What it does: The USPS is responsible for delivering 554 million pieces of mail every day, including to Guam, Puerto Rico, American Samoa, and The Virgin Islands. (This makes it a little more understandable that one of my wedding invitations got lost in the mail.)

The service has more than 40,000 post offices and 500,000 employees. Deliveries include life-saving medications, paychecks, social security checks, and other crucial items for Americans at low cost. In rural areas, the post office delivers plants, farm equipment, and even animals. 

Fun facts: In 1913, the USPS began accepting packages over their previous four-pound weight limit. The result? Some parents reportedly sent their babies and small children to grandparents via USPS until this practice was squashed in 1915. 

There’s one place where mail is still delivered by mule! It’s in The Grand Canyon. 

USPS history: then and now

Back in 1775, when we were still the thirteen colonies, Benjamin Franklin became the first postmaster general. He was in charge of streamlining mail and developing routes for mail carriers. Later, George Washington and James Madison helped pass The Post Office Act of 1792, which allowed newspapers to be delivered through the mail, and barred the government from reading people’s letters. Those two innovations were wildly hailed as empowering facets of our new democracy. 

Fast forward to 1970. Postal workers went on strike to protest low wages. It was reportedly the largest-ever protest of federal employees. Then-President Richard Nixon didn’t take kindly to the strike, and responded by restructuring the USPS so it would pay for itself, rather than depend on federal funding. Since this change, the idea of privatizing the USPS has been a sticking point for many conservative politicians. 

Fast forward again to the start of the 21^st Century. The Post Office loses money every year – between $600 million and $3 billion, depending on the year. In 2006, the USPS incurred further losses when Congress enacted The Postal Accountability and Enhancement Act, which charged the USPS $5.5 billion every year for ten years to fund future pensions for USPS workers when they retire. 

Then, we had the recession of 2008, which hit the entire economy—USPS included. Between the billions it owed through the Postal Accountability and Enhancement Act, the recession, and the fact that it was barred from using taxpayer dollars to help bail it out, the USPS has been billions in debt almost every year.  

And that brings us to 2020: Covid-19 has hurt nearly every business and the civil service. The USPS has more than $200 billion of debt and liabilities, and it lost $2.2 billion in the first three months of the pandemic alone. The CARES Act, passed in March to help the country stay afloat, allocated $25 billion for the USPS. But President Trump blocked this funding, and the USPS still hasn’t received it. 

On June 15, a new Postmaster General named Louis DeJoy was sworn into office. DeJoy is a Trump donor and businessman who has a multi-million dollar stake in XPO Logistics, a company that has contracts with the USPS. This could be considered a major conflict of interest, since DeJoy now has the option to structure the USPS in a way that could keep costs low for XPO, thus potentially earning him more money. Since taking office, DeJoy has cut overtime pay, removed mail sorting machines, and eliminated some USPS jobs, all of which have reportedly slowed mail delivery.

And then there’s Amazon. The USPS delivers 30 percent of Amazon packages, often to the most rural, hard-to-get-to areas. Trump has long-criticized this partnership for being a burden on the USPS, and has generally waged a war against Amazon, its CEO Jeff Bezos, and Bezos’s newspaper The Washington Post, which is often critical of the president. By appointing an ally to lead the post office, Trump has begun to strip it of its ability to deliver critical packages, thus shooting Bezos’s company in the foot. 

And it’s not just Amazon. Companies including Fedex and UPS rely on the USPS for so-called last-mile deliveries to places where they don’t have offices or drivers.

Meanwhile, President Trump has also complained that many states may allow more people to vote by mail this November due to Covid-19. Trump has said that mail-in ballots will result in fraud, though there is reportedly no evidence to support this. As the USPS pleads for more resources to handle a potential surge of mail-in ballots, Trump has called the USPS a “joke” and even said outright that he’ll block financial aid to the USPS to increase the difficulty of mail-in voting. 

Now, the USPS says it will run out of money by 2021 if it doesn’t receive federal aid. 

What this means for you: The USPS is a critical part of  our economic infrastructure, enabling important deliveries of mail, medicines, materials, and other necessities that consumers and businesses alike rely on. If the USPS doesn’t get funding, services could be curtailed, and we might have to rely on private, for-profit companies for deliveries, which could increase prices.

