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Google closed on its record $2.4 billion purchase of the Chelsea Market Building in Manhattan on Tuesday, expanding its New York presence in a space that includes a popular ground level food hall and 300,000 square feet of development rights. There is one part of the property, investment manager Jamestown is keeping the branding rights and intellectual property connected to the Chelsea Market name outside of Manhattan. Buoyed by the enormous profit from the Google sale, Jamestown is planning to develop other chelsea Markets throughout the world that similarly combine cutting edge concepts in retail and office development. The firm is scouting a number of emerging neifhborhoods in Europe and the US similar to the Chelsea neighborhood and hopes to announce at least one, perhaps two Chelsea Market locations before the end of 2018 Based in Atalanta and Cologne Germany, Jamestown has more than $11.8 billion in assets under management. Properties include traditional office properties but also a numver of amenity rich mixed use develdopments in unusual locations
NEXT MOVE AGAINST AMAZON
FedEx Corp. (NYSE: FDX) and Walmart Inc. (NYSE: WMT) are bringing the fight to Amazon.com Inc. (NASDAQ: AMZN) with a newly expanded deal. FedEx now is planning to put 500 FedEx Office locations in select Walmart stores over the next two years.
Originally, this deal only included about 50 stores as a means to expand FedEx’s network and for Walmart to more effectively compete against Amazon.
This is the next anti-Amazon move for Walmart. While FedEx and Walmart have been up about 30% and 25%, respectively, in the past year, this move is a bet that the duo could gain even more against the Death Star that is Amazon.
These Walmart-based FedEx Office locations will offer customers convenient access to packing, shipping and printing solutions near where they shop, work and live. Customers also can conveniently direct their packages to be held at any Walmart-based FedEx Office location for up to five business days, either directly or by redirecting using FedEx Delivery Manager.
Brian Philips, CEO of FedEx Office, commented:
This strategic initiative between FedEx Office and Walmart builds on a shared goal of providing customers convenience and value, so they can save both time and money. The growth of our store network to 500 new locations brings our brand even closer to busy consumers who have told us they are seeking secure, reliable options for packing, shipping and receiving packages.
Daniel Eckert, senior vice president, Walmart Services and Digital Acceleration, added:
Our busy customers view our stores as a one-stop-shop for all the products and services they are looking for. We know shipping and printing is one such service they want to access in our stores, so we’re thrilled to expand our relationship with FedEx so that even more of our busy customers can take advantage of their pick up, drop off and printing services.24/7 Wall St.
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Shares of FedEx were last seen up more than 1% at $253.21, with a consensus analyst price target of $285.00 and a 52-week trading range of $182.89 to $274.66.
Walmart shares were trading up fractionally at $87.85. The stock has a 52-week range of $69.33 to $109.98 and a consensus price target of $105.32.
Amazon was trading about 1.5% higher, at $1,568.89 a share, in a 52-week range of $833.50 to $1,617.54. The consensus price target is $1,670.66
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Things were really chugging along for President Trump and the new administration until they hit a massive speed bump. The inability to repeal and replace Obamacare the first time around sent a big signal to the markets — a signal that political instability in the United States combined with the Brexit and other eurozone elections, on top of the possibility for currency risks around the globe, make instability a distinct possibility.
In a new research report, JPMorgan, while not expecting any huge breakout in the price of gold, like other firms on Wall Street, does think the floor is in. The firm also feels that owning the right companies makes sense given the current global environment. The report noted this:
We believe gold has attractive investment appeal as a hedge against inflationary surprises, compressed real rates and “black-swan” type political risks. Yet a flat gold outlook diminishes the rationale for owning leveraged equities.
It went on to list three specific qualities JPMorgan is looking for in top stocks to own:
Stock specific equity rerating catalysts
A credible road map to grow exposure to the gold price and grow shareholders returns in a flat gold price environment
Attractive valuation support
Five gold stocks are rated Overweight at JPMorgan.
Agnico Eagle Mines
This top stock is JPMorgan’s most preferred U.S. gold producer. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden. The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.
