucks for the economy since it slows it down, and today passed a bill that would overhaul and repeal parts of it. It certainly helps Republicans that President  Trump promised way back in his campaign to overhaul the law, which he says costs banks a fortune in compliance and limits lending way too much. Democrats argue the opposite and are convinced that the bill, if passed, will once again create the same conditions that led to the 2008 fiscal crisis. In case it wasn’t obvious, the law was initially passed under President Barack Obama. Naturally, Democrats voted against the bill and lost 34-26.

Trump Tweet-Targets Nordstrom; Under Armour CEO Says It All Wrong; Wells Fargo Continues to Anger

Oh no you didn’t…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

 

Just one week after pulling Ivanka Trump’s fashion line from its stores, Nordstrom has managed to incur some serious Presidential social-media wrath, via Twitter of course. The Tweeter-In-Chief wrote that his daughter was “treated so unfairly” by the department store and “She is a great person — always pushing me to do the right thing! Terrible!” Nordstrom argued that the merchandise’s performance wasn’t up to snuff, and that it regularly evaluates the thousands of brands that it carries to decide which ones get the boot and which ones don’t. And Ivanka’s line got it, though the chain had been carrying the line since 2009. Back in November, Nordstrom co-president Pete Nordstrom sent out a company memo explaining that the turmoil surrounding the election is putting the retailer in a “tight spot.” It risks offending Trump-haters for keeping the line, but also risks alienating shoppers who support him. Nordstrom tried to explain that it makes a “sincere effort not to make business decisions based on politics but on performance and results,” but found itself “in a very difficult position.”  That difficult position probably had to do with calls for boycotts of the merchandise, and even the store.  And it’s not like Nordstrom was the only one who took this sort of action. Neiman Marcus Group also stopped selling her jewelry online and in one of its stores in the northeast. Shares of Nordstrom had dropped a smudge 1% following Trump’s tweet. But they quickly bounced back. So maybe the effect of Trump’s fury only goes so far.

That’s gonna come back to haunt you…

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Image courtesy of aechan/FreeDigitalPhotos.net

Speaking of which…Under Armour CEO Kevin Plank played nice with Trump so of course, it’s now going to cost him. Literally. During an interview on CNBC’s “Fast Money Halftime Report,” host Scott Wapner asked the athletic apparel chief executive about his involvement in Trump’s initiative to create manufacturing jobs in the United States. Some of the pearls that escaped Plank’s mouth included, “To have such a pro-business president is something that is a real asset for the country…People can really grab that opportunity.” [cue crickets chirping]. Naturally, Under Armour had to issue a statement to clarify Kevin Plank’s remarks – lest anyone think that he really meant what he said, which would lead to a boycott. Except that sort of already happened as “Boycott Under Armour” hashtag made its way into the Twitter-sphere in no time. In the meantime, UA insisted that it engages in “policy, not politics” and Plank’s statements had to do with job creation.  I shall spare you the details of official company statement – you’re welcome! – but rest assured it included all the usual themes about the beauty of unity, diversity, welcoming immigrants etc. The fact is, UA can’t afford any boycotts, whether Plank meant what he said or not. Its shares have been falling lately and in its most recent earnings report, the company missed expectations and forecasted slower growth for 2017.

And here’s one more reason to hate Wells Fargo…

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Image courtesy of iosphere/FreeDigitalPhotos.net

In case you weren’t incensed enough by Wells Fargo’s fraudulent account scandal, CEO Tim Sloan said that the bank is committed to helping the Dakota Pipeline project. While it would be nice to focus all rage on Wells Fargo, who loaned $120 million toward this project, the fact is the bank is just one of 17 that gave loans to help fund the $3.8 billion project. Obama had initially halted the project, but President Trump swiftly reversed that action and is looking forward to its completion. Come June, the pipeline is expected to ship half a million barrels of crude every day from North Dakota to Illinois. Unfortunately the 1,200 mile pipeline cuts through an Indian reservation with deep cultural significance, and it’s likely the pipeline will incur damage on the site. The pipeline also poses major environmental hazards where it crosses the Missouri River. The Standing Rock Sioux reservation is downstream from the crossing and the pipeline could end up polluting the Tribe’s drinking water. The Seattle Council is doing its part to combat Wells Fargo’s involvement by pulling about $3 billion in city funds.  Seattle has a contract with the bank that expires in 2018, and it most definitely will not be renewed. In the meantime, the council is on the hunt for a more “socially responsible bank.” Good luck with that one.

