Amazon, The World’s Largest Online Retailer Is A Stock To Own, world’s largest online retailer is an international American E-Commerce company. Initially just a bookstore, Amazon started selling varieties of goods online in different other categories. Jeff Bezos started the company in 1995. Amazon now has different retail websites for all major countries around the globe.

Jeff Bezos is the founder-cum-CEO of this E-Commerce giant. Initially, trading under the NASDAQ stock exchange AMZN symbol, Amazon stocks went public on May 15, 1997, with an Initial public offering (IPO) of US$18.00 per share.


Company products:    

Amazon is best known for its Retail goods, Digital content, Consumer Electronics, Games, Art, Instant Video, Computing services, Content production, Amazon Wireless, Amazon Fresh, Amazon Local, Amazon Prime Air, etc. Its extensive line of latest flagship products includes Amazon Kindle e-book reader and Amazon Fire tablet computer. Amazon is also a leading provider of cloud computing services to its users.

Company performance:

Amazon has weathered many storms since its IPO of US$18.00 per share on May 15, 1997. The reason this company rose subsequently because it had least expectations of making any profit for the first 4-5 years due to its initial business plan. In fact, Amazon witnessed its growth at a snail pace which drew huge criticisms from the investors all around.

But, following the dot-com bubble burst, Amazon survived when several other E-Commerce companies were shut down. Amazon went past its slower rate of growth and became a key player in online retailing making the concept of online shopping extremely popular and a household concept. It turned $5 million on revenues of over $1 billion.

Factors that have an impact on Amazon’s stock prices:

Amazon announced the unveiling of its Fire TV, a set-top box with interesting games and streaming videos. This has initiated a tough battle between the market giants to take control of your living rooms. According to the market pundits, this is going to be a key player in the streaming marketplace which is definitely going to have an impact on its stock performance.

Amazon’s initial slow growth made investors lose its faith in the company’s ability. But, after Amazon survived the dot-com bubble burst at the start of the 21st century, it started making modest profits which were enough to show investors that this company had it in it to stay for the long-term.

On May 12, 1997, Barnes & Nobles sued Amazon claiming that its “the world’s largest bookstore” statement was false. Barnes & Nobles went on further to say that Amazon wasn’t a bookstore at all rather it was a book broker. The lawsuit was settled out of court but this news didn’t go well with the investors.

Amazon has reported revenue of $25.6 billion, a growth of over 20% in its fourth fiscal quarter earnings report. But, despite the growth, investors have slammed the company’s stocks in the market as it didn’t meet the Wall Street expectations. The shares are now down by 7% because it missed Street expectations of $26 billion.

There is a number of things that affect the stock performance of a company. When such events happen, you have to keep updates to make your decision to trade or not.


US Stock Market Remained Flat Post Easter Holiday

21 April 2014 – The US stock market remained flat most of the time on Monday after the World celebrated Easter weekend. The stocks went up a little at the beginning of the trading hours on Monday when the market reopened after the holidays.

This week is the week of the earnings report and investors all around the world remain watchful as this week slowly unfolds the drama with the earnings report from some major names like McDonald’s and Facebook.

US Stock Market

S&P 500, Dow Jones industrial average and NASDAQ composite all gained a little in the early trading hours. But, NASDAQ fell down near the closing hours. About 62% of major US companies have exceeded Wall Street expectations in their earnings report.

Although there have been some strong performances from some major names in the market, the stock market overall remained a little flat.

S&P 500 posted its biggest week since July last year as its performance got a boost from positive earnings report from General Electric and Morgan Stanley. Dow Jones industrial average was 0.05% to reach at 16,416 points. NASDAQ Composite was down by 0.26% to react at 4,084 points. S&P 500 was also a little down by a marginal 0.03% to reach at 1,864 points.

More reports are due to come later this week which will pretty much decide the direction, the US stock market will take. In fact, market analysts are hoping that after this week they will have a clear picture of where the market will go.

But, the investors aren’t excited about the way the stock market is performing through many earnings report are still overdue. As interest rates remain low and the economy is in the path of recovery, this week will tell us what will happen in the stock market next.


