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‘Integrity’ of financial system at stake as $1.3b Westpac fine upheld: Federal Court

Federal Court judge Jonathan Beach has said the integrity of Australia's financial system depends on upholding anti-money laundering laws as he approved Westpac's $1.3 billion record penalty for systemic failures in its approach to financial crime.

Justice Beach said the penalty, which is the biggest in Australian corporate history, was appropriate for Westpac’s widespread breaches of the Anti-Money Laundering (AML) and Counter-Terrorism Financing Act, including its failure to report suspicious payments and conduct due diligence on its correspondent bank partners.

"Clearly the integrity of Australia's financial system depends upon Westpac and other major banks having first class, compliant, risk-based systems to address anti-money laundering and terrorism financing risks," he said on Wednesday.

Justice Jonathan Beach approved the largest fine in Australian corporate history in the Federal Court. Credit:The Age

"Financial institutions are an important line of defence in protecting the community and financial system … even minor or inconsequential breaches of the act have very serious consequences."

Justice Beach said Westpac accounts for a very significant portion of the payments made through Australia’s financial system and therefore a substantial fine was necessary.

Banks needed to ensure transparency of international payments to prevent financial crime, he said. "It’s obvious that money laundering is all about obscuring the origin and destination of funds."

The financial crimes watchdog AUSTRAC launched legal action against Westpac in November after the bank was found to have breached AML laws 23 million times, including a failure to report 262 customers linked to child exploitation.

Westpac has since made significant investments in bolstering its AML compliance by improving its digital systems and retraining staff. AUSTRAC's barrister Wendy Harris, QC, said Westpac had demonstrated it took AML compliance "very seriously" but only time would tell if this would be effective.

"Now of course the proof is always in the pudding," Ms Harris said. "You can have a system but there’s also the implementation of the system, obviously we don’t have a direct line of sight in that regard.”

Wendy Harris QC has blasted Westpac’s failures in the final hearing in the case against AUSTRAC. Credit:Alina Gozin’a

The Federal Court heard Westpac's failure jeopardised law enforcement's ability to fight crime.

"Westpac’s failures resulted in significantly less transparency in the flow of funds in and out of Australia," Ms Harris said. "They compromised the ability of law enforcement agencies to deal with and prevent unlawful activity, and they undermined the taxation system by denying important information to the ATO [Australian Taxation Office]."

Ms Harris cleared the bank's board of any wrongdoing but said management oversight of AML compliance had been inadequate.

"There wasn’t any deliberate intention to contravene the [anti-money laundering] Act. They did take steps to ensure Westpac complied," Ms Harris said. "But despite those steps, that oversight by [the] board and senior management was deficient in a number of respects."

The final hearing in the landmark case against Westpac comes after The Age and The Sydney Morning Herald revealed the lender maintained a correspondent banking relationship until 2018 with an offshore bank, Euro Pacific, that is now the subject of a major global tax evasion and money laundering probe. The investigation prompted senior academics from the University of Sydney and University of Melbourne to call for reform, including criminal prosecution for non-compliance and greater information-sharing between institutions.

Justice Beach said $300 million of the $1.3 billion fine was attributed to Westpac's failure to conduct proper screening of its international bank partners and he would have insisted a higher penalty if this breach was taken in isolation. "Contamination from the suspect practices of foreign correspondent banks and their customers must be avoided."

Westpac's lawyer John Sheahan, QC, reiterated the bank's "profound expression of regret" before pointing to the ongoing collaboration between Westpac and AUSTRAC.

"The bank also appreciates its failures were serious and they call for a serious penalty," Mr Sheahan said.

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Stock futures rise as stimulus talks continue, Netflix shares fall after earnings miss

U.S. stock index futures rose in overnight trading on Tuesday after White House Chief of Staff Mark Meadows said that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made "good progress" on stimulus talks, before adding that they "still have a ways to go" before an agreement is reached.

Futures contracts tied to the Dow Jones Industrial Average rose 91 points, indicating an 80-point rally at the open on Wednesday. S&P 500 futures traded 0.39% higher, while Nasdaq 100 futures advanced 0.4%.

Following Pelosi and Mnuchin's meeting on Tuesday, Meadows told CNBC's "Closing Bell" that the two will talk again on Wednesday, and that he hopes to see "some kind of agreement before the weekend."

