Fed Chairwoman Shuts Down Congressman; Mattel Goes For Big With Alibaba; Apple Hits New High On iPhone Dreams

Sit back down…

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Almost everyone’s favorite Federal Reserve Chair, Janet Yellen, was in the hot seat today. First she graciously explained in a letter to Republican Congressman Patrick McHenry that, in fact, the Fed possess the authority and has the responsibility to work and consult with foreign entities with regard to financial industry oversight and the development of international banking rules. McHenry, who is Vice Chairman of the House Financial Services Committee, didn’t appreciate that the Fed had already engaged in international talks before President Trump had a chance to put his peeps into play to conduct their own reulatory review. But no dice for McHenry as Chairwoman Yellen explained that such efforts were to the benefit and in the best interests of the United States and its financial stability. In other news, Ms. Yellen was mum on whether the Fed would raise rates at its next meeting in March but said waiting too long wouldn’t be a good idea. Besides inflation and the labor market, Yellen and co. are looking to see what policy changes President Trump is going to make before making any major announcements from the Fed’s end. Which seems like a prudent plan, especially from someone who was appointed by President Obama, but is doing her best to keep from playing sides since she has still has a few years left on her term during the current administration. And also because Trump criticized her during the campaign when he said that she was deliberately keeping rates low in order to benefit President Obama. Yikes.

Ni-Hao Barbie…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Mattel’s wound licking might just be on hold for now, despite losing some major Disney-Princess licensing mojo to Hasbro awhile back. The toy company has begun to forge a new path with Chinese e-commerce giant Alibaba. Nothing like gaining a foothold in the $7 billion Chines toy marketplace to ease those Disney-licensing blues. By the way, the United States’ toy industry is estimated at over $20 billion. Just saying. The company that makes Barbie dolls and Hot Wheels cars is in a partnership with Alibaba to create and promote interactive and educational toys, in addition to producing entertainment content based on Mattel products. Because hey, who doesn’t love shows based on toys – and vice-versa? Mattel will be selling its new wares via Tmall.com, which is Alibaba’s business-to-consumer retail site. Incidentally, Mattel had already been selling on Tmall.com for about six years now and rumor has it that its selection of Fisher-Price toys have actually been the top-sellers for five years in a row on Alibaba’s November 11 Singles Day. Mattel’s new products for Alibaba will hit Alibaba’s virtual shelves by mid-2017.  Mattel could really use the boost, especially since sales of Barbies have not been doing as well as they have in the past, and despite throwing some more realistic features onto the doll. Also, the company reported an earnings miss February 1, taking in 52 cents per share on an 8% revenue decline to $1.83 billion, when analysts expected 71 cents per share. But with Alibaba boasting over 440 million active buyers, chances are Mattel has the ability to turn that last earnings report into a mere distant bad memory.

Apple of my i-Phone…

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For the first time in two years, Apple hit a new high of $134.90 and a market cap of $701 billion. And in case you don’t own any shares, that probably means a whole lot of nothing to you. The last time it hit a new high was back on April 28, 2015, when the stock hit $134.54. But that 36 cents means a whole lot to investors who are hoping, and probably betting, that Apple will release a new iPhone, dubbed the iPhone 8, or the iPhone X – if you dare –  that will magically lift blah sales for the tech giant. While the company reported impressive earnings in its last earnings report, its outlook was less so, and the fact that Apple’s revenue decreased by 8% for 2016 didn’t help the mood on Wall Street as of late, even if it is the most valuable company in the world.  Rumor has it, the new phone is going to be even more expensive than previous ones, which is always a good way to get Wall Street tongues wagging.

