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VZ | Huawei Sues FCC in a Fight for Greater U S Market Access | Bloomberg Huawei Technologies Co has sued the Federal Communications Commission seeking to overturn a regulatory decision that will hurt the Chinese corporation s business with its last major American clients
China s largest technology company by sales said it has filed a lawsuit with the Fifth Circuit Court of Appeals challenging the American agency s decision to bar the use of federal subsidies by rural carriers purchasing its equipment Huawei complained it wasn t accorded due process and was unfairly labeled a national security threat
The lawsuit is the latest attempt by Huawei to fight American sanctions and curbs that threaten the world s largest networking business Huawei which the White House accuses of aiding Beijing in espionage is stepping up a worldwide legal and publicity campaign to protest what it deems unfair treatment by the U S and its allies It s turned increasingly to courts to fight a plethora of issues from alleged defamation to American network restrictions
The U S is great because it embraces openness inclusiveness and the rule of law Chief Legal Officer Song Liuping told reporters at a briefing in Shenzhen on Thursday If it abuses its power the ultimate loser may be itself
FCC representatives weren t immediately available for comment outside of normal business hours
Read more Huawei Sues U S Over Equipment Ban Escalating Legal Clash
Huawei has initiated a number of high profile legal actions to defend its business and reputation overseas In March the company brought the U S government to court in Texas arguing a provision in the 2019 National Defense Authorization Act that barred it from certain networks violated the U S Constitution It also filed defamation claims in Paris last month over claims made on TV about its alleged ties with the Chinese government something the company has repeatedly denied Meng Wanzhou the Huawei chief financial officer who faces potential extradition to the U S for alleged fraud has also sued the Canadian authorities for wrongful detention
Even as Huawei fights to safeguard its reputation abroad it may be facing a public backlash back home This week news that it had reported an employee to police who was subsequently detained for 251 days then released without charges sparked a social media furor against the company s infamously demanding work environment Local media reported the longtime employee had sought severance pay upon dismissal over unspecified reasons but was then detained on extortion charges We are obligated to report to the authorities if we find any suspicious or unlawful acts Song said Thursday saying he had nothing more to add
The backlash stood in stark contrast to the consistent support Huawei has enjoyed at home since it ended up in Washington s cross hairs Huawei is considered a central facet of sensitive U S Chinese negotiations intended to defuse trade tensions between the world s two largest economies The Trump administration however has said issues related to the company won t be included in any potential deal and is a separate process
The FCC s move comprises one aspect of a broader campaign to contain a Chinese national champion Washington views with suspicion In May the White House placed Huawei on a blacklist that prohibited the sale of American software and circuitry It s so far defied those curbs reporting hyper growth in quarterly sales and smartphone shipments but expects Washington s ban to erase 10 billion in 2019 revenue That s down from the 30 billion Huawei s billionaire founder Ren Zhengfei previously feared
The U S market itself has shrunk in importance in past years for Huawei The country s biggest telecom carriers including AT T Inc and Verizon Communications Inc NYSE VZ barely buy any of its gear and dropped plans to sell Huawei phones last year under pressure from the U S government Huawei still maintains business ties with a number of small American carriers serving rural areas
Updates with comments from a press briefing from fourth paragraph
To contact Bloomberg News staff for this story Gao Yuan in Beijing at ygao199 bloomberg net
To contact the editors responsible for this story Peter Elstrom at pelstrom bloomberg net Edwin Chan
2019 Bloomberg L P |
VZ | Huawei Sues FCC in a Fight for Greater U S Market Access | Bloomberg Huawei Technologies Co has sued the Federal Communications Commission seeking to overturn a regulatory decision that will hurt the Chinese corporation s business with its last major American clients
China s largest technology company by sales said it has filed a lawsuit with the Fifth Circuit Court of Appeals challenging the American agency s decision to bar the use of federal subsidies by rural carriers purchasing its equipment Huawei complained it wasn t accorded due process and was unfairly labeled a national security threat
The lawsuit is the latest attempt by Huawei to fight American sanctions and curbs that threaten the world s largest networking business Huawei which the White House accuses of aiding Beijing in espionage is stepping up a worldwide legal and publicity campaign to protest what it deems unfair treatment by the U S and its allies It s turned increasingly to courts to fight a plethora of issues from alleged defamation to American network restrictions
The U S is great because it embraces openness inclusiveness and the rule of law Chief Legal Officer Song Liuping told reporters at a briefing in Shenzhen on Thursday If it abuses its power the ultimate loser may be itself
FCC representatives weren t immediately available for comment outside of normal business hours
Read more Huawei Sues U S Over Equipment Ban Escalating Legal Clash
Huawei has initiated a number of high profile legal actions to defend its business and reputation overseas In March the company brought the U S government to court in Texas arguing a provision in the 2019 National Defense Authorization Act that barred it from certain networks violated the U S Constitution It also filed defamation claims in Paris last month over claims made on TV about its alleged ties with the Chinese government something the company has repeatedly denied Meng Wanzhou the Huawei chief financial officer who faces potential extradition to the U S for alleged fraud has also sued the Canadian authorities for wrongful detention
Even as Huawei fights to safeguard its reputation abroad it may be facing a public backlash back home This week news that it had reported an employee to police who was subsequently detained for 251 days then released without charges sparked a social media furor against the company s infamously demanding work environment Local media reported the longtime employee had sought severance pay upon dismissal over unspecified reasons but was then detained on extortion charges We are obligated to report to the authorities if we find any suspicious or unlawful acts Song said Thursday saying he had nothing more to add
The backlash stood in stark contrast to the consistent support Huawei has enjoyed at home since it ended up in Washington s cross hairs Huawei is considered a central facet of sensitive U S Chinese negotiations intended to defuse trade tensions between the world s two largest economies The Trump administration however has said issues related to the company won t be included in any potential deal and is a separate process
The FCC s move comprises one aspect of a broader campaign to contain a Chinese national champion Washington views with suspicion In May the White House placed Huawei on a blacklist that prohibited the sale of American software and circuitry It s so far defied those curbs reporting hyper growth in quarterly sales and smartphone shipments but expects Washington s ban to erase 10 billion in 2019 revenue That s down from the 30 billion Huawei s billionaire founder Ren Zhengfei previously feared
The U S market itself has shrunk in importance in past years for Huawei The country s biggest telecom carriers including AT T Inc and Verizon Communications Inc NYSE VZ barely buy any of its gear and dropped plans to sell Huawei phones last year under pressure from the U S government Huawei still maintains business ties with a number of small American carriers serving rural areas
Updates with comments from a press briefing from fourth paragraph
To contact Bloomberg News staff for this story Gao Yuan in Beijing at ygao199 bloomberg net
To contact the editors responsible for this story Peter Elstrom at pelstrom bloomberg net Edwin Chan
2019 Bloomberg L P |
WMB | NBA commish on Lakers They ll figure it out | Jeanie Buss and the Lakers will get it together At least that s the expectation of NBA commissioner Adam Silver I know Jeanie knows how to manage a team Silver said in a wide ranging interview on ESPN s Get Up on Wednesday morning Sure when things start to go wrong a lot of fingers get pointed But they ll figure it out Silver expressed the highest confidence that the alleged dysfunction in the Los Angeles franchise will be sorted out soon After missing the playoffs team president Magic Johnson resigned abruptly and without consulting Buss because he felt stripped of the power to make meaningful decisions General manager Rob Pelinka then fired head coach Luke Walton a move Johnson said he wanted to make early in the season but was vetoed but efforts to lure top candidates Monty Williams NYSE WMB and Tyronn Lue fell short ESPN reported Tuesday that LeBron James agent Rich Paul was working behind the scenes to influence the coaching change throughout the season and took his complaints directly to Silver The same report said that Paul and Klutch Sports also scouted assistant coaches on the Lakers staff and picked out active players they hoped would be traded Paul denied that report on Tuesday Silver said Wednesday morning he bumped into Paul in a restaurant He was in the same restaurant Silver said There were two people sitting there He sat down for a second and I think he said something along the lines that Luke Walton is not the right guy to coach LeBron
My reaction was to shrug my shoulders and maybe say Well who do you think is the right guy to coach And he mentioned a name and that was that I think as commissioner I don t want to shut people off who have a point of view Field Level Media |
WMB | Ex Georgian leader Saakashvili stages triumphant return to Ukraine | By Pavel Polityuk and Matthias Williams NYSE WMB KIEV Reuters Former Georgian leader Mikheil Saakashvili returned to Ukraine on Wednesday greeted by cheering supporters and music at Kiev airport after new President Volodymyr Zelenskiy restored his Ukrainian citizenship a year after he was deported One of the most recognizable politicians in the post Soviet world Saakashvili had been brought in by former President Petro Poroshenko to be governor of the southern Odessa region in 2015 They fell out and Saakashvili accused Poroshenko of corruption The 51 year old said he did not want to exact revenge on anyone But the timing of Saakashvili s return means he could be a thorn in Poroshenko s side as Poroshenko s party gears up to fight a snap parliamentary election in July I will just look around he told reporters when asked where he saw his future in Ukrainian politics after landing on a flight from Warsaw Yes we have lots of supporters yes we have lots of very enthusiastic supporters You are seeing it with your own eyes But I am very impressed by the new president Saakashvili said he was here to help if Zelenskiy s team sought his advice but added I am not here for any positions I am not looking for positions Saakashvili was hired to run Odessa based on his track record of fighting corruption as president of Georgia after the 2003 Rose Revolution He resigned as governor in 2016 as his feud with Poroshenko escalated Since then he has mainly been living in the Netherlands his wife s country of origin Poroshenko rejected Saakashvili s corruption allegations and said he was trying to deflect attention from his poor performance as governor The Ukrainian authorities stripped Saakashvili of his citizenship when he was abroad but he barged his way through a checkpoint at the Polish border to get back into Ukraine in September 2017 He was deported five months later Saakashvili returned on Wednesday after Zelenskiy who defeated Poroshenko by a landslide in last month s presidential election restored his citizenship I came here not to take revenge on someone and to punish someone to destroy something To destroy is not my style Saakashvili said I want together with millions of Ukrainians after an historic opportunity has arisen with the new president with the new team to participate in the construction of a new Ukraine An actor and comedian with no prior political experience Zelenskiy won the presidency promising to fight entrenched corruption and to upend the political status quo On his inauguration day last week Zelenskiy called a snap parliamentary election in July that will give him the chance to win seats for his new Servant of the People party Saakashvili is due to return today and I am sure he will unleash the dogs of political war on Poroshenko and Ukraine s old political elites said Timothy Ash at Blue Bay Asset Management before Saakashvili s return
Presumably Zelenskiy thinks this will play well in the run up to parliamentary elections and buoy support for his Servant of the People party There will be a lot of people very nervous now about Saakashvili s return to Ukraine later today |
WMB | NBA draft notebook Washington G Nowell staying in draft | Washington guard Jaylen Nowell said goodbye to the Huskies and confirmed his entry into the 2019 NBA Draft The 2018 19 Pac 12 Player of the Year averaged 16 2 points 5 3 rebounds and 3 1 assists in 36 games as a sophomore He shot 50 2 percent from the field and 44 0 percent from 3 point range I want to make sure Husky Nation knows how much I ve appreciated their support and encouragement during my career at UW Nowell said in a statement released by the school You have all helped me achieve my dreams and best believe I m a Husky for Life there s no changing that According to the NCAA underclassmen have until 11 59 p m ET on Wednesday to withdraw from the draft and retain their eligibility The draft will be held June 20 at Barclays LON BARC Center in Brooklyn N Y Tennessee guard Jordan Bone is the second Volunteers underclassman to announce he will stay in the draft joining big man Grant Williams NYSE WMB the two time SEC Player of the Year It s always been my dream as a kid The love and appreciation from Vol Nation is something that will never go away and I ll always cherish Bone said Tennessee is now down four of its five starters from last season Williams also declared and opted to keep his name in the draft Admiral Schofield and Kyle Alexander graduated and are preparing for the draft Armoni Brooks of Houston announced on Twitter that he will leave the Cougars to enter the NBA draft The 6 foot 3 guard played three seasons with Houston but had his best season in 2018 19 tallying career highs in minutes 30 7 points 13 4 and rebounds 6 3 He started 36 of 37 games Guards Al Durham and Devonte Green will join forward Justin Smith in returning to Indiana Green averaged 9 4 points and 3 0 assists per game as a junior last season In their sophomore seasons Durham averaged 8 3 points and 1 6 assists while Smith tallied 8 2 points and 4 5 rebounds per game Davion Mintz will return to Creighton for his senior season A 6 foot 3 guard Mintz has started 79 of the Bluejays past 82 games Last season he averaged 9 7 points 3 0 assists and 3 0 rebounds per game He also had 40 steals on the season Guard Brandon Randolph is leaving Arizona after two seasons
Last season he started 31 of 32 games and averaged 12 4 points and 3 3 rebounds in 28 8 minutes per game Field Level Media |
WMB | Israel faces second election in months as Netanyahu fails to form government | By Dan Williams NYSE WMB JERUSALEM Reuters Israeli lawmakers voted to dissolve parliament early on Thursday paving the way for a new election after veteran Prime Minister Benjamin Netanyahu failed to form a coalition government before a midnight deadline The Sept 17 ballot will be Israel s second this year It spells unprecedented upheaval even for a country used to political infighting and is a big blow to Netanyahu who had claimed victory in the last election on April 9 Parliament s 74 to 45 vote took place just minutes after a midnight deadline for Netanyahu to assemble his fifth government The turmoil arose officially at least from a feud over military conscription between Netanyahu s presumed allies ex defense minister Avigdor Lieberman a far right secularist and ultra Orthodox Jewish parties Those parties want young religious scholars exempted en masse from mandatory national service But Lieberman and many other Israelis want them to share the burden Netanyahu denounced the draft spat as a Kafkaesque ruse It s just unbelievable Avigdor Lieberman is now part of the left he told reporters It is perfectly clear that he wanted to topple this government to cobble together a few more votes Yet the new ballot represents less of a setback for Netanyahu than the alternative in which Israel s president Reuven Rivlin could have asked another politician to try and form a ruling coalition Faced with the prospect of having to step aside and watch one of his political rivals push him to the margins Netanyahu instead drummed up votes to dissolve the 120 seat Knesset Netanyahu signaled he will run in the next election telling reporters We will win The spokesman for his conservative Likud party sent out a text emoji showing a smiling Netanyahu with the message Get out and vote But the failed coalition building of a 69 year old leader who just weeks ago was hailed by supporters as a political magician may open rifts and stir up challenges within Likud COURTS AND STATECRAFT The premier is also dogged by potential criminal charges in three corruption cases He has denied wrongdoing and is due to argue at a pre trial hearing in October against any indictment A new election could further complicate U S efforts to press ahead with President Donald Trump s peace plan in the Israeli Palestinian conflict Even before it has been announced Palestinians have spurned it as a blow to their statehood hopes The White House team behind the proposal including Trump s son in law Jared Kushner is in the Middle East to drum up support for an economic workshop in Bahrain next month to encourage investment in the occupied West Bank and Gaza The group arrived in Israel on Wednesday and planned to meet Netanyahu on Thursday Lots to pray for tweeted one of the envoys Jason Greenblatt from Jerusalem s Western Wall Three hours before Wednesday s 2100 GMT deadline Likud said it had secured 60 signatures half of parliament but shy of the majority required for a measure of stable governance In another sign of Netanyahu s strong desire to retain the premiership the opposition center left Labour party said it had been offered and had refused a chance to join a Likud led coalition Likud which has long said it plans to head a strong right wing government neither denied or confirmed this First elected in the late 1990s Netanyahu has been in power for the past decade In mid July he will overtake Israel s founding father David Ben Gurion as longest serving premier The last election ended with Netanyahu neck and neck against Benny Gantz a politically untested ex armed forces chief Lieberman who quit as defense minister in November in protest at what he deemed insufficient Israeli military force in fighting Hamas in Gaza has denied allegations that his real intention was to oust Netanyahu and lead a national camp
Until the drama over coalition building public attention had been focused more on moves Netanyahu loyalists were planning in parliament to grant him immunity from criminal prosecution and to pass a law ensuring such protection could not be withdrawn by the Supreme Court |
WMB | NBA notebook Pelicans lobby Davis to stick around | In what resembled a sales pitch to an available free agent the New Orleans Pelicans met with Anthony Davis on Wednesday in the hope of convincing him to embrace in the direction the franchise is now headed ESPN reported that Davis met with executive vice president David Griffin in Los Angeles on Wednesday morning Griffin who was hired in April is in possession of the No 1 selection in the NBA draft for the Pelicans where Duke s Zion Williamson is expected to be selected Davis requested a trade in January and the Los Angeles Lakers were widely speculated as his destination but the February trade deadline came and went without a deal Davis a six time All Star played only sparingly after the deadline and didn t appear at all over the final seven games Davis has averaged 23 7 points and 10 5 rebounds over his first seven seasons with the New Orleans franchise He produced averages of 25 9 points and 12 rebounds in 56 games this season the lowest number of games played in his career Houston Rockets general manager Daryl Morey wants to rebuild the roster and will even consider trading All Star point guard Chris Paul ESPN reported According to Adrian Wojnarowski the Rockets are being aggressive in the ramp up to the offseason with conversations surrounding all players on their own roster While MVP candidate James Harden is not thought to be available a blowup between Harden and Paul following the season ending loss to the Golden State Warriors could contribute to a split this summer Wojnarowski reported later Wednesday that Clint Capela could be the most coveted player on the roster Jeanie Buss and the Lakers will get it together At least that s the expectation of NBA commissioner Adam Silver I know Jeanie knows how to manage a team Silver said in a wide ranging interview on ESPN s Get Up Sure when things start to go wrong a lot of fingers get pointed But they ll figure it out After the Lakers missed the playoffs team president Magic Johnson resigned abruptly and without consulting Buss because he felt stripped of the power to make meaningful decisions General manager Rob Pelinka then fired coach Luke Walton a move Johnson said he was prevented from making earlier but efforts to lure top candidates Monty Williams NYSE WMB and Tyronn Lue fell short Kevin Durant resumed light workouts in his recovery from a calf injury but the Golden State Warriors are not expecting the All Star forward to be on the court for the first two games of the NBA Finals in Toronto Durant s exercise consists of stationary shooting on his own and coach Steve Kerr said the star forward is not ready for full team workouts or five on five play Kerr also doesn t know if center DeMarcus Cousins torn left quadriceps muscle will be ready for Thursday s Game 1 Toronto Raptors forward OG Anunoby who underwent an emergency appendectomy April 12 was surprisingly listed as questionable for Game 1 of the NBA Finals Anunoby has missed Toronto s entire playoff run after taking ill just before the postseason began Coach Nick Nurse said Monday he thought Anunoby was about 10 days away from being able to play a timetable that would have put him in line for a potential return for Game 4 on June 7 against the Warriors in Oakland Calif The NBA talked to the Raptors during the Eastern Conference finals about the behavior of Drake along the sideline a league spokesman told ESPN Drake holds a role as global ambassador for the Raptors and the presence of the Canadian superstar rapper has given added attention to the franchise
He had a confrontation with then Cleveland center Kendrick Perkins during last season s playoff series against the Cavaliers and he had a viral video moment in Game 4 of the Eastern Conference finals when he gave coach Nick Nurse a shoulder rub Field Level Media |
WMB | Stuttering Osaka braced for tough match against Azarenka | PARIS Reuters Naomi Osaka expects Thursday s French Open second round meeting with a resurgent Victoria Azarenka to be her toughest challenge this year as the world number one struggles to find the form that won her the last two in January Grand Slam titles Osaka has had a series of inconsistent results amid mounting pressure since she followed up her U S Open success with the Australian Open title and was a bundle of nerves during her opening match in Paris on Tuesday The Japanese lost the first set tamely before fighting back to overcome Slovakia s Anna Karolina Schmiedlova 0 6 7 6 4 6 1 but is well aware that former world number one Azarenka could punish her for another slow start She s been playing really well recently Osaka said of the Belarusian who is showing signs of returning to her best following the birth of her son Leo in 2016 and an ensuing custody battle with her former partner Osaka eased to a straight sets victory when the pair met in Rome last year but the 21 year old does not foresee another one sided contest There is no way that it s going to be a similar match to the one I played her in Rome last year Osaka said So I m expecting one of the hardest matches of the year Azarenka beat former champion Jelena Ostapenko 6 4 7 6 4 to advance to her third career meeting with Osaka It s going to be exciting I had some good wins in the last couple weeks against top 10 players so I feel that I m ready to play against top players Azarenka said In other matches on the main show courts Serena Williams NYSE WMB takes on Japan s Kurumi Nara while men s top seed Novak Djokovic meets Henri Laaksonen of Switzerland
Defending champion Simona Halep faces Magda Linette of Poland |
WMB | History of the Gold Standard | Real Vision co founder Grant Williams NYSE WMB and a host of experts walk through the history of the gold standard and the potential for a return to gold backed currencies After its temporary suspension by President Nixon in 1971 many people thought gold as money would go away but its value has endured This video is excerpted from a piece published on Real Vision on January 26 2018 entitled Gold The Story of Man s 6000 Year Obsession Episode 1 |
WMB | No sweat for Williams as she swings into round three | By Julien Pretot PARIS Reuters Serena Williams NYSE WMB breezed into the third round of the French Open on Thursday with a routine 6 3 6 2 win against Japanese Kurumi Nara wasting little energy in her quest for a record equalling Grand Slam singles title The 10th seed chasing a first major since the 2017 Australian Open survived a first set fright in her opening match but there was no hiccup this time She will take on fellow American Sofia Kenin in the next round with world number one Naomi Osaka a potential opponent in the quarter finals The 37 year old was given a decent workout by world number 238 Nara who was playing her only second match in the main draw of a tour level tournament this year I think she was playing tennis the whole time really good tennis the whole time Williams told reporters She was just playing really tactical tennis and I just had to play a little bit better Nara stood her ground in the first seven games but derailed in the eighth as Williams broke for 5 3 with a booming forehand winner down the line The Japanese cracked earlier in the second set dropping serve in the third game and never recovered as Williams snatched her 801st victory on the tour Although an ankle injury disrupted her early season Williams believes she still has what it takes to match Margaret Court s all time record of 24 Grand Slam singles titles I generally come to a Grand Slam to win it she said I have had a tough year since I twisted my ankle in Australia It s just been really tough after that
So everything definitely feels a little bit harder than normal but at the same time I know that it s going to get better |
WMB | Highlights French Open day five | Reuters Highlights of the fifth day at the French Open the second Grand Slam tournament of the year on Thursday all times GMT 1747 DEL POTRO QUELLS NISHIOKA CHALLENGE Juan Martin del Potro was dragged into a dogfight by Japan s Yoshihito Nishioka but the Argentine seeded eighth relied on his experience to prevail 5 7 6 4 6 2 6 7 5 6 2 in three hours and 46 minutes 1605 BLINKOVA STOPS GARCIA France s Caroline Garcia a quarter finalist in Paris two years ago fell to Russian qualifier Anna Blinkova who rallied from a set down to prevail 1 6 6 4 6 4 Meanwhile in the men s draw Gael Monfils powered past fellow Frenchman Adrian Mannarino 6 3 6 4 6 4 World number 146 Antoine Hoang upset Fernando Verdasco 6 4 3 6 7 6 5 7 5 1359 RUTHLESS DJOKOVIC DOWNS LAAKSONEN Novak Djokovic continued his bid to become the first man in the professional era to twice hold all four majors by swatting aside Henri Laaksonen 6 1 6 4 6 3 1350 ANISIMOVA STUNS SABALENKA Amanda Anisimova 17 toppled 11th seed Aryna Sabalenka 6 4 6 2 to become the youngest American to reach the Roland Garros third round since Serena Williams NYSE WMB 20 years ago Anisimova beat the Belarusian en route to the fourth round of the Australian Open in January 1340 ZVEREV BACK IN THE GROOVE Alexander Zverev thwarted a late comeback attempt by Swede Mikael Ymer to seal a 6 1 6 3 7 6 3 victory that was punctuated by 12 aces and 36 winners 1332 WILLIAMS MAKES QUICK WORK OF NARA Serena Williams who is bidding for a record equalling 24th Grand Slam singles title took only 67 minutes to beat Japan s Kurumi Nara 6 3 6 2 and set up a third round meeting with fellow American Sofia Kenin 1317 BARTY STROLLS PAST COLLINS Ashleigh Barty the eighth seed from Australia downed American Danielle Collins 7 5 6 1 1202 OSAKA SURVIVES ANOTHER SCARE TO ADVANCE Naomi Osaka overcame a sluggish start to rally past double Grand Slam champion Victoria Azarenka 4 6 7 5 6 3 in their second round clash 1143 THIEM BATTLES HIS WAY INTO THIRD ROUND Dominic Thiem the runner up last year defeated Alexander Bublik 6 3 6 7 6 6 3 7 5 to become only the third Austrian man to win 50 Grand Slam singles matches in the professional era after Thomas Muster 77 and Jurgen Melzer 59 1110 INJURY ENDS EDMUND S CAMPAIGN Pablo Cuevas reached the third round after Britain s Kyle Edmund retired hurt while trailing in the third set Cuevas was leading 7 6 3 6 3 2 1 when Edmund quit 0910 PLAY BEGINS AT ROLAND GARROS
Play began under cloudy skies in Paris with the temperature at 17 degrees Celsius Rain is expected toward the end of day s play |
WMB | Drilling Efficiencies Crestwood And More Energy Transfer | Drilling Efficiencies
A week or so ago the Energy Information Agency EIA released the results of a survey showing the average cost to drill and complete a well in four of the major producing regions in the U S As the EIA shows costs were rising going into 2012 but thereafter started to fall and maintained that trajectory as exploration and production companies aggressively sought improved efficiency from their technology and their service providers
Although this drop in well costs has obviously been good news for the E P industry albeit less so for their service providers it has been complemented by greater output per well Using data from the EIA s Drilling Production Report we have created the four subsequent charts showing respectively output per rig for crude oil and natural gas and total production of crude oil and natural gas for each of the four regions highlighted by the EIA Reduced costs to complete a well might accommodate lower average production per well but in fact the reverse has generally been happening which has allowed IRRs Internal Rates of Return to remain substantially more attractive than would otherwise have been the case
Natural gas production efficiency has improved dramatically in the Marcellus which has caused the north east U S to switch from being a natural gas importer to an exporter and has begun to displace supplies from eastern Canada
This is why crude oil and natural gas production have only fallen appreciably in the Eagle Ford where higher initial production rates of new wells due to higher pressure are more than offset by faster decline rates than in other regions
Natural gas output has soared in the Marcellus aided by falling costs and a more than five fold increase in output per rig since 2010 And meanwhile the rig count has come down sharply as the table shows Source EIA
This all represents a fantastic example of American technological innovation rapidly responding to the collapse in crude oil probably faster than most observers had any reason to expect Who would want to bet against continued American advances and improvements in this sphere
Crestwood
A couple of months ago we wrote about Crestwood Equity Partners LP NYSE CEQP in The Math of a Distribution Financed Buyback Quicksilver Resources Inc OTC KWKAQ is a bankrupt E P company that had asked the bankruptcy court to reject Crestwood s contract to provide gathering and processing services There isn t much case history of courts resolving contractual disputes between MLPs and their customers but the travails of many domesric drillers has certainly drawn attention to this aspect of the MLP business model
On Wednesday Crestwood they had signed a ten year agreement to provide such services to BlueStone Natural Resources the acquirer of Quicksilver s Barnett Shale acreage Previously shut in wells will be re opened and the contract which consists of both fixed fee and percent of proceeds terms commits BlueStone to refrain from constraining production for economic reasons through the end of 2018
It s just one contract out of tens of thousands across the industry but its constructive resolution highlights the symbiotic relationship between E P companies and their infrastructure providers
Energy Transfer and Williams
Last week we wrote about the Energy Transfer Williams Poker Game and further twists in the plot took place since then as Williams Companies Inc NYSE WMB sued Energy Transfer Partners LP NYSE ETP and CEO Kelcy Warren for violating the merger agreement when they issued convertible securities only to ETE management There are no sympathetic characters here but one can already hear the WMB lawyer explaining in court that WMB initially rejected ETE s overtures then finally agreed and is simply seeking to close the transaction on the agreed upon terms Or ETE pursued WMB in spite of being rejected finally got the deal they wanted and have now changed their minds
I guess Kelcy Warren has earned the right to blunder while it s impossible to forecast a resolution it s becoming a little hard to envisage a happy combination of these two companies under present circumstances The uncertainty represents a substantial pall over both stock prices a grudging break up payment from ETE to WMB might well be the outcome that lets both managements focus on their operating businesses and brings this sorry absorbing episode to a conclusion
One solution that distribution loving MLP investors will find almost unbearable to even ponder is for ETE to scrap the preferred offering close the deal per the original agreement and suspend the distribution With 4BN a year in cash flow at the pro forma parent the 6BN cash payout would be retired in a year and a half with investors looking at a combined company trading at 3x cash flow with conservative leverage
We are long CEQP ETE and WMB |
WMB | Williams Companies WMB Q1 Earnings What To Expect | Energy infrastructure provider Williams Companies Inc NYSE WMB is set to release first quarter 2016 financial results after the closing bell on May 4 2016 The company reported an average negative earnings surprise of 18 8 for the last four quarters In the preceding three month period the company posted a negative earnings surprise of 94 44 Let s see how things are shaping up for this announcement Factors Likely to Influence this QuarterWilliams is a premier energy infrastructure provider in North America The company boasts a widespread pipeline system and is one of the largest domestic natural gas transporters by volume Hence the company s size and diversity are likely to drive earnings in the soon to be reported quarter The company s midstream assets which are less sensitive to commodity price fluctuations help it maintain a steady stream of revenues and cash flows in spite of low natural gas prices Despite these positives we remain concerned about the company s high debt levels that make it vulnerable to an extended drop in commodity prices The company s exposure to the commodity price volatility has also taken a toll on its volume and distribution growth potential Moreover the company s keep whole and percentage of liquids basis contracts for its midstream assets have exposed it to commodity price risk If these contracts become less profitable cash flow from Williams midstream business could be adversely affected thereby leading to underperformance Earnings WhispersOur proven model does not conclusively show that Williams Companies is likely to beat the Zacks Consensus Estimate this quarter This is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold for this to happen Unfortunately this is not the case here as elaborated below Zacks ESP Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 30 00 for Williams Companies This is because the Most Accurate estimate is pegged at 7 cents while the Zacks Consensus Estimate stands at 10 cents Zacks Rank Williams Companies has a Zacks Rank 3 Hold which increases the predictive power of ESP However a negative ESP makes surprise prediction difficult Conversely the Sell rated stocks Zacks Rank 4 or 5 should never be considered going into an earnings announcement Stocks to ConsiderThough an earnings beat looks uncertain for Williams here are some companies that you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter DCP Midstream Partners LP NYSE DPM has an Earnings ESP of 4 84 and a Zacks Rank 2 The company is slated to release earnings on May 4 NGL Energy Partners LP NYSE NGL has an Earnings ESP of 1 96 and a Zacks Rank 2 The company is slated to release earnings on May 6 Hercules Offshore Inc NASDAQ HERO has an Earnings ESP of 13 33 and a Zacks Rank 3 The company is slated to release earnings on May 4 |
