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Maybe you were one of those people who bought Facebook (FB) stock right after the initial public offering. You watched stock of the social network giant brought to its knees by worries about future growth and, most importantly, mobile. But those problems are all behind us now.
Facebook has become a king of mobile. After its latest blowout quarter, as Benzinga noted, everyone is deliriously happy. Fifty-nine percent of advertising revenue came from mobile, and the stock is over $76. If you hung in, you made some serious money. If you had bet on Google (GOOG) over the same period, you also would have had a payday, especially as the search giant owns the mobile platform of choice.
But don't get too comfortable, because there's a tiny problem. Facebook, Google and companies like them may not be able to keep delivering those massive increases in revenues and profits. The reason is your smartphone.
There's an Ad for That -- or Is There?
That's right, the mobile miracle -- that is transforming high tech, bringing the Internet everywhere, changing our lives and even finding parking spaces when we need them -- has a gotcha. Advertising on smartphones doesn't make money as much as it did on the old-fashioned Internet. And the more we all move toward doing our searching, social networking and everything else on those handheld devices, the tougher we're going to make it for the companies that deliver all those services to satisfy our stock portfolios.
Advertisers are dissatisfied with smartphone ads and therefore less willing to pay premium rates that can fuel growth. Some issues:
Carriers have been slow to tap the user data that advertisers depend on for targeted delivery, according to Advertising Age. Third-party ad networks and vendors offer some data, but the carriers have the richest data. However, they don't want to find themselves trying to convince a Congressional investigative panel on live TV why what they do doesn't affect consumer privacy.
Brands feel let down by mobile ad opportunities, according to iMedia. Companies view them as "seriously lacking the excitement and effectiveness that brand marketers need."
Mobile video use is down among consumers, according to AdNews. Video is the source of some of the highest-paying advertising space on mobile because it commands the best attention from consumers.
There isn't the room physically on a smartphone screens for numerous ads, so the Googles and Facebooks can't rack up as much revenue per user. Compare that to a web browser on your desktop or laptop, where you'll see plenty of ads simultaneously.
You can already see the results in the earnings reports. As the New York Times reported, the price Google gets per clicked ad dropped 6 percent last quarter from the same period a year before. That's the continuation of a two-year trend. Google's explanation was that "mobile does not monetize as well as other forms."
Facebook isn't out of the woods, either. The company announced that mobile represented 62 percent of its advertising revenue. Sounds good until you look at the audience composition: 79 percent of daily active users and 71 percent of daily monthly users were mobile. That means you.
Many investors are betting, whether they realize it or not, that somehow, somewhere, someone will figure out how to make mobile pay off more thoroughly. But until they do, you and I and every other Internet user who shifts more of their online time to mobile will put the pressure on the revenues, profits and eventually the stock prices of the service providers.
CYNK Technology (CYNK), the mysterious over-the-counter stock that at one point broke a $6 billion market cap, dropped roughly 80 percent in its first trades after a Securities and Exchange Commission halt.
The SEC halted CYNK for two weeks following a massive rise in the stock's value -- it had been worth only a few cents per share in June, but it jumped above $21 on July 10. The Belize-based CYNK Technology supposedly operates a social networking site, but filings indicate it only has one employee and virtually no assets.
Experts told CNBC the week of the SEC halt that they expected CYNK to fall precipitously after reopening, and its first day of trading is proving those predictions correct. When it was halted, the stock was worth just less than $14 per share, and is now below $3 a share after briefly hovering around $5 earlier Friday morning.
An OTC Markets spokeswoman told Reuters that CYNK's shares were not trading on its platform, but were occurring over the phone.
Earlier this week Reuters reported that OTC's CEO did not expect CYNK to trade on its platform at all after reopening, as no brokerages would file the required paperwork for the stock to trade on their exchanges.
An SEC spokesman said that the organization cannot comment on the status of a company after a suspension period ends, citing an online explanation of the process. That document notes that broker-dealers may not solicit investors to trade the previously suspended OTC stock until they satisfy several regulatory requirements.
The SEC warned, however, that "unsolicited" trading may occur after a reopening -- as CYNK is now seeing -- but "even though such trading is allowed, it can be very risky for investors without current and reliable information about the company."
B. O'Kane/Alamy
Investors got some bad news about the American shopper on Friday, driving down stocks and sending the Dow Jones industrial average to a loss for the week.
Two major U.S. companies -- the retail giant Amazon (AMZN) and the credit card processor Visa (V) -- both said that the second half of the year was looking more troubled than originally expected. The cautious outlook from two companies so heavily exposed to consumer spending spooked investors, causing the stock market to fall at the open and remain lower throughout the day.
"Visa put a lot of caution into the market this morning," said Quincy Krosby, a market strategist at Prudential Financial.
The Dow Jones industrial average (^DJI) dropped 123.23 points, or 0.7 percent, to 16,960.57. It's the first time the Dow has closed below the psychologically notable 17,000-point mark since July 9.
The Standard & Poor's 500 (^GPSC) fell 9.64 points, or 0.5 percent, to 1,978.34 and the Nasdaq composite (^IXIC) fell 22.54 points, or 0.5 percent, to 4,449.56.
With Friday's selling, the Dow fell 0.8 percent this week. The S&P 500 closed basically unchanged and the Nasdaq rose 0.4 percent this week.
Visa was the biggest decliner among the blue chips, falling $7.97, or 3.6 percent, to $214.77. The credit card processor reported an 11 percent rise in quarterly profit but cut its full-year forecast on concerns about growth overseas.
Because the Dow is a price-weighted index, and Visa is the most expensive stock in the Dow, Visa was having an outsized impact on it. Roughly 60 points of the Dow's decline can be attributed to Visa.
Investors have closely watched Visa ever since the company went public in 2008. Credit cards that use Visa's payment system are in nearly person's pocket, and each time a consumer buys a product with a Visa card the company takes a small percentage.
To see Visa give a cautious outlook is worrisome, Krosby said.