Mnuchin and Pelosi's conversation Tuesday continued a desperate attempt to hash out an agreement before the Nov. 3 election. Democrats and the Trump administration have struggled for months to overcome fundamental disagreements over additional stimulus measures — including the dollar amount — as the economy continues to feel the burden of the coronavirus pandemic.

Stocks have been trading based on lawmakers' perceived progress — or lack thereof — and on Tuesday finished the session higher after Pelosi told Bloomberg TV that she's "optimistic" about a potential aid deal.

The Dow Jones Industrial Average finished the session 0.4%, or 113.37 points, higher. At one point during the session the 30-stock average had been up more than 300 points. The S&P 500 gained 0.5% to end the day at 3,443.12, while the Nasdaq Composite advanced 0.3% to close at 11,516.49.

"The back and forth political discussions on the stimulus deal and continued election uncertainty give us extra justification for short-term market uneasiness," said David Bahnsen, chief investment strategist at The Bahnsen Group, which oversees $2.5 billion in client assets. "Very few market actors actually doubt that some fiscal relief bill is coming. The question is purely when, and of what composition," he added.

A slew of companies reported quarterly earnings after the bell on Tuesday, most notably Netflix. Shares of the streaming giant slipped more than 6% after the company missed earnings estimates, and reported fewer-than-expected subscriber additions. On the other hand, shares of Snap jumped more than 23% after the company reported a surprise earnings beat.

Looking ahead to Wednesday Biogen, AutoNation, Baker Hughes and Abbott Labs are among the names set to report ahead of the opening bell. After the market closes Tesla will release its third quarter results, with CSX, Las Vegas Sands and Chipotle Mexican Grill also on deck.

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Bank of America shares 12 under-owned stocks likely to soar on earnings this quarter with investing conditions ripe for the picking

  • According to Bank of America's equity and quant strategy team, 18% of the S&P 500 index components are reporting earnings this week. 
  • The team examined eight different earnings factors and forecasted a 5% upside surprise for the S&P 500 this quarter.  
  • It also screened the S&P 500 for stocks under BofA coverage that are most likely to beat earnings expectations and under-owned by active fund managers.
  • Visit Business Insider's homepage for more stories.

With 18% of the S&P 500 companies reporting this week, third-quarter earnings season is ramping up and in full swing, according to Bank of America's earnings tracker. 

Savita Subramanian, equity and quant strategist at Bank of America, sees a bright quarter ahead for corporate America.

Subramanian and her team took into consideration eight different factors including:

  • (1) the economic surprise index
  • (2) the relationship between GDP and EPS
  • (3) dispersion of estimates
  • (4) top-down EPS forecasts
  • (5) the average post-Regulation Fair Disclosure third-quarter beat
  • (6) Bank of America analyst forecasts for the quarter
  • (7) the average beat when estimates rose into earnings, and
  • (8) early reporters' 11% plus average beat

Their conclusion is a 5% upside surprise for the benchmark S&P 500 this quarter. 

"With better macro data and strong results from early reporters, we forecast a solid beat this quarter of 5% or $34.50 (-18% YoY). A 46% bounce in average oil prices from 2Q, strong consumption and manufacturing trends, and a weakening USD all point to a healthy recovery in earnings in 3Q," she wrote in a research note on October 12.

However, the reduced benefits of stimulus and a surge in COVID cases spell a more cautious outlook going forward, she said, noting that current consensus points to earnings improving to -14% year-over-year in the fourth quarter. 

What to buy, what to sell 

Despite the overall negative earnings growth, there are still opportunities for investors to net positive gains. 

The team looked into EPS revisions, sales revisions, and guidance as well as the ratio of positive to negative surprises in the previous quarter for 11 sectors. 

The end result, which is displayed in the chart below, suggests that investors own consumer staples and healthcare while avoiding utilities and energy stocks in the third quarter. 

Subramanian also points out that the earnings season marks a good time for stock picking. 

"For short-term investors, stock differentiation is heightened during earnings season, particularly the busiest reporting days," she said in the note. "This quarter, the busiest days fall the last week of October."

As such, the team screened the S&P 500 for stocks under the bank's coverage that are most likely to beat or miss earnings expectations. 

It factored in Bank of America's EPS and sales estimates versus consensus estimates, last quarter's results, and fundamental opinions from BofA analysts.

To further refine the screen, the team flagged stocks expected to beat earnings but are underweight by active fund managers. 

The 12 stocks are listed below in increasing order of active fund ownership. 