While the company missed fourth-quarter earnings estimates as sales were lower than production, the company unveiled plans to grow gold output to 2 million ounces by 2020 with new output from the Meliadine and Amaruq mines. The Merrill Lynch analysts feel that the company’s ambitious plans for 2020 are achievable.
Shareholders receive a 0.9% dividend. The JPMorgan price target for the stock is $60, and the Wall Street consensus target is $51.75. The shares closed Wednesday at $43.16.
This small cap company provides more aggressive accounts a lower price to add more shares. Gold Fields Ltd. (NYSE: GFI) produces gold and holds gold reserves in South Africa, Ghana, Australia and Peru. It engages in underground and surface gold and surface copper mining and related activities, including exploration, extraction, processing and smelting.
The company holds interests in eight operating mines with an annual gold production of approximately 2.16 million ounces, as well as mineral reserves of approximately 46 million ounces and mineral resources of approximately 102 million ounces. It also produces copper in Peru and holds attributable copper mineral reserves totaling 532 million pounds and mineral resources totaling 910 million pounds.
JPMorgan has a $5.36 price target. The consensus target is $3.76, and shares closed Wednesday at $3.60.
Consumers are confident. Extremely confident. The economic news might have been expected to be weak considering eight straight days of a drop in the Dow Jones Industrial Average. Apparently consumers did not get the memo that some enthusiasm needs to be tempered. This actually looks to be the strongest consumer confidence reading since 2000.
The Conference Board released its monthly Consumer Confidence Index for March, showing a sharp gain on top of what had already been strong readings. The index rose to 125.6 in March, handily higher than the 116.1 reading in February. February’s level had been revised higher than the initial 114.8 reading.
Bloomberg was calling for slight drop down to 113.8, and the Econoday range of estimates was 110.0 to 118.0.
The strength in consumer confidence was higher in the current data and in the expectations. Tuesday’s report showed that the Present Situation Index rose from 134.4 in February to 143.1 in March. A similar gain was seen in the Expectations Index, rising from 103.9 in February to 113.8 in March.
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What makes Tuesday’s report so interesting is that it comes on the heels of eight straight days of stocks closing lower. That was a trend not seen since 2011, but the markets are still quite close to all-time highs.
Unusual strength in confidence readings has been the standout feature of the post-election economy. The consumer confidence index has yet to slow, pressing to new cycle highs in February as the spread between optimists and pessimists continued to widen. The March consensus for the consumer confidence index is 113.8 in what would be only a small downtick from February’s 114.8.
Consumers’ appraisal of current conditions improved considerably in March. Consumers were also significantly more optimistic about the short-term outlook. It also turns out that the consumer outlook for the labor market was also more upbeat in March. These readings were quantified as follows:
The percentage saying business conditions are “good” increased from 28.3 percent to 32.2 percent.
Those saying business conditions are “bad” decreased from 13.4 percent to 12.9 percent.
The percentage of consumers stating jobs are “plentiful” rose from 26.9 percent to 31.7 percent.
Those claiming jobs are “hard to get” decreased moderately, from 19.9 percent to 19.5 percent.
The percentage of consumers expecting business conditions to improve over the next six months increased from 23.9 percent to 27.1 percent.
The percentage of consumers expecting business conditions to worsen declined from 10.5 percent to 8.4 percent.
The proportion expecting more jobs in the months ahead increased from 20.9 percent to 24.8 percent.
The proportion expecting fewer jobs declined from 13.6 percent to 12.2 percent.
The percentage of consumers expecting their incomes to increase improved from 19.2 percent to 21.5 percent.
The percentage of consumers expecting a decrease declined from 8.1 percent to 7.0 percent.
Lynn Franco, Director of Economic Indicators at the Conference Board, said of March’s huge boost in consumer confidence:
Consumer confidence increased sharply in March to its highest level since December 2000. Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.
Stocks reacted positively to the news of consumer confidence blowing away expectations. The Dow and the S&P 500 both went from slight drops to modest gains
This top company with a solid balance sheet makes sense for investors to consider. Goldcorp Inc. (NYSE: GG) engages in the acquisition, exploration, development and operation of precious metal properties in Canada, the United States, Mexico and Central and South America. It primarily explores for gold, silver, copper, lead and zinc deposits.