Additionally, if you plan to vote by mail for the upcoming presidential election, this USPS debacle means you need to request your mail-in ballots as soon as possible and return them as early as you can. If the USPS gets flooded with ballots and doesn’t have the resources to sort and deliver them, your vote may not be counted on time. 

The post The Battle Between Trump and the USPS Explained appeared first on Stash Learn.

In fact, hundreds of thousands of gig workers, grocery store employees, and healthcare providers–called essential workers during the national crisis–are on the frontlines, keeping critical parts of the economy operational, at great risk to themselves. Many don’t have adequate protective equipment, such as masks and gloves, to keep them safe as they deliver packages, stock shelves, and provide other critical services. 

As a result, some essential workers are threatening to strike if they don’t receive “hazard pay” to compensate them for the extra risk. In fact, shoppers for Instacart, the same-day grocery shopping and delivery app, announced on March 30, 2020 that they would go on strike if they don’t receive an additional $5 in hazard pay, as well as protective equipment such as hand sanitizer and masks. 

What is hazard pay and why is it important?

Hazard pay isn’t a new concept. In fact, the Department of Labor defines it as extra compensation that employers might provide for performing hazardous work that causes physical discomfort or distress not adequately alleviated by protective devices.

Companies are not required by law to grant their employees hazard pay, according to the Fair Labor Standards Act, which outlines the federal minimum wage and overtime standards in the U.S. Nevertheless, the coronavirus has opened up new discussions about hazard pay at many essential businesses. 

More than forty states have closed some or all “non-essential” businesses to slow the spread of Covid-19. However, essential businesses such as grocery stores, pharmacies, and delivery services remain open, putting those essential workers at risk of getting the virus.

Employees demanding hazard pay

Since the coronavirus started spreading in the United States, the number of people downloading grocery delivery apps has increased. Since February, daily downloads of Instacart have reportedly increased by 218%. At the beginning of March 2020, grocery delivery sales increased by an estimated 65% from the previous year. While this means more work for Instacart shoppers, it also means increased risk.

In addition to the $5 of hazard pay, Instacart employees are asking leadership to increase the default tip percentage to 10% to encourage users to leave a larger tip during the outbreak. Shoppers typically earn $7 to $10 before a tip per order. Instacart employs 200,000 people and planned to add 300,000 more during the next three months in response to the pandemic. 

Instacart isn’t the only organization that is seeing employees demand hazard pay and protections:

• Amazon workers at a warehouse on State Island in New York City walked out of the warehouse on March 30, 2020, claiming that company is withholding the number of employees in the warehouse who’ve tested positive for the virus. Amazon reportedly later fired one of the employees who walked out for violating quarantine protocol. 
• Whole Foods employees also organized a sickout for March 31, 2020 in order to pressure Amazon, which owns Whole Foods, to pay employees hazard pay that would double workers’ wages and to provide paid leave for self-quarantining employees. 
• In response to the outbreak, Whole Foods and Amazon have increased worker’s wages by $2 per hour while Trader Joe’s and Kroger’s have promised bonuses to workers, according to Forbes.
• More than 100,000 federal workers, including people who work at federal prisons, are seeking a 25% increase in pay during the outbreak, according to Bloomberg. 
• President Trump is reportedly considering giving hazard pay to healthcare providers treating coronavirus patients in a relief package that would follow the $2 trillion bill passed on March 27, 2020.

Staying safe during the outbreak

If you’re working at an essential business during the coronavirus outbreak, you might want to ask your employer about hazard pay as well as proper protective equipment for your work.

The Center for Disease Control (CDC) recommends that any employees with symptoms of the coronavirus stay home and should isolate themselves until they are ready to return. 

If you’re experiencing financial hardship because of the coronavirus, consult Stash’s Guide to Financial Help During Covid-19 for various resources, including information on filing for unemployment and qualifying for paid leave. 

The post Workers Are Demanding Hazard Pay. Here’s What That Means. appeared first on Stash Learn.

Together, they ring up nearly half-a-trillion dollars worth of sales—that’s more revenue each year than the next top five retailers combined, according to the National Retail Federation.

But one is the king of eCommerce, specializing in crunching consumer data and delivery logistics, while the other is a behemoth in the old world of bricks and mortar transactions, at home with shopping carts and Black Friday super deals.

Yet increasingly, Amazon and Walmart are going neck in neck for customers, each competing for the territory of the other. While Amazon has attempted to cross over into physical world sales, Walmart has invested heavily in its online presence.

