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March 2019

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Low interest rates are to stay for longer as Citigroup also warns against the BoE cuts

Long-term outlook for the banking industry in the UK does not seem lucrative as Deutsche Bank AG (USA) (NYSE:DB) downgrades Royal Bank of Scotland (NYSE:RBS) and Lloyds Banking Group PLC (ADR) (NYSE:LYG) given the long period of lower interest rates, according to the Financial Times.

Both bank stocks plunged on the downgrades as the Deutsche Bank analyst, David Lock, expects the year-over-year earnings to decline even further. RBS dropped 4.1% while Lloyds slipped 2.2% on Monday. Moreover, FTSE 100 plummeted almost 0.2% after a huge rally from the beginning of September. 

With lower interest rates for prolong period of time, the UK banks are on a survival mode looking to restructure their business models by selling the unwanted assets and improving their return on equity. Even after the Brexit shock, the UK bank stocks rebounded impressively after a two-day market plunge. RBS stock lost more than 20% of its value, while Lloyds stock slipped almost 17%. The investors and analysts still question for how long the rebound will last.

Mr. Lock outlined a few threats to the UK banks in his research note, which included “lower growth, higher cost of risk, regulatory change, [as well as] greater litigation, conduct and restructuring charges than forecast.”

According to Mr. Lock, RBS is the most vulnerable bank in the UK as he recommends Sell on the stock by expecting a downside of 15% at 170p. The bank is going through pretty challenging economic environment as they have already implemented deep cost cutting and have less room to further cut down cost.

Earlier this month, Citigroup stated that the expansionary monetary policy by Bank of England would have detrimental affects on the UK banks’ earnings. European banks look to survive in similar monetary policies by the European Central Bank, as growth remains the issue in Europe.

European and UK bank stocks are under immense pressure as the conditions are challenging with gilt yield and interest rates at their record lows. However, it is a testing time for banks to survive under such conditions. The conditions are expected to remain challenging for longer till a cyclical change drives the markets towards a more positive note.

Not that Internet Explorer is the most effective browser out there; it is in trouble as Google Chrome is gaining in popularity

There are a lot of people who claim that Internet Explorer is not the best browser out there. While that may be true, it is by far one of the most popular. It is important to note that Internet Explorer is available across almost all platforms and devices. But its days as being the most popular browser may be numbered, as Microsoft Corporation (NASDAQ: MSFT) has focused all of its efforts on its latest internet browser, Edge, instead of Internet Explorer.

Google Chrome is coming real close to Internet Explorer due to the fact that users are moving towards Edge. Additionally, since Chrome is hyped to be the most used browser out there, this too helps it in overtaking Internet Explorer.

When taking a closer look at statistics, Google Chrome has control of 39.09% of the market, while Internet Explorer has a total share of 43.4%. For now Internet Explorer may be leading the market, but statistics also show a drop in the usage of the browser, by 1.39% to be more precise. At the same time, Google Chrome’s market share has increased by 2.53% in a short amount of time. If things continue to go the way they are, there is no denying the fact that Chrome will overtake Internet Explorer without any hassles whatsoever.

All in all, Google Chrome is undeniably the most user-friendly web browser, and a lot of developers have moved to the platform to build new apps and extensions for it, which is not the case for Internet Explorer. This alone should explain how and why Chrome will eventually outdo its competition in the months that follow.

The new Secretary of State is to come across challenging questions from senators at the confirmation hearing due this week

Although Rex Tillerson, former CEO of oil producer Exxon Mobil Corporation (NYSE:XOM), has secured the governmental position of the Secretary of State for the US, having been the favorite pick of new President elect Mr. Donald Trump, times are not going to be easy for the business tycoon.

The new Secretary of State is to come across challenging questions from senators at the confirmation hearing due this week. The hearing that could go till Thursday has no official and formal date set up in stone till now. The hearing is to take place at the Senate Foreign Relations Committee under Sen. Bob Corker (R-Tenn).