"Visa represents the consumer and the consumer is one of the most important pieces for the future of this economic recovery," she said.
Amazon's quarterly results didn't help boost investor sentiment either.
Amazon's stock slumped 10 percent after the online retail giant late Thursday posted a much wider loss than analysts had forecast, hit by expenses. The Seattle-based company is focused on spending the money it makes to expand into new areas and products, including a smartphone, the Fire, which starts selling Friday.
Amazon fell $36.60 to close at $324.01, the biggest decliner in the S&P 500 index.
Investors retreated from riskier stocks and moved into traditional havens at times of uncertainty: bonds and gold. The yield on the 10-year Treasury note eased to 2.47 percent from 2.50 percent late Thursday as demand for the government bond rose. Gold climbed $12.50, or 1 percent, to $1,303.30 an ounce
Despite the disappointing news from those consumer-focused companies, corporate earnings from the latest quarter have been solid. Of the 230 companies that have reported so far, 76 percent have beaten profit expectations and 67 percent have beaten sales expectations, according to FactSet. So far the S&P 500 is averaging a 6.7 percent earnings growth this quarter compared to a year ago. Investors had expected earnings to be up 4.9 percent when the results started to roll in at the beginning of July.
Even with Friday's declines, the stock market remains near all-time highs, and the S&P 500 closed at a record Thursday. That made some investors cautious.
"I continue to see the level of complacency in the [stock] market to be unnerving," Scott Clemons, chief investment strategist at Brown Brothers Harriman, which manages $25 billion in assets for private investors. "All of this geopolitical tension, the market trading near all-time highs, I think the market is at a critical state right now."
Clemons said he doesn't believe the market is poised for a major sell-off, but instead thinks investors should brace for more volatility and more heavy-handed reaction to disappointing earnings or data, like Friday's Amazon and Visa results.
In other company news:
o. Starbucks (SBUX) fell $1.71, or 2 percent, to $78.74despite the company reporting a profit that came in above analysts' expectations. The company also raised its full-year profit forecast.
o. El Pollo Loco surged $9.03, or 60 percent, to $24.03 on its first day of trading in the public market. The grilled chicken restaurant chain priced its shares at $15 per share late Thursday. .
What to watch Monday:
The National Association of Realtors releases its pending home sales index for June at 10 a.m. Eastern time.
The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in the region at 10:30 a.m. Eastern time.
These major companies are scheduled to release quarterly financial statements:
We found creative ways for you to conquer your cable frustrations, which will allow you to rest easy while you enjoy your time in front of the television.
Getty ImagesEarly retirement typically requires that you start saving at a young age.By Joe Udo
Early retirement is a dream for many employees toiling away at dissatisfactory jobs. But that doesn't mean these workers are planning their escape. The 2014 Retirement Confidence Survey by the Employee Benefit Research Institute found that half of all workers have less than $10,000 saved for retirement. That's not enough to retire at a normal age and makes early retirement an impossible dream. Here's why retirement in your 50s or earlier is out of reach for most people:
Spend too much money. The American consumer lifestyle dictates that we buy a lot of depreciating junk. Almost every consumer item loses its value over time. A $1,500 60-inch smart HDTV will be worth nothing in just a few years. A new car loses value moments after it's driven off the lot and about 20 percent after the first year. That's a lot of loss for the new car smell. We think of these things as assets, but they are just sitting around depreciating.
Most of us think it is fine to spend money because we work hard for it and there will always be another paycheck. This is a huge barrier to early retirement. If you want to retire early, you need to plan for the day that the paycheck stops coming in. Buying less stuff and getting rid of unnecessary services is a good start.
Didn't start saving early. I am forever grateful to my dad who convinced me to start saving for retirement as soon as I started working. After a few years, I maxed out my 401(k) and I've been adding to my retirement fund ever since. Time is your best friend if you start investing early. Compound interest will make a huge difference over 40 years. If you invested $5,000 per year from age 25 to 35 and then stopped, you'll have over $600,000 by the time you turn 65, assuming 7 percent annual gains. Putting off retirement investing until you're in your 30s will drastically decrease your chances of achieving an early retirement.
Didn't save enough. Saving early is great, but you also need to save more. Financial planners recommend saving 10 percent of your salary, but that's not nearly enough for early retirement. The earlier you retire, the less time you have to save and the more time you will need your nest egg to last. If you want to retire early, you need to save much more than 10 percent. This is where spending less money helps. Reducing your expenses will enable you to save more and compounding will work in your favor.
Didn't invest consistently. Individual investors are notoriously bad at timing the stock market. Many investors sold off their stock investments during the 2007 and 2008 financial crisis and missed much of the recovery. If you're a genius investor who can consistently beat the stock market index, then by all means do it. However, if you're a regular investor, it's better to figure out a target asset allocation that you're comfortable with and invest with low cost index funds. Keep investing through the downturns and you won't miss out on the recovery. The bear years are great buying opportunities for young investors.
Have a large family. Kids are another huge obstacle to early retirement. The USDA calculated it will cost almost $250,000 to raise a child from birth to age 18. This doesn't even include college, which will probably cost more than that in 18 years. It costs a lot to raise a family, so if you have three or four kids, then early retirement might be out of reach.
Early retirement is a possibility for some savers, but it won't be easy to get there. Keeping lifestyle inflation down is very difficult in our culture, but once you figure out to buy Apple (AAPL) stock instead of the latest iPhone, you'll be well on your way to early retirement. It's best to buy income generating assets and minimize depreciating consumer goods as much as possible. Living below your means and investing consistently for many years can bring you closer to your desired early retirement.
Joe Udo blogs at Retire By 40 where he writes about passive income, frugal living, retirement investing and the challenges of early retirement. He recently left his corporate job to be a stay at home dad and blogger and is having the time of his life.
While all eyes will be on the upcoming July unemployment and payrolls on Friday, August 1, the other big economic report during the week will of course be second-quarter Gross Domestic Product (GDP). We would remind our readers that economists and government watch groups have all been calling for a snap back recovery in GDP after the -2.9% drop in the first quarter of 2014.
