usfinancereviewer, Author at US Finance Review

Amazon’s Shares Reach Record High

Amazon.com Inc.’s shares rose to a record high over the weekend as domestic growth expands and regional profits increase. International growth has been slow but has not had a significant impact on the retailer’s record.

According to Wells Fargo analyst Matt Nemer, “their biggest market looks really healthy.”

Amazon has been spending billions of dollars on new expansion efforts in international markets as it breaks into the technology industry by offering gadgets like tablets and cloud computing services to large corporations and governments. Though the spending has taken a toll on earnings, investors have shown confidence in Amazon’s Jeff Bezos and his development plans.

Amazon revealed that its sales in North America have jumped 30% to $9.5 billion in the second quarter while operating profit in the region climbed from $344 million to $409 million. Chief Financial Officer Tom Szkutak explained that “sales of apparel and consumable are growing very strongly and this is helping bring shoppers to Amazon’s website more frequently.”

Reuters explains that Amazon’s cloud business, Amazon Web Services, “was among the fastest growing part of the company. Amazon includes results from this unit in its ‘other’ segment for reporting purposes and revenue from this area jumped 61 percent to $892 million in the second quarter.”

Toys “R” Us Reveals its First Quarter Results

Toys “R” Us, Inc., one of the largest toy stores in the world, recently released its financial report for the first quarter.

Toys “R” Us Interim Chief Executive Officer Antonio Urcelay explained: “Similar to other retailers, our soft sales in the first quarter we partially impacted by the ongoing challenges of the global economic environment and the prolonged cool weather conditions around the world. Additionally, the continued weakness in the electronics and entertainment category negatively affected revenues.

“As we look forward to the remainder of the year, we are confident in our overall strategy and are committed to investing in initiatives that focus on providing exemplary service to our customers, enhancing our omnichannel capabilities to maximize sales through all channels, expanding our global reach, including throughout China and Southeast Asia, and deepening our assortment of differentiated products.”

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Toys “R” Us Reveló los resultados de su primer trimestre

Toys “R” Us, Inc., una de las jugueterías más grandes del mundo, recientemente reveló el reporte financiero de su primer trimestre.

El director Ejecutivo Interino de Toys “R” Us, Antonio Urcelay, explicó: “Al igual que otras tiendas de ventas al por menor, nuestras ventas en el primer trimestre se vieron parcialmente impactadas por los retos actuales que enfrenta el ámbito económico y los fríos prolongados alrededor del mundo. Además, la continúa debilitación de la categoría de electrónicos y entretenimiento afectaron las ganancias de forma negativa.

“Al mirar hacia adelante al resto del año, estamos confiados en nuestra estrategia general y comprometidos a invertir en iniciativas que se enfoquen en proveer de servicio ejemplar a nuestros clientes, mejorando nuestras capacidades de un canal para maximizar nuestras ventas por medio de todos los canales, expandiendo nuestro alcance global, incluyendo todo a lo largo de China y el sureste asiático, y profundizando nuestro surtido de productos diferenciados.”

English Translation

Moody’s Changes Outlook from ‘Negative’ to ‘Stable’

For the first time since 2008, Moody’s has upped its outlook of the U.S. banking system as a result of improving economic conditions that compensate for low interest rates.

Moody has changed its outlook to ‘stable’ from its former status of ‘negative’ which has lasted nearly half a decade.

According to BigPond News, Moody’s says “sustained GDP growth and improving employment conditions will help banks protect their balance sheets, and after another year of reducing credit-related costs and restoring capital, U.S. banks are now even better-positioned to face any future economic downturn.”

The agency added that low interest rates will have the most impact on financial performance over the next 12-18 months.

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Moody cambia la perspectiva de ‘Negativo’ a ‘Estable’

Por primera vez desde el 2008, Moody ha elevado su perspectiva del sistema bancario de los Estados Unidos como resultado de las mejoras en las condiciones económicas que compensan las bajas tasas de interés.

Moody ha cambiado su perspectiva a ‘estable’ de su pasado estado de ‘negativo’ que ha durado casi media década.

De acuerdo con BigPond News, Moody dice “el crecimiento sostenido del GDP y las mejoras de las condiciones de empleo ayudará a los bancos a proteger sus balances, y después de un año de reducción de costos relacionados al crédito y restaurar capitales, los bancos de los Estados Unidos están ahora aún mejor posicionados para afrontar cualquier recesión económica.”