Who will win the war for your wallet? We take a deeper look at both businesses, and you decide.

Amazon vs Walmart

Founders:

Amazon: Jeff Bezos
Walmart: Sam Walton

Year founded:

Amazon: 1994
Walmart: 1962

Market Cap:

Amazon:  $900 billion
Walmart: $290 billion

Revenues:

Amazon: $178 billion
Walmart: $500 billion annually, as of fiscal year 2018

Number of employees:

Amazon: 566,000
Walmart: 1.5 million

Who owns what?

In addition to consumer-facing businesses such as Zappos, Twitch, and Whole Foods, Amazon owns a suite of tech businesses including cloud services company Amazon Web Services, membership services division Prime, and consumer electronics such as Alexa and Echo products, Kindle, and Fire.

Amazon also owns other e-commerce companies, including Souq.com, which specializes in retail sales in the Middle East.

Walmart owns numerous other retailers both in the US and around the globe, such as men’s fashion wear company Bonobos, online retailer Jet.com, and the membership-only wholesale warehouse chain Sam’s Club. It also owns e-Commerce company Flipkart, of India.

It also has a toe into the world of streaming media. The company announced plans to get into the binge-watching subscription television space with Vudu, in order to compete with Netflix, Amazon, and Hulu.

Amazon’s strengths

Amazon practically invented e-Commerce, and today controls nearly half of all online sales.

Two-thirds of all consumers in the U.S. have bought from Amazon and nearly one-third purchase from it at least once a month, according to reports. With the recent acquisition of the high-end grocery chain Whole Foods, Amazon has also planted a stake in the ground for physical world sales.

More than a million small businesses today also sell on the Amazon marketplace.

Amazon’s weaknesses

Other online retailers are gunning for its territory.

In 2016, Walmart purchased the online retailer Jet.com, in what analysts said was an attempt to compete directly with Amazon. Overseas, it also faces big competition from companies including e-commerce company Alibaba—which sells to 500 million consumers in China alone.

Walmart’s strengths

By sales volume, Walmart is the largest retailer in the nation, and nearly every American has shopped at Walmart, according to industry data. It specializes in the race to the bottom prices, by squeezing suppliers to offer the lowest cost merchandise they can possibly produce.

Walmart weaknesses

Every year, more consumers shop online, and Walmart has had to play catch up with its digital sales strategy. Its purchase of Jet.com for $3 billion in 2016, according to experts, demonstrated its intention not to be caught napping.

Meanwhile, Walmart estimates digital sales for the company will increase by 40% in 2018. Smaller superstores such as Costco and Target are nipping at its heels.

Want a piece of retail giants?  You can invest in stocks and funds that focus on the business of retail on Stash.

The post Amazon vs. Walmart: Inside the Battle to Sell You Everything appeared first on Stash Learn.

Amazon has produced and marketed its own devices for years and held the product launch to create buzz for them, following Apple’s annual fall event last week. Whereas Apple’s products are known for their stylish design—and high price—Amazon’s products highlight functionality and low cost. Here are highlights from Amazon’s event:

• Alexa, everywhere—Amazon is pushing its voice-controlled software Alexa into a bunch of products and devices. That includes cars, via Echo Auto (Audi, BMW, Ford, and Toyota models will have it built-in in future models) which will help drivers with directions and traffic updates. A new wall clock that automatically adjusts between daylight savings and standard time is also on the slate.

Alexa’s new capabilities also allow it to learn more about users, including their names and favorite beverages.

• New Echo, echo, echo….The Echo—a home assistant device similar to Google Home and Apple’s HomePod—will get an upgrade. It’ll be louder, and some models (the new Echo Input) will allow connections to other speakers, effectively incorporating Alexa into home sound systems.
• The new Echo Plus will have additional features, like equalizers to tweak sound quality. It’ll also tell you the temperature. It’ll go on sale next month and cost $149.99.
• The Echo Sub—A subwoofer for the Echo will go on sale in October for $129.
• The Link—The Link and Link Amp are audio control centers that connect to your Echo(s) for further control. You can use them to control volume and choose music, and there are outputs to work with other stereo equipment.
• The Smart Plug—Remember “The Clapper”, which allowed you to control your lights by clapping your hands? Amazon’s taking the same concept, and adding Alexa into the mix. The Smart Plug will allow you to voice-control electronics.
• A microwave—Yes, you can now nuke your Hot Pocket in a voice-controlled, Amazon-branded microwave, which will be sold under the AmazonBasics brand for $59.99.