The question to ask is if that GDP snap back thesis is going to hold up or not. Our assessment was that the Durable Goods report for June just saved the GDP report. That being said, two major brokerage powerhouses downgraded their estimates of GDP on Friday after the Durable Goods report — Goldman Sachs lowered its GDP forecast to 3.0% from 3.1% and Morgan Stanley lowered its estimate to 3.2% from 3.3%.
When economists downgrade GDP that is bad, right? Well, our take is that the Durable Goods report still saved GDP for the second quarter. The core order reading for nondefense capital goods, ex-aircraft was up 1.4% in June after having been negative in April and May. Consider this as well:
Durable Goods rose by 0.7% in June on the headline report — May was down 0.9%, and April was up 0.8%.
The ex-Transportation Durable Goods was up 0.8% — after being effectively flat in May and up by 0.4% in April.
What you also have to consider is that inflationary readings also started to tick up in June. This may be abated if oil and food prices fall, but the numbers were a bit heated. And the last reading on retail sales turned out to not be the most GDP-friendly when you consider that around 70% of GDP is measured under consumer spending.
Also, the Chicago Federal National Activity Index showed that growth around the nation decelerated in June. The Beige Book showed the trajectory of growth in each region. America is still awash in capacity as well, as capacity utilization remains stubbornly under the 80% mark.
Bloomberg has the consensus GDP reading at 3.1% for the second-quarter. That consensus drops down to 2.0% if you use the price index. Our estimate (actually a guesstimate) is that GDP will have grown closer to 2.5% in the second quarter, with the price component likely short of the 2.0% consensus.
Goldman Sachs and Morgan Stanley lowering their estimates really is of no concern here as far as we are concerned — we figured they were too high anyhow. The question should really be centered around whether 3% is a realistic target when you had sub-optimal readings throughout the quarter after a -2.9% final drop in GDP in the first quarter. Our guess is that it is not.
Stay tuned, we will all get to know the verdict on Wednesday.
Charles Dharapak/AP
Here's our round-up of this week's most-shared stories. From Social Security's $300 million flop to shark sightings off Cape Cod to our contributor Brian Lund's piece on how buying a home can be the worst investment you make, kick up your feet and have a read of our popular stories of the week.
Danger could be lurking in your life, and it could be a lot closer than you might realize.
Hundreds of products are recalled every year, and it isn't unusual for less than 5 percent to be returned or repaired following an official announcement by the U.S. Consumer Product Safety Commission. That means even though a product that might have caused deaths or started fires, consumers either ignored the warning or weren't aware of it.
"We know most recalled products, no matter how dangerous, remain in homes," said Nancy Cowles, executive director for the safety advocacy group Kids in Danger.
Consumers have gotten somewhat tone-deaf to recall announcements, and it is fairly common to decide that what happened to someone else won't happen in your home. And yard sales spread recalled products to consumers who were unaware there was a problem in the first place.
Spread the Word
"We often say newer is better, because older products can pose safety risks that are forgotten and never addressed," commission spokesman Scott Wolfson told DailyFinance. "Before you set up a yard sale or an online auction, take a few moments and go on SaferProducts.gov to see if your products were recalled."
Government officials and safety advocates say they hope consumers pay more attention to recalls and don't pass along dangerous products by selling them or giving them away.
"When we talk to consumers in the secondhand marketplace about a dangerous product they pulled out of the attic to sell," Wolfson said, "they often say: 'I didn't know.' We want consumers to know about recalls and to know that the safety standards for children's products are much stronger today."
Here are seven recalled products that are believed to be in millions of homes across the country. Is yours one of them?
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Whether you get your financial tips by asking friends and family or checking out library books, attending seminars or searching online (at sites other than DailyFinance), impractical pieces of advice abound.
Too many personal finance experts tend to populate their cable appearances, books, columns and blogs with the same simple tidbits. But some of that common advice is also ... useless. For each of these three cliched tips, let's look at some better alternatives.
1. In Debt? Cut Up Your Credit Cards
Certain financial gurus advise people in debt to cut up all their plastic and consider using credit cards the eighth deadly sin. Here's some advice: don't.
People land in debt for various reasons, and some -- like student loans -- don't have anything to do with credit cards.
If being a unable to pass up a sale or discount clothing bin is your trigger for getting into massive amounts of debt, then put your cards in a lock box and back away. If you fell into some bad luck and used your credit card for an emergency, consider a balance transfer.
But just because someone is in debt and wants to get out of it doesn't mean they're going to stop spending money entirely. People still need to eat, gas up the car, and deal with the occasional unexpected expense.
Some may counter that it's best to use a debit card, but consider the ramifications of debit card fraud. A compromised debit card gives thieves direct access to your bank account. While most banks will cover the majority of money taken from your bank account, it's an extreme hassle to deal with. When a credit card is compromised, the issuer typically reacts quickly -- possibly even before the customer notices -- and offers 100 percent fraud protection. A credit card should be used for all online purchases, and you need one to rent a car -- otherwise you'll get a hard inquiry on your credit report for using a debit card.
It also helps to have a low-interest credit card for emergencies. Think of it as a fire extinguisher housed in a glass case. You don't want to break that glass unless you really, really need it. But you do want the fire extinguisher to be there.
2. Have a 20 Percent Buffer (or Any Buffer) in Checking
Undoubtedly, it's preferably to have a buffer in your checking account to avoid overdraft fees, but two types of situations cause overdraft fees.
Person A is forgetful, forgets a recurring charge or neglects to check his or her balance before making a purchase.
Person B uses overdrafts as a form of short-term borrowing because he or she does not have enough money to get by without going overdraft.
Person B doesn't need to be lectured about keeping a buffer in his or her checking account.
It's simple for personal finance experts, writers and advisers to recommend tightening up the purse strings, doubling down on paying off debt, and moving out of the paycheck-to-paycheck lifestyle.
