Oil-vey! Trump’s Secretary of State Pick Putin Us On; Trump vs. Silicon Valley; Rate Hike Sends Joy Throughout Wall Street

Energized…

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Trump’s latest pick, this time for Secretary of State, has naturally already ruffled more than a few political feathers. Enter Exxon Mobil Corp. CEO Rex Tillerson, a man who happens to be very very cushy with Russia and its fearless leader, Vladimir Putin. If you recall, Russia is very brazenly messing with Ukraine, to the point where the U.S. felt compelled to impose sanctions. Now, the CIA said the country also launched cyber attacks against the U.S. in an effort to influence the election results. But that very same country awarded Tillerson the Friendship Medal in 2013.  Tillerson, who has never held a public office, has been at Exxon, the world’s largest energy firm, for 40 years and during that time spent many many hours cultivating relationships and establishing major business deals with countless foreign countries and companies. But he’ll still need to be confirmed by the Senate. However, considering that former Secretaries of State Condoleeza Rice and James Baker are big fans, not to mention Defense Secretary Robert Gates, he shouldn’t have too much of an uphill battle. By the way, Condoleeza Rice also happens to be a consultant at Exxon Mobil, and Robert Gates was a consultant at one point too. Rumor has it that they all plan to vouch for the CEO.  Lindsay Graham and John McCain, however, are just not that into him, presumably because of his chummy relationship with Putin, of whom they are not particularly fond. Also not in Tillerson’s favor is the fact that Exxon currently has billions of dollars in deals with Russia, not to mention one valued at $500 billion that involves exploring and pumping for oil in Siberia. Those deals can only go forward if the U.S. decides to lift its sanctions against Russia and, fyi,  Tillerson was never much of a fan of the sanctions. And just so you know, according to a filing from a year ago, Tillerson owns $218 million in Exxon stock along with a $70 million pension plan. Shares of Exxon Mobil went up 2.2% on the news of Tillerson’s nomination.

 

Speaking of Trump…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Tomorrow is a big day at Trump Towers as some of Silicon Valley’s top execs head over to the President-elect’s digs for a little quality time with Donald Trump. Expected to attend the power meeting are: Apple’s Tim Cook, Facebook’s Sheryl Sandberg, Microsoft’s Satya Nadella, Amazon’s Jeff Bezos, Tesla’s Elon Musk and Google’s Sergey Brin and Eric Schmidt…to name but a few. While the agenda’s not public, there are some predictions about what might be discussed tomorrow. There’s the not-so-minor issue of antitrust enforcement and those pesky government demands for user data. But much higher on that list is Trump’s immigration policies and how they have the potential to put a very major damper on the inner workings at many of these Silicon Valley companies. The fact that these companies bring in a lot of employees on special visas, not to mention that they also send plenty of jobs overseas, doesn’t exactly jibe well with Trump’s vision of “Making America Great Again.”  To be fair, Apple did say it has 80,000 employees in the United States and is also responsible for creating another 2 million jobs from all the business opportunities Apple creates. However, Trump did say, in his very eloquent way, that he wants to “get Apple to build their damn computers and things” right here.  Donald Trump is all for establishing major tax reforms and is acutely aware that all these tech companies have a lot of cash offshore. Major reform will help bring that cash back to the States. So its in everyone’s best interests to work together towards that goal, whether they supported Trump’s presidential aspirations or not. And for the record, they did not.

Stocks, and bonds and hikes…Oh my!

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Stocks all over the world rejoiced today by going up while the Dow Jones Industrial Average came thisclose to hitting the 20,000 mark following its 9% surge since Election Day. Actually, the index came within 50 points of the 20,000 mark which sent Wall Street into fits of fiscal joy. The S&P got in on the action by going up .8% to its very own all-time high. The reason for all this excitement is because the Federal Reserve is expected to officially and finally finally announce a rate hike tomorrow, marking the second time in ten years that we get to witness and take part in that elusive increase. Rate hikes are welcome since they signal that the economy is strong and steady in all the right ways. Low interest rates have this nifty little effect on stocks that makes them cost higher. Problem is low interest rates are just no good  for the savers among us who like high interest rates because of the income they get from bonds and bank accounts.  Even though borrowing costs are about to get that much higher, investors are still positively giddy at the prospect that the President-elect intends to usher in an era of potentially lower corporate tax rates, less regulation and lots more infrastructure spending.

 

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Waffle House: For All Your Shipping Needs; Home Deport Improves Earnings; Fed Chairwoman Ponders Millenials

Can you expedite that waffle?  

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

What do you get when you cross a restaurant chain known for its waffles with a delivery app? Roadie, of course. Haven’t heard of it yet? That’s probably because it’s only been up and running for a few weeks. However, it’s already got $10 million worth of funding with some of that cash coming from Google’s Eric Schmidt. The app is also being touted as the “Über of shipping.” The idea, created by founder Marc Gorlin is so simple yet so genius. It matches up people who need to ship something with other people who are already driving to that location, often for much less than what the usual shipping companies charge. And just where do the waffles come in? Enter Waffle House and its 1,750 locations which will serve as the meeting points for shippers and insured drivers. The cost to ship an item  – and yes it has to be legal! – with a “Roadie” could range from $12 – $200. First time “Roadie” downloaders are eligible for a free waffle. Get a free beverage to take along with you every time you make a delivery.  While it’s only available in 25 states , primarily in the southeast, there’s no need to fret. With 7,500 downloads and counting all signs point to some major expansion plans sooner rather than later.

