Stock futures were little changed to slightly higher Wednesday evening as market participants continued to parse through the Federal Reserve’s September monetary policy announcement, and looked ahead to Thursday’s economic data reports including new weekly jobless claims.
Central bank officials signaled that near-zero interest rates would remain for at least the next three years, as the US economy continues to face risks around the ongoing pandemic.
Shares of big tech companies including Amazon (AMZN), Facebook (FB) and Apple (AAPL) ticked higher Wednesday evening after dropping during the regular session, with major tech shares having renewed last week’s declines.
But elsewhere, newly public tech companies Snowflake (SNOW) and JFrog (FROG) each steadied in late trading after surging in their public debuts, as investors embraced a fresh set of high-growth software names. Snowflake, a cloud data company backed by Warren Buffett’s Berkshire Hathaway and Salesforce’s venture capital arm, saw shares more than double their IPO price during Wednesday’s session, and JFrog’s stock jumped as much as 75%. Other software companies including Sumo Logic and Unity Software are set to go public later this week.
Market participants also digested the Federal Open Market Committee’s newly issued expectation for interest rates to remain near zero until at least the end of 2023. Fed officials upgraded their economic projections for this year, and now anticipate a shallower decline in real GDP and a lower unemployment rate by year-end versus their early-summer projections.
Still, officials suggested that the quicker-than-expected early economic recovery could be jeopardized in absence of further fiscal stimulus.
“The fiscal policy actions that have been taken thus far have made a critical difference to families, businesses, and communities across the country. Even so, the current economic downturn is the most severe in our lifetimes,” Fed Chair Jerome Powell said in remarks Wednesday. “It will take a while to get back to the levels of economic activity and employment that prevailed at the beginning of this year, and it may take continued support from both monetary and fiscal policy to achieve that.”
Prospects of further support from Congress before the November presidential elections remain dim, however, especially after the Senate failed last week to advance another coronavirus relief package. The expiration of the federal enhanced unemployment benefits has left tens of millions of Americans put out of work during the pandemic without additional support, with the lapse of these benefits expected to weigh on consumer spending and economic activity as a whole. The Commerce Department on Wednesday reported that retail sales growth slowed for a fourth straight month in August.
6:17 p.m. ET Wednesday: Stock futures open slightly higher
Here were the main moves in equity markets, as of 6:17 p.m. ET Wednesday:
S&P 500 futures (ES=F): 3,395.00, up 5.5 points or 0.16%
Dow futures (YM=F): 28,099.00, up 45 points or 0.16%
Nasdaq futures (NQ=F): 11,292.75, up 24 points, or 0.21%
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No proof Sen. Collins voted to help husband
Democrat Sara Gideon has launched a new TV ad making an unsupported claim that Republican Sen. Susan Collins of Maine has used her power in public office to advance legislation to help her husband and his business.
Gideon’s campaign began running the ad this month, in one of the country’s tightest U.S. Senate campaigns. Democrats hope they have a chance at flipping the chamber if voters send Gideon, currently the speaker of the Maine House, to the Senate over Collins, who is seeking a fifth term.
A look at claims in the ad:
Narrator in SARA GIDEON AD: “Susan Collins has a secret. Collins’ secret is she’s part of a perfect Washington marriage between a senator and a lobbyist. And Collins pushed for policies that benefited her husband’s lobbying business, voting to repeal a tax on firms like his and fighting against President Obama’s push to make them disclose contributions.”
THE FACTS: Gideon’s ad leaves out important details to lob a groundless accusation that Collins voted to line her husband’s pockets.
The vote referred to in the ad — a repeal of a 3% withholding tax on government contractors— was backed by Democratic President Barack Obama and unanimously approved by the Senate in 2011.
That 3% withholding tax was signed into law by GOP President George W. Bush years earlier to encourage government contractors to fully pay their taxes. It wasn’t specific to lobbyists, as Gideon’s ad suggests.
But the law was widely criticized by both Republican and Democratic lawmakers who said it placed an unfair burden on a majority of government contractors who paid taxes on time, and it was never even implemented before it was repealed in 2011.
The law would have been costly for both the government and its contractors. A 2011 report by the nonpartisan Congressional Budget Office predicted $85 million worth of administrative costs to implement the 3% withholding tax over a five-year period. Contractors, meanwhile, would have been stuck with as much as $12 billion in costs — an expense that likely would have been passed on to the federal government through higher prices, The Associated Press reported.
Furthermore, Collins wasn’t married to Thomas Daffron, at the time of the vote. The Associated Press reported on Feb. 3, 2012 that she was engaged to Daffron — months after her vote on the withholding tax.
Daffron, a former Senate staffer, was the chief operating officer when the two wed on Aug. 11, 2012. He resigned from that job in 2016. Over the years the firm has won millions of dollars in government contracts.
As for the ad’s point about disclosing contributions, it’s true that Collins led a campaign and drafted legislation against a proposed Obama rule that would have required federal contractors to make public their political donations and expenditures. This also happened in 2011, before her marriage.
