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

​                                                                                                                                                                                                     Chelsea / Lower Manhattan​​

​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     

The Amazon.com Inc. (NASDAQ: AMZN) deal to buy Whole Foods Market Inc. (NASDAQ: WFM) was primarily aimed, according to many experts, at the huge grocery business of Wal-Mart Stores Inc. (NYSE: WMT). However, Whole Foods has only 431 stores against an estimated national total of over 38,441 grocery store locations. The deal may affect the prosperity of some of these as well.

Ironically, the narrative about Wal-Mart’s expansion has been that it destroys local retailers. In some cases, local governments have blocked Wal-Mart’s plans to build stores. However, Wal-Mart has still been able to build over 4,600 Wal-Mart and Sam’s Club locations. In theory, the huge customer bases these Wal-Mart stores draw takes traffic away from smaller retailers. The expansion of other big-box retailers with grocery sections, particularly Costco Wholesale Corp. (NASDAQ: COST), also compounds this problem.

According to FMI, an organization that represents the food retail industry, the sector employs 3.4 million people. This is based on Bureau of Labor Statistics data. Further, according to Progressive Grocery, total annual sales for food retail are over $668 billion per year. These numbers indication Amazon’s ambitions spread well beyond Wal-Mart.Amazon has been accused of destroying portions of the entire brick-and-mortar retail economy. The accusation will now spread to the national grocery business. However, Amazon may need more than 430 stores to have a significant effect. There is an argument to be made that it already has a much larger grocery operation than the Whole Foods stores because Amazon sells groceries online. It does not disclose the revenue from this, but because the grocery industry has become one of its targets, that revenue will grow.

One theory about Amazon’s growth is that it has costs tens of thousands of traditional retail jobs and cut billions of dollars from the market value of publicly traded companies in the industry. Amazon disputes this and claims its expansion has added a large number of jobs to the American economy and will continue to do so.While it is too early to say whether Amazon’s effect on the entire retail sector will spread to the mammoth local grocery store business, there is little reason to think otherwise.

Apple Inc is broading its push into India, perhaps the last great growth market. The company's first Indian made iPhones began selling locally this month with hopes reduced prices will boost sales in the sprawling country where Apple has just 3% of the smartphone market. The Cupertino Calf company is considering opening flagship stores in India's mega cities and is helping hundreds of third party resellers open new shops at an unprecedented pace. It also has set up development centers to build  apps for Indian customers and enhance local mapping capabilities. While Apple's strategy typically is to sell high price handsets to telecommunicatons carriers, its effort in India reflects the ralties of an emerging market where wages are low, cellular speeds are sluggish and consumers mostly buy phones from small unaffiliated shops. The company also must overcome weak brand awareness and its relatively late arrival in a market where Samsung Electronics has a head start

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Here is what to expect from Senate Republicans pending health care bill: Employers are likely to get most of what they eant. Lock sure provisions in the Senate legislation include an end to the mandate that requires employers to provide coverage for employees or pay a penalty. Also in the bill: More generous applications of health savings and flexible spending accounts, such as a repeal of the cap on contributions and greater use of accounts to buy over the counter drugs


Another win for employers: The elimination fo the Cadillac tax on high cost employer health plans. Democrats are united with Republican in their distaste for the tax. The move is backed by both labor and employers.


The Senate will provide more time to end Obamacare's Medicaid expansion to win over senators from states that have expanded Medicaid. Also in the cards: Added help from the feds for the overall program especially additional dollars to help states combat opiod abuse which is taxing several states finances. Plus more generous tax credits to help folks pay their premiums. They will be linked to policyholders ages so more assistance will go to older people. Low income buyers will be in line tgo benefit more from expanded tax credits.


To be sure there are plenty of obstacles to final passage of legislation that would repeal and replace Obamacre, as President Trump has vowed to do. Republicans must craft a bill that  satisfies conservative  members of the party, who want more of an outright repeal of the existing Affordable Care Act, without alienating members seeking help for folks with preexisting conditions

​RATE HIKE

Bluebird Bio Inc. (NASDAQ: BLUE) shares have made a steady gain over the course of the year, and now the firm is looking to cash in on this growth. The company announced that it would conduct a secondary offering after all this success in the market.Bluebird Bio values the offering up to $350 million, with an overallotment option for an additional 52.5 million shares. It is worth pointing out that Bluebird did not actually give out an official number of shares that were being offered. All the shares are being offered by Bluebird.

