Apple, which recently became the first company to reach a $2 trillion in market cap, said that it will execute a 4-for-1 stock split, meaning that investors will receive three additional shares for each one they own. The stock split will go into effect for existing investors on August 24th, 2020 and shares will start trading at the split-adjusted price on August 31st. 

A few weeks later, electric carmaker Tesla also said it will carry out a 5-for-1 stock split. This split means that investors will get four shares of Tesla stock for each one that they own. The split will go into effect for those who are already invested in Tesla on August 21, 2020. The stock will start trading at the split-adjusted price after August 31, 2020. 

Here’s how a stock split works, and what it means for investors.

How a stock split works

When a company decides to split its stock, it’s literally doing just that—breaking stocks into additional shares.

Public companies have a finite number of shares or a total number of shares that they can sell to their stockholders. A stock split increases the number of shares on the market by splitting the current outstanding shares into more shares.

When a company decides to split its stock, it will do so according to a ratio, expressed as X:1, or X for 1. If the ratio is 2:1, or 2-to-1, each share will split into two. 

A stock split reduces the value of each share. For example, in a 2 for 1 split, each share will be worth 50% of the original, single share’s value. But that doesn’t necessarily mean the investment loses value since the two new shares combined have equal value to the original share.

Typically, a company will split its stock when its share price has become so high that smaller investors can’t afford the price of a single share. Some companies today, for example, have stock prices in the hundreds, thousands, or even hundreds of thousands of dollars per share. By increasing the number of shares, or increasing supply, a public company can bring the stock price down without affecting a company’s total value, or market cap.

In the case of Apple, the stock price is around $466 per share. When the stock split goes into effect, the price will be divided by 4. This will be the fifth time Apple has split its stock since going public in 1980. Apple last split its stock in 2014, in a 7 for 1 split. 

Tesla’s stock is trading at around $1,900 per share as of August 19, 2020. The company’s split will divide its share price by 5 when it goes into effect.  Keep in mind that a stock-split doesn’t necessarily mean that the same growth will follow. 

How a reverse stock split works

A reverse stock split has the opposite effect of a regular stock split—it reduces the number of outstanding shares on the market.

When a reverse stock split occurs, each share is converted to a fraction of a share. For example, if you own ten shares, and a reverse stock split occurs that converts each share into 0.1 shares, your ten shares becomes one.

The result is fewer, but more valuable shares. A company may want to increase the value of its shares to avoid being delisted from stock exchanges, in the event that its share price is too low, or to boost its image.

Keeping up with stock splits

Some experts have suggested that the stock splits from Apple and Tesla might inspire other companies with high share prices to split their stocks. For example, Netflix, which last split its stock in 2015, is trading around $500 per share. Amazon, which last split its stock in 1999, trades around $3,300 per share. However, these companies haven’t said that they will split their stocks and there’s no reason to believe that they definitely will.

Stay up-to-date with stock split news—and other market news—with our news update the Weekly Scan and our newsletter The Wallet.

The post Here’s What Apple and Tesla’s Stock Splits Mean For Investors appeared first on Stash Learn.

Markets around the world have fallen in reaction to a mysterious new coronavirus that has reportedly infected more than 40,000 people in China, killing more than 900 people, and grinding normal activity to a halt in the world’s second-largest economy

As infections have spread to other countries and regions, including Japan, South Korea, the U.S., and Western Europe, the World Health Organization (WHO) declared the outbreak a global emergency on January 30, 2020. But the epidemic is more than just a health problem. 

Some experts suggest that the outbreak could cost China more than $60 billion, further slowing the country’s already-weakened economy. And China’s economic problems could also spill over to the rest of the world as travel to and from the country is restricted, and manufacturers look for different outlets for their goods, and for components to manufacture their products.

How is the Outbreak Affecting the Global Economy?

China’s economy, the second-largest in the world, is vital to global markets. One-third of world economic growth is attributed to China, and companies around the world depend on China for production and manufacturing of goods. 

Apple, for example, announced that it would look for new suppliers of parts while China deals with the outbreak. Car manufacturer Tesla also temporarily closed its factory in China. Meanwhile, coffee chain Starbucks and Scandinavian furniture design store Ikea both temporarily closed more than half of their Chinese stores, according to the New York Times. 

The timing of the outbreak comes only days after China and the United States concluded the first part of a trade deal, on January 15, 2020, which committed China to purchasing $200 billion worth of American products over the next two years. 

The trade war caused two years of tension between China and the United States, as the two took turns raising tariffs on each other’s exports. China’s GDP grew at 6.1% in 2019, the lowest rate of growth for China’s economy in roughly 30 years, according to the Wall Street Journal. 

More about the virus

The virus outbreak has been traced to the city of Wuhan, home to 11 million people and one of China’s big economic centers. Wuhan produces $213 billion of goods and is responsible for 1.6% of China’s GDP, according to reports. 

