#$yhoo

[happilyfadingfury-blog]

test

[johnmauldin]

The Trump Trade War Already Started

GUEST POST BY PATRICK WATSON

After the initial shock-and-awe reaction to the surprise Trump victory, the markets rejoiced last week… a lot.

“The Dow closed at an all-time high on Thursday, while the S&P and the Nasdaq were flirting with their record highs entering Friday,” reported CNBC.

Others were less thrilled with the election result. Some experts claimed Trump’s plans to raise tariffs on China, withdraw from NAFTA, and otherwise stop globalization in its tracks would surely set off a trade war and hurt the markets.

I disagree.

I think Trump can’t start a trade war because we are already in one. It’s been going on for years, right under our noses… and it’s happening in cyberspace.

US data collection hurt tech giants

Thanks to Edward Snowden, we learned in 2013 that US intelligence agencies were gathering massive amounts of data from both Americans and foreigners.

To make sure no terrorist was left behind, then-NSA Director Gen. Keith Alexander employed a simple strategy: “Collect it all.”

Like it or not, Microsoft (MSFT), Google (GOOGL), and Yahoo (YHOO) must comply with the US government’s orders, which means giving them your data equals letting Washington read your e-mail.

That didn’t go over well with foreign governments and customers of the “Big Three.” We don’t know if the NSA’s data intrusion stopped any terrorists—but we do know that it’s taught the rest of the world not to trust US technology firms.

The result: Today, we see “data localization” laws requiring businesses to keep customer data inside a country’s borders. These are simply trade tariffs in disguise because they impose costs on moving data across national borders.

That’s a real problem when you want to store data centrally so it’s accessible anywhere, anytime… which is the whole point of cloud technology.

The European Union, for instance, is “harmonizing” the way businesses store personal data with a new General Data Protection Regulation. To comply, the tech industry must rebuild its infrastructure, which makes cross-border data transfer more expensive—much like a tariff would.

Earlier this year, Internet Association president Michael Beckerman told a congressional panel, “Forced localization is nothing more than protectionism, really. It hurts trade and investment.  The way the Internet works is a free flow of information across borders, not requiring companies to build data centers.”

I guess the last sentence is wishful thinking at this point, because that’s probably not what the future of data transfer looks like.

Russia’s data localization laws restrict US business

Another piece of evidence that data localization laws can have teeth: Last week, a Russian court ruled that business social network LinkedIn (LNKD) could be banned because it stored Russian citizens’ data outside the country.

Experts see this as a warning to other social networks like Facebook (FB) and Twitter (TWTR), which also operate in Russia.

LinkedIn is being acquired by Microsoft, which has other issues with Russia. The country’s Federal Anti-Monopoly Service says Microsoft isn’t giving Russian anti-virus companies like Kaspersky fair notice about security changes in the Windows operating system.

Is Moscow protecting its people from harm, protecting Russian companies from competition, or is this something else?

I don’t know, but it doesn’t really matter. The whole point of a social network is to network. It’s much less useful if you can’t reach people in other countries.

That makes the company itself less valuable—another hidden trade tariff.

Hardware companies also got hit

The equipment that moves and processes US data is hitting border checks, too.

In 2014, journalist Glenn Greenwald set off Silicon Valley alarm bells with some photos from Snowden’s NSA data trove. Taken from a 2010 NSA internal newsletter, the images showed NSA workers intercepting product shipments of networking giant Cisco (CSCO). They opened the boxes, implanted spyware, and then sent them on to customers. No one ever knew a thing.

Cisco executives freaked out. CEO John Chambers fired off a letter to President Obama, saying:

We simply cannot operate this way; our customers trust us to be able to deliver to their doorsteps products that meet the highest standards of integrity and security… We understand the real and significant threats that exist in this world, but we must also respect the industry’s relationship of trust with our customers.

It was a nice try, but too late. Instead of respecting Cisco’s hard-won customer loyalty, the US government exploited it without even asking permission—and sure enough, Cisco’s sales to emerging-market countries plunged that quarter.

