|Bid||1,989.76 x 1400|
|Ask||1,993.59 x 1800|
|Day's Range||1,968.62 - 2,010.00|
|52 Week Range||1,586.57 - 2,185.95|
|Beta (5Y Monthly)||1.62|
|PE Ratio (TTM)||87.10|
|Earnings Date||Apr. 22, 2020 - Apr. 26, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||2,404.29|
Amazon expands its Just Walk Out technology beyond convenience stores, Intuit acquires Credit Karma in its biggest acquisition ever and Grab raises hundreds of millions of dollars. Amazon is opening its first grocery store to pilot the use of the retailer’s cashier-less “Just Walk Out” technology, which previously powered 25 Amazon Go convenience stores in a handful of major U.S. metros.
(Bloomberg) -- One of the most exciting fields in climate science at present is attribution studies: investigating the extent to which climate change can be blamed for raising the odds of specific weather conditions, such as heatwaves and drought.There’s another climate attribution issue out there, though, that’s potentially more important: understanding what causes individuals, businesses and governments to change their policies on climate in favor of the more dramatic emissions reductions the world needs. That’s an important backdrop to Amazon.com Inc. founder Jeff Bezos’s announcement last week that he would give $10 billion to climate researchers and activists.Amazon and Bezos have historically been strong on messaging but weak on execution where climate change mitigation is concerned. Despite announcing a long-term goal to power all of its data centers via 100% renewable energy in 2014, it’s well behind its tech sector peers on this front. To the extent that’s changing, a lot can be put down not to external activists, executive ambition, or even shareholder pressure, but rather to employees.Late in 2018, a group of mostly software engineers started organizing a shareholder resolution on climate issues to bring to Amazon’s annual general meeting in May of the following year. Many had vested equity, which qualified them as shareholders. Two outside advisory firms recommended the measure, giving it an added boost of credibility. In the end, the resolution was voted for by investors owning 30.9% of the company’s shares—a decent result considering Bezos himself owns 11% and company management opposed the resolution, but short of the required 50%.The employees didn’t give up. When Bezos announced new targets for renewable energy use and emissions reductions in September, a day before some were planning to join the global climate strike that drew over 1 million participants around the world, it appeared to be in response to their efforts.They’ve been less successful on some other goals, in particular a push to stop Amazon’s providing cloud services to the oil and gas industries. But the extent to which they’ve pushed one of the world’s most powerful chief executives towards change has been impressive.Could this achievement be repeated in other industries? The tech sector is probably uniquely susceptible to such interventions: Statistical and IT jobs are some of the fastest-growing segments of the U.S. white collar workforce, so employers are especially wary of driving staff away.Investment banking is similarly generous in terms of compensation and also provides a crucial service to carbon-intensive industries: finance. Still, with job cuts in recent quarters numbering in the tens of thousands and a far slower pace of forecast employment growth, employees are likely to feel much less secure. The culture of financial services is also not famous for encouraging employees to speak out, especially in areas where it might interfere with winning business from major clients.That culture is far from impregnable, though. Finance thrives on making persuasive predictions about the future, and the arguments in favor of aggressive action to prevent climate change get stronger by the day. That’s especially the case when major polluting sectors are struggling to make money. With the U.S. coal sector stricken by repeated waves of bankruptcy and the shale oil business persistently failing to cover its costs of capital, the attack on fossil fuels is increasingly happening on purely economic grounds.There’s also what economist Robert Frank, in a recent column for the Washington Post, described as “behavioral contagion”—that is, peer pressure. Some of these individual commitments on climate—such as the recent ones by Bezos, or BlackRock Inc.’s Larry Fink, or BP Plc’s Bernard Looney—may lack the level detail or ambition that would satisfy campaigners, but they serve to raise the salience of the issue in the minds of other businesses and encourage them to make and meet more ambitious pledges of their own.Many people—myself included—thought the fossil fuel divestment campaigns that kicked off in 2012 and 2013 were naive and would never actually move the needle in terms of reducing capital costs. Just a few years later, however, it’s clear that thermal coal companies are struggling to get financing. Some of this is undoubtedly due to the economics of alternative sources of energy, rather than any campaigns or moral imperative, but there’s more to it than that. Many investment professionals have told me over the years that divestment campaigns got the attention of more senior executives, which in turn led to a more serious examination of the losses fossil fuel investments might sustain as markets opted for lower-emission alternatives. Once those “transition risks” had been assessed, they were hard to ignore.That’s why employees should consider following the example of the Amazon group. If our world is going to make the huge changes in our energy and agricultural systems needed to limit global warming, it’s going to need pressure not just from shareholders, activists and regulators, but from every side. With more and more businesses waking up to the need to do more in the years ahead, those who speak up may well find they’re pushing at an open door.Kate Mackenzie writes the Stranded Assets column for Bloomberg Green. She advises organizations working to limit climate change to the Paris Agreement goals. Follow her on Twitter: @kmac. