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According to Launch with GS, startups founded and co-founded by women generate 10% more in cumulative revenue growth over a five-year period than those founded by men. Jemma Wolfe, Head of Launch with GS, joins Yahoo Finance’s Julie Hyman, Brian Cheung and Pras Subramanian to discuss the program at Goldman Sachs on this week's Women and Money segment, sponsored by USAA.
Marcus by Goldman Sachs is looking to attract new customers by teaming up with retail mortgage lender Guaranteed Rate. Yahoo Finance's Dan Roberts, Heidi Chung, Kristin Myers and Julia La Roche discuss on YFi AM.
If business in partnership with government cannot adapt the global economy to avoid the worst impacts of climate change and generate inclusive growth that lifts people out of poverty and expands the middle class, the negative consequences will be vast. Companies have traditionally treated sustainability as a peripheral issue, focusing narrowly on the way they manage their impact on the environment. The evidence of climate change is clear.
Amazon Prime members still have nearly two weeks to have purchases delivered while non-Prime shoppers only have a few more days for free delivery.
A tight supply will raise Christmas tree prices above last year’s $78 average, but everyone should still be able to find one
The U.S. and China say they have a “phase one” trade agreement, a positive for the global economy. But details were scarce and the deal hasn’t been signed, which means trade issues could continue to rattle markets.
Dividend investors usually focus on companies that have a long track record of increasing their dividends year after year. The companies with at least 25 years of consecutive dividend increases are especially favored by income oriented investors. This is actually not a bad idea as long as these companies continue to increase dividends. However, when […]
Amazon had a big week with government issues, a host of new deals and announcements at its annual conference and developments in India.
Amazon (NASDAQ:AMZN) has reported a significant decline in its Amazon Web Services operating margin in recent quarterly earnings. The operating margin of AWS declined from 31.1% in the year-ago quarter to 25.1% in the latest quarter, a staggering 600-basis points fall.Source: Rocky Grimes / Shutterstock.com Despite a 35% year-over-year growth in revenue, the operating income grew by a mere 6%, excluding foreign exchange. One of the main reasons behind this sudden fall in operating income is the changing dynamics within the cloud industry.Microsoft (NASDAQ:MSFT) is the chief rival of AWS. It reported 59% growth in its Azure cloud segment. The revenue base of Microsoft's cloud segment has increased to a level at which it is competing with AWS on even the most lucrative of cloud deals. Microsoft recently won a $10 billion cloud contract from the U.S .Department of Defense. Amazon was another of the main bidders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPlus, Microsoft's multi-billion partnership with AT&T (NYSE:T) is also going smoothly. In the last few days, it has won a partnership with Salesforce (NYSE:CRM).We could also see Microsoft emerge as the chief cloud option -- outside of AWS -- for clients such as Walmart (NYSE:WMT). These factors can curb the growth of AWS and also squeeze its margins. This will be the biggest headwind for Amazon stock in the next few quarters. Negative Trends for AWSThe decline in overall operating income from Amazon was a bit shocking. Management cited growing shipping costs as one of the main reasons behind this decline. However, looking closely at all the business segments, we can see that AWS has played a key role in the fall of operating income. * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade Amazon reported 35% year-over-year revenue growth in AWS. This is a bit lower than in previous quarters, but it is still quite good. However, the operating income of AWS increased by a mere 6%. This is a big change compared to the year-ago quarter. AWS is the main contributor to Amazon's operating income.Hence, single-digit operating income growth in AWS played a big role in pulling down the overall operating income of the company. This also led to the first decline in company-wide operating margin in the last few quarters. Slower revenue growth and falling margins are a major challenge for Amazon stock Microsoft Goes All-InMicrosoft is making an aggressive pitch to gain market share in the cloud segment. The revenue growth in Azure has been higher than in AWS for the past few quarters. In the latest quarter, Azure grew by 59% compared to 35% growth in AWS.Microsoft does not break down the