Amazon’s throwing a lot at consumers in an effort to see what sticks. The company has launched unsuccessful products before (the Fire phone, for example), and is able to easily absorb the losses given its considerable resources.

In another gamble, Amazon is also planning to open as many as 3,000 cashier-less stores by 2021. It’s another risk, given that many brick-and-mortar retailers are struggling for survival in the digital age.

It’s a bet Amazon founder and CEO Jeff Bezos is willing to take. And if Amazon’s gamble is a success, the world is likely going to be a whole lot more connected—and louder.

You can invest where you shop by purchasing stocks and ETFs on Stash.

The post Everything Amazon Debuted at its Apple-Like Fall Product Launch 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.

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.

The company hopes to raise $648 million from its stock offering, according to reports. The offering will take place in the next few weeks.

When a company has an IPO, it sells shares to the public through a stock exchange such as the Nasdaq or the New York Stock Exchange (NYSE). It has an IPO typically to raise cash to fund operations, to build new stories or factories, or to conduct research and development, among other things.

But why is Dropbox selling shares to the public now?

What’s an exit?

Venture capitalists and other investors put money into a company not only because they believe in its vision and want to help it grow and become successful, but because they hope some day to make a profit from their investment, just like any other investor.

One way they do that is through something called an exit. An exit occurs when an investor, or set of investors, sells its ownership in a company, with the goal of making a profit. One way investors achieve an exit is through an IPO, which lets them sell their shares to the public.

What’s a “unicorn?”

All along, the company has a value. And as investors put more and more money into a company, its value typically keeps growing.

In the tech world, private companies that have reached a valuation of $1 billion or more are called unicorns. That’s a big milestone for any company to reach. There are about 200 of these today.

Dropbox was founded in 2007 by Drew Houston, and since that time, it’s received more than $1 billion in funding from outside investors, in various rounds.

In Dropbox’s case, it has a valuation of about $7.1 billion, according to recent reports. That puts it in the company of other unicorns such as Uber, which has a valuation of $68 billion, and Airbnb, which has a valuation of $30 billion.

Angels and investors

Typically, the first money a company receives is called an angel round, from wealthy individuals known as angels who put a small amount of money into the earliest stages of a company. From there, a company will often graduate to venture capital money, which is more formal financing from a partnership that organizes a fund.

Many of the most prominent venture capital companies are in Silicon Valley, where some of the fastest-growing tech companies in the U.S. are. But a number of important VCs also exist in Silicon Alley in New York.

The venture financing rounds are usually given letter names to indicate when they happen. So the first round will be called an A round. The second will be called a B round, and so on down the line. Typically, the rounds get larger as they advance.

Over the past few years, financial experts have talked about the increasing length of time it has taken unicorns to go public. These companies have received big valuations and pots of money, but often wait ten years or longer to go public, which is more than double the time it took companies to go public in 1999.

Amazon, for example,went public in 1997, just three years after its founding in 1994.

One important reason for the change, according to consultancy McKinsey & Company, is that promising young tech companies have more private capital available to them now than they did in the past.

Pricing shares

Before a company goes public, it has to set the value of its shares. It does this based on previous valuations the company has received, but also following a process called the “road show.”

The road show is when the investment bank in charge of the offering goes out to big investors to assess their interest in the stock. The price is usually determined following the roadshow, when the investment bank has a better sense how much people are willing to pay for the stock.

Dropbox’s $7.1 billion valuation is lower than the $10 billion valuation it received several years ago from private investors, which indicates Wall Street may not be willing to pay as much for the company as previous investors, according to reports.

Good to know: Dropbox’s Houston owns 25% of his company today, according to the company’s prospectus. Each time he received more venture capital money, he had to sell off part of his ownership of the company. (Venture capital company Sequoia, for example, owns about 23% of the company.) Nevertheless, considering its current valuation, Houston’s stake would be worth about $1.7 billion.

The post What Took Dropbox So Long to Go Public? We Explain What an Exit Is appeared first on Stash Learn.

Why do we spend money? Here’s one reason: It feels good.

It’s a matter of science. A swipe of a credit card, the click of that button. To your brain, it can feel like a hug. Until you look at your bank balance and wonder where all your money went. Then you feel like crying.

Face it, when it comes to money and spending, we’re not rational beings.