The lockdown on travel in Wuhan could slow down production in the city, which is crucial for transportation, manufacturing, and shipping logistics in China. In fact, Wuhan is the largest city for water, land, and air transportation in inland China, according to reports. The rail system in Wuhan, which is currently shut down, connects passengers to major cities including Beijing, Hong Kong, and Shanghai.

The outbreak is also happening during the Lunar New Year, a major holiday for travel in China. More than 3 billion people were expected to travel throughout China for holiday celebrations, which started on January 25th. China’s government extended the Lunar New Year three extra days through February 2nd in response to the outbreak, which is expected to slow manufacturing as people stay home from work. 

SARS Outbreak

From 2002 to 2003, China dealt with an outbreak of different strain of coronavirus that caused Severe Acute Respiratory Syndrome (SARS). SARS killed approximately 800 people, according to the New York Times.

The economic impact of the current epidemic is expected to be larger than SARS, which cost the global economy $54 billion, according to reports.

The new strain appears to be spreading more quickly than past epidemics. It took five months for the number of cases of SARS to reach more than 5,000 people. This new strain first showed up in patients in December, 2019, and spread to more than 5,000 people in a month, according to CNBC.

Investing during times of volatility

Outbreaks like the one in China can lead to uncertainty and volatility in the stock market.

Volatility is a normal part of investing. Protect yourself by following the Stash Way—invest regularly and diversify your investments.

The post The Chinese Economy is Taking More Than A Sick Day appeared first on Stash Learn.

It has recently faced consumer criticism for potential gender discrimination in the way it grants credit for its Apple Card, a new credit card it launched in partnership with New York investment bank Goldman Sachs in August, 2019.

Customers have reportedly complained that men may receive credit limits up to 20 times larger than women, often when they live in the same household with shared financial lives.

While Apple has yet to comment, Goldman Sachs said it is looking into the complaint, according to CBS News. Goldman says that gender is not a factor in issuing credit limits and that it is possible for two family members to have different limits.

What happened?

• David Heinemeier Hansson, the creator of a web development platform called Ruby on Rails, first drew attention to the potential issue when tweeted on November 7, 2019, allegations that Apple approved him for a credit limit that was 20 times higher than that of his wife. Hansson said on Twitter that he and his wife file “joint tax returns, live in a community-property state, and have been married for a long time.” Additionally, Hansson reportedly said his wife has a higher credit score than he does.
• Hansonn’s tweet went viral, and attracted the attention of Apple co-founder Steve Wozniak, who seconded the accusation a few days later. He tweeted: “I’m a current Apple employee and founder of the company and the same thing happened to us (10x) despite not having any separate assets or accounts.”
• These allegations attracted the attention of the New York State Department of Financial Services, which is reportedly investigating Apple’s algorithm and the practices of Goldman Sachs, Apple’s credit card provider.
• Following the viral thread, Apple reportedly increased Hansson’s wife’s limit.

Discrimination, tech, and banking

Gender discrimination, or the unfair treatment of someone on the basis of sex, is illegal. It is also considered a problem across industries, and can include harassing work environments, and barriers to promotions, even discrimination against pregnancy. Additionally, women tend to be paid less as the result of something called the pay gap. Women are paid 80.7 cents for every dollar men are paid in the U.S., according to reports.

This issue has drawn particular attention in the male-dominated tech industry, where 60% of female employees are offered lower salaries than their male counterparts, according to one survey from Hired.

Recently, tech companies have received further criticism for evidence of discriminatory behavior in algorithms, which are assumed to be objective. Other companies have faced similar claims of discriminatory algorithms. In October, 2019, the same department investigating Apple opened a probe into UnitedHealthGroup Inc., for using an algorithm that allegedly discriminated against black patients.

Banks have also historically faced criticism for discriminatory practices in lending against potential mortgage customers on the basis of race or ethnicity, in a practice called redlining. As well as general discrimination in lending which federal fair lending regulations were put in place to protect against.

More about Apple and Apple Card

Apple launched its credit card, seeking new avenues for profit in services, following a slowdown in iPhone sales.

For the end of September, Apple and Goldman have extended $10 billion worth of credit to consumers for the Apple Card.

The Apple card charges no annual fees, and no overdraft or late fees. People can apply directly on their iPhones, and once approved, the card is loaded directly into the wallet function of their phones. In typical Apple fashion, the card changes color within the Apple wallet according to how the user spends.

The post Does the Apple Card Have a Gender Problem? appeared first on Stash Learn.

But the Cupertino, California tech giant is also transforming into a service business. Last week, during Apple’s annual new product show, it displayed its new iPhones and iMacs, but it also discussed details about something else that shows how the company may be changing. It talked about its new offering Apple TV Plus—a streaming service that will compete with Netflix, Disney and others, for $5 a month.

Only a few weeks prior to that, it launched a credit card, in partnership with the bank Goldman Sachs. Apple TV and the company’s new credit card will also join iTunes and Apple Pay as services the company offers.

So why does Apple seem to be venturing into territory that’s further and further away from its computers, laptops, and the other hardware it has traditionally sold?

We’ll explain why companies sometimes decide to change course and try something new.

