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December 2018

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The shares of the bank are rising following strong jobs report

Bank of America Corp (NYSE:BAC) was successful in beating the Street expectations when it posted second quarter earnings for fiscal year 2016. Despite this, several questions were raised against the bank regarding its sustainability. It has cited fears of violence, regulatory issues, US election and Brexit to affect its business potential, business plans, and changing consumer sentiments. As a result, the bank has never been able to get rid of the steep discount on its book value since the Great Recession. Due to this, the shares of the bank have always received mixed opinions in the market.  

Despite all these issues, the bank has worked its way out of the regulatory issues, maintaining a strong balance sheet and a growing book value. Investors, however, resisted from investing in banks as their revenues and earnings were subject to interest rates which had been kept quite low by the Federal Reserve. This was done to ensure the health of the US economy.

However, the US employment report was released on Friday, August 5 following which the Feds have indicated that they were tempted to raise the interest rates by September FY16 or later this year. They have not taken a prompt decision as the consumer spending patterns are still uncertain, despite the bank’s result posing a stable market outside the energy sector. This is because the automobile sales have been extremely disappointing and people are concerned about auto-loans.

Investors’ expectation of interest rate hike in near future has increased significantly. This is putting increasing pressure on the Feds to raise the interest rates. Due to this, $159.63 billion bank’s stock has rallied on the back of this strong jobs report. The stock is expected to record all-time highs as the economy sets to show good momentum. It is expected that a good labor market would start pulling more and more people back in the workforce. The economy would continue to become stable for as long as consumers continue spending in the future.

Having said this, it is understood that these things would take time to materialize. The North Carolina-based bank is already trading up 3.94% since market opened on Friday, August 5. However, this has not reflected upon the year-to-date performance as the bank is trading down 10.58% YTD through Friday. This is at par with competition, Citigroup Inc. (NYSE:C) which is also trading down 11.65% YTD. Nonetheless, there is hope as the market indexes, Dow Jones and S&P 500 are performing better and are trading up 6.41% and 6.79%, respectively, on YTD basis.

The shares of the bank are traded at a daily range of $14.75-15.06 and within the 52-week range of $10.99-18.09. The total shares outstanding for the $159.63 billion company are 10.20 billion, out of which 120.94 million are traded in active market hours.

Investors have hope after strong employment figures issued by the labor department of the US, thus, they maintain a bullish stance over the stocks of the bank. Analysts at FactSet Fundamentals have issued 21 Buy, six Overweight, and six Hold ratings on the stock. The 12-month median price target is set at $16.95, 12.62% up since the market closed on Friday, August 5.

Microsoft Surface Book 2 is expected to release in early 2017

Microsoft Corporation (NASDAQ:MSFT) released Surface Book last year and it was touted as the next big thing in the laptop market. The Surface Book came with top of the line features that included a revolutionary detachable screen, Windows 10 Professional, and Surface Pen, which made it one of the best devices released in 2015. Previous Surface Book was not without faults, which is where the next generation Surface Book comes in to rectify the shortcomings of its predecessor model.

The biggest fault with the Surface Book was related to its dynamic fulcrum hinge. There would appear a gap when the device was closed. Another major concern with the device was its poor battery life that made it difficult to justify the high price tag associated with the device. Fortunately, Microsoft is highly rumored to have designed its next generation Surface Book with aim to fix all the issues related to its predecessor. Multiple reliable rumors report that the tech company will release Surface Book 2 in early 2017, along with the next generation Surface Pro.

As for the specifications, Surface Book 2 is rumored to be a gamer-friendly device, which will be able to support a few Xbox exclusive titles that Microsoft aims to make compatible with the device. Intel’s seventh generation Kaby Lake processor, which will power the 4K display screen, would power the device. It is anticipated that the device would retain the 13.5-inch display screen of its predecessor model but will offer greater resolution of 3840 x 2160.

Surface Book 2 should feature an improved hinge, which will allow its keyboard to be easily detached from the device. Reliable sources speculate that it will offer an improved battery life over its predecessor as well. It will also offer super-fast charging through USB Type-C port. Lastly, Microsoft has upgraded Surface Pen for Surface Book 2.

