klerisa kimca's Posts (9)

According to a Bloomberg article, investors can get a lot more from safe, liquid securities than from the S&P 500 Index adjusted for volatility. This is all due to a statement from JPMorgan Asset Management. “Cash isn’t only a safe place to invest, it now offers a better risk-adjusted return than equities.” The firm had a multi-asset strategy team, with $260 billion under management. This upgraded its recommendation on U.S. cash to overweight for 2019. John Bilton, head of global multi-asset strategy at JPMorgan Asset Management stated that “Our cash and duration overweights really distill down to overweights in U.S. cash and Treasuries, where ex-ante Sharpe ratios are now well ahead of those for U.S. stocks for the first time in a decade.” Sharpe ratio is a measure of the performance of an asset relative to its volatility.


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Apple is experimenting with iPhone marketing strategies. Apple had aggressive trade-in offers that have temporarily reduced the cost of some of its latest iPhones. This is a rare step for a company that’s been raising device prices in recent years to lift revenue and profit. Apple is working on several new products and services. These include: an augmented-reality headset, driverless car technology, and digital offerings like original video. Analysts are expecting a new business model centered on subscriptions. Those options are risky than the iPhone. For over a decade, the company has had millions of consumers hand over hundreds of dollars for a new handset every two years. Since Apple launched the device in 2007, it’s become one of the most successful products on Earth. Emerging markets offer a source of growth for Apple’s business.


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Capstone I

Week 7


According to Consumer Intelligence Research Partners, the difference in spending between Prime members and regular costumers in Amazon is changing. Prime members buy an average of $1,400 a year worth of stuff on Amazon, but regular customers only spend $600 on the website. Last year, Prime customers spent an average of $1,300 and regular customers spent $700.This membership has created loyal costumers for Amazon, and one of the reasons for this is the free two-day shipping.

On the other hand, Prime's membership growth is slowing down. There are 97 million Prime subscribers only in the United States. This number grew only by 8% during the past twelve months, which is the slowest rate recorded by CIRP since 2012.

Free two-day shipping is not the only thing that Amazon offers. It also offers video and music streaming, and big discounts at Whole Foods. According to a JPMorgan analysis, the service offered by Amazon Prime is worth $785 per year, 6.5 times higher than the actual cost of an annual Prime subscription which is $120.



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Netflix is buying its first production studio

Capstone I

Week 6


Netflix Inc. announced this Monday that it is in the final steps of buying its first production studio. The streaming company is negotiating to purchase ABQ Studios with eight sound stages in Albuquerque. Two upcoming series are already being shot in New Mexico.

New Mexico offers tax incentives to attract productions. The state and the city of Albuquerque will provide Netflix with $14.5 million in funding. Netflix said that this purchase will bring $1 billion in production for New Mexico for the next 10 years and create up to 1000 jobs per year.

Netflix reported during its last earnings quarter that it has 130 million consumers around the world. The company also spent this year around $8 billion to produce original shows and movies.



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Week 5

Capstone 1


Amazon has announced that they will increase the minimum wage to $15 per hour for its United States workers. This will include part-time workers and those hired through temporary agencies. The new wages will apply to more than 250,000 Amazon employees including even employees at the grocery chain Whole Foods, and more than 100,000 seasonal employees that will be hired for the holiday season. This goes into effect on November 1st. They had previously stated that the average hourly wage, including stock and incentive bonuses for full-time workers, was more than $15 per hours, but it had not displayed any information about the average hourly wage for part-time workers and contract workers. Amazon was criticized for the poor wages and conditions of its workforce especially at the fulfillment centers. Workers at Whole Foods have made a push to organize a union.

The company will also announce the location for its second headquarters. Amazon says that this will lead to the employment of 50,000 highly-paid workers. This move is expected to generate billions of dollars in tax breaks from state and local government.

Online shopping has led to many retailers such as Toys “R” Us and Sears to close stores and lay off employees across the country. On the other hand, jobs at the warehouses and sorting centers that move Amazon’s goods have boomed. It has 575,000 employees around the world. This has led to highly-skilled tech workers in Seattle making over $100,000 and warehouse employees earning lower wages.

Amazon also announced the minimum pay increase in London by £10.50 and £9.50 around Britain. This will affect 17,000 Amazon employees and more than 20,000 seasonal workers there.


This article was created on Oct. 2, 2018. 


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Snapchat Teams Up With Amazon

Week 4

Capstone 1


Snapchat is teaming up with Amazon.com Inc. to make it easier for the users of Snapchat to buy products that they want. Users will be able to point their Snapchat camera at a product, and the camera will scan its image or the barcode. If Amazon recognizes the product, a table with a link of the product will pop up on the screen. This news was posted on Snap’s website. This tool is only available to a small number of users in the U.S. but soon it will be accessible to more users. This move is predicted to bring more revenue to the company because they have been facing problems lately. The company has posted poor revenue growth for the past quarters.