Those looking to avoid overdraft fees should evaluate their banking products.
But those who don't have assets and who struggle each month to make ends meet don't need to hear people harping about avoiding overdraft fees by "just saving a little bit." Every little bit counts for them.
Investigate and find out if your bank reorders your transactions. Some banks will change the order in which they process your transactions at the end of the day, so they can maximize the number of overdraft fees they charge.
Internet-only banks are revolutionizing how people can interact with their banks and their own money. Internet-only banks often offer higher interest rates, don't charge monthly maintenance fees and reimburse customers for out-of-network ATM fees. For example, Simple, an Internet-only bank based out of Portland, Oregon, doesn't charge overdraft fees.
Ally Bank (ALLY) offers real overdraft protection by linking a savings account to checking. If you overdraft, it will take $100 out of your savings to cover your overdraft -- free of charge.
Americans who use overdraft fees as a form of short-term lending may want to set up a line of credit with a credit union or have a low-interest credit card for emergencies.
3. Skip That Latte!
Many years ago, David Bach created a unifying mantra for frugalistas and personal finance enthusiasts. The "latte factor" was that you could save big by cutting back on small things.
Bach's deeper concept -- that each individual needs to identify his or her latte factor -- got lost in the battle cries, with many people crusade specifically against your daily cup of coffee.
Yes, people should be aware of leaks in their budget. But everyone's budget looks different. If "Summer" buys a coffee each day, but rarely buys new clothing, and trims her budget by cutting cable and brown-bagging it to work, then leave her alone about her caffeine habit.
People are allowed to live a little when it comes to their personal finances, whether your little splurge is organic food, name-brand snacks or triple-ply toilet paper. Most people, except for maybe those on TLC's "Extreme Cheapskates," could find more ways to trim the budget.
But why keep trimming? It's important to save for the future, but it's also imperative to enjoy life in the present. Personal finance shouldn't be a culture of constant denial.
Create a budget, figure out if you can work in an indulgence or two, and don't live in complete deprivation
For those working to dig out of seemingly insurmountable debt, then yes, it may be time to identify and limit your latte factor.
Decide What's Right for You
Personal finance experts, bloggers, reporters, advisers are well intentioned in their advice. Certain personal finance idols truly believe everyone should use cash, while others hawk prepaid debit cards claiming they're a great tool. Okay, maybe sometimes personal finance experts are a bit self-serving and not looking out for your best interests. Just keep in mind, personal finance is indeed personal. A generic piece of advice, like keep a 20 percent buffer in your checking account to avoid overdrafts, may not be helpful in your personal situation.
Erin Lowry writes for DailyFinance on issues relating to millennials, money and personal finance. She is the blogger behind Broke Millennial, where her sarcastic sense of humor entertains and educates her peers. She is also the brand and content manager for MagnifyMoney.
As a divorce financial adviser, I'm often brought in to work with clients who are still going through a split, but I'm just as often brought in afterward. Newly single clients are typically concerned about their finances and want to make sure they have enough for their immediate needs, and that they'll have enough when they retire. Even my very wealthy clients -- those with millions of dollars after a divorce -- have the same nagging questions and fears keeping them up at night.
Considering that many divorce proceedings last a year or longer, once the marital settlement agreement is reached, you may want to take a long break from paperwork, lawyers or even thinking about your finances. That's a normal reaction. But resist it: There are some things you need to examine soon to make sure you're protected and on the right track financially.
So go through this checklist to be sure nothing has slipped through the cracks. Once you're done, you'll have financial peace of mind -- and you'll be able to sleep like a baby.
Robert Pagliarini is a best-selling author and wealth manager who focuses on sudden wealth recipients. Connect with him on Twitter at@rpagliarini.
Steve Helber/AP
From the company that made tweeting a global phenomenon reporting quarterly results to a controversial distributor of wellness products hoping to get the last laugh, here are some of the things that will help shape the week that lies ahead on Wall Street.
Monday -- Herbalife May Fight Back
There's no love lost between hedge fund manager Bill Ackman and Herbalife (HLF). Ackman shorted shares of the distributor of weight loss and nutritional products in late 2012, and he's been vocal about his reasons.
Ackman feels that Herbalife is a pyramid scheme that pays its distributors more for recruiting more distributors than for actually selling its wares. Last week, Ackman promised that he would tear Herbalife to shreds with the biggest presentation of his life. Instead, the stock soared after he made his presentation, and Herbalife will have the perfect opportunity to fire back at Ackman on Monday afternoon when it reports quarterly results.
Tuesday -- Home, Tweet Home
One of last year's most prolific initial public offerings was Twitter (TWTR). Despite the limitations of keeping posts at 140 characters or less, Twitter has quickly become an indispensable promotional tool for celebrities, brand managers and food truck owners.
Twitter reports on Tuesday, and it has plenty to prove. It was hot last November, priced at $26 for the IPO and trading at nearly $75 a few weeks later. The stock has gone on to shed roughly half of its value since its December peak. Investors are concerned about Twitter's ability to monetize its traffic without sacrificing popularity.
Wednesday -- Cry for Yelp
Yelp (YELP) went public two years ago, and while the reviews website has held up better than Twitter, it too has seen its shares under pressure since peaking a few months ago.
Yelp is often brought up as a buyout candidate, and it's easy to see the allure. Yelp is the undisputed champ in collecting local venue reviews, and that's magnetic to search giants wanting some more skin in the local online advertising.
Yelp reports on Wednesday, and while analysts see revenue soaring 59 percent they also see Yelp checking in with another quarterly deficit. Sooner or later, Yelp's strong revenue gains will have to translate into profitability that the market can sink its teeth into.
Thursday -- The Mood Is Electric
Tesla Motors (TSLA) has been one of the market's most dynamic stocks, soaring on the prospects of its high-end electric sedan. Tesla's Model S vehicle was always the envy of the automotive market, but the hype is even louder in the marketplace after seeing its stock more than quadruple last year.