WMB | Williams WMB Reports Weak Earnings In Q1 Stock Slides | North American energy firm Williams Companies Inc NYSE WMB reported weak first quarter 2016 results owing to a decline in the natural gas liquids NGL margin Following the announcement the company fell nearly 3 in after trading hours on the NYSE The company reported adjusted earnings from continuing operations of 3 cents per share widely missing the Zacks Consensus Estimate of 10 cents The bottom line also came in lower than the prior year figure of 16 cents For the quarter ended Mar 31 Williams Companies reported revenues of 1 660 million again missing the Zacks Consensus Estimate of 2 060 million and declining from the year ago quarter revenues of 1 716 million Segmental AnalysisWilliams Partners This segment reported adjusted operating profit of 1 060 million in the quarter up 16 from 917 million in the year ago quarter Increased fee based revenues and improved olefins margins from Geismar plant production drove the results A partial dampener came in the form of a decrease in NGL margin Williams NGL Petchem Services The unit incurred adjusted operating loss of 14 million wider than the year ago quarter loss of 5 million Significant rise in total segment cost and expenses led to the underperformance Other The segment posted adjusted operating profit of 10 million up from the year ago quarter profit of 6 million Operating and Maintenance ExpensesOperating and maintenance expenses were recorded at 391 million slightly higher than 387 million in the first quarter of 2015 Capital Expenditure Balance SheetDuring the reported quarter Williams Companies capital expenditure came in at 513 million As of Mar 31 2016 the company had long term debt of 23 701 million representing a debt to capitalization ratio of 81 3 Williams Companies has a cash balance of about 164 million Zacks Rank Other PicksWilliams Companies currently carries a Zacks Rank 3 Hold implying that the stock will perform in line with the broader U S equity market over the next one to three months Some better ranked players in the energy sector include PetroChina Co Ltd NYSE PTR Seadrill Partners LLC NYSE SDLP and Braskem S A NYSE BAK Each of these stocks sports a Zacks Rank 1 Strong Buy |
WMB | Williams WMB Sues Energy Transfer Equity Over Merger | Premier energy infrastructure provider in North America Williams Companies Inc NYSE WMB has filed a suit against Energy Transfer Equity LP NYSE ETE to ensure that their merger remains on track The company took the legal step when the latter expressed concerns over the merger citing that the deal had not secured the necessary legal opinion to make the transaction tax free to shareholders Williams sued Energy Transfer Equity in the Delaware Court of Chancery to prevent the latter from canceling the merger over tax issues so that the deal materializes on Jun 28 as scheduled This is the third separate lawsuit filed by the company over the span of six weeks Prior to this Williams had accused Energy Transfer Equity and its chief executive officer Kelcy Warren of violating their merger agreement by making a private convertible preferred share offering to the partnership s top investors Last September Energy Transfer Equity had valued its acquisition agreement with Williams at 33 billion and had agreed to pay 6 billion in cash to Williams as part of the cash and stock acquisition However due to a sharp decline in oil prices shares of both companies plunged more than 60 and offer price plummeted to about 14 billion with the company still having to pay the cash amount The 6 billion of cash has made this pending merger a nightmare for Energy Transfer Equity given that borrowing this amount in a down market will leave the company overleveraged Energy Transfer Equity is suffering from buyer s remorse and is searching for ways to escape the deal in deteriorating financing markets Williams on the other hand is keen to complete the takeover as the deal if abandoned would cost its shareholders 10 billion in lost value Williams Companies is one of the largest domestic transporters of natural gas by volume The company s core operations include finding producing gathering processing and transportation of natural gas Williams Companies currently carries a Zacks Rank 3 Hold which implies that the stock will perform in line with the broader U S equity market over the next one to three months Some better ranked players in the energy sector are Seadrill Partners LLC NYSE SDLP and Pembina Pipeline Corporation NYSE PBA Both these stocks sport a Zacks Rank 1 Strong Buy |
GLW | Corning GLW Beats On Q3 Earnings Revenues Up Y Y | We ve come to take for granted that our smartphones and tablets will have quality glass displays that will be scratch resistant break resistant and touch responsive And that s exactly what Corning Inc NYSE GLW promises with its glass substrates Corning is behind the displays in TVs smartphones etc Receding inventory and stabilizing prices in the LCD TV market are positives for this business It also offers cover glass in the form of Gorilla Glass and is expanding applications for this technology And that isn t all the company also offers fiber optics for communications networks auto products for environmental compliance and other glass products for life science applications Corning has a strong history when it comes to recent earnings reports as the stock has beaten estimates in all the last four quarters Currently Corning has a Zacks Rank 5 Strong Sell You can see However the Zacks Rank could definitely change following the company s third quarter 2017 report which was just released We have highlighted some of the key stats from this just revealed announcement below Earnings The Zacks Consensus Estimate declined a penny to 40 cents per share in the last 7 days Corning s core earnings of 43 cents per share beat this estimate by almost 7 5 and climbed up 2 from the year ago quarter Revenues Corning beat revenues which at 2 70 billion was ahead of the Zacks Consensus Estimate of 2 58 billion Revenues increased 6 on a year over year basis Key Stats The revenue growth was driven by robust performance from Optical Communications up 15 and Specialty Material up 26 Stock Price Shares are up almost 1 in the pre market session Corning Incorporated Price Check back for our full write up on this Corning earnings report later Today s Stocks from Zacks Hottest StrategiesIt s hard to believe even for us at Zacks But while the market gained 18 8 from 2016 Q1 2017 our top stock picking screens have returned 157 0 128 0 97 8 94 7 and 90 2 respectively And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 Q1 2017 the composite yearly average gain for these strategies has beaten the market more than 11X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
GLW | Corning GLW Surges Stock Moves 6 4 Higher | Corning Incorporated NYSE GLW was a big mover last session as the company saw its shares rise more than 6 on the day The move came on solid volume too with far more shares changing hands than in a normal session The stock picked up sharply from the near flat trend of 29 67 to 30 47 in the past one month time frame The move came after the company reported better than expected third quarter 2017 results The company has seen two negative estimate revisions in the past few weeks while its Zacks Consensus Estimate for the current quarter has also moved lower over the past few weeks suggesting there may be trouble down the road So make sure to keep an eye on this stock going forward to see if this recent move higher can last Corning currently has a Zacks Rank 5 strong Sell while its is negative Corning Incorporated Price A better ranked stock in the Communication Components industry is Arista Networks Inc NYSE ANET holding a Zacks Rank 2 Buy You can see
Is GLW going up Or down Predict to see what others think or
Zacks Hidden TradesWhile we share many recommendations and ideas with the public certain moves are hidden from everyone but selected members of our portfolio services Would you like to peek behind the curtain today and view them Starting now for the next month I invite you to follow all Zacks private buys and sells in real time from value to momentum from stocks under 10 to ETF to option movers from insider trades to companies that are about to report positive earnings surprises we ve called them with 80 accuracy You can even look inside portfolios so exclusive that they are normally closed to new investors |
GLW | Verizon VZ Acquires WideOpenWest s Chicago Fiber Assets | Verizon Communications Inc NYSE VZ recently completed the 225 million purchase of fiber optic network assets from WideOpenWest Inc NYSE WOW in the Chicago area Per the terms of the deal Verizon will pay WideOpenWest an additional 50 million to complete Chicago network build in second half 2018 The amount will increase to 275 million at the time of completion The deal secures fiber to more than 500 macro cell and small cell wireless sites in the Chicago area The high capacity network is designed to support multiple services and connects Verizon Wireless macro towers and small cells This will lower future leasing costs The buyout will accelerate Verizon s network densification and enhance its industry leading 4G LTE network upcoming 5G wireless standards and wireline connections The deal will also boost the deployment of next generation broadband services Accumulation of dark fiber will bolster Verizon s cell network density which will consequently boost mobile backhaul network Dark fiber provides abundant bandwidth and is of utmost necessity for the smooth functioning of super fast wireless networks like 4G and 5G Dark fiber based backhaul provides scalability and efficiency to bandwidth management This will eventually help the company to significantly reduce backhaul costs Acquiring the Chicago fiber assets is just one of Verizon s several moves in solidifying fiber network holdings The service provider is pursuing a series of acquisitions of regional fiber assets and internal fiber expansions Verizon s Toil on Fiber OpticsVerizon acquired dark fiber through the acquisition of MCI in 2006 In February 2017 the company acquired XO Communications dark fiber optic network for 1 8 billion Verizon will also lease XO s LMDS Local Multipoint Distribution Service wireless spectrum with an option to buy them by the end of 2018 XO Communication has a portfolio of 102 LMDS licenses in 28 GHz and 39 GHz bands In April 2017 Verizon entered into a three year purchase agreement with Corning Inc NYSE GLW to buy fiber optic cables and associated hardware for nationwide wireless broadband network Per the deal Verizon will acquire around 20 million kilometers 12 4 million miles of optical fiber each year from 2018 through 2020 from Corning with a minimum purchase commitment of 1 05 billion In May 2017 Verizon acquired Straight Path Communications Inc a leading provider of fixed wireless spectrum licenses The company agreed to pay 3 1 billion for Straight Path significantly more than AT T Inc s NYSE T offer of 1 6 billion Notably Straight Path has a strong portfolio of 868 spectrum licenses in the high frequency 28 GHz and 39 GHz bands which are included in the Federal Communications Commission s FCC designation for the next generation of wireless broadband services Verizon also signed with Prysmian which will be an additional supplier of fiber cable to support 4G and 5G wireless and wireline broadband plans Prysmian will supply Verizon with more than 17 million kilometers 10 6 million miles of ribbon and loose tube cables In September 2017 Verizon sought permission from the FCC to retire copper networks in eight northeast markets effective from Feb 28 2018 The U S telecom behemoth wants to upgrade s obsolete copper network infrastructure with fiber and wireless network to support high end mobile and wireline services for smart city residential and business applications Zacks Rank Price Performance Currently Verizon carries a Zacks Rank 3 Hold You can see Verizon portrays an impressive price performance In the past six months shares of the company have rallied 12 3 compared with the s gain of 1 1 Valuation Indicates Some Upside In terms of price to earnings ratio P E F12M which is often used to rate telecom sector stocks Verizon s valuation looks attractive The stock currently has a trailing 6 month P E ratio of 13 52 compared with 14 97 for its industry When compared with the market at large the stock looks favorable as the P E ratio for the S P 500 index is at 18 98 Investor Alert Breakthroughs PendingA medical advance is now at the flashpoint between theory and realization Billions of dollars in research have poured into it Companies are already generating substantial revenue and even more wondrous products are in the pipeline Cures for a variety of deadly diseases are in sight and so are big potential profits for early investors Zacks names 5 stocks to buy now |
VZ | FCC chairman Pai backs public auction to free up spectrum in C band for 5G | By David Shepardson WASHINGTON Reuters Federal Communications Commission Chairman Ajit Pai said on Monday he backs a public auction to free up spectrum in a key band currently used for delivering video content for next generation 5G wireless networks an announcement that sent a major satellite company s shares down 40 The C band is a block of spectrum used by satellite company customers to deliver video and radio programming to 120 million U S households and is seen as the most likely short term source of available spectrum for 5G use Experts believe the C band spectrum can be divided to maintain existing service and deliver 5G service Pai said he supports a public auction of 280 megahertz of the C band I m confident they ll quickly conduct a public auction that will give everyone a fair chance to compete for this 5G spectrum while preserving availability of the upper 200 MHz of the band for continued delivery of programming he wrote on Twitter Major satellite service providers including Intelsat SA Telesat and SES SA which hold the existing C band licenses have proposed selling the spectrum privately to wireless carriers arguing a private sale would make the spectrum available for 5G faster But that has drawn criticism from some U S lawmakers Shares in Intelsat fell 40 in extremely heavy trading in New York to 8 03 The satellite firms said in a statement that Pai s proposal failed to address the critical involvement of the incumbent satellite operators in executing the complex task of reconfiguring and transitioning their networks The group added that it would continue to work cooperatively with the FCC to develop an effective alternative plan and achieve the best outcome for the American public while protecting the interests of our users and the rights of our companies FCC officials told reporters on a conference call Pai plans to bring his auction proposal before the commission for a vote early next year An FCC official also confirmed that after Republican Senator John Kennedy raised the C band issue with President Donald Trump Trump called Pai on Oct 30 to find out what the issue was about Because Trump did not express a view on how the spectrum should be sold the White House did not need to file a public description of the conversation and no one at the White House ever expressed a view the FCC official said The White House declined to comment Mid band spectrum is critical for 5G because it offers both geographic coverage and the capacity to transmit large amounts of data a combination that is appealing to entrepreneurs and wireless consumers alike Pai said in a letter to lawmakers He said the FCC must make C band spectrum available for 5G quickly adding that he proposed preserving the availability of the upper 200 megahertz of this band for the continued delivery of programming Verizon Communications Inc NYSE VZ said Monday that any auction should include appropriate incentives and protections to ensure it could be put to use in short order China and other countries have already provided huge blocks of mid band spectrum to carriers for 5G and there is a risk that those countries will become the hub of 5G innovation and investment if the US fails to act promptly to do the same Verizon said AT T Inc NYSE T said earlier this month a private auction could lead to extensive legal challenges and said the FCC would have to be closely involved in developing and supervising the auction
Two Republican senators said on Monday they had introduced legislation to require that the spectrum auction begin before the end of 2020 with at least 50 of the value of auction revenues to be reserved for U S taxpayers |
VZ | Verizon Snap to develop 5G augmented reality features | Reuters Verizon Communications Inc NYSE VZ and Snap Inc NYSE SNAP will partner to develop 5G augmented reality features at the wireless carrier s labs the companies said on Thursday
The No 1 U S wireless carrier will also preload the Snapchat app on select 5G phones under the deal
Snap s augmented reality features including lenses that can overlay effects on pictures have played a key role in its popularity among users
Verizon and its U S rivals have embarked on an aggressive marketing push to get more customers to use their 5G networks a technology that can offer 20 times faster data speeds than 4G long term evolution LTE networks |
VZ | Yahoo Finance Adds CoinMarketCap s Crypto Prices to Its Website | Yahoo NASDAQ AABA Finance the United States based financial news giant has integrated its website with cryptocurrency pricing by major crypto data supplier CoinMarketCap CMC The website now allows visitors to track prices for major cryptocurrencies providing CMC based data including market capitalization trading volume circulating supply and others
Verizon NYSE VZ Media owned Yahoo Finance and CMC confirmed their strategic partnership for cryptocurrency data and content in a press release to Cointelegraph on Nov 21 |
VZ | U S Justice Department closes antitrust probe over wireless carrier switching technology | WASHINGTON Reuters The Justice Department has closed an antitrust investigation into a trade group that includes Verizon and AT T among its members and which had been criticized for making it harder for consumers to switch carriers In a letter to the GSM Association which sets standards on eSIM mobile technology and includes the four major U S carriers the Justice Department said it was pleased that the group is ready to use its standard setting process to create a more consumer friendly eSIM standard The technology called eSIM allows consumers to switch wireless providers without having to insert a new physical SIM card an identifying microchip That makes it easier to compare wireless networks and easily select a new service when desired Previously there had been allegations that the standard was set in a way that made it harder to switch carriers and to make it harder for new wireless companies to enter the market The Justice Department did not say in its letters which carriers were included in its probe In April 2018 Reuters and others reported that the department was probing alleged coordination by AT T Inc NYSE T Verizon Communications NYSE VZ as well as the trade group T Mobile and Sprint are also part of the organization Verizon T Mobile and Sprint did not respond to requests for comment AT T declined comment GSMA said in a statement that the department had looked at millions of documents Its Business Review Letter is conclusive that the agency found no violation of antitrust laws the trade group said In its letter the Justice Department said that it was closing the probe because the GSMA agreed to change some of its procedures As a result of that investigation the Department developed significant concerns that GSMA s process was deeply flawed and enabled competitors to coordinate anticompetitively the department said without naming the competitors The department further said it had no present intention to pursue an antitrust enforcement action against GSMA s conduct
Gigi Sohn a consumer advocate and telecommunications expert said the letter was a slap on the wrist because the Justice Department Antitrust Division did nothing more than force a change in anti competitive behavior |
WMB | Federer graces new look Roland Garros with stylish opening win | By Julien Pretot PARIS Reuters Roger Federer made a stylish comeback to the French Open after a three year hiatus as the revamped widely acclaimed Roland Garros burst into life on Sunday The 20 time Grand Slam champion back on the Paris clay 10 years after his only title here swept aside Italian Lorenzo Sonego 6 2 6 4 6 4 in a graceful performance on an expanded court Philippe Chatrier The reception I got today was crazy it was really nice to see a full stadium for a first round like this It was a beauty the 37 year old Swiss told reporters Earlier 2016 champion Garbine Muguruza inaugurated the new court Simonne Mathieu with a first round victory describing the semi sunken 5 000 seater as a cosy place Situated within a botanical garden at the East end of Roland Garros the court is cocooned by greenhouses featuring rare tropical plants It s a cute court It s in a very different place You don t feel like you are around a court It s like in a garden Muguruza said Some top players however will not get much chance to enjoy the new stadium with former world number ones Angelique Kerber and Venus Williams NYSE WMB sent packing along with former winner Svetlana Kuznetsova Opening proceedings on Chatrier Germany s Kerber was downed in two short sets by Russia s Anastasia Potapova as her attempt at completing a career slam was cut short on her least favorite surface Seven time Grand Slam champion Williams was also eliminated in straight sets by Ukraine s Elina Svitolina the ninth seed and one of a dozen contenders for the Suzanne Lenglen Cup Last year s semi finalist Marco Cecchinato of Italy seeded 16th was at the receiving end of Nicolas Mahut s spectacular comeback as the local favorite advanced into the second round with a 2 6 6 7 8 6 6 4 6 2 6 4 victory on court Simonne Mathieu In the women s draw second seed Karolina Pliskova and seventh seed Sloane Stephens eased into round two while on the men s side Greek sensation Stefanos Tsitsipas and Japan s Kei Nishikori also progressed Top favorites Rafa Nadal the 11 time champion and world number one Novak Djokovic will be in first round action on Monday |
WMB | MLB notebook Pirates calling up top pitching prospect | The Pittsburgh Pirates will call up right handed prospect Mitch Keller ahead of their doubleheader against the Cincinnati Reds on Monday Keller the Pirates top pitching prospect has gone 5 0 with a 3 45 ERA over nine starts for Triple A Indianapolis this season and was scheduled to start for that club in Columbus Ohio on Sunday Keller 23 will start the second game in Cincinnati the Pirates announced in a tweet on Sunday A second round pick by the Pirates in 2014 Keller has a 34 17 record with a 3 06 ERA over six minor league seasons Injuries to starters Trevor Williams NYSE WMB Jameson Taillon and Chris Archer have left the Pirates hurting for pitching though Archer returned to the rotation on May 15 When Keller does take the mound he won t be throwing to Francisco Cervelli The Pirates placed their starting catcher on the 7 day concussion list after he took a broken bat to the facemask during Saturday s game against the Los Angeles Dodgers This is the third straight season in which Cervelli has suffered a concussion and he has a long history of dealing with them Cervelli 33 is batting 193 with a homer and five RBIs in 34 games this season Elias Diaz 250 entering Sunday will be the primary catcher during Cervelli s absence Pittsburgh also recalled catcher Jacob Stallings and infielder outfielder Jose Osuna from Triple A Indianapolis while designating utility man Jake Elmore for assignment After leaving Saturday s start after just three batters Boston Red Sox hurler David Price is expected to be moved up in the rotation for his next start perhaps Tuesday or Wednesday against the Cleveland Indians at Fenway Park according to Ian Browne of MLB com With Price s absence taxing the bullpen on Saturday the Red Sox called up fellow left hander Darwinzon Hernandez from Double A Portland and sent right hander Colten Brewer down to Triple A Price 33 is 2 2 in eight starts this season sporting a 3 24 ERA and 1 08 WHIP Right hander Chris Paddack did not start as scheduled for the San Diego Padres against the Blue Jays in the Toronto because of a stiff neck Left hander Robbie Erlin started as the opener for San Diego and took the loss giving up one run in two innings as the Padres lost 10 1 Paddack a 23 year old rookie off to a 4 2 start with a 1 93 ERA in nine starts He is scheduled to make his next start on Wednesday against the host New York Yankees The New York Mets activated outfielder Michael Conforto from the 7 day concussion list prior to their game against the Detroit Tigers Conforto started in right batted third and went 0 for 3 in New York s 4 3 win Conforto 26 suffered the concussion during a game against the Washington Nationals on May 16 He is batting 265 with nine homers and 21 RBIs in 43 games this season The Mets designated outfielder Rajai Davis for assignment to make room for Conforto though the team hopes it can hold onto Davis Both Los Angeles teams activated their Sunday starting pitchers from the injured list prior to their respective games as the Angels activated left hander Andrew Heaney for his season debut against Texas and the Dodgers activated right hander Kenta Maeda before their series finale in Pittsburgh Heaney had been sidelined since experiencing elbow inflammation during spring training He gave up two runs on two hits both solo home runs with eight strikeouts and a walk He did not get a decision as the Angels beat Texas 7 6 in Anaheim Calif
Maeda had been sidelined by a left adductor contusion since May 16 He improved to 6 2 on the season after going five innings and giving up three runs on five hits with no walks and four strikeouts The Dodgers beat the Pirates 11 7 to sweep the three game series Field Level Media |
WMB | Nadal begins quest for 12th Roland Garros title | Reuters Defending champion Rafa Nadal begins his French Open campaign on Monday seeking his 12th title and 18th Grand Slam while looking to dismiss any doubts about his form after three consecutive semi final exits in the run up to Roland Garros Three different players ousted the Spaniard in clay court tournaments in Monte Carlo Barcelona and Madrid before he roared back to his best to beat world number one Novak Djokovic in the final in Rome Nadal a known stickler for routine and order arrives at a revamped court Philippe Chatrier which has been 80 rebuilt for this year s tournament but the 32 year old said he will not be affected by the changes He is generally a slow starter but should not have any problem getting past his first round opponent Germany s Yannick Hanfmann The 27 year old who turned professional only four years ago has never advanced past the opening round of a Grand Slam but he feels no pressure facing the championship favorite I ll know a lot about him and maybe he doesn t know as much about me he said in an interview on the Roland Garros website I ve been playing well I ve got a big game So if my serve and return works I can definitely do some damage While the crowd may be overwhelmingly in favor of Nadal it is not something that affects Hanfmann who has a hearing impairment It s an advantage on court he added Maybe on Chatrier it ll be an advantage because I don t hear that much that s going on In the other half of the draw Djokovic begins his quest to hold all four Grand Slam titles for the second time in his career when he takes on Poland s Hubert Hurkacz Djokovic became the first man since Australia s Rod Laver in 1969 to hold all four Grand Slams in 2016 when he won his only French Open title Three times Roland Garros champion Serena Williams NYSE WMB is looking to win her 24th Grand Slam singles title and she takes on Vitalia Diatchenko who has never progressed to the third round Dominic Thiem who comes into the tournament having won titles in Barcelona and Indian Wells this year will be in action on court Suzanne Lenglen against American Tommy Paul
Stan Wawrinka a winner in 2015 will be the star attraction on court Simonne Mathieu when he takes on Jozef Kovalik while French veteran Richard Gasquet faces Mischa Zverev |
WMB | Fragile Wozniacki another top casualty in Paris | By Julien Pretot PARIS Reuters Caroline Wozniacki completed a hat trick of first round exits on red clay this season as she became the third former world number one to fall in the first round of the French Open The 13th seeded Dane suffered a spectacular collapse in a 0 6 6 3 6 3 defeat to Russia s Veronika Kudermetova on Court Philippe Chatrier on Monday just 24 hours after Angelique Kerber and Venus Williams NYSE WMB were also sent packing Wozniacki who had spells as world number one between 2010 and 2012 has failed to win a match on red clay this year as she was forced to retire with back and calf injuries midway through her opening round contests in Madrid and Rome Wozniacki who had reached the Charleston final on green clay before she suffered the injury setbacks paid for her lack of match practice after a near perfect start on Monday I think I played really well in the first set I played aggressive I played the way I wanted to play And then I think she got very lucky in the start of the second set and took advantage of the opportunities she got Wozniacki told reporters And then I just lost a little steam in the end and I made some unforced errors that I normally don t do so that was very frustrating The 28 year old Wozniacki has never made it past the quarter finals in 12 appearances at Roland Garros The Dane suffers from arthritis but said her condition had not been bothering her lately Lately I ve been feeling good with that so when I feel good I just do what I normally do and just go through every day and work hard she explained But the calf problem hampered her preparations for the French Open even if she did not feel any pain on Monday Lately it s just been my calf which has nothing to do with the other thing And sometimes you re just unlucky as an athlete she said You get hurt you get injured and you just have to try to work through that Wozniacki who has won just nine matches in 2019 will now focus on the grasscourt season
It hasn t been a great year for me so far And I m just going to try and work hard and try to turn that around she said |
WMB | Easy for Nadal and Djokovic scare for Serena | By Martyn Herman PARIS Reuters The surroundings looked slightly different but Rafael Nadal was his usual brutal self on a revamped Court Philippe Chatrier as he began his quest for a 12th French Open title on Monday The Spaniard blasted past German qualifier Yannick Hanfmann 6 2 6 1 6 3 before Novak Djokovic also kicked off his tournament in style with an easy 6 4 6 2 6 2 win over Pole Hubert Hurkacz It was not as straightforward for Serena Williams NYSE WMB however as the veteran American dropped the first set against Russia s Vitalia Diatchenko before roaring to a 2 6 6 1 6 0 victory Caroline Wozniacki became the second former women s world number one to lose in this year s first round as the 13th seeded Dane collapsed to a 0 6 6 3 6 3 defeat by Russia s Veronika Kudermetova in the day s opener on Chatrier She joined Germany s Angelique Kerber who was bundled out by another unheralded Russian Anastasia Potapova on Sunday The women s draw lost another Grand Slam champion on day two when Czech Petra Kvitova pulled out with an arm injury before her match against Romania s Sorana Cirstea Nadal has lost only two matches at the claycourt Grand Slam since debuting in 2005 and winning the title It would have been the upset of all time if Hanfmann ranked 180th in the world and playing his first Roland Garros match had joined Robin Soderling and Djokovic on that tiny list and it never remotely looked like happening The Spaniard bristled with energy and menace as he went through his repertoire and after an unusual amount of claycourt losses in the build up to the tournament looked razor sharp I don t see any difference playing tennis here Nadal said of the sweeping changes to the main showcourt which was ripped apart after his final victory over Dominic Thiem last year He will face another qualifier named Yannick from Germany in round two this time Yannick Maden Djokovic s match against 44th ranked Hurkacz looked a much tougher proposition as he began his attempt to become the first man in the professional era to hold all four Grand Slam titles for a second time He was clinical though and after breaking serve in the opening game he floated through to a second round clash against Swiss Henri Laaksonen A break of serve in the first game gave me wings and relaxed me a bit so I could just start off in the best possible fashion the world number one said Williams who has fallen agonizingly short of winning her 24th Grand Slam title and matching Margaret Court since returning from having a baby looked understandably rusty after playing only one competitive match since March For a while it looked as though a repeat of her 2012 first round loss to Virgine Razzano was possible but she rattled off the last nine games to sweep past her 83rd ranked opponent Two men s shocks saw Russian Daniil Medvedev seeded 12th surrender a two set lead to lose to French doubles specialist Pierre Hugues Herbert while Canadian Denis Shapovalov the 20 year old 20th seed lost to German Jan Lennard Struff
Stan Wawrinka the 2015 champion and last year s runner up Dominic Thiem both went through unscathed |
WMB | The Backlash Against Big Tech | Howard Morgan of Renaissance Technologies joins Real Vision s Grant Williams NYSE WMB to discuss a host of issues facing big tech today Morgan suggests that the privacy convenience pendulum has swung to convenience in recent years and that the changing narrative around big tech means that pendulum s direction is about to change This video is excerpted from a piece published on Real Vision on March 22 2019 entitled Failure as a Forerunner to Success |
WMB | Top officials at New York Fed stepping down | By Trevor Hunnicutt and Richard Leong NEW YORK Reuters The Federal Reserve Bank of New York said two top executives would step down on June 1 leaving an interim figure in charge of the U S central bank s market operations Simon Potter who as head of the Markets Group runs the broader Federal Reserve system s market operations and asset holdings is stepping down as is Richard Dzina head of the Financial Services Group the New York Fed said in a statement New York Fed President John Williams NYSE WMB named Ray Testa chief operating officer of the Markets Group as its interim head and also named an interim chief from within the regional bank to run the Financial Services Group The Markets Group is charged with trading to implement the Fed s interest rate policy and also manages relationships between the central bank and Wall Street A spokeswoman Suzanne Elio declined to comment beyond the statement Potter an economist is a veteran of more than two decades at the New York Fed and has run the Markets Group since June 2012 The group has had an enlarged role in markets because of the Fed s massive asset purchases to support the U S economy in the aftermath of the 2008 global financial crisis The central bank currently holds nearly 4 trillion in assets I m not sure if there is ever a good time for someone like Simon to leave said Michael Gapen chief U S economist at Barclays LON BARC in New York He s been there for a long time and has a difficult job He has helped lay out the framework on how to manage the Fed s balance sheet and the plumbing of money markets |
WMB | New York Fed s Markets Chief Simon Potter to Step Down June 1 | Bloomberg The Federal Reserve Bank of New York said two of its top officers are departing including Simon Potter who oversees its strategically vital trading desk in a rare double exit from the senior ranks of the U S central bank
Potter and fellow executive vice president Richard Dzina who ran the bank s financial services group will both step down effective June 1 the bank said in a statement Tuesday It will launch a search to find their successors
Their departures which between them take almost 50 years of New York Fed experience with them come about a year into John Williams s tenure as president of the bank