12. IPG Photonics Corporation

Ticker: IPGP

Sector: Information technology

Market cap: $9.83 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.35

 

11. Procter & Gamble Company

Ticker: PG

Sector: Consumer staples

Market cap: $361.32 billion

Relative weight (vs. S&P 500) in fund holdings: 0.35

10. CF Industries Holdings

Ticker: CF

Sector: Materials

Market cap: $6.29 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.37

9. Kimberly-Clark Corporation

Ticker: KMB

Sector: Consumer staples

Market cap: $52.56 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.43

8. Hologic

Ticker: HOLX

Sector: Health care 

Market cap: $17.41 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.44

7. CDW

Ticker: CDW

Sector: Information technology

Market cap: $18.73 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.55

6. O'Reilly Automotive

Ticker: ORLY

Sector: Consumer discretionary

Market cap: $34.77 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.57

5. Advance Auto Parts

Ticker: AAP

Sector: Consumer discretionary

Market cap: $10.77 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.63

4. Western Union Company

Ticker: WU

Sector: Information technology

Market cap: $9.12 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.69

3. SVB Financial Group

Ticker: SIVB

Sector: Financials

Market cap: $14.21 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.76

2. Deere & Company

Ticker: DE

Sector: Industrials

Market cap: $75.61 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.85

1. DuPont de Nemours

Ticker: DD

Sector: Materials 

Market cap: $43.64 billion 

Relative weight (vs. S&P 500) in fund holdings: 0.91

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13 Companies That Should Consider Stock Splits This Earnings Season

Investing in 2020 has been a wild ride. An 11-year bull market was chopped into an instant recession, only to find the stimulus outweighing the COVID-19 destruction enough that stocks managed to hit new highs again. One trend seen at historic highs that used to be very common in raging bull markets was stock splits. Splits are of course a gimmick, but the stock market usually rewards companies for splitting their stocks.

As a company’s stock would rise to levels that the company thought was becoming a high dollar amount, it would magically split its stock and double, triple or quadruple its share count by lowering stock prices by a similar amount.

While stock splits change nothing about the underlying fundamentals of a company, investors love splits, even though they should know it is just a mechanical function around an actual stock price. Splits do not affect revenues, net income, gross margin and market capitalization. Despite this, there is still a very strong argument that can be made showing just how much investors love seeing stock splits.

24/7 Wall St. has tracked two very high-profile stock splits of late. There are 13 additional stocks that easily could split their own stocks after seeing what happened.

The mighty Apple Inc. (NASDAQ: AAPL) conducted a four-for-one stock split, and that was its first since Apple’s seven-for-one split back in 2014. Apple was trading at $384.07 ahead of earnings and the split announcement, but the shares went on to rise more than 10% before coming back down to earth after the split. Tim Cook even suggested that he wanted to share price lower for more investors to be able to get access. So what if it marked a top in the stock. After all, it’s not as if Apple won’t be selling millions of more new iPhones in the coming years.

Tesla Inc. (NASDAQ: TSLA) had claimed that it wants its own shares more affordable for investors and employees, so it split five for one. Tesla’s stock price then jumped more than 10% to over $1,500 after the split was announced. Eventually, it got well above $2,000 before the dust settled. Its new price of $429.40 is down nearly 15% from its split-adjusted high of $502.49. Tesla was even able to use the hype and momentum of its split to raise $5 billion in a new stock offering, securing its future finances.

The inverse case of a stock split is the dreaded reverse split. That is when a company shrinks its share count and raises its share price by the similar amount. This rather proves that splits matter, even when all other factors remain the same. A reverse split generally is employed to avoid delisting from the New York Stock Exchange or Nasdaq. Reverse splits are often followed by a wave of short sellers betting this was a chance to sell more stock at a higher price.

24/7 Wall St. would never suggest that every single company with a high stock price needs to announce a split. That said, and after seeing how the hype did work, some stocks look and feel like they could use a split to further boost their shareholders’ attitudes. A stock split might even keep the excitement going after earnings.

Some companies may want to appeal to their broad base of customers with a share price adjustment based on the cost of their goods or services. Some companies may even view their own customers as perhaps the most ideal shareholders.

Many investors could argue that 50 or even 100 more companies should consider stock splits. This review focuses on the companies that are more widely traded and are also very well known. We have not suggested how much of a split should be seen, because every company is different. There is also a dark side of stock splits, which is detailed below.

