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Amazon, Exxon Mobil Earnings Weigh On Market To Start New Month As Caution Steers The Wheel – Benzinga

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Look out, everyone. There’s a new month in town, and it’s not starting out very auspiciously for investors.

After stocks enjoyed their best month since 1987 in April, May’s entrance reminded us of the harsh winds of March that we’d probably rather forget. The tech heavyweights that led things up are now kind of leading everything back down. It had been a great week up until yesterday, but the last two days wiped out most of the gains. 

Remember that old twist on the “light at the end of the tunnel” analogy, where the light turns out to be a freight train heading right at you? Maybe that’s how investors felt after Thursday and Friday’s collective selloff ran over the rally that had been gaining traction. Of course more positive news could happen any time to get hopes up again, there’s just no way to know.

In a way, this week was the polar opposite of last, with selling late in the week following an early rally. There’s likely a bit of month-end profit taking playing into this, some technical pressure, and also some “sell the fact” unwinding following so many FAANG companies reporting. Those stocks rallied pretty hard through April and were looking a little overbought to some participants, so it’s not a shock to see them lose ground. The question is how much of this weakness ends up spilling over into next week, so you might want to consider taking a close look at the futures market Sunday night for clues. 

It’s also the first Friday in a while to suffer from the “Friday syndrome” that torched so many rallies earlier this year when many seemed cautious about carrying long positions into the weekend. One Friday doesn’t make a trend, but next Friday is payrolls day, so it could get interesting.

Amazon Leading Tech Lower

The first victim of Friday’s plunge became evident in futures trading late Thursday after trillion-dollar club member Amazon.com, Inc. (NASDAQ: AMZN) reported earnings. The company’s focus on billions of dollars in costs associated with the pandemic came as a bit of a reality check for the market, which had sent AMZN shares to all-time highs amid talk of how firm revenue looked.

Some companies in the tech space have done great, and investors have heard anecdotally about sales but not about costs. All the anecdotal stories focused on revenue being through the roof, but AMZN’s earnings suggested it hasn’t all been profitable revenue growth, and that the current economic data is affecting these companies as well.

The Information Technology sector is what led everything higher over the last month, and companies like Apple, Inc. (NASDAQ: AAPL), AMZN, and Microsoft Corporation (NASDAQ: MSFT) are heavyweights that dominate the major indices. Their performance or lack thereof can have a huge impact on the overall market.

AMZN had great revenues, but expenses went up at the same time and a lot of them were employee-related and front loaded, meaning they could hurt the company’s current quarter. AAPL, also fresh off its earnings report, might have worried investors by indicating they’re not sure how many iPhones they can sell in current conditions.

To bring back another old friend some would rather forget, trade tensions with China reappeared in the headlines Friday as The Washington Post warned that the administration might be considering new trade restrictions as President Trump has begun blaming China for the pandemic. Geopolitics tied up the market for long stretches last year before yielding to the virus. Still, apparently we’re not out of the woods when it comes to the trade war. 

Volatility, which had died down pretty dramatically, surged on Friday with the Cboe Volatility Index (VIX) once again approaching 40 after falling to the low-30’s earlier in the week. This served as a reminder that things could remain choppy for a while, with so much unknown. 

The market was already lower Friday before Tesla, Inc. (NASDAQ: TSLA) CEO Elon Musk delivered a head-scratching statement about his company’s stock price being too high. It’s hard to think of any other CEO who’s ever said that, but Musk did and the stock suffered for it. This might serve as another reminder to investors about being careful what you get into. Fundamentals drive markets over the long term, so trading on emotions or headlines can be a double-edged sword. 

While the week ended and the month began on a sour note, let’s not forget some of the positive news that helped fuel the rally earlier this week. Positive news on drug trials and strong earnings from companies like MSFT, Facebook, Inc. (NASDAQ: FB), and Alphabet, Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) shouldn’t be forgotten so fast. Together, these three have trillions in market valuation and exert a really strong influence on the major indices.

AAPL fell Friday despite the positive news that it plans to increase its dividend and continue buying back shares. The company also beat Wall Street’s consensus on earnings and revenue. Seeing this kind of news from what’s arguably the most closely watched company in the world could be taken as a sign of confidence that AAPL can weather the storm, as we noted this morning.

The Depowered…

Though AMZN and AAPL arguably led the charge lower beginning with yesterday’s earnings releases, it’s the Energy sector at the bottom of the sector leaderboard Friday.  Crude oil futures (/CL) had a decent day as the front-month U.S. contract clawed back to nearly $20 a barrel by the time trading closed. Still, Energy companies like Exxon Mobil Corporation (NYSE: XOM)—which reported earnings early Friday—and ConocoPhillips (NYSE: COP) both plunged around 7%. Phillips 66 (NYSE: PSX)—which also released this morning—fared even worse, with shares falling over 9%.

Even though June crude futures are knocking on the door of $20, it could be hurting Energy firms that futures contracts farther out into the year have pretty much all descended from the $30’s into the $20’s over the last few weeks, a sign that investors might expect the supply/demand picture to stay out of balance for a while. In other words, no matter how you slice it, the oil services industry is in for a tough slog.  