Goldcorp’s principal mining properties include the Red Lake, Éléonore, Porcupine and Musselwhite gold mines in Canada; the Peñasquito and Los Filos mines in Mexico; the Marlin property in Guatemala; the Cerro Negro and Alumbrera mines in Argentina; and the Pueblo Viejo mine in the Dominican Republic.
Some Wall Street analysts feel that the company deserves a premium valuation to its peers due to its excellent balance sheet, growth profile with lower cost new mines, longer average mine life and a solid dividend yield. Over the past few years, Goldcorp has been altering its mine plans, cutting spending and disposing assets in order to reduce costs and focus on the most profitable production.
While some on Wall Street reduced estimates for 2017 and 2018 recently, most are positive on the company’s growth strategy that intends to boost output by 20% and lower all-in sustaining costs by 20%, all by the year 2020.
Goldcorp investors receive a 0.55% dividend. The $22 JPMorgan price target compares with the consensus target of $18.17. Shares closed Wednesday at $14.91.
This is one of the largest mining companies, and a solid buy for more conservative accounts. Newmont Mining Corp. (NYSE: NEM) is a leading gold and copper producer. It employs approximately 29,000 employees and contractors, with the majority working at managed operations in the United States, Australia, Ghana, Peru, Indonesia and Suriname. Newmont is the only gold producer listed in the S&P 500 index, and it was named the mining industry leader by the Dow Jones Sustainability World Index in 2015.
The company is an industry leader in value creation, supported by its leading technical, environmental, social and safety performance. Newmont was founded in 1921 and has been publicly traded since 1925.
Newmont announced recently that “first gold” has been poured at its new mine, called the Merian gold mine in Suriname in South America. Newmont reported Merian contains gold reserves of 5.1 million ounces and that annual production is expected to average between 400,000 and 500,000 ounces of gold at competitive costs during the first five full years of production.
The company reported solid fourth-quarter results that beat Wall Street consensus estimates. Newmont also gave 2017 guidance that called for 5% year-over-year output growth and 6% for all-in-sustaining-costs. The company also noted the several options exist for the company to longer-term gold output even higher. The company posted free cash flow of $289 million for the quarter.
JPMorgan has its price target set at $43. The consensus target is $39.05, and shares closed Wednesday at $33.19.
This company has remained a top pick at JPMorgan for years. Randgold Resources Ltd. (NASDAQ: GOLD) explores for and develops gold deposits in sub-Saharan Africa. It holds interests in the Morila, Loulo and Gounkoto gold mines, which are located in Mali, West Africa, as well as the Tongon mine, situated within the Nielle exploitation permit in the north of Côte d’Ivoire, and the Kibali mine, located in the Democratic Republic of Congo.
The company increased 2016 production to a new high of 1.25 million ounces to achieve its annual guidance. All the operations contributed to this effort, with its flagship Loulo-Gounkoto complex in Mali posting particularly good results.
Shareholders receive a 1.1% dividend. The JPMorgan price target of $100 compares with the consensus target of $101.98. Shares closed most recently at $87.68.
Congress approved a $1.3 trillion spending bill. According to Reuters:
The U.S. Congress voted early on Friday to approve a $1.3-trillion government funding bill with large increases in military and non-defense spending, sending it to President Donald Trump, who was expected to sign it into law.
With Trump’s signature, the bill will avert a threatened government shutdown and keep federal agencies funded until Sept. 30, ending for now Washington’s constant budget squabbles and letting lawmakers focus on getting reelected in November.
Steven Wynn sold his entire holding in Wynn Resorts Ltd. (NASDAQ: WYNN) after sexual harassment charges forced him to step down as chief executive officer. According to The Wall Street Journal:
Steve Wynn sold his entire stake in Wynn Resorts on Wednesday and Thursday, the company said, the final step in a dramatic exit after female employees made allegations of sexual misconduct against the casino giant’s co-founder.
The sale of $2.1 billion worth of stock over two days followed a series of moves he and the company made in recent weeks to allow Mr. Wynn to untangle himself from the casino corporation amid a series of investigations by state gambling regulators.