Potter had been seen in some quarters as a potential contender to take the helm in New York before Williams NYSE WMB who was then head of the San Francisco Fed won the pick The New York Fed is the most important of the 12 regional Fed banks because of its oversight of Wall Street and execution of monetary policy via the desk that Potter ran
The abrupt departures come at a delicate time for the central bank as it finishes shrinking its balance sheet The wind down process which Potter oversees as the head of the New York Fed s markets group will end later this year but policy makers have yet to decide important questions on the long term maturity composition of its bond holdings
I m very surprised that both of them would do this on the same day with three days notice said Tom Simons a senior economist at Jefferies in New York Simons said Potter s job as head of the central bank s open market operations is arguably more important than being president of the some of the regional Fed banks
He said the departures are especially worrying for market participants given the uncertainty hanging over the New York Fed s plan in conjunction with the U S Treasury to replace the scandal tainted London InterBank Offered Rate with a new dollar based benchmark rate known as the Secured Overnight Financing Rate
Potter was scheduled to give a speech in Hong Kong on May 30 on the transition from Libor but now won t deliver those remarks said New York Fed spokesman Jack Gutt |
WMB | Nervy Osaka survives huge first round scare | By Martyn Herman PARIS Reuters World number one and top seed Naomi Osaka said she was a bundle of nerves as she flirted with a first round exit at the French Open on Tuesday before firing herself up to beat Slovakia s Anna Karolina Schmiedlova The 21 year old Japanese won only nine points as she struggled to control her powerful game in a first set horror show on her Court Philippe Chatrier debut But she displayed immense fighting spirit to roar back for a 0 6 7 6 4 6 1 victory and set up a seismic second round clash with former world number one Victoria Azarenka of Belarus For me I think this is the most nervous I have ever been my entire life during a match Osaka told reporters I think you could see that in the first set I was literally not hitting any balls in the court It was weird because usually the nerves go away but it kind of stayed the entire match Then it was a fight of willpower Nothing she tried came off in the opening set and it looked as though the women s draw was about to lose another big name following the exits of former world number ones Caroline Wozniacki Angelique Kerber and Venus Williams NYSE WMB But Osaka who is the number one seed at a Grand Slam for the first time proved she is made of sterner stuff Today was a bit tough it s one of those matches where you re not playing well but have to find a way to win Mats Wilander commentating for Eurosport said it was reminiscent of some matches played by 23 times Grand Slam champion Serena Williams when the American has appeared out of kilter before turning things round FIGHTING SPIRIT Osaka s fighting spirit is up there with the great champions and that s what I think we re going to see from her for the rest of her career twice French Open champion Wilander said Her first set was horrendous just like Serena yesterday but somehow she turns it around and keeps going for her shots She is similar to Serena is so many ways Williams also suffered a terrible first set before beating Russia s Vitalia Diatchenko 2 6 6 1 6 0 on Monday Osaka was all over the place at the start of the match as she appeared to struggle with the breezy conditions and the first set slipped by in 23 minutes Order appeared to have been restored when she went into a 3 0 lead in the second set but a brief rain delay stopped her momentum and her 90th ranked opponent hit back Schmiedlova served for the match at 5 4 but Osaka hung in only to drop serve again at 5 5 Four times Schmiedlova got to within two points of winning the match but Osaka refused to buckle and the pressure finally began to tell as the Slovak double faulted and then missed a backhand to take the set into a tiebreak Suddenly Osaka seemed to relax and after claiming the breaker she blazed through the decider to stretch her winning streak in Grand Slam matches to 15 having followed her stunning U S Open win over Williams by winning the Australian Open She can ill afford such a slow start in the second round however when she faces twice Grand Slam champion Azarenka
I m expecting one of the hardest matches of the year she said |
WMB | How Do You Break A Pipeline Contract | Given the collapse in MLP prices over the last six months virtually any explanation is worth considering Operating results continue to be unremarkable Kinder Morgan N KMI reported 4Q15 financials last week Their full year 2015 results were 4 lower than their budget two thirds of the miss was in their CO2 business which is sensitive to the price of crude oil Overall they generated 7 6BN of EBITDA versus a budgeted figure of 7 9BN Their Distributable Cash Flow of 4 7BN was 7 higher than in 2014 In April KMI was at 44 and closed the year at under 15
But operating performance has never come close to justifying the performance of MLPs recently hence we have cast around for other explanations The rigidity of the investor base is we think an important cause see Another frequently raised concern is that the rates MLPs earn on their pipelines will be reduced either because loss making E P companies will renegotiate terms or because they ll fail and a bankruptcy court will impose a lower rate Although there s very little history of this the views of the investor who chooses not to buy MLPs can be more useful than those of the MLP seller and this issue is being raised more frequently
It sounds plausible that if the company filling a pipeline with hydrocarbons at one end is losing money the pipeline owner should care A pipeline s immobility requires reliable customers An E P company that is unwilling or unable to use previously contracted capacity can cause problems for the pipeline owner as well as for the customer at the other end awaiting receipt of the product
The U S has 192 396 miles of liquids pipelines of which roughly a third each move crude oil Natural Gas Liquids NGLs and refined products There are over 302 000 miles of natural gas pipelines There are over 240 000 miles of Gathering and Processing G P lines often single individual pipes to a single well These are both narrow and numerous There are nearly 2 2 million miles of natural gas distribution lines from utilities to residential and commercial customers Historically their utilization has been remarkably reliable While Gazprom MCX GAZP occasionally uses its power as a supplier to further Russia s foreign policy objectives it s hard to think of an example where a domestic commercial dispute has impeded the flow of product Once pipelines are built they are used with a high degree of predictability The Federal Energy Regulatory Commission FERC governs all natural gas pipelines other than G P and all other pipelines that cross state lines Interestingly the thrust of regulation has largely been to limit the power of the pipeline operator since a customer on the receiving end of a pipeline has few plausible choices if he s suddenly faced with a price hike Although a single pipe is immobile and obviously creates a symbiotic relationship with its customer it s part of a network which makes the product mobile affording its owner substantially more flexibility on where to send product than the customer has on where to obtain it Part of FERC s role is to control the ability of MLPs to exploit this Security of supply requires predictability of income Pipeline projects are cancelled before breaking ground if insufficient commitments are in hand to assure its financial viability In 2013 Kinder Morgan cancelled the 2BN Freedom pipeline that was intended to transport crude oil from West Texas to California for just this reason The Field of Dreams approach is not widely used
There isn t a long history of broken pipeline contracts from which to draw examples Disputes are hard to find probably because there s so little legal ambiguity Last year an Indian steel company Essar Steel Limited lost a case in Minnesota federal court when their acquisition of a local steel company led them to break an agreement with Great Lakes Gas Transmission Limited Partnership to take their supply of natural gas used in steel production Essar s contention that the global economic crisis invalidated the contract was rejected by the court which awarded 32 9 million to the plaintiff
FERC has authority over many potential disputes In 2015 Buckeye Partners N BPL reached agreement following a long running dispute with several airlines over the rates they were charging to deliver jet fuel from New Jersey to three New York area airports FERC oversaw the agreement and approved its resolution
It can be useful to think of pipelines as networks of tributaries from individual plays feeding into processing centers and then into large capacity trunklines on their way to population centers power stations refineries export facilities and other users Recently farther from the wellhead has guided the investment recommendations of some and it makes sense that a G P network supporting a new high cost crude oil baisin involves a totally different risk than a natural gas pipeline running into New York City to supply a power station s electricity production
Pipelines that are demand pull in that they re paid for by the end user such as a refinery or power station are less risky than supply push In addition 75 of hydrocarbon production in the U S is done by investment grade companies so performance risk ought to be limited Take or pay contracts assure the pipeline operator of revenue regardless of whether the E P company uses the capacity Like virtually all U S commercial contracts they are enforceable None of these seem to represent significant risk of changing contract terms The place to look for problems is close to the wellhead where a bankruptcy judge is overseeing a failed E P company s obligations However bankruptcy need not impede the flow of product since the bondholders could continue operations with a reduced cost of capital having shed the equity holders While it s conceivable that a struggling E P company could seek to renegotiate a contract with the threat of shutting in the well the problem of weak prices is one of excess supply Other producers would presumably be willing to use capacity albeit not necessarily in the same place
2015 saw 41 energy companies file for bankruptcy representing 16BN in debt So far there are few reports of any meaningful consequences for the MLPs that provide their infrastructure although there are reported instances of contracts being renegotiated Williams Companies N WMB and Chesapeake N CHK have agreed on lower rates for natural gas transportation in Pennsylvania but this is not a typical case CHK spun out their midstream assets into Access Midstream with unusually lucrative contracts probably because they were more highly valued by Access investors than their cost as reflected in CHK s valuation WMB subsequently acquired Access Midstream These contracts have been challenged by the state on behalf of many landowners who have seen their royalty checks for drilling leases slashed But it seems so far to be an isolated case Kinder Morgan s recent results did include a 45 million credit charge in their Terminals business due to two failed coal companies Of course this reflects the shift away from coal towards natural gas a trend for which MLPs including KMI are well positioned
Moreover demand is not the problem Last year in the U S natural gas production of around 80BCF Billion Cubic Feet Per Day was 4BCF higher than in 2014 Exports are expected to double this year Auto sales were a record 17 5 million with gas guzzling pick ups and SUVs representing half of this Cheap hydrocarbons are producing a demand response
While MLPs have always paid attention to the credit profile of their customers there is increased focus on this area from investors We ll continue searching for examples of the likely impact on an MLP when its E P customer fails
A poorly designed MLP product Crashes
This could almost be the topic of a second blog post last week UBS announced the mandatory redemption of two exchange traded notes that were designed to provide MLP exposure leveraged 2 1 The results have been predictable and the notes ticker N MLPV and N MLPL duly performed as designed MLPV fell from 22 last Summer to under 5 at which point the abovementioned mandatory redemption was triggered The more seasoned MLPL reached 75 at the MLP peak in August 2014 and recently touched 10 Incidentally the management of vehicles such as these requires selling MLPs when they fall and buying them when they rise to maintain constant leverage the type of behavior that has exacerbated the sharp moves in the sector recently and causes a permanent loss of capital for the investor The clients of UBS were poorly served indeed
We are long BPL KMI and WMB |
WMB | IEA Says Recent Oil Support Built On False Hopes | Oil prices are rising this morning in what the International Energy Agency IEA calls a false dawn In the most recent report the IEA predicted a bleak outlook for the global oil market and the prospects for economic growth in the U S Europe and China Despite acknowledging that global energy demand surged to a 5 year high of 2 2 million barrels a day in the fourth quarter putting global demand in 2015 at 1 6 million in 2015 they say that is about as good as it gets The IEA says that demand growth peaked in 2015 and this year oil demand growth will fall back considerably in 2016 to 1 2 million barrels a day because of what they say will be slowdowns in Europe China and the U S
The IEA says that recent support because of speculation of OPEC production cuts are built on false hopes they also suggest that no matter what the cut backs in U S oil output weigh to offset rising supply from OPEC The IEA says that global excess supply may reach 2 0 million barrels per day during the first quarter and a further 1 5 million barrels a day in the second quarter Further stock building of 300 000 barrels a day is forecast in the second half of the year With the market already awash in oil it is very hard to see how oil prices can rise significantly in the short term Later today we will see if the U S based Energy Information Administration is as negative for the market
We are seeing more concerns about the health of oil companies and some banks Reuters reported that U S oil and gas pipeline companies including Williams Companies N WMB and Kinder Morgan N KMI have contracts worth billions of dollars that might be at risk as Chesapeake Energy Corp N CHK aims to slash its debts amid collapsing energy prices Chesapeake said on Monday it had no plans to file for bankruptcy after sources told Reuters that the firm whose debt is eight times its market value asked its longtime counsel to look at restructuring options
Bloomberg reports that Deutsche Bank AG DE DBKGn under pressure over its ability to pay coupons on the riskiest debt has just bought itself some time Bloomberg says that Germany s largest bank on Monday reassured investors that it has sufficient funds after the shares plunged the most in almost seven years eroding almost 2 billion euros 2 2 billion in market value Deutsche Bank rebounded after it said in a statement that it s able to meet obligations on its additional Tier 1 notes both this year and next with Officer Marcus Schenck telling employees the capital position remains strong
This comes as Japanese stocks fall as the yield on Japan s benchmark 10 year government bonds fell to zero for the first time Uncertainty on interest rates and crackdowns on stock trading in China is adding to the appetite for gold that went above 1200 00 an ounce for the first time in 7 months
The FT reports that price reporting agency Platts has moved to protect the Brent benchmark from dwindling North Sea production The FT says that dated Brent is the global oil marker used by traders and companies to price around two thirds of the world s physical crude market It also underpins billions of dollars of trading in futures options and other derivatives
Yet the production of the four physical streams that underpin the benchmark Brent Forties Oseberg and Ekofisk is falling To try and save the Benchmark status Platts has been looking at ways of introducing more liquidity or oil In the past it has floated the idea of adding crudes from the immediate neighbourhood such as Norwegian Troll or Danish Troll or from further afield such as Russian Urals |
WMB | Energy Transfer Equity ETE Trading At Bargain Dividend Yield 28 | Summary
Energy Transfer Equity ETE N ETE took a huge hit on Monday down by 41
There are no convincing reasons for the carnage
ETE Stock trades at Bargain Valuation today
Bottom line Medium and Long term outlook for MLPs sector is positive
Energy Transfer Equity ETE was massacred last Monday going down by 41 There are several reasons given none of which makes much sense given the steep decline
Concerns about departure of CFO Jamie Welsh Energy Transfer Equity CFO Jamie Welch who helped orchestrate the proposed merger with Williams Co N WMB will be replaced by Energy Transfer executive Thomas Long The lack of clarity around Jamie Welch s departure seems to have initiated the fierce selling in ETE shares
Fears from Chesapeake bankruptcy Chesapeake Energy CHK a Williams Cos customer has reportedly hired lawyers to help restructure a 9 8 billion debt load
Concerns about possible payout reductions
It seems that nervous investors are shooting before asking questions Let us have a look at some facts
Chesapeake Energy Corporation N CHK said it has no plans to file for bankruptcy and it has hired the law firm Kirkland Ellis to improve its balance sheet through restructuring Despite this CHK share also tumbled 33 on Monday Energy Transfer Equity did not have a direct exposure to CHK until its recent plans to merge with Williams Companies WMB Chesapeake represents about 20 of Williams revenue while the exposure for the merged entities will be much lower If we make a rough calculation based on the revenues of ETE and WBM the combined exposure to CHK comes out to around 3 of revenues Assuming Chesapeake goes bankrupt which is still farfetched does this justify a 42 decline in ETE shares
The management of ETE remains strong with its Chairman Kelcy Warren and its president John McReynolds who effectively run ETE CEO and cofounder Kelcy Warren has always been regarded as a visionary in the field and initiated a string of high profile acquisitions that has helped Energy Transfer regain momentum His management skills also led to the Company broadly diversifying its cash flow
The merger between Williams and Energy Transfer if it goes through will result in new revenue opportunities achieve operational efficiencies and a rationalization of capital expenditure The combined entities as reported by Energy Transfer will generate 2 billion in annual synergies per year through 2020 representing roughly 20 of pro forma EBITDA
The price decline in ETE seemes to have been fueled by nervous investors overreacting due to the current high volatility and the steep declines in the US and global markets S P down by 3 the past week Fear of further declines in crude prices N USO could be at play which is still a possible scenario in the short term ETE Trades at BargainTaking aside the current headwinds resulting from lower oil prices we cannot deny that the stock of Energy Transfer Equity trades today at a bargain valuation with a price of 4 30 per unit a stunningly low forward PE of 2 7 and a projected dividend yield of 28 The Company remains a solid one generating a 38 operating Earnings yield and is not even facing a major distribution cut ETE owns the general partner and the incentive distribution rights of Energy Transfer Partners N ETP which is considered to be a cash cow The Future of MLPs remains closely tied to Oil PricesUltimately one should look at the fundamentals driving revenues and distributions of MLPs being the price of oil and volumes transported both of which closely tied to the price of crude oil OIL Bottom line Oil supply and demand are expected to reach a balance by the end of 2016 and crude inventories to face declines in 2017 as per the Chart below posted by the Energy Information and administration EIA in its January 2016 report
If we add to the above crude price at 50 per barrel a year from today price consensus by both major banks and the EIA the outlook is pretty good for the Midstream companies in the medium and long term
At 50 a barrel midstream companies will get a huge bump in their revenues while North American drillers will be able to stay afloat until new drilling is required to meet expanding demand expected to happen in 2017
As for ETE its current bargain price is unlikely to last for long Its price was up 13 on Tuesday Other MLPs prices that went down this week in sympathy and worth having a look at include Spectra Energy N SEP Enbridge N ENB and Oneok Partners N OKS |
WMB | Insiders Are Reinvesting Back Into MLPs | It ll be a while before Master Limited Partnerships MLPs will fairly be described as no longer in a bear market So far the low point was on February 11 at which point the Alerian Index was 58 2 below its all time high of August 2014 The following day SEC filings revealed institutional purchases by Berkshire Hathaway NYSE BRKa hedge fund Appaloosa and the Oklahoma Teachers Retirement System see and this seems to have been the catalyst for a modest improvement in investor sentiment Rising crude didn t hurt either and the result has been that the 30 2 three week bounce in MLPs since that February 11th low is the largest rally since making their August 2014 high
A technically driven rally is nice but it s also interesting to see the level of insider buying in recent months Just among eight stocks that we follow we ve calculated almost half a billion dollars of insider purchases over the past twelve months Enterprise Products Partners NYSE EPD is the biggest at 185MM funded in part by the constant reinvestment of distributions by management Other purchases of note include 108MM at Energy Transfer Equity NYSE ETE Crestwood Equity Partners NYSE CEQP a speculative and therefore appropriately small investment of ours saw insiders purchase a startling 9 4 of the public float during 4Q15 Tallgrass Energy GP NYSE TEGP also saw insiders buy 1 7 of the float It s worth remembering that these purchases and others are generally funded by distributions paid out to those very same investors MLPs are highly cash generative businesses
There have been other informed buyers beyond the institutions and insiders mentioned above Plains All America NYSE PAA issued 1 6BN in convertible preferred units to a group of private equity investors that were already invested in Plains and therefore know the business well They included EnCap Investments First Reserve and Stonepeak Infrastructure Partners Targa Resources NYSE TRGP issued 500MM in similar securities to Stonepeak
I was chatting with a friend who is a financial advisor the other day and I asked him what sector of the equity market apart from MLPs offers the best opportunity right now He felt that low volatility dividend paying stocks could provide a return of better than 10 over the next four quarters We like that sector too and we have run a for many years that regularly generates attractive returns see It s a great place to be invested And yet there are MLPs yielding well over 10
As we noted in last week s blog any equity security which confounds the skeptics by paying its dividend for a year will assuming this draws in additional buyers that drive its yield down by 2 deliver a 30 total return to those who invested a year earlier Many MLPs still offer this possibility Given the collapse in MLPs since August 2014 they ought to offer this kind of potential return In early February after only 9 business days MLPs were down 19 Today s MLP investors have endured some torrid days But if you invest where you assess a high probability of continued distributions it s hard to think of another asset class or sector that comes close There s increasing evidence that insiders and institutional investors are acting on that belief
By way of example of the high yields in the sector Williams Companies NYSE WMB on Friday declared a 0 64 dividend At 19 15 where it closed on Friday this would be a respectable 3 3 yield if the 0 64 was an annual dividend But it s actually a quarterly dividend so WMB yields 13 37 Some investors were probably not expecting another WMB dividend so it was a welcome surprise If the merger with Energy Transfer Equity ETE goes through on current terms when it closes WMB investors will receive dividends of 1 74 annually from the 1 5274 shares of Energy Transfer Corp ETC they ll swap for their WMB shares But they ll also receive a one time 8 cash payment plus a 0 10 special dividend so 1 74 on an 11 05 stock price 19 15 less the 8 10 payments is 15 75 The Presidential election is not the only thing that can make your jaw drop
We are invested in BRK CEQP EPD EQGP ETE KMI NSH PAGP TEGP and WMB |
WMB | The Energy Transfer Williams Poker Game | The managements of Energy Transfer Equity NYSE ETE and Williams Companies NYSE WMB are engaged in a high stakes poker game It s an absorbing spectacle Last May WMB announced plans to buy in its MLP Williams Partners NYSE WPZ As with Kinder Morgan NYSE KMI they felt their size as well as the drag from Incentive Distribution Rights IDR from WPZ to WMB was making it hard to identify accretive growth projects Kelcy Warren ETE s CEO made an unsolicited offer for WMB and after fending him off for several months WMB eventually agreed grudgingly to be acquired in September They dropped their earlier plan to merge with their MLP
Almost immediately ETE was struck with buyer s remorse The deal terms included an 8 10 cash payment from ETE for each WMB share and as MLPs sank this 6BN payout represented an increasing percentage of the deal as well as an unneeded strain on ETE s balance sheet ETE had crafted a complex transaction They were keen to maintain the GP MLP structure since Kelcy Warren clearly recognizes the value in an MLP GP see However ETE couldn t simply issue new units to exchange for WMB shares to satisfy the non cash component because ETE is a partnership that generates a K 1 and WMB shareholders wouldn t want to exchange their shares in a corporation generating a 1099 for LP units So ETE agreed to exchange 1 5274 shares in the newly formed Energy Transfer Corp ETC for each WMB share
ETC is supposed to track ETE for two years following the transaction close through a mechanism designed for the purpose but it s a novel approach and it s unclear how they ll both trade after that The complexity shows how keen Kelcy Waren was to buy WMB and so retain their MLP as a stand alone vehicle still generating IDRs for its GP But as ETE WMB and MLPs generally fell ETE s CFO Jamie Welch apparently began looking for modifications or even a way out of the deal without having to pay a break up fee In fact Jamie was in telling WMB shareholders they should reject the transaction and last month he was fired
Whether Jamie was fired because he crafted a poor deal or because he was using the wrong strategy to change it Kelcy Warren soon went on the offensive In quick succession ETE announced two transactions designed to make ETE and its doppelganger ETC less valuable by enriching senior management at the expense of other ETE ETC shareholders including should the transaction close WMB shareholders
On March 10th Energy Transfer announced a limited offering of convertible units available only to insiders and on preferential terms They followed this up with a substantial grant of new shares by way of compensation to ETE management to take effect after the closing of the WMB transaction Both moves served to make ETE ETC a less valuable currency to WMB shareholders but the collateral damage was to all the existing non insider owners of ETE The clear message to WMB s board is sit down with us and renegotiate this deal or we ll make it progressively less attractive to you
What was unsaid publicly was no doubt communicated clearly in private these terms stink and if you disagree we ll make them worse If WMB walks away they have to pay ETE a 1 5BN break up fee unless it s voted down by WMB shareholders If both companies agree to break up ETE has to pay WMB 410MM the same fee WMB had to pay WPZ when that deal was cancelled There is no provision for ETE to walk away so they d likely face a lawsuit for substantial damages if they did Considering the deal originally valued WMB at 43 50 compared to its Friday close of 15 52 you d think pursuing such a lawsuit would be challenging More recently to confirm what a bad idea the merger was ETE took its earlier forecast of 2BN in annual synergies down to roughly zero
Apparently the WMB board never was that enthusiastic about the deal in the first place with CEO Alan Armstrong opposed while activist hedge fund manager Keith Meister was in favor
Kelcy Warren has become a billionaire through the Energy Transfer family of businesses which he founded in 1995 The deal s proponents on WMB s board including Keith Meister of Corvex are struggling to show that their earlier advocacy was astute given the subsequent collapse in both stock prices These billionaires now rather resemble elephants dancing in a cramped tea room the question for investors is how to avoid being the crushed china set in the process for both men hew to their fiduciary obligations only as long as more important considerations don t intervene
Two years ago Keith Meister showed his true colors with alarm company ADT when in April 2014 he relied upon a stock buyback for which he d advocated to sell his big ADT position back to the company ADT s stock price subsequently sank 30 ADT s CEO Nareen Gursahaney was shown to be inept see while Keith Meister created further obstacles for those who believe all hedge fund managers are misunderstood altruists
So ETE s strategy is one of devaluing its acquisition currency to the point that it s unattractive while WMB s is one of holding out presumably in the hope of a big break up fee And yet since what s good for ETE must be good for WMB it s obvious that there s a shared interest in reducing the cash portion of the deal in exchange for more equity
The outline of an agreement is clear to everybody but so far a WMB board that was split and an ETE management that has completely changed its mind cannot put their egos aside and find common ground It s mostly about the capital structure of the combined entity If they get that right both sides will win But it also shows that there s more than one way to handle the funds of public shareholders
Few players in this story are showing themselves to be responsible stewards of client capital In years to come situations like this will beg the question how would Buffett have handled it Whatever the answer it won t be like this |
GLW | Corning GLW Beats On Q2 Earnings Revenues Up Y Y | We ve come to take for granted that our smartphones and tablets will have quality glass displays that will be scratch resistant break resistant and touch responsive And that s exactly what Corning Inc NYSE GLW promises with its glass substrates Corning is behind the displays in TVs smartphones etc Receding inventory and stabilizing prices in the LCD TV market are positives for this business It also offers cover glass in the form of Gorilla Glass and is expanding applications for this technology Ford s new lightweight windshield is an example And that isn t all the company also offers fiber optics for communications networks auto products for environmental compliance and other glass products for life science applications Corning has a strong history when it comes to recent earnings reports as the stock has beaten estimates in all the last four quarters Currently Corning has a Zacks Rank 3 Hold You can see Corning Incorporated Price However the Zacks Rank could definitely change following the company s second quarter 2017 report which was just released We have highlighted some of the key stats from this just revealed announcement below Earnings The Zacks Consensus Estimate remained steady at 40 cents per share over the last 7 days Corning s adjusted earnings of 42 cents per share beat this estimate by almost 5 and surged 14 from the year ago quarter Revenue Corning beat revenues which at 2 59 billion was ahead of the Zacks Consensus Estimate of 2 52 billion Revenues increased 6 on a year over year basis Key Stats The revenue growth was driven by robust performance from Optical Communications up 13 and Specialty Material up 27 Stock Price Following the earnings release share prices did not show any movement in the pre market trading session Check back for our full write up on this Corning earnings report later The Hottest Tech Mega Trend of All Last year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaries but that should still leave plenty of money for regular investors who make the right trades early |
GLW | Verizon To Aggressively Deploy Dark Fiber For 5G Backhaul | U S telecom behemoth Verizon Communications Inc NYSE VZ has decided to acquire and install dark fiber based network throughout its footprint This initiative comes in a bid to support the existing 4G LTE network and more importantly to aid the company transition into the upcoming 5G wireless network Dark fiber provides abundant bandwidth which is of utmost necessity for the smooth functioning of super fast wireless networks such as 4G and 5G Dark fiber based backhaul provides scalability and efficiency to bandwidth management This will eventually lead the company to significantly reduce its backhaul costs Verizon acquired dark fiber through its acquisition of MCI in 2006 In February 2017 the company acquired XO Communications Inc s dark fiber optic network The deal was valued at 1 8 billion Verizon will also lease XO s LMDS Local Multipoint Distribution Service wireless spectrum with an option to buy them by the end of 2018 XO has a portfolio of 102 LMDS licenses in 28 GHz and 39 GHz bands In April 2017 Verizon entered into a three year minimum purchase agreement with Corning Inc NYSE GLW to buy fiber optic cables and associated hardware for its nationwide wireless broadband network Per the deal Verizon will acquire up to 20 million kilometers 12 4 million miles of optical fiber each year from 2018 through 2020 from Corning with a minimum purchase commitment of 1 05 billion In May 2017 Verizon acquired Straight Path Communications Inc a leading provider of fixed wireless spectrum licenses The company agreed to pay 3 1 billion for Straight Path significantly more than its rival AT T Inc s NYSE T offer of 1 6 billion Importantly Straight Path has a strong portfolio of 868 spectrum licenses in the high frequency 28 GHz and 39 GHz bands which are included in the Federal Communications Commission s FCC designation for the next generation of wireless broadband services Meanwhile in August 2017 Verizon stated it would spend 225 million to acquire a high capacity fiber network in the Chicago area belonging to WideOpenWest Inc NYSE WOW Verizon has been leasing this fiber network which provides connectivity to more than 1 000 cell sites of different scales Accumulation of dark fiber will bolster Verizon s cell network density consequently boosting its mobile backhaul network The densification of cell network will help the company install and build its upcoming 5G network Adoption of small cells has increased due to the inconvenience of installing large towers in inaccessible areas Verizon stated that small cells will be used to augment its existing 4G LTE and upcoming 5G network and will primarily concentrate on high traffic locations like a business district or a shopping mall The company anticipated these to increase voice capacity and data speeds and to complement current 4G LTE infrastructure The networks will require fiber optic connections to local hubs which link to long haul Internet infrastructure Price performance of Verizon Year to date the stock price of Verizon has witnessed a decline of 9 18 compared with the growth of 3 47 Nevertheless the company has a very powerful diversified business model On the wireless front it will start initial deployment of the upcoming 5G network in 2018 Meanwhile it is aggressively expanding its fiber based footprint on the wireline front In the digital media front Verizon has become a major contender for the lucrative online advertisement business We believe that these are the primary reasons behind the stock currently carrying a Zacks Rank 3 Hold You can see The Hottest Tech Mega Trend of All Last year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