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.To contact the author of this story: Kate Mackenzie in Sydney at firstname.lastname@example.orgTo contact the editor responsible for this story: Jillian Goodman at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The stock market with the most to lose from a wider coronavirus outbreak is the one in the U.S.Global markets sold off on Monday and Tuesday on reports that authorities are struggling to contain the virus, which has now spread to more than 30 countries and increasingly threatens the global economy. Until this week, the declines in global stocks seemed to be driven by proximity to the virus’s epicenter in China, but it’s becoming increasingly clear that few markets will escape harm if the virus isn’t contained.What’s not clear is which stock markets would suffer the sharpest declines. That obviously depends on how the crisis unfolds — where the virus spreads, how many people are affected, the impact on regional economies and trading routes, and so forth. But it also depends on the extent to which markets have already digested the potential risks, and by that criterion, the U.S. stock market appears particularly vulnerable. To see stock investors at their most carefree, take a look at the NYSE FANG+ Index. It’s a pantheon of the Great Disruptors – 10 companies that many investors believe are poised to dominate their respective industries. In order of market value, they are Apple Inc., Amazon.com Inc., Google parent Alphabet Inc., Facebook Inc., Alibaba Group Holding Ltd., NVIDIA Corp., Netflix Inc., Tesla Inc., Baidu Inc. and Twitter Inc. As a group, they are among the most extravagantly priced stocks in history, even for growth stocks.By any measure of price relative to earnings, the FANG index is nearly as expensive as the Russell 1000 Growth Index was at the peak of the dot-com mania two decades ago — or even more so. The price-to-earnings ratio of the FANG index is 34 based on analysts’ estimates of this year’s earnings per share, which is just 6% cheaper than the comparable P/E ratio for the growth index in March 2000. Other measures are even less flattering. Based on last year’s earnings, the FANG index’s P/E ratio jumps to 55, or an 8% premium over the comparable ratio for the growth index. And using an average of inflation-adjusted earnings over the last 10 years, it jumps again to 73, or a 16% premium over the growth index.Investors value the FANG index’s revenue even more than its profits. The price-to-sales ratio of the FANG index is 5.9, or 41% higher than the growth index’s P/S ratio of 4.2 in March 2000. Suffice it to say, when it comes to the FANGs, the market appears to have little concern for the risks around coronavirus or anything else.The reason that’s a potential problem for the U.S. is that eight of the 10 stocks in the FANG index are American companies. Remember that stocks in broad-market gauges such as the S&P 500 Index or Russell 1000 Index are weighted based on their market value. Therefore, as the market value of the stocks in the FANG index has spiked relative to others, so has their weighting in broad-market indexes. Those eight U.S. stocks represent less than 1% of the Russell 1000 by number, but they now account for more than 13% of its market value. That more than anything else explains the wide gap in the valuation between U.S. and foreign stocks. The P/E ratio of the Russell 1000 is 29, based on an average of inflation-adjusted earnings over the last 10 years, which captures the growth of both earnings and stock prices during the decade. By comparison, the P/E ratio of the MSCI ACWI ex USA Index, a gauge of global stocks excluding the U.S., is 19. That’s a premium of 53% for U.S. over foreign stocks, the largest since the data series begins in 1998. If the virus turns out to be a serious and sustained threat to the global economy, markets are likely to rethink stock prices, including those of companies in the FANG index. And the higher the valuation, the greater the potential for downward revision. That may seem unlikely to investors who view the FANGs as the ultimate blue chips, capable of navigating any environment, but no company is an island. Apple, the largest of the FANGs by market value, has already warned that it will miss sales forecasts because of coronavirus-related disruptions in production and demand for its products.More important, blue chips don’t necessarily provide more safety, particularly when valuations are stretched. In the late 1960s and early 1970s, for example, investors piled into U.S. growth stocks, driving up valuations of companies with fat profits, a key measure of quality. In the ensuing sell-off sparked by the 1973 oil crisis, the most profitable 30% of U.S. stocks, weighted by market value, tumbled 48% from January 1973 to September 1974, including dividends, according to numbers compiled by Dartmouth professor Ken French. Meanwhile, the cheapest 30% of U.S. stocks by price-to-book ratio, which are widely viewed as lower quality, declined 28% during the same period.It happened again during the dot-com boom in the late 1990s. Investors’ renewed obsession with growth stocks drove up the valuations of highly profitable companies. In the ensuing bear market sparked by the collapse of internet companies, the most profitable 30% of U.S. stocks fell 32% from April 2000 to September 2002, while the cheapest 30% of U.S. stocks declined just 10%. So there’s a lot riding on whether the U.S. disruptors can navigate the risks around coronavirus, not just for their own investors but also for those betting on the broad U.S. stock market. It makes sense that overseas markets took the first hit, but if the virus isn’t contained soon, don’t be surprised if the U.S. stock market turns out to be hit the hardest.To contact the author of this story: Nir Kaissar at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Something unusual was underway in early 2010 at Invite Media, a Philadelphia-based advertising technology startup. Under normal circumstances, it collected money from marketers and used it to buy digital ads. But over two days that spring it suddenly began paying for a wave of ads without waiting for checks to come in, using its own money instead. The company also paid off all its outstanding bills regardless of their due dates, sending its bank account balances plunging.It would normally be irrational for a company to burn cash unnecessarily, but in this case burning cash was the whole point. Invite’s co-founders were finalizing a deal to sell the company to Google, and reducing Invite’s assets was a key part of their preparation. By drawing down its bank account, Invite could reduce its total assets to a low enough level that the companies could avoid submitting their deal for review to the Federal Trade Commission, according to three people familiar with its finances.