Fall-Mart; Twitter Fires, Twitter Hires; Feeling Spent

Execu-llent…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Even though Twitter announced yesterday that it is shedding 8% of its workforce, today the social media company announced that its adding someone new to that very same workforce. Enter Omid Kordestani who is jumping the Google ship in order to bring his fiscal talents over to embattled Twitter.  Omid will assume Jack Dorsey’s old title of executive chairman, which he dropped last week when he, once again, assumed the title of CEO. Omid Kordestani comes to Twitter from not-at-all embattled Google Inc. where he not only left the post of Chief Business Officer, but also $115 million in equity awards. That’s according to a regulatory finding, anyway. Omid, who was apparently employee number 11 at Google, and affectionately called Google’s “business founder” by Larry Page, left the company in 2009, but returned in 2014, only to head on off into the Twitter sunset.  Even though Omid Kordestani started his Twitter account back in 2012, his most recent tweet about his new post, was only his eleventh time using the platform. His lack of tweeting is, presumably, about to change.

Not “fine” by me…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Wal-Mart might be the mother-of-all retailers but, as they say, the bigger they are, the harder they fall, especially on Wall Street. And unfortunately, a big company like Wal-Mart has a nasty little way of taking the Dow Jones Industrial Average with it.  This particular fall was, unfortunately, rather epic. Wal-Mart took a $20 billion hit because it’s predicting a very disappointing forecast. The world’s largest retailer doesn’t expect to experience growth for fiscal 2016 (which ends in February, btw). Investors loathe bad forecasts. Well, who doesn’t? This bad forecast gave way to Wal-Mart’s biggest stock drop in 15 years and shaved 9% off the value of its shares. Of course, the strong dollar gets part of the blame as it’s hurting sales abroad. But then there’s the investment the company is putting into its e-commerce. Wal-Mart is looking to plunk down $900 million next year, and over a billion dollars the following year to beef its tech efforts. All that cash is going to gouge those much relished profits. Also eating into those profits are wage increases that the company is giving out to thousands of employees. But what really got Wall Street in a fit was when Wal-Mart CEO Doug McMillion told CNBC interviewers that Wal-Mart will do “fine” during the holiday season. And that one word means anything but to investors.

Save it for later, will ya?

Image courtesy of  FrameAngel/FreeDigitalPhotos.net

Image courtesy of FrameAngel/FreeDigitalPhotos.net

Retailers aren’t exactly giddy these days as more Americans decided to save up all that money from low gas costs instead of spending it. As a result, retail spending only experienced a .1% gain in September even though analysts predicted gains from .2% to .6%. Since consumer spending accounts for 70% of the economy, that .1% gain is nothing but brutal fiscal news. In fact, seven out of thirteen retail categories experienced declines. Ironically enough, gas stations took a 3.2% hit because…can you guess? Lower prices at the pump. Hence, they couldn’t pull in all that cash like they did in the past. What isn’t ironic, just annoying and mildly disconcerting, is that this .1% was the biggest drop since January and represented no change from August. So get out there and spend!