GLW | MasTec Wins 2018 Pipeline Construction Project Worth 1 5B | MasTec Inc NYSE T secured a large project pipeline construction award with an expected contract value of over 1 5 billion Following the news the company s shares jumped 4 on Oct 16 Construction is expected to start in 2018 This opens up significant multi year opportunities for large pipeline construction project activity in the United States The company had previously indicated that Oil Gas segment backlog at 2017 end will be on par or surpass 2016 levels MasTec stated that it has received oil and gas awards recently to the tune of around 2 billion It will provide further information regarding activity in its large project pipeline market during its third quarter earnings call in early November Record Oil Gas Activity in Q2MasTec had delivered record second quarter 2017 adjusted earnings per share of 1 03 comfortably beating the Zacks Consensus Estimate of 66 cents Earnings also surged an impressive 186 year over year The better than expected performance was particularly led by record levels of Oil Gas project activity The company s net sales surged 53 year over year to record 1 89 billion in the quarter outpacing the Zacks Consensus Estimate of 1 49 billion The Oil and Gas segment which contributed 60 of its revenues in the reported quarter also soared a whopping 168 to 1 1 billion over last year s second quarter level Backed by record levels of Oil Gas project activity MasTec had hiked 2017 guidance during the second quarter conference call The company currently estimates 2017 annual revenues of approximately 6 0 billion up from the prior projection of 5 7 billion Compared with the revenues of 5 7 billion in the 2016 the guidance reflects a year over year improvement of 5 Annual adjusted EBITDA is now projected to increase 30 on a year over year basis to 620 million up from the prior projection of 575 million Adjusted earnings per share are anticipated to be around 2 73 up from the previous guidance of 2 45 a 44 increase over 2016 Segments Poised for GrowthIn wireline and wireless communication markets MasTec anticipates significant expansion related to both 5G and fiber deployment which signal strong prospects for its communications business Every major carrier has publicly disclosed plans and initiatives for 5G In its wireline markets fiber expansion continues to be a catalyst The company anticipates significant opportunities related to gigabit broadband initiatives along with fiber deployment Verizon Communications Inc NYSE VZ inked a significant deal with Corning Incorporated NYSE GLW to secure over 37 million miles of fiber cable material over the next three years MasTec expects strong nationwide fiber deployment projects from both telephone companies and cable TV companies that will provide it with significant opportunities over the coming years Also AT T Inc NYSE T was recently awarded by FirstNet to build a national public safety wireless broadband network This will have a multiyear positive impact on MasTec s business in early 2018 In the last four months MasTec received fiber projects awards worth 750 million Backed by this momentum the company expects future awards to be the likely long term growth drivers For Electrical Transmission business MasTec expects continued improvement in results during 2017 The company foresees 2017 as a transitional year for this segment with anticipated improvement in end market It also expects to witness large industry awards in the business leading to a much improved environment in 2018 and beyond Acquisitions to be CatalystsThe company will also benefit from its recent acquisitions MasTec acquired SEFNCO Communications Inc a telecommunications service provider primarily servicing the cable TV industry in the West Coast This will expand MasTec s geographic and customer capacity in the wireline fiber deployment market The buyout will also considerably expand the company s wireline construction abilities in a geography where its customer exposure was limited In the second quarter MasTec acquired Texas based infrastructure construction company Cash Construction that will provide exposure to growing water market MasTec also acquired a leasing company of Oil Gas specialty pipeline equipment In addition to aiding the company prune overall equipment costs the buyout will provide a competitive advantage during the current multi year cycle of significant Oil Gas pipeline project activity which is anticipated to continue at record levels Further the geographic expansion of heavy civil operations as well as entry into the water sewer and drainage systems infrastructure market operations will provide opportunity to capitalize on the increasing demand trends in this market Today s Stocks from Zacks Hottest StrategiesIt s hard to believe even for us at Zacks But while the market gained 18 8 from 2016 Q1 2017 our top stock picking screens have returned 157 0 128 0 97 8 94 7 and 90 2 respectively And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 Q1 2017 the composite yearly average gain for these strategies has beaten the market more than 11X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
VZ | T Mobile beats quarterly phone subscriber estimates | By Sheila Dang and Noor Zainab Hussain Reuters T Mobile US Inc O TMUS on Monday beat analysts third quarter estimates for net new phone subscribers who pay a monthly bill boosted by competitive wireless plans aimed at fending off its bigger rivals The third largest U S wireless carrier by subscribers has been locked in a lengthy battle to close its merger with smaller carrier Sprint Corp N S It faces a state attorneys general lawsuit led by New York and California and set to go to trial on Dec 9 that alleges the merger would be harmful to consumers T Mobile Chief Executive John Legere speaking on a conference call with analysts said discussions were continuing with the attorneys general and he felt good about where they were headed either in settlement or going to trial Legere said T Mobile expects it will be permitted to close the merger in early 2020 The carrier added 754 000 phone subscribers who pay a monthly bill on a net basis in the three months ended Sept 30 compared with 774 000 additions a year earlier Analysts had expected 742 600 new postpaid phone subscribers according to research firm FactSet Investors pay close attention to postpaid customers or those with a recurring bill because they are more valuable to carriers and tend to remain with the company longer than prepaid users T Mobile customer growth in quarters Legere also teased an announcement on Nov 7 related to New T Mobile the name that has been dubbed for the combined T Mobile and Sprint Though Legere provided few details he said in response to an analyst question that he expected the announcement would answer some of the questions from the states in the merger lawsuit Both Verizon NYSE VZ and AT T NYSE T which are larger than T Mobile by subscriber count beat Wall Street estimates for net new phone subscribers Bellevue Washington based T Mobile said it expects pre close merger related costs to be 125 million to 150 million before taxes in the fourth quarter The company said it now targeting adjusted core earnings for 2019 of 13 1 to 13 3 billion up at the midpoint from prior guidance of 12 9 to 13 3 billion T Mobile s third quarter net income rose to 870 million or 1 01 per share from 795 million or 93 cents per share a year earlier Analysts had expected earnings of 1 01 per share according to IBES data from Refinitiv Revenue rose 2 to 11 06 billion missing estimates of 11 33 billion
Shares of T Mobile were down slightly to 82 02 in trading after the bell |
VZ | WeWork begins search for a new CEO sources | By Sheila Dang and Greg Roumeliotis
Reuters WeWork has started a search for a new chief executive following the departure of co founder Adam Neumann people familiar with the matter said on Monday as the U S office sharing start up seeks to reverse its widening losses
WeWork s current co CEOs Artie Minson and Sebastian Gunningham have only been in place since September but talks indicated SoftBank Group T 9984 WeWork s majority owner is eager for a fresh change after a botched effort to go public this year
WeWork has been in talks with a number of potential CEO candidates including U S wireless carrier T Mobile US Inc O TMUS CEO John Legere the sources said The Wall Street Journal first reported on Legere s talks with WeWork about the CEO job
WeWork and T Mobile declined to comment
Legere is not a leading candidate for the WeWork CEO role one of the sources said Ongoing talks with WeWork could represent a conflict given that Legere is seeking to renegotiate with SoftBank the 26 billion merger of T Mobile and Sprint Corp N S
The deal is currently awaiting regulatory approval and Legere said last week talks were ongoing with Sprint to extend their merger agreement He declined to rule out requesting that the 26 billion price be reduced
SoftBank last month spent around 10 billion to take control of WeWork rescuing the company from potential bankruptcy after it failed to complete an initial public offering which also led to Neumann s departure
Neumann who attracted criticism for his erratic management style was replaced as CEO by Minson and Gunningham but speculation has been rife that the pair are only a stopgap solution
Since taking control of WeWork SoftBank has already installed its chief operating officer Marcelo Claure as the executive chairman of WeWork parent The We Company
SoftBank has talked about the need to return to WeWork s core business of renting out trendy office space to freelancers and enterprises That would pull the company back from the fringe activities Neumann had forayed into such as education
In a presentation published last week WeWork said it also plans to divest seven non core businesses Conductor the Wing Managed by Q Meetup SpaceIQ Teem and Wave Garden The units organize meetings provide facilities and workplace management and marketing
Legere who frequently wears clothes in T Mobile s magenta brand color is an outspoken CEO well known for calling out larger competitors Verizon NYSE VZ and AT T |
WMB | Injury hit Osaka heads to French Open after rocky clay season | By Jack Tarrant TOKYO Reuters After pulling out of last week s Italian Open due to injury World number one Naomi Osaka admitted she has had a rocky claycourt season heading into the French Open Osaka who won the Australian Open in January to follow on from her dramatic victory over Serena Williams NYSE WMB at the U S Open in 2018 is looking to become just the 11th woman to claim a third consecutive Grand Slam title However following the hand injury that forced her out of a quarter final clash with Kiki Bertens in Rome and an abdominal injury suffered in Stuttgart last month Osaka arrives in Paris with concerns over both her form and fitness The 21 year old has proved herself a destructive and powerful hardcourt player with her two Grand Slam wins in the past year but her record on clay is less impressive Osaka has never won a top level WTA event on the surface and has failed to progress past the third round previously at Roland Garros I would describe my clay season as rocky Osaka said in Rome But I can t necessarily say it s been ups and downs because if I think about it it s definitely been going up Every match I ve played I ve learned a lot I ve tried to take what I ve learned into the next match and I think I ve done that well Anyone tempted to doubt Osaka ahead of the French Open which begins next week should consider her Grand Slam record Osaka saves her best performances for the biggest stage she has won 76 of all of her Grand Slam matches Her win ratio at other tournaments is in the 50s During a recent interview with the Financial Times Osaka admitted to feeling the pressure that comes with being world number one I ve never been number one and a lot of people were talking about it and I think I let it get to my head a little bit she said When you re number one you re not really supposed to lose At least that s how I feel Of course people lose all the time But I just felt like I should at least win a tournament every month or something Osaka s compatriot Kei Nishikori looks a far cry from the player who last reached the French Open quarter finals in 2017 The 29 year old is still coming back from a wrist injury suffered in 2017 but did win his first title in three years at the Brisbane International in January However since then the world number seven has struggled going out before the quarter final stage at five of his eight tournaments since the Australian Open
He lost to Argentina s Diego Schwartzman in the Rome quarters |
WMB | Fed s Williams says U S rates in the right place inflation pressure nonexistent | By Trevor Hunnicutt NEW YORK Reuters U S interest rates are in the right place given a strong economy and essentially nonexistent inflation pressures a top Federal Reserve policymaker said on Wednesday New York Fed President John Williams NYSE WMB said at a press briefing that there is not currently a strong argument for changing rates including as a response to low inflation readings that may due to temporary factors We need to make sure that we continue with a strong expansion the strong economy in a way that leads to inflation moving back to our symmetric 2 goal Williams said in response to a question on whether a rate cut could help support inflation If that requires an adjustment of monetary policy down the road at some point then based on all that analysis and evaluation if that s appropriate then I think we should do that I don t think we re at that point today and I don t think we ll be at that point in the very near future The Fed s preferred inflation gauge the core personal consumption expenditures PCE price index rose 1 6 on a year on year basis in March the smallest rise in 14 months The gap in yield between short and long term U S government bonds narrowed after Williams remarks with the spread between 2 and 10 year Treasuries falling to under 16 basis points from around 18 basis points earlier in the morning In recent weeks markets have been increasingly positioning for the possibility of the Fed s next move being a rate cut Long term yields are more responsive to inflation than shorter term bonds which are heavily influenced by expectations of Fed policy Williams who is vice chairman and a permanent voting member of the Fed s rate setting committee also said some risks to global growth have receded and domestic drivers of the U S economy are strong likely putting growth above 2 and its long run potential this year Rates meanwhile of currently between 2 25 2 50 are right about at a neutral level that neither eases the economy nor restricts it and he sees limited argument for changing those borrowing costs
The Fed will release the minutes of its latest monetary policy meeting later on Wednesday |
WMB | Motor racing Hamilton exempted from media duties as F1 mourns Lauda | By Alan Baldwin MONACO Reuters Formula One world champion Lewis Hamilton was exempted from media duties at the Monaco Grand Prix on Wednesday as teams and drivers came to terms with the death of triple world champion Niki Lauda A team spokesman said they had asked for Hamilton to be excused on the grounds that he had lost a very close friend in Niki Lauda who died on Monday aged 70 won in Monaco with Ferrari NYSE RACE in 1975 and 1976 but was latterly the Mercedes team s non executive chairman and shareholder with principal Toto Wolff Formula One said a tribute was in the works with details to be confirmed A minute s silence is likely before the race Hamilton a five times world champion had paid an emotional tribute to the Austrian on Instagram on Tuesday night My buddy I am struggling to believe you are gone he said While he made an appearance in the harborside paddock arriving on a motorcycle and waving to fans the Briton now has no official media commitments until after Saturday s qualifying Finnish team mate Valtteri Bottas spoke to reporters instead He Lauda was a key member of ours in the race team and factory a big part of the Mercedes family and was a massive motivation for everyone and myself as well Bottas said Mercedes said team members would wear black armbands from Thursday and the cars would have Danke Niki Thanks Niki and the Austrian s signature on the nose of the cars One of the stars on the engine cover will be painted red Lauda wore a trademark red cap to cover the burns he suffered in a fiery near fatal crash at the Nuerburgring in 1976 the year of his title duel with McLaren s James Hunt Ferrari and McLaren the teams Lauda won his titles with will also carry stickers on their cars celebrating his achievements Lauda won the 1975 and 1977 world titles with Ferrari He then made a comeback from retirement to take his third title with McLaren in 1984 TRUE CHARACTER I think there s a lot of people that are not the way you see them on television I think they are growing in numbers quickly but Niki wasn t one of them said Ferrari s Sebastian Vettel He was who he was and never pretended to be anything or anybody else very outspoken a true character a true racer passionate for the sport said a lot of things people respected He s leaving a big gap we won t be able to fill Photographs and television footage of Lauda s famous 1976 duel with rival and eventual champion James Hunt were being played constantly on screens in the Ferrari and Mercedes hospitality units British rookie George Russell a Mercedes backed driver who was the team s official reserve until securing a race seat with Williams NYSE WMB recalled how he and Lauda used to watch MotoGP races together He just loved everything racing really he said I remember at Silverstone when I won my first or second GP3 race and he was down at the podium with Toto and I couldn t believe it really I d only been part of Mercedes for half a year and there s Niki Lauda congratulating me at the podium He was just an amazing person Formula One managing director for motorsport Ross Brawn who worked with Lauda at Mercedes in 2012 said the Austrian had been key to Hamilton s move from McLaren particularly in persuading the Mercedes board to part with the money Niki s loss is of huge significance to Formula One said the Briton Ours is a sport that revolves around larger than life personalities and Niki was one of racing s most formidable characters
His presence in the paddock was a reminder that Formula One is a sport of heroes an arena for competitors who push past common limits of fortitude and endurance and find an elevated plane beyond the ordinary Simply he was a legend |
WMB | Hamilton fastest for mourning Mercedes in Monaco | By Alan Baldwin MONACO Reuters Formula One world champion Lewis Hamilton was fastest for mourning Mercedes in both Monaco Grand Prix practice sessions on Thursday The Briton excused media duties following the death of Mercedes non executive chairman and triple world champion Niki Lauda lapped the treacherous street circuit with a quickest time of one minute 11 118 seconds in the afternoon on soft tyres The five times world champion seven points clear of team mate Valtteri Bottas at the top of the standings after five races had set the pace on a dry morning with a time of 1 12 106 Red Bull s Max Verstappen was second fastest in the first session just 0 059 slower than Hamilton but sat out much of the afternoon with a suspected water leak Bottas ended the day in second place and 0 081 off the pace in a familiar Mercedes one two It s the dream for every driver to come to Monaco and have a car that you can exploit and utilize your abilities with Hamilton said in a team review of the day We ve made some small tweaks over the two sessions and during the sessions as well but I ve been quite happy with the set up Between them Hamilton and Bottas have won every race this year with five successive one twos the best ever start to a season and are favorites for a sixth on Sunday Charles Leclerc hoping to become the first Monegasque to stand on his home podium since Louis Chiron in 1950 was fourth fastest for Ferrari NYSE RACE in the first session with four times champion team mate Sebastian Vettel fifth HAMILTON S PACE Vettel moved up to third in the later session 0 763 off Hamilton s pace and just ahead of Red Bull s Pierre Gasly while Leclerc dropped to 10th Talking about our performance we are struggling a bit we are lacking some pace compared to our main rivals Vettel said We are still not happy with how the tyres work I think we have a bit of work ahead of us Leclerc said he had felt comfortable in the morning but was held up by traffic later on Mercedes Ferrari and McLaren all carried tributes to Lauda on their cars with Mercedes team members also wearing black armbands Vettel wore a helmet modeled on one of Lauda s with the Austrian s name on Two of Lauda s three titles were won with the Italian team Both sessions were free of crashes although there were the inevitable near misses on a tight and twisty circuit where cars skim the metal barriers and brush the unforgiving walls Gasly had a close escape at the exit to the first swimming pool chicane early on while Robert Kubica spun his Williams NYSE WMB at the exit to Casino Square NYSE SQ but came to a halt without serious damage McLaren had a difficult first session with Carlos Sainz failing to set a lap time and Lando Norris only 15th but recovered to 13th and 12th later on Last year s winner Daniel Ricciardo who has since moved from Red Bull to Renault PA RENA ended the day in 17th place and just behind German team mate Nico Hulkenberg
Williams were last and about four seconds off the pace |
WMB | Athletes ask doping agency to take marijuana off banned list | More than 150 current and former athletes signed a letter sent to the World Anti Doping Agency asking the organization to remove marijuana from its list of prohibited substances Boxer Mike Tyson retired football players Jake Plummer and Ricky Williams NYSE WMB and cyclist Floyd Landis are among the athletes who submitted the letter through Athletes for CARE The nonprofit organization advocates for research into using cannabis to treat a variety of health issues Athletes for CARE is proud to have such a strong network of respected athletes campaigning for the removal of cannabis from the World Anti Doping Agency s prohibited substance list Anna Symonds a rugby player and Athletes for CARE representative said in a statement We re also calling on fans to show their support online via our Change org petition WADA sets drug policy for Olympic sports The letter specifically asks for THC the main active ingredient of cannabis to be removed from the list We have found an improved quality of life through cannabis and natural cannabinoids including significant therapeutic and wellness benefits and these positives should be freely available to all other athletes the letter reads The release of the letter comes two days after recently retired NFL defensive end Chris Long said in a radio interview that he used marijuana throughout his career
Listen if not for that I m not as capable of coping with the stressors of day to day NFL life Long said A lot of guys get a lot of pain management out of it Field Level Media |
WMB | Draw hands Federer smooth start on French Open return | By Julien Pretot PARIS Reuters Roger Federer was handed a comfortable looking start in the French Open draw on Thursday as the 20 times Grand Slam champion makes his return to the tournament after a three year hiatus The third seeded Swiss will open his quest for a second Musketeers Cup against Italian Lorenzo Sonego the world number 73 but faces a potentially tricky quarter final against young Greek Stefanos Tsitsipas who beat him at this year s Australian Open Former world number one Federer 37 is in the same half of the draw as claycourt master Rafa Nadal and could meet the Spaniard in the semis Defending champion Nadal seeded second will open up against a qualifier as he aims for a record extending 12th title at Roland Garros I had my first training today and I had good sensations said Nadal who was given a tour of the renovated stadium by tournament director Guy Forget after winning his first claycourt title of the season at the Italian Open It was very important for me to play well in Rome I hope it s a good sign for Roland Garros the Spaniard who could face Japanese Kei Nishikori in the last eight added World number one Novak Djokovic who is looking to hold all four majors for the second time in his career will take on Hubert Hurkacz with a possible quarter final against German Alexander Zverev In the women s draw world number one Naomi Osaka will kick off her bid for a maiden French Open title against Slovak Anna Karolina Schmiedlova Defending champion Simona Halep of Romania the third seed will take on Australian Ajla Tomljanovic after being drawn in the same half as Osaka Serena Williams NYSE WMB will face Vitalia Diatchenko in only her second match on clay this season after she retired from the Italian Open ahead of a second round match against her sister Venus due to a knee injury With 23 singles Grand Slam titles to her name the 10th seeded American on a quarter final collision course with Osaka is one short of the all time record of Margaret Court One of the first round clashes to watch is 2017 champion Jelena Ostapenko against two times Grand Slam winner Victoria Azarenka with the winner likely to take on Osaka in the second round |
WMB | Serena remains America s best hope at French Open | By Rory Carroll LOS ANGELES Reuters Serena Williams NYSE WMB represents the United States best chance to hoist the French Open trophy this year but questions loom about her fitness after she was forced to withdraw from the Italian Open last week with a knee injury Williams a three times French Open champion who has a 28 4 record on the red clay of Roland Garros could be dangerous if she is pain free and can get off to a good start Hopefully Serena is healthy enough to play Martin Blackman general manager for player development with the United States Tennis Association USTA told Reuters She s such a professional that she doesn t play unless she s healthy especially Grand Slams he said of the 23 time major champion who is currently ranked number 10 in the world So if she does I think with every match that she wins she becomes a bigger and bigger threat Her sister Venus has underperformed this year but remains in the conversation given her experience at slams which includes a finals appearance at the French Open back in 2002 The speedy defensive minded Sloane Stephens reached the French Open final last year and the 2017 U S Open champion could be poised to get the job done this year Clay is a great surface for Sloane Blackman said She s such a good mover she s so good at opening the court and she has so many different ways to hurt you And she is getting more and more comfortable at the net Powerhouse Madison Keys who fell to Stephens in the French Open semi finals last year won her first clay court title at the Charleston Open in April defeating Stephens and Caroline Wozniacki in the process Madison recently made a coaching change she s working with Juan Nacho Todero and I think they are in a really good place Blackman said She s healthy she s fit and if she gets to the second week she s super dangerous LESS OPTIMISTIC While there s a host of contenders on the women s side U S tennis fans can feel less optimistic about the men s chances The top American man world number 10 John Isner last week withdrew from the French Open due to a foot injury he picked up during his Miami Open final defeat by Roger Federer in March The next best hope is probably the hard hitting Sam Querrey who has had success on clay in Davis Cup competition but has never got past the third round at the French Open with his best result coming back in 2008 Rising Americans Frances Tiafoe Taylor Fritz and Denis Kudla are a combined 0 8 in their main draw matches in Paris so will all enter the tournament amid low expectations One bright spot for the U S men could be big serving 21 year old Reilly Opelka making his French Open main draw debut
Really keep an eye out for Reilly Blackman said of Opelka who routinely serves in the low 140 mile per hour range His serve can give you nightmares No one wants to play him |
WMB | Tennis Clay field wide open for new women s champion | By Ossian Shine Want to know who will win the women s French Open Stick a pin in the draw That cliche has seldom rang more true than at this year s Roland Garros where no players stand out and few seem to be hitting form in the run up to the year s second major The nine women s claycourt tournaments so far this season have had nine different champions and with nobody able to dominate who will win the French is pure guesswork Anything can happen it s hard to pick a winner three times champion Arantxa Sanchez Vicario told Reuters recently It s an unusual situation quite open Anything can happen in two weeks Certainly if top seed and world number one Naomi Osaka is going to add to her U S and Australian Open titles she will have to do it the hard way Assuming she navigates past Slovak Anna Karolina Schmiedlova in the first round the Japanese star will face either former world number one and grand slam champion Victoria Azarenka or dynamo 2017 champion Jelena Ostapenko Neither one is a player Osaka will relish meeting in a second round match especially not on the Parisian clay a surface on which she is still learning Naomi looks to have staying power and she has become a huge star the 1991 and 1992 men s champion Jim Courier said Clay is not the surface that matches her style the best but she can beat anyone if she s sharp She certainly knows how to close a tournament out so she ll have no fear if she goes deep at Roland Garros FIGURE OUT CLAY Osaka herself knows she needs to figure out clay and fast Honestly it s been a bit of a ride trying to figure out how to play better on clay throughout these years she said at Roland Garros on Friday But I think this year I have been playing well So I m really excited to see what happens here Neither is world number two Karolina Pliskova a natural claycourter but victory in Rome where she beat resurgent Briton Jo Konta in the final provided a nod to her Paris credentials A better bet perhaps may be Simona Halep though The Romanian defending champion is yet to win a title this year but punched deep in Madrid this month reaching the final before a limp display in Rome She is the most comfortable on clay of the big guns and is fancied by France s Marion Bartoli a former Wimbledon champion who knows Roland Garros well Simona is really a clay court player Bartoli said Her game is tailored for this surface For her the main thing will be to control her emotions because she is the defending champion and it will be the first time she will feel that pressure She is the favourite for me to win again though Petra Kvitova is a real contender too Halep s conqueror in Madrid Dutchwoman Kiki Bertens is winning plenty of admirers and has risen to fourth in the world on the back of some great performances Already this year in addition to Halep she has beaten Osaka Kvitova Angelique Kerber and Sloane Stephens Kiki has really surprised me former champion Kim Clijsters told Reuters Not just recently but over the years to stay and keep improving and build her level mentally and be a very big contender now to win a Slam SERENA INJURY With 23 Grand Slam singles titles to her name it would be foolish to dismiss Serena Williams NYSE WMB But after she withdrew from Rome with a knee injury question marks remain Hopefully Serena is healthy enough to play Martin Blackman general manager for player development with the United States Tennis Association USTA told Reuters
She s such a professional that she doesn t play unless she s healthy especially Grand Slams So if she does I think with every match that she wins she becomes a bigger and bigger threat Few would disagree Last year in only her third tournament back after giving birth Williams reached the last 16 before injury struck She can challenge oh yeah Clijsters said She has so much experience in knowing what she needs to do how she needs to feel even when she s not playing her best or not feeling so great She still wants to keep improving and that s something that I really admire about her She is not coming to the French Open to go shopping and show her family Paris she is there to try to win the tournament and she is capable of doing that |
WMB | Tennis Osaka adjusting to clay on time for French Open | By Julien Pretot PARIS Reuters Naomi Osaka believes she is finally getting to grips with claycourt tennis as she is about to start her first grand slam as the top seed at this year s French Open The world number one from Japan has won the last two majors the U S and Australian Opens but she has yet to claim a title on the slowest surface Definitely for me I feel like I should be an all court player Honestly it s been a bit of a ride trying to figure out how to play better on clay throughout these years but I think this year I have been playing well Osaka told reporters ahead of the May 26 June 9 tournament at Roland Garros So I m really excited to see what happens here Osaka reached the semi finals in Stuttgart and the quarter finals in Madrid and Rome on the red dirt this season Looking to improve her claycourt skills she spent a bit of time at 11 time French Open champion Rafael Nadal s academy I was able to go there for a little bit in between Germany and Spain It was really nice she said Everyone is very nice and helpful And then I met Rafa So that was really cool Her claycourt results and her recent success at the majors have boosted her confidence I don t want to be here thinking I want to get to the quarters she said even though her best result at the French Open was reaching the third round in 2016 and last year I have never been that far here before but my end goal is to win of course Osaka will start her campaign against Slovakian Anna Karolina Schmiedlova before a potentially explosive second round clash against two time grand slam champion Victoria Azarenka or 2017 French Open winner Jelena Ostapenko
Serena Williams NYSE WMB the 23 time major champion could be her quarter final opponent while defending champion Simona Halep is a potential semi final obstacle |
WMB | Another MLP Simplification Benefits From Favorable Depreciation Rules | Last week Williams Companies NYSE WMB simplified their structure by acquiring the assets of their Master Limited Partnership MLP Williams Partners WPZ As was the case with Kinder Morgan s NYSE KMI move last year the objective was to move to a simpler structure with a lower cost of equity driven by faster dividend growth supported by a bigger tax depreciation shield Although the effect wasn t as big as with KMI WMB was similarly able to take advantage of depreciation rules that allow assets acquired from a partnership to be written up to current market value thus creating a higher level from which tax deductible depreciation can be made This contrasts with the rules that apply when a corporation is acquired whereby the excess over book value paid by the acquirer is reflected as an intangible asset goodwill No similar depreciation of goodwill is allowed Given the choice you d rather buy assets from a limited partnership than a corporation since in the depreciation rules are more favorable WMB expects to realize a 2 1 billion benefit over 15 years from this stepped up cost basis which will support a dividend growth rate of above 10 Its 4 9 yield looks attractive
Regular readers of this blog might have started to feel that we never come across an MLP General Partner that we wouldn t like to buy Although we think the sector is attractive this isn t true of every security EQT GP Holdings EQGP recently started trading following its IPO EQT Midstream Partners LP NYSE EQM is an MLP focused on natural gas gathering storage and transmission in the Marcellus shale in SW Pennsylvania and West Virginia EQGP is its GP with Incentive Distribution Rights over its cashflows
We were potentially interested in EQGP depending on pricing However its forecast first year distribution of 0 365 even if combined with a heady growth rate of 40 had us thinking that a mid 20 s price for the IPO would be a full price but probably justified because of the growth outlook The IPO buyers regarded us as needlessly conservative however and EQGP commanded a low 30 s price from inception Too rich for us we ll wait for another pitch
Of the names mentioned we are invested in KMI and WMB |
WMB | LNG Exports Will Soon Commence | A question I m often asked is how the business prospects of many MLPs will respond permanently to lower prices for oil and gas perhaps lower than where they are today
From a high level markets often appear vulnerable to a correction This is especially true with the S P 500 You rarely hear anyone simply say the market looks cheap and in fact it s easy to find reasons to worry Today it s rising rates and the threat of Grexit but there s always something to worry about And if there isn t then you can worry about complacency For me the solution is to look at individual companies because while the market outlook can be uncertain the prospects for fill in the blank corporation often appear far more tangible and clear than for the broader averages