We don’t always buy milk at the store where it’s cheapest. Sometimes we buy it at the store that’s closest to our home or where’s nearest to the pet store where they have the cutest dogs in the window.

There are plenty of ways that companies seek to cash in on our emotional and irrational spending. Think flash sales, markdowns, one-click shopping, and impulse add-ons. It’s just so easy to spend.

But then why does it hurt so much to save? Isn’t saving money good for us? 

On this week’s episode of Teach Me How To Money, we talk to Jeff Kreisler, co-author of the hot new behavioral finance book “Dollars and Sense.”

We discuss  the “pain of paying” and how companies exploit it to keep us spending money on things we don’t need.

Got a question you’d like us to answer on the show? Drop us a line at teachmehowtomoney@stash.com. We’ll do our best to get to all of them.

The post Podcast: Why We Spend Money Irrationally with Jeff Kreisler appeared first on Stash Learn.

The Federal Communications Commission (FCC) voted on Thursday to overturn a critical set of regulations known as net neutrality.

The debate over net neutrality–regulations that say all content that flows over broadband networks must be treated fairly and equally–has been one of the most complicated discussions happening in the public sphere and in the business world in recent months.

What happened?

The FCC is the government agency that regulates radio, telephone, TV and cable communications.

The commission’s five-person board voted 3-to-2 to overturn the regulations, which were put in place in 2015 under the Obama Administration. The commissioners voted along party lines, with a Republican majority prevailing.

“We are helping consumers and promoting competition,” Ajit Pai, the FCC’s chairman appointed by President Trump, said prior to the vote, according to the New York Times. “Broadband providers will have more incentive to build networks, especially to underserved areas.”

Those in favor of the federal guidelines say they keep down costs for consumer broadband access, while ensuring a level playing field for content providers, which range from tiny tech startups to dynamos such as Netflix.

Those opposed to the rules generally say they have throttled innovation and hamper the ability of internet service providers to invest in and grow their networks.

Next steps

Numerous consumer groups, tech companies, and Internet activists have threatened to sue the FCC to maintain existing net neutrality regulations. There has also been a push among some members of Congress to introduce legislation that would make net neutrality the official law of the land.

Nevertheless, broadband providers will have immediate discretion to begin offering new packages with new pricing schemes that could potentially favor some content over others, according to the Wall Street Journal.

Bitter divide

In a sign of how contentious the vote was, Mignon Clyborn, one of the FCC’s Democratic commissioners, had this to say, in a statement following the decision:

“I dissent from this fiercely-spun, legally-lightweight, consumer-harming, corporate-enabling Destroying Internet Freedom Order. I dissent, because I am among the millions who is outraged. Outraged, because the FCC pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers.”

Net neutrality explained

Net neutrality is a phrase coined by Columbia Law School professor Timothy Wu in 2003.

It’s the principle that says all data that flows over the internet–composed of computer networks that operate invisibly in the background every time you look at Facebook from your smartphone or watch Netflix shows from your desktop computer, for example–must be treated the same way.

The networks are operated by broadband companies often referred to as internet service providers, or ISPs, and they include companies such as AT&T, Comcast, Verizon, and Time Warner.

Net neutrality regulations said these ISPs couldn’t play favorites, for example by prioritizing their own programming by delivering it more quickly to consumers. They also couldn’t block or slow down downloads of legitimate content, even if it competed with a similar product they may have or own.

Without net neutrality, some experts have postulated the Internet could be carved into “fast lanes” and “slow lanes”, enabling network providers to simply prioritize their own programming over content from competing companies. They’d do that by potentially delivering it at faster speeds, or demanding payment for faster access to networks.

The post The FCC Just Voted to End Net Neutrality: Now What? appeared first on Stash Learn.

Traditional retailers and online stores racked up record sales on Black Friday and Cyber Monday, as shoppers turned out in droves to snag deals on items including laptops, toys, mobile devices and gaming consoles. Stores they visited included Best Buy, Macy’s, Target, and Toys ‘R’ Us.

Online retail king Amazon beat all other competitors for online sales over the weekend.

Black Friday and Cyber Monday, respectively the Friday and Monday following the Thanksgiving holiday, are two of the most important shopping days of the year for retailers.

The strong sales are a welcome relief and promise a good start to the holiday buying season for so-called bricks and mortar stores that operate in physical locations. Such stores have struggled to attract shoppers in recent years.

