Facebook has created ‘too many adversaries,’ says analyst who just downgraded the stock

Mark Zuckerberg, chief executive officer and founder of Facebook Inc., listens during the Viva Technology conference in Paris, France, on Thursday, May 24, 2018. 

Marlene Awaad | Bloomberg | Getty Images
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., listens during the Viva Technology conference in Paris, France, on Thursday, May 24, 2018.

Stifel on Wednesday published a note saying it has lowered its rating for Facebook shares from “Buy” to “Hold,” saying political and regulatory blowback could restrict how the company operates in the long term.

“Facebook’s management team has created too many adversaries — politicians/ regulators, tech leaders, consumers, and employees — to not experience long-term negative ramifications on its business,” the firm said in a note.

The lower rating comes after a rough year in which Facebook has experienced numerous scandals, a 30-million user data breach, declining and stalling growth in key markets, an executive exodus and its worst stock performance since going public in 2012.

Stifel also published the latest results from an on-going survey of Facebook users.

The results showed 79 percent of those surveyed now believe Facebook’s impact on society is neutral or negative, compared to 73 percent in survey results published by the firm in January. The survey also found that 60 percent of respondents said they rarely or never used Facebook Stories, Marketplace or video, which are some of the company’s key new products.

Stifel said there is no downside to holding Facebook shares, but the firm no longer believes the company’s upside is what it once was.

“We believe Facebook will struggle to return to the company that it once was or that investors expected it to be in the long run,” the note reads. “We prefer Amazon, Alphabet, and Netflix, as U.S.-based mega caps with similar thematic trends and more stable operating environments.”

Facebook board: Sandberg's request to probe Soros 'entirely appropriate'
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Arrest of Huawei CFO shows ‘the gloves are now fully off,’ says Eurasia Group

Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum "Russia Calling!" in Moscow, Russia October 2, 2014.

Alexander Bibik | Reuters
Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum “Russia Calling!” in Moscow, Russia October 2, 2014.

The arrest of Huawei’s global chief financial officer in Canada, reportedly related to a violation of U.S. sanctions, will corrode trade negotiations between Washington and Beijing, risk consultancy Eurasia Group said Thursday.

“Beijing is likely to react angrily to this latest arrest of a Chinese citizen in a third country for violating U.S. law,” Eurasia analysts wrote.

In fact, Global Times — a hyper-nationalistic tabloid tied to the Chinese Communist Party — responded to the arrest by posting on Twitter a statement about trade war escalation it attributed to an expert “close to the Chinese Ministry of Commerce.”

“China should be fully prepared for an escalation in the #tradewar with the US, as the US will not ease its stance on China, and the recent arrest of the senior executive of #Huawei is a vivid example,” said the statement, paired with a photo of opposing fists with Chinese and American flags superimposed upon them.

[“source=cnbc”]

Police raids were not the fault of Deutsche Bank management, CFO says

 

Money laundering investigation not connected to current management: Deutsche Bank CFO

Investigation not connected to current management: Deutsche Bank CFO   16 Hours Ago | 03:05

Police raids on Deutsche Bank’s offices in Frankfurt last week were not the fault of the current management team, according to the firm’s chief financial officer (CFO).

Two Deutsche Bank staff members are suspected of helping clients set up off-shore businesses to launder money gained from criminal activity.

The wrongdoing is alleged to have continued through to 2018 but the bank’s financial chief, James von Moltke, told CNBC’s Annette Weisbach Thursday that current executives shouldn’t shoulder the blame.

“To date, we are not aware of any wrongdoing on our part, so we will await the conclusion of the prosecutors,” Von Moltke said.

James von Moltke, chief financial officer of Deutsche Bank AG, speaks during a fourth quarter results news conference in Frankfurt, Germany, on Friday, Feb. 2, 2018. 

Andreas Arnold | Bloomberg | Getty Images
James von Moltke, chief financial officer of Deutsche Bank AG, speaks during a fourth quarter results news conference in Frankfurt, Germany, on Friday, Feb. 2, 2018.