US Stock Market Closed For Good Friday, Asian Stocks Perform Better

The US stock market was closed on Friday on the occasion of Good Friday while the Asian stocks did much better. The oil trading was also suspended because of Good Friday observance. The stocks market in US, Europe and many parts of Asia remained closed on Friday.

Both Japan and South Korea shares rose by a thin percentage. Tokyo’s Nikkei stock average rose by 0.7% to reach at 14,516 points making its best gain in this year. After a dismal performance last week, Nikkei stock had a stroke of good luck finally.

US Stock Market

China’s Shanghai Composite dropped by 0.1% to reach 2,097 points after last week’s economic data depicted slower economic growth that has been down to its lowest level since the year of 2012. Seoul’s Kospi rose by 0.6% to reach at a respectable 2,004 points. Likewise, Taiwan’s Taiex gain of 0.3% to reach 8,966 points. Thailand and Malaysia’s market benchmark was set a little higher this week.

Thursday morning wasn’t as good for the US stocks as the technology sector saw some backlash owing to Google and IBM’s dismal earnings report. Even though big market names like Goldman Sachs, General Electric Co. and Morgan Stanley exceeded Wall Street expectations, the market faced overall disappointment as it saw some major names experiencing a drop in their share market performance.

Last week was pretty bad for the Asian market as investors questioned Japan’s recovery. Bargain hunting led to some rebound in the investors’ faith this week. Japan shares have been cheaper but for some reason, it has failed to trigger large-scale buying amid investors. The market has been pretty slow for now as the world is celebrating Easter weekend.


Bank of America Agrees to $783 Million Settlement with the US Regulators

Bank of America

Bank of America has complied to US regulators and agreed to settle charges that it collected by deceiving customers. The US regulators held Bank of America Corp. Responsible for sales of theft protection insurance and generating money by selling credit card debt cancellation.

Before Bank of America, similar charges were brought against four other banks. Those banks also faced allegations of manipulating credit card add-ons. It’s important to mention that identity theft protection and debt cancellation are add-on products. These services don’t come directly with credit cards.

The agreement would cost Bank of America a whopping $783 million, out of which $738 million would be refunded to the consumers and another $45 million needs to be paid a penalty. The deal was settled with federal regulators. The Consumer Financial Protection Bureau was one of the regulators.

A representative of CPFB called Richard Cordray said, “Bank of America both deceived consumers and unfairly billed consumers for services not performed. We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market…

According to CPFB, there are nearly 1.4 million customers who were affected due to the deceptive policies are taken by the Bank of America. Around 1.9 million customer accounts were unlawfully charged for credit monitoring and also for credit reporting services when they were not really receiving those services.

To compensate for the 1.9 million consumers, Bank of America was fined $25 million. The restitution amount the bank would have to pay is $459.4 million. The fine amount, according to the authorities deal with, “scope and duration of the violation and financial harm to consumers from the unfair practices.

Before this announcement, the CEO of Bank of America namely Brian T. Moynihan spent over $50 billion for the reimbursement of the victims of sketchy mortgage schemes. With the current settlement, Bank of America moves past another legal hurdle. The Office of Comptroller of the Currency gave an order to the bank. In the order, the comptroller said banks should, “improve governance of third-party vendors associated with ‘add-on’ consumer products and submit a risk management program.

Earlier, the FDIC sued Citigroup and Credit Suisse and now Bank of America jumps into the bandwagon. As a result of the lawsuits, the credit add-on products have been put on hold.


Obamacare Could Reduce Car Insurance but Increase Medical Malpractice Coverage Premium Rate

Peculiar to say the least, studies have found Obamacare could reduce the cost of car insurance. RAND Corporation has done a study that shows the Affordable Care Act may be instrumental in lowering the cost of auto insurance, worker’s compensations and business liability.

Insurance companies often have to compensate people who don’t have coverage. Car owners and business owners pay liability insurance. Mostly, the money is paid to people who are not covered. As those people are also coming under Obamacare, car and business owners can heave a sigh of relief.