Where can I find nails?

Image courtesy of zole4/FreeDigitalPhotos.net

Image courtesy of zole4/FreeDigitalPhotos.net

Home Depot had a particularly fabulous fourth quarter pulling in a 36% profit. Net income came in at $1.38 billion at about a buck per share Analysts only predicted Home Depot would gain 89 cents per share. A year earlier the company gained 73 cents per share. So what gives?  It seems the retailer earned some major cash from its website and its big push to improve customer service has paid off quite nicely for the world’s largest home improvement retailer. If you are lucky enough to be one of Home Depot’s esteemed shareholders , then congrats to you as you just earned 12 cents per dividend, which is now up to 59 cents per share. The company even has big plans to buy back $18 billion in shares. In the market for some gainful employment?  You might want to check out Home Depot’s job board. The company is looking to fill 80,000 jobs for the spring, the store’s busiest season. Unfortunately, the retailer’s forecasts for the year are tinged with a bit of disappointment as it is convinced that the exchange rate and that especially robust dollar of ours is going to put a 6% ding in the stock this year.

Everyone likes a good mystery…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fed Chairwoman Janet Yellen is taking fiscal center stage today before the Senate Banking Committee.  The Fed Chairwoman gets to enjoy two days of back to back congressional testimony where she will be grilled on a loooong list of complaints, courtesy of the Republican controlled House and Senate. Among the questions with which she will be peppered is when exactly does the Fed plan on hiking those interest rates, an answer that has been eluding the American people and its elected officials for quite some time.  Not exactly the stuff that Oscar nominated movies are made of. But on Capitol Hill that testimony could give Game of Thrones a run for its money. Ms. Yellen also wondered aloud about that mysterious lot born in the eighties and nineties, a.k.a. Millenials. The Fed Chairwoman finds them to be a bit of a mystery and is unsure how the economy is going to affect them. If that’s what she’s wondering about them then I’m guessing she doesn’t get to Chipotle very often.

Smokin’ Earnings for CVS; Yelp Satisfies Craving by Scooping Up Eat24; Israelis Go Full Force On Corporate Cyber Attacks

Butt out…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

CVS had some smokin’ good earnings even though it kicked the tobacco habit. As one of the largest pharmacies in all the land, CVS beat those fourth quarter estimates, and perhaps even shocked the tobacco industry, by earning a record $1.32 billion in profit and $1.21 a share. A year ago CVS pulled in $1.27 billion, tobacco and all. It was a big gamble, getting rid of cigarettes and its nicotine friends, since tobacco helped CVS pull in $2 billion annually. What may have contributed, however, to this quarter’s pleasing numbers was a super-combo of two very unique factors:  First, there are more insured Americans – who were previously uninsured – making up for lost times by getting all their prescriptions filled, and then some. Then there was that flu vaccine that proved less than useful against this season’s particularly nasty strain of the virus. Because the vaccine wasn’t as effective this time around, consumers were flocking to CVS to buy flu remedies causing a 13% increase in sales to $37.1 billion. Analysts only expected CVS to pull in $36 billion. So I guess, in some weird alternate universe, CVS can thank the flu. Sort of.

Can I get that to go?

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Image courtesy of Iamnee/FreeDigitalPhotos.net

Yelp is hoping to increase its presence in the food delivery arena by chowing down Eat24 to the very hearty price of $134 million. The two companies did some experimenting over a year ago and apparently it whet Yelp’s appetite to go full force on acquiring the online ordering engine. While Eat24 was only founded back in 2008, it already deals with 200,000 restaurants in 1,500 cities. Yelp will now compete with GrubHub –  who itself had a nifty little IPO debut back in April –  and is counting on its recent purchase to allow for a more streamlined approach to the online ordering experience. Sounds pretty tasty to me. Yelp currently has around 84,000 advertising accounts and, in case you were curious, it also has about a million restaurants listed with 135 million average monthly users dishing out their reviews, however unsavory they might be.

Bring it on…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Because Israel’s cyber-security is actually a matter of life and death for its citizens, it only make sense that it would lead the way in cyber-hacking defense. And since necessity is the mother of invention, it should come as no surprise that the latest defense mechanism to be used in the fight against corporate hacking – think Target, JPMorgan Chase, Home Depot, to name but a few –  is coming from Israel’s military. And hey, if you happen to make a few bucks on all the economic opportunities that come with protecting your peeps, then why not? Unit 8200, Israel’s elite intelligence division, has entered the cyber defense fray, launching its very own “cyber security” foundry called Team 8. With some help from investors like Google Chairman Eric Schmidt and Cisco, it’s safe to say (no pun intended, or maybe a little) that Team 8’s got some major street cred. Founded by former Unit 8200 member Nadav Zafrir, Team 8 bills itself as a “start-up for start-ups” (catchy, huh?).  No doubt Target, Home Depot and JPMorgan Chase are currently exploring their cyber-security options and licking their chops in anticipation of what Team 8 can do for them. Or not. Whatever the cost to implement the technology, it will still pale in comparison to the epic damage cyber hacks can cause. But I’m guessing if Eric Schmidt is throwing money at Team 8, then it’s probably worth it to have a go at the technology.