If the rumors are true and Microsoft has fixed all the issues with its original Surface Book, then it could turn out to be one of the best laptops ever released in the market. However, it is possible that it will be a bit pricier than its predecessor model due to the improvements that it offers. It is expected that it would retail at around $1,700 once it is officially released.

Ford to enter the EV race with plans to take on Tesla Model 3 and General Motors’ Bolt EV

After struggling in the competitive automobile industry for nearly a decade, Tesla Motors Inc (NASDAQ:TSLA) has managed to convince automakers to enter the electric vehicle (EV) market, successfully making such vehicles mainstream. Apart from General Motors Company (NYSE:GM), the number 2 US automobile company, Ford Motor Company (NYSE:F) has announced plans to enter the electrifying race.

Bloomberg reported that the company is considering launching a long-range EV capable of driving at least 200 miles per charge, taking on Tesla Model 3 and Chevy Bolt EV.

During the 1QFY16 earnings call, Ford CEO Mark Field said: “We want to make sure that we’re either among the leaders or in a leadership position. When you look at some of the competitors and what they’ve announced, clearly, that’s something we’re developing for.”

However, the executive did not reveal the timeline for the vehicle’s launch. While the Bolt is expected to hit American roads by the end of this year, Model 3 will likely reach market in the following 12 months.

Ford joins the expanding area of carmakers striving to convince consumers that their battery car will not run out of power and strand them. Tesla CEO Elon Musk has vowed that his $35,000 vehicle will be able to travel at least 215 miles per charge, due to its unique design and aerodynamics. Following the Model 3 unveiling, GM upped its game and said that the Bolt will be able to provide range of over 200 miles. Even Nissan has been working on the next-gen LEAF which will hit the market in the near future.

Ford has been tracking Tesla for years. It not only purchased the Model S for reverse engineering and test. Recent reports show that it paid $55,000 extra to get hands on Tesla Model X Founder Series for the same purpose.

The next PlayStation is still very much the path forward for Sony

The arrival of PlayStation 4 Pro will mark a mid-generation upgrade for PlayStation 4, Sony’s fourth-generation gaming console. This new strategy from Sony has left fans wondering if there will be a PlayStation 5. Microsoft Corporation (NASDAQ:MSFT) is following the same strategy with Project Scorpio, which is coming out in Holiday 2017. Microsoft calls the move as “Gaming without Generations”.

The gaming landscape is now experiencing a mid-generation upgrade hardware cycle that hasn’t been the norm. Obviously, due to several implications, there have been speculations that console space will see incremental upgrades going forward, but Sony doesn’t believe so. Mark Cerny, Lead System Architect for PlayStation 4 and PlayStation 4 Pro, doesn’t believe that the upcoming console’s upgrades mean a generational leap (via Eurogamer). According to Cerny, upgrades to GPU power, change in CPU architecture, and increase in memory are the foundations of a new generational leap.

PlayStation 4 Pro, on the other hand, has an updated GPU with more than twice the performance of current model, but it retains the same amount of GDDR5 memory and the same 8-core Jaguar CPU with a boost in clock speed. Cerny also recalled a situation where he had to brief developers about PlayStation 4 using a 434-page presentation – something that introducing PlayStation 4 Pro to the developers did not entail.

With the rise of 4K technology, Sony saw an opportunity to introduce a console that can offer a 4K gaming experience to those who have invested in a higher resolution display. Sony’s console is fundamentally different from Microsoft’s Project Scorpio. While Project Scorpio pursues native 4K gaming, Sony implements special rendering techniques that require a lot less GPU juice but delivers results that are very close and almost indistinguishable from native 4K image.

Teva Pharmaceutical’s generic sales are not disappointing

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) reported its third quarterly results before the opening of the market today. Following the earnings, the stock lost a major chunk of its value and traded down by about 7.56%. Guggenheim came to the rescue of Teva Pharmaceuticals following the Q3 print, and said that the investor reaction is overdone and they are missing the bigger picture. The company’s general sales have indeed shown some signs of decline but it doesn’t in anyway spell doom for the stock or justify the recent sellout since the open.