Here are 13 other companies that should seriously entertain splitting their stocks. Some of these are not the so-called FAANG stocks and other high fliers. These all have considerably higher share prices. Key performance metrics have been included for each, along with some additional color.

Amazon Above $3,000

Amazon.com Inc. (NASDAQ: AMZN) was last seen trading at $3,200, and its 52-week range is $1,626.03 to $3,552.25. It has a $1.6 trillion market cap, and its stock has traded with a hefty price for some time, breaking above $1,000 in mid-2017 and then hitting $2,000 for the first time in mid-2018. In some ways, Jeff Bezos may have pioneered the trend of not wanting to make stock splits as fashionable as they used to be. Amazon pays no dividend. The history of splits shows that its stock split twice in 1999 and once in 1998, back before the 2000 dot-com bubble burst.

Alphabet/Google Still Above $1,500

Alphabet Inc. (NASDAQ: GOOGL) had recently been trading above $1,600, and its 52-week range is $1,008.87 to $1,726.10. It now has a $1.05 trillion market cap. Alphabet effected a split in 2014, with the creation of the dual classes of stock. Sadly, most investors today don’t know which Alphabet is which, and many still wonder why the company even bothered changing the Google name. Alphabet pays no dividend and likely will not for the foreseeable future. One issue that might make for a split, even if they don’t want to, is that it could face a government breakup.

ALSO READ: 5 Stocks May Be Huge Winners From Infrastructure Spending Coming in 2021

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Sensex rallies over 300 points in early trade; Nifty tops 11,800

Equity benchmark Sensex rallied over 300 points in opening trade on Monday tracking strong gains in HDFC twins, ICICI Bank and Axis Bank amid positive cues from global markets.

The 30-share BSE index was trading 322.40 points or 0.81% higher at 40,305.38, and the broader NSE Nifty rose 85.80 points or 0.73% to 11,848.25.

ONGC was the top gainer in the Sensex pack, surging around 4%, followed by NTPC, HDFC, Axis Bank, ICICI Bank, PowerGrid and Nestle India.

On the other hand, TCS, Tech Mahindra, Infosys and Sun Pharma were among the laggards.

In the previous session, Sensex closed 254.57 points or 0.64% higher at 39,982.98, while Nifty settled 82.10 points or 0.70% up at 11,762.45.

Exchange data showed that foreign institutional investors sold equities worth ₹479.59 crore on a net basis on Friday.

“Trade set up in India looks to be good for the day led by positive global cues,” said Arjun Mahajan Head Institutional Business at Reliance Securities.

Strong 2Q numbers and commentary from HDFC Bank are likely to be in focus, which can also create positive sentiment on banking, financial services and insurance (BFSI) counters, he added.

Bourses in Hong Kong, Tokyo and Seoul were trading on a positive note in mid-session deals, while Shanghai was in the red after the release of China’s GDP numbers.

China’s economic growth accelerated to 4.9% over a year earlier in the latest quarter as a shaky recovery from the coronavirus pandemic gathered strength.

The economy continued the steady recovery, China’s National Bureau of Statistics said in a report. However, it warned, the international environment is still complicated and severe. It said China still faces great pressure to prevent a resurgence of the virus.

Meanwhile, international oil benchmark Brent crude was trading 0.37% lower at USD 42.77 per barrel.

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Japanese exports declined at slower pace in September, Finance Ministry reports

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TOKYO — Japan's exports fell at a slower pace in September in a sign that trade damage from the coronavirus pandemic is easing, according to Finance Ministry data released Monday.

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The report showed Japan’s exports in September declined 4.9% from the same month a year earlier, better than the nearly 15% drop in August.

The nation’s imports fell 17.2% overall, compared with 20.8% in August.

JAPAN'S SERVICES SECTOR MARKET CONTRACTED FOR EIGHTH-STRAIGHT MONTH IN SEPTEMBER

Exports to China jumped 14% while shipments to the U.S. inched up 0.7%, in another possible sign of a gradual rebound. By sector, computer exports to the world surged nearly 45%.

Cars are parked to be exported at Yokohama port, near Tokyo on Sept. 29, 2020. The drop in Japanese exports diminished last month, according to government data released Monday, Oct. 10, 2020, underlining how the blunt of the trade damage from the cor

Japan’s export-reliant economy has sunk into recession, with three straight quarters of contraction through June, as the outbreak slammed business activity and stifled trade.