Here are some numbers:

Sales on Cyber Monday, a day devoted to online bargains, hit a record $6.59 billion. That’s an increase of nearly 17% compared to 2016, according to reports.

Online retailers bagged nearly $8 billion on Thanksgiving and Black Friday, up nearly 18% compared to 2016, according to Reuters.

The strong turnout is good news for the traditional retail sector, which has experienced a steep decline in sales in recent years.

Foot traffic to bricks and mortar stores decreased less than 1% on Black Friday, compared to 2016, according to industry reports. Consumers still spent a record $5 billion that day, with 54% of online shopping visits coming from mobile devices.

Good news for the slumping brick and mortar retail sector?

The strong turnout is good news for the traditional retail sector, which has experienced a steep decline in sales in recent years.

Chain stores including RadioShack, Payless Shoe Source, and The Limited have filed for bankruptcy in recent years. Once big name retailers such as Sears and J.C. Penney have also closed locations. And In the first four months of 2017, the retail sector lost 72,000 jobs, according to a recent report by Bloomberg Businessweek.

The retail industry is also one of the largest segments of the economy, generating nearly $5 trillion in sales in 2016, according to the U.S. Census Bureau.

Retail is also a big employer. About 16 million people work for U.S. retailers, or one in nine people, according to recent reports. More than 8 million people work as retail salespeople and cashiers, according to the Bureau of Labor Statistics.

The post Retailers Rejoice! Black Friday and Cyber Monday Racked Up Record Sales appeared first on Stash Learn.

Walmart, based in Bentonville, Arkansas, reported strong financial results for its second quarter on Thursday. The world’s largest retailer, which has annual revenue of nearly $500 billion, is benefitting from pouring cash into increasing in-store customer experiences, and amping up its online presence, financial analysts say.

Here are some highlights from Walmart’s second quarter earnings report:

• Revenue, or customer sales, increased 2.1% to $124 billion.
• Its comparable store sales increased 1.8%. This metric, sometimes referred to as same-store sales, compares the second quarter sales for Walmart stores that have been open for at least one year, to their sales in the same quarter a year earlier. Retailers use same-store sales data to get a clear picture of store performance. This is Walmart’s 12th consecutive quarter of same-store sales increases, according to the retailer.
• Walmart’s same-store traffic also ticked up 1.3%.
• The company’s operating expenses, or amount of cash it spent in the quarter, levered up about 4% as it increased expenditures on its ecommerce offering.

Walmart is increasingly going head to head with ecommerce king Amazon, which dominates sales in the online world. Walmart has made significant investments in its own ecommerce offerings in recent years, including through its 2016 purchase of Jet.com for $3 billion, which helped it increase its distribution network for online sales, analysts say.

Both Walmart and Amazon are also competing over grocery sales. Amazon’s recent purchase of Whole Foods signalled its intent to become a serious player in that sector, experts say. Similarly, Walmart gets more than half of its revenue from food sales, which also contributed to strong growth in the quarter, the company said in its earnings report.

Key takeaways: While the retail segment has been in a slump for the past year or more, there are bright spots. Walmart is one of them. The company posted strong earnings for its most recent quarter, thanks to online and grocery sales.

You may also want to read: What to Make of All the Layoffs in the Retail Industry

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But the retail sector has been in a slump in recent years.

What is the retail industry?

The retail industry is filled with big name brands you probably use almost on a daily basis. We’re talking about companies like Best Buy, Costco, Home Depot, J.C. Penney, Target, and Walmart, to name just a few.

These companies are often called bricks and mortar stores, because unlike online competitors like Amazon, they operate from physical stores where consumers come in to shop around and make their purchases.

But many of these stores are experiencing difficulties, because the way people are spending money is reportedly changing.

Retail sector: The challenges

Scores of retail stores have filed for bankruptcy or closed their doors in the past year, including RadioShack, Payless Shoe Source, and The Limited. And in the first four months of the year, the sector lost 72,000 jobs, according to a recent report by Bloomberg Businessweek.

That’s potentially a big problem because retail is also one of the largest segments of the economy, generating nearly $5 trillion in sales in 2016, according to the U.S. Census Bureau. That’s roughly one third of the Gross Domestic Product, or GDP, which is the total of all goods and services the economy produces.

Retail is also a big employer.

