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Is there still value in the darling stocks of yesterday such as IBM?

Can older companies/sectors compete with new technology?

Over the years we have seen stalwarts such as IBM and Walmart replaced by the likes of Apple and Amazon as indicators of US economic activity. These giants have become the bellwethers of the US stock market leaving the likes of IBM and Walmart in their wake. Interestingly, having fallen back from around $180 last year to a low of $140 in September 2017, IBM shares then rallied to touch just over $160 in October. So, is there still value in the darling stocks of yesteryear?

IBM share price

Recent figures from IBM surprised market analysts on the upside for the first time in “many moons”. The shares initially rallied to $160 but have since fallen back to $152. The problem for stocks such as IBM, and other darlings of yesterday, is the fact that there are so many “stale bulls” still holding stock from the good old days. As we saw the IBM share price, any short-term rally is seen as an opportunity to bail out and use funds better elsewhere. So, until these “stale bulls” have fallen by the wayside perhaps we can expect selling into any kind of strength. Continue reading “Is there still value in the darling stocks of yesterday such as IBM?”

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Facebook on the back foot despite profit growth

Technology shares are a hedge for the future

On a day when Facebook announced third-quarter profits up 79% at a whopping $4.7 billion on the back of a 49% increase in turnover up to $10.1 billion why was Mark Zuckerberg so downbeat? Surely this was the time to push home growing profits momentum and expansion plans which seem to be progressing perfectly? However, testifying to legislators in Washington, Facebook was on the back foot, under pressure over the rise in fake news and alleged Russian interference in the US presidential elections.

The facts

Even though Facebook CEO Mark Zuckerberg was able to separate the facts from the fiction, confirming that so-called Russian agents spent just $46,000 advertising on Facebook, compared to a combined expenditure of $81 million by the Trump and Clinton campaigns, this is not the whole story. It turns out that the Russian adverts reached a staggering 126 million Facebook users and may or may not have influenced the outcome of the US presidential elections. There is also the issue of terrorism, and several types of abuse which still appear on Facebook, even though the company spent millions of dollars in additional security measures. Continue reading “Facebook on the back foot despite profit growth”

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Will new issues take a breather in light of economic volatility?

Would you trust Donald Trump with your investments?

Over the last few days we have seen a number of high profile companies pulling their listings on the London stock exchange. While the situation in the UK is slightly different to that in the US, with Brexit and this week’s interest rate rise, there is a perception that maybe markets have peaked in the short term. So, will new issues in the US take a breather as they are in the UK?

US forecasts still strong

While we know US interest rates will continue to tick higher in the short to medium term this already seems to be factored into the stock market. Economic growth is picking up, the employment market is relatively strong and despite Donald Trump’s attempts to meddle with business, aside from the odd mess such as Bombardier, things could be a lot worse. We have not seen an awful lot of high profile new issues in the US over the last few weeks with Snapchat perhaps the biggest this year. Continue reading “Will new issues take a breather in light of economic volatility?”

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Can Apple prosper without Qualcomm chips?

Are Apple and Tesla a match made in heaven?

It is common knowledge that Apple and Qualcomm are in the middle of a legal dispute regarding patent fees on Qualcomm’s groundbreaking chip technology. We also know that Apple has depended upon its partner for many years and the company is seen as the front runner of the industry. However, the news coming out of America suggests that Apple is looking to manufacture iPhones and iPads in 2018 which would cut out Qualcomm chips to be replaced by Intel and possibly MediaTek devices.

Idle threat or game changer?

Those who follow the industry will be well aware that the two companies have been working together for well over a decade. It would appear Apple is now concerned about critical software required to test Qualcomm chips currently going into iPhones and iPads prototypes for next year. The accusation is that Qualcomm is withholding this vital software although the company refutes this suggestion. It also confirmed that chips intended for future iPhones and iPads have already been rigourously tested by the company. Continue reading “Can Apple prosper without Qualcomm chips?”

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Does the president really play a role in the US economy?

Is artificial intelligence the way forward?

If you were unaware that the US economy was improving, stock markets were hitting all-time highs and investors were looking forward with confidence, you might expect otherwise with Donald Trump’s ongoing problems. Some of the president’s closest allies have been indicted on various charges and it looks as though the net is closing in on President Donald Trump. So, does the president really play a role in the US economy?

Laying the foundations

In many ways Donald Trump’s election victory could not have been better timed with signs that the economy was already recovering and growing confidence in investment markets, much of which can be traced back to the final months of President Obama’s time in office. We are certainly over the worst of the 2008 financial crisis, investment and employment markets are slowly returning to traditional levels, but it is the strength of stock markets which is surprising many. Continue reading “Does the president really play a role in the US economy?”