As it will happen in a roundabout way, David Auerbach, a key figure behind the study said, “The Affordable Care Act is unlikely to dramatically affect liability costs, but it may influence small and moderate changes in costs over the next several years…

The report by RAND sheds light on how the number of people with private health insurance and Medicaid Have increased. The changes could make an impact on potential cost changes. The cost changes, as per estimation can be as high as 5%.

The potential changes have been described by Paul Heaton and Ian Brantley of RAND Corporation as, “Most are in the negative (cost-reducing) direction. In the case of the individual substation effect, liability insurers are, today, paying for some of the additional costs associated with treating the uninsured.” Obamacare differentiates one type of liability from the other. A car insurance owner will pay less for reimbursing the victim while a medical professional with medical malpractice coverage would have to pay significantly more.

The long-term consequences of Affordable Care Act have been highlighted by Jayne Plunkett, whose company sponsored the study. Plunkett said, “Businesses and policymakers need to understand how and why their risk profiles might change as the Affordable Care Act is implemented…”

The size of Medicare payments is also to be changed. As car insurers rely on the rates paid by private health insurers and Medicare, reduction in the payment made by those companies will lower the amount that auto insurers pay as premium.

Interestingly, medical liability coverage could increase, unlike car insurance premium rate. If more people come under the healthcare scheme, they could hold doctors and hospitals responsible by bringing charges against them. Thus, medical professionals may have to pay a hefty sum as the insurance premium.

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FCA to Review Credit Card Companies as 9 Million Britons are Badly in Debt

In the UK, the credit card industry is worth £150 billion. This voluminous industry is going to be closely monitored by the financial watchdog as there are approximately 9 million Britons, who are credit card holders and being pushed by the credit card companies to fall into debt.

The announcement came from the Financial Conduct Authority. The FCA took responsibility on 1st April. Right after that FCA made the claim that credit card holders taking a loan will be safer than before. The lenders were also warned by the agency.

credit card

Martin Wheatley, an executive at FCA explained the situation. He said a number of survival borrowers are compelled to use their credit cards to pay bills. Sometimes, they are opting for payday loans. This way, these hapless people are getting into the spiral of debt.

In his own words, “Why are card issuers providing the means for the most indebted consumers to escalate their way into further debt?” He feared that it is because of insisting them to take loans so that they end up paying high interest.

The regulatory agency has identified the most vulnerable segment which is 3.7% of 30 million British credit card holders. They make minimum payments for a year. Mr. Wheatley said, “The key priority has to be those in the most vulnerable circumstances, many of whom are struggling to manage their credit card commitments, as well as other bills…

Credit card companies are curious to know how the review process will be done by the FCA. David Black, the PR Manager at Consumer Intelligence believes the review process would involve clarity in terms and conditions, forbearance for arrears and careful observation of affordability. This way, a lender might see their profit margin going down and might have to look for other ways to generate profit.

Credit card companies made it clear by a statement that they welcome the FCA’s review.  Richard Koch of UK Cards Association said, “the industry has a long-standing commitment to responsible lending and transparency, with a number of recent changes on credit limits and repricing of debt, improved transparency, and forbearance for those who find themselves missing repayments.

Interestingly, the survivalist group and the lifestyle group used similar services. They had different reasons, however; the lifestyle group took a loan for purchasing expensive stuff while the survivalist group took the loan for day to day purpose.

Mr. Wheatley put it unequivocally, “We have a big task ahead; it’s our job to make sure firms put their customers at the heart of their business and don’t just see them as an easy target or a profit line.

It’s clear from his statement that the survivalist group is the prime concern for the FCA.


US Senators Introduce New Legislation to Reduce Debit Card Liability Cap

Two US senators Mark Warner and Mark Kirk introduced a bill this week. The bill is called Consumer Debit Card Protection Act of 2014 and aims at minimizing the limit of accountability of shoppers with debit cards if they are convicted for deception. Senator Warner is a member of Democratic Party and from Virginia. Senator Kirk represents Republican Party from Illinois.