The proposed executive order was intended to make federal contracting more transparent and was hailed by liberal groups. It was opposed by Republicans and some top-ranking Democrats who said they feared the political disclosures might influence who wins government contracts. Obama eventually abandoned his effort.
EDITOR’S NOTE — A look at the veracity of claims by political figures.
Find AP Fact Checks at http://apnews.com/APFactCheck
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Time to Bottom Fish? Top Analyst Offers 3 Stocks to Buy
September saw some serious market losses, from 5% in the Dow to 9.5% in the NASDAQ. In the wake of it, investors must decide what those losses mean, and how it will impact investment strategy going forward. And for that, investment bank Oppenheimer has some suggestions.
The firm’s 5-star analyst Ittai Kidron has tagged three tech stocks in which he sees plenty of room for near- to mid-term growth. Kidron is an expert in the market’s technology sector, and is rated among the Street’s 25 best analysts, with a 72% success rate to his forecasts and a 34.5% average return on his stock picks.
Using TipRanks’ Stock Comparison tool, we were able to evaluate these 3 stock picks alongside each other to get a sense of what the analyst community has to say.
Smartsheet, Inc. (SMAR)
Kidron’s first pick is Smartsheet, an SaaS company with a cloud-based workspace management and collaboration system. Smartsheet’s products enable faster, more efficient teamwork via remote, letting team members automate, capture, manage, plan, and report on work at any scale. The company boasts over 97,000 customer – including 75% of the Fortune 500 companies. Smartsheet has enhanced its relevance in the online business space by making its product compatible with popular systems such as Dropbox, Google Apps, MSOffice, and Salesforce.
Smartsheet’s earnings – while still coming in at a net loss – beat the forecasts by wide margins in Q1 and Q2, and revenues grew steadily in the first half of the year, with the top line currently at $91.22 million. That last number – the company’s FYQ2 revenue – is up an impressive 41% year-over-year.
In another impressive display of Smartsheet’s strength, the company announced last month that it is acquiring the digital asset management company Brandfolder, in a deal worth $155. The acquisition will add Brandfolder’s capabilities to Smartsheet’s products, helping customers to improve efficiency.
Oppenheimer’s Kidron sees a clear path ahead for Smartsheet with this acquisition.
“We suspect Brandfolder’s annualized rev. run rate is still small… While we don’t expect a material change to Smartsheet’s near-term rev. run rate, we view it as a long-term positive from a diversification perspective. We also believe the acquisition can be quickly absorbed from a cost perspective over 1-2 quarters given Smartsheet’s normal pace of investment…”
Kidron sets a $65 price target on the stock, implying an upside of 42% for the coming year, and backing his Outperform (i.e. Buy) rating. (To watch Kidron’s track record, click here)
Overall, SMAR’s Moderate Buy consensus rating is based on 9 Buys and 4 Holds set in recent days. The stock is selling for $45 and the average price target of $60.54 suggests room for 32.5% upside growth. (See SMAR stock analysis on TipRanks)
New Relic, Inc. (NEWR)
Next up is New Relic, another Silicon Valley tech company. New Relic’s products permit software analytics, allowing the customer to use a cloud system to track app performance in order to perfect the software. As New Relic says, it puts analytics, troubleshooting, and optimization all in one place for efficient engineering.
The company has seen modest, steady revenue growth during 2020, and the CY2Q results put the top line at $162.6 million. The EPS net loss held steady in the first half, at 37 cents.
Kidron is generally positive on New Relic, acknowledging headwinds but not shy about his belief that the company can overcome them.
“While we expect the execution challenges to weigh on the shares near term, we also still believe there’s value in New Relic One and demand for observationally in general… New Relic’s taking an aggressive step to simplify its product positioning and pricing, which could make for a tough 2Q as sale/customers react. Given the increased uncertainty, we believe NT stock performance could be volatile as investors wait for proof points of customer renewals, new customer engagement, and better sales execution, which could emerge late in FY21,” Kidron opined.
These comments are backed by Kidron’s Outperform rating (i.e. Buy), and his $75 price target implies an upside potential of 40% for the stock in the next 12 months.
While the top analyst is bullish on NEWR, the stock only rates a Hold from the analyst consensus. New Relic has 4 Buy reviews, along with 6 Holds and 2 Sells. The stock is priced at $53.61 and has an average price target of $66.70, suggesting a 24% one-year upside. (See NEWR stock analysis on TipRanks)
Last on our list today is Twilio, a cloud server company based in Silicon Valley. This company offers customers a cloud-based communications platform, allowing access to telecom systems via the computer. Twilio’s platform makes it possible for customers to place or receive phone calls, chats, text messages, and even video conversations via connected devices, and built-in security systems keep it safe through user verification.
The sudden move toward remote work and virtual offices in 1H20, precipitated by the coronavirus crisis, would seem on its face to be a boon for a company like Twilio – and the data bears that out. The company saw revenues grow sequentially from 4Q19 to 1Q20, and broke $400 million in the second quarter. The company reported 200,000 active customer accounts at the end of Q1, up 5% year-over-year, and added another 10,000 in Q2. TWLO shares have gained 137% year-to-date; they seemed to shrug off the corona crisis.