It got worse, too.

A few months later, Chinese authorities ordered government agencies, banks, and state-owned enterprises to begin purging foreign computer gear and replace it with Chinese-made alternatives.

More recently, China has been demanding foreign companies accept “security reviews” that critics say are just attempts to swipe US technology for Chinese firms.

Washington has its own national security review process for foreign companies that want to buy US assets. It has blocked transactions with Chinese tech companies like Huawei, which of course cried foul.

What is all this if not a secret trade war?

Technology buyers increasingly react to these hassles and fears by preferring locally made equipment, even when their governments don’t force them to. That’s bad news if you are a tech company with global aspirations.

Trump wants to weaken encryption

While President Trump probably can’t solve these problems, he could potentially make them worse.

For example, he’s been talking about forcing Apple (AAPL) to start making its iPhones in US factories. He also said the government should make Apple decrypt a phone belonging to the dead San Bernardino terrorists.

Trump ally Sen. Richard Burr (R-NC), who just won reelection, tried last year to pass a bill that would have forced US tech companies to give the government “backdoor” access to encrypted memory. It will likely pass if he tries again this year.

The tech industry fiercely opposes weakening encryption, arguing it makes everyone’s data vulnerable to hackers and give foreign buyers another reason to avoid US products.

American tech companies dominate the world because their products work anywhere and anyone can use them. The developing cyber trade war gives a leg up to foreign competitors.

If you own any tech stocks whose growth plans include customers outside the US, you might want to review their valuation.

Don't assume borders will always be as open to trade as they are now. The gates are closing fast.

Subscribe to Connecting the Dots—and Get a Glimpse of the Future

We live in an era of rapid change… and only those who see and understand the shifting market, economic, and political trends can make wise investment decisions. Macroeconomic forecaster Patrick Watson spots the trends and spells what they mean every week in the free e-letter, Connecting the Dots. Subscribe now for his seasoned insight into the surprising forces driving global markets.

[thedealnewsroom]

Why activist hedge funds almost never nominate women

Insurgent funds are run by men and their track record picking female dissident director candidates is abysmally low -- but some activists say fund managers just aren't looking hard enough.

By Ronald Orol

Debra Janssen, the chief operating officer at Bankers Trust, received a phone call earlier this year from a former colleague asking if she wanted to be considered for a slate of dissident director candidates nominated by an activist investor for embattled tech giant Yahoo! Inc.'s (YHOO) board.

Janssen said she jumped at the opportunity, which she said was brought to her through "the power of networking." The prospect of participating on an activist slate can scare off some director candidates, worried that putting themselves up for election in what typically becomes a heated director battle complete with mudslinging on both sides stigmatizes them for life. But not Janssen.

"They wanted a C-Suite level women with tech expertise," Janssen said. "It didn't bother me at all. When people heard that I was on this slate they were supportive, saying 'what a great experience.'"

The contest was ultimately settled and four of activist investor Starboard Value's Jeff Smith's nominees were installed on Yahoo!'s board in a deal that helped ensure the tech giant's auction process concluded in a sale - Verizon Communications agreed to buy Yahoo! in July for $4.8 billion.

However, neither Janssen nor another Starboard female candidate were included in the final slate. "I spoke to Jeff multiple times and when the agreement came down about how many of his slate were going to be on the board, he called personally to tell me," Janssen said. "I'm optimistic I will hear from Starboard again."

The experience was positive for Janssen. Yet her experience is unusual and pretty rare, when considering that only a small - almost minuscule -- number of women have ever been nominated by activist investors in director-election battles. According to a study completed by relationship mapping service BoardEx, a service of TheDeal, the ten top activist investors nominated 408 individuals over the past six years and only 20 of those were women, including Janssen.

Starboard led the pack in terms of women candidates, nominating ten female board members, including four at Darden Restaurants that became board members and two, including Janssen, at Yahoo! that did not. Nevertheless, while that does sound impressive, Starboard also nominated 126 men candidates over the five-year timeframe, according to BoardEx.