“What we did was we collected as much accounts receivable as possible and immediately paid out everything we could so we didn’t have enough money on the books to trigger the FTC stuff,” Michael Provenzano, one of the company’s co-founders recalled in an interview. Provenzano said he effectively went to the company’s bank and said, “We need you to be okay with our account dropping to a dollar.”The strategy worked. Google bought the company for around $80 million in 2010. It didn’t ask the FTC for pre-approval under the Hart-Scott-Rodino Act, which requires that companies do so when making acquisitions large enough to raise competitive questions.Now that the market power of Google and other huge tech companies has come under new scrutiny, the FTC is re-examining hundreds of deals that, like Invite, didn’t spark its interest when they happened. Officials at the commission now say they may have missed the significance of some deals that were small enough to avoid Hart-Scott-Rodino review when they happened.FTC officials began scrutinizing these deals as far back as last fall, when they met with a representative from a startup that had been bought by a large tech company in a deal that wasn’t reviewed at the time but could be scrutinized now, according to a person familiar with the matter who asked not to be named discussing private conversations. Mark Rosenberg, a researcher at a Yale University antitrust group, pegged Invite as “absolutely a viable candidate” for review under the new special order. He also flagged Google’s acquisition of the Apture, Amazon’s purchase of Blink, and Facebook’s purchase of Beluga and Gowalla.The market for online display ads was a multibillion-dollar opportunity for Google, and its success in developing advertising technology was a primary way it became one of the world’s most valuable companies. Acquisitions were key to this transformation. Google purchased the advertising exchange DoubleClick for $3.1 billion in 2007, and the mobile advertising company AdMob for $750 million in 2009.Both deals prompted antitrust reviews, with accompanying costs. “The review meant we had eight months of limbo that ended up being really hard because we didn’t know what was going to happen,” AdMob founder Omar Hamoui said, according to an excerpt of the book “Mad Men of Mobile.” “I had gone from an overwhelming high to a crushingly disappointing low, which was extremely frustrating.”In retrospect, Invite had been serving as an important independent piece of the advertising market. As a startup, it had created a software tool, called a demand-side platform, to make it simpler for marketers to buy ads online. The service allowed them to shop for advertising space on multiple platforms at once. Ad purchasers didn’t need to go to Google for ads and Yahoo for banner ads – Invite could help marketers find the best deal at a given time and buy from either platform.After acquiring Invite, Google made the startup’s tech a core piece of its suite of ad tech tools. By doing this, Google removed the neutral layer that separated it from ad buyers, according to Bill Demas, who led one of Invite’s main competitors for many years. The edge Google got from combining tools like Invite into a single product amounted to an “unfair advantage,” he said. “It was a very prescient acquisition because it was done so early.”A spokeswoman for the FTC declined to comment. In an emailed statement, a Google spokeswoman said that “former Google employees have created more than 2,000 startups, including companies like Pinterest, Quip and Instagram - that’s orders of magnitude more than the number of companies we’ve acquired. We have a long track record of working constructively with regulators and answering questions they have about our business."Provenzano said he remembers being given a spreadsheet of tasks to accomplish before the deal could close. One of the key tasks: drawing down the company’s bank account. Provenzano was sure about how and why this was done, he said, “because I moved the money.”Provenzano said he couldn’t remember whether Google instructed Invite on how to avoid the additional scrutiny, nor could David Horowitz, an Invite board member. But Horowitz said the company would have taken its cues from Google. Another person close to the deal confirmed that the company worked to avoid Hart-Scott-Rodino review, but declined to speak on the record for fear of offending Google.It is legal for companies to lower the size of a deal or cut down on assets to avoid Hart-Scott-Rodino review, according to Paul Jin, a partner at the law firm Goodwin Procter. “It could cause the FTC to say I don’t like that, it’s suspicious,” he said, but he added that isn’t against the commission’s rules and is fairly common.Two of Invite’s four co-founders – Nat Turner and Zach Weinberg – founded another startup called FlatIron Health, with significant financial backing from Google Ventures. They sold it for $1.9 billion to healthcare giant Roche in 2018. Both declined to comment, as did Jason Harinstein, the man who helped drive the Invite acquisition for Google. He currently serves as FlatIron’s chief financial officer.It is not clear what the FTC hopes to achieve with its review of past acquisitions. The commission has held open the possibility of unwinding past deals. Given the ongoing investigations by the FTC and the Department of Justice, it may instead issue a report of its findings, according to Daniel Crane, a law professor at the University of Michigan. That report could provide fodder for a larger investigation or for Congressional legislation, he said.Demas, the former Chief Executive Officer of Turn, the Invite competitor, said the deal “frightened” his team. But it took a few years for the consequences to play out, as Google integrated Invite’s software into its own codebase. Eventually, Google began to prevent competitors like Demas from selling its ad inventory, leading business to slow.There were concerns about Google’s market power at the time. The FTC conducted a wide-ranging investigation into Google’s search advertising business, but closed the case in January 2013 without fining the company. “The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law,” the FTC said at the time. Demas said that the FTC summoned him to Washington some months later to discuss Google, but nothing seemed to come of it. He said government officials are at a disadvantage trying to keep up with a field evolving as quickly as advertising technology. “They really knew their stuff,” said Demas, of the FTC lawyers he met with. “But you have to anticipate some of these moves.”Demas’s company struggled in the years after Google’s acquisition of Invite. Turn cut staff in 2015, and two years later sold itself to a subsidiary of a Singaporean telecommunications firm for about half the price of its valuation in 2013, when it had been considering an IPO.Invite’s co-founders felt they had lucked out by selling before Google bought one of its rivals, according to Provenzano. “I don't know what would have happened if we kept going forward. Obviously we would have been competing with Google,” he said. “Why go through that battle?”To contact the author of this story: Eric Newcomer in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Joshua Brustein at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
China minted three times as many new billionaires than the United States in the past year, with fortunes made in drugs and online entertainment after a mini-boom from the coronavirus outbreak, a ranking of the world's wealthiest people shows. The Greater China region, including Hong Kong and Taiwan, created 182 new billionaires in the year to Jan. 31, taking its total to 799, according to the 2020 Hurun Global Rich List released on Wednesday. While the outbreak of a new coronavirus in China has hammered the world's second-biggest economy, it has also driven up stock valuations of Chinese companies in online education, online games and vaccinations, the report said.
