Archives for October 4, 2017

Google Chrome is about to warn you even more about insecure sites

Google Chrome is about to start warning you more often if the site you’re visiting is insecure. Photo: Getty Images

Later this month, your Chrome browser may make you more nervous online. But you should consider that a feature, not a bug.

Unfortunately, other browsers aren’t as proactive about the security of the link between your screen and a site, even if they do better at protecting other aspects of your privacy.

Snooping alert

The next release of Google’s (GOOG, GOOGL) browser ships on Oct. 17 for Mac/Windows/Linux, and the update for Chrome OS comes a week later. When that happens, you’ll see a “Not secure” warning in the browser’s address bar in two common scenarios.

The first will occur when you start to enter any data on a site that doesn’t encrypt your connection — meaning that it doesn’t scramble the data flowing between it and a browser, leaving outsiders free to see everything you do.

This extends a protection Google added in January, which threw the “Not secure” flag on pages that accepted passwords or credit-card data without encryption. Now typing anything at all will raise Chrome’s hackles.

Chrome, which held a 54.89% share of the worldwide browser market in August, according to StatCounter, will also alert you if you activate Incognito mode and visit an unencrypted site.

Future versions will get even more stringent and show the same warning for any site lacking encryption — but in an attention-getting shade of red.

These are how Chrome’s warnings will look versus how they used to look.

Abbreviated awareness

Techies have been able to tell a site encrypts a connection by looking for a lock icon in the browser’s address bar, along with an “https” prefix to a site’s address instead of the usual “http.”

Non-techies, however, have struggled with the concept. A survey released in March by the Pew Research Center found that only 33% of Americans knew what “https” in a site address meant.

By calling out the consequence of the lack of encryption instead of asking users to know “crypto” jargon, Google’s should help improve people’s understanding of the concept.

Here’s how Google’s Chrome will display security notifications.

Chrome’s competitors, meanwhile, remain much less militant about flagging unencrypted connections.

Apple’s (AAPL) Safari, the second-most popular browser, doesn’t offer alerts about unencrypted connections and has been more tolerant of older methods of encryption. In particular, that browser only stopped supporting an obsolete form of site encryption called “SHA-1” earlier this year — some two years after Google began warning users about it.

You can’t say Apple doesn’t worry about privacy, though. Safari 11, part of the new macOS High Sierra release and available as a separate download for some older versions, incorporates an “Intelligent Tracking Protection” feature that stops many advertisers from tracking your activity across different sites.

(Online advertisers are predictably unamused.)

Microsoft’s (MSFT) Edge also trails Chrome in this aspect and didn’t yank SHA-1 support until this spring.

An increasingly common defense

Fortunately, Google’s warnings are also becoming less necessary as more sites adopt encryption. What was once a scarce form of security has become a mainstream ingredient.

Google’s stats show that as of Sept. 23, 63% of pages loaded in Chrome’s Windows version came encrypted, while 74% of pages loaded in Chrome for Mac arrived encrypted. About two and a half years ago, those shares were at 39% and 43%.

Data collected by the Mozilla Firefox browser show encryption rising from 38% of pages in October 2015 to 61% as of Sept. 27. You can credit both pressure from security experts and efforts to make encryption easier and free. One initiative alone, Let’s Encrypt, issued its 100 millionth encryption certificate in June.

This means a lot, especially since the Republican majority in Congress has shown that it doesn’t want to stop internet providers from tracking their customers’ browsing habits.

The same people who know that “https” stands for “hypertext transfer protocol secure” know that they can defeat that kind of scrutiny by using “virtual private networking” apps, but site encryption is security for everyone.

It doesn’t offer protection as complete as VPNs do — your internet provider and other people on the same network can still see the domain names you visit — but the resulting data is less useful to an attacker or an advertiser than what they could get by snooping on an unprotected connection. But you don’t need to install a new app, change any settings or pay a fee to benefit from it. It’s just there, and it’s so easy to overlook that your first hint that this page is encrypted may be reading this sentence.

Why now is an ‘ideal time’ to buy European stocks — and especially banks

  • Europe’s Stoxx 600 is 7 percent up since the start of the year, but analysts believe that there’s further room to go.
  • Improved fundamentals and attractive valuations for stocks are seen as key reasons why investors should continue to focus on the continent

Stocks in Europe still have room to push higher in the next few years despite a series of political pressures weighing on sentiment in the region, equity analysts told CNBC.

“Core Europe remains one of the preferred markets for us and one we believe offers attractive opportunities for investors over a multi-year time period,” Jeff Donlon, managing director of global strategies at investment management firm Manning & Napier, told CNBC via email.

Improved fundamentals and attractive valuations for stocks are seen as key reasons why investors should continue to focus on the continent. This despite an uncertain outcome from the German elections, where Chancellor Angela Merkel saw her government weakened slightly, and despite constant fears over the outcome of Brexit.

“We sense that Brexit gas actually caused the EU to unify rather than pull apart,” Donlon said. “We believe the narrative following the German election and what it means for further EU unity and integration has gotten a bit too bearish,” he added.