Forbes/Trump Smackdown; Getting Chip-py With It; Ralph Lauren Preps New CEO

Donald Donald Donald…

Image courtesy of ponsulak/FreeDigitalPhotos.net

Image courtesy of ponsulak/FreeDigitalPhotos.net

To take your mind off the fact that we have yet to find a cure for cancer and AIDs, or that people all over the world are living in abject poverty, we now turn our attentions to the Donald Trump vs. Forbes magazine smack down. The two entities are going head to head over Donald Trump’s estimated net worth, with Trump insisting that Forbes has its facts all wrong. “I’m a private company […] I like the people at Forbes but they don’t really know my assets very well,” the Donald said during an interview for CNBC. Forbes says that The Donald’s real estate fortune can be pegged at $4.5 billion, a figure that has the Republican presidential candidate in a snit because he is convinced that the magazine is trying to paint him “as poor as possible.” As if that were possible. Trump insists he’s worth more than $10 billion, questioning Forbes arithmetic skills. Common core, perhaps?  Forbes, in its calculations, doesn’t place a value on brand and that irritates the real estate mogul because the Trump brand, according to Trump, is very valuable and might have led Forbes to a far different fiscal outcome. Maybe. Donald Trump apparently does not take comfort in the fact that he was ranked as the 19th richest American, or that he is by far the wealthiest of the presidential candidates. He’s also miffed that Forbes had the nerve to say that he has a paltry cash stash of just $327 million (forget the research that went into computing that amount) “But I have a lot of cash,”  he insists in a CNBC interview, explaining away that his cash bank account is bursting from the $793 million sitting in it, all green and crispy.

Chipped off…

Image courtesy of sscreations/FreeDigitalPhotos.net

Image courtesy of sscreations/FreeDigitalPhotos.net

Today marks the dawn of a new -and hopefully less fraudulent-riddled – era, as business owners large and small now become liable for fraudulent activities. If a consumer’s info gets swiped, the business from which the offense originated eats the cost and not the bank that issued the card. Consumers, many who are now armed with credit cards containing EMV chips –  as in Europay, MasterCard and Visa (what you thought it was going to stand for some obscure tech jargon?) will now be able to conspicuously consume using new terminals intended to reduce exposure to fraud. In order for the chip to be really secure, a pin number should be used with it. Otherwise, don’t come crying to EMV. I say reduce, because sadly, it does not completely obliterate the cold, callous felonious act. It’s estimated that about 32 million consumers had their credit card info swiped last year, nearly triple that of 2013. The chip creates a unique code for every transaction. But if you have yet to receive your chip card, rest assured that your magnetic stripe-outfitted cards can still be used. Sorry to say but the chip cards won’t be of much use for your cyber-shopping excursions. So make sure the site with which you transact is legit. American Express is getting their chip-action going on October 16 while gas stations get until 2017 to upgrade their terminals.  So far more than 200 million cards with chips in them have been sent out.

Movin’ on up-market…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

A new king has been crowned over at Ralph Lauren, as its namesake CEO, Ralph Lauren himself, “stepped up.” That is not a typo but rather a direct quote from the preppy American style icon, who also happens to be the largest shareholder and intends to maintain his creative input at the company. The new CEO is none other than Stefan Larsson, CEO extraordinaire to fast-fashion brands Old Navy and H&M. His resume actually had some haters doubting the dude who has a lack of luxury goods experience. But Wall Street doesn’t seem to mind as it sent shares of Ralph Lauren up a much needed 12% on Wednesday while also taking a 6% chunk off of shares of Gap Inc for losing its rock star executive. The haters apparently aren’t paying enough attention to the fact that under Larsson’s leadership, Old Navy saw three consecutive years of growth and was the only one of the Gap Inc. brands to show growth at all, 5% just this year. In the meantime, Ralph Lauren had some quarters that were anything but, shall we say, fashion-forward, and is down a dismal 37% for the year.

