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New Zealand And Australian Dollar Under Pressure Against Greenback

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New Zealand dollars

The New Zealand dollar felt some pressure as it tested its September 30 low recovering to 0.6370 against the US dollar. Support and resistance level for the NZD/USD pair are now at 0.6331 and 0.6485 respectively.

Consumer sentiment in Australia deteriorates

The Australian dollar also lost strength against the U.S. dollar, leaving it trading near 6-year lows. The pair shed 0.85% to settle at 0.6850. The weakness in AUD/USD was driven by softer Australian consumer sentiment data that dipped 3.5% sequentially in January while global outlook continues to be a concern. The pair is likely to find support at 0.6823 and resistance at 0.6962. The Aussie dollar traded sharply lower against the euro, with EUR/AUD marching up by 1.27% to 1.5987.

Declining Chinese growth remains a concern in the backdrop following the new numbers released yesterday. The annual GDP growth in China fell to 6.8% from 6.9% in the previous quarter. Though the numbers met expectations, it reconfirms beliefs that the world’s second-largest economy is not keeping up the pace.

Oil bounce fades as crash continues

The sharp decline in oil prices to a level below $28 a barrel today has further dampened the global economic growth outlook. The International Energy Agency (IEA) has projected that the oil market will remain oversupplied until the end of 2016. The report has disappointed investors who were expecting a bounce in oil prices in the coming months.

Later today, all eyes will be set on the US consumer price index, which will help decide the direction of the US dollar. It is expected that core inflation will rise to 2.1% on an annual basis. A strong CPI data point can serve as an indication for a rate hike by the Federal Reserve, which can push the greenback higher.

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Wednesday’s Movers and Shakers in Biotech

By
Jennifer Aldershot
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biotech

The combination of a three-day weekend in the US and the implications of a Chinese sell off while US markets slept translated to some rough action towards the end of last week. This was especially true in biotech, as a host of collaborations and buyouts hit press at the conclusion of the J.P. Morgan 34th Annual Healthcare Conference. The US open on Tuesday brought us much of the same, and a number of companies moved sharply throughout the session. Here are two of the day’s movers and shakers.

Versartis, Inc.

First up, Versartis, Inc. (NASDAQ:VSAR). Versartis is a development stage biotech that focuses on harnessing the body’s endocrine system to tackle a number of different conditions. The endocrine system is the system that produces and distributes hormones throughout the body, so target indications are extensive – anything from physical development to kidney and digestive system conditions. Versartis is targeting the former, with a main focus of growth hormone deficiency in children. It’s lead candidate, VRS-317, is billed as an improved therapeutic outcome (ITO) product – essentially a drug that has the same efficacy as current standard of care, but improves on certain aspects of the treatment. Things like reduced administration schedule, reduced side effects and extended efficacy timeframes all count as ITO qualities.

Versartis closed out last week at a little over $11 a share. This morning it will open at close to $13 – a more than 18% gain across Tuesday’s session. So why the move? Well, the company published data from its phase Ia/IIb for VRS-317 in The Journal of Clinical Endocrinology & Metabolism. The trial is an attempt to demonstrate the both safety and efficacy, as well as determine optimal dosage, and the journal in question is very highly regarded in this particular field of medicine, so anything positive is a boost for the company. The data demonstrated a significant increase in both the height of patients and growth velocity, with no significant differences between the monthly, twice-monthly or weekly dosing regimens. This means physicians can administer therapy once monthly and maintain the efficacy of a weekly dosing regimen.

Expect further strength as we head into today’s session, as markets digest the data and look ahead to an ongoing phase III extension for the same indication.

Heron Therapeutics, Inc.

Heron Therapeutics, Inc. (NASDAQ:HRTX) closed last week just shy of $23 a share. Throughout Tuesday’s session the company lost 17% of its market capitalization to close out the session at $19. Why the decline? Heron’s lead candidate is Sustol, a sustained release injection therapy that targets the reduction of nausea and vomiting in patients undergoing chemotherapy. The FDA had slated January 17, 2016 as its PDUFA date for the drug. On Friday, however, the agency announced it was delaying its decision. We didn’t get a fixed date for the revised decision – all we know is it’s not going to be before late February. While this isn’t an outright rejection, the fact that the FDA gave neither a fixed timeframe nor a specific reason for the delay doesn’t bode well.

The company gained strength throughout December as the PDUFA date approached, but gave much of the gains back against the backdrop of the wider biotech space selloff at the turn of the new year. The delay compounded this bearish momentum, and puts Heron as one of the week’s weakest biotech stocks.