Following the comments, Deutsche Bank shares pared losses slightly, but remained around 3 percent lower for the session amid a wider sell-off in global markets.

The public prosecutor’s office in Frankfurt said an evaluation of data from the Panama Papers had triggered suspicion that the bank may have helped customers create offshore companies in tax havens around the world.

In 2016 alone, more than 900 customers with a business volume of 311 million euros ($353.6 million) were thought to have been cared for by a Deutsche Bank subsidiary based in the British Virgin Islands, the prosecutor said.

Von Moltke rejected the suggestion that Deutsche Bank’s present board had been weakened by the raid, adding that the current management team had made “enormous efforts” to improve controls on its system to better understand clients.

Shares of the bank slipped heavily following news of the

e police action and the firm’s corporate bond value also fell.

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Alphabet’s self-driving car business, which just launched a commercial taxi service, could book $114 billion in revenue in 2030, says UBS

Source: Waymo

Waymo’s first commercial pilot may be small, but Wall Street has big projections for the company’s financial future.

Alphabet’s self-driving car unit could book $114 billion in revenue in 2030, according to a base-case estimate from investment bank UBS.

In its self-driving taxi test in the suburbs around Phoenix, Waymo will charge a small number of people fares competitive with rides Lyft and Uber. But as Waymo adds more cars and locations, it could also license its maps and an autonomous vehicle operating system to other service or car-markers, or monetize the eyeballs of riders through entertainment or advertising, UBS analyst Eric Sheridan writes in a note to clients on Thursday.

To put that $114 billion into perspective, Intel released a study in June of last year that projected that the self-driving space would generate $800 billion in cumulative revenue by 2035. UBS’s estimate only included Waymo’s revenue from robotaxi-related services, though Sheridan believes it has opportunities in logistics and commercial delivery as well.

Aside from Waymo, a host of other tech and auto companies are racing to launch their own self-driving taxi services, including GM’s Cruise and Uber. While Waymo’s technology is widely seen as the most advanced, as highlighted by its Wednesday launch, there are still a host of regulatory and safety concerns on the table. Waymo’s pilot will still include safety drivers to supervise rides, for example, at least initially.

Overall, UBS pegs Waymo’s total value between $25 and $135 billion, with a base case valuation of $75 billion. Morgan Stanley valued Waymo at $45 billion in August, with the potential to grow to $175 billion.

[“source=cnbc”]

Alphabet’s self-driving car business, which just launched a commercial taxi service, could book $114 billion in revenue in 2030, says UBS

Source: Waymo

Waymo’s first commercial pilot may be small, but Wall Street has big projections for the company’s financial future.

Alphabet’s self-driving car unit could book $114 billion in revenue in 2030, according to a base-case estimate from investment bank UBS.

In its self-driving taxi test in the suburbs around Phoenix, Waymo will charge a small number of people fares competitive with rides Lyft and Uber. But as Waymo adds more cars and locations, it could also license its maps and an autonomous vehicle operating system to other service or car-markers, or monetize the eyeballs of riders through entertainment or advertising, UBS analyst Eric Sheridan writes in a note to clients on Thursday.

To put that $114 billion into perspective, Intel released a study in June of last year that projected that the self-driving space would generate $800 billion in cumulative revenue by 2035. UBS’s estimate only included Waymo’s revenue from robotaxi-related services, though Sheridan believes it has opportunities in logistics and commercial delivery as well.

Aside from Waymo, a host of other tech and auto companies are racing to launch their own self-driving taxi services, including GM’s Cruise and Uber. While Waymo’s technology is widely seen as the most advanced, as highlighted by its Wednesday launch, there are still a host of regulatory and safety concerns on the table. Waymo’s pilot will still include safety drivers to supervise rides, for example, at least initially.

Overall, UBS pegs Waymo’s total value between $25 and $135 billion, with a base case valuation of $75 billion. Morgan Stanley valued Waymo at $45 billion in August, with the potential to grow to $175 billion.