More about Apple

Along with companies like Dell and Microsoft, Apple has helped define the personal computing market—we’re talking desktops, laptops, and related gadgets.

But sales for many of Apple’s items have leveled off recently, particularly for iPhones, which make up nearly half of Apple’s annual sales. Why? There are plenty of competitors offering products that are a bit cheaper than Apple’s $1,000 iPhone. Also, the market may be reaching a saturation point, meaning all the people who will buy iPhones already have them.

On the other hand, services represent a growing part of Apple’s sales. We’ve written before about how to research a company’s stock, through something called a 10-Q or a 10-k. These are earnings reports a company is required to file with the Securities and Exchange Commission, detailing facts about its financial operations.

Example: In Apple’s most recent 10-Q for the second quarter, 2019 (you can find that here), you’ll see at the very top that it breaks down its sales by products, and then by services. Notice how the amount of revenue for its product sales decreases, while revenue for its services business continues to increase quarter over quarter.

What’s a service

In the business world, a service is a transaction where no physical goods are exchanged. In other words, you don’t wind up with a physical product, the way you would if you purchased a car or computer.

Services can include things small things like:

• Having your car repaired
• Going out to eat in a restaurant
• Having your house cleaned
• Going to an accountant

But they can also include entire industries such as:

• Computer network hosting
• Video streaming services
• Utilities

Why do companies change direction?

It’s actually a common occurrence for companies to change directions. Sometimes they have to, for a variety of reasons. Markets become mature—which means essentially the company has sold just about all the products to consumers that anyone wants. So they have to develop new lines of business to stay profitable.

Services can be an obvious choice, since companies may have already developed much of the technology they need while pursuing other business lines, including computer and distribution networks, as well as products.

Another example is Amazon, which began to branch out from online book sales to all e-commerce sales in the early 2000s. As it grew and developed into the largest e-commerce company in the U.S. based on sales, it started offering other services, such as web hosting and streaming video. It also branched out into devices including the Kindle, Echo, and Chrome tablets.

Follow the Stash Way

Stash encourages new investors to diversify, invest regularly, and to invest for the long term. You can find out more about our investing philosophy here.

The post Behind Apple’s Push to Sell Services appeared first on Stash Learn.

The Dow sank 650 points in morning trading, and the tech-heavy Nasdaq sank nearly 3% as Apple stock lost 10% of its value*, according to reports.

On Wednesday, Apple Chief Executive Tim Cook announced in a shareholder letter that poor sales in China for its Mac, iPad, and iPhone products would result in significant revenue losses.

“Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall,” Cook wrote.

The letter set off fears that global economic growth is slowing, which could affect the financial prospects of other large U.S. companies.

What’s going on?

China is the second largest economy in the world, after the U.S. Not only Apple, but numerous other companies including General Motors, KFC, and Starbucks have staked much of their sales growth there in recent years. This spring, Starbucks even announced a surprising plan to open a store every 15 hours in China through 2022.

But China’s economy has been slowing, as consumer demand in that country has shrunk and the trade war with the U.S. has made its exports to the U.S. more expensive.

Rival tech firms such as China’s Huawei have also released cheaper alternatives to Apple’s high-end iPhone.

Meanwhile, the size of Apple’s revenue stumble is large. Cook forecast revenue of $84 billion in the first quarter, down from earlier estimates that ranged between $89 billion and $93 billion.

More background

While volatility has returned to the stock market, it’s important to keep in mind that the U.S. economy is still strong. The unemployment rate is at a 50-year low of 3.7%.

The Federal Reserve has also been increasing interest rates to keep inflation in check as the economy has gathered steam. And signs are that the holiday shopping season was robust, indicating that consumers are out in force and buying.

Apple wasn’t the only tech stock to get hit on Thursday. Shares of Intel, Microsoft, and shares of all 30 computer chip makers also fell.

Apple is one of the wealthiest companies in the world, attaining a record market cap of $1 trillion in 2018. News of its projected sales miss has helped to shave $450 billion from its peak value.

*As of January 3, 2019

The post Apple Stock Just Went Down A Lot. What Happened? appeared first on Stash Learn.

iOS and Android, of course, are the world’s most widely-used smartphone operating systems—99.6% of all new smartphones run one of the two systems.

Apple’s iOS, which runs on iPhones, is the most popular in the U.S., with roughly 65% of Americans’ smartphones running some version of the system as of 2018, according to industry data. The remaining 35% run Android, which is a Google product, and is installed on roughly 85% of smartphones around the world.

And because Stash runs on both platforms, we can get an inside look at the differences between how iOS and Android users invest their money.

To conduct the analysis*, Stash’s data team looked at the percentage of users that hold certain investments on both iOS and Android, and compared the two to identify the investments (stocks and ETFs) with the greatest disparity.

Here’s what we found out:

Key takeaways from the Stash data team:

• iOS users tend to have higher incomes, and identify themselves as more experienced investors.
• iOS users’ portfolios tend to be more vested in the tech sector.
• Android users’ portfolios skew toward the food and beverage industries.
• Android users tend to prefer individual stocks over ETFs.