The other biggest activist funds engaging in the most director contests all have included a smattering of female candidates among their male director nominees. These include Carl Icahn, Pershing Square Capital Management LP's Bill Ackman, Barington Capital's Jim Mitarotonda, Corvex Management LP's Keith Meister, Elliott Management's Paul Singer and Engaged Capital's Glenn Welling.

So why the dearth of woman director candidates? Anne Sheehan, governance chief of the California State Teachers' Retirement System, or CalSTRS, has been a lead advocate for the installation of women on corporate boards. Sheehan and CalSTRS also invest with a number of activist funds, including Starboard and Legion Partners Asset Management LLC.

She argues that activists will typically look for director candidates who have served on boards in the past when they look for possible nominees. An overall lack of women on corporate boards, she argues, has made it harder for insurgent investors to find appropriate women candidates with the director experience necessary to be adequate candidates for boards.

"That is not to say that activists shouldn't work on getting more diversity on their slates but if you did that measurement ten years ago there would have been even fewer women on activist slates," Sheehan said.

One attorney who advises activists said he believes that fund managers have increased their efforts to put highly skilled women on corporate boards in recent years. However, he added that a lot of women haven't served on boards and their experience isn't as deep as many of their male rivals. He also suggested that if there were more women directors overall there would be a greater number of female activist-nominated board members.

Activists say they try hard to find women candidates they think they can elect, in part, because they believe the influential proxy advisory firms, Institutional Shareholder Services and Glass Lewis, are more likely to recommend that investors back their candidates if one or more of them is a women. ISS, for its part, supports shareholder proposals seeking to pressure companies into setting up board diversity policies to consider women candidates.

Nevertheless, activists have had some success bringing on women director candidates. Engaged's Welling, for example, nominated Diane Neal who was installed on the board of Abercrombie & Fitch Co. (ANF), along with two other mutually agreed upon women candidates, Bonnie Brooks and Sarah Gallagher. In addition, an Engaged candidate at Benchmark Electronics Inc. (BHE), Lisa Kelly, withdrew under pressure from the electronics manufacturer, and at Medifast Inc. (MED), a nutrition and weight loss company, the fund reached a deal to install Constance Hallquist to the company's board.

Cheryl Krongard was picked to serve as a director of Federal-Mogul Holdings Corporation following the closing of Icahn-owned American Entertainment Properties Corp. acquisition of the company. In addition, Lady Barbara Judge, an ex-SEC commissioner, was installed on the board of Voltari Corp. after being recommended by Icahn at a time when the activist fund owned about a 20% stake.

Corporations reaching an agreement with ValueAct Capital Management LP, typically bring on male candidates recommended by the fund. This is largely because the activist firm seeks to install their own managers and partners, the experts on the company in question, for the positions. With men making up the majority of the ValueAct team, its managers and investment partners have gotten seats at thirteen companies over the past six years. Nevertheless, ValueAct has also succeeded at helping bring women on boards in a number of circumstances and, according to a person familiar with the situation, the firm considers it a priority to increase the number of women directors on corporate boards.

Last year, MSCI Inc. (MSCI) added three new directors as part of a settlement with ValueAct, including one woman recommended by the fund, Wendy Lane (pictured below). ValueAct's Jeff Ubben got to know Lane because the two serve together on the Willis Tower Watson PLC board, the person added. In addition, in recent years, the activist fund has provided women director recommendations from their own network of candidates to the nomination committees of three corporations at their request.

Legion Partners, which was formed in 2012, has only launched two contests in its short history, according to FactSet. Yet Ted White, a managing partner at the fund, estimates that women represent about half of the individuals it has nominated or recommended for corporate boards over its history. White said he believes that there is some level of laziness behind the lack of female candidates on activist fund director slates. "I have not found it hard to find really good women with board and executive experience that fit what we are looking for with our candidates," White said.