(Bloomberg) -- When the Internet Accountability Project popped up late last year and joined the growing crusade against Big Tech, the nonprofit group refused to say who was financing it.Turns out, at least one of its benefactors is Oracle Corp.Oracle donated between $25,000 and $99,999 last year to the internet project, according to a new political-giving report Oracle posted on its website. The group calls itself a conservative nonprofit advocating for tougher privacy rules and stronger antitrust enforcement against the internet giants.The IAP financing is just one part of an aggressive, and sometimes secretive, battle Oracle has been waging against its biggest rivals, including Amazon.com Inc. and Alphabet Inc.’s Google.Oracle spent years fighting to unseat Amazon as the front-runner for a lucrative Pentagon cloud contract, which was awarded to Microsoft Corp. in October.The Redwood City, California, company has also been locked in a decade-long legal dispute with Google, claiming the search-engine giant violated Oracle copyrights by including some Java programming code in the Android phone. Oracle acquired Java’s developer, Sun Microsystems Inc., in 2010.Earlier this month, IAP filed an amicus brief supporting Oracle’s position in the case. IAP said it wants to “ensure that Google respects the copyrights of Oracle and other innovators.” The U.S. Supreme Court on March 24 will hear oral arguments in the Google v. Oracle America case.The Trump administration on Feb. 19 also urged the Supreme Court to reject Google’s appeal in the case. Its brief appeared the same day that Larry Ellison, Oracle’s co-founder and chairman, hosted a high-dollar fundraiser at his Rancho Mirage estate for President Donald Trump. The event prompted about 300 Oracle employees to stage a protest the next day. The U.S. had previously supported Oracle as the case wound its way through the courts.Oracle’s donations disclosure reveals that it contributed to at least four other groups that filed supportive briefs in the Supreme Court case. Google has also donated money to at least 10 groups that have filed briefs on its behalf in the high court case.Oracle and Amazon didn’t immediately respond to requests for comment about the Oracle disclosure. Google declined to comment.IAP President Mike Davis said in a statement the group doesn’t disclose its financial backers but specified that Oracle didn’t fund its Supreme Court brief.The internet project was launched in September by Davis, a former aide to Republican Senator Chuck Grassley of Iowa, and Rachel Bovard, a former aide to Republican Senator Rand Paul of Kentucky. The group aims to “lend a conservative voice to the calls for federal and state governments to rein in Big Tech before it is too late,” according to its website.The IAP is a Section 501(c)(4), known as a “social-welfare” organization. That designation means it isn’t required to disclose donors as long as it doesn’t spend more than half of its money on campaign advertisements or activities to sway an election.Among other policies, IAP supports curtailing Section 230 of the 1996 Communications Decency Act, which shields tech companies from liability for content that users post on their platforms. The clause saves tech companies from having to review content before it’s published online, and then shields them from lawsuits if that content turns out to be problematic.Earlier: Barr Takes Aim at Legal Shield Enjoyed by Google, FacebookIn interviews and on social media, IAP has supported Republican Senator Josh Hawley of Missouri, who has proposed that tech companies lose the legal immunity unless they can prove to the Federal Trade Commission that they treat their content in a politically neutral manner.Since September, IAP has tweeted at least 11 times about Hawley’s legislative efforts against Google and other tech companies. Other IAP tweets highlight instances in which Google-funded groups fought on the internet giant’s behalf.“Holy smokes you guys, DC is awash in @Google money,” Bovard tweeted in September.Davis, the group’s president, wrote last week on Townhall.com that Google’s battle with Oracle is “the poster child for what we at IAP call ‘the Great 21st Century Internet Heist.’” He said the company “is anathema to conservatives and everything we stand for,” without disclosing that his group is funded by Oracle.Earlier: It’s the Kochs vs. the Mercers in the Right’s Big Tech BrawlOracle claims Google owes it at least $8.8 billion for using the Java code without a license. Google argues it was fair to use parts of the programming language to help Android communicate more easily with other software.The case has split Silicon Valley by pitting software makers who favor stronger copyright protections against companies that rely on others’ code to produce new innovations.Other CampaignsIAP is far from the only anti-tech group Oracle has funded. It also gave between $25,000 and $99,999 to the Free and Fair Markets Initiative, according to the disclosure.Free and Fair Markets claims it is a grassroots coalition of businesses and advocacy groups fighting for a better economy. In practice, it has focused more on publicizing negative reports about Amazon. The Wall Street Journal reported that Oracle, Walmart Inc. and the Simon Property Group had financed the group.For the last two years, Oracle has also waged a multi-front battle against Amazon over the Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, cloud contract. The deal, which could be worth $10 billion over a decade, is designed to transition much of the Pentagon’s data into one commercially operated cloud system.For more: Oracle’s Catz Is Said to Talk Amazon Contract Row With TrumpAmazon was seen as the leading contender because it had already won a major cloud contract with the U.S. Central Intelligence Agency and had obtained high levels of security clearance. The move to Amazon’s cloud would have threatened Oracle’s legacy database business with the Defense Department.Oracle led a coalition of other tech companies, including Microsoft Corp. and International Business Machines Corp., to oppose the Pentagon’s decision to award the contract to a sole bidder. In addition to lobbying Congress and the Trump administration, Oracle also filed -- and lost -- challenges through the Government Accountability Office and the U.S. Court of Federal Claims.Oracle is currently appealing a July ruling that it lacked standing to challenge the contract.(Updates with comment from IAP in paragraph 11)\--With assistance from Greg Stohr.To contact the reporters on this story: Naomi Nix in Washington at firstname.lastname@example.org;Joe Light in Washington at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, Paula DwyerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Technology shares -- a key engine of the stock market's climb to records over the last several months -- are now among those leading Wall Street's plunge on growing concerns over the coronavirus outbreak. The S&P 500 information technology sector has fallen 9.3% since Thursday’s close, outpacing a drop of 7.3% for the broader index. Only energy has performed worse, reflecting a sharp decline in oil prices on fears that the coronavirus will slow global economic activity.
The planned digital tax, a new bill that could impact encryption, developments on U.S. Google's antitrust case and Amazon's challenge of the JEDI contract and other news is covered in this article.