Here’s how things break down by investment choice:

Investments that skew toward Android users (compared to iOS users):

• Twitter (twice as likely to hold than iOS users)
• Monster (twice as likely)
• Hershey (70% more likely)
• Hewlett Packard
• YUM! Brands
• Activision Blizzard
• Mondelez
• Royal Caribbean Cruises
• Tractor Supply Co.
• Deere & Co. (John Deere)

Investments that skew toward iOS users (compared to Android users):

• Apple (Twice as likely to hold than Android users)
• Modern Meds (60% more likely)—an ETF that focuses on biotechnology and pharmaceuticals (XBI)
• Copy the Experts (41% more likely)—an ETF that focuses on the companies that top hedge funds are excited about (GURU)
• AT&T
• Colossal China—an ETF that focuses on China’s top companies (GXL)
• Starbucks
• Salesforce
• Aggressive Mix—an ETF that’s balanced specifically for investors with a moderate risk profile (AOR)
• Nike
• Facebook
• Destination Recreation—an ETF that focuses on entertainment and leisure (PEJ)
• Snap
• Target
• Social Media Mania—an ETF that focuses on social media companies (SOCL)

Gain more investing insight by subscribing to the Stash newsletter.

The post iOS Stashers vs. Android Stashers: Do They Invest Differently? appeared first on Stash Learn.

Here’s what was announced:

• The new iPad Pro—In the biggest redesign to the iPad in the product’s eight-year lifespan, the new iPad Pro will be around 15% thinner than its predecessor, and will sport Face ID and a USB port. It can also connect to external 5K high-resolution TVs and monitors.

It will be available in two sizes, 11 inches ($799) and 12.9 inches ($999), and available on November 7.

• A redesigned MacBook Air—The new MacBook Air weighs only 2.75 pounds, or 25% lighter than the previous version. Apple is also touting the device’s “green” construction, as its case is made out of 100% recycled aluminum.

Improvements include a more responsive keyboard, Touch ID, and a 13.3-inch Retina display with 4 million pixels. It’ll be available November 7 and costs $1,199—$200 more than its predecessor

• An updated Mac Mini—Remember the Mac Mini? Apple’s giving it an overhaul for the first time in four years. It’ll come with a quad-core Intel processor (with an option to upgrade to six) that should make the device’s processing speed up to five times faster. The Mini Mac’s casing will also be made from 100% recycled aluminum.

It, too, will be available on November 7, and will cost $799.

The post Apple Event: New iPads, Macs, and More appeared first on Stash Learn.

At its annual fall event devoted to hardware innovations, Apple showcased its highly anticipated next-generation iPhones and other devices in order to generate buzz before the holiday shopping season and to counteract slowing smartphone sales.

Apple, which will release several new iPhone models later in September, is trying to get to the core of two top customer concerns: Price and screen size.

Meet the new Apple iPhone models

Here’s what we know about the new iPhones that will begin shipping to stores within the next few weeks:

The three new phones update the iPhone lineup, including two upgraded versions of last year’s iPhone X, and a new “budget” option.

iPhone Xs

iPhone Xs Max

iPhone Xr

Watches, Health, and HomePods

The iPhone is Apple’s cash cow, pulling in 56% of the company’s revenue in the third quarter of 2018. But the company unveiled a number of other updated and upgraded products.

Most notably, a new Apple Watch (Series 4) is in the pipeline, sporting a redesign with a bigger screen, and a slew of new health features. These include a detector for atrial fibrillation, or heart arrhythmia, that lets users conduct electrocardiograms, which they can store and share with medical professionals.

Apple also upgraded its HomePod (a home device that competes with Amazon’s Alexa and Google Home), allowing users to search for music based on lyrics, among other things.

Trouble with tariffs?

Apple has pushed back against $267 billion of new tariffs on Chinese goods, proposed by the Trump administration. The company manufactures many of its components in China, and industry experts say the tariffs could increase the price of Apple products in the U.S. by as much as 20%.

You can invest in technology companies on Stash.

The post Apple Debuts New iPhones, Plus More Watches and Gadgets appeared first on Stash Learn.

These days, Wu-Tang Clan could alter the lyrics to say the “cloud rules everything around me,” and probably make just as much sense.

What is the cloud?

The cloud lets you save your homework without a USB thumb drive, to binge-watch “Ozark” on Netflix, and even allows President Trump to fire off his famous early morning tweets.

But what is it? Despite calling it the cloud, it’s not actually a wall of cumulus clouds in the sky.

Cloud computing is a method of storing, accessing, and syncing data and software through the internet, rather than on the hard drive of a local computer. So, the “cloud” refers to a global network of computers, or servers, that store information, and that we access remotely from devices such as laptops, desktop computers, and smartphones.

For example, if you want to watch a movie on-demand through Netflix, you’re using the cloud to access it—the movie isn’t stored in or on your TV or laptop. You have to request it from Netflix’s servers to watch it. Similarly, every time you log in to a free email service such as Google or Yahoo, you’re accessing it in the cloud.