Case in point: Legion's campaign at Boingo Wireless Inc. (WIFI) contributed to the installation of a women candidate on the company's board as part of a settlement with the fund and another activist, Ides Capital Management LLC. In addition, following a recommendation from Legion and another activist, Ancora Advisors, ShoreTel increased its board size by one and appointed a woman, Majorie Bowen, to its board. And White said Legion in the process of nominating another women candidate in a situation that is still under wraps.

Nevertheless, activists for the most part still aren't nominating many women candidates, especially when considering that females represent roughly half of the population. One reason why there may be so few women activist fund-backed director candidates could be because insurgent fund managers are mostly male-- and they often like to pick themselves as director candidates rather than find outside nominees.

The number of activist hedge funds run by women can be counted on one hand and includes, Ides Capital Management's Dianne McKeever and a Parisian duo, Anne-Sophie D'Andlau and partner, Catherine Berjal, of Charity Investment Asset Management.

Most agree that finding qualified women candidates is more difficult than identifying male board nominees. Mary Beth Vitale, co-chair of the Colorado Women Corporate Directors chapter, an organization that educates women on board issues, was one of Legion's board candidates at a small-capitalization technology company. Vitale (pictured below), a cybersecurity expert, argues that the energy and technology sectors have a particularly low number of women directors, in part because tech boards tend to be small, providing fewer opportunities, while oil and gas corporations don't have a large number of women in the industry overall. Those circumstances, she says, makes it more difficult for activists to find qualified female candidates.

"There aren't many tech specialist women but the number is increasing," Vitale said. "Ted needed to have someone that was a woman and experience in technology and did his own research and my name came up."

Nevertheless, governance experts agree that there are a number of additional tactics both activists and corporations can employ to find qualified female directors.

Activists could use LinkedIn and work on their own to find candidates, a time consumer but cost-effective approach. Alternatively, they could reach out to the National Association of Corporate Directors and women-focused organizations such as WCD to find potential nominees from their databases. An activist could also hire a headhunter, such as Heidrick & Struggles, Spencer Stuart, Russell Reynolds Associates or Korn Ferry, to advise them, with a specific focus on looking for a diverse pool of women.

However, Vitale argues that even when companies ask headhunter firms to look for diversity, women are often set aside. "A lot of companies go to a search firm and say, 'give me a slate of candidates including diverse candidates with both ethnic and gender diversity,'" Vitale said. "Then the board narrows it down to a group of two to three to be interviewed and invariably the women are not included."

The NACD has a board recruitment services team that helps identify and place director candidates based on the organization's member profile database and other sources. "Last year 80% of our searches placed women and minority candidates," said NACD Managing Director and General Counsel Steven Walker."

Jon Lukomnik, executive director at the Investor Responsibility Research Center Institute in New York, contends that activists should look beyond the pool of women who are CEOs, ex-CEOs or current directors when looking for qualified women candidates.

"It is lazy sourcing," said Lukomnik. "There are a ton of investors, division heads and entrepreneurs you can choose from. The idea that you have to have been a CEO, when CEOs are mostly male, to be a director doesn't make any sense."

Activists often have private or public advisory panels stacked with potential director candidates on call for potential campaigns. Lukomnik said activists could work harder to recruit women to be on these panels. "Most activists are male and they recruit people they know in CEO or ex-CEO positions and they are often male," Lukomnik said. "It takes some additional effort to find a qualified women candidate - you have to want to do it."

However, some believe headhunters aren't necessary, when it comes to finding women candidates. Legion's White said he hasn't paid any headhunter firms or other outside companies to help find female candidates. "We've done these searches on our own," he said.

NCD's Vitale said she believes women, if approached, would be eager to participate on a dissident slate. "Whether you are a man or women it is a tough position to be initially," she said. "But once you are on there it is not as if the activist is telling you what to do. At the beginning other directors may be skeptical but as long as you are a good solid director the others will see that you are doing your job."

The bottom line is that activists will continue to find it hard to find qualified women candidates with both executive and board experience in the months and years to come -- especially when they feel compelled to choose from the male-dominated existing pool of directors, CEOS and ex-CEOs.

