Wall Street braces for feeding frenzy of earnings, central bank action

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The stock market will have plenty to chew over on a deluge of earnings and central bank news.

The stock market will be bombarded with news next week, giving investors plenty to trade on, as earnings kick into high gear and more than a dozen central banks hold monetary policy meetings.

The S&P 500 index SPX, +0.46%  climbed 9.86 points to a fresh record close of 2,175.03. For the week, the large-cap index rose 0.6%. The Dow Jones Industrial Average DJIA, +0.29%  gained 53.62 points to finish at 18,570.85, adding 0.3% for the week. The Nasdaq Composite Index COMP, +0.52%  advanced 26.26 points to close at 5,100.16, finishing the week 1.4% higher.

The S&P 500 closed above 2,135, a level where there had been a lot of resistance previously, suggesting that the market has the breadth to eventually push to 2,400, according to Katie Stockton, chief technical strategist at BTIG.

The market’s upside momentum has been partly fueled by better-than-anticipated earnings.

“With 25% of the companies in the S&P 500 reporting earnings to date for second quarter 2016, 68% have reported earnings above the mean estimate and 57% have reported sales above the mean estimate,” said John Butters, senior earnings analyst at FactSet, in a note.

Among big multinationals on deck to release results next week are McDonald’s Corp. MCD, +0.85% Twitter Inc. TWTR, -0.11% Coca-Cola Co. KO, +0.84%Facebook Inc. FB, +0.32% Ford Motor Co. F, -0.57% Alphabet Inc. GOOGL, +0.65%Amazon.com Inc. AMZN, +0.06% Exxon Mobil Corp. XOM, +0.17% and Chevron Corp. CVX, +0.26%

But none will generate as much buzz as Apple Inc. AAPL, -0.77% Analysts surveyed by FactSet are projecting the tech giant to report fiscal third-quarter earnings of $1.40 a share, down from $1.85 a share in the year-earlier quarter on the back of a double-digit drop in iPhone sales. If Apple’s earnings slide year-over-year as forecast, it will mark the first time since fiscal fourth quarter of 2013 that the company witnesses two quarters in a row of earnings decline.

Read: What to expect when Twitter reports earnings

FactSet

On the policy front, 15 central banks are scheduled to meet, but the Federal Reserve and the Bank of Japan will attract the most attention given that they represent the world’s No. 1 and No. 3 economies.

Read: What to expect in the Fed statement

The Fed is forecast to keep interest rates on hold even as the economy is clearly on the mend amid uncertainties over how the U.K.’s planned exit from the European Union will impact the U.S. Latest data show that the U.K. is poised for another recession with business activity deteriorating in the wake of the Brexit referendum.

Read: Here are some of the companies citing Brexit as a factor this earnings season

With the Fed likely to stand pat, investors will be looking for clues on whether the central bank is likely to make a move in September or December, said Scott Brown, an analyst at Raymond James.

The BOJ, on the other hand, is expected to further ease its policy, which could include a rate cut and additional asset purchases. In fact, expectations for a more potent stimulus package in Japan is so widespread that the BOJ is facing the risk of disappointing the global markets if it fails to act decisively, according to BNP Paribas. Failure to launch may also result in the Japanese yen USDJPY, +0.33%   strengthening against the U.S. dollar, which will worsen Japan’s headache as a strong currency erodes price competitiveness.

Against the backdrop of lingering global uncertainties, Wall Street banks are urging renewed focus on the U.S., which is faring comparatively better than other developed markets.

Goldman Sachs earlier this week recommended investors to bet on S&P 500 companies that derive most of their sales domestically given the resilience of the U.S. economy, a view echoed by Morgan Stanley this week.

“Our stance remains that the U.S. equity market is the best one in the world,” said Adam Parker, chief U.S. equity strategist at Morgan Stanley, in a report. “We think EPS expectations are reasonably achievable for the next two quarters [and] that the base case for the U.S. is positive earnings growth, whereas it is a decline in any other region of the world.”

By Sue Chang

Source: http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23

LeEco CEO Jia Yueting says Apple is outdated

Apple is "outdated" and losing momentum in China, billionaire entrepreneur Jia Yueting told CNBC in his first international television interview.

Jia is chief executive and chairman of Chinese conglomerate LeEco (formerly LeTV), which is best known for being the "Netflix of China," but has a product range that includes smartphones, televisions, mountain bikes and, most recently, electric vehicles.

Last week LeEco launched the self-driving, smart LeSEE supercar, designed to rival Tesla's Model X. In the latest evolution of the "LeEco ecosystem," Jia hopes to sell content, including movies, TV shows and music to LeSEE drivers.