[“source=cnbc”]

Tech IPO candidates for 2019 aren’t yet deterred by market volatility, JPMorgan vice chairman says

 

JPMorgan Vice Chairman says 2019 IPO candidates have not yet been impacted by market volatility

JPMorgan Vice Chairman says 2019 IPO candidates have not yet been impacted by market volatility   8 Hours Ago | 04:44

Despite the recent market volatility that’s pushed the S&P 500 down 8 percent since mid-September, technology companies headed for the IPO markets have yet to adjust their plans, according to Noah Wintroub, vice chairman at J.P. Morgan Chase who oversees tech investment banking in San Francisco.

“At J.P. Morgan we haven’t seen anybody change their view of their timing or expectations based on the markets,” said Wintroub, in an interview with CNBC on Monday from the firm’s [r]Evolution conference, which is focused on private and public technology companies. “We’ll continue to see what happens in 2019, what happens on a macro basis, what the market is doing, and if the market is super volatile, people may change their plans.”

Wintroub said that there’s generally about a six-month lag from the time a company decides to go public and the actual IPO, and in that time conditions can certainly change. But for larger more established companies, those swings tend to be a “little less relevant” than for smaller companies with less mature businesses, he said.

Next year is gearing up to be a banner year for tech IPOs, with Uber, Lyft, Airbnb, Pinterest and Slack all indicating that they may be preparing for upcoming debuts. On Thursday, Lyft said it had filed a confidential prospectus, setting the stage for an IPO. CNBC reported in October that Lyft hired J.P. Morgan, Credit Suisse and Jefferies to manage the deal, which is expected to take place in early 2019.

WePay CEO Bill Clerico speaks with J.P. Morgan CEO Jamie Dimon.

Source: Nghi Cao
WePay CEO Bill Clerico speaks with J.P. Morgan CEO Jamie Dimon.

Wintroub declined to speak about specific clients.

He said tech’s position in the spotlight this year has marked a “critical moment for our community.” Privacy and safety concerns, platform manipulation and the #MeToo movement have all hit the industry, and employees at companies including Google and Facebook have been vocal in protesting certain practices by their employers.

“When you are doing great things but have a lot of power concentrated, we have to be careful about how we build our communities, how we empower other people and how we’re conscious of the impact we have,” Wintroub said.

[“source=cnbc”]

The Fed is fighting 4 inflationary trends it can’t control, Cramer says

Fed fighting trends it can't control, says Cramer

Fed fighting trends it can’t control, says Cramer   4 Hours Ago | 01:17

The Federal Reserve is navigating four trends that it can’t control, but that directly affect its policies, CNBC’s Jim Cramer said Thursday after the stock market recovered from a massive intraday decline.

Stocks mounted a recovery late Thursday after the Wall Street Journal reported that Fed officials are seriously considering taking a wait-and-see approach to the central bank’s 2019 interest rate plans after a widely expected rate hike in December.

But four disruptive trends — decreasing immigration, state-level minimum wage boosts, a nationwide lack of truckers and the ongoing trade dispute between the United States and China — are turning into an “awfully awkward situation” for the Fed, which is tasked with keeping inflation under control while keeping the economy humming, Cramer said.

“The Fed is fighting four trends that it doesn’t have any control over that are creating inflation,” the “Mad Money” host said.

First is President Donald Trump’s crackdown on immigration, which translates into fewer workers, especially those willing to take lower-wage jobs, and therefore higher wages. Second are state-level minimum wage boosts that amount to government-mandated wage inflation.

Third is the countrywide truck driver shortage, which has become “a major reason for all sorts of companies to raise prices … in order to make their customers eat higher shipping costs,” Cramer explained.

Fourth, but certainly not least, is the United States’ trade dispute with China, further escalated this week by the arrest of the CFO of Huawei, one of China’s most important companies. While Trump and China’s president seemed to agree to a ceasefire over the weekend, the arrest “makes the odds of a good trade deal most unlikely,” Cramer argued.