And thinking outside the box when it comes to female director candidates is easier said than done. Vitale said that she can understand why activists may not want to choose a women candidate who has never served on a public company board before.

"Someone who has never been on a board may have more difficulty being on an activist slate," she said. "Now you are trying to learn how to be a board member at the same time that you are dealing with difficult activist-focused board dynamic issues."

For now, expect women to continue to be in the minority when it comes to dissident director elections.

[estimize]

4 Stocks to Watch Before the Market Opens Tomorrow

Verizon Communications (VZ): Verizon is no longer just a communications company as its namesake would suggest. The company has been diversifying its portfolio to include fiber optic television, broad based media and even a developer of new technologies, particularly 5G networks. The telecom giant made a few headlines during the quarter including the $4.8 billion acquisition of Yahoo and the prolonged labor strike that took place over the summer. There have been some pitfalls to both stories that Verizon is working through. The labor strike and subsequent deal could have a bearing on earnings this quarter while Yahoo’s massive data breach might threaten the deal all together. These news driven events won’t have a long term material impact like some of its recent partnerships and the development of 5G technology. Recent partnerships with Disney and Qualcomm will help build out its Fios and IoT brands, respectively. If Verizon can launch mainstream 5G networks before AT&T or T-Mobile then there is no limit to near term growth.

Walgreens Boots Alliance (WBA): Walgreens has had its troubles in recent quarters, despite being one of the largest pharmacy chain in the country. Revenue has consistently fallen below expectations while also accelerating on a year over year basis. Walgreens is still in the process of seeking regulatory approval for its Rite Aid takeover in late 2015. The merger would form the largest drug chain in the country and has led regulators to rethink the merits of the deal. Meanwhile, Walgreens is implementing new technologies and forming partnerships to strengthen its market position. A deal with Prime Therapeutics will help expand its retail pharmacy business thereby boosting top line growth.

American Airlines Group (AAL): Disappointing earnings from Delta and United earlier this season sets an unfavorable tone for American Airlines. Both airlines recorded mid single digit declines in unit revenue which reflects weaker travel trends. American Airlines is fortunately in a better position than its peers. Its efforts to return to profitability and growth have begun to pay off. The airline recently raised its key PRASM guidance to a 2-3% decline, a much bigger improvement from the 6.1% decline last quarter. This is largely due to its presence in regions with favorable consumer trends. That said, discount retailers like Southwest and Spirit Airlines will put a dent on revenue this quarter. As ticket prices continue to come down in the industry we will also seen margins begin to edge down.

Dunkin’ Brands (DNKN): Dunkin Donuts has performed well recently despite Starbucks dominant position in the coffee market. New initiatives such as more drive through locations, menu innovation, comprehensive mobile app and a loyalty program have help engage and attract customers. Furthermore, licensing deals with Keurig and J.M. Smucker to sell Dunkin’ branded K cups will continue to boost top line growth. The company may have missed its revenue target in the second quarter but analysts are confident that a rebound is in store tomorrow. Shares are up 18% year to date but historically remain flat through the print.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

[estimize]

4 Stocks to Watch After the Market Closes Today

Intel (INTC): Intel, like many of its peers, has shifted its focus away from its waning legacy business toward high growth markets such as AI, IoT Data Centers and Security. Last quarter the company saw these segments jump on a year over year basis with expectations to do the same on Tuesday. Client Computing was one of the lone sore spots in the second quarter report, declining 3% on a sequential and year over basis. While it's safe to remain cautious about the PC market, management expects PC related sales to show some improvement this quarter.

Intel faces a number of imminent threats that could put pressure on earnings for multiple quarters. Google, IBM and seven others have joined hands to take on Intel’s Data Center Group. The consortium includes many large well known companies and some smaller ones. Its impact on Intel remains to be seen but management would be wise to not take it lightly. Meanwhile, Apple is rumored to be replacing Intel chips in all of its Macbooks. This would be a near term blow but not one that would significantly cripple the company.

