RBC’s Mark Mahaney, one of the most followed tech analysts on Wall Street, downgraded shares of Twitter to underperform from market perform late Thursday, predicting a 25 percent drop in the stock to $14 on weak interest from advertisers.
According to a recent survey among a group of advertising professionals in a range of marketing roles, 30 percent of respondents did not allocate any spending budgets for Twitter, a 5 percent increase from the levels in February, Mahaney wrote.
Similarly, only 24 percent of those surveyed believed their return on investment improved because of campaigns held on the social media platform, according to RBC.
Check out which companies are making headlines before the bell:
Finish Line — The athletic footwear and apparel retailer matched estimates with quarterly profit of 53 cents per share, with revenue above Street forecasts. Same-store sales rose 5.1 percent, also a better performance than analysts were expecting.
Twitter — RBC tech analyst Mark Mahaney downgraded Twitter to “underperform” from “market perform,” predicting a 25 percent drop in the stock because of weak ad revenue.
Valvoline — Valvoline will debut Friday on the New York Stock Exchange after the automotive maintenance company saw its initial public offering price at $22 per share, within the expected range of $20 to $23 and raising about $660 million. Valvoline was spun off from chemical maker Ashland.
Wal-Mart Stores — The retailer was upgraded to “overweight” from “equal-weight” at Barclays, which said investments in improving the company’s labor situation appear to be resonating with customers.
Apple — Japanese antitrust regulators are reportedly considering possible antitrust action against Apple over its domination of the nation’s smartphone sales. A Reuters report said Apple and others were hobbling smaller competitors by refusing to sell older surplus iPhone models to third party retailers.
Wells Fargo — Chief Executive Officer John Stumpf has stepped down from his role on the San Francisco Federal Reserve’s advisory council.
Jefferies reiterated its underperform rating on Netflix due to a rising competitive threat from Amazon and increasing price sensitivity among the company’s subscribers.
Old Netflix subscribers face a $2-per-month price rise this year after the grace period from 2014’s price increase ends.
“Our proprietary survey targeted more than 1,100 subscribers that have received the un-grandfathering/price change notification from Netflix,” analyst John Janedis wrote in a note to clients Friday.
“The results suggest that the price point could have a larger impact on cancellations that AMZN Prime’s video platform is gaining share.”
He lowered his Netflix price target to $76 from $80, representing 21 percent downside from Thursday’s close. He has one of the seven sell ratings out of the 37 analysts who cover the stock on Wall Street.
There is a simple recipe for substantial stock market gains, according to Jim Paulsen, chief investment strategist at Wells Capital Management.
The key condition, Paulsen explains, is for the SP 500‘s earnings growth to be above the 10-year Treasury yield. Using data reaching back to 1950, the strategist found that when this is the case, the SP has risen an average of 11.6 percent per year. When the earnings growth rate has been below the 10-year yield, the SP has risen just 4.7 percent.
It’s not simply that the stock market is cheering low rates, either. When he only looked at rising-yield environments, Paulsen found an even starker contrast between performance when earnings growth was above the 10-year Treasury yield (average annual gain of 9.8 percent) versus when it was below (0.6 percent).
To further bolster his case, he shows that the market has a lower variability of returns when the signal is triggered, which makes being invested in those years an even sweeter proposition.
So which condition are we in now? Unfortunately, with negative earnings growth and a positive 10-year yield, the signal is a negative one for stocks.
But there is a silver lining.
“Since the 10-year Treasury yield is currently near a record low of above 1.65 percent, even extremely modest earnings growth may be sufficient to push the stock market
The hunt for yield this year has resulted in few dividend payers left to buy cheaply, except for a few so-called dividend orphans that have been overlooked, according to widely followed strategist Thomas Lee.
“The global search for yield has driven outperformance of most dividend payers. However, we have identified several laggards with materially better dividend yields, positive fundamental outlooks, strong balance sheets, and reasonable payout ratios,” wrote Lee, head of research at Fundstrat Global Advisors.
Lee defines dividend orphans as stocks that have been left out from major benchmarks, have short or inconsistent dividend histories, or possess challenging fundamentals. The lack of attention from investors has led many of these companies to underperform, even though some of them pay decent dividends and have the potential to turn the corner.
