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Posts Tagged ‘Technology’

The Great U.S.‑China Tech Divide

Posted by hkarner - 22. Januar 2020

Date: 21‑01‑2020

Source: The Wall Street Journal

The two countries are headed toward a world where they will have mutually exclusive systems for all important forms of technology

U.S.‑China tech tension centered initially on Huawei and the telecom sector, but has since spread through most of the tech industry. 

In terms of technology, the world had been unifying for years. Now it is reverting back to the likes of the VHS‑versus‑Betamax era, with much bigger consequences.

 Imagine two countries with completely different sets of hardware and software for the internet, electronic devices, telecommunications, and even social media and dating apps.

 That is the direction the U.S. and China are headed in—a world where the two global powers have mutually exclusive technology systems. Den Rest des Beitrags lesen »

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The trillion‑dollar club: technology stocks

Posted by hkarner - 16. Januar 2020

Date: 15‑01‑2020

Source: The Economist

Amazon, Apple and Microsoft have already done it. And this week Alphabet, Google’s parent, is, for the first time, also flirting with a $1trn market capitalisation.

Big Tech shares keep soaring after a banner 2019, which saw the quartet outpace America’s frothy stockmarket.

Add Facebook, and America’s five biggest companies have gained a cumulative $1.8trn since the start of last year.

Surely, this cannot go on. Or can it? Although the Sino‑American trade war has spilled over into tech and controversies rage at home over abuses of user privacy and market power, the giants keep printing money.

After years of sacrificing profits for investment, even Amazon (poised to rejoin the $1trn gang soon) has generated billions in free cashflow.

Investors reckon more of this will be returned to shareholders, starting with Alphabet. A new chief executive, Sundar Pichai, took over from Google’s founders in December. He is expected to be more shareholder‑friendly—and less dividend‑wary.

 

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Tech Will Rule These ’20s, Too

Posted by hkarner - 7. Januar 2020

Date: 06‑01‑2020

Source: The Wall Street Journal By Andy Kessler

Breakthroughs in health and data could match the consumer boom of 100 years ago.

Does history rhyme? A century ago, the ’20s boomed, driven by consumer spending on homes, cars, radios and newfangled appliances like refrigerators, sewing machines and vacuum cleaners. Most Americans couldn’t afford the upfront cost of a lot of these goods, so manufacturers and retailers invented installment plans. Debt ruled as 75% of cars, furniture and washing machines were bought on credit.

The supply‑side policies of Treasury Secretary Andrew Mellon, who pushed for tax cuts in 1921, 1924 and 1926, increased the capital available for new consumer businesses. The consumption boom also sparked a giant service industry: My grandfather ran Kessler’s Refrigeration Service in Brooklyn, N.Y. Lifestyle advertising was perfected on billboards and in tabloids, which, like today, led to complaints about ads’ ubiquity and influence.

And stocks were hot, hot, hot. Radio Corp. of America shares were worth $11 in 1924, $20 in January 1928 and $114 in 1929, with a peak price/earnings ratio of 72. Turns out equities could be bought on installment too—sometimes a margin loan with a measly 10% down payment.

Like the movie “Titanic,” you know how this ends. Speculation. Tariffs. And finally, the crash of Oct. 28‑29, where the market dropped 13% on Black Monday and 12% on Black Tuesday, triggering widespread margin calls for debt repayment. That risk is why the Federal Reserve now caps stock margins at 50%. According to legend, it’s also why windows in New York skyscrapers don’t open. By 1932, RCA stock was worth $3. Den Rest des Beitrags lesen »

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With the state’s help, Chinese technology is booming

Posted by hkarner - 6. Januar 2020

Date: 05‑01‑2020

Source: The Economist

But it will not be a smooth road to global dominance, says Hal Hodson

For most of human history, China was the world’s most advanced technological power. The blast furnace originated there, and thus so, too, did cast iron. Other breakthroughs included porcelain and paper. Its gunpowder propelled the first military rockets farther than javelin or arrow could fly; its compasses magically revealed magnetic north when the stars were hidden.

Only in the Middle Ages did Europe began to match Chinese ingenuity and capacity in these fields, doing so largely through imitation.

Only with the growth of European mechanical industries and overseas empires in the 18th century did the Westerners become its rivals. In the centuries that followed, hampered by its own stifling education system, China was defeated in the opium wars, then suffered terrible civil unrest and a disastrous revolution that reduced the country to a technological bystander and “Made in China” to a byword for gimcrackery. Den Rest des Beitrags lesen »

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The tech giants dominated the decade. But there’s still time to rein them in

Posted by hkarner - 28. Dezember 2019

Date: 26‑12‑2019

Source: The Guardian by Jay Owens

Google, Amazon and Facebook moved at a scale and speed governments couldn’t match. Now regulators are trying to catch up

‘It became clear big tech is a problem for citizens.’ Mark Zuckerberg, CEO of Facebook, testifying at a House energy and commerce hearing in Washington DC, April 2018.