(Bloomberg) -- Jamie Dimon sees competition everywhere he looks, so he’s vowing to be creative with what he can buy to stay ahead.JPMorgan Chase & Co. is looking “aggressively” at acquisitions across its businesses and could buy anything that’s not another U.S. bank, the chief executive officer said at the firm’s investor day in New York Tuesday. The bank has a greater appetite for deals than in previous years, helped by regulators who are more accommodative, he said.Coming off the most profitable year in U.S. banking history, Dimon attempted to push down expectations, saying last year’s bonanza was helped by unusually low credit costs and flagging 2020 as a “tougher year.” The bank’s presentation touted how it’s outperformed rivals in recent years, but also struck a cautious tone on challenges it faces from a series of industry trends that aren’t going away.“You’re going to get some form of competition from Apple, Amazon, Facebook, Google, WeChat, Alipay; you’re going to get it across payments, white label, black label and bank-in-a-box and marketplaces, and that’s the world we’re going to face,” Dimon said. “When it comes to M&A, we should be very, very creative.”One big change is in regulators’ attitudes toward letting big banks get bigger.“Now they’re giving more of a green light,” Dimon said. “The door is open for people to be a little more ambitious and aggressive with how they deploy capital in acquisitions.”In updating its outlook for 2020, the bank maintained its return on tangible equity target at 17%, and said its overhead ratio would be below 55% in the medium term. It expects net interest income to fall slightly to $57 billion this year as lower interest rates squeeze traditional lending businesses.Interest rates holding near multiyear lows will continue taking a bite out of revenue, it said.“Rates are much lower than expected both on the short and long end” than the bank forecast a year ago, Chief Financial Officer Jenn Piepszak said. While the firm expects NII to grow again in 2021, “all of this is market dependent, and yesterday’s volatility is a good reminder of that,” she said, referring to the stock-market tumble.“It’s gonna be a much tougher year in 2020,” Dimon said. While the bank is prepared for an economic downturn, “a lot of our managers haven’t been through one, so I do worry about that.”On other fronts, Dimon and Piepszak said JPMorgan plans to borrow from the Federal Reserve’s discount window from time to time. The facility is meant to provide emergency liquidity to banks that otherwise have healthy balance sheets. In a cash crunch, banks can pledge collateral to the Fed in return for cash. But lenders have been reluctant to use the window, in case investors interpret it as a sign of financial weakness.“We think this is an important step for us to take to break the stigma here,” Piepszak said.For the first quarter, net interest income will likely be $14.2 billion, slightly higher than previous estimates. And trading revenue for the period will probably increase by a percentage in the “mid-teens” compared with the same period last year, according to Daniel Pinto, co-president of the corporate and investment bank. The market is doing “pretty well” so far this year, Pinto said.Cost cuts have been a major focus, including shifting thousands of jobs out of the New York area to cheaper locations domestically and abroad over the past few years. Still, JPMorgan said expenses could jump 2.5% this year to around $67 billion. The bank said it would spend $500 million more on technology investments.Shares of the company fell 2.8% to $128.43 at 1:18 p.m. in New York, compared with a 3.1% decline for the KBW Bank Index.The bank also said it would help finance about $200 billion related to sustainable business practices and other green initiatives, up from $175 billion last year. It expects to use renewable energy for all its global power needs by the end of 2020.“There’s no meeting where this issue isn’t coming up,” Pinto said. “This situation is evolving so fast that whatever target you put for the next 10 years most likely will be obsolete.”Among other major initiatives is a national branch expansion, a push into China, investments in wholesale payments and a deeper effort to advise high-net-worth individuals.On the branch expansion, JPMorgan said it has $1.5 billion in deposits and investments from new markets, including Boston, Philadelphia and Washington D.C. New branches are reaching the break-even point seven months faster than the average six years ago, the company said.To contact the reporter on this story: Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Steve Dickson, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Amazon.com Inc. is taking aim at the urban grocery market with a larger version of its cashierless Go convenience store.The company on Tuesday opened the first Go Grocery, located in Seattle’s Capitol Hill neighborhood, not far from the online retailer’s headquarters. The store is about five times the size of a typical Amazon Go -- meaning it can accommodate shopping carts -- and carries baked goods, meat, produce and household items.Amazon is betting a frictionless checkout experience will help it grab a bigger share of the $800 billion U.S. grocery market, now dominated by Walmart Inc.The Go Grocery stocks about 5,000 items, compared with 500 to 700 in a typical Go store, said Cameron Janes, who oversees the Go project along with several other brick-and-mortar experiments. The selection includes non-food staples like paper towels and laundry detergent but stops well short of the array offered at a traditional grocery store. Amazon’s Whole Foods markets carry tens of thousands of products.Like existing Amazon convenience stores in Seattle, Chicago, San Francisco and New York, Go Grocery uses cameras and sensors track people and what they take off the shelf. Shoppers are charged when they exit. But unlike the early stores, the new format has updated versions of the system that can identify produce without wrappers for each apple, cabbage or pineapple. That makes stocking easier and lowers costs in an industry with notoriously tight margins.“We can pretty much handle everything” stocked by a regular grocer, Janes said of the latest technology.During a tour, he showed off grab-and-go food, coffee and baked goods from local purveyors. The store uses the same meat suppliers as the Amazon Fresh grocery delivery service, he said, and shares some organic produce and fish suppliers with Whole Foods. Unlike the high-end organic grocer, Go Grocery stocks items like Coca-Cola and Big League Chew bubble gum.Amazon leased the retail space at 610 E. Pike Street in Seattle several years ago with the intention of using it for the first Go store. Given a broad mandate to shake up physical retail, the Go team originally planned to build a checkout-free supermarket, complete with a butcher, cheesemonger and coffee bar.Chief Executive Officer Jeff Bezos toured a prototype store in late 2015 and said it could confuse customers. Instead, he asked the team to focus on refining the people-tracking technology and checkout experience. Go opened to the public three years later as a convenience store in Amazon’s headquarters, and the original space sat empty -- until now.The new Seattle store won’t be Amazon’s last new take on grocery shopping this year. In Los Angeles, the company is preparing the first in a new line of grocery stores, with traditional checkout counters but distinct from the Whole Foods chain.Amazon is also weighing other Go formats and potentially licensing the technology to other companies, Bloomberg reported last year. Blueprints filed in Washington, D.C. suggest a Go Grocery is coming to the nation’s capital, too.Janes didn’t comment on plans for future stores but said the new Go Grocery will target apartment dwellers rather than the office workers the existing Go stores mostly serve.“This is our first one,” Janes said. “I think we’re going to learn and see where they’re going to work; high-density residential areas is where we’re starting.”(Updates that the store has now opened.)To contact the reporter on this story: Matt Day in Seattle at email@example.comTo contact the editors responsible for this story: Robin Ajello at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Trade Desk's (TTD) fourth-quarter results are likely to benefit from strength in programmatic ad buying and a growing partner ecosystem.