But a recovery in China, where COVID-19 emerged late last year, and recoveries in some other Asian countries are helping Japan regain momentum.

Prime Minister Yoshihide Suga, who took office a month ago, left Monday for Vietnam and Indonesia, where virus cases are relatively low, to drum up business and trade.

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His predecessor, Shinzo Abe, had tried to sustain economic growth with his “Abenomics” package of programs based on zero interest rates and curtailing deflation.

Suga, also from the governing Liberal Democratic Party, is expected to continue those policies.

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Asian markets kick off week higher on hopes of U.S. fiscal package prior to elections

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SYDNEY - Asian markets started higher on Monday, buoyed by hopes of a U.S fiscal package before the U.S. presidential elections next month and expectations of a coronavirus vaccine by the end of this year, though the mood was still cautious as infections jump.

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MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.26% for its second straight day of gains.

The index has risen in eight of the last 10 sessions amid a rally in risk assets buoyed by hopes of a coronavirus vaccine and expectations of a so called “blue wave”, which would see the Democrats claim victory in November’s elections.

AMID TENSIONS WITH CHINA, INDIA WARNS AMAZON, FLIPKART OVER COUNTRY OF ORIGIN RULE

Boosting overall sentiment, drugmaker Pfizer Inc PFE.N said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.

A man looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. Asian markets started higher on Monday, buoyed by hopes of a U.S fiscal package before the U.S. presidential elections next month and expectation

Japan's Nikkei .N225 climbed about 1% while South Korea's KOSPI and Australian shares .AXJO were up 0.7% each.

New Zealand .NZ50 was a tad lower after Prime Minister Jacinda Ardern won a second term at elections over the weekend, having risen over the week in anticipation of such a result.

E-Mini futures for the S&P 500 ESc1 jumped 0.5% in early Asian trading after House Speaker Nancy Pelosi said on Sunday she was optimistic legislation on a wide-ranging coronavirus relief package could be pushed through before the election.

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Ant Group Is Said to Win China Approval for Hong Kong IPO Plan

Jack Ma’s Ant Group Co. won a key approval from the China Securities Regulatory Commission for its listing in Hong Kong, paving the way for what could be the world’s biggest initial public offering, according to people familiar with the matter.

The Chinese regulator has given Ant a green light to seek a listing hearing with Hong Kong Exchanges and Clearing Ltd. as soon as Monday, the people said, asking not to be identified as the information is private. Ant has already won approval from the Shanghai exchange for its onshore listing.

The IFR reported the approval and hearing date earlier Monday. A representative for Ant declined to comment, while a representative for CSRC didn’t immediately respond to a request for comment.

The nod from China’s securities watchdog came later than expected, stirring speculation that Ant’s IPO was running into roadblocks. The company could raise about $35 billion in a dual listing in Hong Kong and Shanghai at a valuation of at least $280 billion, people have said.

Ant Group’s IPO could be the biggest in the world, surpassing Saudi Aramco’s record $29 billion sale. It also will mark a win for the Hong Kong stock exchange that lost many of China’s tech stars to U.S. listings.

Ant won’t seek cornerstone investors for Hong Kong, but will invite big backers for its Shanghai sale to mitigate price fluctuations, people familiar have said. The Hangzhou-based firm is planning to issue new stock equal to about 11% to 15% of its outstanding shares and split the float evenly between Hong Kong and Shanghai.

— With assistance by Lulu Yilun Chen, and Zheng Li

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What to Expect When American Express, Coca-Cola, Intel, Verizon and More Report This Week

Nearly a third of the Dow Jones industrial average components are scheduled to report their latest quarterly reports this week. With the markets seemingly back on track, the fundamentals from this quarter will be important in terms of understanding where we really stand with the Dow what it could mean for the economy as a whole.

24/7 Wall St. has put together a preview of those Dow companies scheduled to report their quarterly results this week. We have included the consensus earnings estimates, as well as the stock price and trading history. Be advised that the earnings and revenue estimates may change ahead of the formal reports, and some companies may change earnings dates as well.

Travelers Companies Inc. (NYSE: TRV) will report its latest quarterly earnings before Tuesday’s open. The consensus estimates call for $3.16 in earnings per share (EPS) and $7.55 billion in revenue. Shares recently near $113, in a 52-week range of $76.99 to $142.22. The consensus target price is $121.80.