About 16 million people work for U.S. retailers, or one in nine people, according to recent reports. More than 8 million people work as retail salespeople and cashiers, according to the Bureau of Labor Statistics. That’s about five percent of the entire U.S. labor force.

So what’s going on?

• Increasing numbers of shoppers prefer to make their purchases online. E-commerce shopping is expected to grow by more than 40% to about $500 billion by 2020, according to research firm Forrester. Of course, Amazon is the 800 pound gorilla in online shopping, and in recent years it’s made big inroads in shopping, with easy return policies and services like Prime, which promise to get users deliveries within two days.
• But even some of the traditional retailers are launching their own e-commerce divisions, which can cut down on sales at bricks and mortar stores. And it turns out they are automating jobs that used to be done by people.
• There’s an oversupply of malls. And when big anchor tenants–the Macy’s and Sears of the world–don’t do well and decide to leave, there’s a spillover effect, reducing traffic to other retail stores.
• People appear to be spending their money in different ways–like going out more for dinner more, for vacations, and on the ever-increasing cost of health care, according to a recent report in The Economist.

Is there any good news for the retail sector?

It’s not all gloom and doom however. While e-commerce is certainly a growth opportunity for jobs, U.S. consumers still prefer to shop in stores for most products, according to this report.

The Bureau of Labor Statistics forecasts the number of traditional retail sales jobs to continue growing by 5% through 2024.

Key takeaways:

Consumer spending fuels the U.S. economy, and the retail sector is one of the biggest employers in the U.S. In recent years, the traditional retail industry has suffered from weaker sales and layoffs as e-commerce sales have continued to gain ground. Still, U.S. consumers still prefer to shop in stores for most items.

The post What to Make of All the Layoffs in the Retail Industry 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  

The post What’s Happening with Tech Earnings? appeared first on Stash Learn.

But the retail sector has been in a slump in recent years, and that’s potentially a cause for concern for the many people who work in the industry, including many who invest on Stash.

What is the retail industry?

The retail industry is filled with big name brands you probably use almost on a daily basis. We’re talking about companies like Best Buy, Costco, Home Depot, J.C. Penney, Target, and Walmart, to name just a few.

These companies are often called bricks and mortar stores, because unlike online competitors like Amazon, they operate from physical stores where consumers come in to shop around and make their purchases.

But many of these stores are experiencing difficulties, because the way people are spending money is reportedly changing.

Retail sector: The challenges

In fact, scores of retail stores have filed for bankruptcy or closed their doors in the past year, including RadioShack, Payless Shoe Source, and The Limited. And In the first four months of the year, the sector lost 72,000 jobs, according to a recent report by Bloomberg Businessweek.

That’s potentially a big problem because retail is also one of the largest segments of the economy, generating nearly $5 trillion in sales in 2016, according to the U.S. Census Bureau. That’s roughly one third of the Gross Domestic Product, or GDP, which is the total of all goods and services the economy produces.

Retail is also a big employer. About 16 million people work for U.S. retailers, or one in nine people, according to recent reports. More than 8 million people work as retail salespeople and cashiers, according to the Bureau of Labor Statistics. That’s about five percent of the entire U.S. labor force.

And a slump in retail is likely to hit home for those of you who invest with Stash. Of those who have reported the industry in which they work, roughly 40% say they’re employed by the biggest U.S. retailers.

So what’s going on?

• Increasing numbers of shoppers prefer to make their purchases online. Ecommerce shopping is expected to grow by more than 40% to about $500 billion by 2020, according to research firm Forrester. Of course, Amazon is the 800 pound gorilla in online shopping, and in recent years it’s made big inroads in shopping, with easy return policies and services like Prime, which promise to get users deliveries within two days.
• But even some of the traditional retailers are launching their own eCommerce divisions, which can cut down on sales at bricks and mortar stores. And it turns out they are automating jobs that used to be done by people.
• There’s an oversupply of malls. And when big anchor tenants–the Macy’s and Sears of the world–don’t do well and decide to leave, there’s a spillover effect, reducing traffic to other retail stores.
• People appear to be spending their money in different ways–like going out more for dinner more, for vacations, and on the ever-increasing cost of health care, according to a recent report in The Economist.

Is there any good news for the retail sector?

It’s not all gloom and doom however. While ECommerce is certainly a growth opportunity for jobs, U.S. consumers still prefer to shop in stores for most products, according to this report.

The Bureau of Labor Statistics forecasts the number of traditional retail sales jobs to continue growing by 5% through 2024.