If the federal law is studied, a clear difference in personal liability limits between credit and debit cards could be found. The law mandates the limit of personal liability for fraudulent charges on credit cards to be $50. But under the same law, consumers found guilty of fraudulent activities involving their debit cards would be liable for $500 penalty. The new legislation would lower this cap to $50, same as credit cards.

  US Senators Introduce New Legislation to Reduce Debit Card Liability Cap

Many believe the legislation was the need of the hour as debit card loss may result in unauthorized charges against the owner of the card while he is totally clean-handed. As per the Federal Electronic Fund Transfer Act, if the owner of the card reports the loss immediately and if the card has not been previously used, liability amount would be $0.

If he informs the bank about the loss within two working days from the date of loss, the liability amount would be $50. In case the cardholder fails to notify the bank within two business days and does so within 60 business days, the liability amount would be $500. Thus, there’s a sizable gap between the liability charges which should be reduced.

The credit card loss rate has reached to historical lows in the third quarter of 2012. But the same doesn’t apply to debit cards. Use of debit cards has increased in recent time and with that, the likelihood of the card being stolen. Senator Warner said, “Debit cards are used in much the same way as credit cards, so it makes no sense for credit card fraud liability to be capped at $50 while debit cardholders can find themselves on the hook for $500 or more.”

As credit cards have better consumer protection, it is used extensively for international purchases. However, people find it more convenient to use their debit cards for purchasing from local stores. Use of credit cards also offers reward point facilities and improved credit standing. Thus, a legislation was needed to make people interested in using debit cards.

Senator Warner said, “Debit card use has just exploded in recent years, especially among young people, and consumer protections must keep pace…

Hopefully, consumers will be relieved as the liability cap is reduced and use their debit cards more than before.


Cryptex to Allow Debit Card Holders to Convert Digital Currency into Cash

The Bitcoin to cash ATM and debit card provider company Cryptex will introduce personalized cards. The cards will form of cryptocurrency.

To understand cryptocurrency, we need to understand Bitcoin. Bitcoin stands for virtual currency which is not regulated by any central authority such as US treasury and could be used for exchange. Creation of bitcoin, commonly known as mining involves cryptography.

Cryptex to Allow Debit Card Holders to Convert Digital Currency into Cash

A shortcoming of Bitcoin sponsored digital currency is the difficulty faced by consumers to turn cryptocurrency into cash. As there’s no centralized authority, many banks don’t recognize cryptocurrency and debit card holders couldn’t turn digital currency into cash.

Consumers could overcome this problem if they use Discover™ card. This is a type of debit card that’ll enable them to turn cryptocurrency into cash at a number of ATMs and POS software by different merchants, given the merchants accept the Discover™ card.

The  Discover™ card will be usable in more than 70 countries. Good news for Bitcoin users in the US as more than 90% of US ATMs will support the card. Another top-notch feature of the Cryptex card will be facilities provided to Bitcoin ATM industry such as a secure network across the globe using which a Bitcoin user would be able to convert coin to cash.

Jamon Rahn, the co-founder of Bitcoin considered this as a huge success “because Bitcoin ATMs are sparsely located and Bitcoin exchanges make withdrawal a burdensome affair. We are vastly increasing liquidity and convenience for holders of Bitcoin.

It’s true that the spread of Bitcoin is limited. There are many debit card users, who don’t use Bitcoin. But they are gradually learning the use of Bitcoin because of the advantages that come with it. The chief advantage is that less time needed for a transaction. Bitcoin could reduce the duration of the transaction from few days to few seconds.

One problem of Bitcoin is converting the digital currency into local currency. But as the Cryptex card will be usable in a number of countries, users would be able to overcome this problem. Users can load their debit cards from the Bitcoin wallet. After that they could visit any retail shop that accepts debit card and purchase any product or service with their local currency as local ATM or merchant point of sale software would allow that.

Thus, we could see the whole way of sending money to be changed in few years.


