Nasdaq’s Getting Crafty; Costco’s Earnings Knock it Out of the Warehouse; Labor Market Laboring

How crafty…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

Etsy is looking to join the big kids on Wall Street. The online marketplace for all things crafty is looking to score $100 million for its IPO but that number could go much much higher. Brooklyn-based, Etsy, which would trade on Nasdaq under the ticker symbol ETSY (catchy, no?) was founded in 2005 and by 2014 it pulled in $195 million in revenue, a 56% increase over the previous year. Half of that revenue, though, comes from transaction fees. Plenty of that revenue also comes from the services it sells to its sellers, which are basically, payment processing, shipping labels and promoted listings. Impressive numbers definitely, but the company is spooking investors since it also took in a $15 million net loss last year and expects its operating expenses to “increase substantially.” Yikes. So yeah, that little tidbit puts a damper on things. Etsy currently has about 1.4 million sellers with close to 20 million buyers.

Are you even surprised?

Image courtesy of photoraidz/FreeDigitalPhotos.net

Image courtesy of photoraidz/FreeDigitalPhotos.net

Costco came out with its quarterly earnings, easily topping analysts’ predictions and if that is at all shocking to you then clearly you have never stepped foot inside one of its 671 warehouses dotting the world. News of the good earnings sent shares rising today 2.5% and why shouldn’t it? The stock went up 30% during 2014 and is already up 10% this year. And while the strong dollar has been playing some nasty little fiscal tricks with its earnings, the third largest retailer still managed to nail $598 million in profit at $1.35 a share on $27.5 billion in revenue. Analysts were only expecting $1.18 on $27.65 billion in revenue. It should be duly noted that some of that profit came courtesy of a $57 million tax benefit over a special dividend from last month. But it should also be duly noted that same store sales were up 2% and sales up 8%. These earnings come on the heels of Coscto’s AmEx breakup and its new contracts with Citigroup and Visa. Now it even has plans to sell a Kirkland Signature Chevrolet truck – a particularly handy vehicle for your average Costco run.

LinkedOut…

Image courtesy of  winnond/FreeDigitalPhotos.net

Image courtesy of winnond/FreeDigitalPhotos.net

For some not-so-pleasant news on the labor market we look no further than the Labor Department who just shared with us that the number of people seeking jobless claims for the first time rose to a seasonally adjusted 320,000 for the week ending February 28, adding an unwitting 7,000 applicants. That leaves us with close to 2.5 million people getting jobless benefits and that’s the highest number it’s been since May. Analysts actually expected that number to fall to under 300,000. Some people might even be wondering, “Hmmm. What seems to be going on with this fickle little job market of ours?” Excellent question. Naturally weather always makes a good scapegoat for this sort of thing. But otherwise, the Labor Department couldn’t really pinpoint any one reason why that offensive number reared its ugly unwanted head once again. Last week, that number also rose instead of going back down to a cozy semi-acceptable spot below the 300,000 mark. Experts were hoping that it was just a little labor market hiccup that would correct itself by this week. It didn’t.

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Morgan Stanley Finally Owns Up to All the Trouble It Caused; It’s a Darn Claim Unemployment Filings Are Up; Sears is Losing It

It was just a matter of time…

Image courtesy of  dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

Morgan Stanley is taking a bit of a beating today on Wall Street now that it has finally finally settled with the Department of Justice over its shady little role leading up to the 2008 financial crisis. Morgan Stanley reached a deal with the DOJ  that’ll have the bank paying $2.6 billion to get Uncle Sam off its back.  Attorney General Eric Holder and the DOJ will graciously end their probe into whether Morgan Stanley duped investors by telling them how very great their home loans were when in fact, they were anything but. This settlement is sure to put a major dent in MorganStanley’s 2014 profits. By major, I mean it’ll eat up nearly 50% of what MorganStanley got to take home in 2014. It officially lands Morgan Stanley on that illustrious list of banks who also had to shell out billion dollar settlements to the DOJ for their smarmy actions leading up to and during the 2008 financial crisis, including  – but not limited to –  Bank of America who reigns the top spot with a $16.7 billion payout. It’s followed by JPMorgan Chase which holds the number two spot for its $13 billion settlement. Citigroup rounds out the group with a $7 billion settlement.