U.S. music revenue rose last year. According to The Wall Street Journal:
The music industry’s rebound continues as revenue in the U.S. rose significantly for two consecutive years for the first time since its 1999 peak, thanks almost entirely to the rise of streaming services.
Domestic retail revenue jumped 17% in 2017 to $8.7 billion, according to an annual report from the Recording Industry Association of America, a trade group for recorded-music companies. While that marks a return to the same level reached a decade ago, it is still 40% lower than the industry’s high-water mark, $14.6 billion, as physical and digital format sales continue their long decline.
China retaliated to Trump’s trade tariffs. According to CNBC:
China is taking a measured approach with its proposal to slap retaliatory tariffs on U.S. goods, according to experts.
Beijing on Friday said it may target 128 U.S. products with an import value of only $3 billion in response to President Donald Trump’s announcement of tariffs on up to $60 billion in Chinese imports.
U.S. goods exported to China in 2016 totaled $115.6 billion, according to official data. Given the size of the two countries’ trade, Beijing’s limited focus on just $3 billion of U.S. imports is “very cautious,” according to a former assistant U.S. Trade Representative for China Affairs.
Sears Holdings Corp. (NASDAQ: SHLD) debt was downgraded According to CNNMoney:
Sears had some of its debt downgraded to default status for the first time this week.
But the move that led to the downgrade wasn’t a missed loan payment. It was because it completed a refinancing of some of its debt that will save the company an estimated $60 million a year.
The financially struggling retailer announced Wednesday that it had exchanged nearly $500 million of its debt that had been due this year or next year for debt that will not be due as soon. It may also be able to repay some of the debt with stock at some point in the future.
As a result, credit rating agencies Fitch and Standard & Poor’s both downgraded the debt to default status. The debt had already been at the lowest level of junk bond status.
Some investors sued Facebook Inc. (NASDAQ: FB) after its data harvesting debacle. According to CNNMoney:
Investors are suing Facebook in the wake of the Cambridge Analytica scandal, which sent the company’s value plunging almost $50 billion this week.
Facebook shareholder Fan Yuan filed the lawsuit in federal court in San Francisco on Tuesday. The lawsuit was brought on behalf of an undisclosed number of investors who bought Facebook shares between February 3, 2017, and March 19, 2018.
The lawsuit said Facebook “made materially false and misleading statements” about the company’s policies, and claims Facebook did not disclose that it allowed third parties to access data on millions of people without their knowledge.
Steve Wynn plans to sell some or all of his entire $2.2 billion stake in the casino company he founded, a week after settling an acrimonious court fight with his ex-wife that freed each to do as they wish with their share of the family fortune.
His plans for the 12 percent holding in Wynn Resorts Ltd. were outlined in a regulatory filing Wednesday. The 76-year old mogul “will seek to conduct such sales in an orderly fashion and in cooperation with the company,” it said. “No assurance can be provided that Mr. Wynn will elect to sell common stock.”
The potential sale and the unwinding of the shareholder agreement that prevented Elaine Wynn from lowering her 9.3 percent stake potentially make Las Vegas-based Wynn Resorts vulnerable to a takeover. Casino regulators in Nevada, Macau and Massachusetts are still investigating the company’s handling of harassment claims against Steve Wynn that were first raised in the couple’s bitter six-year court battle -- probes that could result in him being found unfit to be the largest shareholder in a casino company.
Wynn Resorts fell 2.2 percent to $180.19 at 1:09 p.m. in New York after losing as much as 2.9 percent. The stock was up 9.3 percent this year through Tuesday.
From the perspective of casino regulators, a divestiture by Wynn “de-risks the story,” according to Instinet analyst Harry Curtis. The potential sale, however, “could place a temporary overhang on the stock.”
Elaine Wynn said this week that she may seek talks with company management over a variety of matters, including strategy, business, management, capital structure and allocation, corporate governance, and board composition.
In a separate filing Wednesday, Wynn Resorts said the investigations, litigation and possibility of further allegations could distract management, hurt the company’s reputation and affect its ability to hold casino licenses.
Ford Motor Co. (NYSE: F) announced Monday that it is launching an online sales tool to give vehicle buyers the ability to search dealer inventory, view pricing and incentives, lock-in a deal, apply for financing, estimate trade-in value, and schedule a test drive before ever visiting a dealer showroom.