Teva Pharmaceutical’s results for the quarter were quite mixed and the company was able to meet the profitability estimate but fell short of the topline. The revenue for the quarter was reported to be $5.56 billion below the consensus estimate of $5.75 billion. It was the highest reported by the company in the past few quarters. The growth rate was also quite handsome and was found to be 15.8%. The earnings per share for the quarter amounted to $1.31 and was slightly ahead of the consensus of $1.29. The analyst believes that the earnings report of the company is quite handsome and that the execution of the business during a tough quarter is quite underappreciated.

Guggenheim analyst Louise Chen expects Teva to make positive guidance revisions and some expansion in the company’s multiple in the near term. Ms. Chen believes that the upside potential of the stock far outweighs the downside risk, and the stock will likely appreciate in the days to come. The company’s pipeline is also quite strong and provides additional support to shares.

The analyst reaffirmed Buy rating and $80 price target. The ratings from 28 analysts are 10 Buy, 10 Outperform, and 8 Hold. The stock traded at a price of $37.87 and lost 7.71% since the open.

Blizzard has added competitive mode for Overwatch on the PS4 earlier than planned; it is now available on the PC and Xbox One as well

Activision Blizzard, Inc.’s (NASDAQ:ATVI) Blizzard Entertainment intended to deliver Competitive mode on the PS4 and Xbox One later this week. However, it has released the mode ahead of schedule. Making it available on both major consoles as well as the PC has made it a trifecta. There are tons of other updates in the patch along with the Competitive update including bug fixes and an added weapons section.

Competitive play allows players to play a more serious game where they rank up and compete on a seasonal basis. That’s the official definition of the term by Blizzard Entertainment anyway. Players are only given access to the mode if they have reached level 25 or higher (upon reaching that level, a button appears below the main menu “Play” button). A group of players can join the gameplay and play with each other but only if they meet certain criteria such as being within 50 levels of their fellow players. At some point during each season, a scoreboard will show the top 500 players on each platform.

Changes have also been made to characters like McCree and Widowmaker in regard to the damage they can do. In short, their ability has been decreased. While McCree is less effective against tank characters, McCree is still able to deal with characters like Tracer. Widowmaker has been given the same treatment since she had been described as “unstoppable” when handled rightly. Her base damage is now 12 instead of 15 and the cost of her InfraSight Ultimate ability has been raised by 10%.

A slew of other features have been improved and introduced. Aim assist strength can now be varied (default set to full strength) and there is a new Legacy controls feature. As we have already mentioned, a weapons section has been added, but the ability to avoid players has been disabled. Players can no longer by resurrected on out-of-play environments on Ilios, and McCree has been added as an AI hero in “Practice vs. AI,” “Play vs. AI” and Custom game modes.

There’s some bad news too though to go with this. It turns out that the Competitive game mode has a bug of its own. It seems that the mode is punishing players “unjustly.” If your game disconnects during a match you might or might not receive a penalty. This could result in you losing the game, even after you’ve already won! This is especially frustrating, because to get in to the Competitive mode you need to play ten placement matches which determine your current skill level depending on how many you win. In response to this, Director Jeff Kaplan has posted on Blizzard Forums that there will be an update coming next week to fix this problem.

Blizzard sues Cheat Maker over Copyright Infringement

In other news, Blizzard Entertainment has sued Bossland GMBH, a German cheat maker who has made cheats for Diablo 3,World of Warcraft, and Heroes of the Storm in the past. Blizzard has accused it of copyright infringement, violating the DMCA’s anti-circumvention provision and unfair competition.

Chinese accessory vendors presented the Lightning audio adapters, which fueled the fire for this rumor

Apple Inc. (NASDAQ:AAPL) could include the 3.5mm EarPods and Lightning to 3.5mm adapter in the box set with the next flagship, iPhone 7, according to a report published by Japanese tech site, Macotakara.