(Bloomberg) -- A powerful executive with Amazon.com Inc. in October portrayed attempts by archrival Oracle Corp. to block her company from winning one of the biggest-ever government deals as a last-ditch attempt to rescue a business that was becoming irrelevant.Now, Amazon is borrowing a page from the playbook Oracle used to unseat it as the front-runner for an up to $10 billion, 10-year project to overhaul the military’s technological operations.Amazon filed suit in federal court in November after the Pentagon, in a surprise move, on Oct. 25 awarded the contract to Microsoft Corp. Amazon asserted that the procurement was corrupted by the intervention of President Donald Trump, whose disdain for Jeff Bezos, its chairman and chief executive officer, is widely known.“Amazon is going to the mattresses,” said Stan Soloway, a deputy undersecretary of defense under President Bill Clinton and now president of Celero Strategies, a Washington-area consulting firm. “It feels like the same scorched-earth approach” that Oracle took.Earlier, Amazon had sounded a very different note on legal challenges in the government contracts arena. Two days before it lost the award to Microsoft, Teresa Carlson, who oversees government contracting for the company’s profitable cloud-computing unit, Amazon Web Services, derided efforts by Oracle and others to cast the Pentagon’s bidding process as corrupt and rigged in Amazon’s favor.It’s “kind of sad” when losers routinely protest procurement decisions “because it delays innovation,” she told other female corporate leaders, lobbyists and government officials at a Washington conference.Amazon’s combative legal strategy includes seeking Trump’s deposition, which legal experts say is unlikely but not impossible. It hopes to block the Pentagon from putting the cloud project into effect without a new evaluation or award decision.The longer the delay, the more time it has to gather depositions from officials, win over lawmakers, influence public opinion and prevent Microsoft from doing anything on the cloud project that would be hard to reverse. It’s also claiming the Defense Department lowered its standards by choosing Microsoft.Microsoft declined to comment. Oracle didn’t respond to a request for comment. Amazon pointed to earlier statements from company spokesman Drew Herdener who said the contract evaluation was tainted by deficiencies and “unmistakable bias.”The company scored an early win on Feb. 13 when a U.S. Court of Federal Claims judge temporarily blocked Microsoft from working on the Joint Enterprise Defense Infrastructure, or JEDI, cloud program while the lawsuit is pending. The order, which is still sealed, says the Pentagon must stop working on the contract “until further order of the court.”The e-commerce giant’s newfound aggressiveness has surprised some observers. The company remained a champion of the project in 2018 and 2019, while Oracle mounted a fierce lobbying and public-relations effort to stop the Pentagon from awarding a sole-source contract. “I didn’t think” they would protest even if they lost, Soloway said.Over the last two years, Oracle has filed -- and lost -- challenges at the Government Accountability Office and the federal claims court. Those efforts resulted in news stories airing its claims of unethical behavior by Pentagon and Amazon officials.Oracle’s audience wasn’t only bureaucrats and judges, but also the White House, lawmakers and the general public, all of which were simultaneously being flooded with revelations about Pentagon employees who worked on the procurement in its early days and then left to work for Amazon.Amazon is similarly seeking common cause with outsiders. Its case so far has attracted briefs from Protect Democracy, an anti-corruption group, and Citizens for Responsibility and Ethics in Washington, which has sued the Trump administration numerous times for alleged ethics lapses. Both organizations say they haven’t received money from Amazon.Amazon’s court case could help amplify its perspective on the procurement the same way that Oracle’s challenges attracted media attention. “There is also potential in litigation that you are arguing to members of Congress and the public,”said Steven Schooner, a professor of procurement law at George Washington University Law School.The company has been characterizing the loss of the contract as a political, not a technical, decision. Its suit contends that Pentagon officials artificially lowered their evaluation of the company’s proposal and that Trump “launched repeated public and behind-the-scenes attacks to steer the JEDI contract” away from Amazon “to harm his perceived political enemy” -- Bezos.Earlier this month, Jay Carney, Amazon’s top spokesman, told CNBC that the company was taking legal action because it believes that “blatant political interference” affected the award decision. Trump has long criticized Bezos over everything from the shipping rates Amazon pays the U.S. Postal Service to his ownership of the Washington Post.While Oracle charged that Pentagon officials failed to properly investigate ethical issues surrounding the bid, Amazon goes further by arguing that bias cost it the deal. Amazon alleges that the Defense Department, swayed by Trump’s animosity, unfairly judged its bid. It cites passages in a book by the speechwriter to former Defense Secretary James Mattis, stating Trump once told Mattis to “screw Amazon” out of the bid. (Mattis has criticized the book.)“Contracting officers are accused every day of not playing by the rules but rarely that they had a vendetta,” said Charles Tiefer, a professor at the University of Baltimore School of Law.Microsoft, International Business Machines Corp. and other Amazon rivals at times joined forces with Oracle to try to stop the Pentagon from awarding the cloud contract to a single company, which made Amazon the obvious front-runner.Amazon not only was the market leader in the cloud-server industry, it also had won high-level security clearances from its previous work moving the Central Intelligence Agency’s data to the cloud.The tech companies courted the press and Defense Department cloud-services buyers. The Oracle coalition also descended on Capitol Hill, appealing particularly to members of the Armed Services committees. Some of the lawmakers would later propose curtailing the Pentagon’s funding for the contract until it justified its strategy.Amazon, likewise, in June hired a Trump-connected lobbyist, Jeff Miller, just before Trump disparaged the bidding process as uncompetitive, citing complaints from Oracle, Microsoft and IBM.Oracle’s legal challenges helped Microsoft catch up technologically -- and ultimately win. During the nearly three-year process, Microsoft won new deals with large customers such as Chevron Corp., AT&T Inc. and more than a dozen intelligence agencies that bolstered its standing in the marketplace.Delay Was Microsoft’s AllyMicrosoft, in addition, invested in a portable Azure system to analyze and transfer data to the cloud from the battlefield. The delay also gave Microsoft time to attain a higher level of government security, though it still hasn’t matched Amazon’s top-secret certification.Oracle, too, may have benefited from the delays it continued to engineer even after it was eliminated. Oracle, which sells large amounts of legacy software to the Pentagon, already has a partnership with Microsoft that it could use to win more business from the Defense Department.With much of the fighting between Amazon and Oracle in the rear-view mirror, JEDI’s fate rests with the federal courts. As Amazon waits for the U.S. Court of Federal Claims to decide on its request to depose Trump and Pentagon officials, Oracle is appealing a July ruling that it lacked legal standing to challenge the bidding.