How the cloud is used

With cloud services becoming more universal, increasing numbers of businesses and industries are jumping on board. Companies that previously lacked IT resources can now purchase them affordably, and can even test and market new products and services without hiring armies of software developers and engineers, or by purchasing huge numbers of new servers themselves.

They can do this either through the public or private cloud. The public cloud is network space any business or individual can use from a cloud provider. A private cloud is a dedicated space that companies can purchase from providers, for their own exclusive use.

In addition to using the cloud to stream on-demand TV and movies, we use it to log into our social media networks, and see what’s happening with our friends and families. Many people also use it for work, by creating, saving, and sharing documents through Google Docs, for example, or storing a customer’s information in a Salesforce database.

The cloud is at work all around us, and in ways most people never actually see. Cloud computing has allowed us to become untethered, thanks to ubiquitous wireless internet networks, small devices like smartphones and tablets, and a smattering of digital products and services.

The cloud computing industry is typically broken down into sub-industries, including:

• Infrastructure-as-a-service (IaaS), which is the hosting of server networks (example: Amazon Web Services)
• Software-as-a-service (SaaS), offering software over the web (example: Salesforce)
• Platform-as-a-service (PaaS), creating a platform available over the web (example: Facebook)

All of these services are expected to continue growing in coming years, and become increasingly profitable for the companies working in the industry, according to industry data:

We can now work, shop, order meals, send messages to our friends, schedule a yoga class, and listen to music on Spotify, and even play video games all because of the cloud.

Cloud computing’s biggest players

The idea of cloud computing may seem new, but it’s actually been around for some time. In the 1950s, computer scientists first developed the technology, which predated the modern internet.

The cloud didn’t develop into a commercial enterprise until the early 2000s when cloud computing company Salesforce became the first major cloud-based company, and also the first to market it as an advantage.

Other companies followed suit, and today, many products and services that we use every day are available only through the internet.

Some of the biggest and most important companies in the cloud computing industry include:

• Amazon (Amazon Web Services)
• Microsoft (Azure)
• Google (Google Cloud Platform)
• Oracle
• SAP
• IBM

And in terms of cloud infrastructure services—that is, the companies that actually host the servers that store information that we all request from our devices—just five companies including Amazon and Microsoft have cornered the market, according to industry data.

And as the cloud becomes bigger and consumers rely on it more, the potential profits for cloud computing companies continues to grow, too.

Companies providing cloud infrastructure services like Amazon and IBM make money by selling server space and computing power to other companies that use it to provide a product or service, such as Netflix, cloud storage company Dropbox, or social media networks Twitter and Facebook.

Cloudy, with a chance of…

The future of the cloud computing industry actually seems pretty sunny.

In 2018, the worldwide public cloud services market is expected to grow more than 21% from 2017 to become a roughly $186 billion market, according to the business consultancy Gartner. And by 2020, the market for cloud services could increase to $411 billion.

But while cloud computing seems set for growth, for those looking to invest in the industry, there are still reasons for caution.

Security is one factor. As the volume of personal details about consumers continues to flood online, the industry has experienced multiple large-scale data breaches over the past few years. One of the most infamous was the 2014 iCloud hacking scandal, in which numerous celebrities’ Apple accounts were accessed and their personal photos were stolen and leaked.

Consumer confidence is another potential hurdle. For example, more than two-thirds of U.S. consumers are afraid companies aren’t doing enough to protect their personal data in the cloud, according to survey data.

And there’s also the possibility that governments could introduce new regulatory standards, particularly when it comes to companies using the cloud to conduct financial services, which could create roadblocks for the industry.

Despite these issues, the future of the industry seems anything but cloudy.

You can invest in companies working with and in the cloud computing industry on Stash.

The post Cloud Computing Runs the World appeared first on Stash Learn.

The company’s shares hit a record price on Monday, as CEO Tim Cook and other executives took to the stage to announce the newest features and upgrades to the company’s devices.

The conference, which draws third-party programmers from around the world–developers from 77 countries were among the 6,000 who attended, according to Cook–is one of the annual events at which Apple flexes its corporate muscle.

Here’s a quick rundown of some of the most noteworthy announcements:

Updates and upgrades

Among the company’s biggest announcements is an upgraded operating system, iOS 12. The OS upgrade is designed to speed everything up, according to Apple–including the efficiency of older devices.

“We are doubling down on performance”–Craig Federighi, vice president of software engineering for Apple

“For iOS 12, we are doubling down on performance,” said Craig Federighi, Apple’s vice president of software engineering during the OS’s unveiling.

A new version of the macOS, Mojave, is also on the way and will replace High Sierra, the current OS. The Mojave update includes a “dark mode” that dims various unused elements on the screen and has a number of other new features, including a new way to stack documents in Finder.

The Mac App Store–the store dedicated to Apple’s computers and laptops, rather than for iPhones and iPads–is also getting a redesign, including allowing users to rate apps, similar to its App Store.

“Digital Health” features

Apple says it’s also looking out for users, health issues, related to too much screen gazing.

