SEC Now Allowing Anyone The Ability To Invest In the Next Uber Or Facebook

by 2 years ago

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“It was good timing…Obviously kids are good for Disney.” — Walt Disney chief Robert Iger, expressing his joy over China’s easing of its one-child policy. The timing couldn’t be better, as Disney is opening a major theme park in Shanghai next year.

MARKET SNAPSHOT 

A Month to Remember

  • Don’t let Friday’s down day deceive you: October was a month to remember. The S&P 500 gained over 8 percent as every sector advanced, and it was the index’s best month since October of 2011. Europe was the real winner, logging its best month since 2009. Why the optimism after a couple rough summer months? Two words: Central Banks. With the Fed holding rates at zero, the ECB considering additional stimulus and China’s central bank cutting interest rates yet again, investors liked what they heard.
  • In other news, not even billionaire investor Bill Ackman can save scandal-ridden Valeant Pharmaceuticals. Despite holding a four hour presentation on Friday to defend his $4 billion investment in the drugmaker accused of accounting fraud, shares fell another 15 percent to hit a two-year low.
  • Hillary Clinton is on the attack again: first it was the biotech industry earlier this month, now it’s private prisons. After tweeting that “we need to end private prisons,” surprise, surprise—private prison stocks tanked across the board. Where will Clinton direct her influence (and wrath) next?
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U.S. MACRO 
Banks in Need of MoneyA new proposal by the Federal Reserve would require U.S. banks to raise $120 billion. Why? The requirement aims to ensure that some of the largest and most influential banks could withstand another financial crisis—i.e. saving for a rainy day. It may seem burdensome, but the U.S. is in an enviable position: on Saturday, a day after the Fed’s statement, the European Central Bank released a report saying Greece’s banking system needs $15.8 billion—just to resume normal operations. The review of Greece’s four largest banks comes after a third bailout of $94.6 billion in August. On the bright side, the remaining shortfall is less than expected, and Greek banks can now submit proposals to boost their capital.

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CORPORATE PRIMER

Oil & Gas Earnings Recap

What does it take to get a CNBC talk show host to compare you to the Kansas City Royals? Just blow past earnings expectations by 43 percent like Chevron did. The trend is simple: companies that have shut the oil taps and found new ways to earn revenue are coming out on top. Exxon beat earnings as well by shifting its source of income towards its refinery business, which becomes more profitable as oil prices fall, further disconnecting itself from swings in oil prices.
The Beginning of Startup Investing
Yesterday, the SEC cut down investing rules rather than adding them (that’s a first). Now, the average investor will be allowed to buy stock in startup companies. What’s the appeal? You could get in on the next Uber, Instagram or Facebook with minimal investment. What’s the danger? Around half of all startups fail within five years—not to mention that fraud, crowdfunding and startups all go hand in hand.

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TODAY IN TECH

Bye Bye Daily Deals

Amazon just announced that it will be cutting Local, its daily deals division. It’s a sad, but unsurprising development. After all, Amazon’s not the only one depriving you of sales and discounts: daily deals companies such as LivingSocial and Groupon have also been making cuts. Daily Deals were once considered the next big thing, but the crowded email space and sometimes-poor economics of coupon services have caused daily deals to flop. Don’t get the wrong idea about Amazon, though: the online retail giant isn’t sweating the move.

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OTHER STORIES

  • NBC Universal sued for defamation over Straight Outta Compton
  • ESPN suspends Grantland website
  • GOP tells NBC next debate to be suspended
  • What we know about Russia’s deadliest-ever plane crash
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ECONOMIC CALENDAR

  • Monday: Allstate, AIG, Fitbit, Visa Earnings; ISM Manufacturing Index
  • Tuesday: Tesla, Sprint, Groupon, Herbalife, Zynga, Kellogg, Papa John’s, Denny’s Earnings
  • Wednesday: Facebook, Qualcomm, Time Warner, Twenty-First Century Fox, GoDaddy, Michael Kors, Whole Foods, Wendy’s Earnings; U.S. Trade Deficit
  • Thursday: Walt Disney, Shake Shack, Monster Beverage, TripAdvisor, NVIDIA, AMC Networks, SeaWorld, Ralph Lauren, Celgene Earnings; Weekly Jobless Claims
  • Friday: Cigna Earnings; Unemployment Report

BOEHNER’S PARTING GIFT

John Boehner may no longer be speaker of the House, but he made sure to leave a lasting mark on his way out—Congress just agreed on a bipartisan budget bill developed while Boehner was speaker, which Obama will likely sign later today. Budget bills may not be the most exciting legislation out there, but they’re important: this one will reduce the likelihood of a government shutdown in the next two years. Here’s more:

  • The deal will increase spending by $80 billion over the next two years, and will also raise the debt ceiling. This may sound like a lot, but in the grand scheme of things, it’s nothing: the U.S. has a $4 trillion annual budget.
  • The deal also passed in the nick of time: if it hadn’t passed, next week may have seen a repeat of 2013’s 16-day government shutdown.
  • The bill qualifies as bipartisan, but just barely: it passed the House with lots of backing from the Democrats, but only a third of Republicans. The Senate vote was 64-35, with all 35 no votes from Republicans.

INTERVIEW QUESTION OF THE DAY

A man in a restaurant asked a waiter for a juice glass, a dinner plate, water, a match and a lemon wedge. The man poured enough water onto the plate to cover it.
“If you can get the water on the plate into this glass without touching or moving this plate, I will give you $100,” the man said. “You can use the match and lemon to do this.” A few minutes later, the waiter walked away with $100 in his pocket. How did the waiter get the water into the glass? (Answer)

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BUSINESS TERM OF THE DAY

Offering Price — The price at which publicly issued securities are made available for purchase by the investment bank underwriting the issue. A security’s offering price includes the underwriter’s fee and any management fees applicable to the issue.

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FOOD FOR THOUGHT
112 pages: the length of an internal document that was leaked from Jeb Bush’s presidential campaign. It includes an advertising plan and blasts Marco Rubio, another Republican nominee.

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