All four of these ongoing issues directly affect the Fed’s policy, and that’s what’s putting this independent entity in a bind when it comes to planning for the year ahead and maneuvering other major, economy-altering changes like the rise of workplace automation.

“Think about it: the Fed can’t change immigration laws. The Fed can’t lower the minimum wage. The Fed can’t train more truck drivers. The Fed can’t stop Trump from raising the tariffs,” Cramer said. “So what can it do? Well, they can make it too expensive, or too scary, for businesses to hire more people.”

Cramer, who has argued that the Fed should take a data-dependent, wait-and-see approach to its rate hike agenda, again called for more “common sense” and “prudent data dependence” at the central bank.

But, for now, investors might want to consider keeping their powder dry instead of trying to buy the market’s swings, the “Mad Money” host advised.

“If you took a long-term approach, buying stocks into weakness today based on their intrinsic worth rather than their minute-to-minute value, you actually came out on top as the averages roared back from their lows,” he said. “However, there are two caveats. We don’t know what the White House is planning on trade and we don’t know how the Fed will react to tomorrow’s employment number. For today’s lows to hold, at least one of these institutions needs to be rational and prudent. Who knows? Crazier things have happened.”

[“source=cnbc”]

Huawei arrest just made companies like Apple less valuable, Jim Cramer says

Huawei arrest made companies, including Apple, less valuable: Cramer

Huawei arrest made companies, including Apple, less valuable: Cramer   4 Hours Ago | 01:13

U.S.-based technology companies with business in China automatically lost value on news of the arrest of Huawei CFO Meng Wanzhou, who has reportedly been accused of violating U.S. sanctions, CNBC’s Jim Cramer said Thursday.

The arrest, which occurred in Canada on Saturday and was announced Wednesday, “means any tech company that does a huge amount of business in China, including Apple or Micron or Intel or Skyworks or Qualcomm or Broadcom, is worth a little less today than it was yesterday,” Cramer, host of “Mad Money,” told investors.

Tech colossus Huawei, the world’s second largest phone seller and one of China’s most important companies, has been a cornerstone both of Chinese technological pride and of spying concerns from U.S. government officials. A rival of Samsung and Apple in the smartphone arena, Huawei counts Qualcomm and Intel among its suppliers.

The arrest of its global CFO could mark a setback in U.S.-China trade relations, a notion that Wall Street took to heart. To Cramer, calling the event an “escalation” in tensions was “one of the biggest understatements of the year.”

“To say that it could wreck any further negotiations seems reasonable,” he said. “Until we know more, we have to figure there could be more downgrades ahead [and] more pain to come in these tech stocks, unless the CFO is allowed to return to China, or at least released on her own recognizance.”

“Even then, we’re in seriously uncharted waters here,” he said. “Caution is warranted, at least on the Chinese-related tech stocks, until we know more.”

Moreover, it gives the White House “hardliners” on China — namely Trade and Industrial Policy Director Peter Navarro, Vice President Mike Pence and U.S. Trade Representative Robert Lighthizer — more “ammunition” in their push to slow China’s rise to power, Cramer said.

“These guys want to maintain America’s place as the world’s sole superpower. They believe some pain needs to be taken, even if it hurts corporate profits, to prevent China from challenging the U.S. hegemony,” the “Mad Money” host explained. “This kind of thing gives the hardliners a lot of ammunition because it illustrates that trade with China is about a lot more than making money.”

Stocks fell dramatically in the first half of Thursday’s trading session, at one point bringing the Dow Jones Industrial Average’s two-day losses to over 1,500 points. The major averages mounted a recovery into the close, though the Dow and the S&P 500 index still ended the day lower.

[“source=cnbc”]

US is well on its way to Trump’s goal of ‘energy dominance,’ says Marathon Petroleum CEO

US on its way to Trump's goal of 'energy dominance,' says Marathon CEO

US on its way to Trump’s goal of ‘energy dominance,’ says Marathon CEO   13 Hours Ago | 01:26

President Donald Trump’s goal of making the United States a global superpower in energy is starting to come true, Marathon Petroleum Corp. Chairman and CEO Gary Heminger told CNBC on Tuesday.