A new feature of the OS, called Screen Time, tracks how long you’ve been using your device, and even individual apps, and summarizes it in a weekly wrap-up. It allows you to set time limits for yourself to limit distraction, and to make sure you’re giving your pupils some pause.

The best of the rest:

New emojis. Apple is launching Animoji characters, which allow users to turn themselves into animal emoticons, and Memojis which let you create an emoji avatar. The new emojis will make it more competitive against Snap, analysts say. Snap reportedly spent $60 million on an emoji upgrade in 2017.

Group Facetime. It’s Facetime, but for groups. Up to 32 people will be able participate on a single call.

Augmented reality. Apple unveiled its next generation of software for developing augmented reality with its devices. The new software improves face tracking and image rendering, and allows for 3-D object detection and shared, multi-player experiences.

Special mention: Apple is also retooling its Stocks app, which will now feature business news, charts and metrics, and extended trading.

“We’ve completely rebuilt the Stocks app and it has a beautiful new design,” Susan Prescott, VP of product marketing, said during the event. “Of course, you can still see the stock prices and the changes at a glance. But we’ve added spark lines — those little charts — that show the stock performance throughout the day.”

The post Apple Wants to Wean You Off Your iPhone: News from WWDC18 appeared first on Stash Learn.

Major indexes fell into correction territory again on Monday, led this time by tech stocks.

The Dow Jones Industrial Average fell 700 points by mid-afternoon. Meanwhile, two other key indexes the S and P 500 and the tech-heavy Nasdaq fell 3.1% and 3.5% respectively.

It’s the third time this year that major indexes have experienced steep drops in a single day.

FANG companies got declawed

Stocks of the so-called FANG companies–Facebook, Amazon, Netflix, and Google–were among the hardest hit. Collectively, those companies have lost $324 billion over the last two weeks, according to reports. But it wasn’t just the large market leaders in tech, companies including social media app Snapchat also suffered losses.

Facebook has been facing pressure following news that it leaked personal data from 50 million users to a firm called Cambridge Analytica, which reportedly gathered the information to create psychological profiles of voters during the 2016 elections, without user permission.

Similarly, Amazon has been the subject of President Trump’s wrath in recent days, as the president has made erroneous claims on Twitter about the company’s tax filing status and use of the U.S. Postal Service for parcel deliveries. While the online retailer has been having a tough day, until recently its stock has been up more than 50% in the past year, according to Bloomberg.

And in related news, chip maker Intel, which provides microchips to some of the largest tech companies around, experienced a steep sell off, after news reports said Apple would switch from Intel chips to microprocessors it manufactures itself, by 2020.

Apple is reportedly one of Intel’s biggest sources of revenue.

Is it “Groundhog Day?”

There have been two other stock big sell-offs over the past few months. In February, for example, fears about inflation led to the steepest decline markets had experienced in more than a year.

Stocks of the so-called FANG companies–Facebook, Amazon, Netflix, and Google–were among the hardest hit.

And in late March, fears about a trade war with China sparked a smaller sell-off in the major indexes. On Monday, China announced it would hit back against $60 billion of U.S. tariffs on its own products, with tariffs on 128 U.S. products, including farm and agricultural exports.

Good to know: April is the beginning of the second quarter, which means earnings are due for most public companies for their first quarter. Many of the leading tech companies are expected to report strong earnings, according to some market analysts.

Is this kind of volatility normal?

Yup. Volatility is considered a normal part of market behavior–and corrections aren’t all that unusual.

In fact, according to some experts, volatility tends to appear in markets in clusters. That means large market swings tend to follow each other, just as small market movements do.

Things to think about when markets go down

Consider turning on Auto-Stash and let the power of dollar-cost averaging do its work.

Keep on investing small amounts of money on a regular basis into your diversified Stash portfolio. You’ll automatically capture market highs and purchase more of your investment when it dips.

The post Why Did the Market Drop (Again)? Trump, Tariffs, and Tech appeared first on Stash Learn.

Driven largely by a major overhaul to tax laws in December, biotech stocks have been posting sizable increases this week, as companies in this industry have pursued high-profile mergers and acquisitions that investors seem to find promising.

What is biotech?

Biotech companies produce medicines, therapeutic treatments, and other medical products through the development of biological and chemical processes.

Companies in the industry include some pretty big names you’ve probably heard of, including Pfizer, Amgen, Gilead, and Merck.

What do tax laws have to do with the market?

The changes to tax law, which include a steep cut to the corporate tax rate and an incentive to move cash from overseas to the U.S., are two big reasons why the sector is heating up, according to some experts.

Here’s why:

• The updated tax law slashes the corporate tax rate by nearly in half, to 21% from a previous rate of 35%, meaning companies–including biotech firms–are likely to have more cash on hand in 2018 to buy other companies.
• U.S. companies hold a staggering $2.8 trillion of profit overseas. The two main industries collecting cash overseas are biotech and technology, including companies such as Apple, Microsoft, and Cisco, according to the New York Times.
• Many biotech companies have set up operations internationally to avoid paying high corporate taxes in the U.S., and now hold billions of dollars overseas. However, the new tax law will allow them to “repatriate” that cash at a very low tax rate. That means they can bring the cash back to the U.S., and pay taxes as low as 8%, according to reports.