The 2010s will be remembered for a new era in the development of capitalism, one of mind‑boggling scale. Apple, Amazon and Microsoft are closing the decade as the world’s first trillion‑dollar companies. Last year, Apple’s revenue was larger than Vietnam’s GDP, while Amazon’s research and development spending alone is almost as much as Iceland’s GDP. Facebook boasts 2.4 billion users, a population larger than that of every continent except Asia.

Big tech may offer much to us as consumers but, as the decade progressed, it became clear that it presents a problem for us as citizens who want elections that adhere to advertising laws and are free from foreign interference. It’s also a problem for people who want to live in towns with functioning retail high streets, where Amazon’s ruthless margin‑squeezing means poorly paid, zero‑hour gigs in logistics and delivery are the norm. And it’s a problem for us as democrats who depend on independent news media to hold our elected representatives to account. Den Rest des Beitrags lesen »

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Is Tech a New Frontier for Sustainability?

Posted by hkarner - 14. Dezember 2019

DaDate: 12 12 2019
Source: Project Syndicate by BERTRAND BADRÉ , PHILIPPE HEIM

Bertrand Badré, a former Managing Director of the World Bank, is CEO of Blue like an Orange Sustainable Capital and the author of Can Finance Save the World?

Philippe Heim is Deputy CEO of Société Générale.

Financial institutions must address the issue of technological sustainability, especially with regard to data, robotics, and artificial intelligence. Although these new technologies have vast potential, businesses also need to understand their risks, social impact, and ethical implications.

PARIS – Discussions about “sustainability” usually center on a company’s environmental and social commitments, and for understandable reasons. But the financial sector in particular should consider two other, less obvious, dimensions of sustainability. Regulatory sustainability is essential for addressing the systemic risk that the financial sector poses to our societies. In addition, the emerging new frontier of technological sustainability is having an increasing impact on business models and strategies. Den Rest des Beitrags lesen »

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The Five Traits of True Tech

Posted by hkarner - 3. Dezember 2019

Date: 02‑12‑2019

Source: The Wall Street Journal By Andy Kessler

Every company wants the label, but real highly valued tech has defining features.

It seems everyone wants to be a technology company these days. But not every company is worth 40 times earnings and 15 times sales in the stock market. How can you tell which growing companies might sustain that valuation? Put more broadly, in the wake of WeWork’s woes, what qualifies a company as highly valued tech?

Any company can call itself tech. Heck, Long Island Iced Tea Corp. changed its name in 2017 to Long Blockchain Corp. and the stock popped 400% to $13 (it’s now $0.16). But can companies that sell razors, glasses or mattresses be high tech? Exercise bikes? Insurance? Or even ads? Den Rest des Beitrags lesen »

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How Apple and Microsoft Dwarf the Rest of the Market

Posted by hkarner - 26. November 2019

Date: 25-11-2019
Source: The Wall Street Journal

The two largest U.S. companies helped lift the Dow industrials above 28000 for the first time earlier this month

People check out the new iPhone at an Apple store in Shanghai. Apple and Microsoft have helped buoy the broader technology sector while they vie for the title of largest U.S. firm.

Apple Inc. and Microsoft Corp. helped lift the Dow industrials above 28000 for the first time earlier this month, a milestone that underscored how much the two largest U.S. companies influence major stock indexes.

Boosted by optimism about a U.S.-China trade deal and sturdy profit growth, the companies have helped buoy the broader technology sector while they vie for the title of largest U.S. firm. Apple shares have soared 66% this year, pushing it ahead of Microsoft with a $1.16 trillion market value. Revenue growth in Apple’s services business and products outside the iPhone have fueled fresh enthusiasm for the stock. Den Rest des Beitrags lesen »

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Top 10 Emerging Technologies Of 2019

Posted by hkarner - 20. November 2019

Date: 20-11-2019
Source: Scientific American

World-changing technologies that are poised to rattle the status quo

One day soon an emerging technology highlighted in this report will allow you to virtually teleport to a distant site and actually feel the handshakes and hugs of fellow cyber travelers. Also close to becoming commonplace: humanoid (and animaloid) robots designed to socialize with people; a system for pinpointing the source of a food-poisoning outbreak in just seconds; minuscule lenses that will pave the way for diminutive cameras and other devices; strong, biodegradable plastics that can be fashioned from otherwise useless plant wastes; DNA-based data-storage systems that will reliably stow ginormous amounts of information; and more.