There's more to Tesla than its Model S sedan. Next year it will introduce the Model X crossover, and by 2017 we should see the Model III that will be priced more aggressively. Tesla reports on Thursday.
Friday -- Rated PG
The final trading day of the week is typically quiet on the financial news front, but that's not necessarily the case during earnings season. Procter & Gamble (PG) -- the company behind Pampers diapers, Crest toothpaste, Duracell batteries and other household staples -- checks in with fresh numbers on Friday morning.
Procter & Gamble is popular with income investors. It has an impressive streak going with 58 consecutive years of dividend hikes. It will naturally have to keep growing its profitability to keep its payouts climbing, and that's just what the pros see happening on Friday.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble, Tesla Motors, Twitter and Yelp. The Motley Fool owns shares of Tesla Motors and has the following options: long January 2016 $57 calls on Herbalife.
Kiyoshi Ota/Bloomberg via Getty ImagesBy Yoko Kubota
YOKOHAMA, Japan -- Nissan Motor's operating profit rose a higher-than-expected 13.4 percent in the April-June quarter on improved sales in the United States and China, its two largest markets, following a change in senior management overseeing U.S. operations.
Nissan (NSANY) said Monday its first-quarter operating profit was 122.6 billion yen ($1.20 billion), exceeding the 109.1 billion yen mean estimate of 12 analysts polled by Thomson Reuters I/B/E/S.
It stuck with an annual operating profit forecast of 535 billion yen for the financial year ending in March 2015.
Jose Munoz took over the company's struggling North American operations in January as it aims to boost its U.S. market share to 10 percent from the current 8.6 percent.
Nissan's April-June vehicle sales grew 14.1 percent in the United States to around 350,000 vehicles in the quarter, while globally they rose 6 percent to 1.24 million.
Nissan's average incentive offering per vehicle was $2,323 for April-June, according to data from TrueCar, the highest among Japanese carmakers, although it has been declining over the past few months.
"Nissan is well placed to deliver on its outlook given our continued offensive along with measures to enhance competitiveness, build market share and the ongoing benefits of our alliance strategy," Nissan Chief Executive Officer Carlos Ghosn said in a statement.
Last financial year, Nissan posted a 4.8 percent operating profit margin, the worst among its Japanese peers, squeezed by the cost of a rapid expansion drive aimed at lifting its global market share.
Nissan's shares ended 0.8 percent higher Monday ahead of the earnings release, compared with a 0.5 percent rise in Tokyo's benchmark Nikkei average. Japan's second-largest automaker is up 13 percent so far this year, outperforming the benchmark's 5 percent drop.
NEW YORK -- The fight for penny pinchers is intensifying.
Dollar Tree (DLTR) said Monday it is buying rival discounter Family Dollar (FDO) for $8.5 billion, significantly broadening its reach as it looks to fend off Walmart, which has been stepping up its courtship of lower-income customers
The deal makes Dollar Tree the biggest player in the dollar store segment, with its more than 13,000 combined locations eclipsing current leader Dollar General (DG), which has about 11,300.
Dollar stores grew during the recession as people across income groups searched for cheaper options. To attract a broader array of customers, they also expanded their offerings to include more groceries and brand-name products, instead of just the party favors and other knickknacks people often associated with them.
More recently, however, sales at dollar stores have been suffering because the lower-income customers who go to them are facing persistent job instability and slow wage growth in the aftermath of the recession. Walmart Stores (WMT) and Kroger (KR) also have been opening smaller store formats to directly compete with dollar stores. During its current fiscal year, Walmart plans to open 270 to 300 smaller outlets designed to cater to shoppers looking for more convenience.
Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, said because the Dollar Tree deal will allow the company to lower expenses by merging its operations, it will ultimately be able to lower prices to better compete with Walmart.
"Now they're going to take the fight back to Walmart," Sozzi said.
The deal also gives Dollar Tree more flexibility.
Dollar Tree is true to its name, with everything in its stores costing just a buck. The fixed pricing has helped attract more customers and boosted sales, but it also puts the company in a tough spot as inflation pushes up its costs and pressures profit margins. Family Dollar is far more flexible in its pricing, which allows it to sell a greater variety of items, including Kraft cheese and Tide laundry soap, at various price points.
Still, Family Dollar, which has more than 8,000 locations, has been shuttering stores and cutting prices in hopes of boosting its financial performance. Last month, investor Carl Icahn urged the company to put itself up for sale. Icahn has built up a stake in the company of more than 9 percent, according to regulatory filings. Based on his purchase price at the time, he stands to make nearly $200 million from the deal.
In a statement, Icahn said he was "extremely pleased" with Dollar Tree's plans, but that he still thinks there are "a handful of potential buyers who could realize greater synergies" with Family Dollar.
The companies didn't say if any Dollar Tree or Family Dollar stores would be closed. Dollar Tree, which has about 5,000 locations, will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store banners. It will keep the Family Dollar brand as well, with Chairman and CEO Howard Levine reporting to Sasser.
Representatives for Walmart and Kroger weren't immediately available for comment. A representative for Dollar General, which last year reported sales growth of 9 percent, declined to comment.
Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 a share, which is an approximately 23 percent premium to Family Dollar's Friday closing price of $60.66.
Including debt and other costs, the companies estimate the deal to be worth more than $9 billion.
Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree's outstanding common shares at closing. Dollar Tree plans to finance the deal with available cash, bank debt and bonds.
The boards of both companies unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.
Shares of Family Dollar Stores, which is based in Charlotte, North Carolina, surged $14.89 to $75.55 in premarket trading. The record high during regular trading is $75.29.
Shares of Dollar Tree, based in Chesapeake, Virginia, jumped 10 percent, or $5.50 to $59.72. The all-time high for that stock is $60.19.
Primarily, the deal gives Dollar Tree greater diversity in pricing and product mix. Here's a snapshot of the two chains:
Dollar Tree
Founded in 1986.