VCG/VCG | Getty Images

Jia Yueting introduces the all-electric battery 'concept' car LeSEE on April 20, 2016 in Beijing, China.

Speaking at a meeting of the China Entrepreneur Club, an exclusive summit of business leaders, 43-year old Jia explained why foreign rivals did not worry him, particularly Apple, which is also expanding its ecosystem beyond consumer technology to driverless cars.

"We think the difference between us and Apple is very large. Apple is a mobile phone company focused on hardware and software," Jia said at the weekend event in Jinan. "LeShi [another name for LeEco] is focused on the internet first, and only then on software, and finally on hardware."

Apple's product design was also obsolete, he added.

"Apple only has individual apps. This was the right choice during the first generation of mobile net, when CPUs [central processing units] and the mobile network speeds were not fast enough," Jia said. "However now we're moving into the next era of mobile internet, these problems no longer exist. Moreover, having separate apps just means great obstacles in the user experience. We hope to break down these obstacles."

China could slam door on Apple—top risk expert explains why

Sales in China, Apple's second-biggest market, have also deteriorated, Jia noted.

"One of the most important reasons [for slowing sales] is that Apple's innovation has become extremely slow," he said. "For example, a month ago Apple launched the iPhone SE. From an industry insider's perspective, this is a product with a very low level of technology...We think this is something they just shouldn't have done."

Apple's SE phone could increase the company's installed customer base for other services over the long term, said Angelo Zino senior industry analyst at S&P Global Market Intelligence. But there's a possibility that the lower-priced iPhone SE could pressure Apple's margins, if its effort to attract customers in emerging markets means fewer sales of high-end products, Abhey Lamba, senior technology analyst at Mizuho Securities, told CNBC's "Power Lunch" Monday.

"When we look at Apple they clearly need the next ... driver," Lamba said. "The Watch hasn't cut it. And they're looking at content on the services side, on the iTunes side. We'll see how that works out. But definitely they need something to drive the next leg of growth." 

Sina CEO Chao: Weibo's not for sale ... right now

As an industry leader, Apple should be developing more cutting-edge products, Jia said. The iPhone was still a leader five years ago after being launched in 2008 but now the concept has "fallen behind," he said. Apple did not immediately respond to CNBC's request for comment.

"We believe the next generation of mobile internet will be more open, more ecosystem oriented instead of being a closed loop...Ironically, Apple's over-dominance, lack of internet-thinking and the closed off nature of its systems, all hindered innovation in the internet mobile industry," Jia said.

The Cupertino giant is expected to report a fall in smartphone sales when it announces first-quarter earnings on Tuesday.

"At this point we think Apple has now turned into this great valuation play, whereas if we do see some momentum on the iPhone 7 side, I think, all of a sudden, you start baking in some sort of growth driver for the company," Zino told "Power Lunch." 

It noted "some signs of economic softness" in the Greater China region, particularly Hong Kong, when announcing fourth-quarter results in late January. But chief executive Tim Cook said the company remained "very bullish on China" given the low penetration of high-speed mobile data usage and the growing middle class.

Apple may shrink for the first time in more than a decade

Jia, who started as a tech support worker before building his own IT and mobile company into a fortune estimated to be around $4.8 billion, is not shy when it comes to taking on industry leaders.

At the LeSee's launch, he told Reuters that while Tesla was a "great company," he was not "just building a car."

"We consider the car a smart mobile device on four wheels, essentially no different to a cellphone or tablet," he said. "We hope to surpass Tesla and lead the industry leapfrogging to a new age."

The LeSEE will be on display at the Beijing Auto Show this week.

By Eunice Yoon | Nyshka Chandran

Source: http://www.cnbc.com/2016/04/24/leeco-ceo-jia-yueting-says-apple-is-outdated.html

The 2 stocks expected to take the Dow above 18,000

A substantial rebound in the market has taken the Dow Jones industrial average up to its highs of the year, and nearly all the way back to a level that hasn't been seen since June: 18,000.

And at this point, all the index needs in order to cross that elusive level is for two stocks to rise to analysts' average price targets.

The Dow is a price-weighted index, meaning it replicates a strategy in which an investor owns just one share of each stock in the group. For this reason, the higher the share price of a given stock, the more importance it has in the index. That's why right now, the Dow's most important stocks are 3M, Goldman Sachs and IBM.

Analysts are none too bullish on 3M or IBM. 3M shares are expected to stay flat, based on analysts' price targets as compiled by FactSet, while IBM is actually overvalued by 11 percent, going by the median analyst price target.

