Category Archives: Blogging

Amazon doubles down on profits

Amazon doubles down on profitsWith the release of Amazon’s Q1 earnings, its share price has soared to a record high and the company’s trajectory towards overtaking Apple as the world’s largest company seems assured.

The brainchild of CEO Jeff Bezos, Amazon appears to be an unstoppable force. In the first three months of 2018, Amazon more than $550m a day from Amazon.com sales and other ventures, including Whole Foods, the premier grocery chain acquired just last year. There was also strong growth in Amazon Web Services (AWS), which delivered an impressive $1.4 billion in profits – the bulk of Amazon’s profits over the quarter.

Interestingly, these results were achieved, despite President Trump’s determination to make the company pay more tax and higher postal rates – changes that experts believe would have negligible impact on Amazon’s status.

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Could Trump’s tariffs spark a trade war?

China has responded to Trump’s protectionism with tit-for-tat tariffsWhile many presidential promises evaporate on entering the Oval Office, Trump has certainly proved to be a man of his word when it comes to honouring his campaign trail commitment to pursuing a more protectionist trade policy.

Within just a few days of acceding to the presidency, Trump drove a truck through the emerging Trans-Pacific Partnership (TTP) and agreed to take a fresh look at the North America Trade Agreement (NAFTA) to try to squeeze a better result for the United States. Next, hot on the heels of his announcement of the imposition of tariffs on solar panels and washing machines, a new set of curbs on steel and aluminum imports was introduced. Most recently, Trump has announced the introduction of a wider swathe of tariffs that will slap a 25% tax on an as-yet-unspecified $60 billion-worth of Chinese imports.

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Will US tax reform tempt Apple back home?

Apple has announced plans to repatriate some of its cash holdingsAnother bite of the Apple

Could times be a-changing for tech giant Apple? After coming under fire for its tax evasion policies, it seems as if the company could be softening its stance towards corporate tax obligations, as CEO Tim Cook announced in January that Apple would be making a payment of $38 billion to repatriate part of its overseas cash holdings. Cook also committed to spending $30 billion in the US over a five-year period, creating 20,000 jobs and a new campus in the process.

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Will FCC plans to dismantle net neutrality signal the end of online equality?

How will FCC plans to dismantle net neutrality affect our access to the internet?What is Net Neutrality…

Everyone deserves a fair slice of the internet pie – don’t they? Well, it’s an argument that’s up for discussion in the closing months of the year as rules enacted by the Obama administration – designed to ensure equal access to the internet for all – are facing drastic reform.

Net Neutrality classes access to the internet as the digital equivalent of an essential public utility – like electricity – with equal rights for all. The regulations prevent internet service providers (ISPs) such as AT&T and Verizon from speeding up, slowing down or blocking content, applications or websites. Without these rules, ISPs could theoretically control how internet access is delivered, providing a preferential service to those who can afford to pay, while leaving others languishing in the slow lane.

…And why does the government want to repeal it?

The Federal Communications Commission (FCC) chairman, Ajit Pai, has proposed a plan to dismantle these so-called ‘net neutrality’ regulations, opening the door for ISPs to vary fees on a customer-by-customer basis.

Mr Pai said in a statement: ‘Under my proposal, the federal government will stop micromanaging the internet. Instead, the FCC would simply require internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them.’

Pai, who was appointed by Trump, has overseen the repeal of several other regulations governing broadcasters and news agencies that were intended to protect public interests – including a rule limiting any organisation from controlling broadcasts that are capable of reaching more than 39 percent of US homes.

Will pay-to-play favour established companies?

The announcement has sparked a row over free speech, as opponents of the plan fear the dominant telecom companies will increase their power base at the expense of smaller innovation-based businesses, arguing that only big players will be able to afford to pay for preferential speeds. Consumers may also feel the pinch as the cost of streaming content from services like Netflix could sky-rocket.

Advocates of the repeal counter that the current rules limit consumer choice and prevent ISPs from experimenting with new business models. AT&T, among others, contends that this kind of heavy-handed regulation represents unnecessary government intervention that will restrict the scope of ongoing investment, resulting in a lower-quality service for all over the long-term.

What’s next?

Internet access companies believe it’s a lot of fuss over nothing, claiming that customers can trust them to act in good faith, continuing to provide good service and voluntarily sticking to the principles of Net Neutrality. They argue that, as in any free market, competition will hold providers to account.

It’s fair to say, though, that if carriers are charging more for high-speed services, it’s likely that bigger costs will hit consumers’ pockets at some point, though the FCC claims that companies will still be covered by laws governing anti-competitive behaviour.

This latest proposal will probably be played out in court as companies like Google and Facebook are expected to lead the resistance to Pai’s planned reform. It remains to be seen which argument will prevail.

Tech firms spark record highs in US stock markets

US stock markets hit new peaks as tech companies returned upbeat resultsTech stocks on the rise

US stock markets are surfing new highs as better-than-forecast results from technology giants are boosting gains across the sector. Although stronger economic growth in the US and globally has given rise to increased business confidence across the board, it’s estimated that a quarter of the S&P 500’s record-breaking return this year is down to a handful of over-performing tech stars.

The S&P 500’s gains put the index firmly on track to record its 104th month in a bull market. In fact, the price-to-earnings ratio of the US stock market hasn’t been this high since the dotcom bubble of the 1990s. And while there are no signs of an imminent crash, it’s a scenario that’s making some investors nervous.

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Huge rise in personal wealth as stock markets boom

A million people join ranks of super wealthy thanks to stock market boomRising wealth hits new highs

The number of high net worth individuals – those with free assets of more than $1m – has grown exponentially, as booming stock markets in the US and Europe propelled more than a million people into the ranks of the super wealthy, bringing the current global count to a record 16.5 million.

According to a recent report by business consultancy Capgemini, the world’s high net worth individuals (HNWI) have collectively amassed an eye-watering fortune of $63.5 trillion. Last year alone, 1.1 million people joined this exclusive club – a rise of 8.2% – far outstripping the 6.5% annualised growth across the previous five years. Researchers predict that HNWI wealth is on track to exceed $100 trillion by 2025.

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