The same is true with MLPs Prices have fallen along with the energy sector So look at Cheniere Energy ARCA LNG and their LNG export facilities at Sabine Pass LA and Corpus Christie TX It may seem quaint to remember but not that many years ago the U S was preparing to import LNG The two abovementioned facilities were built for that reason until the boom in domestic natural gas production led to a glut and rendered the economic assumptions underlying imports no longer valid
So the facilities were switched to export LNG instead This is not a trivial task Natural gas has to be compressed and cooled to around 256 degrees Fahrenheit before being piped into the large spherical tanks you see on LNG tankers Handling LNG is far harder than crude oil and the regulatory oversight is substantial as you might imagine An accident at an LNG terminal would be a spectacular sight as long as viewed from many miles away
Cheniere s CEO Charif Souki has a substantially bigger risk appetite than ours as I ve written before see U S Natural Gas Terms of Trade Continue to Shift but he is close to starting operations at the first LNG export facility in the lower 48 states The relevance to MLPs of this milestone is that the natural gas that Cheniere will export has to be transported to their terminals via pipeline and stored prior to processing and loading onto LNG tankers Two important infrastructure providers are Kinder Morgan NYSE KMI and Williams Companies NYSE WMB KMI plans to provide pipeline capacity and storage for Cheniere s Corpus Christie facility back in December
WMB will be its Transco pipeline network an enormous connection of pipelines and supporting infrastructure running down the eastern U S from the north east to Texas Last year they announced they d be building Gulf Trace which will bring natural gas from the Marcellus Shale in Pennsylvania down to the Sabine Pass LNG export terminal and from there to foreign customers
The question of whether low commodity prices are good for energy infrastructure is not one that can be answered with a simple yes or no The LNG export projects provide an example of how the domestic energy business is exploiting opportunities from low domestic prices
We are invested in KMI and WMB |
WMB | Energy Transfer s Kelcy Warren Thinks Like A Hedge Fund Manager | Last Monday June 22nd Energy Transfer Equity NYSE ETE went public with their rejected merger proposal to Williams Companies NYSE WMB in an effort to force WMB to the negotiating table WMB s stock rose by most of the 32 premium ETE has offered and in recent days has held on to most of that gain as the market has assessed likely outcomes ETE s presentation highlights the synergies of such a combination Another comforting fact is the ownership of WMB stock by hedge funds Corvex and Soroban who hold 5 6 and 2 8 respectively Corvex has not always been a positive influence for stockholders and last year we wrote about the Corvex Discount that should apply to any stock they own see Williams Companies Has A Corvex Discount However in spite of this we are long time investors in WMB It s worth noting that Corvex and Soroban are on WMB s board so their views will be a factor in any decision
The headlines will focus on developments at WMB as they consider their strategic options in light of ETE s interest in them We think WMB is likely to move higher as a result What s drawn less attention is the likely outcome for Williams Partners NYSE WPZ the MLP that WMB controls as its GP On May 13th WMB plans to acquire the outstanding units of WPZ in a transaction intended to boost WMB s dividend growth in part through tax gains from depreciating the newly acquired assets from a higher valuation It s the same technique used by Kinder Morgan NYSE KMI last year to fuel faster distribution growth at KMI when they announced plans to combine Kinder Morgan Partners El Paso and Kinder Morgan Management into one entity The tax insight KMI had was that acquiring assets from a limited partnership allows them to be revalued at the purchase price and thereafter depreciated against taxes from this higher level The practical consequences were 20 billion in tax savings for KMI which helped fuel a doubling of their forecast dividend growth to 10 and an unexpected tax bill for Kinder Morgan Partners unitholders since the transaction resulted in a sale of their LP units not necessarily at a time of their choosing
WMB s previously announced plan to acquire outstanding WPZ units is also driven in part by this favorable tax treatment However ETE s merger proposal is conditional on WMB dropping its announced plans to buy WPZ ETE doesn t want that transaction to go through As a result although WMB s stock rose substantially following the announcement the price of WPZ units fell
To understand why you have to regard MLPs as hedge funds and MLP GPs as hedge fund managers a view we ve long articulated and one evidently shared with the senior managers of many MLPs see Follow the MLP Money If you want to control the assets of a hedge fund you do that by controlling the hedge fund manager not by investing in the hedge fund Similarly Kelcy Warren ETE s CEO understands that to control the assets owned by WPZ he need only control WMB s GP not WPZ itself Under this analysis paying a premium to acquire WPZ units may not be the best use of capital and in fact leaving WPZ as a publicly traded MLP albeit with two thirds of its LP units owned by WMB provides optionality If WPZ s cost of capital falls ETE may drop assets into it where they can be cheaply financed Or if WPZ s yield remains high they may retire some LP units Having WPZ remain out there is in ETE s view a good thing It shows that the decisions get made by the owners of the MLP GPs not the MLP unitholders themselves As we ve said before the MLP GP is like a hedge fund manager |
WMB | MLP Earnings Provide Update On Fundamentals | Energy investors have seen their holdings buffeted of late by the price of oil and Master Limited Partnerships MLPs have been no exception to this Their prices have moved as if they have substantial exposure to oil whereas midstream MLPs are most notable for their cashflows being predominantly fee driven Over the past few days several firms reported quarterly earnings showing business operations that are far less exciting than their security prices suggest
Before we get to that it s worth contrasting recent news on planned capital investment from Royal Dutch Shell LONDON RDSa with plans at Kinder Morgan NYSE KMI RDS announced they were cutting 6 500 jobs out of a total workforce of 94 000 and reducing their planned capital spending by 7BN to 30BN as a result of weak oil prices which they expect to persist There is a substantial timelag between shifts in the price of oil and changes in supply but here s one example of a reduction in future supply in response to lower prices Kinder Morgan as we noted in a previous blog post Kinder Morgan Isn t Greek recently increased its backlog of projects from 18 3BN to 22BN during the most recent quarter these cover several years so longer than the one year over which RDS cut its planned investments Both companies are in the energy sector and yet they re experiencing the fluctuations in oil prices very differently
To return to recent earnings results from the companies we care about were generally good Williams Companies NYSE WMB affirmed its 10 15 dividend growth through 2020 and currently yields 4 8 Enterprise Products Partners LP NYSE EPD raised its distribution by 6 year on year and yields 5 25 with very conservative 1 3X coverage Western Gas Equity Partners WGP the General Partner for Western Gas LP WES increased its distribution by 34 year on year and reaffirmed its outlook for 30 growth going forward It yields 2 5 Finally US Silica NYSE SLCA whose main business provides sand to companies for use in fracking saw its revenues fall 28 and sand volumes drop 13 less than expected resulting in a 15 jump in its stock price on the day of the release although admittedly it remains lower than we originally expected
In short fundamentals on individual names are showing that the energy infrastructure business remains sound in spite of the weakness in their stock prices Everybody would like to know when prices will rise while we can note several solid earnings reports and can opine on business conditions calling equity markets is hard But the news we received over this past week was positive |
WMB | Why MLPs Did What They Did In September | In September Master Limited Partnerships had a tumultuous month On September 29th one day before month s end we were looking at the worst monthly performance in the history of the Alerian Index A strong recovery on the 30th reduced the damage somewhat but MLPs have had a terrible year and September was nonetheless awful
Why the market did what it did is far and away the most common question we receive We re not market timers and so don t devote much effort to figuring out near term direction But people want to know and we ve developed a narrative that we think explains recent sharp moves
Regular readers of this blog are used to me attempting different ways to say the same thing which is that MLPs are cheap In September they became cheaper still If you need reminding of the case you might peruse recent posts such as Listen to What the Oil Price is Saying or MLPs Now Look Attractive Relative to Equities The Alerian Index yields 8 The case remains even while prices have dropped On Thursday Enterprise Products Partners LP NYSE EPD a 72BN enterprise value midstream MLP with significant crude oil and natural gas Liquids business declared a 0 385 quarterly dividend This represented a 5 5 year on year increase and their 54th distribution increase since going public in 1998 It yields 5 56
Our Separately Managed Account SMA clients remain steadfast and we have seen inflows from existing and new clients in recent months Mutual fund clients vary a little more Many are long term investors focused on understanding the fundamentals and therefore unwilling to let market fluctuations shake them unless supported by altered business conditions But some do rely on recent price movements to support their conviction or put another way lose confidence when prices are falling
It s clear in the many quarterly account reviews with clients for which Financial Advisors FAs are preparing The third quarter hasn t been pretty for investors generally MLPs simply represent the more extreme type of adversity being faced Some 60BN in mutual funds ETFs ETNs and closed end funds exist to provide MLP exposure to retail investors without those dreaded K 1s Not all these funds are poorly structured but many are Owning MLPs via a C corp structure offers the desired exposure with the simpler 1099 tax form albeit with the highly unattractive feature of a 35 corporate tax liability see The Sky High Expenses of MLP Funds
Expense ratios of as high as 9 are somehow an acceptable price for the K 1 averse would be MLP investor The 35 tax roughly means you get 65 of the return It s therefore reasonable to assume that the holders of such securities or the FAs who select them on their client s behalf are not the most discerning investors It s unlikely they spend much time examining the underlying holdings and their distribution yields growth rates and capex plans These are the investors for whom investment analysis begins and probably ends with a price chart Year to date performance for 2015 that was by September 29th 35 close to equaling 2008 s 36 9 was challenging for a great many of these
Fund flows have clearly been negative supporting the notion that fund sellers have been an important factor in recent weakness noted that closed end funds were forced to sell because they were hitting their leverage limits an example of the stupidity of investing with borrowed money whether you ve done so directly or through your choice of fund Moreover indiscriminate selling of MLPs across the sector bore out the wholesale exit by a certain class of holder Some writers inferred the market s rejection of Energy Transfer Equity s NYSE ETE acquisition of Williams Companies NYSE WMB when it was finally announced on the morning of Monday September 28th But there was very little new in the ultimate transaction that wasn t already widely known the Friday before So why was Energy Transfer Partners LP NYSE ETP down 6 5 on Monday All that changed was that ETP would now be able to connect its pipeline network in useful places to the WMB network ETP isn t otherwise involved in the transaction controlled as it is by its GP ETE We are invested in EPD ETE and WMB
We think there are a couple of other explanations One is that the Deferred Tax Liability DTL on many of the poorly structured MLP funds came close to flipping signs as unrealized gains evaporated with a market that had wiped out three years prior returns The consequence of a taxable MLP fund moving from an unrealized taxable gain to an unrealized taxable loss is that they no longer have a DTL Its mirror a Deferred Tax Asset DTA which might be expected to act like a net operating loss in that it creates a potential future tax benefit can t exist for open ended funds Hence the ALPS Alerian MLP NYSE AMLP began offsetting its DTA with an equal but opposite Valuation Allowance It s likely that most if not all taxable MLP funds could be shown to have reached this state if they published such figures on a daily basis like AMLP Taxable MLP funds that cross from a DTL to a DTA expose their holders to 100 of the downside since there s no longer a DTL cushion but only 65 of the upside since gains remain taxable Some of these funds started showing daily returns equal to the index on down days a truly unpleasant asymmetry for many investors and no doubt an additional inducement to sell for those paying attention
Many FAs we ve talked to have been concerned about upcoming quarterly account reviews with clients since although MLPs had a terrible quarter many other sectors were weak as well September 29th was the last day when you could sell an underperforming fund so as to keep it off the quarter end client statement Discussing a tough quarter can be easier if the offending investments are no longer in the client s portfolio The market certainly behaved as if indiscriminate selling climaxed on that day If MLPs were private and investors had to form opinions by studying their financial statements instead of looking at a stock chart there wouldn t be much of a story
The chart below compares the Alerian Index from its peak preceding the 2008 Crash with its current path from the August 2014 peak We ve come down a long way |
WMB | Lose Lose From Kinder Morgan | We re in earnings season and several Master Limited Partnerships provided updates this week that were generally unsurprising and reflected the stability of their business models On Monday Energy Transfer Partners N ETP announced an 8 year on year increase in their distribution Their GP Energy Transfer Equity N ETE increased its distribution 37 on a year ago These securities yield 9 5 and 5 5 respectively ETE expects to close on its acquisition of Williams Companies N WMB during 1Q16 which will add Williams Partners N WPZ to the family of its MLPs it already controls along with ETP they also control Sunoco LP N SUN and Sunoco Logistics Partners LP N SXL
Enterprise Products Partners N EPD announced earnings showing 5 growth in distributions with 1 3X coverage Its price rallied but still yields 5 8 based on its forecast next twelve months distribution WPZ reported a 21 year on year increase in 2015 EBITDA driven by good performance from several fee based projects WPZ rallied on the news although curiously its future controlling entity ETE did not even though ETE will ultimately benefit from this performance through its ownership of WMB On the earnings call Williams noted that low prices for natural gas had led to about 900 million cubic feet MMCF per day of shut ins whereby the E P company temporarily stops producing natural gas because of the low market price or lack of infrastructure to get it to market To put it in perspective the U S consumes around 77 BCF per day so this is a little over 1 of consumption It didn t seem to hurt results and they expect some of that production to come back online in the near term
Overall results were steady and unspectacular which is usually the case Distributions were as expected growth guidance was generally reaffirmed As I often say the business performance is far less exciting on a quarterly basis than one might conclude by observing movements in MLP unit prices
Kinder Morgan N KMI also issued a 1 6BN mandatory convertible security and regrettably it looks as if they were ripped off by their bankers When they began contemplating alternatives to issuing equity their stock was trading in the low 30s and their reluctance to sell equity at this level was understandable Instead they ve sold equity at possibly as low as 27 56 the lowest possible price at which conversion can occur This is where their shares wound up when the deal was priced no doubt depressed by the underwriters shorting the stock to hedge the new convertible issue The 9 75 coupon they re paying on this security is higher than either KMI s debt or equity even though it sits between those obligations in seniority on their balance sheet and the only risk being taken by the investor is the possibility of being converted into common at 27 56 at a time when the market price is below that While the rating agencies treat the issue as equity those bearish on the security will argue it s high cost leverage and that management is signaling they re worried that the stock is headed much lower than 27 56 The bulls will see it as super expensive dilutive equity It s inconceivable that KMI expected this outcome they would have been far better off continuing with their original plan of regular equity issuance A rare lose lose from Rich Kinder
Overall there wasn t much over the past week in fundamental news to provide much support to bears The most negative issue might be the continued volatility and relatively high dividend yields
Disclaimer We are invested in EPD ETE KMI and WMB |
GLW | Corning GLW Beats On Q1 Earnings Revenue Estimates | Corning Inc NYSE GLW reported first quarter 2017 adjusted earnings of 39 cents per share beating the Zacks Consensus Estimate by 4 cents 11 4 Earnings surged 39 3 on a year over year basis but declined 22 sequentially in the reported quarter The year over year growth was driven by improvement in revenues Adjusted revenues increased 14 5 year over year to 2 49 billion which comfortably surpassed the Zacks Consensus Estimate of 2 36 billion However revenues declined 2 6 on a sequential basis We believe that the beat reflects strength in the company s Optical Communications and Specialty Materials business lines Moreover Corning s Strategy and Capital Allocation Framework continues to boost shareholder value The company returned 552 million to shareholders through a combination of dividends and share buyback in the reported quarter Corning Incorporated Price Consensus and EPS Surprise We believe that these factors will help the stock to continue outperforming the broader market in the rest of 2017 We note that Corning has outperformed the Zacks industry on a year to date basis While the industry gained 8 8 the stock witnessed an increase of 13 4 Segment DetailsThe Display Technologies segment generated around 35 6 of total revenue On an adjusted basis revenues increased 2 1 from the year ago quarter but declined 6 4 sequentially to 846 million The LCD glass market and Corning s volume were up by a mid teen percentage on a year over year basis The company noted that sequential glass price declines were moderate equalling the best first quarter declines in the past six years Optical Communications generated almost 34 4 of total revenue much better than management s anticipated increase of at least 25 Reported segment revenues grew 34 3 year over year and was almost flat on a sequential basis to 818 million on the back of strong demand for fiber to the home market solutions in North America We note that the recently announced deal with Verizon NYSE VZ reflects this strength as U S based service providers overhaul networks to improve 4G coverage and speed up 5G deployments The Environmental Technologies segment generated around 11 6 of revenues Reported segment revenues were up 4 2 year over year and 12 2 sequentially to 275 million Specialty Materials generated 12 6 of revenues Reported segment revenues surged 32 2 year over year but declined 10 7 sequentially to 300 million backed by continuing strong adoption of Gorilla Glass 5 The Life Sciences business accounted for around 8 8 of revenues Reported revenues were up 2 9 from the year ago quarter and 1 9 sequentially to 210 million Operating DetailsAdjusted gross margin expanded 150 basis points bps from the year ago quarter but contracted 60 bps from the previous quarter to 42 3 Adjusted selling general administrative expense SG A as percentage of revenues decreased 90 bps from the year ago quarter and 40 bps from the previous quarter to 13 4 Moreover research development expense R D as percentage of revenues declined 90 bps on a year over year basis but increased 140 bps sequentially Operating margin excluding amortization of purchased intangibles and restructuring impairment other charges expanded 310 bps on a year over year basis and 150 bps from the previous quarter to 20 8 GuidanceManagement expects revenues and earnings per share EPS to grow on a year over year basis in second quarter 2017 Currently the Zacks Consensus Estimate for revenues and EPS are pegged at 2 49 billion and 41 cents respectively Corning expects glass volume to increase by mid single digit percentage on a year over year basis and low single digit percentage sequentially The company expects sequential LCD glass price declines to be substantially less than first quarter 2017 Optical Communications sales are anticipated to increase 10 from the year ago quarter in the second quarter Environmental Technologies sales are expected to be in line with the year ago quarter while Specialty Materials sales are anticipated to increase by a high teen percentage range The Life Sciences business will grow low single digit percentage from the year ago quarter For full year 2017 Corning still expects mid single digit percentage growth in glass volume in line with the overall LCD glass market Price is now anticipated to decline approximately 10 or possibly a lower rate Zacks Rank Other Key PicksCorning currently carries a Zacks Rank 2 Buy Other top ranked stocks in the broader technology sector are Applied Optoelectronics NASDAQ AAOI and UTStarcom NASDAQ UTSI Both the stocks sport a Zacks Rank 1 Strong Buy You can see Applied Optoelectronics and UTStarcom are expected to report earnings on May 4 and May 12 respectively Zacks Best Private Investment IdeasWhile we are happy to share many articles like this on the website our best recommendations and most in depth research are not available to the public Starting today for the next month you can follow all Zacks private buys and sells in real time Our experts cover all kinds of trades from value to momentum from stocks under 10 to ETF and option moves from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises You can even look inside exclusive portfolios that are normally closed to new investors |
GLW | Corning Acquires SpiderCloud Expands In Wireless Market | Corning Inc NYSE GLW recently announced that it has completed the acquisition of scalable small cell systems provider SpiderCloud Wireless The company will be integrated into Corning s Optical Solutions business However the terms of the deal were not disclosed According to a recent article by RCR Wireless News SpiderCloud was worth approximately 200 250 million or 2 0 2 5 times of 12 month forward revenues Small cells are effective in supplementing macro networks to provide superior coverage and capacity indoors as well as outdoors SpiderCloud s Enterprise Radio Access Network E RAN system uses high capacity enterprise small cells Radio Nodes and small cell controller Services Nodes to provide reliable coverage as well as massive capacity in indoor environments Notably telecom operators like Verizon NYSE VZ and Vodafone NASDAQ VOD recognize E RAN s expertise in delivering high indoor capacity SpiderCloud notes that a dual carrier LTE system with just 24 radio nodes can offer more than 2 5 Gbps of throughput enough to stream 500 HD video streams An E RAN system with 100 radio nodes can do four times as much We note that the addition of SpiderCloud will help Corning to offer indoor cellular solutions The expansion of the company s product portfolio will help it to rapidly penetrate the wireless network equipment market going forward Share Price Momentum to ContinueCorning has outperformed the S P 500 on a year to date basis While the index gained 12 1 the stock returned 32 2 over the same time frame We believe that growing demand for Corning s fiber optics products as evident from the is a major positive Moreover strong demand for Gorilla Glass 5 GG5 is a key catalyst These along with strategic acquisitions like SpiderCloud Gerresheimer s Pharmaceutical Glass Tubing Business Alliance Fiber Optic Products and STRAN Technologies will help the stock continue its momentum in the rest of 2017 Corning Incorporated Revenue TTM Corning now anticipates sales to grow from 3 billion in 2016 to 5 billion in 2020 through product innovation as well as acquisitions Notably management stated that the company is spending on acquisitions as it looks to expand its total addressable market TAM Zacks Rank Stock to ConsiderCorning currently has a Zacks Rank 3 Hold A better ranked stock in the technology sector is Applied Optoelectronics Inc NASDAQ AAOI which sports a Zacks Rank 1 Strong Buy You can see The long term earnings growth rate for Applied Optoelectronics is projected to be 4 1 3 Top Picks to Ride the Hottest Tech Trend Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy Last year it was generating 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for those who make the right trades early |
VZ | Verizon Earnings Revenue Beat in Q3 | Investing com Verizon NYSE VZ reported third quarter earnings that beat analysts expectations on Friday and revenue that topped forecasts
The firm reported earnings per share of 1 25 on revenue of 32 89B Analysts polled by Investing com anticipated EPS of 1 24 on revenue of 32 74B That compared to EPS of 1 22 on revenue of 32 61B in the same period a year earlier The company had reported EPS of 1 23 on revenue of 32 1B in the previous quarter
Verizon follows other major Services sector earnings this monthOn Thursday Amazon com reported third quarter EPS of 4 23 on revenue of 69 98B compared to forecasts of EPS of 4 59 on revenue of 68 82B
Visa A earnings beat analysts expectations on Thursday with fourth quarter EPS of 1 47 on revenue of 6 14B Investing com analysts expected EPS of 1 43 on revenue of 6 08B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
VZ | Verizon beats estimates on postpaid user growth | By Neha Malara
Reuters Verizon Communications Inc N VZ beat Wall Street estimates for third quarter profit and revenue on Friday as the largest U S wireless carrier by subscribers signed up more mobile phone customers who pay a monthly bill
The company s strategy of focusing on the core wireless business has often been contrasted with that of AT T N T its next largest competitor which has invested in media content to grow the company
Meanwhile rivals T Mobile US Inc O TMUS and Sprint Corp N S have been locked in a lengthy merger process
Verizon in the quarter launched four new pricing plans for its unlimited packages starting from 35 in a strong push to add more subscribers
The company is also preparing to roll out 5G in more than 17 cities by the end of the year as wireless carriers seek to expand aggressively to dominate a mobile technology that promises movie downloads in a few seconds
By 2021 the number of 5G connections is forecast to reach between 20 million and 100 million according to research firm Statista
In the third quarter Verizon added 615 000 postpaid customers above analysts estimates of 527 000 according to research firm FactSet
Analysts pay attention to postpaid customers or those with a recurring bill because they are more valuable to carriers and tend to remain with the company longer than prepaid customers
Revenue in Verizon s media unit slipped 2 to 1 8 billion from a year earlier
Verizon recently sold social media platform Tumblr as part of efforts to revamp the unit Verizon Media which also houses Yahoo NASDAQ AABA HuffPost and TechCrunch
Net income rose to 5 34 billion or 1 25 per share in the third quarter ended Sept 30 from 5 06 billion or 1 19 per share a year earlier
Excluding items Verizon earned 1 25 per share edging past analysts average estimate of 1 24 according to IBES data from Refinitiv
Total operating revenue rose nearly 1 to 32 89 billion beating the estimate of 32 75 billion
The company s shares were marginally higher in premarket trading |
WMB | Netherlands wins Eurovision contest Madonna flag display causes stir | By Dan Williams NYSE WMB and Rami Ayyub
TEL AVIV Reuters The Netherlands won the 64th Eurovision Song Contest in Israel on Sunday in a songfest that passed off without serious incident despite calls by pro Palestinian groups to boycott the event
Dutch singer songwriter Duncan Laurence beat 25 other contestants in the grand final in Tel Aviv to win the glass microphone trophy
The 25 year old favorite won 492 points with his piano ballad Arcade about a failing relationship His victory gives the Netherlands the right to host the 2020 finals Italy came second with 465 points and Russia third with 369
After receiving the prize from last year s winner Israeli singer Netta Barzilai Laurence said he hoped he had touched listeners Believe in your music believe in your artistry he said
This year s competition was more political than usual held against the backdrop of a campaign by the Boycott Divestment Sanctions BDS movement that urged artists fans and broadcasters to shun the event to protest against Israeli policies in the West Bank and Gaza
But no singers or broadcasters pulled out and only a small crowd of protesters turned up outside the venue
However pop superstar Madonna sprang a surprise during her guest performance of two songs her iconic 1989 hit Like A Prayer and a new number Future sung alongside the American rapper Quavo
At the close of the second number two backing dancers briefly appeared on stage wearing the Israeli and Palestinian flags on the back of their costumes
The European Broadcasting Union which co produced the contest alongside Israel s national broadcaster issued a statement immediately after her performance This element of the performance was not cleared with the EBU and the Host Broadcaster KAN The Eurovision Song Contest is a non political event and Madonna had been made aware of this it said
The 60 year old singer who is a follower of the mystical form of Judaism called Kabbalah had faced criticism from pro Palestinian activists for performing at the event
She defended her decision issuing a statement earlier in the week that she would always speak up to defend human rights and that she hoped to see a new path toward peace
Hatari Iceland s entrant drew boos from the audience when the band held up small Palestinian banners live on air during voting The EBU said the political display directly contradicts the contest rules
ROLLERBLADING POLICE
Security was tight through the final with thousands of extra police undercover officers and private security guards deployed Fans had to pass through metal detectors and multiple security checks as armed police looked on
Some police units used rollerblades for mobility while security officials inside the auditorium kept watch in case activists tried to disrupt the event
Israel said calls to boycott the competition were discriminatory and anti Semitic which the BDS movement denies
In the south of the city a beachside area was sealed off for a Eurovision Village spectators pavilion where fans from different countries danced and watched the event on big screens
Jacob Strange 26 an Australian said he had flown 28 hours including two layovers to attend His country is one of a handful of non European nations including Israel to take part
We love Eurovision back in Australia he said adding of the protesters I understand where they are coming from but in the end of the day Eurovision is about bringing people together and about peace
Israelis in Tel Aviv said they were proud to be hosting the event I m very excited It s great that it s come to Tel Aviv said Alan Liferow 58 an Israeli accountant from Ein Sarid
But a small crowd gathered outside the venue to protest carrying signs in Hebrew Arabic and English reading No Pride in Occupation and Feminists for Gaza
At one point they competed with another small demonstration against Israeli Prime Minister Benjamin but neither drew much attention from concertgoers aside from a few brief shouting matches
Umar al Ghubari a Palestinian who led a tour near the Eurovision Village said fans were celebrating near where a pre 1948 Palestinian neighborhood had been destroyed The Israelis don t want to tell this story They want to show everything as normal said Ghubari |
WMB | Pliskova ends Konta run to win Italian Open | By Alasdair Mackenzie ROME Reuters Karolina Pliskova ended Johanna Konta s hopes of landing a first claycourt title with a 6 3 6 4 victory in the Italian Open final on Sunday The Czech world number seven did not drop a single service game as she secured the third clay title of her career and her first in Rome in one hour 25 minutes British number one Konta claimed some big scalps on her way to the final beating Grand Slam winners Sloane Stephens and Venus Williams NYSE WMB as well as Madrid Open champion Kiki Bertens However she struggled to trouble the Czech on serve as Pliskova recorded her seventh win in eight meetings with Konta The result means Pliskova will be the number two seed at the French Open later this month as she will move to second place in the world rankings on Monday I was a little bit nervous today it s a final so you have to be Jo played great tennis so she made it quite tough for me the Czech said Asked about her prospects at Roland Garros she said I just hope I can take the tennis I was playing here to Paris and we ll see I think there will be a chance for me if I play this way but there s going to be some tough opponents who are playing good tennis on clay Konta was broken in her opening service game before saving a set point at 5 2 but Pliskova served out the first set after the Briton failed to take advantage of the only break point she was afforded in the match at 5 3 Pliskova missed a break point in Konta s opening service game of the second set but eventually broke the 28 year old at 3 3 before holding serve to secure victory Konta remained upbeat saying I m pleased with how I ve been progressing this year and how I ve been improving with every match
To make it to a final here this is my second biggest final after Miami this is a big moment for me |
WMB | Israeli host expecting Eurovision punishment for Iceland s Palestinian flag display | By Dan Williams NYSE WMB JERUSALEM Reuters The Israeli broadcaster of the Eurovision Song Contest said on Sunday that an unauthorized display of Palestinian flags by Iceland s band could draw punishment from the event s organizers During the point tally of Saturday s final members of the eclectic punk ensemble Hatari held up scarf sized Palestinian flags A vocalist Klemens Nikul sson Hannigan flashed a V for victory sign Many in the Tel Aviv audience responded with boos In earlier remarks to Eurovision fan site wiwibloggs Hannigan had criticized Israel s settlements and what he described as its apartheid in occupied Palestinian territory The flag display briefly caught on the live TV relay of the 41 country contest marked the only disruption of a show that had been a focus of anti Israel boycott calls and drew a swift rebuke from the European Broadcasting Union EBU The Icelanders will apparently be punished by the European Broadcasting Union which is really not tolerant of those who violate its rules Eldad Koblenz CEO of the EBU s Israeli counterpart Kan told Ynet TV An EBU spokesman declined direct comment saying the matter was under discussion EBU rules allow for disqualifying contestants who do not abide by requirements for a non political event Asked what other penalties might be available the spokesman said In the past there have been financial sanctions for rule breaches He did not elaborate on these cases or sums Hatari s song Hate Will Prevail during which the leather and latex clad performers thrashed around a grenade shaped globe as flames shot from the stage came 10th of the 26 finalists Their flag display did not impress the Palestinian Campaign for the Academic Cultural Boycott of Israel which had urged countries to shun the Tel Aviv Eurovision None did Palestinian civil society overwhelmingly rejects fig leaf gestures of solidarity from international artists crossing our peaceful picket line Hatari the campaigners said on Twitter Koblenz was more upbeat about a political display by Madonna whose much anticipated two song guest performance in the final featured two back up dancers with Israeli and Palestinian flags on their backs walking in an embrace We are very happy that she came certainly in a reality where very few artists are prepared to come to Israel he said while allowing that perhaps she s had more successful shows Madonna who has previously performed in Israel and is a devotee of Jewish mysticism said on Twitter on Sunday that she was grateful for the opportunity to spread the message of peace and unity with the world
