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March 2017

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OTR Global downgraded its rating on Salesforce stock to mixed ahead of the company’s second quarter earnings release

Salesforce.com, Inc. (NASDAQ:CRM) stock plunged as much as 4% in the first few minutes of today’s trading session, after analysts at OTR Global downgraded their rating on the stock from Positive to Mixed ahead of the company’s second quarter earnings release. The provider of state-of-the-art cloud computing solutions faced increasing pressure from shareholders in the beginning of this year as share price plunged, carving its 52-week low of $52.60 in early February.

Several players in the cloud computing space such as Workday and Splunk followed a somewhat similar pattern, reflecting the ongoing turbulence across the entire sector. Analysts on the Street attributed weaker-than-expected spending and soft end-market demand for the aforementioned broader market selloff. However, investor confidence for these cloud computing names took a U-turn soon, particularly after Splunk bumped its full-year 2017 outlook. Apparently as a consequence, Salesforce.com stock surged more than 34% from its record low level.

The company is expected to post its top and bottom line results for the second quarter of fiscal year 2017 after the closing bell on August 29. For its previous quarter, Salesforce posted upbeat results; the company managed to generate $1.92 billion in total revenues, beating the $1.89 billion consensus estimate. Additionally, Salesforce’s adjusted earnings per share came in at 24 cents, surpassing the Street’s estimate by one cent. OTR Global raised caution on Salesforce stock ahead of its second quarter earnings release after conducting recent channel checks which fell below expectations.

In addition to OTR Global, analysts at Piper Jaffray also weighed in on the cloud company, reiterating their Overweight rating and $100 price target on the stock. The research firm shared similar thoughts related to Salesforce’s upcoming earnings call, citing “somewhat lighter” trends in the company’s new business. Piper Jaffray believes the company’s second quarter results would provide a buying opportunity to investors. Salesforce stock has now jumped nearly 34% over the last six months, compared to Nasdaq Composite Index which rose almost 22%.

2016 guidance suggests that Valeant Pharmaceuticals downside risk outweighs the upside potential

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) remains Underweight at Piper Jaffray Companies (NYSE:PJC) owing to little upside potential and downside risk being a lot more significant. Analyst David Amsellem analyzed the guidance for the year 2016, and has derived the conclusion that the chances for an upside remain remote at best. On the other hand, the downside risk is quite significant and has thus maintained an Underweight rating on the stock.

In order to derive the conclusion, the analyst studied the guidance which implied EBITDA of $5.6 – $5.8 billion in the light of his financial model. The analyst proportionated the numbers on different sectors of Valeant’s business to arrive at the speculated EBITDA range. The resultant growth in different sectors remained underwhelming; however, it may not be the final verdict as it involved a great number of dependencies and unquantifiable factors. Regardless, after studying the historical pricing of over 90 products in the US, and observing the prescription trends the analyst believes downside risk to be far greater than that of upside potential for 2016. The number of new prescriptions for skin diseases has declined incrementally in the past few weeks.

For the previous quarter, the company reported revenue of $2.8 billion above consensus of $2.75 billion and growth of 22.8% year over year was observed. The EPS was however below the expectations of $2.61 and came in at $2.50 with year over year decline of 3.1%.

Piper Jaffray remains conservative about VRX stock as the firm reiterated an Underweight rating and has declined to put a price target as the firm is yet to release audited financial reports. The analyst opinion for VRX has three strong Buy, four Buy, 10 Hold, three Underperform and one Sell rating. The stock is currently traded at $34.20 in the final hour of premarket.

Apple might release a 5.8 inch smaller than the 5.5 inch form factor of its current iPhone in 2017, according to well informed Apple analyst Ming-Chi Kuo

KGI Securities analyst Ming-Chi Kuo, in a recent note to investors claims that Apple will release a phone in a completely new form factor which will allow it to use a 5.8 inch OLED screen in a form factor smaller than its current 5.5 inch iPhone. Kuo has proven to be a leading authority in predicting details regarding Apple’s product launches in the past. Just last year, the analyst predicted that Apple would be releasing an upgrade to the iPhone 5s in 2016, which has proved to be accurate with the launch of the iPhone SE and gives weight to his predictions.

