275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

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​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     

The government of Canada is opening the bidding on a contract for 88 military fighter jets to replace its aging fleet of CF-18s, and one likely bidder already faces a formidable hurdle. Contract terms spell out that “any bidder responsible for harming Canada’s economic interests will be at a distinct disadvantage,” according to a statement Tuesday by Defense Minister Harit Sajan.That statement unquestionably targets Boeing Co. (NYSE: BA), which lodged a complaint with the U.S. International Trade Commission (ITC) earlier this year charging Canada’s Bombardier with dumping 75 of the company’s CS-100 passenger jets in a contract with Delta Air Lines.

A ruling in Boeing’s favor was handed down by the ITC’s Enforcement and Compliance Division, and the U.S. Department of Commerce will hold a hearing on the ruling next week. If it affirms the preliminary ruling, the ITC will issue its final ruling on February 1, 2018. A week later the ITC will issue the order and a 300% tariff, if it is affirmed all along the way, will be imposed on each of the 75 planes imported into the United States. Delta has said that it will not pay the tariff, endangering the entire order.Canada has already withdrawn an order for 18 new Boeing F/A-18E Super Hornets and will instead purchase 18 used Super Hornets from Australia to top up its fleet and meet the Royal Canadian Air Force’s commitments both to NATO and the North American Aerospace Defense Command (NORAD).The order for 88 new fighters was expanded from an initial plan to order 65. Bids will be reviewed in late 2019 and early 2020, and the government expects to award the contract in 2022 with first deliveries in 2025.A report at Bloomberg News  indicates that Bombardier is lining up U.S. politicians, vendors and customers to support its claim at next week’s hearing that more than 50% of the parts for the CS-100 are made in the United States before final assembly is done in Montreal.

Delta Air Lines, which is expected soon to announce an order for 100 new single-aisle aircraft, along with options for up to another 100, may also put some pressure on Boeing to withdraw its complaint if Boeing wants to win the larger order from arch-rival Airbus.UPDATE: According to a report by Jon Ostrower at CNN, Delta is set to announce an order for 100 single-aisle Airbus A321neo passenger jets later Wednesday or at Thursday’s investor’s day meeting. Boeing had countered with its 737 MAX 10. The agreement also means that Boeing’s trade case against Bombardier will continue. Worse for Boeing, the order along with options on another 100 Airbus planes fills Delta’s needs for new single-aisle airplanes well into the future.
Meanwhile, Boeing stock posted another 52-week high Wednesday morning of $295.83. The 52-week low is $153.06, and the consensus 12-month price target is $289.79.

Apple Inc. looks like it’s having a not-so Merry Christmas.

Analysts have lowered iPhone X shipment projections for the first quarter of next year, citing signs of lackluster demand at the end of the holiday shopping season.Sinolink Securities Co. analyst Zhang Bin said in a report Monday that handset shipments in the period may be as low as 35 million, or 10 millionless than he previously estimated. "After the first wave of demand has been fulfilled, the market now worries that the high price of the iPhone X may weaken demand in the first quarter," Zhang wrote.

JL Warren Capital LLC said shipments will drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, citing reduced orders at some Apple suppliers. The drop reflects “weak demand because of the iPhone X’s high price point and a lack of interesting innovations,” the New York-based research firm said in note to clients Friday.

"Bad news here is that highly publicized and promoted X did not boost the global demand for iPhone X," according to the note.Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances toward $1 trillion. The Cupertino, California-based company is facing new challenges from Samsung Electronics Co., which is quickly recovering from the Galaxy Note 7’s recall after fires. In the meantime, Chinese brands such as Huawei, Oppo and Xiaomi are also luring away potential customers in China and other emerging markets such as India.

Taiwan Report

Apple is said to have trimmed its first-quarter sales forecast to 30 million units from 50 million, Taiwanese newspaper Economic Daily News reported, citing unidentified supply chain officials. It also said Hon Hai Precision Industry Co.’s main iPhone X manufacturing hub in Zhengzhou, China, stopped recruiting workers. The company also known as Foxconn is the sole iPhone X assembler, and also makes the handsets in Shenzhen and Chengdu.
Shares of Asian suppliers, such as Lens Technology Co., Shenzhen Desay Battery Technology Co. and Largan Precision Co. fell Monday on the report. Lens recovered some of the losses on Tuesday, while Largan continued to slide. Shenzhen Desay was little changed.Hon Hai shares slid for a second day Tuesday, on track for the lowest close since March. Touch screen maker General Interface Solution Holding Ltd. plunged 8.4 percent Tuesday after slipping slightly Monday.

An Apple representative declined to comment on production arrangements. Foxconn said in an emailed statement that company policy prevents it from commenting on such matters.Apple received a rare downgrade last week from Nomura Instinet analyst Jeffrey Kvaal, who said iPhone X sales as well as other positive factors are already baked into the stock price. He lowered his rating to "neutral" from "buy."The stock has soared 51 percent this year, bringing its market value to almost $900 billion.