La agencia agregó que las bajas tasas de interés tendrán el mayor impacto en el rendimiento financiero durante los próximos 12 a 18 meses.
English translation

Current Value of Gold

For the first time in four sessions, 14 May witnessed an increase in gold. This was assisted by a softer dollar. As well, a somewhat unexpected increase in the US retail sales last month enhanced the notion that America’s economy remains buoyant. The precious metal reached a peak of $1,444.96 an ounce and stood at $1,440.66 by 0419 GMT, up $10.61.

However, this has not been the general trend. New Delhi witnessed a drop of almost Rs 400 which boosted retail purchase for jewelers reporting around a 15 percent increase in sales. Indeed, there was a substantial amount of gold purchasing on Akshaya Tritiya Day, which is seen as “an auspicious day for buying gold and silver.” There was also an increase of 14 percent in gold EFTs on NSE Monday.

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Tesla Adds Lease Option to Boost Model S Sales

In a bid to increase first quarter profit, Tesla Motors has added lease-style financing for its Model S. According to a Tesla statement, program partners U.S. Bancorp and Wells Fargo & Co. will be providing customers with 10% of the purchase price. They will be reimbursed through a $7,500 U.S. tax credit and state incentives. The company’s website reveals that monthly payments under the offer are as low as $500.

“Just factoring in stuff that’s true out of pocket, you can buy the 60-kilowatt Model S for $400 or $500 a month, net cash out of pocket,” said Tesla’s Elon Musk. “I consider gasoline to be a tangible cost.”

Musk added that though the financing plan is a 66-month loan with a 2.95% interest rate, customers will be able to resell their car to Tesla after a three-year lease. The Model S has a base price of $69,900 before the tax credit. Musek explains that the company’s program makes the car “affordable to a much broader audience than people think is usually the case.”

Housing Market Unlikely to Grow Without Government Guarantee

The majority of housing experts see little hope for the American mortgage market unless the government pledges to repay lenders.

A recent report stated:

“For the foreseeable future, there is simply not enough capacity on the balance sheets of U.S. banks to allow a reliance on depository institutions as the sole source of liquidity for the mortgage market.”

The report, entitled “Housing America’s Future: New Directions for National Policy,” was issued by a group of members of the housing establishment.

According to the panel, this is not an indictment of the American banking system, because it would prefer to trade leveraged derivatives then hold on to mortgage loans.

The report adds, “Given the size of the market and capital constraints on lenders, the secondary market for mortgage-backed securities must continue to play a critical role in providing mortgage liquidity.”

Investors are unlikely to to finance mortgages without a government guarantee.

Ally’s Auto-Finance Business Expects Gains in 2013

According to Ally Financial Inc.’s CEO, the company will repay the government by 2014 thanks to its auto-finance business.

CEO Michael Carpenter explained that Ally will be able to make a large payment this year. As the second-largest remaining investment by the U.S. Treasury’s bailout fund, Ally still has $14.6 billion outstanding from the Treasury’s Troubled Asset Relief Program.

“We are 100 percent confident that we can repay the American taxpayer completely,” Carpenter said. “Whether that’s this year or next year, I don’t know. But it’s in that time frame.”

In an effort to increase company focus on autos and its online retail bank, Ally has been selling assets outside of the United States as well. Its auto unit has also expanded, providing used, leasing and subprime financing offerings early this year, before agreements with General Motors and Chrysler expire.

Housing Prices on the Rise, Expected to Boost Consumer Spending

Housing prices in the U.S. have climbed to their highest rates in over six years, a strong indicator that the real estate market will have a large part in U.S. economic growth in 2013.

According to recent data, the S&P/Case-Shiller index rose 5.5% since the last quarter of 2011, the most significant growth since the summer of 2006. The progress is expected to continue as mortgage rates hover around a record low while property values rise. Experts believe this will boost consumer spending and sentiment, despite this month’s payroll tax increase.

Millan Mulraine, an economist at TD Securities, explains: “Rising home prices are providing an important cushion.” Lower confidence and reduced paychecks “will slow consumer spending this quarter, but the effect will abate in coming months,” she added. “The souring in moods is a reflection of the brinkmanship in Washington and the higher payroll tax.”

Michael McKee, economics editor at Bloomberg, discusses the recent developments in home prices here.