About 5,000 locations.
True to its name, everything in the store costs a buck.
About half of the products are "consumables," or cereal, potato chips and sodas.
Stores are about 8,000 to 10,000 square feet and concentrated in suburban areas.
Target customer is a "broad range of middle America."
Family Dollar
Founded in 1959.
About 8,000 locations.
Prices vary, with only 13 percent of sales coming from items that cost $1 or less. Most items are less than $10.
About 72 percent of products are consumables, 10 percent home products, 10 percent seasonal and electronics, and 8 percent apparel and accessories
Stores are about 7,500 to 9,500 square feet, with a concentration in urban and rural areas.
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SPRINGDALE, Ark. -- Tyson Foods plans to sell its poultry businesses in Mexico and Brazil for $575 million in cash to help pay debt from its recently announced acquisition of Hillshire Brands.
The Springdale, Arkansas, meat processor said Monday that it still plans to expand its international operations, especially in Asia, but the businesses it will sell didn't have the scale to gain leading positions in their markets. Tyson made the announcement the same day it reported fiscal third-quarter earnings that climbed more than 4 percent but missed analyst expectations.
Tyson Foods (TSN) said it expects the sale of its Mexico and Brazil operations to JBS will be completed by the end of the year. JBS is the parent of JBS USA Holdings, which owns Pilgrim's Pride (PPC). Tyson's Mexican business will be acquired through Pilgrim's Pride.
Tyson's Mexico and Brazil operations employ more than 10,000 people combined. Tyson said the new owners expect to maintain all operations and labor contracts in both countries.
Also on Monday, Tyson said its third-quarter earnings climbed to $260 million, or 73 cents a share, from $249 million, or 68 cents a share, in the same quarter a year earlier. Adjusted earnings totaled 75 cents a share, which missed average analyst expectations of 83 cents a share, according to Zacks Investment Research.
Revenue climbed 11 percent to $9.68 billion.
Tyson, which employs about 115,000 people globally, said last week it would close three U.S. plants that have struggled financially. Those plants are located in Cherokee, Iowa; Buffalo, New York; and Santa Teresa, New Mexico. They employ a total of 950 workers.
The company said the action will enable it to move some of the operations and equipment at the plants to other, more cost-efficient Tyson plants.
Earlier this month, it signed a $7.75 billion deal to buy Hillshire Brands Co., the maker of Jimmy Dean sausages and Ball Park hot dogs.
Company shares slipped 53 cents, or 1.3 percent, to $39.01 in premarket trading Monday about an hour and a half before the market opening. The stock had increased $6.08, or 18 percent, to $39.54 since the beginning of the year through Friday's close, while the Standard & Poor's 500 index has increased 7 percent.
The average price of a gallon of gasoline fell by 9 cents in the past two weeks, a sharp drop due to wholesale price cuts at refiners, according to the Lundberg survey released Sunday.
Prices fell to an average of $3.58 a gallon for regular grade gasoline, according to the survey conducted July 25. It was the first big drop in the year, and comes after twelve months of relative stability at the pumps, survey publisher Trilby Lundberg said.
"There is an abundance of gasoline, inventories are high, and refiners are cutting to chase those summer sales," Lundberg said. "We can expect gas prices to keep migrating down, though maybe not to this extent."
The average price for gasoline is now about 10 cents lower than a year ago. The recent drop came despite a rise in the price of global crude oil.
San Francisco had the highest price within the survey area at $4.03 a gallon for regular while the lowest price was in Tulsa where regular grade cost $3.23 a gallon.
Tim Boyle/Bloomberg via Getty ImagesBy MAE ANDERSON
NEW YORK -- Zillow and Trulia, two companies that changed the way people shop for homes, are combining.
Real estate website operator Zillow (Z) is buying its rival in a $3.5 billion deal that will make the biggest player in the online real estate information market.
Zillow will also become king of real estate listings available on smartphones and tablets -- the fastest growing area for listings. Both Zillow and Trulia (TRLA) were founded nearly a decade ago and have capitalized on Americans' increasing preference for researching purchases, including homes, online, rather than relying solely on a real estate agent.
"It's a very sound business move by Zillow. They wiped out their closest competitor," said Benchmark analyst Daniel Kurnos.
According to Benchmark estimates, Zillow and Trulia are No. 1 and 2 in the online real estate market, followed by No. 3 Move Zillow reported nearly 83 million monthly unique visitors in June. Trulia reported 54 million.
"We're moving away from word of mouth, or calling an agent to try to find a home," Kurnos said. "Now people realize, 'Hey, I can go look for houses online, and use the Internet to start searching for a home.'"
Zillow, which debuted in late 2004, became well known for its "Zestimate" housing price estimate for 100 million homes nationwide. The number is based on geographic data, user-submitted information and public records. Zillow says the "Zestimate" has a 6.9 percent median error rate, and should be used as a starting point in determining a home's value.
Both Zillow, which went public in 2011 and Trulia, which had its stock market debut in 2012, offer similar information like neighborhood school and crime reports and mortgage calculators.
Both Zillow and San Francisco-based Trulia generate revenue through advertising and subscription software and services sold to real estate agents.
Trulia shareholders will receive 0.444 shares of Zillow common stock for each share they hold, and will own approximately 33 percent of the combined company. Zillow shareholders will receive one comparable share of the combined company and own the other two-thirds of the business.
The combined company will keep both the Trulia and Zillow brands.
The companies said that there is limited consumer overlap of their brands, as about half of Trulia.com's monthly visitors don't visit Zillow.com.
It's not Zillow's first expansion through acquisition. The company bought New York City-focused real estate website StreetEasy in 2013 for $50 million.
Zillow, based in Seattle, plans to save $100 million in cost cutting once the Trulia purchase is complete.
Trulia CEO Pete Flint will stay in his post and join the board of the combined business. He will report to Zillow CEO Spencer Rascoff. Another Trulia director will join the combined company's board after the transaction is finalized.