Supply, Demand

Apple’s efforts to increase iPhone X production in recent months have made supply and demand fairly balanced at the moment, said Jia Mo, an analyst at Canalys in Shanghai.The market will still hold high expectations for Apple’s 2018 products if Apple introduces more devices with iPhone X’s key features to cover a wider price range," he said.
Customers seem to be opting for cheaper models of the iPhone, according to Cowen & Co., which says that suggests Apple failed to cram enough new technology into the iPhone X to justify a $999 price tag.New features such as facial recognition and virtual reality herald Apple’s vision for future smartphones, but other issues such as the lack of augmented-reality apps have cooled buyer buyer interest in those technologies.

DECEMBER NEWSLETTER 6

CURB OF APPEAL FOR HOME OWNERSHIP

​CANADA RETALIATES AGAINST BOEING

GENERAL BUSINESS

6 Most Important Things in Business Today

Holiday spending rose more than expected, according to one major research group. The Wall Street Journal reported:Fueled by high consumer confidence and a robust job market, U.S. retail sales in the holiday period rose at their best pace since 2011, according to Mastercard SpendingPulse, which tracks both online and in-store spending.Sales, excluding automobiles, rose 4.9% from Nov. 1 through Christmas Eve, compared with a 3.7% gain in the same period last year, according to the Mastercard Inc. unit, which tracks all forms of payment. E-commerce continued to drive the gains, rising 18.1%.Star Wars: Last Jedi” had another huge box office weekend. According to The Wall Street Journal:As expected, Walt Disney Co.’s “Star Wars: The Last Jedi” continued to rule over returns, collecting an estimated $100.7 million over the four-day weekend in the U.S. and Canada. The latest blockbuster installment in the Luke Skywalker saga has collected $397.3 million in 11 days of release and is already the third-highest-grossing movie of the year at the domestic box office. “Last Jedi” has grossed more than $775 million world-wide so far.

Bitcoin traders have run into problems in Israel. According to the Financial Times:
Israeli regulator becomes latest to crack down on bitcoin
Cryptocurrency groups barred from Tel Aviv exchange as international warnings mount
Apple Inc. (NASDAQ: AAPL) iPhone X sales may be worse than many analysts believe. According to Bloomberg:Analysts have lowered iPhone X shipment projections for the first quarter of next year, citing signs of lackluster demand at the end of the holiday shopping season.
Sinolink Securities Co. analyst Zhang Bin said in a report Monday that handset shipments in the period may be as low as 35 million, or 10 million less than he previously estimated. “After the first wave of demand has been fulfilled, the market now worries that the high price of the iPhone X may weaken demand in the first quarter,” Zhang wrote.JL Warren Capital LLC said shipments will drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, citing reduced orders at some Apple suppliers. The drop reflects “weak demand because of the iPhone X’s high price point and a lack of interesting innovations,” the New York-based research firm said in note to clients Friday.

The size of the Chinese economy could pass that of the United States in less than two decades, according to new research. Bloomberg reports:In 2032, three of the four largest economies will be Asian — China, India and Japan — and, by that time, China will also have overtaken the U.S. to hold the No. 1 spot. India’s advance won’t stop there, according to the CEBR, which sees it taking the top place in the second half of the century.
Also by 2032, South Korea and Indonesia will have entered the top 10, supplanting the Group of Seven nations of Italy and Canada.A collapse of bitcoin prices could harm the stock market. According to CNBC:
If the cryptocurrency boom goes bust, Wells Fargo Securities believes stocks could easily get dragged into the chaos.Christopher Harvey, the firm’s head of equity strategy, is paying close attention to the unprecedented activity in what could be one of the most epic bubbles of all time.There is a significant amount of froth in the crypto markets. We do think that if that froth comes out, it will start to spillover,” he warned recently on CNBC’s “Trading Nation.”

iPHONE X SALES BELOW FORECAST

Facebook Inc is changing its video ad straegy again potentially amplifying tensions with many publishers who were salready frustrated with their inability to earn significant money from videos posted on the platform The social media company is pusing publishers to create longer for the website, by raising the requirements that need to be met before ads can be inserted in those videos. Facebook also is tweaking its news feed algorithm to reward pages with video programs that draw regular viewers. Both formats require more resourced to produce than the short videos that do well in the news feed today. The steps outlined Thursday would bolster Watch, a videocentric section of Facebook's mobile app and website that made its debut four months ago and stands apart from the website's newsfeed. The changes are designed to incentivize publishers to create more compelling programming for Watch, which Facebook hopes will encourage repeat video viewership.

The tax code overhaul wipes out decades old perks designed to encourage home ownership, which housing analysts expect will reduce the incentives for millions of Americans to own property and will curb the growth of home prices. By almost doubling the standard deductions for individual and joint tax filers, the law blunts the advantage of the mortgage interest deduction, which is often a key factor in home buying decisions, particularly in pricey markets. The legislation also caps the deduction for state and local taxes at $10,000, a hammer blow to homeowners in high tax states. Taken  together, the changes significantly diminish the perks of home ownership built into the tax code. At peak impact, US home prices will be about 4% lower in the summer of 2019 than if there had been no tax changes. Similarly, in pricier markets in states such New Jersey New York Illinois and Pennsylvania prices could be as much as 10% lower. The share of homeowners who are likely to itemize and therefore take advantage of the mortgage interest deduction is expected to decline to about 14% from 44% according to Zillow

OVER HAULS VIDEO AD STRATEGY