So how much money are we talking about?

The following is an estimate of what some of the largest biotech companies have stashed overseas:

• Gilead: $29.3 billion
• Bristol-Meyers Squibb: $8.4 billion
• Celgene: $6.9 billion
• Biogen: $4.3 billion

Source: Bloomberg, June, 2017

With all that extra cash potentially coming back to the U.S., it makes sense that biotech companies might use some of it for mergers and acquisitions.

When a company acquires or merges with another company, it usually puts the combined businesses in a stronger position competitively. Companies buy other companies if they have something they need. That could be products, or services or even important research, which is the case in many pharmaceutical deals.

Fun fact: When people talk about M&A, they’re talking about mergers and acquisitions.

Deals in play

With that in mind, here’s a look at what biotech companies announced this week, subject to regulatory approval:

• Celgene announced it planned to acquired Juno Therapeutics for $9 billion.
• French company Sanofi said it would purchase U.S. drugmaker Bioverativ for $11.6 billion.
• Also this week, BioCryst Pharmaceuticals said it would merge with Idera Pharmaceuticals through an exchange of stock.

The M&A activity over the past few days follows a period of fewer acquisitions in the industry, according to reports. One exception is Gilead, which purchased Kite Pharma for close to $12 billion in September, 2017, in a bid to develop immunotherapy drugs. In October, the Food and Drug Administration gave the green light to Kite’s new cancer-fighting immunotherapy.

So what happened?

Here’s what happened to stocks and stock fund values after the mergers and acquisitions were announced:

Modern Meds (XBI), whose underlying fund is SPDR S&P Biotech ETF, surged 5% by Tuesday.*

Similarly, iShares Nasdaq Biotechnology ETF, also posted an increase of nearly 5%.*

Good to know: When one company announces it will buy another, it usually affects the share price of one or both companies. If investors favor the deal, generally speaking stock prices will move up. If they don’t, stock prices will move down.

For example: Celgene’s stock was up 3% on Tuesday, while Juno’s stock was down .06%.**

*Source: Yahoo Finance, January 23, 2018

**Source: MarketWatch, January 23, 2018

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The Cupertino, California-based tech giant held a special event Tuesday at its new Steve Jobs Theater to unveil its latest iPhones, including the iPhone X, as well as other innovations for the Apple Watch and Apple TV.

But it was the news about the latest iPhone models that created the most excitement.

“No other device has had the impact on the world that the iPhone has,” Tim Cook, Apple’s chief executive officer, said in prepared remarks during the streamed event. “Nothing else has put so much power into so many people’s hands.”

The iPhone X is the first major redesign of the iPhone since 2014

The 10-year-old iPhone is perhaps the most successful consumer device in recent history, and the latest model could push Apple’s market cap to a staggering $1 trillion or more, according to reports.

In addition to the iPhone X, which will begin shipping in November, Apple will release the Phone 8 and 8 plus, scheduled for release by the third week of September. These will have features including wireless charging and faster internal processors. The iPhone 8 will start at $699. The 8 plus will retail for $799.

So what’s inside the iPhone X?

The iPhone X is the first major redesign of the iPhone since 2014.

The handset’s feature list will include facial recognition technology, an edge to edge display, augmented reality camera, improved battery life, and animated emojis.  It will also eliminate the home button in favor of a touch screen that pairs with facial recognition to activate the phone.

Will the iPhone X be too pricey for consumers?

The high price is a definitely a gamble with consumers, numerous industry experts say, particularly as the cost of an iPhone has been edging up for years. In fact, the 7 plus, released in 2016, retails for $769.

Only 11% of consumers said they’d purchase a phone with a price tag of $1,000, according to a survey conducted by investment bank Barclays in August. (The majority of those polled said they don’t want to spend more than $560.)

Apple’s not alone in pushing up prices

Competitor Samsung’s new Galaxy 8, which will be available September 15, retails for $950. Together, Apple and Samsung control more than a third of the global high-end smartphone market. 

And for many consumers, smartphones have become a fact of life. They now reportedly spend about 4 hours a day on their mobile devices, which are doing double time as work tools for increasing numbers of people.

And if the price is a gamble, it’s clearly one Apple has thought carefully about.

One reason is that consumers plan to spend more cash on mobile phones in the coming years, according to the research firm Gartner. Another reason why: In the months following the release of its new phones, stock price tends to tick up dramatically. In fact, Apple’s share price in the year following the release of its iPhone 7 increased 43%.

Sources: FactSet and the Wall Street Journal

The post The New iPhone X: Yes, It Could Really Cost $1,000 appeared first on Stash Learn.

An earnings report is a snapshot of a company’s health over a three-month period. Among the things you’ll find are reports about a company’s revenue and profit, which show how much money they’re making and how well they’re using that cash.

You can find out more about earnings reports here.  