Kan had no advance notice of Hatari s or Madonna s flag displays Koblenz said That s the price of a live broadcast |
WMB | MLB notebook Astros lose Springer to injury | Houston Astros All Star outfielder George Springer will miss Monday s game and is day to day with lower back stiffness manager AJ Hinch said after Sunday s 4 3 loss to the Boston Red Sox Hinch removed Springer from Sunday s game at Fenway Park in the fifth inning after Springer struck out swinging three times against Chris Sale and winced after a missed swing in his second at bat On Friday night Springer grabbed his side after a swing Josh Reddick moved from left field to take Springer s spot in right field and Tony Kemp replaced Springer in the lineup to play left field Springer entered Sunday s game leading the league in OPS on base percentage plus slugging percentage runs scored home runs and RBIs The Philadelphia Phillies reinstated utility man Scott Kingery from the 10 day injured list ahead of the team s game against the visiting Colorado Rockies Kingery had not played since April 19 because of a right hamstring strain and was batting 406 with two homers and six RBIs in 14 games before the injury Against the Rockies the 25 year old played center field batted seventh and went 1 for 3 with a run scored To make room on the roster the Phillies optioned outfielder Nick Williams NYSE WMB to Triple A Lehigh Valley The San Francisco Giants designated outfielder Aaron Altherr for assignment after just one at bat with the team The move was made to open a roster spot for left hander Drew Pomeranz who was activated from the 10 day injured list to start Sunday s game against the Arizona Diamondbacks Altherr was claimed off waivers from the Philadelphia Phillies on May 11 and struck out Friday as a pinch hitter In his first start since May 6 Pomeranz gave up two runs on two hits and five walks with two strikeouts in 4 2 3 innings The Chicago White Sox optioned outfielder Nicky Delmonico to Triple A Charlotte and are expected to activate rookie Eloy Jimenez from the injured list Monday Delmonico was batting 206 in 21 games this season with one home run and six RBIs That one home run was a game ending three run shot against the Boston Red Sox on May 2 He has just one RBI in 13 games since Jimenez has not played since April 26 as the rookie has been on the injured list with a right ankle sprain He was batting 241 with three home runs over the first 21 games of his career The Chicago Cubs will not file an official protest over the ninth inning of Saturday night s game against Washington when they contended that Nationals reliever Sean Doolittle was using an illegal toe tap on the mound during his delivery Cubs manager Joe Maddon twice came out in the ninth inning Saturday to discuss Doolittle s delivery with umpires His main issue seemed to be that his own reliever Carl Edwards Jr was not allowed to use a version of a toe tap during a game early in the season After informing umpires he was playing under protest before the Cubs lost 5 2 to the Nationals Maddon opted against filing the protest on Sunday saying that while he believed is correct he really didn t anticipate a whole lot to be done with the protest He had 24 hours to file the protest with the league The San Diego Padres sent rookie left hander Nick Margevicius back to Double A Amarillo after his recent struggles continued to mount The Padres also sent right handed reliever Gerardo Reyes to Triple A El Paso while right hander Cal Quantrill was recalled from El Paso to start Sunday s game and right hander Trey Wingenter was reinstated from the injured list
Margevicius 2 5 4 96 ERA gave up just one run in each of his first three major league starts but gave up a combined 14 earned runs in last three outings Quantrill had a 3 60 ERA in two earlier starts with the Padres while Wingenter sported a 2 93 ERA in 15 1 3 innings with the Padres earlier this season He was on the IL because of right shoulder inflammation Field Level Media |
WMB | I thought my career was over after pregnancy Azarenka | Reuters Former world number one Victoria Azarenka was afraid becoming pregnant in 2016 would end her tennis career but says she returned to the game stronger after the birth of her son The two times Grand Slam champion was ranked sixth in the world when she left the WTA tour in July 2016 and returned to the circuit in June the following year I was scared it wasn t easy Azarenka told the BBC I knew I was going to come back but my first thought was Oh my god I m never going to play tennis again But then it was all about knowing I was going to come back and when I was going to come back I felt it was a blessing but I still wanted to have my own dreams and my own career I m sure a lot of women won t be able to relate to me but I felt so much better after the pregnancy I felt so much stronger physically and my body became so much better I felt like my body finally matured into being a woman Azarenka and Serena Williams NYSE WMB who became a mother in 2017 are part of a group of players who campaigned for players going on maternity leave to have their rankings protected so they did not struggle on their return The WTA changed its rules ahead of the 2019 season granting new mothers the right to enter 12 tournaments over a three year period with their previous ranking to avoid meeting a seeded opponent in the first round We have the power to change the rules and we have done the 29 year old Belarusian added I think that s what I want my legacy to be that I m fighting for women to be more comfortable to break those stereotypes and move the needle a little forward
That evolution is going to continue to break boundaries and the illusion of women in sport |
WMB | Tennis Holder Halep shrugs off expectations ahead of French Open | Reuters French Open champion Simona Halep has said won t be burdened by expectations that she can repeat last year s triumph and would rather focus on enjoying the Grand Slam which starts on Sunday The 27 year old Romanian enters Roland Garros as favorite for the title given the contrasting form of some of the top names including Japan s world number one Naomi Osaka but her own claycourt preparation has not been spectacular either World number three Halep could have knocked Osaka off top spot by winning the Madrid Open earlier this month but lost in straight sets to Dutchwoman Kiki Bertens in the final A few days later she fell at her first hurdle in the Italian Open losing to Marketa Vondrousova Halep s second defeat by the 19 year old Czech this year after a three set loss at Indian Wells However the Romanian said she did not feel any extra pressure to retain her title at Roland Garros I have no expectations because it s the first time when I have to defend a trophy at a Grand Slam she told Romania s Digi Sport TV station I just want to be relaxed enjoy the tournament and try to win some matches Nothing more ELITE GROUP Halep has been backed by former French Open champions Mats Wilander and Justine Henin to join an elite group of players in retaining her crown with three times men s champion Wilander saying Halep versus Serena Williams NYSE WMB would be a dream final Williams 37 is battling to be fit for Roland Garros having pulled out of the Italian Open last Tuesday due to a persistent knee injury Only five women have successfully defended their titles at the French Open Margaret Court Chris Evert Monica Seles Steffi Graf and Henin Last year Halep finally made it over the line in Paris with a three set victory over American Sloane Stephens in the final for her maiden Grand Slam title The Romanian has special memories of Roland Garros which is where she won the junior title in 2008 and reached her first major final against Maria Sharapova in 2014 Halep received medical treatment in the closing stages of the Vondrousova defeat but has shrugged off concerns about her own fitness by declaring herself ready to compete in Paris The Romanian even saw some advantages from her early exit in the Italian capital
It s also a good thing if you look at the positive side I needed a few days of relaxation Halep said I rest and hope to have the batteries loaded for Roland Garros |
WMB | Policymakers have changed views on how low unemployment can go Fed s Williams | NEW YORK Reuters U S economic policymakers have changed their view of how low unemployment can get without sparking inflation a top Federal Reserve official said on Monday Speaking at an event designed to gather views on how the Fed should tweak its policies going forward New York Fed President John Williams NYSE WMB said policymakers are focused on how they can sustain the U S economic expansion maintain a strong labor market and keep inflation low In March the median Fed official estimated the long run U S unemployment rate at 4 3 That figure is lower both than their 4 7 estimate two years prior and the actual unemployment rate now which has edged down to 3 6
As part of a broad policy review Williams a permanent voting member on the Fed s rate setting committee has been advocating for the Fed to systematically respond to periods of tepid inflation by keeping U S interest rates lower for longer But lower rates could also spark higher rates of wage and other forms of price inflation in the future |
WMB | Game of Thrones scores record TV audience leaves fans sad mad | By Jill Serjeant LOS ANGELES Reuters Warning This story contains spoilers for the final episode of Game of Thrones More than 19 million U S viewers watched the series finale of television s Game of Thrones a record audience for HBO the cable channel said on Monday HBO a unit of AT T s Warner Media said Sunday s 19 3 million live television audience and viewers on its HBO GO and HBO NOW apps exceeded the previous high for the fantasy 18 4 million for the penultimate episode a week ago The finale was also the most watched single telecast ever on HBO surpassing the previous record set by crime drama The Sopranos in 2002 HBO said Game of Thrones is available in over 150 countries worldwide but HBO said viewing data is not easily retrieved in many of those markets making a global figure impossible to calculate Mixed reviews a stray water bottle and pleas for a spinoff for feisty teen assassin Arya Stark marked the end of Game of Thrones which ended with a final twist over who would rule Westeros The finale proved as divisive as Season 8 itself with the hard fought Iron Throne melted down and the saga ending in what some called an anti climax But British actor Isaac Hempstead Wright said on Monday he was thrilled at how the show had transformed his character Bran Stark from a 10 year old boy in a wheelchair to the man finally chosen as king Bran becoming king is a victory for the still and considered people of this world who too often get sidelined by the commotion of those who are louder and more reactionary Hempstead Wright 20 wrote in a guest column for The Hollywood Reporter USA Today s Kelly Lawler called the finale a disaster ending that fans didn t deserve adding that it was hacky it was cliched Britain s Radio Times was kinder with blogger Huw Fullerton writing there were some bits I liked one or two I loved an awful lot that leaves me scratching my head But I will say it ended better than I expected given the last two episodes Over 1 2 million fans worldwide had signed a Change org petition by Monday criticizing Season 8 and calling for a remake Television series creators David Benioff and D B Weiss were silent on Monday The executive producers had said they planned to go offline when the finale aired We ll be in an undisclosed location turning off our phones and opening various bottles Weiss told Entertainment Weekly earlier this year Many fans were more upset about the series coming to an end after eight seasons I thought it would be more of a dramatic ending healthcare worker Christine Lethune told Reuters at a viewing party in New York I m mad I m mad that this is the last episode I wish that there was more after this Fans spotted another modern prop that made its way on camera a plastic water bottle seen partly hidden behind the boot of character Samwell Tarly The sighting followed dismay and jokes over the sighting of a stray paper coffee cup glimpsed during episode 4 aired two weeks ago HBO last year ordered a prequel co written by George R R Martin the author of the A Song of Ice and Fire book saga on which the series is based It will be set thousands of years before the events of Game of Thrones On Monday many fans wanted a sequel based around Arya Stark played by Maisie Williams NYSE WMB who is last seen aboard a ship to explore lands unknown
Arya was the only good part of Season 8 Give us the spinoff tweeted Riley McAtee an associate editor at sports and pop culture website The Ringer com |
WMB | NFL notebook Patriots extend Edelman through 2021 | The Patriots finalized a two year extension worth 21 million to perhaps keep Super Bowl MVP Julian Edelman in New England for his entire career According to multiple reports the extension includes an 8 million signing bonus and 12 million guaranteed The 32 year old wide receiver s contract was set to expire after the 2019 season He signed a two year 11 million deal in June 2017 Since the Patriots drafted him in the seventh round in 2009 Edelman has played in 115 regular season games and tallied 499 receptions for 5 390 yards and 30 touchdowns In 18 postseason games he has won three Super Bowl rings and caught 115 passes for 1 412 yards and five scores The Tampa Bay Buccaneers are finalizing a one year contract with defensive tackle Ndamukong Suh multiple media outlets reported The deal comes a day after the team mutually parted ways with defensive tackle Gerald McCoy who coincidentally was chosen one pick after Suh in the 2010 NFL Draft The Bucs also claimed former New York Jets tight end Jordan Leggett off waivers after he was waived Monday As the Pittsburgh Steelers 2019 organized team activities got underway quarterback Ben Roethlisberger pinned the team s 2018 struggles on himself I lacked in leadership Roethlisberger told reporters Because that s my job as the leader of this team to get us to the playoffs I m gonna need to focus and refocus my energy and time on how can I be a better leader to get us back to the playoffs The comments came a day after Roethlisberger told Pittsburgh s CBS affiliate KDKA he probably went too far in making critical comments about wide receiver Antonio Brown last year Indianapolis Colts star Andrew Luck sat out the first day of organized team activities due to a minor calf strain The injury isn t considered serious and the Colts are likely just being cautious with the 29 year old franchise quarterback The 2021 NFL Draft will be held in Cleveland according to an Uproxx report The league is expected to officially announce the news and potentially the hosts of other future drafts on Wednesday as owners hold spring meetings in Florida this week Cleveland Kansas City and Denver were among the finalists for recent drafts that were awarded to Nashville 2019 and Las Vegas 2020 San Francisco 49ers top pick Nick Bosa tweaked his hamstring and sat out the rest of practice Head coach Kyle Shanahan told reporters the severity is unclear but Bosa remained on the sidelines through the end of practice The Buffalo Bills signed defensive end Jerry Hughes to two year extension putting the team s longest tenured player under contract through 2021 According to ESPN Hughes extension is worth up to 23 million with 19 5 million guaranteed Hughes who turns 31 in August was set to make 7 5 million in 2019 Bills tight end Tyler Kroft suffered a broken right foot Monday and will require surgery which reportedly brings with it a three to four month recovery Four other offseason acquisitions are also sidelined Wide receiver Cole Beasley and center Mitch Morse are recovering from core muscle surgeries while running backs Frank Gore foot ankle and T J Yeldon groin are also out Running back Senorise Perry is the first Bills player to wear No 32 since O J Simpson in 1977 Perry 27 told The Athletic he was surprised that the disgraced Hall of Famer s number was an option The Patriots placed recently signed offensive tackle Jared Veldheer on the reserve retired list Veldheer who turns 32 in June joined the Patriots on May 13 as a free agent signing a reported one year 3 5 million deal worth up to 6 5 million with incentives Tennessee Titans cornerback Adoree Jackson had offseason foot ankle surgery and is in a walking boot NFL Network reported It s unclear if he ll be ready for training camp Tight end Delanie Walker participated in individual drills and told reporters he s in the 85 percent range as he recovers from a September ankle injury that required surgery Seattle Seahawks defensive tackle Jarran Reed will be out until training camp as he recovers from sports hernia surgery head coach Pete Carroll said Reed was originally given a four to six week timeline for the surgery which happened in late April The New Orleans Saints signed former Carolina Panthers defensive end Wes Horton and waived linebacker Darrell Williams NYSE WMB Horton 29 has seven sacks and 10 quarterback hits in 32 games eight starts over the past two seasons The Jets signed wideout Deonte Thompson and waived wideout Xavier Ubosi Thompson 30 caught 17 passes for 167 yards in 13 games between the Bills and Cowboys last season After considering retirement linebacker Gerald Hodges intends to keep playing ESPN reported noting he is drawing interest from several teams
Hodges 28 had 55 tackles in 16 games for the Cardinals last season Field Level Media |
WMB | Energy Stocks Are The Dividend Investing Pick For 2015 | Dividend investors looking for solid total returns in 2015 should turn to beaten down energy stocks With bonds yielding practically nothing and most other traditional sectors for dividend investing looking pricey high yielding energy stocks are your best income bet in the new year
Never discount the importance of dividend investing to your total returns After two solid years of market returns in 2013 and 2014 it s easy to take dividends for granted But in years where the market is flattish or down the dividend may be the only return you see at all
After six years of nearly uninterrupted bull market conditions U S stocks are priced to deliver some pretty uninspiring returns going forward At the risk of sounded alarmist the Shiller P E i e the 10 year cyclically adjusted P E ratio or NYSE CAPE is currently at the levels we saw before the 1929 crash and the 2008 meltdown
Now I m not a doom and gloomer and I m not forecasting an imminent crash But realistically we re looking at pretty measly returns going forward Assuming a reversion to the long term average we re looking At these levels dividend investing may be more important now than at any time in the past 30 years
As we enter a new year it s time to evaluate dividend investing sector options 2014 was definitely the as I suggested it would be this time last year At the end of last year I noted that conservative equity REITs were on sale offering fantastic yields in what I expected to be a continued low rate environment The mid 2013 taper tantrum had thoroughly thrashed the REIT sector leaving some fantastic bargains
Well REITs are no longer the bargain they once were As a sector they are poised to finish 2014 up almost 30 Meanwhile many solid energy stocks are down 20 or more from their recent highs If you believe that energy stock dividends are safe and let me emphasize that I do then energy stocks are the dividend investing pick for 2015 Here are some of my favorites
Enterprise Products Partners
I first mentioned Enterprise Products Partners NYSE EPD in 3 Dividend Stocks to Buy After the Oil Price Collapse and I would reiterate that recommendation here
Even after its recent rebound Enterprise Products is down a good 11 from its summer highs which is for lack of better word absurd This is a midstream pipeline operator that gets 85 of its gross operating market from fee based contracts and has no significant exposure to energy prices
Enterprise Products sports a distribution coverage ratio of 1 6 times meaning its distribution is safe and has plenty of room for growth And grow it has Enterprise Products has raised its dividend for 40 consecutive quarters
Enterprise Products currently sports a yield of 3 9 which is high but not exceptional But if you had bought Enterprise Products five years ago and held it until today you d be enjoying a yield on cost of 5 3 Had you bought it 10 years ago you d be enjoying a yield on cost of 7 2 That s not too shabby
Enterprise Products isn t quite the bargain dividend stock it was three years ago But it s still a good bargain in a low yield environment
Williams Companies
Next up is fellow MLP Williams Companies NYSE WMB Williams isn t an MLP per se but rather an MLP general partner Essentially Williams Companies operates the assets of Williams Partners NYSE WPZ and newly acquired Access Midstream NYSE ACMP and takes a large cut of the distributions for its efforts
Williams currently sports a dividend yield of 5 0 which is impressive on its own But Williams has also been a dividend raising monster over its life If you had bought Williams five years ago and held it until today you d be enjoying a yield on cost of 22 7 Had you bought it 10 years ago you d be enjoying a yield on cost of 53 6 That s not a misprint Williams has compounded its dividend at a 28 7 annualized rate for the past 10 years
Williams is not purely a fee based pipeline operator and has a degree of commodity price risk If energy prices stay depressed for long the growth rate of Williams dividend might slow a little At current yields I m ok with that Williams dividend payout ratio is just 66 indicating very little risk of a pending dividend cut
BP
Finally we come to a stock that has been something of a pariah for years BP plc Investors never fully forgave BP for the 2010 Deepwater Horizon oil spill in the Gulf of Mexico Four years later and BP s share price is still over 33 lower than its pre spill high
2014 was really an annus horribilis for BP Following the Crimea invasion and prolonged standoff between the West and Russia BP s 20 ownership of Russian energy giant Rosneft has hung around its neck like an albatross And if that wasn t enough BP was taken down along with the rest of the Big Oil majors during the massive slide in the price of crude oil
Yet BP is now fantastically cheap trading for just 12 times expected 2015 earnings It also yields a good 6 1 Historical dividend comparisons aren t particularly useful here as BP has only recently reinstated its dividend after cutting it following the Deepwater Horizon disaster But a 6 1 yield even in the absence of rapid dividend growth is nothing to take lightly
Disclosure Long BP EPD WMB |
WMB | The Only Time I ll Tell You Personal Debt Is Profitable | The other day I saw an ad for a mattress store that offered financing so you can sleep in peace on your brand spanking new 7 000 mattress set Talk about irony Having personal debt is the American way It makes the impossible possible It s seen as benign or even good It s not Personal consumer debt is one of the most dangerous financial products ever created
Federal Reserve data show that Americans owe 11 74 trillion as of 2014 Some 882 6 billion of that is credit card debt 1 13 trillion is student loans and another 8 14 trillion is mortgages An estimated 119 3 million indebted households carry an average of 15 257 each or more than double the 7 117 carried and paid off monthly by non indebted households
The way I see things debt is nothing more than plastic prosperity that makes you feel like you have more spending power It s a myth that s been sold to the American public methodically and systematically for 30 years And it wrecks lives
Getting out of debt or avoiding it entirely is an absolute imperative when it comes to building Total Wealth But as an investor there is one instance where you should consider taking on debt There s one instance where debt can even be profitable
First Thing s First Get Personal Debt out of Your Life
Before I can show you the one way you can use personal debt to your advantage it s really important to step back for the bigger picture
Washington believes personal debt is absolutely essential to the economy noting repeatedly that both industrial output and employment would suffer if consumer credit diminished What else would you expect them to say
But Washington s got it wrong
Rising credit usage is a sign that more families have to borrow to make ends meet It s not a sign of returning consumer confidence but proof positive that everything s getting more expensive
Critics and debt proponents screech that overall debt levels are dropping and that this is a sign that the economy is getting stronger They re right on one count overall indebtedness has fallen from 19 000 per household at the height of the financial crisis to 15 611 as of January
Here s what they re missing
If you look closer indebtedness is actually decreasing because more people are defaulting instead of repaying what they owe Charge offs that s what the credit companies call uncollectable debt rose to 10 9 by 2010 up from 3 1 in 2006 That figure has since fallen back to approximately 3 25 but only because so many people have already been wiped out of the credit markets
At the same time banks tightened lending standards so they restricted credit This too contributes to a drop in overall debt figures There has been no structural change in consumer credit whatsoever The improving data the Fed talks about constantly does not reflect fiscal prudence
Simply put you cannot encourage prosperity and build sound financial security on borrowed money even though our government seems to think so Except in one instance
The One Way to Make Personal Debt Profitable
Data shows that 30 of American families own their homes and don t have to worry about monthly payments to banks Props to them Either they bought their homes flat out or they ve already worked off their mortgage Either of those things is a wonderful accomplishment
And if you re buying a home now
I get asked a lot about whether it makes sense to pay off a mortgage early at a time when many Americans have refinanced at historical lows or are buying homes at rates that are still artificially low I think it comes down to opportunity cost Buying a home is that one instance where you do want to use debt to your advantage but only if you have to and only if you understand the alternatives
For example according to Bankrate com the average interest rate in the U S for 30 year mortgages is 3 97 as of the week of March 11 That s less than one third of the 12 39 that the S P 500 returned in 2014 alone and 58 less than the 9 5 the market has returned on average every year since 1871
So at the risk of annoying every real estate lender and agent from Portland to San Diego there s a good case to be made at the moment that you re better off investing than buying a home The former is an asset the latter a liability that keeps you out of the rental market
Even so many people including me want to own their home Going into debt as part of the purchase is a necessary evil albeit not a hopeless one Here s how to make the process work in your favor
Three Rules for the One Time You Should Welcome Debt into Your Life
1 Borrow as little money as possible
I know this sounds obvious but it s not People get caught up in the home buying process They forget that professional realtors are paid on commission based on the purchase price not how much money you re going to save Mortgage bankers are the same way generally speaking So it s in their interest to see you borrow as much money as possible to maximize their fees
My wife and I recently bought a home and you should have seen the look on my banker s face when I declined to take more than half of what I was approved to borrow
Buy a smaller home or move to a less expensive area if you have to And even if you don t think you ll qualify check into home buying assistance programs especially if you re a first time buyer a veteran or active duty military
2 Don t touch an Adjustable Rate Mortgage ARM unless you are fully prepared to pay it off in no more than 5 7 years
These little gems are essentially residential versions of the low teaser rates that credit card companies offer as an enticement to sign up Put bluntly they re little more than bait and switch
But watch out It s commonly understood that ARMs adjust based on the prime rate or U S Treasuries but they can also be reset at a rate that s not only not always disclosed in advance but which almost always increases
In some cases the low monthly payment you think is great when you sign on the dotted line can rise by 20 to 30 over just a few years on as little as a 3 interest rate bump According to the Huffington Post and a 2007 AFL CIO study the average monthly increase accounted for 10 of after tax income
I m not sure what that would be today but with the Fed finally ready to raise rates I wouldn t be keen to find out either
3 Pay off your mortgage as fast as you can
Many homeowners fail to consider the true cost of ownership I ve given more than a few presentations where the audience gasped as I demonstrated why borrowing 250 000 at 4 3 will actually cost 445 384 over the life of the loan
There are a few ways to do this For instance you can make an extra payment every quarter and pay off a 30 year loan approximately a decade early Or you can make bi weekly payments that will shave anywhere from 4 6 years off your mortgage
My favorite tactic with interest rates as low as they are today is to invest extra money in a choice like the PIMCO Strategic Income Fund NYSE RCS which yields a stunning 8 6 according to Yahoo NASDAQ YHOO finance as of press time Over time you can use the incremental yield of 4 63 8 6 yield minus the average 30 year rate of 3 97 to accelerate your repayment
Many people are concerned that choices like this will tank if the Fed raises rates and rightfully so But I think they re making a mountain out of a molehill The Fund s managers will adjust holdings accordingly so odds are that there will always be a differential spread you can use to your advantage
You could also consider investing in a choice like the Williams Companies NYSE WMB WMB which currently yields 5 according to Yahoo finance As the energy sector rebounds over time and it will you ll have both the appreciation and cold hard cash needed to accelerate your mortgage and boost your wealth at the same time
Obviously the incremental yield is not as high and there may be tax considerations unique to MLPs but that does not change my point you can use the market to fund your pre payment schedule and help you get out of debt faster
Especially if you ve decided to buy a home and borrow money to do it |
WMB | Wednesday Pre Market Insights GEVO WPZ HDP PTIE | Gevo Inc NASDAQ GEVO shares are up more than 21 in pre market trading to 5 68 after the renewable chemicals and advanced biofuels company reported 1Q15 results Gevo posted quarterly revenue of 5 9 million a significant increase from 0 9 million in the same quarter of last year The report also highlighted a recent renewable jet fuel agreement with Alaska Air Group Inc NYSE ALK
Williams Partners LP NYSE WPZ is up nearly 15 to 54 40 per share following an announcement that all public equity of the natural gas company will be bought by Williams Companies Inc NYSE WMB Before the buyout Williams owned 60 of WPZ Furthermore WPZ will raise its 3Q dividend to 0 64 and tells investors to expect a 10 to 15 annual dividend growth through 2020
Hortonworks Inc NASDAQ HDP shares increased 12 78 to 4 50 per share following 1Q15 earnings The California based computer software company reported strong revenue of 22 8 million which is triple the figure from the same quarter of last year Much of the quarterly revenue came from Hadoop the company s data capturing technology
Pain Therapeutics NASDAQ PTIE jumped more than 8 5 to 2 85 in pre market trading after new data from a recent study revealed that Remoxy the biotechnology company s lead pipeline product could be a less addictive painkiller due to its high viscosity Remoxy is currently in Phase III testing |
GLW | Verizon VZ Signs Optical Fiber Purchase Deal With Corning | Yesterday U S telecom behemoth Verizon Communications Inc NYSE VZ entered into a three year minimum purchase agreement with Corning Inc NYSE GLW to buy fiber optic cables and associated hardware for its nationwide wireless broadband network Per the deal Verizon will acquire up to 20 million kilometers 12 4 million miles of optical fiber each year from 2018 through 2020 from Corning with a minimum purchase commitment of 1 05 billion Verizon has decided to install dark fiber based network throughout its footprint in order to support the existing 4G LTE network and more importantly to transition into the upcoming 5G wireless network The company acquired dark fiber for the first time through its acquisition of MCI in 2006 Dark fiber provides abundant bandwidth which is of utmost necessity for the smooth functioning of super fast wireless networks such as 4G and 5G Dark fiber based backhaul provides scalability and efficiency to bandwidth management This will eventually lead the company to significantly reduce its backhaul costs In Feb 2017 Verizon acquired privately held XO Communications Inc s dark fiber optic network This will significantly enhance the capacity of the services Verizon offers to its business and wholesale customers giving it a foothold in the data center interconnection market Additionally it will bolster Verizon s cell network density thereby boosting its mobile backhaul network The densification of cell network will help the company install and build its upcoming 5G network Adoption of small cells has increased due to the inconvenience of installing large towers in inaccessible areas Verizon stated that small cells will be used to augment its existing 4G LTE and upcoming 5G network and will primarily concentrate on high traffic locations like a business district or a shopping mall The company expects these to increase its voice capacity and data speeds and to complement its current 4G LTE infrastructure The networks will require fiber optic connections to local hubs which link to long haul Internet infrastructure The densification of cell network will significantly help the company to install and build its upcoming 5G network Verizon s competitors such as AT T Inc NYSE T Sprint Corp NYSE S and CenturyLink Inc NYSE T are also strengthening their dark fiber network for small cell wireless backhaul Price performance of VerizonYear to date the stock price of Verizon has witnessed a loss of 7 77 underperforming the Zacks categorized industry s decline of 4 59 Nevertheless Verizon has a very powerful diversified business model In the wireless front it will start initial deployment of the upcoming 5G network in 2018 while on the wireline front the company is aggressively expanding fiber based footprint In the digital media front Verizon has become a major contender for the lucrative online advertisement business We believe these are the primary reasons behind the stock currently carrying a Zacks Rank 3 Hold You can see Will You Make a Fortune on the Shift to Electric Cars Here s another stock idea to consider Much like petroleum 150 years ago lithium power may soon shake the world creating millionaires and reshaping geo politics Soon electric vehicles EVs may be cheaper than gas guzzlers Some are already reaching 265 miles on a single charge With battery prices plummeting and charging stations set to multiply one company stands out as the 1 stock to buy according to Zacks research It s not the one you think |
VZ | Verizon Awarded Patent for Blockchain Based Virtual SIM Cards | Leading communications and technology company Verizon NYSE VZ has been awarded a patent for using virtual subscriber identity modules vSIMs for customers devices
A filing with the United States Patent and Trademark Office on Sept 10 details a blockchain encryption technology wherein a traditional physical SIM card can be replaced with a software SIM version According to the filing this ensures more security and the existence of only one copy of the vSIM on one device at a time The document further explains |
VZ | NewsBreak T Mobile Sprint Merger Wins Majority Support at FCC Report | Investing com T Mobile s bid to acquire rival Sprint has won a third yes vote at the Federal Communications Commission moving the proposal a step closer to closing according to Bloomberg News
T Mobile NASDAQ TMUS was up 1 05 in early afternoon trading Sprint NYSE S jumped 2 6