Energy had the worst day of any sector, falling 6%.

…and the TurboCharged

While big tech and Energy stocks lost significant ground Friday, some of the companies that tend to have traded in the opposite direction of the tech behemoths made progress. Several major stocks had pretty decent days, one of them being The Clorox Company (NYSELCLX). That company had a great quarter like AMZN, but without the added employment and shipping expenses.

Two other stocks that have traded against the grain recently are Walmart (NYSE: WMT) and Costco Wholesale Corporation (NASDAQ: COST). It’s amazing that every time the overall market goes down, these are two that people seem to turn to, and, as if on cue, they both turned up Friday. That’s been the story and it got a new chapter written Friday. However, it’s not necessarily the happiest story if you’re a bull, because those are the kinds of companies that sell staple products that typically do well when people are hunkering down in a crisis. It might be seen as a better indicator when you see companies in the travel and entertainment sectors do well, because that could point toward people having faith in this crisis starting to go away.

The market is arguably in better shape from a technical perspective than it was back in March. Recent selloffs tended to get met with buying interest amid positive feelings that the Fed has investors’ backs. That said, the S&P 500’s (SPX) test and failure to break through its 200-day moving average earlier this week could have weighed on stocks Friday, along with a failure to stay above the 2940 area, which was about where a long-term top was reached in the fall of 2018 before everything fell out of bed in the final quarter of that year.

We’re now about halfway through earnings season, and it’s like baseball great Yogi Berra once said, “You never know.” Investors just haven’t learned a ton from earnings. Only that there’s more costs and companies don’t know what’s ahead. That’s a strong reminder that we’re not out of the woods.

One other interesting note and then you’re free to enjoy your weekend: The 10-year Treasury note did a pretty decent job hanging in above 0.6% this week, though that’s incredibly low historically. The fact that it didn’t challenge its all-time lows set back in March even as stocks fizzled Friday could be a positive sign heading into the new week. 


CHART OF THE DAY: SPX HITS A HARD WALL. After the S&P 500 Index (SPX–candlestick) started moving higher than its 50% Fibonacci retracement level, all eyes were at the next resistance level—61.8%. It reached that level on Wednesday, went slightly above it, and then hit its 200-day exponential moving average (blue line). That was a hard wall to break through. SPX has moved lower since then and is now heading toward its 50% retracement level. Data Source: S&P Dow Jones Indices. Chart Source: The thinkorswim® platform from TD AmeritradeFor illustrative purposes only. Past performance does not guarantee future results.

TD Ameritrade® commentary for educational purposes only. Member SIPC.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Ottawa orders TikTok’s Canadian arm to be dissolved

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The federal government is ordering the dissolution of TikTok’s Canadian business after a national security review of the Chinese company behind the social media platform, but stopped short of ordering people to stay off the app.

Industry Minister François-Philippe Champagne announced the government’s “wind up” demand Wednesday, saying it is meant to address “risks” related to ByteDance Ltd.’s establishment of TikTok Technology Canada Inc.

“The decision was based on the information and evidence collected over the course of the review and on the advice of Canada’s security and intelligence community and other government partners,” he said in a statement.

The announcement added that the government is not blocking Canadians’ access to the TikTok application or their ability to create content.

However, it urged people to “adopt good cybersecurity practices and assess the possible risks of using social media platforms and applications, including how their information is likely to be protected, managed, used and shared by foreign actors, as well as to be aware of which country’s laws apply.”

Champagne’s office did not immediately respond to a request for comment seeking details about what evidence led to the government’s dissolution demand, how long ByteDance has to comply and why the app is not being banned.

A TikTok spokesperson said in a statement that the shutdown of its Canadian offices will mean the loss of hundreds of well-paying local jobs.

“We will challenge this order in court,” the spokesperson said.

“The TikTok platform will remain available for creators to find an audience, explore new interests and for businesses to thrive.”

The federal Liberals ordered a national security review of TikTok in September 2023, but it was not public knowledge until The Canadian Press reported in March that it was investigating the company.

At the time, it said the review was based on the expansion of a business, which it said constituted the establishment of a new Canadian entity. It declined to provide any further details about what expansion it was reviewing.

A government database showed a notification of new business from TikTok in June 2023. It said Network Sense Ventures Ltd. in Toronto and Vancouver would engage in “marketing, advertising, and content/creator development activities in relation to the use of the TikTok app in Canada.”

Even before the review, ByteDance and TikTok were lightning rod for privacy and safety concerns because Chinese national security laws compel organizations in the country to assist with intelligence gathering.

Such concerns led the U.S. House of Representatives to pass a bill in March designed to ban TikTok unless its China-based owner sells its stake in the business.

Champagne’s office has maintained Canada’s review was not related to the U.S. bill, which has yet to pass.

Canada’s review was carried out through the Investment Canada Act, which allows the government to investigate any foreign investment with potential to might harm national security.

While cabinet can make investors sell parts of the business or shares, Champagne has said the act doesn’t allow him to disclose details of the review.

Wednesday’s dissolution order was made in accordance with the act.

The federal government banned TikTok from its mobile devices in February 2023 following the launch of an investigation into the company by federal and provincial privacy commissioners.