Currency headwinds and economic uncertainty in Europe are amongst the broader concerns facing the tech space, Intel included. Intel has a large presence worldwide which means they are susceptible to compressed earnings from the strong dollar. It appears as though more factors are working against Intel then for them, despite increasing optimism heading into its report.

Yahoo (YHOO): Yahoo’s earnings woes have been well documented over the years. User engagement and ad revenue have continually declined as consumers shift their focus to more mainstream platforms particularly Facebook and Google. This has resulted in declines across the board most notably in core search and display revenue. Last quarter posted a 13% decline in search revenue and 21% in display compared to the second quarter of 2015. It won’t be shocking if this continues to drop given the massive breach on the platform.

Amid this pressure, Yahoo is working on closing a deal with Verizon for an estimated $4.8 billion. There were rumors that Verizon would seek concessions from the breach but that was later rebuffed by Verizon’s CEO. Yahoo decided to scrap its earnings call this quarter as the deal remains in flux. Regardless of what materializes, Yahoo still remains an old technology business in a rapidly changing environment.

Intuitive Surgical (ISRG): Intuitive Surgical has been fortunate to have found success with its da Vinci surgical systems. In each of the past 3 quarters, the company has posted double digit gains on both the top and bottom line. Q2 in particular saw worldwide da Vinci procedures grow by 16% compared to the second quarter of 2015. This was primarily driven by an increase in general surgery and urologic procedures in the U.S. Shipments of its flagship product also rose to 130 systems compared to 118 in the second quarter of 2015.

Minimally invasive robotic surgeries are still in their early stages, leaving Intuitive Surgical with a lot room to run. The company makes its biggest margins from new accessories such as the Xi Vessel Sealer, Xi Firefly and Xi Stapler. If system wide sales continue to grow at their current pace and Intuitive Surgical can capitalize on global expansion, then sky’s the limit for earnings potential. Health Care equipment in general is expected to do well in Q3, with earnings anticipated to increase 8.5% YoY. With 20 million more Americans insured in the US thanks to the Affordable Care Act, demand for health care services is picking up.

Cree (CREE): Shares of Cree are down 7% year to date after a string of weaker than expected earnings. Cree closed its fiscal 2016 quite a sour note with declines across key financial metrics. Revenue, margins, cash and investments, and accounts receivable decreased on both a sequential and year over year basis. Analysts are forecasting significant declines this upcoming quarters as a result of this ongoing weakness. Compared to a year earlier, current estimates reflect a 47% decline on the bottom line and 24% on the top. Historically shares drop 3% immediately following an earnings report but given the way things have been trending, investors should expect larger losses.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

[estimize]

Is it Time to Buy Yahoo Ahead of its Earnings Report?

Yahoo! Inc. (YHOO) Information Technology - Internet Software & Services | Reports October 18, After Market Closes

Key Takeaways

The Estimize consensus is calling for earnings per share of 14 cents on $858.58 million in revenue, 1 cent lower than Wall Street on the bottom line and $2 million on the top

The $4.8 billion acquisition by Verizon is in limbo after a massive data breach impacted 500 million users was recently disclosed

Yahoo continues to fall into the bucket of old technology, seeing user engagement decline across the board

What are you expecting for YHOO? Get your estimate in here!

Drama continues to follow Yahoo even after the sale of its core assets to Verizon earlier this year. The company is headed into its third quarter report surrounded by a cloud of uncertainty. It was recently revealed that 500 million accounts were stolen in a hack that occurred nearly 2 years ago. While it is not shocking that this information was only recently disclosed to the public, it is somewhat surprising that Verizon wasn’t apprised of what happened. This might not have a material impact on the print but has thrown a serious wrench into the Verizon deal and its reputation.