Europe’s Stoxx 600 is already up 7 percent since the start of the year. Nonetheless, portfolio managers at Acadian Asset Management believe that European equities have further room to run.

“European stocks currently provide far more generous dividends than U.S. companies,” they said in an emailed note. Dividends are sums of money paid regularly by a company to its shareholders out of its profits. Acadian Asset Management predicts that earnings growth for the current fiscal year will be “considerably higher” for European companies, compared to last year, than for those in the U.S.

What sectors?

Banking is surprisingly one of the most attractive sectors, according to analysts, despite some legacy issues such as high levels of bad loans in southern European nations. This is because their revenues and profits come largely from domestic Europe, where domestic demand is improving, as well as because these lenders have come a long way since the sovereign debt crises to address stability issues.

“We are also finding opportunities in consumer discretionary, building material and construction, industrials, health care services and IT,” Donlon said, given that some companies within these sectors are also largely exposed to domestic Europe.

Acadian Asset Management said: “Despite having lagged U.S. equities for several years … European equities look poised to outperform. For investors considering new or increased allocation to European equities, this appears to be an ideal time.”

And this is not because of outside factors, like increased political risks in the U.S., but due to an improved environment in Europe, the company said.

Investors should get hooked on tobacco stocks’ earnings growth and pricing power, MSIM writes

Tobacco companies seen compounded earnings growth of 7% a year over the past decade, per Morgan Stanley Investment Management data

Getty Images

Tobacco stocks have amassed a mixed record thus far in 2017, and the Food and Drug Administration’s July announcement that it would lower the nicotine levels in cigarettes to nonaddictive levels was seen as adding a new layer of uncertainty for the sector, but they may be well-positioned in the event of a broader market pullback.

Pricing power, as well as the opportunity represented by next-generation products — such as e-cigarettes — could support the group going forward, helping it extend a lengthy period of strong earnings growth.

That view is according to Morgan Stanley Investment Management, which dismissed the potential downside of the FDA’s recent move. “Our view is that any action is likely to be many years away, and is arguably balanced by the opportunity in next-generation products for those who are well positioned,” it wrote in a report exclusively provided to MarketWatch.

See also: Wells Fargo: FDA plan to lower nicotine could be opportunity for Altria, Philip Morris

There has been a huge divergence in the performance of tobacco-related stocks so far this year. While Philip Morris International Inc. PM, -0.61%  is up more than 21% in 2017, a gain that’s nearly twice the 12.9% rise of the S&P 500 SPX, +0.22% Altria Group Inc. MO, +0.75%  shares have lost 7% over the period. Altria, which owns the Marlboro brand of cigarettes, has been pressured this year by some weaker-than-expected earnings, among other factors.

U.S.-listed shares of British American Tobacco PLC BTI, -0.42%  are up 10.8% on the year; in July, the company completed an acquisition of Reynolds American.

The Consumer Staples Select Sector SPDR ETF XLP, +0.11% — which counts both Philip Morris and Altria as top 10 holdings; they comprise a combined 15.9% of the portfolio — is up 4.2% this year.

Despite the mixed records of their share prices, tobacco companies are expected to continue seeing profit growth and increased demand. Philip Morris is forecast to report full-year earnings of $4.84 a share in its 2017 fiscal year, up 8% from 2016, according to data from FactSet. In 2018, profits are seen growing to $5.43 a share. The company’s sales are seen growing 7.2% in 2017 from 2016, and 9.2% in 2018.

Altria Group is expected to grow its full-year profits by 7.6% in its 2017 fiscal year, and growing another 9% in 2018. Revenue is seen up 2.1% in 2017, and 1.9% between full-year 2017 and 2018.

The tobacco industry overall, according to data from Morgan Stanley Investment Management, has seen compounded earnings growth of 7% a year over the past decade, with a yield of 4%, compared with the earnings growth of 0.5% posted by the MSCI World Index, which also has a lower yield.

“The sector’s price-to-earnings multiple can be volatile… but over the long term the relentless compounding has driven strong share price outperformance,” read the report, which was co-written by William Lock, head of the international equity team at Morgan Stanley Investment Management.

Lock credited this to pricing power. “Combining a concentrated industry with limits on advertising in most markets to constrain new entrants, along with a taxation regime that gives cover to price rises, makes for a perfect environment to raise prices steadily.” They added that such increases can be on the order of 5% annually, and “it is important to note that the industry’s compounding has happened in the face or regulatory pressure that has steadily reduced the volumes of cigarettes sold in developed markets.”

The report added that some of the regulation, “such as the rising weight of taxation and advertising bans, have actually helped boost pricing power,” and it didn’t see the FDA’s announcement on nicotine levels as “a break with the model of the last 40 years of regulation.”

Morgan Stanley Investment Management didn’t give specific company recommendations, though it said “it is becoming more important to be selective” when it comes to investing in the sector. The distinguishing issue it sees are the company’s positions within next-generation products. It noted that Philip Morris International’s IQOS is the market leader in the “heat-not-burn” product category, and that it will be licensed to Altria in the U.S. Meanwhile, British American Tobacco’s Glo product line also has a notable market share.