Rumors have been flying everywhere regarding the headphone jack on iPhone 7, with some sources claiming that the next flagship iPhone will do away with the vintage audio component, while others have stated that Apple wants to make the transition to Lightning audio solutions, but iPhone 7 will come too soon for that. The latest rumors from Macotakara suggests that Apple remains undecided on this front and is considering to ship the usual 3.5mm EarPods along with the Lightning to 3.5mm adapter.

The adapter would allow the users to plug in their 3.5mm headphones into the Lightning port, and if Apple switches to Lightning-only audio later, they would have an official adapter from Apple on their hands already. Moreover, the space previously occupied by the 3.5mm jack would be filled by placing additional speaker holes at the sides of the Lightning port. Macotakara’s report also states that a 256GB storage variant of the iPhone 7 will also be launched this September.

Shipping the next iPhone with both – the 3.5mm EarPods and the Lightning adapter – simply reeks of indecision and inconclusiveness on Apple’s part. If the transition is to be made to Lightning for audio solutions, Apple would want to lead the rest to that transition. Also, including an accessory like the Lightning to 3.5mm adapter is very ‘unlike’ Apple, and even if the company does manufacture the adapter, the chances of it being included with the iPhone are slim.

In either case, Apple would still continue to produce 3.5mm EarPods for the 4-inch iPhone SE and previous generation gadgets.

Consumer Reports takes out Tesla Model X for a spin and gives its view on the SUV’s highs and lows

Tesla Motors Inc. (NASDAQ:TSLA) set a new benchmark in the luxury sedan segment with its Model S that became the US top-selling large sedan, as well as the Western Europe’s best-selling luxury car last year. The disruptive automaker wanted to accomplish similar level in the luxury SUV segment with its Model X, but experts believe that the falcon-wing-door vehicle has been overdone with high-tech gimmicks.

Consumer Reports (CR), the influential vehicle-testing firm that once rated Model S as the best vehicle ever tested and later downgraded it to worst rating, has always taken its younger brother with a pinch of salt. It has assaulted the all-electric for several reasons, including its in-car electronics, latches, locks, power equipment, and rear doors.

In the third quarter of fiscal 2016 (3QFY16), Tesla management said that there has been a “dramatic improvement” in Model X reliability, as the vehicles issues have reduced by 92% over the last 12 months. After this, CR tested the Model X 90D and its review remained somewhat the same.

CR noted: “Beyond the brag-worthy magic, the all-wheel-drive Model X 90D largely disappoints.”

The car-rating firm said that the SUV is “fast” but still comprises “faults.” While its falcon-wing doors are still prone to stopping and pausing, its second-row seats cannot be folded to create additional cargo space. Moreover, CR thinks that its gigantic panoramic windshield is “neat,” but it is not good enough to prevent brightness on a sunny day or reduce wind noise.

On the positive side, the Model X 90D can accelerate from 0-60 mph in just 4.9 seconds, even without the ‘Ludicrous’ option and despite weighing 5,400 pounds. While accelerating more like a “sport sedan,” the SUV’s ride is too choppy and firm for a price tag of $110,000.

The organization also liked the vehicle’s front seats that are plush and roomy, as well as the third-row seats which are better off for children. It has remained critical on Tesla’s autonomous driving assistance system, the Autopilot, as it still sees some safety issues . The firm concluded: “In spite of its virtues, the Model X’s complexity, compromised functionality, and dismal first-year reliability suggest that it’s a car for early adopters eager to one-up their peers.”

Shares of the micro-blogging company continue to decline in the market, following increasing pressure from investors to consider buyout options

Twitter Inc. (NYSE:TWTR) shares continue to decline 21.73% year-to-date through Friday. This performance of the company is far from being admirable, as rival Facebook Inc. (NASDAQ:FB) continues to rise 21.44% YTD. Also, the market indexes such as Dow Jones alongside S&P 500 are trading up 3.79% YTD and 4.09% YTD respectively. This calls for much disappointment for the investors of the social media site, as earlier they were depending on the company’s shares to make a comeback using live streaming services.

Earlier in the news, the micro-blogger was reportedly seen to be working its way with Apple Inc. (NASDAQ:AAPL) to bring live streaming services to its customers. These efforts were undertaken to increase its consumer base using product differentiation. With this live streaming platform, the company would report breaking news and would serve as a platform for live commentary for different events.