GM Invests in US. Trump Takes All the Credit (Again); Tiffany & Co. Credits Trump for Quarterly Loss; No Trump-ing Mattel with New CEO

Pressure cooker…

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GM just announced that it is throwing a whopping $7 billion into several of its U.S. plants in order to bring back thousands of jobs, in addition to the 56,000 hourly workers it already employs here. Naturally, Trump is taking credit for these actions and it’s kind of weird that he would since GM said these plans were already in place for months. Who you choose to believe doesn’t matter because Trump already tweeted about it:”With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back…I believe the people are seeing ‘big stuff.'” Nothing says POTUS quite like the term, “big stuff.” But just so you know, GM didn’t exactly deny that Trump didn’t have something to do with its newly announced plans either. Although, General Motors did mention something to the effect of “this was good timing.” Feel free to read into that however you want since it’s no secret that Trump was gunning for GM over its manufacturing of the Chevy Cruze south of the border, and then bringing it back into the country tax-free. Incidentally, GM CEO Mary Barra is part of a panel of CEOs who are advising Trump on economic policy. Also incidentally, Mary Barra is expected to attend the President-elect’s inauguration.

Good fences?

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Guess who else is not happy with Trump? Okay, I guess that list is kind of long so I’ll just tell you: Tiffany & Co. The jeweler, which happens to own a flagship store that is adjoined to Trump Tower, reported a 14% drop in sales at that very store on Fifth Avenue. To be fair, the iconic jeweler was expecting a drop thanks to Trump. Only this one was worse than expected, citing “post-election disruptions.” Roughly translated, that means that in addition to the many many anti-Trump protesters, potential shoppers also had to contend with heightened security, courtesy of the secret service and NYPD, not to mention journalists and hoards of tourists eager to see if they could catch a glimpse of the President-elect. So just how bad were Tiffany & Co.’s sales? Well, in the US, those numbers only came in at $483 million, with comparable store sales down 4%.  And the luxury retailer isn’t very hopeful about those numbers going up in 2017.  But because Trump isn’t everywhere, global sales of Tiffany & Co. came in at $966 million, which was just a tad bit higher than last year at this time.

Don’t toy with her…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Barbie is getting a new boss as Mattel gears up for its second CEO since 2015. Enter Margaret “Margo” Georgiadis, whose last gig, for the past six years, was over at Google. She was President of Google Americas and oversaw commercial operations and ad sales for the U.S., Canada and Latin America. So, it’s safe to say she’s (over?) qualified for the job. She is among just 27 top ranking female executives at Fortune 500 companies. Georgiadis, who also worked at Groupon and Discover Financial Services, begins her role at Mattel on February 8, where she will also sit on the board of the company. She’ll be tasked with coming up with new, and hopefully ingenious ways to boost sales in a climate that has kids hypnotized by mobile devices. Unfortunately, these nefarious electronic gadgets have been putting a dent into the sales of not only Mattel, but Hasbro and Lego as well. However,  given that Georgiadis has a reputation for successfully building brands, boosting sales of Fisher-Price, Hot Wheels and the American Girl line should be easy as pie. Well, hopefully.

A Green Giant Farewell; Mobile-ads: Verizon Set to Unleash Service; Everything Is Fiscally Awesome at Lego

Yo ho ho…

Image courtesy of  Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

It’s time for the Jolly Green Giant to pack his bags. Together with Le Sueur, the two brands are getting some new digs over at B&G Foods, home to favorites such as Cream of Wheat and snack sensation Pirate’s Booty (a personal fave). B&G is paying $765 million in cash for the joy of adding the oversized brand symbol to its coffers and is expecting the Giant and his 160 plus products to bring in net sales of over half a billion, adding 60 cents per share. Jolly Green Giant and Le Suer are currently under General Mills, however, the maker of  Cheerios has been noting a shift in consumer preferences and has decided now would be a good time to unload the two companies. Apparently, shoppers are preferring fresher selections, as opposed to the sauce laden and frozen offerings that Green Giant and Le Sueur crank out. General Mills, which also has Yoplait yogurt, will now focus its efforts – and of course, money – into cultivating its brands and geographical locations that have more potential. It will also put a bit more oomph into some edible health and wellness endeavors. Which basically means it will shift gears to whatever products and areas will bring in the most amounts of cash. Sounds fair.