Walmart’s Court-ing Big Problems; What’s in a Name? Ask Chrysler, If You Can Still Call It That; Stuyvesant High Schooler Fails in Lying;

 Hitting a Wal…mart…

Image courtesy of nirots/FreeDigitalPhotos.net

Image courtesy of nirots/FreeDigitalPhotos.net

Walmart’s lawyers have been especially busy this year. But not to Walmart’s advantage, it would seem. The retailer just got word that a Pennsylvania supreme court upheld a lower court’s ruling from 2007 that it has to pay over $150 million to approximately 187,000 employees who sued the the company in a class action suit. According to the lawsuit, Walmart stiffed employees by not compensating them for rest/meal breaks, or actually making them work through those breaks and then not paying the unrested, hungry employees for that time. Of course, Walmart is considering appealing the ruling, whose amount is sure to put a major dent in its quarterly earnings. I’m guessing you’re not as choked about that as Walmart execs are. Then there was last weeks’ decision by a National Labor Relations Board administrative law judge who found that the US’s largest employer also threatened employees in California because they tried to organize. Back to today, the lawyers and family of John Crawford, who was shot inside a Beavercreek, Ohio Walmart , named the corporation in a lawsuit. The lawsuit alleges that Walmart did not provide a “reasonable place to shop” because a bb gun involved in the shooting was left unpackaged in the store for two days.

What’s your name again?

Image courtesy of olovedog/FreeDigitalPhotos.net

Image courtesy of olovedog/FreeDigitalPhotos.net

Chrysler Group LLC it isn’t. Well, it was. Up until Tuesday morning when the automobile manufacturer announced it was changing its name  to “FCA US LLC.” Got that? Neither did I. But apparently this name fits in better, globally, anyway, with its parent company Fiat Chrysler Automobile NV. But it’s okay if you forget and call a Chrysler a Chrysler, because those cars will still be made and be called Chryslers, along with Jeeps, Dodge and Fiats, who are all also keeping their names. The company – and name – which originated in 1925, with some vision and assistance from the very industrious Walter P. Chrysler, employs 77,000 people all over the world and has 36 manufacturing facilities, with 23 in the United States alone.

He lied! He lied!

Image courtesy of africa/FreeDigitalPhotos.net

Image courtesy of africa/FreeDigitalPhotos.net

Looks like Mohammed “Mo” Islam is not such a whiz kid after all. After a story appeared in New York magazine about a 17 year old Stuyvesant High Schooler who was rumored to have pocketed $72 million in the stock market, it turns out none of it was true.  The story was picked up by just about everybody, including this blog, and the young man and a friend were even scheduled to do an interview on CNBC to discuss their non-existent success.  However, New York Observer’s Ken Kurson, and a team of media and legal professionals uncovered the hoax, after noticing how so many many people questioned the story, which first picked up steam inside the hallowed halls of Stuyvesant High. Apparently the only trades Mohammed ever made were simulated ones and his fortune is more akin to the fake kind you might find in a board game. New York magazine did issue an official apology, but it seems that it’s the wrath and disappointment of Mohammed’s parents who will make Mohammed come to rue his dubious actions. According to Mohammed, his dad, “wanted to disown me. My mom basically said she’d never talk to me.” And who can blame them.

 

Is Justin Bieber Set to Become Silicon Valley’s Newest Titan?; Microsoft Has “Taxing” Scuffle With Chinese; Not Thankful for Jobless Claims Number

Smile and say Bieber!

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Looks like Twitter is going shopping this holiday season. It also looks like Twitter CFO Anthony Noto could use a comprehensive tutorial on how his company’s platform works. The social media exec publicly tweeted about a potential acquisition, which judging by the context, was actually meant as a private message. Of course, the internet universe went into overdrive speculating which company was the subject of the accidental tweet. The mystery was solved when CNBC reported that the company in question is none other than Shots, a selfie app backed by Justin Bieber. How convenient for him. And while it may be difficult for some (many) to stomach that Justin Bieber stands to make a fortune from an industry dominated by geniuses, know that the app already has 3 million users, 2/3 of whom are women under the age of 24.