Azure revenues, but the consensus estimate is that it is right behind Amazon in terms of cloud market share. The commercial cloud revenue of the company which includes Azure, Office 365 commercial and Dynamics 365 reported year-over-year growth of 36% to $11.6 billion. More importantly, management mentioned that the gross margin of this segment expanded by 4 percentage points on a year-over-year basis. They forecast that this expansion will continue into fiscal 2020. Microsoft Has the AdvantageIn the long term, Microsoft has a number of important advantages against AWS. One of the biggest is that it is not Amazon. Clients in industries like retail, finance, healthcare and content streaming would like to avoid taking cloud services from Amazon as it is their main competitor. For example, Walmart made a strategic partnership with Microsoft in 2018 to buy cloud services. If Walmart were to buy the same cloud service from Amazon, it would only strengthen its chief rival.This is true even in international markets. Microsoft is the cloud provider for Jio and Eros Now in India. Both of these companies view Amazon as a competitor.Microsoft has been able to increase its revenue from India to over $1 billion on the back of the cloud push. This trend could repeat in other important international regions where Amazon provides retail services. Amazon is also focusing on its financial platform, which makes it a competitor to traditional financial players. Microsoft does not compete in this segment, making it a better alternative compared to AWS.MSFT also has the advantage of high margins in other segments. While Amazon depends heavily on AWS to boost its profits, Microsoft has a more diversified profit base. This allows Microsoft to give greater discounts to gain market share. We have already seen this in the growth rates of Azure mentioned above. If Amazon wants to show respectable growth in AWS, it would need to give higher discounts. This will end up hurting its operating margin in this segment as well as the overall margins. Impact on EarningsMicrosoft cloud growth will be the biggest headwind for Amazon stock in the next few quarters. It should be noted that recent estimates have valued AWS at a standalone valuation of over $500 billion, almost 60% of Amazon's market capitalization. If the revenue growth in this segment falls substantially or there is a further decline in AWS operating margins, we could see a bearish sentiment towards AMZN stock.AMZN stock's trailing price-to-earnings ratio is close to 80. This is quite high if the company shows a negative trend in earnings per share. The fall in operating margin in the latest quarter has led to a big decline in EPS and also reduced future EPS estimates.Investors should closely monitor the revenue and margin trends in AWS over the next few quarters. This will show if the recent results were due to some seasonal issue or if they are part of a long-term headwind. My Takeaway on AMZN StockMicrosoft is rapidly growing its cloud revenue which makes it a major challenge for AWS. In the latest quarter, Microsoft's Azure showed a revenue growth of 59% compared to 35% by AWS. The gross margins of the cloud operations of Microsoft have also expanded by 4% while the operating margin of AWS has declined by 6 percentage points compared to the year-ago quarter.Microsoft can continue to use its huge resources to build its cloud business. It will also be at an advantage due to the fact that it is a better option than AWS for many cloud consumers who view Amazon as their competitor. If the current trend of declining margins in AWS continues in the next few quarters, it could lead to negative sentiment towards AMZN stock.As of this writing, Rohit Chhatwal did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade * 7 Tech Stocks to Stuff Your Stocking With * 7 Sinfully Good Casino Stocks That Could Win the Jackpot in 2020 The post Amazon's Cloud Battle With Microsoft Weighs on AMZN Stock appeared first on InvestorPlace.
Goldman Sachs' upstart digital consumer bank is looking to attract new customers by partnering with a digitally-savvy retail mortgage lender.
Costco's (COST) comparable sales are hurt by one-half percent, owing to Thanksgiving happening a week later this year compared with the prior year.
Andy Dunn, the founder of menswear site Bonobos which sold to Walmart in 2017 for $310 million, is now parting ways with the retail giant. In it, Dunn praises the time he spent with the company and the knowledge he gained while working there. Specifically, he references several of Walmart's bigger initiatives, including its transformation into an omnichannel retail company serving customers online and offline, without distinction.