FTSE 100 Listed British Company Kingfisher to Acquire Mr Bricolage

The largest home improvement retailer in Europe, Kingfisher has announced that it is in the process of acquiring French company Mr Bricolage which also operates in the home improvement retail industry.

After this announcement, the share market saw Kingfisher’s shares to rise on Thursday. The acquisition would cost Kingfisher EUR 275 million. Kingfisher is currently having an exclusive negotiation with the stakeholders of Mr Bricolage. As both companies fall into the same line of business, analysts are hopeful that the amalgam would perform better.

Kingfisher to Acquire Mr Bricolage

Kingfisher’s Chief Executive Ian Cheshire said, “ This would add a third, complementary strong business alongside Kingfisher’s existing two successful brands in France…” Kingfisher runs UK based retailing company B&Q.

The TOC governing the deal state that Kingfisher would buy 41.9% shares from the Association Nationale des Promoteurs de Faites Le Vous-Mene which is a group of franchisees. Another 26.2% of stakes would be purchased from Tabur Family at a price of 15 EUR per share.

Kingfisher also announced that a mandatory offer to acquire the stocks that are being held by minority shareholders at a price of 15 EUR would be filed. The total debt of Mr Bricolage would be paid by Kingfisher. The net enterprise value would be 275 million EUR.

Kingfisher’s stock has gained on Thursday in FTSE. In fact, it’s one of the companies listed in the FTSE 100 to make a sizable gain in this morning. At the mid of the day, the stock was up 2.5% at 442.10 pence per share.

The whole acquisition process could take this entire year to complete as Kingfisher said it is hoping the deal to finalize by the end of the 2014-15 financial year i.e. in March 2015. The deal depends upon anti-trust clearance as the current franchisee and affiliates of Mr Bricolage would continue to exist and improve.

The initiation of the talk was observed on Wednesday when Kingfisher and the chief shareholders of Mr Bricolage signed a non-binding memorandum of understanding. This is the beginning of exclusive negotiation process.

In future, the handlers of operating businesses of Kingfisher and Mr Bricolage will meet in France. Each will have its work council. The detailed commercial terms will be put before the franchisees of Mr Bricolage.


A Look at Best and Worst Rental Return Investment Markets

It is becoming difficult to pin down a market that could fetch high return on investment due to a sluggish economy. Investors wonder whether they should invest in home buying and rental. It has been a lucrative investment option for last few years. But not any more.

Soaring home price is the chief reason that acts as a deterrent. A property that is good for investment is something that offers rental return for long-term other than the increase of value on the asset.

Rental Return Investment Markets

So if an investor wants to buy a home and then rent it, it’s customary for him to have an idea of markets that are good for long-term rental return and markets that are not. Nationwide, home price rise was 12.2% in early 2013. Certain areas such as California Riverside have seen an increase of 22% in home prices whereas it is up 17% in Atlanta.

A survey done recently by RealtyTrac shows Michigan, Georgia, Mississippi, Maryland and Kansas are the top five markets for rental return and New York, Colorado, California, Montana and Tennessee are the bottom five markets. The rental return was calculated by multiplying fair market rent for a three bedroom home by 12 and then having it divided by the median sales price of the property in the respective county.

The survey points out if the value on asset increases rapidly rental return would be poor. A median property sales price and average fair market rental would result in high annual gross yield. In New York for, for example, the median sales price is $887000 and average fair market rent $1852. The annual gross yield would be

                           1852 x 12 / 887000 x 100 = 2.5

With 2.5% annual gross yield PCT, New York is the worst market for rental return. Using the same formula, rental return for Michigan would be

                           1124 x 12 / 44900 x 100 = 30

Thus, Michigan is the best market for rental return with 30% annual gross yield PCT.

Atlanta, which is the second best in the category has become a hot destination for real estate investors. Daren Blomquist, VP of RealTrac said, “I think that parts of Atlanta have probably been picked over pretty well by some of the big investors, but certainly the fundamentals are still strong due to the relatively low home prices…

The big real investors are restricting their home purchases due to price appreciation and low rental. If median prices of the worst rental zones come down, they would invest again.