Don’t stake this claim… 

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

The number of people filing jobless claims went up. Not down. But up. The number climbed to 313,000 people instead of a projected 290,000. While the news is a bit of drag, economists  – who presumably know a thing or two  – are telling us that we can’t work ourselves up into a collective panic over one month’s lousy numbers. At least for now, anyway. First, the number of people filing those claims is still relatively close to the 300,000 mark. If it were way past that number, then yeah, having a fiscal freak out might be considered almost acceptable. Two, the labor market’s rockin’, sort of, and hiring is strong, which brings us to reason number three. Because hiring is strong, wages are actually going up. Walmart, TJ Maxx, Gap…the list goes on as to how many retailers are raising its employees’ wages. All these factors allow us to almost ignore this fiscal hiccup. However, leave it to Fed Chairwoman Janet Yellen to remind us that, “wage growth remains sluggish” and that there’s always room for improvement.  You don’t say.

Loser…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Sears isn’t having a very good year. Actually it hasn’t had a good year in…well, many many years. It just reported its fourth straight year of losses with this quarter losing $159 million and $1.50 per share. Incidentally, that figure is not nearly as dismal as last year’s $358 million fourth quarter loss. So you see, there is a bright side. Sort of. Run by the The Hoffman Estates, which also runs Kmart, the company has tried just about everything to help the ailing retailer reverse its downward financial spiral. From store closures to slashing inventory, the retailer has tried countless ways to cut costs. The company closed over 230 stores in 2014 and today has over 1,700 stores, which sounds impressive. But you know what’s more impressive? The over 3,500 stores the company had five years ago. The latest plan is to spin off between 200-300 stores into a REIT, which stands for Real Estate investment trust, by the way. The idea is apparently going to allow the failing company to pick up some $2 billion and help turn the fiscal tide. But if you want to know how exactly that works you’re on your own.

Twitter’s Getting Its Game On, We Hope; Amazon Buries the Hatchet with Hachette; Job Quitters Are Getting the Feds Excited

About that “strategy statement”…

Image courtesy of africa/FreeDigitalPhotos.net

Image courtesy of africa/FreeDigitalPhotos.net

Twitter did its very best to impress investors by telling them all the new strategies it plans to implement to help the social media company rake in $11 billion in the next 5-8 years. I guess it worked as the stock went up by 7.5%. Twitter’s got all sorts of exciting plans mapped out. Among them are an instant timeline where you don’t even have to share to be a follower. How reassuring. Also really smart people are developing algorithms to figure what users would want to know. Then Twitter wants you to be able to “record, edit and share video.” A dream come true for so many. And because the social media site would hate for you to feel like you’ve missed out on anything, like for instance, today’s photos of Kim Kardashian – or rather, her backside –  then fear not, oh faithful tweeter, as there will be a “what you missed” function. How very useful. Now if Twitter could just figure out how to word a “strategy statement” that doesn’t exponentially exceed 144 characters.

Is that the library calling?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Because compromise is the hallmark of strong relationships, Amazon and Hachette publishers have finally done just that, ending a months-long fight over e-book pricing control. Hachette will now have control to price its e-books however it pleases, but apparently Amazon is going to provide the  publisher with enough incentives to keep those prices low. Which must be a relief for a bunch of its esteemed (and not-as-esteemed) authors, like Robert Galbraith a.k.a. J.K. Rowling, whose ebook, The Silkworm, was going for a whopping $14.99 on Amazon. The average price of a best-selling ebook hovers around $7.60. Sometimes they reach a $9.99 price point. That’s what I call “statement pricing.” Anyways, several authors took major fiscal hits from the feud. The whole “dispute” also got many people wondering if maybe Amazon has just a wee bit too much power over publishers. Hmmm.

I’ll quit to that…

Image courtesy of jumpe/FreeDigitalPhotos.net

Image courtesy of jumpe/FreeDigitalPhotos.net

Americans are quitting their jobs at the fastest rate in six years and that is, in fact, awesome news. About 2.8 million Americans walked out on their jobs, which apparently means that they are confident that they will (or already have) new jobs lined up in time to make their mortgage payment. So I guess it helps that hiring rates are also up. However, jobless claims also rose by 12,000, to 290,00, a bigger than expected climb, but still under the the 300,000 mark, which is really nothing to worry about – except, of course, for those who need to pay their mortgage. Jobless claims, though, are at a 14 year low and Fed Chairwoman Janet Yellen is loving (okay, not her exact words) the jobless claims number and “quit rate”  since they point to a recovering labor market. Besides, did you know that high quit rates are good for wages? It’s true, I tell you.