Together with the World Economic Forum, Scientific American convened an international Steering Group of leading technology experts and engaged in an intense process to identify this year’s “Top 10 Emerging Technologies.” After soliciting nominations from additional experts around the globe, the Steering Group evaluated dozens of proposals according to a number of criteria: Do the suggested technologies have the potential to provide major benefits to societies and economies? Could they alter established ways of doing things? Are they still in early stages of development but attracting a lot of interest from research labs, companies or investors? Are they likely to make significant inroads in the next several years? The group sought more information where needed and honed the list in four virtual meetings. Den Rest des Beitrags lesen »

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Technology Stocks Head Toward Best Year Since 2009

Posted by hkarner - 20. November 2019

Date: 19-11-2019
Source: The Wall Street Journal

Regulatory scrutiny and mixed earnings aren’t stopping the group from rallying

Shares of chip maker Applied Materials have soared 90% this year.

Technology stocks are racing toward their best year in a decade, underscoring
investors’ interest in companies offering everything from memory chips to social-media platforms.

Investors have favored shares of rapidly growing, relatively pricey companies over their more low-valued counterparts for much of the more-than-decadelong bull market.

Although the latter group has rebounded over the past three months, technology stocks remain the market’s leaders: The S&P 500 technology sector’s 41% gain for the year has put the group well above the S&P 500’s 25% climb and on course for its biggest one-year advance since 2009.

That is even as investors have had to grapple with issues including controversies over how big tech companies have handled users’ data, antitrust probes and trade tariffs targeting consumer devices.

To many money managers, the gains reflect confidence that technology companies will be able to continue delivering robust sales and earnings growth even as the broader economy shows signs of cooling.

“This is where the growth is over the long term, so you’re always going to get a pretty good bid” for technology shares, said Katie Nixon, chief investment officer of Northern Trust Wealth Management.

Among the biggest gainers in the sector are semiconductor manufacturers, as well as the companies that create devices to make chips. Applied Materials Inc. has soared 90% this year, Tokyo Electron Ltd. has jumped 85%, ASML Holding NV has risen 81% and Lam Research Corp. has more than doubled.

“They are the companies that are enabling the semiconductor manufacturers to make denser chips with more transistors on them,” said John Freeman, vice president of equity research at CFRA. “They hold the keys, so they hold the pricing power at this point.”

Shares of companies focusing on electronic payments also have done particularly well—something investors have attributed to the technology’s growing presence around the world.

“If you would have told me 20 years ago I was going to pull out my Visa card to pay a one-dollar parking meter on a square in Madison, Wis., I’d have said you’re nuts, but now that’s the only compensation they accept,” said Tom Plumb, president and portfolio manager at Plumb Funds.

Mr. Plumb said his firm’s largest holding is Visa Inc., which has risen 36% this year. The firm also holds shares of Mastercard Inc., which are up 49%. Both companies reported better-than-expected earnings in October for their latest quarters, buoyed by higher spending on credit and debit cards.

To be sure, after a big rally, some investors say they believe parts of the technology sector may have run up too far. Nearly one in three fund managers believes the most crowded trade in markets is betting on a rise in U.S. technology shares and other rapidly growing companies, according to a Bank of America survey conducted earlier in November.

And in a field that is particularly reliant upon innovation, some companies will be better investments than others.

“Just because you’re sitting on top of the world, doesn’t mean you’re going to stay there,” Mr. Freeman said. For instance, Oracle Corp. —up 24% for the year—is one of the biggest software companies in the world, but it could still be at risk because it was late to cloud computing, he said.

Then there are earnings: Among the S&P 500’s 11 sectors, technology companies actually posted among the steepest declines in profits for the third quarter, according to FactSet. The sector reported a roughly 5.3% drop in earnings from the year-earlier period, compared with a 2.3% decline for the broader S&P 500.

Within the past few months, a handful of technology-driven companies have reported momentum slowing. Amazon.com Inc. posted its first earnings decline in more than two years and Netflix Inc. missed its subscriber-growth target for a second consecutive quarter.

But money managers say technology stocks have been able to continue rising anyway in part because expectations were low heading into earnings season. As of June 30, analysts had expected the technology sector to report a 9.4% drop in third-quarter earnings, according to FactSet.

Technology executives managed to temper investors’ expectations heading into the second half of the year, Ms. Nixon said, making even the relatively weak earnings better than feared.

That has helped money managers justify buying technology shares that have grown to look pricey.

The S&P 500 technology sector trades at roughly 21 times its next 12 months’ projected earnings, according to FactSet. In comparison, the broader index trades at 18 times.

“This is an environment where we’re finding opportunities,” said Eric Wiegand, investment portfolio manager for the private wealth team of U.S. Bank, which has emphasized software and service companies within technology holdings.

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