Advanced Micro Devices (NASDAQ:AMD) stock now faces another critical test. After Advanced Micro Devices stock broke through its stubborn price ceiling, the owners of AMD stock must now contend with the issue of the company's China business.Source: JHVEPhoto / Shutterstock.com Given AMD's potential profit growth, its current valuation may seem low.However, a breakdown of U.S.-China relations could destroy the bullish investment thesis on AMD stock. So though AMD may have somewhat priced in its current geopolitical challenges, investors need to be cautious about AMD stock. Advanced Micro Devices Stock Is Not ExpensiveAMD stock trades at a forward price-earnings (PE) ratio of just under 36. Analysts, on average, expect its earnings to increase 36%.49% per year over the next five years. That implies a price-to-earnings-to-growth (PEG) ratio of around one, indicating that AMD is worth buying.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, in a column published last month, I stated that the near-term prospects of AMD stock would hinge on U.S.-China relations. As long as there is no signed trade agreement between the countries, I remain cautious on AMD's China business. So investors must decide whether the PEG ratio of around one prices the China-related threats into Advanced Micro Devices stock.I would argue that it does. U.S.-China Relations Remain TenuousOptimism from the White House or proclamations that we're "on the verge" of a deal mean nothing. Hope won't do much for the top line of AMD. Moreover, even after the U.S. and China sign an agreement, it may have limited value, as time will tell whether the countries will actually honor the trade pact. * 7 Game-Changing Tech Stocks to Buy Now Furthermore, President Trump signed two bills backing the Hong Kong protesters. He did that over the objection of China's President Xi. Moreover, President Trump still plans to impose a 15% tariff on $160 billion of Chinese goods beginning Sunday. Although we have some indications that these tariffs will be delayed, they add to the uncertainty facing Advanced Micro Devices stock. Worst-Case Scenarios Do Not Appear LikelyStill, even if the reported agreement in principle between China and the U.S, falls through, I do not see a full-blown trade embargo between the U.S. and China as likely.Both economies depend heavily on one another. In the semiconductor industry, AMD is hardly the only company that depends on China for revenue. Almost every major chip maker --Intel (NASDAQ:INTC), Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM), and many others--all depend heavily on China.Still, Goldman Sachs estimates that about 26% of AMD's revenue comes from China. If that revenue falls sharply or disappears, most of the growth that AMD has achieved under the leadership of CEO Lisa Su would not be eliminated. However, the bullish investment thesis on Advanced Micro Devices stock would be torpedoed.If AMD's profit growth falls to average or below-average levels following difficulties with China, its forward P/E ratio of almost 39 would become high. Less than one year ago, the AMD stock price fell as low as $16.03 per share amid a sharp decline of tech stocks. A similar scenario could unfold again.However, if trade relations improve, both AMD's profit growth and Advanced Micro Devices stock could both move much higher. AMD stock price could face some resistance as it retests the dot-com bubble high of $48.50 per share. However, AMD's low PEG ratio indicates it could rise above the $50 per share mark under the right conditions. Consequently investors who want to buy AMD stock can cautiously proceed. The Bottom Line on Advanced Micro Devices StockRisk-averse investors can buy Advanced Micro Devices stock but should proceed carefully. AMD's PEG ratio makes it looks like a bargain. As massive earnings growth continues under the leadership of Lisa Su, AMD's forward PE of almost 39 seems justified.However, the company also depends heavily on China. The outlook of the trade agreement appears uncertain, and the positive investment thesis on Advanced Micro Devices stock could be destroyed if U.S.-China trade relations deteriorate.As things stand now, figuring out whether AMD stock will retest its 2018 lows or break through its dot-com-bubble high has become more difficult. However, at a PEG ratio of about one, taking a chance at this point could be worthwhile.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Worst Dividend Stocks of the Decade * 7 Game-Changing Tech Stocks to Buy Now * 5 Chinese Stocks to Buy for the Big 2020 Rebound The post Advanced Micro Devices Stock Is a Bargain, But It Still Faces China Risks appeared first on InvestorPlace.