In this regard, it has tied knots with NBA and others to bring live sports news to attract young customers. The San Francisco-based enterprise will be working towards making live commentary compatible with Apple TV. Both the companies can benefit from product differentiation and increased consumer engagement, leading to an increase in consumer base.

Moreover, in its efforts to retain consumers, Twitter with its recently launched Alexa app, will be making way for the lazy consumers who would no longer have to stroll down over their newsfeed but would instead get updates out loud. The app can read consumers mentions, timeline and other account-related information out loud for them.

However, these innovations and product differentiation are all expected to go down the drain because of increasing pressure from the investors for a merger or acquisition. The live streaming platform is especially likely to suffer the most under the increasing pressure.

The board meeting was expected to discuss buyout options, however, the results of the meeting still remain unknown. The company is not yet considering to sell itself, but investors believe that is the only way of saving the drowning boat.

The social site is working on curbing down its costs in order to make it more attractive to the buyers. It expects to cut costs using layoffs or selling underperforming segments, while the investors want this to happen due to its rising problems and declining consumer base. Twitter has also not shown any recent signs of improvement, let alone any signs of growth. Thus, it must come up with a solution soon to keep its investors interested, especially in the near term.

Despite declining stock prices, the company has a daily trade range of $17.92-18.82 and 52-week range of $13.73-31.87 alongside outstanding shares amounting to 707.73 million. Investors at FactSet Fundamentals recommend holding onto the stock and have reiterated seven Buy, 26 Hold, two Underweight, as well as four Sell evaluations for Twitter.

The average price target shows potential to decline by 7.79%, below the closing price of Friday as it has been set at $16.7. Therefore, it seems like the company has a lot riding on the results of the board meeting.

Tesla expands its partnership with Nordstrom and launches its second boutique at its SouthPark Mall location in Charlotte, NC

In June, Tesla Motors Inc. (NASDAQ:TSLA) started a pilot project with Nordstrom, Inc. (NYSE:JWN), opening a boutique/gallery at the specialty retailer’s location at The Grove in Los Angeles, CA. Both the companies planned to extend their partnership, if it helped them achieve their objectives.

Today, Charlotte Observer reported that Tesla opened its second gallery at a Nordstrom store at SouthPark Mall in Charlotte, NC, ahead of the busy holiday season. The move aims to allow holiday shoppers looking for high-end heels and neck ties to test drive a Model S or Model X, providing them an exceptional shopping experience.

After opening on Friday, a new gallery of 600 square feet inside the departmental store is showing Tesla’s premium model vehicles near the accessories section, the report said. Apart from taking test drives, customers can also learn more about Tesla’s EV technology.

The new Tesla gallery at the shopping mall will be operational at the same working hours as other Nordstrom locations, but it will not be open this Thanksgiving. Nordstrom has 121 stores in North America, as well as 200 locations of its subsidiary Nordstrom Racks. We might see more Tesla galleries in these locations in the near future.

Tesla VP of North America Sales Ganesh Srivats said that the company intends to offer a “Tesla experience” to Nordstrom customers, as customers of both the companies have the same standard of living. A customer cannot purchase directly from the location. Firstly, galleries are mainly for marketing purposes and stores are used for selling vehicles. Secondly, Tesla has the license to sell vehicles at just one retail location in Raleigh which can sell vehicles directly to customers. Here’s a snapshot of “The Tesla Gallery at Nordstrom South Park” on Tesla’s online map:

In May, the North Carolina Division of Motor Vehicles refused to lift the ban on Tesla which prevents it from selling vehicles directly to customers at its Charlotte-Matthews store, which also consists of a Service Center. The department said that there are at least three franchise dealers which can own and operate Tesla stores.

Thus, customers arriving at the SouthPark Mall must order their vehicles through Tesla’s website and collect delivery from its service location. Just like in Texas and Michigan, car manufacturers cannot sell their vehicles directly to customers. However, they could get an exception if it is for public welfare.