Author Archives: Scalper1

Amazon Primes Pump, Hikes Minimum Free Shipping For Non-Subscribers

Amazon.com ( AMZN ) shipping got more expensive Monday, as the company announced  it was raising its free shipping minimum 40% to $49. The move, of course, only pertains to non-subscribers of its Amazon Prime loyalty program, since those subscribers get free shipping on any order. Amazon’s latest move is likely intended to drive more Prime subscription growth and also cut down on shipping costs. Amazon stock rose 4.6% to 559.50 on the stock market today , moving back above its 200-day moving average for the first time since plunging below that mark on Feb. 3. Rival Wal-Mart ( WMT ) has a $50 threshold for free shipping. E-tail startup Jet.com uses $35 as its minimum, while  Target ( TGT ) has a $25 minimum. Wal-Mart stock rose 1.5% on Monday while Target edged up 0.2%. Amazon’s shipping costs have been ballooning as the company offers increasing rapid delivery times — including one-hour delivery in certain markets via Amazon Prime Now. Those costs rose 37% year-over-year in Q4, to $4.7 billion. Rumors continue to swirl about the firm’s long-term plans for its shipping program, as investors and analysts speculate that Amazon is interested in competing with established delivery companies such as UPS ( UPS ) and FedEx ( FDX ). Internal documents seen by Bloomberg seemingly support that theory. And, there have been reports of Amazon getting into the ocean freight business  — which one observers said could generate upward of $100 million in free cash flow — as well as leasing cargo jets and making a large purchase of trucks to haul packages between its fulfillment centers. The documents seen by Bloomberg suggest Amazon is gearing up to compete more with China e-com leader  Alibaba ( BABA ). Besides delivery costs, Amazon has spent billions of dollars on its fulfillment and sortation centers, the last step in the delivery process. Wells Fargo analyst Matt Nemer says Amazon.com captured 51% of all retail growth in Q4 2015 . Amazon’s Prime loyalty program offers free two-day shipping, as well as free streaming audio and video, among other perks. Analysts in general peg Amazon’s Prime customer count near 40 million, with some estimates coming in as high as 50 million. Prime members, on average, spend about twice as much on Amazon.com than regular shoppers. Prime members accounted for 57% of Amazon’s North American sales in Q4, and Prime members spend about 12% more every year, according to ITG Investment Research analyst Steve Weinstein. Nemer has told IBD that Prime is the biggest reason for Amazon’s growth, which during the past two quarters has exceeded 20%.

3 Big-Name Chinese Tech Stocks Rebound Ahead Of Earnings Reports

Loading the player… Earnings season continues this week with three big-name Chinese tech companies reporting: Vipshop ( VIPS ), NetEase ( NTES ) and Baidu ( BIDU ). Here’s what you need to know. Flash-sales site Vipshop is slated to issue its results after the close on Wednesday. Earnings are expected to grow 43% in local currency on a 46% rise in revenue. Vipshop is trying to rebound from recent lows. The stock rose 3.3% in big volume Monday, nearing its downward-sloping 50-day moving average. Vipshop gapped down below that level after issuing its preliminary results last quarter. NetEase also reports after the close on Wednesday. It’s projected to grow earnings by 52% in local currency, while revenue is seen jumping 121%. With a highest-possible IBD Composite Rating of 99, the gaming company is a member of the IBD 50 list of leading stocks. NetEase is working on a consolidation base with a 186.55 buy point, up 4% to 160.08 Monday. The stock is nearing its 50-day line and is trading about 14% below the pivot. China search giant Baidu is expected to see earnings fall 27%, with revenue rising 32% in local currency, when it reports after the close on Thursday. Earlier this month, Baidu said it had received an offer from two executives to buy its 80% stake in online video platform iQiyi in a $2.8 billion deal. Baidu recently tripped a bearish signal when its 50-day line crossed below its 200-day line. But the stock has risen five out of the last six  sessions, including a 2.55% advancen Monday. It’s currently trading about 25% below its 52-week high. And next week, Alibaba ( BABA ) e-commerce rival JD.com ( JD ) are both slated to report their results.

Apple CEO Calls For Government Panel On Encryption Issues

Apple ( AAPL ) CEO Tim Cook on Monday reiterated his concerns about a federal court order that would create a backdoor to bypass the company’s iPhone privacy and security protections. He called for the formation of a government commission or panel to discuss the broader issues involved. “We feel the best way forward would be for the government to withdraw its demands under the All Writs Act and, as some in Congress have proposed, form a commission or other panel of experts on intelligence, technology and civil liberties to discuss the implications for law enforcement, national security, privacy and personal freedoms,” Cook said in an email to employees . “Apple would gladly participate in such an effort.” Last Tuesday, a federal court ordered Apple to create software to hack into an iPhone 5C belonging to one of the shooters in the Dec. 2 attack in San Bernardino, Calif., that left 14 people dead. The FBI wants to see if the password-protected iPhone holds data about possible accomplices and links to Islamist terrorist groups like ISIS. “This case is about much more than a single phone or a single investigation,” Cook said Monday. “At stake is the data security of hundreds of millions of law-abiding people, and setting a dangerous precedent that threatens everyone’s civil liberties.” If the backdoor becomes available, hackers and criminals will try to exploit it, Cook said. It also would create a pathway for U.S. spy agencies and foreign governments to snoop on people’s iPhones. “We use encryption to protect our customers — whose data is under siege,” Cook said. “We work hard to improve security with every software release because the threats are becoming more frequent and more sophisticated all the time.” Apple Faces FBI Deadline This Friday Apple has until this Friday to officially respond to the court order. Last Friday, the Justice Department filed a motion to compel Apple to comply with the court order. The DOJ filing said Apple’s refusal to cooperate is “based on its concern for its business model and public brand marketing strategy.” Apple strongly rejected that assertion. In a question-and-answer posting for customers , Apple said that claim was “absolutely not” true. “Nothing could be further from the truth,” the company said. “This is and always has been about our customers. We feel strongly that if we were to do what the government has asked of us — to create a backdoor to our products — not only is it unlawful, but it puts the vast majority of good and law-abiding citizens, who rely on iPhone to protect their most personal and important data, at risk.” Tech industry and civil liberties groups have voiced support for Apple’s position, while a number of politicians and law enforcement officials have backed the government’s stance. A poll by the Pew Research Center found Americans slightly in favor of the government’s position. Some 51% of respondents said Apple should unlock the iPhone to assist the ongoing FBI investigation. But 38% said Apple should not unlock the phone to ensure the security of its other users’ information. The remaining 11% didn’t have an opinion.