Kidron updated his notes on Twilio after hearing management’s Summer 2020 Releases webinar. He notes several important points that underlie the company’s fundamental strength: “Twilio now has 8M registered developers… Cumulatively, it has now reached 3 trillion emails processed… Twilio has made more progress in making its entire portfolio available for healthcare use cases now that Studio and Functions are HIPAA-compliant.”
At the bottom line, Kidron says simply, “We’re increasingly confident in Twilio’s ability to make platform investments, engage with developers, and expand its lead over competitors during the crisis. Twilio remains a top pick.”
In line with these comments, the analyst rates TWLO an Outperform (i.e. Buy), and his $300 price target implies a 28% one-year upside potential. (To watch Kidron’s track record, click here)
Twilio holds a Strong Buy rating from the analyst consensus, based on 21 reviews including 17 Buys and just 4 Holds. Meanwhile, the average price target stands at $294.50, suggesting a 29% upside potential, and lining up nicely with Kidron’s outlook. (See Twilio’s stock analysis at TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
How to have a coronavirus social routine that’s as meticulous as Dr. Fauci’s
Dr. Anthony Fauci works 7 days a week, breaking only to eat.
But he makes sure to regularly power-walk with his wife, and occasionally have dinner with a few friends outdoors.
He is worried about this winter, when “certainly we’re going to have to do indoor things more than we were able to do before.”
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Dr. Anthony Fauci does not consider his own pandemic protocol as anything to admire, or to emulate.
“I don’t think we need to go by my routine, which is probably unusual,” he said, when I asked how we might be able to relax our daily procedures a little, after months of vigilance against the coronavirus in the US.
The 79-year-old head of the National Institute of Allergy and Infectious Diseases said he’s been working “seven days a week, 18 hours a day,” something he does not recommend.
(Severe stress, as he says, “can sometimes impact the immune system,” which is not great during a pandemic.)
Often, he’ll spend half a day at the White House, and the other half in his office at the National Institutes of Health. Maybe, he’ll have time to bite into a cold slice of pizza while breaking for lunch.
On his off-time, however, he doesn’t collapse on the couch. He maintains a schedule of activities to stay fit, healthy, and connected with other people.
Nightly power walks with his wife
When he goes home, he reconnects with his wife, nurse Christine Grady, who heads up the department of bioethics at the NIH. “She does a considerable amount of her work virtually,” Fauci said, so she’s “in contact with very few people.”
At night, the two often get outside for a brisk stroll along the C & O canal, knowing that regular exercise is a great way to combat stress, keep your brain and heart healthy, and improve your mood. “I go for my exercise — a three- to four-mile power walk at night with my wife — that’s one person who I know is not infected,” Fauci said.
Sometimes, if there aren’t other people out in sight, he’ll even pull down his mask and enjoy the fresh air, as he recently told Jennifer Garner.
But he’s definitely not heading to any bars or restaurants, or doing much else for fun.
“There’s no outside entertainment, there’s nothing other than just my relationship with my wife — which is terrific,” he said. “So we have a very regimented, predictable existence of work, work, work, exercise, eat — but do it in a very safe way.”
Because he doesn’t get a ton of sun from his nighttime exercises and days spent indoors, Fauci also pops a vitamin D supplement, which is one of the few that experts say is a useful addition to a healthy diet, for the many older adults who are deficient. (He also says you can take “a gram” of vitamin C daily, but you don’t have to if you’re eating fresh fruits and vegetables every day.)
Outdoor dining with a few close friends who are not in contact with other people
Other than Grady, Fauci doesn’t really hang out with other people socially, especially indoors, where the coronavirus tends to spread well between people.
“We’re being very careful for any number of reasons you may want to be careful, but also, you know, I’m not the youngest person in the world,” he said. “I’m in a risk category.”
If he does get together with friends, the gatherings are intimate, fresh air affairs, where infection prevention is always top of mind.
“It is usually a dinner outside on the back deck with people who we’ve known for a long time who are equally as compulsive as we are about trying to protect yourself against infection,” Fauci said. “The total number of us is never more than four or five.”
He may have to break his rule against indoor socializing as it gets colder, but he is not sure how that will work
Until now, the only person they’ve invited indoors was one of their daughters who came to visit over the summer, and quarantined herself in the basement for 14 days before sharing their space.
“I almost can’t remember what we did indoors with anybody other than just my wife and I in the house and one of my children,” he said.
When I asked him how those routines might change as winter approaches, and temperatures tumble, Fauci said he doesn’t have any “easy answers” for how life will continue with the virus, into 2021.
“My wife and I actually had a serious conversation last night, as we were sitting out on the deck, about what the heck is going to happen in the winter, you know? And I’m not sure, to be honest with you. But certainly we’re going to have to do indoor things more than we were able to do before. Because we do almost nothing with people indoors right now.”
Read the original article on Business Insider
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