It’s no secret that Apple will be switching its display technology to OLED with news last week indicating that the company had signed deals with Samsung Display for 60,000 OLED panels per month. However analysts have been guiding for the technology to be introduced to Apple’s iPhone line by 2018, but there are suggestions regarding the acceleration of that time frame to 2017. Mr. Kuo agrees with this assessment but has predicted additional details regarding the form factor, features and capabilities of the coming iPhone. According to the analyst, Apple is likely to seek to increase its screen size but will do it in a way that does not aesthetically detract from its iPhone or make it too unwieldy to use. The analyst suggests that by shaving down the bezels as well as the iPhone’s metal sides Apple will be able to accommodate a 5.8 inch screen on its 2017 iPhone and more excitingly in a form factor smaller than that of the current 5.5 inch iPhone.

However no other changes in design have been noted, indicating that the company’s design philosophy will remain unchanged apart from accommodating the new OLED display. The increase in screen size with decrease in overall form factor is a strategy that has been used by Samsung on its S7 Edge handset and Apple is probably trying to play catch up to demand for bigger screens without discomfort from form factor.

Apart from the screen and form factor, Kuo guides for features such as wireless charging that are already available on competing devices as well as innovative biometric security as Apple steps up its game thanks in part to its current legal tussle with the government. The new design philosophy is unproven but in the recent past, change in form factor has had a transformative impact on Apple’s demand.

Apart from the US, YouTube is the most watched online on-demand video service

Over the last few year, Netflix, Inc. (NASDAQ:NFLX) has created a large base of subscribers in the US and has been arguably called the biggest on-demand video service in the county. Now, a research firm confirms this claim. 

Digital TV Europe reported that the world’s largest online TV network has beaten Alphabet Inc’s (NASDAQ:GOOGL) YouTube to become the most watched on-demand video service in the US. The research was conducted by Ampere Analysis by measuring fraction of users interaction with a service over the last month.

While Netflix stole the show with 47% share of in terms of user viewing, YouTube came in at second with 42% share. Other top services include Amazon.com, Inc. (NASDAQ:AMZN) Instant Video service (22%), Hulu (19%), and Facebook Inc (NASDAQ:FB) videos (15%).

Interestingly, US is the only country in the world where YouTube is not the most used video service, according to Ampere. The Google’s videos platform has 43% share among the British users. Netflix does not even make it to the second in the UK with 20% share, as BBC’s iPlayer has 36% of the market.

Ampere Analysis Research Director, Richard Broughton said that British users widely use free online videos, but subscription video on-demand (SVoD) services, such as Amazon Prime and Netflix, are creating demand for “pay for content.” He expects Generation X, which is unwilling to spend online, to gradually move towards these services.

Ampere also found which device users use to watch online video services. While commuting, people use smaprtphone to watch the video, but prefer having a bigger computer or TV screen.

Notably, Americans and British consumers do not have the same taste when it comes to viewing content, as most of the people in the US prefer comedy videos and UK users usually opt for fantasy and sc-fi content.

As security/hacking risk increases, Tesla Motors Inc hires former Apple Inc OS Security expert Aaron Sigel for its new IT Security Team

Since Tesla Motors Inc (NASDAQ:TSLA) introduced over-the-air (OTA) technology, it has become an attractive target for hackers. Just last month only, a Model S owner and a hacker Jason Hughes spoiled one of the several Elon Musk’s upcoming plans at the automobile company, revealing that the company has been working on a P100D. 

Earlier this week, Electrek reported that the electric vehicle (EV) maker looted another Apple Inc. (NASDAQ:AAPL) employee, an OS security manager Aaron Sigel as the Product Security Manger in its new IT Security team. Conversely, the team, which is being built, is headed by former Google Inc’s Project Zero’s chief Chris Evans.

According to Mr. Sigel’s LinkedIn profile, he initially joined the world’s most valuable company in 2014 as Product Security Engineer but left after four years to work in his own company. He returned to Apple in 2011 and had been working as OS Security Engineer and Manager in OS Security till March, 2016.

The new employee became part of Tesla’s growing security team, which includes two former security engineers of WhiteHat Security. Some of the IT Security team’s employees are also part of a special force “Red Team,” which challenges the company to enhance its effectiveness

To recruit software and security engineers, Tesla’s officials had been present at some security conventions, such as DEFCON, Las Vegas where two hackers told last year that they were able to hack a Model S and install a Trojan. They aimed to close the electric motor but they required physical access to the premium sedan. Additionally, the company sent an OTA update to its vehicles to resolve the problem before the hackers could tell the public. Nevertheless they were awarded $10,000 by Tesla for Security Researcher.

Apart from the security concerns, the poaching war between Tesla and Apple continues, with the EV maker having scooped several senior Apple engineers. Tesla’s engineering team is growing every month. Last month only, Mr. Musk hired Apple’s alloy expert for Tesla and SpaceX.