The new tool that Ford calls Ready.Shop.Go launches this month in several Midwestern states and will be available throughout the United States by the end of the year. The company said that future features include customizable purchase and lease options and allow customers remotely to review and digitally execute contracts with Ford Credit.
Mark LaNeve, Ford’s vice-president for U.S. marketing, sales and service said:
Our customers are busy people, whether with daily work demands or spending time with their families. Quality time is scarce and downtime is even more so. Ready.Shop.Go. allows them to find the perfect vehicle online, spend significantly less time at the dealership and drive away with their new ride sooner.
According to its own research, Ford notes that 57% of people ages 30 to 44 say they are more impatient than they used to be, and that percentage rises to 63% among people between the ages of 18 and 29. More than half of those included in the survey say they considering using the internet to be a productive use of time.
Here’s what Ford claims the new tool offers:
Pricing transparency – participating dealers set vehicle pricing, including taxes and fees
Finance and lease options
Consumer promise honoring quoted deal for 48 hours (subject to vehicle availability)
Pricing comparison – review actual prices with the Kelley Blue Book® Price Advisor and Trade-In Values
Options for scheduling test drives
Online credit application process through Ford Credit
Ability to save a deal and return later to complete the process
Customer selects preferred method of contact by dealership
Assignment of single point of contact on the dealer end to ensure the experience is well managed for the customer throughout the process
Ford’s Lincoln division already offers a pilot program under which dealers bring a vehicle to a customer’s home for a test drive and, in some cases, actually buy the vehicle at home. Other carmakers also offer services similar to Ready.Shop.Go, and several offer monthly subscription services.
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MARCH NEWSLETTER 4
Ford Motor Co. (NYSE: F) shares hit the brakes on Thursday after the auto giant announced that there would be some changes at the executive level. Overall, Ford is looking to strengthen its focus on the Ford brand as it furthers its transformation.
The firm announced that Musa Tariq, vice president and chief brand officer, has elected to leave the company. Tariq joined Ford in 2017 and helped shape the values that underpin the Ford brand.
For the immediate future, the Ford brand work will continue under the leadership of Ford Chief Marketing Officer Joy Falotico.
Jim Hackett, Ford president and CEO, commented:
Musa is a proven leader of brand transformation, having led similar work at some of the world’s most admired brands before coming to Ford, and he is a leader known for creativity and social media expertise. Over the last year, he has been helping to drive the same transformation at Ford. We are grateful for his service and will carry on the work he has started.
Excluding Thursday’s move, Ford has underperformed the broad markets, with its stock down 10% in the past 52 weeks. In 2018 alone, the stock is down 4%.
Shares of Ford were last seen down 1% at $10.99 on Thursday, with a consensus analyst price target of $12.39 and a 52-week range of $10.14 to $13.48.
One in six American households that pay for broadband internet access is no longer buying a multi-channel pay-TV package. They’re not buying from a cable company, a satellite company or even from a streaming service.In a new report cited in Wednesday’s New York Post, researchers at SNL Kagan projected that the total number of U.S. broadband-only homes had reached 15.4 million. That’s more than all the households in CaliforniaThe total number of 2016 cord-cutters rang in at 1.8 million. In the fourth quarter alone, 460,000 pay-TV customers dropped their subscriptions.The data were reported earlier this month by SNL Kagan, a division of S&P Global Market Intelligence.
By 2021, SNL Kagan expects the total number of U.S. households without pay-TV service to nearly double to 28 million. That’s about equal to the total number of households in California, New York and Texas.And that may be an underestimate, according to SNL Kagan’s Tony Lenoir, who told the Post:That forecast could end on the conservative side given the speed at which the TV ecosystem and the US broadband landscape are evolving.Cable subscriber numbers dropped by 472,000 in 2016, the industry’s best result since 2007. More than 100,000 of those losses came in the fourth quarter. Direct-broadcast satellite shed 18,000 subscribers in the fourth quarter, and the planned discontinuation of AT&T’s U-verse service led to a loss of 338,000 subscribers for the telcos