Here are a few more details about Stash investors who work in the retail sector:

• The majority earn less than $25,000 annually.
• The top three funds they’ve invested in are the Moderate Mix and Blue Chips and Conservative Mix funds.
• By contrast, the top funds for the average Stash investor are Delicious Dividends, Blue Chips, and Moderate Mix funds.  

Key Takeaways:

Consumer spending fuels the U.S. economy, and the retail sector is one of the biggest employers in the U.S. In recent years, the traditional retail industry has suffered from weaker sales and layoffs as Ecommerce sales have continued to gain ground. U.S. consumers still prefer to shop in stores for most items.

The post What’s Causing the Retail Slump? appeared first on Stash Learn.

In simple terms, cloud computing is a way of storing, accessing, and syncing data and software through the internet instead of your local computer hard drive. The ‘cloud’ is actually a global network of servers. To say those servers host massive amounts of data is an understatement.

Through web-based tools and applications, information is accessible anytime from any device with internet access and can be shared with others as you choose. Have a Gmail account? Your web-based email system is in the cloud. Share business documents with colleagues via Dropbox or Google Docs? That’s the cloud.

According to a 2016 study, the big data and business analytics industry is expected to grow 56% and become a $203 billion market by 2020.

Backup your phone’s photos and videos? Stored in the cloud. Netflix? You guessed it – they host their video content on Amazon Web Services, aka the cloud.

The cloud takes shape

The cloud isn’t only about data storage. Cloud-based applications have transformed the way we do business. Remember the days when email chains included twenty different versions of the same document, all at various stages in the editing process? As part of a whole suite of cloud-based applications, Google Docs allows users to collaborate and work simultaneously, showing real-time updates from anywhere in the world.

The cloud isn’t only about data storage. Cloud-based applications have transformed the way we do business.

Businesses that leverage big data use the cloud to capture, organize, and analyze massive data sets, something that was not possible before the cloud. According to a 2016 study, the big data and business analytics industry is expected to grow 56% and become a $203 billion market by 2020. In 2016, the banking industry led the way, investing almost $17 billion in software for risk management and fraud prevention.

Salesforce, Netflix, and Facebook don’t offer cloud services, but they rely on the cloud to provide their service to you

It takes more than just computer software companies to make the cloud possible. Sure, there are the pure play cloud computing companies that offer direct services such as network hardware and software, internet marketing and services, IT support, communications equipment, storage, and peripherals.

But there’s also non-pure players, like Salesforce, Netflix, and Facebook. They don’t offer cloud services, but they rely on the cloud to provide their service to you.

The technology behind cloud computing was first developed in the 1950s, but what we have come to know as ‘the cloud’ didn’t take shape until the turn of the 21st century when Salesforce stopped selling its software on disc and started providing their applications via the web.

If you think the best is yet to come with cloud technology, then consider an investment in an ETF on Stash that’s all about the cloud.

What’s inside On Cloud 9?

This investment (Ticker: SKYY) includes cloud computing companies – both pure play and non-pure play alike. Remember, pure play means the company actively supports and forms the cloud, and non-pure play companies utilize the cloud to provide their service.

• Tech hardware companies like Netapp and Hewlett Packard that create the systems and the equipment
• Software masters like Microsoft, Oracle, and Adobe
• Industry giants like Amazon and Apple that provide cloud storage data centers
• Companies like Google that provide industry-leading cloud-based applications
• And yes, even social media giants like Facebook and providers like Netflix who rely on the cloud to enable your binge-watching marathons.

At the time of this post, On Cloud 9 includes 33 companies. On Cloud 9 is ‘The First Trust ISE Cloud Computing Index Fund’ (SKYY) and has a 0.60% expense ratio.

Is the sky the limit?

What’s next in the world of cloud computing? More mobile capabilities, wearable technology, machine learning and AI (artificial intelligence). The Internet of Things (IoT), where machines connect to other machines and sensors, gathering data and leveraging it thanks to cloud computing, will one day revolutionize everything from smart refrigerators to smart stethoscopes to smart roads, bridges, and cars.

The cloud has the potential to touch almost everything we do – and companies of all sizes, including those that are still only an idea, will use the cloud to grow bigger, faster, and more innovative.

If you think that we’re just getting started, consider an investment in On Cloud 9.

The post Investment Profile: On Cloud Nine appeared first on Stash Learn.