Elon Musk says he would be happy to talk to President-elect Donald Trump, as he was hearted by a recent development

Last month before the Election Day, Tesla Motors Inc. (NASDAQ:TSLA) CEO, Elon Musk, went on record saying that President-elect Donald Trump is not the “right guy” for the presidency, as he does not “have the sort of character that reflects well on the United States. Yet, he doesn’t feel threatening on the potential repealing of tax incentives for electric cars and solar.

Conversely, Mr. Trump has been criticizing the Obama administration for giving tax payers’ money to struggling renewable energy companies in the name of global warming and discouraging companies that could create large number of jobs. Thus, he made a group of CEO of top companies, including General Motors, JPMorgan, and Walt Disney, to advise him on job creation. As many would have expected, Mr. Musk, the CEO of two revolutionary companies Tesla and SpaceX, was not in the list.

Andrew Ross Sorkin, a New York Times columnist, wrote “Want to Bring Back Jobs, Mr. President-Elect? Call Elon Musk,” explaining why the Tesla man should be in the group and he can be a valuable asset in the cause.

He received the following reply from Mr. Musk:

“I’d be happy to talk to Trump,” adding that he was heartened by the recent acknowledge of Mr. Trump that global warming can be cause by human beings.

In his article, Mr. Sorkin wrote Mr. Musk has created about 35,000 jobs already through his business over the last 10 years and Tesla’s under-construction Gigafactory in Sparks, NV would alone hire create 6,500 production workers by 2020. Following the lithium-ion battery factory’s completion, Tesla cars will have 95% of its parts build in the US.

While the Tesla cars go through tariffs and taxes that make them much more expensive in China and Europe, Chinese and European vehicles only have to face a nominal tax t sell EVs and its parts in the US. Additionally, he receives just a fraction of subsidies compared to subsidies received by the oil companies and the Big Three. Yet, it is accused for operating his empire using public funds.

Interestingly, Mr. Musk does not even care of the subsidies on EVs are taking away, as he believes “Tesla’s competitive position would increase, not decease” because other carmakers will have much more problem in creating battery-powered car than Tesla will.

Yesterday, USA Today reported that Mr. Trump has invited tech leaders for a meeting next week, there is no word if the invitation has been sent to Mr. Musk, the most admired tech leader among founders.

Venezuela-based oil company, Camimpeg, has reportedly entered into an alliance with the UK-based Southern Procurement Services

Just when The Country Caller was skeptical about further red flags for oil’s future, a recent development coming from Venezuela might just erode gains in the commodity.  Venezuela-based military-controlled oil mining company, Camimpeg, has reportedly entered into an alliance with the UK-based Southern Procurement Services (SPS). According to the deal’s terms, the oil wells located in the state of Zulia shall be re-activated. The well count itself could climb to 1,500, which may add to the supply side.

While this deal may favor both the companies in the near term, it can have a disastrous impact on the future of the commodity. The organization of petroleum exporting countries (OPEC) has already accelerated its efforts to curb oil supply, as producers in Saudi Arabia and Qatar have given out dates to initiate crude supply cut. The British company is said to have been approached so as to alleviate the oil production in the Venezuelan fields.

Oil has been a major contributor to Venezuela’s exports, as the commodity constitutes 95% of the total export earnings of the country. However, the region recently recorded its lowest ever production levels in the last 13 years, raising concerns to accelerate output in the region. Venezuela is currently the 11th largest oil producer in the world and any pressure on the supply side will make the situation difficult to handle. We are already witnessing a downward trend in oil prices today, as they continue to tumble below $53.

Even the upcoming year is not expected to be fruitful for oil-dependent economies as prices are expected to remain below $55. The sustainability of OPEC’s accord is another question mark in our view. TCC adheres to its bearish views as we do not see any positive developments coming in, which can help bring stability in the supply glut, while crude demand will also add pressure next year.

You can expect gaming on Windows 10 to get better

A Twitter user named WalkingCat has discovered that Microsoft Corporation’s (NASDAQ:MSFT) latest build number 14997 contains a .dll file named “gamemode.dll”, as reported first by PC Gamer. The user suggests that the $490 billion company may be looking to implement Game Mode in Windows 10 for its gaming audience.