Both companies' boards approved the deal. Both companies' shareholders still must approve it. The transaction is targeted to close next year.
Shares of Zillow fell $3.97, or 2.5 percent to $154.89 in midday trading. Shares of Trulia jumped $6.84, or 12 percent, to $63.19.
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When it comes to your income, you probably know that your ability to earn a paycheck is your most valuable asset. Although we talk about how much to save and what to do with the portion of your income you keep, we rarely discuss how to handle this asset as a whole. So consider these six steps.
1. Invest in It
Your human capital is the total monetary value of your skill-set, expertise, education and ability to interact and connect with others. The more you have of each, the higher the value you can typically command. To invest in your income, advance your education and knowledge. What skills or certifications could you acquire to enhance your value or diversify your experience? Are there conferences or training events that you could attend? Are you aware of trends, revenue sources and markets for your company or product? Do you know your company's competitors? Spend some time, effort and a bit of money investing in your personal and professional growth.
2. Protect It
Even though your ability to earn an income generates significant value, many people don't protect that ability. It's not as risky as jumping out of an airplane without a parachute, but it's not good to be walking around without protection. As a financial planner, time and time again I see gaps in coverage, no coverage or employees not taking full advantage of employer-provided benefits. According to the Council for Disability Awareness, a nonprofit dedicated to educating Americans about the risks of experiencing an income-interrupting illness or injury, just over one in four of today's 20-year-olds will become disabled before they retire. Many people perceive disabilities to be caused by accidents, but in reality back injuries, cancer, heart disease and other illnesses cause the majority of long-term absences from work. How will you and your loved ones replace your income if something happened to you? Would you be prepared for a reduction in lifestyle and savings? Consider ways to protect your income through disability insurance and life insurance.
3. Track It
At the end of each year, document your compensation and your position. Compare this number to previous years and to similar positions in your city, as listed on websites such as Payscale or Glassdoor. Documenting your pay will help to pinpoint times when you may be underpaid and will give you discussion points for performance reviews.
4. Manage It
Having an established spending plan to help you manage inflow and outflow will allow you to allocate funds toward both your present and future goals. Be cautious of anything you're spending beyond your means and use credit wisely, since anything you're purchasing with credit today is being deducted from future income. Setting yourself up to manage your income successfully will ensure your credit score stays in a good range and can save you money down the road in lower interest rates.
5. Grow It
Growing your income can happen in a variety of forms.
Learn what it takes to advance your salary within your current position or company.
If you are capped out in your position or company, establish a side hustle. Can you offer services as a consultant or personal coach? Do you have a skill that will allow you to sell a service or product online on a site like Etsy?
Save for your future and stock funds into retirement plans. The earlier you start saving, the better, because your money will have more time to take advantage of compounding interest, resulting in more funds for your future self.
6. Keep It
Last but not least, one important step in optimizing your income is to hold onto it. If you're spending all you're bringing in each month, chances are you're not setting and working toward goals for yourself and you're also not setting yourself up for a successful financial future. Make sure you're keeping money for yourself in a rainy day fund (three to six months of expenses set aside), for your retirement and for other short- and long-term goals along the way. Pay yourself first.
WASHINGTON -- Fewer Americans signed contracts to buy homes in June, as the real estate market appears to have cooled off this summer.
The National Association of Realtors said Monday that its seasonally adjusted pending home sales index slipped 1.1 percent to 102.7 last month. The index remains 7.3 percent below its level a year ago.
Sales have been slowed by a mix of meager wage growth, rising home prices, and mortgage rates that rose steadily through the end of last year.
Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.
Signed contracts in June fell in the Northeast and South. They rose slightly in the Midwest and West. Pending sales in all four U.S. regions are below last year's pace.
Home sales had been improving through the middle of 2013, only to stumble over the past 12 months. Buying has decelerated despite a recent decline in mortgage rates and home prices increasing at a slower rate than last year.
Sales were initially disrupted by harsh winter weather, but the summer slowdown suggests that financial pressures are now keeping would-be buyers on the sidelines.
"The latest decline raises questions about the housing market strength after the weather-related rebound is behind us," said Yelena Shulyatyeva, an analyst at BNP Paribas. "Housing will remain an area of concern" for Federal Reserve Chair Janet Yellen.
New home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said last week.
The Realtors recently reported that sales of existing homes increased 2.6 percent in June to a seasonally adjusted annual rate of 5.04 million homes. It marked the first time that sales have been above the 5 million-mark since October, yet the pace of buying remained below last year's level of 5.1 million.
Economists generally consider annual home sales of 5.5 million to be consistent with a healthy housing market.
Still, there are indications that sales could pick up.
Along with the arrival of spring, average mortgage rates have dropped to 4.13 percent, down from a 52-week high of 4.58 percent, according to Freddie Mac.
The rate of average price gains has slowed to 4.3 percent year-over-year, according to the Realtors. That's down from gains in the double digits. But wage growth has barely kept pace with inflation, eating into how much income people have to spend and save for down payments.
Michael Kovac/Kmart/Getty ImagesAdam Levine has a new fashion line at Kmart.
In "Rain Man," autistic savant Raymond Babbitt (Dustin Hoffman) said it best in 1988: "Kmart sucks." Almost a quarter century later, that catchphrase rings true as Kmart closes more stores, lets go more employees and loses more customers. Kmart and Sears are both part of Sears Holdings (SHLD). It was brought out of its 2002 bankruptcy by hedge fund whiz Eddie Lampert with the promise of a turnaround,
The Writing on the Walmart
The first Kmart -- founded in 1962, originally part of the Kresge chain -- preceded the first Walmart (WMT) by only four months, its death sentence signed at its birth. In the 1960s, Kmart grew to 600 stores, but it has since barely doubled that number. Walmart, meanwhile, has grown to 11,000 stores in 27 countries by perfecting its aggressive strategy of negotiating its suppliers down to bare-bone margins to get those everyday low prices.