Looking things from a slightly more positive perspective, and for an investor looking for an albeit risky oversell opportunity, Heron could be an interesting pick. Sustol is in the same category of drugs as a drug currently marketed by GlaxoSmithKline plc (NYSE:GSK) called Zofran, and from a scientific perspective, there looks to be no reason it shouldn’t work. The FDA has likely delayed based on a technicality, rather than a safety/efficacy basis, and if Heron can smooth out the agency’s concerns this decline could quickly correct to the upside. Of course, this is a big assumption, and trying to pick the bottom of the current sell-off is a risky approach. We’re more inclined to wait until we get more information from the FDA before forming a medium term bias. Keep an eye on the end-February indication date for further insight.

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World Markets Anxious Ahead Of World Economic Forum

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the World Economic Forum

Major indices across the globe traded down ahead of a global leaders’ meeting at the World Economic Forum in Davos, Switzerland. The dip came on full force after oil prices drew back to the $28 zone, testing 12-year lows.

Asian markets slump

Asian markets were broadly in sell-off mode. Hong Kong’s Hang Seng took the worst beating, slipping 3.82% or 750 points to 18,866. Second worst was Japan’s Nikkei, which shed 3.7% to 16,416, confirming its entry into bear market territory.

The continuing fall in oil prices is still weighing on markets as investors remain jittery about the direction of the global economy. These concerns were heightened after China, the world’s second-largest economy, continued its slowdown as indicated by the data released yesterday by the Chinese government. China’s GDP growth fell to 6.8% in the fourth quarter from 6.9% in the previous quarter, and investors have not been very trustworthy of official Chinese figures that many see as inflated.

European markets also paired the previous day’s gains and opened sharply lower. Nearly all the indices in European markets registered more than 3% losses with France’s CAC 40 losing the most at 3.49% to 4,123. Germany’s DAX and Europe’s Euronext 100 were down 3.45% and 3.24% off their previous day’s close respectively.

Oil and sentiment

Oil prices, which showed some recovery yesterday, were nevertheless quick to breach the September 2003 low of $27.42. Sentiment surrounding the commodity were weak as Iran readies to flood the saturated global oil market with more supply. Meanwhile, the International Energy Agency (IEA) has kept its forecast for global oil demand static and ruled out any relief in the current oil glut at least until the end of 2015. The agency has even warned that oil prices might fall to fresh lows in the coming days.

US markets fizzle

Yesterday’s U.S. stock market rally was short-lived as the oil price slide weighed on expectations of increased stimulus efforts in China. On Wall Street, the Dow Jones Industrial Average closed 0.17% higher at 16,016.02. The S&P 500 too closed marginally up by 0.05% at 1,881.33, though the Nasdaq Composite was down a quarter of a percent.

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Apple (NASDAQ:AAPL) Stresses Workplace Diversity But Admits Progress Is Slow

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Tim Cook

Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has emphasized the need for workplace diversity on several occasions last year. Cook said that diversity is vital to innovation and important for Apple’s future. According to Cook, the company must meet underlying challenges, present new opportunities and establish a future generation of personnel as diverse as the existing world.

Fighting words, but hiring workers in direct proportion to the diversity of the human race on Earth is next to impossible. Statistics reveal slow progress, unsurprisingly. As per Apple’s last annual report, there was a small increase in the percentage of Apple’s US employees who are Hispanic, black and Asian. The number of black employees rose from 8% in 2014 to 8.7% last year. The number of Hispanic employees increased from 11.5% in 2014 to 11.8% in 2015. Asian employees increased from 16.3% in 2014 to 17.4% last year.

The number of women in Apple’s workforce rose to 30% last year from 27.7% in 2014. The share of women among Apple’s senior employees of about 7,356 managers as well as senior executives dropped to 27.1% from 27.7%.

Apple remains predominantly white and male. Executive managers as well as senior figures are likewise mostly white and male at 83% for both.

Large tech companies such as Alphabet Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) have similar numbers. On average, tech companies are dominated by men, with women making up 15% of the tech force.

Apple’s vice president of worldwide human resources, Denise Young Smith, opined that improving diversity will take a while. She said that the diversity challenge didn’t occur overnight, and it will not change overnight.

Apple claims that Federal authorities are not up to date with changes in the US workforce industry. And perhaps, at the end of the day, Apple should simply concentrate on hiring the best and most reliable workers, regardless of race, skin color, gender or anything else.

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Advanced Micro Devices, Inc. (NASDAQ: AMD) To Launch Zen For High-end Desktops

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Advanced Micro Devices

Advanced Micro Devices, Inc. (NASDAQ: AMD) will launch its highly awaited processor to high-end desktops by the end of 2016. As of now, the chipmaker is in discussions with prominent PC manufacturers on developing Zen-based chips with the code name Summit Ridge. This is according to AMD CEO, Lisa Su.