(Bloomberg Opinion) -- The current bull market is historic. According to Goldman Sachs Group Inc., it’s been 10.7 years since the last 20% correction, the longest such run in more than 120 years. In 2019 alone, the S&P 500 Index has surged more than 25%, with recent gains being attributed in part to investors chasing performance as trade optimism lifted the market. Many on Wall Street use the acronyms FOMO (fear of missing out) and TINA (there is no alternative) to explain it.But if there are buyers who feel compelled to pile in to stocks at this time, they don’t include retail investors. In fact, when it comes to this group — and it’s a big one — the opposite is happening. According to Refinitiv Lipper, individual investors are slated to withdraw more than $135 billion from equity mutual funds and exchange-traded funds this year, the most since they started keeping records in 1992. Meanwhile, bond mutual funds and ETFs should see record inflows of over $250 billion this year. Why aren’t these investors chasing good performance?What we’re witnessing is a transformational shift that has been unfolding for years, one that’s also changing the very job description of the equity portfolio manager. With a good portion of American investors now aging and focused more on capital preservation than appreciation, investment flows are no longer motivated by performance, and the money trail shows it. Driving all this is the single most important influence in investing today, the modern wealth manager.According to Investment Adviser Association, the U.S. has 13,000 registered investment advisory firms, employing more than 436,000 wealth managers and directing more than 43 million accounts with a combined net worth of nearly $84 trillion. In other words, most of the wealth in the U.S. is now being directed, or at least influenced, by a wealth manager.The yearly survey conducted by TD Ameritrade Institutional stated that 88% of wealth managers use ETFs, the most popular investment vehicle in their arsenal. It’s estimated that two-thirds or more of all ETFs are held in accounts directed by wealth managers. It is not an understatement to say the ETF is the tool that created the wealth management industry. Prior to its creation, a wealth manager (stockbroker in days gone by) needed a large bank to back them. The ETF freed the wealth manager from this infrastructure, allowing them efficiently create client portfolios on their own. Today, half of the 13,000 wealth manager firms are one or two employees.Now, who are the 43 million clients of wealth managers? Demographics tell us they are older, as they have the bulk of the money. They have witnessed two 50% corrections in the stock market over the last 20 years, 2001 and 2008. These events colored their outlook, so they worry more about capital preservation over appreciation. This is where the wealth manager comes in, and the overwhelming solution is a variation of the 60/40 portfolio — that is, one weighted 60% in equities and 40% in bonds.This desire for safety is changing the face of active money management. The chart below shows the cumulative cash flows for open-ended mutual funds (the proxy for actively managed funds, in blue), ETFs (the proxy for passively managed funds, in orange) and the combination of the two (black):Investors are running away from active managers and toward passive investment choices, as seen in the surge in ETFs. But it is more than substituting into lower cost-equity vehicles. As the black line shows, they aren’t adding to their overall equity investment holdings at all. The last five years combined has seen virtually no new money flow into the stock market. Which is to say, FOMO and TINA aren’t the way investment money moves and haven’t been for years. Where is the money going, then? The next chart breaks down the cumulative inflows into all long-term ETFs detailed by stock (blue) and fixed income (orange). The bottom panel (red) shows the percentage of money flowing into fixed-income ETFs.Over the last five years, 40% of the flows into ETFs went into bond ETFs, almost perfectly tracking the 60/40 portfolio structure recommended by most wealth managers. My colleague Ben Breitholtz at Arbor Data Science detailed these flows further here.This simple but powerful trend is changing the landscape of investing like no other post-crisis trend. The public is getting what it wants, and it wants wealth managers holding their hand and positioning them for capital preservation via a 60/40 portfolio. They aren’t performance chasers looking for the next star manager to make them rich. Fund-management companies also understand they aren’t getting paid via inflows for stock picking, so they have re-oriented toward marketing objectives to reflect this reality.For strategists who haven’t grasped this concept and continue to look for the public to chase the hot hand, here’s a tip: That era is over.To contact the author of this story: Jim Bianco at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Jim Bianco is the President and founder of Bianco Research, a provider of data-driven insights into the global economy and financial markets. He may have a stake in the areas he writes about.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The US and China have reached a deal to partially ratchet down their trade war, ushering in a fragile detente in their economic relations after 20 months of on-and-off negotiations and tariff escalations that unsettled markets and damped global growth. The agreement, which was confirmed by officials in both Washington and Beijing on Friday, commits China to buying at least $40bn of US agricultural goods annually, tightens protection for US intellectual property and bans the forced transfer of technology from US companies. In exchange for those concessions, the US agreed not to proceed with a new escalation in levies on $156bn of Chinese consumer goods planned for Sunday, and it will cut tariffs on $120bn of Chinese imports that were introduced in September to 7.5 per cent from 15 per cent. Washington is still maintaining 25 per cent tariffs on about half of all Chinese imports, worth about $250bn, which were introduced since the trade war began between the world’s two largest economies in March 2018.
Some of the nation's top bankers are seeking to use technology to better serve a broader swath of American investors. Will one decide they want Robinhood in their quiver?