Procter & Gamble Co. (NYSE: PG) is expected to report its most recent quarterly results on Tuesday morning as well. The consensus estimates are $1.41 in EPS and revenue of $18.35 billion. Shares were trading close to $145 on Friday. The consensus price target is $141.69, and the 52-week trading range is $94.34 to $145.85.

Verizon Communications Inc. (NYSE: VZ) is expected to report its most recent quarterly results first thing on Wednesday. The consensus analyst estimates are $1.22 in EPS and revenue of $31.59 billion. Verizon stock traded above $58 on Friday. The consensus price target is $61.26, and the 52-week trading range is $48.84 to $62.22.

Coca-Cola Co. (NYSE: KO) will report its latest quarterly earnings before Thursday’s opening bell. The consensus estimates call for $0.46 in EPS and $8.35 billion in revenue. Shares were trading above $50 apiece late in the week. The 52-week range is $36.27 to $60.13, and the consensus analyst target is $54.50.

Dow Inc. (NYSE: DOW) will post its quarterly earnings early on Thursday. The consensus estimates are calling for a net loss of $0.33 per share and $9.52 billion in revenue. Shares changed hands below $50 late on Friday, in a 52-week range of $21.95 to $56.25. The analysts’ consensus target is just $48.39.

Intel Corp. (NASDAQ: INTC) will share its third-quarter results late Thursday. The analysts’ consensus forecast is EPS of $1.10 on $18.22 billion in revenue. Shares were trading just below $55. The consensus price target is $56.59, and the stock has a 52-week range of $43.63 to $69.29.

And American Express Co. (NYSE: AXP) is scheduled to report its third-quarter earnings Friday morning. The consensus estimates call for $1.33 in EPS and revenue of $8.66 billion. Shares were changing hands just above $105. The mean price target is $106.04, and the 52-week trading range is $67.00 to $138.13.

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These Are The Four American Companies Worth Over $1 Trillion Each

America’s major market indexes set records in the early part of the year, only to be battered by an unprecedented economic pandemic brought on by the spread of COVID-19. The markets have repaired themselves, largely based on the belief the recession will end in a V-shaped recovery and be back to normal by early next year. The markets have been pulled higher by tech stocks, and this surge has helped the value of four American companies rise above $1 trillion each.

Alphabet Inc (NASDAQ: GOOGL) has a market cap of $1.07 trillion. The stock has moved up by 17% in 2020 despite two challenges. Revenue dropped in the second quarter, as advertiser demand was undercut by the economy. And, Congress has suggested that its Google division has too much of the U.S. market for search. It may spend years fighting that battle. However, as advertising has returned Google, and stablemate YouTube have seen sharp upturns in revenue.  That, by itself, has caused investors to believe its once extraordinary revenue growth has already restarted.

Amazon.com Inc (NASDAQ: AMZN) has a market cap of $1.624 trillion. Amazon’s Prime Day, its huge annual sales event, has just ended. Estimtates are that it bought in over $10 billion. Amazon’s entire e-commerce revenue for the second quarter was $77 billion, which shows how much fourth quarter revenue will be enhanced. When married with holiday demand, the current quarter will be a revenue blowout for the company. It remains the largest cloud comuting operator in the world. The margins on its Amazon Web Services are over 30%. Amazon faces the same kind of Congressional antirtrust challenges, but investors don’t seem to care. Amazon’s shares are up 77% this year.

Microsoft Corp (NASDAQ: MSFT), with a market cap of $1.67 trillion,  is the oldest of the megatech companies, co-founded by philanthopist Bill Gates in 1975. It has evolved from a provider of operating systems and video game consoles to the second largest cloud company. Microsoft has also added a line of hardware that has been unusually successful. It competes with Google in the search sector and has one of the world’s largest portals in MSN.  And, it continues to dominate the operating systems of computers and servers worldwide. Shares are up 39% this year

Apple Inc (NASDAQ: AAPL) has a market cap of $2.04 trillion. Its shares are up 62% this year,  mostly on anticipation that the new iPhone 12 will be the most successful generation of the smartphone in years. Because it can connect to the new ultrafast 5G networks, this anticipation has a good deal of support. The 5G access is also expected to drive high sales in China, the world’s largest wireless market by far. Apple has also started to have success in the services businesses which is made of its App Store, credit card and virtual credit card services, and its TV and streaming business. Sales of its hardware–Mac, iPad, and Watch, have been helped by the pandemic, an advantage it shares with many other consumer electronics companies.

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