“People file these suits for all kinds of reasons,” Tiefer said. “You could argue that one of the things that Amazon wants is a legitimate explanation for why they lost.”\--With assistance from Dina Bass.To contact the reporter on this story: Naomi Nix in Washington at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, John HarneyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Amazon.com Inc is bringing its cashier-less store technology to a larger stage. The world's biggest online retailer on Tuesday is set to open 'Amazon Go Grocery,' a store in Seattle's Capitol Hill with four times the shopping space as the first cashier-less location it opened to the public in January 2018. The concept targets customers in residential neighbourhoods rather than office workers, whom the smaller Amazon Go convenience stores serve.
Indian streaming market is expected to witness intense price war and increased investments in original content in 2020 while Disney prepares Disney+ entry next month.
(Bloomberg Opinion) -- Anyone paying attention to finance, markets and the economy doesn't have to look very hard to find complaints that we are on the cusp of a bubble of one type or another.Perhaps the area most often targeted by the bubble believers is tech. I was curious about just how widespread this belief is: “Tech bubble” has doubled on Google Trends this year alone; Google News generates more than 3.6 million hits for the phrase.(1)Defining a bubble isn't too hard and one will do as good as another. “A market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset. Bubbles are often hard to detect in real time because there is disagreement over the fundamental value of the asset,” Nasdaq says. So let's turn to the pro-bubble argument: It has been a decade since the financial crisis and two decades since the dot-com implosion. That's enough time for people to have forgotten the trauma of that disaster. Since the Great Recession ended, there has been too much capital sloshing around, leading to excessive tech valuations. And not just in public equities, but in private markets, too. Unicorns and other SoftBank Vision Fund debacles have imploded, an early warning sign for publicly traded companies, the argument goes.Central banks have made the bubble worse, providing cheap capital that has artificially inflated profits. The bubble advocates also urge us not to overlook the impact of these low borrowing costs on the surge in share buybacks; reducing the total amount of a public company’s shares outstanding has the effect of making earnings per share look better.Then there are the anecdotes: Tesla’s stock has more than doubled in the past three months, and the company now has a market value of more than $165 billion -- higher than Volkswagen, General Motors and Ford combined. This is to say nothing of the companies valued at more than $1 trillion, such as Apple, Microsoft, Amazon and Google parent Alphabet. But let's also be generous and acknowledge that some things do look overvalued, whether it's Bitcoin (maybe), WeWork (obviously) or Tesla (I'm not getting in the middle of that one).But here's the thing: None of that is proof of a stock-market bubble. Let's look at some themes and issues to demonstrate why this is so:Business models: In the 1990s, the internet captivated the collective imagination of investors, too many of whom indiscriminately threw cash at anything with dot-com attached to it. The 2000 collapse taught investors that it took more than a high-concept idea to make a stock worth buying: growth and future cash flow matter a lot, too. The collapse of WeWork’s initial public offering last year brought this home once again. Investors realized that renting out office space short term while locking the company into long-term, expensive real-estate leases was a terrible business model. Public investors grasped this flaw -- something private investors seemingly failed to understand -- and the market worked the way it's supposed to. Revenue and earnings: Unlike the dot-coms of the '90, today's tech businesses are gigantic cash machines. Apple posted fourth-quarter revenue of $91.8 billion and net income of $22.2 billion. Without much fanfare, Microsoft's revenue grew 14% in the latest quarter, to $36.9 billion, while net income surged 38% to $11.6 billion. Alphabet, Amazon, Facebook all continue to mint revenues and profits. These companies also have accumulated hundreds of billions of dollars in cash. This is not the profitless tech boom of the 1990s.Sentiment: Maybe there is some excessive optimism. But that isn't the same as the full-blown delusion that bubbles produce. Talk of bubbles is offset by chatter about recession: Remember that less a year ago investors were anticipating a downturn and in the fourth quarter of 2018 major market indexes fell 20%, meeting the normal definition of a bear market, however brief. Meanwhile, the American Association of Individual Investors Bullish Readings index is 40.6, which is just a hair above the average reading of 39.5 for the past 25 years.Performance: Broad market performance is robust, but not crazy. Last’s year's 31% gain in the S&P 500 is misleading: most of that simply reflected the rebound from the 2018 fourth-quarter tumble cited above.So let's take a step back and consider the S&P 500 since 2015: It has had annual gains of 11.8%, for a total cumulative five-year return of 75%. Before fintwits howl “Now do the Nasdaq,” here it is: 17.6% annually and cumulative total returns of 125%. Fine, good, but not bubble material.Now compare those figures with the five years before the market peaked in March 2000: The Nasdaq generated annual returns of 60% and a five-year total return of 946% during that period, while the S&P 500 gained 25% annually and 211% for the five years. This is obvious, right?Sure, there are pockets of excessive optimism and foolishness in markets. There always are. But there also are lots of companies that are not participating in this bull-market rally. Those who were around in the 1990s know what a real bubble looks like: This isn't it.