What’s inside the report?

The tech sector has been on a growth tear for quite some time, and the NASDAQ, the market index laden with the biggest tech stock names, is up about 25% for the year. The stocks reporting this week are important bellwethers (or indicators) for the technology market, and in some cases for the broader economy.

Something else to keep in mind: the tech sector is volatile, which means the stocks of companies in these industries may be subject to sudden fluctuation. Stocks stumbled in June as investors sold stock to cash in on their profits.

(Lean more about tech stock volatility here.)

Here are some highlights from top tech company earnings reports this week:

• Google parent Alphabet, which reported earnings on Monday, saw its stock fall despite revenue growth of 21% to $26 billion for the quarter. The problem? The price advertisers are paying for ads went down.

Google is the biggest advertiser in the world, and the slip  in revenue is the result of a shift to mobile devices, where the search engine company charges less per click. Desktop ads are still the most profitable for Google. The company’s stock fell nearly 3.5 % after it reported earnings on Monday.

• Facebook, the social media giant, reported its second quarter revenue increased 45% to $9 billion, and its profit jumped 71% to $3.9 billion, driven by advertising revenue. That’s a huge increase by any measure, and especially for a mature company in the social media space, according to analysts. Its stock increased 6% Thursday, following the earnings report. Facebook is now approaching a $500 billion market cap, which puts in the company of tech giants including Apple and Microsoft.
  
• Amazon’s revenue increased by 25% to $38 billion. Profits for the world’s largest e-commerce retailer dropped 77% to $197 million, however, as the company continues to spend on things like new products, warehouse infrastructure, and video content. On Thursday, Amazon’s stock traded at a record high of $1,081 per share, making company founder Jeff Bezos the richest person in the world. He is now worth more than $90.6 billion.
• Twitter reported 328 million monthly active users, about the same as the previous quarter, but fewer than analysts expected. The lack of increase in users sent the company’s stock down 5% on Thursday.

The generally positive earnings for these companies sparked stock market gains last week, as the Dow Jones Industrial Average, a composite index of 30 of the most prominent U.S. stocks, climbed to new heights.

Key takeaways:

Prominent tech companies reported their second quarter earnings this week. Quarterly earnings reports are important snapshots of business health. The tech sector is a rapidly growing part of the U.S. economy, and it continues to drive broader market gains. Tech stocks are volatile, which means they can fluctuate up and down suddenly.

Read more: What The Recent Tech Sell-Off Teaches Us About Diversification  

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Why should you feel good about investing in Apple?

They’re all about the green

With a high caliber of corporate sustainability, Apple is nearly unbeatable in their dedication and results. 100% of their US data and operations centers run on 100% renewable energy (and a growing 87% of global data centers do as well).

Apple remains the most aggressive among major internet companies in deploying renewable energy.

How? Apple has taken that extra-impressive step and built three separate solar farms and on-site fuel cells in order to secure a trusted renewable electricity supply. As a result, Apple prevented 13.8K metric tons of carbon emissions in 2015 and saved 3.8 B gallons of freshwater since 2013, according to their 2016 Supplier Responsibility Report. Apple remains the most aggressive among major internet companies in deploying renewable energy.

They (really) don’t like to waste

From the office to the product, Apple refuses to waste resources. They recycle used Apple devices that their customers drop off at any Apple store.  But Apple doesn’t just depend on their consumers for reducing waste. They’ve ensured that 99% of the paper in their packaging is recycled or sustainable.

Apple is a technology company, but one with an uncommon commitment to sustainability. The plan for their new data center in Viborg, Denmark includes capturing excess heat from the data center, piping it into the town’s district heating system and heating other buildings in the town.

They’re recognized

Just how impressive is their dedication to sustainability? Apple was named the top manufacturer among all brands by the Institute of Public and Environmental Affairs (IPE) in 2015. Furthermore, Apple is the only company awarded a Clean Energy Index of 100%, according to Greenpeace’s Clicking Green Report.

They have a hand in charity

With all the paper that they do use, Apple wanted to give back. In order to reduce the company’s “virgin paper footprint” (virgin paper = paper that has never been recycled before), Apple purchased two forests, one in North Carolina (3,600 acres) and one in Maine (32,400 acres). With the company’s 100% sustainability goal, the purpose of the forest is to plant half as many trees as it’s cutting down each year.

They help employees have a hand in it, too

Apple doesn’t stop at coloring everything green. They highly encourage charitable giving and volunteering. When an Apple employee donates money to a non-profit 501(c)(3), Apple matches the gift, dollar-for-dollar, up to $10,000 annually. And when an employee volunteers, the company donates $25 per hour to the organization.

They know kids are the future

As part of the company’s own charitable activities, they also bring an innovative approach to education across the country. In joining forces with President Obama in the ConnectED initiative, Apple pledged $100M to improve teaching and learning solutions within underserved schools nationwide. They’ve donated iPads, Macs and Apple TVs to improve both the teaching and learning experience.

The post Is Apple More Responsible Than You? Why You Want to Invest appeared first on Stash Learn.