“When I look at the president’s theme to begin with and the beginning of his administration, he wanted to have energy dominance in the U.S. and I believe that we are well on our way,” Heminger told Jim Cramer in an exclusive “Mad Money” interview. “We’re the largest producer in the world today.”

Recent declines in oil prices haven’t stopped U.S. producers from pumping more oil ahead of OPEC’s meetings later this week, at which the group of oil-exporting countries are expected to cut production.

That puts the United States in a league above its competitors, said the Marathon chief, whose Ohio-based company specializes in petroleum refining, marketing and transportation.

“The U.S. refining system [is] second to none of anyone in the industry, so I believe we’re well on our way now” to global energy dominance, Heminger said.

The CEO added that he expected OPEC’s meetings in Vienna, Austria this Thursday and Friday to result in “a pullback in OPEC production,” in which case “we’ll see crude prices inch up” from their current levels.

And although oil’s recent pummeling has benefited business at Marathon — where oil is part of Marathon’s cost of goods sold, so price declines translate into higher margins — Heminger said the company sees prices for the benchmark West Texas Intermediate crude rising significantly in 2019.

“We really believe the price is probably going to end up being … $65 to [$]70 in 2019, on an average,” he said. “I believe we’ve averaged almost $65 — about [$]64.50 — year to date in 2018, so we think we’re being conservative looking at that number for next year.”

WTI crude futures fell 0.64 percent on Tuesday to $52.61. Year to date, the commodity has lost 8.77 percent.

Shares of Marathon Petroleum shed 2 percent amid Tuesday’s marketwide meltdown, settling at $63.34.

[“source=cnbc”]

US is well on its way to Trump’s goal of ‘energy dominance,’ says Marathon Petroleum CEO

US on its way to Trump's goal of 'energy dominance,' says Marathon CEO

US on its way to Trump’s goal of ‘energy dominance,’ says Marathon CEO   13 Hours Ago | 01:26

President Donald Trump’s goal of making the United States a global superpower in energy is starting to come true, Marathon Petroleum Corp. Chairman and CEO Gary Heminger told CNBC on Tuesday.

“When I look at the president’s theme to begin with and the beginning of his administration, he wanted to have energy dominance in the U.S. and I believe that we are well on our way,” Heminger told Jim Cramer in an exclusive “Mad Money” interview. “We’re the largest producer in the world today.”

Recent declines in oil prices haven’t stopped U.S. producers from pumping more oil ahead of OPEC’s meetings later this week, at which the group of oil-exporting countries are expected to cut production.

That puts the United States in a league above its competitors, said the Marathon chief, whose Ohio-based company specializes in petroleum refining, marketing and transportation.

“The U.S. refining system [is] second to none of anyone in the industry, so I believe we’re well on our way now” to global energy dominance, Heminger said.

The CEO added that he expected OPEC’s meetings in Vienna, Austria this Thursday and Friday to result in “a pullback in OPEC production,” in which case “we’ll see crude prices inch up” from their current levels.

And although oil’s recent pummeling has benefited business at Marathon — where oil is part of Marathon’s cost of goods sold, so price declines translate into higher margins — Heminger said the company sees prices for the benchmark West Texas Intermediate crude rising significantly in 2019.

“We really believe the price is probably going to end up being … $65 to [$]70 in 2019, on an average,” he said. “I believe we’ve averaged almost $65 — about [$]64.50 — year to date in 2018, so we think we’re being conservative looking at that number for next year.”

WTI crude futures fell 0.64 percent on Tuesday to $52.61. Year to date, the commodity has lost 8.77 percent.

Shares of Marathon Petroleum shed 2 percent amid Tuesday’s marketwide meltdown, settling at $63.34.

[“source=cnbc”]