Mr. Tillerson securing the office would be a rare sight, the Country Caller believes. This is because the business tycoon has a large presence across the globe and has never served in the government in the past. However, his exposure to business deals internationally has won him numerous accolades, contributing to his selection by Mr. Trump for the governmental position. His close ties with foreign countries also played a major part behind his selection.

Having praised him largely, the former CEO of XOM is to be loaded with questions regarding his close bond with Russia especially his close proximity with Russian President Valdimir Putin. Both Democrats and Republicans including Lindsay Graham (S.C.) have had concerns over this matter.

Furthermore, Exxon headed by Mr. Tillerson since a long time has been seeking if the climate change issue is real and if the burning of fossil fuels are the main cause behind it. Reports, on the contrary, show that the company knew about the risks of climate change since the 1970’s. It shall be noted that Mr. Tillerson was the driving force behind the company stating that it is in fact the humans which are the main reason behind climate change. With such contradictions with the environmentalists, Mr. Tillerson’s journey in the government would not be quite as easy.

Tesla officially confirms via email statement that it is increasing its production plans to reduce waiting time for Model 3 customers

Within 72-hours, Tesla Motors Inc (NASDAQ:TSLA) received far more reservations as for its most important, affordable vehicle, the Model 3, than the number of overall Tesla vehicles on road. Elon Musk’s dream of offering a Tesla for a common man is coming true and to ensure that there is no production hiccup in the future, the automaker is boosting its production plans.

Last week, Mr. Musk tweeted that the company will surely reconsider its production plans, following the electrifying revolutionary waves around the globe. By the end of Saturday, the reservation list soared to 276,000, representing $276 million in deposits and $11.60 billion worth of backlog.

According to Electrek, Tesla confirmed late Wednesday via an email full-statement that the company is currently upgrading its production plans to reduce waiting time for thousands of Model 3 reservations, after seeing continuous increase in Model 3 pre-orders.

Tesla officials stated that it established the record for the world’s highest single-day sales of any product ever, when reservation numbers climbed to 180,000 in the first 24 hours.

“More importantly, we took a huge step towards building a better future by accelerating the transition of sustainable transportation,” Tesla stated in the email, implying that the Model 3 is a major step forward towards its long-term mission.

The Model 3, like its predecessors, offers superior range, high performance, far more utility than an internal combustion engine (ICE) vehicle, and its architectural designs give it the leverage to be the safest vehicle in its category. The $35,000 vehicle can accelerate 0-60 mph in less than six seconds and give range of 215 miles per charge. It will come with Autopilot capability and Supercharger hardware.

Mr. Musk previously said that he would update full-week reservation number, presumably by the end of Wednesday; however, there has been no word on that up till now. The company urged its potential customers to reserve Model 3 as soon as possible. This is something essential for the US customers since the $7,500 federal tax credit will expire once sales hit the 200,000 limit.

Recent report shows that Tesla has not been quiet with its production activities. Its officials are expected to meet French Energy Minister by next week for a potential deal over factory space at yet-to-be closed oldest nuclear plant of the country.

Meanwhile, Tesla is searching for a production partner in China after reportedly finding a location in Suzhou. These production facilities are aimed for large-scale production or simply for Model 3.

 

Utah House of Representatives introduces a law which excludes property purchases before applying for dealership permit

Tesla Motors Inc. (NASDAQ:TSLA) invested $3 million to construct its first Utah showroom in South Salt Lake City to fulfil the state’s requirement of dealership application permit. Yet, it faced back-to-back defeats against the Utah Automobile Dealers Association (UADA) in Senate on direct sales.

The Salt Lake Tribune (SLT) reported that the Utah House of Representatives urged last week that it was unfair for the young electric vehicle maker (EV) to spend millions of dollars on a showroom and then getting nothing out it. Therefore, the representatives passed a bill (HB18) with 73-0 votes, changing the requirement for applying for dealership permit.

Representative Kim Coleman (R-West), who introduced this bill and the Tesla bill (direct-sales) last year, said that potential dealers will not require buying a property before applying for the permit, if the bill is passed by the Senate as well. SLT quotes Ms. Coleman: “That has been part of the process that was require.”