The third vote will come from Commissioner Brendan Carr and could see the FCC approve the deal in coming days The three votes came from Republican members of the commission Democrats haven t voted but have sought a delay FCC rules require action by Oct 9 or Oct 16 if the commissioner wants an extension
Sprint and T Mobile have agreed not to close the deal until after a December trial in a suit brought by multiple states charging the merger will reduce competition and raise consumer prices Supporters say the merger will bring advanced 5G networks and create a strong rival to AT T NYSE T and Verizon Communications NYSE VZ |
WMB | Rask Bruins edge Canes move to verge of sweep | RALEIGH N C The Boston Bruins didn t have the offensive answers in Game 3 as they did in previous games of the Eastern Conference finals They still had Tuukka Rask in nets That proved to be the difference on Tuesday night as Rask stopped 35 shots in a 2 1 victory against the Carolina Hurricanes that gave the Bruins a commanding 3 0 lead in the best of seven series He s the backbone of the team Bruins center Patrice Bergeron said of Rask We can count on him Even when things aren t great he calms everybody down Chris Wagner and Brad Marchand scored about five minutes apart in the second period for the Bruins Calvin de Haan scored for Carolina The Hurricanes who entered the night with a 5 0 home record in the postseason must win Game 4 at home on Thursday night in order to extend the series Carolina did about everything except break through against Rask at times It s going to take a lot more Hurricanes center Sebastian Aho said Boston posted 5 2 and 6 2 victories to begin the series This game had a different tone There was so much chatter about the offensive sources after the first two games that there wasn t a lot of talk about Rask Now he has stopped 85 of 90 shots in the series That guy was pretty special down at the other end Hurricanes coach Rod Brind Amour said The Bruins had the right mindset to withstand Carolina s energy We re very fortunate to have those guys in the room Boston coach Bruce Cassidy said There s a sense of calm there yet urgency if that makes sense Carolina turned to goalie Curtis McElhinney for his first action of the series He had filled in for an injured Petr Mrazek for the final two plus games of the second round sweep of the New York Islanders McElhinny who made 29 saves was out of the net for the final two minutes but the Hurricanes couldn t deliver a tying goal Hurricanes captain Justin Williams NYSE WMB said the team s spirited performance was encouraging We re not going away quietly he said While the Hurricanes lost the first two games in the first round to the Washington Capitals this time the hole is deeper We ve been kind of the underdog so many times this year Carolina defenseman Brett Pesce said That doesn t change and we know what we re capable of and we have a lot more to give With 15 44 remaining the third period Boston appeared to have increased the lead to 3 1 when the puck bounced off bodies and into the net However Boston s Jake DeBrusk was called for goalie interference for making contact with McElhinney wiping out the goal Wagner opened the scoring with a goal 1 21 into the second period knocking in the puck from close to the crease Then Marchand produced his sixth goal of the postseason this one coming on a power play at 6 28 The tally came with a fortunate redirection for the Bruins with the puck hitting off the glove of de Haan and bouncing through McElhinney s legs It was Boston s third power play chance of the game The Bruins wound up 1 for 5 with the man advantage while the Hurricanes were 0 for 5 De Haan got one back with his first career playoff goal at 13 48 of the middle period The Hurricanes came out with a flurry peppering Rask with shots He stopped 19 shots in the first 18 minutes of the scoreless first period The period ended with Carolina holding a 20 6 edge in shots That was the most shots in a period for the Hurricanes in a playoff game this year The Bruins reversed that in the second period by registering an 18 6 advantage in shots
Carolina forward Saku Maenalanen was back in the lineup after missing four games due to a hand injury He replaced Jordan Martinook who is considered one of the team leaders but has labored with injuries during the postseason Field Level Media |
WMB | Israel s Eurovision webcast hacked with animated blast images | By Dan Williams NYSE WMB TEL AVIV Reuters Israel s webcast of the Eurovision Song Contest semi final was hacked with animated images of explosions in host city Tel Aviv which the national broadcaster blamed on Hamas militants The hacking of Kan s website did not affect the regular television relay of the show on Tuesday night in Israel or abroad Israel s hosting of the 2019 version of the European music competition has drawn pro Palestinian boycott calls to protest against Israeli policies Hamas a Palestinian Islamist group that controls the Gaza Strip had no immediate comment Earlier this month it engaged in three days of fighting with Israel that included hundreds of rocket attacks from Gaza and Israeli air strikes in the enclave After the 41 country competition kicked off on Tuesday with a first semi final Kan s webcast cut to animated satellite footage showing explosions in Tel Aviv set to a menacing soundtrack Kan played down the hack noting that the evening ended without further incident as Greece Belarus Serbia Cyprus Estonia Czech Republic Australia Iceland San Marino and Slovenia made it through to Saturday s finals We know that at a certain stage there was an attempt apparently by Hamas to commandeer our digital broadcast Kan CEO Eldad Koblenz told Israel s Army Radio But I am happy to say that within a few minutes we managed to assume control over this phenomenon Palestinians and their foreign supporters have called so far fruitlessly on countries to shun the Tel Aviv songfest as part of wider efforts to isolate Israel internationally Many boycott calls have targeted Madonna who arrived in Israel on Tuesday ahead of the American pop star s guest performance at the Eurovision final The second semi final is on Thursday Rebuffing the pressure Madonna said she would never stop playing music to suit someone s political agenda The European Broadcasting Union which oversees the contest did not have a number to hand for worldwide viewers of Tuesday s show But an EBU spokesman said that last year a total of 186 million people watched both semi finals and the finals Kan said on Wednesday that an Israeli truck driver injured a day earlier while unloading technical equipment in the parking lot of the Eurovision venue had died
Our thoughts and condolences go to his family the broadcaster said in a statement adding that it was working with authorities to ensure safety at the competition |
WMB | NFL notebook Cardinals CB Peterson banned 6 games PEDs | Eight time Pro Bowl cornerback Patrick Peterson of the Arizona Cardinals has been suspended for the first six games of 2019 for violating the NFL s performance enhancing drug policy Details of the violation have not been released but ESPN s Adam Schefter reported that Peterson has dropped his appeal NFL Network s Ian Rapoport reported the length of the suspension compared to the typical four game punishment for a PED violation is because the violation involved a masking agent Peterson 28 has never missed a start since the Cardinals drafted him in the first round fifth overall in 2011 making the Pro Bowl all eight seasons and earning first team All Pro honors three times The Pro Bowl streak will now end with Peterson ineligible due to the violation Patrick recognizes how disappointing this is for everyone in the organization as well as our fans the Cardinals said in a statement Thursday As we all do he understands that regardless of intent he is ultimately responsible for everything he puts in his body Our coaching staff and our players are now aware that we will have to play the first six games without Patrick and they understand they have to rise to the challenge that it presents Peterson asked for a trade last October but rescinded the request and later confirmed his commitment to the Cardinals However reports earlier this offseason said Peterson s relationship with the team has become strained and Rapoport reported Thursday that the suspension has further complicated things Outside linebacker Jamie Collins rejoined the New England Patriots after two plus seasons with the Cleveland Browns Terms of the deal were not announced Collins 29 spent three plus seasons with the Patriots before being dealt to the Browns for a conditional third round pick midway through the 2016 season Cleveland signed Collins to a four year 50 million extension in January 2017 but he was released this March after 30 games with the club The Patriots drafted Collins in the second round in 2013 and he blossomed with a Pro Bowl campaign in 2015 In 50 games 41 starts with the Patriots Collins totaled 326 tackles 10 5 sacks 10 forced fumbles five interceptions and 16 passes defensed In 2018 Collins played in all 16 games for the first time in his career totaling 104 tackles four sacks an interception and four passes defensed for the Browns The Baltimore Ravens reportedly reached a one year deal to bring back free agent linebacker Pernell McPhee After three seasons with the Chicago Bears 2015 17 and one with the Washington Redskins 2018 McPhee returns to the organization he called home from 2011 14 McPhee 30 has 31 career sacks 94 quarterback hits 197 tackles and six forced fumbles in 109 games Scott Pioli resigned after five years as assistant general manager of the Atlanta Falcons after months of discussions about his future with the club Pioli who has 26 years in NFL personnel evaluation under his belt and Dimitroff have been friends for decades after meeting in Cleveland Dimitroff s father was a scout for Bill Belichick s Browns staff which included Pioli Minnesota Vikings tight end Kyle Rudolph won t take a pay cut to stay in Minnesota telling the Star Tribune I am too young for that Rudolph the subject of trade rumors and reported broken down negotiations over a contract extension said he is hoping to find a way to stay with the only team he played for in his eight seasons The 29 year old has one year left on his contact and is due 7 5 million in 2019 The Vikings have about 1 13 million left in cap space according to Over The Cap First round draft pick Jonah Williams NYSE WMB and second round selection Drew Sample signed their rookie contracts both four year deals with the Cincinnati Bengals Williams the No 11 overall selection played 44 games at offensive tackle for Alabama and was a unanimous first team All American in 2018 Sample a tight end from the University of Washington was the No 52 overall selection Sixth round pick Corey Ballentine signed his rookie contract with the New York Giants as he continues his rehabilitation from injuries suffered on the night he was drafted He was shot in the backside on April 28 in an incident in Topeka Kan that claimed the life of Washburn University teammate Dwane Simmons
Ballentine missed New York s rookie minicamp from May 3 5 The Giants encouraged him to remain in Kansas to mourn the loss of his best friend whose funeral took place on May 4 Field Level Media |
WMB | Nadal races into Rome semis Konta also makes last four | By Alasdair Mackenzie ROME Reuters Italian Open champion Rafael Nadal set up a semi final with Stefanos Tsitsipas thanks to a 6 4 6 0 win over fellow Spaniard Fernando Verdasco on Friday while Briton Johanna Konta got through to the last four for the first time A week after losing to the Greek upstart at the same stage of the Madrid Open the 32 year old Nadal will be eager to prove that defeat was just a blip as the Spaniard fine tunes his game ahead of his bid for a 12th Roland Garros title The 20 year old Greek progressed after Roger Federer pulled out with a right leg injury before their quarter final clash Nadal went 2 0 down against Verdasco before surviving three break points at 4 4 in the first set but the second seed pulled away by winning eight consecutive games to continue his hunt for a ninth title in Rome I was not playing badly at the beginning at all but he was playing unbelievable tennis Nadal said in a news conference No mistakes a lot of winners taking the ball early It was a very difficult first set It was one of the first sets that I am happier with I think I had a good feeling during the whole match Then after winning that first set in the second of course he slows down a little bit but I was able to play a little bit more aggressive with the forehand I did a lot of things well this afternoon I am very happy to be in the semi finals again It s a good victory Argentina s Diego Schwartzman reached the last four with a 6 4 6 2 win over Japanese sixth seed Kei Nishikori and will face world number one Novak Djokovic or Juan Martin del Potro In the women s draw Konta booked hrr first semi final spot in Rome with a 6 3 3 6 6 1 win over Czech Marketa Vondrousova The Briton who defeated Americans Sloane Stephens and Venus Williams NYSE WMB in her two matches on Thursday will face sixth seed Kiki Bertens on Saturday for a place in the final Madrid Open champion Bertens reached the last four after Japan s world number one Naomi Osaka pulled out with a thumb injury ahead of their quarter final Konta celebrating her 28th birthday hit 42 winners against the 19 year old Vondrousova and dominated the final set to clinch victory in one hour 53 minutes She heads towards this month s French Open in fine form on clay having finished runner up in the Morocco Open at the start of May Fourth seed Karolina Pliskova recorded her 500th career win with a 6 7 5 7 6 2 6 2 victory over Victoria Azarenka
She will face either Kristina Mladenovic of France or Greek Maria Sakkari in the other semi final |
WMB | NBA MVP finalists Giannis George Harden | Milwaukee Bucks forward Giannis Antetokounmpo and Oklahoma City Thunder forward Paul George are among the finalists for the both NBA s Most Valuable Player and Defensive Player of the Year honors The league announced the three man lists of finalists for its 2018 19 regular season awards on Friday Antetokounmpo and George are joined by Houston Rockets guard James Harden in the running for league MVP Harden was the MVP for the 2017 18 season and he finished runner up to Thunder guard Russell Westbrook in 2016 17 Neither Antetokounmpo nor George has won an MVP award The third finalist for Defensive Player of the Year is Utah Jazz center Rudy Gobert who won the honor last year The Rookie of the Year finalists are Dallas Mavericks guard Luka Doncic Phoenix Suns center Deandre Ayton and Atlanta Hawks guard Trae Young The candidates for Coach of the Year are the Milwaukee Bucks Mike Budenholzer the Denver Nuggets Michael Malone and the Los Angeles Clippers Doc Rivers Budenholzer captured the award in 2014 15 when he was with the Atlanta Hawks Two Clippers players forward Montrezl Harrell and guard Lou Williams NYSE WMB are up for Sixth Man Award along with Indiana Pacers forward Domantas Sabonis Williams earned the award in 2014 15 and 2017 18 The finalists for Most Improved Player are Sacramento Kings guard De Aaron Fox Brooklyn Nets guard D Angelo Russell and Toronto Raptors forward Pascal Siakam George was selected Most Improved in 2012 13 and Antetokounmpo was honored in 2016 17 Antetokounmpo 24 averaged 27 7 points 12 5 rebounds and 5 9 assists all career highs in 72 games this season George 29 played 77 games and posted career high averages of 28 points 8 2 rebounds and a league leading 2 2 steals His average of 4 1 assists matched his career best Harden 29 led the league with a career best 36 1 point scoring average that topped the NBA He added 6 6 rebounds 7 5 assists and two steals while playing 78 games
The voting for all awards was done by a panel of sportswriters and broadcasters The hardware will be handed out in a ceremony at Barker Hangar in Los Angeles on June 24 Field Level Media |
WMB | MLB notebook Red Sox LHP Price close to return | Boston Red Sox pitcher David Price is expected to come off the injured list and start Monday at Toronto manager Alex Cora said Friday The veteran left hander last pitched May 2 before going on the IL four days later because of left elbow tendinitis The five time All Star and 2012 Cy Young Award winner is 1 2 with a 3 75 ERA in six starts this season He has struck out 42 and walked 10 in 36 innings Red Sox right hander Nathan Eovaldi who underwent surgery on April 23 to remove loose bodies in his pitching elbow is scheduled to throw his first bullpen session since the surgery on Tuesday Eovaldi has started four games this season compiling a 6 00 ERA and no decisions The New York Mets placed outfielder Michael Conforto on the seven day concussion injured list while outfielder Keon Broxton was designated for assignment Veteran outfielder Carlos Gomez s contract was selected from Triple A Syracuse and right hander Paul Sewald was recalled from Syracuse Conforto was injured in Thursday afternoon s game at Washington when he crashed into the shoulder of second baseman Robinson Cano while chasing a popup and then hit the ground with a thud He was immediately removed from the game and returned to New York for further examination The St Louis Cardinals activated Carlos Martinez from the injured list after the right hander missed the season s first 44 games due to a strained right shoulder Martinez who allowed one run on four hits in two innings for Double A Springfield in a minor league rehab outing Wednesday will initially be utilized out of the bullpen In five rehab games overall he produced a 1 35 ERA Last season he made 33 appearances for the Cardinals 18 as a starter and went 8 6 with a 3 11 ERA Rookie right handed reliever Ryan Helsley was recalled from Triple A Memphis while veteran right hander Luke Gregerson was designated for assignment The Cardinals also sent down right hander Dominic Leone The Colorado Rockies promoted top prospect Brendan Rodgers to the major leagues for the first time and the red hot infielder started at second base Friday when the team opened a three game series at Philadelphia In addition the Rockies also announced they activated right hander Jake McGee knee from the 10 day injured list To make room on the active roster right hander DJ Johnson and infielder Pat Valaika were optioned to Triple A Albuquerque The Los Angeles Dodgers placed right hander Kenta Maeda on the 10 day injured list because of a left thigh contusion Maeda 5 2 3 51 ERA likely will miss just one turn in the rotation Maeda fouled a ball off his thigh in Wednesday s game against the visiting San Diego Padres when he allowed three hits over 6 2 3 scoreless innings striking out 12 and walking none He also drove in the game s only runs in a 2 0 victory The Dodgers recalled outfielder Kyle Garlick and infielder Matt Beaty from Triple A Oklahoma City The Pittsburgh Pirates placed right hander Trevor Williams NYSE WMB on the 10 day injured list because of a right side strain Williams 2 1 3 33 was injured Thursday in the Pirates 4 3 loss to the San Diego Padres leaving due to discomfort in his side after giving up one run on two hits with five strikeouts in 3 2 3 innings There is no timetable for his return although he will miss at least one start In a subsequent move the Pirates recalled right handed pitcher Clay Holmes from Triple A Indianapolis Pittsburgh also purchased the contract of right hander Geoff Hartlieb while optioning right hander Richard Rodriguez to Indianapolis Boston Red Sox catcher Sandy Leon was placed on paternity leave creating a ripple effect of moves Catcher Oscar Hernandez was called up from Triple A Pawtucket and to get him on the 40 man roster right handed pitcher Chandler Shepherd was designated for assignment after six seasons in the organization without reaching the major leagues Leon 30 is batting 200 in 12 games with a home run and five RBIs Hernandez 25 who has 22 games of major league experience with the Arizona Diamondbacks in 2015 and 2016 has played in just 16 games between Double A and Triple A this season hitting one home run The Minnesota Twins placed designated hitter Nelson Cruz on the 10 day injured list due to a left wrist strain and recalled infielder Luis Arraez for his first stint in the major leagues Cruz whose IL move is retroactive to May 14 has a 270 average with seven home runs nine doubles and 22 RBIs in 35 games with the Twins The 38 year old veteran was signed to a one year 14 3 million contract for the 2019 season
Arraez was just promoted to Triple A Rochester after batting 342 with a 415 on base percentage at Double A Pensacola Field Level Media |
WMB | The Power Of The Master Limited Partnership General Partner | Yesterday was Williams Companies NYSE WMB Analyst Day The company gave a strong presentation across each of their divisions It highlighted the many opportunities to build new infrastructure in response to the shale developments especially in the Marcellus WMB s dividend yield is 3 3 but such is the earning power of the assets they control that management extended their dividend growth forecast of 20 out to 2016 from 2015 with further strong performance expected beyond that Much of this is driven by assets held at WMB s Master Limited Partnership MLP Williams Partners WPZ Since WMB owns the General Partner are therefore receives 50 of each additional dollar of distributable cashflow
WMB controls Transco a pipeline network that runs from the NE U S down to Texas One of the more memorable pieces of information came when Rory Miller SVP of the Atlantic Gulf Operating Area noted that he d once asked his team to estimate the cost of rebuilding the Transco system and the figure they came up with was 100 billion for comparison WPZ s enterprise value is 33 billion This pipeline was first laid 60 years ago and decades of population growth and development all along the route make the cost of building something similar today prohibitive
Interestingly today Goldman upgraded Kinder Morgan NYSE KMI from Buy to Conviction Buy Kevin Kaiser of Hedgeye a small research firm in Connecticut has been a long time critic of MLPs and the Kinder complex in particular KMI owns the General Partnership GP for Kinder Morgan Partners NYSE KMP and El Paso NYSE EPB and while it doesn t sport the type of growth prospects of WMB we think it s a similarly attractive security leveraged to the continued development of energy infrastructure in the U S Kaiser has long argued that firms such as KMI skimp on maintenance something not supported by metrics such as operating performance or accident statistics But the Transco example above suggests that in at least some cases MLPs own assets that are substantially undervalued at least on a replacement basis
KMI has been a weak performer over the past year or so providing at least some vindication for Kaiser although their business performance has been fine and his negative call on MLPs as a whole has been dead wrong For our part we think both companies are very well positioned and are long both WMB and KMI |
WMB | How To Buy America s Energy Boom | The new American energy boom is one of the most exciting macro developments of our lifetimes Non conventional drilling and extraction methods such as hydraulic fracturing or fracking have unlocked a century s worth of oil and natural gas that was previously unrecoverable setting off an investment boom unlike anything we ve seen in the United States for over 100 years
We re talking about the reversal of a 30 year trend that will upend global trade flows and rewrite the geopolitical map And shrewd investors can take advantage now before the rest of the public catches wind of this megatrend
Based on the most recent government estimates the U S now has nearly two and a half quadrillion cubic feet of natural gas that is recoverable That number is almost so big as to sound nonsensical but as new deposits are discovered I expect this number to tick even higher in the coming years
You need look no further than Ukraine to see how important it is that the United States pursue not only energy independence but also energy export capability Russia was able to seize Crimea and launch a proxy war in eastern Ukraine without any significant response from the West This isn t the 1980s and it s not that Europe and America fear Russian nuclear missiles They fear that Russia will turn off the gas tap and create the biggest energy crisis since the 1970s
As we saw in that decade of stagflation high imported energy prices can bring the U S and European economies to their knees
Another strategic concern is U S trade policy and the imbalances created by America s persistently high current account deficits The U S consistently imports more than it exports even during recessions which means that we flood the world capital markets with dollars Those dollars for lack of anywhere else to go flow back in the U S Treasury market
All else equal chronic trade deficits should cause the dollar to lose value over time and should lead to domestic inflation But worse and returning to the theme of geopolitical risk they have the effect of making the U S a debtor nation to regimes that aren t always the friendliest Are you comfortable with China being America s loan shark I know I m not
Abundant cheap energy means at least a partial solution to the imbalances that have plagued the United States for the past two decades Cheaper energy lower trade deficits and less need to get entangled in the political affairs of oil exporting nations are all major positives And at a time when ordinary consumers face tight budgets reducing a nondiscretionary expense like energy means more money available for discretionary spending
Big Opportunity in American Energy Stocks
But profiting from this theme can be tricky Energy prices are volatile and even if you have the long term direction right you can get killed by short term price fluctuations Speculating in the oil and gas market is a one way street to an early heart attack or at the very least an ulcer
My favorite low risk way to play this long term macro theme is by buying the pipeline infrastructure that transports the oil and gas The most popular way to do this is via master limited partnerships MLPs which are tax efficient vehicles that tend to throw off very high dividends They ve been an excellent asset class over the past decade recent volatility notwithstanding
But rather than recommend MLPs I prefer what I like to call MLPs on steroids the general partners that control the MLPs and take a disproportionate amount of the profits
General partners are compensated for their efforts via what is known as incentive distribution rights IDRs Under a typical IDR arrangement the GP is incentivized to grow the cash distribution to limited partners by taking an ever greater share of the increase the higher the GP boosts the cash distribution the more of it they get to keep for themselves though it usually caps out at around 50
If you are a long term investor looking for growth and income the GPs will generally be the way to go as their faster dividend growth rates make them more attractive as growth investments Also unlike MLPs GPs can be safely held in an IRA or Roth IRA account without generating complicated tax headaches
There are several good GPs to choose from One I particularly like is Williams Companies NYSE WMB Williams is undergoing a restructuring that will see it emerge as a pure play general partner with leveraged exposure to one of the biggest and highest quality underlying MLPs Williams Partners Though Williams has already enjoyed a nice rally in 2014 I expect it rise by another 50 100 over the next 12 18 months
This post first appeared on
Charles Lewis Sizemore CFA is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management |
GLW | Corning GLW Beats On Q3 Earnings On Strong Revenues | Corning Inc NYSE GLW reported third quarter 2016 adjusted earnings of 42 cents which beat the Zacks Consensus Estimate by 4 cents 10 5 Earnings improved 5 on a year over year basis and 10 5 sequentially in the reported quarter Reported earnings were 26 cents compared with 15 cents reported in the year ago quarter and 1 87 reported in the previous quarter The year over year growth was driven by an improvement in revenues Adjusted revenues increased 4 year over year to 2 55 billion which comfortably surpassed the Zacks Consensus Estimate of 2 50 billion On a sequential basis revenues increased 4 4 Reported revenues surged 10 3 from the year ago quarter and 7 9 quarter over quarter to 2 51 billion Segment DetailsThe Display Technologies segment generated around 36 of the total revenue Reported segment revenues were up 19 2 year over year and 12 6 sequentially On an adjusted basis revenues inched up 0 7 from the year ago quarter and 7 2 sequentially to 943 million Glass market volume increased in the high single digit percentage range better than the guidance sequentially driven by increased demand from panel makers LCD glass volume was slightly more than the market due to a favorable customer mix while price declines remained moderate Optical Communications generated almost 31 7 of the total revenue Reported segment revenues grew 6 4 year over year and 1 7 sequentially to 795 million driven by strong demand for fiber to the home market solutions Revenues from Hyper scale data center product sales were below management s anticipation The Environmental Technologies segment generated around 10 4 of revenues Reported segment revenues were up 2 7 year over year and 1 9 sequentially to 264 million Strength in Corning s automotive light duty substrates were driven by solid demand in North America Europe and China Specialty Materials generated 11 8 of revenues Reported segment revenues rose 2 4 year over year and 10 9 sequentially to 295 million Launch of two new Gorilla Glass products in the quarter drove sequential revenue growth The Life Sciences business accounted for around 8 5 of revenues Reported revenues were up 1 4 from the year ago quarter and 1 4 sequentially Operating DetailsAdjusted gross margin expanded 130 basis points bps from the year ago quarter and 10 bps from the previous quarter to 43 1 Adjusted selling general administrative expense SG A increased 30 bps year over year and declined 730 bps on a sequential basis Moreover reported research development expense R D declined 50 bps year over year and 80 bps sequentially As a result reported operating margin expanded 410 bps year over year and 640 bps sequentially to 21 3 CORNING INC Price Consensus and EPS Surprise GuidanceManagement provided its guidance for the fourth quarter Corning expects glass volume to be consistent to slightly down in line with the glass market The company expects panel maker utilization to remain high and glass supply to remain tight in the fourth quarter Optical Communications sales are expected to increase by a high single digit percentage driven by continued fiber to the home strength Environmental Technologies sales will decline year over year in the low single digit percentage due to continued weakness in the heavy duty truck markets Specialty Materials sales are anticipated to increase in the high single digit percentage range on a year over year basis driven by volume growth in Gorilla Glass The Life Sciences business will grow low single digits from the year ago quarter Zacks Rank Stocks to ConsiderCorning carries a Zacks Rank 4 Sell Better ranked stocks in the broader technology sector are Acacia Communications NASDAQ ACIA Veeco Instruments NASDAQ VECO and Vocera Communications NYSE VCRA All the three stocks sport a Zacks Rank 1 Strong Buy You can see Vocera Veeco and Acacia are scheduled to report earnings on Oct 27 Nov 1 and Nov 10 respectively Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Irish regulator nears end of first privacy probe ruling to take months | DUBLIN Reuters Ireland s data privacy regulator is close to concluding its first probe into a multinational company under the EU s new privacy laws likely to involve Facebook s WhatsApp subsidiary although a formal decision could take months
Ireland hosts the European headquarters of a number of U S technology firms That makes Ireland s Data Protection Commission DPC headed by Helen Dixon the lead regulator in the bloc under the EU s General Data Protection Regulation s GDPR One Stop Shop regime introduced last year
The Irish Independent newspaper quoted Dixon as saying on Friday that her office s first major GDPR decision relating to a multinational firm looked set to be one of two probes it opened into WhatsApp
More than half of the DPC s multinational investigations relate to Facebook NASDAQ FB eight directly focusing on the U S social media giant plus the two into WhatsApp and one into Facebook owned Instagram
I expect that file to land on my desk in the next fortnight Dixon told the newspaper in an interview
I d like to say that we could do it in 48 hours but it has to be in the order of months to be done in the way that it has to be done I will have to allow them a period of time to respond I would have to consider their responses
The new rules give regulators the power to impose fines for violations of up to 4 of a company s global revenue or 20 million euros 22 million whichever is higher
Dixon said her office was not really looking at the record breaking 5 billion fine Facebook agreed to pay last month to resolve a U S government probe into its privacy practices
One criticism of the FTC s U S Federal Trade Commission decision is that it has done nothing to change Facebook s business model or the way that Facebook will handle personal data The decisions that we make here have to have an impact in terms of how the GDPR must be applied she said
Dixon told the newspaper that the DPC had also opened its 21st investigations into a multinational technology company relating to Verizon Communications NYSE VZ Inc s media division previously named Oath
In a separate embarrassing ruling for the Irish government on Friday the DPC told the state it must delete data held on 3 2 million of the country s 4 7 million citizens gathered as part of the roll out of a identity card for public services
It said there was no legal basis for the wide application of the card which was introduced for claiming welfare benefits but was criticized by data privacy campaigners when it was required to access other state services such as renewing driving licences |
VZ | U S state legal chiefs telecom firms set to crack down on robocalls | WASHINGTON Reuters Attorneys general from 50 U S states and the District of Columbia will announce on Thursday they are joining forces with major telecommunications providers including AT T Inc Verizon Communications Inc NYSE VZ Comcast Corp NASDAQ CMCSA Sprint Corp and T Mobile Us Inc to crack down on unwanted robocalls according to a document seen by Reuters
The state AGs and companies are unveiling non binding anti robocall principles
The companies agreed to take steps to reduce unwanted calls and work with state attorney generals over recognized scams and trends in illegal robocalling and to update states on potential additional solutions for combating illegal robocall
Robocalls are the single largest source of complaints to the Federal Communications Commission Federal Trade Commission and to many state attorneys general offices Congress has been working on legislation to crack down on unwanted calls in recent months |
VZ | Yahoo down for six hours users vent out on Twitter | Reuters Thousands of Yahoo NASDAQ AABA email users took to Twitter on Thursday to complain that the internet company s services have been unavailable for more than six hours Users in Spain France and Germany were the worst hit according to outage tracker website Downdetector Yahoo said in a series of tweets that it was working to address the issue We understand how difficult this must be for you We are working especially hard to fix this Yahoo tweeted The email outage was trending on Twitter with the hashtag YahooMail A user tweeted Sorry if you have been trying to email me I m on yahoo and its borked Yahoo founded in 1995 once ran the most popular email service and was visited by hundreds of millions of users but steadily lost out to Alphabet NASDAQ GOOGL Inc s Gmail Yahoo s services include email search engine and a news service The company had rejected a 45 billion buyout offer from Microsoft NASDAQ MSFT in 2008 only to sell its core business for 4 48 billion to Verizon Communications Inc NYSE VZ in 2017
Verizon combined the business with AOL to form a venture called Oath Verizon shares were marginally up in morning trade |
VZ | StockBeat Zoom Earnings Beat Takes Backseat to Valuation Concerns | Investing com Zoom Video Communications shares fell Friday as its earnings beat in the second quarter and raised guidance did little to offset fears about the company s lofty valuation
For the full year 2020 Zoom Video Communications Inc NASDAQ ZM lifted its earnings per share to a range of 0 18 to 0 19 on sales of 587 million to 590 million above an earlier estimate for earnings per share of 0 02 to 0 03 on revenue of between 535 million and 540 million