(1) Some recent examples:Barron’s:"Tesla’s Manic Rally Isn’t the Only Sign of a Market Bubble. What You Need to Know"CCN:"An Epic Stock Market Crash Is Looming, Analysts Warn"Yahoo:"The stock market is on steroids and it could end up like the dot com bubble"Barron’s (again): "Is the Fed Building Another Stock Bubble?"Bloomberg: “Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades”To contact the author of this story: Barry Ritholtz at email@example.comTo contact the editor responsible for this story: James Greiff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Amazon.com Inc. has asked a court to force the government to hand over documents related to Defense Secretary Mark Esper’s decision to recuse himself from making decisions on a $10 billion cloud-services contract.In a court filing made public on Friday, Amazon seeks a trove of documents to bolster its challenge of the Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, cloud contract that was awarded to Microsoft Corp. in October.Amazon Web Services, Amazon’s cloud unit, is also asking the U.S Court of Federal Claims to require the government to turn over materials that shed light on the role that Stacy Cummings, a deputy assistant secretary of defense, played in the procurement.Cummings communicated with the team evaluating JEDI bids and worked on preparations for JEDI-related meetings involving Esper, the lawsuit said. She recused herself from working on the procurement in September 2019, according to the lawsuit.In a previous filing, government lawyers argued that Amazon is “not entitled” to all materials relating to the recusals of Cummings and Esper. They added that Cummings had a conflict with Microsoft, that “did not impact the procurement.”Other files Amazon seeks include “informal notes” between the bid selection team members, JEDI-related content on digital channels and procurement documents that were presented to Esper and Deputy Secretary David Norquist.Representatives for the Defense Department and Microsoft didn’t immediately respond to requests for comment.Amazon filed a lawsuit in November in the U.S. Court of Federal Claims alleging that the Defense Department failed to fairly judge its bid because President Donald Trump viewed Amazon Chief Executive Officer Jeff Bezos as his “political enemy.”Amazon asked the court earlier this month to allow it to question Trump, Esper, former Defense Secretary James Mattis, and Dana Deasy, the Pentagon’s chief information officer.In August 2019, the newly confirmed Esper ordered a review of the procurement after Trump endorsed criticism that the Pentagon had given Amazon an unfair advantage with the contract’s design.The Pentagon announced in October that Esper would recuse himself from any decisions involving the contract to avoid the appearance of a conflict of interest. Esper’s son worked as a consultant for International Business Machines Corp., which along with Oracle Corp., had earlier been eliminated from the competition.Three days after Esper’s recusal, the Pentagon announced it had chosen Microsoft, an upset victory for the company that many in the industry viewed as a distant second to Amazon.“A complete factual record on the bases for these recusals is especially critical in light of the well-grounded allegations AWS has made about the troubling circumstances surrounding the recusals of DoD personnel,” the lawsuit said.The Pentagon’s JEDI project is designed to consolidate the department’s cloud computing infrastructure and modernize its technology systems. Earlier this month, a judge agreed to block Microsoft from working on the contract while Amazon’s lawsuit is being litigated.To contact the reporter on this story: Naomi Nix in Washington at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, Paula DwyerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
U.S. stocks sold off on Friday as a spike in new coronavirus cases in China and other countries and as data showing U.S. business activity stalled in February fueled investors' fears about the economy. Declines on Friday were led by heavyweights Microsoft Corp , Amazon.com Inc and Apple Inc for a second straight day. Chipmakers, with strong ties to China for revenue, also fell sharply, with the Philadelphia Semiconductor index falling 3%.
Global equity markets slumped on Friday as the fast-spreading coronavirus drove investors into safe havens, with gold hitting a fresh seven-year high and the yield on the 30-year U.S. Treasury bond sliding to an all-time low. The virus has emerged in 26 countries and territories outside mainland China, killing 11 people, according to a Reuters tally. Data shows mainland China had 889 new confirmed cases and 118 deaths, with most of those in the provincial capital of Wuhan, which remains under virtual lockdown.
U.S. stock indexes fell on Friday after data showed U.S. business activity stalled in February, while a spike in new coronavirus cases in China and elsewhere sent investors scrambling for safer assets such as gold and government bonds. Declines on Friday were led by heavyweights Microsoft Corp , Amazon.com Inc and Apple Inc for a second straight day.
Amazon is RAMPING UP ITS checkout-free stores. It'll open its first Amazon Go Grocery store Tuesday in Seattle, a supermarket that's four times bigger than the existing Amazon Go stores. The new concept targets shoppers in residential neighborhoods unlike Go, which caters to office workers. As with Amazon Go seen here, shoppers scan their Amazon Go smartphone app upon walking in, grab what they want, then walk out. The store's ceiling cameras and shelf weight censors confirm what customers put into their carts. Their credit card gets billed upon leaving the store. The larger format reflects the online retailer's ambitions of capturing more of their customers' weekly spending through groceries, a move that'll put it up against major supermarket operators like Kroger and Albertsons. It has long been rumored to be working on grocery stores that cater to customers with more diverse tastes than what's offered at the upscale Whole Foods chain it bought three years ago. Amazon Go Grocery is THE COMPANY'S SMALLER VERSION OF THE CONCEPT THATS NOT a full-fledged supermarket. It sells fresh cold cuts. But it doesn't offer a deli or seafood counter. It's unclear how much Amazon will save on labor costs by not employing cashiers since it has to invest a lot in technology to compete in an industry characterized by low profit margins.