Pointing toward Tesla’s $3 billion investment in the Salk Lake City dealership, she added: “That essentially became the highest application fee ever.” The proposed legislation states that applications will have to carry out all the required steps, except purchasing property to get a “provisional permit.” After safely finalizing the purchase property, dealers will get a “final permit.”

State lawmakers have killed the Tesla bill twice in the Senate over the last two years, taking the UADA’s side that Tesla is violating state laws which require car manufacturers to use franchise dealers to sell its vehicles to the public. The company, however, follows a direct sales approach which mainly involves educating customers and offering test drives, rather than making actual car sales.

After going through another setback, Tesla took the matter to the Supreme Court, where it is battling with car dealers and state officials for misusing the law created to protect dealers and not completely ban car manufacturers. It seems like judges are more inclined to give the decision in favor of Tesla.

The series is rumored to ditch the modern settings and revisit World War 1

Electronic Arts confirmed earlier this year, that a new Battlefield game is currently under works at DICE. Information from the company’s quarterly earnings report revealed that the next Battlefield game will arrive in time for Holiday 2016. While we have no official details of the game, it was recently spotted by a Twitter user “Thrillho” who uncovered a listing for the game on a German website. Check out the snapshot of the listing here.

The listing placed “Battlefield 5” for a release date of October 26 for PlayStation 4, Xbox One and PC. What was interesting was the part where it said “Mehrspieler Taktik Shooter im 1. Weltkrieg”, which translates to “Multiplayer Tactical Shooter in World War 1”. It seemed odd that Battlefield would go back to 1914 after giving fans an extensive exposure to modern-day setting.

We have grown so accustomed to rely on things like UAVs, Night Vision scopes, Jets and other vehicles as part of our gameplay that going back from using such gadgets and much faster vehicles will feel a difficult change. That is not to say that a World War setting can’t be enjoyable, but imagine going back to a period where you had no internet and see how that idea feels.

Fans have often expressed their love for a World War setting from time to time, and with nearly all first-person shooters in the market and those coming out in the near future have a modern-day setting, it could very well give the next Battlefield a distinct advantage.

Even though the listing explicitly calls the title “Battlefield 5”, I’m not ready to call it that just yet. This feels more like a spin-off in the franchise instead of a sequel to Battlefield 4. Electronic Arts had done this before the launch of Battlefield 3. Three titles were released after Battlefield 2 that were not sequels. A lot of fans are speculating (and hoping) it is not Battlefield 5.

I have spent countless hours in Battlefield 4 and I have grown to carry a distaste for any setting that is not present time. The next Battlefield is a blind purchase for me, but if it decides to go back to a vintage era, I will wait until I’m fully convinced. To each his own, I like a modern-day setting and I’m again not alone on this. There is one thing I have observed thus far. Not everyone likes a World War setting, but everyone likes a modern one. It would an opportunity wasted in my opinion if DICE does not have everyone on-board with Battlefield 5, assuming the next game is indeed called that and is set during World War 1.

Electronic Arts have already announced their plans to host their own event outside E3. I suspect that the publisher will at least release a trailer for the next Battlefield in the coming months before finally demoing the gameplay live on-stage. Since multiplayer is the primary focus of Battlefield series, expect a beta sometime in September.

 

Exxon has helped revamp some production in Nigeria

A positive development came for Nigeria on Wednesday as the world’s largest integrated oil and Gas Company by market capitalization, Exxon Mobil Corporation (NYSE:XOM) announced that it was ramping up production in the country. As reported by Reuters, the company has managed to revamp production in south eastern Nigeria of Quo Iboe crude oil.

The company, on Tuesday, has managed to reach production of around 213,000 barrels of oil per barrel day. Production on Wednesday showed another improvement as it went to 250,000 barrels per day. Exxon Mobil, in the last week, suffered considerably as a drilling rig damaged the company’s pipelines causing further declines in production.