Analysts at Estimize are calling for earnings per share of 14 cents, down 12% from the same period last year. That estimate has increased 24% since the company’s most recent report in July. Revenue for the period is estimated to drop 14% to $858.58 million, marking a fourth consecutive quarter of double digit declines. The stock has surprisingly remained resilient, largely due to takeover talks starting from last year, with shares up 25% over the past 12 months. Yahoo’s earnings woes have been well documented over the years. User engagement and ad revenue has continually declined as consumers shift their focus to more mainstream platforms particularly Facebook and Google. This has resulted in declines across the board most notably in core search and display revenue. Last quarter posted a 13% decline in search revenue and 21% in display compared to the second quarter of 2015. It won’t be shocking if this continues to drop given the massive breach on the platform.

Amid this pressure, Yahoo is working on closing a deal with Verizon for an estimated $4.8 billion. There were rumors that Verizon would seek concessions from the breach but that was later rebuffed by Verizon’s CEO. Yahoo decided to scrap its earnings call this quarter as the deal remains in flux. Regardless of what materializes, Yahoo still remains an old technology business in a rapidly changing environment. Do you think YHOO can beat estimates? There is still time to get your estimate in here!

Photo Credit: Esther Vargas

[yahoofinancestaff-blog]

Big US banks top estimates but profits fall, Verizon comments on Yahoo breach

Here are some of the stocks the Yahoo Finance team will be tracking for you today:

JPMorgan Chase (JPM) shares were higher in early trading. The nation’s biggest bank by assets handily beat estimates on both its top and bottom lines for the third quarter. Revenue rose 8.4% from a year ago as bond trading revenue surged 48%. JP Morgan also saw strong performance in its consumer lending, commercial banking and asset management businesses.

Wells Fargo (WFC) shares were on the move this morning. Even though the embattled lender delivered earnings and revenue that topped forecasts. Profit fell nearly 4% from a year ago as the bank set aside funds for legal costs related to its sales practices scandal that forced CEO John Stumpf to step down earlier this week. The stock has been hit hard since the sales scandal broke in early September.

Citigroup (C) also posted better than expected third quarter results. However, both earnings and revenue fell from a year ago. A jump in its bond trading and underwriting division was not enough to offset weakness in some of its other businesses.

Yahoo (YHOO), our parent company, is on investors’ watch list. Verizon’s (VZ) attorney said late yesterday that the massive data breach of more than 500 million email accounts could have a “material impact” on the wireless carrier’s decision to buy Yahoo.

[yahoofinancestaff-blog]

Stocks jump on strong bank results, retail sales bounce back

Wall Street looks set to end a rocky week on an up note.  All three major averages are sharply higher after JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all reported better-than-expected third quarter results this morning.

JPMorgan Chase, the nation’s biggest bank by asset,s handily beat estimates on both its top and bottom lines for the third quarter. Revenue rose 8.4% from a year ago as bond trading revenue surged 48%. JPMorgan also saw strong performance in its consumer lending, commercial banking and asset management businesses.

Wells Fargo delivered earnings and revenue that topped forecasts. Profit fell nearly 4% from a year ago as the embattled lender set aside funds for legal costs related to its sales practices scandal that prompted CEO John Stumpf to step down earlier this week. The stock has been hit hard since the scandal broke in early September.

Citigroup (C) also posted better-than-expected third quarter results. However, both earnings and revenue fell from a year ago. A jump in its bond trading and underwriting division was not enough to offset weakness in some of its other businesses.

Retail sales recover

Meanwhile, consumers cranked up their spending last month after a summer lull.  The Commerce Department reported sales at retail stores, online and restaurants rose 0.6% from the prior month to a seasonally adjusted $459.82 billion in September.

The stock market as presidential predictor

The S&P 500 provides a reliable indicator of whether the party in power will stay in control when you look at performance between July 31 and October 31. If the market gains during that time, the incumbent usually stays in power. If it falls, the party in power is usually voted out. What does that mean this year?

Shrinking Obamacare options

Bloomberg says at least 1.4 million people in 32 states will lose the Obamacare plan they have now. Hundreds of thousands of people will lose coverage in North Carolina and Florida. Bloomberg says the main reason is that Aetna, UnitedHealth Group and some smaller insurers are no longer offering individual coverage. What will these people do?