You’ve got ad-sales…

Image courtesy of twobee/FreeDigitalPhotos.net

Image courtesy of twobee/FreeDigitalPhotos.net

AOL (remember them?) also did a little shopping today picking up Maryland-based Millennial Media Inc. to the tune of $250 million to broaden its mobile-ad market share. At that price, the company was bought for $1.75 a share, a 31% premium to its closing price on Wednesday. Millenial took in almost $300 million in sales with an $83 million net loss last year. Verizon Communications Inc picked up AOL back in June for a trifle $4 billion, in an attempt to beef up its mobile ad technology, something at which AOL apparently excels. Verizon AOL now has big plans to challenge Facebook and Google (is that even possible?) who currently reign supreme over the mobile-ad market, and unleash its own mobile streaming video service called Go90.

Brick by brick…

Image courtesy of ArtJSan/FreeDigitalPhotos.net

Image courtesy of ArtJSan/FreeDigitalPhotos.net

Lego may not be a publicly traded company, but the company sure manages to pull in some boffo numbers, even surpassing Mattel as the world’s largest toymaker. Which is particularly insane since it only makes…well, Lego.  And while Mattel’s Barbie, Hot Wheel and Fisher-Price products still have sway, those toys, can’t seem to get a plastic leg up on Lego’s mesmerizing Ninjas and elves and…well, everything else. In fact, Mattel’s revenue fell almost 5% to $1.91 billion, with unwelcome help from Barbie and company. Lego, however, benefitted from foreign currency swings, not to mention a boost from The Lego Movie. The Danish company scored 3.55 billion Danish kroner, which translates to $537.5 million in the first half of the year and took in a 31% jump in profits. The company’s revenue also rose 23% to $14.14 billion. And there’s no reason to forecast that theses numbers won’t continue to rise. With a new Star wars movie coming out, which always does a fine job of boosting Lego sales, and a new video game, Lego Dimensions, due out late September, the toy company’s outlook is nothing but rosy.

Hail to Retail, Janet Yellen’s In the Hot Seat and Lego’s Leg Up

A tale of retail….

Courtesy of digitalart/FreeDigitalPhotos.net

Courtesy of digitalart/FreeDigitalPhotos.net

I’m guessing you did a lot of shopping in the last few months, huh?  No? Not you? Well somebody around you did.  Actually a lot of people around you did. A lot. Retail stocks shot up beating forecasters expectations.  Companies like Sears and JC Penney, which took some big hits in recent months, rebounded with better than expected earnings.  And Best Buy?  It’s like whoa! Up 7% as I write this. Sadly you weren’t feeling the love for Chico’s.  What’s that all about? It was the glaring exception to this upward trend whose shares dipped an unflattering 8% after disappointing earnings.  Yikes.

Everything’s coming up chilly…

Photo courtesy ponsulak/FreeDigitalPhotos.net

Photo courtesy ponsulak/FreeDigitalPhotos.net

Arguably one of Wall Street’s biggest It people, Janet Yellen, took center stage today before the Senate and yes, she is a sensible central banker. Phew. Glad we got that out of the way.  And she thinks just like you do when you were surveyed by the consumer index, which, btw,  speaks volumes to both of yours intellect – namely that the economy is recovering. But darn be that chilly weather, she says, that keeps messing everything up (though it’s difficult to say just how much) – from the economy right on down to my very own driveway. Among her other important statements (none of which included anything about my driveway) she repeated the Fed’s promise to keep interest rates low as long as unemployment is still above 6.5%.  Does that make the situation a win/win or a no win?  Well that depends, I suppose on whether or not you are gainfully employed.

Go Go Lego…

Courtesy of ArtJSan/FreeDigitalPhotos.net

Courtesy of ArtJSan/FreeDigitalPhotos.net

If you still haven’t seen The Lego Movie you’re missing out. But Lego’s not too worried.  While the toy flick stayed #1 at the box office for the last three weeks and continues to pull in some impressive digits worldwide, it’s their other brands like Chima and Lego Friends that has this toymaker pulling in about $4.65 billion in 2013.  And while those numbers are nothing to sneeze at (yes, that ended in a preposition and ironically I did just sneeze )  it’s still second to Mattel with its $7.1 billion worth of Barbies and Fisher Price line.