“Our view is that the world is a profoundly unpredictable place at present, and that this unpredictability is not reflected in a market,” the report read. “As a result, we favor quality compounders, which can grow earnings steadily at high returns on operating capital. We put tobacco companies in that category, despite the regulatory noise.”

Options Traders Expect Huge Moves in Morgan Stanley (MS) Stock

Investors in Morgan Stanley MS need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 6, 2017 $39.50 Put had some of the highest implied volatility of all equity options today

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Morgan Stanley shares, but what is the fundamental picture for the company? Currently, Morgan Stanley is a Zacks Rank #3 (Hold) in the Financial – Investment Bank industry that ranks in the Top 39% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased its earnings estimates for the current quarter, while two analysts have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 84 cents per share to 82 cents in that period.

Given the way analysts feel about Morgan Stanley right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

Goldman Sachs Considering Bitcoin Trading

A news report from the Wall Street Journal suggests that Goldman Sachs may be considering a major shift in its investment options. The big bank is reportedly deciding whether or not to allow its client investors to trade directly in bitcoin. If Goldman does adopt the new mode of trading, it would make the bank the first leading Wall Street outfit to allow investors direct access to the cryptocurrency space. While other companies offer a selection of cryptocurrency-related products, Goldman would upend the industry by opening a brand new marketplace in the space. A spokesman for the company indicated that “in response to client interest in digital currencies we are exploring how best to serve them in this space.” What does that mean for the bank and for the banking world at large? (Related: Goldman Sachs Adds Blockchain Page To Main Web Site)

New Regulation

As more and more financial institutions become involved in the cryptocurrency industry, the likelihood that the U.S. federal government will step in with increased regulations over that space increases. If a big bank like Goldman opens up its doors to bitcoin trading, that could push that process along considerably faster. The Federal Reserve has already indicated that it is interested in studying cryptocurrencies in greater detail in order to make recommendations for regulatory changes at the governmental level.

Goldman May Make the Move to Increase Volatility

Coin Telegraph reports that Goldman has seen a major reduction in its revenues, with a 21% decline since last year, even in spite of the bull market for stocks which has taken place this year. The problem may be linked to volatility issues, as the firm has not been able to capitalize on buys and sells that take place within the market as a result of shifts in prices. If the cryptocurrency space offers a new avenue for investors, Goldman may be able to take advantage of the volatility which is built into that system. The Wall Street Journal indicated that “Goldman, once known as the nimblest trader on Wall Street, has struggled more than peers. Revenue in its fixed-income division fell 21% from last year through June, dragged down by poor performance in commodities and currencies.”

That being said, it may be some time before Goldman actually makes any moves related to bitcoin trading. A report by Quartz suggests that the bank has not yet confirmed its entry into the space. The report suggested that Quartz contacted two major bitcoin trading firms, neither of which had any contact with Goldman executives about initiating new trading arenas prior to the news break. “Executives at two of the firms…said they had spoken to Goldman over the years about bitcoin trading and were surprised by the lack of knowledge displayed by the Goldman executives,” the report summarizes.

Amazon’s Private Label Boosted by Whole Foods: Analyst

Amazon’s acquisition of Whole Foods Market, Inc. will provide a significant revenue bump for the company’s private labels, according to an analyst from SunTrust Humphrey Robinson. The acquisition, which occurred in August this year, is expected to add $700 million in sales to Amazon’s private labels, stated analyst Youssef Squali in a note.

When Amazon’s acquisition of Whole Foods was announced, Squali stated that the deal “brings several unfair competitive advantages, that should drive market share gains and better profitability.” On an overall basis, he estimated that Amazon will earn $4.3 billion from private label offerings on its site. Earnings from this category are expected to touch $20 billion, or 5% of the company’s overall earnings, by 2022, according to Squali. (See also: Amazon Quietly Expands Private Labels.)

Squali said that the bulk of those sales, or approximately 70%, will occur in electronic devices manufactured by the company. These include Kindle e-readers and the Echo smart speaker series. Amazon’s foray into apparel, including a slew of private labels, will account for approximately 2% of overall sales by 2022 but “will grow at very robust triple-digit pace” in the next few years. (See also: Amazon Could Take $60B in Apparel Retail: Fitch.)

The Seattle-based company has ramped up its presence in the private label business with an estimated 27 private label brands on its e-commerce site. In addition to groceries, it retails apparel and household products. At the beginning of this year, Amazon announced the launch of its own athletic wear line. Meanwhile, the Whole Foods acquisition brings an array of private-labeled grocery products into Amazon’s fold. (See also: Amazon to Make Its Own Athletic Wear Line.)

Amazon’s move into private label territory should help boost its bottom line, even in the near term. This is because private labels enable the company to exert greater control over product pricing and the supply chain. One of Amazon’s competitors in the apparel retail category – Macy’s, Inc. (M

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Macy’s Inc
M
21.05
+0.77%

) – earned 20% of its overall revenue from private label brands under its umbrella.

Read more: Amazon’s Private Label Boosted by Whole Foods: Analyst | Investopedia https://www.investopedia.com/news/amazons-private-label-boosted-whole-foods-analyst/#ixzz4uVFtISON
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