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Growing voter discontent with President Donald Trump

Should you strip emotion out of your investment decisions?

Donald Trump has always been a controversial figure but he has polarised communities to such a level that historically he has always been fairly well supported by one side or another. A survey by NBC News-Wall Street Journal has given an almost identical result to a recent Fox News Poll which does not make good reading for the president.

Current rating amongst voters

According to the NBC News-Wall Street Journal poll, Donald Trump’s job approval rating has hit a presidential low of 38% having fallen 5% since September. This is a new low from his earlier rating of 39% although what is perhaps more alarming is the fact that 58% of those polled disapprove of his presidency. In the normal course of action Donald Trump would simply discount this poll but it is almost identical to a recent Fox News poll which would suggest it is reflective of the current electorate opinion. Continue reading “Growing voter discontent with President Donald Trump”

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Money talks in the world of stock markets and finance

A Guide to Lending Opportunities

Over the years we have seen many good companies disappear, expert management teams fall by the wayside and investors turn against individual stocks and sectors. While private investors do tend to deal a little more on emotion than institutional and professional investors, money talks in the world of finance and stock market investment. What do we mean by this?

Hitting targets and delivering returns

When a company is loss-making it can be very difficult to give a “fair valuation” but as soon as a loss-making company turns profitable, the traditional value indicators kick in. Price-earnings ratios, margins and growth in revenues will all play a major role and if companies regularly miss targets then investors will eventually give up. There may be times where these companies are taken over by others who can “make a better job of it” but once a company has a reputation of failing to deliver it can be difficult to shake off. Continue reading “Money talks in the world of stock markets and finance”

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Is space travel set to be the next big market?

Time to let the experts speak Donald

Space travel has been one of the more romantic business sectors for many years with talk of manned missions to Mars, populating various planets and even using the moon as a stop off point. In many ways this has been seen as a billionaire’s folly with the likes of Elon Musk, Richard Branson and Jeff Bezos privately funding their space operations. However, the last few days have seen a significant development for Richard Branson’s Virgin Group which could revolutionise the industry!

Kingdom of Saudi Arabia to invest $1 billion

The Kingdom of Saudi Arabia investment fund has reached an agreement with Richard Branson to invest a staggering $1 billion into his Virgin Group space companies. The three companies in question are Virgin Galactic, The Spaceship Company and Virgin Orbit which take ig everything from space tourism to satellite launch systems. It is unclear at this moment in time what kind of stake the Saudi Arabian authorities will receive but there is an option for a further investment of $480 million. For that kind of money they will want to play a major role going forward! Continue reading “Is space travel set to be the next big market?”

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Apple to miss iPhone X shipment numbers

Apple banking on transformational 5G

Over the years Apple has a reputation for never putting a foot wrong but the launch of the iPhone X, available from 3 November, seems to have stretched this reputation to the limit. Initially Apple had hoped to have 40 million iPhone Xs available in 2017 but this figure is likely to hit just 20 million. There is obvious disappointment amongst analysts and shareholders but does this really change the reputation of Apple?

IPhone X

At $999 the iPhone X is one of the most expensive smart phones on the market today but initial feedback has been extremely positive. It appears that there were issues with the face scanner sensor components which have impacted initial stock available through 2017. However, on the upside the company has confirmed it now has capabilities to produce 10 million iPhone X units per month after a number of tweaks and adjustments through the month of September. Continue reading “Apple to miss iPhone X shipment numbers”

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US jobs market expected to grow over the next decade

Are markets concerned about the US/Chinese trade war?

It will come as no surprise to learn that the last decade has been extremely challenging when it comes to employment statistics. Last year saw the slowest growth in job opportunities in the US since 2010 but things are set to change. A report by the Bureau of Labor Statistics estimates that an additional 11.5 million jobs will be created over the next decade with healthcare set to be the main driver.

Current job statistics

At this moment in time headline unemployment in the US has fallen to 4.2% which is the lowest figure since February 2001. As of September there were 154.3 million Americans in employment although annual growth of 1.3 million (non-farm payrolls) represents a 26% fall for the corresponding period in 2016. The general consensus seems to be that America is fast approaching full employment or at least employment for those willing to work. As a side note it is difficult to see where any major increase in government tax income could come from if the country is approaching full employment? Continue reading “US jobs market expected to grow over the next decade”