The Zen chips are expected to be in servers by the first quarter of next year. However, there is no word from the company yet when they would be customized for laptops.

High expectations for AMD

AMD has set high expectations for its Zen processors. It has decided to combine the Polaris architecture-based GPUs with Zen to offer a high-end virtual gaming experience to its users, although the combo won’t be available until the middle of next year.

During the most recent earnings call, CEO Su expressed her confidence in the new products and said that it would help the company gain market share. At present, Intel dominates the market, however, Su hopes that with the introduction of AMD’s core processor Zen chips will present a formidable competition against next-generation Kaby Lake chips and the current Skylake from Intel Corporation (NASDAQ: INTC).

Currently, AMD is offering FX chips for gamers and Summit Ridge with up to eight cores. These desktop chips with a high-core count will support the latest DDR4 memory.

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IEA Warns More Trouble Ahead For Oil

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OPEC

In what can be seen as another setback for the hopes of the oil price recovery crowd, the International Energy Agency (IEA), has warned that the oil market will largely remain oversupplied until the end of the year.

Oil glut to remain in 2016

Keeping in view that the warm winter season across the globe has driven global oil demand growth to a low of 1 million barrels per day in the fourth quarter of 2015, IEA has kept its demand estimate for 2016 as is. The agency is anticipating oil demand of 1.2 million barrels per day.

The development further sparks concerns surrounding a possible oil rebound as OPEC has already refused to move away from full oil production. As a result, Brent crude futures hit a 13 year low at below $30 per barrel.

Some recovery in Brent and U.S. Futures

The IEA noted in its report that the year 2016 will be the third successive year of the oil glut, where supply will exceed the global demand by 1 million barrels per day. The agency has cut its 2016 OPEC crude oil demand projections by 300,000 bpd to 31.7 million bpd.

Meanwhile, Iran is firm on its plan to aggressively increase oil output in a bid to make the most following the lifting of Western sanctions. It is likely to pump in 500,000 bpd additional oil per day.

Amid the various developments, Brent crude futures recovered a bit to $29.89 level. U.S. crude futures traded up by 1.73% to $29.93 a barrel, indicating a rare premium over Brent.

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) traded up by 2.19% to $5.61 during the previous session.

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How Tagging A Person on Facebook (NASDAQ: FB) Can Now Lead To Jail

By
Andy Parker
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Facebook tagging

A woman in New York will face up to a one-year jail term after tagging her former sister-in-law on Facebook Inc (NASDAQ: FB). Maribel Calderon received a restraining order, which prohibited her from contacting her sister-in-law, Maria Gonzalez.

An average interpretation of a restraining order is generally that physical presence is the only chargeable offense. This is specifically what Calderon thought. She went ahead and used her Facebook account to post a status in which she tagged Gonzalez. In her post, she called Gonzalez “stupid” and went ahead to post that “you and your family are sad”. She concluded that “I’m way over you guys, but I guess not in ya agenda”.

Calderon may have forgotten that this is the 21st century, and that common law has seeped into social media. One previous example is Germany’s high court, which recently ruled that Facebook’s friend finder feature violates privacy laws.

During Calderon’s case, which was presided over by Westchester County Supreme Court Justice Susan Capeci, it was ruled that contact via Facebook is still a violation of a restraining order.

Therefore, the fact that Caldron only contacted the victim through social media is still sufficient to establish a violation of protection. This ordeal resulted in Calderon being charged with second-degree criminal contempt with the possibility of landing her in jail for up to one year.

As the digital space is becoming one of the main methods of communication, courts are taking online messages seriously, and such communication is being regarded as a form of contact. Calderon’s case is not the first case that a judge has refused to dismiss despite communication being only in digital form. In 2008, a judge declined to dismiss a criminal complaint after a person sent a friend request through MySpace after a no-contact order had already been issued. During 2009, a woman from Tennessee was arrested for using Facebook’s poke on a person she had been banned from contacting.

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Philip Morris International Inc. (NYSE: PM) Faces Accusation Of Tax Evasion

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Philip Morris

The Thai government’s Department of Special Investigations is accusing Philip Morris International Inc. (NYSE: PM), a leading cigarette manufacturer, of failing to declare the value of cigarettes imported from the Philippines, thereby avoiding close to $2 billion in duties and import taxes.

According to Office of the Attorney General, it only filed a complaint of allegations after a long-running investigation which revealed that between July 2003 and June 2006, Philip Morris (Thailand) Ltd. falsified the worth of various batches of Philippine-made Marlboro and L&M Brand cigarettes.