Kmart limps along, the Jonah of discount chains, never earning the status of J.C. Penney (JCP), Target (TGT), Kohl's (KSS), Macy's (M) and Sears. Those blue light specials began in 1965 and have continued on and off, but Kmart has still struggled. It remains one of the larger U.S. mass market retail chains.
Last holiday season Kmart sought customers but got controversy instead with a racy holiday ad for its private label Joe Boxer underwear. It has tried other similarly edgy ads and fashion lines by celebrities Adam Levine and Nicki Minaj, but America's not buying it. At least not young or rich America. Of these big boxes, Kmart has the oldest and poorest trending shoppers.
And while J.C. Penney spent a fortune upgrading its stores under CEO Ron Johnson, Kmart started looking down at heel in the early '80s, prompting the "Rain Man" quote. Much like shopping at Sears, the attitude is still careworn.
A recent Friday afternoon visit to one Kmart -- in an upscale neotraditional town where townhouses rent for $3,000 -- revealed rusty shelving and fixtures and a rundown feel, especially in comparison to J.C. Penney or Kohl's. Salesclerks outnumbered customers by almost two to one, but not once was I asked if I needed help. Although clothes littered the floors, sales associates were hanging out or aimlessly wandering. In one hour, I saw one lone employee straightening shoes. And why should they bust their butts when annually hundreds see their jobs disappear?
Shop Their Way? Or No Way?
More and more, Kmart and Sears are depending on their joint Shop Your Way shopper loyalty program and online and mobile sales, offering in-store pickup of items bought online at either website. According to the recent chairman's letter to shareholders, Shop Your Way comprises 72 percent of sales at Sears and Kmart in the fourth quarter of 2013.
The company plans to phase out promotional pricing, like those blue light specials, in favor of solely rewarding loyalty points. J.C. Penney learned the hard way that its middle income shoppers love coupons and promotions, so Kmart is taking a decided risk with this strategy. (Kohl's has its coupons, and Walmart its everyday low pricing.)
Kmart depends highly on some Sears brands -- like Craftsman, Diehard and Kenmore -- to bring in customers. But it just can't compete with the private label brand king Walmart or Target with its more popular and trendy private label brands.
Maybe Sears Holdings doesn't want to throw good money after bad in Kmart's case. Lampert may boast in his blog about turnaround progress, but there is also a page on the corporate website dedicated to the sale and lease of store properties. After closing 172 stores in 2012, the company recently announced the closing of 80 stores this year. It didn't specify which were Kmarts but added there would likely be more closings of underperforming stores. That could be plenty, as its last earning release showed Kmart same-store sales were down 2.2 per cent, an improvement over the previous year's 4.6 percent, but the loss to Sears Holdings' shareholders in 2013 was a remarkable $1.4 billion.
Etailer Who Shall Not Be Named
Lampert admits in his blog that shopping behavior has changed thanks to an etailer who shall not be named (like Voldemort in the Harry Potter series), but it's obviously Amazon.com (AMZN). He also promises a rapid transition to a digital and social platform to service those Internet-savvy shoppers. Analysts hint more darkly that Kmart as a bricks-and-mortar shopping presence may sooner rather than later be as fictional as "Rain Man's" Oak Street Kmart in Cincinnati.
Walmart and Target have in-store pickup, flashy websites and apps, so whatever competitive advantage Kmart has seems to rest solely on the shoulders of its Shop Your Way members. Possibly, the Kmart blue light special may move to the virtual cloud, but Kmart as a physical retailer isn't long for this world.
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You may think Amazon.com (AMZN) and its online rivals have conquered the world of shopping, but a new survey shows that most consumers still prefer to shop in the real world.
In fact, nine out of 10 purchases by American consumers still take place within the four walls of a brick-and-mortar store.
That's one finding of the A.T. Kearney Omnichannel Shopping Preferences Study, which is based on a survey of the shopping preferences and behaviors of 2,500 consumers.
The study concludes that people just like to go out to shop: "Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases," the survey's authors write.
A Trend Across Every Demographic
The preference for brick-and-mortar shopping was clear across every demographic, from teens to millennials, Generation X, baby boomers and seniors. Ninety percent of respondents in every age group said they preferred to make their purchases in a real-world store
Behind the numbers, though, it's clear that the Internet has radically changed the experience of shopping. More than half of all respondents said they habitually use a combination of online sources and physical stores throughout the process of researching, selecting, buying and bringing home a product. Two-thirds of those who made a purchase online also used a physical store before or after clicking the "buy" button.
The authors conclude that the best of all stores has both a website and a physical location to serve customers. Some of the savviest online brands have already figured that out. They're opening showcases for their products in the nation's most fashion-conscious cities.
First Online, Now in the Real World
The Los Angeles Times reports that online beauty store Birchbox recently opened a storefront in New York's SoHo district, and men's fashion site Bonobos is open for business in Los Angeles. Swimwear e-tailer SwimSpot reported strong sales at its first temporary pop-up store and found new customers among women who wanted expert fitting advice. The hip fashion site Nasty Gal also has announced plans for a real-world store.
No one is suggesting that online retail is a passing fad. The latest forecast from eMarketer predicts that total e-commerce sales will hit $304.1 billion in 2014, an increase of 15.5 percent year over year. That still represents just 6.4 percent of total retail sales for the year.
The eMarketer report estimates that there are now 219.4 million Americans aged 14 and older, and 89.6 percent shopped online this year.
The report notes the same phenomenon reported in the Omnichannel study: Consumers are browsing both online and real-world sources before making a decision. To put it in current marketing lingo, they're both "webrooming" and "showrooming." That is, they're researching on the web and then heading out to the stores, or vice versa.
While all eyes will be on the upcoming July unemployment and payrolls on Friday, August 1, the other big economic report during the week will of course be second-quarter Gross Domestic Product (GDP). We would remind our readers that economists and government watch groups have all been calling for a snap back recovery in GDP after the -2.9% drop in the first quarter of 2014.