Amazon. Com Inc. and EBay Inc. both have visual search functions, but the pairing with Snap will help Amazon with the younger shoppers. This will encourage them to use the visual search tool of Snap and to also keep the young shoppers using Snapchat instead of other competing sites. This tool makes it easier even for consumers on Amazon to better navigate the site.


This article was created on September 24, 2018. 


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Capstone I 

Week 3


Thomas Jordan, the chairman of the governing board of the Swiss National Bank (SNB), and his SNB colleagues are caught between the forces of a strong economy and a strong franc.

The currency was put back where it was a year ago because of investor unease about Italy, Turkey, and Argentina. According to the Bloomberg article, this is keeping the SNB alert about a damaging appreciation. This move came along with a strong economic outlook, which puts Jordan in a bad position. It makes it harder for Jordan to justify the current negative interest rates and intervention pledge.

According to Nadia Gharbi, an economist at Pictet in Geneva, the SNB will continue with the same monetary policy, saying that “the situation on the foreign exchange market is too fragile to allow them to make changes”.

The currency has appreciated lately, standing at 1.12527 per Euro at 1:54 PM in Zurich on Tuesday. Economists in a Bloomberg survey expect the deposit rate to remain -0.75%, which is the lowest of any G-10 central bank.

Inflation is within the below 2% range defined as price stability. The price growth is 1.2%. The SNB will update its outlook for growth and inflation on Thursday. Economists in a Bloomberg survey predict an economic growth of 2.6% for this year and 1.8% in 2019.

Credit Suisse is pushing its forecast for a rate hike by half a year to September 2019.



This article was created on September 18, 2018, 12:00 AM EDT, and updated on September 18, 2018, 7:55 AM EDT.

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Gross Domestic Product, Q2 2018

GDP increased 4.2% in the second quarter of 2018, according to the “second” estimate released by the Bureau of Economic Analysis. The growth rate was 0.1% point more than the “advance” estimate released in July. In the first quarter, real GDP increased 2.2 percent. This was released on August 29, 2018 and the next release will be on September 27, 2018. According to Bloomberg, GDI is just another metric of economic activity produced by the Bureau of Economic Analysis. The “advance “estimate of second-quarter GDP that was released in late July had no information on second-quarter GDI, but the “second estimate” of GDP had more information. Jason Furman tweeted about this. He said that “the economy in Q2 wasn't quite as strong as it looks after all”. Jason Furman is a professor at Harvard’s Kennedy School of Government and he was the final chairman of President Barack Obama’s Council of Economic Advisers. The article states that he did “this to make the current presidential administration look bad”. But Furman wrote an op-ed in the Wall Street Journal in the beginning of July saying that the economy had grown at a 2.8% pace in the first quarter, and not the 2% reflected in GDP growth alone. The article continues to talk about the BEA and how it started reporting the GDI-GDP average in 2015. Also, the Federal Reserve Bank of Philadelphia published in 2013 its own “alternative measure of real U.S. output growth” called “GDPplus.” GDPplus combines GDP and GDI using Kalman Filter. The outcome was a 2.1% economic growth rate for the second quarter, which is lower that the 3.3% in the first quarter. The article concludes with the statement that “the economy was probably growing at an annual rate somewhere between 2.1% and 4.3% in the second quarter. Which is pretty good.”




This article was published on August 30, 2018. 

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According to Bloomberg, Turkey had one of the best growth performances in the second quarter, but the economy of Turkey is showing signs of a slowdown. Some investors say that this slowdown will turn into a technical recession later this year. During the three months through June, the gross domestic output rose 5.2%, which is in line with the 5.3% median estimated by a Bloomberg survey. Data shows that consumers and investors are slowing down, while government spending and exporters prevented a more rapid slowdown. The lira depreciation will force the government to reduce spending and the central bank to raise borrowing costs to stabilize the financial markets according to Inan Demir, an economist at Nomura International in London who had the most accurate prediction in the Bloomberg survey. Demir expects two consecutive quarters of contraction in the economy: a technical recession. Lira was traded 0.4% lower at 6.4372 per dollar at 12:15 p.m. in Istanbul, bringing the year’s losses to around 41%. The article states that the latest run on the lira began with the incident between Ankara and the U.S over an American pastor held in Turkey for almost two years on espionage and terrorism related charges. Turkish policy makers led by President Recep Tayyip Erdogan accused the U.S. of waging an economic war and using the currency as its main tool of attack.

Will the consumers and inverstors continue to slow down their pace? Will Demir's prediction hold up for the next consecutive quarters? 



 This article was written September 10, 2018. 

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