Nigeria’s production is at the lowest since 1995. According to the Nigerian Petroleum Minister, Emmanuel Ibe Kachikwu, the production in the country has cut by 800,000 barrels per day. Production overall has fallen from an average of 2.2 million barrels per day to 1.4 million barrels per day. As reported by Newsweek, Mr. Kachikwu regarding the issue and militant attacks has said that: “We are going to work hard to see how we will get these issues resolved and get our production back.”

Nigeria, a member of the Organization of Petroleum Exporting Country (OPEC) and a major oil producer has come under attacks and threat by Niger Delta Avengers. The Avengers are a terrorist group that is unsatisfied with foreign companies tapping the country’s crude oil reserves. The group is continually targeting the operations of foreign entities including Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) and Chevron Corporation (NYSE:CVX).

This isn’t the first occasion where Nigeria has been a victim of such attacks. The country has been fighting with terrorist groups since mid-2000s. The governments in the past have managed to curb activities of terrorist groups by giving them subsidies to give up arms. But the current President, Muhammadu Buhari, has managed to cut these subsidies by 70%. This is, thus, causing problems in Nigeria.

Piper Jaffray restates its Buy rating on Acadia Pharmaceuticals, in advance of its NUPLAZID drug launch. The Country Caller discusses why

In a note issued to investors on Thursday, Piper Jaffery’s analyst Charles Duncan maintained his price target of $44 on ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) stock. He sees high growth potential for company, after the launch of NUPLAZID drug, which aims to treat people suffering from Parkinson’s psychosis. Piper Jaffery’s price target indicates an upside potential of almost 34% on company’s stock, according to its last closing price $32.84.

Duncan based his positive insight on a recent development of pharmaceutical giant, which is its upcoming NUPLAZID. The drug is designed specifically to deal with Parkinson’s disease and for the time being, it is only suggested for “highly disruptive patients.” The drug is sure to gain patients’ recognition, as it does not interfere with their dopamine medications, unlike traditional anti-psychotic drugs.

The risks and benefits related to NUPLAZID were discussed in a webinar held by Michael J. Fox Foundation. The interactive session between patients and doctors revealed a great demand for the biopharmaceutical’s candidate drug which is an efficient cure for diseases like Schizophrenia, Alzheimer and Sleep disorders.

The Street currently has a mean target of $45.70, which suggests a 39.20% upside potential on the $3.8 billion’s stock. Piper Jaffery reiterates a “Buy” rating for the pharmaceutical giant. According to the data on FactSet, 9 out of 10 analysts covering Acadia’s stock states a “Buy.”

The company strives to persuade a federal judge to shut down Massachusetts investigation, accusing the state of violating First Amendment rights

While the negligence for accounting for climate change threats by Exxon Mobil Corporation (NYSE:XOM) are talk of the energy market, it shall not be ignored that the oil company’s negligence is nothing new. Scientists at Exxon were fully aware of the company’s fossil fuels burning since 1970s, placing reiterated warnings to the company that the operations would largely emit greenhouse gases – a major cause of global warming that not only hampers human health, but the entire planet.

As recent as last year, investigations by the Inside Climate News concluded that Exxon has made internal calculations as to how incorporation of climate change policies would impact the business model of the company. For example, due to the extinction of the polar ice caps, Exxon’s operations in the Arctic could be impacted dramatically consequently.

The company quite cleverly handled the costs and benefits of handling climate change. It has repeatedly argued that it has in fact provided adequate disclosures regarding climate change in the past and the allegations by green groups and regulators are nothing but a mere conspiracy against the largest U.S oil producer. However, it cannot be ignored that for years, Exxon continued to sell company’s shares to investors without recognizing hazards to world from burning of fossil fuels. Offshore drilling activities of the company are again a major threat to the marine life.

To the many subpoenas launched against the company, Exxon has been responsive and is making efforts to convince a federal judge to shut down Massachusetts investigation, accusing the state of violating first Amendment rights. Now, to what extent the federal judge can intervene in the Massachusetts investigations, is a matter of legal wrangling. Lastly, with the selection of the company’s CEO Rex Tillerson as the Secretary of State, Exxon’s climate change denying disinformation campaign requires public accounting immediately.