Iran introduced credit cards for the first time on Sunday, the Iranian Students’ News Agency (ISNA) reported.
Iran is looking to bolster its oil production and economy after world powers in January lifted sanctions against the Islamic Republic in return for Tehran complying with a deal to curb its nuclear ambitions.
Valiollah Seif, the head of the central bank of Iran, cautioned that it could take some time for banks to get used to the credit card system.
“It would be incorrect to think that these cards will be used quickly within the banking network,” ISNA quoted Seif as saying.
The cards will be offered with limits of approximately 3,000, 10,000 and 15,000 dollars and can be used for purchases in shops or online.
(Reporting by Babak Dehghanpisheh in Beirut; editing by Jason Neely)
The Empire Landmark hotel has been a West End icon since it went up in 1973. It’s tall (42 storeys, 120 metres), thin, and has a nifty revolving restaurant/bar on top that offers breathtaking views.
But it also sits on a full block in the 1400-block Robson, in the middle of a neighbourhood that’s being transformed into a forest of luxury highrises. And it looks like the 43-year-old structure will be coming down for a new condo development.
Plans went up on the city of Vancouver’s website Friday for two towers in the 1400-block — one 28 storeys high, the other 30.
The towers would be around 100 metres high, which is almost 25 per cent shorter than the existing building. But with high-end condos going for up to $1,800 per square foot in the neighbourhood, the redevelopment would probably be far more lucrative than running the current 357-room hotel.
The plan by Musson Cattel Mackey architects would see a mixed-use project with 223 market condos, 57 social housing units, two floors of offices and retail on the main floor. The overall project would have 393,850 square feet of floor area.
Reaching an agreement to stabilize global oil prices, including a possible deal to freeze output, is “non-critical” for Russia, its Energy Minister Alexander Novak was quoted by Russian news agencies as saying on Sunday.
“For us, in principle, it’s non-critical, but we believe that the process of market rebalancing could be advanced. It’s beneficial for all,” RIA quoted Novak as saying.
Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum in Algeria from Sept. 26-28, where they will discuss a possible output-limiting deal.
(Reporting by Maria Kiselyova; Editing by Mark Potter)
When considering the affordability risks facing Toronto’s condo market, the big one that comes to mind is rising interest rates. Here’s why it’s a real concern.
With resale condos, you can secure a mortgage at the time of your agreement of purchase and sale, as closings tend to be 90 days out. With a pre-construction condo, however, it could be three, four or even five years before the purchaser obtains title and registers a mortgage. That leaves them with a great deal of exposure to interest rate risk, as there are no mortgage options that can hold a fixed rate offer for that amount of time.
During the past decade there have been approximately 200,000 new condos added to the GTA’s housing market stock, all of them delivered in an environment of declining interest rates.
Let’s look at what happens if rates rise.
A new 550-square-foot pre-construction condo purchased for $330,000 will likely require a mortgage of $264,000 (assuming a 20 per cent deposit). At the current 3 per cent interest rate, monthly payments would be $1,249. If rates increased by 1 per cent by the time of closing, which could be in three
The deal reached on Sept. 19 between Canada’s Unifor union and General Motors Co will see the auto maker invest C$554 million ($420.84 million) in its local plants, the labor group said on Sunday ahead of a ratification vote on that agreement.
In a brochure posted online, the union said the bulk of the money will go toward the Oshawa and St. Catharines plants in the province of Ontario, which will get C$400 million and C$150 million, respectively.
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Unifor, which represents some 4,000 GM workers, had reached a tentative deal with the company just minutes before a strike deadline.
Workers were voting on Sunday on whether to accept that deal, which granted some job security, but less favorable pensions than before. GM had agreed to renewed investment at its Canadian plants, while the union gave up defined benefits pensions for new hires.
The ratification, whose results have not yet been announced, is expected to affect some 16,000 Unifor workers with Fiat Chrysler Automobiles NV and Ford Motor Co, whose contracts also are up for negotiation.
Under a process called patterned bargaining, Unifor’s tentative agreement