.@h0x0d 14997 has a new dll “gamemode.dll”, so it looks like Game Mode is a thing

— WalkingCat (@h0x0d) December 28, 2016

 

 

 

.@h0x0d looks like Windows will adjust its resource allocation logic (for CPU/Gfx etc.) to prioritize the “Game” when running in “Game Mode”

— WalkingCat (@h0x0d) December 28, 2016

 

The way Game Mode will work is by allocating resources, possibly by restricting some of the background work so that more resources are available when users play a game. The Game Mode feature isn’t unheard of; Microsoft has implemented a similar feature in Xbox One’s operating system. While in a game, the console has limited GPU resources for developers, the Hypervisor OS is responsible for allocating resources in real time.

If Microsoft manages to pull off something similar for the PC, the performance improvements could be noticeable, but that remains yet to be seen. We don’t even know for sure if such a mode is in Microsoft’s plans. PC Gamer reached out to Microsoft for a response but the Redmond-based giant had nothing to share. However, the move doesn’t surprise us given Microsoft’s “gaming on Windows 10” push.

An annoying malicious link causes all iPhone devices to malfunction, a software update is expected to counter the issue

Every now and then, Apple Inc.’s (NASDAQ:AAPL) iOS firmware faces a bug-related problem which causes a temporary misbehaving of devices. For example, around two years ago, the firmware faced the notorious “effective power” bug, and since then we’ve seen a number of issues prevalent.

It’s been discovered that playing a .mp4 video in Safari on an iOS-running device will affect it to malfunction, slowing it down to a crawl, and finally, freezing the device totally. We won’t be providing the malicious link here, for obvious reasons. But do take our words seriously, the malicious link will essentially overload your iOS device making it unstable.

As of now, it is still not clear what is the root cause of the issue. The likely reason however might be that the .mp4 video is corrupted, and when played, the firmware is not sure how to handle the corrupted video properly. The flaw is not specific to a certain firmware. As reported, an iPhone device running on an iOS as low as iOS 5 incurs the problem initiating the device to overload, freeze, and then, ultimately, making it unstable.

Fascinatingly, with the newest firmware iOS 10.2 beta 3, if an affected iPhone is let to run for a long time, it will shut itself down automatically. And an indefinite spinning wheel will be displayed on your device (same as in normal circumstances, when the shutdown process if triggered manually).

If a friend of yours sends you the malicious link for the sake of fun, and you fall for it, there is a simple hands on approach to counter the issue. Giving your device a hard reboot counters the problem. For any iPhone user, other than iPhone 7 users this is the way to go. iPhone 7 has an innovative non-mechanical Home Button, and in order to reboot users will have to long -press the Volume Down button and Home Button simultaneously.

At the moment, there aren’t any long-lasting effects with the viewing of the video on Apple’s devices. And it is expected from the Cupertino giant to come up with a fix soon in an upcoming firmware update. Till then, it is advised to all iPhone users to keep an eye out for the malicious link and not fall for it.

The Country Caller takes a look at why oil was trading high yesterday

The oil industry had a little cheer on Wednesday as crude oil futures traded in the green. West Texas Intermediate (WTI), the US benchmark for crude oil, up 2.80% at $45.91 per barrel. The global benchmark for crude oil, Brent Crude, was also doing quite well at the same time as it was up a decent 3.45% at $47.09 per barrel.

The rise in crude oil prices comes following the release of the US crude inventory data by the Energy Information Administration (IEA). In the latest inventory data release by the EIA, crude inventories dropped by 3.4 million barrels. The drop came as a major shock and surprised the analysts who had forecasted the inventories to increase by 400,000 barrels.

As reported by the Wall Street Journal, Kyle Cooper of IAF Advisors believed the rising oil prices clearly show that investors are moving away from worries related to the oversupply. In addition to the drop in inventories, US production also dropped from 8.93 million barrels of oil equivalent in the prior week to 8.82 million barrels of oil equivalent this week.

Another factor that may have contributed to the decline in prices is also due to the Canadian wildfires which forced several companies to curtail their production of the Canadian tar sands. Nigeria has also seen a decline in production as a terrorist group calling itself the Niger Delta Avengers was attacking the facilities of foreign companies including Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) and Chevron Corporation (NYSE:CVX)

The avengers believe that more control of the oil fields should be given to locals instead of the foreign companies.  The Nigerian crude oil production, as a result, has fallen to its lowest since 1995.  The United States Oil Fund LP (ETF) (NYSEARCA:USO) was also up 3.18% at $11.34 and United States Brent Oil Fund, LP (NYSEARCA: BNO) was also up 3.94% at $14.51 as of market close yesterday.

Despite the recent recovery, in the long-run oil prices can slide once again. Saudi Arabia has changed its policy and decided to pump more crude than ever. Following a recovery of the wildfires in Canada and in Nigeria, production may stabilize once again and fall again.