Taxed out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Microsoft is in really big trouble. Like $150 million worth of trouble. According to a report by the Chinese state-run Xinhua News Agency, Microsoft, while not specifically named, but rather referred to as “Corp. M”  has to pay $150 million in back taxes and interest. A source, who is not officially allowed to speak about it publicly, (but spoke about it anyways, presumably in private, to someone who then made it public) confirmed that Corp. M is indeed Microsoft. Along with car manufacturers, GlaxoSmithKline, other tech companies – the list goes on, that have had actions taken against them, Microsoft is being accused of tax evasion because its China subsidiary reported losses while other players in the field did not. Hmm. China says Microsoft was moving the profits offshore. Of course, Microsoft disputed all this and says the settlement actually has to do with a “bilateral advanced pricing agreement” and not back taxes. By the way, back in May China banned Windows 8 from being installed on public computers. Just saying.

Thanksgiving downer…

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

Not that I’m trying to put a downer on your holiday weekend, but jobless claims are up. If you think that sucks, be thankful that you’re not among the jobless. And if you are, my apologies. The number of claims increased by 21,000 to 313,000 claims, according to the always-good-for-a-downer Labor Department. That’s the highest number in three months. Analysts actually predicted a drop to about 288,000 claims. The number of people, however, receiving jobless claims dropped by 17,000 to 2.32 million people. So it’s not all bad. Besides, there really is no need to freak out, just yet, anyways, since the holiday season has just begun and for some reason that means those gosh-darn numbers aren’t as ominous as they would be at other times during the year.

IBuMmer; Icahn/Andreesen Billionaire Smackdown; Valeant/Allergan Smackdown

 Big Blue-boo…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Perhaps you recall IBM?  Perhaps you don’t. The once powerful company that sat at the forefront of technology is now at the forefront of…nothing as the company just released its very disappointing earnings. The once mighty maker of chips – and I don’t mean potato (though we might be seeing better earnings if the chips were indeed of the potato variety), has sold that portion of its business. Revenue was down 4% to $22.4 billion which might seem like a nice beefy number except that analysts were expecting $1 billion more than that. And the company’s revenue has been going down for a few years now.  Analysts expected  the company to at least pull in $4.32 per share. It didn’t. Instead, profits for IBM took a 10% dive earning $3.68 per share.  Oh well. There’s always next quarter.

Love doesn’t live here anymore…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s official. Marc Andreesen and Carl Icahn are not friends. And I don’t think they ever can be. At least not anymore after Mr. Icahn said in an interview that Andreessen is “what’s wrong with corporate America” and Andreesen telling CNBC that Carl Icahn lies and “makes stuff up.” Where is the love gentlemen? In any case, the latest episode in the Icahn/Andreessen saga is that Marc Andreesen has bid a not-so-fond farewell to the board over at EBay. It seems the extremely prescient Silicon Valley billionaire, Andreesen, and activist investor, Icahn,  got themselves tangled in yet another kerfuffle which has probably something to do with the kerfuffle they had earlier where Mr. Icahn accused Mr. Andreesen and fellow board member, Scott Cook, of having conflicts of interests where PayPal and EBay are concerned. I shall spare you the lurid details. Mr. Andreesen and Mr. Cook vehemently disagreed with Mr. Icahn’s accusation. But alas, it matters not as PayPal is no longer one with EBay. As for hopes of Mr. Andreesen and Mr. Icahn burying the corporate hatchet (or whatever it is that insanely wealthy executives do), don’t hold your breath.

A wrinkle in plans…

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Perhaps you may recall pharmaceutical giant Valeant? Perhaps you recall how this pharmaceutical giant wanted to take over another pharmaceutical giant by the name of Allergan, notable for perennial fan fave Botox? And perhaps you recall that Allergan would prefer if Valeant would just go away? Well, it looks like that’s not going to happen anytime soon as Valeant just released some very impressive earnings, easily trumping analysts’ expectations. Except that Valeant also had good earnings. But no matter because Valeant really wants very badly to scoop up Allergan even though Allergan very badly does not want that to happen. Activist investor Bill Ackman, and his Pershing Square Capital Management LP, who is gunning for an Allergan takeover, just might make that even likelier and hostile-r because of Valeant’s newly announced, financially robust numbers, since numbers like those will allow him, together with Valeant, to up the ante to buy out the fabulous Botox maker.