The underwriters for the offering are Goldman Sachs, Merrill Lynch and Cowen.

Excluding Tuesday’s move, the stock has outperformed the broad markets and is actually up 80% year to date. Over the past 52 weeks, the stock is up 172.5%.
Bluebird intends to use the net proceeds of this offering as follows:

To fund the potential exercise of our option to co-develop and co-promote our bb2121 product candidate, which has been exclusively licensed by Celgene Corporation, in the United States following the completion of the ongoing Phase I clinical study;
To fund our planned Phase I clinical study of our bb21217 product candidate in multiple myeloma;
To fund HGB-212, our planned Phase III clinical study of our LentiGlobin product candidate in patients with TDT who have a b0/b0 genotype;
To further build our commercial infrastructure in support of potential commercial launch of LentiGlobin in TDT in the United States and Europe pending regulatory approvals in the United States and Europe;
To fund the continued research and development of additional CAR T and TCR product candidates in oncology; and
To further expand our manufacturing platform and capabilities to support our ongoing and anticipated product development efforts, and in anticipation of a potential commercial launch.
We expect to use any remaining net proceeds from this offering for general and administrative expenses.

Shares of Bluebird Bio were trading down about 3% at $107.70 on Tuesday, with a consensus analyst price target of $106.31 and a 52-week range of $37.05 to $123.75.

​IPO

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​JUNE NEWSLETTER

​APPLE RECHARGES IN INDIA

​HEALTH CARE

With all eyes on the Federal Reserve’s Federal Open Market Committee and an expected rate hike this week, it is easy to forget that there is a whole wide world out there with other nations and other central banks and other financial markets. It was just a year ago that the world was awash with sovereign debt that was magically trading with negative yields, meaning that bond investors actually lose money (or pay money) just to get their money back.

With a global recovery underway, the raw dollars worth of negative yields in sovereign debt has been on the decline. While U.S. interest rates in Treasury debt have pulled back down, it turns out that there has recently been a rise in the total negative yields of sovereign debt.Fitch Ratings has issued a fresh report identifying that the amount of global negative-yielding sovereign debt outstanding rose substantially. This had been over $11 trillion a year ago, but it dropped to $8.6 trillion worth of negative sovereign debt yields as of March 1. Fitch released that May 31 levels on June 13, and that figure was back up to $9.5 trillion. What will be interesting is to see if the logic for having negative yields in more of a pro-growth world will continue.Fitch noted that the reduction of political uncertainly related to the French election and a weaker U.S. dollar spurred the increase. As a result, the amount of negative-yielding sovereign debt outstanding in France rose to $1.0 trillion from about $750 billion on March 1.Changes in the major issuers’ currency exchange rates accounted for about $400 billion of the increase in negative-yielding debt since March 1. But lower global yields contributed to the remaining $500 billion of the $900 billion increase.

Fitch further said:

The amount of negative-yielding debt had been declining since November of 2016, reaching a low among Fitch study periods in March of USD8.6 trillion. Higher yields have alleviated some pressure for investors, but challenges remain as yields in many developed economies are still near historic lows.Many insurance companies and other buy-and-hold fixed-income investors have significant allocations to medium- and longer-term sovereign debt. As long-term sovereign debt matures, reinvested proceeds will generate far less income in major European countries. In Germany, for example, the 10-year sovereign yield was positive 31 basis points as of May 31. This is higher than its sub-zero yield in mid-2016, but much below the 4% coupon on a 10-year issue maturing in 2018.
There are several issues to consider ahead outside of what Fitch has addressed, and the verdict will not be known for some time. As stocks rise, if they keep rising, the investor appetite for sovereign debt may decrease, pushing yields up. Perhaps the biggest unknown is what will happen when all of the major central banks start to unwind the trillions of dollars on their balance sheets.
According to Yardeni Research, the most recent balance of total assets owned by central banks around the globe was roughly $18.4 trillion. These were broken down as follows (rounded):
U.S. Federal Reserve: $4.4 trillion
European Central Bank: $4.6 trillion
Bank of China: $5.0 trillion
Bank of Japan: $4.5 trillion
Another big consideration will revolve around Brexit. Theresa May’s gamble for a snap election almost backfired, and now there is more uncertainty about how the Brexit process will take place. Uncertainty often sends yields lower, and the United Kingdom is listed as the world’s 10th largest economy by gross domestic product in the CIA World Factbook

​AMAZON TO BUY WHOLE FOODS