However, Goldman Sachs is seen as a serious candidate for outperformance. 57 percent of the analysts who cover the stock rate it as a "buy," and the median price target on the now-$157 name is $187. If Goldman makes the expected 19 percent rally, then it alone will add more than 200 points to the Dow.

That would take the index up near 17,935. It would still need a bit of help, then, to get to the 18-handle.

And that's where Apple could come in.

The tech giant's share price is above the average for the index, giving it somewhat outsized importance in determining the Dow level. And analysts are markedly bullish on Apple, giving the stock a median price target of $130, according to FactSet.

If the 19 percent rally implied by that target arises, Apple will add another 140 or so points to the Dow level. Hello, Dow 18,075.

While Apple and Goldman Sachs are the stocks that could generate the most gains for the index if analysts' guesses turn out to prescient, sell-side stock prognosticators are actually rather bullish on the whole. If each of the 30 Dow stocks was trading at its median price target instead of its current price, the Dow would be trading above 18,600.

That handily beats the real-life Dow record price of 18,351 seen back in May.

Alex Rosenberg

Source:http://www.cnbc.com/2016/03/31/the-2-stocks-expected-to-take-the-dow-above-18000.html

Beyond Apple: Investing In Wearable Technology

Wearable technology is rapidly on the rise, and in tandem with this increase is a flurry of investments in such projects. Investors have begun to quickly pour funds into wearable technology, with projects ranging from apps for Apple's( AAPL) new i-Watch to various other brands of smartwatches. (For related reading, see article: Get Ready For The Wearable Technology Revolution.)


Tag Heuer, the French luxury watchmaker, recently announced plans to launch its own smartwatch later this year. This venture came about through a partnership with Intel Corporation(INTC), and will be based on Google Inc.'s (GOOG) Android operating system. Designed to bring head-on competition to the Apple i-Watch, Tag Heuer's smartwatch will be offered in a model that will be sold at a base price of $350, but the line of watches will also feature an 18-karat gold luxury model with a price tag of $17,000.

While there have not been many details released to date regarding the actual functionality of the new Tag Heuer smartwatch, the fact that Tag Heuer has teamed up with Intel is notable. Intel has actually formed partnerships with a number of brands, including Fossil and Oakley -- clearly an indication that the company sees a future in wearable technology. 

Tag Heuer is not the only brand to venture into the wearables sector. Acorns, an investment app, has also recently announced closing a $23 million round of funding. Led by e.ventures and Greycroft Partners, this is not the first round of funding closed by Acorns, which had previously announced a $10.5 million round of funding. Currently, Acorns is on a dramatic upward trajectory and has stated that the new funding will be used to finance three projects, one of which is the launch of a wearable app. 

While Jawbone has experienced some setbacks when it comes to the wearables market, the firm has also recently announced the completion of a new round of funding to the tune of $300 million. The majority of that funding was obtained from BlackRock.

Clearly, the wearables technology sector is poised for takeoff. ABI Research indicates that the wearables market could reach annual shipment levels of as many as 485 million devices within the next three years. Most of that growth is attributed to the ease of compatibility of such devices with smartphones. 

WHY THE RAPID RISE IN WEARABLE TECHNOLOGY?

Previously, much of the wearable technology market was segregated into sectors such as healthcare and the military, but due to continuing advances in the various features of such technology, wearables have experienced a tremendous growth surge.

While Google Glass was one of the early leaders in the wearables market, errors made in analyzing that market led to poor performance. One of the most significant errors made by Google was its failure to understand price points and its targeting of the wrong demographics. While Google initially aimed its wearable product at everyday consumers, it has since made the shift toward targeting the business sector. This is largely due to the product's relatively high price, which has proven to be too steep for the consumer market. Reports indicate that mainstream consumers tend to resist paying more than $200 for a smartwatch, even if it features multiple functions. (See article: The Business Of Google.)

As technology has become increasingly miniaturized, wearable devices are now available in a broad spectrum of options ranging from watches to glasses, and wireless connectivity and reduced cost for sensors have made it possible for wearable technology to finally go mainstream.

With consumers becoming increasingly interested in trends such as fitness, healthcare, socialization, and messaging, wearable technology has begun to attract a booming level of interest from consumers. Consequently, more and more retailers and emerging startups are fighting for a stake in this rapidly evolving industry. 

While the wearable technology industry may have gotten off to somewhat of a rocky start with Google Glass, it is no longer possible for investors to ignore this rapidly growing technology sector. Having expanded far beyond the phase where the buzz surrounding this technology was classified as hype, wearables are now the latest must-have. Since the release of Apple's i-Watch, a flurry of other devices either have been released, or are slated for release.