With shares of Zoom boasting gains of nearly 250 since going public at 36 the upbeat forecast was brushed off with Credit Suisse SIX CSGN maintaining its neutral rating on the company flagging a frothy valuation Zoom Video shares fell nearly 4
We remain neutral due to ZM s premium valuation and embedded high expectations Credit Suisse SIX CSGN said in a note
Zoom Video s guidance boost for the fiscal year was underpinned by better than expected earnings on both the top and bottom lines
The company reported fiscal second quarter earnings of 8 cents a share on revenue of 145 8 million above consensus estimates from Investing com for earnings of 1 cent a share on revenue of 130 3 million
A rise in both customer additions and expansions supported the uptick in revenue with the company adding a record 7 800 net new customers in the quarter In the first quarter Zoom said it earned 3 cents a share on revenue of about 123 million
Looking ahead Credit Suisse SIX CSGN said it expected Zoom Phone a unified app for phone video meetings and chat to build on its success driving further users to the platform
Though it is still early innings we believe existing customer interest into Zoom Phone s differentiation as signs of potential future success among Zoom s existing customer base Credit Suisse SIX CSGN said Additionally we believe potential new partnerships with those such as Verizon NYSE VZ could drive further uptake for Zoom Phone and the overall Zoom UCaaS platform |
WMB | Returning Serena starts clay campaign with routine Rome win | Reuters Serena Williams NYSE WMB began her French Open preparations with a routine 6 4 6 2 victory over Swedish qualifier Rebecca Peterson in the opening round of the Italian Open on Monday Williams was back in action in only her fourth tournament of the season and the first since being forced to withdraw from the Miami Open in March due to a knee injury The 37 year old American fell behind 3 1 but recovered with a string of powerful groundstrokes from the baseline clinching five of the next six games for the opening set Peterson the world number 64 dug deep to grab two break points in the final game of the match but Williams saved both before wrapping up the win in an hour and 15 minutes Williams a 23 times Grand Slam singles champion has finished runner up at two of the last three majors but been unable to add to her tally since returning to the sport following the birth of her first child in 2017 Williams who has dropped to number 11 in the world rankings will next face the winner of the first round clash between her sister Venus and reigning Qatar Open champion Elise Mertens
After an opening round exit at the Madrid Open last week former world number one Garbine Muguruza scored her first win in over a month as she eased past China s Zheng Saisai 6 3 6 4 |
WMB | Bruins expect Hurricanes to fight back in Raleigh | RALEIGH N C The Boston Bruins see no reason for significant changes with the way the Eastern Conference finals are going against the Carolina Hurricanes At the very least the venue will be different for Game 3 as the Bruins look to put a stranglehold on the series Tuesday night at PNC Arena Boston won each of the first two games at home We know that they play well there in Raleigh Bruins defenseman Charlie McAvoy said Refocusing resetting and getting ready to play in a hostile environment and we just plan to play to our standards and our culture The Hurricanes returned home for the second time in this postseason facing a 2 0 deficit They overcame that in the first round against the defending Stanley Cup champion Washington Capitals We ve done it before Hurricanes captain Justin Williams NYSE WMB said Experience that s what we lean on right now Yet they didn t like the way they played in the two games at Boson The six game winning streak that Carolina put together vanished as the Bruins won twice by a combined 11 4 score One of the priorities for the Hurricanes is to put the Bruins through some adversity We re certainly going to make it as tough as we can on them and it won t be easy Williams said Our identity hasn t been established in this series so far The Bruins are aware that the Hurricanes haven t come this far just to fade away So that s the part that s a bit of the unknown for Boston Teams don t make it to this round if they don t have their tough group of guys Bruins goalie Tuukka Rask said It s 2 0 that s good We took care of business at home which is what we wanted to do now try to transfer that on the road Carolina goalie Petr Mrazek has a similar outlook It s 2 0 We ve been in this situation before Mrazek said We know what we can do at home Hurricanes coach Rod Brind Amour has been vague about his goalie situation for Game 3 though he has pointed out multiple times that the core of the problems in Boston weren t related to goaltending Mrazek was injured in the second round series against the New York Islanders and Curtis McElhinney played in Carolina nets in the final two plus games as the Hurricanes produced a four game sweep Now the Hurricanes must deal with Boston s onslaught of offense The Bruins have secured contributions up and down the lineup in the postseason Depth scoring is so crucial for playoffs Bruins defenseman Torey Krug said Most of the time when you see a matchup the two big lines are going head to head that kind of washes each other out typically over a series and then you have the depth scoring that comes into play and that s what wins you games We want to bottle that up and continue to use it to our advantage The Bruins have had 21 players post at least one point in this spring s playoffs I think this year because we ve scored a lot more up and down the line Boston coach Bruce Cassidy said It s just a little easier to roll lines and look for your matchup but roll lines and not have to overextend skill guys The Bruins are expecting to see an improved Hurricanes team
You don t get here by accident so we know that they are going to be better next game McAvoy said Field Level Media |
WMB | Lakers hire Vogel no news on Kidd | The Los Angeles Lakers hired Frank Vogel as their head coach on Monday confirming news that was widely reported Saturday However the press release announcing the move made no mention of the other alleged piece of the Lakers new coaching setup Multiple media outlets reported Saturday that Jason Kidd would be hired as an assistant coach on Vogel s staff but Kidd wasn t mentioned Monday in the Lakers announcement Vogel landed a multiyear deal for an undisclosed salary Numerous media reports indicated it is a three year contract We are excited to add Frank Vogel as the next head coach of the Lakers general manager Rob Pelinka said in a statement Coach Vogel has a proven track record of success in the NBA Playoffs and he reflects the core qualities we were looking for in a head coach including detailed game preparation extreme hard work and holding players accountable to the highest basketball standards Vogel said in the team issued statement I am very excited for this opportunity to join the Lakers a prestigious organization that I have long admired I look forward to coaching such phenomenal talent and bringing my strategic vision to the team Vogel 45 replaces Luke Walton who mutually parted ways with the Lakers on April 12 after compiling a 98 148 record in three seasons Walton subsequently was hired as the Sacramento Kings head coach Los Angeles never made the postseason during Walton s tenure The head coaching job will be the third of Vogel s NBA career in which he has compiled a 304 291 511 regular season record He was 250 181 with the Indiana Pacers 2010 16 then 54 110 with the Orlando Magic 2016 18 Vogel led the Pacers to the playoffs five times and they reached the Eastern Conference finals in 2013 and 2014 His Magic teams didn t make the postseason The New Jersey native also has experience as an assistant coach for the Pacers Philadelphia 76ers and Boston Celtics for eight years between 2001 and 2011 According to multiple media reports Vogel was no higher than third on the Lakers list of candidates to replace Walton The team reportedly was turned down by Monty Williams NYSE WMB and Tyronn Lue
Vogel will be introduced to the Los Angeles media on May 20 Field Level Media |
WMB | Fed s Williams says policymakers need to better prepare for lower interest rate world | Reuters Torturously slow recoveries from recessions and low inflation are here to stay unless policymakers can get a better grip on how to stabilize the global economy in an era of lower interest rates a top Federal Reserve policymaker said on Tuesday Experience teaches us that it is better to prepare for the future than wait too long New York Fed President John Williams NYSE WMB said in remarks prepared for delivery at a policy conference in Zurich Switzerland Ultimately failure to prepare often means preparation for failure Lower birthrates are keeping population growth down in the world s wealthier economies and technological advancement has shifted down to more normal levels Each trend is capping how much economies can grow Williams said The lower growth leads to less investment and aging populations in those advanced economies increases saving Lower demand for and a higher supply of savings has reduced the neutral level of interest rates around the world that would in theory not restrict or heat up the economy Those factors keep rates close to zero where they lose their potency to respond to a recession the economist argued adding that there is no sign that neutral rates will go back to previously normal levels absent a change in demographics or a scientific or technological breakthrough The Fed has set rates in the United States between 2 25 2 50 but they are lower and in some cases even negative in places such as Japan and Europe Williams who earlier in his career was a researcher at the San Francisco Fed is known for helping develop estimates of what the neutral interest rate might be Now he is pushing to encode some of that thinking in how the Fed approaches inflation from now on As part of a broad policy review Williams has been advocating for the Fed to systematically respond to periods of tepid inflation by keeping U S interest rates lower for longer But any alternatives to the Fed s current approach could be controversial raising questions about whether the Fed can actually live up to even more complex commitments to meet a 2 inflation target it has frequently missed The Fed s preferred measure of inflation the core personal consumption expenditures PCE price index excluding the volatile food and energy components slowed to an annual rate of 1 6 in March
Investors view these low inflation readings not as an aberration but rather a new normal Williams said |
WMB | Cash rich Canadian oil firms favor buybacks as other options narrow | By Nia Williams NYSE WMB and Rod Nickel CALGARY Alberta WINNIPEG Manitoba Reuters Canadian oil producers are raking in the highest revenues in five years thanks to strong global oil prices and Alberta s production cuts but government intervention has hamstrung their spending abilities encouraging many to buy back shares and pay down debt Canada s main crude producing province effectively became a mini OPEC this year after the Alberta government imposed production quotas to relieve pipeline congestion and drain a glut of crude in storage The move boosted prices dramatically but leaves Canadian producers starved of opportunities to grow output usually the go to strategy of any energy firm flush with cash The oil patch s caution has contributed to a slow pace of deal making despite plenty of assets being up for sale Several companies that announced big deals last year saw their stocks slide The energy sector s cash flow is projected to be C 52 7 billion 39 1 billion this year the highest in five years yet spending is declining year on year said ARC Financial analyst Jackie Forrest That is prompting producers to ramp up share buybacks and debt repayment as they bide their time pending two key political decisions New Alberta Premier Jason Kenney has yet to say what happens next with curtailments and Prime Minister Justin Trudeau s government is due to decide by June 18 whether to expand the Trans Mountain pipeline it owns Canada the world s fourth largest crude producer has seen billions of dollars in foreign investment flee since 2017 because of delays in building new pipelines Surging crude prices are creating a Canadian Nirvana for large cap Canadian energy companies said BMO analyst Randy Ollenberger At the current U S benchmark price and Canadian heavy oil discount the biggest producers would amass C 13 billion 9 7 billion in surplus cash this year he said Canadian oil producers coffers are the fullest they have been since 2014 when global oil prices peaked before crashing due to a slowing global economy and booming production NO POINT GROWING But producers have few options to spend There s no point growing with the Alberta production curtailment in place and the lack of egress opportunities MEG Energy Chief Executive Derek Evans told Reuters The heavy oil producer reported C 98 million in free cash flow during the first quarter and intends to repay debt Suncor Energy raked in more than C 1 billion in surplus cash flow last quarter and said it could increase stock buybacks if cash flow improves further There is no sense spending money to generate additional production and drive further throughput if you can t produce the oil The economics of that are zero Suncor CEO Mark Little said on an earnings call The number of potential buyers for assets up for sale has dwindled said Laura Lau senior portfolio manager with Brompton Group which owns shares in Suncor Canadian Natural Resources and Cenovus Energy Inc Canada is not a friendly place to do business The cost of capital has gone up and that is referenced in valuations Lau said They are competing against the U S and it s the most business friendly jurisdiction in the world Canadian Natural the largest Canadian energy producer is the only oil sands major adding a new project this year with the ramp up of its Kirby North oil sands plant But to do so the company will have to cut production elsewhere because of Alberta s limits on output President Tim McKay said Investment in Canada is stymied McKay said You have regulatory uncertainty and a system where market access doesn t exist MEG s Evans said Alberta lifting the curtailments would be a big check mark that would encourage companies to boost spending adding that progress on replacing the U S portion of Enbridge s Line 3 is a needed second check mark Sentiment could change quickly with construction starting on expanding Trans Mountain or another new pipeline because producers could then time their investments with takeaway expansion said Grant Fagerheim chief executive of Whitecap Resources You can understand people like me wanting to be more conservative and defensive than aggressive Fagerheim said |
WMB | Trump Suggests Fed Could Help His Trade Fight Against China | Bloomberg President Donald Trump called on the Federal Reserve to match what he said China would do to offset economic hardship being caused by tariffs as he sought to draft the U S central bank into his simmering trade war
China will be pumping money into their system and probably reducing interest rates as always in order to make up for the business they are and will be losing the president said in a tweet Tuesday If the Federal Reserve ever did a match it would be game over we win In any event China wants a deal
His suggestion that the Fed could help him counter China in the countries trade war builds on Trump s repeated efforts to pressure the U S central bank to stimulate the U S economy even though growth is solid and unemployment is at a 49 year low The remarks may also help him deflect blame onto the Fed if the escalating trade dispute causes the U S economy to stumble as he seeks reelection in 2020
The president s comments will likely feed concerns in other countries over Trump s willingness to break long standing norms of international economic diplomacy The U S has long complained about other governments applying political pressure on central banks and argued that Fed policy is driven by domestic economic priorities rather than any international competition
Fed officials raised interest rates four times last year but have since signaled an extended pause as they wait for a tight labor market to lift inflation that has been persistently too low
While financial markets expect the Fed to cut interest rates in the next year Chairman Jerome Powell and his colleagues have indicated they don t see a strong case for a move either way They ve also stressed that they will make moves independent of any political considerations
Uncertainty caused by the escalating trade dispute has been one cloud on the horizon with U S stocks slumping sharply Monday after China retaliated against import levies that the U S imposed last week even as Trump threatened to do more Stocks opened higher on Tuesday with the S P 500 Index advancing around 0 5
Trump moved to reassure markets on Tuesday saying that the U S has a dialogue ongoing with China I think it s going to turn out extremely well Trump told reporters as he was departing the White House for a trip to Louisiana
Still four fifths of economists polled by Bloomberg see a further escalation of tariffs increasing the possibility that the U S economy could slip into recession by the end of next year
The U S Trade Representative s office Monday released a list of about 300 billion worth of Chinese goods including children s clothing toys mobile phones and laptops that Trump has threatened to hit with a 25 tariff
New York Fed President John Williams NYSE WMB told Bloomberg Television earlier on Tuesday that the levies were already starting to push up U S inflation and will have a greater impact as they rise though the U S economy is in a good place right now
Trump has repeatedly criticized the central bank urging it to deliver a drastic rate cut and resume bond purchases in an April 30 tweet That was a reference to the Fed s quantitative easing campaign in the aftermath of the financial crisis which was deeply unpopular at the time with many of Trump s fellow Republicans
Updates with Trump comment in eighth paragraph |
WMB | Serena pulls out of Italian Open with knee injury | ROME Reuters Serena Williams NYSE WMB pulled out of the Italian Open on Tuesday due to a persistent knee injury which casts doubt on her participation in the French Open which begins this month The 37 year old American world number 11 had been due to face sister Venus in an eagerly awaited second round clash in Rome Venus received a walkover into the third round Serena a 23 times Grand Slam singles champion has struggled with injuries since reaching the quarter finals of this year s Australian Open although she had breezed through her opening match against Swede Rebecca Peterson I must withdraw from the Italian Open due to pain in my left knee the four times Rome champion said I will miss the fans and competition at one of my favorite tournaments I ll be concentrating on rehab and look forward to seeing you all at the French Open and next year in Rome Williams knee injury also forced her to pull out of her last tournament in Miami in March
The French Open will begin on May 26 |
WMB | Justice Ruth Bader Ginsburg gets best fight MTV Movie award nod | LOS ANGELES Reuters U S Supreme Court Justice Ruth Bader Ginsburg scored nominations on Tuesday for the 2019 MTV Movie and TV awards where she will compete for top honors with blockbuster offerings Game of Thrones and Avengers Endgame The diminutive liberal justice 86 got four nods at the youth oriented awards show including best fight and best real life hero courtesy of the 2018 documentary RBG that chronicled her legal legacy and rise to become an unexpected pop culture icon especially among women The MTV Movie and TV awards usually focus on crowd pleasing movies and TV shows and have become an irreverent antidote to the winter Hollywood awards season which honors more serious fare Winners are chosen by fans voting online and will be announced at a ceremony airing on June 17 RBG which also was Oscar nominated earlier this year got nods for best documentary as well as in the new MTV category most meme able moment Ginsburg became the first public figure to be nominated in the popular best fight category in which she was cited for battling inequality Her rivals include fictional characters in clashes from Captain Marvel and medieval fantasy television series Game of Thrones Ginsburg also featured in the new MTV category of best real life hero alongside tennis star Serena Williams NYSE WMB and Australian comedian Hannah Gadsby Game of Thrones and Marvel superhero film Avengers Endgame already the all time second biggest movie after 2009 s Avatar got four nominations each They included nods for stars Robert Downey Jr Josh Brolin Emilia Clarke and Maisie Williams MTV again dispensed with gender classifications placing men and women together in performance categories in a move to embrace equality and gender fluidity The June awards ceremony from the California beach city of Santa Monica will be hosted by Shazam star Zachary Levi |
WMB | Fed Officials Pledge Rate Patience Amid Trade and Trump Pressure | Bloomberg Federal Reserve officials are sticking with their pledge for patience on interest rates shrugging off President Donald Trump s escalating trade war and his pressure for a cut
New York Fed President John Williams NYSE WMB and his Kansas City colleague Esther George who vote on policy this year acknowledged that new tariffs on Chinese imports could affect the outlook for U S inflation and growth But both saw no need for the central bank to react
Policy is in the right place Williams said in a Bloomberg Television interview Tuesday in Zurich I don t see any reason to have a bias up or downward in the current circumstances We re going to evaluate assess to see the best decision to get us to our goals
Fed officials held rates steady at their April 30 May 1 meeting and said they will be patient on judging the next move in policy after previously signaling they saw no need for a move all year
This wait and see approach is appropriate because we have not seen upward pressures building on inflation even though we have experienced above trend growth and a further tightening of labor markets George told an audience in Minneapolis
Investors on the other hand have increased their bets that the central bank will cut rates this year after China retaliated against Trump s tariffs and the U S warned there was more to come
George said she wasn t ignoring the message from markets In the context of an economy that is still growing above potential the labor market that continues to add jobs a falling unemployment rate I don t see an argument right now for a rate cut she said
That followed other similar comments from Fed officials in recent days including Atlanta s Raphael Bostic who said he was willing to be patient and Boston s Eric Rosengren who told Bloomberg Monday it s too early to tell whether the trade dispute will hurt the U S economy
Officials are trying to keep the economy growing at a solid pace despite headwinds including trade policy uncertainty and a dimming outlook for growth abroad U S unemployment is the lowest in nearly 50 years though inflation remains below the Fed s 2 target
Trump earlier sought to enlist the Fed in his trade fight urging the central bank to match what he said Beijing would do to offset the economic hardship caused by U S tariffs
Fed officials say they will ignore political pressure as they focus on their dual mandate for maximum employment and stable prices They ve also been careful to say the economic impact of uncertain trade policy will hinge on how long the dispute lasts and what it does to business sentiment and the appetite for risk among investors
It has various effects on the economy Williams said It probably will boost inflation by a few tenths over the next year It affects demand a bit and growth in the short run But also its negative effects on the value chains and how our economic system works |
WMB | Zverev crashes out in Rome as injured Serena withdraws | ROME Reuters World number five Alexander Zverev continued his poor recent form as he crashed out of the Italian Open in the second round while Serena Williams NYSE WMB had to pull out of the women s draw with a recurring knee injury on Tuesday Serena had beaten Swede Rebecca Peterson in straight sets on Monday and was due to face sister Venus but the injury means her participation at the May 26 June 9 French Open is in doubt Zverev who has not got past the quarter finals at any tournament since reaching the Acapulco final in early March did little to suggest he could be a contender at Roland Garros after a 7 5 7 5 defeat by home favorite Matteo Berrettini Roared on by a partisan home crowd at the Foro Italico Berrettini took the opening three games before the German 2017 champion and last year s runner up regained his composure Berrettini then saved five break points to take a 6 5 lead before the rattled Zverev who beat the Italian in the same round last year threw away the opening set with two unforced errors and a double fault They traded breaks early in the second before Zverev who saved a match point in the 10th game committed another flurry of errors capped by a forehand into the net that handed Berrettini a memorable win The environment was great the match that I played was horrendous said the 22 year old Zverev KYRGIOS ANTICS In first round action David Goffin produced two blistering sets to fight back and beat Stanislav Wawrinka 4 6 6 0 6 2 while Nick Kyrgios treated the crowd to an array of his antics in a 6 3 3 6 6 3 victory over Russian Daniil Medvedev The flamboyant and unpredictable Kyrgios again displayed his best and worst as he combined spectacular shots with an outburst of poor behavior The Australian won the opening point of the match with what is fast becoming a trademark underarm serve and breezed through the first set before cheers from the crowd turned to jeers amid a second set meltdown Having dropped serve to hand Medvedev a 5 3 lead Kyrgios blasted a ball over the stands then bent over and turned his backside to Medvedev and finally exchanged words with the umpire before the Russian held to force a third set As if nothing had happened Kyrgios got back to business as he hammered in aces and winners having also capped some good forays to the net with confident volleys to book a second round clash with Norwegian Casper Ruud Goffin dropped the opening set before he blew Wawrinka away in the next two the decisive moment coming in the second game of the third when the Belgian saved a double break point at 1 0 down He won the next five games and although the Swiss briefly delayed the inevitable Goffin was able to celebrate after his frustrated opponent blazed a forehand into the crowd Victoria Azarenka of Belarus knocked out holder Elina Svitolina 4 6 6 1 7 5 as she dug deep in a second round evening match that was twice interrupted by rain in the second set Ukrainian fifth seed Svitolina appeared to be cruising in the third set as she served for the match at 5 2 up but the resilient Azarenka rallied to claim the last five games Ashleigh Barty had to work hard for a 4 6 6 3 6 4 win over Viktoria Kuzmova to reach the third round while Kristina Mladenovic cruised past French compatriot Caroline Garcia 6 1 6 2 in their first round clash The leading men get their campaigns underway on Wednesday when world number one Novak Djokovic fresh from winning last week s Madrid Open takes on Canadian Denis Shapovalov
Holder Rafael Nadal faces Frenchman Jeremy Chardy while Roger Federer meets Portugal s Joao Sousa |
WMB | A Closer Look At Williams Partners Distributable Cash Flow As Of 2Q 2012 | On March 19 2012 Williams Partners L P WPZ announced the 2 5 billion Caiman acquisition and upped its estimate of 2012 capital expenditures from 2 9 billion to 5 4 billion The following day the price per unit immediately dropped from 61 to 56 on investor concerns regarding dilution On July 23 2012 WPZ lowered Distributable Cash Flow DCF guidance for 2Q12 to 289 million down from 475 million in 1Q12 and 397 million in 2Q11 and for 2012 2014 as follows In response the price per unit dropped from 55 21 to 53 70 On a positive note distribution growth guidance was maintained at 8 for 2012 and 9 midpoint per annum for 2013 2014 growth in WPZ s fee based business is expected and WPZ announced an agreement to a acquire an 83 3 interest in the Geismar Olefins Production Facility from Williams Companies Inc WMB WPZ s general partner which is expected to be accretive this is not yet reflected in the current guidance and to shift ethane price exposure to ethylene WMB owns 68 of WPZ 66 in the form of limited partner interests and a 2 general partner interest The weak results announced August 1 for 2Q12 primarily reflect a sharp decline in prices for natural gas liquids NGL and are secondarily due to higher maintenance expenditures WPZ s Midstream segment provides natural gas gathering and processing services under fee contracts volumetric based keep whole agreements and percent of liquids arrangements Under keep whole and percent of liquid processing contracts see the Midstream segment retains the rights to all or a portion of the NGLs extracted from the producers natural gas stream and recognizes revenues when the extracted NGLs are sold and delivered hence lower NGL prices mean lower revenues as well as lower segment profits and operating income as seen below The definition of DCF used by WPZ is described in an article titled That article also provides for comparison purposes definitions used by other master limited partnerships Using WPZ s definition DCF for trailing 12 months TTM period ending 6 30 12 was 1 580 million 5 20 per unit up from 1 413 million 5 03 per unit in the TTM period ending 6 30 11 The generic reasons why DCF as reported by the MLP may differ from sustainable DCF are reviewed in an article titled Applying the method described there to WPZ results through March 31 2012 generates the comparison outlined in the table below The gaps between reported DCF and sustainable DCF in Table 3 relate mostly to other and are comprised principally of adjustments for earnings from unconsolidated subsidiaries and certain acquisition related adjustments e g management added back to DCF 26 million of Caiman related transaction costs in 2Q12 But overall the differences between reported and sustainable DCF are not huge Coverage ratios are indicated in the table below The lower coverage ratios reflect in addition to the performance issues discussed above growth in the number of units outstanding as a result of issuing equity to partially finance large acquisitions It is helpful to look at a simplified cash flow statement by netting certain items e g acquisitions against dispositions and by separating cash generation from cash consumption Here is what I see for WPZ Simplified Sources and Uses of FundsIn 2Q12 net cash from operations less maintenance capital expenditures less net income from non controlling interests did not cover distributions This is highly unusual for WPZ and has not occurred in the prior 10 quarters even once For the TTM ending 6 30 12 the excess net cash was 452 million down from 560 million for the TTM ending 3 31 12 but higher than the 418 million for the TTM ending 6 30 11 Another note of caution relates to the balance sheet which in 2Q12 saw an increase of 724 million in goodwill and 1 billion in other intangible assets vs the prior quarter Based on recent performance management may conclude that the carrying value of the goodwill exceeds its implied fair value and recognize an impairment loss in the amount of the excess Price per unit continues to languish and has dropped further since the July 23 announcement to close on 8 3 12 at 52 18 with a yield 6 08 Despite some signs of weakness I have been adding to my WPZ position on such pullbacks and such as the one that we are currently seeing |
WMB | Trading Williams Companies Inc Short This Stock | Williams Companies Inc WMB seems well positioned for a short From a fundamental perspective it is expensive when using the S P 500 as a measure It is currently trading at 51 66 times trailing PE and 22 65 times forward PE From a technical perspective the chart is forming a rounding top while approaching long term technical resistance It is interesting to see the ATR 0 50 in this issue in contrast to the beta 1 40 This is of course enough to cause some people to act However without the block activity there is no compelling reason to establish a position long or short I say this to once again illustrate the importance of large blocks and heavy aggregate volume The blocks which have traded from May of this year until now indicate at least to me that Williams Company has been extensively distributed along the ridge of the current trading range My suspicion is that the Designated Market Maker for this issue is very patient Knowing exactly where this issue is headed eliminates the need for him to act out of urgency Stock exchange insiders can and do use patience as a tactical weapon in their arsenal to outlast the average investor It can be challenging to negotiate this market when one considers the inadequacies of standard prescriptive analytical systems This is because the talking heads discussing market variables intentionally exclude the most important variable When was the last time you heard any of them mention a large block transaction Conflict should not exist between common sense and sound theory since sound theory to some degree is vested in common sense You must consider the possibility that the media and the exchange are trying to draw your attention to or away from something As paradoxical as it may seem we need to help the Designated Market Maker achieve his overall objectives Remembering all the while that if given the opportunity he will not hesitate for an instant separating us from our capital Pity the poor soul who contends with a market he does not need to contend with and has fewer resources than necessary to effectively do so Even though we are all interested in achieving consistent effective performance we must never lose sight of the fact that it is a comprehensive understanding of the essentials which makes it possible in the first place In this way we can distinguish the timeless from the temporary What is immediately obvious from the blocks in the provided matrix is that this issue does not trade blocks of this magnitude frequently This would imply that major merchandising activity is taking place and that serious price consequences must follow I anticipate a move to the downside On the basis of the foregoing these are my views and observations The Trade I recommend establishing a short position in Williams Companies Open your short position First Sell with only of whatever capital you intend to commit to Williams Companies at 32 66 or better Cost Average Second Sell the remaining of the position at 35 27 and stop out at 36 66 Do not post your stop loss I have said it before but it is so important that at the risk of being redundant and in an abundance of caution I will say it again It is too easy for the Designated Market Maker to cash investors out by moving the price above or below your stop out and move the price right back up or down again In addition when a stop out is triggered it converts into a market order and that could be disastrous if the DMM decides to really take advantage Remember the Flash Crash I would be looking to cover this position with a downside price target of 28 82 There is always the possibility that the trade may not work out There Is Never A Sure Thing particularly on a short Investors must realize and recognize that there is never a sure thing Sometimes events that have a low probability of occurring bring forth very serious consequences should they come into being Investors must judiciously consider what the inherent practical limits are and how much they stand to gain in relation to the risks involved in establishing any position In addition persistence can become desperate folly by allowing a losing position to become a viable argument for deciding on a new position Rather such decisions should be based on the current and soon to be circumstances Any position in which one unexpected factor has a significant impact on your portfolio is the result of poor planning It is a fault most commonly associated with people who want to explain away their losses SUN TZU Art of War Use an attack to exploit a victory never use an attack to rescue a defeat If you follow the process recommended and the trade does not work the overall loss in this model is 3 000 00 That amounts to 003 of the overall portfolio theoretically valued at 1 000 000 Finally never be a brave and brainless investor because a fool and his money are soon parted A portfolio of 1 000 000 should position size in the following manner This is a trade not an investment Be ever vigilant Disclosure This is a trade not an investment Be ever vigilant See Performance Tracking |
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