— With files from Anja Karadeglija in Ottawa

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Here is how to prepare your online accounts for when you die

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LONDON (AP) — Most people have accumulated a pile of data — selfies, emails, videos and more — on their social media and digital accounts over their lifetimes. What happens to it when we die?

It’s wise to draft a will spelling out who inherits your physical assets after you’re gone, but don’t forget to take care of your digital estate too. Friends and family might treasure files and posts you’ve left behind, but they could get lost in digital purgatory after you pass away unless you take some simple steps.

Here’s how you can prepare your digital life for your survivors:

Apple

The iPhone maker lets you nominate a “ legacy contact ” who can access your Apple account’s data after you die. The company says it’s a secure way to give trusted people access to photos, files and messages. To set it up you’ll need an Apple device with a fairly recent operating system — iPhones and iPads need iOS or iPadOS 15.2 and MacBooks needs macOS Monterey 12.1.

For iPhones, go to settings, tap Sign-in & Security and then Legacy Contact. You can name one or more people, and they don’t need an Apple ID or device.

You’ll have to share an access key with your contact. It can be a digital version sent electronically, or you can print a copy or save it as a screenshot or PDF.

Take note that there are some types of files you won’t be able to pass on — including digital rights-protected music, movies and passwords stored in Apple’s password manager. Legacy contacts can only access a deceased user’s account for three years before Apple deletes the account.

Google

Google takes a different approach with its Inactive Account Manager, which allows you to share your data with someone if it notices that you’ve stopped using your account.

When setting it up, you need to decide how long Google should wait — from three to 18 months — before considering your account inactive. Once that time is up, Google can notify up to 10 people.

You can write a message informing them you’ve stopped using the account, and, optionally, include a link to download your data. You can choose what types of data they can access — including emails, photos, calendar entries and YouTube videos.

There’s also an option to automatically delete your account after three months of inactivity, so your contacts will have to download any data before that deadline.

Facebook and Instagram

Some social media platforms can preserve accounts for people who have died so that friends and family can honor their memories.

When users of Facebook or Instagram die, parent company Meta says it can memorialize the account if it gets a “valid request” from a friend or family member. Requests can be submitted through an online form.

The social media company strongly recommends Facebook users add a legacy contact to look after their memorial accounts. Legacy contacts can do things like respond to new friend requests and update pinned posts, but they can’t read private messages or remove or alter previous posts. You can only choose one person, who also has to have a Facebook account.

You can also ask Facebook or Instagram to delete a deceased user’s account if you’re a close family member or an executor. You’ll need to send in documents like a death certificate.

TikTok

The video-sharing platform says that if a user has died, people can submit a request to memorialize the account through the settings menu. Go to the Report a Problem section, then Account and profile, then Manage account, where you can report a deceased user.

Once an account has been memorialized, it will be labeled “Remembering.” No one will be able to log into the account, which prevents anyone from editing the profile or using the account to post new content or send messages.

X

It’s not possible to nominate a legacy contact on Elon Musk’s social media site. But family members or an authorized person can submit a request to deactivate a deceased user’s account.

Passwords

Besides the major online services, you’ll probably have dozens if not hundreds of other digital accounts that your survivors might need to access. You could just write all your login credentials down in a notebook and put it somewhere safe. But making a physical copy presents its own vulnerabilities. What if you lose track of it? What if someone finds it?

Instead, consider a password manager that has an emergency access feature. Password managers are digital vaults that you can use to store all your credentials. Some, like Keeper,Bitwarden and NordPass, allow users to nominate one or more trusted contacts who can access their keys in case of an emergency such as a death.

But there are a few catches: Those contacts also need to use the same password manager and you might have to pay for the service.

___

Is there a tech challenge you need help figuring out? Write to us at onetechtip@ap.org with your questions.

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Google’s partnership with AI startup Anthropic faces a UK competition investigation

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LONDON (AP) — Britain’s competition watchdog said Thursday it’s opening a formal investigation into Google’s partnership with artificial intelligence startup Anthropic.

The Competition and Markets Authority said it has “sufficient information” to launch an initial probe after it sought input earlier this year on whether the deal would stifle competition.

The CMA has until Dec. 19 to decide whether to approve the deal or escalate its investigation.

“Google is committed to building the most open and innovative AI ecosystem in the world,” the company said. “Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights.”

San Francisco-based Anthropic was founded in 2021 by siblings Dario and Daniela Amodei, who previously worked at ChatGPT maker OpenAI. The company has focused on increasing the safety and reliability of AI models. Google reportedly agreed last year to make a multibillion-dollar investment in Anthropic, which has a popular chatbot named Claude.

Anthropic said it’s cooperating with the regulator and will provide “the complete picture about Google’s investment and our commercial collaboration.”

“We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others,” it said in a statement.

The U.K. regulator has been scrutinizing a raft of AI deals as investment money floods into the industry to capitalize on the artificial intelligence boom. Last month it cleared Anthropic’s $4 billion deal with Amazon and it has also signed off on Microsoft’s deals with two other AI startups, Inflection and Mistral.

The Canadian Press. All rights reserved.

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