According to the manufacturer, the case was presented to public prosecutors in September 2009 by the Department of Special Investigations but it was only in 2011 when DSI decided to track the allegations. In August 2011, the DSI’s director general denounced the decision, so the case was taken up by Thailand’s attorney general.

Philip Morris and its other Thailand-based executives could be exposed to a penalty of four times the projected costs of the imported goods plus tax. Company officials may also be subjected to a 10-year jail term according to the senior prosecutor with the Attorney General’s office, Prayuth Bejraguna.

The company for its part released a statement citing that the charges are meritless and unwarranted. Thailand manager Troy Modlin has since stated that Phillip Morris has done nothing wrong and will do everything possible to fight the charges.

At the same time, the company claims that the penalties imposed violate Thailand’s obligations under World Trade Organization rules. Modlin added that prosecuting the case will hurt Thailand’s status in the international community.

Philip Morris and Thailand’s government have been engaged in a tug of war for some time. The last legal battle involved the need for tobacco manufacturers to increase the size of graphic health warnings on cigarette packs from 55% to 85% of the packaging.

After a court hearing, it was ruled that enactment of the measure could potentially inflict irreparable harm on Philip Morris, so the court allowed an injunction. Philip Morris had complained that increasing the warning size would irreparably harm its brand.

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2015: A Record Year For Delta Air Lines, Inc. (NYSE: DAL)

By
Andy Parker
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Delta Air Lines

Delta Air Lines, Inc. (NYSE: DAL) issued a report today affirming that the company’s performance in 2015 was a record for the company, posting $5.9 billion in adjusted pre-tax profit.

Delta CEO Richard Anderson said that he plans to reward the team’s performance with a $1.5 billion profit sharing program for the year. The company was able to accumulate over $3 billion in savings due to lower fuel prices as well as the various cost initiatives that have already been put in place. As a result, the company expects to gain a top ranking among the S&P industrials.

Despite global economic challenges, the airline is expected to improve again this year on earnings growth, margins and cash flow. Nevertheless, the company’s operating revenue for the most recent quarter was reported to have decreased by 2% due to $160 million in foreign currency pressures.

In terms of cost, the company saw a dramatic fall in fuel expenses of $726 million compared with the same period in 2014. The company’s debt initiative continued to lower interest expense. Compared to 2014, the debt reduction initiative was able to save $35 million in debt service costs.

The company experienced a 1.6% fall in passenger unit revenue this quarter to $0.1396. On the other hand, unit revenue was impacted by foreign exchange swings by two percentage points. Further statistics show that capacity was flat at 58.199B available seat miles. There was a significant rise in load factor during this quarter to 85.2%, an equivalent of 240bps.

Delta is a company that has achieved a lot since overcoming its financial troubles. It was named to FORTUNE 500 magazine’s Most Admired Companies. It was also named the worlds most admired airline for the fourth time in five years.

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Six Flags Entertainment Corp (NYSE: SIX) Begins Work On Its First Chinese Theme Park

By
Andy Parker
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theme park

Construction work has begun on Six Flags Entertainment Corp’s (NYSE: SIX) first theme park in China. The company is partnering with Riverside Investment Group on the development project, which is expected to cost $4.6 billion.

The theme park will be located in the Haiyan region of Shanghai and is expected to open doors to visitors in 2019. Six Flags has indicated that its Chinese theme park will open in phases with an exhibition center expected to be ready first.

Exhibition center

Through the exhibition center, Six Flags plans to entice visitors for the theme park by providing them with an interactive preview of what is to come. The exhibition facility is expected to open later this year. Six Flags management is targeting a fall opening for the center.

What to expect

Though far from completion, Six Flags is already talking about what visitors can expect at its first Chinese amusement park. According to the company, the Haiyan theme park will feature family rides, world-class shows and roller coasters. There will also be attractions that highlight Chinese culture.

Economic boost

Six Flags’ Chinese theme park is also expected to come as an economic boon to the Yangtze River Delta and other parts of Eastern China.

Six Flags is hoping to leverage its global image to drive success for its maiden Chinese amusement park. The company is already famous for its multipurpose theme parks that cater to visitors of all ages.

Theme park portfolio

Six Flags operates 18 theme parks in the U.S., Canada and Mexico. It has been in the amusement park business 55 years. Six Flags is the world’s largest regional theme park operator.

Riverside Investment Group, Six Flags’ partner in the operation, is a famed tourism and real estate developer with a number of awards in the trade to its credit. That explains why working with Riverside is also expected to boost Six Flags’ reputation in China.

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